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UNITED STATES BANKUPTCY COURT

DISTRICT OF NEVADA
In re:
Chapter 11
Electronically Filed
January 15, 2010
THE RHODES COMPANES, LLC, aka

"Rhodes Home!;, et aL i
Case No.: BK-S-09- i 48 i 4-LBR
(Jointly Administered)
Chapter 11
Debtor.
lXJ Affects All Debtors
r 1 Affects the following Debtors
AMENDED CERTIFICATE OF SERVICE

I, Nova George, am employed in the city and county of Los Angeles, State of California. I a over the age of 18 and not a part to the wiihin action; my business address is 16501 Ventura Boulevard Suite 440, Encino, California 91436.
On December 4, 2009, I served the following documents:
Cover Letter (attached hereto as Exhibit A)
Order (A) Approving the Adequacy of tbe First Lien Steering Committee's Disclosure Statement (B) Approving Solicitation and Notice Procedul"cs with Respect to Confirmation of the First Lie
Thereto (attached hereto as Exhibit B)
Steering Committee's Proposed Plan of Reorganization; (C) Approving the Form of Variou Ballots aDd Notices in Connection Therewith; and (D) Scheduling Certain Dates With Respec
Solicitation Procedures (attached hereto as Exhibit C)
Notice of (I) Confirmation Hearing and Objection Deadline with Respect to the Second Amend the Bankruptcy Code for The Rhod Reorganiztion Pursuant to Chapter 11 of Modifed Plan of Companies, LLC. et al., and (I Solicitation and Voting Procedures (attached hereto as Exhibit D)
i The Debtors in these cases, along with iheir case numbers are: Heritage Land Company, LLC (Case No. 09No.09No. 09-14814); Rhodes Ranch General Partnership (Case 14778); The Rhodes Companies, LLC (Case No. 09-14865); Chalkline, LP (Case No. 09-14862); 14844); Tick, LP (Case No. 09-14866); Glynda, LP (Case Baicave, LP (Case No.09-14861); Jackkife, LP (Case No. 09- 1 4860); Wallboard, LP (Case No. 09- 14858);
Overflow, Ll (Case No. 09-14856); Rhodes Ranch Golf
and Countr Club (Case No. 09-14854); Tuscany
Acquisitions IV, LLC (Case No. 09-14849); Parcel 20 LLC(Case No. 09-14848); Rhodes Design and Development Corp. (Case No. 09-14846); C&J Holdings, Inc. (Case No. 09-14843); Rhodes Realty, Inc. (Case No. 09-14841); No. 09-1439); Elkhorn liivestments, Inc. (Case No. 09-14837); Rhodes Homes Arizona, LtC Jarupa LLC (Case (Ca~e No. 09-14882); Rhodes Arizona Properties, LLC (Case No. 09-14868); Tribes Holdings LLC (Case No.0914817); Six Feathers Holdings, LLC (Case No. 09-14833); Elkhorn Parters, a Nevada Limited Partnership (Case No. 09-14828); Bravo, Inc. (Case No. 09-14825) Gung-Ho Concrete LLC (Case No. 09-14822); Geronimo Plumbing, LLC (Case No. 09.14820); Apache Framing, LLC (Case No. 09-14818); Tuscany Golf Country Club, LLC (Case No. 09-14884); Pinnacle Grading, LLC (Case No. 09-14887); Tuscany Acquisitions Il, LLC (Case No. 09-09-14850); Tuscany Acquisitions II, LLC (Case No. 09-)4852); and Tuscany Acquisitions, LLC(Case No. 0914853).
Oorm,ntl
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Letter signed by the First Lien Steering Committee, the Debtors, the Ci-editors' Committee and tb Second Lien Agent (collectively, the "Recommendine Partes") in support of the Plan (attach
hereto as Exhibit E)
Letter signed by the Creditors' Committee in support of
the Plan (attached hereto as Exhibit F)
Second Amended Modified Disclosui-e Statement for the Second Amended Modifed Plan 0 Reorganiztion Pursuant to Chapter 11 or the United States Bankruptcy Code for the Rhod Companies, LLC, et al , including exhibits on CD-ROM Fonnat (attached hereto as Exhibit G is th servcd Disclosure Statement including exhibits as it appeared on CD-ROM)
Class A-IIClass C.2 Ballot (attched hereto as Exhibit H)
Class A-2/C-3 Ballot (attached hereto as Exhibit I)

Class C-L Ballot (attached hereto as Exhibit J)
(the "Plan Solicitation Documents")
By supervising placement of the Plan Solicitation Documents above in a sealed envelope with postag thereon fully prepaid, in thc United States mail at Encino, California.
Attched hereto as Exhibit K is the list of Parties served with the Plan Solicitation Documents. The ro
entitled "Ballot" scts forth a reference to the individual ballot served upon each part.
Executed on January 14, 2010, at Encino, California
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Exhibit A
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AKIN GUMP STRAUSS HAUER & FELDLLP

Atlomatlaw
December 4, 2009
To the Creditors of
The Rhodes Companies, LLC and Its Affilated Debtors:
You have received this letter and the enclosed materals because you are entitled to vote
on the Second Amended Modifed Plan of Reorganization Pursuant to Chapter 11 of the

Bankruptcy Code for The Rhodes Companies, LLe, et of. (as amended from time to time and
including all exhibits and supplements, the "Plan").1
The enclosed materials constitute the First Lien Steerng Committee's "Solicitation Package" and consist of:
(a) this
letter;
the First Lien Steering Committee's
(b) the Order (A) Approving the Adequacy of
Disclosure Statement; (B) Approving Solicitation and Notice Procedures with Respect to Confirmation of the First Lien Steering Commitee's Proposed Plan of Reorganization; (C) Approving the Form of Various Ballots and Notices in
Connection Therewith; and (D) Scheduling Certain Dates With Respect Thereto
(the "Solicitation Procedures Ordet');

(c) the Solicitation Procedures;
(d) the appropriate Ballot(s);
(e) the Notice of (1) Confirmation Hearing and Objection Deadline with Respect to
the Second Amended Modifed Plan of Reorganization Pursuant to Chapter 11 of the Bankrnptcy Code for The Rhodes Companies, LLC, et al., and (II) Solicitation and Voting Procedures (the "Confirmation Hearng Notice");
(f) a eopy of a letter signed by the First Lien Steering Committee, the Debtors, the
Creditors' Committee and the Second Lien Agent (collectively, the

"Recommending Parties") in support of the Plan;
(g) a copy ofa letter signed by the Creditors' Committee in support of
the Plan; and
(h) the approved form of the Disclosure Statement (together with the PLan which is
Exhibit A thereto) in CD-ROM format.
Capitalized lerm nol defined in ihis kiter have he meaning given them in the Plan.
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The First Lien Steering Committee has approved the filing and solicitation of the Plan, and believes that the Plan is in the best interests of creditors. Moreover, the First Lien Steering the Plan could result in extensive Committee believes any alternative other than confinnation of delays and increased administrative expenses resulting in smaller distrbutions to creditors.
THE FIRST LIEN STEERING COMMITTEE THEREFORE RECOMMENDS THAT ALL ENTITIES ENTITLED TO VOTE SUBMIT A TIMELY BALLOT VOTING TO
ACCEPT THE PLAN.
The materials in the Solicitation Package are intended to be self-explanatory. If you

should have any questions. however, please feel free to contact the Claims and Solicitation Agent by writing to The Rhodes Companies, LLC, c/o Omni Management Group, LLC. 16161 Ventura
Blvd., Suite C, PMB 477, Encino, California 91436, or by callng (866) 9896144. Question may also be sent by email toNova(fomnimgt.com.
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Exhibit B
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Entered on Docket December 01. 2009
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Hon. Linda B. Riegle United States Bankruptcy Judge
4
5
6
7
UNITED ST A lES BANKRUPTCY COURT DISTRICT OF NEVADA SOUTHERN DIVISION
8
9
INRE:
THE RHODES COMPANIES, LLC,
aka "Rhodes Homes," el al.,
e o
u
Case No. 09-14814-LBR (Jointly Administered)

Cbapter I i
llearing Dare: November 24. 200
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Debton.1
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13
Hearing Time: i :30 p.m (rST) Courtroom J
14
15
Affects: Deblors l' All

o Affects tbe following
Deblor(s)
16
17 18
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72
i The Deiors in hesc: i:iies, nlon,g with ibe lasi four digilS or each Debtor's reder~i laX idcniifieaiion
23 number, if applicable. are: Henlage l:ind Comany, LtC (2918); The Rhodes Compnies. LtC (3060); RJodes Ranch General Partnership (I 760); Tiek, ~ 10707); Glynda. LP (5569); C1alkli~. LP (0281); BalC'l1c, 24 LP (6837); Jackkife, LP (6189,; W:illboard,lP(1467); Overflow, LP (9349): Rhod~ R:nchGolfand Countr
Club (9730); Tuscaiiy Acquisiiions, i.ie (0206); Tuscany Acquisiom: n. LlC 18693); Tusny Acquisilioll
25 II, LLC (9777); Tuscany Acauisiiions iv, LLC (0509); Piircel 20 LLC (5534); Rhodes D~sigri Biid
Dii,"clopmini Corp. (1963'; C&. Holdings. Inc. (1315); Rhodes Realiy, Inc. (0716); Jiirupl LLC(4OO);
26 Elkhom IlliieSlrTIIS. Inc. (6673); Rhodes
Homes AriZOIlB, LLC (7248J~ Rho Arizona PJopn:ies, LLC
(8738); Tribes Holdings LLC (43-17); Six Fcaih"rs Holdings, LLC (845 I)~ Blkhom Parreri A Nevada Limiied
27 Partersbip (9654); Bravo Inc. (2642); Gung-Ho Concrere, LlC (6966): Geronimo Plumbing LLC (6897); Apache t--nig. LLC (63_~2); Tuscany GolfCounlry Club, LLC (7131); Pinacle Gruelin,g. LLC (4838).
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2 3
ORDER (A) APPROVING THE ADEQUACY OF THE FIRST LIEN STEERING COMMITTE'S DISCLOSIJRE STATEMENT; (B) APPROVING
SOLICIT A nON AND NOTICE PROCEDURES WITB RESPECT TO
4
5
CONFlRMATION OF TIE FlRST LIEN STEERING COMMITTEE'S PROPOSED PLAN OF REORGANIZATION; (C) APPROVING THE FORM OF VARIOUS BALLOTS AN NOTICES IN CONNECTION THEREWITHt
AND (D) SCHEDULING CERTAIN DATES WITH RESPECT THERETO IRE; DOCKET NO. 5631
Upon consideration ofihe Sc:cond Amended Modified DiM:)osurc Slalemeni for the
6
7 8
Second Amended Modified Plan ofReorgaizalion Pursant 10 Chapter i 1 oflhe
Bankruptcy Code for the Rhodes Companies, LLC, ;l it. (lhe "Disclosure Statement' filed
by
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the First Lien Steering Comminee and the Motion ofihc First Lien Steeng Committee
10
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for Entry of an Order (A) Approving ihe Adequacy ofihe Firt Lien Steering lmmiUee"s
Disclosure Staiement; (B) Approving Solicitation and Notice Materials with Respect to the
Plan ofReorgani7.ation; (C) Approving the Form of Varous of
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Ballots and Noiice in
Conneciion Therewith, and (D) Scheduling Certiiin Dates with Rescci Therto (the
"Motion');). and it appearng ihat adequate and suffcient notice of the Motion has bee
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15
given under lhe circumstances; and it further appearing ihat adequate and suffcient notice.
pursuant to Bankruptcy Rule 2002(b), of
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16
17
the hearing Lo approve the Disc(osure Statement
has been given; and after due deliberaiion md upon the Court's determinaiion rhat the relief
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requested in the Motion is in the best interests of the abovc.captioned Debtors, their estates
creditors and other parties in interest; and suffcient cause appearng therefor, it is hereby:
J9
20 ORDERED thn!:
21
1.
The MotiOn is grnted.
22
2.
The Disclosure Sialement COntains "adequate infonnation" as defincd in
23 Bankptcy Code scciion 1125(3), and is hereby APPROVED in aU reects pursuanl to
24 Bankrutcy Code seeion 1125(3).

25
26
27 i Any c~piialz.d Icnn iiot defind herein sh;1I ba\'c iJc meaning aSCTib 10 such renn in the Moiion
oiib~DisclosuieSlaiemenl.;isapplicahil!.
28
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3.
A heoring 10 considcrconfnnaiion of
the Second Amended Plan or
2 Reorganization Pursuant (0 Chapter i i oflhe Bankruptcy Code (or the Rhodes Companies,
3 lie, ~.i. (as may be amended or
modified, ihe "Plan'') wil be held on January 14, 2010
4 at 9:00 a.m. (prevailing Pacific Time), or as soon ibereafter as counsel Can be hear, before
5 we Honorable Linda B. Riegle, United Slales Bankiplcy Judge, aiihc United Slates
6 Bankruptcy Court for the District of Nevada, Foley Federal Building. 300 S. Las Vega
7 Blvd., Las Vegas. Nevada 89J01 (the "Confirmation Hearin!!"). The Confirmation Heag
8 may be ndjoumed from iime to iime without furher noiiceolhcr than ihe announcement at
9 the Confinnation Hearng of the date or dales of any adjourned hearing.
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1 J of entry of
4.
The record date for purpses of
voting 10 accept or reject the Plan is the date
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this order (the "Record Date").

5.
12
The deadline for the recepi of Ballots acceting or rejecting ibe Plan shall be
13 4:00 p.rn (Paclfic Tjme) on JaJloary 4, 2010 (the "Votin~ Deadline"). For a Balloi fo be
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14 counted, it must be actually received priorla the Voting Deadline al he applicable addres
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15 indicated in the voiing inslrucionsHml accompany the Ballot.
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6.
January 4.1010 is fixed as ihe last day far Jiling and sering wntten
17 objections. comments or responses. including any supporting memoranda, to confinnaiion of
i 8 the Plan. Any such objections must (a) be in writing; (b) conrorm to the Ban~plcy Rutes
19 and Local Rules; (c) Slate the name and address ofihe objcciing pary and the amoWlt and
10 nature of
the claim or interest ofsueh party; (e) slate with parcularty (he basis and nature
2) of
any objection and, ifpraeticabJe, a proposed modificaiion to ihe Planihal would resolve
22 such objceiion; and (d) be fied, logelher with proof ofservce, wiih the Coun, and be served
23 so thaiiheyare actually received by: (i) the Clerk of
the Court; () Counsel for the First
24 Lien Steering Commillee; (ii) the United States Trustee; (iv) counsel 10 the Debtors; and (v)
25 counsel to the Creditors' Commillee, eaeh at the addresses set fort in the Confirmation
26 Hearing Noiice, no later than 4;00 p.m. (prevailing Pacfie Time) on January 4,1010
27 (which is at least twemy-fivc (25) days aRer the proposed distrbution ofihe Confirmation
28 3
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Hearing Notice).
7.
The Firsl Lien Steeng Committee shall file Is memorandum in suprt of
3 Plan confinnaiion, and anyolher pary supporting the Plan shall fie with th CQur and
4 serve on lhe applicable objecting party any respnse 10 a timely fied objection to
5 confinnalion oflhe Plan by January II, 2010.
8.
The First Lien S1ettng Comminee shall not be required to solicit votes from
7 the Holders of General Unscured Claims whose Claims have been paid priorto the
8 Disclosure Statement Hearg, 10 ihe exlent such Claims would have oterwise bee entitled
9 to vote on ihe Plan.
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9.
The Claims and Solicitation Agent shall fie the Voting Report no later than
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i i January ii~ioio.
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10.
The FirsT Lien Steering Comminee may serve solicilaiion package to holder
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13 of claims entitled to vote on the Plan in either CD.Rom form or paper copies. To the cXlenl
14 a creditor receives a solicitation package in CD-Roll fotm, such creditor ca reques a.
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paper
15 version by contaciing the Claims and Solicitation Agent by telephone at (866) 989-6144 or
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16 contact Brian Osborne al bosbornemnrmgmt.com and the Claims and Solictaiion Agent
17 shall send a paper copy of
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the solicitation package to any stIch creditoral no charge to such
18 creditar.
19
11.
Any part)' in interest may seek funher clarification from ihe COtIrt on vote
20 tabulation and ihe solicitation process, and retain ihe righl Co object or raise any issue with
21 ,
2
2
/ DISAPPROVED,
Dated Ihi&2fPilY of. ('..1'0.- 009.
24 By' Bf,""o.l ;. (11

2S
26 August Landis
-Ut.
27 300 Las Vegas Blvd. S., SIc. 4300

28 Las Vegas, NV 89101
Offce of ihe United Slates Trustee
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SubmiUed by:
2
Nile Leatham (NY Bar No. 00283&)
3 KOLESAR & LEATHAM

Wells Fargo Financial Center
4 3320 W. Sahara Ave.
Las Vegas, NY &9102

5 (702) 979-2357 (Telephone)
6 (702) 362-9472 (Facsimile)
Nlcatham(lnevada.com
Dated; November 24, 2009

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LR 9021 Certification
In accordance with LR 9021, counsel submitting ihis document certifies as follows (check one):
_ The court has waived ihe requirement of
approval under LR 9021.
_No parties appeared or fied written objections, and there is no trstee appointed in the case.
appeared at the hearng, any unrepresented parties who appeared at the hearing, and any trstee appointed in this case, and each has approved or disapproved the order, or failed to respond, as indicated below.
L I have delivered a copy of this proposed order to all counsel who
Party
Approved
X
Disapproved
No Response
Debtors' Counsel Pachulski Stang, Ziehl & Jones LLP Larson & Stephens
Counsel to the Firt Lien Agent Skadden Arps Slate Meagher & Flom LLP
Counsel to the Second Lien Agent Ropes & Gray LLP
Counsel to the Rhodes Entities
X X X X X
Greenburg Traurig LLP

Counsel to the Creditors' Committee Parsons Behle & Latimer
Offce of
the United States Trustee
Counsel 10 Stanley Engineering Anderson, McPharlin & Conners LLP
Counsel to Clark County Olson, Cannon, Gonnley & Desruisseaiix

Submitted by:
DATED this 1st day of
December 2009.
By: /sf Nile Leatham Nile Leatham (NY Bar No. 002838) KOLESAR & LEATHAM Wells Fargo Financial Center
3320 W _ Sahara Ave.
Las Vegas, NV 89102 (702) 979-2357 (Telephone)

(702) 362-9472 (Facsimile)
Nlealhamtmkinevada.com
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Exhibit C
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SOLICITATION PROCEDURES
A. The Record Date
The Bankptcy Court has approved the date that an order is entered approving the
Disclosure Statement as the Record Date tor purposes of determining, among other things, wruch
Holders otClaims are entitled to vote on the Plan.!

B. The V otig Deadline
TIie Banptcy Court has approved 4:00 p.m. (prevailing Pacific time) on January 4, 2010 as the Voting Deadline. To be counted as votes to accept or reject the Plan, all Ballots
must be properly executed, completed and delivered by using the return envelope provided or by
delivery by: (a) first class mail; (b) overnight courier; (e) peronal deliver; (d) email; or
(e) fax,
so that they arc actually received, no later than the V oiing Deadline by the Claims and
Solicitation Agent. The Ballots wil clearly indicate the appropriate mailing address, email
address and fax number to which your Ballot may be sent
c. Solicitation Procedures
I. The Solicitation Package: The following materials shall constitute the Solicitation Package:
a. a cover letter: (i) describing the contents of the Solicitaton Package and
instrctions on how paper copies of any materials that may be provided in
CD-ROM format can be obtained at no charge and (ii) urging the Holders to accept the Plan; in each of the Voting Classes (as defined below) to vote
b. the Solicitation Procedures Order;
c. a copy of the Solicitation Procedures;
d. an appropriate form of Ballot;

e. the Confirmation Hearing Notice (as defined below);
f. a copy of a lcttcr signed by the First Lien Steering Committee, the
Debtors, the Creditors' Committee and the Second Lien Agent

(collectively, the "Recommending Paries") in support of
the Plan;
g. a copy of a letter signed by the Creditors' Committee in support of the
Plan; and
h. the approved form of the Disclosure Statemcnt (together with the PLan
which is Exhibit A thereto) in CD-ROM format.
Capitalized tenns used but not otherwse defined herein shan have the meanings ascribed to them in lhe Plan, Disclosure Statement, or Solicitation Procedures Order, as applicable.
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2. Distribution of the Solicitation Packages: The Solicitation Packages shall be sered

on:
a. Holders of Claims for which Proofs of Claim have been timely-fied, as
reflected on the Claims Register as of the Record Date, which have not Claims been withdrawn or disallowed, provided. however, that Holder of
to which an objection is pending at least fifteen days prior to the Confiation Heang shall not be entitled to vote unless they become
eligible to vote though a Resolution Event in section C.3 herein;
b. Holder of ClaIms that are listed in the Debtors' Schedules, with the
exception of those Claims that have been paid in full or are scheduled as contingent, unliquidated, or disputed (excluding such scheduled Clais Claim); and that have been superseded by a timely-fied Proof of
c. Holders whose Claims arise pursuant to an agreement or settlement with
the Debtors, as reflected in a document fed with the Bankptcy Cour, in

an order of the Bankptcy Court, or in a document executed by the
Debtors pursuant to authority granted by the Bankrptcy Court, in each"

case regardless of whether a Proof of
Claim has been Filed; and

Nevada_
d. the United States Trustee for the District of
3. Temporar Allowance of Claims for Voting Purooscs: If a Holder's Claim is subject to an objection as of the Recrd Date, the Holder of such Claim canot vote any disputed portion of its Claim unless one or more of the following events have taken place at leat five
business days before the Voting Deadline: (i) an order of the Bankptcy Court is cntered
allowing such Claim pursuant to section 502(b) of the Banptcy Code, after notice and a hearing; (ii) an order of the Bankrptcy Cour is entered temporarly allowing such Claim for voting purposes only pursuant to Banptcy Rule 3018(a), after notice and a hearing; (iii) an order of the Bankptcy Court approving a stipulation qr other agreement by the Holder of such Claim and the Debtors, with the consent of the First Lien Steering Committee, resolving the
objection and allowing such Claim in an agreed upon amount; (iv) a stipulation or other
agreement is executed by the Holder of such Claim with the Debtors, with the consent of the First Lien Steering Committee, temporarly allowing the Holder of such Claim to vote its Claim in an agreed upon amount; or (v) the pending objection to such Claim is voluntarly withdrawn by the objecting pary (each, a "Resolution Event"). No later than two business days after a Resolution Event, the Claims and Solicitation Agent shall distrbute a Solicitation Package and a pre-addressed, postage pre-paid envelope to the relevant Holder of such temporarly allowed Claim that has been allowed for voting purposes only by such Resolution Event, which must be
returned according to the instructions on the Ballot by no latCf than the Voting Deadline.
If thc Holder of a Claim receives a Solicitation Package, but the First Lien Steering
Committee or the Debtors (with the consent of
the First Lien Steering Committee) object to such
Claim after the Record Date but before fifteen days prior to the Confirmation Heang, the notice
of objection wil inform such Holder of the rules applicable to Claims subject to a pending
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objection, and the procedures for temporar allowance for voting purses. Furtherore, if the
Holder of a Claim receives a Solicitation Package, but the First Lien Steering Committee or the
Debtors (with the consent of the First Lien Steering Committee) object to such Claim after fifteen days prior to the Confirmation Hearng, the Holder's Claim shaH be deemed temporarly
allowed for voting puroses only without further action by the Holder of such Claim and without
fuher order of the Bankruptcy Cour.
4. Form of Notice to Unclassified Claims and Unimpaired Classes: The First Lien
Steering Committee wil not solicit votes from unclassified Claims or Claims in Unimpaire Classes that are deemed to accept the Plan. The First Llen Steerig Committee wil, however,
send a Notice of Non-Voting Status, in lieu of the Solicitation Package to the Holders of
such
Claims. This notice wil explain to the Holder of an unclassified Claim or a Claim in an
Unimpaired Class of such Holder' non-voting status and that such Holders may obtain certain
materals in the Solicitation Package from the Claims and Solicitation Agent.
5. Publication of Confirmation Hearng Notice: The First Lien Steering Committee,
through the Debtors, shall, one time after the Disclosure Statement Hearng, publish the
Confirmation Hearing Notice, which will contain, among other things, the Plan Objection Deadline, the Voting Deadline, and date of the Confinnation Hearig, in The Las Vegas Sun to provide notification to those persons who may not receive notice by maiL. Such publication of
the Confirmation Hearing Notice shall occur on a date no less than fifteen days prior to the Voting Deadline.
D. Voting and General Tabulation Procedures
I. Holder of Claims Entitled to Vote: Only the following Holders of Claims in Voting
Classes shall be entitled to vote with regard to such Claims:

a. Holders of Claims for which Proofs of Claim have been timely-filed, as
reflected on the Claims Register as of the Record Date, which have not Claims been withdrawn or disallowed, provided. however, that Holders of
to which an objection is pending at leat fifteen days prior to the Confrmation Hearing shall not be entitled to vote unless they become
eligible to vote through a Resolution Event in section C.3 herein;
b. Holders of Claims that are listed in the Debtors' Schedules, with the
exception of those Claims that have been paid in full or are scheduled as contingent, unliquidated, or disputed (excluding such scheduled Claims Claim); and that havc been superseded by a timely-filed Proof of
c. Holders whose Claims arise pursuant to an agrement or settlement with
the Debtors (with the consent of the First Lien Steeng Committee), as
reflected in a document filed with the Banptcy Court, in an order
the Banruptcy Court, or in a document executed by the Debtors pursuant to

of
authority granted by the Bankruptcy Court, in each case regardless of

whether a Proof of Claim has been Filed.
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2. Establishin~ Claim Amounts: In tabulating votes, the following hierarchy shall be

used to determine the Claim amount associated with each Holder's vote regardless of
the amount
that the Claim Holder may write in on the Ballot:

a. the Claim amount as Allowed by an order of the Banptcy Cour;
b. the Claim amount Allowed (temporarily or otherise) puruant to a
Resolution Event under the procedures set fort in section C.3 herein;
c. the Claim amount settled and/or agreed upon by the Debtors with the
consent of
the First Lien Steeng Committee prior to the Recrd Date;
d. the Claim amount contained in a Proof of Claim that has been timely-filed
by the Bar Date (or deemed timely-fied by the Banptcy Court under applicable law) that is not the subject of an objection or has not been
withdrawn; provided, however, that Ballots cast by Holders whose Claims
are listed in unliquidated or unown amounts that are not the subject of
an objection wil count for satisfyng the numersity requirement of
section 1126(c) of the Banptcy Code, and wil count as Ballots for
Claims in the amount of $1.00 solely for the purposes of satisfYng the
dollar amount provisions of section I i 26(c) of
the Banptcy Code;
e. the Claim amount listed in the Debtors' Schedules, provided that such Claim is not scheduled as contingent, disputed, or unliquidated and has not been paid; and
f. in the absence of any of
the foregoing, zero.
The Claim amount established herein shall control for voting purposes only, and shall not constitute the Allowed amount of any Claim.
3. General Ballot Tabulation: The following voting procedures and stadard

assumptions shall be used in tabulating ballots:
a. except as otherwise provided herein, unless the Ballot being fuished is timely submitted on or prior to the Voting Deadline, the First Lien
Steering Committee shall reject such Ballot as invalid and, therefore,

declinc to count it in connection with Confirmation;
b. the Claims and Solicitation Agent wil date and time-stamp all Ballots
when received. The Claims and Solicitation Agent shall retain the original
Ballots and an electronic copy of the same for a period of one year after the Effective Date of the Plan, unless otherwise ordered by the Banptcy
Court;
c. the Claims and Solicitation Agent wil filc a voting report (the "Voting
Reoort") with the Banptcy Court by Januar i 1, 2010. The Voting Report shall, among other things, delineate every Ballot that does not
conform to the voting instructions or that contains any form of irregularty
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includng, but not limited to, those Ballots that are late or (in whole or in
materal part) illegible, unidentifiable. lacking signatures or lacking

necessary information. or damaged ("Irregular Ballots");
d. the method of deliver of Ballots to be sent to the Claims and Solicitation
Agent is at the election and risk of each Holder, and except as otherwise'
provided, a Ballot or Master Ballot wil be deemed delivered only when

the Claims and Solicitation Agent actually receives an executed Ballot;
e. an executed Ballot is required to be submitted by the Entity submittng
such Ballot;
f. no Ballot should be sent to any of
the Debtors, the Debtors' agents (other than the Claims and Solicitation Agent), the Debtors' financial or legal advisors, the First Lien Agent or its legal advisors, the Second Lien Agent or its legal advisors, or the First Lien Steering Commttee's financial or legal advisors, and if so sent will not be counted;
frm time to time the tens of the Plan in accordance with the ters
g. the First Lien Steerng Committee expressly reseres the right to amend
thereof (subject to compliance with the requirements of section 1127 of

the Banptcy Code and the ters of
the Plan regarding modification);
h. if multiple Ballots are received from the same Holder with repect to the
same Claim prior to the Voting Deadline, the last Ballot timely received wil be deemed to reflect that voter's intent and wil supersede and revoke any prior Ballot;
i. Holders must vote all of their Claims within a paricular Class either to
accept or reject the Plan and may not split any votes. Accrdingly, a Ballot that parially rejects and partially accepts the Plan wil not be
counted. Further, to the extent there are multiple Claims within the same Class, the First Lien Steering Committee may, in its discretion, aggregate the Claims of any particular Holder within a Class for the purose of counting votes;
j. a person signing a Ballot in its capacity as a trustee, executor,
administrator, guardian, attorney in fact. offcer of a corporation, or
otherise acting in a fiduciary or representative capacity must indicate
such capacity when signing and, if required or requested by the Clais
and Solicitation Agent, the First Lien Steering Committee, or the

Bankrptcy Court, must submit proper evidence to the requesting pary to so act on behalf of such Holder;
k. the First Lien Steering Committee, subject to contr order of the
Bankptcy Court, may waive any defects or irregularties as to any

particular Ballot or Master Ballot at any time, either before or after the close of voting, and any such waivers will be documented in the Voting
Report;
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1. neither the First Lien Steering Committee, nor any other Entity, wil be
under any duty to provide notification of defects or irregularties with

resect to delivered Ballots other than as provided in the Voting Report,
nor wil any of them incur any liability for failure to provide such
notification;
m. unless waived or as ordered by the Banptcy Cour, any tIefects or

irregularities in connection with deliveries of Ballots must be cured prior to the Voting Deadline or such Ballots wil not be counted;
n. in the event a designation oflack of good faith is requested by a pary in
interest under section 1
126(e) of the Bankruptcy Code, the Banptcy
Court will determine whether any vote to accept and/or reject the Plan cast
with respect to that Claim will be counted for purposes of determining

whether the Plan has been accepted and/or rejected;
o. subject to any order of the Banptcy Court, the Firs Lien Steering
Committee reserves the right to reject any and all Ballots not in proper form, the acceptance of which, in the opinion of the First Lien Steering
Committee, would not bc in accoJdance with the provisions of the Bankptcy Code or the Bankptcy Rules; provided, however, that any
such rejections wil be documented in the Voting Report;
p. if a Claim has been estimated or otherwise Allowed for voting purposes
only by order of the Bankptcy Court, such Claim shall be temporarily
Allowed in the amount so estimated or Allowed by the Bankrptcy Cour

for voting purposes only, and not for puroses of allowance or
distribution; and
q. if an objection to a Claim is fied, such Claim shall be treated In
accordance with the procedures set forth in section C.3 herein.

4. Special Provisions Related to Proposed Substantive Consolidation: The Plan is
predicated on the substantive consolidation of
the Estates into a single consolidated Estate for all
purposes associated with confirmation and consummation of the Plan. Consequently, when tabulating voting results, assuming substantive consolidaton, all Ballots shall be counted as if fied against a single consolidated Estate, and any obligation of any of the Debtors and all
guaranties thereof of by or enforceable against any other Debtors and any joint and several the obligation of the Debtors wil be treated as a single obligation in the amount of
liability the primary
obligor.
E. Third Party Release, Exculpation, and Injunction Language in Plan
the Plan is TIie third pary release, exculpation, and injunction language in Aricle VII of included in the Disclosure Statement and further notice wil be provided in the Confirmation
Hearng Notice.
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Exhibit D
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UNITED STATES BANKRUPTCY COURT DISTRICT OF NEVADA SOUTHERN DIVISION
INRE:
TnE RHODES COMPANIES. I~LC,
aka "Rhodes Homes," el aL,
Case No. 09-14S14-LBR

(Jointly Admnistered)
Cliilpter 11
Debtors.!
Affects: l' All Debtors
D Affects the following

Debtor(s)
NOTICE OF (0 CONFIRMATION HEARIG AND OBJECTION DEADLINE WITH REPECT TO THE SECOND AMENDED MODIFIED PLAN OF REORGANIZATION PURSUANT TO CHAPTER II OF THE BANKRUPTCY CODE FOR
THE RHODES COMPANIES, LLC, ET AL., AND
(II) SOLICITATION AND VOTIG PROCEDURS
TO ALL CREDITORS AND PARTIES IN INTEREST:

1. Approval of Disclosure Statement and Solicitation Procedures. On December
Nevada (the "Banotcy Court") entered an order (the "Solicitation Procedures Order") (i) approving the Second Amended Modifed Disclosure Statement for the Second Amended Modifed Plan of Reorganization
1, 2009, the United States Banptcy Court for the Distrct of
Pursuant to Chapter 11 of the Bankrptcy Code Jor 111e Rhodes Companies. LLC, et ai. (as
amended from time to time and including all exhibits and supplements, the "Disclosure
Statement") for the Second Amended Modifed Pian of Reorganization PursuanllO Chapter 11 of the Bankrptcy Codefor The Rhodes Companies. LLC, et aJ. (as amended from time to time and
including all exhibits and supplements, the "Plan"), as containing adequate information, as
required under section lI25(a) of title 11 of the United States Code (the "Banptcv Code"), and (ii) authorizing the First Lien Steering Committee to solicit votes with regard to the
acceptance or rejection of the Plan. All capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Plan or the Disclosure Statement, as applicable.
2. Confirmation Hearing. A hearng to confirm the Plan (the "Confiation
Hearng") wil commence at 9:00 a.m. prevailing Pacific Time on January 14, 2010, before the
Honorable Linda B. Riegle, United States Bankruptcy Judge, located at 300 Las Vegas
Boulevard South, Las Vegas, Nevada 89 i 0 i. The Confirmation Hearng may be continued frm time to time by announcing such continuance in open court or otherwise, without further notice
i The Debtors in thes eases, along with the last four digits of each Debtor's federal ta identfication number, if applicable, ar: Heritage Land Company, LLC (2918); The Rhodes Companies, LtC (3060); Rhodes Ranch
General Parership (1760); Tick, LP (0707); Glynda, LP (5569); Chalkine, LP (0281); Batcave, LP (6837);
Jackknife, LP (6189); Wallboard, LP (1467); Overlow, LP (9349); Rhodes Rach Golf and Countr Club (9730);
Tuscany Acquisitions. LLC (0206); Tuscany Acquisitions H, LtC (8693); Tuscany Acquisitions II, LtC (9777);
Tuscany Acquisitions iV, LLC (0509); Parcel 20 LtC (5534); Rhodes Design and Development Corp. (1963); C&J Holdings. Inc. (1315); Rhodes Realty, Inc. (0716); Janpa LLC (4090); Elkhorn Investments, Inc. (6673); Rhodes
Homes Arzona, LLC (7248); Rhodes Arzona Properties, LLC (8738); Tribes Holdings LLC (4347); Six Fealers
Holdings, LLC (8451); Elkhorn Partners, A Nevada Limited Parership (9654); Bravo Inc. (2642); Gung-Ho Concrete, LLC (6966); Geronimo Plumbing, LLC (6897); Apache Framing, LLC (6352); Tuscany Golf Countr Club, LLC (7132); Pinnacle Grading, LLC (4838).
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to parties in interest. The Banptcy Court, in its discretion and prior to the Confiation
Hearing, may put in place additional procedures governing the Confirmation Hearing. The Plan may be modified, if necessary, prior to, during, or as a result of the Confinnation Hearing.
without further notice to interested paries.
3. Record Date. The Record Date for purposes of determining which Holder of
Claims and Interests are entitled to vole on the Plan is December 1, 2009.
4. Voting Deadline. If you hold a Claim against one of the Debtors as of the
Record Date, and are entitled to vote to accept or reject the Plan, you have received a Ballot and voting instrctions appropriate for your Claim(s). For your vote to accept or reject the Plan to be
counted, you must complete all required information on the Banot, executc and retu the
completed Ballot in the manner indicated on the Ballot by 4:00 p_m. prevailing Pacific Time on January 4, 2010 (the "Voting Deadline"). Any failure to follow the voting instrctions included
with the Ballot may disqualify your Ballot and your vote.
5. Objections to the Plan. The Banptcy Court has established January 4, 2010,
at 4:00 p.m. prevailing Pacific Time, as the last date and time for filing and serving objections to
the Confinnation of the Plan (the "Plan Objection Deadline"). Any objections to the
confirmation of Rules; (c) state the name and address of
the Plan must: (a) be in wrting; (b) confonn to the Bankruptcy Rules and Loeal the the objecting pary and the amount aIld nature of
claim or interest of such par; (c) state with paricularty the basis and natue of any objection and, if practicable, a proposed modification to the Plan that would resolve such objecton; and
(d) be filed, together with proof of service, with the Court, and be served so that they are actually
received by: (i) the Clerk of the Bankruptcy Court, Judge Linda B. Riegle's Chambers,
Courtroom i, 300 Las Vegas Boulevard South, Las Vegas, Nevada 89101; (ii) counsel to the First Lien Steering Committee, Akin Gump Strauss Hauer & Feld LLP, One Bryant Park, New York, New York 10036, Attn.: Phlp C_ Dublin, Abid Qureshi; (iii) co-counsel to the First Lien Steering Committee, Kolesar & Leatham, Wells Fargo Financial Center, 3320 West Sahara Avenue, Las Vegas, Nevada 89102, Attn.: Nile Leatham; (iv) the United States Trustee, 300 Las Vegas Boulevard South, Suite 4300, Las Vegas, Nevada 89101, Att.: Edward M. McDonald; (v) counsel to the Debtors, Pachulski Stang Ziehl & Jones LLP, 10100 Santa Monica Boulevard, Suite HOD, Los Angeles, California 90067-4100, Attn.: James L Stang, Shirley S. Cho; (vi) cocounsel to the Debtors, Larson & Stephens, 810 S. Casino Center Boulevard, Suite 104, La
Vegas, Nevada 89101, Attn.: Zachariah Larson; and (vii) counsel to the Creditors' Committee,
Parsons Behle & Latimer, 50 West Libery Street, Suite 750, Reno, Nevada 89501, Attn.: Rew R. Goodenow, Karl . Olsen, and One Utah Center, 201 South Main Street, Suite 1800, P.O. Box
45898, Salt Lake City, Utah 84145-0898, Attn.: J. Thomas Beckett, David P. Bilings
(collectively, the "Noticed Paries").

6. Inquiries. The First Lien Steering Commttee wil serve, though the Debtors,
paper copies of, and/or a CD-ROM containing, the Solicitation Procedures Order, the Disclosure Statement, and all exhibits to the Disclosure Statement, including the Plan, on the Noticed Parties. Holders of Claims who are entitled to vote to accept or reject the Plan shalt receive a Solicitation Package containing paper copies of this Confinnation Hearng Notice, applicable Ballot(s), and the Solicitation Procedures. The Solicitation Package (except the Ballots) may also be obtained from Omni Management Group, LLC's (the "Claims and Solicitation Agent')
website at www.omnimgt.eom/rhodes, by writing to The Rhodes Companies, LLC, c/o Om Management Group, LLC, 16161 Ventura Blvd., Suite C, PMB 477, Encino, California 91436, by calling (866) 989-6 i 44, or by sending an email toNova(lomnimgt.com. For Holders of
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Claims, the Claims and Solicitation Agent wil answer questions regarding the proceures and
requirements for voting to accept or reject the Plan and for objecting to the Plan, provide
additional copies of all materials, and oversee the voting tabulation. The Claims and Solicitation Agent can be contacted by writing to The Rhodes Companies, LLC, c/o Omni Management
Group, LLC, 16161 Ventura Blvd., Suite C, PMB 477, Encino, California 91436, by callng
(866) 989-6144, or by sending an email toNova(gomnimgt.com.
7. Temporary Allowance of Claims for Votig Purposes. If a Holder's Claim is

subject to an objection as of the Record Date, the Holder of such Claim canot vote any isputed portion of its Claim unless one or more of the following events have taken place at least five
business days before the Voting Deadline: (i) an order of the Bankruptcy Court is entered
allowing such Claim pursuant to section S02(b) of the Banptcy Code, after notice and a
heang; (ii) an order of the Bankptcy Court is cntered temporarly allowing such Claim for
voting purposes only pursuant to Bankruptcy Rule 3018(a), after notice and a hearng; (iii) an order of the Banptcy Court approving a stipulation or other agreeent by the Holder of such
Claim and the Debtors, with the consent of the First Lien Steering Committee, resolving the
objection and allowing such Claim in an agreed upon amount; (iv) a stipulation or other agreement is executed by the Holder of such Claim with the Debtors, with the consent of the First Lien Steering Committee, temporarly allowing the Holder of such Claim to vote its Claim
in an agree upon amount; or (v) the pending objection to such Claim is voluntarly withdrawn
by the objecting party (each, a "Resolution Event"). No later than two business days after a
Resolution Event, the Claims and Solicitation Agent shall distrbute a Solicitation Package and a pre-addressed, postage pre-paid envelope to the relevant Holder of such temporarly allowed Claim that has been allowed for voting purposes only by such Resolution Event, which must be
returned according to the instrctions on the Ballot by no later than the Voting Deadline.
the Holder ofa Claim receives a Solicitation Package, but the First Lien Steerng Committee or the Debtors (with the consent of the First Lien Steering Committee) object to such Claim after the Record Date but before fifteen days prior to the Confirmation Hearng, the notice of objection wil inform such Holder of the rules applicable to Claims subject to a pending objection, and the procedures for temporar allowance for voting purpses. Furhermore, if the Holder of a Claim receives a Solicitation Package, but the First Lien Steering Committee or the Debtors (with the consent ofth~ First Lien Steering Committee) object to such Claim after fifteen days prior to the Confirmation Hearng, the Holder's C1am shall be deemed temporaly allowed for voting purposes only without further action by the Holder of such Claim and without
If
further order of the Banptcy Court.
8. Distribution Record Date. The Bankptcy Court has approved the date that the
Confirmation Order is entered on the docket in these Chapter 1 i Cases as the Distribution
Record Date for purposes of detennining which Creditors are entitled to receive distrbutions
under the Plan.
9. Release, Exculpation, and Injunction Language in the Plan. Pleae be advised
that the Plan contains certain release and exculpation provisions. Moreover, Aricle VlILH of
the Plan proposes an injunction and provides as follows: except as otherwise expressly provided
in the Plan or tr obligations issued pursuant to the Plan, all Entities who have held, hold, or may hold Claims against the Debtors, and all Entities holding Interests, are permanently enjoined,
from and after the Effcctivc Date, from: (1) commencing or continuing in any maner any action
or other proceeding of any kind against the Debtors or Reorganized Debtors on accunt of or in
connection with or with respect to any such Claims or Interests; (2) enforcing, attaching,
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collecting, or recoverng by any maner or means any judgment, award, decree or order against the Debtors or Reorganized Debtors on account of or in connection with or with respect to any such Claims or Interests; (3) creating, pedecting, or enforcing any encumbrance of any kind
against the Debtors or Reorganed Debtors or the propery or estates of the Debtors or
Reorganized Debtors on account of or in connection with or with respect to any such Claims or Interests; (4) asserting any right of setoff, subrogation, or recoupment of any kind against any
obligation due from the Debtors or Reorganized Debtors or against the propert or Estates of the
Debtors or Reorganized Debtors on accunt of or in connection with or with respect to any such Claims or Interests unless such Holder has Filed a motion requesting the right to pedorm such Claim setoff on or before the Confirmation Date, and notwithstanding an indication in a Proof of or Interest or otherwise that such Holder assert, has, or intends to preserve any right of setoff pursuant to section 553 of the Bankptcy Code or otherwise (provided, that, to the extent the Rhodes Entities Claims are Allowed, the Rhodes Entities, without the need to fie any such motion, shall retain the right to assert a setoff against any Claims or Causes of Action that the
Reorganized Debtors or Litigation Trust may asser against the Rhodes Entities, with the Reorganzed Debtors and Litigation Trust, as applicable, reservng the right to challenge the propriety of any such attempted setoff, with any such challenge to be resolved by the Bantcy
Cour); and (5) commencing or continuing in any maner any action or other proceeing of any kind on account of or in connection with or with respect to any such Claims or Interests released
or settled puruant to the Plan.

Dated:
December 4, 2009
Las Vegas, Nevada
By: Is/Philip Co Dublin
Nile Leatham (NY Bar No. 002838) KOLESAR & LEATHAM Wells Fargo Financial Center 3320 W. Sahara Ave. Las Vegas, NV 89102 (702) 979-2357 (Telephone)
(702) 362-9472 (Facsimile)
Nleatham(fklnevada.com
and
Philip C. Duhlin (N Bar No, 2959344) Abid Qureshi (NY Bar No. 2684637) AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park New York, New York 10036 (212) 872-1000 (Telephone) (212) 872-1002 (Facsimile) pdublin(fakingump.com aqureshi(akingump.com
Counsel for the First Lien Steering Committee
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Exhibit E
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December 4, 2009
To the Creditors or The Rhodes Companies, LLC and Its Affliated Debtors:
The Firt Lien Steering Committee, i the Debtors, the Creditors' Committee and the Second Lien Agent
(collectively, the "Reeonunendinit Parties"), as paries to the settlement (the "Mediation Settlement") that is
embodied in the Second Amended Modified Plan ofRcorganiztion Puruant to Chapter i I of for
the Bankptcy Code
The Rhodes Companies, LLC, cl al. (the "Plan"), wrte this letter to creditors to recommend that each creditor eniitled 10 vote on the Plan vOle in favor of the Plan.
The Plan is the product of extensive negotiations among the Recommending Paries and certain other
paies to ihe Mediation Seulement and incorporates the terms of
the Mediation SeulemeDt. The Mediation
Settlement was reached following a the day mediation session held on August 17,24 and 25, 2009 before the
Honorable Richard Neiter, United Slates Bankptcy Court, Central Distrct of California. The Mediation
Settlement provides the framework for the treatment of claims under the Plan and a material increase in the projected reveries for the majority of the Debtors' creditors absent such settlement.
Pun..iant to the Mediation Settlement and the Plan, the First Lien Lenders will asume ownership of the Debtors and wil continue to operate the Debtors as a going concern homebuilder primarly in the Las Vegas, Nevada market. In addition, the First Lien Lenders will receive, on account of their seurd claims, $1.5 millon in
cash frm iheircollateral and their pro rata share of$50 million in new us the $1.5 milion of the cash they receive from their
secured noles. The First Lien Lenders will
many of the Debtors' general unsecured creditors for the allowed amount of such claim. A list of claims being purchased by the Firt Lien Lenders is attached to the Disclosure Statement as Exhibit H. The Second Lien leders wil receive 50% ofthe net proceeds of certain pending litiga!ion on account of their secured claims, assuming the class of Second Lien Lenders voles in favor of the Plan. The non-Debtor Rhodes Entiiies will, among other thngs, pay $3.5 milion in cash to the collateral to purhase the claims of
Reorganized Debtors and wil receive, among oiher things, (i) a limited release as desbed in the Plan and (ii)
certain assets located in Arzona. Thc Plan also provides for the establishment of a Litigation Trut that wil purue
certin claims and causes belonging 10 the Debtors' estates for the benefit of
those unsecurd creditors whose claims
ar not purhased by the Firt Lien Lenders. The Firt Lien Lenders and the Second Lien Lenders will also reeive
distrbutions from the litigation Trut as unsecured creitors on account of their deficiency claims.
Please be advised tht Aricle VII oCthe Plan contemplates releases for numerous paries. The
Recommending Paries recommend Utat, prior 10 voting on the Plan, eaeh creditor review closely the releases
contained in Aricle VII.

As discussed more fully in Aricle IV.J.3 ofihe Disclosure Statement, the Recommending Paries believe
that the Mediation Settlement is fair iind equitable. Moreover, given the currt facts and cirumstances of the
Debtors' chaptcr 1 i cases, the Recommending Paries believe that the Plan'provides the best alterative for creitors
and, therefore, recommends ihat the Debtors' crediiors vote in favor of
the Plan.
Uyou have any questinns with respect to tlic trealment for your clas, please contact Meredith Lahaie at (212) 872-1000 (mlahaielakingump.com).
Very truly yours,

The Recommending Paries
i All capiiali:ted tenns not otherwse defined hcrein shall have the meaning ascribed to such terms in the
Plan.
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Exhibit F
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RHODES COMPANIES OFFICIAL CREDITORS COMMITTEE
December.l, 2009
Re: Rhodes Companies Reorganization
To the Unsecured Creditors of the Rhodes Companes:
The purpose of this letter is to tell you that the Offcial Committee (the "Committee") of Unsecured Creditors of the Rhodes Companies supports the proposed plan (the "Plan") that is described in and attached to the enclosed disclosure statement (the "Disclosure Statement"). A ballot is also enclosed if you have a claim and may be entitled to vole.
The Disclosure Statement has been approved by the Bankruptcy Court as containing carefully before casting your ballot. THE DISCLOSURE STATEMENT AND ITS EXHIBITS, INCLUDING THE PLAN, . IS THE ONLY SOURCE OF INfORMATION YOU CAN RELY ON IN DECIDING HOW TO VOTE.
The Committee recommends lhat, aCler you read he Disclosure Statement carefully, you
adequate information about the Plan. Please read the disclosure statement
should vote in favor of the Plan.
The Plan, in very general terms, provides that the ownership of the Rhodes Companies wil be transferred to the existing senior secured first lien lenders (the "Lenders"). The Lenders wiI also receive cash from their collateral, cash from certain non-debtor Rhodes entities, and other consideration.
Pursuant to a settlement that was negotiated among practically all the interested parties,
including lhe Committee, ihe Lenders have agreed, amang other lhings, to use up to $1.5 milion of
the cash they receive from their collateral to purchase, for face value (i.e., 100%), the claims of
many of the Rhodes Companies' unsecured creditors. In addition, the Lenders have agreed to waive certain bankruptcy claims they may have against such creditors. The unsecured creditors that have already qualified to have their claims purchased in this manner are listed on Exhibit H to
Uie Disclosure Statement. The details of the Lenders' claims purchase program are described on
pages 63 through 66 of the Disclosure Statement.
Without this settlement - or without expensive and uncertain iligation - none of the Rhodes Companies' unsecred creditors would receive anything more than a few pennes on the dollar on their claims. With this settlement, the Committee believes that Uie vast majority of those
creditors holding undisputed claims wil be paid in full. Consequently, the Committ supports
the Plan and recommends that you should vote in favor of the Plan.
PLEASE NOTE THE BALLOT SUBMISSION DEADLINE OF JANUARY 4 AT 4:00 PM, Pacific Time. Ballots that are n.'Ceived after that time- 011 that date will not be counted. After the
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votes are counted, the Plan wil then be presented to the Bankruptc Court faT confirmation on
January 14, 2009.
If you have qut'stions. please feel free to contact me, or any of the Committee members listed below, or the Committee's legal counseL.
Thank you very much.
:
Beverly Wolf, Interstate Plumbing and Air
Conditoning
A... Chairwoman of the Official Commitee of
Unsecured Creditors of the Rhodes Companies
Other Members of the CommiUee:

Helen Buchanan, Southwest Iron Works, LLC
Jim VanWoerkom, CG. Wallace, Inc.

S. Bradley Wadsworth, M&M Electric, Inc.
Counsel to the Committe:

J. Thomas Beklt, Parsons Behle & Latimer, tbeckett&pblutah.com, 801-536-60.
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Exhibit G
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Nile Leatham (NY Bar No. 002838)

2 3
KOLESAR & LEATHAM
Wells Fnrgo Financial Center 3320 W. Sahara Ave. Las Vegas, NY 89102
Telephone: 702.979.2357
Facsimile: 702.362.9472
4
5
E-Mail: 11ieatham(?klncvada.com
6 7
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Philip C. Dublin (NY Bar No. 2959344) Abid Qureshi (NY Bar No. 2684637)
AKIN GUMP STRAUSS HAUER & FELD LLP
One Bryani Park New York, NY 10036

Telephone: 212.872.1000
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Facsimile: 212.872.1002
E-Mnil: Ddublin(akinRUlnp.com
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aqureshi(iakingump.com
Counsellor the First Lien Steering Cummilee
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UNITED STATES BANKRUPTCY COURT DISTRICT OF NEVADA

In rc:
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Case No.: BK-S~09-14814-LBR (Jointly Administered)

Chapter i i
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THE RHODES COMPANIES, LLC, aka

"Rhodes Homes," et al.,1
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Debtors.
Affects:
19
Hearing Date: November 24, 2009
r8L All Oebtors
Hearing Time: i :30 p.m.
20
21
No.
lThc Deblors in these cases, along wiih their case iiunibers are: Heritage Land Company, LLC (Case No. 09-(4817); Holdings, LLC (Case No. 09-(4814); Tribes 09-14778); The Rhodes Companies, LLC (Case
22
23 24 25
Apache Framing, LLC (Case No. 09-14818); Geronimo Plumbing LLC (Case No. 09~14820); Gung-Ho
Concrete LLC (Case No. 09-14822); Bravo, Inc. (Case No. 09-14825); Elkhorn Partners, A Nevada Limited
Partnership (Case No. 09-14828); Six Feallicrs Holdings, LLC (Case No. 09-14833); Elkhorn Investments, Inc. (Case No. 09-14837); Jarupa, LLC (Case No. 09-14839); Rhodes Really, Inc. (Case No. 09-14841); C & 1 Holdings, Inc. (Case 1\0. 09-14843); Rhodes Ranch General Partnership (Case No. 09-14844); Rhodes Design and Development Corporation (Case No. 09-I'lM6); Parccl20, LLC (Case No. 09-14848); Tuscany Acquisitions iv, LLC (Case No. 09-14849); Tuscany Acquisitions II, LLC (Case No. 09-14850); Tuscany Acquisiiions II,
LLC (CascNo. 09-14852); Tuscany Acquisitions, LLC (Case No. 09-14853); Rhodes Ranch Golf
Country Club,
26
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LLC (Case No. 09-14854); Overflow, LP (Case No. 09-14856); Wallboard, LP (Case No. 09-14858); Jackknife,
LP (Case No. 09-14860); Batcave, LP (Case No. 09-14861); Chalkline, LP (Case No. 09-14862); Glynda, LP
(Case No. 09-14865); Tick, LP (Case No. 09-141166); Rhodes Arizona Propertes, LLC (Case No. 09-14868);
Rhodes Homes Arizoiia. I.L.C. (Case No. 09-14882); Tuscany GoirCounlry Club, LLC (Case No. 09-14884); and Pinnacle Grading, LLC (Case No. 09-14887).
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-I Affects the followin 1 Debtor(s)
Courtroom i
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SECOND AMENDED MODIFIED DISCLOSURE STATEMENT FOR THE SECOND AMENDED MODIFIED PLAN OF llEORGANIZATION PURSUANT TO CHAPTER II OFTHE UNITED STATES BANKRUPTCY CODE FOR THE RHODES COMI'ANIES, LLC, ET AL.
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THIS DISCLOSURE STATEMENT (THE "DISCLOSURE STATEMENT") CONTAINS SUMMARIES OF CERTAIN PROVISIONS OF THE SECOND AMENDED PLAN OF REORGANIZATION PURSUANT TO CHAPTER I I OF THE UNITED STATES BANKRUPTCY CODE FOR THE RHODES COMPANIES, LLC, ET AL. (THE "l'LAN"), CERTAIN STATUTORY PROVISIONS, CERTAIN DOCUMENTS RELATED TO THE PLAN, CERTAIN EVENTS IN THE DEBTORS' CHAPTER I I CASES AND CERTAIN FINANCIAL INFORMATION. AL'I1OUGH THE FIRST LIEN STEERING COMMIlTEE BELIEVES THAT THESE SUMMARIES ARE FAIR AND ACCURATE, THAT THESE SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY TO THE EXTENT
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THEY DO NOT SET FORTH THE ENTIRE TEXT OF SUCH DOCUMENTS OR STATUTORY PROVISIONS. THE INFORMATION INCLUDED HEREIN IS FOR PURPOSES OF SOLICITING ACCEPTANCE OF TIE PLAN AND SHOULD NOT BE
RELIED UPON FOR ANY PURPOSE OTHER THAN TO DETERMINE WHETHER AND
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HOW TO VOTE ON THE PLAN. THE SUMMARIES OF THE FINANCIAL INFORMATION AND THE DOCUMENTS THAT ARE AlTACHED HERETO OR
INCORPORATED BY REFERENCE HEREIN ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO SUCH INFORMATION AND DOCUMENTS. IN THE EVENT OF ANY INCONSISTENCY OR DISCREPANCY BETWEEN A DESCRIPTION IN THE DISCLOSURE STATEMENT AND THE TERMS AND PROVISIONS OF THE PLAN OR THE OTHER DOCUMENTS AND FINANCIAL INFORMATION INCORPORATED
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18
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HEREIN BY REFERENCE, THE PLAN OR THE OTHER DOCUMENTS AND

FINANCIAL INFORMATION, AS THE CASE MAY BE, SHALL GOVERN FOR ALL PURPOSES. F ACTUAL INFORMATION CONTAINED IN THE DISCLOSURE STATEMENT HAS BEEN PROVIDED BY THE DEBTORS' MANAGEMENT EXCEPT
22
23
WHERE OTHERWISE SPECIFICALLY NOTED. THE FIRST LIEN STEERING

COMMlllEE DOES NOT WARRANT OR REPRESENT THAT THE INFORMATION CONTAINED HEREIN, INCLUDING THE FINANCIAL INFORMATION, IS WITHOUT ANY MATERIAL INACCURACY OR OMISSION.
THE STATEMENTS AND FINANCIAL INFORMATION CONTAINED HEREIN
24
25
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ARE MADE AS OF THE DATE HEREOF UNLESS OTHERWISE SPECIFIED. HOWERS OF CLAIMS AND INTERESTS REVIEWING THE DISCLOSURE
STATEMENT SHOULD NOT INFER THAT THERE HAVE BEEN NO CHANGES IN THE FACTS SET FORTH HEREIN BETWEEN THE DATE HEREOF AND THE TIME OF SUCH REVIEW. EACH HOLDER OF A CLAIM ENTITLED TO VOTE ON THE
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PLAN SHOULD CAREFULLY REVIEW THE PLAN, THE DISCLOSURE STATEMENT,

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AND EXHIBITS TO THE PLAN AND DISCLOSURE STATEMENT IN THEIR ENTIRETY BEFORE CASTING A BALLOT. THE DISCLOSURE STATEMENT DOES NOT CONSTITUTE LEGAL, BUSINESS, FINANCIAL OR TAX ADVICE. ANY
PERSONS DESIRING ANY SUCH ADVICE OR OTHER ADVICE SHOULD CONSULT WITH THEIR OWN ADVISORS.
NO PARTY IS AUTHORIZED TO GIVE ANY INFORMATION WITH RESPECT TO THE PLAN OTHER THAN THAT WHICH IS CONTAINED IN nlE DISCLOSURE STATEMENT. NO REPRESENTATIONS CONCERNING THE DEBTORS OR THE VALUE OF THEIR PROPERTY HAVE BEEN AUTHORIZED BY THE FIRST LIEN STEERING COMMITlEE OTHER THAN AS SET FORTH IN THE DISCLOSURE
STATEMENT. ANY INFORMATION, REPRESENTATIONS OR INDUCEMENTS

MADE TO OBTAIN AN ACCEPTANCE OF THE PLAN THAT ARE OTHER THAN, OR INCONSISTENT WITH, THE INFORMATION CONTAINED HEREIN AND IN THE
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PLAN SHOULD NOT BE REI.ED UPON BY ANY HOLDER OF A CLAIM OR

INTEREST.
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WITH RESPECT TO CONTESTED MA TlERS, ADVERSARY PROCEEDINGS AND OTHER PENDING, THREATENED OR POTENTIAL LITIGATION OR ACTIONS,
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THE DISCLOSURE STATEMENT DOES NOT CONSTITUTE AND MAY NOT BE CONSTRUED AS AN ADMISSION OF FACT, LIABILITY, STIPULATION OR
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W Al VER, BUT RATHER AS A STATEMENT MADE IN SETTLEMENT

NEGOTIATIONS AND PROTECTED BY RULE 408 OF THE FEDERAL RULES OF EVIDENCE.
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THE DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE IIITED STATES SECURITES AND EXCHANGE
COMMISSION (THE "SEC"), NOR HAS THE SEC PASSED UPON TIlE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN.
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22 23 24 25
ALTHOUGH THE FIRST LIEN STEERING COMMITlEE HAS USED ITS BEST EFFORTS TO ENSURE THE ACCURACY OF THE FINANCIAL INFORMATION PROVIDED IN THE DISCLOSURE STATEMENT, THE FINANCIAL INFORMATION CONTAINED IN, OR INCORPORATED BY REFERENCE INTO, THE DISCLOSURE STATEMENT HAS NOT BEEN AUDITED.
THE PROJECTIONS CONTAINED IN EXHIBITS D AND E TO THE DISCLOSURE STATEMENT AND REFERENCED IN ARTICLE V OF TIE DISCLOSURE STATEMENT HAVE BEEN PREPARED BY THE FIRST LIEN
STEERING COMMITlEE WITI TIE ASSISTANCE OF ITS ADVISORS. THESE
26
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PROJECTIONS, WHILE PRESENTED WITH NUMERICAL SPECIFICITY, ARE

NECESSARILY BASED ON A VARIETY OF ESTIMATES AND ASSUMPTIONS THAT,
THOUGH CONSIDERED REASONABLE BY THE FIRST LIEN STEERING

COMMITlEE, MAY NOT BE REALIZED AND ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS. ECONOMIC, COMPETIlVE, INDUSTRY, REGULATORV,
III
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MARKET ANi) FINANCIAL UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE FIRST LIEN STEERING COMMITfEE'S CONTROL. THE FIRST LIEN STEERING COMMITfEE CAUTIONS THAT NO REPRESENTATIONS CAN BE MADE AS TO THE ACCURACY OF THESE PROJECTIONS OR TO THE ABILITY TO ACHIEVE THE PROJECTED RESULTS. SOME ASSUMPTIONS
INEVITABL Y WILL NOT MATERIALIZE. FURTHER. EVENTS AND

CIRCUMSTANCES OCCURRING SUBSEQUENT TO THE DATE ON WHICH THESE PROJECTIONS WERE PREPARED MAYBE DIFFERENT FROM THOSE ASSUMED OR. ALTERNATIVELY, MAY HAVE BEEN UNANTICIPATED, AND THUS THE
6
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OCCURRENCE OF THESE EVENTS MAY AFFECT FINANCIAL RESULTS IN A
MATERIALLY ADVERSE OR MATERIALLY BENEFICIAL MANNER. THE

PROJECTIONS, THEREFORE. MAY NOT BE RELIED UPON AS A GUARANTY OR OTi IER ASSURANCE OF THE ACTUAL RESULTS THAT WILL OCCUR.
SEE ARTICLE VIOl' THE DISCLOSURE STATEMENT, ENTITLED "CERTAIN
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FACTORS TO BE CONSIDERED PRIOR TO VOTING," FOR A DISCUSSION OF

CERTAIN CONSIDERATIONS IN CONNECTION WITH A DECISION BY A HOLDER OF AN IMPAIRED CLAIM TO ACCEPT OR REJECT THE PLAN.
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THE DISCLOSURE STATEMENT HAS BEEN DETERMINED BY THE

BANKRUPTCY COURT TO CONTAIN ADEQUATE INFORMATION AS REQUIRED BY SECTION 1125 OF TITLE II OF THE UNITED STATES CODE, I I U.S.c. 101 -
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1532 (THE "BANKRUPTCY CODE"), WHICH DETERMINATION DOES NOT

CONSTITUTE A RECOMMENDATION OR APPROVAL OF THE PLAN.
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UNLESS OTHERWISE STATED, ANY CAPITALIZED TERM USED HEREIN
SHALL HAVE THE MEANING ASSIGNED TO SUCH TERM HEREIN OR, IF NO MEANING IS SO ASSIGNED, THE MEANING ASSIGNED TO SUCH TERM IN THE
PLAN.
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THE BANKRUPTCY COURT HAS SCHEDULED THE CONFIRMATION

HEARING TO COMMENCE ON JANUARY 14,2010 AT 9,00 A.M. PREVAILING PACIFIC TIME BEFORE THE HONORABLE LINDA B. RIEGLE, UNITED STATES BANKRUPTCY JUDGE, IN THE UNITED STATES BANKRUPTCY COURT FOR
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THE DISTRICT OF NEVADA, IN COURTROOM I IN THE FOLEY FEDERAL

BUILDING LOCATED AT 300 LAS VEGAS BOULEVARD SOUTH, LAS VEGAS, NEVADA 89101. THE CONFIRMATION HEARING MAY BE ADJOURNED FROM TIME TO TIME BY THE BANKRUPTCY COURT WITHOUT FURTHER NOTICE OTHim THAN AN ANNOUNCEMENT OF THE ADJOURNED DATE MADE AT THE CONt'IRMATION HEARING OR ANY ADJOURNMENT THEREOF.
OBJECTIONS TO CONFIRMATION OF THE PLAN MUST BE FILED AND SERVED ON OR BEFORE JANUARY 4, 2010, IN ACCORDANCE WITH THE SOLICllATlON NOTICE THAT THE FIRST LIEN STEERING COMMITTEE FILED AND SERVED ON HOLDERS OF CLAIMS, HOLDERS OF INTERESTS AND OTHER PARTIES IN INTEREST. IF OBJECTIONS TO CONFIRMATION ARE
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NOT TIMELY SERVED

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AND
SOLICIT A T10N NOTICE, TIlEY BANKRUPTCY COURT.
FILED IN COMPLIANCE WITII THE MAY NOT BE CONSIDERED BY TilE
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TABLE OF CONTENTS
2
ArLicle i. SUMMARY I
)
4
5
A. Plan Overvie\v .m......m.n.........................................__..........................um...n..........l B. Seulcmcnt Overvie\v ...................um...m...................nm............................nh.......... C. Potential Claims Against the Rhodes Entitics...................m..n................u............. D. The Debtors' Principal Assets and Indebtedness ...............mm................................ E. Treatment of Claims and Interests ............_.mm................................m...............m.
F. Claims EstilniiteSn.................................................................................................
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E E
Cl Questions and Answers Regarding this Disclosure Statement and the Plan......... I
1.1. Voting and ConJirmation.....................................................................................1
i. Consummation oCtile Plan...........................................................................1

Art;clc II. BACKGROUND......................................................................................................2 the Debtors' Business Operations ................................................2 A. Description of
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B. Pending Signilcant Litigation .........................................................................2

Act;cle HI. THE CHAPTER II CASES ..........................................................................2
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A. Events Leading to the Chapter 11 Cases......................................................2

B. Initiation of
the Chapter I I Cases..................................nm......................2

tile Creditors' Committee ........................................................2
C. Stabilization of Operations ..............................................................................2

D. Appointment of
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E. Claims Bar Dates ..............................................................................................2

Art;cle IV. SUMMARY OF THE PLAN ..........................................................................2
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A. Overvicw of a Chaptcr 1 I Plan ......................................................................3 B. Adininislrativc and Priority Claims .................................................................3 i

C. Classification and Treatment of Claims ................... ............................................3 D. Bankruptcy Code Section 1111(b) Election.....................................................3 E.Cramdown.........................................................................................................35 the Plan.................................................................3 F. Means for Implemcntation of G. Treatment of Executory Contracts and Unexpired Leascs..............................51
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H. Procedures for Resolving Disputed Claims .................................................55

1. Provisions Governing Dislributions..................................................................5 J. Effect of Confirmation of the Plan.......................................................................6
K. Allowance and Payment of
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Certain Administrative Claims ................................7
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23
L Conditions Precedent to Confinnation and Consummation of
the Plan..............7 M. Modification, Revocation, Or Withdrawal ofihe Plan ..................................7 N. Retention of Jurisdiction .......................................m..........................................81
24 25
Art;cle V. STATUTORY REQUIREMENTS FOR CONFIRMAlJON OF THE PLAN ............81
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A. The Confinnation Hearing..................................................................................8 i B. Confirmation Standards .......................................................................................8 C. Financial Feasibility ..m...............................................................................00......83

D. Bcst Interests of
Creditors Test ..........................................................oo..mmm.......83
E. Acceptance by Impaired Classes ..........................................................................8

F. Confinnation Without Acceptance by All Impaired Classes ..................00..........8
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Article Vi. CERTA1N FACTORS TO BE CONSII1ERED PRIOR TO VOTING.........nm.........8

2
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A. Certain Bankruptcy Considerations .........nu.............................m.mh...................8 B. Other Considerations ....... .................................................................................... 9 C. Plan Risk Factors ...............................................................................................9 i
Article VII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES .................................9
A. Certain U.S. Federal Income Tax Consequences to Reorganized Debtors m..m...9
4
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B. Certain Federal Income Tax Consequences to Holders of Claims.......................9 C. Otner Tax vlalters ................................................n....................................... i 0
Article VIII. RECOMMENDATION...................................................................................... i 0
Article ix. CONCLUSI ON ............................................................................. ................. i 0
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Article
i.
SUMMARY
2
3
The following summary is qualified in its entirety by the more detailed information contained in the Plan and elsewhere in the Disclosure Statement.
On either March 31, 2009 or April, L, 2009 (collectively, the "Petition Date"), The Rhodes Companies, LLC and certain of its afflates and subsidiaries (collectively, the "Debtors") each filed voluntary petitions for relief under chapter i i of ihe Bankruptcy Code in the Bankruptcy Court. Prior to and after the Petition Date, the Debtors operated one of the largest independent homebuilding businesses in Las Vegas and Nevada.
The Disclosure Statement is being furnished by the First Licn Steering Committee
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pursuant to section 1 i 25 or the Bankruptcy Code in connection with: (a) the solicitation of
"Confirmation Hearing"), which is scheduled for January 14,2010 at 9:00 a.m. Pacific Time (the "Confirmation Hearing Date"). A copy of the Plan is annexed hereto as Exhibit A and incorporated by reference herein.
The Disclosure Statement describes certain aspects of ihe Plan, including the treatment
of Claims and Interests, and describes certain aspects of the Debtors' operations, projections
9 votes for ihe acceptance or rejection of the Plan and (b) the confirmation hearing (the
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The Plan is the product of extensive negotiations and a settlement reached among the
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First Lien Steering Committee, the Debtors, James Rhodes and his non-Debtor affliates (collectively, with James Rhodes, the "Rhodes Entities"), the Creditors' Committee and the
ankruptcy Court, Central District of California (the '.Mediation Settlement"). The First Lien Agent also aUended the mediation session but is not a part to the Mediation Settlement.
As a result or this Mediation Settlement, the Plan contemplates that, upon the Debtors'
7. :: 17 Second Lien Agent. The settlement was reached following a three day mediation session held on August 17, 24 and 25, 2009 before the Honorable Richard Neiter, United States
i 18
19
20 emergence from chapter i 1, the Ot:btors will continue to operale as a going concern
21
homebuilder primarily in the Las Vegas market. The owners orthe Debtors after they emerge
from chapter 1 i will be the First Lien Lenders. Holders of general unsecured e1aims
(including the First Lien Lenders and Second Lien Lenders on account of their deficiency 22 claims) will receive interests in a litigation trust unless their claims arc listed on Exhibit H to the Disclosure Statement, in which case their claims may be purchased for up to 100 cents on 23 the dollar for a full cash recovery to the extent those claims are not disputed and become 24 Allowed. The litigation trust will analyze and, if appropriate, pursue claims and causes of
25 prepetition secured debt, which claims and causes of action shall be transferred to the
26 litigation trust on the effective date of the Plan. The First Lien Steering Committee believes that these claims and causes of action include claims against the Rhodes Entities that are not
27 expressly released under the Plan. A list of the Rhodes Entities is set forth on Attachment
action belonging to the Debtors that were not part of the collateral securing the Debtors'
A to
the Mediation Seiilemcnt Tenn Sheet.

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The lhin contemplates and is predicated upon the substantive consolidation of the
Debtors' chapter 1 i cases into a single proceeding solely for the purposes of the chapter I I
cases and all actions with respect to confirmation, consummation and implementation of the
Plan as set forth in more detail in Article IV below. The First Lien Steering Committee
believes that the Plan provides the basis for the maximum recoveries possible for all constituents and that if the Plan is not confirmed, unsecured creditors will receive little to no recovery on account ortheir claims.
. Settlement Overview
The primary terms or the Mediation Seltlcmcnt include the following (ihe terms of
the
settlement arc set rorth in greater detail on the Mediation Term Sheet attached as Exhibit 1 to
the Plan):
. Upon the Debtors' emergence from chapter 11, the Debtors, as reorganized (the "Reorganized Debtors"), will be owned by the First Lien Lenders. In addition to
receiving the equity of the Reorganized Debtors, the First Lien Lenders wil receive their pro rata share of (i) $50 millon in new secured notes. (ii) $1.5 million in cash from the proceeds of their collateral and (iii) iiiterests in the litigation trust on account
ofthcir unsecured deficiency claims.
. The Debtors' Second Lien Lenders wil receive their pro rata share of account of their claims if they vote in favor of
the following on
the Plan: (i) 50% urihe net proceeds of

their the Second Lien Lenders votc in favor of
the Stanley Engineering Litigation and (ii) litigation trust interests on account of unsecured deficiency claims. In addition, if
the Plan, thc Rcorganized Debtors wil pay the reasonable fccs and expenses of
counsel to the agent for thc Second Lien Lenders in an amount not to exceed
$500,000. lf the Second Lien Lenders do not vote in favor of the Plan, thcy wil their unsecured deficiency claims. receive only litigation trust interests on account of
. The First Lien Lenders will use ihe $ 1.5 milion cash payment rcferenced above to
purchase the claims of the unsecured creditors listed on Exhibit I-I to this Disclosure
Statement to the extent that such claims are not disputed and arc Allowed, which will result in such creditors receiving a cash payment of 100 cents on account of their allowed claims against the Debtors. If the Plan is not confirmed, (he claim purchases
wil not happen and unsecured creditors listed on Exhibit H to this Disclosure
Statement will likely receive little 10 no recovery on account of their claims.
. Unsecured crediLors whose claims are not purchased by the First Lien Lenders wil
receive interests in the litigation trust on account of thcir allowed claims. The terms of the litigation trust are set forth in the draft Litigation Trust Agreement which is attached as Exhibit I to this Disclosure Statement.
. The number of interesls in the litigation trust to he received by unsecured creditors,

First Lien Lenders and Second Lien Lenders will be dctermined by the amount of each applicable creditor's unsecured claim as compared to the total amount of unsecured claims.
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. The litigation trust will be funded initially with $100,000 by the Reorganized Debtors.
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5
The litigation trust will analyze and, if deemed appropriate by the Litigation Trustee, pursue claims and causes of action that have been transferred to the litigation trust
under the Plan. These potential claims and causes of action include those claims and
causes of action belonging to ihe Debtors against any third party not specifically released uner the Plan and that are not pai1 of the First Lien Lenders' collateraL. For a
list of categories or claims and potential causes of action, see Article l.c. of this
Disclosure Statement regarding potential claims and causes of action against the Rhodes Entities and Exhibit G to the Disclosure Statement for a list of potential claims and causes of aciion against third parties, including service providers and vendors. If a
claim is purchased by the First Lien Lenders pursuant to the Plan, however, the
7
E
,
0
Debtors wl waive any claims for preference recovery under section 547 of the
Bankruptcy Code on account of hose claims that are purchased at the request of the
Creditors Committee. As stated in more detail below, the recovery on account of
~ -i -i Q -i
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9
10
these
0 " .
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"
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ii
12
13
potential claims and causes of acon are highly speculative. The First Lien Lenders estimate that ret:overy by the General Unsecured Claims wil be approximately 3.2% under the Plan, but there can be no guarantee that the recovery wil be that high.
. The Rhodes Entities will
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14 15
transfer the Rhodes Ranch Golf Course (through the equity of the non~Debtor Rhodes Entities that own the Rhodes Ranch Golf Course) to the Reorganized Debtors. The most recent appraisal for ihe Rhodes Ranch Golf Course valued the Golf Course at approximately $7.9 millon. The Reorgani:ied Debtors wil
assume any thir party debt on the Rhodes Ranch Golf Course, up to a maximum
"
. Q z;: ~
00
amount of $5.9 millon. The Reorganized Debtors may, under certain circumstances, require Rhodes to purchase the Rhodes Ranch GoltCourse any time between four (4)
16
17 18
g "'
'" N
-
and eight (8) years from the Effective Dale for $5.9 milion in cash. The Rhodes Entities will have the right to repurchase the Rhodes Ranch Golf Course for $5.9 millon after eight (8) years subject to certain tenns and conditions. James Rhodes
will contribute his asserted $2.4 milion loan to the entity that owns the Rhodes Ranch Oolf Course and indemnify the Debtors, the Reorganized Debtors, Newco and the entity that owns the Rhodes Ranch Golf Course from any liability arising from the contribution of such loan.
19
20
21
. The Rhodes Eniities wil pay $3.5 millon in cash to the Reorganized Debtors, which will be used to fund distributions under the Plan and provide working capital to the
extent of any excess.
22
23
24 25
. The Rhodes Entities wil cooperate with the Reorganized Debtors in connection with
cerlain matters related to the Reorganized Debtors' continued home-building
operations including, without limitation, matters pertinent to (i) HOA boards, (ii)
contractor licenses, and (iii) the maintenance of performance bonds.
. The Rhodes Entities wl receive a limited release under ihe Plan. The release wil be
26 27
28
limited to claims and causes or action arising under chapter 5 of the Bankruptcy Code (i.e., preferential transfers and fraudulent transfers) solely to the extent that the
transactions to which such claims and causes of action relate have been expressly tliscJosed in either the statements of financial affairs filed by the Debtors with the
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2
3
Bankruptcy Court or Schedule B to the settlement term sheet which is attached as Exhibit 1 to the Plan. Any claims or causes of action against the Rhodes Entities that belong to the Debtors' estates that arc not expressly released under ihe Plan will be transferred to the litigation trust.
. Any allowed claims ihal the Rhodes Entities have against the Debtors' Estates will be treated as general unsecured claims and wil not be subject to subordination. TIie Rhodes Entities will also be permitted to assert that they have ihe right to setoff any allowed claims they have against the Debtors' Estates against any claims that the
Debtors' Estates have against the Rhodes Entities.
4
5
6
7
..
"'
"'
" "'
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. . " . . . :; . M
8 9 10
11
. The Rhodes Entities wil also receive the Debtors' nonMcore assets located in Arizona as set forth on Attachment D to Exhibit 1 to the Plan or otherwise set forth in the stock and asset purchase agreement pursuant to which such transfer shall be effectuated, which assets arc not necessary for the Debtors' reorganization plan and are completely landlocked by holdings of the Rhodes Entities. These assets will be transferred free
and clear of any third part creditor claims (which third party creditor claims wil
cg " ~ -: " -eM ~ W-t.:ix
12 13 14
remain assertable against the Debtors' Estates). All ofthesc Arizona assets constitute collateral securing the Debtors' obligations to the First Lien Lenders and Second Lien
:;.. ..:: -. l 0 M
Lenders. The First Lien Steering Committee believes that these assets are worth
approximately $1 million. The Arizona Assets shall be transferred through the Rhodes
;:";: .. 00 :; =t ~
II C, E
;.:~'; " -'...: i: c .. 0; f-O 0'" ~ ,. C

.. . C
15 16
17 18 19
Entities' acquisition of the stock or Rhodes Arizona Properties LLC and Elkhorn lnvcstmcnts, Inc., as reorganized, and certain assets or Rhodes Homes Arizona LLC. Any non-real property assets or assets not listed on Attachment D to the Mediation
Term Sheet that are titled in Rhodes Arizona Properties LLC or Elkhorn Investments, Jnc. shall be transferred to Newco pursuant to the stock and asset trdnsfer agreement.
10 the extent any real propert assets located in Arizona are titled in any Debtor other
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""
"
than Rhodes Arizona Properties LLC, Elkhorn Investments, Inc. or Rhodes Homes Arizona, such real property assets shall be transferred to the Rhodes Entities pursuant
to the stock and asset transfer agreement.
i-
20
21
. The First Lien Steering Committee and the Rhodes Entities will structure the Plan in a manner that is tax advantageous for the Rhodes Entities; provided, that, such structure docs not create any tax liabilities for the Debtors or the First Lien Lenders.
c. Potentiul Claims Against the Rhodes Entities
22
23
On April 7, 2009, the First Lien Steering Committee moved for the appointment of a
chapter 1 i trustee (the "Trustee Motion"). The Trustee Motion was based, in part, on
allegations of questionable and unlawful business dealings, and suspicions concerning the
propriety of Mr. Rhodes' conduct as the Debtors' President, as detailed in a report prepared by
a nationally recognized firm retained by ihe First Lien Agent to conduct an investigation inlo
24
25
26 27 28
the Debtors' business operations (the "Rhodes Report"). In light of the allegations contained in the Rhodes Report, and as a result of Mr. Rhodes' conduct during the prepetition negotiations, the First Lien Steering Committee did not believe that Mr. Rhodes had been
acting in accordance with his fiduciary duties. Thus, the First Lien Steering Committee Filed
the Trustec Motion.
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The Rhodes Entities and the Debtor!; opposed the Trustee Moiion and objected to the
2
3
Rhodes Report as containing unsubstantiated allegations and hearsay_ The Debtors provided
extensive discovery and a deposition at the request of the First Uen Steering Commuee.
Prior to the hearing on this malter, the First Lien Steering Committee took the Trustee Motion
ofT calendar in light of the discovery produced and the progress the parties were making on
4
5
negotiations over the plan of reorganization.

The allegations contained in the Trustee and Rhodes RCpolt form the basis of pOl entia I
claims against the Rhodes Entities. Among the potential claims arc the following:
. Claims for beach of fiduciary duty;
. ,
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'" "-
7 8 9
10
. Claims for misappropriation of
Debtor assets for personal use;
.J
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= =
. Claims for usurping corporate opportunity for the benefit of competing interests;
. Claims for mismanagement of
the Debtors' operations;
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ii
. Claims for fraudulent transfers (to the extent no! expressly released under the
12
13
Plan);
. Claims for the diversion of corporate resources for the benefit of competing
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14
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interests.
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16 17
18
Additional discovery and analysis wil be required to be performed by the Litigation Trustee before any determination can be made whether the foregoing claims or any other claims are colorable and should be pursued by the litigation trust against the Rhodes Entities. The litigation trust will undertake a detailed analysis of any potential claims before making a determination on whether to pursue any litigation against the Rhodes Entities_ While it is
impossible at this time to predict with any certainty whether the foregoing claims or any other
..
f-
19
claims will be prosecuted and, if they are prosecuted, whether they wil be successful, the
First Lien Steering Committee believes that prosecution of claims against the Rhodes Entities may yield up to $)0 milion or more in judgments in favor of the litigation trust. However,
such claims could also yield no proceeds if they are unsuccessful, or if the Rhodes Entities'
20
21
22
23
approximately $10.6 millon in asserted claims arc determined to be valid claims and are permitted to be used as offsets against any liabilties that the Rhodes Entities may be
determined to have against the Debtors.
24
25
The Rhodes Entities do not believe that viable claims or causes of action exist against them and they wil vigorously defend any litigation based on the allegations contained in the Trustee Motion or othef\..ise, which allegations the Rhodes ntities assert arc baseless and premised on inadmissible hearsay.
D. The Debtors' Principal Assets and Indebtedness
26 27 28
The principal assets of the Debtors include their homebuilding assets, which include
inventory of undeveloped land and developed lots, and constructed homes (sold and unsold).
The Debtors' principal indebiedness includes: (I) First Lien Lender Secured Claims; (2)
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2
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Second Lien Lemler Secured Claims; (3) Other Secured Claims; (4) Priority Non-Tax Claims; (5) General Unsecured Claims; (6) Rhodes Entities Claims; (7) First Lien Lender Deficiency
Claims; (8) Second Lien Lender Deficiency Claims; (9) Insured Claims; (10) Subordinated
Claims; and (II) Intercompany Claims.

E. Treatment of
4
5
Claims and Interests
Except for unclassified Administrative Claims and Priority Tax Claims, the Plan
divides all Claims against the Debtors into various Classes. The table set forth below summarizes the Classes of Claims and Interests under the Plan, the treatment of Claims and
6 7
Interests and projected recovery for Holders of Allowed Claims in Stich Classes and the
entitlement of
. 0
.. ..
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'"
Holders of Claims in such Classes to vote to accept or reject the Plan.
"
. . 0 " "
9
10
~0 ~o .. 0'" " -oN ~ ~-t.: ~ ::o; ,e;: .... .. e.
The allowance, classification and treatment of all Allowed Claims and Interests and the respective distributions and treatments under the Plan take into account and conform to the relative priority and rights of the Claims and Interests in each Class in connection with any contractual, legal and equitable subordination rights relating thereto, whether arising under
II
12 13
general principles of equitable subordination, section 5 io of the Bankruptcy Code or

otlierwise. Pursuant to section 510 of
;:...., .. o . U) ....:(i ,t E ;:p: ,-: ..~::
the Bankruptcy Coe, the Reorganized Debtors reserve tht: right to reclassify any Allowed Claim or Interest in accordance with any contractual, legal or equitable subordination relating thereto.
I. Summary and Treatment of Allowed Unclassified Claims
14
15
.0 ~ - z;: ~ ~ "
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ESTIMATED AMOllNT OR
VAL.UE OF CL.AIMS
16
17
"
."
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DESCRIPTION BASIS)
Administrative Claims $750,000
(CONSOLIDATED
TREATMENT FOR ALLOWlm CLAIMS

Each Allowed Administrative Claim slial1 be paid in full. in
18 19
Cash. Allowed Administrative Claims include cosls

incurred in the opcriiion of the Debtors' businesses aftcr the Petition Date, ihe allowed fees and cxpenses ofProfcsionals
relained by the Debtors and the Creditors' Commillee and
the fees due to the United States lruslee pursuant to 28
lJ.S.C. 1930.
20
21
22 23 24 25
Priority Tax Claims S 125.000
Allowed Priority Tnx Claims shall be paid in liill, in Cash.
2. Summary and Treatment of Allowed Classified Claims

ESTIMATED AMOUNT OR VALUE OF
CL.AIMS
CL.ASS
26
27 28
NO. ~_..~.S.CRII'TlON
A-I First
(CONSOLIDAn:D
BASl_S)
Lien Lender
$325,947,566
FOR ALLOWED CLAIMS/PRo.I.:Cn:D RECOVERYISTATUSNOTING RIGHTS Each \If ihi: First Licn Lenders (or its Permilled
TREATMENT
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CLASS NO.
ESTIMATED AMOllNT OR OF VALliE CLAIMS (CONSOLIDATED

DESCIUPTION
Secured
BASIS)
4
5
Claims
TREATMENT FOR ALLOWED CLAIMS/PROJELTED RECOVERY/STATUSNOTING RIGHTS Nominee) shall receive on account of its Secured
Claims, (w) its pro rata share 0($1.5 millon in

Cash from ihe proceeds of the first Lien Lenders' Collateral, (x) its pro rata share or 100% orihc New First Lien Noles, and (y) iis pro rala share of 100% of the Ncwco Equity IntcrcsL~ (subject 10 dilution for any Newco Equity Inlerests issued pursuant to a Mmiagemenl and Director Equity Incentive Plan). to the Firsl Lien Lenders The $1. million payment
shall be allocated and
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deemed paid to the First Lien
9
10
Lenders in accordance with Article VII.F. of the

Plan.
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Proiected Recoverv on Account of Secured Claims: 28.9% SlalUs:Inipaired Votinl.: Entitled to Vote
A.2
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I-O' ~ ,. 0
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13
SccondUeii
Lender
$72,848,357.65
14 15 16
Secured
Claims
If the Class of Second Lien Lender Secured Claims voles in favor of the Plan, each of the Second Lien Lenders (or its Permitted Nomince) shall receive its
:E -: " M
pro r.ila share of 50% of the net proceeds of the Stanley Engineering Litigation on account of its
St.-cured Claims wiihout a reduction on account of
" :; z N :; M
..
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the
17
18 19
reasonable fees and expenses of Ropes & Gray LLll subject the Second Lien Agent, and lociil counsel for to an aggregate Clip of $500,000, each of which such
fees shall bc paid in Cash to the Second Lien Agent
on the Effective Date. If the Class of Sccond Lien Lender Secured Claims voies against the Plan, each of the Second Lien Lenders shall receive no revery
on account of such Secured Claims.
20
21
Proiected Recovery on Account of Secured Claims:

2.8%
22 23
24
A.3
Siatus:liipaired
Votin!!: Eniitlcdto
Yutc
OiherSccured Claims
$2.3 million
To the extent not satisfied by the Debtors prior to the
Effeciive Date, I-Iiilders of Other Secured Claims
shall eiiher (i) have such Claims reinstated iid

rendered llnimpaired,(ii) reccive
25 26 27 28
Cash in iiamouiil
equal to sueh Claims, including any interest required to be iiaid, (iii) receive the Collateral securing such
Claim and any interest required to bc paid, or (iv)

receive such trealmcnt 3S to which sueh Holder 3nd
the Rcorg:inized Debtors or the Debtors, wiih the
consent ofilic First Licn Sicering Committee (3nd in consult,tliun with ihe First Lien Agent and Second
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2
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CL.ASS
NO. DESCRlPTION
4
5
ESTIMATED AMOlJNT OR VALliE OF CLAIMS (CONSOLIDATED BASISl
TREATMENT FOR ALLOWED CLAIMS/PRQ.IECl1m RECOVERY/STATUSIVOTING RIGHTS

Lien Agent), othciwise agn:e.
ProccledRecovery: 100%
6
7
E
Slalus:Unimpaired Vnlin1?:lJeeniedtoAccept
B
o
~ E
I'rioriLyNon-Tax Claims
$0
E3Ch Holder of an Allowed Priorit)' Non-Tax Claim shall be paid in full, in Cash unless the Holder of m
&
Allowed Priority Non-Tax Claim and the

Rcorganizi:d Debtors or the Debtors, with the i;onsenl
of the First Lien Steering Commiuee (and in
"-
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9
10
:i o
M ~O
consultation with the First Lien Agent and Second

Lien Agent), otherwise agree.
Proiected Status: Reeoverv:
o. .. ~~ " -OM ~ it:.;oc

:: .. eN ~ii '- ~
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II
12 13 14 15 C-I
N/A.
Unimpaired Votin~: Decmcd to Accept

General UnsecliredClnims
::"';i ..
Esiimatedasserlcd amounl$IS million +
On the Effective Date, cach Holder of an Allowed General Unsecured Claim (including any Allowcd
Rhodes Entities Claims) shall receive its pro rata

share of the Litigation Trusl hileresls allocable 10 the
~ .... :
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Holders of General Unsecured Claims on account of its Allowed Claim.

Proiected Recoveiv:
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16
3.2%
In
17
18 C-2
First Lien Lender Deficiency Claims
SlaWs: Impaired
Votinit: Eniii)cd
Vote
$231,649,680
19
On ihe Effective Date, each Holder of an Allowed First Lien Lcndcr Deficiency Claim shall receive its
pro rata share of the Litigation Trust Interests
20
21
allocable to the Holders of First Lien Lender
Deficiency Claims on account of its Allowed Claim.

Proicc-ied RccovelV 3.2% Status: Impaired Votin!!: Entiiled to Vote
22
23
C-J
24
25
SecondLicii Lender Dcficiency Claims
$70,348,357.65
On the Effective Dale, each Holder of an Allowed Second Lien Lender Deficiency Claim shall receivc
its pro rata share of the Litigation Trust Interests
allocable to the Holders of Second Lien Lender

Deficiency Claims on account of its Allowed Claim.
If ihe CSS of Second Lien Lemler Secured Claims voles against the Plan, thc distribution of Liiigtion
26
27 28
Tnist Interests allocable to the Holders of Second Lien Lender Deficiency Clainis shall be subject to the reasoniiblc fees and expenses of Rope & Gray
LLP and local counsel for the Second Lien Agent.
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ESTI MATED AMOlJNT OR VALUE OF CLAIMS
CLASS
(CONSOUDATlm
AS1S).__
NO. DESCRIPTION
4
5
TREATMENT FOR ALLOWED CLA IMS/PROJECTED RECOVERY/STATUSIVOTlNG RIGHTS

Projected Recoverv: 3.2% Status: Impaired
Voiin!!: Entitled 10 Vote
6
C-4
7
E
Subordinated Claims
$0
Claims subordinated under applicable law shall not receive any recovery on account oftheir Claims.
ProicCied Recoverv: N/A
8 9
.. .. ..
'"
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. " .
Siatus:lmpaired
Votinii: Deemed 10 Reject
D
Old
10
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OJ
Equiiy Interests
Each holder of lIn Old Equity Interest shall not be
entitled to, and shall not receive or retain any

property or interest in property no account of such
Old
II
12
13
Equiiy Interest.
i. 0: ~:;
-. .
;.:-:';;
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Projected R!=9~: 0% Status:lmpaired

VoiinI!: Deemed 10 Reject
!i t' E
;C1-i'". ." f-O~ 0 ~ ,0 i-
14
E
Intcrcllmpny
$500,000,000
Ai the c1edion or the Reorganized Debtors,
..
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"
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15
Claims
N ~
16
17
Intercompany Claims wil be (i) reinslaied, in full or in part, (ii) resolved lhrough set-off distribuiion, or eonlributioii, in full or in part, or (ii) eanclled and
"
discharged, in full or in part, in which case sueh

discharged and satisfied portion shall be eliminated
:; .,
and the Holdi:rs thereof shall not be entitled 10, and

shall nol rcccivcor relain, any property
IS
19
or interest in
property on account of such portion under the rlan.

Projected Recovery: 0%
20
21
Slatus: Impaired Voting: Deemed to Reject
22
F. Claims Estimates
23
24
25
Upon information and belief, as of September IS, 2009, the Claims and Solicitation
Agent had received approximately 461 Proofs of against one or more or the Debtors was over $12.7 bilion, of
Claim and the total amount afClaims Filed which $12 bilion are duplicate
Claims that will be automatically deemed to be eliminated upon the Effective Date.
Additionally, the First Lien'Steering Committee believes that many of the Filed Proofs of
Claim are invalid, untimely, and/or overstated. Therefore, the Debtors, the Reorganized
26
27 28
Debtors and/or the First Lien Steering Committee will object to such Claims.
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The First Lien Steering Committee estimates that, at the conclusion of the Claims
2
3
objection, reconciliation and resolution process, the aggregate amount of Claims will be as set forth on the charts in Article 1.E. The Claims Register, which reflects all Claims Filed against
each Debtor Entiiy, is available for inspection at "yww.omnimgt.comlrhodcs.
4
5 6
7
E
Q
The Claims estimates arc approximate md based upon numerous assumptions and represent significant reductions in the aggregate race amount or Claims Filed. There is no guarantee that the ultimate amount of each category of Claims will conform to the estimates stated herein, and the majority of Claims underlying such estimate!' are subject to challenge. A number of Claims have been asserted in unliquidated amounts. The First Lien Steering Committee believes that certain Claims are without merit, and the Debtors, the Reorganized Debtors and/or the First Lien Steering Committee will object to all such Claims. There can be
no assurance, however, that Claim objections will achieve the significant reductions in Claims set forth above. Moreover, additional Claims may be Filed or identified during the Claims objection. reconciliation and resolution process that may materially affect the foregoing estimates.
G. Ouestions and Answers Reearding this Disclosure Statement and the Plan
"
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~= ~= ="'
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11
= N
12
13
1. What is Chapter t1?
14
15
Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. Under chapter 1 I, a debtor can reorganize or wind-down its business for the benefit of itself
cti: i.ii .. 00 = ~ ,. ~Q = - ,= ~ z-: " "N '" ~ N

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;;
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and holders of claims against and interesls in the debtor. Chapter 1 i also is designed to
16 17
18
.. ..
19
promote equality of treatment for similarly situated holders of claims against the debtor and similarly situated holders of interests in the debtor with respect to the distribution of the debtor's assets. The commencement of a chapter i i case creates an estate that is comprised of all of the legal and equitable interests of the debtor as of the filing date. The Bankruptcy Code provides that the debtor may continue to operate its business and remain in possession of its property as a "debtor in possession." The coiisummation of a chapter II plan is the principal objective of a chapter II case. A chapter I I plan sets forth the means for satisrying claims against, and interests in, a debtor. Confirmation of a chapter 11 plan by a bankruptcy court makes the plan binding upon the debtor, :iny person or entity acquiring propert under the plan and any holder of claims
20
21
22
23
against or interests in the debtor, whether or not such holder of claims or interests (I) is
impaired under or has accepted the plan or (2) receives or retains any property under the plan. Subject to certain limited exceptions and oiher than as provided in the plan itself or the confirmation order, a confirmation order discharges the debtor from any debt thal arose prior
24
25
to the date of confirmation of the plan and substitutes therewith the obligations specified
under the confnned plan.
26 27 28
10
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2. Why is the First Lien Steering Committee sending me this Disclosure

2
3
Statement?
The Disclosure Statement is being furnished by the First Lien Steering Committee in connection with: (a) the solicitation of votes for the acceptance or rejection of the Plan; and (b) the confirmation hearing (the "Confirmation Hearing"), which is scheduled for January 14, 20 I 0 at 9:00 a.m. Pacific Time (the "Confirmation Hearing Daie").
4
5
6
7
E
Before soliciting votes for the acceptance or rejection of the Plan, Bankruptcy Code secLion 1125 requires the First Lien Steering Committee 10 prepare a Disclosure Statement containing adequate information of a kind, and in suffcicnt detail, to enable a hypothetical
reasonable investor to make an informed judgment regarding acceptance of
the Plan.
0
~
.. ,. ,.
"' "'
9
10
" ,.
:; .
"
3. Am I entitled to vote on the Plan? What wilI receive from the Debtors if the Plan is consummated?
any, depend on what kind of Claim or Interest you hold. A summary of the Classes of Claims and Interests (each, a
Your ability to vote and your distribution under the Plan, if
~~ ~.. " ~~ ~ N ".. - i; ~ .... M

0'"c.i-_M -t Q
II
12
13
category of Holders of Claims or Interests as set forth in Article IV of ihis Disclosure

Statement and Article II of the Plan pursuant to section i 1
::..;:.. Vl ;; $ ~
22(a) of the Bankruptcy Code, which we refer to as a "Class") and their respective voting statuses is set forth below.
Vl ~o. E
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14 15 16
You should refer to this entire Disclosure Statement and the Plan for a complete
description of the classification and treatment of Allowed Claims and Interests in each of the Classes below.
Class
A-I A-2 A-3
B
: 0i:" '" ,0'"
w ~~g ~ c.
"'
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" f-
Claim
First Lien Lender Secured Claims Second Lien Lender Secured Claims
Slatus
Impaired Impaired Unimpaired Unimpaired Impaired
Voting Rights
17 18
19
OlherSecurcdClaims
Priority Non-Tax Claims General Unsecured Claims First Lien Lender Deficiency Claims Second Lien Lender Deficiency Claims Subordinated Claims Inlercsts Qld Equiiy lntercompanyCklims
20
21
C-I C-2 C-3 C-4

D E
Impaire
Impaired Impaired Impaired Impaired
Vote Vote Deemed to Accept Deemed 10 Aecept Eniitled 10 Vote Eniiiled to Vote EntillecltoVotc
Entiiled to Entllcd to
DccmedloRejecl OeemedtoRejecl
Deemed 10 Reject
22
23
For more infonnation about the treatment of Claims and Interests see "Classifcation and
Treatment of Claims," which begins on page 31 of
24
25
this Disclosure Statement.
4. What happens to my recovery if the Plan is not confirmed, or does not go

effective?
26
27 28
In the event that the Plan is not conlirmcd, there is no assurance that the Debtors wil he able to reorganize iheir business. If the Plan is not confirmed in a timely manner, it is
unclear whether the transactions contemplated by the Plan and the Mediation Settlement could
be implemented and what Holders of Claims would ultimately receive in respect of their
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Claims. It is possible that any alternative plan would result in substantially less favorable treatment for Holders of Claims than such Holders would receive under the Plan. Moreover,
non-Conlirmaiion of the Plan may result in an extended chapter I i proceeding. For a more
detailed description of the consequences of the Plan or of a liquidation scenario, see "Best Interests of Creditors Test," which begins on page 82 of this Disclosure Statement, and the
Going Concern Analysis and Liquidation Analysis attached as Exhibits D and Exhibit E to this
Disclosure Statement.
5.
Uthe Plan iirovides that i get a distribution, do i get it upon Confirmation
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7
8
or when the Plan goes effective, and what do you mean when you refer to "Confirmation," "Effective Date" and "Consummation?"
"Confirmation" or the Plan refers to approval of the Plan by the Bankruptcy Court. "Confirmation" or the Plan does not guarantee that you will receive the distribution indicated under the Plan. After Confirmation of the Plan by the Bankruptcy Court, there are conditions
that need to be satisfied or waived so ihat the Plan can be consummated and go effective.
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References to the "Effective Date" mean the date that all conditions to the Plan have been
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satisfied or waived (lnd the Plcm has been fully consummated. Distributions will only be made
on the Effective Date or as soon as practicable thereaHcr. See "Conditions Precedent (0
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Confirmation and Consummation of the Plan," which begins on page 75 of this Disclosure the conditions to Confirmation and the Effective Date. Statement, for a discussion of
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6. Where is the cash required to fund the Plan coming from?
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Although the Plan provides for the option of obtaining exit financing, the Plan
contemplates that the Reorganized Debtors wil fund distributions under the Plan with Cash on hand, existing assets, and the issuance of the New First Lien Notes and Newco Equity Interests. In addition, the Plan provides ihat the Rhodes Entities wil pay $3.5 millon in Cash to the Reorganized Debtors, which will be used to fund distributions under the Plan and provide working capital to the extent of any exce~s. Finally, the Reorganized Debtors wil provide funding for the Litigation Trust in the initial amoiint of $ 100,000 (the "Litigation
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Trust Funding Amount"). The Litigation Trust Funding Amount will be repaid to the
Reorganized Debtors from the first proceeds received by the Litigation Trust.
7.
Is there potential
20
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litigation related to the Plan?

Claims docs not accepl the Plan, the First
22
23
Yes. In the event that any Impaired Class of
24
25
Lien Steering Committee may seek Confirmation of the Plan notwithstanding the dissent of such Class of Claims. The Bankruptcy Court may confirm the Plan pursuant to the "cramdown" provisions of the Bankruptcy Code, which allow the Bankruptcy Court to conlIrm a plan that has been rejected by an Impaired Class of Claims if it determines that the
Plan satisfies the requirements of Bankruptcy Code section 1129(b). There can be no
assurance, however, that the Bankruptcy Court wil order that the Plan be confirmed over the objection of an Impaired Class of Claims. In addition, the First Lien Steering Committee is aware of the possibility that Stanley Consultants, Inc. may object to the Plan based upon
arguments previously raised in connection with Stanley Consultants, Inco's objection to the
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Disclosure Statement. See "Certain Bankruptcy Considerations," which begins on page 87 of this Disclosure Statement.
8. What are the Claims and Causes of Action that wil be transferred to the
Litigation Trust'?
4
5
6 7
E
Pursuant 10 the terms or the Litigation Trust Agreement, the Debtors will transfer to the Litigation Trust all Claims and Causes of Action on which the First Lien Lenders do not have a lien and that have not been released pursuant to the Plan or by order orthe Bankruptcy
Court. Such Claims and Causes of Action include those Claims and Causes of Action
belonging 10 the Debtors against the Rhodes Entities (other than any claims released against the Rhodes Entities pursuant to the Plan) and those Claims and Causes of Action listed on Exhibit G hereto. Although the First Lien Steering Committee is stil in the process of analyzing and reviewing potential Claims and Causes of Action against the Rhodes Entities, the First Lien Steering Commitlee believes that such Claims and Causes of Action may potentially include (i) Claims for breach of fiduciary duty, (ii) Claims for misappropriation of Debtors' assets for personal use, (iii) Claims for usurping corporate opportunities for the
benefit or competing interesis, (iv) Claims for mismanagement of
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the Debtors' operations, (v)
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Claims for fraudulent transfers (to the extcnt not expressly released by the Plan), and (vi) Claims for the diversion of corporatc rcsources for the benefit of competing interests. For additional inronnatian regarding the Claims and Causes of Action to be transferred to the
Litigation Trust, please sec Exhibit G 10 this Disclosure Stalement. For additional details
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regarding Claims and Causes of Action against the Rhodes Entities, see "Potential Claims
Against the Rhodes Entities," which begins on page 4 of
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9. What is the proces by which the First Lien Lenders wil purchase certain
general unsecured claims?
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17 18 19
Under the terms of ihe Plan, the First r ,ien Lenders will receive $1.5 millon in Cash from the procecds ofthc rirst Lien Lenders' collateraL. The Firsl Lien Lenders have agreed to
LIse the $1.5 milion Cash payment provided to them under the Plan to purchase the General
20
21
Unsecured Claims of Creditors who are listed on the Claims Purchase Schedule attached to this Disclosure Statement as Exhibit H to the extent such Claims are outstanding as of the
Effective Date and subject to certain other limittions and conditions. Pursuant to the Plan,
22
23
the First Lien Lenders will be paid the $1.5 milion in Cash through a series of payments made over the course of eighteen months. Payments on account of the purchased Claims wil be made 011 the same time frame as the First Lien Lenders reccive Cash payments from the Reorganized Debtors under the Plan. The First Lien Steering Committee inay add Claims to
the Claim Purchase Schedule at any time so long as the amount to be paid for all Claims listed
24 25
on the Claim Purchase Schedule does not exceed $1.5 millon. No Creditor listed on the Claim Purchase Schedule will receive an amount in excess of the full amount or its Claim. For additional details regarding the purchase of Claims by the First Lien Lenders, see
"General Unsecured Claims Purchase," whieh begins on page 63 ofihis Disclosure Statement.
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27 28
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10. Why does the Plan pro,,'idc forsuhstantive consolidation?

2
3
As discussed in more detail in this Disclosure Statement, the First Lien Steering
Committee believes that substantive consolidation of
tile Debtors' ESltltes is warranted based
4
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on several factors and will provide ihe greatest recovci)' for unsecured creditors. Among other things, these factors include that the Debtors (i) operate as a single business enterprise under a single name, (ii) operate on a centralized basis with a centralized cash management system, (iii) share common parent companies, (iv) rely on a single corporate offce for operational and other support services, (v) regularly conduct business with each other such that the flow offunds and transactions would be diffcult to entangle, and (vi) are all obligated on the First Lien Lender Claims and the Second Lien Lender Claims. Moreover, as the First Lien Lenders and Second Lien Lenders can assert the full amount of their claims at every Debtor and general unsecured creditors can only assert claims against the specific Debtor against which such creditor has a claim, substantive consolidation wil result in greater
polential recoveries to unsecured creditors. In addition, a large amount of intercompany claims were owed between the various Debtors as of the Petition Date, and numerous Proofs of Claim were Filed against the incorrect Debtor entity. For additional information regarding the substantive consolidation of the Debtors' Estates, see "Substantive Consolidation," which begins all page 35 or this Disclosure Statemeiit.
i I. What are the contents of the solicitation packages to be sent to creditors
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who arc eligible to vote on the Plan?

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All Creditors who are eligible to vote on the Plan will rcceive a solicitation package containing (a) a cover letter: (i) describing the contents of the Solicitation Package and
instructions on how paper copies of any materials that may be provided in CD-ROM fonnat can be obtained at no charge; and (ii) urging the Holders in each of the Voting Classes (as defined below) to vote to accept the Plan, (b) the Solicitation Procedures Order, (c) a copy of the solicitation procedures, (d) an appropriate form of Ballot, (e) a copy of a letter signed by
the Mediation Parties in support of the Plan, (l) a copy of a letter signed by the Creditors' CommiUee in support of the Plan, (g) this Disclosure Statement (together with the Plan, which
16 17
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is Exhibit A thereto) in either paper or CD-ROM formal; and (h) such other materials as the Bankruptcy Court may direct.
The notices sent to parties in interest will indicate that this Disclosure Statement, the
Plan and all of the exhibits thereto are available for viewing by any party at:
22 23 24
25
www.omnimgi.com/rhodcs.
12. Wil there bc releases granted to parties in interest under the plan?
Yes. The Plan provides for the Debtors' estates to grant releases to (a) the First Lien Lenders in their capacity as such, (b) the First Lien Steering Committee, (e) the Second Lien Lenders in their capacity as such, (d) with respect to each of the foregoing Entities in clauses
(a) through (c), such Entities' predecessors: successors and assigns, (e) the Creditors'
26
27
28
Committee and the members thereof in their capacity as such, (0 witli respect to each of the
foregoing Entities in clauses (a) through (e), such Entities' subsidiaries, alTliates, offcers,
memhers, directors, principals, employees, agents, financial advisors, attorneys, accountants,
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investment bankers, consultants, rcprCSCnlllvcs, and other Professionals, (g) the Debtors'
2
3
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5
offcers, employees (including Thomas Robinson and Joseph Schramm) and Professionals, as of the Petition Date, and (11) Paul Huygcns; provided, however, that clause (g) shall not include (i) the Rhodes Entities or their aflliatcs, (ii) insiders of any of the Rhodes Entities (except as to Thomas Robinson and Joseph Schramm), or (iii) rclaiivcs or Rhodes. 1n addition, the Plan provides that the Rhodes Entities shall be deemed released from
any and all Claims, obligations, rights, suits, damages, Causes of Action, remedies, and
the Bankruptcy Code with respect to transfers made by the Debtors to the Rhodes Entities during the 2 years prior to the Petition Date;
liabilities whatsoever arising under chapter 5 of
6 7
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provided, however, that such release shall only apply to transfers expressly set forth in the
Schedules as Filed with the Bankruptcy Court as of August I, 2009 or as disclosed in

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Attachment B to the Mediation Term Sheet.
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Finally, the Plan provides that, pursuant to Bankruptcy Rule 9019, and except as
otherwise specifically provided in the Plan, to the extent a First Lien Lender clects on its
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Ballot to release the First Lien Lenders in accordance with this Section VilLE or the Plan, the First Lien Lenders electing to grant such a release, shall be deemed to release each each of
of
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the other First Lien Lenders that has elected 10 grant such a release; provided, however, that Claims or liabilities arising out of or relating to any act or omisson of any First Lien Lender
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or any of its affliates that constitutes gross negligence or willful misconduct shall not be
released.
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13. What is the deadline to vote on the Plan'!

4:00 p.m. (prevailing Pacific Time) on January 4, 2010.
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14. How do I vote for or against the Plan? This Disclosure Statement, accompanied by a Ballot or Ballots to be used for voting
on the Plan, is being distributed to the Holders of Claims eniitled to vote on the Plan. If
f-
you
are a Holder of a Claim in the following Classes, you may vote for or against the Plan by
completing the Ballot and returning in the manner provided on the Ballot:
. Class A-I (First Lien Lender Secured Claims)
20
21
22
23
. Class A-2 (Second Lien Lender Secured Claims)
. Class C-I (General Unsecured Claims)

. Class C-2 (First Lien Lender Deficiency Claims)
24 25
. Class C-3 (Second Lien Lender Deficiency Claims)
26
The Debtors, with the approval of the Bankruptcy Court, have engaged Omni
27 28
Management Group, LLC, AUn: Brian Osborne, J6161 Ventura Blvd. Suite C, PMB 477,
Encino, CA 91436, to serve as the Claims and Solicitation Agent. The Claims and
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Solicitation Agent will process and tabulate Ballots for each Class entitled 10 vole to accept or reject the Plan.
The deadline to vole on the Plan is 4:00 p.m., (prevailing Pacific Time), on January
4,2010.
BALLOTS
Ballots must be actually received by the Claims and Solicitation Agent by 4:00 p.m. (prevailng Pacitic Time) on January 4, 2010. Ballots can be sent by hand delivery, maiL fax or ernai! to the following addresses:
Hand Delivery/Mail: The Rhodes Companies, LLC Omni Management Group AUo: Brian Osborne 16161 Ventura Blvd. Suite C, PMB 477 Encino, CA 91436
Fax: (818) 783-2737 Email:
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you have any questions on the procedure for voting on the Plan, please contact the Claims and Solicitation Agent by telephone at (866)
989-6 i 44 or contact Brian Osborne at
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20
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bosborne~omnimgmt.com.
More detailed instructions regarding how to vote on the Plan are contained on the Ballots distributed to Holders of Claims that are entitled to vote on the Plan. For your vote to be counted, your ballot must be completed, signed and receivcd by 4:00 p.m. (prevailing
22
23
Pacific Time), on January 4, 2010.

It is important to follow the specific instructions provided on cach Ballot. Each Ballot must be completed and returned in the manner indicated on the Ballot.
24 25
26 27
28
15. Why is the Bankruptcy Court holding a Confirmation Heal"ng?
Section i 128(a) of the Bankruptcy Code requires the Bankruptcy Court to hold a
hearing on Confirmation or ihe Plan. Seciion i 128(b) of ihe Bankruptcy Code provides that
any party in interest may object to Confimiation of
the Plan.
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16. When is the Confirmation Hearing set to occur'?

2
3
The Bankruptcy Court has scheduled the Confirmation Hearing for January 14,2010 to take place at 9:00 a.m. (prcvalng Pacific Time) before the Honorable Linda B. Riegle,
United States Bankruptcy Judge, in the United States ankruptcy Court for the District of
4
5
Nevada, located at 300 Las Vegas Boulevard South, Las Vegas, Nevada 89101. The
Confirmation Hearing may be continued from time to time by announcing such continuance in open court or otherwise, without further notice to parties in interest. The Bankruptcy Court, in its discretion and prior to the Confirmation Hearing, may put in place additional procedures
6 7
E E
governing the Confirmation Hearing. The Plan may be modified, if necessary, prior to,
during, or as a result of the Confirmation Hearing, without further notice to interested parties.
Objections to Confirmation of the rlan must be fied and served on the First Lien
Steering Committee, and certain other parties, by no latcr than January 4, 2010 at 4:00 p.m.
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(prevailing Pacific Time). Any objections to the Plan must be (i) in writing, (ii) conform to the Bankruptcy Rules and the Local Rules, (iii) state the name and address of the objecting party and ihe amount and nature of the Claim of such Entity, (iv) slate with particularity the
basis and nature of any objection to the Plan and, if practicable, a proposed modification to
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12
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the Plan that would resolve such objection, (v) and be actually received by no later than
January 4, 2010 at 4:00 P.M.
17. What is the purpose of
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the Confirmation Hearing?
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The consummation of a chapter 1 i plan is the principal objective of a chapter 11 case. A chapter 11 plan sets forth the means for satisfying claims against, and interests in, a debtor.
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16 17
18
Confinnation of a chapter i I plan by a bankruptcy court makes the plan binding upon the
debtor, any person or entity acquiring property under the plan and any holder of claims against or interests in the debtor, whether or not such holder of claims or interests (1) is impaired under or has accepted the plan or (2) receives or retain~ any property under the plan. Subject to certain limited exceptions and other than as provided in the plan itself or the confinnation order, a confirmation order discharges the debtor from any debt that arose prior to the date of
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confinnation of the plan and substitutes therewith the obligations specified under the
confirmed plan.
20
21
18. What role does the Bankruptcy Court play after the Confirmation
Hearing?
22
23
Aller the Confirmation of the Plan and the occurrence of the Effective Date, the
Bankruptcy Court wil retain exclusive jurisdiction over all matters arising out of, or related to, the Chapter 11 Cases and the Plan pursuant to sections 105(a) and 1142 of the Bankruptcy Code and as otherwise set forth in the Plan.
19. What is the effect of
24
25
26 27 28
the Plan on the Debtors' ongoing business?
The Debtors are reorganizing pursuant to chapter i I of the Bankruptcy Code. As a result, the Confinnation of the Plan means that the Debtors will not be liquidated or forced to go out of business. As a result of the Mediation Settlement, the Plan contemplates that, upon
the Debtors' emergence from chapter II, the Debtors wil continue to operate as a going
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concern homebuilder primarily in ihe Las Vegas market. For additional details on the Plan,
2
3
see "Plan Overview" beginning on page i of this Disclosure Statement. Additional details
regarding ihe Mediation ScUlemenl can be found in the section entitled "Seulcment
Overview" beginning on page 2 olihis Disclosure Statement.
4
5
20. Wil an)' party have significant influence over the corporate governance
and operations of the Reorganized Debtors?
6
7
E
The Plan contemplates ihat the First Lien Lenders will be the owners of the
Reorganized Debtors. Pursuant to the Plan, a new parent company for the Debtors wil be
formed ("Newco") and each of
the First Lien Lenders wil receive their pro rata share of 100%
of the equity interests in Newco on account of its First Lien Lender Secured Claim. As a
8
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result of certain transactions to be undertaken in connection with the Plan, Ncwco will control ihe Reorganized Debtors upon their emergence from bankruptcy. The boards of directors of
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the Reorganized Debtors wil consist of one or more members appointed by ihe First Lien Steering Commiltee. The Firsl Lien Sleering Committee will also appoint a chief executive ollcer or other similar oncer to manage the Reorganized Debtors. The First Lien Steering Committee is in the process of selecting such ollcers and directors. The identity of such ollcers and directors will be publicly disclosed prior 10 the Confinnation Hearing, which is
scheduled to lake plaet: on January 14,2010 ai9:00 a.m.
21. Does the First Lien Steering Committee recommend voting in favor of the
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Plan?
Yes. In ihe opinion of ihe First Lien Steering Committee, the Plan is prefcrablc to the alternatives described in this Disclosure Statement because it provides for a larger distribution to the Holders of Claims than would otherwise result in a liquidation under chapter 7 of the Bankruptcy Code. In addition, any alternative oiher than Confirmation could result in
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extensive delays and increased Administrative Claims, whieh would result in smaller distributions to the Holders of Claims. Accordingly, the First Lien Steering Committee
recommends that Holders of Claims entitled to vote on the Plan support Confinnation and
vole to accept the Plan.
H. Voting and Confirmation
19
20
21
22
23 24 25
The Classes entitled to vote will have accepted the Plan if (I) ihe Holders of at least two thirds in dollar amount of the Allowed Claims actually voiing in each such Class, as
applicable, have voted to accept the Plan and (2) the Holders of more than one half in number of ihc Allowed Claims aclually vOling in each such Class, as applicable, have voted to accept the Plan. Assuming the requisite acceptances arc obtained, the First Lien Steering Committee intends to seck Confirmation ofihe Plan at the Confinnation Hearing scheduled to commence on January 14, 2010 at 9:00 a.l1. prevailing Pacific Time, before the Bankruptcy Court.
Section 1)29(a)(10) of acceptance of the Bankruptcy Code will be satisfied for purposes of
26
27
Confirmation by
the Plan by at least one Class of Claims that is Impaired under the Plan.
28
Subject to entry of the Confirmation Order, to the extent a Holder of one or more First Lien Lender Claims also holds one or more Second Lien Lender Claims, if such Holder votes
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in favor of the Plan on account of its First Lien Lender Claim(s), the Holder shall be deemed
2
3
to vote in favor of the Plan on account or its Second Lien Lender Claim(s) regardless of
whether the Holder actually voles its Second Lien Lender Claim(s) in favor ofihc Plan.
TI IE FIRST LIEN STEERING COMMlnEE WILL SEEK CONFIRMAflON OF

THE PLAN UNDER SECTION I I 29(B) OF THE BANKRUPTCY CODE WITH RESPECT TO ANY IMPAIRED CLASSES PRESUMED TO REJECT TilE PLAN, AND THE FIRST TO TO DO SO WITH RESPECT LIEN STEERING COMMinEE RESERVES THE RIGHT ANY OTHER REJECTING CLASS OR TO MODIFY THE PLAN.
4 5 6 7
The Bankruptcy Court has established November 24, 2009 (the "Record Date"), as the
date for determining which Holders of Claims are eligible to vote on the Plan. Ballots, along
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8 9 10
with this Disclosure Slaltment. ihe Plan and the Solicitation Procedures Order, will be mailed to all registered Holders of Claims as of the Record Date that are entitled to vote. A return envelope wil be included with Ballots, as appropriate. The Claims and Solicitation Agent wrl answer questions regarding the procedures and
requirements tor voting to accept or reject the Plan and for objecting to the Plan, provide
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additional copies or all malerials and oversee the voting tabulation. The Claims and
Solicitation Agent will also process and tabulate Ballots for each Class entitled to vote to
accept tir n:jcct the Plan. The address for the Claims and Solicitation Agent is:
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Omni Management Group AUn: Rhodes Homes Claims Agent 16501 Ventura Boulevard, Suite 440 Encino, CA 91436
Or if by email to scott(omnimgt.com or by fax to 818-783-2737. If you have any

questions on voting procedures, please call the Claims and Solicitation Agent at the following toll free number: (818) 906-8300.
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20
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TO BE COUNTED, BALLOTS (OR MASTER BALLOTS OF THE RESPECTIVE NOMINEE HOLDER, IF APPLICABLE) INDICATING ACCEPTANCE OR REJECTION OF TIlE PLAN MUST BE RECEIVED BY TilE CLAIMS AND SOLICrIi':rION AGENT NO LMER THAN 4,00 P.M. PREVAILING PACIFIC TIME ON JANUARY 4, 2010 (THE "VOTING DEADLINE"). ANY BALLOT RECEIVED AFTER THE VOTING DEADLINE
SHALL. NOT BE COUNTED.
22
23
THE FIRST LIEN STEERING COMMlnEE BELIEVES THAT THE PLAN IS IN
24
25
THE BEST INTEREST OF ALL CREDITORS. THE FIRST LIEN STEERING COMMinEE RECOMMENDS THAT ALL HOLDERS OF CLAIMS AGAINST THE DEBTORS WHOSE VOTES ARE BEING SOLICITED SUBMIT BALLOTS TO ACCEPT
THE PLAN.
i. Consummation of ihe Plan
It will be a condition to Confirmation of the Plan that all provisions, terms, and
26 27 28
condiiions of the Plan are approved in the Confirmation Order unless otherwise satisfied or
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waived pursuant to the provisions of Article X of
the Plan. Following Confirmation, the Plan
2
3
will be consummated on the Effective Date, which will be no earlier than the eleventh day following entry of an order, in form and substance acceptable to the First Lien Steering Committee, by the Bankruptcy Court confirming the Plan and satisfaction of all conditions to Confirmation and the Etfective Date having been satisfied or waived in accordance with the
terms ofihe Plan.
Article II. BACKGROUND'
4
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A. DescriPtion ofihc Debtors' Business Operations
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i. Organizational Structure
The Debtors' organizational charL is attached hereto as Exhibit B. In addition to the
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Debtor entities below, the Debtors are affliated with several other companies that are not
Debtors in these Chapter II Cases_
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Rhodes Ranch GP is the primary holder of land associated with the Rhodes Ranch master-planned community and also owns some commercial properties outside of the Rhodes Ranch master-planned community. The Rhodes Ranch master~planned community consists of
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several developments, including developments built by non-Debtor affliated developers.

Rhodes Design and Development Corp. holds the Debtors' contractor's license in Nevada
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along with holding some land. Previously, Rhodes Ranch Golf and Country Club was the Owner and operator of the golf course and club house in the Rhodes Ranch development, but on December 22, 2008, as required by the first Lien Credit Agreement, its assets were sold to
non~Debtor Rhodes Ranch Golf, Inc.
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The Rhodes Companies, LLC is a real estale development holding company.
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The following Debtors hold parcels of land associated with the Tuscany development: Rhodes Design and Development; Tuscany Acquisitions, LLC; Tuscany Acquisitions II, LLC;
20
21
Tuscany Acquisitions II, LLC; and Tuscany Acquisitions iv, LLC. Tuscany Golf Country
Club, LLC owns and operates the golf club located at the Tuscany development.
22 23 24
25
The following Debtors own land in Arizona: Rhodes Homes Arizona, LLC; Rhodes Arizona Properties, LLC; and Elkhorn Investments, lnc.. Rhodes Homes Arizona, LLC also holds the Debtors' Arizona conlractor's license. Heritage Land Company, LLC is the land management company for its subsidiaries and does not hold any real estate directly. The following Debtors are subsidiaries of Heritage Land Company, LLC and hold various parcels of land primarily located in Nevada: Tick, LP; Glynda, LP; Chalkline, LP; Batcave, LP; Jacknife, LP; Wallboard, LP; and Overnow LP.
26 27 28
i Anidc II is biiscd priniiirily on represeniations made by the Debtors.
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3
The Debtors are also involved in land acquisition, development, and some utility and design work. Exterior and interior design is provided by Rhodes Design & Development
Corporation. Rhodes Realty, loco is the Debtor that provides sales and marketing services for the Debtors. C & J Holdings, Inc. is the homeowners association management company for Rhodes Ranch, Tuscany, ,md three other smaller communities.
4
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Pinnacle Grading, LLC provides grading and excavation services to the Debtors. Previously, the following Debtors also provided specific services to the Debtors, but have ceased operations: Bravo Inc.; Gung-I-o Concrete, LLC; Geronimo Plumbing, LLC; Arapahoe Cleaning, LLC; Apache Framing, LLC; Six Feathers Holding, LLC; and Tribes
Holding LLC.
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Elkhorn Invefitments, Inc. is a holding company for Elkhorn Partners, LP. Elkhorn
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Partners, LP is a limitcd partnership that was formed for the construction and sale of several communities in Northwest Las Vegas. As of the Petition Date, only one home remained
unsold.
2. i istory and Proiects
io
II
12 13
The Debtors are engaged primarily in the business of detached home building and
fiales in Nevada and Arizona. Collectively, the Debtors developed 40 communities since their founding in i 988, generating over $2.4 bilion in total revenues. 'fhe Debtors have buili more
than 6,000 homes in the Las Vegas Valley during the past two decades. In 2008, the Debtors
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sold 390 homes, generating revenue of$118.3 millon, or $54.6 millon in gross profit.
Currently, the Debtors have two signature master planned communities under
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development, Rhodes Ranch and Tuscany Residential Village. Both communities are
recognized for their accessible location to employment centers and the Las Vegas Strip, for their community amenities, country club nrestyle, and for the quality and value of home design and construction.
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Rhodes Raneh is located in southwestern Las Vegas and opened in 1997. It has a gatcd entry and 24-hour security detail with patrols. The development is built around a Ted Robinson-designed I8-hole championship golf course. The development features a multimillion dollar community center with swimming pool, gymnasium, multiple basketball courts, fitness center, and card/club rooms. The community also has a community park and sports
complex. There are 314 available finished lots remaining to be sold as of March 31, 2009,
22
23
and approximately 1,993 lots to be developed. The First Lien Steering Committee estimates
the value of the Rhodes Ranch development on a going concern basis to be approximately
$65.4 milion.
24 25
Tuscany Residential Village is located in southeast Las Vegas and opened in 2005.
The development is also built around a Ted-Robinson designed I8-hole championship golf
26 27
28
course. It has gated entry and 24-hour security detail (with patrols), an existing 35,000 square foot community center similar to Rhodes Ranch, and a planned Tuscan-themed retail center. As ur March 31, 2009, Tuscany had 350 finished lots remaining to be sold and 559 partially
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developed lots. The First Lien Steering CommiUee estimates the value of
Tuscany Residential
2 3
Village on a going concern basis to be approximately $48.1 million.
Spanish Hills is a high-end development located in southwest Las Vegas. The

community is built on over i 00 acres and features many clIstom homes in excess of 5,400
square feet of living space. As of March 31, 2009, it had 2 partially developed single family
4
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estate lots and 2 finished lots remaining to be sold. It also had io acres of undeveloped land. The First Lien Steering Committee estimates value of the Spanish Hils development on a going concern basis to be approximately $1 million.
The Debtors did not operate their developments by legal entity, so for purposes of
,
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estimating Claims against each of these developments, the Debtors would need to conduct a
8 9
Claim-by-Claim analysis. In several cases, the Claims filed by Creditors wcre asserted
against The Rhodes Companies, LLC, which is the lead Debtor for purposes of
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the Chapter i i
Cases, but not necessarily the contracting party with whom the such Creditors may have
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conducted business. There is, however, approximately $390 millon of Secured First Lien
Lender debt and Second Lien Lender debt lcd against each Debtor. For a more complete
discussion of the total Claims asserted against all the Debtors, see
II
12 13 14 15
Article I.F hereof
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The Debtors' homebuilding operations in Arizona ("Arizona") will be transferred to the Rhodes Entities on the Effective Date pursuant to the Plan. Arizona consists of all of the
real and personal property of three of
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the Debtors: Rhodes Homes Arizona Properties, LLC,
Rhodes Homes Arizona, LLC, and Elkhorn Investments, Inc. Included within the Arizona
located in Mohave County (vicinity Kingman, Arizona) on approximately i ,312 acres, which has 3,591 partially developed lots. Also included in Arizona, which is located within and around Pravada, are 4 model homes, 4 standing inventory homes, and 327 acres of land. A list of Arizona Assets being transferred to the Rhodes Entities is set forth on Attachment D to the Mediation Term Sheet. The Arizona
Assets is Pravada, which is a Rhodes Homes development of
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Assets do not include any assets owned by Pinnacle Grading located in Arizona, except for Pinnacle Grading oflce equipment, furniture, computers located in Arizona, which is set forth
20
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on Attachment D to the Mediation Term Sheet. The Arizona Assets being transferred also do not include intercompany claims, the Stanley Engineering Litigation or any cash owned by any Ofihc foregoing legal entities.
The Debtors own a number of additional lots and commercial-zoned properties in
22 23
various stages of development in Nevada and Arizona. As of the first quarter of 2009, development on all projects except Rhodes Ranch and Tuscany has ceased pending
improvement in the real estate market.
3. Principal Debt and Capital Structure
24
25
The Debtors are party to a Credit Agreement dated as of Novemher 2 i, 2005 among
26
27 28
Heritage Land Company, LLC, The Rhodes Companies, LLC, and Rhodes Ranch General Pai1nership, as the Borrowers, the Lenders Listed Therein as the Lenders, and Credit Suisse, Cayman Islands Branch, as Administrative Agent, Collateral Agent, Syndication Agent, Sole Bookrunner and Sole Lead Arranger (the "First Lien Credit Agreement"). As of the Petition Date, therc was approximately $302 million in principal amount outstanding under the Firsl
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Lien Credit Agreement. The First Lien Steering Committee is comprised of certain lenders under the First Lien Credit Agreement that hold, in the aggregate, approximately 70% of the
outstanding tirst lien debi.3 Three of the Debtors are primary obligors under the First Lien
Credit Agreement. The remaining Debtors executed guarantees under the same facilty_ The
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First Lien Credit Agreement is secured by a blanket first lien on substantially all of the Debtors' property. The First Lien Lenders assert that the Stanley Engineering Litigation is
among the assets included in their collateral package.
In addition, the Debtors are party to a Credit Agreement dated as of November 21, 2005 among Heritage Land Company, LLC, The Rhodes Companies, LLC, and Rhodes Ranch General Partnership, as the Borrowers, the Lenders Listed Therein, as the Lenders, and Credit Suisse, Cayman Islands Branch, as Administrative Agent, Collateral Agent, Syndication Agent, Sole Bookrunner and Sole Lead Arranger (the "Second Lien Credit Agreement"). As of the Petition Dale, there was approximately $70.7 million in principal amount outstanding under the Second Lien Credit Agreement. Thc Second Lien Credit Agreement is secured by a blanket second lien on substantially all or ihe Deblors' property. The Second Lien Lenders also assert that the Stanley Engineering Litigation is among the assets included in their collateral package.
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The First Lien Lenders and the Second Lien Lenders are party to an inlercredilor
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agreement that, among oiher things, prohibits the Second Lien Lenders from receiving a recovery from the collateral securing the first lien and second lien debt unless the First Lien
Lenders are repaid in fulL. Moreover, to the extent the Second Lien Agent receives Collateral or the proceeds thereof prior to the discharge of the first lien indebtedness, the Second Lien
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Agent must pay over such Collateral or proceeds to the First Lien Agent for the benefit of First Lien Lenders. Abseniihe consenl of the First Lien Lenders, the Second Lien Lenders
would not be entitled to a recovery in these cases. The intcrcreditor agreement does not,
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however, prevent the Second Lien Lenders from voting against the rlan. Notwithstanding the foregoing provisions, the First Lien Lenders have agreed to gift a 50% interest in the Stanley Engineering Litigation to the Second Lien Lenders on account of the Second Lien Lenders'
Secured Claims if the Class ofSceond Lien Lcnder Secured Claims votes in favor of
the Plan_
20
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as follows: (i) approximately $240 millon was used to pay off
22 23
Proceeds from the IIrst lien indebtedness and the second lien indebtedness were used other secured loan debt of the Debtors; Oi) approximately $50 million was placed in an interest reserve for both the first lien credit facility and the second lien credit facility; (iii) approximately $70 million was paid to
equity, and (iv) the remainder was used by the Debtors to fund operating expenses. The
interest reserve was applied during the first 18 months of the credit agreement, or by the end
of 2006, pursuant to the terms of the credit agreement. Accordingly, there arc no funds
24 25 26 27 28
remaining in the aforementioned interest reserve.
1 The members of the First Lien Steering Commillee are Credit Suisse Asset Management, Candlewoo
Special Situations Master Fund, Credit Suisse Loan Funding LLC, CypressTrec Investment Management LLP
General Electrie Capital Carporatiiin, Highland Capital Management, L.P., and Sarin Capital Management.
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3
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The Debtors are also party to a swap transaction, pursuant to which there was approximately $20.2 inilion outstanding on the Petition Date. The swap is an interest rate hedging arrangement with an affliate of the First Lien Agent to hedge against the floating interest rate applicable to amounts outstanding under the First Lien Credit Agreement. The swap involves the payment by the Debtors of fixed amounts to the affliate of the First Lien Agent, and the payment of variable amounts (based on agreed upon floating interest rates) by the affliate to the Debtors. Obligations outstanding under the swap transaction are equal in
priority with obligations outstanding under the First Lien Credit Agreement.
The Debtors are also obligated to approximately nine equipment lenders who hold
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purchase money security interests in various offce equipment and equipment used in the Debtors' operations. As of the Petition Date, the Debtors estimate that they are obligated to
these equipment lenders in the approximate amount of $2.5 milion.
In the-ordinary course of business, the Debtors are required to post bonds, either on an unsecured or partially secured basis backed by collateral, as support for the Debtors' completion of certain performance and/or payment obligations for the benefit of
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party beneficiaries, generally governmental entities, agencies, jurisdictions or homeowners associations with which they conduct business. The Debtors rely on bonding companies to post the bonds and have issued indemnities in favor of the bonding companies in the event
that the bonds come due. The Debtors estimate that they currently have approximately $31
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million in outstanding bonds, none of which amounts have been called. The First Lien
Steering Committee anticipates the existing performance bonds wil continue in effect upon
the Debtors' emergence from ch:ipter 11.
4. The Rhodes Entities Claims
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The Debtors are affliated with several non~Debtor entities that arc not obligors or guamntors under the First Lien Credit Agreement or the Second Lien Credit Agreement. The non-Debtor entity affliates, (the Rhodes Entities) are directly or indirectly owned by James M. Rhodes, the founder and President of the Debtors. The Rhodes Entities have alleged prepetition Claims on an aggregate basis against the Debtors for approximately $10.598 million consisting primarily of tax payments allegedly made by the Rhodes Entities on behalf of the Debtors. The First Lien Steering Committee is in the process of analyzing the Rhodes Entities Claims and any and all claims that the Debtors' estates may hold against the Rhodes Entities.
5. Management of
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23
the Debtors
James Rhodes leads the management team of
the Debtors. Upon the Effective Date, it
24 25
is contemplated that James Rhodes wil not have a management role with the Reorganized
Debtors.
B. Pending Siimifeant Litigation
26
27 28
Rhodes Homes Arizona, LLC fied suit against Stanley Consultants, Inc. ("Slanlev"), an Iowa corporation, in August, 2006 in the Superior Court of Arizona, Maricopa County. An amended complaint was fied on October, 23 2007. The amended complaint seeks recovery against Stanley for breach of contract, bad faith, declaratory rclicf, fraud, punitive damages,
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and professional negligence arising out of approximately $7 million worth of charges for work that was substantially unusable. Damages have been itemized 10 counsel for Stanley in the
amount of $25, HO,595.96, which amount does not include exemplary damages. Stanley has
fied a counterclaim to recover approximately $2 million in unpaid charges. A significant
4
5
portion of discovery has been completed in connection with the lawsuit. Upon information and belief~ no trial dale has been set and the First Lien Steering Committee and Debtors do not know when a trial will be held or a judgment may entered in connection therewith. As a result, it is uncertain if there will be any proceeds from the Stanley Engineering Litigation
and, if there are, when the net proceeds may be distributed in accordance with the terms of
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the
Plan.
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Stanley Filed Proofs of Claim against Rhodes Homes Arizona, LLC, Rhodes Design and Development Corporation and Rhodes Ranch General Partnership asserting Claims in the total aggregate amount of $4,609,249.00 on account of prepetition services allegedly rendered pursuant to agreements entered into with (i) Rhodes Homes Arizona, LLC and Oi) Rhodes Design and Development Corporation and Rhodes Ranch General Partnership. The Reorganized Debtors will evaluate and: if appropriate, lile objections to such Claims prior to the Claims Objection Deadline. The Reorganized Debtors also intend to pursue the Stanley Engineering Litigation post-emergence.
Stanley disputes the Debtors' ability to transfer any intellectual property created b
Stanley to the Rhodes Entities.
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Arlicleiii.4 THE CHAPTER i I CASES

The following is a general summary of the Chapter Ii Cases, including the events
leading up to ihe chapter 1 i filings, the stabilization of the Debtors' operations following the chapter i I lilings, certain administrative matters addressed during the Chapter I i Cases and the Debtors' restructuring initiatives since the chapter i i filings.
16
17
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18
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A. Events Leading to the Chapter i i Cases

At the end of the fourth quarter of 2008, sales in the Las Vegas market of new,
detached homes were down 93% (to 522 net sales) from the peak (7,731 quarterly net sales) that occurred in the second quarter of 2005. The median base price for a detached single family home dropped 39% from the peak achieved in the fourth quarter of2005.
20
21
22 23
24
25
Although the Debtors had made cost reductions in genenil overhead and other areas, including employee layoffs, many factors, including the severe downturn of the Las Vegas market, significant supply overhang, and general economic malaise combined to create an
environment where the Debtors were unable to meet their March 2009 debt and amortization
26 27 28
payments. The First Lien Steering CommiUee was formed in early March 2009 to negotiate the terms of a forbearance agreement and consen~;ual restructuring with the Debtors after it
4 Article II includes infonnaiion thai is based on representations made by the Debtors.
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3 4
5
became apparent that the Debtors would not be able (0 make their regularly scheduled interest and amortization payments on the firsilicn debt.
On March 31, 2009, an interest payment in the amount of approximately $9 millon and a principal payment in the amount of$10.75 million was due and owing on the First Lien Credit Agreement and an interest payment in the amount or approximately $2.4 million was
due and owing on the Second Lien Credit Agreement Despite extended and intensive
6 7
negotiations between the First Lien Lenders and the Debtors, when no agreement was reached by March 31, 2009. the Debtors commenced these Chapter i i Cases on March 31, 2009 and the Bankruptcy Code. April I, 2009 to avail themselves of the protections of
B. Initiation orthc Chapter 1 I Cases
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On either March 31, 2009 or April I, 2009, each of the Debtors Filed a voluntary
petition for relicf under chapter I I of the Bankruptcy Code. The Debtors continue to operate
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their busim:ss and manage their properties as debtors in possession pursuant to sections
i 107(a) and 1108 of the Bankruptcy Code. On April 13, 2009, the Bankruptcy Court entered an order jointly administering the Chapter ii Cases pursuant to Bankruptcy Rule 101 5(b). No trustee or examiner has been appointed in the Chapter 11 Cases.
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C. Stabilization of Operations
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After commencing the Chapter i 1 Cases, the Debtors sought and obtained a number of orders from the Bankruptcy Court to minimize disruption to their operations and facilitate the administration of these orders are briefly summarized below. the Chapter i I Cases. Several of
i. Cash Collateral Motion
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The Debtors Filed a motion (the "Cash Collateral Motion") seeking entry of interim
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and final orders (i) authorizing the Debtors to use cash collateral, (ii) granting adequate
protection to the Debtors' prepetiiion secured creditors, and (iii) scheduling a final hearing on the Cash Collateral Motion (Heritage Docket No. 15). Subsequent to the filing of the Cash Collateral Motion, the Court entered a series of stipulated orders authorizing the Debtors to use cash collateral with the consent of the First Lien Steering Committee. On April 10,2009, the Court entered a stipulated interim order (the "First Stipulated Cash Collateral Ordet') authorizing the Debtors to use cash collateral through April 17,2009 (Heritage Docket No. 125). On April 17,2009, the Court entered a second stipulated interim order (the "Second Stipulated Cash Collateral Order"), which extended the Debtors' authorization to use cash collateral through April 28, 2009 rRhodes Docket No. 73) on similar terms to the First Stipulated Cash Collateral Order. On April 30, 2009, the Court entered a final stipulated order
authorizing the Debtors to use cash collateral through June 28, 2009 (Rhodes Docket No.
20
21
22
23
24 25 26 27
2R
126). In response (0 further requests for extension of the Debtors' authority to use cash collateral, the First Lien Steering Committee has consented to periodic continuances of the Debtors' use of cash collateral. A copy of the current cash collateral budget is attached hereto
as Exhibit C.
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2. Cash Management Moiion

2
3
and linn The Debtors Filed a motion (the "Cash Management Motion") seeking entry of
interim
4
5
6
7
I orders (i) authorizing the Debtors to continue to use their existing, centralized cash management syslcm, bank accounts and business forms; (ii) granting administrative expense priority status to intercompany claims arising on and after the Petition Date; (iii) waiving the investment and deposit requirements under seciion 345 of the Bankruptcy Code; and (iv) granting related relief (Rhodes Docket No. 13). On April 17,2009, the Bankruptcy Court granted the Cash Management Motion on an interim bi-sis with certain modifications (Rhodes Docket No. 781. On April 30, 2009, the Bankruptcy Court entered a final order granting ihe
Cash Management Motion on a final basis (Rhodes Docket No. 123).
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3. Home Sale Moiion
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The Debtors Filed a motion (the "Home Sale Motion") for authority to, among other things, (i) continuc the construction, sale and closing of homes to customers in the ordinary
course of business, (ii) honor certain prepetition contract obligations to homebuyers,
II
12 13 14
15
including, where appropriate in the Debtors' business judgment and not inconsistent with past business practices, to refund deposits or provide other customer incentives, (iii) provide that the sale of homes to the Debtors' customers shall be free and clear of all liens, claims,
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encumbrances and other interests, (iv) pay claims secured by liens out of the proceeds of
home sales, (v) establish procedures for resolving disputed lien claims, (vi) proceed
immediately with the sale of homes and establishment of the lien procedures, and (vii) permit financial institutions to receive, process, honor and pay all checks presented for payment and electronic payment requests relating to the foregoing (Rhodes Docket No. 14). As set forth in
the Home: Sale: Motion, the Debtors' ability to, among other things, satisfy their contrctual
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obligations to thcir customers and continue to contract for and complete the construction and sale of homes, free and clear of liens, is critical to the Debtors' operations. On April 10,2009
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the Bankruptcy Court entered an interim order granting the Home Sale Motion (Rhodes Docket No. 20), and subsequently entered a final order, with certain modifications, on April 17,2009 (the "Final Home Sale Order") (Rhodes Docket No. 77). Among other things, the
Final Home Sale Order established that the construction and sale of
homes was required to be
20
21
consistent with any cash collateral orders and provided the Debtors' prepetition lenders with
rights to receive certain information and object to certain lien payments.

22 23 24 25 26 27 28
4. Insider Comoensation Motion
As required by the Wages Orders, the Debtors Filed a motion for an order authorizing the Debtors to pay the salary of the Debtors' president, James M. Rhodes, through June 26, 2009, the time period of the Debtors' i 3 week budget, or any such further iime period as
authorized by the Court or agreed upon by the First Licn Lenders pursuant to any cash
collateral order entered in ihese cases (Rhodes Docket Number 94). The United States Trustee tiled an objection, which was resolved in the order approving the motion on July 21, 2009.
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5. Retention of Debtors' Professionals
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3
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Throughout Lhe Chapter i i Cases, the Debtors retained certain Professionals to assist them in carrying out their duties as debtors in possession and to otherwise represent their interests in the Chapter I i Cases. These Professionals included: (a) Pachulski Stang Ziehl & Jones LLP, as general bankruptcy counsel; (b) Larson & Stephens, LLC, as local counsel; (e)
Acceleron Group, LLC, as valuation advisor; and (d) Sullivan Group Real Estate Advisors, as morket research consultant. The Bankruptcy Court entered an order approving certain procedures for the interim compensation and reimbursement of retained Professionals in the Chapter II Cases.
6. Ordinary Course Professionals
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The Debtors desired to continue to employ certain professionals such as attorneys and accountants not involved in the administration of the Debtors' cases (the "Ordinary Course Professionals") for the same purposes as such services were provided prior to the Petition the Bankniptey Code and Date. Accordingly, pursuant to sections i 05(a), 327, 328 and 330 of Bankruptcy Rule 201 4(a), the Debtors Filed a motion (the "OCP Motion") seeking entry of an order authorizing them to retain, employ, and pay Ordinary Course Professionals in the ordinary course of the Debtors' businesses, on the terms and conditions set forth in the OCP
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Moiion, and subject 10 certain monthly payment caps (Rhodes Docket No. 141) The Bankruptcy Court entered an order approving the ocr Motion on May i 9, 2009 (Rhodes
Docket No. 187)
D. Appointment of
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the Creditors' Committee
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On May 26, 2009, the United States Trustee appointed the Creditors' Committee. The
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members of the Creditors' CommiUee arc: GC. Wallace, Inc., lnterslate Plumbing & Air Condiiioning, M&M Electric, lnc. and Southwest Iron Works, LLC. The Creditors'
Committee retained the law fimi of Parsons Behle & Latimer as counseL.
E. Claims Bar Dates
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On April 30, 2009, each of the Debtors Filed their schedules of assets and liabilities and stalment uf financial affairs as amended from time to time (collectively, the "Schedules")
22
23
with the Bankruptcy Court. Interested parties may review the Schedules at the offce of the Clerk of the United Stales Bankruptcy Court for the District of Nevada, Southern Division,
300 Las Vegas Boulevard Souih, Las Vegas, NV 89101 or by visiting

www.omnimgt.com/rhodes.
24 25
26 27
28
By notice dated March 31, 2009, the Court sel the claims bar date for 90 days after the date first set for the meeting of creditors, or August 5, 2009 (the "Bar Date Notice") (Heritage Docket No.3). The Bar Date Notice was served on the Debtors' master mailing lists on April 17,2009. Accordingly, the following Bar Dates have been established:
(i) Debtors;
August 5, 2009 for all Holders of General Unsecured Claims against all
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(ii) September 28, 2009 for all Holders of Claims of Governmental Units
2
3
for all Debtors except the following three Oebtors: Rhodes Homes Arizona, L.L.c.
(Case No. 09-14882); Tuscany Golf Country Club, LLC (Case No. 09-14884); and
Pinnacle Grading, LLC (Case No. 09-14887);

(iii) September 29, 2009 for all Holders of Claims of Governmental Units
4
5
6 7
for the following three Debtors: Rhodes Homes Arizona, L.L.C. (Case No. 09-14882); Tuscany Golf Country Club, LLC (Case No_ 09-14884); and Pinnacle Grading, LLC (Case No. 09-14887).
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On May 27, 2009, the Debtors Filed the Motion of Debtors for Entry of an Order Authorizing the Debtors to Publish Notice of the Bar Dates and Approving the Form of the Publication Notice Pursuant to FRBP 2002(1). The Bankruptcy Court entered an order (the "Bar Date Publication Order") granting the motion on July 9, 2009 (Rhodes Docket Number
305). The Bar Date Publication Order authorized the Debtors to publish notice of the Bar
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Dates n the Las Vegas Review-Journal, the Kingman Daily Miner and such other local publications as the Debtors deemed appropriate within ten days of the entry of the Bar Date
Publication Order.
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The First Lien Steering Committee and the Debtors have been reviewing various
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Pi'OrS of Claim nnd wil continue to review and evaluate each Proof of Claim Filed prior to the applicable Bar Date to determine whether grounds exist to object to the allowance of such Claims. The First Lien Steering Committee believes that the Claims asserted against the
Debtors wil Ikely be resolved and/or reduced to aggregate amounts that approximate the
estimates for Allowed Claims set forth herein. However, the actual aggregate amounts of
the
Allowed Claims in any Class may diner significantly from the Firs! Lien Steering
Committee's estimates thereof and any variance from such estimates may affect distributions
in certain Classes.
Article
i-
iv.
SUMMARY OF THE PLAN

THIS SECTION PROVIDES A SUMMARY Of THE STRUCTURE AND MEANS
20
21
fOR IMPLEMENTATION Of THE PLAN AND THE CLASSifiCATION AND

TREATMENT OF CLAIMS AND INTERESTS UNDER THE PLAN, AND IS QUALIFIED
22
23
IN ITS ENTIRETY BY REFERENCE TO THE PLAN (AS WELL AS THE EXHIBITS

THERETO AND DEFINITIONS THEREIN).
THE STATEMENTS CONTAINED IN THE DISCLOSURE STATEMENT

INCLUDE SUMMARIES OF THE PROVISIONS CONTAINED IN THE PLAN AND IN THE DOCUMENTS REfERRD TO IN THE PLAN. THE STATEMENTS CONTAINED IN THE DISCLOSURE STATEMENT DO NOT PURPORT TO BE PRECISE OR COMPLETE STATEMENTS Of ALL THE TERMS AND PROVISIONS OF THE PLAN OR DOCUMENTS REfERRD TO IN THE PLAN, AND REfERENCE IS MADE TO THE PLAN AND TO SUCH DOCUMENTS FOR THE fULL AND COMPLETE STATEMENT OF SUCH TERMS AND PROVISIONS Of THE PLAN OR DOCUMENTS REfERRED TO
IN THE PLAN.
24 25 26 27 28
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THE PLAN ITSELF AND THE DOCUMENTS IN THE PLAN CONTROL THE
2 3
ACTUAL TREATMENT OF CLAIMS AND INTERESTS UNDER THE PLAN AND WILL,
UPON TilE OCCURRENCE OF THE EFFECTIVE DATE, BE BINDING UPON ALL

HOLDERS OF CLAIMS AND INTERESTS, THE ESTATES, ALL PARTIES RECEIVING PROPERTY UNDER THE PLAN AND OTHER PARTIES IN INTEREST IN TIlE EVENT OF ANY CONFLICT BETWEEN THE DISCLOSURE STAlEMENT AND THE PLAN OR ANY OTHER OPERATIVE DOCUMENT, THE TERMS OF THE PLAN AND/OR SUCH OTHER OPERATIVE DOCUMENT SHALL CONTROL
A. Overview of a Chanter i 1 Plan
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The consummation of a chapter 1 i plan is the principal objective of a chapter i I casco A chapter 11 plan sets forth the means for satisfying claims against, and interests in, a debtor. Confirmation of a chapler 11 plan by a bankruptcy court makes the plan binding upon the debtor, any person or entity acquiring property under the plan and any holder of claims against or interests in the debtor, whether or not such holder of claims or interests (1) is impaired under or has accepted the plan or (2) receives or retains any property under the plan. Subject to certain limited exceptions and other than as provided in the plan itself or the confirmation order, a confirmation order discharges the debtor from any debt that arose prior to the date of
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confirmation of the plan and substitutes therewith the obligations specified under the
confirmed plan.
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A chapter I I plan may specify that the legal, contractual and equitable rights of the holders of claims or interests in certain classes are to remain unaltered by provisions of the plan. Such classes are referred to as "unimpaired" and, because of such favorable treatment,
are deemed to accept the plan. Accordingly, the Debtors need not solicit votes from the Holders of Claims or Interests in such Classes. A chapter II plan also may specify that certin
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classes wil not receive any distribution of propert or retain any claim against a debtor. Such classes are deemed not to accept the plan and, therefore, need not be solicited to vote to accept or reject the plan. Any classes that are receiving a distribution of property under the plan but arc not "unimpaired" will be solicited to vote to accept or reject the plan.
20
21
Section 1123 of the Bankruptcy Code provides that a chapter II plan shall classify
claims against and interests in the debtor. In compliance therewith, the Plan divides Claims
and Interests into various Classes and sets forth the treatment for each Class. The Plan
Proponent is also required, as discussed above, under section 1122 of
22 23
the Bankruptcy Code, to
classify Claims and Interests into Classes that contain Claims and Interests that are
substantially similar to the other Claims and Interests in such Classes. The First Lien Steering
Committee believes that the Plan has classified all Claims and Interests in compliance with
24
25
thc provisions of section 1122 of ihc Bankruptcy Code, but it is possible that a Holder of a
Claim or Interest may challenge the classification of Claims and Interests and that the
Bankruptcy Court may find that a diffcrent classification is rcquircd for the Plan to be confirmed. In such event, the First Lien Steering Committee intends, to the extent permitted
26
27 28
by ihe Bankruptcy Court and the Plan, to make such reasonable modifications of the
classifications under the Plan to permit Confirmation and to use the Plan acceptances received
in this solicitation for the purpose of obtaining the approval of the reconstituted Class or
Classes of which the accepting Holder is ultimately deemed to be a member. Any such
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2 3
reclassification could adversely alTec! the Class in which such Holder was initially a member, or any other Class under the Plan, by changing the composition of such Class and the vote required of that Class for approval ofihe Plan.
B. Administrative and Priority Claims
4
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In accordance with section 1 123(a)( 1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims have not been classified and thus are excluded from the Classes of Claims set forth in Article II of
the Plan.
1. Administrative Claims
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Each Allowed Administrative Claim shall be paid in full, in Cash, (i) on the later of (a) the Effective Daie, (b) the date on which the Bankruptcy Court enters an order allowing such
Allowed Administrative Claim, or (c) ihe date on which the Reorganized Debtors or the
9 10
Debtors, with the consent of the First Lien Steering Committee (and in com;ultation with the First Lien Agent and Second Lien Agent) and the Holder of such Allowed Administrative
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Claim otherwise agree, and (ii) in such amounts as (a) are incurred in the ordinary course of business by the Debtors, (b) are Allowed by the Bankruptcy Court, (c) may be agreed upon between the Holder of such Allowed Administrative Claim and the Reorganized Debtors or
the Debtors, with the consent of the First Lien Steering Committee (and in consultation with
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the First Lien Agent and Second Lien Agem), or (d) may otherwise be required under
applicable law. Such Allowed Administrative Claims shall include costs incurred in the operation of the Debtors' businesses after the Pciition Date, the allowed fees and expenses of Professionals retained by the Debtors and the Creditors' Committee and the fees due to the United States Trustee pursuant to 28 V.S.C. 1930.
2. Priority Tax Claims
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Allowed Priority Tax Claims shall be paid in full, in Cash, upon the later of (a) the Effective Date, (b) the date upon which there is a Final Order allowing such Claim as an Allowed Priority Tax Claim, (c) the date that such Allowed Priority Tax Claim would have been due if the Chapter II Cases had not been commenced, or (d) upon such other tenns as may be agreed to between the Reorganized Debtors or the Debtors, with thc consent of the
First Lien Steering Committee (and in consultation with the First Lien Agent and Second Lien
Agent), and any Holder of an Allowed Priority Tax Claim; provided. however, that the
22
23
Reorganized Debtors or Debtors, with the consent of the First Lien Steering Committee (and in consultation with the First Lien Agent and Second Lien Agent), in lieu of payment in full of Allowed Priority Tax Claims on the Effective Date, may make Cash payments respecting
Allowed Priority Tax Claims deferred to the extent permitted by Section 1 i
24 25 26
27
29(a)(9) of the
Bankruptcy Code and, in such event, unless otherwise provided herein, interest shall be paid
on the unpaid portion of such Allowed Priority Tax Claim at the Federal statutory rate;
provided, further, that deferred Cash payments on account of an Allowed Priority Tax Claim shall be paid quarterly over a period of six years commencing with the quarter after which
such Priority Tax Claim has been AIJowed.
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C. Classification and Treatment aCClaims
2
3
AU Claims and Interests, except Administrative Claims and Priority Tax Claims, are classified in the Classes set forth below. A Claim or Interest is classiticd in a particular Class
only to the extent that the Claim or Interest qualilies within the description of
that Class and is
4
5
classified in other Classes to the extent that any portion of the Claim or Interest qualifies
6 7
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within the description of such other Classes. A Claim is also classified in a particular Class for the purpose of receiving distributions pursuant to the Plan only to the extent that such Claim is an Allowed Claim in that Class and has not been paid, released, or otherwise satisfied
prior to the Effective Date.
i. Class A-I First Lien Lender Secured Claims
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First Lien Lender Secured Claims include any Secured Claim on account of the First
Lien Credit Agreement.
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A-I is Impaired and entitled to vote to accept or reject the Plan. On the Effective Date or such other date as set forth herein, each of the First Lien Lenders (or its Permitted Nominee) shall receive on accouiit of its Secured Claims, (w) its pro rata share of$1.5 millon in Cash from the proceeds of the First Lien Lenders' Collateral, (x) its pro rata share of 100% otthe New First Lien Notes, and (y) its pro rata share of 100% of the Newco Equity Interests (subject to dilution for any Newco Equity Interests issued pursuant 10 a Management and Director Equity Incentive Plan). The $ 1.5 million payment to the First Lien Lenders shall be allocated and deemed paid to the First Lien Lenders in accordance with Article VILF. of the
Class
rlan.
2. Class A.2 _. Second Lien Lender Secured Claims
Second Lien Lender Secured Claims include any Secured Claim on account of the
Second Lien Credit Agreement.
19
20
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Class A-2 is Impaired and entitled to vote to accept or reject the Plan. On the Effective the Plan, each the Class of Second Lien Lender Secured Claims votes in favor of of the Second Lien Lenders (or its Permitted Nominee) shall receive its pro rata share of a
Date, only if
22 23 24 25
50% interest in the Stanley Engineering Litigation, without a reduction on account of the reasonable fees and expenses of Ropes & Gray LLP mid local counsel for the Second Lien which such fees shall be paid in Cash Agent, subject to an aggregatc cap ofS500,OOO, each of
to the Second Lien Agent on the Effective Dale. fthe Class of Claims voles in favor of
Second Lien Lender Secured

the net
the Plan, upon final resolution of the Stanley Engineering Litigation,
each holder of an Allowed Second Lien Lender Claim wil receive iis pro rata share of
26
27 28
proceeds of the Stanley Engineering Litigation. If the Class of Second Lien Lender Secured Claims voles against the Plan, each of the Second Lien Lenders shall receive no recovery on account of such Secured Claims.
3. Class A-3 Other Secured Claims
Other Secured Claims include any Secured Claim other than a: (a) First Lien Lender Secured Claim; or (b) Secon Lien Lender Secured Claim.
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Class A-3 is Unimpaired and deemed to accept the Plan. To ihe extent noL satisfied by
2
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4
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the Debtors, pursuant to Bankruptcy Court order, in the ordinary course of business prior to the EJfective Dale, at the option of the Reorganized Debtors on or after the Effective Date (i) an Allowed Other Secured Claim shall be Reinstated and rendered Unimpaired in accordance with section I J 24(2) of the Bankruptcy Code, (ii) a Holder of an Allowed Other Secured Claim shall receive Cash in an amount equal to such Allowed Other Secured Claim, including any interest on such Allowed Other Secured Claim required to be paid pursuant to section 506(b) of the Bankruptcy Code, on the later of the Eflectivc Date and the date such Other
6 7
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Secured Claim becomes an Allowed Other Secured Claim, or as soon thereafter as is

practicable, (iii) a Holder of an Allowed Other Secured Claim shall receive the Collateral
securing both its Allowed Other Secured Claim and any interest on such Allowed Other Secured Claim required to be paid pursuant to section 506(b) of the Bankruptcy Code, or (iv)
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a Holder of an Allowed Other Secured Claim shall receive such treatment as to which such
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Holder and the Reorganized Debtors or the Debtors, with the consent of the First Lien
Steering Committee (and in consultation with the First Lien Agent and Second Lien Agent), otherwise agree.
4. Class B - Priority Non-Tax Claims
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Priority Non-Tax Claims include any Claim accorded priority in right of payment pursuant to section 507(1) of the Bankruptcy Code, other than a Priority Tax Claim or an
Administrative Claim.
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Class B is Unimpaired and deemed to accept the Plan. Each Holder of an Allowed
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Priority Non-Tax Claim shall receive Cash in an amount equal to such Allowed Priority NonTax Claim on the later of the EITective Date and the date such Priority Non-Tax Claim becomes an Allowed Priority Non~Tax Claim, or as soon thereafter as is practicable, unless the Holder of an Allowed Priority Non-Tax Claim and the Reorganized Debtors or the Debtors, with the conscnt of the First Lien Steering Committee (and in consultation with the First Lien Agent and Second Lien Agent), otherwise agree.
5. Class C-L General Unsecured Claims (including 3ny Allowed Rhodcs
19
20
21
Entities Claims)
22 23 24 25
General Unsecured CI3ims include any Claim (including any Allowed Rhodes Entities Claims) against any of the Debtors that is not a1n (a) Administrative Claim, (b) Priority Tax Claim, (c) Priority Non~lax Claim, (d) First Lien Lcnder Secured Claim, (e) Second Lien Lender Secured Claim, (f) Othcr Secured Claim, (g) Firsl Lien Lender Deficiency Claim, (h) Second Lien Lender Deficiency Claim, (i) Subordinated Claim, or U) Intercompany Claim.
26
27 28
Class C- i is Impaired and entitled to vote to accept or reject thc Plan. On thc Effective Date, each Holder of an Allowed General Unsecured Claim (including any Allowed Rhodes Entities Claims) shall receive its pro rata share of the Litigation Trusilnterests allocable to the Holders of General Unsecured Claims on account of its Allowed Claim.
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6. Class C-2 - First Lien Lender Deficiency Claims
2 3
First Lien Lender Deficiency Claims include any deficiency Claim arising under the First Lien Credit Agreement.
Class C-2 is Impaired and entitled to vote to accept or reject the Plan. On the Effective Date, each Holder of a First Lien Lender Deficiency Claim shall receive its pro rata the Litigation Trust Interests allocable to the ilolders of First Lien Lender Deficiency share of Claims on account afits Allowed Claim.
7. Class C-3 - Second Lien Lender Deficiency Claims
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Second Lien Lender Deficiency Claims include any delciency Claims arising under the Second Licn Credit Agreement.
Class C~3 is Impaired and entitled to vote to accept or reject the Plan. On the Effective Date, each Holder of an Allowed Second Lien Lender Deficiency Claim shall receive its pro rata share or the Litigation Trust Interests allocable to the Hulders of Second the Class of Second Lien Lien Lender Deficiency Claims on account of its Allowed Claim. If Lender Secured Claims voles against the Plan, the distribution of Litigation Trust Interests
9
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allocable to the Holders of Second Lien Lender Deficiency Claims shall be subject to the reasonable fees and expenses of Ropes & Gray LLP and local counsel for the Second Lien
Agent.
8. Class C~4 - Subordinated Claims
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Subordinated Claims include all Claims subject to subordination under Bankruptcy
Code section 510. The First Licn Steering Committee does not believe there are any
Subordinated Claims but has created such Class out of an abundance or caution.
Class C~4 is Impaired and deemed to have rejected the Plan. Claims subordinated
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under applicable law shall not receive any recovery on account of
their Claims.
20
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9. Class D - Old Equity Jntcrests
22
23 24
25
Old Equity Interests include all of the Interests in any of the Debtors and any rights, options, warrants, calls, subscriptions or other similar rights or agreements, commitments or outstanding securities obligating the Debtors to issue, transfer or sell un)' Interests.
Class D is Impaired and deemed to reject ihe Plan. Each holder of an Old Equity Interest shall 110t be entitled to, iind shall not receive or retain any property or interest in
propcity on account or such Old Equity Interest.
10. Class E- Intercompany Claims
26
27 28
Intercompany Claims include any Claim held by a Debtor against another Debtor.
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2
3 4 5
Class E is Impaired and deemed to reject the Plan. At the election of the Reorganized Debtors, Intercompany Claims wil be (i) reinstated, in full or in part, (ii) resolved through
sCl~off, distribution, or contribution, in full or in part, or (iii) cancelled and discharged, in full
or in part, in which case such discharged and satisfied portion shall be eliminated and the
Holders thereof shall not be entitled 10, amI shall not receive or retain, any property or interest
in property on account of such portion under the Plan.
D. Bankruptcy Code Section I i li(b) Election

Bankruptcy Code section i II 1 (b)(1 )(A) authorizes a class of secured claims to elect,
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by at least two-thirds in amount and more than half in number, to waive any deficiency claim otherwise asserliible against the debtor and instead require the debtor to make payments equal to the total amount of the claims, with such payment obligation having a present value equal to the current value of the creditors' collateraL. A section 1111 (b) election must be made by a class of secured creditors at or prior to the conclusion of the hearing on the Disclosure
Statement. No class of Secured Claims made a section I i I I conclusion of
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(b) election at or prior to the
the hearing on the Disclosure Statemenl. Accordingly, Bankruptcy Code section
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ILL l(b) is not applicable to the Plan.
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E. Cramdown
The First Lien Steering Committee will request Confinnation of
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the Plan under section
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the Bankruptcy Code with respect to any Impaired Class that does not accept the Plan pursuant to section 1126 of the Bankruptcy Code. The First Lien Steering Committee reserves the right to modify the Plan to the extent, if any, that Confinnation pursuant to sectiun 1 129(b) of the Bankruptcy Code requires modification.
i 129(b) of F. Means for Implementation of
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I. Subslintive Consolidation
20
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The Plan shall serve as a motion by the First Lien Steering Committee seeking entry of a Bankruptcy Court order substantively consolidating all of the Estates into a single consolidated Estate for all purposes associated with Confirmation and distributions to be made
under the Plan. The effect of substantive consolidation is that on the Effective Date: (a) solely
22
23
24
25
26 27
28
for the purposes of the Plan and the distributions and transactions contemplated thereunder, all assets and liabilities of the Debtors' Estates shall be deemed consolidated into a single estate; (b) all cross-corporate guarantees made by the Debtors prcpetition shall be deemed eliminated (regardless of whether such guaranty is secured, unsecured, liquidated, unliquidated, contingent, or disputed); (c) any obligation of any Debtor and a1l guarantees thereof executed by one or more of the Debtors shall be deemed to be a single obligation of the consolidated Debtors; (d) any Claims Filed or to be Filed in connection with any such obligation and such guarantees referenced in subsection (c) hereof shall be deemed to be a single Claim against the consolidated Debtors; (e) each and every Claim Filed in the individual Chapter i I Case of any of the Debtors shall be deemed to be a single obligation of all of the Debtors under the Plcin; (I) all duplicative Claims (identical in both amount and subject matter) Filed against more than one of the Debtors shall be automatically expunged so that only one Claim survives
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against the consolidated Debtors (but in no way shall such surviving Claim be deemed
2
3
Allowed by reason of this Section); and (g) the Intercompany Claims will be automatically eliminated. All Claims based upon guarantees of collection, payment or performance made by the Debtors as to ihe obligations of another Debtor or or any other Person shall be discharged,
released and of no further force and efrect; provided, however, that nothing in the Plan shall
4
5
aO'cct the obligations of each of the Debtors under the Plan. Notwithstanding the substantive
consolidation of these Cases for purposes of the Plan, each of the Debtors shall, as Reorganized Debtors, continue to exist aftcr the Effective Date as separate corporate entities.
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Substantive consolidation causes no harm to creditors and the benefits of substantive consolidation arc numerous. First, over $12 billon in duplicate secured debt claims wil be eliminated because the First Lien Lender Claims and the Second Lien Lender Claims each will be allowed only once againsi the consolidaled Estale. Second, over $500 milion in
Intercompany Claims will be deemed eliminated because the multiple Debtors will be deemed only one Debtor. Third, ovcr $4.6 millon of othcr duplicate Unsecured Claims that have been filed in multiple Chapter I i Cases will be automatically eliminated. Fourth, approximately
35% of the Claims that have been Filed arc asserted incorrectly against thc wrong Debtor.
Substantive consolidation will eliminate the need for the objection to such Claims.
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Accordingly, the Plan Proponent submits that substantive consolidation is warranted in the Chapter 11 Cases.
The following additional factors support substantive consolidation:
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. The Debtors operate as a single business enterprise called "Rhodes Homes"
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rather than along distinct
legal entities.
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. The Debtors operate on a centralized basis with a central cash management
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system. All of the Debtors' operating expenses are paid for by one Debtor
entity on behalf of the other Debtors. Likewise, all funds received by the
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Debtors are automatically remitted to the central cash management account as

required by the First Lien Credit Agreement. The Debtors' financial reporting
19
is also on a consolidated basis and the Debtors fie consolidated tax returns.
. The Debtors share common parent companies. The Debtors have overlapping
20
21
directors or managing members and offcers among parent and subsidiaries.

Because the Debtors all have the same director/managing member and
22
23
principal shareholder, Mr. Rhodes, there were no regular meetings of the subsidiaries' boards of directors. Also, for most of the Debtors who arc LLCs,
no board meetings are required. Rather, all corporate actions are done by
written consent of
24 25 26
the sole shareholder and director/ managing member. All of the Debtors' corporate activities are characterized by ccntralized decision making, including the fiing of the bankruptcies.
. All of the Debtors rely on the corporate offce for their accounting, legal,
27
28
human resources, adminisirative support. In addition to shared corporate

support, all of
the Debtors also share common insurance policies.
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. The Debtors regularly conduct business with each other such that the flow of
2
3 4
5
funds is numerous and would be extraordinarily diflculi and time consuming

to disentangle. As of the Petition Date, the Debtors estimate that
approximately $500 million in intercompany claims were owed between the

Debtors.
. The Debtors are all obligated, either as obligors or guarantors, under the First Lien Credit Agreement and the Second Lien Credit Agreement.
. Based on the 461 Proofs of Claims Filed, at least 160 claimants have Filed
6 7
Claims against the wrong Debtor entity. Therefore, there is confusion amongst
the Creditor body as to which Debtor is the Debtor that is legally obligated on the Claim.
2. Sources of Consideration for Plan Distributions
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The Reorganized Debtors shall fund distributions under the Plan with Cash on hand, proceeds from the Mediation Settlement, cxisting assets, and the issuance of the New First Lien Notes and Newco Equity Interests.
a. Newco Equity Interests
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On the Effective Date, but not more than thirty days aftcr the Effective Date for initial distributions on account of Allowed Claims, Newco shall issue Newco Equity Interests (based upon the Newco Total Enterprise Value) to the Holders of first Lien Lender Secured Claims. Each share of Class A-2 Equity Interest wil be convertiblc at the option of the holder, exercisable at any time, into one Class A- i Equity Interest.
00
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19
20
21
The economic rights of the Class A-I Equity Interests and Class A-2 Equity Interests shall be identicaL. The Class A-2 Equity Interests wil nol be entitled to general voting rights, but will be entitled to vote on an "as converted" basis (together with the holders of the Class A-I Equity Interests, as a single class) on certain non-ordinary course transaclions, including (i) any authorization of, or increase in the number of authoriZed shares of, any class of capital stock ranking equal or senior to the Newco Equity Interests as to dividends or liquidation preference, including additional Newco Equity Interests, (ii) any amendment to the Newco's certificate of incorporation or by-laws, (iii) any amendment to any shareholders agreement,
22 23
(v) any sale, lease or other disposition of all or substantially all of the assets of the
Reorganized Debtors through one or more transactions, (v) any recapitalization,
reorganization, consolidation or merger of the Reorganized Debtors, (vi) to the extent that
24
25
holders of Class A-I Equity Interests have the right to vote thereon, any issuance or entry into an agreement for the issuance of capital stock (or any options or other securities convertible
26 27 28
into capital stock) of the Reorganized Debtors, except as may be provided for under any management incentive plan, and (vii) to the extent that holders of Class A-I Equity Interests
have the right to vote thereon, any redemption, purchase or other acquisition by the Newco of
any of its capital stock (except for purchases from employees upon termination or
employment).
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The Class A~2 Equity Interests will be entitled to a separate class vole on any
2
3
amendment or modification of any rights or privileges of the Class -2 Equity Interests that does not equally affect the Class A-I Equity Interests. In any liquidation, dissolution or the Newco winding up of the Reorganized Debtors, all assets wil be distributed to holders of Equity Interests on a pro rata basis.
(i) Section I i 45 Exemption
4
5
6 7
Pursuant to section 1145 of the Bankruptcy Code, the offering, issuance, and
distribution of any Securities contemplated by the Plan and any and all seUlemenl agreements incorpomted therein, including the Newco Equity Interests, shall, to the fullest extent permitted by applicable law, be exempt from, among other things, the registration
requirements of section 5 of the Securities Act and any other applicable law requiring
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8 9
registration prior to the offering, issuance, distribution, or sale of Securities. In addition, under section 1145 of the Bankruptcy Code any Securities contemplated by the Plan,
10
11
including the Newco Equity Interests and New First Lien Notes, wil be freely tradable and
transferable by the recipients thereof, subject to (i) the provisions of section I 145(b)(1) of
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the
Bankruptcy Code relating to the definition of an underwriter in section 2(a)(II) of the

the Securities and Exchange Commission, if any, applicable at the time of any future transfcr of such Securities or
Securities Act, and compliance with any rules and regulations of
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instniinents; Oi) the restrictions, if any, on the transferability of such Securities and
instruments set forth in the Newco LLC Operating Agreement, a draft of which is attached
hereto as Exhibit J; ami (iii) applicable regulatory approval.
(ii) lssuance and Distribution of
14
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the Newco Equity Inlerests
16 17
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The Neweo Equity Interests, when issued or distributed as provided in the Plan, will be duly authorized, validly issued, and, if applicable, fully paid and nonassessable. Each distribution and issuance shall be governed by the teons and conditions set forth in the Plan applicable to such distribution or issuance and by the tcnns and conditions of the instruments evidencing or relating to sueh distribution or issuance, which tenns and conditions shall bind
each Entity receiving such distribution or issuance.
b. New First Lien Notes
20
21
On the Effective Date or as soon as reasonably practicable thereafter, Newco shall

22
23
issue the New First Lien Notes. The Reorganized Debtors shall be co-borrowers and
guarantors under the New rirst Lien Notes. The New First Lien Notes shall have the terms set
forth on Exhibit 2 to the Plan and as otherwise provided in the tenns of the documents
governing the New First Lien Notes. A draft of
24 25
the New First Lien Notes credit agreement is
attached hereto as Exhibit K.

26
27 28
c. Exit Financing
To the extent the board of directors of Newco (or such other governing body)
determines that additional financing is necessary for the operation of the Reorganized
Debtors' businesses, Neweo and/or the Reorganized Debtors may obtain additional financing. The First Lien Steering Committee does not anticipate that additional sources of funding in
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2
3
addition to Cash on hand, the Nc\..co Equity Interests and the New First Lien Notes will be necess;-ry to fund distributions under the Plan on the Effective Date.
3. Corporate Existence
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Except as otherwise provided in the Plan, each Debtor shall continue to exist aficr the Effective Date as a separate corporate entity, limited liability company, partnership, or other form, as the case may be, with all the powers of a corporation, limited liability company, partnership, or other form, as the case may be, pursuant to the applicable law in the jurisdiction in which each applicable Debtor is incorporated or formed and pursuant to the respective certificate of incorporation and bylaws (or other formation documents) in effect prior to the Effective Date, except to the extent such certificate of incorporation and bylaws (or other formation documents) are amended by the Plan or otherwise, and to the extent such documents arc amended, such documents are deemed to be pursuant to the Plan and require
no further action or approvaL.
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4. Vcstine: of Assets in the Reorganized Debtors
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Except for any Claims or Causes of Action transferred to the Litigation Trust and
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unless otherwise provided in the Plan or any agreement, instrument, or other document
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incorporated therein, on the Effective Date, all property in each Estate, all Causes of Action,
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and any property acquired by any of the Debtors pursuant to the Plan shall vest in each
respective Reorganized Debtor, free and dear of all Liens, Claims, charges, or other
14
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encumbrances. On and after the Effective Date, except as othciwise provided in the Plan, each Reorganized Debtor may operate iL'i business and may use, acquire, or dispose of
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property and compromise or settle an)' Claims, Interests, or Causes of Action without
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supervision or approval by the Bankruptcy Court and free of any restrictions of the
Bankruptcy Code or Bankruptcy Rules.
5. Cancellation of EQuity Securities and Related Obligations
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20
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On the Effective Date, except as otherwise specifically provided for in the Plan: (1) the Old Equity Interests and any other Certificate, note, hond, indenture, purchase right, option, warrant, or other instrument or document directly or indirectly evidencing or creating any indebtedness or obligation of or ownership interest in the Debtors giving rise to any Claim or
Interest (except such Certificates, notes, other instruments or documents evidencng
22
23
24
25
26
27 28
indebtedness or ohligations of the Debtors that are Reinstated pursuant to the Plan), shall be cancelled solely as to the Debtors, and the Reorganized Debtors shall not have any continuing obligations thereunder and (2) the obligations of the Debtors pursuant, relating, or pertaining to any agreements, indentures, certificates of designation, bylaws, or certificate or articles of incorporation or similar documents governing the Old Equity Interests and any other Certificates, notes, bonds, indentures. purchase rights, options, warrants, or other instruments or documents evidencing or creating any indebtedness or obligation of the Debtors (except such agreements or Certificates, notes or other instruments evidencing indebtedness or
oblgations of the Debtors that are specifically Reinstated pursuant to the Plan) shall be
released and discharged; provided. however. that notwithstanding Confirmation, any such indenture or agreement that governs the rights otlhe Holder of a Claim shall continue in effect
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3
solely for purposes of: (w) allowing Holders to receive distributions under the Plan; (x) allowing a Scrviccr to make distributions on account or such Claims as provided in the
applicable governing agreement; (y) pcnniuing such Servicer 10 maintain any rights and Liens it may have against property other than the Reorganized Debtors' property for fees, costs, and
expenses pursuant to such indenture or other agreement; and (z) governing the rights and
4
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obligations of non-Debtor parties 10 such agreements vis--vis each other (including, without
limitation, the rights and obligations of non-Debtor parties under the First Lien Credit
Agreement and the Second Lien Credit Agreement, which, for the avoidance of doubt, shall
not be affected by the Plan except as otherwise expressly provided in the Plan); provided, further, however, that the preceding proviso shall not affect the discharge or Claims or
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Interests pursuant to the Bankruptcy Code, the Confirmation Order, or the Plan, or result in any expense or liability to the Reorganized Debtors. The Reorganized Debtors shall not have any obligations to any Servicer for any fees, costs, or expenses, except as expressly otherwise provided in the Plan.
6. Restructuring SteDs and Transfer of Certain Interests to Newco
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12 13 14
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1n the event the Rhodes Entities comply with all of their obligations pursuant to the
Mediation Settlement and the Plan, on the Effective Date or, in the casc of siep (d) below,
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effective the next day, the following transactions shall be deemed to have occurred in the
order set forth below.
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a. Newco shall be formed as a new limited liability company. The First Lien Lender Secured Claims shall be deemed to have been exchanged for the membership interests in Neweo. Neweo shall be deemed to hold all of the First Lien Lender Secured Claims. At the option of a holder,
membership interests in Newco may be transferred to a corporation prior to step (b).
b. Newco shall purchase all of
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the Heritage Equity Securities for $10.00.
The Heritage Equity Securities have negligible value and are being
purchased for $10 by Newco as part of the Mediation Settlement.
c. Contemporaneous with or subsequent to Newco's purchase of the
20
21
22 23
Heritage Equity Securities, The Rhodes Companies, LLC - the general partner of each of Tick, LP; Glynda, LP; Jackknife. LP; LP; Batcavc, LP; Overflow, LP; Wallboard, LP; and Chalkline, LP, --shall sell its
general partnership interesls in such entities to Newco for $1.00.

Alternatively, the membership interest in The Rhodes Companies, LLC may be acquired from its sole member - Sagebrush Enterprises, Inc. -
24
25 26
in consideration for release of its obligations under the Firs Lien

Lender Secured Claims.
d. Newco's members may agree to continue Newco as an LLC, fie a
27 28
check ihe box election effective the day afLcr the Effective Date to treat
Newco as a corporation for tax purposes, or convert into a corporation as of the day after the Ellective Date.
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In any event, to the extent any cancellation of indebtedness is derived from the
2
3
foregoing transactions under the Internal Revenue Code, it shall be allocable to the holders of the Old Equity Interests as required by the Internal Revenue Code. To be clear, Newco's
purchase of the Heritage Equity Securities shall occur (a) contemporaneously with or
immediately before ihe membership interests of those entities described in Article IV.F.6.c,
4 5
immediately above, arc acquired; (b) before any debt or obligations of the Debtors are
canceled or forgiven; (d) before any new notes are issued or existing debt is modified by the
Reorganized Debtors; and (e) before any of the other acts or events contemplated in Article
the Plan. The holders of the Heritage Equity Securities and Newco will report IILB, ct scq., or the sale and purchase of the Heritage Equity Securities in accordance with revenue ruling 99-
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6,1991-1 CB 432.
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7. Restructurine Transactions
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On the Effective Date or as soon as reasonably practicable thereafter, the Reorganized
Debtors may take all actions as may be necessary or appropriate to effect any transaction
described in, approved by, contemplated by, or necessary to effectuate the Plan, including: (1)
the execution and delivery of appropriate agreements or other documents of merger,
consolidation, or reorganization containing terms that arc consistent with the terms of
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the Plan
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and that satisfy the requirements of applicable law; (2) the execution and delivery of
appropriate instruments of transfer, assignment, assumption, or delegation of any property,
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the Plan; (3) the fiing of appropriate certificates of incorporation, merger, or consolidation with the appropriate governmental authorities pursuant to applicable law; (4) the Roll-Up Transactions; (5) the
right, liabilty, duty, or obligation on terms consistent with the terms of
17
18
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19
establishment of a liquidation trust or oiher appropriate vehicle to hold assets for sale that will not be utilized in the business of the Reorganized Debtors; and (6) all other actions that the Reorganized Debtors determine are necessary or appropriate, including the making of filings or recordings in connection with the relevant Roll-Up Transactions. The form of each RollUp Transaction shall be determined by the Reorganized Debtor that is party to such Roll-Up Transaction. Implementation of the Roll-Up Transactions shall not affect any distributions, discharges, exculpations, releases, or injunctions set forth in the Plan.
8. Corporate Action
20
21
22
23
24
25
26 27
28
Each of the matters provided for by the Plan involving the corporate structure of the Debtors or corporate or related actions to be taken by or required of the Reorganized Debtors shall, as of the Effective Date, be deemed to have occurred and be effective as provided in the Plan (except to the extent otherwise indicated), and shall be authorized, approved, and, to the extent taken prior to the Effective Date, ratified in all respects without any requirement of further action by Holders of Claims or Interests, directors of the Debtors, or any other Entity. Without limiting the foregoing, such actions may include: the adoption and filing of the Newco LLC Operating Agreement; the adoption anti filing of organization documents of the
other Reorganized Debtors; the appointment of directors and offcers for the Reorganized
Debtors; and the adoption, implementation, and amendment of the Management and Director
Equity Incentive Plan.
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9. Post-Confirmation Property Sales
2
3
To the extent the Reorganized Debtors sell any or their properly prior to or including ihe date that is one year after Confirmation, the Reorganized Debtors may elect to sell such property pursuant to sections 363, 1123, and 1146(a) orthe Bankruptcy Code.
i o. Organizational Documents
4
5
The certificates of
incorporation and bylaws (or other tormation documents relating to

Entity) of
limited liabilty companies, limited partnerships or other forms of
the Debtors shall
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10
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be in form and substance acceptable to the First Lien Steering Committee and shall be consistent with the provisions of the Plan and the Bankruptcy Code. The Newco LLC Operating Agreement shall be in form and substance acceptable to the First Lien Steering Committee. The organizational documents for Newco shall, among other things: (1)
authorize issuance of required by section 1
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the Newco Equity lnterests; and (2) pursuant to and only to the extent
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23(a)(6) of the Bankruptcy Code, include a provision prohibiting the
issuance of non-voting Equity Securities. On or as soon as reasonably practicable after the
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Effective Date, to the extent required, each of the Reorganized Debtors shall fie new certfcales of incorporation (or other formation documents relating to limited liability
companies limited partnerships, or other forms of Entity) in form and substance acceptable to First Lren Steering Committee, with the secretary (or equivalent state offcer or Entity) of the state under which each such Reorganized Debtor is or is to be incorporated or organized. On
or as soon as reasonably practicable after the Effective Date, to the extent required, Newco
shall fie ihe applicable organizational documents with the secretary (or equivalent slate
offcer or Entity) of
12
13
14 15
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the state under which Newco is to be incorporated or organized. After the
16
17
ElTcctivc Date, each Reorganized Debtor may ameiid and restate its new certificate of incorporation and other constituent documents as permitted by the relevant state corporate
law.
i 1. Effectuating Documents. Further Transactions
18 19
On and after the Effective Date, the Reorganized Debtors, and the offcers and
members of the boards of directors (or other governing bodies) thereof, are authorized to and may issue, execute, deliver, fie, or record such contracts, Securities, instruments, releases,
and other agreements or documents and take such actions as may be necessary or appropriate
20
21
22
23
to effectuate, implement, and further evidence the terms and conditions of the Plan and the
Securities issued pursuant to the Plan in the name of and on behalf of the Reorganized Debtors, without the need for any approvals, authorizations, or consents except for those
expressly required pursuant to the Plan.
i 2. Exemption from Certain Transfer Taxes and Recording Fees
24
25
Pursuant to section I 146(a) of the Bankruptcy Code, any transfer from a Debtor to a Reorganized Debtor or to any Entity pursuant to, in contemplation of, or in connection with
26 27
28
the Plan or pursuant to: (1) the issuance, distribution, transfer, or exchange of any debt, equity
security, or other interest in the Debtors or the Reorganized Debtors; (2) the creation,
modification, consolidation, or recording of any mortgage, deed of trust, or other security
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interest, or the securing of additional indebtedness by such or other means; (3) the making, any lease or sublease; or (4) the making, delivery, or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, the transfer executed Plan, including any deeds, bils of sale, assignments, or other instrument of in connection with any transaction arising out of, contemplated by, or in any way related to the
assignment, or recording or
4
5
Plan, shall not be subject to any document recording lax, stamp tax, conveyance ree,
6 7
intangibles or similar tax, mortgage tax, real estate transfer tax, mortgage recording tax, Uniform Commercial Code filing or recording fee, or recording fee, or other similar tax or governmental assessment, and the appropriate state or local governmental offcials or agents
shall forego the collection of any such tax or governmental assessment and to accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment.
13. Directors and Offcers of
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the Reomanized Debtors
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On the Effective Date, the board of directors of the Reorganized Debtors or similar governing entities shall be composed of one or more members appointed by the First Lien
Steering Committee. On the Effective Date, a chief executive ollicer or similar offcer
selected by the bOard of directors of the Reorganized Debtors shall be appointed. The identity
of such oflcers and directors shall be disclosed at or prior to the Confirmation Hearing.
12
13 14
15
14. Management and Director Equity Incentive Plan
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The Reorganized Debtors reserve the right to implement a Management and Director Equity Incentive Plan. The terms and conditions of any Management and Director Equiiy
Incentive Plan shall be determined by the Board of Directors of New
16
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17
18 19
15. The Litigation Trust
.. ..
On the Eftctive Date, the Litigation Trust wil be implemcnted pursuant to the tenns of the Litigation Trust Agreement. A draft of the Litigation Trust Agreement is attached
hereto as Exhibit i. On the Effective Date, pursuant to the terms of the Litigation Trust
20
21
Agrecment, the Debtors wil transfer thc Litigation Trust Assets for and on behalf of the
Litigation Trust Beneficiarics, which wil be the Holders of Allowed Claims in Classes C-l,
22 23
24
C-2 and C-3. For all federal income tax purposes, the beneficiaries of the Litigation Trust shall be treated as grantors and owners thereof and it is intendcd that the Litigation Trust be and that the Treasury Regulations classified as a liquidating lrust under Section 301.7701 -4 of such trust is owned by its beneficiaries. Accordingly, for federal income tax purposes, it is
they had received a distribution intended that the Litigation Trust Beneficiaries be treated as if of an undivided interest in thc Litigation Trust Assets and thcn contributed such interests to
the Litigation Trust. The Litigation Trust will initially be funded with $100,000, which
amount wil be transfcrrd to the Litigation Trust on the Effective Date and which wil be repaid to the Reorganized Debtors from the first proceeds received by the Litigation Trust.
25 26 27
28
The Litigation Trust shall issue non-transferable intcrests to Holders of AlIowcd First
Lien Lender Deficiency Claims, Allowed Second Lien Lender Deficiency Claims, and Allowed General Unsccurcd Claims (including any Allowed Rhodes Entities Claims) with
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3
each Holder of an Allowed Claim in each of the foregoing Classes or Claims receiving its pro rata snare of the Litigation Trust Interests allocable to each such Class of Claims.
A list of Litigation Trust Assets is attached hereto as Exhibit G The Litigation Trust AsselS shall include all claims existing against the Rhodes Entities that are not expressly
released under the Plan. The claims include the following claims, among others:
. Claims for beach of fiduciary duty;
. Claims for misappropriation of Debtor assets for personal use;
4
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. Claims for usurping corporate opportunity for the benefit of competing interests;
8
. Claims for mismanagement of
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. Claims for fraudulent transfers (to the extent not expressly released under the
Plan);
. Claims for the diversion of corporate resources for the benefit of competing
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interests.
Additional discovery and analysis wil be required to be performed by the Ltigation
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Trustee before any determination can be made whether the foregoing claims or any other
claims are colorable and should be pursued by the Litigation Trust against the Rhodes Entities. The Ltigation Trust wil undertake a detailed analysis of any potential claims before making a
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determination on whether to pursue any litigation against the Rhodes Entities. While it is
impossible at this time to predict with any certainty whether the foregoing claims or any other
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17
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claims wil be prosecuted and, if they are prosecuted, whether they wil be successful, the
First Len Steering Committee believes that prosecution of claims against the Rhodes Entities
may yield up to $10 million or more in judgments in favor of
..
20
21
the Litigation Trust. However, such claims could also yield no proceeds if they are unsuccessful, or if the Rhodes Entities have valid claims that are pennitted to be used as offsets against any liabilities that the Rhodes Entities may be determined to have to the Debtors.
The Rhodes Entities do not believe that viable claims or causes of action exist against them and they wil vigorously defend any litigation based on the allegations contained in the Trustee Motion or otherwise, which allegations the Rhodes Entities assert are baseless and
premis;ed on inadmissible hearsay.
22 23 24
25
16. Pres;ervation of Causes of Action

In accordance with section i i
23(b) of the Bankruptcy Code, except as otherwise
26
27 28
provided in the Plan, the Reorganized Debtors and the Litigation Trust shall retain and may enforce all rights to commence and pursue, as appropriate, any and all Causes of Action, whether arising before or after the Petition Date, including iiny actions specifically
enumerated 011 Exhibit L, and the Reorganized Debtors' rights to commence, prosecute, or
settle such Causes of Aciion shiill be preserved notwithstanding the occurrence of the
EtTcctive Date. The Reorganized Debtors and the Litigation Trust, as applicable, may pursue
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3
siich Causes of Action, as appropriate, in accordance with the best interests of the Reorganized Debtors and the Litigation Trust, as applicable. No Entity may rely on the absence of a specific i'cference in the Plan or the J)isclosurc Statement to any Cause of Action against
them as any indication that the Debtors, Reorganized Uebtors or the Litigation Trust, as
4
5
applicable, wil not pursue any and all available Causes of Action against them. The Reorganized Debtors and the Litigation Trust, as applicable, expressly reserve all rights to prosecute any and all Causes of Action against any Entity, except as othcnvisc
expressly provided in the Plan. Unless any Causes of Action against an Entity are expressly
waived, relinquished, exculpated, released, compromised, or settled in the Plan or a
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Bankruptcy Court order, the Reorganized Debtors and the Litigation Trust, as applicable, expressly reserve all Causes of Action for later adjudication and, therefore, no preclusion doctrine, including the doctrines of rcs judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel Qudicial, equitable or otherwise), or laches, shall apply to such Causes of Action upon, after, or as a consequence of Confirmation or the occurrence of the Effective
Date.
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The Reorganized Debtors and the Litigation Trust, as applicable, reserve and shall retain the foregoing Causes of Action notwithstanding the rejection or repudiation of any executory contract or unexpired lease during the Chapter I i Cases or pursuant to the Plan. In accordance with section ll23(b)(3) of the Bankruptcy Code, any Causes of Action that a Debtor may hold against any Entity shall vest in the Reorganized Debtors and the Litigation Trust, as the case may be, on the Effective Date. The applicable Reorganized Debtor and the Litigation Trust, as applicable, through its authorized agents or representatives, shall retain
and may exclusively enforce any and all such Causes of Action belonging to it. The
Reorganized Debtors and the Litigation Trust, as applicable, shall have the exclusive right, atithority, and discretion to determine and to initiate, fie, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment (lny such Causes of Action and to
decline to do any of
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17 18
19
the foregoing without the consent or approval of any third part or further
notice to or action, order, or approval of the Bankruptcy Court. Neither the Litigation Trust
nor the Reorganized Debtors shall commence any litigation against the Rhodes Entities until tile Rhodes Entities Claims set forth in Proofs the Bankruptcy Court rules on the allowance of of Claim, included in the Debtors' Schedules or otherwise set forth in the Mediation Tenn
Sheet. To the extent any statute or limitations to pursue any claims belonging to the Debtors
20
21
22
23
against the Rhodes Entities would lapse from the execution date of the Mediation Tenn Sheet the Rhodes Entities Claims, the the allowance of through the Bankruptcy Court's resolution of Rhodes Entities shall be deemed to have consented to an extension of the applicable statute of the limitations until sixty days following the Bankruptcy Court's ruling on the allowance of
Rhodes Entities Claims. The Litigation Trust shall have no liability to any entity for any
Claims or Causes of Action it determines not to pursue.
17. HOA Board Seats
24 25
26
27 28
The Rhodes Entities shall ensure that designees identified by the Reorganized Debtors
shall replace the Rhodes Entities on any HOA boards that in any way are related to the Debtors, Reorganized Debtors or their businesses and Declarant rights or the like shall be
transferred to the Reorganized Debtors or their designee(s).
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18. Licensing
2
3 4
5
The Rhodes Entities shall take commercially reasonable steps and/or enter into any
agreements or similar documentation reasonably necessary 10 ensure the Reorganized Debtors'
continued use of all of the Debtors' applicable professional licenses at no cost to the Rhodes Entities for a period of up to twelve months following the Effective Date. To the extent, Sagebrush Enterprises, Jnc. shall have rescinded by September 25, 2009 its revocation of its
indemnity of the Nevada contractors' license held by Rhodes Design & Development
Corporation and such rescission did not negatively affect the general contractor's license held
6 7
E E
by Rhodes Design & Development Corporation, Sagebrush shall be entitled to file an

Administrative Claim on behalf of any and all claims asserted against Sagebrush as a result of Sagebrush being the indemnitor that arose from and after thc effectiveness of Sagebrush's rccission of its indemnity through the Effective Date, provided that the allowance of sueh Administrative Claim shall be subject to resolution by the Bankruptcy Court and/or such other coiirt(s) of competent jurisdiction. Sagebnish has not asserted any Administrative Claims
against the Estates as or thc date hercof, and the Frst Lien Steering Committee believes that
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no such Claims will be made by Sagebrush.

12
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The Reorganized Debtors shall indemnify Sagebrush for any and all claims asserted against Sagebrush as a result of Sagebrush being the indemnitor that arise from and after the
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Effective Date. Professional licenses include, but are not limited to the Nevada State
Contractor's Board license, and any other general business or similar licenses in any county, state, municipality or oihcr jurisdiction in which the Reorganized Debtors conduct business or own assets as of the Effective Date. The Rhodes Entities shall use commercially reasonable efforts to maintain third party agreements with their real estate brokers and sales agents.
19. Transfer of Rhodes Ranch Golf
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Course
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Under the terms of the First Lien Credit Agreement, certain of the Rhodes Entities were required to either sell the Rhodes Ranch Golf Course, or if no seller could be found, to buy the Rhodes Ranch Golf Course from the Debtors for a guaranteed purchase price of $8
milion. Because the Rhodcs Entities could not find a buyer given the state of
the economy in
20
21
December 2008, the Rhodes Entities were forced to purchase the Rhodes Ranch Golf Course
for $8 millon as required under the First Lien Credit Agreement Thc purchase price was
based on an appraisal from an independent third party, which appraised the value of the Rhodes Ranch Golf Course at approximately $8.0 milion. The First Lien Steering Committee had been advised that the Rhodes Entities financed $5.9 million of the purchase price and paid
22
23
24 25 26 27 28
$2.1 milion in cash for the Rhodes Raneh Golf Course. The Rhodes Entities subsequently asserted that $2.4 million of the purchase price was financed through a personal loan from James Rhodes, which loan will be contributed by James Rhodes to the entity that owns the
Rhodes Ranch Golf Course in connection with the transfer of Ranch Golf
the equity that owns the Rhodes
Course to the Reorganized Debtors.
Because the purchase of the Rhodes Raneh Golf Course was based on a fair market value appraisal, the Debtors received reasonably equivalent value for the Rhodes Ranch Golf
Course such that the transaction could not bc avoided as a fraudulent transfer.
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The Rhodes Ranch Golf Cour::c is the centerpiece of the Debtors' Rhodes Ranch
2
3
development, which is (he most valuable asset of the Debtors' estates. Given that there is no operating agreement between the Rhodes Entities and the Debtors, the Reorganized Debtors
desire to own the Rhodes Ranch Golf Course in order 10 manage the Rhodes Ranch Golf
Course to maximize the value of
the Debtors' assets.
4
5
Aler much negotiation, the Rhodes Entities agreed to transfer the Rhodes Ranch Golf Course 10 the Reorganized Debtors upon certain terms and conditions sel forth in more detail
below.
6
7
On the Effective Date, the applicable Rhodes Entities shall transfer their equity
interests in the entity that owns the Rhodes Ranch Golf Course to the Reorganized Debtors (together with any equipment, golf carts, contracts or other assets determined by the First Lien Steering Committee 10 be necessary for the operation of the Rhodes Ranch Golf Course) pursuant to ihe lerms of a stock transfer agreement in form and substance acceptable to the First Lien Steering Committee and Rhodes, subject to any outstanding debt on ihe Rhodes Ranch Golf Course. The stock transfer agreement shall contain representations by the Rhodes Entities that the entity that owns the Rhodes Ranch Golf Course does not have any liabilties
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other than ordinary course liabilities related to the Rhodes Ranch Golf Course and
indemnilication provisions in favor of the Reorganized Debtors by the Rhodes Entities for any nonordinary course liabilities. In addition, prior to the deadline for filing objections to the Disclosure Statement, the Rhodes Entities shall provide ihe First Licn Steering Committee with a list of all liabilities of the entiiy thai owns thc Rhodcs Ranch Golf Course, a lien analysis and copies of all contracts related to the Rhodes Ranch Golf Course and to which the entity that owns the Rhodes Ranch Golf Course is a party, each of which must be acceptable to the First Lien Steering Commillce. Pursuant to the slock and asset transfer agreement governing the transfer of the equity in the entity that owns the Rhodes Ranch Golf Course to
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the Reorganized Debtors, the entity that owns the Rhodes Ranch Golf Course post-Effective
..
Date shall agree to indemnify James Rhodes for any ordinary course liabilty first incurred post-Efrectivc Datc by such entity under any contract related to the operation of the Rhodes
Ranch Golf Course for which James Rhodes has provided a personal guaranty.
19
20
21
Othcr than the $5.9 million third party loan used to originally purchase the Rhodes Ranch GolrCourse from the Debtors, ihe First Lien Steering Committee does not believe that
there have been any additional obligations placed on the Rhodes Ranch Golf Course oiher
22
23
24
25
26 27 28
than ordinary course liabilities though the First Lien Steering Committee has been advised that James Rhodes may have provided a $2.4 millon loan to the entity that owns the Rhodes Ranch GoirCourse. This $2.4 millon loan will be contributed by James Rhodes to the entity that owns the Rhodes Ranch Golf Course and he will indemnify the Debtors, the Reorganized Debtors, Newco and the entity that owns the Rhodes Ranch Golf Course from any liability arising li'om the contribution of such loan. The existing $5.9 millon third party debt outstanding on ihe Rhodes Ranch olf Course shall be refinanced on or before the Effective Date, for a period of no less than twelve (12) months from the Effective Date, on tenns and conditions acceptable to Rhodes and the First Lien Steering Committee. The parties wil work
togeiher in good faiih to refinance the existing third party debt and have been actively working since August on the refinancing and are talking to multiple lending sources. The
First Lien Steering Committee believes that the refinancing will be accomplished prior to the
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Effective Date and, indeed, one of
the conditions precedent to the occurrence of
the Effective
2
3
Date is that the refinancing has occurred. As or the date hereof, new financing has not been
obtained for the Rhodes Ranch Golf Course. The Rhodes Entities and the First Lien Steering
4
5
6 7
E
lenders for the Rhodes Ranch Golf Course and are optimistic ihat favorable financing wil be obtained. The potential terms or such financing hiive not been provided in this Disclosure Statement to ensure that potential lenders do not obtain an unfair negotiating advantage with respect to such terms. Upon obtaining a final commitment for refinancing for the Rhodes Ranch Golf Course, the First Lien Steering Committee will disclose such terms in a fiing with the Bankruptcy Court.
Committee, however, have been engaged in discussions with potential
The Reorganized Debtors shall pay the reasonable costs and expenses associated with the refinancing; provided, that the terms of such refinancing are acceptable to the First Lien
"
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Sleering CommiUce. The First Lien Steering Committee acknowledges that the loan
documentation may provide that, upon the transfer of the Rhodes Ranch Golf Course to the
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Reorganized Debtors on ihe Effective Date, additional collateral from the Reorganized Debtors may be required. The Rhodes Entities shall transfer to the Reorganized Debtors on
the Effective Debt any contracts related to the operation of and revenue generated by any cell towers located on the property of the Rhodes Ranch Golf Course. Any funds received after
July 31,2009 from the Las Vegas Valley Water District or other similar entity as an incentive
12 13
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for converting the golf course from a green course to a desert course shall be used for operating expenses associated with the Rhodes Ranch Golf Course, with any excess to
become property of
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the Reorganized Debtors on the Effective Date.
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The golf course is beneficial to the preservation of the Reorganized Debtors' Rhodes Ranch assets and, as part of the Mediation Seiilement, the Reorganized Debtors wil obtain the third party debt on such title to the Rhodes Ranch Golf Course (through the assumption of
course 110t to exceed $5.9 millon).
17
18 19
.,
f-
Rhodes and/or his designee shall have the absolute right to repurchase the Rhodes Ranch Golf Course from the Reorganized Debtors at eight (8) years from the Effective Date
for $5.9 millon in cash. The Reorganized Debtors may require Rhodes to purchase the
Rhodes Raneh Golf Course any time between four (4) and eight (&) years from the Effective
20
21
22
23
Date for $5.9 million in cash provided that the Reorganized Debtors shall provide Rhodes with at least one year advance notice of its intent to sell the Rhodes Ranch Golf Course back the Effective Date. to Rhodes. Such transfer shall occur on the applicable anniversary date of the Reorganized Debtors put the Rhodes Ranch Golf Course to For the avoidance of doubt, if Rhodes in accordance with the terms hereof and Rhodes fails to comply with his obligation to purchase the Rhodes Ranch Golf Course, Rhodes shall be deemed to have forfeited his option
to purchase the Rhodes Ranch Golf Course.
24
25 26 27 28
On the Effective Date, Rhodes's obligations to comply with the repurchase shall be secured by either (i) $500,000 in cash in an escrow account or (ii) property worth at least $2 such property to be agreed to million (the "Golf Course Security Properly"), with the value of by Rhodes and the First Lien Sleering Committee or otherwise valued by an independent third party ;:ppraisal firm acceptable to both Rhodes and the First Lien Steering Committee (except Ciishmnn Wnkelicld). In the event that Rhodes does not meet the repurchase request,
provided that the Rhodes Ranch Golf Course is in the standard condition (defined below),
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2
3
then the Reorganized Debtors shall be entitled to liquidated damages in the form of security pledged (i.c., the $500,000 or the Golf Course Security Properly).
So long as Rhodes has not defaulted on his obligation to repurchase the Rhodes Ranch Golf Course, Rhodes shall have the absolute and sole discretion to replace the Golf Course
Security Property with $500,000 in cash on 30 days written notice to the Reorganized
4
5
Debtors. Upon deposit of the $500,000 in cash, the Golf Course Security Property shall be
released to Rhodes or his designee. Notwithstanding anything 10 the contrary contained
6 7 8 0
herein, if the Rhodes Ranch Golf Course is not maintained with substantially the same performance and rating criteria at the timc of the repurchase request as verified by an
independent third party rating agency as it was on the Effective Date ("Standard Condition"), James Rhodes can (i) require the Reorganized Debtors to cure any conditions to return the Rhodcs Ranch Golf Course to its Standard Condition (provided, that the cost of such cure does not exceed $500,000), or (ii) choose not to purchase the Rhodes Ranch Golf Course. Upon either the repurchase of the Rhodes Ranch Golf Course or the written decision to not repurchase the Rhodes Ranch Golf Course (in accordance with the preceding sentence), the Golf Course Security Property or the $500,000 Cash (if not applied to the repurchase of the
Rhodes Ranch Golf
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Course) shall be returned to Rhodes within 30 days.

Course to evidence the ahove.
On the Effective Date, the Reorganized Debtors shall record a memorandum of

3greeinent against the Rhodes Ranch Golf
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20. Cash Payment
The Rhodes Entities shall make a cash payment to the Reorganizcd Dcbtors of $3.5
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million in Cash on the Effective Date. The $3.5 millon cash payment shall bc used to fund distributions undcr the Plan and provide working capital to the extent of any excess.
21. Transfer of Arizona Assets
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18 19
20
21
On the Effective Date, pursuant to a stock and asset transfer agreement, a draft of which is attached hereto as Exhibit M, the Debtors shall transfer Pravada and thc other Arizona Assets set forth on Attachment D to the Mediation Term Sheet, plus the Golden Valley Ranch tradename to the Rhodes Entities free and clear of all liens, claims and
encumbranceS pursuant to section 363(f) of
the Bankruptcy Code; provided, that the non~First
Lien Lender/Second Lien Lender liens do not exceed $60,000; provided, further, that such
22
23
assets shall not include assets owned by Pinnacle Grading located in Arizona and related
contracts associated with the assets. All Claims asserted against the Arizona Assets shall be deemed asserted against the Estates and shall be classified in accordance with Article
III of the Plan for distribution purposes. The Arizona Assets shall be transferred through
the Rhodes Entities' acquisition of the stock of
24 25 26 27
28
Rhodes Arizona Properties LLC and Elkhorn

real property
Investments, Inc. and certin assets of Rhodes Homes Arizona LLC. Any non.
assets or assets not listed on Attachment D to the Mediation Term Sheet that are titled in Rhodcs Arizona Properties LLC or Elkhorn Investments, Jne. shall be transferred to Newco pursuant to the stock and asset transfer agreement. l the extcnt any real property assets
located in Arizona are titled in any Debtor other than Rhodes Arizona ProperLies LLC, Elkhorn Investments, Jnc. or Rhodes Homes Arizona, such real property assets shall be
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2
3
transferred to the Rhodes Entities pursuant to the stock and asset transfer agreement. All intercompnny claims assertablc by Rhodes Arizona Properties LT.C or Elkhorn Investments,
Inc. against any other Debtor shall be deemed cancelled.
4
5
The Debtors shall provide James Rhodes notice of any proposed sale of the Pinnacle assets, and James Rhodes shall be granted a right to bid on the sale of siich assets within 10
days of such noiice. The Rhodes Entities shall permit storage of Pinnacle Grading equipment .it current locations at no cost to the Reorganized Debtors for a period through six months
6
7
E
following the Effective Date.
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All executory contracts and unexpired lea~es a~soeiated solely with Arizona shall be assumed and assigned to the Rhodes Entities (or their designee), at no eost to the Debtors or the Reorgani~ed Debtors and all cure costs associated therewith shall be borne by the Rhodes Entities.
22. Trademark and Trade Names
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the buildout of Within the earlier of thirty (30) days following: (i) upon completion of all of the Reorganized Debtors' homebuilding assets and inventory (regardless of when such
12 13 14
15 16
assets and inventory were acquired), or (ii) bulk sale of the remaining inventory of the
Reorganized Debtors, the Reorganized Debtors shall transfer to James Rhodes (or his
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designee) the trademarks and tradenames set forth on Attachment E to the Mediation Term
Sheet.
23. Self Insured Retention Obligations
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The Reorganized Debtors shall indemnify subcontractors that are obligated under any
17
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of the Reorganized Debtors' existing insurance policies for any post-Elleetivc Date self insured retention obligations paid and/or to be paid by such subcontractors pursuant to sueh
existing insurance policies.
24. Bond Replacement or Indemnification
..
f-
20
21
Those performance bonds guaranteed by the Rhodes Entities in favor of the Debtors
shall be replaced on a renewal date by new performance bonds. In the alternative, subject to
22 23
24 25
the Rhodes Entities being reasonably satisfied with the creditworthiness of the Reorganized Debtors, which shall be satisfied solely as of the Effective Date by the Court finding that the Plan is feasible, the existing performance bonds guaranteed by the Rhodes Entities and such guarantees shall remain in place. The applicable Rhodes Entity's agreement to remain a guarantor under the existing performance bonds as such performance bonds may be renewed shall be at no cost to the Rhodes Entities (including, but not limited to, the payment of bond premiums). Tn the event the Reorganized Debtors fail to perform their obligations underlying
such renewed performance bonds after the Effective Date, the Reorganized Debtors will
indemnify the Rhodes Entities under such outstanding perfonnancc bonds for damages
26 27
28
incurred by the Rhodes Entities on account of their guarantee of such performance bonds solely as a result of the Reorganized Debtors' failure to perform such obligations subsequent to the Effective Date. The Reorganized Debtors shall use commercially reasonable efforts to replace all ou(~tanding performance bonds backsiopped by Rhodes Entities within 30 months
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2
3
of the Effective Date. The Bankruptcy Coui1 shall retain jurisdiction to resolve any disputes arising out ofihis paragraph.
Contingent Bond Indemnity Claims will be released in the ordinary course of
business
as time passes or as work on the underlying project is completed. To the extent that a
Contingent Bond Indemnity Claim becomes an Allowed or estimated Claim, such Contingent Bond Indemnity Claim shall be treated as a General Unsecured Claim.
25. Stanley Engineering Litieation
4
5
6 7
In the event the Stanley Engineering Litigation is resolved either by judgment or
s 0 "
8 9 10
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settlement in a manner favorable to the Reorganized Debtors and such resolution does not provide for Cash consideration to be received by the Reorganized Debtors and Second Lien Lenders, the Reorganized Debtors and the Second Lien Agent, assuming the Class of Second Lien Lender Secured Claims votes in favor of the Plan, shall engage in good faith negotiations
to ensure that the Second Lien Lenders receive considerntion equivalent to 50% of the net
N " ~0 "' M"
value of such resolution and to determine the timing of payment of any such consideration. In
the event the Reorganized Debtors and the Second Lien Agent arc unable to agree on the
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amount or form of such consideration, the parties wil submit the malter to binding arbitration with the costs thereof to be split evenly among the Reorganized Debtors and the Second Lien Agent (with the costs of the Second Lien Agent to be reimbursed from the consideration to be distributed to the Second Lien Lenders on account of the Stanley Engineering Litigation).
G. Treatment or Executory Contracts and Unexpired Leases
14
15
I. Assumption and Reicction of Executory Contracts and Unexpired Leases
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Except as otherwise provided in the Plan, the Debtors' executory contracts or
N N
unexpired leases not assumed or rejected pursuant to a Bankruptcy Court order prior to the
Effective Date shall be deemed rejected pursuant to sections 365 and 1123 of the Bankruptcy
..
18
19
Code, except for those executory contracts or unexpired leases: (1) listed on the schedule of "Assumed Executory Contracts and Unexpired Leases" attached hereto as Exhibit N; (2) that
arc Intercompany Contracts, in which case such Intercompany Contracts are deemed automatically assumed by the applicable Debtor as of the Effective Dale, unless such
Intercompany Contract previously was rejected by the Debtors pursuant to a Bankruptcy
20
21
22 23 24 25 26
Court order, is the subject of a motion to reject pending on the Effective Date; (3) that arc the subject of a motion to assume or reject pending on the Effective Date (in which case such
assumption or rejection and the effective date thereof shall remain subject to a Bankruptcy
Court order); (4) that are subject to a motion to reject with a requested effective date of
rejection after the Effective Date; or (5) that are otherwise expressly assumed or rejected
pursuant to the Plan. Entry of the Confirmation Order shall constitute a Bankruptcy Court order approving the assumptions or rejections of such executory contracts or unexpired leases
27
28
as set forth in the Plan, all pursuant to sections 365(a) and 1123 of the Bankruptcy Code. Unless otherwise indicated, all assumptions or rejections of such executory contracts and uncxpired leases in the Plan are eflectivc as of the Effective Dale. Each such executory contract and unexpired Icase assumed pursuant to the Plan or by Bankruptcy Court order but
not assigned to a third part prior to the Effective Date shall revest in and be fully enforceable
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3
by the applicable contracting Reorganized Debtor in accordance with its terms, except as such terms may have been modified by such order. Notwithstanding anything to the contrary in the Plan, the Plan Proponent and the Reorganized Debtors, as applicable, reserve the right to alter,
4
5 6
amend, modify, or supplement the schedules of executory contracts or unexpired leases identified in Exhibit N hereto at any time through and including fifteen days after the Effective Date. All executory contracts and unexpired leases associated solely with the
Arizona Assets shall be assumed and assigned to the Rhodes Entities (or their designee) to the
extent set forth on the schedule of Assumed Executory Contracts and Unexpired Leases
attached hereto as Exhibit N, at no cost to the Debtors or the Reorganized Debtors and all
Cure costs associated with such scheduled Arizona contracts or leases shall be borne by the Rhodes Entities.
2.
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Cure of Defaults for Assumed Exeeutol\' Contracts and Unexoired Leases
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With respect to each of the Debtors' executory contracts or unexpired leases listed on the schedule of "Assumed Executory Contracts and Unexpired Leases," the Plan Proponent
shall have designated a proposed Cure, and the assumption of such executory contract or
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unexpired lease may be conditioned upon the disposition of all issues with respect to Cure. Any provisions or terms of the Debtors' executory contracts or unexpired leases to be assumed pursuant to the Plan that are, or may be, alleged to be in default, shall be satisfied solely by Cure, or by an agreed-upon waiver of Cure. Except with respect to executory contracts and unexpired leases in which the Plan Proponent or the Debtors, with the consent of the First Lien Steering Committee, and the applicable counterparties have stipulated in writing to payment of Cure, all requests for payment of Cure that differ from the amounts proposed by the Debtors must be Filed with the Court on or before the Cure Bar Date. Any request for payment of Cure that is not timely Filed shall be disallowed automatically and forever barred from assertion and shall not be enforceable against any Reorganized Debtor, without the need for any objection by the Reorganized Debtors or further notice to or action, order, or approval ofthe Bankruptcy Court, and any Claim for Cure shall be deemed fully satisfied, released, and discharged upon payment by the Debtors of the amounts listed on the proposed Cure schedule, notwithstanding anything included in the Schedules or in any Proof of Claim to the contrary; provided. however, that nothing shall prevent the Reorganized Debtors from paying any Cure despite the failure of the relevant counterparty to File such request for payment of such Cure. The Reorganized Debtors also may settle any Cure without further notice to or action, order,
or approval of
the Bankruptcy Court.
22
If
the Debtors or Reorganized Debtors, as applicable, or First Lien Steering Committee
23 24
25
objeci to any Cure or any other matter related to assumption, the Bankruptcy Court shall
determine the Allowed amount of such Cure and any related issues. If there is a dispute
regarding such Cure, the ability of the Reorganized Debtors or any assignee to provide
"adequate assurance of future performance" within the meaning of section 365 of the
26 27 28
Bankruptcy Code, or any other matter pertaining to assumption, then Cure shall occur as soon as reasonably practicable after entry of a Final Order resolving such dispute, approving such assumption (and, if applicable, assignment), or as may be agreed upon by the Debtors with the
consent of the First Lien Steering Committee, or the Reorganized Debtors and the
counlerparty to the executory contract or unexpired lease. Any coiinterparty to an executory
contract and unexpired lease that fails to object timely to the proposed assumption of any
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lxcculory contract or unexpired Icase will be deemed 10 have consented to sucn assumption.
2
3
The Debtors, with the consent of the First Lien Steering Committee, or the Reorganized
Debtors, as applicable, reserve the right either to reject or nullify (he assumption of any
executory contract or unexpired lease no later than thirty days after a Final Order determining the Cure or any request for adequate assurance of future performance required to assume such executory contract or unexpired lease.
Assumption of any executory contract or unexpired lease pursuant to the Plan or
4
5
6
7 0
,
~
8 9
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otherwise shall result in the full release and satisfaction of any Claims or defaults, whether monetary or nonmonetary, including defaults of provisions restricting the change in control or ownership interest composition or other bankruptcy-related defaults, arising under any assumed executory contract or unexpired lease at any time prior to the effective date of assumption. Any Proofs of Claim Filed with respect to an executory contract or unexpired lease that has been assumed shall be deemed disallowed and expunged, without further notice
to or action, order, or approval of
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tile Bankruptcy Court.
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All Curc costs associated with Executory Contracts related to the Arizona Assets shall be borne by the Rhodes Entities.
3. Preexisting Obligations to the Debtors Under Executory Contracts and
Unexpired Leases
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Rejection or repudiation of any executory contract or unexpired lease pursuant to the

Plan or otherwise shall not constitute a termination or pre-existing obligations owed to the
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Debtors under such contracts or leases. In particular, notwithstanding any nonbankruptcy law
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17 18 19
to the contrary, the Reorganized Debtors expressly reserve and do not waive any right to
receive, or any continuing obligation of a counterpart to provide, insurance coverage, utilitiy
services. warranties, indemnity, guarantee of workmanship, or continued maintenance

obligations on goods or scrvces previously purchased by the contracting Debtors or
.. ..
Reorganized Debtors, as applicable, from counterparties to rejected or repudiated executory

contracts. The Reorganized Debtors expressly reserve and do not waive the right to receive
coverage under any past insurance pol icy to extent that coverage has not expired under the
terms or the insuraocc policy, regardless of whether such insurance policy is listed as an assumed contract. Similarly, the Reorganized Debtors expressly reserve and do not waive the right to reecive services under any contract with a utility provider, regardless of whether such agreement with a utility provider is listed as an assumed contract.
4. Claims Based on Rejection or Repudiation of Executory Contracts and
20
21
22 23
Unexpired Leases
Unless otherwise provided by a Bankruptcy Court order, any Proofs of
24
Claim asserting
25 26 27 28
Claims arising from the rejection or repudiation or the Debtors' executory contracts and
unexpired leases pursuant to the Plan or otherwise must be Filed with the Claims and
Solicitation Agent 110 later than the Rejection Damages Claim Deadline. Any Proofs of
Claim
arising from the rejection or repudiation of the Debtors' executory contracts or unexpired
leases that are not timely Filed by the Rejection Damages Claim Deadline shall be disallowed
automatically, forever balTed from assertion, and shall not be enforceable against any
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Rcorg:mi7.cd Debtor without the need for any objection by the Reorganized Debtors or further
2
3
4
5
notice to or action, order, or approval of the Bankruptcy Court, and any Claim arising out of he rejection or repudiation of the executory contract or unexpired lease shall be deemed fully satisfied, released, and discharged, nOl\Viihstanding anything in the Schedules or a Proof of Claim 10 the contrary_ All Allowed Claims arising from the rejection or repudiation of the Debtors' executory contracts and unexpired leases shall be classified as General Unsecured
CI:iims.
5. Intercomoanv Contracts, Contracts. and Leases Entered Into After the Petition
6
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Date
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Intercompany Contracts, contracts, and leases entered into after the Petition Date by any Debtor, and any executory contracts and unexpired leases assumed by any Debtor, may be business. performed by the applicable Reorganized Debtor in the ordinary course of
6. Home Sales
All pending home sale contracts shall be assumed by the applicable Reorganized
Debtor.
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performed in the ordinary course of
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All eligible prepetition home sale contracts with one-year warranty obligations shall be the Reorganized Debtors. Upon the Effective business of Date, any rcmaining warranty obligations that are to be assumed by the Reorganized Debtors, which shall only be assumed with the consent of the First Lien Steering Committee, shall be transferred to the Reorganized Debtors. Warranty obligations that are not expressly assumed
shall be rejected and treated as General Unsecured Claims.
8. Modification of Executorv Contracls and Unexpired Leases Containing EQuity
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Ownership Restrictions
20
21
22
23 24 25
All executory contracts and unexpired leases to bc assumed, or conditionally assumed, the Bankrptcy Code shall be deemed so assumed, or so conditionally assumed, without giving effect to any provisions contained in such executory contracts or unexpired leases restricting the change in control or ownership interest composition of any or all of the Debtors, and upon the Effective Dale (I) any such restrictions shall be deemed of no further force and effect and (2) any breaches that may arisc
under the Plan pursuant to sections 365 and 1123 of
thereunder as a result of Confirmation or Consummation shall be deemed waived by the

applicable non-Debtor counterpart.
9. Modifications. Amendments. Supplements. Restatements. or Other Agreements
26
27 28
Unless otherwise provided in the Plan, each executory contract or unexpired lease that is assumed shall include all modifications, amendments, supplements, restatements, or other agreements that in any manner affect such executory contract or unexpired lease, and all executory contracts and unexpired leases related thereto, if any, including all casements, licenses, permits, rights, privileges, immunities, options, fights of first refusal, and any other
54
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interests, unless any orille foregoing agreements has been previously rejected or repudiated or is rejected or repudiated under the Plan.
, ,
4
5
Modifications, amendments, supplements, and restatements to prepctltion executory contracts and unexpired leases 1hat have been executed by the Debtors during the Chapter I i Cases shall not be deeme to alter the prepetition nature of the executory contract or unexpired lease, or the validity, priority, or amount of any Claims that may arise in connection therewith.
10. Reservation of Rights
6 7
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Neither the exclusion nor inclusion of any contract or lease on Exhibit N hereto, nor anything contained in the Plan, shall coiistitute aii admission by the Debtors or the First Lien Steering Committee that any such contract or lease is in fact an executory contract or
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unexpired lease or that any Reorganized Debtor has any liability thereunder. If there is a dispute regarding whether a contract or lease is or was executory or unexpired at the time of assumption or rejection, the Debtors, with the consent of the First Lien Steering Committee,
or Reorganized Debtors shall have thirty days following entry of a Final Order resolving such dispute 10 aller their Ireatmeiil of such contract or lease.
II. Nonoccurrence of Effective Dale
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In the cvent that the Effective Date docs not occur, the Bankruptcy Court shall retain jurisdiction with respect to any consensual request to extend the deadline for assuming or
rejecting unexpired leases pursuant to section 365(d)(4) of
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the Bankruptcy Code.
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H. Procedures for Resolving Disputed Claims

i. Allowance of
17 18
19
Claims
After the Effective Date, each Reorganized Debtor shall have and retain any and all rights and defenses such Debtor had with respect to any Claim immediately prior to the
Effective Date, including the Causes of Action referenced in Article iv of
the Plan.
20
21
2. Claims Administration Responsibilities
22 23 24 25
Except as otherwise specitieally provided in the Plan, after the EITective Date, the
Reorganized Debtors shall have the sale authority: (I) to Pile, withdraw, or litigate to
judgment, objections to Claims; (2) to settle or compromise any Disputed Claim without any
further notice to or action, order, or approval by the Bankruptcy Court; and (3) to administer
and adjust the Claims Register to reflect any such settlements or compromises without any further notice to or action, order, or approval by the Bankruptcy Court.
3. Estimation of
26
27 28
Claims
Before or after the Effective Date, the First Lien Steering Committee or the
Reorganized Debtors, as applicable, may (but are not required to) at any time request that the Bankruptcy Court estimate any Disputed Claim that is contingent or unliquidated pursuant to
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section S02() of the Bankruptcy Code for any reason, regardless of whether any part
2
.,
previously has objected to such Claim or whether the Bankruptcy Court has ruled on any such
4
5
objection, and ihe Bankruptcy Court shall retain jurisdiction to estimate any such Claim, including during the litigation of any objection to any Claim or during the appeal relating to such objection. NOlwithstamling any provision otherwise in the Plan, a Claim that has been expunged from the Claims Register, but that either is subject to appeal or has not been the subject of a Final Order, shall be deemed to be estimated at zero dollars, unless otherwise
ordered by the Bankruptcy Court. In the event that the Bankruptcy Court estimates any
6 7
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Q
contingent or unliquidaied Claim, that estimated amount shall constitute a maximum
limitation on such Claim for all purposes under the Plan (including for purposes of
distributions), and the relevant Reorganized Debtor may elect 10 pursue any supplemental
proceedings to object to any ultimate distribUlion on such Claim. Notwithstanding section
502(j) of the Bankruptcy Code, in no event shall any Holder of a Claim that has been
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the Bankruptcy Code or otherwise be entitled to seek reconsideration or such estimation unless such Holder has Filed a motion requesting the right to seck siich reconsideration on or before twenty days after the date on which such Claim is estimated.
estimated pursuant to section 502(c) of
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4. Adjustment to Claims Without Obieetion
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Any Claim that has been paid or satislied, or any Claim that has been amended or
superseded, may be adjusted or expunged on the Claims Register by the Reorganized Debtors without a Claims objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court. Beginning on the end of the first full calendar
quarter ihat is at least nincty days after the EtTective Date, the Reorganized Debtors shall
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publish and Pile every calendar quarter a list or all Claims that have been paid, satisfied,
amended, or superseded during such prior ealcndar quarter.
5. Time to File Obiections to Claims
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Any objections to Claims shall be Filed on or before the later of (I) the applicable Claims Objection Deadline and (2) such date as may be fixed by the Bankruptcy Court, after noiice and a hearing, wheiher fixed before or afler the dale that is one year after the Effective
22
23
Date. Notwithstanding the foregoing, the first Lien Steering Committee, any First Lien Lender and/or the Reorganized Debtors shall have until sixty days following the Effective Date to object to the Proors of Claim fied by the Rhodes Entities in the Debtors' chapter I I
cases (provided, that, such objections shall not seek to subordinate the Rhodes Entities
Claims, if Allowed).
6. Disallowance of Claims
24
25
26
27 28
Except as oiherwise set forth in the Plan, any Claims held by an Entity from which properLy is recoverable under section 542, 543. 550, or 553 of the Bankrptcy Code or that is a transferee of a transfer avoidable under section 522(f), 522(h), 544, 545, 547, 548, 549, or 724(a) of the Bankruptcy Code, shall be deemed disallowed pursuant to section 502(d) of the Bankruptcy Code, and Holders of such Claims may not receive any distributions on account of such Claims until such iime as such Causes of Action against thaI Entity have been settled
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2
3
or a Bankrupty Court order with respect thereto has been entered and all sums due, if any, to the Debtors by that Entity have been turned over or paid to the Reorganized Debtors or the Litigation Trust, as applicable.
EXCEPT AS OTHERWISE AGREED. ANY AND ALL PROOFS OF CLA1M F1LED
4
5
AFTER THE BAR DATE SlIALL BE DEEMED DlSALLOWED AND EXPUNGED AS OF THE EFFECTlVE DATE W1THOUT ANY FURTHER NOT1CE TO OR ACTlON, ORDER, OR APPROVAL OF THE BANKRUPTCY COURT, AND HOLDERS OF SUCH CLAIMS
6
7
E
MAY NOT RECEIVE ANY DlSTRIBUTIONS ON ACCOUNT OF SUCH CLAIMS,

UNLESS ON OR BEFORE TlIE CONFIRMAllON HEARING SUCH LATE CLA1M HAS BEEN DEEMED TIMELY FILED BY A BANKRUPTCY COURT ORDER.
7. Offer of Judgment
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The Reorganized Debtors shall be authorized to serve upon a Holder or a Claim an offer to allow judgment to be taken on account of such Claim, and, pursuant to Bankruptcy
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Rules 7068 and 9014, Federal Rule or Civil Procedure 68 shall apply to such offer of judgment. To the extent the Holder of a Claim must pay the costs incurred by the
Reorganized Debtors after the making of such olTer, the Reorganized Debtors shall be entitled
12
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to setoff such amounts against the amount or any distribution to be paid to such Holder
without any further notice to or action, order, or approval of
14
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8. Amendments to Claims
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On or after the Effective Date, except as expressly authorized in the Plan, a Claim may not be Filed or amended without the prior auihori:7..tion of the Bankruptcy Court or the Reorganized Debtors, and any such new or amended Claim Filed shall be deemed disallowed in full and expunged without any further action.
i. Provisions Governing Distributions
I. Total Enterprise Value for Purposes of
19
Distributions Under the Plan
20
21
Distributions of Newco Equity Interests to Holders of Allowed First Lien Lender

Secured Claims shall be based upon, among other things, the Newco Total Enterprise Value of
22 23 24 25
$99.6 millon. For purposes of distribution, ihe Newco Equity Interests shall be deemed to have the value assigned to them based upon, among other things, the Newco Total Enterprise
Value, regardless of
the date of distribution.
2. Distributions on Account of Claims Allowed as ofthe Effective Date
Except as otherwise provided in the Plan, a Final Order, or as agreed to by the First
Lien Steering Committee, iniiial distributions under the Plan on account of
26
27
28
Claims Allowed on or before the Effective Date shall be made on the Distribution Date; provided. however. that (I) Allowed Administrative Claims with respect to liabilities incurred by the Debtors in the ordinary course of business during the Chapter II Cases or assumed by the Debtors prior to
wiih the terms and conditions of any controllng agreements, course of dealing, course of
the EfTective Date shall be paid or penormed in ihe ordinary course olbusiness in accordance
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2
3
business, or industry practice and (2) Allowed Priority Tax Claims, unless otherwise agreed, shall be paid in full in Cash on the Distribution Date or over a five-year period as provided in section i I 29(a)(9)(C) or the Bankruptcy Code with annual interest provided by applicable
non-bankruptcy law.
3.
4
5
Distributions on Account of Claims Allowed After the Effective Date

a.
Payments and Distributions on Disputed Claims
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Except as otherwise provided in the Plan, a Final Order, or as agreed to by the First Lien Steering Committee prior to the Effective Date or the Reorganized Debtors after the Ellctive Date, distributions under the Plan on account of Disputed Claims that become Allowed after the Effective Date shall be made on the Periodic Distribution Date that is at
9
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ordinary course of business during the Chapter i 1 Cases or assumed by the Debtors on or before ihe Effective Date that become Allowed after the Effective Date shall be paid or performed in the ordinary course of business in accordance with the terms and conditions of
dealing, course of business, or industry practice and (b) Disputed Priority Tax Claims that become Allowed Priority Tax Claims after the Effective Date, unless otherwise agreed, shall be paid in full in Cash on the Periodic Distribution Date that is at least thirty days after the Disputed Claim becomes an Allowed Claim or over a fivethe Bankruptcy Code with annual interest year period as provided in section 1 I 29(a)(9)(C) of any controlling agreements, course of
least thirty days after the Disputed Claim becomes an Allowed Claim; orovided. however, that (a) Disputed Administrative Claims with respect to liabilities incurred by the Debtors in the
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provided by applicable non-bankruptcy law.

b. Special Rules for Distributions to Holders ofDispuicd Claims
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Notwithstanding any provision otherwise in the Plan and except as otherwise agreed by the relevant parties: (a) no partial payments and no partial distributions shall be made with respect to a Disputed Claim until all such disputes in connection with such Disputed Claim have been resolved by settlement or Final Order and (b) any Entity that holds both an Allowed
Claim and a Disputed Claim shall not receive any distribution on the AHowed Claim unless
19
20
21
and until all objections to the Disputed Claim have been resolved by seulcment or Final Order and the Claim has been Allowed. In the event that there are Disputed Claims requiring adjudication and resolution, the Reorganized Debtors shall establish appropriate reserves for
potential payment of such Claims or Interests pursuant to Article VII.C.3 of
the Plan. Subject
22
23
to Article IX.A.5 of the Plan, all distrihutions made pursuant to the Plan on account of an Allowed Claim shall be made together with any dividends, payments, or other distributions
made on account of, as well as any obligations arising from, the distributed property as if such Allowed Claim had been an Allowed Claim on the dates distributions were previously made to Holders of Allowed Claims included in the applicable Class.
c.
Reserve of
24 25
26
27 28
Litigation Trust Interests
On the Effective Date, the Reorganized Debtors shall maintain in reserve Litigation Trust Interests for disLribution to Holders of Disputed Claims that become Allowed after the Effective Date. As Disputed Claims are Allowed, the Distribution Agent shall distribute, in
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accordance with the terms of the Plan, Litigation Tnisl Interests to Holders of Allowed
2 3
Claims, and the Disputed Claims Reserve shall be adjusted. lnc Distribution Agent shall
4
5
withhold in the Disputed Claims Reserve any payments or other distributions made on account ot~ as well as any obligations arising from, the Litigation Trust Interests initially withheld in the Disputed Claims Reserve, to the extent that such Litigation Trust Interests continue to be withheld in the Disputed Claims Reserve at the time such distributions are
made or
such obligations arise, and such payments or other distributions shall be held for the benefit of Holders of Disputed Claims whose Claims, if Allowed, are entitled to distributions
under the Plan. The Reorganized Debtors may (but are not required to) request estimation for any Disputed Claim that is contingent or unliquidated.
6 7
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Notwithstanding anything in (he applicable Holder's Proof of Claim or otherwise to

8
the contrary, the Holder of a Claim shall not be entitled to receive or recover a distribution
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under the Plan on account of a Claim in excess of the lesser of the amount: (a) stated in the Holder's Proof of Claim, ifany, as of the Distribution Record Date, plus interest thereon to the
extent provided for by the Plan; (b) if as of
the Claim is denominated as contingent or unliquidated
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the Distribution Record Date, the amount that the Reorganized Debtors elect to withhold on account of such Claim in the Disputed Claims Reserve, or such other amount as may be estimated by the Bankruptcy Court prior to the Confirmation Hearing; or (c) if a Claim has been estimated, the amount deposited in the Disputed Claim Reserve to satisfy such Claim after such estimation.
4. Deliverv of Distributions a. Record Date tor Distributions
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On the Distribution Record Date, the Claims Register shall be closed and any party responsible for making distributions shall be authorized and entitled to recognize only those
record Holders listed on the Claims Register as of the close of business on the Distribution
..
20
21
Record Date. Notwithstanding the foregoing, if a Claim is transferred twenty or fewer days before the Distribution Record Date, the Distribution Agent shall make distributions to the transferee only to the extent practical and in any event only if the relevant transfer form contains an unconditional and explicit certification and waiver of any objecton to the transfer
by the transferor.
b. Distribution Agent
22
23
24
The Distribution Agent shall make all distributions required under the Plan, except that
distributions to Holders of Allowed Claims governed by a separate agreement and

administered by a Servicer shall be deposited with the appropriate Servicer. at which time
25 26 27 28
such distributions shall be deemed complete, and the Servicer shaH deliver such distributions in accordance with the Plan and the terms ofthe governing agreement.
c. Delivery of Distributions in General
Except as otherwise provided in the Plan, and notwithstanding any authority to the
contrary, distributions to Holders of Allowed Claims shall be made to Holders of record as of the Distribution Record Date by the Distribution Agent or a Servicer, as appropriate: (a) in
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2 3
accordance with Federal Rule or Civil Procedure 4, as modified and made applicable by Bankruptcy Rule 7004; (b) to the signatory set forth on any of the Proofs of Claim Filed by
such Holder or other reprCSCfllativc identified therein (or at the last known addresses of such
Holder itno ProotofClaim is Filed or rihe Debtors have been notified in writing ora change of address); (c) at the addresses set forth in any wltten notices of address changes delivered to
the Distribution Agent after the date of any related Proof of Claim; Cd) at the addresses
4
5
renected in the Schedules if no Proof of Claim has been Filed and ihe Distribution Agent has not received a written notice of a change of address; or (e) on any counsel that has appeared in
the Chapter II Cases on the Holder's behalf. Except as otherwise provided in the Plan,
6 7
E E
distributions under the Plan on account of Allowed Claims shalt not be subject to levy, garnishment, attachment, or like legal process, so that each Holder of an Allowed Claim shall
"
have and receive the benefit of the distributions in the manner set forth in the Plan. The Debtors, the First Lien Steering Committee, the Reorganized Debtors, and the Distribution
Agent, as applicable, shall not incur any liability whatsoever on account of any distributions
under he Plan.
d. Accrual ofDislributions and Other Rights
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For purposes of determining the accrual of distributions or other rights after the
Effective Date, the Ncwco Equity Interests and the Litigation Trust Interests, as applicable, shall be dcemed distributed as of the Effective Oate regardless of the dale on which they arc actually issued, dated, authenticated, or distributed even though the Reorganized Debtors shall the Newco not make any such distributions or distribute such other rights until distributions of Equity Interests and the Litigation Trust Interests, as applicable, actually take place.
e. Allocation Between Principal and Accrued Interest
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Except as otherwise provided in the Plan, distributions on account of Allowed Claims shall be treated as allocated first to principal and thereafter to any interest.
f. Compliance Matters
18 19
20
21
22 23 24
25
In connection with the Plan, to the extent applicable, the Reorganized Debtors and the Distribution Agent shall comply with all tax withholding and reporting requirements imposed on them by any Governmental Unit, and all distributions pursuant to the Plan shall be subject to such withholding and reporting requirements. Notwithstanding any provision in the Plan to the contrary, the Reorganized Debtors and the Distribution Agent shall be authorized to take all actions necessary or appropriate to comply with such withholding and reporting requirements, including liquidating a portion of the distribution to be made under the Plan to generate suffcient funds to pay applicable withholding taxes, withholding distributions pending receipt of information necessary to facilitate such distributions, or establishing any
other mechanisms they believe are reasonable and appropriate. The Reorganized Debtors reserve the right to allocate all distributions madc under the Plan in compliance with all
26 27
28
applicable wage garnishments, alimony, child support, and other spousal awards, liens, and encumbrances.
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g. rraciional, De Minimis, Undeliverable, and Unclaimed Distributions
2
(i) Fractional Distributions
3
Notwithstanding any oiher provision of the Plan to the contrary, payments of fractions
4
5
of shares of Ncwco Equity Interests or fractions of Litigation Trust Interests shall not be
made. The Distribution Agent shall not be required to make distributions or payments of
fraciions of Newco Equity Interests, Litigation Trust Interests or dollars. Whenever any
payment of Cash ora fraction of a dollar or payment of a fraction of New co Equity Interests or fraction of Litigation Trust Interests pursuant to the Plan would otherwise be required, the actual payment shall reflect a rounding of such fraction to the nearest whole dollar (up or down), with half dollars, half Newco Equity Interests or half Litigation Trust Interests or less being rounded down.
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(ii) Undeliverable Distributions
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If any distribution to a I-Iolder of an Allowed Claim is returned to a Distribution Agent
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as undeliverable, no further distributions shall be made to such Holder unless and until such Distribution Agent is notificd in writing of such Holder's then-current address, at whieh time all currently due missed distributions shall be made to such Holder on the next Periodic
J)
14
15
Distribution Date. Undeliverable distributions shall remain in the possession of the

Reorganized Debtors until such time as a distribution becomes deliverable, or such distribution reverts to the Reorganized Debtors pursuant to Article VII.D.7.c of the Plan, and shall not be supplemcnted with any interest, dividends, or other accruals of any kind.
(iii) Reversion
16 17 18 19
g .,
,. -
;-
20
21
Any distribution under the Plan that is an Unclaimed Distribution for a period of six months after distribution shall be deemcd unclaimed property under section 347(b) of the Bankruptcy Code and siich Unclaimed Distribution shall revest in the Reorganized Debtors and, to the extent such Unclaimed Distribution is a distribution of Newco Equity Interests, such Newco Equity Interests shall be deemed cancelled. Upon such revesting, the Claim of any Holder or its succcssors with rcspccl to such properly shall be cancelled, discharged, and
forever barred notwithstanding any applicable federal or state escheat, abandoned, or

unclaimed property laws to the contrary. The provisions of the Plan regarding undeliverable distributions and Unclaimed Distributions shall apply with equal force to distributions that are issued by the Debtors, made pursuant to any indenture or Certificate (but only with respect to the initial distribution by the Serviccr to Holders that are entitled to be recognized under the relevant indenture or Certificate and not with respect to Entities to whom those recognized Holders distribute), notwithstanding any provision in such indenture or Certificate to the contrary and notwithstanding any otherwise applicable federal or state escheat, abandoned, or
unclaimed property law.
h. Manner of Payment Pursuant to the Plan
22 23 24
25
26 27 28
Any payment in Cash to be made pursuant to the Plan shall be made at the election of the Reorganized Debtors by check or by wire transfer. Checks issued by the Distribution Agcnt or applicable Servicer on account of Allowed Claims shall be null and void if not
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presented within 120 days after issuance, but may be requested (0 be reissued until the
2
3
distribution rcvesls in the Reorganized Debtors pursuant to Article VIl.D.7.c of
the Plan.
i. Surrender of Cancelled Instruments or Securities
4 5
On ihe Effective Date or as soon as reasonably practicable thereafter, each Holder of a
6
7
E
Certificate shall surrender such Certificate to the Distribution Agent or a Scrvicer (to the extent the relevant Claim or Interest is governed by an agreement and administered by a Servicer). Such Certificate shall be cancelled solely with respect to the Debtors, and such
cancellation shall not alter the obligations or rights of Clny non-Debtor third parties vis--vis
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10
one another with respect to such Certificate. No distribution of property pursuant to the Plan shall be made to or on behalf of any such Holder that is a Holder of a Claim unless and until such Certificate is received by the Distribution Agent or the Servicer or the unavailabilty of such Certificate is reasonably established to the satisfaction of the Distribution Agent or the
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Servicer. Any Holder of a Claim who fails to surrender or cause to be surrendered such
Certificate or fails to execute and delver an affdavit of loss and indemnity acceptable to the Distribution Agent or the Servicer prior to the first anniversary of the Effective Date, shall have its Claim discharged with no further aclion, be forever barred from asserting any such Claim against the relevant Reorganized Debtor or its property, be deemed to have forfeited all rights and Claims with respect to such Certificate, and not participate in any distribution under
the Plan; rurilicnnore, all property with respect to such forfeited distributions, including any
ii
12
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dividends or interest attributable thereto, shall revert to the Reorganized Debtors,
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notwithstanding any federal or state escheat, abandoned, or unclaimed property law to the
contrary.
5. Claims Puid or Payable by Third Parties
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Cl. Claims Paid by Third Parties
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The Claims and Solicitation Agent shall reduce in full a Claim, and such Claim shall
be disallowed without a Claims objection having to be Filed and without any further notice to
20
21
or action, order, or approval of the Bankruptcy Court, to the extent that the Holder of such Claim receives payment in full on account of such Claim from a party i.at is not a Debtor or
Reorganized Debtor. Further, to the extent a Holder of a Claim receives a distribution on
account of such Claim and receives payment rrom a party that is not a Debtor or a
Reorganized Debtor on account of such Claim, such Holder shall, within two weeks of receipt thereof, repay or return the distribution to the applicable Reorganized Debtor, to the extent the
22
23 24 25
Holder's total recovery on account of such Claim from the third part and under the Plan
the date of any such distribution under the Plan. The failure of such Holder to timely repay or return such distribuiion shall result in the Holder owing the applicable Reorganized Debtor annualized interest at the Federal Judgment Rate on
exceeds the amount of such Claim as of
such amount owed for each Business Day after the two-week grace period specified above
26 27
28
until the amount is repaid.
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b. Claims Payable by Insurance
2
3
Holders of Insured Claims thai arc covered by the Debtors' insurance policies shall
seek payment of such Claims from applicable insurance policies, provided that ihe
Reorganized Debtors shall have no obligation 10 pay any amounts in respect of pre-petition
4
5
deduciiblcs or self insured retention amounts. Allowed Insured Claim amounts in excess or available insurance shall be treated as General Unsecured Claims. No distributions under the
PLi111 shall be made on account of an AlIowed Claim that is payable pursuant to one of the
6 7
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Debtors' insurance policies until the Holdcr of such Allowed Claim has exhausted all remedies
with respcct to such insurance policy. To the extent that one or more of the Debtors' insurers
agrees to satisfy in full a Claim (if and to the extent adjudicated by a court of competent
jurisdiction), then immediately upon such insurers' agreement, such Claim may be expunged
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to the extent of any agreed upon satisfaction on the Claims Register by the Claims and
Solicitation Agent without a Claim5 objection having to be Filcd and without any further
notice to or action, order, or approval of
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c. Applicability of Insurance Policies
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Distributions to Holders of Allowed Claims shall be in accordance with the provisions of any applicable insurance policy. Except for Claims and Causes of Action released under
the Plan to the Released Parties and Exculpated Parties, nothing contained in the Plan shall
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constitute or be deemed a waiver of any Cause of Action that the Debtors or any Entity may hold against any other Entity, including insurers under any policies of insurance, nor shall anything contained herein constitute or be deemed a waiver by such insurers of any defenses, including coverage defenses, held by such insurers.
6. Payment 0($1.5 Millon to First Len Lenders
The $1,500,000 in Cash payable to the Holders of
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from the proceeds of
First Lien Lender Secured Claims their Collateral pursuant to Article II.B. L shall be paid as follows: (i)
19
$400,000 on the Effective Date and (ii) the remaining up to $1,100,000 in five quarterly
installments of $220,000 beginning 011 the first day of the fourth month following the
20
21
Ellective Date; providcd, that the Reorganized Debtors shull have the right to defer up to two
quarterly payments, with such deferred amount(s) to be paid on the next quarterly payment date (and the amount scheduled to be paid on such quarterly payment date deferred for
22 23
another quarter; provided that the full $1.5 milion payment shall be made to the Holders of First Lien Lender Secured Claims within eighteen months of the Effective Date). Notwithstanding the foregoing, in the event that, as of the Effective Dale, the debt on the Rhodes Ranch Golf Course has been refinanced on terms and conditions acceptable to the
Fir51 Lien Steering Committee and the Reorganized Debtors have unrestricted cash of at leasl
24
25
26
27 28
$3.5 million (after taking into account any amounts required to be paid to reduce the amount of third party debt on the Rhodes Ranch Golf Course below $5.9 millon and without taking into consideration amounts that may Imvc been borrowed under any exit facility unless such amounts were used to pay-down debt on the Rhodes Ranch Golf Course, in which case any amouiits used to pay-down debt on the Rhodes Ranch Golf Course wil be deemed to reduce unrestricted cash on a dollar for dollar basis), then the iniiial $400,000 payment to the First Licn Lenders will be increased as follows: (i) if unrestricted cash (as calculated above) is
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equal to or grctcr than $3.5 million builess ihan $4.5 million, the $400.000 payment shall be increased 10 $700,000; (ii) if unrestricted cash (as calculated above) is equal to or greater than
$4.5 million but less than $5.5 million, the $400,000 payment shall be increased to
$1,000,000; and (iii) funrestricted cash (as calculated above) is equal to or greater than $5.5
million, the $400,000 payment shall be increased to $1.5 million, in each case with the subsequent quarterly installments reduced by a corresponding amount to provide for equal payments over the payout periods discussed above. In no event shall the aggregate Cash
payments to the First Lien Lenders exceed $1.5 millon.
7. General Unsecured Chiims Purchase
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The First Lien Lenders have agreed to use the aggregate $1.5 million Cash payment provided to them under the Plan to acquire those Gcneral Unsecured Claims of the Creditors listed on the schedule attached hereto as Exhibii H (the "Claim Purchase Schedule") to the extent such Claims remain out'itanding as of the Effective Date; provided that (i) each Holder
of a Claim so Iisled is the original Holder of such Claim and (ii) such Claim(s) is ultimately Allowed.
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The Claim Purchase Schedule shall delineate whether such Claims are Allowed or Disputed and Claims may be purchased only to the extent ultimately Allowed. Claims included on the Claim Purchase Schedule shall be purchased (subject to the conditions contained in Article Vll.G of the Plan) for the amounts listed for such Claims under the heading "Allowed Amount (Claim Purchase Amount)" on the Claim Purchase Schedule. Payments on account of the purchased Allowed Claims listed on the Claim Purchase Schedule shall be made on the same time frame as the First Lien Lenders receive their allocable Cash payments under Article VJI.F of the Piau, with the First Lien Steering Committee determining the order in whieh Claims are purchased (which, in the first inshmce, shall be the order in whieh they are listed on the Claim Purchase Schedule).
For the avoidance of doubt, any claim listed on the Claim Purchase Schedule that is disputed, wil not be purchased until allowed and only to the extent the aggregate purchase price for all
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19
claims purchased inclusive of such newly allowed claims are equal 10 or less than $1.5
million. Claims subsequently allowed wil be purchased in the order in which they are
20
21
22
23 24 25 26
allowed. The First Lien Lenders reserve the right to modify the Claim Purchase Schedule prior to or subsequent to the Effective Date without further Court order; provided, that a Creditor may be rcmoved from the Claim Purchase Schedule only to the extent that (i) its Claims are not ultimately Allowed, (ii) its Claims are subject to setolT (other than under
section 547 or the Bankruptcy Code); (iii) such Crediior sells its Claim to a part other than
the First Lien Lenders pursuant to Article Vil.G of the Plan or (iv) ihe full $1.5 milion has been used to purchase other Allowcd Claims on the Claim Purchase Schedule before such
Creditor's Claim is Allowed.
The First Lien Lenders shall be subrogated to the rights of Creditors whose Claims are
purchased hereunder and any distributions otherwise allocable to the Holders of Claims purchased by the First Lien Lenders shall be distributed pro rata to the Holders of First Lien
Lender Secured Claims. The Reorganized Debtors shall be authorized to make the foregoing
27
28
payments to the Creditors on the Claim Purchase Schedule on behalf otthe First Lien Lenders with a corresponding reduction in the $1.5 millon payable to the First Lien Lenders. Under
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3 4 5
no circumstances shull the First Lien Lenders (either directly or through ihe Reorganized Debtors) pay in excess of $ i.s million in the aggregntc for the Claims on ihe Claim Purchase Schedule. The First Lien Steering Commiucc may, in its sole discreiion (but after
consultation with the Debtors and the Creditors' CommiUce), add Claims to the Claim Purchase Schedule i( any lime; provided that ihe amount to be paid for all such Claims lisied on the Claim Purchase Schedule does not exceed $1.5 million in ihe aggregate regardless of the total amount of Allowed Claims reflecled on the Claim Purchase Schedule. In the evenl
6
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that Allowed Claims in excess of $ i.5 millon arc listed on the Claim Purchase Schedule, Holdcrs of Claims listed on the Claim Purchase Schedule shall have the right to accept or
decline payment of
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less than i 00 cents on account of heir Claims from the First Lien Lenders. No Creditor listed on the Claim Purchase Schedule shall receive in excess or 100 cents on the dollar for its Claim, and the Reorganized Debtors shall not pursue Claims under Bankruptcy Code section 547 against any Creditor whose Claim is purchased in accordance with Article
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Vii-G of the Plan. The Plan shall serve as the notice of transfer of Claim required under Bankruptcy Rule 3001(c). If no objections are received by the Voting Deadline, the Pirst
Lien Lenders shall be authorized upon the Effective Date to effectuate the foregoing Claim
purchase transactions.
8. Claims Trading and Gifting are Authorized Under Applicable Law
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As described in Article VILG. or the Plan, the Plan provides that Holders of First Lien
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Lender Secured Claims wil receive, among other things, $1.5 millon in Cash from the
proceeds of their Collateral
14
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to bc uscd to purchase those General Unsecured Claims listed on
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the Claim Purchase Schedule. The First Lien Steering Committee believes that the purchase of Claims listed on thc Claim Purchase Schedule constitutes pcrmissible claims trading under
the Bankruptcy Code, the Bankruptcy Rules and applicable case law. As a general rule, neither the Bankruptcy Code nor the Bankruptcy Rules prohibit the purchase or sale of claims.
See Offcial Unsecured Creditors' Camm. v. Stem (In re SPM Mfg. CO/p.), 984 F.2d 1305,
.,
1314 (1 st Cir. 1993) (noting that "neither the (Bankruptcy Code) nor the (Bankruptcy Rules) prohibit or discourage creditors from receiving cash from non-debtors in exchange for their bankruptcy courts in the claims"). In addition, Bankruptcy Rule 3001(e)(2) limits the role of claims transfer process to resolving disputes regarding transfers of claims. See Resurgent
Capital Servs. v. Burnett (In re Burnett), 306 .R. 313, 319 (B.A.P. 9th Cir. 2004) (explaining
20
21
that Bankruptcy Rule 3001(e)(2) was amended to limit the bankruptcy court's role to
adjudicating disputes over transfers of claims); Viking Assocs., L.L.c. v. Drewes (In re Olson),
22
23
120 F.3d 98, 102 (8th Cir. 1997) (noting that "rw)herc there is no dispute rwith respect to a claims transfer), there is no longer any role for the court"). For purposes of Bankrptcy Rule
3001 (e)(2), a "dispute" regarding a transfer of a claim exists only if
24 25 26 27 28
the alleged transferor files an objection to the transfer. See In re Olson, 120 F.3d at 102. Bankruptcy Rule 3001(c)(2) docs not rcquire the parties to a claims transfer to disclose the terms of such transfer to the bankruptcy court. See In re Burneii, 306 B.R. at 318. Finally, there is no requirement in the
Bankruptcy Codc or the Bankruptcy Rules that a non-debtor that purchases claims from one member of a class of creditors must seek to purchase the claims of all of the members or that class.
Based on the forcgoing, thc First Lien Steering Committee believes that the purchase of the Claims listed on the Claim Purchase Schedule by the Holders of First Lien Lender
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Secured Claims is permissible under the Bankruptcy Code and the Bankniptcy Rules.
2 3
Moreover, the First Lien Steering Committee believes thai the First Lien Lenders have the discretion to purchase only a portion of the total number of General Unsecured Claims. Finally, absent an objection to the purchase of a Claim, the First Lien Steering Committee
submits that ihe Claim purchase procedures contemplated by the Plan do not require
Bankruptcy Court approval and that the First Lien Lenders are authorized 10 implement the
Claim purchase procedures in accordance with Article VIL.G of
4
5
the Plan.
6
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In the alternative, the First Lien Steering Committee believei- that the purchase of
General Unsecured Claims described in Article VILF. and VII.G of
the Plan is consistent with
ih ankrupic)' Code and applicable case law because the Holders of First Lien Lender Secured Claims arc permitted to share the distributions they receive under the Plan with
Holders of junior Claims if they wish to du so. Courts have recognized that holders of
secured claims are free to grant all or a portion of
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the distribution they receive under a plan of reorganization on account of their secured claims to holders of junior claims. See In re SPM Mffl. Co., 984 F.2d at 1313; In re Union Fin. Servs. Group, Inc., 303 B.R. 390, 422 (Bankr.
E.D. Mo. 2003); In re Genesis Healih Ventures, Inc., 266 B.R. 591, 602 (Bankr. D. DeL. 2001).
II
12
13
In addition, courts have concluded that there is no unfair discrimination under the Bankruptcy
Code where holders of secured claims share the distribution they receive under a plan of
reorganization with members of ajunior class but not other holders of claims that are equal in
priority 10 such junior class of claims. See In re Union Fin. Servs. Group, liiC., 303 B.R. at
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422; In re Genesis Health Ventures, Inc., 266 B.R. at 602. This is particularly true where continued relations with certain junior creditors are important to the future business of a
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reorganized debtor. See In re Union Fin. Servs., Inc. 303 RR. at 422. In light of the
foregoing, the First Lien Steering Committee believes that the Holders of First Lien Lender Secured Claims should be authorized to gift the $1.5 millon in Cash they wil receive under
the Plan to Holders of those General Unsecured Claims listed on the Claim Purchase
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As the Plan provides for all General Unsecured Claims to receive thc same treatment
under the Plan, the First Lien Lenders are authorized under applicable law to purchase anyone
19
20
21
22 23
or more Claims without Bankruptcy Court approvaL. In the alternative, the purchase of those Claims listed on the Claim Purchase Schedule constitutes a permissible gift and should be authorized by the Bankruptcy Court. In addition, the payment of the Second Lien Agent's legal lees i-imilarly constitutes a permissible gif from the First Lien Lenders to the Second Lien Lenders and should be authorized by the Bankruptcy Court.
J. Erreet of Confirmation of
the Plan
In teres Is
24
25
i. Dischar~e of Claims and 'lrmination of
Pursuant to section iI41(d) of the Bankruptcy Code, and except as otherwise
26 27
28
specifically provided in the Plan, the distributions, rghts, and treatment that are provided in the Plan shall be in complete satisfaction, dischargc, and release, effcctive as of the Effective
Date, of Claims, Interests, and Causes of Action of any nature whatsoever, including any intcrcst accrued on Claims or Interests from and after the Petition Date, whether known or
unknown. against, liabilities of, Liens on, obligations of, rights against, and Interests in, the
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3
Debtors or any of their assets or properties, regardless of whether any property shall have been distributed or retained pursuant to the Plan on account of such Claims and Jnterests, including demands, liabilities, and Causes of Action that arose before the Effective Date, any liability (including withdrawal liability) to the extent such Claims or Interests relate to services performed by employees of the Debtors prior 10 the Effective Dale and that arise
from a termination of any employee, regardless of
4
5
whether such termination occurred prior to
6
7
or afrer the Effective Date, any contingent or non-contingent liability on account of representations or warranties issued on or before the Effective Date, and all debts of the kind specified in sections 502(g), 502(h), or S02(i) of the Bankruptcy Code, in each case whether or not: (I) a Proof of Claim or Interest based upon such debt, right, or Interest is Filed or deemed Filed pursuant to section 50 I of the Bankruptcy Code; (2) a Claim or Interest based
upon such debt, right, or Interest is Allowed pursuant to section 502 of the Bankruptcy Code;
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or (3) the Holder of such a Claim or Interest has accepted the Plan. Any default by the
Debtors with respect to any Claim or Interest that existed immediately prior to or on account
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of the filing of ihe Chapter I i Cases shall be deemed Cured un the Effective Date. The Confirmation Order shall be a judicial determination of the discharge of all Claims and
Interests subject to the Eflective Date occurring.
2. Subordinated Claims
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The allowance, classification, and treatment of all Allowed Claims and Interests and the respective distributions and treatments under the Plan take into account and conform to the relative priority and rights of the Claims and Interests in each Class in connection with any contractual, legal, and equitable subordination rights relating thereto, whether arising under
general principles of equitable subordination, section StO(b) of the Bankruptcy Code, or

otherwise. Pursuant to section S io of the Bankruptcy Code, the Plan Proponent or
16
Reorganized Debtors, as applicable, reserve the right to re-c1assify any Allowed Claim or
Interest in accordance with any contractual, legal, or equitable subordination relating thereto.
3. Compromise and Settlement of
17
18
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Claims and Controversies
19
20
21
Pursuant to section 363 of the Bankruptcy Code and Bankruptcy Rule 9019 and in consideration for the distributions and other benefits provided pursuant to the Plan, the provisions of the Plan shall constitute a good faith compromise of all Claims, Interests, and controversies relating to the contractual, legal, and subordination rights that a Holder of a
Claim may have with respect to any Allowed Claim or Interest, or any distribution to be made on account of such an Allowed Claim or Interest. The entry of the Confirmation Order shall
22 23 24
25
constitute the Bankruptcy Court's approval of the compromise or settlement of all such Claims, Interests, and controversies, as well as a finding by the Bankruptcy Court that such
compromise or settlement is in the best interests of the Debtors, their Estates, and Holders of
Claims and Interests and is fair, equitable, and reasonable. In accordance with the provisions or the Plan, pursuant to section 363 of the Bankruptcy Code and Bankruptcy Rule 9019(a),
26
27 28
without any further notice to or action, order, or approval of the Bankruptcy Court, after the Eflctive Date, the Reorganized Debtors may compromise and settle Claims against them and Causes of Action against other Entities.
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The First Lien Steering Committee believes that the Mediation Settlement is
2 3
reasonable and should be approved under Bankruptcy Rule 9019. In order to determine
whether a compromise may be approved under Bankruptcy Rule 9019, the Bankruptcy Court the litigation; (ii) the diffculties, if must consider fOllr factors: (i) the probability of siiccess of any, (0 be encountered in the matter of collection; (ii) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; and (iv) the paramount interest of the creditors and a proper deference to their reasonable views iii the premises. See, e.g" /n re A&C Properties, 784 F-id 1377, 1381 (9th Cir. 1986). A compromise may be approved even if all four of the factors do not favor the compromise so
long as the factors weigh in favor of the compromise when taken as a whole, See In re Pac.
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Gas and Elec. Co., 304 B.R, 395, 416 (Baiikr. N.D. Cal. 2004). In addition, a compromise does not have to be the best compromise that could have possibly been obtained but, instead, must only fall within a reasonable range of possible outcomes. In re WCl Cable, inc., 282 B.R. 457, 473-74 (Bank,. D. 0,- 2002).
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Based on the foregoing, the First Lien Steering Committee believes that the compromise embodied in the Plan and the Mediation Settlement is fair and equitable.
Specifically, the Mediation Settlement represents a global resolution of, among other things, potential preference actions held by the Debtors' Estates relating to the transfer of funds to certain Rhudes Entities within the one year period prior to the Petition Date, issues related to operation of the Reorganized Debtors' businesses and the ownership of the Rhodes Ranch
Golf Course.
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The First Lien Steering Committee estimates that the total amount of all payments made by the Debtors to the Rhodes Entities within the year prior to the Petition Date is in excess of $9 millon. With respect to the first factor articulated by the A&C Properties Court,
litigation over the potential preference payments identified herein would have been
contentious and hard fought. The Rhodcs Entities would likely have asserted a number of defenses to the preferencc claims, including that such payments were received in the ordinary
course of business. Moreover, based on the First Lien Steering Committee's review of all payments made to insiders within the one year period prior to the Petition Date as reflected in
the Debtors' Schedules and Schedule B to the Mediation Settlement Term Sheet, and on
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20
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subsequent conversations with Debtors' counsel, the First Licn Stccring Committee believes
that the Rhodes Entities may have had valid defenses to certain of these transfers. The
Mediation Settlement also reflects a resolution of potential fraudulent convey,mce actions held by the Estates againsi the Rhodes Entities. The First Lien Steering Committce believes that these claims would also have been heavily litigated in the absence of a settlement and, while the First Lien Steering Committee believes that it would have ultimately prevailed on certain of such claims, there can be no guarantee that a successful result would have been obtained for the Slatcs. In addition, the prosecution of both the fraudulent conveyance claims and the preference claims would have resulted in substantial expense for the Estates, while at the same time likely delaying the Debtors' emergence from chapler 11. Therefore, the First Lien
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25
26
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28
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Steering Committee believes ihat the third factor of the A&C ProperJies tesL also weighs in the approval of the Mediation Settlement.s favor of
The fourth factor of the A&C Properties test requires the Bankruptcy Court to consider
the parmnount interest of creditors. The creditors of
the Estates will derive a material benefit
4
5
from the approval of the Mediation Senlcmcnt because, among other things, the Mediation Settlement () contemplates a $3.5 milion cash payment from the Rhodes Entities to the
Reorganized Debtors, which payment wil be used to fund working capital needs and
6
7
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distributions contemplated by the Plan, (ii) provides for the transfer of the Arizona Assets,
which were non-core assets to the Reorganized Debtors that likely would have required
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significant additional funding for development, to the Rhodes Entities, (iii) provides for the transfer of ihe Rhodes Raneh Golf Course, the maintenance and continued operation of which
is paramount to maximizing the vahle of
the Reorganized Debtors' assets, to the Reorganized
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Debtors, (iv) avoids the significant expense and time delay associated wiih litigating the claims released under the Plan, which would have yielded uncertain results, and (v) enables
the Debtors to emerge from bankruptcy expeditiously and consensually, without any
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unnecessary eradication of value through a prolonged stay in chapter 11. In addition, all claims and causes of action against the Rhodcs Entities that arc not covered by the limited
release provided for in the Mediation Settlement will be transferred to the Litigation Trust for the benefit of all Creditors, to be prosecuted and/or settled post-emergence.
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In addition to the material benefits listed above, the First Lien Steering Committee believes that the Mediation Settlement wil also ensure a smooth transition to new ownership under the Plan. The Mediation Settlement contemplates that stringent bond and licensing the Rhodes Entities, thus allowing requirements wil be maintained through the cooperation of the Reorganized Debtors to continue operation$ without interruption upon emergence. The
Mediation Settlement also contemplates that new Qualified Employees and HOA board representatives wil be elected by the Reorganized Debtors to ensure a unified and organized
post-Effective Date management team. On balance, the First Lien Steering Committee
.,
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believes that the E$talt~$ and their creditors will be obtaining value tr in excess of the
consideration to be given to the Rhodes Entities if the Mediation Settlement is approved.
20
21
Given the range of issues involved, and the nature and character of the disputes between the First Lien Steering Committee, thc Debtors and Rhodes, the First Lien Steering Committee
believes that approval of the Mediation Settlement is appropriate. In addition, as set forth
above, the Mediation Statement satistes the fair and reasonable standards articulated by
courts in this circuit. The entry of the Confirmation Order shall therefore constitute the
22
23
Bankruptcy Court's approval of the compromise and settlement of the matters subject to the Mediation Settlement as well as a finding by the Bankruptcy Court that such compromise and
~ The second factor 10 be considered by the Bankruptcy Court in evaluating a si:uleiient proposal is the collection. The First Lien Steering Commillee has not completed a detailed review ofthe financial information of each Rhodes Entity that may have been liable in eonnection with the claims released under the Plan, and cannot therefore make a deti:rmination as to whcther each such entity could have satisfied its obligations in connection with any judgment entered by thc Bankruptcy Court. Thc First Lien Steering CommiUee does, however, believe that the Rhodes Entities may not have been able to litigation regarding the comply financially wiih the terms of judgments received in connectiori with successful heing claims rcleased uriderthePlan.
dillcuJiies, ifany, to bc cncountcrcd in the mailer of
24
25
26 27
28
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setllcmcnl is in the best interests of the Debtors, their Estates, and holders of claims and
2
3 4
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interests and is fair, equitable, and reasonable.

4. Releases bv the Debtors oCthe Released Parties
As described in greater detail below, the Plan contemplates that the Released
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Parties wil receive a release of all Claims and Causes of Action other than Claims and Causes or AclIoR for gross negligence or wilful misconduct. The "Released Parties" include each of: (a) the First Lien Lenders in their capacity as such; (b) the First Lien Steering Committee; (c) the Second Lien Lenders in their capacity as such; (d) with respect to each of the foregoing Entities in clauses (a) through (c), such Entities' predeccssors, successors and assigns; (e) the Creditors' Committee and the members
thercof in their capacity as such; (I) with respect to each of the foregoing Entities in clauses (a) through (e), such Entities' subsidiaries, affliates, offcers, members, directors, principals, employees, agents, financial advisors, attorneys, accountants, investment
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bankers, consultants, representatives, and other Profesionals; (g) the Debtors' offcers,
employees (including Thomas Robinson and Joseph Schramm) and Professionals, as of the Petition Date; and (h) Paul Huygens; provided, however, that clause (g) shall not
II
12 13 14 15
include (i) the Rhodes Entities or their affiiates; (ii) insiders of any of the Rhodes EntilIes (except as to Thomas Robinson and Joseph Schramm); or (iii) relatives of
Rhodes.
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The Plan provides the First Lien Lenders and the Second Lien Lenders with the releases described below as consideration for the First Lien Lenders' and Second Lien Lenders' good faith participation in the mediation session described in Article I.A and Article I.B hereof. Moreover; the First Lien Lenders are being released in exchange for their agreement to accept equity in Newco on account of the Secured portion of their Claims rather then exercising their contractual right to foreclose on their Collateral, and the First Lien Lenders' willngness to provide junior classes with a recovery in the form of the Claims purchase procedures outlined in Article VII.G of the Plan and the payment
of
the Second Lien Agent's legal fees.
20
21
Pursuant to section 1123(b) of the Bankruptcy Code and except as otherwise specifically provided in the Plan, for good and valuable consideration, including the service of the Released Parties to facilitate the expeditious reorganization of the Debtors
and the implementation of the restructuring contemplated by the Plan, and as part of
22
23
24 25
the global settement described in Article I.R hereof, on and after the Effective Date, the Released Parties are deemed released by the Debtors, the Reorganized Debtors, and the Estates from any and all Claims, obligations, rights, suits, damages, Causes of Action, remedies, and liabilties whatsoever, including any derivative Claims asserted on behalf of the Debtors, taking place on or before the Effective Date, ,,:hether known or unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity, or otherwise, that
the Debtors, the Reorganized Debtors or the Estates would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the Holder
26
27 28
of any Claim or Interest or other Entiy, based on or relating to, or in any manner
arising from, in whole or in part, the Debtors, the Chapter 11 Cases, the purchase, sale,
or rescission of the purchase or sale of any Security of
the Debtors, the subject matter of,
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or the lnmsiictions or events giving rise to, any Claim or Interest that is treated in the
2 3
Plan, the business or contractual anangcments between any Debtor and any of the
Released Parties, the i"estructuring of Claims and Interests prior to or in the Chapter n Cases, the negotiation, formulation, or preparation of the Plan and Disclosure Statement,
or related agreements, instruments, or other documents, upon any other act or omission,
4
5
transaction, agreement, event, or other occurrence taking place on or before the

Effective Date.
5. Releases bv the Debtors of the Rhodes Entities
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The Rhodes Entities shall be deemed released from any and all Claims, obligations, rights, suits, damages, Causes of Action, remedies, and liabilities whatsoever
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arising under chapter 5 of the Bankruptcy Code with respect to transfers made by the Debtors to the Rhodes Entities during the 2 years prior to the Petiion Datej provided,
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however, that such release shall only apply to transfers expressly set forth in the
Schedules as Filed with the Bankruptcy Court as of August 1,2009 or as disclosed in
Attachment B to the Mediation Term Sheet.
6. Releases bv First Lien Lenders of First Lien Lenders
II
12
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As described in greater detail below, the Plan contemplates tliat each First Lien
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Lender can elect to release all other First Lieii Lenders for all Claims and Causes of Action other than Claims and Causes of action for gross negligence or wilful
misconduct.
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Pursuant to Bankruptcy Rule 9019, and except as othenvise specifcally provided in the l'lan, to the extent a First Lien Lender elects on its Ballot to release the First Lien
Lenders in accordance with Section V1n.F. of the Plan, for good and valuable
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consideration, on and after the Effective Date, to the extent permitted under applicable law, each of the First Lien Lenders electing to grant tbis release, shall be deemed to release each of the other First Lien Lenders that has elected to grant this release and
each of their affliates from any and all Claims, obligations, rights, suits, damages,
20
21
22 23
24 25
Causes of Action, remedies, and liabilities whatsoever, whether known or unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity, or othenvise, that such First Lien Lender would have been legally entitled to assert against any other First Lien Lender that elected to grant this release, based on or relating to, or in any maDner
arising from, in whole or in part, the First Lien Credit Agreement, the First Lien Lender
Claims, any other claims arising under or related to the First Lien Credit Agreement, the Debtors, the Chapter 11 Cases, the subject matter of, or the transactions or events giving rise to any First Lien Lender Claim, the restructuring of the First Lien Lender Claims
prior to or during the Chapter n Cases, the negotiation, formulation, or preparation of
the Plan and Disclosure Statement, or related agreements, instruments, or other
26 27
28
documents, upon any oilier act or omission, transaction, agreement, event, or other
occurrence taking place on or before the Effective Date; with such releases constituting an express waiver and relinquishment by each First Lien Lender electing to grant this release of any claims, whether known or unknown that such First Lien Lender may have under Section 1542 of the California Civil code or other analogous state or federal law
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2 3
related to the niatters being released; provided, however, that Claims or liabiltt.'S arising out of or relating to any act or omission of any First Lien Lender or any of its affiiates that coiistihitcs gross negligence or wilful misconduct shall not be released.
7. ExcuhJ.ltion
Except as otlicnvise specifcally provided in the Plan, no Exculpated Part shall

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have or incur, and each Exculpated Party is hereby released and exculpated from any Claim, obligation, Cause of Action, or liabilty to one another or to any Exculpating Party for aiiy Exculpated Claim, except for gross negligence, wilful misconduct or fraud but in all respects such Entities shall be cntiUcd to reasonably rely upon the advice of coiinsel with respect to their duties and responsibilties pursuant to the Plan. The J)ebtors. the First Lien Steering Committee and the Reorganized Debtors (and each of their respeclive agents, members, directors, offcers, employees, advisors, and attorneys) have, and upon Confirmation of the Plan shall be deemed to have, participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code with regard to the distributions of the Securities pursuant to the Plan, and therefore are not, and on account of such distributions shall not be, liable at any time for the violation of
any applicable law, rule, or regulation governing the solicitation of acceptances or
rejections of the Plan or such distributions made piirsuant to the Plan.

8. Iniunction
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Except 1IS othenvise expressly provided in the Plan or for obligations issued pursuant to the Plan, all Entities who have held, hold, or may hold Claims against the Debtors, and all Entities holding Interests, arc pcrmanently enjoined, from and after the
Effective Date, from: (I) commencing or continuing in any manner any action or other
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proceeding of any kind against the Debtors or Reorganized Debtors on account of or in connection with or with respect to any such Claims or Interests; (2) enforcing. attaching,
collecting, or recovering by any manner or means any judgment, award, decl'ee or order
20
21
against the Debtors or Reorganized Debtors on account of or in connection with or with respect to any such Claims or Interests; (3) creating, perfecting, or enforcing any encumbrance of any kind against the Debtors or Reorganized Debtors or the property or estates of the Debtors or Reorganized Debtors 011 account of or in connection with or
with repect to any such Claims or Interests; (4) asserting any right of setoff,
subrogation, or recoupment of any kind against any obligation due from the Debtors or Reorganized Debtors or against the property or Estates of the Debtors or Reorganized
22 23 24 25 26
27
Debtors on account of or in connection with or with respect to aiiy such Claims or Interests unless such Holder has Filed a motion requesting the right to perform such
setoff on or before the Confirmation Date, and notwithstanding an indication in a Proof of Claim or Interest or othenvise that sueh Holder asserts, has, or intends to preserve
any right of setoff pursuant to section 553 of the Bankruptcy Code or othenvise (provided, that, to the extent the Rhodes Entities Claims are Allowed, the Rhodes
28
Entities, without the need to fie any such motion, shall retain the right to assert a setoff .igainst any Claims or Causes of Action that the Reorganized Debtors or Litigation Trust may assert against the Rhodes Entities, with the Reorganized Debtors and Litigalion Trust, as applicable, reserving the riglil to challenge the propriety of any such attempted
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setoff, with any such challenge to be resolved by the Bankruptcy Court); and
2
3
(5) commencing or continuing in any manncr any action or other proceeding of any kind
on accoiint of or in connection with or with respect to any such Claims or
Interests released or settled pursuant to the Phm.

9. Protection Against Discriminatorv Treatment
Consistent with section 525 of the Bankruptcy Code and the Supremacy Clause of
4
5
the
6
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U.S. Constitution, all Entities, including Governmental Units, shall not discriminate against
the Reorganized Debtors or deny, revoke, suspend, or refuse to renew a license, permit, charter, franchi5e, or other similar grant to, condition such a grant to, discriminate with respect
to such a grant against, the Reorganized Debtors, or another Entity with whom such
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Reorganized Debtors have been associated, solely because one of the Debtors has been a debtor under chapter i 1, has been insolvent before the commencement of the Chapter I i
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Cases (or during the Chapter I I Cases but before the Debtor is granted or denied a discharge) or has not paid a debt that is dischargeable in the Chapter I i Cases.
10. Setoffs
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Except as othcn,'ise expressly provided for in the Plan, each Reorganized Debtor, pursuant to the Bankruptcy Code (including section 553 of the Bankruptcy Code), applicable lion-bankruptcy law, or as may be agreed to by the Holder of a Claim, may
setoff against any Allowed Claim and the distributions to be made pursuant to the Plan
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on account of such Allowed Claim (before any distribution is made on account of such
Allowed Claim), any Claims, rights, and Causes of Action of any nature that such
Debtor, Reorganized Debtoi' 01' the Litigation Trust, as applicable, may hold against the
17
Holder of such Allowed Claim, to the extent such Claims, rights, or Causes of Action against such Holder have not been otherwise compromised or settled on or prior to the
Effective Date (whether pursuant to the Plan or otlienvise); provided, however, that neither the failure to effect such a setoff nor the allowance of any Claim pursuant to the
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19
20
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22
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Plan shall constitute a waiver or release by snch Reorganized Debtor or the Litigation Trust of any such Claims, rights, and Causes of Action that such Reorganized Debtor or the Litigation Trust may possess against such Holder. In no event shall any Holder of Claims be entitled to setoff any Claim against any Claim, right, or Cause of Action of the Debtor or Reorganized Debtor, as applicable, unless such Holder has Filed a motion with the Bankruptcy Court requesting the authority to perform such setoff on or before the
Confirmation Date, and notwithstanding any indication in any Proof of Claim or
othenvise that such Holder asserts, has, or intends to preserve any right of setoff
pursuant to section 553 or otherwise; provided, however, that, to the extent the Rhodes Entities Claims are Allowed, the Rhodes Entities, without the need to fie any such motion, shall retain the right to assert a setoff against any Claims or Causes of Action that the Reorganized Debtors or Litigation Trust may assert against the Rhodes Entities, with the Reorganized Debtors and Litigation Trust, as applicable, reserving the right to challenge the propriety of any such attempted setoff. with any such challenge to be resolved by the Bankruptcy Court).
24 25 26 27 28
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11. Recoupment
2
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4
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In no event shall any Holder of Claims or Interests be entitled to recoup any Claim or Interest against any Claim, right, or Cause of Action or the Debtors or the Reorganized Debtors, as applicable, unless siich Holder actually has performed such recoupment and provided notice thereof in writing to the Debtors and the First Lien
Steering Committee on or before the Confirmation nate, notwithstanding any indication lends to in any Proof of Claim or Intercst or othenvise that such Holder asserls, has, or in preserve aiiy right of recoupment.
12. Release of
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Liens
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Except as otherwise provided in the Plan or in any contract, instrument, release, or
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other agreement or document created pursuant to the Plan, on the Effective Date and
concurrently with the applicable distributions made pursuant to the Plan, all mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Estates shall be fully relcased, and disch-irged, cind all of the right, title, and interest of any Holder of such
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mortgages, deeds of trust, Liens, pledges, or other security interests shall revert to the
RcorgClnized Debtors and their successors and assigns. Upon the Effective Date, the
Confirmation Order shall be binding upon and govern the acts of all entities, including,
without limitation, all filing agents, fiing offcers, title agents, title companies, recorders of
mortgages, recorders of deeds, registrars of deeds, administrative agencies, governmental
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departments, secretaries of state, federal and local offcials, and all other persons and entities who may he required by operation of Jaw, the duties of their offce, or contract, to release any the mortgages, deeds of trust, Liens, pledges or other security interests against any property of Estates; and each of the foregoing persons and entities is hereby directed to accept ror fiing
the Confirmation Ordcr any and all of the documents and instruments necessary and
appropriate lo effectuate the discharge.
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13. Document Retention
On and after the Effective Date, the Reorganized Debtors may maintain documents in
20
21
accordi:nce with their current document retention policy, as may be altered, amended, modified, or supplemented by the Reorganizcd Debtors in the ordinary course of business.
Copies of all Debtors' books and records shall be delivered to the Rhodes Entities at no cost to the Rhodes Entities on or prior to the Effective Date.
14. Reimbursement or Contribution
22
23
24 25
26 27
28
If the Bankruptcy Court disallows a Claim for reimbursemcnt or contribution or an Entity pursuant to section 502(e)(I)(B) of the Bankruptcy Code, then to the extent that such Claim is contingent as of the time of allowance or disallowance, such Claim shall be forever disallowcd notwithstanding section 5020) of the Bankruptcy Code, unless prior to the Effective Date: (I) such Claim has been adjudicated as noncontingent or (2) the relevant Holder of a Claim has Filed a noiicontingent Proof of Claim on account of such Claim and a Final Ordcr has been entered determining such Claim as no longer contingent.
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K. Allowance and Payment of Certain Administrative Claims
2
3
I. Professional Claims
a. Final Fee Applications
4
5
All final requests for payment of Claims of a Professional shall be Filed no later than
roriy~fvc days after the Effective Date. After notice and a hearing in accordance with the
procedures established by the Bankruptcy Code and prior Bankruptcy Court orders, the
Allowed amounts of such Professional Claims shall be deiermined by the Bankruptcy Court.
b. Payment of Interim Amounts
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Except as otherwise provided in the Plan, Professionals shall be paid pursuant to the Interim Compensation Order.
c. Reimbursable Expenses
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The reasonable fees and expenses incurred by (i) the First Lien Agent, including its prorcsonals, to the extent provided by the First Lien Credit Agreement, (ii) the Second Lien Agent, including its professionals, to the extent provided by the Second Lien Credit Agreement (only to ihe extent the Class of Second Lien Lender Secured Claims votes in favor
or the Plan, and (iii) the First Lien Steering Committee, including its professionals, in
14 15
connection with the Chapter 1 i Cases shall be paid by the Debtors or Reorganized Debtors, as applicable, within i 5 days of receipt of an invoice from such parties or their advisors.
d. Post~Effective Dale Fees and Expenses
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Except as otherwise specifically provided in the Plan, from and after the Effective
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Date, the Reorganized Debtors shall, in the ordinary course of business and without any further notice to or action, order, or approval of the Bankruptcy Court, pay in Cash the
rea.'ionable legal, professional, or other fees and cxpenses related to implementation and
20
21
Consummation incurred by the Reorganized Debtors and First Lien Steering Committee. Upon the Effective Date, any requirement that Prolcssionals comply with sections 327 through 33 I and 1103 of the Bankruptcy Code in seeking retention or compensation for
services rendered after such date shall terminate, and the Reorganized Debtors may employ
22
23
and pay any Professional in the ordinary course of business without any further notice to or action, order, or approval of the Bankruptcy Court
e. Substantial Contribution Compensation and Expenses
24 25 26
Except as otherwise specifically provided in the Plan, any Entity who requests
compensation or expense reimbursement for making a substantiul contribution in the Chapter i i Cases pursuant to sections 503(b)(3), (4), and (5) of the Bankruptcy Code must File an application and serve such application on counsel for the Debtors or Reorganized Debtors, as
27
28
applicable, and the First Lien Steering Committee and the Creditors' Committee, and as otherwise required by the Bankruptcy Court and the Bankruptcy Code on or before the
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Administrative Claim Bar Dale or be forever barred from seeking such compensation or
2
3 4 5
expense reimbursement.
2. Other Administrative Claims
6
7
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All requests for payment or an Administrative Claim must be Filed with the Claims and Solicitation Agent and served upon counsel to the Debtors or Reorganized Debtors, as applicable, and the First Lien Steering Committee on or before the Administrative Claim Bar Date. Any request for payment of an Administrative Claim that is not timely Filed and served
shall be disallowed automatically without the need for any objection by the Debtors,
seUle and pay nny Administrative Claim in the ordinary course of
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Reorganized Debtors, or the First Lien Steering Committee. The Reorganized Debtors may business without any further notice to or action, order, or approval of the Bankruptcy Court. In the event that any party with standing objects to an Administrative Claim, the Bankruptcy Court shall determine the Allowed amount of such Administrative Claim. Notwithstanding thc foregoing, no request for
payment of an Administrative Claim need be Filed with respect to an Administrative Claim previously Allowed by Final Order.
I.. Conditions Precedent to Confirmation and Consummation of
II
the Plan
12
13 14 15
i. Conditions to Confirmation
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The following are conditions precedent to Confirmation that must be satisfied or

waived in accordance with Article X.C of
the Plan:
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A. The Bankruptcy Court shall have approved thc Disclosure Statement, in

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a manner acceptable to the Plan Proponent, as containing adequate
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information with respect to the Plan within the meaning of section 1125 of the Bankruptcy Code.
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B. The Confirmation Order shall be in form and substance acceptable to

the Plan Proponent.
20
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C. The tenus and conditions of employment or retention of any Persons

proposed to serve as offcers or directors of Newco, including, without
limitation, as to compensation, shall be acceptable to the Plan

Proponent and shall be disclosed at or prior to the Confirmation
22 23 24
25
Hearing.
J). Any disclosures made pursuant to I i U.S.C. i 129(a)(5) shall be
acceptable to the Plan Proponent.

E. All of the schedules, documents, and exhibits ancilary to the Plan and
26 27 28
Disclosure Statement including, but not limited to, (i) the Claim
Purchase Schedule, (ii) the Litigation Trust Agreement, (iii) the Newco
LLC Operating Agreement, (iv) thc New First Lien Notes credit
agreement, (v) the Scliedule of Causes of Action, (vi) the Asset and
Stock Transfer Agreement, and (vii) the Schedule of Assumed
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Executory Contracts and Unexpired Leases shall be in form and
2
3
substance acceptable to the Plan Proponent.

2. Conditions Precedent to the Effective Date
4
5
The following are conditions precedent to Consummation that must be satisfied or

waived in accordance with Article X.C ofihe Plan:
6
7
A. The Bankruptcy Court shall have authorized the assumption and

rejection of executory contracts and unexpired leases by the Debtors as
contemplated by Article V of
the Plan.
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B. All of the schedules, documents, and exhibits ancillary to the Plan and
Disclosure Statement including, but not limited to, (i) the Claim
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Purchase Schedule, (il) the Litigation Trust Agreement, (iii) the Newco
LLC Operating Agreement, (iv) the New First Lien Notes credit
agreement, (v) the Schedule of Causes of Action, (vi) the Asset and
Stock Transfer Agreement, and (vii) the Schedule of Assumed Executory Contracts and Unexpired Leases shall be in form and
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C. The Confirmation Order shall have become a Final Order in form and substance acceptable to the Plan Proponent.
D. The documents governing the New First Lien Notes and the Newco
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LLC Operating Agreement shall be in form and substance acceptable to

16 17
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the Plan Proponent.

E. The Confirmation Date shall have occurred.
F. The First Lien Steering Committee shall have designated and replaced
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each existing Qualified Employee of the Debtors with a new Qualified
Employee for the Reorganized Debtors.

20
21
G. The third party debt outstanding on ihe Rhodes Ranch Golf Course
shall be refinanced on terms and conditions acceptable to Rhodes and
22 23 24 25
the First Lien Steering Committee and the personal loan of James
Rhodes to the entity that owns the Rhodes Ranch Golf Course shall have been contributed as equity without any new cquity being issued to
James Rhodes and James Rhodes shall have provided the Debtors, the
Reorganized Debtors, Newco and the entity that owns the Rhodes Ranch Golf Course an indemnity for any liability arising from the
contribution of such loan.
26
H. Copies of all Debiors' books and records shall have been delivered to
27
the Rhodes Entities at no cost to the Rhodes Entities.
28
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i. The Ari:tna Assets shall have been transferred to the Rhodes Entities
2
3
(or their designee) free and clear of all liens and claims pursuant to
section 363(f) of the Bankruptcy Code 011 the Effective Date; provided, that the non-first Lien Lender/Second Lien Lender liens do not exceed $60,000,
J. The Debtors shall have assumed and assigned all executory contracts
4
5 6
and unexpired leases related solely to the Arizona Assets to the Rhodes Entities (or their designee), at no cost to the Debtors or ihe Reorganized
Debtors, with all Cure costs associated therewith to be borne by the

Rhodes Entities.
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K. The tax structure set forth In Article IV.F of the Plan shall be
implemented.
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agreed on the GoirCourse Security Property.
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12 13 14 15
3. Waiver of Conditions Precedent
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M. The Rhodes Entities shall have performed all of their obligations under the Plan including, without limitation, depositing $3.5 millon in Cash in an account designated by the Debtors, with the consent of the First Lien Steering Committee, and transferred the Rhodes Ranch Golf Course and related contracts and assels as required by Article IV.S. of
the Plan to the Reorganized Debtors.
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The First Lien Steering Committee may waive any of the condiLions to the Effective
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Date at any time, without any notice to parties in interest and without any further notice to or action, order, or approval of the Bankruptcy Court, and without any formal action other than
proceeding to confirm or consummate the Plan; provided, that the First Lien Steering
20
21
Committee wil not waive the conditions precedent in items X.B.6 through 12 ofthc Plan if the Rhodes Entities shall have complied with all of their obligations hereunder an in the Plan
by the Effective Date (or such earlier date specifically set forth herein). In the event the Rhodes Entities fail to comply with any of their obligations under the Mediation Term Sheet or under the Plan by the Effective Date (or such earlier dale specifically set forth herein) and
22
23
fail to cure such alleged breach within ten (i 0) days' written notice to the Rhodes Entities, then the First Lien Steering Committee shall be entitled to file a motion on at least seven (7)
days notice to () detcnnine that a breach has occurred (excepiihat the failure of
the parties to
24
25
agree on the refinancing of
the Rhodes Ranch Golf
Course solely as a result of
the First Lien
Steering Committee acting unreasonably or in bad faith shall not be deemed a failure of the Rhodes Entities to comply with their obligations hereunder or under the Plan), and the Rhodes
26 27 28
Entities reserve their right to object to such motion; (ii) modify the Plan to remove any
provisions hereof that were included for the benefit of the Rhodes Entities; and (ii) consummate the Plan, as modified. Upon entry of an order of the Bankruptcy Court finding a breach by the Rhodes Entities and authorizing the modifications to the Plan to remove any
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provisions that were included for the benefit of the Rhodes Entities, the First Lien Steering shall be authorized to make such modifications and consummate the Plan.
4. Effect arNon-Occurrence ofCondiiioos to Consummation
4
5 6 7
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Article X.c. of
the conditions to Consummation must be satisfied or duly waived pursuant to the Plan, and Consummation must occur within 180 days of Confirmation, or by such later date established by Bankruptcy Court order. If Consummation has not occurred
Each of
within i 80 days of Confinnation, then upon motion by a party in interest made before
Consummation and a hearing, the Confirmation Order may be vacated by the Bankruptcy
Court; provided, however, that notwithstanding the Filing of such motion to vacate, the
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enters an order granting such motion. If
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Confinnation Order may not be vacated if Consummation occurs before the Bankruptcy Court the Confirmation Order is vacated pursuant to Article X.D or the Plan or otherwise, then except as provided in any order of the Bankruptcy Court vacating the ConJirmation Order, the Plan will be null and void in all respects, including the discharge of Claims and termination of Interests pursuant to the Plan and section 1141 of the Bankruptcy Code and the assumptions, assignments, or rejections of executory contracts or
II
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unexpired leases pursuant to Article V of the Plan, and nothing contained in the Plan or Disclosure Statement shall: (1) constitute a waiver or release of any Claims, Interests, or Causes or Action; (2) prejudice in any manner the rights of the Debtors, the First Lien Steering Committee or any other Entity; or (3) constitute an admission, acknowledgment,
otTer, or undertaking of any sort by the Debtors, the First Lien Steering Committee or any other Entity.
5. Satisfaction of
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Conditions Precedent to Confirmation
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conditions precedent to Confirmation, as set forth in Article X.A of
Upon entry of a Confirmation Order acceptable to the Plan Proponent, each of the the Plan, shall be deemed
the Plan
to have been satisfied or waived in accordance with the Plan.

18
M. Modification, Revocation. Or Withdrawal of
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1. Modification and Amendments

The Plan Proponent shall not modify materially the terms of the Plan without the prior consent of the parties to the Mediation Term Sheet; provided, that in the event the Rhodes Entities fail to comply with any of their obligations under the Mediation Term Sheet and under the Plan by the Effective Date (or such other date set forth in the Plan) and fail to cure such alleged breach within ten (I 0) days' written notice to the Rhodes Entities, then the first Lien Steering Committee shall be entitled to fie a motion on at least scven (7) days notice to (i) determine that a breach has occurred (except that the failure of the parties to agree on the refinancing or the Rhodes Ranch Golf Course solely as a result or the First Lien Steering Committee acting unreasonably or in bad faith shall not be deemed a failure of the Rhodes Entities to comply with iheir obligations hereunder or under the Plan), and the Rhodes Entities reserve their right to object to such motion; (ii) modify the Plan to remove any provisions hereof that were included for the benefit of the Rhodes Entities; and (iii) consummate the
22
23
24
25
26 27 28
Plan, as modified. Upon entry or an order of the Bankruptcy Court finding a breach by the
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Rhodes Entities an authorizing the modifications to the Plan to remove any provisions that
were included for the benefit of the Rhodes Entities, the First Lien Steering shaH be
authorized to make such modifications and consummate the Plan. Except as otherwise specifically provided in the Plan, the Plan Proponent reserves the right to modify the Plan and
seek Confirmation consistent wth the Bankruptcy Code. Subject to certain restrictions and
requirements set f0l1h in section 1127 of
the Bankruptcy Code and Bankruptcy Rule 3019 and those restrictions on modifications set forth in the Plan, the Plan Proponent expressly reserves its rights to revoke, withdraw, alter, amend, or modify materially the Plan with respect to any
Debtor, one or more times, after Confirmation, and, to the extent necessary, may initiate proceedings in the Bankruptcy Court to so alter, amend, or modify the Plan, or remedy any defect or omission, or reconcile any inconsistencies in the Plan, the Disclosure Statement, or the Coiifirmation Order, in such matters as may be necessary to carry out the purposes and intent of the Plan. Any such modification or supplement shall be considered a modification of
the Plan and shall be made in accordance with Article XI.A of
the Plan. The Plan, Disclosure
Statement and all ancilary documents may be inspected in the offce of the clerk of the Bankruptcy Court or its designee during normal business hours, at the Bankruptcy Court's
website at hup://www.nvb.uscourts.gov. All documents to be entered into in connection with
the consummation of the Plan as described in the Plan and/or Disclosure Statement are integral to the Plan and shall be approved by the Bankruptcy Court pursuant to the
Confirmation Order.
2. Effect of
Confirmation on Modifications
the Bankruptcy
Entry of a Confirmation Order shall mean that all modifications or amendments to the
Plan since the solicitation thereof are approved pursuant to section J 127(a) of
Code and do not require additional disclosure or resolicitation under Bankruptcy Rule 3019.
3. Revocation or Withdrawal of Plan
The Plan Proponent reserves the right to revoke or withdraw the Plan prior to the Confirmation Date and to File subsequent plans of reorganization; provided, that, any
subsequently filed plan shall be consistent with the Mediation Settlement unless the Rhodes Entities fail to comply with any of their obligations under the Mediation Term Sheet or the Plan by the Effective Date (or such other date set forth herein) and fail to cure such alleged breach \vithin ten (10) days' written notice to the Rhodes Entities, in which case the First Lien Steering Committee shall be entitled to fie a motion on at least seven (7) days notice to (i) determine that a breach has occurred (except that the failure of the parties to agree on the refinancing of the Rhodes Ranch Golf Course solely as a result of the First Lien Steering Committee acting unreasonably or in bad faith shall not be deemed a failure of the Rhodes Entities to comply with their obligations hereunder or under the Plan), and the Rhodes Entities reserve their right to object to such motion; (ii) revoke or withdraw the Plan as a result of such
breach; and (iii) fie a subsequent plan that removes the benefits provided to the Rhodes Entities pursuant to the Mediation Term Sheet. If the Plan Proponent revokes or withdraws
the Plan, or if Confirmation or Consummation does not occur, then: (1) the Plan shall be null and void in all respects; (2) any settlement or compromise embodied in the Plan (including the
Ixing or limiting to an amount certain of any Claim or Class of Claims), assumption or

rejection of executory contracts or unexpired leases effected by the Plan, and any document or
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agreement executed pursuant to the Plan, shall be deemed null and void; and (3) nothing contained in the Plan shall: (a) constitute a waiver or release or any Claims or Interests; (b)
prejudice in any manner the rights of the Plan Proponent or any other Entity; or (e) constitute an admission, acknowledgement, offer, or undertaking of any sort by the Plan Proponent or
any other Entity.
N. Retention of Jurisdiction
5
6
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Notwithstanding the entry of the Confirmation Order and the occurrence of the
Effective Date, the Bankruptcy Court shall retain exclusive jurisdiction over all matters
arising out or, or related to, the Chapter 11 Cases and the Plan pursuant to sections 105(a) and 1142 of the Bankruptcy Code and as otherwise set forth in the rlan.
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ArticleV. STATUTORY REQUIREMENTS FOR CONFIRMATION OF THE PLAN
10
The following is a brief summary of the Plan Confirmation process. Holders of

Claims and Interests are encouraged to review the relevant provisions of the Bankruptcy Codc and to consult their own attorneys.
A. The Confirmation Hearing
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Section i J 28(a) of the Bankruptcy Code requires the Bankruptcy Court, after notice, to hold a hearing on Confirmation (the "Confirmation Hearing"). Section i 128(b) of the Bankruptcy Code provides that any party in interest may object to Confirmation.
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THE BANKRUPTCY COURT HAS SCHEDULED THE CONFIRMATION

HEARING TO COMMENCE ON JANUARY 14, 2010 AT 9,00 A,M, PREVAILING PACIFIC TIME BEFORE THE HONORABLE LINDA B. RIEGLE, UNITED STATES
BANKRUPTCY JUDGE, IN THE UNITED STATES BANKRUPTCY COURT FOR nlE DISTRICT OF NEVADA, IN COURTROOM I IN THE FOLEY FEDERAL BUILDING LOCATED AT 300 LAS VEGAS BOULEVARD SOUTH, LAS VEGAS, NEVADA 89101, THE CONFIRMATION HEARING MAY BE ADJOURNED FROM TIME TO TIME BY
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TI.IE BANKRUPTCY COURT WITHOUT FURTHER NOTICE EXCEPT FOR AN ANNOUNCEMENT OF THE ADJOURNED DATE MADE AT THE CONFIRMATION HEARING OR ANY ADJOURNMENT TfEREOE
OBJECTIONS TO CONFIRMATION OF THE PLAN MUST BE FILED AND
22
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SERVED ON OR BEFORE JANUARY 4, 2010, IN ACCORDANCE WITH THE

SOLICITATION PROCEDURES ORDER FILED AND SERVED ON HOLDERS OF
24 25 26 27 28
CLAIMS AND INTERESTS AND OTHER PARTIES IN INTEREST, UNLESS
OBJECTIONS TO CONFIRMATION ARE TIMELY SERVED AND FILED IN

COMPLIANCE WITH THE SOLICITATION PROCEDURES ORDER, THEY MAY NOT BE CONSIDERED BY THE BANKRUPTCY COURT.
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B. Confirmation Stiindards
2
3
To confinn the Plan, the Bankruptcy Court must find, among other things, that the requirements of section 1129 of the Bankruptcy Code have been satisfied. The requirements
of section i 129 of
the Bankruptcy Code are lisled below:
4
1. the Plan complies with the applicable provisions of
the Bankruptcy Code;
2. the First Lien Steering Committee, as Plan Proponent, will have complied with
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the applicable provisions of
3. the Plan has been proposed in good faith and not by any means forbidden by
law;
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4. any payment made or promised under the Plan for services or for costs and
expenses in, or in connection with, the Chapter I i Cases, or in connection with the Plan and incident to the cases, has been disclosed to the Bankruptcy Court, and any such payment made before the Confirmation is reasonable, or if such payment is to be fixed after the Confirmation, such payment is subject to the approval of the Bankruptcy Court as reasonable;
5. with respect to each Class of Impaired Claims or Interests, either each Holder
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of a Claim or Interest of slIch Class has accepted the Plan or will receive or retain under the Plan on account of such Claim or Interest property of a value, as of the Effective Date of the Plan, that is not less than the amount that such Holder would receive or retain if the Debtors were liquidated on such date
under chapter 7 of the Bankruptcy Code;
6. each Class of Claims that is entitled to vote on the Plan either has accepted the
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Plan or is not Impaired under the Plan. or the Plan can be confirmed without
the approval of each voting Class pursuant to section 1129(b) of the

Bankruptcy Code;
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7. except to the extent that the Holder of a particular Claim wil agree to a
19
different treatment of such Claim, the Plan provides that Allowed

Administrative and Allowed Priority Non~Tax Claims wil be paid in full on the Effective Date, or as soon as reasonably practicable thereafter;
8. at least one Class of Impaired Claims or Interests wil accept the Plan,
20
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22 23 24
25
determined without including any acceptance of the Plan by any insider

holding a Claim or Interest of
such Class;
9. Confirmation is not likely to be followed by the liquidation, or the need for
further financial reorganization, of the Debtors or any successor to the Debtors
under the Plan, unless such liquidation or reorganization is proposed in the

Plan;
10. all fees of the type described in 28 U.S.C. 1930, including the fees of
26
27 28
the
United Statcs Trustee, will bc paid as of
the Effective Dale; and
I i. the Plan addresses payment of retiree benefits, if any, in accordance with
section I i 14 of thc Bankruptcy Code.
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The First Lien Steering Committee believes that the Plan satisfies the requirements of the Bankruptcy Code, including that (1) the Plan satisfies or will satisfy all of the statutory requirements of chapter i I of the Bankruptcy Code, (2) the First Lien Steering
section i 129 of Committee has complied or will have complied with all of
the requirements of chapter 11 and
(3) the Plan has been proposed in good faith.

4
C. Financial Feasibility
5
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Section 1129(a)(1 I) or the Bankruptcy Code requires that the Bankruptcy Court find,
as a condition to Confirmation, that Confirmation is not likely to be followed by the
liquidation of the Debtors, unless such liquidation is proposed in the Plan, or the need for
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further financial reorganization. To detennine whcther the Plan meets this requirement, the First Lien Steering Committee has analyzed the ability oftlie Debtors to meet their obligations
under the Plan.
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With respect to the Reorganized Debtors, based on the analyses set forth in
Exhibit D to the Disclosure Statement and the operational, business and other
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assumptions Set forth therein, the First Lien Steering Committee believes that the Reorganized Debtors wil have the financial capabilty to satisfy their obligations
following the Effective Date pursuant to the Plan, including the payment of all Cash distdhutions contemplated by the Plan. Based on the analysis and related information set forth in Exhibit D to the Disclosure Statement, the First Lien Steering Committee will seek a
ruling thatthe Plan is feasible in connection with the Confinnation of
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the Plan.
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D. Best Interests of
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Creditors Test
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Often called the "best interests" test, section 1129(a)(7) of the Bankruptcy Code requires that the Bankruptcy Court find, as a condition to Confirmation, that each Holder of a
Claim or Interest in each Impaired Class: (I) has accepted the Plan or (2) wil receive or
20
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22
23
retain under the Plan property of a value, as of the Effective Date, that is not less than the amount that such Person would receive if the Debtors were liquidated under chapter 7 of the Bankruptcy Code. To make these findings, the Bankruptcy Court must: (a) estimate the Cash proceeds (the "Liquidation Proceeds") that a chapter 7 trustee would generate if each Chapter I I Case were converted to a chapter 7 case and the assets of such Estate were liquidated; (b) determine the distribution ("Liquidation Distribution") that each non-accepting Holder of a Claim or Interest would receive from the Liquidation Proceeds under the priority scheme dictated in chapter 7; and (c) compare each Holder's Liquidation Distribution to the distribution under the Plan ("Plan Distribution") that such Holder would receive if the Plan
were Confirmed and consummated.
24
25
To assist the Bankruptcy Court in making the findings required under section
1129(a)(7), the First Lien Steering Committee, through its financial advisor, Winchester Carlisle Partners ("WCP"), and it valuation consultant, Robert Charles Lesser & Co, ("RCLCO"), has prepared a liquidation analysis (the "liquidation Amilvsis") and a going concern analysis (the "Gain/! Concern Analysis"). The Liquidation Analysis and Going Concern Analysis compare the proceeds to be realized if the Debtors were to be liquidated in
hypothetical cases under chapter 7 of the Bankruptcy Code against the proceeds to be realized
26 27 28
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under the Plan iiS a going concern. These analyses employ a discounted cash flow ("DCF") methodology to arrive at a range of values for the Debtors' real estate assets as of December 31, 2009, and incorporate various estimates and assumptions, including a hypothetical conversion to chapter 7 liquidation as of January 1,2010. Further, each analysis is subject to potential material changes including with respect to economic and business conditions and legal rulings. Therefore, the actual liquidation and going concern values of the Debtors could vary materially from the estimates provided in the Liquidation and Going Concern Analyses,
respectively.
I. Liquidation Analysis
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Under chapter 7 liquidation, certain distinctive factors would limit recovery from the sale of the Debtors' homebuilding operations and other land assets. RCLCO and WCP
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assumed that an orderly liquidation would be performed over a period of twelve months
conversion to a hypothetical chapter 7 liquidation. Given the current depressed state of homebuliding and real estate markets, as well as the limited availabilty of credit, this expedited sale process could materially reduce
commencng as of January 1,2010, the projected date of
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recovery from the Debtors' hind assets. In addition, RCLCO and WCP assumed that a
potential buyer of
the Debtors' assets wil expect a higher risk premium and lower achievable
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home sale prices relative to a going concern valuation duc to the stigma attached to a
community and/or company that is in a liquidation mode.
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The Liquidation Analysis, attached hereto as Exhibit E, presents both "High" and
"Low" estimates of the value or the Debtors' real estate assets under liquidation, representing a range or assumptions relating to the risk and costs incurred during a liquidation. The DCF
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analysis derives an estimated value or the Debtors' real cstate assets by discounting the
unlevered projected free cash flows a buyer or buyers of the Debtors' assets could expect to
achieve, based on market projections, to a net present value as of the effective date_ RCLCO
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uscd a discount rate range of25% - 30% in the Liquidation Analysis, renecting the higher risk premium required by investors under this scenario_
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Based on the methodologies described above, and after furthcr review, discussions, considerations, and assumptions, RCLCO and WCP estimate that the liquidation value of the Dcbtors' real estate assets as of January i, 2010, ranges from $44.2 millon dollars to $55.0 million dollars, with a midpoint of $49.3 million dollars.
22
23
As reflcctcd on Exhibit E hereto, RCLCO and WCP performed the Liquidation

Analysis on a consolidated basis and did not provide a liquidation Value for each individual
Debtor entity. Thc first lien indebtedness and second lien indebtedness total nearly $400
24 25 26 27 28
millon, which indebtedness is secured by first and second liens, respectively, on substantially all of the Debtors' assets at each Debtor entity. Given that the Liquidation Analysis reflects a midpoint value of $49.3 milion, the First Lien Steering Committee believes that there is no value available for claims beyond the first lien indebtedness at any Debtor entity on either a liquidation or going concern basis. The First Lien Steering Committee therefore does not believe that an entity by entity liquidation analysis is necessary or appropriate on the facts of ihese Chapter i i Cases.
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2. Going Concern Analysis
2
3
4
5
In preparing the Going Concern Analysis, RCLCO and WCP, ainong other things: reviewed certain internal financial and operating data of the Debtors made available by the Debtors and WCP; reviewed certain operating and financial forecasts; performed DCF analyses; considered sales transaction for properties comparable to certain of the Debtors' assets; considered information from qualitied third party sources relating to revenue and cost
assumptions, and conducted such other analyses as deemed necessary to complete the analysis.
6
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The Going Concern Analysis assumes that various documents and data provided by the Debtors, including cost infonnation, are reliable and accurate.
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In addition to the foregoing, RCLCO assumed in preparing the Going Concern

Analysis thatihe Effective Date occurs on January 1, 2010. The Projections used also assume that general economic, financial, and market conditions as of the Effective Date wil not differ materially from those conditions prevailing as of the date of the Going Concern Analysis. Although subsequent developments may affect the conclusions, neither RCLCO, WCP nor the First Lien Steering Committee have any obligation to update, revise, or reaffnn its analysis following the Confirmation Hearing.
The DCF methodology was used to arrive at a value for the Debtors' real estate assets. the Debtors' real estate assets by discounting thcir unlevered projected free eash flows based on market projections to a net present value as
The DCF analysis dcrivcs an estimated value of
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of the Effective Date. Revenue is derived from the construction and sale of single family homes on all single-family lots currently in inventory, as well as on certain multifamily and commercial parcels where it was determined that single-family homes were the highest and best lIse. Pricing and sales velocity for these homes were projected to recover from their currently depressed levels, as determined by an analysis of recent and historical sales data, to more sustainable level of growth by 2011. Additional revenue is derived from the sale of certain land parcels at prices and dates supportable by market conditions, as well as the operation and sale of the Tuscany Golf Course. RCLCO used a discount rate range of20% 25% in the Going Concern Analysis, reOeeting the prevailing capital market requirements of
similar transactions.
22 23
24
Based on the methodologies described above, and after further review, discussions,
considerations, and assumptions, RCLCO and WCP have estimated that the going concern value of the Debtors' real eslate assets as of January i, 2010, ranges from $89.2 millon to $111.5 million, with a midpoint of$99.6 milion.
E. Acceptance by Impaired Classes
25
26 27
28
The Bankruptcy Code also requires, as a condition to confirmation, that each class of claims or interests that is impaired under a plan accept the plan, with the exception described
in the following section. A class that is not "impaired" under a plan of reorganization is
deemed to have accepted the plan and, therefore, solicitation of acceptances with respect to such class is not required. A class is "impaired" unless the plan (I) leaves unaltered the legal,
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equitable and contractual rights to which the claim or interest entitles the holder of such claim or interest or (2) cures any default :md reinstates the original terms of the obligation.
Section I 126(c) of the Bankruptcy Code defines acceptance of a plan by a class of impaired claims as acceptance by holders of at least two thirds in dollar amount and more than one half in number of claims in that class, but for that purpose counts only those who actually vote to accept or to reject the plan. Thus, a class of claims will have voted to accept the plan
4
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only if two thirds in amount and a majority in number actually voting cast their ballots in favor of acceptancc. Undcr scction 1126(d) of the Bankruptcy Code, a class of interests has accepted the plan if holders of such interests holding at leastlwo thirds in amount actually
voting have voted to accept the plan.
f. Confirmation Without Acceptance by All Impaired Classes
Section 1129(b) of
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the Bankruptcy Code allows a bankruptcy court to confirm a plan,
even if such plan has not been accepted by all impaired classes entitled to vote on such plan;
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provided that such plan has been accepted by at least one impaired class.
Section I i 29(b) of the Bankruptcy Code states that notwithstanding the failure of an the
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impaired class to accept a plan of reorganization, the plan will be confirmed, on request of
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proponent of the plan, in a procedure commonly known as "cram down," so long as the plan
does not "discriminate unfairly" and is "fair and equitable" with respect to each class of
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claims or interests that is impaired undcr, and has not accepted, the plan.
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In general, a plan does not discriminate unfairly if it provides a treatment to the class to the treatment that is provided to other classes that have equal rank. In dettrmining whether a plan discriminates unfairly, courts wil take into account a number of factors. Accordingly, two classes of unsecured claims could be treated differently without unfairly discriminating against either class.
that is substantially equivalent
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The condition that a plan be "fair and equitable" with respect to a non-accepting class of secured claim~ includes the requirements that: (I) the holders of such secured claims retain
20
21
the liens securing such claims to the extent of the allowed amount of the secured claims, whether the property subject to the liens is retained by the debtor or transferred to another
entity under the plan and (2) each holder of a secured claim in the class receives deferrd cash
payments totaling at least the allowed amount of such claim with a present value, as of the
22
23
effective date of the plan, at least equivalent to the value of the secured claimant's interest in the debtor's property subject to the liens.
The condition that a plan be "fair and equitable" with respect to a non~accepting class
24 25 26
27 28
of unsecured claims includes ihe requirement that either: (1) the plan provides that each
holder of a claim of such class receive or retain on account of such cli:im property of a value, as of the Effective Date, equal to the allowed amount of such claim; or (2) the holder of any
claim or interest that is junior to the claims of such class will not receive or retain any
property uner the plan on account of such
junior claim or interest.
The condition that a plan be "fair and tquit::ble" with respect to a non-accepting class or interests includes the requirements that either: (i) the plan provide that each holder of an
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interest in such class receive or retain under the plan, on account of such interest, property of a value, as of the effective date of tile plan, equal to the greater of (a) the allowed amount of any fixed liquidation preference to which such holder is entitled, (b) any fixed redemption price to
which such holder is entitled or (c) the value of such interest; or (2) if the class does not
receive such an amount as required under (I), no class of interests
junior to the non~accepting
4
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class may receive a distribution under the plan.
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The First Lien Steering Committee shall seck Confirmation of the Plan pursuant to section 1129(b) of the Bankruptcy Code with respect to any Impaired Class, as applicable, presumed to reject the Plan, and the First Lien Steering Committee reserves the right to do so with respect to any other rejecting Class of Claims or Interests, as applicable, or to modify the Plan. Section 1129(a)(10) of the Bankruptcy Code shall be satisfied for purposes of Confirmation by acceptance of the Plan by at least one Class that is Impaired under the Plan.
The First Licn Stccring Committee submits that if the First Lien Steering Committee the Bankruptcy Code, the Plan will be I 29(b) of structured such that it does not "discriminate unfairly" and satisfies the "fair and equitable" requirement. With respect 10 the unfair discrimination requirement, all Classes under the Plan
"crams down" the Plan pursuant to section I
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are provided treatment ihat is substantially equivalent to the trcalment that is provided to other
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Classes that have equal nmk. If the First Lien Steering Committee seeks to "cram down" the Plan on Holders of Secured Claims, all such Holders shall receive a distribution that satisfies the fair and equitable requirement. The Plan also satisfies the fair and equitable requirement
with respect to Holders of Unsecured Claims because even though such Holders wil not
receive payment in full on account of
the Allowed amount of their Claims, no junior Claim or
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Interest receives any distribution under the Plan. Holders of Interests will receive no distribution under the Plan, but there is no junior Claim or Interest that wil receive any
distribution under the Plan either. Therefore, the requirements of section 1 l29(b) of the
..
18 19
Bankruptcy Code would be satisfied in the event that the First Lien Steering Committee is required to "cram down."
Article
VI.
CERTAIN FACTORS TO BE CONSIDERED PRIOR TO VOTING

HOLDERS OF CLAIMS ENTITLED TO VOTE ON THE PLAN SHOULD READ AND CONSIDER CAREFULLY THE FACTORS SET FORTH BELOW, AS WELL AS THE
20
21
22 23
OTHER INFORMAllON SET FORTH IN THE DISCLOSURE STATEMENT AND

RELATED DOCUMENTS, REFERRED TO OR INCORPORATED BY REFERENCE IN TIlE DISCLOSURE STATEMENT, PRIOR TO VOTING TO ACCEPT OR REJECT THE PLAN. THIS ARTICLE PROVIDES INFORMATION REGARDING POTENTIAL RISKS
24
25
IN CONNECTION WITH THE PLAN AND THE FINANCIAL PROJECTIONS INCLUDED AS EXHIBITS D AND E TO THE DISCLOSURE STATEMENT. THESE
FACTORS SHOULD NOT, HOWEVER, BE REGARDED AS CONSTITUTING THE
26 27
28
ONLY RISKS INVOLVED IN CONNECTION WITH THE PLAN AND ITS

IMPLEMENTATION.
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A. Certain Bankruptcy Considerations
I. The First Lien Steering Committee Mav Not Be Able to Obtain Confirmation
of
J
4
5
the Plan.
The First Lien Steering Committee cannot ensure that they will receive the requisite acceptances to confirm the Plan. Even if the First Lien Steering Committee receives the requisite acceptances, the First Lien Steering Committee cannot ensure that the Bankruptcy
Court wil confirm the Plan. A non-accepting Holder of Claims and Interests might challenge the adequacy of the Disclosure Statement or the balloting procedures and results as not being
in compliance with the Bankruptcy Code or Bankruptcy Rules. Even if the Bankruptcy Court
6
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determined that the Disclosure Statement and the balloting procedures and results were
8 9 10
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appropriate, the Bankniptcy Court could still decline to confirm the Plan if it found that any of the the statutory requirements for Confirmation had not been met, including that the terms of Plan are fair and equitable to non~accepting Classes. As discussed in further detail in Article V herein, section i 129 ofthc Bankruptcy Code sets forth the requirements for confirmation and requires, among other things: (a) a finding by the Bankruptcy Court that the plan "does not unfairly discriminate" and is "fair and equitable"
with respect to any nun~accepling classes; (b) conlirmation of the plan is not likely to be
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followed by a liquidation or a need for further financial reorganization; and (c) the value of
distributions to non~accepting holders of claims and interests within a particular class under
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the plan will not be less than the value of distributions sueh holders would receive if the debtors were liquidated under chapter 7 of the Bankruptcy Code. While there can be no
assurance that these requirements wil be met, the First Lien Steering Committee believes that the Bankruptcy Code. the Plan complies with section i 129 of
Confirmation and Consummation also are subject to certain conditions described in
Article V herein. If the Plan is not confirmed, it is unclear what distributions Holders of
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Claims or Interests ultimately would receive and it is possible that an alternative plan would result in substantially less favorable treatment for Holders of Claims or Interests than such Holders would receive under the Plan.
2. The Bankruptcy Court Mav Not Approve the Compromise and Settlement
20
21
Contemplated Bv the Plan
22
23
As described in more detail in Article Article IV.J.3 herein, the Plan constitutes a settlement, compromise and release of rights arising from or relating to the allowance, classification and treatment of all Allowed Claims and Allowed Interests and their respect
distributions and treatments under the Plan and takes into account, and conforms to, the
24 25 26 27
relative priority and rights of the Claims and lnterests in each Class in connection with any contractual, legal and equitable subordination rights relating thereto whether arising under general principles of equitable subordination or section 5 i O(b) or (c) of the Bankrptcy Code. This settlement, compromise and rclcase rcquires approval by the Bankruptcy Court in the Conlirmation Order. The First Lien Steering Committee cannot ensure that the Bankruptcy
Court wil approve the settlement described in Article VIII.C. of
the Plan.
28
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3. Parties in Interest Mav Object to ihe First Lien Steering Committee's
2
3
Classification ofClaiins
Section 1122 of the Bankruptcy Code provides that a chapter 11 plan may classify a
4
5
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claim or an interest in a particular class only if such claim or interest is substantially similar to the other claims or interests in such class. The First Lien Steering Committee believes that the classification of Claims and Inlerests under the Plan complies with the requirements set forth in ihe Bankruptcy Code. However, there is no assurance that the Bankruptcy Court wil hold Claims and Interests complies with the Bankruptcy Code. that the Plan's classification of
4. Failure to Satisfy Vote Requirement
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If votes are received in number and amount suffcient to enable the Bankruptcy Court
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to confirm the Plan, the First Lien Steering Committee intends to seek Confirmation as
promptly as practicable thereafter. In the event that suffcient votes arc not received, the First Lien Steering Committee may propose an alternative chapter 11 plan. There can be no assurance that the terms of any such alternative chapter 11 plan would be similar to or as favorable to the Holders of Allowed Claims as those proposed in the Plan.
5. The First Lien Steering Committee. the Debtors or the Reorganized Debtors
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May Object to the Amount or Secured or Priority Status of a Claim
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The Debtors, the Reorganized Debtors and the First Lien Steering Committee reserve the right to object to the amount or the secured or priority status of any Claim or Interest. The es1mates set forth in the Disclosure Statement cannot be relied on by any Holder of a Claim or Interest whose Claim or Interest is subjcct to an objection. Any siich Holder of a Claim or
Interest may not reccive its specified share of the estimated distributions described in the
.,
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6. Procedures for Continl!ent and Unliquidated Claims
19
20
21
Notwithstanding any language in any Proof of Claim or otherwise, the Holder of a contingent or unliquidaied Claim shall not be entitled to receive or recover any amount in
excess of the amount: (a) stated in the Holder's Proof of Claim, if any, as of Record Date; or (b) if the Proof of
the Distribution
22
23
Claim does not ascribe a monetary value to such Holder's Claim on the Distribution Record Date, the amount the First Lien Steering Committee elects to withhold on account of such Claim.
7. Nonconsensual Confirmation
24 25 26 27
In the event that any impaired class of claims or interests does not accept a chapter II plan, a bankruptcy court may nevertheless conlrm such plan at the plan proponent's request if
at least one impaired class has accepted the plan (with such acceptance being determined
without including the vote of any "insider" in such class), and as to each impaired class that
has not accepted the plan, the bankruptcy court determines that the plan "does not
discriminate unfairly" and is "fair and equitable" with respect to the dissenting impaired
28
classes. The first Lien Steering Committee believes that the Plan satisfies these requirements,
and the First Lien Steering Committee may request such Ilonconscnsual Confirmation in
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accordance with section I i 29(b) of the Bankruptcy Code. Nevertheless, there can be no
2
3
assurance that ihe Bankruptcy Court wil reach this conclusion.

B. Other Considerations
I. Avoidance Action Analysis
4
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The First Lien Steering Committee has not yet comprehensively evaluated all of the preference and fraudulent transfer claims that the Debtors may have against third parties. The Debtors Filed their Schedules listing aU transfers that the Debiors made within ninety days of
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the Petition Date and all transfers to insiders made by the Debtors within one year of the Petition Date. All such transfers listed in the Schedules may he the subject of an Avoidance Action to set aside the transfer if ihe transfer is avoidable under Bankruptcy Code sections
544, 545, 547, 548, 549, or 550, or otherwise except as expressly released by the Plan.
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Accordingly, the Reorganized Debtors or Litigation Trust, as applicable, will retain rights to seek to avoid any transfer made within ninety days of the Pelition Date and one year of the Petition Date (as to Insiders) or such longer periods as may be available under applicable nonbankruptcy law.
II
12
13 14
15
The listing of transfers made by the Debtors within ninety days (for non-insiders) and one year (for Insiders) that may be potentially avoidable as preferences is not included in this
Disclosure Statement. Copies or the Schedules (which include the identification of transfers
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made by the Debtors within ninety days (for non-insiders) and one year (for Insiders)) are on tile with the Bankruptcy Court and also available for review on the Claims and Solicitation Agent's website, www.onmimgmtlrhodes. Creditors and interested parties are encouraged to
review such Schedules to determine if any transfers made to a particular Creditor are included thereon. Any such transfers listed in the Schedules may be the subject of an Avoidance Action
16
17 18 19
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to set aside the transfer if ihe transfer is avoidable. However. with respect to such transfers listed on the Debtors' Schedules, the First Lien Steering Committee has not yet detennined whether the transferees arthose transfers would have defenses to an avoidance action.
2. Other Potential Litigation Recoveries
20
21
In addition to Avoidance Actions, (he First Lien Steering Committee has been
reviewing available information regarding potential Causes of Action against
third parties and,
possibly, Affliates and/or Insiders of the Debtors, which review is ongoing and which wil
22
continue to be conducted by the First Lien Steering Committee, the Reorganized Debtors
2)
24
25
and/or their respective successors or representatives after the Effective Date. Due to the size
and scope of the business operations of the Debtors and the multitude of
business transactions
therein, there may be vuious Causes of Action that currently exist or may subsequently arise in addition to any matters identified in the Plan. The potential net proceeds from the potential
Causes or Aciion identified herein or that may subsequently arise or be pursued are
speculative and uncertain. Prcpetition, the Debtors were party to numerous lawsuits. A list of the pending litigation in which the Debtors were a party as orthe Petition Date is attached to
the Disclosure Statement as Exhibit F.
26 27 28
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3
Except as expressly released through the Plan, existing or potential Causes of Action that may be pursued by the Debtors and/or their respective successors or representatives (as applicable) include, without implied limitation, the following: (a) any and all Avoidance Actions; (b) any and all litigation against Affliates and Insiders; (c) all other Causes of Action and Defenses identified on Exhibit L to the Disclosure Statement; (d) any other Causes of
Action against current or former offcers, directors, and/or employees of the Debtors,
4
5
including without implied limitation, any pending or potential claims with respect to directors and ollcers' insurance coverage for the Debtors' current or former offeers and directors; (e)
any and all Causes of Action relating to the matters listed on the Debtors' Schedules; (I) any
6 7
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other litigation, whether legal, equitable or statutory in nature, arising out of, or in connection
with the Debtors' businesses or operations, including, without limitation: disputes with
suppliers and customers, overpayments, any amounts owed by any creditor, vcndor or other
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entity, employee, management, or operational matters, disputes with current or former

employees, financial reporting, environmental matters, insurance matters, accounts receivable, warranties, contractual obligations, or tort c1aiins that may exist or subsequently arise; and (g) any Causes of Action not expressly identified herein or in the Plan.
3. Estimation of
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Before or after the Effective Date, the Debtors, the First Lien Steering Committee, or the Reorganized Debtors, as applicable, may (but arc not required to) at any time request that the Bankruptcy Court estimate any Disputed Claim that is contingent or unliquidated pursuant to section 502(c) of the Bankruptcy Code for any reason, regardless of whether any party previously has objected to such Claim or whether the Bankruptcy Court has ruled on any such
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objection, and the Bankruptcy Court shall retain jurisdiction to estimate any such Claim, including during the litigation of any objcction to any Claim or during the appeal relating to such objection. Notwithstanding any provison otherwise in the Plan, a Claim that has becn expunged from the Claims Register, but that either is subject to appeal or has not been the subject of a Final Order, shall be deemed to be estimated at zero dollars, unless othenvise
ordered by the Bankruptcy Court. In the evcnt that the Bankruptcy Court estimates any
contingent or unliquidated Claim, that estimated amount shall constitute a maximum
limitation on such Claim for all purposes under the Plan (including for purposes of
distributions), and the relevant Reorganized Debtor may elect to pursue any supplemental
proceedings to object to any ultimate distribution on such Claim. Notwithstanding section
20
21
5020) of the Bankruptcy Code, in no event shall any Holder of a Claim that has been
estimated pursuant to section 502(c) or (he Bankruptcy Code or otherwise be entitled to seek reconsideration of such estimation unless such Holder has Filed a motion requesting the right to seek such reconsideration on or before twenty days after the date on which such Claim is estimated.
22
23
24
25
c.
Plan Risk Factors
26 27 28
Although the First Lien Steering Committee believes that the Plan is confirmable,
therc arc some risks to thc pcrfonnance of the Plan. Certain specific risks 10 performance of
the Plan are described below. In particular, distributions to Holders of First Lien Lender Secured Claims are driven by the success of the Reorganized Debtors in, among other things,
the development and completion of their real property assets and sale or other disposition
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2
3
thereof. Additionally, because of the significant issues that must be addressed with respect to the allowance of Clainis, there may be significant delay before any distribution is made on account of Allowed Claims. However, the First Lien Steering Committee believes the very same risks described herein arc present in, and significantly greater to Creditors in, chapter 7
cases.
4
I. The Chapter 7 liquidation Analysis and Going Concern Analysis Are Based on
5
Estimates and Numerous Assumptions
6
7
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Underlying the chapter 7 Liquidation Analysis and Going Concern Analysis arc a number of estimates and assumptions that, although developed and considered reasonable by
RCLCO, arc inherently subject to economic, business and competitive uncertainties and
8
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contingencies beyond the First Lien Steering Committee's or RCLCQ's control. Accordingly,
there can be no assurance that the values assumed in the chapter 7 Liquidation Analysis or
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Going Concern Analysis will be realized.

2. The Reorganized Debtors May Lose the Services of Critical Employees with
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Extensive Knowledge of Operations
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The First Lien Steering Committee believes that the Reorganized Debtors' ability to maximize the value of the Debtors' estates pursuant to the Plan wil depend to a large extent on the efforts of certain employees currently working for the Debtors, which personnel have substantial experience with and knowledge of the Debtors' businesses, operations and assets.
While the Reorganized Debtors hope to retain such employees' services after the Effective
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Date, to the extent needed, it is possible that some or many of said employees may resign or otherwise leave the employ of the Reorgi:nized Debtors. In such case, the business related efforts undertaken pursuant to the Plan may be negatively affected, resulting in potentially less recovery for Creditors under the Plan.
3. The Reorganized Debtors May Not Be Successful With Respect to Contested
.,
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Claims
20
21
If
the First Lien Steering Committee, the Reorganized Debtors, and/or their successors
or representatives under the Plan are unsuccessful in their objections to contested and
contingent Claims that have been Filed against the Estates or their Avoidance Actions, the
22 23 24
25
liabilities wil be greater than expected, and there may be less Cash available for distribution to Holders of unsecured non-priority Claims. The First Lien Steering Committee intends to vigoroiisly oppose the allowance of all Claims that it believes are either entirely or in part without merit and prosecute Avoidance Actions and other Causes of Action. However,
Estates' total
if the First Lien Steering Committee's objections and actions arc not upheld by the
26 27 28
Bankruptcy Court, and the applicable Claims are Allowed in amounts in excess of the amounts that have been accrued by the Debtors, the total liabilties of the Debtors wil be greater than expected, and there will be less Cash than expected available for distribution to
Creditors.
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4. Litigation Recoveries and Results Arc Hii:hlv Speculative and Uncertain
2
0
The success of the Litigation Trust, Reorganized Debtors and/or their respective successors or representatives under the Plan in pursuing Avoidance Actions and/or other Causes of Action and defenses, is speculative and uncertain. Litigation may be complex and
involve significant expense and delay. Furthennore, even jf successful in the Causes of
Action, in some cases, the Litigation Trust, Reorganized Debtors and/or their respective
4
5 6
successors or representatives under the Plan may encounter diffculty in collection. Although potential litigation recoveries are not included in the First Lien Steering Committee's Plan
Distribution Analysis or chapter 7 Liquidation Analysis, sueh recoveries may have a

significant impact upon the distributions that may be made to Creditors.
7
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THESE CONSIDERATIONS CONTAIN CERTAIN STATEMENTS THAT ARE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF TIE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. WORDS SUCH AS "EXPECT;. "PLANS," "ANTICIPATES;' "INDICArES," "BELIEVES," "FORECAST," "GUIDANCE,"
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"OUTLOOK" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD LOOKING STATEMENTS. ADDITIONALLY, FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS WHICH DO NOT RELATE SOLELY TO
HISTORICAL FACTS, SUCH AS S'IATEMENTS WHICH IDENTIFY UNCERTAINTIES OR TRENDS, DISCUSS THE POSSIBLE FUTURE EFFECTS OF CURRENT KNOWN TRENDS OR UNCERTAINTIES OR WHICH INDICATE THAr THE FUTURE EFFECTS
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OF KNOWN TRENDS OR UNCERTAINTIES CANNOT BE PREDICTED,

GUARANTEED OR ASSURED. THESE STATEMENTS ARE SUBJECT TO A NUMBER OF ASSUMPTIONS. RISKS AND UNCERTAINTIES, MANY OF WHICH ARE BEYOND
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16 17 18 19
THE CONTROL OF THE DEBTORS, THE REORGANIZED DEBTORS OR THE FIRST
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LIEN STEERING COMMIlTEE INCLUDING, WITHOUT LIMITATION, THOSE
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DESCRIBED ELSEWHERE IN THIS DISCLOSURE STATEMENT, THE IMPLEMEN.j)I:rION OF THE PLAN, THE CONTINUING AVAILABILITY OF
SUFFICIENT BORROWING CAPACITY OR OTHER FINANCING TO FUND
OPERATIONS, NATURAL DISASTERS AND UNUSUAL WEATHER CONDITONS,
TERRORIST ACTIONS OR ACTS OF WAR, ACTIONS OF GOVERNMENTAL BODIES
20
21
AND OTHER MARKET AND COMPETITIVE CONDITIONS. HOLDERS OF CLAIMS AND INTERESTS ARE CAUTIONED THAT THE FORWARD LOOKING STATEMENTS
22
23 24 25
SPEAK AS OF THE DATE MADE AND ARE NOT GUARANTEES OF FUTURE PERFORMANCE. ACTUAL RESULTS OR DEVELOPMENTS MAY DIFFER MATERIALLY FROM THE EXPECTATIONS EXPRESSED OR IMPLIED IN THE FORWARD LOOKING STATEMENTS, AND NONE OF THE DEBTORS, THE
REORGANIZED DEBTORS OR THE FIRST LIEN STEERING COMMIlTEE SHALL BE REQUIRED TO UNDERTAKE OR HAVE ANY OBLIGATION TO UPDATE ANY SUCH
STATEMENTS. ADDITONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO TIE FIRST LIEN STEERING COMMIlTEE OR THAT THE FIRST LIEN
STEERING COMMllTEE CURRENTLY BELIEVES TO BE IMMATERIAL MAY ALSO IMPAIR THE DEBTORS' BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND THE VALUE OF THE DEBTORS' ESTATES. IF ANY OF THE RISKS OCCUR, THE DEBTORS' BUSINESS, FINANCIAL CONDITON, OPERAllNG RESULTS AND THE VALUE OF THE DEBTORS' ESTATES, AS WELL AS THE FIRST
26 27 28
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LIEN STEERING COMMITTEE'S ABILITY TO CONSUMMATE THE PLAN, COULD

2
3
E MAlERIALLY ADVERSELY AFFECTED.
ArticJeVII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following discussion summarizes certain federal income tax consequences or the
implementation of the Plan to the Debtors and certain Holders of Claims. Tax consequences
for the Reorganized Debtors are addressed iii Article VlI.A. below. The following
4
5
6 7
E
summary is based on the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code" or "IRe"), Treasury Regulations promulgated thereunder (the "Regulations"), judicial decisions and published administrative rules and pronouncements of the Internal Revenue
Service as in effect on the date hereof. Changes in such rules or new interpretations thereof
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may have retroactive effect and could significantly affect the federal income tax consequences
described below.
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The federal income tax consequences of the Plan are complex and are subject to significant uncertainties. The First Lien Steering Committee has not requested and wilJ not request a ruling from the Internal Revenue Service or an opinion of counsel with respect to the Plan. Thus, no assurance can be given as to the interpretation that any ofthe tax aspects of the Internal Revenue Service wil adopt. In addition, this summary docs not address foreign, state or local tax consequences of the Plan, nor does it purport to address the federal income tax consequences of the Plan to special classes of taxpayers (such as Persons who arc related to the Debtors within the meaning of the lntemal Revenue Code, foreign taxpayers, broker dealers, banks, mutual funds, insurance companics, financial institutions, small business
investment companies, regulated investment companies, tax exempt organizations, investors
in pass through entities and Holders of Claims who arc themselves in bankruptcy).
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Furthermore, this discussion assumes that Holders of Claims hold only Claims in a single
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Class. Holders of Claims should consult their own tax advisors as to the effect such
18 19
ownership may have on the federal income tax consequences described below.
This discussion assumes that, except as recharacterized by a Final Order of the
20
21
Bankruptcy Court, the various debt and other arrangements to which the Debtors are a party will be respected for federal income tax purposes in accordance with their form.
22
23
ACCORDINGLY, THE FOLLOWING SUMMARY OF CERTAIN FEDERAL

INCOME TAX CONSEQUENCES is FOR INFORMATIONAL PURPOSES ONLY AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING AND ADVICE BASED UPON THE INDIVIDUAL CIRCUMSTANCES PERTAINING TO A HOLDER OF A CLAIM. THEIR OWN TAX ADVISORS ALL. HOLDERS OF CLAIMS ARE URGED TO CONSULT
24
25
FOR THE FEDERAL, STATE, LOCAL AND OTHER TAX CONSEQUENCES

APPLICABLE UNDER THE PLAN.
26 27
28
INTERNAL REVENUE SERVICE CIRCULAR 230 DISCLOSURE, TO ENSURE
COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE UNITED STATES INTERNAL REVENUE SERVICE, ANY TAX ADVICE CONTAINED IN THIS
DISCLOSURE STAlEMENT (INCLUDING ANY AllACHMENTS) IS NOT INTENDED
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OR WRIITEN TO BE USED, AND CANNOT BE USED, BY ANY TAXPAYER FOR THE

2
3
PURPOSE OF AVOIDING TAX RELATED PENALllES UNDER THE INTERNAL REVENUE CODE. TAX ADVICE CONTAINED IN THIS DISCLOSURE STATEMENT
(INCLUDING ANY ATTACHMENTS) IS NOT WRIITEN TO SUPPORT THE

PROMOTION, MARKETING OR RECOMMENDAflON TO ANOTHER PARTY OF THE TRANSACTIONS OR MAITERS ADDRESSED BY mis DISCLOSURE STATEMENT.
4
5
EACH TAXPAYER SHOULD SEEK ADVICE BASED ON THE TAXPAYER'S

PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT
TAX ADVISOR.
6
A. Certain U.S. Federal Income Tax ConseQuences to Reorganized Debtors
7
E
i . Introduction
8 9
The majority of the Debtors are either partnerships (general or limited) or LLCs. For U.S. federal income tax purposes, the single member limited liabilty companies have not elected to be treated as associations taxable as corporations. Debtors that are multi-member LLCs arc taxed as partnerships for U.S. federal income tax purposes. The First Lien Steering Committee does not believe that the Debtors wil suffer any adverse tax consequences as a
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result of the consummation of the Plan.

2. Partnership
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A partnership is not itself a taxpaying entity for U.S. federal income tax purposes, and a partnership's income or loss (and items thereof) for each taxable period during which it is in existence is allocated among its partners, who are required to report the income or loss (and
items thereof) allocated to them on their own tax returns. Generally, a partner is not allowed
to deduct his or her share of partnership losses for the year in excess of
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the adjusted tax basis
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of his or her interest in the partnership, detennined as of the end of the partnership's taxable year n which the loss occurs. Any excess is allowed in any subsequent year in which the adjusted tax basis increases. A pariner's tax basis is initially equal to the amount of cash and the adjusted tax basis of property contributed to the partnership.
Thereafter, tax basis increases for such items as additional contributions and the
20
21
22
23
24 25
partner's share of taxable and tax-exempt income and gain, and tax basis decreases for such items as distributions and the partner's share of losses. An increase in a partner's share of partnership liabilities or a partner's assumption of partnership liabilities is treated as a cash contribution to the partnership that increases tax basis, and a decrease in a partner's share of partnership liabilties or the assumption by the partnership of a partner's liabilties decreases tax basis, but not below zero. (Cash distributions, including a decrease in a partner's share of partnership liabilities, in excess of tax basis is taxable and generally treated as gain from the sale of a partnership interest.) A partner shares partership recourse liabilities to the extent the
partner bears the economic risk of loss with respect to the liabilities, i.e., based on a
hypothetical partnership liquidation at a time when the partnership has no assets, after taking into 3ccount any rights of contribution or reimbursement from other partners or third parties that are related to other partners. A partner also shares partnership nonrecourse liabilities.
26 27
28
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3. Cuncelhition or Indebtedness Income
)
4
5
Under the Internal Revenue Code, cancellation of indebtedness ("COD") income is recognized by a partnership to the extent, and at the time, that certain debts arc discharged for less than full payment. The COD income recognized at the partnership level is then allocated
among the partners pursuant to the allocation provisions of
the partnership agreement, fsuch
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provisions comply with the requirements of the Internal Revenue Code regarding allocations, or, if not, in accordance with the partners' interests in the partnership. The amount of COD income, in general, is the excess of (a) the adjusted issue price of the indebtedness satisfied, over (b) the sum of (x) the amount of cash paid, (y) the issue price of debt that is not publicly traded nor deemed exchanged for publicly traded property and (z) the lir market value of any new consideration (including partnership interests) given in satisfaction of such indebtedness
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at the time of the exchange. COD income also includes any interest that the taxpayer deductcd under the accrual method of accounting but remains unpaid at the time the indebtedness is discharged. COD income generally does not include the discharge of
indebtedness to the extent the payment of
10
the liability would have given rise to a deduction.
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The Plan currently contemplates that Neweo wil hold the assets of some and the
equity of at least one of the Reorganized Debtors, which ordinarily would result in COD income upon the discharge of the debts. Based on Revenue Ruling 99-6, however, the
I)
14
15
purchase of the membcrship interests in Heritage Land Company, LLC, however, may be treated as a taxable exchange of their membership interests by its members resulting in the
recognition of gain or loss to the members based on a sales price of$IO plus the amount of
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First Lien Lender Secured Claims, and as a purchase of assets for their then tir market value
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by Newco, with any cancellation of debt attributable to the former members of Heritage. Because the Plan provides that Holders of certain Allowed Claims wil receive Newco Equity Interests, the sales price and/or the amount of COD income will depend on the fair market value of the Newco Equity Interests exchanged therefor. This value cannot be known with
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19
certainty until after the Effective Date. The Plan provides that any cancellation of
indebtedness that may be derived from the foregoing transactions be allocable to the holders of the Old Equity Interests. However, it is unclear whether this provision wil be binding on the Internal Revenue Service.
Because most of the Debtors' indebtedness is owed by entities that are partnerships or disregarded entities for U.S. federal income tax purposes, virtually all of the Debtors' COD income that wilJ be generated from the Plan wil be allocated to the members of Heritage
20
21
22 23 24
25
Land Company LLC or other Reorganized Debtor based on iheir respective percentage
ownership interests in Heritage Land Company LLC or other Reorganized Debtor. Under the that income wil U.S. federal income tax rules dealing with COD income, the tax treatment of
be determined with respect to each member at the member leveL.
26 27
28
A member of Heritage Land Company LLC or other Reorganized Debtor wm not be COD income in gross income fthe member is (i) under the jurisdiction of a eourt in a case under chapter i i of the Bankruptcy Code and he discharge of debt occurs pursuant to that proceeding or (ii) insolvent before the Effective Date (in which, the COD income may be excluded to the extent of the insolvency). As a consequence of such exclusion, a member must reduce its tax attributes by the amount of COD income that it
required to include any amount or
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2
3
4 5
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excluded from gross income pursuant 10 section 108 of the IRe. In general, tax attributes wil be reduced in the following order: (a) net operating losses ("NOLs"); (b) most tax credits and capital loss carryovers; (e) tax basis in assets; and (d) foreign tax credits. A member with COD income may elect first to reduce the basis of its depreciable assets pursuant to section I08(b)(5) of the IRe. Nonetheless, any attribute reduction wil be applied as of the first day following the taxable year in which a member recognizes COD income. If a member has a suspended loss with respect to ts membership interest in Heritage Land Company LLC, the allocation fCOO income may allow some or all of such suspended losses to be used to offet the COD income.
A recently enacted amendment to the COD income rules provides that taxpayers that
recognize COD income in 2009 or 2010 may elect to fOrgo the COD income exclusion and
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attribute rcduction rules described above. Instead, the taxpayer may elect to take into taxable income the COD income with respect to such debt in equal installments in 2014 through 2018 the COD income in each such year). This election to (Le., the taxpayer would report 20% of
defer COD income is made separately with respect to each debt instrument on which COD
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income is realized, must be made on the taxpayer's tax return for the year that includes the transaction that creates the COD income, and, in the case of debt of a partnership, is made at the partnership level, but recent IRS guidance allows taxpayers to make partial elections and permits partnerships to choose which partners defer which amount, if any. The guidance also
provides that a taxpayer is not required to make an election for the same COD income portion
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arising from each reacquired applicable debt instrument, though he or she may make an
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election for difl'crcnt portions of such income arising from different applicable debt
instruments. The Debtors have not yet determined whether such an election wil be made with
respect to the COD income generated in connection with the consummation of
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4. Recent Tax Amendments

17 18
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The law governing net operating loss ("NOL") carrybacks was amended November 6, 2009. It permits taxpayers to clect to carry back either their 2008 or 2009 operating losses for 3, 4 or even 5 years, rather than the normal 2 years_ Losses may be carried back 3 or 4 years to offset all income generated in those years. Losses carried back the 5th year can only offset
half of the income in that year. In addition, this law suspends the application of the normal
20
21
year that NOLs can only onset 90% of alternative minimum taxable income for losses for the
carry
backs covered by this provision. Taxpayers may fie an irrevocable election to carr
22
23
back 2008 or 2009 losses (but not both 2008 and 2009 losses) for ihis extended period at any time up to the due date of their 2009 returns (including extensions). The Rhodes Entities may realize additional tax benefits as a result of tile foregoing amendment.
24
25
In the case of a partnership (or LLC treated as a partnership for tax purposes), these
rules apply at the partner level, with the partner including its allocable share of the entity's
losses. In the case of an S corporation, similar rules apply, albeit with different limitations on
26 27 28
the ability to use such losses due to different basis rules. Since the Debtors' businesses were
not carried on by a corporation, but were carried on through pass-through entities (i.e., partnerships. LLCs taxable as partnerships, an S corporation, and LLCs disregarded for tax
purposes), this legislation will not result in any recoveries to the Debtors from carrying back NOLs the additional three years.
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3
8.
Certain fedenillncome Tax Consequences La Holders olClaiins

I. Consequences to Holders of Allowed Class A-I First Lien Lender Secured
Claims
4
5
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On the Effective Date, each of the First Lien Lenders shaJl receive (i) its pro rata share the First Lien Lenders' Collateral, (ii) its pro rata the Newco share or 100% of the New First Lien Notes, and (iii) its pro rata share of 100% of its Allowed Secured Claim. Equity Interests on account of
of$l.5 million in Cash from the proceeds of
a. New First Lien Notes

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(i) Significant Modification
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The U.S. federal income tax consequences of the exchange of an Allowed First Lien Lender Secured Claim for an interest in the New First Lien Notes will dept:nd on whether the exchange results in a "significant modification" of the Allowed First Lien Lender Secured Claims (i.e., whether the terms of the New First Lien Notes are significantly different from the
terms of the First Lien Lender Secured Claims exchanged therefor). The Treasury
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Regulations under section 1001 of the IRC provide specific rules for determining whether
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certain modifications are "significant." One such rule provides that a change in the annual yield of an instrument wil be considered "significant" if the modified rate varies from the original rate by more than the greater of (a) 25 basis points and (b) 5 percent of the annual yield of the unmodified instrument. Another rule provides that the deferral of a scheduled payment will be considered 'significant' unless the deferred payments are unconditionally payable during the period that begins on the initial due date for such payment and extends for the lesser of five years or 50% of the original term of the debt instrument. The exchange should result in a significant modification of the First Lien Lender Secured Claims because the terms of the New First Lien Notes, including the issuer, the interest rate and maturity date, are significantly different from the terms of the First Lien Lender Secured Claims. Therefore, the exchange of Allowed First Lien Lender Secured Claims for New First Lien Notes should
be a taxable i.xehange under section 1001 of
20
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the IRC.
Gain or
(ii) Recognition of
Loss
22 23 24
25 26 27 28
A Holder who receives New First Lien Notes with respect to an Allowed First Lien Lender Secured Claim will generally recognize income, gain or loss for U.S. federal income tax purposes in an amount equal to the difference between (a) the issue price (as described
below) of any New First Lien Notes received and (b) the Holder's adjusted basis in its
Allowed First Lien Lender Secured Claim. Such gain or loss may be capital in nature (subject to the "market discount" rules described below) and may be long-term capital gain or loss if
the First Lien Lender Secured Claims were held for more than one year. l the extent that a
portion of the New First Lien Notes received represents accrued but unpaid inlerest that the
Holder has not already included in income, the Holder may recognize ordinary interest income (3S described below). A Holder's tax basis in any New First Lien Notes received should equal the issue price or the New First Lien Notes as of the date distributed to the
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Holder, and a Holder's holding period for the New Firs! Lien Notes should begin on the day following the exchange.
(iii) Stated Interest and Original Issue Discount
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A Holder of the New First Lien Notes will be required to include stated interest on the
New First Lien Notes in income in accordance with the Holder's regular method of
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accounting to the extent such stated interest is "qualified staled interest." AJI stated interest on the New First Lien Notes that is unconditionally payable in Cash or property (other than debt
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instruments of the issuer, such as PIK interest (discussed below)) at least annually wil be generally treated as "qualified stated interest". The amount of qualified staled interest and the amount of original issue discount ("OlD"), if any, that accrues during an accrual period on a New First Lien Note wil be calculated by assuming that LlBOR is a fixed rate equal to the
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value of LlBOR as of the issue date. The qualified stated interest allocable to an accrual
period is increased (or decreased) if
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the interest actually paid during an accnial period exceeds
(or is less than) the interest assumed to be paid during the accrual period pursuant to the
foregoing rules.
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Because the New First Lien Notes provide for the payment of PIK interest in lieu of paying Cash interest, the New First Lien Notes will be treated as issued with OlD. The payment of PIK interest wil generally not be treated as a payment of interest for federal
income tax purposes. Instead, a New First Lien Note and any PIK interest wil be treated as a
single debt instrument under the 010 rules. For u.s. federal income tax purposes, increasing
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the principal amount of the New First Lien Notes wil generally be treated the same as the payment ofPIK interest.
Each Creditor wil generally be required to include 010 in iis gross income as such
010 accrues over the term of the New First Lien Notes without regard to the Creditor's
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regular method of accounting for u.s. federal income tax purposes and in advance of the
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19
receipt of Cash payments attributable to that income. Accordingly, a Holder could be treated
as receiving interest income in advance of a corresponding receipt of
Cash.
20
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The rules regarding OlD arc complex and the rules described above may not apply in
all cases. Accordingly, Holders should consult iheir own tax advisors regarding their
application.
b. Ncwco Equity Interests
22
23
(i) Exchange Treatment
24
25
the exchange of Allowed First For U.S. federal income tax purposes, the treatment of Lien Lender Secured Claims for Newco Equity Interests is unclear. Such exchange may be
treated (i) as a tax-free contribution of property to Heritage Land Company LLC or other the Internal Revenue Code or, alternatively, (ii) as a Reorganized Debtor under seciion 721 of
26 27
28
the Internal Revenue Code in its entirety. Under the regulations proposed by the Treasury, the exchange would be treated as a tax-free contribution. No gain or loss should be recognized with respect to ihe exchange of Claims for Newco Equity Inlerests and a Holder will have an initial tax basis in such Newco Equity
taable exchange under section 1001 of
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(ntcrests equal to the lax basis of the Secured Claims deemed exchanged therefor. A Holder's
2 3
holding period for the Newca Equity Interests should include the holding period of the
Secured Claims deemed exchanged therefor.
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If the proposed regulations do not apply and the exchange is treated as a taxable exchange, a Holder who receives Newco Equity Interests with respect to an Allowed First Lien Lender Secured Claim wil generally recognize income, gain or loss for U.S. federal income tax purpm;cs in an amount equal to the difference between (a) the fair value of the consideration received and (b) the Holder's adjusted basis in its Allowed First Lien Lender
Secured Claim. Such gain or loss may be capital in nature (subject to the "market discount"
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rules described below) and may be long-term capital gain or loss if the First Lien Lender Secured Claims were held for more than one year. To the extent that a portion of the consideration received represents accrued but unpaid interest that the Holder has not already
taken into income, the Holder may recognize ordinary interest income (see discussion below). A Holder's tax basis in Newco Equity Interests received should equal the fair market value of
the Newco Equity Interests as of the date distributed to the Holder, and a Holder's holding period for such instruments should begin on the day following the exchange.
Oi) Certain Tax Aspects of Holding and Disposing Newco Equity
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Interests
Upon the transfer of the Newco Equity Interests to the First Lien Lenders, Newco wil be treated for federal income tax purposes as a partnership on the Effective Date, and a holder
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of Newco Equity Interests wil be treated as a partner on that day. Each holder of Newco Equity Interests wil generally be considered a partner in Newco for federal income lax
purposes. Each such holder will be required to include its distributive share of the income,
gains, losses, deductions and credits of Newco on its own returns, whether or not any
distributions are made, and will not be taxable on distributions when received except to the
extent sueh distributions are in excess of the distributee's adjusted basis in the Neweo Equity
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20
21
Interests. In general, a holder's adjusted basis in Ncwco Equity Interests wil be increased by its additional capital contributions, if any, to Ncwco and by such holder's distributive share of income or gains of Newco, and the holder's adjusted basis in Newco Equity Interests wil be decreased by the amount of distributions to such holder and such holder's distributive share of
losses or deductions of New
co.
22
23
Since the deemed purchase of the Heritage I.and Company LLC assets wil occur on that date, Newco might recognize a loss equal to the difference between its basis in the First
Lien Lender Secured Claims and the value of the propert received. If it does, such loss
would be allocable to the holders of
the Neweo Equity Interests. Such allocation might not be
24 25
pro rala, but could vary depending on the basis of each such holders' interest, which wil in
turn depend on each First Lien Lender's basis in iis First Lien Lender Secured Claims.
26 27
28
Moreover, since Newco will have engaged in a trade or business while treated as a partnership for tax purposes, its members wil have a filing requirement to reporl such income of a U_S. federal income lax relurn. If a First Lien Lender is itself treated as a partnership for U.S. tax purposes, its members or partners ~ including foreign partners or U_S. exempt organizations could be required to fie a U.S. return.
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Once the eleciion is made (0 treat Newco as a corporation, the holders of the Newco
2
3
Equity Interests generally carry forward their basis in their interests (or shares, if Newco is converted to a corporation), and Newco generally carries forward its basis in its assets. To the
extent Newco's basis in its assets is greater than their value as of the election/conversion, it
\vill be required to reduce iis basis in iis shares to their fair market value or it may elect
4
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instead to have the holders of the Newco Equity Interests reduce their basis in such interests by such amount.
Any distributions made on the Newco Equity Interests will constitute dividends for U.S. federal income tax purposes to the extent of the current or accumulated earnings and
profits of New co, as determined under U.S. federal income tax principles_ To the extent that a U.S. Holder receives distributions that would otheiwise constitute dividends for U.S. federal income tax purposes but that exceed such current and accumulated earnings and profits, such distributions will be treated first as a non-taxable return of capital reducing the U.S. Holder's basis in iis shares. Any such distributions in excess of the U.S_ Holder's basis in its shares (detennined on a share~by-share basis) generally will be treated as capital gain. Subject to certain exceptions, dividends received by non-corporate u.S. Holders prior to 2011 will be taxed under current law at a maximum rate of 15%, provided that certain holding period requirements and other requirements arc met. Any such dividends received after 2010 wil be taxed at the rate applicable to ordinary income.
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Dividends paid to a U.s. Holder that is a corporation generally wil be eligible for the dividends~received deduction so long as there are suffcient earnings and profits. However, the
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dividends received deduction is only available if certain holding period requirements are satisfied. The length of time that a shareholder has held its stock is reduced for any period
during which the shareholder's risk of loss with respect to the stock is diminished by reason or
the existence of certain options, contracts to sell, short sales or similar transactions. In
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addition, to the extent that a corporation incurs indebtedness that is directly attributable to an investment in the stock on which the dividend is paid, all or a portion of the dividends
received deduction may be disallowed.
20
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The benefit of the dividends-received deduction to a corporate shareholder may be effectively reduced or eliminated by operation of the "extraordinary dividend" provisions of Section 1059 of the IRe, which may require the corporate recipient to reduce its adjusted lax
basis in its shares by the amount excluded from income as a result of the dividends-received
22 23
24
25 26
the excluded amount over adjusted tax basis may be treated as gain. A dividend may be treated as "extraordinary" if (1) it equals or exceeds 10% of the holder's adjusted tax basis in the stock (reduced for this purpose by the non-taxed portion of any prior extraordinary dividend), treating all dividends having ex-dividend dates within an 85-day period as one dividend, or (2) it exceeds 20% of the holder's adjusted tax basis in the stock, treating all dividends having ex dividend dates within a 365-day period as one dividend.
deduction. The excess of
Dividends paid to a Non-U.S_ Holder (to the extent paid out of our current or
accumulated earnings and profits, as determined for U.S_ federal income tax piirposes)
27 28
generally wil be subject to withholding of U.S. federal income tax at a 30% rate or such
lower rate as may be specified by an applicable income tax treaty.
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To claim the benefit of u tux treaty u Non-U.S. Holder must provide a properly
2
3
executed IRS Form W.8BEN (or such successor fOrm as the IRS designates), in the manner
described above, prior to ihe payment of
tile dividends. A Non-U.S. Holder that is eligible for
4
5
a reduced rate of U.S. withholding tax pursuant to an income lax treaty may obtain a refund from ihe IRS of any excess amounts withheld by fiing timely an appropriate claim for refund with the IRS.
A holder wil recognize gain or loss upon disposition of its Newco Equity Interests
equal to the difference between the amount such holder realizes in connection with the disposition and such holder's adjusted tax basis for such Newco Equity Interests. Any gain or loss will generally be capital gain or loss (which wil be long.term capital gain or loss if the
6
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Newco Equity Interest has been held in excess of 12 months), subject to the application of
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certain "recapture" provisions that convert capital gain into ordinary income in certin
circumstances. The deductibility of capital loses is subject to limitations.
2. Consequences to Holders of Allowed Class A-2 Second Lien Lender Secured
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Claims
l f the Second Lien Lenders vote in favor of ihe Plan, each of the Second Lien Lenders
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shall receive its pro rata share of 50% of the net proceeds of the Stanley Engineering Litigation on account of its Allowed Secured Claim.
A Holder who receives Cash with respect to an Allowed Second Lien Lender Secured Claim will generally recognize incomc, gain or loss for U.S. federal income tax purposes in an amount equal to the difference between (a) the amount of Cash received and (b) the Holder's adjusted basis in its AJlowcd Second Lien Lender Secured Claim. Such gain or loss may be capital in nature (subject to the "market discount" rules described below) and may be long-
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term capital gain or loss if the Class A-2 Claims were held for more than one year. To thc extent that a portion of the Cash received represents accrued but unpaid interest that the Holder has not already included in income, the Holder may recognize ordinary interest
income.
3. ConscQuences to Holders of Allowed Class A-3 Other Secured Claims
20
21
The following discussion assumes that each Holder of un Allowed Other Secured
Claim holds such claim as a "capital asset" within the meaning of Section 1221 of the IRC.
22
23
Pursuant to the Plan, each Allowed Other Secured Claim, at ihe election of the Reorganized Debtors, may be (i) Reinstated, (ii) paid in full in Cash, (ii) satisfied by the delivery of the
collateral securing such Claim and paying any interest required to be paid, or (iv) otherwise
24
25 26
rendered unimpaired. If an Allowed Other Secured Claim is Reinstated, the Holder of such Claim should not recognize gain or loss except to the extent that collateral securing such
Claim is changed, and the change in collateral constitutes a "significant modification" of the Allowed Other Secured Claim within the meaning of the Treasury Regulations promulgated under Section 1001 of the IRe. rfan Allowed Other Secured Claim is paid in fuH in Cash, the
27 28
Holder should recognize capital gain or loss (which capital gain or loss would be long-term capital gain or loss to the extent that the Holder has held the debt instrument underlying its
claim for more than one year) in an amount equal to the amount of Cash received over the
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3
Holder's adjusted basis in the debt imitruments underlying its Allowed Other Secured Claim. the Cash received represents accrued but unpaid interest thaI the To the extent that a portion of
Holder has not already laken into income, the Holder should recognize ordinary interest
income (as described below).
4
5
If a Holder of an Allowed Other Secured Claim exchanges its Claim for the collateral securing siich Claim, or for Cash in an amount equal to the proceeds aclually realized from the sale of such collateral, the exchange should be treated as a taxable exchange under Section
1001 orthe IRe. The Holder should recognize capital gain or loss (which capital gain or loss would be long~term capital gain or loss jf the Holder has held the debt instrument underlying
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its Claim for more than one year) equal to the difference between (i) the fair market value of the collateral received (or, as the case may be, the amount of Cash received from the sale of such collateral), and (ii) the Holder's adjusted tax basis in the debt instrumenl constituting its Claim. To the extent that a portion of the collateral received (or, as the case may be, the amount of Cash received from the sale of such collateral) in the exchange is allocable to accrued interest that has not already been taken into income by the Holder, the Holder should recognize ordinary interest income (as described below). If, on the Ellcctive Date, the Holder receives the collateral (rather than Cash) in exchange for its Claim, the Holder's tax basis in
the collateral should be equal to thc fair markct value of
the collateral on the Effective Date,
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and the Holder's holding period in the collateral should begin on the day following the Effective Date.
4. ConseQuences to Holders of Class C-L General Unsecured Claims. Class C-2
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14 15 16 17
First Lien Lender Deficiency Claims, and Class C-3 Second Lien Lender
Deficiency Claims
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On the Effective Date, each Holder of an Allowed General Unsecured Claim shall receive its pro rata share of the Litigation Trust Interests allocable to the Holders of General
Unsecured Claims on account of
its Allowed Claim.
18
19
20
21
The amount received, if any, from the Litigation Trust is contingent on the value obtained from the unencumbered assets and the outcome of the causes of action held by the Litigation Trust. The Holder should recognize gain or loss equal to the difference between (i) the Effective Date of the Litigation Trust Interests received (to the the fair market value as of extent it is not allocable to accrued interest) and (ii) the Holder's tax basis in the Claims
22
23
surrendered by the Holder. Such gain or loss should be capital in nature (subject to the
"market discount" rules described below) and should be long term capiial gain or loss if the
Claims were held for more than one year by the Holder. To the extent that any portion of the
24 25
26
27 28
Litigation Trust Interests received in the exchange is allocable to accrued interest, the Holder may recognize ordinary income, which is addressed in the discussion below regarding accrued interest. A Holder's tax basis in the Litigation Trust Interests received should equal their fair market value as of the Effective Date. A Holder's holding period for the Litigation Trust Interests should begin on the day following the Effective Date.
It is plausible that a Holder could treat the transaction as an 'open' transaction for tax
purposes, in which case the recognition of any gain or loss on the transaction might be
deferred pending the determination of the amount or the Litigation Trust Interests received.
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The federal income tax consequences oran open transaction are uncertain and highly complex
2
and a Holder should consult with its own tax advisor if it believes that open transaction
treatment might be appropriate.
5. Receipt of
J
4
5
Litigation Trust Int.resls
On the Effective Date, the Litigation Trust wil be settled and is currently anticipated to exist as either a grantor trust or partnership for the benefit of certain creditors. Subject to
6
7
E E
definitive guidance from the IRS or a court of competent jurisdiction to the contrary
(including the receipt of an adverse determination by the IRS upon audit if not contested by the Litigation Trustee), pursuant to Treasury Regulation Section 301.7701-4(d) and related Treasury Regulations, the Litigation Trustee may designate and tile returns for the Litigation Trust as a "grantor trust" and/or "liquidating trust" and therefore, for federal income tax
purposes, the Litigation Trust's taxable income (or loss) should be allocated pro rata to its beneficiaries.
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The Litigation Trustee intends to takc a position on he Litigation Trust's tax return that the Litigation Trust should be treated as a grantor trust set up for the benefit of creditors.
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Holders of Claims that receive Litigation Trust Interests wil be required to report on
their u.s. federal income tax returns their share of the Litigation Trust's items of income,
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gain, loss, deduction and credit in the year recognized by the Litigation Trust whether or not the Litigation Trust is taxed as a partncrship or a grantor trust. This requirement may result in
Holders being subject to tax on their allocable share of the Litigation Trust's taxable income
prior to receiving any cash distributions from the Litigation Trust. In general, Holders of
Litigaiion Trust Interests wil not be subject to tax on their receipt of distributions from the
trust.
Any Litigation Trust Assets held by the Litigation Trust on account of
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Disputed Claims
..
18 19
shall be treated as held in trust by the Litigation Trust as fiduciary for the benefit of the
Holders of
Disputed Claims (each a "Disputed Claims Reserve").
20
21
22
23
24 25
Under IRC Section 468B(g), amounts earned by an escrow account, settlement fund or similar fund must be subject to current tax. Although certain Treasury Regulations have been issued under this section, no Treasury Regulations have as yet been promulgated to address the tax treatment of such accounts in a bankruptcy setting. Thus, depending on the: facts of a particular situation, such an account could be treated as a separately taxable trust, as a grantor trust treated as owned by the Holdcrs of Disputed Claims or by the Debtor (or, if applicable, any of its successors), or otherwise. On February 1, 1999, the IRS issued proposed Treasury reserves Regulations that, if finalized in their current form, would specify the tax treatment of of the type here involved that are established ufter the date such Treasury Regulations become
finaL. In general, such Treasury Rcgulations would tax such a reserve as a "qualified
settlement fund" under Regulation Sections 1.468B-I et seq. and thus subject to a separate entity level tax. As to previously established escrows and the like, such Treasury Regulations would provide that the IRS would not challenge any reasonably, consistently applied method of taxation for income earned by the escrow or account, and any reasonably, consistently
applied method for reporting such income.
26
27 28
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2 3
4
5 6 7
E
Absent definitiye guidance from the IRS or a court of competent jurisdiction to the contrary, the Litigation Trust wil (i) treat each Disputed Claims Reserve as a discrete trust for federal income tax purposes, consisting of separate and independent shares to be established in respect of each Disputed Claim in the Class of Claims to which such reserve relates, in accordance with the trust provisions of Code, and (ii) to the extent permitted by applicable law, report consistently for state and local income tax purpOses. In addition, pursuant to the Plan, all parties shall report consistently with such treatment.
Accordingly, subject to issuance of definitive guidance: the Litigation Trust, in each case as fiduciary for Holders of Disputed Claims, wil report as subject to a separate entity level tax any amounts earned by its respective Disputed Claims Reserves, except to the extent such earnings are distributed by such fiduciary during the same taxable year. In such event, any amount earned by a Disputed Claims Reserve that is distributed to a Holder during the same taxable year wil be includible in such Holder's gross income.
6. Consequences to Holders of Allowed Class D Old EQuitv Interests
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Pursuant to the Plan, on the Effective Date, all Old Equity Interests shall be deemed
canceled and shall be of no further force and effect, whether surrendered for cancellation or
otherwise, and there shall be no distribution to the Holders of
Old Equity Interests.
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For U.s. federal income tax purposes, the tax consequences arising from the
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cancellation of a Old Equity Interest are complex, and may give rise to a deemed distribution to such Holder and/or an allocation of COD income, as described in more detail above under "Certain U.S. Federal lncome Tax Consequences to Reorganized Debtors." Holders of Old Equity Interests are urged to consult with their own tax advisers regarding such consequences.
7. Accrued but Unpaid Tnterest
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19
20
21
A portion of the consideration received by Holders of Claims may be attributable to accrued but unpaid interest on such Claims. Such amount should be taxable to that Holder as interest income if such accrued interest has not been previously included in the Holder's gross income for United States federal income tax purposes. Conversely, it is possible that a Holder of Claims may be able to recognize a deductible loss (or, possibly, a write-off against a reserve
tor worthless debts) to the extent that any accrued interest on the Claims was previously included in the U.S. holder's gross income but was not paid in full by Debtors. The character of such loss may be ordinary rather than capital. but the tax law is unclear on this issue.
22 23 24 25
If the tir value of the consideration is nol suffcient to fully satisfy all principal and interest on Allowed Claims, the extent to which such consideration wil be attributable to
accrued but unpaid interest is unclear. Under the Plan, the aggregate consideration to be
26
27 28
distributed to Holders of Allowed Claims in each Class will be allocated first to the principal amount or Allowed Claims, with any excess allocated to unpaid interest that accrued on such
Claims, if any. Certain legislative history indicates that an allocation of consideration as

between principal and interest provided in a chapter 11 plan of reorganization is binding for United States federal income tax purposes. Tbe IRS could take the position, however, that the
consideration received by the Holder should be allocated in some way other than as provided
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in the Plan. Holders of Claims should consult their own tax advisors regarding the proper
2
3
allocation otthc consideration received by them under the Plan.

8. Market Discount
4
5
Holders who exchange Allowed Claims for their pro rata share of each of (a) the New First Lien Notes, (b) Newco Equity Interests, and (c) Cash may be affected by the "market
discount" provisions of sections 1276 through 1278 of
the lRe. Under these provisions, some
6
7
or all of the gain realized by a Holder may be treated as ordinary income (instead of capital gain), to the extent of the amount of accrue "market discount" on such Allowed Claims.
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In general, a debt obligation with a fixed maturity of morc than one year that is
acquired by a holder on the secondary market (or, in certain circumstances, upon original
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issuance) is considered to be acquired with "market discount" as to that holder if the debt obligation's stated redemption price at maturity (or revised issue price as defined in section
1278 orthe IRe, in the case ora debt obligation issued with original issue discount) exceeds
the lax basis of the debt obligation in the holder's hands immediately after its acquisition.
II
12
13 14
15
However, a debt obligation is not a "market discount bond" if the exce:;s is less than a
statutory de minimis amount (equal to 0.25% of
the debt obligation's stated redemption price
at maturity or revised issue price, in the case of a debt obligation issued with original issue
00 :;:: ~
discount, multiplied by the number of complete years remaining until maturity at the time of the acquisition).
Any gain recognized by a Holder on the taxable disposition of Allowed Claims (determined as described above) that were acquired with market discount should be treated as ordinary income to the extent of the market discount that accrued thereon while the Allowed Claims were considered to be held by the Holder (unless the Holder elected to include market discounl in income as it accrued). To the extent that the Allowed Claims that were acquired with market discount arc exchanged in a tax-free transaction for other properly (as may occur here), any market discount that accrued on the Allowed Claims (i.e., up to thc time of the exchange) but was not recognized by the Holder is carried over to the property received
therefor and any gain recognized on the subsequent sale, exchange, redemption or other
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disposition of such property is treated as ordinary income to the extent of such accrued market discount.
9. Issue Price
22 23
24 25
For U.S. federal income tax purposes, the "issue price" of a debt instrument depends on whether such instrument is deemed to be "publicly traded." If, at any time during the 60day period ending 30 days after the issue date of a debt instrument, a substantial amount of
the
debt in:;truments in an issue is "traded on an establshed market" within the meaning of the
applicable Regulations, then the debt instrument wil be treated as publicly traded and the
26 27 28
issue price of the debt instrument wil equal the fair market value or that debt instrument on the date of issuance. In general, a debt im.trument wil be treated as traded on an established securities market if it is listed on a major securities exchange, appears on a system of general circulation that provides a reasonable basis to determine fair market value or otherwise is,
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2 3
4
among other things, readily quotable by dealers, brokers or traders. For purposes of applying these rules, each tranche of new debt instruments is treated i a separate issue.
new debt instrument is not publicly traded and the old Claim exchanged for such new debt instrument in such tranche is also not publicly traded, then the issue price of
If a tranche of
that new debt instrument generally would equal the stated principal amount of such debt instnimcnt. Holders of Claims should consult their tax advisors regarding the issue prices for
New First Lien Notes.
10. Claim Purchase
6
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For U.S. federal income lax purposes, the sale of an Allowed Class C-i Claim for Cash should be a taxable exchange under section 1001 of the JRC. A Holder who receives Cash in exchange for its Allowed Class C-I Claim will generally recognize income, gain or loss for U.S. fcderal income tax purposes in an amount equal to the difference between (a) the
amount of Cash received and (b) the Holder's adjusted basis in its Allowed Class C-L Claim.
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Such gain or loss may be ordinary or capital in nature (subject to the "market discount" rules described above) and may be long-term capital gain or loss fthe Class C~i Claim was held for more than one year. To the extent that a portion of the Cash received represents accrued but unpaid interest that the Holder has not already taken into income, the Holder may recognized ordinary interest income (as described herein).
C. Other Tax Matters
I. Infonliation Reporting and Backup Withholding
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In general, information reporting requirements may apply to distributions or payments under the Plan. Additionally, undcr the backup withholding rules, a Holder of a Claim may be subject to backup withholding (currently at a rate of 28%) with respeclto distributions or
i'
payments made pursuant to the Plan unless that Holder: (a) comes within certain cxempt
categories (which generally includc corporations) and, when required, demonstrates that fact; perjury or (b) provides a correct taxpayer identification number and certifies under penalty of that the taxpayer identification number is correcl and that the Holder is not subject to backup
19
20
21
withholding because of a failure 10 report all dividend and interest income. Backup
withholding is not an additional tax but is, instead, an advance payment that may be refunded
to the extent it results in an overpayment of tax; providcd, however, that the required
22
23
information is provided to the IRS.
The Debtors wil withhold aJl amounts rcquired by law to be withheld from payments
of interest. The Debtors will comply with all applicable reporting requirements of
24
25
the IRS.
The Plan may impose additional U.S. federal income tax filing requirements on
indirecl holders of the Newco Equity Interests reflecting the activities on the Effective Date, as discussed above in Section B.
26
27 28
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2. Imporlance of Obtaining Professional Tax Assistance
2
3
THE FOREGOING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF
CERTAIN INCOME 'Ii\X CONSEQUENCES OF THE PLAN AND IS NOT A

SUBSTITUTE FOR CAREFUL TAX PLANNING WITH A TAX PROFESSIONAL. THE
ABOVE DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT
4
5
TAX
ADVICE, THE '1i\X CONSEQUENCES ARE IN MANY CASES UNCERTAIN AND MAY
6 7
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VARY DEPENDING ON A CLAIM HOLDER'S PARTICULAR CIRCUMSTANCES, ACCORDINGLY, HOLDERS OF CLAIMS ARE URGED TO CONSULT THEIR OWN
TAX ADVISORS ABOUT THE UNITED STATES FEDERAL, S'Ii\TE, AND LOCAL, AND
APPLICABLE FOREIGN INCOME AND OTHER '1i\X CONSEQUENCES OF THE

PLAN,
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ArticleVIJ1. RECOMMENDATION
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In the opinion of the First Lien Steering Committee, i.e Plan is preferable to the alternatives described herein because it provides for a larger distribution to the Holders of Claims than would otherwise result in a liquidation under chapter 7 of the Bankruptcy Code. In addition, any alternative other than Confirmation could result in extensive delays and increased Administrative Claims resulting in smaller distributions to the Holders of Claims.
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Accordingly, the First Lien Steering Committee recommends that Holders or Claims entitled to vote on the Plan support Confirmation and vote to accept the Plan.
(Remainder of
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ArficlelX.
2
3
CONCLUSION
The First Lien Steering Committee believes that the Plan is in the best interests of
Creditors and urges such parties to vote to accept the Plan.
Dated: November 23, 2009
4
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E E
THE FIRST LIEN STEERING COMMITTEE

By: Its Counsel
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By: /sl Philip C. Dublin

Nile Leatham (NV Bar No. 002838) KOLESAR & LEATHAM Wells Fargo Financial Center 3320 W. Sahara Ave. Las Vegas, NY 89102 (702) 979-2357 (Telephone)
(702) 362-9472 (Facsimile)
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AKIN GUMP STRAUSS HAUER & FEW LLP Philip C. Dublin (NY Bar No, 2959344) Abid Qureshi (NY Bar No. 2684637) One Bryant Park New York, New York 10036 (212) 872-1000 (Telephone) (212) 872-1002 (Facsimile) pdublin($akingump.com aqureshi(kingump.com
Counselfor the First Lien Steering Commillee
22
23
24 25
26
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LIST OF EXHIBITS
2
Exhibit
3
Description
Plan of
4
5
Reorganization
Debtors' Organizational Chart

Current Cash Collateral Budget
Going Concern Analysis
Liquidation Analysis
Pending Litigation
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Litigation Trust Assets
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Claim Purchase Schedule
Litigation Trust Agreement

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Newco LtC Operating Agreement

New First Lien Credit Agreement
Schedule of
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Causes of Action
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Asset and Stock Transfer Agreement

Schedule of Assumed Executory Contracts and Unexpired Leases
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Exhibit A
Plan of
Reorganization
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Nile Leatham (NV Bar No. 002838)

2
3
KOLESAR & LEA lHAM
Wells Fargo financial Center 3320 W. Sahara Ave. Las Vegas, NY 89102
Telephone: 702.979.2357
Facsimile: 702.362.9472
4
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E.Mail: nleatham(klnevada.com
6 7
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Philip C. Dublin (NY Bar No. 2959344) Abid Qureshi (NY Bar No. 2684637)
AKIN GUMI' STRAUSS HAUER & FEW LLP
9
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One Bryant Park New Yark, NY i 0036

Telephone: 212.872.1000
Facsimile: 212.872.1002
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EwMail: DdublincqakingUmD.com
aqureslii~akingump.com
Counselfor (he Firs/ Lien Steering Committee
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UNITED STATES BANKRUPTCY COURT DISTRICT OF NEVADA SOUTHERN DIVISION
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INRE:
THE RHODES COMPANIES, LLC,
aka "Rhodes Homes," el aI.,

Case
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No. 09-14814-LBR
19
Jointly Administered
.. 20
21
Debtors.!
22
23
number, if
1 The Oebiors in these cases, along with the last four digils of each Debtor's federal tax identification
applicable, are: Heritage Land Company, LLC (2918); The Rhodes Companies, LLC (3060);
24 25
Rhodes Ranch General Partnership (1760); Tick, LP (0707); alynda, LP (5569); Chalkline, LP (0281); Batc3ve, LP (6837); Jackknife, LP (6189); Wallboard, LP (1467); Overfow, LP (9349); Rhodes Ranch Golfand Counlf Club (9730); Tuscany Acquisitions, LLC (0206); Tuscany Acquisitions II, LLC (8693); Tuscany Acquisitions
II, LtC (9777); Tuscany Acquisitions iV, LLC (0509); Pared 20 LLC (5534); Rhodes Dcsign and
26
27 28
Development Corp. (1963); C&J Holdings, Inc. (1315); Rhodes Realty, Inc. (0716); Jarupa LLC (4090); Elkhorn Invcstmeiis, Inc. (6673); Rhodes Homes Arizona, LLC (7248); Rhodes Arizona Properties, LtC (8738); Tribes Holdings LLC(4347); Six Feathers Holdings, LLC (8451); Elkhorn Partners, A Nevada Limited Parlnership (9654); Bravo Inc. (2642); Gung-Ho Concrete, LLC (6966); Geronimo Plumbing, LLC (6897); Apache Framing. LLC (6352); Tuscany Golf Country Clilb. LLC (7132); Pinnacle Grading, LLC (4838).
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Affects:
2
3
~ All Debtors
o AITecls the following
Debtor(s)
,I
5
SECOND AMENDED MODIFIED PLAN OF REORGANIZATION PURSUANT TO CHAPTER I I OF THE BANKRUPTCY CODE FOR THE RHODES COMPANIES, LLC, ET AL.
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2
3
TABLE OF CONTENTS
Page
4
5
INTRODUCTION .................................................................................................... I
ARTICLE L DEFINED TERMS, RULES OF INTERPRETATION, COMPUTATION OF TIME, AND GOVERNING LAW.......................... I
6 7
8
E
A. Defined Terms ...........................................nuu...........u...............uno.............. i B. Rules of Interpretation ........................................mm..................................... 15 C. Reference to Monetary Figures.....................................................................16

ARTICLE II. ADMINISTRATIVE AND PRIORITY CLAIMS....................................... 16
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A. Administrative Claims ............................unn...mnm................................... 16 B. Priority Tax Claims..............................m......nmn........................................17

ARTICLE II. CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS ............................................................................................... 17
II
12
13
A. Classification afClaims and Interests....n......................m.........................17

B. Treatment of Classes of
Claims and Interests....................m..............i8
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C. Class Voting Rights ....................................................................................22 D. Bankruptcy Code Section 1111(b) Election .............................................22 E. Acceptance or Rejection of the Plan...........................................................23
ARTICLE IV. PROVISIONS FOR IMPLEMENTATION OF THE PLAN...................23
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A. Substantive Consolidation .................................................................... 23

B. Sources of
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C. Corporate Existence ................................................................................. 25 D. Vesting of Assets in the Reorganized Debtors .......................................26

E. Cancellation of Equity Securities and Related Obligations........................26 F. Restructuring Steps and Transfer of Certain Interests to Newco..................26
..
20
21
G. Restructuring Transactions .........................................................................27 I-J. Corporate Action........................................................................................ 28 I. Post-Confirmation Property Sales.................................................................28

J. Organizational Documents........................................................................... 28
22
T -,
24 25
K. Effectuating Documents, Further Transactions ............................................28 L. Exemption from Certain Transfer 'I'axes and Recording Fees......................29 M. Directors and Offcers of the Reorganized Debtors.....................................29 N. Management and Director Equity Incentive Plan.....................................29 O. The Litigation Trust.................................................................................... 29
P. Preservation of Causes of Action................................................................. 30
26 27 28
Q. HOA Board Seats....................................................................................... 3 i R. Licensing....................................................................... ............................... 31 S. Transfer of Rhodes Ranch GolfCourse.................................................3l
T. Cash Payment...............................................................................33
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U. T ninsfer or Arizona Assets ...........................................................,_.,nno....... 33 V. Trademarks and Trade Names ....................,.......................................nnn....34 W. Self Insured Retention Obligations ....................mm......m............................ 34
X. Bond Replacement or Indemnification ....................................................34 Y. Stanley Engineering Litigation .................................................................35

ARTICLE V. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED
LEASES .......................................................................................................35 Executory Contracts and Unexpired
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A. Assumption and Rejection of
I.eases...............n.m.....................................................................................35
B. Cure of Defaults for Assumed Executory Contracts and Unexpired
Leases..............................................................0...........................................36
C. Preexisting Obligations to the Debtors Under Executory Contracts and
9
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Unexpired Leases..................................................................................37
D. Claims Based on Rejection or Repudiation of Executory Contracts and
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E. Intercompany Contracts, Contracts, and Leases Entered Into After the
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Petition Date: ...............................................................................................38
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F. Home Sales ......................................................................................38

G. v.'arranties ..............................................................................................n 38
H. Modification of Executory Contracts and Unexpired Leases Containing
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Equity Ownership Restrictions .................................................................. 38

1. Modifications, Amendments, Supplements, Restatements, or Other
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K. Nonoccurrence of Effective Date................................h............................. 39

ARTICLE Vi. PROCEDURES FOR RESOLVING DISPUTED CLAIMS........................39
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A. Allowi:nce of Claims.......h.....h...............................n.................................. 39 B. Claims Administration Responsibilities .................................................. 39 C. Estimation of Claims..............................................................h.................. 39 D. Adjustment to Claims Without Objcction..........................h.......................40
E. Time to File Objections to Claims.............................................................40 F. Disallowance of Claims ......................mmm............................................... 40
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G. Offer of Judgment..................................................................................41 H. Amendments to Claims...............................................................................41

ARTICLE VII. PROVISIONS GOVERNING D1STRIBUTIONS................................41
A. Total Enterprise Value for Purposcs ofOistributions Under the Plan..........41

B. Distributions on Account of C. Distributions on Account of D. Delivery of
25 26 27 28
the Effective Date.........41 the Effectivc Date:.......41 Distributions .........................................................................43

Claims Allowed as of Claims Allowed After
E. Claims Paid or Payable by Third Parties. ......m....................................45

F. Payment ot$l.5 Milion to First Licn Lendcrs.........n.............................46 G. Gcneral Unsecured Claims Purchase........................................................h..47
ARTICLE VIIi' EFFECT OF CONFIRMATION OF THE PLAN ................................48
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A. Discharge afClaiins and Termination of
Interesls .............................__48
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B. Subordinated Claiins ............................._....................................................... 49 C. Compromise and SeUlemenl of Claims and Controversies ........................49 D. Releases by the Debtors orthc Released Parties ..........................................49
E_ Rele"e, by the Debtors of
the Rhodes Entilies_mmu_u_.um.uu.uu_mum.m_u50
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F. Releases by First Lien Lenders of First Lien Lenders ................................. 50
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G. Exculpation .........................................__...................................................... 5 i H. lnjunction .......................................................................u.nuu..........n..... 51 i. Protection Against Discriminatory Trcatmcnt..................................m......52

J. Setoffs ................................................................................................... 52
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K. Recoupment ................................................................................................52 I" Release of I-iens ......................................................n.....u.............u.......... 53 M. Document Retention u......n......................................................................53 N. Reimbursement or Contribution u............................................................. 53
ARTICLE IX_ ALLOWANCE AND PAYMENT or CERTAIN ADMINISTRATIVE
CLAIMS ._.________________.______.oo_____m_____oo_____._______.____w__m_____.m___.____oo_m_moo._ 53
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A. Professional Claims: .....................................................................u......... 53 B. Other Administrative Claims ........................................................................ 54

ARTICLE X. CONDITIONS PRECEDENT TO CONrIRMA TION AND
CONSUMMATION or THE PLAN m____________wmmmwm_m____m_oo_______oo___.55
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B. Conditions Precedent
to the Effective Date ...............................................55
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Conditions P,ecedent to Confi,maiion m._oooom.___mmm_mm__ 57
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ARTICLE Xl. MODlrlCA TION, REVOCATION, OR WITHDRAWAl. or THE

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PLA N oo._____________w______m__oomwmwmmoo___.m____m_m__m_mmmmmm_____.wmm 57
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A. Modification and Amendments................................................................57 B. Effect ofContirmation on Modifications .................................................58 C. Revocation or Withdrawal of Plan.............................................u............. 58
ARTICLE XLi. RETENTION OF JURISDICTION mm___oooomm______oo____________wwoom_m_m__ 59
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ARTICLE XIIL MISCELLANEOUS PROYISIONS___ww.w.oom_wmmm.oo.moomm_oooo__.____61
A. Immediate Binding Effeet..............u.......................................................61

B. Additional Documents ................................................................................... 61 C. Payment of Statuto!) Fees ...............................00........................................ 61 D. Dissolution of Creditors' Committee........................................................... 62 E. Reservation of Rights...........................................................u....n............. 62
24
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26 27 28
F. Successors and Assigns....................................u.................................... 62

G. Service of H. Term of
Documents: ..................................................n..............................62
Injunctions or Stays...................................................................64
I. Entire Agreement ......................................................................................... 64 J. Governing Law u......u..............................n...n........................................64
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K.
Exhibits ....m...m........................ ................................. ................................. 64

Nonseverabi i it y of Plan Prav is ions.... '" "." ... ... ..... ...h...................................... 64
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Closing orthe Chapter 11 C.lsts.....................u....m....mmmmmmmmuu......65 Waiver or Estoppel ................m....................................................................65
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Conflicts......................................................................................................65
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INTRODUCTION
2
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The First Lien Steering Committee proposes the following second amended plan of reorganization for the resolution of outstanding Claims against, and Interests in, The Rhodes Companies, LLC and the other debtors in the above-referenced chapter 11 cases pursuant to
title 11 of the United States Code, 11 D.S.C. iol~1532. Capitalized terms used in the Plan and not otherwise defined shall have the meanings ascribed to such terms in Article LA. of the Plan. Reference is made to he Disclosure Statement, Filed contemporaneously
6 7
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with the Plan, for a discussion of the Debtors' history, businesses, assets, results of
operations, and projections of future operations, as well as a summary and description of the the Plan and certain rclated matters. The First Lien Steering Committee is the proponent of Pion within the meaning of section 1129 of the Bankruptcy Code.
ALL HOLDERS OF CLAIMS ENTITLED TO VOTE ON THE PLAN ARE ENCOURAGED TO READ THE PLAN AND THE DISCLOSURE STATEMENT IN
THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THE PLAN. THE PLAN PROVIDES FOR THE SUBSTANTIVE CONSOLIDATION OF ALL OF THE
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ESTATES FOR ALL PURPOSES ASSOCIATED WITH CONFIRMATION AND

D1STRIUTlONS UNDER THE PLAN.
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DEFINED TERMS, RULES OF INTERPRETATION, COMPUTATION OF TIME, AND GOVERNING LAW
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A. Defined Terms: As uscd in the Plan, the capitalized terms below have the following meanings, except as expressly provided or unless the context otherwise requires. Any term used but not defined in the Plan, but that is used in the Bankruptcy Code or the Bankrptcy
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Rules, shall have the meaning ascribed to that term in the Bankrptcy Code or the I! Bankruptcy Rules.
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.L Accrued Professional Compensation: At any given moment, all accrued fees
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and expenses for services rendered by all Professionals through and including the Effective Date, to the extent such fees and expenses have not been paid and regardless of whether a
fee application has bcen Filed for such fecs and expenses. To the extent there is a Final
22 23
Ordcr denying some or all of a Professional's fees or expenses, such denied amounts shall no longer be considered Accrued Professional Compensation.
2. Administrative Claim: A Claim for costs and expens:es: of administration

pursuant to sections 503(b), 507(a)(2), 507(b), or 1114(e)(2) of the Bankruptcy Code,
24
25
including: (a) the actual and necessary costs and expenses incurred after the Petiiion Date
and through the Effective Date of
26 27 28
the Debtors (such as wages, salaries, or commissions for services, and payments for goods and other services and Icas:ed premises); (b) compensation for legal, financial advisory, accoiiiiting, and other services and reimbursement of expenses Allowed pursuani to sections 328, 330(a), or 331 of the Bankruptcy Code or otherwise for the period commencing on the Petition Date and ending on the Effective Date; (c) all fees and charges assessed against the
preserving the Estates and operating the businesses of
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Estates pmsiianl (0 chapter 123 of the Judicial Code and 28 U.S.C. 1930; and (d) all
2
3
requests for compensation or expense reimbursement for making a substantial contribution in the Chapter II Cases pursuant to sections 503(b)(3), (4), and (5) ofihe Bankruptcy Code.
L. Administrative Claim Bar Dale: The deadline for filing requests for payment
4
5
of Administrative Claims, which shall be thirty days after the Effective Date for all other
Administrative Claims incurred after the Petition Date through the Effective Date, except with respect to Professional Claims, which shall be subject to the provsions of Article ix.
4. Affidavit of Publication: An affdavit of a representative or agent or a
6
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publisher of a periodical certifying that notice has been served through publication in the
publisher's periodical.
1. Affliate: (a) An Entity that directly or indirectly owns, controls, or holds
with power to vote, twenty percent or more of the outstanding voting securities of any of
9
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the
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Debtors, other than an Entity that holds such securities (i) in a fiduciary or agency capacity without sole discretionary power to vote such securities or (ii) solely to secure a debt, if such Entity has not in fact exercised such power to vote; (b) a corporation twenty percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by any of the Debtors, or by an Entity that directly or indirectly owns, controls, or holds with power to vote, twenty percent or more of the outstanding voting
securities of any of the Debtors, other than an Entity that holds such securities (i) in a
fiduciary or agency capacity without sole discretionary power to vote such securities or (ii) solely to secure a debt, if such Entity has not in fact exercised such power to vote; (c) an
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Entity whose business is operated under a lease or operating agreement by any of the Debtors, or an Entity substantially all or whose property is operated under an operating
agreement with any oftlie Debtors; (d) an Entity that operates the business or substantially all of the property of any of the Debtors under a lease or operating agreement; or (e) the Debtors' domestic, wholly-owned, direct and indirect subsidiaries that have not commenced cases under chapter 11 of the Bankruptcy Code.
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6. Allowed: With respect to Claims and lnteresls: (a) any Claim or Interest,
which is iimely Filed by the applicable Bar Date (or that by the Bankruptcy Code or Final Order is not or shall not be required to be Filed); (b) any Claim or Interest ihat is listed
proof of
20
21
in the Schedules as of the Effective Date as not disputed, not contingent, and not
unliquidated, and for which no Proof of Claim or Interest
22
,has been timely Filed; or (c) any Claim Allowed pursuant to the Plan; provided, however, that with respect to any Claim or 23 Interest described in clauses (a) or (b) above, such Claim or Interest shall be considered Allowed only if and to the extent that (x) no objection to the allowance thereof has been 24 interposed within the applicable period of time fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or the Bankruptcy Court, (y) such an objection is so interposed and the 25 Claim or Interest shall have been Allowed for distribution purposes only by a Final Order, or 26 (z) the Debtors allow such Claim prior to the Effective Date with the consent of the First Lien Steering Committee and the Creditors' Committee or the Reorganized Debtors allow
27
such Claim after the Effective Date in their sole and absolute discretion. Except as
otherwise specified in the Plan or a Bankruptcy Court order, the amount of an Allowed Claim shall not include inlerest on such Claim from and after the Petition Date. For
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purposes of determining the amount of an Allowed Claim, there shall be deducted therefrom
an amount equal to the amount of any Claim that the Debtors may hold against the Holder
2 3 4 5 6 7 8
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thereot: to the extent such Claim may be offset, recouped, or otherwise reduced under
applicable law. Any Claim or Interest that has been or is hereafter listed in the Schedules as disputed, contingent, or unliquidated, and for which no Proof of Claim or Interest has been timely Filed, is not considered Allowed and shall be expunged without fUliher action by the Reorganized Debtors and without any further notice to or action, order, or approval of the Bankruptcy Court.
L Arizona Assets: TIie Debtors' homebuilding business in Arizona ("Arizona") that will be transferred to the Rhodes Entities on the Effective Date, through the Rhodes
Entities' acquisition of the stock of Rhodes Arizona Properties LLC and Elkhorn
Investments, Inc., in each case, as reorganized, and certain assets of
Rhodes Homes Arizona
LLC.
ll Ballot or Ballots: The ballots upon which Holders of Impaired Claims
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entitled to vote shall cast their vote to accept or reject the Plan.
!L Bankruptcy Code: Title II of the United States Code, i I U.S.c. ioi~

1532. as applicable to the Chapter II Cases.
lQ Bankruptcv Court: The United States Bankrupicy Court for the District of
Nevada or any other court having
14 15
jurisdiction over the Chapter I1 Cases.
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lL BankruPtcv Rules: The Federal Rules ofBankruplcy Procedure as applicable
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to the Chapter 11 Cases, promulgated pursuont to section 2075 of the Judicial Code and the the Bankruptcy Court. general, local, and chambers rules and orders of
lb Bar Date: August 5, 2009, except as oiherwise provided in the Plan or by
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Bankniplcy Court order.

Interest.
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Beneficial Holder: The Entity holding the beneficial interest in a Claim or

Business Day: Any day, other than a Saturday, Sunday, or Legal Holiday.
Cash: Cash and cash equivalents.
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.! Cash Collateral Order: The Bankruptcy Court order entitled, "Final
24
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Cash Collateral Pursuant to Sections 105,361,362, and 363 of the Bankruptcy Code and (II) Granting Adequate Protection and Super Priority Administrative Expense Priority to Prepetition Secured Lenders Re Debtors' Motion for
Stipulated Order (1) Authorizing Use of
Interim and Final Orders Pursuant to Sections 105,361, 362, 363, and 364 of Debtors'
26 27 28
Motion for Interim and Final Orders Pursuant to Sections 105,361,362,363 and 364 of
the
Bankruptcy Code (A) Authorizing Debtors to Use Cash Collateral, (8) Granting Adequate Protection to the Debtors' Prepetition Secured Parties and (C) Scheduling a Final Hearing; Memorandum of Points and Authorities Filed by Zachariah Larson on Behalf of Heritage Land Company, LLC (Relates to Heritage Docket No. 351," entered in the Chapter i i Cases
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on April 30, 2009 (Rhodes Docket No. 126), as amended or extended with the consent of
the
First Lien Steering Committee, from time to time and in accordance with the terms thereof.
lL Cause of Action: Any claim, cause of action, controversy, demand, right,

action, Lien, indemnity, guaranty, suit, obligation, liabilty, damage, judgment, account,
defense, offset, power, privilege,
4
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license, and franchise of any kind or character whatsoever,
known, unknown, contingent or non-contingent, matured or unmatured, suspected or

unsuspected, liquidated or unliquidated, disputed or undisputed, secured or unsecured,
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assertable directly or derivatively, whether arising before, on or after the Petition Date, in contract or in tort, in law or in equity, or pursuant to any other theory of law. Cause of Action also includes: (a) any right of setoff, counterclaim, or recoupment and any claim on
contracts or for breaches of duties imposed by law
or in equity; (b) the right to object to
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Claims or Interests; (c) any claim pursuant to sections 362, 510, 542, 543, 544 through 550, or 553 of the Bankruptcy Code; (d) any claim or defense including fraud, mistake, duress, and usury and any other defenses set forth in section 558 f the Bankruptcy Code; (e) any state law fraudulent transfer claim; (t) any claim or cause of action of any kind against any
Released Party or Exculpated Party based in whole or in part upon acts or omissions
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occurring prior 10 or after the Petition Date; and (g) any claim listed in Exhibit L to the
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It Certificate: Any instrument evidencing a Claim or an Interest.
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l2 Chapter i i Cases: The chapter I I bankruptcy cases filed by the Debtors on
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the Petition Date in the Bankruptcy Court, with case numbers 09-14778-LBR, 09-14861LBR, 09-1 4825-LBR, 09-14843-LBR, 09-14862-LBR, 09-14837-LBR, 09-14828-LBR, 0914820-LBR, 09-14865-LBR, 09-14822-LBR, 09-14818-LBR, 09'14860-LBR, 09-148394846-LBR, 09LBR, 09- I 4856-LBR, 09- I 4848-LBR, 09- I 4868-LBR, 09- I 4882-LBR, 09- I 14844-LBR, 09-14854-LBR, 09-14841-LBR, 09-14814-LBR, 09-14833-LBR, 09-14866LBR, 09-14817-LBR, 09-14853-LBR, 09-14852-LBR, 09-14850-LBR, 09-14849-LBR, 0914858-I.RR, 09-14884-LBR, 09-1
4887-LBR_
;:
19
20. Claim: As defined in section 101(5) of
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~ Claims and Solicitation Agent: Omni Management Group, LLC.
21
22
23
22. Claims Objection Deadline: (i) One year from the Effective Date for all Claims other than the Rhodes Entities Claims; and (ii) sixty days from the Effective Date for
the Rhodes Entities Claims.
24 25 26 27
23. Claims Register: The offcial register of Claims and Interests maintained by
the Claims and Solicitation Agent.
i-4. Class: A class of Holders of Claims or Interests as set forth in the Plan.
25. CMlECF: The Bankruptcy Court's Case Management and Electronic Case
Filing system, which can be accessed at https:/lecfnvb.uscourts.gov/.
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26. Confirmation: The entry of the Confirmation Order, subject to all conditions
2
3
specified in Article X.A having been satisfied or waived pursuant to Article X.C.
27. Confirmation Date: The date upon which the Confirmation Order is entered
by the Bankruptcy Court on its docket, within ihe meaning of Bankruptcy Rules 5003 and
9021.
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5
28. Confirmation Hearing: The hearing at which the Confirmation Order is first
considered by the Bankruptcy COurt.
7 29. Confirmation Hearing Notice: The notice approved in the Solicitation
Procedures Order that sets forth in detail the voting and objection deadlines with respect to
8 the Plan.
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30. Confirmation Order: l1ic order of the Bankruptcy Court confirming the Plan
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pursuant to section I 129 ofthe Bankruptcy Code.

J. Contineent Bond Indemnity Claim: Any Claim asserted by a bonding
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company due to a bond being called.

32. Consummation: The occurrence of
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34. Creditors' Committee: The Offcial Committee of Unsecured Creditors
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appointed in the Chapter 11 Cases.
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35. Cure: The distribution in the ordinary course of business as soon as

reasonably practicable following the Effective Date of Cash, or such other property as may bc ordered by the Bankruptcy Court or agreed upon by the contracting party and (i) the
Debtors and the First Lien Steering Committee, or (i) the Reorganized Debtors in an
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amount equal to all unpaid monetary obligations under applicable law or such lesser amount as may be agreed upon by the parties, under an executory contract or unexpired lease assumed pursuant to section 365 of the Bankruptcy Code, to the extent such obligations are enforceable under the Bankruptcy Code and applicable non-bankruptcy law.
36. Cure Bar Date: The deadline for fiing requests for payment of Cure, which
shall be the later of: (a) thirt days after the Effective Dale or (b) thirty days after the
assumption of
22 23
the applicable executory contract or unexpired lease, unless otherwise ordered
24
25 26 27 28
by the Bankruptcy Court or agreed to by the First Lien Steering Committee and the
countcrparty to the applicable executory contract or unexpired lease.

37. Debtors: The following Entities: Heritage Land Company, LLC; The
Rhodes Companies, LLC; Rhodes Ranch General Partnership; Tick, LP; alynda, LP;
Chalkline, LP; Batcave, LP; Jackknife, LP; Wallboard, LP; Overflow, LP; Rhodes Ranch Golf and Country Club, LLC; Tuscany Acquisitions, LLC; Tuscany Acquisitions II, LLC; Tuscany Acquisitions II, LLC; Tuscany Acquisitions LV, LLC; Parcel 20 LLC; Rhodes Design and Development Corp.; C&J Holdings Inc.; Rhodes Realty, Inc.; Jarupa LLC;
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J
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Elkhorn Investments, Inc.; Rhodes Homes Arizona, LLC; Rhodes Arizona Properties, LLC; Tribes Holdings LLC; Six Feathers Holdings, LLC; Elkhorn Partners, A Nevada Limited Partnership; Bravo Inc.; Gung~Ho Concrete, LLC; Geronimo Plumbing, LLC; Apache Framing, LLC; Tuscany Golf Country Club, LLC; and Pinnacle Grading, LLC.
38. Debtors in Possession: The Debtors, as debtors in possession in the

Chapier I i Cases, pursuant to sections i i 07 and t 108 of the Bankruptcy Code.
39. Disclosure Statement: The disclosure statement for the Plan describing the
6 7
8
Plan, including all exhibits and schedules thereto, that is prepared and distributed in accordance with scctions 1125, 1126(b), and i 145 of the Bankruptcy Code, Bankrptcy
Rule 3018, and other applicable law, as may be amended from time to time.
40. Disputed: With respect to any Claim or Interest, (i) any Claim or Intercst on the Claims Register that is not yet AlJowed, (ii) any Claim or Interest that is not yet Allowed
pursuant to the terms of the Plan; (iii) any Claim that is not set forth on the Debtors'
9
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Schedules or (iv) any Claim objected to by the applicable Claims Objection Deadline.
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respect thcrcofhcld in reserve pursuant to Article VII.

42. Distribution Agent: The Reorganized Debtors, or the Entity or Entities
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chosen by the First Lien Steering Committce, to make or to facilitate distributions pursuant to the Plan.
43. DistributiOn Date: The date occurring as soon as reasonably practicable after
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the Effective Date when distributions under the Plan shall commence, but not later than
thirty days after the Effective Date, without further Bankruptcy Court order.
44. Distribution Record Date: The date for determining which Holders of
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Allowed Claims arc eligible to receive distributions pursuant to the Plan, which shall be the Confirmation Date or such other date as designated in the Plan or a Bankruptcy Court order.
.,
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20
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45. Effective Date: The date in a notice Filed by the First Lien Steering
Committee on or after the eleventh day following entry of an order, in form and substance acceptable to the First Lien Steering Committee, by the Bankruptcy Court confirming the Plan and satisfaction of all conditions set forth in Article X.B. of the Plan having been satisfied or waived in accordance with the terms of the Plan; provided, however, that the Effective Date shall occur no earlier than January 1,2010.
46. Entity: As defined in section 101(15) ofthc Bankruptcy Code.
22 23 24
25
47. Equity Security: Any equity security as defined in section 101(16) of the
48.
26 Bankruptcy Code in a Debtor.

27
28
Equity Security Holder: A Holder of an Interest.
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49. Estate: The bankruptcy estate or of
any Debtor created by virtue of
section 541
2
3
the Bankruptcy Code upon the commcncementofihc Chapter i i Cases.
lQ Exculpated Claim: Any claims and Causes of Action arising on or after the
Petition Date, including any act taken or omitted to be taken in connection with, or related
to, formulating, negotiating, preparing, disseminating, implementing, administering,
4
5
confirming, or consummating the Plan, in each case other than claims ror gross negligence, willful misconduct or fraud.
6 7
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iL Exculpated Party: Each of: (i) the Creditors' Committee, the First Lien
Steering Committee, the First Lien Lenders and the Second Lien Lenders, and all of their respective current and former officers, directors, members, employees, advisors, attorneys, professionals, consultants, agents, or other representatives, and (ij) the Debtors' current
9
10
oflcers, employees, advisors, attorneys, professionals, consultants, agents, or other

representatives.
52. Federal Judgment Rate: The federal judgment rate of .59%, which was In
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elTect as of
the Petition Date.
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53. File: To fie with the Bankruptcy Court in the Chapter I I Cases, or in the
case of Proofs of
13
14
Claim or Interest to file with the Claims and Solicitation Agent.
54. Final Decree: The decree contemplated under Bankruptcy Rule 3022.
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the Bankruptcy Court or 55. Final Order: As applicable, an order or judgment of other court of competent jurisdiction with respect to the relevant subject matter, which has not been reversed, stayed, modified, or amended, and as to which the time to appeal or seek certiorari has expired and no appeal or petition for certiorari has been timely taken, or as to which any appeal that has been taken or any petition for certiorari that has been or may be Filed has been resolved by the highest court to which the order or judgment was appealed or
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from which certiorari was sought; provided, however, that thc First Lien Steering
Committee or Reorganized Debtors, as appropriate, reserve the right to waive any such
appeal or similar conditions of a Final Order.
56. First Lien Agent: The current and former agents, arranger, and bookrunner
.,
..
20
21
with respect to, or under, the First Lien Credit Agreement.

57. First Lien Credit Agreement: The first lien Credit Agreement dated as of
22 23
November 21, 2005 (as may have been amended from time to time) among Heritage Land 24 Company, LLC, The Rhodes Companies, LLC, and Rhodes Ranch General Partnership, as the Borrowers, the Lenders Listed Therein as Lenders, and Credit Suisse, Cayman Islands 25 Branch, as Administrative Agent, Collateral Agent, Syndication Agent, Sole Bookrunner and Sole Lead Arranger, and the other Loan Documents (as defined in the First Lien Credit 26 Agreement).
27
28
58. First Lien Lender Claims: All First Lien Lender Secured Claims and First
Lien Lemler Deficiency Claims.
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59. First Lien Lender Secured Claim: Any Secured Claim for principal or
2
3
interest under the First Lien Credit Agreement or the SWAP Tr.nsaciion.
60. First Lien Lender Deficiency Claim: Any deficiency Claim arising under the
First Lien Credit Agreement.
L First Lien Lenders: (i) The First Lien Agent, (ii) the entities that hold debt
5
6
7 8
E
under the First Lien Credit Agreement and (ii) the holders of Claims relating to under the SWAP Transaction.
62. First Lien Steering Committee: Credit Suisse Assel Management, Candlewood Special Situations Master Fund, Credit Suisse Loan Funding L1.C,
CypressTree Investment Management, LLP, General Electric Capital Corporation, Highland Capital Management, L.P., and Sorin Capital Management.
63. General Unsecured Claims: Any Claim (including any Allowed Rhodes
9
10
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Entities Claims) against any or the Debtors that is not aJn (a) Administrative Claim, (b)
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Priority Tax Claim, (c) Priority Non-Tax Claim, (d) First Lien Lender Secured Claim, (e)
Second Lien Lender Secured Claim, (1) Other Secured Claim, (g) First Lien Lender
Deficiency Claim, (h) Second Lien Lender Deficiency Claim, (i) Subordinated Claim, or G)
Intercompany Claim.
14 15 16 17 18
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64. Government Bar Date: September 28, 2009 or, with respect to Rhodes Homes Arizona, LLC, Tuscany Golf Country Club, LLC and Pinnacle Grading, LLC,
September 29,2009.
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65. Heritage EQuitv Securities: Members' interests and/or the interests as a
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noneconomic member in Heritage Land Company, LLC, a Nevada limited liabilty

company.
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66. Holder: An Entity holding a Claim or Interest, as applicable.
19
20
21
67. HOA: A homeowners' association.

68. Impaired: With respect to any Class of Claims or interests, a Class of Claims
or Interests that is impaired within the meaning of section 1124 of
22
69. Indemnification Oblieation: A Debtor's obligation under an executory
23
contract or otherwise to indemnify directors, offcers, or employees of the Debtors who

served in such capacity at any time, with respect to or based upon any act or omission taken or omitted in any of such capacities, or for or on behalf of any Debtor, pursuant to and to the maximum extent provided by the Debtors' respective articles of incorporation, certificates of
formation, bylaws, similar corporate documents, and applicable law, as in effect as of the Effective Date, which shall be deemed rejected under the Plan.
70. Insider: As defined in section 101(31) of
24 25
26
27 28
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2L Insured Claim: A Clilim arising from ::n incident or occurrence alleged to

have occurred prior to the EfTeciive Date that is covered under an insurance policy
2
3
applicable to the Debtors or their businesses.
72
Intercompany Claim: A Claim held by a Debtor against another Debtor.
4
73:. Intercompany Contract: A contract between two or more Debtors.
74.
6
7
Intcrcomnanv Interest: An Interest held by a Debtor.
75. Interest: Any: (a) Equity Security, including all issued, unissued, authorized,
8
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or outstanding shares or stock together with any warrants, options, or contractual rights to purchase or acquire such Equity Securities at any iime and all rights arising with respect thereto and (b) partnership, limited liability company or similar interest.
76. Interim Compensation Order: The Bankruptcy Court order entitled, "Order
9
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Granting Debtors' Motion for Administrative Order Pursuant to Sections 105(a) and 331 of thc Bankruptcy Code and Bankruptcy Rule 2016 Establishing Procedures for Interim Monthly Compensation and Reimbursement of Ex.penses or Professionals rRe: Docket No.
62)," entered in the Chapter 11 Cases on May 18, 2009 rRhodes Docket No. i 80), as may
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have been modified by a Bankruptcy Court order approving the retention of the
Professionals.
77. Internal Revenue Code: Title 26 of
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the United States Code, 26 U.S.c. 1the United States Code, 28 U.S.c. 1-4001.
15 16 17 18
9833.
78. Judicial Code: Title 28 of
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79. Lien: As defined in section 10 i (37) of
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80. Litiiiation Trust: That certain litigation trust to he created on the Effective Date in accordance with the provisions of Article iv of the Plan and the Litigation Trust
Agreement.
~ Litigation Trust Advisory Board: The advisory board formed pursuant to the
20
21
Litigation Trust Agreement.

82. Litigation Trustee: The Person designated by the First Lien Steering
22
23
Committee in consultation with the first Lien Agent, the Second Lien Agent and the
Creditors' Committee on or before the Confinnation Date and retained as of the Effective Date to administer the Litigation Trust in accordance with the Plan and the Litigation Trust Agreement, and any successor appointed in accordance with the Litigation Trust Agreement.
The identity of the Litigation Trustee shall be disclosed by the First Lien Steering
24
25
26 27
28
Committee at or prior to the Confirmation Hearing.
83. Litigation Trust Agreement: That certain (rust agreement, substantially on thc tcrms set forth on Exhibit I to the Disclosure Statement and in ronn and substance
acceptable to the First Lien Steering Committee, in consultation with the First Lien Agent,
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2 3
Second Lien Agent, Creditors' Commiuce an the Debtors, that, among other among other things: (a) establishes and governs the Litigation Trust (including any Litigation Trust Advisory Board or similar oversight committee); and (b) describes the powers, duties, and responsibilities of the Litigation Trustee, the Liquidation Trust Assets, and the distribution of tile proceeds thereof.
84. Litigation Trust Assets: All Claims and Causes of Action on which the First
4
5
6 7
Lien Lenders do not have a lien and that have not been released pursuant to the Plan or order of the Bankrptcy Court. The Litigation Trust Assets shall include those set forth on Exhibit G to the Disclosure Statement.
85. Litigation Trust Beneficiaries: The Holders or Claims that arc to be satisfied,
8
E
9
10
in whole or in part by post-Effective Date distributions that are to be made by the Litigation Trusl.
86. Litil!ation Trust Funding Amount: The amount of $100,000 to be used to
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initially fund the Litigation Trust, which shall be repaid to the Reorganized Debtors from the first proceeds received by the Litigation Trust.
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be distributed to certain Holders of
87. Litigation Trust Interests: The beneficial interests in the Litigation Trust to Claims in accordance with the terms ofihe Plan.
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88. Management and Director Equity Incentive Plan: A post-Effective Date management and director compensation incentive plan intended for certain management,
employees, consultants and directors of certain of
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the Reorganized Debtors.
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89. Master Ballots: The master ballots upon which the applicable Nominee or
record shall submit on behalf of the Beneficial Holders it represents the votes cast by siich Beneficial Holders to accept or reject the Plan. other holder of
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90. Mediation Settlement: The agreement in principle on a comprehensive
19
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settlement reached among the Debtors, the First Lien Steering Committee, the Creditors'
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Committee and the Second Lien Agent during a mediation held in Los Angeles, California
on August 17,24 and 25 of2009 before the Honorable Richard Neiter.
2. Mediation Term Sheet: The document attached as Exhibit i to the Plan,
22
23
which sets forth the terms of
the Mediation Settlement.
24
25
93. Neweo: An entity to be newly formed which wil be the ultimate holding company ofthe Reorganized Debtors.
94. Newco Equity Interests: The shares of common stock in Newco or limited liability company interests in Newco initially issued and outstanding pursuant to the Plan as of the Effective Date. The Newco Equity Interests may consist of a class of full-voting
equity interests (the "Class A- I Equity Interests") and a separate class of limited~voting
26 27 28
equity interests (the "Class A-2 Equity Interests"). To the extent applicable, each First Lien Lender shall have the option to choose to lake its New Equiiy Interests in the form of Class A- I Equity Interests or Class A-2 Equity Interests.
10
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~ Newco LLC Operating Agreement: That certain limited liability company

operating agreement which will govern Ncwco and shall be in form and substance
2
3
acceptable to the First Lien Steering Committee. A draft of the Newco LLC Operating
Agreement is attached as Exhibit J to the Disclosure Statement.
96. Newco Total Enterprise Value: $99.6 million, which is the midpoint range of the lo(al enterprise value of the Reorganized Debtors set forth in the Disclosure Statement or slIch amount provided in the Confirmation Order as the total enterprise value of the
Reorganized Debtors.
4
5
6
7 8
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97. New First Lien Notes: The term notes issued pursuant to Article IV.S hereof
in partial satisfaction or the First Lien Lender Secured Claims, which shall have the tenns and conditions described on Exhibit 2 to the Plan.
98. New First Lien Notes Maturity Date: The sixth anniversary of the Effective
Date.
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99. Nominee: Any broker, dealer, commercial bank, trust company, savings and loan, financial institution, or other party in whose name securities are registered or held of record on behalf of a Beneficial Holder.
i 00. Notice of Confirmation: That certain notice pursuant to Bankruptcy Rule
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3020(c)(2) notifying Holders of Claims and Interests and parties in interest that the Bankruptcy Court has confinned the Plan.
101. Old EQuity Interests: All of the Interests in any ollhe Debtors and any rights, options, warrants, calls, subscriptions or other similar rights or agreements, commitments or outstanding securities obligating the Debtors to issue, transfer or sell any Interests.
16 17
18
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i 02. Other Secured Claim: Any Secured Claim, other than a: (i) First Lien Lender Secured Claim; or (ii) Second Lien Lender Secured Claim.
19
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20
21
103. Periodic Distribution Date: The first Business Day that is as soon as
reasonably practicable occurring approximately ninety days after the Distribution Date, and thereafter, the first Business Day that is as soon as reasonably practicable occurring approximately ninety days after the immediately preceding Periodic Distribution Date.
104. Permitted Nominee: Any nominee of a First Lien Lender or Second Lien Lender that such lender has confirmed in writing to the Debtors and the First Lien Agent or
22
23
24
25
Second Lien Agent (as applicable) that it is such lender's nominee for the purpose of
distribution of some or all of such lender's distribution hereunder, provided that such
nominee shall be an affliate of
such lender.
26 27
105. Person: As defined in section 101(41) of
106. Petition Date: March 31, 2009 or, for Tuscany Golf Club, LLC, Pinnacle
28
Grading, LLC and Rhodes Homes Arizona, LLC, April 1,2009.
II
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107. Plan: This Second Amended Plan or
Reorganization for each of
the Debtors
2
3
pursuant 10 chapter i i of the Bankruptcy Code either in its present form or as it may be
altered, amended, modified, or supplemented from time to time in accordance with the terms
afthe Plan, the Bankruptcy Code, and the Bankruptcy Rules.
4 108. Plan Proponent: The First Lien Steering Committee.

5
of
6 7 8
E
109. Pravada: A Rhodes Homes development located in Mohave County (vicinity Kingman, Arizona) on approximately 1,312 acres.
i 10. Priority Non-Tax Claim: Any Claim accorded priority in right of payment pursuant to section 507(a) of the Bankruptcy Code, other than a Priority Tax Claim or an
Administrative Claim.
9
10
lL Prioritv Tax Claim: Any Claim of the kind specified in section 507(a)(8) of
i i 2. Professional: An Entity: (a) employed pursuant (0 a Bankruptcy Court order
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in accordance with sections 327 and 1 i 03 of the Bankruptcy Codc and to be compensated for services rendered prior to or on thc Confirmation Date, pursuant to sections 327, 328, 329,330, and 331 of the Bankruptcy Code or (b) awarded compensation and reimbursement by the Bankruptcy Court pursuant to section S03(b)(4) of the Bankruptcy Code.
ll Proof of Claim: A proof of Claim Filed against any of the Debtors in the
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Chapter 11 Cases.
i 14. Proof of Interest: A proof oflntercst Filed against any of
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16
17
the Debtors in the

Chapter
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-l Oualified Emolovee: An employee that satisfies thc requirements of 624.260 of
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the Nevada Revised Statutes.

116. Record Date: November 24,2009
l! Reinstated: (a) Leaving unaltered the legal, equitable, and contractual rights
.,
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22 23 24 25
to which a Claim entitles the Holder of such Claim or Interest so as to leave such Claim Unimpaired or (b) notwithstanding any contractual provision or applicable law that entitles the Holder of a Claim or Interest to demand or receive accelerated payment of such Claim or Interest afier the occurrence of a default: (i) curing any such default that occurred before or
after the Petition Date, other than a default of a kind specified in section 365(b)(2) of the
26 27
28
Bankruptcy Code or ofa kind that section 365(b)(2) expressly does not require to be cured; (ii) reinstating the maturity (to the extent such maturity has nol otherwise accrued by the passage of time) of such Claim as such maturity existed before such default; (iii) compensating ihe Holder of such Claim or Interest for any damages incurred as a result of
any reasonable reliance by such Holder on such contractual provision or such applicable
law; (iv) if such Claim or Interest arises from a failure to perform a nonmonetary obligation
other than a default arising from failure to operale a nonresidential real properly lease
subject to section 36S(b)( i )(A) of the Bankruptcy Code, compensating the Holder of such
12
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2 3
Claim or Interest (other than the Debtor or an insider) for any actual pecuniary loss incurred by such Holder as a result of such failure; and (v) not otherwise altering the legal, equitable or contractual rights to which such Claim entitles the Holder.
i 18. Rejection Damages Claim: Any Claim on account of the rejection of an

executory contract or unexpired lease pursuant to section 365 of
4
5
l. Rejection Damages Claim Deadline: The deadline to fie a Rejection
6 7
8
E
Damages Claim which shall be thirty days after the later of the Effective Date or the
effective dale of
rejection or repudiation of an executory contract or unexpired lease.
120. Released Party: Each of: (a) the First Lien Lenders in their capacity as such;
9
10
(b) the First Lien Steering Committee; (c) the Second Lien Lenders in theireapacity as such; (d) with respect to each of the foregoing Entities in clauses (a) through (e), such Entities' predecessors, successors and assigns; (e) the Creditors' Committee and the members thereof
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in their capacity as such; (f) with respect to each of the foregoing Entities in clauses (a) through (e), such Entities' subsidiaries, affliates, offcers, members, directors, principals,
employees, agents, financial advisors, attorneys, accountants, investment bankers,
II
12 13
consultants, representatives, and other Professionals; (g) the Debtors' offcers, employees
(including Thomas Robinson and Joseph Schramm) and Professionals, as of the Petition
Dale; and (h) Paul Buygens; provided. however, that clause (g) shall not include (i) the Rhodes Entities or their affliates; (ii) insiders of any of the Rhodes Entities (except as to
Thomas Robinson and Joseph Schramm); or (iii) relatives of
14
15 16 17
Rhodes.
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12 I. Reorganized Debtors: The Debtors, as reorganized pursuant to and under the Plan, or any successor thereto, by merger, consolidation, or otherwise, on or after the
Effective Date.
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122. Rhodes: James M. Rhodes, in his individual capacity and any capacity related to any of the Debtors including, without limitation, as shareholder, general partner,
limited partner, agent, offcer or principaL.
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20
21
i 23. Rhodes Entities: The following Entities: Rhodes; Glynda Rhodes; John
Rhodes; James M. Rhodes Dynasty Trust J; James M. Rhodes Dynasty Trust II; JMR
Children's Irrevocable Educational Trust; Truckee Springs Holdings, Inc.; Sedora Holdings LLC; Gypsum Resources, LLC; Tulare Springs Holdings, Inc.; Escalante~Zion Investments, LLC; HH Trust; Harmony Homes, LLC; Tock, LP; Tapemeasure, LP; Joshua Choya, LLC; American land Management, LLC; South Dakota Conservancy, LLC; Meridian Land Company, LLC; Yucca Land Company, LLC; Sagebrush Enterprises, Inc.; Rhodes Ranch, LLC; Westward Crossing, LLC; Pinnacle Equipment Rental, LLC; Desert Communities, Inc.; Spirit Underground, LLC; Tropicana Durango Investments, Inc.; Tropicana Durango, Ltd. I; Dirt Investments, LtC; Underground Technologies, LLC; South Dakota Aggregate and Engineering, LLC; Freedom Underground, LLC; Jerico Trust; Canberra Holdings, LtC; Custom Quality Homes, LLC; and Rhodes Ranch Golf, Inc.; and ID Interior Design, LLC.
22 23 24
25
26
27
28
124. Rhodes Entities Claims: Claims asserted by the Rhodes Entities.

125. Rhodes Entities Release: As set forth in Article VIlI'E hereof.
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126. Rhodes Ranch Golf Course: The golf course situated within the Rhodes
2
3
Ranch master-planned community located in the southwestern Las Vegas valley.

127. Roll-Up Transaction: A dissolution or winding up oftlie corporate existence of a Debtor or Reorganized Debtor under applicable state law or the consolidation, merger, contribution of assets, or other transaction in which a Debtor or Reorganized Debtor merges
4
5
with or lmnsfers substantially all of iis assets and liabilities to another Debtor or
Reorganized Debtor, on or after the Effective Date.
128. Schedules: The schedules of assets and liabilties, schedules of executory
6
7
contracts, and statement of financial affairs, as amended from time to time, Filed by the Debtors pursuant to section 521 of the Bankruptcy Code, the oftcial bankruptcy forms, and
the Bankruptcy Rules.
8
E E
9
10
129. Second Lien Agent: The currcnt and former agents, arranger, and
bookrunnerwith respect to, or under, the Second Lien Credit Agreement.
i 30. Second Lien Credit Agreement: Thc Credit Agreement (as may have been
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amended from time to time) dated as of November 21, 2005 among Heritage Land
Company, LLC, The Rhodes Companies, LLC, and Rhodes Ranch General Partnership, as the Borrowers, the Lenders Listed Therein, as the Lenders, and Credit Suisse, Cayman
Islans Branch, as Administrative Agent, Collateral Agent, Syndication Agent, Sole
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Bookrunner and Sole Lead Arranger, and the other Loan Documents (as defined in the
Second Lien Credit Agreement).
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ll Second Lien Lender Claims: All Second Lien Lender Secured Claims and
Second Lien Lender Deficiency Claims.

132. Second Lien Lender Secured Claim: Any Secured Claim on account of the
SeCOnd Lien Credit Agreement.
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19
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133. Second Lien Lender Deficiency Claim: Any deficiency Claim arising under the Second Lien Credit Agreement.
21 134. Second Lien Lenders: The Second Lien Agent and the entities that hold debt
under the Second Lien Credit Agreement.
22 23
135. Secured: When referring to a Claim: (a) secured by a Lien on propert in which an Estate has an interest, which Lien is valid, perfected, and enforceable pursuant to pursuant applicable law or by reason of a Bankruptcy Court order, or that is subject to setoff 24 the value of the Creditor's interest in to section 553 of the Bankruptcy Code, to the extent of 25 the Estate's interest in such property or to the extent of the amount subject to setoff, as the ankruptcy Code; or (b) Allowed applicable, as determined pursuant to section 506(a) of 26 pursuant to the Plan as a Secured Claim.
27 28
136. Securities Act: The Securities Act of 1933, 15 U.S.C. 77a-77aa, or any
similar fedeml, state, or local law.
14
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137. Security; As defined in section 2(a)(I) of
the Securities Act.

Holders of
2
3
i 38. Servicer: An agent, servicef, or other authorized representative of
Claims or Interests recognized by the Plan Proponent.

139. Solicitation Procedures Order: That certain order entered by the Bankruptcy
Courl on approving certain solicitation procedures for solicitation of
4
5
votes on the Plan.
6 7
140. Stanley En~ineering Litigation: The litigation styled Rhodes Homes

Arizona, LLC v. Stanley Consultants, Inc., No. CV2006-0i 1358, currently pending in the Superior Court of Arizona, Maricopa County.
of the Bankruptcy Code.
8 141. Subordinated Claim: Any Claim that is subordinated pursuant to section 510
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13
142. Supremacy Clause: Paragraph 2 of Article VI of
the U.S. Constitution.
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144. SWAP Transaction: 111at certain transaction between Credit Suisse

International and Heritage Land Company, LLC with Trade Date of
Deeemher 9, 2005 and
CSJN External in 53095828.
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145. Unclaimed Distribution: Any distribution under the Plan on account of an

Allowed Claim to a Holder that has not: (a) accepted a particular distribution or, in the case of distributions made by check, presented such check for payment within 120 days of the
14
15 16 17 18
date of the check; (b) given notice to the Reorganized Debtors of an intent to accept a
particular distribution; (c) responded 10 the Debtors' or Reorganized Debtors' requests for information necessary to tciltate a particular distribution; or (d) taken any other action necessary to facilitate such distribution.
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146. Uniform Commercial Code: The Unifonn Commercial Codc as in effect on

the Effective Date, as enacted in the applicable state.
147. Unimpaired: With respect to a Class of Claims or Interests, a Class of
19
.,
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20
21
or Interests that is unimpaired within the meaning of section 1124 of
Claims the Bankruptcy Code.
22
148. Unsecured Claim: Any Claim that is not secured by a Lien on property in which the Debtor's Estate has an intercst.
the United States of America.
23 149. U.S. Constitution: The Constitution of
24 151. Voting Deadline: January 4, 2010.
25
B.
Rules of
Interpretation:
26
L. For purposes of the Plan: (a) whenever from the context it is appropriate,
27 28
each term, whether stated in the singular or the plural, shall include both the singular and the plural, and pronouns slated in the masculine, feminine, or neuter gender shall include the masculine, feminine, and thc ncuter gender; (b) unless otherwise specifed, any reference in
15
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the Plan to a contract, instrument, release, indenture, or other agreement or document being
2
3
4
5
6 7
in a particular form or on paiticular terms and conditions means that such document shall be substantially in such form or substantially on sllth tenus and conditions; (c) unless otherwise specified, any reference in the Plan to an existing document, schedule, or exhibit, whether or not Filed, shall mean such document, schedule, or exhibit, as it may have been or may be amended, modified, or supplemented; (d) any reference to an Entity as a Holder of a Claim or Interest includes that Entity's successors and assigns; (e) unless otherwise specified, all references in the Plan to Articles are references to Articles of the Plan or to the Plan; (f) the words "herein," "hereot~" and "hereto" refer to the Plan in its entirety rather than to a particular portion of the Plan; (g) subject to the provisions of any contract, certificate of
incorporation, bylaw, instrument, release, or other agreement or document entered into in connection with the Plan, the rights and obligations arising pursuant to the Plan shall be governed by, and construed and enforced in accordance with applicable federal law, including the Bankruptcy Code and Bankruptcy Rules; (h) captions and headings to Articles
!
E 0 E
9
10
11
"
= =
are inserted for convenience of reference only and are not intended to be a part of or to
affect the interpretation of the Plan; (i) unless otherwise set forth in the Plan, the rules of construction set forth in section 102 of tile Bankruptcy Code shall apply; G) any term used in capitalized rorm in the Plan that is not otherwise defined but that is used in the Bankruptcy
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Code or the Bankruptcy Rules shall have the meaning assigned to such term in the Bankruptcy Code or the Bankruptcy Rules, as applicable; (k) all references to docket
numbers of documents Filed in the Chapter II Cases are references to the docket numbers under the Bankruptcy Court's CM/ECF system; (I) all references to statutes, regulations, orders, rules of courts, and the like shall mean as amended from time to time, as applicable
to the Chapter 11 Cases, unless otherwise stated; and (m) any immaterial effectuating provisions may be interpreted by the Reorganized Debtors in such a manner that is consistent with the overall purpose and intent of thc Plan all without further Bankruptcy Court order.
2. Computation of Time: In computing any period of time prescribed or
allowed, the provisions of Bankruptcy Rule 9006(a) shall apply. If the date on which a
14
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transaction may occur pursuant to the Plan shall occur on a day that is not a Business Day, then such transaction shall instead occur on the next succeeding Business Day.
20
21
C. Reference to Monetary Figures: All references in the Plan to monetary figures shall
refer to currency of
the United States of America.
22
23
ARTICLE II.
ADMINISTRATIVE AND PRIORITY CLAIMS
In accordance with section 1123(a)(I) of the Bankruptcy Code, Administrative
24 25 26 27 28
Claims and Priority Tax Claims have not been classified and thus are excluded from the Claims set forth in Article II. Classes of
A. Administrative Claims: Each Allowed Administrative Claim shall be paid in full, in

Cash, (i) on the later of (a) the Effective Date, (b) the date on which the Bankruptcy Court
enters an order allowing such Allowed Administrative Claim or (c) the date on which the Reorganized Debtors or the Debtors, with the consent or the First Lien Steering Committee
16
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2
3
(and in consultation with the Firsl Lien Agent and Second Lien Agent) and the Holder of such Allowed Administrative Claim oihenvise agree, and (ii) in such amounts as (a) are
incurred in the ordinary course of busines~ by the Debtors, (b) are Allowed by the
Bankruptcy Court, (e) may be agreed upon between the Holder of such Allowed
Administrative Claim and the Reorganized Debtors or the Debtors, with the consent of
the
4
5
First Lien Steering Committee (and in consultation with the First Lien Agent and Second Lien Agent), or (d) may otherwise be required under applicable law. Such Allowed
Administrative Claims shall include costs incurred in the operation of the Debtors'
6
7
businesses after the Petition Date, the allowed fees and expenses of Professionals retained by the Debtors and the Creditors' Committee and the fees due to the United Slates Trustee
pursuani to 28 U.S.c. 1930.
!
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B. Priority Tax Claims: Allowed Priority Tax Claims shall be paid in full, in Cash,
upon the later of (a) the Effective Date, (b) the date upon which there is a Final Order
9
10
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=
allowing such Claim as an Allowed Priority Tax Claim, (e) the date that such Allowed
Priority Tax Claim would have been due if the Chapter I I Cases had not been commenced, or (d) upon such other terms as may be agreed to between the Reorganized Debtors or the Debtors, with the consent of the First Lien Steering Committee (and in consultation with the First Lien Agent and Second Lien Agent), and any Holder of an Allowed Priority Tax Claim; provided, however, that the Reorganized Debtors or Debtors, with the consent of the First Lien Steering Committee (and in consultation with the Firsl Lien Agent and Second Lien Agent), in lieu of payment in full of Allowed Priority Tax Claims on the Effective Date, may make Cash payments respecting Allowed Priority Tax Claims deferred to the extent permitted by Section I 129(a)(9) of the Bankruptcy Code and, in such event, unless otherwise provided herein, inLerest shall be paid on the unpaid portion of such Allowed
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PrioriLy Tax Claim at the Federal statutory rate; provided, further, that deferred Cash
payments on account of an Allowed Priority Tax Claim shall be paid quarterly over a period
of six years commencing wiih the quarter after which such Priority Tax Claim has been
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19
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ARTICLE II.
CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS
22 23
A. Classification of Claims and Interests: All Claims and Interests, except

Adminislrative Claims and Priority Tax Claims, arc classified in the Classes set forth in Article III. A Claim or Interest is classified in a particular Class only to the extent that the Claim or Interest qualifies within the description of that Class and is classified in other Classes to the extent that any portion of the Claim or Interest qualifes within the description
of such other Classes. A Claim is also classified in a particular Class for the purpose of receiving distributions pursuant 10 the Plan only to the extent that such Claim is an Allowed
24
25
26 27 28
Claim in that Class and has not been paid, released, or otherwise satisfied prior to the
Effective Date.
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.L Class Idcntilicaiion: Below is a chart assigning each Class a letter and, in
2
3 4
5
some cases, a number for purposes of identifying each separate Class.

Class
Claim or Interest Type
A-I
A-2
First Lien Lender Secured Claims Second Lien Lender Secured Claims
Other Secured Claims
Priority Non~Tax Claim
-J
C-I
C~2
6 7 8
E
General Unsecured Claims
First Lien Lender Deficiency Claims
9
10
C-3 C-4
D
Second Lien Lender Deficiency Claims

Subordinated Claims
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Old Equity Interests

Intercompany Claims
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B. Treatment of Classes of Claims and Interests: To the extent a Class contains

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Allowed Claims or Interests with respect to a particular Debtor, the treatment provided to each Class for distribution purposes is specified below.
.L Class A-I-First Lien Lender Secured Claims
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a.
Classificaiion: Class A.I consists of all First Lien Lender Secured
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Claims.
b. Impairment and Voting: Class A-I is Impaired by the Plan. Each
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Holder of an AHowed Claim in Class A-I is entitled to vote to accept or reject the
Plan.
20
21
c. Treatment: On the Effective Datc or such other date as set forth herein, each of the First Lien Lenders (or its PenniUed Nominee) shall receive on account of its Secured Claims, (w) its pro rata share of $1.5 million in Cash from the
the proceeds of the First Lien Lenders' Collateral, (x) its pro rata share of 100% of New First Lien Notes, and (y) its pro rata share of 100% of the Newco Equity
22
23
24 25
Interests (subject to dilution for any Newco Equity Interests issued pursuant to a Management and Director Equity Incentive Plan). The $J.5 million payment to the First Lien Lenders shall be allocated and deemed paid to the First Lien Lenders in
accordance with Article Vii.F. of
the Plan.
26 27
28
2. Class A-2 Second Lien Lender Secured Claims

a. Classification: Class A-2 consists of all Second Lien Lender Secured
Claims.
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b. ImDuirmcnt and Voting: Class A-2 is Impaired by the Plan. Each
2
3
Holder or an Allowed Claim in Class A-2 is entitled to vote to accept or reject the
Plan.
4
5
6
7 8
E E
c. Treatment: On the Effective Date, only if the Class of Second Lien Lender Secured Claims votes in favor of the Plan, each of the Second Lien Lenders (or its Permitted Nominee) shall receive its pro rata share of a 50% interest in the the reasonable fees Stanley Engineering Litigation, without a reduction on account of and expenses of Ropes & Gray LLP and local counsel for the Second Lien Agent. subject to an aggregate cap of $500,000, each of which such fees shall be paid in Cash to the Second Lien Agent on the Effective Date. If the Class of Second Lien
Lender Secured Claims voles in favor or the Plan, upon final resolution of the
Stanley Engineering Litigation, each holder of an Allowed Second Lien Lender
9
"
10
Claim wil receive its pro rata share of the net proceeds of the Stanley Engineering Litigation. If the Class of Second Lien Lender Secured Claims voles against the Plan, each of the Second Lien Lenders shall receive no recovery on account of such
Secured Claims_
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1. lass A-3-0thcr Secured Claims

a. Classification: Class A-3 consists of all Other Secured Claims_
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b. Impairment and Voting; Class A-3 is Unimpaired by the Plan. Each
Holder of an Allowed Claim in Class A-3 is conclusively presumed to have accepted the Plan and is not entitled to vote to accept or reject the Plan.
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17 18 19
c. Treatment: To the extent not satisfied by the Debtors, pursuant to

Bankruptcy Court order, in the ordinary course of business prior to the Effective
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Date, at the option of the Reorganized Debtors on or after the Effective Date (i) an Allowed Other Secured Claim shall be Reinstated and rendered Unimpaired in
accordance with section i 124(2) of the Bankruptcy Code, (ii) a Holder of an
..
Allowed Other Secured Claim shall receive Cash in an amount equal to such
Allowed Other Secured Claim, including any interest on such Allowed Other
Secured Claim required to be paid pursuant to section 506(b) of the Bankruptcy
20
21
Code, on the later of the Effective Date and the date such Other Secured Claim
becomes an Allowed Other Secured Claim, or as soon thereafter as is practicable,
22
23
(iii) a Holder of an Allowed Other Secured Claim shall receive the Collateral
securing both it.. Allowed Other Secured Claim and any interest on such Allowed Other Secured Claim required to be paid pursuant to section 506(b) of the Bankruptcy Code, or (iv) a Holder of an Allowed Other Secured Claim shall receive such treatment as to which such holder and the Reorganized Debtors or the Debtors, with the consent of the rrst Lien Steering Committee (and in consultation with the First Lien Agent and Second Lien Agent), otherwise agree.
4. Class B-Priority Non-Tax Claims
3. Classification: Class B consists of all Priority Non-Tax Claims.
24 25
26 27
28
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b. Impairment and Voting: Class B is Unimpaired by the Plan. Each
2
3
Holder of an Allowed Claim in Class B is conclusively presumed to have accepted the Plan and is not entitled to vote to accept or reject the Plan.
c. Treatment: Each Holder of an Allowed Priority Nl1Tax Claim shall
4
5 6
receive Cash in an amount equal to such Allowed Priority Non-Tax Claim on the later of the Effective Dale and the dale siich Priority Non-Tax Claim becomes an Allowed Priority Non-Tax Claim, or as soon thereafter as is practicable, unless the Holder of an Allowed Priority Non-Tax Claim and the Reorganized Debtors or the Debtors, with the consent of the First Lien Steering Committee (and in consultation
with the First Lien Agent and Second Lien Agent), otherwise agree.
1. Class C-I-General Unsecured Claims (including any Allowed Rhodes
7
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9
10
Entities Claims)
a. Classification: Class C-L consists of all General Unsecured Claims
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including any Allowed Rhodes Entities Claims.

b. Impairment and Voting: Class C-I is Impaired by the Plan. Each
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Holder or an Allowed Claim in Class C-L is entitled to vote to accept or reject the
Plan.
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14
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c. Treatment: On the Effective Date, each Holder of an Allowed

General Unsecured Claim (including any Allowed Rhodes Entities Claims) shall receive its pro rata share of the Litigation Trust Interests allocable to the Holders or
General Unsecured Claims on account of
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its Allowed Claim.
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Classification: Class C-2 consists of all First Lien Lender Deficiency
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b. Impairment and Voting: Class C-2 is Impaired by the Plan. Each
20
21
Holder of an Allowed Claim in Class C-2 is entitled to vote to accept or reject the
Plan.
c. Treatment: On the Effective Date, each Holder ora First Lien Lender
22 23
Deficiency Claim shall receive its pro rata share of the Litigation Trust Interests allocable to the Holders of First Lien Lender Deficiency Claims on account of its
Allowed Claim.
7. Class C-3 Second Lien Lender Deficiencv Claims
24
25
26
27
a. Classification: Class C-3 consists of all Second Lien Lender

Deficiency Claims.
28
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b. Impairment and Voiin~: Class C-3 is Impaired by the Plan. Each
Holder of an Allowed Claim in Class C~3 is entitled to vote to accept or reject ihe
2 3
Plan.
c. Treatment: On the Effective Date, each Holder of an Allowed Second
4
5
6 7
8
E E
Lien Lender Deficiency Claim shall receive its pro rata share of the Litigation Trust Intcrests allocable to the Holders or Second Lien Lender Deficiency Claims on account of its Allowed Claim. If the Class of Second Lien Lender Secured Claims votes against the Plan, the distribution of Litigation Trust Interests allocable to the Holders of Second Lien Lender Deficiency Claims shall be subject to the reasonable
fees and expenses of Ropes & Gray LLP and local counsel for the Second Lien
Agent.
8. Class C-4-Subordinated Claims
a. Classification: Class C-4 consists of all Subordinated Claims. The
9
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First Lien Steering Committee docs not believe there arc any Subordinated Claims but has created Class C-4 out of an abundance of caution.
b. Impairment and Voting: Class C-4 is Impaired by the Plan. Each
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Holder of an Intcrest in Class C-4 is conclusively presumed to have rejected the Plan and is not entitled to vote to accept or reject the Plan.
c. Treatment: Claims subordinated under applicable law shall not
15
receive any recovery on account of
their Claims.
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9. Class D-Old EQuitv Interests

a. Classification: Class D consists orall Old Equity Interests.
b. Impainnent and Voting; Class D is Impaired by the Plan. Each

19
Holder of an Interest in Class 0 is conclusively presumed to have rejected the Plan
;;
20
21
and is not entitled to vote to accept or reject the Plan.

c. Treatment: Each holder of an Old Equity Interest sl1all not be entitled to, and shan not receive or retain any propelty or interest in propei1y on account of
22 23 24 25 26 27 28
such Old Equity Interest.

10. Class E rntcrcoffPunv Claims
a. Classification: Class E consists of all Intercompany Claims.
b. Impairment and Voting: Class E is Impaired by the Plan. Each
Holder of a Claim in Class E is conclusivcly presumed to have rejected the Plan and is not entitled 10 vote to accept or reject the Plan.
c.
Treatment: At the election of
the Reorganized Debtors, Intercompany
Claims will
be (i) reinstated, in full or in part, (ii) resolved through set-off,
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distribution, or contribution, in full or in part, or (iii) cancelled and discharged, in

2
3
full or in pal1, in which case such discharged and satisfied portion shall be eliminated
and the Holders thereof shall not be entitled to, and shall not receive or retain, any
property or interest in property on account of such portion under the Plan.

C. Class Voting Rightc;: The voting rights of each Class arc as follows.
.L Classes Entitled to Vote: The following Classes arc Impaired and thus
4
5
entitled to vote to accept or reject the Plan.

Classes
6
7 8
E
A-I
A-2
C-I
C-2
C-3
2. Presumed Acceptance of Plan: The following Classes are Unimpaired and
9
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deemed to accept ihe Plan. Therefore, such Classes are not entitled to vote to accept or
reject the Plan and the vote of such Holders of
Claims and Interests shall not be solicited.

Classes
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B
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.1 Presumed Reiection of Plan: The following Classes are Impaired and
19
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conclusively presumed to reject the Plan. Therefore, such Classes are not entitled to vote to accept or reject the Plan and the vote of such Holders of Claims or Interests shall not be solicited.
Class
22
23 24 25 26 27 28
C-4
D
D. BankrUPtcy Code Section II i l(b) Election: Bankruptcy Code section

I i i I(b)(t)(A) authorizes a class of
secured claims to elccl, by at least two~thirds in amount
and more than half in number, to waive any deficiency claim otherwise assertable against
the debtor and instead require the debtor to make payments equal to the total amount of claims, with such payment obligation having a present value equal to the current value of
the the
creditors' collateraL. A section i i II(b) election must be made by a class of secured

creditors at or prior to the conclusion of the hearing on the Disclosure Statement. No class
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2
3
of Secured Claims made a section I i 11(b) election at or prior to the conclusion of the hearing on the Disclosure Statement. Accordingly, Bankruptcy Code section i lll(b) is not
applicable to the Plan.
E. Acceotance or Reiection orlnc Plan
4
.L Acceptance by Impaired Classes of Claims: Pursuant to Bankruptcy Code
6
7 8
E
26(e), an Impaired Class afClaims has accepted the Plan fthe Holders oral least two-thirds in dollar amount and more than one-half in number of the Allowed Claims in such Class actually voting have voted to accept the Plan.
section i 1 26(c) and except as otherwise provided in Bankruptcy Code section i I
2. Tabulation of Votes on a Consolidated Basis: 'Ibe Claims and Solicitation

Agent will tabulate all votes on the Plan on a consolidated basis for the purpose of
9
10
determining whether the Plan satisfies Bankruptcy Code section I 129(a)(8) and (10).
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Plan under section I 1
the the Bankruptcy Codc with respect to any Impaired Class that does not accept the Plan pursuant to section 1126 of the Bankruptcy Code. The First Lien
3. Cramdown: The First Lien Steering Committee requests Confirmation of 29(b) of
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Steering Committee reserves the right lo modify the Plan to the extent, if any, that
Confirmation pursuant to section i 129(b) orthe Bankruptcy Code requires modification.
14 15
:L. Controversy Concerning Impairment: If a controversy arises as to whethcr any Claims or Interests, or any Class of Claims or Interests, are Impaired, the Bankruptcy Court
shall, aftcr notice and a hearing, determine such controversy on or before the Confirmation Date.
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ARTICLE iv.
PROVISIONS FOR IMPLEMENTATION OF THE PLAN
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A. Substantive Consolidation: The Plan shall serve as a motion by the First Lien
Steering Committee seeking entry of a Bankruptcy Court order substantivdy consolidating
all of the Estates into a single consolidated Estatc for all purposes associated with
..
20
21
Confirmation and distributions to be made under the Plan.
22 23 24
25
If substantivc consolidation of all of the Estates is ordered, then on and after the Effective Date, all assets and liabilties of the Debtors shall be treated as though they were merged into the Estate of The Rhodes Companies, LLC for all purposes associated with
the obligations of any Confirmation and Consummation, and all guarantees by any Debtor of other Debtor shall be eliminated so that any Claim against any Debtor and any guarantee thereof by any other Debtor, as well as any joint and several liability of any Debtor with
respect to any other Debtor shall be treated as one collective obligation of the Debtors.
Substantive consolidation shall not affect the legal and organizational structure of the
26
27 28
Reorganized Debtors or their separate corporate existences or any prepetition or pastpetition
guarantees, Liens, or security interests that are required to be maintained under the Bankruptcy Code, under the Plan, or in connection with contracts or leases that were
assumed or entered into during the Chapter II Cases. All duplicative Claims (identical in
both amount and subject matter) filed against more than one or the Debtors shall be
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3
automatically expunged so that only one Claim survives against the consolidated Debtors (but in no way shall such surviving Claim be deemed Allowed by reason of this Section). Any alleged defaults under any applicable agreement with the Debtors or the Reorganized Debtors arising from substantive consolidation shall be deemed Cured as of the Effective
Date.
4
5
B. Sources of Consideration for Plan Distributions: The Reorganized Debtors shall
6 7
8
E
fund distributions under the Plan with Cash on hand, proceeds from the Mediation the New First Lien Notes and Newco Equity Interests.
Settlement, existing assets, and the issuance of
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1. Newco Equity Interests: On the Effective Date, but not more than thirty days after the Effectivc Date for initial distributions on account of Allowed Claims, Ncweo shall issue Newco Equity Interests (based upon the Neweo Total Enterprise Value) to the Holders of First Lien Lcndcr Secured Claims. Each share of Class A-2 Equity Interest wHl be convertible at the option of the holder, exercisable at any time, into one Class A-I Equity Interest
The economic rights oftbe Class A-I Equity Interests and Class /\-2 Equity Interests shall be identicaL. The Class A-2 Equity Interests will not be entitled to general voting rights, but will be entitled to vote on an "as converted" basis (together with the holders oflhe Class A-I
Equity Interests, as a single class) on certain non-ordinary course transactions, including (i) any authorization of, or increase in the number of authorized shares of, any class of
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capital stock ranking equal or senior to the Newco Equity Interests as to dividends or
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liquidation prctrencc, including additional Neweo Equity Interest.., (ii) any amendment to the Newco's certifcate of incorporation or by-laws, (iii) any amendment to any shareholders agreement, (iv) any sale, lease or other disposition of all or substantially all of the assets of the Reorganized Debtors through one or more transactions, (v) any recapitalization,
reorganization, consolidation or merger of the Reorganized Debtors, (vi) to the extent that
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holders of Class A-I Equity Interests have the right to vote thereon, any issuance or entry
.,
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into an agreement for the issuance of capital stock (or any options or other securities
convertible into capital stock) of the Reorganized Debtors, except as may be provided for under any management incentive plan, and (vii) to the extent that holders of Class A-I Equity Interests have the right to vote thereon, any redemption, purchase or other acquisition
20
21
22 23 24
2S
by the Newco of any of its capital stock (except for purchases from employees upon
termination of employment).
The Class A-2 Equity lnterests will be entitled to a separate class vote on any
amendment or modification of any rights or privileges of the Class A-2 Equity Interests that
does not equally affect the Class A-I Equity Interests. In any liquidation, dissolution or winding up of the Reorganized Debtors, all assets will be distributed to holders of the
Neweo Equity Interests on a pro rata basis.
a. Section I I45 ExemPtion: Pursuant to section 1145 of
26 27 28
the Bankruptcy
Code, the offering, issuance, and distribution of any Securities contemplated by the Plan and any and all settlement agreements incorporated therein, including the
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2
3
Ncwco Equity Interests, shall, to the fullest extent permitted by applicable law, be exempt from, among other things, the registration requirements of section 5 of the Securities Act and any other applicable law requiring registration prior to the offering, issuance, distribution, or sale of Securities. In addition, under section 1145 of ihe Bankruptcy Code any Securities contemplated by the Plan, including the
4
5
Ncwco Equity Interests and New First Len Notes, wil be freely tradable and
transferable by the recipients thereof, subject to (i) the provisions of section
6
7 8
E E
section 2(a)(l1) of
1145(b)(I) of the Bankruptcy Code relating to the definition of an underwriter in the Securities Act, and compliance with any rules and regulations
of the Securities and Exchange Commission, if any, applicable at the time of any future transfer of such Securities or instruments; (ii) the restrictions, if any, on the
transferabilty of such Securities and instruments set forth in the Newco LLC
Operating Agreement, a draft of which is attached to the Disclosure Statement as
Exhibit J; and (iii) applicable regulatory approval.
b. Issuance and Distribution of
9 10
11
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the Newco Equity Interests: The Newco
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Equity Interests, when issued or distributed as provided in the Plan, wil be duly authorized, validly issued, and, if applicable, fully paid and nonassessable_ Eaeh distribution and issuance shall be governed by the tenns and conditions set forth in the Plan applicable to such distribution or issuance and by the terms and conditions
of the instruments evidencing or relating to such distribution or issuance, which
terms and conditions shall bind each Entity receiving such distribution or issuance.
14 15 16 17 18
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2. New First Lien Notes: On the Effective Date or as soon as reasonably

practicable thereafter, Newco shall issue the New First Lien Notes. The Reorganized Debtors shall be co~borrowers and guanmtors under the New First Lien Notes. The New First Len Notes shall have the tenns set forth on Exhibit 2 to the Plan and as otherwise
provided in the terms of
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the the documents governing the New First Len Notes_ A draft of New First Licn Notes credit agreement is attached to the Disclosure Statement as Exhibit K.
New co (or such other the board of directors of 1: Exit Financing: To the extent governing body) detennines that additional financing is necessary for the operation of the Reorganized Debtors' businesses, Newco and/or the Reorganized Debtors may obtain additional financing. The First Lien Steering Committee does not anticipate that additional sources of funding in addition to Cash on hand, the Newco Equity Interests and the New First Lien Notes wil be necessary to fund distributions under the Plan on the Effective Date.
"
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20
21
22
23 24 25
C. Corporate Existence: Except as otherwise provided in the Plan, each Debtor shall
continue to exist after the Effective Date as a separate corporate entity, limited liability
company, partnership, or other form, as the case may be, with all the powers of a
corporation, limited liability company, partnership, or other form, as the case may be,
pursuant to the applicable law in the jurisdiction in which each applicable Debtor is
26 27
incorporated or formed and pursuant to the respective certificate of incorporation and
28
bylaws (or other formation documents) in effect prior to the Effective Date, except to the extent such certificate of incorporation and bylaws (or other formation documents) are amended by the Plan or otherwise, :md to the extent such documents are amended, such
documents are deemed to be pursuant to the Plan and require no further action or approvaL.
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2 3 4
5
D. Vcstiiil! of Assets in the Reorganized Debtors: Except for any Claims or Causes of Action transferred to the Litigation Trust and unless otherwise provided in the Plan or any
agreement, instrument, or other document incorporated therein, on the EtTective Date, all
property in each Estate, all Causes of Action, and any property acquired by any of the
Debtors pursuant to the Plan shall vest in each respective Reorganized Debtor, free and clear
of all Liens, Claims, charges, or other encumbrances. On and after the Effective Date,
except as otherwise provided in the Plan, each Reorganized Debtor may operate its business and may use, acquire, or dispose of property and compromise or settle any Claims, Interests, or Causes of Action without supervision or approval by the Bankruptcy Court and free of any restrictions orthe Bankruptcy Code or Bankruptcy Rules_
E. Cancellation of EQuity Securities and Related Oblie:ations: On the Effective Date,
7
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E
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12 13 14 15 16 17
18
except as otherwise specifically provided for in the Plan: (I) the Old Equity Interests and any other Certificate, note, bond, indenture, purchase right, option, warrant, or other instrument or document directly or indirectly evidencing or creating any indebtedness or obligation of or ownership interest in the Debtors giving rise to any Claim or Interest (except
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such Certificates, notes, other instruments or documents evidencing indebtedness or

obligations of
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the Debtors that are Reinstated pursuant to the Plan), shall be cancelled solely
as to the Debtors, and the Reorganizcd Debtors shaH not have any continuing obligations
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thereunder and (2) the obligations of the Debtors pursuant, relating, or pertaining to any agreements, indenturcs, certificates of designation, bylaws, or certificate or articles of
incorporation or similar documents governing the Old Equity Interests and any other Cerlificates, noles, bonds, indentures, purchase rights, options, warrants, or other instruments or documents evidencing or creating any indebtedness or obligation of the
Debtors (except such agreements or Certificates, notes or other instruments evidencing
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indebtedness or obligations of the Debtors that are specifically Reinstated pursuant to the
Plan) shall be released and discharged; provided, however, that notwithstanding
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Confirmation, any such indenture or agreement that governs the rights of the Holder of a
Claim shall continue in effect solely for purposes of: (w) allowing Holders to receive
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distributions under the Plan; (x) allowing a Scrvicer to make distributions on account of such Claims as provided in the applicable governing agreement; (y) pcrmitting such Servicer
20
21
to maintain any rights and Liens it may have against property other than the Reorganized
Debtors' property for fees, costs, and expenses pursuant to such indenture or other agreement; and (z) governing the rights and obligations of non-Debtor parties to sueh
agreements vis--vis each other (including, without limitation, the rights and obligations of
non-Debtor parties under the First Lien Credit Agreement and the Second Lien Credit Agreement, which, for the avoidance of doubt, shall not be affected by the Plan except as 23 otherwise expressly provided in the Plan); provided, further. however, that the preceding 24 proviso shaH not affect the discharge of Claims or Interests pursuant to the Bankruptcy Code, the Confirmation Order, or the Plan, or result in any expense or liability to the
22
25
Reorganized Debtors. The Reorganized Debtors shall not have any obligations to any Servicer for any fees, costs, or expenses, except as expressly otherwise provided in the Plan.
F. Restructuring Steps and Transfer of Certain Intercsts to Newco: In the event the
Rhodes Entities comply with all of
26
27 28
their obligations pursuant to the Mediation Settement
and the Plan, on the Effective Date or, in the case of
step (4) below, effective the next day, the following transactions shall be deemed to have occurred in the order set forth below.
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1, Newco shall be formed as a new limited liability company. The First Lien
Lender Secured Claims shall be deemed 10 have been exchanged for the membership
2
3
interests in Ncwco. Ncwco shall be deemed 10 hold all of the First Lien Lender Secured Clams. Ai the option of a holder, membership interests in Ncwco may be transferred to a corporation prior to Step 2.
2.
Ncwco shall purchase all of
tile Heritage Equity Securities for $10.00.
6 7
8
E E
.1 Contempomncous with or subsequent to Newco's purchase of the Heritage Equity Securities, The Rhodes Companies, LLC - the general partner of each of Tick, LP; Glynda, LP; Jackknife, LP; LP; Batcave, LP; Overflow, LP; Wallboard, LP; and Chalkline,
LP, ~~shaii sell its general partnership interests in such entities to Newco for $1.00.
Alternatively, the membership interest in The Rhodes Companies, LLC may be acquired from its sole member - Sagebrush Enterprises, Inc. - in consideration for release of its
obligations under the Firsl Lien Lender Secured Claims.
4. Newco's members may agree to continue Newco as an LLC, fie a check the box election effective the day after the Effective Date to treat Newco as a corporation for tax purposes, or convert into a corporation as of the day after the Effective Date.
In any event, to the extent any cancellation of indebtedness is derived from the
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foregoing transactions under the Internal Revenue Code, it shall be allocable to the holders of the Old Equity Interests as required by the Intcrnal Revenue Code. To be clear, Newco's purchase of the Heritage Equity Securities shall occur (a) contemporaneously with or immediately before the membership interests of those cntites described in Article IV.F.3,
::i:'-.i:~ .. ",..
immediately above, arc acquired; (b) before any debt or obligations of the Debtors arc
canceled or forgiven; (d) before any new notes are issued or existing debt is modified by the Reorganized Debtors; and (c) before any of the other acts or events contemplated in Article m.B, et seq., of the Plan. The holders of the Heritage Equity Securities and Newco wil
report the sale and purchase or the Heritage Equity Securities in accordance with revenue
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rul;ng 99-6,1991-1 CB 432.

G. RC$tnicturing Transactions: On the Effective Date or as soon as reasonably
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practicable thereafter, the Reorganized Debtors may take all actions as may be necessary or
22
23 24 25
appropriate to effect any transaction described in, approved by, contemplated by, or necessary to eflectuate the Plan, including: (I) the execution and delivery of appropriate
agreements or other documents of merger, consolidation, or reorganization containing terms that are consistent with the terms of the Plan and that satisfy the requirements of applicable
law; (2) the execution and delivery of appropriate instruments of transfer, assignment,
assumption, or delegation of any propert, right, liability, duty, or obligation on terms

consistent with the terms of the Plan; (3) the fiing of appropriate certificates of
incorporation, merger, or consolidation with the appropriate governmental authorities

pursuant to applicable law; (4) the Roll-Up Transactions; (5) the establishment of a
26 27
28
liquidation trust or other appropriate vehicle to hold assets for sale that wiI not be utilized in
the business of the Reorganized Debtors; and (6) all other actions that the Reorganized
Debtors determine are necessary or appropriate, including the making of filings or

recordings in connection with the relevant RolI.Up Transactions. The form of
each RolI~Up
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3
Transaction shall be determined by the Reorganized Debtor that is party to such Roll-Up Transaction. Implementation of the Roll-Up Transactions shall not affect any distributions, discharges, exculpations, releases, or injunctions set lorth in the Plan.
II. Coroorate Action: Each or the matters provided for by the Plan involving the
corporate structure of
4
5
the Debtors or corporate or related actions to be taken by or required
of the Reorganized Debtors shall, as of the Effective Date, be deemed to have occurred and be effective as provided in the Plan (except to the extent otherwise indicated), and shall be
authorized, approved, and, to the extent taken prior to the Effective Dale, ratified in all respects without any requirement of further action by Holders of Claims or Interests, 7 directors of the Debtors, or any other Entity. Without limiting the foregoing, such actions
6 8
E E
may include: the adoption and filing of the Newco LLC Operating Agreement; the adoption and nling of organization documents of the othcr Reorganized Debtors; the appointment of directors and offcers for the Reorganized Debtors; and the adoption, implementation, and amendment of the Management and Director Equity Incentive Plan.
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i. Post-Confirmation Property Sales: To thc cxtent the Reorganized Debtors sell any
II
12 13 14
15
of their property prior to or including the date that is one year after Confirmation, the
Reorganized Debtors may elect to sell such property pursuant to sections 363, 1123, and
1146(a) of
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J. Organizational Documents: The certificates of incorporation and bylaws (or other formation documents relating to limited liability companies, limited partnerships or other forms of Entity) of the Debtors shall be in form and substance acceptable to the First Licn
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Steering Committee and shall be consistent with the provisions of the Plan and the
Bankruptcy Code. The Newco LLC Operating Agreement shall be in form and substance acceptable to the First Lien Steering Committee. The organizational documents for Newco shall, among other things: (1) authorize issuance of the Newco Equity Interests; and (2) pursuant to and only to the extent required by section i 123(a)(6) of the Bankruptcy Code, include a provision prohibiting the issuance of non-voting Equity Securities. On or as soon
as reasonably practicable after the Effective Date, to the extent required, each of the
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Reorganized Debtors shall fie new certificates of incorporation (or other formation
documents relating to limited Iiahilty companies limited partnerships, or other fOrms of
Entity) in form and substance acceptable to Firsl Lien Steering Committee, with the
20
21
secretary (or equivalent state offcer or Entity) of the state under which each such
Reorganized Debtor is or is to be incorporated or organized. On or as soon as reasonably practicable after the Effective Date, to the extent required, Newco shall fie the applicable organizational documents with the secretary (or equivalent state offcer or Entity) of the state under which Newco is to be incorporated or organized. After the Effective Date, each Reorganized Debtor may amend and restate its new certificate of incorporation and other
constituent documents as permitted by the relevant state corporate law.
22 23 24 25
26 27
28
K. EffectuatinQ. Documents, Further Transactions: On and after the Effective Date, the Reorganized Debtors, and the offcers and members of the boards of directors (or other governing bodies) thereof, are authorized to and may issue, execute, deliver, fie, or record such contracts, Securitics, instruments, releases, and other agreements or documents and take such actions 3S may be necessary or appropriate to effectuate, implement, and further
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evidence the terms and conditions or the Plan and the Securities issued pursuant to the Plan
in the name of and 011 behalf or the Reorganized Debtors, without the need for any
2
3
approvals, authorizations, or consents except for those expressly required pursuant to the Plan.
L. Exemption from Certain Transfer Taxes and Recording Fees: Pursuant to section
i 146(a) of the Bankruptcy Code, any transfer from a Debtor to a Reorganized Debtor or to any Entity pursuant 10, in contemplation of, or in connection with the Plan or pursuant to: (I) the issuance, distribution, transfer, or exchange of any debt, equity security, or other interest in the Debtors or the Rcorganized Debtors; (2) the creation, modification, consolidation, or recording of any mortgage, eed of trust, or other security interest, or the securing of additional indebtedness by such or other mcans; (3) the making, assignment, or recording of any lease or sublease; or (4) the making, delivery, or recording of any deed or
4
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other instrument of transfer under, in furtherance or, or in connection with, the Plan,
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including any deeds, bills of sale, assignments, or other instrument of transfer executed in connection with any transaction arising out of, contemplated by, or in any way related to the
Plan, shall not be subject to any ocument recording tax, stamp tax, conveyance fee,
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intangibles or similar tax, mortgage tax, real estate transfer tax, mortgage recording tax, Uniform Commercial Code fiing or recording fee, or recording fcc, or other similar tax or governmental assessment, and the appropriate state or local governmental offcials or agents shall forego the collection of any such tax or governmental assessment and to accept for
fiing and recordation any of the foregoing instruments or other documents without the
14
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payment of any such tax or governmental assessment.
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M. Directors and Offcers of the Reoreanized Debtors: On the Effective Date, the board of directors of the Reorganized Debtors or similar governing entities shall be
composed of one or more members appointed by the First Lien Steering Committee. On the
Effective Date, a chief executive offcer or similar offcer selected by the board of directors
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17 18 19
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of the Reorganized Debtors shall be appointed. The identity of such offcers and directors
shall be disclosed at or prior to the Contrmation Hearing.
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N. Management and Director EQuity Incentive Plan: The Reorganized Debtors reserve
conditions of any Management and Director Equity Incentive Plan shall be detennined by
co.
20 the right to implement a Management and Director Equity Incentive Plan. The tenns and
21 the Board of Directors of New
22
23
O. The Litigation Trust: On the Effective Date, the Litigation Trust wil bc
implemented pursuant to the terms of the Litigation Trust Agreement. A draft of the Litigation Trust Agreement is attached to the Disclosure Statement as Exhibit 1. On the Effective Date, pursuant to the terms of the Litigation Trust Agreement, the Debtors wil
transfer the Litigation Trust Assets for and on behalf of the Litigation Trust Beneficiaries,
24
25
26 27 28
which wil be the Holders of Allowed Claims in Classes C-L, C-2 and C-3. For all federal income tax purposes, the beneficiaries of the Litigation Trust shall be treated as grantors and owners thereof and it is intended that thc Litigation Trust be classified as a liquidating trust under Section 301.7701-4 of the Treasury Rcgulations and that such trust is owned by its benetciaries. Accordingly, for federal income tax purposes, it is intended that the Litigation Trust Beneficiaries be treatcd as if they had received a distribution of an undivided interest
29
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in the Litigation Trust Assets and then i.onlrbuted such interests 10 the Litigation Trusl. The Litigation Trust will initially be funded with $100,000, which amount will be transferred to
2 3
the Litigation Trust on the Effective Date and which wil be repaid to the Reorganized
Debtors from the first proceeds received by the Litigation Trust.
4
5
The Litigation Trust shall issue non-transferable interests to Holders of Allowed First
6
7 8
E E
Lien Lender Deficiency Claims, Allowed Second Lien Lender Deficiency Claims, and Allowed General Unsecured Claims (including any Allowed Rhodes Entities Claims) with each Holder of an Allowed Claim in each or the foregoing Classes of Claims receiving its
pro rata share of the Litigation Trust Interests allocable to each such Class of
Claims.
9
10
A list of Litigation Trust Assets is attached to the Disclosure Statement as Exhibit G. The Litigation Trust Assets shall include all Claims existing against the Rhodes Entities that are not expressly released under the Plan.
P. Preservation or Causes of Action: In accordance with section 1123(b) of the
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Bankruptcy Code, except as otherwise provided in the Plan, the Reorganized Debtors and the Litigation Trust shall retain and may enforce all righis to commence and pursue, as appropriate, any and all Causes of Action, whcther arising before or after the Petition Date, including any actions specifically enumerated on Exhibit L to the Disclosure Statement, and the Reorganized Debtors' rights to commence, prosecute, or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date. The Reorganized Debtors and the Litigation Trust, as applicable, may pursue such Causes of Action, as
appropriate, in accordance with the best interests of the Reorganized Debtors and the
15
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Litigation Trust, as applicablc. No Entity may rely on the absence uf a specifc reference
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in the Plan or the Disclosure Statement to any Cause of Action against them as any indication that the Debtors, Reorganized Debtors or the Litigation Trust, as applicable, wil not pursue any and all available Causes of Action against them. The Reorganized
" 7-~ " 00 " '" N " "

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18
19
Debtors and the Litigation Trust, as applicable, expressly reserve all rights to prosecute any and all Causes of Action against any Entity, except as otherwise
expressly provided in the Plan. Unless any Causes of Action against an Entity are
20
21
22
23
expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or a Bankruptcy Court order, the Reorganized Debtors and the Litigation Trust, as applicable, expressly reserve all Causes of Action for later adjudication and, therefore, no preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel Uudicial, equitable or otherwise), or laches, $hall apply to such Causes
of Action upon, after, or as a consequence of Confirmation or the occurrence of the
Eflective Date.
24 25
26
27 28
The Reorganized Debtors and the Litigation Trust, as applicable, reserve and shall retain the foregoing Causes of Action notwithstanding the rejection or repudiation of any executory contract or unexpired lease during the Chapter i i Cases or pursuant to the Plan. In accordance with section I I 23(b)(3) of the Bankruptcy Code, any Causes of Action that a Debtor may hold against any Entity shall vest in the Reorganized Debtors and the Litigation
Trust, as the case may be, on the Effective Date. The applicable Reorganized Debtor and
the Litigation Trust, as applicable, through its authorized agents or representatives, shall rclain and may exclusively enforce any and all such Causes of Action belonging to it. The
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Reorganized Debtors and the Litigation Trust, as applicable. shall have the exclusive right, authority, and discretion to determine and to initiate, tile, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such Causes of Action and to decline to do any of the foregoing without the consent or approval of any third party or
further notice to or action, order, or approval of ihe Bankruptcy Court. Neither the
Litigation Trust nor the Reorganized Debtors shall commence any litigation against the Rhodes Entities until the Bankruptcy Court rules on the allowance or the Rhodes Entities
Chiims set forth in Proofs of Claim, included in the Debtors' Schedules or otherwise set
4
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6 7
8
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9
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forth in the Mediation Term Sheet. To the extent any statute of limitations to pursue any claims belonging to the Debtors against the Rhodes Entities would lapse from the execution date of the Mediation Term Sheet through the Bankruptcy Court's resolution of the allowance of the Rhodes Entities Claims, the Rhodes Entities shall be deemed to have consented to an extension of the applicable statute of limitations until sixty days following the Bankruptcy Court's ruling on the allowance of the Rhodes Entities Claims. The Litigation Trust shall have no liability to any entity for any Claims or Causes of Action it detennines not to pursue.
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Q. HOA Board Seats: The Rhodes Entities shall ensure that designees identified by the Reorganized Debtors shall replace the Rhodes Entities on any HOA boards that in any way are related to the Debtors, Reorganized Debtors or their businesses and Declarant rights or
the like shall be transferred to the Reorganized Debtors or their designee(s).
~.
R. Licensing: The Rhodes Entities shall take commercially reasonable steps and/or
enter into any agreements or simi lar documentation reasonably necessary to ensure the
Reorganized Debtors' continued use of all of the Debtors' applicable professional
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licenses at no cost to the Rhodes Entities for a period of up to twelve months following the Effective
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Date. To the extent, Sagebrush Enterprises, Inc. shall have rescinded by September 25, 2009 its revocation of its indemnity of the Nevada contractors' license held by Rhodes Design & Development Corporation and such rescission did not negatively affect the
general contractor's license held by Rhodes Design & Development Corporation, Sagebrush
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shall be entitled to file an Administrative Claim on behalf of any and all claims asserted
against Sagebrush as a result of
..
20
21
22
23
24
25
Sagebrush being the indemnitor that arose from and after the effectiveness of Sagebrush's recission of its indemnity through the Effective Date, provided that the allowance of such Administrative Claim shall be subject to resolution by the Bankruptcy Court and/or such other eourt(s) of competent jurisdiction. The Reorganized Debtors shall indemnify Sagebrush for any and all claims asserted against Sagebrush as a result of Sagebrush being the indemnitor that arise from and after the Effective Date. Professional licenses include, but arc not limited to the Nevada State Contractor's Board license, and any other general business or similar licenses in any county, state, municipality or other jurisdiction in which thc Reorganized Debtors conduct business or own assets as of
the Effectivc Date. The Rhodes Entities shall use commercially reasonable efforts to
maintain third party agreements with their real estate brokers and sales agents.
S. Transfer of Rhodes Ranch Golf Course: On the Effective Date, the applicable
26 27
28
Rhodes Entities shalltransrer their equity interesls in the entity that owns the Rhodes Ranch Golf Course to the Reorganized Debtors (together with any equipment, golf carts, contracts or other assets determined by the First Lien Steering Committee to be necessary for the
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operation of the Rhodes Ranch Golf Course) pursuant to the terms of a stock transfer agreement in form and substance acceptable to the First Lien Steering Committee and
2 3
Rhodes, subject to any oiilslamling third party debt on the Rhodes Ranch Golf
Course. The
slock transfer agreement shall contain representations by the Rhodes Entities that the entity
that owns the Rhodes Ranch Golf Course does not have any liabilities other than ordinary
4
5
course liabilities related to the Rhodes Ranch Golf Course and indemnification provisions in favor or the Reorganized Debtors by the Rhodes Entities for any non-ordinary course liabilities. In addition, prior to the deadline for filing objections to the Disclosure Statement,
6 7
8
E E
the Rhodes Entities shall provide the First Lien Steering Committee with a list of all
liabilities of the entity that owns the Rhodes Ranch Golf Course, a lien analysis and copies of all contracts related to the Rhodes Ranch Golf Course and to which the entity that owns which must be acceptable to the First Lien the Rhodes Ranch GolfCoursc is a party, each of
9
10
Steering Committee. Pursuant to the stock and asset transfer agreement governing the transfer of the equity in the entity that owns the Rhodes Ranch Golf Course to the
Reorganized Debtors, the entity that owns the Rhodes Ranch Golf Course post-Effective
post~Effective Date by such entity under any contract related to the operation of
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Date shall agree to indemnify James Rhodes for any ordinary course liability first incurred the Rhodes Ranch Golf Course for which James Rhodes has provided a personal guaranty.
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The existing $5.9 millon third part debt outstanding on the Rhodes Ranch Golf Course shall be refinanced on or before thc Effective Date, for a period of no less than twelve (12) months from the Effective Date, on terms and conditions acceptable to Rhodes and the First Lien Steering Committee. The parties wil work together in good faith to
refinance the existing third part debt. Upon obtaining a final commitment for refinancing
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for the Rhodes Ranch Golf Course. the First Lien Steering Committee wil disclose such terms in a tiing with the Bankruptcy Court. The $2.4 millon loan by James Rhodes to the entity that owns the Rhodes Ranch Golf Course wil be contributed by James Rhodes to the entity that owns the Rhodes Ranch Golf Course and he will indemnify the Debtors, the Reorganized Debtors, Newco and the entity that owns the Rhodes Ranch Golf Course from any liability arising from the contribution of such loan.
19
.,
20
21
22
23
24
25
The Reorganized Debtors shall pay the reasonable costs and expenses associated with the refinancing; provided, that the terms of such refinancing are acceptable to the First Lien Steering Committee. The First Lien Steering Committee acknowledges that the loan documentation may provide that, upon the transfer of the Rhodes Ranch Golf Course to the Reorganized Debtors on the Effective Date, additional collateral from the Reorganized Debtors may be required. The Rhodes Entities shall transfer to the Reorganized Debtors on the Effective Debt any contracts related to the operation of and revenue generated by any cell towers located on the property of the Rhodes Ranch Golf Course. Any funds received
after July 31,2009 from the Las Vegas Valley Water District or other similar entity as an incentive for converting the golf course from a green course to a desert course shall be used
26 27
28
for operating expenses associated with the Rhodes Ranch Golf Course, with any excess to become property of the Reorganized Debtors on the Effective Date.
Rhodes and/or his designee shall have the absolute right to repurchase ihe Rhodes Ranch Golf Course from the Reorganized Debtors at eight (8) years from the Effective Date
for $5.9 milion in cash. The Reorganized Debtors may require Rhodes to purchase the
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3
4
5
Course any time between four (4) and eight (8) years from the Effective Date for $5.9 million in cash provided that the Reorganized Debtors shall provide Rhodes with at least one year advance notice of its intent to sell the Rhodes Ranch Golf Course back to Rhodes. Such transfer shall occur on tfie applicable anniversary dale of the Effective Date. For ihe avoidance of doubt, if the Reorganized Debtors put ihe Rhodes Ranch Golf Course to Rhodes in accordance with the terms hereof and Rhodes fails to comply with his
Rhodes Ranch Golf
obligation to purchase the Rhodes Ranch Golf Curse, Rhodes shall be deemed to have
forfeited his option to purchase the Rhodes Ranch Golf
Course.
6 7
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9
10
On the Effective Date, Rhodes's obligations to comply with the repurchase shall be secured by either (i) $500,000 in cash in an escrow account or (ii) property worth at least $2 millon (the "Golf Course Security Propert"), with the value of such property to be agreed to by Rhodes and the First Lien Steering Committee or otherwise valued by an independent third party appraisal firm acceptable to both Rhodes and the First Lien Steering Committee
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(except Cushman Wakefield). In the event that Rhodes does not meet the repurchase
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request, provided that the Rhodes Ranch Golf Course is in the standard condition (defined below), then the Reorganized Debtors shall be entiiled to liquidated damages in the fonn of Course Security Properly). security pledged (Le., the $500,000 or the Golf
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So long as Rhodes has not defaulted on his obligation to repurchase the Rhodes Ranch Golf Course, Rhodes shall have the absolute and sole discretion to replace the Golf Course Security Property with $500,000 in cash on 30 day~ written notice to the Reorganized Debtors. Upon deposit of the $500,000 in cash, the Golf Course Security
Property shall be released to Rhodes or his designee. Notwithstanding anything (0 the contrary contained herein, if the Rhodes Ranch Golf Course is not maintained with
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substantially the same performance and rating criteria at the time of the repurchase request as verified by an independent third party rating agency as it was on the Effective Date 17 ("Standard Condition"), James Rhodes can (i) require the Reorganized Debtors to cure any conditions to return the Rhodes Ranch Golf Course to its Standard Condition (provided, that IS the cost of such cure docs not exceed $500,000), or (ii) choose not to purchase the Rhodes 19 Ranch Golf Course. Upon either the repurchase of the Rhodes Ranch Golf Course or the written decision to not repurchase the Rhodes Ranch Golf Course (in accordance with the 20 preceding sentence), the Golf Course Security Property or the $500,000 Cash (if not applied to the repurchase of the Rhodes Ranch Golf Course) shall be returned to Rhodes within 30 21 days.
16
22 23
On the Effective Date, the Reorganized Debtors shall record a memorandum of

agreement against the Rhodes Ranch Golf
Course to evidence the above.
24
25 26 27 28
T. Cash Payment: The Rhodes Entities shall make a cash payment to the Reorganized Debtors of $3.5 milion in Cash on the Effective Date. The $3.5 milion cash payment shall
be used to fund distributions under the Plan and provide working capital to the extent of any excess.
U. Transfer of Arizona Assets: On the Effective Date, pursuant to a stock and asset
transfer agreement, a draft or which is attached to the Disclosure Statement as Exhibit M, the Debtors shall transfer Pravada and the other Arizona Assets set forth on Attachment D to
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the Mediation Tenn Sheet, plus the Golden Valley Ranch lradename to the Rhodes Entities
2
3
free and clear of all liens, claims and encumbrances pursuant to section 363(1) of the
Bankruptcy Code; provided, that the non-First Lien Lender/Second Lien Lender liens do not
exceed $60,000; provided, further, that such assets shall not include assets owned by Pinnacle Grading located in Arizona and related contracts associated with the assets. All
4
5
Claims asserted against the Arizona Assets shall he deemed asserted against the
Estates and shall be classifed in accordance with Arlicle ILL hereof for distribution
purposes. The Arizona Assets shall he transferred through the Rhodes Entities' acquisition
6
7 8
E E
Rhodes Arizona Properties LLC and Elkhorn Investments, Inc., in each case, as reorganized, and certain assets of Rhodes Homes Arizona LLC. Any non-real property assets or assets not listed on Attachment D to the Mediation Term Sheet that are titled in Rhodes Arizona Properties LLC or Elkhorn Investments, Inc. shall be transferred to Newco pursuant to the stock and asset transfer agreement. To the extent any real property assets
of the stock of
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located in Arizona are titled in any Debtor other than Rhodes Arizona Properties LLC, Elkhorn Investments, Inc. or Rhodes Homes Arizona, such real property assets shall be io transferred to the Rhodes Entities pursuant to the stock and asset transfer agreement. All
9
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intercompany claims assertable by Rhodes Arizona Properties LLC or Elkhorn Investments, Inc. against any other Debtor shall be deemed cancelled.
The Debtors shall provide James Rhodes notice of any proposed sale of
the Pinnacle
13
assets, and James Rhodes shall be granted a right to bid on the sale of
such assets within 10
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14
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days of such notice. The Rhodes Entities shall permit storage of Pinnacle Grading equipment at current locations at no cost to the Reorganized Debtors for a period through six months following the Effective Date.
All executory contrac.ts and unexpired leases assocated solely with Arizona shall be assumed and assigned to the Rhodes Entities (or their designee), at no cost to the Debtors or
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the Reorganized Debtors and all cure costs associated therewith shall be borne by the
Rhodes Entities.
thirty (30) days following: () the Reorganized Debtors' homebuilding assets and inventory (regardless of when such assets and inventory were acquired), or (ii) bulk sale of the remaining inventory of the Reorganized Debtors, the Reorganized Debtors shall transfer to James Rhodes (or his designee) the trademarks and tradenames set forth on Attachment E to the Mediation Tenn Sheet.
v. Trademarks and Trad\; Names: Within the earlier of the buildout of upon completion of all of
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W. Self Insured Retention Obliuations: The Reorganized Debtors shall indemnify

subcontractors that are obligated under any of the Reorganized Dehtors' existing insurance policies for any post-Effective Date self insured retention obligations paid and/or to be paid by such subcontractors pursuant to such existing insurance policies.
24
25
X. Bond Replacement or Indemnification: Those performance bonds guaranteed by the Rhodes Entities in favor of the Debtors shall be replaced on a renewal date by new 27 performance bonds. In the alternative, subject to the Rhodes Entities being reasonably satisfied with the creditworthiness of the Reorganized Debtors, which shall be satisfied
26
28
solely as or the Effective Date by the Court lnding that the Plan is feasible, the existing
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performance bonds guaranteed by the Rhodes Entities and such guarantees shall remain in
2
3
place. The applicable Rhodes Entity's agreement to remain a guarantor under the existing performance bonds as such performance bonds may be renewed shall be at no cost to the Rhodes Entities (including, but not limited to, the payment of bond premiums). In the event
the Reorganized Debtors fail to perform their obligations underlying such renewed
performance bonds after the EITective Date, the Reorganized Debtors will indemnify the Rhodes Entities under such outstanding performance bonds for damages incurred by the 5 Rhodes Entilies on account of their guarantee of such performance bonds solely as a result 6 of the Reorganized Debtors' failure to perform such obligations subsequent to the Effective
Date. The Reorganized Debtors shall use commercially reasonable efforts to replace all
7
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outstanding perronnance bonds backstopped by Rhodes Entities within 30 months of the Effective Date. The Bankruptcy Court shall retain jurisdiction to resolve any disputes
arising out of
this paragraph.
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Contingent Bond Indemnity Claims wil be released in the ordinary course of business as
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time passes or as work on the underlying project is completed. To the extent hat a Contingent Bond Indemnity Claim becomes an Allowed or estimated Claim, such
Contingent Bond Indemnity Claim shall be treated as a General Unsecurcd Claim.
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Y. Stanlev Engineering Litigation In the event the Stanley Engineering Litigation is

resolved either by judgment or settlement in a manner favorable to the Reorganized Debtors
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and such resolution does not providc for Cash consideration to be received by the
Reorganized Debtors and Seeond Lien Lenders, the Reorganized Debtors and the Second
Lien Agent, assuming the Class of Second Lien Lender Secured Claims votes in favor of
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Plan, shall engage in good faith negotiations to ensure that the Second Lien Lenders receive consideration equivalent to 50% of the net value of such resolution and to determine the timing of payment of any such consideration_ In the cvent the Reorganized Debtors and the Second Lien Agent are unable to agree on the amount or form of siich consideration, the
parties wil submit thc mattcr to binding arbitration with the costs thereof
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to be split evenly
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Lien Agent to be reimbursed from the consideration to be distributed to the Second Lien Lenders on account of the Stanley Engineering Litigation).
ARTICLE Y. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
A. ASSuffDiion and Reiection of Executory Contracts and Unexpired Leases: Except
20
21
22
23 as otherwise provided in the Plan, the Debtors' executory contracts or unexpired leases not assumed or rejected pursuant to a Bankruptcy Court order prior to the Effective Date shall 24 be deemed rejected pursuant to sections 365 and 1123 of the Bankruptcy Code, except for those executory contracts or unexpired leases: (1) listed on the schedule of "Assumed 25 Exccutory Contracts and Unexpired Leases" attached to the Disclosure Statement as Exhibit
26 27 28
N; (2) that are Intercompany Contracts, in which case such Intercompany Contracts are
deemed automatically assumed by the applicable Debtor as of the Effective Date, unless
such Intercompany Contract previously was rejected by the Debtors pursuant to a
Bankruptcy Court order, is the subject of a motion to reject pending on the Effective Date;
(3) that are the subject of a motion to assume or reject pending on the Effective Date (in
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2
3
which case such assumption or rejection and the effective date thereof shall remain subject to a Bankruptcy Court order); (4) that arc subject to a motion to reject with a requested
effective date of rejection after the Effective Date; or (5) that are otherwise expressly
4
5
the Conlirmaiion Order shall constitute a Bankruptcy Court order approving the assumptions or rejections of such executory contracts the or unexpired leases as set forth in the Plan, all pursuant to sections 365(a) and 1123 of
assumed or rejected pursuant to the Plan. Entry of
Bankruptcy Code. Unless otherwise indicated, all assumptions or rejections of such

executory contracts and unexpired leases in the Plan are effective as of the Effective Date.
Each such executory contract and unexpired lease assumed pursuant to thc Plan or by
6 7 8
E
Bankruptcy Court order but not assigned to a third party prior to the Effective Date shall
revesl in and be fully enforceable by the applicable contracting Reorganized Debtor in
accordance with its terms, except as such terms may have been modified by such order.
Notwithstanding anything to the contrary in the Plan, the Plan Proponent and the
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the schedules of executory contracts or unexpired leases identified in Exhibit N to the io Disclosure Statement at any time through and including fifleen days after the Effective Date.
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Reorganized Debtors, as applicable, reserve the right to alter, amend, modify, or supplement
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All executory contracts and unexpired leases associated solely with the Arizona Assets shall be assumed and assigned to the Rhodes Entities (or their designee) to the extent set forth on the schedule of Assumed Executory Contracts and Unexpired Leases attached to the Disclosure Statement as Exhibit N, at no cost to the Debtors or the Reorganized Debtors and all Cure costs associated with such scheduled Arizona contracts or leases shall be borne by
the Rhodes Entities.
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. Cure of Defaults for Assumed Executorv Contracts and Unexpired Leases: With
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the Debtors' executory contracts or unexpired leases listed on the schedule of "Assumed Executory Contracts and Unexpired Leases," the Plan Proponent shall have
respect to each of
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designated a proposed Cure, and the assumption of such executory contract or unexpired
17
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lease may be conditioned upon the disposition of all issues with respect to Cure. Any
provisions or terms of the Debtors' executory contracts or unexpired leases to be assumed pursuant to the Plan that are, or may be, alleged to be in default, shall be satisfied solely by Cure, or by an agreed-upon waiver of Cure. Except with respect to executory contracts and unexpired leases in which the Plan Proponent or the Debtors, with the consent of the First Lien Steering Committee, and thc applicable countcrparties have stipulated in writing to payment of Cure, all requests for payment of Cure that differ from the amounts proposed by the Debtors must be Filed with the Court on or before the CUre Bar Date. Any request for payment of Cure that is not timely Filed shall be disallowed automatically and forever barred from assertion and shall not be enforceable against any Reorganized Debtor, without the need for any objection by the Reorganized Debtors or further notice to or action, order, the Bankruptcy Court, and any Claim for Cure shall be deemed fully satisfied, or approval of the amounts listed on the proposed released, and discharged upon payment by the Debtors of Cure schedule, notwithstanding anything included in the Schedules or in any Proof of Claim to the contrary; provided, however, that nothing shall prevent the Reorganized Debtors from paying any Cure despite the failure of the relevant counterparty to File such request for payment of siich Cure. The Reorganized Debtors also may settle any Cure without further
notice to or action, order, or approval oftbe Bankruptcy Court.
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22
23
24
25
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27
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If the Debtors or Reorganized Debtors, as applicable, or first Lien Steering

2
3
Committee object to any Cure or any other matter related to assumption, the Bankruptcy
Court shall dctcnninc the Allowed amount of
such Cure and any related issues. fthere is a dispute regarding such Cure, the ability of the Reorganized Debtors or any assignee to provide "adequaie assurance of future pcrfonnance" within the meaning of section 365 of
the Bankruptcy Code, or any other matter pertaining to assumption, then Cure shall occur as soon as reasonably practicable after entry of a Final Order resolving such dispute, approving such assumption (and, if applicable, assignment), or as may be agreed upon by the Debtors with the consent of the First Lien Steering Committee, or the Reorganized Debtors and the counterparty to the executory contract or unexpired lease. Any counterparty to an executory contract and unexpired lease that fails to object timely to the proposed assumption of any executory contract or unexpired lease wil be deemed to have consented to such assumption.
4
5
6 7
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The Debtors, with the consent of the First Lien Steering Commiuee, or the Reorganized Debtors, as applicable, reserve the right either to reject or nullify the assumption of any
executory contract or unexpired lease no later than thirty days after a Final Order
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to assume such executory contract or unexpired Icasc.
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Assumption of any executory contract or unexpired lease pursuant to the Plan or otherwise shall result in the full release and satisfaction of any Claims or defaults, whether monetary or nonmonetary, including defaults of provisions restricting the change in conlrol or ownership interest composition or other hankruptcy.related defaults, arising under any assumed executory contract or unexpired lease at any time prior to the effective date of assumption. Any Proofs of Claim Filed with respect to an executory contract or unexpired
notice to or aciion, order, or approval of
lease that has been assumed shall be deemed disallowed and expunged, without further the Bankruptcy Court.
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AI1 Cure costs associated with Executory Contracts related to the Arizona Assets
shall be borne by the Rhodes Entities_
C. Preexisting Obliiiations to the Debtors Under Executory Contracts and Unexpired
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Leases: Rejection or repudiation of any executory contract or unexpired lease pursuant to

the Plan or otherwise shall not constitute a termination of pre~existing obligations owed to
20
21
22 23
the Debtors under such contracts or leases. In particular, notwithstanding any nonbankruptcy law to the contrary, the Reorganized Debtors expressly reserve and do not waive any right to receive, or any continuing obligation of a counterparty to provide,
insurance coverage, utilitiy services, warranties, indemnity, guarantee of workmanship, or
continued maintenance obligations on goods or services previously purchased by the
24
25
contracting Debtors or Reorganized Debtors, as applicable, from counterparties to rejected or repudiated executory contracts. The Reorganized Debtors expressly reserve and do not waive the right to receive coverage under any p3st insurance policy to extent that coverage
has not expired under the terms of the insurance policy, regardless of whether such
26 27 28
insurance policy is listed as an assumed contract. Similarly, the Reorganized Debtors expressly reserve and do not waive the right to receive services under any contract with a utility provider, regardless of whether such agreement with a utility provider is listed as an assumed contract.
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D. Claims Based on Rejection or Repudiation of Executory Contracts and Unexpired
2
3 4
5
Leases: Unless otherwise provided by a Bankruptcy Court order, any Proofs of Claim
asserting Claims arising from the rejection or repudiation of the Debtors' executory
contracts and unexpired leases pursuant to the Plan or otherwise must be Filed with the Claims and Solicitation Agent no later than the Rejection Damages Claim Deadline. Any
Proofs of Claim arising from the rejection or repudiation or the Debtors' executory contracts or unexpired leases ihat are not timely Filed by the Rejection Damages Claim Deadline shall
be disallowed automatically, forever barred from assertion, and shall not be enforceable
6 7 8
E E
against any Reorganized Debtor without the need for any objection by the Reorgani7.ed
Debtors or further notice to or action, order, or approval of the Bankruptcy Court, and any Claim arising out of the rejection or repudiation of the executory contract or unexpired lease shall be deemed fully satisfied, released, and discharged, notwithstanding anything in the
Schedules or a Proof of Claim to the contrary. All Allowed Claims arising from the
9
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rejection or repudiation of the Debtors' executory contracts and unexpired leases shall be classified as General Unsecured Claims.
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E. Intercompany Contracts, Contracts, and Leases Entered Into After the Petition Date: Intercompany Contracts, contracts, and leases entered into after the Petition Date by any Debtor, and any executory contracts and unexpired leases assumed by any Debtor, may be
pcrfonned by the applicable Reorganized Debtor in the ordinary course of
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F. Home Sales: All pending home sale contracts shall be assumed by the applicable
Reorganized Debtor.
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G. Warrnties: All eligible prepetition home sale contracts with one-year warranty
obligations shall be performed in the ordinary course of business of the Reorganized
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Debtors. Upon the Effective Date, any remaining warranty obligations that are to be
assumed by the Reorganized Debtors, which shall only be assumed with the consent of the First Lien Steering Committee, shall be transferred to the Reorganized Debtors. Warranty
obligations that are not expressly assumed shall be rejected and treated as General
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Unsecured Claims.
H. Modification of Executory Contracts and Unexpired Leases Containing Equity
20
21
Ownership Restrictions: All executory contracts and unexpired leases to be assumed, or

conditionally assumed, under the Plan pursuant to sections 365 and 1123 of
the Bankruptcy
22 23
Code shall be deemed so assumed, or so conditionally assumed, without giving effect to any provisions contained in such executory contracts or unexpired leases restricting the change
in control or ownership interest composition of any or all of the Debtors, and upon the Effective Dale (i) any such restrictions shall be deemed of no further force and effect and
(2) any breaches that may arise thereunder as a result of Confirmation or Consummation
24
25
shall be deemed waived by the applicable non-Debtor counterparty.

1. Modifications, Amendments. Supplements, Restatements, or Other Agreements:
26 27
28
Unless otherwise provided in the Plan, each executory contract or unexpired lease that is assumed shall include all modifications, amendments, supplements, restatements, or other agreements that in any manner affect such executory contract or unexpired lease, and all executory contracts and unexpired leases related thereto, if any, including all casements, licenses, permits, rights, privileges, immunities, options, rights of firsl refusal, and any other
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interests, unless any of the foregoing agreements has been previously rejected or repudiated
2
3
or is rejected or repudiated lindeI' the Plan.
Modifications, amendments, supplements, and restatements 10 prepetition executory

contracts and unexpired leases that have been executed by the Debtors during the Chapter 1 i
4
5
Cases shall not be deemed to alter the prepciition nature of the executory contract or
unexpired lease, or the validity, priority, or amount of any Claims that may arise in
connection therewith.
J. Reservation of Rights: Neither the exclusion nor inclusion of any contract or lease
6
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on Exhibit N to the Disclosure Statement, nor anything contained in the Plan, shall
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constitute an admission hy the Debtors or the First Lien Steering Committee that any such contract or lease is in fact an executory contract or unexpired lease or that any Reorganized Debtor has any liability thereunder. If there is a dispute regarding whether a contract or lease is or was executory or unexpired at the time of assumption or rejection, the Debtors, with the consent of the First Lien Steering Committee, or Reorganized Debtors shall have thirty days following entry of a Final Order resolving such dispute to alter their treatment of such contract or lease.
K. Nonoccurrence of Effective Date: In the event that the Effective Date does not
occur, the Bankruptcy Court shall retain jurisdiction with respect to any consensual request
to extend the deadline for assuming or rejecting unexpired leases pursuant to section
36S(d)(4) of
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ARTICLE VI.
PROCEDURES FOR RESOI. VING DISPUTED CI.AIMS
16 17 18
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A. Allowance of Claims: After the Effective Date, each Reorganized Debtor shall
have and retain any and all rights and defenses such Debtor had with respect to any Claim immediately prior to the Effective Date, including the Causes of Action referenced in Article
IV.
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B. Claims Administration Responsibilities: Except as otherwise specifically provided

in the Plan, after the Effective Date, the Reorganized Debtors shall have the sole authority:
(1) to File, withdraw, or litigate to judgment, objections to Claims; (2) to settle or

compromise any Disputed Claim without any furter notice to or action, order, or approval by the Bankruptcy Court; and (3) to administer and adjust the Claims Register to reflect any such settlements or compromises without any further notice to or action, order, or approval
by the Bankruptcy Court.
22
23
24
25
26 27
28
C. Estimation of Claims: Before or after the Effective Date, the First Lien Steering Committee or the Reorganized Debtors, as applicable, may (but are not required to) at any time request that the Bankruptcy Court estimate any Disputed Claim that is contingent or the Bankruptcy Code for any reason, regardless of unliquidated pursuant to section S02(c) of whether any party previously has objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court shall retain jurisdiction to estimate any such Claim. including during the litigation of any objection to any Claim or
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2
3
4
5
during the appeal relating to such objection. Notwithstanding any provision otherwise in the Plan, a Claim that has been expunged from the Claims Register, buiihat either is subject to appeal or has not been the subject of a Final Order, shall be deemed to be estimated at zero dollars, unless otherwise ordered by the Bankruptcy Court. In the event that the Bankruptcy Court estimates any contingent or unliquidated Claim, that estimated amount shall constitute a maximum limitation on such Claim for all purposes under the Plan (including for purposes of distributions), and the relevant Reorganized Debtor may elect to pursue any supplemental proceedings to object to any ultimate distribution on such Claim. Notwithstanding section
S02G) of the Bankruptcy Code, in no event shall any Holder of a Claim that has been
6 7
S
estimated pursuant to section 502(c) oftbe Bankruptcy Code or otherwise be entilled to seek reconsiderotion of such estimation unless such Holder has Filed a motion requesting the right to seek such reconsideration on or before twenty days after the date on which such Claim is estimated.
D. Adjustment to Claims Without Objection: Any Claim that has been paid or
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satisfied, or any Claim ihat has been amended or superseded, may be adjusted or expunged on the Claims Registcr by the Reorganized Debtors without a Claims objection having to be
Filed and without any further notice to or action, order, or approval of
Beginning all the end of the first full calendar quarter that is at least ninety days after the Effective Date, the Reorganized Debtors shall publish and File evcry calendar quarter a list of all Claims that have been paid, satisfied, amended, or superseded during such prior
calendar quarter.
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E. Time to File Obiections to Claims: Any objections to Claims shall be Filed on or before ihe later of (I) the applicable Claims Objection Deadline and (2) such date as may be fixed by the Bankrptcy Court, after notice and a hearing, whether fixed before or afier the date that is one year after the Effective Date. Notwithstanding the foregoing, the First Lien Steering Committee, any First Lien Lender and/or the Reorganized Debtors shall have until sixty days following the Effective Date to object to the Proof.., of Claim fied by the Rhodes Entities in the Debtors' chapter I i cases (provided, that, such objections shall not seek to subordinate the Rhodes Entities Claims, if Allowed).
F. Disallowance of Claims: Except as set forth herein, any Claims held by an Entity
..
20
21
from which property is recoverable under section 542, 543, 550, or 553 of the Bankruptcy
Code or that is a transferee of a transfer avoidable under section 522(f), 522(h), 544, 545,
22
23 24 25
547, 548, 549, or 724(a) of the Bankruptcy Code, shall be deemed disallowed pursuant to section 502(d) of the Bankruptcy Code, and Holders of such Claims may not receive any distributions on account of such Claims until such iime as sueh Causes of Action against that Entity have been settled or a Bankruptcy Court order with respect thereto has been entered and all sums due, if any, to the Debtors by that Entity have been turned over or paid to the Reorganized Debtors or the Litigation Trust, as applicable.
26
27
EXCEPT AS OTHERWISE AGREED, ANY AND ALL PROOFS OF CLAIM FILED AFTER THE BAR DATE SHALL BE DEEMED DISALLOWED AND EXPUNGED AS OF THE EFFECTIYE DATE WITHOUT ANY FURTHER NOTICE TO OR ACTION,
ORDER, OR APPROVAL OF THE BANKRUPTCY COURT, AND HOLDERS OF SUCH
28
CLAIMS MAY NOT RECE1VE ANY DISTRIBUTIONS ON ACCOUNT OF SUCH
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2
3
CLAIMS, UNLESS ON OR BEFORE THE CONFIRMATION HEARING SUCH LATE CLAIM HAS BEEN DEEMED TIMELY FILED BY A BANKRUPTCY COURT ORDER.
4
5
G. Offer of Judement: The Reorganized Debtors shall be authorized to serve upon a Holder of a Claim an offer to allow judgment to be laken on account of such Claim, and, pursuant to Bankruptcy Rules 7068 and 90 i 4, Federal Rule or Civil Procedure 68 shall apply to such offer of judgment. To the extent the Holder of a Claim must pay the costs
incurred by the Reorganized Debtors after the making of such offer, the Reorganized
6
7
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Debtors shall be entitled to setoff such amounts againsilhe amount of any distribution to be
paid to such Holder without any further notice to or action, order, or approval of the
Bankruptcy Court.
H. Amendments to Claims: On or after the Effective Date, except as expressly

authorized in the Plan, a Claim may not be Filed or amended without the prior authorization of the Bankruptcy Court or the Reorganized Debtors, and any such new or amended Claim Filed shall be deemed disallowed in full and expunged without any further action.
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A. Total Enterprise Value for Purposes of
ARTICLE VII.
PROVISIONS GOVERNING DISTRIBUTIONS
Distributions Under the Plan: Distributions
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orNewco Equity Interests to Holders of Allowed First Lien Lender Secured Claims shall be based upon, among other things, the Newco Total Enterprise Value of $99.6 milion. For
purposes of distribution, the Newco Equity Interests shall be deemed to have the value
assigned to them based upon, among other things, the Newco Total Enterprise Value,
regnrdless of
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the date of distribution.
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B. Distributions on Account of Claims Allowed as of the Effective Date: Except as
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otherwise provided in the Plan, a Final Order, or as agreed to by the First Lien Steering IS Committee, initial distributions under the Plan on account of Claims Allowed on or before
the Effective Date shall be made on the Distribution Date; provided. however, that (I) Allowed Administrative Claims with respect to liabilties incurred by the Debtors in the ordinary course of business during the Chapter 11 Cases or assumed by the Debtors prior to
the Effective Date shall be paid or perfonned in the ordinary course of business in
19
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accordance with the terms und conditions of any controlling agreements, course of dealing,
22
23 24
course of business, or industry practice and (2) Allowed Priority Tax Claims, unless
otherwise agreed, shall be paid in full in Cash on the Distribution Date or over a five-year period as provided in section i i 29(a)(9)(C) of the Bankrptcy Code with annual interest
provided by applicable non-bankruptcy law.
C. Distributions on Account of
Claims Allowed After the Effective Date:
25
26 27 28
L Payments and Distributions on Disputed Claims: Except as otherwise

provided in the Plan, a Final Order, or as agreed to by the First Lien Steering Committee
prior to the Effective Date or the Reorganized Debtors after the Effective Date, distributions under the Plan on account of Disputed Claims that become Allowed after the Effective Date shall be made on the Periodic Distribution Date that is at least thirty days afier the Disputed
41
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2
3 4
5
Claim becomes an Allowed Claim; provided. however. that (a) Disputed Administrative Claims with respect to liabilities incurred by the Debtors in the ordinary course of business during the Chapter i i Cases or assumed by the Debtors on or before the Effective Date that
become Allowed after the Effective Date shall be paid or performed in the ordinary course
of business in accordance with the terms and conditions of any controllng agreements,
course of dealing, course of business, or industry practice and (b) Disputed Priority Tax
6 7
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Claims that become Allowed Priority Tax Claims after the Effective Date, unless otherwise agreed, shall be paid in full in Cash on the Periodic Distribution Date that is at least thirt days aftcr the Disputed Claim becomes an AlIowcd Claim or over a five-year period as provided in section i 129(a)(9)(C) oCthe Bankruptcy Code with annual interest provided by
applicable non-bankruptcy law.
2. Special Rules for Distributions to Holders of Disputed Claims:
9 10
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Notwithstanding any provision otherwise in the Plan and except as otherwise agreed by the relevant parties: (a) no partial payments and no partial distributions shall be made with respect to a Disputed Claim until all such disputes in connection with such Disputed Claim
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have been resolved by scttlement or Final Order and (b) any Entity that holds both an
not receive any distribution on the Allowed Claim unless and until all objections to the Disputed Claim havc been resolved by settlement or Final Order and the Claim has been Allowed. In the event that there are Disputed Claims requiring adjudication and resolution, the Reorganized Debtors shall establish appropriate reserves for potential payment of such Claims or Interests pursuant to Article VII.C.3.
Allowed Claim and a Disputed Claim shall
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Subject to Article IX.A.S, all distributions made pursuant tu the Plan un account of an
Allowed Claim shall be made together with any dividends, payments, or other distributions made on account of, as well as any obligations arising from, the distributed property as if such Allowed Claim had been an Allowed Claim on the dates distributions were previously made to Holers of Allowed Claims included in the applicable Class.
3. Reserve of Litigation Trust Interests: On the Effective Date, the Reorganized Debtors shall maintain in reserve Litigation Trust Interests for distribution to Holders of Disputed Claims that become Allowed after the Effective Date. As Disputed Claims are Allowed, the Distribution Agent shall distribute, in accordance with the terms of the Plan, Litigation Trust Interests to Holders of Allowed Claims, and the Disputed Claims Reserve shall be adjusted. The Distribution Agent shall withhold in the Disputed Claims Reserve
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any payments or other distributions made on account of, as well as any obligations arising
22 23 24 25 26
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from, the Litigation Trust Interests initially withheld in the Disputed Claims Reserve, to the
extent that such Litigation Trust Interests continue to be withheld in the Disputed Claims Reserve at the time such distributions are made or such obligations arise, and such payments
or other distributions shall be held for the benefit of Holders of Disputed Claims whose Claims, if Allowed, are entitled to distributions under the Plan. The Reorganized Debtors
may (but are not required to) request estimation for any Disputed Claim that is contingent or unliquidated.
28
Notwithstanding anything in the applicable Holder's Proof of Claim or otherwise to the contrary, the Holder of a Claim shall not be entitled to receive or recover a distribution under the Plan on account of a Claim in excess of thc lesser of the amount: (a) stated in the Holder's Proof of Claim, if any, as of the Distribution Record Date, plus interest thereon to
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the extent provided for by the Plan; (b) if the Claim is denominated as contingent or
2
3
4
5
unliquidated as of the Distribution Record Date, the amount thaI the Reorganized Debtors elect to withhold on account of such Claim in the Disputed Claims Reserve, or such other amount as may be estimated by the Bankruptcy Court prior to the Confirmation Hearing; or (c) if a Claim has been estimated, the amount deposited in the Disputed Claim Reserve to satisfy such Claim after such estimation.
D. Delivery of Distributions
6
.L Record Date for Distributions: On the Distribution Record Date, the Claims
7
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Register shall be closed and any party responsible for making distributions shall be authorized and entitled to recognize only those record Holders listed on the Claims Register as of the close of business on the Distribution Record Date. Notwithstanding the foregoing,
9
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if a Claim is transferred twenty or fewer days before the Distribution Record Date, the
Distribution Agent shall make distributions to the transferee onl)' to the extent practical and
in any event only if the relevant transfer form contains an unconditional and explicit
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certifcation and waiver of any objection to the transfer by the transferor.

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2. Distribution Agent: The Distribution Agent shall make all distributions
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required under the Plan, except that distributions (0 Holders of Allowed Claims governed by a separate agreement and administered by a Servicer shall be deposited with the appropriate Servicer, at which time such distributions shull be deemed complete, and the Servicer shall deliver such distributions in accordance with the Plan and the terms of the governing agreement
3. Delivery of Distributions in General; Except as otherwise provided in the
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Plan, and notwithstanding any authority to the contrary, distributions to Holders of Allowed Claims shall be made to Holders of record as of the Distribution Record Date by the
Distribution Agent or a Servicer, as appropriate: (a) in accordance with Fedenil Rule of
18
19
Civil Procedure 4, as modified and made applicable by Bankruptcy Rule 7004; (b) to the signatory
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set forth on any of the Proofs of Claim Filed by such Holder or other representative
identified therein (or at the last known addresses of such Holder if no Proof Claim is Filed of or if the Debtors have been notified in writing of a change of address); (c) at the addresses set forth in any written notices of address changes delivered to the Distribution Agent after the date of any related Proof of Claim; (d) at the addresses reflected in the Schedules if no Proof of Claim has been Filed and the Distribution Agent has not received a written notice of a change of address; or (e) on any counsel that has appeared in the Chapter 11 Cases on the Holder's behalf. Except as otherwise provided in the Plan, distributions under the Plan on account of Allowed Claims shall not be subject to levy, garnishment, attachment, or like legal process, so that each Holder of an Allowed Claim shall have and receive the benefit of
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20
21
22 23
24
25
the distributions in the manner set forth in the Plan. The Debtors, the First Lien Steering
26 27 28
Committee, the Reorganized Debtors, and the Distribution Agent, as applicable, shall not incur any liability whatsoever on account of any distributions under the Plan.
4. Accrual of Distributions and Other Rights: For purposes of determining the
accrual of distributions or other rights after the Effective Date, the Newco Equity Interests
and the Litigation Trust Interests, as applicable, shall be deemed distributed as of the
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2
3
Effective Dale regardless of the date on which they are actually issued, dated, authenticated, or distributed even though the Reorganized Debtors shall not make any such distributions or
distribute such other rights until distributions of the Newco Equity Interests and the
Litigation Trust Interests, as applicable, actually take place.
-s Allocation Between Principal and Accrued Interest Except as otherwise
4
5
provided in the Plan, distributions on account of Allowed Claims shall be treated as

allocated first to principal and thereafter to any interest.
6 7
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6. Compliance Matters: In connection with the Plan, to the extent applicable, the Reorganized Debtors and the Distribution Agent shall comply with all tax withholding
and reporting requirements imposed on them by any Governmental Unit, and all
distributions pursuant to the Plan shall be subject to such withholding and reporting requirements. Notwithstanding any provision in the Plan to the contrary, the Reorganized
9
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Debtors and the Distribution Agent shaH be authorized to take all actions necessary or approprate to comply with such withholding and reporting requirements, including liquidating a portion of the distribution to be made under the Plan to generate suffcient
funds to pay applicable withholding taxes, withholding distributions pending receipt of information necessary to facilitate such distributions, or establishing any other mechanisms
they believe are reasonable and appropriate. The Reorganized Debtors reserve the right to
II
12 13
14
allocate all distributions made under the Plan in compliance with all applicable wage
garnishments, alimony, child support, and other spousal awards, liens, and encumbrances.
7. Fractional. De Minimis, Undeliverable, and Unclaimed Distributions:
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a. Fractional Distributions: Notwithstanding any other provision of the
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Plan to the contrary, payments of fractions of shares of Newco Equity Interests or

fractions or Litigation Trust Interests shall not be made. The Distribution Agent
shall not be required to make distrbutions or payments of fractions of New
co Equity
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Interests, Litigation Trust (nterests or dollars. Whenever any payment of Cash of a fraction of a dollar or payment of a fraction of New co Equity Interests or fraction of Litigation Trust Interests pursuant to the Plan would otherwise be required, the actual payment shall reflect a rounding of such fraction to the nearest whole dollar (up or down), with half dollars, half Newco Equity Interests or half Litigation Trust
Interests or less being rounded down.
b. Undeliverable Distributions: If any distribution to a Holder of an
22
23
Allowed Claim is returned to a Distribution Agent as undeliverable, no further

distributions shall be made to such Holder unless and until such Distribution Agent is notified in writing of such Holder's then-current address, at which time all currently due missed distributions shall be madc to such Holder on the next Periodic Distribution Date. Undeliverable distributions shall remain in the possession of the Reorganized Debtors until such time as a distribution becomes deliverable, or such
24 25 26
27
distribution reverts to the Reorganized Debtors pursuant to Article VII.D.7.c, and shall not be supplemented with any interesl, dividends, or other accruals of any kind.
28
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c. Reversion: Any distribution under the Plan that is an Unclaimed

2 3
Distribution for a period of six months after distribution shall be deemed unclaimed property under section 347(b) of the Bankruptcy Code and such Unclaimed
Distribution shall revest in the Reorganized Debtors and, to the extent such
Unclaimed Distribution is a distribution or Ncwco Equity Interests, such Newco Equity Interests shall be deemed cancelled. Upon such revesting, the Claim of any Holder or its successors with respect to such propert shall be cancelled, discharged,
4
5 6
and forever barred notwithstanding any applicable federal or state escheat,

abandoned, or unclaimed property laws to the contrary. The provisions of the Plan regarding undeliverable distributions and Unclaimed Distributions shall apply with equal force to distributions that are issued by the Debtors, made pursuant to any
7
8
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indenture or Certificate (but only with respect 10 the initial distribution by the
Servicer to Holders that are entitled to be recognized under the relevant indenture or
9
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Certificate and not with respect to Entities to whom those recognized Holders
distribute), notwithstanding any provision in such indenture or Certificate to the
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contrary and notwithstanding any otherwise applicable federal or state escheat,

abandoned, or unclaimed property law.
8. Manner of Payment Pursuant to the Plan: Any payment in Cash to be made
pursuant to the Plan shall be made at the election of
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the Reorganized Debtors by check or by
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wire transfer. Checks issued by the Distribution Agent or applicable Scrvicer on account of Allowed Claiins shall be null and void if not presented within 120 days after issuance, but may be requested to be reissued until the distribution revesls in the Reorganized Debtors pursuant to Article ViLD.7.c.
9. Surrender or Cancelled Instruments or Securities: On the Effective Date or
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as soon as reasonably practicable thereafter, each Holder of a Certificate shall surrender 17 such Certificate to the Distribution Agent or a Servicer (to the extent the relevant Claim or Interest is governed by an agreement and administered by a Servicer). Such Certificate shall 18 be cancelled solely with respect to the Debtors, and such cancellation shall not alter the 19 obligations or right') of any non-Debtor third parties vis--vis one anoihcr with respect to such Ccrtificatc. No distribution of propert pursuant to the Plan shall be made to or on 20 behalf of any such Holder that is a Holder of a Claim unless and until such Certificate is received by the Distribution Agent or the Scrvicer or the unavailability of such Certificate is 21 reasonably established to the satisfaction of the Distribution Agent or the Servicer. Any 22 Holder or a Claim who fails to surrender or cause to be surrendered such Certificate or fails
to execute and deliver an affdavit of loss and indemnity acceptable to the Distribution
23 24
25
Agent or ihe Servicer prior to the lIrst anniversary of
the Effective Date, shall have its Claim discharged with no further action, be forever barred from asserting any such Claim against the relevant Reorganized Debtor or its property, be deemed to have forfeited all rights and Claims with respect to such Certificate, and not participate in any distribution under the Plan; furthermore, all property with respect 10 such forfeited distributions, including any
dividends or interest attributable thereto, shall revert to the Reorganized Debtors,
26
27
28
notwithstanding :my federal or state escheat, abandoned, or unclaimed property law to the contrary.
E. Claims Paid or Pavable bv Third Parties.
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L Claims Paid by Third Parties: The Claims and Solicitation Agent shall
reduce in full a Claim, and such Claim shall be disallowed without a Claims objection
2
3
having to be Filed and without any further notice to or action, order, or approval of he Bankruptcy Court, to the extent (hat the Holder of such Claim receives payment in full on account of such Claim from a party that is not a Debtor or Reorganized Debtor. Further, to
the extent a Holder of a Claim receives a distribution on account of such Claim and receives
payment from a party that is not a Debtor or a Reorganized Debtor on account of such
4
5
Claim, such Holder shall, within two weeks of receipt thereof, repay or return the
distribution to the applicable Reorganized Debtor, to the extent the Holder's total recovery on account or such Claim from the third party and under the Plan exceeds the amount of such Claim as of the date of any such distribution under the Plan. The failure of such Holder to timely repay or return such distribution shall result in the Holder owing the applicable Reorganized Debtor annualized interest at the Federal Judgment Rate on such amount owed for each Business Day after the two-week grace period specified above until the amount is
repaid.
2. Claims Payable by Insurance: Holders of Insured Claims that are covered by
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the Debtors' insurance policies shall seck payment or such Claims from applicable insurance policies, provided that the Reorganized Debtors shall have no obligation to pay any amounts in respect of pre-petition deductibles or self insured retention amounts. Allowed Insured
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Claim amounts in excess of available insurance shall be treated as General Unsecured

Claims. No distributions under the Plan shall be made on account of an Allowed Claim that
is payable pursuant to one of the Debtors' insurance policies until the Holder of such
14
15 16
Allowed Claim has exhausted all remedies with respect to such insurance policy. To the
extenl that one or more of the Debtors' insurers agrees to satisfy in full a Claim (if and to the extent adjudicated by a court of competent jurisdiction), then immediately upon such
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insurers' agreement, such Claim may be expunged to the extent of any agreed upon
17
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3. Applicability of Insurance Policies: Distributions to Holders of Allowed
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satisfaction on the Claims Register by the Claims and Solicitation Agent without a Claims objection having to be Filed and without any further notice to or action, order, or approval of
7. ;
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Claims shall be in accordance with the provisions of any applicable insurance policy. Except for Claims and Causes of Action released under the Plan to the Released Parties and Exculpated Parties, nothing contained in the Plan shall constitute or be deemed a waiver of
22 23
any Cause of Action that the Debtors or any Entity may hold against any other Entity,
including insurers under any policies of insurance, nor shall anything contained herein
constitute or be deemed a waiver by such insurers of any defenses, including coverage
24
25
defenses, held by such insurers.
F. Payment of $1.5 Millon 10 Fi,,1 Lien Lenders: The $1,500,000 in Cash payable to the Holders of First Lien Lender Secured Claims from the proceeds of their Collateral 26 pursuant to Article 1I.B.1. shall be paid as follows: (i) $400,000 on the Effective Date and
27 28
(ii) the remaining up to $1,100,000 in five quarterly installments of
$220,000 beginning on
the first day of the fourth month following the Effective Date; provided, that the
Reorganized Debtors shall have the right to defer up to two quarterly payments, with such deferred amount(s) to be paid on th~ next quarterly payment date (and the amount scheduled
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10 be paid on such quarterly payment dale deferred for another quarter; provided that the full
2
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$1.5 million payment shall be made to the Holders or First Lien Lender Secured Claims within eighteen months of the Effective Dale). Notwithstanding the foregoing, in the event that, as of the Effective Date, the third party debt on the Rhodes Ranch Golf Course has been refinanced on terms and conditions accepHlble to ihe First Lien Steering Committee and the Reorganized Debtors have unrestricted cash oral least $3.5 milion (after taking into account any amounts required to be paid to reduce the amount or third party debt on the Rhodes Ranch Golf Coun;e below $5.9 millon and without taking into consideration amounts that may have becn borrowed under any exit facility unless such amounts were used to pay-down debt on the Rhodes Ranch Golf Course, in which case any amounts used to pay-down debt on the Rhodes Ranch Golf Course will be deemed to reduce unrestricted cash on a dollar for dollar basis), then the initial $400,000 payment to the First Lien Lenders wil bc increased as follows: (i) if unrestricted cash (as calculated above) is equal to or greater than $3.5 milion but less than $4.5 millon, the $400,000 payment shall be increased to $700,000; (ii) if unrestricted cash (as calculated above) is equal to or greater than $4.5 million but less than $5.5 milion, the $400,000 payment shall be increased to $1,000,000;
and (iii) if
II
12
13
unrestricted cash (as calculated above) is equal to or greater than $5.5 million, the
$400,000 paymcnt shall be increased to $1.5 milion, in each case with the subsequent quarterly installments reduced by a corresponding amount to provide ror equal payments
over the payout periods discussed above. Tn no event shall the aggregate Cash payments to the First Lien Lenders exceed $1.5 milion.
G. General Unsecured Claims Purchase: The First Lien Lenders have agreed to use the
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aggregate $1.5 milion Cash payment provided to them under the Plan to acquire those
General Unsecured Claims of
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the Creditors listed on the sehedule attached to the Disclosure Statement as Exhibit H (the "Claim Purchase Schedule") to the extent such Claims remain outstanding as of the Effective Date; provided that (i) each Holder of a Claim so listed is the original Holder or such Claim and (ii) such Claim(s) is ultimately Allowed.
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The Claim Purchase Schedule shall delineate whether such Claims are Allowed or Disputed and Claims may be purchased only to the extent ultimately Allowed. Claims 19 included on the Claim Purchase Schedule shall bc purchased (subjeet to the conditions 20 contained in Article VII.G of the Piau) for the amounts listed for such Claims under
21
18
the heading "Allowed Amount (Claim Purchase Amount)" on the Claim Purchase
Schedule. Payments on account or the purchased Allowed Claims listed on the Claim
22
23
Purchase Schedule shall be made on the same time frame as the First Lien Lenders receive their allocable Cash payments under Article VlI.F of the Plan, with the First
Lien Steering Committee determining the order in whch Claims arc purchased
24 25 26 27 28
(which, in the first instance, sliall be the order in which they are listed on the Claim
Purchase Schedule). For the avoidance or doubt, any claim listed on the Claim Purchase
Schedule that is disputed, wil not be purchased until allowed and only to the extent the aggregate purchase price for all claims purchased inclusive of such newly allowed claims are equal to or less than $1.5 million. Claims subsequently allowed wil be purchased in the order in whieh they are allowed. The First Lien Leners reserve the right to modify the Claim Purchase Schedule prior to or subsequent to the EfTeelve Date without further Court order; provided, that a Creditor may be removed from the Claim Purchase Schedule only to the extent that (i) its Claims are not ultimately Allowed, (ii) its Claims arc subject to setoff
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a party other than the First Lien Lenders pursuant to Article VILG of
(other than under section 547 of the Bankruptcy Code); (iii) such Creditor sells its Claim 10 the Plan or (iv) the full
2
3
$1.5 million has been used to purchase other Allowed Claims on the Claim Purchase
Schedule before such Creditor's Claim is Allowed.
4
5
The First Lien Lenders shall be subrogated to the righls of Creditors whose Claims are purchased hereunder and any distributions olhCf\vise allocable to the Holders of Claims purchased by the First Lien Lenders shan be distributed pro rata to the Holders of First Lien
6 7
8
E E
Lender Secured Claims. The Reorganized Debtors shall be authorized 10 make the
foregoing payments to the Creditors on the Claim Purchase Schedule on behalf of the First Lien Lenders with a corresponding reduction in the $1.5 millon payable to the First Lien
Lenders. Under no circumstances shall the First Lien Lenders (either directly or through the
Reorganized Debtors) pay in excess of $1.5 million in the aggregate for the Claims on the
Claim Purchase Schedule. The First Lien Steering Committee may, in its sole discretion
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(but after consultation with the Debtors and the Creditors' Committee), add Claims to the Claim Purchase Schedule at any time; provided that the amount to be paid for all such Claims listed on the Claim Purchase Schedule docs not exceed $1.5 millon in the aggregate regardless of the t01al amount of Allowed Claims reflected on the Claim Purchase Schedule. In the event that Allowed Claims in excess of $1.5 millon arc listed on the Claim Purchase Schedule, Holders of Claims (isted on the Claim Purchase Schedule shall have the right to accept or decline payment of less than 100 cents on account of their Claims from the First Lien Lenders. No Creditor listed on the Claim Purchase Schedule shall receive in excess of
100 cents on the dollar for its Claim, and the Reorganized Debtors shall
not pursue Claims
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under Bankruptcy Code section 547 against any Creditor whose Claim is purchased in accordance with this Article VII.G. The pi~in shall serve as the notice of transfer of Claim required under Bankruptcy Rule 3001(e). If no objections are received by the Voting Deadline, the First Lien Lenders shall be authorized upon the Effective Date to effectuate
the foregoing Claim purchase transactions.
ARTICLE VII. EFFECT OF CONFIRMA nON OF TilE PLAN
A. Discharge of Claims and Termination of Interests: Pursuant to section 114J(d)of the Bankruptcy Code, and except as otherwise specilically provided in the Plan, the
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distributions, rights, and treatment that are provided in the Plan shall be in complete
satisfaction, discharge, and rclease, effective as of the Effective Date, of Claims, lnterests, and Causes of Action of any nature whatsoever, including any interest accrued on Claims or Interests from and after the Petition Date, whether known or unknown, against, liabilities of, their assets or Liens on, obligations of, rights against, and Interests in, the Debtors or any of
22
23 24
25
properties, regardless of whether any property shall have been distributed or retained
pursuant to the Plan on account of
such Claims and Interests, including demands, liabilities,
26
27
28
and Causes of Action that arose before the Effective Date, any liability (including withdrawal liability) to the extent such Claims or Interests relate to services performed by the Debtors prior to the Effective Date and that arise from a termination of any employees of
employee, regardless of whether such termination occurred prior to or after the EfTcetive
Date, any contingent or non-contingent liability on account of representations or warranties

issued on or before the EfTcctivc Date, and all debts oftbe kind specfied in sections 502(g),
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502(h), or S02(i) of the Bankruptcy Code, in each case wheiher or not: (1) a Proof or Claim
2
3
or Interest based upon such debt, right, or Interest is Filed or deemed Filed pursuant to
section 50 I of the Bankruptcy Code; (2) a Claim or Interest based upon such debt, right, or Interest is Allowed pursuant to section 502 of the Bankruptcy Code; or (3) the Holder of such a Claim or Interest has accepted the Pl:m. Any default by the Debtors with respect to any Claim or Interest that existed immediately prior to or on account of the filing of the Chapter 11 Cases shall be deemed Cured on the Effective Dale. The Confirmation Order shall be a judicial determination of the discharge of all Claims and Interests subject to the Effective Date occurring.
4
5
6 7 8
B. Subordinated Claims: The allowance, classification, and treatment of all Allowed

Claims and Interests and the respective distributions and treatments under the Plan take into account and conform to the relative priority and rights of the Claims and Interests in each Class in connection with any contractual, legal, and equitable subordination rights relating
thereto, whether arising under general principles of equitable subordination,
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section 51 O(b) of the Bankruptcy Code, or otherwise. Pursuant to section 510 of the
Bankruptcy Code, the Plan Proponent or Reorganized Debtors, as applicable, reserve the
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of
right to re~c1assify any Allowed Claim or Interest in accordance with any contractual, legal,
or equitable subordination relating thereto.
C. Compromise and Settlement of Claims and Controversies: Pursuant to section 363

the Bankruptcy Code and Bankruptcy Rule 9019 and in consideration for
the distributions
14
15
and other benefits provided pursuant to the Plan, the provisions of the Plan shall constitute a good faith compromise of all Claims, Interests, and controversies relating to the contractual,
16 17
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legal, and subordination rights that a Holder of a Claim may have with respect to any Allowed Claim or Interest, or any distribution to be made on account of such an Allowed
Claim or Interest. The entry of the Confirmation Order shall constitute the Bankruptcy
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Court's approval of the compromise or settlement of all such Claims, Interests, and
controversies, as well as a finding by the Bankruptcy Court that such compromise or settlement is in the best interests of the Debtors, their Estates, and Holders of Claims and
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Interests and is fair, equitable, and reasonable. In accordance with the provisions of the
Plan, pursuant to section 363 of
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the Bankruptcy Code and Bankruptcy Rule 9019(a), without
20
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any further notice to or action, order, or approval of the Bankruptcy Court, after the
Effective Date, the Reorganized Debtors may compromise and settle Claims against them and Causes of Action against other Entities.
22
23
D. n.cleases bv the Debtors of the Released Parties:

Pursuant to section 1123(b) of the Bankruptcy Code and except as otherwise
specifcally provided in the Plan, for good and valuable consideration, including the
24
25
service or the Released Parties to faciltate the expeditious reorganization of the
Debtors and the implementation of the restructuring contemplated by the Plan, and as
part of the global settement described in Article L.B. of the Disclosure Statement, on
26
and after the Effective Date, the Released Parties are deemed released by the Debtors, 27 the Reorganized Debtors, and the Estates from any and all Claims, obligations, rights, suits, damages, Causes or Action, remedies, and liabilities whatsoever, including any
28
derivative Claims asserted on behalf of the Debtors, laking place on or before the
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Effective Date, whether known or unknown, foreseen or unforeseen, existing or hcrcimiftcr arising, in law, equity, or o1henvisc, that the Debtors, the Reorganized 2 Debtors or the Estates would have been legally entitled to assert in their own right
3
4
5
(whether individually 01' collectively) or on behalf of the Holder of any Claim or Interest or other Entity, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Chapter i i Cases, the purchase, sale, or rescission or
the purchase or sale of any Security of the Debtors, the subject matter of, or the
transactions or events giving rise to, any Claim or Interest that is treated in the Plan, 6 the business or contractual arrangements between any Debtor and any of the Released
Parties, the restructuring of Claims and Interests prior to or in the Chapter 1 i Cases,
7 8
the negotiation, formulation, or preparation of the Plan and Disclosure Statement, or

related agreements, instruments, or other documents, upon any other act or omission,

Effective Date.
E. Releases bv the Debtors of the Rhodes Entities: The Rhodes Entities shall be
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deemed released from any and all Claims, obligations, rights, suits, damages, Causes of
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Action, remedies, and liabilities whatsoever arising under chapter 5 of the Bankruptcy
Code with respect to transfers made by the Debtors to the Rhodes Entities during the 2 years prior to the Petition Date; provided, however, that such release shall only apply to transfers expressly set forth in the Schedules as Filed with the Bankruptcy Court as of August 1,2009 or as disclosed n Attachment B to the Mediation Term Sheet.
F. Releases bv First Lien Lenders of First Lien Lenders: Pursuant to Bankruptcy
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Rule 90J9, and except as otherwise specifcally provided in the Plan, to the extent a First Lien Lender elects on its Ballot to release the First Lien Lenders in accordance
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Effective Date, each of the First Lien Lenders electing to grant this release, shall be deemed to release each of the other First Lien Lenders that has elected to grant this 18 release and each of their affiiate... from any and all Claims, obligations, rights, suits, damages, Causes of Action, remedies, and liabilties whatsoever, whether known or 19 unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity, or 20 othenvise, that such First Lien Lender would have been legally entitled to assert against any other First Lien Lender that elected to grant this release, based on or 21 relating to, or in any manner arising from, in whole or in part, the First Lien Credit
22
23
Agreement, ihe First Lien Lender Claims, any other claims arising under or related to
the First Lien Credit Agreement, the Debtors, the Chapter i 1 Cases, the subject matter
of, or ihe transactions or events giving rise to any First Lien Lender Claim, the
restructuring of the First Lien Lender Claims prior to or during the Chapter 11 Cases, the negotiation, formulation, or preparation of the Plan and Disclosure Statement, or related agreements, instruments, or other documents, upon any other act or omission,
24
25

Effective Date; with sueh releases constituting an express waiver and relinquishment by each First Lien Lender electing to grant this release of any claims, whether known
26 27 28
or unknown tbat such First Lien Lender may have under Section 1542 of the
California Civil code or other analogous state or federal law related to the matters
being released; provided, however, that Claims or liabilities arising out of or relating to
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any act or omission or auy First Lien Lender 01" any or its affiiates (hat constitutes
2
3
~ross negligence or wilful misconduct shall not be released.
G. Exculpation: Except as othenvise specifcally provided in the 1)lao, no
Exculpated Party shall have or incur, and each Exculpated Party is hereby released 4 and exculpated from any Claim, obligation, Cause of Action, or liability to one another or to any Exculpating Party for any Exculpated Claim, except for gross negligence,
5
6 7
wilful misconduct or fraud, but in all respects such Entities shall be entitled to reasonably rely upon the advice or counsel with respect to their duties and
responsibilHies pursuant to the Plan. The Debtors, the First Lien Steering Committee
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and the Reorgani7..d Debtors (and each of tlieir respective agents, members, directors, offcers, employees, advisors, and attorneys) have, and upon Confirmation or the Plan 8 shall he deemed to have, participatcd in good faith and in compliance with the applicable provisions of the Bankruptcy Code with regard to the distributions of the 9 Securities pursuant to the rlan. and therefore arc not, and on account of such 10 distributions shall not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or II such distributions made pursuant to the Plan.
12
H. Iniunction Except as otherwise expre..~sly provided in the Plan or for

obligations issued pursuant to the Plan, all Entiies who have held, hold, or may hold
Claims against the Debtors, and all Entites holding Interests, are permanently
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enjoined, from and after the Effective Date, from: (1) commencing or continuing in any
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manner any action or other proceeding of any kind against the Debtors or Reorganized
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Debtors on account of or in connection with or with respect to any such Claims or Interests; (2) enforcing, attaching, collecting, or recovering by any manner or means
any judgment, award, decree or order against the Debtors or Reorganized Debtors on
account of or in connection witb or with respect to any such Claims or Interests;

(3) creating, perfecting, or enforcing any encumbrance of any kind against the Debtors
or Reorganized Debtors or the property or estates of the Debtors or Reorganized
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Debtors on account of or in connection with or with respect to any such Claims or Interests; (4) asserting any right of setoff, subrogation, Or recoupment of any kind 20 against any obligation due from the Debtors or Reorganized Debtors or against the
19
21
property or Estates of the Debtors or Reorganized Debtors on account of or in
connection with or with respect to any such Claims or Interests unless such Holder has
22 23
Filed a motion requesting the right to perform such i;etoff on or before the
Confirmation Date, and notwithstanding an indication in a l'roof of Claim or Interest or otherwise that such Holder asserts, has, or intends to preserve any right of setoff
pursuant to section 553 of the Bankruptcy Code or otherwise (provided, that, to the
24
extent the Rhodes Entities Claims are Allowed, the Rhodes Entities, without the need 25 to fie any such motion, shall retain the right to assert a setoff against any Claims or Causes of Action that the Reorganized Debtors or Litigation Trust may assert against 26 the Rhodes Entities, with the Reorganized Debtors and Litigation Trust, as apiilicable,
27 28
rescnring the right to challenge the propriety of any siich attempted setoff, with any such challenge to be resolved by the Bankruptcy Court); and (5) commencing or continuing in any manner noy action or other proceeding of any kind on account of or
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in connection with or with respect to llny such Claims or Jntere...ts released or settled
2
3
pursuant to the Plan.

1. Protection Against Discriminatory Treatment: Consistent with section 525 of the
Bankruptcy Code and the Supremacy Clause of the U.S. Constitution, all Entities, including
Governmental Units, shall not discriminate against the Reorganized Debtors or deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar 5 grant to, condition such a grant to, discriminate with respect to such a grant against, the Reorganized Debtors, or another Entity with whom such Reorganized Debtors have been 6
7
8
associated, solely because one of the Debtors has been a debtor under chapter 11, has been insolvent before the commencement of the Chapter I i Cases (or during the Chapter I i Cases but before the Debtor is gmnted or denied a discharge) or has not paid a debt that is dischargeable in the Chapter i I Cases.
J. Setoffs: Except as otherwise expressly provided for in the Plan, each
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Reorganized Debtor, pursuant to the Bankruptcy Code (including section 553 of the Bankruptcy Code), applicable non-bankruptcy law, or as may be agreed to by the Holder or a Claim, may setoff against any Allowed Claim and the distributions to be made pursuant to the Plan on account of such Allowed Claim (before any distribution
is made on account of such Allowed Claim), any Claims, rights, and Causes of Action of any nature that such Debtor, Reorganized Debtor or the Litigation Trust, as 3pplicable, may hold against the Holder of such Allowed Claim, to the extent such
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Claims, rights, or Causes of Action against such Holder have not been otherwise
compromised or setted on or prior to the Effective Date (whether pursuant to the Plan or otherwise); provided. however. that neither the failure to effect such a setoff nor the allowance of any Claim pursuant to the Plan shall constitute a waiver or release by
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such Reorganized Debtor or the Litigation Trust of any such Claims, rights, and
Causes of Action that such Reorganized Debtoi' or the Litigation Trust may possess
against such Holder. In no event shall any Holder of Claims be entitled to setoff any
Claim against any Claim, right, or Cause of Action of the nebtor or Reorganized
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Debtor, as applicable, unless siich Holder has Filed a motion witlt the Bankruptcy
Court requesting the authority to perform such setoff on or before the Confirmation
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Date, and notwithstanding any indication in any Proof of Claim or othenvise that such Holder asserts, has, or intends to preserve any right of setoff pursuant to section 553 or othenvise; provided, however, that, to the extent the Rhodes Entities Claims arc
Allowed, the Rhodes Entities, without the need to fie any such motion, shall retain the
22 23
right to assert a setoff against any Claims or Causes of Action that the Reorganized
24
25
Debtors or Litigation Trust may assert against the Rhodes Entities, with the Reorganized Debtors and Litigation Trust, as applicable, reserving the right to
challenge the propriety of any such attempted setoff, with any such challenge to be resolved by the Bankruptcy Court.
K. Recoupment: In no event shall any Holder of Claims or Interests be entitled to recoup any Claim or Interest against any Chiim, right, or Calise of Action of the 27 Debtors or the Reorganized Debtors, as applicable, unless such Holder actually has
26 28
performed such recoupment and provided notice thereof iii writing to the Debtors and
the First Lien Steering Committee on 01" before the Confirmation Date,
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notwithstanding an)' indication n any Proof or Claim or Interest or othenvise that slIch Holder asserts, has, 01" intends to preserve any right of recoupment.
2 3
L. Release of Liens: Except as otherwise provided in the Plan or in any contract,
4
5
instrument, release, or other agreement or document created pursuant to the Plan, on the Effective Date and concurrently with the applicable distributions made pursuant to the Plan, all mortgages, deeds of trust, Liens, pledges, or other security interests against any property orthe Estates shall be fully released, and discharged, and all ofihe right, tiile, and interest of
any Holder of such mortgages, deeds of
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revert to the Reorganized Debtors and their successors and assigns. Upon the Effective 7 Date, the Conlirmation Order shall be binding upon and govern the acts of all entities, including, without limitation, all filing agents, filing offcers, title agents, title companies, 8 recorders of mortgages, recorders of dccds, rcgistrars of deeds, administrative agencies, governmental departments, secretaries of state, federal and local offcials, and all other 9 persons and entities who may be required by operation of law, the duties of their offce, or trust, Liens, pledges or other security interests io contract, to release any mortgages, deeds of
against any property of the Estates; and cach of
trst, Licns, pledges, or other security interests shall
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directed to accept for filing the Confirmation Order any and all of the documents and
instruments necessary and appropriate to effectuate the discharge.
12
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M. Document Retention: On and after the Effective Date, the Reorganized Debtors
may maintain documents in accordance with their current document retention policy, as may be altered, amended, modified, or supplemented by the Reorganized Debtors in the ordinary coursc of business. Copies of all Debtors' books and records shall be delivered to the Rhodes Entities at no cost to the Rhodes Entities on or prior to the Effective Date.
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N. Rcimburscmcnt or Contribution: If the Bankruptcy Court disallows a Claim for

reimhursement or contribution of an Entity pursuant to section 502(c)( 1 )(B) of the Bankruptcy Code, then to the extent that such Claim is contingent as of the time of
allowance or disallowance, such Claim shall be forever disallowed notwithstanding section
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the Bankruptcy Code, unless prior to the Effective Date: (1) such Claim has been adjudcated as noncontingent or (2) the relevant Holdcr of a Claim has Filed a noncontingent Proof of Claim on account of such Claim and a Final Order has been entered detennining
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such Claim as no longer contingent.
22
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ARTICLE IX.
ALLOWANCE AND I'A YMENT OF CERTAIN ADMINISTRATIVE CLAIMS
A. Professional Claims:
24
25
1: Final Fee Applications: All final requests for payment of Claims of a
26 27 28
Professional shall be Filed no later than rorty~five days after the Effective Date. After notice and a hearing in accordance with the procedurcs established by the Bankruptcy Code and prior Bankruptcy Court orders, the Allowed amounts of such Professional Claims shall be
dctennined by the Bankruptcy Court.
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2. Payment of Interim Amounts: Except as otherwise provided II the Plan,
2
3
Professionals shall be paid pursuant to the Interim Compensation Order.
L. Reimbursable Expenses: The reasonable fees and expenses incurred by (i)

the First Lien Agent, including its professionals, to the extent provided by ihe First Lien Credit Agreement, (ii) the Second Lien Agent, including its professionals, to the extent
provided by the Second Lien Credit Agreement (only to the extent the Class or
4
5
Second Lien
Lender Secured Claims votes in favor of the Plan), and (iii) the First Lien Steering
Committee, including its professionals, in connection with the Chapler i 1 Cases shall be paid by the Debtors or Reorganized Debtors, as applicable, within 15 days or receipt of an invoice from such panics or their advisors.
4. Post-Effective Date Fees and Expenses: Except as otherwise specifically
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provided in the Plan, from and after the Effective Date, the Reorganized Debtors shall, in the ordinary course of business and without any further notice to or action, order, or approval of
the Bankruptcy Court, pay in Cash the reasonable legal, professional, or other fees and
expenses related to implementation and Consummation incurred by the Reorganized
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Debtors and First Lien Steering Commiltee. Upon the Effective Date, any requirement that
Professionals comply with sections 327 through 331 and 1103 of
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seeking retention or compensation for services rendered after such date shall terminate, and the Reorganized Debtors may employ and pay any Professional in the ordinary course of
business without any furiher notice to or action, order, or approval of
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~ Substantial Contribution Compensation and Expenses: Except as otherwise
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specifically provided in the Plan, any Entity who requests compensation or expense
reimbursement for miiking a substantial contribution in the Chapter i i Cases pursuant to sections 503(b)(3), (4), and (5) of the Bankruptcy Code must File an application and serve such application on counsel for the Debtors or Reorganized Debtors, as applicable, and the First Lien Steering Committee and the Creditors' Committee, and as otherwise required by
the Bankruptcy Couit and the Bankruptcy Code on or before the Administrative Claim Bar
16 17 18 19
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B. Other Administrative Claims: All requests for payment of an Administrative Claim
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must be Filed with the Claims and Solicitation Agent and served upon counsel to the
Debtors or Reorganized Debtors, as applicable, and the First Lien Steering Committee on or before the Administrative Claim Bar Date. Any request for payment of an Administrative Claim that is not timely Filed and served shall be disallowed automatically without the need
for any objection by the Debtors, Reorganized Debtors, or the First Lien Steering
ordinary course of business without any further notice to or action, order, or approval of
22
23
24 25 26 27 28
Committee. The Reorganized Debtors may settle and pay any Administrative Claim in the the Bankruptcy Court. In the event that any party with standing objects to an Administrative
Claim, the Bankruptcy Court shall determine the Allowed amount of such Administrative
Claim. Notwithstanding the foregoing, no request for payment of an Administrative Claim need be Filed with respect to an Administrative Claim previously Allowed by Final Order.
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2
3
ARTICLE X. CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN
A. Conditions to Confirmation: The following are conditions precedent to

Confirmation that must be satisfied or waived in accordance with Article X.C:
1. The Bankruptcy Court shall have approved the Disclosure Statement, in a
4
5
6
7
manner acceptable to the Plan Proponent, as containing adequate information with respect to the Bankruptcy Code. the rlan within the meaning of section i 125 of
2.
The Confirmation Order shall be in form and substance acceptable to the Plan
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3. The terms and conditions of employment or retention of any Persons
proposed to serve as offcers or directors of Newco, including, without limitation, as to compensation, shall be acceptable to the Plan Proponent and shall be disclosed at or prior to the Confirmation Hearing.
4. Any disclosures made pursuant to 11 lJ.S.c. 1
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129(a)(5) shall be acceptable
to the Plan Proponent.

.i All of the schedules, documents, and exhibils ancillary to the Plan and
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Disclosure Statement including, but not limited to, (i) the Claim Purchase Schedule, (ii) the Litigation Trust Agreement, (iii) the Newco LLC Operating Agreement, (iv) the New First Lien Notes credit agreement, (v) the Schedulc of Causes of Action, (vi) the Asset and Stock Transfer Agreement, and (vii) the Schedule of Assumed Executory Contracts and Unexpired Leases shall be in form and substancc acceptable to the Plan Proponent.
B. Conditions Precedent to the Effective Date: The following are conditions precedent
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to Consummation that must be satisfied or waived in accordance with Article X.C:

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.L The Bankruptcy Court shall have authorized the assumption and rejection of
executory contracts and unexpired leases by the Debtors as contemplated by Article V_
2. The Confinnation Order shall have become a Final Ordcr in form and
22
23

.l All of the schedules, documents, and exhibits ancillary to the Plan and
24 25
26
27 28
Disclosure Statement including, but not limited to, (i) thc Claim Purchase Schedule, (ii) the Litigation Trust Agreement, (iii) the Newco LLC Operating Agreement, (iv) the New First Lien Notes credit agreement, (v) the Schedule of Causes of Action, (vi) the Asset and Stock Transfer Agreement, and (vii) the Schedule of Assumed Executory Contracts and Unexpired Leases shall be in form and substance acceptable to the Plan Proponent.
4. The documents governing the New First Lien Notes and the Newco LLC
Operating Agreement shall be in form and substance acceptable to the Plan Proponent.
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l: The Confrmation Date 5hal i have occurred.
2
3
6. The First Lien Steering Committee shall have designated and replaced each
existing Qualified Employee of the Debtors with a new Qualified Employee for the
Reorganized Debtors.
L. The third party debt outstanding on the Rhodes Ranch Golf Course shall be
4
5
refinanced on terms and conditions acceptable to Rhodes and the First Lien Steering
Committee and the personal loan of James Rhodes to the entity that owns ihe Rhodes Ranch Golf Course shall have been contributed as equity without any new equity being issued to James Rhodes and James Rhodes shall have provided the Debtors, the Reorganized Debtors, Newco and the entity ihat owns the Rhodes Ranch Goff Course an indemnity for any liability arising from the contribution of such loan.
8. Copies of all Debtors' books and records shall have been delivered to the
6
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Rhodes Entities at no cost to the Rhodes Entities.
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9. The Arizona Assets shall have been transferred to the Rhodes Entities (or their designee) free and clear of all liens and claims pursuant to section 363(f) of ihe
Bankruptcy Code on the Effective Date; provided, that the non-First Lien Lender/Second Lien Lender liens do not exceed $60,000.
.! The Debtors shall have assumed and assigned all executory contracts and
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unexpircd Icases related solely to the Arizona Assets to the Rhodes Entities (or their
designee), at no cost to the Debtors or the Reorganized Debtors, with all Cure costs
:i -~ OJ i. ~ ~ ~
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16 17
18
associated therewith to be borne by the Rhodes Entities.

11 The tax structure set forth in Article IV.F shall be implemented.
.! The Rhodes Entities and First Lien Steering Committee shall the Golf
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have agreed on
Course Security Property.
19
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ii The Rhodes Entities shall have performed all of thcir obligations under the
Plan including, without limitation, depositing $3.5 millon in Cash in an account designated by the Debtors, with the consent of the First Lien Steering Committee, and transferred the Rhodes Ranch Golf Course and related contracts and assets as required by Article IV.S. to
C. Waiver of Conditions Precedent: The First Lien Steering Committee may waive
22 23
24
25
any of the conditions to the Effective Date at any time, without any notice to parties in
interesl and without any further notice to or action, order, or approval of the Bankruptcy
Court, and without any formal action other than proceeding to confirm or consummate the Plan; provided, that the First Lien Steering Commiuee wil not waive the conditions
precedent in items X.B.6 through 12 above if
26 27 28
the Rhodes Entities shall have complied with
all of their obligations hereunder and in the Plan by the Effective Date (or such earlier date specifically set forth herein). In the event the Rhodes Entities fail to comply with any of iheir obligaiions under the Mediation Term Sheet or under the Plan by the Effective Date (or
such earlier date specifically set forth herein) and fail
10 cure such alleged breach within ten
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2
3
(10) days' written notice to the Rhodes Entities, then the First Lien Steering CommiUce shall be entitled to fie a motion on at least seven (7) days notice to (i) determine that a breach has
occurred (except that the tilure of the parties to agree on the refinancing of the Rhodes
Rani.h Golf Course solely as a result of the First Lien Steering Committee acting
4
5
6 7 8
E
unreasonably or in bad faith shall not be deemed a failure of the Rhodes Entities to comply with their obligations hereunder or under the Plan), and the Rhodes Entities reserve their right to object to such motion; (ii) modify the Plan to remove any provisions hereof that were included for the benefit or the Rhodes Entities; and (iii) consummate the Plan, as modified. Upon entry oran order of the Bankruptcy Court finding a breach by the Rhodes Entities and authorizing the modifications to the Plan to remove any provisions that were included for the benefit of the Rhodes Entities, the First Lien Steering shall be authorized to
make such modifications and consummate the Plan.
D. Effect arNon-Occurrence of Conditions to Consummation: Each of
9
10
11
the conditions
,
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to Consummation must be satisfied or duly waived pursuant to Article X.C, and Consummation must uccur within 180 days of Confirmation, or by such later date
established by Bankruptcy Court order. fConsummation has not occurred within 180 days of Confirmation, then upon motion by a party in interest made before Consummation and a hearing, the Confirmation Order may be vacated by the Bankruptcy Court; provided, however, that notwithstanding the Filing or such motion to vacate, the Confirmation Order may not be vacated if Consummation occurs before the Bankruptcy Court enters an order granting such motion. If the Confirmation Order is vacated pursuant to Article X.D. or
otherwise, then except as provided in any order of the Bankruptcy Court vacating the
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Confirmation Order, the Plan will be null and void in all respects, including the discharge of
Claims and termination of Interests pursuant to the Plan and section 1141 of
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Code and the assumptions, assignments, or rejections of executory contracts or unexpired leases pursuant to Article V, and nothing conlained in the Plan or Disclosure Statement shall: (1) constitute a waiver or release of any Claims, Interests, or Causes of Action; (2) prejudice in any manner the rights of the Debtors, the First Lien Steering Committee or any other Entity; or (3) constitute an admission, acknowledgment, offer, or undertaking of any sort by the Debtors, the First Lien Steering Committee or any other Entity.
E. Satisfaction of Conditions Precedent to Confirmation: Upon entry of a
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20
21
22
23
Confirmation Order acceptable to the Plan Proponent, each of the conditions precedent to Confirmation, as set forth in Article X.A, shall be deemed to have been satisfied or waived in accordance with the Plan.
ARTICLE XI.
MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN
24
25
A. Modifcation and Amendments: The First Lien Steering Committee shall not
modify materially the terms of the Plan without the prior consent of the parties to the
Mediation Term Sheet; provided, that in the event the Rhodes Entities fail to comply with any of their obligations under the Mediation Term Sheet or the Plan by the Effective Date (or such other date set forth herein) and fail to cure such alleged breach within ten (10) days'
26 27 28
written notice to the Rhodes Entities, then the First Licn Steering Committee shall be entitled to tile a motion on at least seven (7) days notice to (i) determine that a hreach has
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occurred (except thai the failure of the parties to agree on the refinancing of the Rhodes
Ranch Golf Course solely as a result of the First Lien Steering Committee acting
2 3
unreasonably or in bad faith shall not be deemed a failure of the Rhodes Entities to comply with their obligations hereunder or under the Plan), and the Rhodes Entities reserve their right to object to such motion; (ii) modify the Plan to remove any provisions hereof that
4
5
were included for the benefit of the Rhodes Entities; and (ii) consummate the Plan, as modified. Upon entry of an order or the Bankruptcy Court finding a breach by the Rhodes Entities and authorizing the modifications to the Plan to remove any provisions that were
the Rhodes Entities, the First Lien Steering shall be authorized to included for the benefit of make such modifications and consummate the Plan. Except as otherwise specifically
6
7 8
provided in the Plan, the Plan Proponent reserves the right to modify the Plan and seek Confirmation consistent with the Bankruptcy Code. Subject to certain restrictions and
requirements set forth in section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019
. ,
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to
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12 13 14
15
and those restrictions on moditcations set forth in the Plan, the Plan Proponent expressly reserves its rights to revoke, withdraw, alter, amend, or modify materially the rlan with rcspect to any Debtor, one or more times, aftcr Confirmation, and, to the extent necessary, may initiate proceedings in the Bankruptcy Court to so alter, amend, or modify thc Plan, or remedy any defect or omission, or reconcile any inconsistencies in the Plan, the Disclosure Statement, or the Confirmation Order, in such matters as may be necessary to carry out the
purposes and intent of
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the rlan. Any such modification or supplement shall be considered a
modification of the Plan and shall be made in accordance with Article XLA. The Plan,
Disclosure Statement and all ancillary documents may be inspected in the office of
the clerk
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of the Bankruptcy Court or its designee during normal business hours, at the Bankruptcy
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Court's website at http://www.nvb.uscourts.gov.Al!documents to be entered into in connection with the consummation of the Plan as described in the Plan and/or Disclosure Statement are integral to the Plan and shall be approved by the Bankruptcy Court pursuant to the Confirmation Order.
B. Effect of Confirmation on Modifications: Entry of a Confirmation Order shall mean that all modifications or amendments to the Plan since the solicitation thereof are approved pursuant to section 1 i 27(a) of thc Bankruptcy Code and do not require additional disclosure or resolicitation under Bankruptcy Rule 3019.
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C. Revocation or Withdrawal of Plan: The Plan Proponent reserves the right to revoke
21
or withdraW the Plan prior to the Confirmation Date and to File subsequent plans of
22 23 24 25
n:organization; provided, that, any subsequently fied plan shall be consistent with the
their obligations under the Mediation Term Sheet or the Plan by the Effective Date (or such other date set forth herein) and fail to cure such alleged breach within ten (10) days' written notice to the Rhodes Entities, in which case the First Lien Steering Committee shall be entitled to fie a motion on at least seven (7) days notice to (i) determine that a breach has occurred (except that the failure of the parties to agree on the refinancing of the Rhodes Ranch Golf Course solely as a result of the First Lien Steering Committee acting unreasonably or in bad faith shall not be deemed a failure of the Rhodes Entities to comply with their obligations hereunder or under the Plan), and the Rhodes Entities reserve their right to object to such motion; (i) revoke or withdraw the Plan as a result of such breach; and (iii) fie a subsequent plan that removes the benefits provided to the Rhodes Entities pursuant to the Mediation
Mediation Settlement unless the Rhodes Entities fail to comply with any of
26
27 28
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Term Sheet. If the Plan Proponent revokes or withdraws the Plan, or if Confirmation or
2
3 4
5
Consummation does not occur, then: (I) the Plan shall be null and void in aJl respects; (2) any settlement or compromise embodied in the Plan (including the fixing or limiting to
an amount certain or any Claim or Class of Claims), assumption or rejection of executory
contracts or unexpired kases effected by the Plan, and any document or agreement executed pursuant to the Plan, shall be deemed null and void; and (3) nothing contained in the Plan shall: (a) constitute a waiver or release of any Claims or Interests; (b) prejudice in any manner ihe rights of the Plan Proponent or any other Entity; or (c) constitute an admission,
6 7
acknowledgement, offer, or undertaking of any sort by the Plan Proponent or any other
Entity.
ARTICLE XI/.
8
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RETENTION OF JURISDICTION
Notwithstanding the entry of the Confirmation Order and the occurrence of the
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Effective Date, the Bankruptcy Court shall retain exclusive jurisdiction over all matters arising out of, or related to, the Chapter II Cases and the Plan pursuant to sections 105(a)
and 1142 of the Bankruptcy Code, including
jurisdiction to:
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priority, Secured or unsecured status, or amount of any Claim or Interest, including the
Claims or Interests;
1: Allow, disallow, determine, liquidate, classify, estimate, or establish the
resolution of any request for payment of any Administrative Claiin and the resolution of any
14
15 16
and all objections to the Secured or unsecured status, priority, amount, or allowance of
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L. Decide and resolve all matters related to the granting and denying, in whole
or in part, of any applications for allowance of compensation or reimbursement of expenses to Professionals authorized pursuant to the Bankruptcy Code or the Plan;
17 18 19
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3. Resolve any matters related to: (a) the assumption, assumption and
assignment, or rejection of any executory contract or unexpired lease to which a Debtor is
pursuant to section 365 of the Bankruptcy Code; (b) any potential contractual obligation
under any executory contract or unexpired lease that is assumed; (c) the Reorganized
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party or with respect to which a De~tor may be liable and to hear, dctennine, and, if 20 necessary, liquidate, any Cure or Claims arising therefrom, including Cure or Claims
21
22
23 24
Debtors amending, modifying, or supplementing, aftcr the Effective Date, pursuant to

Article V, any executory contracts or unexpired leases to the list of executory contracts and
unexpired leases to be assuined or rejected or otherwise; and (d) any dispute regarding
whether a contract or lease is or was executory or expired;

4. Ensure that distributions to Holders of Allowed Claims are accomplished
25
pursuant to the provisions ofihe Plan;

l. Adjudicate, decide, or resolve any motions, adversary proceedings, contested
26
27 28
or litigated matters, and any other matters, and grant or deny any applications involving a Debtor that may be pending on the Effective Date;
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6.
2 3
Adjudicate, decide, or resolve any and all matters related to Causes of
Action;
7. Adjudicate, decide, or resolve any and all matters related 10 section 1141 of

8. Enter and implement such orders as may be necessary or appropriate to
4
5
execute, implement, or consummate the provisions of
6
7
the rlan and all contracts, instruments, releases, indentures, and other agreements or documents created in connection with the Plan or ihe Disclosure Statement;
9. Enter and enforce any order for the sale of property pursuant to sections 363,
1123, or i 1
46(a) oftlie Bankruptcy Code;
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1. Resolve any cases, controversies, suits, disputes, or Causes of Action that
io
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may arise in connection with the Consummation, interpretation, or enforcement of the Plan or any Entity's obligations incurred in connection with the Plan;
lL Resolve any disputes with respect to the Debtors or Reorganized Debtors
"
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performance bonds guaranteed by the Rhodes Entities or oiher matters contemplated by

Article
IV.X.
.i Issue injunctions, enter and implement other orders, or take such other
actions as may be necessary or appropriate to restrain interference by any Entity with

Consummation or enforcement of
the Plan;
16
17
ll Resolve any cases, controversies, suits, disputes, or Causes of Action with
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respect to the releases, injunctions, and other provisions contained in Article VII and enter such orders ao; may he necessary or appropriate to implement such releases, injunctions, and
other provisions;
~ ,. -
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.M Resolve any cases, controversies, :iUits, disputes, or Causes of Action with respect to the repayment or return of distributions and the recovery of additional amounts owed by the Holder ofa Claim for amounts not timely repaid pursuant to Article VII.E;
.l Enter and implement such orders as arc necessaiy or appropriate if the
22 23
Confinnation Order is for any reason modified, stayed, reversed, revoked, or vacated;
ll Determine any other matters that may arise in connection with or related to
24
25
the Plan, the Disclosure Statement, the Confirmation Order, or any contract, instrument,
release, indenture, or other agreement or document created in connection with the Plan or the Disclosure Statement;
11 Enter an order or Final Decree concluding or closing the Chapter I i Cases;
26 27
28
l!
the Plan;
Adjudicate any and all disputes arising from or relating to distributions under
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2
3
J2 Consider any modifications of the Plan, to cure any defect or omission, or to reconcile any inconsistency in any Bankruptcy Court order, including ihe Confirmation Order; 20. Determine requests for the payment of Claims entitled to priority pursuanllo
section 507 ofihe Bankruptcy Code;
4 5 6
7
L Hear and determine disputes arising in connection with ihe interpretation,

implementation, or enforcement of the Plan, or ihe Confirmation Order, including disputes arising under agreements, documents, or instruments executed in connection with the Plan;
22. Hear and determine matters concerning state, local, and federal taxes in
accordance with sections 346, 505, and I 146 of the Bankruptcy Code;
. ,
E
9
10
23. Hear and determine all disputes involving the existence, nature, or scope of
the Debtors' discharge, including any dispute relating to any liability arising out of the termination of employment of any employee, regardless of whether such termination
occurred prior to or aftcr the Effective Date;
24. Enforce all ordcrs previously entered by the Bankruptcy Court; and
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25. Hcar any othcr mattcr not inconsistent with the Bankruptcy Code.
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ARTICLE XIII.
MISCELLANEOUS PROVISIONS
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A. Immediate Binding Effcd: Subject to Article X.B. and notwithstanding Bankruptcy

the Effective Date, the terms of the Plan shall be immediately effective and enforceable and deemed binding upon
Rulcs 3020(e), 6004(g), or 7062 or otherwise, upon the occurrence of
..
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the Debtors, the Reorganized Debtors, and any and all Holders of Claims or Interests
(irrespective of whether such Claims or Interests are deemed to have accepted the Plan), all
Entities that arc parties to or arc subject to the settlements, compromises, releases,
;;
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20
21
discharges, and injunctions described in the Plan or herein, each Entity acquiring property
under the Plan, and any and all non~Debtor parlies to executory contracts and unexpired leases with the Debtors.
22
23
B. Additional Documents: On or before the Effective Date, thc Plan Proponent may
file with the Bankruptcy Court such agreements and other documents as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan. The Debtors or the Reorganized Debtors, as applicable, the First Lien Steering Committee and all Holders of Claims receiving distributions pursuant to the Plan and all other parties in intcrest shall, from time to time, prepare, execute, and deliver any agreements or documents and take any other actions as may be necessary or advisable to effectuate the provisions and
intent of
24 25
26
27
28
the Plan.
C. Payment of Statutory Fecs: All fecs payable pursuant to section 1
930(a) of the
Judicial Code, as determined by the Bankruptcy Court at a hearing pursuant to section 1128
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2
3
of the Bankruptcy Code, shall be paid for each quarter (including any fraction thereof) until the Chapter i I Cases are converted, dismissed, or closed, whichever occurs first.
D. Dissolution of Creditors' Committee: Upon the Effective Date, the Creitors'

Committee shall dissolve automatically (except wiih respect to the resolution of
applications
4
5
for Professional Claims), and members thereof shall be released and discharged from all rights, duties, responsibilities, and liabilities arising from, or related to, the Chapter 11 Cases
and under the Bankruptcy Code.
6
7 8
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E. Reservation of Rights: Except as expressly set forth in the Plan, the Plan shall have no force or effect unless the Bankruptcy Court shall enter the Confirmation Order. None or the Filing or the Plan, any statement or provision contained in the Plan, or the taking orany action by any Debtor with respect to the Plan, the Disclosure Statement, or any documents ancilary to either the Plan or the Disclosure Statement, shall be deemed to be an admission Claims or Interests prior or waiver ofany rights of any Debtor with respect to the Holders of to the Effective Date.
F. Successors and Assigns: The rights, benefits, and obligations orany Entity named
12
13
or referred to in the Plan shall be binding on, and shall inure to the benefit of, any heir, execu1or, administrator, successor or assign, affliate, offcer, director, agent, representative, attorney, beneficiaries, or guardian, if any, of eaeh Entity.
14
15
. Service of Documents:
en t'-';: i: ~ tl
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16 17 18 19
L After the Effective Date, any pleading, notice, or other document required by
the Plan 10 be served on or delivered to the Reorganized Debtors shall be served on:
;D'ntQrs'7:~;" ,-, ,",',"",,,,,, ,h
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The Rhodes Companies, LLC 4730 South Fort Apache Road Suite 300 Las Vegas, NV 89147
22
23 24
25
Larson & Stephens 810 S. Casino Cen1er Boulevard

Suite 104
Las Vegas, NV 89101

Atln: Zachariah Larson
26 27 28
":Ul1itea~~Tr;lsi'-:,:1N~t;~~:,:",':H~':-" iiii-sel_t~rthJtirstt i~ru
~,l~~~~tt:)!~"::;~~J;r&&~~~fHr1T K~Gir_lt)tt~-:-~:::,,:.::-t4~
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2
3
United States Trustee - LV-I J 300 Las Vegas Boulevard S.

Suite 4300
Akin Gump Strauss Hauer & rcid One Bryant Park New York, NY 10036
Las Vegas, NV 89101

Au": Edward M. McDonald
Auo: Philip C. Dublin

Abid Qureshi
4
5 6 7 8
;;tg.iirli~_cJ;'t(ftll~(tI-Cdit9,rs':~a _.,
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Parsons Behle & Latimer 20 i S. Main St., Suite 1800

Salt Lake City, Utah 841 i i
Alto: J. Thomas Beckett
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Parsons Behle & Latimer 50 Wesl Liberty Street, Suite 750

Reno, Nevada 89501 AUn: Rew Goodenow
2. After the Effective Date, the Reorganized Debtors have authority to send a
14
15 16
vi ~ s: vi t....5
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17
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notice to Entities that to continue to receive documents pursuant to Bankruptcy Rule 2002, they must file a renewed request to receive documents pursuant to Bankruptcy Rule 2002. After the Effective Date, the Reorganized Debtors arc authorized to limit the list of Entities receiving documents pursuant to Bankruptcy Rule 2002 to those Entities who have Filed such renewed requcsts.
3_ In accordance with Bankruptcy Rules 2002 and 3020(c), within tcn business
:;
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20
21
days of the date of entry of the Confirmation Order, the Plan Proponcnt shall serve the
Notice of Confirmation by United States mail, first class postage prepaid, by hand, or by
overnight courier scrvice to all parties having been served with the Confirmation Hearing
22
23 24
25
Notice; provided, however, that no notice or service of any kind shall be required to be
mailed or made upon any Entity to whom the Plan Proponent mailed a Confirmation
Hearing Notice, but received such notice returned marked "undeliverable as addressed,"
26
27 28
"moved, left no forwarding address" or "forwarding order expired," or similar reason, unless the Plan Proponcnt has been informed in writing by such Entity, or is otherwise aware, of that Entity's new addre$S. To supplement the notice described in the preceding sentence, within twenty days of the date of the Confirmation Order, ihe First Lien Steering Committee shall publish the Notice of Confirmation once in the Vegas Sun. Mailing and publication of the Notice of Confirmation in the time and manner set forth in the this paragraph shall be
good and suffcient notice under the particular circumstances and in accordance with the
requirements of Bankruptcy Rules 2002 and 3020(c), und no further noiice is necessary.
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H. Term of Iniunctions or Stays: Unless otherwise provided in the Plan or in the

2
3
Conlirniation Order, all injunctions or stays in effect in the Chapter II Cases pursuant to
sections 105 or 362 of the Bankruptcy Code or any order of the Bankruptcy Court, and extant on the Confirmation Date (excluding any injunctions or stays contained in the Plan or
the Conlrination Order) shall remain in full force and effect until the Effective Date. All
4
5
injunctions or stays contained in the Plan or the Confirmation Order shall remain in full
force and effect in accordance with their terms.
i. Entire Agreement: Except as otherwise indicated, the Plan supersedes all previous
6 7
&
and contemporaneous negotiations, promises, covenants, agreements, understandings, and representations on such subjects, all of which have become merged and integmtcd into the
Plan.
9
10
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J. Governing Law: Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and Bankruptcy Rules) or unless otherwise specifcally stated, the laws of the State of Nevada, without giving effect to the principles of conflct of
laws, shall govern the rights, obligations, construction, and implementation of
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II
12
13
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agreements, documents, instruments, or contracts executed or entered into in connection with the Plan (except as otherwise set forth in those agreements, in which case the governing law of such agreement shall control), and corporate governance matters; provided. however, that corporate governance matters relating to the Debtors or Reorganized Debtors, as
applicable, not incorporated or organized in Nevada shall be governed by the laws of the
14
15
state of incorporation or organization of the applicable Debtor or Reorganized Debtor, as

applicable.
K. Exhibits: All exhibits and documenls ancillary to the Plan and/or the Disclosure
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Statement are incorporated into and are a part of the Plan as if set forth in full in the Plan. Copies of such exhibits and documents are available upon written request to the First Lien Steering Committee's counsel at thc address above or by downloading such exhibits and
documents from the Bankruptcy Court's website at http://ww.nvb.uscourts.gov. To the
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extent any exhibit or document is inconsistent with the terms of the Plan, unless otherwise ordered by the Bankruptcy Court, the non-exhibit or non-document portion of the Plan shall
control.
L. Nonseverabilitv of
20
21
Plan Provisions: If, prior to Confirmation, any term or provision
22 23
24 25
of the Plan is held by the Bankruptcy Court to be invalid, void, or unenforceable, the
ankruptcy Court shall have the power to alter and interpret such term or provision to make
it valid or enforceable to the maximum extent practicable, consistent with the original
the term or provision held to be invalid, void, or unenforceable, and such term or provision shall then be applicable as altered or interpreted. Notwithstanding any such holding, alteration, or interpretation, the remainder of the terms and provisions of the Plan will remain in full force and effect and will in no way be affected, impaired, or invalidated by such holding, alteration, or interpretation. The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision or the Plan, as it may
purpose of
26
27
2&
have been altered or interpreted in accordance with the foregoing, is: (1) valid and
enforceable pursuant to its terms; (2) integral to the Plan and may not be deleted or modified without the Plan Proponent's consent; and (3) nonseverable and mutually dependent.
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M. Closing of the Chapter II Cases: The Reorganized Debtors shall, promptly after the rull administration of the Chapter I i Cases, File with the Bankruptcy Court all documents
required by Bankruptcy Rule 3022 and any applicable order of the Bankruptcy Court to
3 close the Chapier I i Cases.
4 N. Waiver or Estoppel: Each Holder of a Claim or an Interest shall be deemed to have
waived any right to assert any argument, including the right to argue ihat its Claim or 5 Interest should be Allowed in a certain amount, in a certain priority, Secured or not
6 subordinated by virtue of an agreement made with the Debtors or their counsel, the First
7 disclosed in the rlan, the Disclosure Statement, or papers filed with the Bankruptcy Court
Lien Steering Committee or its counsel, or any other Entity, if such agreement was not
prior to the Confirmation Date.
.. .. .. " o .. M
. , E . . "
E
O. Conflicts: Except as set forth in the Plan, to the extent that any provision of the
Disclosure Statement, the Mediation Tenn Sheet or any order (other than the Confirmation
10 Order) referenced in the Plan (or any exhibits, schedules, appendices, supplements, or
II
12 13 14 15
amendments to any of the foregoing), conflct with or are in any way inconsistent with any provision ofihe Plan, the Plan shall govern and control.
Las Vegas, Nevada
Dated: November 23, 2009
'"~~ ~ ~ ~ g~ " t:..M ;i -~
;: "'..~ .. Q. 0 M :: ;i ~ ti ",:t i: i: : tl ';: i:.:" .. i: 0 ~= r- c ..!;

'" ~ ~
FIRST LIEN STEERING COMMllTEE
16 17 18 19
By: Isl Philp C. Dublin

Nile Leatham (NV Bar No_ 002838) KOLESAR & LEATHAM
Wells fargo Financial Center
Q. :=;:
'"
~ ZN ;0 ;: Cl ~
"'
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t
3320 W. Sahara Ave.

Las Vegas, NV 89 i 02
20
21
(702) 979-2357 (Telephone) (702) 362~9472 (Facsimile) Nleatham(klnevada.com
22
23
24
25
AKIN GUMP STRAUSS HAUER & FELD LLP Philip C. Dublin (NY BarNo, 2959344) Abid Qureshi (NY Bar No. 2684637) One Bryant Park New York, New Yark 10036 (212) 872-1000 (Telephone)
(212) 872~i 002 (Facsimile)
26 27 28
pdublin~~akingump.com aqureshi(0akingump.com
Counsellor ihe First Lien Steering Commillee
65
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LIST OF EXHIBITS
Description
Mediation Term Sheet
Term Sheet for New First Lien Notes
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Exhibit
Mediation Term Sheet
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EXECUTION COPY
, RHODES ENT TIES' MEDIATION SETTLEMENT PROPOSAL ... ..
Releases for Rhodes EDtillcs:
he Rliooes Entities (as set for on Attachment A) shall reeive II full (elea.':e forchiiptcr 5 causes of aciioJl with repet (0 trasfer made by ihe Dehtors to ite Rhodes Entities during the 2 yearn prior to the Petition Dille provided, i ILL, such release shall oiily apply to trnsfers expresly set fonh in ihe
ileblors' S!llemenis offiiiaiici! affairs as fied with the Bankruptcy Cowt as
Releai;cs ror Deblors' offcers,

employees and professonals
I t August 1,2009 or as disclosed in Allachmcnt B.
,1'0 the extont pellcd by applicable law, the Plan shall provide tht, bui for
-(i. ihe Rhes Entities and their affliates; (ii) insiders of any oflh Rhodes
E iiiies (except as 10 Thomas Robinson and Joseh Schrmm who were also
e ~~OYec of
the Debtors); (il) relatives of James Rhod, ihe Debtors'
g Ilem. relea from the DebtOl' esta.te.,.

Exc:ulp:ilion: Bond Repliic:emeii or
,
o ieers, employees (including Thomas Robinson and Joseph Sch), and (eiisiona!s, as of the Pelition Dale, and Paul Huygens shall receive a
T e Plan shall contain standad exculpation provisions.
IndeiniiifcatioD:
g raOleed by the Rhodes Eniitle: iii favor ofihe Debtors!o be replaced on a
re ewal dale by new performance bonds or, in th alternlive, (ii) subject 10
Ihi Reorganiz Debtors, wliicJi shall be salsfied solely as or the Effective D Ie by the Cour findiiig ihat the Plan is feaible, the exstig performnce
th Rhode:,b.ii .mvld, ,,,,., ,'ih, f,II,wl.., wiih'b""creitwrthine or ~f. PI,. Entiiies beiiig reasnably sati~fied (I) the .m,"" 00"'
pI ceo The appcablc Rbodes Entity's agreeinent !o ren a gurator undr
1d5 guannfee by lhe Rhes Entities and such guariite to remain in iha exisiing performan bonds os such perormance bonds lIay be renewed
pa mem of bond premiums). In ile evnt ihe Reorgiini:ied DelOrs fal 10
ih """ 00 "'" '" ,b,the Reollanze (;oclodl.& bot 00' ""''''' '", ih, "'t Effectie Daie, Rh""" E.""" Debtors wil indemnify ih Rhodes Enj"'" ood" mrh """,,,.dln. '''''''' 00,'" fn, d"",.~ In"noo by
pc an thr obligations underlying such renewed perfomiaicc bonds after
the Rbodes Eniiiies on aceounl oflheir guarantee of such perromince bonds

solly lI a relt of Ihe Reorganed Debtors' failur 10 perfor such
obligalons subseqeni to the Effective Date. The Reorganized Debtors shall
bo ~ backstopped by Rbode Enlles' within 30 month of lie Effective D, . The anlmiplcy Cour shall relanjurisdiction 10 relve any dispute
ari ng OLlI pfihs pagraph.
~omicriiiIlY reanable effort to replace 811 outstag pedoim
HOA' Board Seals:
. ; Rhodes Eniiiies shall en ihat deignees identifed by the Reorganiz

tors shall replace llie Rhodes Entities on any HOA Bows rnal in any
w~ are relate 10 the Debtors, Reorganized Debtors or their businesses and
D amnt Tights or ilie like shall be transfelTed 10 the Reorgiiii:i Debtors or
theidesgri:s).
Licensing:
Tho Rhdes Eiiiile: Mall tae commercially resonable stes and/or enter
into any agreeents or similar documentation resoDlbly nec to ensure

tle keorgaii Debtor' conliiied us orall of
the Debtors' aplicable

up to
proftionalliccnse at no eosl to ile Rbodes Enties for a perod of
iwet months following the Effective Date. Additionay, provided tbaithe

par . have executed iIis Mcdiilon Settlement Ter Sheet, Sagebni~h
Elle~rises rne. shall recind by Septembe 25, 2009 its revoclo~ of its
indclly of
th Nevada Contrrn' lice held by Rhodes Deign ~
De:;di~ni~eit Como..iiion 10 tle extent such rescissun does not ne;"lively
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EXECUTION COpy
lTc:t ihe general conlracior'$licen.~e held by Rhodi:~ Design & Development
Olpraon provided tJat S3gebrnsh shall be entitled to file iin administrative

liiim on behalf or wiy and nil claims aserted againi.1 Sagebruh 3S II result of
*'''=h hd" "" ;"=,ito, ib.. """ from~' ,ft,,, ib, ""',,;'''~, or
lIgcbrush's mission oiiis indemnity through the Effective Dale, provided
i 1I11he allowan of such Iidllinislrliiive claim shall be subject 10 reolution Llie Banptcy Court and/or i:uch oiJcrcoun(s) of compclentjuri~dicljon. e Rcogani.d Debtors shall indemnify Siigeb~h for IIny an all claims
:trted againSt Sagebni~h liS II reult of
se from and afler the Effective Dafe. Profesonal licenses include, but ar
Sagebrush beng the indemntor Lhi
nb! Imiled to the Nevada State ConlTclor's Boa license, iid any other
other j risdiction in whch the Reorgimi2 llblori conduct busine or own assts
,
Rhodes Endties' Clam
a of th busines or similar The Rhodes any county, slate, municipality or ~trieral Effwtive Date. licenses in Entiiie.~ shall use coiiercially
soiiable effoTllo miiiniain thrd pa agrcemeiiLo with lheirre eslllte
bokersandsalesagents.
Treahnenl:
class as and trted pari pa5SU with General Unsred Claims, ludiog Trade Claims. The First Lien Sleerig Commiuee. any Finl Lien
:f '"""I 'lloww.Reorgize Debtors shallCI,;""until sixty days foIJowin nder andlor the Ibe Rhod., E",;i;~' have ,h,lI be I='W m th
Ibi Eir~i;" "''' to ohj",' '0 ih, p,oof, of d,;m fiw by Ibe Rhod~ Ent;ri~
in he Debiors' clptcr II eases (prOvided. thi, such ohjeclionshallnot seek
to ubordioate iJe Rhes Entities Claim if allowed). Neither the Litigation T st nor the Reorganized Debiors shall commence any litigation againt the
es Entities Claims set fort in such proofs of claim (for th avoidance of do bi, the First Lien Lender are not bound by th.s provision). To the extent an statute of
ag,inst rne Rlod Entities would liipse. frm execution ofthia ler sheet
limitations B~krp"y eo,.. ro~ on ibe '110_00 oft'" $~ Enride '01;1 ihe 10 purse any claims belong,iOg to the Detors
'~PriO' to Ih, B,",p,"y eo,,', ~I,'oo efa. .li.~ oflbe Rhod~

En iiies Claims, as sel fonh in fied profs of be ec 10 have consented to II tolling of
claim, th Rhodes Eniitis shall

the applicable stalule of
Ii tatins unlil sixty days followig the Banruptcy Court's ruling on th

all wance of Tax TreaCmeit: !
the Rhodes Entities Claim.
:lj, Plan Ih, "'oefi" "i forta;0 "ern 4 .. AUnohmool C; p,",idw. ib" sha be slnctiled in ta effcient maer 10 the Rhodes Enties '~,."'~
the shaii be no adverse impact on th Reorgal:ied Debtors or the Firi Lien
Le en; The Rhodes Entities iid tbe First Lien Steeg Commiiee shalJ
a e on the slrture necessary to implement ihe ta treatment on or before
Sep!ember2S, 2009.
Erfectll!Dafe:
Rhodes Ranch Golf Cours:
ThelPlan Effective Date shall occur no earlier than Janua 4, 2010.
Thr"" Rho'~ ",noh Golf Coorn,. " ror"" 10 h",;,. ,h,1I m~ ib,
gol COlle situated within rne Rhes Ranch master-planed community
loea cd in the sournwestcr Las Vegas viilley.
Conditonli Precedent to Effcctive

Dale:
i. ;te Biikrptcy Court shiill hiive iiuthorized the assumption 2nd rejection
of e ecutoiy contrcts iid unxpire lea'\ by th Debior.

i
2. he Confiniiation Order shall have beome a Final Order in fonn and

sub. nee acceptable to the First Lien Steerg Committee.
3. Ae iiost currt version ofihe Plan Sunnlcmeni iid all of
the schedules
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EXECUTION COPY
dj:umenis. and exliibiis contained lherein ~haii have been Filed in form and
4 The documents govcming the New First Lien Noles, ibe Newco Chatter, 'Ibstance accepiable to the FiB! Lien Steerng Commillee.
e Newco Bylaws and the Stockholders Agreement shall be in fonn llnd

bSlance acceptable to the First Lien Steciing Commiiice.
5. The Confimation Dale shall have occurrd.
6. The Fin;l Lien Stering Commiuee shall have dc.qignaied and replaced
h existing Qulifed Employee with D new Qualified Employee.
7.~ThC cUiTcnt debt outstanding on the Rhodes Ranch Golf Course shall be
rc lDance on terms and conditions accetable to Rhodes and the First lien
51 criog Committee.
~._icoPes orall Debtors' bOQks and rerd ,hall have bee delivered to the
jodes Entities at no cost to the Rhode.q Entities.
9. I TIle Arizona AsIS shall have been lfrcrred to the Rhodes Entities (or their designee) free and clea of all liens and claims pursuant to setion 363(f) O'lthe Bankrptcy Cod on the Effective Date provided that tbe non-First
Li Lender/Secnd Lien Lender liens do not exce $60,000.

io The Debtors shall have asumed and asigned all executory tontncls and
un xpire lea related solely to the Arizna Assets 10 the Rhodes Entiiies
(or iir designee), at no casllo the Debtoni or the Reorganiz Debtors, with
all lire cots assiated therewith to be bome by the Rhodcs Eniities
'~. The Rhodes Entities and the Firt Lien Sleeng Commiiiec shaii have a d on the Strcture necry to irplemcrt the la StrclU1 benefits set
fo n~hbjtC.
12.1 The R!de.-: Eniities and Firt Lien Steeg Commillee shiill have agre
on tle GolrCounie Security Propert.
13. i The Rhode Enlities shall have ensure iIl designee idenlified by tbe
RcJianized Deblors shall have replaced the Rhodes Entities on any HOA
BOtds tlial in any way ar relalcd 10 the Debtors, Reorgan Deblois or the. busines and Declarant rights or th like shall be transfered 10 the
Reo ganized DebtolS or iher dcsignee(s)
14. ~The Rhodes Entities shall have peormed all or their Obligations under
the Ian including, withoulliiitation. depositing $3.5 millon in Cash in an
acco n! designated by the Debtors, with the const oflb Firt Lieo Slcerig
Corrmiltee and IrasferlIng the eauily in the eniiiy ihat own the Rhodes
I"il Golf Cours and related cotrct and assts to th Reorganize De ors pnrsanl to ih teim or D stok trafer agreement in fonn and
subs snce acctable to the Rhodes Entities and the First lien Steering
Co nee.
is. AJI oth cus!omary Conditions PrecOlllo the Effective Date as
dele iiied by and aitablc 10 the Firs Lien Sleeg Committee, in its sole
di-:c liolL
Waiver of Conditions Pr~edeiit
The irst Lien Slecri Committe mil waive an of ihe conditiOns to the
I I
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EXECUTION COPY
I lO ihe Errcctive Date
~ieclive: Dale at any lime, wiihout any notice 10 pares in intert and
"thOU! any further noliee 10 or action, order, or approval of the Banptcy C UTI, and without any formal aeiion other than proceding 10 confirm or
c nsummale the Plan; prvided thaI the First Lien Steeg Commillee wil n t waive tbe conditions p~denl in items 61hrough 12 above iftli: Rhodes
E iiiies shall have complied with all of 1I1cit obligations hereunder and in the
Pilm by the Erreciive Date (or such earlier date specifcally set fort herin).
' Ii the client the Rhode: Elllili~ fail to comply with any of their obligations
hi eunder or urdcr the Plan by the Effective Dale and fail to cure such
al eged breach witlin ten (10) days' wrillen notice 10 the Rhodes Entities, tlto the First Lien Steeing Commillee shll be eniitled 10 fie a motion on al
ih t the failure ofihe pillies to agr on ihe refiancing orthe Rhodes Ranch G If COlirs SOlely as a reult of the First Lien Steeing Commillee acting eaonably or in bad faith shall not be deemed a failur of ihe Rhodes
(ities to comply with their obligations hereder or under the Plan), and ihe
' re,,, (7) d." notioe to 0) d,,,o=;no 1""1. b=oh b" 0"''''' (",oepi ~io ',"0" on, pro,I,lo., borefth,1 wo", ;nol"dod fo. tho bonfii ofth.
odes Entities rerve their righiio object 10 such moiion; (ii) modify the
M Entities and (ii) coiiswmate lhc Plan, as modified. Upon entr of

lD rder of ihe Banptcy Court fuiding a breach by lhe Rhode! Entities and au ioring the modifications 10 the PLiU to remove any provision!lihat were
in uded for ih benefit of the Rhodes Entities, the FiIi LieD Steeng shall
be rUi.oriZed 10 make such modifications and conSUmmate tbe Pla.
Modificntlo'n orthe Plan
T~ Firs\ Lien Steg Commiltce shal Dot modify materaJly the ters of
ll Plan without the prior i:nsent of the partes 10 this lerm sheet so long a~
'" 1 parties have complied with all of tJei obligalions herunder and under
tho
Plan by Januar 4.2010 (or such other date spifically se fort herein).
Plan Siippori;
Debiois an Rhode Entiiies shll nly supprt a plan of rerganiiioD
b, tho Fim '" Slwi,. Comml." oonto"",,1l of
th pro,,"on. of ih Mediation Seiilemcni Ter Sheet and COn98lent wiih ihe Pla (0 whh ganizaion or support any olbr plan of rerganization fied in the
lbi ler she is an exhibit and will not fie ii ompcting plan of
ne:tors'hiipterll=.
Golf Course Transrer:
On
c Erfciivc Dale, lhe applicable Rhodes Entities shall trfe their
Rcorwize Debiois (togethr wjiJ any equipment, golf carts. COnlcls or

for ie opera
"l"
ty interCS in the Cllity ihat own I~ Rhdes Rncl GolfCouise 10 Ihe
O~'="d"=I"' byib, f1-i Lion SI"'nn, Comml." to b. noo",'l

iion of the Rhodes Rach GolfCoul"c) pUluant to the iers ora stoe trnsfer agrent in (onn and substance actable 10 th Firit Lien Sl ng Commillee and Rhodes, subject to any Rh~ Ranch Golf
outstading debi on the
rep laiions by the Rlodes Entiiies ihat the entity ihai own the Rhodes Ran h GolfCour doc DOl have any liabilities other than ordiiw cowse ljab. .iies related 10 IIie Rhodes Raneh GOlfCOUfS and indemficaon
Cour. Th slock trsfer agrent shall coniain
pm
00.
ihal
0",
, iions to the Dislosure Sialcmeni. Ihe Rhodes Eniies shal provide lhe ~~ FiIt Lien Steering CommiUee with a list of all liabilties of the entity tht
th Rhodes Rach Golf Cours, alien analysis and copies of all cIs relaied to the Rhodes Ranch Golf wns the Rlndes Rah GoirCouris a
ions in favor ofihe Reorgazed Debio by th Rhodes Entities for any rdin course libilities. In adition, prior to the deadline for filig
Cours and 10 which ihe entity

pary. each of
'-.
8200277 v.
.= table 10 lhc Fis! Lien Steering Committee.

Tbo xistin
which mu.~1 be
debt oul:tandjnl1 on illC Rhodes Raneh Golf
Cour shal be
f3
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EXECUTION COpy
i financed on or befote the Effective Dalt, ror a period orno les than twelve
( 2) month from th Effective Dale, on lerm: and conditions acceptable to odes and th First Lien Sleering Cominillee. The parties will work logether i good faith 10 refinance the existing debt. The Reorganized Di:btors iihiill
p y the reonable costs and expenses associated with ihe rcfinoncing;
such refinancing !Ire acctable 10 th First Lien S eering Comniiuee. The First Lien Steering Committee acknowledge tht
loan documcntiilion miiy provide that, upon the trafer orlhe lUodes
Rpnch Golf
p vded. ihai the lcmis of
aqdiiional collaterl from the Reorganize Debtors may be reuired. The
Course to the Reorganize Debiors on the Effective Dale,
Rlooe: Entities shall trnsfer to the Reorganzed Debtors on iJ Effective otbt any conlncls related 10 ile opertion of and revenue generated by any
~l towers locaied on Ihe propert of
Course. Any fu ds received liner July31,2009 from tbeI.~ Vegas VallyWalerDilitrcl

or olher similar entity as an incentive for converting the golf cou from a
'; cour to a desrt
the Rhes Raiicb Golf
course shall be used for operating expese
a iBled wili Ihe Rhdes Ranch GoJfCoUJ. wiih any exces to beome
p pert oflhe Reorgani7. Debtors on the Effeciivc Date.
RR r~~ Ranch Golf Cour from iJe Reorganzed Debtonlto repurhas the jUes IlndfoThii designee shaU have iJe absolule right at eight (8) yers
Coe any iime herv_en four(4) iid eight (8) years frm iJe Effecive Dale for $5.9 million
in ash provided tht the Reorganize Debtors .shal provide Rhodes with al
mi y require Rhodes 10 purchase the Rhodes Ranch Golf
m iJe Effective Dale for SS.9 millon incash. The Reorgiiized Debiors
l~ lone yeir advance notice oeits intent 10 sell the Rhodes Rah Golf COFe ooek 10 Rhodes. Such transfer shll occur on ihe applicable
date of the EfTeetie I ~ iver Date. For R ,rganizd Debtors puiihe Rhodes Ranch Golf the avoidance of doubt, if
Course to Rhodes in accprdce with th lerm hereof and Rhes fails 10 comply with his
the
oblIgation 10 piirehas the Rhdcs Raeh GolfCoUl Rhodcs iilill be
Co .
~ to have fodeiied his opiion to purhase the RJodes Rah Golf
On the Effective Date, Rhodes's obligatiOns to comply with th repurhase

s be secured by eiiher (i) $500,000 in ca iii an escrow accounl or (ii)
pro*y wort at leai $2 milion (the "Golf
the ue or such proper 10 be iigred lo by Rhode: an th Firt Lien
Cour Security ProPCj, wifh
ll!'isa fimi acctale to hath Rhode and the First Lien Steg
S .ng Commiiiec or otheisc valued by an independent thd pary
Coiimiitee (excet Cushman Wakefield). In the ewnt tht Rhodes does not mee the repurhas reuest, provided Ilatihe Rhes Ranch Golf Course is
in i e slanda condition (defined below), then the Reorganize Debtors shall
SSG ,000 or the Golf
be titled to liquidated damages in ihe form of seeurity pledged (i.e., ihe Cour Security Prope).
So iig as Rhodes ha not defiu/rcd on his obligation 10 rerchas the

Rho es Ranch Golf Cours, Rhodes shall have the abslut and sole
disc iiOn 10 replace the Goir Cour Securty Property with $500,O~ in cash
on 3 days wrllen notice 10 ihe Reorgan Debtors. Upon depOSt of the
~~Oi 000 iii eash, the Golf Cour Security Propey shaIl he rel~ to
Rlo s or his design. Notwlhsianding anyting to the eontr contained
heri irih Rhod Ranch Golf
Course ii no! mantained with ~ubslatialIy

the repurhase reuest
th s e peormance an rating criteria aiihe lime of
as v rmoo by an indendent thir part rating ageney as ii was on the
Eff ive Dale ("Sland;;;;Y;:~ di1to-if'), James Rhodc... can (i) rere ihe
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corganize Debtors to cure any condiiions fO relum the Rhode.~ Ranch Golf
ur to iis Standard Condition (provided, (hat ihe cost of such cure doe
n I t'xceed $500,000), or (ii) choose nol to purchase tbe RJlodes Ranch Golf purne. Upon ei'her the repurchase oftb Rhode.~ Ranch GolfCour.e or ihe
~ilteii decision 10 not repurchase th Rhodcs Ranch Golf Coue (in

II cordiinci with thc preceiig sentence), the Golf Course Secrity Propety
o i the S500,OOO Cash (if not applied 10 ihe repurchase of ihe Rhes Ranch
G irCourc) shall be rerumed 10 Rhodes within 30 days.
0 lbe Effective Dale, the Rerganize Debiors shall recrd a inmornnduni

o agremcnt agains the Rhodes Ranch GolfCoune to evidence the above.
Golf Course Audit:
,~ lng the period from September I, 2009 lbugh September 23, 2009, ihe
odes Entiiies shall provide iiixes to the Firs Lien Steering COmDttee or i designee to undc.ke a financial and opertiooiil audit of the Rhodes I R neli GolfCoursc. The reults of such audit must be acceptable to the Fir.t
Li n Sieering Commillee in its sole discion and evidence, among other ih gs, that ihe finaial performnce of the Rhodes Ranch Golf Course is
ch Golf
~ cieni to pay operaling expese and seice ihe dcbt on the Rhodes
.
Cash Payment:
Course wilbont the nee for addtioniil liquidity.
Tht Rle.~ En.tilies shall makc a cah payment 10 the Reorganize Debtors
OfJ,S uiilhon In cash on the Effeclive Dale.
Arina:
I SO tanc acceptable 10 the First IIIL asscllniier agreeent in form and ~~e Effeciive Date, Puruaiil 10 en Sleeng Commtt and tbe Rhodes
~Ol E ~n Attchment D heto, plus the Golden Vallcy Rach traderume to
Iheiodes Eniities free and clear ~Ul nant to .siion 363(1) of
En i,ties,the Debtors shall trnsfer Pravaa and the other Arzona asel3 set
~ir t Lien LcderfScrnd Lien Leer licns do nol exce $60,000; provided
ih such asts shall not includc asets own by Pincle GUIding locate in Ari ~na and related contrct iiiated with the assets" Debtors shall pro . de James Rhodes notice of any propose sale of th Pinnacle as~cls, and
ay: of
of al lien, claims and enumbranc the Banptc Code; provided, ihat tbelloD-
J~ es Rhodes shall begrted a right 10 bid on th sae of such asCls with

10
such noiice. Rhodes EnTilies shall pet strage ofPinaclc
Grailiig equipmenl al CUITI Jocnions al no cost 10 th Reorgan Debtors for perod though six months follOWing the Efective Dale.
I
All rxecutory conlralS and unexpired lea asiated solely with Arna
shal be assimed an asigoc 10 the Rhdes Enriiics (or their design), at

no lost 10 the Debtors or th Reorganize Debiois Rnd aU con: costs
ass ialed therewilh shaH be borne by the Rhodes Entities.
Plan I Filng:
The lJtors, the Rhodes Enlites, the First Lien Steerig Committe, the Firi Lie Ageni, th Scoond Lien Agcit and the Creitor Commillee shall agr Dot 0 file a plan of reorgiinizaiion until the ealier of (i) the date the paies
agr on the ferms of a plan of rergization (and accmpanying disclosu staie! ent) or (ii) Seplembcr 25,2009.
Casb CoUatcral:
Tho jrsi Licn Steering Commiuee, Firi Lien Agcot and Sercd Lien Agent will gree to the ClnliIlued us of cah collaterl on e:istIlg term and subj~i
'0.
agr upon budget, thougbJanuar II, 2010.
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EJ(ECUTiON COpy
:Triid~inllrk$llnd Th.d~ ,Nn'ries
" \Yiln I~ ~rlier oliJ:il1y(30) dll~ following; (i) iipo compiclonorjh~ .,bliildoiiloraiiorlheReoraniZCl)cblori'hoini:buJJdin~DSscI5,and
: gYtll!iyire8ii1DoQ of whensi.li "ssls aM i;cilOrY W(rc ilcql;ed" or
.(0) ~i.l~ul!l orif~ R:iiininS iniicnIOlYi:rili.R.rgnnlzed D!ll:!'rs. the
"~'J~nk~ pc.blimisliiill trii/hio lai,_~'RlKdei:(Dr hb dC$ign),lhe.

Trlll:eOiilm"sAnlil)'s!.s
lrdeiiks iud lndeiiamcs $Cl runh n Allaebmen.tl;..
J1ui'Fir1 Llen Slecng"Commillec; Ilic.oebloa and*c Crilol3 CommiUe

wi!Ii:st prior
sc:ndufdclaj~:'sliillbe_cl;iificd n.~TnidcCJilli$'li(ij)oap~lire
.C91m ~baU i:~I\le DRY disputes nt IliDisclo,5wiatn~ei:ttirig.
,Prl!rNCric:e CI81iiAi:lllii!f~
to Ih,c hca:ii'ig ~ tlc DistmureSieinitr.. (I) ,,hlh tied or
fo;-:Ih.c.icQDjliuijClII orTriidcClin irii"e P.ics m"Uiible lQ.ligron (i)
?t,ii)iiyc in.aiivlIll of ihe .DjS'lur:S'i.'I,t.nt hiit;-lhe nnii:ty~T1 Reorglllz.d Jj,cll~rs'5hniriii Stk,t'nvcid p~Cpfit9ri:~nsf(li:'ii
htilde# iir.iiowt Trade Cliiims underB:ank'pli:!t,Cde':iiipn-S-4711J tbe
" . , .
JJld~rfl AJloted ri:i:CiCialiB
,xj~i:.i:~c ~Jlig i:'~imf~o~ lIc tlvij~o,ijC'OC-s~,. lnit~ilii#~(er
.$ltlnie)'Engln~rilj'G
wouldhkllll'b(la.alJom:d rraeCliil', ,"
ri;~ri:,~,I,ibiiSlllnkEri8iiieeg:L,IilgQii~.ltrtlY.'iitlet')yju~
'tac!tii;nt:na inBcr fllvnbrc 10 the Rcrgii~'Plb~lli~ S\,~. (eSJuiiO'liiO'OlprovidoforCOSWfSi1riliiOnlotireciYedQ)'ile
~~igaii,DcbIOts end ~Lii:Lt4er,lhe"rgiiiU nbto~'~
,!lfSCt'nd L~in.Aseni SJI!Ji:&.ngQ.!~ Sota.fA1t~galiito~ IG'~.lI,at,

d!a'Seo,Iiil-L::n l,eii ~lveCD,itidcr.I!OIl'~iu,~'i.rcnuo.sO%',orihCl rut
v.i"uc of $IbTClu,lion tindlQ dcicrminii,-I1 IImlg i;r:pa.)fo.fny:sQcli
,'~~ii:jl; in be eV,tor liiRe(irgii~iOril)(flbe'Scehd:ut

;.Agbii'arc ~MbJ~'I~ ~gi- on ih'iimbunill fo"rSti;Ciii~'tnllotl~.the
:(wi,ti iJe,~'!"!r.tbc Send Licn,I!.nl, 19.bti:1m'ftlhli .

.
:,p~ will$ubniiillie ii.n'!l~r i' bfnding'n:iliibn.Wii'tl\cos~ iher~Qtlo ::~wlilVchiy,-imtigl1ic,Rcorg,nize Dtb,lni',/ind tI'seorid:i.ICjI ~gn-i
"~IX~ti-bi:.jJj~~nlni:d.'/:tli.: S.;tid t!Il:'L:iilter-o.tIJicium lihe
'S Ie' jnceni1lill;:~U6ri''~ ".
.N ,.'A.i,',if :f" 'Jf/J. " . A/!~.~ .)~' .' 1.Mt,;9 TliI".

..CO~lriel fO tli(f frii'3( Uen.$ifrlr,tc:01iI!1'Wa;:J,.j'(JI
tr11i~rilnhjri lUli/ilieltt:!ii;,,/lttIXf
.J: '", i
'" ",."
',,",' .',.,' Oz
APPRqV.D'
Title;-' , . ,
njr;':N~mii:
APPROVE
,Dy;___~
Nimif riile:
miillfJ ,hI! Offciill 'ComiiitR-e-o./
C'?fni'eu( Well rnl'go:.Nif:, 'iARc.IIl?~(M$~O:/T1
1,'(!ri1..nd,'r~'
APPROVE!).
e,M;~4g,
~!
l/lCI('ldCreditors '
API'ROVP
.%......d.::
M.Rh~ii:" ,'. '
.~.
deni' -
nd,'tko/-IDrr.fncPc?;eslQn.
sitjir.13
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XECUTION COPY
Trademarks and Trade Names
VliaiD t4 wliei oftly(30)days followi (1) upn completon of
th
bldout.orii'oftl Rciigiui;edDe\Oia~ J1inliildin as anjiry (ttles of when $Deh astsnd:i;VCtoiyweieat;, 'or
(u)~uI Sae .fthe remaining invCltoryof~_ReorgDtJis, th

irclii aDd -\Jdeme set folt on tloIit E. .
ReorPiZ Dobiors shall trfer 10 Jame:Rde (or his'd_esign) the

Trllde,ClalmsAnlilyals
Th'Firs Li_enStengCommitte. th ~-aOJ-m-th-~ilO Comtt

- WUI.agr. p~r 10 th6 heg ~ the' I?rsc~96~ Slitqont, (i)-Whch fied or'
scheICd ciii shilIbc ciiissif(,as l'rid~"CI il (ii) on aprm',

fotlei:zilia,iio'n of
Trade Clai. If~ p~8f.uiblet? 8g on ()
-Ccwt s.I:ItIV~ any dispuicsllt the Dilos Sta:eni.h.

Pr:lentClalin Agahisl
Holderaof Alowed Tnde elilfii
Dr~) ~i_ ,awnce oflh Dlosc;Stattt,he.tl,BiUy-
. holden Of-'loWodTi:dc ci8ims)JB.~tqC0~oi S47ioth

iextii;Itultig clari,frm.tfea~i~~'Qf-scla prer trfe
'Wo~ldJjlcsei;eraiiowc4 Trie ciii,
TJ,A~Oeb,lorsshi!1not-seto.ii~ld,prtioJ:.tnttto
,$tlniy Rng1neerig
:l,tlif~tbStai:Eigi~-LilgatljjS,~esoJY-~..~ilb:yudgnt. ,or.Il#i~in ll mai favQ!'bi~ 10 ii,Klrs~,M:'ad-'!ich

'ieIiiIr~a\ ~-ipi:vidC:for-CahGO.ns.9n1oba.~lly:th
~i.j6tors in'Sec LiQi:li9~ the-&Qrg:DClrs an
'tseii~ A8nt iiiingagein-gCid-ft.negotItolllJ"O.e tht,
th'StCndUD l:delS eiv cOsii:enii';ri~nt.o 5Qofth=

:vlu:fsuhr.~ti~nii to iletemUi_ ~;~ofp&ymeit of.aiy su,
~ijoi, ia h-tevett&e,Reo~):ieb~ta'ihSecoLict
pre!'WsUti_~tliirto~in~~tiQl_tb.~tbfti
(wi'dc:CO ofllc SeG L~AgoJUo.~ftbuo the
Datoo: September 25,'2009'
A'titi~e'tO ii po $e ll.DUt.orf.i,Qsi C,i:defi~. tl
l) _spliCyy'amoDg'the Reo De!Qa,ll ~Li Ag'et

a:ns~~~~to be istbutiHotsO fi~-~Oi:~ntl,cou.ifth
SCle\t.o;iig,LitiIlton) ....
AirRQ.VED
By~,
Nare;
;TiiJe:
:CoUJsi,Uorhe Fhlt tien sfe.cilJ :Oilliue.e;wuli
authoriy .tom-eacn oft!Jf!1lenb_ernhe(lff
,APPROVE
BY.
:Tiiie;~Yi
c't?iml to' WeOs,Ftio~ N.A..; os Ag7i Jor-tI 8ei(
Nm
ll. :Nme:
LienbmfJer --"." -, - --
oTJIe: . eJlee.:(Jf 1elt",1leOfri!

Uiecd'Crfidn '
APPROvD
'By:
APPROVED'
:By;,
N'l1;)aies:M:RlOde8
'Tiile..Prdem
.fh:Rj~es ntiiea
-82217v.13
Nam: Jam M. R.
ljeb/o,1''onilD~~il)r:"in~P~l7;
lti:- PjeslJt. ,
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EXECUTION COPY
Triid.,marks and TndeNameJ
1lheeacrorthny(30)dayifoUowing: (i)lipoDcoinpleionoftli
b dQulofiiofthcReorganieDeOT'honiiJdiasetan
(i)buSaleofUiereining.inventoryorthR.rg~De(oi:.ib
, ed Deioi shal rrfeTloJam Rhod (or his dcenee) ~ E" tory(remlesofwbSIhlltsandbivclitoWUCiicqoired,or
tideiiilrsetforlcnA'~hmcnE.
,
Triidc Claims
AiIiIIYs5
'l Firat Lien Steri Comoie th Detors 8Itltb Cretoll Co~jite, wUag priorto th bi:ngOl lIDisc Statet" (0 whch filed or
sceded cls shall be clasfi as Tmlo ClililI an(ii)on i procdiu
C ll ielve any disutes :a the Dilosur Statcen heug.
o~ij)abin~Qf~DjsosurStlteCDlli..thBl\knpic
PrererenceClidsAiiafn5t lioldersorAUowcdTrndeCJalmJ
StimfeyEngieerllig
ref ih tCilicilon ofTmlcCl. l(th pa ll u.bc to iion (i)

o Rcize Dctom.$lnol seek 10 avoldprcplion Itf~ 10 Ofiillowed TraCliiim linda Batcy Coe seon"57 to me
-eil tln:lig clai from me avoidance of su. prerlllrrer
.Wld h'kwlse be iiaUo_we TracClaim.
'In evttho Slaley Enioee lJilgon Is rC:I~ ci\her by judgit
at ui~ti'maerfavorabletoihReiiDelldSieh
t Julio1\dotllprdeforca~heosleiiio.'tobe_r.vebyl1
~~igiiieDebloriiiSCCLi::IlLeih'~ZcDcblorii
~ Se Iiet Agent shall cu&a&c'Ii go faith 0e11l 10 en thi
thSe~eiLeerl'lv"oonsldertlon,cqIl~l-50%flblt
-co iderntiIL Inthl)e:tihRebganDciiiicHheSeiidLier
~', ,r&?rolutiii.. lodete.iitltingo~pa ~ tohn ~~h
, .tsWl!su_littheJ1iO~iniIg:ilf~Withi'-slth1O be 1iCvYllgthRci=fDebIODimth~IJCl_AgIl't '(i lbe'wsofth.SLicAgeitlObe~lJ1iftJlIe ci- .de:lioiilobcdiSbiloIIiSedLienLe.QJa.tortbe
-A 'Iar_e,uiiablc 10 IIgree OI th llUOI or fOO of~ cndemon, ih
Nnmii:
'F_ i By: I
D:iled:-smlc~r:i5.:iOIl
,
I
5 -e _En in liti ion
, ,
~;,' ,,;~').v -'f.. 9 iiL 4M?

COUlIS~l io flU! Fin Lt ~lt~ng,~D1iifdlil', wiln.
miflwrity frm ClU/i Oflhc1/iibces t1trf

, . ,
APPROVED
'n',
Coinef ro Wells Fwgo, N..A..-asAgnff~lheSe(:ri
AP~~ ," By . '''it ': llt1e;~\y\"".~-~

Caimtf fame Ojff Coinr/t~of
Name: =r;f,. ~~~?_i.o.-i~

UTlreJOei/iDl"
Lf.mI.enJriri -
r
,
A'PPROVJW
By:
Name;
AlROVE
Title:Presidct
JiieiM.Rhcs
iRhOlesEriiie
82OD217v.13
Ni:Ji!oiM.RI.e5 TitPr1 Defof' on Deiors.'j.Poses~iofl

7
By.
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EXECUTION COPY
A CHMENT A - RHODES ENTITlE
Jnmes M. Rhodes
Glynda Rhodes
,
John Rhodes
I
James M. Rhodes yoasiy Tru I L

James M. Rhodes Dyna.~fy Trust 11
JMR Children's Irrvocable Educaiional rut

Truckee Sprig~ Holdings, Inc.
Sedam Holdings LLC

Gypsum Resurce, LLC
TulareSpringsHoJdings.rnc.
Escaante-Zion Inveslmenls. LL
BHrro!
Hanony Homes, lie
Tock,LP
Tapemea, LP
Josbua Choya, LLC
American Land Management, LLC
Souih Dakota Conservancy, lie
Meridian land Compay, LtC
Yuca Lad Company, LtC

Sagebrush Entei:rise, Inc.
IUdes Ranch, LtC
Westw Crossing, LtC

Pinacle Equipment RentaL. LLe
De.~rt Communties JiiC.
Spiri' Undergound, Ltc
8200277
v.
13
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EXECUTION COPY
Tropicana DUriligo Investncnlslnc.
Troicana Durango. Ltd. J
Dirt Invesimenis. LLC

Underground Technologies, J.LC
South Dakota Aggregate Ild Eriginerin ,LiC
Freedom Underground, LiC
leroTnit
Canberra HOldings, LLC
Custom Quiilily Homei. LLC

Rhodes Ranch Golf, Inc.
ID Interior Design, lLC
fJ00277v.13
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EXECUTION COPY
ATTACHMENT B
I. The followiog dislributions
re made and peilled pur:iuanl 10 lemis ofCredil Agreement:
Dale 4117/200
411712007
I
mount
2.705
$ 07.295
$ 6,939
DistribullolJ Comments
Heritage ~ Sedora
Heriiage-? Sagebrush
5/4/2007
5/412007
Hertage ~ Sedora
$43,061
S .750,000
Herillge 7 Sagebrush
TOTAL
2. TrasaclionswiihSpirlUn dfround and Freom Undergund (as sel fonb below);
(AlTACHEDJ
8200277v.13
10
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Case 09-14814-lbr
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Case 09-14814-lbr
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EXECUTION COPY
ATIACIIMENTC
J. The lenders would form a new lily ("Neww'. Newco would be either l' corpration or a limiied
liability company. The Fil1t Lien loans Quid he deemed contributed to Newco.
2. Newco would purchas all of interels in Hertage from iis members ror $10.00.
the as sellng ''piueihip interels". puises (which would include a Iimiied liability campan ,the seller ar treatedinterests of a parerhip for laxOn the other hiid, iJe buyer is deemed 10 be buying 1 assets oftheparmenhip. As a relL frm the Hertage members' persective they would be trted as sell g nil ofihe iiileiesl~ in Hertage. Newco would be traled for federa
iicome faX purpses as pUrcsiig the 99 0 parterip inlerets in each orlhe lim.ted partenips held by Heritage
3. Revenue Ruling 99-6 provides i t on a sale orall of
and the i % parership interet held by T ckee Spring.t. Furt, asming that ihe general partDe of eah ofihe
limiled Parer.ships in turn sells its gener I piihi interests 10 NewCQ, Newco would be deemed to have owned
the rel estate owned by ihe liiled pa hips (since each orlbe paerhips would have leninate for federal income lax purp). At that point New would own all ofibe rel estate.
4. For federal income lax purpse, each Heritage membe would have a gain equal 10 th exce of the liabilities ofHerlage allocble to sueh m ber (which the tti.ctjon relieves lbememberot) minus the membe's
lax ba.~is iii its Hertage interet. This gai would be treaied as long-term capilal gain (exceptIo the extent Hertage
liolds, directly or indiretly, asts subject 10 Seciion 751 orlbe Code, generly inventory or reivables ari1'ilig from the sale ofinventory).
5. Therefore, conlemporaeous wi or subsequenllO NcW'o's purchae of iniere.--s, 11le Rhode.~ Companies, LLC - e general par oreach of
the Heritage membership
Batcave,1.; Overow, LP; Wallboar, r. ; and Chkle,!., -.sll sell its geiial paeiip inlerest insuch
lick, LP; Glyn, LP; Jackkife, LP; l.;
entiiies 10 Neweo for $1.00. Alternvely the membehip interes in The Rhodes Companies, LLC may be
acquire frm ilS sole membe_ SagebfiiEntC1rise Inc. _ in oonsiderntioD for releae ofiis obligations under the First Lien Lender Claims.
6. New's mi:mbc miiy acre to niinue Neweo as an LLC, fie a check thc box e1elion effective the day
after ibe Effective Date 10 ttl Newco as corporation for ta purposes, or conver into a corporation as ofihe day
nfierthe liffcetive
Dille.
I the Heritage memt~hiP nterels an Newco wiU rert the sale and purhase of
7. The holders of
Heritage memberhip inleresls in accordan I C with Revue Ruling 99-6, 1999-1 CB 432.
the
I i I
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I i
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i
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EXECUTION COPY
LTIACHMENT D -ARIZONA
I
RHODES ARIZONA PROPE TIES
RHODES ARIZONA PROPERTIES

RHODES ARIZONA PROPERTIES
C
LC LC
30.24-115
306-24-116 306-63-017
1825 S AZEC
20.25 RD 20.24 1807 AZEC RD 7.35 4536 W DORA DR
Model Home
RHODES ARIZONA PROPERTIES RHODES ARIZONA PROPERTIES
Model Home Model Home
LC
3063-018
306-2-GSA
6.83 4528 W DORA DR

1156 S AZEC
Model Home
Dirt Dirt
RHODES ARIZONA PROPERTIES LiLC
19.92
RD
RHODES ARIZONA PROPERTIES LjLC
3062-001
Total Acreage
40 RD
114.59
1094 S AZEC
Inside Pravada
numbers: I
Rhodes Arizona Pro rUes
Pravada and aU part of Pravada lyin withIn Sectons 2, 3, 4, 9 and 10, all
West of the Gila and San River Base nd Meririan. Mohave County, Arizona and withIn 20 North, Range 18 In Townhip the following APN
215-1-116 215-1-113 215-1-114

215-1-111
Partially
Graded Graded
Rhodes Arona Pro ertes

Rhodes Arizona Pro erts
Partlly
Parally
Graded
Partially
Rhodes Arzona Pro es
Total Acreage 1,306t
Graded
Arizona ersonal Propert

Computers
HP 5150
HP 5150 HP 5150
Serial Number
2UA603OJ6N
HP WX4400
MXl615027R 2UA6030J57
2UA7060BF7 2UA1060BHV 2UA54215GL GZOGR61
HP WX44
HP XW4200
Dell
Laptops
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EXECUTION COPY
HPNX6125 HPNX9600
CND54B03L Y
CNF6071GBR
Prinlers HPlaser Jet 4250

HPLaser Jel 4101
HPLaser Jet4100
CNBXD0656 USlGY26030
USLGV42771
HPlaser Jet 1320 HP color laser Jet 2600 HP color laser Jet 2804 HP cofor Laser Jet 5550
HPofricejet6310
HP Pliolosmart 05160 Lexmark 7001-001 Lexmark 7001-001
Super G3 Prlnler-Scanner
CNHC820168 CNGC64C1KC JPBG532058 JPDC4D2072 CN639BGOYK MY67G110DC a90CSTB 890CD3N J8141101150

i i , , i
I
Fax Machines
2 HPoffcejels 7310
6 or ihe printers and the fax machinef have copier capabilties
Miscllaneous EQuIpment I
, ,
De/I Powr Edge Server 2850 I HP Design Jet lD55CM Plus PJoiier~ 10 Battery Surge boxes and 10 powe Slrps 11 -computer monitors 20. flat scree
85172579422
4 calculators 14 telephone owned by Rhodes j
2 - drafting tables I
Ofce Furniture I
3 - work tables with open shelves for )Ians
12 -file cabinets -j
1 - 3 drawer 36 x 20
2.Sdrawer63x18 i
7-4dmwer18x48
2 - 4 drawer 20-x 48 I
2 . 3 sheff wood bookcases 4 - 4 shelf bookcases: (2) metal (2) WiOd
1 hanging fie for plans
1 - metal storage cabinet. 2doo. 4 selves 2- wooden storage cabinets 2-door. 1 helf
11-desks: (1) melal (10)
12. desk chaIrs
woo I
12 - guest chirs .
5 - stacking chaIrs 1 - 4 x 6 (olaling white board
1 - garbage can
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10 - wasle baskets
3 - G foollabres
2 - melal slorage shelves- dimenSiOrS 5'h x 3'wx 18.S"d
2 - plastic storage shelves- dimensions 6'h x 3'W x 18" d
Executa "tracts and Une Irld L a5es

To be provided by Plan Supplement ale but shall include, but not
be
limited to all development agreemen s and subcontractor
agreements
Trademarks and Tradenames
Rhodes Arizona Properlies
Golden Valley Ranch j

Pravada
Rhodes Arizona
Infanaibles
All archifeclural and engineering dra ngs, plus wok product associated with Pravada and Golden Valley RanFh. An agreements with municipalities anl: utilites With respect to Praada and Gorden Valley Ranch. Arizona general contractor's license. i
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EXECUTION COPY
I
A lTACHMENT E - TRENAMEStRAEMARS
All
RlodesLCldllome!
Rhodes Homes
R(logo)
R (logo) RJrodes Homes (OWJed by Rhd Homes. Inc)
RhodeMlIster
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Exhibit 2
Neii- First Lien Notes Term Sheet
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EXIlIIT 2
Ternis and Conditions e'Tcrm Sheet") for $50 Mjllon New 'First Lien Notes ("New First Lien Notes")
Sununary of
TERMS
Borrowers:
Newco, Heritage Land Company, Li.C; The Rhodes Companies, LLC; Rhodes
Ranch General Pai1ncrship; Tick, Ll; Glynda, LP; Chalkline, Ll; Batcave, LP;
Jackknife, LP; Wallboard, LP; Overt1ow, LP; Rhodes Ranch Golf and Country
Club; Tuscuny Acquisitions, LL('; Tuscany Acquisitions II, LLC; Tuscany Acquisitions JI, LLC; Tuscany Acquisiiions iv, LLC; Parcel 20 LLC; Rhodes
Design and Development Corp.; C&J Holdings, Inc.; Rhodes Realty, Inc.; Jarupa
LLC; Elkhorn In\'e::;tments, Inc.; Rhodes Homes Arzona, LLC; Rhodes Arizona
Properties, LLC; Tribes Holdings i.LC; Six. Feathers Holdings, LLC; Elkhom Pai1ners, A Nevada Limited Parnership; Brnvo Inc.; Gung-Ho Concrete, LLC; Geronimo Plumbing, LLC; Apache Fr31ning, LLC; Tuscany Golf Country Club, LLC; and Pinnacle Grading, LtC, eaeh as may be reorganized pursuant to a joint plan of reorganization to be proposed by the First Lien Slecring Committee.
New First Lien Notes:
$50 million in first lien secured notes. Once repaid, the New Firs Lien Noles
may not be reborrowed.
Giiarantoi.s:
Agent:
Lt'nders:
All of
the Borrowers.
To be deteimiiicd ("Agent").
11\c lenders ("Lenders"') under the tirsl lien Credit Agreement dated as of November 21, 2005 (as may have been amended from time 10 time) among
Hertage Lund Company, LLC, The Rhodes Companies, LtC, and Rhodes Raneh
General Partnership, as the Borrowers, the Lenden Listed Therein as Lenders, and Credit Suisse, Cayman Islands Branch, af Administrative Agent, Collateral Agent, Syndication Agent, Sole Bookrunner and Sok: Lead Arranger, nod the
other loan dOcuments (as defined in the First Lien Credit Agreeml."Jt) (as may
have been amended from time to time, the "Existing Credit Facilty").
Maturity Date:
The date that is the sixth aniversary onhe Effective Date ("Maturty Datc").
To refinance a portion of the Exisiing Credit Facility and satisfy a portion of the Lenders' claims under the Existing Credit Facility.
Purpose:
Security:
The New First Lien Notes and all guarantees thereof wil be secured by first
priority pcrfected liens on substantially all exisling and after acquired property of
the Borrowers.
Illler('.~t Rate:
"psh Pay Rate": L1BOR plus 2.00% per annum; or
WEST
6311146vl1
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'.l)LK Rat;": L1BOR plus 5,00% per annum,
Iiiterest Payments; Interest on (he New First Lien Notes shall be payable in Cash quarterly in arrearrs at the Csh pay rate of L1BOR +2%; provided that if the average of the
Reorganizt:d Debtors' unrestricted consolidated Cash as of the last day of each of
the two immediately preceding consecuiive quarter is Jess than $15 million or ir the unrestricted consolidated Cash as of the last day of the immediately preceding quarter is less than 515 millon (collectively, the "Cash Interest Threshold"), then
the ReorgilOized Debtors shall have the option to cipitalize the amount of interest
due in exces of L1ROR for the immediately preceding quarter, with such
..apitalized interest to be capitalized on such inti.:re.'t payment date, and all such
capilalizcd interest shall be due on the next interest pa)1nent date to the extent the Cash Interest Threshold is met after giving eircet to the payment of interest and capiialized inte~t or ai; the Reorgani7.ed Debtors otherwise elect All capitalized interest not previously paid shall be paid on the Maturity Date. LlBOR shall bc subject 10 a cap of2%.
\andlllOr)'
Prcp:iynients:
Mamlaiory prepayments of principal shall be made by the Reorganized Debtors if the avcrage of the Reorganized Debtors. unrestricted consolidated Cash as of the last day of each of the two immediately preceding consecuiivc quarters is greater
than $15 millon or iftlic unrestricted consolidated Cash as of the last day of
immcJiatcly preceding quarter is grcalcr than $15 milion, in cach case, attcr the paymeni of interest due on the New First Lien Notes,
the
Covenants:
this type, induding but nor limited 10 financial covenants anit covenants limiting other indebtedness,
Customary affrmativc and negative covenants tor facilities of
off-balance sheet financing, liens, in..estments, guaranties, restricted junior

payments (dividends, redemptions, and pa)ments on subordinated debt), mergers
and acquisitions, sales of assets, capital expenditures, transactions with atTliates business, subject to exceptions and baskets to be mutually agreed by the parties.
and conduct of
Scniot'Revolving Loan iind Lettcr of

C.'edit Facility:
The New First Lien NoLes shall contain provisions pennining the Borrowers to
incur up to $10 millon in secured indcbtcdness senior to the New First Lien
Notes in the fonn of a working capital rcvolving loan and letter of credit tcility, subject to the satisfaction of the lenns and conditions set trth in the New First Lien Notes Documentation.
Evcnts of Dcf:iult:
Customar for tciliLie~ of this type, including but not limited to failure to make
payments when due, defaults under other agreements or instruments of

indebtedness, noncompliance with cov(:nants, breaches of representations and
wan'antics, bankruptcy, judgments, invalidity of guar;nties, iinpainncnt of
security interests, and change of
ownership.
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Othcl Terms:
The Ni;W first lien Notes shall include withom limitation 3 default rate otintercst, optional, inrcased osls or reduced rctums, conditions preccent to closing; representations and wamlOtics, assigiinenlSfpanicipations, amendment, waiver,
this I)-Ve.
Jnel requirl.-d lender provisions, in each case, customary tor Hicililies of
Documentation:
The Nev.,. First Lien Notes Documentation shall be in ann and substance
acceptable to ihe First Lien Steering Committee.
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Exhibit B
Debtoi-s' Oi-ganizational Chai-t
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Exhibit C
Current Cash Collateral Budget
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EXHIBITD
Going Concern Analysis
The First Lien Steering Committee believes that the Plan meets the feasibility requirement set forth in section 1129(allii) of the Bankruptcy Code, as confirmation is not likely to be followed by liquidation or
the need for further financial reorganization of the Debtors or any successor under the Plan. In connection with the development of the Plan and for the purposes of determining whether the Plan satisfies this feasibility standard, the First Lien Steering Committee analyzed the Debtors' abilty to satisfy their financial obligations while maintaining sufficient liquidity and capital resources. The First Lien Steering Committee, through its financial advisor, Winchester Carlisle Partners ("WCP"), and its valuation consultant. Robert Charles Lesser & Company ("RCLCO"), developed a business plan and prepared financial projections (the "Proiections") for the fiscal years 2010 to 2014 (the "Proection
Period"). The Going Concern Analysis relies principally upon the application of methodology (as further explained below), to arrive at a total enterprise value range of
the discounted cash flow
the Reorganized
Debtors as of January 1, 2010, of $89.2 milion to $111.5 millon.
The Debtors do not. as a matter of course, publish their business plans or strategies, projections or anticipated financial position. Accordingly, the First Lien Steering Committee does not anticipate that the Debtors wil, and disclaims any obligation to, furnish updated business plans or projections to
Holders of Claims or other parties in interest after the Confirmation Date, or to include such information
in documents required to be filed with any governmental or regulatory entity or otherwise make such information public.
In connection with the development of the Plan, the Projections were prepared by
the First Lien
Steering Committee to present the anticipated impact of the Plan. The Projections assume that the Plan wil be implemented in accordance with its stated terms. The Projections are based on forecasts of key
economic variables and may be significantly impacted by, among other
factors, changes in the
competitive environment, regulatory changes and/or a variety of other factors, including those factors
listed in the Plan and Disclosure Statement. Accordingly, the estimates and assumptions underlying the Projections are inherently uncertain and are subject to significant business, economic and competitive uncertainties. Therefore, such Projections, estimates and assumptions are not necessarily indicative of current values or future performance, which may be significantly less or more favorable than set forth herein. The Projections included herein were prepared in September 2009. The First lien Steering
Committee and its professionals are unaware of any circumstances as of the date of
this Disclosure
Statement that would require the re-forecasting of the Projections due to a material change in the Debtors' prospects.
The Projections consist of the following unaudited pro forma financial statements: a balance sheet (the "Opening Balance Sheet") projected as of an assumed Effective Date of January 1, 2010; a projected balance sheet (the "Balance Sheet") as of each year end from December 31,2010 through December 31, 2014; a projected income statement (the "Income Statement") for January I, 2010 through December 31,2014; and a projected cash flow statement (the "Cash Flow Statement") for January 1, 2010 through December 31,2014. The Projections should be read in conjunction with the significant assumptions and
qualifications set forth in the notes below, and elsewhere in the Disclosure Statement, which comprise
an integral part of the Projections and should be referenced in connection with any review of the
Projections.
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THE FIRST LIEN STEERING COMMITTEE PREPARED THE PROJECTIONS WITH THE ASSISTANCE OF ITS PROFESSIONALS. THE FIRST LIEN STEERING COMMITTEE DID NOT PREPARE SUCH PROJECTIONS TO COMPLY, OR ALLOW THE DEBTORS TO COMPLY, WITH THE GUIDELINES FOR PROSPECTIVE FINANCIAL STATEMENTS PUBLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS OR THE RULES AND REGULATIONS OF THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION. THE DEBTORS' INDEPENDENT ACCOUNTANTS HAVE NEITHER EXAMINED NOR COMPILED THE PROJECTIONS THAT ACCOMPANYTHE DISCLOSURE STATEMENT AND, ACCORDINGLY, DO NOT EXPRESS ANY OPINION OR ANY OTHER FORM OF ASSURANCE WITH RESPECT TO THE PROJECTIONS, ASSUME NO RESPONSIBILITY FOR THE PROJECTIONS, AND DISCLAIM ANY ASSOCIATION WITH THE PROJECTIONS. EXCEPT FOR PURPOSES OF THE DiSClOSURE STATEMENT, THE DEBTORS 00 NOT PUBliSH PROJECTIONS
OF THEIR ANTICIPATED FINANCIAL POSITON OR RESULTS OF OPERATIONS. THE PROJECTIONS
ARE
QUAliFIED IN THEIR ENTIRETY BYTHE DESCRIPTION THEREOF CONTAINED IN ARTiClE V OF THE DISClOSURE STATEMENT.
MOREOVER, THE PROJECTIONS CONTAIN CERTAIN STATEMENTS THAT ARE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE STATEMENTS ARE SUBJECT TO A NUMBER OF ASSUMPTIONS, RISKS, AND UNCERTAINTIES, MANY OF WHICH ARE BEYOND THE CONTROl OF THE DEBTORS AND THE FIRST LIEN STEERING COMMITTEE, INClUDING THE CONSUMMATION AND IMPLEMENTATION OF THE PLAN, THE CONTINUING AVAILABILITY OF SUFFICIENT BORROWING CAPACITY OR OTHER FINANCING TO FUND OPERATIONS, ACHIEVING OPERATING EFFICIENCIES, COMMODITY PRICE FLUCTUATIONS, CURRENCY EXCHANGE RATE FLUCTUATIONS, MAINTENANCE OF GOOD EMPLOYEE RELATIONS, EXISTING AND FUTURE GOVERNMENTAL REGULATIONS AND ACTIONS OF GOVERNMENT BODIES, NATURAL DISASTERS AND UNUSUAL WEATHER CONDITIONS, ACTS OF TERRORISM OR WAR, INDUSTRY-SPECIFIC RISK FACTORS (AS DETAILED IN ARTICLE VI OF THE DISClOSURE STATEMENT ENTITED "CERTAIN FACTORS TO BE CONSIDERED PRIOR TO VOTING"). AND OTHER MARKET AND COMPETITIVE CONDITIONS. HOlDERS OF CLAIMS ARE CAUTIONED THAT THE FORWARD-LOOKING STATEMENTS SPEAK AS OF THE DATE MADE AND ARE NOT GUARANTEES OF FUTURE PERFORMANCE. ACTUAL RESULTS OR DEVELOPMENTS MAY DIFFER MATERIALLY FROM THE EXPECTATIONS EXPRESSED OR IMPLIED IN THE FORWARD-LOOKING STATEMENTS. AND THE DEBTORS UNDERTAKE NO OBLIGATION TO UPDATE ANY SUCH STATEMENTS.
SPECIFICITY, ARE NECESSARILY BASED ON A VARIETY OF ESTIMATES AND ASSUMPTIONS WHICH, THOUGH CONSIDERED REASONABLE BYTHE FIRST LIEN STEERING COMMITTEE, MAY NOT BE REALIZED AND ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC, COMPETITIVE, INDUSTRY, REGULATORY, MARKET, AND FINANCIAL UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE REORGANIZED DEBTORS' CONTROL. THE FIRST LIEN STEERING COMMITTEE CAUTIONS THAT NO REPRESENTATIONS CAN BE MADE OR ARE MADE AS TO THE ACCURACY OF THE PROJECTIONS OR TO THE REORGANIZED DEBTORS' ABILITY TO ACHIEVE THE PROJECTED RESULTS. SOME ASSUMPTIONS INEVITABLY WILL BE INCORRECT. MOREOVER, VENTS AND CIRCUMSTANCES OCCURRING SUBSEQUENT TO THE DATE ON WHICH THE FIRST LIEN STEERING COMMITTEE PREPARED THESE PROJECTIONS MAY BE DIFFERENT FROM THOSE ASSUMED, OR, ALTERNATIVElY, MAY HAVE BEEN UNANTICIPATED, AND THUS THE OCCURRENCE OF THESE EVENTS MAY AFFECT FINANCIAL RESULTS IN A MATERIALLY ADVERSE OR MATERIALLY BENEFICIAL MANNER. THE FIRST LIEN STEERING COMMITTEE, DEBTORS AND REORGANIZED DEBTORS, AS APPLICABLE, DO NOT INTEND AND UNDERTAKE NO OBLIGATION TO UPDATE OR OTHERWISE REVISE THE PROJECTIONS TO REflECT EVENTS OR CIRCUMSTANCES EXISTING OR ARISING AFTER THE DATE THE
THE PROJECTIONS, WHILE PRESENTED WITH NUMERICAL DISCLOSURE STATEMENT IS INITALLY FILED OR TO REflECT THE OCCURRENCE OF UNANTICIPATED EVENTS. THEREFORE, THE PROJECTIONS MAY NOT BE RElED UPON AS A GUARANTY OR OTHER
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ASSURANCE OF THE ACTUAL RESULTS THAT WILL OCCUR. IN DECIDING WHETHER TO VOTE TO ACCEPT OR REJECT THE PLAN, HOLDERS OF CLAIMS ENTITED TO VOTE ON THE PLAN MUST MAKE THEIR OWN DETERMINATIONS AS TO THE REASONABLENESS OF SUCH ASSUMPTIONS AND THE RElABILITY OF THE PROJECTIONS AND SHOULD CONSULT WITH THEIR OWN ADVISORS.
.., --- .
;ASSETS
Pro Forma Balance Sheet
..
, Esriied'
.' '~T-Prl_:-~H~cii';'iiO
_ _j_ ______t~2131lO9)
".r.,_
i I
_t..
EffecllveDale
"~E_cin.ting_-
_~J~-~~:-~~~ , I ProForma
)___~!!~"Sheel-i-.-i i Rl_l?~,,!lfZed__1
, SarancoShcct .,!.
I ,
....A_i,il.~.e.n,~._ ,..~ ,___..!?~~_r;___ i
'CasI --- --------, Accounts receiv.ble--et_ _ _____ _____ : Due-'romreiiiied-:ia1Ies
-~J
.,"
1,625.000
823,099i
16ii,368 -S7ii;697 ___1!i2,~~,74!.i
(a1j ---_:2,~,:099 tj'?,36iiiD~)_I:__'_

(678,6971:
'---inventorios ' Lari-tiii-o-rlnvostm-cnl
Propcrt,planl,andeqUlpmenl-:net
Deposltsandolho'osiSncl'- ,T'rAL. ASSETS
, '-j_.--
;-
13,764,478:
(53'7'!5"9f(d)j'__ -__ _10~,70381 73,488,575 (dl 87,25,053
--j,7,997: -9'-5i;~3;
191,168,449!
--_ . -_ - --. -3,707.9971

16,~01,0391 (e)l. __ 3-,~,0241
I~ ,
14,228,362; I 205,396,8111
:uAsiiiTlES
'---Nles p"y;o~.;:~'Ji:II~(;~gO
.......----,1.
! i
,I,
(c) ,
L_______!
--....-.,....,-.---1
.. .,~~Ies.pii_ya_ll!!~~_dn Siil_~_
.. ~;_S!8)W6j--'
305,752,22;
Int..rostrale hedge -CredilSulss

Noi:,,'-p~y;obio~,;;::tiec-i..' dale---'--Cs'payabie. New Flrsien ---.. ,
(7;86a.,~J.; II) _n_~. _____ .____j (JOS,752,225):Ir! _ _______________.!
--:_:~2~!.19~34(1. -.J~-~,~,~!!,.~~)j.lf..i--.--._.~-. ,
-- -Accounts ;:ayaiieand ac:riei:llwiies-'-- : Due 10 r'lied'pa"rts' .._- .:~:::.=~" _:'=-.:~~.:_

,_ _-t:l.-~~mcr~c~g-i.-_"'---
-_._.~,~:~t10,753,0101
~~~ =:~:~~~Elbt=-~:::::::J
,,_..___"_J1'!J.!P,_a~~ lC)T--'--'~-23;:i9i
,''---1--
'-"-~i,.~9.J._' ,
...-. -- -_. "T" 1

(361,148.98311 53,907,9251
i TOTAC'-~A!!iQfi_ES . .__: 415,056908 :

l:r~T~L L.1_~!'lll.inES AND_E.a_tllry._ ..... 191.168449
NOTES TO PRO FORMA PROJECTED BALANCE SHEET
:Minorltyp-artars --"---+~~--.-~'-69ii-i--'
:~.~i!y .._~_______..._,_...:'--"--: -(2i;i'2,1-49Ir"
"_-:..~-i4'-69Q_~~iJ----------l
~ I !
375,618.03511111 151,48,881 14,228,362; 20,39,811:
(al Reflects cash disbursements made pursuant to the Plan at dosing and includes $400,000 payment on emergence to Holders of First lien lender Claims consistent with the terms of the Plan (with additional payments anticipated in the amount 0($220,000 per quarter for the next five quarters), $600,000 payment on emergence to Secured Creditors holding Other5ecured
Claims, and $3.5 millon to be received from the Rhodes Entities consistent with the terms of the
Mediation Settement. Additionally. this balance reflects $875,000 paid to satisfy Administrative
and Priority Claims related to the Chapter 11 cases.
(b) Reflects the elimination of remaining miscellaneous accounts receivable balances determined to be uncollectible. No accounts receivable balances were assumed going forward as the nature of the Reorganized Debtors' business wil be exclusively homebuilding and wil generate only short term (typically less than 5 days) receivables from title companies on home closings. As such,
these funds were included in cash in future years.
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(c) Reflects the elimination of all pre.Erfective Date related party receivable and payable balances
(intercompany). These amounts may be disputed by the Reorganized Debtors, but solely for
purposes ofthis analysis are presumed to have been paid.
(d) Reflects the "fresh start" accounting adjustment to revalue the inventory assets to market value
at the Effective Date.
Ie) Represents adjustments to the Deposits and Other Assets to (1) eliminate $5.7 milion in unamortized loan fees on the pre-Effective Date debt that is being restructured, and (2)
eliminate $645,000 in capitalized costs on land held for investment, which is being revalued at the Effective Date and included in Inventory (see d).
(f) This amount reflects restructuring and/or forgiveness of debt of (i) $305.8 milion of first lien debt, (ii) $20.2 milion interest rate hedge on first lien debt, and (iii) $72.9 milion of second lien
debt.
(g) Repr.esents the New First Lien Notes of $50 milion.
(h) Reflects the adjustment to reduce warranty accrual to $360,000 based on recent historical
warranty expenses and number of homes under warranty at the Effective Date.
Ii) Reflects the net effect of
the above changes, which are adjustments to the equity value of the
Reorganized Dehtors.
PROJECTIONS
The First lien Steering Committee prepared the Projections for the Projection Period. The Projections are based on a number of assumptions made by the First lien Steering Committee with respect to the
future performance of the Reorganized Debtors' operations. Although the First lien Steering Committee has prepared the Projections in good faith and believes the assumptions to be reasonable, it is
important to note that the First lien Steering Committee can provide no assurance that such
assumptions wil be realized. As described in detail in the Disclosure Statement, a variety of risk factors could affect the Reorganized Debtors' financial results and must be considered. The Projections should
be reviewed in conjunction with a review of these assumptions, including the qualifications and footnotes set forth herein.
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~~~oi!C.led Balance Sheet

2010
; i
:iii"
Pi;'-n
-------io-ii-
'pi.n
~1
,
'':;i~--
'--'---pi~n-
'201:i
--_.....----1 2014 ,
Pi~~,----l
-Ass8's
, e:..ii
Invontorlu.ndi.nii
Pr_~~)i: ~j~~i: ,,;;ii;_u~;~ii~n.'
-',62&,434 IBS,731,2M
1(;-;00,000:
.176)'8_1,78.6"
18,000,000:
-18,OO,OOOi
__ ;4,':0,8&5'-
-- 1 86,J.,':O'
---"ii91l,liazl
"f~~:9'~'-8-'
2,72~~1~:i:_
o."".iis.~dDlh~r._i.~1 --i'tAlASSETS
;LIABILITES
; 'N"io.p.y.~i. :.wl'I.sU.ii
---!---,
.. - ~(;-;i;,:Ci' __4,~_ij;~~~
-, -',-- .. '~-i
~A~:_'-36F
1'4,222,4231
~!~!!'-,0!2
___i-,470,_~!,_
201,542,724'
176,702,7oU
, !
1S4,151,9571 173,757,7091
"1~- 6;i:i,loB
-I '~'---4.i2,''4
--48.'2,672!
--~io:iii4;;s6
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7,074,0921
I
--~ceounis I'~~,;b!!__~n'-.-c;;_.;:ei-if.~iiiu'-. _
---;i;749,1G'i:-,
~Elomord.p_o51io
TOT~'-LIAeILlTIES
----:2_';i'O8_'
--it6,)liT
---Tii(;i5" ::.~=:~~:~~~:~.~H:~~: _ ~,f3~:i 565,7411 SU,&45! ___~4i,6ii9

,
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52,768,111: 33,'29,262
0!:41_,43!~~~,_ __ ..~:7_3,~~S.i
4,095,839
:ii~~ii-~:
!tT.ACi:iABLiLiTiESA,iiEQlTY-
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201,542,724
_'!5l-,87.8Si;i,
---~,!;!!n
173,787,709
194,222,4231 178,702.48
1&4,151,957i
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:!,r~J!,_c(,,_dSt;lcrnontofC~shFro'o
.J
------
i--
::il0_
PI."
-ioi,-----pi.;,-
- -- ,--- ---- -------------l~tlll~~~.,-!IlOM OPERAl1HGAGTIVIlES:_

_AiiUi;~l!!".O;eile ~~'-ni';i;~_".~i e;""l',~j_~::"_
-pr""
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---'--
,
-iiio..o.;--.-
-l~c:"~i.;"ei.mol1."Ii,,
_l~_"'d_"l."p'''''~''_D''_C~.lhE ___________
-1-"'J,~~i
_ ~11B.i' - -- -- !,~7~;~~~
'C".gu-In o-pi;''~"l.=iS~;-i~..ii~_'",
;;'":\i8,:
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,
~ii;;.i,-~,,;;ddi;.'!dJ ~:~',~.;"g '_~~';~e~_
B,05~'
"1",
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28.&94:S-i
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.CSHFiows:~~:Iif~&f1N:!lirTigs:_
N~l G~~_rd.i!~_..~i!_:!~,~~~~ii ~;:ii_,;I~~!:::,::.:.
-CAH FLoWS '--i,;ii;;.;.is------------- --
:------ --.
i(&,~2.!Ilj
(1,;iiis,;: ___iiBi_~.i( _ _i;_~_~~i;
fRO-FiiWl.AClIiici:
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J~iiym'0i~~".,!r U_"..e_u!~.i ~~.!_~~_
___N~_~_e_.""_F'~I~.~ (~!"di "Y_ n..~_1,,\1,,_.,vij."
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5,~n.~'
--:~~,:~~:-- - -!i-;6:i,43!
,
---,, _ ___ _____~~:i~1I_~ --l_S;g(,~ ___1S.DO~~_:-.....ii;:~;~1

15.oo.DO:
I5.OC,OOO:
i:S"-;&;d'ipi;i-.--
9.621.04 15.0000'
GG,;i9l;
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..J'_(~ _i=_orma Statemen~_(lfgperatjons
:1.
2010"
Plan
Homo CIO"!nO~__
'21l-'--pTi.-----'
'20;:--
Plan
,
'2"013Plan
'-20;4
P!~ri
":1
m
~B,!l~f;_
l,23~:~.;
,
175
i . -~--:44
I
itovo""u
:_s~_~o_s_:~n~"iiii~;;ii:
Salooorlon~
G,o'-roosond oii~-'iiolr.;,;on"os.
4-1;37il;&i 1__..6z~oii0~7j(--- _B:i8'~..~O 104.0i11.7171

_ "14,7e..G2!
. -~ . -:: . (" _~'_1,3~(~~L:: . '-8;;",,&10 ;-_....!.it~t
Conlroetuios . -. .
io:li_~~~:ii~u'Fs:
M72,e.9~ 8,732.154)
"I,
36.816.442;
49.85.8911
,,
1----~2.8--
~~:i___
.1
--- ... .- I
91.814.9is; 128.0115.118111
12,098,8241
,
:~~i~~.~~~~~t~n~:l~~~~j- ________
14,w)ii. ---"166'.i71-' ---27.64.0291 ii.9U,084

. . ..8,541,2601..... 11,238,6'O.. 18,&6ii:1I8' 18,3&6.920'
__Loni:.eo;'.ot,,,,~nvon_tol)__\!oo_mos).
C05or""ln_londdovolopmoni'- ----~c;f;"i',,:-i..,;d..-I' ..----.---.
41~1~9,91~
:2-'-;571,920
___::'-': 3'-8jtrr4J~.__-~ 4jj!;~H_-__j;~~l;~~_J:-~:=::!_;~.~~.J~i!T= --,;Sifi.2"g
,Sii-I~g::g;~:.."'l "nd_~~_rn!r;~o.ii;!.
O:ir_'!c_~tion.on_d.omonlutl",,--" .;___~~~_~. co~".ntl~.!~~'-=~-::.
: ~:~:~~:'-"'.-:~~~:~it~: .U~:~;;!-. ,'51.-i'8-j---_._. .... . .. _. ..., .. - . I~

1.4S5.2S4, 1,1i4,911 7,961,181,
4O,78l,696I 49,675.718' 67.085.4791
(3.912.155):
-3,1,99:0'08
11.111.1631'
;_ To~I~_o_S,,n~,,xpo,,~~._._.
__Q~,!nll_I!,CGmo Il-~..
216,1191 8.G13,34li
,
:i;.:;;m;i;;~p'on..
"---I;ni-xp,,;,s.' ..
J'~-fn~,,m:;~~o:;)
"T-'-' .._....,_.1__.___...1-....._--, .:'~,:I~~-3-l 1,3~4,1~1j ,,____~:Ir:4_;.

(1.84,411)1
3 .1139,184 1 12,0 14 ,369 ~
I,
'''21,213,300
13;0I,8I;.
116.463.2711
8.:1.12G. -----ii"AJ3
12.602.4-9
19.162,301,
12.682.114:;
-_..- 18,l~~
12,884.30i1
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KEY ASSUMPTIONS
A. General
1. Methodology: The Projections were developed based on inputs from the Debtors, WCP,
and RClCO. The Projections are based on assumptions and initiatives, including
expectations on market stabilization. The key drivers are: (1) average sales price; (2) average cost of construction; (3) average lot cost and; (4) annual home sales and
closings. These key drivers were utilized to forecast the operational plan reflected in the income statement, balance sheet, and statement of cash flows. Furthermore, a discounted cash flow ("DCF") methodology was utilized to arrive at a value for the
Debtors' real estate assets by discounting unlevered projected free cash flows to a net present value as of the Effective Date. Revenue is derived from the construction and sale of single family homes on all single family lots currently in inventory, as well as certain multi-family lots and commercial parcels where it was determine that single
family homes were the highest and best use. Pricing and sales velocity for these homes
were projected to recover from their currently depressed levels as determined by an

analysis of recent and historical sales data, to more sustainable levels of growth by
2011. Additional revenue is derived from the sale of certain land parcels at prices and
dates supportable by market conditions, as well as operation and sale of
the Tuscany
Golf Course and the Rhodes Ranch Golf Course.
A discount rate range of 20%-25% was used in the Going Concern Analysis, reflecting the
prevailing capital market requirements of similar transactions. Based on the methodologies described above and further review, discussions, considerations and assumptions, the value of the Debtors' real estate assets as of January 1, 2010 under a Going Concern analysis ranges from $89.2 milion to $111.5 millon with a midpoint of $99.6 milion.
2. Plan Consummation: The operating assumptions assume that the Plan will have an
Effective Date of January i, 2010.
3. Projected Subsidiaries: The Projections include the assets of all the Debtor entities. Pinnacle Grading, LLC and the entities under Tribes Holdings, LLC wil be phased out and operations ended by the Effective Date.
B. Projected Balance Sheets and Statements of Cash Flow
1. Cash: The PrOjections assume the Reorganized Debtors wil maintain a minimum cash
balance of$lS milion after debt service in 2011 and forward, in accordance with the
anticipated New First Lien Notes.
2. Working Capital: Capital expenditures for inventory were forecast based on the
assumptions for sales absorptions. Inventory days are projected to remain static
throughout the Projection Period.
3. Property, Plant, and Equipment: The equipment and fixed assets of the company are
forecast to be fully depreciated by the end of 2011. As the Debtors currently have
8
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excess PP&E for the go forward operation, it is not anticipated that any substantial purchases in the future wil be required.
4. Deposits and Other Assets: As insurance policies are renewed. premiums are prepaid
and amortized over the life of the policy periods.
S. Borrowing (Repayment) of Debt: The first lien debt at the Efective Date is projected to be $50 millon. Interest on the New First Lien Notes shall be payable in Cash quarterly in
arrears at the Cash pay rate of l1BOR +2%; provided that if the average of the
Reorganized Debtors' unrestricted consolidated Cash as of the last day of each of the
two immediately preceding consecutive quarters is less than $15 millon or if the unrestricted consolidated Cash as of the last day of the immediately preceding quarter is less than $15 millon (collectively, the "Cash Interest Threshold"), then the Reorganized Debtors shall have the option to capitalize the amount of interest due in excess of UBOR for the immediately preceding quarter, with such capitalized interest to
be capitalized on such interest payment date, and all such capitalized interest shall be
due on the next interest payment date to the extent the Cash Interest Threshold is met
after giving effect to the payment of interest and capitalized interest or as the
Reorganized Debtors otherwise elect. All capitalized interest not previously paid shall be paid on the Maturity Date. lIBOR shall be subject to a cap of 2%.
C. Projected Statements of Operations
1. Total Revenue: Consolidated Revenues consist of Homebuilding Revenue, land Sales,
and Golf Course Revenue. Home sales absorptions are projected to remain static in 2010 and 2011 and increase slowly throughout the remaining forecast period. Average
sales price is expected to decrease 9.3% in 2010 and then increase 9.8%, 9.1%, 11.3%,
forecast
and 4.0% in years 2011 through 2014, respectively. The Company's land assets are to be monetized at prices and dates supportable by market conditions. The
revenues of the Tuscany Golf Course and the Rhodes Ranch Golf
Course are forecast
based on historical sales and operations.

2. Cost of Sales: The Company's vertical construction costs are estimated to remain flat on
average throughout the projection period. lot costs are based on the allocation ofthe land basis, valued at the Effective Date, to the individual lots, and the projected land
development costs to be incurred throughout the projection period. While it is
anticipated that costs wil generally rise toward the latter half of
the Projection Period,
the Reorganized Debtors anticipate that they can achieve design and other cost
efficiencies to offset any market increases.

3. Sellng, General, and Administrative Expenses: Overhead operating expenses are
projected based on historical averages as a percentage of home sales revenue, which

percentages are projected to remain static throughout the Projection Period.
4. Golf Course Expenses: The Tuscany Golf Course and Rhodes Ranch Golf Course
expenses are forecast based on historical profit margins and operations.
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5. Interest Expense: Interest expense is based on the New First lien Notes of $50 milion.
Interest on the New First lien Notes shall be payable in Cash quarterly in arrears at the
Cash pay rate of lIBOR +2%; provided that if the average of the Reorganized Debtors'
unrestricted consolidated Cash as of the last day of each ofthe two immediately preceding consecutive quarters is less than $15 millon or if the unrestricted consolidated Cash as of the last day of the immediately preceding quarter is less than $15 millon (collectively, the "Cash Interest Threshold"), then the Reorganized Debtors
shall have the option to capitalize the amount of interest due in excess of LlBOR for
the
immediately preceding quarter, with such capitalized interest to be capitalized on such

interest payment date, and all such capitalized interest shall be due on the next interest payment date to the extent the Cash Interest Threshold is met after giving effect to the
payment of interest and capitalized interest or as the Reorganized Debtors otherwise elecL All capitalized interest not previously paid shall be paid on the Maturity Date.
LlBOR shall be subject to a cap of 2%.
6. Taxes: The PrOjections assume the Reorganized Debtor wil not have income tax liabilty
throughout the projection period based on the utilization of net operating losses. Property taxes are capitalized and are included in the lot cost of sales. Sales taxes on the golf course operations are included in the Tuscany Golf Course and Rhodes Ranch
Golf Course expenses.
10
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EXHIBITE
liquidation Analysis
Under the "best interests" of creditors test set forth in section 1129(a)(7) of the Bankruptcy Code, the Bankruptcy Court may not confirm a plan of reorganization unless the plan provides each holder of a
claim or interest who does not otherwise vote in favor
of the plan with property of value, as of the
effective date of the plan, that is not less than the amount that such holder would receive or retain if was liquidated under chapter 7 of the Bankruptcy Code. To demonstrate that the Plan the debtor
satisfies the "best interests" of creditors test, the First lien Steering Committee has prepared the following hypothetical liquidation Analysis, which is based upon certain assumptions discussed in the Disclosure Statement, and in the accompanying liquidation Analysis notes. The conclusion of the liquidation Analysis, as set forth below, is a value range of $44.2 milion to $55.0 milion.
The liquidation Analysis was prepared by the First lien Steering Committee through its financial advisors, Winchester Carlisle Partners ("Wep"), and its valuation consultants, Robert Charles lesser & Company ("RCieO"). The liquidation Analysis estimates the potential cash distributions available to Holders of Allowed Claims in a hypothetical chapter 7 liquidation of the Debtors' assets. The
preparation of this liquidation Analysis involved extensive use of estimates and assumptions that,
although considered reasonable by the First lien Steering Committee and its professionals, are
inherently subject to significant business, economic and competitive uncertainties beyond the control of
the Debtors and the First lien Steering Committee. The First lien Steering Committee and its profeSsionals undertake no obligation to update or revise the liquidation Analysis.
The following notes present the general assumptions that were relied upon in preparing the liquidation
Analysis, comprise an integral part of the liquidation Analysis, and should be referenced in connection
with any review of the liquidation Analysis.

THE FIRST LIEN STEERING COMMITTEE AND ITS ADVISORS MAKE NO REPRESENTATION OR WARRANTY THAT, IF THE DEBTORS WERE IN FACT TO UNDERGO A CHAPTER 7 LIQUIDATION, THE ACTUAL RESULTS WOULD OR WOULD NOT APPROXIMATE THE ESTIMATES AND ASSUMPTIONS REPRESENTED IN THE
LIQUIDATION ANALYSIS. ACTUAL RESULTS COULD VARY MATERIAllY.
NOTES
Basis of Presentation
(1) The liquidation Analysis presents high, low, and average recovery scenarios, based upon a range of assumptions relating to the costs incurred during a liquidation and the proceeds realized
therefrom. It is assumed that under a liquidation scenario, certain distinctive factors would limit
recoveries from the sale of the Debtors' operations and other land assets. The liquidation
Analysis assumes that a chapter 7 trustee wil attempt to maximize recoveries by sellng the
twelve months commencing on January 1, 2010. It is assumed that homes under construction as of this commencement date wil be sold
Debtors' assets on an orderly basis over a period of as is in their then current state of construction. Given the current depressed state of
the
homebuilding and real estate markets, as well as the limited availability of credit, this expedited sale process could materially reduce recoveries from the Debtors' assets.
(2) Recoveryvalues are estimated on a consolidated basis for all ofthe Debtors' entities.
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(3) Asset liquidation ranges are assumed to be estimated recovery amounts before deduction of
any commissions or chapler 7 trustee fees, but net of property taxes, association dues, bond
fees, and other operating costs specific to each asset.

Assets
(1) Cash. The cash balance is the actual cash balance as of June 30, 2009, with certain roll-forward
adjustments to estimate the cash balance as of 12/31/09.

(2) Accounts Receivable Pinnacle GradinR. This accounts receivable balance represents receivables from grading contract work completed, and is assumed to have cash recovery
ranging from 80% to 100% of book value.
(3) Accounts Receivable Other. This account represents miscellaneous receivables in the
ordinary course of business and is assumed to have a cash recovery ranging from 0% to 20% of book value.
(4) Due from Relate.(;LParlies. This account represents related party receivables and is assumed to
have zero value in liquidation.
(5) Inventories. This account represents all real estate holdings, including homes under construction, completed homes and model homes, and developed and undeveloped land and is net of overhead costs incurred to operate the Debtors during the liquidation phase. The cash
recovery for these assets ranges from 20.5% to 25.7% of book value.
(6) Property, Plant & EQuipment. This includes furniture and fixtures, leasehold improvements, office equipment, vehicles, and the construction equipment of the grading company, Pinnacle
Grading, iiC. The grading equipment is assumed to have a liquidation value, net ofthe notes on
the equipment, of approximately $450,000. Inclusive of the remaining assets, the total
liquidation value is assumed to range from 16.2% to 31.4% of book value.
(7) Deposits and Other Assets. This category of assets includes various prepaid expenses, utility
deposits, and debt issuance costs, and is assumed to have zero value in a chapter 7
liquidation.
liabilties and Wind-down Expenses
(1) Bond Release Costs. During the prepetition period, the Debtors routinely used performance and improvement bonds to provide assurance to municipalities that certain infrastructure work
would be completed in conjunction with development orders tied to the Debtors' real estate developments. The projects associated with these bonds include projects for "onsite"
improvements (Le., within the Debtors' developments) and "offsite" improvements (i.e., within
the municipality but outside of
the Debtors' development). In a hypothetical liquidation, it is
assumed that the Debtors proceed only with onsite improvements that have a direct impact on
the value of the real estate assets and the ability to sell such real estate assets. It is assumed that the cost to complete such onsite projects is treated as an Administrative Claim (by expending cash to complete) and that no prepetition Claims from the bond issuers arise given that these projects are completed. It is assumed the offsite projects are not completed by the
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Debtors and therefore give rise to General Unsecured Claims from the bond issuers against the Debtors. Any costs to be incurred are expected to be minimal as most assets wil be sold in an
"as is"
state.
(2) Wind-down Expenses. In addition to Administrative and Priority Claims, the wind-down
expenses include expenses directly related to liquidation of the assets, such as commissions to real estate brokers of an average of 4% of estimated liquidation proceeds, and fees paid to a
chapter 7 trustee and its professionals totaling approximately 2% of liquidation proceeds.
(3) Secured Claims - Pre
petition Secured Debt. These liabilities include the first and second lien
outstanding debt, accrued interest and certain fees, as well as secured hedging agreements.
(4) Other Secured Claims. This group of liabilties represents mechanics lien claims and claims by equipment lenders.
(5) General Unsecured Crajms~ This group of liabilties includes prepetition claims by
vendors and
subcontractors, in addition to other unsecured claims, including anticipated claims by issuers of performance bonds due to the anticipated non-performance of the related work.
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n._,
j
,liquidation Analysis '" ,---- ~-._:Claims Re.c:o\l.ery_S.~~_ed~I~___ ___
, I
..1
-- - 1----,
i Amount
li~t~! A~~e~~~_al!~_b!~.~.~_c;.r~~_i.t';;'~~=:- ..~~-.=~:J-=-_~=_-~~~~8:66~
ir::;::~g;~~&Et:6~::~-=n-:___ .=i~:=:-~-i~~~~j
Tot_al Prig!il-Y.CI~l!.s_." _ __~_.._.u_ '-__,.,~_.__ _.j.___.._____J._251.9_
I I i Other Secured Claims i 2,300,00 I ~ : Total . I

Net Estimated . ... ._.._.__._T.._.._._._..... ._-- .....__..._--_.-Recovery 100.0%
l~~_~ts A~~ila~!e to _~r~dit~.~~~~n-g_-g,t_~;_~~~~~~~ai!!_~ f~.- ='_~-=~_S'99~'_?.~"I
f-.---.-- ,___.._._~m'_ m....___...._,~_. ____._.. ..___..__.~___._____.._______
Estimated Recovery (Administrative and Priority Claims) 3,325,00
1.-- _____'n .-. ---- ----.------ --1-- ...-....------.....l

Estim..!ed Recovery (Other Sec,!r.~s!.~!.~im~L_ _~..__ __.._____--.~DI!-a_
Net Estimated Recove 100.0%

,
Assets Availa~!.'"t~. S~~llr-et!.fr-~_i:i..l~,

I
_ _.n____.__J______
_.-t". 43,69,?,665 _H .1--.- 325,947,566
,
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Estimated Recovery (Secured ia_~rTI.s _- Se!,~!l_d_lien,l
Net Estimated Recovery '-'!

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_______L-__ ! 15,00,000
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!=s.t~.~ate.c!R~.Ec)yery.t~~secured 1aims) Net Estimated Recovery
i u._.__ L____.._.
0.0%
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Exhibit F
Pending Lilgation
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CLAIMS AND ALL PENOING CASES
SEPTEMBER18,2009
IAAROSENVS,
i;5/ll
H..~.ic.lo..CII'
P~SONAtINJURY
ROSENFORMERTRlaeEMPLOYEESUrrFOR
~~RSCHlNSTEtf
H/SC LAtlOROSUIT FOR lNOMH/!ICATlN
H,oRSCHII/SThENT 7eR","O,UICA.O
PERSOlNJURYOiiSR.vOPREMISES.
STAVPENOINGONICITOUFSTAYTO
IrplLlNGST,oGE TAVEO.MOnONrOllFr PURSUEINSUAA'ICEPOUCYONLY
Case 09-14814-lbr
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PENDING SETTLED CASES VvTH INSURANCE
FUUCSVS ELKHOR
s.A-5ne
COOSTUCTloiiOEFECT
N..ODiinCc
13lIiOiOeSI4,OO,oo INSUREOSETTMetf
Doc 931-5
PRESER'Si'T ElKHOR"lIiO"VS
(:OOSTRUCTIONOUECT
"."
N",_O~~Ic\;""~
RHODES
HOMES
(COWONELEIoENTSI S\S7.001NSVRED
SETTMENT
In
p--il:oo.OO
R.K-oc(2SIl..",
6....~
N....aO.s'oeCo
Co.~STfU;lOUOEFECl
IIHSUREtSemEloENr
NOTICE
OF
CLAI~~ ~O SUIT
, 0
INSURED
uNtSUfeO
CLAIMANT
NATURE OF ClA
AMOUNT CLAIMED
UNKOO\
CONlRCTCl.lM
C6""I:""OtllliU,U.C
AAISINGFROI
niSCAiivoPTioN
Entered 01/15/10 15:34:13
AGREEMEln
, ,
SiiIi(lFCOlRACr
UN!UREO
~SJ&CF.mdl"if\""
M'PROXMAiElYi1l,
F..IWRETO
COWTEPOST
~-~
C-1o..CoIi:o
Page 21 of 51
ClOSING CONSTRUCTlH1H
SPAN~Hiu
OOCS_LA'2001
Pago"
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Exhibit G
Litigation Trust Assets
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NON-EXCLUSIVE LIST m' LITIGATION TRUST ASSETS
ARTICLE IV.O OF THE PLAN PROVIDES THAT, ON THE EFFECTIVE DATE. THE DEBTORS SHALL TRANSFER THE LITIGATION TRUST ASSETS TO THE LlTIGAflON TRUST l'OR AND ON BEHALF OF THE LITIGATION TRUST BENEFICIARIES. SET FORTH BELOW IS A NON-EXCLUSIVE LIST OF THOSE CAUSES OF ACTION TO BE TO ARTICLE IV.O OFTHE TRANSFERREDTOTHE LITIGATION TRUST PURSUANT PLAN. SUCH CAUSES OF ACTION INCLUDE, BUT ARE NOT LIMITED TO, CAUSES OF ACTION HELD BY THE ESTATES AGAINST Tl.IE RHODES ENTITIES, AND CAUSES OF ACTION THAT ARE NOT INCLUDED IN THE FIRST LIEN LENDERS' COLLATERAL.
TO FOR AVOIDANCE OF DOUBT, UNLESS EXPRESSLY RELEASED PURSUANT THE PLAN OR A FINAL ORDER IN THEIR CAPACITES AS SUCH, ENTITIES NOT LISTED ON THE AlTACHED LIST ARE NOT RELEASED AND THE DEBTORS AND THE LITIGATION TRUST OR REORGANIZED DEBTORS, AS APPLICABLE, EXPRESSLY RETAIN ALL CAUSES OF ACTION OF ANY KIND WHATSOEVER AGAINST ALL SUCH ENTITIES, INCLUDING WITHOUT LIMITATION THE CAUSES OF ACTION SET FORTH BELOW.
FAILURE TO AlTRIBUTE ANY SPECIFIC CAUSE OF ACTION TO A PARTICULAR ENTITY ON THE A:ITACHED LIST SHALL NOT UNDER ANY CIRCUMSTANCES BE INTERPRETED TO MEAN THAT SUCH CAUSE OF ACTION IS NOT RETAINED AGAINST SUCH ENTITY. ALL POSSIBLE CAUSES OF ACTION, BELOW, ARE RETAINEDAGAINST INCLUDING CAUSES or ACTION NOT LISTED TO THE PLAN OR A FINAL ALL ENTITIES NOT EXPRESSLY RELEASED PURSUANT ORDER IN THEIR CAPACITIES AS SUCH.
IN THE EVENT or ANY APPARENT INCONSISTENCY BETWEEN THE AS SUCH PURSUANTTOTHE I'LAN AlTACHED LIST, SUCH RELEASES ORDER AND THE ORA BANKRUPTCY COURT GOVERN. GRANTED PURSIJANT TO THE PLAN OR FINAL ORDER SHALL
RELEASES OF ENTITIES IN THEIR CAPACITES
The Litiu.(ltion Trust Assets shall include. but are not limited to. the following:
i. Claims and Causc."I otAction ht:d by the Estates against the Rhodes Entities. including: a. Cl::iims for beClch or fiuciry duty;
b. Claims for misappropriation of
Debtor assets for personal use;
c. Claims tor usurping corporate opportunity for the benefit or competing
interests;
d. CJiims ror mismanacmcnt of
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e. Ckims tor frudulent transfers (to the extent not expressly released under the Plan): and
t: Claims lor ,he diven;ion or corporate resources lor ihe beoetit of competing
inien::sls.
2. Claims and Causes of Action that are not included inihc First Lien Lenders' CollateraL.
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Exhibit H
Claim Purchase Schedule
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Exhibit)
Litgation Trust Agreement
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
LITIGATION TRUST AGREEMl;NT

This LITIGATION TRUST AGREEMENT, dated as of January U, 2010 (this "Agreement"), is hereby entered into by and among The Rhodes Companies, LLC and its subsidiaries and affliates signatory hereto and any successors in interest (collectively, the "Debtors")! as settlors in their capacities as debtors in the Chapter 11 Cases (as defined below) the Effective Date (as defined in the Plan (as defined below)) (in and as reorganized debtors as of the Litigation such capacities, the "Reorganized Debtors"), and ( 1, as trustee of Trust referred to herein (in such capacity, the "Litigation Trustee"). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the the the Bankruptcy Code for Reorganization pursuant to Chapter 11 or Second Amended Plan of Rhodes Companies, LLC et il. dated November 12,2009 (including all exhibits attached thereto or referenced therein, as the same may be amended, modified, or supplemented, the "Plan").
Background
A. On either March 31,2009 or April 1,2009, each of petition for relief
the Debtors fied a voluntary
under chaptcr 1 I orthe Bankruptcy Code in the United Slates Bankruptcy Nevada (the "Bankruptcy Court"), commencing their chapter II cases Court for the District of (the "Chapter I I Cases").
B. The Plan incorporates, among other things, the terms of The Plan and the Confirmation Order also provide for the establishment of for the benefit of provided for
the Mediation Settlement.

the Litigation Trust
the Holders of Allowed Claims in Classes C-L, C-2, and C-3, or as otherwise the Plan (collectively, the benefitotthe Reorganized Debtors in Article VII.C.3. or
the "Litieation Trust Beneficiaries").
C. The Plan and the Confirmation Order further provide that, on the Effective Date, the Debtors shall transfer the Litigation Trust Funding Amount and shall grant, assign, transfer, their right, title, and interest in and (0 all orthe Litigation Trust Assets convey, and deliver all of including, without limitation, interest earned thereon (together with any and all other earnings, or comprising the Litigation Trust Assets) to the Litigation Trust other income, or other assets of the Litigation Trust Beneficiaries. on behalf and for the benefit of
D. On
Plan (the "Contrmation Order").
, the Bankruptcy Court entered an order confirming the
i The Debtors are: Apache Framing, LLC; Batcave, LP; Bravo Inc.; C&J Holdings, Inc.; Chalkline, LP; Elkhorn
Investments, Inc.; Elkhorn Panners, A Nevada Limited Partnership; Geronimo Plumbing, LLC; Glynda, LP; GungHo Concrele, LLC; Heritage Land Company, LLC; Jackknife, LP; larupa LLC; Overfow, LP; Parccl20 LLC; Pinnacle Grading, LlC; Rhodes Arizona Properties, I.LC; Rhoes Companies, LtC; Rhodes Design and Development Corp.; Rhodes Homes Arizona, LLC; Rhodes Ranch General Partnership; Rhodes Ranch Golf and Country Club; Rhoes Realty, Inc.; Six Feathers Holdings, LLC; Tick, LP; Tribes Holdings LtC; Tuscany Acquisitions, LLC; Tuscany Acquisitions II, LtC; Tuscany Acquisitions li, LLC; Tuscany Acquisitions V, LLC;
Tuscany Golf
Country Club, LtC; Wallboard, LP.
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E. On the date hereof, the Effective Date of
the Plan occurred.
F. The Litigation Trust is being created pursuant to this Agreement for the purposes
of liquidating the Litigation Trust Assets and distributing or utilizing the proceeds thereof for of the benefit of
to or
the Litigation Trust Beneficiaries, as described in Articles IV.O. and VIL.C.3.
the Plan.
G. The Litigation Trustee shall have all powers necessary to implement the
provisions of
this Agreement and administer the Litigation Trust as provided hercin.
Agreement
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the Debtors and the Litigation Trustee agree as follows:
ARTICLE I DECLARTION OF LITIGATION TRUST

1.1 Creation of Litigation Trust. The Debtors and the Litigation Trustee, pursuant to
the Bankruptcy Code, hereby constitute and create the Litigation Trust on the terms set forth herein.
the Plan and the Confirmation Ordcr and in accordance with the applicable provisions of
1.2 Litigation Trust Interests. The Litigation Trust Interests shall be distributed to certain Holders of Allowed Claims as follows:
the Holders of (a) Holders of Allowed General Unsecured Claims. Each of Allowed General Unsecured Claims (including any Allowcd Rhodes Entities Claims) shall receive a pro rata share of the Litigation Trust Interests based on a percentage equal to the total amount of the applicable Holder's Allowed General Unsecured Claim (including any Allowed Rhodes Entities Claim) divided by the aggregate total amount of all Allowed Claims of holders of Litigation Trust Interests.
(b) Holders of Allowed First Lien Lender Deficiency Claims. Each of Holders of Allowed First Lien Lender Deficiency Claims shall receive a pro rata share of Litigation Trust Interests based on a percentage equal to the total amount of
the the
the applicable
Holder's Allowed First Lien Lender Deficiency Claim divided by the aggregate total amount of all Allowed Claims of holders of Litigation Trust Interests.
(c) Holders of Allowed Second Lien Lender Deficiencv Claims. Each of Holders or Allowed Second Lien Lender Deficiency Claims shall receive a pro rata share of Litigation Trust Interests based on a percentage equal to the total amount of
the the
the applicable
Holder's Allowed Second Lien Lender Deficiency Claim divided by the aggregate total amount of all Allowed Claims or holders of Litigation Trust Interests. Distributions to Holders of Allowed Second Lien Lender Deficiency Claims on account or their Litigation Trust Interests shall be made to the Second Licn Agent for distribution to such holders.
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this Agreement is lo implement the the Litigation Trust Beneficiaries, and to serve as a mechanism for prosecuting all Causes of Action in respect of the Litigation Trust Assets and
1.3 Purpose of Litie:ation Trust. The purpose of Plan on behalf, and for the benefit, of distributing the proceeds thereof to or for the benefit of
the Litigation Trust Beneficiaries in
accordance with this Agreement, the Plan, and the Confirmation Order. The Litigation Trust Assets shall be liquidated in accordance with Treasury Regulation Section 30 1-4(d), with 1.770 no objective to continue or engage in the conduct of a trade or business, except to the extent reasonably necessary to, and consistent with, the liquidating purpose of the Litigation Trust. The Litigation Trust shall not be deemed a successor-in-interest of the Debtors or the Reorganized Debtors for any purpose other than as specifically set forth herein or in the Plan and the Confirmation Order. The Litigation Trust is intended to qualify as a "grantor trust" for federal income lax purposes with the holders of Litigalion Trust Interests treated as grantors and owners of the Litigation Trust.
1.4 Transfer of
Litigation Trust Assets.
all Allowed Claims in Classes C-I, C-2, and C-3, as the Effective Date, for the sole benefit of the Litigation Trust Beneficiaries, pursuant to Bankruptcy Code sections 1 i 23(a)(5)(8) and i i 23(b)(3)(B) and in accordance with the Plan and the Confirmation Order, the Litigation Trust Assets to the Litigation Trust, free and clear of any and all liens, claims, encumbrances, and interests (legaL. beneficial, or otherwise) of all other entities to the maximum extent contemplated by and permissible under Bankruptcy Code section 1 141 (c). Nothing in this Agreement is intended to, or shall be construed to, effect a release, extinguishment, or compromise of any Litigation Trust Asset transferred to the Litigation Trust pursuant to this Agreement. The Litigation Trust Assets are to be held and utilized or distributed, as applicable, by the Litigation Trustee in accordance with the terms hereof the Litigation for the benefit of Trust Beneficiaries, and for no other party, subject to the further covenants, conditions, and tenns hereinafter set lrlh.
(a) In full satisfaction of applicable, the Debtors hereby transfer as of
the Debtors ("Restricted Assets") cannot be (b) To the extent any assets of transferred to the Litigation Trust because of a restriction on transferabilty under applicable nonbankruptcy law that is not superseded by Bankruptcy Code section 1123 or any other provision of the Bankruptcy Code, such Restricted Assets shall be retained by the applicable
Debtors and Estates. The proceeds of any such Restricted Asset retained by the Debtors and the
Estates shall be a\located to the Litigation Trust pursuant to the Plan as if such transfer had not been restricted under applicable nonbankruptey law. The Litigation Trustee may commence an action in the Bankruptcy Court to resolve any dispute regarding the allocation of the proceeds of any Restricted Assets retained by the Debtors. To the extent necessary or appropriate, the Litigation Trustee may be designated as a representative of one or more of the Estates pursuant to. Bankruptcy Code section I 1 23(b)(3)(B) to enforce or pursue any rights, claims, or Causes of Action that remain properly of the Estates after the Effective Date.
(c) For all federal, state, and local income tax purposes, each holder of an
Allowed Claim in Classes C-i, C-2, and C-3 shall be treated as transferring all of
such Allowed
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Assets, and then transferring the holder's pro rata share of
the Litigation Trust the Litigation Trust Assets (subject to such liabilities) to (he Litigation Trust in exchange for such holder's pro rata share of the Litigation Trust Interests in accordance with the terms of Section 4.3(a) of this Agreement.
Claim to the applicable Debtors in exchange for the holder's pro rata share of
the Effective Date, but no later than 180 days (d) As soon as practicable after following the Effective Date, the Litigation Trustee (to the extent that the Litigaton Trustee deems it necessary or appropriate in his or her sole discretion) shall make a good faith determination of the value of Litigation Trust Assets as of the Effective Date and shall provide such valuation in writing to each Litigation Trust Beneficiary. The valuation shall be used
consistently by all parties for all federal and other income tax purposes. The Bankruptcy Court shall resolve any dispute regarding such valuation.
1.5 Liquidation ofLitigaHon Trust Assets. The Litigation Trustee shall, in an the Plan, the Confirmation Order and this Agreement, liquidate and convert the Litigation Trust Assets to Cash, make timely distributions in accordance with the terms hereof and not unduly prolong the existence of the
expeditious but orderly manner and subject to the other provisions of Litigation Trust The Litigation Trustee shall exercise reasonable business
judgment and
liquidate the Litigation Trust Assets to maximize net recoveries to the Litigation Trust Beneficiaries; provided that the Litigation Trustee shall be entitled to take into consideration the risks, timing, and costs of potential actions in making determinations as to the maximization of
such recoveries. Such liquidations may be accomplished through the prosecution, compromise
and settlement, abandonment, or dismissal of any or all Causes of Action in respect of the Litigation Trust Assets or otherwise or through the sale or other disposition of the Litigation Trust Assets (in whole or in combination, and including the sale of any or all Litigation Trust Assets). Pursuant to an agreed upon budget in accordance with Section 4.5 of this Agreement, the Litigation Trustee may incur any reasonable and necessary expenses in connection with the
liquidation ofilie Litigation Trust Assets and distribution of
the proceeds thereof.
1.6 Appointment and Acceptance of Litigation Trustee. The Litigation Trustee shall
i 23(b)(3)(B). The Litigation Trustee accepts the Litigation Trust created by this Agreement and the grant, assignment, transfer, conveyance, and delivery to the Litigation Trust and the Litigation Trustee, on behalf, and for the benefit of, the Litigation Trust Reneficiaries, by the Debtors of all of their respective right, title, and interest in the Litigation Trust Assets, upon and subject to the terms and conditions set forth herein, in the Plan, and in the Confirmation Order. be deemed to be appointed pursuant to Bankruptcy Code section I
1.7 Reversion to Reorganized Debtors. The Litigation Trust Funding Amount, which
the Debtors wil transfer to the Litigation Trust on the Effective Date pursuant to the Plan and Section 4.2 hereof, wil be repaid to the Reorganized Debtors from the first proceeds received by the Litigation Trust. In no event shall any other Litigation Trust Assets revert to or be distributed
to any of

1.8 Incidents of Ownership. The Litigation Trust Beneficiaries shall be the sole the Litigation Trust and the Litigation Trust Assets, and the Litigation Trustee
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shall retain only such incidents of ownership as are necessary to undertake the actions and transactions authorized herein, in the Plan and in the Confirmation Order, including, but not limited to, those powers set forth in Section 6.1 hereof.
1.9 Intervention. On the Effective Date, and without having to obtain any further
the Bankruptcy Court, the Litigation Trustee shall be deemed to have intervened as plaintiff, movant, or additional party, as appropriate, in any applicable Causes of Action in respect of the Litigation Trust Asset, including adversary proceedings, contested matters, avoidance actions, motions, and other actions, in each case filed by any Debtor, Creditors' Committee, or any other Estate representative prior to the Effective Date. Without limiting the foregoing, the Litigation Trustee shall take any and all actions necessary or prudent to intervene in Causes of Action in respect of the Litigation Trust Assets in a timely manner.
order of
ARTICLE II LITIGATION TRUST BENEFICIARIES

2.1 Conflcting Claims. If any conflcting claims or demands are made or asserted
with respect to a Litigation Tnist Interest, the Litigation Trustee shall be entitled, at its sole election, 10 refuse to comply with any such conflcting claims or demands. In so refusing, the Litigation Trustee may elect to makc no payment or distribution with respect to the Litigation Trust Interest represented by the claims or demands involved, or any part thereot~ and the Litigation Trustee shall refer such conflicting claims or demands to the Bankruptcy Court, which shall have exclusive jurisdiction over resolution of such conflcting claims or demands. In so
doing, the Litigation Trustee shall not be or become liable to any party for iic; refusal to comply
with any of such conflcting claims or demands. The Litigation Trustee shall be entitled to refuse to act until either (a) the rights of the adverse claimants have been adjudicated by a Final Order of the Bankruptcy Court or (b) all differences have been rcsolved by a written agreement among all of such parties and the Litigation Trustee, which agreement shall include a complete the release of the Litigation Trust and the Litigation Trustee with respect to the subject matter of dispute (the occurrence of either (a) or (b) being referred to as a "Dispute Resolution"). Unt a Dispute Resolution is reached with respect to such conflcting claims or demands, the Litigation Trustee shall hold in a segregated interest-bearing account with an Approved Financial Institution (as defined below) any payments or distributions from the Litigation Trust to be made with respect to the Litigation Trust Intere:-t(s) at issue. Promptly after a Dispute Resolution is reached, the Litigation Trustee shall transfer the payments and dislributions, if any, held in the segrcgated account, together with any interest and income generated thereon, in accordance with
the terms of such Dispute Resolution.
"Approved Financial Institution" means a commercial bank, savings bank, or savings and the United States, or any state thereof, and having a combined capital and surplus of at least $1,000,000,000.
loan association organized under the laws of 2.2 Rights of Litigation Trust Bencficiaries. Each Litigation Trust Beneficiary shall be entitled to participate in the rights and benefits due to a Litigation Trust Beneficiary hereunder according to the terms of its Litigation Trust Interest. Each Litigation Trust Beneficiary shaH
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this Agreement, the Plan, and take and hold the same, subject to all the terms and conditions of the Confirmation Order. The interest of a Litigation Trust Beneficiary is hereby declared and shall be in all respects personal property. Except as expressly provided hereunder, a Litigation Trust Beneficiary shall have no title to, right to, possession or, management of, or control of tile Litigation Trust or the Litigation Trust Assets.
2.3 Litigation Trust Interest Onlv. The ownership of a Litigation Trust Interest in the
Litigation Trust shall not entitle any Litigation Trust Beneficiary to any title in or to the Litigation Trust Assets or to any right to call for a partition or division of such assets or to require an accounting, except as specifically provided herein.
2.4 Evidence ofLitieation Trust Interest. Ownership of a Litigation Trust Interest in the Litigation Trust shall not be evidenced by any certificate, security, or receipt or in any other the Litigation form or manner whatsoever, except as maintained on the books and records of Trust by the Litigation Trustee (or any agent appointed by the Litigation Trustee for purposes of maintaining a record ofthe Litigation Trust Beneficiaries and their respective Litigation Trust Interesls in the Litigation Trust). The Litigation Trustee shall, upon written request of a holder of a Litigation Trust Interest, provide reasonably adequate documentary evidence of such holder's Litigation Trust Interest, as indicated in the books and records otthe Litigation Trust. The expense of providing such documentation shall be borne by the requesting Litigation Trust Beneficiary.
2.5 No Transfers of
Litigation Trust Interests. The Litigation Trust Interests shall not

law.
be assignable or transferable, except by will, intestate succes~ion, or operation of
the Confirmation any Litigation Trust Interest holder, shall give rise to any liability of such Litigation Trust Interest holder solely in its capacity as such, whether such liability is asserted by the Reorganized Debtors, by creditors, or employees of the Reorganized Debtors, or by any other Person. Litigation Trust Interest holders this arc deemed to receive the Litigation Trust Assets in accordance with the provisions of their Allowed Claims, as Agreement, ihe Plan, and the Confirmaiion Order in full satisfaction of this applicable, without further obligation or liability ofany kind, but subject to the provisions of Agreement.
2.6 Limited Liability. No provision of this Agreement, the Plan, or Order, and no mere enumeration herein ofthe rights or privileges or
ARTICLE II
DURATION AND TERMINATION OF LITIGATION TRUST
3.1 Duration. The Litigation Trust shall be deemed effective upon the Effective Date and shall remain and continue in full force and effect until terminated as provided herein. The
Litigation Trust shall tenninate (the 'Termination Date") upon the occurrence of the fullliquidatioii, administration, and distribution of
the earlier of (a)
the Litigation Trust Assets in accordance with the Plan, the Confirmation Order, and this Agreement and the full performance ofal1 other duties and functions ofihe Litigation Trustee set foi1h in the Plan, the Confirmation Order and
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this Agreement or (b) the fifth anniversary of
the Effective Date, subject to one or more finite
extensions, which must be approved by the Bankruptcy Court pursuant to the terms set forth n
the Plan within six months prior to the then-current Termination Dale and provided that the Litigation Trustee receives a favorable ruling from the Internal Revenue Service to the effect that the Litigation Trust as a grantor trust any such extension would not adversely affect the status of
for federal income tax purposes. Notwithstanding anything to the contrary in this Agreement, in
the Litigation Trust, and the Litigation Trustee shall, in the exercise of its reasonable business judgment and in the interests of the the Litigation Trust Beneficiaries, at all times prosecute the Causes of Action in respect of Litigation Trust Assets in a manner reasonably calculated to maximize net recoveries to the Litigation Trust Beneficiaries.
no event shall the Litigation Trustee unduly prolong the duration of
the the Litigation Trust, the Litigation Trustee shall continue to act as such until its duties have been fully pertormed. Upon distribution of all the Litigation Trust Assets, the Litigation Trustee shall retain the books, records, and fies that shall have been delivered to or created by the Litigation Trustee. At the Litigation Trustee's discretion, all of such records and documents may be destroyed at any time following the date that is six years after the final distribution of Litigation Trust Assets (unless slich records and documents arc necessary to fulfill the Litigation Trustee's obligations pursuant to Sections 4.8(3) and 6.1 hcreof) subject to the terms of any joint prosecution and common interesls agreement(s) to which the Litigation Trustee may be a party. Except as otherwise specifically provided herein, upon the final distribution of Litigation Trust Assets, the Litigation Trustee shall be deemed discharged and have no further duties or obligations hereunder, except to account to the Litigation Trust Beneficiaries as providt:d in Section 4.5 hereof and as may be imposed on the Litigation Trustee by virtue of Section 6.1 hereof, the Litigation Trust Interests shall be cancelled, and the Litigation Trust shall
3.2 Continuance of Litigation Trust for Winding UP. After the termination of Litigation Trust and solely for the purpose of liquidating and winding up the affairs of
be deemed to have been dissolved.
ARTICLE iv
ADMINISTRATION OF LITIGATION TRUST

Claims. Exoenses. and Liabilities. Subject to the budget agreed upon this Agreement, the Litigation Trustee shall expend the Cash of the Litigation Trust: (a) to pay reasonable
4.1 Payment of by the Litigation Trust Advisory Board in accordance with Section 4.5 of administrative expenses of
the Litigation Trust that arc incurred (including, but not limited to,
any taxes imposed on the Litigation Trust or professional fees and expenses in connection wil the Litigation Trust Assets and preservation of books and the administration and liquidation of records as provided in Section 3.2 hereof); (b) to satisfy other obligations or other liabilties incurred or assumed by the Litigation Trust (or to which the Litigation Trust Assets are otherwise subject) in accordance with the Plan, the Confirmation Order, this Agreement and applicable United States and non United States law or regulation (it being understood that the the Debtors), including fees and Litigation Trust has not assumed any obligations or liabilities of
costs incurred in connection with the protection, preservation, liquidation, and distribution of
the
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PREliMINARY DRAFT SUBJECT TO MODIFICA liON FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
Litigation Trust Assets,the reasonable, documented out-of-pocket expenses of Trust Advisory Board members, and the cosls of
the Litigation investigating, prosecuting, and resolving the obligations the Litigation Trust Assets; and (c) 10 satisfy any other Causes of Action in respect of of the Litigation Trust expressly set forth in the Plan, the Confirmation Order, or this Agreement.
4.2 Funding of the Litigation Trust. On the Effective Date, (i) the Debtors shall transfer, and shall be deemed to have automatically transferred, the Litigation Trust Funding Amount and (ii) the Debtors shall transfer, and shall be deemed to have automatically transferred, the Liligation Trust Assets in accordance with Section i.3 hereof, in each case, to the the Litigation Trust Beneficiaries. No further amounts shall Litigation Trust for and on behalf of be paid or payable by the Debtors for any purpose whatsoever. The Litigation Trust Funding Amount shall be repaid to the Reorganized Debtors from the first proceeds received by the
Litigation Trust.
4.3 Distributions.
(a) Gcncnillv. On the terms and subject to the conditions set forth in this
Section 4.3, from the Effective Date through the Tcnnination Date on each Distribution Date (as defined below), each holder ofLitigaton Trust Interests shall receive pro rata distributions of Litigation Trust Assets distributed on such Distribution Date.
Distributions. The Litigation Trustee shall make the Litigation Trust Assets Available for Distribution (as defincd below) on each Periodic Distribution Date (as defined below) and on such additional dates that the Litigation Trustee, in consultation with the Litigation Trust Advisory Board, detennines are appropriate from time to time (each Periodic Distribution Date and any such additional date, a "Distribution the Date"); provided, however, that ihe Litigation Trustee shall be entitled, with the consent of Litigation Trust Advisory Board, to defer any sueh distribution to the next Distribution Date if the Litigation Trustee detennines that the amount of Litigation Trust Assets Available for Distribution at such time is insuftcient to justify the eost of effecting the distribution. (b) Timing and Amount of distributions of
"Periodic Distribution Date" means, as applicable, (a) the first Business Day that is as soon as reasonably practicable occurring approximately ninety days after the Distribution Date, and (b) thereafter, the first Business Day that is as soon as reasonably practicable occurring approximately ninety days after the immediately prcceding Periodic Distribution Date.
(c) Litigation Trust Assets Available for Distribution. Notwithstanding
an)'thing in this Agreement to the contrary, the Litigation Trustee shall cause the Litigation Trust at all times to retain suffcient funds (the "Expense Reserve") as the Litigation Trustee shall detenninc, in consultation with the Litigation Trust Advisory Board and subject to the budget this agreed upon by the Litigation Trust Advisory Board in accordance with Section 4.5 of Agreemcnt, are reasonably necessary for the Litigation Trust to: (i) meet contingent liabilities and maintain the value of the Liquidation Trust Assets; (ii) make the payments and satisfy the obligations and liabilities described in Section 4.1 as well as satisfy all obligations to remit amounts pursuant to applicable United Siales and non United Stales laws relating to taxes; and
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(ii) fund any other amounts as required under the Plan and as identified in the Litigation Trust
budget, and rund the reasonable, documented oui.of-pocket fees and expenses of
the Litigation
Trustee, the Litigation Triist Professionals (as defined below), and the Litigation Trust, and the. the Litigation Trust Advisory Board reasonable, documented out-of-pocket expenses of members. The Litigation Trustee shall not be deemed to be an "underwriter" in connection with the its distribution orany Litigation Trust Assets, as such term is defined in section i 145(b) of the Litigation Trustee shall be Bankruptcy Code, and no employees, agents, or representatives of deemed to be a "broker-dealct' as such term is defined in the Securities Exchange Act of 1934, as amended, or any rules promulgated thereunder.
"Litigation Trust Assets Available for Distribution" means the portion of Assets calculatcd by subtracting the Expense Reserve from the thcn available proceeds of
Litgation Trust
the Litigation Trust Assets, as determined by the Litigation Trustee in advance of cach Distribution Date in consultation with the Litigation Trust Advisory Board.
Proceeds orthe Litigation Trust. Any Litigation (d) Priority orDistribution of Trusl Assets Available for Distribution shall be applied (a) first, to payor reimburse, as the applicable, the reasonable, documcmed out-of-pocket fees, costs, expenses, and liabilties of Litigation Trust and the Litigation Trustee, and the reasonable, documented out-or-pocket expenses or the Litigation 'frust Advisory Board members as provided in Section 4. i ; (b) second, to repay the Litigation Tnist Funding Amount 10 the Reorganized Debtors and (c) third,1o
distributions to Litigation Trust Beneficiaries, in accordance with Section 4.3(a) of
this
Agreement.
(e) Distribution or Promptly following the termination of Proceeds of
the Litigation Trust Upon Termination.
the Litigation Trust, the Litigation Trustee shall distibute
any Litigation Trust Assets Available for Distribution not yet distributed from the Litigation this Agreement, the Trust to the Litigation Trust Beneficiaries in accordance with the terms of Plan, and the Confirmation Order.
(f) Location for Distributions; Notice of Change of Address. Distributions to
the Litigation Trust Beneficiaries shall be made by the Litigation Trustee to the Litigation Trust Beneficiaries as of the applicable Distribution Date (a) at the addresses set forth on the Proofs of such holders of Claims Claim filed by such holders of Claims (or at the last known addresses of ifno Proof of Claim is fied or if the Reorganized Debtors have been notified in writing ora change of address), (b) at the addresses set forth in any written notices of address changes Claim, or (c) in the case delivered to the Litigation Trustee after the date ofany related proor of or Holders of Allowed Second Lien Lender Deficiency Claims, to the Second Lien Agent. Each Litigation Trust Beneficiary shall be responsible for providing the Litigation Trustee with timely written notice of any change in address. The Litigation Trustee is not obligated to make any effort to determine the correct address ofany Litigation Trust Beneficiary.
4.4 Undeliverable Properl.
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PRELIMINARY DRAFT SUBJECT TO MOOIFICA TION

FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
the Litigation Trust or other Litigation proceeds of (a) If any distribution of Trust Assets to a Litigation Trust Beneficiary is returned to the Litigation Trustee as undeliverable, no further distrihution to such Litigation Trust Beneficiary shall be made unless and until the Litigation Trustee is notified in writing of such Litigation Trust Beneficiary's thencurrent address, at which time all missed distributions shall be made to such Litigation Trust this Agreement, undeliverable distributions shall Beneficiary without interest. For purposes of include checks sent to a Litigation Trust Beneficiary, respecting distributions to such Litigation Trust Beneficiary, which checks have not been cashed within six months following the date of the issuance of such checks. Undeliverable distributions shall remain in the possession of Litigation Trustee until the next Distribution Date that the relevant distribution becomes deliverable (in which event it shall be distributed to such Litigation Trust Beneficiary), subject to Section 4.3(b) hereof.
(b) Any Litigation Trust Beneficiary that does not assert a claim for an
undeliverable distribution of
the Litigation Trust or other Litigation Trust Assets the Distribution held by the Litigation Trust at least U days prior to the first anniversary of Date on which such distribution was made shall no longer have any further claim to or interest in the funds represented by such undeliverable distribution and all title to and all Litigation Trust Interests related thereto shall revert to or remain in the Litigation Trust and shall be redistributed to the remaining holders of Litigation Trust Interests in accordance with Section 4.3 hereof.
proceeds of
4.5 Reoorts.
(a) The Litigation Trustee shall deliver reports ("Report") to members of
the
Litigation Trust Advisory Board not later than i-- days prior to each fiscal quarter. Such
Reports shall specify in reasonable detail (i) the status oftbe Litigation Trust Assets, including the any settlements entered into by the Litigation Trust, (ii) the fees and expenses of Litigation Trust, the Litigation Trustee, and the Litigation Trust Professionals incurred and/or the earned during the prior fiscal quarter, (iii) the aggregate fees and expenses of Litigation Trust, the Litigation Trustee, and the Litigation Trust Professionals incurred and/or earned since the date of this Agreement, (iv) the amount of proceeds of the Litigation Trust received by (he Litigation Trust during the prior fiscal quarter, (v) the aggregate amount of this Agreement, proceeds ofthe Litigation Trust received by the Litigation Trust since the date of Distribution for the next the Litigation Trust Assets Available for (vi) the calculation of the Litigation Trust and the Distribution Date, including the amounts ofavaiJable proceeds of Expense Reserve, (vii) the aggregate amount of distributions from the Litigation Trust to Litigation Trust Beneficiaries since the date ofihis Agreement, and (viii) such other information as the Litigation Trust Advisory Board may reasonably request from time to time. The Litigation Trustee shall also timely prepare, tile, and distribute such additional statements, reports, and submissions (A) as may be necessary to cause the Litigation Trust and the Litigation Trustee to be in compliance with applicable law or (B) as may be otherwise reasonably requested from time to time by the Litigation Trust Advisory Board.
(b) The Litigation Trustee shall prepare and submit to the Litigation Trust
Advisory Board for approval an annual plan and budget at least r_i days prior to the
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commencement of
the Litigation Trust; provided. however, ihat the Irst such the Plan. Such annual plan and budget shall set forth in reasonable detail: (i) the Litigation Trustee's anticipated actions to administer and liquidate the Litigation Trust Assets; and (ii) the anticipated expenses, the Litigation Trust. Such including professional fees, associated with conducting the affairs of Advisory Board annual plan and budget shall be updated and submitted to the Litigation Trust for review and approval on a quarterly basis, and each such quarterly update shall reflect the differences between the anticipated actions described in the annual report and actual operations of the Litigation Trust to date. All actions by the Litigation Trustee must be substantially consistent with the plan and budget, as updated on a quarterly basis and approved by the Litigation Trust Advisory Board; provided. however. that the Litigation Trustee may take action outside of the plan and budget with the prior approval of the Litigation Trust Advisory Board.
each fiscal year of report shall be submitted no latcr than 90 days after thc Effective Date of
(c) The Litigation Trustee shall provide the Litigation Trust Advisory Board
with such other information as may be reasonably requested from time to time or on a regular basis by the Litigation Trust Advisory Board.
(d) The Litigation Trustee shall make available by delivery, by posting on a

website, or otherwise, to all Litigation Trust Beneficiaries, the Reports set forth in Section 4.5(a) above, in such form and in such detail as the Litigation Trustee deems appropriate in consultation with the Litigation Trust Advisory Board.
4.6 Exchange Act. In addition to certain requirements set forth in this Agreement, the Litigation Trust shall take such precautions as the Litigation Trustee shall deem necessary or appropriate for the Litigation Trust to avoid becoming subject to the registration requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); provided. however, that irthe Litigation Trust becomes subject to such registration requirements, the Litigation Trustee shall cause the Litigation Trust to register pursuant to, and comply with, the applicable reporting requirements of the Exchange Act.
4.7 fiscal Year. Except for the first and last years orthe Litigation Trust, the fiscal
year of the Litigation Trust shall be the calendar year. For the first and last years of the Litigation Trust shall be such portion of
the
the calendar year
Litigation Trust, the fiscal year of
that the Litigation Trust is in existence.

4.8 Books and Rccords. (a) The DebtorS and/or Reorganized Debtors shall deliver to and/or make available to the Litigation Trustee, and the Litigation Trustee shall retain and
preserve, copies of
the Debtors' and Reorganized Debtors' books, records. and fies related to the
Litigation Trust Assets, including all such books, records, and fies as may be needed to investigate, prosecute, and resolve the Litigation Trust Assets held by the Litigation Trust and otherwise liquidate the Litigation Trust Assets. The Litigation Trustee shall cause the Litigation Trust to perform its obligations under any non-prosecution agreementand/or joint prosecution and common intcrest agreement to which the Litigation Trust has succeeded or the Litigation Trustee is a party, and shall retain or destroy copies of any information that was provided or received pursuant to the tenns of any such agreement.
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the Litigation Trust and the (b) The Litigation Trustee shall maintain, in respect of holders of Litigation Trust lntercsts, books and records relating to the assets and the income of the Litigation Trust and the payment of expenses of the Litigation Trust and the Litigation Trustee, in such detail and for sueh period of time as may be necessary to enable it to make full and proper reports in rei:pect thereof in accordance with the provisions ofthis Agreement and applicable provisions oflaw. The Litigation Trustee shall provide any member of the Litigation Trust Advisory Board or, at its expense, any other Litigation Trust Beneficiary, with access to such books and records during normal business hours as may be reasonably requested with
advance notice.
4.9 Cash Payments. All distributions required to be made by the Litigation Trustee to thc holdcrs of Litigation Trust Interests shall be made in Cash denominated in United States dollars by checks drawn on a United States domestic bank selected by the Litigation Trustee or, at the option of the Litigation Trustce, by wire transfer from a United States domestic bank selected by the Litigation Trustee; provided, however, that Cash payments to foreign holders of Litigation Trust Interests may be made, at the option of the Litigation Trustee, in such funds and by such means as are necessary or customary in a particular foreign jurisdiction. All Cash of the Litigation Trust shall be maintained in an Approved Financial Institution.
4.10 Insurance. The Litigation Trust shall maintain customary insurance coverage for
the protection of
the Litigation Trust Advisory Board, and the Litigation Trust on and after the Effective Date as the Litigation Trustee determines to be reasonably appropriate in consultation with the Litigation Trust Advisory Board.
the Litigation Trustee, the members of any such other Person serving as an administrator and overseer of
ARTICLE V TAX MATTERS

5.1 Tax Treatment. The Debtors, the Reorganized Debtors, the Litigation Trustee,
and the holders of Litigation Trust Interests wil treat the Litigation Trust as a "liquidating trust"
within the meaning of
Treasury Regulation Section 301.7701-4(d) and any comparable provision
of slate or ocallaw. The Liiigation Trust shall be considered a "grantot' trust and is intended to comply with the requirements of a liquidating trust, which is a grantor trust, as set forth in Revenue Procedure 94-45, 1994-2 C.B. 684. Consistent with this treatment, for all federal, state, and local income tax purposes, each holder oran Allowed Claim in Classes C-i, C-2, and C-3, as applicable, shall be treated as transferring all of such Claim to the Debtors in exchange for such holder's share of the Litigation Trust Assets and then as transferring the holder's share of the Litigation Trust Assets (subject to such liabilities) to the Litigation Trust in exchange for the holder's Litigation Trust Interest. The holders of Litigation Trust Interests in the Litigation Trust wil be treated solely for tax purposes as the grantors and deemed owners ofthe Litigation Trust, and the Debtors, the Reorganized Debtors, the Litigation Trustee, and the Litigation Trust Beneficiaries will use consistent valuations of the Litigation Trust Assets (and liabilities) as of the Effective Datc in accordance with Section 1.3(d) hereof. The Litigation Trustee shall be authorized to takc any action necessary to maintain compliance with this Treasury Regulation or its successor that docs not contradict the tenns of this Agreement, the Plan, or the Confirmation
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Order. In the event the Litigation Trust shall fail or cease to qualify as a liquidating trust in
accordance with Treasury Regulations Section 30 1.7701 ~4(d), the Litigation Trustee shall take
such action as it shall deem appropriate to have the Litigation Trust cl::ssilied as a partnership for federal tax purposes under Treasury Regulations Section 301.7701-3 (but not a "publicly traded partnership" subject to Section 7704(a) of the Internal Revenue Code of 1986, as amended (the "Tax Code")), including, if necessary, creating or converting it into a Delaware limited liability partnership or limited liabilty company that is so classified.
the Litigation Trust shall be the "calendar year" as thosc tenns are defined in Section 441 of the Tax Code. The Litigation Trustee shall fie statements for the Litigation Trust as a grantor trust pursuant to Treasury Regulation Section 1.671 -4(a). The Litigation Trustee shall annually, within 75 days after the end of each calendar year, send to each record holder of a Litigation Trust Interest a separate statement setting forth the holder's share or items of income, gain, loss, deduction, or credit for such year and will instruct all slIch holders to report such items on their federal income tax returns for such year.
5.2 Tax Reporting. The "taxable year" of Such reporting shall also occur within 75 days of the dissolution of
the Litigation Trust. The
Litigation Trust's taxable income, gain, loss, deduction, or credit wil be allocated (subject to the Plan relating to Disputed Claims and Section 5.4 hereof) to the Litigation Trust provisions of Beneficiaries in 3ccordance with their relative Litigation Trust Interests in the Litigation Trust.
5.3 T3X Withholdings. The Litigation Trustee may withhold and pay to the appropriate taxing authority all amounts required to be withheld pursuant to the Tax Code, or any provision of any foreign, state, or local tax law with respect to any payment or distribution to the Litigation Trust Beneficiaries. All such amounts withheld, and paid to the appropriate taxing authority, shall be treated as amounts distributed to such Litigation Trust Beneficiaries for all this Agreement. The Litigation Trustee shall be authorized to collect such tax purposes of information from the Litigation Trust Beneficiaries (including, without limitation, social security numbers or other tax identification numbers) as it in its sole discretion deems necessary to effectuate the Plan, the Confirmation Order, and this Agreement, prior to making any distribution. The Litigation Trustee may refuse to make a distribution to any Litigation Trust
Beneficiary that fails to furnish such information in a timely f3shion, until such information is
delivered; provided, however, that upon the Litigation Trust Beneficiary's delivery of such information, thc Litigation Trustce shall make such distribution to which the Litigation Trust Beneficiary is entitled, without any interest or income earned thereon.
Litigation Trust the Litigation Trust allocable to Disputed Claims, the Litigation Trustee shall cause the Litigation Trust to pay any taxes imposed on thc Litigation Trust by any United States federal, state, or local, or any non United States taxing authority. The amount of such taxes paid by the Litigation Trust with respect to a Disputed Claim, (i) will reduce the amount distributed with respect to such Disputed Claim to the extent it becomes an Allowed Claim, and (ii) to the extent such Disputed Claim does not become an Allowed Claim, wil reduce distributions ratably to all Holders in the same Class as such Disputed Claim; provided, however, that any taxes that reduce distributions pursuant to the foregoing clauses (i)
5.4 Disputed Claims Tax Matters. With respect to any proceeds of Assets and any other income or gain of
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and (ii) shall, for all purposes of Holders of
this Agreement, be treated as amounts distributed to those Claims whose distributions arc so reduced.
5.5 Foreign Tax Matters. The Litigation Trustee shall take all reasonable steps, any necessary documentation or elections with any non United States tax authority, to minimize, under non United States law: (i) thc liabilties of the Litigation Trust and the Litigation Trust Beneficiaries for non United Stales taxes, interest, penalties, and other
inchiding the filing of
the Litigation Trust to fie non United States tax or inronnation returns or other documentation; and (iii) the obligations of the Litigation Trust to withhold and remit amounts to any non United States taxing authority in respect of payments or distributions of income or property by the Litigation Trust. The Litigation Trustee shall duly comply on a timely basis with all obligations, and satisfy all liabilities, imposed on the Litigation Trustee or the Litigation Trust under non United States law relating to taxes. Without the consent of the members of the Litigation Trust Advisory Board, the Litigation Trustee, or any other legal representative of the Litigation Trust, shall not distribute Litigation Trust Assets or proceeds without having first obtained all certificates required to have been obtained under thereof applicable non United States law relating to taxes.
amounts; (ii) the obligations of
ARTICLE VI POWERS OF AND LIMITATIONS ON TilE LITIGATION TRUSTEE

6.1 Powers of the Litigation Trustee. The Litigation Trustee shall have only such rights, powers, and privileges expressly set forth in the Plan and this Agreement, and such other powers reasonably incident thereto, and as otherwise provided by applicable law. Subject to the other provisions herein, including, without limitation, the provisions relating to the Litigation Trust Advisory Board in Section 6.3, and subject to Article IV.P. of the Plan, the Litigation Trustee shall be expressly authorized to undertake the following actions, in the Litigation Trustee's good faith judgment, in the best interests ofthe Litigation Trust Beneficiaries and to maximize net recoveries therefor:
(a) Hold, administer, prosecute, settle, or otherwise compromise or abandon
Causes of Action in respect of Litigation Trust Assets, including, without limitation, take any action with respect to appeals, counterclaims, and defenses of, or with respect to, sueh Causes of Action or otherwise in respect of the Litigation Trust Assets;
(b) Liquidate the Litigation Trust Assets;
(c) Execute any documents and take any other actions related to, or in
connection with, the liquidation of the Litigation Trust Assets and the exercise of
the Litgation
Trustee's powers granted herein;

(d) Hold legaliiile to any and all rights of
the Litigation Trust Beneficiaries
in, to or arising from the Litigation Trust Assets;
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(c) Protect and enforce the rights to the Litigation Trust Assets vested in the
Litigation Trustee by this Agreement by any method deemed reasonably appropriate, including, without limitation, by judicial proceedings or pursuant to any applicable bankruptcy, insolvency, moratorium, or similar law and general principles of equity;
the Litigation Trust Assets to the appropriate (t) Make distributions of Litigation Trust Beneficiaries in accordance with this Agreement, the Plan, and the Confirmation Order;
necessary, any and all tax returns with respect to the (g) Prepare and fie, if Litigation Trust and pay laxcs properly payable by the Litigation Trust, if any;
(h) Prepare and make all necessary fiings in accordance with any applicable
law, statute, or regulation, including, but not
limited to, the Exchange Act;
(i) Determine and satisfy from the Litigation Trust Assets any and all taxes
and ordinary course liabilities, including reasonable professional fees and expenses, created, incurred or assumed by the Litigation Trust;
u) Retain, as an expense of
Professionals as may be appropriate to perform the duties required of
the Litigation Trust, Litigation Trust the Litigation Trustee
hereunder or n the Plan;

(k) Invest monies received by the Litigation Trust or Litigation Trustee or
otherwise held by the Litigation Trust or Litigation Trustee in accordance with Section 6.6 hereof, limited, however, to such investments that are consistent with the Litigation Trust's status
as a liquidating trust within the meaning of
Treasury Regulation Section 301.770l-4(d);
(i) In the event that the Litigation Trustee determines that the Litigation Trust
Beneficiaries or the Litigation Trust may, wil or have become subject to adverse tax consequences, take such actions that will, or are intended to, alleviate such adverse tax consequences;
(m) In the event that the Litigation Trust shall fail or cease to qualify as a Treasury Regulations Section 30 l.7701-4(d), take any and all necessary actions as it shall deem appropriate to have the Litigation Trust classified as a partnership for federal tax purposes under Treasury Regulations Section 301.7701-3 (but not a "publicly traded partnership" subject to Section 7704(a) of the Tax Code), including, if necessary, creating or converting the Litigation Trust into a Delaware limited liability partnership or limited liabilty company that is so classified;
liquidating trust within the meaning of
which the Litigation Trust or the (n) Create sub-trusts or title vehicles of Litigation Trust Beneficiaries hold the beneficial or ownership interests, as applicable;
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(0) Provide periodic reports and updates regarding the status of administration of
the
the Litigation Trust in accordance with Section 4.5:

(p) Purchase customary insurance coverage in accordance with Section 4.10
hereof;
(q) Perform such functions and take such actions with respect to the Litigation Trust as are provided for or permitted in the Plan, the Confirmation Order, this Agreement or any other agreement executed pursuant to the Plan;
(r) Take any ofthe forgoing actions, and execute any documents relating
thereto, in the Litigation Trustee's own name, on behalf of
the Litigation Trust; and
(s) Take any other actions that the Litigation Trustee, in consultation with the Litigation Trust Advisory Board, deems necessary and appropriate to carry out the purposes of this Agreement.
For he avoidance of doubt, in accordance with Article IV.P. of the Plan, neither the Litigation Trust nor the Litigation Trustee shall have the right to commence any litigation against the Rhodes Entities untilihe Bankruptcy Court rules on the allowance of the Rhodes Entities Claims set forth in Proofs afClaim, included in the Debtors' Schedules or otherwise set forth in the Mediation Temi Sheet. Notwithstanding anything to the contrary set forth herein or in the Plan, the Reorganized Debtors shall not pursue Claims under Bankruptcy Code section 547 against any Creditor whose Claim is purchased in accordance with Article VII.G.
6.2 Establishment ofthe Litigation Trust Advisory Board.
comprised of
(a) The Litigation Trust Advisory Board shall have i-i members and be the Persons identified on, and in accordance with the tenns of, Annex I_I hereto.
(b) As soon as practicable after the creation of
the Litigation Trust, the
Litigation Trust Advisory Board shall adopt bylaws approved by all ofthe members that are consistent with the terms and conditions of this Agreement and include such other provisions as the Litigation Trust Advisory Board decms necessary or appropriate. Such bylaws may include, but shall not necessarily be limited to, guidelines for, among other matters, participation by Litigation Trust Advisory Board members in meetings and for removal of Litigation Trust Advisory Board members.
(c) Each Litigation Trust Advisory Board member shall designate (i) one or
the Litigation Tru~t Advisory Board and (ii) an alternate representative to attend meetings and participate in other activities of the Litigation Trust Advisory Board when the representatives designated pursuant to clause (i) above are unavailable to participate in such meetings and activities.
more representatives who shall attend meetings of and participate in other activities of
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(d) The purpose of liquidation and distribution of accordance with the terms of
the Litigation Trust Advisory Board shall be to oversee the the Litigation Trust Assets by the Litigation Trustee, in this Agreement, the Plan, and the Confirmation Order.
the Litigation Trust Advisory Board shall the Litigation Trust Advisory Board then serving; provided, however. that, for purposes of determining whether a quorum is present at such a meeting, a member ofthe Litigation Trust Advisory Board shall be deemed present if a representative of the member is attending in person, by telephone, or by proxy.
(e) A quorum for meetings of consist ofa majority of the non-recused members of
(f) Except as expressly provided herein, the affrmative vote of a majority of

the Litigation Trust Advisory Board shall be the act of the Litigation Trust Advisory Board with respect to any matter that requires the determination, consent, approval, or agreement of the Litigation Trust Advisory Board. In all matters submitted the non-recused members of
to a vote otthe Litigation Trust Advisory Board, each Litigation Trust Advisory oard member
shall be entitled to cast one vote, which vote shall be cast personally by such Litigation Trust Advisory Board member or by proxy. In a matter in which the Litigation Trustee cannot obtain
direction or authority from the Litigation Trust Advisory Board, the Litigation Trustee may fie a
motion, on notice to the Litigation Trust Advisory Board members, requesting such direction or authority from the Bankruptcy Court.
(g) A Litigation Trust Advisory Board member and its representative shall be
recused from the Litigation Trust Advisory Board's deliberations and votes on any matters as to which such member has a conflcting interest. If a Litigation Trust Advisory Board member or its representative does not recuse itselftrom any such matter, that Litigation Trust Advisory Board member and its representative may be recused from such matter by the majority vote of the remaining members otthe Litigation Trust Advisory Board that arc not recused from the matter. In such event, such recused member of the Litigation Trust Advisory Board can challenge such decision of the non-recused members of the Litigation Trust Advisory Board with
the Bankruptcy Court, which shall have
jurisdiction under the rlan to adjudicate such matter.
(h) Litigation Trust Advisory Board members shall be reimbursed by the
Litigation Trust for reasonable, documented out-or-pocket business expenses, other than attorneys' and other professionals' fees, incurred in connection with their service on the Litigation Trust Advisory Board. Litigation Trust Advisory Board members shall not receive any other compensation from the Litigation Trust for their services as Litigation Trust Advisory Board members.
6.3 Approval of the Litigation Trust Advisory Board. Notwithstanding anything In this Agreement to the contrary, the Litigation Trustee shall submit to the Litigation Trust Advisory Board for its review and prior approval the following malters and any other matters that the Litigation Trust Advisory Board may direct the Litigation Trustee to submit for its approval or that expressly require the approval of the Litigation Trust Advisory Board pursuant to the terms of this Agreement:
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITIEE
(a) Any proposed final settlement or disposition in connection with a

Litigation Trust Asset that has an asserted value of greater than $1,000,000; provided, that the Litigation Trustee will be authorized and empowered to take sueh aclion without any further (i) action by the Litigation Trust Advisory Board or (ij) order of the Bankruptcy Court, after at least
1101 Business Days written notice to thc mcmbers of either (A) no objection is received from any member of the Litigation Trust
Advisory Board and
the Litigation Trust Advisory Board or (B) subject to a further written agreement between the Litigation Trustee and the Litigation Trust
Advisory Board;
(b) Any transaction to sell, assign, transfer, or abandon any other Litigation
Trust Assets in which the amount of
the transaction exceeds such amount as may bc dctermined from time to time by the Litigation Trusl Advisory Board;
(c) Determinations of the amounts of
the Expense Reserve and the Litigation
Trust Assets Available for Distribution;

the date and amount of all distributions madc on dates other than a Distribution Date and determinations to defer dislributions otherwise required on a Distribution Date;
(d) Determinations of
(e) Any determinations to retain Litigation Trust Professionals (as defined
below);
(f) Any determinations to initiate lawsuits or proceedings;
(g) Any actions that would give rise to or alleviate adverse tax consequences to the Litigation Trust or the Litigation Trust eneficiaries; and
(h) The reports and budgets described in Section 4.5(a), (b) and (d).
the Litigation Trust Advisory Board to any the Litigation Trustee with respect to the Litigation Trust Assets within the time periods prescribed herein, and the Litigation Trustee is not authorized to settle as a result of such objection, then (i) if the Litigation Trust Advisory Board member(s) withdraws for any reason its objection to the proposed action, the Litigation Trustee may pursue the proposed action in accordance with the procedures outlined above or (ii) if the Litigation Trust Advisory Board member(s) does not withdraw its objection, the Litigation Trustee wil have the option of (A) foregoing the proposed course of action that is the subject ofthe Litigation Trust Advisory Board member(s)' objection, (B) modifying the proposed course of action in a way that results in the Litigation Trust Advisory Board member(s) withdrawing its objection, or (C) following five
If any objection is interposed by a member of proposed action of Business Days' written notice to the Litigation Trust Advisory Board, seeking an order of
the
Bankrptcy Court authorizing the Litigation Trustee to pursue the proposed course of action over the Litigation Trust Advisory Board member(s)' objection.
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PREUMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
the Litigation Trust Assets shall be 6.4 Limitations on Litigation Trustee. No part of used or disposed of by the Litigation Trustee in furtherance of any trade or business. The the Litigation Trust, hold the Litigation Trust out as a trust Litigation Trustee shall, 011 behalf of in the process or liquidation and not as an investment company. The Litigation Trustee shall not the Litigation Trust as a engage in any investments or activities inconsistent with the treatment of liquidating trust within the meaning ofTrcasury Regulations Section 30L.7701-4(d) while the the Litigation Trust (or Litigation Trust qualifies as a liquidating trust; orovided, however, that if a Delaware limited liability or limited liability partnership into which it shall be converted) shall be classified as a partnership for federal tax purposes under Treasury Regulations 301.7701-3 (but not a "publicly traded partnership" subject to Section 7704(a) oftlie Tax Code), the foregoing restrictions shall not apply. The Litigation Trustee shall be restricted to the liquidation the Litigation Trust Beneficiaries of the Litigation Trust Assets on behalf, and for Uic benefit, of Litigation Trust Assets for the purposes set forth in this and the distribution and application of
Agreement, the Plan, and the Confirmation Order, and the conservation and protection of Litigation Trust Assets and the administration thereof in accordance with the provisions of
the this
Agreement, the Plan, and the Confirmation Order.

6.5 Agents and Professionals; Employees. The Litigation Trust may, but shall not be
required to, from time to time enter into contracts with, consult with and retain, as approved by the Litigation Trust Advisory Board, independent contractors, including attorneys, accountants, appraisers, disbursing agents or other parties deemed by the Litigation Trustee to have the Litigation Trust, qualifications necessary or desirable to assist in the proper administration of including any estate professionals retained during the bankruptcy cases as may be appropriate in the circumstances (collectively, "Litigation Trust Professionals"). The Litigation Trustee shall pay the reasonable fees and expenses of the Litigation Trust Professionals out of the Litigation Trust Assets in the ordinary course of business without the need for approval of the Bankruptcy Court. The Litigation Trust may, but shall not be required to, from time to time, employ Litigation Trust Professionals in such capacities as may be approved by the Litigation Trust Advisory Board. In addition, the Litigation Trust may enter into an agreement with the Debtors
to utilize the services of one or more employees of
the Debtors.
6.6 Investment of
by the Litigation Trust Advisory Board, invest the proceeds of
Litigation Trust Monies. The Litigation Trustee shall, as approved the Litigation Trust received by
the Litigation Trustee or otherwise held by the Litigation Tnistee in highly~rated short-term
term shall be consistent with the obligations to pay costs, this Agreement, expenses, and other obligations and make distributions under Article IV of which investments shall consist of (a) short-term investments issued or guaranteed by the United the United States, (b) other short-term States or by a department, agency, or instrumentality of instruments of the highest credit rating available of two nationally recognized rating agencies, or (c) other short-term investments approved by the Litigation Trust Advisory Board.
investments of which the length of
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST UEN STEERING COMMITTEE
ARTICI-E VII L1T1GA TlON TRUSTEE I LITIGATION TRUST ADVISORY BOARD

the rights and powers vested in it by this Agreement, the Plan and the Confirmation Order, and use the same degree of care and skil in its exercise as a prudent person would exercise or use under the circumstances in the conduct of its own affairs. No provision of this Agreement, the Plan or the Confirmation Order shall be construed to relieve the Litigation Trustee from liabiliiy for its own gross negligence, rraud, or willful misconduct, except that the Litigation Trustee shall not be liable for any error orjudgment or any action taken in good faith in reliance upon the advice of professionals retained by the Litigation Trustee in accordance with this Agreement.
7.1 Generally. The Litigation Trustee shall exercise such of
7.2 Relance by Litigation Trustee. Except as otherwise provided in this Agreement,
the Plan or the Confinnation Order:

(a) The Litigation Trustee may rely and shall be protected in aciing upon any
resolution, statement, instrument, opinion, report, notice, request, conscnt, order, or other paper or document reasonably believed by the Litigation Trustee to be genuine and to have been signed or presented by the proper party or parties; and
(b) The Litigation Truslee may absolutely and unconditionally presume that any
other parties purporting to give any notice of instructions in writing has been duly authorized to do so, and may rely on such notice; and
(c) Persons (including any Litigation Trust Professionals retained in
accordance with this Agreement) engaged in transactions with the Litigation Trustee shall
look
only to the Litigation Trust Assets to satisfy any liability incurred by the Litigation Trustee to such person in carrying out the terms of this Agreement, the Plan, or the Confirmation Order, and the Litigation Trustee shall have no personal or individual obligation to satisfy any such liability.
7.3 Liability to Third Persons. No Litigation Trust Beneficiary shall be subject to any
liability whatsoever, in tort, contract, or otherwise, to any person in connection with the Litigation Trust Assets or the affairs orthe Litigation Truslee. The Litigation Trustee, the Litigation Trust Professionals, and the members of the Litigation Trust Advisory Board shall not be subject to any personal liability whatsoever, in lort, contracl, or otherwise, to any person in connection with the Litigation Trust Assets or the affairs of the Litigation Trust, except for its own gross negligence, fraud, or willful misconduct, and all such persons shall look solely to the Litigation Trust Assets for satisfaction of claims orany nature arising in connection with affairs or the Liiigation Trust. Other than as set forth in the Plan or in the Confirmation Order, nothing in this Section 7.3 shall be deemed to release any Litigation Trust Beneficiary from any actions or omissions occurring prior to the Effective Date.
personal 7.4 Nonliabiltv of Litigation Trustee for Acts of
Others. Nothing contained in this
Agreement, the Plan, or the Contrmation Order shall be deemed to be an assumption by the
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Litigation Trustee of any of the liabilities, obligations, or duties of the Debtors or Litigation Trust Beneficiaries and shall not be deemed to be or contain a covenant or agreement by the Litigation Trustee to assume or accept any such liability, obligation, or duty. Any successor Litigation Trustee may accept and rely upon any accounting made by or on behalf of any predecessor Litigation Trustee hereunder, and any statement or representation made as to the assets comprising the Litigation Trust Assets or as to any other fact bearing upon the prior administration oftlie Litigation Trust, so long as it has a good faith basis to do so. A Litigation Trustee shall not be liable for having accepted and relied in good faith upon any such accounting, statement, or representation if it is later proved to be incomplete, inaccurate, or untrue. A Litigation Trustee or successor Litigation Trustee shall not be liable for any act or omission of any predecessor Litigation Trustee, nor have a duty to enforce any claims against any predecessor Litigation Trustee on account of any such act or omission, unless directed to do so by the Litigation Trust Advisory Board.
7.5 Indemnity. The Litigation Trustee, the members of the Litigation Trust Advisory Board, and their respective agents, employees, offcers, directors, professionals, attorneys, accountants, advisors, representatives, and principals (collectively, the "Indemnified Parties") shall be indemnified and held harmless by the Litigation Trust, to the fullest extent permitted by law, solely from the Litigation Trust Assets, including any insurance obtained by the Litigation Trust for such purposes, for any losses, claims, damages, liabilities, and expenses, including, without limitation, reasonable attorneys' fees, disbursements, and related expenses which the Indemnified Parties may incur or to which the Indemnified Parties may become subject in connection with any action, suit, proceeding, or investigation brought or threatened against one the Indemnified Parties on account of or more of the acts or omissions of the Litigation Trustee or the members of the Litigation Trust Advisory Board solely in their capacity as such; provided, however, that the Litigation Trust shall not be liable to indemnify any Indemnified Party for any act or omission constituting gross negligence, fraud, or willful misconduct. Notwithstanding any provision herein to the contrary, the Indemnified Parties shall be entitled to obtain advances from the Litigation Trust to cover their reasonable expenses of defending themselves in any action brought against them as a result olthe acts or omissions, actual, or alleged, of an Indemnified Party in its capacity as such; provided, however. that the Indemnified Parties recciving such advances shall repay the amounts so advanced to the Litigation Trust upon the entry of a Final Order finding that such Indemnified Parties were not entitled to any indemnity under the provisions of this Section 7.5. The foregoing indemnity in respect of any Indemnifed Party shall survive the termination of such Indemnified Party from the capacity for which they arc indemnified.
7.6 Compensation and Expenses. The Litigation Trustee shall receive fair and reasonable compensation for its services in accordance with the compensation schedule attached
as r 1 hereto. The Litigation Trustee shall be entitled to reimburse itself and the
Litigation Trust Professionals from the Litigation Trust Assets on a monthly basis for all
reasonable out-or-pocket expenses actually incurred by it in the performance of
its duties in
accordance with this Agreement, and, when due, professionals' fces in accordance with the terms of such Litigation Trust Professionals' retention.
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ARTICLE VII SUCCESSOR LITIGATION TRUSTEES

8.1 Resignation. The Litigation Trustee may resign from the Litigation Trust by
giving at least 30 days prior written notice thereof
to cach member orihe Litigalon Trust
Advisory Board. Such resignation shall become effective on the later to occur of (a) the date the appointment of a successor specified in such writtcn notice or (b) the effective date of Litigation Trustee in accordance with Section 8.4 hereof and such successor's acceptance of such appointment in accordance with Section 8.5 hereof.
8.2 RemovaL. The Litigation Trustee may be removed, with or without cause, by an
affrmative vote of66.66% of
tile Litigation Trust Advisory Board. Such removal shall become effective on the date specified in such action by the Litigation Trust
the members of
Advisory Board.
8.3 Effect of
Resignation or RemovaL. The resignation, removal, incompetency,
bankruptcy, or insolvency orthe Litigation Trustee shall not operate to terminate the
this Litigation Trust or to revoke any existing agency created pursuant to the terms of Agreement, the Plan, or the Confirmation Order or invalidatc any actiOn theretofore taken by the Litigation Trustee. All fees and expenses incurred by the Litigation Trustee prior to the resignation, incompetency, or removal of the Litigation Trustce shall be paid from the Litigation Trust Assets, unless such fees and expenses are disputed by (a) the Litigation Trust Advisory Board or (b) the successor Litigation Trustee, in which case the Bankruptcy Court shall resolve the predecessor Litigation Trustee that are the dispute and any disputed fees and expenses of subsequently allowed by the Bankruptcy Court shall be paid from the Litigation Trust Assets. In the event of the resignation or removal ofthe Litigation Trustee, such Litigation Trustee shall: (i) promptly execute and deliver such documents, instruments, an other writings as may be reasonably requested by the successor Litigation Trustee or directed by the Bankruptcy Court to efTect the termination of such Litigation Trustee's capacity under this Agreement; (ii) promptly deliver to the successor Litigation Trustee all documents, instruments, records, and other writings related 10 the Litigation Trust as may be in the possession of such Litigation Trustee;
provided, ho\'\'cver. that such Litigation Trustee may retain one copy of each of such documents
for its purposes, subject to the terms of any joint prosecution and common interest agreement to which the Litigation Trustee is a party; and (iii) othcrwisc assist and cooperate in ellecting the assumption of its obligations and functions by such successor Litigation Trustee.
8.4 Appointment of incompetency, bankruptcy, or insolvency of Successor. In the event of
the resignation, removal,
the Litigation Trustee, a vacancy shall be deemed to the Litigation Trust Advisory Board. In the event that a successor Litigation Trustee is not appointed within 30 days after the date of Stich vacancy, the Bankruptcy Court, upon its own motion orthe motion ora Advisory Board, shall appoint a Litigation Trust Beneficiary or member of the Litigation Trust successor Litigation Trustee.
exist and a successor shall be appointed by the affrmative vote of 66.66% of
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8.5 Acceptance of Appointment by Successor Litigation Trustee. Any succcssor
Litigation Trustee appointed hcreundcr shall execute an instrument accepting its appointment and shall deliver one counterpart thereof to the Bankruptcy Court for fiing and, in case of the Litigation Trustee's resignation, to the resigning Litigation Trustee. Thereupon, such successor Litigation Trustee shall, without any further act, become vested with all the liabilities, duties, powers, rights, title, discretion, and privileges of its prcdeccssor in the Litigation Trust with like effect as if originally named Litigation Trustee and shall be deemed appointed pursuant to
Bankruptcy Code section 1123(b)(3)(). The resigning or removed Litigation Trustee shall duly
assign, transfer, and deliver to such succeSsor Litigation Trustce all property and money held by such retiring Litigation Trustee hcreunder and shall, as directed by the Bankruptcy Court or reasonably requested by such successor Litigation Trustee, exccute and deliver an instrument or instruments conveying and transferring to such succcssor Litigation Trustee upon the Litigation Trust herein expressed, all the liabilities, duties, powers, rights, iitle, discretion, and privileges of such resigning or removed Litigation Trustee.
ARTICLE IX MISCELLANEOUS PROVISIONS

9.1 Govcrning Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without reference to conflcts of
law).
9.2 Jurisdiction. Subject to the proviso below, the parties agree that the Bankruptcy
Court shall have exclusive jurisdiction over thc Litigation Trust and the Litigation Trustee, including, without limitation, the administration and activities of the Litigation Trust and the Litigation Trustee; provided, however, that notwithstanding the foregoing, the Litigation Trustee
shall have power and authority to bring any action in any court of competent prosecute any Causes or Action in respect of
jurisdiction to
the Litigation Trusls Assets.

this Agreement or the application
9.3 Severabilitv_ In the event any provision of thereof
to any person or circumstances shall be determined by Final Order to be invalid or
unenforceable to any extent, the remainder of this Agreement or the appl ication of such
provision to peri;ons or circumstances or in jurisdictions other than those as to or in which it is held invalid or unenforceable, shall not be affected thereby, and each provision of this
Agrcemcnt shall be valid and enforceable to the fullest extent permitted by law.
9.4 Notices. Any notice or other communication required or permitted to be made
under lhis Agreement shall be in writing and shall be deemed to have been sufficiently given, for all purposes, if delivered personally or by telex, facsimile, or other telegraphic means, sent by nationally recognized overnight delivery service, or mailed by first-class maiL. The date of
receipt of such notice shall be the earliest orCa) the date of
actual receipt by the receiving part,
the transmission confirmation, or (d) three Business Days after service by first class mail, to the receiving party's below addressees):
(b) the date of personal delivery (or refusal upon presentation for delivery), (c) the date of
(i) irto the Litigation Trustee, to:
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE
TO FIRST LIEN STEERING COMMlnEE
(ii) if
to a mcmber ofthe Litigation Trust Advisory Board, to the

addrcss set forth on ( 1, or such other address as may be
provided to thc Litigation Trustee by such mcmber of
the
Litigation Trust Advisory Board.

(iii) if
to any Litigation Trust Beneficiary, to ihe last known address of such Litigation Trust Bcneficiary according to the Litigation Trustee's records; and
to the Reorganized Dcbtors, to:
(iv) if
with copy to:

i
9.5 Headin2S. The headings contained in this Agreement are solely for convenience
of reference and shall not affect the meaning or interpretation of this Agreement or of
any term
or provision hcreof.
this Agreement arc intended to supplement the lerms provided by the Plan and the Confirmation Order. Accordingly, in the event of any direct conflct or inconsistency between any provision of ihis Agreement, on (he one hand, and the provisions ofihe Plan and the Confirmation Order, on the other hand, the provisions of the Plan and the Confirmation Order, as applicable, shall govern and control.
9.6 Plan and Confirmation Order. The terms of
9.7 Cooperation. The Debtors and/or the Reorganized Debtors shall turn over or otherwisc make available to the Litigation Trustee at no cost to the Litigation Trust or the Litigation Trustee, copies of all books and records reasonably required by ihe Litigation Trustee to carry out its duties hereunder, and agree to otherwise reasonably cooperate with the Litigation Truslee in carrying out iis duties hereunder.
9.8 Entire Agreement. This Agreement and thc Exhibits and Annexes aUached hereto
contain the entire agreement belweenihe parties and superscdc all prior and contemporaneous agrcements or understandings between the partics with rcspect to the subject matter hereof. To the extent there is inconsistency between this Agreemenl and the Plan, the Plan shall control; provided, however, that the Confirmaiion Order shall control over the Plan.
9.9 Amendment. This Agreement may be amended by (a) order of Court or (b) approval by the Litigation Trustee and all members of
the Bankruptcy
the Litigation Trust Advisory Board; provided, however, that the approval of the Bankruptcy Court shall be required for any changes or amendments to this Agreement that are inconsistent with the lerms oftlie Plan or the
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PRELIMINARY DRAFT
SUBJECT TO MODI
FICA TION
Confirmation Order. In the event that the Litigation Trust shall til or cease to qualify as a liquidating trust in accordance with Treasury Regulations Section 301.7701-4(d), this Agreement may be amended by the Litigation Trustee to the extent necessary for the Litigation Trustec (0 take such action as it shall dcem appropriate to have the Litigation Trust c1assiried as a
partnership for federal tax piirposes under Treasury Regulations Section 30 I .7701 -3 (but not a
tile Tax Code), including, if necessary, creating or converting it into a Delaware limited liability partnership or limited liability company that is so classified.
"publicly traded partnership" subject to Section 7704(a) of 9.10 Meanings of Other Terms. Except where the context otherwise requires, words importing the masculine gender include the feminine and the neuter, if appropriate, words importing the singular number shall include the plural number and vice versa and words importing persons shall include firms, associations, corporations, and other entities. All references hcrein to Articles, Sections, and other subdivisions, unless referring specifically to ihe Plan or provisions of (he Bankruptcy Code, the Bankruptcy Rules, or other law, statute or this regulation, refer to the corresponding Articles, Sections, and othcr subdivisions of Agreement, and the words herein and words of similar import refer to this Agreement as a whole this Agreement. The term and not to any particular Article, Section, or subdivision of "including" shall mean "including, without limitation."
9. i i Counteroarts. This Agreement may be executed in any number of counterparts,
which shall be deemed an original, hut such counterparts shall together constitute hut one and the same instrument. A facsimile or electronic mail signature of any party shall be considered to have the same binding legal effect as an original signature.
each of
(Remainder of I)age Blank - Signature Page Follows)
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IN WITNESS WHEREOF, he parties hereto have exccuted this Agreement or caused this Agreement to be duly executed by their respective offcers, representatives, or agents,
effective as otthe date first above written.
RHODES COMPANIES LLC, on its own bchalf as a Debtor and a Reorganizcd Entity and on bchalf of cach other Debtor and Reorganized Entity
Reorganized Debtor
1-
),as the
By: Name: Title:
By: Name: Title:
). as Litigation Trustcc
By: Name: Title:
26
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APACHE FRAMING, LLC
BATCAVE, LP
By:
Name: Title:
By: Name:
Title:
C&J HOLDINGS, INC.
BRAVO INC.
By:
By:
Name: Title:
Name: Title:
CHALKLINE, LP
ELKHORN INVESTMENTS,INC.
By:
By:
Name: Title:
ELKHORN PARTNERS, A NEVADA LIMITED P ARTNERSRIP
By: Name:
Name: Title:
GERONIMO PLUMBING, LLC

By: Name:
Title:
GLYNDA, LP
By: Name:
Title: GUNG-HO CONCRETE, LLC

By:
Title:
Name: Title:
27
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HERITAGE LAND COMPANY, LLC
JACKKNIFE, LP
By, Name:
By'
Name: Title:
Title:
JARUPALLC
By,
OVERFLOW, LP
By,
Name: Title:
I' ARCEL 20 LLC
Name: Title:
PINNACLE GRAING, LLC

By, Name:
By, Name: Title:
Title:
RHODES ARIZONA PROPERTIES, LLC
RHODES DESIGN AND DEVELOPMENT

CORP_
BY:.____mm_
Name: Title:
By: Name: Title:
RHODES HOMES AilZONA, LLC
RHODES RANCH GENERAL PARTNERSHIP
By'
BY:__m...
Name: Title:
Name: Title:
28
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RHODES RANCH GOLF AND COUNTRY CLUB
RHODES REALTY, INC.
By: Name: Title:
By: Name: Title:
SIX FEATHERS HOLDINGS, LLC
TICK, LP
By:~__
By:~ M ~
Name: Titlc:
Name: Title:
TRIBES HOLDINGS LLC

By:
TUSCANY ACQUISITIONS, LLC

By: Name: Title:
Name: Title:
TliSCANY ACQUISITIONS II, LLC

By:
TUSCANY ACQUISITIONS II, LLC
By:
Name: Title:
Name: Title:
TUSCANY ACQUISITIONS IV, LLC

By:
TUSCANY GOLF COUNTRY CLUB, LLC

By: Name: Title:
Name: Title:
29
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W ALLOARD, LP.
By: Name: Title:
30
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Annex A
The composition of the Litigation Trust Advisory Board shall be determined by the First Lien Steering Committee and shall be disclosed at or prior to the Plan confirmation hearing.
31
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Exhibit J
Newco LLC Operating Agreement
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PRELIMINARY DRAFT AGREEMENTSUBJECT TO CONTINUING AMENDMENT AND REVIEW
INEWCOj, LLC
(A DELAWARE LIMITED LIABILITY COMPANY)
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
JANUARY I j,2010
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TABLE OF CONTENTS
PaRe
Section I.
Definitions; Rules of Construction. .................................................................... I
Section 2. Section 3. Section 4. Section 5.
Name; Company History; Bylaws; Schedule of Members; Capital
Contribulions..................................................................................................2
Purpose; No Terinination. ....................... ..............................................................3
Offces...............................................................................................................3
Managemenl of the Company; Board of
Managers. ................................................3
Section 6.
Scction 7. Section 8.
Company Actions Requiring Approvals. ............................................................5

Authorized Units; Preemptive Rights. .................................................................. 7
Conversion Rights of
Class B Units. ..................................................................9
Scction 9.
Section 10.
Section 11.
Voting Rights. ................................................................................................. i 0

Representations by Members Upon Acquisition or Receipt of
Units................. i 0
Distributions Generally. ..................................................................................12

Discretionary and Liquidating Distributions. .....................................................12
Section 12.
Section 13.
Tax DistributiollS....................................................................... ........................12

Distributions In Kind. .......................................................................................... i 3
Capital Accounts. ................................n............................................................13
Hook Allocations of
Section 14. Section 15. Section 16. Section 17. Scction 18. Section 19.
Section 20.
Net Profit and Net Loss. .....................................................13
Special Book Allocations. ................................................................................... 1 4

Tax A lIocations. ................................n...............................................................15
Liability for Return of CapitaL. ........................................................................... i 5
Tax Report and Elections. ........................................................................... ....16

Transfer Restrictions. ........................................................................................ i 8
Section 2 I.
Section 22. Section 23.
\Vithdrawal.......................................................................................................20
Additional Mcmbcrs. ............................................................................................20
Dissolving Events. .............................................................................................21
Dissolution and Winding-Up. .............................................................................2 i
Distributions in Cash or in Kind Upon Dissolution..................m..................21

Termination Upon Dissolution. ...........................................................................22
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Section 28. Information Rights; Observer Rights; Confidentiality; Other Restrictive
Covenants.....................nh.........................................__.......................................22
Section 29. Registration Rights...........................................................................__...................23
Section 30. Exculpation and Indemnification. ............................................__...........................23
Section 3 i. Insurance. .......................................................................................................__25

Section 32. Competitive Opportunity. 00................__..............................................................25
Section 33. Notices. ..........................................................................................__............26

Section 34. Amendments. ...........h..........................................nh......................................26
Section 35. Certain Members...n...n.......................................__........................................00...27
Section 36. Management Members' Services. ...........................................................h........27

Section 37. No Conflicting Agreements. .........................................00...................................27
Section 38. Entire Agreement. ..................................__..........................................................27
Section 39. Governing Law; Jurisdiction, Waiver of Jury TriaL. .....................................28

Section 40. No .I'hird Party Beneficiaries. ..........................................................................28
Section 4 i. Further Assurances. ......................................................................00......................28

Section 42. Counterparts. .............................................................................______...........__.......29
Section 43. Separability of Provisions. ...........................................................m.................29
Section 44. Spousal Consent. .................................................m...........................................29

Section 45. Reeapitali7..tions, Exchanges, Splits, Etc. ...............................................00.......29
Section 46. Remedies. .........................................................................................................30
"
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Annex. Schedules and Exhibits
Annex
Annex I
Definitions
Schedules
Schedule I
Schedule or
Members and Unii Ownership
Exhibits
Exhibit A
Bylaws of
the Company
Exhibit 8
Joinder Agreement
Spoiisal Consent
Exhibit C
III
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PRELIMINARY DRAFT AGREEMENTSUBJECT TO CONTINUING AMENDMENT AND REVIEW

LIMITED LIABILITY COMPANY OPERATING AGREEMENT, dated os of
( ),2010 (this "Agreement"), of (Newco), LLC, a Dclawarc limited liability
company (the "Comoany"), among the Company and the parties listed on Schedule I hereto from
time to
time_
WHEREAS, the parties hereto arc entering into this Agreement for the purpose of governing the affairs of, and the conduct ofthc busincss of, a limited liability company formed pursuant to the provisions of the Delaware Limited Liability Company Act, codified in the Delaware Code I\nnotated, Title 6, Section 18~iOI, et seq., as the same may be amended from time to time (the "Dclawarc Act").
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration, the receipt and suffciency of which are hereby acknowledged, the parties hereto agree as set forth below.
Section 1.
(a)
Definitions; Rules of Construction.

Capitalized terms used in this Agreement are defincd in Annex I hereto.
the masculine, feminine or neuter forms shall also (b) The mie herein of denote the other forms, as in each case the context may require.
(c) Except when the context requires otherwise, any reference in this
Agreement to a singular number shall include the pluraL.
(d) Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be dcemcd to be followed by the words "without limitation," whether or not so followed.
(e) All references to "$" or dollar amounts are to lawful currency of
the
United States of America, unless otherwise expressly stated_

(f) Captions contained in this Agreement are inserted only as a matter of
this Agreement or of any of its provisions. All refcrences in this Agreement to any numbered Sections are, unless otherwise indicated, references to the Sections of this Agreement which are so numbered.
convenience and in no way deline, limit, extend or describc the scope or intent of
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PRELIMINARY DRAFT SUBJECTTO MODIFICATION
All references to the numbered or lettered Exhibits are rcfcrences to the Exhibits so numbcrcd or lettcred which are appcndcd to this Agrcemcnt, as such Exhibits may be amended, supplemented or othcrwise modified from time to time. Such references to Exhibits are to be construed as incorporating by reference the conlcnts of each Exhibit to which such reference s made as though such contents were set out in full at the place in this Agreement where such rcfcrencc is made.
Section 2.
Name; Company History: vlaws~ Schedule of
Members; Capital
Contributions.
the Company shall be "fNewco), I.I.C" or such other name as (a) The name of the Board of Managers may from time to time hereafter designate; provided, however. that any such name shall comply with the Delaware Act.
(b) The Company was formed upon the execution and filing by r 1
(such Person being hereby authorized to take such action) with thc Secretary of State otthe Statc the Company on r l. of Delaware of a ccrtificate of formation (the "Certificate") of
2009. The parties hcreto ratify and confirm the fiing of
the Certificatc.
A (as amcnded, the Company attached hereto as Exhibit (c) The bylaws of restated, supplemented or otherwse modified from timc to time. the "Bylaws") are hereby
adopted and approved by the Members.
(d) This Agreement (ineluding the definitions set forth in Annex I hereto) and
thc Bylaws arc intcndcd to serve as a "limited liability company agreement," as such term s defined in Section 18-101(7) otthe Delaware Act
(e) Thc name and business, mailing or residence address of each of Members of the Company are set forth on Schedule 1 hereto. The Board of
the
Managers shall
amend Schedule I from time to time to accurately rcflcct the namcs and business, mailing or the Members and each of the Persons who shall become Members residence addresses of each of after the Effective Date_ Any Person (other than a Member on the Effectivc Date) who holds Units in accordance with the tcrms hereof shall execute and deliver to the Company a Joinder Agreement, substantially in the form of Exhibit B hercto, pursuant to which such Pcrson will the terms and thcrcupon becomc a party to and be bound by and obligated to comply with all of
provisions of
this Agreement.
(f) CaDItal Contributions. No Member shall be obligated to make any Capital
Contributions to the Company. Subject to the approval of terms of
Managers and the other the Board of this Agreement, the Members may make additional Capital Contributions to tlit Company from time to time throug.h the purchase of additional Units.
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Section 3.
Purpose: No Termination.
the Company shall be to engage in any lawful business (a) The purpose of activitics that may be engaged in by a limited liability company organized under the Delaware Act, as such business activities may be determined by the Board ofManagcrs from time to time.
(b) No Member's death, status as a debtor in a bankruptcy case, disabilty,

resignation, retircment or other tcrmination of employmcnt with the Company or any Affliate
thereof shall result in the dissolution, winding up or termination of
the Company.
Section 4.
Offces.
(a) The principal offce ofthe Company, and such additional offces as the
Board of
Managers may establish, shall be locatcd at such place or placcs inside or outside the
State of Delaware as the Board of principal offce of
Managers may designate from time to time. The initial the Company is set forth in Section 33(a)(i).
Dclaware shall be the Company in the State of (b) The registcred offce of 1209 Orange Strect, Wilmington, Delaware 19801 or as hereafter determined by the Board of Managers in accordance with Delaware Aet. The registered agent ofihe Company for service of process at such addrcss shall be The Corpration Trust Company or as hereafter detemiined by Managers in accordance with Dclaware Act. the Board of
Section 5.
Managcment of the Company: Board of Managers.
(a) Subject to the delegation ofrighL.. and powcrs provided for herein and in
Managers shall havc the sole right to manage the business and affairs of the Company and shall have all powers and rights necessary, appropriatc or advisable to Managers the Company. The Board of effectuate and carry out the purposes and business of shall consist initially of five (5) Managers, appointed from time to time in accordance with this Agreement and the Bylaws. Notwithstanding the foregoing, upon the affmiative vote of a majority of the Board of Managers, the chief executive offcer or the senior represcntative of the Operations Manager, if any, may be appointed as a sixth Manager. Each Manager shall have one vote with respect to any matters that come before the Board of Managers. Each Member agrees to vote all of his Units on matters subject to the vote of such Member and to take all other necessary or desirable actions within his control (whcthcr in such Membcr's capacity as a Member or otherwise, and including, without limitation, attendance at meetings in person or by meetings), written consents in lieu of proxy for purposes of obtaining a quorum and exccution of and the Company will, as promptly as practicable, take all necessary and dcsirable actions within
the Bylaws, the Board of its control (including, without limitation, callng special meetings ofihe Board of the Members), so that each Manager on the Board of
Managcrs and
Managers shall be elected from nominees
determined, or rcmoved as dircctcd, as follows:

(i) for so long as thc Highland Managed Funds collectively continues
to own at least 15.0% of the outstanding Units (excluding any Securities of
the Company
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issued or granted to Managers, directors, offcers or employees of
the Company or its
Subsidiaries as incentive compensation for services), the Highland Managed Funds shall be entitled (A) to nominatc one individual to the Board of Managers to serve as Manager (the "Highland Manager") until his successor is elected and qualified, (B) to nominate each successor to the Highland Manager and (C) to direct the removal from the Board of Managers of tile Highland Manager nominated under the foregoing clauses (A) and (B).
(ii) For so long as Credit Suisse Loan Funding and Credit Suisse
SWAP continue to own, in the aggregate, at least 15.0% of (excluding any Securities of
the outstanding Units the Company issued or granted to Managers, directors, offcers or employees ofthe Company or its Subsidiaries as incentive compensation for services), Credit Suisse Loan Funding and Credit Suisse SWAP, eollectivcly, shall be entitled (A) to nominate one individual to the Board of Managers to serve as Manager (the "Credit Suisse Manager") until his successor is elected and qualified, (B) to nominate each successor to the Credit Suisse Manager and (C) to direct the removal from
the Board of Managers of the Crcdit Suisse Manager nominated under
the foregoing
clauses (A) and ().

(iii) For so long as CSAM and Candlewood continuc to own, in the
aggregate, at least 15.0% of
the Company issued or granted to Managers, directors, offcers or employees or the Company or its Subsidiaries as incentive compensation for services), CSAM and Candlewood, collectively, shall be entitlcd (A) 10 nominate one individual to the Board of Managers to serve as Manager (the "CSAM Manager") until his successor is c1ected and qualficd, (B) to nominate each successor to the CSAM Managcr and (C) to direct the Managers of the CSAM Manager noininated undcr thc removal from the Board of foregoing clauses (A) and (B).
the outstanding Units (excluding any Securities of (iv) The remaining Managers, and, to the extent that any of
the
Highland Managed Funds, Credit Suisse Loan Funding, Credit Suisse SWAP, CSAM or Candlewood loses its right to appoint a Manager pursuant to the nbove provisions, the rclevant board seat(s), wil thereafter be designated for nomination and election, and such the Members holding at least a Managers may be removed by an affrmative vote of the outstanding Class A Units (excluding any Member who has the right to majority of nominate a Mmiager pursuant to pamgraphs (i) through (iii) above for so long as such Mcmbcr has such right). Any Manager appointed pursuant to this Section 5(a)(iv) shall not bc an Affliate of any Member and the qualifications, experience, integrity, independence and disinterestedness of any such Manager shall be satisfactory to the Mt:mbcrs holding at least a majority of the outstanding Class A Units (excluding any Member who has the right to nominate a Manager pursuant to paragraphs (i) through (iii) above for so long as such Member has such right).
(b) Except to the extent any Member loses its rights to nominate a Manager as
set forth in Section 5(a), (i) no Manager elected pursuant to Section 5(a)(i), (ii) or (iii) may be the Member who is entitled to nominate such individual as a removed without the coiisent of
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the party that was entitled to nominate such Manager and (iii) the vacancy creatcd by any former Manager may only be filled by a nominee of the party that was entitled to nominate such former Manager.
Manager pursuant this Agreement, (ii) such Manager may only bc removed at the direction of
(c) Subject to the foregoing, in thc cvent a vacancy is created on the Board of
cause) of any Manager, each of
the death, disability, resignation or termination (with cause or without the Members hereby agrees that such vacancy shall be filled in accordance with the procedures set forth in this Section 5.
Managcrs by reason of
(d) The Company shall reimburse each Manager for all necessary and proper
costs and expenses (including reasonable and properly documented travel, lodging and meal expenses) incurred in connection with such Manager's attendance and participation at meetings of the Board of Managers to the extent not otherwise rcimbursed by the Company or any of its the Subsidiaries by virtue of the status of such Manager as aii employee or scrvice provider of Company or any of its Subsidiaries.
(e) The nominecs designated in Section Sea) wil be elected as Managers at
any annual or special meeting of
the the Members (or by written consent in lieu ofa meeting of Members) and will serve until their successors arc duly elected and qualiJicd pursuant to the their earlier death, disability, resignation, tems of this Agreement and the Bylaws or until their termination (with cause or without cause) or other removaL. The Members wil vote all of Units in order to elect or remove the Managers as designated pursuant to Section 5(a).
(f) No Member, by reason of such Member's status as a Member, shall have
any authority to act for or bind thc Company but shaH havc only the right to vote on or approve the actions to be voted on or approved by such Member as specified in this Agreement or the Bylaws or as required under the Delaware Act.
(g) The offcers ofthe Company shall be elected, removed and perform such
functions as are provided in the Bylaws. The Board of Managers may dclcgate to any officer of of the Company as the the Company or to any such other Person such authority to act on behalf Board of Managers may from time to time deem appropriate in its sole discretion.
Section 6.
Company Actions RCQuirine Approvals.

Managcrs and
(3) Without the affrmative votc of (x) the Board of (y) Members owning at least a majority of
the then outstanding Units, voting together as a single

the
class, the Company shall not, and shall cause each of its Subsidiaries not to, take any of
following actions:
(i) sell, transfer or otherwise dispose ofany asset of
the Company or
any of its Subsidiaries for consideration in excess of$20,OOO,OOO;
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(ii) sell, transfer or otherwise dispose of
the Rhodes Ranch master
planned community for consideration in excess of$(60,OOO,OOO) (such amount to be reduced by any net cash proceeds received by the Company for any prior sales of assets associated with the Rhodes Ranch master planned community);
(iii) sell, transfer or otherwise dispose otthe Tuscany master planned
community for consideration in excess of$f40,000,OOOj (such amount to be reduced by any net cash proceeds rcceived by the Company for any prior sales of assets associated with the Tuscany mastcr planned community);
(iv) enter into any rccapitalization, rcorganization, consolidation or
the 00,000,000) (such amount to be $(1 reduced by any nel cash proceeds received by the Company for any prior recapitalizations, reorganizations, consolidations or asset sales); or
merger of the Company or sell all or substantially all of the consolidated assets of Company, in each case, for consideration in excess of (v) agree to any of
the foregoing.
(x) the Board of
Managers and (y) Mcmbcrs owning at least 66.66% ofthc then outstanding Units, voting together as a single class, the Company shall not, and shall cause cach of its Subsidiaries not to, take any of the following actions:
(b) Without the prior approval of
(i) except as otherwise set forth in Section 5(a), increase or decrease

the size of the Board of
Managers;
(ii) except for transactions between the Company and its Subsidiaries,
entcr into any transaction with any Affliate of a Member or any Affliate of an offcer or manager of the Company or its Subsidiaries (other than in the ordinary course of business on commercially reasonable terms no less favorable to the Company and its Subsidiaries than what a third-party negotiating on an arms-length basis could reasonably expect);
(ii) changc the nature of
the Company's or its Subsidiaries' primary
business;
(iv) incur any indebtedness other than (A) in (he ordinary course of
business, (8) the New First Lien Notes and (C) indebtedness permitted to be incurred under the New First Lien Notes;
(v) create, authorize or issue, or grant any options, warrants, or other
rights to purchase or obtain any Units of
to the Units as to dividends or liquidation preference, or modifying any of
the Company ranking pari passu with or senior the rights of
any class or series of Units;
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(vi) enter into any tmnsaction or series of
transactions to effect the
liquidation, dissolution or winding up ofihc Company;

(vii) enter into a transaction providing for the use ofany parcel of
real
property owned by the Company, other than for ihe development ofresidcntial homes and communities and commercial development cun-ently contemplated by the Company's
business plan as ofthe Effective Date;
(viii) sell, transfer or otherwise dispose of
the Rhodes Ranch master
planned community for consideration less than $r60"000,000) (such amount to be reduced by any net cash proceeds received by the Company for any prior sales of asscts associated with the Rhodes Ranch master planned community);
the Tuscany masler planned community for consideration less than $(40,000,000) (such amount to be reduced by any net cash procceds received by the Company for any prior sales of assels associated with the Tuscany master planned community);
(ix) sell, transfer or otherwise dispose of
(x) enter into any recapitalization, reorganization, consolidatiOn or

merger or sell all or substantially all of the assets of the Company, in each case for consideration less than $(100,000,000) (such amount to be reduced by any net cash proceeds received by the Company for any prior recapitalizations, reorganizations, consolidations or asset sales);
(other than wholly-owned Subsidiaries of
(xi) make any investments in, or acquire the Securities of, any Person the Company having no material assets);
(xii) purchase, redeem or otherwise acquire for value (or pay into or set
aside a sinking fund for such purpose) Securities of Sccuritics owned by any employee of
the Company (other than any the Company upon such employee's termination of
employmcnt);
(xiii) agree to become liable for any indemnification obligation that is
out ofihe ordinary course of
business, including without limitation, any indemnification

real property
obligation in conncction with the environmental condition of any parcel of owncd by the Company or any of its Subsidiaries and sold out of
the ordinary course of
busincss; or
(xiv) agree to any of
the foregoing.
Section 7.
Authorized Units; Preemptive Rights.
(a) Authorized Units. The Company shall be authorized to issue from time to
time up to an aggregate of 125,000 Units, consisting of two classes of
Units, as follows:
(i) 100,000 Class A Units and (ii) 25,000 Class B Units. Each authorized Unit may be issued
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pursuant to such agreements and on such terms (including valuation and pricing) as the Board of Managers shall approve. In addition, the Company may reissue any Units that have been repurchased by the Company. The Board or Managers shall have the right to increase the number of authorized Units from time to time. Fractional Units may be issued.
(b) Preemptive Rights. After the Effective Date and prior to any IPO or Sale
issuances or grants orany Excluded Securities, the Company shall not (x) issue additional Units, warrants and/or any other Securities ofihe
oCtile Company, other than in the case of
Company convertible into or exchangeable for Units to any Person or (y) issue any debt to any
Member of the Company or any of its Affliates ((x) and (y) hereinafter referred to as "New Securities"), in each case, other than in accordance with the following terms:
(i) The Company shall not issue any New Securities unless it first
delivers to each Member who holds Units and is an "accredited investot' (as defined in
Rule 501(a) of Regulation D promulgated under the Securities
Act) (each such Person, a
"Buver"), a wrillen notice ("Notice of
Proposed Issuance") specifying the type, total number and all the material terms or such New Securities that the Company thcn intends to issue, and stating ihat the Buyer shall have the right to purchasc the New Securities in
the manner specified in this Section 7(b) for the same price per accordance with the same terms and COnditions specified in such Notice of
New Security and in
Proposed
Issuance.
(ii) During the ten Business Day period commcncing on the date the
Company delivcrs to the Buyers the Notice of
Proposed Issuancc ("Exercise Period") in accordance with Section 7(b)(i), the Buyers shall have the right (but not the obligation), to purchase New Securities at the same price per New Security and upon the same terms
and conditions specified in the Notice of
Proposed Issuance. Each Buyer elccting to
purchase New Securities must give irrevocable written noticc of its election to the Company prior to the expiration of the Exercise Period, and if a Buyer has not provided such irrevocable notice within the Exercise Period, such Buyer shall be deemed to have waived and rejected its right to purchase New Securities. If the New Securities are being offered as part of an investment unit together with debt or other instruments, any election by a Buycr to purchase New Sccmities shall also constitute an election to purchase a like portion of siich debt or other instruments.
(iii) Each Buyer shall have the right to purchase its Pro Rata Portion of
New Securities.
(iv) If some or all of the New Securities have not been purchased by
this Section 7(b), then the Company shall the Buyers who havc exercised their right to purchase their respective full Pro Rata Portion of the New Securities and have indicated a desire to purchase any unsubscribed New Securities. If some or all of the New Securities have not been purchased by the uyers pursuant to paragraphs (i) - (ii)
the Buyers pursuant to paragraphs (i-(Hi) of offer such remaining New Securities to any of of
this Section Z and the immediately prior sentence, then the Company shall have the
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right to issue such remaining New Securities to one or more parties at not less than, and
on terms no more favorable to the buyers thereof
than, the price and othcr tenns specified
in the Nolice of Proposed Issuance. If such issuance or sale is not closed within 90 days the Exercise Period the Company shall not thereafter issue or sell after the expiration of any New Securities, without first again offering such New Securities to the Members in the manner provided in ihis Section 7(b).
(v) The Notice of Proposed Issuance shall specify the place, time and
dale of the consummation of
the purchase ofthc Ncw Securities.

Class A Units on
(vi) If any Class A Units are included in the New Securities, each
Member shall have the right to elect to purchase Class B Units in lieu of
identical terms as offered with respect to the Class A Units.
Agrecment shall prevent the Company from issuing or selling to any Person any New Securities without first complying with the provisions of Section 7(b); provided, that in connection with such issuance or sale (a) the Company gives reasonably prompt notice to the other Members of such investment (prior to such investment having occurred), which notice shall describe in reasonable detail the New Securities being purchased by the Person making such purchase (for purposes of this Section 7, the "Purchasing Member") and the purchase price thereof and (b) the Purchasing Member and the Company enable the other Members to effectively exercise their respective rights under Section 7(b) with n::spect to their purchase oftheir Pro Rata Portion of the New Securities issued to the Purchasing Member within 45 days after such purchase by the Purchasing Member on the terms
(vii) Nothing in Section 7(b) or any other provision of this
specified in Section 7(b).
Section 8.
Conversion Ril!hts of Class B Units.
At any time and from time to time after the Effective Date, each Class B Unit shall be the holder thercot~ at the principal offce orihe Company, into an validly issued, fully paid and nonassessable Class A Units. Before any holder of equal number of Class B Units shall be entitled to convert the same into Class A Units pursuant to this Section 8, the election to such holder shall give written notice to the Company at its principal offce, of convert the same. The Company shall, as soon as practicable thereaftcr, iSsue to such holder of Class A Units to which such Class B Units, an acknowledgment of registration for the number of holder shall be entitled as aforesaid and shall amend Schedule 1 hereto to reflect such conversion. Class A Units upon conversion of the Class B Units shall be made without The issuance of charge to the holders of Class B Units. Such conversion shall be deemcd to have been made notice thereof. and the Person receipt of immediately prior to ihe close of business on the date of entitled to receive the Class A Units issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Class A Units as of such date.
convertible. at the option of
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Section 9.
Voting Rights.
have one Class B Units shall have no vote for each Class A Unit held by such Member and the holders of voting rights, other than as specifically set forth in Section 6. Section 21 (c) and Section 34.
On any maller to be voted on by the Membcrs hereunder, each Member shall
Section 10. Representations bv Members Upon Acquisition or Receipt of Units.
Upon the acquisition or receipt of any Units, in addition to any other representations and warranties set forth in any other document rcquircd by the Board orManagers with rcspect to such acquisition or receipt, each Member makes the reprcsentations and warranties set forth below to the Company and the other Members with respect to such Units, effective upon the acquisition or receipt thereof and upon such Member's exccution and delivery of a counterpart hereof or such other document required by the Board of Managers.
(a) Such Member is acquiring the Units for his own account, for investment the Securities Act or applicable state securities laws.
and not with a view to the Distribution thereof or any interest therein in violation of
under the Securities Act by reason of
(b) Such Member understands thal (i) the Units have not been registered their issuance by the Company in a transaction exempt
the Securities Act and Applicable Law and (ii) the Units is registered must be held by such Member indefinitely unless a subsequcnt Transfer thereof under the Securities Act and Applicable Law or is exempt from such registration.
from the registration requirements of
(c) Such Member further understands that the exemption from registration
afforded by Rule 144 (the provisions of
which arc known to such Member) promulgated undcr the Securities Act ("Rule 144") depends on the satisfaction of various conditions, and that, if the Units acquired hereunder in limited applicable, Rulc 144 may afford the basis for sales of amounts.
(a) of (d) Such Member (i) is an "accredited investor" (as defined in Rule 501 Rcgulation D promulgated under the Securities Act) or (ii) has a pre-existing personal or the Board of business relationship with the Company, its Subsidiaries or certin members of Managers or ol1cers of the Company which is of a nature and duration suffcient to make such the character, business acumcn and general business and financial Member aware of circumstances of thc Company, and/or such Members or the Board of Managers or offcers of the
Company, fany.
(e) The Company has made available to such Member or its representatives
all agreements, documents, rccords and books that such Member has requested relating to an investment in the Units being acquired by the Member. Such Member has had an opportunity to
ask questions 01: and receive answers from, Persons acting on behalf of
the Company,
this investment, and answers have been provided to all of concerning the terms and conditions of such qucstions to the full satistaction of such Mcmbcr. Such Member has such knowledge and
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experience in financial and business matters that it is capable of evaluating the risks and merits of this investmcnt and to sufTer a complcte loss or its investment.
(f) Such Membcr has no need for liquidity in its investment in the Units.
Such Member can bear the economic risk of investment in the Units and has such knowledge and the cxpericnce in financial or business matters to be capable of evaluating the merits and risks of investment in the Units. Such Member has consulted with its professional, tax and legal advisors with respect to the federal, state, local and foreign income tax consequences of such Member's participation as a Member of the Company.
(g) Such Member understands that there is no public market for the Units and
thai the transferabilty of
the Units is restricted.
this Agreemcnt by such (h) The execution, dclivery and perfommnce of Member has bccn duly authorized. This Agreemt:nt has been duly executed and delivered by
such Member and (assuming the valid authorization, execution and delivery of
this Agreement
by the other parties hereto) is the legal, valid and binding agreement of such Member, enforceable against such Member in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, and similar laws of general application relating to or affccting creditors' rights and to general equity principles.
(i) Such Member has not grantcd and is not a party to any proxy, voting trust
or other agreement which is inconsistent with or conflicts with the provisions of this
Agreement
without the prior written consent of the Doard of Managers.

this the transactions contemplated hereby, and the compliancc by such Mcmber with the provisions hereof wil not (i) conflict with or result in a breach of any provision of the certificate of incorpo.ration, bylaws, operating agreement, formation agreement, partnership agreement or any other organizational document of such Member, as applicable, time or both) a default (or give (ii) violate or conflct with or constitute (with notice or lapse of rise 10 any right of termination, cancellation or acceleration) under, or result in the creation of any encumbrance upon such Member's Units pursuant to, the terms, conditions or provisions of any contract, note, bond, lease, mortgage, indenture, license, agreement or other instrument or obligation to which such Member is a party or by which such Member or such Member's properties or assets arc bound or (iii) violate any provision of Applicable Law or any order,
U) The execution, delivery and performance by such Member of
Agreement, the consummation of
judgment, award, writ, injunction or decree applicable to such Member or any of
such Member's
properties or assets.
(k) No permit, authorization, consent or approval or or by, or notification of or tiling with, any Person is required in connection with the execution, delivery or performance by such Member of this Agreement.
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Section 11. Distributions Generallv.

Any Distributions of cash or othcr asscts by the Company to Members shall be made in accordance with Section 1 i through Section 14. Available cash shall be distributed, at such times and in such amounts as the Board of Managers determines in its discretion. Notwithstanding any other provision hereof, the Company shall cause its Subsidiaries to distribute or otherwise transfer to the Company, to the fullesi extent possible within the limits imposed by AppHcable Law, the cash or cash equivalents necessary for the Company to make the Distributions to be
made hereunder.
Section 12. Discretionarv and LiQuidatin2 Distributions.

(a) Subject to the other provisions of discretion of the Board of
time to the holders of
Section II through Section 14. in the Managers, the Company may distribute available cash from time to Units in accordance with their Pro Rata Portion.
(b) Notwithstanding anything to the contrary contained hcrcin, the Company
may issue from time to time, pursuant to an equity incentive plan approved by the Board of Managers, additional units or Securities of the Company representing up to 10% of the economic value of the equity of the Company as equity incentives to employees, oflcers, managers, directors and/or consultants or service providers of the Company, and that such issuances will be dilutive to all Units proportionately.
Section 13. Tax Distributions.

To the extent of available cash and to the extent permitted by the Delaware Act, the Board of Managers shall cause the Company to make distributions to the Members to provide them wiih funds to pay applicable United States federal, state and local income tax liabilities attributable to Company income allocated to them pursuant to Section 18 (calculated based on the Assumed Tax Rate taking into account any losses of the Company (including prior year losses) to the extent such losses arc availablc under such income tax laws applicable to corporations to offset such income (or would be available if losses utilized against income other (han Company income in prior years were instead carried foiward to offset Company income in subsequent years) ("Tax Distributions"). Any Tax Distribution shall be made to all such Mcmbers, whether or not they arc subject to United Statcs fcderal, state and local income taxes. in the same proportions as the Company taxable income is allocated in accordance with Section li. The Company shall make Tax Distributions quarterly based on the Board of Managers good faith calculation of such distribution. With respect to a Fiscal Year, the excess of (a) the aggregate quarterly Tax Distributions made to a Member, ovcr (b) ihe amount of
Tax
Distributions that would be permiued to be made to a Member pursuant to this Section 13 if only annual distributions were permitted, shall be lrcatcd as an advance of, and shall reduce, subsequent Tax Distributions wbich such Member would otherwise be entitled to receive pursuant to this Section 13.
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Section 14. Distributions In Kind.

If the Company makes Dii;tributions in kind, then (a) for purposes of making Distributions under Section 12 hereof, the Distribution shall only be included in calculating the thresholds set forth in Section 12 at such time as such Distribution in kind is converted to cash by sale or otherwise and (b) for all othcr purposes ofthis Agreement, the Distribution shall be treated as if the Company had sold such distributed property for cash in an amount equal to the Fair Market Value of such property and distributed such cash to tne Members instead.
Section 15. Capital Accounts.
A separate capital account (a "CaDital Account") shall be establishcd and maintained for each Member. The iniiial Capital Account of each Member shall cqual the amount ncxt to such Member's name as shown on Schedule lion the Effective Date. As of the end of each Accounting Period, the balance in each Member's Capital Account shall be adjusted by (a) increasing such balance by such Member's (i) allocable share of Net Profit (allocated in accordance with Section 16) and (ii) the amount of cash and the Fair Market Value orany property (as of the date of the contribution thereof and net ofany liabilities cncumbering such
property) contributed by such Member to the Company during such Accounting Period, if any, and (b) decrcasing such balance by (i) thc amount of cash and the Pair Markct Value of any
property (as of the date of the Distribution thercof and net of any liabilites encumbering such property) distributed to such Member during such Accounting Period and (ii) such Member's allocable sharc orNet Loss (allocated in accordance with Section I ll). Each Member's Capital Account shall be further adjusted with respect to any Special Book Allocations pursuant to Section 17. The provisions of this Agreement relating to the maintenance of Capital Accounts arc intended to comply with Treasury Regulations 1.704- i (b) and i. 704-2 and shall be interpreted and applicd in a manner consistent with such Treasury Regulations. At no time during the term of the Company or upon dissolution and liquidation thereof shall a Member with
a negative balance in its Capital Account have any obI igation to the Company or the other
Members to restore such negative balance, except as may be required by Applicable Law or in respect of any negative balance resulting from a withdrawal of capital or dissolution in contravention or this Agreement.
Section 16. Book Allocations of
Net Profit and Net Loss.
Exccpt as otherwise provided in Section i 7 or elsewhere in this Agrcement, Net Profit
and Net Loss and to the extent necessary, individual items of income, gain or loss or dcduction of the Company, shall be allocated among the Members in a manner such that the Capital Account of each Member, after giving effect to such allocation and the Special Book Allocations set forth in Section 17, is, as nearly as possible, equal (proportionately) to (a) the Distributions that would be made pursuant to Section 12 (taking into account and treating as distributed any amounts set
To be equal to each Member's pro rata share of
the purchase price/Fair Market Value oflhe assels on
formation.
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aside with respect to Unvested Units) irthe Company were dissolved, its affairs wound up and its assets sold for cash equal to their Carrying Value (except that any Company asset that is realized in such Fiscal Ycar shall be treated as if sold for an amount of cash equal to the sum or any net cash proceeds and the Fair Markct Value of any property actually received by the Company in connection with such disposition), all Company liabilities were satisfied (limited the assets sccuring such with respect to each non-recourse liability to the Carrying Value of the Company werc distributed in accordance with Section 12 to the liability) and the net assets of Members immediately after making such allocation, minus (b) such Member's share of "partnership minimum gain" (as determined pursuant to Treasury Regulations 1.704-2(b)(2) and 1.704-2(d)) and partner nonrecourse debt minimum gain, computed immediately prior to the assets. For purposes of the preceding sentence, "partner nonrecourse hypothetical sale of minimum gain" shall mean an amount, with respect to each "partner nonrecourse debt" (as defined in Trcasury Regulations 1-704-2(b)(4)), equal to the partner nonrecourse minimum gain that would result if the partner nonrecourse debt were treated as a nonrecourse liability
pursuant to Trcasury Rcgulations L.704-2(i)(3).
Section 17. Special Book Allocations.
(a) Oualified Income Offet. If any Member unexpectedly receives any
adjusimcnt, allocation or Distribution described in Treasury Regulations l-704-I(b)(2)(ii)(d) (4), (5) or (6) and such adjustmcnt, allocation or Distribution causes or increases a deficit in such Member's Capital Account (a "Deficit"), items of gross income and gain for such Accounting Period and each subsequent Accounting Period shall be specifically allocated to such Member in
an amount and manner suffcient to eliminate, to the extent requircd by the Treasury Regulations,
the Deficit of such Member as quickly as possible; provided, that an allocation pursuant to this Section 17(a) shall be made only ifand to the extent that such Member would have a Deficit after all other allocations provided for in Section 15 through Section 18 have been tentatively Agreement. This Section 17(a) is intended to made as fthis Section 17(a) were not in this comply with the qualified income offset provision of Treasury Regulations 1.704-I(b)(2)(ii)(d) and shal i be intcrprctcd in a manner consistent therewith.
(b) Special Allocations and Capital Account Maintenance. Special allocations
snail be made in accordance with the requirements set rorth in the Treasury Regulations
1.704-2(t), (g) and G) (minimum gain ehargeback), 1.704~ I (g) (gross incomc allocation),
1.704-2(i)(2) (nonrecourse deductions), and to the extent that a Section 754 election is in effect, 1.704-1 (b)(2) (iv)(m) (Section 754 adjustments).
(c) Forfcitures. In the event of a forfeiture of a Unit, such Unit and the
Capital Account associated therewith, if any, shall be transferred (the "Forfeiture Transfer") to the other Members pro rata in accordance with Capital Accounts (the "Forfeited Unit
Transferees"). If the Forfeiture Transfer gives rise to the receipt of Forfcited Unit Transferee pursuant to Section 83 of the Code in the year of
taxable income to the the Forfeiture
Transfer or any subsequent year, any deduction to which the Company is entitled pursuant to
Section 83 of
the Code as a result of such income receipt shaH be allocated among the Members
(other than the Forfeited Unit Transferee) in the taxable year of
the Forfeiturc Transfer and any

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the Forfeiture Transfer so as to minimize any income or gain required to be recognized by the Company as a result oflhe Forfeiture Transfer and any excess deduction shaH be allocated to the Forfeited Unit Transferee or in such other manner as the Board of Managcrs deems to be
subsequeiit year in which the Forfeited Unit Transferee recognizes income as a result of
appropriate to the extent permitted by law.

(d) Restorative Allocations. Any special allocations ofitcms of income or
gain pursuant to this Section 17 shall be taken into account in computing subsequent allocations pursuant to this Agreement, so that the net amount for any item so allocated and all other items allocated to each Member pursuant to this Agreement shall be equal, to the extent possible, to the net amount that would have been allocated to each Member pursuant to the provisions of this Agreement if such special allocations had not occurred.
(e) For purposes of determining the Net Profit, Net Loss, or any other items
allocable to any period, Net Profit, Net Loss, and any such other items shall be determined on a
daily, monthly, or other basis, as detcnnined by ihe Board of
Managers, using any permissible
method under Code Section 706 and the Regulations thereunder.

the allocations (f) The Members are aware ofthc income tax consequences of made by Section 15, Section i 6, Section 17, and Section i 8 and hereby agree to be bound by the provisions of these Sections in reporting their share of Company income and loss for incomc tax purposes.
Section 18. Tax Allocations.

The income, gains, losses, credits and deductions rccognized by the Company shall be allocated among the Membcrs, for U.S. federal, state and local income tax purposes, to the extent permitted under the Code and the Treasury Regulations, in the same manner that each such item is allocated to the Members' Capital Accounts. Notwithstanding the foregoing, the Board of Managcrs shall have the power to make such allocations for U.S. federal, state and local income tax purposes as may be necessary to maintain substantial economic effect, or to insurc that such allocations are in accordance with the Members' interests in tht; Company, in each case within
the meaning of the Code and the Trcasury Regulations. In accordancc with Scction 704(c) of
the
Code and the Treasury Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be
al located among the Members so as to take account of any variation between the adjusted basis of such propert to the Company for U.S. federal income tax purposes and its Fair Market Value
at the time of contribution by applying any permissible method selected by the Board of Managers.
Section 19. Liabilty for Return of CapitaL.
No Member or Managcr shall have any liabilty for the return of any Member's Capital Contribution, which Capital Contribution shall be payable solely from the assets ofthe Company at thc absolute discretion of the Delaware the Board of Managers, subject to the requirements of
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Act. No Membcr, nor any siiccessor-in-interest to any Member, shall have the right, while this Agreement remains in etfect, to have the property of the Company partitioned, or to fie a complaint or institute any proceeding at law or in equity to have the property of the Company partitioned, and cach of the Members, on behalf of itself and its successors, representatives and assigns, hereby irrevocably waives any such right. Section 20. Tax Reports. Elections and Withholdine:.
(a) No later than 90 calendar days after the end of each Fiscal Year, the Board Managers shall cause the Company to furnish cach Member a estimated IRS Schedule K-I, and not later than 270 calendar days after the cnd of each Fiscal Year, the Board of Managers shall cause the Company to furnish cach Member the IRS Schedule K-I and any similar form required for the filing of state or local income tax returns for such Member for such Fiscal Year. Upon the written request of any such Member and at the expense of such Member, the Company wil use reasonablc efforts to deli vcr or causc to be delivered any additional information necessary for the preparation of any state, local and foreign incoiie tax return that must be filed
of
by such Mcmber.
Managers shall determine, subject to Section 20(e). whether (b) The Board of to make or revoke any available election pursuant to ile Codc. Each Mcmber will, upon request, supply the information nccessary to give proper effect to any such election.
(c) To the extent applicable, the Company hereby designatcs (_-- to act
the Code) in accordance with the Code and any similar provision of state, local or foreign tax Applicable Law. The Tax Matters Partner is authorized and required to represent the Company the Company's expensc) in connection with all cxaminations otthe Company's affairs by tax (at authorities, including resulting administrtive and judicial proceedings, and to expend Company funds for professional services and costs associated therewith; provided, that the Tax Matters Partner may be removed and replaced by, and shall act in such capacity at the direction of, the Board of Managers. Each Member agrees to cooperate with the Tax Matters Partner and to do or refrain from doing any or all things reasonably requested by the 'Ix Matters Partner with respect
as thc "Tax Matters Partner" (as defined in Section 6231 (a)(7) of Sections 622 i through 6233 of
to the conduct of such proceedings. Subject to the foregoing proviso, the Tax Mallcrs Parlner
will have reasonable discretion to determine whether the Company (either on its own bchalf or on behalf of the Member) will contest or continue to contest any tax deficiencics assessed or proposcd to be assessed by any taxing authority. Any deficiency for taxes imposed on any Member (including penalties, additions to tax or interest imposcd with respect to such taxes) will be paid by such Member, and fpaid by thc Company, wil be rccoverable from such Member (including by offset against Distributions otherwise payable to siich Member).
(d) Except as otherwise required (i) by Applicable Law or (ii) as a result of an

election by he Company to be classified as a corporation for Fedcral income tax purposes in
anticipation of an IPO, (A) each of
the Membcrs and the Company shall take no action
inconsistent with, and shall makc or cause (0 be madc all applicable elections with respect to the Company as a partnership for Federal income tax purposes and (2) the (I) the trcatment of
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION

trcalment of the Company as not a publicly traded parlnership for Federal income tax purposes, and (B) neither the Company nor any Member on its behalf shall fie an election to be excluded from Subchapter K of
the Code.
(c) Elections with Respect to Issuance of
Certain Compensatory Equity
Intcrests.
(i) The Tax Matters Partner is hereby authorized and dirccted to cause
the Company to make an election to value any interests issued by the Company as compensation for services to the Company (collectivcly, "Compensatory Intercsts") at liquidation value (the "Safe Harbor Elcction"), as the same may be permitted pursuant to or in accordance wth the finally promulgated successor rules to Proposed Treasury Regulations i .83-3(1) and IRS Notice 2005-43 (collectively, the "Proposed Rules"). The Tax Matters Partner shall cause the Company to make any allocations of items of income, gain, dcduction, loss or credit (including forfeiture allocations and elections as to allocation periods) neccssary or appropriate to effectuate and maintain the Safe Harbor Election.
(ii) Any such Safe Harbor Election shall be binding on the Company
and on all of
Compensatory Intcrests thereafter made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by thc Tax Matters Partncr as permitted by the Proposed Rules or any Applicable Law.
its Members with rcspect to all Transfers of
(iii) Each Member (including any person to whom a Compensatory
Interest is transferred in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby agrees to comply with all requirements ofthe Safe Harbor Election with respect to all Compensatory Interests transfcrred while the Safe Harbor Election remains effective.
(iv) The Tax Matters Partner shall fie or cause the Company to fie all
returns, report and other documentation as may be requircd to pcrfect and maintain the
Safe Harbor Election with respect to Transfers of
Compensatory Interests covered by
such Elcction.
Managcrs is hereby authorized and empowered to (v) The Board of amend the Agreement as necessary to comply with the Proposed Rules or any rule, in ordcr to provide for a Sate Harbor Election and the abilty to maintain or revoke the saine, and shall have the authority to execute any such amendment by and on behalf of each Mcmber. Any undertakings by the Members neceSsary to cnable or preserve a Safe Harbor Election may be reflected in such amendments and to the extcnt so reflected shall
be binding on each Membcr, respcctively.
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(vi) Each Member agrees to cooperate with the Tax Matters Partner to perfect and maintain any Safe Harbor Election, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Tax Matters Partner.
(vii) Costs and expenses incurred by the Tax Matters Partner in making
and preserving (or if
revoked, revoking) the Safe Harbor Election shall be paid by the
Company.
(f) The Company shall be entitled to deduct or withhold taxes as required by

applicable law with respect to aiiy amounts payable to any Member. Any amounts so deducted or withheld shall be timely remitted to the applicable taxing authority and shall be treated as amounts otherwise distributed to the Member pursuant to Section 13 or, if applicable, Section 11 or Seciion 12. with respect to which such amounts were deducted or withheld.
Section 21. Transfer Restrictions.

(a) Limitations on Transfers. No Member shall be permitted to Transfer any
Units held by such Member, except for (i) Permitted Transfers and (ii) Transfers made in accordance with this Section 21.
(b) Transfer Prerequisites. No Transfer of any Units shall become effective
Managers, (ii) unless such TnlOsfer complies with subsections (b) through (d) of this Section 21. (iii) until the Transferee (unless already party to this Agreement) executes and delivers to the Company a Joinder Agreement in the form attached hcreto as Exhibit B, (iv) the Transfer wil result in thc
(i) unless prior written notice thereofhas been delivcrcd to the Board of number of partners hereunder being more than 100 within the meaning of .L.7704(h) (unless such Transfer is approved by the affrmative vote of 66.66% of the then outstanding Units), (v) until, upon request by the Board of
Treasury Regulations
the holders of at least

Managers, an
opinion of counsel, in form and substance reasonably satisfactory to the Board of delivered to the Board of Managers, with respect to (he compliance of the Transfer
Managcrs, is
with Managers reasonably determines in good faith that such Transfer is to a direct or indirect competitor of the Company or its Subsidiaries. Upon such Transfer and execution and delivery, the Transferee shall be bound by, and entitled to the benefits of, this Agreement wiih respect to the Transferred Units in the same manner as the Member effecting such Transfer.
Applicable Law and (vi) fihe Board of
(c) DragwAlong Rights.

(i) If
Members representing the DragAlong Threshold (collectively,

the Company (a "DragwAlong Sale"),
the "DragwAlong Sellers") desire to effect a Sale of
the Drag~Along Sellers may require all Members to sell the same Pro Rata Portion of their respective Units as the DragwAlong Sellers desire to sell to any Transferee that is not affliatcd with any Drag-Along Seller in such Drag Along Sale on the same terms and
conditions a!i apply to those Units to be sold by the DragwAlong Sellers.
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(ii) Written notice of the Drag-Along Sale (the "Drag-Along Sale

Notice") shall be provided by the Company to all holders of
Units. Such Drag-Along Sale Notice shall disclose in rcasonable detail the number and class of Units to be subject
the proposed price,
to the Drag-Along Sale (the "Drag-Along Securities"), an estimate of
the other proposed terms and conditions ofthe proposed Drag-Along Sale (including the copies of the definitive agreements relating thereto, if available) and the identity of
prospective purchaser.
(iii) With respect to any Drag-Along Sale, each Member agrees that it
shall use its reasonable best efforts to effect the Drag-Along Sale as expeditiously as practicable, including delivering all documents necessary or reasonably rcquested in such transaction and entering conncction with such Drag-Along Sale, voting in support of into any contract, instrument, undertaking or obligation necessary or reasonably requested in connection with such Drag-Along Sale (as specified in the Drag-Along Sale Notice). Subject to the terms and conditions of this Section 21(c) and without limiting the generality of the foregoing, the Company and each Member shall take or cause to be taken all actions, and do, or cause to be done, on behalf and in respect of the Company any and all actions that may be reasonably requested consistent with this Section 2l(e) in Drag-Along Securities connection with any Drag-Along Sale. In addition, cach holder of the reasonable expeiises (if any) incurred by the shall (A) pay its Pro Rata Portions of Company in connection with such Drag-Along Sale; and (8) join on a pro rata basis jointly, in any and all (based on respective Pro Rata Portions), severally and not indemnification or other obligations that are specified in the Drag-Along Sale Notice, other than any such obligations which relate specifically and particularly to another holder such as indemnification with respect to representations and warranties given by a holder regarding sueh holder's title to and ownership of Units and other fundamental customary representations and warranties; provided that no holder shall be obligated undcr this clause in connection with such Transfer to agree to indemnify or hold harmless
the Transferee with respect to an amount in excess of
the net proceeds received by the
holder in respect OfSllCh holder's Units in connection with such Drag-Along Sale.
(iv) In the event of a Drag-Along Sale, each Mcmbcr shall be required
lo Transfer such Unils held by such holder as provided in the Drag-Along Sale Noticc to
the extent such Transfer is required under Section 21 (c )(i) hereof.
(v) Each Member acknowledges and agrees that it shall not be entitled
to (and hereby waives any) appraisal, dissentcr's or any similar righls in connection with any Drag-Along Sale.
(d) Co-Sale Rights.
If anyone or more Members (collectively, the "Co~Sale Transferors") propose to

Transfer (other than a Permitted Transfer) Units representing 25% or more of
the then
outstanding Units to any Person (the "Co-Sale Transferee") in one transaction or a series of related transactions, the parties hereto shall comply with the following proccdures:
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(i) The Co-Sale Transferors shall, at least fivc Business Days before
such proposed Transfer, deliver a written notice (a "Co-Sale Notice") to each other Member that (i) sets forth substantially the same information required in a Drag.Along Salc Notice pursuant to Section 21 (c) and (ii) indicates that thc Co.Sale Transferee has bcen informed of the co-sale rights provided for in this Section 21 (d) and has agreed to purchase Units (the "Co.Sale Units") from the other Members in accordance with the
terms hereof.
(ii) The Co-Sale Transferors shall not Transfer any Units to the Co.
Sale Transferce unless each of the other Members is permitted to Transfer simultaneously therewith a number of Units equal to his Pro Rata Portion of the aggregate number of
Units to which the otTer to the Co-Sale Transferors relates (A) at a price pcr Unit equal
to
the same price per Unit proposed to be paid to the Co-Sale Transferor for each Unit and Members (B) othelVise on the same tcrms and conditions. To the extent one or more of exercise such right of participation in accordance with the terms and conditions set forth hcrein, the number of Units that each other Member, including the Co-Sale Transferors, may Transfer in such Transfer shall be reduced pro rata.
the Co-Sale Notice, (iii) Within five Business Days after delivery of each Member may elect to participate in the proposed Transfcr by delivering to the CaSale Transfcrors a notice (the "lg.Along Notice") specifying the number of Units (up to his Pro Rata Portion) with respect to which such Mcmbcr shall excrcise his rights under
this Section 21 (d), and the number of Units to be Transferred to the Co-Sale Transferee by the Co-Sale Transferors shall be reduced accordingly.
(iv) Any Units requested to be included in any Tag-Along Notice shall
bc Transferred at the price per Unit set forth in this Section 21(d) and otherwisc on the same tcrms and conditions as are set forth in the Co-Sale Notice.
Section 22. Withdrawal.

No Member shall havc the right to withdraw from thc Company except with the consent Managers and upon such tcrms and conditions as may be specifically agrecd upon between the Company and the withdrawing Member.
of the Board of
Section 23. Additional Members.
The Board of Managers shall have the right to cause the Company to issue additional Units and to admit additional Members upon the issuance of such Units upon such terms and conditions, at such time or times, and for such Capital Contributions as shall be determincd by the Board of Managers, subject to the limiis set forth herein. In connection with the admission of an additional Member or additional Capital Contributions, ihe Board of Managers shall amend Schedule I hereto to reflect the name and addrcss of each additional Member and the amount of
any additional Capital Contributions.
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Section 24. Dissolvin2 Events.
Thc Company shall be dissolved and its affairs wound up in the manncr hereinafter provided upon the happening of any of the following events: Managers and the Members, in accordance with (a) the Board of Section 6(b)(vi). shall vote or agree in writing to dissolve the Company; and
the Company; provided, that unless required by Applicable Law, the Company shall not be wound up as a result of any such evcnt and the business ofthc Company shall continue.
(b) any event which under Applicable Law would cause the dissolution of
Section 25. Dissolution and Windine:-Up.
the Company shall be liquidated or Managers and the business ofihe Company shall be wound up. Within a reasonable time after the cfTective date of dissolution of the Company, the Company's assets shall be distributed in the following manner and order:
Upon the dissolution of the Company, the assets of distributed under thc direction orand to the extent determincd by the Board of
(a) First, to creditors in satisfaction ofndebtedness, whether by payment or
reasonable provision for payment, and the expenses of liquidation, whether by payment or the making of reasonable provision for payment, including the establishment of reasonable reserves (which may be funded by a liquidating trust) determincd by the Board of Managers or the liquidating trustee, as the case may be, to be reasonably necessary for the payment of the Company's expenses, liabilities and other obligations (whether fixcd, conditional, unmatured or contingent); and
the making of
(b) Second, to the Members in the same manner as Distributions under

Section 12.
Section 26. Distributions in Cash or in Kind Upon Dissolution.

the Company, the Board of Managers shall use all commercially the Company's assets in an ordcrly manner and apply thc proceeds of such liquidation as set forth in Section 25; provided that if in the good faith judgment of the Board of Managers, a Company asset should not be liquidated, the Board of Managers shaH cause the Company to distribute such assets in accordance with Section 25. and for purposes of making such Distribution, and for all other purposes of this Agreement the Company had sold such assets (excluding Section 12), the Distribution shall be treated as if for cash in an amount equal to their Fair Market Value and distributed such cash to the Members instead.
Upon the dissolution of reasonablc efforts to liquidate all of
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Section 27. Termination Upon Dissolution.

The Company shall terminate when the winding up or the Company's affairs has been completed, all ofihc assets ofihe Company have been distributed and an application for a Certificate of Dissolution has been Ied by the Registered Agent of the Company in accordance with the Delaware AcL
Section 28. Information Rie:hts: Observer Ri~hts: Confidentiality; Other Restrictive Covenants.
Section 28(c) and (d): each (x) First Licn Steering Committee Member, for so long as such Person owns any Units and (y) each Member, for so long as such Person continues to own at least 5.0% ofthc outstanding written notice and during Units, in i;ach case, shall have the right, upon ten (10) days' prior normal busincss hours, to inspect the properties, books and other business records ofthc Company and its Subsidiaries and to reasonably request from time to time (i) any other information (financial or otherwise) about the Company and (ii) to have reasonable access to the Company's or any Subsidiary's management, auditors and legal counseL.
(a) Information Ril.his. Subject to the terms of (b) Observer Rights. Each (x) First Lien Steering Committee Member, for
so
long as such Person owns any Units and (y) Member, for so long as such Person continues to own at least 5.0% of the outstanding Units, in each case, shall have the right to have one
representative (each, an "Observer") present at all meetings of the Board of
Managers. The
Company will give each Observer reasonable prior notice (it being agreed that substantially the same prior notice given to the members of the Doard of Managers shall be deemed reasonable
prior notice) of the iime and place of any proposed meeting of the Board of
Managers. The
Company will deliver to each Observer copies of all material documentation distributed from time to time to the members of the Board of Managers, at sueh time as such documents are so distributed to them, including copies of any writtcn consent. The Company reserves the right to and may, in its sole discretion, withhold any infOlmation and to exclude any Observcr from any meeting or poriion thereof i r the Company reasonably determines in good faith that access to such information or attendance at such meeting (i) could be reasonably expected to create a potential or actual conflict of interest or advcrsely afTcet the attorney-client privilege between the Company and its counsel, (ii) is prohibited by an agreement with a third part or (iii) wil not be in the best interest of the Company. Notwithstanding anything to the contrary conlained in this Agreement, the Observers may not use or disclose any confidential information received by the Observers and the Observers shall agree in writing to be bound by confidentiality provisions substantially similar to those in Section 28(d).
(c) Competitors. Notwithstanding anything to the contrary contained herein,
in no event shall any Member be entitled to any of forth in Scction 28(a) or be entitled to designate an Observer if
the information, inspection rights or access set the Company reasonably

the Company or
determines in good faith that such Member is a direct or indirect competitor of
its Subsidiaries.
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PRELIMINARY DRAFT SUBJECTTO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
(d) Confidentiality. Each Member, on bchalfofitselfand its
Affliates
(collectively, the "Subiect Parties") shall be bound by the provisions contained in this Section 28(d). .rhe Subject Parties recognize and acknowledge that they have been provided by the
Company, its Subsidiaries and their rcspective agents certain confidential and propretary
the Company and its Subsidiares including, withouilimitation, customer information, pricing information, financial plans, business plans, business concepts, supplier information, know-how and intellectual property and materials rclated thereto (the "Confidential Information"). Each Subject Party agrees that it will not, directly or indirectly, use, take commercial or proprietary advantage of or profit from any Confidential Information or disclose Confidential Information to any Person for any reason or purpose whatsoever, except for thc benefit of the Company and its Subsidiares and cxcept as is required to be disclosed under Applicable Law; provided, that the party required to make such disclosure shall, to the extent permitted by law, provide the Company with prompt noticc of any such disclosure and shall use
information and trade secrets of
commercially reasonable efforts to limit the extent of such disclosure. Notwithstanding the
foregoing, Confidential Information shall not include any information which (i) was publicly known and available in the public domain prior to the time or disclosure by the Company; (ii) becomes publicly known and available in the public doman after disclosure by the Company
through no action or inaction of the Subject Party; (iii) is in the possession of
the Subject Party at
the time of disclosure by the Company and the Subject Party was not aware of its confidential such information; (iv) is independently developed by the nature at the time of its receipi of Subject Party without use of or reference to the Confidential Information; or (v) is received by the Subject Party from a third party without an accompanying duty of confidentiality.
Section 29. Rci?stration Ri2hts.

Upon the request of the holdcrs of a majority of the outstanding Units, thc Company shall enter into a registration rights agreement with the Members upon such terms and conditions that the outstanding Units. are reasonably satisfactory to the holders of a majority of
Section 30. Exculpation and Indemnification.
(a) Except as otherwise providcd undcr the Delaware Act, no Mcmhcr, in such
capacity, shall be liable for any debts, liabilities, contracts or any other obligations ofihe Company, except for and only to the extent of such Member's Capital Contribution, and then only to the extent and under the circumstanccs set forth in the Delaware Act, or for any debts, liabilities contracts or obligations of any other Member. Except as otherwisc provided in the Delaware Act, this Agreement or in any separate written instrument signed by the Member, no the the Company shall be obligatcd personally for any debt, obligation or liability of Member of
Company or of any other Member solcly by reason orbeing a Member of
the Company. Except
as otherwise provided in the Delaware Act, by Applicable Law or expressly in this Agrecment, no Member shall have any fiduciary or other duty to another Member with respect to the the Company. No Member shall have any responsibilty to restore any business and affairs of
negative balance in his capital account or to conlribute to or in respect of obligations of
the liabilties or
the Company or to rcturn Distributions made by the Company, except as required by (he Delaware Act or other Applicablc Law.
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(b) No Membcr, Managcr, offccr, or any direct or indirect offcer, director,

Affiliate, stockholder, mcmbcr or partncr ofa Mcmber (each, an "Indemnitee"), shall be liable, responsible or accountable in damages or otherwisc to the Company or any Member for any act
or failure to act by such Indcmnitcc in connection with the conduct of the business of
the
Company, or by any other such lndemnitcc in pcrforming or participating in the performance of the obligations of that the Company, so long as such Indemnitee acted in the good faith belief such action or failure to act was in the best interests, or not opposed to the best interests, ofthe Company and/or its Subsidiaries and such action or failure to act was not in material violation of this Agreement and did not constitute grosS negligence or willful misconduct. Except as otherwise requircd by the Delaware Act, no Person who is a Member, Manager or offcer, or any combination ofthc foregoing, shall be personally liable under any judgment of a court, or in any other manner, for any debt, obligation, or liability of the Company, whether that liability or obligation arises in contract, tort, or being a Member, Manager, otherwise, solely by reason of offcer or any combination of the foregoing.
(c) The Company shall indemnify and hold harmless each Indemnitee to the
fullest extent permitted by Applicable Law (as in cfTcct on the date hereofor as such laws may
from time to time hcreafter he amended to increase the scope of
such permitted indemnification)
against losses, damages, liabilities, cOsts or expenses (including reasonable attorneys' fees and expenses and amounts paid in settlement) incurred by any such Indemnitce in connection with any action, suit or proceeding to which such Indemnitee may be made a party or otherwise involved (including, without limitation, as a witncss) or with which it shall be thrcatencd by reason of its being a Member, Manager, oficer, or any direct or indirect offcer, director, Affliate stockholder or partnerofa Membcr, or wnile acting as (or on behalfoO a Member on belialfor the Company or in the Company's interest. Such attorneys' fees and expenses shall be paid by the Company as they are incurred upon receipt, in cach case, of an undertaking by or on behalf of the Indemnitce to repay such amounts if it is ultimately determined that such Indemnitee is not entitled to indemnifcation with rcspect thereto.
(d) The right of an Indemnitee to indemnification hereunder shall not be
exclusive of any oiher right or remedy that a Member, Manager or offeer may have pursuant to Applicable Law or this Agreement.
(e) An Indemnitee shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, report or statements presented to the Company by any Person as to matters the Indemnitee reasonably believes are within such other Person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports or statements as to the value and amount of the iissds, liabilities, or any other facts pertinent to the existence and amount of assets from which Distributions to the Member might properly be paid.
(0 To the extent that, at law or in equity, an Indemnitee has duties (including
fiduciary dutics) and liabilities reliiting thereto to the Company or to any other Indemnitee, an
Indemnitee acting within the scope of any other Indcmnitee for its good faith reliance on the provisions of
this Agreement shall not be liable to the Company or to this Agreement or any
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approval or authorization granted by the Company or any othcr Indemnitee. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of an Indemnitee otherwise existing at law or in equity, are agreed by the Mcmbers to replace such other duties and liabilities of such Indemnitee.
(g) In the event that any Indemnitee is entitled to indemnification under this
Section 30 and such Indemnitee is also entitled to, or has received, indemnification by any of
its
Affliates (whether by way of payment or reimbursement to a director of any such amounts), whether pursuant to any agreement, the governing or constituent documents of any entity or by applicable law, then (i) the Company acknowledges and agrces that, as between the Company and its Affliates, on the one hand, and the Affliates of such Indemnitee, on the other hand, the indemnification obligations of the Company and its Affliates shall be a primary obligation and the indemnification obligation of the Affliates of such Indemnitee shall be a secondary the obligation; and (ii) theAffliutcs of such Indemnitee shall be subrogated to the rights of Indemnitee against the Company and its Affliates, as the case may be, with respcct to any amounts paid by the Affliates of such Indemnitee in conncction with any such indemnification obligation
this Section 30 shall (i) survive any (h) The foregoing provisions of this Agrccment and (ii) be contract rights, and no amendment, modification, denying supplement, restatement or repeal of this Section 30 shall have the effect of limiting or any such rights with respcct to actions giving rise to losses, damages, liabilities, costs or expenses (ncluding reasonable attorneys' fees and expenses and amounts paid in settlement) prior to any such amendment, modification, supplementation or repeaL.
termination of
Section 31. Insurance.
The Company shall have the power to purchase and maintain customary and reasonable 0&0 insurance for its Managers and executive offcers and any other insurance on behalf of any lndemnitee or any Person who is or was an agent of the Company against any liability asserted against such Person and incurred by such Person in any such capacity, or arising out of such Pcrson's status as an agent, whether or not the Company would have the power to indemnify such Person against such liability undcr the provisions of Section 30 or under Applicable Law.
Section 32. Competitive Opportunity.
If any Member (other than a Management Member) or any of such Member's partners, members. shareholders, directors, offcers or Affliates (collectively, "Representatives"), acquires knowledge of a potential transaction or matter which may be an investment or business opportunity or prospective economic or competitive advantage in which the Company could have an interest or expectancy (a "Competitive Ooportunity") or otherwise is then exploiting any Competitive Opportnity, the Company wil havc no interest in, and no expectation that, such Competitive Opportnity be offered to it. Any such interest or expectation is hereby renounced so that such Member and its Representatives shall (a) have no duty to communicate or present such Competitive Opportunity to the Company and (b) have the right to either hold any such
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Competitive Opportunity for such Member's (and its agents', partners' or affliates') own
account lOti benefit or to recommend, assign or otherwise transfer such Competitive Opportunity the Company. to Persons othcr than the Company or any Affliate of
Sectioii 33. Notices.

(a) All notices, requests, consents and other communications hereunder 10 any
by telecopy (or similar delivered in writing in person or electronic means with a copy following by nationally recognized overnight courier) or sent by nationally-recognized overnight courier or first class rcgistcrcd or certified mail, return receipt requested, postage prepaid, addressed to such party at the address sel forth below Or at such other address as may hereafter be designated in writing by such party to the other parties.
part shall be deemed to be suffcient if
(i) If, to the Company:
(Neweo), LLC
(~__._._....___-i
Attention: Telephone: Facsimile:
with a copy to (which shall not constitute notice):

Akin Gump Strauss Hauer & Feld LLP One Bryant Park New York, New York 10036 Attention: Philip C. Dublin
David J. D'Urso
Telephone: 212-872~ 1 000
Facsimile: 212-872-1002; and
(ii)
Schedule I hereto.
i(to any Member, to their respective address set forth on
(b) All such notices, requests, consents and other communications shall be
deemed to have been received (i) in the case of
personal delivery or delivery by facsimile, on the date of such delivery, (ii) in the case of dispatch by nationally recognized overnight courier, on the next Business Day following such dispatch and (iii) in the case of mailing, on the fifth Business Day after the posting thereof.
Section 34. Amendments.

Except as otherwise expressly set forth herein, this Agreement may only be amended, modified, restated or supplemented, and provisions hereof may only be waived, by an instrument
in writing duly executed and delivered by the Company and holders of66.66% of
the
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outstanding Units; provided, however. that (a) any amendment, modification, restatement,
supplement or waiver that would materially and adversely affect the rights or obligations of
any Member, in its capacity as a holdcr of Units, without similarly affecting the rights or obligations hereunder of all holders of Units, shall not be effective as to such Membcr without its prior written consent and (b) the Company shall automatically amend Schedule I hereto without the consent of the Members upon any change required thereby in accordance this with the terms of Agreement. Any waiver of any provision of this Agreement requested by any party hereto must be in writing by the party granting such waiver.
Section 35. Certain Members.

Each Membcr that is not an individual and is a special purpose entity organiz.cd or holding Units, agrees that (a) certificates or instruments reflecting equity intcrcsts in such entity wil note the restrictions conlained in this Agreement 011 the transfer of Units as if such equity interests were Units and (b) no equity interests of such entity may be Transfcrrcd to any Person other than in accordance with the terms and provisions
incorporated for the primary purpose of of this
Agrcement as ifsuch equity interests were Units. The Company shall have the right to
audit each Management Member that is subject to this Section 35 for compliance with this Section 35 from time to time upon prior written notice to such Management Member.
Section 36. Manae:ement Members' Services.
Nothing contained in this Agrecment shall be deemed to obligate the Company or any Subsidiary to employ or retain thc Services of any Management Member in any capacity whatsoever or to prohibit or restrict the Company or any Subsidiary from terminating the services of any Management Member at any timc or for any reason whatsoever, with or without cause.
Section 37. No Conflctin1! Ae:reements.
No Member shall enter into any agreements or arrangements of any kind with any Person the Company on terms inconsistent with the provisions of this Agrcement (whether or not such agreements or arrangements are with other Members or with Persons that arc not part to this Agreement).
with rcspcct to any Units or other Securities of
Section 38. Entire Aercement.

This Agreement and the Bylaws contain the entire agreement among thc partics with respect to the subject matter hereof and supersede all prior agreements and understandings, written or oral, with respcct to such subject matter. The parties hereto rcpresent and warrant that there are no other agreements or understandings, written or oral, rcgarding any of the subject matter hereof other than as sct forth hcrein and covenant not to cnter into any such agreements or \inderstandings after the Effective Date, except pursuant to an amendment, modification or waiver of the provisions of this Agreemcnt.
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PRELIMINARY DRAFT SUBJECT TO MODIFICA nON FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
Section 39. Governini: Law; Jurisdiction. Waiver of Jury Trial.
(a) ThisAgreement shall be governed by and construed in accordance with

Delaware, without giving effecllo any choice of Jaw the Slate of Delaware or any other jurisdiction) that would cause the Applicable Laws of any jurisdiction other than the State of Delaware to be appl cd.
the Applicable Laws of the State of provision or rule (whether of
(b) ANY ACTION OR PROCEEDING AGAINST THE PARTIES RELATING IN ANY WAY TO THIS AGREEMENT MAY BE BROUGHT AND ENFORCED IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND THE PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF BOTH SUCH COURTS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING EACH OF THE
PARTIES HERETO IRRVOCABLY WAIVES, TO THE FULLEST EXTENT PERMirrED BY APPLICABLE LAWS, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY OR THE SOUTHERN DISTRICT OF NEW YORK AND ANY CLAIM THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN ANY INCONVENIENT FORUM. THE PARTIES HERETO AGREE THM A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENTERED IN AND ENFORCED IN ANY COURT HAVING JURISDICTION THEREOF.
(e) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTTO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 40. No Third Party Beneficiaries.

Except as set forth in Section 30. nonc of the provisions in this Agreement shall be for thc benefit of or enforceable by any Person other than thc partics to this Agreement and their respective successors and assigns. The covenants and agreements contained herein shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the respective parties hereto.
Section 41. Further Assurances.
Each Member shall execute all such certificates and other documents and shall do all
such other acts as the Board of Managcrs deem appropriate to comply with the requirements of Applicable Law for the fonnation of the Company and with any Applicable Laws and third-party requests relating to the acquisition, operation or holding of the property of the Company and to achieve the purpose of the Company, including, without limitation, (a) any documcnts that the Board of Managers deems necessary or appropriale to form, qualify or continue the Company as a limited liability company in all jurisdictions in which the Company has an offce or conducts or
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plans to conduct busincss and (b) all such agreements, certificates, tax statcmcnts and other ocuments as may be required to be filcd under Applicable Law in rcspect ofthc Company.
Section 42. Counterparts.
which shall be deemed an original, but all of which taken together shall constitute one and the same Agreement. Facsimile countcrpart signatures to this Agreement shall be binding and enforceable.
This Agreement may be exccutcd in counterparts, each of Section 43. Separability of Provisions.
It is the desire and intent of
the Members that the provisions of
this
Agreement be
enforced to the fullcst extent permissible under ihe Applicable Laws applied in each jurisdiction
in which enforcement is sought. Accordingly, if any particular provision of be adjudicated by a court of competent
this Agreement shall
jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding thc foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceabilty of such provision in any
other jurisdiction.
Section 44. Spousal Consent.
Each Member who is an individual shall causc his or her spouse, as applicable, to execute and deliver a Spousal Consent in the form attched as Exhibit C to this Agreemcnt. The signature of a spouse on a Spousal Conscnt shall not be construcd as making such spouse a Member of the Company or a party to this Agreement except as may otherwise be set forth in such consent. Each Member who is an individual will certify his or her marital status to the Company at the Company's request.
Section 45. Recapitalizations. Exchanees. Splis. Etc.
The provisions of this Agreement shall apply to the full extent set forth herein with respect to the Units and to any and all Sccurities ofthc Company or any successor company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution of which shall be appropriately adjusted for the Units, all of any equity dividends or Distributions, splits, reverse splits, combinations, recapitalizations and similar transactions occurring from time to time. In the event of any split, reverse split, combination, recapitalizalion or similar transaction made with rcspect to the Class A Units, an identical split, reverse split, combination, recapitalization or similar transaction shall be proportionately made to the Class Units based on the number of outstanding Class A Units and Class B Units at such time.
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Section 46. Remedies.

Each party hereto acknowledges and agrees that in the event it fails to perform, observc or dischargc any of its obligations or liabilities under this Agreement, no rcmedy at law will provide adequate relief to the other parties hereto, and agrees that the other parties hereto shall be entitled to specific performance and/or temporary and permanent injunctive reliefin any such case without the necessity of proving actual damages.
* * * * *
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IN WITNESS WHEREOF, the undersigned have duly executed ihis Limited Liability Company Operating Agreement as of the date first writtcn above.
THE COMPANY:
(NEWCOj, LLC
By:
Name: Title:
(MEMBERS):
By:
Name: Title:
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"
"','d",". . ......
.'
Schedule I Schedule of Membei's and Unit Ownership

, ,
,
.,;,.;,":..::,\;.,.:.,Member~llm,e/Addres.s :::
;.;.c-',,:.;,
", J
! i I i !
k
" siA,ln:~!~,'
".
:.;i~~.tf:G~1l~~. ~-' Vii,i_ts, ;:~~::;,
i I i I i i
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Annex I
DEFINITIONS
"Accounting Period" shall mean, for the first Accounting Period, the period commencing on the Effective Date and cnding on the next Adjustment Date. All succceding Accounting Periods shall commence on the day after an Adjustment Date and end on the next Adjustment Date.
"Adjustment Dale" shall mean the lasl day of each Fiscal Year of other date determined by the Board of interim closing of
the Company or any Managers, in its sole discretion, as appropriate for an the Company's books.
"Affliate" shall mean, with respect to any Person, any other Person that, directly or indirectly, through one or more intemiediaries, controls, or is controlled by, or is under common control with, such Person. For purposcs of this definition, the terms "control," "controllng," "controlled by" and "under common control with," as used with respect to any Person, means the possession, directly or indirectly, ofihe power to direct the management and policies of a Person, whethcr through the ownership of voting securities, by contract or otherwise.
"Agreement" shall have the meaning set forth in ihe preamble.
"Applicable Law" means, with respect to any Person, all provisions oflaws, statutes, judgments, decrees or orders of any Governmental Authority applicable to such Person.
ordinances, rulcs, regulations, permits, certificates,
"Assumed Tax Rate" shall mean the highest effective marginal statutory combined U.S.
federal, state and local income tax rate prescribed for a corporation doing business in New York
City, New York (taking into account (a) the deductibility of
state and local income taxes for U.S. federal income tax purposes, and (b) the character (long-term or short-term capital gain, dividend
income or other ordinary income) of
the applicable income).
"Board of
Managers" shaH mcan the board of
managers ofthc Company.
"Business Day" shaH mean any day that is not a Saturday, Sunday, legal holiday or other day on which commercial banks in New York, Ncw York are authorized or required by Applicable Law to close.
"BuYer" shall have the meaning set forth in Section 7(b)(i.

"Bylaws" shall have the meaning set forth in Section 2(c).
"Candlewood" shall mean (
J.
"Capital Account" shall have the meaning set forth in Section 15.
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"Caoital Contribution" shall mean, with respect to each Member, the total amount of cash property contributed to ihe Company by such Member pursuant to Section 15 or othcrwisc or dcemed to be contributed to the Company by such Member for U.S. federal income lax purposes, net of any liabilities associated with such contributed property that the Company is considered to assume or "take subject to" under Section 752 or the Code, which Capital Contribution shall be reflected on Schedule i hereto, as amended from time to time in accordance with the terms of this Agreement.
and the Fair Market Value of
"Carrying Value" shall mean, with respect to any Company asset, the asscts adjusted basis ror u.s. federal income tax purposes, except that the Carring Values of all Company assets shall be adjusted to equal their respective Pair Market Values (as determined by the Bo.ird of Managers), in accordance with the rules set forth in U.S. Treasury Regulations Section 1.704I (b)(2)(iv)(f), except as otherwise provided herein, immediately prior to (a) the date of the acquisition of any additional Units by any new or existing Member in exchange for more than a de minimis Capital Contribution; (b) the date of the Distribution of more than a de minimis amount of Company property to a Member, (c) the date of the grant of more than a de minimis profits interest to a Member for services rendered or to be rcndcred to the Company in his capacity as a Member, or (d) the liquidation of the Company within the meaning ofTrcasury Regulations Section 1.704-1(b)(2)(ii)(g); provided, that adjustment pursuant to claiises (a), (b) and (c) above shall be made only irthe Board of Managers reasonably determines that such adjustments are necessary or appropriatc to reflect the relative economic interests of the Members. The Carrying Value or any Company asset distributed to any Member shall be adjusted immediately prior to such Distribution to equal its Fair Market Value. The Carring Value of any asset contributed by a Member to the Company shall be the Fair Market Value of the asset at the date of its contribution. In the case of any asset that has a Carrying Value that differs from its adjusted tax basis, Carrying Value shall be adjusted by the amount of ' Depreciation calculated for purposes of the definition of 'Net Profits and Net Losses" rather than the amount of depreciation determined for U.S. federal income tax purposes, and Depreciation
shall be calculated by reference to Carrying Value rather than tax basis once Carrying Value
diffcrs from tax basis.
"Certificate" shall have the meaning set forth in Section 2(b).

"Class A Units" shall mean an interest of
the Company designatcd as a Class A Unit.
"Class B Units" shall mean an interest of
the Company designated as a Class B Unit.
"Code" means the lntemal Revenue Code of i 986, as amended.

"Company" shall have the meaning set forth in the preamble.
"Compensatory Interests" shall have the meaning set forth in Section 20(e)(i).
"Competitive Opportunity" shall have the meaning set forth in Section 32.
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"Confidential Information"
shall have the meaning set forth in Section 28(d).
"Co~Salc Notice" shall havc the meaning set forth in Scction 21(d)(i).
"Co-Sale Transferee" shall have thc meaning set forth in Section 21 (d)(i).
"Co-Sale Transferor" shall have the meaning set forth in Section 21 (d)(il.
"Co~Sale Units" shall have the meaning set forth in Section 21
(d)(i.
).
"Credit Suisse Loan Fumlin~" shall mean (
"Credit Suisse Manager" shall have the meaning set forth in Section S(a)(ii).
"Credit Suisse SWAP" shall mean (
J.
"CSAM" shall mean r
I.
"CSAM Mana~er" shall have the meaning set forth in Section S(a)(iii).
"CynressTree" shall mean (
).
"Deficit" shall have the meaning set forth in Section i 7(a).

"Delaware
Act" shall have the meaning set forth in the recitals.
"Depreciation" shall mean, for each Fiscal Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable for Fedeml income 3x purposes with respect to an asset for such Fiscal Year, except that (a) with respect to any asset the Carrying Value of which diffcrs from its adjusted tax basis for Federal income tax purposes at the beginning of such Fiscal Year and which difference is being eliminated by use of the "remedial method" as defined by Section 1.704-3(d) of the Treasury Regulations, Depreciation for such Fiscal Year shall be the amount of book basis recovered for such Fiscal Year under the rules prescribed by Section 1.704-3(d)(2) ofthe Treasury Regulations, and (b) with respect to any which differs from its adjusted tax basis for Federal income tax other asset the Carrying Valuc of purposes at the beginning of such Fiscal Year, Depreciation shall be an amount whieh bears the same ratio to such beginning Carring Value as the Federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year bears to such beginning
adjusted tax basis; provided, however, that in the case of clause (b) above, if
the adjusted tax
basis for Federal income tax purposes of an asset at the beginning of such Fiscal Year is zero, Depreciation shall be dctermined with reference to such beginning Carring Value using any reasonable method selected by the Board of Managers.
"Distribution" shall mean each Distribution made by the Company to a Member. whether the Company and whether by Distribution, redemption, repurchase or otherwise; Drovided that thc following shall not be a Distribution: (a) any
in cash, property or secmities of
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exchange of securities of the Company in which the Members do not receive any cash or other assels or (b) any subdivision (by Unit split or otherwise) or any combination (by reverse Unit split or otheiwise) of any outstanding Units. recapitalization or
"Drag-Along Sale" shall have the meaning set forth in Scction 21(c)(i.
"Drag-Along Sale Notice" shall have the meaning set forth in Section 21(c)(ii).
"Drag-Along Securities" shall have the meaning set forth in Section 21(c)(ii).
"Drag-Along Seller" shall have the meaning set forth in Section 21(c)(i).
"Drag-Along Threshold" means either (i) 50% ofihc outstanding Units, if the DragAlong Sale attributes to the Company an enterprise value in excess of $1 00,000,000 or the outstanding Units, ifthe Drag-Along Sale attributes to the Company an (ii) 66.66% of enterprise value less than or equal to $100,000,000.
"Effective Date" shall mean I
),2010.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"Excluded Securities" mean Securities of
the Company (a) issued or granted to
Managers, directors, offcers or employees orihe Company or its Subsidiaries as incentive
compensation for services; (b) issued as a dividend or pro rata distribution to existing Members,
or any split, recapitalization or other subdivision or combination of
Units; (c) issued in
conneciion with, or for the purposc of, an acquisition (whether by stock sale, merger, recapitalization, asset sale or otherwise) of another Person (or any portion thereof) or its respective businesses or opcratons; and (c) issucd in a public offering of the Securities of Company.
"Exercise Period" shall have the meaning set forth in Section 7(b).
publicly-traded Securities, the average of
the date of determination, (a) in the case of their last sales prices on the applicable trading exchange or quotation system in each trading day during the five trading-day period ending on such date and (b) in thc case of any other Securities or properly, the fair market value of such Securities or property, as reasonably determined in good faith by the Board of Managers.
"Fair Markel Value" shall mean, as of "First Len Steering Committee Member" shall mean any of Candle wood, Credit Suisse Loan Funding, CSAM, CypressTree, GE, the Highland Managed Funds and Sorin.
"Fiscal Year" means (a) the taxable year ofthe Company, which shall be the calendar ycar unless otherwise required (or, in the Board of Managers' reasonable discretion, pennitted) by Section 706(b) of the Code, and (b) for purposes of Section i i through Section 14. the portion
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of any Fiscal Year for which the Company is required to (or does) allocate gross income, Net Profit, Nel Loss, or other items pursuant to Section I I through Section 14.
"Forfeited Unit Transferees" shall have the meaning set forth in Section 17(c). "Forfeiture Transfer" shall have the meaning set forth in Section 17(c).
j. o'Govemmental Authority" shall mean any domestic or foreign government or political

level and whether executive, legislative or judicial in nature, including any agency, authority, board, bureau, commission, court, department or other instrumentality thereof.
subdivision thereof, whether on a federal, state or local
"GE" shall mean (
"Highland Managed Funds" shall mean all or (

affliated funds (and any direct designee of( n.
1 and its associated related
"Highland Managet' shall have the meaning set forth in Section 5(a)(i).
"Indemnitee" shall have the meaning set forth in Section 30(bl.
"IPO" shall mean the closing of the first public offering of and sale of Securities of the the Company) (other than on Forms S-4 or S~8 or their equivalent), pursuant to an effective registration statement fied by the Company under the Securities Act.
Company (or any other entity created through any reorganization of
"IRS" shall mean the Internal Revenue Service.

"Management Members" shall mean (a) f 1 and (b) any other Member
designated as a "Management Member" by the Board of Managers from time to time.

"Manager" shall mean any Person that is a member or the Board of
Managers.
"Members" shall mean the holders of Class A Units and Class B Units signatory to this Agreement (including pursuant to the execution and delivery of a Joinder Agreement, substantially in the form attached hereto as Exhibit 8).
"Net Profits" and "Net Losses" shall mcan, with respect to any Accounting Period, net the Company for siieh Accounting Period, determined in accordance with 703(a) of the Code, including any items that are separately stated for purposes of 702(a) of the Code, as determined in accordance with federal income tax accounting principles with the following adjustments:
income or net loss of
the Company that is exempt from United States federal (a) any income of incomc tax shall be included as income;
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the Company described in 705(a)(2)(B) of
(b) any expenditures of
the Code
or treated as cxpcnditures pursuant to 1.704-1 (b)(2)(iv)(i) of
the Treasury Regulations shall be
treated as current expenscs;

(c) any items of income, gain, loss or deduction specially allocated pursuant
to this Agreement, including pursuant to Section i 7(a), Section 17(b) and Section i 7(d), shall be excluded from the determination orNet Profit and Net Loss;
(d) iiny adjustment to the Carrying Values orthe Company's assets pursuant to
the definition or
Carrying Value shall be treated as Net Profit and Net Loss; and
(e) in lieu of depreciation, amortization, and other cost recovery deductions
taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year, computcd in accordance with the definition of "Depreciation".
"New First Lien Notes" shall mean those certain Ncw First Lien Notes,dated as of f ,2010), issued by the Company pursuant to L ).
"New Securities" shall have the meaning set forth in Section 7(b).
"Notice of
Proposed Issuance" shall have the meaning set forth in Scction 7(b).
"Observer" shall havc the meaning set forth in Section 28(b).

"Operations Manager" shall mean the Person designated by the holders of66.66% of outstanding Units from timc to time to manage the business of
the the Company. Initially, the
Operations Manager shall be ( j.
"Permitted Transfer" means:

(a) in the case of any Mcmber who is an individual, a Transfcr of Units to a trust or estate planning-related entity for thc sole benefit of such Member or solely upon the death of such individual in accordance with such individual's will or pursuant to laws of intestacy;
any Member that is a partncrship (other than a Managemcnt Units to its limitcd, special and general partners as a Distribution by such partnership to its partners and (ii) a Transfer of Units made to any Affliate of such Member or any of its Affliiites; or
(b) in the case of Member), (i) a Transfer of (c) in the case of
any Member that is a corporation, company or limited

Units to its
liability company (in each case, other than a Management Member), (i) a Transfer of
shareholders or members, as the case may be, as a Distribution by such Person to its shareholders or members, as the case may be and (ii) a Transfer made to any Affliate of such Member or any
of its
Affliates.
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"Permitted Transferee" means any Person acquiring Units from a Member in accordance
with the provisions of
this Agreement.
"Person" means aiiy legal person, including any individual, corporation, investment fund, partnership, lmited partnership, limited liability company, joint vcnturc,joint stock company, association, trust, unincorporated entity or Governmental Authority.
"Pro Rata Portion" shall mean, with respect to any Member in respect of (exprcsscd as a percentage), the numerator of Mcmber, and the denominator of which is the number of
Units, a fraction
Units held by such which is the total number or Units outstanding, at the time in
question.
"Proposed Rules" shall have the meaning set forth in Section 20(e)(i).
"Purchasing Member" shall have the meaning set forth in Section 7(b)(vii).
"Representatives" shall have the meaning set forth in Section 32.
"Rule 144" shall have the meaning set forth in Section 10(c).
"Safe Harbor Elcction" shall have the meaning set forth in Section 20(e)(i).
"Sale of the Comoany" shall mean (a) the Transfcr of all or substantially all of
the
the Company or (c) the merger or consolidation of the Company with another Person, in each case in clauses (b) and the issued and outstanding (c) above under circumstances in which the holders of a majority of Unils, immediately prior to such transaction, hold less than 50% of the outstanding Units (or less than 50% of the voting power of the surviving or resulting the outstanding equity Securities of Person, as the case may be) immediately following such transaction.
Company's assets, (b) the Transfer of the outstanding equity Securities of
"SEe" shall mean the Securities and Exchange Commission and any other Governmental Authority at the time administering the Securities Act.
"Securities" shall mean, with respect to any Person, all equity intcrcsts of
such Person, all
securities convertible into or exchangeable for equity interests of such Person, and all options, warrants, and other rights to purchase or otherwise acquire from such Person equity interests, including any equity appreciation or similar rights, contractual or otherwise.
"Securiiics Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
"Sorin" shall mean (
).
"Spousal Consent" shall mean a consent, in the form attached to this Agreement as
Exhibit C, executed by the spouse of any Member who is an individuaL.
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"Subieet Parties" shall have the meaning set forth in Section 28(d).
"Subsidiary" shall mean, with respect to any Person, any corporation, association,
partncrship, limited liability company or other business entity of which 50% or more of
the total
voting power of equity interests (including partnership interests) entitlcd (without rcgard to the occurrcncc of any contingency) to vote in the election of directors, managers, representativcs or trustecs thereof is at the time owned or controlled, directly or indirectly, by (a) such Person, such Person, or (c) one or more subsidiaries of (b) such Person and one or more subsidiaries of this definition, the terms "control," "controlling," "controlled by" such Person. For purposes of and "under common control with," as used with respect to any Person, means the possession, directly or indirectly, of the power to direct the management and policies of a Person, whether voting securities, by contract or oiherwise. through thc ownership of "Tag-Along Notice" shall have the meaning set forth in Section 21(d)(iv).
"Tax Distributions" shall have the meaning set forth in Section 13.
"Tax Matters Parter" shall have the meaning set forth in Section 20(c).
"Transfer" shall mean, as applicable, (a) as to any Security or asset (the "Subiect Property"), to scll, transfer, assign, gift, pledge, grant a security interest in, distribute, encumber, hypothecate or othen..ise dispose of (including, without limitation, the foreclosure or other acquisition by any lender with respect to the Subject Property pledged to such lender by the holder of the Subject Property), whether directly or indirectly (including, without limitation, by means ofa Tninsfcr of any Security issued by a Person that holds, directly or indirectly, an interest in the Subject Propert), such Subjcct Propert, either voluntarily or involuntarily and with or without consideration or (b) the act of such sale, transfer, assignment, gift, pledge, grant of security interest, Distribution, encumbrance, hypothecation or other disposition.
"Transferee" shall mean any Person to whom a Member shall Transfer Units in
accordance with the tenns of this Agreement.

"Treasury Rcgulations" shall mean regulations promulgated pursuant to the Code.
'.Units" shall mean all Class A Units and Class B Units held at any time during the tenn ofihis Agreement by any Member, and shall include any Securities issued in respect of or in exchange for such Class A Units or Class B Units, whether by way of dividend or other Distribution, split, reverse split, recapitalization, merger, rollup transaction, consolidation, conversion or reorganization.
*******
A-I-8
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Exhibit A
BYLAWS
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Exhibit B
JOINDER
AGREEMENT
The undersigned is executing and delivering this Joinder Agrecment pursuant to thc Limited Liability Company Operating Agreement dated r 1. 2010, as amended, modified, restated or supplemented from time to time, (the "Operating A~reemcnt"), of(Newco), LLC, a Dclaware limited liabilty company (the "Company").
By executing and delivering this Joinder Agreement to the Company, the undersigned the provisions of the Operating Agreement in the same manner as if the undersigned were an original signatory to the Operating Agreement.
hereby agrees to become a party to, to be bound by, and to comply with all of
The unersigned agrees that the undersigned shall be a (MemberlManageffent Member), as such tenn is defined in the Operating Agreement.
Accordingly, the undersigned has executed and delivered this Joiner Agreement as of
Signature of Member
Print Name of Member
Address
Facsimile
Telephone
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Exhibit C
SPOUSAL CONSENT
Dated:
Reference is hercby made to the Limitcd Liability Company Operating Agreement of

fNewco), LLC, dated as off 1. 2010, as may be amended, supplemented, modificd or
rcstated from time to time (the "Operating Agreement"). Capitalized tenns used herein but not otherwise dcfined shall have the meaning ascribed thereto in the Operating Agreement.
This Spousal Consent is being delivered pursuant to Section 44 of Agreement, a copy of
the Operating
which has bcen providcd to the undersigned ("Spouse"). Spoiise, as the spouse of (the "Relevant Member"), consents to all of the provisions ofihe Operating Agreement and to the extent that Spouse may lawfully do so, Spouse confirms that the Relevant Member may act alone with respect to all matters in connection with the Operating Agreement. Spouse also confirms that the Relevant Member may enter into agreements pursuant to the Operating Agreement and consent to and execute amendments thereof, without further signature or consent of, or notice to, Spouse. Spouse further agrees that he/she wil not take any action to oppose or otherwise hinder the operation of the provisions of
the Operating Agreement.
coiisents to be bound by the terms of
To the cxtcnl of any properly interest that Spouse may have in such Units. Spouse the Operating Agreement, including, without limitation, restrictions on transfer and obligations to scll sct forth therein.
Name of
Spouse:
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Exhibit K
New First Lien Credit Agreement
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CREDIT AGREEMENT
DATED AS
OF I
among
INEWCO LLq, THE RHODES COMPANIES, LLC RHODES RANCH GENERAL PARTNERSHIP RHODES RANCH GOLF AND COUNTRY CLUB, LLC HERITAGE LAND COMPANY, LLC,
TICK, LP,
GLYNDA, LP, CHALKLINE, LP, BATCAVE,LP, JACKKNIFE, LP, WALLBOARD, LP, OVERFLOW, LP, TUSCANY ACQUISITIONS, LLC, TUSCANY ACQUISITIONS II, LLC, TUSCANY ACQUISITIONS II, LLC, TUSCANY ACQUISITIONS LV, LLC, PARCEL 20 LLC, RHODES DESIGN AND DEVELOPMENT CORPORATION, C&J HOLDINGS INe., RHODES REALTY, INC., JARUPA LLC, ELKHORN INVESTMENTS, INC., RHODES HOMES ARIZONA, LLC, RHODES ARIWNA PROPERTIES, LLC, TRIBES HOLDINGS LLC, SiX FEATHERS IIOLDINGS, LLC, ELKHORN PARTNERS, A NEVADA LIMITED PARTNERSIIP BRAVO INC., GUNG-HO CONCRETE, LLC, GERONIMO PLUMBING, LLC, APACHE FRAMING, LLC, TUSCANY GOLF COUNTRY CLUB, LLC, ,nO PINNACLE GRADING, LLC
astheBorrowers,
Tll E LENDERS LISTED HEREIN, as the Lenders,
as Adniinslralive Agent and Collateral Agent

$50,000,000 SENIOR SECURED CREDIT F ACIUTY
I j,
,nO
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TABLE OF CONTENTS
Pa~e
SECTION I. DEFINlllONS.....................................................................................................3
i. i Certain Defined Terms ............................__........__....__................__.........__.............3

1.2 Defined Terms; Accounting Ten11; Utilization ofGAAP for Purposes of
Calculations Under Agreement ..............................__...........................................32
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS .....................33

2.1 Commitments; Loans ..............................................................__00......................33
2.2 Interest on the Loans...........................................................................................33 2.3 F ecs .............................................................__.__00...............................................36 2.4 Repayments and Prcpayments; General Provisions Rcgarding Payments ............36
2.5 (Intentionally Omitted) ........................................................................................40 2.6 Special Provisions Governing LIBOR Loans..........................................__.......40
2.7 Increased Costs; Taxes .........__..............................................00..........................42

2.8 Mitigation Obligations; Replacement of Lcnders................mm........................45
2.9 Releases; Subordinations ....................................................00..........................46

2.10 Subordinations in connection with Map Approvals...............m...........................47
2.1 I Subordinations in connection with Qualified Sales Agrcements.......................m48

SECTION 3. CONDITIONS TO EFFECTIVENESS ............................................................48
3.1 Conditions to Effectiveness .......__......__.............................................................48
SECTION 4. REPRESENTATIONS AND WARRANTIES ..............................................55

4.1 Organization and Qualification .........................................................................55 4.2 Power and Authority .............m..........................__..........................................55 4.3 Legally Enforceable Agrccment .....................................................................56 4.4 No Conflict............................................. ....................................__......00...............56 4.5 Capital Structure ...................................................................__....__...__.__..............56 ..................__........00........................57 4.6 Licenses.......................................................
4.7 Corporate Names .................................................................__.............................57

4.8 Business Locations; Agent for Process .............__............................................57
4.9 Title to Propcrties...............................................__.............................................57

4.10 Priority of
Liens; UCC-I Financing Statemcnts...........................................58
4. i i No Subordination ..............................................................................................59 4. i 2 Permits; Licenses; Franchises .................................................m.......................59 4. i 3 Indebtedness.......................................................................................__..__...........59 4.14 llntentionally Omitted) ............__....__...................................................................59
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4.15 Disclosure ............................................................................................................59 4.16 Solvent Financial Condition .............................................................................60 4.17 Surety Obligations .............................................................................................60
4.18 Taxes .....................................................................................................................60 4. i 9 Brokers...................................................................... ..................................60

4.20 Intellectual Property .............................................................................................6 i 4.21 Governmental Authorization......................................... ...................................6 i 4.22 Compliance with Laws .........................................................................................61
4.23 Burdensome Contracts .......................................................................................62 ................................................62 4.24 Litigation...........................................oo........... 4.25 No Defaults ..............00...........................00.......................................................62 ...........................................................62 4.26 Leases...................................................... 4.27 Employce Bcnefit Plans ..............................................00.....................................63
4.28 Trade Relations 00...............................................................00...........................64 4.29 Labor Relations.................................................................................................64 4.30 Not a Regulated Entity ..................................................................m................64
4.31 Margin Stock................................................................00.........00...........................64 4.32 No Material Advcrse Change..................................m.........................................64

4.33 Environmental Matters.......................................................................................64 4.34 Material Contracts.......................................................m...................................66 ...........................00.00.........................67 4.35 Utilities....................................................... 4.36 Entitlements ......................................................................................................67
SECTION 5. AFFIRMATIVE COVENANTS .............................................................................68
5.1 Visits and Inspections .....................................................00...................................68

5.2 Notices n...........................................................................................................68
5.3 Financial Statements and Other Reports............................................................70

5.4 Corporate Existence ........................................................................................ 75 5.5 Payment of Taxes and Claims; 'lx Consolidation .........................................75 5.6 Maintenance of Properties; Insurancemn....n...................................................... 76 5.7 Lender Meeting..oo...........................................................................................76 5.8 Compliance with Laws ......................................................................................76 5.9 Environmental Disclosure and Inspection ..............................m...........................76
5. i 0 Remedial Action Regarding Hazardous Materials.............................................. 78

5.11 Additional Collateral; Execution of Guaranty and Collateral Documents
by Future Subsidiaries..........................................................m......................... 78 5.12 Intentionally Omitted.).......................................................................................8 I
5.13 Further Assurances..........................................................................................81

5.14 Titlc ..............................................................................................................81 5.15 Maintenance of Entitlements; Development Agrecments..............................81
SECTION 6. NEGATIVE COVENANTS........................................................................82
6.1 Indebtedness............................................... ........................................................82
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6.2 Liens and Related Matters ...........................................................................84 6.3 Inveshnents ..........................................................................................................85 6.4 Contingcnt Obligations .................................................................................87
6.5 Restricted Payments...........................................................................................87

6.6 Financial Covenants.........................................................................................88
6.7 Restriction on Fundamental Changes .................................................................89

6.8 Sale or Discount of Reccivables .......................................................................89
6.9 Asset Sales ........................................................................................................89

6.10 Transactions with Shareholders and Affliates.......................................................92
6.1 I Conduct of Business ............................................................................................93 6.12 (Intentionally OmiucdJ ........................................................................................93

6.13 Amendments or Waivers of
Certain Agreements..................................................93
6.14 Fiscal Year ..................__...............................................................................93
6.15 Hedge Agreements ...............................__........__..............................................93

6.16 (Intentionally Omitted) .........................m.......................................................93
6.17 Limitation on Unenttled Properties.....m..........................................................93

6.18 Limitation on Purchase of
Real Property Assets..................................................94
SECTION 7. EVENTS OF DEFAULT....................................................................................94
7. i Payment of Obligations..............m...................................................................94
7.2 Misrepresentations .....__.__...............................................................................94 7.3 Breach of Certain Covenants .........................................................................__94 7.4 Breach of Other Covenants ...............................................................................94 7.5 Default Under Loan Documents .........................................................................95 7.6 Other Defaults....................................__.............................................................95 7.7 Insolvency Proceedings .......................................................................................96 7.8 Business Disruption; COndemnation...................................................................96 7.9 ERISA .................................................................................................................96 7.10 Challenge to Loan Documents; Invalidity ..........................................................96
7. i i Judgment ..................................__..........................................................................97 7.12 Repudiation of or Default Undcr Guaranty ................................__.......................97 7.13 Criminal Forfeiture .............................................................................................97
7.14 Change of COntrol..............................................................................................__97
SECllON 8. AGENTS ..................................................................................................................98

8.1 Appointment .........................................................................................................98 8.2 Rights iis a Lender...............................................................................................99
8.3 Exculpatory Provisions ..................................................................................99 8.4 Reliance by the Agents.....................................................................................100 8.5 Delegation of Duties ........................................................................................100 8.6 Rcsigniition of Administritive Agent and/or Collateral Agent __.......................1 01
8.7 Collateral Documents.....................................__..__...__.................................... i 02
8.8 Non-Reliancc on Agents and Other Lenders ...............................................102
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SECTION 9. MISCELLANEOUS .............................................................................................103

9.1 Assignments and Participations in Loans .....00...........................00..00.............103 9.2 Expenses; Indemnity; Damage Waiver ..........................................................107 9.3 Right of Set~OIT ...........................................................................00................ i 08
9.4 Sharing of
Payments by Lenders ...................................................................109
9.5 Amendments and Waivers .................................m......................................00......109
9.6 Independence of Covenants ........................................00................................. I 1 1 9.7 Notices .................................................................................................00............ 1 1 1

9.8 Survival of Reprcsentatons, Warranties and Agreements ............................1 i 3 9.9 Failure or Indulgence Not Waiver; Remedies Cumulative ..........n...................1 13 9.10 Marshalling; Payments Set Aside ...................................00.............................1 13
9. i i Severability ...................................................................................................1 14 the Lenders' Rights....................! 14 9.12 Obligations Several; Independent Nature of
9.13 Maximum Amount.................................................................0000.........00...........1 i 4 9.14 lIeadings .................................................00...00..................................................115 9.15 Applicable La\v ...........................00................................................................1 i 5
9.16 Successors and Assigns..........................n.................................................... i 15 Process ...............................................115 9.17 Consent to Jurisdiction and Service of 9. I 8 Waiver or Jury Trial...............................n..........................................! 1 6
9.19 Confidentiality .............................................................m...n..n.n......00.........1 17 9.20 Borrowers' Responsibility For Compliance With Environmental Laws ............ 1 18 9.2 i Joint and Several Liability ........00.........................................00..00.......................1 i 8 9.22 Counterparls; Integration; Effectiveness; E!eetronic Exccution.........................120 9.23 USA Patriot Act Notification ...00.....................................00........................... i 21
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~;XHIBITS
Exhibit I ..........Form of Administrative Questionnaire Exhibit 1l.""h....Form of Assignment Agreement

Exhibit Illmm....Form of Assignment of
Declarants Rights
Exhibit IV..........Form of Compliance Certificate Exhibit V ...........(Intentionally Omitted) Exhibit Vl........rlntentionally Omitted) Exhibii VII ........(Intentionally Omitted) Exhibit VII .......Form orNote Exhibit IX.........(lntentionally Omitted) Exhibit X..........Form of Pledge and Security Agreement Exhibit XI.........Description of Projects
Exhibit Xll......Form of Guaranty
Copyright Security Agreement Exhibit XIV.......(Intentionally Omitted)

Exhibit XIII .......Form of
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CREDIT AGREEMENT
This CllEDIT AGREEMENT (this "Agreement") is dated as of

I 1 and entered into by and among (NEWCO LLC), a r l limited liability company (("Newco")), THE RHODES COMPANIES, LLC ("Rhodes Companies"), RHODES
RANCH GENERAL PARTNERSHIP ("Rhod~, GP"), RHODES RANCH GOLF AND COUNTRY CLUB, LLC ("Rhodes Ranch Golf'), HERITAGE LAND COMPANY, LLC, a Nevada limited liabilty company ("Heritae:e Land"), TICK, LP, a Nevada limited partnership ("Tick"), GLYNDA, LP, a Nevada limited partnership ("Glvnda"), CHALKLINE, LP, a Nevada limited partnership ("Chalkline"), BATCAVE, LP, a Nevada limited partnership ("Batcave"), JACKKNIFE, LP, a Nevada limited partncrship ("Jackknife"), WALLBOARD, LP, a Nevada
limited partnership ("Wallboard"), OVERFLOW, LP, a Nevada limited partnership ("Overflow"), TUSCANY ACQUISITIONS, LLC, a Nevada limited liability company
("TuscanY Acquisitions"), TUSCANY ACQUISITIONS II, LLC, a Nevada limited liability
company ("TuscanY Acquisitions 11), TUSCANY ACQUISITIONS 1l, LLC, a r i
limited liability company ("TuscanY Acquisitions HI"), TUSCANY ACQUISITIONS iv, LLC,
a ( i limited liabilty company ("TuscanY Acquisitions IV"), PARCEL 20 LLC, a
I 1 limitcd liabilty company ("Parcel"), RHODES DESIGN AND DEVELOPMENT
CORPORATION, a Nevada corporation ("Rhodes Dcsie.n"), C&J HOLDINGS INC., a Nevada
corporation ("C&J"), RHODES REALTY, INC., a Nevada corporation ("Rhodes Realty"),
JARUPA LLC, a' 1 limited liability company ("Jarupa"), ELKHORN
INVESTMENTS, INC., a Nevada corporation ("Elkhorn Investments"), RHODES HOMES ARIZONA, LLC, an Arizona limited liability company ("Rhodes Homes Arizona"), RHODES
ARIZONA PROPERTIES, LLC, an I ) limited liabilty company ("Rhodes Arizona

Properties"), TRIBES HOLDINGS LLC, a Nevada limited liability company ("Tribes"), six
FEATHERS HOLDINGS, LLC, a l 1 limited liability company ("Six Feathers"),

ELKHORN PARTNERS, A NEVADA LIMITED PARTNERSHIP, a Nevada limited partnership
("Elkhorn Partners"), BRAVO INc., a Nevada corporation ("Bravo"), GUNG-HO
CONCRETE, LLC, a Nevada limited liability company ("Gung-Ho"), GERONIMO PLUMBING, LLC, a I llimited liability company ("Geronimo"), APACHE FRAMING,
LLC, a Nevada limitcd liabilty company ("Apache"), TUSCANY GOLF COUNTRY CLUB, LLC, a Ncvada limited liabilty company ("TuscanY Golf'), and PINNACLE GRADING, LLC a
Nevada limitcd liability company ("Pinnacle" and, collectively with (Newco), Rhodes
Companies, Rhodes GP, Rhodes Ranch Golf, Heritage Land, Tick, Glynda, Chalkline, Batcave,
Jackknife, Wallboard, Ovcrl1ow, Tuscany Acquisitions, Tuscany Acquisitions lJ, Tuscany
Acquisitions Il, Tuscany Acquisitions iv, Parcel, Rhodes Design, C&J, Rhodes Realty, Jarupa, Elkhorn Investments, Rhodes Homes Arizona, Rhodes Arizona Properties, Tribes, Six Feathers, Elkhorn Partners, Bravo, Gung-Ho, Geronimo, Apache, and Tuscany Golf, the "Borrowers" and
each, individually, a "Borrower"), THE BANKS, FINANCIAL INSTITUTIONS AND

OTHER ENTITIES LISTED ON THE SIGNATURE PAGES HEREOF (together with their respective successors and permitted assigns, each individually referred to herein as a "Lender"
and collectively as the "Lenders"), and I 1 as administrative agent for thc Lenders
(together with its siiccessors in such capacity, the "Administrative Aecnt"), as collateral agent
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for the Secured Parties (as defincd below) (together with its successors in such capacity, the "Collateral A2ent" and together with the Administrative Agent collectively, the "Al!ents") for
the Lenders.
R.!C!IAl,~
A. WHEREAS, Heritage Land, Rhodes Companies, Rhodes GP (collectively, the "Original Borrowers"), Credit Suisse Cayman Islands Branch, as administrative agent,
collateral agent and syndication agent, and the financial institutions party thereto, as lenders, are parties to that certain Credit Agreement, dated as of November 21, 2005 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Pre-Petition Credit Agreement").
B. WHEREAS, on March 31, 2009 or, tor Tuscany Golf, Pinnacle, and Rhodes
Homes Arizona, April i, 2009 ("Petition Date"), the Original Borrowers and certain affliates,
as debtors and debtors-in-possession (the "Debtors"), commenced voluntary cases under Chapter 1 i of the Bankruptcy Code (as defined below) in the United States Bankruptcy Court for
the District of Ncvada (the "Bankruptcy Court"), which cases arc b~ing jointly administered (the "Chapter 11 Cases").
C. WHEREAS, the Second Amended Plan of
Reorganization pursuant to Chapter i i
of the Bankruptcy Code for the Rhodes Companies, LLC et al. dated November L.,2009,
ficd with the Bankruptcy Court and any Modifications (as defined below) thereto (the "Plan of Reorganization") has been confirmed pursuant to the Confirmation Order (as defined below), and concurrntly with the effectiveness ofthis Agreement, the effective date with respect to such
Plan of
Reorganization has OCCUlTed.
D. WHEREAS, in connection with the Plan of Reorganization, the Pre-Petition

Credit Agreement has been terminated and it has been agrced by the parties hereto to enter into this Agreement.
E. WHEREAS, the Agents and the Lenders party hereto desire to enter into this
Agreement to provide for such loans to the Borrowers subject to the terms and conditions containcd herein.
NOW, THEREFORE, in consideration of the premises and the agreements,

provisions and covenants herein contained, the parties hereto agree to enter into this Agreement as follows:
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PRELIMINARY DRAFT
SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
SECTION i. DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the following meanings:
"Acceptable Appraisal" mcans an appraisal commissioned by and addressed to the

Agcnts (and reasonably acceptable to the Requisite Lenders as to form, assumptions, substance,
and appraisal datc), prepared by a qualificd professional appraiser acceptable to the Requisite
Lenders, and complying in all material respects with the requirements of the Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989; provided, that with respect to any Real Properly Collateral, until a new Acceptable Appraisal has becn completed following the Etfcctive Date, the appraisal existing as of the Effective Date shall be deemed to constitute the Acceptable Appraisal with respect thereto.
"Administrative A2ent' has the meaning assigned to that tcrm in the preamble to this
Agreement.
"Administrative Ouestionnaire" means an Administrative Questionnaire substantially in the form of Exhibit I annexed hereto or in such other form as may be approved by the
Administrative Agent.
"Affccted Lcnder" has the meaning assigned to that term in subsection 2.6c.
"Affected Loans" has the meaning assigned to that term in subsection 2.6C.
"Affliate" means, with respect to a specified Person, another Pcrson that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
"Affiiate Transaction" has the meaning assigned to that term in subsection 6.10.
"A2cnts" has the meaning assigned to that term in the preamble to this
Agreement.
"Aiireement" has the meaning assigned to that term in the preamble hereto.
"Apache" has the mcaning assigned to that term in the preamble to this Agreement.
"Applicable Laws" means, collectively, all statutes, laws, rules, regulations, ordinances,
decisions, writs, judgments, decrees, and injunctions of any Governmental Authority affecting
the Borrowers, any of their Subsidiarics, any Project or any Collateral (including, without limitation, any Real Property Collateral), or any of the other assets of the Borrowers and their
Subsidiaries, whether now or hercaftcr enacted and in force, and all Governmental
Authorizations relating thereto, and all covenants, conditions, and restrictions contained in any instruments, either of their Subsidiaries, at any time record or known to the Borrowers or any of
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in force affccting any Real Property Asset or any part thereof, including any such covenants, conditions and restrictions which may (a) require improvements, repairs or alterations in or to such Real Property Asset or any part thereof or (b) limit the use and enjoyment of such Real
Properly Asset as used or intended to be used by the Borrowers and their Subsidiaries.
"Applicable Tax Rate" means, with respect to each Fiscal Year, the sum of the highest marginal tax rates applicable to individuals under the United States fcderal income tax laws and applicable slate and local income tax laws for such years.
"Appraised Value" means, with respect to the Real Property Collateral or any portion thereof, the "as is" appraised value of such Real Property Collateral or portion thercofset forth in the most.recent Acceptable Appraisal received by the Agents pursuant to the Loan Documents.
"Approved Fund" means any Fund or similar investment vehicle that is administered or managed by (a) a Lender, (b) an Affliate ora Lender or (c) an entity or an Affliate of an entity that administers or manages a Lender.
"Asset Sale" means the sale, lease, sale and leaseback, assignment, conveyance, transfer or other voluntary disposition by the Borrowers or any of their Subsidiaries to any Person (other than the Loan Parties) of any right or interesl in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock (including, without limitation, of any of the Capital Stock of any of the Borrowers or any of their Subsidiaries, or the issuance of Capital Stock any Subsidiary of the Borrowers to any products Person that is not a Loan Part), but excluding (a) sales, leases and other dispositions of and services in connection with the golf and other ancilary facilities of any Project (including sales of memberships in the clubs relating to such facilities), in each case, in the Ordinary Course
of Business, (b) sales, exchanges and other dispositions of obsolcte, worn out or excess
equipment in the Ordinary Course of Business, which, in the case of such asset sales in excess of
$1,000,000 in a single transaction or series of related transactions, shall be certified in an Offcer's Certificate as being a sale of obsolete, worn out or excess equipment in the Ordinary
Course of Business, (c) any use of Cash and Cash Equivalents in a manner not prohibited hereunder, and (d) the non-exclusive licensing of intellectual property in the Ordinary Course of Business.
"Assignment Agreement" means an assignment and assumption agreement in

substantially the form of Exhibit II annexed hereto or in such other form as may be approved by the Administrative Agcnt.
"Assil!nment of Declarant's Ril!hts" means the collective reference to (i) the

Assignment of Declarant's Rights, dated as of , made by _._.
Assignment or Declarant's Rights, daled as of , made by Assignment of Declarant's Rights, dated as of , made by
in favor of the Agents, substantially in the form of Exhibit II-A anncxed hereto, (ii) the
in favor of the Agents, substantially n the form of Exhibit II-B anncxcd hereto, and (iii) the
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PRELIMINARY DRAFT SUBJECT TO MOOIFICA TION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
in favor of the Agents, substantially in the form of Exhibit Il-C annexcd hereto, as each may
hereafter be Modified from time to time.
"Bankruptcv Code" means Tiile II of the United States Code entitled "Bankruptcy", as
now and hereafter in effect, or any successor statute, together with all offcial rules and
rcgulations thereunder.
"Bankruptcy Court" shall havc thc mcanings set forth in the recitals hereto.
"Batcave" has the meaning assigned to that term in the preamble to this Agreement.
"Board" means the Board of
Managers ofINewco).
"Borrower Entity" means anyone of
the Borrowers or thcir respective Subsidiaries.
"Borrower Pension Piau" mcans any pension plan, as defined in Scction 3(2) of ERISA, other than a Pension Plan or Multiemploycr Plan, which is intended to be qualified under Section 401 (n) of the Internal Revenue Code and which is, or was within the past six years, maintained
or contributed to by any Borrower Entity.
"Borrowers" has thc meaning assigned to that tenn in the preamble to this Agreement.
"Borrowers' Knowlcde:e" means the actual knowledge, after reasonable inquiry, of any
Respunsible Offcer.
"Bravo" has the meaning assigned to that term in the preamble to this Agreement
"Business Day" means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law lo close.
"Calculation Date" has the meaning assigned to that term in subsection 6.6A.
"Capital Lease" means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.
"Capital Stock" means any and all shares, intcrests, participations or other equivalents (however designated) of capital slock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, common stock, preferred
stock, partncrship interests (general and limited) and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the
foregoing.
"Cash" means money, currency or a crcdit balance in a Deposit Account.
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PRELIMINARY DRAFT SUBJECT TO MOOlFICA TION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
"Cash Equivalents" means (a) marketable securities issued or directly and

unconditionally guaranteed by the United States Government or issued by any agency thereof
and backed by the full faith and credit of from the date of acquisition thereof; (b) marketable direct obligations issued by any statc of
the United States, in each case maturing within one year the
United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having the highest rating obtainable from either S&P or Moody's; (c) commercial paper maturing no more than one year from ihe date of creation thereof and, at the
iime of acquisition, having a rating of at least A-I from S&P or at least P.I from Moody's; (d)
certificates of deposit or bankers' acceptances maturing within one ycar from the date of
acquisition thereof and, at the time of acquisition, having a rating of at leat A-I from S&P or at least P-I from Moody's, issued by any Lender or any commercial bank organized under the laws
of the United States of America or any state thereof or the District of Columbia having
unimpaired capital and surplus of not less than $500,000,000 (each Lender and each such commercial bank being herein called a "Cash Equivalent Bank"); (e) investment funds with a
rating of at least AAA from S&P investing 95% of their asscts in securities of the type described in clauses (a), (c) and (d) above; and (f) eurodollar timc deposits having a maturity of less than one year purchased directly from any Cash Equivalent Bank (provided such deposit is with such bank or any other Cash Equivalent Bank).
"Cash Interest Threshold" has thc meaning assigned to such term in subsection 2.2C(ii)
"Cash Pav Rate Margin" means 2.00% per annum.
"Chalkline" has the meaning assigned to that term in the preamble to this Agreement.
"Chanl!e in Law" means the occurrence, after the date of this Agrecment, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation or application thereof
by any Governmental Authority or (c) the making or issuance of any request, guideline or
dircctive (whether or not having the force of law) by any Governmental Authority.
"Change of Control" means, at any time, I 1 shall cease to beneficially own

(within thc mcaning of Rules 13d-3 and I3d-5 under the Exchange Act) and Control (without
giving effect to clause (a) of the definition of "Control") more than 50.0% of thc economic interests in the Capital Stock of (Ncwcol (determined on a fully diluted basis) and more than
50.0% of the Capital Stock of (Newco) (determined on a fully diluted basis) ordinarily entitled to vote or consent with respect to actions of the members of INcwcol.
"Chapter 11 Cuses" shalJ have the meaning set forth in the recitals hereto.
"Clark Countv" means Clark County, a political subdivision of the State of
Nevada.
"Cleanup" means all actions rcquircd or prudcnt to: (a) cleanup, remove, treat or
remerJiate Hazardous Materials in the indoor or outdoor environment; (b) prevent the Release of
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Hazardous Materials so that they do not migratc, cndangcr or threaten to endanger public health
or welfare or the indoor or outdoor environment; or (c) perform pre-remedial studies and
investigations and post~remedial monitoring and care.

"Collateral" means all of the properties and assets in which Liens are granted or
purported to be grantcd by the Collaieral Documents.
"Collateral Aeent" has thc meaning assigned to that term In the preamble to this
Agreement.
"Collatcral Documents" means (a) this Agreement, (b) the Pledge and Security Agreement, (c) the Copyright Security Agreement, (d) the Mortgages, (e) each Assignment of Declarant's Rights, and (0 any other documents, instruments or agreements delivered by any Loan Party pursuant to this Agreement or any of the other Loan Documents in order to grant,
protect or perfect liens on any assets of such Loan Party as security for all or any of the
Obligations.
"Commitments" means the commitmcnts of the Lenders to make Loans as set forth in
subsection 2.1 A of
this Agreement in the amount set forth in the Register.
"Common Units" means the limited liability company interests of (Newco), including any limited liabilty company interests with limited voting rights.
"Compliance Certificate" means a certificate substantially in the ronn of Exhibit iv

anncxed hereto delivered to the Administrative Agent by the Borrowers pursuant to subsection
5.3(iii).
"Communications" has the mcaning assigned to that tcrm in subsection 9.7B(ii).
"Condemnation Proceeds" has the meaning assigned to that tcrff in subsection

2.4B(ii)(c).
"Confirmation Order" means the Findings of Fact, Conclusions of Law, and Order
Confirming the Borrowers' Plan of Reorganization issued by the Bankruptcy Court and entered
on r i in the Chapter II Cases.
the "Consolidated ElTDA" means, for any period, without duplication, (a) the sum of amounts for such period (as detennined for the Borrowers and their Subsidiaries on a combined consolidated basis) of (i) Consolidated Net Income, (ii) Consolidated Interest Expense, to the extent deducted in the calculation of Consolidated Net Income for such period, (ii) provisions for taxes based on income, to the extent deducted in the calculation of Consolidated Net Income
for such period, (iv) total depreciation expense to the extent deducted in the calculation of
Consolidated Net Income for such period, (v) total amortization expense to the extent deducted
in thc calculation of Consolidated Net Income for such period, (vi) other non-cash items
reducing Consolidated Net Income to the extent reflected as a charge or otherwise deducted from
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Consolidated Net Income for such period (other than any non-cash charges to the extent such charges rcprcsent an accrual of or reserve for cash expenditures in any future period) and (vii) extraordinary or non-recurring items reducing Consolidated Net Income, less (b) the sum of (i) non-cash items increasing Consolidated Net Income and (ii) extraordinary or non-rccurrng items, in each case, increasing Consolidated Net Income, all of the foregoing
the determination of
(except as otherwise provided in the definition of any term used herein) as detennined on a consolidated basis in confonnity with GAAP. For the purposes of this definition, provisions for
taxes based on income shall also include such state or local taxes that, in lieu of taxable income, are assessed on an alternate taxing methodology, such as net worth or tangible assets.
"Consolidated Interest Expense" means, for any period (as determined for the
Borrowers and their
Subsidiaries on a consolidated basis), (1) interest expense for such perod
determined in accordance with GAAP paid in such period or payable in cash, including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of cn:dit and bankers' acceptance financing and net costs under Hedge Agreements, plus capitalized interest to the extent included in cost of sales (excluding. however, any amounts referred to in subsection 2.3 payable to Agents or the Lenders on or before the Effective Date) less (2) Cash
interest income earned on Cash and Cash Equivalents in such period; provided that for the purposes of this definition only, notwithstanding anything to the contrary herein, for the initial four Fiscal Quartcrs cnding following the Effective Date, Consolidated Interest Expense shall
egualthc product of Calculation Date and (y) a fraction, the numerator of which is 365 and the denominator of
(x) Consolidated Interest Expense from the Effective Date to the applicable which is the number of days from the Effective Date to the applicable Calculation Date.
"Consolidated Net Income" means, for any pcrod, the net income (or loss) of the
Borrowcrs and thcir Subsidiaries, on a combined consolidated basis for such period taken as a single accounting period determined in conformity with GAAP; provided that there shall be
excluded therefrom (a) the income (or loss) of any Person (other than a Subsidiary of a
Borrower) in which a Borrower or any of its Subsidiaries has an equity interest, except to the
extent of the amount of dividends or other distributions actually paid to the Borrowers or any
Subsidiary of the Borrowers by such Person during such period, (b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of the Borrowers, is merged into or consolidated with one of the Borrowers or any Subsidiary of the Borrowers, or that Person's
assets are acquired by the Borrowers or any Subsidiai)' of the Borrowers, (c) the income of
any
Subsidiary of thc Borrowers to the extent that the declanition or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (d) any after-tax gains or losses
attributable to discontinued operations, and (e) to the extent not included above, any net extraordinary gains or net non-cash extraordinary losses.
"Contin2cnt Obli2ation" means, as applied to any Person, any direct or indirect liability, contingent or otherv..ise, of that Person (a) with respect to any Indebtedness, lease, dividend or other obligation of another if the primary purpose or intent thereof by the Person incurring the
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Contingent Obligation is to provide assurance to the obligee of such obligation of another that such obligation of another will be paid or discharged, or that any agreements relating thereto will be complied with, or thai the holders of such obligation wil be protected (in whole or in part) against loss in respect thereof, (b) with respect to any leller of credit issued for the account of that Person or as to which ihat Person is otherwise liable for reimbursement of drawings or (c) under Hedge Agreements. Contingent Obligations shall include, without limitation, (i) the direct or indirect guaranty, endorscment (other than for collection or deposit in the Ordinary Course of Business), co-making, discounting with rccourse or sale with recourse by such Person of the obligation of another, (ii) the obligation Lo make take-or-pay or similar paymcnts if rcquired regardless ofnon-pertormance by any other party or parties to an agreement and (iii) any liability of such Person for the obligation of another through any agreement (contingent or otherwise) (A)
to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise) or (B) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (A) or (B) of this sentence, the primary purpose or intcnt thereof is as described in the preceding sentence. The amount of any Contingcnt Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if less, the amount to which such Contingent Obligation is specifically limited.
"Control" means the possession, directly or indirectly, of the power to either (a) votc
10% or more of the securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the direction of the
imilUigement or policies of a Person, whether through the ability to exercise voting power, by
contract or otherwise. "CoDtrolloe" and "Controlled" have meanings correlative thereto.
"Copvril:ht Security Al!reement" means the Copyright Security Agreement, dated as of the date hereof, by the applicable Loan Parties in favor of the Collateral Agent, in the form of Exhibit XII annexed hereto, as such Copyright Security Agrcement may be Modified from time
to
time.
"Dcbt Service" means, for any period, all cash payments of interest on Indebtedness of
the Borrowers and their Subsidiaries made or required to be made during such period, all
scheduled payments of principal of Indebtedness of the Borrowers and their Subsidiaries made during such period (including, without limitation, with respect to assessments payable by the
Borrowers and their Subsidiaries in connection with Special Improvement Bonds), and all voluntary prepayments of the Loans madc during such period (other than such scheduled
payments of principal and voluntary prepayments of the Loans made directly or indirectly with the proceeds of any issuance of debt Sccurities or other Indebtedness of any of the Borrowers or
any Subsidiary or any Insurance Proceeds).
"Default" means a condition or event that, after notice or after :iny applicable grace
period has lapsed, or both, would constitute an Event of
Delault.
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"Deposit Account" means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account
evidenced by
a negotiable certificate of deposit.
"Development At!reements" means the (i) the Rhodes Ranch Development Agreement and (ii) each other effective development agreement (or similar agreement) with a Governmental
Authority relating to any of
the Real Property CollateraL.
"Dollars" and the sign "~" mean thc lawful money ofthe United States of America.
"Effective Date" means such date on which the conditions to effectivcness set forth in
subsection 3.1 are satisfied.
"Elit!ible Assignee" means (a) a Lender, (b) an Alfliate of a Lender, (c) an Approved Fund, (d) a commercial bank organized under the laws ofthc Unitcd States, or any State thereof,
and having a combined capital and surplus of at least $250,000,000; (c) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof,
and having a combined capital and surplus of at lcast $250,000,000; (f) a commercial bank
organized under the laws of any other country that is a member of the OECD or has concluded special lending arrangements with the International Monetary Fund associated with its General Arrangemcnts to Borrow or a political subdivision of any such country, and having a combined capital and surplus of at least $250,000,000, so long as such bank is acting through a branch or agency located in the United States; (g) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or othcr entity) that is engaged in making, purchasing or otherwisc holding commercial loans in the ordinary course and having a combined capital and surplus of at least $250,000,000 or an Approved Fund thereof and (h) any other Person (other than a natural person) that is an "accredited investor" (as defined in Regulation D under the Securities Act) that extcnds credit or buys loans in the ordinary course
and is approved by the Administrative Agent and (so long as no Default or Evcnt of
Default has
occurred and is continuing) the Borrower (such approvals not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, "EIil!ible Asil!nee" shall not include any Borrower Entity or any Affliate of any Borrower Entity.
"Elkhorn Investments" has the meaning assigned to that term in the preamble to this
Agreement.
"Elkhorn Partners" has the meaning assigned to that term II the preamble to this
Agreement.
"Entitlement Documents" has the meaning assigned to that term in subsection 4.36A.
"Entitlements" means those certain Governmental Authorizations which are required
under Applicable Law to be obtained and maintained (as applicable) or appropriate in order to
allow the expeditious and effcient completion of the dcvelopment of the Real Property
Collateral and the sale of the Real Property Collateral (and portions thereof), as legal
lots, all as
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contemplated by the most recent Acceptable Appraisal, and/or any applicable Development
J\grccment, and including, without limitation, all Governmental Authorizations necessary to

permit applicable platting, subdividing, earthwork, grading, infrastructure, improvements,
equipment, drainage, storm water and sewer systems, roadways and other work, labor or
materials required to be furnished or actions to be taken by or in connection with amending,
modifying, maintaining and perpetuating all of the foregoing, and the documents, agreements and instruments relating thereto.
"Environmental Claim" means any claim, action, investigation or written notice by
any
Person alleging potcntial liability (including, without limitation. potential liabilty for
investigatory costs, Cleanup costs, governmental response costs, natural resources damages, property damagcs, personal injuries, or penalties) arising out of, based on or resulting from (a)
the presence or Release of any Hazardous Materials at any location, whether or not owned,
leased or operated by the Borrowers any of their Subsidiaries or (b) circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law.
"Environmental Laws" means all federal, state, local and foreign laws, regulations and other governmental requirements relating to pollution or protection of human health or the environment, including, without limitation, laws relating to Releases or threatened Releases of Hazardous Materials or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, Release, disposal, transport or handling of Hazardous Materials, laws and regulations with regard to record keeping, notification, disclosure and reporting requirements respecting Hazardous Materials and laws relating to the management or use of natural resources, as now or may at any time hereafter bc in effect.
"Environmental Liabilities" means all liabilities, obligations, responsibilities,

obligations to conduct Cleanup, and Environmental Claims against any Loan Party or their Subsidiaries or against any Person whose liabilty for any Environmental Claim any Loan Party or their Subsidiaries may have retained or assumed either contractually or by operation of law, arising from (a) environmental conditions, (b) the presence, Release or threatened Release of
Hazardous Materials at any location, whether or not owned, leased or operated by the Borrowers or their Subsidiarics, or (c) circumstances forming the basis of any violation, or alleged violation,
of any Environmental Law.
"Equity Proceeds" means the sum of (i) cash proceeds from: (a) the issuance of any
any capital contribution to, any of the Borrowers aner the Effective Date (other than any such issuances that are made to, or capital contributions that are made by, any of the other Borrowers); less (ii) bona fidc, direct
Capital Stock or other equity Securities of, or (b) the making of
costs actually incurrcd by Borrowers in conncction with the receipt or Equity Proceeds,
including, without limitation, underwriting discounts or commissions and fees and expenscs of counsel and other advisors in connection therewith.
"ERISA" means the Employee Retircment Income Security Act of 1974, as amended
from time to timc, and any successor statute.
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"ERISA Affliate" means (a) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which the
member of a group of 414(c) of
Borrowers arc a mcmber; (b) any trade or business (whethcr or not incorporated) which is a trades or businesses under common control within the meaning of Section
tile Internal Revenue Codc of
which the Borrowers are a member; and (c) solely for purposes of obligations under Section 412 of the Internal Revenue Code or under the applicable sections set forth in Section 414(t)(2) of the Internal Revenuc Code, any member oran affliated service group within ihe meaning of Section 414(m) or (0) of the IntemalRevenue Code of which the Borrowers, any corporation described in clause (a) above or any trade or business
described in clause (b) above is a mcmber.
"ERISA Event" means (a) a "reportble event" within the meaning of Section 4043(c) of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30~day notice to the PBGC has been waived by regulation); (b) the failure to meet thc minimum funding standard of Section 412 ofthc Internal Revenuc Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(d) of the Internal Revenue Code) or the failure to make by its due date a rcquircd installmcnt under Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any rcquired contribution to a Mufiemployer Plan; (c) the provision by thc administrator of any Pension Plan pursuant to Section 404 I (a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of
ERISA; Cd) the withdrawal by
the Borrowers or any ERISA Affliate from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting, in either case, in liabilty pursuant to SectiOn 4063 or 4064 of ERISA, respectively; (e) the institution by the PBGC of
procecdings to tcrminate any Pension Plan pursuant to Section 4042 of ERISA; (f) the imposition
of liability on the Borrowers or any ERISA Affiiate pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (g) the withdrawal by the Borrowers or any ERISA Affliate in a complete or partial withdrawal (within the meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer Plan resulting in withdrawal
liability pursuant to Section 4201 of ERISA, or the receipt by the Borrowers or any ERISA Affliate ofwrilten notice from any Multiemploycr Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4042 of ERISA or under Section 4041 A of ERISA if such termination would result
in liability to the Borrowers or any ERISA Affliate; (h) the disqualification by the Internal Revenue Service of any Pcnsion Plan or Borrower Pension Plan under Section 401 (a) of thc Intcrnal Rcvcnuc Code, or the determination by the Intcrnal Revenue Service that any trust
forming part of any Pension Plan or Borrower Plan fails to qualify for exemption from taxation
under Section 501 (a) ofthc Internal Revcnue Code; or (i) the imposition of a Lien pursuant to
Section 401(a)(29) or 412(n) ofihe Internal Revenue Code or pursuant to ERISA with respect to any Pcnsion Plan.
"Event of Default" has the meaning assigned to that term in Section 7.
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"Exchange Act" mcans the Securities Exchange Act of 1934, as amended from time to
time, and any successor statute.
;'Excluded Taxes" means, wilh rcspect to the Administrative Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hercundcr, (a) taxes imposed on or measured by its overall net income (however denominated),
and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thcrcof) under the laws of which such rccipient is organized or in which its principal offce is located or, in the case of any Lender, in which its applicable Lender Offce is locatcd, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which any of the Borrowers are located and (c) in the case
of a Foreign Lender (other than an assigncc pursuant to a request by the Borrowers under subsection 2.8B), any withholding tax that is imposed on amounts payable to such Foreign Lcnder at the time such Foreign Lender becomes a party hcreto (or designates a ncw Lender
Offce) or is attributablc to such Foreign Lender's failure (other (han as a rcsult of a Change in Law) to comply with subsection 2.7E(v), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lender Offce (or assignment), to receive additional amounts from the Borrowers with respect to such withholding tax pursuant to subsection 2.7E(i).
"Existinl! Entitlements" has the meaning assigned to that term in subsection 4.36A.
"Existing Indebtedness" means the Indebtedness described on Schedule LI(a) attched
hcreto.
"Federal J?unds Effective Rate" means, for any period, a fluctuating interest rate equal
for each day during such period to the weighted average of
the rates on overnight Federal funds
transactions with membcrs of the Federal Reserve Systcm arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not sO published for any day
which is a Business Day, the average of
the quotations for such day on such trnsactions received
by the Administrativc Agcnt from three Federal funds brokers of recognized standing selected by the Administrative Agent.
"Final Order" shall mean an order or judgmcnt of a court of competent jurisdiction that has been entered on the dockct maintained by the clerk of such court and has not been reversed, vacated or stayed and as to which (a) the time to appeal, petition for certiorari or move for a stay, new trial, reargument or rehearing has expired and as to which no appeal, petition for certiorari or other proceedings for a stay, new trial, reargument or rehearing shall then be pending or (b) if an appeal, wrii of certiorari, stay, new trial, reargument or rehearing thereof has been sought, (i) stich order or judgment shall have been affrmed by the highest court to which such order was appcaled, cerlIonlri shall have bcen denied or a stay, new trial, reargument or rehearing shall have been denied or resulted in no modification of such order and (ii) the time to take any further appeal, petition for certiorari or move for a stay, new trial, reargument or rehearing shall have expircd.
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PRELIMINARY DRAFT SUBJECT TO MODlFICA nON FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
"First Lien Debt LTV Ratio" has the meaning assigncd to that term in subsection 6.6B.
"First Lien Declined Amounts" means mandatory prepaymcnts of
the Loans pursuant to
subsection 2.4B(ii) that are declined by Lenders.

"First ))riority" means, wiih respect to any Lien purported to be crcated in any Collatcral
pursuant to any Collateral Document, that such Lien is the most senior Lien (other than (a) l)crmittcd Titlc Exccptions, (b) Licns for taxes, asscssmcnts or governmental charges or claims the payment of which is not, at thc time, required by subsecton 5.5, (c) Liens permitted under
subsection 6.2A and (d) Specified Encumbrances to which any Lien created in any Collateral pursuant to any Collateral Document has been subordinatcd pursuant to subsection 2.9B) to which such Collateral is subject.
clause (iv) of
"Fiscal Quarter" meanS a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of the Borrowers and their Subsidiaries ending on
Dccember 3 I of each calendar year.
"Flood Hazard Property" means Real Property Collateral located in an area designated hy the Federal Emergency Management Agency as having special flood or mud slide hazards.
"FLSA" means the Fair Labor Standards Act of 1938, as amended from time to time, and
any successor statute.
"Foreil!n Lender" means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrowers are residents for tax purposes. For purposes of this
definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
"Fund" means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans or similar extensions of credit in the ordinary course.
"Fundine: and Payment Offce" means the offce of the Administrative Agent located at the Administrative Agent or any successor Administrative Agcnt I I (or such offce of specified by the Administrative Agcnt or such successor Administrativc Agent in a written notice to the Loan Parties and the Lenders).
"GAAP" means, subject to thc limitations on the application thereof set forth in
subsection i .2, generally accepted accounting principles, as in effect in the United States of
America and on the date of determination.
"Geronimo" has the meaning assigned to that tenn in the preamble to this Agreement.
"Glvnda" has the meaning assigned to that term in the preamble to this Agreement.
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"Gung-Ho" has the meaning assigncd to that term in the preamblc to this
Agrecment.
"Governmental Authoritv" mcans the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining.to government.
"Governmental Authorization" means any permit, approval, liccnse, zoning and other resolution, certificate of occupancy, authorization, plan, directive, consent order, consent decree or similar authorizalions of or from any Governmental Authority.
"Grantng Lender" has the meaning assigned to that term in subsection 9.1G
"Guarantors" means the Borrowers and the Subsidiary Guarantors.

"Guarantv" means the Guaranty, substantially in the form of
Exhibit XlI annexed hereto,
executed and delivcrcd by the Guarantors on the EtTectivc Date, or executed and delivered by
any additional Subsidiary Guarantor from time to time thcrcafter pursuant to subsection 5.11, as each such Guaranty may hereafter be Modified from timc to time.
"Hazardous Materials" means any chemical, material or substance, the generation, use, slonige, transportation or disposal of which, or the exposure to which, is prohibited, limited or rcgulated by any Governmental Authority or which mayor could pose a hazard to human health
and safety or to the indoor or outdoor environment.
"Hedge Agreement" means any agreement with respect to any swap, collar, cap, floor, hedge, forward, future or derivative transaction or option or similar agreement involving, or settled by refcrence to, one or more rates, currencies, commodities, equity or debt instrumcnts or
securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of scrvices provided by current or former directors, offcers, employees or consultants of any of the Borrowers or any of their Subsidiaries shall be a "Hedge Agreement".
"Heritage Land" has the meaning assigned to that term II the preamble to this
Agreement.
"Homcsites" means those portions of
the Real Propert Collateral that have been legally
subdivided into lots suitable for the construction of single family and multi-family residences
pursuant to recorded plats.
"Identifed Acquisiton" means an acquisition transaction identified by the Borrowers

approved by the Administrative Agent and the Requisite Lenders.
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"Improvements" means all buildings, structures, fixtures, tcnant improvements, and

other improvements of any kind and description now or hereafter located in or on or attached to any land that is a Real Property Asset, including all building materials, water, sanilary and storm sewers, drainage, electricity, steam, gas, telephone and other utility, facilities, parking areas, roads, driveways, walks and other site improvements; and all additions and beltermenls thereto and all renewals, substilutions and replacements thereof.
"Indebtedness" means, as applied to any Person, without duplication, (a) all

indebtedness for borrowed money, (b) that portion of obligations with respect to Capital Leases
that is properly cJassilicd as a liabilty on a balance sheet in conformity with GAAP, (c) notes
payable and drafts accepted representing extensions of credit, whether or not representing
obligations for borrowed money (other than current accounts payable incurred in the Ordinary Course of Business and aecrucd expenses incurred in thc Ordinary Course of Business), (d) any
obligation owed for all or any part of the deferred purchase price of property or services
(excluding deferred compcnsation, any such obligations incurred under ERISA and currcnt trade payablcs incurred in the Ordinary Coursc of Business, but including earn-outs with rcspect to any acquisition), (e) all obligations evidenced by notes, bonds (other than pcrfonnance bonds),
debcntures or other similar instruments, (f) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to any property or assets acquired
by such Person (even though the rights and remedies of the seller or the lender under such agreement in the event of default are limited to repossession or sale of such propert or assets), (g) all obligations, contingent or otherwise, as an account party under any letter of credit or under acceptance, Ielter of credit or similar facilities to the extcnt not reOccted as trade liabilities on the
balance sheet of such Person in accordance with GAAP, (h) all obligations, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any Capital Stock of any Borrower or any Subsidiary of any Borrower, (i) solely for purposes of subsection 6.1 and subsection 7.6, nct obligations under Hedge Agreements, including, as of any date of
determination, the net amounts, if any, that would be required to be paid by such Person jf such Hedge Agrecments were terminated on such date, G) all Contingent Obligations in respect of obligations of the kind rcferred to in clauses (a) through (i) above or in respect of the payment of
dividends on the Capital Stock of any other Person, (k) all obligations under Special
Improvement Bonds and (I) all indebtedness securcd by any Lien on any property or asset
owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the crcdit of that Person (including, without limitation, Special Improvement Bonds relating to Real Property Assets of the Borrowers and their Subsidiaries); provided that if such Person has not assumcd such secured indebtedncss that is nonrecourse to its credit, then the amount of indcbtedness of such Person pursuant to this clause (1) shall bc equal to the Icsser of the amount ofthc securcd indebtedness or the fair market value of the assets of such Person which secure such indcbtedness.
"Indemnifed Taxes" means Taxes other than Excluded Tax.es.
"Indemnitee" has the meaning assigned to that term in subsection 9.23.
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PRELIMINARY DRAFT
SUBJECT TO MOOIFICA TION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
"Insolvency Proceeding" means (a) any case, iiction or procecding before any court or other Governmental Authority relating to bankiuptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors or (b) any gcncral assignment for the benefit of creditors, composition, marshalHng of assets for creditors or other, similar arrangement in respect of its crcditors gcncrally or any substantial portion of its creditors, in the case of each
of the foregoing clauses (a) and (b), undertaken under U.S. Federal, State or foreign law,
including the Bankruptcy Code.

"Insurance Proceeds" has the meaning assigncd to that term in subsection 2.4B(ii)(c).
"Intellectual Property" has the meaning assigned to that term in the Pledge and Security
Agreement.
"Interest Coveraee Ratio" has the meaning assigned to that term in subsection 6.6C.
"Interest Payment Date" means the last day Business Day in each of March, June,
September and December of each year, commencing on March 31,2010.
"Interest Period" means select an interest period applicable to each UBOR Loan, which
lnterest Period shall be a lone (l)/two (2)/three (3)1six (6)) month period.
"Iiiterest Rate Determination Date" means each date for calculating the LIBOR Rate,
for purposes of determining the interest rate in respect of an Interest Period. The Interest Rate Determination Datc tor purposes of calculating the L1BOR Rate shall be the second Business
Day prior to the first day of
the related Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter and any succcssor statute.
"Investment" means, with respect to any Person, (a) any direct or indirect purchase or other acquisition by such Person of, or of a beneficial interest in, Capital Stock or other Securities of, all or substantially all of the assets of, or any other investment in, any other Person
or (b) any direct or indirect loan, advance (other than advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the Ordinary
Course of Business), extension of credit (by way of guaranty or othcrwise) or capital

contribution by such Person to any other Person, including all indebtedncss and accounts
receivable acquired from that other Person that are not current assets or did not arise from salcs
to that other Person in the Ordinary Course of Business. The amount of any Investment shall be
the original cost of such Investment plus thc cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"IP Collateral" has the meaning assigned to the term "lntellectual Property" 10 the
Pledge and Security Agrccmcnt.
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"Jacklmife" has the meaning assigned to that term in the preamble to this Agreement.
"Jarupa" has the meaning assigned to that term in the preamble 10 this Agreement.
"Joint Venture" means any Subsidiary that is not a wholly-owned Subsidiary.
"I.and and Operation Expenses" means, for any period, the costs and cash expenditures reasonably allocable to, without duplication, (i) the operations of the Projects and amenities related to the Projects (including sales of club memberships, operations related to the golf courses and other rccrcational opcrations relating to the operation of the Projects) and/or (ii) the
ownership, development, construction and sale of the Real Property Collateral, including,
without limitation, general and administrative cxpcnses, marketing and selling expenses
(including subsidies, incentives and rebates relating thereto), net land development costs
(consisting of (x) land development costs (excluding any land development costs funded with amounts received from Clark County, Mohave County or any other Governmental Authority, any
Permitted Special Improvcmcnt District or any other Person in respect of any Special
Improvement Bonds) minus (y) all reimbursements (including, without limitation,

reimbursements or other payments received in respect of Special Improvement Bonds) from Clark County, Mohave County or any other Governmental Authority, any Permittcd Special Improvcmcnt District or any other Person, for land development costs).
"Lender" and "Lenders" mcans thc Pcrsons identified as "Lenders" and listed on the
signature pages of
this Agreement, together with their successors and permitted assigns pursuant
to subsection 9.1.
"Lender Offce" means, as to any Lender, the offce or offces of sueh Lender specified in the Adminstrativc Questionnaire completed by such Lender and delivered to the
Administrative Agent, and the offce or offces of such Lender that the Administrative Agent
notifies the Borrowers promptly but no later than two days after the Effective Date, or such other
offce or offces as such Lender may from time to time designate to the Borrowers and the
"LIBOR Loans" means Loans bearing interest at rates determincd by reference to thc
LIBOR Rate as provided in subsection 2.2A.
"LIBOR Rate" shall mean, with respect to any Interest Period for the UBOR Loans, a rate per annum equal to the quotient (rounded upward if necessary to the nearest 1/16 of I %) of (a) the rate per annum appearing on the Telerate Page 3750 (or such other display screen as may
replace Page 3750 on Tclerate Access Service or any succeSsor publication) on the second
(or as soon thereafter as practicable) (for delivery on the first day of
Business Day prior to the first day of such Interest Period at or about I i :00 a.m. (London time)
such Interest Period) for a term comparable to such Interest Period and in an amount approximately equal to the amount of
the Loan to be made or funded by the Administrative Agent as part of such borrowing, divided for any Jl (b) one minus the Rescrve Requirement for such Loans in effect from time to time. If
reaSOn rates are not available as provided in clause (a) of
the preceding sentence, the rate to be
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iised in clause (a) shall be (in each case, rounded upward ifneccssary to thc ncarest 1/16 of 1%), (i) the rate per anniim at which Dollar deposits arc orcd to the Administrative Agent in the London interbank eurodollar currency market or (ii) the rate at which Dollar deposits are offcrcd to the Administrative Agent in, or by the Administrative Agent to major banks in, any offshore interbank eurodollar market selected by the Administrative Agent, in each case on the second Business Day prior to the commencement of such Interest Period at or about 10:00 a.m. (for delivery on the first day of such Interest Period) for a term comparable to such Interest Period and in an amount approximately equal to the amount of the Loan to be made or funded by the
Administrative Agent as pait of such borrowing. The L1BOR Rate shall be adjusted
automatically as to all LIBOR Loans thcn outstanding as of the effective date of any change in the Reserve Requirement, and in no event shall the LIBOR Rate exceed 2% per annum.
"Lien" means any lien, mortgage, pledge, assignment, hypothecation, security interest, fixed or floating charge or encumbrance of any kind (including any conditional salc or other title
retention agreement, any lease in the nature thereof, and any agrcement to givc any security
elTeet orany of
interest) and any option, trust or deposit or other preferential arrangemcnt having the practical the roregoing.
"LLC A1!rcemcnt" means the LimiLcd Liability Company Operating Agreement of

(NewcoJ, dated as of ( J, as such Limited Liabilty Company Operating Agreement of
(NewcoJ may be Modified from time to time.
"Loan Documents" means this Agreement, the Notes, the Guaranties, the Collateral Documents and other documents evidencing or securing Obligations, and all other documents,
instruments and agreements delivered by any Loan Party to any Agent or any Lender in
conncction with this Agreement or any other Loan Document.
"Loan Exposure" means, with respect to any Lender, as of outstanding principal amount of the Loan of
any date ofdctcrmination the
that Lender.
"Loan Parties" means the Borrowers and the Subsidiary Guarantors.
"Loans" means the loans outstanding or made by the Lenders pursuant to subsection
2.IA. "Maior Collateral Asset Sale" means any transaction (or series of related transactions with the same or related parties) constituting an arms~lengih sale for fair market value of any
portion of the Real Properly Collateral in the Ordinary Course of Busincss pursuant to a
QUiilificd Sales Agreement Lhat contemplatcs (i) a gross sales price in excess of $20,000,000 or
(ii) the sale of
Real Property Collateral with an Appraised Value in excess of$20,OOO,OOO.
"Major Entitlements" means all (i) zoning approvals, (ii) mapping approvals, (iii)
development agreements and (iv) solely with respect to commercial developments, use permits,
necessuy or appropriate in order to allow the expeditious and eftcient completion of the
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development of real property and the sale and usage of such real property in accordance with all
Applicablc Law.
"Mandatory Pi'cpavmcnl Date" has the meaning assigned to that temi in subsection
2.4C(i).
"Mare:in Stock" has thc meaning assigned to that term in Regulation U of Governors of
the Board of
the Federal Reserve System as in effcct from time to time.
"Material Adverse Effect" mcans (a) a material adverse effect upon the business, operations, properties, assets, financial condition or prospects of the Borrowcrs and their
the Loan Parties to perfonn the Obligations, (c) a material adverse effect upon the legality, validity, binding effcct or cnforccabilty against the Loan Parties of the Loan Documents, (d) a material adverse effect upon the rights, remedies and benefits, available to, or conferred upon, the Agents or any Lender under
Subsidiarics, taken as a whole, (b) the material impairment of the ability of
the Loan Documents, or (c) a material adverse effect upon the value of the Real Propert
Collateral taken as a whole; provided that, neither the Chapter Ii Cases nor the events leading
thereto shall constitute a Material Advcrse Effect.
"Material Contracts" means each of the Development Agreements in effect on the

Effective Date.
"Material Environmental Liability" means an Environmental Liabilty whieh could

reasonably be expected to rcsult in (i) a discontinuation of a substantial portion of
the busincss,
operations or development of the Borrowers and their Subsidiaries, takcn as a whole, (ii) potential costs, liabilities or other losses in excess of $7,500,000, (iii) any designation of any
the Real Property Assets on the federal National Priorities List, or any similar state list the Real Property Assets on any other list maintained by any Governmcntal Authority of sites at which a Release of Hazardous Materials has occurrd if such Rclcase could reasonably be expected to result in potential costs, liabilities or other losses in excess of (x) for purposes of the provisions of subsection 5.9A, $7,500,000 or (y) for purposes of all other provisions hereof, $1,000,000.
portion of or (iv) any designation of any portion of
"Material Licenses" has the meaning assigned to that tenn in subsection 4.6.
"Maturity Date" means f
1, 2016.
"Maximum Amount" has the meaning assigned to that term in subsection 9.13A.
"Modifications" mcans any amcndinents, restatements, amendment and restatement~, supplemcnts, modificaiions, renewals, replacements, consolidations, severances, substitutions and cxtensions of any document or instrument from time to time; "Modify", "Modifed", or related words shall have meanings correlative thereto.
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"Mohave County" means Mohave County, a political subdivision of the State of

Arizona.
"Moodv's" mcans Moody's rnvestors Service, Inc.
"Morfeaee" means a deed of trust, assignment of leases and rents, securty agreement and fixturc filing cxccutcd and dclivered by any Loan Part on or after the Effective Date in such
form as may be approved by the Collateral Agent, with such changes thereto as may be
recommended by the Collateral Agent's local counsel bascd on local laws or customary local mortgage or dccd of trust practices, as such security instrument may be Modified from time to time. "Morli!3ees" means all such instruments collectively.
"Morteaeee Policies" has the meaning assigned to that tcrm in subsection 3.ia
"Multiemplover Plan" means a "multiemployer plan", as defined in Section 4001(a)(3)
of ERISA, to which the Borrowers or any ERISA Affliate is contributing or to which the
Borrowers or any ERISA Affliate had an obligation to contribute within the last six years.
"Non-Consentine Lender" has the meaning assigned to that term in subsection 9.5B.
"Notes" means (a) the promissory notes of the Borrowers issued pursuant to subsection
2.IO and (b) any promissory notes issued by the Borrowers in connection with assignments of
the Loans of any Lender, in each case substantially in the form of
Exhibit VII annexed hereto, as
they may be Modified from time to time.
"Oblieations" means all obligations of every nature of each Loan Party from time to time owed 10 the Agents, the Lenders or any of them or their respective Aftliates undcr the Loan Documents" or, if approved by the Administrative Agent, whether for principal, interest (including, without limitation, interest accruing after the maturity of the Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Borrower or any Subsidiary Guarantor" whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) or payments for tees, expenses, indemnitication or otherwisc.
"OEeD" means the Organisation for Economic Co-Operation and Development.
"Offcer's Certificate" means, with respect to any Person, a certificate executcd on

behalf of such Person (a) if such Person is a partncrship or limited liabi1ty company, by its chairman of the board (if an offcer) or chief executive offcer or by the chief executive offcer or thc chief financial offccr of its general partner or managing member or other Person authorized to do so by its Organizational Documents, (b) if such Person is a corporation, on behalf of such
corporation by its chairman of the board (if an offcer) or chief executive offccr or its chief financial offcer or vice president, and/or (c) if such person is one of the Borrowers or a
Subsidiary of the Borrowers, a Responsible Offcer.
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"Opera tine Lease" means, as applied to any Person, any lease (including, without limitation, leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) that is not a Capital Lease other than any such lease under which that Person is
the lessor.
"Ordinary Course of Business" means, with respect to a specific Person, the ordinary course of such Person's business, substantialJy as conducted by any such Person prior to and as or the Effective Date (to the extent such PersOn was a Loan part as of the Effective Date) or as otherwise contemplated in connection with the development of thc Projecls, and which shall not in any cvent interfere in any material respect with the ongoing operation of the assets of such Person.
"Orl!anizational Authorizations" means, with respcct to any Person, resolutions of its Board of Directors,. general partners or mcmbers of such Person, and such other Persons, groups
or committecs (including, without limitation, managers and managing committees), if any,

rcquircd by the Organizational Certificate or othcr Organizational Documents of such Person to authorizc or approve the taking of any action or the entering into of any transaction.
"Oreanizational Certificate" means, with respect to any Person, the certificate or articles of incorporation, partncrship or limited liablty company or any other similar or equivalent organizational, chartcr or constitutional certificate or document fied with the applicablc Govcrnmcntal Authority in the jurisdiction of its incorporation, organization or
formation, which, if such Person is a partnership or limited liabilty company, shall include such
certificates, articles 'Or other certificates or documcnts in respect of each partner or member of
such Person.
"Ore.anizational Documents" means, with respect to any Person, its Organizational
Certificatc and the by-laws, partnership agreement, limited liability company agreement, operating agreement, management agreement or othcr similar or equivalent organizational, charter or constitutional agreement or arrangement, which, if such Person is a partership or
limited liability company, shall include such by-laws, agreements or arrangements in respect of each partner or member of such Person.
"OSHA" means the Occupational Safety and Health Act of 1970, as amcnded from time to timc, and any successor statute.
"Other Taxes" mcans all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment made hereunder or
any other Loan Documcnt or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.

"OVCi-nOl\'" has the meaning assigned to that tenn in the preamble to this Agrcement.
"Parcel" has the meaning assigned to that tenn in the preamblc to this Agrccment.
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"Participant: has the meaning assigned to that term in subsection 9.1 D.
"Participant Register" has the meaning assigned to that tcrff in subsection 9.I.D(iv).
"Paying Agent" has the meaning assigned to that term in subsection 8.6.
"PRGe" means the Pcnsion Benefit Guaranty Corporation established pursuant to ERISA (or any successor thereto).
Section 4002 of
"PCBs" has the meaning assigncd to that term in subsection 4.33(vi).
"Pension Plan" means any employee pension benefit plan, as defined in Section 3(2) of ERISA, other than a Multiemployer Plan, which is subject to 'ltle IV of ERISA and is, or was within the past six years, maintained or contributed to by the Borrowers or any ERISA Affliate.
"Permitted Collateral Asset Sale" means any transaction (or series of related
transactions with the same or relatcd partics) constituting an arms-length sale for fair market
value or any portion of the Real Propert Collateral in the Ordinary Course of
Business pursuant
to a Qualified Sales Agrecmcnt that docs not constitute a Major Collateral Asset Sale.
"Permitted Encumbrances" means the following types of Liens:
Encumbrances) for taxes, assessments or governmental charges or claims the

payment of
(a) Liens (including, without limitation, Specified
which is not, at the time, required by subsection 5.5;

(b) statutory Liens of landlords, slatutory Liens of carriers,
warehousemen, mechanics and materialmen and other Liens imposed by law

(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the
Internal Revenue Code or by ERISA) incurred in the Ordinary Course of Business for sums not yet delinquent or being Properly Contested;
(c) Liens incurred or deposits made in the Ordinary Course of Business in connection with workers' compensation, uncmployment insurancc
and other types of social security, or to secure the perfonnance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, govcmment contracts, trade contracts, performance and rctum-of-money bonds and other similar
obligations (exclusive, in cach case, of obligations for the payment of borrowed
money or other Indebtedness);

(d) any attachment or judgment Lien with respect to a money
judgment, writ, warrant of attachment or similar process not constituting an Event
of Default, so long as such Lien could not reasonably be expected to have a

Material Adverse Effect;
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(e) leases, subleases, licenses and sublicenses granted to others
(in the Ordinary Course of Business) not interfering with the Ordinary Course of their Subsidiaries; the Borrowers or any of Business or the operations of
(0 casements, covenants, conditions, rights-of-way,

restrictions, minor defects, encroachments or irregularities in title and other
similar charges or encumbrances entered into or arising in the Ordinary Course of the Borrowers or any of their Subsidiaries; Business of
(g) any (i) interest or title of a lessor or sublessor under any

Capital Lease permitted by subsection 6.l(ii) or any operating lease nol
prohibited by this Agreement, (ii) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to or (ii) subordination of the intercst of the lessee or sublessee under such lease to any restriction or encumbrance referred to in the preceding clause (ii);
(h) deposits in the Ordinary Course of Business to sccure
liabilities to insurance carriers, lessors, utilities and other service providers;

(i) zoning, building codes and other Governmental
Authorizations regulating the use, development and/or occupancy of any Real
Property Asset or activities conducted thcreon which are imposed by any

Governmental Authority having jurisdiction ovcr such Real Property Asset which are not violated and would not be violated by the current and contemplated use,
development and/or occupancy of such Real Property Asset or the operation of the
business of the Borrowers or any of
their Subsidiaries thereon; and
with respect to customar setoff (j bankers liens and rights of depository arrangements entered into in the Ordinary Course of Business.
"Permitted Exislinl! Indebtedness" means the Indebtedness described on Schedule He)
attached hereto.
"Permitted Real Property Acquisitions" means one or more bona fide arms-length
acquisitions for fair market value by any Loan Party of
an interest in real property~
"Permitted Special Improvement Districts" means one or more special improvement

districts, special assessment districts or community facility districts established for the bcnefit of a Project after the Effeciive Date.
"Permitted Title Exceptions" means (a) the Permitted Encumbrances reflected in the Mortgagee Policies delivered pursuant to subsection 3.1G(ii) and (b) Permitted Encumbrances reasonably satisfactory to the Administrative Agent reflected in Mortgagee Policies delivered
pursuant to subsection 5.11).
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"Person" means any natural person, corporation, limited liability company, trust, joint
venture, joint stock company, unincorporated association, company, partnership, limited

partnership, Governmental Authority or other cntity of
whatever nature.
"Petition Date" shall have the meaning set forth in the recitals hereto.
"PIK Marein" means 5.00% per annum.
"Pinnacle" has the meaning assigned to that term in the preamble to this Agreement.
"Plan ofReoreanization" shall have the meaning set forth in the recitals hereto.
"Plcdee and Security A2reement" means he Pledge and Security Agreement dated as
of the datc hereof and entered into by and among the Borrowers, the Collateral Agent, and any
Subsidiary Guarantor that becomes party thereto, substantially in the form of Exhibit X annexed hercto, as such Pledge and Security Agreement may hereafter be Modified from time to time.
"Pledi:!ne Parent" has the meaning assigned to that term in subsection 5.11.
"Pre-Petition Credit Ae:recment" shall have the meanings set forth in the rccitals hereto.
"Proceedines" has the meaning assigned to that term in subsection S.3(xii).
"Proiects" means the collective reference to Rhodes Ranch, Tuscany, South West Ranch,
and Spanish Hils.
"Properlv Contested" means, in the case of any obligations of a Loan Party (including
any Taxes) that are not paid as and when due or payable by reason of such Loan Party's bona fide
dispute concerning its liability to pay same or concerning the amount thereof: (i) such
obligations are being properly contested in good faith by approprate proceedings promptly
instituted and diligently conducted; (ii) such Loan Part has established appropriate reserves as shall be rcquircd in conformity with GAAP; (iii) the non-payment of such obligations could not reasonably be expected to have a Material Advcrse Effect; (iv) no Lien is imposed upon any of such Loan Party's assets with respect to such obligations unless such Lien is at all times junior and subordinate in priority to tlie Liens in favor of the Collateral Agent (except only with respect to property taxes that have priority as a matter of applicable state law) and enforcement of such Lien is stayed during the period prior to the final resolution or disposition of such dispute; (v) if the obligations result from, or are determined by the entry, rendition or issuance against a Loan
Part or any of its assets of a judgment, writ, order or decrcc, enforcement of such judgment,
writ, order or decree is slayed pending a timely appeal or other judicial review; and (vi) if such contest is abandoned, settled or determined adversely (in whole or in part) to such Loan Party,
such Loan Party forthwith (and in any event prior to commencement of any enforcement proceedings against such Loan Part or any propert of such Loan Party) pays such obligations
and all pcnahies, interest and other amounts due in connection therewith.
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE
TO FIRST UEN STEERING COMMIITEE
"Pro Rata Share" means, with respect to all payments, computations and other matters relating to the Loans of any Lender, the percentage obtained by dividing (i) the Loan Exposure of
that Lender by (ii) the aggregate Loan Exposure of all the Lendcrs; in any such case as the
applicable pcrcentage may be adjusted by assignments permitted pursuant to subsection 9.1. The initial Pro Rata Share of each Lender is set forth in the Register.
"PTO" means the United States Patent and Trademark Offcc.
"Qualified Sales Ae,reement" means a definitive and binding purchasc and sale agreemcnt between any of the Loan Parties and a non-affliated third party purchaser with
respect to any Real Propert CollateraL.
"Real Propert Assef' means, at any time of determination, any interest (fee, leasehold
or otherwise) then owned by any Borrower Entity in any real property.
"Real Property Collateral" means the portion of the Collateral eomprising a Real
Property Asset in which one or more of
the Loan Parties hold fee simple title or a valid leasehold interest, as determined from time to time, which is, or is required pursuant to the terms of this
Agrecment or the other Loan Documents to be, encumbered by a Lien of
the Mortgagcs.
"Recoverv Event" has the meaning assigned to that term in subsection 2.4B(ii)(c).
"Refinancin2" means, in respect of any lndebtedness, to refinance, extend, renew,

restructure or replace or to issue other Indebtedness in exchange or replacement for, such
Indebtedness, in whole or in part. "Refinanced" and "Refinance" have meanings correlativc

thereto.
"Re2ister" has the meaning assigned to that term in subsection 9.1 C.

"RC2istered Loan" has the meaning assigned to that term in subsection 9.1 C.
"Related Parties" means, with respect to any Person, such Person's Affiliates and the
directors, ollcers, employees, agents, trustees, advisors, controllng Persons and members or
such Person and of such Person's Affliates.
"Release" means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Materials into the indoor or outdoor environment (including, without limitation, the abandonment or disposal of any barrels, containers or other closed receptacles containing any
Hazardous Materials), or into or out or any property, including the movement of any Hazrdous
Material through the air, soil, surface watc!; groundwater or property.
"Release Instruments" has the meaning assigned to that term in subsection 2.9A.
"Released Parcel" has the meaning assigned to that term in subsection 2.9A.
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"Required Dedication" means a dedication or conveyance of a portion of the Real

Property Collateral at the direction of a Governmental Authority or a public utilty, or pursuant to or in connection with a Development Agreement, or to a homeowners or condominium owners
association, to (i) such Governmental Authority (or any designce of such Governmental
Authority), or (ii) a utility providcr or (iii) a homeowners or condominium owners association,
for parks, schools, recreation centers, common community facilties, public streets, utility
easements and installations, slopes or other rights~ofwway or public use; orovided any such
dedication or conveyance (individually and/or taken together will all other such dedications and
conveyances) (i) has not had and could not reasonably be expected to have a Material Adverse
Effect or (ii) has not impaired and could not reasonably be expected to impair the Collateral
Agent's First Priority Lien on the remaining Real Property CollateraL.
the sum of
"Requisite Lenders" means Lenders having or holding more than 50% of
the
aggrcgatc Loan Exposure of all Lenders.

"Reserve Requirements" shall mean, with respect to any day in an Interest Period for a
UBOR Loan, the aggregate of
the reserve requirement rates (expressed as a the maximum of decimal) in effect on such day for Eurocurrency funding (currently referred to as "Eurocurrency the tile Federal Reserve Board) maintained by a member bank of liabilities" in Regulation D of Federal Reserve System. As used herein, the tenn "reserve requirement" shall include, without limitation, any basic, supplemental or emergency reserve requircments imposed on any Lender by any Governmental Authority.
"Responsible Offcer" means the chairman of the board (if an offcer), chicf cxecutive
otlcer, president/chief operating oflcer, any vice president, general counsel, chief financial
offcer, managing member, offcer, or board member of the Borrowers and their Subsidiaries, as applicable, but in any event, with respect to financial matters, the chief financial offcer, treasurer, managing member, or board member of the Borrowers and their Subsidiaries, as applicable.
"Restricted" means, when referring to Cash or Cash Equivalents of
the Borrowers or any
of the Subsidiary Guarantors, that such Cash or Cash Equivalents (a) appears (or would be required to appear) as "restricted" on a consolidated balance sheet of the Borrowers or of any such Subsidiary Guarantor (unless such appearance is related to the Loan Documents or Liens created thereunder), (b) are subject to any Lien in favor of any Person other than the Collateral Agent for the benefit of the Secured Parties or (c) are not otherwise generally available for use
by the Borrowers or such Subsidiary Guarantor.
"Restricted Pavment" means (a) any dividend or other distribution, direct or indirect, on
account of any shares of any class of Capital Stock of now or hereafter outstanding, except a dividend payable solely in shares of the Borrowcrs or any of
their Subsidiaries
that class of stock to
the holders of that class, (b) any redemption, retirement, sinking fund or similar payment,
purchase or othcr acquisition for value, direct or indirect, or any shares of any class of Capital Stock of the Borrowers or any of their Subsidiaries now or herealer outstanding, and (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other
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PRELIMINARY DRAFT SUBJECT TO MODIFICA nON
rights to acquire shares of any class of Capital Stock or the Borrowers or any of their
Subsidiaries now or hereafter outstanding.
"Restricted Seller C:nrv-Back Notes" means promissory notes issucd as consideration to any of the Borrowers or any of their Subsidiaries by the purchaser under a Qualified Sales Agreemcnt that (i) are secured by a first priority Lien in favor of any of the Borrowers or any of their Subsidiaries on the interest in real property sold to such purchaser pursuant to such
Qualified Sales Agreement and (ii) have a final maturity date that is prior to the Maturity Date.
"Rhodes Arizona Properties" has the meaning assigned to that term in the preamble to
this Agreement.
"Rhodes Design" has the meaning assigned to that term in the preamble to this
Agreement.
"Rhodes GP" has the meaning assigned to that term in the preamble to this Agreement.
"Rhodes Homes Arizona" has the meaning assigned to that term in the preamble to this Agrccmcnt.
"Rhodes Ranch" means those certain golf, commercial and residential developments
located in Clark County commonly known as Rhodes Ranch, as dcpicted on the maps aUached hereto as Exhibit Xl.
"Rhodes Ranch Development Aereement" menDS the Development Agreement, dated December I 8, I 996, by and among Clark County and Rhodes Ranch Limited Partnership, a Nevada limited partnership, Rhodes Ranch Land Holdings Limited Partnership, a Delaware
limited partership, Southwestern Opportunities Limited Partnership, a Nevada limited
partnership, and Durango/Springs Limited Partnership, a Nevada limited partnership, each as predecessors to Rhodes Design & Development.
"Rhodes Ranch Golf' has the meaning assigned to that term in the preamble to this
Agreement.
"Rhodes Rcalty" has the meaning assigned to that term In the preamble to this Agrcement.
"S&P" means Standard & Poor's, a division of
the McGraw-Hili Companics, Inc.
"Seciired Parties" means the collectivc rcference to the Agents and the Lenders.
"Securities" means any Capital Stock, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, bonds, debentures, notes, or other evidences of Indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as "securities" or any certificates of interest, shares or
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participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from tjme to time, and
any successor statute.
"Six Feathers" has the meaning assigned to that term in the preamble to this Agreement.
"Solvenf' means, with respect to any Person, that as of any date of dctermination, (a) the sum of the "fair value" of the assets of such Person wil, as of such date, exceed the sum of all
debts of such Person as of such datc, as sueh quoted terms arc dctermined in accordancc with
applicable federal and state laws governing determinations of the insolvency of debtors, (b) the "present fair saleable value" ofthc assets of such Person wil, as of such date, be greater than the amount that will be required to pay the probable liability on existing debts of such Person as such
debts become absolute and matured, as such quoted term is determincd in accordance with
the insolvency of debtors, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct any business in which it is or is about to become engaged and Cd) such Pcrson does not intend to incur, or believe or reasonably should believc that it wil incur, debts beyond its ability to pay as they mature. For purposes of this definition, (i) "debt" means liability on a "claim", and (ii) "claim" means any (x) right to payment, whether or not such a right is rcduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
applicable federal and state laws governing determinations of
legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right .to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed,
this definition, thc amount of any contingent, undisputed, secured or unsecured. For purposes of unliquidated and disputed claim and any claim that has not been reduced to judgment at any time shall be computed as the amount that, in light of all the facts and circumstances existing at such
time, represents thc amount that can rcasonably be expected to become an actual or maturcd
Accounting Standards Board Statemcnt of
liability (irrespective of whether such liabilities meet the criteria for accrual under the Financial Financial Accounting Standards No.5).
"South West Ranch" means those certin commercial and residential developments
located in Clark County commonly known as South West Ranch, as depicted on the maps
attached hercto as Exhibit Xl.
"Spanish Hils" means those ccrtain residential developments located in Clark County commonly known as Spanish Hils, as dcpicted on the maps attached hereto as Exhibit XI.
"Special Improvement Bonds" means special improvement district bonds, special assessment bonds, community facility district bonds, private activity bonds, tax increment
tnaneing, general obligation bonds, special assessmcnt revenue bonds and any similar bonds (i) issued by a Permitted Special Improvement District, (ii) the terms of which have been reviewed which and approved by the Administrative Agent and the Requisite Lenders, (iii) the proceeds of arc solely available to directly payor to reimburse the Borrowers or their Subsidiaries for Land
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and Operation Expenses, (iv) which are paid or satisfied (in whole or in parL) through Special
Taxes and (v) for which the aggregate amount of all Special Taxes paid in any Fiscal Year does
not excced the Special Tax Cap for such Fiscal Year.
"Special Tax Cap" means the special tax levy or assessment per year cqual to the special taxes or assessments for thc base ycar that together with ad valorem real estate taxes, and other
real propert liens and charges by a Govcrnmental Authority, docs not exceed 2% of thc market
value of the Homesites located in, or in the vicinity of, the applicable Permitted Special
Improvement District (which is the issuer of the applicable Special Improvement Bonds)
intended to be sold (projected as of the date of issuance of such Special Improvement Bonds), as determined by the Governmental Authority through which such Permitted Special Improvement District is established, which special tax levy or assessment may be increased by up to 2% per this Agreement, such Special Tax Cap includes any charges for year thereafter. For purposes of maintenance and serviccs imposed as a charge against real property, including such fees and
charges imposed through a landscape and lighting maintenancc district, special improvement
district, special assessment district, a community facilities district, a community services district or other similar mechanism.
"Special Taxes" means special taxes or assessments on Real Property Assets used to pay
or satisfY Special Improvement Bonds.
"Specified Encumbrances" has the meaning assigncd to that term in subsection 2.98.
"SPV" has the meaning assigned to that term in subsection 9.1G.
"Subsidiary" means, with respect to any Person, any corporation, partnership, limitcd liability company, association, joint venture or other business entity of which more than 50% of the total voting power of shares of stock or othcr owncrship inlerests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or othcr Persons performing similar functions) having the power to
direcL or cause the direction of the management and policies thereof is at the time owned or that controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of which s otherwise controlled, directly or Person or a combination thereof, or the management of
indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof. Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall rcfcr to a Subsidiary or Subsidiaries of any of the Borrowcrs (including Subsidiaries of a Harrower that are Borrowers).
"Subsidiary Guarantor" means any Subsidiary of the Borrowers that is a part to the
Guaranty at any time pursuant to subsection 5.11.
"Subsidiary Loan Documents" has the meaning assigned to th3t term in subsection
5.1IB.
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"Supplemental Collateral Ae:ent" and "Supplemental Collateral Ae:cnts" shall have

the meaning assigned to these terms in subsection 8.lB.
"Tax Distributions" means Restricted Payments madc pursuant to subsection 6.5(ii).
"Taxes" means all present or futurc taxes, levies, imposts, duties, deductions,
withholdings, assessmcnts, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
"Terminated Lender" has the meaning assigned to that term in subsection 9.5B.
"Test Period" mcans each period of four consecutive Fiscal Quarters then last ended on each Calculation Date, in each case taken as one accounting period.
"The Rhodes Companies" has the meaning assigned to that term in the preamble to this
Agreement.
"Tick" has the meaning assigned to that term in the preamble to this Agreement.
"Title Company" means, collectively, one or morc title insurance companies reasonably satisfactory to the Administrative Agent.
"Total Consolidatcd Indebtedness" means, as at any date of determination, the aggregate amount of all Indcbtedncss of the Borrowers and their Subsidiaries, determined on a
Consolidated basis in accordance with GAAP.
"Total Debt LTV Ratio" has the meaning assigned to that term in subsection 6.6A.
"Tribes" has the meaning assigned to that term in the preamble to this Agreement.
"Tuscany" means those certain golf, commercial and residential developments located in Clark County commonly known as Tuscany, as depicted On the maps attached hereto as Exhibit Xl.
"Tuscany Acquisitions" has the meaning assigned to that term in the preamble to this
Agreement.
"Thscanv Acquisitions II" has the meaning assigned to that term in the preamble to this Agreement.
"Tuscany Acquisitions III" has thc meaning assigned (0 that term in the preamble to this Agreemcnt.
"Tuscany Acquisitions IV" has the mcaning assigned to that term in the preamble to this: Agrecmcnt.
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PRELIMINARY DRAFT
"Tuscanv Goir' has the meaning assigned to that term in the preamble to this Agreement.
"Dce" means the Uniform Commercial Code (or any successor statute) as adopted and New York or, when the laws of any other jurisdiction govern the method or manner of the perfection or enforcement of any security interest in any of the Collateral, the jurisdiction. such Uniform Commercial Code (or any successor statute) of
in force in the State of
aUnrestrictcd" means, when referring to Cash or Cash Equivalents of the Borrowers or

any otthe Subsidiary Guarantors, that such Cash or Cash Equivalents are not Restricted.
"Wallboard" has the meaning assigned to that term in the preamble to this Agreement.
1.2 Defincd Terms; Accountine: Terms; Utilization of GAAP for Purposes of
Calculations Undcr Aereement.
A. The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, nny pronoun shall include the corrcsponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be decmed to be followed by the phrase "without limitation". The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) 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 3S from time to time Modified (subjcct to any restrictions on such Modifications set forth herein), (b) any rcfcrence herein (i) to any Person (other than a natural person) shall be construed to include such Person's permitted successors and assigns and (ii) to any Borrower or any other Loan Party shall be construed to include such Borrower or such other Loan Party as debtor 3nd debtor-in-possession and any receiver or trustee for such Borrower or such other Loan Party, as the casc may be, in any insolvency or liquidation proceeding, (c) the words "herein", "hcreofand "hereunder", and words of similar import, shall be construed to refer to this Agrcement in its entirety and not to any particular provision hcrcof, (d) all references herein to Sections, Exhibits and Schedules shall be construed to refer to Sections of, and Exhibits and Schedules to, this
Agrecment (unless expressly referring to another agreement) and (e) the words "asset' and
"property" shall be construed to have the same mcaning and efTect and to refer to any and all tangible and intangible asscls and properties, including, without limitation, Real Properly Assets,
f1xlures, Cash, securities, Capital Stock, accounts and contract rights, and Proceeds (as such tenn is defined in thc Plcdgc and Security Agreement) thcrefrom.
B. Except as otherwise expressly provided in this Agrcement, (a) all accounting

terms not otherwise defined herein shall have the meanings assigned to them in conformity with
GAAP; and (b) financial statements and othcr information required to be delivered by the
Borrowcrs to the Lenders pursuant to clauses (i), (ii) and (x) of subsection 5.3 shall be prepared absence in accordance with GAAP (except, with respect to interim financial statements, for the of normal year-end audit adjustments and cxpl3natory footnotes) as in effect at the time of such preparation (and delivered together with the reconciliation statemcnts provided for in subsection
5.3(iv)). Calculations in connection with the definitions, covenants and othcr provisions of this
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Agrecment shall utilize accounting principles and policies in conformity with those used to prepare the financial statemcnts refcrred to in subsection 4.14A; provided, that should such accounting principles and policies change, the Borrowers, the Administrative Agent, and the Lenders shall negotiate in good faith to amend the financial definitions and related covenants in
conformity therewith.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

2.1 Commitments; Loans.
A. Loans. Each Lender has prior to the Effective Date funded term loans under the Pre-Petition Crcdit Agreemcnt. In connection with the implementation of the Plan of
Reorganization and in partial satisfaction of the Lenders' claims under the Pre~Petition Credit
Agreement, on the Effective Datc, each Borrower hereby incurs loans (as to each Lender a "Loan" and collectively, the "Loans") in an initial aggregatc principal amount equal to
$50,000,000 as Obligations hereunder. Each Lender's Commitment shall terminate immediately and without further action after giving effect to the incurrnce of the Loans by the Borrowers. The procceds of the Loans shall be used for the purposes identified in subsection 2.5A. Loans, once repaid or prepaid, may not be reborrowed.
B. (Intentionally Omitted).
c. iIntentionally Omitted).
D. Notes. The Borrowers shall execute and deliver on the Effective Date to each
Lender requesting the same (or to the Administrative Agcnt for that Lender) a Note substantially
in the form of Exhibit vii annexed hereto to evidence that Lender's Loan. Any Lender not
receiving a Note may request at any time that the Borrowers issue it such Note on the terms set forth herein, and the Borrowers agree to issue such Note promptly upon the request of a Lender.
The Notes and the Obligations evidenced thereby shaH be governed by, subject to and benefit
from all of
the terms and conditions of this Agreement and the other Loan Documents and shall
be secured by the CollateraL.

2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of
subsections 2.2E, 2.6 and 2.7, each
Loan shall bear interest on the unpaid principal amount thereof from the date made to maturity
(whether by acceleration or otherwise) at a rate determined by reference to the UBOR Rate.

Subject to the provisions of
subsections 2.2E, 2.6 and 2.7, the Loans shall bear interest through
maturity as follows:
(i) if a LlBOR Loan, and the interest is paid in Cash on the applicable Interest Payment Date and not capitalized pursuant to subsection 2.2C(i), then at the sum of the LJOR Rate for the relevant Intcrest Period plus the Cash Pay Rate Margin.
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(ii) if a LlBOR Loan, and the interest is not paid in Cash on the applicable
Interest Payment Date and capitalized pursuant to subsection 2.2C(ii), then at the sum of the LlBOR Rate for the relevant Interest Period il the PIK Margin.
B. Interest Periods. The following terms shall be applicable to each Interest Period:
(i) each successive Interest Period shall automatically commence on the day
on which the next preceding Interest Period expires;

(ii) if an Interest Period would othelVise expire on a day that is not a Business
Day, such Interest Period shall expire on the next siicceeding Business Day; provided
that, if any Interest Period would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day; and
(iii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numcrically corresponding day in the calendar month at the end of such Interest Period) shall, end on the last Business Day of a calendar
month; and
(iv) no Intcrest Period with respect to any portion of the Loans shall extend
beyond the Maturity Date.

C. Interest Payments.
(i) Interest Payments Generally. Subject to the provisions of subsections
2.IQii) and 2.2E below, interest on each Loan shall be payable in arrears in Cash on each Interest Payment Date applicable to that Loan, upon any prepayment of that Loan
(to thc extcnt accrued on the amount being prepaid) and at maturity (including final maturity, by acceleration or otherwise).
(ii) Capitalization of Interest. If an Interest Payment Date occurs and (a) the
average of the Unrcstrictcd Cash and Cash Equivalents held by the Borrowers and the
Subsidiary Guarantors as of the last day of each of the two (2) consecutive Fiscal
Quarters immediately preceding such Interest Payment Date is Icss than $15,000,000, or (b) the Unrestricted Cash and Cash Equivalents held by the Borrowers and the Subsidiary Guarantors as of thc Fiscal Quarter immediately preceding the Fiscal Quarter in which such Interest Payment Date occurs is less than $15,000,000 (collectively, the "Cash
Interest Threshold"), then on such Interest Payment Date the Borrowers may, at their
option and in their sole discretion, in lieu of the paymcnt in whole or in part of interest due on such Loan on such Interest Payment Date which is in excess of the LlBOR Rate then in effect for such Loan for such Fiscal Quartcr, pay such amounts of interest by adding such amounts to the principal amount of such Loan on such Intercst Payment
Date. For the avoidance of doubt, (x) on the relevant Intcrest Payment Dale the Borrower
shall pay in Cash the interest due on such Interest Payment Date attributable to the
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LIBOR Rate, and (y) the interest capitalized on the relevant Intcrest Payment Datc
pursuant to this subsection 2.2C(ii) shall be attributable to thc PIK Margin (or the interest
relating 10 that portion of the PIK Margin not paid in Cash on the rclevant Interest
Payment Date). Capitalized interest shall be payable in cash on any futurc Intcrcst Payment Date to the extent the Cash Interest 'lbreshold is met after giving effect to the payment of intcrest and capitalized interest due on stich Interest Payment Date or, if the Cash Interest Threshold is not met on such Intercst Payment Date, as the Borrowers may otherwise elect. If the Borrowers elect to pay a portion of the interest due on any Loan through an increase in the principal amount of such Loan as provided in this subsection 2.2C(ii), the Borrowers shall, within two (2) Business Days of each relevant Intercst Payment Datc, deliver to the Administrative Agent written notice of such election, which notice shall also state the amount of interest so added to the principal of the Loan and the new principal amount of the Loan. To the extent not previously paid, all capitalized interest shall be paid in cash at maturity (including final maturity, by acceleration or otherwise).
D. Automatic Continuation. Subject to the provisions of subsection 2.6, upon the expiration of any Interest Period applicable to a LlBOR Loan and until prepayment of such LIBOR Loan in full or until maturity (including final maturity, by acceleration or otherwise),
such LlBOR Loan shall automatically bc continued for a successive Interest Period.
E. Post-Default Interest. Upon the occurrence and during the continuation of any
Event of Default (x) under subsections 7.1 or 7.7, and (y) during the continuation of any other
Event of Default, following written notice thereof to the Borrowers, at the election of the
Administrative Agcnt (which may be revoked at the option of the Requisite Lenders
thcreto), the outstanding principal amount of all Loans and, to the extent permitted by
notwithstanding any provision of subsection 9.5A that would require the consent of all Lenders applicable law, any interest payments thereon not paid when due and any fees and other amounts then due
and payable hereunder, shall thereafter bear interest (including post-petition interest in any
proceeding under the Bankruptcy Code, or other applicable bankruptcy or insolvency laws) payable upon demand at a rate that is 2% per annum in excess of the interest rate othelVise
payable under this Agreement with respect to the applicable Loans. Payment or acceptance of the increased rates of intcrcst providcd for in this subsection 2.2E is not a permitted alternative to timcly payment and shall not constitute a waiver of any Evcnt of Dcfault or otherwise prejudice or limit any rights or remedies of the Administrative Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall be computed on the basis

of a 360-ay year and for the actual number of days elapsed in the period during which it
accrues. In computing interest on any Loan, the date of the making of such Loan or the first day
of an lnterest Period applicable to such Loan shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan shall be excluded;
provided that if a Loan is repaid on the same day on which it is made, one day's interest shall be
paid on that Loan.
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2.3 Fees.
Thc Borrowers agrec to pay such fees to the Agents as may hcrcafter be (or have
previously been) agreed upon.
2.4 Repayments and Prepayments; General Provisions Reeardine Payments.
A. Scheduled Payments of
Loans.
The Borrowers shall repay the principal amount of the Loans on the Maturity Date, together with all other amounts owing by the Borrowers under this Agreement with respect to the Loans.
B. Prepayments of Loans.
(i) Voluntary Prepaymcnts.
(a) Subject to the terms of subsection 2.4B(i)(b), the Borrowers may,
upon not less than three (3) Business Days' prior irrevocable written or telcphonic notice, promptly confirmcd in writing to the Administrative Agent (which notice the Administrative Agent wil promptly transmit to each Lendcr), at any time and from time to time prepay the Loans on any Business Day in whole or in part in an
$500,000 in $1,000,000 and integral multiplcs of excess of that amount or such lesser amount as is then outstanding; provided. however, that in the event the Borrowers elect to prepay a LlBOR Loan other than
aggregate minimum amount of
on the expiration of the Interest Period applicable thereto, the Borrowers shall, at
the time of such prepayment, also pay any amounts payable under subsection
2.60 hereof; and provided. further. that if such notice of prepayment indicates that such prepayment is with respect to all outstanding Loans and is to be funded with the proceeds of a Refinancing, such notice may be revoked if the Refinancing is not consummated. Notice of prepayment having been given as aforesaid, the Loans shall become due and payable on the prepayment date specified in such noticc and in the aggregate principal amount specified therein.
Any voluntary prepayments pursuant to this subsection 2.4B(i) shall be applied as
specified in subsection 2.4C. Concurrently with each voluntary prepayment pursuant to this subsection 2.4B(i) the Borrowers shall deliver to the Administrative Agent an Offcer's Certificate that identifies the source of the funds used to finance such voluntary prepayment, including a statement as to whcthcr such voluntary prepayment of the Loans is being made directly or
indirectly with the proceeds of any issuance of debt Securities or other

Indebtcdness ofany of
the Borrowers or any Subsidiary.
(b) (Intcntionally Omitted.)
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(ii) Mandatory Prepayments.
The Loans shall be prepaid in the manner provided in subsection 2.4C upon the
occurrence orthe following circumstances:
(a) Prepayments Due to Issuance of Debt. Subject to the terms of
subsection 2.4B(ii)(f), no later than the first (1st) Business Day following the closing of any transaction pursuant to which any of the Borrowers or any of their Subsidiaries issue debt Securities or incur additional Indebtedness for borrowed
money (other than Indebtedness permitted under subsection 6.1), the Borrowers
shall prepay the Loans in an amount equal to the principal amount of such debt the underwriting discounts Securities or Indebtedness for borrowed money, net of and commissions paid or payable to the Borrowers or their Subsidiaries, plus an amount equal to the prepayment premium, ifany.
(b) Prepayments Due to Issuance of Eciuity Securities_ No later than the first (1st) Business Day foJlowing the closing of any transaction pursuant to
whieh any of the Borrowers or any of their Subsidiaries receive any Equity
Proceeds (other than Equity Proceeds received by a Borrower's wholly~owned
Subsidiary from Investments made by a Borrower or another of its Subsidiaries in such Subsidiary and permitted by subsection 6.3), the Borrowers shall prepay the Loans in an aggregate amount equal to 50% of such Equity Proceeds.
(c) (Intentionally Omittedl_
(d) Prepayments from Unrestricted Cash and Cash Equivalents. No
latcr than the third (3rd) Business Day following the last day of the each Fiscal Quarter, the Borrowers shall prepay the Loans, after the payments of interest (and capitalized interest) required hereunder, if (a) the average orthc Unrestricted Cash and Cash Equivalents held by the Borrowers and the Subsidiary Guarantors as of
the last day of each of the two (2) immediately preceding consecutive Fiscal
Quarters is greater than $15,000,000, or (b) the Unrestricted Cash and Cash Equivalents held by the Borrowers and the Subsidiary Guarantors as of the last day of the immediately preceding Fiscal Quarter is greater than $15,000,000; provided that such prepayment shall not be required to the extent that, aner giving etlect to such prepayment, the Unrestricted Cash and Cash Equivalents held by
the Borrowers and the Subsidiary Guarantors as of the last day of
the immediately
preceding Fiscal Quai1er is reduced to less than $10,000,000; and provided further that such prepayment shall not be required to thc extent that (i) the Board and a majority of the outstanding Common Units have affrmatively voted to set aside
an amount not to exceed $7,000,000 from such amounts that are otherwise
required to be prepaid, or (ii) the Board and 66.67% of the outstanding Common Units have affrmatively voted to set aside an amount in excess of $7,000,000, from such amounts that are otherwise required to be prepaid, in each case for (i) and (ii) above, to effectuate an Identified Acquisition and so long as such funds
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have been deposited into a segrcgated deposit account (subject to a perfected the Lenders) for security interest in favor ofihe Collateral Agent for the benefit of
such purpose.
(iii) No Waiver. Nothing contained in subsection 2.4B(ii) shall be deemed to
permit any Loan Party to incur Indebtedness or enter into any transaction not otherwise permitted under this Agreement.
C. Applcation of
Prepayments.
(i) Aoplication of Prepayments. Each prepayment received by the
Administrative Agent from the orrowers under subsection 2.4B(i) or (ii) with respect to
the Loans shall be applied in the following order: First, to the payment of any late
charges due and payable hereunder; second. to the repayment of any amounts advanced by the Administrative Agent or the Collateral Agent in accordance with the Mortgages or any of the other Collateral Documents for insurance premiums, laxes, assessments or for preservation or protcction of the Collateral and to the payment of all costs and expenses incurred by thc Administrative Agent or the Collateral Agent in connection with the
collection or the Loans or under, or in connection with, the Loan Documents (including
all attorneys' fecs payable hereundcr); third, to the payment of accrued and unpaid interest to the extent ihen due and payable; fourth. to fund any reserves or escrows required by the Administrative Agent or the Collateral Agent in accordance with the
terms of thc Mortgages or any of the Collateral Documents; fifth. to the payment of any LlBQR breakage costs incurrcd by Lenders on account of such paymcnt; and sixth, to reduction of the outstanding principal balance of thc Loans (provided that any First Lien Declined Amounts to be applied pursuant to this clause sixth shall be distributed to the prepayment: on a Q! rata basis, of the Loans held by Lenders thaI have elected to accept such First Lien Declined Amounts). Notwithstanding the foregoing, (i) if an Event of Default has occurred and is continuing, the Administrative Agent may apply any payments received in sueh order or proportion as the Administrative Agent, in its sole discretion, may determine and (ii) as among the Lenders, such payments shall be applied
in accordance with subsection 2.4D(ii) below. The Borrowers shall deliver to the
Administrative Agent and each Lcnder notice of each prepayment of Loans in whole or in part pursuant to subsection 2.4B(ii) not less than five (5) Business Days prior to the date
such prcpaymcnt shall be made (each, a "Mandatory Prepayment Date"). Such notice shall set forth (i) the Mandatory Prepayment Date, (ii) the aggregate amount of such
prepayment and (Hi) the option of each Lender to (x) decline its share of such prepayment or (y) accept First Lien Declined Amounts. Any Lender that wishes to exercise its option
to declinc such prepayment or to accept First Lien Declined Amounts shall notify the Administrative Agent by facsimile not later than threc (3) Business Days prior to the Mandatory Prepaymcnt Date. Any Lender that does not decline such prepayment in writing on or prior to the third (3rd) Business Day prior to the Mandatory Prepayment Date shall be deemed to have accepted such prepayment but not elected to accept First
Lien Declined Amounts.
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(ii) IInteniionallY Omittedl
D. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by the Borrowers of
principal, interest, fees and other Obligations hcreunder and under the Notes shall be made in same day funds and without defense, sctoff or countcrclaim, free of any restriction or condition, and delivered to thc Administrative Agent not later than 12:00 Noon (New York time) on the date due at the Funding and Paymcnt Offce for the account of the Lenders; funds received by the Administrative Agent after that time on
such due date shall, at the Administrative Agent's sole discretion, be deemed to have been paid by the Borrowers on the next succeeding Business Day.
the principal amount of any Loan shall include payment of accrued interest and prepayment fees, if any, on the principal amount being repaid or prepaid, and all such payments (and in any evcnt any
Except as provided in subsection 2.2C, all payments in respect of
(ii) Application of Payments to PrincipaL. Interest and Prepayment Fees.
paymcnts madc in respect of any Loan on a datc when interest is due and payable with
respect to such Loan) shall be applied to the payment of interest and prepayment fees, if
any, before application to principaL.
(iii) Apportionment of PaYments. Thc aggregatc principal, prepayment fees
and interest payments shall be apportioned among all outstanding Loans to which such payments relate, in cach case proportionately to the Lenders' respective Pro Rata Shares. The Administrative Agent shall promptly distribute to each Lender, at its applicable Lender Offce, its Pro Rata Share of all such payments received by the Administrative
Agent.
(iv) Payments on Business Days. Except if expressly provided otherwise,

whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder.
(v) Notation of Payment. Each Lcnder agrees that before disposing of any
Note held by it, or any part thereof (other than by granting participations therein), that Lender will make a notation thereon of all Loans evidenced by that Note and all principal payments previously made thereon and of the date to which interest thereon has been
paid; provided that the failure to make (or any error in the making oQ a notation of
any
Loan made under such Note shall not limit or otherwise affect such disposition or the obligations of the Borrowers hereunder or under such Note with respect to any Loan or
any payments of principal or interest on such Note.
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PRELIMINARY DRAFT SUBJECTTO MODIFICATION
E. Application of
Proceeds of Collateral.
Except as provided in subsection 2.4B(ii) with respect to prepayments, all

proceeds received by the Collateral Agent after an Event of Default or as a result of
exercising remedies under the Loan Documents, in respect of any sale of, collection from, the Collateral under any Collateral Document or other realization upon all or any part of
shall, in the discretion of the Col13teral Agent, be held by the Collateral Agent as Collateral for, and/or (then or at any time thereafter) applied in full or in part by the
Administrative Agent against, the applicable Obligations in the following order of
priority:
(a) to the payment of all costs and expenses of such sale, collection or
other realization, including, without limitation, reasonable compensation to the Agents and their agents and counsel, and all other reasonable expenses, liabilities and advances made or incurred by the Agents in connection therewith, and all amounts for which such Agents are enttled to indemnification under such Collateral Document and all advances made by the Collateral Agent thereunder for the account of the applicablc Loan Party (excluding principal and interest in respect of any Loans of such Loan Party), and to the payment of all reasonable costs and expenses paid or incurred by the Collateral Agent in connection with the
exercise of any right or remedy under such Collateral Document, all in

accordance with the terms of
this Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess proceeds, to the payment of
all other Obi igations on a pro rata basis; and

(c) thereafter, to the extent of any cxcess procccds, to the payment to
or upon the order of such Loan Party or to whosoever may be lawfully entitled to receive the same or as a court of competentjurisdiclion may direct.
2.5 Intentionally Omitted.l.
2.6 Spccial Provisions Governinl! LIBOR Loans.
Notwithstanding any other provision of this Agreement to the contrary, the following provisions shall govern with respect to LIBOR Loans as to the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable after

II :00 a.m. (New York timc) on each Interest Rate Determination Date, the Administrative Agent
shall determine (which determination shall, absent manifest error, be final, conclusive and binding upon all parties) the interest rate that shall apply to the LlBOR Loans for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to the Borrowers and each
Lender.
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B. Inability to Determine Applicable Interest Rate. In the event that the
Administrative Agent shall have reasonably determined (which determination shall be final and conclusive and binding upon all parties hereto), 011 any Interest Rate Determination Date with
respect to any LlBOR Loans, that by reason of circumstances arising after the date of this Agreement affecting the London interbank market, adequate and fair means do not exist for
ascertaining the interest rate applicable to such Loans on the basis provided for in the definition of L1BOR Ratc the Administrative Agent shall on such datc give notice (by telecopy or by
telephone confirmed in writing) to the Borrowcrs and each Lender of such detennination,
whereupon no Loans may be continued as L1BOR Loans (including, without limitation, pursuant (0 subsection 2.2D hereof), until such time as the Administrative Agent notifies the Borrowers
and the Lenders that the circumstances giving rise to such notice no longer exist (such
notification not to be unreasonably withheld or delayed).
C. Ilegality or Impracticability of LIBOR Loans. In the event that on any date
any Lender (in the case of clause (i)) and the Required Lenders (in the case of clause (ii)) shall have reasonably determined (which determination shall be final and conclusive and binding upon all parties hereto but shall be made only after consultation with the Borrowers and the Administrative Agent) that the making, maintaining or continuation of its LIBOR Loans (i) has
become unlawful as a result of compliance by such Lender in good faith with any law, treaty,
governmental nile, regulation, guideline or order (or would conflct with any such treaty,
governmental rulc, regulation, guideline or order not having the force of law even though the
failure to comply therewith would not be unlawful) or (ii) has become impracticable, or would this cause such Lendcr matcrial hardship, as a result of contingencies occurring after thc date of Agreement which materially and adversely affect the London interbank market, then, and in any such event, such Lender shall be an "Affected Lender" and it shall on that day give notice (by telecopy or by telephonc confirmed in writing) to the Borrowcrs and the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each other Lender). Thereafter (a) the obligation of the Affected Lender to make Loans as LIBOR Loans shall be suspended until such notice shall be withdrawn by the Affected Lcnder, and (b) the Affected Lender's obligation to maintain its outstanding UBOR Loans, as the case may be (the "Affected Loans"), shall be terminatcd at the earlier to occur of the cxpiration of the Interest Period then in effect with respect to the Affected Loans or when required by law. Nothing in this subsection 2.6C shall affect the obligation of any Lcnder other than an Affected Lender to make
or maintain Loans as L1BOR Loans in accordance with the tcrms of
this Agreement.
D. CompensaHon For Breakage or Non~Commencemcnt of Interest Periods.

Thc Borrowers shall compensate each Lender, upon written request by such Lender (which requcst shall set torth in reasonable detail the basis for requesting such amounts), for all
rcasonable losses, expenses and liabilities (including, without limitation, any interest paid by such Lender to the lenders of funds borrowed by it to make or carry its LIBOR Loans and any loss, expense or liabilty sustained by such Lender in connection with the liquidation or re~ actual
cmployment of such funds) which such Lender may sustain: (i) if any prepayment (including
any prepayment pursuant to subsection 2.4B or assignment pursuant to subsection 2.8) of any of its LIBOR Loans occurs on a date that is not the last day of all Interest Period applicable to that
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PRELIMINARY DRAFT SUBJECT TO MOOIFICA TION
fiNAL VERSION MUST BE ACCEPTABLE

TO FIRST LIEN STEERING COMMITTEE
Loan, (ii) if any prepayment of any of its UBOR Loans is not made on any date specified in a notice of prepayment given by the Borrowers or (iii) as a consequence ofany other default by the
Borrowers in the repayment of its UBOR Loans when required by thc tenns of
this Agreement.
E. Booking or LIBOR Loans. Any Lender may make, carry or transfer UBOR
Loans at, to, or for the account of any of its branch offces or the offce of an Affliate of that
Lender.
F. Assumptions Concerning Funding of LIBOR Loans. Calculation of all

amounts payable to a Lender undcr ihis subsection 2.6 and under subsection 2.7A shall be made as though that Lender had actually funded each of its relevant LIBOR Loans through the purchase of a eurodollar deposit bearing interest at the rate obtained pursuant to the definition of
LlBOR Rate in aii amount equal to the amount of such UBOR Loan and having a maturity comparable 10 the relevant lnterest Period and, through the transfer of such eurodollar deposit from an offhore offce of that Lender 10 a domestic offce of that Lender iii the United States of
America; provided, however, that each Lender may fund each of
its LIBOR Loans in any manner it sees fit and the foregoing assumptions shall be utilized only for the purposes of calculating amounts payable undcr this subsection 2.6 and under subsection 2.7A.
G. LlBOR Loans After Default. After the occurrence of and during the
continuation of a Default or Event of Default, no Loan may be continued as a L1BOR Loan and
the Borrowers may no longcr maintain any Loan as a L1BOR Loan after the expiration of any Intcrest Period then in cffect for that Loan.
2.7 Increased Costs; Taxes.
A. Increased Costs Generally. If any Change in Law shall: (i) impose, Modify or
deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any reserve requirement reflected in the LlBOR Rate); or (ii) impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or L1BOR Loans hereunder made by such Lender; and the result of any of the
foregoing shall be to increase the cost to such Lcnder of (or of
making or maintaining any L1BOR Loan
maintaining its obligations to make any such Loan) or to increase the cOst to such Lender, or to reduce the amount of any sum received or receivablc by such Lender hereunder (whether of principal, intcrest or any other amount), then upon request of such Lender, the Borrowers wil pay to such Lender such additional amount or amounts as wil compensatc such Lender on an after~tax basis for such additional costs incurred or reduction suffered.
B. Capital Requirements. If any Lender determines that any Change in Law
aITecting such Lender or the applicable Lender Offce of such Lender or such Lender's holding company, if any, regarding capital requirements has or would have the effect of reducing thc rate of relurn on such Lender's capital or on the capital of such Lender's holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such Lender, to a level below that which such Lender or such Lender's holding company could have
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achieved but for such Change in Law (taking into consideration such Lender's policies and the policies of such Lender's holding company with respect to capital adequacy), then from time to
time (he Borrowers will pay to such Lender such additional amoiint or amounts as wil
compensate such Lender or such Lender's holding company on an after~tax basis for any such reduction suffcrcd.
C. Certificates for Reimbursement. A certificate of a Lender setting forth in reasonable detail the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in subsection 2.7A or 2.78 and delivered to the Borrowers shall be conclusive absent manifest error. The Borrowers shall pay such Lender the
amount shown as due on any such certificate within ten (10) days after receipt thereof.
D. Delay in Requests. Failure or delay on the part of any Lender to demand

compensation pursuant to this subsection 2.7 shall not constitute a waiver of such Lender's right to demand such compensation; nrovided that the Borrowers shall not be required to compensate a Lender pursuant to this subsection 2.7 for any increased costs incurred or reductions suffered
more than nine months prior to the date that such Lender notifics the Borrowers of
the Change in
Law giving rise to such increased costs or reductions and of such Lender's intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or
reductions is retroactve, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).
E. Taxes.
(i) Payments Free of
Taxes. Subject to subsection 2.7E(v) below, any and all
payments by or on account of any obligation of the Borrowers hereunder or any other Loan Document shall be made free and clear of and without reduction or withholding for
any Indemnified Taxes or Other Taxes, provided that if the Borrowers shall be requircd
by applicable law to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this
subsection) the Agcnt or Lender receives an amount equal to the sum it would have
received had no such dcductions been made, (ii) the Borrowers shall make such
deductions and (iii) the Borrowers shall timely pay the full amount deducted to the
rclevant Governmental Authority in accordance with applicable law.
(ii) Payment of Other Taxes by the Borrowers. Without limiting the
provisions of paragraph (i) above, the Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
(iii) Indemnification by the Borrowers. The Borrowers shall indemnify the
Agents and each Lender within twenty (20) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this subsection 2.7E) paid by such Agent or such Lender and any penalties, interest and
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reasonable expenses arising thcrcfrom or with respect thcreto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate stating the amount of such payment or liability and setting forth in reasonable detail the calculation thereof delivered to the Borrowers by an Agent or a Lender (with a copy to the Administrative Agent), or by the Administrative Agcnt on its own behalf or on behalf of a Lender shall be conclusive absent manifcst error.
(iv) Evidence of Payments. As soon as practicable after any payment of

Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority, the Borrwers shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory 10 the Administrative Agent.
(v) Status of Lenders. Any Lender, if requested by the Borrowers or the
Administrative Agent, shall deliver documentation prescribed by applicable law or reasonably requested by the Borrowers or the Administrtive Agent as will enable the Borrowers or the Administrative Agent to determine whether or not such Lender is
subject to withholding, backup withholding or information reporting requirements.
the Borrowers is the foregoing, in the event that any of a resident for tax purposes in Lhe United States of America, each Foreign Lender shall
Without limiting the generality of
deliver to the Borrowers and the Administrative Agent (in such numbcr of copies as shall
be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the
request of the Borrowers or the Administrative Agent), whichever of the following is
applicable: (i) duly completed copies of Internal Revenue Service Form W-8BEN, claiming eligibility for benefits of an income tax treaty to which the United States of America is a party; (ii) duly completed copies of Internal Revenue Service Form w~ 8ECf; (iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Internal Revenue Code, (x) a certificate to the effect that such Foreign Lender is not (A) a "bank" within the meaning of section
88I(c)(3)(A) of the Internal Revenue Code, (8) a "10 percent shareholdet' of the
Borrowers within the meaning of section 881(c)(3)(B) of the Internal Revenue Code or
(C) a "controlled foreign corporation" described in section 88 i
(c)(3)(C) of the Internal
Revenue Code and (y) duly completed copies of Internal Revenue Service Form
W-8BEN; or (iv) any oiher form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax and reasonably
requested by the Borrowers or the Administrative Agent duly completed together with
such supplementary documentation as may be prescribed by applicable law and

reasonably requested by the Borrowers or the Administrative Agent to permit the
Borrowers to determine the withholding or deduction required to be made. A Foreign
Lender shall not be required to deliver any form or statement pursuant to this subsection
2.7E(v) that such Foreign Lender is not legally able to deliver.
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(vi) Trcatmcm of Certain Refunds. If the Administrative Agent or a Lcnder determines, in its reasonable discretion, that it has received a refund of any Taxes or Other Taxcs as to which it has been indemnified by thc Borrowers or with respect to which the Borrowers have paid additional amounts pursuant to subsection 2.7E, it shall
pay to the Borrowers an amount cqual to such refund (but only to the extent of indemnity
payments madc, or additional amounts paid, by the Borrowers under subsection 2.7E
with respect to thc Taxes or Othcr Taxes giving rise to such refund), net of all out~ofpocket expenses of the Agent or such Lender and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund); provided that
the Borrowers, upon the request of such Agent or such Lender, agrees to repay thc
amount paid ovcr to the Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Agent or such Lender in the event such
Agent or such Lender is required to repay such refund to such Governmental Authority.
This paragraph shall not be construed to require any Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems
confidential) to the Borrowers or any other Person.
2.8 Miti2ation Oblil!utions; Replacement of Lenders.
A. Designation of a Different Lender- Offce. If any Lender requests compensation
under subsection 2.7A or 2.7B, or requircs the Borrowers to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to subscction 2.7E, then such Lender shall use reasonable efforts to designate a different Lender Offce for making, issuing, funding or maintaining its Commitments or Loans hereunder or to assign its
rights and obligations hereunder to another of its offces. branches or affliates, if, in the
judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to subsection 2.7 in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be matcrially disadvantageous to such Lender. The Borrowcrs hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
. Replacement of Lenders. If any Lender requests compensation under subsection

the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to subsection 2.7E, or if any Lender defaults in its obligaiion to fund Loans hereunder, or if any Lender has determined that it is unable to make, maintain or continue its LlBOR Loans in accordance with subsection 2.6.C hereof, then thc Borrowers may, at their sale expense and effort, upon notice to such Lender and the Administrative Agent, require such Lcnder to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, subsection 9.1), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which Eligible Assignee may be another Lender, if a Lender accepts such assignment), provided that (i) in the case of
2.7A or2.7B, or if
assignments not made using an electronic settlemcnt systcm (~ ClearPar), the Borrowers shall
have paid to the Administrative Agent thc assignmcnt fec specified in subsection 9.IB(i)(c), (ii)
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such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under subsection 2.60) from such
Eligible Assignee (10 the extent of such outstanding principal and accrued interest and fees) or
the Borrowers (in the case of all other amounts), (iii) such Eligible Assignee is able to make, maintain or continue, as applicable, LIBOR Loans, (iv) in the case of any such assignment resulting from a claim for compensation under subsection 2.7A or 2.7B or payments required to
be made pursuant to subsection 2.7E, such assignment will result in a reduction in such
compensation or payments thereafter and (v) sueh assignment does not conflct with applicable law. A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to
require such assignment and delegation cease 10 apply.
2.9 Releases; Subordinations.
A. Release Upon Qualified Sale or Required Dedication. In connection with any Permitted Collateral Asset Sale, Major Collateral Asset Sale or Required Dedication, the
Collateral Agent or its duly authorized attorney-in~fact shall release the applicable portion ofthc Real Property Collateral from the Lien of the Mortgages (such portion of the Real Propert
Collateral, a "Released Parcel"); provided that all of the applicable conditions set forth in
subsection 6.9 have been satisfied and the applicable Borrowers shall have submitted to the
Collateral Agent not less than ten (10) days (or such shorter period as is acceptable to the
Collateral Agent) prior to the date of such proposed release (which must be on a Business Day), a reconveyance or release of Liens (and related Loan Documents) for each Released Parcel (for exccution by the Collateral Agcnt) (or its agent) in a fonn appropriate for recordation in the applicable jurisdiction and othcrwise satisfactory to the Collateral Agcnt (or its agent) in its good faith discretion and all other documentation as the Collateral Agent reasonably requires to be
delivcred by the Borrowers in connection with such release (collectively, the "Release
Instruments") for each Released Parcel (for execution by Collateral Agent) together with an Offcer's Certificate certifying that (i) the Release Instruments are in compliance with all Applicable Laws and Governmental Authorizations, (ii) the release to be effected wil not violate the tenns of this Agreemcnt and (iii) the release to be effected will not impair or otherwise
the Collateral Agent under the Loan Documcnts not being rcJca~ed. The Collateral Agent is authorized by the Lendcrs to enter into rclease and/or
adversely affect the Liens and other rights of
escrow arrangements with the Title Company or any other third~party designated by the
Collateral Agent for purposes of delivery of
Release Instruments.
. Subordinations in connection with Specified Encumbrances. If required by the
applicable Permitted Special Improvement District, upon ten (10) Business Days prior written notice from thc Borrowers, the Collateral Agent shall subordinate the First Priority Lien of the applicable Mortgage to any Liens granted by (he Borrowers or their Subsidiaries in favor of such Permitted Special Improvement District sccuring Special Improvement Bonds issued by such Permitted Special Improvemcnt District afler the Effective Date ("Specified Encumbrances") that, in each case, as certiled by a Responsible Offcer, arc necessary or desirable in connection
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with the development of the Projects; provided that (i) any such signature of
the Collateral Agent
is expressly made with no implied duty or obligation on the part of the Collateral Agcnt to review any documentation relating to such Spccified Encumbrances and is only made for the purpose of subordinating the First Priority Lien of the applicablc Mortgage to, such Specificd Encumbrance, (ii) no Dcfault or Event of Default has occurred and is continuing, (iii) the
BOITowers have providcd evidence to the Collateral Agent that such consent and/or subordination
is rcquired by the applicable Pcrmitted Special Improvement District, (iv) the Collateral Agent shall, as a condition to such subordination, be satisfied in its reasonable discretion that such subordination could not reasonably be expected to (a) have a Material Adverse Effect or impair Collateral Agent's Lien on the remaining Real Property Collateral or (b) materially impair the value of the Real Property Collateral and (v) the Collateral Agent shall have received evidence reasonably satisfactory to the Collateral Agent that the priority of the Liens evidenced by the Mortgages with respcct to the remaining Rcal Property Collatcral after giving effect to any such subordination shall be maintained following such subordination. The Borrowers shall pay all costs and expenses of the Collateral Agent and the Title Company in connection with any such
subordination.
2.10 Subordinations in connection with Map Approvals.
Upon not less than ten (10) Business Days' prior written notice from the Borrowers, the Collateral Agent shall subordinate the First Priority Lien of the applicable Mortgage to any
proposed "subdivision," "parcel," "tract" or other maps approved by the applicable

Governmental Authority and contemplated to be recorded in connection with the development of a Project (eollectively, the "Maps"), and, to the extent required by Applicable Law or the
applicable Governmental Authority, the Collateral Agent agrees to sign and acknowledge any
such Map; provided, in each such case, that (i) the Collateral Agent's signature is expressly made with no implied duty or obligation on the pari of the Collateral Agent to review such Maps and is only made for the: purpose of subordinating the Lien of the applicable Mortgage to such Map,
(ii) no DetuIt or Event of Default has occurred and is continuing, (iii) the Borrowers have provided evidence to the Collateral Agent that such subordination and/or cxecution is required for the subdivision approval of the appropriate Governmental Authority or otherwise reasonably necessary or desirable in connection with the development of a Project, (iv) the Collateral Agent
shall, as a condition to such subordination and/or execution, be satisfied in its reasonable

discretion that such subordination and/or execution could not reasonably be expected to have a Material Adverse EtTect or impair Collateral Agent's Lien on the remaining Real Property
the Real Property Collateral, (v) the Collateral Agent shall have received evidence rcasonably satisfactory to the Collateral Agent that the priority of
Collateral or materially impair the value of
the Liens evidenced by the Mortgages so subordinated with respect to the remaining Real Property Collateral subject to such Mortgages after giving effect to any such subordination shall
be maintained following such subordination and (vi) the documentation evidencing such
subordination shall be reasonably satisfactory to the Collateral Agent. The Borrowers shall pay all costs and expenscs of the Collateral Agent and the Title Company in connection with any such subordinatioii.
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2.1 i Subordinations in connection with Qualified Sales Agreements.
Upon not less than ten (10) Business Days' prior written notice from the Borrowers and
provided no Event of Default has occurrd and is continuing, the Collateral Agent shall enter into a subordination and nonvdisturbance agreement, in form and substance reasonably satisfactory to
the Collateral Agent, with a homebuilder or other commercial developer who is party to a
Qualified Sales Agreement and (he Borrower pursuant 10 which such homebuilder or other
commercial developer confirms, among other things, that its interest in the relevant Real Property Collateral and the applicable Qualified Sales Agreement are subordinate to the First
Priority Lien of the Collateral Agent and the Collateral Agent agrees, subject to certain
conditions, to recognize the validity of the Qualified Sales Agreement in the event of a realization upon such First Priority Lien, provided that the Collateral Agent shall not be required to enter into any such subordination and nonvdisturbance agreement unless the Collateral Agent is reasonably satisfied that the sales contemplated by such Qualified Sales Agreement are, and
wil be, permitted undcr Section 6.9.
SECTION 3. CONDITIONS TO EFFECTIVENESS

3.1 Conditions to Effectiveness.
The effectivencss of this Agreement, and the obligation of each Lender to make the
extension of credit requested to be made by it is subject to the satisfaction, prior to or

concurrently with the making of such extension of credit on the Effective Date, of
the following
conditions precedent:
A. Borrowers' Documents. On or before the Effective Date, each Borrower shall

deliver or cause to be delivered to the Administrative Agent the following, each, unless otherwise
noted, dated the Effective Date:
(i) certified copies of its Organizational Certificate (in form and substance
reasonably satisfactory to the Administrative Agent), together with a good standing
certificate from the applicable Governmental Authority of its jurisdiction of

incorporation, organization or formation, each state in which any of its Real Property Assets are locaied, and each other state in which it is qualified as a foreign corporation or other entity to do business, each daled a recent date prior to the Effective Date;
(ii) copies of its Organizational Documents (in form and substance reasonably
satisfactory to the Administrative Agent), certified as of the Effective Date by its corporate secretary or an assistant secretary;
(iii) copics of its Organizational Authorizations approving and authorizing the
execution, delivery and performance of
this Agreement and the other Loan Documents to
which it is party or by which it or its assets may be bound that are to be delivered on the
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Effective Date, ceitified as of the Effective Date by iis corporate secretary or an assistant secretary as being in full forcc and effcct without Modification;
(iv) incumbency certificates of its offcers executing this Agreemcnt and the
other Loan Documents to which it is a party as ofthe Effective Date;
(v) executed originals of this Agrecment and the other Loan Documents to
which it is a party that are to be delivered on the Effective Date;

(vi) copies of each of the Material Contracts to which it is a party, certified by
a Responsible Offcer; and
(vii) such other documents as thc Administrativc Agcnt may reasonably
request.
. (Intentionally OmiltcdJ.
C. Consummation of
Transactions.
the Loan Documcnts shall bc in form and substance reasonably (i) (a) Each of satisfactory to the Administrative Agent and eaeh such Loan Documcnt shall have been duly executed and delivered by each party thereto and shall be in full force and effect; and (b) all other conditions set forth in the Loan Documents shall have been satisfied or the fulfillmcnt of any such conditions shall have been waived with the writtcn consent of the Administrative Agent; and
(ii) after giving effect to the transactions contemplated hereby, the Borrowers
and their Subsidiaries shall have no outstanding Indebtedness or preferred Capital Stock
other than (a) the Loans under this Agreemcnt, and (b) the Permitted Existing
Indebtedness.
D. Lender Signatures. The Lenders and the Agents shall have executed and
delivered this Agreement.
E. Necessary Consents and Estoppels. The Borrowers shall have obtained all
approvals and consents of Governmental Authorities and other Persons necessary or advisable in
connection with the transactions contemplated hereby and the continued operation of the
business conducted by the Borrowers and their Subsidiaries, and all applicable appeal periods shall have expired, and shall have received estoppels from such Persons as may be reasonably requcstcd by the Administrative Agent, and each ofthc foregoing shall be in full force and effect and in form and substance reasonably satisfactory to the Administrative Agent. Such approvals and consents and estoppels shall be satisfactory to Administrative Agent in its sole and absolute discretion and shall include, without limitation:
(i) executed estoppel certificates from all homeowners' associations and
property owners' associations related to each Project;

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(ii) executed consents from any other lendcrs ofthe Borrowers or any of
their
Subsidiaries, as required by the terms of any other loan documents to which the
Borrowers or such Subsidiaries, as applicable, are a party;
(iii) executed consents from any Person required in connection with the Pledge
and Security Agreement and executed consents from any Person required in connection
with the other Collateral Documents; and

(iv) executed estoppel certificates from Clark County regarding the Rhodes
Ranch Development Agreement.

F. Perfection of
Security Interests. The Borrowers shall have taken or caused to be
taken such actions in such a manner directed by the Collateral Agent to create a valid and
perfected First Priority security interest in the Collateral of each Loan Party in which a security
interest can be granted and perfected under the UCC or other Applicable Law to the extent
required by the Pledge and Security Agreement or other applicable Collateral Documents. Such actions shall include: (i) the delivery pursuant to the applicable Collateral Documents of (a) such
certificates or other instruments (each of which shall be registered in the name of
the Collateral
Agent or properly endorsed in blank for transfer or accompanied by irrevocable undated stock or equivalent powers duly endorsed in blank, all in form and substance satisfactory to the Collateral Agent) representing all of the shares or other interests of Capital Stock required to be pledged pursuant to the Collateral Documents identified on Schedulc 3.IFw) and (b) all promissory notes or other instruments (duly endorsed, where appropriate, in a manner satisfactory to the Collateral Agent) evidencing any Collateral; (ii) the delivcry to the Collateral Agent of (a) the results of a recent search, by a Person satisfactory to the Collateral Agent, of all effective UCC financing statements and fixture fiings and all judgmcnt and tax lien filings which may have been made
with respect to any personal or mixed property of any Loan Party, together with copies of al1 such filings disclosed by such search and (b) UCC financing statements the recordation of which
has becn authorized by the applicable Loan Parties as to all such Collateral granted by such Loan Parties for all jurisdictions as may be necessary or desirable to perfect Collateral Agent's security interest in such Collateral; and (ii) the delivery to the Collateral Agent of evidence reasonably satislctory to the Collateral Agent that all other fiings (including UCC termination statements
and relcases and filings with the PT and thc United States Copyright Offce with respect to Intellectual Property of the Loan Parties), recordings and other actions the Collateral Agent
deems necessary or advisable to establish, preserve and pcrfect the First Priority Liens granted to the Collateral Agent in Collateral constituting personal (both tangible and intangible) and mixed
property shall have been made or wil be made concurrently with the Effective Date. All
"securilies accounts" and "deposit accounts" (as sueh terms arc defined in the UCC) of any of the Borrowers (other than any such dcposit accounts idcntified on Schedule 3.1 F-2) shall be subjcet to effective control agreements in favor of the Collateral Agent in form and substance reasonably satisfactory to the Collateral Agent, all of which have been duly executed and
delivered by each part thereto and are in full force and effect.
G. Real Property. The Administrative Agent shall have received on or prior to the Eflective Date from the Borrowers and each other applicable Loan Party:
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(i) Mortl!agcs. Fully executed and notarized Mortgages, together with any
Modifications thereto deemed nccessary by the Collateral Agent in connection with the cxecution and delivery of this Agreement, thc other Loan Documents and the transactions
contemplated hercby and thcreby, in propcr form for recording in the real property records of Clark County or Mohave County, as applicable, encumbering thc Rcal Property Collatcral listed on Schcdulc 3.IG, in each case in form and substance
satisfactory to the Collateral Agcnt;
(ii) Opinions of Local Counsel. An opinion of counsel (which counsel shall
be satisfactory to the Collateral Agent) with respect to the enforceabilty of the

Mortgages to be recorded in the real property records of Clark County or Mohave County, as applicable, and such other related matters as the Collatcral Agent may reasonably request, in each case in form and substance satisfactory to the Collateral Agent;
(Hi) Title Insurance. ALTA cxtended coverage mortgagee title insurance policies (the "Mortgagee Policies") issued by the Title Company with respect to the Mortgages listed on Schedule 3.1 G. in amounts not less than the respective amounts
dcsignated on such Schedule with respect to any particular Rcal Property Collateral, insuring fee simple title to each sueh Real Property Collateral vested in such Loan Part
and insuring the Collateral Agent that the applicable Mortgages create valid and cnforeeable First Priority mortgage Liens on the respective Mortgaged Properties
cncumbered thereby, which Mortgagee Policies (I) shall include all endorsements rcquested by Collateral Agent including an endorsement for mechanics' liens (or a
deletion of the standard pre~printed mechanics' lien exception) and (2) shall provide for
affrmative insurance and such reinsurance as the Collateral Agent may reasonably
request, all of the foregoing in form and substance reasonably satisfaetory to the
Collateral Agent; and evidence satisfactory to the Collateral Agent that such Loan Party has (i) delivered to the Title Company all ceriificates and affdavits required by the Title Company in connection with the issuance of the Mortgagee Policies and (ii) paid to the
Title Company or to the appropriate Governmental Authorities all expenses and
premiums of the Title Company and all other sums rcquired in connection with the
issuance or
the Mortgagee Policies and all recording and stamp taxes (including mortgage
recording and intangible taxes) payable in connection with recording the Mortgages in
the Clark County or Mohave County, as applicable, real property records;

(iv) (Intentionally OmiUcdl; (v) (Intentionally Omitted);
(vi) (Intentionally Omitted);
(vii) (Intentionally Omitted);
(viii) (Intentionally Omitted);
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(ix) Matters Relatine. to Flood Hazard Properties. If any Real Property
Collateral constitutes a Flood Hazard Property, and if such Flood Hazard Property is located in a community that participates in the National Flood Insurance Program,
evidence that the Borrowers have obtained flood insurance in respect of such Flood
Hazard Property to the extent required under the applicable regulations of the Board of
Governors of
the Federal Reserve System.
H. Intentionally Omitted.l.
1. Intentionally Omitted.l.
J. Transaction Costs, Fees and Expenses. On or prior to the Effective Date, the
Borrowers shall have paid (i) to the Administrative Agent any and all fees and reasonable
expenses of the Agents that are then due and owing or accrued and not yet paid under or in
connection with this Agreement or any of
the documents, instruments or agreements executed in conncction herewith and (ii) to the appropriate Persons any and all outstanding reasonable fees and expenses (including legal advisors) incurred by the Agents through the Effective Date in connection with the negotiation, drafting and execution of the Loan Documents, as well as all fees reasonably estimated to be incurred following the Effective Date, including with respect to the perlction and recordation of the Liens granted under the Collateral Documents. On or prior to the Effective Date, the Borrowers shall have delivered to the Administrative Agent a schedule, in a form satisfactory to the Administrative Agent, setting forth the Borrowers' estimate of the transaction costs (other than fees payable to any of the Agents).
K. Opinions or Loan Parties' CounseL. The Administrative Agent and its counsel shall havc received the written opinions of (i) II 1, special Nevada and Arizona
counsel for the Loan Parties,) (ii) II l, special New York counsel for the Loan
Parfies,) and (iii) each other special and local counsel for the Loan Parties as the Administrative Agent may reasonably request, in each case, (a) in form and substance reasonably satisfactory to the Administrative Agent and its counsel, (b) dated the Effective Date, (c) addressed to each of
the Agents and thc Lenders, and (d) setting forth the matters reasonably requested by the
L. Fiiianciallnformation. Prior the Effective Date, the Administrative Agent shall
have received from the Borrowers such financial statements and other cash flow and financial
information as the Administrative Agent may reasonably request, all in form and substance
reasonably satisfactory to the Administrative Agent.
M. Evidence of Insurance. The Administrative Agent shall have received copies of
certificates of insurance with respect to each of the insurance policies rcquired pursuant to subsection 5.6, and the Administrative Agent shall be reasonably satisfied with the nature and
scope of
these insurance policies_
N. Environmental. The Administrativc Agent shall have received one or more

cnvironmental asscssment reports which, in their totality, provide a detailed environmental
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assessment of the Projects, in form and substance and from an independent environmental
assessment firm satisfactory to the Administrative Agent, and the Administrativc Agent shall be reasonably satisfied as to the amount and nature of any environmental and employee healih and safety exposures to which the Borrowers and their Subsidiaries may be subject after giving effect to the transactions contemplated hereby, and with the plans of the Borrowers or siich Subsidiaries with respect thereto.
O. (Intentionally Omitted).
P. Corporate and Capital Structure, Owncrship, Managemcnt.
(i) Organizational Structure. The corporate organizational structure of the
Borrowers and their Subsidiaries as of the Effective Date shall be as set forth on
Schedule 4.5.
(ii) Capital Structure and Ownership. The capital structure and ownership of
the Borrowers and their Subsidiaries as of the Effective Date shall be as set forth on
Schedule 4.5.
Q. Reprcsentations and Warranties; Performance or Agreements. The
Borrowers shall have delivered to the Administrative Agent an Offcer's Certificate, in form and
substance satisfactory to the Administrative Agent, to the etfect that the representations and
warranties in Section 4 hereof and in the other Loan Documents are true and correct in all
material respccts on and as of the Effective Date and both before and after giving effect to the
transactions contemplated hereby, to the same extent as though made on and as of
that date, that
the Borrowers have pcrformed in all matcrial respects all agreements and satisfied all conditions which this Agreement provides shall be performed or satisfied by it on or before the Effective Date, and that no Default or Event of Default has occurred on and as of the Effective Date before and after giving effect to the transactions contemplated hereby.
R. (Intentionally Omitted).
S. No Litigation. There shall be no litigation or governmental, administrative or
judicial actions or proceedings, actual or threatened, that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or that could reasonably be cxpccted to
restrain, prevent or impose burdensome conditions on any of the transactions contemplated

hereby.
T. Completion of Proceedings. All partnership, corporatc, Iimitcd liability company and other proceedings taken or to be takcn in connection with the trnsactions
contemplated hereby shall be satisfactory in form and substance to the Administrative Agent and its counsel, and the Administrative Agent and its counsel shall have received all slich counterpart
originals or certified copics of such documents as the Administrative Agent may reasonably request (including, without limitation, conscnts and approvals with respect lo the execution, delivery and performancc by each applicable Loan Party of the Credit Agreement, the Guaranty,
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and the other Loan Documents to which it is party or by which it or its assets may be bound that
are to be delivered on the Effective Date, certified as of the Effective Date by its corporate
secretary or an assistant secretary as being in full force and effect without Modification). Each
Lender, by delivering its signature page to this Agreement, shall be deemed to have
acknowledged receipt of, and consented to and approved, each Loan Document and each other
document required to be approved by any Agent, Requisite Lenders or Lenders, as applicable, on or prior to the Effective Date.
U. Money Laundering. The Administrative Agent shall have reccivcd, suffciently in advance of the Effective Date, all documentation and other information rcquired by bank regulatory authorities from the Loan Parties under applicable "know your cuslomet' and antmoney laundering rules and regulations, including the U.S.A. Patriot Act.
V. (Intentionally Omitted).
Confirmation Order. Pia
W. Confirmation Order. The Agents and the Lenders shall have received the II of Reorganization. The tenns and provisions of the Plan of
Reorganization shall be reasonably satistctory to the Agents and Lenders (it being acknowledged by the Agents and the Lenders that the terms and provisions of the Plan of
Reorganization, and filed with the Bankruptcy Court on I 1. are satisfactory), and
the Confirmation Order shall include such provisions with respect to the Loans as are reasonably satisfactory to the Agents and the Lenders and, providing, among other things, that the Borrowers shall be authorized to (i) enter into the Loan Documents, (ii) grant the Liens and sceurity interests and incur or guarantee the Obligations under the Loan Documents and (iii) issue, execute and deliver all documents, agreements and instruments necessary or appropriate to implement and effectuate all obligations under the Loan Documents and to take all other actions necessary to borrow Loans under the Loan Documents. Except as consented to by the Agents and the Lenders, the Bankruptcy Court's retention of jurisdiction underthe Confirmation Order shall not govern the enforccment of the Loan Documents or any rights or remedies related thereto.
Y. Final Order". The Agents and the Lenders shall have received evidence, reasonably satisfactory to the Agents and the Lcnders, that (i) the "Effective Date" under and as defined in the Plan of Reorganization shall have occurred, the Confinnation Order shall be valid, subsisting and continuing as a Final Order and all conditions precedent to the effectiveness of
the
Plan of Reorganization shall have been fulfilled, or validly waived with the consent ofthc Lenders, including, without limitation, the execution, delivery and performance orall of the conditions thereof other than conditions that have been validly waived with the consent of the Lenders (but not including conditions consisting of the eITeetiveness orthe Loan Documents) and (ii) no motion, action or proceeding by any creditor or other party-in-interest to the Chapter 11 Cases which would adversely affect the Plan ofReorganizalion, the consummation ofthc Plan of Reorganization, the business or operations of the Borrowers or the transactions contemplatcd by the Loan Documents. as determined by the Lenders in good faith, shall be pending.
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Z. As of the Effective Date:
(i) The representations and warranties contained herein and in the other Loan
Documents shall be true and correct in all material respects on and as of the Effective
that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such rcprcsentations and warranties shall have been true and correct in all material respects on and as of such earlier datc;
Date to the same extent as though madc on and as of
(ii) No cvent shall have occurred and be continuing or would result from the
consummation of
the borrowings contemplated by this Agreement that would eonstitutc a Default or Event of Default, or could reasonably be cxpected to have a Material Adverse Effect; and
(iii) No order, judgment or decree of any Govcrnmental Authority shall
purport to cnjoin or restrain any Lender from making the Loans to be made by it on ihe
Effective Date.
SECTION 4. REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to entcr into this Agreement and to make the Loans and in order to induce the Agents to enter into this Agreement, each of the Borrowers represents and warrants to each Lender and each Agent, on thc date of this Agreement and on the Effective Date, that the following statements are true and correct.
4.1 Orl?anization and Oualifcation.
Each Borrower and each of its Subsidiaries is an entity duly organized, validly existing and in good standing undcr the laws of the jurisdiction of its organization. Each Borrower and each of its Subsidiaries is duly qualified and is authorized to do business and is in good standing as a foreign corporation or othcr organization in each state or jurisdiction listed on Schedule 4.1 hereto and in all other states and jurisdictions in which the failure of such Borrower or any of
such Subsidiaries to be so qualified could reasonably be expected to have a Material Adverse Effect.
4.2 Powcr aDd Authoritv.
Each of the Borrowers and the other Loan Parties are duly authorized and empowered to
enter into, exccute, deliver and perform this Agreement and each of
the other Loan Documents to
which it is a party. This Agreement has been duly and validly executed and delivered by the
Borrowers and the othcr Loan Documents enLered into on the Effective Date have been duly and validly executcd and delivered by the Loan Parties party thereto. The execution, delivery and performance of this Agreement and each of the other Loan Documcnts have been duly authorized by all necessary action.
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4.3 Lel!ally Enforceable Al!reement.
This Agreement is, and each of the other Loan Documents when delivered under this
Agreement will be, a legal, valid and binding obligation of each Borrower and each of its Subsidiaries signatories thereto, enforceable against each of them in accordance with the
respective terms of such Loan Documents, except as the enforceability thereof
may be limited by
bankruptcy, insolvency or other similar laws of general application affecting the enforcement of
creditors' rights or general equitable principals, whether applied in law or equity.
4.4 No ConIct.
The execution, delivery and performance by each of the applicable Loan Parties of the Loan Documents, the issuance, delivery and payment of the Notes and the Loans, and the
consummation of the transactions contemplated hcreby do not and wil not (i) violate,
contravene, or cause any Loan Party to be in default under, any provision of any law or any
governmental rule or regulation applicable to any Loan Party, the Organizational Certificate or any other Organizational Documents of any Loan Party or any order, judgment, injunction,
decree, determination or award in effect having applicability to any Loan Party, (ii) conflct with, result in a breach of or constitule (with due notice or lapse of time or both) a default under any
indenture or loan or credit agreement or any other material agreement, contract, lease or instrument to which any Loan Party is a party or by which any of them or any of its or their
property may be bound or affected, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets now owned or hereafter acquired by any Loan Party (other than any Liens created under any of the Loan Documents in favor of the Collateral Agent),
(iv) require any approval or consent of stockholders, partners or members or any approval or consent of any Person under any organizational certificate or other indenture, agreement,
contract or instrument to which any Loan Party is a party or by which any of them or any of
their
property may be bound, except for such approvals or consents obtained on or before the
Effective Date or (v) give rise to any preemptive rights, rights of first refusal or other similar
rights on behalf of any Person under any Applicable Law or any provision of
the Organizational
Certilicate or other Organizational Documents of any Loan Part or any Material Contract to
which any Loan Party is a party or by which any Loan Party is bound.
4.5 Capital Structure.
As of the date hcrcof, Schedule 4.5 hereto states (i) thc correct name of each Borrowcr and each Subsidiary, the jurisdiction of organization of each Borrower and each Subsidiary, and the owners of the Capital Stock of each Borrower and each Subsidiary (including the percentage ownership of each such Person) and (ii) the number of authorized and issued Capital Stock (and treasury shares) of each Borrower and each Subsidiary. Each Borrower has good titlc to all of thc shares it purports to own of the Capital Stock of each of its Subsidiaries, free and clear in cach case of any Licn (except as pennitted by this Agrcement). All such Capital Stock have bcen
duly issued and are rully paid and l1n~assessabie. As of the date hereof, no Borrower has
obligatcd itself to make any Restricted Payment. No Borrower has issued any options to
purchase, or any rights or warrants to subscribe for, or any commitments or agreements to issue
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or sell, or any Capital Stock or obligations convertiblc into, sharcs of the Capital Stock of such Borrower or any of its Subsidiaries. Except as set forth on Schedule 4.5 hereto, as of the date
hereof: to the Borrowers' Knowledge, there are no outstanding agreements or instruments
binding upon the holders of a Borrower's Capital Stock relating to the ownership of its Capital Stock.
4.6 Licenses.
The Loan Parties have obtained (or caused to be obtained) all material licenses, permits, approvals, easemcnts and rights of way (and all such itcms arc currently in full force and effect) required from any Governmental Authority having jurisdiction over each of Rhodes Ranch, Tuscany, Spanish I-!ills and South West Ranch, or from private parties (collectively, "Matedal Licenses") necessary or advisable (i) for the current (and each former) stage of development and usage of each Project and (ii) to ensure vehicular and pedestrian ingress to and egress to permit the current (and former) development of each of Rhodes Ranch, Tuscany, Spanish Hils and South West Ranch. The Loan Parties reasonably believe they will obtain on a timely basis in thc
Ordinary Course of Business all Material Licenses necessary or advisable (i) for the full
development and usage of each Project and (ii) to ensurc vehicular and pedestrian ingress to and egress as required to pcrmit the full development and usage of each of Rhodes Ranch, Tuscany, Spanish Hills and South West Ranch.
4.7 Corporate Names.
During the 5-year period preceding the date of this Agrcement and as of the Effective
Date, no Borrower nor any Subsidiary has been known as or uscd any corporate, fictitious or trade names exccpt thosc listed on Schedule 4.7 hereto. Except as set forth on Schedule 4.7, neither the Borrowcrs nor any Subsidiary has been thc surviving corporation of a mcrger or
consolidation or acquired all or substantially all of
the assets of any Person.
4.8 Business Locations: A1!cnt for Process.
As of the date hereof, the chief executive office and other places of business of each
Borrower and eaeh Subsidiary are as listed on Schedule 4.8 hcreto. During the 5~year period
preceding the date of
this Agreement, neither of Borrowers nor any Subsidiary has had an offce,
place of business or agent for service of process other than as listed on Schedule 4.8. Except as
shown on Schedule 4.8 on the date hereof: no inventory of any Borrower or any Subsidiary is stored with a bailee, warehouseman or similar Person, nor is any inventory consigned to any
Pcrson.
4.9 Title to Properties.

A. Each Borrower and each of its Subsidiaries has good and marketable title to and
fee simple ownership of, or in the casc f the leased Real Propert Assets described on
Schcdule 4.9A. valid and subsisting leasehold interests in, all of its Rcal Property Assets
(including, without
limitation, the Real Property Collateral), and good title to all of its personal
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property, including all property reflected in the financial statements referred to in subsection 4.14 or delivered pursuant to subsection 5.3, in each case free and clear of all Liens except for Liens
permitted by this Agreement. Each Borrower has paid or discharged, and has caused each
Subsidiary to pay and discharge, all lawful claims which, if unpaid, could reasonably be
expected to become a Lien against any propertics of such Borrower or such Subsidiary that is not
permitted by this Agreement, except to the extent such claim is being Properly Contested. The Liens granted to the Collateral Agent pursuant to the Collateral Documents are First Priority Liens, subji:ct only to those Liens which are expressly permitted by the tenns of this Agrccment.
Encumbrances) affecting the Real Property Collateral that would be disclosed by a survey of
B. There are no material exceptions or material adverse matters (other than Permitted the Real Property CollateraL. A true, accurate and complete depiction of each Project as of the Effective Date is set forth on the maps attached hereto as Exhibit XI and which map identifies
the portions of each Project comprising the Real Property Collateral as of the Effective Datc.
Attached hereto as Schedulc 4.9B-l is a true, correct and complete list of all Real Property
Assets owned by each Borrower and each of its Subsidiaries as of the date hereof, setting forth the name of the record owner of such Real Property Asset, the tax parcel identification number
or similar designation of such Real Property Asset, and the property description (including parcel number and development).
C. No Borrower Entity has received any notice of any material special assessment or proceeding affecting any Project, change in the tax rate or the assessed valuation of any Project or any other material changes affecting the taxes, assessments or other charges with respect to any Project which is not reflected in the title reports provided to the Administrative Agent prior
to the Effective Date pursuant to subsection 3.IG(iv). Other than those disclosed on
Schedule 4.9C to the Borrowers' Knowledge there are no spccial assessment districts, or plans for the same, or for any other scheme that would involve the imposition of taxes, in each case relating to any Project. There are no zoning or other land-use regulation proceedings or known change or proposed change in any applicable laws, regulations or the Entitlements which could detrimentally and materially affect the use, value, development or operation of any Project,
including the Real Property CollateraL.
4.10 Priority of
Liens: UCC~l Financine: Statements.
A. As of the Effective Date, each of the Liens in the Collateral granted to the
Collateral Agent, for thc benefit of the Secured Parties, pursuant to any of the Collaleral
Documents (i) wil (when (but only to the extent) any UCC~ i Financing Statements and/or other filings, recordations or control agrcements required under or in respect of such Collateral Documcnts in appropriate form are filed or rccorded in the appropriate offces of Governmental Authorities or are executed and delivered, as applicable) constitute valid and fully perfected
security interests undcr the UCC or other Applicable Law in all of the Collateral described
therein and (ii) wil be a First Priority Lien.
B. UCC~ i Financing Statemenls containing a correct, complete and adequate

description of the Collateral have bcen delivered to the Administrative Agent for filing in the
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offce of the Secretary of State of the State of organization of each Loan Party and the State in which each Project is located, and for recording in the offcial records of the county in which each Project is located, to the extent necessary to establish under the uec a valid and perfected lien in favor of the Collateral Agent, for the benefit of the Secured Partics, in all Collateral in
which a lien may be perfected by fiing a uec-i Financing Statement, and no further or
subsequent fiing, rccording or registration is necessary in any such jurisdiction or clsewhere in respect of Collateral that may be perfected by filing a UCC-i Financing Statement, except as provided under the VCC with respect to the fiing of continuation statcments or in connection
with any change in the name, identity or location of
any such LOan Party.
4.11 No Subordination.
of
There is no agreement, indcnture, contract or instrument to which the Borrowers or any their Subsidiaries is subject or by which the Borrowers or their Subsidiaries may be bound that requires the subordination in right of payment of any of Borrowers' obligations under this Borrowers. Agreement to any other obligations of
4.12 Permits: Licenses; Franchises.
The Borrowers and each of their Subsidiaries possess, in accordance with all Applicable
Laws, and without conflct with the rights of any third parties, all permits, memberships, franchises, contracts and licenses required and all trademark rights, trade names, trade name
rights, patents, patent rights and fictitious name rights necessary to enable them to conduct the business (i) in which they arc now cngaged as of the Effective Date and (ii) in which they are contemplated to be engaged on and after the Effective Date, subject, in the case of clause (ii), to the receipt of furthcr pcrmits and licenses with respect to additional subdivisions as each Project is more fully developed, as contemplated by the applicable Development Agreements, except to the foregoing could not reasonably be expected the extent the failure to obtain or possess any of to result in a Material Adverse Effect. The Borrowers reasonably believe that all such further permits and licenses wil be received in a timcly manncr in the Ordinary Course of Business.
4.13 Indebtedness.
As of the Effective Datc, the Borrowers and thcir Subsidiaries have no Indebtedness
exccpt for Indebtedness permitted pursuant to subsection 6.1.
4.14 IIntcntionallv Omiltedl.

4.15 Disclosure.
The representations and warranties of each of the Borrowers and their Subsidiaries contained in the Loan Documents and the information contained in the other documents,
certificates and written statements furnished to any of
the Agents or the Lenders by or on behalf
of any Borrower or any of its Subsidiaries for usc in connection with the transactions
contemplated by this Agrcement or any other Loan Document, when considered with all other
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information then provided, do not contain, as at its date and as of the Effective Date, any untrue
statement of a material fact or omit to state a material fact necessary in ordcr to make the
statements contained herein or therein not misleading in light of the circumstances in which the samc werc made. Any projcctions and financial information prepared to give effect to the transactions contemplated hereby and contained in such materials are based upon good faith
estimates and assumptions bel eved by the Borrowers to be reasonable at the time made and at
the Effective Date, it being recognized by the Agents and the Lcnders that such projections as to
future events are not to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results and that the differences may be materiaL. There is no fact known to any Borrower that has had, or could reasonably be expected to result in, a Material Adverse Effect and that has not been disclosed herein or in such other documents, certificates and statements furnished to the Lendcrs for use in connection with the transactions contemplated hereby.
4.16 Solvent Financial Condition.
Each Borrower and each of its Subsidiaries is now Solvent and, after giving effect to the
Loans to be made hereunder and the consummation of the transactions contemplated hereby,
each Borrower and, after giving effect to all rights of contribution, reimbursement and
subrogation arising in connection with the Guaranty, each of
its Subsidiaries, will be Solvent.
4.17 Surety Oblieations.

Except as set forth on Schedule 4.17 hereto on the date hereof, the Borrowers and their
Subsidiaries are not obligated as surety or indemnitor under any surcty or similar bond or other contract issued or entered into any agreement to assure payment, performance or completion of pcrfonnance of any undertaking or obligation of any Person.
4.18 Taxes.
on Schedule 4.18 hereto. Each Borrower and each of
The FEIN of cach Borrower and each of its Subsidiaries, on the datc hcreof, is as shown its Subsidiaries has fied all federal, state and other material Tax returns and other reports it is required by law to fie and has paid, or made provision for the payment of, all Taxes shown on such returns 10 be due and payable, together with all other material Taxes upon it, its income and properties as and when such Taxes are due and payable, except to the extent being Properly Contested. The provision for Taxes on the books of each Borrower and each of its Subsidiaries are adequate for all years not closed by applicable statutes, and for its current Fiscal Year. The Borrowers are not aware of any proposed matcrial Tax assessment against any Loan Party.
4.19 Brokers.
There are no claims against any Borrower or amounts owing or to be owed by any Borrower for brokerage commissions, finder's fccs or investment banking or similar fees in connection with the Transactions. Each of the Borrowers hereby indemnities the Agents and the
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PRELIMINARY DRAFT
Lenders against, and agrees that it wil hold the Agents and the Lenders harmless from, any claim, demand or liability for any such commission or broker's or finder's fccs or investment banking or similar fees alleged to have been incurred in connection herewith or therewith, and any claim, demand or liability relating thereto, and any expenses (including reasonable fees, expenses and disbursements of counsel) arising in connection with any such claim, demand or
liability.
4.20 Intellectual Property.
Each Borrower and each of its Subsidiaries owns or has the lawful right to use all
Intellectual Property necessary for the present and planned future conduct of its business without, to Borrowers' Knowledge, any conflct with the rights of others except to the extent the failure to
own or possess any such right to use or any such conflct could not reasonably be expected to
result in a Material Adverse Effect; there is no objection to, or pending (or, to the Borrowers' Knowledge, threatened) claim with respect to, such Borrower's or any of its Subsidiaries' right to
use any such Intellectual Property (except to the extent any such objection or claim could not reasonably be expected to result in a Material Adverse Effect and such orrower is not aware of aiiy grounds for challenge or objection thereto; and, except as may be disclosed on Schedule 4.20
hereto, none of the Borrowers nor any of their Subsidiaries pay any royalty or other
compensation to any Person for thc right to use any Intellectual Property (other than with respect to off-the-shelf or prepackaged software). All patents, trademarks, service marks, tradenames,
copyrights, licenses and other similar rights of the Loan Parties, as of
the date hereof, are listed
on Schedule 4.20 hereto, to the extent they are registered under any Applicable Law or applieations for rcgistration thereof have been made under any Applicable Law.
4.21 Governmental Authorization.
Each Borrower and each of its Subsidiaries has, and is in good standing with rcspect to, all Governmental Authorizations necessary to continue to conduct its business as heretofore or proposed to be conducted by it and to own or lease and operate its properties as now owned or leased by it, except where the failure to have such Governmental Authorization could not reasonably be expected to have a Material Adverse Effect.
4.22 Compliance with Laws.
Each Borrower, cach of its Subsidiaries, cach Project and the use and operations of each
Project are in compliance in all material respects with, the provisions of all Applicable Laws
(othcr than Environmental Laws) and there have been no citations, notices or orders of noncompliance issued to such Borrower or any of the Subsidiaries under any such law, rule or
regulation. Each Borrower and each of its Subsidiaries is in compliance with all Environmental
Laws applicable to it and properties owned by it except to the extent failure to be in compliance could not reasonably be expected to have a Material Adverse Effect.
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4.23 urdensome Contracts.
None or the Borrowcrs nor any of their respective Subsidiaries is a party or subject to any contract, agreement, or charter or other corporate restriction, which has or (after giving effect to
(he transactions contemplated by this Agreement) could be reasonably expected to have a

Material Adverse Effect.
4.24 Litieation.
Except as sct forth on Schedule 4.24 hereto, there are no actions, suits, proceedings or investigations pending or, to the Borrowers' Knowledge, threatened on thc date hereof against or
affecting the Borrowers or any of their Subsidiaries, or the business, operations, properties, prospects, profits or condition of the Borrowers or any of their Subsidiaries, (i) which relate to any of the Loan Documents or any Material Contract, or any of the transactions contemplated thereby or (ii) which could reasonably be expected to have a Material Adverse Effect. Neither the Borrowcrs nor any of their Subsidiaries is in default on the date hercof with respect to any ordcr, writ, injunction, judgmcnt, decrec or rule of any court, Governmental Authority or
arbitration board or tribunaL.
4.25 No Defaults.
No event has occurred and no condition exists which would, upon or after the execution and delivery of this Agreement or such Borrower's pedonnance hereunder, constitute a Default or an Event of Default. None of the Borrowers nor any of their respective Subsidiaries is in default, and 110 event has occurred and no condition exists which constitutes or which with the passage of time or the giving of notice or both would constitute a default, (x) in the payment of any Indebtedness of such Borrower or any Subsidiary to any Person which would result in a
Default or Event of Default hereunder or that could reasonably be expected to have a Material
Adverse Effect or (y) under any Material Contract.

4.26 Leases.
Schedule 4.26 hereto is a complete listing of each Capitalized Lease and Operating Lease of each Borrower and each of its Subsidiaries on the date hereof that provides for payments in
excess of $7,500,000 over the term of such Capitalized Lease or Operating Lcasc. Each
the terms of each of its respective Capitalized Leases and Operating Leases and there is no basis upon which the lessors under any such leases could terminate the same prior to the scheduled maturity or stated termination date thereof or declare such Borrower or any of its Subsidiaries in default thereunder,
Borrower and each of its Subsidiaries is in substantial compliance with all of
which, in any case, would result in a Default or Evcnt of Default hereunder or that could
reasonably be expected to have a Material Adverse Effect.
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4.27 Employee Benefit Plans.
A. Except as disclosed on Schedulc 4.27 hereto, neither any of thc Borrowers nor
any of
their Subsidiaries nor any ofihcir ERISA Affliuies maintains, contributes or participates
the date hereof. Each of
in or may incur any liability under any Pension Plan as of
the Borrowers
and their Subsidiaries and cach of thcir ERISA Affiliates are in compliance in all material respects with all applicable provisions and requircments of ERISA and the Intcrnal Revenue
Code with rcspcct to cach Pension Plan and Borrower Pcnsion Plan, and have performed all ther
obligations under each Pension Plan and Borrower Pension Plan, except those where failure to perform such obligations could not reasonably be expected to result in material liability to any Borrower or any Subsidiary. With respect to each Pension Plan and Borrowcr Pcnsion Plan, no material liability to the PBGC (other than requircd premium payments), thc Internal Revcnue Service, any such Pension Plan or Borrower Pension Plan or any trust established undcr Title iv of ERISA has becn, or is cxpcctcd by any of (he Borrowcrs or any of their Subsidiaries or any of their ERISA Affliates to be, incurred by any of the Borrowers or any of their Subsidiaries or any of their ERISA Affiliates.
B. No ERISA Evcnl has occurred or could reasonably be expected to occur which has resulted or is reasonably likely to result in any matcrial Iability to any Borrower or any Subsidiary. No facl or situation that could rcasonably bc expected to have a Material Adversc
Effect exists with respect to any Pension Plan or Borrower Pension Plan.
C. Except as eould not reasonably be expected to result in materal liability to any

Borrower or any Subsidiary, no Borrower nor any of their Subsidiarics maintains or contributes to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that provides health or welfare bcnefits (through the purchase of insurance or otherwise) for any retired or fonner employees of such Borrower or any Subsidiary other than as required under Section 4980B of the Internal Revenue Code or Part 6 of Subtitle B of Title 1 or ERISA.
D. Except as could not reasonably bc expected to result in material liability to any

Borrower or any Subsidiary, no Pension Plan has any "unfundcd benefit liability" as defined in Section 4001 (a)( 18) of ERISA (but excluding from the definition of "current value" of "assets" of such Pension Plan, accrued but unpaid contributions).
E. Except as could not reasonably be expected to result in material liability to any Borrower or any Subsidiary, each Borrower and iis Subsidiaries and each ERISA Affliatc has
complied with the requirements of Section 515 of ERISA with respcct to each Multiemployer
Plan and is not in "dcfault" (as defined in Section 4219(c)(5) of ERISA) with respect to
payments to a Multiemployer Plan. Neither any of the Borrowers nor any of their Subsidiaries nor any of their ERISA Affliates has incurred or could reasonably be expected to incur any withdrawal liability in connection with a Multiemployer Plan.
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4.28 Trade Relations.
There exists no actual or, to the Borrowers' Knowledge, threatened termination,
cancellation or matcriallimtation of, or any materially adverse Modification or change in, the business relationship between any Borrower or any Subsidiary and any customer or any group of cUstomers whose purchases individually or in the aggregate are material to the business of the Loan Parties, taken as a whole, or with any material supplier, contractor, builder or group of suppliers, contractors or builders and there exists no condition or state of facts or circumstances which could reasonably be expected to have a Material Adverse Effect or prevent such Borrower or any Subsidiary from conducting such business after the consummation of the transactions contemplated by this Agreement in substantially the same manner as it has heretofore been conducted.
4.29 Labor Relations.
Except as described on Schedule 4.29 hereto, neither the Borrowers nor any of their
Subsidiaries is a party to any collective bargaining agreemcnt on the date hereof. On the date
hereof, there arc no material grievances, disputes or controvcrsics with any union or any other organization of the Borrowers and their Subsidiaries.
4.30 Not a Rel!ulatcd Entity.

No Loan Party is (i) an "investment company" or a "person directly or indirectly
controlled by or acting on behalf of an investment company" within the meaning of the
Investment Company Act of 1940; (ii) a "holding company," or a "subsidiary company" of a "holding company," or an "affliatc" or a "holding company" or of a "subsidiary company" of a "holding company," within the meaning of the Public Utility Holding Company Act of i 935; or (iii) subject to regulation under the Federal Power Act, the Interstate Commerce Act, any public utilities code or any other Applicable Law regarding its authority to incur Indebtedness.
4.31 Murein Stock.
Neither any Borrower nor any Subsidiary is engaged, principally or as one of its importnt activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.
4.32 No Material Adverse Chan2c.
Since the EffeclIve Date, no event or change has occurred that has caused or evidences or
could reasonably be expected to cause or evidence, either individually or in the aggregate, a

Material Adverse ElTecl.
4.33 Environmental Matters.
Except as disclosed on Schedule 4.33 hereto, as of
the date hcreor:
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(i) Each Borrower, each of its Subsidiaries (including, without limitation, all
operations and conditions at or in the Real Property Assets), and, to the Borrowers'
Knowledge, each of
the tenants under any leases or occupancy agreements affecting any
portion of any Real Properly Assets, are in compliance with all applicable Environmental Laws (which compliance includes, but is not limited to, the possession by any Borrower,
each of its Subsidiaries and each of such tenants of all penn
its and other Governmental
Authorizations required under applicable Environmental Laws, and compliance with the tenns and conditions thereof), except where failure to be in compliance could not reasonably be expected to result in a Material Adverse Effect. Neither any Borrower nor any of its Subsidiaries, nor, to the Borrowers' Knowledge, any tenants under any leases or occupancy agreements affecting any portion of the Real Property Assets has received any communication, whether from a Governmental Authority, citizens group, employee or otherwise, alleging that any Borrower, any of its Subsidiaries, or any such tenant is not
in such compliance, and to the Borrowers' Knowledge there are no past or present
actions, activities, circumstances conditions, events or incidents that could reasonably be expected to prevent or interfere with such compliance in the future, except in each case to the extent the failure to be in compliance could not reasonably be expected to result in a Material Adverse Effect.
(ii) There is no Environmental Claim pending or, to the Borrowers'
Knowledge, threatened against any Borrower or any of its Subsidiaries or, to the
Borrowers' Knowledge, against any Person whose liabilty for any Environmental Claim any Borrower or any of its Subsidiaries has retained or assumcd either contractually or by
operation of law, in each such case which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
(iii) There are no past or present actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the Release or presence of any

Hazardous Material, which could reasonably be expected to forni the basis of any
Environmental Claim against any Borrower or any of its Subsidiaries, or to the Borrowers' Knowledge, against any Person whose liabilty for any Environmental Claim any Borrower or any of its Subsidiaries has retained or assumed either contractually or by operation of law, in each such case which could reasonably be expected to result in a
Material Adverse Effect.
Borrowers' Knowledge, no other Person has placed, stored, deposited, discharged, buried, dumped or disposed of Hazardous Materials on, beneath or adjacent to any
property currently or formerly owned, operated or leased by any Borrower or any of its
Subsidiaries, in each case, which, individually or in the aggregate, which could
(iv) Each Borrower and each of its Subsidiaries have not, and to the
reasonably bc expected to result in a Material Adverse Effect.
(v) No Lien in favor of any Person relating to or in connection with any

Environmental Claim has been filed or has been attached to any Real Property Asset.
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(vi) Without in any way limiting ihe generality of the foregoing, ex.cept as
would not reasonably be expected to result in a Material Adverse Effect, none ofthe Real
Property Assets contain any: underground storage tanks; asbestos; polychlorinated

biphenyls ("PCBs"); underground injection wells; radioactive materials; or septic tanks or waste disposal pits in which process wastewater or any Hazardous Materials have been discharged or disposed.
(vii) The Borrowers have provided to the Lenders all material assessments, reports, data, results of investigations or audits, and other information that is in the
possession of or reasonably available to the Borrowers regarding environmental matters pertaining to or the environmental condition of the business of the Borrowers and their Subsidiaries, or the compliance (or noncompliance) by the Borrowcrs or any of their Subsidiaries with any Environmental Laws.
4.34 Material Contracts.
A. As of the Effective Date, the Borrowers and their Subsidiaries are not part to or bound by any contract, agreement, commitment or other document (or any related series of contracts, agreements, commitments or documents) that contcmplates (x) the payment by the
Cash or other consideration with a value exceeding an aggregate amount of $10,000,000 to a Person that is not a Loan Part or (y) the receipt by the Borrowers or any of their Subsidiaries of Cash or other consideration with a value exceeding an aggregate amount of $1 0,000,000 from a Person that is not a Loan Pary, other than the Material Contracts.
Borrowers or any of their Subsidiarics of
B. The Borrowers have heretofore furnished to the Administrative Agcnt a true, correct and complete copy of each Matcrial Contract, and all exhibits, schedules and
Modifications thereto. The Material Contracts have not been Modified or clarified except as set forth on Schedule 4.34.
C. Each Material Contract, as of the date hcreof, is in full force and effect and
constitutes a legal, valid and binding obligation of the applicable Borrower Entity, and, to the Borrowers' Knowledgc, each othcr party thereto.
D. No orrower Entity, as of
the date hercof, is in default or breach (with or without
the giving notice or the passage of time) of any Material Contract. Except as set forth on
Schedule 4.34. the Borrowers have no knowledge that any other party is in default or breach of any Material Contract, or the existence of any conditions which, with the giving of notice or thc the the date hereof, none of passage of time, or both, could constitute a default or breach. As of material rights and privileges under the Material Contracts inuring to any Borrower Entity has
lapsed, and neither Clark County nor any other party has any right as of the date hereof to
terminatc any of
the Material Contracts.
E.
As of thc date hereof, each applicable Borrower Entity has paid all fees, made all
dedications, posted all bonds and other security, completed all improvements and otherwise
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pcrformed all obligations required to be performed by the applicable Borrower Entity under the Material Contracts in accordance therewith to the date hereof.
4.35 Utilitics.
As of the date hereof, all material water, sewer, gas, electric, telephone and drainage facilities and all other utilities required (by Applicable Law or otherwise) to be installed for the current stage of development and the current usage of each Project are installed to the propert Iincs of each Project, are all connected and operating pursuant to valid permits, are adequate to service the current usage of eaeh Project, and arc connected to each Project by means of one or more public or private easements extending from such Project to one or more public streets, public righls~of-way or utility facilities. The Borrowers reasonably expect to obtain on a timely basis in the Ordinary Course of Business all water, sewer, gas, electric, telephone and drainage
facilties and all other utilities (if not already so obtained) required (by Applicable Law or
otherwise) for, and adequate to service, the intended full usage, development and operation of
each Project.
4.36 Entitlements.
A. The Loan Parties have (i) all Entitlements necessary for the current stage of
development and the current usage of each Project, and (ii) except as set forth in Part A of Schcdule 4.36, all Major Entitlcments necessary to permit the full development and usage of
each Project (collectively, the "xistinl! Entitlements"). All of
the Existing Entitlements are in full force and effect. All Major Entitlements that are Existing Entitlement" are set forth in Part of Schedule 4.36. All the Existing Entitlements are vested in the Real Property Collateral, and
the consummation of the transactions contemplated hereby shall not affect the same. There are
110 unperfonned obligations or conditions with respect to the effectiveness of any of the Existing
the Effcctive Date, and there are no the date hereof, no Borrower Entity is aware of any defects or actual or potential actions, challenges or proceedings by any third party or Governmental Authority with respect to the Existing Entitlements. No Borrower has receivcd notice of any changes to any of the Existing Entitlements; all of thc material documents relating to the Major Entitlements that are Existing Entitlements are identified in Part B of Schedule 436 (collectively, thc "Entitlement Documents"), and there are no other material documents relating to the Existing Entitlements other than those set forth on Schedule 4.36.
Entitlements that were or are required to be completed as of material uncured defaults or breaches under any of the same. As of
B. The Borrowers reasonably believe that all Entitlements necessary to permit the
full development and usagc of each Project have been obtained or will be obtained on a timely
basis in the Ordinary Course of Business, and no Borrower is aware of any actual or potential
adverse actions, challenges or proccedings by any third party or Governmental Authority with
respect to any such Entitlements.
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SECTION 5. AFFIRMATIVE COVENANTS

Each of the Borrowers covenants and agrees (nat, so long as any of tne Commitments
hereunder shall remain in effect and until payment in full or all of the Loans and other
Obligations, each of
the Borrowers shall and shall cause each of its Subsidiaries to:
5.1 Visits and Inspections.

Permit representatives of
the Administrative Agent, from time to time, as often as may be
reasonably requested, but only during nonnal business hours and (except when a Default or Event of Default exists) upon reasonable prior notice to such Borrower, to visit and inspect the
properties of such Borrower and each of its Subsidiaries, conduct appraisals of a Borrower's
properties, inspect, audit and make extracts from each Borrower's and each of its respective
Subsidiary's books and records, and discuss with its offcers, its employees and (with a
Responsible Offcer) its independent accountants, such Borrower's and each of its Subsidiary's business, financial condition, business prospects and results of operations. Representativcs of the Borrowers (including, without limitation, the Borrowers' accountants) shall be authorized to accompany the Administrative Agent (or representative thereof) on any such visit or inspection,
but such authorization shall in no manner be deemed to be a requirement or condition of the
Administrative Agent's visits or inspections, and to the extent any of he Borrowers' representatives accompany the Administrative Agent on any visit or audit, such Persons shall in no manner hinder or delay the audits or inspections of the Administrative Agent. Rcpresentatives
of each Lender shall be authorized to accompany the Administrative Agent on each such visit
and inspection and to participate with the Administrative Agent therein, but at their own expense, unless a Default or Event of Default exists. Neither the Administrative Agcnt nor any Lcnder shall have any duty to make any such inspection and shall not incur any liabiliiy by reason of its failure to conduct or delay in conducting any such inspection.
5.2 Notices.
obtaining knowledge of
Notify the Administrative Agent and Lenders in writing, promptly after any Borrower's the following:
(i) the institution of, or written threat of, any action, suit, proceeding,
governmcntal investigation or arbitration against or affecting the Borrowers or their Subsidiaries and not previously disclosed, which action, suit, proceeding, governmental investigation or arbitration (a) exposes, or in the case of multiple actions, suits, proceedings, governmental investigations or arbitrations arising out of the same general
allegations or circumstances expose, such Persons, in the Borrowers' reasonable
judgment, to liability in an amount aggregating $7,500,000 or (b) seeks injunctive or other relief which, if obtained, could reasonably be expected to have a Material Adverse Effect, providing such other information as may be reasonably available to enable Administrative Agent and its counsel to evuluate slIch maUers; the Borrowers, upon
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request of the Administrative Agent, shall promptly give written notice of the status of any action, suit, proceeding, governmental investigation or arbitration;
the Borrowers or their Subsidiaries may its property or facilities, and the expiration of any labor contract to which it is a part or by which it is bound, which could reasonably be expected to have a Material Adverse Effect;
(ii) any labor dispute to which any of walkouts relating to any of
become a party, any strikes or
(iii) any default by any of the Borrowers or their Subsidiaries under, or
tcrmination of, any Matcrial Contract, or any note, indenture, loan agreement, mortgage, Icase, deed, guaranty or other similar agreement relating to any Indebtedness of such
Person execeding $5,000,000 (or receipt of any notice claiming such a default or
termination or giving notice thereof);

(iv) termination, suspension or revocation of any Entitlements which could
reasonably be expected to have a Material Adverse Effect;

(v) the existence of any (a) Default, (b) Event of Default or (c) event,
circumstance or change that has caused or could be reasonably expected to cause, eithcr in any case or in the aggregate, a Material Adverse Effect;
(vi) the occurrence of or forthcoming occurrcnce of any ERISA Event or the
receipt by any Borrower or any ERISA Affliate of notice from a Muhiemployer Plan
sponsor concerning an ERISA Evcnt;
(vii) any judgmcnt against any of the Borrowers or their Subsidiaries in an

amount exceeding $5,000,000;
(viii) any violation or asserted violation by any of the Borrowers or their Subsidiaries of any Applicablc Law (including ERISA, OSHA, FLSA, or any
Environmental Laws), the adversc resolution of which could reasonably be expected to havc a Matcrial Advcrse Effect or result in liability of such Borrower or Subsidiary in an amount in excess of$5,000,000;
(ix) any Release on any property owned or occupied by any of the Borrowers
or thcir Subsidiaries if such Release could reasonably be expected to require Cleanup

under Environmental Laws at an expected cost of greater than $5,000,000;
(x) the discharge of such Borrower's indepcndent accountants or any
withdrawal of resignation by such independent accountants from their acting in such

capacity; in addition, each Borrower shall give the Administrative Agent at least ten (10)
Busincss Days' prior written notice of any change in any Borrower's or Subsidiary
Guarantor's chief exccutive offce, legal name or jurisdiction of organization;
(xi) copics orany Tax assessments in an amount in excess of
$5,000,000; and
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(xii) such other information and data with respect to such Borrower or any of
its Subsidiaries as from time to time may be reasonably requested by the Administrative Agent or any Lender.
5.3 Financial Statements and Other Reports.
Maintain all necessary and proper books and records including a system of accounting established and administered in accordancc with sound business practiccs to permit preparation
of financial statements in conformity with GAAP. Deliver to the Administrative Agent for
distribution to each Lcnder:
(i) Ouarterly Financials: as soon as available and in any event within fort
five (45) days after the end of each Fiscal Quarter (other than the fourth Fiscal Quarter of any Fiscal Year), commencing with the Fiscal Quarter cnding March 31, 2010, (a) the respective combined consolidated balance sheets of the Borrowers and their respective Subsidiaries and Affliates, as at the cnd of such Fiscal Quarter and the related combined consolidated statemcnts of income and statement of cash flows of the Borrowers and their respectivc Subsidiaries and Aftliatcs tor siich Fiscal Quartcr and for the period from the beginning of the thcn current Fiscal Year to the end of such Fiscal Quarter, setting forth, (x) supplemental consolidating schedules reflecting (I) thc consolidated balance sheets of the Borrowers and their Subsidiaries as at the end of such Fiscal Quarter, and the related consolidated statements of income and statement of cash flows ofihe Borrowers and their Subsidiaries for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, (2) eliminations for such period and (3) consolidating schedules for such period and, (y) in thc case of statements of income only, in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year, all prepared in accordance with GAAP and in reasonable detail and
eertificd by the chief financial offcer of each Borrower that they fairly present, in all
material respects, the financial condition of the Borrowers and their respective
Subsidiaries and Aftliates, as at the dates indicated and the results ofthcir operations and their cash flows for the periods indicated, subjcct to changes resulting from audit and normal year-end adjustments; and (b) a narrative rcport describing the opcrations ofthc Borrowers and their Subsidiaries, in cach case, taken as a whole, for such Fiscal Quarter and for the period froin the beginning of the then current Fiscal Year to thc end of such Fiscal Quarter, which report shall include a summary describing (I) the number of real propert parcels sold during such Fiscal Quarter with corresponding revenue and average price calculations, (2) the number of real property parcels constituting inventory backlog
at the end of such Fiscal Quarter with corresponding revenuc and average price
calculations, (3) by subdivision, the number of real property parcels sold to date on a
cumulative basis, and the remaining number of real propert parcels constituting inventory, and (4) the number of Homesites completed and under conslruetion at the end
of such Fiscal Quarter;
(ii) Year~End Financials: as soon as availablc and in any evcnt within ninety
(90) days after the end of cach Fiscal Year, (ll) the respective audited combincd
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consolidated balance sheets of the Borrowers and their respective Subsidiaries and
Affliates, as at thc end of such Fiscal Year and the related audited consolidated and
unaudited consolidating statements of income and statement of cash flows of each for
such Fiscal Year (which shall also contain reviewed but unaudited supplemental
consolidating schedules reflecting (1) the consolidated balance sheets of thc Borrowers
and their Subsidiaries as at the end of such Fiscal Year, and the related consolidated
statements of income and statement of cash flows of the Borrowers and their Subsidiaries
for such Fiscal Year, (2) the consolidated balance sheets of
Subsidiaries and Affliates of
any Borrower that arc not Loan Parties for such Fiscal Year and the related consolidated statements of ineome and statement of cash flows of the Subsidiaries and Affiiates of any Borrower that are not Loan Parties for such Fiscal Year, (3) eliminations for such
period and (4) consolidating schedules for such period, setting forth, in the case of statements of income only, in comparative form the corresponding figures for the
previous Fiscal Year, all prepared in accordance with GAAP and in reasonable detail and
certified by the chief financial offcer of each Borrower that they fairly present, in all
material respects, the financial condition of the Borrowers and their respective
Subsidiaries and Affliates, as at thc dates indicated and the results ofthcir operations and their cash flows for the periods indicated; (b) a narrative report describing the operations of the Borrowcrs and their Subsidiaries, in each case, taken as a whole, for such Fiscal Year, which rcport shall include a summary describing (1) the number of real property
parcels sold during such Fiscal Year with corrcsponding rcvenue and average price
calculations, (2) the number of real property parcels constituting inventory backlog at the end of such Fiscal Year wIlh corresponding revenue and average price calculations, (3) by subdivision, the number of real property parcels sold to date on a cumulative basis, and thc remaining number of real property parecls constituting inventory, and (4) the
number of Homesites completed and under construction at the end of such Fiscal Year;
such combincd consolidated financial statements ofthc Borrowers and their respective Subsidiaries and Affiliates, a report thereon of independcnt certified public accountants of recognized national standing selected by the Borrowers and reasonably satisfactory to the Administrative Agent, which report shall be unqualified as to going concern and scope of audit and contains no other material qualification or exception, and shall state that (x) such consolidated financial statements fairly prescnt, in all material respects, the combined consolidated financial position of the Borrowers and their respective Subsidiaries and Affliates as at the dates indicated and the results of their opcrations and their cash flows for the periods indicated in conformity with GAAP
and (c) in thc case of
applied on a basis consistent with prior years (except as otherwise disclosed in such
financial statements) and that the audit by such accountants in connection with such
combined consolidated financial statements has been made in accordance with generally accepted auditing standards and (y) such schedules have been subject to audit procedures by such accountants;
(ii) Offcer's Certificates; Compliance Certificates: together with each
dclivery of financial statements of the Borrowers and their respective Subsidiaries and Al1liates pursuant (a) to subdivisions (i) and (ii) of this subsection 5.3, an Officer's
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PRELIMINARY DRAFT
SUBJECT TO MODI
FICA TION
Certificate of the Borrowers stating that the signer has reviewed the terms of this
Agreement and has made, or caused to be made under his or her supervision, a review in reasonable detail of the transactions and condition of the Borrowers and their respective Subsidiaries iind Affliates during the accounting period covered by such financial statements and that such review has not disclosed the existence during or at the end of such accounting period, and that the signer did not have knowledge of the existencc as at the date of such Offcer's Certificate, of any condition or event that constitutes a Default or Event of Default, or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Borrowers have taken, are taking and propose to take with respect thereto; and (b) to subdivisions (i) and (ii) of this subsection 5.3, a Compliance Certificate demonstrating in reasonable detail compliance
during and at the end ofthc applicable accounting periods with the covenants set forth in
subsections 6.6 and 6. I 6.
(iv) rrntentionally Omittedl
(v) Intcntionally Omittedl
(vi) Accountants'Reports: promptly upon rcceipt thcrcof(unless restricted by applicable professional standards), copies of all reports submiUcd to any Borrower, its Subsidiarics and/or Affiliates by a national indepcndent certified public accountants in connection with each annual, interim or special audit of the financial statements of such Borrower, its Subsidiaries, and Affliates made by such accountants, including, without
limitation, any comment letter submitted by such accountants to management in

connection with their annual audit;
(vii) f1ntentionally Omittedl
(viii) Casualty: promptly upon the occurrence of any casualty involving any
property of the Borrowers or any of their Subsidiaries involving a loss that could reasonably be expected to exceed $5,000,000, written notice with sufficient detail
dcscribing the
casualty and the extent to which any losses resulting from such casualty
wil be covered by insurance;
(ix) Appraisal Updates: together with each delivery of financial statements of
the Borrowers and their respective Subsidiaries and Affliates pursuant to subdivision (ii) of this subsection 5.3, an Acceptable Appraisal that provides an Appraised Value of the remaining portion of all Real Property Collateral, effective as of the last day of the preceding Fiscal Year; provided. that, in addition to the foregoing, Administrative Agent wil be entitled to obtain, at Borrowers' expense, additional Acceptable Appraisals of any such Real Property Collateral (or any portion thereof) if (i) an Event of Default exists, or (ii) an appraisal is required under applicable Law;
(x) Budgets: as soon as practicable and in any event no later than ninety (90)
days after the end of each Fiscal Year, a budget for the next succeeding Fiscal Year of
the
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Borrowers in form and substance reasonably satisfactory to the Requisite Lenders,

including, without limitation, forecasted quarterly financial results of the Borrowers and
their Subsidiaries for such Piscal Year, togcthcr with an Offcer's Certificate
demonslmting compliance with the covenants set forth in subsection 6.6, prcpared on a pro forma basis to give effect to such foreeastcd financial results for such Fiscal Year and an explanation of the assumptions on which such forecasts are based and such other information and projections as the Required Lenders may rcasonably requcst;
(xi) Events of Default: promptly upon any Responsible Offcer obtaining
knowledge (a) of any condition or event that constitutes a Default or an Evcnt of Default, (b) that any Person has given any written notice to the Borrowers or any of their
Subsidiaries or taken any other action that could reasonably be expected to have a material adverse effect on the Borrowers or any of their Subsidiaries with respect to a
claimcd default or event or condition of the type referred to in subsection 7.6 or (c) of
the
occurrence of any cvent or change that has caused or evidences or could be reasonably
expected to cause or evidence, either individually or in the aggregate, a Material Adverse
Effect, an Offcer's Certificate specifying the naturc and period of existence of sueh
condition, cvent or change, or specifying the written notice given or action taken by any such Person and the nature of such claimed Default, Event of Default, default, cvent or condition, and what action the Borrowers (or applicable Subsidiarics) have taken, are taking and proposc to take with respect thereto;
(xii) Litigation or Other Proceedings: (a) promptly upon any Responsible
Offcer obtaining knowledge of (x) the institution of, or written threat of, any action, suit, proceeding (whether administrative, judicial or otherwise), Environmental Claim,
governmental investigation or arbitration against or affecting the Borrwers or any of
their Subsidiarics or any property of the Borrowers or any of their Subsidiarics

(collcctively, "Proceedin2s") not previously disclosed in writing by the Borrowers to the Lenders or (y) any material developmcnt in any Proceeding that, in any case:
(a) could reasonably be expected to have a Material Adverse Effect; or
(b) seeks to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions contemplated hereby;
written notice thereof together with such other infonnation as may be reasonably avaiIablc lo the Borrowers and as the Borrowers and their counsel shall reasonably
determine would not jeopardize the aUorney~c1ient privilege with respect to such
Proceeding, to enable the Lenders and their counsel to evaluate such matters; and (b) within foriy~five (45) days after the end of each Fiscal Quarter of the Borrowers, a
schedule of all Procecdings involving an alleged liability of, or claims against or

affecting, the Borrowers or any of their Subsidiaries cqual to or grcater than $5,000,000 and promptly after request by the Administrative Agent such other information as may be reasonably rcquested by the Administrative Agent to enable the Administrative Agent and
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its counsel to eV31uate any of such Proceedings; provided, however, that thc Borrowers
and their counsel may withhold information if in thcir reason3ble determination,
disclosure of such information would jeopardize the atlorncy~client privilege with rcspccl to such Proceeding;
(xiii) ERISA Events: promptly upon thc Borrowcrs becoming aware of the
occurrence of any ERISA Event that could reasonably be expected to have a Material Adverse Effect, a written notice specifying the nature thereof, what action the Borrowers or any ERISA Affliate has taken, is taking or proposes to take with respect thereto and,
whcn known, any action taken or threatcned by the Internal Revenue Service, the
Department of Labor or the PBGe with respect thereto;
(xiv) ERISA Notices: with reasonable promptness, copies of (a) all written notices received by the Borrowers or any ERISA Atlliale from a Multiemployer Plan
sponsor concerning an ERISA Evcnt; and (b) such other documents or governmental
reports or fiings relating to any Pension Plan or Borrower Pcnsion Plan as the
Administrative Agcnt shall rcasonably request;
(xv) Insurance: as soon as practicable and in any event by the last day of each Fiscal Year, a certificate in form and substance satisfactory to the Administrative Agent outlining all material insurance coverage maintained as of the date of such report by the
Borrowers and their Subsidiaries and all material insurance coverage planned to be
maintained by the Borrowers and their Subsidiaries in the immediately succeeding Fiscal
Year;
(xvi) Environmental Audits and Reoorts: promptly upon their becoming
available, copics of all environmental audits and reports, whethcr prepared by personnel of the Borrowers or any of their Subsidiaries or by independent consultants, with respect to environmental matters affecting any property owned or operated by the Borrowers or the Borrwers or its their Subsidiaries or which relate to any Environmental Liabilities of
Subsidiaries, to the extent reflecting any matters which, in any such casc, could
reasonably he expected to result in a Material Environmental Liability;
(xvii) Regulatory Notices: as soon as practicable, notification of any change in any law, rule or regulation relating to the business of the Borrowers and their Subsidiaries which caii ld reasonably bc expected to have a Material Adverse Effect;
(xviii) Material Contracts: (a) concurrently with each delivery of quarterly

financial statcments, and within forty-five (45) days after the end of each Fiscal Year, a report indicating any Material Contract that terminated or expired, or that was Modifed in any manner which is malerially adverse to the Borrowers and their Subsidiaries during the quarterly period then last ended and (b) promptly afcr any notice or other communication is delivered by any party to any Material Contract pursuant thereto or in respect thereof relating to (x) any financial matter or other maHer that could reasonably be expected to have adverse financial conscquences to the Borrowers or any of thcir
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Subsidiaries in excess of $$5,000,000 or (y) any othcr non~financial matter which could
reasonably be expected to have material adverse consequences to the business of the

Borrowers and their Subsidiaries (whether or not constituting a Material Adverse Effect), notice and a copy thereof;
(xix) Intentionally Omittedl
(xx) Monthly Sales Reports: within Jive (5) Business Days after the end of each month, deliver a sales report in form and substance reasonably acceptable to the
Administrative Agent setting forth a summary describing (I) the number of
real property
parcels sold during such month with corresponding revenue and average price
calculations, (2) the numbcr of real property parcels constituting inventory backlog at the end of siich month with corresponding revenue and average price calculations, (3) by subdivision, the number of real propert parcels sold to date on a cumulative basis, and the remaining number of real property parcels constituting inventory, and (4) the number
of Homesites completed and under construction at the end of such month; and
(xxi) Other Information: with reasonable promptness, such other information
and data with respect to the Borrowers or any of their Subsidiaries as from time to time may be reasonably requested by the Administrative Agent or any Lenders, and such other documentation, information and certifications described in subscction 3.IU as from time to time requested by the Administrative Agent or any Lender.
5.4 Corporate Existence.
At all times preserve and kecp in full force and effect its organizational existence (except to the extent permitted by subsection 6.7) and all rights and franchises material to the business of the Borrowers and their Subsidiaries (on a consolidated basis).
5.5 Payment of
Taxes and Claims; Tax Consolidation.
A. Pay all income and other material taxes, assessments (including, without
limitation, Special Taxes) and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or franchises before any penalty accrues thereon, and all material claims (including, without limitation, claims for labor, services,
materials and supplies) for sums that have become due and payable which, if unpaid, might become a Lien (other than a Permitted Encumbrance) upon any of its properties or assets; provided that no such tax, charge or claim need be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP shall have been
made therefore.
B. Not file or consent to the fiing of any consolidated, combined or other similar
the Borrowers) (it being expressly understood that each direct and indirect equity holder of the Borrowers may
income tax rcturn with any Person (other than the Borrowers and Subsidiaries of
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file income tax returns that include such equity holder's sharc of the financial results of the
Borrowers and their Subsidiaries as may be required under Applicable Law).
5.6 Maintenance of Proper
tics; Insurance.
Maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all material properties used in the business of the Borrowers and their
Subsidiaries and from time to time will make or cause to bc made all appropriate repairs,
renewals and replacements thereof. Maintain or cause to be maintained, with financially sound and reputable insurers, insurance with respect to its properties and business and the properties and businesses of its Subsidiaries against loss or damage of the kinds and with respect to liabilty substantially similar to such insurance maintained as of the Effective Date. Each such policy of casualty insurance covering damage to or loss ofpropeity shall name the Collateral Agent for the benefit of the Secured Parties as additional insured and as the loss payee thereunder for all losses, subject to application of proceeds as required by subsection 2.4B(iii)(c), each such policy of liability insurance coverage shall name the Collatcral Agent, for the benefit of the Secured
Parties, 3S additional insureds, and all such policies of insurance shall provide for at least thirt
(30) days' prior written notice to the Collateral Agent of any Modification or cancellation of such policy.
5.7 Lender Meetine-.
Upon the request of the Administrative Agent, participate in a meeting of the

Administrative Agent and the Lenders at least once during each Fiscal Year (and wil participate
in such other meetings at such other times as the Borrowers and thc Administrative Agent may
agree) to be held at the Borrowers' corporate offces (or such other location as may be agreed to by the Borrowers and the Administrative Agent) at such time as may be agreed to by the Borrowers and the Administrative Agent.
5.8 Compliance with Laws
Comply with the requirements of all Applicable Laws, noncompliance with which, individually or in the aggregate with other non-compliances, could reasonably be expected to
cause a Material Adverse Effect.
5.9 Environmental Disclosure and Inspection.
A. Exercise all due diligence in order to comply and cause (i) all tenants or
subtenants under any leases or occupancy agreements affecting the Real Property Assets, (ii) all contractors, engineers, architects and similar vendors and contractors and (iii) all other Persons on or occupying the Real Property Assets, to comply with all Environmental Laws, except for
any !iuch noncompliance which could not reasonably be expected to result in a Material
Environmental Liability.
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PRELIMINARY DRAFT SUBJECT TO MODIFICA lION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
B. The Borrowers agree that the Administrative Agcnt may, from time to time,
retain, at the Borrowers' expense, an independent professional consultant reasonably acceptablc to the Borrowers to revicw any report relating to Hazardous Materials prepared by or for the Borrowers and to conduct their own investigation (the scope of which investigation shall be reasonable based upon the circumstances) of any Real Property Asset currently owned, leased, operated or used by the Borrowers or any of their Subsidiaries, if (x) a Default or an Event of
Default shall have occurred and be continuing or (y) the Administrative Agent reasonably
belicvcs (I) that an occurrence relating to such Real Property Asset is likely to give rise to an Environmental Liability or (2) that a violation of an Environmental Law on or around such Real Property Asset has occurred or is likely to occur, which could, in either such case, reasonably be
expected to result in a Material Environmental Liability. The Borrowers shall use their
reasonable efforts to obtain for the Administrative Agent and its agents, employees, consultants and contractors the right, upon reasonable notice to the Borrowers, to cnter into or on to the Real
Property Assets currently owned, leased, operated or used by the Borrowers or any of their
Subsidiaries to perform such tests on such property as are reasonably necessary to conduct such a review and/or investigation. Any such investigation of aiiy Real Propert Asset shall be conducted, unless otherwise agreed to by the Borrowers and the Administrative Agent, during normal business hours and, shall be conducted so as not (0 unreasonably interfere with the ongoing operations at any such Real Property Asset.
C. Promptly advise the Administrative Agent in writing and in reasonable detail of

(i) any Release or threatened Release of any Hazardous Materials, or to the Borrowers'
Knowlcdge any tenants under any leases or occupancy agreements affecting any portion of any
Real Property Asset, required to be reported to any federal, state, local or foreign governmental
or regulatory agency under any applicable Environmental Laws, (ii) any and all written
communications with respect to any pending or threatened Environmental Claims and any and
all material written communications with respect to any Release or threatened Release of
Hazardous Materials, in any case, the existence of which has a reasonable possibility of resulting
in a Matcrial Environmental Liability, (iii) any Cleanup performed by the Borrowers, any Subsidiary or any other Person in response to any Hazardous Materials on, under or about any
Real Property Asset, the existence of which has a reasonable possibility of
resulting in a Material
Environmental Liabilty, (iv) any Borrowcr's or any Subsidiary's discovery of any occurrence or condition on any propcrty that could reasonably be expected to cause any Real Property Asset to be subject to any material restrictions on the ownership, occupancy, transferability or use thereof under any Environmental Laws and (v) any written request for information from any
governmcntal agency that suggests such agency is investigating facts, conditions, events or circumstanccs which have a reasonable possibilty of giving rise to a Material Environmental
Liability.
D. Promptly notify the Administrative Agent of (i) any proposed acquisition of
stock,
assets, or property by the Borrowers or any of their Subsidiaries that could reasonably be
expected to expose the Borrowers or any of their Subsidiaries to, or result in, Environmental
Liability that could reasonably be expected to have a Material Adverse Effect and (ii) any
proposcd action to be taken by the Borrowers or any of thcir Subsidiaries to commence
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manufcturing, industrial or other similar opcrations that could rcasonably be expectcd to subject the Borrowers or any of their Subsidiaries to additional Environmcntal Laws, that are matcrially different from the Environmental Laws applicable to the operations of the Borrowers and thcir Subsidiaries as of the Effective Date.
E. At their own expense, providc copies of such documents or information as the
Administrative Agent may reasonably request in relation to any matters disclosed pursuant to this subscction 5.9.
5.10 Remedial Action Rct!ardin2 Hazardous Materials.
Promptly take any and all necessary or prudent Cleanup in connection with the presence, handling, storage, use, disposal, transportation or Release or threatened Release of any
Hazardous Matcrials on, under or affecting any Real Property Asset under Environmental Laws
and Governmental Authorizations. In the event the Borrowers or any of their Subsidiaries undertakes any Cleanup with respect to the presence, Release or threatened Release of any
Hazardous Materials on or aITecting any Real Property Asset, the Borrowers or such Subsidiary
shall conduct and complete such Cleanup in matcrial compliance with all applicable
Environmental Laws, and in accordance with the policics, orders and directives of all federal, state and local governmcntal authorities except when, and only to the extent ihai, the Borrowers' or such Subsidiary's liability for such presence, handling, storage, use, disposal, transportation or Release or threatened Release of any Hazardous Materials is being Properly Contested. In the event Borrowers shall fail timely to commence or cause to be commenced or fail dilgenily to prosecute to compleiion such Cleanup, Agcnt or Lcnders may, but shall not be obligated to, cause such Cleanup to be performed, and all costs and expenses (including, without limitation, attorneys' and consultants' fees, charges and disbursements) thereof or incurred by Agent and Lenders in conncction therewith shall be paid promptly by Borrowers with intcrcst thereon at thc rate equal to 2% per annum in excess of the highest interest rates applicable to Loans at such time and otherwise payable under this Agreement.
5.11 Additional Collateral; Execution of Guaranty and Collateral Documents by Future
Subsidiaries.
A. In the evcnt that any Borrower Entity acquires any property aficr the Effective
Date (other than property described in subscction 5.1 IB and other than personal propert not required to bc perfected pursuant to the Collateral Documents) as to which the Collateral Agent, for the benefit of the Secured Parties, does not have a perfected Lien, promptly (i) notify the Administrative Agent of that fact, (ii) execute and deliver (or cause to be executed and delivered
(and, in the case of any documents, instruments or consents to be executed by a Person that is not a Borrower Entity or any Affliate thereof, use commercially reasonable efforts to obtain)) to the Administrative Agent and the Collateral Agent, such Modifications to the Pledge and Security Agreement and/or each othcr applicable Collateral Document, and take all such further action
and execute all such further documents and instruments as any Agent may deem reasonably
necessary or advisable to grant and perfect in favor of the Collateral Agent, for the benefit of
the
Secured Parties, a First Priority security interest in: (a) any such personal property assets;
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(b) any such owned Real Properly Assets and any development agrccments (or other similar
agreements) related (hereto; and (c) any such leasehold interesls, the fair market value of
which
exceeds, individually or in the aggregatc, $5,000,000, as rcasonably detcrmined by thc
Administrative Agent. If and to the extent requested by the Administrative Agent, thc Borrowers
shall deliver to thc Administrative Agent, together with such Loan Documents, a favorable
opinion of counsel to the Borrower Entities, thaI is reasonably satisfactory to the Administrative Agent and its counsel, as to (a) the valid cxistence and good standing of such Borrower Entity, (b) the due authorization, execution and delivery by such Borrower Entity of such Collateral Documents to which it is a party, (c) the enforceability of such Collateral Documents against such Borrower Entity, (d) the validity and perfection of the security interests granted by such
Borrower Entity in favor of the Collateral Agent pursuant to the Collateral Documents and
the foregoing to be reasonably satisfactory in form and substance to the Administrative Agent, the Collateral Agent and their
(e) such other matters as any Agent may reasonably request, all of
counseL.
B. In the event that any Person becomes a Subsidiary of the Borrowers (other than
any Joint Venture that Investments have been made in under subsection 6.3(x)), promptly notify (he Administrative Agent of that fact and, cause such Subsidiary, no later than ten (10) Business Days (or such longer period of time as the Administrative Agent shall agree) after it becomes a Subsidiary, to execute and deliver to the Administrative Agent and the Collateral Agent a counterpart of the Guaranty and the Pledge and Security Agreement and each other applicable
Collateral Document, and to take all sueh further action and execute (and, in the case of any
documents, instruments or consents to be executed by a Person that is not a Borrower Entity or any Affliate thereof, use commercially reasonable efforts to obtain) all such further documents and instruments as any Agent may deem reasonably necessary or advisable to grant and perfect in favor of the Collateral Agent, for the benefit of the Secured Parties, a First Priority security interest in all of the: (a) pcrsonal property assets of such Subsidiary; (b) Real Property Assets
owned by such Subsidiary; and (c) leasehold interests of such Subsidiary, the fair market value
of which exceeds, individually or in the aggregate, $5,000,000, as reasonably detennined by the Administrative Agent (such documents and instruments required to be executed and delivered
pursuant (0 this subsection 5. lIB, the "Subsidiary Loan Documents"). In addition, the
Borrowers shall pledge (if ihey arc the direct owner of Capital Stock of such Subsidiary) or shall cause each of their applicable Subsidiaries to pledge (if any of such other Subsidiaries is the direct owner or Capital Stock of such Subsidiary, each such owner, whether the Borrowers or any of their other Subsidiaries, the "Pledging Parent") all of the Capital Stock of such Pledging Parent's Subsidiary to the Collateral Agent pursuant to the applicable Collateral Documents and to take all such further action and execute aU such further documents and instruments as may be required or advisable to grant and perfect in favor of the Collateral Agent, for the benefit of the
Secured Parties, a First Priority security interest in such Capital Stock. The Borrowers shaH
deliver to the Administrative Agent, together with such Loan Documents, in the case of each such Subsidiary that is required to be a party to any Loan Document: (i) (a) certified copies of such Subsidiary's Organizational Certificate together, if applicable, with a good standing
certificate from the Secretary of State of the jurisdiction of its incorporation, formation or
organization, as applicable, each to be dated a recent date prior to their delivery to the
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Administrative Agent, (b) a copy of
such Subsidiary's Organizational Documents, certified by its
secretary or an assistant corporate secretary (or Person holding an cquivalent title or having
equivalent duties and responsibilities) as of a recent date prior to their delivcry (0 the
Administrative Agent, (c) a certificate executed by the secretary or an assistant secretary of such Subsidiary as to (x) the incumbency and signatures of the offcers of such Subsidiary executing the Guaranty, the Collateral Documents and the other Loan Documents to which such Subsidiary is a party and (y) the fact that the attached Organizational Authorizations of such Subsidiary authorizing the execution, delivery and performance of such Guaranty, such Collateral
Documents and such other Loan Documents are in full force and effect and have not been
Modified or rescinded except to the extent reflected therein and (ii) if and to the extent requested
by the Administrative Agent, a favorable opinion of counsel to such Subsidiary, that is

reasonably satisfactory to the Administrative Agent, and its counsel, as to (a) the valid existence and good standing of such Subsidiary, (b) the due authorization, execution and delivery by such Subsidiary of such Guaranty, the Collateral Documents and any other Loan Documents to which it is a party and (c) the cnforceability of such Guaranty and such Collateral Documcnts against
such Subsidiary, (d) the validity and perfection of the security interests granted by such
Subsidiary (and by the Pledging Parent of such Subsidiary in rcspect of the Capital Stock of
such
Subsidiary) in favor of the Collateral Agent pursuant to the Collateral Documents and (e) such
other maUers as any Agent may reasonably request, all of the foregoing to be reasonably satisfactory in form and substance to the Administrative Agent, the Collateral Agent and their
counseL. In addition, the Borrowers shall promptly deliver a supplcmcnt to Schcdule 4.1 to the Administrative Agent if any Subsidiary is created or acquired.
C. If requested by the Collateral Agent, with respect to cach Real Property Asset that
is subject to a Mortgage pursuant to subsection S.IIA or subsection 5.1 IB, provide (and in the case of the following clause (v) use commercially reasonable efforts to provide) thc Collateral Agcnt with (i) Mortgagee Policies of thc type described in subsection 3. I G(iii) covering such Real Property Collateral in an amount at least equal to the purchase price of such Real Property Collatcral (or such other amount as shall be reasonably specified by the Collateral Agent), (ii) an ALTAJACSM survey with respcct to such Real Property Collateral dated a date, and prepared by a Person and in form and substance, reasonably satisfactory to the Collatcral Agent, (iii) environmental reports of the type dcscribed iii subsection 3.IN with respect to such Real
Propcrt Collateral dated a datc, and in form and substance rcasonably satisfactory to the Collateral Agent, (iv) title rcports issued by the Title Company with respect to such Rcal
Property Collateral, dated a date, and in form and substance, satisfactory to the Collatcral Agent (and which may include Pcrmitted Encumbrances), and (v) any consents or estoppels reasonably deemed necessary or advisable by the CoIlateral Agent in connection with the Mortgages relating to such Real Propert Collateral, in form and substance reasonably satisfactory to the Collateral Agent.
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5.12 Intentionallv Omitted.1.

5.13 Further Assurances.
At any time or from time to iime upon thc request of the Administrative Agent or the Collateral Agent, eaeh Borrower wil, at its expense, promptly execute, acknowledge and deliver
such further documents and do such other acts and things as the Administrative Agent or the
Collateral Agent may reasonably request in order to effect fully the purposes of the Loan
Documents and to provide for payment of the Obligations in accordance with the terms of this
Agreement, the Notes and the other Loan Documents. Ln furtherance and not in limitation of
the foregoing, the Borrowers shall take, and cause each of its Subsidiaries to take, such actions as the Administrative Agent or the Collateral Agent may reasonably request from time to time
(including, without limitation, the execution and delivery of guaranties, sccurity agreements, pledge agreements, mortgages, deeds of trst, landlord's consents and estoppels, stock powers, financing statements and other documents, the filing or recording of any of the foregoing, title insurance with respect to any of thc foregoing hat relates to an interest in real property, and the delivery of stock certifcates and othcr collateral with respect to which perfection is obtained by possession) to ensure that the Obligations are guaranteed by the Borrowers and the Subsidiary
Guarantors and are secured by substantially all of excluded by the terms ofthis Agreement) of
the assets (other than those assets specifically
the Borrowers and their Subsidiaries.
5.14 Title.
Each of thc Borrowers shall warrant and defend (a) its title to the Collateral and every part thereof, subject only to Licns permitted hereunder (including Permitted Encumbrances) and
(b) the validity, perfection and priority of the Liens of the applicable Collateral Documents, subject only to Liens pennitted hereunder (including Permitted Encumbrances), in each case
against the claims of all Persons whomsoever. The Borrowers shall reimburse each Agent for
any costs or expenses (including reasonable attorneys' fees and court costs) incurrd by such Agent if an interest in any of the Collateral, other than as permitted hereunder, is claimed by
another Person.
5.15 Maintenance of
Entitlements: Development Ae:reements.

the material Entitlements obtained by
Warrant and defend, and otherwise maintain, all of any of the Borrowers or any of
their Subsidiaries in connection with any Real Property Collateral as necessary (i) for the development of Rhodes Ranch, Tuscany, South West Ranch, and Spanish
I-I
ils, and (ii) to ensure each Project is in compliance in all material respects with Applicable
Laws. The Borrowers and their Subsidiaries shall on a timely basis obtain all material Entitlements that have not been obtained as of the Effective Date as necessary (i) for the
dcvelopment of Rhodes Ranch, Tuscany, South Wcst Ranch, Spanish Hils, and (ii) to ensure each Project is in compliance in all material respects with Applicable Laws. To the extent any material Entitlcmcnts (including, without limitation, the tenns of the Development Agreements)
require any obligations or conditions to be fulfilled by the Borrowers or any of
their Subsidiaries, the Borrowers will perform (or caused to be performcd) such obligations or conditions.
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SECTION 6. NEGATIVE COVENANTS

Each of the Borrowers covenants and agrees that, so long as any of the Commitments
hcrcundcr shall remain in effect and until payment in full of all of the Loans and other
Obligations, each of the Borrowers shall pcrform, and shall causc each of its Subsidiaries to
pcrform, all covcnants in this Scction 6.
6.1 Indebtedness.
The Borrowers shall not, and shall not permit any of their Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or otherwise become or remain directly or indirectly the Borrowers and liable with respect to, any Indebtedness or preferred stock, cxcept that each of their Subsidiaries may create, incur, assume or guaranty, or otherwise become or remain directly or indirectly liable with respect to Indebtedness or preferred stock, as follows:
(i) Each of the Loan Parties may become and remain liable with rcspect to its
respective Obligations pursuant to the terms of this Agrcement and the othcr Loan
Documents;
(ii) Each of the applicable Loan Parties may remain liable for the Permitted Existing Indebtedness or the Refinancing of any such Permitted Existing Indebtedness;
provided that any such Refinancing must not do any of the following: (i) change the obligor on or guarantors of such Indebtedness; (ii) increase the principal amount of such Indebtedness beyond the then existing balance (except by an amount equal to the premium on the principal amount paid and fees and expenses reasonably incurred in connection with any such Refinancing and); (iii) result in the maturity of the principal amount of such Indebtedness being earlier than the maturity of the Indebtedness being
Refinanced; or (iv) extend any security interests beyond the assets sccuring the
Indebtedness being Refinanced;
(iii) The Borrowcrs and thcir Subsidiaries may become and remain liable after
the Effective Date with respect to Indebtedness under Capital Leases capitalized on the consolidated balance shcet ofthc Borrowers and purchase money Indebtedness (including
mortgage financing) to provide all or a portion of the purchase price or cost of
construction of an asset or improvement of an asset; provided that (a) such Indebtedness when incurred shall not exceed the purchase price or cost of construction or improvement of such asset, (b) no such Indebtedness shall be Refinanced for a principal amount in
excess ofthc principal balance outstanding at the time of such Refinancing (except by
an
amount equal to the premium on the principal amount paid and fees and expenses
reasonably incurred in connection with any such Refinancing), (c) such Indebtedness
shall be secured only by the asset acquired, constructed or improved with the proceeds of
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such Indebtedness and (d) the aggregate amount of all Indebtedness outstanding under this clause (iii) at any time shall not exceed $10,000,000;
(iv) Each of the Borrowers and he Subsidiary Guarantors may becomc and remain liable with respect to Indebtedness to any othcr Borrower or Subsidiary
Guarantor; providcd that, in each case, (a) all such intercompany Indebtedness shall be
evidenced by promissory notcs which shall have been pledged to hc Collateral Agent
pursuant to the Collateral Documents, (b) all such intercompany Indebtedness owed by a Borrower to any of its respective Subsidiarics shall be unsecured and subordinated in right of payment to the payment in full of the Obligations pursuant to the terms of the applicable promissory notes or an intercompany subordination agreement ihat in any such case, are rcasonably satisfactory 10 the Administrative Agent and (c) any payment by any Subsidiary under any Guaranty or any payment by a Borrower of the Obligations shall result in a Q! tanto reduction of the amount of any intercompany Indebtedness owed by such Borrower or by such Subsidiary to such Borrower or to any of its Subsidiaries for whose benefit such payment is made;
(v) The Borrowers and their Subsidiaries may become and remain liable with
respect to Indebtedness under performance, surety, appeal or indemnity bonds (or letters of credit used for these purposes) required by Governmental Authorities in connections with the development of any Project, in each case incurred in the Ordinary Course of Business;
(vi) The Borrowers and their Subsidiaries may become and remain liable with
respect to I ndebtedness under the Hedge Agreements required under subsection 5. I 2 and
any other Hedge Agrecments that are entered into and maintained for bona fide hedging activities and arc not for speculative purposes;
(vii) The Borrowers and their Subsidiaries may become and remain liable with
respect to Indebtedness under Special Improvement Bonds in an amount not to exceed $10,000,000 at any time outstanding pius such greater amount as may be reasonably acceptable to Administrative Agent;
(viii) (Intentionally OmittedJ;
(ix) (lntcntionally Omiued);
(x) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insuffcient funds in the Ordinary Course of Business; provided, however, that such Indebtedness is extinguished within five (5) Business Days of incurrence; and
(xi) The Borrowers and their Subsidiaries may become and remain liable for
unsecurcd Indebtedness in an aggregate principal amount (for the Borrowers and all their Subsidiaries) not to exceed $3,000,000; and
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(xii) The Borrowers and their Subsidiaries may become and remain liable with
respect to Indebtedness (which may be senior or pari passu in right of payment to the Indebtedness permitted pursuant to subsection 6.1(i)) undcr a working capital revolving
loan and letter of credit facility in an aggregate principal amount not to exceed
$10,000,000 at any time outstanding.
6.2 Liens and Related Matters.
A. Prohibition on Liens. The Borrowers shall not, and shall not permit any of their Subsidiaries to, directly or indirectly, create, incur, assumc or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of
goods or accounts receivable or Capital Stock) of any Borrower or any of its Subsidiarics, whether now owned or hereaftcr acquired, or any income or profits therefrom, or fie or pcrmit the filing of, or knowingly permit to remain in effect, any financing statement, or other similar
notice of any Lien with respect to any such property, asset, income or profits under the UCC of any state or under any similar recording or notice statute, except (solely with respect to the Borrowers and their Subsidiaries):
(i) any Permitted Encumbrances; provided, however, that (a) with respect to
any Real Property Collateral, no Permitted Encumbrances except Pennitted Title

Exceptions and Specified Encumbrances shall be senior or prior to the Liens under the Mortgages; and (b) no such Permitted Encumbrances shall result in a Lien on the Capital Stock of any Borrower or its Subsidiaries;
(ii) Liens in favor of the Collateral Agent granted pursuant to the Collateral
Documents or granted in favor of any Agent or Secured Party pursuant to the terms of
this Agrecmcnt;
(iii) (Intentionally Omitted);
(iv) Liens securing Indebtedness under Capital Leases or purchase money
Indebtedness (including mortgage financing) of any Borrower or any Subsidiary incurred in accordance with subsection 6.1, or to Refinance any such Indebtedness incurred solely
for such purpose; orovidcd that (a) such Liens shall be created substantially
simultaneously with (or within 90 days of) the acquisition or construction of such assets or improvements, or at the time of such Refinancing, as the case may be, (b) such Liens do not at any time encumber any assets other than the assets acquired, constructed or improved with the proceeds of such Indebtedness (or securing such Indebtedness being Refinanced) and (c) in the case of a Refinancing, the amount of Indebtedness secured
thcreby is not increased (except by an amount equal to the premium on the principal amount paid and fees and expenses reasonably incurred in connection with any such Refinancing);
(v) Liens securing lndebtcdness permilled by subseciion 6.1 (vii);
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(vi) Liens securing Indebtedness permitted by subsection 6.1 (xii), which Liens may rank senior or pari passu in priority to the Liens permitted pursuant to subsection
6.2A(iii); and
(vii) Precautionary UCC financing statement fiings (made by lessors) that do

not at any time perfect any Liens, regarding operating leases entered into by the
Borrowers and their Subsidiaries.
. No Further Negative Pledges. Neither any Borrower nor any of its Subsidiaries
shall entcr into or suffer to exist or become effective any agreement that prohibits or limits the ability of any Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, other than:
(i) this AI:,'Teement and the other Loan Documents; (ii) any agreements governing any purchase
money Indebtedness or Capital Leases otherwise permitted by subsection 6.1 (in which case, any
prohibition or limitation shall only be effective against the assets financed thereby); (iii)
customary non~assignment and non-pledge provisions in any lease or licenses entered into in the
Ordinary Course of
Business; and (iv) agreements and instruments entered into by Joint Ventures
relating to the property of such Joint Venlure so long as such prohibitions or limitations do not apply to the Capital Stock in the Joint Venture owned by any Loan Party.
C. No Restrictions on Distributions Except for (a) restrictions existing under the

Loan Documents, (b) customary contractual non~assignment provisions in leases, Iicenscs or
contracts entered into in the Ordinary Course of Business, (c) restrictions governing Capital Leases, mortgage tinancings or purchase money Indebtedness to the extent sueh restrictions
restrict the transfer of the property subject to such Capital Leases, mortgage financings or
purchase money Indebtedness, (d) restrictions imposed on assets to be sold in a manner
permitted hereby pending the closing of such sale or disposition, and (e) customary provisions in
joint venture agrcements and other similar arrngements, each Borrower wil not, and wil not permit any of its Subsidiaries to, create or otherwise cause or suffer to exist or become effective
any consensual encumbrancc, limitation or restriction of any kind on the abilty of any
Subsidiary of a Borrower to (i) makc Restricted Payments in respect of any such Subsidiary's Capital Stock, (ii) repay or prepay any Indebtedness owed by such Subsidiary to a Borrower or any other Subsidiary of a Borrower, (iii) make loans or advances to, or other Investments in, a Borrower or any other Subsidiary of a Borrower or (iv) transfer any of its property or assets to a Borrowcr or any other Subsidiary of a Borrower.
6.3 Investments.
The Borrowers shall not, and shall not permit any of their Subsidiaries to, directly or indirectly, make or own any Investments except:
(i) The orrowers and their Subsidiaries may continue to own the
Inveslments owned by them as of the Effective Date in any Borrower Entities as listed on
Schedule 6.3(i;
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PRELIMINARY DRAFT SUBJECT TO MODIFICA liON FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
(ii) The BOlTowers and the Subsidiary Guarantors may make and own
intercompany loans to the extent permitted by subsection 6.I(iv);

(iii) The Borrowers and their Subsidiaries may make and own Investments in
Cash Equivalents;
(iv) Any Borrower may make Investments II any other Borrower or any
Subsidiary Guarantor;
(v) Any Subsidiary Guarantor may make Investments in any other Subsidiary
Guarantor or any Borrower;

(vi) Investments in Persons not engaged in any material respect in any
business other than the ownership and development of real propert and whose principal asscts consist of interests in real property shall be permilted; provided that each such Investment results in the acquisition of either (l) one hundred percent (100%) of the Capital Stock of such Person or (1I) all or substantially all of the assets of such Person
and, in the case of clause (1), such acquired Capital Stock is pledged to the Collateral Agent and such Person promptly becomes a Subsidiary Guarantor in accordance with
subsection 5.1 i and, in either case, grants mortgages and Liens on its assets in favor of the Collateral Agent as required under subsection 5.11;
(vii) The Borrowers and their Subsidiaries may make and own Investmenls in
Hedge Agreements entered into pursuant to subsection 5.12 and any other Hedge Agreements that are entered into for bona fide hedging activities and are not for
speculative purposes;
(viii) Investments constituting accounts receivable arising, and trade credit
granted, in the Ordinary Course of
Business, and any securities received by a Borrower or
any of its Subsidiaries in satisfaction or partial satisfaction thereof from financially
troubled account debtors to thc extent reasonably necessary in order to prevent or limit loss, and any prepayments and other credits to supplicrs made in the Ordinary Course of Business shall be permitted;
(ix) The Borrowers and their Subsidiaries may make and own Investments in
Restricted Seller Carry~Back Notes in an aggregate principal amount not to exceed $7,000,000 at any time outstanding, issued by purchasers in connection with Asset Sales permitted under subsections 6.9(i) and 6.9(ii); provided that not more than $2,000,000 in
aggregate principal amount of any such Restricted Seller Carry-Back Notes at any time outstanding may have a maturity date later than (3) years following the date of original issuance thereof; provided that notwithstanding the foregoing that Borrowers and their
Subsidiaries may not make and own Investments in Restricted Seller Carry~Back Notes
relating to the sale of single family homes, residential buildings or other housing units;
and
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(x) The Borrowers and their Subsidiaries may make other Investments not
otherwise permitted above so long as the total amount of all of such Investments does not exceed $3,000,000 in he aggregate at anyone time outstanding; provided that no Default or Event of Default has occurred and is continuing or would result therefrom.
6.4 Contiriecnt Oblieutions.
The Borrowers shall not, and shall not permit any of their Subsidiaries to, directly or indirectly, create or become or remain liable with respect to any Contingent Obligation, except:
(i) The Subsidiary Guarantors may become and remain liable with respect to
Contingent Obligations arising under the Guaranty;

(ii) The Borrowers and their Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of customary indemnification and purchase price adjustment obligations of any such Person incurred in connection with Asset Sales
pen11itted by this Agreement;
(iii) The Borrowers and their Subsidiaries may become and remain liable with
respect to Contingent Obligations in rcspcct of any Indebtedness, that if outstanding,

would be permitted under subsection 6.1;
(iv) Thc Borrowers and their Subsidiaries may become and remain liable with
respect to Hedge Agreements entered into pursuant to subsection 5.12 and any other
Hedge Agreements that are entered into for bona fide hedging activities and arc not for speculative purposes;
(v) The Borrowers and their Subsidiaries may become and remain liable with
respect to letters of credit permitted under subsection 6.I(v);

(vi) The Borrowers and their Subsidiaries may become and remain liable with
respect of
Contingent Obligations arising in connection with operating leases entered into by a Borrower or any Subsidiary Guarantor from iime to time; and
(vii) The Borrowers and their Subsidiaries may become and remain liable with
respect to Contingent Obligations granted in favor of
title insurers in the Ordinary Course of Business; provided that any such Contingent Obligations entered into by the
Borrowers and Subsidiary Guarantors shall apply to Real Property Assets of the
Borrowers and Subsidiary Guarantors.
6.5 Restricted Pai'menls.
The Borrowers shall not, and shall not permit any of their Subsidiaries to, directly or
indirectly, declare, order, pay, make or set apart any sum for any Restricted Payment; provided that:
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The Borrowers and their Subsidiaries may make Restricted Payments to (i) the direct or indirect holders of Capital Stock of INewcoi for the purposes of permitting
such holders to pay their respective United States federal, state or local income tax obligations with respect to net income allocated to them from the Borrowers and their
Subsidiaries; provided thai the amount of such Restricted Payments with respect to any Fiscal Year shall not exceed the Consolidated Net Income of the Borrowers and their Subsidiaries for such Fiscal Year (calculated in accordance with GAAP) multiplied by the Applicable Tax Rate. For purposes of this provision, the net income allocated to the direct or indirect holders of Capital Stock of INewcol from the Borrowers and their Subsidiaries for any Fiscal Year shall be calculated by applying any prior year allocations of losses and credits of the Borrowers and their Subsidiaries not previously used to offset taxes in respect of allocations of net income of the Borrowers and their Subsidiaries;
(ii)
The Borrowers may make Restricted Payments to other Borrowers; and
Any Subsidiary of a Borrower may make Restricted Payments to the (iii) holders of its Capital Stock on a pro rata basis.
6.6
Financial Covenants.
A.
Total Debt LTV Ratio. The Borrowers shall not permit the ratio (the "Total
the last day f each Fiscal Quarter
Appraised Value of
Debt LTV Ratio") of (i) Total Consolidated Indebtedness as of (any such day being a "Calculation Date"), to (ii) the
the thcn remaining Rcal
Property Collateral as of the Calculation Date (giving effect to Assets Sales and dispositions of Real Property Collateral prior to such Calculation Date) to exceed the following ratios:
Fiscal Quarter Ending
Total Debt LTV Ratio

1
Aftcr tht Effective Date and on or prior to r Thereafter
180%1
r
Intentionally Omitted).
C. (Interest Coverage Ratio. The Borrowers shall not permit the ratio (the "Interest Coveraiie Ratio") of (ii Consolidated EBITDA for any Test Period 10 (;;) Consolidated lnterest Expense for such Test Period to be less than the following ratios:)
BORROWERSj
rr,g;"!l!,,,,DISi:PSSEl). IN. LIGRT OF THE BUSINESS OI'EIlTIONS.QF'5'

Fiscal Quarter Ending
After the Effective Date and on or Drior to r Thereafter
D.
1
Interest Coverage Ratio

r4.001 to 1.00 1 to 1.00
Intentionally Omitted).
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PREUMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST UEN STEERING COMMITTEE
6.7 Restriction on Fundamental Chan2cs.
Neither any of (he Borrowers nor any or their Subsidiaries shall, directly or indirectly, (a) enter into any merger, consolidation, reorganization or recapitalization, or liquidate, wind up or dissolve, or cause or consent to any oiher Borrower or Subsidiary to enter into any merger, consolidation, reorganization or recapitalization, or to liquidate, wind up or dissolve, or (b) sell all or substantially all of the assets of the Borrowers and thcir Subsidiaries, on a consolidated
basis, in a single transaction or series of related transactions; orovided that, notwithstanding the
foregoing, (i) any Subsidiary may sell all or substantially all of its assets to a Subsidiary
Guarantor or any Borrower, (ii) any Subsidiary Guarantor may merge or consolidate with and into a Borrower; orovided sueh Borrower shall be the continuing or surviving Person, (iii) any Subsidiary Guarantor may merge or consolidate with and into or another Subsidiary Guarantor;
provided that a Subsidiary Guarantor that is wholly-owned (directly or indirectly) by the Borrowers shall be the continuing or surviving Person, (iv) any Borrower may merge or
consolidate with and inlo another Borrower, (v) any Subsidiary Guarantor may be liquidated, wound up or dissolved if the continued existence of such Subsidiary Guarantor is not necessary to the continued conduct of the business ofthc Borrowers and their Subsidiaries as evidenced by an Offcer's Certificate delivered to the Administrative Agent, and the assets of such Subsidiary Guarantor are distributed to the Loan Parties, and (vi) a Borrower or a Subsidiary may consummate any merger if such merger is in furtherance of an Investment permitted by subsection 6.3(vi) and, if such transaction involves a Borrower, such Borrower shall be the
continuing or surviving Person.
6.8 Sale or Discount of Receivables.
The Borrowers shall not, and shall not permit any of their Subsidiaries to, directly or
indirectly, sell with recourse, or discount or otherwise sell for less than the face value thereof, any of its notes or accounts receivable.
6.9 Asset Sales.
The Borrowers shall not, and shall not permit any of
their Subsidiaries to, engage in any
Asset Sales, except as follows:

(i) With respect to Rcal Propcrty Collateral, a Permitted Collateral Asset
Sale, provided that each of
the following conditions has been satisfied:
(a) the Real Property Collateral subject 10 such Asset Sale, and the
remaining Real Property ColIatcral after giving effect to such Asset Sale, shall constitute a legal subdivision in accordance with all Applicable Laws and
Governmcntal Authorizations;
(b) to the ex.tent required by the Collateral Agent, the Collateral Agent
shall have received such title endorsements, date downs or other evidence
reasonably satisfactory to the Collateral Agent that (i) the priority of the Liens
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evidenced by the Mortgages with respect to thc remaining Real Property

Collateral after giving effect to such Asset Sale shall be maintained following
such Asset Sale and (ii) the remaining Real Property Collateral is not subject to any Liens other than Liens permitted by subsection 6.2;
(e) the consideration received from such Asset Sale shall be paid
solely in Cash, Restricted Seller Carry~Back Notes (provided that not more than
$7,000,000 in aggregate principal amount of Restricted Seller Carry~Back Notes may be outstanding at any time);
(d) the Borrowers shall have paid all reasonable out~of~pocket costs
and expenses incurred by the Collateral Agent and all reasonable fees and
expenses paid to third party consultants (including reasonable atiorneys' fees and expenses) by the Collateral Agent in connection with the release of the applicable
portion of the Real Propert Collateral from the Lien of the Mortgages, to the
extent invoices thercfor have been presented; and

(e) the Borrowers shall have obtained all applicable consents required
by the LLC Agreement relating to such Pennitted Collateral Asset Sale.

(ii) With respect to Real Property Collateral, a Major Collateral Asset Sale,
provided that each of the following conditions has been satisfied (as certified by a
Responsible Offcer):
(a) no Default or Event of Default shall have occurred and be
Default that will be cured through the consummation of the proposed Asset Sale) or would result therefrom;
continuing (other than a Default or Evcnt of
(b) not less than thirty (30) days' (or such shorter period as is
acceptable to the Collatcral Agent) prior writtcn notice of the closing of such sale has been provided to the Collateral Agent, together with a truc, correct and complete copy of the relevant Qualified Sales Agreement;
(c) the Real Property Collateral subject to such Asset Sale, and the
remaining Real Property Collateral after giving effect to such Asset Sale, shall
constitute a legal subdivision in accordance with all Applicable Laws and

Governmental Authorizations;
(d) to the extent required by the Collateral Agent, the Collateral Agent
shall have rcceivcd such title endorsements, date downs or other evidence reasonably satisfactory to the Collateral Agent that (i) the priority of the liens
evidenced by the Mortgages with respect to the remaining Real Property Collateral after giving effect to such Asset Sale shall be maintained following such Asset Sale, and (ii) the remaining Real Propert Collateral is not subject to any Liens other than Liens permitted by subsection 6.2;
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(c) the Borrowers shall have paid all reasonable out-of~pocket costs
expenses paid to third party consultants (including reasonable attorneys' fees and
cxpcnses) by the Collateral Agent in connection with the release of
the applicable
portion of the Real Propert Collateral from the Lien of the Mortgages, to the
extent invoices therefor have been presented;

(f) the consideration received from such Asset Sale shall be paid
solely in Cash, Restricted Seller Carr~ack Notes (provided that not more than $7,000,000 in aggregate principal amount of Restricted Seller Carry~Baek Notes
may be outstanding at any time);
(g) the Collateral Agent shall have received an Acceptable Appraisal
demonstrating the Appraised Value of the remaining Real Property Collateral
assuming such Major Collateral Asset Sale is consummated, together with

calculations based all the Appraised Value contained in such Acceptable
Appraisal, demonstrating compliance, on a pro forma basis to give effect to the
Major Collateral Asset Sale, with the financial covenants set forth in subsection 6.6; provided that the Requisite Lenders may instruct the Collateral Agent to waive the requirements of this subsection 6.9(ii)(g); and
(h) the Borrowers shall have obtained all applicable consents required
by the LLC Agreement relating to such Major Collateral Asset Sale.

(iii) With respect to Real Property Collateral, a Required Dedication, provided
that each of the following conditions has been satisfied (as certified by a Responsible Offcer):
(a) no Default or Event of Default shall have occurred and be
continuing (other than a Default or an Event of the consummation of
Default that will be cured through the proposed Asset Sale) or would result therefrom;
(b) not less than thirty (30) days' (or such shorter period as is
acceptable to the Collateral Agent) prior written notice of the closing of such
Requircd Dedication has been provided to the Collateral Agent, together with a truc, correct and complete copy of the documentation proposed to consummate
the Required Dcdieation;
(c) the Real Property Collateral subject to such Asset Sale, and the
rcmaining Real Property Collateral after giving effect to such Asset Sale, shall
constitute a legal subdivision in accordance with all Applicable Laws and

Governmental Authorizations;
(d) to the extent required by thc Collateral Agent, the Collateral Agent
shall have received a title endorsements or other evidence reasonably satisfactory
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to ihe Collateml Agent that the priority of the Liens cvidcnced by thc Mortgages with respect to the remaining Real Property Collateral after giving cffect to such
Required Dedication shall be maintained following such Required Dedication;
and
(c) the Borrowers shall have paid all reasonable out-or-pocket costs
expenses paid to third party consultanl.. (including reasonable attorneys' fees and
expenses) by the Collateral Agent in connection with the release of
the applicable
portion or thc Real Property Collateral from the Lien of the Mortgages, to the
extent invoices therefor have been presented.
6.10 Transactions with Shareholders and Affiiates.
The Borrowers shall not, and shall not permit any of their Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering or any service or the payment of any management lees, consulting fces or the making of othcr disbursements) with any holder
of 10% more of any class of equity Securities of
the Borrowers or their Subsidiaries or with any
Alfiliate of the Borrowers or of any sucli Subsidiaries or holder (each, an "Affliate

Transaction"), on terms that are less favorable to the Borrowers or the Subsidiaries, as the case may be, than those that might be obtained reasonably at the time from Persons who are not such a holder or Affliate; provided that the foregoing restriction shall not apply to (i) transactions
between or among the Borrowers and any wholly-owned Subsidiary Guarantor or between or among any whoiiy~owned Subsidiary Guarantors, (ii) reasonable and customary fees paid to, and customary indemnification of, members of the boards of directors (or other governing bodies) of the Borrowers and their Subsidiaries, (iii) Restricted Payments permitted under this Agreement, (iv) transactions effected pursuant to this Agreement, and (v) transactions described on Schedule 6.10; and provided, further. that (a) with respect to any Affliate Transaction or series ofrclated
Affiiate Transactions for aggregate consideration in excess of $5,000,000 solely involving the
purchase and/or sale of interests in rcal property or the Capital Stock of a Person whose principal
assets are comprised of interests in real property, prior to the consummation of such Affliate
Transaction or series of related Affliate Transactions an appraisal of
the iiiterests in real property to be acquired (which shall be an "as is" appraisal) or othcr consideration to be provided in such Affiliate Transaction shall be provided to the Administrative Agent, together with an Offcer's CertiJicate from the Borrowers certifying that the tenns of such Affliate Transaction are no less favorable to the Borrowers and their Subsidiaries than those that might be obtained reasonably at that time from Persons that are not equity securities of the holders of 10% or more orany class of Borrowcrs or their Subsidiaries or an Affliate of the Borrowers or of any such Subsidiaries or holder and (b) with respect to any Affliate Transaction or series of related Affliate Transactions
for aggregate consideration in excess of $5,000,000 (other than any Affliate Transaction
described in the preceding clause (a) of
this proviso), prior to the consummation of such Affliate
Transaction or scries of related Affliate Transactions the Borrowers shall provide to the
Administrative Agent a fairness opinion in form and substance reasonably satisfactory to thc
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Administrative Agent that provides, and an Offcer's Ccrtificate from ihe Borrowers certifying, (hut the terms of such Affliate Transaction are no less favorable to the Borrowers and their Subsidiaries than those that might be obtained reasonably at that time from Pcrsons that are not holders of 10% or morc of any class of equity securities of the Borrowers or their Subsidiaries or an Affliatc of the Borrowers or of any such Subsidiaries or holder.
6.11 Conduct of
Business.
The Borrowers shall not, and shall not permit any of their Subsidiaries to, engage in any business other than (i) thc businesses engaged in by the Borrowers and (heir Subsidiaries on the Effective Date and (ii) such other lines of business as may be reasonably related thereto.
6.12 rlntentionallv Omittedl.

6.13 Amendments or Waivers of
Certain Agreements.
the Borrowers nor their Subsidiaries shall terminate or agree to aiiy Modification to, or waivc any of its rights under, any (i) Matcrial Contract or (ii) Organizational Certificatcs or
None of
other Organizational Documents of any of the Borrowers or their Subsidiaries, if such

termination, Modification or waiver would reasonably be expected to be materially adverse to the Borrowers and their Subsidiaries, taken as a whole, or any Agent, Lender or other Secured
Party.
6.14 Fiscal Year.

Neither any Borrower nor any Subsidiary shall change its Fiscal Year-end from
December 3 i .
6.15 J-ede:e Ae:reements.
Ncither any of the Borrowers nor any Subsidiary shall enter into any Hedge Agreement, except Hedge Agreements entered into in order to effectively cap, collar or exchange intcrcst rates (from floating to fixed rates) with rcspcct to any intercst~bearing liability or investment of
any Borrower or any Subsidiary.
6.16 IIntcntioliallv Omitted!.

6.17 Limitation on Unentitled Properties.
Neither any of the Borrowers nor any Subsidiary shall expend more than $5,000,000 in any Fiscal Year (on an aggregate combined basis for the Borrowers and their Subsidiaries
collectively) toward the purchase of Real Property Assets which (i) require any Entitlements (other than customary mapping and subdivision approvals to be obtained in the Ordinary Course
of Business pursuant to existing zoning or Development Agreements) for the development and sale of residential single family housing or inulti~famiiy housing thereon which have not yet been obtained at the time of purchase by or for the benefit of any Borrower or any of their Subsidiaries
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(ii) arc located further than five miles from any real property development that has all Major Entitlements and that has an existing use (such existing use to be in accordance with Applicable Law and as permitted by all necessary Governmental Authorizations) similar to the intended use of the Real Property Assets proposed to be purchased.
and
6.18 Limitation on Purchase orRen) Property Assets.
Neither any of the Borrowers nor any Subsidiary shall purchase any Real Property Asset that is not located in Arizona, California, Colorado, Idaho, Nevada, New Mcxico or Utah.
EVENTS
SECTION 7. OF DEFAULT
IF any of
the following conditions or events ("Events or Default") shall occur:
7.1 Payment of ObI!ations.
The Borrowers shall fail to pay any of the Obligations on the due date thereof (whether
due at stated maturity, on demand, upon acceleration or otherwse) and, in the case of
the failure
to pay accrued interest (subject to the pennitted capitalization of interest pursuant to subsection 2.2C), such amount remains unpaid for five (5) Business Days thereafter; Or
7.2 Misrepresentations.
Any representation, warranty or other wrtten statement to any Agent or any Lender by or on behalf of any Loan Party, whether made in or furnished in compliance with or in reference to any of the Loan Documents, proves to have been false or misleading in any material respect when made or furnished; or
7.3 Breach of Certain Covenants.
The Borrowers shall fail or ncglect to perfonn, keep or observe any covenant contained
in subscctions 5.1, 5.3(xi), SA (but solely to the extent of a Borrower's continued existence,
subject to subsection 6.7), 5.15, 5.18 or Section 6 hereof; or

7.4 Breach of
Other Covenants.
A Borrower shall fail or neglect to perform, keep or observe any covenant contained in this Agreement not otherwise addressed in this Section 7 and the breach of such other covenant is not curcd to the Administrative Agent's satisfaction within thirty (30) days after the sooner to occur of any Responsible Offcer's receipt of notice of such breach from the Administrative
Agent or the date on which such failure or neglect first becomes actually known to any
Responsible Offcer; provided that such notice and opportunity to cure shall not apply in the case
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of any failure to perform, keep or observe any covenant which is not capable of
being cured at all
or within siich 30"day period; or

7.5 Oefault Under Loan Documents.
Any Borrower or any othcr Loan Party shall default in the due and punctual observance or performance (taking into account any applicable grace periods) of any liabilty or obligation to
be observed or performed by it under any of the Loan Documents (except as provided in subsections 7.1,7.2, 7.3 or 7 A); and the breach of such other covenant is not cured to the
Administrative Agent's satistction within thirty (30) days after the sooner to occur of any Responsible Offcer's receipt of notice of sueh breach from the Administrative Agent or the date
on which such failure or neglect first becomes actually known to any Responsible Offcer;
provided that such notice and opportunity to cure shall not apply in the case of any failure to
perform, keep or observe any covenant which is not capable of being cured at all or within such 30~day period; or
7.6 Other Defaults.
A. (Intentionally OmiUcdJ; or
B. Any Borrowcr or any other Loan Party shall (i) delult in making any payment of
any principal of any Indebtedness (including, without limitation, any Contingent Obligation in respect of Indebtedness, but excluding Obligations of the Borrowers under the Loan Documents)
on the scheduled or original due date with respect thcreto, or (ii) default in making any payment
of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrumcnt or agreement under which such Indebtedness was created, or (iii) default in the
observance or performance of any other agreement or condition relating to any such

Indebtedncss or contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if
required, sueh Indebtedness to be demanded or to become due, or to be required to be

repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to
repurchase, prcpay, dcfcasc or redecm such Indebtedness to be made, prior to its stated maturity or (in the case of any such Indebtedness constituting a Contingent Obligation) to becomc payable
or cash collatcral in respect thcreof to be demandcd; Drovided, that a default, event or condition
described in clauses (i), (ii) or (iii) of this subsection 7.6B shall not at any timc constitute an Event of Default unlcss, at such timc, one or more defaults, events or conditions of the type
described in clauses (i), (ii) and (ii) of this subsection 7.6B shall havc occurred and be
continuing with respect to Indebtedness thc outstanding principal amount of which exceeds in the aggregate $5,000,000; or
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7.7 Insolvencv Procccdin2s.
Any Insolvency Proceeding shall be commenced by any Loan Party; an Insolvency Proceeding is commcnccd against any Loan Party and any of the following events occur: such Loan Party consents to the institution of the Insolvency Proceeding against it; the petition commcncing thc Insolvcncy Proceeding is not timely controverted by such Loan Party; the petition commencing the Insolvency Proceeding is not dismissed within sixty (60) days after the date of (he fiing thereof (provided that, in any event, during the pendcncy of any such period, Lenders shall be relieved from their obligation to make Loans or otherwise extend credit to or for
the benefit of the Borrowers hereunder); an interim trustee is appointed to take possession of
all
or a substantial portion of the properties of such Loan Party or to opcrate all or any subslantial portion of the business of such Loan Party or an order for relief shall have bcen issued or entered
in connection with such Insolvency Proceeding; or any Loan Party shall make an offer of
sculement extension or composition to its unsecured creditors generally; or

7.8 Business Disruption~ Condemnation.
Any Loan Part shall be enjoined, restrained or in any way prevented by court,
governmental or administrative order from conducting all or any material part of its business affairs; or any material part of the Collateral shall be taken through condemnation or a Required
Dcdication or the Appraised Value of such propert shall be matcrially impaired through
condcmnaiion or a Required Dedication; or
7.9 ERISA.
An ERISA Event shall occur which could reasonably be expected to result in a Material Adverse Effect or which the Administrative Agent, in its reasonable discretion, shall determinc constitutcs grounds for the termination by the PBGC of any Pension Plan or for the appointment by the appropriate United States district court of a trustee for any Pension Plan; or if any Pension Plan shaH be terminated or any such trustee shall be requested or appointed; or if a Borrower or
any Subsidiary is in "default" (as defined in Section 4219(c)(5) of ERISA) with respect to
payments to a Multiemployer Plan resulting from a Borrower's or such Subsidiary's complete or partial withdrawal from such Pension Plan; or
7.10 Challeniie to Loan Documents: Invaliditv.
Any Loan Party or any of its Affliatcs shall challenge or contest in any action, suit or
proceeding the validity or enforceability of any of the Loan Documents, the Icgality or
enforceability of any of thc Obligations or the perfection or priority of any Lien granted to the Collateral Agent, or any Lien created by any of the Collateral Documents shall cease to be enforceable and of the same effect and priority, in each case, to the extent purported to be created thereby, or any of the Loan Documents ceases to be in full force or effect for any reason other than a full or partial waiver or release by the applicable Agent and Lenders in accordance with the terms thcreof; or
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7.11 Judemcnt.
One or morc judgments or orders for thc paymcnt of moncy (not covered by insurance as
to which an insurance company has acknowledged coverage) in an amount that exceeds, individually or in the aggregate, $5,000,000 shall be entercd against a Borrower or any other
Loan Party and there shall be any period of thirty (30) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appcal or othcl\..ise, shall not be in effcct; or
7.12 Repudiation ofar Default Under Guaranty.
Any Subsidiary Guarantor shall revoke or attempt to revoke the Guaranty signed by such Subsidiary Guarantor, shall repudiate such Subsidiary Guarantor's liability thereunder, or shall be in default under the terms thereof, or shall fail to confirm in writing, promptly after receipt of
the Administrative Agent's written request therefor, such Subsidiary Guarantor's ongoing
liabilty under the Guaranty in accordance with the terms thereof; or
7.13 Criminal Forfeiture.

Any Loan Party shall be convicted under any criminal of any property of
law that could lead to a forfeiture
such Loan Party; or
7.14 Change of Control.

A Change of Control shall occur.
THEN (i) upon the occurrence of
any Event f Default described in subsection 7.7, each
of (a) the unpaid principal amount of and accrued interest on the Loans, and (b) all other Obligations shall automatically become immediately due and payable, without presentment,
any kind, all of which are hereby expressly waived by the Borrowers, and the Commitments, if not previously terminated, shall terminate, and (ii) upon the occurrencc and during the continuation of any other Event of Default, the Administrative Agent may, or shall upon the written request of the Requisite Lenders, by written notice to the demand, protest or other requirements of
Borrowers, declare the unpaid principal amount of and accrued interest on the Loans, and all
other Obligations, to be, and the same shall forthwith become, immediately due and payablc, and the Commitments, if not previously terminated, shall terminate. Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent or the Collateral Agent may (and shall as directed by the Requisitc Lcnders) (A) exercise, on behalf of the Lendcrs, any and
all rights and remedies under any Loan Documents; and/or (B) exercise any and all rights,
powers and rcmedies available to the Administrative Agent, the Collateral Agent or the Lenders (It law, in equity or otherwise, oil of which rights, powers and remedics are cumulative and not exclusive.
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PRELIMINARY DRAFT SUBJECT TO MOOIFICA nON FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
SECTION 8. AGENTS
8.1 Appointment.
A. Appointment Authority. Each of the Lenders hereby appoints r 1 as
the Administrative Agent and the Collateral Agent hereunder and under the other Loan
Documents and authorizes ( 1, in such capacities, to take such actions on its behalf and
to exercise such powers as are delegated to I I, in such capacities by the terms hereof
or thereof, together with such actions and powers as are reasonably incidental thercto. Each
Agent agrees to act upon thc express conditions contained in this Agreement and the other Loan
Documents, as applicable, In performing its functions and duties under this Agreement, each Agent shall act solely as an agent of the Lenders and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for the Borrowers
or any of their Subsidiaries. The provisions of this Section 8 are solely for the benefit of the
Agents and the Lenders, and the Borrowers shall not have rights as third party beneficiaries of any of such provisions; provided that the Borrowers shall be obligated to perform their obligations under this Section 8.
B. Appointment of Supplemental Collateral Agents. It is the purpose of this

Agreement and the other Loan Documents that there shall be no violation of any law of any jurisdiction denying or restricting the right of banking corprations or associations to transact business as agent or trustee in such jurisdiction. It is recognized that in case of litigation under
this Agreement or any ofthc other Loan Documents, and in particular in case of
the enforcement of any of the Loan Documents, or in case the Administrative Agent or the Collateral Agent deems that by reason of any present or future law of any jurisdiction the Administrative Agent or the Collateral Agent may not exercise any of the rights, powers or remedies granted herein or in any of the other Loan Documents or take any other action which may be desirable or necessary
in connection therewith, it may be necessary that the Administrative Agent or the Collateral Agent appoint an additional individual or institution as a separate trustee, eo~trustee, collateral
agcnt or collateral co~agent (any such additional individual or institution being referred to herein
individually as a "Supplemental Collateral Agent" and collectively as "Supplemental

Collateral Agents").
In thc cvent that the Administrativc Agent or the Collateral Agent appoints a
Supplemental Collateral Agent with respect to any Collateral, (i) each and every right, power,
privilege or duty expressed or intended by this Agrecmcnt or any of
the other Loan Documents to
be exercised by or vested in or conveyed to the Administrative Agent or the Collateral Agent with respect to such Collateral shall be exercisable by and vest in such Supplemental Collateral
Agent to the extent, and only to the extent, necessary to enable such Supplcmcntal Collateral
Agent to exercise such rights, powers and privileges with respect to such Collateral and to
perform such duties with respect to siich Collateral, and every covenant and obligation contained in the Loan Documents and necessary to the exercise or performance thereof by such Supplemental ColJiiteml Agent shall run to and be enforccable by either thc Administrative Agent or the Collateml Agent or such Supplemental Collateral Agent and (ii) the provisions of this
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Scction 8 and of subsection 9.2 that refcr to the Administrative Agent or the CoJlateral Agent
shall inure to the benefit of such Supplemental Collateral Agent and all refercnces therein to the Administrative Agent or the Collateral Agent shall be deemed to be rcfcrences to the Administrative Agent or the Collateral Agent and/or such Supplemental Collateral Agent, as (he
context may requirc.
Should any instrument in writing from the Borrowers or any other Loan Party be required by any Supplemental Collateral Agent so appointed by the Administrative Agent or the Collateral Agent for more fully and certainly vesting in and confirming to him or it such rights, powers,
privileges and duties, the Borrowers shall, or shall cause such Loan Party to, execute,
acknowledge and deliver any and all such instrumenls promptly upon request by the Administrative Agent or the Collateral Agent. In case any Supplemental Collateral Agent, or a successor thereto, shall dissolve, die, become incapable of acting, resign or be removed, all the
rights, powers, privileges and duties of such Supplemental Collateral Agent, to the extent pemlitted by law, shall vest in and be excrcised by the Administrative Agent or the Collateral Agent until the appointment of a new Supplemental Collateral Agent.
8.2 Rie.hts as a Lender.
The Persons serving as the Agents hereundcr shall have (he same rights and powers in its capacity as a Lcnder as any other Lcnder and may exercise the same as though it were not an Agent and the tcrm "Lender" or "Lenders" shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Persons serving as the Agents hereunder in their individual capacity. Such Persons and their Affliates may accept deposits from, lend money to, act as the tinancial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrowers or any Subsidiary or other Affliate thereof as if such Persons were not Agents hereunder and without any duty to account therefor to the Lenders.
8.3 Exculpatorv Provisions.
The Agents shall not have any duties or obligations except those expressly set forth herein and in tht: otht:r Loan Documents. Without limiting the generality of the foregoing, thc Agents (i) shall not be subject to any Iiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (ii) shall not have any duty to take Default or an Event of any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Agents are required to exercise as directed in writing by the Requisite Lenders (or such other number or percentage or the relevant Lenders as shall be necessary under the circumstances as provided in subsection 9.5), provided that no Agent shall be required to take any action that, in its opinion or the opinion of its counsel, may expose such Agent to liabilty or that is contrary to any Loan Document or applicable law and (iii) shall not, cxccpt as expressly set forth herein and in the
othcr Loan Documents have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrowers or any of their Affliates that is
communicated to or obtained by the Person serving as an Agent or any of its Affliates in any capacity. No Agent shall be liable to the Lenders for any action taken or not taken by it with the
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consent or at the request of the Requisite Lenders (or such other number or perccntage of the
Lenders as shall be necessary under the circumstances as provided in subsection 9.5) or in thc absencc of its own gross negligence or wilful misconduct. No Agent shall be deemed to have knowledge of any Defauli or Event of Default unless and until notice thereof is given in writing to such Agent by the Borrowers or a Lender. The Agents shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warrnty or representation made in or in connection with ihis Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection herewith or
the covenants, agreements or other terms therewith, (iii) the performance or observance ofany of or conditions set forth herein or therein or the occurrence of any Default or Event of Default,
(iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction of any
condition set forth in Section 3 or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Agents.

8.4 Reliance bv the Aeents.
The Agents shall be entitled to rely upon, and shall not incur any liabilty for relying
upon, any notice, request, certificate, consent, statement, instrument, documcnt or other writing (including any electronic message, posting or other distribution) believed by it in good faith to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Agents also may rely upon any statement made to it orally or by telephone and believed by it in good faith to have been made by the proper Person, and shall not incur any liability for relying
thereon. In determining compliance with any condition hereunder to the making of such Loan
that by its terms must be fulfilled to the satisfaction of a Lender, the Agents may presume that such condition is satisfactory to such Lender unless the Agents shall have received notice to the contrary from such Lcndcr prior to the making of such Loan. The Agents may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, aceountants or experts.
8.5 Dele~ation of
Duties.
Each Agent may perform any and all of its duties and exercise its rights and powers
hercunder or under any other Loan Document by or through anyone or more sub~agents
appointed by such Agent. The Agents and any such sub~agent may penorm any and all of its
duties and exercise its rights and powers by or through their respective Related Parties. The
exculpatory provisions of subsection 8.3 shall apply to any such sub~agent and to the Related Parties of such Agcnt and any such sub~agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as
such Agent.
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8.6 Rcsie:nation of Administrative Aeent and/or Collateral Ae:ent.
The Administrative Agent and/or Collateral Agent may at any time give notice of its resignation to the Lenders and the Borrowers, and the Administrative Agent and/or Collateral
Agent may be removed at any time with or without cause by the Requisite Lenders. Upon
receipt of any such notice of resignation or upon any such removal, the Requisite Lenders shall have the right, with the written consent of the Borrowers if no Default or Event of Default shall have occurred and be continuing (such consent not to be unreasonably withheld or delayed), to appoint a successor Administrative Agent and/or Collateral Agent, as applicable, which shall be a bank with an otfce in New York, or an Affliate of any such bank with an offce in New York. If no such successor shall have been so appointed by the Requisite Lenders and shall have accepted such appointment within ten (10) days after (i) the retiring Administrative Agent and/or Collateral Agent as the case may be, gives notice of its resignation, or (ii) after the removal of the Administrative Agent and/or Collateral Agent, as the case may be, then such resignation or
removal shall nonetheless become effective in accordance with such resignation notice or
removal instructions by the Requisite Lenders and (I) the retiring Administrative Agent and/or Collateral Agent, as applicable, shall be discharged from its duties and obligations hereunder and
under the other Loan Documents (except that in the case of any Collateral held by the
Administrative Agent and/or Collateral Agent, as applicable, on behalf of the Secured Parties under any of the Loan Documents, thc retiring Administrative Agent and/or Collateral Agent, as
applicable, may continue to hold such Collateral until such time as a successor Administrative
Agent and/or Collateral Agent, as applicable, is appointed and such Collateral is assigned to such ~uccessor Administrative Agent and/or Collateral Agent, as applicable) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent and/or Collateral Agent, as applicable, shall instead be made by or to each Lender directly,
until such time as the Requisite Lenders appoint a successor Administrative Agent and/or
Collateral Agent, as applicable, as provided for above in this paragraph (provided that the retiring Administrative Agent and/or Collatcral Agent, as applieable, may elect to receive and distribute payment as paying agent for the Lenders (in such capacity, the "Payine: Aeent") until such time
as a successor Administrative Agent and/or Collateral Agent, as applicable, is so appointed). Upon the acceptance of a successor's appointment as Administrtive Agent and/or Collateral Agent, as applicable hereunder, such successor shall succeed to and bccome vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent and/or Collateral Agent. as applicable, and the retiring Administrative Agent and/or Collateral Agent, as applicable shall be discharged from all of its duties and obligations hereunder or under the Loan Documents (if such rights and obligations were not earlier discharged as provided in ihe proviso
to the preceding sentence). The fees payable by the Borrowers to a successor Administrative
Agent and/or Collateral Agent, as applicable, shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrowers and such successor. After the
retiring Administrative Agent's and/or Collateral Agent's resignation or removal hereunder and
under the other Loan Documents, the provisions of this Section 8 and subsection 9.2 shall
continue iii effect for the benefit of such retiring Administrative Agent and/or Collateral Agent, as applicable, its sub~agents and thcir respective Relaled Parties in respect of any actions taken or
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omitted to be takcn by any of them wl1itc the retiring Administrative Agent and/or Collatcral Agent, as applicable w(ls acting in such capacity or as Paying Agent
8.7 Collateral Documents.
Each Lender hereby further authorizes the Collateral Agent to enter into each Collateral
Document, as secured party on behalf of and for the benefit of the Lenders and the other
beneficiaries named therein and agrees to be bound by the terms of each Collateral Document; provided that the Collateral Agent shall not enter into or consent to any Modification, termination or waiver of any provision contained in any Collateral Document without the prior
consent of the Requisite Lenders (or, if required pursuant to subsection 9.5, all the Lenders);
provided further, however, that, without further written consent or authorization from any
Lender, the Collateral Agent may execute any documents or instruments necessary to (a) effect the subordination of the Lien of the applicable Collateral Documcnt to an interest in any Real Property Collateral if required under this Agreement or any Collateral Documcnt or (b) effect the relcase of any asset constituting Collateral from the Lien of the applicable Collateral Document in the event that such asset is sold or othenvise disposcd of in a transaction effccted in accordance with subsection 6.9 or to thc cxtcnt otherwise rcquired by any Collateral Documcnt. Anything contained in any of the Loan Documents to the contrary notwithstanding (other than Section 9.3), the Borrowcrs, the Administrativc Agent, the Collateral Agent and each Lender agrees that (i) no Secured Party other than the Collateral Agent shall have any right individually to realize upon any of the Collateral or to cnforce any Collateral Document, it being undcrstood and agreed that all powers, rights and remedies under the Collateral Documents may be exercised solely by the Collateral Agent for the benefit of the Secured Parties named therein in
accordance with the terms thereof, and (ii) in the event of any exercise of remedies by the
Collateral Agent upon an Event of Default, the Collateral Agcnt or any Lender may be thc purchaser of any or all of thc Collateral at any private sale, public sale, or other disposition and the Collateral Agent, as agent for and representative of the Secured Parties (or any other Person if the Requisite Lenders shall agree in writing that such Person, and not the Collateral Agent,
shall act as agent and representative of the Secured Parties for thc purposes of such sale or
disposition) shall bc cntitled, for the purpose of bidding and making settlement or payment of
the
'purchas-e price for all or any portion of the Collateral sold at any such sale or disposition, to use
and apply any of the Obligations as a credit on account of the purchase price for any Collateral
payable by the Collateral Agent (or such other Person, if so designated by the Rcquisite Lenders) at such sale.
8.8 Non~Reliancc on Aeents and Other Lenders.
Each Lender acknowledges that it has, independently and without reliance upon any Agent or any other Lendcr or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and decision to cnter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon any Agent or any other Lender or any of their Rclatcd Parties and based on such documents
and information as it shall from time to time deem appropriate, continue to make its own
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decisions in taking or not taking action under or bascd upon this Agreement, any othcr Loan
Document or any related agreement or any document furnished hcreunder or thereunder.
SECTION 9. MISCELLANEOUS
9.1 Assiiinments and Participations in Loans.
A. Successors and Assigns Generally. The provisions of thil' Agreement shall be

inure to the bcnefit of the parties hereto and thcir respective successors and assigns pcrmitted hereby, except that the Borrowers may not assign or otherwise transfer any of their rights or obligations hereunder without the prior written consent of each Lender and the
binding upon and
Administrative Agent and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of
subsection 9.IB, (ii) by way of participation in accordance with the provisions of subsection
9.10 or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection 9.IF (and any other attempted assignment or transfcr by any part hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construcd to confer upon any Person (other than the parties hereto, their respective successors and assigns permittcd hereby, Participants to the extent provided in subsection 9.1D and, to the extent expressly contemplated hereby, the Relatcd Parties of each of the Administrative Agent and the Lenders)
any legal or equitablc right, remedy or claim under or by reason of
this Agreement.
D. Assignments by Lenders.
(i) Any Lender may at any time assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent of
the Administrative Agent and notice to the Borrowers; provided that (x) no consent of
the
Administrative Agent shall be rcquircd for an assignment to a Lender or an Affliate of a Lender or an Approved Fund with respect to a Lender and (y) failure to dcliver notice to the Borrowers shall not affect the validity of any assignment; and provided, further, that
(a) except in the case of an assignment of entire remaining amount of
the assigning Lendcr's Loans or in the case of an assignment to a Lendcr or an Affliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Loans subject to each such assignment (determined as of the date of thc Assignment Agreement with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000 or an integral multiple of $1,000,000 in excess thereof, unless the Administrative Agent otherwise consents;
(b) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under this Agreement with respect to the Commitments or Loans assigned; and
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(c) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment Agreement via an electronic settlement system acceptable to the Administrative Agent (or, if previously agreed with the
Adminislrative Agent, manually), and shall pay to the Administrative Agent a processing and recordation fee of $3,500 (which fee may be waived or reduced in
the sole discretion of the Administrative Agent and provided that only one such fee shall be payable in connection with simultaneous assignments to or by two or more Approved Funds), and the Eligible Assignee, if it shall not be a Lender,
shall deliver Lo the Administrative Agent an Administrative Questionnaire and if required, applicable tax forms.
(ii) Subject to acceptance and recording thercof by the Administrative Agent
pursuant to subsection 9.1C, from and after the effective date specified in each
Assignment Agreement, the Eligible Assignee thereunder shall be a party to this Agrecment and, to the extent of the interest assigned by such Assignment Agreement,
have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment
Agreement, be released from its obligations under this Agreement (and, in the case of an Assignment Agreement covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to
be entitled 10 the benefits of subsections 2.7 and 9.2 with respect to facts and
circumstances occurring prior to the etfective date of such assignment. An Eligible
Assignee shall not be entitled to receive any greater payment under subsection 2.7 than the assigning Lender would have been entitled to receive with respect to the Loan or portion of the Loan assigned to such Eligible Assignee, unless the grant to such Eligible Assignee is made with the Borrowers' prior written consent. Except in the case of an assignment to a Lender, an Affliate of a Lender, or an Approved Fund with respect to a
Lender, any assignment or transfer by a Lender of rights or obligations under this

Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in
accordance with subsection 9.1 D.
C. The Register. The Administrativc Agent, acting solely for this purpose as an
agent of the Borrowers, shall maintain at one of its offces in New York a copy of each
Assignment Agreemcnt delivered to it and a register for the rccordation of the names and the Lenders and principal amounts of the Loans (each, a "Reeistered Loan") owing addrcsscs of to, each Lender pursuant to the terms hereof from time to time (the "Rel!istcr"). The entries in the Registcr shall be conclusive, and the Borrowers, the Administrative Agent and the Lenders may trcat cach Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to thc contrary. The Register shall be available for inspection by the Borrowers at any reasonable time and from time to time upon reasonable prior notice.
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D. P:irticipations. Any Lender may at any time, without the consent of, or notice to,
the Borrowcrs or the Administrative Agcnt, sell participations to any Person (other than a natural
person or a Borrower or any of the Affliates or Subsidiaries of a Borrowcr) (each, a

"Participant") in all or a portion of such Lender's rights and/or obligations under this
Agreement (including all or a portion of
the Loans owing to it); provided that
(i) such Lender's obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations,

(iii) the Borrowers, the Administrative Agent and the other Lenders shall
continue to deal solcly and directly with such Lender in connection with such Lender's rights and obligations under this Agreement, and
(iv) in the event (hat any Lender sells participations in a Registered Loan, such
Lender shall maintain a register on which it enters the namc of all participants in the Registered Loans held by it (the "Participant Ree:ister"). A Registcred Loan (and the
registered note, jf any, evidencing the same) may be participated in whole or in part only by registration of such participation on the Participant Register (and each registered note
shall expressly so provide). Any participation of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by the registration of such participation on the Participant Register.
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lendcr shall retain the sole right to enforce this Agreement and to approve any Modification or waiver of any provision of this Agreement; provided that such agreement or the Participant, agree to instrument may provide that such Lender wil not, without thc consent of
any Modification or waiver with respcct to any action (i) increasing the Commitments,
(ii) effecting the extension of the tinal maturity of the Loan allocated to such participation, (iii) effecting a reduction of the principal amount of or affecting the rate of interest payable on any Loan or any fee allocated to such participation, (iv) releasing all or substantially all of the Collateral or (v) releasing all or substantially all of the Subsidiary Guarantors from their
obligations under the Guaranties. Subject to subsection 9.IE, the Borrowers agree that each
Participant shall be entitled to thc bcnefits of subsection 2.6D and subsection 2.7 to the same extcnt as if it wcre a Lendcr and had acquired its interest by assignment pursuant to subsection
9.1 B; provided that sueh Participant agrees to be subject to subsection 2.8 as though it were a lender. To the extent permitted by law, each Participant also shall bc entitled to the benefits of subsection 9.3 as though it were a Lender, provided such Participant agrees to be subject to
subsection 9.4 as though it were a Lender.
E. Limitations Upon Participant Rights. A Particpant shall not be cntitled to

receive any greater payment under subsection 2.7 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrowers' prior written consent. Without
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the foregoing, a Pai1icipant that would be a Foreign Lender ifit were a subsection 2.7E unless the Borrowers arc notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with subsection 2.7E(v) as though it werc a Lender.
limiting the generality of Lender shall not be entitled 10 the benefits of
F. Certain Pledges. Any Lender may, without the consent of the Borrowcrs or the
Administrative Agent, at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall relcase such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto. Notwithstanding
anything to the contrary contained herein, any Lender that is a Fund may, without the consent of the Borrowers or the Administrative Agent, create a security interest in all or any portion of the Loans owing to it and the Notes, if any, held by it to the trustee for holders of obligations owed,
or Securities issued, by such Fund as security for such obligations or Securities; provided that
unless and until such trustee actually becomes a Lender in compliance with the other provisions
of this subsection 9.1, (i) no such pledge shall release the pledging Lender from any of its
obligations under this Agreement and (ii) such trustee shall not be entitled to exercise any of
the
rights of a Lender under this Agrecmcnt and the Notes even though such trustee may have
acquired ownership rights with respect to the pledged interest through foreclosure or otherwise.
G. SPV Lender. Notwithstanding anything to the contrary contained herein, any Lender (a "Grantine Lender") may grant to a special purpose funding vehicle (a "SPV"), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrowers, the option to provide to the Borrowers all or any part of any Loan that such Granting Lender would otherwise be obligated to make the Borrowers pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPY to make any Loan, (ii) if an Spy elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof. The making of a Loan by an SPY hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender.
obligation under this Agreement (all
Each party hcreto hereby agrees that no SPY shall be liable for any indemnity or similar payment liabilty for which shall remain with the Granting Lender).
An SPY shall not be entitled to receive any greater payment under subsection 2.7 that the
Granting Lender would have been entitled to receive with respect to the Loan or portion of the
Loan granted to such SPY, unless the grant to such SPY is made with the Borrowers' prior
written consent. In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of
this Agreement) that, prior to the date that is one year
and one day after the payment in full of all outstanding commercial papcr or other senior
indebtedness of any SPY, it wil not institute against, or join any other Person in instituting
against, such SPY any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof. In addition,
notwithstanding anything to the contrary contained in this subsection 9.1, any Spy may (i) with notice to, but without the prior written consent of, ihe Borrowers and the Administrative Agent
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PRELIMINARY DRAFT
SUBJECT TO MODI
FICA TION
and without paying any processing fee therefore, assign all or a portion of its interests in any Loans to the Granting Lender or to any financial institutions (consented to by the Borrowers and
Administrative Agent) providing liquidity and/or credit support to or for the account of such SPY
to support the funding or maintenance of
Loans and (i) disclose on a confidential basis any noo-
public information relating to its Loans to any rating agency, commercial paper dealer or
provider of any surety, guarantee or credit or liquidity enhancement to such SPY. This subsection 9.1 may not be Modified without the writtcn consent ofthc SPY.
9.2 Expenses; Indemnity; Damal!e Waiver.
A. Costs and Expenses. Each of the Borrowers shall pay all actual and documented out~of-pocket expenses incurred by each Agcnt and its Affliates (and any Person designated by
the Requisite Lenders to act on behalf of the Sccured Parties in accordance with Section 8.7
hereof), including the reasonable and documcnted fees, charges and disbursements of its
appraiser, counsel (including, without limitation, special and local counsel) for each Agent and
its Affliates (or any such Person) (and fees and time charges for attorneys who may be employees of such Agent or Affliates or any such Person) and fiing and recording fees and expenses, in connection with any syndication of the credit facilities provided for herein, the
development, preparation, negotiation, execution, delivery, closing, funding, and administration of this Agreemenl and the other Loan Documents, any Modifications or waivers oftlie provisions
hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be
consummated), or in connection with the enforcement or protection of its rights in connection with this Agreement and the other Loan Documents, including its rights under this
subsection 9.2A, or in connection with the Loans made hereunder, including all such out-of~
pocket expenses ineurrcd during any workout, restrur.turing or negotiations in respect of such
Loans.
B. Indemnifcation by the Borrowers. Each of the Borrowers shall indemnify each Agent (and any sub~Agent thereof and any Person designated by the Requisite Lenders to act on
behalf of the Secured Parties in accordance with Section 8.7 hereof), each Lender, their
respectivc successors and assigns and each Related Party of any of the foregoing Persons (each
such Person bcing called an "Indemnitee") againsi, and hold each Indemnitee hannless from,
any and all cosls, losses, claims, damages, liabilties and expenses (including, withouilimitation,
the reasonable fees, charges and disbursements of any counsel and consultants for any
Indemnitee (and fees and time charges for attorneys who may be employees of any Indemnitee)) of any kind or nature whatsoever, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution, delivery, cnforcement or administration of this Agreement, any other Loan Document or any agrcemcnt or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the transactions contemplated hcreby or thercby, (ii) any Loan or the use of the proceeds therefrom, (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property, any Environmental Claim or any Environmental Liabilities related in any way to any Borrower or any of its Subsidiaries, (iv) any claim, demand or liability for any brokerage
commissions, or broker's or finder's fees or investment banking or similar fees incurred or
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allcged to have been incurred in connection with the transaction contemplated hereby, and any claim, demand or liability relating thereto or (v) any actual or prospective claim, litigation, investigation or proceeding relating to any of he foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto (and regardless of whether such maHer is initiated by a third part or by the Borrowers or any of their respective
Affliates); provided that such indemnity shall not, as to any Indemnitee, be available to the
extent that such costs, losses, claims, damages, liabilities and expenses are determined by
a court
of competent jurisdiction by tinal and nonappealable judgment to have resulted primarily from the gross negligence or wilful misconduct of such Indemnitee.
C. Reimbursement by the Lenders. To the extent that a Borrower fails to pay any
amount required under subsection 9.2A or 9.2B to be paid by it to any Agent (or any sub~Agent
thereof and any Person designated by the Requisite Lenders to act on behalf of the Secured
Parties in accordance with Section 8.7 hereof) or any Related Party of any of
the foregoing, each
Lender severally agrees to pay to the Agent (or any such sub~Agent or such Person) or such Related Party, as the case may be, such L.ender's Pro Rata Share (determined as of the iime that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against such Agent (or any such suhw
Agent) in its capacity as such, or against any Relatcd Party of any of the foregoing acting for
such Agent (or any such sub~Agent) in connection with such capacity. The obligations of
the
Lenders under this subsection 9.2C are subject to the provisions of subsection 9.12.
D. Waiver of Consequential Damages. To the fullest extent pennitted by

Applicable Law, each of the Borrowers shall not assert, and hereby waives, any clam against
any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or ;:ctual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnitee referrcd to in subsection 9.2B above shall be liable for any damages
arising from the use by unintended rccipicnts of any information or other materials distributed by
it through telecommunications, clectronic or other infonnation transmission systems in
connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby, unless such damages are directly caused solely by the gross negligence or willful misconduct of such Indemnitee as determined by a court of competent jurisdiction by final and nonappealable judgment.
E. Payments. All amounts due under this subsection 9.2 shall be payable promptly
after demand thcrcfor.
9.3 Ri2ht of Set-Off.
shall have occurred and be continuing, each Agent, Lcnder and cach of
Without limitation of any other rights of the Agcnts or Lenders, if an Event of Default their respective Affliates is hereby authorized at any time and from iime to time, to the fullest extent permitted by
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Applicable La\\1, to set ofT and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any timc held and other obligations (in whatever currency) at any time owing by such Agent, Lender, or any such Affliate to or for the credit or
the account of a Borrower against any and all of the Obligations of the Borrowers now or
hereafter existing under this Agreement or any other Loan Document to sueh Agent or Lender,
irrespective of whether or not such Lender shall have made any demand under this Agreement or
any other Loan Document and although such Obligations of
the Borrowers may be contingent or
unmatured or are owed to a branch or offce of such Lender different from the branch or offce holding such deposit or obligated on such indebtedness. The rights of each Agent, Lender and their respective Affliates under this subsection 9.3 are in addition to other rights and remedies (including other rights of setoff which such Agent, Lender or their respective Affliates may
have. Each Agent and Lender agrees promptly to notify the Borrowers and the Administrative
affect the validity of such setoff
Agent after any such setoff and application; provided that the failure to give such notice shall not and application.
9.4 Sharine of Payments by Lenders.
If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal or or interest on any of its Loans or other obligations
hereunder resulting in such Lcnder's receiving payment ora proportion of
the aggregate amount
of its Loans and accrued interest thereon or other such obligations greater than its Pro Rata Share thereof as provided herein, then thc Lcnder receiving such greater proportion shall (a) notify the Administrative Agent of such fact and (b) purchase (for Cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustmcnts as shall
be equitable, to the end that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respcctive Loans and other amounts owing them; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is recovered, such
participations shaH be rcscindcd and the purchase price restored to the extent of such recovery,
this paragraph shall not be construed to apply to (x) any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or salc of a participation in any of its Loans to any assignee or participant, other than to a Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply). Each of the Borrowers consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against any Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lendcr were a direct creditor of such Borrower in the amount of
without interest and (ii) the provisions of
such participation.
9.5 Amendments and Waivers.
A. Amendment and Waivers. No Modilication, termination or waiver of any provision of this Agreement, of the Notes or of any other Loan Document, or consent to any
departurc by any Borrower or any other Loan Part therefrom, shall in any event be effective
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without the written concurrence of the Requisite Lenders and each Loan Part that is party to thc relevant Loan Document; provided that any such Modification, termination, waiver or consent
which: (a) reduces or forgives the principal amount of any of the Loans; (b) reduces the
percentage specified in the definition of the "Requisite Lenders" (it being understood that, with the consent of the Requisite Lenders, additional extcnsions of credit pursuant to this Agreement the "Requisite Lcnders" on substantially the same basis as may be included in the definition of the Loans are included on the Effective Date); (c) changes in any manner any provision of this
Agreement which, by its terms, expressly requires the approval or concurrence of all thc
Lenders; (d) postpones the scheduled final maturity date of any of the Loans; (e) postpones the principal of any of the Loans; (I) postponcs thc date on which any interest, any fees or any amounts due undcr subsections 2.4B(i)(b), 2.4B(ii)(d) or 2.4B(ii)(f) are payable; (g) decreases the interest rate borne any increase in the intercst rate applicable to any by any oCthe Loans (other than any waiver of of (he Loans pursuant to subsection 2.2E) or the amount of any fees payable hereunder or any
date or reduces the amount of any scheduled payment (but not prepayment) of
amounts payable under subscctions 2.4B()(b), 2.4B(ii)(d) or 2.4B(ii)(f); (h) increases the
maximum duration of Interest Periods permitted hereunder; (i) releases all or substantially all or the Collateral; u) except as provided in any applicable Guaranty or in connection with Asset
Sales to the extent permitted under subsection 6.9, releases aU or substantially all of the Subsidiary Guarantors from their obligations undcr the Guarantics; (k) changes subsections
2.4D(iii) or 9.4 or Modifies the definition of "Pro Rata Share" in a manner that would alter the pro rata sharing of payments required thcrcby; or (I) changes in any manner the provisions contained in this subscction 9.5, shall be effective only if cvidenced by a writing signcd by or on
bchalf of all thc Lcnders to whom Obligations are owed being directly affected by such
Modification, termination, waiver or consent (the consent of the Requisite Lenders not being
required for any such change); provided. furter, that any Modification, termination, waiver or
consent which Modifies the definition of "Approved fund," "Eligible Assignee," or "Fund," shall be effective only if evidenced by a written concurrence of the Requisite Lenders and the
Administrative Agent. In addition, (i) no Modification, tennination or waiver of any provision of
any Note shall be effective without the written concurrencc of the Lender which is the holder of that Note and (ii) no Modification, tennination or waiver of any provision of Section 8 or of any
other provision of this Agreement which, by its terms, expressly requires the approval or
concurrcnce of thc Administrative Agent or the Collateral Agent shall be effective without the written concurrence of the Administrative Agent or the Collateral Agent, as applicable. Any waivcr or consent shall be effective only in the specific instance and for the specific purpose for
which it was given. No notice to or demand on any Borrower in any ease shall entitle the Borrowers to any other or further notice or demand in similar or other circumstaces. Any
Modification, termination, waiver or consent effected in accordance with this subsection 9.5 shall be binding upon each Lender at the time outstanding, each future Lender and, if signed by the
Borrowers, on the Borrowers. Notwithstanding the foregoing, this Agreement may be Modified
(or amended and restated) with the written consent of the Requisite Lcnders, the Administrative Agent and the Borrowers (a) to add onc or morc additional credit facilities to this Agreemcnt and
to permit thc cxtcnsions of credit from time to time outstanding thereunder and the accrued
interest and fees iii rcspect thereof
this Agreement and the other Loan Documents with the Loans and the accrued interest and fees in respect thereof and (b) to
to share ratably in the bencfits of
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include appropriately the Lenders holding such credit facilties in any determination of the
Requisite Lenders.
. Non-Consenting Lenders. Each Lender grants to the Borrowers the right to cause an assignment of all (but not less than all) of such Lender's Loans owing to it, its
participations in the Notes held by it and all of its rights and obligations hereunder and under the
other Loan Documents to Eligible Assignees, which right may be exercised by the
Administrative Agent or the Borrowers, as the case may be, if such Lender (a "Non~Consentine: Lender") refuses to execute any Modification, waiver or consent which requires the written
consent of Lenders other than Requisite Lenders and to which the Requisite Lenders, the
Administrative Agent and the Borrowers have otherwise agreed; provided that (i) such
Non~Consenting Lender (a "Terminated Lender") shall receive, in connection with such assignments, payment equal to the aggregate amount of outstanding Loans owed to such
Tenninated Lender (together with all accrued and unpaid interest, fees and other amounts (other
than indemnities) owed to such Tenninated Lender), ii an amount equal to the prepayment
premium, if any, that would be payable in respect of the Loans of such Terminated Lender upon prepayment thereof pursuant to subsection 2.4B(i), (ii) the Borrowers shall have exercised such right in respect of each such Non-Consenting Lender and (iii) each such Eligible Assignee shall
consent, at the time of such assignment, to each matter in respect of which such Tenninated Lender was a Non-Consenting Lender. Each Lender agrees that if the Administrative Agent or the Borrowers, as the case may be, exercises their option hereunder, it shall promptly execute and deliver all agreements and documentation necessary to effectuate such assignment as set forth in subsection 9.1. The Borrowers shall be cntitled (but not obligated) to execute and
deliver such agreement and documentation on behalf of such Non~Consenting Lcnder and any
such agreement and/or documentation so executed by the Borrowers shall be effective for
purposes of
documenting an assignment pursuant to subsection 9.1.
9.6 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a particular action or condition is not pennittcd by any of such covenants, the fact that it would be pennitted by an execption to, or would otherwise be within the limitations of, another such covenant shall not
avoid the occurrence of a Default or Evcnt of
Default if such action is taken or condition exists.
9.7 Notices.
A. Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as providcd in subsection 9.7B below),
all notices and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or registered mail or sent by to the Administrative Agent, telecopier as follows: (i) if to the Borrowers, ( I; (ii) if to a Lender, to it at its the Collateral Agent, or to I 1 at I I; and (iii) if address (or telecopier number) set forth in its Administrative Questionnaire. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopicr shall be deemcd to have been given
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when sent (except that, if not given during normal business hours for the recipient, shall be
deemed to have been givcn at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in subsection 9.7B
below, shall be effective as provided in said subsection 9.78.
B. Eleclronc Communications.
(i) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communication (including e~mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent,
provided that thc foregoing shall not apply to notices to any Lender pursuant to
subsection 2.1, if
such Lender has notified the Administrative Agent that it is incapable of
receiving notices under such subsection by electronic communication. Each of the Administrative Agent and the Borrowers may, in their respective discretion, agree to
accept notices and other communications hereunder via electronic communications pursuant to procedures approyed by the Administrative Agent or the Borrowers,
respectively; provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes,
(i) notices and other communications sent to an e-mail address shall be deemed received upon the scnder's receipt of an acknowledgment from the intended recipient (such as by
the "return receipt requested" function, as available, rcturn c~mail or other written
acknowledgment), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall bc deemed to have been sent at the opening of business on the next Business Day for the recipient
and (ii) notices or communications posted to an Internct or intranet website shall be

deemed receivcd upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clausc (i) of notifcation that such notice or communication is available and identifying the websitc address therefor.
(ii) Each of the Borrowers hereby agrees, unless directed otherwise by the
Administrative Agent or unless the clectronic mail address referred to below has not been
provided by the Administrative Agent to the Borrowers, that it wil, or wil cause its
Subsidiaries to, provide to the Administrative Agent all information, documents and other materials that it is obligated to furnish to the Administrative Agent pursuant to the Loan
Documents, or to the Lenders under subsection 5.2, including all notices, requests,
financial statements, financial and other reports, certificates and other information
materials, but excluding any such communication that (i) relates to the payment of any
or Event of
principal or other amount due under this Agreement, (ii) provides notice of any Default Default under this Agreement or any other Loan Document, (iii) is required to be delivered to satisfy any condition precedent to the effectiveness of this Agreement and/or the incurrence of the Loans or (iv) relates to Specified Encumbrances (all such
non~excluded communications being referred to herein collectively as
"Communications"), by transmitting the Communications in an electronic/soft medium

that is properly identified in a format acceptable to the Administrative Agent to
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PRELIMINARY DRAFT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
SUBJECT
( L (or at such other electronic mail address as directed by the
the Borrowers agrees, and agrees to cause its Subsidiaries, to continue to provide the Communications to the Administrative Agent or the Lenders, as the case may be, in the manner specified in the Loan Documents but only to the extent requested by the Administrative Agent. Each of the Borrowers furthcr
Administrative Agent). In addition, each of
agrees that the Administrative Agent may make the Communications available to the Lcnders by posting the Communications on lntralinks or a substantially similar electronic
transmission system.
C. Change of Address. Any party hereto may change its address or telecopier
number for notices and other eommun ications hereunder by notice to the other parties hereto.
9.8 Survival of
Representations. Warranties and Aiireements.
A. All representations, warranties and agreements made herein shall survive the
cxccution and delivery of this Agreement and the making of
the Loans hereunder.
B. Notwithstanding anything in this Agreement or implicd by law to the contrary, thc agreements of the Borrowers set forth in subsections 2.6D, 2.7, 9.2, 9.3 and 9.18 and the agrecments of the Lenders set forth in subsections 8.2, 8.3, 8.4, 9.2C, 9.3, 9.4 and 9.19 shall
survive the payment of the Loans and thc rcimbursemcnt of any amounts drawn or paid
thereunder, and the termination of
this Agreemcnt.
9.9 Failure or Induliience Not Waiver; Remedies Cumulative.
No failure or delay on the part of any Agent or any Lender in the exercise of any power, right or privilege hereunder or under any other Loan Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise
thereof or of any other power, right or privilege. All rights and remedies existing under this
Agreement and the other Loan Documents arc cumulative to, and not cxclusive of, any rights or remedies otherwise available.
9.10 Marshallnii; Payments Set Asidc.
Neither any Agent nor any Lender shall be under any obligation to marshal any assets in
favor of the Borrowers or any other party or against or in payment of any or all of the Obligations. To the extent that any Borrower makes a payment or payments to the
Administrative Agent or the Lcndcrs (or to the Administrative Agent or Collateral Agent for the
benefit of the Lenders), or any Agent or the Lenders enforce any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or sctoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receivcr or any other party under any law, common law or any equitable cause, then, to the bankruptcy law, any other state or federal extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all
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Liens, rights and remedies therefor or related thcreto, shall be revived and continued in rull force and effect as if such payment or payments had not been made or such enforcement or sctoff had not occurred.
9.11 Severability.
In case any provision in or obligation under this Agrecment or the Notes shall be invalid,
ilegal or unenforceable in any jurisdiction, the validity, legality and enforceabilty of the
rcmaining provisions or obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.

9.12 Oblieations Scveral~ Independent Nature of
the Lenders' Riehts.
Thc obligations of the Lenders hereunder are several and no Lender shall be responsible for the obligations or Commitments of any other Lendcr hcreunder. Nothing contained herein or in any other Loan Document, and no action taken by the Lenders pursuant hereto or thereto, shall be dcemcd to constitutc the Lenders as a partnership, an association, a joint venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and each Lcnder shall be entitled to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for siich purpose.
9.13 Maximum Amount.
A. It is the intention of the Borrowers and the Lenders to conform strictly to the
usury and similar laws relating to interest from time to time in force, and all agrccments between the Loan Parties and their respective Subsidiaries and the Lenders, whether now existing or
hereafter arising and whether oral or written, are hereby expressly limited so that in no
contingency or event whatsoever, whether by acceleration of maturity hereof or otherwise, shall the amount paid or agreed to be paid in the aggregate to the Lcnders as interest (whether or not designated as interest, and including any amount otherwise designated but deemed to constitute interest by a court of competenijurisdiction) hercunder or under the other Loan Documcnts or in any other agreement given to secure thc Indebtcdness or obligations of the Borrowers to the
Lenders, or in any othcr document evidencing, securing or pcrtaining to the Indebtedness evidenced hereby, exceed the maximum amount permissible undcr applicable usury or such
other laws (the "Maximum Amount"). If undcr any circumstances whatsoever fulfillment of any provision hereof, or any of the other Loan Documents, at the time pcrformance of such provision
shall be due, shall involve excceding thc Maximum Amount, then, ipso facto, the obligation to
be fulfilled shall bc reduced to the Maximum Amount. For the purposes of calculating the actual amount of intcrest paid and/or payable hereunder in respect of laws pertaining to usury or such other laws, all slims paid or agreed to be paid to the holder hereof for the use, forbearance or detention of the Indebtedness or the Borrowers evidenced hercby, outstanding from time to time shall, to the extent permitted by Applicable Law, be amortized, pro~ratcd, allocated and spread from the dale of disbursement of thc proceeds of ihe Notes until payment in full of all of such Indcbtedness, so that the actual rate of interest on account of such Indebtedncss is uniform
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through the tcrm hereof. The terms and provisions of Ihis subsection shall control and supersede every other provision of all agreements between the Borrowers or any endorser of the Notes and
the Lenders.
. If under any circumstanccs any Lender shall ever receive an amount which would
exceed the Maximum Amount, such amount shall be deemed a payment in rcduction of the principal amount of the Loans and shall be treated as a voluntary prepayment under subsection
2.4B(i) and shall be so applied in accordance with subsection 2.4 hereof or if such excessive
interest exceeds the unpaid balance of the Loans and any other Indebtedness of the Borrowers in favor of such Lender, the excess shall be deemed to have been a payment made by mistake and
shall bc refunded to the Borrowers.
9.14 Headine.s.
reference only and shall not constitute a part of
Section and subsection hcadings in this Agrcement are included herein for convenience of this Agreement for any other purpose or be given
any substantive effect.

9.15 Applicable Law.
Tiiis AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE

CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
9.16 Successors and Assi~ns.
This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of
the Lenders (it being understood that the Lenders' rights of assignment are subject to
subsection 9.1). Neither the Borrowers' rights or obligations hereunder nor any interest therein may be assigned or delegated by any Borrwer without the prior wriUen consent of all Lenders.
9.17 Consent to Jurisdiction and Service of
Process.
A. SUBMISSION TO .JRISDICTION. EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF (i) THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY AND OF THE UNITED STATES DISTRICT COURT SITTING IN NEW YORK CITY, (ii) THE COURTS OF THE STATE OF NEVADA SITTING IN CLARK COUNTY AND OF THE UNITED STATES DISTRICT COURT SITTING IN CLAR COUNTY, (ii) THE COURTS OF THE STATE OF ARZONA SITTING IN KINGMAN AND OF THE UNITED STATES
DISTRICT COURT SITTING IN PHOENIX AND (iv) ANY APPELLATE COURT l'ROM
ANY THEREOl~ IN ANY ACTION OR PROCEEDING ARISING OUT OF OR

RELATING TO TIlS AGREEMENT OR ANY OTHER LOAN DOCUMENT TO THE
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EXTENT SUCH COURTS WOULD HAVE SUBJECT MATTER JURISDICTION WITH RESPECT THERETO, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW SUCH ARIZONA YORK STATE COURT OR SUCH NEVADA STATE COURT OR STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, IN ANY SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES
THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT, THE COLLATERA AGENT OR
ANY
LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING

RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST A BORROWER OR ITS PROPERTIES IN THE COURTS OF THE STATE OF NEW YORK OR THE STATE OF NEVADA OR THE STATE OF ARIZONA OR TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN ANY OF THE UNITED
STATES DISTRICT COURT SITTING IN NEW YORK CITY OR ANY UNITED

STATES DISTRICT COURT Sln'ING IN CLAR COUNTY OR ANY UNITED STATES
DISTRICT COURT SITTING IN PHOENIX. EACH m' THE PARTIES HERETO

IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT IT IS NOT SUBJECT

PERSONALLY TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK OR THE STATE OF NEVADA OR THE STATE OF ARIZONA, OR THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION.
B. WAIVER OF VENUE. EACH OF THE PARTIES HERETO

IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR

PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN SUBSECTION 9.17A. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE m' SUCH ACTION OR

PROCEEDING IN ANY SUCH COURT.
C. Service of Process. Each part hereto irrevocably consenls to service of process in the manner provided for notices in subsection 9.7. Nothing in this Agreemenl wil affect the right of any party hereto to serve process in any other manner permittcd by applicable law.
9.18 Waiver of JUry TriaL.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE

FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAV HAVE
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TO A TRIAL BY .JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRASACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND

(B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE LOAN DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
9.19 Confidentiality.
Each of thc Agents and the Lenders agrees to maintain the confidentiality of the Jnformation (as defined below), except that Information may be disclosed (a) to it, its Affliates' and their rcspective partners, directors, offcers, employees, advisors and representatives (it being
understood that the Persons to whom such disclosure is madc will bc informed of the
confidential nature of such Information and instructed to keep such Information confidential as provided hercin), (b) to the extent requested by any Govcrnmental Authority (including, without
limitation, any self~regulatory authority, such as thc National Association of Insurance Commissioners), (c) to the extent required by Applicable. Laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or
proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereundcr, (f) subject to an agreemcnt containing provisions substantially the same
as those of this subsection 9.19, to (i) any assignee or pledgee of or Participant in, or any prospective assignee or pledgee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrowers and their obligations, (g) with the consent of the Borrowers or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this subsection or (y) becomcs available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than a Borrower or any of its Subsidiaries or Allliates.
For purposes of this subsection 9. i 9, "Information" means all written information

received from a Borrower or any of its Subsidiaries or Affliates relating to a Borrower or any of its Subsidiaries or any of their rcspcctive businesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidcntial basis prior to disclosure by a Borrower, which to the extcnt rceeived on or after the date hcreof, is identified as
confidential by the Borrowers. Any Person required to maintain the confidcntiality of

Information as provided in this subsection 9. i 9 shall be considered to have complied with its
obligation to do so if such Pcrson has cxercised the samc degree of care to maintain the
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confidcntiality of such Information as such Person would accord to its own confidential information.
9.20 Borrowers' Responsibilty For Compliance With Environmental Laws.
Nothing in this agrcement is intended, or shall be deemed, to relievc the Borrowers or any Subsidiary of their obligations under Environmental Laws, or to condone or encourage any disregard of such obligations, or to make any Agent or any orthe Lendcrs in any way responsible under Environmental Laws or otherwise for the ownership or operation of the Real Property
Asscts. Thc Borrowers shall retain all responsibility for compliance with Environmental Laws, including proper management of all Hazardous Materials.
9.21 Joint and Several Liability.

The Borrowcrs shall be jointly and severally liable for all amounts due to the Agents and Lenders undcr this Agreement and thc other Loan Documents, regardless of which Borrower
the Loans or the manner in which any Agent or Lender accounts for the Loans on its books and records. Each Borrowcr's Obligations, and each Borrwer's Obligations arising as a result of the joint and several liabilities of the Borrowers hereunder, shall be separate and distinct obligations, but all such Obligations shall be primary obligations of each liability of the Borrower. Each Borrower's Obligations arising as a result of the joint and several 13orrowers hereunder shall, to the fullcst extent permitted by law, be continuing, absolute and
actually receives the proceeds of
unconditional irrespective of (a) the validity, regularity or enforceability, avoidance or

subordination of or any part of
the Obligations or the other Borrowers or or any Loan Document evidencing all
the Obligations of the other Borrowers, or of any other collateral security therefor or guaranty or right of offset with respect thereto at any time or from time to time held by the Collateral Agent or any other Securcd Party, (b) any defense, set~offor counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any of the other Borrowers against the Collateral Agent or any other Secured Part (c) the absence of the Obligations, (d) the notice of the creation, renewal, extension or accrual of any of absence of any attcmpt to collect the Obligations from the other Borrowers or any other sccurity therefor, or the abscncc of any other action to enforce thc same or to exercise any right of offset, any indulgence by the Agents and (e) the waiver, consent, extension, forbearance or granting of the Requisite Lenders with respect to any provision of any instrumcnt evidencing the Obligations of the other Borrowers, or any part ihereof, or any other agreement now or hereafter executed by
the other Borrowers and delivered to the Agents and the Lenders, (1) the failure by Collateral
Agent to take any steps to pcrfect and maintain its security interest in, or to preserve its rights to, any security or Collateral of the other Borrowers, (g) any election in any proceeding instituted undcr the Bankruptcy Code of the application of Section~11 I i (b)(2) of the Bankruptcy Code, (h) any borrowing or grant of a security interest by the other Borrowers, as debtors-inMposscssion under Section 364 ofihe Bankruptcy Code, (i) the disallowance of all or any portion of any claim
by any Agent or Lender for the repayment of the Obligations of the other Borrowers under
Section 502 of the Bankruptcy Code or U) any other circumstances whatsoever (with or without notice to or knowledge of any of the Borrowers) which might constitute a legal or equitable discharge or defense or the other Borrowers in bankruptcy or in any other instance. With respcct
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10 each Borrower's Obligations arismg as a result of the joint and several liabilty of the
Borrowers under this Agreement and the other Loan Documents, each Borrower waives
diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any of the Borrowers with respect to the Obligations. With respect to each Borrower's
Obligations arising as a result of the joint and several liability of the Borrowers under this
Agreement and the other Loan Documents, each Borrower waiyes, until the Obligations shall
have been paid in full in immediately available funds and the Agreement shall have been
terminated, any right to enforce any right of subrogation or any remedy which any Agent or Lender now has or may hereafter have against such Borrower, any endorser or any guarantor of all or any part of the Obligations, and any benefit of, and any right to participate in, any securily or collateral given to any Agent or Lender to secure payment of the Obligations or any other liability of the Borrowers to any Agent or Lender. Upon and during the continuance or any Event of Default, the Agents or any other Seeured Party may proceed directly and at once, without notice, to pursue its rights and remedies against any Borrower to collect and recover the full amount, or any portion of the Obligations, without first proceeding against, or making a similar demand on, any other Borrower or any other Person, or against any security or collateral for the Obligations (or exercising any right of offset with respect thereto), and any failure by the Agents or any other Secured Party to make a similar demand on, or to pursue its rights and
remedies or to collect and recover the Obligations from, any other Borrower or any other Person, or against any security or collateral for the Obligations or right of offset, shall not relieve any Borrower of any obligation or Iiablty hereunder, and shall not impair or effect the rights and remedies, whether express, implied or available as a matter of law, of the Agents or any other Secured Part against any Borrower. Without limiting the generality of any other waiver
contained herein, each Borrower waives any right to require any Agent or any other Secured Party Lo: (i) proceed against any other Borrower or any other Person; (ii) proceed against or exhaust any collateral including, without limitation, the Collateral; or (ii) pursue any other right or remedy for such Borrower's benefit. Each Borrower agrees that each Agent and each other
Secured Part may proceed against such Borrower with respect to the Obligations without taking
any actions against any other Borrower or any other Person and without proceeding against or exhausting any collateral including, without limitation, the CollateraL. Each Borrower agrees
that each of the Agents and the other Secured Parties may unqualifiedly exercise in its sole discretion any or all rights and remedies available to it against any other Borrower without
impairing such Agent's or such other Secured Part's rights and remedies in enforcing the Loan Documents, under which sueh Borrower's liabilities shall remain independent and unconditionaL. Each Borrower agrees and acknowledges that any Agent's or any other Secured Party's exercise
of ccitain of such rights or remedies may affeet or eliminate such Borrower's right of
subrogation or recovery against any other Borrower and that such Borrower may incur a partially or totally nonreimbursable liability in performing under the Loan Documents. Without limiting the generality of any other waivers hereunder, each Borrower expressly waives any siatutory or other right that such Borrower might otherwise have to: (A) limit such Borrower's liabilty after a nonjudicial foreclosure sale to the difference between the Obligations and the fair market value
of the property or interests sold at such nonjudicial foreclosure sale or to any other extent;
(B) otherwise limit any Agent's or any other Secured Party's right to recover a deficiency
judgment aftcr any foreclosure sale; or (C) require any Agent or any other Secured Party to
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exhaust its collateral before any Agent or any Secured Party may obtain a personal judgment for
any deficiency. Without limiting the generality of any other waiver contained herein, each Borrower waives all rights and defenses that such Borrower may have because any other orrowcr's Obligations are (or may be) secured by real property. This means, among other things, (i) any Agent or any other Secured Party may collect from such Borrower without first
foreclosing on any real or personal property collateral pledgcd by any other Borrower, and (ii) if any Agent forecloses on any real property collateral pledged by any Borrower, (A) the amount of the Obligations may be reduced only by that portion of the price for which that collateral is sold at a foreclosure sale, even if the collateral is worth more than the sale price and (B) the Agents and the other Secured Parties may collect from such Borrower even if the Agents, by foreclosing
on the real propert collateral, has destroyed any right such Borrower may have to collect from any other Borrower. The foregoing waiver is an unconditional and irrevocable waiver of any rights and defcnses any Borrower may have because any other Borrowcr's Obligations are
secured by real properly. Without limiting the gcncrality of any other waiver contained herein, each Borrower waives all rights and defenses arising out of an election ofremcdies by any Agent or any other Secured Party, even though that c1ection of remedies, such as a nonjudicial foreclosure with respect to security for any Obligation has destroyed such Borrower's rights of subrogation and reimbursement against any other Borrower by operation of applicable law or
otherwise. Without limiting the generality of the foregoing, each Borrower expressly and irrevocably waives, to the fullest extent permitted by applicable law, any and all rights and
defenses including, without limitation, any rights of indemnifcation and contribution which might otherwise be available to such Borrower under applicable law or otherwise; provided that notwithstanding the foregoing, any such rights of indemnifcation and contribution shall be waived only until the Obligations shall have been paid in full in immediately available funds and the Agrcement shall have been terminated. Each Borrower consents and agrees that the Agents
shall be under no obligation to marshal any assets in favor of such Borrower or against or in payment of any or all of the Obligations. NOTWITHSTANDING ANYTHING IN ANY OF
THE LOAN DOCUMENTS TO TIlE CONTRARY, NO PARTNER, MEMBER,

SHAREHOLDER OR OTHER BENEFICIAL OWNER OF THE BORROWERS (OTHER
THAN ANY LOAN PARTY) SHALL BE LIABLE FOR THE PAYMENT OR

PERFORMANCE OFTHE OBLIGATIONS.
9.22 Counter-parts; Intee:ration; Effectiveness: Electronic Execution.
A. Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement and any separate leUer agreements with respect to fees payable to I i
and the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective when it
shall have been executed by the Administrative Agent and when the Administrative Agent shall the have received counterparts hereof which, when taken together, bear the signatures of each of other parties hereto required pursuant to Section 3, and thereafter shall be binding upon and inure
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to the benefit of thc parties hcreto and their respectivc successors and assigns. Delivery of an
executed counterpart or a signature page of this Agreement or any document or instrument
delivered in connection herewith by tclecopy shall be effective as delivery of a manually
executcd countcrpart of
this Agrecmcnt or such other document or instrument, as applicable.
. Electronic Execution of Assignments. The words "execution," "signed,"
"signature," and words of like import in any Assignment Agreement shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper~based recordkeeping system, as the ease may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
9.23 USA Patriot Act Notification.

The following notificalion is provided to the Borrowers pursuant to Section 326 of the
USA Patriot
Act of2001, 31 V.S.C. Section 5318:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT.
To help the government fight the funding of tcrrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each Person or entity that opens an account, including any deposit account, treasury management account, loan, othcr extension of credit, or other financial services product.
What this means for each Borrower: When a Borrower opens an account, if the Borrower is an
individual, the Administrative Agent and the Lenders wil ask for the Borrower's name,
residential address, tax identification number, date of birth, and other information that wil allow the Administrative Agent and the Lenders to identify the Borrower, and, if the Borrower is not an individual, the Administrative Agent and the Lenders will ask for the Borrower's name, tax identification number, business address, and other information that will allow the Administrative Agent and the Lenders to identify the Borrower. The Administrative Agent and the Lenders may
also ask, if the Borrower is an individual, to see the Borrower's driver's license or other
identifying documents, and, if the Borrower is not an individual, to see the Borrower's legal Organizational Documents or other identifying documents.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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PRELIMINARY DRAFT TO MODIFICATION SUBJECT FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective offcers thereunto duly authorized as of the date first written above.
THE BORROWERS:
lNEWCOJ
By:
Name: Title:
THE RHODES COMPANIES, LLC

By:
Name: Title:
RHODES RANCH GENERAL PARTNERSHIP

By:
Name: Title:
RHODES RANCH GOLF AND COUNTRY CLUB, LLC

By:
Name: Title:
iFirst Lien Credit Agreement)
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HERITAGE LAND COMPANY, LLC

By:
Name: Title:
T1CK,LP
By:
Name: Title:
GLYNDA, LP
By:
Name: Title:
CHALKLINE, LP
By:
Name: Title:
BATCA VE, LP
By:
Name: Title:
JACKKNIFE, LP
By:
Name: Title:
WALLBOARD, LP
By:
Name: Title:
OVERFLOW, LP
(First Lien Credit
AgreementJ
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By:
Name: Title:
TUSCANY ACQUISITIONS, LLC

By:
Name: Title:
TUSCANY ACQUISITIONS II, LLC

By:
Name: Title:
IFirst Lien Credii Agreement) 3
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TUSCANY ACQUISITIONS ll, LLC

By:
Name: Title:
TUSCANY ACQUISITIONS iv, LLC

By:
Namc: Titlc;
RHODES DESIGN AND DEVELOPMENT CORPORATION

By:
Name: Title:
C&J HOLDINGS INC.

By:
Name: Title:
i First Lien Credit Agreemeril)
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RHODES REAL TV, INC.

By'
Name: Title:
ELKHORN INVESTMENTS, INC.

By,
Name: Title:
BRAVO INC.
By,
Name: Title:
RHODES HOMES ARIZONA, LLC

By,
Name: Title:
TRIBES HOLDINGS LLC

By,
Name: Title:
(lirsi Lien Credit Agreemenl)

5
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PINNACLE GRADING, LLC

By:
Name: Title:
TUSCANY GOLF COUNTRY CLUB, LLC

By:
Name: Title:
GUNG-HO CONCRETE, LLC

By:
Name: Title:
GERONIMO PLUMBING, LLC

By:
Name: Title:
RHODES ARIZONA PROPERTIES, LLC

By:
Name: Title:
.JARUPA LLC
By:
Name: Title:
PARCEL 20 LLC
By:
Name:
Ttlc:
SIX FEATHERS HOLDINGS, LLC

By:
(First Lien Credit Agreemcnil 6
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Name: Title:
ELKHORN PARTNERS
By:
Name: Title:
APACHE FRAMING, LLC

By:
Name: Title:
(Firsl Lien Credit Agreement)
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AGENTS AND LENDERS,

By:
Name: Title:
By:
Name: Title:
(Pirsi Lien Credit Agrccmentl

S
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Exhibit L
Schedule of Causes of Action
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NON-EXCLUSIVE LIST OF RETAINED CAUSES OF ACTION
ARTICLE IV(P) OF THE PLAN PRESERVES ALL CAUSES OF ACTION NOT

EXPRESSLY WAIVED, RELINQUISHED, EXCULPATED, RELEASED, COMPROMISED, OR SETTLED IN THE PLAN OR A BANKRUPTCY COURT ORDER. THE ATTACHED LIST IS A NONEXCLUSIVE LIST OF ENTITIES AGAINST WHOM THE DEBTORS, OR THE LITIGATION TRUST OR REORGANIZED DEBTORS, AS APPLICABLE, SHALL
RETAIN CAUSES OF ACTION. FAILURE TO INCLUDE AN ENTITY ON THE ATTACHED LIST SHALL NOT CONSTITUTE A RELEASE OF SUCH ENTITY AND
SHALL NOT INDICA TE THAT CAUSES OF ACTION AGAINST SUCH ENTITY HAVE NOT BEEN RETAINED.
THE DEBTORS AND TilE LITIGATION TRUST OR REORGANIZED DEBTORS, AS APPLICABLE, RETAIN ALL CAUSES OF ACTION OF ANY KIND WHATSOEVER
AGAINST ALL ENTITES NOT EXPRESSLY RELEASED PURSUANT TO THE PLAN OR A FINAL ORDER IN THEIR CAPACITIES AS SUCH.
FOR A VOIDANCE OF DOUBT, UNLESS EXPRESSLY RELEASED PURSUANT TO
THE PLAN OR A FINAL ORDER IN THEIR CAPACITES AS SUCH, ENTITIES NOT LISTED ON THE ATTACHED LIST ARE NOT RELEASED AND THE DEBTORS AND
THE LITIGATION RUST OR REORGANIZED DEBTORS, AS APPLICABLE, EXPRESSLY
RETAIN ALL CAUSES OF ACTION OF ANY KIND WHATSOEVER AGAINST ALL

SUCH ENTIlES, INCLUDING WITHOUT LlMllATION THE CATEGORIES OF CAUSES OF ACTION SET FORTH BELOW.
FAILURE TO ATfRIBUTE ANY SPECIFIC CAUSE OF ACTION TO A PARTICULAR ENTITY ON THE ATTACHED LIST SHALL NOT UNDER ANY
CIRCUMSTANCE BE INTERPRETED TO MEAN THAT SUCH CAUSE OF ACTION IS NOT RETAINED AGAINST SUCH ENTITY. ALL POSSIBLE CAUSES OF ACTION,
INCLUDING CAUSES OF ACTION NOT LISTED BELOW, ARE RETAINED AGAINST ALL ENTITIES NOT EXPRESSLY RELEASED PURSUANT TO THE PLAN OR A FINAL
ORDER INlHEIR CAPACITIES AS SUCH.
IN THE EVENT OF ANY APPARENT INCONSISTENCY BETWEEN THE

RELEASES OF ENTIlES IN THEIR CAPACITES AS SUCH PURSUANT TO THE PLAN OR A BANKRUPTCY COURT ORDER AND TilE ATfACHED LIST, SUCH RELEASES GRANTED PURSUANT TO THE PLAN OR FINAL ORDER SHALL GOVERN.
Categories (in each case except as otherwise provided in the Plan):
I. Causes of Action against vendors, suppliers of goods or services, or other parties
for overpayments, back charges, duplicate payments, improper holdbacks,
deposits, warranties, guarantees, indemnities or setoff;
73203.002\OOCSJA:2lOnIJ
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2. Causes of Action against utilties, vt=ndors, suppliers of services or goods, or other
parties for wrongful or improper termination, suspension of services or supply of

goods, or failure to meet other contractual or regulatory obligations;
3. Causes of Action aguinst vendors, suppliers of goods or services, or other partics
for failure to fully perform or to condition pcrformance on additional
requirements under contracts with anyone or more of the Debtors bcfore the
assumption of rejection of
the subject contracts;
4. Causes of Action relating to any liens, including mechanic's, artisan's,

materialmen's, possessory or statutory liens filcd by any contractor or third party against the Debtors' estates;
5. Claims related to or arising from any warranty or indemnification against any
supplier or subcontractor or such supplier or subcontractor's insurance carriers;

6. Causes of Action against any current or former director, offcer, employee or
agent of the Debtors arising out of employment related matters, except the
Released Parties for the Claims released against them undcr the Plan;
7. Causes of Action against insurance carriers, reinsurance carriers, underwriters or
surety bond issuers relating to coverage, indemnity, contribution, reimbursement

or other matters;
8. Counterclaims and defenses relating to notes, bonds or other contract obligations;

9. Counterclaims in connection with any warranty claims or deposit return claims
asserted against any of the Debtors;
i O. Causes of Action against local, state, federal and foreign taxing authorities for
refunds of overpayments or other payments;
i i. Causes of Action against attorneys, accountants, consultants or other professional
service providers relating to servces rendered, cxcept the Released Parties for the Claims released against them under the Plan;
12. Contract, tort or equitable Causes of Action that may exist or subsequently arise;
13. Causes of Action of the Debtors arising undcr section 362 of the Bankruptcy
Code;
14. Equitable subordination Causes of Action arising under section 510 of the
Bankruptcy Code or other applicable law;

i 5. Turnover Causes of Action arising under section 542 or 543 of the Bankruptcy
Code;
7320J.021D((."S_I.A:210331.1
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16. Causcs of Action arising under chapter 5 of the Bankruptcy Code, including
prcfcrcnccs under section 547 of
the ankruptey Code, cxcept as sct forth in the
Plan;
17. Causcs of Action for unfair competition, interference with contract or potential
busincss advantage, conversion, infringement of intellectual property or other

busincss tort claims.
13203.002\DOCS_LA210331.i
CURRENT AND POTENTIAL. THIRD-PARTY CLAIMS
DobtorEntlty
ClaIm 6reach of con Ira ct. defeclive design. professional negligence a AgaInst
CaseCaptlon,rfappllcable
DscrlptlonofClalm
RhodesHomesArizona,LLCv StanleyConsullarits
SlanleyConsullanls, Yamada Yamada: SIeve Hagel and Jane and Inc: Ken
Rhodes
Homes
Aflzona.
LLC
ndoltierdaims
Jane Doe
Doe Hagel; Dennis Brown and
Jane Doe Brown: Denis Atwod

and Frohnenand Jane Doe Frohen Jane Doe David Atwood;
Case 09-14814-lbr
Rhodes ofconlracl.
Design
end
GC
Wallace
Inc.vRhodes
GCWallacelnc
Breach defeclivedeslgn, prolessional
negligence
and
olher
claims
DevelopmenVRhodes Homes
California
Sunland Asptialt DIspute relallng 10 amounls due under conlract
OesJgnamlOevelopmentCorp; O.NeilConstructionCoof
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PinnacleGrading.LLC
Commerce Assoclales. LLC;
Isaac Building and Design
Rhodes
Design
and
Breach of conlracl unfinished common areas. mechanics liens. defec1ive woikmanship. claims under the Purc/ase Agreement and Granl of Options betwen Commerce AssoCiates. LLC and Rhodes Design and Development Corporation dated November 14. 2003 and relaled agreements
Rhodes
Design
and
Soulhwestlron
6reachofconlract.defectivewoixmanshlp
Commerce Associates. LLC;
Third-part work 6uilding and DesIgn 1~legMiYMaSOnry:lsaac Third-part wcrk not paid lor resulting in liens ondeblor's propirl not paid forresulling In liens on debtor's propert
Rhodes
Design
and
DevelopmenVRhodesHomes
Rhodes
Design
and
l~ommerce Associates, LLC; Penormance Ready Mix l~aaCBUildingandDesign;

Third.partwoix nol paid for resulting in liens on debtor's propert
Rhodes
Desi9n
and
Entered 01/15/10 15:34:13
I~ommerce AssoCiates. LLC; IsaacBuildingandDeslgn;MS
Rhodes
Design
and
Concrete TrilonGradng
Dabtotssubcontraclorfailed
to pay
Las
Vegas
Pavlng
rasulling
in liens
on
deblor's
proparty
DevelopmanVRhodes Homes
Direct Paving
RhOdesOes~nari
Oeblof"s subcntractor failed to pay Wilmar Contracting resulting In nans on debtots propert
DavelopmanVRhodes Homes
A1lemativeLawns
Rhodes
Design
and
Defeclive workmanshlp-lollol. Rhodes Ranch parce114
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ExhibitM
Asset and Stock Transfer Agreement
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE AND RHODES ENTITES PURSUANT TO MEDIATION SETTLEMENT
PRELIMINARY DRAFT SUBJECT TO MODIFICATION. FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE AND RHODES ENTITIES PURSUANT TO MEDIATION SETTLEMENT
ASSET AND SHARE TRANSFER
AGREEMENT
THIS ASSET AND SHARE TRANSFER AGREEMENT (this "Agreemeiif'), dated

1,2009, is by and among Rhodes Homes Arizona Properties, LLC, a i 1 limited
liability company, Rhodes Homes Arizona, LLC, a r 1
limited liability company and
Elkhorn Investments, Inc., a r 1 corporation (together, the "Arizona Entities"), (Newcol, a Delaware limited liability company ("Newco"), r 11 (the "Rhodes
Entities"), and James M. Rhodes ("RTwdes", and, together with the Arizona Entities, and the
Rhodes Entities, the "Parties").
RECITALS
A. On either March 31, 2009 or April 1,2009, the Arizona Entities, as well as certain
other affliated entities, each fied voluntary petitions for relief under chapter 11 of the United Slates Code, II U.S.C. 101-1532 (the "Bankruptcy Code").
B. On September 25, 2009, a Plan of Reorganization and Disclosure Statement (the "Pluii") was fied on behalf of the Arizona Entities as well as certain other affliated entities
pursuant to the Bankruptcy Code.
C. Pursuant to the Plan, the Arizona Entities are required to transfer to the Rhodes
Entities the assets set forth on Schedule I to this Agreement (the "ArizoliaAssets").
D. Pursuant to the Plan, the Rhodes Entities are required to transfer to Newco all of the issued and outstanding Equity Interests (the "Transferred Shares") of Rhodes Ranch Golf
Coiirse, Inc., a r 1 corporation ("GCr'), and certain other assets relating to the
operation of the golf course situated within the Rhodes Raneh master-planned community located in the southwestern Las Vegas valley (the "Rhodes Raiich Golf Coiirse". "Eqiiity
Imerests" shall mean all capital stock, membership interests, options, warrants, exchangeable or
i IDENTITY OF OWNERS OF GC/ STOCK TO BE DETERMINED. WILL THIS BE THE SAME PERSON
TO WIIOM THE ARIZONA ASSETS WILL BE TRANSFERRED?
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST UEN STEERING COMMITTEE AND RHODES ENTITIES PURSUANT TO MEDIATION SETTLEMENT
convertible seeurities, subscription rights, exehange rights, preemptive rights, stock appreciation
rights, phantom stock, profit participation or similar righis, or any other right or instrument
pursuant to which any person may be entitled to purchase any security.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, the respective representations, warranties, covenants and agreements contained in this Agreement, and other good and valuable consideration the receipt and suffciency or which are hereby acknowledged, and intending to be legally bound, the Parties agree as set forth below.
ARTICLE I
TRANSFER OF ARIZONA ASSETS AND TRANSFERRD SHARES'
1. t Transfer of Arizona Asse1s.
(a) Transfer. TIie Arizona Entities hereby transfer and deliver to the Rhodes
Entities, and the Rhodes Entities hereby accept all right, title and interest in and to all of
the Arizona Assets, free and clear of all claims, liens, pledges, restrietions, options, charges, rights or first refusal, preemptive rights, easements, security interests, deeds of
trust, mortgages, rights.of~way, encroachments, or encumbrances, whether voluntarily
incurred or arising by operation of law, (collectively, "Encumbrances"), except for such Encumbrances set forth on Schedule Llla).3
(b) Assumed Liabilties. The Rhodes Entities hereby assume and beome
responsible for the following liabilties and obligations of the Arizona Entities liabilities under the contracts listed on (collectively, the "Assumed Liabilties"): (i) all
Schedule l.(b)(i) (the "Assumed Coiitracts") whether arising before or after the
Closing, (ii) all liabilties under the leases listed on Schedule 1.lb)(ii) (the "Assumed L.eases") whether arising before or after the Closing and (iii) any amounts required by
section 365(b)(1) of the Bankruptcy Code to cure any defaults by the relevant Arizona Entities under an Assumed Contract Or Assumed Lease and to pay any actual pecuniary
losses that have resulted from such defaults under such Assumed Contract and Assumed Leases.
1.2 Transferred Shares. The Rhodes Entities hereby transfer and deliver to Newco, the Transferred Shares free and clear of all Encumbrances.
and Newco hereby accepts, all of
1.3 Transfer of Cell Tower Contracts. The Rhodes Entities hereby assign to, and
Newco hereby assumes and becomes responsible for, all rights, benefits and obligations under any agrccments, contracts, leases, licenses, obligations, or other commitments, whether oral or written, and any and all amendments thereto (each, a "Contract") relating to the operation of and
TO FURTHER REVIEW BY AKIN TAX COUNSEl.. J SCHEDULE J.J(a) TO IDENTIFY LIENS TO THE FIRST LIEN LENDERS IN AN AMOUNT NOT TO
EXCEED S60,000.
i AGREEMENT SUBJECT
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITIEE AND RHODES ENTITIES PURSUANT TO MEDIATION SETLEMENT
revenue generated by any cell towers located on the Rhodes Ranch Golf Course, including, but not limited to, those Contracts listed on Schedule 1.3 (the "Cell Tower Contracts").
1.4 Closing. The closing (the "Closing") of thc transactions contemplatcd hereby (the "Transactions") wl lake place on the date hereof (the "Closing Date") at the offces of
Akin Gump Strauss Hauer & Felt! LLP, One Bryant Park, New York, NY 10036.
1.5 Deliveries. On the Closing Date,4
(a) the applicable Arizona Entities shall deliver or cause to be delivered to the
Rhodes Entities:
(i) a bill of sale and an assignment and assumption agreement, each
duly executed by the applieable Arizona Entity in the forms of Exhibits A and . hereto; and
assignments and other instruments of transfer or conveyance or as may be otherwise necessary to evidence and effect the assignment and delivery of the
Arizona Assets to the Rhodes Entities;
(b) Entities:
(ii) such other bills of sale, certificates of title or origin, deeds,
the Rhodes Entities shall deliver or caused to be delivered to the Arizona
(i) an assignment and assumption agreement duly executed by cach
Rhodes Entity in the form of Exhibit B;

(ii) certificates representing the Transferred Shares, duly endorsed in
blank (or accompanied hy duly executed stock powers);

(iii) a certificate of good standing of Gei in thc State of f 1.
dated no earlier than five (5) days prior to the Closing Date;
(Iv) resignations from each dircetor and offcer of GCl effective as of
the Closing Date;

(v) all necessary third party consents in connection with the transfer of
the Cell Tower Contracts;

(vi) an affdavit of non-foreign status that complies with seetion 1445
of the Internal Revenue Code of 1986, as amended, executed by each of GCI and each Rhodes Entity;
~ TilS AGREEMENT CONTEMPLATES A SI,HULTANEOUS SIGNING AND CLOSING. IF AN EXECUTORY PERIOD iS NEEDED, CUSTOM~iRl COVENANTS AND COND/TIONS WllL BE
ADDED.
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE AND RHODES ENTITIES PURSUANT TO MEDIATION SETTLEMENT
(vii) all original minute books and slack transfer ledgers orGei;
(viii) a secretary's certificate of GeT certifying as to the organizational
documents of GCI, and the resolutions of
the board of directors of GCI approving and authorizing this Agreement and the Transactions; and
(ix) a rMortgagescrow Agreement)5 (as defined below), duly
executed by Rhodes.
(c) The documents listed in (a) and (b) above shall be referred to as the
"Transaction Documents".
1.6 (Non-Assignment of Contracts. Anything contained herein to the contrary notwithstanding, (i) this Agreement shall not constitute an agreement to assign any Assumed Contract or Cell Tower Contract if, after giving effect to the provisions or sections 363 and 365 of the Bankruptcy Code, as applieable, an attempted assignment thereof, without obtaining a consent, would constitute a breach thereof or in any way negatively affect the rights of the Arizona Entities or the Rhodes Entities, as the assignee of such Assumed Contract or Cell Tower
Contract and (ii) no breach of this Agreement shall have occurred by virtue of sueh
nonassignment. If, after giving effect to the provisions of sections 363 and 365 of the
Bankruptcy Code, as applicable, such consent is required but not obtained, the parties shall, at
the sole cost and expense of the assigning party, cooperate with the non-assigning party in any
reasonable arrangement designed to provide for the non-transferring party the benefits and obligations of or under any such Assumed Contract or Cell Tower Contract, including
enforcement for the benefit of the non-assigning of any and all rights of the assigning part
against a third party thereto arising out of
the breach or cancellation ihereofby such third party.)6
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF RHODES AND THE RHODES ENTITIES
Rhodes and each Rhodes Entity, jointly and severally, represents and warrants to the Arizona Entities and Newco that the statements contained in this ARTICLE 2 are true, corrct and complete on the Closing Date.
2.1 Organization of Rhodes Entities. Each Rhodes Entity is an entity duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization. There s no pending, or threatcned, action, suit, arbitration, mediation, investigation or similar proeeeding (an "Action") that would prohibit, materially delay or
negatively alleet the eonsummation of
the Transactions contemplated hereby. "Law" shall mean
5 THE RHODES EN11TIES TO ADVISE WHETHER /1' W/LL PROVIDE $500,000 IN CASH OR $2.0
MILLION Of' REAL PROPERTY AS COLLATERAL FOR TilE PUT RIGHT OBLIGATIONS IN SEC110N 4.4. 6 TO BE DELETED IF ALL APPLICABLE CONSENTS TO ASSIGN THE CONTRACTS ARE OBTAINED
PRiOR TO THE CLOSING DA TE.
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any law (statutory, common or otherwise), constitution, ordinanec, rule, regulation or executive
order of any Governmental Body.
2.2 Authority of Rhodes Entilies; Enforceabilty. Each Rhodes Entity has the
relevant entity power and authority necessary to execute and deliver each Transaction Document to which it is a party and to perform and consummate the Transactions. Each Rhodes Entity has taken all action necessary to authorize its execution and delivery of each Transaction Document the to which it is a party, the performance of its obligations thereunder and its consummation of Transactions. Each Transaction Document to which Rhodes or any Rhodes Entity is a party has been duly authorized, executed and delivered by it and is enforceable against it in accordance with its terms.
2.3 No Violation. The execution and the delivery by Rhodes and each Rhodes Entity
of this Agreement and the other Transaction Documents to which any of Rhodes or any Rhodes
Entity is a party, the performance by it of its obligations hereunder and thereunder, and the
consummation of the Transactions by it wil not (a) with or without notice or lapse of time, constitute or create a breach or violation of, or default under, any (i) Law enacted, adopted, promulgated or applied by any legislature, agency, bureau, branch, department, division,
commission, court, tribunal or other similar recognized organization or body of any federal, state, county, municipal, local or foreign government or other similar recognized organization or body
exercising similar powers or authority (a "GovemmeJtol Body"), (ii) order, ruling, decision, award, judgment, injunction or other similar determination or finding by, before or under the supervision of any Governmental Body or arbitrator (an "Order"), (iii) Contract, or (iv) permit, license, authorization, registration, franchise, approval, eertificate, exemption, variance and similar right obtained, or required to be obtained from a Governmental Body (a "Permit") to which, in the case of (i), (ii), (Hi) or (iv), Rhodes, GCi or any Rhodes Entity is a party or by
which it or its asscts arc bound, or (v) organizational document of any Rhodes Entty as in effect on thc Closing Datc, (b) require any consent, approval, notification, waiver or other similar action (a "Coiiseiit") undcr any Contract or organizational document to which Rhodes, Gei or any Rhodes Entity is a party or by which it or its assets are bound or (c) require any Permit under any Law or Order.
Closing, Gei has r 1 authorized shares of common stock, of whch r 1 shares are issued and outstanding,
2.4 Capitalization of Gei; Subsidiaries. As of the
and (~______L authorized shares of preferred stoek, of whieh r i shares are issued and
outstanding. Each Rhodes Entity holds of record and owns beneficia\1y the number of
Transferred Shares as set forth next to its name in Sehedule 2.4, free and clear or any
Encumbrances (other than any restrictions on transfer under the Securities Act of 1933, as amended, and state securities Laws). No Rhodes Entity is a party to any Contraet that could require it to sell, transfer, or otherwise dispose of any of the Transferred Shares. No Rhodes
Entity is a party to any other Contract with respect to any capital stock of GCi. The Transferred Shares make up all of the issued and outstanding capital stock of Gel. All of the Transferred Shares: (a) have been duly authorized and are validly issued, fully paid, and nonassessable, (b) were issued in complianee with all applicable slate and federal securities Laws, and (c) were not
issued in brcach or violation of, or did not cause as a result of the issuance thereof a default
under, any Contract with or right granted to any other person. There are no outstanding options,
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warrants, exchangeable or convertible securities, subscription rights, exchange rights, statutory

pre-emptive rights, preemptive rights granted under GCI's organizational documents, stock
appreciation rights, phantom stock, profit participation or similar rigbts, or any other right or instrument pursuant to which any person may be entitled to purchase any security ofGCI, and no
obligations to issue any rights or instruments. Therc arc no Contracts with respect to the voting
or transfer of any of act's capital stock. GCI is not obligated to redeem or otherwise aequire
any of its Equity Interests. GCl has no subsidiaries and owns no Equity Interests in any other Person, or any other right or instrument pursuant to which GCi may be entitled to purchase any
security of any othcr person.
2.5 Organization of Gei. GCI (a) is a corporation duly organized, validly existing
and in good standing under the Laws of r ), (b) is duly qualified to do business as a
foreign corporation and is in good standing under the Laws of cach jurisdiction in which either (he ownership or use of the properties owned or lIsed by it, or the nature of the activities condueted by iI, requires such qualification, (c) has the relevant entity power and authority iiecessary to own or lease its properties and to carryon its businesses as currently conducted and
(d) is not in breach or violation of, or default under, any provision of its organizational
documents. GCi has never approved or taken any action, nor is there any pending or threatened Action, seeking or otherwise contemplating GCl's dissolution, liquidation, insolvency or rehabilitation.
2.6 Power and Authority of Gei; Enforceability. GCi has the corporate powcr and
authority necessary to execute and deliver each Transaction Documcnt to which it is a party and to perform and consummatc the Transactions. GCI has taken all action necessary to authorize
the execution and delivery by it of each Transaction Document to which it is a party, the
performance of its obligations thereunder, and the consummation by it of the Transactions. Each Transaction Document to which GCI is a party has bcen duly authorized, executed and delivered by GCi and is enforeeable against it in accordance with its terms.
2.7 No Violation; Necessary Approvals. The execution and the delivery by GCI of
the Transaction Documents to which it is a part, the performance by GCi of its obligations
thereunder and the consummation of the Transactions by it wil not (a) with or without notice or lapse of time, constitute, create or result in a breach or violation of, default under, loss of benefit or right under or acceleration of performance of any obligation required under any Law, Order, Contract or Permit to which GCI is a party or by which it is bound or any of its assets are subject, or under any provision of GCls organizational documents as in eirecl on the Closing Date, (b) require any Consent under any Contract or organizational document to which it is a party or by which it is bound or any of its assets are subject, (e) require any Permit, (d) trigger any rights of first refusal, preferential purchase or similar rights or (e) cause the recognition of gain or loss for tax purposes with respect to GCi or subjeet it or its assets to any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, occupation, customs, ad valorem, duties, franchise, withholding, social security, unemployment, real property. personal property, sales, lise, transfer, registration, estimated or other tax of any kind whatsoever, including any imerest, penalty or addition thereto, whether disputed or not ("Taxes").
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2.8 Records. The copies of GCl's organizational documents that were provided to Newco are true, correct and complete and reOect all amendments made through the date hereof. GCls minute books and other records made available to Newco for review were true, correct and
this the date of such review, no further entries have been made through the date of Agreement, sueh minute books and records contain the true signatures of the persons purporting to have signed them, and such minute books and records contain an accurate record of all actions
complete as of ortlie stockholders, the board of directors and committees of the board of
directors ofGCi taken
by written consent, at a meeting, or otherwise since formation.
2.9 No Indebtedness. Except as set forth on Schedule 2.9, GCI has no (a)
indebtedness for borrowed money, (b) obligations for a deferred purchase price, (c) obligations
evidenced by notes, bonds, debentures or other similar instruments, (d) indebtedness or

obligations created or arising under any conditional sale or other title retention agreement with respect to property acquired by GCI, (e) obligations under capital leases, (f) obligations,
contingent or otherwise, as an account party or applicant under or in respect of acceptances,
leiters of credit, surety bonds or similar arrangements, whether or not drawn, (g) obligations payable under any rate, currency, commodity or other swap, option or derivative agreement, (h)
obligations secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Encumbrance on property (ineluding accounts and
contract rights) owned by GCl, whether or not GCi has assumed or become liable for the
payment of such obligation or (i) any obligations of others guaranteed by GCi ((a) through (i),
collectively, "lmlebletluess").
2.10 No Undisclosed Liabilities. GCI does not have any liability or obligation,
whether accrued or fixed, absolute or contingent, matured or unmatured, determined or
undeterminable or known or unknown, including those arising under any Law, Action, Contract,
commitment, obligation, undertaking or otherwise (collectively, "Liabiliies"), and there is no basis for any present or future Action or Order against Gei giving rise to any Liabilty, except for
(a) the Liabilities set forth on Schedule 2.10 as on 1,2009 (the "Sc:iedule Dale"), and (b)
Liabilities that have arisen since the Schedule Date in the ordinary eourse of business (none of
which relates to breach of contraet, breach of warranty, tort, infringement, violation of Law,
Order or Permit, or any Action (including any Liabilties under any Environmental, Health and Safety Requirements (as defined below)) ("Ordinary Course Liabilties"). GCI has not assumed or guarantced any Liabilities of any other person.
2.11 Legal Compliance. GCI and each of its predecessors haS complied with all Laws and Orders, and no Action is pcnding or threatened against any of them alleging any failurc to so comply. No material expenditures are, or based on any Law, Order or Permit wil be, required of
Gei for it and its business and operations to rcmain in compliance with all Laws, Orders and
Permits immediately following the Closing.

2.12 Taxes. FOT purposes of this Section 2.12, the following terms shaJl have the following meanings:
charges, fees, imposts, levies or other asscssmcnts, including income, gross receipts,
(a) "Tax" or "Taxes" means (i) all fedcral, state, local and foreign taxes,
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excise, employment, sales, use, transfer, license, payroll, franchise, severance, stamp, withholding, Social Security, unemployment, disability, real property, personal property, registration, allernaiive or add on minimum, estimated or other taxes, charges, fees,
imposts, levies or other assessments, including any interest, penalties or additions thereto, whether disputed or not, and (ii) any liability for any items described in clause ii) payabh: by rcason of contract, transferee liability, operation of law (including Treasury Regulation
Section 1.1502-6) or otherwise.
filing, declaration, statement, claim for refund or other information, including any schedules or attachments thereto, and any amendments to any of the foregoing required to
be supplied to a taxing authority in connection with the determination, assessment,
(b) "TiLT Return" means any report, relurn, information return, election,
collection or administration of any Taxes, and, to the extent relevant, any report, return,
information return, election, filing, declaration, statement, claim for refund or other information to be provided to any other party (e.g., an employee or other payee or
distributee).
(c) GCI has fied all Tax Returns required to be filed by it on or before the
Closing Date with any Tax authority (collectively, the "Pre-Closing Returns"). The PreClosing Returns have been fied in accordance with all applicable Laws and, as of the
time of filing, were correct and complete in all material respeets regarding the income, costs, business, assets, operations, activities and status of GCi and any other items of infonnation shown therein. Gei has timely paid, withheld or reserved all Taxes due and
payable except for such Taxes that are being conlestcd in good faith by appropriate
proceedings and which are listed on a sehedule attached hereto. Gei has timely paid all
estimated taxes for any Pre-Closing Period.
(d) GCI has withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party, and all Forms W-2 and 1099 required with respect thereto have been properly completed and timely fied.
shown on any Pre-Closing Return, nor has GCI requested an extension of time within
which to file or send any Pre-Closing Return which has not since been fied or sent. Gei
(e) GCI is not delinquent in the payment of any Tax due and payable as
has not granted any extension or waiver of the limitation period applicable to any PreClosing Returns to any Tax authority.
(f) There is no claim, audit, action, suit, proceeding, or investigation pending
the Rhodes Entities or Gei, threatened, against or with respect to GCI in respect of any Tax, and there are no pending adjustments by any Tax authority to asscss additional Taxes in connection with any Tax Return fied (or that should have been
or, to the knowledge of
fied) by GCi.
(g) GCI has no pending requests for a ruling with any Taxing Authority.
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE AND RHODES ENTITIES PURSUANT TO MEDIATION SETLEMENT
(h) There are no liens for Taxes upon the assets of GCI except liens for
current Taxes not yet due.

(i) Since its organization, GCI has not been a member of an affliated group tiling any return with any Tax authority, or fied Or been included in a combined,
eonsolidatcd or unitary return. GCI is not under any contraetual obligation to indemnify
any other Person with respect to Taxes nor is GCI a party to any material agreement
providing for payments with respect to Taxes.

0) Gei has received all appropriate forms from payees (employees,
independent contraetors, creditors, stockholders, or other third parties) including, but not limited to, Forms W-4, W-8,W-9, and 1-9.
(k) Gei has not engaged in any reportable transaction under Treasury
Regulation Section 1.6011-4.
2.13 Title to, Suffciency and Condition of Assets. GCl has good, marketable and
indefeasible title to, or a valid leasehold interest in, all the assets necessary for the conduct of its business as currently conducted and as currently proposed to be conducted, ineluding, without limitation, the Rhodes Ranch Golf Course (together, the "Golf Assets"), in eaeh case free and clear of all Encumbrances other than the Encumbrances set forth on Schedule 2.13 ("Permitted
Encumbraiices"). All tangible assets included as part of the Golf Assets, whether owned or
leased, are free from defects (patent and latent), have been maintained in accordance with normal
industry practice, are in good operating condition (subject to normal wear and tear) and are
suitable for the purposes for whieh they are currently used and currently proposed to be used.
2.14 Reall)ropei'ty. (a) Schedule 2.14(a) lists all real propert owned by Gei (the
"Owned Real Property"). Gei has good, marketable, and indefeasible title to the Owned Real Property, subject to no Encumbrances other than Permitted Encumbrances. (b) Schedule 2.14(b)
lists all of the real property leased by GCl (the "Leased Real Property"). All of
the Leased Real
Property is held subject to written leases or other agreements which are valid and effective in aeeordanee with their respective terms, and there are no existing defaults or events of default, or events which with notice or lapse of time or both would constitute defaults thereunder. True, corrcct and complete copies of all such leases, together with any amendmcnts thereto, have been delivered to Newco. Gei has not received any oral or written notice to the effect that any lease will not be lCncwed at the termination ofthc tcrm thereof or that any such lease will bc rcnewed only at a substantially higher rent.
2.15 Contracts. Schedule 2.15 lists each Cell Tower Contract and each Conlret to
which GCI is a party or any of its assets are bound (the "Material C01ltracts"). GCI has
delivered to Newco a true, correct and complete copy of each written Material Contract and a summary of each oral Material Contract (as amended to date) listed in Schedule 2.15. Eaeh Maicrial Contract is legal, valid and enforceable and wil eontinue to be legal, valid and
enforceable on identical terms following the consummation of the Transactions. There arc no
existing defaults or events of default, or events which with notice or lapse of time or both would constitute defaults under any Material Contracts.
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2.16 Litigation. Schedule 2.16 sets forth each instance in which GCI (a) is subject to
any outstanding Order or (b) is a party to, the subject of or threatened to be made a party to or the subject of, any Action. No Order or Action required to be sct forth in Schedule 2.16 questions the validity or enforceability of any Transaction Document or any Transaction, or could result in any material adverse effect on GCt and no Rhodes Entity has any basis to believe that any such Action may be brought or threatened against Gei.
2.17 Environmental, Health and Safety Matters. Except as set forth in

Schedule 2.17, (a) GCl and each person for whose conduct GCI may be held liable is, and has at
all times been, in compliance with all Environmental, Health and Safety Requirements in
conncction with owning, using, maintaining or operating its business, operations and assets; (b) each location at which GCI currently operates, or has operated, any portion of its business or currently maintains, or has maintained, any of its propcrties or assets is, and has at all times been, in compliance with all Environmental, Health and Safety Requirements; and (c) there are no pending or threatened allegations by any person that any orGel's properties, assets or businesses
is or has not been conducted in complianee with all Environmental, Health and Safety
Requirements. "Environmental, Health amI Safety Requirements" means all Laws, Orders,
Permits, Contracts and programs (including those promulgated or sponsored by industry assoeiations, insurance companies and risk management companies) concerning or relating to the public health and safety, worker/occupational health and safety and pollution or protection of environment, including those relating in any way to noises, radiation or chemicals, toxic or hazardous materials, substances or wastes, each as amended and as now in effect.
2.18 Permits. GCI possesses all Permits required to be obtained for its businesses and
operations. Schedule 2.18 sets fort a list of all such Penn its. With respeet to each such Penn
it:
(a) it is valid, subsisting and in full force and effect; (b) there arc no violations of such Permit that would result in a tennination of such Permit; and (c) Gei has not received notice that such Pennit will not be renewed.
2.19 Related Party Agreements. Except as set forth on Schedulc 2.19 (the "Related
Party Trmisactions"), no Rhodes Entity or any of Affliate of any Rhodes Entity or any of their respective current or former employees, offcers, directors, mt:mbers, partners, managers or shareholders is a party to any Contract or other arrangement with GCI. "Affliate" means any speeified person who, directly or indirectly, through one or more intennediaries, controls or is controlled by, or is undcr common control with, the specified person.
2.20 Transfer of Course Conversion Funds. All funds received after July 3 i, 2009
by Gei or any of the Rhodes Entities from the Las Vegas Valley Water District or similar entity
as an incentive for converting the Rhodes Ranch Golf Course from a green course to a desert course (the "Course Conversioii Funds") have been used in the ordinary coursc of operating the
Rhodes Ranch Golf Course.
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ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE ARIZONA ENTITIES AND NEWCO
Each Arizona Entity and Newco, jointly and severally, represents and warrants to the Rhodes Entities that the statements eontained in this ARTICLE 3 are true, correct and complete on the Closing Date.
3.1 Organization of Arizona Entities and Newco. Eaeh Arizona Entity and Ncwco
is an entity duly organized, validly existing and in good standing under the Laws of the
jurisdiction of its organization. There is no pending, or (to the knowledge of the Arizona
Entities) threatened, Action that would prohibit, materially delay or negatively affect the
consummation of
the transactions contemplated hereby.
3.2 Authority of Arizona Entities and Newco; Enforceabilty. Each Arizona Entity
and Newco has the relevant entity power and authority necessal) to executc and deliver each Transaction Doeument to which it is a party and to perform and consummate thc Transactions. Each Arizona Entity and Newco has taken all action necessary to authorize iis execution and delivery of each Transaction Document to which it is a part, the performance of its obligations
thereunder and its consummation of
the Transactions. Each Transaction Document to which any
Arizona Entity or Newco is a party has been duly authorized, executed and delivered by it and is enforceable against it in aceordancc with its terms.
3.3 No Violation. The execution and the delivery by eaeh Arizona Entity and Newco
of
this Agreement and the other Transaction Documents to which any Arizona Entity or Newco is a party, the perrormance by it of its obligations hereunder and thereunder, and the consummation
of the Transactions by it wil not (a) with or without notice or lapse of
time, constitute or create a
breach or violation of, or default under, any (i) Law enacted, adopted, promulgated or applied by
any Governmental Body, (ii) Order, (iii) Contract, or (iv) Permit to which, in the ease of (i), (i),
(iii) or (iv), any Arizona Entity or Newco, respectively, is a party or by which it or its assets is bound, or (v) organizational document of any Arizona Entity or Newco, respectively, as in effect on the Closing Date, (b) require any Consent under any Contract or organizational document to which any Arizona Entity or Newco is a party or by which it or its assets is bound or (c) require any Permit under any Law or Order.
3.4 Title to Arizona Assets. The Arizona Entities have good, marketable and
indefeasible title to, or a valid leasehold interest in, all of the Arizona Assets, in each case free and clear orall Encumbrances exeept as set forth on Sehedule I.l(a).
ARTICLE 4 COVENANTS
4.1 General. If any time after the Closing any further action is necessary or desirable
to earr out this Agreement's purposcs, each Party will take such rurther action (including
executing and delivering any further instruments and documents, obtaining any Permits and Consents and providing any reasonably requested infurmation) as any other Party may
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reasonably request, all at the requesting Party's sole cost and expense (unless the requesting
Party is entitled to indemnification therefor under ARTICLE 5).
4.2 Confidentiality. The Rhodes Entities wil, and wil cause each of its respeetive
Affliates, directors, offcers, employees, agents, representatives and similarly situated persons to
(a) treat and hold as confidential, and not use or disclose, all of the information concerning the
Transferred Stoek and Gei ("ColijdelJtial Information"), exccpt for (i) disclosures to the
person's professional advisors, the actions for which the disclosing person will be responsible and (ii) disclosures rcquircd for such person to perform obligations it may have under this
Agreement, and (b) deliver promplly to Newco, all tangible embodiments (and all copies) of
the
Confidential Information which are in such person's possession. If any person subject to these confidentiality provisions is ever requested or required (by oral question or request tor information or documents in any Action) to disclose any Confidential Information, such person
will notify Newco promptly of the request or requirement so that Newco may seek an
appropriate protective Order or waive compliance with this Section 4.2.
4.3 Call Right. On the eighth anniversary of the Closing Date (assuming a Put
Rhodes shall have the right (the "Call Right") to repurchase the Transferred Shares tor an amount in cash equal to $5,900,000. Rhodes or a permitted designee of Rhodes may exercise the Call Right by providing at least thirty (30) days' prior written notice to Newco stating his intcnt to exercise the Call Right (the "Calf No/ice"). Except as sel forth in Section 4.6, the Call Notice shall be irrevocable. The parties shall consummate the sale at the time and place designated in the Call Notice, but in any
Notice has not been previously delivered), Rhodes or a permitted designee of
event within sixty (60) days of Newco's reccipt of the Call Notice, subject to reasonable
extension as necessary to obtain any required approvals in connection therewith. At the closing of such sale, (a) Newco shall deliver to Rhodes (or its designee) the Transferred Shares, free and clear of all Encumbrances and duly endorsed for transfer and (b) Rhodes shall deliver to Newco
an amount in cash equal to $5,900,000. Notwithstanding anything to the eontrary contained
herein, neither Rhodes nor any of his designees shall be permitted to exercise its Call Right
under Scetion 4.3 if
Rhodes has delaulted, at any time, on its obligations under this Agreement.
the Closing Date and prior to the cighth anniversary of the Closing Date, Newco shall have the right (the "Put Right') to require Rhodes to repurchase the Transferred Shares for an amount in cash equal to $5,900,000. Newco may exercise the Put Right by providing written notice to Rhodes at least one (1) year prior to the intended closing date of such transaction (the "Notice Period') stating its intent to exercise the Put Right (the "Put Notice"). The Parties shall consummate the sale at the time and the place designated by Newco in the Put Notice, but in any event within fifteen (15) days of expiration of the Notice Period. At the closing of such sale, (a) Newco shall deliver to Rhodes the Transferred Shares, free and clear of all Eneumbrances and duly endorsed for transfer and (b) Rhodes shall deliver to Newco an amount in cash equal to $5,900,000. If fifteen (15) days after the expiration of the Notice Period, Rhodcs has not consummated the transaction, (i) Rhodes shall be deemed to have permanently waived iht' Call Right and (ii) (the Escrow Amount (as
4.4 Put Right. At any time after the fourth anniversary of
defined below) shall be distributed to NcwcolNewco shall be entitled to foreclose on the

MortgageJ as liquidated damages.
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE AND RHODES ENTITIES PURSUANT TO MEDIATION SETTLEMENT 4.5 IEscrow/Mortgagei-1
(a) Simultaneously with the execution hereot~ Rhodes shall (deposit into an
escrow account (the "Escrow Accouiit") established in accordance with the terms of an
escrow agreement in the form attached as Exhibit C (the "Escrow Agreement") an amount in cash equal to $500,000 (the "E~c:ow Amount")1 deliver to Newco a fully
exeeuted and notarized mortgage in the form attached as Exhibit C on property with a fair market value of at least $2,000,000), (the "Mortgage")).
(b) LFor so long as Rhodes is not in default of its obligations under Section
4.4, Rhodes shall have the right, upon thirty (30) days' prior written notice to Ncwco, to terminate the Mortgage and simultaneously therewith deposit an amount in cash equal to
$500,000 in thc Escrow Account.)
(c) LUpon Rhodes' exercise of the Call Right or Newco's excrcise of
the Put
Right, (i) if the Escrow Amount consists of cash equal to $500,000, then such amount shall be distributed to Newco as a credit towards the purchase price thereof and (ii) if the Escrow Amount consists of the Mortgage, such Mortgage shall be terminated upon consummation of the transactions contemplated by the Call Right.
4.6 Maintenance of Rhodes Ranch Golf Course. At all
times prior to the earliest of
(x) the eighth anniversary of the Closing Date, (y) the exereise of the Call Right, and (z) the exercise of the Put Right, Newco shaH maintain the Rhodes Ranch Golf Course in substantially the same performance and rating criteria as in effect on the datc hereof, as verified by an
independcnt third parly rating ngcncy aeccptablc to Newco and Rhodes (the "Standard
CoiiditiOlr"). If, upon the date specified as the closing date in any Call Notice, the Rhodes Ranch Golf Course is not in the Standard Condition, Rhodes may, at his option (a) require Newco to return ihe Rhodes Ranch Golf Coursc to the Standard Condition, provided, that the cost of such
improvements does not exceed $500,000 or (b) revoke his Call Notice, in which case, (the
Escrow Amount shall be returned to Rhodes! the Mortgage shall be terminated) within thirty (30)
days of such notice of evocation of
the Call Notice.8
4.7 Related Party Transactions. Except for the Transaction Documents, all Related
the Closing and GCI shall not have any Liabilty for any Related Party Transactions aftcr the Closing.
Part Transaetions arc hercby automatically terminated as of
4.8 Transfer of Course Conversion Fuiids. All Course Conversion Funds which
have not been lIsed in the ordinary course of operating the Rhodes Ranch Golf Course as of
the
Closing Date shall be hereby transferred to GCL

7 THE RHODES ENTITIES TO ADVISE WHETHER IT WILL PROVIDE $500,000 IN CASH OR $2.0 MILLION OF REAL PROPERTY AS COLLATERAL FOR THE PUT RIGHT OBLIGATIONS IN
SECTION 4.4 6 TO BE DISCUSSED WHETHER AGREEMENT NEEDS TO INCLUDE COVENANT BY RHODES TO
CONTINUE OPERATING rJ/E PROPERTY AS A GOJ.F COURSE AFTER THE EXERCISE OF THE
CALL RIGHT OR PUT RIGHT.
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PRELIMINARY DRAFT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTE AND RHODES ENTITIES PURSUANT TO MEDIATION SETTLEMENT
SUBJECT
ARTICLE 5 INDEMNIFICATION
5.1 Survival or Representations, Warranties and Covenants. Each reprcscntation,
warranty, covenant and obligation of the Parties contained hercin will survive the Closing and continue in full force and effect.
5.2 lndemnifcation Provisions for Neweo's Benefit. Rhodes and the Rhodes
Entitics, jointly and severally, will indemnify and hold Neweo and its Affiliates, and their
respective offcers, directors, managers, employees, agents, representatives, controlling persons, stoekholders and similarly situated persons, harmless from and pay any and all Damages directly
or indirectly resulting from, relating to, arising out of or attributable to any of the following: (a)
any breach of any representation or warrnty Rhodes or any Rhodes Entity has made in this Agreement; (b) any breaeh, violation or default by Rhodes or any Rhodes Entity of any obligation of Rhodes or such Rhodes Entity in this Agreement; (c) any and all Indebtedness or other Liabilities of GCI as of the Schedule Datc not expressly set forth on Schedule 2.9 or 2.10 or in excess of the amount of such Indebtedness or other Liabilties set forth on Schedule 2.9 or 2. io and (d) all Liabilties incurred after the Schedule Date which are not Ordinal) Course Liabilities. "Damages" means all losses (including diminution in value), damages and other
costs and expenses of any kind or nature whatsoever, whether known or unknown, contingent or vested, matured or unmatured, and whether or not resulting from third-party claims, including
costs (including reasonable fees and expenses of attorneys, other professional advisors and investigation, cxpert witnesses and the allocable portion of the relevant person's internal costs) of prcparation and litigation in connection with any Action or threatened Action.
ARTICLE 6 MISCELLANEOUS
6.1 Entire Agreement. This Agreement, together with the other Transaction
Documents and all schedules, exhibits, annexes or other attachments hereto or thereto, and the certificates, documents, instruments and writings that are delivered pursuant hercto or thereto, constitutes thc entire agreement and understanding of the Parties in respect of the subject matter hereof and supersedes all prior understandings, agreements or representations by or among the Parties, written or oral, to the extenl they relate in any way to the subject matter hereof. Except as provided in ARTICLE 5, there are no third party beneficiaries having rights under or with respecl to this Agreement.
6.2 Assignment; Binding Effect. No Party may assign either this Agreement or any or iis rights, interests or obligations hereunder without the prior written approval of the other Parties, and any such assignment by a Party without prior written approval of the other Parties will be deemed invalid and not binding on such other Parties. All of the terms, agreements, covenants, representations, warranties and conditions of this Agreement are binding upon, inure to the benefit of and are enforceable by, the Parties and their respective siiceessors and permitted
ussigns.
6.3 Notices. All notices, requests and other communieations provided for or
permitted to be given under this Agreement must be in writing and must be given by personal
14
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delivery, by certified or registered United States mail (postage prepaid, return receipt requested), by a naiionally recognized overnight delivery service for next day delivery, or by facsimile transmission, to the intended recipient at the address set forth for the recipient on the signature
page (or to such other address as any Party may give in a notiee given in accordance with the
provisions hereof). All notices, request'; or other communications wil bc effective and deemed given only as follows: (i) if given by personal delivery, upon such personal delivery, (ii) if sent by certified or registered mail, on the fifth business day after being deposited in the United States mail, (iii) if sent for next day delivery by overnight delivery service, on the date of delivery as confirmed by written confinnation of delivery or (iv) if $ent by facsimile, upon the transmitter's
confirmation of receipt of such facsimile transmission, except that if such confirmation is
received after 5:00 p.m. (in the recipient's time zone) on a business day, or is received on a day
that is not a business day, then such notice, request or communication wil not be deemed
effective or given until the next succeeding business day. Notices, requests and other
communications scnt in any other manner, including by clcctronic mail, wil not be effective.
6.4 Specifc Performaneej Remedies. Eaeh Part acknowledges and agrees that the other Parties would be damaged irreparably if any provision of thi$ Agreement were not
performed in aeeordance with its specifie terms or were otherwise breached. Accordingly, the Parties will be entitled to an injunction or injunctions to prevent breaches of the provisions of
this Agreement and to enforce specifically this Agrcement and its provisions in any action or
proceeding instituted in any federal court sitting in Nevada having jurisdiction over the Parties and the maUer, in addition to any other remedy to which they may be entitled, at law or in equity.
Except as expressly provided herein, the rights, obligations and remedies created by this
Agreement are cumulative and in addition to any othcr rights, obligations or remedies otherwise remedies. available at law or in equity. Nothing herein wil be considered an election of
6.5 Headings. The article and section headings contained in this Agreement are
inserted for convenienee only and will not affect in any way the meaning or interpretation of
this
Agreement.
6.6 Governing Law. This Agreement wil be governed by and constred in

accordance with the laws of the State of Nevada, without giving effect to any choice of law
principles.
6.7 Amendment; Extensions; Waivers. No amendment, modification, waiver,

this Agreement will be valid, unless the same is in writing and signed by all of the Parties hereto. Each waiver of a right hereunder does not extend beyond the specific event or circumstance giving rise to the right. No waiver by any Party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, may be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising because of any prior or subsequent such occurrence. Neither the failure nor any delay on the part of any Party to exercise any right or remedy under this Agreement wil operate as a waiver thereof, nor does any single or partial exereise of any right or remedy preclude any other or furter exercise of the same or of any other right or remedy.
replacement, termination or cancellation of any provision of
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMllTEE AND RHODES ENTITIES PURSUANT TO MEDIATION SETTLEMENT
this Agreement will be deemed severable and the the this Agrcement, as applied to other provisions hercof; orovided, however, that if any provision of any Party or to any eircumstance, is judicially determined not to be enforceable in accordanee with its terms, the Parties agree that the court judicially making such determination may modify
6.8 Severability. The provisions of invalidity or unenforceabilty of any provision will not affect the validity or enforeeabilty of
the provision in a manncr consistent with its objectives such that it is enforceable, and/or to
delete specific words or phrases, and in its modified form, such provision wil then be
enforccable and will be enforced.
6.9 Expenses; Transfer Taxes. Except as otherwise expressly provided in this Agreement, each Party will bear its own costs and expenses incurred in connection wiih the preparation, execution and performance of this Agreement and the Transactions, including all fees and expenses of agents, representatives, financial advisors, legal counsel and accountants.
Any and all transfer taxes, stamp taxes or similar taxes payable in connection with the
Transaetions shall be paid by the Rhodes Entities.
6.10 Counterparts; Effectiveness. This Agreement may be executed in one or more
counterparts, each of which will he deemed an original hut all of which together wil constitute one and the same instrument.
6.11 Construction. This Agreement has been frcely and fairly negotiated among the
Parties. If an ambiguity or question of intent or interpretation arises, this Agreement wil be conslrucd as if drafted jointly by the Parties and no presumption or burden of proof wil arise
favoring or disfavoring any Party because of the authorship of any provision of this Agreement. Any reference to any law wil be deemed to refer to such law as in effect on the date hereof and all rules and regulations promulgated thereunder, unless the context requires otherwise. The words "include," "includes," and "including" will be deemed to be followed by "without
limitation." The word "person" includes individuals, entities and Governmental Bodies. Pronouns in masculine, feminine and neuter genders will be construed to include any other gender, and words in the singular form wil be construed to include the plural and vice versa,
unless the context otherwise requires. The words "this Agreement," "herein," "hereof," "hereby,"
"hereunder," and words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. The Parties intcnd that each representation,
warranty and eovenant contained herein wil have independent significance. If any Part has
breached any representation, warranty or covenant contained herein in any respect. the fact that there exists another representation, warranty or covenant relating to the same subject matter the relative levels of specificity) which the Party has not breaehed will not detract (regardlcss of
from or mitigate the fact that the Party is in breach of the first representation, warranty or
covenant.
rSIGNATURE PAGES FOLLOWJ
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE AND RHODES ENTITIES PURSUANT TO MEDIA TrON SETTLEMENT
IN WITNESS WHEREOF, the Parties have caused this Asset and Share Transfer
Agreement to be executed as of the date stated iii the introductory paragraph of this Agreement.
RHODES HOMES ARIZONA PROPERTIES, LLC
By,
Name:
TItle:
Address:
RHODES HOMES ARIZONA, LLC
By,
Name:
'Itle:
Address:
ELKHORN INVESTMENTS, INC.
By'
Name:
Title:
Address:
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITIEE AND RHODES ENTITIES PURSUANT TO MEDIATION SETTLEMENT
(NEWCOj
By:
Namc:
TItlc:
Address:
(RHODES ENTITIES)
By:
Name:
Title:
Address:
James Rhodes
Address:
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PRELIMINARY DRAFT SUBJECT TO MODlFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE AND RHODES ENTITES PURSUANT TO MEDIATION SETTLEMENT
SCHEDULE I
ARIZONA
ASSETS
RHODES ARIZONA PROPERTIES LLC RHODES ARIZONA PROPERTIES LLC
306-24-115
20.25 20.24
7.35 6.83
19.92
1825 S AZTEC RD
Model Home
306-24-116
1807 AZTEC RD
4536 W DORA DR
Model Home Model Home

Model Home
Dirt Dirt
RHODES ARIZONA PROPERTIES LLC RHODES ARIZONA PROPERTIES LLC RHODES ARIZONA PROPERTIES LLC
RHODES ARIZONA PROPERTIES LLC
306.63-017
306.63-018
306-42-008A
306~42-001
4528 W DORA DR
1156 S AZTEC RD
40 10-94 S AZTEC RD
Total Acreage
114.59
Inside Pravada
Pravada and all parts of Pravada lying within Seetions 2, 3, 4, 9 and 10, in all Township 20 North, Range 18 West of tile Gila and Salt River Base and Meridian, Mohave County, Arizona and within the following APN numbers.
Rhodes Arizona Properties

Rhodes Arizona Properties Rhodes Arizona Properties
215.01-116
Parially
Graded Partially Graded
2I5-0J-in
215-01-114
215.01-1 i i
Parially
Graded Partially Graded
1,306%
Rhodes Ari7.na Properties
Total Acreage
Arizona Personal Property Computers

HP5150
Serial Number
2UA603J6N MXL615027R 2UA6030J57
2UA 70608F7
HP5150 HP5150
HPWX44O
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HP WX4400 HP XW4200 Dell
PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE AND RHODES ENTITIES PURSUANT TO MEDIATION SETTLEMENT 2UA 70608HV
2UA54215GL GZOGR61
Serial
Laptops
HPNX6125 HPNX9600
Number
CND54803L Y
CNF607lGBR
CNBXD06564 USLGY26030 U$LGY42771 CNHC620168
CNGC64CI KC
Printers
HP Laser Jet 4250
HP Laser Jet
4101
HP Laser Jei 4 1O0
HP Laser Jel 1320
HP color Laser Jet 2600 HP color Laser Jet 2804 HP color Laser Jet 5550
HPoffcejet6310
HP Photosmart 05160
Lexmark 700 I ~OO 1
Lexmark 7001 -00 i
JPBG532058 JPOC4D2072 CN639BGOYK MY67GIIODC 890CSTB 890 CD3N

J8141 101 150
Super G3 Prioter-Seanner
Fax Machines
2-HP office jets 7310

6 of
the printers and the fax machincs have copier capabilties

85172579422
Miscellaneous Equipment
Dell Power Edgc SelVcr 2850
HP Design Jet 1055CM Plus Plotter 10 Battery Surge boxes and 10 power strips
II computer monitors 20" flat screen

4 calculators
14 telephones owned by Rhodes
Offce Furniture
2 - draftng tables
3 - work tables with open shelves for plans
12-fiecabinets
2-5drawer63x 18
1 -3 drawer 36 x 20
7-4 drawer 18x 48
2-4drawer20x48
2 - 3 shelf
wood bookcases
4 - 4 shclfbookcases: (2) metal, (2) wood
I - hanging fie for plans i - metal storngc cabinct: 2-door, 4 shelves 2 - wooden storage cabinets: 2-door, 1 shelf
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FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTE AND RHODES ENTITIES PURSUANT TO MEDIATION SETTLEMENT
II - desks; (I) meial, (10) wood

12 - desk chairs
12-guestchairs
5 -siacking chairs I - 4 x 6 rotating while board .-garbagecan
10 - waste baskets
3 - 6 foot tables
2 - metal storage shelves - dimensions S' h x 3' w x 18.S"d 2 - plastic sloragc shelves - dimensions 6' h x 3' w x 18"d
Trademarks and Tradcnames

Rhodes Arizona Properties
Rhodes Arizona
Golden Valley Ranch Pravada
lntani:ibles
All architectural and engineering drawings, plus work product associated with Pravada and Golden Valley Ranch. Arizona general contractor's license.
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EXHIBIT A
BILL OF SALE
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EXHIBIT B
ASSIGNMENT AND ASSUMPTION AGREEMENT
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PRELIMINARY DRAFT SUBJECT TO MODIFICATION FINAL VERSION MUST BE ACCEPTABLE TO FIRST LIEN STEERING COMMITTEE AND RHODES ENTITIES PURSUANT TO MEDIA TtON SETTLEMENT
EXHIBIT C
(ESCROW AGREEMENT/MORTGAGEI
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SCHEDULE 1.(.)
LIENS
Liens in an amount not to exceed $60,000 held by the First Lien Lenders.
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SCHEDULE l.(bj()
ASSUMED CONTRACTS
fExeeutorv Contraets and Unexpired Leases

To be provided by Plan Supplemental Date but shall include, but not be limited to all dcvclopment agrecments and subcontractor agreements19
All agreements with municipalities and utilties with respect to Pravada and Golden Valley
Ranch.1O
v THE DEBTORS SHOULD PROVIDE LIST.
10 THE DEBTORS SHOUI.n PROVIDE LIST.
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SCHEDULE l.(b)(ii)
ASSUMED LEASES
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Exhibit N
Schedule or Assumed Executory Contracts and Unexpired Leases
Schedule of Assumed Executol)' Contracts and Unexpired Leases

DEBTOR
CONTRACT COUNTER-
PARTY NAME & SERVICE ADDRESS

..
TYPE OF CONTRACT
FMV Lease
Agreement (copiers)
PROJECTffEVELOPMENT
CURE AMOUNT (LESS RETAINER OR DEPOSIT
Case 09-14814-lbr
Toshiba Business Solutions PO Box 3083 Cedar Rapids, IA 52406~ 3083

Rhodes Ranch
Rhodes Design and Development
Rhodes Ranch Golf Club
$0.00
Taylor Made Golf
Company
Inc. d/b/a TaylorMade-adidas i Golf Company
Rental Product Agreement (golf equipment)
$0.00
I 5545 Fenni Court

Rhodes Ranch Golf
Doc 931-10
Lease Agreement
$0.00
Carlsbad, CA 92008 National City Golf Finance 996 Dalton Avenue

Country Club, LLC
(2007 EZGO Electric
Golf Carts)
Cincinnati.OH 45203
Rhodes Ranch Golf
EZGO Refresher
Gasoline vehicles
$0.00
EZOO, A Textron Company 1475 Sampson Avenue Corona, CA 92879 National City Commercial Capital Company, LLC
Country Club, LLC
995 Dalton A venue
Cincinnati,OH 46203
Rhodes Ranch Golf
Ecolab Inc.
$0.00
370 Wabash Street St. Paul, MN 55 i 02

Rhodes Ranch Golf
Country Club, LLC

Rental Agreement
Ecotemp Lease Agreement
Entered 01/15/10 15:34:13
Advantage Financial
$0.00
Country Club, LLC
(GPS Units)
$0.00
-Rhodes Ranch Golf Club

$0.00
Rhodes Ranch Golf
Country Club, LLC

Rhodes Ranch Golf
Product license agreement

Lease Agreement
(gas vehicles)
Page 30 of 80
Services, LLC 108 Foxcroft Road West Hartford, CT 06119 EZLinks Golf, Inc. 401 S. LaSalle, Suite 500 Chica.o, IL 60605 Textron Financial i 1575 Great Oaks Way, Suite 210
Country Club, LLC
73203.1X2\DOCS_Lkii0795 I
CONTRACT COUNTER- , DEBTOR

' TYPE OF
PROJECT/DEVELOPMENT

!
CONTRACT
,
: ,
Alpharetta, GA 30022 Cybergolf

Rhodes Ranch Golf
i Email marketing
I , , ,

$0.00
110 W. Dayton, Suite 103
Countr Club, LLC

i Tuscany Golf Club
I Services Agreement
Edmonds. W A 98020
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Brink's U.S., a division of Brink's Incorporated
Tuscany Golf Club
$0.00
3200 E. Charleston Blvd.
Tuscany Golf Club

Equipment Lease
Tuscany Golf Club
$0.00
(Club House)
Doc 931-10
Tuscany Golf Club

Equipment Lease
Tuscany Golf Club
$0.00
(Offce Trailer)
Tuscany Golf Club

Equipment Lease
Tuscany Golf Club
$0.00
Las Vegas, NY 89104 Modular Space Corporation 5950 Emerald Ave Las Ve!as, NV 89122 Modular Space Corporation 5950 Emerald Ave Las Vegas, NV 89122 Modular Space Corporation 5950 Emerald Ave Las Vegas, NY 89122
(Restroom Trailer)
Equipment Lease
National City Golf
Finance,
Tuscany Golf Club
$0.00
Division of
National City Commercial Capital Company, LLC 995 Dalton Avenue Cincinnati, OH 45203
Tuscany Golf Country Club, LLC

(EZGO Refreshers)
-Tuscany Golf Club

I SO.OO
National Cit)' Golf
Finance,
Equipment Lease
Entered 01/15/10 15:34:13
Division of
National City
Tuscany Golf Country Club, LLC
(Gas utility vehicle)
Commercial Capital
I I
Company, LLC 995 Dalton Avenue Cincinnati, OH 45203
National City Golf
Finance,
Equipment Lease
Tuscany Golf Club
$0.00
Page 31 of 80
National City Commercial Capital

2
Division of
Tuscany Golf Countr Club, LLC
(EZGO electric golf cars)
Comoanv, LLC
13203.002\DOCS_LA:ii0795.i
CONTRACT COUNTER-
DEBTOR
PROJECTmEVELOPMENT
PARTY
NAME
&
TYPE OF CONTRACT
SERVICE ADDRESS
995 Dalton Avenue Cincinnati, OH 45203
Golflogix Systems
Tuscany Golf
GPS System
Tuscany Golf Club
$0.00
3960 E. Expedition Way

Tuscany Golf
Country Club, LLC
Phoenix, AZ 85050
Alarm Monitoring
Tuseany Golf Club
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Alarmco
Country Club, LLC
Tuscany Golf
$0.00
2007 Las Vegas BI So
Las VeJ!as, NV 89104 Unifirst Corporation

Maintenance Uniform
Service Comnanv Lease Agreement
Tuscany Golf Club
$0.00
568 Parkson Rd Henderson, NY 8901 i
Doc 931-10
Alyssa L. and Roger L.
Frank
i 036 Via Camelia Street Henderson, NV 89011
$0.00
1011 West2thStreet
Country Club. LLC Rhodes Design and Development Corporation
Scottsbluff, NE 69361 3609 Bison Street, Scoltsbluff, NE 69361

Lease Agreement
i 040 Via Camelia Street

Henderson, NV 890 i i
Frank 101 i West 27th Street Scottsbluff, NE 69361 3609 Bison Street,
Rhodes Design and
Rhodes Design and Development Corporation
$0.00
~.sbluff, NE 69361
Alyssa L. and Roger 1-
Lease Agreement
Entered 01/15/10 15:34:13
Frank
i 0 11 West 27th Street
Development Corporation
1044 Via Camelia Street Henderson, NY 8901 i
~ $0.00
Scottsbluff, NE 6936 i 3609 Bison Street, Scottsbluff, NE 69361

Lease Agreement
1048 Via Camelia Street Henderson, NV 89011
$0.00
Frank
Page 32 of 80
1011 West2ihStreet
Scottsbluff, NE 69361
3
73203.002\DOCS_LA:210795.1
CONTRACT COUNTER. PARTY NAME & SERVICE ADDRESS
DEBTOR
TYPE OF CONTRACT
PROJECTIDEVELOPMENT
Lease Agreement
SO.OO
765 Orchard Course Dr.
Las Vegas, NY 89148

Lease Agreement
SO.OO
Case 09-14814-lbr
3609 Bison Street, Scottsbluff, NE 69361 Hua Hui Tseng Huang 534 N. Orange #A La Puente, CA 91744 I-Chich E. Wang and Da Ching P. Wang 52 Redwood Lane
Rhodes Design and Development Cornoration Rhodes Design and Development Corporation
Las Vegas, NY 89148

,
South Glastonbury, CT 06073

Lease Agreement
SO.OO
Doc 931-10
Xijuan Xu and Xikui Xu 12845 Crestfield Court
Rancho Cucamonga, CA
Lease Agreement
Las Vegas, NY 89148
91739-8011 Elena Elamparo 5261 Polis Drive

Lease Agreement
I i I Sandy Bunker Lane Las Vegas, NV

101 Sandy Bunker Lane Las Vegas, NY
22 Indian Run Way
SO.OO
SO.OO
La Palma, CA 90623 Tin Kerine Cheung 2346 Indian Creek Rd Diamond Bar, CA 91765 Glynda Rhodes
Lease Agreement
SO.OO
5068 Spanish Heights

Lease Agreement
Las Vegas, NY
SO.OO
Las V e~as, NY 89148 Flamingo Self Storage
Entered 01/15/10 15:34:13
8525 West Flamingo Road
Las Vegas, NV 89147

Rhodes Design and Development Corooration Rhodes Design and Development Corporation Rhodes Design and Development Comoration Rhodes Design and Development Corporation
Lease Agreement
8525 West Flamingo Road, Unit 2258 Las Vegas, NV 89147
Fort Apache Self
Storage
9345 W. Flamingo Road Las Vegas, NV 89147
9345 W. Flamingo Rd Unit 2228 Las Vegas, NV 89147

Lease Agreement
SO.OO
Page 33 of 80
9345 W. Flamingo Rd Unit 2543

Las Vep"as, NV
Fort Apache Self Storage 9345 W, Flaminuo Road

4
Rhodes Design and Devclonment
SO.
00
?3203.002\DOCS_I..210?95,i
CONTRACT COUNTER-
DEBTOR

Corporation
Lease Agreement
9345 W. Flamingo Rd Unit 1012
TYPE OF CONTRACT
89147
PROJECTIDEVELOPMENT
Las Vegas, NY 89147

$0.00
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Fort Apache Self Storage 9345 W. Flamingo Road Las Vegas, NY 89147
Las Vegas, NY 89147
Lease Agreement
Rhodes Realty. Inc.
Fort Apache Self Storage 9345 W. Flamingo Road Las Vegas, NY 89147
Lease Agreement
1428 Pama Lane
9345 W. Flamingo Rd Unit 2135 Las Vegas, NY 89147

Las Vegas, NY 89118
I ,
$0.00
Doc 931-10
Recall Inronnation Management

$0.00
1428 Pama Lane
Las Vegas, NY 89 118
Silverado Self Storage II
9545 West Russell Road Las Vegas, NY 89148

Rhodes Realty, Inc.
Lease Agreement

Lease Agreement
9545 West Russell Rd, Unit 301 6 Las Yegas NY 89148
$0.00
Stow A way
921 Olsen Street Henderson, NY 89015

Tribes Holdings, LLC
Lease Agreement
921 Olsen Street, Unit 136 Henderson, NV 89015
$0.00
Entered 01/15/10 15:34:13
Unit 001 & W44 721 Cape Horn Avenue

Henderson, NY 8901 I
Warm Springs R.V. & Mini Storage 721 Cape Horn Avenue Henderson, NY 89011
Rhodes Realty, Inc.
Lease Agreement
$0.00
Tuscany Master Association
850 Olivia Parkway Henderson, NV 89011

Home sale contract
A vellno
$0.00
Page 34 of 80
Rhodes Design and

Development Corp
5
133 Rhodes Ranch Parkway Las Vegas, NV 89148 Tyler Dion 452 Punto Val lata Dr Henderson, NV 89011
$0.00
73203.002\DOCS_L.A:21079S.1
CONTRACT COUNTER-
DEBTOR

Rhodes Raneh
Home sale eon tract
TYPE OF CONTRACT
Collections
PROJECTIDEVELOPMENT
$0.00
I , , ! ,
Ernesto N. Tumbaga 610 Over Par Ct.

General Partnership
Rhodes Ranch General Partnership
Las Venas, NY 89 i 48
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Jen Chieh Wang 35 i Center Green Dr Las Veras, NY 89148

Tuscany
Aequisitions Il,
Home sale contract
Collections
$0.00
Edward Vien
Home sale contract
Fiori Townhomes
$0.00
,
LLC
Home sale contract
Greens
,
$0,00
Doc 931-10
u
Home sale contract
Greens
I
$0.00

Rhodes Ranch
Home sale contract
Greens
$0.00
1072 Via Corto $( Henderson, NY 89011 Eunji Ko 312 Trailng Putt Way Las Vegas, NV 89148 Jenilee Andres 283 Trailing Putt Way Las Venas, NY 89148 Xu Xuan Huang 271 Trailng Putt Way Las Vel!as, NY 89148
General Partnership
Josephine J. So
Home sale contract
Greens
$0.00
265 Trailing Putt Way Las Vegas, NY 89148

Maridel D. Rivera
Home sale contract
Greens
$0.00
382 Broken Par Drive i Las VCfJas, NY 89148
Entered 01/15/10 15:34:13
Allison $. Bradish
Home sale eontract
Greens
$0.00
304 Ladies Tee Court

Rhodes Ranch General Partnership Rhodes Ranch General Partnership
Las Vee:as, NY 89148 Vana Z. Fayad
Home sale contract
Greens
$0.00
384 Cart Crossing Way
Las Vegas, NV 89148
Page 35 of 80
Maher Mark A war
Home sale contract
Greens
$0.00
386 Dog Leg Dr Las VeQas, NV 89148

6
73203.002\DOCS_I.A:210795.1
CONTRACT COUNTERI PROJECTffEVELOPMENT

I I
DEBTOR
PARTY
NAME
&
TYPE OF CONTRACT
SO.OO
SERVICE ADDRESS
Rhodes Ranch
Chun Hong \V ang
Home sale contract

I Greens
385 Dog Leg Drive

General Partnership
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Home sale contract

SO.OO
Greens
Rhodes Raneh
General Partnership
Rhodes Ranch
Home sale contract
Greens
SO.OO
Doc 931-10
Home sale contract
Greens
SO.OO
Las Vel!as, NY 89148 Chun Hong Wang 38 I Dog Leg Drive Las Vegas, NY 89148 Cbun Hong Wang 377 Dog Leg Drive Las Ve!!as. NY 89148 Melba P. Page 259 Trailng Putt Way Las Ve'!as. NY 89148 David L. Downer
Home sale contract
Greens
SO.OO
382 Dog Leg Drive

General Partnership
Las Vegas, NY 89148 Ruben P. Deang Jr. Home sale contract

Greens
SO.OO
378 Dog Leg Drive

Home sale contract
Irons
SO.OO
Las Venas, NY 89148 Christopher & Li Yun Zhang 126 Cooks Creek Court Las Vegas, NY 89148 Suzanne Z. Broadbent 933 Via Stellato
Tuscany Acquisitions, LLC
Home sale contract
LaLuna
SO.OO
Henderson. NY 890 i I
Entered 01/15/10 15:34:13
Roy M. Brown 976 Via Stellato Henderson, NV 89011
Home sale contract
La Luna
SO.OO
Matthew Lewis
Home sale contract
LaLuna
SO.OO
929 Via Doccia Ct
Henderson, NV 890 I I
Rhodes Ranch
Page 36 of 80
Home sale contract

7
Majors
SO.OO
Daiiilo B. Mupas 93 Honors Course Drive
General Partnershin
7n03.002\DOCS_LA:21079S. i
CONTRACT COUNTER-
DEBTOR
PARTY NAiVlE & SERVICE ADDRESS
TYPE OF CONTRACT
PROJECTIDEVELOPMENT
Las Veizas, NY 89148 Patrick M. Cheng

Home sale contract

$0.00
Majors
81 Honors Course Dr
Case 09-14814-lbr
Las Vegas, NV 89148 Jeffrey Chung 77 Honors Course Dr Las Vel!as, NV 89148
Home sale contract
Majors
$0.00
Nobuhiko kushima
Home sale contract
Majors
$0.00
i i 5 Honors Course Dr
Doc 931-10
Las VC2as. NY 89148 Eleanor Louise Charboneau
945 Rue Grand Paradis Ln Henderson, NV 8901 I

Rhodes Ranch
Tuscany Acquisitions iv LLC

Home sale contract
Melani
$0.00
Rui Ling Huang Chang

General Partnership
Rhodes Ranch
211 Fairway Woods Dr
I Home sale contract

I Pacific
Mist
$0.00
Las Vciias, NY 89148 Jin Huang 217 Fairway Woods Dr Las Vceas, NY 89148
Home sale contract
PaeificMist
Palms Bay
$0.00
Hao Zhang
General Partnership
Rhodes Ranch
Home sale contract
$0.00
n_
$0.00
555 Halloran Springs Rd Las VCQas, NY 89148 Won Kyung Lee

Home sale contract
General Partnership
Rhodes Ranch
Palms Bay
Entered 01/15/10 15:34:13
579 Halloran Springs Rd
Las V ceas, NY 89 I 48 Joel P. Laurel
Home sale contract
Palms Bay
$0.00
General Partnership
7 i Myrtle Springs Ct Las Vegas, NY 89148 Peter K. Lee

Rhodes Ranch General Partnership Rhodes Ranch General Partnership
8
Home sale contract
Palms Bay
$0.00
86 Myrtle Springs Ct
Page 37 of 80
Las Vegas, NV 89148 Christopher S. Rogers 94 Mvrtle Springs Court
Home sale contract
Palms Bay
$0.00
73203.Q02\DOCS_LA:2\0795.1
CONTRACT COUNTER-
DEBTOR

SO.OO
TYPE OF CONTRACT
PROJECT/DEVELOPMENT
Las Vegas, NV 89148 David 1. Braucher 1073 Via Saint Andrea

Home sale contract
Terrazzo
Case 09-14814-lbr
Henderson, NY 8901 I Elise Imbert-Sielaw

Home sale contract
SO.OO
Terrazzo

I
Home sale contract
Terrazzo
SO.OO
1070 Via Saint Andrea Henderson. NY 8901 1 Wendy Butensky 1038 Via Nandina Henderson, NY 8901 1 Manuel A. & Jessica N. Del
Doc 931-10
Taro 1066 Via Nandina Henderson, NY 89011

Home sale contract

Terrazzo
I SO.OO
Bruno Van Dierendonck
Home sale contract

Terrazzo
$0.00
580 Via Colmo

Rhodes Ranch
Henderson, NY 890 i i
Wilfreda DeLeon 1006 Via Nandina Henderson, NY 890 11

Home sale contract
West 57th General Partnership
Home sale contract
Terrazzo
$0.00
Gale Genevieve Glepa
$0.00
Entered 01/15/10 15:34:13
6442 Aether 5t Las Vegas, NY Jennifer Thomas 6448 Aether St

Home sale contract
West
57th
$0.00
Las V CQas, NY
Stanley Schiff
988 Via Canale Dr

Rhodes Homes
Home sale contraet
Zanetti
$0.00
Henderson, NY 8901 i
Neopost Leasing
Page 38 of 80
P.O. Box 45840 San Francisco, CA 941459
Postage machine lease
$0.00
0840
7J20J.02\DOCS_LA:210795.i
CONTRACT COUNTERPARTY NAME &

Equipment Lease
DEBTOR
TYPE OF CONTRACT
$0.00
-
PROJECT/DEVELOPMENT
SERVICE ADDRESS
Insight Direct USA, Inc. P.O. Box 550599 Jacksonville. FL 32255-0599

Tuscany
Tuscany Master Association
$0.00
850 Olivia Pkwy

Association Group)
Rhodes Design and Development/Rhodes Homes C&J Holdings (Neighborhood
Case 09-14814-lbr
Henderson, NY 8901 i
C&J Holdings (Neighborhood

Association Group)
a'reement
Rhodes Ranch Association, Inc. 133 Rhodes Ranch Pkwy.
(computer eauinffcnt) Homeowners association management apreement Homeowners association management

Rhodes Ranch
$0.00
Doc 931-10
C&J Holdings (Neighborhood

Association Group)
Rhodes Ranch GP
X-IT
$0.00
Las Vegas, NY 89148 X-IT Homeowners Assoeiation 9050 W. Tropicana Avenue Las Veiias. NY 89147 Clark County Nevada Development Services 500 S. Orand Central Pkw 1st Floor
Homeowners association management agreement Off-Site Improvements Agreement
Rhodes Ranch Parcel 20 Unit 2, HTE 05-46722/HTE 09-2990
$0.00
Bod5 1 799
Rhodes Ranch GP
Entered 01/15/10 15:34:13
Las Vee:as, NY 89155-1799 Clark County Nevada Development Services 500 S. Grand Central Pkwy 1st Floor
Off-Site Improvements Agreement
SeeHger Street, HTE 06-51550 (APN 176-17-310-002)
$0.00
I
Box 5S I 799
Rhodes Ranch GP
Las VO"". NY 89155-1799 Clark County Nevada Development Services 500 S. Grand Central Pkwy
Off-Site Improvements Agreement
Seeliger Street Phase, 2 HTE 068770
SO.OO
1st
Floor
Page 39 of 80
Box 551799
Las Yel!as, NY 89155-1799

10
73203.O\2\DOCS_LA:210195.1
CONTRACT COUNTER-
DEBTOR
PROJECTIDEVELOPMENT
PARTY
NAME
&
TYPE OF CONTRACT
Rhodes Ranch Parcel i 0 Unit 1 \,
SERVICE ADDRESS
Rhodes Ranch GP
OffwSite
$0.00
HTE 06-37497 (APN 176-08-20 t011)
Clark County Nevada Development Services 500 S. Orand Central Pkwy

Improvements Agreement
1st
Floor
Case 09-14814-lbr
Box 55 1 799
Las Vegas, NY 89155-1799 Clark County Nevada Development Services 500 S. Orand Central Pkwy 1st Floor
Off-Site Developmcnt/odes Improvement Agreement Homes

Rhodes Design and
Spanish Hils SA, HTE 01-31446
$0.00
Box 551799
Doc 931-10
Las VCI!3S, NY 89155-1799
Rhodes Design and Off-Site Development/Rhodes Improvement Agreement Homes
Tuscany Maintenance Facilty (APN $0.00 160-32-210-001) #200270500 I
Tuscany Maintenance Water/Sewer
$0.00
City of Henderson 240 Water Street P.O. Box 95050 Henderson, NY 89009-5050 City of Henderson 240 Water Street P.O. Box 95050 Henderson, NY 89009-5050
Off-Site Rhodes Design and Development/Rhodes Improvement Agreement Homes
Rhodes Design and
#2004870064
City of
Henderson
Off-Site
Tuscany Parcel 6A #2006870049
$0.00
,
Developmentfodes Improvement
Homes
Rhodes Design and
240 Water Street P.O. Box 95050 Henderson, NY 89009-5050
Agreement
Entered 01/15/10 15:34:13
City
of
Henderson
240 Water Street P.O. Box 95050 Henderson, NY 89009-5050

Rhodes Design and
Off-Site Development/Rhodes Improvement Agreement Homes Off-Site Development/odes Improvement Agreement Homes
Rhodes Desie:n and
11
Tuseany Parcel 10 (APN 160-32612-001) #2005870194
$0.00
Page 40 of 80
City of
Henderson
Tuscany Parcel 11 #2006870000
$0.00
240 Water Street P.O. Box 95050 Henderson. NY 89009-5050
Citv of
Henderson
Off-Site
Tuscan\! Parcel 12 #2004870179
$0.00
73203-02\DOCS).k210795_1
CONTRACT COUNTER, , , , ;
DEBTOR

Development/Rhodes Homes
Tuscany Parcel 14 (APN IGO~32SO.OO
TYPE OF CONTRACT
Improvement Agreement
PROJECTiDEVELOPMENT
Case 09-14814-lbr
240 Water Street P.O. Box 95050 Henderson, NY 89009-5050 City of Henderson 240 Water Street P.O. Box 95050
6 I 0-001) #200687000 I
Rhodes Design and
,
Henderson, 'NV 89009-5050
City of
Off-Site Development/Rhodes Improvement Agreement Homes

Tuscany Parcels 16 & 17 #2002702075
, Tuscany Parcel 15 #2005870136
SO.OO
Doc 931-10
Rhodes Design and
SO.OO
Deve(opmentlhodes
Homes
Off-Site Improvement Agreement
Hendcrson 240 Water Street P.O. Box 95050 Henderson, NV 89009-5050 City of Henderson 240 Water Street P.O. Box 95050 Henderson. NY 89009-5050 City of Henderson 240 Water Street P.O. Box 95050 Henderson, NV 89009-5050
Rhodes Design and
Off-Site Developmentlodes Improvement Agreement Homes

Tuscany ParcellS #2002705132
SO.OO
City of
Henderson
Tuscany Parcel i 9 #2002405 i 33
SO.OO
Entered 01/15/10 15:34:13
Rhodes Design and
DevelopmenRodes
Homes
Off-Site Improvement Agreement Off-Site
Tuscany Parcels 23 & 25 #2005870045
SO.OO
Rhodes Design and

Homes
Tuscany Parcel 24 #2002705045
SO.OO
Development/hodes Improvement
Agreement
240 Water Street P.O. Box 95050 Henderson, NY 89009-5050 City of Henderson 240 Water Street P.O. Box 95050 Henderson, NV 89009-5050 City of Henderson 240 Water Street P.O. Box 95050 Henderson. NV 89009-5050
Rhodes Ranch
12
Page 41 of 80
Lexon Insurance Comnanv
Bond
Bond # 5020298 (Rhodes Ranch
SO.OO
73203.002\DOCS_LA:210795. i

Limited Partnership
Parcel 20 Unit 2)
DEBTOR
TYPE OF CONTRACT
PROJECTIDEVELOPMENT
CUR AMOUNT (LESS RETAINER OR DEPOSIT
Bond Safeguard Insurance Company 19 I 9 S. Highland Dr. Bldg.
Suite 300
Case 09-14814-lbr
Lombard, TL 60 i 48
Zurich American Insurance 60 i Oakmont Lane, Ste. 400

Rhodes Ranch General Partnership Rhodes Ranch
General Partnership
Bond
Bond # 8842781 (Secliger Street)
$0.00
Westmont,IL 60559
Zurich American Insurance 601 Oakmont Lane, Ste, 400

Bond
Parcel 10 Unit 1 i)
Bond
Bond # 88256 i 6 (SeeHger Street Phase 2)
$0.00
Doc 931-10
Westmont,IL 60559
Zurich American Insurance 60 i Oakmont Lane, Sle. 400

Bond
Bond # 8840999 (Rhodes Ranch
$0.00
Westmont, IL 60559
Lexon Insurance Company Bond Safeguard Insurance Company 1919 S. Highland Dr. Bldg.
Bond # 5018764 (Spanish Hills SA)
$0.00
Rhodes Ranch
Bond
Bond # 5014307 (Tuscany Maim.

OS Imp.)
$0.00
Entered 01/15/10 15:34:13
Suite 300 Lombard, IL 60 i 48 Lexon Insurance Company Bond Safeguard Insiiranee Company 19 I 9 S. Highland Dr. Bldg.
General Partnership
Suite 300
Lombard, lL 60148
Rhodes Raneh
General Partnership
Bond
Bond # 5014306 (Tuscany Maint.

Water Sewer)
Page 42 of 80
Lexon Insurance Company Bond Safeguard Insurance Comoanv

13
$0.00
73203.002\DOCS_LA:2l0795.1
CONTRACT COUNTERI DEBTOR

I
TYPE OF CONTRACT
PROJECT/DEVELOPMENT
1919 S. Highland Dr. Bldg.
Tuscany
Acquisitions iv,
Case 09-14814-lbr
Bond
Bond # 5029286 (Tuscany 6A)
$0.00
Suite 300 Lombard, IL 60 i 48 Lexon Insurance Company Bond Safeguard Insurance Company 1919 S. Highland Dr. Bldg. A Suite 300
LLC
Bond
Bond # 8826397 (Tuscany 10)
Lombard, IL 60148
Doc 931-10
Zurich American Insurance 60 I Oakmont Lane, Ste. 400

Bond
$0.00
Westmont,IL 60559
Zurich American Insurance 601 Oakmont Lane, Ste. 400

Rhodes Design and
Bond # 8865454 (Tuscany 1 I)
$0.00
Westmont, IL 60559
Rhodes Design and Development Cornoration Rhodes Design and Development Cornoration
Bond
Zurich American Insurance 601 Oakmont Lane, Ste. 400

Development Cornoration
Rhodes Design and
$0.00
Westmont, IL 60559
Lexon I nsurance Company
Bond
$0.00
Bond Safeguard Insurance Company 1919 S. Highland Dr. Bldg.
Development Corporation
Entered 01/15/10 15:34:13
Tuscany
Acquisitions II,
Bond
i Bond # 5021428 (Tuscany 15)
$0.00
i i ,
Suite 300 Lonibard, II. 60148 Lexon Insurance Company Bond Safeguard Insiirance Company 1919 S. Highland Dr. Bldg.
LLC
Page 43 of 80
Suite 300
14
73203.002\DOCS_LA :21 079~. i
! CONTRACT COUNTER, PARTY NAME & SERVICE ADDRESS

Bond # 5019816 (Tuscany 16 & 17)
DEBTOR
TYPE OF CONTRACT
PROJECTIDEVELOPMENT
Lombard, IL 60148 i Lexon Insurance Company

$0,00
\ Bond Safeguard Insurance Company

I Bond
, ,
Case 09-14814-lbr
i ;;19 S. Highland Dr. Bldg.
I Lombard, IL 60148 SuiteJOO
! Lexon J nsurance Company
I Company Bond Safeguard Insurance
Rhodes Design and Development i Corporation
Bond
$0.00
Doc 931-10
1919 S. Highland Dr. Bldg.
A Suite 300
Lombard, IL 60148 Lexon Insurance Company Bond Safeguard Insurance Company i 9 i 9 S. Highland Dr. Bldg.
Bond
Bond # 5017134 (Tuscany 23 & 25)
SO.OO
Entered 01/15/10 15:34:13
Suite 300 Lombard, lL 60148 Zurich American Insurance I Rhodes Design and 60 I Oakmont Lane, Ste. 400 Development Conioration Westmont, IL 60559
Bond
$0.00
Bond
Bond # 5034264 (Mohave AZ

Sheriffs Offce Detention)
Page 44 of 80
Pinnacle Grading, LLC
$0.00
Lexon Insurance Company Bond Safeguard Insurance Company 1919 S Highland Dr. Bldg. A Suite 300 Lombard, IL 60148 Lexon Insurance Comnaiiv
Tuscanv Golf
15
Bond
Bond # 1008343 (NV Dent Tax
$0.00
73l03.002\DOCS_LA:21079S.1
CONTRACT COUNTER- i DEBTOR

Country Club, LLC
TYPE OF CONTRACT
Sales Tax Tuscany OolfCourse)
PROJECTIDEVELOPMENT
Bond Safeguard Insurance Company 1919 S. Highland Dr. Bldg.
Case 09-14814-lbr
Bond # 5019324 (State Contractors
$0.00
Suite 300 Lombard. IL 60148 Lexon Insurance Company Bond Safeguard Insurance Company 19 I 9 S. Highland Dr. Bldg.
i Bond Rhodes FraminglBravo, Ine.
Board-Bravo)
Doc 931-10
Suite 300 Lombard, IL 60148

Rhodes Ranch
County or
Clark
Rhodes Ranch
Rhodes Ranch
SO.OO
500 S. Grand Central Pk\\'Y

A O'reement
General Partnership
Development Construction agreement for water facilities Rhodes Ranch Parcel i 0 Unit 11
$0.00
Las Vcl!as, NY 89155
Las Vegas Valley Water
Construction
agreement for water
Tuscany Parcel 6A
$0.00
Rhodes Design and Development Corporation/Rhodes Homes Rhodes Design and Development CorporationlRhodes Homes
facilities
Entered 01/15/10 15:34:13
District 1001 South Valley View Las Ycrras, NY 89153 Henderson Dept of City of Utility Services 240 Water Street . P.O. Box 95050 Henderson, NY 89009-5050 City of Henderson Dept of
Tuscany Parcell 0
$0.00
Utilty Services
Rhodes Design and Development Corporation/Rhodes Homes
Construction agreement for water facilities
240 Water Street P,O. Box 95050 Henderson, NY 89009-5050 City of Henderson Dept of
Rhodes Design and Development CoroorationlRhodes
16
Construction
agreement for water
Tuscany Parcel II
facilities
$0.00
Page 45 of 80
Utilty Services
240 Water Street
1l21)).OO2\DOCS_LA:211)195.1
CONTRACT COUNTER-
DEBTOR

Homes Rhodes Design and Development Corporation/Rhodes Homes Rhodes Design and Development Corporation/Rhodes Homes
Tuscany Parcel 15
TYPE OF CONTRACT
PROJECT/DEVELOPMENT
Case 09-14814-lbr
Tuscany Parcel 14
$0.00
$0.00
Doc 931-10
Rhodes Design and

Rhodes Ranch Parcel
Water supply
20 Unit 1
$0.00
Development
agreement andlor
application for water
Corporationlodes
Homes
Rhodes Design and
serviee
Water supply agreement and/or
Rhodes Ranch Parcel 20 Unit 2
$0.00
application for water service

Water supply agreement and/or application for water
Rhodes Ranch Parcell 0 Unit II
$0.00
Entered 01/15/10 15:34:13
service
Water supply
Rhodes Ranch Parcel 12
$0.00
Development Corporation/Rhodes Homes Rhodes Design and Development Corporation/Rhodes Homes Rhodes Design and Development
agreement and/or
Corporation/hodes
service

Rhodes Ranch Parcel 14
Homes Rhodes Design and Development
$0.00
P.O. Box 95050 Henderson. NV 89009-5050 City of Henderson Dept of Utility Services 240 Water Street P.O. Box 95050 Henderson. NV 89009-5050 Henderson Dept of City of Utility Services 240 Water Street P.O. Box 95050 Henderson, NY 89009-5050 Las Vegas Valley Water District 1001 South Valley View Las Vef!as, NV 89153 Las Vegas VaHey Water District 1001 South Valley View Las V ci:as, NV 89153 Las Vegas Valley Water District i 001 South Valley View Las Vegas, NV 89153 Las Vegas Valley Water District 1001 South Valley View Las Vegas, NV 89153 Las Vegas Valley Water District 1001 South Valley View
Page 46 of 80
Corporation/odes
Homes Rhodes DesIon and
17
Las Ver.as, NY 89 i 53
service
Water suooly
West57U1
Las Vegas Vallev Water
$0.00
73203.002\OOCS_l-A'2i0795.1
CONTRACT COUNTER-
DEBTOR
PARTY NA'\1E &
TYPE OF CONTRACT
agreement and/or
PROJECTIDEVELOPMENT
SERVICE ADDRESS
service
.
Case 09-14814-lbr
Spanish Hills
$0.00
applieation for water serviee

Water supply
Spanish Hils multi-familylX-IT
Development Corporation/Rhodes Homes Rhodes Design and Development Corporation/Rhodes Homes Rhodes Design and Development
$0.00
Corporation/Rodes
Tuscany Parcel 6A
agreement and/or application for water service

$0.00
District 1001 Soiith Valley View Las Venas, NY 89153 Las Vegas Valley Water District 1001 South Valley View Las Vegas, NY 89153 Las Vegas Valley Water District 100 i South Valley View Las Vegas, NV 89153 City of Henderson Ocpt of
Homes Rhodes Design and Development Corporation/Rhodes Homes
Doc 931-10
Utilty Services
service
Tuscany Parcel i 0
$0,00
Corporationlodes
Homes
service
Tuscany Parcel 11
$0,00
Entered 01/15/10 15:34:13
CorporationIhodes
Homes

Tuscany Parcel 12
240 Water Street P.O. Box 95050 Henderson, NY 89009-5050 Henderson Dept of City of Utility Serviees 240 Water Street P.O. Box 95050 Henderson. NY 89009-5050 City of Henderson Dept of Utility Services 240 Water Street p,O, Box 95050 Henderson, NV 89009-5050 City of Henderson Dept of
$0.00
Utilty Services
Corporationlodes
Homes

Tuscany Parcel 14
Page 47 of 80
240 Water Street P,O. Box 95050 Henderson, NV 89009-5050 Henderson Dept of City of
Rhodes Design and Develonment
18
$0.00
Utilit Services
73203-02\DOCS_LA:210795.1

CorporationlRodes
applieation for water
DEBTOR
TYPE OF CONTRACT
PROJECTIDEVELOPMENT
Homes
service

Tuscany Pareel15
Case 09-14814-lbr
CorporationlRodes
Homes
Tuscany Parcel 16
Water supply agreement and/or applieation for water
$0.00
i i
240 Water Street P.O. Box 95050 Henderson. NV 89009~5050 City of Henderson Dept of Utility Services 240 Water Street P.O. Box 95050 Henderson, NV 89009-5050
service
$0.00
City of
Henderson Dept of
Doc 931-10

service
Tuscany Parcel 17
$0.00

WateT supply
Tuscany Parcel 18
Rhodes Design and
$0.00
Development
agreement and/or
Corporationlodes
Homes
.
Utility Services 240 Water Street P.O. Box 95050 Henderson. NY 89009-5050 City of Henderson Dept of Utility Services 240 Water Street P.O. Box 95050 Henderson. NY 89009-5050 City of Henderson Dept of Utility Services 240 Water Street P.O. Box 95050 Henderson, NY 89009-5050
Tuscany Parcel 19
Entered 01/15/10 15:34:13
City of
Henderson Dept of
$0.00

Utility Services 240 Water Street P.O. Box 95050 Henderson, NV 89009~5050 City of Henderson Dept of
Tuscany Parcel 23
$0.00
Utilty Services
CorporationlRodes
Homes
19
Page 48 of 80
240 Water Street P.O. Box 95050 Henderson, NV 89009~5050
7320M02\DOCS_LA:210795.1
CONTRACT COUNTER-
DEBTOR

Rhodes Design and
TYPE OF CONTRACT
PROJECTIDEVELOPMENT
CUR AMOUNT (LESS RETAINER OR DEPOSIT
I City of Henderson Dept of

Development
Tuscany Parce124
$0.00
, Utility
Services
Corporaonlhodes
Homes
Rhodes Design and
service
Tuscany Parcel 25
Case 09-14814-lbr
240 Water Street P.O. Box 95050 Henderson, NY 89009-5050 City of Henderson Dept of
$0.00
i Utility Services ! 240 Water Street P.O. Box 95050 Henderson, NV 89009-5050
Feeder line
Development Corporation/Rhodes Homes

Rhodes Ranch RR MP A 90777
Nevada Power
$0.00
Doc 931-10
6226 West Sahara Avenue

agreement
Las Vegas, Nevada 89146

Feeder line
CorporationlRodes
Rhodes Ranch RR MPA 175637
$0.00
,
Nevada Power 6226 West Sahara Avenue

agreement

Feeder line
Nevada Power
Palm Hills MPA 84071
$0.00
agrccment

Feeder line
Homes Rhodes Design and Development CorporationfRhodes Homes Rhodes Design and ' Development Corporation/Rhodes Homes
Tuscany 172531
Nevada Power
$0.00
._...
Entered 01/15/10 15:34:13

.
agreement
i Feeder line
Tuscany 177546
Las Veeas, Nevada 89146 Nevada Power
$0.00

agreement
Health insurance
Las Vegas, Nevada 89 i 46
Health Plan of
Nevada
$0.00
agreement
P. O. Box 15645 Las Vegas, NV 89114.5645
Corporationlodes
Homes
Rhodes DesiO"n and
Page 49 of 80
Ceridian
Cobra and HIPPA

20
SO.OO
n203-O2\DOCS_LA:2lO795. i
CONTRACT COUNTER! TYPE OF I CONTRACT

I
DEBTOR
PROJECTffEVELOPMENT

Development
services
320134:1\ Street South St. Petersburg, FL 33711
CorporationlRodes
Reimbursement services agreement
$0,00
American Family Life
Case 09-14814-lbr
Assurance Company
(AFLAC) 2990 Sunridge Heights Pkwy
Homes Rbodes Design and Development Corporation/Rhodes Homes
Suite 140
Henderson, NY 89052
Rhodes Design and
Softare license
Sage Softare, Inc.

Development
agreement
Doc 931-10
$0,00
i 5195 NW Greenbrier Pkwy Beaverton, OR 97006
Corporationlodes
Homes
Rhodes Design and
Softare license
Builder MT
agreement
$0,00
200 Union Boulevard
Suite 500 Lakewood, CO 80228 , Builder 1440, Inc. 2000 W. 4151 Street Baltimore, MD 2121 l
Software license agreement
SO,OO
Software license agreement
$0,00
Entered 01/15/10 15:34:13
BNA P,O, Box 17009 Baltimore, MD 2I297IOO9

Softare license
$0,00
-$0,00
rCB Consulting, Inc. 2855 N. Speer Suite #B Denver, CO 80211
agreement (Crystal Reports)

Softare license
Development Corporation/Rhodes Homes Rhodes Design and Development CorporationfRhodes Homes Rhodes Design and Development Corporation/Rhodes Homes Rhodes Design and Development Corporation/Rhodes Homes Rhodes Design and Development
Page 50 of 80
Strata Systems LC PO Box 91358 Austin, TX 78709-1358
Cornorationfodes
21
agreement (Punehlist Manaee,)
73203-002IDOCS_LA:210795.1

.__.
DEBTOR
TYPE OF CONTRACT
PROJECTffEVELOPMENT
Homes
Rhodes Design and
$0.00
Development
Microsoft Licensing, GP 6100 Neil Road, Suite 210 Reno, NY 89511-1137
Corporationlodes
Homes
$0.00
Software license agreement/volume licensing program
Microsoft Corporation
Case 09-14814-lbr
One Microsoft Way

Rhodes Design and
Redmond, W A 98052
De Lage Landen Financial Services, Inc.
Loan Agreement
i 111 Old Eagle School Road
Development/Rhodes Homes
$0.00
Doc 931-10
Wayne, PA 19087
Symantec P.O. Box 202475 Dallas, TX 75320
Pirac1e 556 Confluence Avenue
$0.00
Murray, UT 84123
Software license Rhodes Design and Development/Rhodes Homes Software license Rhodes Design and agreement (Create~a~ Development CorporationlRodes check) Homes Declaration of Rhodes Ranch CC&Rs Limited
Rhodes Ranch
$0.00
PartnershiplRodes
Homes Rhodes Design and
Declaration of
Tuscany
$0.00
Developmentlodes CC&Rs
Homes
Entered 01/15/10 15:34:13 Page 51 of 80
73203.o2\DS _ LA:21079S. i
22
RHODES ARIZONA CONTRACTS TO BE ASSUMED AND ASSIGNED TO THE RHODES ENTITIES
CONTRACT COUNTER- I DEBTOR

, ,
PARTY NAi\1E & I

Rhodes Homes
TYPE OF CONTRACT
$0,00
PROJECTIDEVELOPMENT
SERVICE ADDRESS
Arizona, LLC
tIS Electric, Inc.
Case 09-14814-lbr
(UniSource Services) 2498 Airway Ave Kingman, AZ 86409

Rhodes Homes
Extension of power distribution line
Golden Valley Ranch, Mohave County, AZ
Slater Hanifan Group, Inc.
Golden Valley Ranch, Mohave

County, AZ
$0,00
5740 South Arville St. #216 Las Vel!as, NY

Provision of water
Arizona, LLC
Master Consulting and Professional Serviees AQreement
Utilities Inc.
Doc 931-10
Rhodes Homes Arizona, LLC

service
Rhodes Homes
Golden Valley Ranch, Mohave County, AZ Golden Valley Ranch, Mohave County, AZ
$0,00
2335 Sanders Rd Norhbrook, IL 60062-6 I 08 Arizona Corporation Commission Utilities Division 1200 West Washington Phoenix, AZ 85007-2996
Arizona, LLC
Approval for master plan
$0,00
Rhodes Homes
Proof of adequate
water supply
Arizona Department of Water Resources
Arizona, LLC

,
$0,00
3550 N. Central Ave.
Phoenix, AZ 85012 Arizona Department of

Water and sewer
Entered 01/15/10 15:34:13
Environmental Quality
master plan for Pravada
$0,00
Page 52 of 80
Phoenix Main Office 1110 W, Washington St. Phoenix, AZ 85007 County of Mohave Development Services Attn: Nicholas S. Hont, PE 3675 E. Andy Devine Ave Kingman, AZ 8640 i
23
Development agreement/specific zoning agreement
Golden Valley Raneh, Mohave County, AZ
$0,00
7320i-02\OOCS_LA:210795. I
CONTRACT COUNTER-
DEBTOR

Off-Site Improvement Agreement
TYPE OF CONTRACT
$0.00
PROJECT/DEVELOPMENT
Mohave County
Mohave Co, AZ - Golden Valley Ranch Phase I Grading #B0601258K
Case 09-14814-lbr
Development Services Artn: Nicholas S. Hoot, PE 3675 E. Andy Devine Ave Kio2:man, AZ 86401 Lexon Insurance Company Bond Safeguard Insurance Company 1919 S Highland Dr. Bldg. A Suite 300
Bond
Bond # 502208 I (Mohave AZ golden Valley Ranch Phase I Grading)
$0.00
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73203.002\DOCS_LA:21079S 1
24
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Exhibit H
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IN THE UNITED STATES BANKRUPTCY COURT DISTRICT OF NEVADA SOUTHERN DIVISION

In rc:
THE RHODES COMPANIES, LLC, aka "Rhodcs Homes," el 01.,

Debtors. I
Case No. 09~14814-LBR (Jointly Administered)

Chapter i i
CLASS A-lICLASS C~2 BALLOT FOR ACCEPTING OR REECTING PLAN OF REORGANIZATION

The First Lien Steering Committce fied its Second Amended Modified Plan of Reorgani7.3tion Pursuant 10 Chapter 11 of the Bankrptcy Code for Thc Rhodes Companies, LLC, et 01. (the "Plan") in the abovereferenced cascs on November 23, 2009. The Bankrptcy Court has approved the Disclosure Statement
for the Plan (the "DisclQSure Statement"), which provides information to assist you in deciding how to
vote your Ballot. Bankuptcy Court approval of the Disclosure Statement does not indicate approval of
the Plan by the Bankptcy Court. If you do not havc a Disclosure Statement, you may obtain a copy on
the web by visiting www.omnimgt.com/rhodesorbycallngOmni Management at (866) 989-6144.

You should I"eview the Disclosul"e Statement and the Plan befol"e you vole. You may wish to seek legal advice concerning the Plan and your classification and treatment under the Plan. Your First
Lien Lender Secured Claim has been placed in Class A-I under the Plan. Your First Lien Lender
Deficiency Claim has been placed in Clas.o; C~2 under the Plan.
If your Ballot is not received by 4:00 p.m. (prevailing Pacifc Time) on or before Janua.. 4, 2010, and such deadline is not extended, your vote wil not count as either an acceptance or rejection of Plan. the
If thc Plan is confirmed by the Bankruptcy Court, it wil be binding on you whether or not you
votc.
The Balloi is neiiher a Proof of Cloim form, nor an admission by ihe First Lien Steering Commirtee or ihe your Claims. The Plan can be confinned by the Bankrptcy Court if it is accepted by the Holders of at least two-thirds in dollar amount and more than one-half in number of Claims that actually vote in each lmpaired Class of Claims voting on the Plan. If
above-captioned Debtors ofihe nalure, validity or amoum of
i The Debtors in these cases, along with their cae numbers are: Heritage Land Company, LLC (Case No. 0914778); The Rhodes Companies, LLC (Case No. 09-14814); Tribes Holding.~, LLC (Case No. 09-14817); Apache Framing, LLC (Case No. 09-14818); Geronimo Plumbing LLC (Case No. 09-14820); Gung-Ho Concrete LLC (Case
No. 09-14822); Bravo, Inc. (Case No. 09-14825); Elkhorn Partners, A Nevada Limited Partership (Case No. 09-
14828); Six Feathers Holdings, LLC (Case No. 09-14833); Elkhorn Investments, Inc. (Case No. 09-14837); Jarupa, LLC (Case No. 09-14839); Rhodes Realty, Inc. (Case No. 09-14841); C & J Holdings, Inc. (Case No. 09-14843); Rhodcs Ranch General Pnrtnership (Case No. 09-14844); Rhodes Dcsign and Development Corpration (Case No. 09-14846); Jlarccl20 LLC (Case No. 09-14848); Tuscany Acquisitions IV LLC (Case No. 09-14849); Tuscany Acquisitions II LLC (Cas No. 09-14850); Tuscany Acquisiiions 11, LLC (ellSe No. 09-14852); Tusemy
Acquisiiions. LLC (Casc No. 09~14853); Rhodes Ranch Golf
Country Club, LLC (Cise No. 09-14854); Overflow,
LP (Case No. 09-14856); Wallboard, LP (Case No. 09-14858); Jllckknirc, LP (Case No. 09-14860); Batcavc, LP (Case No. 09-14861); Chalkline, I..P (Case No. 09-14862); Glynda, L1' (Case No. 09-14865); Tick, LP (Cnsc No. 09-14866); Rhodes Arizona Properties, LLC (Casc No. 09-14868); Rhodes Homes Arizona, LLC (Case No. 09~ 14882); Tusc:my GolrCountr)' Club. LLe (Case No. 09-14884): and Pinnacle Grading, LLC (Case No. 09-14887).
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the requisite acceptances are not obtained, the Bankruptcy Court may nevertheless confinn the Plan if it
finds that the Plan accords fair and equitable treatment to the Class rejetting it and satisfies the
requirements of section i i
29(b) of the Bankruptcy Code. To have your vote count, you must complete,
sign and return this Ballot.
The undersigned, the Holder of a Clas A-I Claim against one of the above captioned Debtors in the unpaid amount ofS
(Check Only One Box)
I ACCEPTS THE PLAN
I RECTS THE PLAN
o o
The undersigned, the Holder of a Class C-2 Claim against one of the above captioned Debtors in the unpaid amount of$
I ACCEPTS THE PLAN

If you voted above (regardless of
I REJCTS THE PLAN
whether you voted 10 accept or reject the Plan), you may cheek
the Plan. IF YOU VOTED ABOVE EITHER TO ACCEPT OR REJCT THE PLAN AN YOU ELECT TO OPT IN TO THE RELEASE PROVISIONS BY CHECKING THE BOX BELOW, YOU WILL BE DEEMED TO HAVE CONCLUSIVLY, ABSOLUTELY, UNCONDITIONALLY, IRRVOCABLY AND FOREVER RELEASED THE FIRST LIEN LENDERS (AS DEFIND IN THE PLAN) THAT ALSO OPTD IN TO TH RELEASE PROVISIONS IN ARTICLE V111.F OF THE PLAN FROM AN AND ALL CAUSES OF ACTION (AS DEFINED IN THE PLAN) SOLELY TO THE EXTENT PROVIED FOR IN THE PLAN AND YOU WILL RECEIVE A CORRSPONDING RELEASE FROM THE OTHER FIRST LIEN LENDERS THAT OPTED IN TO THE RELEASE PROVISIONS OF ARTICLE VII.F OF THE PLAN.
the box below to opt in to the release provisions contained in Article VII.F of
o Opt In to the release provisions.
DATED:
-,20_
Name of Creditor:
By:
Print Name of
Signatory:
Title:
Address:
Telephone:
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PLEASE COMPLETE, SIGN AND DATE THE BALLOT AND RETURN IT PROMPTLY TO:
If
By u.s. Mail, Hand Delivery, Or
Overnight Delivery:
The Rhodes Companies, LLC Omni Management Group

Ann: Brian Osborne
16161 Ventura Blvd.
Suite C, PMB 477 Encino, CA 91436

If By
Email:
Nova~omnmgt.com
(818) 783-2737
If
By Fax:
IN ORDER TO HAVE YOUR VOTE COUNT, THIS BALLOT MUST BE RECEIVED BY 4:00 P.M. (PREVAILING PACIFIC TIME) ON JANUARY 4, 2010.
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INSTRUCTIONS FOR COMPLETING THIS BALLOT

1. Subject to entry ofihe Confinnaiion Order, to the extent a Holder of
one or more First Lien Lender Claims also holds one or more Second L.ien Lender Claims, if such Holder votes in favor ofihc Plan
on account of its First Lien Lender Claim(s), the Holder shall be deemed to vote in favor of
the Plan
on account of iis Seeond Lien Lender Claim(s) regardless of whether the Holder actually voles its Second Lien Lender Claim(s) in favor ofthe Plan.
2. The First Lien Steering Committee is soliciting the votes of Holders of Claims with respect to the which is being transmitted to you along with Plan referred to in the Disclosure Statement (a copy of
the Ballot). All caplalized tenns used in the Ballot or voting instructions but not otherwise defined
therein shall have the meaning ascribed to them in the Plan, the Disclosure Statement or the
Solicitation Procedures Order, a copy of which also accompanies the Ballot.

3. The Bankruptcy Court may confinn the Plan and thereby bind you if it is accepted by the Holders of
two-thirds in amount and more than one-half
in number of Claims in each Impaired Clas voting on
the Plan. Please review the Disclosur Statement for more infonnation.
4_ To ensure that your vote is counted, you must: (a) complete the Ballot; (b) indicate your decision
either 10 accept or reject the Plan in the boxes provided in the Ballot; and (c) sign and return the Ballot to the postal address, email address or fax numbcr set forth in the Ballot. The Voting Deadline
is 4;00 p.m. (prevailing Pacifc Time) on January 4, 20iO.
5. If a Ballot is received after ihe Voting Dcadline, it wil not be counted unless the First Lien Steering
Committee detennines othen\'isc. The method of delivery of Ballots to the Claims and Solicitation Agent is at the election and risk of each Holder of a Claim. Except as otherwise provided herein, such delivery wil be deemed made only when the Claims and Solicitation Agent actually receives the executed Ballot. Instead of effecting delivery by mail, emai! or fax, it is recommended, though not required, that Holders use an ovemight or hand delivery service. In all cases, Holders should allow
suffcient time to asure timely delivery. No Ballot should be sent to the Debtors, the Debtors'
financial or legal advisors, the First Lien Steering Committee or the First Lien Steering Committee's financial or legal advisors.
6. If multiple Ballots are received from an individual Holder of a Claim with respet to the same Claim
prior to the Voting Deadline, the las Ballot timely received wil supersede and revoke any ealier
received Ballots.
7. lbe Ballot is not a letter of transmittal and may not be used for any purpose other than to vote to
accept or reject the Plan. Accordingly, at this time, Holders of Claims should not surrender
certificates or instruments representing or evidencing their Claims, and neither the First Lien Steering
Committee, the Debtors, nor the Claims and Solicitation Agent wil accept delivery of any such
certificates or instruments surrendered together with a Ballot.
8. This Ballot does not constitute, and shaH not be deemed to be: (a) a Proof of Claim; or (b) an
assertion or admission of a Claim.
9. Please be sure to sign and date your Ballot. If you are completing the Ballot on behalf of
an Entity,
indicate your relationship with that Entity and the capacity in which you are signing. In addition, please provide your name and mailng address if it is different from that set forth on the attached mailing label or ifno such mailing label is attached to the 8allot.
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10, If you hold Claims in more than one Class under the Plan or in multiple accounts, you may receive
more than one Ballot coded for each different Class or account. Each Ballot votes only your Claims
indicated on that Ballot. Please complete and return each Ballot you received.
i I. You must vote all of your Claims within a particular Plan Class either to accept or reject the Plan and may not split your vote.
12. Any Ballot that is properly completed and executed thai fails to indicate accptance or rejection ofthe
Plan or that indicates both an acceptance and a rejection of
the Plan will not be counted.
13. The following Ballots shall not be counted in determining the acceptance or rejection of the Plan;
(a) any Ballot thai is illegible or contains insuffcient information to perit the identification of the Holder or a Claim; (b) any Ballot cast by an Entity that does not hold a Claim in a Clas thai is entitled to vote on the Plan; (c) any Ballot cast for a Claim scheduled as unliquidated, contingent or disputed for which no Proof of Claim was timcly Filed; (d) any unsigned Ballot; (e) any Ballot not marked to accept or reject the Plan, or marked both to accept and reject the Plan; and (f) any Ballot submitted by any part not entitled to \'ote puruant to the Solicitation Procedures.
14. If
you believe you have received the wrong Ballot, please contact the Claims and Solicitation Agent immediately.
PLEASE MAIL
YOUR BALLOT PROMPLY!
IF YOU HAVE ANY QUESTIONS REGARDING THIS BALLOT OR THE VOTING PROCEDURES, PLEASE CALL THE CLAIMS AND SOLICITATION AGENT AT (866) 989-6144 OR CONTACT BRIAN OSBORNE AT BOSBORNEOMNIMGT.COM.
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Exhibit I
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In re:
Case
No. 09-14814-LBR
THE RHODES COMPANIES, LLC, aka "Rhodes Homes," et al.,

Debtors. i
(Jointly Administered)
Chapter II
CLASS A-2/C-3 BALLOT FOR ACCEPTING OR REJECTING PLAN OF REORGANIZA nON

The Firsl Lien Steering Committee fied its Second Amended Modified Plan of to Chapter 11 of
Reorganization Pursuant
the Bankrptcy Code for The Rhodes Companies, LLC, el al. (the "Plan") in the above-
referenced caes on November 23, 2009. The Bankruptcy Court has approved the DisCiosur Statement
for thc Plan (the "Disclosure Statement"), which provides information to assist you in deciding how to vote your Ballot. Bankruptcy Court approval of the Disclosur Statement does not indicate approval of
the Plan by the Bankrptcy Court. If you do not have a Disclosure Statement, you may obtain a copy on
the web by visiting www.omnimgt.comlrhodesorby callng Omni Managemenl at (866) 989-6144.
You should review the Disclosure Statement and the Plan before you vote. You may wish to seek legal advice concerning the Plan and your classifcation and treatment under the Plan. Your Second Lien Lender Secured Claim has been placed in Clas A-2 under the Plan. Your Second Lien Lender Deficiency Claim bas been placed in Class C-3 under the Plan.
If your Ballot is not received by 4:00 p.m. (prevailng Pacific Time) on or before January 4, 2010, and such deadline is not extended, your vote wil not count as either an acceptance or rejection or the Plan.
If the Plan is confirmed by the Bankruptcy Court, it wil be binding on you whether or not you
vote.
The Ballot is neither a Proof of
Claim form, nor an admission by the Firsl Lien Sieering Committee or the
ahove-captioned Deblors of the nature, validity or amount af your Claims. The Plan can be confirmed by the Bankrptcy Court if it is accepted by the Holders of at least two-thirds in dollar amount and more than one-half in number of Claims that actually vote in each Impaired Clas of Claims voting on the Plan. If
the requisite acceptaces are not obtained, the Bankruptcy Court may nevertheless confirm the Plan if it
1 Thc Debtors in these cases, along wiih their easc numbi:rs are: Hcritage Land Company, LLC (Case No. 0914778); The Rhodes Companies. LLC (Case No. 09-14814); Tribes Holdings, LLC (Cas No. 09~14817); Apache Framing, LLC (Casc No. 09-14818); Geronimo Plumbing LLC (Case No. 09-t4820); Gung-Ho Concrete LLC (Case
No. 09-14822); Bra\'o, Inc. (Case No. 09-14825); Elkhorn Parters, A Nevada Limited Partnerhip (Case No. 09-
14828); Six Feathers Holdings, LLC (Case No. 09-14833); Elkhorn Investments, Inc. (Case No. 09-14837); Jarupa, LtC (Case No. 09-14839); Rhodes Realiy, Inc. (Case No. 09-14841); C & J Holdings, Inc. (Case No. 09-14843);
Rhodes Ranch General Partership tCase No. 09-14844); Rhodes Design and Development Corporation (Case No.
09-14846); Parcel
20 LLC (Case No. 09-14848); Tuscany Acquisitions IV LLC (Case No. 09-14849); Tuscny Acquisitions II LLC (Case No. 09-14850); Tuscany Acquisitions II, LLC (Case No. 09-14852); Tuscany
Acquisitions, LLC (Case No. 09-14853); Rhodes Ranch Golf
Country Club, LtC (Cas No. 09-14854); Overflow,
Ll' (Case No. 09-14856); Wallboard, LP (Ca.~c No. 09-14858); Jackknife, LP (Case No. 09-14860); Batca\'e, LP
(Case No. 09-14861); Chalkline, LP (Ca.~e No. 09-14862); Glynda, L1) (Cas No. 09-14865); Tick, LP (Case No.
09-14866); Rhodi:s Arizona Propcrties. LtC (Case No. 09-14868); Rhodes Homes Arizona, LLC (Case No. 0914882); Tuscany GolfCuntry Club. LLC (Case No. 09-14884); and Pinnaclc Grading, LLC (Case No. 09-14887).
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finds that the Plan accords fair and equitable treatment to the Class rejecting it and satisfies the
requirements of section 1129(b) of
the Bankruptcy Code. To have your vote count, you must complete,
The undersigned, the Holder of a Class A-2 Claim against one of the above captioned Debtors in the
unpaid amount of $
,
i ACCEPTS THE PLAN
0 0
I REJECTS THE PLAN
0 0
The undersigned, the Holder of a Clas C-3 Claim against one of the above captioned Debtors in the unpaid amount of$ ,
i ACCEPTS THE PLAN

DATED:
I REECTS THE PLAN

Name of Creditor:
By:
Print Name of Signatory:
___,20_
Title:
Address:
Telephone:
By U.S. Mail, Hand Delivery, Or
If
Ovemight Delivery:
The Rhodes Companies, LLC Omni Management Group Attn: Brian Osborne
16161 Ventura Blvd.
Suite C. PMB 477 Encino, CA 91436

fBy Email:
If
Nova~omnimgt.com
(818)783-2737
By Fax:
IN ORDER TO HAVE YOUR VOTE COUNT, THIS BALLOT MUST BE RECEIVED BY 4:00 P.M. (PREVAILING PACIFIC TIME) ON JANUARY 4, 2010.
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i. The First Lien Steering Committee is soliciting the votes of Plan referred 10 in the Disclosure Statement (a copy of
Holders aCClaims with respet to the
which is being transmitted to you along with the Balloi). All capitalized teims used in the Ballot or voting instructions but not otherwise defined therein shall have the meaning asribed to them in the Plan, the Disclosure Statement or the Solicitation Procedures Order, a copy of which also accompanies the Ballot
2. The Bankruptcy Court may confirm the Plan and thereby bind you if it is aecepted by the Holders of
m'o-thirds in amount and more than one-half in number of Claims in each Impaired Clao:s voting on
the Plan. Please review the Disclosure Statement for more information.
3. To ensure that your vote is counted, you must: (a) complete the Ballot; (b) indicate your decision either to accept or reject the Plan in the boxes provided in the Ballot; and (c) sign and retum the Ballolto the postal address, email address or fax number set forth in the Ballot. The Voting Deadline is 4:00 p.m. (prevailing Pacifc Time) on January 4, 2010.
4. If a Ballot is received after the Voting Deadline, it wil not be counted unless the First ,Lien Steering
Committee determines otherwise. The method of delivery of Ballots to the Claims and Solicitation Agent is at the election and risk of each Holder of a Claim. Except as otherwse provided herein, such delivery wil be deemed made only when the Claims and Solicitation Agent actually receives the executed Ballot. Instead of effecting delivery by mail, email or fax, it is recommended, though not required, that Holders use an overnight or hand delivery service. In all cases, Holders should allow
sufficient time to asure timely delivery. No Ballot should be sent to the Debtors, the Debtors'
5. If multiple Ballots are received from an individual Holder ofa Claim with respect to the same Claim
prior to the Voting Deadline, the last Ballot timely received wil supersede and revoke any earlier
received Ballots.
6. The Ballot is not a leiter of transmittal and may not be used for any purpose other than to vote to
accept or rejeei the Plan. Accordingly, at this time, Holders of Claims should not surrender
Committee, the Debtors, nor the Claims and Solicitation Agent wil accept delivery of any such
7. This Ballot doc not constitute, and shall not be deemed to be: (a) a Proof of Claim; or (b) an
8. Please be sure to sign and date your Ballot. If you arc completing the Ballot on behalf of an Entity,
indicate your relationship with that Entity and the capacity in which you arc signing. In addition, please provide your name and mailing address if it is different from that set forth on the attached mailng label or if no such mailng label is attached to the Ballot.
9. If you hold Claims in more than one Class under the Plan or in multiple accounts, you may receive
more than one Ballot coded for each different Class or account. Each Ballot votes only your Claims indicated on that Ballot. Please complete and return each Ballot you received.
10. You must vote all of your Claims within a particular
Plan Class either 10 accept or rejecllhe Plan and
may not split your vote.
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i i. Any Ballot that is properly completed and executed that fails to indicate acceptace or rejection of Plan or that indicates both an acceptance and a rejection of
the
the Plan wil not be counted.

acceptance or rejection or
12. The following Ballots shall not be counted in determining the.
the Plan:
(a) any Ballot that is ilegible or contains insuffcient infonnation to permit the identification or the
Holder of a Claim; (b) any BallOl cast by an Emity that does not hold a Claim in a Class that is entitled to vote on the Plan; (e) any Ballot cast for a Claim scheduled as unliquidated, contingent or disputed for which no Proof of Claim was timely Filed; (d) any unsigned Ballot; (e) any Ballot not marked to accept or reject the Plan, or marked both to accept and reject the Plan; and (f) any Ballot
submitted by any part nol entitled to vote pursuant to the Solicitation Procedures.
i 3. If you believe you have received the wrong Ballot, please contact the Claims and Solicitation Agent immediately.
PLEASE MAL
YOUR BALLOT PROMPLY!
IF YOU HAVE ANY QUESTIONS REGARDING THIS BALLOT OR THE VOTING PROCEDURES, PLEASE CALL TH CLAIMS AN SOLICITATION AGENT AT (866) 989-6144 OR CONTACT BRIAN OSBORNE AT BOSBORN(iOMNIMGT.COM.
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Exhibit J
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Inre:
THE RHODES COMPANIES, LLC, aka "Rhodes Homes," el 01.,
Debtors. J
Case No. 09-14814-LBR (Jointly Administered)
Chapter II
CLASS C-i BALLOT FOR ACCEPTING OR REECfINC PLAN OF REORGANIZATION

The First Lien Steering Committee fied its Second Amended Modified Plan of Reorganization Pursuant to chapter II of the Bankruptcy Code for The Rhodes Companies, LLC, et of. (the "Plan") in the abovereferenced cases on November 23, 2009. The Bankrptcy Court has approved the Disclosure Statement for the Plan (the "Disclosure Statement"), which provides infonnation to assist you in deciding how to vote your Ballot. Bankptcy Court approval of the Disclosure Statement does not indicate approval of
the Plan by the Bankrptcy Court. If you do not have a Disclosure Statement, you may obtain a copy on
the web by visiting W\,,'w.omnimgt.com/rhodes or by callng Omni Management at (866) 989-6144.
You should review the Disclosure Statement and the Plan before you vote. You may wish to seek legal adviee concerning the Plan and your classifcation and treatment under the Plan. Your Claim you hold Claims in more than one Class, you wil has been placed in Class C-I under the Plan. If reeeive a Ballot for each Class in which you are entitled to vote.
If youI' Ballot is not received by 4:00 p.m. (prevailing Pacific Time) on or before January 4, 2010, and such deadline is not extended. youI' vote wil not counl as either an acceptance or rejection or
the Plan.
If the Plan is confirmed by the Bankruptcy Court, it wil be binding on you whether or not you
vote.
The Balloi is neiiher a Proof of Claim
form, nor an odmissian by ihe Firs' Lien Steering Commiltee or ihe
obove-caplioned Debtors of Jie nature, vafidiry or amounl of your Claims. The Plan can be confinned by
the Bankptcy Court if ii is accepled by the Holders of aileasl two-thirds in dollar amount and more than one-half in number of Claims that actually vole in each Impaired Class of Claims voting on the Plan. If
case numbers are; Heritage Lan Company, LLC (Case No. 0914778); The Rhodc~ Companies, LLC (Case No. 09-14814); Tribes Holdings, LLC(Casc No. 09-14817); Apaehe framing, LLC (Case No. 09-14818); Geronimo Plumbing LLC (Cas No. 09-14820); Gung-Ho Concrete LtC (Case No. 09.14822); Bravo, Inc. (Case No. 09-14825); Elkhorn Partners, A Nevada Limited Partncrship (Case No. 09Inc. (Case No. 09-14837); Jarupa, 14828); Six Feathers Holdings, LLC (Case No. 09-14833); Elkhorn Investments, LLC (Case No. 09-14839); Rhodes Realty, Inc. (Case No. U9-14841); C & J Holdings, Inc. (Case No. 09-14843); Rhodes Ranch Gencral Partnership (Cas No. 09-14844); Rhodes Design and Development Corpration (Case No. 20 LLC (Case No. 09-14848); Tuscany Acquisitions iV LLC (Case No. 09-14849); Tuscany 09-14846); Parcel Acquisitions ill LLC (Case No. 09-14850); Tuscany Acquisitions 11, LLC (Case No. 09-14852); Tuscany Country Club, LLC (Case No. 09-14854); Overflow, Acquisitions, LLC (Case No. 09-14853); Rhodcs Raneh Golf
i The Debtors in thcse cas, along with their
LP (Case No. 09-14856); Wallboard, LP (Case No. 09-14858); Jackknife, LP (Cas No. 09.14860); Bateave, LP
(Case No. 09-1486 i); Chalkline, LP (Ciise No. 09- 14862); Glynda, LP (Case No. 09-14865); Tick, LP (Case No.
09-14866): Rhodes Ari7:na Propenies, LLC (Case No. 09-14868); Rhodes Homes Arizona, LLC (Casc No. 09-
14882); Tuscany GolfCoimir Club. LLC (Case No. 09-14884); iind Pinnacle Grading, LLC (Case No. 09-14887).
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the requisite acceptances are not obtained, the Bankruptcy Court may nevertheless confirm the Plan if it
finds that the Plan accords fair and equitable treatment to the Class rejecting it and satisfies the
requirements of section 1 i
29(b) ofthe Bankruptcy Code. To have your vote count, you must complete,
The undersigned, the Holder of a Class C-L Claim against one of the above captioned Debtors in the unpaid amount of$ ,
I ACCEPTS THE PLAN

DATED:
I RECTS THE PLAN

Name of Creditor:
By:
,20_
Print Name of Signatory:

Title:
Address:
Telephone:
TfBy U.S. Mail, Hand Delivery, Or

Overnight Delivery:
The Rhodes Companies, LLC Omni Management Group Attn: Brian Osborne
16161 Ventura Blvd_
Suite C, PMB 477 Encino, CA 91436

Nova~omnimgt.com
(818) 783-2737
If
By
Email:
fBy Fax:
IN ORDER TO HAVE YOUR VOTE COUNT. THIS BALLOT MUST BE RECEIVED BY 4:00 P.M. (PREVAILING PACIFIC TIME) ON JANUARY 4, 2010.
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i. The First Lien Steering Committee is soliciting the votes of Plan referred to in the Disclosure Statement (a copy of the Ballot). All capitalized terms used in the Ballot or Holders of Claims with respeet to the which is being transmitted to you along with voting instructions but not otherwise defined
therein shall have the meaning asribed 10 them in the Plan, the Disclosure Statement or the
Solicitation Procedures Order, a copy of
which also accompanies the Ballot.
2. The Bankruptcy Court may confirm the Plan and thereby bind you if it is accepted by the Holders of
two-thirds in amount and more than one.half in number or Claims in each Impaired Class voting on
the Plan. Please review the Disclosur Statement for more information.
3. To ensure that your vote is counted, you must: (a) complete the Ballot; (b) indicate your decision either to accept or reject the Plan in the boxes provided in the Ballot; and (c) sign and retu the Ballot to the postal address, effail address or fax number set forth in the Ballot. The Voting Deadline is 4:00 p.m. (prevailing Pacifc Time) on January 4, 2010,
4. If a Ballot is received after tle Voting Deadline, it wil not be counted unless the First Lien Steering
Committee detennines otherwise. The method of delivery of Ballots to the Claims and Solicitation Agent is at the election and risk or each Holder or a Claim. Except as otherwse provided herein, such deliver)' will be deemed made only when the Claims and Solicitation Agent actually receives the executed Ballot. Instead of effecting delivery by mail, email or fax, it is recommended, though not required, that Holders use an overnight or hand delivery servce. In all cases, Holders should allow
suffcient time to assure timely delivery. No Ballot should be sent to the Debtors. the Debtors'
5. If multiple Ballots are received from an individual Holder of a Claim with respect to the same Claim
prior to the Voting Deadline, the last Ballot timely received wil supersede and revoke any earlier
received Ballots.
6. The Ballot is not a letter of trasmittal and may not be used for any purpose other than to vote to
accept or rejcct the Plan. Accordingly, at (his lime, Holders of Claims should not surrender
Committee, the Debtors, nor the Claims and Solicitation Agent will accept delivery of any sueh
7. This Ballo! does not constitute, and shall not be deemed to be: (a) a Proof of Claim; or (b) an

8. Please be sure to sign and date your Ballot. If
you are completing the Ballot on behalfofan Entity, indicate your relationship with that Entity and the capacity in which you are signing. In addition, please provide your name and mailng address if it is different from that set forth on the attached
mailing label or if
no such mailing label is attached to the Ballot.
9. If you hold Claims in more than one Class under the Plan or in multple accounts, you may receive
more than one Ballot coded for each different Class or account. Each Ballot votes only your Claims indicated on that Ballot. Please complete and return each Ballot you received.
10. You must vote all of your Claims within a particular Plan Class either to accept or reject the Plan and may not split your vote.
3
Case 09-14814-lbr
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Entered 01/15/10 15:34:13
Page 69 of 80
II. Any Ballot that is properly completed and executed that fails to indicate acceptance or rejection of
the
Plan or that indicates both an acceptance and a rejection of the Plan wil not be counted.
12. The following Ballots shall not be counted in detennining the acceptance or rejection of the Plan:
(a) any Ballot that is illegible or contains insuffcient information to permit the identification of the
Holder of a Claim; (b) any Ballot cast by an Entity that docs not hold a Claim in a Class that is entitled to vote on the Plan; (c) any Ballot cast for a Claim scheduled as unliquidated, contingent or disputed for which no Proof of Claim was timely Filed; (d) any unsigned Ballot; (e) any Ballot not marked to accept or reject the Plan. or marked both to accept and reject the Plan; and (t) any Ballot submittcd by any party not entitled to vote pursuant 10 the Solicitation Procedures.
13. If you believe you have received the wrong Ballot, please contact the Claims and Solicitation Agent immediately.
PLEASE MAIL
YOUR BALLOT PROMPL YL
IF YOU HAVE AN QUESTIONS REGARING THIS BALLOT OR THE VOTING PROCEDURES, PLEASE CALL THE CLAIMS AND SOLICITATION AGENT AT (866) 989-6144 OR CONTACT BRIAN OSBORNE AT BOSBORNr.0MNIMGT.COM.
Case 09-14814-lbr
Doc 931-10
Entered 01/15/10 15:34:13
Page 70 of 80
Exhibit K
Case 09-14814-lbr
The Rhodes Companies,LLC. U.S. Mail
Doc 931-10
Entered 01/15/10 15:34:13
Page 71 of 80
12f412G09
Served
Clai;C.1Sallol
A AFFORDABLE STRIPING & SEAtiNG I.LC
classC.18:iIl01
A COMPANY. INC ATTN: CRYSTAL M. HIEBERT
ClassC.1Ballot
ABC LOCKSMITH CORP,
AnN; SHQNDA DECKER 57!1 S SANDHilL RD. SUITE F

LAS VEGflS. NV 89120
3911E.SUNSETROIID
3975SEAGLESONRO BOISE. 1083705
" VEGA./# 89120 LA
ClassC-1Ballol
ACCOUNTANTS, INC.
P.O. BOX
ClassC-1BolIOI
ACCURATE BUILDING MAIf'ENANCE LLC ATTN; TAMMY WIGHT J062 SHERIDAN ST
600
ClassC_IBallol ACUSHNET COiiANY ATTN: ELL MATINS

P.O.
SAN FRACISCO. CA.94160
BOX96
LASVEGAS,tN89102
FAIRHAVEN, MA 02719
CiassA1\C2Biilloi ADAM ZAUSPiR CREDIT SUISSE

ELEVEN fo'!DISON AVENUE. 10Tli FLOOR NEW YORK. NEW YORK 10010
ClassC.1B:ilol
AIR METHODS CORPORATION AnN: MARK R. KEENE 621 E. CARNEGIE DRIVE SUITE 210
ClaC.1Ballot
AlR QUAlITY SERvlS OF
NEVADA
SWANSQrLAW FIRM,LLC 6787 W. TROPICANAAVE. SUITE 11241
SANBERNARDINO,CA9240.3536
LA VEGAS, tN 89103
C1assC.1allol Al & BETH CARDAMNE

~689 LOMAS SIINTII fE STREET
LA VECAS. NV 89147
ClassC-1BalIol AU AMRICAN CARPET CARE

2756 NORTH GREEN
CI:isC.1Ballol
AMERICAN ASPHALT &. GRADING CO.
VALLEY PKWY 11108
HENDERSON,NV89014
GOLDFIElOST. N. LA veGAS, NV 89032

3624
ClassC.1BaUol
AMERICAN EXRESS TRAVEL RELATED SERVICES co
CORP
C1assC.1Baliot AMERICAN INTi.SPECl/TY LINES INSURACE CO ET

ATTN; MICHELLE A. LEVITT AUTHORIZEO REP COMMERCLALINSURANCE K COLLECTIONS
ClassC.1Ballil
AMERICA SOILS ENGINEERING C/o Pe2LLO ROBINSON
6750 VIA AUSTI PKWY STE 170
CARD
AND LEE LLP PA
CI8ECK(T
POB3001
MALVERN
19355-G701
175 WATER STREET. 18TH FLOO NEWYORK,NY10038
LAVEGAS,NV89119
ClassC.1Ballol
ANDRAE'S CLEANING co. 798ASTREET
LA VEGAS. NV 89106
ClassA2IC3BalIol
ANTARES
MELAIE MAEGNI
ANTARES NORWAlK. CAPITAL CT
ClassC-181101 APPLE EXERMlNATING INC 2756 N GREEN VALLEY PKWY
CORP
201 MERRITT 7. PO BOX 5201
STE.418 HENDERSON. NV 80014
0056-5201
ClassC-1Ekllol
APPLE MA.SONRY. INC.
ClassC-1BolIOI
AR IRON
ClassC-1Balll
ARIZONA LAD aUESTLLC
ATTN; JOHN GALL 8783 BRINDISI PARK AVE LA VEGAS, NV 89148
LLC
ATTN:SliARONK.APPLE
4547 N. RANCHO OR. #0
LAVEGAS.NV89130
Al IN: VID:IE SANTO 142SATHOLAVE. HENDERSON,NV800111
ClassC.1Ballol
ASHWORTH FILE 51141
LOS ANGELES, CA 90074.1
ClassC-1Ballol
ATRIUM ATTN:
DOORS & WINDOWS OF ARIZONA CHRISTINE MCKENZIE
ClassA2\C3BalIol ATTENTUS MAAGEMENr YVETTHAYNES
141
ATRIUMCOt5ANIES.INC
3890 WEST NORTHWEST HWYIlSOO DAlLAS. TX 7S22Q
ATTEf'USCDOI,LTO
C/ WE BANK OF NEW YORK 601 TRAVIS STREET. 16TH FLOO
HOUSTON. TX nOO2
AVENUE
Ballol AOVSORS KRISTEN REGA

Class 2IC3 AVENUE CLO FUND
ClassA2\allol
AVENUE ADVISORS
LTO
ClassAlC3Ballol
AVEUE ADVISORS
KRISTENREGA
AVENUE CLO III LTD
535 MADISON AVE., 15TH FLOOR
NEWYORK,NY10022
KRISTENREGA AVENUE CLO II LIMIED 535MADISON AVE., 15TH fLOOR NE.w VORK.NY 10022
53 MAOISON AVE.. 15TH FLOO NEW YORK. NY 10022
Page1of10
Case 09-14814-lbr
The Rhodes Companies, LLC - U.S. Mail
ClassC.1Ballol
8 a. F CONSTRUCTION INC.
2735 SIMMONS
Doc 931-10
Entered 01/15/10 15:34:13
Page 72 of 80
Sorvd1214/20ll9
Clai;C.1B:iIlOI
ST.1t10C
Classc;lBillkl
BA1RO, WILlIS & GREER. LLP
N LAS VEGAS. NV 503"
B.O,TRIM 6270 KIMIlERLY AVE. SUITE B LA VEGAS. NV 81122-7655
C100ARYLM.WltLlA
622SN. 24TH STREET. SUITE
12S
PHOENIX,AZ65016
Clar.C-18allol
BAJR'S CARPET VALLEY. C 7465 WEST SUNSET ROAD SUITE 1200
Cta5sC.18alfol
BANCROFT. SUSA & GALOWAY
4713 E. CAMP LOWELL DRiVE
ClassAZC3Ballol
BANK OF NEW YORK
PAULCAACCIO
TUCSON.A7.aS712
OWSCtOlLTO
CLO BAK OF NEW YORK MELLON
101 BARClAY NEW YORK,NY
LAVEGAS,NV8911J
STREET 102a6
CI:iS
A2\C3
Bolloi
CbssA28aUol
BlACKROCK FINACIA MGMT
LOAN PRODUCTS MAGNETITE V CLO LTD
ClassC-1Balll
BOWMAN & BROOK,LLP 2001 N CENTRAl AVE 111600
PHOENIX AZ
BlACKROCK FINANCIAL MGMr LOAN PRODUCTS
8lACKROCKSRINCSER1V
C/O BlACKROC;( FINACIA MANAGEMENT 40 EAST 52NDSTREET NE YORK. NY 10022
8512
C/ BlACKROCK FINANCIA MAGEMENT

NEWYORK,t-
10022
Cli;C-1Ballot
BRAVO UNDERGROUND, INC. 1183 CENTER POINT ORIVE
CI:isC-1Ilallol
BROADBENT & ASSOCIATES.
ClassC.1Ballol
INC.
CABINET WEST DISTRIBUTORS
ATIN:JONBELL
8 WEST PACIFIC AVENUE
ATiN: tARY NEWON

150 CASIA WAY SUITE 100 HENDERSON. NV 89014
HENDERSON,NV89074
HENDERSON, NI B901S
ClassC.1Balfol
CABINETEC,INC
CIaC-1Ballol
CABINETEC.INC ATIN: SHERI FOREMAN 2711 EAST CRAIG RD.IIA N LA VEGAS. NV 89ll3ll
Clar.C-1Ballol ClINETEC.INC
ATIN: SHERI FOREMA
2711 EA CRAG
ATTN,SH(r.FOREMAN 27t1EASTCRAIGRD,#A
RO, rtA
NLAVEGAS,NVS903
NlAVEGAS,NVII!130
CI;issC-1B:illol
CAB1NETEC.INC. ATTN: TRACY L GOlDSACK 2711 EAT CRAIG RO, itA NORTH lAS VEGAS, NV 89030
CIaC-1Ballol
CALlAWAY GOLF COMPANY
AlTN: DIANA SCHELIN 2100 RUTHERFQRO ROAD
CiassAZC3Balli CAPAlSOURCE
ALEXADER M. CHAVEZ DMD SPECIA SITUATIONS FUNDING C/ CAPITALSOURCE TRS LLC 444$ WILlARD AVE 12TH FLOOR
CHEV
CARtSBAO. CA 920
CHASE, MD 2081$
CI:iSSA2\CB;;IO! CARLYL
LlCHMf,N CARLYLE LOAN INVESTtNT LTD CLO BAK OF NEW YORK MELLON
KARl
Clai;C.1Ballol
CATERPILlAR FINANCIA SERVICF.S CORPORATION CLO SNELL & WILIJR L.t.P. ATIN: ROBERT R. KINAS 3983 HOWARD HUGHES PARKWAY, SUITE 1100
LA VEGAS. NV 99169
ClassC-1Ballol
CENTRA TELEPHONE COMPANY-NEVADA
POBOX
7971
SHAWNEEMISSION,KS66207-u71
S20 MAISON 41ST FLOOR NEW YORK,NY 10022

Cli;~C-1Ballol
CENTRAL TELEPHONE COMPANY- NEVADA PO BOX 7971 SHAWNEE MISStON. KS 66207-0971
ClassC-1Ballol
CENTRAL TELEPHONE COMPANY- NEVADA PO BOX 7971 SHAWNEE MISSION. KS 66207.0971
CI"r.C.1BaIIo
CHAO & TANIA KEISER
ATIN, TROYL ISAAON

MADDOX, ISAACSON & CISNEROS. UP 3911 W, CHALESTON BLVO., SUITE 110 LA VEGAS. NV 89102
ClassC-18:i1101
CHARLES BAGLEY ATIN: TROY L. ISAACSON MADDOX, ISAACSON & CISNEROS. LLP
Class
C-1
Bilnoi
CHALES K. MOSLEY 28 COLLECTON RIVER DRIV HENOERSON.NV89052
CI"i;C-1Ballot CHAVE CONSTRUCTION CLE UP

ATI: CAVIO CHAVEZ
2160 W. CHALESTON
BLVO. STE. M
3811 W.CHALESTON 8LVD..SU1TE 110 LA VEGAS. NV 89102
LAVEGAS.NVII9102
Page2of10
Case 09-14814-lbr
The Rhodas Companas, LLC. U.S. Mail
ClassC.1Ballcl
cn TECHNOLOGY FINANCING SERVICES.
Doc 931-10
Entered 01/15/10 15:34:13
Page 73 of 80
S",rvcd12141009
CIaC.1Ballol
INC.
ClAK COUNTY TREAURER

500 S. GRANO CENTRAL PKY, 1ST FLR
ClassC-l B~IIoI CLASS OF PIJTIFF HOMEOWNERS, IN RE KITEC F
ATTN:LESLIEBRUELAND BANKRUPTCY PROCESSING SOLUTIONS, INC, 1l0 E SONTERRA BLVO" SUITE 240
SAN ANTONIO, TX 18256
CiO J. RADAlL JONES. ESO.

KEMP. JONES & COULTHARD. LLP
POBOXS51220
LA
VEGAS, NV891551220
J8 HOWARO HUGHES PARAY, 17TH FLOOR

lA VEGAS,NV
89169
ClassC.1BanCI
CMPNNTINGLNC. AnN: CHASON r.!MMOTT 10967LAMPIDNEST LA VEGAS. NV 89141
ClassC-1Ballot
COLOR GAMUT DlGITAL IMAGING 188 E. MALE AVE UNIT J
lAVEGAS,
ClasC.1Banoi
CONEXINTERNATIONAL
NEIL KATZ
NV89119
548 BLUEBIRD CANYON DRIV LAGUNA BEACH, CA 92651
ClllS.~ C-L Baiioi
Cl
A2\CBallol
ClasiAI\C2BaDoI
CORBY O. ARNOLD. ESQ., PROFESSIONL CORPORTI
295SS.JONESBLVD...SUIlEA
LA VEGAS. NV 89146
SUISSE SONIA VARGASIPSINOTICES

CREDIT
CREDIT SUISSE, CAYMI ISlADS BRAH

VAN C_OURRER 11& BERTRAD PAN SKADDEN.ARPS. SlATE. MEGHER & FLOM LLP 300 S. GRADAVENUE, SUITe. 3.00 LOS ANGELE, CA 00011.3141
C/O
CREDIT SUISSE LOAN FUNDING LLC

11 MADISON NEW AVE. 5TH FL YORK,NY
10010
A23 Ballol CS ALTERNATIVE CAPITAL MAGEMENT AFSHANAHMED ATRIUMCDO Class C/TIi BANK 11 MADISON OF NEW
ClassA2\CBa~ol
CS ALTERNATIV CAPITAL MANAGEMENT AfSHANAHMED CREOIT SUISSE ASSET MGMT SYND CLO THE BANK OF NEW YORK
Class A2C3 Bailoi CS ALTERNATIV CAITAL MANAGEMENT
FARHALVI
CATlE GARDEN FUNDING
C/O THE BANK OF NEW YORK NEW YORK, NY 10010
YORK
AVE
NEWYORK,NYioo10
NEW YORK, NY 10010
Cl3ssA2\C3ailor
CS ALTERNATIVE CAPITAL IMAGE-"'.ENT
Class
HOALIEN MAISON PARK FUNDING II. LTD. ClOTHE BANK OF NEW YORK NEW YORK,NY 10010
A2\C3 Ballol CS ALTERNATive CAPITAL MANAGEMENT MIMISINGH
ClasiA2C38allo
CS ALTERNATIV CAPITAL MANAGEMENT MMISINGH CSAtAFUNOINGIV C/O THE BANK OF NEW YORK NEW YORK. NY 10010
ATRIUMN
C/O THE BANK OF NEW YORK
NEWYORK,NY10010
ClassA21C3Ballil
CS ALTERNATIVE CAPITAL MANAGEMENT MONIQUECELE-STINE MADISON PARK FUNDING llTC ClOTHE BANK OF NEW YORK NEW YORK. NY 10010
CIaA2\C3BaIl
cs
Clas.C_1Ballol
CUSTOM HEATH DISTRIBUTORS AlTN: CHRISTIA LECATES
NILMLN HAIOERAl!
CSAM FUNDING 1 CiO THE BANK OF NEW YORK
P,O.BOK33361
N. LAS VEGAS. NV 89033
NEW YORK, NY 10010
ClassC.1Baliot CviC,INC.
PO BOX
C1asC.IBallol
DAN BRADLEY GlASS SHOP, INC.
ClassC.1Ballol
DAVID ANO CHRISTINE FROHNEN 11 ISLWORTH DR. HENDERSON, NV 69052
3635
CHATSWORTH, CA 91313
ATfN: JOY BRALEY 412SWOESERTINNRD VEGAS. lA NV 89102
C1assC.1Ballot
DEAN & DUNN ROOFING
C1ssC-1Ballol
DEL GROSSO FLOOR COVERING, INC.
ClassC-1Ballol DESERT PlTERING LLC

AnN: HERMELINDA RODRIGUEZ
2602 LOSEE ROAD
531 SOUTH CAMERON SUITE21 LASVEGAS,NVB9118
ATTN: JOSEPH TERRA

3170 PONDEROSA WAY lA VEGAS. NV 89118
NORTH LA VEGAS. NV 89030
Clss
A2\C3
alloi
ClassC.1Ballol
DEVELOPMENT PLANNING & FINANCING GROUP, INC. ATTN: TAMY SCOFIELD
ClassA2\C3BalI
DIAD SPECIA SITUATIONS LLC ALEXADER M. CHAVE2 DIAD SPECIAL SITUATIONS,LLC C/ CAPITALSOURCE TRS LLC 4445 WILLARD AVE 12TH FLOOR CHEVY CHASE, Me 2015
DEUTSCHE ASSET MGMT I SCUOOER CiO ADMINISTRATION GENESIS CLO 2001-3lTO, cia OEUTSCHE !lANK 1761 E. ST. ANDREW PLACE SANTA ANA, CA 02105
DPFG,INC.
21121 CALLE ARROYO,STE 1910 SAN JUAN CAPISTRAO. CA92615
Page30flo
Case 09-14814-lbr
The Rhodos Comp;nlcs, LLC - U.S. M;H
CIissC-1Sallol
CON'S OFFICE PROOUCTS
Doc 931-10
Entered 01/15/10 15:34:13
Page 74 of 80
Served
121412009
ClassC-1Balol
DOUBLE A ELECTRIC. LlC C/ BANKRUPTCY lAW CENTER. LLC
1100S. 10TH
CIi:;C-1BaIIoI
OR ORYWALL & PAINT TOO. LLC ATTN: JOHN P REYNOLDS
ATTN:R!ANE.t!ARRIS 216 N. 5TH STREET

KINGMAN. AZ aIMOl
STREEf
NV89104
2408 SANA ClA DR.

LA VEGAS, NV 89104
LAS VEGAS.
ClasC-1BaIIo
DSWATERIPARKLETTS P.O. BOX660579 DALLA.TX9752&6.0579
ClssC.1allol
DYNMIC HEATING & AIR OF NEVADA. INC.
CIisSc-iealkil
SYSTEMS. INC. OF NEVADA DYNAMIC PLUMBING ATTN: SUSAN BARKER
ATTN: MICHAEL MiONY 3315eIRTCHERORIVE LA VEGA,NV 89118
4745 COPPER SAGESTREET
LAVEGAS.NV89115
ClassC-1BaUol
EAGLE PAINTING & DRYWALL
CIissC-1BaIol
EMBARO COMMUNICATIONS. INC
ClassC.1aI
ENERGY INSPECTORS (WREDCO)
ATTN:CYNrH!ASTINE
6225 HARRISON DRIVE. SUI1E ILL
POBOX219008 KASAS CITY. MO 64121.9108
ATTN BANKRUPTCY DESKMGING AGEI'

851sEDNAAVENUE
LA VEGAS. NV 89120
SUIlE210 LAVEGASNV69117
ClasC.1BiUol
ENVIRONMENT At MAGEMENT SOWTIDNS 1214 WIGWMl PKWY NO 11l
HENOERSON. NV 69074.6156
ClassC-1Biiiol
ENVISION CONCRETE. LLC
ClassC-1Balkll
FEDEXCUSTOMER INFORMATION SERVICE ATTN: WILLIAM B. SEUGSTE1N
ATTN: MAUELA. DELTORO 5855 REFERENCE ST.
REVENUE RECOVERY~ANRUPTCY
3965 AIRWAYS BLVD. MOULE G. 3RO FLOOR
LA VEGA. NV 89122
MEMPHlS.TN36116
ClassC.1Ballol
FRANK RODRIQUEZ SERVICES. INC. 3675 S. RAINBOW. NO 180 LA VEGAS, NV 69103
Class
C-1
Balkl
ClassC.1Ballol
G.C. WALLACE, INC.
FRENCH BOUaUET FLOWER SH 3265 E. TROPICAN AVE
ATTN: JAMES VANOERKOM
STE.A. LAVEGAS.NV69121
66 SOUTH CIMRON ROAD

LAS VEGAS.NV 69113-2132
Ciass
A23
BaI:OI
CIaC.1Ballol
INC. ATTN: CHRISTOPHER AMEN 6835 S. ESCONOIOO STREET. SUITE A
GEO TEK.
ClassC-1Balkll
GESCO NV
GENERAL ELECTRIC INV. CORP
JAISYGEORGE
GENERAL ELECTRIC CAPITAL CORP 201 MERRITT 7.PO BOX5201 NORWALK. CT 0685605201 NORWALK. CT 06856.5201
166ANAMRST
REDWOOD CIT. CAIl061
LA VEGA. NV 89119-3832
crassC-1Ballil
GOlDEN TRIANGLE DEVELoPMENT 244 OARK FOREST AVE
ClasC_1Ballol
GOLF VENTURES WEST 5101 GATEWAY BLVD 1116
ClassC-1Ballol
GORDON & REES LLP
27s8ATTERYSTREETtI0l0
SA FRACISCO.CA94111
LAVGAS.NV69123
lAELANO.Fl33611
ClassC-18allol
GRAINGER
ClassC-1Baol
GRANITE WORLO t TO LLC ATTN; JAMES BLASCO
CiassC.18alkil
GREAT BUNS BAKERY 3270 E. TROPICANAAVE. lA VEGAS, NY 89121
P.O.80X419267 KASAS ciry, MO 64141-6267
2630 E.LA MARE WAY N. LA VEGAS. NV 6901
ClassC-18a1lol
GREENSPUN MEDIA GROUP 229 CORPORATE CIRCLE SUITE 250
CtassC-1Ballol
GREG NORMAN P.O. BOX 1006
CHARLOTTE. NC
ClassC.18alll
28201-1036
GUY EVANS CONRACTOR SERVlCES ATTN; KRISTIN OSWEILER, MACO AOMlNISTRA 260 JIMMY ANN DRIVE DAYTONA BEACH, FL 32114
HENDERSON. NY 89074
Page4of10
Case 09-14814-lbr
The Rhodes Companies, llC. U.S. Mall
Classc.i831CI
HARSCH I~STI\NT PROPERTIES. NEVADA LLC CLO JAICE J BROWN LEWIS BRISBOIS
~OO SOUTH FOURTH ST., SUIT 500
Doc 931-10
Entered 01/15/10 15:34:13
Page 75 of 80
Sarvedl214/2009
ClassC.1B:ikil
HARTFORD ARE INSURANCE COMPANY
ClassC.l B~lkil
HELENA CHEMICAL CO,
P.O.
BANKRUPTCYUN1T.T-1.55
BOX6O
HATFORD PLA
HARTFORD CT 0615
SAN FRANCISCO, CA 941603801
LA VEGAS. NV 69101
CIiSSC.1Billot
HOIiDEPOT
PO
CIa5SC-1Ballol IAN ROSEN

88901.6031
901 MOHAWK LA VEGAS. NV 11910'1
ClassC-1Ballot
iiON OFFICE
SDtUTIONS
BOX6031
NV
THE LAKES.
ATTN: SHAUNDOL YN ROBERTSON _ BANKRUPTCY ACCOUNTS RECEIVABLE CENTER
3920ARKWRIGHT RD- SUiTE 400 MACON. GA 31210
ClassC-l aa~ol
ClasC-1B:ilot
INTEGRIT MISONRY.INC RICHAD OREIT2ER, ESQ. BULlIANT, HOUSER & BAILEY, PC
3883 HOWARO HUGHES PKWY, NO. 550 LA VEGAS, NV 89169
ClassC.1Ballol
INTERIOR SPECIAUSTS.INC. ClOTAMALYNE.LEWIS RIDENOUR HIENTON & LEWIS
201 N. CENTRA PHOENIX, AZ AVE.
INSIGHT
P.0.80X78815
PHOEN1X, AZ
65062.8825
113O
85004
ClasC-1Balkt
INTERSTATE PLUMBING 8. AIR CONDITIONING, LLC
ClassC-1Balll
INTREPID IRON, INC. 3321 WESTERN AVENUE
ClassC.1Balll
IOVINO MAONRY
ATTN: JERRY JORGENSON 9260 El CAMINO ROAD LAS VEGAS, NV69139
ADN: BEVERLY WOLF

7201 W. POST
ROAD
lAVEGAS.NV89109
LAVEGAS,NV89113
ClassC-1Ballol
JACKPOT SAITATION SERVICES
ClasC.1Ballol JIWSRHODES
CLO BRED A. AXELROD, ESO. GREENBERG TRAURIG. LLP
ClassA2IC3Ballol
CAPITAL JEREMY JOHNSON SUMMIT LAKE CLO L TO
JEFFRIES
2440 MACOS STREET LASVEGAS,NV89115
3m HOWARD HUGHES PARWAY, ST 400 NORTH

LA VEGAS, NV 69169
CJO JEFFRIES CAITAl MlNAGEMENT, INC. l1100SANTAMONICABLVD., 11TH FL

LOS ANGELES. CA 90025
Ck,,
A23
Bailol
ClassC.1Ballol
JOBING.COM
ClasC-1Ballol
JOHN PRUNA
JEFFRIES
CAITAl
JEREMY JOHNSON VICTORIA FALLS eLO
POBOX29386 PHOENIX,AZ85038-938
622RACELST
LAS VEGAS. NV 891 3 1
CLO JEFFRIES CAPITAl MAAGEIiNT. INC. 11100SATAMQNICA BLVD.. 11TH Fl LOS ANGELES. CA 90025
ClaC-1B:llt
JOHN
CbssC-18alloi
JS PEST
C1ssC-1Ballot
K. BRINKERHOFF ENrERPRlSES
RHODES 2113HILLSGATEST
COJIOL
LAVEGAS, NV 89134
3157 N. RAINBOW BLVD. #568 LA VEGAS, NV 891084578
690 STONE MEAOWS AVEUE
lAVEGAS,NV69142
CIaC-1Balkl
K.H. LANOSCAING AT1: AM HARRISON
ClasA2\C3Balloi
KATONAH CAPITAL SCOTT HOLMES KATOWlH IX CLO lTO
ClassA2C3BaUat
KATONAH CAPITAL SCOTT HOLMES KATONAH VII! CLO LTO
8370W.CHEYENNEAVE.#10!l1
LA VEGAS, NV e9121
ClOUS8ANKNA
295 MAISON AVE. 6TH FlOOR NEW YORK. NY 10017
C/ US BAK NA
295 MAOism', AVE, 6TH FLOOR NEW YORK,NY1ODI7
Class A2\ Bailol KATONAH CAPITAL
Class
A21C
Ballot
ClassA2IC3Ballol
KINGSLAD
SCOD HOLMES
KOHL CIOUS
BERG CAPITAL FUNDING LLC I

BANK
NA
KATOl'HCAP1TAL STAN WONG KATONA VLLLLO BANK N.A ciuS
CAPITAL
TROY O. SIMMON
KINGSLANDI,LTO
OF NEW YORK 601 TRAVIS STREET, 17TH FLOOR HOUSTON. TX nOO2 ClTHE BANK
295~tADISON AVE. 6TH FLOOR NEW YORK,NY 10017
295 M,SON AVE, 6TH FLOO

NEW YORK,
NY 10017
Page50f10
Case 09-14814-lbr
Doc 931-10
Entered 01/15/10 15:34:13
Page 76 of 80
The Rhodes Companes, LLC - U_S. Mail Served 1214/2009

ClassA2\CJBaIIOl KINGSlAD CAPlT AL
TROY O.
ClassA2\C3Banol KINGSLAD CAITAl

TROY O. SIMMONS
KINGSLAD ILL LTO.
Clas~A2\C3 Oall
KINGSlAD CAPITAL
TROY D. SIMMONS
SIMMONS
KINGSlAO II LTO
CIO THE BANK OF NEW YORK 61)1 TRAVIS STREET. 17TH FLOOR
KINGSLADIV,LTO.
C/O THE BANK OF NEW YORK 601 TRAVIS STREET, 17TH FLOOR
C/O THE BANK OF NEW YORK
HOUSTON.TX77oo2
Oil,; A2\3
601 TRAVIS STREET, 17TH flOOR HOUSTON. TX nO2
HOUSTON,TX77002
CI~ssC.l Ballo!
Ballol
ClssC-1Ballol
KOCH SUITE & SCOW.
KINGSLAD CAITAL TROY O. SIMMOS
LLC
1150 EAERN AVENUE

110 HENDERSON. tN 56052
KINGSlAOVLTO.
CIO THE BANK OF NEW YORK 601 TRAVIS STREET. 17TH FLOOR
HOUSTON. TX
INC. ANNE MCGRAW 31G5SOUTH COAST HIGHWAY. SUITE A LAGUNA BEACH. CA 92651
LAGUNA GEOSCIENCES.
nOO2
CrassC-1BunOI LM1PSPLUSCENTENNlAL
ATTN; ACCOUNTS RECEIVABLE
20250
ClasC.1Balll)
lAOSCAPE SERVICES. INC.
3S W. MAYFLOWER AVENUE
CI~S5C.1 Ballot
LA VEGAS BILLBOARDS
S6 S. VALLEY VIEW BL VD#4
LA VEGAS. tN
STREET CHATSWORTH, CA 91311

PLUMMER
NORTH tAS VEGAS, NV 89030
89119
CtassC-18allol
LAS VEGAS REVIEW JOURNAl PO BOX 70
ClassC.1Bailol
LEE, HERNANEZ. KELSEY. BROOKS. GAROFALO & BL
ClassA2\C3Baliol
UGHTPOINT CAITAlMGMT LLC
KEONHALEY PREMrUM LOAN TRUST 1
Cl US BANK
NAT ASHA L BROOK

7575 VEGAS DRIVE 11151 LA VEGAS, NV &9128
tAVEGAS, NV 89125
NA
214 NORTH TRYON STREET. 26TH FLOOR
CHALOTTE. NC 2&202
Clss
A23Ballol
CLO I
ClasC.1Ballol
M & M ELECTRIC. )NC
ClassC-1BaIIoI
MANUFACTURERS'NEWS.INC AnN: ANZHEUKA KAMINSKA 163 CENTRA STREET EVANSTON. IL 60201
LlJFKlNADSORS
TAMARA ISAKHAROV
LATITUDE
ATTN; E. BRALEYWADSWORTH
3655 W DEWEY DR.
ClOOEUTSCHEBANK 60 WAll STREET. 39TH FLOOR NEVw' YORK. NY 10005

A23 Ballot MATLIN PATTERSON GLOBAL PARTNERS RALPH POSNER MATLINPATTERSON GLOBAL OPPORTUNIT1ES PARTN Class
LAVEGAS,tN9118
Class
A2\C3
aallol
ClasC-1Ballol
Iv.ENDENHALlSMTH ATTN; USA MORACA
MATLIN PATTERSON GLOBA PARTNERS
RAPH POSNER
MATllNPATTERSON GLOBAL OPPORTUNITIES PARTN 520MAOISONAVF.NUE. 35TH flOOR NEW YORK, NY 10022-4213
3571 RED ROCK ST..STE.A

LAS VEGAS. NV 89103
520 MADISON AviNU(;. 35TH FLOOR NEW YORK. NY 10022-4213
Ct:ssC-1BaUol
MERCURY REPROGRAPHICS 3325 PEPPER LANE
i-IIVtGAS. NV 69120
ClassC.1BaUol
M1LGARD MAUFACTURING. INC.
PO BOX
ClssC.1Balkil
MIRAOY RAYO & ARTURO CASIMIRO A TIN; TROY t. ISAACSON MADDOX. ISAACSON & CISNEROS. LLP 3811 W. CHARLESTON BLVD.. SUITE 110
LA VEGAS. NV 89102
533
PHOENIX,AZ85072
CtissC-1BaoI
MOBILE MIN. INC.
ClasC-1Ballol
MOOUlA SPACE CORPORATION
ClassC.1Ballol
MOHAVE COUNTY
79149 PHOENiX.AZ8SO2_9149
PO BOX
p.Q.aOX641S!l PITTSBURGH.PA1526.159
ClDOLORESH.MILKIE
ATTORNEY'S OFFlCE-CIVL DIVSION
BOX 7000 KINGMA, AZ 86402-7000 P.O.
Cla..~C_1 8aliol
MOHAVE ELECTRIC COOPERATIVE. INC. ATTN; GREG SEANEY
POBOX
ClassC-1Ballol
MORGAN GRIMSHAW 8985 UNION GAP RD LA VEGAS. NV 69123
ClassC.l B~lIot MSE I ERIK LUNDGAAO

9811 W. CHARLESTON Bt VD. 1/403 LAS VEGAS. NV 89117
1045 BULLHEAOCITY.AZ86430.1045
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ClassC-1 a~ol
Doc 931-10
Entered 01/15/10 15:34:13
Page 77 of 80
Served
12/4J2009
Ciasc.1Ballol
NATIONAL CITY COMMERCIAL CAPITAL COMPANY. LLC ATT: L1SAM. MOORE, VICE PRESIOF.NT 995 DALTON AVENUE
ClassC.l11allol
COMMERCIAL CAPITAL COMPANY. ATTN: LISA M. MOORE. VICE PRESIDENT 995 DALTON AVENUE
NATIONAL CITY
NATIONAl ADVERTISING & PUBLlsiilNG INC 1245 FARMINGTON AVE II 104 WEST HARTFORO. CT 06107
CINCINNATf,OH4520
CINCINNATI, OH ~::20
ClassC-1Balki
NATIONAL CITY COMMERCIAL CAPITAL COWfANY. LLC ATTN; L1SAM. 1.1ORE, VICE PRESIDENT 995 DALTON AVENUE CINC1NNAT1,01-45~03
CL~ssC_1 BIiHol
ClassC.19alll
NATIONAL CITY COi.RC1Al CAPITAL COMPANY,
AnN: LISA M. MOORE, VICE PRESIDENT
NATIONA CITY COMMERCIAl CAPITAl COMPAt', LLC

ATTN: LISA M. MOORE. VICE PRESIOENT
9950ALTONAVENUE
CINCINNATI, OH 462(3
995DAlTONAVENUE
CINCINNATI. OH
4520
Class
C.1 Ballol NATIONAL ClTGOLF FINANCE P,O. BOX 931034 CLEVELAO, OH 44193
Class
C-L
Baiiol
Ctac.1Balii
NEVADA LINEN SUPPLY
NEVADA HOUSE OF HOSE
t015SHARfC1R
N. LA VEGAS. NV 89030
ATTN:JULlEFlTION
396 W.
MESA VSTAAVE
LAVEGAS,NV891111
ClassC-1Baol
NVADAPOWER COMPANY D/B/A NV ENERGY C/O KIRBY C, GRUCHOW. JR.. ESa LEACH JOHNSON SONG &. GRUCHOW 5495 SOUTH RANBOW BOULEVARD. SUITE 20 LA VEGAS. NV 1191111
C13ssC.1B3lloi
NEVADA POWER COMPANY D/BA NV ENERGY
ClassC.1Ballol
NEVADA STATE TREASURER ATTN: MAY MCELHONE
ClOKlRBYC. GRUCHOW.JR., ESD

LEACH JOHNSON SON &. GRUCHOW 5495S0UTl RAINBOW BOOLEVARD. SUITE 202
UNCtMED PROPERTY DIVISION 55 E. WASHINGTON AVE,1I200

LA VEGAS. NY 8911)1
LAVEGA,NV891111
ClassC.1Ballol
NEWCRETELLC
6639 SCHUSTER
ClassC-1Bailol
STREET
tAVEGAS,NV89118
NIKEGOLF P.O. BOX 117648 OALLAS.TX75284.7648
ClassC-1 Bailoi OPPORTUNlTYVILLAGE ARC,INC
630 WEST OAKEY BOULVARD

LA VEGAS, NV 89146
ClassC-1Ballol
ORKIN PEST CONrROL
5740 MVILLE ST SUITE
ClassC1Balloi
201
PAR 3 LADSCAPE & MAINTENANCE, INC. ATTN: KA BRIAN
CtaC1BaIiol
PERFORtCE PLUS ENGINEERING
2n40 JEFFERSON AVENUE 1/20 TEMECULA, CA 9259
LAVEGAS,NV89118
~610WYNRD. LAVEGAS,NV89103
ClassC-1Ballo\
PRESTIGE
ClassA28a1101
PRINCETON ADVISORY GROUP MARC MCLEROY ROSEDAlE CLO L10 CLO PRI1YETON ADVISORY GROUP
FLAG
ClassC.1Ballol PROFESSIONA DOCUMENT PRODUCTS

3371 W. OQUENDO ROAD
591CAMINODELAREINAIt17
SAN DIEGO. CA 92108
LAVEGAS,NV89118
700AlEXDER PAR,STE201
PRINCETON. NJ
08540
ClassC.1B.iol
PRUDENTIAL OVERALL SUPPl.Y P.O. BOX 112U10
ClassC-1Ballol
QUAlITY CABINETS OF NEVADA
LOCK
ClasC-1Ballot
OUALIT IMPRESSIONS
SANA ANA, CA 92711
842520 OALLAS,TX75284.2520
BOX
6295 HARISON OR. SUIT29 LA VEGAS. NV 89120
ClnssC.1Ballol
DUAliTY INTERIORS, INC
ClasC-1Balloi
OUALITYWOOD PRODUCTS L10 ATTN: DARREN T STUDENT 3001N.NELLISBLVD
LA VEGAS, NV 89115
ClassC-1Ballol
RAID REFILL
INK
748 SPRINGDALE OR, SUITE 1W CORONII,CA9288D-17lM
7375 S. DURANGO DR.
LAVEGAS,NV89113
Page7of10
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ClassC-1Ballol
RCR PLUMBING AND MECHANICAL.
Doc 931-10
Entered 01/15/10 15:34:13
Page 78 of 80
Served
121412009
ClassC-1BalOI
INC.
Clas~C-1BaUoI
RED ROCK MECHANICAl. LLC
REALTY WEST INC.
AnN:CLlFFM.I.ACY
12620 MAGNOLIA AVENUE
RIVRSIDE. CA
1100 MAY CREST ROAD HENDERSON. m 99074
6311 DANMATIN DR.
lAVEGAS.NV99118
92S03
Cl~ssC-1 a.~Ik1
REDBURN TIRE COMANY PO aox 14626
ClassC.1BBlIol REELSOUNO
1111 MAY
ClasC-1Ballol
RESIDENTIAL WARRATY COMPANY ATTN: KENNETH J. BUGGY
5300 DERRY STREET HARRISBURG. PA 17111.3598
CREST
PHOENIX.A28563.4928
SUITE?
HENDERSON, NV 89074
ClassC.1Balfot
RETAIL ASSOCIATION OF NEVADA
C1BssC-1Ballot RHODES RANCH ASOCIATION. INC.

CLO KIRBY C. GRUCHOW. JR., ESO LEACH JOHNSON SONG & GRUCHOW 5495 SOUTH RAINBOW BOULEVARD, SUITE 202
ClassC-1Ballot
RICKEY & DORIS LOFTON
41I1S.M1NNESOTASTREET
CASON cm, NV 89703.4272
LAVEGA,NV99118
AnN: TROY L ISAACSON MADDOX. ISACSON & CISNEROS, LLP 3811 W. CHARLESTON BLVD.. SUITE 110 LA VEGAS, NV 891112
ClassC.18alloi
RISE t9!. &
CliiC-1Ballol
SAfETY RAILS OF NEVAOA, INC
ctC-1Ballol
SHAYlON HOMEOWNERS' ASSOCIATION CIA KIR8Y C. GRUCHOW. JR" ESO LEACH JOHNSON SONG & GRUCHOW 5495 SOUTH RAINBOW BOULEVARD. SUITE 202
RUN,INC.
WHITNEY
,SA
HENDERSON. NV 89014
LOFQUIST 3447 RINGSTAR RD.

AnN: RADY LAS VEGAS.
NV89030
LAVEGAS,NV89118
ClassC-1Balot
SIEMENS BLOG TECHNOLOGIES. lNC 7850 COlLECTIONS CENTER DRIVE CHICAGO.IL W693
CklssC.18allot
SILVER STATE BUILDER SERVICES. UC ATTN; GI8 GANSCHOW
420W, TOMKINS AVE.
ClassC-1Ballol
SilVER STATE
FIREPLACES
35 W. aUAIL ROAO, STE A
STE. 3
lAVEGAS.NV89118
LAS VEGAS, NV 89103
Class C-1 B.~ol

SILVER STATE SPEClATIES,
ClassC-1Ballol
LLC
SKYliNE INSULATION.
INC.
CL~ssC-1 Baiiol SLATER HAIFAN GROUP
3115 E. LONE MOUNTAIN ROAD
SUITE1SO
lAVEGAS,NV89O1
4151lNOUSTRIAL CENTER ORNE SUITE 800 N LA VEGAS. NV 8903(1
AnN BANUPTCY DESKNAGING AGENT 574tSARlLLE216

LA VEGAS NV tlllt18
ClassC.1Balll
SLAUGHTER. ET AL, CLAS ACTION CLAIM ATTN: TROY L. ISAACSON MADOX, ISAACSON & CISNEROS. LLP 3811 w. CHALESTON BLVD., SUITE 1111
ClassC.1Sallot
SMITH & lWEED P.O. BOX 1116
CHARLOTTE. NC 28201-036
ClassC-18a1101 SOHWEST CONSULTING GROUP JEANIE FRAIER. SCG

11aseERNADOPlA COURT.
SUITE 101C
SAOIEGO.CA92128
lAVEGAS.NV89t(i2
Cl;S5 C.1 Ba~ol
CI~S5C-1 BalTot
ClassC-18allol
SPARKLETT DRINKING WAT P.O. BOX66(1579 TX 75266-0579 OALlA.
SOUTHWEST GAS CORPORATION
AlTN: JAlMIE SHIPP - BAKRUPTCY DESK

POBOX
1498
VICTORVILLE,CA92393-1498
SOUTHWEST IRONWORKS.LLC BRIAN K. BERM/. ESO. 721GASSAVENUE LASVEGAS.NV891(11
C1aS5C-1 BD~ot
ClaC.1831101
STAff
ClassC-1BalIol
STANLEY CONSULTANS,
SPORTS TURF IRRIGATION AlTN: JAIS NICHOLL
MARK
3(10
INC.
AnN: TERRI AYERS

435 ELM ST. STE
5820S.EASTERNAVENLE,1i140
tl19.AS.lIlROSEST
PLACENTIA,CA92tl70
lAVEGAS.NV89119
CINCINNATI,Ofl45202
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Clai:C.18auOl
STANLEY CONSULTANTS. INC.
5320 S. EAERN AVENUE.
CbssC.18Dlloi
STEVEN ENTERPRISES.
ClassC_l8alkit
INC. STRAIGHT DOWN CLOTHING
11140
ATIN:AMCAISOZA
17952 SKY PAR CIR. STE. E
IRVINE, CA 92614
LAS VEGAS. NV 89119
62$ CLAION COURT SAN LUl$ OB1SPO. CA93401
Cli:C-1allol
SUNLAD
ClassC.1BaJel
SUNRISE FIRE
C1assC-18allt
INC.
ASPHALT ATTN: MiKE MCWENJE INC. - ASPHALT & SEALCOAiiNG SUNLA. 300 S. PRIEST DR., SUITE 100
ATTN: GLEI' D. BROWN
SUNRISE MECHAICAL. INC ATTN: BONNIE L REAVES
POBOX8204
LA VEGAS, NV 89180
738 COMMERCIA WAY HENDERSON. NV 89011
TEMPE.AZ85282
ClasC-18allol
SURFACE SOLUTIONS ATTN:EULALlOMORENO P.O. BOX 335112
2305 OALTON RIOGE CT. NOR1H LAS Vi:GAS, NV 89033
ClassC-1Balol
SURFACE SPECIALISTS OF NEVADA
ClaC.1Balll
SYSCO FOOD
BOX 93537 LA VEGAS. NV 89193 P.O.
2756 N. GREEN VAlEY PKWY
PM84s.
HENDERSON. NV 89014
C1assC-1BaiIOl T.1. RESIDENTIA, iNC.

C/O DANA JONATHON NITZ. ESQ. 9950 W. CHEYENNE AVENUE
ClassC.1Balkit
TAIT & ASSOCIATES.
CiaC.1Balkii
INC.
P.O.BOX1111B
SI\TAI\A,CA92711-1118
TEKSYSTEMS,INC. 7437 RACE RD. HAOVER. MO 21076
LAVEGAS.NV89129
Class C-L Ballol THE TIBERT, COMPANY
CIas:C.1Bullol
THE TWT GROUPlW, INC. (OBA THE WHEEL THING) DANIEL L. COATS
ClassC-1Ballol
TOBACCO LEAF 7175 W. LAE MED BLVD 11120 LA VEGAS. NV 89128
ATTN:JELINDOTIBERTI 49'1$ ROGERS STREET
11982KIOWAAVE.1I4
LOS ANGELES. CA 9009
LAVEGAS.NV89118
ClassC.1Balkil
TRAVIS MATHEW API"
15547 GRAHAM
ClassC-1B31lol
ST
TRITON GRAING & PAVING LLC 4220ARCATA WAY
LOG BSUITE 1
ClassC-1Bal1o
TURF TECH
80 BUCHAN 1/115-276
BOULDER CITY. NV 800$
HUNTINGTON BEACH. CA 92649
N LAS VEGAS. NV 89030
C!assC.l8a1101
TUSCANY "lATER ASSOCIATION
ClasC-1BaUot
TYGRIS VENDOR FINANCE. INC. FOOA u.s. EXPRESS LEASING. INC.
ClasC.1Ballo
UNISOURCE ENERGY CORPORA nON ATTN: CAROLINA VILLACUESA ruCSON ELECTRIC POWER CD.-SCCS PO BOX 711 TUCSON, A2 857(\2.
CIl(IRBY C. GRUCHOW. JR., ESO.

LEACH JOHNSON SONG & GRUCHOW 5495 SOUTH RANBOW BOULEVARO. SUITE 2t2
ATT: ANNETIE. MCGOVERN

1(1 WATERVIEW BL.VD.
LAVEGAS.NV69118
PARSIPPANY,NJ070&
ClassC-1Ballot
UNISOURCE ENERGY CORPORATION ATTN: CAROLINA VILLASCUESA TUCSON ELECTRIC POWER CO..SCCS
ClassC-1BDlIol
Cl3ssC-1Ballol
VALLY AIR CONDITONING lNC.
US FooOSRV1CE
P.O. LAS
BOX3911 VEGAS. NV 89127_3911
9225 MANSIREET
LA VEGAS, NV 89139
POBOX711
TUCSON. AZ85702
ClassC.1Balol
VAlLEY PIQNEERS
WATER
59ElW.CHINODRIVE
GOLDEN VALLEY, AZ 85143
Class A2 Balkil VAN KAMPEN ROBERT FANELLI VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUN 1 PARKVIEW PlA. SUITE 100 OAKBROOK TERRCE, IL 6(\181
C1usC-1BaIIoI WALLCONSTRUcrORS.INC
WINNER 601$ MCLEOD DRIVE LA VEGAS. NV 89120
ATTN: BAY
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WALLACE MORRlS SURVEYING, INC.
S74Q S. ARVlLLE STREET SUITE
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ClassA2\CJBallol
1/206
ClassC.1BaIIoI
WESTAR KITCHEN & BATH. LLC
Lf\VEGfI.NVIl9116
WELLS FARGO BANK. NATIONAASSOClAT1ON ATTN: DAVID BERGSTROM 625MARQUETTE AVE. PilACN9311-110
CJO WlLlIAM & WIESE 612 SOUTH TENTH STREET

LA VEGAS. NV 89101
MlNNEAPOUS,MN5579
Ciassc-1Balkll
WESTCCf CONSTRUCTION SS20STEPHANI!:STREET
ClassC-1Baol
WESTERN SIGN & FLAG lNC 4181W OOUENDO
ClassC-1BaUol
WilLIS ROOF CONSULTING.
INC.
tAVEGAS.NV89122
LASVEGAS.NV89118
ATTN: JOSEPH WILLIS 4755 WEST DEWEY DRIVE LA VEGAS. NV 89n8
Creditors; 249
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Case 09-14814-lbr

Entered 01/15/10 15:34:13

UNITED STATES BANKUPTCY COURT

THE RHODES COMPANES, LLC, aka

Case No.: BK-S-09- i 48 i 4-LBR

r 1 Affects the following Debtors

AMENDED CERTIFICATE OF SERVICE

Cover Letter (attached hereto as Exhibit A)

and Countr Club (Case No. 09-14854); Tuscany

Entered 01/15/10 15:34:13

the Plan (attached hereto as Exhibit F)

Class A-2/C-3 Ballot (attached hereto as Exhibit I)

Executed on January 14, 2010, at Encino, California

Entered 01/15/10 15:34:13

Entered 01/15/10 15:34:13

AKIN GUMP STRAUSS HAUER & FELDLLP

The Rhodes Companies, LLC and Its Affilated Debtors:

on the Second Amended Modifed Plan of Reorganization Pursuant to Chapter 11 of the

(b) the Order (A) Approving the Adequacy of

(the "Solicitation Procedures Ordet');

Creditors' Committee and the Second Lien Agent (collectively, the

the Plan; and

Exhibit A thereto) in CD-ROM format.

Entered 01/15/10 15:34:13

The materials in the Solicitation Package are intended to be self-explanatory. If you

Entered 01/15/10 15:34:13

Entered 01/15/10 15:34:13

Case 14-lbr Doc 809

Entered 12/01/09 14:39:46

Entered on Docket December 01. 2009

Hon. Linda B. Riegle United States Bankruptcy Judge

UNITED ST A lES BANKRUPTCY COURT DISTRICT OF NEVADA SOUTHERN DIVISION

Case No. 09-14814-LBR (Jointly Administered)

Hearing Time: i :30 p.m (rST) Courtroom J

Affects: Deblors l' All

Homes AriZOIlB, LLC (7248J~ Rho Arizona PJopn:ies, LLC

Entered 01/15/10 15:34:13

Case09-14814-lbr Doc809 Entered 12/0110914:39:46 Page2of6

SOLICIT A nON AND NOTICE PROCEDURES WITB RESPECT TO

Second Amended Modified Plan ofReorgaizalion Pursant 10 Chapter i 1 oflhe

'" -r.~.. .. ;:"'....

Ballots and Noiice in

the hearing Lo approve the Disc(osure Statement

The Disclosure Sialement COntains "adequate infonnation" as defincd in

23 Bankptcy Code scciion 1125(3), and is hereby APPROVED in aU reects pursuanl to

24 Bankrutcy Code seeion 1125(3).

Entered 01/15/10 15:34:13

Case 09-14814-lbr Doc 809 Entered 12/01/09 14:39:46 Page 3 of 6

the Second Amended Plan or

modified, ihe "Plan'') wil be held on January 14, 2010

9 the Confinnation Hearng of the date or dales of any adjourned hearing.

The record date for purpses of

voting 10 accept or reject the Plan is the date

~ ~ tl-"..-'-".i"" ;=....t_ _;:N -. ~Of or N

this order (the "Record Date").

15 indicated in the voiing inslrucionsHml accompany the Ballot.

;2 ~t.g i~00 tl . ,.. ;ii. _ .c

17 objections. comments or responses. including any supporting memoranda, to confinnaiion of

the Court; () Counsel for the First

Entered 01/15/10 15:34:13

Case 09-14814-lbr Doc 809 Enlered 12/01/09 14:39:46 Page 4 of 6

The Firsl Lien Steeng Committee shall file Is memorandum in suprt of

5 confinnalion oflhe Plan by January II, 2010.