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<SEC-DOCUMENT>0000950123-10-109437.txt : 20101129
<SEC-HEADER>0000950123-10-109437.hdr.sgml : 20101129
<ACCEPTANCE-DATETIME>20101129172355
ACCESSION NUMBER:		0000950123-10-109437
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20101129
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20101129
DATE AS OF CHANGE:		20101129

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CAVCO INDUSTRIES INC
		CENTRAL INDEX KEY:			0000278166
		STANDARD INDUSTRIAL CLASSIFICATION:	MOBILE HOMES [2451]
		IRS NUMBER:				860214910
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-08822
		FILM NUMBER:		101219783

	BUSINESS ADDRESS:	
		STREET 1:		1001 N. CENTRAL AVE
		STREET 2:		SUITE 800
		CITY:			PHOENIX
		STATE:			AZ
		ZIP:			85004
		BUSINESS PHONE:		602-256-6263

	MAIL ADDRESS:	
		STREET 1:		1001 N. CENTRAL AVE
		STREET 2:		SUITE 800
		CITY:			PHOENIX
		STATE:			AZ
		ZIP:			85004
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>c09057e8vk.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML>
<HEAD>
<TITLE>Form 8-K</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="margin-left: 0.25in; width: 7.5in;font-family: 'Times New Roman',Times,serif">
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 8-K</B>
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>CURRENT REPORT<BR>
Pursuant to Section&nbsp;13 OR 15(d) of The Securities Exchange Act of 1934</B>
</DIV>

<!-- xbrl,dc -->
<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Date of Report (Date of earliest event reported): November 29, 2010</B></DIV>
<!-- /xbrl,dc -->
<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>Cavco Industries, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="32%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="32%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="32%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
<TD nowrap align="center" valign="top"><B>Delaware
</B></TD>
<TD>&nbsp;</TD>
<TD align="center" valign="top"><B>000-08822
</B></TD>
<TD>&nbsp;</TD>
<TD align="center" valign="top"><B>56-2405642</B></TD>
</TR>
<TR style="font-size: 1px">
<TD valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD valign="top" align="left">&nbsp;</TD>
<TD valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD valign="top" align="left">&nbsp;</TD>
<TD valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">(State or other jurisdiction<BR>
of incorporation)
</TD>
<TD>&nbsp;</TD>
<TD align="center" valign="top">(Commission File Number)
</TD>
<TD>&nbsp;</TD>
<TD align="center" valign="top">(IRS Employer Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="48%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
<TD align="center" valign="top"><B>
1001 North Central Avenue, Suite 800,<BR> Phoenix, Arizona
</B></TD>
<TD>&nbsp;</TD>
<TD align="center" valign="top"><B>&nbsp;<BR>85004</B></TD>
</TR>
<TR style="font-size: 1px">
<TD valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD valign="top" align="left">&nbsp;</TD>
<TD valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">(Address of principal executive offices)
</TD>
<TD>&nbsp;</TD>
<TD align="center" valign="top">(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Registrant&#146;s telephone number, including area code: <B>(602) 256-6263</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Not applicable</B></DIV>

<DIV align="center" style="font-size: 10pt"><FONT style="border-top: 1px solid #000000">(Former name or former address, if changed since last report.)</FONT></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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: </DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="3%" nowrap align="left"><FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="3%" nowrap align="left"><FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="3%" nowrap align="left"><FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="3%" nowrap align="left"><FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</TD>
</TR>

</TABLE>
</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio --> </DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;1.01 Entry into a Material Definitive Agreement.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">On November&nbsp;29, 2010, Fleetwood Homes, Inc. (&#147;FHI&#148;), a subsidiary of Cavco Industries, Inc., a
Delaware corporation (the &#147;Corporation&#148;), entered into a Debtor-In-Possession Revolving Credit
Agreement (the &#147;DIP Agreement&#148;) and a Security Agreement (the &#147;DIP Security Agreement&#148;) with Palm
Harbor Homes, Inc. (&#147;Palm Harbor&#148;) and certain of its subsidiaries. Also on November&nbsp;29, 2010, a
subsidiary of FHI, Palm Harbor Homes, Inc., a Delaware Corporation, (&#147;Acquisition Co.&#148;) entered
into an Asset Purchase Agreement (the &#147;Purchase Agreement&#148;) with Palm Harbor and certain of its
subsidiaries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Palm Harbor and those of its subsidiaries that are parties to the DIP Agreement and the
Purchase Agreement filed for chapter 11 bankruptcy protection on November&nbsp;29, 2010.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Pursuant to the terms and conditions of the DIP Agreement, FHI has agreed to provide a $50
million debtor-in-possession credit facility (which may increase to $55&nbsp;million if certain
conditions are met) to finance Palm Harbor&#146;s reorganization under chapter 11 of the U.S. Bankruptcy
Code. The DIP Agreement bears interest at 7% per annum and matures on the earlier of April&nbsp;15,
2011 or 15&nbsp;days after entry of a final order from the U.S. Bankruptcy Court approving the sale of
Palm Harbor&#146;s assets. Palm Harbor&#146;s obligations under the DIP Agreement will be secured by liens
on substantially all of Palm Harbor&#146;s assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Pursuant to the terms and conditions of the Purchase Agreement, Palm Harbor and its applicable
subsidiaries have agreed to sell, and Acquisition Co. has agreed to purchase, substantially all of
Palm Harbor&#146;s assets comprising its manufactured housing business, its finance business, and its
insurance business. In addition, Acquisition Co. will assume certain liabilities of Palm Harbor,
including certain product warranty obligations. The transactions contemplated by the Purchase
Agreement are expected to be conducted pursuant to a sale process under section 363 of the U.S.
Bankruptcy Code. The consideration pertaining to the purchase of the Palm Harbor assets and
assumption of certain liabilities is expected to be approximately $57.5&nbsp;million; however, the final
consideration is subject to certain post-closing adjustments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The DIP Agreement, the DIP Security Agreement, and the Purchase Agreement are subject to the
approval of the U.S. Bankruptcy Court. The Corporation expects to receive interim Bankruptcy Court
approval of the DIP Agreement and the DIP Security Agreement by December&nbsp;1, 2010 and expects to
receive Bankruptcy Court approval of the Purchase Agreement, including approval of Acquisition Co.
as the &#147;stalking horse&#148; bidder for the Palm Harbor assets in the section 363 sale auction process,
in late December&nbsp;2010 or early January&nbsp;2011.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The foregoing descriptions of the DIP Agreement and DIP Security Agreement do not purport to
be complete and are qualified in their entirety by reference to the DIP Agreement and the DIP
Security Agreement, which are filed as Exhibits 10.1 and 10.2 hereto and are incorporated herein by
reference. The foregoing description of the Purchase Agreement does not purport to be complete and
is qualified in its entirety by reference to the Purchase Agreement, which is filed as Exhibit&nbsp;10.3
hereto and is incorporated herein by reference.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The DIP Agreement, the DIP Security Agreement and the Purchase Agreement are attached as
exhibits hereto to provide you with information regarding the terms of the transactions described
therein and are not intended to provide you with any other factual information or disclosure about
the Corporation or any of its subsidiaries. The representations and warranties and covenants
contained in the DIP Agreement, the DIP Security Agreement and the Purchase Agreement were made for
the purposes of the DIP Agreement, the DIP Security Agreement and the Purchase Agreement,
respectively, and as of a specific date, were solely for the benefit of the parties to the DIP
Agreement, the DIP Security Agreement and the Purchase Agreement, may be subject to limitations
agreed upon by the parties, including being qualified by disclosure schedules made for the purposes
of allocating contractual risk between the parties thereto instead of establishing these matters as
facts, and may be subject to standards of materiality applicable to the parties that differ from
those applicable to investors. Moreover, information concerning the subject matter of the
representations and warranties may change after the date of the DIP Agreement, the DIP Security
Agreement and the Purchase Agreement, which subsequent information may or may not be reflected in
the Corporation&#146;s public disclosures.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;9.01 Financial Statements and Exhibits.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">(d)&nbsp;Exhibits
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Exhibit No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Debtor-In-Possession Revolving Credit Agreement dated November&nbsp;29, 2010</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Security Agreement dated November&nbsp;29, 2010</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Asset Purchase Agreement dated November&nbsp;29, 2010</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">99.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Press Release dated November&nbsp;29, 2010</DIV></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">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.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">CAVCO INDUSTRIES, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ James P. Glew
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">James P. Glew&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Secretary&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Date: November&nbsp;29, 2010
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>EXHIBIT INDEX</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Exhibit No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Debtor-In-Possession Revolving Credit Agreement dated November&nbsp;29, 2010</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Security Agreement dated November&nbsp;29, 2010</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Asset Purchase Agreement dated November&nbsp;29, 2010</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">99.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Press Release dated November&nbsp;29, 2010</DIV></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>c09057exv10w1.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
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<TITLE>Exhibit 10.1</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><B>Exhibit&nbsp;10.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">DEBTOR-IN-POSSESSION REVOLVING CREDIT AGREEMENT
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">Dated as of November&nbsp;29, 2010<BR><BR>
among
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">PALM HARBOR HOMES, INC.,<BR>
AND<BR>
THE OTHER DEBTORS NAMED HEREIN,
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">each as a Debtor and Debtor-in-Possession<BR>
and, collectively,<BR>
as the Borrowers
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">and
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">FLEETWOOD HOMES, INC.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">as Lender
</DIV>


<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">




</TABLE>
</DIV><P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
    <TD>&nbsp;</TD>
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    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE I DEFINITIONS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;1.01 Definitions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;1.02 Computation of Time Periods</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;1.03 Accounting Terms; Certain Calculations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE II THE LOAN</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.01 Loan; Reserves and Releases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.02 Use of Proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.03 Borrowing; Releases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.04 Funding of Borrowings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.05 Repayment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.06 Prepayments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.07 Note</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.08 Expiration of Commitments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.09 Interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.10 Increased Costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.11 Payments and Computations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.12 Taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.13 Super-Priority Nature of Obligations and Liens</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.14 No Discharge; Survival of Claims</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.15 Waiver of Any Priming and Surcharge Rights</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.16 Control Account; Sweep of Funds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE III CONDITIONS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;3.01 Conditions Precedent to the initial Borrowing of the Loan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;3.02 Conditions Precedent to Each Borrowing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE IV REPRESENTATIONS AND WARRANTIES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.01 Financial Condition</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.02 No Changes or Restricted Payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.03 Due Incorporation and Authority</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.04 No Conflicts; Default or Event of Default</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.05 Organizational Documents; Meeting Minutes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
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<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->-i-<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>TABLE OF CONTENTS<BR>
(continued)</B>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
    <TD>&nbsp;</TD>
</TR>


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<!-- Begin Table Body -->
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.06 Litigation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.07 Intellectual Property</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.08 Taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.09 ERISA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.10 Governmental Regulations, Etc</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.11 No Subsidiaries</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.12 Use of Proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.13 Real Property</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.14 Environmental Matters</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.15 Disclosure</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.16 Bank Accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.17 Account Debtors</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.18 Insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.19 Labor Matters</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.20 Reorganization Matters</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.21 Investment Banking and Finder&#146;s Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE V AFFIRMATIVE COVENANTS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.01 Financial Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.02 Certificates; Other Information</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.03 Notices</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.04 Payment of Obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.05 Conduct of Business and Maintenance of Existence</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.06 Maintenance of Property; Insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.07 Inspection of Property; Books and Records; Discussions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.08 Environmental Laws</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.09 Application of Proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.10 Compliance with Budgets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.11 Compliance with Laws, Etc</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.12 Payment of Taxes, Etc</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.13 Collateral Documents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.14 Accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.15 Bankruptcy Cases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->-ii-<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>TABLE OF CONTENTS<BR>
(continued)</B>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE VI NEGATIVE COVENANTS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.01 Indebtedness</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.02 Liens</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.03 No Further Negative Pledges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.04 Consolidation, Merger, Asset Sale, etc</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.05 Sale Leasebacks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.06 Acquisitions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.07 Investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.08 Restricted Payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.09 No Transfers to Affiliates</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.10 Limitations on Transactions with Affiliates</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.11 Payment of Other Indebtedness</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.12 Modification of Contractual Obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.13 Bankruptcy Matters</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.14 No Material Pleadings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.15 Fiscal Year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.16 Accounting Changes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE VII EVENTS OF DEFAULT</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;7.01 Events of Default</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;7.02 Acceleration; Remedies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE VIII ADDITIONAL SECURITY</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.01 Priority and Liens</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE IX MISCELLANEOUS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.01 Notices</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.02 Right of Set-Off</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.03 Benefit of Agreement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.04 No Waiver; Remedies Cumulative</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.05 Payment of Expenses; Indemnification</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->-iii-<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>TABLE OF CONTENTS<BR>
(continued)</B>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.06 Amendments, Waivers and Consents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.07 Survival</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.08 Waiver</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.09 Governing Law</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.10 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.11 Binding Effect; Assignment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.12 Interpretation; Headings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.13 Severability of Provisions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.14 Counterparts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.15 No Third Party Beneficiaries</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.16 Confidentiality</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;9.17 Conflict</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->-iv-<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">This DEBTOR-IN-POSSESSION REVOLVING CREDIT AGREEMENT, dated as of November&nbsp;29, 2010 (this
&#147;<U>Agreement</U>&#148;), by and among PALM HARBOR HOMES, INC., a Florida corporation (&#147;<U>PHH</U>&#148;),
and each of the other direct or indirect Subsidiaries of PHH set forth on <U>Schedule&nbsp;I</U> hereto
each as a debtor and debtor-in-possession under chapter 11 of the Bankruptcy Code (each, a
&#147;<U>Borrower</U>,&#148; and, collectively, the &#147;<U>Borrowers</U>&#148;) and FLEETWOOD HOMES, INC., as
lender (the &#147;<U>Lender</U>&#148;).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">WITNESSETH
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, on November&nbsp;29, 2010 (the &#147;<U>Petition Date</U>&#148;), each of the Borrowers filed a
voluntary petition for relief under title 11 of chapter 11 of the United States Code, 11 U.S.C.
&#167;&#167;&nbsp;101 et seq (as amended, the &#147;<U>Bankruptcy Code</U>&#148;) with the United States Bankruptcy Court
for the District of Delaware (the &#147;<U>Bankruptcy Court</U>&#148;), thus commencing the cases that the
Borrowers shall seek or have sought to be jointly administered (collectively, the &#147;<U>Bankruptcy
Cases</U>&#148;); and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, from and after the Petition Date, the Borrowers continue to operate their respective
businesses as debtors and debtors-in-possession pursuant to sections 1107 and 1108 of the
Bankruptcy Code; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, each of the Borrowers has an immediate need for funds to continue to operate its
respective businesses and the Borrowers have not been able to obtain sufficient credit or to incur
sufficient debt from any other source sufficient to continue their business operations; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, the Borrowers have requested that the Lender extend credit to them through a
post-petition financing facility in an aggregate principal amount of up to $50,000,000 (exclusive
of interest added to the Loan in accordance with the terms and conditions set forth herein); and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, the Borrowers have agreed to secure their obligations hereunder with first priority
Liens on and security interests, subject to specified exceptions, in, all of their respective real,
personal and intangible property, in accordance with sections 364(c) and 364(d) of the Bankruptcy
Code; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, pursuant to section 364(c)(1) of the Bankruptcy Code, each Borrower agrees and
acknowledges that its obligations arising hereunder shall constitute allowed administrative expense
claims in the Bankruptcy Cases, having priority over all administrative expenses of the kind
specified in sections 503(b) and 507(b) of the Bankruptcy Code, except the claims specifically
granted priority under the terms of this Agreement and the interim and final orders relating
thereto; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, the Lender has indicated its willingness to agree to make such financing available to
the Borrowers pursuant to sections 364(c)(1), (2)&nbsp;and (3)&nbsp;and section 364(d)(1) of the Bankruptcy
Code on the terms and conditions of this Agreement; and
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE I
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">DEFINITIONS
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;1.01 <U>Definitions</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As used in this Agreement, the following terms shall have the meanings specified below unless
the context otherwise requires:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Accounts Receivable</U>&#148; means, with respect to any Person, all trade and other accounts
receivable and other rights to payment from past or present customers and other account debtors of
such Person, and the full benefit of all security for such accounts or rights to payment, including
all trade, vendor and other accounts receivable representing amounts receivable in respect of goods
sold or leased or services rendered to customers of such Person or in respect of amounts refundable
or otherwise due to such Person from vendors, suppliers or other Persons.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Accounts Receivable Value</U>&#148; means, as of any date of determination, the value of the
Accounts Receivable of Borrowers valued in the following manner:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;100% of the amount of any Account Receivable shall be counted if, as of such date of
determination, such Account Receivable is aged 90 or less days from the date of issuance of the
statement or invoice therefor; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;no value shall be given to any Account Receivable that, as of such date of determination,
is aged more than 90&nbsp;days from the date of issuance of the statement or invoice therefor, or any
Account Receivable that is owing by an account debtor that is bankrupt, in receivership or
insolvent or has ceased to conduct business or is disputing such Account Receivable (but only with
respect to the amount disputed).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Acquisition</U>&#148; means any transaction in which any Borrower directly or indirectly
(a)&nbsp;acquires any Property with which an ongoing business is conducted or is to be conducted;
(b)&nbsp;acquires all or substantially all of the assets of any Person or division thereof, whether
through a purchase of assets, merger or otherwise, (c)&nbsp;acquires (in one transaction or as the most
recent transaction in a series of transactions) control of at least a majority of the Equity
Interests of a corporation, or (d)&nbsp;acquires control of more than 50% ownership interest in any
Person.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Affiliate</U>&#148; means, with respect to any Person, a stockholder, executive officer,
director, manager or any other Person directly or indirectly controlling, controlled by or under
common control with such Person, where &#147;control&#148; means the possession, directly or indirectly, of
power to direct or cause the direction of the management or policies of an entity.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Agreement</U>&#148; means this Debtor-in-Possession Revolving Credit Agreement, together with
all Exhibits and Schedules hereto, as the same may be amended, supplemented or otherwise modified
from time to time.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Asset Sale</U>&#148; means the sale, lease, transfer, conveyance or other disposition of any
asset (including by way of a sale and leaseback transaction); <I>provided </I>that, notwithstanding the
foregoing, none of the following shall be deemed to be an Asset Sale (a)&nbsp;any sale of Inventory in
the ordinary course of business (including the liquidation of Inventory in closed locations), other
than sales at less than factory invoice price or, with respect to REO Property and raw land, book
value, without the prior written consent of Lender, (b)&nbsp;any transfer of assets to a Borrower, (c)
any sale, transfer or other disposition of overdue and delinquent accounts in the ordinary course
of business consistent with past practice, (d)&nbsp;any disposition of cash or cash equivalents, (e)&nbsp;any
surrender or waiver of contract rights or the settlement, release or surrender of contract rights
or other litigation claims in the ordinary course of business, (f)&nbsp;any sale, lease, or disposition
of tangible personal property that have become worn out, obsolete or damaged or otherwise
unsuitable for use in connection with the Business of the Borrowers, or (g)&nbsp;sale of the facility
located in La Grange, Georgia at Lots 146 and 175 of the 6<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> District of Troup County,
Georgia and such assets that have been used at such facility for the entire three-month period
immediately preceding the date hereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Availability Period</U>&#148; means the period from the Closing Date to the earlier of (a)&nbsp;the
Business Day immediately preceding the Maturity Date, or (b)&nbsp;the date on which the Commitments are
terminated in accordance with the provisions of this Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Bankruptcy Cases</U>&#148; has the meaning specified in the recitals hereto.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Bankruptcy Code</U>&#148; has the meaning specified in the recitals hereto.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Bankruptcy Court</U>&#148; has the meaning specified in the recitals hereto.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Base Commitment</U>&#148; subject to the terms and conditions set forth herein, means
$50,000,000 (exclusive of interest added to the Loan in accordance with the terms and conditions
set forth herein).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Bid Procedures Order</U>&#148; means an order of the Bankruptcy Court, in form and substance
reasonably satisfactory to Lender, approving, among other things, (a)&nbsp;Palm Harbor Homes, Inc., a
Delaware Corporation (&#147;<U>Purchaser</U>&#148;), as the stalking horse bidder for all or substantially
all of the Property of the Borrowers, (b)&nbsp;notice and service requirements to creditors and parties
in interest with respect to the transactions contemplated in that certain Asset Purchase Agreement,
by and among the Borrowers and Purchaser, (c)&nbsp;the break-up fee and the expense reimbursement (and
deeming the break-up fee an administrative priority expense entitled to first priority under
sections 503(b) and 507(a)(1) of the Bankruptcy Code and which shall be a super-priority first
priority Lien on the transferred Property of the Borrowers pursuant to section 364 of the
Bankruptcy Code), and (d)&nbsp;the bidding procedures relating to the auction and sale of the
transferred Property of the Borrowers, including the ability of Purchaser, to the extent of its
interest as assignee of Lender under this Agreement, to credit bid all outstanding amounts owing by
Borrowers under the DIP Facility.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Borrower</U>&#148; has the meaning specified in the preamble hereto.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Borrowing</U>&#148; means any amount funded by Lender and made part of the Loan hereunder.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Business</U>&#148; means the business of the design, production, marketing, sale and servicing
of manufactured and modular homes.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Business Day</U>&#148; means a day other than a Saturday, Sunday or other day on which
commercial banks in Phoenix, Arizona are authorized or required by law to close.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Capital Expenditures</U>&#148; means, for any period, with respect to the Borrowers, the
aggregate of all expenditures by the Borrowers for the acquisition or leasing (pursuant to a
Capital Lease) of fixed or capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) which are required to be capitalized in
accordance with GAAP on a balance sheet of any of the Borrowers for any period.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Capital Lease</U>&#148; means, as applied to any Borrower, any lease of any Property by such
Borrower as lessee which, in accordance with GAAP in effect as of the date of this Agreement, is or
should be accounted for as a capital lease on the balance sheet of such Borrower.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Capital Lease Obligation</U>&#148; means the capital lease obligations (including the payment
of rent or other amounts) relating to a Capital Lease determined in accordance with GAAP in effect
as of the date of this Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Change of Control</U>&#148; means (a)&nbsp;a sale, lease or other disposition of assets or
properties of any Borrower having a book value of more than 50% of the book value of all the assets
and properties of such Borrower; (b)&nbsp;any transaction in which one or more Persons shall after the
Closing Date directly or indirectly acquire from the holders thereof, by purchase or in a merger,
consolidation or other transfer or exchange of outstanding capital stock, ownership of or control
over capital stock of any Borrower (or securities exchangeable for or convertible into such stock
or interests) entitled to elect a majority of the Borrower&#146;s board of directors or representing
more than 50% of the number of shares of common stock of any Borrower outstanding; (c)&nbsp;the adoption
of a plan relating to the liquidation or dissolution of any Borrower; or (d)&nbsp;the designation,
without the prior approval of the Lender of a Chief Executive Officer of PHH other than that person
holding such office as of the Closing Date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Closing Date</U>&#148; means the date on which the conditions specified in <U>Section
3.01</U> have been satisfied.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Collateral</U>&#148; means the Property subject to the Liens granted to the Lender under this
Agreement and the other Credit Documents.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Collateral Documents</U>&#148; means the Security Agreement and any other document or
instrument executed and delivered by a Borrower granting a Lien on any of its Property (including
the Real Properties and Real Property Leases) to secure payment of the Obligations.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Collections</U>&#148; means all funds collected from any source whatsoever including any
proceeds of any Collateral regardless of source or nature and proceeds of the Equity Interests of a
non-Borrower; <I>provided </I>that &#147;Collections&#148; shall not be deemed to include funds required to be held
in escrow pursuant to applicable Law.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Commitments</U>&#148; means, collectively, the Base Commitment and the Supplemental
Commitment.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Computer Software</U>&#148; means all computer software (including source code, executable
code, data, databases and documentation) owned by or licensed to any Borrower which is used in, or
necessary for the conduct of, the respective Business of any Borrower.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Contractual Obligation</U>&#148; means, as to any Person, any provision of any security issued
by such Person or of any material agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Control Account</U>&#148; means that certain debtor in possession account number to be
established prior to the Closing Date at Wells Fargo Bank, National Association or such other
financial institution acceptable to the Lender, in the name of PHH, for the purpose of receiving
all Collections in accordance with this Agreement and subject to an account control agreement, in
form and substance satisfactory to the Lender which provides, among other requirements of the
Lender, that all withdrawals shall be subject to approval of the Lender.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Copyrights</U>&#148; has the meaning set forth in the definition of &#147;Intellectual Property&#148;
herein.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Credit Documents</U>&#148; means, collectively, this Agreement, the Note, the Collateral
Documents and all other related agreements and documents issued or delivered hereunder or
thereunder or pursuant hereto or thereto.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Critical Vendor Motion</U>&#148; means a motion to be filed by the Borrowers with the
Bankruptcy Court seeking approval to pay the prepetition claims of certain of the Borrowers&#146;
vendors.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Default</U>&#148; means any event, act or condition which, with notice or lapse of time, or
both, would constitute an Event of Default.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>DIP Financing Order</U>&#148; means the Interim DIP Financing Order or the Final DIP Financing
Order, as applicable.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Dollars</U>&#148; and &#147;<U>$</U>&#148; means dollars in lawful currency of the United States of
America.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Environmental, Health and Safety Liabilities</U>&#148; means any and all claims, costs,
damages, expenses, liabilities and/or other responsibility or potential responsibility arising from
or under any Environmental Law or Occupational Safety and Health Law (including compliance
therewith).
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Environmental Laws</U>&#148; means all federal, state, local and foreign Laws, all judicial
and administrative orders and determinations, and all common law concerning public health and
safety, worker health and safety, pollution or protection of the environment, including all those
relating to the presence, use, production, generation, handling, transportation, treatment,
storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened
release, control, exposure to, or cleanup of any hazardous materials, substances, wastes, chemical
substances, mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or
byproducts, asbestos, polychlorinated biphenyls, noise, odor, mold, or radiation, including
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended; the
Resource Conservation and Recovery Act, 42 U.S.C. &#167;&#167; 6901 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. &#167;&#167; 5101 et seq.; the Clean Water Act, 33 U.S.C. &#167;&#167;&nbsp;1251 et seq.; the
Toxic Substances Control Act, 15 U.S.C. &#167;&#167;&nbsp;2601 et seq.; the Clean Air Act, 42&nbsp;U.S.C. &#167;&#167; 7401 et
seq.; the Safe Drinking Water Act, 42 U.S.C. &#167;&#167; 300f et seq.; the Atomic Energy Act, 42 U.S.C. &#167;&#167;
2011 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7&nbsp;U.S.C. &#167;&#167; 136 et seq.; and
the Federal Food, Drug and Cosmetic Act, 21 U.S.C. &#167;&#167; 301 et seq.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Equity Interests</U>&#148; means all shares of capital stock (whether denominated as common
stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint
venture interests, participations or other ownership or profit interests in or equivalents
(regardless of how designated) of or in a Person (other than an individual), whether voting or
non-voting.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Equivalent Equity Interests</U>&#148; means all securities convertible into or exchangeable
for Equity Interests or any other Equivalent Equity Interests and all warrants, options or other
rights to purchase, subscribe for or otherwise acquire any Equity Interests or any other Equivalent
Equity, whether or not presently convertible, exchangeable or exercisable.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>ERISA</U>&#148; means the U.S. Employee Retirement Income Security Act of 1974, as amended,
together with the rules and regulations promulgated thereunder.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>ERISA Affiliate</U>&#148; means, with respect to any Person, any trade or business (whether or
not incorporated) (i)&nbsp;under common control within the meaning of section 4001(b)(1) of ERISA with
such Person, or (ii)&nbsp;which together with such Person is treated as a single employer under sections
414(b), (c), (m), (n)&nbsp;or (o)&nbsp;of the Internal Revenue Code.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>ERISA Event</U>&#148; means (a)&nbsp;with respect to any Plan, the occurrence of a Reportable Event
or the substantial cessation of operations (within the meaning of section 4062(e) of ERISA); (b)
the withdrawal by any Borrower or any ERISA Affiliate from a Multiple Employer Plan during a plan
year in which it was a substantial employer (as such term is defined in section 4001(a)(2) of
ERISA), or the termination of a Multiple Employer Plan; (c)&nbsp;the distribution of a notice of intent
to terminate or the actual termination of a Plan pursuant to section 4041(a)(2) or 4041A of ERISA;
(d)&nbsp;the institution of proceedings to terminate or the actual termination of a Plan by the PBGC
under section 4042 of ERISA; (e)&nbsp;any event or condition which would reasonably be expected to
constitute grounds under section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; (f)&nbsp;the complete or partial withdrawal of any Borrower or any
ERISA Affiliate from a Multiemployer Plan; (g)&nbsp;the conditions for imposition of a Lien under
section 302(f) of ERISA exist with respect to any Plan; or (h)&nbsp;the adoption of an amendment to any
Plan requiring the provision of security to such Plan pursuant to section 307 of ERISA.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Event of Default</U>&#148; has the meaning specified in <U>Section&nbsp;7.01</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Exchange Act</U>&#148; means the Securities Exchange Act of 1934, as amended.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Final DIP Financing Order</U>&#148; means the final order entered by the Bankruptcy Court
pursuant to sections 361, 362, 363 and 364 of the Bankruptcy Code authorizing and approving the
Borrowers&#146; entry into the Credit Documents and the transactions contemplated thereby, which order
shall include the provisions required to be included in the Interim DIP Financing Order pursuant to
<U>Section&nbsp;3.01(e)</U>, which shall otherwise be in form and substance satisfactory to the Lender,
in its sole discretion, as to which no stay has been entered and which has not been reversed,
modified, vacated or overturned, and as to which no appeal is pending and time for appeal has
expired.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Final Order</U>&#148; means an order entered by the Bankruptcy Court or other court of
competent jurisdiction as to which: (i)&nbsp;no appeal, notice of appeal, motion for reconsideration,
motion to amend or make additional findings of fact, motion to alter or amend judgment, motion for
rehearing or motion for new trial has been timely filed; (ii)&nbsp;the time for instituting or filing an
appeal, motion for rehearing or motion for new trial shall have expired; and (iii)&nbsp;if an appeal has
been timely filed no stay pending an appeal is in effect and the time for requesting a stay pending
appeal shall have expired; <U>provided</U>, <U>however</U>, that the filing or pendency of a
motion under Rule&nbsp;9024 of the Federal Rules of Bankruptcy Procedure shall not cause an order not to
be deemed a &#147;Final Order&#148; unless such motion was filed within ten days of the entry of the order at
issue.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>First Day Orders</U>&#148; means all orders, reasonably deemed necessary or appropriate by the
Lender, entered by the Bankruptcy Court based on motions filed by the Borrowers on or before the
date which is three Business Days from the Petition Date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>GAAP</U>&#148; means generally-accepted accounting principles within the United States of
America, consistently applied.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Governmental Body</U>&#148; means a domestic or foreign national, federal, state, provincial,
or local governmental, regulatory or administrative authority, department, agency, commission,
court, tribunal, arbitral body or self-regulated entity.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Hazardous Activity</U>&#148; means the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, release, storage, transfer,
transportation, treatment or use (including any withdrawal or other use of groundwater) of any
Hazardous Material in, on, under, about or from any Owned Real Property, whether or not in
connection with the conduct of the Business, except to the extent in material compliance with
applicable Environmental Law.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Hazardous Material</U>&#148; means any substance, material or waste which is regulated by any
Environmental Law, including any material, substance or waste which is defined as a &#147;hazardous
waste,&#148; &#147;hazardous material,&#148; &#147;hazardous substance,&#148; &#147;extremely hazardous waste,&#148; &#147;restricted
hazardous waste,&#148; &#147;contaminant,&#148; &#147;pollutant,&#148; &#147;toxic waste&#148; or &#147;toxic substance&#148; under any
provision of Environmental Law, and including petroleum, petroleum product, asbestos, presumed
asbestos-containing material or asbestos-containing material, urea formaldehyde and polychlorinated
biphenyls.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Indebtedness</U>&#148; means, with respect to any Person, (a)&nbsp;all obligations of such Person
for borrowed money; (b)&nbsp;all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily made; (c)&nbsp;all obligations
of such Person under conditional sale or other title retention agreements relating to Property
purchased by such Person (other than customary reservations or retentions of title under agreements
with suppliers entered into in the ordinary course of business); (d)&nbsp;all obligations of such Person
issued or assumed as the deferred purchase price of Property or services purchased by such Person
(other than trade debt incurred in the ordinary course of business and due within six months of the
incurrence thereof) which would appear as liabilities on a balance sheet of such Person; (e)&nbsp;all
obligations of such Person under take-or-pay or similar arrangements or under commodities
agreements; (f)&nbsp;all Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of
the proceeds of production from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed; <I>provided </I>that for purposes hereof the amount of such
Indebtedness shall be limited to the greater of (i)&nbsp;the amount of such Indebtedness as to which
there is recourse to such Person and (ii)&nbsp;the fair market value of the Property which is subject to
the Lien; (g)&nbsp;all Support Obligations of such Person; (h)&nbsp;the principal portion of all obligations
of such Person under Capital Leases; (i)&nbsp;all obligations of such Person in respect of interest rate
protection agreements, foreign currency exchange agreements, commodity purchase or option
agreements or other interest or exchange rate or commodity price hedging agreements; (j)&nbsp;the
maximum amount of all standby letters of credit issued or bankers&#146; acceptances facilities created
for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed); (k)&nbsp;all preferred stock issued by such Person and required by the terms thereof to
be redeemed, or for which mandatory sinking fund payments are due, by a fixed date; and (l)&nbsp;the
principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance
sheet loan or similar off-balance sheet financing product to which such Person is a party, where
such transaction is considered borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP. The Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a general partner or a
joint venturer, but only to the extent to which there is recourse to such Person for payment of
such Indebtedness.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Information</U>&#148; has the meaning specified in <U>Section&nbsp;9.16</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Initial Projected Budget</U>&#148; has the meaning specified in <U>Section&nbsp;5.01(d)(i)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Initially Secured Owned Real Properties</U>&#148; has the meaning specified in <U>Section
3.01(c)(iii)(B)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Intellectual Property</U>&#148; means all of the following in any jurisdiction throughout the
world (a)&nbsp;trade names, trademarks and service marks, service names, brand names, logos, Internet
domain names, trade dress and similar rights, logos, slogans, and corporate names (and all
translations, adaptations, derivations and combinations of the foregoing), and general intangibles
of a like nature, together with all goodwill associated with each of the foregoing and all
registrations and applications to register any of the foregoing (&#147;<U>Marks</U>&#148;); (b)&nbsp;patents,
patent applications and patent disclosures, together with all reissuances, divisionals,
continuations, continuations-in-part, revisions, reissues, extensions and reexaminations thereof
(&#147;<U>Patents</U>&#148;); (c)&nbsp;copyrights (whether registered or unregistered) and applications for
registration and copyrightable works (&#147;<U>Copyrights</U>&#148;); (d)&nbsp;confidential and proprietary
information, including
trade secrets and know-how (including ideas, research and development, engineering designs and
related approvals of Governmental Bodies, self-regulatory organizations and trade associations,
inventions, formulas, compositions, manufacturing and production processes and techniques, designs,
drawings and specifications; and (e)&nbsp;all licenses and sublicenses held by any Borrower as licensee
pertaining to intellectual property of any other Person; and for the avoidance of doubt,
&#147;<U>Intellectual Property</U>&#148; shall exclude Computer Software.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Interest Payment Date</U>&#148; during the term of this Agreement, means the first Business
Day of each calendar month.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Interim DIP Financing Order</U>&#148; means the interim order substantially in the form
attached hereto as <U>Exhibit&nbsp;D</U>, entered by the Bankruptcy Court under sections 361, 362, 363
and 364 of the Bankruptcy Code authorizing and approving, subject to the approval of the Final DIP
Financing Order, the Borrowers&#146; entry into the Credit Documents and the transactions contemplated
hereby, which order shall include the provisions required to be included therein pursuant to
<U>Section&nbsp;3.01(e)</U>, which shall otherwise be in form and substance satisfactory to the Lender,
in its sole discretion, and which shall not have been reversed, modified, vacated or overturned.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Interim Period</U>&#148; the period commencing on the date of entry of the Interim DIP
Financing Order and ending on the date on which the Final DIP Financing Order becomes a Final
Order.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Internal Revenue Code</U>&#148; means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations issued thereunder, in each
case as in effect from time to time. References to sections of the Internal Revenue Code shall be
construed also to refer to any successor sections.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Inventory</U>&#148; means, as of any date of determination, all raw materials,
work-in-progress, finished goods and semi-finished goods, supplies and other inventories, wherever
located, used or produced by any Borrower, including REO Property obtained from HUD or other
parties and held for resale.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Investment</U>&#148; in any Person, means any loan or advance to such Person, any purchase or
other acquisition of any Equity Interests, Equivalent Equity Interests or other securities of, or
equity interest in, such Person, any capital contribution to such Person or any other investment in
such Person, including any Support Obligation incurred for the benefit of such Person.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Knowledge</U>&#148; means, when used to qualify any representation, warranty or other
statement of the Borrowers contained herein, the actual current knowledge of any of Larry H.
Keener, Kelly Tacke, Ron Powell (solely as to PHH and Nationwide Homes, Inc.) or Joe Kesterson
(solely as to PHH) after reasonable investigation or inquiry into the subject matter of the
representation, warranty or other statement to which such term is being applied.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Law</U>&#148; means any federal, state, local or foreign statute, law, rule, regulation,
order, writ, ordinance, judgment, governmental directive, injunction, decree or other requirement
of any Governmental Body.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Leased Real Properties</U>&#148; means each parcel of real property leased by any Borrower and
set forth in <U>Schedule&nbsp;4.13-B</U> hereto.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Lender</U>&#148; has the meaning specified in the preamble hereto.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Lien</U>&#148; means, with respect to any asset, (a)&nbsp;any mortgage, deed of trust, leasehold
deed of trust, lien, pledge, hypothecation, encumbrance, adverse claim, charge or security interest
in, on or of such asset; (b)&nbsp;the interest of a vendor or a lessor under any conditional sale
agreement, Capital Lease or title retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to such asset; and (c)&nbsp;in the case of
securities, any purchase option, call or similar right of a third party with respect to such
securities.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Loan</U>&#148; has the meaning specified in <U>Section&nbsp;2.01(a)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Marks</U>&#148; has the meaning set forth in the definition of &#147;Intellectual Property&#148; herein.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Material Adverse Effect</U>&#148; means a material adverse effect on (a)&nbsp;the condition
(financial or otherwise), operations, Business, prospects, assets, Property or liabilities of the
Borrowers taken as a whole; (b)&nbsp;the ability of any Borrower to perform any obligation under any
Credit Document to which it is a party; (c)&nbsp;the legality, validity or enforceability of any Credit
Document; (d)&nbsp;the perfection or priority of the Liens granted pursuant hereto and the Collateral
Documents; or (e)&nbsp;the rights and remedies of the Lender under the Credit Documents, the Interim DIP
Financing Order or the Final DIP Financing Order.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Material Pleading</U>&#148; means (a)&nbsp;a plan of reorganization; (b)&nbsp;any pleading that would
impair, or would have the effect of impairing, the ability of the Borrowers taken as a whole to
repay their obligations arising hereunder or under the Interim DIP Financing Order or Final DIP
Financing Order; (c)&nbsp;any pleading that would impair, or would have the effect of impairing, the
ability of Lender or its Affiliates from bidding (including credit bidding) on the Property of the
Borrowers pursuant to section 363 of the Bankruptcy Code or any plan of reorganization; or (d)&nbsp;any
&#147;debtor-in-possession financing&#148; (other than the financing contemplated by this Agreement) that
does not provide for the repayment in full of the Obligations arising hereunder on the date the
first loan is made under such other financing.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Maturity Date</U>&#148; means the earliest to occur of (a)&nbsp;April&nbsp;15, 2011; (b)&nbsp;the date which
is 15&nbsp;days after entry of the Sale Order; (c)&nbsp;the date of the closing of the sale of the Borrowers
or the sale of all or substantially all of the Property of the Borrowers; and (d)&nbsp;the date on which
an Event of Default occurs.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Multiemployer Plan</U>&#148; means a Plan which is a multiemployer plan as defined in
sections&nbsp;3(37) or 4001(a)(3) of ERISA.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Multiple Employer Plan</U>&#148; means a Plan which any Borrower or any ERISA Affiliate and at
least one employer other than a Borrower or any ERISA Affiliate are contributing sponsors.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Net Cash Proceeds</U>&#148; means the aggregate proceeds paid in cash received by any Borrower
in respect of any Asset Sale, net of (a)&nbsp;direct costs (including legal, accounting, broker and
investment banking fees, and sales commissions) paid or payable as a result thereof;
(b)&nbsp;taxes paid or payable as a result thereof, including a reserve for the Borrowers&#146; good
faith estimate of income and franchise taxes payable in connection with such sale; (c)&nbsp;repayment of
Indebtedness that is required to be repaid in connection with such Asset Sale; and (d)&nbsp;appropriate
amounts to be provided by the Borrowers as a reserve, in accordance with GAAP, against liabilities
associated with such Asset Sale and retained by any Borrower after such Asset Sale, including
pension and other post-employment benefit liabilities, liabilities related to environmental matters
and liabilities under any indemnification obligations associated with such Asset Sale; <I>provided</I>
that &#147;Net Cash Proceeds&#148; shall include an amount equal to any reserves previously taken against
liabilities associated with Asset Sales immediately upon those reserves being determined to be in
excess of such liabilities. &#147;Net Cash Proceeds&#148; shall also include any cash received upon the sale
or other disposition of any non-cash consideration received by the Borrowers.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Note</U>&#148; has the meaning specified in <U>Section&nbsp;2.07</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Obligations</U>&#148; means the Loan, the Note and all other advances, debts, liabilities,
obligations, covenants and duties owing by any Borrower to the Lender, any Affiliate of any
Borrower or any indemnitee, of every type and description, present or future, whether or not
evidenced by any note or other instrument, arising under this Agreement or under any other Credit
Document, whether or not for the payment of money, loan, guaranty, indemnification or in any other
manner, whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however acquired. The term
&#147;Obligations&#148; includes all interest, charges, expenses, fees, reasonable attorneys&#146; fees and
disbursements and any other sum chargeable to the Borrowers (or any of them) under this Agreement
or any other Credit Document.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Occupational Safety and Health Law</U>&#148; means any applicable Law designed to provide safe
and healthful working conditions and to reduce occupational safety and health hazards, including
the Occupational Safety and Health Act, and any program, whether governmental or private (such as
those promulgated or sponsored by industry associations and insurance companies), designed to
provide safe and healthful working conditions.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Operating Lease</U>&#148; means, as applied to any Person, any lease (including leases which
may be terminated by the lessee at any time) of any Property which is not a Capital Lease other
than any such lease in which that Person is the lessor.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Order for Relief</U>&#148; has the meaning specified in section 301(b) of the Bankruptcy Code.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Other Taxes</U>&#148; has the meaning specified in <U>Section&nbsp;2.12(b)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Owned Real Properties</U>&#148; means each parcel of real property owned by any Borrower and
set forth in <U>Schedule&nbsp;4.13-A</U> hereto, excluding any Inventory.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Patents</U>&#148; has the meaning set forth in the definition of &#147;Intellectual Property&#148;
herein.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>PBGC</U>&#148; means the Pension Benefit Guaranty Corporation established pursuant to Subtitle
A of Title IV of ERISA, or any successor thereof.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Performance Trigger Report</U>&#148; has the meaning specified in <U>Section&nbsp;5.01(d)(iv)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Performance Trigger Test Date</U>&#148; means the last day of Borrowers&#146; fiscal month and such
other dates as the Lender shall reasonably request.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Performance Trigger</U>&#148; shall have occurred if, at any time, the sum of (i)&nbsp;the
aggregate value of the Inventory as of the applicable Performance Trigger Test Date (determined in
accordance with GAAP); and (ii)&nbsp;the aggregate Accounts Receivable Value of the Borrowers as of the
applicable Performance Trigger Test Date is less than 75% of the sum of the Borrowers&#146; reported
aggregate Inventory value and Accounts Receivable Value as of October&nbsp;29, 2010 (which, for added
certainty, shall exclude any Account Receivable of any non-Borrower).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Permits</U>&#148; means licenses, franchises, permits, variances, exemptions, orders,
approvals and authorizations of Governmental Bodies, including any applications therefor, that are
used for the conduct of the Business (or any part thereof) as currently conducted.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Permitted Investments</U>&#148; means Investments which are (a)&nbsp;cash and cash equivalents; (b)
Accounts Receivable created, acquired or made in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; (c)&nbsp;Investments consisting of stock,
obligations, securities or other property received in settlement of Accounts Receivable (created in
the ordinary course of business) from obligors; (d)&nbsp;advances in the ordinary course of business to
employees, officers and directors to cover travel and entertainment expense and other ordinary
business purposes in the ordinary course of business as presently conducted; and (e)&nbsp;other
Investments in an aggregate amount not to exceed $10,000.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Permitted Liens</U>&#148; means:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;Liens in favor of (i)&nbsp;the Textron Agent and the Textron Lenders in connection with the
Textron Facility; and (ii)&nbsp;Virgo in connection with the Virgo Credit Agreement;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;Liens for taxes, assessments or governmental charges or levies not yet due or Liens for
taxes being contested in good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to which the Property subject to
any such Lien is not yet subject to foreclosure, sale or loss on account thereof);
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;Liens in respect of Property imposed by Law arising in the ordinary course of business
such as materialmen&#146;s, mechanics&#146;, warehousemen&#146;s, carriers&#146;, suppliers&#146;, landlords&#146; and other like
Liens, provided that (i)&nbsp;for any such Liens arising before the Petition Date, the enforcement and
collection of such Liens is initially stayed by section 362 of the Bankruptcy Code; and (ii)&nbsp;except
as pertaining to the Textron Facility, for any such Liens arising after the Petition Date, such
Liens secure only amounts not overdue for a period of more than 30&nbsp;days or are being contested in
good faith by appropriate proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the Property subject to any such Lien is not yet
subject to foreclosure, sale or loss on account thereof);
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;Liens (other than Liens created or imposed under ERISA) consisting of deposits made by a
Borrower in the ordinary course of business in connection with, or to secure payment
of, obligations under workers&#146; compensation, unemployment insurance, social security and other
similar Laws, or to secure the performance of tenders, statutory obligations, bids, leases,
government contracts, trade contracts, surety, stay, customs and appeals bonds, performance and
return-of-money bonds, or to secure liability to insurance carriers and other similar obligations
(exclusive of obligations for the payment of borrowed money);
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(e)&nbsp;Liens in connection with attachments or judgments (including judgment or appeal bonds)
provided that the judgments secured shall, within 30&nbsp;days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall have been discharged within 30&nbsp;days
after the expiration of any such stay;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(f)&nbsp;easements, rights-of-way, restrictions (including zoning restrictions), minor defects or
irregularities in title and other similar charges or encumbrances not, in any material respect,
impairing the use of the encumbered Property for its intended purposes;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(g)&nbsp;any interest of title of a lessor under, and Liens arising from UCC financing statements
(or equivalent filings, registrations or agreements in foreign jurisdictions) relating to, the Real
Property Leases;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(h)&nbsp;Liens in favor of customs and revenue authorities arising as a matter of Law to secure
payment of customs duties in connection with the importation of goods;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(i)&nbsp;normal and customary rights of setoff upon deposits of cash in favor of banks or other
depository institutions; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(j)&nbsp;Liens existing as of the Petition Date; <I>provided </I>that no such Lien shall at any time be
extended to or cover any Property other than the Property subject thereto on the Closing Date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Person</U>&#148; means any individual, partnership, joint venture, firm, corporation, limited
liability company, association, trust or other enterprise (whether or not incorporated) or any
Governmental Body.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Petition Date</U>&#148; has the meaning set forth in the Recitals.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Plan</U>&#148; means any employee benefit plan (as defined in section 3(3) of ERISA) which is
covered by ERISA and with respect to which any Borrower or any of its Subsidiaries or any ERISA
Affiliate is (or, if such plan were terminated at such time, would under section 4069 of ERISA be
deemed to be) an &#147;employer&#148; within the meaning of section 3(5) of ERISA.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Pledged Certificated Equity Interests</U>&#148; has the meaning set forth in the Security
Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Projected Budget</U>&#148; has the meaning specified in <U>Section&nbsp;5.01(d)(i)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Property</U>&#148; means any right or interest in or to any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Real Properties</U>&#148; has the meaning set forth in <U>Section&nbsp;4.13(b)</U>.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Real Property Lease</U>&#148; has the meaning set forth in <U>Section&nbsp;4.13(b)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Release</U>&#148; means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing into the environment (including
the abandonment or discarding of barrels, containers and other closed receptacles containing any
Hazardous Materials).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>REO Property</U>&#148; means, for any Person, any real or personal Property acquired by such
Person through appropriate foreclosure and similar proceedings or from any third party that
acquired such Property through appropriate foreclosure and similar proceedings.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Reportable Event</U>&#148; means any of the events set forth in section 4043(c) of ERISA,
other than those events as to which the notice requirement has been waived by regulation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Responsible Officer</U>&#148; means Larry H. Keener or Kelly Tacke.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Restricted Payment</U>&#148; means, as to any Person, (a)&nbsp;any dividend, return of capital,
distribution or other payment or disposition of property for less than fair market value, whether
direct or indirect and whether in cash, securities or other property, on account of any Equity
Interests or Equivalent Equity Interests of any Person or any of its Subsidiaries, in each case now
or hereafter outstanding, including with respect to a claim for rescission of a disposition of such
Equity Interests or Equivalent Equity Interests; and (b)&nbsp;any redemption, retirement, termination,
defeasance, cancellation, purchase or other acquisition for value, whether direct or indirect, of
any Equity Interests or Equivalent Equity Interests of any Borrower, now or hereafter outstanding,
and any payment or other transfer setting aside funds for any such redemption, retirement,
termination, cancellation, purchase or other acquisition, whether directly or indirectly and
whether to a sinking fund, a similar fund or otherwise.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Sale Motion</U>&#148; has the meaning specified in <U>Section&nbsp;7.01(i)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Sale Order</U>&#148; shall mean the order of the Bankruptcy Court on the Sale Motion approving
the sale of the Property of the Borrowers.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Security Agreement</U>&#148; means that certain Security Agreement, executed on the date
hereof, by the Borrowers in favor of the Lender, together with all Exhibits and Schedules thereto,
as such agreement may be amended, supplemented or modified from time to time.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Senior Liens</U>&#148; has the meaning specified in <U>Section&nbsp;3.01(e)(iii)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Single Employer Plan</U>&#148; means any Plan which is covered by Title IV of ERISA, but which
is not a Multiemployer Plan or a Multiple Employer Plan.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Subsidiary</U>&#148; means, as to any Person, any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more than 50% of (a)&nbsp;the issued
and outstanding Equity Interests having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether at the time Equity Interests of any other
class or classes of such corporation shall or might have voting power upon the occurrence of any
contingency); (b)&nbsp;the interest in the capital or profits of such partnership, joint venture or
limited
liability company; or (c)&nbsp;the beneficial interest in such trust or estate is at the time
directly or indirectly owned or controlled by such Person, by such Person and one or more of its
other Subsidiaries or by one or more of such Person&#146;s other Subsidiaries.
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Supplemental Commitment</U>&#148; subject to the terms and conditions set forth herein, means
$5,000,000 (exclusive of interest added to the Loan in accordance with the terms and conditions set
forth herein).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Support Obligations</U>&#148; means, as to any Person, without duplication, any obligations of
such Person (other than endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) guaranteeing or intended to guarantee any Indebtedness of any other
Person in any manner, whether direct or indirect, and including any obligation, whether or not
contingent, (a)&nbsp;to purchase any such Indebtedness or any Property constituting security therefore;
(b)&nbsp;to advance or provide funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance sheet condition of such
other Person (including keep well agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of Indebtedness of such other Person; (c)
to lease or purchase Property, securities or services primarily for the purpose of assuring the
holder of such Indebtedness against loss; or (d)&nbsp;to otherwise assure or hold harmless the holder of
such Indebtedness against loss in respect thereof, but specifically excluding guaranties or other
assurances with respect to any Borrower&#146;s performance obligations under bids or contracts made or
entered into in the ordinary course of business. The amount of any Support Obligation hereunder
shall (subject to any limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in
respect of which such Support Obligation is made.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Taxes</U>&#148; has the meaning specified in <U>Section&nbsp;2.12(a)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Textron Agent</U>&#148; means the agent under the Textron Facility.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Textron Facility</U>&#148; means that certain Amended and Restated Agreement for Wholesale
Financing (Finished Goods &#150; Shared Credit Facility) dated May&nbsp;25, 2004, as amended, by and among
PHH, Palm Harbor Manufacturing, L.P., Palm Harbor Homes I, L.P., Palm Harbor Marketing, Inc.,
Textron Financial Corporation and the other &#147;Lenders&#148; named therein.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Textron Lenders</U>&#148; means those certain lenders under the Textron Facility.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>UCC</U>&#148; means the Uniform Commercial Code, as in effect in any applicable jurisdiction.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Virgo</U>&#148; means Virgo Service Company, LLC, a Delaware limited liability company.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Virgo Credit Agreement</U>&#148; means that certain Credit Agreement, dated as of January&nbsp;29,
2010, in favor of Virgo and the lenders named therein, CountryPlace Acceptance Corporation,
CountryPlace Mortgage, LTD., CountryPlace Mortgage Holdings, LLC, each as a borrower, and PHH,
CountryPlace Acceptance G.P., LLC, and CountryPlace Acceptance L.P., LLC, as the guarantors.
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Weekly Budget</U>&#148; has the meaning specified in <U>Section&nbsp;5.01(d)(ii)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;1.02 <U>Computation of Time Periods</U>. For purposes of computation of periods of
time hereunder, the word &#147;from&#148; means &#147;from and including&#148; and the words &#147;to&#148; and &#147;until&#148; each mean
&#147;to but excluding.&#148;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;1.03 <U>Accounting Terms; Certain Calculations</U>. Except as otherwise expressly
provided herein, all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be delivered to the
Lender hereunder shall be prepared, in accordance with GAAP applied on a consistent basis.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE II
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">THE LOAN
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.01 <U>Loan; Reserves and Releases</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;<U>Loan</U>.&nbsp;&nbsp;Subject to the terms and conditions set forth herein, the Lender agrees to
make certain loans (the &#147;<U>Loan</U>&#148;) to the Borrowers in accordance with and pursuant to the
terms and conditions of this Agreement in the aggregate amount of the Commitments; <I>provided </I>that
any Borrowing (including any reborrowing, once repaid) of the Supplemental Commitment shall be
subject to approval of the Lender in its sole discretion. The Loan (i)&nbsp;subject to the limitations
set forth in <U>Section&nbsp;2.01(b)</U>, shall be made on the Closing Date and, subject to the
limitations set forth in <U>Section&nbsp;2.02(a)</U>, shall be made from time to time thereafter if
requested by the Borrowers pursuant to <U>Section&nbsp;2.03</U> during the Availability Period; (ii)
may be prepaid in accordance with the provisions hereof, and once prepaid, may be reborrowed in
accordance with the terms hereof; and (iii)&nbsp;shall not exceed at any time the Commitments of the
Lender.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;<U>Amount of Loan on the Closing Date</U>.&nbsp;&nbsp;The Borrowers may borrow an aggregate amount
not to exceed the amount described in <U>Section&nbsp;2.02(a)</U>; <I>provided </I>that no Performance Trigger
shall be in existence, as evidenced in the applicable Performance Trigger Report. In the event a
Performance Trigger has occurred and is continuing, the Lender shall not be obligated to fund any
Borrowings until such time as the Performance Trigger has been cured.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;<U>Releases</U>. Releases of any Collections in the Control Account are subject to
approval of the Weekly Budget pursuant to the budgetary approval process as outlined in <U>Section
5.01(d)(ii)</U> below. Upon approval, the Lender shall release the approved Collections to the
Borrowers and, if and to the extent applicable, apply the amounts set forth in the Weekly Budget to
optional prepayments of the Loan, in each case, on the first Business Day of the following week.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.02 <U>Use of Proceeds</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;The proceeds of the Borrowing funded on the Closing Date shall be used by the Borrowers to
pay (i)&nbsp;in full the Textron Facility on the Closing Date and (ii)&nbsp;all costs and accrued and unpaid
fees and expenses (including reasonable legal fees and expenses) required to be paid to the Lender
on or before the Closing Date, to the extent then due and payable.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;Thereafter, the proceeds of any Borrowing funded pursuant hereto shall be used by the
Borrowers to finance working capital, for Capital Expenditures, and for other general corporate
purposes of the Borrowers at all times in accordance with the Weekly Budget approved by the Lender
pursuant to the budgetary approval process as outlined in <U>Section&nbsp;5.01(d)(ii)</U> below;
<I>provided </I>that the Lender in its sole discretion can approve additional releases upon request by the
Borrowers and approval of the use of funds using the budgetary approval process as outlined in
<U>Section&nbsp;5.01(d)(ii)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.03 <U>Borrowing; Releases</U>. Pursuant to the budgetary approval process as
outlined in <U>Section&nbsp;5.01(d)(ii)</U> below, and provided that no Performance Trigger has
occurred and is continuing, the Borrowers may borrow the amount set forth in the Weekly Budget (in
excess of released Collections approved by the Lender for the funding of such Weekly Budget);
<I>provided </I>that each Borrowing shall be in an aggregate amount of not less than $100,000 or an
integral multiple of $100,000 in excess thereof; and <I>provided further </I>that in no event shall a
Borrowing cause the aggregate principal amount of the Loan outstanding to exceed the Base
Commitment without the prior consent of Lender (as evidenced by its funding of the applicable
amount from the Supplemental Commitment).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.04 <U>Funding of Borrowings</U>. If, for the applicable week, the Weekly Budget is
delivered on the preceding Thursday (or, if such day is not a Business Day, the immediately
preceding Business Day) not later than 11:00&nbsp;A.M. (Mountain Standard Time), each Borrowing and
release of Collections approved by the Lender shall be funded on the first Business Day of the
following week. Each Weekly Budget approved by the Lender shall constitute an irrevocable request
by the Borrowers to borrow the funds set forth therein. The&nbsp;Lender shall, on the date of the
proposed Borrowing, and upon fulfillment of the applicable conditions set forth in <U>ARTICLE
III</U>, make available to the Borrowers, at their address referred to in <U>Section&nbsp;9.01</U>, in
immediately available funds, the proposed Borrowing.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.05 <U>Repayment</U>. The Borrowers shall, jointly and severally, repay the entire
unpaid principal amount of the Loan, together with all interest thereon and all other amounts and
Obligations payable under this Agreement, in full upon the Maturity Date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.06 <U>Prepayments</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;<U>Optional Prepayments</U>.&nbsp;&nbsp;The Borrowers may prepay the outstanding principal amount
of the Loan in whole, subject to any applicable prepayment premium set forth herein, or in part,
upon approval of the Weekly Budget pursuant to the budgetary approval process as outlined in
<U>Section&nbsp;5.01(d)(ii)</U> below, without penalty, in either case, together with accrued interest
to the date of such prepayment on the principal amount prepaid; <I>provided, however</I>, that each
partial prepayment shall be in an aggregate principal amount not less than $500,000 or integral
multiples of $500,000 in excess thereof (or such lesser amount as is required to pay the Loan in
full). Upon the giving of such notice of prepayment, the principal amount of the Loan specified to
be prepaid shall become due and payable on the date specified for such prepayment.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;<U>Mandatory Prepayments</U>.&nbsp;&nbsp;The Borrowers shall prepay the Loan (i)&nbsp;in an amount equal
to the Net Cash Proceeds of any Asset Sale completed in accordance with <U>Section&nbsp;6.04(b)</U>,
within one Business Day after receipt of such Net Cash Proceeds; and (ii)&nbsp;from and in the
amount of net proceeds (including from applicable insurance policies) of casualty events and
condemnations with respect to any of their respective Property (the net proceeds shall also be net
of a reserve for the Borrowers&#146; good faith estimate of income and franchise taxes attributable
thereto), and subsequent permitted Indebtedness.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;<U>Prepayment Premiums</U>. Any prepayment in full prior to the Maturity Date shall be
accompanied by a prepayment premium, payable by the Lender in an amount equal to 3% multiplied by
the amount of the Lender&#146;s Commitments; provided, that for the avoidance of doubt, there shall be
no Prepayment Premium payable in accordance with a sale to the Lender or the highest bidder
pursuant to the Sale Motion.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.07 <U>Note</U>. The obligation of the Borrowers to repay the Loan made by the
Lender and to pay interest thereon at the rates provided herein shall at all times be joint and
several obligations and shall be evidenced by a promissory note, substantially in the form of
<U>Exhibit&nbsp;A</U> (the &#147;<U>Note</U>&#148;), executed by all of the Borrowers, payable to the order of
the Lender and in the principal amount of the Lender&#146;s Commitments. Each Borrower authorizes the
Lender to record on the schedule annexed to the Note, the date and amount of each Borrowing
requested by the Borrowers and made by the Lender, and each payment or prepayment of principal
thereunder and agrees that all such notations shall constitute <I>prima facie </I>evidence of the matters
noted. Each Borrower further authorizes the Lender to attach to and make a part of the Note
continuations of the schedule attached thereto as necessary. No failure to make any such
notations, nor any errors in making any such notations, shall affect the validity of the Borrower&#146;s
obligations to repay the full unpaid principal amount of the Loan, together with all interest
thereon and all other amounts and Obligations payable under this Agreement, or the duties of the
Borrowers hereunder or the other Borrowers under the Security Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.08 <U>Expiration of Commitments</U>. The Commitments shall expire on the last day
of the Availability Period.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.09 <U>Interest</U>. Interest shall accrue on Borrowings under the Base Commitment
at the per annum rate of 7% and on Borrowings under the Supplemental Commitment at the per annum
rate of 12%. All interest on the Loan shall be based on a 365/366-day year and actual days
elapsed; <I>provided, however</I>, at all times after the occurrence and during the continuance of an
Event of Default, interest on the Loan shall accrue and be payable at a per annum rate of 12%. All
interest on the outstanding principal balance of the Loan shall be calculated monthly and shall be
payable, at the option of the Borrowers, either (a)&nbsp;in cash, monthly in arrears on each Interest
Payment Date; or (b)&nbsp;by the addition of such amount of interest to the then-outstanding principal
amount of the Loan on such Interest Payment Date; provided that, at maturity or upon any prepayment
of the Loan (whether in whole or in part), all interest then-outstanding shall be payable prior to
giving effect to any payment of principal. If, as of any Interest Payment Date, the Borrowers have
not paid the entire amount of interest then due, such failure to pay interest shall be deemed to be
an irrevocable election by the Borrowers to add such remaining interest to the outstanding
principal amount of the Loan on such Interest Payment Date. Any interest added to principal
pursuant to the provisions of this <U>Section&nbsp;2.09</U> shall, from and after the Interest Payment
Date, accrue interest as if an original part of the principal amount of the Loan.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.10 <U>Increased Costs</U>. If, due to either (a)&nbsp;the introduction of or any change
in or in the interpretation of any Law or regulation; or (b)&nbsp;compliance with any guideline or
request from any Governmental Body (whether or not having the force of Law), there shall be any
increase in the cost to any Lender of agreeing to make or making, funding or maintaining the Loan,
then the Borrowers shall from time to time, upon demand by the Lender, pay to the Lender additional
amounts sufficient to compensate the Lender for such increased cost. A certificate as to the
amount of such increased cost, submitted to the Borrowers by the Lender, shall be conclusive and
binding for all purposes, absent manifest error.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.11 <U>Payments and Computations</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;The Borrowers shall make each payment hereunder and under the Note not later than 11:00
A.M. (Mountain Standard Time) on the day when due, in Dollars, to the Lender at its address
referred to in <U>Section&nbsp;9.01</U> in immediately available funds without set-off or counterclaim.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;Whenever any payment hereunder or under the Note shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment of interest or fee,
as the case may be.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.12 <U>Taxes</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;Any and all payments by the Borrowers under each Credit Document shall be made free and
clear of and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the
case of the Lender, taxes measured by its net income and franchise taxes (imposed in lieu of a tax
on net income) imposed on it by each jurisdiction under the Laws of which the Lender is organized
or any political subdivision thereof and taxes measured by the Lender&#146;s net income and franchise
taxes (imposed in lieu of a tax on net income) imposed on it by each jurisdiction under the Laws of
which the Lender is organized or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as
&#147;<U>Taxes</U>&#148;). If any Borrower shall be required by Law to deduct or withhold any Taxes from or
in respect of any sum payable hereunder to the Lender (i)&nbsp;the sum payable shall be increased as may
be necessary so that after making all required deductions or withholdings (including deductions or
withholdings applicable to additional sums payable under this <U>Section&nbsp;2.12</U>) the Lender, as
the case may be, receives an amount equal to the sum it would have received had no such deductions
or withholdings been made; (ii)&nbsp;such Borrower shall make such deductions or withholdings; and
(iii)&nbsp;such Borrower shall pay the full amount deducted or withheld to the relevant taxing authority
or other authority in accordance with applicable Law.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;In addition, each Borrower agrees to pay any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies of any applicable Governmental
Body which arise from any payment made under any Credit Document or from the execution, delivery,
enforcement or registration of, or otherwise with respect to, any Credit Document (collectively,
&#147;<U>Other Taxes</U>&#148;).
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;Each Borrower agrees to indemnify the Lender for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
<U>Section&nbsp;2.12</U>) paid by the Lender and any liability (including for penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within 30&nbsp;days from the date the
Lender makes written demand therefor.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;Within 30&nbsp;days after the date of any payment of Taxes or Other Taxes, the Borrowers will
furnish to the Lender, at its address referred to in <U>Section&nbsp;9.01</U>, the original or a
certified copy of a receipt evidencing payment thereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(e)&nbsp;Without prejudice to the survival of any other agreement of the Borrowers hereunder, the
agreements and obligations of the Borrowers contained in this <U>Section&nbsp;2.12</U> shall survive
the payment in full of the Obligations.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.13 <U>Super-Priority Nature of Obligations and Liens</U>. Except as otherwise set
forth herein, the Liens and security interests granted to the Lender on the Collateral and the
priorities accorded to the Obligations shall have the super-priority administrative expense and
senior secured status afforded by sections 364(c) and 364(d) of the Bankruptcy Code to the extent
provided and as more fully set forth and or provided for in the Interim DIP Financing Order and
Final DIP Financing Order, as applicable. The Lender&#146;s Liens on the Collateral and the
administrative claims under sections 364(c) and 364(d) of the Bankruptcy Code afforded the
Obligations shall also have priority over any claims arising under section 506(c) of the Bankruptcy
Code subject and subordinate only to the extent provided and as more fully set forth in the Interim
DIP Financing Order and/or the Final DIP Financing Order, subject only to (a)&nbsp;Senior Liens; and (b)
only to the extent there are not sufficient, unencumbered funds in the Debtors&#146; estates to pay such
amounts at the time payment is required to be made, the Carve-Out (as defined below) in an
aggregate amount not to exceed $500,000. The Carve-Out may be used only to pay (a)&nbsp;unpaid fees of
the Clerk of the Bankruptcy Court and the U.S. Trustee pursuant to 28 U.S.C. &#167; 1930(a); (b)&nbsp;allowed
professional fees and expenses of the Debtors and any statutory committee appointed by the
Bankruptcy Court under section 1102 of the Bankruptcy Code (&#147;<U>Statutory Committee</U>&#148;)
(collectively, the &#147;<U>Professional Fees</U>&#148;) incurred to the extent consistent with the Budget,
but unpaid, prior to delivery of a notice of an Event of Default (the &#147;<U>Carve-Out Notice</U>&#148;);
and (c)&nbsp;Professional Fees incurred subsequent to delivery of the Carve-Out Notice to the extent
consistent with the Budget in an amount not to exceed $500,000 (items (a)&nbsp;through (c),
collectively, the &#147;<U>Carve-Out</U>&#148;); <I>provided, however</I>, that the Carve-Out shall not include,
apply to or be available for any fees or expenses incurred by any party, including the Borrowers or
any Statutory Committee, in connection with the investigation, initiation or prosecution of any
claims, causes of action, adversary proceedings or other litigation against the Lender, including
challenging the amount, validity, priority or enforceability of, or asserting any defense, claim,
counterclaim or offset to, the Obligations or the Liens of the Lender under this Agreement in
respect thereof. The Lender agrees that so long as the Maturity Date shall not have occurred or
the Lender has not exercised any remedies as a result of an Event of Default, the Borrowers shall
be permitted to pay compensation and reimbursement of expenses allowed and payable under sections
330 and 331 of the Bankruptcy Code, as the same may be due and payable, and the same shall not
reduce the amount available under the Carve-Out. The foregoing shall not be construed as a
consent to the allowance of any fees and expenses or bonuses referred to above
and shall not affect the right of the Borrowers or the Lender to object to the allowance and
payment of such amounts. Except as expressly set forth herein or in the Interim DIP Financing
Order and/or the Final DIP Financing Order, no other claim having a priority superior or <I>pari passu</I>
to that granted to the Lenders by the Interim DIP Financing Order and/or the Final DIP Financing
Order shall be granted or approved while any Obligations under this Agreement remain outstanding.</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.14 <U>No Discharge; Survival of Claims</U>. Except as otherwise set forth herein,
(a)&nbsp;in the absence of the Maturity Date having occurred, the Obligations shall survive the entry of
an order (i)&nbsp;confirming any chapter 11 plan in the Bankruptcy Cases, (ii)&nbsp;converting the Bankruptcy
Cases to one or more cases under chapter 7 of the Bankruptcy Code, or (iii)&nbsp;dismissing the
Bankruptcy Cases, and (b)&nbsp;the super-priority administrative claim granted to the Obligations and
all Liens granted to the Lender shall continue in full force and effect and maintain their priority
as set forth in the Interim DIP Financing Order and/or the Final DIP Financing Order until full
payment of the Obligations.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.15 <U>Waiver of Any Priming and Surcharge Rights</U>. The Borrowers hereby
irrevocably waive any right (i)&nbsp;pursuant to sections 364(c) or 364(d) of the Bankruptcy Code or
otherwise, to grant any Lien of equal or greater priority than the Liens securing the Obligations;
(ii)&nbsp;to approve or grant a claim of equal or superior priority than the Obligations; and (iii)&nbsp;to
surcharge the Collateral or the Lender pursuant to sections 105, 506(c) and 552 of the Bankruptcy
Code.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;2.16 <U>Control Account; Sweep of Funds</U>. At all times, each Borrower shall cause
all Collections to be deposited, within two Business Days of receipt, in the exact form received in
the Control Account. Until so deposited, such funds shall be held by such Borrower in trust for
the Lender. All proceeds being held by the Lender in the Control Account (or by such Borrower in
trust for the Lender) shall continue to be held as collateral security for the Obligations and
shall not constitute payment of the Obligations. Amounts deposited in the Control Account shall not
be subject to withdrawal by any Borrower, except after payment in full and discharge of all
Obligations.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE III
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">CONDITIONS
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;3.01 <U>Conditions Precedent to the initial Borrowing of the Loan</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The obligation of the Lender to fund the initial Borrowing under the Loan on the Closing Date
is subject to satisfaction of all of the following conditions precedent:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;<U>Consent by Borrowers to Entry of Orders for Relief.</U> The Borrowers shall have
consented to entry of Orders for Relief in the Bankruptcy Cases by each filing a voluntary petition
for relief under the Bankruptcy Code with the Bankruptcy Court.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;<U>Joint Administration</U>. The Bankruptcy Court shall have entered an order
authorizing the joint administration of all of the Bankruptcy Cases.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;<U>Certain Documents</U>.&nbsp;&nbsp;The Lender shall have received, on the Closing Date, the
following, each dated the Closing Date unless otherwise indicated, in form and substance
satisfactory to the Lender:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">From each party hereto either (i)&nbsp;a counterpart of this
Agreement signed on behalf of such party; or (ii)&nbsp;written evidence satisfactory
to the Lender (which may include telecopy transmission of a signed signature
page to this Agreement) that such party has signed a counterpart of this
Agreement;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The original Note payable to the order of the Lender, duly
executed by the Borrowers;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The Security Agreement, duly executed by the Borrowers,
together with:</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(A)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">certificates, if any, representing the Pledged
Certificated Equity Interests;</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(B)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">a first deed of trust or first mortgage (as
applicable based on the jurisdiction in question) with respect to the
Owned Real Property designated on <U>Schedule&nbsp;4.13-A</U> as Initially
Secured Owned Real Property (the &#147;<U>Initially Secured Owned Real
Properties</U>&#148;), in form and substance reasonably satisfactory to the
Lender and its counsel, duly executed by the applicable Borrower and
prepared for filing with the applicable recording authority;</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(C)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">commitments for an American Land Title
Association policy or state equivalent policy of title insurance, with
such endorsements as the Lender may reasonably require, issued by an
insurer in such amounts as the Lender may reasonably require with
respect to each of the Initially Secured Owned Real Properties and
insuring the Lender&#146;s first priority lien on said real estate, subject
only to such exceptions as the Lender in its discretion may approve,
together with such evidence relating to the payment of liens or
potential liens as the Lender may require;</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(D)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">an account control agreement duly executed by
the applicable financial institution and the applicable Borrowers, or
other withdrawal release control with respect to the Control Account,
in either case in form and substance satisfactory to the Lender
directing that (i)&nbsp;all withdrawals from the Control Account shall be
subject to approval of Lender; and (ii)&nbsp;after the occurrence and during
the continuance of an Event of Default, on notice by Lender, all of the
accounts set forth on Schedule&nbsp;4.16 (other than the Control Account)
shall be in the exclusive control of the Lender; and</DIV></TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(E)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">a termination and release agreement in form and
substance satisfactory to the Lender, duly executed by the Textron
Lenders (or their applicable successors and assigns) providing for the
immediate release of all of its security interests in the assets of the
Borrowers then held as collateral securing the Textron Facility,
subject only to the condition of satisfaction of the obligations
thereunder.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Copies of (A)&nbsp;the audited consolidated balance sheets for the
Borrowers as of March&nbsp;27, 2009 and March&nbsp;26, 2010, and the related audited
consolidated statements of operations and cash flows for the fiscal year ending
as of such date; (B)&nbsp;the unaudited consolidated balance sheet of the Borrowers
as of September&nbsp;24, 2010, and the related unaudited statements of operations
and cash flows for the three and six-month periods ending as of such date; and
(C)&nbsp;the unaudited balance sheets and related statements of operations,
stockholders&#146; equity, and cash flow as of and for the month ended October&nbsp;29,
2010, all of which have been made available to Lender;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(v)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Receipt by the Lender of the following (or their equivalent)
for each of the Borrowers, certified by a Responsible Officer as of the Closing
Date to be true and correct and in force and effect as of such date:</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(A)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify"><U>Resolutions</U>. Copies of resolutions of
the board of directors approving and adopting the respective Credit
Documents, the transactions contemplated therein and authorizing
execution and delivery thereof;</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(B)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify"><U>Good Standing</U>. Copies of certificates
of good standing, existence or its equivalent certified as of a recent
date by the appropriate Governmental Bodies of the state of
incorporation; and</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(C)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify"><U>Incumbency Certificate</U>. A certificate
of the Secretary or an Assistant Secretary of each of the Borrowers
certifying the names and true signatures of each officer of each
Borrower who has been authorized to execute and deliver any Credit
Document or other document required hereunder to be executed and
delivered by or on behalf of such Borrower; <I>provided </I>that no Secretary
may certify to his or her own signature.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(vi)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify"><U>Officer&#146;s Certificate Regarding Conditions Precedent</U>.
A certificate, signed by a Responsible Officer of each of the Borrowers,
stating that each of the conditions specified in <U>Section&nbsp;3.02(a)</U> and
<U>Section&nbsp;3.02(b)</U> has been satisfied; and</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(vii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify"><U>Other Documents and Information</U>. Such additional
documents, information and materials as the Lender may reasonably request.</DIV></TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;<U>Absence of Legal Proceedings</U>. There shall be no action, suit, investigation or
proceeding (other than the Bankruptcy Cases) pending in any court or before any arbitrator or
governmental instrumentality which, in the sole discretion of the Lender (as evidenced by the
funding of the initial Borrowing hereunder; <I>provided </I>that the Lender shall not be deemed to be
bound by such determination of materiality for any other purpose under this Agreement), could be
expected to have a Material Adverse Effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(e)&nbsp;<U>DIP Financing Orders</U>. The Lender shall have received evidence satisfactory to the
Lender, in its sole discretion, that the Interim DIP Financing Order has been entered by the
Bankruptcy Court and docketed by the Clerk of the Bankruptcy Court, and that such order shall be in
full force and effect and shall not have been vacated, reversed, modified, amended, or stayed
pending appeal. The Interim DIP Financing Order shall be satisfactory in content to the Lender and
shall, among other things:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">authorize the Borrowers to enter into this Agreement and the
other Credit Documents, grant the Liens provided for herein and therein,
execute all of the documents required hereby and thereby, repay all
Indebtedness incurred by the Borrowers pursuant to this Agreement and the other
Credit Documents, and perform any and all other obligations of the Borrowers
under this Agreement and the other Credit Documents;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">provide that this Agreement and the other Credit Documents
shall be binding upon and enforceable against any trustee in the Bankruptcy
Cases or any trustee in any ensuing chapter 7 bankruptcy case should conversion
to one or more cases under chapter 7 of the Bankruptcy Code;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">with respect to the Obligations, grant secured status pursuant
to sections 364(c)(2), 364(c)(3) and 364(d) of the Bankruptcy Code with respect
to all Liens granted to the Lender pursuant to this Agreement and the other
Credit Documents and provide that such Liens shall be automatically perfected
and have priority over and be senior to any and all other Liens in any of the
Collateral subject only to (A)&nbsp;validly existing Liens of the Textron Agent and
the Textron Lenders under the Textron Facility, (B)&nbsp;validly existing Liens of
Virgo under the Virgo Credit Agreement and (C)&nbsp;Liens existing as of the
Petition Date (the items referred to in clauses (A), (B)&nbsp;and (C)&nbsp;are,
collectively, the &#147;<U>Senior Liens</U>&#148;) and the Carve-Out;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">provide that the Obligations constitute allowed administrative
expense claims pursuant to section 364(c)(1) of the Bankruptcy Code having
priority over all administrative expenses of the kind specified in sections
503(b) and 507(b) of the Bankruptcy Code (except as otherwise provided in this
Agreement);</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(v)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">state that there shall be no priming of any Lien of the Lender
other than pursuant to this Agreement;</DIV></TD>
</TR>

</TABLE>
</DIV><P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

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<DIV style="margin-top: 10pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(vi)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">provide that the automatic stay of section 362(a) of the
Bankruptcy Code is modified to permit the Lender, upon the occurrence and
during the continuance of a Default or an Event of Default, to (A)&nbsp;terminate
the Commitments and accelerate all of the Obligations and all other obligations
under this Agreement and the other Credit Documents without notice; and (B)
exercise any other rights and remedies under the Credit Documents, the DIP
Financing Orders or applicable Law after providing five Business Days prior
written notice to the Borrowers, any Statutory Committee appointed in the
Bankruptcy Cases and the office of the United States Trustee with only one
notice required, for any Event of Default, or series of Events of Default
arising out of the same circumstances.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(f)&nbsp;<U>Motions, Etc.</U> The Lender shall have reviewed and found satisfactory (i)&nbsp;all
motions, orders and other pleadings or related documents to be filed or submitted to the Bankruptcy
Court in connection with this Agreement, including the Critical Vendor Motion; and (ii)&nbsp;all First
Day Orders and related orders to be filed by the Borrowers with the Bankruptcy Court in the
Bankruptcy Cases;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(g)&nbsp;<U>Initial Projected Budget</U>. The Lender shall have received the Initial Projected
Budget, in form, scope and substance satisfactory to the Lender in its sole discretion;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(h)&nbsp;<U>No Performance Triggers</U>. No Performance Trigger shall have occurred and be
continuing, and no event, condition or change shall exist or have occurred that, individually or in
the aggregate, could reasonably be expected to cause a Performance Trigger to occur; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(i)&nbsp;<U>No Material Adverse Change</U>. Since the Petition Date, there shall have been no
event, condition or change that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect (other than those events caused by or arising out of the Bankruptcy
Cases, including the loss of certain employees, officers, and directors by termination,
resignation, or otherwise) in (i)&nbsp;the business, condition, operations, assets, or prospects of the
Borrowers; (ii)&nbsp;the ability of the Borrowers to perform under this Agreement; or (iii)&nbsp;the ability
of the Lender to enforce this Agreement and the obligations of the Borrowers hereunder.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;3.02 <U>Conditions Precedent to Each Borrowing</U>. The obligation of the Lender to
fund any Borrowing (including the Borrowing being made by the Lender on the Closing Date) shall be
subject to the further conditions precedent that:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;<U>Accuracy of Certain Statements</U>. The following statements shall be true on the
date of such Loan, before and after giving effect thereto, and to the application of the proceeds
therefrom (and the acceptance by the Borrowers of the proceeds of such Loan shall constitute a
representation and warranty by the Borrowers that on the date of such Loan such statements are
true):
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The representations and warranties of the Borrowers contained
in Article&nbsp;IV of this Agreement and in the other Credit Documents are true and
correct on and as of such date as though made on and as of such date
(unless such representations and warranties are made as of another date, in
which case they shall be true and correct as of such date);</DIV></TD>
</TR>

</TABLE>
</DIV><P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV style="margin-top: 10pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">No Default or Event of Default has occurred and is continuing
or will result from the Loan being made on such date; and</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">No Performance Trigger has occurred and is continuing and no
event, condition or change that, individually or in the aggregate, could
reasonably be expected to cause a Performance Trigger to occur.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;<U>No Violation of Law or Injunction</U>. The making of the Loan on such date does not
violate any Law and is not enjoined, temporarily, preliminarily or permanently.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;<U>Final Order</U>. With respect to any Loan requested to be funded after January&nbsp;13,
2011, the Final DIP Financing Order shall have become a Final Order.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE IV
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">REPRESENTATIONS AND WARRANTIES
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">To induce the Lender to enter into this Agreement, the Borrowers, jointly and severally,
hereby represent and warrant to the Lender on the date hereof and on each date that a Weekly Budget
is delivered, that:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.01 <U>Financial Condition</U>. The Borrowers have provided to the Lender the
following consolidated financial statements with respect to the Borrowers: (a)&nbsp;audited balance
sheets and related statements of operations, stockholders&#146; equity, and cash flows as of and for the
fiscal years ended March&nbsp;27, 2009 and March&nbsp;26, 2010; (b)&nbsp;unaudited balance sheets and related
statements of operations, stockholders&#146; equity, and cash flow as of and for the three- and
six-month periods ended September&nbsp;24, 2010; and (c)&nbsp;unaudited balance sheets and related statements
of operations, stockholders&#146; equity, and cash flow as of and for the month ended October&nbsp;29, 2010.
All of such financial statements (including the notes thereto) have been prepared in accordance
with GAAP throughout the periods covered thereby and present fairly, in all material respects, the
respective financial positions of the Borrowers as of such dates and the respective results of
operations of the Borrowers for such periods; <I>provided, however</I>, that the financial statements
referred to in clauses (b)&nbsp;and (c)&nbsp;above are subject to normal year-end adjustments and lack
footnotes and other presentation items required by GAAP.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.02 <U>No Changes or Restricted Payments</U>. Since September&nbsp;24, 2010, except as
set forth in <U>Schedule&nbsp;4.02</U> (a)&nbsp;other than the commencement of the Bankruptcy Cases, there
has been no circumstance, development or event relating to or affecting the Borrowers which has had
or would be reasonably expected to have a Material Adverse Effect; and (b)&nbsp;except as permitted
herein, no Restricted Payments have been made or declared by the Borrowers.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.03 <U>Due Incorporation and Authority</U>. Each Borrower is a corporation, limited
liability company or limited partnership duly organized, validly existing and in good standing
under the Laws of the state of its organization and has all necessary corporate, limited
liability company or limited partnership power and authority to own, lease and operate its
assets and to carry on its business as it is now being conducted, except where such failure would
not reasonably be expected to have a Material Adverse Effect. Each Borrower has all requisite
corporate, limited liability company or limited partnership power and authority to enter into this
Agreement and all of the other Credit Documents to which it is a party and carry out its
obligations hereunder and consummate the transactions contemplated hereby and thereby. The
execution and delivery by such Borrower of this Agreement, the performance by such Borrower of its
respective obligations hereunder and the consummation by such Borrower of the transactions
contemplated hereby have been duly authorized by all requisite corporate, limited liability company
or limited partnership action on the part of such Borrower. This Agreement and all of the other
Credit Documents have been duly executed and delivered by each Borrower, and, upon due
authorization, execution and delivery hereof by the Lender, each of the Credit Documents shall
constitute the legal, valid and binding obligation of each Borrower party thereto, enforceable
against each such Borrower in accordance with its terms, except to the extent enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar Laws affecting creditors rights
generally or by general principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at Law).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.04 <U>No Conflicts; Default or Event of Default</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;The execution and delivery by Borrowers of this Agreement, the consummation of the
transactions contemplated hereby, and the performance by the Borrowers of this Agreement in
accordance with its terms shall not:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">violate the certificate of incorporation or by-laws or
comparable organizational instruments of any Borrower or contravene any
resolution adopted by the directors, managers, shareholders, members or
partners of any Borrower or any Borrower;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">violate any Law to which any Borrower, the Business, any of the
Property, any of the Borrowers is bound or subject;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">result in the imposition or creation of any Lien (other than a
Permitted Lien) on any Property of any Borrower; or</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">violate, result in any breach of, constitute a default (or an
event that, with notice or lapse of time or both, would become a default)
under, or require any consent of any Person (including any Governmental Body)
pursuant to, any Contractual Obligation or Permit to which any Borrower is a
party or by which it is bound, or any Permit held by a Borrower, except for
consents, approvals or authorizations of, or declarations or filings with, the
Bankruptcy Court;</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><U>provided</U>, <U>however</U>, that each of the cases set forth in clauses (ii), (iii)&nbsp;and (iv)
above is subject to exceptions that (A)&nbsp;would not reasonably be expected, either individually or in
the aggregate, to prevent or materially delay the consummation by the Borrowers of the transactions
contemplated by this Agreement; or (B)&nbsp;arise as a result of any facts or circumstances relating to
the Lender or any of its Affiliates.
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;Except as set forth on <U>Schedule&nbsp;4.04(b)</U>, no Borrower has defaulted on any payment
under or with respect to any Contractual Obligation owed by it other than those defaults which in
the aggregate have no Material Adverse Effect and no Default or Event of Default hereunder has
occurred and is continuing.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.05 <U>Organizational Documents; Meeting Minutes</U>. The Borrowers have delivered
to the Lender prior to the date hereof true, accurate and complete copies of the certificate of
incorporation and bylaws, or comparable organizational instruments, of the Borrowers as in effect
on the date hereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.06 <U>Litigation</U>. Except for the Bankruptcy Cases and other matters on the
docket related thereto and except as otherwise disclosed on <U>Schedule&nbsp;4.06</U>, (i)&nbsp;there are no
material claims (including with respect to product liability claims) pending or, to the Knowledge
of the Borrowers, threatened against any Borrower with respect to the Business (or any part
thereof), any of the Real Properties or any of the other Property of the Borrowers; and (ii)&nbsp;there
are no claims pending or, to the Knowledge of the Borrowers, threatened by or against any Borrower
that challenge the validity of this Agreement or any of the transactions contemplated hereby or
that, either individually or in the aggregate, would reasonably be expected to prevent or
materially delay the consummation by the Borrowers of the transactions contemplated by this
Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.07 <U>Intellectual Property</U>. Each of the Borrowers owns, or has the legal
right to use, the Intellectual Property necessary for it to conduct its Business as currently
conducted. No claim has been asserted and is pending by any Person challenging or questioning the
use of any such Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Borrower have Knowledge of any such claim, and to the Borrower&#146;s Knowledge
the use of such Intellectual Property by each Borrower does not infringe on the rights of any
Person.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.08 <U>Taxes</U>. Each of the Borrowers, as applicable, has filed all federal and
other tax returns and material reports required to be filed, and has paid all federal and other
taxes, assessments, fees and other governmental charges levied or imposed upon it or its
properties, income or assets otherwise due and payable unless such unpaid taxes and assessments (a)
arose prior to the Petition Date and are not the subject of a pending and unstayed assessment or
collection action; or (b)&nbsp;are (i)&nbsp;not yet past due or (ii)&nbsp;being contested in good faith and by
appropriate proceedings diligently pursued and as to which adequate reserves determined in
accordance with GAAP have been established on such Borrower&#146;s books and records and no Lien with
respect to nonpayment thereof has been asserted. No Borrower is aware of any proposed tax
assessments against it, with respect to any prior period, in excess of amounts accrued on its
financial statements (as required to be accrued in accordance with GAAP), nor do the Borrowers
anticipate any further material tax liability with respect to any open taxable years taken as a
whole in excess of accrued amounts.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.09 <U>ERISA</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;During the five-year period prior to the date on which this representation is made or
deemed made: (i)&nbsp;no ERISA Event has occurred, and, to the best Knowledge of the
Borrowers, no event or condition has occurred or exists as a result of which any ERISA Event
could reasonably be expected to occur, with respect to any Plan; (ii)&nbsp;no &#147;accumulated funding
deficiency,&#148; as such term is defined in section 302 of ERISA and section 412 of the Internal
Revenue Code, whether or not waived, has occurred with respect to any Plan; (iii)&nbsp;each Plan has
been maintained, operated and funded in compliance with its own terms and in material compliance
with the provisions of ERISA, the Internal Revenue Code and any other applicable federal or state
Laws; and (iv)&nbsp;no Lien in favor of the PBGC or a Plan has arisen or is reasonably likely to arise
on account of any Plan.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;The actuarial present value of all &#147;benefit liabilities&#148; (as defined in section
4001(a)(16) of ERISA), whether or not vested, under each Single Employer Plan, as of the last
annual valuation date prior to the date on which this representation is made or deemed made
(determined, in each case, in accordance with Financial Accounting Standards Board Accounting
Standards Codification (&#147;<U>FASB ASC</U>&#148;) 960, 962 and 965, utilizing the actuarial assumptions
used in such Plan&#146;s most recent actuarial valuation report), did not exceed as of such valuation
date the fair market value of the assets of such Plan.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;Neither the Borrowers nor any ERISA Affiliate has incurred, or, to the best Knowledge of
the Borrowers, could be reasonably expected to incur, any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. Neither the Borrowers nor any ERISA Affiliate would
become subject to any withdrawal liability under ERISA if the Borrowers or any ERISA Affiliate were
to withdraw completely from all Multiemployer Plans and Multiple Employer Plans as of the valuation
date most closely preceding the date on which this representation is made or deemed made. Neither
the Borrowers nor any ERISA Affiliate has received any notification that any Multiemployer Plan is
in reorganization (within the meaning of section 4241 of ERISA), is insolvent (within the meaning
of section 4245 of ERISA), or has been terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is, to the best Knowledge of the Borrowers, reasonably expected to be in
reorganization, insolvent, or terminated.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;No prohibited transaction (within the meaning of section 406 of ERISA or section 4975 of
the Internal Revenue Code) or breach of fiduciary responsibility has occurred with respect to a
Plan which has subjected or may subject the Borrowers or any ERISA Affiliate to any liability under
sections 406, 409, 502(i) or 502(l) of ERISA or section 4975 of the Internal Revenue Code, or under
any agreement or other instrument pursuant to the Borrowers or any ERISA Affiliate has agreed or is
required to indemnify any person against any such liability.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(e)&nbsp;Neither the Borrowers nor any ERISA Affiliate has any material liability with respect to
&#147;expected post-retirement benefit obligations&#148; within the meaning of the FASB ASC 715. Each Plan
which is a welfare plan (as defined in section 3(1) of ERISA) to which sections 601-609 of ERISA
and section 4980B of the Internal Revenue Code apply has been administered in compliance in all
material respects of such sections.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(f)&nbsp;Neither the execution nor delivery of this Agreement nor the consummation of the financing
transactions contemplated thereunder will involve any transaction which is subject to the
prohibitions of sections&nbsp;404, 406 or 407 of ERISA or in connection with which a tax could be
imposed pursuant to section&nbsp;4975 of the Internal Revenue Code.
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.10 <U>Governmental Regulations, Etc</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;No part of the proceeds of the Loan hereunder will be used, directly or indirectly, for
the purpose of purchasing or carrying any &#147;margin stock&#148; within the meaning of Regulation&nbsp;U. If
requested by the Lender, the Borrowers will furnish to the Lender a statement to the foregoing
effect in conformity with the requirements of FR Form&nbsp;U-1 referred to in said Regulation&nbsp;U. No
Indebtedness being reduced or retired out of the proceeds of the Loan hereunder was or will be
incurred for the purpose of purchasing or carrying any margin stock within the meaning of
Regulation&nbsp;U or any &#147;margin security&#148; within the meaning of Regulation&nbsp;T. &#147;Margin stock&#148; within
the meanings of Regulation&nbsp;U does not constitute more than 25% of the value of the consolidated
assets of the Borrowers and their Subsidiaries. None of the transactions contemplated by this
Agreement (including the direct or indirect use of the proceeds of the Loan) will violate or result
in a violation of the Securities Act of 1933, as amended or the Exchange Act, or regulations issued
pursuant thereto, or Regulation&nbsp;T, U or X.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;No Borrower intends to, and no Borrower will, use any proceeds of the Loan for any purpose
that is improper under the Bankruptcy Code.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;The Borrowers are not subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act or the Investment Company Act of 1940, each as amended. In
addition, none of the Borrowers is (i)&nbsp;an &#147;investment company&#148; registered or required to be
registered under the Investment Company Act of 1940, as amended, and is not controlled by such a
company; or (ii)&nbsp;a &#147;holding company&#148;, or a &#147;subsidiary company&#148; of a &#147;holding company&#148;, or an
&#147;affiliate&#148; of a &#147;holding company&#148; or of a &#147;subsidiary&#148; of a &#147;holding company&#148;, within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;No director, executive officer or principal shareholder of the Borrowers is a director,
executive officer or principal shareholder of the Lender. For the purposes hereof the terms
&#147;director&#148;, &#147;executive officer&#148; and &#147;principal shareholder&#148; (when used with reference to any
Lender) have the respective meanings assigned thereto in Regulation&nbsp;O.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.11 <U>No Subsidiaries</U>. Except as set forth on <U>Schedule&nbsp;4.11</U>, each of
the Borrowers represents that, as of the Closing Date, there are no Subsidiaries.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.12 <U>Use of Proceeds</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;The proceeds of the Loan made hereunder shall be used by the Borrowers solely as set forth
in <U>Section&nbsp;2.02</U> above:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">to pay in full the Textron Facility;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">to make payments under the Critical Vendor Motion and any order
of the Bankruptcy Court thereon;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">to pay the payables owed by the Borrowers that have been
approved by the Lender pursuant to the budgetary approval process as outlined
in <U>Section&nbsp;5.01(d)(ii)</U> below; and</DIV></TD>
</TR>

</TABLE>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV style="margin-top: 10pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">for general working capital purposes (including the
contribution to corporate overhead expenses and general restructuring costs as
provided for herein).</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;None of the proceeds of the Loan may be used by the Borrowers to amortize, repay or prepay
any Indebtedness of the Borrowers for borrowed money, except as expressly provided herein with
respect to the Textron Facility and such payments as are expressly consented to in writing by the
Lender after the date hereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;No proceeds of the Loan or the Collateral will be used by the Borrowers or any other
Person (including any statutory committee appointed in the Bankruptcy Cases) to (i)&nbsp;object to or
contest in any manner, or raise any defenses to, the validity, extent, perfection, priority or
enforceability of the Obligations, the Liens granted to the Lender under this Agreement and the
Collateral Documents or any other rights or interests of the Lender under this Agreement and the
other Credit Documents; or (ii)&nbsp;assert any claims or causes of action, including any actions under
Chapter&nbsp;5 of the Bankruptcy Code, against the Lender.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.13 <U>Real Property</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;<U>Schedule&nbsp;4.13-A</U> lists the street address of each parcel of Owned Real Property.
The applicable Borrower has fee simple title to each Owned Real Property. Except for the Owned
Real Property, no Borrower now owns any interest in any real property, other than leasehold
interests and other than the REO real property obtained from HUD or other parties and held for
sale.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;<U>Schedule&nbsp;4.13-B</U> lists the street address (where available) of each parcel of
Leased Real Property (the Leased Real Property together with the Owned Real Property, are
collectively referred to herein as the &#147;<U>Real Properties</U>&#148;), with respect to each lease (each
a &#147;<U>Real Property Lease</U>&#148;) in effect with respect to each Leased Real Property.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;The Borrowers have delivered to the Lender complete and accurate copies of all Real
Property Leases, including all addenda, amendments, extensions and supplements thereto and
assignments thereof. No Borrower has entered into any contract, arrangement or understanding with
any third party landlord, written or oral, that in any way alters or affects the express terms and
conditions of any Real Property Lease. Each Real Property Lease is valid and binding on the
applicable Borrower and, to the Knowledge of the Borrowers, the counterparties thereto, and is in
full force and effect. No Borrower is in default under any Real Property Lease and, to the
Knowledge of the Borrowers, no other counterparty to any Real Property Lease is in default thereof
which, in either case could reasonably be expected to have a Material Adverse Effect. Except as
provided in the lease documents delivered to the Lender, to the Knowledge of Borrowers, no Borrower
has (i)&nbsp;subleased, licensed or otherwise granted any Person the right to use or occupy any Leased
Real Property or any portion thereof, or (ii)&nbsp;collaterally assigned or granted any other Lien in or
over any Real Property Lease or any interest therein.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;The Borrowers&#146; use of the Real Properties for the various purposes for which they are
presently being used are permitted as of right under all applicable Laws (including zoning
Laws) except where the failure to comply could not reasonably be expected to have a Material
Adverse Effect.</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(e)&nbsp;To the Knowledge of the Borrowers except where the failure to comply could not reasonably
be expected to have a Material Adverse Effect, (i)&nbsp;all of the Real Properties, including buildings,
fixtures and other improvements thereon, are in good operating condition and repair, ordinary wear
and tear excepted, and no Owned Real Property is in need of repair other than as part of routine
maintenance in the ordinary course of business; and (ii)&nbsp;all buildings, structures, improvements
and fixtures on each of the Real Properties are in compliance in all material respects with all
applicable Laws, including Occupational Safety and Health Laws.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(f)&nbsp;To the Knowledge of the Borrowers, except as provided in the Real Property Leases or
recorded in the real property records, and except as set forth in <U>Schedule&nbsp;4.13(f),</U> no
Borrower has (i)&nbsp;leased, subleased, licensed or otherwise granted to any Person the current or
future right to use or occupy any of the Real Properties or any portion thereof; or (ii)&nbsp;granted to
any Person any option, right of first refusal, offer, or other contract or right to purchase,
acquire, lease, sublease, assign or dispose of any interest in any of the Real Properties.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(g)&nbsp;The Real Properties constitute all of the real property currently used by the Borrowers in
the conduct of the Business.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(h)&nbsp;There does not exist any actual or, to the Knowledge of the Borrowers, overtly threatened
or contemplated condemnation or eminent domain proceeding that affects or could be reasonably
expected to affect any Real Property or any part thereof, and no Borrower has received any written
notice of the intention of any Governmental Body to undertake any such proceeding with respect to
any of the Real Properties, or any part thereof that in either case would reasonably be expected to
have a Material Adverse Effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(i)&nbsp;Except as set forth on <U>Schedule&nbsp;4.13(i)</U>, no Borrower has any ongoing dispute or
disagreement with any landlord in respect of any obligation of such Borrower or such landlord under
the terms of any Real Property Lease or under applicable Law with respect to any Leased Real
Property, other than such disputes arising from and solely related to the Bankruptcy Cases.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.14 <U>Environmental Matters</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;Except as set forth in <U>Schedule&nbsp;4.14,</U> each Borrower is currently, and since
January&nbsp;1,&nbsp;2005 has been, in compliance in all material respects with all applicable Environmental
Laws applicable to its Business, the Property and the Property of its direct and indirect
Subsidiaries. Except as set forth in <U>Schedule&nbsp;4.14</U>, there are no claims pursuant to any
Environmental Law pending or, to the Knowledge of the Borrowers, threatened against any Borrower in
connection with the conduct or operation of the Business or the ownership or use of any of the Real
Properties (or any of them). Except as set forth in <U>Schedule&nbsp;4.14</U>, within the past five
years, no Borrower has received any actual or threatened order, notice or other written
communication from any Governmental Body or other Person of any actual or potential violation or
failure of any Borrower to comply with any Environmental Law or of any actual or threatened
obligation on the part of any Borrower to undertake or bear the cost of any Environmental,
Health and Safety Liabilities with respect to any of the Real Properties or any of its other
Property.</DIV>
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</DIV>

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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;Except as set forth in <U>Schedule&nbsp;4.14</U>, no Borrower is currently required to
undertake any corrective or remedial obligation under any Environmental Law with respect to the
Business, any of its Property or any of the Leased Real Properties.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;The Borrowers have made available to the Lender all Phase I and Phase II, if any,
environmental reports, other engineering reports and any other material documents in the Borrowers&#146;
possession relating to any environmental or health or safety matters, relating to the Real
Properties and any of its other Property. Except as set forth on <U>Schedule&nbsp;4.14,</U> or except
to the extent disclosed in such environmental and engineering reports, to the Knowledge of the
Borrowers, there are no Hazardous Materials present on or in the environment at any of the Real
Properties, including any Hazardous Materials contained in barrels, aboveground or underground
storage tanks, landfills, land deposits, dumps, equipment (whether movable or fixed) or other
containers, either temporary or permanent, and deposited or located in land, water, sumps, or any
other part of any of the Real Properties, or incorporated into any structure therein or thereon,
except in material compliance with all applicable Environmental Laws.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;Except as set forth on <U>Schedule&nbsp;4.14</U>, no Borrower has conducted or knowingly
permitted any Hazardous Activity on or with respect to any of the Real Properties.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.15 <U>Disclosure</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;Neither this Agreement, any of the financial statements delivered to the Lender, any other
document, certificate or statement furnished to the Lender (with the exception of any Projected
Budget or Weekly Budget) nor any of the information delivered in writing to the Bankruptcy Court by
or on behalf of the Borrowers in connection with the transactions contemplated hereby contains any
untrue statement of a material fact or omits to state a material fact necessary in order to make
the statements contained therein or herein not misleading.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;Each Projected Budget (including the Initial Projected Budget) and Weekly Budget furnished
to the Lender by or on behalf of any member of the Borrowers in connection with the transactions
contemplated hereby have been prepared in good faith on the basis of reasonable assumptions.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.16 <U>Bank Accounts</U>. <U>Schedule&nbsp;4.16</U> contains a complete and accurate
list of all bank accounts maintained by the Borrowers with any bank or other financial institution.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.17 <U>Account Debtors</U>. <U>Schedule&nbsp;4.17</U> lists the address in the
Borrowers&#146; records of each Person who is obligated to remit payments of any kind to any Borrower.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.18 <U>Insurance</U>. All policies of insurance of any kind or nature owned by or
issued to the Borrowers, including policies of life, fire, theft, product liability, public
liability, property damage, other casualty, employee fidelity, workers&#146; compensation and employee
health and welfare insurance, are (a)&nbsp;in full force and effect; (b)&nbsp;to the Knowledge of
the Borrowers, sufficient; and (c)&nbsp;of a nature and provide such coverage as is customarily
carried by companies of the size and character of such Person.</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.19 <U>Labor Matters</U>. Except as set forth on <U>Schedule&nbsp;4.19</U>,
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;There are no strikes, work stoppages, slowdowns or lockouts pending or, to the Knowledge
of the Borrowers, threatened against or involving the Borrowers, other than those which in the
aggregate have no Material Adverse Effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;There are no arbitrations or grievances pending against or involving the Borrowers, nor
are there any arbitrations or grievances, to the Knowledge of the Borrowers, threatened involving
the Borrowers, other than those which, in the aggregate, if resolved adversely to the Borrowers,
would have no Material Adverse Effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;There is no organizing activity involving the Borrowers pending or, to the Knowledge of
the Borrowers, threatened by any labor union or group of employees, other than those which in the
aggregate have no Material Adverse Effect. There are no representation proceedings pending or, to
the Knowledge of the Borrowers, threatened with the National Labor Relations Board, and no labor
organization or group of employees of the Borrowers has made a pending demand for recognition,
other than those which in the aggregate have no Material Adverse Effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;There are no unfair labor practices charges, grievances or complaints pending or in
process or, to the Knowledge of the Borrowers, threatened by or on behalf of any employee or group
of employees of the Borrowers, other than those which in the aggregate, if adversely determined,
would have no Material Adverse Effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(e)&nbsp;There are no complaints or charges against the Borrowers pending or, to the Knowledge of
the Borrowers, threatened to be filed with any federal, state, local or foreign court, governmental
agency or arbitrator based on, arising out of, in connection with, or otherwise relating to the
employment by the Borrowers of any individual, other than those which in the aggregate, if resolved
adversely, would have no Material Adverse Effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(f)&nbsp;The Borrowers are in compliance with all Laws, and all orders of any court, Governmental
Body or arbitrator, relating to the employment of labor, including all such Laws relating to wages,
hours, collective bargaining, discrimination, civil rights, and the payment of withholding and/or
social security and similar taxes, except for such non-compliances that in the aggregate have no
Material Adverse Effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.20 <U>Reorganization Matters</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;The Borrowers&#146; bankruptcy cases jointly administered as the Bankruptcy Cases were
commenced on the Petition Date in accordance with applicable Law and proper notice thereof and
proper notice of the hearings to consider entry of the Interim DIP Financing Order has been given
and proper notice of the hearing to consider entry of the Final DIP Financing Order will be given.
</DIV>
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</DIV>

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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;After entry of the Interim DIP Financing Order and Final DIP Financing Order, as
applicable, the Obligations will constitute allowed administrative expense claims in the Bankruptcy
Cases having priority over all administrative expense claims and unsecured claims against the
Borrowers now existing or hereafter existing, of any kind whatsoever, to the extent provided and as
more fully set forth in the Interim DIP Financing Order and Final DIP Financing Order.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;Except as otherwise set forth herein, after the entry of the Interim DIP Financing Order
and Final DIP Financing Order, as applicable, the Obligations will be secured by valid and
perfected Liens on all of the Collateral and such Liens shall have the priorities set forth in the
Interim DIP Financing Order and Final DIP Financing Order and the other Credit Documents.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;Notwithstanding any failure on the part of the Lender to perfect, maintain, protect or
enforce any Liens and security interests in the Collateral granted pursuant to this Agreement, the
Interim DIP Financing Order and Final DIP Financing Order (when entered) shall automatically, and
without further action by any Person, perfect such Liens and security interests against the
Collateral.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(e)&nbsp;The Interim DIP Financing Order and Final DIP Financing Order (with respect to the period
on and after entry of the Final DIP Financing Order), as the case may be, are in full force and
effect and have not been reversed, stayed, modified, varied or amended without the consent of the
Lender.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(f)&nbsp;After the entry of the Interim DIP Financing Order (with respect to the period prior to
entry of the Final DIP Financing Order) or the Final DIP Financing Order (with respect to the
period on and after entry of the Final DIP Financing Order), notwithstanding the provisions of
section 362 of the Bankruptcy Code, upon the Maturity Date of any of the Obligations (whether by
acceleration or otherwise), the Lender shall be entitled to immediate payment of such Obligations
and to enforce the remedies provided for hereunder and under the other Credit Documents, without
further application to or order by the Bankruptcy Court, as more fully set forth in the Interim DIP
Financing Order and Final DIP Financing Order, as applicable.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;4.21 <U>Investment Banking and Finder&#146;s Fees</U>. Except for the fee paid to Raymond
James &#038; Associates, Inc., no Borrower has paid or agreed to pay, or reimburse any other party with
respect to, any investment banking or similar or related fee, underwriter&#146;s fee, finder&#146;s fee, or
broker&#146;s fee to any Person in connection with this Agreement.
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE V
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">AFFIRMATIVE COVENANTS
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As long as any of the Obligations or Commitments remain outstanding, the Borrowers agrees with
the Lender that:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.01 <U>Financial Statements</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Borrowers shall furnish, or cause to be furnished, to the Lender:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;<U>Audited Financial Statements</U>. As soon as available, but in any event within 75
days after the close of each fiscal year of PHH and its consolidated companies, audited
consolidated balance sheets of PHH and its consolidated companies as of the close of such fiscal
year, and audited consolidated statements of income and retained earnings and cash flows of PHH and
its consolidated companies for such fiscal year, together with (i)&nbsp;copies of the reports and
certificates relating thereto of independent certified public accountants of recognized standing
selected by PHH and reasonably satisfactory to the Lender; (ii)&nbsp;such accountants&#146; letter to
management relating to such financial statements; and (iii)&nbsp;a report of the Chief Executive Officer
or Chief Financial Officer of PHH containing management&#146;s discussion and analysis of PHH and its
consolidated companies&#146; financial condition, results of operations and affairs for such year.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;<U>Quarterly Financial Statements</U>. As soon as available, but in any event within
forty (40)&nbsp;days after the close of each of the first three fiscal quarters of PHH and its
consolidated companies, unaudited consolidated balance sheets of PHH and its consolidated companies
as of the close of each such fiscal quarter and unaudited consolidated statements of income,
retained earnings and cash flows of PHH and its consolidated companies for such quarter and, for
the second and third quarter only, for the period from the beginning of the fiscal year to the end
of each such quarter, each such balance sheet and statement of income and retained earnings and
changes in financial position to be certified by the Chief Executive Officer and Chief Financial
Officer of the Borrowers as fairly presenting in all material respects the financial condition and
results of operation of PHH and its consolidated companies; <I>provided </I>that any such certificate may
state that the accompanying balance sheet and statements are subject to normal year-end footnote
disclosures.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;<U>Borrowers-Prepared Monthly Financial Statements</U>. As soon as available but in any
event within ten Business Days after the close of each calendar month of each fiscal year of the
Borrowers, (a)&nbsp;unaudited consolidated balance sheets of the Borrowers, together with a current
report of Inventory (in form and substance reasonably acceptable to Agent), in each case, as of the
last day of such fiscal month; and (b)&nbsp;unaudited consolidated statements of income of the Borrowers
for such fiscal month and for the period from the beginning of the fiscal year to the end of such
fiscal month, each such balance sheet, report of Inventory and statement of income and changes in
financial position to be certified by the Chief Executive Officer and Chief Financial Officer of
the Borrowers as fairly presenting in all material respects the financial condition and results of
operation of the Borrowers; <I>provided </I>that any such certificate may state that the accompanying
balance sheet and statements are subject to normal quarter and year-end adjustments and normal
footnote disclosures.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;<U>Borrowers-Prepared Budgets and Reconciliations</U>.
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">An itemized budget for the Borrowers in form, scope and
substance satisfactory to, and approved by, the Lender in its sole discretion
(the &#147;<U>Projected Budget</U>&#148;), (A)&nbsp;initially for the 13-week period
immediately following the Closing Date (the &#147;<U>Initial Projected
Budget</U>&#148;), to be delivered at least five days prior to the Closing Date; and
(B)&nbsp;each week thereafter, on each Thursday (or, if such day is not a Business
Day, the immediately preceding Business Day) not later than 11:00&nbsp;A.M.
(Mountain Standard Time), a revised Projected Budget for the immediately
following 13-week period together with a certificate from the Chief
Financial Officer of the Borrowers explaining any variances from the Initial
Projected Budget.</DIV></TD>
</TR>

</TABLE>
</DIV><P align="center" style="font-size: 10pt">&nbsp;

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<DIV style="margin-top: 10pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">On each Thursday (or, if such day is not a Business Day, the
immediately preceding Business Day) not later than 11:00&nbsp;A.M. (Mountain
Standard Time) after the Closing Date, an itemized budget for the Borrowers
(which may include optional prepayments of the Loan), in the form attached
hereto as <U>Exhibit&nbsp;B</U>, and approved by, the Lender in its sole discretion
for the immediately following week (the &#147;<U>Weekly Budget</U>&#148;), specifying
therein (A)&nbsp;the amount of Collections requested for release to satisfy the
budgeted obligations of the Borrowers for such week; (B)&nbsp;the aggregate amount
of any proposed Borrowing in excess of such requested Collections, required to
satisfy the budgeted obligations of the Borrowers for such week; and (C)&nbsp;a
description in reasonable detail of the proposed use of proceeds of such
requested Collections and, if applicable, Borrowing, together with a
certificate from the Chief Financial Officer of the Borrowers explaining any
variances between the actual results from operations from the previous week and
the amounts set forth in the previously delivered Weekly Budget.</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">On each Thursday (or, if such day is not a Business Day, the
immediately preceding Business Day) not later than 11:00&nbsp;A.M. (Mountain
Standard Time) after the Closing Date, a report, in form and substance
satisfactory to the Lender in its sole discretion, delivered by the Borrowers
specifying therein, including reasonable detail, the aggregate Borrowers&#146;
reported aggregate new and used home retail Inventory at wholesale invoice plus
the PHH and Nationwide Homes, Inc. aggregate Accounts Receivable to independent
retailers, builders and developments, and the Borrowers&#146; retail (segment 03)
Accounts Receivable as of the end of the prior week, together with a
certificate from the Chief Financial Officer of the Borrowers explaining any
relevant changes in the level thereof.</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Within ten Business Days after each Performance Trigger Test
Date, a report, in form and substance satisfactory to the Lender in its sole
discretion, delivered by the Borrowers specifying therein, including reasonable
detail, the Borrowers&#146; aggregate Inventory value and aggregate Accounts
Receivable Value as of such Performance Trigger Test Date (each, a
&#147;<U>Performance Trigger Report</U>&#148;), together with a certificate from the
Chief Financial Officer of the Borrowers comparing the above&#150;reported amounts
as a percentage of the same amounts reported as of October&nbsp;29, 2010 and
explaining any relevant changes in the level thereof.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">All such financial statements and reports delivered pursuant to this <U>Section&nbsp;5.01</U>
shall be complete and correct in all material respects (subject, in the case of interim statements,
to normal year-end audit adjustments) and shall be prepared in reasonable detail and, in the case
of the
annual and quarterly financial statements provided in accordance with subsections (a)&nbsp;and (b)
above, in accordance with GAAP applied consistently throughout the periods reflected therein and
further accompanied by a description of, and an estimation of the effect on the financial
statements on account of, any change in the application of accounting principles.</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.02 <U>Certificates; Other Information</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Borrowers shall furnish, or cause to be furnished, to the Lender:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;<U>Officer&#146;s Compliance Certificate</U>. Concurrently with the delivery of the financial
statements referred to in <U>Section&nbsp;5.01(a)</U> and <U>Section&nbsp;5.01(b)</U> above, a certificate
of a Responsible Officer, substantially in the form of <U>Exhibit&nbsp;C</U>, stating that, to the best
of such Responsible Officer&#146;s Knowledge and belief, (i)&nbsp;the financial statements fairly present in
all material respects the financial condition of the parties covered by such financial statements;
(ii)&nbsp;during such period the Borrowers have observed or performed in all material respects the
covenants and other agreements hereunder and under the other Credit Documents relating to them, and
satisfied in all material respects the conditions contained in this Agreement to be observed,
performed or satisfied by them; and (iii)&nbsp;such Responsible Officer has obtained no Knowledge of any
Default or Event of Default except as specified in such certificate.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;<U>Accountants&#146; Reports</U>. Promptly upon receipt, a copy of any final (as
distinguished from a preliminary or discussion draft) &#147;management letter&#148; or other similar report
submitted by independent accountants or financial consultants to the Borrowers in connection with
any annual, interim or special audit or which refers in whole or in part to any inadequacy, defect,
problem, qualification or other lack of fully satisfactory accounting controls utilized by the
Borrowers.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;<U>Bankruptcy Court Matters</U>. Promptly, copies of all pleadings, motions,
applications and other documents filed by the Borrowers with the Bankruptcy Court or distributed by
the Borrowers to the office of the United States Trustee or to any Statutory Committee.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;<U>Other Information</U>. Promptly, such additional financial and other information as
the Lender may from time to time reasonably request.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.03 <U>Notices</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Borrowers shall give notice to the Lender of:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;<U>Defaults</U>. Immediately (and in any event within two days) after any applicable
officer has Knowledge of the occurrence of any Default or Event of Default.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;<U>Contractual Obligations</U>. Promptly (and in any event within five days) after any
applicable officer has Knowledge of the occurrence of any default or event of default under any
Contractual Obligation of the Borrowers which would reasonably be expected to have a Material
Adverse Effect.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;<U>Legal Proceedings</U>. Promptly (and in any event within five days) after any
applicable officer has Knowledge of any litigation, or any investigation or proceeding (including
any environmental proceeding), or any material development in respect thereof, affecting the
Borrowers which, if adversely determined, could result in liability in excess of $250,000.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;<U>ERISA</U>. Promptly (and in any event within ten days) after any applicable officer
has Knowledge or has reason to know of (i)&nbsp;any event or condition, including, but not limited to,
any Reportable Event, that constitutes, or might reasonably lead to, an ERISA Event; (ii)&nbsp;with
respect to any Multiemployer Plan, the receipt of notice as prescribed in ERISA or otherwise of any
withdrawal liability assessed against any of their ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the meaning of Title IV of
ERISA); (iii)&nbsp;the failure to make full payment on or before the due date (including extensions)
thereof of all amounts which the Borrowers or any ERISA Affiliate are required to contribute to
each Plan pursuant to its terms and as required to meet the minimum funding standard set forth in
ERISA and the Internal Revenue Code; or (iv)&nbsp;any change in the funding status of any Plan that
reasonably could be expected to have a Material Adverse Effect; together with a description of any
such event or condition or a copy of any such notice and a statement by the Chief Financial Officer
of the Borrowers briefly setting forth the details regarding such event, condition, or notice, and
the action, if any, which has been or is being taken or is proposed to be taken by the Borrowers
with respect thereto. Promptly upon request, the Borrowers shall furnish the Lender with such
additional information concerning any Plan as may be reasonably requested, including, but not
limited to, copies of each annual report/return (Form&nbsp;5500 series), as well as all schedules and
attachments thereto required to be filed with the Department of Labor and/or the Internal Revenue
Service pursuant to ERISA and the Internal Revenue Code, respectively, for each &#147;plan year&#148; (within
the meaning of section 3(39) of ERISA).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(e)&nbsp;<U>Other</U>. Promptly (and in any event within five days), any other development or
event of which any applicable officer has Knowledge and determines could reasonably be expected to
have a Material Adverse Effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Each notice pursuant to this subsection shall be accompanied by a statement of a Responsible
Officer setting forth details of the occurrence referred to therein and stating what action the
Borrowers propose to take with respect thereto.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.04 <U>Payment of Obligations</U>. Subject to the DIP Financing Orders and to the
Lender funding the Loan as required under this Agreement, the Borrowers shall pay, discharge or
otherwise satisfy, at or before maturity or before they become delinquent (subject, where
applicable, to specified grace periods), as the case may be, all postpetition obligations of the
Borrowers of whatever nature and any additional costs that are imposed as a result of any failure
to so pay, discharge or otherwise satisfy such obligations, except when the amount or validity of
such obligations and costs is currently being contested in good faith by appropriate proceedings
and reserves, if applicable, in conformity with GAAP with respect thereto have been provided on the
books of the Borrowers, as the case may be.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.05 <U>Conduct of Business and Maintenance of Existence</U>. Subject to the DIP
Financing Orders, the Borrowers shall (a)&nbsp;continue to engage, in Business of the same general type
as conducted on the Closing Date by the Borrowers and similar or related
businesses; (b)&nbsp;preserve, renew and keep in full force and effect its corporate or other legal
existence except as otherwise permitted by this Agreement; (c)&nbsp;take all reasonable action to
maintain all rights, privileges, licenses and franchises necessary or desirable in the normal
conduct of their Business except to the extent that failure to comply therewith would not, in the
aggregate, have a Material Adverse Effect and (d)&nbsp;comply with all post-petition Contractual
Obligations, its certificate of incorporation or by-laws (or other organizational or governing
documents) and all Laws applicable to it except to the extent that failure to comply therewith
would not, in the aggregate, have a Material Adverse Effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.06 <U>Maintenance of Property; Insurance</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;The Borrowers shall keep all of their material Property useful and necessary in their
Business in reasonably good working order and condition (ordinary wear and tear excepted) except to
the extent that failure to comply therewith would not, in the aggregate, have a Material Adverse
Effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;The Borrowers agree to maintain, at the levels and of the types set forth in <U>Schedule
5.06</U>, insurance policies then in effect or, with respect relevant workers&#146; compensation laws,
at the level required to comply with and maintain coverages required by relevant workers&#146;
compensation laws, provided, the Borrowers may continue to self insure or receive insurance through
a state fund where they currently do so or place Excess Employers Indemnity Insurance in the State
of Texas in lieu of a Workers&#146; Compensation Policy. The Borrowers shall assure that the insurance
policies required by this Section shall continue to be carried by insurance companies with a
general policyholder service rating of not less than &#147;B&#043;&#043;&#148; as rated in the most recent available
Best&#146;s Insurance Report. In the event that any such insurance company which provides a Borrower an
insurance policy or policies required by this Section is no longer financially responsible and
capable of fulfilling the requirements of such policies in the reasonable opinion of the Lender,
such Borrower shall use commercially reasonable efforts to replace such insurance company within 30
days of receipt of a written request of the Lender; <I>provided, however</I>, that the amount of coverage
required pursuant to this Section may be reduced or eliminated, with the written consent of the
Lender, if an insurance consultant or insurance broker retained by any Borrower provides a written
recommendation that, based upon its evaluation of the such Borrower&#146;s maximum foreseeable loss in
the event of a major conflagration, windstorm, explosion, riot, flood, or similar event, a
specified lesser amount is believed to be reasonable given the nature of the risks insured.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;With the exception of the Workers&#146; Compensation and Texas Excess Employers Indemnity
Insurance policies, all such policies shall name the applicable Borrower and the Lender as insured
parties, beneficiaries or loss payees as their interests may appear. Each policy shall be in such
form and contain such provisions as are generally considered standard for the type of insurance
involved and except for any workers&#146; compensation policy, shall contain a provision to the effect
that the insurer shall not cancel or substantially modify the policy provisions without first
giving thirty day advance written notice thereof to the applicable Borrower and the Lender (except
for non-payment of premium).
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;The Borrowers will give prompt written notice to the Lender of any loss or claim in excess
of $20,000 (regardless of whether it is covered by insurance), and the Lender may
make proof of loss if not made promptly by the applicable Borrower. Each insurance company is
hereby authorized and directed to make payment for such loss directly to the Lender instead of to
the applicable Borrower or to the applicable Borrower and the Lender jointly. Insurance proceeds
or any part thereof may be applied by the Lender, at its option, either to the reduction or payment
of the Obligations (without the premiums set forth in <U>Section&nbsp;2.06(c)</U>) or to the repair,
rebuilding and restoration of the Property lost, damaged or destroyed, but the Lender shall not be
obligated to ensure the proper application of any amount paid over to the applicable Borrower.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.07 <U>Inspection of Property; Books and Records; Discussions</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;Each Borrower shall keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all applicable Laws shall be made of all dealings and
transactions in relation to its businesses and activities;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;Each Borrower shall permit, during regular business hours and upon reasonable notice by
the Lender, the Lender, and its representatives, to visit and inspect any of its properties and
examine and make abstracts (including photocopies) from any of its books and records;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;Each Borrower shall permit the Lender to discuss the business, operations, properties and
financial and other condition of such Borrower (and, to the extent applicable, the other Borrowers)
with officers and employees of such Borrower and such Borrower&#146;s independent certified public
accountants (which shall be attended by a Responsible Officer if required by such independent
certified public accountants); and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;Each Borrower shall permit the Lender and its representatives to conduct audits from time
to time of the Inventory and receivables of such Borrower, subject to <U>Section&nbsp;9.05(a)</U>, at
the expense of such Borrower.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.08 <U>Environmental Laws</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;Each Borrower shall comply in all material respects with, and take reasonable actions to
ensure compliance in all material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all material respects with and maintain, and
take reasonable actions to ensure that all tenants and subtenants obtain and comply in all material
respects with and maintain, any and all licenses, approvals, notifications, registrations or
Permits required by applicable Environmental Laws; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;Each Borrower shall conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under Environmental Laws and promptly
comply in all material respects with all lawful orders and directives of all Governmental Bodies
regarding Environmental Laws except to the extent that the same are being contested in good faith
by appropriate proceedings and the failure to do or the pendency of such proceedings would not
reasonably be expected to have a Material Adverse Effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.09 <U>Application of Proceeds</U>. The Borrowers shall use the proceeds of the
Loan as provided in <U>Section&nbsp;4.12</U>.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.10 <U>Compliance with Budgets</U>. As of the end of each week, the aggregate
amount of actual disbursements for operating expenses (specifically excluding disbursements for
bankruptcy costs and adequate protection costs) by the Borrowers during the applicable week shall
not exceed the budgeted amounts for such week (as set forth in the related Weekly Budget) by more
than 10% on a weekly cumulative measured basis.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.11 <U>Compliance with Laws, Etc</U>. Governmental Authorities shall comply, in all
material respects with all Laws, licenses and franchises, including all Permits.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.12 <U>Payment of Taxes, Etc</U>. Each Borrower shall pay and discharge, and
provide Lender with proof of payment thereof, before the same shall become delinquent, all lawful
governmental claims, taxes, assessments, charges and levies, except where contested in good faith
by proper proceedings, if adequate reserves therefor have been established on the books of the
Borrowers in conformity with GAAP.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.13 <U>Collateral Documents</U>. Each Borrower, at its sole cost and expense, shall
take all actions necessary or reasonably requested by the Lender to maintain each Collateral
Document in full force and effect and enforceable in accordance with its terms, including (a)
making filings and recordations, (b)&nbsp;making payments of fees and other charges, (c)&nbsp;issuing, and if
necessary, filing or recording supplemental documentation, including continuation statements, (d)
discharging all claims or other Liens (other than Permitted Liens and Senior Liens) adversely
affecting the rights of the Lender in the Collateral, and (e)&nbsp;publishing or otherwise delivering
notice to third parties.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.14 <U>Accounts</U>. On the Closing Date, each Borrower shall provide notice to all
applicable parties (other than taxing authorities) of the revocation of all ACH debit access from
any account of such Borrower; it being understood that remittance of taxes be allowed from
accounts. From and after the Closing Date, each Borrower shall cause all Collections to be
deposited in the Control Account pursuant to <U>Section&nbsp;2.16</U>. Each Borrower hereby authorizes
the Lender to collect all payments, checks, drafts and other instruments received by any Borrower
and to withdraw and hold in reserve or release to the Borrowers funds from time to time credited to
the Control Account in accordance with <U>Section&nbsp;2.02</U> or <U>Section&nbsp;2.03</U>, as applicable.
Other than as permitted pursuant to an approved Weekly Budget, no Borrower shall make any
withdrawal from any account set forth on <U>Schedule&nbsp;4.16</U>, or direct any funds to be sent from
any account set forth on <U>Schedule&nbsp;4.16</U> (other than the Control Account) to any Person other
than the Control Account.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;5.15 <U>Bankruptcy Cases</U>. The Borrowers will use their best efforts to obtain
the approval of the Bankruptcy Court of this Agreement and the other Credit Documents. The
Borrowers shall immediately provide to the Lender copies of all Material Pleadings, notices,
orders, agreements, and all other documents served, filed or entered, as the case may be, in
connection with, or in relation to, the Bankruptcy Cases, including any documents provided by or to
the U.S. Trustee or any Statutory Committee.
</DIV>
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<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE VI
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">NEGATIVE COVENANTS
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As long as any of the Obligations or Commitments remain outstanding, each of Borrowers hereby
agrees with the Lender that:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.01 <U>Indebtedness</U>. No Borrower shall contract, create, incur, assume or
permit to exist, any Indebtedness, except (a)&nbsp;Indebtedness arising or existing under this Agreement
and the other Credit Documents, and (b)&nbsp;Indebtedness existing on the Petition Date and set forth on
<U>Schedule&nbsp;6.01</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.02 <U>Liens</U>. No Borrower shall contract, create, incur, assume or permit to
exist, any Lien with respect to any of its property or assets of any kind (whether real or
personal, tangible or intangible), whether now owned or hereafter acquired, except for Permitted
Liens and Senior Liens.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.03 <U>No Further Negative Pledges</U>. Except with respect to prohibitions against
other encumbrances on specific Property encumbered to secure payment of particular Indebtedness
(which Indebtedness relates solely to such specific Property, and improvements and accretions
thereto, and is otherwise permitted hereby), no Borrower shall enter into, assume or become subject
to any agreement prohibiting or otherwise restricting the creation or assumption of any Lien upon
its properties or assets, whether now owned or hereafter acquired, or requiring the grant of any
security for such obligation if security is given for some other obligation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.04 <U>Consolidation, Merger, Asset Sale, etc</U>. Except as contemplated by the
sale of the Borrowers or substantially all of their Property in a sale pursuant to section 363 of
the Bankruptcy Code:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;No Borrower shall enter into, or cause or permit any of its direct or indirect
Subsidiaries to enter into, a transaction of merger or consolidation (including the sale of any
Equity Interests or substantially all of the assets of such Borrower or Subsidiary), liquidation,
winding-up or dissolution, whether voluntarily or involuntarily (or suffer to permit any such
liquidation or dissolution), other than in as permitted under this Agreement; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;No Borrower shall, without the prior written consent of the Lender (which shall not be
unreasonably withheld or delayed) consummate any Asset Sale; <I>provided </I>that any Asset Sale to which
the Lender consents shall provide that at least 75% of the consideration in connection therewith
shall be cash (and such payment shall be contemporaneous with consummation of such Asset Sale).
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.05 <U>Sale Leasebacks</U>. Except as set forth in <U>Schedule&nbsp;6.05</U>, no
Borrower shall directly or indirectly, become or remain liable as lessee or as guarantor or other
surety with respect to any lease, whether an Operating Lease or a Capital Lease, of any Property,
whether now owned or hereafter acquired, (a)&nbsp;which such Person has sold or transferred or is to
sell or transfer to any other Person other than the Borrowers; or (b)&nbsp;which such Person intends to
use for substantially the same purpose as any other Property which has been sold or is to be sold
or transferred by such Person to any other Person in connection with such lease.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.06 <U>Acquisitions</U>. No Borrower shall make any Acquisition.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.07 <U>Investments</U>. No Borrower shall make any Investment in any Person except
for Permitted Investments.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.08 <U>Restricted Payments</U>. No Borrower shall make nor permit any Restricted
Payments, except for transfers, including capital contributions, from a Borrower to another
Borrower.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.09 <U>No Transfers to Affiliates</U>. Except as set forth in <U>Schedule
6.09</U>, no assets of any Borrower may be transferred to any Affiliate of the Borrowers absent the
consent of the Lender, except for transfers permitted pursuant <U>Section&nbsp;6.08</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.10 <U>Limitations on Transactions with Affiliates</U>. No Borrower shall enter
into or permit to exist any transaction or series of transactions with any officer, director or
Affiliate of such Person other than (a)&nbsp;intercompany transactions expressly permitted by
<U>Section&nbsp;6.08</U>; (b)&nbsp;normal compensation and reimbursement of expenses of officers and
directors (including any retention arrangements approved by the Lender); and (c)&nbsp;except as
otherwise specifically limited in this Agreement, other transactions which are entered into in the
ordinary course of such Person&#146;s business on terms and conditions substantially as favorable to
such Person as would be obtainable by it in a comparable arm&#146;s length transaction with a Person
other than an officer, director or Affiliate.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.11 <U>Payment of Other Indebtedness</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;No Borrower shall pay any Indebtedness arising prior to the Petition Date except as
permitted by this Agreement and as approved by the Bankruptcy Court.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;No Borrower shall voluntarily prepay any Indebtedness other than in the ordinary course of
business and provided that no Event of Default has occurred and is continuing, except the
Obligations in accordance with the terms of this Agreement.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.12 <U>Modification of Contractual Obligations</U>. No Borrower shall alter, amend,
modify, rescind, terminate or waive any of its rights or obligations under, or fail to comply in
all material respects with, any of its material Contractual Obligations; <I>provided, however</I>, that in
the event of any breach or event of default by a Person other than the Borrowers, the Borrowers
shall promptly notify the Lender of any such breach or event of default and take all such action as
may be reasonably necessary in order to avoid having such breach or event of default have a
Material Adverse Effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.13 <U>Bankruptcy Matters</U>. Except as expressly permitted by this Agreement, no
Borrower shall incur, create, assume, suffer or permit to exist, or apply to the Bankruptcy Court
for authority to incur, create, assume, suffer or permit to exist, any claim or Lien against the
Borrowers or the Collateral to be <I>pari passu </I>with or senior to the claims and Liens of the Lender
against the Borrowers and the Collateral.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.14 <U>No Material Pleadings</U>. No Borrower shall file, nor shall it consent to
the filing by any other Person of, any Material Pleading in the Bankruptcy Cases without the prior
written consent of the Lender.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.15 <U>Fiscal Year</U>. No Borrower shall change its fiscal year from its current
fiscal year end.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;6.16 <U>Accounting Changes</U>. No Borrower shall make any change in accounting
treatment and reporting practices or tax reporting treatment, except as required by GAAP or
applicable Law and disclosed to the Lender.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE VII
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">EVENTS OF DEFAULT
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;7.01 <U>Events of Default</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">An Event of Default shall exist upon the occurrence of any of the following specified events
(each an &#147;<U>Event of Default</U>&#148;):
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;<U>Payment</U>. Any Borrower shall:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">default in payment when due of any principal or interest of the
Loan; or</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">default, and such default shall continue for three or more
Business Days, in payment when due of any fees or other amounts owing under
this Agreement or any other Credit Documents or otherwise in connection
herewith or therewith; or</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;<U>Representations</U>. Any representation, warranty or statement made or deemed to be
made herein, in any of the other Credit Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue in any material respect on
the date as of which it was made or deemed to have been made (other than those which are untrue
solely as a result of changes permitted by this Agreement); or
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;<U>Covenants</U>. Any Borrower shall:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Default in the due performance or observance of any term,
covenant or agreement contained in ARTICLE V or ARTICLE VI; or</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in subsections (a), (b)&nbsp;or
(c)(i) of this <U>Section&nbsp;7.01</U>) contained in this Agreement and such
default shall continue unremedied for a period of at least 30&nbsp;days after the
earlier of a Responsible Officer becoming aware of such default or notice
thereof by the Lender; or</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;<U>Other Credit Documents</U>. (i)&nbsp;Any Borrower shall default in the due performance or
observance of any material term, covenant or agreement in any of the other Credit Documents
(subject to applicable grace or cure periods, if any), or (ii)&nbsp;any Credit Document shall fail to be
(or any Borrower shall claim or allege in writing that any Credit Document is not) in full force
and effect or to give the Lender any material part of the Liens, rights, powers and privileges
purported to be created thereby; or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(e)&nbsp;<U>Defaults under Other Agreements</U>. With respect to any Indebtedness arising after
the Petition Date (other than Indebtedness outstanding under this Agreement) of any Borrower, (i)
the occurrence of any default after the Petition Date in any payment (beyond the applicable grace
period with respect thereto, if any) with respect to any such Indebtedness; (ii)&nbsp;the occurrence
after the Petition Date and continuation of a default in the observance or performance relating to
such Indebtedness or contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event or condition shall occur or condition exist, the effect of which
default or other event or condition is to cause, or permit, the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders) to cause (determined without regard to
whether any notice or lapse of time is required), any such Indebtedness to become due prior to its
stated maturity; or (iii)&nbsp;any such Indebtedness shall be declared due and payable, or required to
be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity
thereof; or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(f)&nbsp;<U>Judgments</U>. Any Borrower shall fail within 30&nbsp;days of the date due and payable to
pay, bond or otherwise discharge any judgment, settlement or order for the payment of money
relating to claims arising after the Petition Date which judgment, settlement or order, when
aggregated with all other such judgments, settlements or orders due and unpaid at such time, is not
covered by insurance and exceeds $500,000, and which is not stayed on appeal (or for which no
motion for stay is pending) or is not otherwise being executed; or
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(g)&nbsp;<U>ERISA</U>. Any of the following events or conditions, if such event or condition
could reasonably be expected to have a Material Adverse Effect: (i)&nbsp;any &#147;accumulated funding
deficiency,&#148; as such term is defined in section 302 of ERISA and section 412 of the Internal
Revenue Code, whether or not waived, shall exist with respect to any Plan, or any Lien shall arise
on the assets of the Borrowers or any ERISA Affiliate in favor of the PBGC or a Plan; (ii)&nbsp;an ERISA
Event shall occur with respect to a Single Employer Plan, which is, in the reasonable opinion of
the Lender, likely to result in the termination of such Plan for purposes of Title IV of
ERISA; (iii)&nbsp;an ERISA Event shall occur with respect to a Multiemployer Plan or Multiple
Employer Plan, which is, in the reasonable opinion of the Lender, likely to result in (A)&nbsp;the
termination of such Plan for purposes of Title IV of ERISA, or (B)&nbsp;the Borrowers or any ERISA
Affiliate incurring any liability in connection with a withdrawal from, reorganization of (within
the meaning of section 4241 of ERISA), or insolvency of (within the meaning of section 4245 of
ERISA) such Plan; or (iv)&nbsp;any prohibited transaction (within the meaning of section 406 of ERISA or
section 4975 of the Internal Revenue Code) or breach of fiduciary responsibility shall occur which
may subject the Borrowers or any ERISA Affiliate to any liability under sections 406, 409, 502(i),
or 502(l) of ERISA or section 4975 of the Internal Revenue Code, or under any agreement or other
instrument pursuant to which the Borrowers or any ERISA Affiliate has agreed or is required to
indemnify any Person against any such liability; or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(h)&nbsp;<U>Ownership</U>. There shall occur a Change of Control; or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(i)&nbsp;<U>Failure to File Sale Motion. </U> Unless otherwise agreed by Lender, (A)&nbsp;failure by
any Borrower to have filed with the Bankruptcy Court by the date which is three Business Days after
the date of this Agreement a motion for authority to sell substantially all of the assets of the
Borrowers pursuant to section 363 of the Bankruptcy Code (the &#147;<U>Sale Motion</U>&#148;) on terms and
conditions acceptable to the Lender; (B)&nbsp;the entry of any order of the Bankruptcy Court approving a
Sale Motion on terms which are not acceptable to the Lender; or (C)&nbsp;failure of the sale pursuant to
such Sale Motion to have been closed on terms acceptable to the Lender by the earlier of the date
which is 60&nbsp;days after the Bankruptcy Court&#146;s entry of the Bid Procedures Order or 135&nbsp;days after
the Petition Date; or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(j)&nbsp;<U>Prepayment of Other Indebtedness</U>. After the Petition Date, any Borrower shall pay
any Indebtedness arising before the Petition Date other than (i)&nbsp;pursuant to the Critical Vendor
Motion and any order thereon; and (ii)&nbsp;in accordance with the terms hereof as permitted by orders
of the Bankruptcy Court reasonably satisfactory in form and substance to the Lender; or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(k)&nbsp;<U>Bankruptcy Cases</U>. The Bankruptcy Cases shall be dismissed or converted to one or
more cases under chapter 7 of the Bankruptcy Code; a trustee under chapter 7 or chapter 11 of the
Bankruptcy Code shall be appointed in the Bankruptcy Cases, unless the appointment of such trustee
is sought by the Lender; or the Borrowers shall file or support any application for the approval
of, or there shall arise, any other claim which is an administrative expense claim having priority
over any or all administrative expenses of the kind specified in sections 503(b) or 507(b) of the
Bankruptcy Code; or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(l)&nbsp;<U>Relief to Lien Holders</U>. The Bankruptcy Court shall enter an order granting relief
from the automatic stay applicable under section 362 of the Bankruptcy Code permitting foreclosure
on any asset of the Borrowers; or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(m)&nbsp;<U>First Day Orders</U>. The Borrowers shall fail to obtain all First Day Orders of the
Bankruptcy Court within three Business Days after execution of this Agreement; or
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(n)&nbsp;<U>DIP Financing Orders</U>. The Bankruptcy Court shall enter an order amending,
supplementing, staying for a period in excess of five days, vacating or otherwise modifying the
Interim DIP Financing Order or the Final DIP Financing Order which is not consented to by the
Lender; or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(o)&nbsp;<U>DIP Financing Final Order</U>. The Final DIP Financing Order, in a form satisfactory
to the Lender and containing the provisions outlined in <U>Section&nbsp;3.01(e)</U> and the form of
order attached as <U>Exhibit&nbsp;E</U>, shall not have been entered by the Bankruptcy Court on or
before the expiration of the Interim Period.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;7.02 <U>Acceleration; Remedies</U>. Upon the occurrence and during the continuation
of an Event of Default, without further order of, application to, or action by the Bankruptcy
Court, the Lender (a)&nbsp;may, by written notice to the Borrowers declare that all or any portion of
the Commitments be terminated, whereupon the obligation of the Lender to fund any future Borrowing
shall immediately terminate; and/or (b)&nbsp;may, by written notice to the Borrowers declare the Loan,
all interest thereon and all other amounts and Obligations payable under this Agreement to be
forthwith due and payable, whereupon the Loan, all such interest, and all such amounts and
Obligations shall become and be forthwith due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrowers. In addition, subject
solely to any requirement of the giving of notice by the terms of the Interim DIP Financing Order
or the Final DIP Financing Order, the automatic stay provided in section 362 of the Bankruptcy Code
shall be automatically vacated without further action or order of the Bankruptcy Court, and the
Lender shall be entitled to exercise all of its rights and remedies under the Credit Documents and
applicable Law, including all rights and remedies with respect to the Collateral.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE VIII
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ADDITIONAL SECURITY
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;8.01 <U>Priority and Liens</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;As to all Real Properties, the Borrowers hereby assign and convey as security, grant a
security interest in, hypothecate, mortgage, pledge and set over unto the Lender all of the right,
title and interest of the Borrowers in all Owned Real Property and in all Real Property Leases,
together in each case with all of the right, title and interest of the Borrowers in and to all
buildings, improvements, and fixtures related thereto, any lease or sublease thereof, all general
intangibles relating thereto and all proceeds thereof, such assignment, conveyance and security
interest to have the priorities set forth in <U>Section&nbsp;2.13</U> above. Nothing herein to the
contrary shall restrict the Lender, on or after the date hereof, from filing a first deed of trust,
leasehold deed of trust, first mortgage or comparable security document with respect to any of the
Owned Real Property and Leased Real Property to the extent not included in the Initially Secured
Owned Real Properties.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;The Borrowers acknowledge that, pursuant to the DIP Financing Orders, the Liens in favor
of the Lender in all of such Owned Real Property and Real Property Leases, and all of the other
Collateral, shall be perfected without the taking of any further action, including any recordation
of any instruments of mortgage or assignment, or the recording or filing of any financing
statements, notices of Lien or other similar instruments.
</DIV>
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<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE IX
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">MISCELLANEOUS
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.01 <U>Notices</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Any notice or other communication required or permitted hereunder shall be in writing and
shall be deemed to have been duly given (a)&nbsp;on the day of delivery if delivered in person; (b)&nbsp;on
the day of delivery if delivered by facsimile upon confirmation of receipt (<U>provided</U> that
if delivery is completed after the close of business, then the next Business Day); (c)&nbsp;on the first
Business Day following the date of dispatch if delivered using a next-day service by a nationally
recognized express courier service; or (d)&nbsp;on the earlier of confirmed receipt or the fifth
Business Day following the date of mailing if delivered by registered or certified mail, return
receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below,
or pursuant to such other instructions as may be designated by notice given in accordance with this
<U>Section&nbsp;9.01</U> by the party to receive such notice:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">if to the Borrowers:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 16%">c/o Palm Harbor Homes, Inc.<BR>
15303 Dallas Parkway, Suite&nbsp;800<BR>
Addison, Texas 75001-4600<BR>
Attention: Larry H. Keener, Chairman, President &#038; CEO<BR>
Facsimile: (972)&nbsp;764-9020
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">with a copy (which does not constitute notice) to:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 16%">Locke Lord Bissell &#038; Liddell LLP<BR>
2200 Ross Avenue, Suite&nbsp;2200<BR>
Dallas, Texas 75201<BR>
Attention: Gina Betts<BR>
Facsimile: (214)&nbsp;756-8515
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">If to the Lender:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 16%">Fleetwood Homes, Inc.<BR>
c/o Cavco Industries, Inc.<BR>
1001 North Central Avenue, Suite&nbsp;800<BR>
Phoenix, Arizona 85004-1935<BR>
Attention: James P. Glew, General Counsel<BR>
Facsimile: (602)&nbsp;256-6189
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 16%">and:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 16%">Robert F. Jordan<BR>
Third Avenue Management, LLC<BR>
622 Third Avenue<BR>
32<SUP style="font-size: 85%; vertical-align: text-top">nd</SUP> Floor<BR>
New York, NY 10017<BR>
Facsimile: (212)&nbsp;735-0003
</DIV>

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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">with a copy (which does not constitute notice) to:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 16%">Garth D. Stevens, Esq.<BR>
Snell &#038; Wilmer L.L.P.<BR>
One Arizona Center<BR>
400 East Van Buren<BR>
Phoenix, Arizona 85018
<BR>
Facsimile: (602)&nbsp;382-6070
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.02 <U>Right of Set-Off</U>. In addition to any rights now or hereafter granted
under applicable Law or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default, the Lender is authorized at any time and from time to time,
without presentment, demand, protest or other notice of any kind (all of which rights being hereby
expressly waived), to set-off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by the Lender to or for the credit or
the account of the Borrowers against obligations and liabilities of such Person to the Lender
hereunder, under the Note, the other Credit Documents or otherwise, irrespective of whether the
Lender shall have made any demand hereunder and although such obligations, liabilities or claims,
or any of them, may be contingent or unmatured, and any such set-off shall be deemed to have been
made immediately upon the occurrence of an Event of Default even though such charge is made or
entered on the books of the Lender subsequent thereto. Any Person purchasing a participation in
the Loan and Commitments hereunder pursuant to <U>Section&nbsp;9.03(c)</U> may exercise all rights of
set-off with respect to its participation interest as fully as if such Person were the Lender
hereunder.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.03 <U>Benefit of Agreement</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;<U>Generally</U>. This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the respective successors and assigns of the parties hereto; <I>provided </I>that,
except as expressly provided herein, the Borrowers may not assign or transfer any of their
interests without prior written consent of the Lender; <I>provided</I>, <I>further</I>, that the rights of the
Lender to transfer, assign or grant participations in its rights and/or obligations hereunder shall
be limited as set forth in this <U>Section&nbsp;9.03</U><I>, provided however </I>that nothing herein shall
prevent or prohibit the Lender from (i)&nbsp;pledging its Loan hereunder to a Federal Reserve Bank in
support of borrowings made by the Lender from such Federal Reserve Bank; or (ii)&nbsp;granting
assignments or selling participations in the Lender&#146;s Loan and/or Commitments hereunder to its
parent company and/or to any Affiliate or Subsidiary of the Lender.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;<U>Assignments</U>. The Lender may assign all or a portion of its rights and obligations
hereunder (including its Obligations and Commitments) to any other Person. The assigning Lender
will give prompt notice to the Borrowers of any such assignment. Upon the effectiveness of any
such assignment, the assignee shall become a &#147;Lender&#148; for all purposes of this Agreement and the
other Credit Documents and, to the extent of such assignment, the assigning Lender shall be
relieved of its obligations hereunder to the extent of the Loan and Commitments components
being assigned. Each of the Borrowers agrees that upon notice of any such assignment and
surrender of the Note, it will promptly provide to the assigning Lender and to the assignee
separate promissory notes in the amount of their respective interests substantially in the form of
the original Note.</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;<U>Participations</U>. The Lender may sell, transfer, grant or assign participations in
all or a portion of the Lender&#146;s rights, obligations or rights and obligations hereunder (including
all or a portion of its Commitments or its Loan); <I>provided </I>that (i)&nbsp;the Lender shall remain a
&#147;Lender&#148; for all purposes under this Agreement (the Lender&#146;s obligations under the Credit Documents
remaining unchanged) and the participant shall not constitute a Lender hereunder; (ii)&nbsp;no such
participant shall have, or be granted, rights to approve any amendment or waiver relating to this
Agreement or the other Credit Documents except to the extent any such amendment or waiver would (A)
reduce the principal of or rate of interest on or fees in respect of the Loan in which the
participant is participating or (B)&nbsp;postpone the date fixed for any payment of principal (including
extension of the Maturity Date or the date of any mandatory prepayment), interest or fees in which
the participant is participating; and (iii)&nbsp;sub-participations by the participant (except to an
affiliate, parent company or affiliate of a parent company of the participant) shall be prohibited.
In the case of any such participation, the participant shall not have any rights under this
Agreement or the other Credit Documents (the participant&#146;s rights against the Lender in respect of
such participation to be those set forth in the participation agreement with the Lender creating
such participation) and all amounts payable by the Borrowers hereunder shall be determined as if
the Lender had not sold such participation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.04 <U>No Waiver; Remedies Cumulative</U>. No failure or delay on the part of the
Lender in exercising any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Lender and the Borrowers shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise of any other right,
power or privilege hereunder or thereunder. The rights and remedies provided herein are cumulative
and not exclusive of any rights or remedies which the Lender would otherwise have. No notice to or
demand on the Borrowers in any case shall entitle the Borrowers to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of the Lender to any
other or further action in any circumstances without notice or demand.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.05 <U>Payment of Expenses; Indemnification</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;Each of the Borrowers agrees, jointly and severally, to: (i)&nbsp;pay all reasonable
out-of-pocket costs and expenses of the Lender in connection with (A)&nbsp;the conduct of due diligence
including the costs of the Lender for obtaining surveys, environmental assessments and title
searches; (B)&nbsp;the negotiation, preparation, execution and delivery and administration of this
Agreement and the other Credit Documents and the documents and instruments referred to therein
(including the reasonable fees and expenses of counsel of the Lender), up to a maximum of $350,000
in the aggregate; <I>provided </I>that such limitation shall not include any amounts paid or payable by
Borrowers in respect of required title insurance policies; (C)&nbsp;any amendment, waiver or consent
relating hereto and thereto including, but not limited to, any such amendments, waivers or consents
resulting from or related to any work-out, renegotiation or
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">restructure relating to the performance by the Borrowers under this Agreement; and (D)&nbsp;enforcement of the
Credit Documents and the documents and instruments referred to therein (including in connection
with any such enforcement, the reasonable fees and disbursements of counsel for the Lender); (ii)
permit the Lender to perform monthly Inventory and Accounts Receivable field audits at the
Borrowers&#146; expense; <I>provided </I>that the Lender shall not be precluded by application of this clause
from conducting additional audits at its own expense; and (iii)&nbsp;pay and hold the Lender harmless
from and against any and all present and future stamp and other similar taxes with respect to the
foregoing matters and save the Lender harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent attributable to the
Lender) to pay such taxes.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;Each of the Borrowers, jointly and severally, shall indemnify the Lender and its officers,
directors, employees, representatives and agents from and hold each of them harmless against any
and all losses, liabilities, claims, damages or expenses incurred by any of them as a result of, or
arising out of, or in any way related to, or by reason of (A)&nbsp;any investigation, litigation or
other proceeding (whether or not the Lender is a party thereto) related to the entering into and/or
performance of any Credit Document, including the management and application of funds deposited in
the Control Account or the use of proceeds of the Loan or the consummation of any other
transactions contemplated in any Credit Document, including the reasonable fees and disbursements
of counsel incurred in connection with any such investigation, litigation or other proceeding; or
(B)&nbsp;the presence or Release of any Hazardous Materials at, under or from any Property owned,
operated or leased by the Borrowers or any of its Subsidiaries, or the failure by the Borrowers or
any of its Subsidiaries to comply with any Environmental Law (but excluding, in the case of either
of clause (A)&nbsp;or (B)&nbsp;above, any such losses, liabilities, claims, damages or expenses to the extent
incurred by reason of gross negligence or willful misconduct on the part of the Person to be
indemnified).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.06 <U>Amendments, Waivers and Consents</U>. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Borrowers therefrom shall in any
event be effective unless the same shall be in writing and signed by the Lender, and then any such
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which given.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.07 <U>Survival</U>. All indemnities set forth herein shall survive the execution
and delivery of this Agreement, the making of the Loan, the repayment of the Loan and other
obligations under the Credit Documents and the termination of the Commitments hereunder, and all
representations and warranties made by the Borrowers herein shall survive delivery of the Note and
the making of the Loan hereunder.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.08 <U>Waiver</U>. Each party hereto may (a)&nbsp;extend the time for the performance of
any of the obligations or other acts of the other party hereto; (b)&nbsp;waive any inaccuracies in the
representations and warranties of the other party contained herein or in any document delivered
pursuant hereto; (c)&nbsp;waive compliance with any of the agreements of the other party contained
herein; or (d)&nbsp;waive satisfaction of any condition to its obligations hereunder. Any such
extension or waiver shall be valid only if set forth in an instrument in writing signed by the
party to be bound thereby. No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party of any such right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege. All remedies, rights, undertakings,
obligations, and agreements contained herein shall be cumulative and not mutually exclusive.
</div>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->52<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.09 <U>Governing Law</U>. This Agreement and all claims with respect thereto shall
be governed by and construed in accordance with the federal bankruptcy law, to the extent
applicable, and, where state law is implicated, the laws of the State of Delaware without regard to
any conflict of laws rules thereof that might indicate the application of the laws of any other
jurisdiction.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.10 <U>Consent to Jurisdiction; Service of Process; Waiver of Jury Trial</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;The parties hereto irrevocably and unconditionally consent to submit to the jurisdiction
of the Bankruptcy Court for any litigation arising out of or relating to this Agreement and the
transactions contemplated hereby (and agree not to commence any litigation relating hereto except
in the Bankruptcy Court).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;Any and all service of process and any other notice in any such claim shall be effective
against any party if given personally or by registered or certified mail, return receipt requested,
or by any other means of mail that requires a signed receipt, postage prepaid, mailed to such party
as herein provided. Nothing herein contained shall be deemed to affect the right of any party to
serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed
against any other party in any other jurisdiction.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;If any claim is brought by any party hereto to enforce its rights or another party&#146;s
obligations under this Agreement or any other agreement, document or instrument to be delivered by
such party on the Closing Date in connection herewith, the substantially prevailing party in such
claim shall be entitled to recover its reasonable attorneys&#146; fees and expenses and other costs
incurred in such claim, in addition to any other relief to which it may be entitled.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.11 <U>Binding Effect; Assignment</U>. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns. This Agreement is
not assignable by any party without the prior written consent of the other party, except that the
Lender may assign this Agreement, in whole or in part, without the consent of Borrowers to a
successor or successors under a plan or plans of reorganization confirmed by the Bankruptcy Court.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.12 <U>Interpretation; Headings</U>. All pronouns and any variations thereof refer
to the masculine, feminine or neuter, singular or plural, as the context may require. All terms
defined in this Agreement in their singular or plural forms have correlative meanings when used
herein in their plural or singular forms, respectively. The term &#147;Lender&#148; includes (i)&nbsp;any of the
Lender&#146;s successor(s); and (ii)&nbsp;any assignee of the Lender who becomes a party hereto
pursuant to <U>Section&nbsp;9.03</U>. Unless otherwise expressly provided, the words &#147;include,&#148;
&#147;includes&#148; and &#147;including&#148; do not limit the preceding words or terms and shall be deemed to be
followed by the words &#147;without limitation.&#148; All references herein to &#147;Sections&#148; shall be deemed
references to such parts of this Agreement, unless the context shall otherwise require. All
references herein to &#147;Schedules&#148; and &#147;Exhibits&#148; shall mean the Schedules and Exhibits attached to
this Agreement and forming a part hereof. The words &#147;herein,&#148; &#147;hereof&#148; and &#147;hereunder&#148; and other
words of similar import refer to this Agreement as a whole, and not to any particular Article,
Section, subsection or clause in this Agreement. The Section headings in this Agreement are for
reference only and shall not affect the interpretation of this Agreement. The parties acknowledge
and agree that (a)&nbsp;each party and its counsel reviewed and negotiated the terms and provisions of
this Agreement and have contributed to its revision; (b)&nbsp;the rule of construction to the effect
that any ambiguities are resolved against the drafting party shall not be employed in the
interpretation of this Agreement; and (c)&nbsp;the terms and provisions of this Agreement shall be
construed fairly as to all parties, regardless of which party was generally responsible for the
preparation of this Agreement. Dates and times set forth in this Agreement for the performance of
the parties&#146; respective obligations hereunder or for the exercise of their rights hereunder shall
be strictly construed, time being of the essence of this Agreement. If the date specified or
computed under this Agreement for the performance, delivery, completion or observance of a
covenant, agreement, obligation or notice by any party, or for the occurrence of any event provided
for herein, is a day other than a Business Day, then the date for such performance, delivery,
completion, observance or occurrence shall automatically be extended to the next Business Day
following such date. Any definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other document as from time
to time amended, supplemented or otherwise modified.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.13 <U>Severability of Provisions</U>. If any provision or any portion of any
provision of this Agreement shall be held invalid or unenforceable, the remaining portion of such
provision and the remaining provisions of this Agreement shall not be affected thereby. If the
application of any provision or any portion of any provision of this Agreement to any Person or
circumstance shall be held invalid or unenforceable, the application of such provision or portion
of such provision to Persons or circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.14 <U>Counterparts</U>. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an original, but all
such counterparts together shall constitute one and the same instrument. Each counterpart may
consist of a number of copies hereof each signed by less than all, but together signed by all, of
the parties hereto.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.15 <U>No Third Party Beneficiaries</U>. Except as otherwise set forth in this
Agreement, no provision of this Agreement is intended to, or shall, confer any third party
beneficiary or other rights or remedies upon any Person other than the parties hereto.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->54<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.16 <U>Confidentiality</U>. Each of the Borrowers and the Lender agrees to keep
confidential (and to cause its affiliates, officers, directors, employees, agents and
representatives to keep confidential) all written information, materials and documents furnished to
the Lender by or on behalf of the Borrower (whether before or after the Closing Date) which
relates to the Borrower (the &#147;<U>Information</U>&#148;). Notwithstanding the foregoing, the
parties hereto shall be permitted to disclose Information (a)&nbsp;to its affiliates, officers,
directors, employees, agents and representatives in connection with its participation in any of the
transactions evidenced by this Agreement or any other Credit Documents or the administration of
this Agreement or any other Credit Documents, subject to the provisions of this <U>Section
9.16</U>; (b)&nbsp;to the extent required by applicable Laws and regulations or by any subpoena or
similar legal process, or requested by any Governmental Body; (c)&nbsp;to the extent such Information
(i)&nbsp;becomes publicly available other than as a result of a breach of this Agreement or any
agreement entered into pursuant to clause (d)&nbsp;below, (ii)&nbsp;becomes available to the Lender on a
non-confidential basis from a source other than the Borrower or (iii)&nbsp;was available to the Lender
on a non-confidential basis prior to its disclosure to the Lender by the Borrower; (d)&nbsp;to any
assignee or participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first specifically agrees in a writing
furnished to and for the benefit of the Borrower to be bound by the terms of this <U>Section
9.16</U>; or (e)&nbsp;to the extent that the Borrower shall have consented in writing to such
disclosure. Nothing set forth in this <U>Section&nbsp;9.16</U> shall obligate the Lender to return any
materials furnished by the Borrower.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Section&nbsp;9.17 <U>Conflict</U>. To the extent that there is a conflict or inconsistency
between any provision hereof, on the one hand, and any provision of any Credit Document, on the
other hand, this Agreement shall control.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">&#091;SIGNATURE PAGES FOLLOW&#093;
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->55<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to
be duly executed and delivered as of the date first above written.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Palm Harbor Homes, Inc.</B>, a Florida corporation,
as a Borrower<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">             /s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President and CEO&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Palm Harbor GenPar, LLC</B>, a Nevada limited liability company,
as a Borrower<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Palm Harbor Mfg., L.P.</B>, a Texas limited partnership, as a
Borrower<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Palm Harbor Real Estate, LLC</B>, a Texas limited liability
company, as a Borrower<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President of Sole Member&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Nationwide Homes, Inc.</B>, a Delaware corporation, as a Borrower<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Chairman&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">&#91;SIGNATURE PAGE TO CREDIT AGREEMENT&#93;
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Palm Harbor Albemarie, LLC</B>, a Delaware corporation, as a
Borrower<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Fleetwood Homes, Inc.</B>, a Delaware corporation, as Lender<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Joseph H. Stegmayer
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Joseph H. Stegmayer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Vice President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">&#91;SIGNATURE PAGE TO CREDIT AGREEMENT&#93;
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
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<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>c09057exv10w2.htm
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
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<TITLE>Exhibit 10.2</TITLE>
</HEAD>
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<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><B>Exhibit&nbsp;10.2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">SECURITY AGREEMENT
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">Dated as of November&nbsp;29, 2010<BR><BR>
among
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">PALM HARBOR HOMES, INC.,<BR>
AND<BR>
THE OTHER GRANTORS NAMED HEREIN,
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">each as a Grantor
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">and, collectively,<BR>
as the Grantors
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">and
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">FLEETWOOD HOMES, INC.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">as Secured Party
</DIV>


<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">




</TABLE>
</DIV><P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>TABLE OF CONTENTS<BR>
(continued)</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

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<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE I DEFINITIONS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;1.01 Definitions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;1.02 Certain Terms</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE II Grant of Security Interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.01 Collateral</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;2.02 Grant of Security Interest in Collateral</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE III Representations and Warranties</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;3.01 Title; No Other Liens</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;3.02 Perfection and Priority</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;3.03 Jurisdiction of Organization; Chief Executive Office</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;3.04 Locations of Books and Records</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;3.05 Pledged Collateral</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;3.06 Instruments and Tangible Chattel Paper Formerly Accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;3.07 Intellectual Property</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;3.08 Commercial Tort Claims</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;3.09 Specific Collateral</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;3.10 Enforcement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;3.11 Representations and Warranties of the Credit Agreement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE IV Covenants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.01 Maintenance of Perfected Security Interest; Further Documentation and
Consents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">

<TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.02 Changes in Locations, Name, Etc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.03 Pledged Collateral</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.04 Accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.05 Delivery of Instruments and Tangible Chattel Paper and Control of
Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.06 Intellectual Property</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.07 Notices</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.08 Notice of Commercial Tort Claims</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;4.09 Compliance with Credit Agreement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE V Remedial Provisions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.01 Code and Other Remedies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.02 Control Account and Collections</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.03 Pledged Collateral</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.04 Registration Rights</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;5.05 Deficiency</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE VI Subordination</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.01 Subordination</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;6.02 Restrictions on Payment and Transfer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
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</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->-ii-<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE VII The Administrative Secured Party</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;7.01 The Secured Party&#146;s Appointment as Attorney-in-Fact</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;7.02 Authorization to File Financing Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE VIII Miscellaneous</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.01 Reinstatement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.02 Independent Obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.03 No Waiver by Course of Conduct</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.04 Amendments in Writing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.05 Additional Grantors; Additional Pledged Collateral</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.06 Notices</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.07 Benefit of Agreement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">

<TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.08 Cumulative Remedies, Etc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.09 Amendments, Waivers and Consents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.10 Waiver</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.11 Governing Law.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.12 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.13 Interpretation; Headings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.14 Severability of Provisions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Section&nbsp;8.15 Counterparts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ANNEXES AND SCHEDULES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:45px; text-indent:-15px">ANNEX 1 Form of Pledge Amendment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:45px; text-indent:-15px">ANNEX 2 Form of Joinder Agreement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:45px; text-indent:-15px">SCHEDULE I-A Grantors</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:45px; text-indent:-15px">SCHEDULE I-B Initial Limited Pledgors</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:45px; text-indent:-15px">SCHEDULE I-C Initial Pledged Entities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:45px; text-indent:-15px">SCHEDULE II Commercial Tort Claims</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:45px; text-indent:-15px">SCHEDULE III Jurisdiction of Organization; Chief Executive Offices</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:45px; text-indent:-15px">SCHEDULE IV Location of Books and Records</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:45px; text-indent:-15px">SCHEDULE V Control Agreements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:45px; text-indent:-15px">SCHEDULE VI Pledged Collateral</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:45px; text-indent:-15px">SCHEDULE VII Intellectual Property</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">This SECURITY AGREEMENT (this &#147;<U>Agreement</U>&#148;) is made as of November&nbsp;29, 2010 by and
among Palm Harbor Homes, Inc., a Florida corporation (as referred to herein, the &#147;<U>PHH</U>&#148;) and
each of the direct and indirect Subsidiaries of PHH set forth on <U>Schedule&nbsp;I-A</U> hereto (PHH
or any such Subsidiary individually being a &#147;<U>Grantor</U>&#148; and collectively being the
&#147;<U>Grantors</U>&#148;) in favor of Fleetwood Homes, Inc., a Delaware corporation (the &#147;<U>Secured
Party</U>&#148;).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">W I T N E S S E T H
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, on November&nbsp;29, 2010 (the &#147;<U>Petition Date</U>&#148;), the Grantors each filed a
voluntary petition for relief under title 11 of chapter 11 of the United States Code, 11 U.S.C. &#167;&#167;
101, et. seq. (as amended, the &#147;<U>Bankruptcy Code</U>&#148;) with the United States Bankruptcy Court
for the District of Delaware (the &#147;<U>Bankruptcy Court</U>&#148;); and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, from and after the Petition Date, the Grantors continue to operate their respective
businesses as debtors and debtors-in-possession pursuant to sections 1107 and 1108 of the
Bankruptcy Code; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, each of the Grantors has an immediate need for funds to continue to operate its
respective businesses and the Grantors have not been able to obtain sufficient credit or to incur
sufficient debt from any other source sufficient to continue their business operations; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, pursuant to the Debtor-in-Possession Revolving Credit Agreement dated as of the date
hereof (as the same may be modified from time to time, the &#147;<U>Credit Agreement</U>&#148;) among each
of the Grantors and the Secured Party, the Secured Party has agreed to provide certain financial
accommodations to the Grantors upon the terms and subject to the conditions set forth therein; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, each Grantor will derive substantial direct and indirect benefits from the financial
accommodations provided by the Secured Party under the Credit Agreement; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, it is a condition precedent to the obligation of the Secured Party to provide such
financial accommodations under the Credit Agreement that the Grantors shall have executed and
delivered this Agreement to the Secured Party; and
</DIV>

<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE I<BR>
DEFINITIONS
</DIV>



<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><U>Section&nbsp;1.01</U> <U>Definitions</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Additional Pledged Equity Interests</U>&#148; means any and all interest in (a)&nbsp;any and all
additional interests in any Person owned by any Grantor that is a Pledged Subsidiary hereafter
acquired by such Grantor, including any Additional Pledged Equity Interests in any such Pledged
Subsidiary, any and all of Grantor&#146;s other additional rights and interests in and to such Pledged
Subsidiary and any and all of Grantor&#146;s rights to and interests in any proceeds and distributions
under or pursuant to any Pledged Collateral Agreements of or with respect to such Pledged
Subsidiary or otherwise, including (i)&nbsp;warrants, options or other rights entitling such Grantor to
acquire any interest in capital stock or other Equity Interests in such Pledged Subsidiary,
(iii)&nbsp;securities, property, interest, dividends and other payments and distributions issued as an
addition to, in redemption of, in renewal or exchange for, in substitution or upon conversion of,
or otherwise on account of, the Pledged Equity Interests of such Pledged Subsidiary or such
additional capital stock or other equity securities or other interests in such Pledged Subsidiary,
(iii)&nbsp;all rights of such Grantor to receive moneys in repayment of loans made to such Pledged
Subsidiary pursuant to any Pledged Collateral Agreement or otherwise, (iv)&nbsp;all rights of such
Grantor to receive proceeds of any insurance, indemnity, warranty or guaranty with respect to the
Pledged Equity Interests in such Pledged Subsidiary, (v)&nbsp;all claims of such Grantor for damages
arising out of or for breach of or default or misrepresentation under any Pledged Collateral
Agreement or any documents, instruments or opinions delivered pursuant thereto, (vi)&nbsp;any right of
Grantor to terminate any Pledged Collateral Agreement, to perform thereunder and to compel
performance and otherwise exercise all remedies thereunder and (vii)&nbsp;all rights of such Grantor to
vote and give appraisals, consents, decisions and directions and exercise any other similar rights
with respect to any lawful action of such Pledged Subsidiary, and (b)&nbsp;to the extent not included in
the foregoing, all cash and non-cash proceeds and Support Obligations of or with respect to the
Pledged Equity Interests in such Pledged Subsidiary and any such Additional Pledged Equity
Interests, in each case from time to time received or receivable by, or otherwise paid or
distributed to or acquired by, such Grantor.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Agreement</U>&#148; means this Security Agreement, together with all Exhibits and Schedules
hereto, as the same may be amended, supplemented or otherwise modified from time to time.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Applicable IP Office</U>&#148; means the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency within or outside the United States.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">&#147;<U>Collateral</U>&#148; has the meaning specified in <U>Section&nbsp;2.01(b)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Control Agreements</U>&#148; means, with respect to any deposit account, any securities
account, commodity account, securities entitlement or commodity contract, an agreement, in form and
substance satisfactory to the Secured Party, among the Secured Party, the financial institution or
other Person at which such account is maintained or with which such entitlement or contract is
carried and the Grantor maintaining such account, effective to grant &#147;control&#148; (as defined in the
applicable UCC) over such account to the Secured Party.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Liabilities</U>&#148; means all claims, actions, suits, judgments, damages, losses, liability,
obligations, responsibilities, fines, penalties, sanctions, costs, fees, taxes, commissions,
charges, disbursements and expenses, in each case of any kind or nature (including interest accrued
thereon or as a result thereto and fees, charges and disbursements of financial, legal and other
advisors and consultants), whether joint or several, whether or not indirect, contingent,
consequential, actual, punitive, treble or otherwise.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Limited Pledgors</U>&#148; means each of the entities set forth on <U>Schedule&nbsp;I-B</U>, in
its capacity as a Grantor.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Pledged Certificated Equity Interests</U>&#148; means all certificated securities and any
other Equity Interests or Equivalent Equity Interests of any Person evidenced by a certificate,
instrument or other similar document (as defined in the UCC), in each case owned by any
Grantor, and any distribution of property made on, in respect of or in exchange for the
foregoing from time to time, including all Equity Interests and Equivalent Equity Interests listed
on <U>Schedule&nbsp;VI</U>.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Pledged Collateral</U>&#148; means, collectively, the Pledged Equity Interests and the Pledged
Debt Instruments.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Pledged Collateral Agreement</U>&#148; means any shareholders agreement, operating agreement,
partnership agreement, voting trust, proxy agreement or other agreement or understanding with
respect to any Pledged Collateral.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Pledged Debt Instruments</U>&#148; means all right, title and interest of any Grantor in
instruments evidencing any indebtedness for borrowed money owed to such Grantor or other
obligations, and any distribution of property made on, in respect of or in exchange for the
foregoing from time to time, including all indebtedness described on <U>Schedule&nbsp;VI</U>, issued by
the obligors named therein.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Pledged Entity</U>&#148; means each entity set forth on <U>Schedule&nbsp;I-C</U> hereto and each
entity listed as a Subsidiary on a Pledge Amendment (as defined in <U>Section&nbsp;8.05</U>).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Pledged Investment Property</U>&#148; means any investment property of any Grantor, and any
distribution of property made on, in respect of or in exchange for the foregoing from time to time,
other than any Pledged Equity Interests or Pledged Debt Instruments.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Pledged Equity Interests</U>&#148; means all Additional Pledged Equity Interests, all Pledged
Certificated Equity Interests and all Pledged Uncertificated Equity Interests.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Pledged Subsidiary</U>&#148; means each Subsidiary of a Grantor, the Equity Interests in which
is required to be pledged hereunder, including each Subsidiary of a Grantor listed on <U>Schedule
VI</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Pledged Uncertificated Equity Interests</U>&#148; means any Equity Interest or Equivalent
Equity Interest of any Person that is not Pledged Certificated Equity Interest, including all
right, title and interest of any Grantor as a limited or general partner in any partnership not
constituting Pledged Certificated Equity Interests or as a member of any limited liability company,
all right, title and interest of any Grantor in, to and under any certificate or articles of
incorporation, bylaws or other organizational document of any partnership or limited liability
company to which it is a party, and any distribution of property made on, in respect of or in
exchange for the foregoing from time to time, including in each case those interests set forth on
<U>Schedule&nbsp;VI</U>, to the extent such interests are not certificated.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">&#147;<U>Secured Obligations</U>&#148; has the meaning set forth in <U>Section&nbsp;2.02</U>.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">&#147;<U>Secured Party</U>&#148; has the meaning set forth in the Preamble.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><U>Section&nbsp;1.02</U> Certain Terms.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;The following terms have the meanings given to them in the UCC and terms used herein
without definition that are defined in the UCC have the meanings given to them in the UCC:
&#147;<U>account</U>&#148;, &#147;<U>account debtor</U>&#148;, &#147;<U>as-extracted collateral</U>&#148;, &#147;<U>certificated
security</U>&#148;, &#147;<U>chattel paper</U>&#148;, &#147;<U>commercial tort claim</U>&#148;, &#147;<U>commodity
contract</U>&#148;, &#147;<U>deposit account</U>&#148;, &#147;<U>electronic chattel paper</U>&#148;, &#147;<U>equipment</U>&#148;,
&#147;<U>farm products</U>&#148;, &#147;<U>fixture</U>&#148;, &#147;<U>general intangible</U>&#148;, &#147;<U>goods</U>&#148;,
&#147;<U>health-care-insurance receivable</U>&#148;, &#147;<U>instruments</U>&#148;, &#147;<U>inventory</U>&#148;,
&#147;<U>investment property</U>&#148;, &#147;<U>letter-of-credit right</U>&#148;, &#147;<U>proceeds</U>&#148;,
&#147;<U>record</U>&#148;, &#147;<U>securities account</U>&#148;, &#147;<U>security</U>&#148; and &#147;<U>tangible chattel
paper</U>&#148;.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;Initially capitalized terms used herein without definition are used as defined in the
Credit Agreement including, &#147;<U>Business Day</U>&#148;, &#147;<U>Capital Lease</U>&#148;, &#147;<U>Closing
Date</U>&#148;, &#147;<U>Collections</U>&#148;, &#147;<U>Computer Software</U>&#148;, &#147;<U>Contractual Obligation</U>&#148;,
&#147;<U>Control Account</U>&#148;, &#147;<U>Copyrights</U>&#148;, &#147;<U>Credit Document</U>&#148;, &#147;<U>Default</U>&#148;,
&#147;<U>Event of Default</U>&#148;, &#147;<U>Governmental Body</U>&#148;, &#147;<U>Intellectual Property</U>&#148;,
&#147;<U>Knowledge</U>&#148;, &#147;<U>Law</U>&#148;, &#147;<U>Lien</U>&#148;, &#147;<U>Marks</U>&#148;, &#147;<U>Note</U>&#148;,
&#147;<U>Obligations</U>&#148;, &#147;<U>Patents</U>&#148;, &#147;<U>Permits</U>&#148;, &#147;<U>Person</U>&#148;, &#147;<U>Permitted
Lien</U>&#148;, &#147;<U>Subsidiary</U>&#148;, &#147;<U>Textron Agent</U>&#148;, &#147;<U>Textron Facility</U>&#148;, &#147;<U>Textron
Lenders</U>&#148;, &#147;<U>Support Obligations</U>&#148;, &#147;<U>UCC</U>&#148; and &#147;<U>Weekly Budget</U>&#148;.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE II<BR>
GRANT OF SECURITY INTEREST
</DIV>



<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><U>Section&nbsp;2.01</U> <U>Collateral</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;For the purposes of this Agreement, all assets (other than the Equity Interests of and in
Countryplace Acceptance Corporation) of any Grantor (other than a Limited Pledgor), whether
presently existing or owned or hereafter arising or acquired, of any kind or nature and wherever
located, in which a Grantor (other than a Limited Pledgor) now has or at any time in the future may
acquire any right, title or interests, including all of the following property, is collectively
referred to as the &#147;<U>All Assets Collateral</U>&#148;:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(i)&nbsp;all accounts, chattel paper (including electronic chattel paper), deposit
accounts, documents (as defined in the UCC), equipment, general intangibles, instruments,
inventory, investment property and any Support Obligations related thereto;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(ii)&nbsp;the commercial tort claims described on <U>Schedule&nbsp;II</U> and on any
supplement thereto received by the Secured Party pursuant to <U>Section&nbsp;4.08</U>;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(iii)&nbsp;all property of such Grantor held by the Secured Party, including all property
of every description, in the custody of or in transit to the Secured Party for any
purpose, including safekeeping, collection or pledge, for the account of such Grantor or
as to which such Grantor may have any right or power, including but not limited to cash;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(iv)&nbsp;all other goods (including but not limited to fixtures) and personal property
of such Grantor, whether tangible or intangible and wherever located;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(v)&nbsp;all books, records and other documentation pertaining to the other property
described in this <U>Section&nbsp;2.01</U>; and
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%">(vi)&nbsp;to the extent not otherwise included, all proceeds of the foregoing;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;For the purposes of this Agreement, all of the following property, whether presently
existing or owned or hereafter arising or acquired and wherever located, by a Limited Pledgor, or
in which a Limited Pledgor now has or at any time in the future may acquire any right, title or
interests is collectively referred to as the &#147;<U>Limited Collateral</U>&#148; and, together with the
All Assets Collateral, the &#147;<U>Collateral</U>&#148;:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%">(i)&nbsp;all Pledged Equity Interests in each Pledged Entity;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(ii)&nbsp;all rights, interests and claims with respect to the Pledged Equity Interests
in each Pledged Entity, including under any and all Pledged Collateral Agreement with
respect to such Pledged Entity;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(iii)&nbsp;all books, records and other documentation pertaining to the other property
described in this <U>Section&nbsp;2.01(b)</U>;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%">(iv)&nbsp;to the extent not otherwise included, all proceeds of the foregoing;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;2.02</U> <U>Grant of Security Interest in Collateral</U>. Each Grantor, as
collateral security for the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations of such Grantor (the &#147;<U>Secured
Obligations</U>&#148;), hereby mortgages, pledges and hypothecates to the Secured Party, and grants to
the Secured Party a Lien on and security interest in, all of its right, title and interest in, to
and under the Collateral of such Grantor.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE III<BR>
REPRESENTATIONS AND WARRANTIES
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">To induce the Secured Party to enter into the Credit Documents, each Grantor hereby, jointly
and severally, represents and warrants to the Secured Party on the date hereof and on each date
that a Weekly Budget is delivered pursuant to the Credit Agreement, that:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;3.01</U> <U>Title; No Other Liens</U>. Except for Permitted Liens (other than
those not permitted to exist on any Collateral), such Grantor has good and marketable title to all
properties and assets, tangible and intangible, owned by it, and each Grantor has rights in and
power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder free
and clear of any and all Liens other than the Liens created and permitted in favor of the Secured
Party by the Credit Documents and the Permitted Liens. No Grantor is in possession of any
equipment or other tangible asset that is owned by another Person. None of the assets of any
Grantor is in the possession or under the control of any other Person.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;3.02</U> <U>Perfection and Priority</U>. The security interest granted pursuant
to this Agreement constitutes a valid and continuing perfected security interest in favor of the
Secured Party in all Collateral. Such security interest is prior to all other Liens on the
Collateral (except for Permitted Liens). Except as set forth in this <U>Section&nbsp;3.02</U>, all
actions by such Grantor
necessary or desirable to protect and perfect the Lien granted hereunder on the Collateral
have been duly taken. No authorization, approval or consent is required to obtained from any
Governmental Body or other Person for the grant of the security interest herein, the perfection
thereof or the exercise by the Secured Party of its rights and remedies hereunder (other than the
exercise by the Secured Party of any rights or remedies with respect to the Initial Limited
Pledgors and Subsidiaries which would result in a change of control requiring prior insurance
regulatory approval from applicable insurance regulatory agencies having jurisdiction over such
Initial Limited Pledgors and Subsidiaries).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;3.03</U> <U>Jurisdiction of Organization; Chief Executive Office</U>. Such
Grantor&#146;s jurisdiction of organization, legal name and organizational identification number, if
any, and the location of such Grantor&#146;s chief executive office or sole place of business, in each
case as of the date hereof, is specified on <U>Schedule&nbsp;III</U> and such <U>Schedule&nbsp;III</U> also
lists all jurisdictions of incorporation, legal names and locations of such Grantor&#146;s chief
executive office or sole place of business for the five years preceding the date hereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;3.04</U> <U>Locations of Books and Records</U>. On the date hereof, such
Grantor&#146;s books and records concerning the Collateral are kept at the locations listed on
<U>Schedule&nbsp;IV</U>.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><U>Section&nbsp;3.05</U> <U>Pledged Collateral</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;The Pledged Equity Interests pledged by such Grantor hereunder (i)&nbsp;is listed on
<U>Schedule&nbsp;VI</U> and constitutes that percentage of the issued and outstanding equity of all
classes of each issuer thereof as set forth on <U>Schedule&nbsp;VI</U>, (ii)&nbsp;has been duly authorized,
validly issued and is fully paid and nonassessable (other than Pledged Equity Interests in limited
liability companies and partnerships) and (iii)&nbsp;constitutes the legal, valid and binding obligation
of the obligor with respect thereto, enforceable in accordance with its terms.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;As of the Closing Date, all Pledged Collateral (other than Pledged Uncertificated Equity
Interests) and all Pledged Investment Property constituting Collateral consisting of instruments
and certificates has been delivered to the Secured Party in accordance with <U>Section
4.03(a)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;Upon the occurrence and during the continuance of an Event of Default, the Secured Party
shall be entitled to exercise all of the rights of the Grantor granting the security interest in
any Pledged Equity Interests constituting Collateral, and a transferee or assignee of such Pledged
Equity Interests shall become a holder of such Pledged Equity Interests to the same extent as such
Grantor and be entitled to participate in the management of the issuer of such Pledged Equity
Interests and, upon the transfer of the entire interest of such Grantor, such Grantor shall, by
operation of law, cease to be a holder of such Pledged Equity Interests; <I>provided </I>that Lender shall
not exercise this remedy with respect to the Initial Limited Pledgors and their direct Subsidiaries
to the extent (and only for so long as) the exercise of the remedy granted in this <U>Section
3.05(c)</U> would require insurance regulatory approval from any applicable insurance regulatory
agency having jurisdiction over such Initial Limited Pledgor or Subsidiary; <I>provided further </I>that
the Secured Party shall be entitled to pursue all such regulatory approvals including, by using the
powers granted it in <U>Section&nbsp;7.01</U>.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;Except as set forth in <U>Schedule&nbsp;VI</U> and any certificate or articles of
incorporation, bylaws or other organizational document of any Grantor, there are no (i)&nbsp;Pledged
Collateral Agreements which affect or relate to the voting or giving of written consents with
respect to any of the Pledged Collateral and (ii)&nbsp;restrictions on the transferability of the
Pledged Collateral to Secured Party or with respect to the foreclosure, transfer or disposition
thereof by Secured Party. Each Pledged Collateral Agreement contains the entire agreement between
the parties thereto with respect to the subject matter thereof, has not been amended or modified,
and is in full force and effect in accordance with its terms. To the best Knowledge of such
Grantor, there exists no material violation or material default under any Pledged Collateral
Agreement by such Grantor or the other parties thereto. Such Grantor has not knowingly waived or
released any of its material rights under or otherwise consented to a material departure from the
terms and provisions of any Pledged Collateral Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;No control agreements exist with respect to any Collateral other than Control Agreement in
favor of the Secured Party and Control Agreements in favor of the Textron Agent and the Textron
Lenders in connection with the Textron Facility.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;3.06</U> <U>Instruments and Tangible Chattel Paper Formerly Accounts</U>. No
amount payable to such Grantor under or in connection with any account constituting Collateral is
evidenced by any instrument or tangible chattel paper that has not been delivered to the Secured
Party, properly endorsed for transfer, to the extent delivery is required by <U>Section
4.05(a)</U>.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><U>Section&nbsp;3.07</U> <U>Intellectual Property</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;<U>Schedule&nbsp;VII</U> sets forth a true and complete list of the following Intellectual
Property constituting Collateral such Grantor owns, licenses or otherwise has the right to use:
(i)&nbsp;Intellectual Property that is registered or subject to applications for registration, (ii)
Internet domain names and (iii)&nbsp;Intellectual Property and material Computer Software, separately
identifying that owned and licensed to such Grantor and including for each of the foregoing items
(A)&nbsp;the owner, (B)&nbsp;the title, (C)&nbsp;the jurisdiction in which such item has been registered or
otherwise arises or in which an application for registration has been filed, (D)&nbsp;as applicable, the
registration or application number and registration or application date and (E)&nbsp;any licenses and
sublicenses held by any Grantor as licensee pertaining to Intellectual Property of any other Person
or other rights (including franchises) granted by the Grantor with respect thereto.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;On the Closing Date, all Intellectual Property constituting Collateral owned by such
Grantor is valid, in full force and effect, subsisting, unexpired and enforceable, and no
Intellectual Property constituting Collateral has been abandoned. No breach or default of any
material license or sublicense held by any Grantor as licensee pertaining to Intellectual Property
of any other Person or other right (including franchises) constituting Collateral shall be caused
by any of the following, and none of the following shall limit or impair the ownership, use,
validity or enforceability of, or any rights of such Grantor in, any Intellectual Property
constituting Collateral: (i)&nbsp;the consummation of the transactions contemplated by any Credit
Document or (ii)&nbsp;any holding, decision, judgment or order rendered by any Governmental Body. There
are no pending (or, to the Knowledge of such Grantor, threatened) actions, investigations, suits,
proceedings, audits, claims, demands, orders or disputes challenging the ownership, use,
validity, enforceability of, or such Grantor&#146;s rights in, any Intellectual Property
constituting Collateral of such Grantor. To such Grantor&#146;s Knowledge, no Person has been or is
infringing, misappropriating, diluting, violating or otherwise impairing any Intellectual Property
constituting Collateral of such Grantor. Such Grantor, and to such Grantor&#146;s Knowledge each other
party thereto, is not in material breach or default of any material license or sublicense held by
any Grantor as licensee pertaining to Intellectual Property of any other Person or other right
(including franchises) constituting Collateral.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;3.08</U> <U>Commercial Tort Claims</U>. The only commercial tort claims of the
Grantors existing on the date hereof (regardless of whether the amount, defendant or other material
facts can be determined and regardless of whether such commercial tort claim has been asserted,
threatened or has otherwise been made known to the obligee thereof or whether litigation has been
commenced for such claims) are those listed on <U>Schedule&nbsp;II</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;3.09</U> <U>Specific Collateral</U>. None of the Collateral is, or is proceeds
or products of, farm products, as-extracted collateral, health-care-insurance receivables or timber
to be cut.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;3.10</U> <U>Enforcement</U>. No Permit, notice to or filing with any
Governmental Body or any other Person or any consent from any Person is required for the exercise
by the Secured Party of its rights (including voting rights) provided for in this Agreement or the
enforcement of remedies in respect of the Collateral pursuant to this Agreement, including the
transfer of any Collateral, except as may be required in connection with the disposition of any
portion of the Pledged Collateral by laws affecting the offering and sale of securities generally
or any approvals that may be required to be obtained from any bailees or landlords to collect the
Collateral.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;3.11</U> <U>Representations and Warranties of the Credit Agreement</U>. The
representations and warranties made by each Grantor in <U>ARTICLE IV</U> of the Credit Agreement
(all of which are hereby incorporated herein by reference) are true and correct on each of the
dates as required by the Credit Agreement.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE IV<BR>
COVENANTS
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Each Grantor agrees with the Secured Party to the following, as long as any Secured Obligation
remains outstanding:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;4.01</U> Maintenance of Perfected Security Interest; Further Documentation and
Consents.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;<U>Generally</U>. Such Grantor shall (i)&nbsp;not use or permit any Collateral to be used
unlawfully or in violation of any provision of any Credit Document, any Related Document, any
requirement of law or any policy of insurance covering the Collateral and (ii)&nbsp;not enter into any
Contractual Obligation or undertaking restricting the right or ability of such Grantor or the
Secured Party to dispose of any Collateral if such restriction would have a Material Adverse
Effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;Such Grantor shall maintain the security interest created by this Agreement as a perfected
security interest having at least the priority described in <U>Section&nbsp;3.02</U>
and shall defend such security interest and such priority against the claims and demands of
all Persons (other than holders of Permitted Liens).
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;Grantor shall furnish to the Secured Party from time to time statements and schedules
further identifying and describing the Collateral and such other documents in connection with the
Collateral as the Secured Party may reasonably request, all in reasonable detail and in form and
substance satisfactory to the Secured Party.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;At any time and from time to time, upon the written request of the Secured Party, such
Grantor shall, for the purpose of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted, (i)&nbsp;promptly and duly execute and deliver, and have
recorded, such further documents, including an authorization to file (or, as applicable, the
filing) of any financing statement or amendment under the UCC (or other filings under similar
requirements of law) in effect in any jurisdiction with respect to the security interest created
hereby and (ii)&nbsp;take such further action as the Secured Party may reasonably request, including (A)
using its commercially reasonable efforts to secure all approvals necessary or appropriate for the
assignment to or for the benefit of the Secured Party of any Contractual Obligation, including any
license or sublicense held by any Grantor as licensee pertaining to Intellectual Property of any
other Person or other right (including franchises), held by such Grantor and to enforce the
security interests granted hereunder and (B)&nbsp;executing and delivering any Control Agreements with
respect to deposit accounts and securities accounts.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;No Grantor shall, without the prior written consent of the Secured Party, take any action
or cause any party to take any action to terminate, amend or otherwise modify any financing
statement, or other security filing.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;4.02</U> <U>Changes in Locations, Name, Etc</U>. Except upon 30&nbsp;days&#146; prior
written notice to the Secured Party and delivery to the Secured Party of all documents reasonably
requested by the Secured Party to maintain the validity, perfection and priority of the security
interests provided for herein, such Grantor shall not do any of the following:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(i)&nbsp;change its jurisdiction of organization or its location, in each case from that
referred to in <U>Section&nbsp;3.03</U>; or
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(ii)&nbsp;change its legal name or organizational identification number, if any, or
corporation, limited liability company, partnership or other organizational structure to
such an extent that any financing statement filed in connection with this Agreement would
become misleading.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><U>Section&nbsp;4.03</U> <U>Pledged Collateral</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;<U>Delivery of Pledged Collateral</U>. Such Grantor shall (i)&nbsp;deliver to the Secured
Party, in suitable form for transfer and in form and substance satisfactory to the Secured Party,
(A)&nbsp;all Pledged Certificated Equity Interests constituting Collateral of such Grantor, (B)&nbsp;all
Pledged Debt Instruments constituting Collateral of such Grantor (other than intercompany Pledged
Debt Instruments by a Grantor to another Grantor) and (C)&nbsp;all certificates and instruments
evidencing Pledged Investment Property constituting Collateral of such Grantor and (ii)&nbsp;maintain
all other Pledged Investment Property constituting Collateral of such Grantor in a
securities account that is the subject of an effective Control Agreement maintained with a
securities intermediary approved by the Secured Party.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;<U>Event of Default</U>. During the continuance of an Event of Default, the Secured
Party shall have the right, at any time in its discretion and without notice to the Grantor, to
transfer to or to register in its name or in the name of its nominees any Pledged Collateral or any
Pledged Investment Property constituting Collateral of such Grantor.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;<U>Exchange and Issuance of Certificates</U>. The Secured Party shall have the right, at
any time in its discretion and without notice to the Grantor, to exchange any certificate or
instrument representing or evidencing any Pledged Collateral or any Pledged Investment Property
constituting Collateral for certificates or instruments of smaller or larger denominations. Upon
the request of the Secured Party, such Grantor shall cause certificates to be issued in respect of
any Pledged Uncertificated Equity Interests constituting Collateral.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;<U>Cash Distributions with respect to Pledged Collateral</U>. As provided in <U>ARTICLE
V</U>, such Grantor shall be entitled to receive all cash distributions paid in respect of the
Pledged Collateral.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;<U>Voting Rights</U>. Except as provided in <U>ARTICLE V</U>, such Grantor shall be
entitled to exercise all voting, consent and corporate, partnership, limited liability company and
similar rights with respect to the Pledged Collateral; <I>provided</I>, <I>however</I>, that no vote shall be
cast, consent given or right exercised or other action taken by such Grantor that would impair the
Collateral or be inconsistent with or result in any violation of any provision of any Credit
Document.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(f) <U>Certification of Pledged Equity Interests</U>.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(i)&nbsp;Such Grantor shall comply with all of its obligations under any Pledged
Collateral Agreements to which it is a party and shall enforce all of its rights
thereunder.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(ii)&nbsp;If requested by Lender, such Grantor will take all actions necessary to cause
each Pledged Collateral Agreement relating to Collateral consisting of any and all
limited, limited liability and general partnership interests and limited liability
company interests of any type or nature (&#147;<U>Partnership and LLC Collateral</U>&#148;) to
provide specifically at all times that: (A)&nbsp;the Partnership and LLC Collateral shall be
securities and shall be governed by Article&nbsp;8 of the applicable UCC; (B)&nbsp;each certificate
of membership or partnership representing the Partnership and LLC Collateral shall bear a
legend to the effect that such membership interest or partnership interest is a security
and is governed by Article&nbsp;8 of the applicable UCC; and (C)&nbsp;no consent of any member,
manager, partner or other Person shall be a condition to the admission as a member or
partner of any transferee that acquires ownership of the Partnership and LLC Collateral
as a result of the exercise by Secured Party of any remedy hereunder or under applicable
law.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(iii)&nbsp;Such Grantor shall not vote to enable or take any other action to amend or
terminate, or waive compliance with any of the terms of, any Pledged
Collateral Agreement, certificate or articles of incorporation, bylaws or other
organizational documents, or otherwise cast any vote or grant or give any consent, waiver
or ratification in respect of the Pledged Collateral, in any way that materially changes
the rights of such Grantor with respect to any such Pledged Collateral in a manner
adverse to the Secured Party or that adversely affects the validity, perfection or
priority of the Secured Party&#146;s security interest therein.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;4.04</U> <U>Accounts</U>. Such Grantor shall not, other than in the ordinary
course of business, (i)&nbsp;grant any extension of the time of payment of any account constituting
Collateral, (ii)&nbsp;compromise or settle any such account for less than the full amount thereof, (iii)
release, wholly or partially, any Person liable for the payment of any such account, (iv)&nbsp;allow any
credit or discount on any such account or (v)&nbsp;amend, supplement or modify any such account in any
manner that could adversely affect the value thereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;4.05</U> <U>Delivery of Instruments and Tangible Chattel Paper and Control of
Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;If any amount payable under or in connection with any Collateral owned by such Grantor
shall be or become evidenced by an instrument or tangible chattel paper other than such instrument
delivered in accordance with <U>Section&nbsp;4.03(a)</U> and in the possession of the Secured Party,
such Grantor shall mark all such instruments and tangible chattel paper with the following legend:
&#147;This writing and the obligations evidenced or secured hereby are subject to the security interest
of Fleetwood Homes, Inc., as Lender&#148; and, at the request of the Secured Party, shall immediately
deliver such instrument or tangible chattel paper to the Secured Party, duly indorsed in a manner
satisfactory to the Secured Party.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;Such Grantor shall not grant &#147;control&#148; (within the meaning of such term under Article
47-9106 of the UCC) over any investment property constituting Collateral to any Person.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;If such Grantor is or becomes the beneficiary of a letter of credit constituting
Collateral that is not a Support Obligation of any Collateral, such Grantor shall promptly, and in
any event within two Business Days after becoming a beneficiary, notify the Secured Party thereof
and enter into a Contractual Obligation with the Secured Party, the issuer of such letter of credit
or any nominated Person with respect to the letter-of-credit rights under such letter of credit.
Such Contractual Obligation shall assign such letter-of-credit rights to the Secured Party and such
assignment shall be sufficient to grant control for the purposes of section 47-9107 of the UCC (or
any similar section under any equivalent UCC). Such Contractual Obligation shall also direct all
payments thereunder to a Control Account. The provisions of the Contractual Obligation shall be in
form and substance reasonably satisfactory to the Secured Party.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;If any Collateral owned by such Grantor shall be or become evidenced by electronic chattel
paper, such Grantor shall take all steps necessary to grant the Secured Party control of all such
electronic chattel paper for the purposes of section 9-105 of the UCC (or any similar section under
any equivalent UCC) and all &#147;transferable records&#148; as defined in each of
the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National
Commerce Act.
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><U>Section&nbsp;4.06</U> <U>Intellectual Property</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;Within 60&nbsp;days after any change to <U>Schedule&nbsp;VI</U> for such Grantor, such Grantor
shall provide the Secured Party notification thereof and the short-form intellectual property
agreements and assignments and other documents that the Secured Party reasonably requests with
respect thereto.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;Such Grantor shall (and shall cause all its licensees to) (i) (A)&nbsp;continue to use each
Mark included in the Intellectual Property constituting Collateral in order to maintain such Mark
in full force and effect with respect to each class of goods for which such Mark is currently used,
free from any claim of abandonment for non-use, (B)&nbsp;maintain at least the same standards of quality
of products and services offered under such Mark as are currently maintained, (C)&nbsp;use such Mark
with the appropriate notice of registration and all other notices and legends required by
applicable requirements of law, (D)&nbsp;not adopt or use any other Mark that is confusingly similar or
a colorable imitation of such Mark unless the Secured Party shall obtain a perfected security
interest in such other Mark pursuant to this Agreement and (ii)&nbsp;not do any act or omit to do any
act whereby (A)&nbsp;such Mark (or any goodwill associated therewith) may become destroyed, invalidated,
impaired or harmed in any material way, (B)&nbsp;any material Patent included in the Intellectual
Property constituting Collateral may become forfeited, misused, unenforceable, abandoned or
dedicated to the public, (C)&nbsp;any portion of the material Copyrights included in the Intellectual
Property constituting Collateral may become invalidated, otherwise impaired or fall into the public
domain or (D)&nbsp;any trade secret that is material Intellectual Property constituting Collateral may
become publicly available or otherwise unprotectable.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;Such Grantor shall notify the Secured Party immediately if it knows, or has reason to
know, that any application or registration relating to any Intellectual Property constituting
Collateral may become forfeited, misused, unenforceable, abandoned or dedicated to the public, or
of any adverse determination or development regarding the validity or enforceability or such
Grantor&#146;s ownership of, interest in, right to use, register, own or maintain any Intellectual
Property constituting Collateral (including the institution of, or any such determination or
development in, any proceeding relating to the foregoing in any Applicable IP Office). Such
Grantor shall take all actions that are necessary or reasonably requested by the Secured Party to
maintain and pursue each application (and to obtain the relevant registration or recordation) and
to maintain each registration and recordation included in the Intellectual Property constituting
Collateral.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;In the event that any Intellectual Property of such Grantor constituting Collateral is or
has been infringed, misappropriated, violated, diluted or otherwise impaired by a third party, such
Grantor shall take such action as it reasonably deems appropriate under the circumstances in
response thereto, including promptly bringing suit and recovering all damages therefor.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;Each Grantor shall take all actions, deliver all documents and provide all information
necessary or reasonably requested by the Secured Party to ensure any Internet domain name
constituting Collateral is registered.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;4.07</U> <U>Notices</U>. Such Grantor shall promptly notify the Secured Party in
writing and with reasonable detail of its acquisition of any interest hereafter in property
constituting Collateral that is of a type where a security interest or lien must be or may be
registered, recorded or filed under, or notice thereof given under, any federal statute or
regulation. Such Grantor agrees to notify the Secured Party of any other event which could
reasonably be expected to have a Material Adverse Effect on the aggregate value of the Collateral
or on the Liens created hereunder or under any other Credit Document.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;4.08</U> <U>Notice of Commercial Tort Claims</U>. Such Grantor agrees that, if
it shall acquire any interest in any commercial tort claim (whether from another Person or because
such commercial tort claim shall have come into existence) constituting Collateral, (i)&nbsp;such
Grantor shall, immediately upon such acquisition, deliver to the Secured Party, in each case in
form and substance satisfactory to the Secured Party, a notice of the existence and nature of such
commercial tort claim and a supplement to <U>Schedule&nbsp;II</U> containing a specific description of
such commercial tort claim, (ii) <U>Section&nbsp;2.01(a)</U> shall apply to such commercial tort claim
and (iii)&nbsp;such Grantor shall execute and deliver to the Secured Party, in each case in form and
substance satisfactory to the Secured Party, any document, and take all other action, deemed by the
Secured Party to be reasonably necessary or appropriate for the Secured Party to obtain a perfected
security interest having at least the priority set forth in <U>Section&nbsp;3.02</U> in all such
commercial tort claims. Any supplement to <U>Schedule&nbsp;II</U> delivered pursuant to this
<U>Section&nbsp;4.08</U> shall, after the receipt thereof by the Secured Party, become part of
<U>Schedule&nbsp;II</U> for all purposes hereunder other than in respect of representations and
warranties made prior to the date of such receipt.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;4.09</U> <U>Compliance with Credit Agreement</U>. Such Grantor agrees to comply
with all covenants and other provisions applicable to it under the Credit Agreement (all of which
are hereby incorporated herein by reference) and agrees to the same submission to jurisdiction as
that agreed to by each Grantor in the Credit Agreement.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE V<BR>
REMEDIAL PROVISIONS
</DIV>



<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><U>Section&nbsp;5.01</U> <U>Code and Other Remedies</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;<U>UCC Remedies</U>. During the continuance of an Event of Default, the Secured Party
may exercise, in addition to all other rights and remedies granted to it in this Agreement and in
any other instrument or agreement securing, evidencing or relating to any Secured Obligation, all
rights and remedies of a secured party under the UCC or any other applicable law.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;<U>Disposition of Collateral</U>. Without limiting the generality of the foregoing, the
Secured Party may, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred to below) to or
upon any Grantor or any other Person (all and each of which demands, defenses, advertisements
and notices are hereby expressly waived to the maximum extent permitted by the Code and other
applicable law), during the continuance of any Event of Default (personally or through its agents
or attorneys), (i)&nbsp;enter upon the premises where any Collateral is located, without any obligation
to pay rent, through self-help, without judicial process, without first obtaining a final judgment
or giving any Grantor or any other Person notice or opportunity for a hearing on the Secured
Party&#146;s claim or action, (ii)&nbsp;take possession of, collect, receive, assemble, process, appropriate,
remove and realize upon any Collateral, or any part thereof, and (iii)&nbsp;sell, lease, license,
assign, dispose of, grant option or options to purchase and deliver any Collateral (enter into
Contractual Obligations to do any of the foregoing), in one or more parcels at public or private
sale or sales, at any exchange, broker&#146;s board or office of the Secured Party or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash
or on credit or for future delivery without assumption of any credit risk. The Secured Party shall
have the right, upon any such public sale or sales and, to the extent permitted by the UCC and
other applicable requirements of law, upon any such private sale, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption of any Grantor, which right or
equity is hereby waived and released.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;<U>Management of the Collateral</U>. Each Grantor further agrees, that, during the
continuance of any Event of Default, (i)&nbsp;at the Secured Party&#146;s request, it shall assemble the
Collateral and make it available to the Secured Party at places that the Secured Party shall
reasonably select, whether at such Grantor&#146;s premises or elsewhere, (ii)&nbsp;without limiting the
foregoing, the Secured Party also has the right to require that each Grantor store and keep any
Collateral pending further action by the Secured Party and, while any such Collateral is so stored
or kept, provide such guards and maintenance services as shall be necessary to protect the same and
to preserve and maintain such Collateral in good condition, (iii)&nbsp;until the Secured Party is able
to dispose of any Collateral, the Secured Party shall have the right to hold or use such Collateral
to the extent that it deems appropriate for the purpose of preserving the Collateral or its value
or for any other purpose deemed appropriate by the Secured Party and (iv)&nbsp;the Secured Party may, if
it so elects, seek the appointment of a receiver or keeper to take possession of any Collateral and
to enforce any of the Secured Party&#146;s remedies, with respect to such appointment without prior
notice or hearing as to such appointment. The Secured Party shall not have any obligation to any
Grantor to maintain or preserve the rights of any Grantor as against third parties with respect to
any Collateral while such Collateral is in the possession of the Secured Party.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;<U>Application of Proceeds</U>. The Secured Party shall apply the cash proceeds of any
action taken by it pursuant to this <U>Section&nbsp;5.01</U>, after deducting all reasonable costs and
expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of
any Collateral or in any way relating to the Collateral or the rights of the Secured Party
hereunder, including reasonable attorneys&#146; fees and disbursements, to the payment in whole or in
part of the Secured Obligations, as set forth in the Credit Agreement, and only after such
application and after the payment by the Secured Party of any other amount required by any
requirement of law, need the Secured Party account for the surplus, if any, to any Grantor.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;<U>Direct Obligation</U>. The Secured Party shall not be required to make any demand
upon, or pursue or exhaust any right or remedy against, any Grantor or any other Person with
respect to the payment of the Secured Obligations or to pursue or exhaust any right or remedy with
respect to any Collateral therefor or any direct or indirect guaranty thereof. All of
the rights and remedies of the Secured Party under any Credit Document shall be cumulative,
may be exercised individually or concurrently and not exclusive of any other rights or remedies
provided by any requirement of law. To the extent it may lawfully do so, each Grantor absolutely
and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert
against the Secured Party, any valuation, stay, appraisement, extension, redemption or similar laws
and any and all rights or defenses it may have as a surety, now or hereafter existing, arising out
of the exercise by them of any rights hereunder. If any notice of a proposed sale or other
disposition of any Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least ten days before such sale or other disposition.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(f)&nbsp;<U>Commercially Reasonable</U>. To the extent that applicable requirements of law impose
duties on the Secured Party to exercise remedies in a commercially reasonable manner, each Grantor
acknowledges and agrees that it is not commercially unreasonable for the Secured Party to do any of
the following:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(i)&nbsp;fail to incur significant costs, expenses or other Liabilities reasonably deemed
as such by the Secured Party to prepare any Collateral for disposition or otherwise to
complete raw material or work in process into finished goods or other finished products
for disposition;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(ii)&nbsp;fail to obtain Permits, or other consents, for access to any Collateral to
dispose of or for the collection or disposition of any Collateral, or, if not required by
other requirements of law, fail to obtain Permits or other consents for the collection or
disposition of any Collateral;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(iii)&nbsp;fail to exercise remedies against account debtors or other Persons obligated
on any Collateral or to remove Liens on any Collateral or to remove any adverse claims
against any Collateral;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(iv)&nbsp;advertise dispositions of any Collateral through publications or media of
general circulation, whether or not such Collateral is of a specialized nature or to
contact other Persons, whether or not in the same business as any Grantor, for
expressions of interest in acquiring any such Collateral;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(v)&nbsp;exercise collection remedies against account debtors and other Persons obligated
on any Collateral, directly or through the use of collection agencies or other collection
specialists, hire one or more professional auctioneers to assist in the disposition of
any Collateral, whether or not such Collateral is of a specialized nature or, to the
extent deemed appropriate by the Secured Party, obtain the services of other brokers,
investment bankers, consultants and other professionals to assist the Secured Party in
the collection or disposition of any Collateral, or utilize Internet sites that provide
for the auction of assets of the types included in the Collateral or that have the
reasonable capacity of doing so, or that match buyers and sellers of assets to dispose of
any Collateral;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(vi)&nbsp;dispose of assets in wholesale rather than retail markets;
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(vii)&nbsp;disclaim disposition warranties, such as title, possession or quiet enjoyment;
or
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(viii)&nbsp;purchase insurance or credit enhancements to insure the Secured Party against
risks of loss, collection or disposition of any Collateral or to provide to the Secured
Party a guaranteed return from the collection or disposition of any Collateral.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Each Grantor acknowledges that the purpose of this <U>Section&nbsp;5.01</U> is to provide a
non-exhaustive list of actions or omissions that are commercially reasonable when exercising
remedies against any Collateral and that other actions or omissions by the Secured Party shall not
be deemed commercially unreasonable solely on account of not being indicated in this <U>Section
5.01</U>. Without limitation upon the foregoing, nothing contained in this <U>Section&nbsp;5.01</U>
shall be construed to grant any rights to any Grantor or to impose any duties on the Secured Party
that would not have been granted or imposed by this Agreement or by applicable requirements of law
in the absence of this <U>Section&nbsp;5.01</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(g)&nbsp;<U>License</U>. For the purpose of enabling the Secured Party to exercise rights and
remedies under this <U>Section&nbsp;5.01</U> (including in order to take possession of, collect,
receive, assemble, process, appropriate, remove, realize upon, dispose of or grant options to
purchase any Collateral) at such time as the Secured Party shall be lawfully entitled to exercise
such rights and remedies, each Grantor hereby grants to the Secured Party an irrevocable,
nonexclusive, worldwide license (exercisable without payment of royalty or other compensation to
such Grantor), including in such license the right to sublicense, use and practice any Intellectual
Property constituting Collateral now owned or hereafter acquired by such Grantor and access to all
media in which any of the licensed items may be recorded or stored and to all Computer Software and
programs used for the compilation or printout thereof.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><U>Section&nbsp;5.02</U> <U>Control Account and Collections</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;From and after the Closing Date, each Grantor shall cause all Collections and any other
payments in respect of the Collateral to be remitted to the Control Account in accordance with the
requirements of the Credit Agreement. Until so remitted, such funds shall be held by such Grantor
in trust for the Secured Party, segregated from other funds of such Grantor. All proceeds being
held by the Secured Party in a Control Account (or by such Grantor in trust for the Secured Party)
shall continue to be held as collateral security for the Secured Obligations and shall not
constitute payment thereof until released as provided in the Credit Agreement. Each Grantor hereby
authorizes Secured Party to collect all payments, checks, drafts and other instruments addressed to
such Borrower and to withdraw and hold in reserve or release such funds pursuant to the terms of
the Credit Agreement and, during the occurrence and continuance of an Event of Default, to apply
such funds against the Secured Obligations. Each Grantor acknowledges and agrees that the Secured
Party shall have sole and exclusive control of the Control Account until the Secured Obligations
have been paid in full.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;Each Grantor shall, upon the Secured Party&#146;s request, deliver to the Secured Party all
original and other documents evidencing, and relating to, the Contractual Obligations constituting
Collateral and transactions that gave rise to any account constituting
Collateral or any payment in respect of general intangibles constituting Collateral, including
all original orders, invoices and shipping receipts and notify account debtors that such accounts
or general intangibles have been collaterally assigned to the Secured Party and that payments in
respect thereof shall be made directly to the Secured Party.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;The Secured Party may, without notice, at any time, in its own name or in the name of
others, communicate with account debtors or and any other payors in respect of general intangibles
constituting Collateral or obligors with respect thereto to verify with them to the Secured Party&#146;s
satisfaction the existence, amount and terms of any such Collateral or direct such account debtors
or obligors to make all payments directly to the Secured Party or as the Secured Party shall
direct. Upon request of the Secured Party, Grantors shall provide to the Secured Party signed,
undated notices, on such Grantor&#146;s letterhead, notifying account debtors or obligors of the
Grantors that all future payments shall be made to the Control Account and such account debtors and
obligors shall no longer to make payment to such Grantor, but to make payment directly to the
Secured Party or as the Secured Party shall direct.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;Anything herein to the contrary notwithstanding, each Grantor shall remain liable under
each account and each payment in respect of general intangibles to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in accordance with
the terms of any agreement giving rise thereto. The Secured Party shall not have any obligation or
liability under any agreement giving rise to an account or a payment in respect of a general
intangible by reason of or arising out of any Credit Document or the receipt by the Secured Party
of any payment relating thereto, nor shall the Secured Party be obligated in any manner to perform
any obligation of any Grantor under or pursuant to any agreement giving rise to an account or a
payment in respect of a general intangible, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by it or as to the sufficiency of any performance
by any party thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts that may have been assigned to it or to which
it may be entitled at any time or times.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><U>Section&nbsp;5.03</U> <U>Pledged Collateral</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;<U>Voting Rights</U>. During the continuance of an Event of Default, upon notice by the
Secured Party to the relevant Grantor or Grantors, the Secured Party or its nominee may exercise
(A)&nbsp;any voting, consent, corporate and other right pertaining to the Pledged Collateral at any
meeting of shareholders, partners or members, as the case may be, of the relevant issuer or issuers
of such Pledged Collateral or otherwise and (B)&nbsp;any right of conversion, exchange and subscription
and any other right, privilege or option pertaining to the Pledged Collateral as if it were the
absolute owner thereof (including the right to exchange at its discretion any such Pledged
Collateral upon the merger, amalgamation, consolidation, reorganization, recapitalization or other
fundamental change in the corporate or equivalent structure of any issuer of Pledged Equity
Interests constituting Collateral, the right to deposit and deliver any such Pledged Collateral
with any committee, depositary, transfer agent, registrar or other designated agency upon such
terms and conditions as the Secured Party may determine), all without liability except to account
for property actually received by it; <I>provided</I>, <I>however</I>, that the Secured Party shall have no duty
to any Grantor to exercise any such right, privilege or option and shall not be responsible for any
failure to do so or delay in so doing.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;<U>Proxies</U>. During the occurrence and continuance of an Event of Default, in order
to permit the Secured Party to exercise the voting and other consensual rights that it may be
entitled to exercise pursuant hereto and to receive all dividends and other distributions that it
may be entitled to receive hereunder, (i)&nbsp;each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to the Secured Party all such proxies, dividend payment orders and
other instruments as the Secured Party may from time to time reasonably request and (ii)&nbsp;without
limiting the effect of <U>clause (i)</U> above, such Grantor hereby revokes all previous proxies
with respect to the Pledged Collateral and grants to the Secured Party an irrevocable proxy to vote
all or any part of the Pledged Collateral and to exercise all other rights, powers, privileges and
remedies to which a holder of such Pledged Collateral would be entitled (including giving or
withholding written consents of shareholders, partners or members, as the case may be, calling
special meetings of shareholders, partners or members, as the case may be, and voting at such
meetings), which proxy shall be effective, automatically and without the necessity of any action
(including any transfer of any such Pledged Collateral on the record books of the issuer thereof)
by any other Person (including the issuer of such Pledged Collateral or any officer or agent
thereof) during the continuance of an Event of Default and which proxy shall only terminate upon
the payment in full of the Secured Obligations.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;<U>Authorization of Grantors</U>. Each Grantor hereby expressly irrevocably authorizes
and instructs, without any further instructions from such Grantor, each issuer of any Pledged
Collateral pledged hereunder by such Grantor to (i)&nbsp;comply with any instruction received by it from
the Secured Party in writing that states that an Event of Default is continuing and is otherwise in
accordance with the terms of this Agreement and each Grantor agrees that such issuer shall be fully
protected from Liabilities to such Grantor in so complying and (ii)&nbsp;unless otherwise expressly
permitted hereby, pay any dividend or make any other payment with respect to such Pledged
Collateral directly to the Secured Party.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;<U>Liability</U>. Anything herein to the contrary notwithstanding, (i)&nbsp;each Grantor shall
remain liable under any Pledged Collateral Agreement and any other contracts, agreements and other
documents to which it is a party included in the Collateral, to the extent set forth therein, to
perform all of its duties and obligations thereunder to the same extent as if this Agreement had
not been executed, (ii)&nbsp;the exercise by the Secured Party of any of the rights hereunder shall not
release any Grantor from any of its duties or obligations under any such Pledged Collateral
Agreement or other contracts, agreements and other documents, and (iii)&nbsp;the Secured Party shall not
have any obligation or liability under any such Pledged Collateral Agreements or other contracts,
agreements and other documents by reason of this Agreement, nor shall the Secured Party be
obligated to perform any of the obligations or duties of any Grantor thereunder or to take any
action to collect or enforce any Pledged Collateral Agreements or other such contract, agreement or
other document.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><U>Section&nbsp;5.04</U> <U>Registration Rights</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;If, in the opinion of the Secured Party, it is necessary or advisable to dispose of any
portion of the Pledged Collateral by registering such Pledged Collateral under the provisions of
the Securities Act of 1933 (the &#147;<U>Securities Act</U>&#148;), each relevant Grantor shall cause the
issuer thereof to do or cause to be done all acts as may be, in the opinion of the Secured Party,
necessary or advisable to register such Pledged Collateral or that portion thereof to be
disposed of under the provisions of the Securities Act, all as directed by the Secured Party
in conformity with the requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto and in compliance with the securities or
&#147;<U>Blue Sky</U>&#148; laws of any jurisdiction that the Secured Party shall designate.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;Each Grantor recognizes that the Secured Party may be unable to effect a public sale of
any Pledged Collateral by reason of certain prohibitions contained in the Securities Act and
applicable state or foreign securities laws or otherwise or may determine that a public sale is
impracticable, not desirable or not commercially reasonable and, accordingly, may resort to one or
more private sales thereof to a restricted group of purchasers that shall be obliged to agree,
among other things, to acquire such securities for their own account for investment and not with a
view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such
private sale may result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner. The Secured Party shall be under no obligation
to delay a sale of any Pledged Collateral for the period of time necessary to permit the issuer
thereof to register such securities for public sale under the Securities Act or under applicable
state securities laws even if such issuer would agree to do so.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;Each Grantor agrees to use its commercially reasonable efforts to do or cause to be done
all such other acts as may be necessary to make such sale or sales of any portion of the Pledged
Collateral pursuant to this <U>Section&nbsp;5.04</U> valid and binding and in compliance with all
applicable requirements of law. Each Grantor further agrees that a breach of any covenant
contained in this <U>Section&nbsp;5.04</U> will cause irreparable injury to the Secured Party, that the
Secured Party has no adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this <U>Section&nbsp;5.04</U> shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert any defense against
an action for specific performance of such covenants except for a defense that no Event of Default
has occurred under the Credit Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;5.05</U> <U>Deficiency</U>. The Grantors, jointly and severally, shall remain
liable for any deficiency if the proceeds of any sale or other disposition of any Collateral are
insufficient to pay the Secured Obligations and the fees and disbursements of any attorney employed
by the Secured Party to collect such deficiency.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE VI<BR>
SUBORDINATION
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;6.01</U> <U>Subordination</U>. Each Grantor agrees that all payments on account
of any indebtedness for borrowed money owing to such Grantor by any other Grantor
(&#147;<U>Intercompany Debt</U>&#148;) shall be subject, subordinate and junior, in right of payment and
exercise of remedies, to the indefeasible payment and satisfaction in full of all Secured
Obligations, and all Liens (if any) now or hereafter existing in favor of any Grantor in respect of
any Collateral shall be subject, subordinate and junior in all respects and at all times to the
Liens now or hereafter existing of the Secured Party therein. The Secured Party shall be deemed to
have acquired the Secured Obligations in reliance upon this <U>ARTICLE VI</U>.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;6.02</U> <U>Restrictions on Payment and Transfer</U>. Each Grantor agrees (i)
not to collect, or to receive payment upon, by setoff or in any other manner, all or any portion of
the Intercompany Debt owing to it, except as expressly permitted by the Credit Documents, and (ii)
not to sell, assign, transfer, pledge, or grant a Lien on any such Intercompany Debt.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE VII<BR>
THE ADMINISTRATIVE SECURED PARTY
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;7.01</U> <U>The Secured Party&#146;s Appointment as Attorney-in-Fact</U>. (a)&nbsp;Each
Grantor hereby irrevocably constitutes and appoints the Secured Party and its officers, directors,
employees, representatives and agents, with full power of substitution, during the occurrence and
continuance of an Event of Default, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of such Grantor or in
its own name, for the purpose of carrying out the terms of the Credit Documents, to take any
appropriate action and to execute any document or instrument that may be necessary or desirable to
accomplish the purposes of the Credit Documents, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Secured Party and its officers, directors, employees,
representatives and agents the power and right, on behalf of such Grantor, without notice to or
assent by such Grantor, to do any of the following when an Event of Default shall be continuing:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(i)&nbsp;in the name of such Grantor, in its own name or otherwise, take possession of
and indorse and collect any check, draft, note, acceptance or other instrument for the
payment of moneys due under any account or general intangible constituting Collateral or
with respect to any other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by the Secured
Party for the purpose of collecting any such moneys due under any account or general
intangible constituting Collateral or with respect to any other Collateral whenever
payable;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(ii)&nbsp;in the case of any Intellectual Property constituting Collateral owned by or
licensed to the Grantors, execute, deliver and have recorded any document that the
Secured Party may request to evidence, effect, publicize or record the Secured Party&#146;s
security interest in such Intellectual Property and the goodwill and general intangibles
of such Grantor relating thereto or represented thereby;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(iii)&nbsp;pay or discharge taxes and Liens levied or placed on or threatened against any
Collateral, effect any repair or pay any insurance called for by the terms of the Credit
Agreement (including all or any part of the premiums therefor and the costs thereof);
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(iv)&nbsp;execute, in connection with any sale provided for in <U>Sections&nbsp;Section
5.01</U> or <U>Section&nbsp;5.04</U>, any document to effect or otherwise necessary or
appropriate in relation to evidence the disposition of any Collateral; or
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 8%">(v) (A)&nbsp;direct any party liable for any payment under any Collateral to make payment
of any moneys due or to become due thereunder directly to the Secured Party or as the
Secured Party shall direct, (B)&nbsp;ask or demand for, and collect
and receive payment of and receipt for, any moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral, (C)&nbsp;sign and
indorse any invoice, freight or express bill, bill of lading, storage or warehouse
receipt, draft against debtors, assignment, verification, notice and other document in
connection with any Collateral, (D)&nbsp;commence and prosecute any suit, action or proceeding
at law or in equity in any court of competent jurisdiction to collect any Collateral and
to enforce any other right in respect of any Collateral, (E)&nbsp;defend any actions, suits,
proceedings, audits, claims, demands, orders or disputes brought against such Grantor
with respect to any Collateral, (F)&nbsp;settle, compromise or adjust any such actions, suits,
proceedings, audits, claims, demands, orders or disputes and, in connection therewith,
give such discharges or releases as the Secured Party may deem appropriate, (G)&nbsp;assign
any Intellectual Property constituting Collateral owned by the Grantors or any license or
sublicense held by any Grantor as licensee pertaining to Intellectual Property of any
other Person or other right (including franchises) constituting Collateral of the
Grantors throughout the world on such terms and conditions and in such manner as the
Secured Party shall in its sole discretion determine, including the execution and filing
of any document necessary to effectuate or record such assignment and (H)&nbsp;generally,
dispose of, grant a Lien on, make any Contractual Obligation with respect to and
otherwise deal with, any Collateral as fully and completely as though the Secured Party
were the absolute owner thereof for all purposes and do, at the Secured Party&#146;s option,
at any time or from time to time, all acts and things that the Secured Party deems
necessary to protect, preserve or realize upon any Collateral and the Secured Party&#146;s
security interests therein and to effect the intent of the Credit Documents, all as fully
and effectively as such Grantor might do.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;If any Grantor fails to perform or comply with any Contractual Obligation contained
herein, the Secured Party, at its option, but without any obligation so to do, may perform or
comply, or otherwise cause performance or compliance, with such Contractual Obligation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;The expenses of the Secured Party incurred in connection with actions undertaken as
provided in this <U>Section&nbsp;7.01</U>, together with interest thereon at a rate set forth in
<U>Section&nbsp;2.09</U> of the Credit Agreement, from the date of payment by the Secured Party to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Secured Party on
demand. None of the Secured Party, its respective affiliates, officers, directors, employees,
agents or representatives shall be responsible to any Grantor for any act or failure to act under
any power of attorney or otherwise, except in respect of damages attributable solely to their own
gross negligence or willful misconduct as finally determined by a court of competent jurisdiction,
nor for any punitive, exemplary, indirect or consequential damages.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue of this <U>Section&nbsp;7.01</U>. All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and
the security interests created hereby are released.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;7.02</U> <U>Authorization to File Financing Statements</U>. Each Grantor
authorizes the Secured Party and its officers, directors, employees, representatives and agents, at
any time and
from time to time, to file or record financing statements, amendments thereto, and other
filing or recording documents or instruments with respect to any Collateral in such form and in
such offices as the Secured Party reasonably determines appropriate to perfect the security
interests of the Secured Party under this Agreement, and such financing statements and amendments
may described the Collateral covered thereby (other than the Limited Collateral, which description
will be specifically drafted) as &#147;all assets of the debtor&#148;. A photographic or other reproduction
of this Agreement shall be sufficient as a financing statement or other filing or recording
document or instrument for filing or recording in any jurisdiction. Such Grantor also hereby
ratifies its authorization for the Secured Party to have filed any initial financing statement or
amendment thereto under the UCC (or other similar laws) in effect in any jurisdiction if filed
prior to the date hereof.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">ARTICLE VIII<BR>
MISCELLANEOUS
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;8.01</U> <U>Reinstatement</U>. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against any Grantor for
liquidation or reorganization, should any Grantor become insolvent or make an assignment for the
benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any
significant part of any Grantor&#146;s assets. Moreover, each Grantor agrees that, if any payment made
by any Grantor or other Person and applied to the Secured Obligations is at any time annulled,
avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise
required to be refunded or repaid, or the proceeds of any Collateral are required to be returned by
the Secured Party to such Grantor, its estate, trustee, receiver or any other party, including any
Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, any Lien or other Collateral securing such liability shall
be and remain in full force and effect, as fully as if such payment had never been made. If, prior
to any of the foregoing, (i)&nbsp;any Lien or other Collateral securing such Grantor&#146;s liability
hereunder shall have been released or terminated by virtue of the foregoing or (ii)&nbsp;any provision
of the Guaranty hereunder shall have been terminated, cancelled or surrendered, such Lien, other
Collateral or provision shall be reinstated in full force and effect and such prior release,
termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise
affect the obligations of any such Grantor in respect of any Lien or other Collateral securing such
obligation or the amount of such payment.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;8.02</U> <U>Independent Obligations</U>. The obligations of each Grantor
hereunder are independent of and separate from the Secured Obligations. If any Secured Obligation
is not paid when due, or upon any Event of Default, the Secured Party may, at its sole election,
proceed directly and at once, without notice, against any Grantor and any Collateral to collect and
recover the full amount of any Secured Obligation then due, without first proceeding against any
other Grantor or any other Collateral and without first joining any other Grantor in any
proceeding.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;8.03</U> <U>No Waiver by Course of Conduct</U>. The Secured Party shall not by
any act (except by a written instrument executed by it), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default. No failure to exercise, nor any delay in exercising, on the part of the Secured
Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege. A waiver by the
Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy that the Secured Party would otherwise have on any future occasion.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;8.04</U> <U>Amendments in Writing</U>. No amendment or waiver of any provision
of this Agreement and no consent to any departure by any party thereto shall be effective unless
the same shall be in writing and signed (i)&nbsp;in the case of an amendment, consent or waiver to cure
any ambiguity, omission, defect or inconsistency or granting a new Lien for the benefit of the
Secured Party or extending an existing Lien over additional property, by the Secured Party and the
Grantors or (ii)&nbsp;in the case of any other waiver or consent.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><U>Section&nbsp;8.05</U> <U>Additional Grantors; Additional Pledged Collateral</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;<U>Joinder Agreements</U>. If, after the date hereof, any of the Grantors create or
otherwise acquire any Subsidiary, such Grantor shall promptly cause such Subsidiary that is not a
Grantor to become a Grantor hereunder, such Subsidiary shall execute and deliver to the Secured
Party a Joinder Agreement substantially in the form of <U>Annex 2</U> and shall thereafter for all
purposes be a party hereto and have the same rights, benefits and obligations as a Grantor party
hereto on the Closing Date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;<U>Pledge Amendments</U>. To the extent any Grantor or Limited Pledgor acquires any
Pledged Collateral comprising a direct or indirect interest in any Equity Interests, such Grantor
or Limited Pledgor shall deliver a pledge amendment duly executed by the Grantor in substantially
the form of <U>Annex 1</U> (each, a &#147;<U>Pledge Amendment</U>&#148;) with respect to such Pledged
Collateral. Each Grantor and Limited Pledgor authorizes the Secured Party to attach each Pledge
Amendment to this Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;8.06</U> <U>Notices</U>. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given (a)&nbsp;on the day of
delivery if delivered in person, (b)&nbsp;on the day of delivery if delivered by facsimile upon
confirmation of receipt (<U>provided</U> that if delivery is completed after the close of
business, then the next Business Day), (c)&nbsp;on the first Business Day following the date of dispatch
if delivered using a next-day service by a nationally recognized express courier service, or (d)&nbsp;on
the earlier of confirmed receipt or the fifth Business Day following the date of mailing if
delivered by registered or certified mail, return receipt requested, postage prepaid. All notices
hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be
designated by notice given in accordance with this <U>Section&nbsp;8.06</U> by the party to receive
such notice:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">if to the Grantors:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 20%">c/o Palm Harbor Homes, Inc.<br>
15303 Dallas Parkway, Suite&nbsp;800<br>
Addison, Texas 75001-4600<br>
Attention: Larry H. Keener, Chairman, President &#038; CEO<br>
Facsimile: (972)&nbsp;764-9020
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">with a copy (which does not constitute notice) to:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 20%">Locke Lord Bissell &#038; Liddell LLP<br>
2200 Ross Avenue, Suite&nbsp;2200<br>
Dallas, Texas 75201<br>
Attention: Gina Betts<br>
Facsimile: (214)&nbsp;756-8515
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">If to Secured Party:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 20%">Fleetwood Homes, Inc.<br>
c/o Cavco Industries, Inc.<br>
1001 North Central Avenue, Suite&nbsp;800<br>
Phoenix, Arizona 85004-1935<br>
Attention: James P. Glew, General Counsel<br>
Facsimile: (602)&nbsp;256-6189
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 20%">and
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 20%">Robert F. Jordan<br>
Third Avenue Management, LLC<br>
622 Third Avenue<br>
32<SUP style="font-size: 85%; vertical-align: text-top">nd</SUP> Floor<br>
New York, NY 10017<br>
Facsimile: (212)&nbsp;735-0003
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">with a copy (which does not constitute notice) to:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 20%">Garth D. Stevens, Esq.<br>
Snell &#038; Wilmer L.L.P.<br>
One Arizona Center<br>
400 East Van Buren<br>
Phoenix, Arizona 85018<br>
Facsimile: (602)&nbsp;382-6070
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;8.07</U> <U>Benefit of Agreement</U>. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and assigns of the parties
hereto; <I>provided </I>that, except in connection with an assignment of the Credit Agreement by Grantors
expressly permitted by the terms of the Credit Agreement, the Grantors may not assign or transfer
any of its interests without prior written consent of the Secured Party.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;8.08</U> <U>Cumulative Remedies, Etc</U>. No failure or delay on the part of the
Secured Party in exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Secured Party and the Grantors shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder
or under any other Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and remedies provided
herein are cumulative and not exclusive of any rights or remedies which the Secured Party would
otherwise have. No notice to or demand on the Grantors in any case shall entitle the Grantors to
any other or further notice or demand in similar or other circumstances or constitute a waiver
of the rights of the Secured Party to any other or further action in any circumstances without
notice or demand.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;8.09</U> <U>Amendments, Waivers and Consents</U>. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Grantors therefrom shall in any
event be effective unless the same shall be in writing and signed by the Secured Party, and then
any such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;8.10</U> <U>Waiver</U>. Each party hereto may (a)&nbsp;extend the time for the
performance of any of the obligations or other acts of the other party hereto, (b)&nbsp;waive any
inaccuracies in the representations and warranties of the other party contained herein or in any
document delivered pursuant hereto, (c)&nbsp;waive compliance with any of the agreements of the other
party contained herein, or (d)&nbsp;waive satisfaction of any condition to its obligations hereunder.
Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by
the party to be bound thereby. No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any
party of any such right, power or privilege, nor any single or partial exercise of any such right,
power or privilege, preclude any further exercise thereof or the exercise of any other such right,
power or privilege. All remedies, rights, undertakings, obligations, and agreements contained
herein shall be cumulative and not mutually exclusive.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;8.11</U> <U>Governing Law</U>. This Agreement and all claims with respect thereto
shall be governed by and construed in accordance with the federal bankruptcy law, to the extent
applicable, and, where state law is implicated, the laws of the State of Delaware without regard to
any conflict of laws rules thereof that might indicate the application of the laws of any other
jurisdiction.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;8.12</U> <U>Consent to Jurisdiction; Service of Process; Waiver of Jury
Trial</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The parties hereto irrevocably and unconditionally consent to submit to the jurisdiction of
the Bankruptcy Court for any litigation arising out of or relating to this Agreement and the
transactions contemplated hereby (and agree not to commence any litigation relating hereto except
in the Bankruptcy Court).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Any and all service of process and any other notice in any such claim shall be effective
against any party if given personally or by registered or certified mail, return receipt requested,
or by any other means of mail that requires a signed receipt, postage prepaid, mailed to such party
as herein provided. Nothing herein contained shall be deemed to affect the right of any party to
serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed
against any other party in any other jurisdiction.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">If any claim is brought by any party hereto to enforce its rights or another party&#146;s
obligations under this Agreement or any other agreement, document or instrument to be delivered by
such party on the Closing Date in connection herewith, the substantially prevailing
party in such claim shall be entitled to recover its reasonable attorneys&#146; fees and expenses
and other costs incurred in such claim, in addition to any other relief to which it may be
entitled.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;8.13</U> <U>Interpretation; Headings</U>. All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.
All terms defined in this Agreement in their singular or plural forms have correlative meanings
when used herein in their plural or singular forms, respectively. Unless otherwise expressly
provided, the words &#147;include,&#148; &#147;includes&#148; and &#147;including&#148; do not limit the preceding words or terms
and shall be deemed to be followed by the words &#147;without limitation.&#148; All references herein to
&#147;Sections&#148; shall be deemed references to such parts of this Agreement, unless the context shall
otherwise require. All references herein to &#147;Schedules&#148; and &#147;Exhibits&#148; shall mean the Schedules
and Exhibits attached to this Agreement and forming a part hereof. The Section headings in this
Agreement are for reference only and shall not affect the interpretation of this Agreement. The
parties acknowledge and agree that (a)&nbsp;each party and its counsel reviewed and negotiated the terms
and provisions of this Agreement and have contributed to its revision, (b)&nbsp;the rule of construction
to the effect that any ambiguities are resolved against the drafting party shall not be employed in
the interpretation of this Agreement, and (c)&nbsp;the terms and provisions of this Agreement shall be
construed fairly as to all parties, regardless of which party was generally responsible for the
preparation of this Agreement. Dates and times set forth in this Agreement for the performance of
the parties&#146; respective obligations hereunder or for the exercise of their rights hereunder shall
be strictly construed, time being of the essence of this Agreement. If the date specified or
computed under this Agreement for the performance, delivery, completion or observance of a
covenant, agreement, obligation or notice by any party, or for the occurrence of any event provided
for herein, is a day other than a Business Day, then the date for such performance, delivery,
completion, observance or occurrence shall automatically be extended to the next Business Day
following such date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;8.14</U> <U>Severability of Provisions</U>. If any provision or any portion of
any provision of this Agreement shall be held invalid or unenforceable, the remaining portion of
such provision and the remaining provisions of this Agreement shall not be affected thereby. If
the application of any provision or any portion of any provision of this Agreement to any Person or
circumstance shall be held invalid or unenforceable, the application of such provision or portion
of such provision to Persons or circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>Section&nbsp;8.15</U> <U>Counterparts</U>. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts together shall constitute one and the same instrument. Each counterpart
may consist of a number of copies hereof each signed by less than all, but together signed by all,
of the parties hereto.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">&#091;SIGNATURE PAGES FOLLOW&#093;
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->26<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">IN WITNESS WHEREOF, each of the undersigned has caused this Security Agreement to be duly
executed and delivered as of the date first above written.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Palm Harbor Homes, Inc.</B>, a Florida corporation,
as a Grantor<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President and CEO&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Palm Harbor GenPar, LLC</B>, a Nevada limited liability company,
as a Grantor<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Palm Harbor Mfg., L.P.</B>, a Texas limited partnership, as a
Grantor<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Palm Harbor Real Estate, LLC</B>, a Texas limited liability
company, as a Grantor<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President of Sole Member&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Nationwide Homes, Inc.</B>, a Delaware corporation, as a Grantor<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Chairman&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">&#091;SIGNATURE PAGE TO SECURITY AGREEMENT&#093;
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">



<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Palm Harbor Albemarie, LLC</B>, a Delaware corporation, as a
Grantor<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="5" valign="top" align="left">ACKNOWLEDGED AND AGREED</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD colspan="5" valign="top" align="left">as of the date first above written:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD colspan="5" valign="top" align="left"><B>Fleetwood Homes, Inc.</B>, a Delaware</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD colspan="5" valign="top" align="left">corporation, as Secured Party</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">/s/ Joseph H. Stegmayer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Joseph H. Stegmayer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">&#091;SIGNATURE PAGE TO SECURITY AGREEMENT&#093;
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>c09057exv10w3.htm
<DESCRIPTION>EXHIBIT 10.3
<TEXT>
<HTML>
<HEAD>
<TITLE>Exhibit 10.3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><B>Exhibit&nbsp;10.3</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ASSET PURCHASE AGREEMENT</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>by and among</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Palm Harbor Homes, Inc., a Florida Corporation</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>and</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>The Other Sellers Listed on the Signature Pages Hereto</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>and</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Palm Harbor Homes, Inc., a Delaware Corporation</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Dated as of November&nbsp;29, 2010</B>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">



<DIV align="center" style="font-size: 10pt; margin-top: 10pt">TABLE OF CONTENTS
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Page</TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Article&nbsp;I PURCHASE AND SALE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.1 Assets to Be Transferred</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.2 Excluded Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.3 Assumed Liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.4 Cure Costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.5 Excluded Liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.6 Purchase Price</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.7 Closing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.8 Closing Deliveries by Sellers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.9 Closing Deliveries by Purchaser</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.10 Assignment and Assumption of the Assumed Contracts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.11 Base Price Adjustment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.12 Valuation and Treatment of Uncollectable Accounts Receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.13 Allocation of Proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Article&nbsp;II CONVEYANCE OF OWNED REAL PROPERTY</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.1 Real Property Escrow</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.2 Real Property Escrow Opening and Closing Dates</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.3 Seller&#146;s Real Property Transfer Documents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.4 Purchaser&#146;s Real Property Transfer Documents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.5 Recording of Title</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.6 Title Commitments and Surveys</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.7 Title Policies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.8 Real Property Escrow Cancellation Charges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.9 Closing Costs and Recording Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.10 Apportionments for Real Properties</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Article&nbsp;III REPRESENTATIONS AND WARRANTIES OF SELLERS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.1 Due Incorporation and Authority</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.2 No Conflicts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.3 Organizational Documents; Meeting Minutes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.4 Capitalization of Transferred Subsidiaries</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->-i-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">TABLE OF CONTENTS<br><br>(continued)
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Page</TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.5 Transferred Subsidiary Financial Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.6 Transferred Subsidiary Undisclosed Liabilities; Guaranties</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.7 Accounts Receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.8 Compliance with Laws</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.9 Permits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.10 Contracts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.11 Insurance Business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.12 Real Property</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.13 Environmental Matters</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.14 Intellectual Property</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.15 Litigation and Other Claims</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.16 Condition of Tangible Personal Property</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.17 Title to Assets; Possession</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.18 Sufficiency of Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.19 Inventory</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.20 Employees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.21 Employee Benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.22 Tax Matters</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.23 Affiliated Transactions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.24 Product Liability; Product Warranties</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.25 Insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.26 Absence of Certain Developments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.27 Prohibited Payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.28 Bank Accounts; Lock Boxes; Powers of Attorney</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.29 Brokers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.30 Disclaimer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Article&nbsp;IV REPRESENTATIONS AND WARRANTIES OF PURCHASER</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">4.1 Due Incorporation and Authority</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">4.2 No Conflicts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->-ii-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">TABLE OF CONTENTS<br><br>(continued)
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Page</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">4.3 Litigation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">4.4 Purchaser&#146;s Financial Capability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">4.5 Brokers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">4.6 Acknowledgement of Sellers&#146; Disclaimer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">4.7 Purchaser Disclaimer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Article&nbsp;V COVENANTS AND AGREEMENTS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.1 Operation of the Business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.2 Confidentiality</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.3 Expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.4 Access to Information; Preservation of Records; Litigation Support</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.5 Regulatory and Other Authorizations; Consents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.6 Further Actions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.7 Bankruptcy Court Approval</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.8 Books and Records</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.9 Tax Matters</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.10 Notification of Certain Matters</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.11 Knowledge of Breach</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.12 Employment Arrangements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.13 Insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.14 Licensed Computer Software; Consents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.15 Seller Release of Claims Against Transferred Subsidiaries</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5.16 Change of Purchaser&#146;s Name; Dissolution</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Article&nbsp;VI PURCHASER&#146;S CLOSING CONDITIONS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">6.1 Representations and Warranties; Covenants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">6.2 No Intervening Law</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">6.3 No Legal Proceedings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">6.4 Bankruptcy Filing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">6.5 Final Orders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">6.6 Regulatory Approvals</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->-iii-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">TABLE OF CONTENTS<br><br>(continued)
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Page</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">6.7 Closing Documents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">6.8 No Purchaser Objection to Initial Price Adjustment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">6.9 No Material Adverse Effect</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Article&nbsp;VII SELLERS&#146; CLOSING CONDITIONS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">7.1 Representations and Warranties; Covenants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">7.2 No Intervening Law</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">7.3 Sale Approval Order</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">7.4 No Legal Proceedings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">7.5 Bankruptcy Filing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">7.6 Final Orders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">7.7 Regulatory Approvals</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">7.8 Closing Documents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Article&nbsp;VIII TERMINATION OF AGREEMENT</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">8.1 Termination Prior to Closing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">8.2 Break-up Fee; Expense Reimbursement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">8.3 Survival After Termination</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Article&nbsp;IX MISCELLANEOUS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">9.1 Certain Definitions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">9.2 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">9.3 Notices</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">9.4 Entire Agreement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">9.5 Non-Survival of Representations, Warranties and Covenants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">9.6 Amendments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">9.7 Waiver</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">9.8 Governing Law</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">9.9 Binding Effect; Assignment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">9.10 Interpretation; Headings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">9.11 Severability of Provisions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">9.12 Counterparts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">9.13 No Third Party Beneficiaries</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->-iv-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">



<DIV align="center" style="font-size: 10pt; margin-top: 10pt">TABLE OF CONTENTS
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">SCHEDULES</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>


<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;1.1(c)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Tangible Personal Property</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;1.1(f)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Assumed Contracts</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;1.1(g)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Licensed Computer Software</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;1.1(i)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Intellectual Property</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;1.1(j)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Transferred Permits</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;1.1(l)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Telephone, Fax Numbers and Email Accounts</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;2.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Owned Real Property Subject to Title Commitments</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;2.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title Policy Amounts</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.4(a)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Capitalization of Transferred Subsidiaries</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Transferred Subsidiary Liabilities</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Accounts Receivable</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Compliance With Laws</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.9(a)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Permits</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.9(b)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Required Consents for Permit Transfers</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.10(a)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Seller and Transferred Subsidiary Contracts</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.10(b)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Transferred Subsidiary Contracts</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.11(e)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Insurance Subsidiary Liabilities</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.12(a)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Owned Real Properties</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.12(b)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Leased Real Properties</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.14(a)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Intellectual Property</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.14(b)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Intellectual Property Licenses, Sublicenses or other Arrangements</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.14(d)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Intellectual Property Defaults</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.15
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Litigation and Other Claims</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.17
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Assets Possessed by Third Parties</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.20(b)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee Disputes</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.20(c)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreements or Arrangements</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.20(d)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Severance-Related Benefits</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.21(a)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee Benefit Plan</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.21(g)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Contract Exceptions</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.22(c)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed Tax Returns</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.22(j)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Jurisdiction for Tax Returns</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.23
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Affiliated Transactions</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Product Compliance</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.25
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Insurance</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.26
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Absence of Certain Developments</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;3.28
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Powers of Attorney</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Schedule&nbsp;9.1(a)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Seller Plants</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->-v-<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">TABLE OF CONTENTS<br><br>(continued)
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">EXHIBITS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>


<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">EXHIBIT A
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Bill of Sale</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">EXHIBIT B
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Assignment and Assumption Agreement</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">EXHIBIT C
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Bidding Procedures Order</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">EXHIBIT D
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Sale Approval Order</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">EXHIBIT E
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Product Warranties</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->-vi-<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">



<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ASSET PURCHASE AGREEMENT</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">THIS ASSET PURCHASE AGREEMENT (this &#147;<U>Agreement</U>&#148;) is made and entered into as of
November&nbsp;29, 2010, by and among Palm Harbor Homes, Inc., a Florida corporation (&#147;<U>ParentCo</U>&#148;
), and each of its direct or indirect subsidiaries listed on the signature page(s) hereto (together
with ParentCo, each a &#147;<U>Seller</U>&#148; and collectively the &#147;<U>Sellers</U>&#148;), and Palm Harbor
Homes, Inc., a Delaware corporation (the &#147;<U>Purchaser</U>&#148;). Initially capitalized terms used in
this Agreement are defined or cross-referenced in <U>Section&nbsp;9.1</U>.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>RECITALS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, Sellers are engaged in the business of the design, production, marketing, sale and
servicing of manufactured and modular homes (the &#147;<U>Home Business</U>&#148;), the Insurance
Subsidiaries are engaged in the business of underwriting, selling and servicing property and
casualty insurance for manufactured and modular homes (the &#147;<U>Insurance Business</U>&#148;), and the
Finance Subsidiaries are engaged in the business of providing financing to retail customers for the
purchase of site built, manufactured and modular homes (the &#147;<U>Finance Business</U>&#148;, and
collectively with the Home Business and the Insurance Business, the &#147;<U>Business</U>&#148;); and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, ParentCo and certain of its Affiliates intend to file voluntary petitions for relief
under chapter 11 of title 11 of the United States Code (the &#147;<U>Bankruptcy Code</U>&#148;) with the
United States Bankruptcy Court for the District of Delaware (the &#147;<U>Bankruptcy Court</U>&#148;), with
ParentCo&#146;s bankruptcy case to be jointly administered with those of its Affiliates filing chapter
11 bankruptcy cases (ParentCo&#146;s chapter 11 case, together with all cases so jointly administered,
being collectively referred to herein as the &#147;<U>Bankruptcy Case</U>&#148;); and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, in connection with the Bankruptcy Case, Sellers and Purchaser&#146;s sole stockholder,
Fleetwood Homes, Inc., (&#147;<U>Fleetwood</U>&#148;), have entered into that certain Debtor In Possession
Revolving Credit Agreement dated concurrently herewith (the &#147;<U>DIP Facility</U>&#148;) for the
provision by Fleetwood to Sellers of up to $50,000,000 of debtor-in-possession debt financing,
which amount may be increased to $55,000,000 with Fleetwood&#146;s consent.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, Purchaser desires to purchase substantially all of the assets of Sellers and to
assume certain specified Liabilities of Sellers, and Sellers desire to sell such assets to
Purchaser and to have Purchaser assume such specified Liabilities, all on the terms and conditions
set forth in this Agreement and in accordance with sections 105, 363, 365 and other applicable
provisions of the Bankruptcy Code; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, the Transferred Assets shall be sold to Purchaser pursuant to an order of the
Bankruptcy Court approving and authorizing Sellers to enter into and consummate such sale under
section 363 of the Bankruptcy Code, and such sale shall include the assumption by Seller and
concurrent assignment to Purchaser of the Assumed Contracts under section 365 of the Bankruptcy
Code and the terms and conditions of this Agreement;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, Sellers desire to sell the Transferred Assets, including assuming and assigning the
Assumed Contracts to Purchaser, to further their reorganization efforts and to enable them to
consummate a plan of reorganization in the Bankruptcy Case; and
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">NOW, THEREFORE, in consideration of the foregoing and the representations, warranties and
covenants herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE I</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PURCHASE AND SALE</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.1 <U>Assets to Be Transferred</U>. On the terms and subject to the conditions set forth in
this Agreement, at the Closing, Sellers shall sell, assign, transfer, convey and deliver (or cause
to be sold, assigned, transferred, conveyed and delivered) to Purchaser (or its specified
designee(s)), and Purchaser (or its specified designee(s)) shall purchase, assume and accept from
Sellers, free and clear of any Encumbrance, other than Permitted Encumbrances, all right, title and
interest in and to all of Sellers&#146; properties, assets and rights, other than the Excluded Assets
(such rights, title and interests in and to such assets, properties and rights being collectively
referred to herein as the &#147;<U>Transferred Assets</U>&#148;), in accordance with, and with all of the
protections afforded by, sections 363 and 365 of the Bankruptcy Code, including the following:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;all outstanding shares of capital stock of Standard Casualty Co., a Texas corporation (the
&#147;<U>Standard Casualty Shares</U>&#148;), and Standard Insurance Agency, Inc., a Texas corporation (the
&#147;<U>Standard Insurance Shares</U>&#148;);
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;all outstanding shares of capital stock of CountryPlace Acceptance Corp., a Nevada
corporation (the &#147;<U>CountryPlace Shares</U>&#148;);
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;all machinery, tools, tooling, computer hardware and peripherals, telephony, office and
other equipment, parts, spare parts, vehicles, leasehold improvements, trade fixtures, signage,
furniture, furnishings, appliances, supplies and other tangible personal property, together with
any express or implied warranty (to the extent transferable) given by any manufacturer or seller of
any item or component part thereof and all maintenance records and other documents relating
thereto), wherever located, including those items listed on <U>Schedule&nbsp;1.1(c)</U>, except for any
such items on <U>Schedule&nbsp;1.1(c)</U> disposed of in the ordinary course of business prior to the
Closing Date (collectively, the &#147;<U>Tangible Personal Property</U>&#148;);
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;all raw materials, work-in-progress, finished goods and semi-finished goods, supplies,
packaging materials and other inventories, wherever located, used or produced by any Seller, except
for any such items disposed of in the ordinary course of business prior to the Closing Date (the
&#147;<U>Inventory</U>&#148;);
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;all Owned Real Properties, together in each case with the applicable Sellers&#146; right, title
and interest in and to all structures, facilities, fixtures and improvements located thereon and
all easements, licenses, rights and appurtenances relating to the foregoing;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(f)&nbsp;all of the applicable Sellers&#146; rights under the Contracts listed on <U>Schedule
1.1(f)</U>, to the extent assumed and assigned in accordance with <U>Section&nbsp;1.10</U>
(collectively, the &#147;<U>Assumed Contracts</U>&#148;);
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(g)&nbsp;subject to <U>Section&nbsp;5.14</U>, the licensed Computer Software listed or described on
<U>Schedule&nbsp;1.1(g)</U>, solely to the extent assignable;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(h)&nbsp;all Purchase Orders existing and outstanding on the Closing Date and any additional
Contracts entered into by any Seller in the Ordinary Course of Business after the date hereof, as
contemplated by clause (iii)&nbsp;of <U>Section&nbsp;5.1(a)</U>;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(i)&nbsp;all Intellectual Property, including those items listed on Schedule<U> 1.1(i)</U>,
together with all income, royalties, damages and payments due or payable to any Seller or Affiliate
thereof as of the Closing Date or thereafter (including damages and payments for past, present or
future infringements or misappropriations thereof, the right to sue and recover for past
infringements or misappropriations thereof, and any and all corresponding rights that, now or
hereafter, may be secured throughout the world) and all copies and tangible embodiments of any such
Intellectual Property in Sellers&#146; possession or control (collectively, the &#147;<U>Transferred
IP</U>&#148;);
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(j)&nbsp;all Permits and all pending applications therefor or renewals thereof, including those
listed on <U>Schedule&nbsp;1.1(j)</U>, in each case to the extent assignable or otherwise transferable
to Purchaser in accordance with their respective terms or under applicable Law (the
&#147;<U>Transferred Permits</U>&#148;);
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(k)&nbsp;originals or copies of all data, databases and records (whether in print, electronic or
other format) related to the operation of the Business or the ownership or use of the Transferred
Assets, including all books of account, general, financial, accounting, engineering and legal
records, unit and house files, invoices, customers&#146; and suppliers&#146; lists and records (including
account histories), mailing lists, e-mail address lists, other distribution lists, inventory and
supply managements records, engineering designs and related approvals of Governmental Bodies,
self-regulatory organizations, and trade associations, billing records, sales and promotional
literature, creative materials, research and development reports and records, production reports
and records, employee health and safety records, reports and logs for the Real Properties
(including OSHA reports and logs), service and warranty records, product recall or withdrawal
records, equipment logs, operating guides and manuals, correspondence files (including
correspondence with customers, suppliers, landlords, tenants, licensors, licensees, Governmental
Bodies and legal, accounting and other professional advisors (except, in the case of legal
correspondence, any correspondence constituting privileged communication between any Seller and its
legal counsel)), Transferred Permits, Purchase Orders (both those included in the Transferred
Assets and, to the extent retained by any Seller, historic Purchase Orders) and Assumed Contracts,
but excluding any records of Sellers described in <U>Section&nbsp;1.2(f)</U> (the &#147;<U>Books and
Records</U>&#148;);
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(l)&nbsp;the telephone (landline and mobile) and facsimile numbers and email accounts listed on
<U>Schedule&nbsp;1.1(l)</U>;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(m)&nbsp;all credits, rights to deposits paid by any Seller (including security or other deposits
under any Real Property Lease included in the Assumed Contracts), deposits paid by any customer or
other Person to any Seller, prepaid expenses, claims for refunds, investments and other similar
financial assets;
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(n)&nbsp;all Accounts Receivable of Sellers, and all proceeds of the foregoing;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(o)&nbsp;going concern value and goodwill with respect to the Transferred Assets and the Home
Business;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(p)&nbsp;all insurance policies of Sellers, and all Claims, proceeds and benefits due thereunder;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(q)&nbsp;all interests in and rights to any refund of Taxes and surviving federal and state loss
carrybacks and carryforwards; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(r)&nbsp;all Claims of Sellers (or any of them) against any Person relating to the Transferred
Assets, the Assumed Liabilities or the Business;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.2 <U>Excluded Assets</U>. Sellers are not selling, and Purchaser is not purchasing, any
assets other than those specifically set forth in <U>Section&nbsp;1.1</U>, and without limiting the
generality of the foregoing, the term &#147;Transferred Assets&#148; shall expressly exclude the following
assets of Sellers (including all of Sellers&#146; right, title and interest therein and thereto), all of
which shall be retained by the applicable Sellers (collectively, the &#147;<U>Excluded Assets</U>&#148;):
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;except as provided in <U>Section&nbsp;1.1(m)</U>, all cash, bank deposits and cash
equivalents;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(b)&nbsp;all of Sellers&#146; bank accounts;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(c)&nbsp;all of the Contracts of any Seller, except the Assumed Contracts;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(d)&nbsp;except as provided in <U>Section&nbsp;1.1(r)</U>, all Pre-Closing Claims;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;all rights of Sellers under this Agreement and any other Closing document entered into or
executed by Sellers (or any of them) in connection with the transactions contemplated hereby;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(f)&nbsp;all corporate books and records, Tax Returns, board minutes and organizational documents
of Sellers, and any other records that any Seller is required to retain by Law (except that copies
of such retained records shall be provided to Purchaser at Closing if such records would otherwise
constitute a Transferred Asset pursuant to <U>Section&nbsp;1.1(k))</U>, all information held by any
Seller prohibited from being transferred or disclosed pursuant to applicable Law, all non-public
information primarily related to or prepared in connection with the Bankruptcy Case, and Sellers&#146;
books and records relating to any Excluded Assets;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(g)&nbsp;all of the rights and claims of Sellers to avoidance actions available to any Seller under
chapter 5 of the Bankruptcy Code, of whatever kind or nature, including avoidance actions under
sections 544, 545, 547, 548, 549 and 553 of the Bankruptcy Code, and any related claims and actions
arising under such sections by operation of Law or otherwise, including any and all proceeds of the
foregoing;
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(h)&nbsp;legal correspondence constituting privileged communication between any Seller and its
legal counsel; and
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(i)&nbsp;the outstanding stock of, or other outstanding equity interests in, any Seller.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.3 <U>Assumed Liabilities</U>. At the Closing, Purchaser shall assume and in due course
pay, discharge, perform or otherwise fully satisfy in accordance with their respective terms only
the following Liabilities of Sellers (the &#147;<U>Assumed Liabilities</U>&#148;):
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;all Liabilities of Sellers under the Assumed Contracts, the other Contracts referred to in
<U>Section&nbsp;1.1(h)</U> and the Transferred Permits (to the extent assigned hereunder) to be
performed on or after, or in respect of periods following, the Closing Date; <U>provided</U>,
<U>however</U>, that such Liabilities shall not include any Liability based on or relating to any
Seller&#146;s breach or violation of any Assumed Contract, any Contract referred to in <U>Section
1.1(h)</U> or any Transferred Permit arising, occurring or existing before the Closing Date, other
than the Cure Costs that Purchaser agrees to pay pursuant to <U>Section&nbsp;1.4</U>;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(b)&nbsp;the Assumed Warranty Liabilities; and
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(c)&nbsp;the COBRA obligations that Purchaser agrees to assume pursuant to <U>Section&nbsp;5.12(f)</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.4 <U>Cure Costs</U>. At Closing and pursuant to section 365 of the Bankruptcy Code,
Sellers shall assume and assign to Purchaser the Assumed Contracts. The amounts, as determined by
the Bankruptcy Court, if any (the &#147;<U>Cure Costs</U>&#148;), necessary to cure all defaults of any
Seller, if any, and to pay all actual or pecuniary losses that have resulted from such defaults
under the Assumed Contracts, shall be paid by Purchaser, on or before Closing, and not by Sellers
and Sellers shall have no Liability therefor.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.5 <U>Excluded Liabilities</U>. Notwithstanding anything in this Agreement to the contrary,
the parties expressly acknowledge and agree that Purchaser shall not assume or be liable or
responsible for any Liability of any Seller other than the Assumed Liabilities, except as required
by applicable Law and not discharged in the Bankruptcy Case (such Liabilities being collectively
referred to herein as the &#147;<U>Excluded Liabilities</U>&#148;). Without limiting the generality of the
foregoing, the Excluded Liabilities shall include:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;any Liability under any Assumed Contract or any Contract referred to in <U>Section
1.1(h)</U> that arises from or relates to (i)&nbsp;any breach or violation of any Seller that occurred
on or before the Closing Date, or (ii)&nbsp;any outstanding obligation of any Seller that was required
to have been satisfied or performed by such Seller on or before the Closing Date, except in either
such case for Purchaser&#146;s obligation to pay Cure Costs;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;any Liability under any Contract that is not an Assumed Contract or Contract referred to
in <U>Section&nbsp;1.1(h)</U>;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;any account payable or other amount payable of any Seller;
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;any Liability of any Seller under any note, loan, borrowing arrangement, debt financing,
credit facility, capital lease (except as included in the Assumed Contracts), financial or
performance guaranty, surety, indemnity or bond, or any security interest related to any of the
foregoing;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;except as expressly contemplated by this Agreement, any Liability for Taxes payable by or
assessed against any Seller under applicable Law;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(f)&nbsp;any Environmental, Health and Safety Liability, including arising out of or relating to
Sellers&#146; ownership and operation of the Home Business on or prior to the Closing Date or the
leasing, ownership or operation of any asset (including any Real Property) by any Seller, whether
or not included in the Transferred Assets, including any Release (existing as of the Closing Date)
of any Hazardous Material;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(g)&nbsp;any Liability arising out of or relating to (i)&nbsp;the employment or performance of services,
or termination of employment or services by any Seller of any current or former employee or
director on or before the Closing Date (including, without limitation, wages or other compensation,
and plans, agreements or arrangements providing for bonus, incentive compensation, vacation, sick
days, personal days, severance benefits or other employee benefits), or (ii)&nbsp;workers&#146; compensation
Claims against any Seller, irrespective of whether such Claims are made prior to, on or after the
Closing Date, regardless, in either of the foregoing clauses (i)&nbsp;or (ii), of whether such employee
involved with such grievance is a Transferred Seller Employee;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(h)&nbsp;any Liability of any Seller with respect to any of its employees or directors or any
former employees or directors, including any Liability arising under any Benefit Plan or any other
employee program or arrangement at any time maintained, sponsored or contributed to by any of
Sellers or any predecessor or Affiliate thereof or any ERISA Affiliate, or with respect to which
any of Sellers or any predecessor or Affiliate thereof or any ERISA Affiliate has any Liability;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(i)&nbsp;except for the Liabilities specifically referred to in <U>Section&nbsp;1.3(b)</U>, any
Liability relating to or arising from any Seller&#146;s manufacture or sale of any product or
performance of any service, including any Liability for death or injury to any Person or damage to
property;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(j)&nbsp;any Liability of any Seller to defend, indemnify, hold harmless or reimburse any Person,
including any present or former employee, director, customer, vendor, contractor or agent of any
Seller, except to the extent such Liability is expressly included in an Assumed Contract, and then
only to the extent that such Liability arises in connection with acts, omissions, facts, events or
circumstances first existing, accruing or arising on or after the Closing Date and not based on any
breach or violation by any Seller prior to the Closing Date;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(k)&nbsp;any Liability of any Seller arising out of or relating to (i)&nbsp;any past Claim or any Claim
underway or pending as of the Closing Date by or against any Seller, or (ii)&nbsp;any Claim commenced on
or after the Closing Date that relates to any act, omission, occurrence or event happening, or any
fact or circumstance existing, before the Closing Date, in each case to
the extent that the Liability for such act, omission, occurrence, event, fact or circumstance
is not expressly included in the Assumed Liabilities;
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(l)&nbsp;any Liability relating to any amount required to be paid or any action required to be
performed by any Seller hereunder; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(m)&nbsp;any Liability of any Seller arising out of or resulting from non-compliance of such Seller
with any applicable Law (including, for the avoidance of doubt, any requirements and provisions of
any &#147;bulk-transfer&#148; Laws of any jurisdiction that may otherwise be applicable with respect to the
sale of any or all of the Transferred Assets to Purchaser; provided, however, that pursuant to
section 363(f) of the Bankruptcy Code, the transfer of the Transferred Assets shall be free and
clear of any Encumbrance arising under any bulk transfer laws, and the parties shall take such
steps as may be necessary or appropriate to so provide in the Sale Approval Order).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.6 <U>Purchase Price</U>. Subject to the terms and conditions hereof, in full consideration
of the sale and purchase of the Transferred Assets and Sellers&#146; other covenants and obligations
hereunder, at the Closing, Purchaser shall (i)&nbsp;assume the Assumed Warranty Liabilities, which the
parties agree will be assigned an aggregate value of $6,500,000, the COBRA Liabilities referred to
in <U>Section&nbsp;5.12(f)</U>, which the parties agree will be assigned an aggregate value of
$1,000,000, and the other Assumed Liabilities, and (ii)&nbsp;pay to ParentCo, on behalf of and for the
account of Sellers, the greater of (A) $50,000,000 or (B)&nbsp;an amount equal to the outstanding
balance (including accrued and unpaid interest) under the DIP Facility as of the time of Closing
(the &#147;<U>Base Price</U>&#148;), <U>minus</U> the Accounts Receivable and Inventory Value Shortfall (if
any), and <U>minus</U> the amount of any Unauthorized Indebtedness, in each case as determined
pursuant to <U>Section&nbsp;1.11</U> (collectively, the &#147;<U>Purchase Price</U>&#148;). At the Closing,
Purchaser shall pay the Base Price, as adjusted downwards (as applicable) by the Initial Price
Adjustment referred to in <U>Section&nbsp;1.11(a)</U> and by the Closing Apportionment payable to or by
Sellers (as determined in accordance with <U>Section&nbsp;2.10)</U> (the &#147;<U>Closing Payment</U>&#148;) as
follows:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;first, to the extent of Purchaser&#146;s interest as assignee of Fleetwood under the DIP
Facility, by way of credit and set-off against the outstanding balance of the DIP Facility as of
the time of Closing (provided, that if the Closing Payment is less than the total outstanding
balance of the DIP Facility as of the time of Closing, such outstanding balance and any subsequent
interest accruals thereon shall remain payable by Sellers in accordance with the provisions of the
DIP Facility); and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;second, to the extent the Closing Payment exceeds the outstanding balance of the DIP
Facility as of the time of Closing, by wire transfer of immediately available funds to a bank
account designated by written notice from ParentCo to Purchaser, such notice to be given at least
two (2)&nbsp;Business Days prior to the Closing Date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.7 <U>Closing</U>. Subject to the terms and conditions of this Agreement and the Sale
Approval Order, the sale and purchase of the Transferred Assets and the assignment and assumption
of the Assumed Liabilities contemplated by this Agreement shall take place at a closing (the
&#147;<U>Closing</U>&#148;) to be held at the offices of ParentCo, 15303 Dallas Parkway, Suite&nbsp;800, Addison,
Texas 75001 at 9:00 a.m., Central Standard Time, on the first (1st) Business Day
following the satisfaction or waiver of all conditions to the obligations of the parties set
forth in <U>Article&nbsp;VI</U> and <U>Article&nbsp;VII</U> (other than those conditions which by their
nature can only be satisfied at the Closing), or at such other place or at such other time or on
such other date as ParentCo and Purchaser may mutually agree upon in writing (the day on which the
Closing takes place being the &#147;<U>Closing Date</U>&#148;).
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.8 <U>Closing Deliveries by Sellers</U>. At the Closing, unless otherwise waived in writing
by Purchaser, Sellers shall deliver or cause to be delivered to Purchaser:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(a)&nbsp;a duly executed Sellers&#146; Certificate pursuant to <U>Section&nbsp;6.1</U>;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(b)&nbsp;a duly executed Bill of Sale substantially in the form of <U>Exhibit&nbsp;A</U> hereto;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;a duly executed counterpart to the Assignment and Assumption Agreement substantially in
the form of <U>Exhibit&nbsp;B</U> hereto;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;duly executed assignments of Sellers&#146; Marks and other Intellectual Property in form and
substance reasonably acceptable to Purchaser;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;the stock certificates representing the Standard Casualty Shares and the Standard
Insurance Shares, each with a duly executed stock power, in form and substance reasonably
satisfactory to Purchaser, for the assignment and transfer of same to Purchaser;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(f)&nbsp;the stock certificate(s) representing all of the outstanding shares of Palm Harbor Ins.
Agency of Texas;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(g)&nbsp;a receipt, in form and substance reasonably satisfactory to Purchaser, for the payment of
the Purchase Price;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(h)&nbsp;a Tax clearance certificate (or equivalent document) from each state in respect of which
any Transferred Subsidiary is liable for the payment of Taxes;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(i)&nbsp;the corporate minute books or equivalent record books (including all contents thereof) for
each Transferred Subsidiary; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(j)&nbsp;such other duly executed bills of sale, assignments and other instruments of assignment,
transfer or conveyance, in form and substance reasonably satisfactory to Purchaser, as Purchaser
may reasonably request or as may be otherwise necessary or desirable to evidence and effect the
sale, assignment, transfer, conveyance and delivery of the Transferred Assets to Purchaser and to
put Purchaser in actual possession or control of the Transferred Assets.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.9 <U>Closing Deliveries by Purchaser</U>. At the Closing, unless otherwise waived in
writing by ParentCo, in addition to the Closing Payment to be made in accordance with
<U>Section&nbsp;1.6</U>, Purchaser shall deliver or cause to be delivered to ParentCo or the other
applicable Persons specified herein:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;a duly executed Purchaser&#146;s Certificate pursuant to <U>Section&nbsp;7.1</U>;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;a duly executed counterpart to the Bill of Sale substantially in the form of <U>Exhibit
A</U> hereto;
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;a duly executed counterpart to the Assignment and Assumption Agreement substantially in
the form of <U>Exhibit&nbsp;B </U>hereto; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;such other duly executed documents and instruments, in form and substance reasonably
satisfactory to ParentCo, as ParentCo may reasonably request or as may be otherwise necessary or
desirable to evidence and effect the assumption by Purchaser of the Assumed Liabilities.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.10 <U>Assignment and Assumption of the Assumed Contracts</U>. Without limiting
<U>Sections&nbsp;1.1(a)</U> and <U>1.3(a)</U>, (i)&nbsp;at the Closing, but effective as of the Effective
Time, the applicable Seller(s) shall assume pursuant to section 365(a) of the Bankruptcy Code and
concurrently assign to Purchaser pursuant to sections 363(b), (f)&nbsp;and (m)&nbsp;and section 365(f) of the
Bankruptcy Code each of the Assumed Contracts that may be assumed pursuant to the Sale Approval
Order, and (ii)&nbsp;to the extent contemplated in <U>Section&nbsp;1.3(a)</U> (and subject to <U>Section
1.5(a)</U>), Purchaser shall assume and thereafter in due course pay, discharge, perform and
satisfy in accordance with their respective terms all of the obligations under such Assumed
Contracts pursuant to section 365 of the Bankruptcy Code from and after the Closing, and shall pay
the Cure Costs so that all applicable Assumed Contracts may be assigned to Purchaser pursuant to
section 365 of the Bankruptcy Code.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.11 <U>Base Price Adjustment</U>. The adjustment to the Base Price with respect to the
valuation of the Inventory and the Accounts Receivable of Sellers and any Unauthorized Indebtedness
shall be determined in accordance with the following provisions:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;At least five (5)&nbsp;Business Days prior to the Closing Date, ParentCo shall deliver to
Purchaser a report setting forth (i)&nbsp;a good faith estimate as of the Effective Time of the
Inventory and the Accounts Receivable of Sellers and any Unauthorized Indebtedness, based on
current information then reasonably available to Sellers and broken down on a line-item basis,
together with reasonable documentation in support of such estimate (including at a minimum a
complete aging report of all Accounts Receivable of Sellers and a report of all Inventory, with
such Accounts Receivable and Inventory reports being the most recently available accounts
receivable report and inventory report before such date of delivery by ParentCo) and, based
thereon, any downwards adjustment to be made to the Base Price for purposes of determining the
Closing Payment as contemplated by <U>Section&nbsp;1.6</U> (the &#147;<U>Initial Price Adjustment</U>&#148;).
The Initial Price Adjustment (or ParentCo&#146;s determination that no Initial Price Adjustment is
required) shall be subject to the review and approval of Purchaser upon receipt, acting reasonably
and in good faith (which approval shall be for Closing purposes only and shall not constitute
Purchaser&#146;s acceptance of the Initial Price Adjustment (or ParentCo&#146;s determination that no Initial
Price Adjustment is required) as definitive), and Purchaser shall have two (2)&nbsp;Business Days to
submit to ParentCo any objection to the Initial Price Adjustment (or ParentCo&#146;s determination that
no Initial Price Adjustment is required), provided that such objection must be submitted in writing
setting forth in reasonable detail Purchaser&#146;s objection; and provided further that such objection
may only be based on (i)&nbsp;the failure of ParentCo to provide adequate back-up information or
documentation for the Initial Price Adjustment, (ii)&nbsp;a deviation from available financial
information on which the Initial Price Adjustment is to be based, (iii)&nbsp;the failure of the
Initial Price Adjustment to be calculated in accordance with the requirements of this Agreement,
(iv)&nbsp;the failure of the Initial Price Adjustment to be calculated in accordance with GAAP (except
as such failure is expressly permitted or required pursuant to this Agreement), or (v)&nbsp;calculation
error. During such two (2)-day period, ParentCo shall provide Purchaser and its Representatives
with access to the relevant books, records and personnel of Sellers and the Transferred
Subsidiaries reasonably requested by Purchaser to assist Purchaser in its review of the Initial
Price Adjustment.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;Within ninety (90)&nbsp;days after the Closing Date, Purchaser shall deliver to ParentCo a
report showing (i)&nbsp;Purchaser&#146;s determination, as of the Effective Time, of the Inventory and
Accounts Receivable of Sellers and any Unauthorized Indebtedness existing as of the Effective Time,
which report shall be in reasonable detail and broken down on a line-item basis, together with
reasonable documentation in support of such determination (including at a minimum a complete aging
report of all Accounts Receivable of Sellers and a report of all Inventory, with such Accounts
Receivable and Inventory reports having been prepared as of the Effective Time) and, based thereon,
any downwards adjustment to be made to the Base Price for purposes of determining the Purchase
Price (the &#147;<U>Post-Closing Price Adjustment</U>&#148;). ParentCo shall have ten (10)&nbsp;days after its
receipt of the Post-Closing Price Adjustment to give written notice (an &#147;<U>Objection Notice</U>&#148;)
to Purchaser of any objection to the Post-Closing Price Adjustment. Any Objection Notice must
specify in reasonable detail the objections of ParentCo and may only be based on (i)&nbsp;the failure of
Purchaser to provide adequate back-up information or documentation for the Post-Closing Price
Adjustment, (ii)&nbsp;a deviation from available financial information on which the Post-Closing Price
Adjustment is to be based, (iii)&nbsp;the failure of the Post-Closing Price Adjustment to be calculated
in accordance with the requirements of this Agreement, (iv)&nbsp;the failure of the Post-Closing Price
Adjustment to be calculated in accordance with GAAP (except as such failure is expressly permitted
or required pursuant to this Agreement), or (v)&nbsp;calculation error. During such ten (10)-day
period, Purchaser shall provide ParentCo and its Representatives with access to the relevant books,
records and personnel of Purchaser reasonably requested by ParentCo to assist ParentCo in its
review of the Post-Closing Price Adjustment.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;If, within the ten (10)-day period referred to in <U>Section&nbsp;1.11(b)</U>, an Objection
Notice that meets the requirements of <U>Section&nbsp;1.11(b)</U> is delivered by ParentCo to
Purchaser, Representatives of ParentCo and Purchaser shall confer in good faith for up to ten (10)
days after the date of Purchaser&#146;s receipt of the Objection Notice to resolve the objections raised
by ParentCo. If such Representatives are unable to resolve all such objections within such period,
then at any time thereafter, ParentCo or Purchaser may require that the objection raised by
ParentCo be immediately submitted to the Bankruptcy Court for resolution, whereupon the parties
shall cooperate reasonably and in good faith to establish fast-track procedures for presenting
their respective positions to the Bankruptcy Court. Any determination of the Bankruptcy Court with
respect to the matters that are the subject of ParentCo&#146;s objection shall be final, binding and
conclusive on the parties hereto.
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;Upon the first to occur of, (i)&nbsp;the written agreement between ParentCo and Purchaser as to
the Post-Closing Price Adjustment, including any amendment to be made thereto, (ii)&nbsp;the passage of
the thirty (30)-day (or more, if mutually agreed upon by ParentCo and
Purchaser) period after ParentCo has received the Post-Closing Price Adjustment without
ParentCo&#146;s delivery of an Objection Notice (in which case ParentCo shall be deemed to have accepted
and agreed to the Post-Closing Price Adjustment), or (iii)&nbsp;the determination of the Bankruptcy
Court of all matters that are the subject of an Objection Notice, the final adjustment to be made
to the Base Price based on the value, as of the Effective Time, of the Inventory and Accounts
Receivable of Sellers and any Unauthorized Indebtedness, as finally determined pursuant to one or
more of the foregoing (the &#147;<U>Final Price Adjustment</U>&#148;) shall be final, binding and conclusive
on the parties hereto.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;If the amount of the Final Price Adjustment is less than the amount of the Initial Price
Adjustment, then, within five (5)&nbsp;Business Days after the determination of the Final Price
Adjustment Amount, Purchaser shall pay to ParentCo, on behalf of Sellers, the amount of such excess
by wire transfer of immediately available funds to the bank account referred to in <U>Section
1.6(b)</U>; <U>provided</U>, <U>however</U>, that in no event shall Purchaser be required to pay
more than the Base Price as the total Purchase Price due to Sellers. If the amount of the Final
Price Adjustment Amount exceeds the amount of the Initial Price Adjustment, then, within five (5)
Business Days after the determination of the Final Price Adjustment, ParentCo, on behalf of
Sellers, shall refund to Purchaser the amount of such shortfall by wire transfer of immediately
available funds to a bank account specified by Purchaser in writing to ParentCo.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">1.12 <U>Valuation and Treatment of Uncollectable Accounts Receivable</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;For purposes of calculating the Initial Price Adjustment, the Post-Closing Price
Adjustment and the Final Price Adjustment, and any adjustment to the Base Price as contemplated in
<U>Section&nbsp;1.11</U>, the Accounts Receivable of Sellers shall be valued by the parties in the
following manner:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(i)&nbsp;subject to <U>Section&nbsp;1.12(a)(ii)</U>, one hundred percent (100%) of the amount of any
Account Receivable shall be counted if, as of the Effective Time, such Account Receivable is aged
ninety (90)&nbsp;or less days from the earlier of (A)&nbsp;the date of issuance of the statement or invoice
therefor or (B)&nbsp;the date on which such Account Receivable first became payable; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(ii)&nbsp;no value shall be given to any Account Receivable that, as of the Effective Time, is aged
more than ninety (90)&nbsp;days from the earlier of (A)&nbsp;the date of issuance of the statement or invoice
therefor or (B)&nbsp;the date on which such Account Receivable first became payable, or any Account
Receivable that is owing by an account debtor that is bankrupt, in receivership or insolvent or has
ceased to conduct business or is disputing such Account Receivable.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;If, within thirty (30)&nbsp;days after the Closing Date, Purchaser has been unable to collect
any Seller Account Receivable (or portion thereof) referred to in <U>Section&nbsp;1.12(a)(i)</U>,
Purchaser may, prior to or concurrently with its delivery to ParentCo of the Post-Closing Price
Adjustment, assign such uncollected Account Receivable (or portion thereof) back to the applicable
Seller. The stated amount of any such uncollectible Account Receivable, to the extent included in
the calculation of the Initial Price Adjustment, shall not be counted in the
current assets included in the calculation of the Post-Closing Price Adjustment and the Final
Price Adjustment.
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.13 <U>Allocation of Proceeds</U>. Purchaser shall within one hundred twenty (120)&nbsp;days
after the Closing Date prepare and deliver to ParentCo a schedule reasonably allocating the
Purchase Price among the Transferred Assets in accordance with Section&nbsp;1060 of the Tax Code (such
schedule, the &#147;<U>Allocation</U>&#148;). Purchaser shall permit ParentCo to review and provide
comments on the Allocation and shall consult with ParentCo with respect to any such comments.
However, the Allocation shall be finally determined in Purchaser&#146;s sole discretion. Purchaser and
Sellers shall report and file all Tax Returns (including amended Tax Returns and claims for refund)
in all respects and for all purposes in a manner consistent with the Allocation. Neither Purchaser
nor Sellers shall take any position contrary thereto or inconsistent therewith (including in any
audits or examinations by any Governmental Body or any other proceeding) unless otherwise required
by applicable law; <U>provided</U>, <U>however</U>, that (i)&nbsp;each party to this Agreement shall
notify the other parties in the event that any Governmental Body takes or proposes to take a
position for Tax purposes that is inconsistent with such Allocation and (ii)&nbsp;ParentCo and its
Affiliates shall not be bound by the Allocation for purposes of allocating the Purchase Price in
connection with proceeds of the sale of the Transferred Assets and any claims related thereto under
the Bankruptcy Case. Purchaser and Sellers shall cooperate in the filing of any forms (including
Form&nbsp;8594 under Section&nbsp;1060 of the Tax Code) with respect to the Allocation.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE II</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>CONVEYANCE OF OWNED REAL PROPERTY</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In addition to the Closing procedures and documentation referred to in <U>Sections&nbsp;1.7</U>
through <U>1.10</U>, the following procedures and requirements set forth in this <U>Section&nbsp;2</U>
shall apply to Sellers&#146; conveyance of the Owned Real Properties to Purchaser on the Closing Date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">2.1 <U>Real Property Escrow</U>. Immediately after the Bankruptcy Court&#146;s entry of the Sale
Approval Order as a Final Order, or at such earlier time as ParentCo and Purchaser may agree,
Sellers and Purchaser shall establish an escrow (the &#147;<U>Real Property Escrow</U>&#148;) for the sale
and purchase of the Owned Real Properties pursuant to this Agreement with the Title Company. The
provisions of this <U>Article&nbsp;II</U> shall constitute escrow instructions to the Title Company,
and a copy of this Agreement shall be deposited with the Title Company for such purpose.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">2.2 <U>Real Property Escrow Opening and Closing Dates</U>. The Real Property Escrow shall be
deemed open on the date on which a fully executed original copy of this Agreement shall have been
delivered to the Title Company. The Closing of the sale and purchase of the Owned Real Properties
and the Real Property Escrow shall occur on the Closing Date and following the delivery to the
Title Company of a copy of the Sale Approval Order as a Final Order. At the Closing, the
applicable Sellers shall transfer fee title to, and possession and control of, the Owned Real
Properties to Purchaser, or its specified designee(s), free and clear of all Encumbrances, other
than Permitted Encumbrances.
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">2.3 <U>Seller&#146;s Real Property Transfer Documents</U>. Subject to the Sale Approval Order
becoming a Final Order, on or before the Closing Date, Sellers shall deposit into the Real
Property Escrow for delivery to Purchaser at the Closing the following documents and
instruments, each of which shall have been duly executed and, where appropriate, acknowledged:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;an individual closing statement for each Owned Real Property, prepared by the Title
Company and approved by the parties hereto (collectively, the &#147;<U>Closing Statements</U>&#148;);
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;a bargain and sale deed for Owned Real Property in Oregon, and special warranty deeds (or
state law equivalent) for each other Owned Real Property (collectively, the &#147;<U>Deeds</U>&#148;) in
form and substance satisfactory to Purchaser (acting reasonably) for conveyance by the applicable
Seller to Purchaser of such Owned Real Property;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;to the extent reasonably necessary or required by the Title Company to effectuate the
conveyance of the Owned Real Property to Purchaser, a Tax certificate with respect to each Owned
Real Property obtained by the Title Company;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;to the extent reasonably necessary or required by the Title Company to effectuate the
conveyance of any Owned Real Property to Purchaser, change of ownership certificates for such Owned
Real Property, as required by applicable Law;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;a non-foreign certification or affidavit from each applicable Seller, if and as required
by applicable Law, in form and substance satisfactory to Purchaser (acting reasonably); and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(f)&nbsp;such other documents and instruments as may be necessary or appropriate for the applicable
Sellers to transfer and convey the Owned Real Properties to Purchaser in accordance with the terms
of this Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">2.4 <U>Purchaser&#146;s Real Property Transfer Documents</U>. Subject to the Sale Approval Order
becoming a Final Order, on or before the Closing Date, Purchaser shall deposit into the Real
Property Escrow for delivery to the applicable Sellers at Closing the following documents and
instruments, each of which shall have been duly executed and, where appropriate, acknowledged:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(a)&nbsp;the Closing Statements;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(b)&nbsp;an affidavit of value for each Owned Real Property, as required by applicable Law; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;such other documents and instruments as may be necessary or appropriate for the applicable
Sellers to transfer and convey the Owned Real Properties to Purchaser in accordance with the terms
of this Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">2.5 <U>Recording of Title</U>. At the Closing, the Title Company shall, and Sellers shall
cause the Title Company to, record or file, as applicable, the Special Warranty Deeds in the office
of the County Clerk or other applicable Governmental Body for each Owned Real Property.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">2.6 <U>Title Commitments and Surveys</U>. At least ten (10)&nbsp;days prior to the scheduled
Closing Date, ParentCo shall, at Sellers&#146; sole cost and expense, for each individual Owned Real
Property listed on <U>Schedule&nbsp;2.6</U>, cause to be delivered to Purchaser a commitment for a
policy of title insurance (each a &#147;<U>Title Commitment</U>&#148; and collectively, the &#147;<U>Title
Commitments</U>&#148;), together with copies of all documents identified in such Title Commitment,
issued by the Title Company. Purchaser shall also have the option of ordering a survey (each a
&#147;<U>Survey</U>&#148; and collectively, the &#147;<U>Surveys</U>&#148;) to be performed at each Owned Real
Property listed on <U>Schedule&nbsp;2.6</U>. If any such Title Commitment or Survey shows any
Encumbrances on any such Owned Real Property, other than Permitted Encumbrances, Sellers shall be
obligated to cure and or remove of record such Encumbrances at or prior to the Closing so that
Purchaser shall be able to obtain a policy of title insurance from the Title Company at the Closing
insuring title to such Owned Real Property in the condition required hereunder. In the event that
the Title Commitment or Survey for any such Owned Real Property reveals any Encumbrance that is not
a Permitted Encumbrance, and it becomes apparent that Sellers cannot or shall not cure or remove of
record such Encumbrance at or prior to Closing, Purchaser shall have the option to elect to
consummate the transactions contemplated hereby with a downward adjustment to the Purchase Price in
an amount necessary to cure or remove such Encumbrance at the Closing.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">2.7 <U>Title Policies</U>. At the Closing, Sellers shall deliver to Purchaser an owner&#146;s
ALTA policy (or applicable state required form) of extended title insurance issued by the Title
Company (or the unconditional commitment of the Title Company to issue such policy) for each Owned
Real Property listed on <U>Schedule&nbsp;2.6</U> (i.e., one such policy for each such Owned Real
Property) effective as of the Closing Date (collectively, the &#147;<U>Title Policies</U>&#148;), with each
Title Policy being in the amount specified on <U>Schedule&nbsp;2.7</U>. The Title Policies shall
insure Purchaser that fee simple interest in and to such Owned Real Properties is vested in
Purchaser, subject only to the printed terms and provisions of such Title Policies (as such terms
and provisions may be modified by endorsements purchased by Purchaser), the Permitted Encumbrances
expressly set forth on the final commitments for issuance of the Title Policies and any other
matters approved in writing by Purchaser. Sellers shall pay the portion of the premium for each
Title Policy that would be equal to a standard owner&#146;s policy of title insurance on each such Owned
Real Property covered by such Title Policy in the same face amount, and Purchaser shall pay any
additional premium for the extended coverage and for any endorsement on such Title Policy requested
by Purchaser. Purchaser shall be solely responsible for satisfying, at its cost, any requirement
of the Title Company for any Title Policy endorsement requested by Purchaser.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">2.8 <U>Real Property Escrow Cancellation Charges</U>. If the Closing does not occur because
of the termination of this Agreement by Sellers (or any of them) pursuant to <U>Section&nbsp;8.1(c)</U>
or <U>(e)</U>, Purchaser shall be liable for all customary Real Property Escrow cancellation
charges. If the Closing does not occur because of the termination of this Agreement by Purchaser
pursuant to <U>Section&nbsp;8.1(c)</U> or <U>(e)</U>, ParentCo shall be liable for all customary Real
Property Escrow cancellation charges. If the Close of Escrow does not occur for any other reason,
ParentCo and Purchaser shall each be liable for one-half (1/2) of all customary Real Property
Escrow cancellation charges.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">2.9 <U>Closing Costs and Recording Fees</U>. Upon the Closing, each of ParentCo and
Purchaser agrees to pay one-half (1/2) of all Real Property Escrow charges and recording fees,
other than with respect to the Title Policies, which shall be paid for as described in <U>Section
2.7</U>.
On or before the Closing Date, each of ParentCo and Purchaser shall deposit with the Title
Company cash in an amount sufficient to pay each such party&#146;s share of Title Policy premiums and
other Real Property Escrow-related costs; <U>provided</U>, <U>however</U> that ParentCo may
instruct Purchaser to pay ParentCo&#146;s share of such costs and deduct the same amount from the
Closing Payment.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">2.10 <U>Apportionments for Real Properties</U>. The following apportionments shall be made
between Sellers and Purchaser as of the Effective Time (the &#147;<U>Closing Apportionments</U>&#148;) based
on the latest available information, and the amounts derived therefrom shall be (as applicable)
added to or deducted from the Closing Payment in accordance with <U>Section&nbsp;1.6</U>:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;<U>Taxes and Assessments</U>. Real estate Taxes, ad valorem Taxes, personal property
Taxes, transaction privilege Taxes, and other similar Taxes related to the ownership and/or
operation of each Owned Real Property shall be prorated between the applicable Seller or
Transferred Subsidiary and Purchaser and set forth on (i)&nbsp;the Closing Statement applicable to such
Owned Real Property, if owned by a Seller or (ii)&nbsp;for any Owned Real Property owned by a
Transferred Subsidiary or any Leased Real Property in respect of which the Real Property Lease is
included in the Assumed Contracts (each, an &#147;<U>Acquired Leased Real Property</U>&#148;), a written
statement agreed to by ParentCo and Purchaser. Sellers shall be responsible for all Taxes
attributable to the Owned Real Properties and Acquired Leased Real Properties through and including
the Closing Date and Purchaser shall be responsible for such Taxes attributable to the Owned Real
Properties and Acquired Leased Real Properties beginning the first day after the Closing Date. If
any current assessments, statements or other necessary information on any such amounts are not
available before the Closing Date, Sellers and Purchaser shall agree upon reasonable estimates of
such amounts based on prior amounts assessed against or paid by the applicable Sellers.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;<U>Utilities</U>. Purchaser and Sellers agree to use their respective reasonable efforts
to arrange, before the Closing Date, for separate billing to the applicable Sellers of all charges
attributable to the period up to and including the Closing Date for electricity, water, gas and any
other utilities servicing the Owned Real Properties and Acquired Leased Real Properties, and for
separate billing to Purchaser for all such charges attributable to the period beginning on the day
after the Closing Date. If any such separate billing cannot be arranged by the Closing Date, such
charges shall be equitably prorated on the basis of the most recent ascertainable invoices or
statements for such services. With respect to any utilities in place and servicing the Owned Real
Properties and Acquired Leased Real Properties as of the Closing Date, Sellers shall endeavor to
have the respective utility providers read the meters for the utilities such that the prorations
can be made based on such final meter readings. If such meter readings cannot be obtained in such
manner, charges for utilities shall be prorated by good faith estimation as of the Closing Date
based on the per diem rate obtained by using the last available billing period and associated bills
for such utilities. Once all applicable utility billings have been delivered after the Closing
Date and an accurate proration of utility charges can be determined therefrom, the net amount
payable to Sellers or Purchaser (as applicable) after combining such prorations shall be paid
concurrently with the payment due under <U>Section&nbsp;1.11(e)</U> after determining the Final Price
Adjustment.
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;<U>Form&nbsp;1099-B</U>. If applicable to the sale and purchase of the Owned Real Properties
as contemplated herein, the Title Company is hereby authorized and instructed to file as the
&#147;<U>Reporting Person</U>&#148; Internal Revenue Service Form 1099-B, Proceeds from Real Estate, Broker,
and Barter Exchange Transactions, as required by &#167; 6045(d) of the Tax Code.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE III</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>REPRESENTATIONS AND WARRANTIES OF SELLERS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In order to induce Purchaser to enter into this Agreement and consummate the transactions
contemplated hereby, Sellers hereby jointly and severally represent and warrant to Purchaser as
follows:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.1 <U>Due Incorporation and Authority</U>. Each Seller is a corporation, limited liability
company or limited partnership duly organized, validly existing and in good standing under the laws
of the state of its organization and has all necessary corporate, limited liability company or
limited partnership power and authority to own, lease and operate its assets and to carry on the
Home Business, the Insurance Business or the Finance Business (as applicable), as it is now being
conducted. Subject to the entry of the Sale Approval Order, (i)&nbsp;each Seller has all requisite
corporate, limited liability company or limited partnership power and authority to enter into this
Agreement, carry out its obligations hereunder and consummate the transactions contemplated hereby
and (ii)&nbsp;the execution and delivery by such Seller of this Agreement, the performance by such
Seller of its respective obligations hereunder and the consummation by such Seller of the
transactions contemplated hereby have been duly authorized by all requisite corporate, limited
liability company or limited partnership action on the part of such Seller. This Agreement has
been duly executed and delivered by each Seller, and, upon entry of the Sale Approval Order and the
Sale Approval Order becoming a Final Order (assuming the due authorization, execution and delivery
hereof by Purchaser and satisfaction of all conditions to the Closing), this Agreement shall
constitute the legal, valid and binding obligation of each Seller, enforceable against each Seller
in accordance with its terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting creditors rights generally or by general
principles of equity (regardless of whether enforcement is considered in a proceeding in equity or
at law).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.2 <U>No Conflicts</U>. Except as a result of the Bankruptcy Case, and subject to the entry
of the Sale Approval Order and the Sale Approval Order becoming a Final Order, the execution and
delivery by Sellers of this Agreement, the consummation of the transactions contemplated hereby,
and the performance by Sellers of this Agreement in accordance with its terms shall not:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;violate the certificate of incorporation or by-laws or comparable organizational
instruments of any Seller or Transferred Subsidiary or contravene any resolution adopted by the
directors, managers, shareholders, members or partners of any Seller or Transferred Subsidiary;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;to the Knowledge of Sellers, violate any Law to which any Seller, any Transferred
Subsidiary, any part of the Business, any of the Transferred Assets, or any of the Transferred
Subsidiaries&#146; assets is bound or subject;
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;result in the imposition or creation of any Encumbrance (other than a Permitted
Encumbrance) on any of the Transferred Assets or any of the assets of any Transferred Subsidiary;
or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;violate, result in any breach of, constitute a default (or an event that, with notice or
lapse of time or both, would become a default) under, or require any consent of any Person
(including any Governmental Body) pursuant to, any Assumed Contract, Contract referred to in
<U>Section&nbsp;1.1(h)</U>, Purchase Order included in the Transferred Assets, Transferred Permit, any
Contract to which any Transferred Subsidiary is a party or by which it is bound, or any Permit held
by a Transferred Subsidiary, except for (i)&nbsp;consents, approvals or authorizations of, or
declarations or filings with, the Bankruptcy Court, (ii)&nbsp;required approvals from insurance
regulatory authorities, and (iii)&nbsp;required approvals from finance regulatory authorities.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.3 <U>Organizational Documents; Meeting Minutes</U>. Sellers have delivered to Purchaser
prior to the date hereof true, accurate and complete copies of the certificate of incorporation and
bylaws, or comparable organizational instruments, of Sellers and the Transferred Subsidiaries as in
effect on the date hereof. Sellers have made available to Purchaser prior to the date hereof
copies of all minutes of meetings of directors, shareholders, members, managers and partners (as
applicable) of the Transferred Subsidiaries, including any actions undertaken or approved by
written consent in lieu of any meeting of such Persons.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">3.4 <U>Capitalization of Transferred Subsidiaries.</U>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;<U>Schedule&nbsp;3.4(a)</U> sets forth for each Transferred Subsidiary (i)&nbsp;its authorized
capital, (ii)&nbsp;the number of its shares of capital stock, limited liability company interests,
general partner interests and/or limited partner interests, as applicable, that are issued and
outstanding, and (iii)&nbsp;the record and beneficial owner(s) of such outstanding shares of capital
stock, limited liability company interests, general partner interests and/or limited partner
interests. All of such issued and outstanding shares of capital stock, limited liability company
interests, general partner interests and limited partner interests (i)&nbsp;have been issued in
compliance with all applicable Laws and the organizational instruments of the Transferred
Subsidiaries, (ii)&nbsp;are fully-paid and non-assessable, (iii)&nbsp;are of amounts equal to or exceeding
the minimum amounts required under applicable Laws, and (iv)&nbsp;except as disclosed on <U>Schedule
3.4(a)</U>, are held by their record owners free and clear of any Encumbrance, other than Permitted
Encumbrances.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;There are no options, rights, warrants, notes, calls or other outstanding securities
convertible into or exercisable or exchangeable for shares of capital stock, limited liability
company interests, general partner interests, limited partner interests or any other equity
interest in any Transferred Subsidiary, nor any outstanding subscriptions, options, rights,
warrants, calls, rights of first refusal or offer, or other agreements or commitments (contingent
or otherwise) obligating any Transferred Subsidiary to issue or transfer from treasury any shares
of its capital stock, limited liability company interests, general partner interests, limited
partner interests or other equity interests, or to issue, grant or sell other securities
convertible into or exchangeable for shares of capital stock, limited liability company interests,
general partner interests, limited partner interests or any other equity interests. There are no
subscriptions, options, warrants, calls, rights, commitments or agreements of any character to
which any Seller
or Transferred Subsidiary is a party or by which it is bound obligating or permitting any
Transferred Subsidiary to purchase or otherwise acquire the securities of any other Person.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;Except for Purchaser&#146;s rights as provided in this Agreement, and except for the Virgo
Security Interest and the security interest granted under the Textron Facility, no Person has any
right (including any preemptive right, right of first offer or right of first refusal) to acquire
any interest in any of the outstanding shares of capital stock, limited liability company
interests, general partner interests or limited partner interests in any Transferred Subsidiary.
The transactions contemplated hereby shall vest in Purchaser at the Closing all legal and
beneficial right, title and interest in and to the Standard Casualty Shares, the Standard Insurance
Shares and the CountryPlace Shares free and clear of any Encumbrance other than the Virgo Security
Interest, and other than any security interest granted or agreed to in writing by Purchaser or an
Affiliate thereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;All certificates or other documents evidencing ownership of the CountryPlace Shares and
the other stock or equity interests in the other Finance Subsidiaries have been delivered by
ParentCo to, and to the Knowledge of Sellers, are in the possession of, Virgo Service Company LLC
for purposes of perfection of the Virgo Security Interest in the CountryPlace Shares and such other
stock and equity interests.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.5 <U>Transferred Subsidiary Financial Statements</U>. To the extent prepared and
maintained by ParentCo or any of the Transferred Subsidiaries (separate from ParentCo&#146;s
consolidated financial statements), Sellers have provided to Purchaser the following financial
statements with respect to the Transferred Subsidiaries: (i)&nbsp;annual statements filed with insurance
regulatory authorities for the fiscal years ended March&nbsp;31, 2008, 2009 and 2010, annual reports
filed with finance regulatory authorities for the fiscal years ended March&nbsp;31, 2008, 2009 and 2010,
and audited balance sheets and related statements of operations, stockholders&#146; equity, and cash
flows as of and for the fiscal years ended March&nbsp;31, 2008, 2009 and 2010; (ii)&nbsp;unaudited balance
sheets and related statements of operations, stockholders&#146; equity, and cash flow as of and for the
three (3)&nbsp;and six (6)-month periods ended September&nbsp;30, 2010, and (iii)&nbsp;unaudited balance sheets
and related statements of operations, stockholders&#146; equity, and cash flow as of and for the month
ended October&nbsp;31, 2010 (the &#147;<U>Most Recent Financial Statements</U>&#148;). All of such financial
statements (including the notes thereto) have been prepared in accordance with statutory accounting
requirements or GAAP, as applicable, throughout the periods covered thereby and present fairly, in
all material respects, the respective financial positions of the Transferred Subsidiaries as of
such dates and the respective results of operations of the Transferred Subsidiaries for such
periods; <U>provided</U>, <U>however</U>, that the financial statements referred to in clauses
(ii)&nbsp;and (iii)&nbsp;above are subject to normal year-end adjustments, required schedules and lack
footnotes and other presentation items required by statutory accounting requirements or GAAP, as
applicable.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.6 <U>Transferred Subsidiary Undisclosed Liabilities; Guaranties</U>. No Transferred
Subsidiary has any Liabilities other than those that (i)&nbsp;are reflected or reserved against in the
Most Recent Financial Statements or otherwise set forth in this Agreement (including any Schedule
hereto); (ii)&nbsp;have been incurred in the Ordinary Course of Business; (iii)&nbsp;are permitted or
contemplated by this Agreement; or (iv)&nbsp;shall have been discharged or paid off as of the date
immediately preceding the Closing Date. Except as disclosed on <U>Schedule&nbsp;3.6</U>, no
Transferred
Subsidiary is a guarantor or otherwise responsible, whether as a co-obligor or contingently,
for any Liability (including Indebtedness) of any other Person (including any Seller or other
Transferred Subsidiary).
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.7 <U>Accounts Receivable</U>. All Accounts Receivable of Sellers and the Transferred
Subsidiaries are valid receivables arising in the Ordinary Course of Business. Except as set forth
on <U>Schedule&nbsp;3.7</U>, there is no contest, claim, defense or right of setoff with respect to
such Accounts Receivable with any account debtor of an account or note receivable relating to the
amount or validity of such account or note receivable, other than with respect to returns in the
Ordinary Course of Business of Sellers or cancellations of insurance policies issued or sold by any
of the Insurance Subsidiaries.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">3.8 <U>Compliance with Laws</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;The Business is and has been within the past five (5)&nbsp;years conducted in all material
respects in compliance with all applicable Laws. Except for the Bankruptcy Case and other matters
contained in the docket related thereto, within the past five (5)&nbsp;years, no Claim has been made in
writing by any Governmental Body to any Seller or Transferred Subsidiary to the effect that the
Business, any Transferred Asset or any Transferred Subsidiary has failed to comply in any material
respect with any Law, except as has been resolved to the satisfaction of such Governmental Body.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;Sellers have made available for inspection by Purchaser (i)&nbsp;true, complete and correct
copies of all annual reports, other periodic filings, material examination reports, correspondence,
reports of investigations, inquiries and other similar materials relating to the Transferred
Subsidiaries dating back to January&nbsp;1, 2005 received by or submitted to any Governmental Body,
including any insurance or finance regulatory authority. Except as described on <U>Schedule
3.8</U>, there are no examinations, audits, formal inquiries or, to the Knowledge of Sellers,
investigations by any state insurance department examiner or any federal or state financial
services regulatory examiner in progress with respect to any Transferred Subsidiary, nor, to the
Knowledge of Sellers, is any such examination, audit, formal inquiry or investigation pending or
scheduled, except as may result from Sellers&#146; commencement of the Bankruptcy Case.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;Except as described on <U>Schedule&nbsp;3.8</U>, there are no Contracts (including settlement
agreements), memoranda of understanding, commitment letters, commissioner&#146;s orders, consent orders
or similar undertakings in effect between any Insurance Subsidiary and any Governmental Body, other
than any such agreement, understandings, commitments, undertakings or orders of general application
to insurers engaged in the property and casualty insurance business, that (i)&nbsp;specifically limit in
any material respect the ability of any Insurance Subsidiary to issue insurance policies under its
existing Permits, (ii)&nbsp;impose any specific requirements on any Insurance Subsidiary in respect of
risk-based capital requirements that materially increase or modify the risk-based capital
requirements imposed under applicable insurance Laws, or (iii)&nbsp;specifically relate to the ability
of any Insurance Subsidiary to pay dividends.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;To the Knowledge of Sellers, since January&nbsp;1, 2005, each agent, broker or other
representative of any Insurance Subsidiary that wrote or sold an insurance product for any
Insurance Subsidiary (any of which, an &#147;<U>Insurance Representative</U>&#148;) was at the time such
Insurance Representative wrote or sold such insurance product duly licensed and appointed as
required by applicable insurance Law, in the particular jurisdiction in which such Insurance
Representative wrote or sold insurance products. To the Knowledge of Sellers, no Insurance
Representative has been since January&nbsp;1, 2005, or is currently, in violation (or with or without
notice or lapse of time or both, would be in violation) of any insurance Law applicable to the
writing, sale or production of insurance products for any Insurance Subsidiary, except where such
violations have not had and would not reasonably be expected to have a Material Adverse Effect. As
of the date of this Agreement, no Insurance Representative individually accounting for five percent
(5%) or more of the total gross premiums of the insurance business of the Insurance Subsidiaries
for their last completed fiscal year has indicated in writing to any Insurance Subsidiary that such
Insurance Representative shall be unable or unwilling to continue its relationship as a Producer
with such Insurance Subsidiary within twelve (12)&nbsp;months after the date hereof.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">3.9 <U>Permits</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;<U>Schedule&nbsp;3.9(a)</U> sets forth a list of all of Sellers&#146; and the Transferred
Subsidiaries&#146; material licenses, franchises, permits, variances, exemptions, orders, approvals and
authorizations of Governmental Bodies, including any applications therefor, that are used for the
conduct of the Business (or any part thereof) as currently conducted (collectively, the
&#147;<U>Permits</U>&#148;). Each Seller and Transferred Subsidiary is in compliance, in all material
respects, with the terms of all material Permits held by it, and all such material Permits are
valid and in full force and effect. For any Permit that would expire within ninety (90)&nbsp;days of
the Closing Date, a renewal application has been prepared and filed with the applicable
Governmental Body.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;No Transferred Subsidiary has transacted business in any jurisdiction requiring it to have
a Permit to transact such business while it did not possess such Permit, except where the failure
to have such Permit would not interfere with the ability of such Transferred Subsidiary to conduct
its business as presently conducted. No Seller or Transferred Subsidiary is the subject of any
pending or, to the Knowledge of Sellers, threatened action or proceeding for or contemplating the
suspension, termination, modification, limitation, cancellation, revocation, nonrenewal or
impairment of any of its Permits. Except for the filing of the Bankruptcy Case, Sellers have no
Knowledge of any existing fact or circumstance that, individually or in the aggregate would be
reasonably likely to result in the suspension, termination, modification, limitation, cancellation,
revocation, nonrenewal or impairment of any Permit held by any of the Transferred Subsidiaries, and
provided that all consents described on <U>Schedule&nbsp;3.9(b)</U> have been obtained, no Permit held
by any Transferred Subsidiary shall be suspended, terminated, modified, limited, cancelled,
revoked, not renewed or impaired or become suspended, terminated, modified, limited, cancelled,
revoked, not renewed or impaired, in whole or in part, as a result of the execution and delivery of
this Agreement, the commencement of the Bankruptcy Case or the consummation of the transactions
contemplated hereby.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">3.10 <U>Contracts</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;<U>Schedule&nbsp;3.10(a)</U> contains an accurate and complete list, and Sellers have
delivered or made available to Purchaser accurate and complete copies, of the following outstanding
Contracts (including all amendments and supplements thereto) to which any Seller or Transferred
Subsidiary is a party or by which any Seller or Transferred Subsidiary is bound:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(i)&nbsp;each Contract for the sale of goods or performance of services by any Seller or
Transferred Subsidiary having (or expected to have) an actual or anticipated value to such Seller
of at least $25,000 in any twelve (12)-month period, but excluding any Contract for the sale of
individual manufactured or modular homes to non-commercial and non-Governmental Body end-use
purchasers;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(ii)&nbsp;each Contract for the purchase of goods or services by any Seller or Transferred
Subsidiary from any vendor or supplier of the Business having (or expected to have) an actual or
anticipated cost to Sellers or the Transferred Subsidiaries (or any of them) of at least $25,000 in
any twelve (12)-month period;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(iii)&nbsp;each real property lease, sublease, license or other agreement pursuant to which any
Seller or Transferred Subsidiary grants to any other Person any right of possession or use of, or
access to, any Real Property;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(iv)&nbsp;each equipment lease, lease-purchase agreement, installment sale contract or other
similar contract or agreement relating to any Tangible Personal Property or any tangible personal
property used by any Transferred Subsidiary;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(v)&nbsp;each Contract relating to capital expenditures on any Real Property or with respect to any
other Transferred Asset or any asset of any Transferred Subsidiary under which any Seller or
Transferred Subsidiary has warranty, service or other similar rights;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%">(vi)&nbsp;each Hedging Contract; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(vii)&nbsp;each management, consulting, advertising, marketing, promotion, technical services,
advisory or other Contract relating to the design, marketing, promotion, management or operation of
the Business, or any part thereof, having (or expected to have) an actual or anticipated cost to
any Seller or Transferred Subsidiary of at least $25,000 in any twelve (12)-month period.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;<U>Schedule&nbsp;3.10(b)</U> contains an accurate and complete list, and Sellers have
delivered or made available to Purchaser accurate and complete copies, of the following outstanding
Contracts (including all amendments and supplements thereto) to which any Transferred Subsidiary is
a party or by which any Transferred Subsidiary is bound:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(i)&nbsp;each Contract restricting in any manner any Transferred Subsidiary&#146;s (i)&nbsp; right to compete
with any other Person, (ii)&nbsp;right to sell or purchase from any other Person or otherwise limiting
the right of any Transferred Subsidiary to engage in any line of business in any jurisdiction,
(iii)&nbsp;right to solicit any business, customer, or employee of another Person, other than
non-disclosure or confidentiality agreements entered into in the
ordinary course of business or (iv)&nbsp;restricting the right of any other Person to compete with
any Transferred Subsidiary or to solicit any business, customer or employee of any Transferred
Subsidiary, other than non-disclosure or confidentiality agreements entered into in the ordinary
course of business.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(ii)&nbsp;each Contract containing any support, maintenance, service or other material obligation
on the part of any Transferred Subsidiary involving annual revenues or cost to such Transferred
Subsidiary in excess of $25,000 in any twelve (12)-month period;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(iii)&nbsp;each loan or credit agreement, pledge agreement, promissory note, security agreement,
mortgage, debenture, indenture, letter of credit, line of credit whether revolving or otherwise,
and guaranty;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(iv)&nbsp;each Contract containing guaranty, surety or indemnification obligations of any
Transferred Subsidiary, including those related to any undertaking of financial support or
contractual performance extended by any Transferred Subsidiary on behalf of or in support of any
other Person (including any Affiliate);
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(v)&nbsp;each Contract providing for the indemnification of any past or present employee, director,
consultant or agent of any Transferred Subsidiary;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(vi)&nbsp;each Contract with any employee or director of any Transferred Subsidiary, other than
offer letters specifying that employment is on an &#147;at will&#148; basis or otherwise at such Transferred
Subsidiary&#146;s discretion;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(vii)&nbsp;each partnership agreement, joint venture agreement, co-development agreement or other
similar agreement involving a sharing of profits, losses, costs (excluding recovery of costs in the
ordinary course of business) or Liabilities with any other Person;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(viii)&nbsp;each Contract to which any Governmental Body is a party or under which any Governmental
Body has any rights or obligations;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(ix)&nbsp;each Contract providing for the servicing of loans, including any such Contract with the
Federal National Mortgage Association (i.e., Fannie Mae), the Government National Mortgage
Association (i.e., Ginnie Mae) or any other similar government sponsored entity;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(x)&nbsp;each Contract providing for reinsurance either by any Insurance Subsidiary or by any third
party with respect to insurance policies issued or sold by any Insurance Subsidiary or for which
any Insurance Subsidiary is liable for the payment of benefits (any of which, a &#147;<U>Reinsurance
Contract</U>&#148;);
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(xi)&nbsp;each brokerage, agency, managing general agent or other similar Contract for the
marketing and sale of any Transferred Subsidiary&#146;s products or services;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(xii)&nbsp;each other Contract that involves a payment to or from any Transferred Subsidiary in
excess of $50,000 on its face in any individual case.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;Each Assumed Contract is valid and binding on, and enforceable against, the applicable
Seller and, to the Knowledge of Sellers, the counterparties thereto, and is in full force and
effect, other than exceptions that shall be remedied or otherwise accounted for pursuant to the
Sale Approval Order. Each Contract to which any Transferred Subsidiary is a party or by which it
is bound is valid and binding on, and enforceable against, the applicable Transferred Subsidiary
and, to the Knowledge of Sellers, the counterparties thereto, and is in full force and effect. No
Seller that is party to or bound by an Assumed Contract and no Transferred Subsidiary that is a
party to any Contract is in material breach of, or default under, any such Assumed Contract or
other Contract and, to the Knowledge of Sellers, there is no valid basis for any claim of material
breach or default by any Seller under any such Assumed Contract or by any Transferred Subsidiary
under any other Contract, except in the case of any Assumed Contract to the extent that any such
breach, default or claim of breach or default is cured, remedied or otherwise accounted for
pursuant to the Sale Approval Order.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">3.11 <U>Insurance Business</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;Since January&nbsp;1, 2005, and except for benefits relating to claims incurred but not yet
reported and reported claims being processed by the Insurance Subsidiaries as of the date hereof,
all benefits due and payable under the insurance Contracts issued by any of the Insurance
Subsidiaries have been paid in accordance, in all material respects, with the terms of the
insurance Contracts under which they arose, except for such benefits for which an Insurance
Subsidiary has reasonably determined, in the Ordinary Course of Business, that there is or was a
reasonable basis to deny or contest payment.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;All policies, binders, slips, certificates and Contracts of insurance, in effect as of the
date hereof (including all applications, supplements, endorsements, riders and ancillary Contracts
in connection therewith) that have been issued by any Insurance Subsidiary or for which any
Insurance Subsidiary is liable for the payment of benefits, and any and all marketing materials,
agent Contracts, broker Contracts or managing general agent Contracts are, to the extent required
under applicable insurance Law, on forms approved by applicable insurance-related Governmental
Bodies or which have been filed and not objected to by such insurance-related Governmental Bodies
within the period provided for objection, and such forms comply in all material respects with the
insurance Laws applicable thereto and, as to premium rates established by any Insurance Subsidiary
which are required to be filed with or approved by insurance-related Governmental Bodies, such
rates have been so filed or approved, the premiums charged conform thereto in all respects, and
such premiums comply in all material respects with the insurance Laws applicable thereto. Sellers
have provided or made available to Purchaser copies of all specimens (including specimen schedule
pages) of all insurance policies and Contracts issued by any Insurance Subsidiary since January&nbsp;1,
2005.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;The reserves carried by the Insurance Subsidiaries are in compliance in all material
respects with the requirements for reserves established by the applicable Governmental Bodies in
the jurisdictions in which the Insurance Subsidiaries conduct business, have been determined in all
material respects in accordance with GAAP and statutory accounting standards (to the extent
applicable) as in effect at applicable times, consistently applied, and have been computed on the
basis of methodologies consistent in all material respects with those used in prior periods.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;Since January&nbsp;1, 2005, none of the Insurance Subsidiaries has violated in any material
respect its underwriting guidelines in effect from time to time in connection with its issuance of
any insurance Contracts in any way that would adversely affect any Insurance Subsidiary&#146;s rights
under any Reinsurance Contract.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;Except as set forth on <U>Schedule&nbsp;3.11(e)</U>, there are no material accrued and unpaid
or unreported Liabilities with respect to claims or assessments made against any Insurance
Subsidiary by any insurance guaranty association or similar organization in connection with such
association&#146;s or organization&#146;s insurance guaranty fund or similar program.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(f)&nbsp;There is no Contract or other arrangement in effect between any Insurance Subsidiary and
any third party reinsurer under a Reinsurance Contract that would under any circumstances reduce,
limit, mitigate or otherwise affect any actual or potential loss to any party under any such
Reinsurance Contract, other than as may be expressly provided in such Reinsurance Contract.
Neither Parent nor any Insurance Subsidiary has received any written notice to the effect that
(i)&nbsp;the financial condition of any third party to any Reinsurance Contract is materially impaired
with the result that a default thereunder may reasonably be anticipated or (ii)&nbsp;there is no dispute
with respect to any material amount recoverable or payable by any Insurance Subsidiary pursuant to
any Reinsurance Contract.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">3.12 <U>Real Property</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;<U>Schedule&nbsp;3.12(a)</U> lists the street address (and references the legal description in
the Title Commitments) of each parcel of real property owned by any Seller or Transferred
Subsidiary (each, an &#147;<U>Owned Real Property</U>&#148; and collectively, the &#147;<U>Owned Real
Properties</U>&#148;), but excluding any REO real property purchased by any Seller or Transferred
Subsidiary from the Department of Housing and Urban Development or any lender and held for resale.
Subject to the entry of the Sale Approval Order and the Sale Approval Order becoming a Final Order,
at the Closing, the applicable Sellers shall have fee simple title to each Owned Real Property,
which shall be transferred to Purchaser at the Closing free and clear of all Encumbrances, other
than Permitted Encumbrances. The Owned Real Property owned by any Transferred Subsidiary is owned
by such Transferred Subsidiary in fee simple, free and clear of any Encumbrance, other than
Permitted Encumbrances.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;<U>Schedule&nbsp;3.12(b)</U> lists (i)&nbsp;the street address of each parcel of real property or
portion thereof leased (as lessee) by any Seller or any Transferred Subsidiary (each, a &#147;<U>Leased
Real Property</U>&#148; and collectively, the &#147;<U>Leased Real Properties</U>&#148;, and together with the
Owned Real Properties, the &#147;<U>Real Properties</U>&#148;), and (ii)&nbsp;a description (including document
name, date, parties and any amendments) of each lease (each a &#147;<U>Real Property Lease</U>&#148;) in
effect with respect to each Leased Real Property.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;Sellers have delivered to Purchaser complete and accurate copies of all Real Property
Leases, including all addenda, amendments, extensions and supplements thereto and assignments
thereof. No Seller or Transferred Subsidiary has entered into any written Contract, arrangement or
understanding with any third party landlord that in any way alters or affects the express terms and
conditions of any Real Property Lease. Each Real Property Lease is valid and binding on the
applicable Seller or Transferred Subsidiary and, to the Knowledge of
Sellers, the counterparties thereto, and is in full force and effect. No Seller or
Transferred Subsidiary is in default under any Real Property Lease, other than a default that shall
be remedied or otherwise accounted for pursuant to the Sale Approval Order, and to the Knowledge of
Sellers, no other counterparty to any Real Property Lease is in default thereof.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;Sellers&#146; use of the Real Properties for the various purposes for which they are presently
being used are permitted as of right under all applicable Laws (including zoning laws), except
where any non-permitted use by any Seller would not interfere with such Seller&#146;s conduct of its
business on such Real Property as presently conducted.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;To the Knowledge of Sellers, (i)&nbsp;all of the Real Properties, including buildings, fixtures
and other improvements thereon, are in good operating condition and repair, ordinary wear and tear
excepted, and no Owned Real Property is in need of repair other than as part of routine maintenance
in the ordinary course of business, and (ii)&nbsp;all buildings, structures, improvements and fixtures
on each of the Real Properties are in compliance in all material respects with all applicable Laws,
including Occupational Safety and Health Laws.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(f)&nbsp;Except as expressly provided in any Real Property Lease, in any public record or as set
forth on <U>Schedule&nbsp;3.12(f)</U>, no Seller or Transferred Subsidiary has (i)&nbsp;leased, subleased,
licensed or otherwise granted to any Person the current or future right to use or occupy any of the
Real Properties or any portion thereof, (ii)&nbsp;granted to any Person any option, right of first
refusal, offer, or other Contract or right to purchase, acquire, lease, sublease, assign or dispose
of any interest in any of the Real Properties, or (iii)&nbsp;collaterally assigned or granted any other
Encumbrance in or over any Real Property Lease or any interest therein.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(g)&nbsp;The Real Properties constitute all of the real property currently used by Seller and the
Transferred Subsidiaries in the conduct of the Business.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(h)&nbsp;There does not exist any actual or, to the Knowledge of Sellers, overtly threatened or
contemplated condemnation or eminent domain proceeding that affects or could be reasonably expected
to affect any Real Property or any part thereof, and no Seller or Transferred Subsidiary has
received any written notice of the intention of any Governmental Body to undertake any such
proceeding with respect to any of the Real Properties, or any part thereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(i)&nbsp;Except as may arise as a result of the Bankruptcy Case, no Transferred Subsidiary has any
ongoing dispute or disagreement with any landlord in respect of any obligation of such Transferred
Subsidiary or such landlord under the terms of any Real Property Lease or under applicable Law with
respect to any Leased Real Property.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(j)&nbsp;Except for the Real Properties of which the Transferred Subsidiaries are identified as
owners or tenants on <U>Schedule&nbsp;3.12(a)</U>, no Transferred Subsidiary has owned, leased (as
tenant), subleased (as subtenant) or occupied any other real property within the past five (5)
years.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">3.13 <U>Environmental Matters</U>. Except as disclosed on <U>Schedule&nbsp;3.13</U>:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;Sellers and the Transferred Subsidiaries are currently, and since January&nbsp;1,&nbsp;2005 have
been, in compliance in all material respects with all applicable
Environmental Laws applicable to the Business, the Transferred Assets and the assets of the
Transferred Subsidiaries. There are no Claims pursuant to any Environmental Law pending or, to the
Knowledge of Sellers, threatened in writing against any Seller or Transferred Subsidiary in
connection with the conduct or operation of the Business or the ownership or use of any of the
Transferred Assets or any of the assets of the Transferred Subsidiaries. Within the past five (5)
years, no Seller or Transferred Subsidiary has received any actual or threatened order, notice or
other written communication from any Governmental Body or other Person of any actual or potential
violation or failure of any Seller or Transferred Subsidiary to comply with any Environmental Law
or of any actual or threatened obligation on the part of any Seller or Transferred Subsidiary to
undertake or bear the cost of any Environmental, Health and Safety Liabilities with respect to any
of the Real Properties, any other Transferred Asset or any asset of any of the Transferred
Subsidiaries, except has been adequately resolved to the satisfaction of such Governmental Body or
other Person.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;No Seller or Transferred Subsidiary is currently required to undertake any corrective or
remedial obligation under any Environmental Law with respect to the Business, any of the Real
Properties, any other Transferred Asset or any asset of any of the Transferred Subsidiaries.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;Sellers have made available to Purchaser all Phase I and Phase II, if any, environmental
reports, other engineering reports and any other material documents in Sellers&#146; possession relating
to any environmental or health or safety matters, relating to the Real Properties, any of the other
Transferred Assets or any of the assets of the Transferred Subsidiaries. Except to the extent
disclosed in such environmental and engineering reports, to the Knowledge of Sellers, there are no
Hazardous Materials present on or in the Environment at any of the Real Properties, including any
Hazardous Materials contained in barrels, aboveground or underground storage tanks, landfills, land
deposits, dumps, equipment (whether movable or fixed) or other containers, either temporary or
permanent, and deposited or located in land, water, sumps, or any other part of any of the Real
Properties, or incorporated into any structure therein or thereon, except in material compliance
with all applicable Environmental Laws.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;No Seller or Transferred Subsidiary has conducted or knowingly permitted any Hazardous
Activity on or with respect to any of the Real Properties.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">3.14 <U>Intellectual Property</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;<U>Schedule&nbsp;3.14(a)</U> contains a complete and accurate list of the following items of
intellectual property of each Seller and Transferred Subsidiary: (i)&nbsp;all Patents; (ii)&nbsp;all Marks;
(iii)&nbsp;all registered Copyrights; and (iv)&nbsp;all licenses and sublicenses held by any Seller or
Transferred Subsidiary as licensee pertaining to Computer Software (excluding mass produced shrink
wrap license agreements) or other Intellectual Property of any other Person, including in the case
of such Patents, Marks and Registered Copyrights, details of registration and/or application
filings with the United States Patent and Trademark Office or similar Governmental Bodies in other
jurisdictions. No Seller or Transferred Subsidiary owns any proprietary Computer Software.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;<U>Schedule&nbsp;3.14(b)</U> contains a complete and accurate list of all licenses,
sublicenses or other arrangements (written or oral, formal or informal) pursuant to which any
Seller or Transferred Subsidiary is currently granting any right of use of any Computer Software or
other Intellectual Property to any Person, including any other Seller or Transferred Subsidiary,
including in the case of any arrangement that is not documented under a written agreement, the
specific terms of such arrangement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;Except as disclosed on <U>Schedule&nbsp;3.14(c)</U>, to the Knowledge of Sellers, (i)&nbsp;no item
of Intellectual Property used by any Seller or Transferred Subsidiary is currently being infringed
or overtly challenged or threatened in any way, (ii)&nbsp;none of the products or services sold or trade
secrets used by any Seller or Transferred Subsidiary infringes or has been alleged in any written
notice to any Seller or Transferred Subsidiary to infringe any intellectual property right of any
other Person, (iii)&nbsp;no Mark included in the Intellectual Property used by any Seller or Transferred
Subsidiary has been or is now involved in any opposition, invalidation or cancellation Claim, and
no such action is threatened with respect to any such Mark; and (iv)&nbsp;there is no potentially
interfering trademark or trademark application of any other Person in use or pending.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;Each license, sublicense or other arrangement referred to in <U>Sections&nbsp;3.14(a)</U> and
<U>(b)</U> is valid and binding on, and enforceable against, the applicable Seller or Transferred
Subsidiary and, to the Knowledge of Sellers, the counterparties thereto, and is in full force and
effect. Except as disclosed on <U>Schedule&nbsp;3.14(d)</U>, no Seller or Transferred Subsidiary is in
default of its obligations under any license, sublicense or other arrangement referred to in
<U>Section&nbsp;3.14(a)</U> or <U>(b)</U>, except where such default is cured, remedied or otherwise
accounted for pursuant to the Sale Approval Order.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.15 <U>Litigation and Other Claims</U>. Except for the Bankruptcy Case and other matters on
the docket related thereto (including information included in Sellers&#146; Schedules of Assets and
Liabilities and Statements of Financial Affairs filed with the Bankruptcy Court), and except as
otherwise disclosed on <U>Schedule&nbsp;3.15</U>, (i)&nbsp;there are no material Claims (including with
respect to product liability Claims) pending or, to the Knowledge of Sellers, threatened against
any Seller or Transferred Subsidiary with respect to the Business (or any part thereof), any of the
Real Properties, any of the other Transferred Assets or any of the Assumed Liabilities, and (ii)
there are no Claims pending or, to the Knowledge of Sellers, threatened by or against any Seller or
Transferred Subsidiary that challenge the validity of this Agreement or any of the transactions
contemplated hereby or that, either individually or in the aggregate, would reasonably be expected
to prevent or delay the consummation by Sellers of the transactions contemplated by this Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.16 <U>Condition of Tangible Personal Property</U>. The Tangible Personal Property and the
machinery, equipment, and other tangible assets owned or leased by the Transferred Subsidiaries and
necessary to conduct the Business as it is being conducted on the date hereof are in good operating
condition and repair, ordinary wear and tear excepted.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.17 <U>Title to Assets; Possession</U>. Upon (i)&nbsp;the entry of the Sale Approval Order and
the Sale Approval Order becoming a Final Order, and (ii)&nbsp;the receipt by Purchaser of all required
approvals from insurance-related Governmental Bodies and finance-related Governmental
Bodies applicable to the Transferred Subsidiaries, at the Closing, Sellers shall have good and
marketable title to the Transferred Assets, which shall be transferred to Purchaser free and clear
of all Encumbrances, other than Permitted Encumbrances. The Transferred Subsidiaries now have, and
as of the time of Closing shall have, good and marketable title to all of their assets, free and
clear of all Encumbrances, other than Permitted Encumbrances. Except for equipment leased (as
lessee) by any Seller or Transferred Subsidiary under a Contract disclosed in this Agreement, no
Seller or Transferred Subsidiary is in possession of any equipment or other tangible asset that is
owned by another Person. Except as disclosed on <U>Schedule&nbsp;3.17</U>, no asset of any Seller or
Transferred Subsidiary having a value of more than $25,000 is in the possession or under the
control of any other Person.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.18 <U>Sufficiency of Assets</U>. Except for the Excluded Assets, the Transferred Assets
constitute all of the assets, tangible and intangible, of any nature whatsoever, used by Seller to
operate the Home Business in the manner presently operated by Sellers.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.19 <U>Inventory</U>. The Inventory substantially consists of, and as of the close of
business on the day immediately preceding the Closing Date the Inventory shall substantially
consist of, items which are, subject to inventory reserves set forth in Sellers&#146; (or their
Affiliate&#146;s consolidated) financial statements, of a quality and quantity usable and salable in the
Ordinary Course of Business.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">3.20 <U>Employees</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;Sellers have provided to Purchaser a detailed list of all of their and the Transferred
Subsidiaries&#146; employees, segregated by each Seller and Transferred Subsidiary, including the
following information for each such employee: (i)&nbsp;name; (ii)&nbsp;part-time or full-time status; (iii)
title and/or job description; (iv)&nbsp;employment commencement date; (v)&nbsp;annual base salary or hourly
wage; (vi)&nbsp;available bonus or other contingent compensation; (vii)&nbsp;accrued and unused vacation
days; (viii)&nbsp;accrued and unused sick days; and (ix)&nbsp;if on leave, the status of such leave
(including reason for leave and expected return date).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;Except as set forth on <U>Schedule&nbsp;3.20(b)</U>, since January&nbsp;1, 2008, with respect to
the employees of Seller and the Transferred Subsidiaries, there has not been, there is not
presently pending or existing, and, to the Knowledge of Sellers, there is not threatened in writing
any material charge, grievance proceeding or other claim against or affecting any Seller (or any
director, officer, manager or employee thereof) relating to the actual or alleged violation of any
applicable Law pertaining to labor relations or employment matters, including any charge or
complaint filed by an employee or union with the National Labor Relations Board, the Equal
Employment Opportunity Commission or any comparable Governmental Body.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;To the Knowledge of Sellers, all employees of Seller and the Transferred Subsidiaries are
legally qualified to work in the United States by virtue of being United States citizens,
documented resident aliens (i.e., &#147;green card&#148; holders) or holders of validly issued employment
visas or other applicable Permits. Except as set forth on <U>Schedule&nbsp;3.20(c)</U>, all employees
of the Transferred Subsidiaries are employed on an &#147;at-will&#148; (or equivalent) basis such that their
employment may be terminated at any time and for any reason (including no reason) without notice or
compensation paid in lieu thereof.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;<U>Schedule&nbsp;3.20(d)</U> sets forth, on a Person-by-Person basis, all severance
compensation and benefits, retention bonus and similar payment obligations of any Transferred
Subsidiary to any of its directors, employees, managers or other equivalent Persons whether under
written Contract or otherwise.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;All salaries, wages, commissions and other compensation and benefits payable to the
employees of each Transferred Subsidiary have been accrued and paid by the applicable Transferred
Subsidiary when due for all periods through the date hereof, and shall have been accrued and paid
by the applicable Transferred Subsidiary when due for all periods through the Closing Date, except
for stub period payroll obligations resulting from the Closing Date occurring between normal
paydays, which payroll obligations are or shall have been as of the Closing Date properly accounted
for in the financial records of the Transferred Subsidiaries.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(f)&nbsp;No Seller or Transferred Subsidiary has been, nor is it now, a party to any collective
bargaining agreement or other labor contract. Since January&nbsp;1, 2008, there has not been, there is
not presently pending or existing, and to the Knowledge of Sellers, there is not threatened, any
strike, slowdown, picketing, work stoppage or employee grievance process involving any Seller or
Transferred Subsidiary. To the Knowledge of Sellers, there is no organizational activity or other
labor dispute against or affecting any Seller or Transferred Subsidiary, and no application or
petition for an election of or for certification of a collective bargaining agent is pending.
There is not currently in effect any lock-out, relating to a labor dispute, by any Seller or
Transferred Subsidiary of any employee (or group thereof), and no such action is contemplated by
any Seller or Transferred Subsidiary.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">3.21 <U>Employee Benefits.</U>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;<U>Schedule&nbsp;3.21(a)</U> lists each Employee Benefit Plan that any Transferred Subsidiary
maintains, to which it contributes, in which it participates or with respect to which it has any
Liability. No Transferred Subsidiary nor any ERISA Affiliate has any commitment to establish or
amend any new or existing Employee Benefit Plan or similar agreement for the benefit of employees
of any Transferred Subsidiary or any ERISA Affiliate except as otherwise required by applicable Law
or to conform with any such Employee Benefit Plan or similar agreement to any applicable Law. No
Transferred Subsidiary nor any ERISA Affiliate has ever maintained, sponsored, participated in, or
contributed to any Employee Pension Benefit Plan that is a &#147;defined benefit plan&#148; as defined in
ERISA &#167;3(35).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;Each Employee Benefit Plan of any Transferred Subsidiary (and each related trust,
insurance contract, or fund) now and always has been maintained, funded and administered in
accordance with the terms of such Employee Benefit Plan and complies in form and in operation in
all material respects with the applicable requirements of ERISA and the Tax Code. There are no
pending or, to the Knowledge of Sellers, threatened audits, investigations or claims involving any
Employee Benefit Plan by any Governmental Body or other Person, other than routine claims for
benefits.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;All premiums or other payments that are due have been timely paid with respect to each
Employee Benefit Plan of any Transferred Subsidiary that is an Employee Welfare Benefit Plan.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;Each Employee Benefit Plan of any Transferred Subsidiary that is intended to meet the
requirements of a &#145;&#145;qualified plan&#146;&#146; under Tax Code &#167;401(a) and each trust intended to meet the
qualification requirements under Tax Code &#167;501(a) has timely received a determination letter (or
opinion letter in the case of a prototype plan) from the IRS to the effect that it meets the
requirements of Tax Code &#167;401(a), and no fact exists, including any amendment or failure to amend
any Employee Benefit Plan, that could reasonably be expected to cause the IRS to revoke such
favorable determination letter (or opinion letter).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;With respect to each Employee Benefit Plan of any Transferred Subsidiary, such Transferred
Subsidiary has made available to Purchaser (i)&nbsp;a copy of each Employee Benefit Plan (including all
amendments thereto), (ii)&nbsp;a copy of the annual report and actuarial report, if required under ERISA
or the Tax Code, with respect to each Employee Benefit Plan for the last two (2)&nbsp;plan years ending
prior to the date hereof, (iii)&nbsp;if the Employee Benefit Plan is funded through a trust or any
third-party funding vehicle, a copy of the trust or other funding agreement (including all
amendments thereto) and the latest financial statements with respect to the last reporting period
ended immediately prior to the date thereof, (iv)&nbsp;a copy of the most recent &#147;summary plan
description&#148;, together with each &#147;summary of material modifications&#148;, if required under ERISA, and
(v)&nbsp;the most recent determination letter received from the IRS with respect to each Benefit Plan
that is intended to be qualified under &#167;401(a).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(f)&nbsp;No Transferred Subsidiary nor any ERISA Affiliate has ever maintained, established,
sponsored, participated in, or contributed to any (i)&nbsp;Employee Benefit Plan which is subject to
Title IV of ERISA or Tax Code &#167;412; (ii) &#147;multiemployer plan&#148; as defined in ERISA or the Tax Code;
(iii) &#147;multiple employer plan&#148; as defined in ERISA or the Tax Code; or (iv)&nbsp;a &#147;funded welfare plan&#148;
within the meaning of Tax Code &#167;419.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(g)&nbsp;Except as may be provided in any written employment Contract currently in effect between
any Transferred Subsidiary and any employee or former employee, all of which agreements are set
forth on <U>Schedule&nbsp;3.21(g)</U>, the consummation of the transactions contemplated hereby shall
not (i)&nbsp;result in any payment becoming due, or increase the amount of compensation due, to any
current or former employee or current or former director of any Transferred Subsidiary, (ii)
increase any benefits payable under any Employee Benefit Plan, or (iii)&nbsp;accelerate the time of
payment or vesting, or increase the amount of, or otherwise enhance, any benefit due to any current
or former employee or current or former director of any Transferred Subsidiary. No such payment
shall result in the loss by reason of Tax Code &#167;280G, of any federal Income Tax deduction by any
Transferred Subsidiary or Purchaser.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(h)&nbsp;No Employee Benefit Plan of any Transferred Subsidiary provides benefits, including death,
medical or retiree welfare benefits (whether or not insured), with respect to current or former
employees or current or former directors of any Transferred Subsidiary after retirement or other
termination of service other than (i)&nbsp;coverage mandated by ERISA &#167;&#167; 601-608 and Tax Code &#167;4980B(f)
or applicable state Laws, (ii)&nbsp;death benefits or retirement benefits under any Plan, (iii)&nbsp;benefits
the full cost of which is borne by the current or former employee or current or former director (or
his or her personal representatives or beneficiary), or (iv)&nbsp;severance or deferred compensation
benefits properly accrued as Liabilities on the books of such Transferred Subsidiary or an ERISA
Affiliate.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(i)&nbsp;No Transferred Subsidiary, and no Seller on behalf of any Transferred Subsidiary, has made
any representation or communication, oral or written, with respect to the participation,
eligibility for benefits, vesting, benefit accrual or coverage under any Employee Benefit Plan to
any of its current or former employees or directors (or any of their respective personal
representatives or beneficiaries) which is not in accordance with the terms and conditions of such
Transferred Subsidiary&#146;s Employee Benefit Plans.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(j)&nbsp;Each Transferred Subsidiary and ERISA Affiliate has complied in all material respects with
the notice and continuation coverage requirements of Tax Code &#167;4980B and the regulations thereunder
with respect to each Employee Benefit Plan of any Transferred Subsidiary or any ERISA Affiliate
that is, or was during any taxable year of any Transferred Subsidiary or any ERISA Affiliate for
which the statute of limitations on the assessment of federal income Taxes remains open, by consent
or otherwise, a group health plan within the meaning of Tax Code &#167;5000(b)(1).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(k)&nbsp;None of the Employee Benefit Plans of any Transferred Subsidiary or any ERISA Affiliate,
any trust created thereunder, any Transferred Subsidiary or any ERISA Affiliate, or any employee or
director of any of the foregoing, nor, to the Knowledge of Sellers, any trustee, administrator or
other fiduciary thereof, has engaged in a &#147;prohibited transaction&#148; (as such term is defined in Tax
Code &#167;4975 or &#167;406 of ERISA). To the Knowledge of Sellers, no sponsor, trustee or administrator of
any Employee Benefit Plan of any Transferred Subsidiary has engaged in a transaction or has taken
or failed to take any action with respect to such Employee Benefit Plan that would be reasonably
expected to subject any Transferred Subsidiary or an ERISA Affiliate to a civil penalty assessed
pursuant to &#167;502(i) of ERISA or a Tax imposed pursuant to Tax Code &#167;4975 or 4980B.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(l)&nbsp;No severance agreement or arrangement currently in effect between any Transferred
Subsidiary and any current or former employee or director (including the severance amounts payable
thereunder) has been amended since the date of its execution by such Transferred Subsidiary and the
applicable employee or director.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">3.22 <U>Tax Matters.</U>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;Each Transferred Subsidiary has timely filed all Income Tax Returns and all other material
Tax Returns that it was required to file. All such Tax Returns are true, correct and complete in
all material respects, were prepared in substantial compliance with all applicable Laws and, as so
filed, disclose all Taxes required to be paid for the periods covered thereby. All Taxes due and
owing by any Transferred Subsidiary (whether or not shown on any Tax Return) have been paid when
due, other than Taxes being contested in good faith and for which adequate reserves have been
established in the Most Recent Financial Statements, and if not yet due, have been properly accrued
or otherwise adequately reserved in such Transferred Subsidiary&#146;s financial records (all of which
have been made available to Purchaser) and shall be accrued on the books and records of such
Transferred Subsidiary in accordance with past custom and practice through the Closing Date. Each
Transferred Subsidiary has disclosed on each Tax Return filed by it all positions taken thereon
that could give rise to a substantial understatement penalty of federal Income Taxes within the
meaning of Tax Code &#167;6662 or &#167;6662A or any similar provision of any other Tax Law. No Transferred
Subsidiary is currently the beneficiary
of any extension of time within which to file any Tax Return. There are no Encumbrances for
Taxes (other than Permitted Encumbrances) upon any of the assets of any Transferred Subsidiary.
Each Transferred Subsidiary has complied in all material respects with all Laws relating to the
payment and withholding of Taxes (including Taxes required to be withheld, collected, deposited and
paid in connection with amounts paid or owing to any employee, independent contractor, creditor,
shareholder, member, partner or other third party), and all Forms W-2, 941 and 1099 and any other
applicable forms required with respect thereto have been properly completed and timely filed.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;There is no pending or threatened material dispute or claim concerning any Tax Liability
of any Transferred Subsidiary either (i)&nbsp;claimed or raised by any Governmental Body in writing or
(ii)&nbsp;as to which Sellers have Knowledge; and no adjustment relating to any Tax Return of any
Transferred Subsidiary or of any Seller with respect to matters pertaining to any Transferred
Subsidiary has been proposed in writing which has not been paid, settled or otherwise resolved to
the satisfaction of the applicable Governmental Body. No Transferred Subsidiary, and no Seller
with respect to any Transferred Subsidiary, has received from any Governmental Body, informally or
in writing, any (x)&nbsp;notice indicating an intent to open an audit or other review with respect to
any Transferred Subsidiary, (y)&nbsp;request for information relating to Taxes of any Transferred
Subsidiary, or (z)&nbsp;notice of deficiency or proposed adjustment for any amount of Tax proposed,
asserted, or assessed against any Transferred Subsidiary which in any such case is still
outstanding or otherwise unresolved.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;Sellers have made available to Purchaser all federal, state, local, and foreign Tax
Returns filed with respect to each Transferred Subsidiary for taxable periods ended on or after
December&nbsp;31 2005, indicates those Tax Returns that have been audited or otherwise subject to an
action or proceeding, and indicates those Tax Returns that currently are the subject of audit,
action or proceeding. No Seller or Transferred Subsidiary has waived any statute of limitations in
respect of Taxes of any Transferred Subsidiary or agreed to any extension of time with respect to a
Tax assessment or deficiency that remains outstanding.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;No Transferred Subsidiary is a party to any Contract, arrangement or plan that has
resulted or would result, separately or in the aggregate, in the actual or deemed payment by such
Transferred Subsidiary or Purchaser of any &#147;excess parachute payment&#148; within the meaning of Tax
Code &#167;280G (or any corresponding provision of state, local, or foreign Tax Law) or of any other
payment that shall not be deductible under Tax Code &#167;162(a), &#167;162(m) or &#167;404, or that could give
rise to any amounts subject to excise Tax under Tax Code &#167;4999, as those provisions are currently
written. No Transferred Subsidiary has any obligation to pay compensation subject to Tax Code &#167;
409A pursuant to a deferred compensation plan that does not comply with the requirements of Tax
Code &#167;409A. No Transferred Subsidiary has been a United States real property holding corporation
within the meaning of Tax Code &#167;897(c)(2) during the applicable period specified in Tax Code
&#167;897(c)(1)(A)(ii). No Transferred Subsidiary is a party to or bound by any Tax allocation or Tax
sharing agreement that will remain in effect with respect to such Transferred Subsidiary after the
Closing Date. No Transferred Subsidiary (i)&nbsp;has been a member of an affiliated group filing a
consolidated federal Income Tax Return, other than the consolidated group the common parent of
which was ParentCo, nor (ii)&nbsp;has any Liability for the Taxes of any Person (other than such
Transferred Subsidiary) under Treasury Regulations &#167;1.1502-6 (or any similar provision of state,
local, or non-U.S. Law), as a transferee
or successor, by contract, or otherwise, except with respect to the consolidated group the
common parent of which is ParentCo.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;No Transferred Subsidiary shall be required to include any item of income in, or exclude
any item of deduction from, taxable income for any taxable period (or portion thereof) ending after
the Closing Date as a result of any (i)&nbsp;change in method of accounting for a taxable period ending
on or prior to the Closing Date, (ii) &#147;closing agreement&#148; as described in Tax Code &#167;7121 (or any
corresponding or similar provision or agreement of state, local, or foreign income Tax Law or with
any Governmental Body) executed on or prior to the Closing Date, (iii)&nbsp;intercompany transactions or
any excess loss account described in the Treasury Regulations under Tax Code &#167;1502 (or any
corresponding or similar provision of state, local, or foreign income Tax Law), (iv)&nbsp;installment
sale or open transaction disposition made on or prior to the Closing Date, (v)&nbsp;prepaid amount
received on or prior to the Closing Date, or (vi)&nbsp;deferral of income pursuant to Tax Code &#167;108(i).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(f)&nbsp;No income under any arrangement or understanding to which any Transferred Subsidiary is a
party or by which it is bound shall be attributed to such Transferred Subsidiary which is not
represented by income to which such Transferred Subsidiary is legally entitled.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(g)&nbsp;No Transferred Subsidiary has distributed stock or other equity ownership interests of
another Person, or had its stock or other equity ownership interests distributed by another Person,
in a transaction that was purported or intended to be governed in whole or in part by Tax Code &#167;355
or Tax Code &#167;361.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(h)&nbsp;No Transferred Subsidiary is, nor has it been, a party to any &#147;listed transaction&#148;, as
defined in Tax Code &#167;6707A(c)(2) and Treasury Regulations &#167;1.6011-4(b)(2), and no Transferred
Subsidiary is, nor has it been, a party to any &#147;reportable transaction&#148; as defined in Tax Code
&#167;6707A(c)(1) and Treasury Regulations &#167;1.6011-4(b).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(i)&nbsp;No Transferred Subsidiary has any election in effect under Tax Code &#167;&#167;&nbsp;108, 441, 472,
1017, 1033 or 4797 (or any similar provision of state, local or foreign Tax Law).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(j)&nbsp;<U>Schedule&nbsp;3.22(j)</U> lists each jurisdiction in which any Transferred Subsidiary files
any Tax Returns (with each such jurisdiction identified by the applicable Transferred Subsidiary).
No written notice or inquiry has been received by any Transferred Subsidiary from any jurisdiction
in which Tax Returns have not been filed by any Transferred Subsidiary to the effect that the
filing of Tax Returns may be required. The Transferred Subsidiaries have no operations or
permanent establishments outside the United States.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.23 <U>Affiliated Transactions</U>. To the Knowledge of Sellers, except as set forth on
<U>Schedule&nbsp;3.23</U>, no Insider has any interest in the Transferred Assets or any of the assets
or properties of any of the Transferred Subsidiaries or is a party to any Contract used in or
related to the Business, or any part thereof. To the Knowledge of Sellers, no Insider has (i)&nbsp;any
economic interest in any Person which engages in competition with any Seller or Transferred
Subsidiary,
or (ii)&nbsp;any economic interest in any Person that purchases from or sells or furnishes to any
Seller or Transferred Subsidiary any services or products.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.24 <U>Product Liability; Product Warranties</U>. Except as set forth on <U>Schedule
3.24</U>, to the Knowledge of Sellers, the products sold or manufactured by Sellers and the
services provided by Sellers have complied with and are in compliance with, in all material
respects, all applicable (i)&nbsp;Laws, (ii)&nbsp;industry and self-regulatory organization standards, (iii)
contractual commitments, and (iv)&nbsp;express or implied warranties. Except as set forth on
<U>Schedule&nbsp;3.24</U>, Since January&nbsp;1, 2005, no Seller has initiated or otherwise participated in
any product recall or withdrawal with respect to any product produced, manufactured, marketed,
distributed or sold in connection with the Business, whether voluntary or required by Law. To the
Knowledge of Sellers, there are not, and there have not been, any defects or deficiencies in any of
their products or services (including in the Inventory) that could reasonably be expected to give
rise to or serve as a basis for any product recall or withdrawal by any Seller.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.25 <U>Insurance</U>. <U>Schedule&nbsp;3.25</U> lists all insurance policies (including
policies providing property, casualty, general liability, products liability, errors and omissions,
workers&#146; compensation, key man or other life insurance, bond and surety arrangements and directors
and officers&#146; liability) with respect to which any Seller or Transferred Subsidiary is covered as a
named or additional insured, or for which it is responsible for paying all or any portion of the
premiums thereof. With respect to each such insurance policy: (i)&nbsp;the policy is valid,
enforceable, and in full force and effect in all material respects, and (ii)&nbsp;no Seller or
Transferred Subsidiary is in material breach or default thereof (including with respect to the
payment of premiums or the giving of notices). <U>Schedule&nbsp;3.25</U> describes any material
self-insurance arrangements affecting Seller or any Transferred Subsidiary. Since January&nbsp;1, 2005,
no Seller or Transferred Subsidiary has received (i)&nbsp;any notice of refusal of insurance coverage
that was applied for by or on behalf of any Transferred Subsidiary relating (in whole or in part)
to any Transferred Subsidiary, its business or assets, (ii)&nbsp;any notice of rejection of a claim
submitted by or on behalf of any Seller or Transferred Subsidiary to any of its insurers, or (iii)
any notice of cancellation of any policy of insurance previously issued to or for the benefit of
any Seller or Transferred Subsidiary. <U>Schedule&nbsp;3.25 </U>also sets forth a complete summary
description for all applicable periods dating back to January&nbsp;1, 2005 of (a)&nbsp;the loss experience
with respect to any Seller or Transferred Subsidiary under each such policy of insurance or any
prior existing policy of insurance, including a statement describing each claim having a value in
excess of $50,000, and (b)&nbsp;the loss experience with respect to any Seller or Transferred Subsidiary
for all claims during such period that were self-insured by any Seller or Transferred Subsidiary,
including the number and aggregate cost of such claims.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.26 <U>Absence of Certain Developments</U>. Except as set forth on <U>Schedule&nbsp;3.26</U>
and except as expressly contemplated by this Agreement, since March&nbsp;31, 2010:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;no Seller or Transferred Subsidiary has suffered any theft, damage, destruction or
casualty loss in excess of $100,000 to any property or asset, whether or not covered by insurance,
or suffered any material damage to or destruction of its Books and Records;
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;no Seller or Transferred Subsidiary has sold, leased, licensed, assigned or transferred to
any Person any property or asset, except for sales of Inventory in the Ordinary Course of Business,
or canceled without fair consideration any material debts or claims owing to or held by it, and no
Seller or Transferred Subsidiary has committed to do any of the foregoing;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;there has been no change in reserve, underwriting or claims handling policies or
procedures with respect to any of the Insurance Subsidiaries;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;no Insurance Subsidiary has effected or consented to a recapture under any Reinsurance
Contract;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;no Transferred Subsidiary has implemented any employee layoff requiring notice under the
Worker Adjustment and Retraining Notification Act of 1988, as amended (the &#147;<U>WARN Act</U>&#148;), or
any similar state or local Law;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(f)&nbsp;no Seller or Transferred Subsidiary has declared, set aside or paid any dividend or other
distribution of cash or other assets;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(g)&nbsp;no Seller or Transferred Subsidiary has repurchased, redeemed or otherwise acquired any of
its outstanding stock or other equity interests;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(h)&nbsp;except to the extent necessary to comply with GAAP, no Seller or Transferred Subsidiary
has made any material change in (i)&nbsp;any method of accounting or any of its accounting policies or
practices, or (ii)&nbsp;any Tax reporting policies, principles, methods or periods;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(i)&nbsp;no Seller or Transferred Subsidiary has waived, compromised or cancelled any account,
debt, right or claim having a value to any Seller or Transferred Subsidiary of more than $50,000,
other than in the Ordinary Course of Business consistent with past practice;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(j)&nbsp;no Seller or Transferred Subsidiary has instituted, been named as a defendant in, or
settled any material litigation;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(k)&nbsp;no Seller or Transferred Subsidiary has issued, created, incurred, assumed or guaranteed
any Indebtedness, other than (i)&nbsp;the Virgo Indebtedness, (ii)&nbsp;Indebtedness arising under the
Textron Facility, (iii)&nbsp;construction lending facilities entered into in the Ordinary Course of
Business by CountryPlace Mortgage, Ltd. with third party lenders, and (iv)&nbsp;Indebtedness arising
under the DIP Facility;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(l)&nbsp;the Transferred Subsidiaries have not made or undertaken any capital expenditure in excess
of $100,000 individually or $300,000 in the aggregate; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(m)&nbsp;no Seller or Transferred Subsidiary has entered into any Contract or made any binding
commitment for any of the above-noted events to occur after the date of this Agreement.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.27 <U>Prohibited Payments</U>. To the Knowledge of Sellers, no Transferred Subsidiary nor
any of its directors, employees or agents, in each case, acting on behalf, for or associated
with such Transferred Subsidiary, has directly or indirectly (i)&nbsp;made any contribution gift,
bribe, rebate, payoff, influence payment, kickback or other payment to any Person, private or
public, regardless of form, whether in money, property, or services (A)&nbsp;to obtain favorable
treatment in securing business, (B)&nbsp;to pay for favorable treatment for business secured, (C)&nbsp;to
obtain special concessions or for special concessions already obtained, for or in respect of such
Transferred Subsidiary, or (D)&nbsp;in violation of any Law, or (ii)&nbsp;established or maintained any fund
or asset that has not been recorded in the books and records of such Transferred Subsidiary.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.28 <U>Bank Accounts; Lock Boxes; Powers of Attorney</U>. Sellers have delivered to
Purchaser a complete and accurate list of all bank and other financial institution accounts and
lock boxes maintained by any Transferred Subsidiary, each identified by name and address of the
applicable bank or financial institution and account number, a list of Persons authorized to sign
or transact business on behalf of each Transferred Subsidiary with respect to each such account or
lock box and a list of Persons with authorized access to each such lock box. <U>Schedule&nbsp;3.28</U>
sets forth a complete and accurate list of each Person who is currently the holder of a power of
attorney given by any Transferred Subsidiary.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.29 <U>Brokers</U>. Except for the fees payable by Sellers to Raymond James &#038; Associates,
Inc. (whose fees shall be payable solely by Sellers), Sellers have not paid or agreed to pay, or
received any Claim with respect to, any brokerage commissions, finders&#146; fees or similar
compensation in connection with the transactions contemplated hereby.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.30 <U>Disclaimer</U>. THE REPRESENTATIONS AND WARRANTIES MADE BY SELLERS IN THIS AGREEMENT
(INCLUDING THE DISCLOSURE SCHEDULES) AND IN ANY AGREEMENT, DOCUMENT OR INSTRUMENT TO BE EXECUTED
AND DELIVERED BY SELLERS (OR ANY OF THEM) AT THE CLOSING ARE THE EXCLUSIVE REPRESENTATIONS AND
WARRANTIES MADE BY SELLERS. SELLERS HEREBY DISCLAIM ANY OTHER EXPRESS OR IMPLIED REPRESENTATIONS
AND WARRANTIES. SELLERS DO NOT MAKE, AND HEREBY DISCLAIM, ANY REPRESENTATIONS OR WARRANTIES
REGARDING PRO-FORMA FINANCIAL INFORMATION, FINANCIAL PROJECTIONS OR OTHER FORWARD-LOOKING
STATEMENTS OF THE BUSINESS, EXCEPT FOR ANY PRO-FORMA FINANCIAL STATEMENTS FILED WITH
INSURANCE-RELATED GOVERNMENTAL BODIES OR FINANCE-RELATED GOVERNMENTAL BODIES. EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT (INCLUDING THE DISCLOSURE SCHEDULES) OR IN ANY AGREEMENT, DOCUMENT OR
INSTRUMENT TO BE EXECUTED AND DELIVERED BY THE SELLERS (OR ANY OF THEM) AT THE CLOSING, (A)&nbsp;SELLERS
ARE SELLING THE TRANSFERRED ASSETS HEREUNDER ON AN &#147;AS IS, WHERE IS, WITH ALL FAULTS&#148; BASIS, AND
(B)&nbsp;THE SELLERS MAKE NO REPRESENTATIONS OR EXPRESS OR IMPLIED WARRANTIES AS TO THE BUSINESS, THE
TRANSFERRED ASSETS OR THE ASSUMED LIABILITIES, INCLUDING AS TO THEIR PHYSICAL CONDITION, USABILITY,
MERCHANTABILITY, PROFITABILITY OR FITNESS FOR ANY PURPOSE.
</DIV>
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<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE IV</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>REPRESENTATIONS AND WARRANTIES OF PURCHASER</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In order to induce Sellers to enter into this Agreement and consummate the transactions
contemplated hereby, Purchaser hereby represents and warrants to Sellers as follows:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">4.1 <U>Due Incorporation and Authority</U>. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware and has all necessary
corporate power and authority to own, lease and operate its properties and to carry on its business
as now being conducted. Purchaser has all requisite corporate power and authority to enter into
this Agreement, carry out its obligations hereunder and consummate the transactions contemplated
hereby. The execution and delivery by Purchaser of this Agreement, the performance by Purchaser of
its obligations hereunder and the consummation by Purchaser of the transactions contemplated hereby
have been duly authorized by all requisite corporate action on the part of Purchaser. This
Agreement has been duly executed and delivered by Purchaser, and, assuming the due authorization,
execution and delivery hereof by Sellers, this Agreement constitutes the legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except to the
extent enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting creditors rights generally or by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">4.2 <U>No Conflicts</U>. The execution and delivery by Purchaser of this Agreement, the
consummation of the transactions contemplated hereby, and the performance by Purchaser of this
Agreement in accordance with its terms shall not:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;violate the certificate of incorporation or by-laws of Purchaser or contravene any
resolution adopted by the directors or shareholders of Purchaser;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(b)&nbsp;violate any Law to which Purchaser or its assets are bound or subject; or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;violate, result in any breach of, constitute a default under, or require any consent of
any Person (including any Governmental Body) pursuant to any contract.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">4.3 <U>Litigation</U>. There are no Claims pending or, to the knowledge of Purchaser,
threatened by or against Purchaser before any Governmental Body that, either individually or in the
aggregate, would reasonably be expected to prevent or delay the consummation by Purchaser of the
transactions contemplated by this Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">4.4 <U>Purchaser&#146;s Financial Capability</U>. Purchaser has, or as of the Closing Date shall
have, available funds necessary to consummate the transactions contemplated by this Agreement,
including payment of the Purchase Price and assumption of the Assumed Liabilities. Without
limiting the foregoing, Purchaser is (or, upon the Closing, shall be) capable of satisfying the
conditions contained in sections 365(b)(1)(C) and 365(f)(2)(B) of the Bankruptcy Code with respect
to each of the Assumed Contracts.
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">4.5 <U>Brokers</U>. Purchaser has not paid or agreed to pay, or received any Claim with
respect to, any brokerage commissions, finders&#146; fees or similar compensation in connection with the
transactions contemplated hereby.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">4.6 <U>Acknowledgement of Sellers&#146; Disclaimer</U>. PURCHASER REPRESENTS, WARRANTS AND
ACKNOWLEDGES THAT, EXCEPT AS SET FORTH IN THIS AGREEMENT (INCLUDING THE DISCLOSURE SCHEDULES) AND
IN ANY AGREEMENT, DOCUMENT OR INSTRUMENT TO BE EXECUTED AND DELIVERED BY SELLERS (OR ANY OF THEM)
AT THE CLOSING: (A)&nbsp;PURCHASER IS PURCHASING THE TRANSFERRED ASSETS ON AN &#147;AS IS, WHERE IS, WITH
ALL FAULTS&#148; BASIS BASED SOLELY ON PURCHASER&#146;S OWN INVESTIGATION OF THE TRANSFERRED ASSETS AND (B)
NEITHER SELLERS NOR ANY OF THEIR REPRESENTATIVES HAVE MADE ANY REPRESENTATIONS, WARRANTIES OR
GUARANTEES, EXPRESS, IMPLIED OR STATUTORY, WRITTEN OR ORAL, WITH RESPECT TO THE TRANSFERRED ASSETS
(OR ANY PART THEREOF), THE FINANCIAL PERFORMANCE OF THE BUSINESS OR THE TRANSFERRED ASSETS, OR THE
PHYSICAL CONDITION OF THE TRANSFERRED ASSETS.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">4.7 <U>Purchaser Disclaimer</U>. THE REPRESENTATIONS AND WARRANTIES MADE BY PURCHASER IN
THIS AGREEMENT AND IN ANY AGREEMENT, DOCUMENT OR INSTRUMENT TO BE EXECUTED AND DELIVERED BY
PURCHASER AT THE CLOSING ARE THE EXCLUSIVE REPRESENTATIONS AND WARRANTIES MADE BY PURCHASER.
PURCHASER HEREBY DISCLAIMS ANY OTHER EXPRESS OR IMPLIED REPRESENTATIONS AND WARRANTIES.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE V</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>COVENANTS AND AGREEMENTS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">5.1 <U>Operation of the Business</U>. Subject to any restrictions and obligations imposed by
the Bankruptcy Court, Sellers shall not, nor shall they cause or permit any Transferred Subsidiary
to, engage in any practice, take any action or enter into any transaction outside the Ordinary
Course of Business between the date hereof and the Closing Date. In particular (but without
limitation), between the date hereof and the earlier of the Closing Date or the date of termination
of this Agreement pursuant to <U>Section&nbsp;8.1</U>, without the prior written consent of Purchaser:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;Sellers shall not, nor shall they cause or permit any Transferred Subsidiary to, (i)&nbsp;sell,
transfer, lease (as lessor), sublease (as sublessor), license (as licensor), encumber or otherwise
dispose of any property or asset or any interest therein, other than Inventory sold or disposed of
in the Ordinary Course of Business in the Home Business, insurance products sold in the Ordinary
Course of Business in the Insurance Business and mortgage finance products sold in the Ordinary
Course of Business in the Finance Business, and other than dispositions of Excluded Assets, (ii)
terminate or modify any Assumed Contract or any Contract to which any Transferred Subsidiary is a
party or by which it is bound, (iii)&nbsp;enter into any Contract that would cause the representation
and warranty contained in <U>Section&nbsp;3.10(a)</U> or <U>3.10(b)</U> to be untrue had such Contract
been entered into prior to the date hereof, other than any such Contract entered
into in the Ordinary Course of Business having a value or cost to any Seller or Transferred
Subsidiary of less than $50,000, (iv)&nbsp;except as approved by the Bankruptcy Court as part of a key
employee retention plan, make any change in the compensation payable or to become payable to any
director or employee of any Seller or Transferred Subsidiary, (v)&nbsp;make, declare or agree to any
dividend, distribution, loan or other disposition of cash or any other asset from any Transferred
Subsidiary to any Seller, or (vi)&nbsp;issue, sell, assign, transfer or grant any equity interest in any
Transferred Subsidiary or any option, warrant, right or other instrument providing for the right,
directly or indirectly, to purchase or otherwise acquire any equity interest in any Transferred
Subsidiary; and
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;Sellers shall and, as applicable, shall cause the Transferred Subsidiaries to, (i)&nbsp;use
commercially reasonable efforts to preserve intact the goodwill of the Business and the
relationships of Sellers and the Transferred Subsidiaries with their customers, vendors, suppliers,
creditors, agents, equipment lessors, service providers, employees and others having business
relations with Sellers, the Transferred Subsidiaries and the Business, (ii)&nbsp;continue to maintain,
service and protect the Transferred Assets and the assets of the Transferred Subsidiaries in the
same manner as maintained, serviced and protected on the date hereof, and in any event in a
commercially reasonable and prudent manner, (iii)&nbsp;continue to maintain the books and records
related to the Business, the Transferred Assets, the Assumed Liabilities and the assets and
Liabilities of the Transferred Subsidiaries on a basis consistent with Sellers&#146; and the Transferred
Subsidiaries&#146; past practice, and in any event in a commercially reasonable and prudent manner; (iv)
report periodically to Purchaser, as Purchaser may reasonably request, concerning the status of the
Business, the Transferred Assets, the Assumed Liabilities and the assets and Liabilities of the
Transferred Subsidiaries, (v)&nbsp;maintain compliance, in all material respects, with all Laws that
relate to the Business, the Transferred Assets, the Assumed Liabilities and the assets and
Liabilities of the Transferred Subsidiaries (other than the reporting requirements of the
Securities and Exchange Commission), and (vi)&nbsp;pay all debts and obligations (including all trade
payables) incurred by it in the Ordinary Course of the Business.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">5.2 <U>Confidentiality</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;Until the Closing Date, each party hereto shall hold in confidence, and shall cause its
respective Affiliates and Representatives to hold in confidence, all Confidential Information
obtained by any of them from any other party or its Affiliates or Representatives relating to such
other party or the transactions contemplated hereby. Notwithstanding the foregoing, the party
receiving Confidential Information from the party disclosing such Confidential Information may
disclose such Confidential Information: (i)&nbsp;to the extent that such disclosure was previously
authorized in writing by the disclosing party; (ii)&nbsp;to any Governmental Body, with valid and
competent jurisdiction thereof, if the receiving party is directed to disclose such Confidential
Information to and by such Governmental Body, <U>provided</U> that the receiving party shall
provide written notice of such disclosure to the disclosing party; (iii)&nbsp;to the receiving party&#146;s
Affiliates and Representatives who have a need to know such information solely for purposes of
assisting in regard to this Agreement and the transactions contemplated hereby, and who are subject
to confidentiality obligations to the receiving party; (iv)&nbsp;to the extent that disclosure is
required under any applicable Law; or (v)&nbsp;to the Bankruptcy Court or to any Person in connection
with the Bankruptcy Case (such instances described in clauses (i)-(iv) above being referred to
herein as &#147;<U>Permitted Disclosures</U>&#148;). Except as otherwise set forth herein, no party
shall disclose or make use of, and each party shall cause its respective Affiliates and
Representatives not to disclose or make use of, the other party&#146;s Confidential Information without
the prior written consent of such other party. In the event that this Agreement is terminated,
each party shall, and shall cause its respective Affiliates and Representatives to, promptly return
to the other party or destroy all documents (including all copies thereof) containing Confidential
Information obtained from such other party or its Affiliates or Representatives.
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;After the Closing, each Seller shall maintain as confidential and shall not use or
disclose (except as required by Law or as authorized in writing by Purchaser in its sole
discretion) any Confidential Information of Purchaser or any Confidential Information in any way
related to the Business, the Transferred Assets, the Assumed Liabilities or the assets and
Liabilities of the Transferred Subsidiaries, except for Permitted Disclosures.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;Each party hereto further agrees to take all appropriate steps (and to cause each of its
Affiliates to take all appropriate steps) to safeguard the Confidential Information of each other
party and to protect it against disclosure, misuse, espionage, loss and theft. Each party agrees
to be responsible for enforcing the terms of this <U>Section&nbsp;5.2</U> as to its Representatives and
to take such action, legal or otherwise, to the extent necessary to cause them to comply with the
terms and conditions of this <U>Section&nbsp;5.2</U> and thereby prevent any disclosure of the
Confidential Information by any of its Representatives (including all actions that such party would
take to protect its own trade secrets and confidential information); <U>provided</U>,
<U>however</U>, that the actual expenses of such action, legal or otherwise, shall be paid by the
party whose Confidential Information is being safeguarded in such action, unless such action is
precipitated by the failure of the party undertaking to protect such Confidential Information to
comply with its obligations under this <U>Section&nbsp;5.2(c)</U>. In the event any party is required
by Law to disclose any Confidential Information, such party shall promptly notify the other party
in writing, which notification shall include the nature of the legal requirement and the extent of
the required disclosure, and shall cooperate reasonably with such party to preserve the
confidentiality of such information consistent with applicable Law.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">5.3 <U>Expenses</U>. Except as otherwise specifically provided herein (including the
Exhibits hereto), Purchaser and Sellers shall bear their respective expenses incurred in connection
with the preparation, execution and performance of this Agreement and the transactions contemplated
hereby, including all fees and expenses of their Representatives.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">5.4 <U>Access to Information; Preservation of Records; Litigation Support</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;From the date hereof until the earlier of the Closing or the termination of this Agreement
pursuant to <U>Section&nbsp;8.1</U>, upon reasonable notice, Sellers shall, subject to ParentCo
approval, not to be unreasonably withheld, (i)&nbsp;afford the Representatives of Purchaser reasonable
access, during normal business hours, to the offices, plants, warehouses, properties, books and
records and employees of Sellers and the Transferred Subsidiaries, subject to applicable Law and
arrangements being made by and through one or more executive officers of ParentCo, and (ii)&nbsp;furnish
to the Representatives of Purchaser such additional financial and operating data and other
information regarding the operations of the Business as Purchaser may from time to time reasonably
request.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;Following the Closing, Purchaser shall, and shall cause its Affiliates to, preserve and
keep the records (including the Books and Records) held by them relating to the Business prior to
the Closing for a period of four (4)&nbsp;years from the Closing Date (or longer if required by
applicable Law) and shall make such records and personnel available to Sellers as may be reasonably
requested by any Seller in connection with, among other things, the preparation of any Tax Returns,
the Bankruptcy Case, any insurance claims by, Claims or Tax audits against or governmental
investigations of, any Seller or any of their Affiliates.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;After the Closing, Purchaser shall have the right (but not the obligation) to have any
Claim made by or against or otherwise involving Purchaser related to any Warranty Liability
purported assumed by Purchaser pursuant to <U>Section&nbsp;1.3(b)</U> to be adjudicated before the
Bankruptcy Court, notwithstanding any venue or other dispute resolution provision to the contrary
in the applicable warranty documents.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">5.5 <U>Regulatory and Other Authorizations; Consents</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;Each of the parties hereto shall use its commercially reasonable efforts to (i)&nbsp;take, or
cause to be taken, all appropriate action, and do, or cause to be done, all things necessary,
proper or advisable under any Law or otherwise to consummate and make effective the transactions
contemplated by this Agreement, (ii)&nbsp;obtain any consents, approvals or orders required to be
obtained or made in connection with the authorization, execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby, and (iii)&nbsp;make all filings and give any
notice, and thereafter make any other submissions either required or reasonably deemed appropriate
by each of the parties, with respect to this Agreement and the transactions contemplated hereby
required under any applicable Law.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;The parties hereto shall work closely and cooperatively and consult with each other in
connection with the making of all such filings and notices, including by providing copies of all
such documents to the non-filing party and its advisors a reasonable period of time prior to filing
or the giving of notice. Each party hereto shall pay for its own filing fees and other charges
arising out of the actions taken under this <U>Section&nbsp;5.5</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">5.6 <U>Further Actions</U>. Each of the parties hereto shall execute such documents and take
such further actions as may be reasonably required or desirable to carry out the provisions hereof
and give effect to the transactions contemplated hereby.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">5.7 <U>Bankruptcy Court Approval</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;Within five (5)&nbsp;days following the parties&#146; execution and delivery of this Agreement,
Sellers shall:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(i)&nbsp;make all applicable filings with the Bankruptcy Court and take all other applicable
actions to commence the Bankruptcy Case in the Bankruptcy Court;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(ii)&nbsp;file with the Bankruptcy Court a motion (in form and substance reasonably satisfactory to
Purchaser) seeking entry of an order of the Bankruptcy Court for interim approval of the DIP
Facility (the &#147;<U>Interim DIP Facility Order</U>&#148;) and a motion (in form
and substance reasonably satisfactory to Purchaser) seeking entry of an order of the
Bankruptcy Court for final approval of the DIP Facility;
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(iii)&nbsp;file with the Bankruptcy Court a motion or motions (in form and substance reasonably
satisfactory to Purchaser) (the &#147;<U>Bidding Procedures Motion</U>&#148;) seeking entry of an order of
the Bankruptcy Court (the &#147;<U>Bidding Procedures Order</U>&#148;) approving, among other things, (A)
Purchaser as the stalking horse bidder for the Transferred Assets, (B)&nbsp;notice and service
requirements to creditors and parties in interest with respect to the transactions contemplated
hereby, (C)&nbsp;the Break-Up Fee and the Expense Reimbursement (and deeming the Break-Up Fee an
administrative priority expense entitled to first priority under sections 503(b) and 507(a)(1) of
the Bankruptcy Code and which shall be a super-priority first priority Lien on the Transferred
Assets pursuant to section 364 of the Bankruptcy Code), and (D)&nbsp;the bidding procedures related to
the sale of the Transferred Assets pursuant to this Agreement (the &#147;<U>Bidding Procedures</U>&#148;),
including the ability of Purchaser, to the extent of its interest as assignee of Fleetwood under
the DIP Facility, to credit bid all outstanding amounts owing by Sellers under the DIP Facility,
which Bidding Procedures Order shall be substantially in the form of <U>Exhibit&nbsp;C</U> hereto (with
such changes thereto as Sellers and Purchaser may mutually approve, which approval shall not be
unreasonably withheld, conditioned or delayed); and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(iv)&nbsp;file with the Bankruptcy Court a motion or motions (in form and substance reasonably
satisfactory to Purchaser) seeking entry of an order of the Bankruptcy Court approving the sale of
the Transferred Assets pursuant to this Agreement (the &#147;<U>Sale Approval Order</U>&#148;), which Sale
Approval Order shall be substantially in the form of <U>Exhibit&nbsp;D</U> hereto (with such changes
thereto as Sellers and Purchaser may mutually approve, which approval shall not be unreasonably
withheld, conditioned or delayed).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;Sellers shall promptly take such actions as are reasonably requested by Purchaser,
including assisting with the filing of affidavits or other documents or information with the
Bankruptcy Court for purposes, among others, of (i)&nbsp;demonstrating that Purchaser is a &#147;good faith&#148;
purchaser under section 363(m) of the Bankruptcy Code, and (ii)&nbsp;establishing adequate assurance of
future performance within the meaning of section 365 of the Bankruptcy Code.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;Sellers shall cooperate with Purchaser and its representatives in connection with the Sale
Approval Order, the Bidding Procedures Order and the Bankruptcy Case proceedings in connection
therewith, which cooperation shall include consulting with Purchaser at its reasonable request
concerning the status of such proceedings and providing Purchaser with copies of requested
pleadings, notices, proposed orders and other documents relating to such proceedings as soon as
reasonably practicable prior to any submission thereof to the Bankruptcy Court.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;Sellers shall not submit any plan to the Bankruptcy Court for confirmation that shall
conflict with, supersede, abrogate, nullify or restrict the terms of this Agreement, or in any way
prevent or interfere with the consummation or performance of the transactions contemplated by this
Agreement, including any transaction contemplated by or approved pursuant to the Sale Approval
Order or the Bidding Procedures Order.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">5.8 <U>Books and Records</U>. If, in order to properly prepare documents required to be
filed with Governmental Bodies or its financial statements, it is necessary that any party hereto
or any successors thereto be furnished with additional information relating to the Business, the
Transferred Assets, the Assumed Liabilities or any of the assets or Liabilities of any Transferred
Subsidiary, and such information is in the possession of any other party hereto or any successor
thereto or any of their respective Affiliates, such party agrees to use commercially reasonable
efforts to furnish or cause to be furnished such information to such other party, at the reasonable
cost and expense of the party being furnished such information.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">5.9 <U>Tax Matters</U>.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(a) <U>Filing of Tax Returns; Payment of Taxes</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(i)&nbsp;The parties acknowledge and agree that the taxable year for all Transferred Subsidiaries
shall end on the Closing Date, and Sellers and Purchaser shall take all applicable actions and make
all applicable filings to reflect such taxable year end. Following the Closing Date (to the extent
not filed as of the Closing Date), ParentCo shall timely prepare or cause to be prepared all Tax
Returns that are required to be filed with respect to the Transferred Subsidiaries for all taxable
periods ending on the Closing Date. All such Tax Returns shall be prepared on a basis consistent
with past practice, procedures and accounting methods, expect to the extent otherwise required by
Law and except for the aforementioned taxable year end being the Closing Date. At least fifteen
(15)&nbsp;Business Days prior to filing any such Tax Return, ParentCo shall provide Purchaser with a
copy of such Tax Return (or applicable portion thereof) for Purchaser&#146;s review and comment.
ParentCo shall cooperate reasonably with Purchaser to incorporate any change to any such Tax Return
(or applicable portion thereof) that Purchaser proposes in writing to ParentCo at least five (5)
Business Days before the filing date for such Tax Return and that is intended to correct or more
accurately reflect the Tax position or Liabilities of the Transferred Subsidiary with respect to
which such Tax Return applies. All Taxes payable by or with respect to any Transferred Subsidiary
for any taxable period ending on or before the Closing Date shall be payable by Sellers. Sellers
shall be entitled to all Tax refunds with respect to Taxes paid by any Transferred Subsidiary (or
by any Seller on behalf of or with respect to any Transferred Subsidiary) with respect to any
taxable period ending on or before the Closing Date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(ii)&nbsp;Following the Closing Date, Purchaser shall timely prepare or cause to be prepared all
Tax Returns that are required to be filed with respect to the Transferred Subsidiaries for all
taxable periods (A)&nbsp;that begin on or before the Closing Date and end after the Closing Date, or (B)
that begin after the Closing Date. Subject to the provisions of <U>Section&nbsp;5.9(a)(i)</U>, all
Taxes payable by or with respect to any Transferred Subsidiary for any taxable period beginning on
or before the Closing Date and ending after the Closing Date shall be payable by Purchaser or the
applicable Transferred Subsidiary (it being understood and agreed by the parties hereto that, based
on the agreed upon Closing Date taxable year end referred to in <U>Section&nbsp;5.9(a)(i)</U>, such
Taxes shall not include any income Tax applicable to any Transferred Subsidiary for any period of
time up to and including the Closing Date). Purchaser shall be entitled to all Tax refunds with
respect to Taxes paid by Purchaser or any Transferred Subsidiary with respect to any taxable period
beginning on or before the Closing Date and ending after the Closing Date or with respect to any
taxable period that begins after the Closing Date.
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;<U>Sales, Use and Other Transfer Taxes</U>. Any sales, use, purchase, transfer, deed,
stamp, documentary stamp, use or other similar Taxes and recording charges due and which may be
payable by reason of the sale of the Transferred Assets or the assumption of the Assumed
Liabilities under this Agreement or the transactions contemplated herein shall be borne and timely
paid by Sellers. Sellers shall be responsible for all income, profit and similar Taxes incurred or
imposed with respect to the sale of the Transferred Assets by Sellers. Purchaser shall provide
Sellers with resale exemption certificates as are appropriate and available to Purchaser under
applicable Law. The parties hereto agree to cooperate in the filing of all necessary documentation
and all Tax Returns with respect to all such Taxes, including any available pre-sale filing
procedure.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;<U>Cooperation</U>. The parties hereto shall cooperate reasonably with each other and
with each other&#146;s respective Representatives, including accounting firms and legal counsel, in
connection with the preparation or audit of any Tax Return(s) and any Tax claim or litigation in
respect of the Transferred Assets, the Assumed Liabilities or any of the assets or Liabilities of
any Transferred Subsidiary that include whole or partial taxable periods, activities, operations or
events on or prior to the Closing Date, which cooperation shall include making available employees,
if any, for the purpose of providing testimony and advice, or original documents, or either of
them; <U>provided</U>, <U>however</U>, that such cooperation shall be conditioned on the party
requesting such cooperation either directly paying or reimbursing the cooperating party or its
Affiliate for (i)&nbsp;reasonable compensation costs of employees who provide such cooperation, (ii)
travel costs of such employees incurred in connection with providing such cooperation, (iii)
reasonable costs of document retrieval, review and/or delivery incurred in providing such
cooperation, and (iv)&nbsp;any other reasonable costs incurred in providing such cooperation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">5.10 <U>Notification of Certain Matters</U>. Until the earlier of the Closing or the
termination of this Agreement pursuant to <U>Section&nbsp;8.1</U>, each party hereto shall promptly
notify the other party in writing of any fact, change, condition, circumstance or occurrence or
nonoccurrence of any event of which it is aware that shall or is reasonably likely to result in any
of the conditions set forth in <U>Article&nbsp;VI</U> or <U>Article&nbsp;VII</U> becoming incapable of
being satisfied. In furtherance of the foregoing, ParentCo (on behalf of Sellers) shall give
prompt notice to Purchaser of (i)&nbsp;the occurrence or nonoccurrence of any event that would cause
either (A)&nbsp;any representation or warranty of Sellers contained in this Agreement to be untrue or
inaccurate in any material respect at any time after the date hereof, or (B)&nbsp;directly or
indirectly, any Material Adverse Effect, (ii)&nbsp;any material failure of Sellers to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by them hereunder, or
(iii)&nbsp;the termination of employment of any senior manager or the termination of employment or
furlough of any material number of employees of any Seller or Transferred Subsidiary.
Notwithstanding the foregoing, the delivery of any notice pursuant to this <U>Section&nbsp;5.10</U>
shall not (x)&nbsp;be deemed to amend or supplement any Schedule to this Agreement, (y)&nbsp;be deemed to
cure any breach of any representation, warranty covenant or agreement or to satisfy any condition,
or (z)&nbsp;limit or otherwise affect the remedies available hereunder to the party receiving such
notice.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">5.11 <U>Knowledge of Breach</U>. If prior to the Closing Purchaser shall have reason to
believe that any breach of a representation or warranty of Sellers has occurred (other than through
notice from ParentCo), Purchaser shall promptly so notify ParentCo, in reasonable
detail. Nothing in this Agreement, including this <U>Section&nbsp;5.11</U>, shall imply that
Sellers are making any representation or warranty as of any date other than the date of this
Agreement and the Closing Date.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">5.12 <U>Employment Arrangements</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;<U>Future Employment</U>. On the Closing Date, Purchaser may offer employment to those
of Sellers&#146; current employees as Purchaser shall determine in its sole discretion. All such offers
of employment shall be subject to such compensation and other terms of employment as Purchaser
shall determine in its sole discretion. Each such Seller employee who accepts Purchaser&#146;s offer of
employment and is hired by Purchaser is referred to herein as a &#147;<U>Transferred Seller
Employee</U>&#148;. On the Closing Date, the applicable Sellers shall terminate the employment of each
Transferred Seller Employee and Purchaser shall commence its employment of such Transferred Seller
Employee. If Purchaser does not wish to offer employment to any employee of a Seller or if
Purchaser offers such employment but any employee of a Seller refuses to be employed by Purchaser,
the applicable Seller may elect to retain or terminate such employee, but such Seller shall be
solely liable for all costs of any retention or termination of such employee&#146;s employment.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;<U>No Right to Employment</U>. Notwithstanding <U>Section&nbsp;5.12(a)</U>, nothing herein
expressed or implied shall confer upon any of the employees of any Seller or Transferred Subsidiary
or any Transferred Seller Employees any right to employment or continued employment for any
specified period, of any nature or kind whatsoever under or by reason of this Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;<U>No Obligation</U>. Neither Purchaser nor any of its Affiliates shall have any
Liability whatsoever for (i)&nbsp;any compensation or other obligations actually or purported to be
owing to any Transferred Seller Employee by any Seller, including any severance, separation pay,
change of control payments or benefits, retention payments or any other payments or benefits
arising in connection with such employee&#146;s employment by, or termination of employment with, any
Seller before, on or after the Closing Date, or (ii)&nbsp;any Claim under the WARN Act or any similar
state or local Law by any past or present employee of any Seller (whether or not a Transferred
Seller Employee) in connection with Seller&#146;s pre-Closing conduct of the Business or any other
business, including any plant closing or mass layoff.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;<U>Sellers&#146; Cooperation in Review and Hiring of Employees</U>. Subject to applicable Law
and prior approval and arrangements in advance by and through one or more executive officers of
ParentCo, not to be unreasonably withheld or delayed, Sellers shall cooperate with Purchaser and
shall permit Purchaser a reasonable period during normal business hours prior to the Closing Date,
(i)&nbsp;to meet with employees of Sellers and the Transferred Subsidiaries (including managers and
supervisors) at such times as Purchaser shall reasonably request, (ii)&nbsp;to speak with such
employees&#146; managers and supervisors (in each case with appropriate authorizations and releases from
such employees) who are being considered for employment (or in the case of the Transferred
Subsidiaries, continued employment) by Purchaser, (iii)&nbsp;to distribute to such employees such forms
and other documents relating to potential employment (or continued employment) after the Closing;
and (iv)&nbsp;subject to any
restrictions imposed under applicable Law, to permit Purchaser, upon request, to review
personnel files and other relevant employment information regarding such employees.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;<U>Post-Closing Cooperation on Employee Compensation and Benefits</U>. Following the
Closing, Sellers and Purchaser shall cooperate reasonably with each other to provide an orderly
administrative transition to Purchaser of the Transferred Seller Employees and the employees of the
Transferred Subsidiaries, including (i)&nbsp;the provision by Sellers to Purchaser of all necessary or
appropriate documents, records, materials, accounting files and Tax information with respect to the
Transferred Seller Employees and the employees of the Transferred Subsidiaries, and (ii)&nbsp;Sellers&#146;
causing their Employee Benefit Plan providers to assist in the conversion and rollover of employee
benefits for Transferred Seller Employees and the employees of the Transferred Subsidiaries to
Purchaser&#146;s applicable Employee Benefit Plans, including medical, dental, short-term disability,
long-term disability, life insurance and 401(k) plans. ParentCo shall provide Purchaser with
Certificates of Credible Coverage for all health plan participants under any applicable Employee
Benefit Plan of Sellers and/or the Transferred Subsidiaries within thirty (30)&nbsp;days following the
Closing Date. Sellers and Purchaser agree to utilize the standard procedure set forth in IRS
Revenue Procedure 2004-53 with respect to wage reporting for Transferred Seller Employees, such
that Sellers shall be responsible for all reporting of wages and other compensation paid by it to
Transferred Seller Employees before the Closing Date (including furnishing and filing of Forms W-2
and W-3).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(f)&nbsp;<U>Sellers to Retain COBRA Liability</U>. At the Closing, to the extent required by
applicable Law, Purchaser shall assume Sellers&#146; obligations to provide health care continuation
coverage under Tax Code &#167;4980B and ERISA &#167;601 for all M&#038;A Qualified Beneficiaries (as that term is
defined in Treasury Regulations Section&nbsp;54.4980B-9, Q&#038;A-4) of Sellers; <U>provided</U>,
<U>however</U>, that such assumption of Sellers&#146; obligations shall apply only to M&#038;A Qualified
Beneficiaries who timely elect to receive COBRA coverage through Purchaser and only with respect to
claims incurred by such M&#038;A Qualified Beneficiaries after the Closing Date (it being understood and
agreed by the parties hereto that any claim incurred (whether or not reported) by an M&#038;A Qualified
Beneficiary on or before the Closing Date shall constitute an Excluded Liability).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">5.13 <U>Insurance</U>. Between the date hereof and the earlier of the Closing Date or the
date of termination of this Agreement pursuant to <U>Section&nbsp;8.1</U>, Sellers shall, and shall
cause the Transferred Subsidiaries to, at their cost, keep in effect and in good standing all
policies of insurance maintained by any of them to insure the Business, the Transferred Assets and
the assets of the Transferred Subsidiaries (collectively, the &#147;<U>Existing Insurance
Policies</U>&#148;). To the extent that any Existing Insurance Policy insures against any loss,
Liability, Claim, damage or expense resulting from, arising out of, based on or relating to
occurrences arising on or after the date hereof and prior to the Closing with respect to the
Business, the Transferred Assets or the assets of the Transferred Subsidiaries and permit claims to
be made thereunder with respect to such losses, Liabilities, claims, damages or expenses after the
Closing, Sellers shall use their commercially reasonable efforts to obtain an insurance certificate
naming Purchaser as an additional insured under the Existing Insurance Policies.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">5.14 <U>Licensed Computer Software; Consents</U>. Prior to and (if necessary) following the
Closing, to the extent requested by Purchaser, Sellers shall cooperate reasonably and in good
faith to assist Purchaser with obtaining any required third-party consent, waiver or approval
for (i)&nbsp;Sellers&#146; assignment and transfer to Purchaser of the licensed Computer Software to be
included in the Transferred Assets, and (ii)&nbsp;if applicable, the change of control of any
Transferred Subsidiary that is a party to any Computer Software license where such license provides
that a change of control constitutes a deemed assignment of such license requiring the consent of
the licensor or otherwise requires such licensor&#146;s consent or would permit such licensor to
terminate such license; <U>provided</U>, <U>however</U>, that no Seller shall be required to pay
any transfer fee or similar payment to obtain any such consent, waiver or approval. If any such
consent, approval or waiver which is required in order to assign any licensed Computer Software to
be included in the Transferred Assets is not obtained prior to the Closing Date, or if an attempted
assignment would be ineffective or would adversely affect the ability of any Seller to convey its
interest in question to Purchaser, Sellers shall cooperate with Purchaser in good faith and in a
reasonable manner in any lawful arrangement to provide that Purchaser shall receive the interests
of any Seller in the benefits of such licensed Computer Software; <U>provided</U>,
<U>however</U>, that if such consent, waiver or approval is not obtained before the Closing Date,
it shall not be an impediment or condition to any party&#146;s obligation to consummate the Closing
under this Agreement. For the avoidance of doubt, Purchaser shall be solely responsible for
obtaining any approvals, waivers or consents (and paying any fees or costs) related to the
assignment to (or permitted use by) Purchaser of any licensed Computer Software to be included in
the Transferred Assets.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">5.15 <U>Seller Release of Claims Against Transferred Subsidiaries</U>. Effective as of the
time of Closing, Sellers hereby unconditionally waive, release and discharge each Transferred
Subsidiary from and against any and all Claims and Liabilities, whether or not known to Sellers (or
any of them) as of the Closing Date, including any Claim or Liability arising under the Bankruptcy
Code or any other applicable Law.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">5.16 <U>Change of Purchaser&#146;s Name; Dissolution</U>. Within two (2)&nbsp;Business Days following
the earlier of (i)&nbsp;the date on which Purchaser is not selected as the winning bidder in the sale
auction for the Transferred Assets contemplated by the Bidding Procedures and is not selected by
the Bankruptcy Court as the back-up purchaser for the Transferred Assets in the event that the
successful bidder in the sale auction fails to close its purchase of the Transferred Assets that it
agrees to purchase, or (ii)&nbsp;the date on which ParentCo notifies Purchaser in writing of the
completion of closing of the sale of Transferred Assets to either the third-party winning bidder in
the sale auction or another Person designated by the Bankruptcy Court as the back-up bidder,
Purchaser shall either change its name to a name that does not include the words &#147;Palm Harbor
Homes&#148; or any confusingly similar words or cause itself to be wound up and dissolved.
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE VI</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PURCHASER&#146;S CLOSING CONDITIONS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The obligation of Purchaser to consummate the transactions contemplated by this Agreement is
subject to the fulfillment on or prior to the Closing Date of each of the following conditions, any
one or more of which (to the extent permitted by applicable Law) may be waived by Purchaser:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">6.1 <U>Representations and Warranties; Covenants</U>. The representations and warranties of
Sellers contained in this Agreement that are qualified by materiality shall be true and correct and
the representations and warranties of Sellers contained in this Agreement that are not so qualified
shall be true and correct in all material respects, in each case on and as of the Closing Date with
the same effect as though made on the Closing Date, except for changes expressly contemplated by
this Agreement and except for any particular representation or warranty that specifically addresses
matters only as of a particular date (which shall remain true as of such date, to the extent
required above), except where such failure to be true and correct has been or shall be cured,
remedied or otherwise accounted for pursuant to the Sale Approval Order. The covenants and
agreements contained in this Agreement to be complied with by Sellers at or before the Closing
shall have been complied with in all material respects. At Closing, Purchaser shall have received
a certificate of Sellers (the &#147;<U>Sellers&#146; Certificate</U>&#148;) with respect to such truth and
correctness of Sellers&#146; representations and warranties and such compliance by Sellers with their
covenants and agreements hereunder signed by a duly authorized officer thereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">6.2 <U>No Intervening Law</U>. No Governmental Body shall have enacted, issued, promulgated,
enforced or entered any Law (whether temporary, preliminary or permanent) which is in effect and
has the effect of making the transactions contemplated by this Agreement illegal or otherwise
restraining or prohibiting consummation of such transactions and which is not satisfied or resolved
or preempted by the Sale Approval Order.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">6.3 <U>No Legal Proceedings</U>. No Claim by or before a Governmental Body (including any
proceeding over which the Bankruptcy Court has jurisdiction under 28 U.S.C. &#167; 157(b) and (c)),
shall have been made, instituted or threatened against any Seller, Transferred Subsidiary or
Purchaser seeking to restrain or prohibit or to obtain substantial damages with respect to the
consummation of the transactions contemplated hereby.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">6.4 <U>Bankruptcy Filing</U>. The Bankruptcy Case shall not have been dismissed or converted
to one or more proceedings under chapter 7 of the Bankruptcy Code, and no trustee or examiner shall
have been appointed for Sellers (or any of them), and the automatic stay under section 362 of the
Bankruptcy Code shall not have been lifted, modified or annulled as to any Transferred Assets
having a value, either individually or in the aggregate, of at least $1,000,000.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">6.5 <U>Final Orders</U>. The Bankruptcy Court shall have entered the Sale Approval Order and
a final order approving the DIP Facility, and the Sale Approval Order and such order approving the
DIP Facility shall have become Final Orders.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">6.6 <U>Regulatory Approvals</U>. All required approvals of Governmental Bodies for
Purchaser&#146;s purchase of the Transferred Subsidiaries shall have been obtained by ParentCo, the
applicable Transferred Subsidiaries or Purchaser.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">6.7 <U>Closing Documents</U>. Seller shall have delivered to Purchaser on the Closing Date
the documents required to be delivered pursuant to <U>Sections&nbsp;1.8</U> and <U>2.3</U>.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">6.8 <U>No Purchaser Objection to Initial Price Adjustment</U>. If Purchaser shall have
timely delivered to ParentCo a good faith objection to the Initial Price Adjustment, as
contemplated in <U>Section&nbsp;1.11(a)</U>, such objection shall have been resolved or waived by
Purchaser in writing.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">6.9 <U>No Material Adverse Effect</U>. No event, occurrence, fact, condition, change,
development or circumstance shall have arisen or occurred since the date of this Agreement which
has had or could reasonably be expected to have a Material Adverse Effect.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE VII</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>SELLERS&#146; CLOSING CONDITIONS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The obligation of Sellers to consummate the transactions contemplated by this Agreement is
subject to the fulfillment on or prior to the Closing Date of each of the following conditions, any
one or more of which (to the extent permitted by applicable Law) may be waived by ParentCo (on
behalf of Sellers):
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">7.1 <U>Representations and Warranties; Covenants</U>. The representations and warranties of
Purchaser contained in this Agreement that are qualified by materiality shall be true and correct,
and the representations and warranties of Purchaser contained in this Agreement that are not so
qualified shall be true and correct in all material respects, in each case at and as of the Closing
Date with the same effect as though made on the Closing Date, except for changes expressly
contemplated by this Agreement and except for any particular representation or warranty that
specifically addresses matters only as of a particular date (which shall remain true as of such
date, to the extent required above), except where such failure to be true and correct has been or
shall be cured, remedied or otherwise accounted for pursuant to the Sale Approval Order. The
covenants and agreements contained in this Agreement to be complied with by Purchaser at or before
the Closing shall have been complied with in all material respects. At Closing, ParentCo shall
have received a certificate of Purchaser (the &#147;<U>Purchaser&#146;s Certificate</U>&#148;) with respect to
such truth and correctness of Purchaser&#146;s representations and warranties and such compliance by
Purchaser with its covenants and agreements hereunder signed by a duly authorized officer thereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">7.2 <U>No Intervening Law</U>. No Governmental Body shall have enacted, issued, promulgated,
enforced or entered any Law (whether temporary, preliminary or permanent) which is in effect and
has the effect of making the transactions contemplated by this Agreement illegal or otherwise
restraining or prohibiting consummation of such transactions and which is not satisfied or resolved
or preempted by the Sale Approval Order.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">7.3 <U>Sale Approval Order</U>. The Bankruptcy Court shall have entered the Sale Approval
Order, and the Sale Approval Order shall have become a Final Order.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">7.4 <U>No Legal Proceedings</U>. No Claim by or before a Governmental Body (including any
proceeding over which the Bankruptcy Court has jurisdiction under 28 U.S.C. &#167; 157(b) and (c)),
shall have been made, instituted or threatened against any Seller, Transferred Subsidiary or
Purchaser seeking to restrain or prohibit or to obtain substantial damages with respect to the
consummation of the transactions contemplated hereby.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">7.5 <U>Bankruptcy Filing</U>. The Bankruptcy Case shall not have been dismissed or converted
to a proceeding under chapter 7 of the Bankruptcy Code and no trustee or examiner shall have been
appointed.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">7.6 <U>Final Orders</U>. The Bankruptcy Court shall have entered the Sale Approval Order and
a final order approval the DIP Facility, and the Sale Approval Order and such order approval the
DIP Facility shall have become Final Orders.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">7.7 <U>Regulatory Approvals</U>. All required approvals of Governmental Bodies for
Purchaser&#146;s purchase of the Transferred Subsidiaries shall have been obtained by ParentCo, the
applicable Transferred Subsidiaries or Purchaser.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">7.8 <U>Closing Documents</U>. Purchaser shall have delivered to ParentCo on the Closing Date
the documents and payments required to be delivered by it pursuant to <U>Sections&nbsp;1.9</U> and
<U>2.4</U>.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE VIII</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>TERMINATION OF AGREEMENT</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">8.1 <U>Termination Prior to Closing</U>. Notwithstanding anything in this Agreement to the
contrary, this Agreement may be terminated, and the transactions contemplated by this Agreement
abandoned, at any time prior to the Closing, upon notice by the terminating party to the other
party as follows:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(a)&nbsp;by the mutual written consent of ParentCo (on behalf of Sellers) and Purchaser;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;by either ParentCo (on behalf of Sellers) or Purchaser if the Closing shall not have
occurred prior to the date that is one hundred fifty (150)&nbsp;days after the date hereof (the
&#147;<U>Termination Date</U>&#148;); <U>provided</U>, <U>however</U>, that the right to terminate this
Agreement under this <U>Section&nbsp;8.1(b)</U> shall not be available to any party whose failure to
fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted
in, the failure of the Closing to occur prior to such date;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;(i)&nbsp;by ParentCo (on behalf of Sellers), if Purchaser breaches or fails to perform in any
respect any of its representations, warranties or covenants contained in this Agreement and such
breach or failure to perform (A)&nbsp;would give rise to the failure of a condition set forth in
<U>Article&nbsp;VII</U>, (B)&nbsp;cannot be or has not been cured within ten (10)&nbsp;Business Days following
delivery of written notice of such breach or failure to perform, and (C)&nbsp;has not been waived by
ParentCo (on behalf of Sellers); or (ii)&nbsp;by Purchaser, if any Seller breaches or fails to perform
in any respect any of its representations, warranties or covenants contained in this Agreement and
such breach or failure to perform (X)&nbsp;would give rise to the failure of a condition set forth in
<U>Article&nbsp;VI</U>, (Y)&nbsp;cannot be or has not been cured within ten (10)&nbsp;Business Days following
delivery of written notice of such breach or failure to perform, and (Z)&nbsp;has not been waived by
Purchaser.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;(i)&nbsp;by ParentCo (on behalf of Sellers), if any of the conditions set forth in <U>Article
VII</U> shall have become incapable of fulfillment prior to the Termination Date, or (ii)&nbsp;by
Purchaser, if any of the conditions set forth in <U>Article&nbsp;VI</U> shall have become
incapable of fulfillment prior to the Termination Date; <U>provided</U>, <U>however</U>, that the
right to terminate this Agreement pursuant to this <U>Section&nbsp;8.1(d)</U> shall not be available if
the failure of the party so requesting termination to fulfill any obligation under this Agreement
shall have been the cause of the failure of such condition to be satisfied on or prior to the
Termination Date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(e)&nbsp;by either ParentCo (on behalf of Sellers) or Purchaser, if the Bankruptcy Court approves a
sale, transfer or other disposition by Sellers to a Person (or group of Persons) other than
Purchaser of (i)&nbsp;all or substantially all of the Transferred Assets, (ii)&nbsp;the Standard Casualty
Shares and/or the Standard Insurance Shares or substantially all of the assets of the Insurance
Subsidiaries, or (iii)&nbsp;the CountryPlace Shares or substantially all of the assets of the Finance
Subsidiaries (any of which, a &#147;<U>Competing Transaction</U>&#148;); or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(f)&nbsp;by Purchaser (provided that Purchaser is not then in material breach of any provision of
this Agreement), if any of the following shall occur:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(i)&nbsp;the Bankruptcy Case is dismissed or converted to one or more proceedings under chapter 7
of the Bankruptcy Code, a trustee or examiner is appointed for Sellers (or any of them), or the
automatic stay under section 362 of the Bankruptcy Code is lifted, modified or annulled as to
Transferred Assets having a value, either individually or in the aggregate, of at least $1,000,000;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(ii)&nbsp;the Bankruptcy Court denies any portion of the Bidding Procedures Motion with respect to
any of (A)&nbsp;the Break-Up Fee, (B)&nbsp;the Expense Reimbursement, or (C)&nbsp;the ability of Purchaser, to the
extent of its interest as assignee of Fleetwood under the DIP Facility, to credit bid all
outstanding amounts owing by Sellers under the DIP Facility; or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(iii)&nbsp;the Bidding Procedures Order or the Sale Approval Order is modified in any material
respect without the consent of the Purchaser; or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(iv)&nbsp;the Sale Approval Order has not been entered by the Bankruptcy Court and become a Final
Order within ninety (90)&nbsp;days after the date hereof; <U>provided</U>, <U>however</U>, that
Purchaser shall not be entitled to exercise its rights under this clause (iv)&nbsp;later than five (5)
Business Days after such ninety (90)&nbsp;day period has expired or if the Sale Approval Order has been
entered by the Bankruptcy Court prior to Purchaser exercising such rights.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">8.2 <U>Break-up Fee; Expense Reimbursement</U>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;In the event that this Agreement is terminated under <U>Section&nbsp;8.1(e)</U>, and provided
that (i)&nbsp;Purchaser is not in material breach of any provision of this Agreement prior to such
termination and (ii)&nbsp;a Competing Transaction has been consummated, Seller shall pay to Purchaser,
in cash, the sum of $1,100,000 (the &#147;<U>Break-Up Fee</U>&#148;) at the time of the consummation of the
Competing Transaction.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;In the event that this Agreement is terminated under <U>Section&nbsp;8.1(e)</U>, and provided
that (i)&nbsp;Purchaser is not in material breach of any provision of this Agreement prior to such
termination and (ii)&nbsp;a Competing Transaction has been consummated, Seller shall reimburse
Purchaser for reasonable, documented out-of-pocket expenses actually incurred by Purchaser in
connection with this Agreement and the transactions contemplated hereby, the amount of which shall
not in the aggregate exceed $250,000 (the &#147;<U>Expense Reimbursement</U>&#148;), at the time of the
consummation of the Competing Transaction.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;In the event that this Agreement is terminated under <U>Section&nbsp;8.1(e)</U>, the Break-Up
Fee and the Expense Reimbursement shall be Purchaser&#146;s sole and exclusive remedy against Sellers
(and such remedies shall be available only if in accordance with this <U>Section&nbsp;8.2</U> and the
Bidding Procedures Order), in full satisfaction of all of Sellers&#146; obligations hereunder. For the
avoidance of doubt, in the event of a breach or violation of any representation and warranty or
covenant or agreement of any Seller under this Agreement, if this Agreement is terminated under
<U>Section&nbsp;8.1(e)</U>, Purchaser&#146;s sole and exclusive remedy against Sellers or any Seller
(whether in contract or tort, under statute, rule, Law or otherwise) shall be to terminate this
Agreement in accordance with <U>Section&nbsp;8.1(e)</U> and receive the Break-Up Fee and Expense
Reimbursement in accordance with this <U>Section&nbsp;8.2</U> and the Bidding Procedures Order.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">8.3 <U>Survival After Termination</U>. If this Agreement is terminated pursuant to
<U>Section&nbsp;8.1</U> and the transactions contemplated hereby are not consummated, or if the
Bankruptcy Court does not approve this Agreement or the transactions contemplated hereby, this
Agreement shall become null and void and have no further force or effect, except that any such
termination shall be without prejudice to the rights of any party on account of the
non-satisfaction of the conditions set forth in <U>Article&nbsp;VI</U> and <U>Article&nbsp;VII</U>
resulting from fraud or intentional misconduct of another party under this Agreement.
Notwithstanding anything in this Agreement to the contrary, the provisions of <U>Sections&nbsp;5.2</U>
(Confidentiality), <U>5.3</U> (Expenses), <U>8.2</U>, this <U>Section&nbsp;8.3</U> and <U>Article
IX</U> shall survive any termination of this Agreement.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE IX</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>MISCELLANEOUS</B>
</DIV>



<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">9.1 <U>Certain Definitions</U>.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(a)&nbsp;As used in this Agreement, the following terms have the following meanings:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Accounts Receivable</U>&#148; means, with respect to any Person, all trade and other accounts
receivable and other rights to payment from past or present customers and other account debtors of
such Person (including any such account receivable or other right to payment due from any Affiliate
of such Person), and the full benefit of all security for such accounts or rights to payment,
including all trade, vendor and other accounts receivable representing amounts receivable in
respect of goods sold or services rendered to customers of such Person or in respect of amounts
refundable or otherwise due to such Person from vendors, suppliers or other Persons.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Accounts Receivable and Inventory Value Shortfall</U>&#148; means the amount, if any, by which
the aggregate value of the Accounts Receivable and Inventory of Sellers as of the Effective Time is
less than 75% of Sellers&#146; reported aggregate Accounts Receivable and Inventory value as of October
29, 2010 (which, for added certainty, shall exclude any Account
Receivable of any Transferred Subsidiary), as such aggregate value is determined in accordance
with <U>Section&nbsp;1.12</U>.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Affiliate</U>&#148; means, with respect to any specified Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is controlled by or is under
common control with such specified Person; with the term &#147;control&#148; (and its derivatives) meaning
the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person whether through the ownership of voting securities, contract
or otherwise.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Assignment and Assumption Agreement</U>&#148; means the Assignment and Assumption Agreement
substantially in the form of <U>Exhibit&nbsp;B</U> hereto to be executed by Purchaser and the
applicable Sellers on the Closing Date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Assumed Warranty Liabilities</U>&#148; means Liabilities arising under express written
warranties issued by any Seller in connection with the sale of a Seller&#146;s products produced in the
Ordinary Course of Business at any of the Seller plants listed on <U>Schedule&nbsp;9.1(a)(i)</U>, but
only to the extent of the warranty terms set forth in <U>Exhibit&nbsp;E</U> attached hereto. Assumed
Warranty Liabilities shall not include any Liability arising under any other written or oral
warranty given by any Seller or representative thereof or any other actual or purported warranty
obligation, including implied warranties (such as, but not limited to, implied warranties of
merchantability or fitness for particular purpose).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Bill of Sale</U>&#148; means the Bill of Sale substantially in the form of <U>Exhibit&nbsp;A</U>
hereto to be executed by the applicable Sellers on the Closing Date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Business Day</U>&#148; means any day that is not a Saturday, Sunday or other day on which
banks located in Dallas, Texas or Phoenix, Arizona are authorized or obligated to close.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Claim</U>&#148; means a suit, claim, action, proceeding, inquiry, investigation, litigation,
legal proceeding, written demand, charge, complaint, arbitration, indictment, information, or grand
jury subpoena, whether civil, criminal, administrative, judicial or investigative and whether
public or private, in each case, filed with, made by or conducted or heard before a Governmental
Body.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">&#147;<U>COBRA</U>&#148; means the Consolidated Omnibus Reconciliation Act of 1985.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Computer Software</U>&#148; means all computer software (including source code, executable
code, data, databases and documentation) owned by or licensed to any Sellers which is used in or
necessary for the conduct of the Business as it is conducted on the date hereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Confidential Information</U>&#148; means all information regarding a party&#146;s business or
affairs, including business concepts, processes, methods, trade secrets, systems, know-how,
devices, formulas, product specifications, marketing methods, prices, customer lists, supplier
lists, methods of operation or other information, whether in oral, written or electronic form, that
is either: (i)&nbsp;designated in writing (including by electronic mail) as confidential; (ii)&nbsp;is of a
nature such that a reasonable Person would know that it is confidential; or (iii)&nbsp;is disclosed
under circumstances such that a reasonable Person would know it is confidential. Notwithstanding
the
foregoing, the following information shall not be considered Confidential Information:
(A)&nbsp;information that is or becomes publicly available through no fault of the party obligated to
keep it confidential (or such party&#146;s Affiliates or Representatives); (B)&nbsp;information with regard
to the other party that was rightfully known by a party prior to commencement of discussions
regarding the subject matter of this Agreement, as evidenced by documentation; (C)&nbsp;information that
was independently developed by a party without use of the Confidential Information, as evidenced by
documentation; and (D)&nbsp;information rightfully disclosed to a party by a third party without
continuing restrictions on its use or disclosure.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Contract</U>&#148; means any written or oral contract, agreement, arrangement, understanding,
lease, license, deed or instrument or other contractual or similar arrangement or commitment, but
excluding Purchase Orders.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">&#147;<U>Effective Time</U>&#148; means 11:59&nbsp;p.m. (Central Standard Time) on the Closing Date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Employee Benefit Plan</U>&#148; means any &#147;employee benefit plan&#148; as such term is defined in
ERISA &#167;3(3)) and any other material employee benefit plan, program or arrangement.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">&#147;<U>Employee Pension Benefit Plan</U>&#148; has the meaning set forth in ERISA &#167;3(2).
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">&#147;<U>Employee Welfare Benefit Plan</U>&#148; has the meaning set forth in ERISA &#167;3(1).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Encumbrances</U>&#148; means all interests, Liens, Claims, conditional sales agreements,
rights of first refusal or options.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Environmental, Health and Safety Liabilities</U>&#148; means any and all Claims, costs,
damages, expenses, Liabilities and/or other responsibility or potential responsibility arising from
or under any Environmental Law or Occupational Safety and Health Law (including compliance
therewith).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Environmental Laws</U>&#148; means all applicable federal, state, local, and foreign Laws, all
judicial and administrative orders and determinations, and all common law concerning public health
and safety, worker health and safety, pollution, or protection of the environment, including all
those relating to the presence, use, production, generation, handling, transportation, treatment,
storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened
release, control, exposure to, or cleanup of any hazardous materials, substances, wastes, chemical
substances, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or
byproducts, asbestos, polychlorinated biphenyls, noise, odor, mold, or radiation, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended; the
Resource Conservation and Recovery Act, 42 U.S.C. &#167;&#167; 6901 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. &#167;&#167; 5101 et seq.; the Clean Water Act, 33 U.S.C. &#167;&#167; 1251 et seq.; the
Toxic Substances Control Act, 15 U.S.C. &#167;&#167;&nbsp;2601 et seq.; the Clean Air Act, 42 U.S.C. &#167;&#167; 7401 et
seq.; the Safe Drinking Water Act, 42 U.S.C. &#167;&#167; 300f et seq.; the Atomic Energy Act, 42 U.S.C. &#167;&#167;
2011 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. &#167;&#167; 136 et seq.; and
the Federal Food, Drug and Cosmetic Act, 21 U.S.C. &#167;&#167; 301 et seq.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>ERISA</U>&#148; means the U.S. Employee Retirement Income Security Act of 1974, as amended,
together with the rules and regulations promulgated thereunder.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>ERISA Affiliate</U>&#148; means, with respect to any Person, any trade or business (whether or
not incorporated) (i)&nbsp;under common control within the meaning of section 4001(b)(1) of ERISA with
such Person, or (ii)&nbsp;which together with such Person is treated as a single employer under sections
414(b), (c), (m), (n)&nbsp;or (o)&nbsp;of the Tax Code.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Final Order</U>&#148; means an order entered by the Bankruptcy Court or other court of
competent jurisdiction as to which: (i)&nbsp;no appeal, notice of appeal, motion for reconsideration,
motion to amend or make additional findings of fact, motion to alter or amend judgment, motion for
rehearing or motion for new trial has been timely filed; (ii)&nbsp;the time for instituting or filing an
appeal, motion for rehearing or motion for new trial shall have expired; and (iii)&nbsp;if an appeal has
been timely filed no stay pending an appeal is in effect and the time for requesting a stay pending
appeal shall have expired; <U>provided</U>, <U>however</U>, that the filing or pendency of a
motion under Federal Rule of Bankruptcy Procedure 9024 shall not cause an order not to be deemed a
&#147;Final Order&#148; unless such motion shall be filed within ten (10)&nbsp;days of the entry of the order at
issue.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Finance Subsidiaries</U>&#148; means, collectively, CountryPlace Acceptance Corp., a Nevada
corporation, CountryPlace Acceptance GP, LLC, a Texas limited liability company, CountryPlace
Acceptance LP, LLC, a Delaware limited liability company, CountryPlace Mortgage, Ltd., a Texas
limited partnership, CountryPlace Title, Ltd., a Texas limited partnership, CountryPlace Mortgage
Holdings, LLC, a Delaware limited liability company, CountryPlace Funding, a Delaware corporation,
CountryPlace Securitization, LLC, a Delaware limited liability company, and CountryPlace Holdings,
LLC, a Delaware limited liability company.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">&#147;<U>GAAP</U>&#148; means United States generally accepted accounting principles.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Governmental Body</U>&#148; means a domestic or foreign national, federal, state, provincial,
or local governmental, regulatory or administrative authority, department, agency, commission,
court, tribunal, arbitral body or self-regulated entity.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Hazardous Activity</U>&#148; means the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, release, storage, transfer,
transportation, treatment or use (including any withdrawal or other use of groundwater) of any
Hazardous Material in, on, under, about or from any Owned Real Property, whether or not in
connection with the conduct of the Business, except to the extent in material compliance with
applicable Environmental Law.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Hazardous Material</U>&#148; means any substance, material or waste which is regulated by any
Environmental Law, including any material, substance or waste which is defined as a &#147;hazardous
waste,&#148; &#147;hazardous material,&#148; &#147;hazardous substance,&#148; &#147;extremely hazardous waste,&#148; &#147;restricted
hazardous waste,&#148; &#147;contaminant,&#148; &#147;pollutant,&#148; &#147;toxic waste&#148; or &#147;toxic substance&#148; under any
provision of Environmental Law, and including petroleum, petroleum product, asbestos, presumed
asbestos-containing material or asbestos-containing material, urea formaldehyde and polychlorinated
biphenyls.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Hedging Contract</U>&#148; means any interest rate, currency or commodity swap agreement, cap
agreement or collar agreement, and any other agreement or arrangement designed to protect a Person
against fluctuations in interest rates, currency exchange rates or commodity prices.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Income Tax Return</U>&#148; means any return, declaration, report, claim for refund, or
information return or statement relating to Income Taxes, including any schedule or attachment
thereto, and including any amendment thereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Indebtedness</U>&#148; means, with respect to any Person, without duplication: (a)&nbsp;any
indebtedness for borrowed money or issued in substitution for or exchange of indebtedness for
borrowed money, including principal, premium (if any), early or prepayment penalties, charges,
premiums, break fees or other similar charges, and accrued interest; (b)&nbsp;any indebtedness or
obligation evidenced by any bond, debenture, note, debt security, unfunded letter of credit or
other similar instrument, including principal, premium (if any), early or prepayment penalties,
charges, premiums, break fees or other similar charges, and accrued interest; (c)&nbsp;bank overdrafts
(excluding undrawn lines) and outstanding checks to the extent treated as bank overdrafts or
otherwise included as debt in the financial statements of such Person (without duplication) (it
being understood that only the amount of such bank overdraft or the portion of the check that is
treated as a bank overdraft or debt shall be treated as &#147;Indebtedness&#148;); (d)&nbsp;any Liability under
any sale and leaseback transaction, any synthetic lease or Tax ownership operating lease
transaction or under any lease recorded for accounting purposes by such Person as a capitalized
lease or a financing lease with respect to which such Person is liable, contingently or otherwise,
as obligor or otherwise; (e)&nbsp;any Liability of such Person under deferred compensation plans, stock
appreciation rights plan, phantom stock plans, severance or bonus plans or similar arrangements
made payable as a result of the consummation of the transactions contemplated by this Agreement or
with respect to periods ending on or prior to the Closing Date; (f)&nbsp;any off-balance sheet financing
of such Person (but excluding any leases recorded for accounting purposes by such Person as an
operating lease); (g)&nbsp;any dividends or distributions payable, or accrued for, by such Person; (h)
any Liability of such Person under any Hedging Contract; (i)&nbsp;all indebtedness of others referred to
in clauses (a)&nbsp;through (h)&nbsp;above guaranteed directly or indirectly in any manner by such Person, or
in effect guaranteed directly or indirectly by such Person through an agreement (i)&nbsp;to pay or
purchase such indebtedness or to advance or supply funds for the payment or purchase of such
indebtedness, (ii)&nbsp;to purchase, sell or lease (as lessee or lessor) property, or to purchase or
sell services, primarily for the purpose of enabling the debtor to make payment of such
indebtedness or to assure the holder of such indebtedness against loss, (iii)&nbsp;to supply funds to or
in any other manner invest in the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are rendered) or (iv)&nbsp;otherwise
to assure a creditor against loss, (k)&nbsp;all indebtedness referred to in clauses (a)&nbsp;through (i)
above secured by (or for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Encumbrance on any property owned by such Person, even though such
Person has not assumed or become liable for the payment of such indebtedness; and (k)&nbsp;any accrued
and unpaid interest on, and any prepayment premiums, penalties or similar contractual charges in
respect of, any of the foregoing Liabilities computed as though payment is being made in respect
thereof on the Closing Date; <U>provided</U>, <U>however</U>, that &#147;Indebtedness&#148; shall not
include (x)&nbsp;trade payables and accrued expenses to the extent such items are aged sixty (60)&nbsp;days
or less; or (y)&nbsp;prepaid or deferred revenue to the extent such revenue is reflected as a current
liability in the Most Recent Financial
Statements; or (z)&nbsp;purchase price holdbacks arising in the Ordinary Course of Business in
respect of a portion of the purchase prices of an asset to satisfy unperformed obligations of the
seller of such asset to the extent that holdbacks are reflected as a current liability in the Most
Recent Financial Statements.
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Insider</U>&#148; means any executive officer, director, governing body member, majority
(i.e., greater than 50%) equity holder, partner in a partnership or Affiliate, as applicable, of
any Seller or Transferred Subsidiary or any predecessor or Affiliate of any Seller or Transferred
Subsidiary or any individual related by blood, marriage or adoption to any such individual.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Insurance Subsidiaries</U>&#148; means, collectively, Standard Casualty Co., a Texas
corporation, Standard Insurance Agency, Inc., a Texas corporation, and Palm Harbor Ins. Agency of
Texas, a Texas corporation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Intellectual Property</U>&#148; means all of the following in any jurisdiction throughout the
world (i)&nbsp;trade names, trademarks and service marks, service names, brand names, logos, Internet
domain names, trade dress and similar rights, logos, slogans, and corporate names (and all
translations, adaptations, derivations and combinations of the foregoing), and general intangibles
of a like nature, together with all goodwill associated with each of the foregoing and all
registrations and applications to register any of the foregoing (&#147;<U>Marks</U>&#148;); (ii)&nbsp;patents,
patent applications and patent disclosures, together with all reissuances, divisionals,
continuations, continuations-in-part, revisions, reissues, extensions and reexaminations thereof
(&#147;<U>Patents</U>&#148;); (iii)&nbsp;copyrights (whether registered or unregistered) and applications for
registration and copyrightable works (&#147;<U>Copyrights</U>&#148;); (iv)&nbsp;confidential and proprietary
information, including trade secrets and know-how (including ideas, research and development,
engineering designs and related approvals of Governmental Bodies, self-regulatory organizations,
and trade associations, inventions, formulas, compositions, manufacturing and production processes
and techniques, designs, drawings and specifications; and (vi)&nbsp;all licenses and sublicenses held by
any Seller as licensee pertaining to intellectual property of any other Person; and for the
avoidance of doubt, &#147;<U>Intellectual Property</U>&#148; shall exclude Computer Software.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Inventory</U>&#148; means all inventory of Seller, including raw and packing materials,
work-in-progress, finished goods, supplies, parts and similar items related to, used or held for
use in connection with the Business.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">&#147;<U>IRS</U>&#148; means the United States Internal Revenue Service.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Knowledge</U>&#148; means, when used to qualify any representation, warranty or other
statement of Sellers contained herein, the actual current knowledge of any of Larry H. Keener,
Kelly Tacke, Ron Powell (solely as to Palm Harbor Homes, Inc. and Nationwide Homes, Inc.), Gavin
Ryan (solely as to Standard Casualty Co. and its subsidiaries), Joe Kesterson (solely as to Palm
Harbor Homes, Inc.) or Greg Aplin (solely as to CountryPlace Acceptance Corporation and its
subsidiaries) after reasonable investigation or inquiry into the subject matter of the
representation, warranty or other statement to which such term is being applied.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Law</U>&#148; means any federal, state, local or foreign statute, law, rule, regulation,
order, writ, ordinance, judgment, governmental directive, injunction, decree or other requirement
of any Governmental Body (including the Bankruptcy Code).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Liabilities</U>&#148; means any direct or indirect, primary or secondary, liability,
indebtedness, obligation, penalty, cost or expense (including costs of investigation, collection
and defense), claim, deficiency, guaranty or endorsement of or by any Person of any type, whether
known or unknown, accrued, absolute or contingent, liquidated or unliquidated, choate or inchoate,
matured or unmatured, disputed or undisputed, secured or unsecured, joint or several, due or to
become due, vested or unvested, executory, determined, determinable or otherwise. Without limiting
the foregoing, the term &#147;Liabilities&#148; includes and refers to all liabilities and obligations for or
with respect to Taxes, including liabilities for Taxes of any Person under Treasury Regulation
Section&nbsp;1.1502 6 (or any similar provision of any applicable Law), as a transferee or successor, by
contract, or otherwise.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Lien</U>&#148; means any security interest, mortgage, pledge, lien, encumbrance, charge or
claim (as defined in section 101(5) of the Bankruptcy Code).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Material Adverse Effect</U>&#148; means any circumstance, occurrence, event or change that has
or could be reasonably expected to have a material adverse effect on (a)&nbsp;the Transferred Assets,
the Assumed Liabilities, the Business or the assets and Liabilities of the Transferred
Subsidiaries, in each case taken as a whole, or (b)&nbsp;the ability of Sellers to timely satisfy and
perform their obligations under this Agreement and consummate the transactions contemplated hereby;
<U>provided</U>, <U>however</U>, that in no event shall any of the following be deemed to
constitute, nor shall any of the following be taken into account in determining whether there has
been or shall be, a Material Adverse Effect: (i)&nbsp;general economic or business conditions or
changes therein, including changes in interest or currency rates, or acts of war, civil unrest or
terrorism; (ii)&nbsp;any change in Law; (iii)&nbsp;any occurrence or condition generally affecting the
industries in which the Business operates, including any change in such conditions; (iv)&nbsp;any
occurrence or condition arising out of the announcement of the transactions described in this
Agreement or the performance of the transactions contemplated hereby (including any occurrence or
condition arising out of the identity of or facts relating to Purchaser); and (v)&nbsp;any effect or
result of a breach of this Agreement by Purchaser; <U>provided</U>, <U>further</U>, that the
circumstances, changes, developments, events or states of facts set forth in clauses (i), (ii),
(iii)&nbsp;above shall be taken into account in determining whether a Material Adverse Effect has
occurred to the extent, and only to the extent, such circumstances, changes, developments, events
or states of facts have a disproportionately adverse effect on the Transferred Assets, the Assumed
Liabilities, the Business and the assets and Liabilities of the Transferred Subsidiaries, taken as
a whole, as compared to other participants in the industries in which Sellers and the Transferred
Subsidiaries operate.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Occupational Safety and Health Law</U>&#148; means any applicable Law designed to provide safe
and healthful working conditions and to reduce occupational safety and health hazards, including
the Occupational Safety and Health Act, and any program, whether governmental or private (such as
those promulgated or sponsored by industry associations and insurance companies), designed to
provide safe and healthful working conditions.
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Ordinary Course of Business</U>&#148; means the operation of the Business by Sellers and the
Transferred Subsidiaries in the usual and ordinary course in a manner substantially similar to the
manner in which Sellers and the Transferred Subsidiaries operated, including after the commencement
of the Bankruptcy Case and as permitted under the Bankruptcy Code and by the Bankruptcy Court.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Permitted Encumbrance</U>&#148; means: (i)&nbsp;the Virgo Security Interest, (ii)&nbsp;the security
interest granted under the Textron Facility, (iii)&nbsp;Encumbrances for Taxes and assessments not yet
payable; (iv)&nbsp;Encumbrances that shall be released at or prior to the Closing; and
(v)&nbsp;(A)&nbsp;easements, rights-of-way, servitudes, permits, licenses, surface leases, ground leases to
utilities, municipal agreements, railway siding agreements and other similar rights, all as
reflected in the official records of the jurisdictions where any real property is located,
(B)&nbsp;conditions, covenants or other restrictions reflected in the official records of the
jurisdictions where any real property is located, and (C)&nbsp;easements for streets, alleys, highways,
telephone lines, gas pipelines, power lines, railways and other easements and rights-of-way on,
over or in respect of any real property, all as reflected in the official records of the
jurisdictions where any real property is located; in each case with respect to clauses (iii)
through (v)&nbsp;above, individually or in the aggregate, that do not or would not reasonably be
expected to materially and adversely affect the current use or value of the property subject
thereto or the operations of the Business as it is currently conducted by Sellers and the
Transferred Subsidiaries.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Person</U>&#148; means any individual, corporation, partnership, limited liability company,
limited liability partnership, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Pre-Closing Claims</U>&#148; means (i)&nbsp;Claims asserted by or against a Seller prior to the
Closing Date, and (ii)&nbsp;counterclaims with respect to a Claim asserted by or against a Seller prior
to the Closing Date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Purchase Order</U>&#148; means (i)&nbsp;any open purchase order (or equivalent document) received
and accepted by any Seller from any customer of the Business in the Ordinary Course of Business for
the production and sale of any finished goods Inventory capable of being produced at any Real
Property (based on its current configuration), whether or not such purchase order or equivalent
document was originally intended for fulfillment at a Real Property, or (ii)&nbsp;any open purchase
order (or equivalent document) delivered by any Seller to any third party vendor or supplier for
the purchase by such Seller from such vendor or supplier in the Ordinary Course of Business of raw
materials, supplies or other similar Inventory intended for use in the production of finished goods
Inventory from any Real Property or for any other conduct of operations at any Real Property.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Release</U>&#148; means any release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, or leaching into the indoor or outdoor environment, or into or out
of any property.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Representative</U>&#148; means, with respect to a particular Person, any director, officer,
manager, partner, member, employee, agent, consultant, advisor or other representative of such
Person, including legal counsel, accountants, and financial advisors.
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Tax</U>&#148; or &#147;<U>Taxes</U>&#148; means all taxes, charges, fees, imposts, levies or other
assessments, including all net income, franchise, profits, gross receipts, capital, sales, use, ad
valorem, value added, transfer, transfer gains, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance, stamp, occupation, real or
personal property, and estimated taxes, customs duties, fees, assessments and charges of any kind
whatsoever, together with any interest and any penalties, fines, additions to tax or additional
amounts thereon, imposed by any taxing authority (federal, state, local or foreign) and shall
include any transferee Liability in respect of Taxes.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">&#147;<U>Tax Code</U>&#148; means the Internal Revenue Tax Code of 1986, as amended.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Tax Return</U>&#148; means any return, declaration, report, form, estimate, information return
or statement required to be filed in respect of any Taxes or to be supplied to a taxing authority
in connection with any Taxes.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Textron Facility</U>&#148; means that certain Amended and Restated Agreement for Wholesale
Financing (Finished Goods &#150; Shared Credit Facility) dated May&nbsp;25, 2004, as amended, by and among
ParentCo, Palm Harbor Manufacturing, L.P., Palm Harbor Homes I, L.P., Palm Harbor Marketing, Inc.,
Textron Financial Corporation and the other &#147;Lenders&#148; named therein.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Title Company</U>&#148; means First American Title Company, or such alternate title company as
ParentCo and Purchaser shall agree.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Transferred Subsidiaries</U>&#148; means, collectively, the Finance Subsidiaries and the
Insurance Subsidiaries, and &#147;<U>Transferred Subsidiary</U>&#148; means any of them.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Unauthorized Indebtedness</U>&#148; means, as of the Effective Time, any Indebtedness of any
Transferred Subsidiary other than (i)&nbsp;the Virgo Indebtedness and (ii)&nbsp;Indebtedness incurred under
construction lending facilities entered into in the Ordinary Course of Business by CountryPlace
Mortgage, Ltd. with third party lenders prior to the date hereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Virgo Indebtedness</U>&#148; means any Indebtedness owing by CountryPlace Acceptance
Corporation, CountryPlace Mortgage, Ltd., CountryPlace Mortgage Holdings, LLC, ParentCo,
CountryPlace Acceptance G.P., LLC and CountryPlace Acceptance L.P., LLC to the &#147;Lender&#148; parties (or
their successors, assigns or nominees) under that certain Credit Agreement dated as of January&nbsp;29,
2010 by and among CountryPlace Acceptance Corporation, CountryPlace Mortgage, Ltd., CountryPlace
Mortgage Holdings, LLC, ParentCo, CountryPlace Acceptance G.P., LLC, CountryPlace Acceptance L.P.,
LLC, the &#147;Lenders&#148; who are party to such Credit Agreement and Virgo Service Company LLC.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;<U>Virgo Security Interest</U>&#148; means the security interest in certain collateral granted to
Virgo Service Company LLC as Administrative Agent and Collateral Agent under that certain Guaranty
and Security Agreement dated as of January&nbsp;29, 2010 by and among CountryPlace Acceptance
Corporation, CountryPlace Mortgage, Ltd., CountryPlace Mortgage Holdings, LLC, ParentCo,
CountryPlace Acceptance G.P., LLC, CountryPlace Acceptance L.P., LLC and Virgo Service Company LLC.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">(b)&nbsp;The following capitalized terms are defined in the following Sections of this Agreement:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Definition</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Location</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Acquired Leased Real Property
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2.10(a)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Agreement
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Preamble</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Allocation
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.13</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Assumed Contracts
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.1(f)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Assumed Liabilities
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.3</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bankruptcy Case
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Recitals</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bankruptcy Code
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Recitals</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bankruptcy Court
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Recitals</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bankruptcy Court Approval
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">5.7</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Base Price
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.6</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bidding Procedures
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">5.7(a)(ii)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bidding Procedures Motion
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">5.7(a)(ii)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bidding Procedures Order
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">5.7(a)(ii)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Books and Records
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.1(k)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Break-Up Fee
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">8.2(a)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Business
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Recitals</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Closing
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.7</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Closing Apportionments
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2.10</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Closing Date
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.7</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Closing Payment
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.6</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Closing Statements
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2.3(a)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Competing Transaction
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">8.1(e)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Cure Costs
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.4</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Deeds
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2.3(b)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">DIP Facility</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Recitals</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Excluded Assets
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.2</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Excluded Liabilities
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.5</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Existing Insurance Policies
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">5.13</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Expense Reimbursement
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">8.2(b)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Final Price Adjustment
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.11(d)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Finance Business
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Recitals</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Fleetwood
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Recitals</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Home Business
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Recitals</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Insurance Business
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Recitals</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Insurance Representative
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3.8(d)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Interim DIP Facility Owner
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">5.7(a)(i)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Inventory
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.1(d)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Leased Real Property / Leased Real Properties
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3.12(b)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Most Recent Financial Statements
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3.5</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Objection Notice
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.11(b)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Owned Real Property / Owned Real Properties
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3.12(a)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">ParentCo
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Preamble</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Permits
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3.9(a)</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->61<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Definition</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Location</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Permitted Disclosures
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">5.2(a)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Petition Date
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Recitals</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Post-Closing Price Adjustment
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.11(b)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Purchase Price
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.6</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Purchaser
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Preamble</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Purchaser&#146;s Certificate
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">7.1</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Real Properties
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3.12(b)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Real Property Lease
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3.12(b)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Real Property Escrow
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2.1</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Reinsurance Contract
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3.10(b)(ix)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Sale Approval Order
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">5.7(a)(iii)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Sellers
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Preamble</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Sellers&#146; Certificate
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">6.1</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Standard Casualty Share
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.1(a)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Surveys
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2.6</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Tangible Personal Property
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.1(c)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Termination Date
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">8.1(b)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title Commitment
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2.6</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title Commitments
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2.6</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title Policies
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2.7</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Transferred Assets
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.1</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Transferred IP
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.1(i)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Transferred Permits
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.1(j)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Transferred Seller Employee
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">5.12(a)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">WARN Act
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3.26(e)</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.2 <u>Consent to Jurisdiction; Service of Process; Waiver of Jury Trial</u>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(a)&nbsp;The parties hereto irrevocably and unconditionally consent to submit to the jurisdiction
of the Bankruptcy Court for any litigation arising out of or relating to this Agreement and the
transactions contemplated hereby (and agree not to commence any litigation relating hereto except
in the Bankruptcy Court).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(b)&nbsp;Any and all service of process and any other notice in any such Claim shall be effective
against any party if given personally or by registered or certified mail, return receipt requested,
or by any other means of mail that requires a signed receipt, postage prepaid, mailed to such party
as herein provided. Nothing herein contained shall be deemed to affect the right of any party to
serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed
against any other party in any other jurisdiction.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(c)&nbsp;If any Claim is brought by any party hereto to enforce its rights or another party&#146;s
obligations under this Agreement or any other agreement, document or instrument to be delivered by
such party at the Closing, the substantially prevailing party in such Claim shall be entitled to
recover its reasonable attorneys&#146; fees and expenses and other costs incurred in such Claim, in
addition to any other relief to which it may be entitled.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->62<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(d)&nbsp;EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.3 <U>Notices</U>. Any notice or other communication required or permitted hereunder shall
be in writing and shall be deemed to have been duly given (i)&nbsp;on the day of delivery if delivered
in person, (ii)&nbsp;on the day of delivery if delivered by facsimile upon confirmation of receipt
(<U>provided</U> that if delivery is completed after the close of business, then the next Business
Day), (iii)&nbsp;on the first (1st) Business Day following the date of dispatch if delivered using a
next-day service by a nationally recognized express courier service, or (iv)&nbsp;on the earlier of
confirmed receipt or the fifth (5th) Business Day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered as set forth below, or pursuant to such other instructions as may be designated
by notice given in accordance with this <U>Section&nbsp;9.3</U> by the party to receive such notice:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">if to Purchaser, to:</DIV></TD>
</TR>

</TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%">Palm Harbor Homes, Inc.<br>
c/o Cavco Industries, Inc.<br>
1001 North Central Avenue, Suite&nbsp;800<br>
Phoenix, Arizona 85004-1935<br>
Attention: James P. Glew, General Counsel<br>
Facsimile: (602)&nbsp;256-6189
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%">and to:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%">Third Avenue Management<br>
622 Third Avenue, 32<SUP style="font-size: 85%; vertical-align: text-top">nd</SUP> Floor<br>
New York, New York 10017<br>
Attention: Robert Jordan, Sr. Managing Director, Corporate Counsel<br>
Facsimile: (212)&nbsp;735-0003
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%">with a copy (which shall not constitute notice to Purchaser) to:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%">Snell &#038; Wilmer L.L.P.<br>
One Arizona Center<br>
400 E. Van Buren<br>
Phoenix, Arizona 85004<br>
Attention: Garth D. Stevens<br>
Facsimile: (602)&nbsp;382-6070
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->63<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">if to any of Sellers, to:</DIV></TD>
</TR>

</TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%">Palm Harbor Homes, Inc.<br>
15303 Dallas Parkway, Suite&nbsp;800<br>
Addison, Texas 75001-4600<br>
Attention: Larry H. Keener, Chairman, President &#038; CEO<br>
Facsimile: (972)&nbsp;764-9020
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%">with a copy (which shall not constitute notice to Sellers) to
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%">Locke Lord Bissell &#038; Liddell LLP<br>
2200 Ross Avenue, Suite&nbsp;2200<br>
Dallas, Texas 75201<br>
Attention: Gina E. Betts<br>
Facsimile: (214)&nbsp;756-8515
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.4 <U>Entire Agreement</U>. This Agreement (including the Exhibits and Schedules hereto),
the DIP Facility and any other ancillary agreements executed by the parties hereto in connection
with the consummation of the transactions contemplated by this Agreement and the DIP Facility
contain the entire agreement among the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements, written or oral, with respect thereto.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.5 <U>Non-Survival of Representations, Warranties and Covenants</U>. The respective
representations, warranties and covenants of Sellers and Purchaser contained in this Agreement and
any certificate delivered pursuant hereto shall terminate at, and not survive, the Closing;
provided, that this Section shall not limit any covenant or agreement of the parties that by its
terms requires performance after the Closing.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.6 <U>Amendments</U>. This Agreement may be amended, superseded, canceled, renewed or
extended only by a written instrument signed by Purchaser and ParentCo (on behalf of Sellers).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.7 <U>Waiver</U>. Each party hereto may (a)&nbsp;extend the time for the performance of any of
the obligations or other acts of the other party hereto, (b)&nbsp;waive any inaccuracies in the
representations and warranties of the other party contained herein or in any document delivered
pursuant hereto, (c)&nbsp;waive compliance with any of the agreements of the other party contained
herein, or (d)&nbsp;waive satisfaction of any condition to its obligations hereunder. Any such
extension or waiver shall be valid only if set forth in an instrument in writing signed by the
party to be bound thereby. No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any
party of any such right, power or privilege, nor any single or partial exercise of any such right,
power or privilege, preclude any further exercise thereof or the exercise of any other such right,
power or privilege. All remedies, rights, undertakings, obligations, and agreements contained
herein shall be cumulative and not mutually exclusive.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.8 <U>Governing Law</U>. This Agreement and all Claims with respect thereto shall be
governed by and construed in accordance with the federal bankruptcy law, to the extent applicable,
and, where state law is implicated, the laws of the State of Delaware without regard
to any conflict of laws rules thereof that might indicate the application of the laws of any
other jurisdiction.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->64<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.9 <U>Binding Effect; Assignment</U>. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns. This Agreement is not
assignable by any party without the prior written consent of each other party.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.10 <U>Interpretation; Headings</U>. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require. All terms defined
in this Agreement in their singular or plural forms have correlative meanings when used herein in
their plural or singular forms, respectively. Unless otherwise expressly provided, the words
&#147;include,&#148; &#147;includes&#148; and &#147;including&#148; do not limit the preceding words or terms and shall be deemed
to be followed by the words &#147;without limitation.&#148; All references herein to &#147;Sections&#148; shall be
deemed references to such parts of this Agreement, unless the context shall otherwise require. All
references herein to &#147;Schedules&#148; and &#147;Exhibits&#148; shall mean the Schedules and Exhibits attached to
this Agreement and forming a part hereof. The Section headings in this Agreement are for reference
only and shall not affect the interpretation of this Agreement. The parties acknowledge and agree
that (a)&nbsp;each party and its counsel reviewed and negotiated the terms and provisions of this
Agreement and have contributed to its revision, (b)&nbsp;the rule of construction to the effect that any
ambiguities are resolved against the drafting party shall not be employed in the interpretation of
this Agreement, and (c)&nbsp;the terms and provisions of this Agreement shall be construed fairly as to
all parties, regardless of which party was generally responsible for the preparation of this
Agreement. Dates and times set forth in this Agreement for the performance of the parties&#146;
respective obligations hereunder or for the exercise of their rights hereunder shall be strictly
construed, time being of the essence of this Agreement. If the date specified or computed under
this Agreement for the performance, delivery, completion or observance of a covenant, agreement,
obligation or notice by any party, or for the occurrence of any event provided for herein, is a day
other than a Business Day, then the date for such performance, delivery, completion, observance or
occurrence shall automatically be extended to the next Business Day following such date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.11 <U>Severability of Provisions</U>. If any provision or any portion of any provision of
this Agreement shall be held invalid or unenforceable, the remaining portion of such provision and
the remaining provisions of this Agreement shall not be affected thereby. If the application of
any provision or any portion of any provision of this Agreement to any Person or circumstance shall
be held invalid or unenforceable, the application of such provision or portion of such provision to
Persons or circumstances other than those as to which it is held invalid or unenforceable shall not
be affected thereby.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.12 <U>Counterparts</U>. This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original, but all such
counterparts together shall constitute one and the same instrument. Each counterpart may consist
of a number of copies hereof each signed by less than all, but together signed by all, of the
parties hereto.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->65<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.13 <U>No Third Party Beneficiaries</U>. Except as otherwise set forth in this Agreement,
no provision of this Agreement is intended to, or shall, confer any third party beneficiary or
other rights or remedies upon any Person other than the parties hereto.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><I>Remainder of Page Intentionally Left Blank<BR>
Signature Page Follows</I>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->66<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">IN WITNESS WHEREOF, the parties have executed this Asset Purchase Agreement as of the date
first above written.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><u>SELLERS</u>:<BR>
<BR>
<B>Palm Harbor Homes, Inc.</B>, a Florida corporation<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President and CEO&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Palm Harbor GenPar, LLC</B>, a Nevada limited liability<BR>
company<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Palm Harbor Mfg., L.P.</B>, a Texas limited partnership<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Palm Harbor Real Estate, LLC</B>, a Texas limited<BR>
liability company<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President of Sole Member&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Nationwide Homes, Inc.</B>, a Delaware corporation<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">              /s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Chairman&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">Signature Page to Asset Purchase Agreement
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">



<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Palm Harbor Albemarie, LLC</B>, a Delaware corporation<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Larry Keener
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Larry H. Keener&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President



</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><u>PURCHASER</u>:<BR>
<BR>
<B>Palm Harbor Homes, Inc.</B>, a Delaware corporation<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Joseph H. Stegmayer
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Joseph H. Stegmayer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">Signature Page to Asset Purchase Agreement
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>5
<FILENAME>c09057exv99w1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<HTML>
<HEAD>
<TITLE>Exhibit 99.1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><B>Exhibit&nbsp;99.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><IMG src="c09057c0905700.gif" alt="(CAVCO LETTERHEAD)">
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><U><B><I>FOR IMMEDIATE RELEASE</I></B></U>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>CAVCO INDUSTRIES ANNOUNCES CREDIT FACILITY AND ASSET<BR>
PURCHASE AGREEMENT WITH PALM HARBOR HOMES</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">PHOENIX, November&nbsp;29, 2010 &#150; Cavco Industries, Inc. (NASDAQ:CVCO) today announced that
Fleetwood Homes, Inc., a subsidiary owned 50% by Cavco and 50% by Third Avenue Value Fund (TAVFX),
has entered into an agreement with Palm Harbor Homes, Inc. (NASDAQ: PHHM) to provide
debtor-in-possession (DIP)&nbsp;financing to Palm Harbor and certain of its subsidiaries during the
reorganization of Palm Harbor and such subsidiaries under chapter 11 of the U.S. Bankruptcy Code.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Palm Harbor is a manufacturer and marketer of factory-built housing and a provider of related
financing and insurance. Palm Harbor and certain of its subsidiaries filed for chapter 11
bankruptcy protection on November&nbsp;29, 2010. In conjunction with Palm Harbor&#146;s filing, Fleetwood
Homes committed $50&nbsp;million, which may increase to $55&nbsp;million if certain conditions are met, for a
debtor-in-possession (DIP)&nbsp;credit facility. Subject to bankruptcy court approval, the credit
facility will be used by Palm Harbor to extinguish its existing Textron Financial Corporation
facility and to fund post-petition operations, commitments to customers, and employee obligations.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Additionally, through a newly formed subsidiary of Fleetwood Homes, Inc., Cavco and Third
Avenue have entered into an agreement with Palm Harbor and certain of its subsidiaries to purchase
substantially all of Palm Harbor&#146;s assets comprising its manufactured and modular housing
construction and retail businesses and all of the outstanding stock of its insurance and finance
subsidiaries, and to assume certain liabilities of Palm Harbor. The asset purchase transaction is
expected to be conducted pursuant to a sale process under section 363 of the U.S. Bankruptcy Code.
Cavco and Third Avenue&#146;s joint $57.5&nbsp;million &#147;stalking horse&#148; bid is subject to customary
conditions to closing, certain post-closing adjustments, and bankruptcy court approval and includes
manufactured housing factories, retail locations, equipment, accounts receivable, inventory,
intellectual property, and certain warranty and other liabilities. Palm Harbor&#146;s insurance and
finance subsidiaries, including Standard Casualty Company, Standard Insurance Agency, CountryPlace
Acceptance Corp., and CountryPlace Mortgage, Ltd. are not parties to the Palm Harbor bankruptcy
filing, but the shares of these companies are included in the assets to be acquired by Fleetwood
Homes.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#147;We are pleased to have this opportunity to partner with Palm Harbor Homes and look forward to
a successful outcome of this process. Our mutual intention is to help Palm Harbor continue its
heritage of providing quality home building, retailing, financing, competitive insurance products
and outstanding customer service. Our combined businesses will have a strengthened foundation and
market presence,&#148; said Joseph H. Stegmayer, Chairman, President and Chief Executive Officer of
Cavco.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Cavco Industries, Inc., headquartered in Phoenix, Arizona, is one of the largest producers of
HUD code manufactured homes in the United States, based on reported wholesale shipments of both
Cavco and Fleetwood Homes. The company is also a leading producer of park model homes and vacation
cabins in the United States. Third Avenue Management, the investment adviser to Third Avenue Value
Fund, is a New York-based company with expertise in value and distressed investing.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><I>Certain statements contained in this release are forward-looking statements within the meaning
of Section&nbsp;27A of the Securities Act of 1933, Section&nbsp;21E of the Securities and Exchange Act of
1934 and the Private Securities Litigation Reform Act of 1995. In general, all statements that are
not historical in nature are forward-looking. Forward-looking statements are typically included,
for example, in discussions regarding the manufactured housing and site-built housing industries;
our financial performance and operating results; and the expected effect of certain risks and
uncertainties on our business, financial condition and results of operations. All forward-looking
statements are subject to risks and uncertainties, many of which are beyond our control. As a
result, our actual results or performance may differ materially from anticipated results or
performance. Factors that could cause such differences to occur include, but are not limited to:
adverse industry conditions; general deterioration in economic conditions and continued turmoil in
the credit markets; a write-off of all or part of our goodwill, which could adversely affect
operating results and net worth; the cyclical and seasonal nature of our business; limitations on
our ability to raise capital; curtailment of available financing in the manufactured housing
industry; our contingent repurchase obligations related to wholesale financing; competition; our
ability to maintain relationships with retailers; labor shortages; pricing and availability of raw
materials; unfavorable zoning ordinances; our ability to complete the acquisition of the Palm
Harbor assets and certain liabilities and successfully integrate Fleetwood Homes, Palm Harbor, and
any future acquisition or attain the anticipated benefits of such acquisition; the risk that the
acquisition of Fleetwood Homes, Palm Harbor, and other future acquisitions may adversely impact our
liquidity; our participation in certain wholesale financing programs for the purchase of our
products by industry retailers may expose us to additional risk of credit loss; together with all
of the other risks described in our filings with the Securities and Exchange Commission. Readers
are specifically referred to the Risk Factors described in Item&nbsp;1A of the 2010 </I><I>Form 10-K</I><I>, as may be
amended from time to time, which identify important risks that could cause actual results to differ
from those contained in the forward-looking statements. Cavco expressly disclaims any obligation to
update any forward-looking statements contained in this release, whether as a result of new
information, future events or otherwise. Investors should not place any reliance on any such
forward-looking statements.</I>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">###
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>




</BODY>
</HTML>
</TEXT>
</DOCUMENT>
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<SEQUENCE>6
<FILENAME>c09057c0905700.gif
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
