10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

JOINT QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended

September 30, 2003

Commission File No. 1-6776

Centex Corporation

A Nevada Corporation

IRS Employer Identification No. 75-0778259
2728 N. Harwood
Dallas, Texas 75201
(214) 981-5000

Commission File Nos. 1-9624 and 1-9625, respectively

3333 Holding Corporation
A Nevada Corporation
Centex Development Company, L.P.
A Delaware Limited Partnership

IRS Employer Identification Nos. 75-2178860 and 75-2168471, respectively
2728 N. Harwood
Dallas, Texas 75201
(214) 981-6770

The registrants have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and have been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrants are accelerated filers (as defined in Rule 12b-2 of the Exchange Act). Yes x No o

Indicate the number of shares of each of the registrants’ classes of common stock (or other similar equity securities) outstanding as of the close of business on November 7, 2003:

Centex Corporation	Common Stock	62,157,591 shares
3333 Holding Corporation	Common Stock	1,000 shares
Centex Development Company, L.P.	Class A Units of Limited Partnership Interest	32,260 units
Centex Development Company, L.P.	Class C Units of Limited Partnership Interest	211,142 units

TABLE OF CONTENTS

Part I. Financial Information
	Item 1. Financial Statements
		Statements of Consolidated Earnings
		Consolidated Balance Sheets with Consolidating Details
		Statements of Consolidated Cash Flows with Consolidating Details
		Notes to Consolidated Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
Part II. Other Information
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 6. Exhibits and Reports on Form 8-K
Signatures
Part I. Financial Information
	Item 1. Financial Statements
		Condensed Combining Statements of Operations
		Condensed Combining Balance Sheets
		Notes to Condensed Combining Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
Part II. Other Information
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 6. Exhibits and Reports on Form 8-K
Signatures
EX-10.1 Credit Agreement
EX-10.1 Amendment No. 2 to Partnership Agreement
EX-10.2 Letter of Credit & Reimbursement Agreement
EX-31.1 Certification of CEO-Rule 13a-14 & 15d-14
EX-31.2 Certification of CFO-Rule 13a-14 & 15d-14
EX-31.3 Certification of CEO-Rule 13a-14 & 15d-14
EX-31.4 Certification of CFO-Rule 13a-14 & 15d-14
EX-31.5 Certification of CEO-Rule 13a-14 & 15d-14
EX-31.6 Certification of CFO-Rule 13a-14 & 15d-14
EX-32.1 Certification of CEO - Section 906
EX-32.2 Certification of CFO - Section 906
EX-32.3 Certification of CEO - Section 906
EX-32.4 Certification of CFO - Section 906
EX-32.5 Certification of CEO - Section 906
EX-32.6 Certification of CFO - Section 906

Centex Corporation and Subsidiaries
3333 Holding Corporation and Subsidiary
Centex Development Company, L.P. and Subsidiaries

Form 10-Q Table of Contents

September 30, 2003

Centex Corporation and Subsidiaries

Part I.	Financial Information		Page
	Item 1.	Financial Statements
		Statements of Consolidated Earnings		1
		Consolidated Balance Sheets with Consolidating Details		3
		Statements of Consolidated Cash Flows with Consolidating Details		5
		Notes to Consolidated Financial Statements		7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		29
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk		52
	Item 4.	Controls and Procedures		52
Part II.	Other Information
	Item 4.	Submission of Matters to a Vote of Security Holders		53
	Item 6.	Exhibits and Reports on Form 8-K		54
Signatures				55

 i

3333 Holding Corporation and Subsidiary
Centex Development Company, L.P. and Subsidiaries

Part I.	Financial Information		Page
	Item 1.	Financial Statements
		Condensed Combining Statements of Operations		56
		Condensed Combining Balance Sheets		58
		Condensed Combining Statements of Cash Flows		59
		Notes to Condensed Combining Financial Statements		60
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		70
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk		79
	Item 4.	Controls and Procedures		79
Part II.	Other Information
	Item 4.	Submission of Matters to a Vote of Security Holders		80
	Item 6.	Exhibits and Reports on Form 8-K		81
Signatures				82

ii

Part I. Financial Information

Item 1. Financial Statements

Centex Corporation and Subsidiaries
Statements of Consolidated Earnings
(Dollars in thousands, except per share data)
(unaudited)

			For the Three Months Ended September 30,
			2003			2002
Revenues
	Home Building		$	1,709,139		$	1,282,316
	Financial Services			290,551			204,819
	Construction Products			154,798			135,993
	Construction Services			386,629			391,740
	Investment Real Estate			22,673			2,992
	Other			19,334			26,254
				2,583,124			2,044,114
Costs and Expenses
	Home Building			1,504,741			1,154,916
	Financial Services			214,049			168,244
	Construction Products			125,175			109,250
	Construction Services			382,069			382,539
	Investment Real Estate			3,892			1,420
	Other			20,210			27,477
	Corporate General and Administrative			22,473			14,447
	Interest Expense			17,403			16,529
	Minority Interest			10,090			8,501
				2,300,102			1,883,323
Earnings from Unconsolidated Entities				15,080			3,563
Earnings from Continuing Operations Before Income Taxes and Cumulative Effect of a Change in Accounting Principle				298,102			164,354
	Income Taxes			98,504			49,358
Earnings from Continuing Operations Before Cumulative Effect of a Change in Accounting Principle				199,598			114,996
(Loss) Earnings from Discontinued Operations, net of Taxes of $(113) and $330				(209	)		613
Earnings Before Cumulative Effect of a Change in Accounting Principle				199,389			115,609
Cumulative Effect of a Change in Accounting Principle, net of Taxes of $(8,303)				(13,260	)		—
Net Earnings			$	186,129		$	115,609
Basic Earnings Per Share
	Continuing Operations		$	3.23		$	1.89
	Discontinued Operations			—			0.01
	Cumulative Effect of a Change in Accounting Principle			(0.21	)		—
			$	3.02		$	1.90
Diluted Earnings Per Share
	Continuing Operations		$	3.09		$	1.82
	Discontinued Operations			—			0.01
	Cumulative Effect of a Change in Accounting Principle			(0.21	)		—
			$	2.88		$	1.83
Average Shares Outstanding
	Basic			61,713,825			60,875,672
	Dilutive Securities:
		Options		2,609,080			1,619,150
		Other		215,532			541,468
	Diluted			64,538,437			63,036,290
Cash Dividends Per Share			$	0.04		$	0.04

See Notes to Consolidated Financial Statements.

1

Centex Corporation and Subsidiaries
Statements of Consolidated Earnings
(Dollars in thousands, except per share data)
(unaudited)

			For the Six Months Ended September 30,
			2003			2002
Revenues
	Home Building		$	3,213,632		$	2,387,831
	Financial Services			557,411			385,359
	Construction Products			298,887			264,768
	Construction Services			762,384			752,461
	Investment Real Estate			25,418			9,635
	Other			42,110			55,473
				4,899,842			3,855,527
Costs and Expenses
	Home Building			2,853,782			2,160,368
	Financial Services			415,310			324,478
	Construction Products			246,385			210,293
	Construction Services			753,265			735,180
	Investment Real Estate			5,882			3,968
	Other			44,559			58,901
	Corporate General and Administrative			41,705			27,081
	Interest Expense			34,367			31,863
	Minority Interest			17,575			17,383
				4,412,830			3,569,515
Earnings from Unconsolidated Entities				20,160			3,068
Earnings from Continuing Operations Before Income Taxes and Cumulative Effect of a Change in Accounting Principle				507,172			289,080
	Income Taxes			165,240			86,814
Earnings from Continuing Operations Before Cumulative Effect of a Change in Accounting Principle				341,932			202,266
Earnings from Discontinued Operations, net of Taxes of $133 and $591				247			1,098
Earnings Before Cumulative Effect of a Change in Accounting Principle				342,179			203,364
Cumulative Effect of a Change in Accounting Principle, net of Taxes of $(8,303)				(13,260	)		—
Net Earnings			$	328,919		$	203,364
Basic Earnings Per Share
	Continuing Operations		$	5.56		$	3.30
	Discontinued Operations			—			0.03
	Cumulative Effect of a Change in Accounting Principle			(0.21	)		—
			$	5.35		$	3.33
Diluted Earnings Per Share
	Continuing Operations		$	5.32		$	3.19
	Discontinued Operations			—			0.02
	Cumulative Effect of a Change in Accounting Principle			(0.20	)		—
			$	5.12		$	3.21
Average Shares Outstanding
	Basic			61,480,825			61,021,424
	Dilutive Securities:
		Options		2,565,772			1,808,690
		Other		187,908			539,670
	Diluted			64,234,505			63,369,784
Cash Dividends Per Share			$	0.08		$	0.08

See Notes to Consolidated Financial Statements.

2

Centex Corporation and Subsidiaries
Consolidated Balance Sheets with Consolidating Details
(Dollars in thousands)
(unaudited)

			Centex Corporation and Subsidiaries
			September 30, 2003			March 31, 2003
Assets
	Cash and Cash Equivalents		$	89,514		$	469,778
	Restricted Cash			290,618			172,321
	Receivables -
		Residential Mortgage Loans Held for Investment, net		5,618,547			4,642,826
		Residential Mortgage Loans Held for Sale		1,980,941			303,328
		Construction Contracts		305,661			251,024
		Trade, including Notes of $59,228 and $31,315		409,277			406,008
	Inventories -
		Housing Projects		3,947,876			3,306,655
		Land Held for Development and Sale		91,292			106,057
		Land Held Under Option Agreements Not Owned		296,586			—
		Construction Products		52,375			58,254
		Other		14,459			15,278
	Investments -
		Centex Development Company, L.P.		298,384			281,100
		Joint Ventures and Other		132,888			102,277
		Unconsolidated Subsidiaries		—			—
	Property and Equipment, net			666,061			681,165
	Other Assets -
		Deferred Income Taxes		70,226			52,929
		Goodwill		304,957			304,780
		Mortgage Securitization Residual Interest		102,514			108,102
		Deferred Charges and Other, net		185,005			238,290
	Assets of Discontinued Operations			5,777			110,364
			$	14,862,958		$	11,610,536
Liabilities and Stockholders’ Equity
	Accounts Payable		$	621,293		$	630,118
	Accrued Liabilities			1,035,432			1,028,211
	Debt -
		Centex		2,194,386			2,105,880
		Financial Services		7,638,274			4,998,819
	Payables to Affiliates			—			—
	Liabilities of Discontinued Operations			—			19,435
	Minority Interests			456,157			170,227
	Stockholders’ Equity -
		Preferred Stock: Authorized 5,000,000 Shares, None Issued		—			—
		Common Stock: $.25 Par Value; Authorized 100,000,000 Shares; Outstanding 61,581,858 and 60,836,091 Shares, Respectively		15,793			15,483
		Capital in Excess of Par Value		173,740			98,711
		Unamortized Value of Deferred Compensation		(29,173	)		(2,398	)
		Retained Earnings		2,828,097			2,597,078
		Treasury Stock, at Cost; 1,588,948 and 1,096,844 Shares, Respectively		(81,506	)		(45,037	)
		Accumulated Other Comprehensive Income (Loss)		10,465			(5,991	)
	Total Stockholders’ Equity			2,917,416			2,657,846
			$	14,862,958		$	11,610,536

See Notes to Consolidated Financial Statements.

3

Centex Corporation and Subsidiaries
Consolidated Balance Sheets with Consolidating Details
(Dollars in thousands)
(unaudited)

Centex*						Financial Services
September 30, 2003			March 31, 2003			September 30, 2003			March 31, 2003
$	78,497		$	454,696		$	11,017		$	15,082
	34,567			8,349			256,051			163,972
	—			—			5,618,547			4,642,826
	—			—			1,980,941			303,328
	305,661			251,024			—			—
	229,715			207,704			179,562			198,304
	3,947,876			3,306,655			—			—
	91,292			106,057			—			—
	296,586			—			—			—
	52,375			58,254			—			—
	4,697			6,832			9,762			8,446
	298,384			281,100			—			—
	132,888			102,277			—			—
	457,043			405,407			—			—
	624,323			639,069			41,738			42,096
	(32,687	)		(36,534	)		102,913			89,463
	288,355			287,725			16,602			17,055
	—			—			102,514			108,102
	120,343			156,650			64,662			81,640
	5,777			110,364			—			—
$	6,935,692		$	6,345,629		$	8,384,309		$	5,670,314
$	597,460		$	589,530		$	23,833		$	40,588
	772,050			804,447			263,382			223,764
	2,194,386			2,105,880			—			—
	—			—			7,638,274			4,998,819
	—			—			(55	)		25,736
	—			19,435			—			—
	454,380			168,491			1,777			1,736
	—			—			—			—
	15,793			15,483			1			1
	173,740			98,711			200,467			200,467
	(29,173	)		(2,398	)		—			—
	2,828,097			2,597,078			273,540			198,145
	(81,506	)		(45,037	)		—			—
	10,465			(5,991	)		(16,910	)		(18,942	)
	2,917,416			2,657,846			457,098			379,671
$	6,935,692		$	6,345,629		$	8,384,309		$	5,670,314

* In the supplemental data presented above, “Centex” represents the consolidation of all subsidiaries other than those included in Financial Services. Transactions between Centex and Financial Services have been eliminated from the Centex Corporation and Subsidiaries balance sheets.

4

Centex Corporation and Subsidiaries
Statements of Consolidated Cash Flows with Consolidating Details
(Dollars in thousands)
(unaudited)

			Centex Corporation and Subsidiaries
			For the Six Months Ended September 30,
			2003			2002
Cash Flows — Operating Activities
	Net Earnings		$	328,919		$	203,364
	Adjustments-
		Cumulative Effect of a Change in Accounting Principle		13,260			—
		Depreciation, Depletion and Amortization		57,394			47,052
		Provision for Losses on Residential Mortgage Loans Held for Investment		34,894			13,556
		Deferred Income Tax (Benefit) Provision		(13,731	)		29,118
		Equity in Earnings of Centex Development Company, L.P. and Joint Ventures		(18,276	)		(3,202	)
		Equity in Earnings of Unconsolidated Subsidiaries		—			—
		Minority Interest, net of Taxes		11,321			11,562
	Changes in Assets and Liabilities, Excluding Effect of Acquisitions
		Increase in Restricted Cash		(111,000	)		(21,000	)
		Increase in Receivables		(91,577	)		(89,215	)
		Decrease in Residential Mortgage Loans Held for Sale		765,815			40,198
		Increase in Housing Projects and Land Held for Development and Sale Inventories		(660,851	)		(582,832	)
		Decrease (Increase) in Construction Products and Other Inventories		5,630			1,136
		(Decrease) Increase in Accounts Payable and Accrued Liabilities		5,890			8,113
		Decrease (Increase) in Other Assets, net		35,634			15,592
		Increase (Decrease) in Payables to Affiliates		—			—
		Other		8,238			2,971
				371,560			(323,587	)
Cash Flows — Investing Activities
	Increase in Residential Mortgage Loans Held for Investment			(1,010,615	)		(574,669	)
	Increase in Investment and Advances to Centex Development Company, L.P. and Joint Ventures			(8,022	)		(32,588	)
	Decrease in Investment and Advances to Unconsolidated Subsidiaries			—			—
	Purchases of Property and Equipment, net			(21,474	)		(48,083	)
	Discontinued Operations			(7,808	)		(831	)
	Harwood Street Funding I, LLC Cash Consolidated			18,000			—
				(1,029,919	)		(656,171	)
Cash Flows — Financing Activities
	Increase in Short-Term Debt, net			(426,394	)		532,896
	Centex
		Issuance of Long-Term Debt		7,193			255,638
		Repayment of Long-Term Debt		(58,437	)		(107,582	)
	Financial Services
		Issuance of Long-Term Debt		3,292,866			620,723
		Repayment of Long-Term Debt		(2,546,765	)		(454,946	)
	Proceeds from Stock Option Exercises			48,756			9,439
	Treasury Stock, net			(34,184	)		(28,936	)
	Dividends Paid			(4,940	)		(4,887	)
				278,095			822,345
Net Decrease in Cash and Cash Equivalents				(380,264	)		(157,413	)
Cash and Cash Equivalents at Beginning of Period				469,778			218,869
Cash and Cash Equivalents at End of Period			$	89,514		$	61,456

See Notes to Consolidated Financial Statements.

5

Centex Corporation and Subsidiaries
Statements of Consolidated Cash Flows with Consolidating Details
(Dollars in thousands)
(unaudited)

Centex *						Financial Services
For the Six Months Ended September 30,						For the Six Months Ended September 30,
2003			2002			2003			2002
$	328,919		$	203,364		$	75,395		$	67,128
	—			—			13,260			—
	48,744			38,682			8,650			8,370
	—			—			34,894			13,556
	(7,405	)		29,118			(6,326	)		(9,963	)
	(18,276	)		(3,202	)		—			—
	(75,395	)		(67,128	)		—			—
	11,321			11,562			—			—
	(26,218	)		(880	)		(84,782	)		(20,120	)
	(76,648	)		(51,035	)		(14,929	)		(38,180	)
	—			—			765,815			40,198
	(660,851	)		(582,832	)		—			—
	6,946			1,118			(1,316	)		18
	(37,883	)		(39,306	)		27,152			52,684
	30,300			12,850			5,334			(2,700	)
	—			—			(7,138	)		(69,067	)
	8,197			3,159			41			(188	)
	(468,249	)		(444,530	)		816,050			41,736
	—			—			(1,010,615	)		(574,669	)
	(8,022	)		(32,588	)		—			—
	23,759			110,322			—			—
	(14,017	)		(47,154	)		(7,457	)		(7,044	)
	(7,808	)		(831	)		—			—
	—			—			18,000			—
	(6,088	)		29,749			(1,000,072	)		(581,713	)
	139,750			137,992			(566,144	)		394,904
	7,193			255,638			—			—
	(58,437	)		(107,582	)		—			—
	—			—			3,292,866			620,723
	—			—			(2,546,765	)		(454,946	)
	48,756			9,439			—			—
	(34,184	)		(28,936	)		—			—
	(4,940	)		(4,887	)		—			(25,000	)
	98,138			261,664			179,957			535,681
	(376,199	)		(153,117	)		(4,065	)		(4,296	)
	454,696			191,744			15,082			27,125
$	78,497		$	38,627		$	11,017		$	22,829

* In the supplemental data presented above, “Centex” represents the consolidation of all subsidiaries other than those included in Financial Services. Transactions between Centex and Financial Services have been eliminated from the Centex Corporation and Subsidiaries statements of cash flows.

6

Centex Corporation and Subsidiaries
Notes to Consolidated Financial Statements
September 30, 2003
(Dollars and shares in thousands, except per share data)
(unaudited)

(A) BASIS OF PRESENTATION

     The consolidated interim financial statements include the accounts of Centex Corporation and subsidiaries (the “Company”) after elimination of all significant intercompany balances and transactions. The statements have been prepared, without audit, in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted.

     In the opinion of the Company, all adjustments (consisting of normal, recurring adjustments) necessary to present fairly the information in the consolidated financial statements of the Company have been included. The results of operations for such interim periods are not necessarily indicative of results for the full year. The Company suggests that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes to consolidated financial statements included in the Company’s latest Annual Report on Form 10-K.

(B) STATEMENTS OF CONSOLIDATED CASH FLOWS — SUPPLEMENTAL DISCLOSURES

     The following table provides supplemental disclosures related to the Statements of Consolidated Cash Flows:

	For the Three Months				For the Six Months
	Ended September 30,				Ended September 30,
	2003		2002		2003		2002
Cash Paid for Interest	$	100,202	$	87,978	$	171,393	$	155,696
Net Cash Paid for Taxes	$	125,706	$	45,151	$	171,868	$	82,282

     Interest expense relating to the Financial Services segment is included in Financial Services’ costs and expenses. The Company capitalizes a portion of interest incurred as a component of housing projects’ inventory cost. The relief of capitalized interest is included in Home Building’s costs and expenses. Capitalized interest relieved was $14.7 million and $10.5 million for the three months ended September 30, 2003 and 2002, respectively, and $27.9 million and $18.8 million for the six months ended September 30, 2003 and 2002, respectively. Interest expense related to segments other than Financial Services and Home Building is included as a separate line item in the Statements of Consolidated Earnings.

7

		For the Three Months						For the Six Months
		Ended September 30,						Ended September 30,
		2003			2002			2003			2002
Total Interest Incurred		$	95,551		$	80,663		$	183,858		$	159,195
Less — Interest Capitalized			(20,204	)		(18,447	)		(40,519	)		(36,998	)
	Financial Services Interest Expense		(57,944	)		(45,687	)		(108,972	)		(90,334	)
Interest Expense, net		$	17,403		$	16,529		$	34,367		$	31,863

     Effective July 1, 2003 the Company consolidated Harwood Street Funding I, LLC (“HSF-I”) pursuant to the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”). As of July 1, 2003, assets and liabilities consolidated were as follows:

Cash and Cash Equivalents	$	18,000
Residential Mortgage Loans Held for Sale		2,443,428
Other Assets		(36,100	)
Accounts Payable		20,910
Financial Services Debt		(2,459,498	)
Cumulative Effect of a Change in Accounting Principle	$	(13,260	)

(C) STOCK-BASED EMPLOYEE COMPENSATION ARRANGEMENTS

     On April 1, 2003, the Company adopted the fair value measurement provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”), under which the Company recognizes compensation expense of a stock option award to an employee over the vesting period based on the fair value of the award on the grant date. The fair value method has been applied only to awards granted or modified on or after April 1, 2003 (the prospective method), whereas awards granted prior to such date will continue to be accounted for in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB No. 25”), and related interpretations.

     In May 2003, the Company granted approximately 1.4 million options to employees. The fair value of such options is $35.1 million, as calculated under the Black-Scholes option-pricing model, which will be recognized as compensation expense over the vesting period. Compensation expense of $2.9 million and $5.8 million, respectively, related to these stock options was recognized during the three and six month periods ended September 30, 2003.

8

     The following pro forma information reflects the Company’s net earnings and earnings per share had compensation cost for all stock option plans and other equity-based compensation programs been determined based upon the fair value at the date of grant for awards outstanding during the three and six month periods ended September 30, 2003 and 2002, consistent with the provisions of SFAS No. 123.

		For the Three Months						For the Six Months
		Ended September 30,						Ended September 30,
		2003			2002			2003			2002
Net Earnings — as Reported		$	186,129		$	115,609		$	328,919		$	203,364
	Stock-Based Employee Compensation Included in Reported Net Income, net of Related Tax Effects		3,612			1,058			7,197			2,115
	Total Stock-Based Employee Compensation Expense Determined Under Fair Value Based Method, net of Related Tax Effects		(8,151	)		(6,559	)		(16,340	)		(13,355	)
Pro Forma Net Earnings		$	181,590		$	110,108		$	319,776		$	192,124
Earnings Per Share:
	Basic — as Reported	$	3.02		$	1.90		$	5.35		$	3.33
	Basic — Pro Forma	$	2.94		$	1.81		$	5.20		$	3.15
	Diluted — as Reported	$	2.88		$	1.83		$	5.12		$	3.21
	Diluted — Pro Forma	$	2.81		$	1.76		$	4.97		$	3.03

(D) STOCKHOLDERS’ EQUITY

     A summary of changes in stockholders’ equity is presented below:

										Unamortized									Accumulated
			Common Stock					Capital in		Value of						Treasury			Other
								Excess of		Deferred			Retained			Stock			Comprehensive
			Shares			Amount		Par Value		Compensation			Earnings			at Cost			(Loss) Income			Total
Balance, March 31, 2003				60,836		$	15,483	$	98,711	$	(2,398	)	$	2,597,078		$	(45,037	)	$	(5,991	)	$	2,657,846
	Issuance of Stock Compensation			64			16		32,038		(32,054	)		—			—			—			—
	Stock Compensation Expense			—			—		5,799		5,279			—			—			—			11,078
	Exercise of Stock, Options, Including Tax Benefits			775			194		35,192		—			—			—			—			35,386
	Cash Dividends			—			—		—		—			(4,940	)		—			—			(4,940	)
	Purchases of Common Stock for Treasury			(493	)		—		—		—			—			(36,469	)		—			(36,469	)
	Exercise of Convertible Debenture			400			100		2,000		—			—			—			—			2,100
	Cavco Spin-off			—			—		—		—			(92,960	)		—			—			(92,960	)
	Net Earnings			—			—		—		—			328,919			—			—			328,919
		Unrealized Gain on Hedging Instruments		—			—		—		—			—			—			3,171			3,171
		Foreign Currency Translation Adjustments		—			—		—		—			—			—			13,279			13,279
		Other Comprehensive Income Items		—			—		—		—			—			—			6			6
Balance, September 30, 2003				61,582		$	15,793	$	173,740	$	(29,173	)	$	2,828,097		$	(81,506	)	$	10,465		$	2,917,416

9

(E) RESIDENTIAL MORTGAGE LOANS HELD FOR INVESTMENT

     Residential mortgage loans held for investment by Centex Home Equity Company, LLC, including real estate owned, consisted of the following:

	September 30, 2003			March 31, 2003
Residential Mortgage Loans Held for Investment	$	5,660,923		$	4,671,210
Allowance for Losses on Residential Mortgage Loans Held for Investment		(42,376	)		(28,384	)
Residential Mortgage Loans Held for Investment, net of Allowance for Losses	$	5,618,547		$	4,642,826

     Changes in the allowance for losses on residential mortgage loans held for investment were as follows:

		For the Three Months						For the Six Months
		Ended September 30,						Ended September 30,
		2003			2002			2003			2002
Balance at Beginning of Period		$	34,061		$	17,320		$	28,384		$	14,106
	Provision for Losses		19,132			7,670			34,894			13,556
	Recoveries on Loans Charged Off		20			33			96			51
	Losses Sustained		(10,837	)		(3,880	)		(20,998	)		(6,570	)
Balance at End of Period		$	42,376		$	21,143		$	42,376		$	21,143

		September 30,
		2003			2002
Allowance as a Percentage of Gross Loans Held for Investment			0.75	%		0.55	%
Allowance as a Percentage of 90+ Days Contractual Delinquency			28.18	%		20.76	%
90+ Days Contractual Delinquency
	Total Dollars Delinquent	$	150,376		$	101,863
	% Delinquent		2.66	%		2.64	%

10

(F) GOODWILL

     A summary of changes in goodwill by segment for the six months ended September 30, 2003 is presented below:

	Home		Financial			Construction		Construction
	Building		Services			Products		Services		Other		Total
Balance as of March 31, 2003	$	123,011	$	17,055		$	40,290	$	1,007	$	123,417	$	304,780
Other, net		—		(453	)		—		—		630		177
Balance as of September 30, 2003	$	123,011	$	16,602		$	40,290	$	1,007	$	124,047	$	304,957

     Goodwill for the Other segment at September 30, 2003 includes $73.2 million related to the Company’s home services operations and $50.8 million related to the Company’s investment in Construction Products. Included in Assets of Discontinued Operations at March 31, 2003 is $67.3 million of goodwill related to manufactured housing.

(G) INDEBTEDNESS

Short-term Debt

     Balances of short-term debt were:

	September 30, 2003							March 31, 2003
					Financial								Financial
	Centex				Services			Centex					Services
Financial Institutions	$	—			$	949,752	(1)	$	25,257	(2)			$	283,146
Commercial Paper		165,000				—			—					—
Secured Liquidity Notes		—				1,552,831	(3)		—					559,083	(4)
Other		7				—			—					—
	$	165,007			$	2,502,583		$	25,257				$	842,229
Consolidated Short-term Debt			$	2,667,590							$	867,486

⁽¹⁾ Approximately $650 million relates to Harwood Street Funding I, LLC.

⁽²⁾ Debt relates entirely to Construction Products.

⁽³⁾ Debt relates to Harwood Street Funding I, LLC and Harwood Street Funding II, LLC.

⁽⁴⁾ Debt relates entirely to Harwood Street Funding II, LLC.

     The Company borrows on a short-term basis from banks under uncommitted lines that bear interest at prevailing market rates. The weighted-average interest rates of balances outstanding at September 30, 2003 and March 31, 2003 were 1.2% and 1.6%, respectively.

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Long-term Debt

     Balances of long-term debt (debt instruments with original maturities greater than one year) and weighted-average interest rates at September 30, 2003 and March 31, 2003 were:

			September 30, 2003				March 31, 2003
Centex
	Medium-term Note Programs, due through 2006		$	258,000	4.67	%	$	281,000	4.79	%
	Long-term Notes, due through 2012			1,508,224	7.05	%		1,508,116	7.05	%
	Other Indebtedness, due through 2008			63,509	2.76	%		91,919	2.81	%
	Subordinated Debt:
		Subordinated Debentures, due in 2005		99,918	7.38	%		99,894	7.38	%
		Subordinated Debentures, due in 2007		99,728	8.75	%		99,694	8.75	%
				2,029,379				2,080,623
Financial Services
	Centex Home Equity Company, LLC Asset-Backed Certificates, due through 2033			4,921,691	3.13	%		4,081,590	3.67	%
	Harwood Street Funding I, LLC Variable Rate Subordinated Extendable Certificates, due through 2006			139,000	3.27	%		—	—
	Harwood Street Funding II, LLC Variable Rate Subordinated Notes, due through 2008			75,000	3.25	%		75,000	3.38	%
				5,135,691				4,156,590
Total			$	7,165,070			$	6,237,213

     The weighted-average interest rates for long-term debt during the six months ended September 30, 2003 and 2002 were:

		For the Six Months
		Ended September 30,
		2003			2002
Centex
	Medium-term Note Programs		5.32	%		5.28	%
	Long-term Notes		7.04	%		8.08	%
	Other Indebtedness		2.50	%		3.41	%
	Subordinated Debentures		8.05	%		8.05	%
Financial Services
	Centex Home Equity Company, LLC Long-Term Debt(1)		3.69	%		4.79	%
	CTX Mortgage Company, LLC Long-Term Debt(2)		2.92	%		—

⁽¹⁾ Consists of Centex Home Equity Company, LLC Asset-Backed Certificates and Harwood Street Funding II, LLC Variable Rate Subordinated Notes.

⁽²⁾ Consists of Harwood Street Funding I, LLC Variable Rate Subordinated Extendable Certificates.

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     Maturities of Centex and Financial Services long-term debt during the next five years ending March 31 are:

			Financial
	Centex		Services		Total
2004	$	1,538	$	693,336	$	694,874
2005		32,593		1,340,026		1,372,619
2006		372,735		984,684		1,357,419
2007		290,448		1,036,595		1,327,043
2008		358,840		555,371		914,211
Thereafter		973,225		525,679		1,498,904
	$	2,029,379	$	5,135,691	$	7,165,070

     Financial Services long-term debt associated with Centex Home Equity Company, LLC related to securitized residential mortgage loans structured as collateralized borrowings includes Asset-Backed Certificates of $4.9 billion at September 30, 2003. The holders of such debt have no recourse for non-payment to Centex Home Equity Company, LLC (“Home Equity”) or Centex Corporation; however, Home Equity remains liable for customary loan representations. The principal and interest on these notes are paid from the liquidation of the underlying residential mortgage loans, which serve as collateral for the debt. Accordingly, the timing of the principal payments on these notes is dependent upon the payments received on the underlying residential mortgage loans. The expected maturities of this component of long-term debt are based on contractual maturities adjusted for projected repayments and prepayments of principal.

     Financial Services long-term debt associated with CTX Mortgage Company, LLC is comprised of Variable Rate Subordinated Extendable Certificates issued by HSF-I. HSF-I is a variable interest entity for which the Company is the primary beneficiary pursuant to FIN 46. Accordingly, HSF-I was consolidated in the Company’s financial statements beginning July 1, 2003. The amount outstanding related to these certificates was $139.0 million at September 30, 2003. The principal and interest on these certificates are paid from the liquidation of the underlying residential mortgage loans, which serve as collateral for the debt. The holders of this debt have no recourse for non-payment to CTX Mortgage Company, LLC or Centex Corporation and the consolidation of this debt does not change the Company’s credit profile or debt ratings.

     Under the Company’s debt covenants, Centex is required to maintain certain leverage and interest coverage ratios and a minimum tangible net worth. At September 30, 2003, the Company was in compliance with all of these covenants.

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Credit Facilities

     The Company’s existing credit facilities and available borrowing capacity as of September 30, 2003 are summarized below:

		Existing Credit		Available
		Facilities		Capacity
Centex
	Centex Corporation
	Multi-Bank Revolving Credit Facility	$	800,000	$	800,000	(1)
	Multi-Bank Revolving Letter of Credit Facility		250,000		129,283	(2)
	Construction Products Senior Revolving Credit Facility		155,000		118,317	(3)
			1,205,000		1,047,600
Financial Services
	Unsecured Credit Facility		125,000		71,100	(4)
	Secured Credit Facilities		715,000		468,987	(5)
	Harwood Street Funding I, LLC Facility		3,000,000		1,444,821
	Harwood Street Funding II, LLC Facility		1,500,000		638,669
			5,340,000		2,623,577
		$	6,545,000	$	3,671,177	(6)

⁽¹⁾ This is a committed, multi-bank revolving credit facility, maturing in August 2006, which serves as backup for commercial paper borrowings. As of September 30, 2003, there were no borrowings under this backup facility, and the Company’s $700 million commercial paper program had $165 million outstanding. There have been no borrowings under this facility since inception.

⁽²⁾ This is a committed, multi-bank revolving letter of credit facility, maturing in August 2004. Letters of credit issued under this facility may expire no later than August 2005.

⁽³⁾ This is a committed, senior revolving credit facility, maturing in March 2006. This facility was entered into by Construction Products and has no recourse to Centex Corporation.

⁽⁴⁾ Centex Corporation, CTX Mortgage Company, LLC (“CTX Mortgage”) and Home Equity, on a joint and several basis, share in a $125 million uncommitted, unsecured credit facility.

⁽⁵⁾ CTX Mortgage and Home Equity share in a $550 million committed secured credit facility to finance mortgage inventory. Effective October 2003, this facility and available capacity were reduced to $250 million. CTX Mortgage also maintains $155 million of committed secured mortgage warehouse facilities to finance mortgages. Home Equity also maintains a $10 million committed secured mortgage warehouse facility to finance mortgages.

⁽⁶⁾ The amount of available borrowing capacity includes $3.6 billion of committed borrowings and $71.1 million of uncommitted borrowings as of September 30, 2003. Although the Company believes that the uncommitted capacity is currently available, there can be no assurance that the lenders under this facility would elect to make advances to the Company or its subsidiaries if and when requested to do so.

CTX Mortgage Company, LLC and Harwood Street Funding I, LLC

     CTX Mortgage finances its inventory of mortgage loans held for sale principally through sales of conforming and Jumbo “A” loans to HSF-I, pursuant to a mortgage loan purchase agreement (the “HSF-I Purchase Agreement”). Since 1999, CTX Mortgage has sold substantially all of the conforming and Jumbo “A” mortgage loans that it originates to HSF-I in accordance with the HSF-I Purchase Agreement. When HSF-I acquires these loans, it typically holds them for a period averaging between 45 and 60 days and then resells them into the secondary market. HSF-I obtains the funds needed to purchase eligible mortgage loans

14

from CTX Mortgage by issuing (1) short-term secured liquidity notes that are currently rated A1+ by Standard & Poor’s (“S & P”) and P-1 by Moody’s Investors Service (“Moody’s”), (2) medium-term debt that is currently rated A1+ by S&P and P-1 by Moody’s and (3) subordinated certificates maturing in September 2004, November 2005 and June 2006, extendable for up to five years, that are currently rated BBB by S&P and Baa2 by Moody’s. Under the terms of the HSF-I Purchase Agreement, CTX Mortgage may elect to sell to HSF-I, and HSF-I is obligated to purchase from CTX Mortgage, mortgage loans that satisfy certain eligibility criteria and portfolio requirements. At September 30, 2003, the maximum amount of mortgage loans that HSF-I is allowed to carry in its inventory under the HSF-I Purchase Agreement is limited to $3.0 billion. This arrangement provides CTX Mortgage with reduced financing cost for eligible mortgage loans it originates and improves its liquidity.

     In January 2003, the FASB issued FIN 46, which modified the accounting for certain entities in which (1) equity investors do not have a controlling financial interest and/or (2) the entity is unable to finance its activities without additional subordinated financial support from other parties. Pursuant to FIN 46, HSF-I is a variable interest entity for which the Company is the primary beneficiary. Accordingly, HSF-I was consolidated in the Company’s financial statements beginning July 1, 2003. Prior to the implementation of FIN 46, HSF-I was not consolidated in the Company’s financial statements. As a result of the consolidation of HSF-I, the Company recorded a cumulative effect of a change in accounting principle of $13.3 million, net of tax, in the quarter ended September 30, 2003. This cumulative effect of a change in accounting principle primarily represents the deferral of servicing released premium income offset to a lesser extent by the deferral of certain loan origination costs, which will be recognized as loans are sold into the secondary market. The consolidation of HSF-I resulted in an increase in the Company’s residential mortgage loans held for sale with a corresponding increase in the Company’s debt of approximately $1.6 billion at September 30, 2003. In addition, interest income and interest expense of HSF-I subsequent to June 30, 2003, are reflected in the Company’s financial statements. HSF-I’s debt does not have recourse to the Company, and the consolidation of this debt did not change the Company’s credit profile or debt ratings. Because HSF-I is a consolidated entity as of July 1, 2003, all transactions between the Company and HSF-I subsequent to June 30, 2003 are eliminated in consolidation.

     HSF-I’s commitment to purchase eligible mortgage loans continues in effect until the occurrence of certain termination events described in the HSF-I Purchase Agreement. These termination events primarily relate to events of default under, or other failure to comply with, the provisions, including loan portfolio limitations, of the agreements that govern the mortgage loan warehouse program but also include a downgrade in Centex Corporation’s credit ratings below BB+ by S&P or Ba1 by Moody’s. In the event CTX Mortgage was unable to sell loans to HSF-I, it would draw on existing credit facilities currently held in addition to HSF-I. In addition, it would need to make other customary financing arrangements to fund its mortgage loan origination activities. Although the Company believes that CTX Mortgage could arrange for alternative financing that is common for non-investment grade mortgage companies, there can be no assurance that such financing would be available on satisfactory terms, and any delay in obtaining such financing could adversely affect the results of operations of CTX Mortgage.

     In accordance with the HSF-I Purchase Agreement, CTX Mortgage acts as servicer of the loans owned by HSF-I and arranges for the sale of the eligible mortgage loans into the secondary market. In its capacity as servicer, CTX Mortgage must act in the best interest of HSF-I so as to maximize the proceeds of sales of eligible mortgage loans. The performance of obligations of CTX Mortgage, in its capacity as servicer, is guaranteed by Centex. These servicer obligations include repurchasing a mortgage loan from HSF-I in the event of a breach of CTX Mortgage’s representations and warranties as the seller of the mortgage loans, if such breach materially and adversely affects the value of the mortgage loan and is not cured within 60 days.

15

     HSF-I has entered into a swap arrangement with a bank (the “Harwood Swap”) under which the bank has agreed to make certain payments to HSF-I, and HSF-I has agreed to make certain payments to the bank, the net effect of which is that the bank has agreed to bear certain interest rate risks, non-credit related market risks and prepayment risks related to the mortgage loans held by HSF-I. The purpose of this arrangement is to provide credit enhancement to HSF-I by permitting it to hedge these risks with a counterparty having a short-term credit rating of A1+ from S&P and P1 from Moody’s. Additionally, the Company has entered into a separate swap arrangement with the bank pursuant to which the Company has agreed to pay to the bank all amounts that the bank is required to pay to HSF-I pursuant to the Harwood Swap plus a monthly fee equal to a percentage of the notional amount of the Harwood Swap, and the bank is required to pay to the Company all amounts that the bank receives from HSF-I pursuant to the Harwood Swap. Accordingly, the Company effectively bears all interest rate risks, non-credit related market risks and prepayment risks that are the subject of the Harwood Swap. See additional discussion of interest rate risks in Note (N), “Derivatives and Hedging.” Financial Services executes the forward sales of CTX Mortgage’s loans to hedge the risk of reductions in value of mortgages sold to HSF-I or maintained under secured financing agreements. This offsets most of the Company’s risk as the counterparty to the swap supporting the payment requirements of HSF-I. The Company is also required to reimburse the bank for certain expenses, costs and damages that it may incur. As noted above, because HSF-I is a consolidated entity as of July 1, 2003, all transactions between the Company and HSF-I subsequent to June 30, 2003, including those related to the Harwood Swap, are eliminated in consolidation.

     The Company does not guarantee the payment of any debt or subordinated extendable certificates of HSF-I and is not liable for credit losses relating to securitized residential mortgage loans sold to HSF-I. However, the Company retains certain risks related to the portfolio of mortgage loans held by HSF-I. In particular, CTX Mortgage makes representations and warranties to HSF-I to the effect that each mortgage loan sold to HSF-I satisfies the eligibility criteria and portfolio requirements discussed above. CTX Mortgage may be required to repurchase mortgage loans sold to HSF-I if such mortgage loans are determined to be ineligible loans or there occur certain other breaches of representations and warranties of CTX Mortgage, as seller or servicer. CTX Mortgage’s obligation to repurchase such loans is guaranteed by Centex Corporation. CTX Mortgage records a liability for its estimated losses for these obligations and such amount is included in its loan origination reserve. CTX Mortgage Company, LLC and HSF-I together sold $5.16 billion and $9.59 billion of mortgage loans to investors during the three and six months ended September 30, 2003, respectively. CTX Mortgage Company, LLC sold $3.39 billion and $5.91 billion of mortgage loans to HSF-I and other investors during the three and six months ended September 30, 2002, respectively. CTX Mortgage recognized gains on the sale of mortgage loans of $70.1 million and $69.6 million for the three months ended September 30, 2003 and 2002, respectively. For the six months ended September 30, 2003 and 2002, gains on the sale of mortgage loans were $157.3 million and $121.5 million, respectively.

Centex Home Equity Company, LLC and Harwood Street Funding II, LLC

     Home Equity finances its inventory of mortgage loans held for investment through Harwood Street Funding II, LLC (“HSF-II”), a wholly-owned, consolidated entity, under a revolving sales agreement that expires upon final payment of the senior and subordinated debt issued by HSF-II. This arrangement, where HSF-II has committed to finance all eligible loans, gives Home Equity daily access to HSF-II’s borrowing capacity of $1.5 billion. HSF-II obtains funds through the sale of subordinated notes that are currently rated BBB by S&P, Baa2 by Moody’s and BBB by Fitch Ratings (“Fitch”) and short-term secured liquidity notes that are currently rated A1+ by S&P, P1 by Moody’s and F1+ by Fitch. Because HSF-II is a consolidated entity, the debt, interest income and interest expense of HSF-II are reflected in the financial statements of Financial Services.

16

(H) CENTEX DEVELOPMENT COMPANY, L.P.

     Centex Development Company, L.P. (the “Partnership”) is a master limited partnership formed by the Company in March 1987 to broaden the range of business activities that may be conducted for the benefit of the Company’s stockholders to include general real estate development. The Company believed that this expansion would improve stockholder value through longer-term real estate investments, real estate developments and the benefits of the partnership form of business.

     The Partnership is authorized to issue three classes of limited partnership interest. The Company indirectly holds 100% of the Partnership’s Class A and Class C limited partnership units (“Class A Units” and “Class C Units,” respectively), which are collectively convertible into 20% of the Partnership’s Class B limited partnership units (“Class B Units”). The Partnership may issue additional Class C Units in connection with the acquisition of real property and other assets. No Class B Units have been issued. However, the stockholders of Centex Corporation hold warrants to purchase approximately 80% of the Class B Units. The warrants are held through a nominee arrangement and trade in tandem with the common stock of Centex Corporation.

     As holder of the Class A and Class C Units, the Company is entitled to a cumulative preferred return of 9% per annum on the average outstanding balance of its capital contributions to the Partnership, adjusted for cash and other distributions representing return of capital. As of September 30, 2003, these adjusted capital contributions, or Unrecovered Capital, were $243.9 million and preference payments in arrears totaled $52.9 million.

     The Partnership is managed by its general partner, 3333 Development Corporation, a wholly-owned subsidiary of 3333 Holding Corporation (“Holding”). The common stock of Holding is held by the stockholders of Centex Corporation through a nominee arrangement and trades with the common stock of Centex Corporation. The stockholders of Centex Corporation elect the four-person board of directors of Holding, three of whom are independent outside directors who are not directors, affiliates or employees of the Company. Thus, through Holding, the stockholders of Centex Corporation control the general partner of the Partnership. The general partner, through its independent board and the independent board of Holding, including its non-executive Chairman, oversees the Partnership’s activities, including the acquisition, development, maintenance, operation and sale of properties. Consent of the limited partners for the activities of the Partnership is not required, and the limited partners cannot remove the general partner. As a result, at September 30, 2003, the Company accounts for its limited partnership interest in the Partnership using the equity method of accounting for investments. The Company’s accounting for its investment in the Partnership may be impacted by FIN 46. Management is in the process of evaluating the applicability of FIN 46 and the related accounting for this investment.

     Supplementary condensed combined financial statements for Centex Corporation and subsidiaries, Holding and subsidiary and the Partnership and subsidiaries are set forth below. For additional information on Holding and subsidiary and the Partnership and subsidiaries, see their separate financial statements and related footnotes included elsewhere in this Report.

17

Supplementary Condensed Combined Balance Sheets of Centex Corporation and Subsidiaries, Holding and Subsidiary and Partnership and Subsidiaries

		September 30,		March 31,
		2003		2003
Assets
	Cash and Cash Equivalents	$	113,101	$	474,891
	Restricted Cash		290,618		172,321
	Receivables		8,355,063		5,633,905
	Inventories		4,945,739		3,982,880
	Investments in Joint Ventures and Other		136,910		106,250
	Assets Held for Sale and Discontinued Operations		7,765		165,860
	Property and Equipment, net		668,205		683,473
	Other Assets		714,944		750,585
		$	15,232,345	$	11,970,165
Liabilities and Stockholders’ Equity
	Accounts Payable and Accrued Liabilities	$	1,815,116	$	1,794,261
	Liabilities Related to Assets Held for Sale and Discontinued Operations		1,113		65,643
	Short-term Debt		2,860,074		1,027,182
	Long-term Debt		7,182,499		6,255,016
	Minority Stockholders’ Interest		456,127		170,217
	Stockholders’ Equity		2,917,416		2,657,846
		$	15,232,345	$	11,970,165

Supplementary Condensed Combined Statements of Earnings of Centex Corporation and Subsidiaries, Holding and Subsidiary and Partnership and Subsidiaries

	For the Six Months
	Ended September 30,
	2003			2002
Revenues	$	5,089,361		$	4,017,111
Costs and Expenses		4,592,140			3,729,340
Earnings from Unconsolidated Entities		737			30
Earnings Before Income Taxes		497,958			287,801
Income Taxes		165,240			86,814
Earnings from Continuing Operations		332,718			200,987
Earnings from Discontinued Operations		9,461			2,377
Earnings Before Cumulative Effect of a Change in Accounting Principle		342,179			203,364
Cumulative Effect of a Change in Accounting Principle		(13,260	)		—
Net Earnings		328,919			203,364
Other Comprehensive Income		16,456			4,228
Comprehensive Income	$	345,375		$	207,592

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(I) COMMITMENTS AND CONTINGENCIES

     The Company conducts a portion of its land acquisition, development and other activities through its participation in joint ventures in which the Company holds less than a majority interest. These joint ventures are typically large in nature, and partnering with other developers allows Centex Homes to share the risks and rewards of ownership while providing for efficient asset utilization. The Company’s investment in these non-consolidated joint ventures was $132.9 million and $102.3 million at September 30, 2003 and March 31, 2003, respectively. These joint ventures had total outstanding secured construction debt of approximately $231.1 million and $232.5 million at September 30, 2003 and March 31, 2003, respectively. The Company’s maximum potential liability with respect to this debt, based on its ownership percentage of the related joint ventures, is approximately $58.8 million and $56.4 million at September 30, 2003 and March 31, 2003, respectively. Under the structure of this debt, the Company becomes liable up to these amounts only to the extent that the construction debt exceeds a certain percentage of the value of the project. At September 30, 2003 and March 31, 2003, the Company was not liable for any of this debt. The Company believes that these joint ventures are not variable interest entities for purposes of FIN 46; therefore, management does not believe that FIN 46 will have a material impact on the Company’s accounting for these investments.

     In the normal course of its business, the Company issues certain representations, warranties and guarantees related to its home sales, land sales, building sales, commercial construction and mortgage loan originations. The Company believes that it has established the necessary accruals for these representations, warranties and guarantees. See further discussion of our warranty liability below.

     Centex Homes offers a ten-year limited warranty for most homes constructed and sold in the United States. The warranty covers defects in materials or workmanship in the first year of the home and certain designated components or structural elements of the home in the second through tenth years. In California, effective January 1, 2003, Centex Homes began following the statutory provisions of Senate Bill 800, which, in part, provide a statutory warranty to customers and a statutory dispute resolution process. Centex Homes estimates the costs that may be incurred under its warranty program for which it will be responsible and records a liability at the time each home is closed. Factors that affect Centex Homes’ warranty liability include the number of homes closed, historical and anticipated rates of warranty claims and cost per claim. Centex Homes periodically assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary.

     Changes in Centex Homes’ contractual warranty liability during the six months ended September 30, 2003 are as follows:

	For the Three Months			For the Six Months
	Ended September 30, 2003			Ended September 30, 2003
Balance at Beginning of Period	$	16,133		$	16,125
Warranties Issued		4,109			8,003
Settlements Made		(4,865	)		(9,202	)
Changes in Liability of Pre-Existing Warranties, Including Expirations		165			616
Balance at End of Period	$	15,542		$	15,542

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     CTX Mortgage has established a liability for anticipated losses associated with loans originated. Changes in CTX Mortgage’s mortgage loan origination reserve for the three and six months ended September 30, 2003 are as follows:

	For the Three Months			For the Six Months
	Ended September 30, 2003			Ended September 30, 2003
Balance at Beginning of Period	$	29,177		$	28,594
Provision for Losses		900			1,837
Settlements		(994	)		(1,348	)
Balance at End of Period	$	29,083		$	29,083

(J) LAND HELD UNDER OPTION AGREEMENTS NOT OWNED AND OTHER LAND DEPOSITS

     In order to ensure the future availability of land for homebuilding, the Company enters into lot option purchase agreements with unaffiliated third parties and with the Partnership, as discussed in Note (O), “Related Party Transactions,” below. Under the option agreements, the Company pays a stated deposit in consideration for the right to purchase land at a future time, usually at predetermined prices. These options, which do not contain performance requirements from the Company nor obligate the Company to purchase the land, expire at various dates through the year 2010.

     The Company has evaluated lot option agreements entered into after January 31, 2003 under the provisions of FIN 46. The Company does not have legal title to the optioned land; however, under FIN 46, if the option agreements are entered into with entities that qualify as variable interest entities and if the Company qualifies as the primary beneficiary of those entities, the Company must consolidate such entities. The Company has determined that it is the primary beneficiary of several such agreements at September 30, 2003. As a result, the Company recorded $268.3 million of land as inventory under the caption Land Held Under Option Agreements Not Owned, with a corresponding increase to Minority Interests. In addition, the Company reclassified $28.3 million of deposits related to these options, previously included in Land Held for Development and Sale, to Land Held Under Option Agreements Not Owned.

     The Company also has option agreements entered into before February 1, 2003. These agreements must be evaluated for consolidation under FIN 46 as of December 31, 2003. Management is in the process of determining the impact of FIN 46 on these lot option agreements on the Company’s results of operations and financial position.

     At September 30, 2003, the Company had deposited or invested with third parties $70.5 million (excluding the $28.3 million of deposits discussed above) related to lot option agreements. The lot option agreements related to these deposits had a total remaining purchase price of approximately $2.8 billion.

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(K) COMPREHENSIVE INCOME

     A summary of comprehensive income for the three and six months ended September 30, 2003 and 2002 is presented below:

		For the Three Months					For the Six Months
		Ended September 30,					Ended September 30,
		2003		2002			2003		2002
Net Earnings		$	186,129	$	115,609		$	328,919	$	203,364
Other Comprehensive Income (Loss), net of Tax:
	Unrealized Gain (Loss) on Hedging Instruments		4,423		(4,991	)		3,171		(11,942	)
	Foreign Currency Translation Adjustments		2,559		3,632			13,279		17,608
	Other		4		(504	)		6		(1,438	)
Comprehensive Income		$	193,115	$	113,746		$	345,375	$	207,592

     The foreign currency translation adjustments are primarily the result of Centex’s investment in the Partnership. For additional information on the Partnership and subsidiaries, see their separate financial statements included elsewhere in the Report. The unrealized gain or loss on hedging instruments represents the deferral in other comprehensive income of the unrealized gain or loss on swap agreements designated as cash flow hedges. The accounting for interest rate swaps and other derivative financial instruments is discussed in detail in Note (N), “Derivatives and Hedging.”

(L) BUSINESS SEGMENTS

     The Company operates in five principal business segments: Home Building, Financial Services, Construction Products, Construction Services and Investment Real Estate. These segments operate primarily in the United States, and their markets are nationwide. Revenues from any one customer are not significant to the Company.

     Intersegment revenues and investments in joint ventures are not material and are not shown in the following tables. The investment in the Partnership (approximately $298.4 million as of September 30, 2003) is included in the Investment Real Estate segment.

Home Building

     Home Building’s operations involve the purchase and development of land or lots and the construction and sale of detached and attached single-family homes.

Financial Services

     Financial Services’ mortgage operations consist primarily of home financing, sub-prime home equity lending and the sale of title insurance and other various insurance coverages. These activities include mortgage origination, servicing and other related services for homes sold by the Company’s subsidiaries and others. Financial Services’ revenues include interest income of $139.8 million and $85.6 million for the three months and $246.5 million and $166.4 million for the six months ended September 30, 2003 and 2002,

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respectively. Substantially all of the Company’s interest income in each year is earned by the Financial Services segment. Financial Services’ cost of sales is comprised of interest expense related to debt issued to fund its home financing and sub-prime home equity lending activities.

Construction Products

     Construction Products’ operations involve the manufacture, production, distribution and sale of cement, gypsum wallboard, recycled paperboard, aggregates and readymix concrete. The Company owned 64.6% of Centex Construction Products, Inc. at September 30, 2003 and 65.2% at September 30, 2002. Construction Products’ results are shown before minority interest in the tables presented below.

     On July 21, 2003, the Company announced the planned tax-free spin-off of its entire equity interest in Centex Construction Products, Inc. The spin-off is contingent upon approval by the Centex Construction Products, Inc. shareholders, approval by the Internal Revenue Service of the tax-free nature of the spin-off and other conditions. The Company anticipates that the spin-off will be concluded in early 2004.

Construction Services

     Construction Services’ operations involve the construction of buildings for both private and government interests including office, commercial and industrial buildings, hospitals, hotels, correctional facilities, educational institutions, museums, libraries, airport facilities and sports facilities. As this segment generates positive cash flow, intercompany interest income (credited at the prime rate in effect) of $1.0 million and $1.2 million for the three months and $2.4 million and $2.8 million for the six months ended September 30, 2003 and 2002, respectively, is included in management’s evaluation of this segment. However, the intercompany interest income is eliminated in consolidation and excluded from the tables presented below.

Investment Real Estate

     Investment Real Estate’s operations involve the acquisition, development and sale of land, primarily for industrial, office, multi-family, retail, residential and mixed-use projects. Under the equity method of accounting for investments, Investment Real Estate also records as earnings from unconsolidated entities any income or loss from its investment in the Partnership, including the International Home Building business located in the United Kingdom. It is not currently anticipated that any significant capital will be allocated to Investment Real Estate for new business development. Through its investment in the Partnership, Investment Real Estate will focus on the International Home Building operations and evaluate opportunistic real estate transactions.

Other

     The Company’s Other segment includes Corporate general and administrative expenses, interest expense and minority interest. Also included in the Other segment are the Company’s home services operations, which are not material for purposes of segment reporting. In June 2003, the Company spun off substantially all of its manufactured housing operations, which had previously been included in the Other segment. All remaining manufactured housing operations and related assets are reflected as a discontinued operation and not included in the segment information below. Earnings related to the operations that were spun off have been reclassified to discontinued operations.

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     The following are included in Other in the tables below (dollars in millions):

	For the Three Months						For the Six Months
	Ended September 30,						Ended September 30,
	2003			2002			2003			2002
Operating Loss from Home Services	$	(1.1	)	$	(1.0	)	$	(2.4	)	$	(2.6	)
Corporate General and Administrative Expenses		(22.5	)		(14.4	)		(41.7	)		(27.1	)
Interest Expense		(17.4	)		(16.5	)		(34.4	)		(31.9	)
Minority Interest		(10.1	)		(8.5	)		(17.6	)		(17.4	)
Other		0.3			(0.2	)		—			(0.8	)
	$	(50.8	)	$	(40.6	)	$	(96.1	)	$	(79.8	)

	For the Three Months Ended September 30, 2003
	(Dollars in millions)
	Home			Financial			Construction			Construction			Investment
	Building			Services			Products			Services			Real Estate			Other			Total
Revenues	$	1,709.1		$	290.6		$	154.8		$	386.6		$	22.7		$	19.3		$	2,583.1
Cost of Sales		(1,259.8	)		(57.9	)		(122.8	)		(366.7	)		(0.1	)		(9.4	)		(1,816.7	)
Selling, General and Administrative Expenses		(244.9	)		(156.2	)		(2.4	)+		(15.3	)		(3.9	)		(60.7	)		(483.4	)
Earnings from Unconsolidated Entities		1.4			—			—			—			13.7			—			15.1
Earnings (Loss) from Continuing Operations Before Income Tax	$	205.8		$	76.5		$	29.6	*	$	4.6		$	32.4		$	(50.8	)	$	298.1

+ Represents Construction Products’ Corporate general and administrative expenses. General and administrative expenses related to Construction Products’ operating units of $6.5 million are classified as Cost of Sales.

* Before Minority Interest

	For the Three Months Ended September 30, 2002
	(Dollars in millions)
	Home			Financial			Construction			Construction			Investment
	Building			Services			Products			Services			Real Estate			Other			Total
Revenues	$	1,282.3		$	204.8		$	136.0		$	391.7		$	3.0		$	26.3		$	2,044.1
Cost of Sales		(960.8	)		(45.7	)		(107.9	)		(366.2	)		0.4			(10.3	)		(1,490.5	)
Selling, General and Administrative Expenses		(194.1	)		(122.5	)		(1.4	)+		(16.3	)		(1.9	)		(56.6	)		(392.8	)
Earnings (Loss) from Unconsolidated Entities		(0.8	)		—			—			—			4.4			—			3.6
Earnings (Loss) from Continuing Operations Before Income Tax	$	126.6		$	36.6		$	26.7	*	$	9.2		$	5.9		$	(40.6	)	$	164.4

+ Represents Construction Products’ Corporate general and administrative expenses. General and administrative expenses related to Construction Products’ operating units of $6.5 million are classified as Cost of Sales.

* Before Minority Interest

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	For the Six Months Ended September 30, 2003
	(Dollars in millions)
	Home			Financial			Construction			Construction			Investment
	Building			Services			Products			Services			Real Estate			Other			Total
Revenues	$	3,213.6		$	557.4		$	298.9		$	762.4		$	25.4		$	42.1		$	4,899.8
Cost of Sales		(2,387.2	)		(109.0	)		(242.5	)		(723.5	)		(1.0	)		(18.8	)		(3,482.0	)
Selling, General and Administrative Expenses		(466.6	)		(306.3	)		(3.9	)+		(29.7	)		(4.9	)		(119.4	)		(930.8	)
Earnings from Unconsolidated Entities		2.6			—			—			—			17.6			—			20.2
Earnings (Loss) from Continuing Operations Before Income Tax	$	362.4		$	142.1		$	52.5	*	$	9.2		$	37.1		$	(96.1	)	$	507.2

+ Represents Construction Products’ Corporate general and administrative expenses. General and administrative expenses related to Construction Products’ operating units of $13.0 million are classified as Cost of Sales.

* Before Minority Interest

	For the Six Months Ended September 30, 2002
	(Dollars in millions)
	Home			Financial			Construction			Construction			Investment
	Building			Services			Products			Services			Real Estate			Other			Total
Revenues	$	2,387.8		$	385.4		$	264.8		$	752.5		$	9.6		$	55.4		$	3,855.5
Cost of Sales		(1,784.4	)		(90.3	)		(207.5	)		(701.6	)		—			(21.8	)		(2,805.6	)
Selling, General and Administrative Expenses		(375.9	)		(234.2	)		(2.8	)+		(33.6	)		(4.0	)		(113.4	)		(763.9	)
Earnings (Loss) from Unconsolidated Entities		(0.6	)		—			—			—			3.7			—			3.1
Earnings (Loss) from Continuing Operations Before Income Tax	$	226.9		$	60.9		$	54.5	*	$	17.3		$	9.3		$	(79.8	)	$	289.1

+ Represents Construction Products’ Corporate general and administrative expenses. General and administrative expenses related to Construction Products’ operating units of $12.5 million are classified as Cost of Sales.

* Before Minority Interest

(M) INCOME TAXES

     Income tax expense, excluding taxes related to cumulative effect of a change in accounting principle, for the Company increased from $49.4 million to $98.5 million and the effective tax rate increased from approximately 30.0% to 33.0% for the three months ended September 30, 2002 and 2003, respectively. Income tax expense, excluding taxes related to cumulative effect of a change in accounting principle, also increased from $86.8 million to $165.2 million and the effective tax rate increased from approximately 30.0% to 32.6% for the six months ended September 30, 2002 and 2003, respectively. The increase in the effective tax rate is primarily the result of the expected decrease in the availability of net operating loss carryforwards during fiscal 2004 compared to fiscal 2003.

(N) DERIVATIVES AND HEDGING

     The Company is exposed to the risk of interest rate fluctuations on its debt and other obligations. As part of its strategy to manage the obligations that are subject to changes in interest rates, the Company has entered into various interest rate swap agreements, designated as cash flow hedges. The swap agreements are recorded at their fair value in Other Assets or Accrued Liabilities in the consolidated balance sheets. To the

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extent the hedging relationship is effective, gains or losses in the fair value of the derivative are deferred as a component of Stockholders’ Equity through Other Comprehensive (Loss) Income. Fluctuations in the fair value of the ineffective portion of the derivative are reflected in the current period earnings, although such amounts are insignificant.

     At September 30, 2003, Centex Corporation has an interest rate swap agreement that, in effect, fixes the variable interest rate on $25.0 million of its outstanding debt at 6.7% and expires in October 2005. During the three and six months ended September 30, 2003, the hedge related to this derivative was effective. Amounts to be received or paid under the swap agreement are recognized as a change in interest incurred on the related debt instrument. Based on the balance in Accumulated Other Comprehensive Income at September 30, 2003 related to this derivative, the Company estimates increases in interest incurred over the next 12 months to be approximately $1.4 million. As of September 30, 2003, the balance in Accumulated Other Comprehensive Income related to this derivative was $2.8 million ($1.8 million net of tax).

     Financial Services, through Home Equity, uses interest rate swaps to hedge the market risk associated with the anticipated issuance of fixed rate securitization debt used to finance sub-prime mortgages. At September 30, 2003, Home Equity had $120.0 million of these interest rate swap hedging instruments in place at a weighted-average interest rate of 3.5%. Changes in fair value of these derivatives are deferred in Accumulated Other Comprehensive (Loss) Income and recorded through current earnings as an adjustment of the interest incurred over the life of the securitization debt. Home Equity also uses interest rate swaps that, in effect, fix the interest rate on its variable interest rate debt. Amounts to be received or paid as a result of these interest rate swap agreements are recognized as adjustments to interest incurred on the related debt instrument. At September 30, 2003, Home Equity was hedging $1.55 billion of its outstanding debt with these interest rate swaps at a weighted-average interest rate of 2.1%. These swaps expire at varying times through September 2006. Based on the balance in Accumulated Other Comprehensive Income at September 30, 2003 related to interest rate hedging activities, the Company estimates increases in interest incurred over the next 12 months to be approximately $7.7 million. During the three and six months ended September 30, 2003, the hedges related to all of Home Equity’s interest rate swaps were effective. As of September 30, 2003, the balance in Accumulated Other Comprehensive Income related to Home Equity’s derivatives was $10.6 million ($6.9 million net of tax).

     Financial Services, through CTX Mortgage, enters into interest rate lock commitments (“IRLCs”) with its customers under which CTX Mortgage agrees to make mortgage loans at agreed upon rates within a period of time, generally from 1 to 30 days, if certain conditions are met. Initially, the fair value of the IRLCs is recorded on the balance sheet in Other Assets or Accrued Liabilities. Subsequent changes in the fair value of the IRLCs are recorded as an adjustment to earnings. To hedge the interest rate risk related to its IRLCs, CTX Mortgage executes mandatory forward trade commitments (i.e., “forward trade commitments”). CTX Mortgage also executes forward trade commitments to hedge the interest rate risk related to its portfolio of mortgage loans held for sale, including mortgage loans held by HSF-I. As discussed in Note “G”, HSF-I is a variable interest entity that has been consolidated with Financial Services and the Company effective July 1, 2003, pursuant to FIN 46. In connection with the consolidation of HSF-I, CTX Mortgage elected as of July 1, 2003 to utilize hedge accounting treatment under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities,” (“SFAS No. 133”) for these forward trade commitments. These forward trade commitments have been designated as fair value hedges. Accordingly, changes in the fair value of the forward trade commitments and the mortgage loans hedged by these commitments are recorded as an adjustment to earnings. To the extent the hedge is effective, gains or losses in the value of the hedged loans due to interest rate movement will be offset by an equal and opposite gain or loss in the value of the forward trade commitment. This will result in net zero impact to earnings. To the

25

extent the hedge contains some ineffectiveness, the ineffectiveness is recognized immediately in earnings. The amount of hedge ineffectiveness included in earnings during the quarter ended September 30, 2003 was approximately an $8 million gain. The net change in the estimated fair value of derivative positions not designated as hedges resulted in a loss of approximately $4 million and $13 million for the three and six months ended September 30, 2003.

(O) RELATED PARTY TRANSACTIONS

     At September 30, 2003 and March 31, 2003, Centex Homes had $6.2 million and $7.2 million, respectively, deposited with the Partnership as option deposits for the purchase of land. Centex Homes also entered into agreements to reimburse the Partnership for certain costs and fees incurred by the Partnership in the purchase and ownership of these tracts of land. During the three months ended September 30, 2003 and 2002, Centex Homes paid $0.7 million and $0.2 million, respectively, to the Partnership in fees and reimbursements pursuant to these agreements and $1.6 million and $3.0 million, respectively, for the purchase of residential lots. During the six months ended September 30, 2003 and 2002, Centex Homes paid $1.1 million and $1.6 million, respectively, to the Partnership in fees and reimbursements pursuant to these agreements and $13.6 million and $24.1 million, respectively, for the purchase of residential lots. Centex Homes expects to pay an additional $19.0 million to the Partnership to complete the purchase of these tracts of land over the next three years.

     Construction Services has historically executed construction contracts with the Partnership. At March 31, 2003, contracts for the construction of two industrial facilities were completed and no additional contracts were outstanding. At September 30, 2003, a $10.6 million contract for the construction of an office building had been executed with the Partnership and was outstanding. During the three months ended September 30, 2003 and 2002, the Partnership paid $0.5 million and $1.2 million, respectively, to Construction Services pursuant to these contracts. During the six months ended September 30, 2003 and 2002, the Partnership paid $0.5 million and $4.7 million, respectively, to Construction Services pursuant to these contracts.

     During the six months ended September 30, 2003, the Partnership issued 2,812 Class C Units to Centex Homes in exchange for land with a fair market value of $2.8 million.

     During the six months ended September 30, 2003, a subsidiary of the Partnership entered into a lease agreement (the “Lease”) with a Company subsidiary for 160,000 square feet of office space currently under construction in Lewisville, Texas. The Lease is for a ten-year primary term commencing upon the date that the premises is ready for occupancy.

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(P) RECENT ACCOUNTING PRONOUNCEMENTS

     In January 2003, the FASB issued FIN 46, which modified the accounting for certain entities in which (1) equity investors do not have a controlling financial interest and/or (2) the entity is unable to finance its activities without additional subordinated financial support from other parties. FIN 46 applied immediately for certain disclosure requirements and to variable interest entities created, or in which an enterprise obtains an interest, after January 31, 2003. For variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003, FIN 46 applies to interim or annual periods ending after December 15, 2003. At September 30, 2003, the Company has interests in the Partnership, HSF-I, land option agreements and certain joint ventures that are or may be affected by this interpretation. Variable interest entities owned or acquired before February 1, 2003 are: the Partnership, HSF-I, certain land option agreements and joint ventures. The Company has completed its analysis of FIN 46 effects on HSF-I, see Note (G), “Indebtedness.” The Company continues to evaluate the impacts of FIN 46 on the Partnership, land option agreements and joint ventures entered into prior to February 1, 2003. In accordance with FIN 46, the nature of these entities’ operations, the Company’s potential maximum exposure related to these entities and the applicability of FIN 46 to these entities are discussed as follows:

The Partnership	Financial statements filed with this Report
	Note (H), “Centex Development Company, L.P.”
HSF-I	Note (G), “Indebtedness”
Land Option Agreements	Note (J), “Land Held Under Option Agreements not Owned and    Other Land Deposits”
Joint Ventures	Note (I), “Commitments and Contingencies”

     The Company has historically accounted for stock-based compensation in accordance with APB No. 25 and related interpretations as permitted by SFAS No. 123. On April 1, 2003, the Company adopted the fair value measurement provisions of SFAS No. 123 under which the Company will recognize compensation expense of a stock option award to an employee over the vesting period based on the fair value of the award on the grant date. The fair value method has been applied only to awards granted or modified on or after April 1, 2003 (the prospective method), whereas awards granted prior to such date will continue to be accounted for under APB No. 25. See Note (C), “Stock-Based Employee Compensation Arrangements.”

     In April 2003, the FASB issued Statement of Financial Accounting Standards No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities,” (“SFAS No. 149”). The statement amends and clarifies financial accounting and reporting for derivative instruments and hedging activities under SFAS No. 133 by requiring that contracts with comparable characteristics be accounted for similarly, resulting in more consistent reporting of contracts as either derivatives or hybrid instruments. A portion of this statement is effective for contracts entered into or modified and for hedging relationships designated after June 30, 2003. The remainder of this statement codifies previously issued SFAS No. 133 implementation guidance, which retains its original effective dates. The implementation of SFAS No. 149 did not have a material impact on the Company’s results of operations or financial position.

     In May 2003, the FASB issued Statement Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” (“SFAS No. 150”). The statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Certain provisions of this Statement are effective for financial instruments entered into or modified after May 31, 2003. In October 2003, FASB

27

deferred indefinitely certain provisions of this Statement pertaining to non-controlling interests in limited life entities. The implementation of the provisions of SFAS No. 150 which are effective did not have an impact on the Company’s results of operations or financial position.

(Q) OFF-BALANCE SHEET OBLIGATIONS

     The Company enters into various “off-balance sheet” transactions in the normal course of business in order to reduce financing costs and improve access to liquidity, facilitate homebuilding activities and manage exposure to changing interest rates. Further discussion regarding these transactions can be found above in Note (H), “Centex Development Company, L.P.,” Note (I), “Commitments and Contingencies,” and Note (J), “Land Held Under Option Agreements Not Owned and Other Land Deposits.”

(R) SPIN-OFF OF MANUFACTURED HOUSING

     In June 2003, the Company spun off substantially all of its manufactured housing operations, which had previously been included in the Other segment. As a result of the spin-off, the manufactured housing operations’ earnings have been reclassified to discontinued operations in the statements of consolidated earnings, and any assets or liabilities related to these discontinued operations have been disclosed separately on the consolidated balance sheets. All prior period information related to these discontinued operations has been reclassified to be consistent with the September 30, 2003 presentation. All assets related to these discontinued operations that remain with the Company at September 30, 2003 are in the process of being sold and/or disposed. For the three months ended September 30, 2003 and 2002, discontinued operations had revenues of $6.2 million and $36.1 million, respectively, and operating earnings (loss) of $(322) thousand and $943 thousand, respectively. For the six months ended September 30, 2003 and 2002, discontinued operations had revenues of $45.7 million and $69.0 million, respectively, and operating earnings of $380 thousand and $1.7 million, respectively.

(S) SUBSEQUENT EVENTS

     On October 6, 2003, the Company issued $300 million of unsecured senior notes maturing in 2013. The notes bear interest at 5.125% per annum. The first interest installment is payable on April 1, 2004 with regular interest payments scheduled semi-annually in April and October.

(T) RECLASSIFICATIONS

     Certain prior year balances have been reclassified to be consistent with the September 30, 2003 presentation.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     For the three months ended September 30, 2003, our consolidated revenues were $2.58 billion, a 26.5% increase over $2.04 billion for the same period last year. Earnings from continuing operations before income taxes and cumulative effect of a change in accounting principle were $298.1 million, 81.3% higher than $164.4 million for the same period last year. For the six months ended September 30, 2003, our consolidated revenues were $4.90 billion, a 26.9% increase over $3.86 billion for the same period last year. Earnings from continuing operations before income taxes and cumulative effect of a change in accounting principle were $507.2 million, 75.4% higher than $289.1 million for the same period last year. The changes in our revenues and earnings from continuing operations before income taxes and cumulative effect of a change in accounting principle are explained below by segment. The principal reasons for the increases in consolidated revenues and income from continuing operations before income taxes and cumulative effect of a change in accounting principle are the continued growth of our Home Building operations, continued growth in Home Equity’s servicing portfolio and a substantial increase in CTX Mortgage’s refinancing activity as compared to the prior year.

     Earnings from continuing operations before cumulative effect of a change in accounting principle for the three months ended September 30, 2003 were $199.6 million, 73.6% higher than $115.0 million for the same period last year. Earnings from continuing operations before cumulative effect of a change in accounting principle for the six months ended September 30, 2003 were $341.9 million, 69.0% higher than $202.3 million for the same period last year. The increase in earnings from continuing operations before cumulative effect of a change in accounting principle is less than the increase in earnings from continuing operations before income taxes and cumulative effect of a change in accounting principle due to an increase in our effective tax rate. Our effective tax rate related to continuing operations increased to 33.0% and 32.6% for the three months and six months ended September 30, 2003 from 30.0% for the same periods last year. The increase in the effective tax rate is primarily the result of the expected decrease in the availability of net operating loss carryforwards during fiscal 2004 compared to fiscal 2003.

     Any reference herein to we, us or our includes Centex Corporation and its subsidiary companies.

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HOME BUILDING

     The following summarizes the results of our Home Building operations for the three and six months ended September 30, 2003 compared to the same periods last year (dollars in millions, except per unit data):

	For the Three Months Ended September 30,
	2003						2002
				% of Revenues						% of Revenues
Revenues — Housing	$	1,687.8			98.8	%	$	1,262.7			98.5	%
Revenues — Land Sales and Other		21.3			1.2	%		19.6			1.5	%
Cost of Sales — Housing		(1,229.4	)		(71.9	%)		(941.6	)		(73.4	%)
Cost of Sales — Land Sales and Other		(30.4	)		(1.8	%)		(19.2	)		(1.5	%)
Selling, General and Administrative Expenses		(244.9	)		(14.3	%)		(194.1	)		(15.1	%)
Earnings (Loss) from Unconsolidated Entities		1.4			—			(0.8	)		(0.1	%)
Operating Earnings	$	205.8			12.0	%	$	126.6			9.9	%
				% Change						% Change
Units Closed		6,906			19.3	%		5,788			6.8	%
Average Unit Sales Price	$	244,393			12.0	%	$	218,167			1.9	%
Operating Earnings Per Unit	$	29,805			36.3	%	$	21,873			3.6	%
Backlog Units		15,244			20.8	%		12,619			26.5	%
Ending Operating Neighborhoods		561			5.8	%		530			9.3	%

	For the Six Months Ended September 30,
	2003						2002
				% of Revenues						% of Revenues
Revenues — Housing	$	3,165.2			98.5	%	$	2,330.8			97.6	%
Revenues — Land Sales and Other		48.4			1.5	%		57.0			2.4	%
Cost of Sales — Housing		(2,331.9	)		(72.6	%)		(1,740.1	)		(72.9	%)
Cost of Sales — Land Sales and Other		(55.3	)		(1.7	%)		(44.3	)		(1.9	%)
Selling, General and Administrative Expenses		(466.6	)		(14.5	%)		(375.9	)		(15.7	%)
Earnings (Loss) from Unconsolidated Entities		2.6			0.1	%		(0.6	)		—
Operating Earnings	$	362.4			11.3	%	$	226.9			9.5	%
				% Change						% Change
Units Closed		13,255			22.9	%		10,783			5.0	%
Average Unit Sales Price	$	238,792			10.5	%	$	216,156			1.7	%
Operating Earnings Per Unit	$	27,344			30.0	%	$	21,039			6.2	%
Backlog Units		15,244			20.8	%		12,619			26.5	%
Ending Operating Neighborhoods		561			5.8	%		530			9.3	%

     Revenues for the three and six months ended September 30, 2003 increased 33.3% and 34.6%, respectively, versus the same periods last year primarily due to an increase in units closed and higher unit sales prices. Units closed during the three months ended September 30, 2003 increased 19.3% from 5,788 units to 6,906 units, and the average unit sales price increased 12.0% from $218,167 to $244,393. Units closed during the six months ended September 30, 2003 increased 22.9% from 10,783 units to 13,255 units, and the average unit sales price increased 10.5% from $216,156 to $238,792. The increase in units closed was due to a higher number of operating neighborhoods in the current year coupled with an increase in units closed per neighborhood versus last year. The increase in the unit sales price was due to general price increases, a

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shift at the neighborhood level to a higher priced product, and the California markets, which generally have higher unit prices, making up a greater percentage of total closings as compared to last year.

     The relief of capitalized interest is included in Home Building’s cost of sales. Capitalized interest relieved was $14.7 million and $10.5 million for the three months ended September 30, 2003 and 2002, respectively, and $27.9 million and $18.8 million for the six months ended September 30, 2003 and 2002, respectively.

     Housing margin, defined as housing revenues less housing cost of sales, was 27.2% and 26.3% of housing revenues for the three and six months ended September 30, 2003, respectively, compared to 25.4% and 25.3% of housing revenues for the same periods last year. The increase in housing margin for the three months ended September 30, 2003 can be attributed to the average unit sales price increase of 12.0%, as noted above, combined with Home Building’s continued focus on reducing construction costs and increasing productivity.

     Selling, general and administrative expenses for the three months ended September 30, 2003 were $244.9 million, or 14.3% of revenues, as compared to the $194.1 million and 15.1% of revenues reported for the same period last year. Selling, general and administrative expenses for the six months ended September 30, 2003 were $466.6 million, or 14.5% of revenues, as compared to the $375.9 million and 15.7% of revenues reported for the same period last year. The dollar increase resulted from incremental expenses associated with closing more homes. Compared to the prior year, Home Building’s selling, general and administrative expenses as a percentage of revenue have decreased.

     Operating earnings for the three months ended September 30, 2003 were 12.0% of revenues and approximately $29,805 on a per-unit basis compared to operating earnings of 9.9% of revenues and approximately $21,873 on a per-unit basis for the same period last year. Operating earnings for the six months ended September 30, 2003 were 11.3% of revenues and approximately $27,344 on a per-unit basis compared to operating earnings of 9.5% of revenues and approximately $21,039 on a per-unit basis for the same period last year. The increase in operating earnings is a direct result of the increase in housing margin and Home Building’s leverage of its selling, general and administrative expenses.

     Centex Homes ended its second quarter of fiscal 2004 with a record backlog of home sales. Units in backlog increased 20.8% to 15,244 units at September 30, 2003 compared to 12,619 units at September 30, 2002. The increase in backlog resulted from a 5.8% increase in ending operating neighborhoods, which helped drive a 10.8% increase in new sales (orders) versus the prior year. Centex Homes defines backlog units as units that have been sold, as indicated by a signed contract, but not closed.

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FINANCIAL SERVICES

     The Financial Services segment is primarily engaged in the residential mortgage banking business, as well as in other financial services that are in large part related to the residential mortgage market. Its operations include mortgage origination, servicing and other related services for purchasers of homes sold by our Home Building operations and other homebuilders, as well as sub-prime home equity lending and the sale of title insurance and various other insurance coverages. The following summarizes Financial Services’ results for the three and six months ended September 30, 2003 compared to the same periods last year (dollars in millions):

			For the Three Months Ended September 30,
			2003		2002
Revenues			$	290.6	$	204.8
Interest Margin			$	81.8	$	39.9
Operating Earnings			$	76.5	$	36.6
Origination Volume			$	5,463	$	3,943
Number of Loans Originated
	CTX Mortgage Company, LLC
		Centex-built Homes (“Builder”)		4,734		3,959
		Non-Centex-built Homes (“Retail”)		21,567		16,076
				26,301		20,035
	Centex Home Equity Company, LLC			9,588		7,373
				35,889		27,408

	CTX Mortgage						Centex Home Equity
	Company, LLC						Company, LLC
	For the Three Months						For the Three Months
	Ended September 30,						Ended September 30,
	2003			2002			2003			2002
Average Interest Earning Assets	$	1,976.5		$	176.0		$	5,370.2		$	3,693.6
Average Yield		6.11	%		7.09	%		8.16	%		8.89	%
Average Interest Bearing Liabilities	$	1,718.9		$	117.3		$	5,616.0		$	3,849.7
Average Rate Paid		1.92	%		2.80	%		3.48	%		4.56	%

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			For the Six Months Ended September 30,
			2003		2002
Revenues			$	557.4	$	385.4
Interest Margin			$	137.5	$	76.1
Operating Earnings			$	142.1	$	60.9
Origination Volume			$	10,895	$	6,922
Number of Loans Originated
	CTX Mortgage Company, LLC
		Centex-built Homes (“Builder”)		9,169		7,337
		Non-Centex-built Homes (“Retail”)		44,359		28,482
				53,528		35,819
	Centex Home Equity Company, LLC			18,583		13,732
				72,111		49,551

	CTX Mortgage						Centex Home Equity
	Company, LLC						Company, LLC
	For the Six Months						For the Six Months
	Ended September 30,						Ended September 30,
	2003			2002			2003			2002
Average Interest Earning Assets	$	1,255.7		$	180.8		$	5,123.1		$	3,548.0
Average Yield		5.52	%		7.43	%		8.27	%		8.94	%
Average Interest Bearing Liabilities	$	1,063.9		$	123.1		$	5,340.5		$	3,692.7
Average Rate Paid		1.74	%		2.90	%		3.67	%		4.69	%

     Financial Services’ results are primarily derived from conforming mortgage banking and sub-prime home equity lending operations as described below.

Conforming Mortgage Banking

     The revenues and operating earnings of CTX Mortgage Company, LLC and related entities, or CTX Mortgage, are derived primarily from the sale of mortgage loans, inclusive of all service rights and, to a lesser extent, interest income and other fees. CTX Mortgage’s business strategy of selling conforming loans reduces our capital investment and related risks, provides substantial liquidity and is an efficient process given the size and maturity of the conforming mortgage loan secondary capital markets. CTX Mortgage originates mortgage loans, holds them for a short period and sells them to Harwood Street Funding I, LLC, or HSF-I, and investors. HSF-I is a variable interest entity for which the Company is the primary beneficiary and as of July 1, 2003, is consolidated with the Company’s financial statements. As a result of the consolidation of HSF-I, the Company recorded a cumulative effect of a change in accounting principle of $13.3 million, net of tax, in the quarter ended September 30, 2003. This cumulative effect of a change in accounting principle primarily represents the deferral of servicing released premium income offset to a lesser extent by the deferral of certain loan origination costs, which will be recognized as loans are sold into the secondary market. The consolidation of HSF-I resulted in an increase in the Company’s residential mortgage loans held for sale with a corresponding increase in the Company’s debt of approximately $1.6 billion at September 30, 2003. HSF-I

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purchases mortgage loans from CTX Mortgage with the proceeds from the issuance of securitized term debt, secured liquidity notes and subordinated certificates that are extendable for up to five years. Because HSF-I is a consolidated entity, the debt, interest income and interest expense of HSF-I are reflected in the Company’s financial statements at September 30, 2003. CTX Mortgage Company, LLC and HSF-I together sold $5.16 billion and $9.59 billion of mortgage loans to investors for the three and six months ended September 30, 2003, respectively. CTX Mortgage Company, LLC sold $3.39 billion and $5.91 billion of mortgage loans to HSF-I and other investors during the three months and six months ended September 30, 2002, respectively. CTX Mortgage recognized gains on the sale of mortgage loans of $70.1 million and $69.6 million for the three months ended September 30, 2003 and 2002, respectively. For the six months ended September 30, 2003 and 2002, gains on the sale of mortgage loans were $157.3 million and $121.5 million, respectively.

     Revenues increased 49.9% to $161.6 million and 56.0% to $308.6 million for the three and six months ended September 30, 2003, respectively, as compared to the same periods last year. The increase in revenues is primarily related to an increase in CTX Mortgage originations due to an increase in mortgage loans originated for refinancing and mortgage loans originated for Centex Homes’ buyers, to a lesser extent higher revenues from Title and Insurance operations and a net increase in the servicing fee component of gains on sale of mortgages which is deferred until final mortgage loan settlement. Refinanced mortgages accounted for 45% and 47% of originations for the three and six months ended September 30, 2003, respectively, as compared to 42% and 31% for the same periods last year. CTX Mortgage’s “capture” rate of Centex Homes’ buyers was 73% for the three and six months ended September 30, 2003, and for the same periods last year.

     For the three months ended September 30, 2003, originations totaled 26,301 compared to 20,035 originations in the same period last year; loan volume was $4.44 billion compared to $3.34 billion for the same period last year; the per-loan profit was $2,302, an increase of 83.0% compared to $1,258 for the same period last year and total mortgage applications decreased 6.5% to 22,396 from 23,950 applications for the same period last year. For the six months ended September 30, 2003, originations totaled 53,528 compared to 35,819 originations in the same period last year; loan volume was $8.99 billion compared to $5.82 billion for the same period last year; the per-loan profit was $2,031, an increase of 81.5% compared to $1,119 for the same period last year and total mortgage applications increased 34.7% to 53,715 from 39,869 applications for the same period last year. For the three and six months ended September 30, 2003, per-loan profit increased due to increased operational leverage as a result of the increase in the volume of originations, to a lesser extent an increase in Title and Insurance earnings, and an increase in the recognized servicing fee component of gains on sale of mortgages.

     CTX Mortgage’s selling, general and administrative expenses increased $10.8 million to $91.9 million for the three months ended September 30, 2003 and $30.0 million to $185.5 million for the six months ended September 30, 2003, respectively. This increase was primarily due to increased employee related costs and overhead related to the increased volume in loan originations. CTX Mortgage’s operating earnings were $60.6 million and $108.7 million for the three and six months ended September 30, 2003, respectively, resulting in a 140.5% and 171.1% increase as compared to the same periods last year. The increase in operating earnings is primarily due to the increase in revenues discussed above and a decrease in the cost per loan originated.

     In the normal course of its activities, CTX Mortgage carries inventories of loans pending sale to investors and earns an interest margin, which we define as the difference between interest revenue on mortgage loans held for sale or investment and interest expense on debt used to fund the mortgage loans. CTX Mortgage uses HSF-I and other short-term mortgage warehouse facilities to finance these inventories of loans. CTX Mortgage’s interest margin increased from $1.6 million to $21.0 million and from $5.8 million to

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$23.5 million for the three and six months ended September 30, 2003, respectively, as compared to the same periods last year. These increases are primarily due to the inclusion in the Company’s results of HSF-I interest income and interest expense, beginning July 1, 2003, as required under the provisions of FIN 46. Interest income and expense contributed by HSF-I during the three months ended September 30, 2003 totaled $25.2 million and $5.9 million, respectively. Prior to July 1, 2003, HSF-I’s interest margin was included as a component of Financial Services’ revenue as a result of the interest rate swap with HSF-I.

     The results of operations of CTX Mortgage depend to a significant extent on the level of interest rates. Any significant increases in mortgage rates above currently prevailing levels could adversely affect the volume of loan originations and may result in a significant curtailment of refinancing activity, which represents a substantial portion of our business. There can be no assurance that mortgage rates will remain at the current level in the future.

Sub-Prime Home Equity Lending

     The revenues of Centex Home Equity Company, LLC, or Home Equity, increased 32.9% to $129.0 million and 32.5% to $248.8 million for the three and six months ended September 30, 2003, respectively, as compared to the same periods last year, as a result of continued growth in Home Equity’s portfolio of residential mortgage loans held for investment. Interest margin increased to $60.8 million and $114.0 million for the three and six months ended September 30, 2003, respectively, as compared to $38.2 million and $72.0 million for the same periods last year. The increase in interest margin is primarily a result of an increase in the portfolio of mortgage loans held for investment and a decrease in interest rates on debt used to fund mortgage loans. Home Equity reported operating earnings of $15.9 million and $30.1 million for the three and six months ended September 30, 2003, respectively, as compared to operating earnings of $11.7 million and $22.4 million for the same periods last year. The increase in Home Equity’s operating earnings is primarily the result of the increase in interest margin, as noted above. Interest income will be positively affected as the portfolio of mortgage loans held for investment increases. The increase in interest margin was partially offset by an increase in servicing and production costs, mostly attributable to loan volume and loan servicing growth, and an increase in the provision for losses on residential mortgage loans held for investment. Home Equity’s selling, general and administrative expenses increased $22.6 million to $64.2 million and $69.1 million to $120.8 million for the three and six months ended September 30, 2003, respectively, as a result of Home Equity’s growth. Home Equity’s increase in loan production volume, the expansion of its branch offices and the increase in the number of its employees has resulted in a corresponding increase in salaries and related costs, rent expense, group insurance costs and advertising expenditures of approximately $11.2 million and $20.6 million for the three and six months ended September 30, 2003, respectively. The remainder of the increase was due to higher charges to the provision for loan losses, as discussed below.

     For the three and six months ended September 30, 2003, respectively, originations totaled 9,588 and 18,583 compared to 7,373 and 13,732 originations for the same periods last year; origination volume was $1.02 billion and $1.90 billion compared to $600.7 million and $1.10 billion for the same periods last year and total applications increased 48.4% and 54.3% to 85,662 and 166,299 from 57,737 and 107,781 applications for the same periods last year. For the six months ended September 30, 2003, originations increased 35.3% while origination volume increased 72.7% due to an increase in average loan size. The smaller increase in the number of originations relative to the larger increase in total applications is reflective of Home Equity’s continued adherence to its credit underwriting guidelines. Average interest earning assets increased 44.2%, from $3.55 billion in the six months ended September 30, 2002 to $5.12 billion in the six months ended September 30, 2003, and the corresponding average interest bearing liabilities increased 44.7%, from $3.69 billion in the six months ended September 30, 2002 to $5.34 billion in the six months ended September 30,

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2003, primarily due to an increase in the volume of loan originations and an increase in average loan size. The average yield earned on these assets decreased from 8.94% in the six months ended September 30, 2002 to 8.27% in the six months ended September 30, 2003, and the average rate paid on these liabilities decreased from 4.69% in the six months ended September 30, 2002 to 3.67% in the six months ended September 30, 2003, primarily due to lower interest rates in fiscal 2004 compared to fiscal 2003. The fact that the average rate paid on interest bearing liabilities decreased significantly more than the yield earned on interest earning assets decreased and the increase in originations noted above led to a 58.3% increase in net interest margin from $72.0 million in the six months ended September 30, 2002 to $114.0 million in the six months ended September 30, 2003.

     At September 30, 2003, Home Equity’s total servicing portfolio consisted of 81,641 loans totaling $6.4 billion compared to 67,400 loans totaling $4.79 billion at September 30, 2002. For the three and six months ended September 30, 2003, service fee income related to this servicing was $17.1 million and $31.7 million compared to $12.7 million and $24.4 million, respectively, for the same periods last year.

     The primary risks in Home Equity’s operations are consistent with those of the financial services industry and include credit risk associated with its loans, liquidity risk related to funding its loans and interest rate risk prior to securitization of the loans. In addition, as Home Equity services its loans, it is also subject to customer prepayment risks.

Allowance for Losses

     Home Equity originates and purchases loans in accordance with standard underwriting criteria. The underwriting standards are primarily intended to assess the creditworthiness of the borrower and the value of the mortgaged property and to evaluate the adequacy of the property as collateral for the home equity loan.

     Home Equity establishes an allowance for losses by charging the provision for losses in the statement of consolidated earnings when it believes an event causing a loss has occurred. When Home Equity determines that a residential mortgage loan held for investment is partially or fully uncollectible, the estimated loss is charged against the allowance for losses. Recoveries on losses previously charged to the allowance are credited to the allowance at the time the recovery is collected.

     We believe that the allowance for losses is sufficient to provide for credit losses in the existing residential mortgage loans held for investment, which include real estate owned. We evaluate the allowance on an aggregate basis considering, among other things, the relationship of the allowance to residential mortgage loans held for investment and historical credit losses. The allowance reflects our judgment of the present loss exposure at the end of the reporting period. A range of expected credit losses is estimated using historical losses, static pool loss curves and delinquency modeling. These tools take into consideration historical information regarding delinquency and loss severity experience and apply that information to the portfolio at each reporting date.

     Although we consider the allowance for losses on residential mortgage loans held for investment reflected in our consolidated balance sheet to be adequate, there can be no assurance that this allowance will prove to be adequate over time to cover ultimate losses. This allowance may prove to be inadequate due to unanticipated adverse changes in the economy or discrete events adversely affecting specific customers or industries.

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     Changes in the allowance for losses on residential mortgage loans held for investment were as follows (dollars in thousands):

		For the Three Months						For the Six Months
		Ended September 30,						Ended September 30,
		2003			2002			2003			2002
Balance at Beginning of Period		$	34,061		$	17,320		$	28,384		$	14,106
	Provision for Losses		19,132			7,670			34,894			13,556
	Recoveries on Loans Charged Off		20			33			96			51
	Losses Sustained		(10,837	)		(3,880	)		(20,998	)		(6,570	)
Balance at End of Period		$	42,376		$	21,143		$	42,376		$	21,143

		September 30,
		2003			2002
Allowance as a Percentage of Gross Loans Held for Investment			0.75	%		0.55	%
Allowance as a Percentage of 90+ Days Contractual Delinquency			28.18	%		20.76	%
90+ Days Contractual Delinquency
	Total Dollars Delinquent	$	150,376		$	101,863
	% Delinquent		2.66	%		2.64	%

     The increase in the allowance for losses in the current quarter occurred primarily because the amount of the residential mortgage loans held for investment increased and the residential mortgage loan portfolio continued to mature. As the age and size of the residential mortgage loan portfolio continues to mature and grow, we expect the balance in the allowance for losses, the loans charged off and the allowance to continue to increase. The increase in 90+ days contractual delinquency at September 30, 2003 occurred primarily because the residential mortgage loan portfolio continued to mature.

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CONSTRUCTION PRODUCTS

     The following summarizes Construction Products’ results for the three and six months ended September 30, 2003 compared to the same periods last year (dollars in millions):

	For the Three Months Ended September 30,
	2003			2002
Revenues	$	154.8		$	136.0
Cost of Sales and Expenses		(122.8	)		(107.9	)
Selling, General and Administrative Expenses+		(2.4	)		(1.4	)
Operating Earnings *	$	29.6		$	26.7

+ Represents Construction Products’ Corporate general and administrative expenses. General and administrative expenses related to Construction Products’ operating units of $6.5 million and $6.5 million are classified as Cost of Sales for the three months ended September 30, 2003 and 2002, respectively.

* Before Minority Interest of $10.1 million and $8.5 million for the three months ended September 30, 2003 and 2002, respectively.

	For the Six Months Ended September 30,
	2003			2002
Revenues	$	298.9		$	264.8
Cost of Sales and Expenses		(242.5	)		(207.5	)
Selling, General and Administrative Expenses+		(3.9	)		(2.8	)
Operating Earnings *	$	52.5		$	54.5

+ Represents Construction Products’ Corporate general and administrative expenses. General and administrative expenses related to Construction Products’ operating units of $13.0 million and $12.5 million are classified as Cost of Sales for the six months ended September 30, 2003 and 2002, respectively.

* Before Minority Interest of $17.6 million and $17.4 million for the three months ended September 30, 2003 and 2002, respectively.

     Construction Products’ revenues for the three and six months ended September 30, 2003 were 13.8% and 12.9% greater than the same periods last year. These increases were primarily the result of a $12.5 million and a $23.4 million increase in gypsum wallboard revenues for the three and six months ended September 30, 2003, respectively, and a $1.6 million and a $4.1 million increase in paperboard revenues for the three and six months ended September 30, 2003, respectively. The increase in gypsum wallboard and paperboard revenues was primarily caused by higher sales volume when compared to the same periods last year.

     Construction Products’ cost of sales for the three and six months ended September 30, 2003 was 13.8% higher and 16.9% higher, respectively, than the same periods last year, primarily due to increased sales volume in all segments, except aggregates, higher maintenance costs for cement manufacturing facilities and higher energy costs for gypsum wallboard and paperboard. Construction Products’ selling, general and administrative expenses as a percentage of revenues for the three and six months ended September 30, 2003 remained relatively consistent with prior year.

     For the three months ended September 30, 2003, Construction Products’ operating earnings, net of minority interest, increased 10.9% due to increased paperboard and aggregates operating earnings offset in part by lower operating earnings of cement and gypsum wallboard. Prior year operating earnings included

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$2.6 million of costs from the closure of the Georgetown plant. For the six months ended September 30, 2003, Construction Products’ operating earnings, net of minority interest, decreased 3.7% primarily due to higher cement maintenance costs and lower gypsum wallboard sales prices.

CONSTRUCTION SERVICES

     The following summarizes Construction Services’ results for the three and six months ended September 30, 2003 compared to the same periods last year (dollars in millions):

	For the Three Months Ended
	September 30,
	2003		2002
Revenues	$	386.6	$	391.7
Operating Earnings	$	4.6	$	9.2
New Contracts Executed and Change Orders	$	589.6	$	156.6
Backlog of Uncompleted Contracts	$	1,607.8	$	1,856.8

	For the Six Months Ended
	September 30,
	2003		2002
Revenues	$	762.4	$	752.5
Operating Earnings	$	9.2	$	17.3
New Contracts Executed and Change Orders	$	850.9	$	428.9
Backlog of Uncompleted Contracts	$	1,607.8	$	1,856.8

     Construction Services’ revenues for the three and six months ended September 30, 2003 were 1.3% lower and 1.3% higher, respectively, than revenues for the same periods last year. The variance in revenues was primarily the result of the stage of execution of construction projects. Operating earnings for the group decreased 50.0% and 46.8% in the three and six months ended September 30, 2003, respectively, compared to the same periods last year primarily as a result of the prior year including certain high margin contracts. For the three and six months ended September 30, 2003, new contracts executed and change orders increased 276.5% and 98.4% from the same periods last year, and backlog of uncompleted contracts decreased 13.4% from September 30, 2002. The decrease in backlog is primarily due to reduced activity in the commercial construction industry. Construction Services defines backlog as the uncompleted portion of all signed contracts. In addition to backlog, Construction Services has been awarded work that is pending execution of a signed contract. At September 30, 2003 and 2002, such work, which is not included in backlog, was approximately $1.9 billion and $2.1 billion, respectively. There is no guarantee that these unsigned contracts will result in future revenues.

     The Construction Services segment provided a positive average net cash flow in excess of our investment in the segment of $99.6 million and $113.2 million for the three and six months ended September 30, 2003 compared to $103.3 million and $116.2 million for the same periods last year.

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INVESTMENT REAL ESTATE

     The following summarizes Investment Real Estate’s results for the three and six months ended September 30, 2003 compared to the same periods last year (dollars in millions):

	For the Three Months Ended
	September 30,
	2003		2002
Revenues	$	22.7	$	3.0
Earnings from Unconsolidated Entities and Other	$	13.7	$	4.4
Operating Earnings	$	32.4	$	5.9

	For the Six Months Ended
	September 30,
	2003		2002
Revenues	$	25.4	$	9.6
Earnings from Unconsolidated Entities and Other	$	17.6	$	3.7
Operating Earnings	$	37.1	$	9.3

     Investment Real Estate’s revenues for the three and six months ended September 30, 2003 were substantially higher than revenues for the same periods last year. Operating earnings from Investment Real Estate for the three and six months ended September 30, 2003 totaled $32.4 million and $37.1 million, respectively, compared to $5.9 million and $9.3 million in the same periods last year. The fluctuations in revenues and operating earnings were primarily related to increased property sales and, as discussed below, fluctuations in results from Investment Real Estate’s investment in Centex Development Company, L.P., or the Partnership.

     Property sales contributed operating earnings of $20.7 million and $22.5 million for the three and six months ended September 30, 2003, respectively and $0.4 million and $1.8 million, respectively for the same periods last year. The timing of land sales is uncertain and can vary significantly from period to period.

     Included in Investment Real Estate’s operating earnings for the three and six months ended September 30, 2003 were earnings of $13.7 million and $17.6 million, respectively, derived from its investment in the Partnership compared to earnings of $4.4 million and $3.7 million for the same periods last year. As noted in Note (H), “Centex Development Company, L.P.,” of the Notes to Consolidated Financial Statements of Centex, the investment in the Partnership is not consolidated and is accounted for on the equity method of accounting.

     The largest component of the Partnership is its International Home Building segment, based near London, England. Included in Investment Real Estate’s operating earnings were earnings of $6.4 million and $4.2 million for the three months ended September 30, 2003 and 2002, respectively, and earnings of $11.2 million and $3.8 million for the six months ended September 30, 2003 and 2002, respectively, derived from International Home Building. The increase in earnings from last year was primarily due to an improvement in International Home Building’s operating margins and an increase in the average sales price per unit. For the three months ended September 30, 2003 and 2002, this segment closed 379 units at an average sales price per unit of $250,641 and 383 units at an average sales price per unit of $236,514, respectively. For the six months ended September 30, 2003 and 2002, this segment closed 692 units at an average sales price per unit

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of $265,519 and 652 units at an average sales price per unit of $232,449, respectively. Operating earnings per unit were $18,272 and $12,676 for the three months ended September 30, 2003 and 2002, respectively. Operating earnings per unit were $17,734 and $7,637 for the six months ended September 30, 2003 and 2002, respectively.

     It is not currently anticipated that any significant capital will be allocated to Investment Real Estate for new business development. Through its investment in the Partnership, Investment Real Estate will focus on the International Home Building operations and evaluate opportunistic real estate transactions.

OTHER

     Our Other segment includes Corporate general and administrative expenses, interest expense and minority interest. Also included in our Other segment are the Company’s home services operations, which are not material for purposes of segment reporting. In June 2003, the Company spun off substantially all of its manufactured housing operations which had previously been included in the Other segment. As a result of the spin-off, manufactured housing operations are reflected as a discontinued operation and not included in the segment information below. Earnings related to the manufactured housing operations have been reclassified to discontinued operations.

     Other consisted of the following (dollars in millions):

	For the Three Months						For the Six Months
	Ended September 30,						Ended September 30,
	2003			2002			2003			2002
Operating Loss from Home Services	$	(1.1	)	$	(1.0	)	$	(2.4	)	$	(2.6	)
Corporate General and Administrative Expenses		(22.5	)		(14.4	)		(41.7	)		(27.1	)
Interest Expense		(17.4	)		(16.5	)		(34.4	)		(31.9	)
Minority Interest		(10.1	)		(8.5	)		(17.6	)		(17.4	)
Other		0.3			(0.2	)		—			(0.8	)
	$	(50.8	)	$	(40.6	)	$	(96.1	)	$	(79.8	)

     As noted above, earnings (loss) related to the manufactured housing operations have been reclassified to discontinued operations. For the three months ended September 30, 2003 and 2002, discontinued operations had revenues of $6.2 million and $36.1 million, respectively; operating earnings (loss) of $(322) thousand and $943 thousand, respectively; and net earnings (loss) of $(209) thousand and $613 thousand, respectively. For the six months ended September 30, 2003 and 2002, discontinued operations had revenues of $45.7 million and $69.0 million, respectively; operating earnings of $380 thousand and $1.7 million, respectively; and net earnings of $247 thousand and $1.1 million, respectively.

     Corporate general and administrative expenses represent compensation and other costs not identifiable with a specific segment. The increase in corporate general and administrative expenses is primarily related to an increase in personnel to support the growth in the Company’s operations and higher compensation resulting from continued improvements in our profitability.

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     The change in interest expense is primarily related to an increase in average debt outstanding for the three and six months ended September 30, 2003, as compared to the same periods last year. This increase is offset by slightly lower borrowing costs during the three and six months ended September 30, 2003, as compared to the same periods last year.

FINANCIAL CONDITION AND LIQUIDITY

     At September 30, 2003, we had cash and cash equivalents of $89.5 million, including $11.0 million in Financial Services and $13.9 million belonging to our 64.6%-owned Construction Products subsidiary. The net cash used in or provided by the operating, investing and financing activities for the three and six months ended September 30, 2003 and 2002 is summarized below (dollars in thousands). See “Statements of Consolidated Cash Flows with Consolidating Details” on pages 5-6 of this Report for the detail supporting this summary. Note that we use the term Centex to represent a supplemental consolidating presentation that reflects the Financial Services segment as if accounted for under the equity method.

			For the Six Months Ended
			September 30,
			2003			2002
Net Cash (Used in) Provided by
	Centex*
		Operating Activities	$	(468,249	)	$	(444,657	)
		Investing Activities		(6,088	)		29,876
		Financing Activities		98,138			261,664
				(376,199	)		(153,117	)
	Financial Services
		Operating Activities		816,050			41,736
		Investing Activities		(1,000,072	)		(581,713	)
		Financing Activities		179,957			535,681
				(4,065	)		(4,296	)
	Centex Corporation and Subsidiaries
		Operating Activities		371,560			(323,714	)
		Investing Activities		(1,029,919	)		(656,044	)
		Financing Activities		278,095			822,345
Net Decrease in Cash			$	(380,264	)	$	(157,413	)

* “Centex” represents a supplemental presentation that reflects the Financial Services segment as if accounted for under the equity method. We believe that separate disclosure of the consolidating information is useful because the Financial Services subsidiaries operate in a distinctly different financial environment that generally requires significantly less equity to support their higher debt levels compared to the operations of our other subsidiaries; the Financial Services subsidiaries have structured their financing programs substantially on a stand alone basis; and we have limited obligations with respect to the indebtedness of our Financial Services subsidiaries. Management uses this information in its financial and strategic planning. We also use this presentation to allow investors to compare us to homebuilders that do not have financial services operations.

     We generally fund our Centex operating and other short-term needs through cash from operations, borrowings from commercial paper and other short-term credit arrangements and the issuance of senior notes. During the six months ended September 30, 2003, cash was primarily used in Centex Operating Activities to finance increases in housing inventories relating to the increased level of sales and resulting units under construction during the year and for the acquisition of land held for development. The funds provided by Centex Financing Activities were primarily from new debt used to fund the increased homebuilding activity.

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     We generally fund our Financial Services operating and other short-term needs through credit facilities, securitizations, proceeds from the sale of mortgage loans to investors and cash flows from operations, as described below. During the six months ended September 30, 2003, cash was primarily used in Financial Services Investing Activities to finance increases in residential mortgage loans held for investment. The funds provided by Financial Services Financing Activities were primarily from new debt used to fund the increased residential mortgage loan activity.

     Centex Corporation currently has an investment-grade credit rating from each of the principal credit rating agencies. Our ability to finance our activities on favorable terms is dependent to a significant extent on whether we are able to maintain our investment-grade credit ratings. We attempt to manage our debt levels in order to maintain investment-grade ratings. If, however, our debt ratings were downgraded, we would not have direct access to the commercial paper markets and might need to draw on our existing committed backup facility, which exceeds our commercial paper program size.

     Our existing credit facilities and available borrowing capacity as of September 30, 2003 are summarized below (dollars in thousands):

		Existing Credit		Available
		Facilities		Capacity
Centex
	Centex Corporation
	Multi-Bank Revolving Credit Facility	$	800,000	$	800,000	(1)
	Multi-Bank Revolving Letter of Credit Facility		250,000		129,283	(2)
	Construction Products Senior Revolving Credit Facility		155,000		118,317	(3)
			1,205,000		1,047,600
Financial Services
	Unsecured Credit Facility		125,000		71,100	(4)
	Secured Credit Facilities		715,000		468,987	(5)
	Harwood Street Funding I, LLC Facility		3,000,000		1,444,821
	Harwood Street Funding II, LLC Facility		1,500,000		638,669
			5,340,000		2,623,577
		$	6,545,000	$	3,671,177	(6)

⁽¹⁾ This is a committed, multi-bank revolving credit facility, maturing in August 2006, which serves as backup for commercial paper borrowings. As of September 30, 2003, there were no borrowings under this backup facility, and our $700 million commercial paper program had $165 million outstanding. We have not borrowed under this facility since its inception.

⁽²⁾ This is a committed, multi-bank revolving letter of credit facility, maturing in August 2004. Letters of credit issued under this facility may expire no later than August 2005.

⁽³⁾ This is a committed, senior revolving credit facility, maturing in March 2006. This facility was entered into by Construction Products and has no recourse to Centex Corporation.

⁽⁴⁾ Centex Corporation, CTX Mortgage and Home Equity, on a joint and several basis, share in a $125 million uncommitted, unsecured credit facility.

⁽⁵⁾ CTX Mortgage and Home Equity share in a $550 million committed secured credit facility to finance mortgage inventory. Effective October 2003, this facility and available capacity were reduced to $250 million. CTX Mortgage also maintains $155 million of committed secured mortgage warehouse facilities to finance mortgages. Home Equity also maintains a $10 million committed secured mortgage warehouse facility to finance mortgages.

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⁽⁶⁾ The amount of available borrowing capacity consists of $3.6 billion of committed borrowings and $71.1 million of uncommitted borrowings as of September 30, 2003. Although we believe that the uncommitted capacity is currently available, there can be no assurance that the lenders under this facility would elect to make advances to Centex Corporation or its subsidiaries if and when requested to do so.

     CTX Mortgage finances its inventory of mortgage loans held for sale principally through sales of conforming and Jumbo “A” loans to HSF-I, pursuant to a mortgage loan purchase agreement (the “HSF-I Purchase Agreement”). Since 1999, CTX Mortgage has sold substantially all of the conforming and Jumbo “A” mortgage loans that it originates to HSF-I in accordance with the HSF-I Purchase Agreement. When HSF-I acquires these loans, it typically holds them for a period averaging between 45 and 60 days and then resells them into the secondary market. HSF-I obtains the funds needed to purchase eligible mortgage loans from CTX Mortgage by issuing (1) short-term secured liquidity notes that are currently rated A1+ by S&P and P-1 by Moody’s, (2) medium-term debt that is currently rated A1+ by S&P and P-1 by Moody’s and (3) subordinated certificates maturing in September 2004, November 2005 and June 2006, extendable for up to five years, that are currently rated BBB by S&P and Baa2 by Moody’s. Under the terms of the HSF-I Purchase Agreement, CTX Mortgage may elect to sell to HSF-I, and HSF-I is obligated to purchase from CTX Mortgage, mortgage loans that satisfy certain eligibility criteria and portfolio requirements. At September 30, 2003, the maximum amount of mortgage loans that HSF-I is allowed to carry in its inventory under the HSF-I Purchase Agreement is limited to $3.0 billion. This arrangement provides CTX Mortgage with reduced financing cost for eligible mortgage loans it originates and improves its liquidity. The Company does not guarantee the payment of any debt or subordinated certificates of HSF-I, we are not liable for credit losses relating to securitized residential mortgage loans sold to HSF-I, and HSF-I debt does not have recourse to us. The consolidation of this debt will not change our credit profile or debt ratings.

     In the event CTX Mortgage was unable to finance its inventory of loans through HSF-I, it would draw on existing credit facilities currently held in addition to HSF-I. In addition, it would need to make other customary financing arrangements to fund its mortgage loan origination activities. Although we believe that CTX Mortgage could arrange for alternative financing that is common for non-investment grade mortgage companies, there can be no assurance that such financing would be available on satisfactory terms, and any delay in obtaining such financing could adversely affect the results of operations of CTX Mortgage.

     Home Equity finances its inventory of mortgage loans through Harwood Street Funding II, LLC, or HSF-II, a wholly-owned, consolidated entity, under a revolving sales agreement that expires upon final payment of the senior and subordinated debt issued by HSF-II. This arrangement, where HSF-II has committed to finance all eligible loans, gives Home Equity daily access to HSF-II borrowing capacity of $1.5 billion. HSF-II obtains funds through the sale of subordinated notes that are currently rated BBB by S&P, Baa2 by Moody’s and BBB by Fitch, and short-term secured liquidity notes that are currently rated A1+ by S&P, P1 by Moody’s and F1+ by Fitch. Because HSF-II is a consolidated entity, the debt, interest income and interest expense of HSF-II are reflected in the financial statements of Financial Services.

     Under our debt covenants, we are required to maintain certain leverage and interest coverage ratios and a minimum tangible net worth. At September 30, 2003, Centex Corporation was in compliance with all of these covenants.

     As of September 30, 2003, our short-term debt was $2.7 billion, which was primarily applicable to Financial Services. Excluding Financial Services and Construction Products, our short-term borrowings are generally financed at prevailing market interest rates from our commercial paper program and from uncommitted bank facilities.

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     Our outstanding debt as of September 30, 2003 was as follows (dollars in thousands) ⁽¹⁾:

Centex
	Short-Term Notes Payable		$	165,007
	Senior Debt:
		Medium-Term Note Programs, weighted-average rate 4.67%, due through 2006		258,000
		Long-Term Notes, weighted-average rate 7.05%, due through 2012		1,508,224
		Other Indebtedness, weighted-average rate 2.76%, due through 2008		63,509
	Subordinated Debt:
		Subordinated Debentures, 7.38%, due in 2005		99,918
		Subordinated Debentures, 8.75%, due in 2007		99,728
				2,194,386
Financial Services
	Short-Term Debt:
		Short-Term Notes Payable		949,752
		Harwood Street Funding I and II, LLC Secured Liquidity Notes		1,552,831
	Home Equity Loan Asset-Backed Certificates, weighted-average rate 3.13%, due through 2033			4,921,691
	Harwood Street Funding I, LLC Variable Rate Subordinated Extendable Certificates, weighted-average rate 3.27%, due through 2006			139,000
	Harwood Street Funding II, LLC Variable Rate Subordinated Notes, weighted-average rate 3.25%, due through 2008			75,000
				7,638,274
Total			$	9,832,660

⁽¹⁾ Certain of the borrowings described in the table above vary on a seasonal basis and depend on the working capital needs of our operations.

     Maturities of long-term debt of Centex and Financial Services (in thousands) during the next five years ending March 31 are:

	Long-term Debt
			Financial
	Centex		Services		Total
2004 2005 2006 2007 2008 Thereafter	$	1,538 32,593 372,735 290,448 358,840 973,225	$	693,336 1,340,026 984,684 1,036,595 555,371 525,679	$	694,874 1,372,619 1,357,419 1,327,043 914,211 1,498,904
	$	2,029,379	$	5,135,691	$	7,165,070

     Financial Services long-term debt associated with Centex Home Equity Company, LLC related to securitized residential mortgage loans structured as collateralized borrowings includes Asset-Backed Certificates of $4.9 billion at September 30, 2003 and has no recourse to Home Equity or Centex Corporation; however, Home Equity remains liable for customary loan representations. The principal and interest on these notes are paid from the liquidation of the underlying residential mortgage loans, which serve as collateral for the debt. Accordingly, the timing of the principal payments on these notes is dependent upon the payment received on the underlying residential mortgage loans. The expected maturities of this component of long-

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term debt are based on contractual maturities adjusted for projected repayments and prepayments of principal.

     Financial Services long-term debt associated with CTX Mortgage Company, LLC is comprised of Variable Rate Subordinated Extendable Certificates issued by HSF-I. HSF-I is a variable interest entity for which the Company is the primary beneficiary pursuant to the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”). Accordingly, HSF-I was consolidated in the Company’s financial statements beginning July 1, 2003. The amount outstanding related to these certificates was $139.0 million at September 30, 2003. The principal and interest on these certificates are paid from the liquidation of the underlying residential mortgage loans, which serve as collateral for the debt. The holders of this debt have no recourse for non-payment to CTX Mortgage Company, LLC or Centex Corporation and this debt does not change the Company’s credit profile or debt ratings.

CERTAIN OFF-BALANCE SHEET AND OTHER OBLIGATIONS

     The following is a summary of certain off-balance sheet arrangements and other obligations and their possible effects on our liquidity and capital resources.

3333 Holding Corporation, 3333 Development Corporation and Centex Development Company, L.P.

     3333 Holding Corporation, 3333 Development Corporation and the Partnership are entities that are neither affiliates of nor consolidated with Centex Corporation and subsidiaries at September 30, 2003. These entities were established in 1987 to broaden the range of business activities that may be conducted for the benefit of our stockholders to include general real estate development. We determined that this expansion would improve stockholder value through longer-term real estate investments, real estate developments and the benefits of the partnership form of business. The Partnership is managed by its general partner, 3333 Development Corporation, a wholly-owned subsidiary of 3333 Holding Corporation. We generally are not liable for the obligations of 3333 Holding Corporation, 3333 Development Corporation or the Partnership. However, as of September 30, 2003, we guaranteed approximately $1.1 million of indebtedness of the Partnership. In addition, we enter into certain land purchase and other transactions with the Partnership. For additional information regarding these entities, see the financial statements of the Partnership, filed with this Report. In addition, for information regarding these entities and Centex Corporation and subsidiaries, on an aggregate basis, see Note (H), “Centex Development Company, L.P.,” of the Notes to Consolidated Financial Statements of Centex Corporation. For a discussion of the impact of FIN 46 on our accounting for transactions with these entities, see “Recent Accounting Pronouncements” below.

Joint Ventures

     We conduct a portion of our land acquisition, development and other activities through our participation in joint ventures in which we hold less than a majority interest. These joint ventures are typically large in nature, and partnering with other developers allows Centex Homes to share the risks and rewards of ownership while providing for efficient asset utilization. Our investment in these non-consolidated joint ventures, accounted for using the equity method, was $132.9 million and $102.3 million at September 30, 2003 and March 31, 2003, respectively. These joint ventures had total outstanding secured construction debt of approximately $231.1 million and $232.5 million at September 30, 2003 and March 31, 2003, respectively. Our maximum potential liability with respect to this debt, based on our ownership percentage of the related joint ventures, is approximately $58.8 million and $56.4 million at September 30, 2003 and March 31, 2003, respectively. Under the structure of this debt, we become liable up to these amounts only to the extent that the

46

construction debt exceeds a certain percentage of the value of the project. At September 30, 2003 and March 31, 2003, we were not liable for any of this debt. For a discussion of the impact of FIN 46 on our accounting for transactions with non-consolidated joint ventures, see “Recent Accounting Pronouncements” below.

Letters of Credit and Guarantees

     At September 30, 2003, we had outstanding letters of credit of $126.4 million that primarily relate to development obligations of Home Building. We expect that the obligations secured by these letters of credit will generally be performed by our subsidiaries in the ordinary course of business and in accordance with the applicable contractual terms. To the extent that the underlying commercial obligations are performed by our subsidiaries, the related letters of credit will be released and we will not have any continuing obligations. We have no material third-party guarantees.

CRITICAL ACCOUNTING POLICIES

     Some of our critical accounting policies require the use of judgment in their application or require estimates of inherently uncertain matters. Our accounting policies are in compliance with generally accepted accounting principles; however, a change in the facts and circumstances of the underlying transactions could significantly change the application of the accounting policies and the resulting financial statement impact. Listed below are those policies that we believe are critical and require the use of complex judgment in their application.

Impairment of Long-Lived Assets

     Housing projects and land held for development and sale are stated at the lower of cost (including direct construction costs, capitalized interest and real estate taxes) or fair value less cost to sell. Property and equipment is carried at cost less accumulated depreciation. We assess these assets for recoverability in accordance with the provisions of Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” or SFAS No. 144. SFAS No. 144 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. These evaluations for impairment are significantly impacted by estimates of revenues, costs and expenses and other factors. If these assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Goodwill

     Goodwill represents the excess of purchase price over net assets of businesses acquired. We adopted the provisions of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” or SFAS No. 142, effective April 1, 2001. Upon the adoption of SFAS No. 142, goodwill is no longer subject to amortization. Rather, goodwill is subject to at least an annual assessment for impairment, at the reporting unit level, by applying a fair value-based test. If the carrying amount exceeds the fair value, an impairment has occurred. We continually evaluate whether events and circumstances have occurred that indicate the remaining balance of goodwill may not be recoverable. Fair value is estimated using a discounted cash flow or market valuation approach. Such evaluations for impairment are significantly impacted by estimates of future revenues, costs and expenses and other factors. If the goodwill is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the

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goodwill exceeds the fair value of the future cash flows. We had no impairment of goodwill in the six months ended September 30, 2003.

Consolidation of Variable Interest Entities

     In January 2003, the FASB issued FIN 46, which modifies the accounting for certain entities in which (1) equity investors do not have a controlling financial interest and/or (2) the entity is unable to finance its activities without additional subordinated financial support from other parties. FIN 46 applies immediately to variable interest entities created, or in which an enterprise obtains an interest, after January 31, 2003. For variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003, FIN 46 applies to interim or annual periods ending after December 15, 2003. FIN 46 requires significant use of judgment and estimates in determining its application.

Valuation of Residential Mortgage Loans Held for Investment

     Home Equity originates and purchases loans in accordance with standard underwriting criteria. The underwriting standards are primarily intended to assess the creditworthiness of the mortgagee and the value of the mortgaged property and to evaluate the adequacy of the property as collateral for the home equity loan.

     Home Equity establishes an allowance for losses by charging the provision for losses in the statement of consolidated earnings when it believes the event causing the loss has occurred. When Home Equity determines that a residential mortgage loan held for investment is partially or fully uncollectible, the estimated loss is charged against the allowance for losses. Recoveries on losses previously charged to the allowance are credited to the allowance at the time the recovery is collected.

     We believe that the allowance for losses is sufficient to provide for credit losses in the existing residential mortgage loans held for investment, which include real estate owned. We evaluate the allowance on an aggregate basis considering, among other things, the relationship of the allowance to residential mortgage loans held for investment and historical credit losses. The allowance reflects our judgment of the present loss exposure at the end of the reporting period. A range of expected credit losses is estimated using historical losses, static pool loss curves and delinquency modeling. These tools take into consideration historical information regarding delinquency and loss severity experience and apply that information to the portfolio at each reporting date.

     Although we consider the allowance for losses on residential mortgage loans held for investment reflected in our consolidated balance sheet to be adequate, there can be no assurance that this allowance will prove to be adequate over time to cover ultimate losses. This allowance may prove to be inadequate due to unanticipated adverse changes in the economy or discrete events adversely affecting specific customers or industries.

Mortgage Securitization Residual Interest

     Home Equity uses mortgage securitizations to finance its mortgage loan portfolio. For securitizations prior to April 2000, which Home Equity accounted for as sales, Home Equity retained a mortgage securitization residual interest, or MSRI. The MSRI represents the present value of Home Equity’s right to receive, over the life of the securitization, the excess of the weighted-average coupon on the loans securitized over the interest rates on the securities sold, a normal servicing fee, a trustee fee and an insurance fee, where applicable, net of the credit losses relating to the loans securitized. Home Equity estimates the fair value of

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MSRI through the application of discounted cash flow analysis. Such analysis requires the use of various assumptions, the most significant of which are anticipated prepayments (principal reductions in excess of contractually scheduled reductions), estimated future credit losses and the discount rate applied to future cash flows.

Loan Origination Reserve

     CTX Mortgage has established a liability for anticipated losses associated with loans originated and sold to HSF-I or other unaffiliated third parties. This liability includes losses associated with certain borrower payment defaults, credit quality issues or misrepresentation. CTX Mortgage estimates the losses that may be incurred for certain loan originations based on, among other factors, historical loss rates and current trends in loan originations. This liability reflects management’s judgment of the loss exposure at the end of the reporting period.

     Although we consider the loan origination reserve reflected in our consolidated balance sheet at September 30, 2003 to be adequate, there can be no assurance that this reserve will prove to be adequate over time to cover ultimate losses in connection with our loan originations. This reserve may prove to be inadequate due to unanticipated adverse changes in the economy or discrete events adversely affecting specific customers.

Insurance Accruals

     We have certain deductible limits under our workers’ compensation, automobile and general liability insurance policies for which reserves are actuarially determined based on claims filed and an estimate of claims incurred but not yet reported. Projection of losses concerning these liabilities is subject to a high degree of variability due to factors such as claim settlement patterns, litigation trends and legal interpretations, among others.

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RECENT ACCOUNTING PRONOUNCEMENTS

     In January 2003, the FASB issued FIN 46, which modified the accounting for certain entities in which (1) equity investors do not have a controlling financial interest and/or (2) the entity is unable to finance its activities without additional subordinated financial support from other parties. Certain disclosure requirements of FIN 46 are effective for financial statements of interim or annual periods issued after January 31, 2003. FIN 46 applies immediately to variable interest entities created, or in which an enterprise obtains an interest, after January 31, 2003. For variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003, FIN 46 applies to interim or annual periods ending after December 15, 2003. At September 30, 2003, we have interests in the Partnership, HSF-I, certain joint ventures and land under option agreements that are or may be affected by this interpretation. Variable interest entities owned or acquired before February 1, 2003 are: the Partnership, HSF-I, certain land option agreements and joint ventures. The Company has completed its analysis of FIN 46 effects on HSF-I, see Note (G), “Indebtedness.” The Company continues to evaluate the impacts of FIN 46 on the Partnership, land option agreements and joint ventures entered into prior to February 1, 2003. The nature of these entities’ operations, our potential maximum exposure related to these entities and the applicability of FIN 46 to these entities are discussed as follows:

The Partnership	Financial statements filed with this Report
	Note (H), “Centex Development Company, L.P.”
HSF-I	Note (G), “Indebtedness”
Land Option Agreements	Note (J), “Land Held Under Option Agreements not    Owned and Other Land Deposits”
Joint Ventures	Note (I), “Commitments and Contingencies”

     We have historically accounted for stock-based compensation in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” or APB No. 25, and related interpretations, as permitted by Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” or SFAS No. 123. On April 1, 2003, we adopted the fair value measurement provisions of SFAS No. 123 under which we will recognize compensation expense of a stock-based award to an employee over the vesting period based on the fair value of the award on the grant date. The fair value method has been applied only to awards granted or modified on or after April 1, 2003, whereas awards granted prior to such date will continue to be accounted for under APB No. 25.

     In April 2003, the FASB issued Statement of Financial Accounting Standards No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities,” or SFAS No. 149. The statement amends and clarifies financial accounting and reporting for derivative instruments and hedging activities under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities,” or SFAS No. 133, by requiring that contracts with comparable characteristics be accounted for similarly, resulting in more consistent reporting of contracts as either derivatives or hybrid instruments. A portion of this statement is effective for contracts entered into or modified and for hedging relationships designated after June 30, 2003. The remainder of this statement codifies previously issued SFAS No. 133 implementation guidance, which retains its original effective dates. The implementation of SFAS No. 149 did not have a material impact on the Company’s results of operations or financial position.

     In May 2003, the FASB issued Statement Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” (“SFAS No. 150”). The statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is

50

within its scope as a liability (or an asset in some circumstances). Certain provisions of this Statement are effective for financial instruments entered into or modified after May 31, 2003. In October 2003, FASB deferred indefinitely certain provisions of this Statement pertaining to non-controlling interests in limited life entities. The implementation of the provisions of SFAS No. 150 which are effective did not have an impact on the Company’s results of operations or financial position.

FORWARD-LOOKING STATEMENTS

     Various sections of this Report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when we are discussing our beliefs, estimates or expectations. These statements are not guarantees of future performance and involve a number of risks and uncertainties. Actual results and outcomes may differ materially from what we express or forecast in these forward-looking statements. In addition to the specific uncertainties discussed elsewhere in this Report, the following risks and uncertainties may affect our actual performance and results of operations:

• Our Home Building operations are somewhat cyclical and sensitive to changes in economic conditions, including levels of employment, consumer confidence and income, availability of financing, interest rate levels and changes in the economic condition of the local markets in which we operate.

• Our Home Building operations are also subject to other risks and uncertainties, including seasonal variations, adverse weather conditions, the availability of adequate land in desirable locations, the cost and availability of labor and construction materials, labor disputes, the general demand for housing and new construction and the resale market for existing homes.

• Our Construction Services operations are also somewhat cyclical and sensitive to changes in economic conditions, including overall capital spending trends in the economy, changes in federal and state appropriations for construction projects and competitive pressures on the availability and pricing of construction projects.

• Our Construction Services operations are also subject to other risks and uncertainties, including the timing of new awards and the funding of such awards; adverse weather conditions; cancellations of, or changes in the scope to, existing contracts; the cost and availability of labor and construction materials; labor disputes; the ability to meet performance or schedule guarantees and cost overruns.

• Virtually all of our homebuyers finance their home acquisitions through our Financial Services operations or third party lenders. In general, our Home Building operations can be adversely affected by increases in interest rates.

• The results of operations of CTX Mortgage depend to a significant extent on the level of interest rates. Any significant increases in mortgage rates above currently prevailing levels could adversely affect the volume of loan originations. There can be no assurance that mortgage rates will remain at the current level in the future. Our mortgage loan operations are also dependent upon the securitization market for mortgage-backed securities and the availability of mortgage warehouse financing.

51

• Our Home Equity operations involve holding residential mortgage loans for investment and establishing an allowance for credit losses on these loans. Although the amount of this allowance reflects our judgment as to our present loss exposure on these loans, there can be no assurance that it will be sufficient to cover any losses that may ultimately be incurred.

• Demand for the products that our Construction Products operations produce is directly related to activity in the homebuilding and construction industries and to general economic conditions. Our Construction Products operations are also concentrated in particular regional and local markets that may experience cyclical downturns at different times than the national economy. The price at which we sell our construction products, particularly gypsum wallboard, is highly sensitive to changes in supply and demand for such products, energy costs, raw material prices and competition from other domestic and foreign producers.

• All of our businesses operate in very competitive environments, which are characterized by competition from a number of other homebuilders, mortgage lenders, construction products producers and contractors in each of the markets in which we operate.

• We are subject to various federal, state and local statutes, rules and regulations that could affect our businesses, including those concerning zoning, construction, protecting the environment and health. In addition, our businesses could be affected by changes in federal income tax policy, federal mortgage loan financing programs and by other changes in regulation or policy.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     We are exposed to market risks related to fluctuations in interest rates on our direct debt obligations, on mortgage loans receivable, residual interest in mortgage securitizations and securitizations classified as debt. We utilize derivative instruments, including interest rate swaps, in conjunction with our overall strategy to manage the debt outstanding that is subject to changes in interest rates. We utilize forward sale commitments to mitigate the risk associated with the majority of our mortgage loan portfolio. Other than the forward commitments and interest rate swaps discussed earlier, we do not utilize forward or option contracts on foreign currencies or commodities, or other types of derivative financial instruments.

     There have been no material changes in our market risk from March 31, 2003. For further information regarding our market risk, refer to our Annual Report on Form 10-K for the fiscal year ended March 31, 2003.

Item 4. Controls and Procedures

     An evaluation has been performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2003. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of September 30, 2003 to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. There has been no change in our internal controls over financial reporting that occurred during the three months ended September 30, 2003 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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Part II. Other Information

Item 4. Submission of Matters to a Vote of Security Holders

     On July 17, 2003, we held our Annual Meeting of Stockholders. At the Annual Meeting, the following matters were resolved by vote:

(1) Dan W. Cook, III, Thomas J. Falk, Laurence E. Hirsch and Thomas M. Schoewe were elected as directors to serve for a three-year term until the 2006 Annual Meeting. Voting results for these nominees are summarized as follows:

	Number of Shares
	For		Withheld		Broker Non-Votes
Dan W. Cook, III		49,037,538		2,944,236		—
Thomas J. Falk		51,177,757		804,017		—
Laurence E. Hirsch		50,784,900		1,196,874		—
Thomas M. Schoewe		49,038,983		2,942,791		—

(2) Stockholders approved the 2003 Annual Incentive Compensation Plan as set forth in Item 2 of the Centex Corporation Proxy Statement dated June 16, 2003. Voting results are summarized as follows:

Number of Shares
For		Against		Abstained		Broker Non-Votes
	47,443,296		4,145,733		392,745		—

(3) Stockholders approved the Centex Corporation 2003 Equity Incentive Plan as set forth in Item 3 of the Centex Corporation Proxy Statement dated June 16, 2003. Voting results are summarized as follows:

Number of Shares
For		Against		Abstained		Broker Non-Votes
	26,612,826		24,982,959		383,789		2,200

(4) Stockholders ratified the appointment of independent auditors for 2004 as set forth in Item 4 of the Centex Corporation Proxy Statement dated June 16, 2003. Voting results are summarized as follows:

Number of Shares
For		Against		Abstained		Broker Non-Votes
	50,718,224		822,652		346,199		94,699

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Item 6. Exhibits and Reports on Form 8-K

(1) Exhibits

10.1	Credit Agreement, dated as of August 7, 2003 among Centex Corporation, Bank of America, N.A., as Administrative Agent, and the lenders named therein.
10.2	Letter of Credit and Reimbursement Agreement, dated as of August 7, 2003 among Centex Corporation, Bank of America, N.A., as Administrative Agent, and the lenders named therein.
10.3	Amended and Restated Distribution Agreement, dated as of November 4, 2003, between Centex Corporation and Centex Construction Products, Inc. (incorporated by reference from Amendment No. 3 to Schedule 13D of Centex Corporation filed with the Securities Exchange Commission on November 5, 2003).
10.4	Amended and Restated Agreement and Plan of Merger, dated as of November 4, 2003, among Centex Corporation, ARG Merger Corporation and Centex Construction Products, Inc. (incorporated by reference from Amendment No. 3 to Schedule 13D of Centex Corporation filed with the Securities Exchange Commission on November 5, 2003).
31.1	Certification of the Chief Executive Officer of Centex Corporation pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended.
31.2	Certification of the Chief Financial Officer of Centex Corporation pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended.
32.1	Certification of the Chief Executive Officer of Centex Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer of Centex Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(2) Reports on Form 8-K

Current Report on Form 8-K of Centex Corporation dated July 22, 2003 announcing the Company’s first quarter net earnings for the quarter ended June 30, 2003.

Current Report on Form 8-K of Centex Corporation dated July 22, 2003 announcing that Centex Corporation and Centex Construction Products, Inc. entered into a Distribution Agreement and a Merger Agreement in order to provide for the distribution by Centex Corporation of its entire equity interest in Centex Construction Products, Inc. to the holders of common stock of Centex Corporation in a tax-free transaction.

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Signatures

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

	CENTEX CORPORATION
	Registrant
November 10, 2003	/s/ Leldon E. Echols
	Leldon E. Echols
	Executive Vice President and
	Chief Financial Officer
	(principal financial officer)
November 10, 2003	/s/ Mark D. Kemp
	Mark D. Kemp
	Vice President- Controller
	(principal accounting officer)

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Part I. Financial Information

Item 1. Financial Statements

3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Condensed Combining Statements of Operations
(Dollars in thousands, except per unit/share data)
(unaudited)

		For the Three Months Ended September 30,
		2003							2002
				Centex							Centex
				Development							Development
				Company, L.P.		3333 Holding					Company, L.P.		3333 Holding
				and		Corporation					and		Corporation
		Combined		Subsidiaries		and Subsidiary			Combined		Subsidiaries		and Subsidiary
Revenues		$	100,557	$	100,544	$	38		$	101,052	$	101,002	$	87
Costs and Expenses			94,507		94,479		53			97,867		97,849		55
Earnings from Unconsolidated Entities and Other			107		107		—			585		585		—
Earnings (Loss) from Continuing Operations
	Before Income Taxes		6,157		6,172		(15	)		3,770		3,738		32
Income Taxes			1,517		1,517		—			779		779		—
Earnings (Loss) from Continuing Operations			4,640		4,655		(15	)		2,991		2,959		32
Discontinued Operations:
	Earnings from Discontinued Operations (Including Gain on Sale of $13,685 and $281 for the Three Months Ended September 30, 2003 and 2002, respectively)		9,050		9,050		—			616		616		—
Net Earnings (Loss)		$	13,690	$	13,705	$	(15	)	$	3,607	$	3,575	$	32
Net Earnings Allocable to Limited Partners				$	13,705						$	3,575
Earnings (Loss) from Continuing Operations Per Unit/Share				$	19.20	$	(15	)			$	12.30	$	32
Earnings from Discontinued Operations Per Unit/Share					37.32		—					2.56		—
Net Earnings (Loss) Per Unit/Share				$	56.52	$	(15	)			$	14.86	$	32
Weighted-Average Units/Shares Outstanding					242,486		1,000					240,591		1,000

See Notes to Condensed Combining Financial Statements.

Transactions between Centex Development Company, L.P. and Subsidiaries and 3333 Holding Corporation and Subsidiary have been eliminated.

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3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Condensed Combining Statements of Operations
(Dollars in thousands, except per unit/share data)
(unaudited)

		For the Six Months Ended September 30,
		2003							2002
				Centex							Centex
				Development							Development
				Company, L.P.		3333 Holding					Company, L.P.		3333 Holding
				and		Corporation					and		Corporation
		Combined		Subsidiaries		and Subsidiary			Combined		Subsidiaries		and Subsidiary
Revenues		$	203,581	$	203,555	$	76		$	187,343	$	187,243	$	175
Costs and Expenses			193,372		193,307		115			185,584		185,528		131
Earnings from Unconsolidated Entities and Other			242		242		—			575		575		—
Earnings (Loss) from Continuing Operations Before Income Taxes			10,451		10,490		(39	)		2,334		2,290		44
Income Taxes			2,562		2,562		—			309		309		—
Earnings (Loss) from Continuing Operations			7,889		7,928		(39	)		2,025		1,981		44
Discontinued Operations:
	Earnings from Discontinued Operations (Including Gain on Sale of $13,653 and $281 for the Six Months Ended September 30, 2003 and 2002, respectively)		9,214		9,214		—			1,279		1,279		—
Net Earnings (Loss)		$	17,103	$	17,142	$	(39	)	$	3,304	$	3,260	$	44
Net Earnings Allocable to Limited Partners				$	17,142						$	3,260
Earnings from Continuing Operations Per Unit/Share				$	32.83	$	39				$	8.23	$	44
Earnings from Discontinued Operations Per Unit/Share					38.14		—					5.32		—
Net Earnings Per Unit/Share				$	70.97	$	39				$	13.55	$	44
Weighted-Average Units/Shares Outstanding					241,543		1,000					240,591		1,000

See Notes to Condensed Combining Financial Statements.

Transactions between Centex Development Company, L.P. and Subsidiaries and 3333 Holding Corporation and Subsidiary have been eliminated.

57

3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Condensed Combining Balance Sheets
(Dollars in thousands)
(unaudited)

			September 30, 2003							March 31, 2003*
					Centex							Centex
					Development							Development
					Company, L.P.		3333 Holding					Company, L.P.		3333 Holding
					and		Corporation					and		Corporation
			Combined		Subsidiaries		and Subsidiary			Combined		Subsidiaries		and Subsidiary
Assets
Cash and Cash Equivalents			$	23,587	$	23,573	$	14		$	5,113	$	5,105	$	8
Receivables				40,637		44,682		239			30,719		34,747		261
Inventories				493,319		493,319		—			446,801		446,801		—
Investments-
	Commercial Properties, net			49,849		49,849		—			49,790		49,790		—
	Real Estate Joint Ventures			4,022		4,022		—			3,973		3,973		—
	Affiliate			—		—		1,192			—		—		1,191
Assets Held for Sale				1,988		1,988		—			55,496		55,496		—
Property and Equipment, net				2,144		2,144		—			2,308		2,308		—
Other Assets-
	Goodwill, net			32,495		32,495		—			30,698		30,698		—
	Deferred Charges and Other			19,747		17,976		1,771			15,786		14,015		1,771
			$	667,788	$	670,048	$	3,216		$	640,684	$	642,933	$	3,231
Liabilities, Stockholders’ Equity And Partners’ Capital
Accounts Payable and Accrued Liabilities			$	133,951	$	133,761	$	4,524		$	128,129	$	127,967	$	4,500
Liabilities Related to Assets Held for Sale				1,113		1,113		—			46,208		46,208		—
Notes Payable				209,913		209,913		—			177,499		177,499		—
		Total Liabilities		344,977		344,787		4,524			351,836		351,674		4,500
Stockholders’ Equity and Partners’ Capital				322,811		325,261		(1,308	)		288,848		291,259		(1,269	)
			$	667,788	$	670,048	$	3,216		$	640,684	$	642,933	$	3,231

     * Condensed from audited financial statements.

See Notes to Condensed Combining Financial Statements.

Transactions between Centex Development Company, L.P. and Subsidiaries and 3333 Holding Corporation and Subsidiary have been eliminated.

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3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Condensed Combining Statements of Cash Flows
(Dollars in thousands)
(unaudited)

		For the Six Months Ended September 30,
		2003									2002
					Centex									Centex
					Development									Development
					Company, L.P.			3333 Holding						Company, L.P.			3333 Holding
					and			Corporation						and			Corporation
		Combined			Subsidiaries			and Subsidiary			Combined			Subsidiaries			and Subsidiary
Cash Flows — Operating Activities
Net Earnings (Loss)		$	17,103		$	17,142		$	(39	)	$	3,304		$	3,260		$	44
Adjustments:
	Depreciation		1,256			1,256			—			2,606			2,606			—
	Amortization		320			320			—			458			458			—
	Deferred Tax Provision (Benefit)		114			114			—			(786	)		(786	)		—
	Equity in Loss from Joint Ventures		(242	)		(242	)		—			(575	)		(575	)		—
(Increase) Decrease in Receivables			(21,625	)		(21,647	)		22			2,617			2,689			(72	)
Decrease in Notes Receivable			4,160			4,160			—			—			—			—
(Increase) Decrease in Inventories			(22,504	)		(22,504	)		—			12,747			12,747			—
Decrease (Increase) in Commercial Properties			47,716			47,716			—			(21,255	)		(21,255	)		—
Decrease (Increase) in Other Assets			2,137			2,137			—			(906	)		(895	)		(11	)
Increase (Decrease) in Payables and Accruals			5,285			5,262			23			(3,534	)		(3,578	)		44
			33,720			33,714			6			(5,324	)		(5,329	)		5
Cash Flows — Investing Activities
Decrease in Advances to Joint Ventures and Investment in Affiliate			145			145			—			1,550			1,550			—
Decrease (Increase) in Property and Equipment, net			39			39			—			(197	)		(197	)		—
			184			184			—			1,353			1,353			—
Cash Flows — Financing Activities
(Decrease) Increase in Notes Payable			(16,008	)		(16,008	)		—			11,807			11,807			—
			(16,008	)		(16,008	)		—			11,807			11,807			—
Effect of Exchange Rate Changes on Cash			578			578			—			1,822			1,822			—
Net Increase in Cash			18,474			18,468			6			9,658			9,653			5
Cash and Cash Equivalents at Beginning of Period			5,113			5,105			8			22,538			22,529			9
Cash and Cash Equivalents at End of Period		$	23,587		$	23,573		$	14		$	32,196		$	32,182		$	14

See Notes to Condensed Combining Financial Statements.

Transactions between Centex Development Company, L.P. and Subsidiaries and 3333 Holding Corporation and Subsidiary have been eliminated.

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3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Notes to Condensed Combining Financial Statements
September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

(A) BASIS OF PRESENTATION

     The condensed combining interim financial statements include the accounts of 3333 Holding Corporation (“Holding”) and subsidiary and Centex Development Company, L.P. (the “Partnership”) and subsidiaries (collectively, the “Companies”) after elimination of all significant intercompany balances and transactions. These statements have been prepared, without audit, in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted.

     In the opinion of the Companies, all adjustments (consisting of normal, recurring adjustments) necessary to present fairly the information in the condensed combining financial statements of the Companies have been included. The results of operations for such interim periods are not necessarily indicative of the results for the full year. The Companies suggest that these condensed combining financial statements be read in conjunction with the financial statements and the notes thereto included in the Companies’ latest Annual Report on Form 10-K.

(B) ORGANIZATION

     The Partnership is a master limited partnership formed by Centex Corporation and subsidiaries (“Centex”) in March 1987 to broaden the range of business activities that may be conducted for the benefit of Centex’s stockholders to include general real estate development. Centex believed that this expansion would improve stockholder value through longer-term real estate investments, real estate developments and the benefits of the partnership form of business.

     The Partnership is authorized to issue three classes of limited partnership interest. Centex Corporation indirectly holds 100% of the Partnership’s Class A and Class C limited partnership units (“Class A Units” and “Class C Units,” respectively), which are collectively convertible into 20% of the Partnership’s Class B limited partnership units (“Class B Units”). The Partnership may issue additional Class C Units in connection with the acquisition of real property and other assets. No Class B Units have been issued. However, the stockholders of Centex hold warrants to purchase approximately 80% of the Class B Units. The warrants are held through a nominee arrangement and trade in tandem with the common stock of Centex.

     As holder of the Class A and Class C Units, Centex is entitled to a cumulative preferred return of 9% per annum on the average outstanding balance of its capital contributions to the Partnership, adjusted for cash and other distributions representing return of capital. As of September 30, 2003, these adjusted capital contributions, or Unrecovered Capital, were $243.9 million and preference payments in arrears totaled $52.9 million.

     The Partnership is managed by its general partner, 3333 Development Corporation, a wholly-owned subsidiary of Holding. The common stock of Holding is held by the stockholders of Centex through a

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nominee arrangement and trades in tandem with the common stock of Centex. The stockholders of Centex elect the four-person board of directors of Holding, three of whom are independent outside directors who are not directors, affiliates or employees of Centex. Thus, through Holding, the stockholders of Centex control the general partner of the Partnership. The general partner, through its independent board and the independent board of Holding, including its non-executive Chairman, oversees the Partnership’s activities, including the acquisition, development, maintenance, operation and sale of properties. Consent of the limited partners for the activities of the Partnership is not required, and the limited partners cannot remove the general partner. As a result, Centex accounts for its limited partnership interest in the Partnership using the equity method of accounting for investments.

     See Note (H) to the consolidated financial statements of Centex included elsewhere in this Report for supplementary condensed combined financial statements for Centex and subsidiaries, Holding and subsidiary, and the Partnership and subsidiaries.

(C) STATEMENTS OF COMBINING CASH FLOWS — SUPPLEMENTAL DISCLOSURES

	For the Three Months
	Ended September 30,
	2003		2002
Cash Paid for Interest	$	3,310	$	4,207
Net Cash Paid for Taxes	$	480	$	31
Class C Units Issued for Land	$	2,812	$	—

	For the Six Months
	Ended September 30,
	2003		2002
Cash Paid for Interest	$	7,236	$	8,589
Net Cash Paid for Taxes	$	480	$	31
Class C Units Issued for Land	$	2,812	$	—

	For the Three Months
	Ended September 30,
	2003			2002
Total Interest Incurred	$	3,739		$	4,296
Interest Capitalized		(1,683	)		(1,459	)
Interest Expense	$	2,056		$	2,837

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	For the Six Months
	Ended September 30,
	2003			2002
Total Interest Incurred	$	7,320		$	8,830
Interest Capitalized		(3,050	)		(2,615	)
Interest Expense	$	4,270		$	6,215

(D) RELATED PARTY TRANSACTIONS

     At September 30, 2003 and March 31, 2003, Centex Homes had $6.2 million and $7.2 million, respectively, deposited with the Partnership as option deposits for the purchase of land. Centex Homes also entered into agreements to reimburse the Partnership for certain costs and fees incurred by the Partnership in the purchase and ownership of these tracts of land. During the three months ended September 30, 2003 and 2002, Centex Homes paid $0.7 million and $0.2 million, respectively, to the Partnership in fees and reimbursements pursuant to these agreements and $1.6 million and $3.0 million, respectively, for the purchase of residential lots. During the six months ended September 30, 2003 and 2002, Centex Homes paid $1.1 million and $1.6 million, respectively, to the Partnership in fees and reimbursements pursuant to these agreements and $13.6 million and $24.1 million, respectively, for the purchase of residential lots. The Partnership expects Centex Homes to pay an additional $19.0 million to the Partnership to complete the purchase of these tracts of land over the next three years.

     Construction Services has historically executed construction contracts with the Partnership. At March 31, 2003, contracts for the construction of two industrial facilities were completed and no additional contracts were outstanding. At September 30, 2003, a $10.6 million contract for the construction of an office building had been executed with the Partnership and was outstanding. During the three months ended September 30, 2003 and 2002, the Partnership paid $0.5 million and $1.2 million, respectively, to Construction Services pursuant to these contracts. During the six months ended September 30, 2003 and 2002, the Partnership paid $0.5 million and $4.7 million, respectively, to Construction Services pursuant to these contracts.

     During the six months ended September 30, 2003, the Partnership issued 2,812 Class C Units to Centex Homes in exchange for land with a fair market value of $2.8 million.

     During the six months ended September 30, 2003, a subsidiary of the Partnership entered into a lease agreement (the “Lease”) with a Centex subsidiary for 160,000 square feet of office space currently under construction in Lewisville, Texas. The Lease is for a ten-year primary term commencing upon the date that the premises is ready for occupancy.

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(E) COMPREHENSIVE INCOME

     A summary of comprehensive income for the three months ended September 30, 2003 and 2002 is presented below:

		For the Three Months
		Ended September 30,
		2003		2002
Net Earnings		$	13,690	$	3,607
Other Comprehensive Income (Loss):
	Foreign Currency Translation Adjustments		2,561		3,660
	Unrealized Gain (Loss) on Hedging Instruments		651		(592	)
Comprehensive Income		$	16,902	$	6,675

		For the Six Months
		Ended September 30,
		2003		2002
Net Earnings		$	17,103	$	3,304
Other Comprehensive Income (Loss):
	Foreign Currency Translation Adjustments		13,296		17,633
	Unrealized Gain (Loss) on Hedging Instruments		752		(826	)
Comprehensive Income		$	31,151	$	20,111

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(F) STOCKHOLDERS’ EQUITY

     A summary of changes in stockholders’ equity is presented below:

				Centex Development Company						3333 Holding Corporation
				L.P. and Subsidiaries						and Subsidiary
				Class B		General		Limited				Capital in		Retained
				Unit		Partner's		Partner's		Stock		Excess of		Earnings
		Combined		Warrants		Capital		Capital		Warrants		Par Value		(Deficit)
Balance at March 31, 2003		$	288,848	$	500	$	1,142	$	289,617	$	1	$	800	$	(2,070	)
Net Earnings (Loss)			17,103		—		—		17,142		—		—		(39	)
Issuance of Class C Units			2,812		—		—		2,812		—		—		—
Accumulated Other
Comprehensive Income:
	Foreign Currency Translation Adjustments		13,296		—		—		13,296		—		—		—
	Unrealized Gain on Hedging Instruments		752		—		—		752		—		—		—
Balance at September 30, 2003		$	322,811	$	500	$	1,142	$	323,619	$	1	$	800	$	(2,109	)

(G) BUSINESS SEGMENTS

     The Companies operate in three principal business segments: International Home Building, Commercial Development and Corporate-Other. All of the segments, except for International Home Building, operate in the United States. International Home Building’s accounting policies are the same as those described in the summary of significant accounting policies in the Companies’ latest Annual Report on Form 10-K.

     International Home Building acquires and develops residential properties and constructs single and multi-family housing units in the United Kingdom. Commercial Development develops office, industrial, retail and mixed-use projects, for sale and for investment. Corporate-Other is involved in the acquisition and disposition of land and other assets of the Partnership not identified with another specific business segment. Prior to April 1, 2003, the Companies operated a multi-family business segment (“Multi-Family”). Effective April 1, 2003, the operations of this segment were restructured to focus on leasing and disposition of remaining projects rather than new development. The operations of these projects are reflected in the Corporate-Other segment for the current and prior comparative period.

     Over the past year, we have taken advantage of the strong investor demand for quality properties, selling a number of matured assets and land positions. It is not currently anticipated that any significant capital will be allocated to new business development. Instead, our focus going forward will be on completing and leasing up our existing portfolio and continuing to take advantage of strong investor demand. The International Home Building segment will remain a focus as we continue to build on momentum in this segment.

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	For the Three Months Ended September 30, 2003
	Int'l Home			Commercial			Corporate-
	Building			Development			Other			Total
Revenues	$	95,981		$	2,244		$	2,332		$	100,557
Cost of Sales		(80,315	)		—			(1,626	)		(81,941	)
Selling, General and Administrative Expenses		(8,741	)		(1,457	)		(854	)		(11,052	)
Interest Expense		(559	)		(513	)		(442	)		(1,514	)
Earnings from Unconsolidated Subsidiaries and Other		—			107			—			107
Earnings (Loss) from Continuing Operations Before Income Taxes		6,366			381			(590	)		6,157
Earnings from Discontinued Operations Before Income Taxes		—			8,603			447			9,050
Earnings (Loss) Before Income Taxes	$	6,366		$	8,984		$	(143	)	$	15,207

	For the Three Months Ended September 30, 2002
	Int'l Home			Commercial			Corporate-
	Building			Development			Other			Total
Revenues	$	94,426		$	3,234		$	3,392		$	101,052
Cost of Sales		(81,979	)		(859	)		(3,015	)		(85,853	)
Selling, General and Administrative Expenses		(7,592	)		(1,623	)		(1,404	)		(10,619	)
Interest Expense		(683	)		(548	)		(164	)		(1,395	)
Earnings from Unconsolidated Subsidiaries and Other		—			585			—			585
Earnings (Loss) from Continuing Operations Before Income Taxes		4,172			789			(1,191	)		3,770
Earnings from Discontinued Operations Before Income Taxes		—			616			—			616
Earnings (Loss) Before Income Taxes	$	4,172		$	1,405		$	(1,191	)	$	4,386

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		For the Six Months Ended September 30, 2003
		Int'l Home			Commercial			Corporate-
		Building			Development			Other			Total
Revenues		$	184,737		$	4,011		$	14,833		$	203,581
Cost of Sales			(155,402	)		—			(13,588	)		(168,990	)
Selling, General and Administrative Expenses			(17,063	)		(2,675	)		(1,645	)		(21,383	)
Interest Expense			(1,108	)		(1,034	)		(857	)		(2,999	)
Earnings from Unconsolidated Subsidiaries and Other			—			242			—			242
Earnings (Loss) from Continuing Operations
	Before Income Taxes		11,164			544			(1,257	)		10,451
Earnings from Discontinued Operations Before Income Taxes			—			8,767			447			9,214
Earnings (Loss) Before Income Taxes		$	11,164		$	9,311		$	(810	)	$	19,665

	For the Six Months Ended September 30, 2002
	Int’l Home			Commercial			Corporate-
	Building			Development			Other			Total
Revenues	$	155,426		$	5,677		$	26,240		$	187,343
Cost of Sales		(135,744	)		(1,134	)		(24,178	)		(161,056	)
Selling, General and Administrative Expenses		(14,703	)		(3,407	)		(3,202	)		(21,312	)
Interest Expense		(1,177	)		(1,087	)		(952	)		(3,216	)
Earnings from Unconsolidated Subsidiaries and Other		—			575			—			575
Earnings (Loss) from Continuing Operations Before Income Taxes		3,802			624			(2,092	)		2,334
Earnings from Discontinued Operations Before Income Taxes		—			1,279			—			1,279
Earnings (Loss) Before Income Taxes	$	3,802		$	1,903		$	(2,092	)	$	3,613

(H) GOODWILL

     The Partnership’s International Home Building segment carries all of the Partnership’s goodwill, which arose from the April 15, 1999 acquisition of all of the voting shares of Fairclough Homes Group Limited, a British homebuilder (“Fairclough”). The carrying amount of goodwill was $32.5 million and $30.7 million at September 30, 2003 and March 31, 2003, respectively. The increase during the six months ended September 30, 2003 reflects the impact of foreign currency translation adjustments.

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(I) DERIVATIVES AND HEDGING

     The Partnership is exposed to the risk of interest rate fluctuations on its debt obligations. As part of its strategy to manage the obligations that are subject to changes in interest rates, the Partnership has entered into interest rate swap agreements, designated as cash flow hedges, on a portion of its debt. The swap agreements are recorded at aggregate fair value in Other Assets or Accrued Liabilities in the condensed combining balance sheets. To the extent the hedging relationship is effective, fluctuations in the fair value of the derivatives are deferred as a component of Accumulated Other Comprehensive Income. Fluctuations in the fair value of the ineffective portion of the derivatives would be reflected in the current period earnings. During the three and six months ended September 30, 2003 there was no hedge ineffectiveness related to these derivatives.

     The swaps expire in March 2006. Amounts to be received or paid as a result of the swap agreements are recognized as adjustments to interest incurred on the related debt instrument. As of September 30, 2003, the Accumulated Other Comprehensive Gain was $408 thousand ($286 thousand net of tax).

(J) RECENT ACCOUNTING PRONOUNCEMENTS

     In August 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 144 (“SFAS 144”), “Accounting for the Impairment or Disposal of Long-Lived Assets,” which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The statement was effective for the Companies beginning April 1, 2002.

     Due to the adoption of SFAS 144, the Companies now report assets identified subsequent to March 31, 2002 as held for sale (as defined by SFAS 144), if any, and any such assets sold in the current period, as discontinued operations. All results of these discontinued operations, less applicable income taxes, are included as discontinued operations in the statements of operations. Prior periods are restated for comparative purposes. Land assets, and any other assets sold prior to adoption of SFAS 144, are reported in continuing operations.

     In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”), which requires certain guarantees to be recorded at fair value. FIN 45 also requires a guarantor to make certain disclosures about guarantees, including product warranties, even when the likelihood of making any payments under the guarantee is remote. We have applied the recognition and measurement provisions of FIN 45 to guarantees issued or modified after December 31, 2002. The implementation of FIN 45 did not have a material impact on the Companies’ results of operations or financial position.

     In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”), which modifies the accounting for certain entities in which (1) equity investors do not have the characteristics of a controlling financial interest and/or (2) the entity is unable to finance its activities without additional subordinated financial support from other parties. Certain disclosure requirements of FIN 46 are effective for financial statements of interim or annual periods issued after January 31, 2003. See Note (K), “Investments in Certain Joint Ventures,” for disclosure of the Companies’ potential maximum exposure related to these entities.

     FIN 46 applies immediately to variable interest entities created, or in which an enterprise obtains an interest, after January 31, 2003. For variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003, FIN 46 applies to interim or annual periods ending after December 15, 2003. As discussed above in Note (B), “Organization,” Centex indirectly holds 100% of the Partnership’s

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Class A and Class C Units. The manner in which Centex reports its interest in the Partnership may be affected by this interpretation. Centex and the Companies are in the process of assessing the impact FIN 46 will have on their respective financial statements. See Note (P) to the consolidated financial statements of Centex included elsewhere in this Report for further discussion regarding this interpretation.

     In April 2003, the FASB issued Statement of Financial Accounting Standards No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities,” or SFAS No. 149. The statement amends and clarifies financial accounting and reporting for derivative instruments and hedging activities under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities,” or SFAS No. 133, by requiring that contracts with comparable characteristics be accounted for similarly, resulting in more consistent reporting of contracts as either derivatives or hybrid instruments. A portion of this statement is effective for contracts entered into or modified and for hedging relationships designated after June 30, 2003. The remainder of this statement codifies previously issued SFAS No. 133 implementation guidance, which retains its original effective dates. The implementation of SFAS No. 149 did not have a material impact on the Companies’ results of operations or financial position.

     In May 2003, the FASB issued Statement Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” (“SFAS No. 150”). The statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Certain provisions of this Statement are effective for financial instruments entered into or modified after May 31, 2003. In October 2003, FASB deferred indefinitely certain provisions of this Statement pertaining to non-controlling interests in limited life entities. The estimated settlement value of non-controlling interests in limited-life entities subject to the deferral is approximately $1.6 million as of September 30, 2003. The implementation of the provisions of SFAS No. 150 which are effective did not have an impact on the Company’s results of operations or financial position.

(K) INVESTMENTS IN CERTAIN JOINT VENTURES

     The Partnership conducts certain operations through its participation in joint ventures in which the Partnership holds less than a majority interest. These non-consolidated joint ventures had total debt outstanding of approximately $37.7 million as of September 30, 2003 and $35.8 million as of March 31, 2003. The Partnership’s liability for the obligations of these non-consolidated joint ventures is limited to approximately $8.1 million as of September 30, 2003.

(L) COMMITMENTS AND CONTINGENCIES

     As of September 30, 2003, the Partnership had remaining commitments of approximately $14.4 million on construction contracts.

     To obtain construction financing for projects being developed by its subsidiaries, the Partnership is often required to guarantee, for the benefit of the construction lender, the completion of the project. In some instances, the Partnership has also executed recourse payment guarantees. At September 30, 2003, our subsidiaries had outstanding letters of credit of $3.9 million that primarily relate to development obligations of Multi-Family Communities.

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     Subsidiaries of the Partnership have also obtained demand notes or letters of credit from Centex for up to 10% of the construction loan commitment amount. These demand notes or letters of credit have been pledged or endorsed to the lenders as additional collateral on the construction loans, and may be called only in the event of an uncured default by the Partnership. This additional collateral totals approximately $1.1 million as of September 30, 2003.

     A subsidiary of the Partnership has agreed to develop a mixed-use project in Saint Paul, Minnesota consisting of various types of residential housing and ancillary retail space. The subsidiary has performed a significant portion of the infrastructure work and has sold several of the development sites to reputable home builders (including a 1.5 acre site to Centex Homes) pursuant to contracts that obligate the purchasers to fulfill certain of the seller’s development obligations at the project. The subsidiary of the Partnership (as the seller) retains the right to repurchase the site if the purchaser fails to commence the performance of such obligations. Ultimately, the Partnership’s subsidiary remains responsible for the development of the project.

     The subsidiary anticipates that the costs expended for infrastructure work will be reimbursed from the proceeds of a bond offering by a special taxing district established to aid in the development of the project. These costs will be reimbursed over time as improvements at the project generate property taxes sufficient to fund debt service on the bonds. A receivable of approximately $12.4 million is included in Other Receivables in the accompanying Combining Balance Sheets. The subsidiary has deferred recognition of this income as of September 30, 2003 as improvements to the project that will generate property taxes are not yet complete.

     In the normal course of its business, the Partnership issues certain representations, warranties and guarantees related to its home sales, land sales and building sales that are affected by the Financial Accounting Standards Board’s recent issuance of FIN 45. The implementation of FIN 45 did not result in a material effect on our consolidated financial condition or operations. See further discussion on our warranty liability below. See further discussion of FIN 45 in Note (J), “Recent Accounting Pronouncements.”

     International Home Building offers a ten-year limited warranty for most homes constructed and sold in the United Kingdom. The warranty covers defects in materials or workmanship in various components of the home for the first two years and designated structural elements of the home in the third through tenth years. International Home Building estimates the costs that may be incurred under its warranty program for which it will be responsible and records a liability at the time each home is closed. Factors that affect International Home Building’s warranty liability include the number of homes closed, historical and anticipated rates of warranty claims and cost per claim. International Home Building periodically assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary.

     Changes in International Home Building’s contractual warranty liability during the period are as follows:

Balance as of March 31, 2003	$	3,390
Warranties Issued		2,552
Settlements Made		(2,502	)
Balance as of September 30, 2003	$	3,440

(M) RECLASSIFICATIONS

     Certain prior year balances have been reclassified to be consistent with the September 30, 2003 presentation.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     On a combined basis, our revenues from continuing operations were $100.6 million for the three months ended September 30, 2003, a 0.50% decrease compared to our revenues from continuing operations of $101.1 million for the same period last year. On a combined basis, our revenues from continuing operations were $203.6 million for the six months ended September 30, 2003, an 8.7% increase over our revenues from continuing operations of $187.3 million for the same period last year. The revenue increase for the six months ended September 30, 2003 is primarily related to an increase in International Home Building’s unit closings and average unit sales price, offset by a reduction in Corporate-Other’s sale of residential lots to Centex Homes. Revenues from residential lot sales and commercial land sales can vary significantly from period to period.

     Our operating earnings from continuing operations for the three months ended September 30, 2003 were $6.2 million compared to operating earnings from continuing operations of $3.8 million for the same period last year. Our operating earnings from continuing operations for the six months ended September 30, 2003 were $10.5 million compared to operating earnings from continuing operations of $2.3 million for the same period last year. Our net earnings from continuing operations for the three months ended September 30, 2003 were $4.6 million compared to net earnings from continuing operations of $3.0 million for the same period last year. Our net earnings from continuing operations for the six months ended September 30, 2003 were $7.9 million compared to net earnings from continuing operations of $2.0 million for the same period last year. The increase in operating earnings and net earnings from continuing operations for the three and six months ended September 30, 2003 is primarily related to increased earnings from the International Home Building segment.

     Our net earnings from discontinued operations for the three and six months ended September 30, 2003 were $9.1 million and $9.2 million, respectively. In accordance with Statement of Financial Accounting Standards No. 144, or SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” effective for us beginning April 1, 2002, we now report assets as discontinued operations if such assets are held for sale (as defined by SFAS 144), or if such assets are sold in the current period. We sold eight of these properties during the six months ended September 30, 2003. Land assets are reported in continuing operations.

     Prior to April 1, 2003, the Companies operated a multi-family business segment. Effective April 1, 2003, the operations of this segment were restructured to focus on leasing and disposition of remaining projects rather than new development. The operations of these projects are reflected in the Corporate-Other segment for the current and prior comparative period.

     Over the past year, we have taken advantage of the strong investor demand for quality properties, selling a number of matured assets and land positions. It is not currently anticipated that any significant capital will be allocated to new business development. Instead, our focus going forward will be on completing and leasing up our existing portfolio and continuing to take advantage of strong investor demand. The International Home Building segment will remain a focus as we continue to build on momentum in this segment.

     Any reference herein to we, us or our includes 3333 Holding Corporation and subsidiary and Centex Development Company, L.P. and subsidiaries.

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INTERNATIONAL HOME BUILDING

     The following summarizes International Home Building’s results for the three and six months ended September 30, 2003 compared to the same periods last year (dollars in thousands, except per unit data):

	For the Three Months Ended September 30,
	2003						2002
Revenues — Home Building	$	94,993			99.0	%	$	90,585			95.9	%
Revenues — Land Sales and Other		988			1.0	%		3,841			4.1	%
Cost of Sales — Home Building		(80,299	)		(83.7	%)		(78,159	)		(82.9	%)
Cost of Sales — Land Sales		(16	)		—	%		(3,820	)		(4.0	%)
General and Administrative Expenses		(8,741	)		(9.1	%)		(7,592	)		(8.0	%)
Operating Earnings		6,925			7.2	%		4,855			5.1	%
Interest		(559	)		(0.6	%)		(683	)		(0.7	%)
Earnings (Loss) Before Income Taxes	$	6,366			6.6	%	$	4,172			4.4	%
				% Change						% Change
Units Closed		379			(1.0	%)		383			21.6	%
Average Unit Sales Price	$	250,641			6.0	%	$	236,514			15.4	%
Average Operating Earnings Per Unit	$	18,272			44.1	%	$	12,676			(4.5	%)
Backlog Units		406			4.6	%		388			55.8	%

	For the Six Months Ended September 30,
	2003						2002
Revenues — Home Building	$	183,739			99.5	%	$	151,557			97.5	%
Revenues — Land Sales and Other		998			0.5	%		3,869			2.5	%
Cost of Sales — Home Building		(155,378	)		(84.2	%)		(131,924	)		(84.9	%)
Cost of Sales — Land Sales		(24	)		—	%		(3,820	)		(2.4	%)
General and Administrative Expenses		(17,063	)		(9.2	%)		(14,703	)		(9.5	%)
Operating Earnings		12,272			6.6	%		4,979			3.2	%
Interest		(1,108	)		(0.6	%)		(1,177	)		(0.8	%)
Earnings (Loss) Before Income Taxes	$	11,164			6.0	%	$	3,802			2.4	%
				% Change						% Change
Units Closed		692			6.1	%		652			6.2	%
Average Unit Sales Price	$	265,519			14.2	%	$	232,449			18.2	%
Average Operating Earnings Per Unit	$	17,734			132.2	%	$	7,637			(28.5	%)
Backlog Units		406			4.6	%		388			55.8	%

     International Home Building’s revenues for the three months ended September 30, 2003 increased by $1.6 million from revenues for the same period last year. This increase is comprised of $5.4 million from an increase in the average unit sales price offset by $0.9 million from a decrease in the number of units closed and a $2.9 million decline in other revenues. Home sales totaled 379 units during the three months ended September 30, 2003, compared to 383 units during the same period in the preceding year, representing a 1.0% decrease. International Home Building’s revenues for the six months ended September 30, 2003 increased by

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$29.3 million from revenues for the same period last year. This increase is comprised of $22.9 million from an increase in the average unit sales price, $9.3 million from an increase in the number of units closed and a $2.9 million decline in other revenues. Home sales totaled 692 units during the six months ended September 30, 2003, compared to 652 units during the same period in the preceding year, representing a 6.1% increase.

     International Home Building’s gross homebuilding margins increased for the three months ended September 30, 2003 to 15.5% from 13.7% and increased for the six months ended September 30, 2003 to 15.4% from 13.0% compared to the same periods last year. The improvement in gross margins was primarily due to an increase in the average unit sales price, partially offset by increases in labor costs caused by a shortage of skilled labor.

     International Home Building’s general and administrative expenses, as a percentage of revenues, increased 1.1% and decreased 0.3%, respectively, for the three and six months ended September 30, 2003 compared to the same periods last year, primarily due to the addition of personnel, offset by the impact of increased revenues in the six months ended September 30, 2003.

     International Home Building’s financial statements are affected by fluctuations in exchange rates. International Home Building, whose functional currency is the British pound sterling, translates its financial statements into U.S. dollars. Income statement accounts are translated using the average exchange rate for the period, except for significant, non-recurring transactions that are translated at the rate in effect as of the date of the transaction. For the three months ended September 30, 2003 and 2002, respectively, the average exchange rate used for translation was 1.61 and 1.55, representing an increase of 3.9%. For the six months ended September 30, 2003 and 2002, respectively, the average exchange rate used for translation was 1.62 and 1.51, representing an increase of 7.3%.

     The backlog of homes sold but not closed at September 30, 2003 was 406 units, 4.6% more than the 388 units at the same point in the preceding year.

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COMMERCIAL DEVELOPMENT

     The following summarizes Commercial Development’s results for the three and six months ended September 30, 2003, compared to the same periods last year (dollars and square feet in thousands):

	For the Three Months
	Ended September 30,
	2003			2002
Sales Revenues	$	—		$	1,610
Rental Income and Other Revenues		2,244			1,624
Cost of Sales		—			(859	)
Selling, General and Administrative Expense		(1,142	)		(1,381	)
Interest		(513	)		(548	)
Operating Earnings Before Depreciation		589			446
Depreciation and Amortization		(315	)		(242	)
Earnings (Loss) from Unconsolidated Subsidiaries and Other		107			585
Operating Earnings		381			789
Earnings (Loss) from Discontinued Operations		8,603			616
Earnings Before Income Taxes	$	8,984		$	1,405
Operating Square Footage at September 30		949			2,952

	For the Six Months
	Ended September 30,
	2003			2002
Sales Revenues	$	—		$	2,335
Rental Income and Other Revenues		4,011			3,342
Cost of Sales		—			(1,134	)
Selling, General and Administrative Expense		(2,041	)		(2,963	)
Interest		(1,034	)		(1,087	)
Operating Earnings Before Depreciation		936			493
Depreciation and Amortization		(634	)		(444	)
Earnings (Loss) from Unconsolidated Subsidiaries and Other		242			575
Operating Earnings		544			624
Earnings (Loss) from Discontinued Operations		8,767			1,279
Earnings Before Income Taxes	$	9,311		$	1,903
Operating Square Footage at September 30		949			2,952

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Commercial Development’s operations during the six months ended September 30, 2003 included:

• completion of shell construction for a 138,000 square foot retail project in Santa Clara, California;

• continued construction of a 62,000 square foot light industrial project in Camarillo, California;

• continued construction of a 39,000 square foot light industrial project in Oxnard, California; and

• commencement of construction on a 160,000 square foot office building in Lewisville, Texas.

Commercial Development’s discontinued operations during the six months ended September 30, 2003 included:

• sale of a 68,000 square foot industrial project in Gardner, Massachusetts;

• sale of a 55,000 square foot office project in Ann Arbor, Michigan; and

• sale of six industrial projects totaling approximately 1.2 million square feet in Charlotte, North Carolina.

     Sales revenues and cost of sales for the six months ended September 30, 2002 reflect the sale of a pad site at a retail project in Lewisville, Texas. Rental income and other revenues increased slightly as the result of the late fiscal 2004 completion and leasing of a retail center in Lewisville, Texas. Selling, general and administrative expense decreased as the result of staffing reductions, a decrease in incentive compensation and a decrease in property operation expenses.

     Interest expense has decreased slightly as the result of interest rate reductions on Commercial Development’s variable rate debt, and depreciation and amortization has increased as the result of the addition of approximately 300,000 square feet of projects not in service as of September, 2002. Earnings from unconsolidated entities have increased as the result of leasing at a retail project in Santa Clara, California.

	September 30, 2003					September 30, 2002
	(000’s)		Weighted			(000’s)		Weighted
	Rentable		Average			Rentable		Average
	Sq. Ft.		Occupancy			Sq. Ft.		Occupancy
Operating Properties*
Industrial		464		42.0	%		2,292		80.8	%
Office/Medical		289		97.6	%		602		82.0	%
Retail		196		93.5	%		58		63.4	%
		949		69.6	%		2,952		80.7	%
	(000's)					(000's)
	Rentable					Rentable
	Sq. Ft.					Sq. Ft.
Projects Under Construction*
Industrial		150					155
Office/Medical		—					—
Retail		160					136
		310					291

* Includes assets classified as Held for Sale.

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CORPORATE-OTHER

     The following summarizes the results of Corporate-Other for the three and six months ended September 30, 2003, compared to the same periods last year (dollars in thousands):

	For the Three Months
	Ended September 30,
	2003			2002
Revenues	$	2,332		$	3,392
Cost of Sales		(1,626	)		(3,015	)
Selling, General and Administrative Expenses		(854	)		(1,404	)
Interest Expense		(442	)		(164	)
Operating Loss		(590	)		(1,191	)
Earnings from Discontinued Operations		447			—
Loss Before Income Taxes	$	(143	)	$	(1,191	)

	For the Six Months
	Ended September 30,
	2003			2002
Revenues	$	14,833		$	26,240
Cost of Sales		(13,588	)		(24,178	)
Selling, General and Administrative Expenses		(1,645	)		(3,202	)
Interest Expense		(857	)		(952	)
Operating Loss		(1,257	)		(2,092	)
Earnings from Discontinued Operations		447			—
Loss Before Income Taxes	$	(810	)	$	(2,092	)

     Our Corporate-Other segment acquires and disposes of land and other assets that are not identified with another specific business segment. Revenues and cost of sales for the three and six months ended September 30, 2003 relate primarily to the sale of residential lots to Centex Homes. Revenues and cost of sales for the three and six months ended September 30, 2002 also relate primarily to sales of residential lots to Centex Homes and an unaffiliated third party.

     Selling, general and administrative expenses decreased 39.2% and 48.6% for the three and six months ended September 30, 2003 compared to the same periods last year, primarily due to staffing reductions in the former Multi-Family segment. Interest expense for the three and six months ended September 30, 2003 relates primarily to debt incurred to finance the purchase of these residential lots.

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LIQUIDITY AND CAPITAL RESOURCES

     We finance land acquisition and development activities primarily from financial institution borrowings, equity contributions from third-party investors in project-specific joint ventures, seller financing, issuance of Class C limited partnership units to Centex affiliates and cash flow from operations, which is comprised largely of proceeds from the sale of real estate and operating projects.

     We typically finance properties under development through short-term variable and fixed-rate secured construction loans, and to a limited extent depending on the timing of the project construction, cash flow from operations. Construction loans totaled $62.6 million, including $0.8 million related to assets held for sale, at September 30, 2003. Under the terms of various construction loan agreements, we are required to maintain certain minimum liquidity and net worth levels. At September 30, 2003, we were in compliance with these covenants.

     Permanent commercial project loans outstanding at September 30, 2003 totaled $17.4 million. The project loan is collateralized by a completed commercial property and has a fixed interest rate of 7.79%. This loan is non-recourse to the Partnership and its subsidiaries.

     No new seller-financed land loans were obtained during the quarters ended September 30, 2003 and 2002. Outstanding balances on seller-financed loans at September 30, 2003 totaled $19.0 million, with terms of up to three years and fixed interest rates ranging from 8.00% to 9.00%.

     The International Home Building segment has secured a revolving bank credit facility of 100 million in British pounds sterling. This facility expires in April 2006 and may be extended for up to two years with lender approval. Advances under this facility totaled £67.0 million, or $111.7 million, at September 30, 2003. Under the terms of this facility, the International Home Building segment is required to maintain certain leverage and interest coverage ratios and a minimum tangible net worth. At September 30, 2003, the International Home Building segment was in compliance with all of these covenants.

     During the quarter ended September 30, 2003, the Partnership issued 2,812 Class C Units to Centex Homes in exchange for land with a fair market value of $2.8 million.

     We believe that the revenues, earnings, and liquidity from the sale of single-family homes, land sales, the sale and permanent financing of development projects and issuance of Class C Units will be sufficient to provide the necessary funding for our current and future needs.

CERTAIN OFF-BALANCE SHEET AND OTHER OBLIGATIONS

     The following is a summary of certain off-balance sheet arrangements and other obligations and their possible effects on our liquidity and capital resources.

Joint Ventures

     We conduct certain operations through our participation in joint ventures in which we hold less than a majority interest. These non-consolidated joint ventures had total debt outstanding of approximately $37.7 million as of September 30, 2003 and $35.8 million as of March 31, 2003. Our liability for the obligations of these non-consolidated joint ventures is limited to approximately $8.1 million as of September 30, 2003.

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Letters of Credit, Guarantees and Leases

     At September 30, 2003, we had outstanding performance bonds and bank guarantees of $28.2 million that relate to projects undertaken by International Home Building and development obligations of International Home Building.

     To obtain construction financing for commercial and multi-family projects being developed by our subsidiaries, we are often required to guarantee, for the benefit of the construction lender, the completion of the project. In some instances, we have also executed partial recourse payment guarantees. At September 30, 2003, our subsidiaries had outstanding letters of credit of $3.9 million that primarily relate to development obligations of Multi-Family Communities.

     We expect that our subsidiaries will satisfy their loan and other contractual obligations in the ordinary course of business and in accordance with applicable contractual terms. As that occurs, our liability exposure will be decreased and, eventually, we will not have any continuing obligations with respect to these projects.

     We have no material capital or operating leases.

RECENT ACCOUNTING PRONOUNCEMENTS

     In August 2001, the Financial Accounting Standards Board, or FASB, issued Statement of Financial Accounting Standards No. 144, or SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The statement was effective for us beginning April 1, 2002.

     Due to the adoption of SFAS 144, we now report assets identified subsequent to March 31, 2002 as held for sale (as defined by SFAS 144), if any, and any such assets sold in the current period, as discontinued operations. All results of these discontinued operations, less applicable income taxes, are included as discontinued operations in the statements of operations. Prior periods are restated for comparative purposes. Land assets, and any other assets sold prior to adoption of SFAS 144, are reported in continuing operations.

     In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” or FIN 45, which requires certain guarantees to be recorded at fair value. FIN 45 also requires a guarantor to make certain disclosures about guarantees, including product warranties, even when the likelihood of making any payments under the guarantee is remote. We have applied the recognition and measurement provisions of FIN 45 to guarantees issued or modified after December 31, 2002. The implementation of FIN 45 did not have a material impact on our results of operations or financial position.

     In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities,” or FIN 46, which modifies the accounting for certain entities in which (1) equity investors do not have the characteristics of a controlling financial interest and/or (2) the entity is unable to finance its activities without additional subordinated financial support from other parties. Certain disclosure requirements of FIN 46 are effective for financial statements of interim or annual periods issued after January 31, 2003. FIN 46 applies immediately to variable interest entities created, or in which an enterprise obtains an interest, after January 31, 2003. For variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003, FIN 46 applies to interim or annual periods ending after December 15, 2003. As discussed in Note (B), “Organization,” of our Notes to Condensed Combining Financial Statements, Centex indirectly holds 100% of the Partnership’s Class A and Class C Units. The manner in which Centex reports its interest in

77

the Partnership may be affected by this interpretation. Centex and the Companies are in the process of assessing the impact FIN 46 will have on their respective financial statements. See Note (P) to the consolidated financial statements of Centex included elsewhere in this Report for further discussion regarding this interpretation.

     In April 2003, the FASB issued Statement of Financial Accounting Standards No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities,” or SFAS No. 149. The statement amends and clarifies financial accounting and reporting for derivative instruments and hedging activities under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities,” or SFAS No. 133, by requiring that contracts with comparable characteristics be accounted for similarly, resulting in more consistent reporting of contracts as either derivatives or hybrid instruments. A portion of this statement is effective for contracts entered into or modified and for hedging relationships designated after June 30, 2003. The remainder of this statement codifies previously issued SFAS No. 133 implementation guidance, which retains its original effective dates. The implementation of SFAS No. 149 did not have a material impact on the Companies’ results of operations or financial position.

     In May 2003, the FASB issued Statement Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” (“SFAS No. 150”). The statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Certain provisions of this Statement are effective for financial instruments entered into or modified after May 31, 2003. In October 2003, FASB deferred indefinitely certain provisions of this Statement pertaining to non-controlling interests in limited life entities. The estimated settlement value of non-controlling interest in limited life entities subject to the deferral is approximately $ 1.6 million as of September 30, 2003. The implementation of the provisions of SFAS No. 150 which are effective did not have an impact on the Company’s results of operations or financial position.

FORWARD-LOOKING STATEMENTS

     Various sections of this Report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when we are discussing our beliefs, estimates or expectations. These statements are not guarantees of future performance and involve a number of risks and uncertainties. Actual results and outcomes may differ materially from what is expressed or forecasted in these forward-looking statements. In addition to the specific uncertainties discussed elsewhere in this Report, the following risks and uncertainties may affect the actual performance and results of operations of the Companies:

• Our homebuilding, commercial, multi-family and land sales operations are somewhat cyclical and sensitive to changes in economic conditions, including levels of employment, consumer confidence and income, availability of financing, interest rate levels and changes in the economic condition of the local markets in which we operate.

• Our homebuilding, commercial, multi-family and land sales operations are also subject to other risks and uncertainties, including seasonal variations, adverse weather conditions, the availability of adequate land in desirable locations, the cost and availability of

78

labor and construction materials, labor disputes, the general demand for housing and new construction and the resale market for existing homes.

• All of our businesses operate in very competitive environments, which are characterized by competition from a number of other homebuilders, developers and landowners in each of the markets in which we operate.

• We are subject to various federal, state and local statutes, rules and regulations that could affect our businesses, including those concerning zoning, construction, protecting the environment and health. In addition, our businesses could be affected by changes in federal income tax policy, federal mortgage loan financing programs and by other changes in regulation or policy.

     Other risks and uncertainties may also affect the outcome of the actual performance and results of operations of the Partnership and Holding.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     There have been no material changes in the Companies’ market risk from March 31, 2003. For further information regarding the Companies’ market risk, refer to the Companies’ Annual Report on Form 10-K for the fiscal year ended March 31, 2003.

Item 4. Controls and Procedures

     An evaluation has been performed under the supervision and with the participation of the management of 3333 Holding Corporation and of Centex Development Company, L.P. (through its general partner, 3333 Holding Corporation), including the Chief Executive Officer and Chief Financial Officer of both 3333 Holding Corporation and 3333 Development Corporation, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2003. Based on that evaluation, the management of 3333 Holding Corporation and of Centex Development Company, L.P. (through its general partner, 3333 Holding Corporation), including the Chief Executive Officer and Chief Financial Officer of both 3333 Holding Corporation and 3333 Development Corporation, concluded that our disclosure controls and procedures were effective as of September 30, 2003 to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. There has been no change in our internal controls over financial reporting that occurred during the three months ended September 30, 2003 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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Part II. Other Information

Item 4. Submission of Matters to a Vote of Security Holders

     On July 17, 2003, we held our Annual Meeting of Stockholders. At the Annual Meeting, the following matters were resolved by vote:

(1) Josiah O. Low, III, David M. Sherer, Stephen M. Weinberg and Roger O. West were elected as directors to serve for a one-year term until the 2004 Annual Meeting. Voting results for these nominees are summarized as follows:

	Number of Shares
	For		Withheld		Broker Non-Votes
Josiah O. Low, III		779		40		—
David M. Sherer		779		40		—
Stephen M. Weinberg		779		40		—
Roger O. West		779		40		—

(2) Stockholders ratified the appointment of independent auditors for 2004 as set forth in Item 4 of the Centex Corporation Proxy Statement dated June 16, 2003. Voting results are summarized as follows:

Number of Shares
For		Against		Abstained		Broker Non-Votes
	781		6		—		—

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Item 6. Exhibits and Reports on Form 8-K

(3) Exhibits

10.1	Amendment No. 2 to Second Amended and Restated Agreement of Limited Partnership of the Partnership.
31.3	Certification of the Chief Executive Officer of 3333 Holding Corporation pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended.
31.4	Certification of the Chief Financial Officer of 3333 Holding Corporation pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended.
31.5	Certification of the Chief Executive Officer of 3333 Development Corporation, as the general partner of Centex Development Company, L.P., pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended.
31.6	Certification of the Chief Financial Officer of 3333 Development Corporation, as the general partner of Centex Development Company, L.P., pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended.
32.3	Certification of the Chief Executive Officer of 3333 Holding Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.4	Certification of the Chief Financial Officer of 3333 Holding Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.5	Certification of the Chief Executive Officer of 3333 Development Corporation, as the general partner of Centex Development Company, L.P., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.6	Certification of the Chief Financial Officer of 3333 Development Corporation, as the general partner of Centex Development Company, L.P., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(4) Reports on Form 8-K

The Registrant filed no reports on Form 8-K during the quarter ended September 30, 2003.

81

Signatures

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

	3333 HOLDING CORPORATION
	Registrant
November 10, 2003	/s/ Todd D. Newman
	Todd D. Newman
	Senior Vice President, Chief Financial
	Officer and Treasurer
	(principal financial officer and
	principal accounting officer)

82

Signatures

     Pursuant to the requirements of the Securities Exchange Act of 1934, 3333 Development Corporation, as general partner of, and on behalf of the registrant, has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CENTEX DEVELOPMENT COMPANY, L.P.
	Registrant
	By 3333 Development Corporation
	General Partner
November 10, 2003	/s/ Todd D. Newman
	Todd D. Newman
	Senior Vice President, Chief Financial
	Officer and Treasurer
	(principal financial officer and
	principal accounting officer)

83 EX-10.1(A) 3 d10298exv10w1xay.txt EX-10.1 CREDIT AGREEMENT EXHIBIT 10.1 CREDIT AGREEMENT among CENTEX CORPORATION, Borrower BANK OF AMERICA, N.A., Administrative Agent and THE LENDERS NAMED HEREIN, Lenders $800,000,000 DATED AS OF AUGUST 7, 2003 JPMORGAN CHASE BANK and ROYAL BANK OF SCOTLAND, Co-Syndication Agents CITICORP NORTH AMERICA, INC., Documentation Agent BANK ONE, NA, BNP PARIBAS, CREDIT LYONNAIS NEW YORK BRANCH, and CREDIT SUISSE FIRST BOSTON, Managing Agents BANC OF AMERICA SECURITIES LLC, Sole Lead Arranger and Sole Book Manager TABLE OF CONTENTS

Page SECTION 1 DEFINITIONS AND TERMS....................................................... 1 1.1 DEFINITIONS................................................................. 1 1.2 NUMBER AND GENDER OF WORDS; OTHER REFERENCES................................ 15 1.3 ACCOUNTING PRINCIPLES....................................................... 15 1.4 TIME REFERENCES............................................................. 15 SECTION 2 BORROWING PROVISIONS........................................................ 15 2.1 COMMITMENTS................................................................. 15 2.2 LENDERS; INCREASE IN TOTAL COMMITMENT....................................... 16 2.3 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS........................... 17 2.4 BORROWING PROCEDURE......................................................... 17 2.5 EXTENSION OF TERMINATION DATE............................................... 18 SECTION 3 TERMS OF PAYMENT............................................................ 19 3.1 NOTES AND PAYMENTS.......................................................... 19 3.2 INTEREST AND PRINCIPAL PAYMENTS............................................. 19 3.3 INTEREST OPTIONS............................................................ 20 3.4 QUOTATION OF RATES.......................................................... 20 3.5 DEFAULT RATE................................................................ 20 3.6 INTEREST RECAPTURE.......................................................... 20 3.7 INTEREST CALCULATIONS....................................................... 21 3.8 MAXIMUM RATE................................................................ 21 3.9 INTEREST PERIODS............................................................ 21 3.10 CONVERSIONS; CONTINUATIONS.................................................. 22 3.11 ORDER OF APPLICATION........................................................ 22 3.12 RIGHT OF SET-OFF; ADJUSTMENTS............................................... 23 3.13 BOOKING BORROWINGS.......................................................... 23 SECTION 4 CHANGE IN CIRCUMSTANCES..................................................... 23 4.1 INCREASED COST AND REDUCED RETURN........................................... 23

CREDIT AGREEMENT i 4.2 LIMITATION ON TYPES OF BORROWINGS............................................. 25 4.3 ILLEGALITY.................................................................... 25 4.4 TREATMENT OF AFFECTED LOANS................................................... 25 4.5 COMPENSATION.................................................................. 26 4.6 TAXES......................................................................... 26 SECTION 5 FEES.......................................................................... 27 5.1 TREATMENT OF FEES............................................................. 27 5.2 FEES OF ADMINISTRATIVE AGENT.................................................. 28 5.3 FACILITY FEES................................................................. 28 5.4 UTILIZATION FEE............................................................... 28 SECTION 6 CONDITIONS PRECEDENT.......................................................... 28 6.1 CONDITIONS PRECEDENT TO CLOSING............................................... 28 6.2 CONDITIONS TO ALL CREDIT EXTENSIONS........................................... 29 SECTION 7 REPRESENTATIONS AND WARRANTIES................................................ 30 7.1 PURPOSE OF CREDIT FACILITY.................................................... 30 7.2 EXISTENCE, GOOD STANDING, AUTHORITY, AND AUTHORIZATIONS....................... 30 7.3 SUBSIDIARIES; CAPITAL STOCK................................................... 30 7.4 AUTHORIZATION AND CONTRAVENTION............................................... 30 7.5 BINDING EFFECT................................................................ 31 7.6 FINANCIAL STATEMENTS.......................................................... 31 7.7 LITIGATION, CLAIMS, INVESTIGATIONS............................................ 31 7.8 TAXES......................................................................... 31 7.9 ENVIRONMENTAL MATTERS......................................................... 31 7.10 EMPLOYEE BENEFIT PLANS........................................................ 32 7.11 PROPERTIES; LIENS............................................................. 32 7.12 GOVERNMENT REGULATIONS........................................................ 32 7.13 TRANSACTIONS WITH AFFILIATES.................................................. 32 7.14 NO DEFAULT.................................................................... 32 7.15 SOLVENCY...................................................................... 32 7.16 COMPLIANCE WITH LEGAL REQUIREMENTS............................................ 33 7.17 FULL DISCLOSURE............................................................... 33 CREDIT AGREEMENT ii 7.18 SENIOR DEBT................................................................... 33 7.19 TAX SHELTER REGULATIONS....................................................... 33 SECTION 8 AFFIRMATIVE COVENANTS......................................................... 33 8.1 USE OF PROCEEDS............................................................... 33 8.2 BOOKS AND RECORDS............................................................. 33 8.3 ITEMS TO BE FURNISHED......................................................... 33 8.4 INSPECTIONS................................................................... 35 8.5 TAXES......................................................................... 35 8.6 PAYMENT OF OBLIGATIONS........................................................ 36 8.7 MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS................................ 36 8.8 INSURANCE..................................................................... 36 8.9 PRESERVATION AND PROTECTION OF RIGHTS......................................... 36 8.10 ENVIRONMENTAL LAWS............................................................ 36 8.11 COMPLIANCE WITH LEGAL REQUIREMENTS............................................ 36 8.12 DESIGNATION OF UNRESTRICTED SUBSIDIARIES...................................... 36 SECTION 9 NEGATIVE COVENANTS............................................................ 38 9.1 EMPLOYEE BENEFIT PLANS........................................................ 38 9.2 LIENS......................................................................... 38 9.3 SUBSIDIARY INDEBTEDNESS; LIMITATIONS ON UPSTREAMING........................... 39 9.4 TRANSACTIONS WITH AFFILIATES.................................................. 39 9.5 COMPLIANCE WITH DOCUMENTS..................................................... 39 9.6 ASSIGNMENT.................................................................... 40 9.7 FISCAL YEAR AND ACCOUNTING METHODS............................................ 40 9.8 GOVERNMENT REGULATIONS........................................................ 40 9.9 SALE OF ASSETS................................................................ 40 9.10 MERGERS AND DISSOLUTIONS; SALE OF CAPITAL STOCK............................... 40 9.11 NEW BUSINESS.................................................................. 40 9.12 FINANCIAL COVENANTS........................................................... 40 SECTION 10 DEFAULT...................................................................... 41 10.1 PAYMENT OF OBLIGATION......................................................... 41 10.2 COVENANTS..................................................................... 41 CREDIT AGREEMENT iii 10.3 DEBTOR RELIEF................................................................. 41 10.4 JUDGMENTS AND ATTACHMENTS..................................................... 42 10.5 GOVERNMENT ACTION............................................................. 42 10.6 MISREPRESENTATION............................................................. 42 10.7 CHANGE OF CONTROL............................................................. 42 10.8 DEFAULT UNDER OTHER DEBT AND AGREEMENTS....................................... 42 10.9 EMPLOYEE BENEFIT PLANS........................................................ 42 10.10 VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS................................. 43 SECTION 11 RIGHTS AND REMEDIES.......................................................... 43 11.1 REMEDIES UPON DEFAULT......................................................... 43 11.2 BORROWER WAIVERS.............................................................. 44 11.3 PERFORMANCE BY ADMINISTRATIVE AGENT........................................... 44 11.4 DELEGATION OF DUTIES AND RIGHTS............................................... 44 11.5 NOT IN CONTROL................................................................ 44 11.6 COURSE OF DEALING............................................................. 44 11.7 CUMULATIVE RIGHTS............................................................. 45 11.8 APPLICATION OF PROCEEDS....................................................... 45 11.9 CERTAIN PROCEEDINGS........................................................... 45 11.10 EXPENSES; INDEMNIFICATION..................................................... 45 SECTION 12 ADMINISTRATIVE AGENT......................................................... 46 12.1 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT......................... 46 12.2 DELEGATION OF DUTIES.......................................................... 46 12.3 LIABILITY OF ADMINISTRATIVE AGENT............................................. 47 12.4 RELIANCE BY ADMINISTRATIVE AGENT.............................................. 47 12.5 NOTICE OF EVENT OF DEFAULT.................................................... 47 12.6 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT............ 48 12.7 INDEMNIFICATION OF ADMINISTRATIVE AGENT....................................... 48 12.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY............................... 49 12.9 SUCCESSOR ADMINISTRATIVE AGENT................................................ 49 12.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIMS................................ 49 12.11 OTHER AGENT; ARRANGERS; AND MANAGERS.......................................... 50 CREDIT AGREEMENT iv SECTION 13 MISCELLANEOUS................................................................ 50 13.1 HEADINGS...................................................................... 50 13.2 NONBUSINESS DAYS.............................................................. 50 13.3 COMMUNICATIONS................................................................ 50 13.4 FORM AND NUMBER OF DOCUMENTS.................................................. 51 13.5 EXCEPTIONS TO COVENANTS....................................................... 51 13.6 SURVIVAL...................................................................... 51 13.7 GOVERNING LAW................................................................. 52 13.8 INVALID PROVISIONS............................................................ 52 13.9 ENTIRETY...................................................................... 52 13.10 JURISDICTION; VENUE; SERVICE OF PROCESS; JURY TRIAL........................... 52 13.11 AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS.................................. 53 13.12 MULTIPLE COUNTERPARTS......................................................... 53 13.13 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS........................ 54 13.14 DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN CIRCUMSTANCES... ............................................................. 56 13.15 LIMITED WAIVER................................................................ 56 13.16 CONFIDENTIALITY............................................................... 56 CREDIT AGREEMENT v SCHEDULES AND EXHIBITS Schedule 2.1 - Lenders and Commitments; Addresses for Notice Schedule 7.3 - Subsidiaries and Stock Exhibit A - Form of Revolving Note Exhibit B - Form of Compliance Certificate Exhibit C-1 - Form of Notice of Borrowing Exhibit C-2 - Form of Notice of Conversion/Continuation Exhibit C-3 - Form of Notice of Prepayment Exhibit D - Form of Opinion of Counsel Exhibit E - Form of Assignment and Acceptance Agreement CREDIT AGREEMENT vi CREDIT AGREEMENT THIS CREDIT AGREEMENT is entered into as of August 7, 2003 (the "CLOSING DATE") among CENTEX CORPORATION, a Nevada corporation ("BORROWER"), Lenders (hereinafter defined), and BANK OF AMERICA, N.A., as Administrative Agent (hereinafter defined). R E C I T A L S A. Borrower has requested that Lenders extend credit to Borrower in the form of this Agreement, providing for, among other things, a revolving credit facility in the aggregate principal amount of up to $800,000,000. B. Upon and subject to the terms and subject to the conditions of this Agreement, Lenders are willing to extend such credit to Borrower. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1 DEFINITIONS AND TERMS. 1.1 DEFINITIONS. As used herein: ACCEPTING LENDERS is defined in SECTION 2.5. ADJUSTED EURODOLLAR RATE means, for any Eurodollar Borrowing for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) determined by Administrative Agent to be equal to the quotient obtained by dividing (a) the Eurodollar Rate for such Eurodollar Borrowing for such Interest Period by (b) one (1) minus the Reserve Requirement for such Eurodollar Borrowing for such Interest Period. ADMINISTRATIVE AGENT means Bank of America, N.A., and its permitted successors and assigns as "Administrative Agent" for Lenders under this Agreement. AFFILIATE of any Person means any other Person who directly or indirectly controls, or is controlled by, or is under common control with, such Person, and, for purposes of this definition only, "control," "controlled by," and "under common control with" mean possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of voting securities, by contract, or otherwise). AGENT-RELATED PERSONS means Administrative Agent, together with its Affiliates (including Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates. AGREEMENT means this Credit Agreement (as the same may hereafter be amended, modified, supplemented, or restated from time to time). CREDIT AGREEMENT APPLICABLE LENDING OFFICE means, for each Lender and for each Type of Borrowing, the "Lending Office" of such Lender (or an Affiliate of such Lender) designated on SCHEDULE 2.1 or such other office as such Lender may from time to time specify to Administrative Agent and Borrower by written notice in accordance with the terms hereof as the office by which its Borrowings of such Type are to be made and maintained. APPLICABLE MARGIN means, as of any date of determination, the interest margin over the Prime Rate or the Adjusted Eurodollar Rate, and the applicable fees payable pursuant to SECTION 5.3 and SECTION 5.4, as the case may be, that corresponds to the Moody's Rating and the S & P Rating set forth below on such date of determination:

- -------------------------------------------------------------------------------------------------------------------- Applicable Applicable Margin for Margin for Applicable Applicable Moody's Prime Rate Eurodollar Margin for Margin for Level Rating S & P Rating Borrowings Borrowings Facility Fees Utilization Fees - -------------------------------------------------------------------------------------------------------------------- 1 A3 or higher A- or higher 0.0000% 0.5000% 0.1250% 0.1000% - -------------------------------------------------------------------------------------------------------------------- 2 Baa1 BBB+ 0.0000% 0.6000% 0.1750% 0.1250% - -------------------------------------------------------------------------------------------------------------------- 3 Baa2 BBB 0.0000% 0.7000% 0.2000% 0.1500% - -------------------------------------------------------------------------------------------------------------------- 4 Baa3 BBB- 0.0000% 0.8250% 0.2500% 0.2500% - -------------------------------------------------------------------------------------------------------------------- 5 Ba1 or lower BB+ or lower or 0.2500% 1.0000% 0.3000% 0.2500% or Not Rated Not Rated - --------------------------------------------------------------------------------------------------------------------

For purposes of the foregoing: (a) if the Moody's Rating and the S & P Rating shall fall within different LEVELS, then the Applicable Margin shall be determined by reference to the numerically higher LEVEL (e.g., if the S & P Rating is in LEVEL 1 and the Moody's Rating is in LEVEL 2, then the Applicable Margin shall be determined by reference to LEVEL 2); and (b) if either Moody's or S & P no longer publishes ratings and Borrower and Administrative Agent cannot agree on another ratings agency to replace Moody's or S & P, as the case may be, then the Moody's Rating or the S & P Rating, as the case may be, shall be deemed to be "Not Rated." Each change in the Applicable Margin shall be effective, in the case of an upgrade, immediately following Administrative Agent's receipt of notice from Borrower, as required in SECTION 8.3(G), of a change in the Moody's Rating or the S & P Rating, and in the case of a downgrade, on the date of the public announcement thereof. APPROVED FUND is defined in SECTION 13.13(G). ARRANGER means Banc of America Securities LLC, and its successors and permitted assigns in its capacity as "Sole Lead Arranger" under the Loan Documents. ATTORNEY COSTS means and includes all reasonable fees, expenses, and disbursements of any law firm or other external counsel. CREDIT AGREEMENT 2 AUTHORIZATIONS means all filings, recordings, and registrations with, and all validations or exemptions, approvals, orders, authorizations, consents, franchises, licenses, certificates, and permits from, any Governmental Authority. BORROWER is defined in the preamble to this Agreement. BORROWING means any amount disbursed (a) by one or more Credit Parties to Borrower under the Loan Documents, whether such amount constitutes an original disbursement of funds or the Conversion or Continuation of an amount outstanding, or (b) by any Credit Party in accordance with, and to satisfy the obligations of Borrower under, any Loan Document. BORROWING DATE means any date on which a Credit Extension is made by Lenders pursuant to the receipt by Administrative Agent of a Notice of Borrowing from Borrower. BUSINESS DAY means (a) for all purposes, any day other than Saturday, Sunday, and any other day on which commercial banking institutions are required or authorized by any Legal Requirement to be closed at the place of Administrative Agent's Payment Office or payments cannot be made on the United States Fedwire System, and (b) in addition to the foregoing, in respect of any Eurodollar Borrowing, a day on which dealings in United States dollars are conducted in the London interbank market and commercial banks are open for international business in London. CAPITALIZED LEASE OBLIGATIONS means all obligations under Capital Leases taken at the amount thereof accounted for as liabilities in accordance with GAAP. CAPITAL LEASE means any capital lease or sublease which should be capitalized on a balance sheet in accordance with GAAP. CHANGE IN CONTROL means, with respect to any Person, any event or series of events by which: (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such Person or its Subsidiaries, and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a Person or group shall be deemed to have "beneficial ownership" of all securities that such Person or group has the right to acquire (such right, an "OPTION RIGHT"), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of fifty percent (50%) or more of the equity securities of such Person entitled to vote for members of the board of directors or equivalent governing body of such Person on a fully-diluted basis (and taking into account all such securities that such Person or group has the right to acquire pursuant to any option right); or (b) during any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of such Person cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body, or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent CREDIT AGREEMENT 3 governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any Person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors). CLOSING DATE is defined in the preamble to this Agreement. COMMITMENT means, for any Lender at any date of determination, the amount stated beside each Lender's name as set forth on SCHEDULE 2.1 or on the most-recently amended SCHEDULE 2.1, if any, prepared by Administrative Agent pursuant to SECTION 2.2 or SECTION 13.13 (which amount is subject to increase, reduction, or cancellation in accordance with this Agreement). COMPANIES means, as of any date, Borrower and each of its Subsidiaries, and COMPANY means any one of the Companies. COMPLIANCE CERTIFICATE means a certificate signed by a Responsible Officer, substantially in the form of EXHIBIT B. CONSEQUENTIAL LOSS is defined in SECTION 4.5. CONSOLIDATED ADJUSTED NET INCOME means, for any period of determination, consolidated net earnings (after income taxes and without deduction for losses) of the Companies, but excluding (a) gains from extraordinary items for such period, and (b) any aggregate net gain during such period arising from the sale, exchange, or other disposition of capital assets by the Companies (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets, and all securities (other than securities sold in the ordinary course of business)). CONSOLIDATED DEBT means, as of any date of determination, (a) all Debt of the Restricted Companies, on a consolidated basis, minus (b) Excess Cash not subject to any Liens or other restrictions not inherent in the particular investment or obligation; provided that, for purposes of SECTION 8.12, Consolidated Debt means, as of the date of determination, all Debt of the Restricted Companies, on a consolidated basis. CONSOLIDATED EBITDA means, for any period of determination and without duplication, the EBITDA of the Restricted Companies, on a consolidated basis. CONSOLIDATED INTEREST EXPENSE means, for any period of determination, the Interest Expense of the Restricted Companies, on a consolidated basis. CONSOLIDATED TANGIBLE NET WORTH means, as of any date of determination, Tangible Net Worth of the Companies (other than any Excluded Subsidiary), on a consolidated basis determined in accordance with GAAP. CONSTITUENT DOCUMENTS means, with respect to any Person, its articles or certificate of incorporation, bylaws, partnership agreement, organizational documents, limited liability company agreement, trust agreement, or such other documents as may govern such Person's formation, organization, and management. CREDIT AGREEMENT 4 CONTINGENT OBLIGATIONS means as to any Person any obligation of such Person guaranteeing any Debt, leases, dividends, or other obligations ("PRIMARY OBLIGATIONS") of any other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and any other obligation of such Person, whether or not contingent, pursuant to which such Person is liable under or with respect to a primary obligation of a primary obligor, in each case that would be included on a balance sheet of such Person (or disclosed and assigned a monetary value in the footnotes thereto) properly prepared in accordance with GAAP as a "Contingent Obligation." CONTINUE, CONTINUATION, and CONTINUED refers to the continuation pursuant to SECTION 3.10 of a Eurodollar Borrowing from one Interest Period to the next Interest Period. CONVERT, CONVERSION, and CONVERTED refers to a conversion pursuant to SECTION 3.10 of one Type of Borrowing into another Type of Borrowing. CREDIT EXTENSION means, for any Credit Party, the funding of its portion of a Borrowing. CREDIT PARTIES means Administrative Agent and Lenders, and CREDIT PARTY means any one of the Credit Parties. CUMULATIVE CONSOLIDATED NET INCOME means the sum of Quarterly Consolidated Net Income for the fiscal quarter ended March 31, 2003, and for each succeeding fiscal quarter during the term hereof. CURRENT FINANCIALS means, at the time of any determination thereof, the most recently delivered to the Credit Parties of either (a) the Financial Statements for the fiscal year ended March 31, 2003, calculated on a consolidated basis for the Companies, or (b) the Financial Statements required to be delivered under SECTION 8.3(a) or 8.3(b), as the case may be. DEBT means (without duplication), for any Person, the sum of the following: (a) all liabilities, obligations, and indebtedness of such Person for money borrowed; (b) all liabilities, obligations, and indebtedness of such Person which is evidenced by bonds, notes, debentures, or other similar instruments; (c) all Capitalized Lease Obligations of such Person; (d) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person, and obligations of such Person under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business that are not past-due for more than ninety (90) days); (e) all Contingent Obligations of such Person; (f) all obligations of the type referred to in CLAUSES (a) and (b) preceding of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person); (g) the face amount of all letters of credit and banker's acceptances issued for the account of such Person, and without duplication, all drafts drawn and unpaid thereunder; (h) all Stock of such Person subject to repurchase or redemption by such Person other than at the sole option of such Person; (i) all obligations of such Person to purchase Stock (or other property) which arise out of or in connection with the sale by such Person of the same or substantially similar Stock (or property); and (j) all liabilities, obligations, and indebtedness of such Person arising under Financial Hedges entered into by such Person as determined in accordance with GAAP. DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States of America and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent transfer or conveyance, suspension of payments, or similar Legal Requirements from time to time in effect affecting the Rights of creditors generally. CREDIT AGREEMENT 5 DEFAULTING LENDER means, as of any date, any Lender that has (a) failed to make a Credit Extension required to be made by it hereunder, or (b) given notice to Administrative Agent or Borrower that it will not make, or that it has disaffirmed or repudiated any obligation to make, any Credit Extension hereunder (unless such notice is given by all Lenders). DEFAULT RATE means, (i) with respect to any Borrowing, on any date, a per annum rate of interest equal from day to day to the lesser of (a) the non-default interest rate applicable to such Borrowing, plus two percent (2%) and (b) the Maximum Rate, and (ii) with respect to any other Obligation under the Loan Documents, the lesser of (a) the Prime Rate plus the then-effective Applicable Margin for Prime Rate Borrowings, plus two percent (2%) and (b) the Maximum Rate. DOLLARS and the symbol $ mean lawful money of the United States of America. EBITDA means, with respect to any Person for any fiscal period, an amount equal to (a) consolidated net income of such Person for such period, minus (b) the sum of (i) income tax credits, (ii) interest income, (iii) gains from extraordinary items for such period, and (iv) any aggregate net gain during such period arising from the sale, exchange, or other disposition of capital assets by such Person (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets, and all securities (other than securities sold in the ordinary course of business)), in each case to the extent included in the calculation of consolidated net income of such Person for such period in accordance with GAAP, but without duplication, minus (c) any cash payments made in respect of any item of extraordinary loss accrued during a prior period and added back to EBITDA in such prior period pursuant to CLAUSE (d)(v) below, plus (d) the sum of (i) any provision for income taxes, (ii) Interest Expense, (iii) the amount of depreciation and amortization for such period, (iv) the amount of any deduction to consolidated net income as the result of any stock option expense, (v) the amount of any item of extraordinary loss not paid in cash in such period, and (vi) the absolute value of any aggregate net loss during such period arising from the sale, exchange, or other disposition of capital assets by such Person (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets, and all securities (other than securities sold in the ordinary course of business)), in each case to the extent included in the calculation of consolidated net income of such Person for such period in accordance with GAAP, but without duplication. ELIGIBLE ASSIGNEE is defined in SECTION 13.13(g). EMPLOYEE PLAN means an employee pension benefit plan covered by Title IV of ERISA and established or maintained by Borrower or any ERISA Affiliate, but not including any Multiemployer Plan. ENVIRONMENTAL LAW means any Legal Requirement relating to protection of the public health and welfare and/or the environment, including any Legal Requirement relating to: the generation, processing, treatment, storage, transport, disposal, investigation, and remediation or other management of Hazardous Materials; the storage, handling, use, and transport of chemicals and Hazardous Materials; and protection of areas of particular environmental concern, including wetlands, areas inhabited by endangered species, historic sites, and areas above protected aquifers. EQUITY ISSUANCE means the issuance or sale by any Restricted Company of any Stock, other than present and future Stock issued to other Companies or to employees, directors, or consultants of any of the Companies. CREDIT AGREEMENT 6 ERISA means the Employee Retirement Income Security Act of 1974, as amended, and the regulations and rulings thereunder. ERISA AFFILIATE means any company or trade or business (whether or not incorporated) which, for purposes of Title IV of ERISA, is a member of Borrower's controlled group or which is under common control with Borrower within the meaning of Section 414(b), (c), (m), or (o) of the Tax Code. EURODOLLAR BORROWING means a Borrowing bearing interest at the sum of the Adjusted Eurodollar Rate plus the Applicable Margin for Eurodollar Borrowings. EURODOLLAR RATE means, for any Eurodollar Borrowing for any Interest Period: (a) the rate per annum equal to the rate determined by Administrative Agent to be the offered rate that appears on the page of the Telerate screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period; or (b) if the rate referenced in the preceding CLAUSE (a) does not appear on such page or service or such page or service shall not be available, the rate per annum equal to the rate determined by Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period; or (c) if the rates referenced in the preceding CLAUSES (a) and (b) are not available, the rate per annum determined by Administrative Agent as the rate of interest at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Borrowing being made, continued, or converted by Administrative Agent and with a term equivalent to such Interest Period would be offered by Administrative Agent's London branch to major banks in the London interbank eurodollar market at their request at approximately 4:00 p.m. (London time) two (2) Business Days prior to the first day of such Interest Period. EVENT OF DEFAULT is defined in SECTION 10. EXCESS CASH means, for the Restricted Companies as of any date of determination thereof, (a) cash, plus (b) time deposits with, and certificates of deposit, bank notes and bankers' acceptances issued by, any Lender or any domestic bank, savings bank or savings and loan association having capital, surplus and undivided profits aggregating at least $1,000,000,000, plus (c) investments in direct obligations of the United States of America or any agency, government-sponsored enterprise or instrumentality thereof, or obligations fully guaranteed by the United States of America or any agency, government-sponsored enterprise or instrumentality thereof, provided that such obligations mature within one (1) year of the date of acquisition thereof, plus (d) investments in commercial paper rated (at the time of purchase) in one of the two highest short-term rating categories by two (2) or more national credit rating agencies and maturing not more than two hundred and seventy (270) days from the date of creation thereof, plus (e) repurchase agreements involving any of the obligations described in CLAUSES (b), (c) and (d) above so long as the other party to the repurchase agreement has short-term unsecured debt obligations or short-term deposits rated (at the time of purchase) in the highest grade by two (2) or more national credit rating agencies, plus (f) investments in direct obligations of any money-market fund or CREDIT AGREEMENT 7 other similar investment company that is rated "AAAm" or "AAAm-G" by S & P and "Aaa" by Moody's or whose investments consist, directly or indirectly, primarily of short-term money market securities, which may include obligations described in the foregoing clauses of this definition, minus (g) $15,000,000; provided that in no event shall Excess Cash be less than zero. EXCLUDED SUBSIDIARY means any Unrestricted Subsidiary that has a continuing default or event of default under any Debt in excess of $20,000,000 at any time. EXCLUDED TAXES is defined in SECTION 4.6(a). EXHIBIT means an exhibit to this Agreement unless otherwise specified. EXISTING CREDIT FACILITY means the Credit Agreement dated as of August 9, 2000, among Centex Corporation, as Borrower, the Lenders party thereto, and Bank of America, N.A., as Administrative Agent, as such agreement may have been modified, amended, or restated. EXTENSION EFFECTIVE DATE is defined in SECTION 2.5. EXTENSION REQUEST is defined in SECTION 2.5. FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with member banks of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, then the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, then the Federal Funds Rate for such day shall be the average rate charged to Administrative Agent (in its individual capacity) on such day on such transactions. FINANCIAL HEDGE means a swap, collar, floor, cap, or other contract which is intended to reduce or eliminate the risk of fluctuations in interest rates. FINANCIAL STATEMENTS means balance sheets, statements of operations, statements of shareholders' investments, and statements of cash flows prepared in accordance with GAAP, which statements of operations and statements of cash flows shall be in comparative form to the corresponding period of the preceding fiscal year, and which balance sheets and statements of shareholders' investments shall be in comparative form to the prior fiscal year-end figures. FUND is defined in SECTION 13.13(g). GAAP means generally accepted accounting principles in the United States of America as set forth in the opinions and pronouncements of the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board which are applicable from time to time. GOVERNMENTAL AUTHORITY means any applicable (a) local, state, municipal, federal, or foreign judicial, executive, or legislative instrumentality, (b) private arbitration board or panel, or (c) central bank. CREDIT AGREEMENT 8 HAZARDOUS MATERIAL means "hazardous substance," "pollutant or contaminant," and "petroleum," and "natural gas liquids" as those terms are defined or used in Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 96.01 et seq.), as amended or supplemented from time to time, and any other substances regulated because of their effect or potential effect on public health and the environment including PCBs, lead paint, asbestos, urea formaldehyde, radioactive materials, putrescible materials, petroleum distillates, medical waste, and infectious materials. INCREASING LENDER is defined in SECTION 2.2(b). INDEMNIFIED LIABILITIES is defined in SECTION 11.10(b). INDEMNITEES is defined in SECTION 11.10(b). INTEREST COVERAGE RATIO means, as of any date of determination thereof, the ratio of (a) Consolidated EBITDA, plus net income of each Unrestricted Subsidiary (without duplication and determined in accordance with GAAP) that is earned and eligible for distribution, to (b) Consolidated Interest Expense, in each case for the most-recent four (4) fiscal quarters ending on or prior to the date of determination. INTEREST EXPENSE means, for any period of calculation thereof, for any Person, the aggregate amount of all interest (including facility and utilization fees) on all Debt of such Person, whether paid in cash or accrued as a liability and payable in cash during such period, including (a) imputed interest on Capitalized Lease Obligations, (b) the amortization of any original issue discount on any Debt, (c) the interest portion of any deferred payment obligation, (d) all commissions, discounts, and other fees and charges owed with respect to letters of credit or bankers' acceptance financing, (e) net costs associated with Financial Hedges, and (f) the interest component of any Debt that is guaranteed or secured by such Person, and all cash premiums or penalties for the repayment, redemption, or repurchase of Debt. INTEREST PERIOD is determined in accordance with SECTION 3.9. LEGAL REQUIREMENTS means all applicable statutes, laws, treaties, ordinances, tariff requirements, rules, regulations, orders, writs, injunctions, decrees, judgments, opinions, or interpretations of any Governmental Authority. LENDERS means, on any date of determination, the financial institutions named on SCHEDULE 2.1 (as the same may be amended from time to time by Administrative Agent to reflect the admission of a Subsequent Lender in accordance with SECTION 2.2(b) and assignments made in accordance with SECTION 13.13(b)), and subject to the terms and conditions of this Agreement, their respective successors and assigns. LEVERAGE RATIO means, as of any date of determination thereof, the ratio of (a) Consolidated Debt outstanding on such date minus Subordinated Debt in an amount not to exceed $200,000,000, to (b) the sum of (i) Consolidated Debt outstanding on such date, plus (ii) Consolidated Tangible Net Worth determined in accordance with GAAP. LIEN means any lien, mortgage, security interest, pledge, assignment, charge, title retention agreement, or encumbrance of any kind, and any other Right of or arrangement with any creditor (other CREDIT AGREEMENT 9 than under or relating to subordination or other intercreditor arrangements) to have its claim satisfied out of any property or assets, or the proceeds therefrom, prior to the general creditors of the owner thereof. LITIGATION means any action by or before any Governmental Authority. LOAN DOCUMENTS means (a) this Agreement and the Notes, (b) all agreements, documents, or instruments in favor of any Credit Party ever delivered by Borrower pursuant to this Agreement or otherwise delivered in connection with all or any part of the Obligation, and (c) any and all future renewals, extensions, restatements, reaffirmations, or amendments of, or supplements to, all or any part of the foregoing. MATERIAL ADVERSE EVENT means any set of one or more circumstances or events which, individually or collectively, could reasonably be expected to result in any (a) material impairment of the ability of Borrower to perform any of its payment or other material obligations under the Loan Documents, (b) material and adverse effect on the business, properties, condition (financial or otherwise), or results of operations of the Companies (taken as a whole), (c) material and adverse effect on the validity or enforceability of any of the Loan Documents or the Rights of any Credit Party thereunder, or (d) Potential Default or Event of Default. The term Material Adverse Event is used in this Agreement to qualify certain of the representations, warranties, and covenants contained herein, but is not, in and of itself, a condition precedent to any Borrowings hereunder or an independent representation (except as provided in the last sentence of SECTION 7.6), covenant, or Event of Default. MAXIMUM AMOUNT and MAXIMUM RATE respectively mean, for each Lender, the maximum non-usurious amount and the maximum non-usurious rate of interest which, under all Legal Requirements, such Lender is permitted to contract for, charge, take, reserve, or receive on the Obligation. MOODY'S means Moody's Investors Service, Inc. and any successor thereto. MOODY'S RATING means the most recently-announced rating from time to time of Moody's assigned to any class of long-term senior, unsecured debt securities issued by Borrower, as to which no letter of credit, guaranty, or third-party credit support is in place, regardless of whether all or any part of such Debt has been issued at the time such rating was issued. MULTIEMPLOYER PLAN means a multiemployer plan as defined in Section 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Tax Code to which any Company or any ERISA Affiliate is making, or has made, or is accruing, or has accrued, an obligation to make contributions. NET PROCEEDS means, with respect to any Equity Issuance by Borrower or any Restricted Subsidiary, the amount of cash received by such Company in connection with such transaction after deducting therefrom the aggregate, without duplication, of the following amounts to the extent properly attributable to such transaction: (a) reasonable brokerage commissions, attorneys' fees, finder's fees, financial advisory fees, accounting fees, underwriting fees, investment banking fees, and other similar commissions and fees (and expenses and disbursements of any of the foregoing), in each case, to the extent paid or payable by such Company; (b) printing and related expenses and filing, recording, or registration fees or charges or similar fees or charges paid by such Company; and (c) taxes paid or payable by such Company to any Governmental Authority as a result of such transaction. CREDIT AGREEMENT 10 NOTES means each revolving note substantially in the form of EXHIBIT A, executed by Borrower, and all modifications, amendments, renewals, extensions, and restatements of all or any part thereof, and NOTE means any one of the Notes. NOTICE OF BORROWING means a notice substantially in the form of EXHIBIT C-1. NOTICE OF CONVERSION/CONTINUATION means a notice substantially in the form of EXHIBIT C-2. NOTICE OF PREPAYMENT means a notice substantially in the form of EXHIBIT C-3. OBLIGATION means all present and future indebtedness, liabilities, and obligations, and all renewals and extensions thereof, or any part thereof, now or hereafter owed to any Credit Party or any Affiliate of any Credit Party by Borrower pursuant to any Loan Document, together with all interest accruing thereon, fees, costs, and expenses (including all reasonable Attorney Costs incurred in the enforcement or collection thereof) payable under the Loan Documents. PARTICIPANT is defined in SECTION 13.13(d). PAYMENT OFFICE means Administrative Agent's office located at Dallas, Texas or such other office as Administrative Agent shall notify Borrower and the Credit Parties in writing. PBGC means the Pension Benefit Guaranty Corporation, or any successor thereof, established pursuant to ERISA. PERMITTED LIENS means Liens permitted under SECTION 9.2 as described in such SECTION. PERSON means any individual, entity, or Governmental Authority. POTENTIAL DEFAULT means the occurrence of any event or existence of any circumstance which, with the giving of notice or lapse of time or both, would become an Event of Default. PRIME RATE means, for any day, a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate for such day plus one-half of one percent (0.5%), and (b) the per annum rate of interest in effect for such day as publicly announced from time to time by Bank of America, N.A. as its prime rate, which rate may not be the lowest rate of interest charged by Bank of America, N.A. to its customers for such day. The "prime rate" is a rate set by Bank of America, N.A. based upon various factors including its costs and desired return, general economic conditions, and other factors, and it is used as a reference point for pricing of some loans which may be priced at, above, or below such announced rate. Any change in Bank of America, N.A.'s "prime rate" or the Federal Funds Rate shall be effective on the effective date of such change in the "prime rate" or the Federal Funds Rate. PRIME RATE BORROWING means a Borrowing bearing interest at the sum of the Prime Rate plus the Applicable Margin for Prime Rate Borrowings. PRINCIPAL DEBT means, for a Credit Party and at any time, the unpaid principal balance of all outstanding Borrowings from such Credit Party hereunder as of such date. PRO RATA or PRO RATA PART, for each Lender, means (a) for purposes of any commitment to fund Borrowings in respect of this Agreement, respectively, the percentage stated opposite such Lender's name CREDIT AGREEMENT 11 as set forth on SCHEDULE 2.1 or on the most recently amended SCHEDULE 2.1, if any, prepared by Administrative Agent pursuant to SECTION 2.2 or SECTION 13.13, (b) for purposes of sharing any amount or fee payable to any Lender, the proportion which the portion of the Principal Debt owed to such Lender bears to the Principal Debt owed to all Lenders at the time in question, and (c) for all other purposes, the proportion which the portion of the Principal Debt owed to such Lender bears to the Principal Debt owed to all Lenders at the time in question, or if no Principal Debt is outstanding, then the proportion that the aggregate of such Lender's Commitment bears to the Total Commitment then in effect. QUARTERLY CONSOLIDATED NET INCOME means, for any fiscal quarter, Consolidated Adjusted Net Income for such quarter; provided that if Consolidated Adjusted Net Income for any quarter is less than $0, then Quarterly Consolidated Net Income for such fiscal quarter shall be equal to $0. RECOURSE DEBT means all Debt of each Unrestricted Subsidiary on which any Restricted Company is obligated, as a guarantor or otherwise. REGISTER is defined in SECTION 13.13(c). REGULATION D means Regulation D of the Board of Governors of the Federal Reserve System, as amended. REGULATION U means Regulation U of the Board of Governors of the Federal Reserve System, as amended. REJECTED AMOUNT is defined in SECTION 2.5(a). REJECTING LENDERS is defined in SECTION 2.5(c). RELEASE means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment (including air, groundwater, surface water, soil, other environmental media, or natural resources). REPORTABLE EVENT shall have the meaning specified in Section 4043 of ERISA or the regulations issued thereunder in connection with an Employee Plan, excluding events for which the notice requirement is waived under applicable PBGC regulations other than those events described in Sections 2615.11, 2615.15 and 2615.19 of such regulations, including each such provision as it may subsequently be renumbered. REPRESENTATIVES means representatives, officers, directors, employees, attorneys, and agents. REQUIRED LENDERS means (a) on any date of determination prior to termination of the Total Commitment, those Lenders (other than Defaulting Lenders) collectively holding more than fifty percent (50%) of the Total Commitment (excluding the Commitments of any Defaulting Lenders), or (b) on any date of determination occurring after the Total Commitment has terminated, those Lenders collectively holding more than fifty percent (50%) of the outstanding Total Principal Debt (excluding the Principal Debt of any Defaulting Lenders). RESERVE REQUIREMENT means, at any time, the maximum rate at which reserves (including any marginal, special, supplemental, or emergency reserves) are required to be maintained under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) by CREDIT AGREEMENT 12 member banks of the Federal Reserve System against "Eurocurrency liabilities" (as such term is used in Regulation D). Without limiting the effect of the foregoing, the Reserve Requirement shall reflect any other reserves required to be maintained by such member banks with respect to (a) any category of liabilities which includes deposits by reference to which the Adjusted Eurodollar Rate is to be determined, or (b) any category of extensions of credit or other assets which include Eurodollar Borrowings. The Adjusted Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Reserve Requirement. RESPONSIBLE OFFICER of Borrower means its chairman, vice chairman, president, chief executive officer, chief financial officer, executive vice president, senior vice president, or treasurer, or, for all purposes under the Loan Documents, any other officer designated from time to time by the Board of Directors or Executive Committee of the Board of Directors of Borrower, which designated officer is acceptable to Administrative Agent. RESTRICTED COMPANY means Borrower and each Restricted Subsidiary. RESTRICTED SUBSIDIARY means each of Borrower's Subsidiaries, other than Unrestricted Subsidiaries. RIGHTS means rights, remedies, powers, privileges, and benefits. SCHEDULE means, unless specified otherwise, a schedule attached to this Agreement, as the same may be supplemented and modified from time to time in accordance with the terms of the Loan Documents. SOLVENT means, as to a Person, that (a) the aggregate fair market value of such Person's assets exceeds its liabilities (whether contingent, subordinated, unmatured, unliquidated, or otherwise), (b) such Person has sufficient cash flow to enable it to pay its Debts as they mature, and (c) such Person does not have unreasonably small capital to conduct such Person's businesses. S & P means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto. S & P RATING means the most recently-announced rating from time to time of S & P assigned to any class of long-term senior, unsecured debt securities issued by Borrower, as to which no letter of credit, guaranty, or third-party credit support is in place, regardless of whether all or any part of such Debt has been issued at the time such rating was issued. STOCK means all shares, options, warrants, general or limited partnership interests, membership interests, or other ownership interests (regardless of how designated) of or in a corporation, partnership, limited liability company, trust, or other entity, whether voting or nonvoting, including common stock, preferred stock, or any other similar "equity security" (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended). SUBORDINATED DEBT means any Debt of Borrower (a) subordinated to the Obligation and including customary provisions regarding payment blockage, payover, standstill, voting rights, and notices, (b) which, as of the date of calculation, is not considered a "current liability" in accordance with GAAP, and (c) which requires no payments of principal until its maturity. CREDIT AGREEMENT 13 SUBSEQUENT LENDER is defined in SECTION 2.2(b). SUBSIDIARY means, in respect of any Person (herein referred to as the "PARENT"), any corporation, partnership, limited liability company, association, or other business entity (a) of which Stock representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or more than fifty percent (50%) of the general partnership interests are, at the time any determination is being made, owned, Controlled, or held, or (b) which is, at the time any determination is made, otherwise Controlled, by the Parent or one or more Subsidiaries of the Parent or by the Parent and one or more Subsidiaries of the Parent; provided that ownership by Borrower or its Subsidiaries of more than fifty percent (50%) of the limited partnership interests in Centex Development Company, L.P. shall not, by itself, result in such company being deemed a Subsidiary of Borrower. "CONTROL" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of Stock, by contract, or otherwise, and "CONTROLLING" and "CONTROLLED" shall have meanings correlative thereto. TANGIBLE NET WORTH means, for any Person as of any date of determination, the consolidated net worth of such Person determined in accordance with GAAP, less (without duplication), the sum of the following: (a) all intangibles determined in accordance with GAAP (including, without limitation, goodwill and deferred or capitalized acquisition costs), (b) all minority interests in any Subsidiary of such Person, (c) unamortized Debt discount and expense, (d) any non-cash gain (or plus any non-cash loss, as applicable) resulting from any mark-to-market adjustments made directly to consolidated net worth as a result of fluctuations in the value of financial instruments owned by Borrower or any of its Subsidiaries as mandated under FAS 133, and (e) all reserves (except contingency reserves not allocated to specific purposes and not deducted from assets, which are properly treated as appropriations of surplus or retained earnings) and any write-up in book value of assets resulting from a revaluation of such asset subsequent to March 31, 2003. TAX CODE means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder. TAXES means, for any Person, taxes, assessments, duties, levies, imposts, deductions, charges, or withholdings, or other governmental charges or levies imposed upon such Person, its income, or any of its properties, franchises, or assets. TERMINATION DATE means the earlier of (a) August 9, 2006 as such date may be extended pursuant to and in accordance with SECTION 2.5, and (b) the effective date of any other termination or cancellation of all of Lenders' Commitments to lend under, and in accordance with, this Agreement. TOTAL COMMITMENT means, on any date of determination, the sum of all Commitments for all Lenders (as the same may have been reduced, increased, or canceled in accordance with this Agreement) then in effect. TOTAL PRINCIPAL DEBT means, at any time, the sum of the Principal Debt of all Lenders. TYPE means any type of Borrowing determined with respect to the interest option applicable thereto. CREDIT AGREEMENT 14 UNRESTRICTED SUBSIDIARY means any Subsidiary (a) that is designated as an Unrestricted Subsidiary on the Closing Date and listed on SCHEDULE 7.3, or (b) as otherwise designated in a writing delivered to Administrative Agent and meeting the requirements set forth in SECTION 8.12. WHOLLY-OWNED when used in connection with any Subsidiary shall mean a Subsidiary of which all of the issued and outstanding shares of Stock (except shares required as directors' qualifying shares) shall be owned by Borrower or one or more of its Wholly-owned Subsidiaries. 1.2 NUMBER AND GENDER OF WORDS; OTHER REFERENCES. Unless otherwise specified in the Loan Documents, (a) where appropriate, the singular includes the plural and vice versa, and words of any gender include each other gender, (b) heading and caption references may not be construed in interpreting provisions, (c) monetary references are to currency of the United States of America, (d) section, paragraph, annex, schedule, exhibit, and similar references are to the particular Loan Document in which they are used, (e) references to "telecopy," "facsimile," "fax," or similar terms are to facsimile or telecopy transmissions, (f) references to "including" mean including without limiting the generality of any description preceding that word, (g) the rule of construction that references to general items that follow references to specific items are limited to the same type or character of those specific items is not applicable in the Loan Documents, (h) references to any Person include that Person's heirs, personal representatives, successors, trustees, receivers, and permitted assigns, (i) references to any Legal Requirement include every amendment or supplement to it, rule and regulation adopted under it, and successor or replacement for it, and (j) references to any Loan Document or other document include every renewal and extension of it, amendment and supplement to it, and replacement or substitution for it. 1.3 ACCOUNTING PRINCIPLES. All accounting and financial terms used in the Loan Documents and the compliance with each financial covenant therein shall be determined in accordance with GAAP, and all accounting principles shall be applied on a consistent basis so that the accounting principles in a current period are comparable in all material respects to those applied during the preceding comparable period. If Borrower or any Credit Party determines that a change in GAAP from that in effect on the date hereof has altered the treatment of certain financial data to its detriment under this Agreement, then such party may, by written notice to the others and Administrative Agent not later than ten (10) days after the effective date of such change in GAAP, request renegotiation of the financial covenants affected by such change. If Borrower and Required Lenders have not agreed on revised covenants within thirty (30) days after delivery of such notice, then, for purposes of this Agreement, GAAP will mean generally accepted accounting principles without giving effect to the change that gave rise to the renegotiation. 1.4 TIME REFERENCES. Unless otherwise specified in the Loan Documents (a) time references are to time in Chicago, Illinois, and (b) in calculating a period from one date to another, the word "from" means "from and including" and the word "to" or "until" means "to but excluding." SECTION 2 BORROWING PROVISIONS. 2.1 COMMITMENTS. Subject to and in reliance upon the terms, conditions, representations, and warranties in the Loan Documents, each Lender severally and not jointly agrees to lend to Borrower such Lender's Pro Rata Part of one or more Borrowings not to exceed such Lender's Commitment, which may be repaid and reborrowed from time to time in accordance with the terms and provisions of the Loan Documents subject to the following conditions: (a) each Borrowing requested by Borrower hereunder must occur on a Business Day and no later than the Business Day immediately preceding the Termination Date; CREDIT AGREEMENT 15 (b) each Borrowing requested by Borrower must be in the amount of (i) $5,000,000 or a greater integral multiple of $1,000,000 (if a Prime Rate Borrowing), or (ii) $5,000,000 or a greater integral multiple of $1,000,000 (if a Eurodollar Borrowing); (c) the Total Principal Debt may not exceed the Total Commitment; and (d) no Lender's Principal Debt may exceed such Lender's Commitment. 2.2 LENDERS; INCREASE IN TOTAL COMMITMENT. (a) The Lenders on the Closing Date shall be the Lenders set forth on SCHEDULE 2.1 on the Closing Date. (b) At any time after the Closing Date through the date that is one (1) year prior to the Termination Date then in effect (or such later date solely with respect to the replacement of any Rejecting Lender pursuant to SECTION 2.5(c)), Administrative Agent may, from time to time at the request of Borrower, increase the Total Commitment by (i) admitting additional Lenders hereunder (each a "SUBSEQUENT LENDER"), or (ii) increasing the Commitment of any Lender (each an "INCREASING LENDER"), subject to the following conditions: (A) each Subsequent Lender is an Eligible Assignee; (B) Borrower executes (A) a new Note payable to the order of a Subsequent Lender, if requested, or (B) a replacement Note payable to the order of an Increasing Lender if such Increasing Lender previously received a Note; (C) each Subsequent Lender executes and delivers to Administrative Agent a signature page to this Agreement; (D) after giving effect to the admission of any Subsequent Lender or the increase in the Commitment of any Increasing Lender, the Total Commitment does not exceed $1,000,000,000; (E) each increase in the Total Commitment shall be in the amount of $10,000,000 or a greater integral multiple of $500,000 (except with respect to an increase in connection with the replacement of a Rejecting Lender); (F) no admission of any Subsequent Lender shall increase the Commitment of any existing Lender without the written consent of such Lender; (G) no Potential Default or Event of Default exists; (H) no Lender shall be an Increasing Lender without the written consent of such Lender; and (I) the amount of all increases in the Total Commitment pursuant to this SECTION 2.2 (other than increases as the result of the replacement of a Rejecting Lender pursuant to SECTION 2.5(c)) shall not exceed $200,000,000 in the aggregate. CREDIT AGREEMENT 16 After the admission of any Subsequent Lender or the increase in the Commitment of any Increasing Lender, Administrative Agent shall promptly provide to each Lender and to Borrower a new SCHEDULE 2.1 to this Agreement. In the event that there are any Borrowings outstanding after giving effect to an increase in the Total Commitment pursuant to this SECTION 2.2, upon notice from Administrative Agent to each Lender, the amount of such Borrowings owing to each Lender shall be appropriately adjusted to reflect the new Pro Rata Parts of Lenders, and Borrower shall pay any Consequential Losses associated therewith pursuant to SECTION 4.5. 2.3 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. Without premium or penalty, and upon giving not less than ten (10) Business Days prior written and irrevocable notice to Administrative Agent, Borrower may permanently terminate in whole or in part the Total Commitment; provided that: (a) each partial termination shall be in the amount of $5,000,000 or a greater integral multiple of $1,000,000; (b) the amount of the Total Commitment may not be reduced below the Total Principal Debt; and (c) each reduction shall be allocated Pro Rata among Lenders in accordance with their respective Pro Rata Parts. Promptly after receipt of such notice of termination or reduction, Administrative Agent shall notify each Lender of the proposed termination or reduction. Such termination or partial reduction of the Total Commitment shall be effective on the Business Day specified in Borrower's notice (which date must be at least ten (10) Business Days after Borrower's delivery of such notice). In the event that the Total Commitment is reduced to zero and there is no outstanding Principal Debt, this Agreement shall be terminated to the extent specified in SECTION 13.14, and all facility fees and other fees then earned and unpaid hereunder and all other amounts of the Obligation then due and owing shall be immediately due and payable, without notice or demand by any Credit Party. 2.4 BORROWING PROCEDURE. The following procedures apply to Borrowings (other than Conversions and Continuations of Borrowings): (a) NOTICE OF BORROWING. Each Borrowing shall be made pursuant to a Notice of Borrowing delivered to Administrative Agent requesting that Lenders fund a Borrowing on a Borrowing Date, which notice (i) shall be irrevocable and binding on Borrower, (ii) shall specify the Borrowing Date, amount, Type, and (for a Borrowing comprised of Eurodollar Borrowings) Interest Period, and (iii) must be received by Administrative Agent no later than 11:00 a.m. on the third (3rd) Business Day preceding the Borrowing Date for any Eurodollar Borrowing or on the Business Day immediately preceding the Borrowing Date for any Prime Rate Borrowing. Administrative Agent shall notify each Lender by 2:00 p.m. with respect to Administrative Agent's receipt of each Notice of Borrowing. (b) FUNDING. Each Lender shall remit its Pro Rata Part of each requested Borrowing to Administrative Agent at its Payment Office in funds which are or will be available for immediate use by Administrative Agent by 1:00 p.m. on the Borrowing Date therefor. Subject to receipt of such funds, Administrative Agent shall (unless to its actual knowledge any of the conditions precedent therefor have not been satisfied by Borrower or waived by Required Lenders) make such funds available to Borrower by causing such funds to be deposited by 3:00 p.m. on the Borrowing Date to Borrower's account as designated to Administrative Agent by Borrower. Notwithstanding the foregoing, unless Administrative Agent shall have been notified by a Lender prior to a Borrowing Date that such Lender does not intend to make available to Administrative Agent such Lender's Pro Rata Part of the applicable Borrowing, Administrative Agent may assume that such Lender has made such proceeds available to Administrative Agent on such date, as required herein, and Administrative Agent may (unless to its actual knowledge any of the conditions precedent therefor have not been satisfied by Borrower or waived by Required Lenders), in reliance upon such assumption (but shall not be required to), make available to Borrower a CREDIT AGREEMENT 17 corresponding amount in accordance with the foregoing terms, but, if such corresponding amount is not in fact made available to Administrative Agent by such Lender on such Borrowing Date, then Administrative Agent shall be entitled to recover such corresponding amount on demand (i) from such Lender, together with interest at the Federal Funds Rate during the period commencing on the date such corresponding amount was made available to Borrower and ending on (but excluding) the date Administrative Agent recovers such corresponding amount from such Lender, or (ii) if such Lender fails to pay such corresponding amount forthwith upon such demand, then from Borrower, together with interest at a rate per annum equal to the applicable rate for such Borrowing during the period commencing on such Borrowing Date and ending on (but excluding) the date Administrative Agent recovers such corresponding amount from Borrower. The obligations of Lenders hereunder to remit their Pro Rata Part of each requested Borrowing are several and not joint. The failure of any Lender to make its Pro Rata Part of any Borrowing on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to make its Pro Rata Part of any Borrowing. 2.5 EXTENSION OF TERMINATION DATE. (a) Borrower may, not more than once during any period of twelve (12) consecutive months, upon written notice to Administrative Agent (who shall promptly notify Lenders) not less than ninety (90) days prior to the Termination Date then in effect, request an extension of the Termination Date then in effect (the "EXTENSION REQUEST"). Within thirty (30) days of delivery of such notice, each Lender shall notify Administrative Agent by written notice whether or not it consents to such extension. Any Lender not responding within the above time period shall be deemed to have not consented to such extension. Administrative Agent shall promptly notify Borrower of Lenders' responses and the aggregate amount of the Commitments of Rejecting Lenders (the "REJECTED AMOUNT"). (b) The Termination Date then in effect shall be extended only if Lenders ("ACCEPTING LENDERS") holding not less than seventy percent (70%) of the Total Commitment (the amount of which shall be calculated prior to giving effect to any removals or replacements of Rejecting Lenders) have consented thereto. If so extended, the Termination Date then in effect shall be extended to a date 364 days from the Termination Date then in effect, effective as of the Termination Date then in effect (the effective date of the extension being the "EXTENSION EFFECTIVE DATE"). Administrative Agent shall promptly confirm in writing to Lenders and Borrower such extension and the Extension Effective Date. As a condition precedent to such extension, Borrower shall deliver to Administrative Agent a certificate dated as of the Extension Effective Date (in sufficient copies for each Accepting Lender) signed by a Responsible Officer (i) certifying and attaching the resolutions adopted by Borrower approving or consenting to such extension and (ii) certifying that, before and after giving effect to such extension, no Potential Default or Event of Default exists. Administrative Agent shall distribute an amended SCHEDULE 2.1 (which shall be deemed incorporated into this Agreement) to reflect any changes in Lenders and their Commitments. (c) If the Termination Date is extended as provided in SECTION 2.5(b) and if any Lender (individually, a "REJECTING LENDER" and collectively, "REJECTING LENDERS") declines, or is deemed to have declined, to consent to such extension, then the Commitment of such Rejecting Lender shall automatically terminate on the Extension Effective Date (or such earlier date by written notice from Borrower to Administrative Agent and such Rejecting Lender at least three (3) Business Days prior to such termination). Upon termination of the Commitment of any Rejecting Lender pursuant to the foregoing sentence, Borrower shall pay to such Rejecting Lender (and the same shall become due and payable) the outstanding Principal Debt owed by Borrower to such Rejecting Lender, all interest thereon, and any CREDIT AGREEMENT 18 other Obligation owed to such Rejecting Lender (including pursuant to SECTION 4.5). Borrower shall have the right, in consultation with and through Administrative Agent, to request to add one or more Subsequent Lenders or Increasing Lenders pursuant to SECTION 2.2 to replace such Rejecting Lenders. (d) This SECTION 2.5 shall supersede any provisions in SECTION 13.11 to the contrary. SECTION 3 TERMS OF PAYMENT. 3.1 NOTES AND PAYMENTS. (a) NOTES. The Principal Debt owed to each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by Administrative Agent in the ordinary course of business. The accounts or records maintained by Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Principal Debt owed to such Lender and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of Borrower hereunder to pay any amount owing with respect to the Obligation. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of Administrative Agent in respect of such matters, the accounts and records of Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through Administrative Agent, Borrower shall execute and deliver to such Lender (through Administrative Agent) a Note, which shall evidence the Principal Debt owed to such Lender in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of Borrowings and payments with respect thereto. (b) PAYMENTS GENERALLY. Each payment or prepayment on the Obligation is due and must be paid by Borrower to Administrative Agent at its Payment Office in Dollars and in immediately available funds, without set-off, deduction, defense, recoupment, or counterclaim, by 12:00 noon on the day due. Payments made after 12:00 noon shall be deemed made on the Business Day next following. If any payment or prepayment on the Obligation is stated to be due on a day that is not a Business Day, such payment shall be due on the next following Business Day, and, to the extent applicable, interest and fees shall continue to accrue until such payment or prepayment is actually made. Administrative Agent shall pay to each Lender any payment or prepayment to which such Lender is entitled hereunder on the same day Administrative Agent shall have received the same from Borrower; provided that such payment or prepayment is received by Administrative Agent prior to 12:00 noon, and otherwise before 12:00 noon on the Business Day next following. If and to the extent Administrative Agent shall not make such payments to Lenders when due as set forth in the preceding sentence, then such unpaid amounts shall accrue interest, payable by Administrative Agent, at the Federal Funds Rate from the due date until (but not including) the date on which Administrative Agent makes such payments to Lenders. 3.2 INTEREST AND PRINCIPAL PAYMENTS. (a) INTEREST PAYMENTS. Interest on each Eurodollar Borrowing shall be due and payable as it accrues on the last day of its respective Interest Period and on the Termination Date, as applicable; provided that, with respect to Eurodollar Borrowings having an Interest Period in excess of three (3) months, Borrower shall pay interest on the respective dates that fall every three (3) months after the beginning of such Interest Period and on the expiration of each Interest Period. Interest on each Prime Rate Borrowing shall be due and payable as it accrues on each March 31, June 30, September 30, and December 31, and on the Termination Date. CREDIT AGREEMENT 19 (b) MANDATORY PAYMENTS. (i) The Total Principal Debt is due and payable on the Termination Date. (ii) On any date of determination, if the Total Principal Debt exceeds the Total Commitment, then Borrower shall prepay the Principal Debt in at least the amount of such excess, together with (A) all accrued and unpaid interest on the Principal Debt prepaid, and (B) any Consequential Loss arising as a result thereof. (iii) All mandatory payments pursuant to this SECTION 3.2(b) shall be applied to the unpaid Principal Debt Pro Rata except as otherwise specifically provided herein. (c) VOLUNTARY PREPAYMENTS. After giving Administrative Agent a Notice of Prepayment, Borrower may voluntarily prepay all or any part of the Principal Debt from time to time and at any time, in whole or in part, without premium or penalty; provided that: (i) such notice must be received by Administrative Agent by 11:00 a.m. on (A) the third (3rd) Business Day preceding the date of prepayment of a Eurodollar Borrowing, and (B) one (1) Business Day prior to a prepayment of a Prime Rate Borrowing; (ii) each such partial prepayment must be in the amount of $5,000,000 or a greater integral multiple of $1,000,000 (whether a Eurodollar Borrowing or a Prime Rate Borrowing); (iii) all accrued interest on the Principal Debt being prepaid must also be paid in full, to the date of such prepayment if such voluntary prepayment is a prepayment of all outstanding Principal Debt and a termination of all Commitments under this Agreement or if the Principal Debt being prepaid is a Eurodollar Borrowing; and (iv) Borrower shall pay any related Consequential Loss (for any Eurodollar Borrowing) within ten (10) days after demand therefor. Each Notice of Prepayment shall specify the prepayment date and the Type of Borrowing(s) and amount(s) of such Borrowing(s) to be prepaid and shall constitute a binding obligation of Borrower to make a prepayment on the date stated therein. 3.3 INTEREST OPTIONS. Except where specifically otherwise provided, Borrowings shall bear interest at a rate per annum equal to the lesser of (a) as to the respective Type of Borrowing (as designated by Borrower in accordance with this Agreement), the Prime Rate plus the Applicable Margin for Prime Rate Borrowings or the Adjusted Eurodollar Rate plus the Applicable Margin for Eurodollar Borrowings, and (b) the Maximum Rate. Each change in the Prime Rate, Applicable Margin, or the Maximum Rate, subject to the terms of this Agreement, will become effective, without notice to Borrower or any other Person, upon the effective date of such change. 3.4 QUOTATION OF RATES. A Responsible Officer may call Administrative Agent on or before the date on which a Notice of Borrowing is to be delivered by Borrower in order to receive an indication of the rates then in effect, but such indicated rates shall neither be binding upon Administrative Agent or Lenders nor affect the rate of interest which thereafter is actually in effect when the Notice of Borrowing is given. 3.5 DEFAULT RATE. At the option of Required Lenders at any time while an Event of Default exists and to the extent permitted by all Legal Requirements, all past due Principal Debt and all past due accrued interest thereon, and fees and expenses payable hereunder and under the other Loan Documents shall bear interest at the Default Rate until paid, regardless whether such payment is made before or after entry of a judgment. 3.6 INTEREST RECAPTURE. If the designated rate applicable to any Borrowing exceeds the Maximum Rate, then the rate of interest on such Borrowing shall be limited to the Maximum Rate, but CREDIT AGREEMENT 20 any subsequent reductions in such designated rate shall not reduce the rate of interest thereon below the Maximum Rate until the total amount of interest accrued thereon equals the amount of interest which would have accrued thereon if such designated rate had at all times been in effect. In the event that at maturity (stated or by acceleration), or at final payment of the Total Principal Debt, the total amount of interest paid or accrued is less than the amount of interest which would have accrued if such designated rates had at all times been in effect, then, at such time and to the extent permitted by all Legal Requirements, Borrower shall pay an amount equal to the difference between (a) the lesser of the amount of interest which would have accrued if such designated rates had at all times been in effect and the amount of interest which would have accrued if the Maximum Rate had at all times been in effect, and (b) the amount of interest actually paid or accrued on the Total Principal Debt. 3.7 INTEREST CALCULATIONS. (a) All computations of interest for Prime Rate Borrowings shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of interest shall be calculated on the basis of actual number of days (including the first (1st) day but excluding the last day) elapsed but computed as if each calendar year consisted of 360 days. All interest rate determinations and calculations by Administrative Agent shall be conclusive and binding absent manifest error. (b) The provisions of this Agreement relating to the calculation of the Prime Rate and the Adjusted Eurodollar Rate are included only for the purpose of determining the rate of interest or other amounts to be paid hereunder that are based upon such rate. 3.8 MAXIMUM RATE. Regardless of any provision contained in any Loan Document, no Credit Party shall ever be entitled to contract for, charge, take, reserve, receive, or apply, as interest on the Obligation, or any part thereof, any amount in excess of the Maximum Rate, and if any Credit Party ever does so, then such excess shall be deemed a partial prepayment of principal and treated hereunder as such and any remaining excess shall be refunded to Borrower. In determining if the interest paid or payable exceeds the Maximum Rate, Borrower and the Credit Parties shall, to the maximum extent permitted under all Legal Requirements, (a) treat all Borrowings as but a single extension of credit (and the Credit Parties and Borrower agree that such is the case and that provision herein for multiple Borrowings is for convenience only), (b) characterize any non-principal payment as an expense, fee, or premium rather than as interest, (c) exclude voluntary prepayments and the effects thereof, and (d) amortize, prorate, allocate, and spread the total amount of interest throughout the entire contemplated term of the Obligation; provided that if the Obligation is paid and performed in full prior to the end of the full contemplated term thereof, and if the interest received for the actual period of existence thereof exceeds the Maximum Amount, then the Credit Parties shall refund such excess, and, in such event, the Credit Parties shall not, to the extent permitted by all Legal Requirements, be subject to any penalties provided by any Legal Requirements for contracting for, charging, taking, reserving, or receiving interest in excess of the Maximum Amount. 3.9 INTEREST PERIODS. When Borrower requests any Eurodollar Borrowing, Borrower may elect the interest period (each an "INTEREST PERIOD") applicable thereto, which shall be, at Borrower's option, one (1) month or two (2), three (3), or six (6) months, in each case to the extent available from each Lender; provided, however, that: (a) the initial Interest Period for a Eurodollar Borrowing shall commence on the date of such Borrowing (including the date of any Conversion thereto), and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period applicable thereto expires; (b) if any Interest Period for a Eurodollar CREDIT AGREEMENT 21 Borrowing begins on a day for which there is no numerically corresponding Business Day in the calendar month at the end of such Interest Period, then such Interest Period shall end on the next Business Day immediately following what otherwise would have been such numerically corresponding day in the calendar month at the end of such Interest Period (unless such date would be in a different calendar month from what would have been the month at the end of such Interest Period, or unless there is no numerically corresponding day in the calendar month at the end of the Interest Period; whereupon, such Interest Period shall end on the last Business Day in the calendar month at the end of such Interest Period); (c) no Interest Period may be chosen with respect to any portion of the Total Principal Debt which would extend beyond the scheduled repayment date (including any dates on which mandatory prepayments are required to be made) for such portion of the Total Principal Debt; and (d) no more than an aggregate of five (5) Interest Periods shall be in effect at one time. 3.10 CONVERSIONS; CONTINUATIONS. Borrower may (a) Convert a Eurodollar Borrowing on the last day of an Interest Period to a Prime Rate Borrowing, (b) Convert a Prime Rate Borrowing at any time to a Eurodollar Borrowing, and (c) elect to Continue a Borrowing by selecting a new Interest Period (in the case of a Eurodollar Borrowing), by giving a Notice of Conversion/Continuation to Administrative Agent no later than 11:00 a.m. on the third (3rd) Business Day prior to the date of Conversion or the last day of the Interest Period, as the case may be; provided that, the principal amount Converted to, or Continued as, a Eurodollar Borrowing shall be in a minimum amount of $5,000,000 or a greater integral multiple of $1,000,000. Administrative Agent shall timely notify each Lender with respect to each Notice of Conversion/Continuation. Absent Borrower's Notice of Conversion/Continuation, a Eurodollar Borrowing shall be deemed Converted to a Prime Rate Borrowing effective as of the expiration of the Interest Period applicable thereto. No Eurodollar Borrowing may be either made or Continued as a Eurodollar Borrowing, and no Prime Rate Borrowing may be Converted to a Eurodollar Borrowing, (i) if the interest rate for such Eurodollar Borrowing would exceed the Maximum Rate, or (ii) while an Event of Default exists, unless Required Lenders otherwise consent in writing. 3.11 ORDER OF APPLICATION. (a) Payments and prepayments of the Obligation shall be applied in the order and manner specified in this Agreement; provided, however, if no order is otherwise specified and no Potential Default or Event of Default exists, payments and prepayments of the Obligation shall be applied first, to fees, second, to accrued interest then due and payable on the Total Principal Debt, and then to the remaining Obligation in the order and manner as Borrower may direct. (b) If a Potential Default or Event of Default exists (or if Borrower fails to give directions as permitted under SECTION 3.11(a)), any payment or prepayment (including proceeds from the exercise of any Rights) shall be applied to the Obligation in the following order: (i) to the ratable payment of all fees, expenses, and indemnities for which the Credit Parties have not been paid or reimbursed in accordance with the Loan Documents; (ii) to the ratable payment of accrued and unpaid interest on the Total Principal Debt; (iii) to the ratable payment of the Total Principal Debt; and (iv) to the payment of the remaining Obligation in the order and manner Required Lenders deem appropriate. (c) Subject to the provisions of SECTION 12 and provided that Administrative Agent shall not in any event be bound to inquire into or to determine the validity, scope, or priority of any interest or entitlement of any Credit Party and may suspend all payments or seek appropriate relief (including instructions from Required Lenders or an action in the nature of interpleader) in the event of any doubt or dispute as to any apportionment or distribution contemplated hereby, Administrative Agent shall CREDIT AGREEMENT 22 promptly distribute such amounts to each Credit Party in accordance with this Agreement and the related Loan Documents. 3.12 RIGHT OF SET-OFF; ADJUSTMENTS. (a) SET-OFF. Upon the occurrence and during the continuance of any Event of Default, each Lender (and each of its Affiliates) is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Legal Requirements, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender (or any of its Affiliates) to or for the credit or the account of Borrower against any and all of the obligations of Borrower now or hereafter existing under this Agreement and the Note held by such Lender, irrespective of whether such Lender shall have made any demand under this Agreement or such Note and although such obligations may be unmatured. Each Lender agrees promptly to notify Borrower after any such set-off and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender under this SECTION 3.12(a) are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Lender may have. (b) SHARING OF PAYMENTS. If any Lender (a "BENEFITED LENDER") shall at any time receive any payment of all or part of the Borrowings owing to it, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender's Borrowings owing to it, or interest thereon, then such Benefited Lender shall purchase for cash from the other Lenders a participating interest in such portion of each such other Lender's Borrowings owing to it, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably with all Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, then such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. Borrower agrees that any Lender so purchasing a participation from a Lender pursuant to this SECTION 3.12(b) may, to the fullest extent permitted by applicable Legal Requirements, exercise all of its rights of payment (including the right of set-off) with respect to such participation as fully as if such Person were the direct creditor of Borrower in the amount of such participation. 3.13 BOOKING BORROWINGS. To the extent permitted by all Legal Requirements, any Lender may make, carry, or transfer its Borrowings at, to, or for the account of any of its branch offices or the office of any of its Affiliates; provided that no Affiliate shall be entitled to receive any greater payment under SECTION 4 than the transferor Lender would have been entitled to receive with respect to such Borrowings. SECTION 4 CHANGE IN CIRCUMSTANCES. 4.1 INCREASED COST AND REDUCED RETURN. (a) CHANGE IN LEGAL REQUIREMENTS. If, after the date hereof, the adoption of any applicable Legal Requirement, or any change in any applicable Legal Requirement, or any change in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof, or compliance by any Lender (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) of any such Governmental Authority: CREDIT AGREEMENT 23 (i) shall subject such Lender (or its Applicable Lending Office) to any tax, duty, or other charge with respect to any Eurodollar Borrowing, its Note, or its obligation to make Eurodollar Borrowings, or change the basis of taxation of any amounts payable to such Lender (or its Applicable Lending Office) under this Agreement or its Note in respect of any Eurodollar Borrowings (other than taxes imposed on the overall net income of such Lender by the jurisdiction in which such Lender has its principal office or such Applicable Lending Office); (ii) shall impose, modify, or deem applicable any reserve, special deposit, assessment, or similar requirement (other than the Reserve Requirement utilized in the determination of the Adjusted Eurodollar Rate) relating to any extensions of credit or other assets of, or any deposits with or other liabilities or commitments of, such Lender (or its Applicable Lending Office), including the Commitment of such Lender hereunder; or (iii) shall impose on such Lender (or its Applicable Lending Office) or the London interbank market any other condition affecting this Agreement or its Note or any of such extensions of credit or liabilities or commitments; and the result of any of the foregoing is to increase the cost to such Lender (or its Applicable Lending Office) of being obligated to make, making, Converting into, Continuing, or maintaining any Eurodollar Borrowings or to reduce any sum received or receivable by such Lender (or its Applicable Lending Office) under this Agreement or its Note with respect to any Eurodollar Borrowings, then Borrower shall pay to such Lender on demand such amount or amounts as will compensate such Lender for such increased cost or reduction. If any Lender requests compensation by Borrower under this SECTION 4.1(a), then Borrower may, by notice to such Lender (with a copy to Administrative Agent), suspend the obligation of such Lender to make or Continue Eurodollar Borrowings, or Convert all Eurodollar Borrowings into Prime Rate Borrowings, until the event or condition giving rise to such request ceases to be in effect (in which case the provisions of SECTION 4.4 shall be applicable); provided that such suspension shall not affect the Right of such Lender to receive the compensation so requested. (b) CAPITAL ADEQUACY. If, after the date hereof, any Lender shall have determined that the adoption of any applicable Legal Requirement regarding capital adequacy or any change therein or in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender's obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change, request, or directive (taking into consideration its policies with respect to capital adequacy), then from time to time upon demand Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. (c) NOTICE. Each Lender shall promptly notify Borrower and Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this SECTION 4.1 and will use reasonable efforts to designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming compensation under this SECTION 4.1 shall furnish to Borrower and Administrative Agent a statement setting forth the additional amount or amounts to be paid to it hereunder which shall be CREDIT AGREEMENT 24 conclusive in the absence of manifest error. In determining such amount, such Lender may use any reasonable averaging and attribution methods. 4.2 LIMITATION ON TYPES OF BORROWINGS. If on or prior to the first (1st) day of any Interest Period for any Eurodollar Borrowing: (a) Administrative Agent determines (which determination shall be conclusive) that by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period; or (b) Required Lenders determine (which determination shall be conclusive) and notify Administrative Agent that the Adjusted Eurodollar Rate will not adequately and fairly reflect the cost to Lenders of funding Eurodollar Borrowings for such Interest Period; then Administrative Agent shall give Borrower prompt notice thereof specifying the relevant amounts or periods, and so long as such condition remains in effect, Lenders shall be under no obligation to make additional Eurodollar Borrowings, Continue any Eurodollar Borrowings, or to Convert any Prime Rate Borrowings to Eurodollar Borrowings and Borrower shall, on the last day(s) of the then-current Interest Period(s) for the outstanding Eurodollar Borrowings, either prepay such Borrowings or Convert such Borrowings into Prime Rate Borrowings in accordance with the terms of this Agreement. 4.3 ILLEGALITY. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Lender or its Applicable Lending Office to make, maintain, or fund Eurodollar Borrowings hereunder, then such Lender shall promptly notify Administrative Agent and Borrower thereof and such Lender's obligation to make or Continue Eurodollar Borrowings and to Convert Prime Rate Borrowings into Eurodollar Borrowings shall be suspended until such time as such Lender may again make, maintain, and fund Eurodollar Borrowings (in which case the provisions of SECTION 4.4 shall be applicable). 4.4 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to make or Continue Eurodollar Borrowings or to Convert Prime Rate Borrowings into Eurodollar Borrowings shall be suspended pursuant to SECTION 4.1, 4.2, or 4.3, then such Lender's Eurodollar Borrowings shall be automatically Converted into Prime Rate Borrowings on the last day(s) of the then current Interest Period(s) for all Eurodollar Borrowings (or, in the case of a Conversion required by SECTION 4.3, on such earlier date as such Lender may specify to Borrower with a copy to Administrative Agent) and, unless and until such Lender gives notice as provided below that the circumstances specified in SECTION 4.1, 4.2, or 4.3 that gave rise to such Conversion no longer exist: (a) to the extent that such Lender's Eurodollar Borrowings have been so Converted, all payments and prepayments of principal that would otherwise be applied to such Lender's Eurodollar Borrowings shall be applied instead to its Prime Rate Borrowings; and (b) all Borrowings that would otherwise be made or Continued by such Lender as Eurodollar Borrowings shall be made or Continued instead as Prime Rate Borrowings, and all Borrowings of such Lender that would otherwise be Converted into Eurodollar Borrowings shall be Converted instead into (or shall remain as) Prime Rate Borrowings. CREDIT AGREEMENT 25 If such Lender gives notice to Borrower (with a copy to Administrative Agent) that the circumstances specified in SECTION 4.1, 4.2, or 4.3 that gave rise to the Conversion of such Lender's Eurodollar Borrowings pursuant to this SECTION 4.4 no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when Eurodollar Borrowings made by other Lenders are outstanding, then such Lender's Prime Rate Borrowings shall be automatically Converted, on the first (1st) day(s) of the next succeeding Interest Period(s) for such outstanding Eurodollar Borrowings, to the extent necessary so that, after giving effect thereto, all Eurodollar Borrowings held by Lenders are held Pro Rata (as to principal amounts, Types, and Interest Periods). 4.5 COMPENSATION. Upon the request of any Lender, Borrower shall pay to such Lender such amount or amounts as shall be sufficient (in the reasonable opinion of such Lender) to compensate it for any loss, cost, or expense (herein called a "CONSEQUENTIAL LOSS") incurred by it as a result of: (a) any payment, prepayment, or Conversion of a Eurodollar Borrowing for any reason (including the acceleration of the Obligation pursuant to SECTION 11.1) on a date other than the last day of the Interest Period for such Borrowing; or (b) any failure by Borrower for any reason (including the failure of any condition precedent specified in SECTION 6 to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Borrowing on the date for such Borrowing, Conversion, Continuation, or prepayment specified in the relevant Notice of Borrowing, Notice of Conversion/Continuation, or Notice of Prepayment. 4.6 TAXES. (a) Any and all payments by Borrower to or for the account of any Credit Party hereunder or under any other Loan Document shall be made free and clear of and without deduction for any and all present or future Taxes, excluding, in the case of each Credit Party, Taxes based on or measured by its income, and franchise taxes imposed on it by the jurisdiction under the Legal Requirements of which such Credit Party (or its Applicable Lending Office) is organized or any political subdivision thereof (such income and franchise Taxes being "EXCLUDED TAXES"). If Borrower shall be required by any Legal Requirement to deduct any Taxes (other than Excluded Taxes) from or in respect of any sum payable under this Agreement or any other Loan Document to any Credit Party, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this SECTION 4.6) such Credit Party receives an amount equal to the sum it would have received had no such deductions been made, (ii) Borrower shall make such deductions, and (iii) Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with all Legal Requirements. (b) In addition, Borrower agrees to pay any and all present or future stamp or documentary Taxes and any other excise or property Taxes or charges or similar levies which arise from any payment made under this Agreement or any other Loan Document or from the execution or delivery of, or otherwise with respect to, this Agreement or any other Loan Document (hereinafter referred to as "OTHER TAXES"). (c) Borrower agrees to indemnify each Credit Party for the full amount of Taxes (other than Excluded Taxes) and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this SECTION 4.6) paid by such Credit Party and any liability (including penalties, interest, and expenses) arising therefrom or with respect thereto. CREDIT AGREEMENT 26 (d) Each Lender organized under the Legal Requirements of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each Lender listed on the signature pages hereof and on or prior to the date on which it becomes a Lender in the case of each other Lender, and from time to time thereafter if requested in writing by Borrower or Administrative Agent (but only so long as such Lender remains lawfully able to do so), shall provide Borrower and Administrative Agent with (i) Internal Revenue Service Form 1001 or 4224, as appropriate, or any successor form prescribed by the Internal Revenue Service, certifying that such Lender is entitled to benefits under an income tax treaty to which the United States is a party which reduces the rate of withholding tax on payments of interest or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States, (ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any successor form prescribed by the Internal Revenue Service, and (iii) any other form or certificate required by any taxing authority (including any certificate required by Sections 871(h) and 881(c) of the Tax Code), certifying that such Lender is entitled to an exemption from or a reduced rate of tax on payments pursuant to this Agreement or any of the other Loan Documents. (e) For any period with respect to which a Lender has failed to provide Borrower and Administrative Agent with the appropriate form pursuant to SECTION 4.6(d) (unless such failure is due to a change in any Legal Requirement occurring subsequent to the date on which a form originally was required to be provided), such Lender shall not be entitled to indemnification under SECTIONS 4.6(a) or (b) with respect to Taxes imposed by the United States; provided, however, that should a Lender, which is otherwise exempt from or subject to a reduced rate of withholding tax, become subject to Taxes (other than Excluded Taxes) because of its failure to deliver a form required hereunder, Borrower shall take such steps as such Lender shall reasonably request to assist such Lender to recover such Taxes. (f) If Borrower is required to pay additional amounts to or for the account of any Lender pursuant to this SECTION 4.6, then such Lender will agree to use reasonable efforts to change the jurisdiction of its Applicable Lending Office so as to eliminate or reduce any such additional payment which may thereafter accrue if such change, in the judgment of such Lender, is not otherwise disadvantageous to such Lender. (g) Within thirty (30) days after the date of any payment of Taxes or Other Taxes, Borrower shall furnish to Administrative Agent the original or a certified copy of a receipt evidencing such payment. (h) Without prejudice to the survival of any other agreement of Borrower hereunder, the agreements and obligations of Borrower contained in SECTIONS 4.1, 4.5, and 4.6 shall survive the termination of the Total Commitment and the payment in full of the Notes. SECTION 5 FEES. 5.1 TREATMENT OF FEES. Except as otherwise provided by any Legal Requirement, the fees described in this SECTION 5: (a) do not constitute compensation for the use, detention, or forbearance of money; (b) are in addition to, and not in lieu of, interest and expenses otherwise described in this Agreement; (c) shall be payable in accordance with SECTION 3.1; (d) shall be non-refundable; (e) shall, to the fullest extent permitted by all Legal Requirements, bear interest, if not paid when due, at the Default Rate; and (f) shall be calculated on the basis of actual number of days (including the first day but excluding the last day) elapsed, but computed as if each calendar year consisted of 360 days. CREDIT AGREEMENT 27 5.2 FEES OF ADMINISTRATIVE AGENT. Borrower shall pay to Administrative Agent the fees specified in the letter agreement dated May 29, 2003 between Administrative Agent and Borrower, as amended, which fees shall be for the account of Administrative Agent and for the account of the Credit Parties as shall be agreed between Administrative Agent and each other Credit Party. 5.3 FACILITY FEES. Following the Closing Date, Borrower shall pay to Administrative Agent, for the ratable account of Lenders, a facility fee, calculated daily but payable quarterly in installments in arrears, on each March 31, June 30, September 30, and December 31, on the Termination Date, and thereafter on demand, commencing September 30, 2003. Each installment shall be in an amount equal to the product of (a) the rate per annum equal to the Applicable Margin for Facility Fees times (b) the daily amount of the Commitment of each Lender, whether used or unused (or, after the Termination Date, on the outstanding Principal Debt), in each case during the period from and including the last payment date to and excluding the payment date for such installment. 5.4 UTILIZATION FEE. Following the Closing Date, Borrower shall pay to Administrative Agent, for the ratable benefit of Lenders, a utilization fee, calculated daily but payable quarterly in installments in arrears, on each payment date for facility fees as set forth in SECTION 5.3. Each installment shall be in an amount equal to the product of (a) the rate per annum equal to the Applicable Margin for Utilization Fees times (b) the daily Total Principal Debt for each day in which the Total Principal Debt exceeds an amount equal to fifty percent (50%) of the Total Commitment during the period from and including the last payment date to and excluding the payment date for such installment. SECTION 6 CONDITIONS PRECEDENT. 6.1 CONDITIONS PRECEDENT TO CLOSING. This Agreement shall not become effective unless the following conditions precedent are satisfied on or before the Closing Date: (a) BORROWER DOCUMENTS. Borrower shall deliver or cause to be delivered to Administrative Agent the following, each, unless otherwise noted, dated as of the Closing Date: (i) certified copies of its Constituent Documents, together with existence and good standing certificates from the Secretary of State of Nevada and foreign qualification and good standing certificates from the State of Texas, each dated a recent date prior to the Closing Date; (ii) a certificate of Responsible Officers of Borrower certifying (A) its Constituent Documents, (B) resolutions of its Board of Directors (or of the Executive Committee of the Board of Directors upon delivery of resolutions of the Board of Directors authorizing such action by an Executive Committee) approving and authorizing the execution, delivery, and performance of this Agreement and the other Loan Documents, certified as of the Closing Date as being in full force and effect without modification or amendment, and (C) signatures and incumbency of its officers executing this Agreement and the other Loan Documents; (iii) executed originals of this Agreement, the Notes, if any, and the other Loan Documents to be executed by Borrower; and (iv) such other documents as Administrative Agent may reasonably request. (b) OPINION OF COUNSEL FOR BORROWER. The Credit Parties and their respective counsel shall have received originally executed copies of a favorable written opinion of counsel for Borrower, in form CREDIT AGREEMENT 28 and substance reasonably satisfactory to Administrative Agent and its counsel, dated as of the Closing Date, and setting forth substantially the matters in the opinions designated in EXHIBIT D. (c) FEES. Borrower shall have paid to Administrative Agent, (i) for distribution (as appropriate) to the Credit Parties, the fees payable on the Closing Date referred to in SECTION 5.2, and (ii) all reasonable fees and expenses incurred by Administrative Agent and Arranger in connection with the negotiation, preparation, and closing of the transactions evidenced by the Loan Documents (including, without limitation, Attorney Costs). (d) COMPLETION OF PROCEEDINGS. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incidental thereto not previously found acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel shall be satisfactory in form and substance to Administrative Agent and such counsel, and Administrative Agent and such counsel shall have received all such counterpart originals or certified copies of such documents as Administrative Agent may reasonably request. (e) TERMINATION OF EXISTING CREDIT FACILITY. Borrower shall have provided to Administrative Agent evidence of payment and cancellation of the Existing Credit Facility. 6.2 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligations of the Credit Parties to make each Credit Extension (including the initial Credit Extension) are subject to the following further conditions precedent: (a) NOTICE OF BORROWING. Administrative Agent shall have received, in accordance with the provisions of SECTION 2.4 and SECTION 3.10, an originally executed Notice of Borrowing or Notice of Conversion/Continuation, as applicable. (b) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. As of the date of such Credit Extension, Borrower's representations and warranties in each Loan Document are true, correct, and complete in all material respects (unless they speak to a specific date or are based on facts which have changed by transactions expressly contemplated or permitted by this Agreement). (c) NO DEFAULT. No Potential Default or Event of Default exists or would be caused by the making of such Credit Extension. (d) NO INJUNCTION OR RESTRAINING ORDER. No order, judgment, or decree of any Governmental Authority shall purport to enjoin or restrain any Credit Party from making such Credit Extension. (e) NO VIOLATION. The making of such Credit Extension shall not violate any Legal Requirement, including Regulation T, Regulation U, or Regulation X of the Board of Governors of the Federal Reserve System. (f) OTHER MATTERS. All matters related to such Credit Extension must be satisfactory to Required Lenders and their respective counsel in their reasonable determination, and upon the reasonable request of Administrative Agent, Borrower shall deliver to Administrative Agent evidence substantiating any of the matters in the Loan Documents which are necessary to enable Borrower to qualify for such Credit Extension. CREDIT AGREEMENT 29 Each condition precedent in this Agreement is material to the transactions contemplated in this Agreement, and time is of the essence in respect of each thereof. Subject to the prior approval of Required Lenders, the Credit Parties may make a Credit Extension without all conditions being satisfied, but, to the extent permitted by all Legal Requirements, such Credit Extension shall not be deemed to be a waiver of the requirement that each such condition precedent be satisfied as a prerequisite for any subsequent Credit Extension, unless Required Lenders specifically waive each such item in writing. SECTION 7 REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to the Credit Parties as follows: 7.1 PURPOSE OF CREDIT FACILITY. Borrower will use (or will loan or contribute such proceeds to its Subsidiaries to so use) all proceeds of Credit Extensions for one or more of the following: (a) to refinance existing Debt of Borrower under the Existing Credit Facility; and (b) for lawful, corporate purposes including, without limitation, liquidity support for commercial paper issued by Borrower. No Restricted Company is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any "margin stock" within the meaning of Regulation U. No part of the proceeds of any Credit Extension will be used, directly or indirectly, for a purpose which violates any Legal Requirement, including the provisions of Regulation T, U, or X (as enacted by the Board of Governors of the Federal Reserve System, as amended). "Margin Stock" (as defined in Regulation U) constitutes less than twenty-five percent (25%) of those assets of the Companies that are subject to any limitation on sale, pledge, or similar restrictions hereunder. 7.2 EXISTENCE, GOOD STANDING, AUTHORITY, AND AUTHORIZATIONS. Each Restricted Company is duly organized, validly existing, and in good standing under the Legal Requirements of its jurisdiction of organization. Each Restricted Company is duly qualified to transact business and is in good standing in each jurisdiction where the nature and extent of its business and properties require the same, except where the failure to be so qualified could not constitute a Material Adverse Event. Each Restricted Company possesses all the Authorizations necessary or required in the conduct of its respective business(es), and the same are valid, binding, enforceable, and subsisting without any defaults thereunder or enforceable adverse limitations thereon and are not subject to any proceedings or claims opposing the issuance, development, or use thereof or contesting the validity thereof, except for any such circumstance that could not be a Material Adverse Event. 7.3 SUBSIDIARIES; CAPITAL STOCK. The Companies have no Subsidiaries except as disclosed on SCHEDULE 7.3, such schedule reflecting each Subsidiary's jurisdiction of incorporation (as supplemented and modified in writing from time to time to reflect any changes to such SCHEDULE as a result of transactions permitted or not prohibited by the Loan Documents) and each Unrestricted Subsidiary is designated as such. All of the outstanding Stock of each Subsidiary is duly authorized, validly issued, fully paid, and nonassessable and, except (a) for directors' qualifying shares, or (b) as otherwise set forth on SCHEDULE 7.3, are owned directly or indirectly by Borrower (as supplemented and modified in writing from time to time to reflect any changes to such SCHEDULE as a result of transactions permitted or not prohibited by the Loan Documents), free and clear, in the case of all Restricted Subsidiaries, of any Liens, restrictions (including restrictions on transfer), claims, or Rights of another Person except for restrictions on transfer imposed by securities Legal Requirements and general corporate Legal Requirements. 7.4 AUTHORIZATION AND CONTRAVENTION. The execution and delivery by Borrower of each Loan Document and the performance by Borrower of its obligations thereunder (a) are within the CREDIT AGREEMENT 30 corporate power of Borrower, (b) have been duly authorized by all necessary corporate action on the part of Borrower, (c) require no action by or in respect of Authorizations of or filing with, any Governmental Authority, which action, Authorization, or filing has not been taken, received, or made on or prior to the Closing Date (or if later, the date of execution and delivery of such Loan Document) other than filing of the Loan Documents pursuant to securities Legal Requirements, (d) will not violate any provision of the Constituent Documents of any Company, (e) will not violate any provision of any Legal Requirement applicable to any Company, other than such violations which individually or collectively could not be a Material Adverse Event, (f) will not violate any material written or oral agreements, contracts, commitments, or understandings to which any Company is a party, other than such violations which could not be a Material Adverse Event, or (g) will not result in the creation or imposition of any Lien on any asset of any Company. 7.5 BINDING EFFECT. Upon execution and delivery by all parties thereto, each Loan Document to which Borrower is a party will constitute a legal, valid, and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as enforceability may be limited by applicable Debtor Relief Laws and general principles of equity. 7.6 FINANCIAL STATEMENTS. The Current Financials were prepared in accordance with GAAP and present fairly, in all material respects, the consolidated financial condition, results of operations, and cash flows of the Companies as of and for the portion of the fiscal year ending on the date or dates thereof (subject only to normal year-end audit adjustments). There were no material liabilities, direct or indirect, fixed or contingent, of the Companies as of the date or dates of the Current Financials which are required under GAAP to be reflected therein or in the notes thereto, and are not so reflected. No Material Adverse Event has occurred from March 31, 2003 to the Closing Date. 7.7 LITIGATION, CLAIMS, INVESTIGATIONS. No Company is subject to, or aware of the threat of, any Litigation which is reasonably likely to be determined adversely to any Company, and, if so adversely determined, could (individually or collectively with other Litigation) be a Material Adverse Event. There are no outstanding orders or judgments for the payment of money in excess of $20,000,000 (individually or collectively) or any warrant of attachment, sequestration, or similar proceeding against the assets of any Company having a value (individually or collectively) of $20,000,000 or more which is not either (a) stayed on appeal, or (b) being contested in good faith by appropriate proceedings diligently conducted, and against which reserves or other provisions required by GAAP have been made. There are no formal complaints, suits, claims, investigations, or proceedings initiated at or by any Governmental Authority pending or, to the best knowledge of Borrower, threatened against any Company which is reasonably likely to be determined adversely and, if so adversely determined, could be a Material Adverse Event, nor any judgments, decrees, or orders of any Governmental Authority outstanding against any Company that could be a Material Adverse Event. 7.8 TAXES. All Tax returns of each Company required to be filed have been filed (or extensions have been granted) prior to delinquency, except for any such returns for which the failure to so file could not be a Material Adverse Event, and all Taxes imposed upon each Company which are due and payable have been paid prior to delinquency, other than Taxes (a) that are being contested in good faith by appropriate proceedings diligently conducted, and against which reserves or other provisions required by GAAP have been made, or (b) for which nonpayment thereof could not be a Material Adverse Event. 7.9 ENVIRONMENTAL MATTERS. No Company, after reasonable inquiry, (a) knows of any environmental condition or circumstance, such as the presence or Release of any Hazardous Materials, on any property presently or previously owned or leased by any Company or to which Hazardous Materials CREDIT AGREEMENT 31 generated by any Company have been taken, that could be a Material Adverse Event, (b) knows of any violation by any Company of any Environmental Law that could be a Material Adverse Event, or (c) knows that any Company is under any obligation to remedy any violation of any Environmental Law or any Release or threatened Release of any Hazardous Materials that could be a Material Adverse Event. 7.10 EMPLOYEE BENEFIT PLANS. (a) No Employee Plan has incurred an accumulated funding deficiency, as defined in Section 302 of ERISA and Section 412 of the Tax Code, (b) neither Borrower nor any ERISA Affiliate has incurred a liability which is currently due and remains unpaid under Title IV of ERISA to the PBGC or to an Employee Plan in connection with any such Employee Plan, (c) neither Borrower nor any ERISA Affiliate has withdrawn in whole or in part from participation in a Multiemployer Plan, (d) Borrower has not engaged in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Tax Code), and (e) no Reportable Event has occurred which is reasonably likely to result in the termination of an Employee Plan, if such accumulated funding deficiency, liability, withdrawal, prohibited transaction, or Reportable Event is reasonably likely to result individually or in the aggregate in liability on the part of Borrower in excess of $20,000,000. The present value of all benefit liabilities within the meaning of Title IV of ERISA under each Employee Plan (based on those actuarial assumptions used to fund such Employee Plan) did not, as of the last annual valuation date for the most recent plan year of such Employee Plan, exceed the value of the assets of such Employee Plan, and the total present values of all benefit liabilities within the meaning of Title IV of ERISA of all Employee Plans (based on the actuarial assumptions used to fund each such Employee Plan) did not, as of the respective annual valuation dates for the most recent plan year of each such Plan, exceed the value of the assets of all such Employee Plans. 7.11 PROPERTIES; LIENS. Each Restricted Company has good and indefeasible title to all its property reflected on the Current Financials, except for property that (a) is obsolete, or (b) has been disposed of in the ordinary course of business or as otherwise permitted by the Loan Documents. Except for Permitted Liens, there is no Lien on any property of any Restricted Company. 7.12 GOVERNMENT REGULATIONS. No Company is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, or any other Legal Requirement (other than Regulations T, U, and X of the Board of Governors of the Federal Reserve System) which regulates the incurrence of Debt. 7.13 TRANSACTIONS WITH AFFILIATES. No Restricted Company is a party to a transaction with any of its Affiliates, other than transactions upon fair and reasonable terms not materially less favorable than such Restricted Company could obtain or could become entitled to in an arm's-length transaction with a Person that was not its Affiliate. 7.14 NO DEFAULT. No event has occurred and is continuing or would result from the incurring of obligations by Borrower under this Agreement or any other Loan Document which constitutes an Event of Default or a Potential Default. No Restricted Company is in default under or with respect to any material written or oral agreements, contracts, commitments, or understandings to which any Restricted Company is party which could, individually or together with all such defaults, be a Material Adverse Event. 7.15 SOLVENCY. At the time of each Credit Extension hereunder, each Restricted Company is (and after giving effect to the transactions contemplated by the Loan Documents and any incurrence of additional Debt, will be) Solvent. CREDIT AGREEMENT 32 7.16 COMPLIANCE WITH LEGAL REQUIREMENTS. No Company is in violation of any Legal Requirements (including Environmental Laws), other than such violations which could not, individually or collectively, be a Material Adverse Event. No Company has received notice alleging any non-compliance with any Legal Requirements, except for such non-compliance which no longer exists or which could not be a Material Adverse Event. 7.17 FULL DISCLOSURE. There is no material fact or condition relating to the Loan Documents or the financial condition, business, or property of any Company which could be a Material Adverse Event and which has not been disclosed, in writing, to Administrative Agent. All information heretofore furnished by any Company to any Credit Party in connection with the Loan Documents was, and all such information hereafter furnished by any Company to any Credit Party will be, true and accurate in all material respects or based on reasonable estimates on the date as of which such information is stated or certified. 7.18 SENIOR DEBT. The Obligation constitutes (and will constitute until payment in full and cancellation of all Commitments hereunder) Borrower's direct and unconditional obligation and ranks at least pari passu with other unsecured and unsubordinated Debt of Borrower. 7.19 TAX SHELTER REGULATIONS. Borrower does not intend to treat the Borrowings and related transactions as being a "reportable transaction" (within the meaning of Treasury Regulation Section 1.6011-4). In the event Borrower determines to take any action inconsistent with such intention, it will promptly notify Administrative Agent thereof. If Borrower so notifies Administrative Agent, Borrower acknowledges that one or more Lenders may treat its Credit Extensions as part of a transaction that is subject to Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as applicable, will maintain the lists and other records required by such Treasury Regulation. SECTION 8 AFFIRMATIVE COVENANTS. Borrower covenants and agrees to perform, observe, and comply with each of the following covenants, from the Closing Date and so long thereafter as Lenders are committed to make any Credit Extensions under this Agreement and thereafter until the payment in full of all Principal Debt and payment in full of all interest, fees, and other amounts of the Obligation then due and owing, unless Borrower receives a prior written consent to the contrary by Administrative Agent as authorized by Required Lenders: 8.1 USE OF PROCEEDS. Borrower shall use the proceeds of all Credit Extensions only for the purposes represented herein. 8.2 BOOKS AND RECORDS. Borrower shall, and shall cause each other Company to, maintain books, records, and accounts necessary to prepare all Financial Statements delivered hereunder in accordance with GAAP. 8.3 ITEMS TO BE FURNISHED. Borrower shall cause the following to be furnished to Administrative Agent and each Lender: (a) ANNUAL FINANCIAL STATEMENTS. Promptly after preparation, and no later than one hundred and twenty (120) days after the last day of each fiscal year of Borrower, Financial Statements showing the consolidated and consolidating financial condition and results of operations of the Companies, as of, and for the year ended on, such day, each accompanied by: CREDIT AGREEMENT 33 (I) with respect to the consolidated Financial Statements, the unqualified opinion of a firm of nationally-recognized independent certified public accountants, based on an audit using generally accepted auditing standards, that such Financial Statements were prepared in accordance with GAAP and present fairly the consolidated financial condition and results of operations of the Companies; (II) any management letter delivered to Borrower prepared by such accounting firm with respect to such Financial Statements; and (III) a Compliance Certificate. (b) PERIODIC FINANCIAL STATEMENTS. Promptly after preparation, and no later than sixty (60) days after the last day of each fiscal quarter of Borrower (other than the last fiscal quarter of any fiscal year), Financial Statements showing the consolidated and consolidating financial condition and results of operations calculated for the Companies for such fiscal quarter and for the period from the beginning of the then-current fiscal year to such last day, accompanied by (i) an internally prepared financial summary of the Companies and other information as Administrative Agent may reasonably request, and (ii) a Compliance Certificate with respect to such Financial Statements. (c) MANAGEMENT LETTERS. Promptly upon receipt thereof, copies of all auditor's annual management letters delivered to Borrower. (d) NOTICES OF LITIGATION, DEFAULTS, ETC. Notice, promptly after Borrower knows or has reason to know of (i) the existence and status of any Litigation which is reasonably likely to be determined adversely and, if so adversely determined, could be a Material Adverse Event, or of any order or judgment for the payment of money which (individually or collectively) is in excess of $20,000,000, or any warrant of attachment, sequestration, or similar proceeding against the assets of any Company having a value (individually or collectively) of $20,000,000 or more, (ii) any material change in any material fact or circumstance represented or warranted in any Loan Document, (iii) a Potential Default or Event of Default specifying the nature thereof and what action Borrower or any other Company has taken, is taking, or proposes to take with respect thereto; provided, however, that Borrower shall have no obligation to notify Administrative Agent or Lenders of a Potential Default under SECTION 9.12 unless Borrower has actual knowledge of such Potential Default and such Potential Default has continued, or Borrower reasonably expects such Potential Default to continue, for a period of five (5) consecutive days, (iv) the receipt by any Company of any notice from any Governmental Authority of the expiration without renewal, termination, material modification or suspension of, or institution of any proceedings to terminate, materially modify, or suspend, any Authorization which any Company is required to hold in order to operate its business in compliance with all Legal Requirements, other than such expirations, terminations, suspensions, or modifications which individually or in the aggregate would not be a Material Adverse Event, (v) any federal, state, or local statute, regulation, or ordinance or judicial or administrative order limiting or controlling the operations of any Company which has been issued or adopted hereafter and which is of material adverse importance or effect in relation to the operations of the Companies taken as a whole, (vi) the receipt by any Company of notice of any violation or alleged violation of any Environmental Law, which violation or alleged violation could, individually or collectively with other such violations or allegations, reasonably be expected to be a Material Adverse Event, or (vii) (A) the occurrence of a Reportable Event that, alone or together with any other Reportable Event, could reasonably be expected to result in liability of any Company to the PBGC in an aggregate amount exceeding $20,000,000; (B) any expressed statement in writing on the part of the PBGC of its CREDIT AGREEMENT 34 intention to terminate any Employee Plan or Plans; (C) Borrower's or an ERISA Affiliate's becoming obligated to file with the PBGC a notice of failure to make a required installment or other payment with respect to an Employee Plan; or (D) the receipt by Borrower or an ERISA Affiliate from the sponsor of a Multiemployer Plan of either a notice concerning the imposition of withdrawal liability in an aggregate amount exceeding $20,000,000 or of the impending termination or reorganization of such Multiemployer Plan. (e) SCHEDULE AND EXHIBIT UPDATES. Concurrently with the delivery of each Compliance Certificate, to the extent any of the information or disclosures provided on any of the SCHEDULES or EXHIBITS delivered pursuant to this Agreement or any Loan Documents has become outdated or incorrect in any material respect, such revised or updated SCHEDULES or EXHIBITS as may be necessary or appropriate to update or correct such information or disclosures. (f) SEC FILINGS. Promptly after the filing thereof, a true, correct, and complete copy of each Form 10-K, Form 10-Q, and Form 8-K filed by or on behalf of Borrower with the Securities and Exchange Commission. (g) CHANGE IN RATINGS. Promptly upon the receipt of notice thereof, and in any event within three (3) Business Days after any change in the Moody's Rating or the S & P Rating, notice of such change. (h) TAX SHELTER REGULATIONS. Promptly after Borrower has notified Administrative Agent of any intention by Borrower to treat the Borrowings and related transactions as being a "reportable transaction" (within the meaning of Treasury Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886 or any successor form. (i) OTHER INFORMATION. Promptly upon request therefor by any Credit Party, such information (not otherwise required to be furnished under the Loan Documents) respecting the business affairs, assets, and liabilities of the Companies, as reasonably requested. 8.4 INSPECTIONS. Borrower shall, and shall cause each other Company to, upon reasonable notice, allow any Credit Party (or its Representatives) (except in the case of Administrative Agent or its Representatives or unless an Event of Default exists (which in either case shall be at the expense of Borrower), at the sole expense of such Credit Party) to inspect any of their properties, to review reports, files, and other records and to make and take away copies thereof, to conduct tests or investigations, and to discuss any of their affairs, conditions, and finances with other creditors, directors, officers, employees, other representatives, and independent accountants of the Companies, from time to time, during reasonable business hours. 8.5 TAXES. Borrower shall, and shall cause each other Company to (a) promptly pay when due any and all Taxes other than Taxes the failure to pay could not be a Material Adverse Event or the applicability, amount, or validity of which is being contested in good faith by appropriate proceedings diligently conducted, and against which reserves or other provisions required by GAAP have been made, and in respect of which levy and execution of any lien securing same have been and continue to be stayed, and (b) notify Administrative Agent immediately if the Internal Revenue Service or any other taxing authority commences or notifies any Company of its intention to commence an audit or investigation with respect to any Taxes of any kind due or alleged to be due from any Company to the extent that the failure to pay such Taxes could be a Material Adverse Event. CREDIT AGREEMENT 35 8.6 PAYMENT OF OBLIGATIONS. Borrower shall pay the Obligation in accordance with the terms and provisions of the Loan Documents. Borrower shall, and shall cause each Restricted Company to, promptly pay (or renew and extend) all of its material obligations as the same become due (unless such obligations (other than the Obligation) are being contested in good faith by appropriate proceedings). 8.7 MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS. Except as otherwise permitted by SECTION 9.10, Borrower shall, and shall cause each other Company to, at all times: (a) maintain its existence and good standing in the jurisdiction of its organization and its authority to transact business in all other jurisdictions where the failure to so maintain could be a Material Adverse Event; (b) maintain all licenses, permits, and franchises necessary for its business where the failure to so maintain could be a Material Adverse Event; (c) keep all of its assets which are useful in and necessary to its business in good working order and condition (ordinary wear and tear excepted) and make all necessary repairs thereto and replacements thereof where the failure to do so could be a Material Adverse Event; and (d) do all things necessary to obtain, renew, extend, and continue in effect all Authorizations which may at any time and from time to time be necessary for the Companies to operate their businesses in compliance with all Legal Requirements, where the failure to so obtain, renew, extend, or continue in effect could be a Material Adverse Event. 8.8 INSURANCE. Borrower shall, and shall cause each other Company to, maintain with financially sound, responsible, and reputable insurance companies or associations insurance reasonably acceptable to Administrative Agent concerning its properties and businesses against casualties and contingencies and of types and in amounts (and with co-insurance and deductibles) as is customary in the case of similar businesses. At Administrative Agent's request, Borrower shall, and shall cause each other Company to, promptly deliver to Administrative Agent evidence of insurance for each policy of insurance and evidence of payment of all premiums. 8.9 PRESERVATION AND PROTECTION OF RIGHTS. Borrower shall, and shall cause each other Company to, perform such acts and duly authorize, execute, acknowledge, deliver, file, and record any additional agreements, documents, instruments, and certificates as Administrative Agent or Required Lenders may reasonably deem necessary or appropriate in order to preserve and protect the Rights of the Credit Parties under any Loan Document. 8.10 ENVIRONMENTAL LAWS. Borrower shall, and shall cause each other Company to (a) conduct its business so as to comply with all applicable Environmental Laws and shall promptly take corrective action to remedy any non-compliance with any Environmental Law, and (b) promptly investigate and remediate any known Release or threatened Release of any Hazardous Material on any property owned by any Company or at any facility operated by any Company to the extent and degree necessary to comply with all Environmental Laws, except, in the cases of CLAUSES (a) and (b), to the extent that the failure to do so could not be a Material Adverse Event. 8.11 COMPLIANCE WITH LEGAL REQUIREMENTS. Borrower shall, and shall cause each other Company to, comply with the provisions of all Legal Requirements applicable to it, and any material written or oral agreement, contract, commitment, or understanding to which it is a party, unless the failure to so comply alone, or when aggregated with all other such non-compliance, could not be a Material Adverse Event. 8.12 DESIGNATION OF UNRESTRICTED SUBSIDIARIES CREDIT AGREEMENT 36 (a) Borrower shall have the option of designating any Restricted Subsidiary as an Unrestricted Subsidiary by giving prior written notice to the Administrative Agent and Lenders (as provided in the next sentence), provided that (i) such designation does not result in an Event of Default or a Potential Default, and (ii) the aggregate of (x) the Recourse Debt of such Restricted Subsidiary (determined as at the date of such designation), and (y) the aggregate Recourse Debt of all other Subsidiaries of Borrower, if any, which Borrower has previously designated as Unrestricted Subsidiaries (determined for each such other Subsidiary as at the date of designation of the new Unrestricted Subsidiary and determined for all such Subsidiaries (including the new Unrestricted Subsidiary) on a consolidated basis in accordance with GAAP) does not exceed the greater of (a) twenty-five percent (25%) of Consolidated Debt (determined as at the date of such designation) excluding the Restricted Subsidiary to be so designated, or (b) $500,000,000. Each notice of designation delivered pursuant to the preceding sentence shall be accompanied by the following documents, each certified by a Responsible Officer of Borrower and setting forth the relevant financial information as at a specified date not earlier than ten (10) days before the effective date of such designation: (X) a statement showing, in reasonable detail, the Tangible Net Worth, the total Debt, and the total assets of each Restricted Subsidiary the subject of such notice of designation; and (Y) a Compliance Certificate showing comparative figures for Borrower and the Restricted Subsidiaries before and after giving effect to such notice of designation and a statement demonstrating, in reasonable detail, compliance with CLAUSE (II) of the first sentence of this SECTION 8.12(A). Any attempted designation by Borrower of a Restricted Subsidiary as an Unrestricted Subsidiary other than in compliance with the limitations contained in this SECTION 8.12(a) shall be ineffective as fully as if such attempted designation had never occurred. (b) Borrower shall have the option of designating any newly formed or acquired Subsidiary as an Unrestricted Subsidiary so long as such designation complies with the requirements of the proviso in the first sentence of SECTION 8.12(a) and Administrative Agent receives a list of newly formed or acquired Unrestricted Subsidiaries in connection with the delivery of each Compliance Certificate delivered to Administrative Agent pursuant to SECTION 8.3, which Compliance Certificate shall contain a statement that Borrower is in compliance with CLAUSE (ii) of the first sentence of SECTION 8.12(a) (for such purpose the reference to "Restricted Subsidiary" in CLAUSE (ii) of the first sentence of SECTION 8.12(a) shall be deemed to read "newly formed or acquired Subsidiary"). (c) If, as of any date, the aggregate Recourse Debt of the Unrestricted Subsidiaries (determined on a consolidated basis in accordance with GAAP) exceeds the greater of (a) twenty-five percent (25%) of Consolidated Debt as of such date or (b) $500,000,000, then Borrower shall designate an Unrestricted Subsidiary or Subsidiaries to be a Restricted Subsidiary such that the aggregate Recourse Debt of the remaining Unrestricted Subsidiaries does not exceed the greater of (a) twenty-five percent (25%) of Consolidated Debt (including the newly designated Restricted Subsidiary), or (b) $500,000,000. Borrower shall notify Administrative Agent and Lenders of any such designation not later than ten (10) days after the requirement to make such designation arises pursuant to the preceding sentence, accompanied by the following documents, each certified by a Responsible Officer of Borrower and setting forth the relevant financial information as at a specified date not earlier than ten (10) days before the effective date of such designation: (X) a statement showing, in reasonable detail, the Tangible Net Worth, the total Debt, and the total assets of the Subsidiary to be designated a Restricted Subsidiary, and (Y) a Compliance Certificate showing comparative figures for Borrower and the Restricted Subsidiaries before and after giving effect to such notice of designation and a statement demonstrating, in reasonable detail, compliance with this SECTION 8.12(c). CREDIT AGREEMENT 37 SECTION 9 NEGATIVE COVENANTS. Borrower covenants and agrees to perform, observe, and comply with each of the following covenants, from the Closing Date and so long thereafter as Lenders are committed to make any Credit Extensions under this Agreement and thereafter until the payment in full of all Principal Debt and payment in full of all other interest, fees, and other amounts of the Obligation then due and owing, unless Borrower receives a prior written consent to the contrary by Administrative Agent as authorized by Required Lenders (or all Lenders, in the case of SECTION 9.6): 9.1 EMPLOYEE BENEFIT PLANS. Borrower shall not, and shall not permit any ERISA Affiliate to, directly or indirectly, engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Tax Code), and the Companies and their respective ERISA Affiliates shall not, directly or indirectly, (a) incur any "accumulated funding deficiency" as such term is defined in Section 302 of ERISA with respect to any Employee Plan, (b) permit any Employee Plan to be subject to involuntary termination proceedings pursuant to Title IV of ERISA, or (c) fully or partially withdraw from any Multiemployer Plan, if such prohibited transaction, accumulated funding deficiency, termination proceeding, or withdrawal would result individually or in the aggregate in liability on the part of Borrower in excess of $20,000,000. 9.2 LIENS. Borrower shall not, and shall not permit any other Restricted Company to, directly or indirectly, (a) create, incur, or suffer or permit to be created or incurred or to exist any Lien upon any Stock of any Restricted Subsidiary (other than Stock not owned by a Company), or (b) create, incur, or suffer or permit to be created or incurred or to exist any Lien upon any of its other assets, except in the case of CLAUSE (B): (i) pledges or deposits made to secure payment of worker's compensation, or to participate in any fund in connection with worker's compensation, unemployment insurance, pensions, or other social security programs; (ii) good-faith pledges or deposits made to secure performance of bids, tenders, insurance or other contracts (other than for the repayment of borrowed money), or leases, or to secure statutory obligations, surety or appeal bonds, or indemnity, performance, or other similar bonds as all such Liens arise in the ordinary course of business of the Restricted Companies; (iii) encumbrances consisting of zoning restrictions, easements, or other restrictions on the use of real property, none of which impair in any material respect the use of such property by the Person in question in the operation of its business, and none of which is violated by existing or proposed structures or land use; (iv) Liens of landlords or of mortgagees of landlords, arising solely by operation of law, on fixtures and movable property located on premises leased in the ordinary course of business; (v) the following, so long as the applicability, amount, or validity of which is being contested in good faith by appropriate proceedings diligently conducted, and against which reserves or other provisions required by GAAP have been made, levy and execution thereon have been stayed and continue to be stayed, and they do not in the aggregate materially detract from the value of the property of the Person in question, or materially impair the use thereof in the operation of its business: (A) claims and Liens for Taxes (other than Liens relating to CREDIT AGREEMENT 38 Environmental Laws or ERISA); (B) claims and Liens upon, and defects of title to, real or personal property, including any attachment of personal or real property or other legal process prior to adjudication of a dispute of the merits; and (C) claims and Liens of mechanics, materialmen, warehousemen, carriers, landlords, or other like Liens; (vi) Liens in cash collateral securing letters of credit under that certain Letter of Credit and Reimbursement Agreement dated of even date herewith, by and among Borrower, Bank of America, N.A., as Administrative Agent, and the lenders party thereto; (vii) Liens in favor of Borrower; (viii) Liens in assets or properties acquired with purchase money Debt securing only such purchase money Debt; (ix) Liens on any property or asset of any corporation or other entity existing at the time such corporation or other entity becomes a Subsidiary or is merged or consolidated with or into any Restricted Company or at the time such property or asset is acquired from such corporation or other entity, other than any Lien placed on any property or asset of such corporation or other entity in contemplation of such acquisition, merger, or consolidation; (x) Liens securing non-recourse Debt incurred in connection with industrial revenue or similar financing; (xi) Liens for current taxes not yet due; and (xii) any renewals, extensions, or refinancings (but not increase in the principal amount thereof) of any of the foregoing Permitted Liens. 9.3 SUBSIDIARY INDEBTEDNESS; LIMITATIONS ON UPSTREAMING. Borrower shall not permit any Restricted Subsidiary to guaranty any Debt of Borrower unless such Restricted Subsidiary also executes a pari passu guaranty of the Obligation. Borrower shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly agree to any restriction or limitation on the making of dividends or distributions, the repaying of loans or advances or the transferring of assets from any Restricted Subsidiary to Borrower or any other Restricted Subsidiary, except (a) restrictions and limitations imposed by Legal Requirements, (b) customary restrictions and limitations contained in agreements relating to the sale of a Subsidiary or its assets that is permitted hereunder and (c) any other restrictions that could not reasonably be expected to cause a Material Adverse Event. 9.4 TRANSACTIONS WITH AFFILIATES. Borrower shall not, and shall not permit any other Restricted Company to, enter into any transaction with any of its Affiliates, other than transactions upon fair and reasonable terms not materially less favorable than such Restricted Company could obtain or could become entitled to in an arm's-length transaction with a Person that was not its Affiliate. 9.5 COMPLIANCE WITH DOCUMENTS. Borrower shall not, and shall not permit any other Company to, violate the provisions of its Constituent Documents, or modify, repeal, replace, or amend any provision of its Constituent Documents, if such action could materially and adversely affect the Rights of any Credit Party under this Agreement or the other Loan Documents. CREDIT AGREEMENT 39 9.6 ASSIGNMENT. Borrower shall not assign or transfer any of its Rights, duties, or obligations under any of the Loan Documents. 9.7 FISCAL YEAR AND ACCOUNTING METHODS. Borrower shall not, and shall not permit any other Restricted Company to, change its method of accounting, other than immaterial changes in methods or as required by GAAP. Borrower shall not, and shall not permit any other Restricted Company to, change its fiscal year for book accounting purposes, except upon the delivery of written notice to Administrative Agent. 9.8 GOVERNMENT REGULATIONS. Borrower shall not, and shall not permit any other Restricted Company to, conduct its business in such a way that it will become subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, or any other Legal Requirement (other than Regulations T, U, and X of the Board of Governors of the Federal Reserve System) which regulates the incurrence of Debt. 9.9 SALE OF ASSETS. Borrower shall not, and shall not permit any other Restricted Company to, sell, assign, transfer, or otherwise dispose of all or substantially all of its assets, other than (a) sales, assignments, transfers, or other dispositions of assets by a Restricted Subsidiary to Borrower or to another Restricted Subsidiary and (b) sales, assignments, transfers, or other dispositions of assets (to Persons other than Borrower or a Restricted Subsidiary) of Restricted Subsidiaries (i) having an aggregate fair market value not to exceed $100,000,000 in any fiscal year, or (ii) in the ordinary course of business. 9.10 MERGERS AND DISSOLUTIONS; SALE OF CAPITAL STOCK. Borrower shall not, and shall not permit any other Restricted Company to, directly or indirectly, merge or consolidate with any other Person, other than (a) mergers or consolidations involving Borrower if Borrower is the surviving entity, and (b) mergers or consolidations among Wholly-owned Companies, in each case so long as no Potential Default or Event of Default exists or would result therefrom; provided that in any merger involving any Restricted Company, a Restricted Company must be the surviving entity. Borrower shall not, and shall not permit any other Restricted Company to, liquidate, wind up, or dissolve (or suffer any liquidation or dissolution), other than liquidations, wind ups, or dissolutions incident to mergers or consolidations permitted under this SECTION 9.10. Borrower shall not, and shall not permit any other Company to, sell, assign, lease, transfer, or otherwise dispose of the Stock of any other Restricted Company, other than sales, assignments, leases, transfers, or other such dispositions to another Company. Notwithstanding the foregoing, nothing in this Agreement shall prohibit any mergers, consolidations, liquidations, wind ups, or dissolutions of any Subsidiary or the sale, assignment, lease, transfer, or other disposal of the Stock of any Subsidiary so long as (i) no Potential Default or Event of Default exists or would result from such merger, consolidation, liquidation, wind up, or dissolution or such sale, assignment, lease, transfer, or other disposal of such Stock, (ii) after giving effect thereto, the character of the business of the Restricted Companies, on a consolidated basis, will not be materially changed, and (iii) the assets, annual revenues, and annual net income, in each case determined in accordance with GAAP, of the affected Subsidiary does not exceed $100,000,000. 9.11 NEW BUSINESS. Borrower shall not, and shall not permit any other Restricted Company to, directly or indirectly, permit or suffer to exist any material change (on a consolidated basis) in the type of businesses in which it is engaged from the businesses (on a consolidated basis) of the Companies as conducted on the Closing Date. 9.12 FINANCIAL COVENANTS. CREDIT AGREEMENT 40 (a) LEVERAGE RATIO. Borrower shall not permit the Leverage Ratio (expressed as a percent), as of the last day of any fiscal quarter of Borrower, to be greater than fifty-five percent (55%). (b) INTEREST COVERAGE. Borrower shall not permit the Interest Coverage Ratio, as of the last day of any fiscal quarter of Borrower, to be less than 2.0 to 1.0. (c) MINIMUM TANGIBLE NET WORTH. Borrower shall not permit Consolidated Tangible Net Worth, as of any date, to be less than the sum of (a) $1,700,000,000, plus (b) fifty percent (50%) of the amount of Net Proceeds from any Equity Issuance subsequent to March 31, 2003, plus (c) fifty percent (50%) of Cumulative Consolidated Net Income. SECTION 10 DEFAULT. The term "EVENT OF DEFAULT" means the occurrence of any one or more of the following events: 10.1 PAYMENT OF OBLIGATION. The failure or refusal of Borrower to pay (a) all or any part of the Principal Debt when the same becomes due (whether by its terms, by acceleration, or as otherwise provided in the Loan Documents), or (b) any other part of the Obligation within five (5) calendar days after the due date, or (c) the indemnification and reimbursement obligations provided for in the Loan Documents after demand therefor. 10.2 COVENANTS. The failure or refusal of Borrower (and, if applicable, any other Company) to punctually and properly perform, observe, and comply with: (a) any covenant, agreement, or condition contained in SECTION 8.3 (other than SECTIONS 8.3(e), 8.3(f), and 8.3(g)); or (b) any covenant, agreement, or condition contained in SECTIONS 8.3(e), 8.3(f), 8.3(g), 8.12, or 9, and such failure or refusal continues unremedied for ten (10) days after the earlier of (i) notice given by Administrative Agent to Borrower of such failure or refusal, or (ii) Borrower's actual knowledge of such failure or refusal; or (c) any other covenant, agreement, or condition contained in any Loan Document (other than the covenants to pay the Obligation and the covenants in CLAUSE (A) or (B) preceding) and such failure or refusal continues unremedied for thirty (30) days after the earlier of (i) notice given by Administrative Agent to Borrower of such failure or refusal, or (ii) Borrower's actual knowledge of such failure or refusal. 10.3 DEBTOR RELIEF. Any Restricted Company (a) shall not be Solvent, (b) fails to pay its Debts generally as they become due, (c) makes an assignment for the benefit of creditors, (d) voluntarily seeks, consents to, or acquiesces in the benefit of any Debtor Relief Law, other than as a creditor or claimant, or (e) becomes a party to or is made the subject of any proceeding provided for by any Debtor Relief Law, other than as a creditor or claimant, that could suspend or otherwise adversely affect the Rights of any Credit Party granted in the Loan Documents (unless, in the event such proceeding is involuntary, the petition instituting same is dismissed within sixty (60) days after its filing without the entry of an order for relief or the appointment of a receiver) or an order of relief or judgment is entered in, or a receiver or similar officer is appointed pursuant to, any such proceeding. CREDIT AGREEMENT 41 10.4 JUDGMENTS AND ATTACHMENTS. Any Restricted Company fails, within sixty (60) days after entry, to pay, bond, or otherwise discharge any judgment or order for the payment of money in excess of $20,000,000 (individually or collectively) or any warrant of attachment, sequestration, or similar proceeding against any Restricted Company's assets having a value (individually or collectively) of $20,000,000, in each case, which is not stayed on appeal. 10.5 GOVERNMENT ACTION. (a) A final non-appealable order is issued by any Governmental Authority, including, but not limited to, the United States Justice Department, seeking to cause any Restricted Company to divest a significant portion of its assets pursuant to any antitrust, restraint of trade, unfair competition, industry regulation, or similar Legal Requirements; or (b) Any Governmental Authority shall condemn, seize, or otherwise appropriate, or take custody or control of, all or any substantial portion of the assets of any Restricted Company. 10.6 MISREPRESENTATION. Any representation or warranty made by Borrower contained in any Loan Document shall at any time prove to have been incorrect in any material respect when made. 10.7 CHANGE OF CONTROL. A Change in Control of Borrower shall occur. 10.8 DEFAULT UNDER OTHER DEBT AND AGREEMENTS. (a) Any Restricted Company fails to make any payments when due (after lapse of any applicable grace periods) with respect to any Debt of such Restricted Company (other than the Obligation) in excess (individually or collectively) of $20,000,000; and (b) Any default exists under any agreement (other than the Loan Documents) to which any Restricted Company is a party, which has not been waived by the parties thereto, the effect of which has been to cause, or to permit any Person to cause, an amount of Debt of such Restricted Company in excess (individually or collectively) of $20,000,000 to become due and payable by such Restricted Company (whether by acceleration or by its terms). 10.9 EMPLOYEE BENEFIT PLANS. (a) A "Reportable Event" or "Reportable Events," or a failure to make a required installment or other payment (within the meaning of Section 412(n)(1) of the Tax Code), shall have occurred with respect to any Employee Plan or Plans that is reasonably expected to result in liability of Borrower to the PBGC or to an Employee Plan in an aggregate amount exceeding $20,000,000; or (b) Borrower or any ERISA Affiliate has provided to any affected party a sixty (60) day notice of intent to terminate an Employee Plan pursuant to a distress termination in accordance with Section 4041(c) of ERISA if the liability reasonably expected to be incurred as a result of such termination will exceed $20,000,000; or (c) A trustee shall be appointed by a United States district court to administer any such Employee Plan pursuant to SECTION 4042(b) of ERISA; or CREDIT AGREEMENT 42 (d) The PBGC shall institute proceedings (including giving notice of intent thereof) to terminate any such Employee Plan if such termination proceeding is reasonably expected to result in liability on the part of Borrower in excess of $20,000,000; or (e) (i) Borrower or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred withdrawal liability (within the meaning of Section 4201 of ERISA) to such Multiemployer Plan, (ii) Borrower or such ERISA Affiliate does not have reasonable grounds for contesting such withdrawal liability or is not contesting such withdrawal liability in a timely and appropriate manner and (iii) the amount of such withdrawal liability specified in such notice, when aggregated with all other amounts required to be paid to Multiemployer Plans in connection with withdrawal liabilities (determined as of the date or dates of such notification), exceeds $20,000,000; or (f) Borrower or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, if solely as a result of such reorganization or termination the aggregate annual contributions of Borrower and its ERISA Affiliates to all Multiemployer Plans that are then in reorganization or have been or are being terminated have been or will be increased over the amounts required to be contributed to such Multiemployer Plans for their most recently completed plan years by an amount exceeding $20,000,000. 10.10 VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS. Any Loan Document shall, at any time after its execution and delivery and for any reason, cease to be in full force and effect in any material respect or be declared to be null and void (other than in accordance with the terms hereof or thereof) or the validity or enforceability thereof be contested by Borrower or Borrower shall deny in writing that it has any or any further liability or obligations under any Loan Document to which it is a party. SECTION 11 RIGHTS AND REMEDIES. 11.1 REMEDIES UPON DEFAULT. (a) If an Event of Default exists under SECTION 10.3(c), 10.3(d), or 10.3(e), then the commitment to extend credit hereunder shall automatically terminate and the entire unpaid balance of the Obligation shall automatically become due and payable without any action or notice of any kind whatsoever. (b) If any Event of Default exists, then Administrative Agent may (and, subject to the terms of SECTION 12, shall upon the request of Required Lenders) or Required Lenders may, do any one or more of the following: (i) if the maturity of the Obligation has not already been accelerated under SECTION 11.1(a), then declare the entire unpaid balance of the Obligation, or any part thereof, immediately due and payable, whereupon it shall be due and payable; (ii) terminate the commitments of Lenders to extend credit hereunder; (iii) reduce any claim to judgment; (iv) to the extent permitted by all Legal Requirements, exercise (or request each Lender to, and each Lender shall be entitled to, exercise) the Rights of offset or banker's Lien against the interest of any Company in and to every account and other property of any Company which are in the possession of any Credit Party to the extent of the full amount of the Obligation (to the extent permitted by all Legal Requirements, Borrower being deemed directly obligated to each Credit Party in the full amount of the Obligation for such purposes); and (v) exercise any and all other legal or equitable Rights afforded by the Loan Documents, the Legal Requirements of the State of Texas, or any other applicable jurisdiction as Administrative Agent shall deem appropriate, or otherwise, including, but not limited to, the Right to bring suit or other proceedings before any CREDIT AGREEMENT 43 Governmental Authority either for specific performance of any covenant or condition contained in any of the Loan Documents or in aid of the exercise of any Right granted to any Credit Party in any of the Loan Documents; provided that each Lender reserves the Right to bring suit to recover Obligations owing to such Lender after such Obligations become due and payable in the event Administrative Agent or Required Lenders do not do so on its behalf. 11.2 BORROWER WAIVERS. To the extent permitted by all Legal Requirements, Borrower hereby waives presentment and demand for payment, protest, notice of intention to accelerate, notice of acceleration, and notice of protest and nonpayment, and agrees that its liability with respect to the Obligation (or any part thereof) shall not be affected by any renewal or extension in the time of payment of the Obligation (or any part thereof), by any indulgence, or by any release or change in any security for the payment of the Obligation (or any part thereof). 11.3 PERFORMANCE BY ADMINISTRATIVE AGENT. If any covenant, duty, or agreement of Borrower is not performed in accordance with the terms of the Loan Documents, while an Event of Default exists, then Administrative Agent may, at its option (but subject to the approval of Required Lenders), perform or attempt to perform such covenant, duty, or agreement on behalf of Borrower. In such event, any amount expended by Administrative Agent in such performance or attempted performance shall be payable by Borrower to Administrative Agent on demand, shall become part of the Obligation, and shall bear interest at the Default Rate from the date of such expenditure by Administrative Agent until paid. Notwithstanding the foregoing, it is expressly understood that Administrative Agent does not assume, and shall never have, except by its express written consent, any liability or responsibility for the performance of any covenant, duty, or agreement of Borrower. 11.4 DELEGATION OF DUTIES AND RIGHTS. The Credit Parties may perform any of their duties or exercise any of their Rights under the Loan Documents by or through their respective Representatives. 11.5 NOT IN CONTROL. Nothing in any Loan Document shall, or shall be deemed to (a) give any Credit Party the Right to exercise control over the assets (including real property), affairs, or management of any Company, (b) preclude or interfere with compliance by any Company with any Legal Requirement, or (c) require any act or omission by any Company that may be harmful to Persons or property. Any "Material Adverse Event" or other materiality qualifier in any representation, warranty, covenant, or other provision of any Loan Document is included for credit documentation purposes only and shall not, and shall not be deemed to, mean that any Credit Party acquiesces in any non-compliance by any Company with any Legal Requirement or document, or that any Credit Party does not expect any Company to promptly, diligently, and continuously carry out all appropriate removal, remediation, and termination activities required or appropriate in accordance with all Environmental Laws. The Credit Parties have no fiduciary relationship with or fiduciary duty to any Company arising out of or in connection with the Loan Documents, and the relationship between the Credit Parties, on the one hand, and the Companies, on the other hand, in connection with the Loan Documents is solely that of debtor and creditor. The power of the Credit Parties under the Loan Documents is limited to the Rights provided in the Loan Documents, which Rights exist solely to assure payment and performance of the Obligation and may be exercised in a manner calculated by the Credit Parties in their respective good faith business judgment. 11.6 COURSE OF DEALING. The acceptance by any Credit Party at any time and from time to time of partial payment on the Obligation shall not be deemed to be a waiver of any Event of Default then existing. No waiver by any Credit Party of any Event of Default shall be deemed to be a waiver of any other then-existing or subsequent Event of Default. No delay or omission by any Credit Party in CREDIT AGREEMENT 44 exercising any Right under the Loan Documents shall impair such Right or be construed as a waiver thereof or any acquiescence therein, nor shall any single or partial exercise of any such Right preclude other or further exercise thereof, or the exercise of any other Right under the Loan Documents or otherwise. 11.7 CUMULATIVE RIGHTS. All Rights available to the Credit Parties under the Loan Documents are cumulative of and in addition to all other Rights granted to the Credit Parties at law or in equity, whether or not the Obligation is due and payable and whether or not the Credit Parties have instituted any suit for collection, foreclosure, or other action in connection with the Loan Documents. 11.8 APPLICATION OF PROCEEDS. Any and all proceeds ever received by any Credit Party from the exercise of any Rights pertaining to the Obligation shall be applied to the Obligation in the order and manner set forth in SECTION 3.11. 11.9 CERTAIN PROCEEDINGS. Borrower will promptly execute and deliver, or cause the execution and delivery of, all applications, certificates, instruments, registration statements, and all other documents and papers any Credit Party may reasonably request in connection with the obtaining of any consent, approval, registration, qualification, permit, license, or Authorization of any Governmental Authority or other Person necessary or appropriate for the effective exercise of any Rights under the Loan Documents. Because Borrower agrees that the Credit Parties' remedies at law for failure of Borrower to comply with the provisions of this SECTION 11.9 would be inadequate and that such failure would not be adequately compensable in damages, Borrower agrees that the covenants of this SECTION 11.9 may be specifically enforced. 11.10 EXPENSES; INDEMNIFICATION. (a) Borrower agrees (i) to pay or reimburse Administrative Agent for all reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation, negotiation, and execution of this Agreement and the other Loan Documents and any amendment, waiver, consent, or other modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs, and (ii) to pay or reimburse Administrative Agent and each Lender for all costs and expenses incurred in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any "workout" or restructuring in respect of the Obligation and during any legal proceeding, including any proceeding under any Debtor Relief Law), including all Attorney Costs. The foregoing costs and expenses shall include all search, filing, recording, title insurance, and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by Administrative Agent and the cost of independent public accountants and other outside experts retained by the Administrative Agent or any Lender. All amounts due under this SECTION 11.10(a) shall be payable within ten (10) Business Days after demand therefor. The agreements in this SECTION 11.10(a) shall survive the termination of the Commitments and repayment of the Obligation. (b) Whether or not the transactions contemplated hereby are consummated, Borrower shall indemnify and hold harmless each Agent-Related Person, each Lender and their respective Affiliates, directors, officers, employees, counsel, agents, and attorneys-in-fact (collectively, "INDEMNITEES") from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses, and disbursements (including Attorney Costs) of any kind or nature CREDIT AGREEMENT 45 whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (i) the execution, delivery, enforcement, performance or administration of any Loan Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (ii) any Commitment, Borrowing, or the use or proposed use of the proceeds therefrom, or (iii) any actual or alleged presence or release of Hazardous Materials on or from any property currently or formerly owned or operated by Borrower or any Subsidiary, or any liability under Environmental Law related in any way to Borrower or any Subsidiary, or (iv) any actual or prospective claim, litigation, investigation, or proceeding relating to any of the foregoing, whether based on contract, tort, or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation, or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the "INDEMNIFIED LIABILITIES"), IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses, or disbursements are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith, or willful misconduct of such Indemnitee. No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information transmission systems in connection with this Agreement, nor shall Borrower or any Indemnitee have any liability for any indirect, punitive, or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date). All amounts due under this SECTION 11.10(b) shall be payable within ten (10) Business Days after demand therefor. The agreements in this SECTION 11.10(B) shall survive the resignation of Administrative Agent, the replacement of any Lender, the termination of the Commitments, and the repayment, satisfaction or discharge of the Obligation. SECTION 12 ADMINISTRATIVE AGENT. 12.1 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT. Each Lender hereby irrevocably appoints, designates, and authorizes Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall Administrative Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Administrative Agent. Without limiting the generality of the foregoing sentence, the use of the term "agent" herein and in the other Loan Documents with reference to Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. 12.2 DELEGATION OF DUTIES. Administrative Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees, or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such CREDIT AGREEMENT 46 duties. Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct. 12.3 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein), or (b) be responsible in any manner to any Lender or participant for any recital, statement, representation or warranty made by any Company or any officer thereof, contained herein or in any other Loan Document, or in any certificate, report, statement, or other document referred to or provided for in, or received by Administrative Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability, or sufficiency of this Agreement or any other Loan Document, or for any failure of any Company or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books, or records of any Company or any Affiliate thereof. 12.4 RELIANCE BY ADMINISTRATIVE AGENT. (a) Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message, statement, or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Company), independent accountants and other experts selected by Administrative Agent. Administrative Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders (or such greater number of Lenders as may be expressly required hereby in any instance) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders. (b) For purposes of determining compliance with the conditions specified in SECTION 6.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto. 12.5 NOTICE OF EVENT OF DEFAULT. Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of Default, except with respect to defaults in the payment of principal, interest, and fees required to be paid to Administrative Agent for the account of the Lenders, unless Administrative Agent shall have received written notice from a Lender or Borrower referring to this Agreement, describing such Event of Default and stating that such notice is a "notice of default." Administrative Agent will notify Lenders of its receipt of any such notice and of its giving of notice to Borrower pursuant to SECTIONS 10.2(b) or (c). Administrative Agent shall take such action with CREDIT AGREEMENT 47 respect to such Event of Default as may be directed by the Required Lenders in accordance with SECTION 10; provided, however, that unless and until Administrative Agent has received any such direction, Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default as it shall deem advisable or in the best interest of the Lenders. 12.6 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT. Each Lender acknowledges that no Agent-Related Person has made any representation or warranty to it, and that no act by Administrative Agent hereafter taken, including any consent to and acceptance of any assignment or review of the affairs of any Company or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender as to any matter, including whether Agent-Related Persons have disclosed material information in their possession. Each Lender represents to Administrative Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial, and other condition and creditworthiness of the Companies, and all applicable bank or other regulatory Legal Requirements relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrower hereunder. Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals, and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial, and other condition and creditworthiness of Borrower. Except for notices, reports, and other documents expressly required to be furnished to Lenders by Administrative Agent herein, Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial, and other condition or creditworthiness of any Companies or any of their respective Affiliates which may come into the possession of any Agent-Related Person. 12.7 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the transactions contemplated hereby are consummated, Lenders shall indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of any Company and without limiting the obligation of any Company to do so), Pro Rata, and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by it; provided, however, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities to the extent determined in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from such Agent-Related Person's own gross negligence or willful misconduct; provided, however, that no action taken in accordance with the directions of the Required Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this SECTION 12.7. Without limitation of the foregoing, each Lender shall reimburse Administrative Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that Administrative Agent is not reimbursed for such expenses by or on behalf of Borrower. The undertaking in this SECTION 12.7 shall survive termination of the Aggregate Commitments, the payment of the Obligation and the resignation of Administrative Agent. CREDIT AGREEMENT 48 12.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Administrative Agent and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with each Company and its respective Affiliates as though Administrative Agent were not Administrative Agent and without notice to or consent of Lenders. Lenders acknowledge that, pursuant to such activities, Administrative Agent or its Affiliates may receive information regarding any Company or its Affiliates (including information that may be subject to confidentiality obligations in favor of such Company or such Affiliate) and acknowledge that Administrative Agent shall be under no obligation to provide such information to them. With respect to Borrowings, Administrative Agent shall have the same rights and powers under this Agreement as any other Lender and may exercise such rights and powers as though it were not Administrative Agent, and the terms "Lender" and "Lenders" include Administrative Agent in its individual capacity. 12.9 SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign as Administrative Agent upon thirty (30) days' notice to Lenders. If Administrative Agent resigns under this Agreement, the Required Lenders shall appoint from among Lenders a successor administrative agent for Lenders, which successor administrative agent shall be consented to by Borrower at all times other than during the existence of an Event of Default (which consent of Borrower shall not be unreasonably withheld or delayed). If no successor administrative agent is appointed prior to the effective date of the resignation of Administrative Agent, Administrative Agent may appoint, after consulting with Lenders and with the consent of Borrower at all times other than during the existence of an Event of Default (which consent of Borrower shall not be unreasonably withheld or delayed), a successor administrative agent from among Lenders. Upon the acceptance of its appointment as successor administrative agent hereunder, the Person acting as such successor administrative agent shall succeed to all the rights, powers, and duties of the retiring Administrative Agent, and the term "Administrative Agent" shall mean such successor administrative agent, and the retiring Administrative Agent's appointment, powers, and duties as Administrative Agent shall be terminated without any other or further act or deed on the part of such retiring Administrative Agent or any other Lender. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this SECTION 12 and SECTION 11.10 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor administrative agent has accepted appointment as Administrative Agent by the date which is thirty (30) days following a retiring Administrative Agent's notice of resignation, the retiring Administrative Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. 12.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIMS. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition, or other judicial proceeding relative to any Company, Administrative Agent (irrespective of whether the principal of any Borrowing shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether Administrative Agent shall have made any demand on Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise: (a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Borrowings and any other Obligation that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of Lenders and Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements, and advances of Lenders and Administrative Agent and their respective agents and counsel and all other CREDIT AGREEMENT 49 amounts due Lenders and Administrative Agent under SECTIONS 5 and 11.10) allowed in such judicial proceeding; and (b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due Administrative Agent under SECTIONS 5 and 11.10. Nothing contained herein shall be deemed to authorize Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment, or composition affecting the Obligation or the rights of any Lender or to authorize Administrative Agent to vote in respect of the claim of any Lender in any such proceeding. 12.11 OTHER AGENT; ARRANGERS; AND MANAGERS. No Lender or other Persons identified on the facing page or signature pages of this Agreement as a "syndication agent," "documentation agent," "book manager," "arranger," or "lead arranger" shall have any right, power, obligation, liability, responsibility, or duty under this Agreement other than, in the case of such Lenders, those applicable to all Lenders as such. Without limiting the foregoing, no Lender or other Person so identified shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any Lenders or other Persons so identified in deciding to enter into this Agreement or in taking or not taking action hereunder. SECTION 13 MISCELLANEOUS. 13.1 HEADINGS. The headings, captions, and arrangements used in any of the Loan Documents are, unless specified otherwise, for convenience only and shall not be deemed to limit, amplify, or modify the terms of the Loan Documents, nor affect the meaning thereof. 13.2 NONBUSINESS DAYS. In any case where any payment or action is due under any Loan Document on a day which is not a Business Day, such payment or action may be delayed until the next-succeeding Business Day, but interest and fees shall continue to accrue in respect of any payment to which it is applicable until such payment is in fact made; provided that if, in the case of any such payment in respect of a Eurodollar Borrowing, the next-succeeding Business Day is in the next calendar month, then such payment shall be made on the next-preceding Business Day. 13.3 COMMUNICATIONS. (a) GENERAL. Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission). All such written notices shall be mailed, faxed, or delivered to the applicable address, facsimile number, or (subject to SECTION 13.3(C) below) electronic mail address, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number specified for such Person on SCHEDULE 2.1 or to such other address, facsimile number, electronic mail CREDIT AGREEMENT 50 address, or telephone number as shall be designated by such party in a notice to the other parties. All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four (4) Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of SECTION 13.3(C) below), when delivered; provided, however, that notices and other communications to Administrative Agent pursuant to SECTION 2 shall not be effective until actually received by Administrative Agent. In no event shall a voicemail message be effective as a notice, communication or confirmation hereunder. (b) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. Loan Documents may be transmitted and/or signed by facsimile. The effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and effect as manually-signed originals and shall be binding on all Companies, Administrative Agent, and Lenders. Administrative Agent may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature. (c) LIMITED USE OF ELECTRONIC MAIL. Electronic mail and Internet and intranet websites may be used only to distribute routine communications and to distribute Loan Documents for execution by the parties thereto, and may not be used for any other purpose. (d) RELIANCE BY ADMINISTRATIVE AGENT AND LENDERS. Administrative Agent and Lenders shall be entitled to rely and act upon any notices (including telephonic Notices of Borrowing) purportedly given by or on behalf of Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. Borrower shall indemnify each Agent-Related Person and each Lender from all losses, costs, expenses, and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of Borrower. All telephonic notices to and other communications with Administrative Agent may be recorded by Administrative Agent, and each of the parties hereto hereby consents to such recording. 13.4 FORM AND NUMBER OF DOCUMENTS. Each agreement, document, instrument, or other writing to be furnished under any provision of this Agreement must be in form and substance and in such number of counterparts as may be reasonably satisfactory to Administrative Agent and its counsel. 13.5 EXCEPTIONS TO COVENANTS. Borrower shall not, and shall not permit any other Company to, take any action or fail to take any action which is permitted as an exception to any of the covenants contained in any Loan Document if such action or omission would result in the breach of any other covenant contained in any of the Loan Documents. 13.6 SURVIVAL. All covenants, agreements, undertakings, representations, and warranties made in any of the Loan Documents shall survive the execution and delivery thereof and all closings under the Loan Documents. All such representations and warranties have been or will be relied upon by Administrative Agent and each Lender regardless of any investigation made by Administrative Agent or any Lender or on their behalf and notwithstanding that Administrative Agent or any Lender may have had notice or knowledge of any Potential Default or Event of Default at the time of any Borrowing and shall continue in full force and effect as long as any Borrowing or other Obligation is outstanding. All rights CREDIT AGREEMENT 51 of, and provisions relating to, reimbursement and indemnification of any Credit Party shall survive termination of this Agreement and payment in full of the Obligation. 13.7 GOVERNING LAW. THE LEGAL REQUIREMENTS OF THE STATE OF TEXAS AND OF THE UNITED STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF THE PARTIES TO THE LOAN DOCUMENTS AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION OF THE LOAN DOCUMENTS. 13.8 INVALID PROVISIONS. If any provision in any Loan Document is held to be illegal, invalid, or unenforceable, then such provision shall be fully severable; the appropriate Loan Document shall be construed and enforced as if such provision had never comprised a part thereof; and the remaining provisions thereof shall remain in full force and effect and shall not be affected by such provision or by its severance therefrom. Each Credit Party and each Company party to such Loan Document agree to negotiate, in good faith, the terms of a replacement provision as similar to the severed provision as may be possible and be legal, valid, and enforceable. 13.9 ENTIRETY. THE RIGHTS AND OBLIGATIONS OF BORROWER AND THE CREDIT PARTIES SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN SUCH PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS. THIS AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY BORROWER AND/OR ANY CREDIT PARTY (TOGETHER WITH ALL COMMITMENT LETTERS AND FEE LETTERS AS THEY RELATED TO THE PAYMENT OF FEES AFTER THE CLOSING DATE)REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 13.10 JURISDICTION; VENUE; SERVICE OF PROCESS; JURY TRIAL. EACH PARTY HERETO, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, HEREBY (A) IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN TEXAS, AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION BY SERVICE OF PROCESS AS PROVIDED BY TEXAS LEGAL REQUIREMENTS, (B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY ALL LEGAL REQUIREMENTS, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION BROUGHT IN ANY SUCH COURT, (C) IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (D) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH LITIGATION BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, AT ITS ADDRESS SET FORTH HEREIN, (E) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY HERETO ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE OBLIGATION SHALL BE BY COURT TRIAL WITHOUT JURY, AND (F) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY ALL LEGAL REQUIREMENTS, ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT, THE TRANSACTIONS CONTEMPLATED THEREBY, OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN CREDIT AGREEMENT 52 DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREINAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR COPY OF THIS SECTION 13.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. The scope of each of the foregoing waivers is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including contract claims, tort claims, breach of duty claims, and all other common law and statutory claims. Borrower and each other party to this Agreement acknowledge that this waiver is a material inducement to the agreement of each party hereto to enter into a business relationship, that each has already relied on this waiver in entering into this Agreement, and each will continue to rely on each of such waivers in related future dealings. Borrower and each other party to this Agreement warrant and represent that they have reviewed these waivers with their legal counsel, and that they knowingly and voluntarily agree to each such waiver following consultation with legal counsel. THE WAIVERS IN THIS SECTION 13.10 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS, AND REPLACEMENTS TO OR OF THIS OR ANY OTHER Loan Document. In the event of Litigation, this Agreement may be filed as a written consent to a trial by the court. 13.11 AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS. (a) Except as otherwise specifically provided, (i) this Agreement may only be amended, modified or waived by an instrument in writing executed jointly by Borrower and Required Lenders, and, in the case of any matter affecting Administrative Agent by Administrative Agent, and may only be supplemented by documents delivered or to be delivered in accordance with the express terms hereof, and (ii) the other Loan Documents may only be the subject of an amendment, modification, or waiver if Borrower and Required Lenders, and, in the case of any matter affecting Administrative Agent (except as set forth above), Administrative Agent, have approved same; provided that no such amendment or waiver shall, unless signed by each Lender directly affected thereby, (i) increase the Commitment of such Lender, (ii) reduce the principal of or rate of interest on any Borrowing or any fees or other amounts payable hereunder, (iii) postpone any date fixed for the payment of any scheduled installment of principal of or interest on any Borrowing or any fees or other amounts payable hereunder or for termination of any of the Total Commitment, (iv) change the percentage of the Total Commitment or of the unpaid principal amount of the Notes, or the number of Lenders, which shall be required for Lenders or any of them to take any action under this SECTION 13.11(a) or any other provision of this Agreement, or (v) amend, modify or waive this SECTION 13.11(a) or the Pro Rata or ratable treatment of Lenders under this Agreement. (b) Any conflict or ambiguity between the terms and provisions herein and terms and provisions in any other Loan Document shall be controlled by the terms and provisions herein. (c) No course of dealing nor any failure or delay by any Credit Party or any of its Representatives with respect to exercising any Right of any Credit Party hereunder shall operate as a waiver thereof. A waiver must be in writing and signed by Administrative Agent and Required Lenders (or by all Lenders, if required hereunder) to be effective, and such waiver will be effective only in the specific instance and for the specific purpose for which it is given. 13.12 MULTIPLE COUNTERPARTS. This Agreement may be executed in a number of identical counterparts, each of which shall be deemed an original for all purposes and all of which constitute, CREDIT AGREEMENT 53 collectively, one agreement; but, in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart. It is not necessary that each Lender execute the same counterpart so long as identical counterparts are executed by Borrower, each Lender, and Administrative Agent. This Agreement shall become effective when counterparts hereof shall have been executed and delivered to Administrative Agent by each Lender, Administrative Agent, and Borrower, or, when Administrative Agent shall have received telecopied, telexed, or other evidence satisfactory to it that such party has executed and is delivering to Administrative Agent a counterpart hereof. 13.13 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender 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 SECTION 13.13(B), (ii) by way of participation in accordance with the provisions of SECTION 13.13(d), or (iii) by way of pledge or assignment of a security interest subject to the restrictions of SECTION 13.13(f). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in SECTION 13.13(d) and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement. (b) 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 outstanding Borrowings at the time owing to it); provided that: (i) except in the case of an assignment of the entire remaining amount of the assigning Lender's Commitment and outstanding Borrowings at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund (as defined in SECTION 13.13(g)) with respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Borrowings outstanding thereunder) subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to Administrative Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 or a whole multiple of $500,000 in excess thereof, and after such assignment, no Lender shall hold a Commitment of less than $5,000,000 unless each of Administrative Agent and, so long as no Event of Default has occurred and is continuing, Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); (ii) 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 Borrowings or the Commitment assigned; (iii) any assignment of a Commitment must be approved by Administrative Agent (which approval shall not be unreasonably withheld) unless the Person that is the proposed assignee is itself a Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee); and (iv) the parties to each assignment shall execute and deliver to Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500. Subject to acceptance and recording thereof by Administrative Agent pursuant to SECTION 13.13(c), from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, 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 and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption 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 to the benefits of CREDIT AGREEMENT 54 SECTIONS 4.1, 4.5, and 4.6 (with respect to facts and circumstances occurring prior to the effective date of such assignment) and 11.10). Upon request, Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection 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 SECTION 13.13(d). (c) Administrative Agent, acting solely for this purpose as an agent of Borrower, shall maintain at Administrative Agent's office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of Lenders, and the Commitments of, and principal amounts of the Borrowings owing to, each Lender pursuant to the terms hereof from time to time (the "REGISTER"). The entries in the Register shall be conclusive in the absence of manifest error, and Borrower, Administrative Agent, and Lenders may treat each 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 the contrary. The Register shall be available for inspection by Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice. (d) Any Lender may at any time, without the consent of, or notice to, Borrower or Administrative Agent, sell participations to any Person (other than a natural person or Borrower or any of Borrower's Affiliates or Subsidiaries) (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 its Commitment and/or Borrowings 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, and (iii) Borrower, Administrative Agent, and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification, or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to SECTION 13.11(a) that directly affects such Participant. Subject to SECTION 13.13(e), Borrower agrees that each Participant shall be entitled to the benefits of SECTIONS 4.1, 4.5, and 4.6 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to SECTION 13.13(b). (e) A Participant shall not be entitled to receive any greater payment under SECTIONS 4.1 or 4.5 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 Borrower's prior written consent. A Participant that would be a Lender that is not a "United States person" within the meaning of Section 7701(a)(30) of the Tax Code, if it were a Lender shall not be entitled to the benefits of SECTION 4.6 unless Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of Borrower, to comply with SECTION 4.6 as though it were a Lender. (f) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. (g) As used herein, the following terms have the following meanings: CREDIT AGREEMENT 55 APPROVED FUND means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate of an entity that administers or manages a Lender. ELIGIBLE ASSIGNEE means: (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) Administrative Agent, and (ii) unless an Event of Default has occurred and is continuing, Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, "Eligible Assignee" shall not include Borrower or any of Borrower's Affiliates or Subsidiaries. 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 and similar extensions of credit in the ordinary course of its business. (h) Notwithstanding anything to the contrary contained herein, any Lender that is a Fund may create a security interest in all or any portion of the Borrowings owing to it and the Note, 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 SECTION 13.13, (i) no such pledge shall release the pledging Lender from any of its obligations under the Loan Documents and (ii) such trustee shall not be entitled to exercise any of the rights of a Lender under the Loan Documents even though such trustee may have acquired ownership rights with respect to the pledged interest through foreclosure or otherwise. 13.14 DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN CIRCUMSTANCES. The obligations of Borrower under the Loan Documents shall remain in full force and effect until termination of the Total Commitment and payment in full of the Principal Debt and of all interest, fees, and other amounts of the Obligation then due and owing, except that SECTIONS 4, 11, and 13, and any other provisions under the Loan Documents expressly intended to survive by the terms hereof or by the terms of the applicable Loan Documents, shall survive such termination. If at any time any payment of the principal of or interest on any Note or any other amount payable by Borrower under any Loan Document is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy, or reorganization of any Company or otherwise, then the obligations of Borrower under the Loan Documents with respect to such payment shall be reinstated as though such payment had been due but not made at such time. 13.15 LIMITED WAIVER.Each of the Lenders hereunder that is a Lender under the Existing Credit Agreement hereby waives the requirement set forth in Section 2.4 of the Existing Credit Agreement that Borrower provide ten (10) Business Days prior notice of the termination of the commitments thereunder. The waiver set forth herein is limited as provided herein and shall not be deemed to be a waiver or consent to any deviation from the terms of this Agreement or the other Loan Documents. 13.16 CONFIDENTIALITY.Each of Administrative Agent and Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees, and agents, including accountants, legal counsel, and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority (including any self-regulatory authority, such as the 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 CREDIT AGREEMENT 56 proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this SECTION 13.15, to (i) any assignee of or Participant in, or any prospective assignee 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 Borrower and its obligations, (g) with the consent of Borrower, or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this SECTION 13.15 or (y) becomes available to Administrative Agent or any Lender on a nonconfidential basis from a source other than Borrower. For purposes of this Section, "INFORMATION" means all information received from any Company relating to any Company or any of their respective businesses, other than any such information that is available to Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by any Company, provided that, in the case of information received from a Company after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this SECTION 13.15 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Notwithstanding anything herein to the contrary, "INFORMATION" shall not include, and each party hereto may disclose without limitation of any kind, any information with respect to the "tax treatment" and "tax structure" (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure; provided that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transaction as well as other information, this sentence shall only apply to such portions of the document or similar item that relate to the tax treatment or tax structure of the Borrowings, and transactions contemplated hereby. [REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGES FOLLOW.] CREDIT AGREEMENT 57 EXECUTED as of the first date written above. CENTEX CORPORATION, as Borrower By: -s- Vicki A. Roberts ----------------------------------------- Vicki A. Roberts Vice President and Treasurer SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT BANK OF AMERICA, N.A., as Administrative Agent and as a Lender By: -s- Mark Lariviere ------------------------------------------ Mark Lariviere Managing Director SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT JPMORGAN CHASE BANK, as a Lender By: -s- David L. Howard ------------------------------------------ David L. Howard Vice President SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT THE ROYAL BANK OF SCOTLAND PLC, as a Lender By: /s/ David Apps ------------------------------------------ David Apps Senior Vice President SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT CITICORP NORTH AMERICA, INC., as a Lender By: -s- Michael Chiopak ------------------------------------------ Michael Chiopak Vice President SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT BANK ONE, NA, as a Lender By: -s- James P. Krcmarik ------------------------------------------ James P. Krcmarik Associate Director SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT BNP PARIBAS, as a Lender By: -s- Jeff Tebeaux ------------------------------------------ Jeff Tebeaux Vice President By: -s- Henry F. Setina ------------------------------------------ Henry F. Setina Director SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT CREDIT LYONNAIS NEW YORK BRANCH, as a Lender By: -s- Attila Koc ------------------------------------------ Attila Koc Senior Vice President SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT CREDIT SUISSE FIRST BOSTON, ACTING THROUGH ITS CAYMAN ISLANDS BRANCH, as a Lender By: -s- Bill O'Daly ------------------------------------------ Bill O'Daly Director By: Cassandra Droogan ------------------------------------------ Cassandra Droogan Associate SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT SUNTRUST BANK, as a Lender By: -s- W. John Wendler ------------------------------------------ W. John Wendler Director SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT THE BANK OF TOKYO-MITSUBISHI, LTD., as a Lender By: -s- John M. Mearns ------------------------------------------ John M. Mearns Vice President and Manager By: -s- Brenda S. Trader ------------------------------------------ Brenda S. Trader Banking Officer SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT COMERICA BANK, as a Lender By: -s- Casey L. Ostrander ------------------------------------------ Casey L. Ostrander Assistant Vice President SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT WASHINGTON MUTUAL BANK, FA, as a Lender By: -s- Mary Bowman ------------------------------------------ Mary Bowman Senior Vice President SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT LLOYDS TSB BANK, PLC, as a Lender By: -s- Windsor R. Davies ------------------------------------------ Windsor R. Davies Director, Corporate Banking, USA D061 By: -s- [ILLEGIBLE] ------------------------------------------ [ILLEGIBLE] Vice President, Corporate Banking, USA [ILLEGIBLE] SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT PNC BANK, NATIONAL ASSOCIATION, as a Lender By: -s- Douglas G. Paul ------------------------------------------ Douglas G. Paul Senior Vice President SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT BANCA DI ROMA - CHICAGO BRANCH, as a Lender By: -s- Joyce Montgomery ------------------------------------------ Joyce Montgomery Vice President By: -s- Aurora Pensa ------------------------------------------ Aurora Pensa Vice President SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT UBS AG, CAYMAN ISLANDS BRANCH, as a Lender By: -s- Patricia O'Kicki ------------------------------------------ Patricia O'Kicki Director By: -s- Wilfred V. Saint ------------------------------------------ Wilfred V. Saint Associate Director Banking Products Services, US SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT THE NORTHERN TRUST COMPANY, as a Lender By: -s- Paul H. Theiss ------------------------------------------ Paul H. Theiss Vice President SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT US BANK NATIONAL ASSOCIATION, as a Lender By: -s- Joseph L. Sooter, Jr. ------------------------------------------ Joseph L. Sooter, Jr. Vice President SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT EXHIBIT A FORM OF REVOLVING NOTE $_______________ August 7, 2003 FOR VALUE RECEIVED, the undersigned, CENTEX CORPORATION, a Nevada corporation ("BORROWER"), hereby promises to pay to the order of _______________________ ("LENDER"), at the offices of BANK OF AMERICA, N.A., as Administrative Agent for Lender and others as hereinafter described, on the Termination Date, the lesser of (i) _____________________________________ ($____________) and (ii) the aggregate Principal Debt disbursed by Lender to Borrower and outstanding and unpaid on the Termination Date (together with accrued and unpaid interest thereon). This note has been executed and delivered under, and is subject to the terms of, the Credit Agreement, dated as of August 7, 2003 (as amended, modified, supplemented, or restated from time to time, the "AGREEMENT"), among Borrower, Lender and other lenders named therein, and Agents, and is one of the "Notes" referred to therein. Unless defined herein, capitalized terms used herein that are defined in the Agreement have the meaning given to such terms in the Agreement. Reference is made to the Agreement for provisions affecting this note regarding applicable interest rates, principal and interest payment dates, final maturity, voluntary and mandatory prepayments, acceleration of maturity, exercise of Rights, payment of attorneys' fees, court costs and other costs of collection, certain waivers by Borrower and others now or hereafter obligated for payment of any sums due hereunder and security for the payment hereof. Without limiting the immediately preceding sentence, reference is made to SECTION 3.8 of the Agreement for usury savings provisions. THE LAWS OF THE STATE OF TEXAS AND OF THE UNITED STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF BORROWER AND LENDER AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION HEREOF. CENTEX CORPORATION By __________________________________________ Name: ___________________________________ Title: ___________________________________ CENTEX EXHIBITS AND SCHEDULES 1 EXHIBIT B FORM OF COMPLIANCE CERTIFICATE (Centex Corporation) DATE: ______________, _____ SUBJECT PERIOD: ________ended ________________, ______ ADMINISTRATIVE AGENT: Bank of America, N.A. BORROWER: Centex Corporation This certificate is delivered under the Credit Agreement, dated as of August 7, 2003 (as amended, modified, supplemented, or restated from time to time, the "CREDIT AGREEMENT"), among Borrower, Administrative Agent, and other Agents and Lenders party thereto. Capitalized terms used herein and not otherwise defined herein shall have the meaning given to such terms in the Credit Agreement. The undersigned certifies to Lenders that: (a) the undersigned is a Responsible Officer of Borrower in the position(s) set forth under the signature below; (b) the Financial Statements of the Companies attached to this certificate were prepared in accordance with GAAP, and present fairly in all material respects the consolidated financial condition and results of operations of the Companies as of, and for the [three, six, or nine months, or fiscal year] ended on, ____________, _____ (the "SUBJECT PERIOD") [(subject only to normal year-end audit adjustments)]; (c) a review of the activities of the Companies during the Subject Period has been made under my supervision with a view to determining whether, during the Subject Period, the Companies have kept, observed, performed, and fulfilled all of their respective obligations under the Loan Documents, and during the Subject Period, (i) the Companies kept, observed, performed, and fulfilled each and every covenant and condition of the Loan Documents (except for the deviations, if any, set forth on ANNEX A to this certificate) in all material respects, and (ii) no Event of Default (nor any Potential Default) has occurred which has not been cured or waived (except the Events of Default or Potential Defaults, if any, described on ANNEX A to this certificate); (d) the status of compliance by Borrower with SECTION 9.12(a), (b), and (c) of the Credit Agreement at the end of the Subject Period is as set forth on ANNEX B to this certificate; and (e) during the Subject Period, each Schedule to each Loan Document that was required to be revised and supplied to Administrative Agent in accordance with the terms of the Loan Documents has been so revised and supplied. CENTEX EXHIBITS AND SCHEDULES 2 [Signature of Responsible Officer of Borrower] By: __________________________________________ Name: ___________________________________ Title: ___________________________________ CENTEX EXHIBITS AND SCHEDULES 3 ANNEX A TO COMPLIANCE CERTIFICATE DEVIATIONS FROM LOAN DOCUMENTS/ DEFAULTS OR POTENTIAL DEFAULTS (If none, so state.) CENTEX EXHIBITS AND SCHEDULES 4 ANNEX B TO COMPLIANCE CERTIFICATE (Centex Corporation) Status of Compliance with SECTION 9.12(a), (b) and (c) of the Credit Agreement (1) Borrower shall provide to Administrative Agent (for the benefit of Lenders) detailed calculations, in form and substance reasonably acceptable to Administrative Agent, demonstrating compliance with the following covenants: SECTION 9.3 INDEBTEDNESS OF RESTRICTED SUBSIDIARIES SECTION 9.12(a) LEVERAGE RATIO SECTION 9.12(b) INTEREST COVERAGE SECTION 9.12(c) MINIMUM TANGIBLE NET WORTH (1) All as more particularly determined in accordance with the terms of the Credit Agreement, which control in the event of conflicts with this form. CENTEX EXHIBITS AND SCHEDULES 5 EXHIBIT C-1 FORM OF NOTICE OF BORROWING _________________, ____ Bank of America, N.A. as Administrative Agent for the Lenders as defined in the Credit Agreement referred to below 901 Main Street, 14th Floor Dallas, Texas 75202 Attn: Taelitha Harris Phone: 214.209.3645 Fax: 214.290.9644 Reference is made to the Credit Agreement, dated as of August 7, 2003 (as amended, modified, supplemented, or restated from time to time, "AGREEMENT"), among the undersigned, the Lenders named therein, and Agents. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement. The undersigned hereby gives you notice pursuant to the Agreement that it requests a Borrowing under the Agreement, and in that connection sets forth below the terms on which such Borrowing is requested to be made: (A) Date of Borrowing* (A) ________________ (B) Amount of Borrowing** (B) ________________ (C) Type of Borrowing*** (C) ________________ (D) For a Eurodollar Borrowing, the Interest Period and the last day thereof**** (D) ________________ On the date the rate is set, please confirm the interest rate below and return by facsimile transmission to ___________________. Borrower hereby certifies that the following statements are true and correct on the date hereof, and will be true and correct on the Borrowing Date specified herein after giving effect to such Borrowing: (a) this Borrowing will not cause the Total Principal Debt to exceed the Total Commitment; (b) all of the representations and warranties of Borrower set forth in the Loan Documents (excluding the representations and warranties which speak to a specific date or are based on facts which have changed by transactions expressly contemplated or permitted by the Agreement) are true and correct in all material respects; CENTEX EXHIBITS AND SCHEDULES 6 (c) no Event of Default or Potential Default has occurred and is continuing; and (d) the funding of such Borrowing is permitted by all applicable Legal Requirements. Very truly yours, CENTEX CORPORATION By __________________________________________ Name: ___________________________________ Title: ___________________________________ Facility Rate: _____________________ Confirmed by: ______________________________ * Must be a Business Day occurring prior to the Termination Date and be at least (i) three (3) Business Days following receipt by Administrative Agent of this Notice of Borrowing for any Eurodollar Borrowing, and (ii) one (1) Business Day following receipt by Administrative Agent of this Notice of Borrowing for any Prime Rate Borrowing. ** Not less than $5,000,000 or a greater integral multiple of $1,000,000 (whether a Prime Rate Borrowing or a Eurodollar Borrowing). *** Eurodollar Borrowing or Prime Rate Borrowing. **** Eurodollar Borrowing -- 1, 2, 3, or 6 months. In no event may the Interest Period end after the Termination Date. CENTEX EXHIBITS AND SCHEDULES 7 EXHIBIT C-2 FORM OF NOTICE OF CONVERSION/CONTINUATION ______________ __, ____ Bank of America, N.A. as Administrative Agent for the Lenders as defined in the Credit Agreement referred to below 901 Main Street, 14th Floor Dallas, Texas 75202 Attn: Taelitha Harris Phone: 214.209.3645 Fax: 214.290.9644 Reference is made to (i) the Credit Agreement, dated as of August 7, 2003 (as amended, modified, supplemented, or restated from time to time, "AGREEMENT"), among the undersigned, the Lenders named therein, and Agents. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement. The undersigned hereby gives you notice pursuant to SECTION 3.10 of the Agreement that it elects to Convert a Borrowing from one Type to another Type or elects to Continue a Borrowing and select a new Interest Period for a Eurodollar Borrowing, and in that connection, sets forth below the terms on which such Conversion or Continuation is requested to be made: (A) Date of Borrowing* (A) __________ (B) Amount of Borrowing** (B) __________ (C) Type of Borrowing*** (C) __________ (D) For Conversion to, or Continuation of, a Eurodollar Borrowing, the Interest Period and the last day (D) __________ thereof**** On the date the rate is set, please confirm the interest rate below and return by facsimile transmission to ___________________. Very truly yours, CENTEX CORPORATION By _______________________________________ Name:__________________________________ Title:_________________________________ Facility Rate:_______________ Confirmed by:____________________ CENTEX EXHIBITS AND SCHEDULES 8 * Must be a Business Day at least (i) three (3) Business Days following receipt by Administrative Agent of this Notice of Conversion/Continuation for a Conversion from a Prime Rate Borrowing to a Eurodollar Borrowing or a Continuation of a Eurodollar Borrowing for an additional Interest Period, and (ii) one (1) Business Day following receipt by Administrative Agent of this Notice of Conversion/Continuation for a Conversion from a Eurodollar Borrowing to a Prime Rate Borrowing. ** Not less than $5,000,000 or a greater integral multiple of $1,000,000 (if a Prime Rate Borrowing); not less than $5,000,000 or a greater integral multiple of $1,000,000 (if a Eurodollar Borrowing). *** Eurodollar Borrowing or Prime Rate Borrowing. **** Eurodollar Borrowing -- 1, 2, 3, or 6 months. In no event may the Interest Period end after the Termination Date. CENTEX EXHIBITS AND SCHEDULES 9 EXHIBIT C-3 FORM OF NOTICE OF PREPAYMENT ______________ __, ____ Bank of America, N.A. as Administrative Agent for the Lenders as defined in the Credit Agreement referred to below 901 Main Street, 14th Floor Dallas, Texas 75202 Attn: Taelitha Harris Phone: 214.209.3645 Fax: 214.290.9644 Reference is made to the Credit Agreement, dated as of August 7, 2003 (as amended, modified, supplemented, or restated from time to time, "AGREEMENT"), among the undersigned, the Lenders named therein, and Agents. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement. The undersigned hereby gives you notice pursuant to the Agreement that it plans to make a prepayment of a Borrowing under the Agreement, and in that connection sets forth below the terms on which such prepayment will be made: (A) Prepayment date* (A) __________ (B) Amount of prepayment** (B) __________ (C) Type of Borrowing to be prepaid*** (C) __________ (D) For a Eurodollar Borrowing, the Interest Period and the last day thereof for the prepayment to be (D) __________ applied**** Very truly yours, CENTEX CORPORATION By ________________________________________ Name:___________________________________ Title:__________________________________ CENTEX EXHIBITS AND SCHEDULES 10 * Must be a Business Day occurring on or prior to the Termination Date and be at least (i) three (3) Business Days following receipt by Administrative Agent of this Notice of Prepayment for any Eurodollar Borrowing, and (ii) one (1) Business Day following receipt by Administrative Agent of this Notice of Prepayment for any Prime Rate Borrowing. ** Not less than $5,000,000 or a greater integral multiple of $1,000,000 (whether a Prime Rate Borrowing or a Eurodollar Borrowing). *** Eurodollar Borrowing or Prime Rate Borrowing. **** Eurodollar Borrowing -- 1, 2, 3, or 6 months. CENTEX EXHIBITS AND SCHEDULES 11 EXHIBIT D FORM OF OPINION OF COUNSEL The opinion delivered by counsel to Borrower must be in form and substance acceptable to Administrative Agent and its special counsel and cover the following matters: 1. Borrower is duly incorporated, validly existing, and in good standing under the Legal Requirements of the State of Nevada. 2. Borrower is duly qualified to transact business and is in good standing as a foreign corporation in the State of Texas and in each other jurisdiction where, to the best of that counsel's knowledge, the nature and extent of Borrower's business and properties require due qualification and good standing. 3. Borrower possesses all requisite corporate power and authority to conduct its business as is now being, or is contemplated by the Credit Agreement to be, conducted. 4. The execution and delivery by Borrower of each Loan Document to which it is a party and the performance by it of its obligations thereunder, (a) are within its corporate power, (b) have been duly authorized by all necessary corporate action on its behalf, (c) except for any action or filing that has been taken or made on or before the date of this opinion, and the filing of the Loan Documents with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, require no action by or filing with any Governmental Authority, (d) do not violate any provision of its Constituent Documents, (e) do not to the best knowledge of counsel after reasonable inquiry violate any Legal Requirement applicable to it or, to the best knowledge of counsel after reasonable inquiry, any material agreements to which it is a party and of which counsel is aware, and (f) do not result in the creation or imposition of any Lien on any asset of Borrower pursuant to a material agreement of Borrower of which counsel is aware. 5. Upon execution and delivery by all parties to it, each Loan Document will constitute a legal and binding obligation of Borrower, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable Debtor Relief Laws and general principles of equity. 6. To the best knowledge of counsel after reasonable inquiry, (a) no Company is subject to, or aware of the threat of, any Litigation that is reasonably likely to be determined adversely to it and, if so adversely determined, would be a Material Adverse Event, and (b) no outstanding or unpaid judgments against any Company exist that could be a Material Adverse Event. CENTEX EXHIBITS AND SCHEDULES 12 EXHIBIT E FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption (this "ASSIGNMENT AND ASSUMPTION") is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] ("ASSIGNOR") and [Insert name of Assignee] ("ASSIGNEE"). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (the "CREDIT AGREEMENT"), receipt of a copy of which is hereby acknowledged by Assignee. The Standard Terms and Conditions set forth in ANNEX 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full. For an agreed consideration, Assignor hereby irrevocably sells and assigns to Assignee, and Assignee hereby irrevocably purchases and assumes from Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement (including Section 13.13(b) thereof), as of the Effective Date inserted by Administrative Agent as contemplated below (i) all of Assignor's rights and obligations as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of Assignor under the respective facilities identified below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action, and any other right of Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto, or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims, and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to CLAUSE (i) above (the rights and obligations sold and assigned pursuant to CLAUSES (i) and (ii) above being referred to herein collectively as, the "ASSIGNED INTEREST"). Such sale and assignment is without recourse to Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by Assignor. 1. Assignor:______________________________ 2. Assignee:______________________________ [and is an Affiliate/Approved Fund of [identify Lender]1] 3. Borrower: Centex Corporation, a Nevada corporation 4. Administrative Agent: Bank of America, N.A., as the administrative agent under the Credit Agreement 5. Credit Agreement: The Credit Agreement, dated as of August 7, 2003, among Centex Corporation, the Lenders parties thereto, Bank of America, N.A., as Administrative Agent - ----------------------- 1 Select as applicable. CENTEX EXHIBITS AND SCHEDULES 13 6. Assigned Interest:

Total Amount of Percentage Commitment/Borrowings Commitment/Borrowings Assigned of Facility Assigned for all Lenders* Assigned* Commitment/Borrowings2 - ----------------- --------------------- --------------------- ---------------------- _________________ $____________________ $____________________ ______________________% _________________ $____________________ $____________________ ______________________% _________________ $____________________ $____________________ ______________________%

[7. Trade Date: __________________]3 Effective Date: __________________, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.] The terms set forth in this Assignment and Assumption are hereby agreed to: ASSIGNOR [NAME OF ASSIGNOR] By: _____________________________ Title: ASSIGNEE [NAME OF ASSIGNEE] By: _____________________________ Title: Consented to and Accepted: BANK OF AMERICA, N.A., as Administrative Agent By: _________________________________ Title: Consented to and Accepted: By: _________________________________ Title:] - ---------- * Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date. 2 Set forth, to at least 9 decimals, as a percentage of the Commitment/Borrowings of all Lenders thereunder. 3 To be completed if Assignor and Assignee intend that the minimum assignment amount is to be determined as of the Trade Date. CENTEX EXHIBITS AND SCHEDULES 14 ANNEX 1 TO ASSIGNMENT AND ASSUMPTION STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION 1. Representations and Warranties. 1.1. Assignor. Assignor: (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance, or other adverse claim, and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties, or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency, or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates, or any other Person of any of their respective obligations under any Loan Document. 1.2. Assignee. Assignee: (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to SECTION 8.3 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on Administrative Agent or any other Lender, and (v) if it is a Lender that is not a "United States person" within the meaning of Section 7701(a)(30) of the Tax Code, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by Assignee; and (b) agrees that (i) it will, independently and without reliance on Administrative Agent, Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender. 2. Payments. From and after the Effective Date, Administrative Agent shall make all payments in respect of the Assigned interest (including payments of principal, interest, fees and other amounts) to Assignee whether such amounts have accrued prior to or on or after the Effective Date. The Assignor and Assignee shall make all appropriate adjustments in payments by Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves. 3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one CENTEX EXHIBITS AND SCHEDULES 15 instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of Texas. CENTEX EXHIBITS AND SCHEDULES 16 SCHEDULE 2.1 LENDERS AND COMMITMENTS; ADDRESSES FOR NOTICE

PRO RATA NAME AND ADDRESS OF LENDERS COMMITMENT PART Bank of America, N.A. $ 95,000,000 11.87500% Attn: Bryce Langen NC1-007-15-06 100 N. Tryon Street Charlotte, NC 28255 Phone: 704.387.5104 Fax: 704.386.0255 [With a copy to: Bank of America, N.A. Attn: Agency Management 901 Main Street, 14th Floor Dallas, TX 75202 Phone: 214.209.4109 Fax: 214-290-9448] JPMorgan Chase Bank $ 90,000,000 11.25000% Attn: David L. Howard 2200 Ross Avenue, Third Floor Dallas, TX 75201 Phone: 214.965.4756 Fax: 214.965.2044 The Royal Bank of Scotland plc Attn: Dave Apps $ 90,000,000 11.25000% 101 Park Avenue New York, NY 10178 Phone: 212.401.3745 Fax: 212.401.3456

CENTEX EXHIBITS AND SCHEDULES 17

PRO RATA NAME AND ADDRESS OF LENDERS COMMITMENT PART Citicorp North America, Inc. $ 85,000,000 10.62500% Attn: Michael Chlopak 390 Greenwich Street, 1st Floor New York, NY 10013 Phone: 212.723.5899 Fax: 212.723.8547 Bank One, NA $ 50,000,000 6.25000% Attn: F. Patt Schiewitz 1 Bank One Plaza, Suite IL1-0315 Chicago, IL 60670 Phone: 312.732.1148 Fax: 312.732.5939 BNP Paribas $ 50,000,000 6.25000% Attn: Jeff Tebeaux 12201 Merit Drive, Suite 860 Dallas, TX 75251 Phone: 214.953.9737 Fax: 972.788.9140 Credit Lyonnais New York Branch $ 50,000,000 6.25000% Attn: Robert Smith 2200 Ross Avenue, Suite 4400 West Dallas, TX 75201 Phone: 214.220.2311 Fax: 214.220.2323 Credit Suisse First Boston, acting through its Cayman $ 50,000,000 6.25000% Islands Branch Attn: William O'Daly Eleven Madison Avenue New York, NY 10010 Phone: 212.325.1986 Fax: 212.743.2254

CENTEX EXHIBITS AND SCHEDULES 18

PRO RATA NAME AND ADDRESS OF LENDERS COMMITMENT PART SunTrust Bank $ 35,000,000 4.37500% Attn: W. John Wendler 8245 Boone Boulevard, Suite 820 Vienna, VA 22181 Phone: 703.902.9041 Fax: 703.902.9245 The Bank of Tokyo-Mitsubishi, Ltd. $ 37,500,000 4.68750% Attn: John Mearns / Brenda Trader 2001 Ross Avenue, Suite 3150 Dallas, TX 75201 Phone: 214.954.1200 ext. 104 / ext. 111 Fax: 214.954.1007 Comerica Bank $ 37,500,000 4.68750% Attn: Casey L. Ostrander 500 Woodward Avenue, 7th Floor MC: 3256 Detroit, MI 48226 Phone: 313.222.5286 Fax: 313.222.9295 Washington Mutual Bank, FA $ 37,500,000 4.68750% Attn: Mary Bowman 5050 Broadway, 1st Floor Oakland, CA 94611 Phone: 510.658.1209 Fax: 510.658.1407 Lloyds TSB Bank plc $ 26,250,000 3.28125% Attn: Windsor Davies 1251 Avenue of the Americas, 39th Floor New York, NY 10020 Phone: 212.930.8909 Fax: 212.930.5098

CENTEX EXHIBITS AND SCHEDULES 19

PRO RATA NAME AND ADDRESS OF LENDERS COMMITMENT PART PNC Bank, National Association $ 26,250,000 3.28125% Attn: Douglas Paul 2 Tower Center, 18th Floor East Brunswick, NJ 08816 Phone: 732.220.3566 Fax: 732.220.3744 Banca di Roma - Chicago Branch $ 15,000,000 1.87500% Attn: Joyce Montgomery 225 West Washington, Suite 1200 Chicago, IL 60606 Phone: 312.704.2648 Fax: 312.726.3058 UBS AG, Cayman Islands Branch $ 10,000,000 1.25000% Attn: [Denise Conzo] 677 Washington Boulevard 6-South Stamford, CT 06901 Phone: 203.719.3853 Fax: 203.719.3888 The Northern Trust Company $ 7,500,000 0.93750% Attn: Paul Theiss 50 South LaSalle Street Chicago, IL 60675 Phone: 312.557.1791 Fax: 312.444.7028 US Bank National Association $ 7,500,000 0.93750% Attn: Joseph Sooter One US Bank Plaza 5L-MO-T12M St. Louis, MO 63101 Phone: 314.418.2462 Fax: 314.418.3859 Totals $ 800,000,000 100.00000%

CENTEX EXHIBITS AND SCHEDULES 20 SCHEDULE 7.3 SUBSIDIARIES

SUBSIDIARY STATE OF OWNERSHIP FORMATION PERCENTAGE CDMC HOLDING, INC. (Nevada) 100% GREAT LAKES DEVELOPMENT CO., INC. (Nevada) 100.00% CROSLAND ACCEPTANCE ASSOCIATES V (North Carolina) 100% CROSLAND BOND COMPANY (North Carolina) 100% GENBOND TWO, INC. (North Carolina) 100% JOHN CROSLAND COMPANY (North Carolina) 100% MORTGAGE ACCEPTANCE ASSOCIATES NO. 2 (North Carolina) 100% MORTGAGE COLLATERAL ASSOCIATES NO. 1 (North Carolina) 100% MORTGAGE COLLATERAL ASSOCIATES NO. 3 (North Carolina) 100% CENTEX CONSTRUCTION PRODUCTS, INC. (Delaware) 65.10% AMERICAN GYPSUM COMPANY (Delaware) 65.10% AMERICAN GYPSUM MARKETING COMPANY (Delaware) 65.10% CCP CEMENT COMPANY (Nevada) 65.10% CCP CONCRETE/AGGREGATES LLC (Delaware) 65.10% CCP GYPSUM COMPANY (Nevada) 65.10% CCP LAND COMPANY (Nevada) 65.10% CENTEX CEMENT CORPORATION (Nevada) 65.10% CENTEX MATERIALS LLC (Delaware) 65.10% CXP FUNDING, LLC (Delaware) 65.10% HOLLIS & EASTERN RAILROAD COMPANY LLC (Delaware) 65.10% M & W DRYWALL SUPPLY COMPANY (Nevada) 65.10% MATHEWS READYMIX LLC (California) 65.10% MOUNTAIN CEMENT COMPANY (Nevada) 65.10% NEVADA CEMENT COMPANY (Nevada) 65.10% REPUBLIC PAPERBOARD COMPANY LLC (Delaware) 65.10% TEXAS CEMENT COMPANY (Nevada) 65.10% TLCC GP LLC (Delaware) 65.10% TLCC LP LLC (Delaware) 65.10% WESTERN AGGREGATES LLC (Nevada) 65.10% WESTERN CEMENT COMPANY OF CALIFORNIA (California) 65.10% A. W. MORTGAGE, L.P. (Texas) 50.01% ADFINET, INC. (Nevada) 100% ADFITECH, INC. (Nevada) 100% AMERICAN LANDMARK MORTGAGE, LTD. (Florida) 50.01% ASHLEY TURNER FINANCE, L.P. (Texas) 50.01% AT-HOME MORTGAGE ASSOCIATES, LTD. (Florida) 50.01% AUSTIN PARTNERS IN LENDING, L.P. (Texas) 50.01% BANYAN FINANCIAL OF CENTRAL FLORIDA, L.P. (Texas) 50.01%

Page 21

SUBSIDIARY STATE OF OWNERSHIP FORMATION PERCENTAGE BENEFIT ASSET MANAGEMENT CORPORATION (California) 100% BUILDER'S HOME MORTGAGE, L.P. (Washington) 50.01% CALIFORNIA HOME MORTGAGE, L.P. (Texas) 50.01% CENTEX EQUITY CORPORATION (Nevada) 100% CENTEX FINANCIAL SERVICES, INC. (Nevada) 100% CENTEX HOME EQUITY COMPANY, LLC (Delaware) 100% CENTEX OFFICE VICEROY I, L.P. (Delaware) 100% CENTEX TECHNOLOGY, INC. (Nevada) 100% CENTEX TITLE & ANCILLARY SERVICES, INC. (Nevada) 100% CENTEX VICEROY GENERAL PARTNER, LLC (Delaware) 100% CHEC ASSET RECEIVABLE CORPORATION (Nevada) 100% CHEC CONDUIT FUNDING, LLC (Delaware) 100% CHEC FUNDING, LLC (Delaware) 100% CHEC INDUSTRIAL LOAN COMPANY (Tennessee) 100% CHEC INDUSTRIAL LOAN CORPORATION (Minnesota) 100% CHEC RESIDUAL, LLC (Delaware) 100% COMMERCE APPRAISAL SERVICES, LLC (Delaware) 100% COMMERCE LAND TITLE AGENCY, LLC (Ohio) 100% COMMERCE LAND TITLE, INC. (Nevada) 100% COMMERCE TITLE COMPANY (California) 100% COMMERCE TITLE COMPANY, INC. (Alabama) 100% COMMERCE TITLE COMPANY OF NEW MEXICO, LLC (Delaware) 100% COMMERCE TITLE INSURANCE COMPANY (California) 100% COMMERCE TITLE VENTURES, LLC (Delaware) 100% CORE MORTGAGE CONNECTION, L.P. (Texas) 50.01% CTX MORTGAGE COMPANY, LLC (Delaware) 100% CTX MORTGAGE FUNDING III, LLC (Delaware) 100% CTX MORTGAGE FUNDING, LLC (Delaware) 100% CTX MORTGAGE VENTURES CORPORATION (Nevada) 100% CTX MORTGAGE VENTURES, LLC (Delaware) 100% CTX SWAP I, LLC (Delaware) 100% DALLAS SUBURBS MORTGAGE, L.P. (Texas) 50% DARDEN FINANCIAL SERVICES, L.P. (Texas) 50.01% DENALI FINANCIAL SERVICES, L.P. (Texas) 50.01% DUNDEE INSURANCE AGENCY, INC. (Texas) 100% EXPRESS FINANCIAL SERVICES, LIMITED PARTNERSHIP (North Carolina) 50.01% FAIRWAY FINANCIAL GROUP, L.P. (Texas) 50.01% FIRST CENTURY MORTGAGE, L.P. (Texas) 50.01% FLORIDA LANDMARK MORTGAGE, L.P. (Texas) 50.01% FOUR OAKS MORTGAGE, L.P. (North Carolina) 50.01% GLG MORTGAGE, L.P. (Texas) 50.01% HARWOOD INSURANCE SERVICES, LLC (California) 100%

Page 22

SUBSIDIARY STATE OF OWNERSHIP FORMATION PERCENTAGE HARWOOD SERVICE COMPANY OF GEORGIA, LLC (Georgia) 100% HARWOOD SERVICE COMPANY OF NEW JERSEY, LLC (New Jersey) 100% HARWOOD SERVICE COMPANY, LLC (Delaware) 100% HARWOOD STREET FUNDING I, LLC (Delaware) * HARWOOD STREET FUNDING II, LLC (Delaware) 100% HEARTLAND MORTGAGE, L.P. (California) 50.01% HOMEFRONTMORTGAGE, L.P. (Washington 50.01% LEWIS MORTGAGE COMPANY, L.P. (Texas) 50.01% LMX FINANCIAL SERVICES, LTD. (Florida) 50.01% METROPOLITAN TAX SERVICE, INC. (Nevada) 100% METROPOLITAN TITLE & GUARANTY COMPANY (Florida) 100% MH ACQUISITION COMPANY, LLC (Delaware) 100% MORTGAGE PORTFOLIO SERVICES, INC. (Delaware) 100% MPS FUNDING CORPORATION (Delaware) 100% NAB ASSET COMPANY, LLC (Texas) 100% NEW HOME MORTGAGE SPECIALISTS, L.P. (Washington) 50.01% OPTIMA INFORMATION SOLUTIONS, LLC (Delaware) 71% PACIFIC AMERICAN MORTGAGE COMPANY (Texas) 100% PENNSTAR FINANCIAL, LLC (Delaware) 50.01% PINE RIDGE FINANCIAL, L.P. (Washington) 50.01% ROBERG FINANCIAL, L.P. (Texas) 50.01% T.W. LEWIS MORTGAGE COMPANY, L.P. (Texas) 50.01% VENTURE TITLE AGENCY, LTD., LLLP (Florida) 50.02% WESTWOOD INSURANCE AGENCY (Nevada) 100% WESTWOOD INSURANCE AGENCY OF ARIZONA, INC. (Arizona) 100% WESTWOOD INSURANCE AGENCY (California) 100% ARMOR INSURANCE COMPANY (Vermont) 100% CENTEX INTERNATIONAL, INC. (Nevada) 100% CENTEX INTERNATIONAL, LLC (Delaware) 98.95% CENTEX LIFE SOLUTIONS, INC. (Nevada) 100% CENTEX MANAGEMENT SERVICES LIMITED (United Kingdom) 98.95% CENTEX SERVICE COMPANY (Nevada) 100% CTX HOLDING COMPANY (Nevada) 100% 21 HOUSING COMPANY, LLC (Delaware) 100% AAA HOLDINGS, INC. (Delaware) 100% ABC HOMES LIMITED (United Kingdom) 50% BARRINGTON CARPET, LLC (Delaware) 100% CENTEX BUILDING SERVICES, INC. (Nevada) 100% CENTEX DEVELOPMENT MANAGEMENT COMPANY (Nevada) 100% CENTEX HOMES (Nevada) 99.95% CENTEX HOMES INTERNATIONAL LIMITED (United Kingdom) 100% CENTEX HOMES MARKETING, INC. (Georgia) 100%

Page 23

SUBSIDIARY STATE OF OWNERSHIP FORMATION PERCENTAGE CENTEX HOMES OF CALIFORNIA II, LLC (Delaware) 99.73% CENTEX HOMES OF CALIFORNIA, LLC (Delaware) 99.73% CENTEX HOMES REALTY COMPANY (Nevada) 100% CENTEX HOMES REALTY, INC. (Michigan) 100% CENTEX HOMES, INC. (Texas) 100% CENTEX HOMES, LLC (Delaware) 99.95% CENTEX LATIN AMERICA, INC. (Nevada) 100% CENTEX LOST CREEK RANCH, LLC (Delaware) 99.95% CENTEX MANUFACTURED HOUSING GROUP, LLC (Delaware) 100% CENTEX REAL ESTATE CONSTRUCTION COMPANY (Nevada) 100% CENTEX REAL ESTATE CORPORATION (Nevada) 100% CENTEX REALTY, INC. (Florida) 100% CITY HOMEBUILDERS, INC. (Texas) 100% COYOTE CANYON, LLC (Delaware) 99.95% CTX BUILDERS SUPPLY SERVICES, LLC (Delaware) 99.95% DESARROLLOS EN LATINOAMERICA SERVICIOS ADMINSTRATIVOS S DE RL DE CV (Mexico) 100% EMPRESAS INMOBILIARIAS DE MEXICO, S. DE R.L. DE C.V. (Mexico) 100% FOX & JACOBS, INC. (Texas) 100% MEADOW VISTA COMPANY, LLC (Delaware) 100% MELROSE PARK JOINT VENTURE (Florida) 53.31% SELECTIVE - DELAWARE, L.L.C. (Delaware) 99.95% ST LENDING, INC. (Delaware) 99.73% SUNSET RANCHOS DEVELOPERS, LLC (Delaware) 99.95% SYCAMORE CREEK (California) 50.00% THE JONES COMPANY BUILDING SERVICES, LLC (Nevada) 99.95% THE JONES COMPANY HOMES, LLC (Nevada) 99.95% THE JONES COMPANY HOMES REALTY, LLC (Nevada) 99.95% WAYNE HOMES, LLC (Delaware) 97.44% WAYNE HOMES MID ATLANTIC, LLC (Delaware) 99.95% CENTEX HOME SERVICES COMPANY (Nevada) 100% CENTEX HOMETEAM LAWN CARE, LLC (Delaware) 100% CENTEX HOMETEAM SECURITY, INC. (Nevada) 100% HOMETEAM PEST DEFENSE, INC. (Nevada) 100% HOMETEAM PEST DEFENSE, LLC (Delaware) 100% BATESON DAILEY, A JOINT VENTURE (Michigan) 65% CENTEX ATLANTIC, LCL (Delaware) 100% CENTEX CONCORD (Tennessee) 50% CENTEX CONCORD PROPERTY MANAGEMENT, L.L.C. (Tennessee) 50% CENTEX CONSTRUCTION COMPANY, INC. (Nevada) 100% CENTEX CONSTRUCTION GROUP, INC. (Nevada) 100% CENTEX CONSTRUCTION GROUP SERVICES, LLC (Delaware) 100%

Page 24

SUBSIDIARY STATE OF OWNERSHIP FORMATION PERCENTAGE CENTEX ENGINEERING & CONSTRUCTION, INC. (Nevada) 100% CENTEX GOLDEN CONSTRUCTION COMPANY (Nevada) 100% CENTEX LANDIS LIMITED LIABILITY COMPANY NO.1 (Louisiana) 100% CENTEX RODGERS, INC. (Nevada) 100% CENTEX ROONEY CONSTRUCTION CO., INC./HUBER, HUNT & NICHOLS, INC., A JOINT VENTURE (Florida) 65% CENTEX ROONEY CONSTRUCTION CO., INC./LANDIS COMPANY, INC. A JOINT VENTURE Louisiana) 70% CENTEX ROONEY CONSTRUCTION CO., INC./RATTLER CONSTRUCTION CONTRACTORS, INC., A JOINT VENTURE (Florida) 75% CENTEX ROONEY CONSTRUCTION COMPANY/ACI, A JOINT VENTURE (Florida) 50% CENTEX ROONEY MARINE, INC. (Florida) 100% CENTEX ROONEY/GRAY CONSTRUCTION, A JOINT VENTURE (Florida) 85% CENTEX ROONEY/HLM CORRECTIONAL DESIGN BUILDERS, LC (Florida) 70% CENTEX ROONEY/KBJ DESIGN/BUILD, L.L.C. (Delaware) 90% CENTEX ROONEY/LLT, A JOINT VENTURE (Florida) 75% CENTEX ROONEY/PGAL DESIGN BUILDERS, L.C. (Florida) 90% CENTEX ROONEY/RS&H DESIGN BUILDERS, L.C. (Florida) 90% CENTEX ROONEY/SCHENKEL SHULTZ DESIGN/BUILDERS, L.C. (Florida) 50% CENTEX SEISMIC SERVICES, INC. (Nevada) 95% CENTEX/F&S, L.L.C. (Delaware) 100% CENTEX/FPC, L.L.C. (Delaware) 100% CENTEX/HKS II, L.L.C. (Delaware) 100% CENTEX/HKS, CANYON, L.L.C. (Delaware) 100% CENTEX/HKS, L.L.C. (Delaware) 100% CENTEX/MASHBURN, A JOINT VENTURE (North Carolina) 65% CENTEX/MORRIS II, L.L.C. (Delaware) 100% CENTEX/MORRIS, L.L.C. (Delaware) 100% CENTEX/OMNIPLAN, L.L.C. (Delaware) 100% CENTEX/OMNIPLAN II, L.L.C. (Delaware) 100% CENTEX/SCHENKEL SHULTZ, L.L.C. (Delaware) 100% +CENTEX/SHG, L.L.C. (Delaware) 100% CENTEX/SICNER, LLC (Delaware) 90% CENTEX/WORTHGROUP, L.L.C. (Delaware) 100% CENTEX-3D/I, A JOINT VENTURE (Texas) 90% CENTEX-AIM CONSTRUCTION, L.L.C. (Michigan) 80% CENTEX-GILFORD, A JOINT VENTURE (Virginia) 79.58% CENTEX-GILFORD, A JOINT VENTURE II (Virginia) 88% CENTEX-ROONEY CONSTRUCTION CO., INC. (Florida) 100% CENTEX-ROONEY CONSTRUCTION CO. OF GEORGIA, LLC (Delaware) 100% CENTEX-ROONEY CONSTRUCTION CO., INC./CONSTRUCT TWO

Page 25

SUBSIDIARY STATE OF OWNERSHIP FORMATION PERCENTAGE CONSTRUCTION MANAGERS, INC., A JOINT VENTURE (Florida) 90% CKC FACILITIES GROUP, L.C. (Florida) 60% GHQ COMPANY, INC. (Nevada) 100% INDEPENDENT GENERAL AGENCY, INC. (Texas) 100% KIRCHMAN/CENTEX, A JOINT VENTURE (Florida) 75% THE STUDENT COMMUNITIES GROUP, L.C. (Florida) 50%

Page 26

STATE OF OWNERSHIP UNRESTRICTED SUBSIDIARY FORMATION PERCENTAGE CDMC HOLDING, INC. (Nevada) 100% GREAT LAKES DEVELOPMENT CO., INC. (Nevada) 100.00% CROSLAND ACCEPTANCE ASSOCIATES V (North Carolina) 100% CROSLAND BOND COMPANY (North Carolina) 100% GENBOND TWO, INC. (North Carolina) 100% JOHN CROSLAND COMPANY (North Carolina) 100% MORTGAGE ACCEPTANCE ASSOCIATES NO. 2 (North Carolina) 100% MORTGAGE COLLATERAL ASSOCIATES NO. 1 (North Carolina) 100% MORTGAGE COLLATERAL ASSOCIATES NO. 3 (North Carolina) 100% CENTEX CONSTRUCTION PRODUCTS, INC. (Delaware) 65.10% AMERICAN GYPSUM COMPANY (Delaware) 65.10% AMERICAN GYPSUM MARKETING COMPANY (Delaware) 65.10% CCP CEMENT COMPANY (Nevada) 65.10% CCP CONCRETE/AGGREGATES LLC (Delaware) 65.10% CCP GYPSUM COMPANY (Nevada) 65.10% CCP LAND COMPANY (Nevada) 65.10% CENTEX CEMENT CORPORATION (Nevada) 65.10% CENTEX MATERIALS LLC (Delaware) 65.10% CXP FUNDING, LLC (Delaware) 65.10% HOLLIS & EASTERN RAILROAD COMPANY LLC (Delaware) 65.10% M & W DRYWALL SUPPLY COMPANY (Nevada) 65.10% MATHEWS READYMIX LLC (California) 65.10% MOUNTAIN CEMENT COMPANY (Nevada) 65.10% NEVADA CEMENT COMPANY (Nevada) 65.10% REPUBLIC PAPERBOARD COMPANY LLC (Delaware) 65.10% TEXAS CEMENT COMPANY (Nevada) 65.10% TLCC GP LLC (Delaware) 65.10% TLCC LP LLC (Delaware) 65.10% WESTERN AGGREGATES LLC (Nevada) 65.10% WESTERN CEMENT COMPANY OF CALIFORNIA (California) 65.10% A. W. MORTGAGE, L.P. (Texas) 50.01% ADFINET, INC. (Nevada) 100% ADFITECH, INC. (Nevada) 100% AMERICAN LANDMARK MORTGAGE, LTD. (Florida) 50.01% ASHLEY TURNER FINANCE, L.P. (Texas) 50.01% AT-HOME MORTGAGE ASSOCIATES, LTD. (Florida) 50.01% AUSTIN PARTNERS IN LENDING, L.P. (Texas) 50.01% BANYAN FINANCIAL OF CENTRAL FLORIDA, L.P. (Texas) 50.01% BENEFIT ASSET MANAGEMENT CORPORATION (California) 100%

CENTEX EXHIBITS AND SCHEDULES 27

STATE OF OWNERSHIP UNRESTRICTED SUBSIDIARY FORMATION PERCENTAGE BUILDER'S HOME MORTGAGE, L.P. (Washington) 50.01% CALIFORNIA HOME MORTGAGE, L.P. (Texas) 50.01% CENTEX EQUITY CORPORATION (Nevada) 100% CENTEX FINANCIAL SERVICES, INC. (Nevada) 100% CENTEX HOME EQUITY COMPANY, LLC (Delaware) 100% CENTEX OFFICE VICEROY I, L.P. (Delaware) 100% CENTEX TECHNOLOGY, INC. (Nevada) 100% CENTEX TITLE & ANCILLARY SERVICES, INC. (Nevada) 100% CENTEX VICEROY GENERAL PARTNER, LLC (Delaware) 100% CHEC ASSET RECEIVABLE CORPORATION (Nevada) 100% CHEC CONDUIT FUNDING, LLC (Delaware) 100% CHEC FUNDING, LLC (Delaware) 100% CHEC INDUSTRIAL LOAN COMPANY (Tennessee) 100% CHEC INDUSTRIAL LOAN CORPORATION (Minnesota) 100% CHEC RESIDUAL, LLC (Delaware) 100% COMMERCE APPRAISAL SERVICES, LLC (Delaware) 100% COMMERCE LAND TITLE AGENCY, LLC (Ohio) 100% COMMERCE LAND TITLE, INC. (Nevada) 100% COMMERCE TITLE COMPANY (California) 100% COMMERCE TITLE COMPANY, INC. (Alabama) 100% COMMERCE TITLE COMPANY OF NEW MEXICO, LLC (Delaware) 100% COMMERCE TITLE INSURANCE COMPANY (California) 100% COMMERCE TITLE VENTURES, LLC Delaware) 100% CORE MORTGAGE CONNECTION, L.P. (Texas) 50.01% CTX MORTGAGE COMPANY, LLC (Delaware) 100% CTX MORTGAGE FUNDING III, LLC (Delaware) 100% CTX MORTGAGE FUNDING, LLC (Delaware) 100% CTX MORTGAGE VENTURES CORPORATION (Nevada) 100% CTX MORTGAGE VENTURES, LLC (Delaware) 100% CTX SWAP I, LLC (Delaware) 100% DALLAS SUBURBS MORTGAGE, L.P. (Texas) 50% DARDEN FINANCIAL SERVICES, L.P. (Texas) 50.01% DENALI FINANCIAL SERVICES, L.P. (Texas) 50.01% DUNDEE INSURANCE AGENCY, INC. (Texas) 100% EXPRESS FINANCIAL SERVICES, LIMITED PARTNERSHIP (North Carolina) 50.01% FAIRWAY FINANCIAL GROUP, L.P. (Texas) 50.01% FIRST CENTURY MORTGAGE, L.P. (Texas) 50.01% FLORIDA LANDMARK MORTGAGE, L.P. (Texas) 50.01% FOUR OAKS MORTGAGE, L.P. (North Carolina) 50.01% GLG MORTGAGE, L.P. (Texas) 50.01%

CENTEX EXHIBITS AND SCHEDULES 28

STATE OF OWNERSHIP UNRESTRICTED SUBSIDIARY FORMATION PERCENTAGE HARWOOD INSURANCE SERVICES, LLC (California) 100% HARWOOD SERVICE COMPANY OF GEORGIA, LLC (Georgia) 100% HARWOOD SERVICE COMPANY OF NEW JERSEY, LLC (New Jersey) 100% HARWOOD SERVICE COMPANY, LLC (Delaware) 100% HARWOOD STREET FUNDING I, LLC (Delaware) * HARWOOD STREET FUNDING II, LLC (Delaware) 100% HEARTLAND MORTGAGE, L.P. (California) 50.01% HOMEFRONTMORTGAGE, L.P. (Washington 50.01% LEWIS MORTGAGE COMPANY, L.P. (Texas) 50.01% LMX FINANCIAL SERVICES, LTD. (Florida) 50.01% METROPOLITAN TAX SERVICE, INC. (Nevada) 100% METROPOLITAN TITLE & GUARANTY COMPANY (Florida) 100% MH ACQUISITION COMPANY, LLC (Delaware) 100% MORTGAGE PORTFOLIO SERVICES, INC. (Delaware) 100% MPS FUNDING CORPORATION (Delaware) 100% NAB ASSET COMPANY, LLC (Texas) 100% NEW HOME MORTGAGE SPECIALISTS, L.P. (Washington) 50.01% OPTIMA INFORMATION SOLUTIONS, LLC (Delaware) 71% PACIFIC AMERICAN MORTGAGE COMPANY (Texas) 100% PENNSTAR FINANCIAL, LLC (Delaware) 50.01% PINE RIDGE FINANCIAL, L.P. (Washington) 50.01% ROBERG FINANCIAL, L.P. (Texas) 50.01% T.W. LEWIS MORTGAGE COMPANY, L.P. (Texas) 50.01% VENTURE TITLE AGENCY, LTD., L.P. (Florida) 50.02% WESTWOOD INSURANCE AGENCY (Nevada) 100% WESTWOOD INSURANCE AGENCY OF ARIZONA, INC. (Arizona) 100% WESTWOOD INSURANCE AGENCY (California) 100%

* Owned 100% by holders of various series of Subordinated Certificates issued by Harwood Street Funding I, LLC. These holders are not affiliated with Centex Corporation. CENTEX EXHIBITS AND SCHEDULES 29 EX-10.1(B) 4 d10298exv10w1xby.htm EX-10.1 AMENDMENT NO. 2 TO PARTNERSHIP AGREEMENT

Exhibit 10.1

AMENDMENT NO. 2
TO
SECOND AMENDED AND RESTATED PARTNERSHIP AGREEMENT
OF
CENTEX DEVELOPMENT COMPANY, L.P.

     This AMENDMENT NO. 2 to SECOND AMENDED AND RESTATED PARTNERSHIP AGREEMENT OF CENTEX DEVELOPMENT COMPANY, L.P. (the “Amendment”) is made as of this 10th day of November 2003, but effective for all purposes as of February 24, 1998, by and between 3333 Development Corporation, a Nevada corporation, as the General Partner (“Development”), and Centex Homes, a Nevada general partnership, as the Limited Partner (“Centex”).

     WHEREAS, Development and Centex entered into that certain Amended and Restated Partnership Agreement of Centex Development Company, L.P. (the “Partnership Agreement”) as of the 24th day of February, 1998 with respect to Centex Development Company, L.P., a Delaware limited partnership (the “Partnership”);

     WHEREAS, as of the date hereof, Development is the sole general partner of the Partnership and Centex owns all of the issued and outstanding limited partnership interest of the Partnership and is the sole limited partner of the Partnership; and

     WHEREAS, Development and Centex are mutually desirous of amending the Partnership Agreement pursuant to the terms of this Amendment;

     NOW, THEREFORE, for and in consideration of the premises set forth above and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the parties hereto, Development and Centex hereby agree as follows:

     1. Pursuant to, and in accordance with, Article XV of the Partnership Agreement, the first sentence of Section 13.1(b) of the Partnership Agreement is hereby deleted in its entirety and replaced with the following:

“After Detachment, the General Partner may be removed only upon the affirmative votes of owners of at least 80% of the Voting Percentage Interests of the Limited Partners; prior to Detachment, the General Partner may not be removed by the Limited Partners.”

     2. Except as expressly amended and modified by this Amendment, the Partnership Agreement shall remain in full force and effect.

     IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first written above.

GENERAL PARTNER:
3333 DEVELOPMENT CORPORATION, a Nevada corporation
By:	/s/ Stephen M. Weinberg
	Stephen M. Weinberg
	President and Chief Executive Officer
LIMITED PARTNER:
CENTEX HOMES, a Nevada general partnership
By:	Centex Real Estate Corporation,
	a Nevada corporation,
	Managing Partner
	By:	/s/ Raymond G. Smerge
		Raymond G. Smerge
		Vice President and Secretary

2 EX-10.2 5 d10298exv10w2.txt EX-10.2 LETTER OF CREDIT & REIMBURSEMENT AGREEMENT EXHIBIT 10.2 LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT among CENTEX CORPORATION, Borrower BANK OF AMERICA, N.A., Administrative Agent and THE LENDERS NAMED HEREIN, Lenders $250,000,000 DATED AS OF AUGUST 7, 2003 BANK ONE, NA, Syndication Agent BANC OF AMERICA SECURITIES LLC, Sole Lead Arranger and Sole Book Manager TABLE OF CONTENTS

Page SECTION 1 DEFINITIONS AND TERMS.............................................................. 1 1.1 DEFINITIONS................................................................ 1 1.2 NUMBER AND GENDER OF WORDS; OTHER REFERENCES............................... 15 1.3 ACCOUNTING PRINCIPLES...................................................... 15 1.4 TIME REFERENCES............................................................ 15 SECTION 2 CREDIT EXTENSION PROVISIONS........................................................ 15 2.1 LETTERS OF CREDIT.......................................................... 15 2.2 LENDERS; INCREASE IN TOTAL COMMITMENT...................................... 23 2.3 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS.......................... 24 SECTION 3 TERMS OF PAYMENT................................................................... 24 3.1 NOTES AND PAYMENTS......................................................... 24 3.2 MANDATORY PAYMENTS......................................................... 25 3.3 DEFAULT RATE............................................................... 25 3.4 INTEREST RECAPTURE......................................................... 25 3.5 INTEREST CALCULATIONS...................................................... 26 3.6 MAXIMUM RATE............................................................... 26 3.7 ORDER OF APPLICATION....................................................... 26 3.8 RIGHT OF SET-OFF; ADJUSTMENTS.............................................. 27 3.9 BOOKING BORROWINGS......................................................... 27 SECTION 4 CHANGE IN CIRCUMSTANCES............................................................ 28 4.1 INCREASED COST AND REDUCED RETURN.......................................... 28 4.2 LIMITATION ON TYPES OF BORROWINGS.......................................... 29 4.3 ILLEGALITY................................................................. 29 4.4 TREATMENT OF AFFECTED LOANS................................................ 29 4.5 COMPENSATION............................................................... 30 4.6 TAXES...................................................................... 30

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT i SECTION 5 FEES............................................................................... 32 5.1 TREATMENT OF FEES.......................................................... 32 5.2 FEES OF ADMINISTRATIVE AGENT............................................... 32 5.3 LETTER OF CREDIT FEES...................................................... 32 5.4 FRONTING FEE AND DOCUMENTARY AND PROCESSING CHARGES PAYABLE TO L/C ISSUER.. 32 5.5 UNUSED FEE................................................................. 32 SECTION 6 CONDITIONS PRECEDENT............................................................... 33 6.1 CONDITIONS PRECEDENT TO CLOSING............................................ 33 6.2 CONDITIONS TO ALL CREDIT EXTENSIONS........................................ 33 SECTION 7 REPRESENTATIONS AND WARRANTIES..................................................... 34 7.1 PURPOSE OF LETTER OF CREDIT FACILITY....................................... 34 7.2 EXISTENCE, GOOD STANDING, AUTHORITY, AND AUTHORIZATIONS.................... 35 7.3 SUBSIDIARIES; CAPITAL STOCK................................................ 35 7.4 AUTHORIZATION AND CONTRAVENTION............................................ 35 7.5 BINDING EFFECT............................................................. 35 7.6 FINANCIAL STATEMENTS....................................................... 35 7.7 LITIGATION, CLAIMS, INVESTIGATIONS......................................... 36 7.8 TAXES...................................................................... 36 7.9 ENVIRONMENTAL MATTERS...................................................... 36 7.10 EMPLOYEE BENEFIT PLANS..................................................... 36 7.11 PROPERTIES; LIENS.......................................................... 37 7.12 GOVERNMENT REGULATIONS..................................................... 37 7.13 TRANSACTIONS WITH AFFILIATES............................................... 37 7.14 NO DEFAULT................................................................. 37 7.15 SOLVENCY................................................................... 37 7.16 COMPLIANCE WITH LEGAL REQUIREMENTS......................................... 37 7.17 FULL DISCLOSURE............................................................ 37 7.18 SENIOR DEBT................................................................ 37 7.19 TAX SHELTER REGULATIONS.................................................... 37 SECTION 8 AFFIRMATIVE COVENANTS.............................................................. 38 LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT ii 8.1 USE OF PROCEEDS............................................................ 38 8.2 BOOKS AND RECORDS.......................................................... 38 8.3 ITEMS TO BE FURNISHED...................................................... 38 8.4 INSPECTIONS................................................................ 40 8.5 TAXES...................................................................... 40 8.6 PAYMENT OF OBLIGATIONS..................................................... 40 8.7 MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS............................. 40 8.8 INSURANCE.................................................................. 40 8.9 PRESERVATION AND PROTECTION OF RIGHTS...................................... 41 8.10 ENVIRONMENTAL LAWS......................................................... 41 8.11 COMPLIANCE WITH LEGAL REQUIREMENTS......................................... 41 8.12 DESIGNATION OF UNRESTRICTED SUBSIDIARIES................................... 41 SECTION 9 NEGATIVE COVENANTS................................................................. 42 9.1 EMPLOYEE BENEFIT PLANS..................................................... 42 9.2 LIENS...................................................................... 42 9.3 SUBSIDIARY INDEBTEDNESS; LIMITATIONS ON UPSTREAMING........................ 44 9.4 TRANSACTIONS WITH AFFILIATES............................................... 44 9.5 COMPLIANCE WITH DOCUMENTS.................................................. 44 9.6 ASSIGNMENT................................................................. 44 9.7 FISCAL YEAR AND ACCOUNTING METHODS......................................... 44 9.8 GOVERNMENT REGULATIONS..................................................... 44 9.9 SALE OF ASSETS............................................................. 44 9.10 MERGERS AND DISSOLUTIONS; SALE OF CAPITAL STOCK............................ 44 9.11 NEW BUSINESS............................................................... 45 9.12 FINANCIAL COVENANTS........................................................ 45 SECTION 10 DEFAULT........................................................................... 45 10.1 PAYMENT OF OBLIGATION...................................................... 45 10.2 COVENANTS.................................................................. 45 10.3 DEBTOR RELIEF.............................................................. 46 10.4 JUDGMENTS AND ATTACHMENTS.................................................. 46 10.5 GOVERNMENT ACTION.......................................................... 46 10.6 MISREPRESENTATION.......................................................... 46 LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT iii 10.7 CHANGE OF CONTROL.......................................................... 46 10.8 DEFAULT UNDER OTHER DEBT AND AGREEMENTS.................................... 46 10.9 EMPLOYEE BENEFIT PLANS..................................................... 47 10.10 VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS.............................. 47 SECTION 11 RIGHTS AND REMEDIES............................................................... 48 11.1 REMEDIES UPON DEFAULT...................................................... 48 11.2 BORROWER WAIVERS........................................................... 48 11.3 PERFORMANCE BY ADMINISTRATIVE AGENT........................................ 48 11.4 DELEGATION OF DUTIES AND RIGHTS............................................ 49 11.5 NOT IN CONTROL............................................................. 49 11.6 COURSE OF DEALING.......................................................... 49 11.7 CUMULATIVE RIGHTS.......................................................... 49 11.8 APPLICATION OF PROCEEDS.................................................... 49 11.9 CERTAIN PROCEEDINGS........................................................ 49 11.10 EXPENSES; INDEMNIFICATION.................................................. 50 SECTION 12 ADMINISTRATIVE AGENT.............................................................. 51 12.1 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT...................... 51 12.2 DELEGATION OF DUTIES....................................................... 51 12.3 LIABILITY OF ADMINISTRATIVE AGENT.......................................... 51 12.4 RELIANCE BY ADMINISTRATIVE AGENT........................................... 52 12.5 NOTICE OF EVENT OF DEFAULT................................................. 52 12.6 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT......... 52 12.7 INDEMNIFICATION OF ADMINISTRATIVE AGENT.................................... 53 12.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY............................ 53 12.9 SUCCESSOR ADMINISTRATIVE AGENT............................................. 54 12.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIMS............................. 54 12.11 OTHER AGENT; ARRANGERS; AND MANAGERS....................................... 55 SECTION 13 MISCELLANEOUS..................................................................... 55 13.1 HEADINGS................................................................... 55 13.2 NONBUSINESS DAYS........................................................... 55 13.3 COMMUNICATIONS............................................................. 55 LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT iv 13.4 FORM AND NUMBER OF DOCUMENTS............................................... 56 13.5 EXCEPTIONS TO COVENANTS.................................................... 56 13.6 SURVIVAL................................................................... 56 13.7 GOVERNING LAW.............................................................. 56 13.8 INVALID PROVISIONS......................................................... 56 13.9 ENTIRETY................................................................... 57 13.10 JURISDICTION; VENUE; SERVICE OF PROCESS; JURY TRIAL........................ 57 13.11 AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS............................... 58 13.12 MULTIPLE COUNTERPARTS...................................................... 58 13.13 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS..................... 59 13.14 DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN CIRCUMSTANCES 61 13.15 CONFIDENTIALITY............................................................ 61 LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT v SCHEDULES AND EXHIBITS Schedule 1.1 - Existing Letters of Credit Schedule 2.1 - Lenders and Commitments; Addresses for Notice Schedule 7.3 - Subsidiaries and Stock Exhibit A - Form of Note Exhibit B - Form of Compliance Certificate Exhibit C - Form of Notice of Conversion/Continuation Exhibit D - Form of Opinion of Counsel Exhibit E - Form of Assignment and Acceptance Agreement LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT vi LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT THIS LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT is entered into as of August 7, 2003 (the "CLOSING DATE") among CENTEX CORPORATION, a Nevada corporation ("BORROWER"), Lenders (hereinafter defined), and BANK OF AMERICA, N.A., as Administrative Agent (hereinafter defined). R E C I T A L S A. Borrower has requested that Lenders extend credit to Borrower in the form of this Agreement, providing for, among other things, a letter of credit facility in the aggregate principal amount of up to $250,000,000. B. Upon and subject to the terms and subject to the conditions of this Agreement, Lenders are willing to extend such credit to Borrower. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1 DEFINITIONS AND TERMS. 1.1 DEFINITIONS. As used herein: ADJUSTED EURODOLLAR RATE means, for any Eurodollar Borrowing for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) determined by Administrative Agent to be equal to the quotient obtained by dividing (a) the Eurodollar Rate for such Eurodollar Borrowing for such Interest Period by (b) one (1) minus the Reserve Requirement for such Eurodollar Borrowing for such Interest Period. ADMINISTRATIVE AGENT means Bank of America, N.A., and its permitted successors and assigns as "Administrative Agent" for Lenders under this Agreement. AFFILIATE of any Person means any other Person who directly or indirectly controls, or is controlled by, or is under common control with, such Person, and, for purposes of this definition only, "control," "controlled by," and "under common control with" mean possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of voting securities, by contract, or otherwise). AGENT-RELATED PERSONS means Administrative Agent, together with its Affiliates (including Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates. AGREEMENT means this Letter of Credit and Reimbursement Agreement (as the same may hereafter be amended, modified, supplemented, or restated from time to time). LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT APPLICABLE LENDING OFFICE means, for each Lender, the "Lending Office" of such Lender (or an Affiliate of such Lender) designated on SCHEDULE 2.1 or such other office as such Lender may from time to time specify to Administrative Agent and Borrower by written notice in accordance with the terms hereof as the office by which its Credit Extensions are to be made and maintained. APPLICABLE MARGIN means, as of any date of determination, the interest margin over the Prime Rate or the Adjusted Eurodollar Rate, and the applicable fees payable pursuant to SECTION 5.5 that corresponds to the Moody's Rating and the S & P Rating set forth below on such date of determination:

Applicable Margin for Applicable Margin Eurodollar Borrowings Applicable Moody's for Prime Rate and Letter of Credit Margin for Level Rating S & P Rating Borrowings Fees Unused Fees 1 A3 or higher A- or higher 0.0000% 0.6250% 0.1250% 2 Baa1 BBB+ 0.0000% 0.7750% 0.1500% 3 Baa2 BBB 0.0000% 0.9000% 0.1750% 4 Baa3 BBB- 0.0000% 1.0750% 0.2250% 5 Ba1 or lower BB+ or lower 0.2500% 1.3000% 0.3000% or or Not Rated Not Rated

For purposes of the foregoing: (a) if the Moody's Rating and the S & P Rating shall fall within different LEVELS, then the Applicable Margin shall be determined by reference to the numerically higher LEVEL (e.g., if the S & P Rating is in LEVEL 1 and the Moody's Rating is in LEVEL 2, then the Applicable Margin shall be determined by reference to LEVEL 2); and (b) if either Moody's or S & P no longer publishes ratings and Borrower and Administrative Agent cannot agree on another ratings agency to replace Moody's or S & P, as the case may be, then the Moody's Rating or the S & P Rating, as the case may be, shall be deemed to be "Not Rated." Each change in the Applicable Margin shall be effective, in the case of an upgrade, immediately following Administrative Agent's receipt of notice from Borrower, as required in SECTION 8.3(g), of a change in the Moody's Rating or the S & P Rating, and in the case of a downgrade, on the date of the public announcement thereof. APPROVED FUND is defined in SECTION 13.13(g). ARRANGER means Banc of America Securities LLC, and its successors and permitted assigns in its capacity as "Sole Lead Arranger" under the Loan Documents. ATTORNEY COSTS means and includes all reasonable fees, expenses, and disbursements of any law firm or other external counsel. AUTHORIZATIONS means all filings, recordings, and registrations with, and all validations or exemptions, approvals, orders, authorizations, consents, franchises, licenses, certificates, and permits from, any Governmental Authority. BORROWER is defined in the preamble to this Agreement. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 2 BORROWING means any Prime Rate Borrowing or Eurodollar Borrowing pursuant to SECTION 2.1(c). BUSINESS DAY means (a) for all purposes, any day other than Saturday, Sunday, and any other day on which commercial banking institutions are required or authorized by any Legal Requirement to be closed at the place of Administrative Agent's Payment Office or payments cannot be made on the United States Fedwire System, and (b) in addition to the foregoing, in respect of any Eurodollar Borrowing, a day on which dealings in United States dollars are conducted in the London interbank market and commercial banks are open for international business in London. CAPITALIZED LEASE OBLIGATIONS means all obligations under Capital Leases taken at the amount thereof accounted for as liabilities in accordance with GAAP. CAPITAL LEASE means any capital lease or sublease which should be capitalized on a balance sheet in accordance with GAAP. CASH COLLATERALIZE is defined in SECTION 2.1(i). CHANGE IN CONTROL means, with respect to any Person, any event or series of events by which: (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such Person or its Subsidiaries, and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a Person or group shall be deemed to have "beneficial ownership" of all securities that such Person or group has the right to acquire (such right, an "OPTION RIGHT"), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of fifty percent (50%) or more of the equity securities of such Person entitled to vote for members of the board of directors or equivalent governing body of such Person on a fully-diluted basis (and taking into account all such securities that such Person or group has the right to acquire pursuant to any option right); or (b) during any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of such Person cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body, or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any Person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors). CLOSING DATE is defined in the preamble to this Agreement. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 3 COMMITMENT means, for any Lender at any date of determination, the amount stated beside each Lender's name as set forth on SCHEDULE 2.1 or on the most-recently amended SCHEDULE 2.1, if any, prepared by Administrative Agent pursuant to SECTION 2.2 or SECTION 13.13 (which amount is subject to increase, reduction, or cancellation in accordance with this Agreement). COMPANIES means, as of any date, Borrower and each of its Subsidiaries, and COMPANY means any one of the Companies. COMPLIANCE CERTIFICATE means a certificate signed by a Responsible Officer, substantially in the form of EXHIBIT B. CONSEQUENTIAL LOSS is defined in SECTION 4.5. CONSOLIDATED ADJUSTED NET INCOME means, for any period of determination, consolidated net earnings (after income taxes and without deduction for losses) of the Companies, but excluding (a) gains from extraordinary items for such period, and (b) any aggregate net gain during such period arising from the sale, exchange, or other disposition of capital assets by the Companies (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets, and all securities (other than securities sold in the ordinary course of business)). CONSOLIDATED DEBT means, as of any date of determination, (a) all Debt of the Restricted Companies, on a consolidated basis, minus (b) Excess Cash not subject to any Liens or other restrictions not inherent in the particular investment or obligation; provided that, for purposes of SECTION 8.12, Consolidated Debt means, as of the date of determination, all Debt of the Restricted Companies, on a consolidated basis. CONSOLIDATED EBITDA means, for any period of determination and without duplication, the EBITDA of the Restricted Companies, on a consolidated basis. CONSOLIDATED INTEREST EXPENSE means, for any period of determination, the Interest Expense of the Restricted Companies, on a consolidated basis. CONSOLIDATED TANGIBLE NET WORTH means, as of any date of determination, Tangible Net Worth of the Companies (other than any Excluded Subsidiary), on a consolidated basis determined in accordance with GAAP. CONSTITUENT DOCUMENTS means, with respect to any Person, its articles or certificate of incorporation, bylaws, partnership agreement, organizational documents, limited liability company agreement, trust agreement, or such other documents as may govern such Person's formation, organization, and management. CONTINGENT OBLIGATIONS means as to any Person any obligation of such Person guaranteeing any Debt, leases, dividends, or other obligations ("PRIMARY OBLIGATIONS") of any other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and any other obligation of such Person, whether or not contingent, pursuant to which such Person is liable under or with respect to a primary obligation of a primary obligor, in each case that would be included on a balance sheet of such Person (or disclosed and assigned a monetary value in the footnotes thereto) properly prepared in accordance with GAAP as a "Contingent Obligation." LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 4 CONTINUE, CONTINUATION, and CONTINUED refers to the continuation pursuant to SECTION 2.1(c) of a Eurodollar Borrowing from one Interest Period to the next Interest Period. CONVERT, CONVERSION, and CONVERTED refers to a conversion pursuant to SECTION 2.1(c) of one Type of Borrowing into another Type of Borrowing. CREDIT EXTENSION means each of the following: (a) a Borrowing; and (b) an L/C Credit Extension. CREDIT PARTIES means Administrative Agent and Lenders, and CREDIT PARTY means any one of the Credit Parties. CUMULATIVE CONSOLIDATED NET INCOME means the sum of Quarterly Consolidated Net Income for the fiscal quarter ended March 31, 2003, and for each succeeding fiscal quarter during the term hereof. CURRENT FINANCIALS means, at the time of any determination thereof, the most recently delivered to the Credit Parties of either (a) the Financial Statements for the fiscal year ended March 31, 2003, calculated on a consolidated basis for the Companies, or (b) the Financial Statements required to be delivered under SECTION 8.3(a) or 8.3(b), as the case may be. DEBT means (without duplication), for any Person, the sum of the following: (a) all liabilities, obligations, and indebtedness of such Person for money borrowed; (b) all liabilities, obligations, and indebtedness of such Person which is evidenced by bonds, notes, debentures, or other similar instruments; (c) all Capitalized Lease Obligations of such Person; (d) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person, and obligations of such Person under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business that are not past-due for more than ninety (90) days); (e) all Contingent Obligations of such Person; (f) all obligations of the type referred to in CLAUSES (a) and (b) preceding of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person); (g) the face amount of all letters of credit and banker's acceptances issued for the account of such Person, and without duplication, all drafts drawn and unpaid thereunder; (h) all Stock of such Person subject to repurchase or redemption by such Person other than at the sole option of such Person; (i) all obligations of such Person to purchase Stock (or other property) which arise out of or in connection with the sale by such Person of the same or substantially similar Stock (or property); and (j) all liabilities, obligations, and indebtedness of such Person arising under Financial Hedges entered into by such Person as determined in accordance with GAAP. DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States of America and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent transfer or conveyance, suspension of payments, or similar Legal Requirements from time to time in effect affecting the Rights of creditors generally. DEFAULTING LENDER means, as of any date, any Lender that has (a) failed to make a Credit Extension required to be made by it hereunder, or (b) given notice to Administrative Agent or Borrower that it will not make, or that it has disaffirmed or repudiated any obligation to make, any Credit Extension hereunder (unless such notice is given by all Lenders). DEFAULT RATE means, (i) with respect to any Borrowing, on any date, a per annum rate of interest equal from day to day to the lesser of (a) the non-default interest rate applicable to such Borrowing, plus two percent (2%) and (b) the Maximum Rate, and (ii) with respect to any other Obligation under the Loan LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 5 Documents, the lesser of (a) the Prime Rate plus the then-effective Applicable Margin for Prime Rate Borrowings, plus two percent (2%) and (b) the Maximum Rate. DOLLARS and the symbol $ mean lawful money of the United States of America. EBITDA means, with respect to any Person for any fiscal period, an amount equal to (a) consolidated net income of such Person for such period, minus (b) the sum of (i) income tax credits, (ii) interest income, (iii) gains from extraordinary items for such period, and (iv) any aggregate net gain during such period arising from the sale, exchange, or other disposition of capital assets by such Person (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets, and all securities (other than securities sold in the ordinary course of business)), in each case to the extent included in the calculation of consolidated net income of such Person for such period in accordance with GAAP, but without duplication, minus (c) any cash payments made in respect of any item of extraordinary loss accrued during a prior period and added back to EBITDA in such prior period pursuant to CLAUSE (d)(v) below, plus (d) the sum of (i) any provision for income taxes, (ii) Interest Expense, (iii) the amount of depreciation and amortization for such period, (iv) the amount of any deduction to consolidated net income as the result of any stock option expense, (v) the amount of any item of extraordinary loss not paid in cash in such period, and (vi) the absolute value of any aggregate net loss during such period arising from the sale, exchange, or other disposition of capital assets by such Person (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets, and all securities (other than securities sold in the ordinary course of business)), in each case to the extent included in the calculation of consolidated net income of such Person for such period in accordance with GAAP, but without duplication. ELIGIBLE ASSIGNEE is defined in SECTION 13.13(g). EMPLOYEE PLAN means an employee pension benefit plan covered by Title IV of ERISA and established or maintained by Borrower or any ERISA Affiliate, but not including any Multiemployer Plan. ENVIRONMENTAL LAW means any Legal Requirement relating to protection of the public health and welfare and/or the environment, including any Legal Requirement relating to: the generation, processing, treatment, storage, transport, disposal, investigation, and remediation or other management of Hazardous Materials; the storage, handling, use, and transport of chemicals and Hazardous Materials; and protection of areas of particular environmental concern, including wetlands, areas inhabited by endangered species, historic sites, and areas above protected aquifers. EQUITY ISSUANCE means the issuance or sale by any Restricted Company of any Stock, other than present and future Stock issued to other Companies or to employees, directors, or consultants of any of the Companies. ERISA means the Employee Retirement Income Security Act of 1974, as amended, and the regulations and rulings thereunder. ERISA AFFILIATE means any company or trade or business (whether or not incorporated) which, for purposes of Title IV of ERISA, is a member of Borrower's controlled group or which is under common control with Borrower within the meaning of Section 414(b), (c), (m), or (o) of the Tax Code. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 6 EURODOLLAR BORROWING means a Borrowing bearing interest at the sum of the Adjusted Eurodollar Rate plus the Applicable Margin for Eurodollar Borrowings. EURODOLLAR RATE means, for any Eurodollar Borrowing for any Interest Period: (a) the rate per annum equal to the rate determined by Administrative Agent to be the offered rate that appears on the page of the Telerate screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period; or (b) if the rate referenced in the preceding CLAUSE (a) does not appear on such page or service or such page or service shall not be available, the rate per annum equal to the rate determined by Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period; or (c) if the rates referenced in the preceding CLAUSES (a) and (b) are not available, the rate per annum determined by Administrative Agent as the rate of interest at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Borrowing being made, continued, or converted by Administrative Agent and with a term equivalent to such Interest Period would be offered by Administrative Agent's London branch to major banks in the London interbank eurodollar market at their request at approximately 4:00 p.m. (London time) two (2) Business Days prior to the first day of such Interest Period. EVENT OF DEFAULT is defined in SECTION 10. EXCESS CASH means, for the Restricted Companies as of any date of determination thereof, (a) cash, plus (b) time deposits with, and certificates of deposit, bank notes and bankers' acceptances issued by, any Lender or any domestic bank, savings bank or savings and loan association having capital, surplus and undivided profits aggregating at least $1,000,000,000, plus (c) investments in direct obligations of the United States of America or any agency, government-sponsored enterprise or instrumentality thereof, or obligations fully guaranteed by the United States of America or any agency, government-sponsored enterprise or instrumentality thereof, provided that such obligations mature within one (1) year of the date of acquisition thereof, plus (d) investments in commercial paper rated (at the time of purchase) in one of the two highest short-term rating categories by two (2) or more national credit rating agencies and maturing not more than two hundred and seventy (270) days from the date of creation thereof, plus (e) repurchase agreements involving any of the obligations described in CLAUSES (b), (c) and (d) above so long as the other party to the repurchase agreement has short-term unsecured debt obligations or short-term deposits rated (at the time of purchase) in the highest grade by two (2) or more national credit rating agencies, plus (f) investments in direct obligations of any money-market fund or other similar investment company that is rated "AAAm" or "AAAm-G" by S & P and "Aaa" by Moody's or whose investments consist, directly or indirectly, primarily of short-term money market securities, which may include obligations described in the foregoing clauses of this definition, minus (g) $15,000,000; provided that in no event shall Excess Cash be less than zero. EXCLUDED SUBSIDIARY means any Unrestricted Subsidiary that has a continuing default or event of default under any Debt in excess of $20,000,000 at any time. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 7 EXCLUDED TAXES is defined in SECTION 4.6(a). EXHIBIT means an exhibit to this Agreement unless otherwise specified. EXISTING LETTERS OF CREDIT means those certain letters of credit listed on SCHEDULE 1.1. FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with member banks of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, then the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, then the Federal Funds Rate for such day shall be the average rate charged to Administrative Agent (in its individual capacity) on such day on such transactions. FINANCIAL HEDGE means a swap, collar, floor, cap, or other contract which is intended to reduce or eliminate the risk of fluctuations in interest rates. FINANCIAL STATEMENTS means balance sheets, statements of operations, statements of shareholders' investments, and statements of cash flows prepared in accordance with GAAP, which statements of operations and statements of cash flows shall be in comparative form to the corresponding period of the preceding fiscal year, and which balance sheets and statements of shareholders' investments shall be in comparative form to the prior fiscal year-end figures. FUND is defined in SECTION 13.13(g). GAAP means generally accepted accounting principles in the United States of America as set forth in the opinions and pronouncements of the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board which are applicable from time to time. GOVERNMENTAL AUTHORITY means any applicable (a) local, state, municipal, federal, or foreign judicial, executive, or legislative instrumentality, (b) private arbitration board or panel, or (c) central bank. HAZARDOUS MATERIAL means "hazardous substance," "pollutant or contaminant," and "petroleum," and "natural gas liquids" as those terms are defined or used in Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 96.01 et seq.), as amended or supplemented from time to time, and any other substances regulated because of their effect or potential effect on public health and the environment including PCBs, lead paint, asbestos, urea formaldehyde, radioactive materials, putrescible materials, petroleum distillates, medical waste, and infectious materials. HONOR DATE is defined in SECTION 2.1(c). INCREASING LENDER is defined in SECTION 2.2(b). LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 8 INDEMNIFIED LIABILITIES is defined in SECTION 11.10(b). INDEMNITEES is defined in SECTION 11.10(b). INTEREST COVERAGE RATIO means, as of any date of determination thereof, the ratio of (a) Consolidated EBITDA, plus net income of each Unrestricted Subsidiary (without duplication and determined in accordance with GAAP) that is earned and eligible for distribution, to (b) Consolidated Interest Expense, in each case for the most-recent four (4) fiscal quarters ending on or prior to the date of determination. INTEREST EXPENSE means, for any period of calculation thereof, for any Person, the aggregate amount of all interest (including facility and utilization fees) on all Debt of such Person, whether paid in cash or accrued as a liability and payable in cash during such period, including (a) imputed interest on Capitalized Lease Obligations, (b) the amortization of any original issue discount on any Debt, (c) the interest portion of any deferred payment obligation, (d) all commissions, discounts, and other fees and charges owed with respect to letters of credit or bankers' acceptance financing, (e) net costs associated with Financial Hedges, and (f) the interest component of any Debt that is guaranteed or secured by such Person, and all cash premiums or penalties for the repayment, redemption, or repurchase of Debt. INTEREST PERIOD is determined in accordance with SECTION 2.1(c)(ii). L/C CREDIT EXTENSION means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal, amendment, or increase of the amount thereof. L/C ISSUERS means Bank of America, N.A., Bank One, NA, JPMorgan Chase Bank, Suntrust Bank, BNP Paribas, Comerica Bank, and such other Lenders which agree, at the request of Borrower and with the consent of Administrative Agent (such consent not to be unreasonably withheld), to issue one or more Letters of Credit pursuant to the terms and conditions of this Agreement, and L/C ISSUER means any one of the L/C ISSUERS. L/C OBLIGATIONS means, as at any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts. LEGAL REQUIREMENTS means all applicable statutes, laws, treaties, ordinances, tariff requirements, rules, regulations, orders, writs, injunctions, decrees, judgments, opinions, or interpretations of any Governmental Authority. LENDERS means, on any date of determination, the financial institutions named on SCHEDULE 2.1 (as the same may be amended from time to time by Administrative Agent to reflect the admission of a Subsequent Lender in accordance with SECTION 2.2(b) and assignments made in accordance with SECTION 13.13(b)), and subject to the terms and conditions of this Agreement, their respective successors and assigns. LETTER OF CREDIT means any letter of credit issued hereunder. A Letter of Credit hereunder shall be a standby or commercial letter of credit. LETTER OF CREDIT APPLICATION means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by each L/C Issuer. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 9 LETTER OF CREDIT EXPIRATION DATE means August 5, 2005. LEVERAGE RATIO means, as of any date of determination thereof, the ratio of (a) Consolidated Debt outstanding on such date minus Subordinated Debt in an amount not to exceed $200,000,000, to (b) the sum of (i) Consolidated Debt outstanding on such date, plus (ii) Consolidated Tangible Net Worth determined in accordance with GAAP. LIEN means any lien, mortgage, security interest, pledge, assignment, charge, title retention agreement, or encumbrance of any kind, and any other Right of or arrangement with any creditor (other than under or relating to subordination or other intercreditor arrangements) to have its claim satisfied out of any property or assets, or the proceeds therefrom, prior to the general creditors of the owner thereof. LITIGATION means any action by or before any Governmental Authority. LOAN DOCUMENTS means (a) this Agreement and the Notes, (b) the Letters of Credit and Letter of Credit Applications, (c) all agreements, documents, or instruments in favor of any Credit Party ever delivered by Borrower pursuant to this Agreement or otherwise delivered in connection with all or any part of the Obligation, and (d) any and all future renewals, extensions, restatements, reaffirmations, or amendments of, or supplements to, all or any part of the foregoing. MATERIAL ADVERSE EVENT means any set of one or more circumstances or events which, individually or collectively, could reasonably be expected to result in any (a) material impairment of the ability of Borrower to perform any of its payment or other material obligations under the Loan Documents, (b) material and adverse effect on the business, properties, condition (financial or otherwise), or results of operations of the Companies (taken as a whole), (c) material and adverse effect on the validity or enforceability of any of the Loan Documents or the Rights of any Credit Party thereunder, or (d) Potential Default or Event of Default. The term Material Adverse Event is used in this Agreement to qualify certain of the representations, warranties, and covenants contained herein, but is not, in and of itself, a condition precedent to any Borrowings hereunder or an independent representation (except as provided in the last sentence of SECTION 7.6), covenant, or Event of Default. MAXIMUM AMOUNT and MAXIMUM RATE respectively mean, for each Lender, the maximum non-usurious amount and the maximum non-usurious rate of interest which, under all Legal Requirements, such Lender is permitted to contract for, charge, take, reserve, or receive on the Obligation. MOODY'S means Moody's Investors Service, Inc. and any successor thereto. MOODY'S RATING means the most recently-announced rating from time to time of Moody's assigned to any class of long-term senior, unsecured debt securities issued by Borrower, as to which no letter of credit, guaranty, or third-party credit support is in place, regardless of whether all or any part of such Debt has been issued at the time such rating was issued. MULTIEMPLOYER PLAN means a multiemployer plan as defined in Section 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Tax Code to which any Company or any ERISA Affiliate is making, or has made, or is accruing, or has accrued, an obligation to make contributions. NET PROCEEDS means, with respect to any Equity Issuance by Borrower or any Restricted Subsidiary, the amount of cash received by such Company in connection with such transaction after deducting therefrom the aggregate, without duplication, of the following amounts to the extent properly LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 10 attributable to such transaction: (a) reasonable brokerage commissions, attorneys' fees, finder's fees, financial advisory fees, accounting fees, underwriting fees, investment banking fees, and other similar commissions and fees (and expenses and disbursements of any of the foregoing), in each case, to the extent paid or payable by such Company; (b) printing and related expenses and filing, recording, or registration fees or charges or similar fees or charges paid by such Company; and (c) taxes paid or payable by such Company to any Governmental Authority as a result of such transaction. NOTES means each promissory note substantially in the form of EXHIBIT A, executed by Borrower, and all modifications, amendments, renewals, extensions, and restatements of all or any part thereof, and NOTE means any one of the Notes. NOTICE OF CONVERSION/CONTINUATION means a notice substantially in the form of EXHIBIT C. OBLIGATION means all present and future indebtedness, liabilities, and obligations, and all renewals and extensions thereof, or any part thereof, now or hereafter owed to any Credit Party or any Affiliate of any Credit Party by Borrower pursuant to any Loan Document, together with all interest accruing thereon, fees, costs, and expenses (including all reasonable Attorney Costs incurred in the enforcement or collection thereof) payable under the Loan Documents. PARTICIPANT is defined in SECTION 13.13(d). PAYMENT OFFICE means Administrative Agent's office located at Dallas, Texas or such other office as Administrative Agent shall notify Borrower and the Credit Parties in writing. PBGC means the Pension Benefit Guaranty Corporation, or any successor thereof, established pursuant to ERISA. PERMITTED LIENS means Liens permitted under SECTION 9.2 as described in such SECTION. PERSON means any individual, entity, or Governmental Authority. POTENTIAL DEFAULT means the occurrence of any event or existence of any circumstance which, with the giving of notice or lapse of time or both, would become an Event of Default. PRIME RATE means, for any day, a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate for such day plus one-half of one percent (0.5%), and (b) the per annum rate of interest in effect for such day as publicly announced from time to time by Bank of America, N.A. as its prime rate, which rate may not be the lowest rate of interest charged by Bank of America, N.A. to its customers for such day. The "prime rate" is a rate set by Bank of America, N.A. based upon various factors including its costs and desired return, general economic conditions, and other factors, and it is used as a reference point for pricing of some loans which may be priced at, above, or below such announced rate. Any change in Bank of America N.A.'s "prime rate" or the Federal Funds Rate shall be effective on the effective date of such change in the "prime rate" or the Federal Funds Rate. PRIME RATE BORROWING means a Borrowing bearing interest at the sum of the Prime Rate plus the Applicable Margin for Prime Rate Borrowings. PRINCIPAL DEBT means, for a Credit Party and at any time, the unpaid principal balance of all outstanding Borrowings from such Credit Party hereunder as of such date. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 11 PRO RATA or PRO RATA PART, for each Lender, means (a) for purposes of any commitment to participate in Letters of Credit and fund Borrowings in respect of this Agreement, respectively, the percentage stated opposite such Lender's name as set forth on SCHEDULE 2.1 or on the most recently amended SCHEDULE 2.1, if any, prepared by Administrative Agent pursuant to SECTION 2.2 or SECTION 13.13, and (b) for all other purposes, the proportion which the portion of the Principal Debt and L/C Obligations owed to such Lender (without duplication, whether directly (net of participations sold to other Lenders) or by participation) bears to the Total Outstandings at the time in question, or if no Principal Debt or L/C Obligations are outstanding, then the proportion that the aggregate of such Lender's Commitment bears to the Total Commitment then in effect. QUARTERLY CONSOLIDATED NET INCOME means, for any fiscal quarter, Consolidated Adjusted Net Income for such quarter; provided that if Consolidated Adjusted Net Income for any quarter is less than $0, then Quarterly Consolidated Net Income for such fiscal quarter shall be equal to $0. RECOURSE DEBT means all Debt of each Unrestricted Subsidiary on which any Restricted Company is obligated, as a guarantor or otherwise. REGISTER is defined in SECTION 13.13(c). REGULATION D means Regulation D of the Board of Governors of the Federal Reserve System, as amended. REGULATION U means Regulation U of the Board of Governors of the Federal Reserve System, as amended. RELEASE means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment (including air, groundwater, surface water, soil, other environmental media, or natural resources). REPAYMENT DATE is defined in SECTION 2.1(c)(vii). REPORTABLE EVENT shall have the meaning specified in Section 4043 of ERISA or the regulations issued thereunder in connection with an Employee Plan, excluding events for which the notice requirement is waived under applicable PBGC regulations other than those events described in Sections 2615.11, 2615.15 and 2615.19 of such regulations, including each such provision as it may subsequently be renumbered. REPRESENTATIVES means representatives, officers, directors, employees, attorneys, and agents. REQUIRED LENDERS means (a) on any date of determination prior to termination of the Total Commitment, those Lenders (other than Defaulting Lenders) collectively holding more than fifty percent (50%) of the Total Commitment (excluding the Commitments of any Defaulting Lenders), or (b) on any date of determination occurring after the Total Commitment has terminated, those Lenders collectively holding more than fifty percent (50%) of the Total Outstandings (excluding the Principal Debt and L/C Obligations of any Defaulting Lenders). RESERVE REQUIREMENT means, at any time, the maximum rate at which reserves (including any marginal, special, supplemental, or emergency reserves) are required to be maintained under regulations LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 12 issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) by member banks of the Federal Reserve System against "Eurocurrency liabilities" (as such term is used in Regulation D). Without limiting the effect of the foregoing, the Reserve Requirement shall reflect any other reserves required to be maintained by such member banks with respect to (a) any category of liabilities which includes deposits by reference to which the Adjusted Eurodollar Rate is to be determined, or (b) any category of extensions of credit or other assets which include Eurodollar Borrowings. The Adjusted Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Reserve Requirement. RESPONSIBLE OFFICER of Borrower means its chairman, vice chairman, president, chief executive officer, chief financial officer, executive vice president, senior vice president, or treasurer, or, for all purposes under the Loan Documents, any other officer designated from time to time by the Board of Directors or Executive Committee of the Board of Directors of Borrower, which designated officer is acceptable to Administrative Agent. RESTRICTED COMPANY means Borrower and each Restricted Subsidiary. RESTRICTED SUBSIDIARY means each of Borrower's Subsidiaries, other than Unrestricted Subsidiaries. RIGHTS means rights, remedies, powers, privileges, and benefits. SCHEDULE means, unless specified otherwise, a schedule attached to this Agreement, as the same may be supplemented and modified from time to time in accordance with the terms of the Loan Documents. SOLVENT means, as to a Person, that (a) the aggregate fair market value of such Person's assets exceeds its liabilities (whether contingent, subordinated, unmatured, unliquidated, or otherwise), (b) such Person has sufficient cash flow to enable it to pay its Debts as they mature, and (c) such Person does not have unreasonably small capital to conduct such Person's businesses. S & P means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto. S & P RATING means the most recently-announced rating from time to time of S & P assigned to any class of long-term senior, unsecured debt securities issued by Borrower, as to which no letter of credit, guaranty, or third-party credit support is in place, regardless of whether all or any part of such Debt has been issued at the time such rating was issued. STOCK means all shares, options, warrants, general or limited partnership interests, membership interests, or other ownership interests (regardless of how designated) of or in a corporation, partnership, limited liability company, trust, or other entity, whether voting or nonvoting, including common stock, preferred stock, or any other similar "equity security" (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended). SUBORDINATED DEBT means any Debt of Borrower (a) subordinated to the Obligation and including customary provisions regarding payment blockage, payover, standstill, voting rights, and notices, LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 13 (b) which, as of the date of calculation, is not considered a "current liability" in accordance with GAAP, and (c) which requires no payments of principal until its maturity. SUBSEQUENT LENDER is defined in SECTION 2.2(b). SUBSIDIARY means, in respect of any Person (herein referred to as the "PARENT"), any corporation, partnership, limited liability company, association, or other business entity (a) of which Stock representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or more than fifty percent (50%) of the general partnership interests are, at the time any determination is being made, owned, Controlled, or held, or (b) which is, at the time any determination is made, otherwise Controlled, by the Parent or one or more Subsidiaries of the Parent or by the Parent and one or more Subsidiaries of the Parent; provided that ownership by Borrower or its Subsidiaries of more than fifty percent (50%) of the limited partnership interests in Centex Development Company, L.P. shall not, by itself, result in such company being deemed a Subsidiary of Borrower. "CONTROL" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of Stock, by contract, or otherwise, and "CONTROLLING" and "CONTROLLED" shall have meanings correlative thereto. TANGIBLE NET WORTH means, for any Person as of any date of determination, the consolidated net worth of such Person determined in accordance with GAAP, less (without duplication), the sum of the following: (a) all intangibles determined in accordance with GAAP (including, without limitation, goodwill and deferred or capitalized acquisition costs), (b) all minority interests in any Subsidiary of such Person, (c) unamortized Debt discount and expense, (d) any non-cash gain (or plus any non-cash loss, as applicable) resulting from any mark-to-market adjustments made directly to consolidated net worth as a result of fluctuations in the value of financial instruments owned by Borrower or any of its Subsidiaries as mandated under FAS 133, and (e) all reserves (except contingency reserves not allocated to specific purposes and not deducted from assets, which are properly treated as appropriations of surplus or retained earnings) and any write-up in book value of assets resulting from a revaluation of such asset subsequent to March 31, 2003. TAX CODE means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder. TAXES means, for any Person, taxes, assessments, duties, levies, imposts, deductions, charges, or withholdings, or other governmental charges or levies imposed upon such Person, its income, or any of its properties, franchises, or assets. TERMINATION DATE means the earlier of (a) August 5, 2004, and (b) the effective date of any other termination or cancellation of all of Lenders' Commitments to make Credit Extensions under, and in accordance with, this Agreement. TOTAL COMMITMENT means, on any date of determination, the sum of all Commitments for all Lenders (as the same may have been reduced, increased, or canceled in accordance with this Agreement) then in effect. TOTAL OUTSTANDINGS means the amount of Total Principal Debt plus (without duplication) the outstanding amount of L/C Obligations. TOTAL PRINCIPAL DEBT means, at any time, the sum of the Principal Debt of all Lenders. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 14 TYPE means any type of Borrowing determined with respect to the interest option applicable thereto. UNREIMBURSED AMOUNT has the meaning set forth in SECTION 2.1(c)(i). UNRESTRICTED SUBSIDIARY means any Subsidiary (a) that is designated as an Unrestricted Subsidiary on the Closing Date and listed on SCHEDULE 7.3, or (b) as otherwise designated in a writing delivered to Administrative Agent and meeting the requirements set forth in SECTION 8.12. WHOLLY-OWNED when used in connection with any Subsidiary shall mean a Subsidiary of which all of the issued and outstanding shares of Stock (except shares required as directors' qualifying shares) shall be owned by Borrower or one or more of its Wholly-owned Subsidiaries. 1.2 NUMBER AND GENDER OF WORDS; OTHER REFERENCES. Unless otherwise specified in the Loan Documents, (a) where appropriate, the singular includes the plural and vice versa, and words of any gender include each other gender, (b) heading and caption references may not be construed in interpreting provisions, (c) monetary references are to currency of the United States of America, (d) section, paragraph, annex, schedule, exhibit, and similar references are to the particular Loan Document in which they are used, (e) references to "telecopy," "facsimile," "fax," or similar terms are to facsimile or telecopy transmissions, (f) references to "including" mean including without limiting the generality of any description preceding that word, (g) the rule of construction that references to general items that follow references to specific items are limited to the same type or character of those specific items is not applicable in the Loan Documents, (h) references to any Person include that Person's heirs, personal representatives, successors, trustees, receivers, and permitted assigns, (i) references to any Legal Requirement include every amendment or supplement to it, rule and regulation adopted under it, and successor or replacement for it, and (j) references to any Loan Document or other document include every renewal and extension of it, amendment and supplement to it, and replacement or substitution for it. 1.3 ACCOUNTING PRINCIPLES. All accounting and financial terms used in the Loan Documents and the compliance with each financial covenant therein shall be determined in accordance with GAAP, and all accounting principles shall be applied on a consistent basis so that the accounting principles in a current period are comparable in all material respects to those applied during the preceding comparable period. If Borrower or any Credit Party determines that a change in GAAP from that in effect on the date hereof has altered the treatment of certain financial data to its detriment under this Agreement, then such party may, by written notice to the others and Administrative Agent not later than ten (10) days after the effective date of such change in GAAP, request renegotiation of the financial covenants affected by such change. If Borrower and Required Lenders have not agreed on revised covenants within thirty (30) days after delivery of such notice, then, for purposes of this Agreement, GAAP will mean generally accepted accounting principles without giving effect to the change that gave rise to the renegotiation. 1.4 TIME REFERENCES. Unless otherwise specified in the Loan Documents (a) time references are to time in Chicago, Illinois, and (b) in calculating a period from one date to another, the word "from" means "from and including" and the word "to" or "until" means "to but excluding." SECTION 2 CREDIT EXTENSION PROVISIONS. 2.1 LETTERS OF CREDIT. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 15 (a) THE LETTER OF CREDIT COMMITMENT. (i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this SECTION 2.1, (x) from time to time on any Business Day during the period from the Closing Date until the Termination Date, to issue Letters of Credit for the account of Borrower or for the account of Borrower and one or more Subsidiaries (provided that the issuance of a Letter of Credit for the account of a Subsidiary of Borrower shall not relieve Borrower of any of its obligations under this Agreement), and to amend (which may include renewals, extensions, or increases in a Letter of Credit) Letters of Credit previously issued by it, in accordance with SECTION 2.1(b); (y) from time to time on any Business Day during the period from the Termination Date until the Business Day immediately prior to the Letter of Credit Expiration Date, to amend Letters of Credit previously issued by it in accordance with SECTION 2.1(b); provided that no such amendment shall renew, extend, or increase any such Letter of Credit; and (z) at any time, in accordance with the terms of the Letters of Credit, to honor drafts under the Letters of Credit; provided that no L/C Issuer shall be obligated to make any L/C Credit Extension with respect to any Letter of Credit if the Total Outstandings would exceed the Total Commitment; and (B) Lenders severally agree to participate in Letters of Credit issued for the account of Borrower or for the account of Borrower and one or more Subsidiaries; provided that no Lender shall be obligated to participate in any Letter of Credit if as of the date of such L/C Credit Extension, any Lender's Pro Rata Part of the Total Outstandings would exceed such Lender's Commitment. Within the foregoing limits, and subject to the terms and conditions hereof, Borrower's ability to obtain Letters of Credit shall be fully revolving, and accordingly Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or been canceled or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof. (ii) No L/C Issuer shall issue any Letter of Credit if: (A) any order, judgment, or decree of any Governmental Authority with jurisdiction over such L/C Issuer shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Legal Requirement applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve, or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost, or expense which was not applicable on the Closing Date and which such L/C Issuer in good faith deems material to it; (B) except for the applicable Existing Letters of Credit and Letters of Credit issued after the Closing Date in an aggregate maximum available amount that does not exceed $2,000,000 at any time, the expiry date of such LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 16 requested Letter of Credit would occur more than twelve (12) months after the date of issuance, unless the Required Lenders have approved such expiry date; (C) the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer with respect to the issuance of letters of credit generally; or (D) such Letter of Credit is in an initial amount less than $10,000 (unless otherwise agreed to by Administrative Agent and the L/C Issuer) or is to be used for a purpose other than general corporate needs including insurance bonding requirements or denominated in a currency other than Dollars. (iii) No L/C Issuer shall be obligated to amend (which may include renewals, extensions, or increases in a Letter of Credit) any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit. (b) PROCEDURES FOR ISSUANCE AND AMENDMENT OF LETTERS OF CREDIT. (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of Borrower delivered to an L/C Issuer (with a copy to Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of Borrower. Such Letter of Credit Application must be received by an L/C Issuer and Administrative Agent not later than 11:00 a.m. at least five (5) Business Days (or such later date and time as such L/C Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to such L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the name and address of any Subsidiary that is an account party along with Borrower; and (H) such other matters as such L/C Issuer may reasonably require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the applicable L/C Issuer: (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as such L/C Issuer may reasonably require. (ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with Administrative Agent (by telephone or in writing) that Administrative Agent has received a copy of such Letter of Credit Application from Borrower and, if not, the L/C Issuer will provide Administrative Agent with a copy thereof. Upon receipt by such L/C Issuer of confirmation from Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of Borrower or LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 17 Borrower and the specified Subsidiary or enter into the applicable amendment, as the case may be, in each case in accordance with such L/C Issuer's usual and customary business practices. If, prior to the issuance of a Letter of Credit, the applicable L/C Issuer receives a request from Borrower to review the Letter of Credit to be issued, such L/C Issuer shall send a copy of such proposed Letter of Credit to Borrower for review. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from such L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender's Pro Rata Part times the amount of such Letter of Credit. (iii) If Borrower so requests in any applicable Letter of Credit Application, the applicable L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an "AUTO-RENEWAL LETTER OF CREDIT"); provided that any such Auto-Renewal Letter of Credit must permit such L/C Issuer to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Letter by Credit) by giving prior notice to the beneficiary thereof not later than a day (the "NONRENEWAL NOTICE DATE") in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed in writing by such L/C Issuer, the Borrower shall not be required to make a specific request to such L/C Issuer for any such renewal. Once an Auto-Renewal Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) such L/C Issuer to permit the renewal of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that such L/C Issuer shall not permit any such renewal if (A) such L/C Issuer has determined that it could not at such time issue such Letter of Credit in its renewed form under the terms hereof (by reason of the provisions of SECTION 2.1(a)(ii) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is two Business Days before the Nonrenewal Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such renewal or (2) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in SECTION 6.2 is not then satisfied. (iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to Borrower and Administrative Agent a true and complete copy of such Letter of Credit or amendment. (c) DRAWINGS AND REIMBURSEMENTS; FUNDING OF PARTICIPATIONS. (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the applicable L/C Issuer shall promptly notify Borrower and Administrative Agent thereof. Not later than 11:00 a.m. on the date of any payment by any L/C Issuer under a Letter of Credit (each such date, an "HONOR DATE"), Borrower shall reimburse such L/C Issuer through Administrative Agent in an amount equal to the amount of such drawing (prior to any conversion into a Borrowing, the "UNREIMBURSED AMOUNT"); provided that if the Honor Date for such Letter of Credit occurs prior to the Termination Date, then, unless Borrower reimburses L/C Issuer through Administrative Agent in respect of such drawing prior to 11:00 a.m. on such Honor Date, such Unreimbursed Amount shall automatically convert into a Prime Rate Borrowing or, if Borrower has so elected pursuant to and in accordance with SECTION 2.1(c)(ii) and so long as no Event of Default exists, into a Eurodollar Borrowing. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 18 (ii) Borrower may, upon irrevocable notice to L/C Issuer and Administrative Agent in accordance with SECTION 2.1(c)(iii), (A) elect, as of any Business Day, to convert any Prime Rate Borrowing (or Unreimbursed Amount if such Business Day occurs prior to the Termination Date) into a Eurodollar Borrowing or (B) elect, as of the last day of any Interest Period having a duration of fourteen (14) days, (x) to continue Eurodollar Borrowings having Interest Periods expiring on such day as Eurodollar Borrowings having Interest Periods of fourteen (14) days, or (y) to convert Eurodollar Borrowings having Interest Periods expiring on such day into Prime Rate Borrowings. When Borrower requests to convert any Unreimbursed Amount or Prime Rate Borrowing into a Eurodollar Borrowing, Borrower may elect the interest period (each an "INTEREST PERIOD") applicable thereto, which shall be, at Borrower's option, fourteen (14) days or one (1) month in each case to the extent available from each Lender; provided, however, that: (a) the initial Interest Period for a Eurodollar Borrowing shall commence on the date of such Borrowing (including the date of any Conversion thereto), and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period applicable thereto expires; (b) if any Interest Period for a Eurodollar Borrowing begins on a day for which there is no numerically corresponding Business Day in the calendar month at the end of such Interest Period, then such Interest Period shall end on the next Business Day immediately following what otherwise would have been such numerically corresponding day in the calendar month at the end of such Interest Period (unless such date would be in a different calendar month from what would have been the month at the end of such Interest Period, or unless there is no numerically corresponding day in the calendar month at the end of the Interest Period; whereupon, such Interest Period shall end on the last Business Day in the calendar month at the end of such Interest Period); (c) no Interest Period may be chosen with respect to any portion of any Borrowing which would extend beyond the scheduled repayment date (including any dates on which mandatory prepayments are required to be made) for such portion of the Total Principal Debt. (iii) Borrower shall deliver a Notice of Conversion/Continuation to be received by L/C Issuer and Administrative Agent not later than 11:00 a.m. at least three (3) Business Days in advance of the Conversion/Continuation Date, specifying: (A) the proposed Conversion/Continuation Date; (B) the type of Borrowing resulting from the proposed conversion or continuation; and (C) other than in the case of conversions into Prime Rate Borrowings, the duration of the requested Interest Period. Upon receipt of a Notice of Conversion/Continuation, Administrative Agent shall promptly notify each Lender of the contents thereof and such notice shall not thereafter be revocable by Borrower. (iv) If upon the expiration of any Interest Period Borrower has failed to continue the Eurodollar Borrowings having Interest Periods then expiring, Borrower shall be deemed to have elected to convert such Eurodollar Borrowings into Prime Rate Borrowings effective as of the expiration date of such Interest Period. (v) Each Borrowing shall bear interest on the outstanding principal amount thereof from the date of such Borrowing until the date repaid at a rate per annum equal to the Adjusted Eurodollar Rate or the Prime Rate, as the case may be (and subject to Borrower's LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 19 right to convert to the other type of Borrowing under this SECTION 2.1(c)), plus the Applicable Margin. Notwithstanding the foregoing, after the Termination Date any Unreimbursed Amounts shall bear interest at the Default Rate. Interest on each Borrowing shall be paid in arrears on the Repayment Date. (vi) Borrower may, subject to SECTION 2.1(c)(viii) and upon at least one (1) Business Day's notice to Administrative Agent, prepay any Borrowing in whole or in part by prepaying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment plus any amounts owing pursuant to SECTION 4.5. (vii) All Borrowings resulting from an Unreimbursed Amount shall be due and payable on the thirty-first (31st) day after the date the Unreimbursed Amount is converted into a Borrowing (or, if such day is not a Business Day, on the first (1st) Business Day succeeding such day) (the "REPAYMENT DATE"). (viii) If Borrower prepays any Eurodollar Borrowings on any day other than the last day of an Interest Period applicable thereto, or if any Unreimbursed Amount or Prime Rate Borrowing is not converted or continued into an Eurodollar Borrowing after notice has been given to Administrative Agent in accordance with SECTION 2.1(c)(iii), Borrower shall reimburse each Lender for any amounts owing pursuant to SECTION 4.5. (ix) If Borrower fails to reimburse the applicable L/C Issuer on any Honor Date, then Administrative Agent shall, upon notice from the applicable L/C Issuer, notify each Lender of the Honor Date, the Unreimbursed Amount, whether the Unreimbursed Amount has been converted into a Prime Rate Borrowing or Eurodollar Borrowing, and such Lender's Pro Rata Part of such Unreimbursed Amount or Borrowing. Each Lender (including the Lender acting as L/C Issuer) shall upon any such notice make funds available to Administrative Agent for the account of the applicable L/C Issuer at the Applicable Lending Office of Administrative Agent in an amount equal to its Pro Rata Part of such Unreimbursed Amount or Borrowing not later than 1:00 p.m. on the Business Day specified in such notice by Administrative Agent. Administrative Agent shall remit the funds so received to the applicable L/C Issuer. (x) Until each Lender funds its participation or Pro Rata Part of a Borrowing pursuant to SECTION 2.1(c)(ix) to reimburse the applicable L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender's Pro Rata Part of such amount shall be solely for the account of such L/C Issuer. (xi) Each Lender's obligation to fund participations or Borrowings to reimburse each L/C Issuer for amounts drawn under Letters of Credit issued in accordance with this Agreement, as contemplated by this SECTION 2.1(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense, or other right which such Lender may have against an L/C Issuer, Borrower, or any other Person for any reason whatsoever, (B) the occurrence or continuance of an Event of Default or Potential Default, or (C) any other occurrence, event, or condition, whether or not similar to any of the foregoing. (xii) If any Lender fails to make available to Administrative Agent for the account of an L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this SECTION 2.1(c) by the time specified in SECTION 2.1(c)(ix), such L/C Issuer shall be entitled LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 20 to recover from such Lender (acting through Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to such L/C Issuer at a rate per annum equal to the Federal Funds Rate from time to time in effect. A certificate of an L/C Issuer submitted to any Lender (through Administrative Agent) with respect to any amounts owing under this SECTION 2.1(c)(xii) shall be conclusive absent manifest error. (d) REPAYMENT OF PARTICIPATIONS OR BORROWINGS. (i) At any time after an L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender's funding of its participation in an Unreimbursed Amount or Pro Rata Part of a Borrowing as a result of such payment in accordance with SECTION 2.1(c), if Administrative Agent receives for the account of such L/C Issuer any payment in respect of the related Unreimbursed Amount or Borrowing or interest thereon (whether directly from Borrower or otherwise) Administrative Agent will distribute to such Lender its Pro Rata Part thereof in the same funds as those received by Administrative Agent. (ii) If any payment received by Administrative Agent for the account of an L/C Issuer pursuant to SECTION 2.1(c)(i) is required to be returned under any of the circumstances described in SECTION 13.14 (including pursuant to any settlement entered into by an L/C Issuer in its discretion), each Lender shall pay to Administrative Agent for the account of such L/C Issuer its Pro Rata Part thereof on demand of Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. (e) OBLIGATIONS ABSOLUTE. The obligation of Borrower to reimburse an L/C Issuer for each drawing under each Letter of Credit and to repay each Borrowing shall be absolute, unconditional, and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following: (i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto; (ii) the existence of any claim, counterclaim, set-off, defense, or other right that Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), any L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby, or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction; (iii) any draft, demand, certificate, or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit; (iv) any payment by any L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by any L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 21 receiver, or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or (v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, Borrower. Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with Borrower's instructions or other irregularity, Borrower will promptly notify the applicable L/C Issuer. Borrower shall be conclusively deemed to have waived any such claim against each L/C Issuer and their correspondents unless such notice is given as aforesaid. (f) ROLE OF L/C ISSUER. Each Lender and Borrower agree that, in paying any drawing under a Letter of Credit, no L/C Issuer shall have any responsibility to obtain any document (other than any sight draft, certificates, and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. No L/C Issuer, Agent-Related Person, or any of the respective correspondents, participants, or assignees of any L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable, (ii) any action taken or omitted in the absence of gross negligence or willful misconduct, or (iii) the due execution, effectiveness, validity, or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application. Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude Borrower's pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. No L/C Issuer, Agent-Related Person, or any of the respective correspondents, participants, or assignees of any L/C Issuer, shall be liable or responsible for any of the matters described in SECTIONS 2.01(e)(i) THROUGH (v); provided, however, that anything in such clauses or elsewhere in this Agreement or any other Loan Document to the contrary notwithstanding, Borrower may have a claim against an L/C Issuer, and an L/C Issuer may be liable to Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by Borrower which Borrower proves were caused by such L/C Issuer's willful misconduct, bad faith, or gross negligence or such L/C Issuer's willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, each L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and no L/C Issuer shall be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. (g) APPLICABILITY OF ISP98 AND UCP. Unless otherwise expressly agreed by any L/C Issuer and Borrower when a Letter of Credit is issued, (i) the rules of the "International Standby Practices 1998" published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce (the "ICC") at the time of issuance (including the ICC decision LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 22 published by the Commission on Banking Technique and Practice on April 6, 1998 regarding the European single currency (euro)) shall apply to each commercial Letter of Credit. (h) CONFLICT WITH LETTER OF CREDIT APPLICATION. In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control. (i) CASH COLLATERAL. If, as of the Letter of Credit Expiration Date, any Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, Borrower shall immediately Cash Collateralize the then-undrawn amount of all outstanding Letters of Credit (in an amount equal to such outstanding amount determined as of the Letter of Credit Expiration Date). For purposes hereof, "CASH COLLATERALIZE" means to pledge and deposit with or deliver to Administrative Agent, for the benefit of each L/C Issuer and the Lenders, as collateral for the undrawn amount of all outstanding Letters of Credit, cash or deposit account balances pursuant to documentation in form and substance satisfactory to Administrative Agent and each L/C Issuer (which documents are hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. Effective as of the time Borrower is required under this SECTION 2.1(i) or any other provision of this Agreement or the Loan Documents to Cash Collateralize the then-undrawn amount of all outstanding Letters of Credit, Borrower hereby grants to Administrative Agent, for the benefit of each L/C Issuer and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing in an amount equal to such undrawn amount of outstanding Letters of Credit. Cash collateral shall be maintained in blocked, non-interest bearing deposit accounts at Administrative Agent. Cash collateral shall be released from such Lien as and to the extent that Letters of Credit expire or terminate or are drawn upon and reimbursed. (j) L/C ISSUER REPORTING REQUIREMENTS. Each L/C Issuer shall, no later than the third (3rd) Business Day following the last day of each month, provide to Administrative Agent a schedule of the Letters of Credit issued by it, in form and substance reasonably satisfactory to Administrative Agent, showing the date of issuance of each Letter of Credit, the account party, the original face amount (if any), the expiration date, and the reference number of any Letter of Credit outstanding at any time during such month, and showing the aggregate amount (if any) payable by Borrower to such L/C Issuer during the such month pursuant to SECTION 5.4. Promptly after the receipt of such schedule from each L/C Issuer, Administrative Agent shall provide to Lenders a summary of such schedules. 2.2 LENDERS; INCREASE IN TOTAL COMMITMENT. (a) The Lenders on the Closing Date shall be the Lenders set forth on SCHEDULE 2.1 on the Closing Date. (b) At any time after the Closing Date through April 7, 2004, Administrative Agent may, from time to time at the request of Borrower, increase the Total Commitment by (i) admitting additional Lenders hereunder (each a "SUBSEQUENT LENDER"), or (ii) increasing the Commitment of any Lender (each an "INCREASING LENDER"), subject to the following conditions: (A) each Subsequent Lender is an Eligible Assignee; (B) each Subsequent Lender executes and delivers to Administrative Agent a signature page to this Agreement; LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 23 (C) after giving effect to the admission of any Subsequent Lender or the increase in the Commitment of any Increasing Lender, the Total Commitment does not exceed $350,000,000; (D) each increase in the Total Commitment shall be in the amount of $10,000,000 or a greater integral multiple of $500,000; (E) no admission of any Subsequent Lender shall increase the Commitment of any existing Lender without the written consent of such Lender; (F) no Potential Default or Event of Default exists; (G) no Lender shall be an Increasing Lender without the written consent of such Lender; and (H) the amount of all increases in the Total Commitment pursuant to this SECTION 2.2 shall not exceed $100,000,000 in the aggregate. After the admission of any Subsequent Lender or the increase in the Commitment of any Increasing Lender, Administrative Agent shall promptly provide to each Lender and to Borrower a new SCHEDULE 2.1 to this Agreement. In the event that there are any Unreimbursed Amounts or Borrowings outstanding after giving effect to an increase in the Total Commitment pursuant to this SECTION 2.2, upon notice from Administrative Agent to Lenders, the amount of such Unreimbursed Amounts or Borrowings owing to each Lender shall be appropriately adjusted to reflect the new Pro Rata Parts of Lenders, and Borrower shall pay any Consequential Losses associated therewith pursuant to SECTION 4.5. 2.3 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. Without premium or penalty, and upon giving not less than ten (10) Business Days prior written and irrevocable notice to Administrative Agent, Borrower may permanently terminate in whole or in part the Total Commitment; provided that: (a) each partial termination shall be in the amount of $5,000,000 or a greater integral multiple of $1,000,000; (b) the amount of the Total Commitment may not be reduced below the Total Outstandings; and (c) each reduction shall be allocated Pro Rata among Lenders in accordance with their respective Pro Rata Parts. Promptly after receipt of such notice of termination or reduction, Administrative Agent shall notify each Lender of the proposed termination or reduction. Such termination or partial reduction of the Total Commitment shall be effective on the Business Day specified in Borrower's notice (which date must be at least ten (10) Business Days after Borrower's delivery of such notice). In the event that the Total Commitment is reduced to zero and there are no outstanding Obligations, this Agreement shall be terminated to the extent specified in SECTION 13.14, and all Letter of Credit fees and other fees then earned and unpaid hereunder and all other amounts of the Obligation then due and owing shall be immediately due and payable, without notice or demand by any Credit Party. SECTION 3 TERMS OF PAYMENT. 3.1 NOTES AND PAYMENTS. (a) NOTES. The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by Administrative Agent in the ordinary course of business. The accounts or records maintained by Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by such Lender and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of Borrower hereunder to pay any amount owing with respect to the Obligation. In the event of any conflict between the accounts and records maintained by any Lender and LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 24 the accounts and records of Administrative Agent in respect of such matters, the accounts and records of Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through Administrative Agent, Borrower shall execute and deliver to such Lender (through Administrative Agent) a Note, which shall evidence the Borrowings from such Lender in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of Borrowings and payments with respect thereto. (b) PAYMENTS. Each payment or prepayment on the Obligation is due and must be paid by Borrower to Administrative Agent at its Payment Office in Dollars and in immediately available funds, without set-off, deduction, defense, recoupment, or counterclaim, by 11:00 a.m. on the day due. Payments made after 11:00 a.m. shall be deemed made on the Business Day next following. If any payment or prepayment on the Obligation is stated to be due on a day that is not a Business Day, such payment shall be due on the next following Business Day, and, to the extent applicable, interest and fees shall continue to accrue until such payment or prepayment is actually made. Administrative Agent shall pay to each Lender any payment or prepayment to which such Lender is entitled hereunder on the same day Administrative Agent shall have received the same from Borrower; provided that such payment or prepayment is received by Administrative Agent prior to 11:00 a.m., and otherwise before 11:00 a.m. on the Business Day next following. If and to the extent Administrative Agent shall not make such payments to Lenders when due as set forth in the preceding sentence, then such unpaid amounts shall accrue interest, payable by Administrative Agent, at the Federal Funds Rate from the due date until (but not including) the date on which Administrative Agent makes such payments to Lenders. 3.2 MANDATORY PAYMENTS. (a) Each Borrowing is due and payable on the Repayment Date for such Borrowing. (b) On any date of determination, if the Total Outstandings exceed the Total Commitment, then Borrower shall either prepay the Principal Debt and/or Cash Collateralize or cause to be canceled the undrawn amount of outstanding Letters of Credit in at least the amount of such excess, together with (A) all accrued and unpaid interest on the Principal Debt prepaid, and (B) any Consequential Loss arising as a result thereof. (c) All mandatory payments pursuant to this SECTION 3.2 shall be applied to the Principal Debt owing to each Lender according to its Pro Rata Part except as otherwise specifically provided herein. 3.3 DEFAULT RATE. At the option of Required Lenders at any time while an Event of Default exists and to the extent permitted by all Legal Requirements, all past due Principal Debt and all past due accrued interest thereon, and fees and expenses payable hereunder and under the other Loan Documents shall bear interest at the Default Rate until paid, regardless whether such payment is made before or after entry of a judgment. 3.4 INTEREST RECAPTURE. If the designated rate applicable to any Borrowing exceeds the Maximum Rate, then the rate of interest on such Borrowing shall be limited to the Maximum Rate, but any subsequent reductions in such designated rate shall not reduce the rate of interest thereon below the Maximum Rate until the total amount of interest accrued thereon equals the amount of interest which would have accrued thereon if such designated rate had at all times been in effect. In the event that at maturity (stated or by acceleration), or at final payment of the Total Principal Debt, the total amount of interest paid or accrued is less than the amount of interest which would have accrued if such designated LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 25 rates had at all times been in effect, then, at such time and to the extent permitted by all Legal Requirements, Borrower shall pay an amount equal to the difference between (a) the lesser of the amount of interest which would have accrued if such designated rates had at all times been in effect and the amount of interest which would have accrued if the Maximum Rate had at all times been in effect, and (b) the amount of interest actually paid or accrued on the Total Principal Debt. 3.5 INTEREST CALCULATIONS. (a) All computations of interest for Prime Rate Borrowings shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of interest shall be calculated on the basis of actual number of days (including the first (1st) day but excluding the last day) elapsed but computed as if each calendar year consisted of 360 days. All interest rate determinations and calculations by Administrative Agent shall be conclusive and binding absent manifest error. (b) The provisions of this Agreement relating to the calculation of the Prime Rate and the Adjusted Eurodollar Rate are included only for the purpose of determining the rate of interest or other amounts to be paid hereunder that are based upon such rate. 3.6 MAXIMUM RATE. Regardless of any provision contained in any Loan Document, no Credit Party shall ever be entitled to contract for, charge, take, reserve, receive, or apply, as interest on the Obligation, or any part thereof, any amount in excess of the Maximum Rate, and if any Credit Party ever does so, then such excess shall be deemed a partial prepayment of principal and treated hereunder as such and any remaining excess shall be refunded to Borrower. In determining if the interest paid or payable exceeds the Maximum Rate, Borrower and the Credit Parties shall, to the maximum extent permitted under all Legal Requirements, (a) treat all Borrowings as but a single extension of credit (and the Credit Parties and Borrower agree that such is the case and that provision herein for multiple Borrowings is for convenience only), (b) characterize any non-principal payment as an expense, fee, or premium rather than as interest, (c) exclude voluntary prepayments and the effects thereof, and (d) amortize, prorate, allocate, and spread the total amount of interest throughout the entire contemplated term of the Obligation; provided that if the Obligation is paid and performed in full prior to the end of the full contemplated term thereof, and if the interest received for the actual period of existence thereof exceeds the Maximum Amount, then the Credit Parties shall refund such excess, and, in such event, the Credit Parties shall not, to the extent permitted by all Legal Requirements, be subject to any penalties provided by any Legal Requirements for contracting for, charging, taking, reserving, or receiving interest in excess of the Maximum Amount. 3.7 ORDER OF APPLICATION. (a) Payments and prepayments of the Obligation shall be applied in the order and manner specified in this Agreement; provided, however, if no order is otherwise specified and no Potential Default or Event of Default exists, payments and prepayments of the Obligation shall be applied first, to fees, second, to accrued interest then due and payable on the Total Principal Debt, and then to the remaining Obligation in the order and manner as Borrower may direct. (b) If a Potential Default or Event of Default exists (or if Borrower fails to give directions as permitted under SECTION 3.7(a)), any payment or prepayment (including proceeds from the exercise of any Rights) shall be applied to the Obligation in the following order: (i) to the ratable payment of all fees, expenses, and indemnities for which the Credit Parties have not been paid or reimbursed in accordance LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 26 with the Loan Documents; (ii) to the ratable payment of accrued and unpaid interest on the Total Principal Debt; (iii) to the ratable payment of the Total Principal Debt; and (iv) to the payment of the remaining Obligation in the order and manner Required Lenders deem appropriate. (c) Subject to the provisions of SECTION 12 and provided that Administrative Agent shall not in any event be bound to inquire into or to determine the validity, scope, or priority of any interest or entitlement of any Credit Party and may suspend all payments or seek appropriate relief (including instructions from Required Lenders or an action in the nature of interpleader) in the event of any doubt or dispute as to any apportionment or distribution contemplated hereby, Administrative Agent shall promptly distribute such amounts to each Credit Party in accordance with this Agreement and the related Loan Documents. 3.8 RIGHT OF SET-OFF; ADJUSTMENTS. (a) SET-OFF. Upon the occurrence and during the continuance of any Event of Default, each Lender (and each of its Affiliates) is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Legal Requirements, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender (or any of its Affiliates) to or for the credit or the account of Borrower against any and all of the obligations of Borrower now or hereafter existing under this Agreement and the Note held by such Lender, irrespective of whether such Lender shall have made any demand under this Agreement or such Note and although such obligations may be unmatured. Each Lender agrees promptly to notify Borrower after any such set-off and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender under this SECTION 3.8(a) are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Lender may have. (b) SHARING OF PAYMENTS. If any Lender (a "BENEFITED LENDER") shall at any time receive any payment of all or part of the Borrowings or participations in Unreimbursed Amounts owing to it, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender's Borrowings owing to it, or interest thereon, then such Benefited Lender shall purchase for cash from the other Lenders a participating interest in such portion of each such other Lender's Borrowings owing to it, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably with all Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, then such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. Borrower agrees that any Lender so purchasing a participation from a Lender pursuant to this SECTION 3.8(b) may, to the fullest extent permitted by applicable Legal Requirements, exercise all of its rights of payment (including the right of set-off) with respect to such participation as fully as if such Person were the direct creditor of Borrower in the amount of such participation. 3.9 BOOKING BORROWINGS. To the extent permitted by all Legal Requirements, any Lender may make, carry, or transfer its Borrowings at, to, or for the account of any of its branch offices or the office of any of its Affiliates; provided that no Affiliate shall be entitled to receive any greater payment under SECTION 4 than the transferor Lender would have been entitled to receive with respect to such Borrowings. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 27 SECTION 4 CHANGE IN CIRCUMSTANCES. 4.1 INCREASED COST AND REDUCED RETURN. (a) CHANGE IN LEGAL REQUIREMENTS. If, after the date hereof, the adoption of any applicable Legal Requirement, or any change in any applicable Legal Requirement, or any change in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof, or compliance by any Lender (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) of any such Governmental Authority: (i) shall subject such Lender (or its Applicable Lending Office) to any tax, duty, or other charge with respect to any Eurodollar Borrowing, its Note, any Letter of Credit issued by it or its obligation to make Eurodollar Borrowings or issue or participate in Letters of Credit, or change the basis of taxation of any amounts payable to such Lender (or its Applicable Lending Office) under this Agreement or its Note in respect of any Eurodollar Borrowings or any L/C Obligations owing to it (other than taxes imposed on the overall net income of such Lender by the jurisdiction in which such Lender has its principal office or such Applicable Lending Office); (ii) shall impose, modify, or deem applicable any reserve, special deposit, assessment, or similar requirement (other than the Reserve Requirement utilized in the determination of the Adjusted Eurodollar Rate) relating to any extensions of credit or other assets of, or any deposits with or other liabilities or commitments of, such Lender (or its Applicable Lending Office), including the Commitment of such Lender hereunder; or (iii) shall impose on such Lender (or its Applicable Lending Office) or the London interbank market any other condition affecting this Agreement or its Note or any of such extensions of credit or liabilities or commitments; and the result of any of the foregoing is to increase the cost to such Lender (or its Applicable Lending Office) of being obligated to make, making, Converting into, Continuing, or maintaining any Eurodollar Borrowings or of issuing Letters of Credit or purchasing or maintaining participations in Letters of Credit or to reduce any sum received or receivable by such Lender (or its Applicable Lending Office) under this Agreement or its Note with respect to any Eurodollar Borrowings or with respect to any L/C Obligations owing to it, then Borrower shall pay to such Lender on demand such amount or amounts as will compensate such Lender for such increased cost or reduction. If any Lender requests compensation by Borrower under this SECTION 4.1(a), then Borrower may, by notice to such Lender (with a copy to Administrative Agent), suspend the obligation of such Lender to make or Continue Eurodollar Borrowings, or Convert all Eurodollar Borrowings into Prime Rate Borrowings, until the event or condition giving rise to such request ceases to be in effect (in which case the provisions of SECTION 4.4 shall be applicable); provided that such suspension shall not affect the Right of such Lender to receive the compensation so requested. (b) CAPITAL ADEQUACY. If, after the date hereof, any Lender shall have determined that the adoption of any applicable Legal Requirement regarding capital adequacy or any change therein or in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 28 Lender's obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change, request, or directive (taking into consideration its policies with respect to capital adequacy), then from time to time upon demand Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. (c) NOTICE. Each Lender shall promptly notify Borrower and Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this SECTION 4.1 and will use reasonable efforts to designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming compensation under this SECTION 4.1 shall furnish to Borrower and Administrative Agent a statement setting forth the additional amount or amounts to be paid to it hereunder which shall be conclusive in the absence of manifest error. In determining such amount, such Lender may use any reasonable averaging and attribution methods. 4.2 LIMITATION ON TYPES OF BORROWINGS. If on or prior to the first (1st) day of any Interest Period for any Eurodollar Borrowing: (a) Administrative Agent determines (which determination shall be conclusive) that by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period; or (b) Required Lenders determine (which determination shall be conclusive) and notify Administrative Agent that the Adjusted Eurodollar Rate will not adequately and fairly reflect the cost to Lenders of funding Eurodollar Borrowings for such Interest Period; then Administrative Agent shall give Borrower prompt notice thereof specifying the relevant amounts or periods, and so long as such condition remains in effect, Lenders shall be under no obligation to make additional Eurodollar Borrowings, Continue any Eurodollar Borrowings, or to Convert any Prime Rate Borrowings to Eurodollar Borrowings and Borrower shall, on the last day(s) of the then-current Interest Period(s) for the outstanding Eurodollar Borrowings, either prepay such Borrowings or Convert such Borrowings into Prime Rate Borrowings in accordance with the terms of this Agreement. 4.3 ILLEGALITY. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Lender or its Applicable Lending Office to make, maintain, or fund Eurodollar Borrowings hereunder, then such Lender shall promptly notify Administrative Agent and Borrower thereof and such Lender's obligation to make or Continue Eurodollar Borrowings and to Convert Prime Rate Borrowings into Eurodollar Borrowings shall be suspended until such time as such Lender may again make, maintain, and fund Eurodollar Borrowings (in which case the provisions of SECTION 4.4 shall be applicable). 4.4 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to make or Continue Eurodollar Borrowings or to Convert Prime Rate Borrowings into Eurodollar Borrowings shall be suspended pursuant to SECTION 4.1, 4.2, or 4.3, then such Lender's Eurodollar Borrowings shall be automatically Converted into Prime Rate Borrowings on the last day(s) of the then current Interest Period(s) for all Eurodollar Borrowings (or, in the case of a Conversion required by SECTION 4.3, on such earlier date as such Lender may specify to Borrower with a copy to Administrative Agent) and, unless and LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 29 until such Lender gives notice as provided below that the circumstances specified in SECTION 4.1, 4.2, or 4.3 that gave rise to such Conversion no longer exist: (a) to the extent that such Lender's Eurodollar Borrowings have been so Converted, all payments and prepayments of principal that would otherwise be applied to such Lender's Eurodollar Borrowings shall be applied instead to its Prime Rate Borrowings; and (b) all Borrowings that would otherwise be made or Continued by such Lender as Eurodollar Borrowings shall be made or Continued instead as Prime Rate Borrowings, and all Borrowings of such Lender that would otherwise be Converted into Eurodollar Borrowings shall be Converted instead into (or shall remain as) Prime Rate Borrowings. If such Lender gives notice to Borrower (with a copy to Administrative Agent) that the circumstances specified in SECTION 4.1, 4.2, OR 4.3 that gave rise to the Conversion of such Lender's Eurodollar Borrowings pursuant to this SECTION 4.4 no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when Eurodollar Borrowings made by other Lenders are outstanding, then such Lender's Prime Rate Borrowings shall be automatically Converted, on the first (1st) day(s) of the next succeeding Interest Period(s) for such outstanding Eurodollar Borrowings, to the extent necessary so that, after giving effect thereto, all Eurodollar Borrowings held by Lenders are held Pro Rata (as to principal amounts, Types, and Interest Periods). 4.5 COMPENSATION. Upon the request of any Lender, Borrower shall pay to such Lender such amount or amounts as shall be sufficient (in the reasonable opinion of such Lender) to compensate it for any loss, cost, or expense (herein called a "CONSEQUENTIAL LOSS") incurred by it as a result of: (a) any payment, prepayment, or Conversion of a Eurodollar Borrowing for any reason (including the acceleration of the Obligation pursuant to SECTION 11.1) on a date other than the last day of the Interest Period for such Borrowing; or (b) any failure by Borrower for any reason (including the failure of any condition precedent specified in SECTION 6 to be satisfied) to Convert, Continue, or prepay a Eurodollar Borrowing on the date for such Conversion, Continuation, or prepayment specified in the relevant Notice of Conversion or Continuation. 4.6 TAXES. (a) Any and all payments by Borrower to or for the account of any Credit Party hereunder or under any other Loan Document shall be made free and clear of and without deduction for any and all present or future Taxes, excluding, in the case of each Credit Party, Taxes based on or measured by its income, and franchise taxes imposed on it by the jurisdiction under the Legal Requirements of which such Credit Party (or its Applicable Lending Office) is organized or any political subdivision thereof (such income and franchise Taxes being "EXCLUDED TAXES"). If Borrower shall be required by any Legal Requirement to deduct any Taxes (other than Excluded Taxes) from or in respect of any sum payable under this Agreement or any other Loan Document to any Credit Party, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this SECTION 4.6) such Credit Party receives an amount equal to the sum it would have received had no such deductions been made, (ii) Borrower shall make such deductions, and (iii) Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with all Legal Requirements. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 30 (b) In addition, Borrower agrees to pay any and all present or future stamp or documentary Taxes and any other excise or property Taxes or charges or similar levies which arise from any payment made under this Agreement or any other Loan Document or from the execution or delivery of, or otherwise with respect to, this Agreement or any other Loan Document (hereinafter referred to as "OTHER TAXES"). (c) Borrower agrees to indemnify each Credit Party for the full amount of Taxes (other than Excluded Taxes) and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this SECTION 4.6) paid by such Credit Party and any liability (including penalties, interest, and expenses) arising therefrom or with respect thereto. (d) Each Lender organized under the Legal Requirements of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each Lender listed on the signature pages hereof and on or prior to the date on which it becomes a Lender in the case of each other Lender, and from time to time thereafter if requested in writing by Borrower or Administrative Agent (but only so long as such Lender remains lawfully able to do so), shall provide Borrower and Administrative Agent with (i) Internal Revenue Service Form 1001 or 4224, as appropriate, or any successor form prescribed by the Internal Revenue Service, certifying that such Lender is entitled to benefits under an income tax treaty to which the United States is a party which reduces the rate of withholding tax on payments of interest or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States, (ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any successor form prescribed by the Internal Revenue Service, and (iii) any other form or certificate required by any taxing authority (including any certificate required by Sections 871(h) and 881(c) of the Tax Code), certifying that such Lender is entitled to an exemption from or a reduced rate of tax on payments pursuant to this Agreement or any of the other Loan Documents. (e) For any period with respect to which a Lender has failed to provide Borrower and Administrative Agent with the appropriate form pursuant to SECTION 4.6(D) (unless such failure is due to a change in any Legal Requirement occurring subsequent to the date on which a form originally was required to be provided), such Lender shall not be entitled to indemnification under SECTIONS 4.6(A) or (B) with respect to Taxes imposed by the United States; provided, however, that should a Lender, which is otherwise exempt from or subject to a reduced rate of withholding tax, become subject to Taxes (other than Excluded Taxes) because of its failure to deliver a form required hereunder, Borrower shall take such steps as such Lender shall reasonably request to assist such Lender to recover such Taxes. (f) If Borrower is required to pay additional amounts to or for the account of any Lender pursuant to this SECTION 4.6, then such Lender will agree to use reasonable efforts to change the jurisdiction of its Applicable Lending Office so as to eliminate or reduce any such additional payment which may thereafter accrue if such change, in the judgment of such Lender, is not otherwise disadvantageous to such Lender. (g) Within thirty (30) days after the date of any payment of Taxes or Other Taxes, Borrower shall furnish to Administrative Agent the original or a certified copy of a receipt evidencing such payment. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 31 (h) Without prejudice to the survival of any other agreement of Borrower hereunder, the agreements and obligations of Borrower contained in SECTIONS 4.1, 4.5, and 4.6 shall survive the termination of the Total Commitment and the payment in full of the Notes. SECTION 5 FEES. 5.1 TREATMENT OF FEES. Except as otherwise provided by any Legal Requirement, the fees described in this SECTION 5: (a) do not constitute compensation for the use, detention, or forbearance of money; (b) are in addition to, and not in lieu of, interest and expenses otherwise described in this Agreement; (c) shall be payable in accordance with SECTION 3.1; (d) shall be non-refundable; (e) shall, to the fullest extent permitted by all Legal Requirements, bear interest, if not paid when due, at the Default Rate; and (f) shall be calculated on the basis of actual number of days (including the first day but excluding the last day) elapsed, but computed as if each calendar year consisted of 360 days. 5.2 FEES OF ADMINISTRATIVE AGENT. Borrower shall pay to Administrative Agent the fees specified in the letter agreement dated May 29, 2003 between Administrative Agent and Borrower, as amended, which fees shall be for the account of Administrative Agent and for the account of the Credit Parties as shall be agreed between Administrative Agent and each other Credit Party. 5.3 LETTER OF CREDIT FEES. Borrower shall pay to Administrative Agent for the account of the Lenders in accordance with their respective Pro Rata Parts a Letter of Credit fee for each outstanding Letter of Credit equal to a rate per annum equal to the Applicable Margin for Letters of Credit times the daily maximum amount available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit). Such Letter of Credit fees shall accrue and be computed on a quarterly basis in arrears, and shall be due and payable on the fifteenth (15th) day after the end of each March, June, September, and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If there is any change in the Applicable Margin during any quarter, the daily maximum amount of each Letter of Credit shall be computed and multiplied by the Applicable Margin separately for each period during such quarter that such Applicable Margin was in effect. 5.4 FRONTING FEE AND DOCUMENTARY AND PROCESSING CHARGES PAYABLE TO L/C ISSUER. Borrower shall pay directly to the applicable L/C Issuer for its own account a fronting fee with respect to each Letter of Credit issued or renewed by such L/C Issuer equal to the greater of (a) $1,500 and (b) (i) 0.125% per annum times (ii) the aggregate maximum amount which is available to be drawn under such Letter of Credit. Such fronting fee shall be due and payable on the fifteenth (15th) day after the end of each March, June, September, and December, commencing with the first such date to occur after the issuance or renewal of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. In addition, Borrower shall pay directly to the applicable L/C Issuer for its own account the customary issuance, presentation, amendment, and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable. 5.5 UNUSED FEE. For the period from the Closing Date to the Termination Date, Borrower shall pay to Administrative Agent, for the ratable benefit of Lenders, an unused fee, calculated daily but payable quarterly in installments in arrears, on the fifteenth (15th) day after the end of each March, June, September, and December and on the Termination Date, commencing September 30, 2003. Each installment shall be in an amount equal to the product of (a) the rate per annum equal to the Applicable LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 32 Margin for Unused Fees times (b) the actual daily amount by which the Total Commitment exceeds Total Outstandings. SECTION 6 CONDITIONS PRECEDENT. 6.1 CONDITIONS PRECEDENT TO CLOSING. This Agreement shall not become effective unless the following conditions precedent are satisfied on or before the Closing Date: (a) BORROWER DOCUMENTS. Borrower shall deliver or cause to be delivered to Administrative Agent the following, each, unless otherwise noted, dated as of the Closing Date: (i) certified copies of its Constituent Documents, together with existence and good standing certificates from the Secretary of State of Nevada and foreign qualification and good standing certificates from the State of Texas, each dated a recent date prior to the Closing Date; (ii) a certificate of Responsible Officers of Borrower certifying (A) its Constituent Documents, (B) resolutions of its Board of Directors (or of the "Executive Committee" of the Board of Directors upon delivery of resolutions of the Board of Directors authorizing such action by an Executive Committee) approving and authorizing the execution, delivery, and performance of this Agreement and the other Loan Documents, certified as of the Closing Date as being in full force and effect without modification or amendment, and (C) signatures and incumbency of its officers executing this Agreement and the other Loan Documents; (iii) executed originals of this Agreement, the Notes, if any, and the other Loan Documents to be executed by Borrower; and (iv) such other documents as Administrative Agent may reasonably request. (b) OPINION OF COUNSEL FOR BORROWER. The Credit Parties and their respective counsel shall have received originally executed copies of a favorable written opinion of counsel for Borrower, in form and substance reasonably satisfactory to Administrative Agent and its counsel, dated as of the Closing Date, and setting forth substantially the matters in the opinions designated in EXHIBIT D. (c) FEES. Borrower shall have paid to Administrative Agent, (i) for distribution (as appropriate) to the Credit Parties, the fees payable on the Closing Date referred to in SECTION 5.2, and (ii) all reasonable fees and expenses incurred by Administrative Agent and Arranger in connection with the negotiation, preparation, and closing of the transactions evidenced by the Loan Documents (including, without limitation, Attorney Costs). (d) COMPLETION OF PROCEEDINGS. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incidental thereto not previously found acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel shall be satisfactory in form and substance to Administrative Agent and such counsel, and Administrative Agent and such counsel shall have received all such counterpart originals or certified copies of such documents as Administrative Agent may reasonably request. 6.2 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligations of the Credit Parties to make each Credit Extension (including the initial Credit Extension) are subject to the following further conditions precedent: LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 33 (a) NOTICE OF CREDIT EXTENSION. Administrative Agent and the applicable L/C Issuer shall have received, in accordance with the provisions of SECTION 2.1, an originally executed Letter of Credit Application or Notice of Conversion/Continuation, as applicable. (b) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. As of the date of such Credit Extension, Borrower's representations and warranties in each Loan Document are true, correct, and complete in all material respects (unless they speak to a specific date or are based on facts which have changed by transactions expressly contemplated or permitted by this Agreement). (c) NO DEFAULT. No Potential Default or Event of Default exists or would be caused by the making of such Credit Extension. (d) NO INJUNCTION OR RESTRAINING ORDER. No order, judgment, or decree of any Governmental Authority shall purport to enjoin or restrain any Credit Party from making such Credit Extension. (e) NO VIOLATION. The making of such Credit Extension shall not violate any Legal Requirement, including Regulation T, Regulation U, or Regulation X of the Board of Governors of the Federal Reserve System. (f) OTHER MATTERS. All matters related to such Credit Extension must be satisfactory to Required Lenders and their respective counsel in their reasonable determination, and upon the reasonable request of Administrative Agent, Borrower shall deliver to Administrative Agent evidence substantiating any of the matters in the Loan Documents which are necessary to enable Borrower to qualify for such Credit Extension. Each condition precedent in this Agreement is material to the transactions contemplated in this Agreement, and time is of the essence in respect of each thereof. Subject to the prior approval of Required Lenders, the Credit Parties may make a Credit Extension without all conditions being satisfied, but, to the extent permitted by all Legal Requirements, such Credit Extension shall not be deemed to be a waiver of the requirement that each such condition precedent be satisfied as a prerequisite for any subsequent Credit Extension, unless Required Lenders specifically waive each such item in writing. SECTION 7 REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to the Credit Parties as follows: 7.1 PURPOSE OF LETTER OF CREDIT FACILITY. Borrower will use (or will loan or contribute such proceeds to its Subsidiaries to so use) all proceeds of Credit Extensions for one or more of the following: (a) for lawful, corporate purposes; and (b) to satisfy its insurance bonding requirements. No Restricted Company is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any "margin stock" within the meaning of Regulation U. No part of the proceeds of any Credit Extension will be used, directly or indirectly, for a purpose which violates any Legal Requirement, including the provisions of Regulation T, U, or X (as enacted by the Board of Governors of the Federal Reserve System, as amended). "Margin Stock" (as defined in Regulation U) constitutes less than twenty-five percent (25%) of those assets of the Companies that are subject to any limitation on sale, pledge, or similar restrictions hereunder. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 34 7.2 EXISTENCE, GOOD STANDING, AUTHORITY, AND AUTHORIZATIONS. Each Restricted Company is duly organized, validly existing, and in good standing under the Legal Requirements of its jurisdiction of organization. Each Restricted Company is duly qualified to transact business and is in good standing in each jurisdiction where the nature and extent of its business and properties require the same, except where the failure to be so qualified could not constitute a Material Adverse Event. Each Restricted Company possesses all the Authorizations necessary or required in the conduct of its respective business(es), and the same are valid, binding, enforceable, and subsisting without any defaults thereunder or enforceable adverse limitations thereon and are not subject to any proceedings or claims opposing the issuance, development, or use thereof or contesting the validity thereof, except for any such circumstance that could not be a Material Adverse Event. 7.3 SUBSIDIARIES; CAPITAL STOCK. The Companies have no Subsidiaries except as disclosed on SCHEDULE 7.3, such schedule reflecting each Subsidiary's jurisdiction of incorporation (as supplemented and modified in writing from time to time to reflect any changes to such SCHEDULE as a result of transactions permitted or not prohibited by the Loan Documents) and each Unrestricted Subsidiary is designated as such. All of the outstanding Stock of each Subsidiary is duly authorized, validly issued, fully paid, and nonassessable and, except (a) for directors' qualifying shares, or (b) as otherwise set forth on SCHEDULE 7.3, are owned directly or indirectly by Borrower (as supplemented and modified in writing from time to time to reflect any changes to such SCHEDULE as a result of transactions permitted or not prohibited by the Loan Documents), free and clear, in the case of all Restricted Subsidiaries, of any Liens, restrictions (including restrictions on transfer), claims, or Rights of another Person except for restrictions on transfer imposed by securities Legal Requirements and general corporate Legal Requirements. 7.4 AUTHORIZATION AND CONTRAVENTION. The execution and delivery by Borrower of each Loan Document and the performance by Borrower of its obligations thereunder (a) are within the corporate power of Borrower, (b) have been duly authorized by all necessary corporate action on the part of Borrower, (c) require no action by or in respect of Authorizations of or filing with, any Governmental Authority, which action, Authorization, or filing has not been taken, received, or made on or prior to the Closing Date (or if later, the date of execution and delivery of such Loan Document) other than filing of the Loan Documents pursuant to securities Legal Requirements, (d) will not violate any provision of the Constituent Documents of any Company, (e) will not violate any provision of any Legal Requirement applicable to any Company, other than such violations which individually or collectively could not be a Material Adverse Event, (f) will not violate any material written or oral agreements, contracts, commitments, or understandings to which any Company is a party, other than such violations which could not be a Material Adverse Event, or (g) will not result in the creation or imposition of any Lien on any asset of any Company. 7.5 BINDING EFFECT. Upon execution and delivery by all parties thereto, each Loan Document to which Borrower is a party will constitute a legal, valid, and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as enforceability may be limited by applicable Debtor Relief Laws and general principles of equity. 7.6 FINANCIAL STATEMENTS. The Current Financials were prepared in accordance with GAAP and present fairly, in all material respects, the consolidated financial condition, results of operations, and cash flows of the Companies as of and for the portion of the fiscal year ending on the date or dates thereof (subject only to normal year-end audit adjustments). There were no material liabilities, direct or indirect, fixed or contingent, of the Companies as of the date or dates of the Current Financials which are required LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 35 under GAAP to be reflected therein or in the notes thereto, and are not so reflected. No Material Adverse Event has occurred from March 31, 2003 to the Closing Date. 7.7 LITIGATION, CLAIMS, INVESTIGATIONS. No Company is subject to, or aware of the threat of, any Litigation which is reasonably likely to be determined adversely to any Company, and, if so adversely determined, could (individually or collectively with other Litigation) be a Material Adverse Event. There are no outstanding orders or judgments for the payment of money in excess of $20,000,000 (individually or collectively) or any warrant of attachment, sequestration, or similar proceeding against the assets of any Company having a value (individually or collectively) of $20,000,000 or more which is not either (a) stayed on appeal, or (b) being contested in good faith by appropriate proceedings diligently conducted, and against which reserves or other provisions required by GAAP have been made. There are no formal complaints, suits, claims, investigations, or proceedings initiated at or by any Governmental Authority pending or, to the best knowledge of Borrower, threatened against any Company which is reasonably likely to be determined adversely and, if so adversely determined, could be a Material Adverse Event, nor any judgments, decrees, or orders of any Governmental Authority outstanding against any Company that could be a Material Adverse Event. 7.8 TAXES. All Tax returns of each Company required to be filed have been filed (or extensions have been granted) prior to delinquency, except for any such returns for which the failure to so file could not be a Material Adverse Event, and all Taxes imposed upon each Company which are due and payable have been paid prior to delinquency, other than Taxes (a) that are being contested in good faith by appropriate proceedings diligently conducted, and against which reserves or other provisions required by GAAP have been made, or (b) for which nonpayment thereof could not be a Material Adverse Event. 7.9 ENVIRONMENTAL MATTERS. No Company, after reasonable inquiry, (a) knows of any environmental condition or circumstance, such as the presence or Release of any Hazardous Materials, on any property presently or previously owned or leased by any Company or to which Hazardous Materials generated by any Company have been taken, that could be a Material Adverse Event, (b) knows of any violation by any Company of any Environmental Law that could be a Material Adverse Event, or (c) knows that any Company is under any obligation to remedy any violation of any Environmental Law or any Release or threatened Release of any Hazardous Materials that could be a Material Adverse Event. 7.10 EMPLOYEE BENEFIT PLANS. (a) No Employee Plan has incurred an accumulated funding deficiency, as defined in Section 302 of ERISA and Section 412 of the Tax Code, (b) neither Borrower nor any ERISA Affiliate has incurred a liability which is currently due and remains unpaid under Title IV of ERISA to the PBGC or to an Employee Plan in connection with any such Employee Plan, (c) neither Borrower nor any ERISA Affiliate has withdrawn in whole or in part from participation in a Multiemployer Plan, (d) Borrower has not engaged in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Tax Code), and (e) no Reportable Event has occurred which is reasonably likely to result in the termination of an Employee Plan if such accumulated funding deficiency, liability, withdrawal, prohibited transaction, or Reportable Event is reasonably likely to result individually or in the aggregate in liability on the part of Borrower in excess of $20,000,000. The present value of all benefit liabilities within the meaning of Title IV of ERISA under each Employee Plan (based on those actuarial assumptions used to fund such Employee Plan) did not, as of the last annual valuation date for the most recent plan year of such Employee Plan, exceed the value of the assets of such Employee Plan, and the total present values of all benefit liabilities within the meaning of Title IV of ERISA of all Employee Plans (based on the actuarial assumptions used to fund each such Employee Plan) did not, as of the respective annual valuation dates for the most recent plan year of each such Plan, exceed the value of the assets of all such Employee Plans. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 36 7.11 PROPERTIES; LIENS. Each Restricted Company has good and indefeasible title to all its property reflected on the Current Financials, except for property that (a) is obsolete, or (b) has been disposed of in the ordinary course of business or as otherwise permitted by the Loan Documents. Except for Permitted Liens, there is no Lien on any property of any Restricted Company. 7.12 GOVERNMENT REGULATIONS. No Company is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, or any other Legal Requirement (other than Regulations T, U, and X of the Board of Governors of the Federal Reserve System) which regulates the incurrence of Debt. 7.13 TRANSACTIONS WITH AFFILIATES. No Restricted Company is a party to a transaction with any of its Affiliates, other than transactions upon fair and reasonable terms not materially less favorable than such Restricted Company could obtain or could become entitled to in an arm's-length transaction with a Person that was not its Affiliate. 7.14 NO DEFAULT. No event has occurred and is continuing or would result from the incurring of obligations by Borrower under this Agreement or any other Loan Document which constitutes an Event of Default or a Potential Default. No Restricted Company is in default under or with respect to any material written or oral agreements, contracts, commitments, or understandings to which any Restricted Company is party which could, individually or together with all such defaults, be a Material Adverse Event. 7.15 SOLVENCY. At the time of each Credit Extension hereunder, each Restricted Company is (and after giving effect to the transactions contemplated by the Loan Documents and any incurrence of additional Debt, will be) Solvent. 7.16 COMPLIANCE WITH LEGAL REQUIREMENTS. No Company is in violation of any Legal Requirements (including Environmental Laws), other than such violations which could not, individually or collectively, be a Material Adverse Event. No Company has received notice alleging any non-compliance with any Legal Requirements, except for such non-compliance which no longer exists or which could not be a Material Adverse Event. 7.17 FULL DISCLOSURE. There is no material fact or condition relating to the Loan Documents or the financial condition, business, or property of any Company which could be a Material Adverse Event and which has not been disclosed, in writing, to Administrative Agent. All information heretofore furnished by any Company to any Credit Party in connection with the Loan Documents was, and all such information hereafter furnished by any Company to any Credit Party will be, true and accurate in all material respects or based on reasonable estimates on the date as of which such information is stated or certified. 7.18 SENIOR DEBT. The Obligation constitutes (and will constitute until payment in full and cancellation of all Commitments hereunder) Borrower's direct and unconditional obligation and ranks at least pari passu with other unsecured and unsubordinated Debt of Borrower. 7.19 TAX SHELTER REGULATIONS. Borrower does not intend to treat the Borrowings and related transactions as being a "reportable transaction" (within the meaning of Treasury Regulation Section 1.6011-4). In the event Borrower determines to take any action inconsistent with such intention, it will promptly notify Administrative Agent thereof. If Borrower so notifies Administrative Agent, LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 37 Borrower acknowledges that one or more Lenders may treat its Credit Extensions as part of a transaction that is subject to Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as applicable, will maintain the lists and other records required by such Treasury Regulation. SECTION 8 AFFIRMATIVE COVENANTS. Borrower covenants and agrees to perform, observe, and comply with each of the following covenants, from the Closing Date and so long thereafter as Lenders are committed to make any Credit Extensions under this Agreement and thereafter until the payment in full of all Principal Debt, all L/C Obligations, and payment in full of all interest, fees, and other amounts of the Obligation then due and owing, unless Borrower receives a prior written consent to the contrary by Administrative Agent as authorized by Required Lenders: 8.1 USE OF PROCEEDS. Borrower shall use the proceeds of all Credit Extensions only for the purposes represented herein. 8.2 BOOKS AND RECORDS. Borrower shall, and shall cause each other Company to, maintain books, records, and accounts necessary to prepare all Financial Statements delivered hereunder in accordance with GAAP. 8.3 ITEMS TO BE FURNISHED. Borrower shall cause the following to be furnished to Administrative Agent and each Lender: (a) ANNUAL FINANCIAL STATEMENTS. Promptly after preparation, and no later than one hundred and twenty (120) days after the last day of each fiscal year of Borrower, Financial Statements showing the consolidated and consolidating financial condition and results of operations of the Companies, as of, and for the year ended on, such day, each accompanied by: (i) with respect to the consolidated Financial Statements, the unqualified opinion of a firm of nationally-recognized independent certified public accountants, based on an audit using generally accepted auditing standards, that such Financial Statements were prepared in accordance with GAAP and present fairly the consolidated financial condition and results of operations of the Companies; (ii) any management letter delivered to Borrower prepared by such accounting firm with respect to such Financial Statements; and (iii) a Compliance Certificate. (b) PERIODIC FINANCIAL STATEMENTS. Promptly after preparation, and no later than sixty (60) days after the last day of each fiscal quarter of Borrower (other than the last fiscal quarter of any fiscal year), Financial Statements showing the consolidated and consolidating financial condition and results of operations calculated for the Companies for such fiscal quarter and for the period from the beginning of the then-current fiscal year to such last day, accompanied by (i) an internally prepared financial summary of the Companies and other information as Administrative Agent may reasonably request, and (ii) a Compliance Certificate with respect to such Financial Statements. (c) MANAGEMENT LETTERS. Promptly upon receipt thereof, copies of all auditor's annual management letters delivered to Borrower. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 38 (d) NOTICES OF LITIGATION, DEFAULTS, ETC. Notice, promptly after Borrower knows or has reason to know of (i) the existence and status of any Litigation which is reasonably likely to be determined adversely and, if so adversely determined, could be a Material Adverse Event, or of any order or judgment for the payment of money which (individually or collectively) is in excess of $20,000,000, or any warrant of attachment, sequestration, or similar proceeding against the assets of any Company having a value (individually or collectively) of $20,000,000 or more, (ii) any material change in any material fact or circumstance represented or warranted in any Loan Document, (iii) a Potential Default or Event of Default specifying the nature thereof and what action Borrower or any other Company has taken, is taking, or proposes to take with respect thereto; provided, however, that Borrower shall have no obligation to notify Administrative Agent or Lenders of a Potential Default under SECTION 9.12 unless Borrower has actual knowledge of such Potential Default and such Potential Default has continued, or Borrower reasonably expects such Potential Default to continue, for a period of five (5) consecutive days, (iv) the receipt by any Company of any notice from any Governmental Authority of the expiration without renewal, termination, material modification or suspension of, or institution of any proceedings to terminate, materially modify, or suspend, any Authorization which any Company is required to hold in order to operate its business in compliance with all Legal Requirements, other than such expirations, terminations, suspensions, or modifications which individually or in the aggregate would not be a Material Adverse Event, (v) any federal, state, or local statute, regulation, or ordinance or judicial or administrative order limiting or controlling the operations of any Company which has been issued or adopted hereafter and which is of material adverse importance or effect in relation to the operations of the Companies taken as a whole, (vi) the receipt by any Company of notice of any violation or alleged violation of any Environmental Law, which violation or alleged violation could individually or collectively with other such violations or allegations, reasonably be expected to be a Material Adverse Event, or (vii) (A) the occurrence of a Reportable Event that, alone or together with any other Reportable Event, could reasonably be expected to result in liability of any Company to the PBGC in an aggregate amount exceeding $20,000,000; (B) any expressed statement in writing on the part of the PBGC of its intention to terminate any Employee Plan or Plans; (C) Borrower's or an ERISA Affiliate's becoming obligated to file with the PBGC a notice of failure to make a required installment or other payment with respect to an Employee Plan; or (D) the receipt by Borrower or an ERISA Affiliate from the sponsor of a Multiemployer Plan of either a notice concerning the imposition of withdrawal liability in an aggregate amount exceeding $20,000,000 or of the impending termination or reorganization of such Multiemployer Plan. (e) SCHEDULE AND EXHIBIT UPDATES. Concurrently with the delivery of each Compliance Certificate, to the extent any of the information or disclosures provided on any of the SCHEDULES or EXHIBITS delivered pursuant to this Agreement or any Loan Documents has become outdated or incorrect in any material respect, such revised or updated SCHEDULES or EXHIBITS as may be necessary or appropriate to update or correct such information or disclosures. (f) SEC FILINGS. Promptly after the filing thereof, a true, correct, and complete copy of each Form 10-K, Form 10-Q, and Form 8-K filed by or on behalf of Borrower with the Securities and Exchange Commission. (g) CHANGE IN RATINGS. Promptly upon the receipt of notice thereof, and in any event within three (3) Business Days after any change in the Moody's Rating or the S & P Rating, notice of such change. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 39 (h) TAX SHELTER REGULATIONS. Promptly after Borrower has notified Administrative Agent of any intention by Borrower to treat the Borrowings and related transactions as being a "reportable transaction" (within the meaning of Treasury Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886 or any successor form. (i) OTHER INFORMATION. Promptly upon request therefor by any Credit Party, such information (not otherwise required to be furnished under the Loan Documents) respecting the business affairs, assets, and liabilities of the Companies, as reasonably requested. 8.4 INSPECTIONS. Borrower shall, and shall cause each other Company to, upon reasonable notice, allow any Credit Party (or its Representatives) (except in the case of Administrative Agent or its Representatives or unless an Event of Default then exists (which in either case shall be at the expense of Borrower), at the sole expense of such Credit Party) to inspect any of their properties, to review reports, files, and other records and to make and take away copies thereof, to conduct tests or investigations, and to discuss any of their affairs, conditions, and finances with other creditors, directors, officers, employees, other representatives, and independent accountants of the Companies, from time to time, during reasonable business hours. 8.5 TAXES. Borrower shall, and shall cause each other Company to (a) promptly pay when due any and all Taxes other than Taxes the failure to pay could not be a Material Adverse Event or the applicability, amount, or validity of which is being contested in good faith by appropriate proceedings diligently conducted, and against which reserves or other provisions required by GAAP have been made, and in respect of which levy and execution of any lien securing same have been and continue to be stayed, and (b) notify Administrative Agent immediately if the Internal Revenue Service or any other taxing authority commences or notifies any Company of its intention to commence an audit or investigation with respect to any Taxes of any kind due or alleged to be due from any Company to the extent that the failure to pay such Taxes could be a Material Adverse Event. 8.6 PAYMENT OF OBLIGATIONS. Borrower shall pay the Obligation in accordance with the terms and provisions of the Loan Documents. Borrower shall, and shall cause each Restricted Company to, promptly pay (or renew and extend) all of its material obligations as the same become due (unless such obligations (other than the Obligation) are being contested in good faith by appropriate proceedings). 8.7 MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS. Except as otherwise permitted by SECTION 9.10, Borrower shall, and shall cause each other Company to, at all times: (a) maintain its existence and good standing in the jurisdiction of its organization and its authority to transact business in all other jurisdictions where the failure to so maintain could be a Material Adverse Event; (b) maintain all licenses, permits, and franchises necessary for its business where the failure to so maintain could be a Material Adverse Event; (c) keep all of its assets which are useful in and necessary to its business in good working order and condition (ordinary wear and tear excepted) and make all necessary repairs thereto and replacements thereof where the failure to do so could be a Material Adverse Event; and (d) do all things necessary to obtain, renew, extend, and continue in effect all Authorizations which may at any time and from time to time be necessary for the Companies to operate their businesses in compliance with all Legal Requirements, where the failure to so obtain, renew, extend, or continue in effect could be a Material Adverse Event. 8.8 INSURANCE. Borrower shall, and shall cause each other Company to, maintain with financially sound, responsible, and reputable insurance companies or associations insurance reasonably acceptable to Administrative Agent concerning its properties and businesses against casualties and LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 40 contingencies and of types and in amounts (and with co-insurance and deductibles) as is customary in the case of similar businesses. At Administrative Agent's request, Borrower shall, and shall cause each other Company to, promptly deliver to Administrative Agent evidence of insurance for each policy of insurance and evidence of payment of all premiums. 8.9 PRESERVATION AND PROTECTION OF RIGHTS. Borrower shall, and shall cause each other Company to, perform such acts and duly authorize, execute, acknowledge, deliver, file, and record any additional agreements, documents, instruments, and certificates as Administrative Agent or Required Lenders may reasonably deem necessary or appropriate in order to preserve and protect the Rights of the Credit Parties under any Loan Document. 8.10 ENVIRONMENTAL LAWS. Borrower shall, and shall cause each other Company to (a) conduct its business so as to comply with all applicable Environmental Laws and shall promptly take corrective action to remedy any non-compliance with any Environmental Law, and (b) promptly investigate and remediate any known Release or threatened Release of any Hazardous Material on any property owned by any Company or at any facility operated by any Company to the extent and degree necessary to comply with all Environmental Laws, except, in the cases of CLAUSES (A) and (B), to the extent that the failure to do so could not be a Material Adverse Event. 8.11 COMPLIANCE WITH LEGAL REQUIREMENTS. Borrower shall, and shall cause each other Company to, comply with the provisions of all Legal Requirements applicable to it, and any material written or oral agreement, contract, commitment, or understanding to which it is a party, unless the failure to so comply alone, or when aggregated with all other such non-compliance, could not be a Material Adverse Event. 8.12 DESIGNATION OF UNRESTRICTED SUBSIDIARIES (a) Borrower shall have the option of designating any Restricted Subsidiary as an Unrestricted Subsidiary by giving prior written notice to the Administrative Agent and Lenders (as provided in the next sentence), provided that (i) such designation does not result in an Event of Default or a Potential Default, and (ii) the aggregate of (x) the Recourse Debt of such Restricted Subsidiary (determined as at the date of such designation), and (y) the aggregate Recourse Debt of all other Subsidiaries of Borrower, if any, which Borrower has previously designated as Unrestricted Subsidiaries (determined for each such other Subsidiary as at the date of designation of the new Unrestricted Subsidiary and determined for all such Subsidiaries (including the new Unrestricted Subsidiary) on a consolidated basis in accordance with GAAP) does not exceed the greater of (a) twenty-five percent (25%) of Consolidated Debt (determined as at the date of such designation) excluding the Restricted Subsidiary to be so designated, or (b) $500,000,000. Each notice of designation delivered pursuant to the preceding sentence shall be accompanied by the following documents, each certified by a Responsible Officer of Borrower and setting forth the relevant financial information as at a specified date not earlier than ten (10) days before the effective date of such designation: (X) a statement showing, in reasonable detail, the Tangible Net Worth, the total Debt, and the total assets of each Restricted Subsidiary the subject of such notice of designation; and (Y) a Compliance Certificate showing comparative figures for Borrower and the Restricted Subsidiaries before and after giving effect to such notice of designation and a statement demonstrating, in reasonable detail, compliance with CLAUSE (ii) of the first sentence of this SECTION 8.12(a). Any attempted designation by Borrower of a Restricted Subsidiary as an Unrestricted Subsidiary other than in compliance with the limitations contained in this SECTION 8.12(a) shall be ineffective as fully as if such attempted designation had never occurred. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 41 (b) Borrower shall have the option of designating any newly formed or acquired Subsidiary as an Unrestricted Subsidiary so long as such designation complies with the requirements of the proviso in the first sentence of SECTION 8.12(a) and Administrative Agent receives a list of newly formed or acquired Unrestricted Subsidiaries in connection with the delivery of each Compliance Certificate delivered to Administrative Agent pursuant to SECTION 8.3, which Compliance Certificate shall contain a statement that Borrower is in compliance with CLAUSE (ii) of the first sentence of SECTION 8.12(a) (for such purpose the reference to "Restricted Subsidiary" in CLAUSE (ii) of the first sentence of SECTION 8.12(a) shall be deemed to read "newly formed or acquired Subsidiary"). (c) If, as of any date, the aggregate Recourse Debt of the Unrestricted Subsidiaries (determined on a consolidated basis in accordance with GAAP) exceeds the greater of (a) twenty-five percent (25%) of Consolidated Debt as of such date or (b) $500,000,000, then Borrower shall designate an Unrestricted Subsidiary or Subsidiaries to be a Restricted Subsidiary such that the aggregate Recourse Debt of the remaining Unrestricted Subsidiaries does not exceed the greater of (a) twenty-five percent (25%) of Consolidated Debt (including the newly designated Restricted Subsidiary), or (b) $500,000,000. Borrower shall notify Administrative Agent and Lenders of any such designation not later than ten (10) days after the requirement to make such designation arises pursuant to the preceding sentence, accompanied by the following documents, each certified by a Responsible Officer of Borrower and setting forth the relevant financial information as at a specified date not earlier than ten (10) days before the effective date of such designation: (X) a statement showing, in reasonable detail, the Tangible Net Worth, the total Debt, and the total assets of the Subsidiary to be designated a Restricted Subsidiary, and (Y) a Compliance Certificate showing comparative figures for Borrower and the Restricted Subsidiaries before and after giving effect to such notice of designation and a statement demonstrating, in reasonable detail, compliance with this SECTION 8.12(c). SECTION 9 NEGATIVE COVENANTS. Borrower covenants and agrees to perform, observe, and comply with each of the following covenants, from the Closing Date and so long thereafter as Lenders are committed to make any Credit Extensions under this Agreement and thereafter until the payment in full of all Principal Debt, all L/C Obligations, and payment in full of all other interest, fees, and other amounts of the Obligation then due and owing, unless Borrower receives a prior written consent to the contrary by Administrative Agent as authorized by Required Lenders (or all Lenders, in the case of SECTION 9.6): 9.1 EMPLOYEE BENEFIT PLANS. Borrower shall not, and shall not permit any ERISA Affiliate to, directly or indirectly, engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Tax Code), and the Companies and their respective ERISA Affiliates shall not, directly or indirectly, (a) incur any "accumulated funding deficiency" as such term is defined in Section 302 of ERISA with respect to any Employee Plan, (b) permit any Employee Plan to be subject to involuntary termination proceedings pursuant to Title IV of ERISA, or (c) fully or partially withdraw from any Multiemployer Plan, if such prohibited transaction, accumulated funding deficiency, termination proceeding, or withdrawal would result individually or in the aggregate in liability on the part of Borrower in excess of $20,000,000. 9.2 LIENS. Borrower shall not, and shall not permit any other Restricted Company to, directly or indirectly, (a) create, incur, or suffer or permit to be created or incurred or to exist any Lien upon any Stock of any Restricted Subsidiary (other than Stock not owned by a Company), or (b) create, incur, or suffer or permit to be created or incurred or to exist any Lien upon any of its other assets, except in the case of CLAUSE (b): LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 42 (i) pledges or deposits made to secure payment of worker's compensation, or to participate in any fund in connection with worker's compensation, unemployment insurance, pensions, or other social security programs; (ii) good-faith pledges or deposits made to secure performance of bids, tenders, insurance or other contracts (other than for the repayment of borrowed money), or leases, or to secure statutory obligations, surety or appeal bonds, or indemnity, performance, or other similar bonds as all such Liens arise in the ordinary course of business of the Restricted Companies; (iii) encumbrances consisting of zoning restrictions, easements, or other restrictions on the use of real property, none of which impair in any material respect the use of such property by the Person in question in the operation of its business, and none of which is violated by existing or proposed structures or land use; (iv) Liens of landlords or of mortgagees of landlords, arising solely by operation of law, on fixtures and movable property located on premises leased in the ordinary course of business; (v) the following, so long as the applicability, amount, or validity of which is being contested in good faith by appropriate proceedings diligently conducted, and against which reserves or other provisions required by GAAP have been made, levy and execution thereon have been stayed and continue to be stayed, and they do not in the aggregate materially detract from the value of the property of the Person in question, or materially impair the use thereof in the operation of its business: (A) claims and Liens for Taxes (other than Liens relating to Environmental Laws or ERISA); (B) claims and Liens upon, and defects of title to, real or personal property, including any attachment of personal or real property or other legal process prior to adjudication of a dispute of the merits; and (C) claims and Liens of mechanics, materialmen, warehousemen, carriers, landlords, or other like Liens; (vi) Liens in favor of Administrative Agent with respect to Cash Collateralized Letters of Credit; (vii) Liens in favor of Borrower; (viii) Liens in assets or properties acquired with purchase money Debt securing only such purchase money Debt; (ix) Liens on any property or asset of any corporation or other entity existing at the time such corporation or other entity becomes a Subsidiary or is merged or consolidated with or into any Restricted Company or at the time such property or asset is acquired from such corporation or other entity, other than any Lien placed on any property or asset of such corporation or other entity in contemplation of such acquisition, merger, or consolidation; (x) Liens securing non-recourse Debt incurred in connection with industrial revenue or similar financing; (xi) Liens for current taxes not yet due; and LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 43 (xii) any renewals, extensions, or refinancings (but not increase in the principal amount thereof) of any of the foregoing Permitted Liens. 9.3 SUBSIDIARY INDEBTEDNESS; LIMITATIONS ON UPSTREAMING. Borrower shall not permit any Restricted Subsidiary to guaranty any Debt of Borrower unless such Restricted Subsidiary also executes a pari passu guaranty of the Obligation. Borrower shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly agree to any restriction or limitation on the making of dividends or distributions, the repaying of loans or advances or the transferring of assets from any Restricted Subsidiary to Borrower or any other Restricted Subsidiary, except (a) restrictions and limitations imposed by Legal Requirements, (b) customary restrictions and limitations contained in agreements relating to the sale of a Subsidiary or its assets that is permitted hereunder and (c) any other restrictions that could not reasonably be expected to cause a Material Adverse Event. 9.4 TRANSACTIONS WITH AFFILIATES. Borrower shall not, and shall not permit any other Restricted Company to, enter into any transaction with any of its Affiliates, other than transactions upon fair and reasonable terms not materially less favorable than such Restricted Company could obtain or could become entitled to in an arm's-length transaction with a Person that was not its Affiliate. 9.5 COMPLIANCE WITH DOCUMENTS. Borrower shall not, and shall not permit any other Company to, violate the provisions of its Constituent Documents, or modify, repeal, replace, or amend any provision of its Constituent Documents, if such action could materially and adversely affect the Rights of any Credit Party under this Agreement or the other Loan Documents. 9.6 ASSIGNMENT. Borrower shall not assign or transfer any of its Rights, duties, or obligations under any of the Loan Documents. 9.7 FISCAL YEAR AND ACCOUNTING METHODS. Borrower shall not, and shall not permit any other Restricted Company to, change its method of accounting, other than immaterial changes in methods or as required by GAAP. Borrower shall not, and shall not permit any other Restricted Company to, change its fiscal year for book accounting purposes, except upon the delivery of written notice to Administrative Agent. 9.8 GOVERNMENT REGULATIONS. Borrower shall not, and shall not permit any other Restricted Company to, conduct its business in such a way that it will become subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, or any other Legal Requirement (other than Regulations T, U, and X of the Board of Governors of the Federal Reserve System) which regulates the incurrence of Debt. 9.9 SALE OF ASSETS. Borrower shall not, and shall not permit any other Restricted Company to, sell, assign, transfer, or otherwise dispose of all or substantially all of its assets, other than (a) sales, assignments, transfers, or other dispositions of assets by a Restricted Subsidiary to Borrower or to another Restricted Subsidiary and (b) sales, assignments, transfers, or other dispositions of assets (to Persons other than Borrower or a Restricted Subsidiary) of Restricted Subsidiaries (i) having an aggregate fair market value not to exceed $100,000,000 in any fiscal year, or (ii) in the ordinary course of business. 9.10 MERGERS AND DISSOLUTIONS; SALE OF CAPITAL STOCK. Borrower shall not, and shall not permit any other Restricted Company to, directly or indirectly, merge or consolidate with any other Person, other than (a) mergers or consolidations involving Borrower if Borrower is the surviving entity, and (b) mergers or consolidations among Wholly-owned Companies, in each case so long as no Potential LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 44 Default or Event of Default exists or would result therefrom; provided that in any merger involving Restricted Company, a Restricted Company must be the surviving entity. Borrower shall not, and shall not permit any other Restricted Company to, liquidate, wind up, or dissolve (or suffer any liquidation or dissolution), other than liquidations, wind ups, or dissolutions incident to mergers or consolidations permitted under this SECTION 9.10. Borrower shall not, and shall not permit any other Company to, sell, assign, lease, transfer, or otherwise dispose of the Stock of any other Restricted Company, other than sales, assignments, leases, transfers, or other such dispositions to another Company. Notwithstanding the foregoing, nothing in this Agreement shall prohibit any mergers, consolidations, liquidations, wind ups, or dissolutions of any Subsidiary or the sale, assignment, lease, transfer, or other disposal of the Stock of any Subsidiary so long as (i) no Potential Default or Event of Default exists or would result from such merger, consolidation, liquidation, wind up, or dissolution or such sale, assignment, lease, transfer, or other disposal of such Stock, (ii) after giving effect thereto, the character of the business of the Restricted Companies, on a consolidated basis, will not be materially changed, and (iii) the assets, annual revenues, and annual net income, in each case determined in accordance with GAAP, of the affected Subsidiary does not exceed $100,000,000. 9.11 NEW BUSINESS. Borrower shall not, and shall not permit any other Restricted Company to, directly or indirectly, permit or suffer to exist any material change (on a consolidated basis) in the type of businesses in which it is engaged from the businesses (on a consolidated basis) of the Companies as conducted on the Closing Date. 9.12 FINANCIAL COVENANTS. (a) LEVERAGE RATIO. Borrower shall not permit the Leverage Ratio (expressed as a percent), as of the last day of any fiscal quarter of Borrower, to be greater than fifty-five percent (55%). (b) INTEREST COVERAGE. Borrower shall not permit the Interest Coverage Ratio, as of the last day of any fiscal quarter of Borrower, to be less than 2.0 to 1.0. (c) MINIMUM TANGIBLE NET WORTH. Borrower shall not permit Consolidated Tangible Net Worth, as of any date, to be less than the sum of (a) $1,700,000,000, plus (b) fifty percent (50%) of the amount of Net Proceeds from any Equity Issuance subsequent to March 31, 2003, plus (c) fifty percent (50%) of Cumulative Consolidated Net Income. SECTION 10 DEFAULT. The term "EVENT OF DEFAULT" means the occurrence of any one or more of the following events: 10.1 PAYMENT OF OBLIGATION. The failure or refusal of Borrower to pay (a) all or any part of the Principal Debt or any L/C Obligation when the same becomes due (whether by its terms, by acceleration, or as otherwise provided in the Loan Documents), or (b) any other part of the Obligation within five (5) calendar days after the due date, or (c) the indemnification and reimbursement obligations provided for in the Loan Documents after demand therefor. 10.2 COVENANTS. The failure or refusal of Borrower (and, if applicable, any other Company) to punctually and properly perform, observe, and comply with: (a) any covenant, agreement, or condition contained in SECTION 8.3 (other than SECTIONS 8.3(e), 8.3(f), and 8.3(g)); or LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 45 (b) any covenant, agreement, or condition contained in SECTIONS 8.3(e), 8.3(f), 8.3(g), 8.12, or 9, and such failure or refusal continues unremedied for ten (10) days after the earlier of (i) notice given by Administrative Agent to Borrower of such failure or refusal, or (ii) Borrower's actual knowledge of such failure or refusal; or (c) any other covenant, agreement, or condition contained in any Loan Document (other than the covenants to pay the Obligation and the covenants in CLAUSE (a) or (b) preceding) and such failure or refusal continues unremedied for thirty (30) days after the earlier of (i) notice given by Administrative Agent to Borrower of such failure or refusal, or (ii) Borrower's actual knowledge of such failure or refusal. 10.3 DEBTOR RELIEF. Any Restricted Company (a) shall not be Solvent, (b) fails to pay its Debts generally as they become due, (c) makes an assignment for the benefit of creditors, (d) voluntarily seeks, consents to, or acquiesces in the benefit of any Debtor Relief Law, other than as a creditor or claimant, or (e) becomes a party to or is made the subject of any proceeding provided for by any Debtor Relief Law, other than as a creditor or claimant, that could suspend or otherwise adversely affect the Rights of any Credit Party granted in the Loan Documents (unless, in the event such proceeding is involuntary, the petition instituting same is dismissed within sixty (60) days after its filing without the entry of an order for relief or the appointment of a receiver) or an order of relief or judgment is entered in, or a receiver or similar officer is appointed pursuant to, any such proceeding. 10.4 JUDGMENTS AND ATTACHMENTS. Any Restricted Company fails, within sixty (60) days after entry, to pay, bond, or otherwise discharge any judgment or order for the payment of money in excess of $20,000,000 (individually or collectively) or any warrant of attachment, sequestration, or similar proceeding against any Restricted Company's assets having a value (individually or collectively) of $20,000,000, in each case, which is not stayed on appeal. 10.5 GOVERNMENT ACTION. (a) A final non-appealable order is issued by any Governmental Authority, including, but not limited to, the United States Justice Department, seeking to cause any Restricted Company to divest a significant portion of its assets pursuant to any antitrust, restraint of trade, unfair competition, industry regulation, or similar Legal Requirements; or (b) Any Governmental Authority shall condemn, seize, or otherwise appropriate, or take custody or control of all or any substantial portion of the assets of any Restricted Company. 10.6 MISREPRESENTATION. Any representation or warranty made by Borrower contained in any Loan Document shall at any time prove to have been incorrect in any material respect when made. 10.7 CHANGE OF CONTROL. A Change in Control of Borrower shall occur. 10.8 DEFAULT UNDER OTHER DEBT AND AGREEMENTS. (a) Any Restricted Company fails to make any payments when due (after lapse of any applicable grace periods) with respect to any Debt of such Restricted Company (other than the Obligation) in excess (individually or collectively) of $20,000,000; and LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 46 (b) Any default exists under any agreement (other than the Loan Documents) to which any Restricted Company is a party, which has not been waived by the parties thereto, the effect of which has been to cause, or to permit any Person to cause, an amount of Debt of such Restricted Company in excess (individually or collectively) of $20,000,000 to become due and payable by such Restricted Company (whether by acceleration or by its terms). 10.9 EMPLOYEE BENEFIT PLANS. (a) A "Reportable Event" or "Reportable Events," or a failure to make a required installment or other payment (within the meaning of Section 412(n)(1) of the Tax Code), shall have occurred with respect to any Employee Plan or Plans that is reasonably expected to result in liability of Borrower to the PBGC or to an Employee Plan in an aggregate amount exceeding $20,000,000; or (b) Borrower or any ERISA Affiliate has provided to any affected party a sixty (60) day notice of intent to terminate an Employee Plan pursuant to a distress termination in accordance with Section 4041(c) of ERISA if the liability reasonably expected to be incurred as a result of such termination will exceed $20,000,000; or (c) A trustee shall be appointed by a United States district court to administer any such Employee Plan pursuant to Section 4042(b) of ERISA; or (d) The PBGC shall institute proceedings (including giving notice of intent thereof) to terminate any such Employee Plan if such termination proceeding is reasonably expected to result in liability on the part of Borrower in excess of $20,000,000; or (e) (i) Borrower or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred withdrawal liability (within the meaning of Section 4201 of ERISA) to such Multiemployer Plan, (ii) Borrower or such ERISA Affiliate does not have reasonable grounds for contesting such withdrawal liability or is not contesting such withdrawal liability in a timely and appropriate manner and (iii) the amount of such withdrawal liability specified in such notice, when aggregated with all other amounts required to be paid to Multiemployer Plans in connection with withdrawal liabilities (determined as of the date or dates of such notification), exceeds $20,000,000; or (f) Borrower or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, if solely as a result of such reorganization or termination the aggregate annual contributions of Borrower and its ERISA Affiliates to all Multiemployer Plans that are then in reorganization or have been or are being terminated have been or will be increased over the amounts required to be contributed to such Multiemployer Plans for their most recently completed plan years by an amount exceeding $20,000,000. 10.10 VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS. Any Loan Document shall, at any time after its execution and delivery and for any reason, cease to be in full force and effect in any material respect or be declared to be null and void (other than in accordance with the terms hereof or thereof) or the validity or enforceability thereof be contested by Borrower or Borrower shall deny in writing that it has any or any further liability or obligations under any Loan Document to which it is a party. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 47 SECTION 11 RIGHTS AND REMEDIES. 11.1 REMEDIES UPON DEFAULT. (a) If an Event of Default exists under SECTION 10.3(C), 10.3(D), or 10.3(e) then (i) the commitment to extend credit hereunder shall automatically terminate (ii) the entire unpaid balance of the Obligation shall automatically become due and payable, and (iii) Borrower shall automatically be required to Cash Collateralize the then-undrawn amount of outstanding Letters of Credit (in an amount equal to the outstanding amount thereof), in each case without any action or notice of any kind whatsoever. (b) If any Event of Default exists, then Administrative Agent may (and, subject to the terms of SECTION 12, shall upon the request of Required Lenders) or Required Lenders may, do any one or more of the following: (i) if the maturity of the Obligation has not already been accelerated under SECTION 11.1(a), then declare the entire unpaid balance of the Obligation, or any part thereof, immediately due and payable, whereupon it shall be due and payable; (ii) terminate the commitments of Lenders to extend credit hereunder; (iii) reduce any claim to judgment; (iv) to the extent permitted by all Legal Requirements, exercise (or request each Lender to, and each Lender shall be entitled to, exercise) the Rights of offset or banker's Lien against the interest of any Company in and to every account and other property of any Company which are in the possession of any Credit Party to the extent of the full amount of the Obligation (to the extent permitted by all Legal Requirements, Borrower being deemed directly obligated to each Credit Party in the full amount of the Obligation for such purposes); (v) require that Borrower Cash Collateralize the then-undrawn amount of outstanding Letters of Credit (in an amount equal to the outstanding amount thereof); and (vi) exercise any and all other legal or equitable Rights afforded by the Loan Documents, the Legal Requirements of the State of Texas, or any other applicable jurisdiction as Administrative Agent shall deem appropriate, or otherwise, including, but not limited to, the Right to bring suit or other proceedings before any Governmental Authority either for specific performance of any covenant or condition contained in any of the Loan Documents or in aid of the exercise of any Right granted to any Credit Party in any of the Loan Documents; provided that each Lender reserves the right to bring suit to recover Obligations owing to such Lender after such Obligations become due and payable in the event Administrative Agent or Required Lenders do not do so on its behalf. 11.2 BORROWER WAIVERS. To the extent permitted by all Legal Requirements, Borrower hereby waives presentment and demand for payment, protest, notice of intention to accelerate, notice of acceleration, and notice of protest and nonpayment, and agrees that its liability with respect to the Obligation (or any part thereof) shall not be affected by any renewal or extension in the time of payment of the Obligation (or any part thereof), by any indulgence, or by any release or change in any security for the payment of the Obligation (or any part thereof). 11.3 PERFORMANCE BY ADMINISTRATIVE AGENT. If any covenant, duty, or agreement of Borrower is not performed in accordance with the terms of the Loan Documents, while an Event of Default exists, then Administrative Agent may, at its option (but subject to the approval of Required Lenders), perform or attempt to perform such covenant, duty, or agreement on behalf of Borrower. In such event, any amount expended by Administrative Agent in such performance or attempted performance shall be payable by Borrower to Administrative Agent on demand, shall become part of the Obligation, and shall bear interest at the Default Rate from the date of such expenditure by Administrative Agent until paid. Notwithstanding the foregoing, it is expressly understood that Administrative Agent LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 48 does not assume, and shall never have, except by its express written consent, any liability or responsibility for the performance of any covenant, duty, or agreement of Borrower. 11.4 DELEGATION OF DUTIES AND RIGHTS. The Credit Parties may perform any of their duties or exercise any of their Rights under the Loan Documents by or through their respective Representatives. 11.5 NOT IN CONTROL. Nothing in any Loan Document shall, or shall be deemed to (a) give any Credit Party the Right to exercise control over the assets (including real property), affairs, or management of any Company, (b) preclude or interfere with compliance by any Company with any Legal Requirement, or (c) require any act or omission by any Company that may be harmful to Persons or property. Any "Material Adverse Event" or other materiality qualifier in any representation, warranty, covenant, or other provision of any Loan Document is included for credit documentation purposes only and shall not, and shall not be deemed to, mean that any Credit Party acquiesces in any non-compliance by any Company with any Legal Requirement or document, or that any Credit Party does not expect any Company to promptly, diligently, and continuously carry out all appropriate removal, remediation, and termination activities required or appropriate in accordance with all Environmental Laws. The Credit Parties have no fiduciary relationship with or fiduciary duty to any Company arising out of or in connection with the Loan Documents, and the relationship between the Credit Parties, on the one hand, and the Companies, on the other hand, in connection with the Loan Documents is solely that of debtor and creditor. The power of the Credit Parties under the Loan Documents is limited to the Rights provided in the Loan Documents, which Rights exist solely to assure payment and performance of the Obligation and may be exercised in a manner calculated by the Credit Parties in their respective good faith business judgment. 11.6 COURSE OF DEALING. The acceptance by any Credit Party at any time and from time to time of partial payment on the Obligation shall not be deemed to be a waiver of any Event of Default then existing. No waiver by any Credit Party of any Event of Default shall be deemed to be a waiver of any other then-existing or subsequent Event of Default. No delay or omission by any Credit Party in exercising any Right under the Loan Documents shall impair such Right or be construed as a waiver thereof or any acquiescence therein, nor shall any single or partial exercise of any such Right preclude other or further exercise thereof, or the exercise of any other Right under the Loan Documents or otherwise. 11.7 CUMULATIVE RIGHTS. All Rights available to the Credit Parties under the Loan Documents are cumulative of and in addition to all other Rights granted to the Credit Parties at law or in equity, whether or not the Obligation is due and payable and whether or not the Credit Parties have instituted any suit for collection, foreclosure, or other action in connection with the Loan Documents. 11.8 APPLICATION OF PROCEEDS. Any and all proceeds ever received by any Credit Party from the exercise of any Rights pertaining to the Obligation shall be applied to the Obligation in the order and manner set forth in SECTION 3.7. 11.9 CERTAIN PROCEEDINGS. Borrower will promptly execute and deliver, or cause the execution and delivery of, all applications, certificates, instruments, registration statements, and all other documents and papers any Credit Party may reasonably request in connection with the obtaining of any consent, approval, registration, qualification, permit, license, or Authorization of any Governmental Authority or other Person necessary or appropriate for the effective exercise of any Rights under the Loan Documents. Because Borrower agrees that the Credit Parties' remedies at law for failure of Borrower to comply with the provisions of this SECTION 11.9 would be inadequate and that such failure would not be LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 49 adequately compensable in damages, Borrower agrees that the covenants of this SECTION 11.9 may be specifically enforced. 11.10 EXPENSES; INDEMNIFICATION. (a) Borrower agrees (i) to pay or reimburse Administrative Agent for all reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation, negotiation, and execution of this Agreement and the other Loan Documents and any amendment, waiver, consent, or other modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs, and (ii) to pay or reimburse Administrative Agent and each Lender for all costs and expenses incurred in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any "workout" or restructuring in respect of the Obligation and during any legal proceeding, including any proceeding under any Debtor Relief Law), including all Attorney Costs. The foregoing costs and expenses shall include all search, filing, recording, title insurance, and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by Administrative Agent and the cost of independent public accountants and other outside experts retained by the Administrative Agent or any Lender. All amounts due under this SECTION 11.10(a) shall be payable within ten (10) Business Days after demand therefor. The agreements in this SECTION 11.10(a) shall survive the termination of the Commitments and repayment of the Obligation. (b) Whether or not the transactions contemplated hereby are consummated, Borrower shall indemnify and hold harmless each Agent-Related Person, each Lender and their respective Affiliates, directors, officers, employees, counsel, agents, and attorneys-in-fact (collectively, "INDEMNITEES") from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses, and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (i) the execution, delivery, enforcement, performance or administration of any Loan Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (ii) any Commitment, Borrowing, Letter of Credit, or the use or proposed use of the proceeds therefrom, or (iii) any actual or alleged presence or release of Hazardous Materials on or from any property currently or formerly owned or operated by Borrower or any Subsidiary, or any liability under Environmental Law related in any way to Borrower or any Subsidiary, or (iv) any actual or prospective claim, litigation, investigation, or proceeding relating to any of the foregoing, whether based on contract, tort, or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation, or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the "INDEMNIFIED LIABILITIES"), IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses, or disbursements are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith, or willful misconduct of such Indemnitee or such Indemnitee's willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. No Indemnitee shall be liable for any damages arising from the use by others of any information or other LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 50 materials obtained through IntraLinks or other similar information transmission systems in connection with this Agreement, nor shall Borrower or any Indemnitee have any liability for any indirect, punitive, or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date). All amounts due under this SECTION 11.10(B) shall be payable within ten (10) Business Days after demand therefor. The agreements in this SECTION 11.10(B) shall survive the resignation of Administrative Agent, the replacement of any Lender, the termination of the Commitments, and the repayment, satisfaction or discharge of the Obligation. SECTION 12 ADMINISTRATIVE AGENT. 12.1 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT. (a) Each Lender hereby irrevocably appoints, designates, and authorizes Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall Administrative Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Administrative Agent. Without limiting the generality of the foregoing sentence, the use of the term "agent" herein and in the other Loan Documents with reference to Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. (b) Each L/C Issuer shall act on behalf of Lenders with respect to the Letters of Credit issued by it and the Letter of Credit Applications associated therewith, and such L/C Issuer shall have all of the benefits and immunities (i) provided to the Administrative Agent in this SECTION 12 with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and the Letter of Credit Applications pertaining to such Letters of Credit as fully as if the term "Administrative Agent" as used in this SECTION 12 and in the definition of "Agent-Related Person" included such L/C Issuer with respect to such acts or omissions, and (ii) as additionally provided herein with respect to such L/C Issuer. 12.2 DELEGATION OF DUTIES. Administrative Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees, or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct. 12.3 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein), or (b) be responsible in any manner to any Lender or participant for any recital, statement, representation or warranty made by any Company or any officer thereof, contained herein or in any other Loan Document, or in any certificate, LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 51 report, statement, or other document referred to or provided for in, or received by Administrative Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability, or sufficiency of this Agreement or any other Loan Document, or for any failure of any Company or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books, or records of any Company or any Affiliate thereof. 12.4 RELIANCE BY ADMINISTRATIVE AGENT. (a) Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message, statement, or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Company), independent accountants and other experts selected by Administrative Agent. Administrative Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders (or such greater number of Lenders as may be expressly required hereby in any instance) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders. (b) For purposes of determining compliance with the conditions specified in SECTION 6.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto. 12.5 NOTICE OF EVENT OF DEFAULT. Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of Default, except with respect to defaults in the payment of principal, interest, and fees required to be paid to Administrative Agent for the account of the Lenders, unless Administrative Agent shall have received written notice from a Lender or Borrower referring to this Agreement, describing such Event of Default and stating that such notice is a "notice of default." Administrative Agent will notify Lenders of its receipt of any such notice and of its giving of notice to Borrower pursuant to SECTIONS 10.2(b) or (c). Administrative Agent shall take such action with respect to such Event of Default as may be directed by the Required Lenders in accordance with SECTION 10; provided, however, that unless and until Administrative Agent has received any such direction, Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default as it shall deem advisable or in the best interest of the Lenders. 12.6 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT. Each Lender acknowledges that no Agent-Related Person has made any representation or warranty to it, and that no act by Administrative Agent hereafter taken, including any consent to and acceptance of any assignment or LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 52 review of the affairs of any Company or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender as to any matter, including whether Agent-Related Persons have disclosed material information in their possession. Each Lender represents to Administrative Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial, and other condition and creditworthiness of the Companies, and all applicable bank or other regulatory Legal Requirements relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrower hereunder. Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals, and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial, and other condition and creditworthiness of Borrower. Except for notices, reports, and other documents expressly required to be furnished to Lenders by Administrative Agent herein, Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial, and other condition or creditworthiness of any Companies or any of their respective Affiliates which may come into the possession of any Agent-Related Person. 12.7 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the transactions contemplated hereby are consummated, Lenders shall indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of any Company and without limiting the obligation of any Company to do so), Pro Rata, and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by it; provided, however, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities to the extent determined in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from such Agent-Related Person's own gross negligence or willful misconduct; provided, however, that no action taken in accordance with the directions of the Required Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this SECTION 12.7. Without limitation of the foregoing, each Lender shall reimburse Administrative Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that Administrative Agent is not reimbursed for such expenses by or on behalf of Borrower. The undertaking in this SECTION 12.7 shall survive termination of the Aggregate Commitments, the payment of the Obligation, and the resignation of Administrative Agent. 12.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Administrative Agent and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with each Company and its respective Affiliates as though Administrative Agent were not Administrative Agent and without notice to or consent of Lenders. Lenders acknowledge that, pursuant to such activities, Administrative Agent or its Affiliates may receive information regarding any Company or its Affiliates (including information that may be subject to confidentiality obligations in favor of such Company or such Affiliate) and acknowledge that Administrative Agent shall be under no obligation to provide such information to them. With respect to Borrowings, Administrative Agent shall have the same rights and powers under this Agreement as any other Lender and may exercise such rights and powers as though it LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 53 were not Administrative Agent, and the terms "Lender" and "Lenders" include Administrative Agent in its individual capacity. 12.9 SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign as Administrative Agent upon thirty (30) days' notice to Lenders. If Administrative Agent resigns under this Agreement, the Required Lenders shall appoint from among Lenders a successor administrative agent for Lenders, which successor administrative agent shall be consented to by Borrower at all times other than during the existence of an Event of Default (which consent of Borrower shall not be unreasonably withheld or delayed). If no successor administrative agent is appointed prior to the effective date of the resignation of Administrative Agent, Administrative Agent may appoint, after consulting with Lenders and with the consent of Borrower at all times other than during the existence of an Event of Default (which consent of Borrower shall not be unreasonably withheld or delayed), a successor administrative agent from among Lenders. Upon the acceptance of its appointment as successor administrative agent hereunder, the Person acting as such successor administrative agent shall succeed to all the rights, powers, and duties of the retiring Administrative Agent, and the term "Administrative Agent" shall mean such successor administrative agent, and the retiring Administrative Agent's appointment, powers, and duties as Administrative Agent shall be terminated without any further act or deed on the part of any other Lender. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this SECTION 12 and SECTION 11.10 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor administrative agent has accepted appointment as Administrative Agent by the date which is thirty (30) days following a retiring Administrative Agent's notice of resignation, the retiring Administrative Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. 12.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIMS. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition, or other judicial proceeding relative to any Company, Administrative Agent (irrespective of whether the principal of any Borrowing shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether Administrative Agent shall have made any demand on Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise: (a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Borrowings and any other Obligation that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of Lenders and Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements, and advances of Lenders and Administrative Agent and their respective agents and counsel and all other amounts due Lenders and Administrative Agent under SECTIONS 5 and 11.10) allowed in such judicial proceeding; and (b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due Administrative Agent under SECTIONS 5 and 11.10. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 54 Nothing contained herein shall be deemed to authorize Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment, or composition affecting the Obligation or the rights of any Lender or to authorize Administrative Agent to vote in respect of the claim of any Lender in any such proceeding. 12.11 OTHER AGENT; ARRANGERS; AND MANAGERS. No Lender or other Persons identified on the facing page or signature pages of this Agreement as a "syndication agent," "documentation agent," "book manager," "arranger," or "lead arranger" shall have any right, power, obligation, liability, responsibility, or duty under this Agreement other than, in the case of such Lenders, those applicable to all Lenders as such. Without limiting the foregoing, no Lender or other Person so identified shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any Lenders or other Persons so identified in deciding to enter into this Agreement or in taking or not taking action hereunder. SECTION 13 MISCELLANEOUS. 13.1 HEADINGS. The headings, captions, and arrangements used in any of the Loan Documents are, unless specified otherwise, for convenience only and shall not be deemed to limit, amplify, or modify the terms of the Loan Documents, nor affect the meaning thereof. 13.2 NONBUSINESS DAYS. In any case where any payment or action is due under any Loan Document on a day which is not a Business Day, such payment or action may be delayed until the next-succeeding Business Day, but interest and fees shall continue to accrue in respect of any payment to which it is applicable until such payment is in fact made; provided that if, in the case of any such payment in respect of a Eurodollar Borrowing, the next-succeeding Business Day is in the next calendar month, then such payment shall be made on the next-preceding Business Day. 13.3 COMMUNICATIONS. (a) GENERAL. Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission). All such written notices shall be mailed, faxed, or delivered to the applicable address, facsimile number, or (subject to SECTION 13.3(c) below) electronic mail address, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number specified for such Person on SCHEDULE 2.1 or to such other address, facsimile number, electronic mail address, or telephone number as shall be designated by such party in a notice to the other parties. All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four (4) Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of SECTION 13.3(c) below), when delivered; provided, however, that notices and other communications to Administrative Agent or any L/C Issuer pursuant to SECTION 2 shall not be effective until actually received by Administrative Agent or such L/C Issuer. In no event shall a voicemail message be effective as a notice, communication or confirmation hereunder. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 55 (b) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. Loan Documents may be transmitted and/or signed by facsimile. The effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and effect as manually-signed originals and shall be binding on all Companies, Administrative Agent, and Lenders. Administrative Agent may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature. (c) LIMITED USE OF ELECTRONIC MAIL. Electronic mail and Internet and intranet websites may be used only to distribute routine communications and to distribute Loan Documents for execution by the parties thereto, and may not be used for any other purpose. (d) RELIANCE BY ADMINISTRATIVE AGENT AND LENDERS. Administrative Agent and Lenders shall be entitled to rely and act upon any notices (including telephonic Notices of Borrowing) purportedly given by or on behalf of Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. Borrower shall indemnify each Agent-Related Person and each Lender from all losses, costs, expenses, and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of Borrower. All telephonic notices to and other communications with Administrative Agent may be recorded by Administrative Agent, and each of the parties hereto hereby consents to such recording. 13.4 FORM AND NUMBER OF DOCUMENTS. Each agreement, document, instrument, or other writing to be furnished under any provision of this Agreement must be in form and substance and in such number of counterparts as may be reasonably satisfactory to Administrative Agent and its counsel. 13.5 EXCEPTIONS TO COVENANTS. Borrower shall not, and shall not permit any other Company to, take any action or fail to take any action which is permitted as an exception to any of the covenants contained in any Loan Document if such action or omission would result in the breach of any other covenant contained in any of the Loan Documents. 13.6 SURVIVAL. All covenants, agreements, undertakings, representations, and warranties made in any of the Loan Documents shall survive the execution and delivery thereof and all closings under the Loan Documents. All such representations and warranties have been or will be relied upon by Administrative Agent and each Lender regardless of any investigation made by Administrative Agent or any Lender or on their behalf and notwithstanding that Administrative Agent or any Lender may have had notice or knowledge of any Potential Default or Event of Default at the time of any Borrowing and shall continue in full force and effect as long as any Borrowing or other Obligation is outstanding. All rights of, and provisions relating to, reimbursement and indemnification of any Credit Party shall survive termination of this Agreement and payment in full of the Obligation. 13.7 GOVERNING LAW. THE LEGAL REQUIREMENTS OF THE STATE OF TEXAS AND OF THE UNITED STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF THE PARTIES TO THE LOAN DOCUMENTS AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION OF THE LOAN DOCUMENTS. 13.8 INVALID PROVISIONS. If any provision in any Loan Document is held to be illegal, invalid, or unenforceable, then such provision shall be fully severable; the appropriate Loan Document shall be construed and enforced as if such provision had never comprised a part thereof; and the remaining LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 56 provisions thereof shall remain in full force and effect and shall not be affected by such provision or by its severance therefrom. Each Credit Party and each Company party to such Loan Document agree to negotiate, in good faith, the terms of a replacement provision as similar to the severed provision as may be possible and be legal, valid, and enforceable. 13.9 ENTIRETY. THE RIGHTS AND OBLIGATIONS OF BORROWER AND THE CREDIT PARTIES SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN SUCH PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS. THIS AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY BORROWER AND/OR ANY CREDIT PARTY (TOGETHER WITH ALL COMMITMENT LETTERS AND FEE LETTERS AS THEY RELATED TO THE PAYMENT OF FEES AFTER THE CLOSING DATE)REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 13.10 JURISDICTION; VENUE; SERVICE OF PROCESS; JURY TRIAL. EACH PARTY HERETO, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, HEREBY (A) IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN TEXAS, AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION BY SERVICE OF PROCESS AS PROVIDED BY TEXAS LEGAL REQUIREMENTS, (B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY ALL LEGAL REQUIREMENTS, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION BROUGHT IN ANY SUCH COURT, (C) IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (D) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH LITIGATION BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, AT ITS ADDRESS SET FORTH HEREIN, (E) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY HERETO ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE OBLIGATION SHALL BE BY COURT TRIAL WITHOUT JURY, AND (F) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY ALL LEGAL REQUIREMENTS, ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT, THE TRANSACTIONS CONTEMPLATED THEREBY, OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREINAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR COPY OF THIS SECTION 13.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. The scope of each of the foregoing waivers is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including contract claims, tort claims, breach of duty claims, and all other common law and statutory claims. Borrower and each other party to this Agreement acknowledge that this waiver is a material inducement to the agreement of each party hereto to enter into a business relationship, that each has already relied on this waiver in entering into this Agreement, and each will continue to rely on each of such waivers in related future dealings. Borrower and each other party to this Agreement warrant and LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 57 represent that they have reviewed these waivers with their legal counsel, and that they knowingly and voluntarily agree to each such waiver following consultation with legal counsel. THE WAIVERS IN THIS SECTION 13.10 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS, AND REPLACEMENTS TO OR OF THIS OR ANY OTHER Loan Document. In the event of Litigation, this Agreement may be filed as a written consent to a trial by the court. 13.11 AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS. (a) Except as otherwise specifically provided, (i) this Agreement may only be amended, modified or waived by an instrument in writing executed jointly by Borrower and Required Lenders, and, in the case of any matter affecting Administrative Agent by Administrative Agent, and may only be supplemented by documents delivered or to be delivered in accordance with the express terms hereof, and (ii) the other Loan Documents may only be the subject of an amendment, modification, or waiver if Borrower and Required Lenders, and, in the case of any matter affecting Administrative Agent (except as set forth above), Administrative Agent, have approved same; provided that no such amendment or waiver shall, unless signed by each Lender directly affected thereby, (i) increase the Commitment of such Lender, (ii) reduce the principal of or rate of interest on any Unreimbursed Amount or Borrowing or any fees or other amounts payable hereunder, (iii) postpone any date fixed for the payment of any scheduled installment of principal of or interest on any Unreimbursed Amount or Borrowing or any fees or other amounts payable hereunder or for termination of any of the Total Commitment, (iv) change the percentage of the Total Commitment or of the unpaid principal amount of the Notes, or the number of Lenders, which shall be required for Lenders or any of them to take any action under this SECTION 13.11(a) or any other provision of this Agreement; (v) amend, modify or waive this SECTION 13.11(a), or (vi) amend, modify or waive the Pro Rata or ratable treatment of Lenders under this Agreement, or amend, modify or waive the obligation of Borrower to Cash Collateralize the outstanding amount of Letters of Credit. (b) Any conflict or ambiguity between the terms and provisions herein and terms and provisions in any other Loan Document shall be controlled by the terms and provisions herein. (c) No course of dealing nor any failure or delay by any Credit Party or any of its Representatives with respect to exercising any Right of any Credit Party hereunder shall operate as a waiver thereof. A waiver must be in writing and signed by Administrative Agent and Required Lenders (or by all Lenders, if required hereunder) to be effective, and such waiver will be effective only in the specific instance and for the specific purpose for which it is given. 13.12 MULTIPLE COUNTERPARTS. This Agreement may be executed in a number of identical counterparts, each of which shall be deemed an original for all purposes and all of which constitute, collectively, one agreement; but, in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart. It is not necessary that each Lender execute the same counterpart so long as identical counterparts are executed by Borrower, each Lender, and Administrative Agent. This Agreement shall become effective when counterparts hereof shall have been executed and delivered to Administrative Agent by each Lender, Administrative Agent, and Borrower, or, when Administrative Agent shall have received telecopied, telexed, or other evidence satisfactory to it that such party has executed and is delivering to Administrative Agent a counterpart hereof. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 58 13.13 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender 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 SECTION 13.13(b), (ii) by way of participation in accordance with the provisions of SECTION 13.13(d), or (iii) by way of pledge or assignment of a security interest subject to the restrictions of SECTION 13.13(f). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in SECTION 13.13(d) and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement. (b) 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 outstanding Borrowings (including for purposes of this SECTION 13.13(b) participations in L/C Obligations) at the time owing to it); provided that: (i) except in the case of an assignment of the entire remaining amount of the assigning Lender's Commitment and outstanding Borrowings and participations in Unreimbursed Amounts at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund (as defined in SECTION 13.13(g)) with respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Borrowings and participations in Unreimbursed Amounts outstanding thereunder) subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to Administrative Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 or a whole multiple of $500,000 in excess thereof, and after such assignment, no Lender shall hold a Commitment of less than $5,000,000 unless each of Administrative Agent and, so long as no Event of Default has occurred and is continuing, Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); (ii) 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 Borrowings or the Commitment assigned; (iii) any assignment of a Commitment or unfunded participation in Unreimbursed Amounts must be approved by Administrative Agent (which approval shall not be unreasonably withheld) unless the Person that is the proposed assignee is itself a Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee); and (iv) the parties to each assignment shall execute and deliver to Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500. Subject to acceptance and recording thereof by Administrative Agent pursuant to SECTION 13.13(c), from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, 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 and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption 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 to the benefits of SECTIONS 4.1, 4.5, and 4.6 (with respect to facts and circumstances occurring prior to the effective date of such assignment) and 11.10). Upon request, Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection 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 SECTION 13.13(d). LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 59 (c) Administrative Agent, acting solely for this purpose as an agent of Borrower, shall maintain at Administrative Agent's office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of Lenders, and the Commitments of, principal amounts of the Borrowings and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the "REGISTER"). The entries in the Register shall be conclusive in the absence of manifest error, and Borrower, Administrative Agent, and Lenders may treat each 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 the contrary. The Register shall be available for inspection by Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice. (d) Any Lender may at any time, without the consent of, or notice to, Borrower or Administrative Agent, sell participations to any Person (other than a natural person or Borrower or any of Borrower's Affiliates or Subsidiaries) (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 its Commitment and/or Borrowings and participations in L/C Obligations 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, and (iii) Borrower, Administrative Agent, and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification, or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to SECTION 13.11(a) that directly affects such Participant. Subject to SECTION 13.13(e), Borrower agrees that each Participant shall be entitled to the benefits of SECTIONS 4.1, 4.5, and 4.6 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to SECTION 13.13(b). (e) A Participant shall not be entitled to receive any greater payment under SECTIONS 4.1 or 4.5 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 Borrower's prior written consent. A Participant that would be a Lender that is not a "United States person" within the meaning of Section 7701(a)(30) of the Tax Code, if it were a Lender shall not be entitled to the benefits of SECTION 4.6 unless Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of Borrower, to comply with SECTION 4.6 as though it were a Lender. (f) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. (g) As used herein, the following terms have the following meanings: APPROVED FUND means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate of an entity that administers or manages a Lender. ELIGIBLE ASSIGNEE means: (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) Administrative Agent (provided LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 60 that Administrative Agent shall not give such approval of any such other Person unless such other Person has a combined capital and surplus of at least $250,000,000 and has among its usual business activities the issuance of or the purchase of participations in letters of credit), and (ii) unless an Event of Default has occurred and is continuing, Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, "Eligible Assignee" shall not include Borrower or any of Borrower's Affiliates or Subsidiaries. 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 and similar extensions of credit in the ordinary course of its business. (h) Notwithstanding anything to the contrary contained herein, any Lender that is a Fund may create a security interest in all or any portion of the Borrowings owing to it and the Note, 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 SECTION 13.13, (i) no such pledge shall release the pledging Lender from any of its obligations under the Loan Documents and (ii) such trustee shall not be entitled to exercise any of the rights of a Lender under the Loan Documents even though such trustee may have acquired ownership rights with respect to the pledged interest through foreclosure or otherwise. 13.14 DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN CIRCUMSTANCES. The obligations of Borrower under the Loan Documents shall remain in full force and effect until termination of the Total Commitment and payment in full of the Principal Debt and of all interest, fees, and other amounts of the Obligation then due and owing, except that SECTIONS 4, 11, and 13, and any other provisions under the Loan Documents expressly intended to survive by the terms hereof or by the terms of the applicable Loan Documents, shall survive such termination. If at any time any payment of the principal of or interest on any Note or any other amount payable by Borrower under any Loan Document is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy, or reorganization of any Company or otherwise, then the obligations of Borrower under the Loan Documents with respect to such payment shall be reinstated as though such payment had been due but not made at such time. 13.15 CONFIDENTIALITY. Each of Administrative Agent and Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees, and agents, including accountants, legal counsel, and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority (including any self-regulatory authority, such as the 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 thereunder, (f) subject to an agreement containing provisions substantially the same as those of this SECTION 13.15, to (i) any assignee of or Participant in, or any prospective assignee 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 Borrower and its obligations, (g) with the consent of Borrower, or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this SECTION 13.15 or (y) becomes available to Administrative Agent or any Lender on a nonconfidential basis from a source other than Borrower. For purposes of this Section, "INFORMATION" means all information received from any Company relating to any Company or any of LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 61 their respective businesses, other than any such information that is available to Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by any Company, provided that, in the case of information received from a Company after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this SECTION 13.15 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Notwithstanding anything herein to the contrary, "INFORMATION" shall not include, and each party hereto may disclose without limitation of any kind, any information with respect to the "tax treatment" and "tax structure" (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure; provided that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transaction as well as other information, this sentence shall only apply to such portions of the document or similar item that relate to the tax treatment or tax structure of the Borrowings, and transactions contemplated hereby. [REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGES FOLLOW] LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT 62 EXECUTED as of the first date written above. CENTEX CORPORATION, as Borrower By: -s- Vicki A. Roberts -------------------------------- Vicki A. Roberts Vice President and Treasurer SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT BANK OF AMERICA, N.A., as Administrative Agent and as a Lender By: -s- Mark Lariviere -------------------------------- Mark Lariviere Managing Director SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT BANK ONE, NA, as Syndication Agent and as a Lender By: -s- James P. Krcmarik -------------------------------- Name: James P. Krcmarik Title: Associate Director SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT JPMORGAN CHASE BANK, as a Lender By: -s- David L. Howard -------------------------------- Name: David L. Howard Title: Vice President SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT THE ROYAL BANK OF SCOTLAND PLC, as a Lender By: -s- David Apps -------------------------------- Name: David Apps Title: Senior Vice President SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT BNP PARIBAS, as a Lender By: -s- Jeff Tebeaux -------------------------------- Name: Jeff Tebeaux Title: Vice President Henry F. Setina -------------------------------- Henry F. Setina Director SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT CREDIT LYONNAIS NEW YORK BRANCH, as a Lender By: -s- Attila Koc -------------------------------- Name: Attila Koc Title: Senior Vice President SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT CREDIT SUISSE FIRST BOSTON, ACTING THROUGH ITS CAYMAN ISLANDS BRANCH, as a Lender By: -s- Bill O'Daly -------------------------------- Name: Bill O'Daly Title: Director By: Cassandra Droogan -------------------------------- Name: Cassandra Droogan Title: Associate SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT SUNTRUST BANK, as a Lender By: -s- W. John Wendler -------------------------------- Name: W. John Wendler Title: Director SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT THE BANK OF TOKYO-MITSUBISHI, LTD., as a Lender By: -s- John M. Mearns -------------------------------- Name: John M. Mearns Title: Vice President and Manager By: -s- Brenda S. Trader -------------------------------- Name: Brenda S. Trader Title: Banking Officer SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT COMERICA BANK, as a Lender By: -s- Casey L. Ostrander -------------------------------- Name: Casey L. Ostrander Title: Assistant Vice President SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT WASHINGTON MUTUAL BANK, FA, as a Lender By: -s- [ILLEGIBLE] -------------------------------- Name: [ILLEGIBLE] Title: Senior Vice President SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT LLOYDS TSB BANK, PLC, as a Lender By: -s- Windsor R. Davies -------------------------------- Name: Windsor R. Davies Title: Director, Corporate Banking, USA D061 By: -s- Richard M. Heath -------------------------------- Name: Richard M. Heath Title: Vice President, Corporate Banking, USA H009 SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT PNC BANK, NATIONAL ASSOCIATION, as a Lender By: -s- Douglas G. Paul -------------------------------- Name: Douglas G. Paul Title: Senior Vice President SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT BANCA DI ROMA - CHICAGO BRANCH, as a Lender By: -s- Joyce Montgomery -------------------------------- Name: Joyce Montgomery Title: Vice President By: -s- Aurora Pensa -------------------------------- Name: Aurora Pensa Title: Vice President SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT UBS AG, CAYMAN ISLANDS BRANCH, as a Lender By: -s- Patricia O'Kicki -------------------------------- Name: Patricia O'Kicki Title: Director By: -s- Wilfred V. Saint -------------------------------- Name: Wilfred V. Saint Title: Associate Director Banking Products Services, US SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT THE NORTHERN TRUST COMPANY, as a Lender By: -s- Paul H. Theiss -------------------------------- Name: Paul H. Theiss Title: Vice President SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT US BANK NATIONAL ASSOCIATION, as a Lender By: -s- Joseph L. Sooter, Jr. -------------------------------- Name: Joseph L. Sooter, Jr. Title: Vice President SIGNATURE PAGE TO CENTEX CORPORATION LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT [LETTER OF CREDIT] EXHIBIT A FORM OF PROMISSORY NOTE $_______________ August 7, 2003 FOR VALUE RECEIVED, the undersigned, CENTEX CORPORATION, a Nevada corporation ("BORROWER"), hereby promises to pay to the order of _______________________ ("LENDER"), at the offices of BANK OF AMERICA, N.A., as Administrative Agent for Lender and others as hereinafter described, on the Repayment Date for each Borrowing, the lesser of (i) _____________________ ($____________) and (ii) the aggregate principal amount of such Borrowing disbursed by Lender to Borrower and outstanding and unpaid on such Repayment Date (together with accrued and unpaid interest thereon). This note has been executed and delivered under, and is subject to the terms of, the Letter of Credit and Reimbursement Agreement dated as of August 7, 2003 (as amended, modified, supplemented, or restated from time to time, the "AGREEMENT"), among Borrower, Lender and other lenders named therein, and Agents, and is one of the "Notes" referred to therein. Unless defined herein, capitalized terms used herein that are defined in the Agreement have the meaning given to such terms in the Agreement. Reference is made to the Agreement for provisions affecting this note regarding applicable interest rates, principal and interest payment dates, final maturity, voluntary and mandatory prepayments, acceleration of maturity, exercise of Rights, payment of attorneys' fees, court costs and other costs of collection, certain waivers by Borrower and others now or hereafter obligated for payment of any sums due hereunder and security for the payment hereof. Without limiting the immediately preceding sentence, reference is made to SECTION 3.6 of the Agreement for usury savings provisions. THE LAWS OF THE STATE OF TEXAS AND OF THE UNITED STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF BORROWER AND LENDER AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION HEREOF. CENTEX CORPORATION By __________________________________ Name: ___________________________ Title: ___________________________ CENTEX EXHIBITS AND SCHEDULES 1 [LETTER OF CREDIT] EXHIBIT B FORM OF COMPLIANCE CERTIFICATE (Centex Corporation) DATE: _________________, ________ SUBJECT PERIOD: __________ended ________________, ______ ADMINISTRATIVE AGENT: Bank of America, N.A. BORROWER: Centex Corporation This certificate is delivered under the Letter of Credit and Reimbursement Agreement, dated as of August 7, 2003 (as amended, modified, supplemented, or restated from time to time, the "CREDIT AGREEMENT"), among Borrower, Administrative Agent, and other Agents and Lenders party thereto. Capitalized terms used herein and not otherwise defined herein shall have the meaning given to such terms in the Credit Agreement. The undersigned certifies to Lenders that: (a) the undersigned is a Responsible Officer of Borrower in the position(s) set forth under the signature below; (b) the Financial Statements of the Companies attached to this certificate were prepared in accordance with GAAP, and present fairly in all material respects the consolidated financial condition and results of operations of the Companies as of, and for the [three, six, or nine months, or fiscal year] ended on, ____________, _____(the "SUBJECT PERIOD") [(subject only to normal year-end audit adjustments)]; (c) a review of the activities of the Companies during the Subject Period has been made under my supervision with a view to determining whether, during the Subject Period, the Companies have kept, observed, performed, and fulfilled all of their respective obligations under the Loan Documents, and during the Subject Period, (i) the Companies kept, observed, performed, and fulfilled each and every covenant and condition of the Loan Documents (except for the deviations, if any, set forth on ANNEX A to this certificate) in all material respects, and (ii) no Event of Default (nor any Potential Default) has occurred which has not been cured or waived (except the Events of Default or Potential Defaults, if any, described on ANNEX A to this certificate); (d) the status of compliance by Borrower with SECTION 9.12(a), (b), and (c) of the Credit Agreement at the end of the Subject Period is as set forth on ANNEX B to this certificate; and (e) during the Subject Period, each Schedule to each Loan Document that was required to be revised and supplied to Administrative Agent in accordance with the terms of the Loan Documents has been so revised and supplied. CENTEX EXHIBITS AND SCHEDULES 2 [LETTER OF CREDIT] [Signature of Responsible Officer of Borrower] By __________________________________ Name: ___________________________ Title: ___________________________ CENTEX EXHIBITS AND SCHEDULES 3 [LETTER OF CREDIT] ANNEX A TO COMPLIANCE CERTIFICATE DEVIATIONS FROM LOAN DOCUMENTS/ DEFAULTS OR POTENTIAL DEFAULTS (If none, so state.) CENTEX EXHIBITS AND SCHEDULES 4 [LETTER OF CREDIT] ANNEX B TO COMPLIANCE CERTIFICATE (Centex Corporation) Status of Compliance with SECTION 9.12(a), (b) and (c)of the Credit Agreement (1) Borrower shall provide to Administrative Agent (for the benefit of Lenders) detailed calculations, in form and substance reasonably acceptable to Administrative Agent, demonstrating compliance with the following covenants: SECTION 9.3 INDEBTEDNESS OF RESTRICTED SUBSIDIARIES SECTION 9.12(a) LEVERAGE RATIO SECTION 9.12(b) INTEREST COVERAGE SECTION 9.12(c) MINIMUM TANGIBLE NET WORTH (1) All as more particularly determined in accordance with the terms of the Credit Agreement, which control in the event of conflicts with this form. CENTEX EXHIBITS AND SCHEDULES 5 [LETTER OF CREDIT] EXHIBIT C FORM OF NOTICE OF CONVERSION/CONTINUATION _________________, ____ Bank of America, N.A. as Administrative Agent for the Lenders as defined in the Credit Agreement referred to below 901 Main Street, 14th Floor Dallas, Texas 75202 Attn: Taelitha Harris Phone: 214.209.3645 Fax: 214.290.9644 Reference is made to (i) the Letter of Credit and Reimbursement Agreement, dated as of August 7, 2003 (as amended, modified, supplemented, or restated from time to time, "AGREEMENT"), among the undersigned, the Lenders named therein, and Agents. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement. The undersigned hereby gives you notice pursuant to SECTION 2.1(c)(iii) of the Agreement that it elects to Convert a Borrowing from one Type to another Type or elects to Continue a Borrowing and select a new Interest Period for a Eurodollar Borrowing, and in that connection, sets forth below the terms on which such Conversion or Continuation is requested to be made: (A) Date of Borrowing* (A) ________________ (B) Amount of Borrowing (B) ________________ (C) Type of Borrowing** (C) ________________ (D) For Conversion to, or Continuation of, a Eurodollar (D) ________________ Borrowing, the Interest Period and the last day thereof*** On the date the rate is set, please confirm the interest rate below and return by facsimile transmission to ___________________. Very truly yours, CENTEX CORPORATION By __________________________________ Name: ___________________________ Title: ___________________________ Facility Rate: ______________________ Confirmed by: _______________________________ CENTEX EXHIBITS AND SCHEDULES 6 [LETTER OF CREDIT] * Must be a Business Day at least three (3) Business Days following receipt by Administrative Agent of this Notice of Conversion/Continuation. ** Eurodollar Borrowing or Prime Rate Borrowing. *** Eurodollar Borrowing - 14 days or 1 month. In no event may the Interest Period end after the applicable scheduled repayment date of such Borrowing or Letter of Credit Expiration Date. CENTEX EXHIBITS AND SCHEDULES 7 [LETTER OF CREDIT] EXHIBIT D FORM OF OPINION OF COUNSEL The opinion delivered by counsel to Borrower must be in form and substance acceptable to Administrative Agent and its special counsel and cover the following matters: 1. Borrower is duly incorporated, validly existing, and in good standing under the Legal Requirements of the State of Nevada. 2. Borrower is duly qualified to transact business and is in good standing as a foreign corporation in the State of Texas and in each other jurisdiction where, to the best of that counsel's knowledge, the nature and extent of Borrower's business and properties require due qualification and good standing. 3. Borrower possesses all requisite corporate power and authority to conduct its business as is now being, or is contemplated by the Credit Agreement to be, conducted. 4. The execution and delivery by Borrower of each Loan Document to which it is a party and the performance by it of its obligations thereunder, (a) are within its corporate power, (b) have been duly authorized by all necessary corporate action on its behalf, (c) except for any action or filing that has been taken or made on or before the date of this opinion, and the filing of the Loan Documents with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, require no action by or filing with any Governmental Authority, (d) do not violate any provision of its Constituent Documents, (e) do not to the best knowledge of counsel after reasonable inquiry violate any Legal Requirement applicable to it or, to the best knowledge of counsel after reasonable inquiry, any material agreements to which it is a party and of which counsel is aware, and (f) do not result in the creation or imposition of any Lien on any asset of Borrower pursuant to a material agreement of Borrower of which counsel is aware. 5. Upon execution and delivery by all parties to it, each Loan Document will constitute a legal and binding obligation of Borrower, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable Debtor Relief Laws and general principles of equity. 6. To the best knowledge of counsel after reasonable inquiry, (a) no Company is subject to, or aware of the threat of, any Litigation that is reasonably likely to be determined adversely to it and, if so adversely determined, would be a Material Adverse Event, and (b) no outstanding or unpaid judgments against any Company exist that could be a Material Adverse Event. CENTEX EXHIBITS AND SCHEDULES 8 [LETTER OF CREDIT] EXHIBIT E FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption (this "ASSIGNMENT AND ASSUMPTION") is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] ("ASSIGNOR") and [Insert name of Assignee] ("ASSIGNEE"). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (the "CREDIT AGREEMENT"), receipt of a copy of which is hereby acknowledged by Assignee. The Standard Terms and Conditions set forth in ANNEX 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full. For an agreed consideration, Assignor hereby irrevocably sells and assigns to Assignee, and Assignee hereby irrevocably purchases and assumes from Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement (including Section 13.13(b) thereof), as of the Effective Date inserted by Administrative Agent as contemplated below (i) all of Assignor's rights and obligations as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of Assignor under the facility identified below (including, without limitation, Letters of Credit under such facility) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action, and any other right of Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto, or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims, and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to CLAUSE (i) above (the rights and obligations sold and assigned pursuant to CLAUSES (i) and (ii) above being referred to herein collectively as, the "ASSIGNED INTEREST"). Such sale and assignment is without recourse to Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by Assignor. 1. Assignor: ________________________________________ 2. Assignee: ________________________________________ [and is an Affiliate/Approved Fund of [identify Lender]1] 3. Borrower: Centex Corporation, a Nevada corporation 4. Administrative Agent: Bank of America, N.A., as the administrative agent under the Credit Agreement 5. Credit Agreement: The Letter of Credit and Reimbursement Agreement, dated as of August 7, 2003, among Centex Corporation, the Lenders parties thereto, Bank of America, N.A., as Administrative Agent ______________________________ 1 Select as applicable. CENTEX EXHIBITS AND SCHEDULES 9 [LETTER OF CREDIT] 6. Assigned Interest:

Total Amount of Percentage Commitment/Borrowings Commitment/Borrowings Assigned of Facility Assigned for all Lenders* Assigned* Commitment/Borrowings2 - ----------------- --------------------- ---------------------- ---------------------- _____________ $____________________ $____________________ ______________________% _____________ $____________________ $____________________ ______________________% _____________ $____________________ $____________________ ______________________%

[7. Trade Date __________________]3 Effective Date: __________________, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.] The terms set forth in this Assignment and Assumption are hereby agreed to: ASSIGNOR -------- [NAME OF ASSIGNOR] By __________________________________ Title: ___________________________ ASSIGNEE -------- [NAME OF ASSIGNEE] By: _____________________________ Title: Consented to and Accepted: BANK OF AMERICA, N.A., as Administrative Agent By: _________________________________ Title: [Consented to and Accepted: CENTEX CORPORATION, a Nevada corporation By: _________________________________ Title:] _________________________ * Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date. 2 Set forth, to at least 9 decimals, as a percentage of the Commitment/Borrowings of all Lenders thereunder. 3 To be completed if Assignor and Assignee intend that the minimum assignment amount is to be determined as of the Trade Date. CENTEX EXHIBITS AND SCHEDULES 10 [LETTER OF CREDIT] ANNEX 1 TO ASSIGNMENT AND ASSUMPTION STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION 1. Representations and Warranties. 1.1. Assignor. Assignor: (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance, or other adverse claim, and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties, or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency, or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates, or any other Person of any of their respective obligations under any Loan Document. 1.2. Assignee. Assignee: (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to SECTION 8.3 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on Administrative Agent or any other Lender, and (v) if it is a Lender that is not a "United States person" within the meaning of Section 7701(a)(30) of the Tax Code, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by Assignee; and (b) agrees that (i) it will, independently and without reliance on Administrative Agent, Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender. 2. Payments. From and after the Effective Date, Administrative Agent shall make all payments in respect of the Assigned interest (including payments of principal, interest, fees and other amounts) to Assignee whether such amounts have accrued prior to or on or after the Effective Date. The Assignor and Assignee shall make all appropriate adjustments in payments by Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves. 3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment CENTEX EXHIBITS AND SCHEDULES 11 [LETTER OF CREDIT] and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of Texas. CENTEX EXHIBITS AND SCHEDULES 12 [LETTER OF CREDIT] SCHEDULE 1.1 EXISTING LETTERS OF CREDIT

ISSUE EXPIRATION AMOUNT ISSUER L/C # DATE DATE APPLICANT BENEFICIARY $ - -------------------------- -------------- -------- ---------- ---------------- ------------------------------------- ------------- Bank of America, N.A. 00000000916355 12/20/98 12/19/03 Centex Homes Travelers Casualty A 1,900,000.00 Bank of America, N.A. 00000003054936 03/19/03 03/14/04 Centex Homes Donlen Trust 500,000.00 Bank of America, N.A. 00000003704341 12/01/00 12/01/03 Centex Homes Mullrock Mortgage 245,000.00 Bank of America, N.A. 00000003704342 01/23/01 01/19/04 Centex Homes Enterprise Leasing 500,000.00 Bank of America, N.A. 00000003704347 03/01/01 02/27/04 Centex Homes Old Republic Insurance 1,000,000.00 Bank of America, N.A. 00000003704362 05/31/01 05/31/04 Centex Homes Enterprise Leasing 500,000.00 Bank of America, N.A. 00000003704363 06/06/01 06/01/04 Centex Homes City of Longmont 672,367.00 Bank of America, N.A. 00000003704367 06/27/01 06/13/04 Centex Homes Liberty Mutual Insurance 647,160.00 Bank of America, N.A. 00000003704389 11/14/01 11/14/03 Centex Homes ZurichAmerican Insurance 7,000,000.00 Bank of America, N.A. 00000003704392 12/10/01 12/10/03 Centex Homes Comerica Bank Texas 1,195,650.00 Bank of America, N.A. 00000003704393 12/04/01 12/05/03 Centex Homes Arbor Commercial Mort. 354,671.00 Bank of America, N.A. 00000003704394 12/04/01 12/05/03 Centex Homes Arbor Commercial Mort. 154,472.00 Bank of America, N.A. 00000003704403 08/08/02 08/06/03 Centex Homes Liberty Mutual Insurance 400,000.00 Bank of America, N.A. 00000000113767 10/02/99 10/01/03 Centex Homes Commissioner of Insurance 250,000.000 Bank of America, N.A. 00000003054810 03/17/03 03/17/04 Centex Homes Palmetto Glen, LLC 50,000.00 Bank of America, N.A. 00000003055540 04/16/03 10/31/04 Centex Homes Union County 755,631.87 Bank of America, N.A. 00000003056164 05/16/03 05/15/04 Centex Homes City of Boynton Beach 25,047.00 Bank of America, N.A. 00000003055469 05/30/03 05/28/04 Centex Homes City of Boynton Beach 5,997.00 Bank of America, N.A. 00000003056601 06/05/03 06/03/04 Centex Homes City of Lake St. Louis 10,000.00 Bank of America, N.A. 00000003056852 06/16/03 06/16/04 Centex Homes St. Louis County, MI 412,312.95 Bank of America, N.A. 00000003056853 06/16/03 06/16/04 Centex Homes St. Louis County, MI 154,143.68 Bank of America, N.A. 00000003056854 06/16/03 06/16/04 Centex Homes St. Louis County, MI 24,175.30 Bank of America, N.A. 00000003056855 06/16/03 06/16/04 Centex Homes St. Louis County, MI 52,878.23 Bank of America, N.A. 00000003056856 06/16/03 06/16/04 Centex Homes St. Louis County, MI 25,558.92 Bank of America, N.A. 00000003056857 06/16/03 06/16/04 Centex Homes St. Louis County, MI 578,871.49 Bank of America, N.A. 00000003056858 06/16/03 06/16/04 Centex Homes St. Louis County, MI 365,117.35 Bank of America, N.A. 00000003057016 06/20/03 06/20/04 Centex Homes Horry County 627,827.56 Bank of America, N.A. 00000003057017 06/20/03 06/20/04 Centex Homes Horry County 614,535.60 Bank of America, N.A. 00000003057299 07/02/03 07/01/04 Centex Homes County of Lexington 121,675.00 Bank of America, N.A. 00000003057300 07/02/03 07/01/04 Centex Homes County of Lexington 154,249.00 Bank of America, N.A. 00000003057331 07/08/03 07/08/04 Centex Homes St. Louis County, MI 190,872.40 Bank of America, N.A. 00000003057332 07/08/03 07/08/04 Centex Homes St. Louis County, MI 387,144.92 Bank of America, N.A. 00000003704335 08/24/00 09/01/03 Centex Homes Board of County Comm. 110,049.00 Bank of America, N.A. 00000003704336 08/24/00 09/01/03 Centex Homes Board of County Comm. 942,731.00 Bank of America, N.A. 00000003704337 08/25/00 09/01/03 Centex Homes City of Farmington 164,900.00 Bank of America, N.A. 00000003704354 05/18/01 09/01/03 Centex Homes Town of Mount Pleasant 24,215.63 Bank of America, N.A. 00000003704355 05/25/01 05/22/04 Centex Homes Charter Township of 24,620.00 Bank of America, N.A. 00000003704356 05/25/01 10/22/03 Centex Homes Washtenaw County Roa 170,368.00 Bank of America, N.A. 00000003704358 05/25/01 10/22/03 Centex Homes Washtenaw County Dra 286,080.00 Bank of America, N.A. 00000003704364 06/11/01 02/01/04 Centex Homes City of Maple Grove 154,800.00 Bank of America, N.A. 00000003704366 06/13/01 12/12/03 Centex Homes City of Longmont 88,815.40 Bank of America, N.A. 00000003704368 06/20/01 12/22/03 Centex Homes City of Rosemount 9,020.00 Bank of America, N.A. 00000003704369 06/20/01 12/15/03 Centex Homes City of Rosemount 30,800.00 Bank of America, N.A. 00000003704372 06/20/01 06/20/04 Centex Homes Raritan Township 60,000.00 Bank of America, N.A. 00000003704374 07/06/01 06/30/04 Centex Homes City of Farmington 33,500.00 Bank of America, N.A. 00000003704375 07/06/01 08/15/03 Centex Homes Town of Mount Pleasant 25,138.12 Bank of America, N.A. 00000003704378 08/02/01 08/29/03 Centex Homes City of Raleigh 24,026.67

CENTEX EXHIBITS AND SCHEDULES 13 [LETTER OF CREDIT]

ISSUE EXPIRATION AMOUNT ISSUER L/C # DATE DATE APPLICANT BENEFICIARY $ - -------------------------- -------------- -------- ---------- ---------------- ------------------------------------- ------------- Bank of America, N.A. 00000003704383 09/25/01 09/26/03 Centex Homes Town of Mount Pleasant 35,901.00 Bank of America, N.A. 00000003704385 10/31/01 06/03/04 Centex Homes County of Lexington 48,900.00 Bank of America, N.A. 00000003704388 11/15/01 12/31/03 Centex Homes The City of Inver Gr 47,685.00 Bank of America, N.A. 00000003704391 11/29/01 11/28/03 Centex Homes City of Raleigh 45,121.22 Bank of America, N.A. 00000003704404 08/19/02 12/31/03 Centex Homes The City of Inver Gr 221,385.62 Bank of America, N.A. 00000003704405 08/21/02 08/20/03 Centex Homes Round Lake Development 1,550,218.00 Bank of America, N.A. 00000003704407 10/08/02 10/07/03 Centex Homes City of Rosemount 90,000.00 Bank of America, N.A. 00000003704408 10/07/02 10/04/03 Centex Homes Union County 372,559.00 Bank of America, N.A. 00000003704409 10/07/02 10/04/03 Centex Homes Union County 13,553.00 Bank of America, N.A. 00000003704410 10/07/02 10/04/03 Centex Homes Union County 330,745.00 Bank of America, N.A. 00000003704411 10/07/02 10/04/03 Centex Homes Union County 19,440.00 Bank of America, N.A. 00000003704412 10/28/02 10/24/03 Centex Homes Jackson Point Development 50,000.00 Bank of America, N.A. 00000003704413 01/15/03 05/01/04 Centex Homes County of Lexington 37,000.00 Bank of America, N.A. 00000003710150 01/31/03 01/27/04 Centex Homes Walker Title & Escrow 225,000.00 Bank of America, N.A. 00000003710151 02/03/03 01/30/04 Centex Homes City of Raleigh 46,754.55 Bank One, NA 00327902 07/01/03 07/01/04 Centex Homes Union County 171,541.90 Bank One, NA 00327908 07/01/03 07/01/04 Centex Homes Union County 7,863.00 Bank One, NA 00327883 12/31/02 12/30/04 Centex Homes The Stagecoach Valley, Ltd. 71,000.00 Bank One, NA 00327885 01/30/03 01/27/05 Centex Homes 439 Development, Ltd. 290,000.00 Bank One, NA 00327894 04/15/03 04/14/04 Centex Homes City of Elk River 100,000.00 Bank One, NA 00327886 04/15/03 04/10/04 Centex Homes City of Maple Grove 233,000.00 Bank One, NA 00327910 07/25/03 12/18/03 Centex Homes Commerce Title Co. 340,000.000 Bank One, NA 00327895 04/15/03 04/14/04 Centex Homes City of Elk River 861,000.00 Bank One, NA 00327888 03/07/03 03/05/04 Centex Homes Tappey Bartholow Squires 150,000.00 Bank One, NA 00327889 03/07/03 03/05/04 Centex Homes Mobile Shelters Land Holding, LLC 175,000.00 Bank One, NA 00327890 03/17/03 03/28/04 Centex Homes City of Raleigh 73,071.42 Bank One, NA 00327901 06/06/03 01/06/05 Centex Homes City of Oregon City 69,953.00 Bank One, NA 00327909 07/22/03 07/18/04 Centex Homes Village of Shiloh 50,000.00 Bank One, NA 00327900 04/25/03 04/25/05 Centex Homes W & B Development, Ltd. 285,000.00 Bank One, NA 00327907 07/01/03 07/01/04 Centex Homes Union County 205,454.45 Bank One, NA 00327904 07/01/03 07/01/04 Centex Homes Union County 10,261.00 Bank One, NA 00327905 07/01/03 07/01/04 Centex Homes Union County 109,367.35 Bank One, NA 00327906 07/01/03 07/01/04 Centex Homes Union County 14,673.00 Bank One, NA 00327903 06/26/03 09/30/03 Centex Homes Boulder County Transportation Dept. 14,816.60 Bank One, NA 00313940 05/04/92 05/04/04 Centex Homes County of Loudoun 73,000.000 Bank One, NA 00313941 05/04/92 05/04/04 Centex Homes County of Loudoun 140,000.000 Bank One, NA 00313942 05/04/92 05/04/04 Centex Homes County of Loudoun 87,000.000 Bank One, NA 00318612 07/20/00 07/24/04 Centex Homes Shapell Industries, Inc. 532,347.04 Bank One, NA 00318615 09/05/00 02/01/04 Centex Homes City of Maplegrove 15,000.00 Bank One, NA 00318616 09/05/00 12/30/03 Centex Homes Village of Lake in the Hills 145,088.00 Bank One, NA 00318619 09/21/00 09/20/03 Centex Homes City of Longmont 370,596.50 Bank One, NA 00318624 10/23/00 12/30/03 Centex Homes Village of Lake in the Hills 334,000.00 Bank One, NA 00318625 10/23/00 12/30/03 Centex Homes Village of Lake in the Hills 125,000.00 Bank One, NA 00318626 10/26/00 09/07/03 Centex Homes City of Loveland 270,050.00 Bank One, NA 00318628 11/20/00 11/17/03 Centex Homes Metropolitan Title & Guaranty Co. 50,000.00 Bank One, NA 00318633 12/29/00 12/28/03 Centex Homes Sklpcha 1, Ltd., a Texas LP 21,000.00 Bank One, NA 00318645 08/01/01 10/19/03 Centex Homes Wayne County DPS 90,000.00 Bank One, NA 00318647 07/26/01 07/30/04 Centex Homes Charter Township of Canton 351,600.00 Bank One, NA 00318648 07/26/01 07/30/04 Centex Homes Washtenaw Co. Drain Commissioner 535,530.00 Bank One, NA 00318650 08/23/01 08/20/04 Centex Homes Washtenaw County Rd. Commission 849,343.00 Bank One, NA 00318853 09/21/01 09/25/04 Centex Homes Residential Funding Corporation 2,623,000.000 Bank One, NA 00318655 09/26/01 12/31/03 Centex Homes City of Prior Lake 289,375.00 Bank One, NA 00318656 09/24/01 09/21/03 Centex Homes Waterford Landing Hm. Owners Assc. 520,000.00 Bank One, NA 00318671 02/28/02 02/01/04 Centex Homes City of Maple Grove 135,860.00

CENTEX EXHIBITS AND SCHEDULES 14 [LETTER OF CREDIT]

ISSUE EXPIRATION AMOUNT ISSUER L/C # DATE DATE APPLICANT BENEFICIARY $ - -------------------------- -------------- -------- ---------- ---------------- ------------------------------------- ------------- Bank One, NA 00318659 11/21/01 02/01/04 Centex Homes City of Maplegrove 17,063.00 Bank One, NA 00318661 03/21/02 12/31/03 Centex Homes Unimproved Besinger Properties 750,000.00 Bank One, NA 00318663 04/15/02 04/11/04 Centex Homes City of Oceanside 43,093.00 Bank One, NA 00318664 12/17/01 12/14/03 Centex Homes City of Rosemount 200,000.00 Bank One, NA 00318665 12/17/01 12/14/03 Centex Homes City of Rosemount 200,000.00 Bank One, NA 00318669 03/11/02 03/11/04 Centex Homes Dobson II, LLC 217,120.00 Bank One, NA 00318672 03/06/02 12/31/03 Centex Homes The Carpentersville Group 650,000.00 Bank One, NA 00318673 04/15/02 04/11/04 Centex Homes City of Oceanside 112,482.00 Bank One, NA 00318674 04/17/02 06/30/04 Centex Homes Town of Mt. Pleasant 36,825.00 Bank One, NA 00318676 05/16/02 02/01/04 Centex Homes City of Maple Grove 9,400.00 Bank One, NA 00318677 05/16/02 02/01/04 Centex Homes City of Maple Grove 83,800.00 Bank One, NA 00318678 05/16/02 02/01/04 Centex Homes City of Maple Grove 597,800.00 Bank One, NA 00318679 05/16/02 02/01/04 Centex Homes City of Maple Grove 882,500.00 Bank One, NA 00318683 06/13/02 12/22/03 Centex Homes City of Rosemount 112,750.00 Bank One, NA 00318682 05/28/02 05/28/04 Centex Homes Killeen Thunder Creek, Ltd. 237,000.00 Bank One, NA 00318684 07/01/02 08/31/03 Centex Homes Town of Mt. Pleasant 30,525.00 Bank One, NA 00318685 07/02/02 01/08/04 Centex Homes County of Lexington, So. Carolina 41,384.50 Bank One, NA 00318689 08/02/02 07/30/04 Centex Homes Union County 743,177.23 Bank One, NA 00318690 08/02/02 07/30/04 Centex Homes Union County 36,063.19 Bank One, NA 00318691 08/06/02 08/05/04 Centex Homes Waugh Chapel Limited Partnership 300,000.00 Bank One, NA 00318692 08/15/02 08/08/04 Centex Homes Union County 36,274.39 Bank One, NA 00318693 08/15/02 08/12/04 Centex Homes Union County 1,048,782.21 Bank One, NA 00318694 08/15/02 08/15/04 Centex Homes City of Westminster 778,405.76 Bank One, NA 00318695 08/15/02 08/15/04 Centex Homes City of Westminster 520,626.85 Bank One, NA 00382346 06/10/97 12/09/03 Centex Homes City of Longmont 197,374.00 Bank One, NA 00382361 08/13/97 02/01/04 Centex Homes City of Maple Grove 15,000.00 Bank One, NA 00382375 11/14/97 08/27/03 Centex Homes Town of Parker 81,097.60 Bank One, NA 00382442 08/10/98 08/10/03 Centex Homes Sandpiper Bay Land Company, Inc. 100,000.00 Bank One, NA 00382702 09/04/98 09/04/04 Centex Homes C.V. Perry & Co. 134,400.00 Bank One, NA 00382738 03/18/99 04/01/04 Centex Homes Union County 127,625.00 Bank One, NA 00327898 04/15/03 06/01/05 Centex Homes Union County 21,577.61 Bank One, NA 00327899 04/15/03 06/01/05 Centex Homes Union County 245,100.45 Bank One, NA 00382779 09/21/99 12/31/03 Centex Homes Village of North Aurora 705,592.86 Bank One, NA 00382796 03/06/00 03/01/04 Centex Homes City of Longmont 254,509.50 Bank One, NA 00327867 09/18/02 09/16/04 Centex Homes Echo Development, Ltd. 86,000.000 Bank One, NA 00327870 10/04/02 10/04/04 Centex Homes United Water Princeton Meadows 1,077,366.00 Bank One, NA 00327868 09/30/02 11/30/03 Centex Homes OXI, LLC 500,000.00 Bank One, NA 00382394 01/28/98 01/20/04 Centex Homes Blackmoor Land Development 50,000.00 Bank One, NA 00382784 10/21/99 12/31/03 Centex Homes Village of North Aurora 193,445.99 Bank One, NA 00327878 11/12/02 11/11/03 Centex Homes Village of Round Lake 1,703,576.60 Bank One, NA 00327877 11/06/02 10/30/03 Centex Homes City of Longmont 2,021,134.00 Bank One, NA 00327882 11/21/02 08/30/04 Centex Homes County of Eagle, State of Colorado 32,236.71 Bank One, NA 00327869 10/02/02 11/30/03 Centex Homes The Town of Mt. Pleasant 117,115.00 Bank One, NA 00327872 10/23/02 10/31/03 Centex Homes Wells Fargo Bank Minnesota 740,980.00 Bank One, NA 00327873 10/23/02 10/31/03 Centex Homes Wells Fargo Bank Minnesota 1,500,000.00 Bank One, NA 00327879 11/13/02 11/11/03 Centex Homes Village of Oswego 1,373,757.12 Bank One, NA 00327881 11/21/02 08/30/04 Centex Homes County of Eagle, State of Colorado 79,190.26 Bank One, NA 00327880 12/02/02 11/22/03 Centex Homes Fleet National Bank 4,478,790.00 Bank One, NA 00327884 01/13/03 01/09/04 Centex Homes The City of Wheatridge 715,549.00 Bank One, NA 00327891 04/02/03 04/02/04 Centex Homes City of Rosemount 679,000.00 Bank One, NA 00327896 04/16/03 04/10/04 Centex Homes City of Maple Grove 1,957,100.00 Bank One, NA 00327886 04/15/03 04/10/04 Centex Homes City of Maple Grove 233,000.00 Bank One, NA 00327896 04/16/03 04/10/04 Centex Homes City of Maple Grove 1,957,100.00 Banque Nationale de Paris S400150 02/04/94 02/08/04 Centex Corp. Travelers Indemnity Company 3,215,000.00

CENTEX EXHIBITS AND SCHEDULES 15 [LETTER OF CREDIT]

ISSUE EXPIRATION AMOUNT ISSUER L/C # DATE DATE APPLICANT BENEFICIARY $ - -------------------------- -------------- -------- ---------- ---------------- ------------------------------------- ------------- Banque Nationale de Paris 91866446 01/21/03 01/31/04 Centex Corp. Zurich American Insurance Group 13,300,000.00 Comerica Bank 00000000583342 05/23/03 02/01/04 Centex Corp. City of Maple Grove 68,860.00 Comerica Bank 00000000583272 05/21/03 02/01/04 Centex Corp. City of Maple Grove 1,488,000.00 Comerica Bank 00000000583273 05/21/03 02/01/04 Centex Corp. City of Maple Grove 17,545.00 Comerica Bank 00000000583343 05/23/03 02/01/04 Centex Corp. City of Maple Grove 366,000.00 Comerica Bank 00000000583344 05/23/03 02/01/04 Centex Corp. City of Maple Grove 23,430.00 Comerica Bank 00000000583345 05/23/03 02/01/04 Centex Corp. City of Maple Grove 1,067,400.00 Comerica Bank 00000000583341 05/23/03 05/14/04 Centex Corp. Washtenaw County Rd. Commission 1,022,774.00 Comerica Bank 00000000583402 05/28/03 05/28/04 Centex Corp. Wellington Partners, LLC 725,000.00 Comerica Bank 00000000583885 06/18/03 06/17/04 Centex Corp. City of Rosemount 114,000.000 Comerica Bank 00000000584189 06/30/03 06/27/04 Centex Corp. Washtenaw County Rd. Commission 742,054.00 Comerica Bank 00000000584473 07/11/03 07/10/04 Centex Corp. Ashton Oaks, LLC 100,000.00 Comerica Bank 00000000584537 07/14/03 07/11/04 Centex Corp. City of Milan 974,314.00 Comerica Bank 00000000584301 07/07/03 07/02/04 Centex Corp. City of Rosemount 352,000.00 Comerica Bank 00000000584302 07/07/03 07/02/04 Centex Corp. City of Rosemount 268,400.00 Comerica Bank 00000000584752 07/22/03 07/23/04 Centex Corp. City of Woodbury 1,816,313.00 Comerica Bank 00000000584753 07/22/03 07/23/04 Centex Corp. City of Woodbury 54,022.20 Comerica Bank 00000000584943 07/30/03 07/30/04 Centex Corp. WalMart Stores East, LP 2,307,000.00 Comerica Bank 00000000584536 07/14/03 07/11/04 Centex Corp. Washtenaw Cnty. Drain Commission 753,918.00 JPMorgan Chase Bank D221538 01/23/02 01/17/04 Centex Corp. Zurich American Insurance Group 7,000,000.00 JPMorgan Chase Bank D220589 12/21/01 01/09/04 Centex Corp. The Travelers Indemnity Company 6,400,000.00 JPMorgan Chase Bank D291129 07/28/99 07/31/04 Centex Materials City of Austin 47,725.70 JPMorgan Chase Bank D229664 09/05/02 03/01/04 Centex Homes County of Lexington, So. Carolina 83,627.30 JPMorgan Chase Bank D229684 09/05/02 03/01/04 Centex Homes County of Lexington, So. Carolina 201,830.22 JPMorgan Chase Bank D229866 09/09/02 07/31/03 Centex Homes Nextly Bank Myrtle Beach LPO 750,000.00 JPMorgan Chase Bank D230276 09/20/02 09/19/03 Centex Homes Residential Funding Corp. 1,364,450.00 JPMorgan Chase Bank D233345 12/26/02 12/31/03 Home Services Old Republic Insurance Company 3,000,000.00 JPMorgan Chase Bank D234681 02/10/03 01/31/04 Centex Devlpmnt. Industrial Properties Corporation 1,000,000.00 SunTrust Bank F503221 03/07/02 03/01/04 Centex Homes Liberty Mutual Insurance Company 319,680.00 SunTrust Bank F503235 03/25/02 03/22/04 Centex Homes Anne Arundel County 152,423.00 SunTrust Bank F840258 12/12/02 12/12/03 Centex Homes Liberty Mutual Insurance Company 250,000.00 SunTrust Bank F841319 06/02/03 05/30/04 Centex Homes Riverwalk at Occoquan, Inc. 40,000.00 SunTrust Bank F841581 07/16/03 07/15/04 Centex Homes Walker Title & Escrow Company 600,000.00 SunTrust Bank P000019 10/24/02 10/18/03 Centex Homes County of York 112,000.00 SunTrust Bank P000040 10/31/02 10/28/03 Centex Homes City of Spring Hill 1,191,000.00 SunTrust Bank P000072 11/18/02 10/30/03 Centex Homes Orange County Board of 2,383.00 SunTrust Bank P000073 11/18/02 10/30/03 Centex Homes Orange County Board of 14,431.00 SunTrust Bank P000126 12/12/02 12/12/04 Centex Homes City of Mt. Juliet 296,624.00 SunTrust Bank P000127 12/12/02 12/12/04 Centex Homes City of Mr. Juliet 32,571.00 SunTrust Bank P000180 12/31/02 12/30/03 Centex Homes Orange County Commissioners 125,000.00 SunTrust Bank P000184 01/06/03 12/23/03 Centex Homes Union County 415,863.55 SunTrust Bank P000185 01/06/03 12/23/03 Centex Homes Union County 22,812.80 SunTrust Bank P000187 01/06/03 02/28/04 Centex Homes Orange County Board of 5,252.00 SunTrust Bank P000210 01/13/03 02/28/04 Centex Homes Orange County Board of 6,030.00 SunTrust Bank P000262 01/30/03 5/01/04 Centex Homes County of York 42,000.00 SunTrust Bank P000321 02/19/03 09/30/03 Centex Homes Orange County Board of 300,000.00 SunTrust Bank P000360 03/05/03 02/28/04 Centex Homes Orange County Board of 169,764.10 SunTrust Bank P000379 03/11/03 03/11/04 Centex Homes Commerce Title Agency 500,000.00 SunTrust Bank P000473 04/16/03 10/31/04 Centex Homes Union County 1,008,248.07 SunTrust Bank P000474 04/16/03 10/31/04 Centex Homes Union County 196,674.04 SunTrust Bank P000475 04/16/03 06/30/04 Centex Homes Union County 40,250.00 SunTrust Bank P000487 04/25/03 12/31/04 Centex Homes City of Inver Grove Heights 2,447,998.00 SunTrust Bank P000495 04/28/03 04/28/04 Centex Homes County of York 2,150,000.00 SunTrust Bank P000635 07/10/03 07/09/04 Centex Homes West Wilson Utility District 282,200.00

CENTEX EXHIBITS AND SCHEDULES 16 [LETTER OF CREDIT]

ISSUE EXPIRATION AMOUNT ISSUER L/C # DATE DATE APPLICANT BENEFICIARY $ - -------------------------- -------------- -------- ---------- ---------------- ------------------------------------- ------------- SunTrust Bank P000685 08/04/03 02/04/04 Centex Homes South Valley Sewer District 145,794.00 SunTrust Bank P600896 12/15/99 02/01/04 Centex Homes City of Maple Grove 3,000.00 SunTrust Bank P601230 03/13/01 02/01/04 Centex Homes City of Maple Grove 25,300.00 SunTrust Bank P601250 04/11/01 04/01/04 Centex Homes Powhatan Enterprises, Inc. 133,795.00 SunTrust Bank P601253 04/13/01 04/11/04 Centex Homes City of Brentwood 6,500.00 SunTrust Bank P601272 04/30/01 04/27/04 Centex Homes Williamson County Regional 72,000.00 SunTrust Bank P601275 04/30/01 04/27/04 Centex Homes City of Brentwood 6,000.00 SunTrust Bank P601403 11/07/01 11/06/03 Centex Homes City of Boynton Beach 1,291,910.00 SunTrust Bank P601447 01/29/02 12/14/03 Centex Homes Board of Supervisors of Fairfax 105,000.00 SunTrust Bank P601449 01/30/02 12/14/03 Centex Homes Board of Supervisors of Fairfax 337,100.00 SunTrust Bank P601457 02/11/02 01/31/04 Centex Homes Board of Supervisors of Fairfax 215,000.00 SunTrust Bank P601475 03/20/02 03/18/04 Centex Homes Residential Funding Corporation 2,700,000.00 SunTrust Bank P601480 03/27/02 03/27/04 Centex Homes City of Rosemount 115,000.00 SunTrust Bank P601500 04/18/02 04/17/04 Centex Homes Board of Supervisors of 161,800.00 SunTrust Bank P601501 04/18/02 10/15/03 Centex Homes King Farm Associates L.L.C. 100,000.00 SunTrust Bank P601529 05/15/02 10/30/03 Centex Homes Orange County Board of 8,010.00 SunTrust Bank P601530 05/15/02 10/30/03 Centex Homes Orange County Board of 4,140.00 SunTrust Bank P601531 05/15/02 10/30/03 Centex Homes Orange County Board of 24,864.00 SunTrust Bank P601532 05/15/02 10/30/03 Centex Homes Orange County Board of 33,108.00 SunTrust Bank P601558 06/14/02 06/14/04 Centex Homes City of Brentwood 146,150.00 SunTrust Bank P601559 06/17/02 06/03/04 Centex Homes Metropolitan Department of 23,750.00 SunTrust Bank P601571 07/02/02 10/30/03 Centex Homes Orange County Board of 61,857.00 SunTrust Bank P601609 08/29/02 01/06/04 Centex Homes West Wilson Utility District 11,566.70 SunTrust Bank P601649 10/16/02 10/11/03 Centex Homes Board of Supervisors of Fairfax 358,200.00

CENTEX EXHIBITS AND SCHEDULES 17 [LETTER OF CREDIT] SCHEDULE 2.1 LENDERS AND COMMITMENTS; ADDRESSES FOR NOTICE

PRO RATA NAME AND ADDRESS OF LENDERS COMMITMENT PART Bank of America, N.A. $ 20,000,000 8.00% Attn: Bryce Langen NC1-007-15-06 100 N. Tryon Street Charlotte, NC 28255 Phone: 704.387.5104 Fax: 704.386.0255 [With a copy to: Bank of America, N.A. Attn: Agency Management 901 Main Street, 14th Floor Dallas, TX 75202 Phone: 214.209.4109 Fax: 214-290-9448] Bank One, NA $ 40,000,000 16.00% Attn: F. Patt Schiewitz 1 Bank One Plaza, Suite IL1-0315 Chicago, IL 60670 Phone: 312.732.1148 Fax: 312.732.5939 JPMorgan Chase Bank $ 20,000,000 8.00% Attn: David L. Howard 2200 Ross Avenue, Third Floor Dallas, TX 75201 Phone: 214.965.4756 Fax: 214.965.2044

CENTEX EXHIBITS AND SCHEDULES 18 [LETTER OF CREDIT]

PRO RATA NAME AND ADDRESS OF LENDERS COMMITMENT PART The Royal Bank of Scotland plc Attn: Dave Apps $ 20,000,000 8.00% 101 Park Avenue New York, NY 10178 Phone: 212.401.3745 Fax: 212.401.3456 BNP Paribas $ 20,000,000 8.00% Attn: Jeff Tebeaux 12201 Merit Drive, Suite 860 Dallas, TX 75251 Phone: 214.953.9737 Fax: 972.788.9140 Credit Lyonnais New York Branch $ 20,000,000 8.00% Attn: Robert Smith 2200 Ross Avenue, Suite 4400 West Dallas, TX 75201 Phone: 214.220.2311 Fax: 214.220.2323 Credit Suisse First Boston, acting through its Cayman Islands Branch $ 20,000,000 8.00% Attn: William O'Daly Eleven Madison Avenue New York, NY 10010 Phone: 212.325.1986 Fax: 212.743.2254 SunTrust Bank $ 20,000,000 8.00% Attn: W. John Wendler 8245 Boone Boulevard, Suite 820 Vienna, VA 22181 Phone: 703.902.9041 Fax: 703.902.9245

CENTEX EXHIBITS AND SCHEDULES 19 [LETTER OF CREDIT]

PRO RATA NAME AND ADDRESS OF LENDERS COMMITMENT PART The Bank of Tokyo-Mitsubishi, Ltd. $ 12,500,000 5.00% Attn: John Mearns / Brenda Trader 2001 Ross Avenue, Suite 3150 Dallas, TX 75201 Phone: 214.954.1200 ext. 104 / ext. 111 Fax: 214.954.1007 Comerica Bank $ 12,500,000 5.00% Attn: Casey L. Ostrander 500 Woodward Avenue, 7th Floor MC: 3256 Detroit, MI 48226 Phone: 313.222.5286 Fax: 313.222.9295 Washington Mutual Bank, FA $ 12,500,000 5.00% Attn: Mary Bowman 5050 Broadway, 1st Floor Oakland, CA 94611 Phone: 510.658.1209 Fax: 510.658.1407 Lloyds TSB Bank plc $ 8,750,000 3.50% Attn: Windsor Davies 1251 Avenue of the Americas, 39th Floor New York, NY 10020 Phone: 212.930.8909 Fax: 212.930.5098 PNC Bank, National Association $ 8,750,000 3.50% Attn: Douglas Paul 2 Tower Center, 18th Floor East Brunswick, NJ 08816 Phone: 732.220.3566 Fax: 732.220.3744

CENTEX EXHIBITS AND SCHEDULES 20 [LETTER OF CREDIT]

PRO RATA NAME AND ADDRESS OF LENDERS COMMITMENT PART Banca di Roma - Chicago Branch $ 5,000,000 2.00% Attn: Joyce Montgomery 225 West Washington, Suite 1200 Chicago, IL 60606 Phone: 312.704.2648 Fax: 312.726.3058 UBS AG, Cayman Islands Branch $ 5,000,000 2.00% Attn: [Denise Conzo] 677 Washington Boulevard 6-South Stamford, CT 06901 Phone: 203.719.3853 Fax: 203.719.3888 The Northern Trust Company $ 2,500,000 1.00% Attn: Paul Theiss 50 South LaSalle Street Chicago, IL 60675 Phone: 312.557.1791 Fax: 312.444.7028 US Bank National Association $ 2,500,000 1.00% Attn: Joseph Sooter One US Bank Plaza 5L-MO-T12M St. Louis, MO 63101 Phone: 314.418.2462 Fax: 314.418.3859 Totals $250,000,000 100.00%

CENTEX EXHIBITS AND SCHEDULES 21 SCHEDULE 7.3 SUBSIDIARIES

STATE OF OWNERSHIP SUBSIDIARY FORMATION PERCENTAGE CDMC HOLDING, INC. (Nevada) 100% GREAT LAKES DEVELOPMENT CO., INC. (Nevada) 100.00% CROSLAND ACCEPTANCE ASSOCIATES V (North Carolina) 100% CROSLAND BOND COMPANY (North Carolina) 100% GENBOND TWO, INC. (North Carolina) 100% JOHN CROSLAND COMPANY (North Carolina) 100% MORTGAGE ACCEPTANCE ASSOCIATES NO. 2 (North Carolina) 100% MORTGAGE COLLATERAL ASSOCIATES NO. 1 (North Carolina) 100% MORTGAGE COLLATERAL ASSOCIATES NO. 3 (North Carolina) 100% CENTEX CONSTRUCTION PRODUCTS, INC. (Delaware) 65.10% AMERICAN GYPSUM COMPANY (Delaware) 65.10% AMERICAN GYPSUM MARKETING COMPANY (Delaware) 65.10% CCP CEMENT COMPANY (Nevada) 65.10% CCP CONCRETE/AGGREGATES LLC (Delaware) 65.10% CCP GYPSUM COMPANY (Nevada) 65.10% CCP LAND COMPANY (Nevada) 65.10% CENTEX CEMENT CORPORATION (Nevada) 65.10% CENTEX MATERIALS LLC (Delaware) 65.10% CXP FUNDING, LLC (Delaware) 65.10% HOLLIS & EASTERN RAILROAD COMPANY LLC (Delaware) 65.10% M & W DRYWALL SUPPLY COMPANY (Nevada) 65.10% MATHEWS READYMIX LLC (California) 65.10% MOUNTAIN CEMENT COMPANY (Nevada) 65.10% NEVADA CEMENT COMPANY (Nevada) 65.10% REPUBLIC PAPERBOARD COMPANY LLC (Delaware) 65.10% TEXAS CEMENT COMPANY (Nevada) 65.10% TLCC GP LLC (Delaware) 65.10% TLCC LP LLC (Delaware) 65.10% WESTERN AGGREGATES LLC (Nevada) 65.10% WESTERN CEMENT COMPANY OF CALIFORNIA (California) 65.10% A. W. MORTGAGE, L.P. (Texas) 50.01% ADFINET, INC. (Nevada) 100% ADFITECH, INC. (Nevada) 100% AMERICAN LANDMARK MORTGAGE, LTD. (Florida) 50.01% ASHLEY TURNER FINANCE, L.P. (Texas) 50.01% AT-HOME MORTGAGE ASSOCIATES, LTD. (Florida) 50.01% AUSTIN PARTNERS IN LENDING, L.P. (Texas) 50.01% BANYAN FINANCIAL OF CENTRAL FLORIDA, L.P. (Texas) 50.01%

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STATE OF OWNERSHIP SUBSIDIARY FORMATION PERCENTAGE BENEFIT ASSET MANAGEMENT CORPORATION (California) 100% BUILDER'S HOME MORTGAGE, L.P. (Washington) 50.01% CALIFORNIA HOME MORTGAGE, L.P. (Texas) 50.01% CENTEX EQUITY CORPORATION (Nevada) 100% CENTEX FINANCIAL SERVICES, INC. (Nevada) 100% CENTEX HOME EQUITY COMPANY, LLC (Delaware) 100% CENTEX OFFICE VICEROY I, L.P. (Delaware) 100% CENTEX TECHNOLOGY, INC. (Nevada) 100% CENTEX TITLE & ANCILLARY SERVICES, INC. (Nevada) 100% CENTEX VICEROY GENERAL PARTNER, LLC (Delaware) 100% CHEC ASSET RECEIVABLE CORPORATION (Nevada) 100% CHEC CONDUIT FUNDING, LLC (Delaware) 100% CHEC FUNDING, LLC (Delaware) 100% CHEC INDUSTRIAL LOAN COMPANY (Tennessee) 100% CHEC INDUSTRIAL LOAN CORPORATION (Minnesota) 100% CHEC RESIDUAL, LLC (Delaware) 100% COMMERCE APPRAISAL SERVICES, LLC (Delaware) 100% COMMERCE LAND TITLE AGENCY, LLC (Ohio) 100% COMMERCE LAND TITLE, INC. (Nevada) 100% COMMERCE TITLE COMPANY (California) 100% COMMERCE TITLE COMPANY, INC. (Alabama) 100% COMMERCE TITLE COMPANY OF NEW MEXICO, LLC (Delaware) 100% COMMERCE TITLE INSURANCE COMPANY (California) 100% COMMERCE TITLE VENTURES, LLC (Delaware) 100% CORE MORTGAGE CONNECTION, L.P. (Texas) 50.01% CTX MORTGAGE COMPANY, LLC (Delaware) 100% CTX MORTGAGE FUNDING III, LLC (Delaware) 100% CTX MORTGAGE FUNDING, LLC (Delaware) 100% CTX MORTGAGE VENTURES CORPORATION (Nevada) 100% CTX MORTGAGE VENTURES, LLC (Delaware) 100% CTX SWAP I, LLC (Delaware) 100% DALLAS SUBURBS MORTGAGE, L.P. (Texas) 50% DARDEN FINANCIAL SERVICES, L.P. (Texas) 50.01% DENALI FINANCIAL SERVICES, L.P. (Texas) 50.01% DUNDEE INSURANCE AGENCY, INC. (Texas) 100% EXPRESS FINANCIAL SERVICES, LIMITED PARTNERSHIP (North Carolina) 50.01% FAIRWAY FINANCIAL GROUP, L.P. (Texas) 50.01% FIRST CENTURY MORTGAGE, L.P. (Texas) 50.01% FLORIDA LANDMARK MORTGAGE, L.P. (Texas) 50.01% FOUR OAKS MORTGAGE, L.P. (North Carolina) 50.01% GLG MORTGAGE, L.P. (Texas) 50.01% HARWOOD INSURANCE SERVICES, LLC (California) 100%

Page 23

STATE OF OWNERSHIP SUBSIDIARY FORMATION PERCENTAGE HARWOOD SERVICE COMPANY OF GEORGIA, LLC (Georgia) 100% HARWOOD SERVICE COMPANY OF NEW JERSEY, LLC (New Jersey) 100% HARWOOD SERVICE COMPANY, LLC (Delaware) 100% HARWOOD STREET FUNDING I, LLC (Delaware) * HARWOOD STREET FUNDING II, LLC (Delaware) 100% HEARTLAND MORTGAGE, L.P. (California) 50.01% HOMEFRONTMORTGAGE, L.P. (Washington 50.01% LEWIS MORTGAGE COMPANY, L.P. (Texas) 50.01% LMX FINANCIAL SERVICES, LTD. (Florida) 50.01% METROPOLITAN TAX SERVICE, INC. (Nevada) 100% METROPOLITAN TITLE & GUARANTY COMPANY (Florida) 100% MH ACQUISITION COMPANY, LLC (Delaware) 100% MORTGAGE PORTFOLIO SERVICES, INC. (Delaware) 100% MPS FUNDING CORPORATION (Delaware) 100% NAB ASSET COMPANY, LLC (Texas) 100% NEW HOME MORTGAGE SPECIALISTS, L.P. (Washington) 50.01% OPTIMA INFORMATION SOLUTIONS, LLC (Delaware) 71% PACIFIC AMERICAN MORTGAGE COMPANY (Texas) 100% PENNSTAR FINANCIAL, LLC (Delaware) 50.01% PINE RIDGE FINANCIAL, L.P. (Washington) 50.01% ROBERG FINANCIAL, L.P. (Texas) 50.01% T.W. LEWIS MORTGAGE COMPANY, L.P. (Texas) 50.01% VENTURE TITLE AGENCY, LTD., LLLP (Florida) 50.02% WESTWOOD INSURANCE AGENCY (Nevada) 100% WESTWOOD INSURANCE AGENCY OF ARIZONA, INC. (Arizona) 100% WESTWOOD INSURANCE AGENCY (California) 100% ARMOR INSURANCE COMPANY (Vermont) 100% CENTEX INTERNATIONAL, INC. (Nevada) 100% CENTEX INTERNATIONAL, LLC (Delaware) 98.95% CENTEX LIFE SOLUTIONS, INC. (Nevada) 100% CENTEX MANAGEMENT SERVICES LIMITED (United Kingdom) 98.95% CENTEX SERVICE COMPANY (Nevada) 100% CTX HOLDING COMPANY (Nevada) 100% 21 HOUSING COMPANY, LLC (Delaware) 100% AAA HOLDINGS, INC. (Delaware) 100% ABC HOMES LIMITED (United Kingdom) 50% BARRINGTON CARPET, LLC (Delaware) 100% CENTEX BUILDING SERVICES, INC. (Nevada) 100% CENTEX DEVELOPMENT MANAGEMENT COMPANY (Nevada) 100% CENTEX HOMES (Nevada) 99.95% CENTEX HOMES INTERNATIONAL LIMITED (United Kingdom) 100% CENTEX HOMES MARKETING, INC. (Georgia) 100%

Page 24

STATE OF OWNERSHIP SUBSIDIARY FORMATION PERCENTAGE CENTEX HOMES OF CALIFORNIA II, LLC (Delaware) 99.73% CENTEX HOMES OF CALIFORNIA, LLC (Delaware) 99.73% CENTEX HOMES REALTY COMPANY (Nevada) 100% CENTEX HOMES REALTY, INC. (Michigan) 100% CENTEX HOMES, INC. (Texas) 100% CENTEX HOMES, LLC (Delaware) 99.95% CENTEX LATIN AMERICA, INC. (Nevada) 100% CENTEX LOST CREEK RANCH, LLC (Delaware) 99.95% CENTEX MANUFACTURED HOUSING GROUP, LLC (Delaware) 100% CENTEX REAL ESTATE CONSTRUCTION COMPANY (Nevada) 100% CENTEX REAL ESTATE CORPORATION (Nevada) 100% CENTEX REALTY, INC. (Florida) 100% CITY HOMEBUILDERS, INC. (Texas) 100% COYOTE CANYON, LLC (Delaware) 99.95% CTX BUILDERS SUPPLY SERVICES, LLC (Delaware) 99.95% DESARROLLOS EN LATINOAMERICA SERVICIOS ADMINSTRATIVOS S DE RL DE CV (Mexico) 100% EMPRESAS INMOBILIARIAS DE MEXICO, S. DE R.L. DE C.V. (Mexico) 100% FOX & JACOBS, INC. (Texas) 100% MEADOW VISTA COMPANY, LLC (Delaware) 100% MELROSE PARK JOINT VENTURE (Florida) 53.31% SELECTIVE - DELAWARE, L.L.C. (Delaware) 99.95% ST LENDING, INC. (Delaware) 99.73% SUNSET RANCHOS DEVELOPERS, LLC (Delaware) 99.95% SYCAMORE CREEK (California) 50.00% THE JONES COMPANY BUILDING SERVICES, LLC (Nevada) 99.95% THE JONES COMPANY HOMES, LLC (Nevada) 99.95% THE JONES COMPANY HOMES REALTY, LLC (Nevada) 99.95% WAYNE HOMES, LLC (Delaware) 97.44% WAYNE HOMES MID ATLANTIC, LLC (Delaware) 99.95% CENTEX HOME SERVICES COMPANY (Nevada) 100% CENTEX HOMETEAM LAWN CARE, LLC (Delaware) 100% CENTEX HOMETEAM SECURITY, INC. (Nevada) 100% HOMETEAM PEST DEFENSE, INC. (Nevada) 100% HOMETEAM PEST DEFENSE, LLC (Delaware) 100% BATESON DAILEY, A JOINT VENTURE (Michigan) 65% CENTEX ATLANTIC, LCL (Delaware) 100% CENTEX CONCORD (Tennessee) 50% CENTEX CONCORD PROPERTY MANAGEMENT, L.L.C. (Tennessee) 50% CENTEX CONSTRUCTION COMPANY, INC. (Nevada) 100% CENTEX CONSTRUCTION GROUP, INC. (Nevada) 100% CENTEX CONSTRUCTION GROUP SERVICES, LLC (Delaware) 100%

Page 25

STATE OF OWNERSHIP SUBSIDIARY FORMATION PERCENTAGE CENTEX ENGINEERING & CONSTRUCTION, INC. (Nevada) 100% CENTEX GOLDEN CONSTRUCTION COMPANY (Nevada) 100% CENTEX LANDIS LIMITED LIABILITY COMPANY NO.1 (Louisiana) 100% CENTEX RODGERS, INC. (Nevada) 100% CENTEX ROONEY CONSTRUCTION CO., INC./HUBER, HUNT & NICHOLS, INC., A JOINT VENTURE (Florida) 65% CENTEX ROONEY CONSTRUCTION CO., INC./LANDIS COMPANY, INC. A JOINT VENTURE Louisiana) 70% CENTEX ROONEY CONSTRUCTION CO., INC./RATTLER CONSTRUCTION CONTRACTORS, INC., A JOINT VENTURE (Florida) 75% CENTEX ROONEY CONSTRUCTION COMPANY/ACI, A JOINT VENTURE (Florida) 50% CENTEX ROONEY MARINE, INC. (Florida) 100% CENTEX ROONEY/GRAY CONSTRUCTION, A JOINT VENTURE (Florida) 85% CENTEX ROONEY/HLM CORRECTIONAL DESIGN BUILDERS, LC (Florida) 70% CENTEX ROONEY/KBJ DESIGN/BUILD, L.L.C. (Delaware) 90% CENTEX ROONEY/LLT, A JOINT VENTURE (Florida) 75% CENTEX ROONEY/PGAL DESIGN BUILDERS, L.C. (Florida) 90% CENTEX ROONEY/RS&H DESIGN BUILDERS, L.C. (Florida) 90% CENTEX ROONEY/SCHENKEL SHULTZ DESIGN/BUILDERS, L.C. (Florida) 50% CENTEX SEISMIC SERVICES, INC. (Nevada) 95% CENTEX/F&S, L.L.C. (Delaware) 100% CENTEX/FPC, L.L.C. (Delaware) 100% CENTEX/HKS II, L.L.C. (Delaware) 100% CENTEX/HKS, CANYON, L.L.C. (Delaware) 100% CENTEX/HKS, L.L.C. (Delaware) 100% CENTEX/MASHBURN, A JOINT VENTURE (North Carolina) 65% CENTEX/MORRIS II, L.L.C. (Delaware) 100% CENTEX/MORRIS, L.L.C. (Delaware) 100% CENTEX/OMNIPLAN, L.L.C. (Delaware) 100% CENTEX/OMNIPLAN II, L.L.C. (Delaware) 100% CENTEX/SCHENKEL SHULTZ, L.L.C. (Delaware) 100% CENTEX/SHG, L.L.C. (Delaware) 100% CENTEX/SICNER, LLC (Delaware) 90% CENTEX/WORTHGROUP, L.L.C. (Delaware) 100% CENTEX-3D/I, A JOINT VENTURE (Texas) 90% CENTEX-AIM CONSTRUCTION, L.L.C. (Michigan) 80% CENTEX-GILFORD, A JOINT VENTURE (Virginia) 79.58% CENTEX-GILFORD, A JOINT VENTURE II (Virginia) 88% CENTEX-ROONEY CONSTRUCTION CO., INC. (Florida) 100% CENTEX-ROONEY CONSTRUCTION CO. OF GEORGIA, LLC (Delaware) 100% CENTEX-ROONEY CONSTRUCTION CO., INC./CONSTRUCT TWO CONSTRUCTION MANAGERS, INC., A JOINT VENTURE (Florida) 90%

Page 26

STATE OF OWNERSHIP SUBSIDIARY FORMATION PERCENTAGE CKC FACILITIES GROUP, L.C. (Florida) 60% GHQ COMPANY, INC. (Nevada) 100% INDEPENDENT GENERAL AGENCY, INC. (Texas) 100% KIRCHMAN/CENTEX, A JOINT VENTURE (Florida) 75% THE STUDENT COMMUNITIES GROUP, L.C. (Florida) 50%

Page 27

UNRESTRICTED STATE OF OWNERSHIP SUBSIDIARY FORMATION PERCENTAGE CDMC HOLDING, INC. (Nevada) 100% GREAT LAKES DEVELOPMENT CO., INC. (Nevada) 100.00% CROSLAND ACCEPTANCE ASSOCIATES V (North Carolina) 100% CROSLAND BOND COMPANY (North Carolina) 100% GENBOND TWO, INC. (North Carolina) 100% JOHN CROSLAND COMPANY (North Carolina) 100% MORTGAGE ACCEPTANCE ASSOCIATES NO. 2 (North Carolina) 100% MORTGAGE COLLATERAL ASSOCIATES NO. 1 (North Carolina) 100% MORTGAGE COLLATERAL ASSOCIATES NO. 3 (North Carolina) 100% CENTEX CONSTRUCTION PRODUCTS, INC. (Delaware) 65.10% AMERICAN GYPSUM COMPANY (Delaware) 65.10% AMERICAN GYPSUM MARKETING COMPANY (Delaware) 65.10% CCP CEMENT COMPANY (Nevada) 65.10% CCP CONCRETE/AGGREGATES LLC (Delaware) 65.10% CCP GYPSUM COMPANY (Nevada) 65.10% CCP LAND COMPANY (Nevada) 65.10% CENTEX CEMENT CORPORATION (Nevada) 65.10% CENTEX MATERIALS LLC (Delaware) 65.10% CXP FUNDING, LLC (Delaware) 65.10% HOLLIS & EASTERN RAILROAD COMPANY LLC (Delaware) 65.10% M & W DRYWALL SUPPLY COMPANY (Nevada) 65.10% MATHEWS READYMIX LLC (California) 65.10% MOUNTAIN CEMENT COMPANY (Nevada) 65.10% NEVADA CEMENT COMPANY (Nevada) 65.10% REPUBLIC PAPERBOARD COMPANY LLC (Delaware) 65.10% TEXAS CEMENT COMPANY (Nevada) 65.10% TLCC GP LLC (Delaware) 65.10% TLCC LP LLC (Delaware) 65.10% WESTERN AGGREGATES LLC (Nevada) 65.10% WESTERN CEMENT COMPANY OF CALIFORNIA (California) 65.10% A. W. MORTGAGE, L.P. (Texas) 50.01% ADFINET, INC. (Nevada) 100% ADFITECH, INC. (Nevada) 100% AMERICAN LANDMARK MORTGAGE, LTD. (Florida) 50.01% ASHLEY TURNER FINANCE, L.P. (Texas) 50.01% AT-HOME MORTGAGE ASSOCIATES, LTD. (Florida) 50.01% AUSTIN PARTNERS IN LENDING, L.P. (Texas) 50.01% BANYAN FINANCIAL OF CENTRAL FLORIDA, L.P. (Texas) 50.01% BENEFIT ASSET MANAGEMENT CORPORATION (California) 100%

Page 28

UNRESTRICTED STATE OF OWNERSHIP SUBSIDIARY FORMATION PERCENTAGE BUILDER'S HOME MORTGAGE, L.P. (Washington) 50.01% CALIFORNIA HOME MORTGAGE, L.P. (Texas) 50.01% CENTEX EQUITY CORPORATION (Nevada) 100% CENTEX FINANCIAL SERVICES, INC. (Nevada) 100% CENTEX HOME EQUITY COMPANY, LLC (Delaware) 100% CENTEX OFFICE VICEROY I, L.P. (Delaware) 100% CENTEX TECHNOLOGY, INC. (Nevada) 100% CENTEX TITLE & ANCILLARY SERVICES, INC. (Nevada) 100% CENTEX VICEROY GENERAL PARTNER, LLC (Delaware) 100% CHEC ASSET RECEIVABLE CORPORATION (Nevada) 100% CHEC CONDUIT FUNDING, LLC (Delaware) 100% CHEC FUNDING, LLC (Delaware) 100% CHEC INDUSTRIAL LOAN COMPANY (Tennessee) 100% CHEC INDUSTRIAL LOAN CORPORATION (Minnesota) 100% CHEC RESIDUAL, LLC (Delaware) 100% COMMERCE APPRAISAL SERVICES, LLC (Delaware) 100% COMMERCE LAND TITLE AGENCY, LLC (Ohio) 100% COMMERCE LAND TITLE, INC. (Nevada) 100% COMMERCE TITLE COMPANY (California) 100% COMMERCE TITLE COMPANY, INC. (Alabama) 100% COMMERCE TITLE COMPANY OF NEW MEXICO, LLC (Delaware) 100% COMMERCE TITLE INSURANCE COMPANY (California) 100% COMMERCE TITLE VENTURES, LLC (Delaware) 100% CORE MORTGAGE CONNECTION, L.P. (Texas) 50.01% CTX MORTGAGE COMPANY, LLC (Delaware) 100% CTX MORTGAGE FUNDING III, LLC (Delaware) 100% CTX MORTGAGE FUNDING, LLC (Delaware) 100% CTX MORTGAGE VENTURES CORPORATION (Nevada) 100% CTX MORTGAGE VENTURES, LLC (Delaware) 100% CTX SWAP I, LLC (Delaware) 100% DALLAS SUBURBS MORTGAGE, L.P. (Texas) 50% DARDEN FINANCIAL SERVICES, L.P. (Texas) 50.01% DENALI FINANCIAL SERVICES, L.P. (Texas) 50.01% DUNDEE INSURANCE AGENCY, INC. (Texas) 100% EXPRESS FINANCIAL SERVICES, LIMITED PARTNERSHIP (North Carolina) 50.01% FAIRWAY FINANCIAL GROUP, L.P. (Texas) 50.01% FIRST CENTURY MORTGAGE, L.P. (Texas) 50.01% FLORIDA LANDMARK MORTGAGE, L.P. (Texas) 50.01% FOUR OAKS MORTGAGE, L.P. (North Carolina) 50.01% GLG MORTGAGE, L.P. (Texas) 50.01% HARWOOD INSURANCE SERVICES, LLC (California) 100%

Page 29

UNRESTRICTED STATE OF OWNERSHIP SUBSIDIARY FORMATION PERCENTAGE HARWOOD SERVICE COMPANY OF GEORGIA, LLC (Georgia) 100% HARWOOD SERVICE COMPANY OF NEW JERSEY, LLC (New Jersey) 100% HARWOOD SERVICE COMPANY, LLC (Delaware) 100% HARWOOD STREET FUNDING I, LLC (Delaware) * HARWOOD STREET FUNDING II, LLC (Delaware) 100% HEARTLAND MORTGAGE, L.P. (California) 50.01% HOMEFRONTMORTGAGE, L.P. (Washington 50.01% LEWIS MORTGAGE COMPANY, L.P. (Texas) 50.01% LMX FINANCIAL SERVICES, LTD. (Florida) 50.01% METROPOLITAN TAX SERVICE, INC. (Nevada) 100% METROPOLITAN TITLE & GUARANTY COMPANY (Florida) 100% MH ACQUISITION COMPANY, LLC (Delaware) 100% MORTGAGE PORTFOLIO SERVICES, INC. (Delaware) 100% MPS FUNDING CORPORATION (Delaware) 100% NAB ASSET COMPANY, LLC (Texas) 100% NEW HOME MORTGAGE SPECIALISTS, L.P. (Washington) 50.01% OPTIMA INFORMATION SOLUTIONS, LLC (Delaware) 71% PACIFIC AMERICAN MORTGAGE COMPANY (Texas) 100% PENNSTAR FINANCIAL, LLC (Delaware) 50.01% PINE RIDGE FINANCIAL, L.P. (Washington) 50.01% ROBERG FINANCIAL, L.P. (Texas) 50.01% T.W. LEWIS MORTGAGE COMPANY, L.P. (Texas) 50.01% VENTURE TITLE AGENCY, LTD., L.P. (Florida) 50.02% WESTWOOD INSURANCE AGENCY (Nevada) 100% WESTWOOD INSURANCE AGENCY OF ARIZONA, INC. (Arizona) 100% WESTWOOD INSURANCE AGENCY (California) 100%

* Owned 100% by holders of various series of Subordinated Certificates issued by Harwood Street Funding I, LLC. These holders are not affiliated with Centex Corporation. Page 30 EX-31.1 6 d10298exv31w1.htm EX-31.1 CERTIFICATION OF CEO-RULE 13A-14 & 15D-14

Exhibit 31.1

Certifications

I, Laurence E. Hirsch, certify that:

1.     I have reviewed this report on Form 10-Q of Centex Corporation;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 10, 2003

/s/ LAURENCE E. HIRSCH Laurence E. Hirsch

Chief Executive Officer

EX-31.2 7 d10298exv31w2.htm EX-31.2 CERTIFICATION OF CFO-RULE 13A-14 & 15D-14

Exhibit 31.2

Certifications

I, Leldon E. Echols, certify that:

1.     I have reviewed this report on Form 10-Q of Centex Corporation;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 10, 2003

/s/ LELDON E. ECHOLS Leldon E. Echols

Chief Financial Officer

EX-31.3 8 d10298exv31w3.htm EX-31.3 CERTIFICATION OF CEO-RULE 13A-14 & 15D-14

Exhibit 31.3

Certifications

I, Stephen M. Weinberg, certify that:

1.     I have reviewed this report on Form 10-Q of 3333 Holding Corporation;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 10, 2003

/s/ STEPHEN M. WEINBERG Stephen M. Weinberg

Chief Executive Officer

EX-31.4 9 d10298exv31w4.htm EX-31.4 CERTIFICATION OF CFO-RULE 13A-14 & 15D-14

Exhibit 31.4

Certifications

I, Todd D. Newman, certify that:

1.     I have reviewed this report on Form 10-Q of 3333 Holding Corporation;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 10, 2003

/s/ TODD D. NEWMAN Todd D. Newman

Chief Financial Officer

EX-31.5 10 d10298exv31w5.htm EX-31.5 CERTIFICATION OF CEO-RULE 13A-14 & 15D-14

Exhibit 31.5

Certifications

I, Stephen M. Weinberg, certify that:

1.     I have reviewed this report on Form 10-Q of Centex Development Company, L.P.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 10, 2003

/s/ STEPHEN M. WEINBERG Stephen M. Weinberg

Chief Executive Officer of 3333 Development Corporation,

General Partner of Centex Development Company, L.P.

EX-31.6 11 d10298exv31w6.htm EX-31.6 CERTIFICATION OF CFO-RULE 13A-14 & 15D-14

Exhibit 31.6

Certifications

I, Todd D. Newman, certify that:

1.     I have reviewed this report on Form 10-Q of Centex Development Company, L.P.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 10, 2003

/s/ TODD D. NEWMAN Todd D. Newman

Chief Financial Officer of 3333 Development Corporation,

General Partner of Centex Development Company, L.P.

EX-32.1 12 d10298exv32w1.htm EX-32.1 CERTIFICATION OF CEO - SECTION 906

\

EXHIBIT 32.1

CENTEX CORPORATION

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Centex Corporation and Subsidiaries (the “Company”) on Form 10-Q for the period ending September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Laurence E. Hirsch, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

     (1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ LAURENCE E. HIRSCH

Laurence E. Hirsch

Chief Executive Officer

Date: November 10, 2003

EX-32.2 13 d10298exv32w2.htm EX-32.2 CERTIFICATION OF CFO - SECTION 906

EXHIBIT 32.2

CENTEX CORPORATION

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Centex Corporation and Subsidiaries (the “Company”) on Form 10-Q for the period ending September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Leldon E. Echols, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

     (1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ LELDON E. ECHOLS

Leldon E. Echols

Chief Financial Officer

Date: November 10, 2003

EX-32.3 14 d10298exv32w3.htm EX-32.3 CERTIFICATION OF CEO - SECTION 906

EXHIBIT 32.3

3333 HOLDING CORPORATION

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of 3333 Holding Corporation and Subsidiary and Centex Development Company, L.P. and Subsidiaries on Form 10-Q for the period ending September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen M. Weinberg, Chief Executive Officer of 3333 Holding Corporation, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

     (1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of 3333 Holding Corporation and Subsidiary.

/s/ STEPHEN M. WEINBERG

Stephen M. Weinberg

Chief Executive Officer

Date: November 10, 2003

EX-32.4 15 d10298exv32w4.htm EX-32.4 CERTIFICATION OF CFO - SECTION 906

EXHIBIT 32.4

3333 HOLDING CORPORATION

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of 3333 Holding Corporation and Subsidiary and Centex Development Company, L.P. and Subsidiaries on Form 10-Q for the period ending September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Todd D. Newman, Chief Financial Officer of 3333 Holding Corporation, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

     (1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of 3333 Holding Corporation and Subsidiary.

/s/ TODD D. NEWMAN

Todd D. Newman

Chief Financial Officer

Date: November 10, 2003

EX-32.5 16 d10298exv32w5.htm EX-32.5 CERTIFICATION OF CEO - SECTION 906

EXHIBIT 32.5

CENTEX DEVELOPMENT COMPANY, L.P.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of 3333 Holding Corporation and Subsidiary and Centex Development Company, L.P. and Subsidiaries on Form 10-Q for the period ending September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen M. Weinberg, Chief Executive Officer of 3333 Development Corporation, the general partner of Centex Development Company, L.P., certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

     (1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Centex Development Company, L.P. and Subsidiaries.

/s/ STEPHEN M. WEINBERG

Stephen M. Weinberg

Chief Executive Officer

Date: November 10, 2003

EX-32.6 17 d10298exv32w6.htm EX-32.6 CERTIFICATION OF CFO - SECTION 906

EXHIBIT 32.6

CENTEX DEVELOPMENT COMPANY, L.P.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of 3333 Holding Corporation and Subsidiary and Centex Development Company, L.P. and Subsidiaries on Form 10-Q for the period ending September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Todd D. Newman, Chief Financial Officer of 3333 Development Corporation, the general partner of Centex Development Company, L.P., certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

     (1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Centex Development Company, L.P. and Subsidiaries.

/s/ TODD D. NEWMAN

Todd D. Newman

Chief Financial Officer

Date: November 10, 2003

-----END PRIVACY-ENHANCED MESSAGE-----

EX-10.1(A)

                                                                    EXHIBIT 10.1

                                CREDIT AGREEMENT

                                      among

                               CENTEX CORPORATION,
                                    Borrower

                             BANK OF AMERICA, N.A.,
                              Administrative Agent

                                       and

                            THE LENDERS NAMED HEREIN,
                                     Lenders

                                  $800,000,000

                           DATED AS OF AUGUST 7, 2003

                               JPMORGAN CHASE BANK
                                       and
                             ROYAL BANK OF SCOTLAND,
                              Co-Syndication Agents

                          CITICORP NORTH AMERICA, INC.,
                               Documentation Agent

                                  BANK ONE, NA,
                                  BNP PARIBAS,
                        CREDIT LYONNAIS NEW YORK BRANCH,
                                       and
                           CREDIT SUISSE FIRST BOSTON,
                                 Managing Agents

                         BANC OF AMERICA SECURITIES LLC,
                    Sole Lead Arranger and Sole Book Manager



                                TABLE OF CONTENTS



                                                                                        Page
                                                                                     
SECTION 1 DEFINITIONS AND TERMS.......................................................    1

    1.1   DEFINITIONS.................................................................    1

    1.2   NUMBER AND GENDER OF WORDS; OTHER REFERENCES................................   15

    1.3   ACCOUNTING PRINCIPLES.......................................................   15

    1.4   TIME REFERENCES.............................................................   15

SECTION 2 BORROWING PROVISIONS........................................................   15

    2.1   COMMITMENTS.................................................................   15

    2.2   LENDERS; INCREASE IN TOTAL COMMITMENT.......................................   16

    2.3   VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS...........................   17

    2.4   BORROWING PROCEDURE.........................................................   17

    2.5   EXTENSION OF TERMINATION DATE...............................................   18

SECTION 3 TERMS OF PAYMENT............................................................   19

    3.1   NOTES AND PAYMENTS..........................................................   19

    3.2   INTEREST AND PRINCIPAL PAYMENTS.............................................   19

    3.3   INTEREST OPTIONS............................................................   20

    3.4   QUOTATION OF RATES..........................................................   20

    3.5   DEFAULT RATE................................................................   20

    3.6   INTEREST RECAPTURE..........................................................   20

    3.7   INTEREST CALCULATIONS.......................................................   21

    3.8   MAXIMUM RATE................................................................   21

    3.9   INTEREST PERIODS............................................................   21

    3.10  CONVERSIONS; CONTINUATIONS..................................................   22

    3.11  ORDER OF APPLICATION........................................................   22

    3.12  RIGHT OF SET-OFF; ADJUSTMENTS...............................................   23

    3.13  BOOKING BORROWINGS..........................................................   23

SECTION 4 CHANGE IN CIRCUMSTANCES.....................................................   23

    4.1   INCREASED COST AND REDUCED RETURN...........................................   23


CREDIT AGREEMENT

                                        i



                                                                                        
    4.2   LIMITATION ON TYPES OF BORROWINGS.............................................   25

    4.3   ILLEGALITY....................................................................   25

    4.4   TREATMENT OF AFFECTED LOANS...................................................   25

    4.5   COMPENSATION..................................................................   26

    4.6   TAXES.........................................................................   26

SECTION 5 FEES..........................................................................   27

    5.1   TREATMENT OF FEES.............................................................   27

    5.2   FEES OF ADMINISTRATIVE AGENT..................................................   28

    5.3   FACILITY FEES.................................................................   28

    5.4   UTILIZATION FEE...............................................................   28

SECTION 6 CONDITIONS PRECEDENT..........................................................   28

    6.1   CONDITIONS PRECEDENT TO CLOSING...............................................   28

    6.2   CONDITIONS TO ALL CREDIT EXTENSIONS...........................................   29

SECTION 7 REPRESENTATIONS AND WARRANTIES................................................   30

    7.1   PURPOSE OF CREDIT FACILITY....................................................   30

    7.2   EXISTENCE, GOOD STANDING, AUTHORITY, AND AUTHORIZATIONS.......................   30

    7.3   SUBSIDIARIES; CAPITAL STOCK...................................................   30

    7.4   AUTHORIZATION AND CONTRAVENTION...............................................   30

    7.5   BINDING EFFECT................................................................   31

    7.6   FINANCIAL STATEMENTS..........................................................   31

    7.7   LITIGATION, CLAIMS, INVESTIGATIONS............................................   31

    7.8   TAXES.........................................................................   31

    7.9   ENVIRONMENTAL MATTERS.........................................................   31

    7.10  EMPLOYEE BENEFIT PLANS........................................................   32

    7.11  PROPERTIES; LIENS.............................................................   32

    7.12  GOVERNMENT REGULATIONS........................................................   32

    7.13  TRANSACTIONS WITH AFFILIATES..................................................   32

    7.14  NO DEFAULT....................................................................   32

    7.15  SOLVENCY......................................................................   32

    7.16  COMPLIANCE WITH LEGAL REQUIREMENTS............................................   33

    7.17  FULL DISCLOSURE...............................................................   33



CREDIT AGREEMENT

                                       ii



                                                                                        
    7.18  SENIOR DEBT...................................................................   33

    7.19  TAX SHELTER REGULATIONS.......................................................   33

SECTION 8 AFFIRMATIVE COVENANTS.........................................................   33

    8.1   USE OF PROCEEDS...............................................................   33

    8.2   BOOKS AND RECORDS.............................................................   33

    8.3   ITEMS TO BE FURNISHED.........................................................   33

    8.4   INSPECTIONS...................................................................   35

    8.5   TAXES.........................................................................   35

    8.6   PAYMENT OF OBLIGATIONS........................................................   36

    8.7   MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS................................   36

    8.8   INSURANCE.....................................................................   36

    8.9   PRESERVATION AND PROTECTION OF RIGHTS.........................................   36

    8.10  ENVIRONMENTAL LAWS............................................................   36

    8.11  COMPLIANCE WITH LEGAL REQUIREMENTS............................................   36

    8.12  DESIGNATION OF UNRESTRICTED SUBSIDIARIES......................................   36

SECTION 9 NEGATIVE COVENANTS............................................................   38

    9.1   EMPLOYEE BENEFIT PLANS........................................................   38

    9.2   LIENS.........................................................................   38

    9.3   SUBSIDIARY INDEBTEDNESS; LIMITATIONS ON UPSTREAMING...........................   39

    9.4   TRANSACTIONS WITH AFFILIATES..................................................   39

    9.5   COMPLIANCE WITH DOCUMENTS.....................................................   39

    9.6   ASSIGNMENT....................................................................   40

    9.7   FISCAL YEAR AND ACCOUNTING METHODS............................................   40

    9.8   GOVERNMENT REGULATIONS........................................................   40

    9.9   SALE OF ASSETS................................................................   40

    9.10  MERGERS AND DISSOLUTIONS; SALE OF CAPITAL STOCK...............................   40

    9.11  NEW BUSINESS..................................................................   40

    9.12  FINANCIAL COVENANTS...........................................................   40

SECTION 10 DEFAULT......................................................................   41

    10.1  PAYMENT OF OBLIGATION.........................................................   41

    10.2  COVENANTS.....................................................................   41



CREDIT AGREEMENT

                                       iii



                                                                                        
    10.3  DEBTOR RELIEF.................................................................   41

    10.4  JUDGMENTS AND ATTACHMENTS.....................................................   42

    10.5  GOVERNMENT ACTION.............................................................   42

    10.6  MISREPRESENTATION.............................................................   42

    10.7  CHANGE OF CONTROL.............................................................   42

    10.8  DEFAULT UNDER OTHER DEBT AND AGREEMENTS.......................................   42

    10.9  EMPLOYEE BENEFIT PLANS........................................................   42

    10.10 VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS.................................   43

SECTION 11 RIGHTS AND REMEDIES..........................................................   43

    11.1  REMEDIES UPON DEFAULT.........................................................   43

    11.2  BORROWER WAIVERS..............................................................   44

    11.3  PERFORMANCE BY ADMINISTRATIVE AGENT...........................................   44

    11.4  DELEGATION OF DUTIES AND RIGHTS...............................................   44

    11.5  NOT IN CONTROL................................................................   44

    11.6  COURSE OF DEALING.............................................................   44

    11.7  CUMULATIVE RIGHTS.............................................................   45

    11.8  APPLICATION OF PROCEEDS.......................................................   45

    11.9  CERTAIN PROCEEDINGS...........................................................   45

    11.10 EXPENSES; INDEMNIFICATION.....................................................   45

SECTION 12 ADMINISTRATIVE AGENT.........................................................   46

    12.1  APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.........................   46

    12.2  DELEGATION OF DUTIES..........................................................   46

    12.3  LIABILITY OF ADMINISTRATIVE AGENT.............................................   47

    12.4  RELIANCE BY ADMINISTRATIVE AGENT..............................................   47

    12.5  NOTICE OF EVENT OF DEFAULT....................................................   47

    12.6  CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT............   48

    12.7  INDEMNIFICATION OF ADMINISTRATIVE AGENT.......................................   48

    12.8  ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY...............................   49

    12.9  SUCCESSOR ADMINISTRATIVE AGENT................................................   49

    12.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIMS................................   49

    12.11 OTHER AGENT; ARRANGERS; AND MANAGERS..........................................   50



CREDIT AGREEMENT

                                       iv



                                                                                        
SECTION 13 MISCELLANEOUS................................................................   50

    13.1  HEADINGS......................................................................   50

    13.2  NONBUSINESS DAYS..............................................................   50

    13.3  COMMUNICATIONS................................................................   50

    13.4  FORM AND NUMBER OF DOCUMENTS..................................................   51

    13.5  EXCEPTIONS TO COVENANTS.......................................................   51

    13.6  SURVIVAL......................................................................   51

    13.7  GOVERNING LAW.................................................................   52

    13.8  INVALID PROVISIONS............................................................   52

    13.9  ENTIRETY......................................................................   52

    13.10 JURISDICTION; VENUE; SERVICE OF PROCESS; JURY TRIAL...........................   52

    13.11 AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS..................................   53

    13.12 MULTIPLE COUNTERPARTS.........................................................   53

    13.13 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS........................   54

    13.14 DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN
          CIRCUMSTANCES... .............................................................   56

    13.15 LIMITED WAIVER................................................................   56

    13.16 CONFIDENTIALITY...............................................................   56



CREDIT AGREEMENT

                                        v



                             SCHEDULES AND EXHIBITS

                          
Schedule 2.1            -       Lenders and Commitments; Addresses for Notice
Schedule 7.3            -       Subsidiaries and Stock

Exhibit A               -       Form of Revolving Note
Exhibit B               -       Form of Compliance Certificate
Exhibit C-1             -       Form of Notice of Borrowing
Exhibit C-2             -       Form of Notice of Conversion/Continuation
Exhibit C-3             -       Form of Notice of Prepayment
Exhibit D               -       Form of Opinion of Counsel
Exhibit E               -       Form of Assignment and Acceptance Agreement



CREDIT AGREEMENT

                                       vi



                                CREDIT AGREEMENT

         THIS CREDIT AGREEMENT is entered into as of August 7, 2003 (the
"CLOSING DATE") among CENTEX CORPORATION, a Nevada corporation ("BORROWER"),
Lenders (hereinafter defined), and BANK OF AMERICA, N.A., as Administrative
Agent (hereinafter defined).

                                R E C I T A L S

         A.       Borrower has requested that Lenders extend credit to Borrower
in the form of this Agreement, providing for, among other things, a revolving
credit facility in the aggregate principal amount of up to $800,000,000.

         B.       Upon and subject to the terms and subject to the conditions of
this Agreement, Lenders are willing to extend such credit to Borrower.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

SECTION 1 DEFINITIONS AND TERMS.

         1.1      DEFINITIONS. As used herein:

         ACCEPTING LENDERS is defined in SECTION 2.5.

         ADJUSTED EURODOLLAR RATE means, for any Eurodollar Borrowing for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100th of 1%) determined by Administrative Agent to be equal to the
quotient obtained by dividing (a) the Eurodollar Rate for such Eurodollar
Borrowing for such Interest Period by (b) one (1) minus the Reserve Requirement
for such Eurodollar Borrowing for such Interest Period.

         ADMINISTRATIVE AGENT means Bank of America, N.A., and its permitted
successors and assigns as "Administrative Agent" for Lenders under this
Agreement.

         AFFILIATE of any Person means any other Person who directly or
indirectly controls, or is controlled by, or is under common control with, such
Person, and, for purposes of this definition only, "control," "controlled by,"
and "under common control with" mean possession, directly or indirectly, of the
power to direct or cause the direction of management or policies (whether
through ownership of voting securities, by contract, or otherwise).

         AGENT-RELATED PERSONS means Administrative Agent, together with its
Affiliates (including Arranger), and the officers, directors, employees, agents
and attorneys-in-fact of such Persons and Affiliates.

         AGREEMENT means this Credit Agreement (as the same may hereafter be
amended, modified, supplemented, or restated from time to time).

CREDIT AGREEMENT



         APPLICABLE LENDING OFFICE means, for each Lender and for each Type of
Borrowing, the "Lending Office" of such Lender (or an Affiliate of such Lender)
designated on SCHEDULE 2.1 or such other office as such Lender may from time to
time specify to Administrative Agent and Borrower by written notice in
accordance with the terms hereof as the office by which its Borrowings of such
Type are to be made and maintained.

         APPLICABLE MARGIN means, as of any date of determination, the interest
margin over the Prime Rate or the Adjusted Eurodollar Rate, and the applicable
fees payable pursuant to SECTION 5.3 and SECTION 5.4, as the case may be, that
corresponds to the Moody's Rating and the S & P Rating set forth below on such
date of determination:



- --------------------------------------------------------------------------------------------------------------------
                                               Applicable       Applicable
                                               Margin for       Margin for       Applicable          Applicable
                Moody's                        Prime Rate       Eurodollar       Margin for          Margin for
 Level          Rating       S & P Rating      Borrowings       Borrowings     Facility Fees      Utilization Fees
- --------------------------------------------------------------------------------------------------------------------
                                                                                
1            A3 or higher   A- or higher         0.0000%          0.5000%          0.1250%            0.1000%
- --------------------------------------------------------------------------------------------------------------------
2            Baa1           BBB+                 0.0000%          0.6000%          0.1750%            0.1250%
- --------------------------------------------------------------------------------------------------------------------
3            Baa2           BBB                  0.0000%          0.7000%          0.2000%            0.1500%
- --------------------------------------------------------------------------------------------------------------------
4            Baa3           BBB-                 0.0000%          0.8250%          0.2500%            0.2500%
- --------------------------------------------------------------------------------------------------------------------
5            Ba1 or lower   BB+ or lower or      0.2500%          1.0000%          0.3000%            0.2500%
             or Not Rated   Not
                            Rated
- --------------------------------------------------------------------------------------------------------------------


For purposes of the foregoing: (a) if the Moody's Rating and the S & P Rating
shall fall within different LEVELS, then the Applicable Margin shall be
determined by reference to the numerically higher LEVEL (e.g., if the S & P
Rating is in LEVEL 1 and the Moody's Rating is in LEVEL 2, then the Applicable
Margin shall be determined by reference to LEVEL 2); and (b) if either Moody's
or S & P no longer publishes ratings and Borrower and Administrative Agent
cannot agree on another ratings agency to replace Moody's or S & P, as the case
may be, then the Moody's Rating or the S & P Rating, as the case may be, shall
be deemed to be "Not Rated." Each change in the Applicable Margin shall be
effective, in the case of an upgrade, immediately following Administrative
Agent's receipt of notice from Borrower, as required in SECTION 8.3(G), of a
change in the Moody's Rating or the S & P Rating, and in the case of a
downgrade, on the date of the public announcement thereof.

         APPROVED FUND is defined in SECTION 13.13(G).

         ARRANGER means Banc of America Securities LLC, and its successors and
permitted assigns in its capacity as "Sole Lead Arranger" under the Loan
Documents.

         ATTORNEY COSTS means and includes all reasonable fees, expenses, and
disbursements of any law firm or other external counsel.

CREDIT AGREEMENT

                                        2



         AUTHORIZATIONS means all filings, recordings, and registrations with,
and all validations or exemptions, approvals, orders, authorizations, consents,
franchises, licenses, certificates, and permits from, any Governmental
Authority.

         BORROWER is defined in the preamble to this Agreement.

         BORROWING means any amount disbursed (a) by one or more Credit Parties
to Borrower under the Loan Documents, whether such amount constitutes an
original disbursement of funds or the Conversion or Continuation of an amount
outstanding, or (b) by any Credit Party in accordance with, and to satisfy the
obligations of Borrower under, any Loan Document.

         BORROWING DATE means any date on which a Credit Extension is made by
Lenders pursuant to the receipt by Administrative Agent of a Notice of Borrowing
from Borrower.

         BUSINESS DAY means (a) for all purposes, any day other than Saturday,
Sunday, and any other day on which commercial banking institutions are required
or authorized by any Legal Requirement to be closed at the place of
Administrative Agent's Payment Office or payments cannot be made on the United
States Fedwire System, and (b) in addition to the foregoing, in respect of any
Eurodollar Borrowing, a day on which dealings in United States dollars are
conducted in the London interbank market and commercial banks are open for
international business in London.

         CAPITALIZED LEASE OBLIGATIONS means all obligations under Capital
Leases taken at the amount thereof accounted for as liabilities in accordance
with GAAP.

         CAPITAL LEASE means any capital lease or sublease which should be
capitalized on a balance sheet in accordance with GAAP.

         CHANGE IN CONTROL means, with respect to any Person, any event or
series of events by which:

         (a)      any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of such Person or its Subsidiaries, and any Person acting
in its capacity as trustee, agent or other fiduciary or administrator of any
such plan) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934, except that a Person or group shall
be deemed to have "beneficial ownership" of all securities that such Person or
group has the right to acquire (such right, an "OPTION RIGHT"), whether such
right is exercisable immediately or only after the passage of time), directly or
indirectly, of fifty percent (50%) or more of the equity securities of such
Person entitled to vote for members of the board of directors or equivalent
governing body of such Person on a fully-diluted basis (and taking into account
all such securities that such Person or group has the right to acquire pursuant
to any option right); or

         (b)      during any period of twelve (12) consecutive months, a
majority of the members of the board of directors or other equivalent governing
body of such Person cease to be composed of individuals (i) who were members of
that board or equivalent governing body on the first day of such period, (ii)
whose election or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting at the time
of such election or nomination at least a majority of that board or equivalent
governing body, or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in clauses (i)
and (ii) above constituting at the time of such election or nomination at least
a majority of that board or equivalent

CREDIT AGREEMENT

                                        3



governing body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a member of
that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any Person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors).

         CLOSING DATE is defined in the preamble to this Agreement.

         COMMITMENT means, for any Lender at any date of determination, the
amount stated beside each Lender's name as set forth on SCHEDULE 2.1 or on the
most-recently amended SCHEDULE 2.1, if any, prepared by Administrative Agent
pursuant to SECTION 2.2 or SECTION 13.13 (which amount is subject to increase,
reduction, or cancellation in accordance with this Agreement).

         COMPANIES means, as of any date, Borrower and each of its Subsidiaries,
and COMPANY means any one of the Companies.

         COMPLIANCE CERTIFICATE means a certificate signed by a Responsible
Officer, substantially in the form of EXHIBIT B.

         CONSEQUENTIAL LOSS is defined in SECTION 4.5.

         CONSOLIDATED ADJUSTED NET INCOME means, for any period of
determination, consolidated net earnings (after income taxes and without
deduction for losses) of the Companies, but excluding (a) gains from
extraordinary items for such period, and (b) any aggregate net gain during such
period arising from the sale, exchange, or other disposition of capital assets
by the Companies (including any fixed assets, whether tangible or intangible,
all inventory sold in conjunction with the disposition of fixed assets, and all
securities (other than securities sold in the ordinary course of business)).

         CONSOLIDATED DEBT means, as of any date of determination, (a) all Debt
of the Restricted Companies, on a consolidated basis, minus (b) Excess Cash not
subject to any Liens or other restrictions not inherent in the particular
investment or obligation; provided that, for purposes of SECTION 8.12,
Consolidated Debt means, as of the date of determination, all Debt of the
Restricted Companies, on a consolidated basis.

         CONSOLIDATED EBITDA means, for any period of determination and without
duplication, the EBITDA of the Restricted Companies, on a consolidated basis.

         CONSOLIDATED INTEREST EXPENSE means, for any period of determination,
the Interest Expense of the Restricted Companies, on a consolidated basis.

         CONSOLIDATED TANGIBLE NET WORTH means, as of any date of determination,
Tangible Net Worth of the Companies (other than any Excluded Subsidiary), on a
consolidated basis determined in accordance with GAAP.

         CONSTITUENT DOCUMENTS means, with respect to any Person, its articles
or certificate of incorporation, bylaws, partnership agreement, organizational
documents, limited liability company agreement, trust agreement, or such other
documents as may govern such Person's formation, organization, and management.

CREDIT AGREEMENT

                                        4



         CONTINGENT OBLIGATIONS means as to any Person any obligation of such
Person guaranteeing any Debt, leases, dividends, or other obligations ("PRIMARY
OBLIGATIONS") of any other Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, and any other obligation of such Person, whether or not
contingent, pursuant to which such Person is liable under or with respect to a
primary obligation of a primary obligor, in each case that would be included on
a balance sheet of such Person (or disclosed and assigned a monetary value in
the footnotes thereto) properly prepared in accordance with GAAP as a
"Contingent Obligation."

         CONTINUE, CONTINUATION, and CONTINUED refers to the continuation
pursuant to SECTION 3.10 of a Eurodollar Borrowing from one Interest Period to
the next Interest Period.

         CONVERT, CONVERSION, and CONVERTED refers to a conversion pursuant to
SECTION 3.10 of one Type of Borrowing into another Type of Borrowing.

         CREDIT EXTENSION means, for any Credit Party, the funding of its
portion of a Borrowing.

         CREDIT PARTIES means Administrative Agent and Lenders, and CREDIT PARTY
means any one of the Credit Parties.

         CUMULATIVE CONSOLIDATED NET INCOME means the sum of Quarterly
Consolidated Net Income for the fiscal quarter ended March 31, 2003, and for
each succeeding fiscal quarter during the term hereof.

         CURRENT FINANCIALS means, at the time of any determination thereof, the
most recently delivered to the Credit Parties of either (a) the Financial
Statements for the fiscal year ended March 31, 2003, calculated on a
consolidated basis for the Companies, or (b) the Financial Statements required
to be delivered under SECTION 8.3(a) or 8.3(b), as the case may be.

         DEBT means (without duplication), for any Person, the sum of the
following: (a) all liabilities, obligations, and indebtedness of such Person for
money borrowed; (b) all liabilities, obligations, and indebtedness of such
Person which is evidenced by bonds, notes, debentures, or other similar
instruments; (c) all Capitalized Lease Obligations of such Person; (d) all
obligations of such Person issued or assumed as the deferred purchase price of
property, all conditional sale obligations of such Person, and obligations of
such Person under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business that are not past-due for
more than ninety (90) days); (e) all Contingent Obligations of such Person; (f)
all obligations of the type referred to in CLAUSES (a) and (b) preceding of
other Persons secured by any Lien on any property or asset of such Person
(whether or not such obligation is assumed by such Person); (g) the face amount
of all letters of credit and banker's acceptances issued for the account of such
Person, and without duplication, all drafts drawn and unpaid thereunder; (h) all
Stock of such Person subject to repurchase or redemption by such Person other
than at the sole option of such Person; (i) all obligations of such Person to
purchase Stock (or other property) which arise out of or in connection with the
sale by such Person of the same or substantially similar Stock (or property);
and (j) all liabilities, obligations, and indebtedness of such Person arising
under Financial Hedges entered into by such Person as determined in accordance
with GAAP.

         DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent
transfer or conveyance, suspension of payments, or similar Legal Requirements
from time to time in effect affecting the Rights of creditors generally.

CREDIT AGREEMENT

                                        5



         DEFAULTING LENDER means, as of any date, any Lender that has (a) failed
to make a Credit Extension required to be made by it hereunder, or (b) given
notice to Administrative Agent or Borrower that it will not make, or that it has
disaffirmed or repudiated any obligation to make, any Credit Extension hereunder
(unless such notice is given by all Lenders).

         DEFAULT RATE means, (i) with respect to any Borrowing, on any date, a
per annum rate of interest equal from day to day to the lesser of (a) the
non-default interest rate applicable to such Borrowing, plus two percent (2%)
and (b) the Maximum Rate, and (ii) with respect to any other Obligation under
the Loan Documents, the lesser of (a) the Prime Rate plus the then-effective
Applicable Margin for Prime Rate Borrowings, plus two percent (2%) and (b) the
Maximum Rate.

         DOLLARS and the symbol $ mean lawful money of the United States of
America.

         EBITDA means, with respect to any Person for any fiscal period, an
amount equal to (a) consolidated net income of such Person for such period,
minus (b) the sum of (i) income tax credits, (ii) interest income, (iii) gains
from extraordinary items for such period, and (iv) any aggregate net gain during
such period arising from the sale, exchange, or other disposition of capital
assets by such Person (including any fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the disposition of fixed
assets, and all securities (other than securities sold in the ordinary course of
business)), in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP,
but without duplication, minus (c) any cash payments made in respect of any item
of extraordinary loss accrued during a prior period and added back to EBITDA in
such prior period pursuant to CLAUSE (d)(v) below, plus (d) the sum of (i) any
provision for income taxes, (ii) Interest Expense, (iii) the amount of
depreciation and amortization for such period, (iv) the amount of any deduction
to consolidated net income as the result of any stock option expense, (v) the
amount of any item of extraordinary loss not paid in cash in such period, and
(vi) the absolute value of any aggregate net loss during such period arising
from the sale, exchange, or other disposition of capital assets by such Person
(including any fixed assets, whether tangible or intangible, all inventory sold
in conjunction with the disposition of fixed assets, and all securities (other
than securities sold in the ordinary course of business)), in each case to the
extent included in the calculation of consolidated net income of such Person for
such period in accordance with GAAP, but without duplication.

         ELIGIBLE ASSIGNEE is defined in SECTION 13.13(g).

         EMPLOYEE PLAN means an employee pension benefit plan covered by Title
IV of ERISA and established or maintained by Borrower or any ERISA Affiliate,
but not including any Multiemployer Plan.

         ENVIRONMENTAL LAW means any Legal Requirement relating to protection of
the public health and welfare and/or the environment, including any Legal
Requirement relating to: the generation, processing, treatment, storage,
transport, disposal, investigation, and remediation or other management of
Hazardous Materials; the storage, handling, use, and transport of chemicals and
Hazardous Materials; and protection of areas of particular environmental
concern, including wetlands, areas inhabited by endangered species, historic
sites, and areas above protected aquifers.

         EQUITY ISSUANCE means the issuance or sale by any Restricted Company of
any Stock, other than present and future Stock issued to other Companies or to
employees, directors, or consultants of any of the Companies.

CREDIT AGREEMENT

                                        6



         ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and rulings thereunder.

         ERISA AFFILIATE means any company or trade or business (whether or not
incorporated) which, for purposes of Title IV of ERISA, is a member of
Borrower's controlled group or which is under common control with Borrower
within the meaning of Section 414(b), (c), (m), or (o) of the Tax Code.

         EURODOLLAR BORROWING means a Borrowing bearing interest at the sum of
the Adjusted Eurodollar Rate plus the Applicable Margin for Eurodollar
Borrowings.

         EURODOLLAR RATE means, for any Eurodollar Borrowing for any Interest
Period:

         (a)      the rate per annum equal to the rate determined by
Administrative Agent to be the offered rate that appears on the page of the
Telerate screen (or any successor thereto) that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m. (London time)
two (2) Business Days prior to the first day of such Interest Period; or

         (b)      if the rate referenced in the preceding CLAUSE (a) does not
appear on such page or service or such page or service shall not be available,
the rate per annum equal to the rate determined by Administrative Agent to be
the offered rate on such other page or other service that displays an average
British Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London time)
two (2) Business Days prior to the first day of such Interest Period; or

         (c)      if the rates referenced in the preceding CLAUSES (a) and (b)
are not available, the rate per annum determined by Administrative Agent as the
rate of interest at which deposits in Dollars for delivery on the first day of
such Interest Period in same day funds in the approximate amount of the
Eurodollar Borrowing being made, continued, or converted by Administrative Agent
and with a term equivalent to such Interest Period would be offered by
Administrative Agent's London branch to major banks in the London interbank
eurodollar market at their request at approximately 4:00 p.m. (London time) two
(2) Business Days prior to the first day of such Interest Period.

         EVENT OF DEFAULT is defined in SECTION 10.

         EXCESS CASH means, for the Restricted Companies as of any date of
determination thereof, (a) cash, plus (b) time deposits with, and certificates
of deposit, bank notes and bankers' acceptances issued by, any Lender or any
domestic bank, savings bank or savings and loan association having capital,
surplus and undivided profits aggregating at least $1,000,000,000, plus (c)
investments in direct obligations of the United States of America or any agency,
government-sponsored enterprise or instrumentality thereof, or obligations fully
guaranteed by the United States of America or any agency, government-sponsored
enterprise or instrumentality thereof, provided that such obligations mature
within one (1) year of the date of acquisition thereof, plus (d) investments in
commercial paper rated (at the time of purchase) in one of the two highest
short-term rating categories by two (2) or more national credit rating agencies
and maturing not more than two hundred and seventy (270) days from the date of
creation thereof, plus (e) repurchase agreements involving any of the
obligations described in CLAUSES (b), (c) and (d) above so long as the other
party to the repurchase agreement has short-term unsecured debt obligations or
short-term deposits rated (at the time of purchase) in the highest grade by two
(2) or more national credit rating agencies, plus (f) investments in direct
obligations of any money-market fund or

CREDIT AGREEMENT

                                        7



other similar investment company that is rated "AAAm" or "AAAm-G" by S & P and
"Aaa" by Moody's or whose investments consist, directly or indirectly, primarily
of short-term money market securities, which may include obligations described
in the foregoing clauses of this definition, minus (g) $15,000,000; provided
that in no event shall Excess Cash be less than zero.

         EXCLUDED SUBSIDIARY means any Unrestricted Subsidiary that has a
continuing default or event of default under any Debt in excess of $20,000,000
at any time.

         EXCLUDED TAXES is defined in SECTION 4.6(a).

         EXHIBIT means an exhibit to this Agreement unless otherwise specified.

         EXISTING CREDIT FACILITY means the Credit Agreement dated as of August
9, 2000, among Centex Corporation, as Borrower, the Lenders party thereto, and
Bank of America, N.A., as Administrative Agent, as such agreement may have been
modified, amended, or restated.

         EXTENSION EFFECTIVE DATE is defined in SECTION 2.5.

         EXTENSION REQUEST is defined in SECTION 2.5.

         FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with member banks
of the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, then
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, then the Federal Funds Rate for such day shall be the average rate charged
to Administrative Agent (in its individual capacity) on such day on such
transactions.

         FINANCIAL HEDGE means a swap, collar, floor, cap, or other contract
which is intended to reduce or eliminate the risk of fluctuations in interest
rates.

         FINANCIAL STATEMENTS means balance sheets, statements of operations,
statements of shareholders' investments, and statements of cash flows prepared
in accordance with GAAP, which statements of operations and statements of cash
flows shall be in comparative form to the corresponding period of the preceding
fiscal year, and which balance sheets and statements of shareholders'
investments shall be in comparative form to the prior fiscal year-end figures.

         FUND is defined in SECTION 13.13(g).

         GAAP means generally accepted accounting principles in the United
States of America as set forth in the opinions and pronouncements of the
American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board which are applicable
from time to time.

         GOVERNMENTAL AUTHORITY means any applicable (a) local, state,
municipal, federal, or foreign judicial, executive, or legislative
instrumentality, (b) private arbitration board or panel, or (c) central bank.

CREDIT AGREEMENT

                                        8



         HAZARDOUS MATERIAL means "hazardous substance," "pollutant or
contaminant," and "petroleum," and "natural gas liquids" as those terms are
defined or used in Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 96.01 et seq.), as amended or
supplemented from time to time, and any other substances regulated because of
their effect or potential effect on public health and the environment including
PCBs, lead paint, asbestos, urea formaldehyde, radioactive materials,
putrescible materials, petroleum distillates, medical waste, and infectious
materials.

         INCREASING LENDER is defined in SECTION 2.2(b).

         INDEMNIFIED LIABILITIES is defined in SECTION 11.10(b).

         INDEMNITEES is defined in SECTION 11.10(b).

         INTEREST COVERAGE RATIO means, as of any date of determination thereof,
the ratio of (a) Consolidated EBITDA, plus net income of each Unrestricted
Subsidiary (without duplication and determined in accordance with GAAP) that is
earned and eligible for distribution, to (b) Consolidated Interest Expense, in
each case for the most-recent four (4) fiscal quarters ending on or prior to the
date of determination.

         INTEREST EXPENSE means, for any period of calculation thereof, for any
Person, the aggregate amount of all interest (including facility and utilization
fees) on all Debt of such Person, whether paid in cash or accrued as a liability
and payable in cash during such period, including (a) imputed interest on
Capitalized Lease Obligations, (b) the amortization of any original issue
discount on any Debt, (c) the interest portion of any deferred payment
obligation, (d) all commissions, discounts, and other fees and charges owed with
respect to letters of credit or bankers' acceptance financing, (e) net costs
associated with Financial Hedges, and (f) the interest component of any Debt
that is guaranteed or secured by such Person, and all cash premiums or penalties
for the repayment, redemption, or repurchase of Debt.

         INTEREST PERIOD is determined in accordance with SECTION 3.9.

         LEGAL REQUIREMENTS means all applicable statutes, laws, treaties,
ordinances, tariff requirements, rules, regulations, orders, writs, injunctions,
decrees, judgments, opinions, or interpretations of any Governmental Authority.

         LENDERS means, on any date of determination, the financial institutions
named on SCHEDULE 2.1 (as the same may be amended from time to time by
Administrative Agent to reflect the admission of a Subsequent Lender in
accordance with SECTION 2.2(b) and assignments made in accordance with SECTION
13.13(b)), and subject to the terms and conditions of this Agreement, their
respective successors and assigns.

         LEVERAGE RATIO means, as of any date of determination thereof, the
ratio of (a) Consolidated Debt outstanding on such date minus Subordinated Debt
in an amount not to exceed $200,000,000, to (b) the sum of (i) Consolidated Debt
outstanding on such date, plus (ii) Consolidated Tangible Net Worth determined
in accordance with GAAP.

         LIEN means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind, and any other
Right of or arrangement with any creditor (other

CREDIT AGREEMENT

                                        9



than under or relating to subordination or other intercreditor arrangements) to
have its claim satisfied out of any property or assets, or the proceeds
therefrom, prior to the general creditors of the owner thereof.

         LITIGATION means any action by or before any Governmental Authority.

         LOAN DOCUMENTS means (a) this Agreement and the Notes, (b) all
agreements, documents, or instruments in favor of any Credit Party ever
delivered by Borrower pursuant to this Agreement or otherwise delivered in
connection with all or any part of the Obligation, and (c) any and all future
renewals, extensions, restatements, reaffirmations, or amendments of, or
supplements to, all or any part of the foregoing.

         MATERIAL ADVERSE EVENT means any set of one or more circumstances or
events which, individually or collectively, could reasonably be expected to
result in any (a) material impairment of the ability of Borrower to perform any
of its payment or other material obligations under the Loan Documents, (b)
material and adverse effect on the business, properties, condition (financial or
otherwise), or results of operations of the Companies (taken as a whole), (c)
material and adverse effect on the validity or enforceability of any of the Loan
Documents or the Rights of any Credit Party thereunder, or (d) Potential Default
or Event of Default. The term Material Adverse Event is used in this Agreement
to qualify certain of the representations, warranties, and covenants contained
herein, but is not, in and of itself, a condition precedent to any Borrowings
hereunder or an independent representation (except as provided in the last
sentence of SECTION 7.6), covenant, or Event of Default.

         MAXIMUM AMOUNT and MAXIMUM RATE respectively mean, for each Lender, the
maximum non-usurious amount and the maximum non-usurious rate of interest which,
under all Legal Requirements, such Lender is permitted to contract for, charge,
take, reserve, or receive on the Obligation.

         MOODY'S means Moody's Investors Service, Inc. and any successor
thereto.

         MOODY'S RATING means the most recently-announced rating from time to
time of Moody's assigned to any class of long-term senior, unsecured debt
securities issued by Borrower, as to which no letter of credit, guaranty, or
third-party credit support is in place, regardless of whether all or any part of
such Debt has been issued at the time such rating was issued.

         MULTIEMPLOYER PLAN means a multiemployer plan as defined in Section
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Tax Code to which any
Company or any ERISA Affiliate is making, or has made, or is accruing, or has
accrued, an obligation to make contributions.

         NET PROCEEDS means, with respect to any Equity Issuance by Borrower or
any Restricted Subsidiary, the amount of cash received by such Company in
connection with such transaction after deducting therefrom the aggregate,
without duplication, of the following amounts to the extent properly
attributable to such transaction: (a) reasonable brokerage commissions,
attorneys' fees, finder's fees, financial advisory fees, accounting fees,
underwriting fees, investment banking fees, and other similar commissions and
fees (and expenses and disbursements of any of the foregoing), in each case, to
the extent paid or payable by such Company; (b) printing and related expenses
and filing, recording, or registration fees or charges or similar fees or
charges paid by such Company; and (c) taxes paid or payable by such Company to
any Governmental Authority as a result of such transaction.

CREDIT AGREEMENT

                                       10



         NOTES means each revolving note substantially in the form of EXHIBIT A,
executed by Borrower, and all modifications, amendments, renewals, extensions,
and restatements of all or any part thereof, and NOTE means any one of the
Notes.

         NOTICE OF BORROWING means a notice substantially in the form of EXHIBIT
C-1.

         NOTICE OF CONVERSION/CONTINUATION means a notice substantially in the
form of EXHIBIT C-2.

         NOTICE OF PREPAYMENT means a notice substantially in the form of
EXHIBIT C-3.

         OBLIGATION means all present and future indebtedness, liabilities, and
obligations, and all renewals and extensions thereof, or any part thereof, now
or hereafter owed to any Credit Party or any Affiliate of any Credit Party by
Borrower pursuant to any Loan Document, together with all interest accruing
thereon, fees, costs, and expenses (including all reasonable Attorney Costs
incurred in the enforcement or collection thereof) payable under the Loan
Documents.

         PARTICIPANT is defined in SECTION 13.13(d).

         PAYMENT OFFICE means Administrative Agent's office located at Dallas,
Texas or such other office as Administrative Agent shall notify Borrower and the
Credit Parties in writing.

         PBGC means the Pension Benefit Guaranty Corporation, or any successor
thereof, established pursuant to ERISA.

         PERMITTED LIENS means Liens permitted under SECTION 9.2 as described in
such SECTION.

         PERSON means any individual, entity, or Governmental Authority.

         POTENTIAL DEFAULT means the occurrence of any event or existence of any
circumstance which, with the giving of notice or lapse of time or both, would
become an Event of Default.

         PRIME RATE means, for any day, a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (0.5%), and (b) the per annum rate of interest in effect for such day as
publicly announced from time to time by Bank of America, N.A. as its prime rate,
which rate may not be the lowest rate of interest charged by Bank of America,
N.A. to its customers for such day. The "prime rate" is a rate set by Bank of
America, N.A. based upon various factors including its costs and desired return,
general economic conditions, and other factors, and it is used as a reference
point for pricing of some loans which may be priced at, above, or below such
announced rate. Any change in Bank of America, N.A.'s "prime rate" or the
Federal Funds Rate shall be effective on the effective date of such change in
the "prime rate" or the Federal Funds Rate.

         PRIME RATE BORROWING means a Borrowing bearing interest at the sum of
the Prime Rate plus the Applicable Margin for Prime Rate Borrowings.

         PRINCIPAL DEBT means, for a Credit Party and at any time, the unpaid
principal balance of all outstanding Borrowings from such Credit Party hereunder
as of such date.

         PRO RATA or PRO RATA PART, for each Lender, means (a) for purposes of
any commitment to fund Borrowings in respect of this Agreement, respectively,
the percentage stated opposite such Lender's name

CREDIT AGREEMENT

                                       11



as set forth on SCHEDULE 2.1 or on the most recently amended SCHEDULE 2.1, if
any, prepared by Administrative Agent pursuant to SECTION 2.2 or SECTION 13.13,
(b) for purposes of sharing any amount or fee payable to any Lender, the
proportion which the portion of the Principal Debt owed to such Lender bears to
the Principal Debt owed to all Lenders at the time in question, and (c) for all
other purposes, the proportion which the portion of the Principal Debt owed to
such Lender bears to the Principal Debt owed to all Lenders at the time in
question, or if no Principal Debt is outstanding, then the proportion that the
aggregate of such Lender's Commitment bears to the Total Commitment then in
effect.

         QUARTERLY CONSOLIDATED NET INCOME means, for any fiscal quarter,
Consolidated Adjusted Net Income for such quarter; provided that if Consolidated
Adjusted Net Income for any quarter is less than $0, then Quarterly Consolidated
Net Income for such fiscal quarter shall be equal to $0.

         RECOURSE DEBT means all Debt of each Unrestricted Subsidiary on which
any Restricted Company is obligated, as a guarantor or otherwise.

         REGISTER is defined in SECTION 13.13(c).

         REGULATION D means Regulation D of the Board of Governors of the
Federal Reserve System, as amended.

         REGULATION U means Regulation U of the Board of Governors of the
Federal Reserve System, as amended.

         REJECTED AMOUNT is defined in SECTION 2.5(a).

         REJECTING LENDERS is defined in SECTION 2.5(c).

         RELEASE means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the environment (including air, groundwater, surface water, soil, other
environmental media, or natural resources).

         REPORTABLE EVENT shall have the meaning specified in Section 4043 of
ERISA or the regulations issued thereunder in connection with an Employee Plan,
excluding events for which the notice requirement is waived under applicable
PBGC regulations other than those events described in Sections 2615.11, 2615.15
and 2615.19 of such regulations, including each such provision as it may
subsequently be renumbered.

         REPRESENTATIVES means representatives, officers, directors, employees,
attorneys, and agents.

         REQUIRED LENDERS means (a) on any date of determination prior to
termination of the Total Commitment, those Lenders (other than Defaulting
Lenders) collectively holding more than fifty percent (50%) of the Total
Commitment (excluding the Commitments of any Defaulting Lenders), or (b) on any
date of determination occurring after the Total Commitment has terminated, those
Lenders collectively holding more than fifty percent (50%) of the outstanding
Total Principal Debt (excluding the Principal Debt of any Defaulting Lenders).

         RESERVE REQUIREMENT means, at any time, the maximum rate at which
reserves (including any marginal, special, supplemental, or emergency reserves)
are required to be maintained under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) by

CREDIT AGREEMENT

                                       12



member banks of the Federal Reserve System against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other reserves required to
be maintained by such member banks with respect to (a) any category of
liabilities which includes deposits by reference to which the Adjusted
Eurodollar Rate is to be determined, or (b) any category of extensions of credit
or other assets which include Eurodollar Borrowings. The Adjusted Eurodollar
Rate shall be adjusted automatically on and as of the effective date of any
change in the Reserve Requirement.

         RESPONSIBLE OFFICER of Borrower means its chairman, vice chairman,
president, chief executive officer, chief financial officer, executive vice
president, senior vice president, or treasurer, or, for all purposes under the
Loan Documents, any other officer designated from time to time by the Board of
Directors or Executive Committee of the Board of Directors of Borrower, which
designated officer is acceptable to Administrative Agent.

         RESTRICTED COMPANY means Borrower and each Restricted Subsidiary.

         RESTRICTED SUBSIDIARY means each of Borrower's Subsidiaries, other than
Unrestricted Subsidiaries.

         RIGHTS means rights, remedies, powers, privileges, and benefits.

         SCHEDULE means, unless specified otherwise, a schedule attached to this
Agreement, as the same may be supplemented and modified from time to time in
accordance with the terms of the Loan Documents.

         SOLVENT means, as to a Person, that (a) the aggregate fair market value
of such Person's assets exceeds its liabilities (whether contingent,
subordinated, unmatured, unliquidated, or otherwise), (b) such Person has
sufficient cash flow to enable it to pay its Debts as they mature, and (c) such
Person does not have unreasonably small capital to conduct such Person's
businesses.

         S & P means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto.

         S & P RATING means the most recently-announced rating from time to time
of S & P assigned to any class of long-term senior, unsecured debt securities
issued by Borrower, as to which no letter of credit, guaranty, or third-party
credit support is in place, regardless of whether all or any part of such Debt
has been issued at the time such rating was issued.

         STOCK means all shares, options, warrants, general or limited
partnership interests, membership interests, or other ownership interests
(regardless of how designated) of or in a corporation, partnership, limited
liability company, trust, or other entity, whether voting or nonvoting,
including common stock, preferred stock, or any other similar "equity security"
(as such term is defined in Rule 3a11-1 of the General Rules and Regulations
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended).

         SUBORDINATED DEBT means any Debt of Borrower (a) subordinated to the
Obligation and including customary provisions regarding payment blockage,
payover, standstill, voting rights, and notices, (b) which, as of the date of
calculation, is not considered a "current liability" in accordance with GAAP,
and (c) which requires no payments of principal until its maturity.

CREDIT AGREEMENT

                                       13



         SUBSEQUENT LENDER is defined in SECTION 2.2(b).

         SUBSIDIARY means, in respect of any Person (herein referred to as the
"PARENT"), any corporation, partnership, limited liability company, association,
or other business entity (a) of which Stock representing more than fifty percent
(50%) of the equity or more than fifty percent (50%) of the ordinary voting
power or more than fifty percent (50%) of the general partnership interests are,
at the time any determination is being made, owned, Controlled, or held, or (b)
which is, at the time any determination is made, otherwise Controlled, by the
Parent or one or more Subsidiaries of the Parent or by the Parent and one or
more Subsidiaries of the Parent; provided that ownership by Borrower or its
Subsidiaries of more than fifty percent (50%) of the limited partnership
interests in Centex Development Company, L.P. shall not, by itself, result in
such company being deemed a Subsidiary of Borrower. "CONTROL" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of Stock, by contract, or otherwise, and "CONTROLLING" and
"CONTROLLED" shall have meanings correlative thereto.

         TANGIBLE NET WORTH means, for any Person as of any date of
determination, the consolidated net worth of such Person determined in
accordance with GAAP, less (without duplication), the sum of the following: (a)
all intangibles determined in accordance with GAAP (including, without
limitation, goodwill and deferred or capitalized acquisition costs), (b) all
minority interests in any Subsidiary of such Person, (c) unamortized Debt
discount and expense, (d) any non-cash gain (or plus any non-cash loss, as
applicable) resulting from any mark-to-market adjustments made directly to
consolidated net worth as a result of fluctuations in the value of financial
instruments owned by Borrower or any of its Subsidiaries as mandated under FAS
133, and (e) all reserves (except contingency reserves not allocated to specific
purposes and not deducted from assets, which are properly treated as
appropriations of surplus or retained earnings) and any write-up in book value
of assets resulting from a revaluation of such asset subsequent to March 31,
2003.

         TAX CODE means the Internal Revenue Code of 1986, as amended, together
with the rules and regulations promulgated thereunder.

         TAXES means, for any Person, taxes, assessments, duties, levies,
imposts, deductions, charges, or withholdings, or other governmental charges or
levies imposed upon such Person, its income, or any of its properties,
franchises, or assets.

         TERMINATION DATE means the earlier of (a) August 9, 2006 as such date
may be extended pursuant to and in accordance with SECTION 2.5, and (b) the
effective date of any other termination or cancellation of all of Lenders'
Commitments to lend under, and in accordance with, this Agreement.

         TOTAL COMMITMENT means, on any date of determination, the sum of all
Commitments for all Lenders (as the same may have been reduced, increased, or
canceled in accordance with this Agreement) then in effect.

         TOTAL PRINCIPAL DEBT means, at any time, the sum of the Principal Debt
of all Lenders.

         TYPE means any type of Borrowing determined with respect to the
interest option applicable thereto.

CREDIT AGREEMENT

                                       14



         UNRESTRICTED SUBSIDIARY means any Subsidiary (a) that is designated as
an Unrestricted Subsidiary on the Closing Date and listed on SCHEDULE 7.3, or
(b) as otherwise designated in a writing delivered to Administrative Agent and
meeting the requirements set forth in SECTION 8.12.

         WHOLLY-OWNED when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of Stock (except
shares required as directors' qualifying shares) shall be owned by Borrower or
one or more of its Wholly-owned Subsidiaries.

         1.2      NUMBER AND GENDER OF WORDS; OTHER REFERENCES. Unless otherwise
specified in the Loan Documents, (a) where appropriate, the singular includes
the plural and vice versa, and words of any gender include each other gender,
(b) heading and caption references may not be construed in interpreting
provisions, (c) monetary references are to currency of the United States of
America, (d) section, paragraph, annex, schedule, exhibit, and similar
references are to the particular Loan Document in which they are used, (e)
references to "telecopy," "facsimile," "fax," or similar terms are to facsimile
or telecopy transmissions, (f) references to "including" mean including without
limiting the generality of any description preceding that word, (g) the rule of
construction that references to general items that follow references to specific
items are limited to the same type or character of those specific items is not
applicable in the Loan Documents, (h) references to any Person include that
Person's heirs, personal representatives, successors, trustees, receivers, and
permitted assigns, (i) references to any Legal Requirement include every
amendment or supplement to it, rule and regulation adopted under it, and
successor or replacement for it, and (j) references to any Loan Document or
other document include every renewal and extension of it, amendment and
supplement to it, and replacement or substitution for it.

         1.3      ACCOUNTING PRINCIPLES. All accounting and financial terms used
in the Loan Documents and the compliance with each financial covenant therein
shall be determined in accordance with GAAP, and all accounting principles shall
be applied on a consistent basis so that the accounting principles in a current
period are comparable in all material respects to those applied during the
preceding comparable period. If Borrower or any Credit Party determines that a
change in GAAP from that in effect on the date hereof has altered the treatment
of certain financial data to its detriment under this Agreement, then such party
may, by written notice to the others and Administrative Agent not later than ten
(10) days after the effective date of such change in GAAP, request renegotiation
of the financial covenants affected by such change. If Borrower and Required
Lenders have not agreed on revised covenants within thirty (30) days after
delivery of such notice, then, for purposes of this Agreement, GAAP will mean
generally accepted accounting principles without giving effect to the change
that gave rise to the renegotiation.

         1.4      TIME REFERENCES. Unless otherwise specified in the Loan
Documents (a) time references are to time in Chicago, Illinois, and (b) in
calculating a period from one date to another, the word "from" means "from and
including" and the word "to" or "until" means "to but excluding."

SECTION 2 BORROWING PROVISIONS.

         2.1      COMMITMENTS. Subject to and in reliance upon the terms,
conditions, representations, and warranties in the Loan Documents, each Lender
severally and not jointly agrees to lend to Borrower such Lender's Pro Rata Part
of one or more Borrowings not to exceed such Lender's Commitment, which may be
repaid and reborrowed from time to time in accordance with the terms and
provisions of the Loan Documents subject to the following conditions:

         (a)      each Borrowing requested by Borrower hereunder must occur on a
Business Day and no later than the Business Day immediately preceding the
Termination Date;

CREDIT AGREEMENT

                                       15



         (b)      each Borrowing requested by Borrower must be in the amount of
(i) $5,000,000 or a greater integral multiple of $1,000,000 (if a Prime Rate
Borrowing), or (ii) $5,000,000 or a greater integral multiple of $1,000,000 (if
a Eurodollar Borrowing);

         (c)      the Total Principal Debt may not exceed the Total Commitment;
and

         (d)      no Lender's Principal Debt may exceed such Lender's
Commitment.

         2.2      LENDERS; INCREASE IN TOTAL COMMITMENT.

         (a)      The Lenders on the Closing Date shall be the Lenders set forth
on SCHEDULE 2.1 on the Closing Date.

         (b)      At any time after the Closing Date through the date that is
one (1) year prior to the Termination Date then in effect (or such later date
solely with respect to the replacement of any Rejecting Lender pursuant to
SECTION 2.5(c)), Administrative Agent may, from time to time at the request of
Borrower, increase the Total Commitment by (i) admitting additional Lenders
hereunder (each a "SUBSEQUENT LENDER"), or (ii) increasing the Commitment of any
Lender (each an "INCREASING LENDER"), subject to the following conditions:

                  (A)      each Subsequent Lender is an Eligible Assignee;

                  (B)      Borrower executes (A) a new Note payable to the order
         of a Subsequent Lender, if requested, or (B) a replacement Note payable
         to the order of an Increasing Lender if such Increasing Lender
         previously received a Note;

                  (C)      each Subsequent Lender executes and delivers to
         Administrative Agent a signature page to this Agreement;

                  (D)      after giving effect to the admission of any
         Subsequent Lender or the increase in the Commitment of any Increasing
         Lender, the Total Commitment does not exceed $1,000,000,000;

                  (E)      each increase in the Total Commitment shall be in the
         amount of $10,000,000 or a greater integral multiple of $500,000
         (except with respect to an increase in connection with the replacement
         of a Rejecting Lender);

                  (F)      no admission of any Subsequent Lender shall increase
         the Commitment of any existing Lender without the written consent of
         such Lender;

                  (G)      no Potential Default or Event of Default exists;

                  (H)      no Lender shall be an Increasing Lender without the
         written consent of such Lender; and

                  (I)      the amount of all increases in the Total Commitment
         pursuant to this SECTION 2.2 (other than increases as the result of the
         replacement of a Rejecting Lender pursuant to SECTION 2.5(c)) shall not
         exceed $200,000,000 in the aggregate.

CREDIT AGREEMENT

                                       16



After the admission of any Subsequent Lender or the increase in the Commitment
of any Increasing Lender, Administrative Agent shall promptly provide to each
Lender and to Borrower a new SCHEDULE 2.1 to this Agreement. In the event that
there are any Borrowings outstanding after giving effect to an increase in the
Total Commitment pursuant to this SECTION 2.2, upon notice from Administrative
Agent to each Lender, the amount of such Borrowings owing to each Lender shall
be appropriately adjusted to reflect the new Pro Rata Parts of Lenders, and
Borrower shall pay any Consequential Losses associated therewith pursuant to
SECTION 4.5.

         2.3      VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. Without
premium or penalty, and upon giving not less than ten (10) Business Days prior
written and irrevocable notice to Administrative Agent, Borrower may permanently
terminate in whole or in part the Total Commitment; provided that: (a) each
partial termination shall be in the amount of $5,000,000 or a greater integral
multiple of $1,000,000; (b) the amount of the Total Commitment may not be
reduced below the Total Principal Debt; and (c) each reduction shall be
allocated Pro Rata among Lenders in accordance with their respective Pro Rata
Parts. Promptly after receipt of such notice of termination or reduction,
Administrative Agent shall notify each Lender of the proposed termination or
reduction. Such termination or partial reduction of the Total Commitment shall
be effective on the Business Day specified in Borrower's notice (which date must
be at least ten (10) Business Days after Borrower's delivery of such notice). In
the event that the Total Commitment is reduced to zero and there is no
outstanding Principal Debt, this Agreement shall be terminated to the extent
specified in SECTION 13.14, and all facility fees and other fees then earned and
unpaid hereunder and all other amounts of the Obligation then due and owing
shall be immediately due and payable, without notice or demand by any Credit
Party.

         2.4      BORROWING PROCEDURE. The following procedures apply to
Borrowings (other than Conversions and Continuations of Borrowings):

         (a)      NOTICE OF BORROWING. Each Borrowing shall be made pursuant to
a Notice of Borrowing delivered to Administrative Agent requesting that Lenders
fund a Borrowing on a Borrowing Date, which notice (i) shall be irrevocable and
binding on Borrower, (ii) shall specify the Borrowing Date, amount, Type, and
(for a Borrowing comprised of Eurodollar Borrowings) Interest Period, and (iii)
must be received by Administrative Agent no later than 11:00 a.m. on the third
(3rd) Business Day preceding the Borrowing Date for any Eurodollar Borrowing or
on the Business Day immediately preceding the Borrowing Date for any Prime Rate
Borrowing. Administrative Agent shall notify each Lender by 2:00 p.m. with
respect to Administrative Agent's receipt of each Notice of Borrowing.

         (b)      FUNDING. Each Lender shall remit its Pro Rata Part of each
requested Borrowing to Administrative Agent at its Payment Office in funds which
are or will be available for immediate use by Administrative Agent by 1:00 p.m.
on the Borrowing Date therefor. Subject to receipt of such funds, Administrative
Agent shall (unless to its actual knowledge any of the conditions precedent
therefor have not been satisfied by Borrower or waived by Required Lenders) make
such funds available to Borrower by causing such funds to be deposited by 3:00
p.m. on the Borrowing Date to Borrower's account as designated to Administrative
Agent by Borrower. Notwithstanding the foregoing, unless Administrative Agent
shall have been notified by a Lender prior to a Borrowing Date that such Lender
does not intend to make available to Administrative Agent such Lender's Pro Rata
Part of the applicable Borrowing, Administrative Agent may assume that such
Lender has made such proceeds available to Administrative Agent on such date, as
required herein, and Administrative Agent may (unless to its actual knowledge
any of the conditions precedent therefor have not been satisfied by Borrower or
waived by Required Lenders), in reliance upon such assumption (but shall not be
required to), make available to Borrower a

CREDIT AGREEMENT

                                       17



corresponding amount in accordance with the foregoing terms, but, if such
corresponding amount is not in fact made available to Administrative Agent by
such Lender on such Borrowing Date, then Administrative Agent shall be entitled
to recover such corresponding amount on demand (i) from such Lender, together
with interest at the Federal Funds Rate during the period commencing on the date
such corresponding amount was made available to Borrower and ending on (but
excluding) the date Administrative Agent recovers such corresponding amount from
such Lender, or (ii) if such Lender fails to pay such corresponding amount
forthwith upon such demand, then from Borrower, together with interest at a rate
per annum equal to the applicable rate for such Borrowing during the period
commencing on such Borrowing Date and ending on (but excluding) the date
Administrative Agent recovers such corresponding amount from Borrower. The
obligations of Lenders hereunder to remit their Pro Rata Part of each requested
Borrowing are several and not joint. The failure of any Lender to make its Pro
Rata Part of any Borrowing on any date required hereunder shall not relieve any
other Lender of its corresponding obligation to do so on such date, and no
Lender shall be responsible for the failure of any other Lender to make its Pro
Rata Part of any Borrowing.

         2.5      EXTENSION OF TERMINATION DATE.

         (a)      Borrower may, not more than once during any period of twelve
(12) consecutive months, upon written notice to Administrative Agent (who shall
promptly notify Lenders) not less than ninety (90) days prior to the Termination
Date then in effect, request an extension of the Termination Date then in effect
(the "EXTENSION REQUEST"). Within thirty (30) days of delivery of such notice,
each Lender shall notify Administrative Agent by written notice whether or not
it consents to such extension. Any Lender not responding within the above time
period shall be deemed to have not consented to such extension. Administrative
Agent shall promptly notify Borrower of Lenders' responses and the aggregate
amount of the Commitments of Rejecting Lenders (the "REJECTED AMOUNT").

         (b)      The Termination Date then in effect shall be extended only if
Lenders ("ACCEPTING LENDERS") holding not less than seventy percent (70%) of the
Total Commitment (the amount of which shall be calculated prior to giving effect
to any removals or replacements of Rejecting Lenders) have consented thereto. If
so extended, the Termination Date then in effect shall be extended to a date 364
days from the Termination Date then in effect, effective as of the Termination
Date then in effect (the effective date of the extension being the "EXTENSION
EFFECTIVE DATE"). Administrative Agent shall promptly confirm in writing to
Lenders and Borrower such extension and the Extension Effective Date. As a
condition precedent to such extension, Borrower shall deliver to Administrative
Agent a certificate dated as of the Extension Effective Date (in sufficient
copies for each Accepting Lender) signed by a Responsible Officer (i) certifying
and attaching the resolutions adopted by Borrower approving or consenting to
such extension and (ii) certifying that, before and after giving effect to such
extension, no Potential Default or Event of Default exists. Administrative Agent
shall distribute an amended SCHEDULE 2.1 (which shall be deemed incorporated
into this Agreement) to reflect any changes in Lenders and their Commitments.

         (c)      If the Termination Date is extended as provided in SECTION
2.5(b) and if any Lender (individually, a "REJECTING LENDER" and collectively,
"REJECTING LENDERS") declines, or is deemed to have declined, to consent to such
extension, then the Commitment of such Rejecting Lender shall automatically
terminate on the Extension Effective Date (or such earlier date by written
notice from Borrower to Administrative Agent and such Rejecting Lender at least
three (3) Business Days prior to such termination). Upon termination of the
Commitment of any Rejecting Lender pursuant to the foregoing sentence, Borrower
shall pay to such Rejecting Lender (and the same shall become due and payable)
the outstanding Principal Debt owed by Borrower to such Rejecting Lender, all
interest thereon, and any

CREDIT AGREEMENT

                                       18



other Obligation owed to such Rejecting Lender (including pursuant to SECTION
4.5). Borrower shall have the right, in consultation with and through
Administrative Agent, to request to add one or more Subsequent Lenders or
Increasing Lenders pursuant to SECTION 2.2 to replace such Rejecting Lenders.

         (d)      This SECTION 2.5 shall supersede any provisions in SECTION
13.11 to the contrary.

SECTION 3 TERMS OF PAYMENT.

         3.1      NOTES AND PAYMENTS.

         (a)      NOTES. The Principal Debt owed to each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
Administrative Agent in the ordinary course of business. The accounts or records
maintained by Administrative Agent and each Lender shall be conclusive absent
manifest error of the amount of the Principal Debt owed to such Lender and the
interest and payments thereon. Any failure to so record or any error in doing so
shall not, however, limit or otherwise affect the obligation of Borrower
hereunder to pay any amount owing with respect to the Obligation. In the event
of any conflict between the accounts and records maintained by any Lender and
the accounts and records of Administrative Agent in respect of such matters, the
accounts and records of Administrative Agent shall control in the absence of
manifest error. Upon the request of any Lender made through Administrative
Agent, Borrower shall execute and deliver to such Lender (through Administrative
Agent) a Note, which shall evidence the Principal Debt owed to such Lender in
addition to such accounts or records. Each Lender may attach schedules to its
Note and endorse thereon the date, Type (if applicable), amount and maturity of
Borrowings and payments with respect thereto.

         (b)      PAYMENTS GENERALLY. Each payment or prepayment on the
Obligation is due and must be paid by Borrower to Administrative Agent at its
Payment Office in Dollars and in immediately available funds, without set-off,
deduction, defense, recoupment, or counterclaim, by 12:00 noon on the day due.
Payments made after 12:00 noon shall be deemed made on the Business Day next
following. If any payment or prepayment on the Obligation is stated to be due on
a day that is not a Business Day, such payment shall be due on the next
following Business Day, and, to the extent applicable, interest and fees shall
continue to accrue until such payment or prepayment is actually made.
Administrative Agent shall pay to each Lender any payment or prepayment to which
such Lender is entitled hereunder on the same day Administrative Agent shall
have received the same from Borrower; provided that such payment or prepayment
is received by Administrative Agent prior to 12:00 noon, and otherwise before
12:00 noon on the Business Day next following. If and to the extent
Administrative Agent shall not make such payments to Lenders when due as set
forth in the preceding sentence, then such unpaid amounts shall accrue interest,
payable by Administrative Agent, at the Federal Funds Rate from the due date
until (but not including) the date on which Administrative Agent makes such
payments to Lenders.

         3.2      INTEREST AND PRINCIPAL PAYMENTS.

         (a)      INTEREST PAYMENTS. Interest on each Eurodollar Borrowing shall
be due and payable as it accrues on the last day of its respective Interest
Period and on the Termination Date, as applicable; provided that, with respect
to Eurodollar Borrowings having an Interest Period in excess of three (3)
months, Borrower shall pay interest on the respective dates that fall every
three (3) months after the beginning of such Interest Period and on the
expiration of each Interest Period. Interest on each Prime Rate Borrowing shall
be due and payable as it accrues on each March 31, June 30, September 30, and
December 31, and on the Termination Date.

CREDIT AGREEMENT

                                       19



         (b)      MANDATORY PAYMENTS.

                  (i)      The Total Principal Debt is due and payable on the
         Termination Date.

                  (ii)     On any date of determination, if the Total Principal
         Debt exceeds the Total Commitment, then Borrower shall prepay the
         Principal Debt in at least the amount of such excess, together with (A)
         all accrued and unpaid interest on the Principal Debt prepaid, and (B)
         any Consequential Loss arising as a result thereof.

                  (iii)    All mandatory payments pursuant to this SECTION
         3.2(b) shall be applied to the unpaid Principal Debt Pro Rata except as
         otherwise specifically provided herein.

         (c)      VOLUNTARY PREPAYMENTS. After giving Administrative Agent a
Notice of Prepayment, Borrower may voluntarily prepay all or any part of the
Principal Debt from time to time and at any time, in whole or in part, without
premium or penalty; provided that: (i) such notice must be received by
Administrative Agent by 11:00 a.m. on (A) the third (3rd) Business Day preceding
the date of prepayment of a Eurodollar Borrowing, and (B) one (1) Business Day
prior to a prepayment of a Prime Rate Borrowing; (ii) each such partial
prepayment must be in the amount of $5,000,000 or a greater integral multiple of
$1,000,000 (whether a Eurodollar Borrowing or a Prime Rate Borrowing); (iii) all
accrued interest on the Principal Debt being prepaid must also be paid in full,
to the date of such prepayment if such voluntary prepayment is a prepayment of
all outstanding Principal Debt and a termination of all Commitments under this
Agreement or if the Principal Debt being prepaid is a Eurodollar Borrowing; and
(iv) Borrower shall pay any related Consequential Loss (for any Eurodollar
Borrowing) within ten (10) days after demand therefor. Each Notice of Prepayment
shall specify the prepayment date and the Type of Borrowing(s) and amount(s) of
such Borrowing(s) to be prepaid and shall constitute a binding obligation of
Borrower to make a prepayment on the date stated therein.

         3.3      INTEREST OPTIONS. Except where specifically otherwise
provided, Borrowings shall bear interest at a rate per annum equal to the lesser
of (a) as to the respective Type of Borrowing (as designated by Borrower in
accordance with this Agreement), the Prime Rate plus the Applicable Margin for
Prime Rate Borrowings or the Adjusted Eurodollar Rate plus the Applicable Margin
for Eurodollar Borrowings, and (b) the Maximum Rate. Each change in the Prime
Rate, Applicable Margin, or the Maximum Rate, subject to the terms of this
Agreement, will become effective, without notice to Borrower or any other
Person, upon the effective date of such change.

         3.4      QUOTATION OF RATES. A Responsible Officer may call
Administrative Agent on or before the date on which a Notice of Borrowing is to
be delivered by Borrower in order to receive an indication of the rates then in
effect, but such indicated rates shall neither be binding upon Administrative
Agent or Lenders nor affect the rate of interest which thereafter is actually in
effect when the Notice of Borrowing is given.

         3.5      DEFAULT RATE. At the option of Required Lenders at any time
while an Event of Default exists and to the extent permitted by all Legal
Requirements, all past due Principal Debt and all past due accrued interest
thereon, and fees and expenses payable hereunder and under the other Loan
Documents shall bear interest at the Default Rate until paid, regardless whether
such payment is made before or after entry of a judgment.

         3.6      INTEREST RECAPTURE. If the designated rate applicable to any
Borrowing exceeds the Maximum Rate, then the rate of interest on such Borrowing
shall be limited to the Maximum Rate, but

CREDIT AGREEMENT

                                       20



any subsequent reductions in such designated rate shall not reduce the rate of
interest thereon below the Maximum Rate until the total amount of interest
accrued thereon equals the amount of interest which would have accrued thereon
if such designated rate had at all times been in effect. In the event that at
maturity (stated or by acceleration), or at final payment of the Total Principal
Debt, the total amount of interest paid or accrued is less than the amount of
interest which would have accrued if such designated rates had at all times been
in effect, then, at such time and to the extent permitted by all Legal
Requirements, Borrower shall pay an amount equal to the difference between (a)
the lesser of the amount of interest which would have accrued if such designated
rates had at all times been in effect and the amount of interest which would
have accrued if the Maximum Rate had at all times been in effect, and (b) the
amount of interest actually paid or accrued on the Total Principal Debt.

         3.7      INTEREST CALCULATIONS.

         (a)      All computations of interest for Prime Rate Borrowings shall
be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of interest shall be calculated on
the basis of actual number of days (including the first (1st) day but excluding
the last day) elapsed but computed as if each calendar year consisted of 360
days. All interest rate determinations and calculations by Administrative Agent
shall be conclusive and binding absent manifest error.

         (b)      The provisions of this Agreement relating to the calculation
of the Prime Rate and the Adjusted Eurodollar Rate are included only for the
purpose of determining the rate of interest or other amounts to be paid
hereunder that are based upon such rate.

         3.8      MAXIMUM RATE. Regardless of any provision contained in any
Loan Document, no Credit Party shall ever be entitled to contract for, charge,
take, reserve, receive, or apply, as interest on the Obligation, or any part
thereof, any amount in excess of the Maximum Rate, and if any Credit Party ever
does so, then such excess shall be deemed a partial prepayment of principal and
treated hereunder as such and any remaining excess shall be refunded to
Borrower. In determining if the interest paid or payable exceeds the Maximum
Rate, Borrower and the Credit Parties shall, to the maximum extent permitted
under all Legal Requirements, (a) treat all Borrowings as but a single extension
of credit (and the Credit Parties and Borrower agree that such is the case and
that provision herein for multiple Borrowings is for convenience only), (b)
characterize any non-principal payment as an expense, fee, or premium rather
than as interest, (c) exclude voluntary prepayments and the effects thereof, and
(d) amortize, prorate, allocate, and spread the total amount of interest
throughout the entire contemplated term of the Obligation; provided that if the
Obligation is paid and performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual period of
existence thereof exceeds the Maximum Amount, then the Credit Parties shall
refund such excess, and, in such event, the Credit Parties shall not, to the
extent permitted by all Legal Requirements, be subject to any penalties provided
by any Legal Requirements for contracting for, charging, taking, reserving, or
receiving interest in excess of the Maximum Amount.

         3.9      INTEREST PERIODS. When Borrower requests any Eurodollar
Borrowing, Borrower may elect the interest period (each an "INTEREST PERIOD")
applicable thereto, which shall be, at Borrower's option, one (1) month or two
(2), three (3), or six (6) months, in each case to the extent available from
each Lender; provided, however, that: (a) the initial Interest Period for a
Eurodollar Borrowing shall commence on the date of such Borrowing (including the
date of any Conversion thereto), and each Interest Period occurring thereafter
in respect of such Borrowing shall commence on the day on which the next
preceding Interest Period applicable thereto expires; (b) if any Interest Period
for a Eurodollar

CREDIT AGREEMENT

                                       21



Borrowing begins on a day for which there is no numerically corresponding
Business Day in the calendar month at the end of such Interest Period, then such
Interest Period shall end on the next Business Day immediately following what
otherwise would have been such numerically corresponding day in the calendar
month at the end of such Interest Period (unless such date would be in a
different calendar month from what would have been the month at the end of such
Interest Period, or unless there is no numerically corresponding day in the
calendar month at the end of the Interest Period; whereupon, such Interest
Period shall end on the last Business Day in the calendar month at the end of
such Interest Period); (c) no Interest Period may be chosen with respect to any
portion of the Total Principal Debt which would extend beyond the scheduled
repayment date (including any dates on which mandatory prepayments are required
to be made) for such portion of the Total Principal Debt; and (d) no more than
an aggregate of five (5) Interest Periods shall be in effect at one time.

         3.10     CONVERSIONS; CONTINUATIONS. Borrower may (a) Convert a
Eurodollar Borrowing on the last day of an Interest Period to a Prime Rate
Borrowing, (b) Convert a Prime Rate Borrowing at any time to a Eurodollar
Borrowing, and (c) elect to Continue a Borrowing by selecting a new Interest
Period (in the case of a Eurodollar Borrowing), by giving a Notice of
Conversion/Continuation to Administrative Agent no later than 11:00 a.m. on the
third (3rd) Business Day prior to the date of Conversion or the last day of the
Interest Period, as the case may be; provided that, the principal amount
Converted to, or Continued as, a Eurodollar Borrowing shall be in a minimum
amount of $5,000,000 or a greater integral multiple of $1,000,000.
Administrative Agent shall timely notify each Lender with respect to each Notice
of Conversion/Continuation. Absent Borrower's Notice of Conversion/Continuation,
a Eurodollar Borrowing shall be deemed Converted to a Prime Rate Borrowing
effective as of the expiration of the Interest Period applicable thereto. No
Eurodollar Borrowing may be either made or Continued as a Eurodollar Borrowing,
and no Prime Rate Borrowing may be Converted to a Eurodollar Borrowing, (i) if
the interest rate for such Eurodollar Borrowing would exceed the Maximum Rate,
or (ii) while an Event of Default exists, unless Required Lenders otherwise
consent in writing.

         3.11     ORDER OF APPLICATION.

         (a)      Payments and prepayments of the Obligation shall be applied in
the order and manner specified in this Agreement; provided, however, if no order
is otherwise specified and no Potential Default or Event of Default exists,
payments and prepayments of the Obligation shall be applied first, to fees,
second, to accrued interest then due and payable on the Total Principal Debt,
and then to the remaining Obligation in the order and manner as Borrower may
direct.

         (b)      If a Potential Default or Event of Default exists (or if
Borrower fails to give directions as permitted under SECTION 3.11(a)), any
payment or prepayment (including proceeds from the exercise of any Rights) shall
be applied to the Obligation in the following order: (i) to the ratable payment
of all fees, expenses, and indemnities for which the Credit Parties have not
been paid or reimbursed in accordance with the Loan Documents; (ii) to the
ratable payment of accrued and unpaid interest on the Total Principal Debt;
(iii) to the ratable payment of the Total Principal Debt; and (iv) to the
payment of the remaining Obligation in the order and manner Required Lenders
deem appropriate.

         (c)      Subject to the provisions of SECTION 12 and provided that
Administrative Agent shall not in any event be bound to inquire into or to
determine the validity, scope, or priority of any interest or entitlement of any
Credit Party and may suspend all payments or seek appropriate relief (including
instructions from Required Lenders or an action in the nature of interpleader)
in the event of any doubt or dispute as to any apportionment or distribution
contemplated hereby, Administrative Agent shall

CREDIT AGREEMENT

                                       22



promptly distribute such amounts to each Credit Party in accordance with this
Agreement and the related Loan Documents.

         3.12     RIGHT OF SET-OFF; ADJUSTMENTS.

         (a)      SET-OFF. Upon the occurrence and during the continuance of any
Event of Default, each Lender (and each of its Affiliates) is hereby authorized
at any time and from time to time, to the fullest extent permitted by applicable
Legal Requirements, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender (or any of its Affiliates) to or
for the credit or the account of Borrower against any and all of the obligations
of Borrower now or hereafter existing under this Agreement and the Note held by
such Lender, irrespective of whether such Lender shall have made any demand
under this Agreement or such Note and although such obligations may be
unmatured. Each Lender agrees promptly to notify Borrower after any such set-off
and application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this SECTION 3.12(a) are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that such
Lender may have.

         (b)      SHARING OF PAYMENTS. If any Lender (a "BENEFITED LENDER")
shall at any time receive any payment of all or part of the Borrowings owing to
it, or interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Borrowings owing to it, or interest thereon, then
such Benefited Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Borrowings
owing to it, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably with all Lenders; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such Benefited
Lender, then such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
Borrower agrees that any Lender so purchasing a participation from a Lender
pursuant to this SECTION 3.12(b) may, to the fullest extent permitted by
applicable Legal Requirements, exercise all of its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Person were the direct creditor of Borrower in the amount of such participation.

         3.13     BOOKING BORROWINGS. To the extent permitted by all Legal
Requirements, any Lender may make, carry, or transfer its Borrowings at, to, or
for the account of any of its branch offices or the office of any of its
Affiliates; provided that no Affiliate shall be entitled to receive any greater
payment under SECTION 4 than the transferor Lender would have been entitled to
receive with respect to such Borrowings.

SECTION 4 CHANGE IN CIRCUMSTANCES.

         4.1      INCREASED COST AND REDUCED RETURN.

         (a)      CHANGE IN LEGAL REQUIREMENTS. If, after the date hereof, the
adoption of any applicable Legal Requirement, or any change in any applicable
Legal Requirement, or any change in the interpretation or administration thereof
by any Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any such
Governmental Authority:

CREDIT AGREEMENT

                                       23



                  (i)      shall subject such Lender (or its Applicable Lending
         Office) to any tax, duty, or other charge with respect to any
         Eurodollar Borrowing, its Note, or its obligation to make Eurodollar
         Borrowings, or change the basis of taxation of any amounts payable to
         such Lender (or its Applicable Lending Office) under this Agreement or
         its Note in respect of any Eurodollar Borrowings (other than taxes
         imposed on the overall net income of such Lender by the jurisdiction in
         which such Lender has its principal office or such Applicable Lending
         Office);

                  (ii)     shall impose, modify, or deem applicable any reserve,
         special deposit, assessment, or similar requirement (other than the
         Reserve Requirement utilized in the determination of the Adjusted
         Eurodollar Rate) relating to any extensions of credit or other assets
         of, or any deposits with or other liabilities or commitments of, such
         Lender (or its Applicable Lending Office), including the Commitment of
         such Lender hereunder; or

                  (iii)    shall impose on such Lender (or its Applicable
         Lending Office) or the London interbank market any other condition
         affecting this Agreement or its Note or any of such extensions of
         credit or liabilities or commitments;

and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of being obligated to make, making,
Converting into, Continuing, or maintaining any Eurodollar Borrowings or to
reduce any sum received or receivable by such Lender (or its Applicable Lending
Office) under this Agreement or its Note with respect to any Eurodollar
Borrowings, then Borrower shall pay to such Lender on demand such amount or
amounts as will compensate such Lender for such increased cost or reduction. If
any Lender requests compensation by Borrower under this SECTION 4.1(a), then
Borrower may, by notice to such Lender (with a copy to Administrative Agent),
suspend the obligation of such Lender to make or Continue Eurodollar Borrowings,
or Convert all Eurodollar Borrowings into Prime Rate Borrowings, until the event
or condition giving rise to such request ceases to be in effect (in which case
the provisions of SECTION 4.4 shall be applicable); provided that such
suspension shall not affect the Right of such Lender to receive the compensation
so requested.

         (b)      CAPITAL ADEQUACY. If, after the date hereof, any Lender shall
have determined that the adoption of any applicable Legal Requirement regarding
capital adequacy or any change therein or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
Governmental Authority, has or would have the effect of reducing the rate of
return on the capital of such Lender or any corporation controlling such Lender
as a consequence of such Lender's obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its policies with
respect to capital adequacy), then from time to time upon demand Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction.

         (c)      NOTICE. Each Lender shall promptly notify Borrower and
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
SECTION 4.1 and will use reasonable efforts to designate a different Applicable
Lending Office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to it. Any Lender claiming compensation under this SECTION 4.1
shall furnish to Borrower and Administrative Agent a statement setting forth the
additional amount or amounts to be paid to it hereunder which shall be

CREDIT AGREEMENT

                                       24



conclusive in the absence of manifest error. In determining such amount, such
Lender may use any reasonable averaging and attribution methods.

         4.2      LIMITATION ON TYPES OF BORROWINGS.

         If on or prior to the first (1st) day of any Interest Period for any
Eurodollar Borrowing:

         (a)      Administrative Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period; or

         (b)      Required Lenders determine (which determination shall be
conclusive) and notify Administrative Agent that the Adjusted Eurodollar Rate
will not adequately and fairly reflect the cost to Lenders of funding Eurodollar
Borrowings for such Interest Period;

then Administrative Agent shall give Borrower prompt notice thereof specifying
the relevant amounts or periods, and so long as such condition remains in
effect, Lenders shall be under no obligation to make additional Eurodollar
Borrowings, Continue any Eurodollar Borrowings, or to Convert any Prime Rate
Borrowings to Eurodollar Borrowings and Borrower shall, on the last day(s) of
the then-current Interest Period(s) for the outstanding Eurodollar Borrowings,
either prepay such Borrowings or Convert such Borrowings into Prime Rate
Borrowings in accordance with the terms of this Agreement.

         4.3      ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Borrowings
hereunder, then such Lender shall promptly notify Administrative Agent and
Borrower thereof and such Lender's obligation to make or Continue Eurodollar
Borrowings and to Convert Prime Rate Borrowings into Eurodollar Borrowings shall
be suspended until such time as such Lender may again make, maintain, and fund
Eurodollar Borrowings (in which case the provisions of SECTION 4.4 shall be
applicable).

         4.4      TREATMENT OF AFFECTED LOANS. If the obligation of any Lender
to make or Continue Eurodollar Borrowings or to Convert Prime Rate Borrowings
into Eurodollar Borrowings shall be suspended pursuant to SECTION 4.1, 4.2, or
4.3, then such Lender's Eurodollar Borrowings shall be automatically Converted
into Prime Rate Borrowings on the last day(s) of the then current Interest
Period(s) for all Eurodollar Borrowings (or, in the case of a Conversion
required by SECTION 4.3, on such earlier date as such Lender may specify to
Borrower with a copy to Administrative Agent) and, unless and until such Lender
gives notice as provided below that the circumstances specified in SECTION 4.1,
4.2, or 4.3 that gave rise to such Conversion no longer exist:

         (a)      to the extent that such Lender's Eurodollar Borrowings have
been so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Borrowings shall be applied
instead to its Prime Rate Borrowings; and

         (b)      all Borrowings that would otherwise be made or Continued by
such Lender as Eurodollar Borrowings shall be made or Continued instead as Prime
Rate Borrowings, and all Borrowings of such Lender that would otherwise be
Converted into Eurodollar Borrowings shall be Converted instead into (or shall
remain as) Prime Rate Borrowings.

CREDIT AGREEMENT

                                       25



If such Lender gives notice to Borrower (with a copy to Administrative Agent)
that the circumstances specified in SECTION 4.1, 4.2, or 4.3 that gave rise to
the Conversion of such Lender's Eurodollar Borrowings pursuant to this SECTION
4.4 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Borrowings made by
other Lenders are outstanding, then such Lender's Prime Rate Borrowings shall be
automatically Converted, on the first (1st) day(s) of the next succeeding
Interest Period(s) for such outstanding Eurodollar Borrowings, to the extent
necessary so that, after giving effect thereto, all Eurodollar Borrowings held
by Lenders are held Pro Rata (as to principal amounts, Types, and Interest
Periods).

         4.5      COMPENSATION. Upon the request of any Lender, Borrower shall
pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (herein called a "CONSEQUENTIAL LOSS") incurred by it as a result of:

         (a)      any payment, prepayment, or Conversion of a Eurodollar
Borrowing for any reason (including the acceleration of the Obligation pursuant
to SECTION 11.1) on a date other than the last day of the Interest Period for
such Borrowing; or

         (b)      any failure by Borrower for any reason (including the failure
of any condition precedent specified in SECTION 6 to be satisfied) to borrow,
Convert, Continue, or prepay a Eurodollar Borrowing on the date for such
Borrowing, Conversion, Continuation, or prepayment specified in the relevant
Notice of Borrowing, Notice of Conversion/Continuation, or Notice of Prepayment.

         4.6      TAXES.

         (a)      Any and all payments by Borrower to or for the account of any
Credit Party hereunder or under any other Loan Document shall be made free and
clear of and without deduction for any and all present or future Taxes,
excluding, in the case of each Credit Party, Taxes based on or measured by its
income, and franchise taxes imposed on it by the jurisdiction under the Legal
Requirements of which such Credit Party (or its Applicable Lending Office) is
organized or any political subdivision thereof (such income and franchise Taxes
being "EXCLUDED TAXES"). If Borrower shall be required by any Legal Requirement
to deduct any Taxes (other than Excluded Taxes) from or in respect of any sum
payable under this Agreement or any other Loan Document to any Credit Party,
then (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this SECTION 4.6) such Credit Party receives an amount equal to
the sum it would have received had no such deductions been made, (ii) Borrower
shall make such deductions, and (iii) Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with all Legal Requirements.

         (b)      In addition, Borrower agrees to pay any and all present or
future stamp or documentary Taxes and any other excise or property Taxes or
charges or similar levies which arise from any payment made under this Agreement
or any other Loan Document or from the execution or delivery of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter referred
to as "OTHER TAXES").

         (c)      Borrower agrees to indemnify each Credit Party for the full
amount of Taxes (other than Excluded Taxes) and Other Taxes (including any Taxes
or Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this SECTION 4.6) paid by such Credit Party and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto.

CREDIT AGREEMENT

                                       26



         (d)      Each Lender organized under the Legal Requirements of a
jurisdiction outside the United States, on or prior to the date of its execution
and delivery of this Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on which it becomes a Lender
in the case of each other Lender, and from time to time thereafter if requested
in writing by Borrower or Administrative Agent (but only so long as such Lender
remains lawfully able to do so), shall provide Borrower and Administrative Agent
with (i) Internal Revenue Service Form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States, (ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any
successor form prescribed by the Internal Revenue Service, and (iii) any other
form or certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Tax Code), certifying that such
Lender is entitled to an exemption from or a reduced rate of tax on payments
pursuant to this Agreement or any of the other Loan Documents.

         (e)      For any period with respect to which a Lender has failed to
provide Borrower and Administrative Agent with the appropriate form pursuant to
SECTION 4.6(d) (unless such failure is due to a change in any Legal Requirement
occurring subsequent to the date on which a form originally was required to be
provided), such Lender shall not be entitled to indemnification under SECTIONS
4.6(a) or (b) with respect to Taxes imposed by the United States; provided,
however, that should a Lender, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes (other than Excluded
Taxes) because of its failure to deliver a form required hereunder, Borrower
shall take such steps as such Lender shall reasonably request to assist such
Lender to recover such Taxes.

         (f)      If Borrower is required to pay additional amounts to or for
the account of any Lender pursuant to this SECTION 4.6, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.

         (g)      Within thirty (30) days after the date of any payment of Taxes
or Other Taxes, Borrower shall furnish to Administrative Agent the original or a
certified copy of a receipt evidencing such payment.

         (h)      Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained in
SECTIONS 4.1, 4.5, and 4.6 shall survive the termination of the Total Commitment
and the payment in full of the Notes.

SECTION 5 FEES.

         5.1      TREATMENT OF FEES. Except as otherwise provided by any Legal
Requirement, the fees described in this SECTION 5: (a) do not constitute
compensation for the use, detention, or forbearance of money; (b) are in
addition to, and not in lieu of, interest and expenses otherwise described in
this Agreement; (c) shall be payable in accordance with SECTION 3.1; (d) shall
be non-refundable; (e) shall, to the fullest extent permitted by all Legal
Requirements, bear interest, if not paid when due, at the Default Rate; and (f)
shall be calculated on the basis of actual number of days (including the first
day but excluding the last day) elapsed, but computed as if each calendar year
consisted of 360 days.

CREDIT AGREEMENT

                                       27



         5.2      FEES OF ADMINISTRATIVE AGENT. Borrower shall pay to
Administrative Agent the fees specified in the letter agreement dated May 29,
2003 between Administrative Agent and Borrower, as amended, which fees shall be
for the account of Administrative Agent and for the account of the Credit
Parties as shall be agreed between Administrative Agent and each other Credit
Party.

         5.3      FACILITY FEES. Following the Closing Date, Borrower shall pay
to Administrative Agent, for the ratable account of Lenders, a facility fee,
calculated daily but payable quarterly in installments in arrears, on each March
31, June 30, September 30, and December 31, on the Termination Date, and
thereafter on demand, commencing September 30, 2003. Each installment shall be
in an amount equal to the product of (a) the rate per annum equal to the
Applicable Margin for Facility Fees times (b) the daily amount of the Commitment
of each Lender, whether used or unused (or, after the Termination Date, on the
outstanding Principal Debt), in each case during the period from and including
the last payment date to and excluding the payment date for such installment.

         5.4      UTILIZATION FEE. Following the Closing Date, Borrower shall
pay to Administrative Agent, for the ratable benefit of Lenders, a utilization
fee, calculated daily but payable quarterly in installments in arrears, on each
payment date for facility fees as set forth in SECTION 5.3. Each installment
shall be in an amount equal to the product of (a) the rate per annum equal to
the Applicable Margin for Utilization Fees times (b) the daily Total Principal
Debt for each day in which the Total Principal Debt exceeds an amount equal to
fifty percent (50%) of the Total Commitment during the period from and including
the last payment date to and excluding the payment date for such installment.

SECTION 6 CONDITIONS PRECEDENT.

         6.1      CONDITIONS PRECEDENT TO CLOSING. This Agreement shall not
become effective unless the following conditions precedent are satisfied on or
before the Closing Date:

         (a)      BORROWER DOCUMENTS. Borrower shall deliver or cause to be
delivered to Administrative Agent the following, each, unless otherwise noted,
dated as of the Closing Date:

                  (i)      certified copies of its Constituent Documents,
         together with existence and good standing certificates from the
         Secretary of State of Nevada and foreign qualification and good
         standing certificates from the State of Texas, each dated a recent date
         prior to the Closing Date;

                  (ii)     a certificate of Responsible Officers of Borrower
         certifying (A) its Constituent Documents, (B) resolutions of its Board
         of Directors (or of the Executive Committee of the Board of Directors
         upon delivery of resolutions of the Board of Directors authorizing such
         action by an Executive Committee) approving and authorizing the
         execution, delivery, and performance of this Agreement and the other
         Loan Documents, certified as of the Closing Date as being in full force
         and effect without modification or amendment, and (C) signatures and
         incumbency of its officers executing this Agreement and the other Loan
         Documents;

                  (iii)    executed originals of this Agreement, the Notes, if
         any, and the other Loan Documents to be executed by Borrower; and

                  (iv)     such other documents as Administrative Agent may
         reasonably request.

         (b)      OPINION OF COUNSEL FOR BORROWER. The Credit Parties and their
respective counsel shall have received originally executed copies of a favorable
written opinion of counsel for Borrower, in form

CREDIT AGREEMENT

                                       28



and substance reasonably satisfactory to Administrative Agent and its counsel,
dated as of the Closing Date, and setting forth substantially the matters in the
opinions designated in EXHIBIT D.

         (c)      FEES. Borrower shall have paid to Administrative Agent, (i)
for distribution (as appropriate) to the Credit Parties, the fees payable on the
Closing Date referred to in SECTION 5.2, and (ii) all reasonable fees and
expenses incurred by Administrative Agent and Arranger in connection with the
negotiation, preparation, and closing of the transactions evidenced by the Loan
Documents (including, without limitation, Attorney Costs).

         (d)      COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent, acting on behalf of Lenders, and its counsel shall be
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.

         (e)      TERMINATION OF EXISTING CREDIT FACILITY. Borrower shall have
provided to Administrative Agent evidence of payment and cancellation of the
Existing Credit Facility.

         6.2      CONDITIONS TO ALL CREDIT EXTENSIONS. The obligations of the
Credit Parties to make each Credit Extension (including the initial Credit
Extension) are subject to the following further conditions precedent:

         (a)      NOTICE OF BORROWING. Administrative Agent shall have received,
in accordance with the provisions of SECTION 2.4 and SECTION 3.10, an originally
executed Notice of Borrowing or Notice of Conversion/Continuation, as
applicable.

         (b)      REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. As
of the date of such Credit Extension, Borrower's representations and warranties
in each Loan Document are true, correct, and complete in all material respects
(unless they speak to a specific date or are based on facts which have changed
by transactions expressly contemplated or permitted by this Agreement).

         (c)      NO DEFAULT. No Potential Default or Event of Default exists or
would be caused by the making of such Credit Extension.

         (d)      NO INJUNCTION OR RESTRAINING ORDER. No order, judgment, or
decree of any Governmental Authority shall purport to enjoin or restrain any
Credit Party from making such Credit Extension.

         (e)      NO VIOLATION. The making of such Credit Extension shall not
violate any Legal Requirement, including Regulation T, Regulation U, or
Regulation X of the Board of Governors of the Federal Reserve System.

         (f)      OTHER MATTERS. All matters related to such Credit Extension
must be satisfactory to Required Lenders and their respective counsel in their
reasonable determination, and upon the reasonable request of Administrative
Agent, Borrower shall deliver to Administrative Agent evidence substantiating
any of the matters in the Loan Documents which are necessary to enable Borrower
to qualify for such Credit Extension.

CREDIT AGREEMENT

                                       29



Each condition precedent in this Agreement is material to the transactions
contemplated in this Agreement, and time is of the essence in respect of each
thereof. Subject to the prior approval of Required Lenders, the Credit Parties
may make a Credit Extension without all conditions being satisfied, but, to the
extent permitted by all Legal Requirements, such Credit Extension shall not be
deemed to be a waiver of the requirement that each such condition precedent be
satisfied as a prerequisite for any subsequent Credit Extension, unless Required
Lenders specifically waive each such item in writing.

SECTION 7 REPRESENTATIONS AND WARRANTIES.

         Borrower represents and warrants to the Credit Parties as follows:

         7.1      PURPOSE OF CREDIT FACILITY. Borrower will use (or will loan or
contribute such proceeds to its Subsidiaries to so use) all proceeds of Credit
Extensions for one or more of the following: (a) to refinance existing Debt of
Borrower under the Existing Credit Facility; and (b) for lawful, corporate
purposes including, without limitation, liquidity support for commercial paper
issued by Borrower. No Restricted Company is engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" within the meaning of Regulation U. No
part of the proceeds of any Credit Extension will be used, directly or
indirectly, for a purpose which violates any Legal Requirement, including the
provisions of Regulation T, U, or X (as enacted by the Board of Governors of the
Federal Reserve System, as amended). "Margin Stock" (as defined in Regulation U)
constitutes less than twenty-five percent (25%) of those assets of the Companies
that are subject to any limitation on sale, pledge, or similar restrictions
hereunder.

         7.2      EXISTENCE, GOOD STANDING, AUTHORITY, AND AUTHORIZATIONS. Each
Restricted Company is duly organized, validly existing, and in good standing
under the Legal Requirements of its jurisdiction of organization. Each
Restricted Company is duly qualified to transact business and is in good
standing in each jurisdiction where the nature and extent of its business and
properties require the same, except where the failure to be so qualified could
not constitute a Material Adverse Event. Each Restricted Company possesses all
the Authorizations necessary or required in the conduct of its respective
business(es), and the same are valid, binding, enforceable, and subsisting
without any defaults thereunder or enforceable adverse limitations thereon and
are not subject to any proceedings or claims opposing the issuance, development,
or use thereof or contesting the validity thereof, except for any such
circumstance that could not be a Material Adverse Event.

         7.3      SUBSIDIARIES; CAPITAL STOCK. The Companies have no
Subsidiaries except as disclosed on SCHEDULE 7.3, such schedule reflecting each
Subsidiary's jurisdiction of incorporation (as supplemented and modified in
writing from time to time to reflect any changes to such SCHEDULE as a result of
transactions permitted or not prohibited by the Loan Documents) and each
Unrestricted Subsidiary is designated as such. All of the outstanding Stock of
each Subsidiary is duly authorized, validly issued, fully paid, and
nonassessable and, except (a) for directors' qualifying shares, or (b) as
otherwise set forth on SCHEDULE 7.3, are owned directly or indirectly by
Borrower (as supplemented and modified in writing from time to time to reflect
any changes to such SCHEDULE as a result of transactions permitted or not
prohibited by the Loan Documents), free and clear, in the case of all Restricted
Subsidiaries, of any Liens, restrictions (including restrictions on transfer),
claims, or Rights of another Person except for restrictions on transfer imposed
by securities Legal Requirements and general corporate Legal Requirements.

         7.4      AUTHORIZATION AND CONTRAVENTION. The execution and delivery by
Borrower of each Loan Document and the performance by Borrower of its
obligations thereunder (a) are within the

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                                       30



corporate power of Borrower, (b) have been duly authorized by all necessary
corporate action on the part of Borrower, (c) require no action by or in respect
of Authorizations of or filing with, any Governmental Authority, which action,
Authorization, or filing has not been taken, received, or made on or prior to
the Closing Date (or if later, the date of execution and delivery of such Loan
Document) other than filing of the Loan Documents pursuant to securities Legal
Requirements, (d) will not violate any provision of the Constituent Documents of
any Company, (e) will not violate any provision of any Legal Requirement
applicable to any Company, other than such violations which individually or
collectively could not be a Material Adverse Event, (f) will not violate any
material written or oral agreements, contracts, commitments, or understandings
to which any Company is a party, other than such violations which could not be a
Material Adverse Event, or (g) will not result in the creation or imposition of
any Lien on any asset of any Company.

         7.5      BINDING EFFECT. Upon execution and delivery by all parties
thereto, each Loan Document to which Borrower is a party will constitute a
legal, valid, and binding obligation of Borrower, enforceable against Borrower
in accordance with its terms, except as enforceability may be limited by
applicable Debtor Relief Laws and general principles of equity.

         7.6      FINANCIAL STATEMENTS. The Current Financials were prepared in
accordance with GAAP and present fairly, in all material respects, the
consolidated financial condition, results of operations, and cash flows of the
Companies as of and for the portion of the fiscal year ending on the date or
dates thereof (subject only to normal year-end audit adjustments). There were no
material liabilities, direct or indirect, fixed or contingent, of the Companies
as of the date or dates of the Current Financials which are required under GAAP
to be reflected therein or in the notes thereto, and are not so reflected. No
Material Adverse Event has occurred from March 31, 2003 to the Closing Date.

         7.7      LITIGATION, CLAIMS, INVESTIGATIONS. No Company is subject to,
or aware of the threat of, any Litigation which is reasonably likely to be
determined adversely to any Company, and, if so adversely determined, could
(individually or collectively with other Litigation) be a Material Adverse
Event. There are no outstanding orders or judgments for the payment of money in
excess of $20,000,000 (individually or collectively) or any warrant of
attachment, sequestration, or similar proceeding against the assets of any
Company having a value (individually or collectively) of $20,000,000 or more
which is not either (a) stayed on appeal, or (b) being contested in good faith
by appropriate proceedings diligently conducted, and against which reserves or
other provisions required by GAAP have been made. There are no formal
complaints, suits, claims, investigations, or proceedings initiated at or by any
Governmental Authority pending or, to the best knowledge of Borrower, threatened
against any Company which is reasonably likely to be determined adversely and,
if so adversely determined, could be a Material Adverse Event, nor any
judgments, decrees, or orders of any Governmental Authority outstanding against
any Company that could be a Material Adverse Event.

         7.8      TAXES. All Tax returns of each Company required to be filed
have been filed (or extensions have been granted) prior to delinquency, except
for any such returns for which the failure to so file could not be a Material
Adverse Event, and all Taxes imposed upon each Company which are due and payable
have been paid prior to delinquency, other than Taxes (a) that are being
contested in good faith by appropriate proceedings diligently conducted, and
against which reserves or other provisions required by GAAP have been made, or
(b) for which nonpayment thereof could not be a Material Adverse Event.

         7.9      ENVIRONMENTAL MATTERS. No Company, after reasonable inquiry,
(a) knows of any environmental condition or circumstance, such as the presence
or Release of any Hazardous Materials, on any property presently or previously
owned or leased by any Company or to which Hazardous Materials

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                                       31



generated by any Company have been taken, that could be a Material Adverse
Event, (b) knows of any violation by any Company of any Environmental Law that
could be a Material Adverse Event, or (c) knows that any Company is under any
obligation to remedy any violation of any Environmental Law or any Release or
threatened Release of any Hazardous Materials that could be a Material Adverse
Event.

         7.10     EMPLOYEE BENEFIT PLANS. (a) No Employee Plan has incurred an
accumulated funding deficiency, as defined in Section 302 of ERISA and Section
412 of the Tax Code, (b) neither Borrower nor any ERISA Affiliate has incurred a
liability which is currently due and remains unpaid under Title IV of ERISA to
the PBGC or to an Employee Plan in connection with any such Employee Plan, (c)
neither Borrower nor any ERISA Affiliate has withdrawn in whole or in part from
participation in a Multiemployer Plan, (d) Borrower has not engaged in any
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Tax Code), and (e) no Reportable Event has occurred which is reasonably
likely to result in the termination of an Employee Plan, if such accumulated
funding deficiency, liability, withdrawal, prohibited transaction, or Reportable
Event is reasonably likely to result individually or in the aggregate in
liability on the part of Borrower in excess of $20,000,000. The present value of
all benefit liabilities within the meaning of Title IV of ERISA under each
Employee Plan (based on those actuarial assumptions used to fund such Employee
Plan) did not, as of the last annual valuation date for the most recent plan
year of such Employee Plan, exceed the value of the assets of such Employee
Plan, and the total present values of all benefit liabilities within the meaning
of Title IV of ERISA of all Employee Plans (based on the actuarial assumptions
used to fund each such Employee Plan) did not, as of the respective annual
valuation dates for the most recent plan year of each such Plan, exceed the
value of the assets of all such Employee Plans.

         7.11     PROPERTIES; LIENS. Each Restricted Company has good and
indefeasible title to all its property reflected on the Current Financials,
except for property that (a) is obsolete, or (b) has been disposed of in the
ordinary course of business or as otherwise permitted by the Loan Documents.
Except for Permitted Liens, there is no Lien on any property of any Restricted
Company.

         7.12     GOVERNMENT REGULATIONS. No Company is subject to regulation
under the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, or any other Legal Requirement (other than
Regulations T, U, and X of the Board of Governors of the Federal Reserve System)
which regulates the incurrence of Debt.

         7.13     TRANSACTIONS WITH AFFILIATES. No Restricted Company is a party
to a transaction with any of its Affiliates, other than transactions upon fair
and reasonable terms not materially less favorable than such Restricted Company
could obtain or could become entitled to in an arm's-length transaction with a
Person that was not its Affiliate.

         7.14     NO DEFAULT. No event has occurred and is continuing or would
result from the incurring of obligations by Borrower under this Agreement or any
other Loan Document which constitutes an Event of Default or a Potential
Default. No Restricted Company is in default under or with respect to any
material written or oral agreements, contracts, commitments, or understandings
to which any Restricted Company is party which could, individually or together
with all such defaults, be a Material Adverse Event.

         7.15     SOLVENCY. At the time of each Credit Extension hereunder, each
Restricted Company is (and after giving effect to the transactions contemplated
by the Loan Documents and any incurrence of additional Debt, will be) Solvent.

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                                       32



         7.16     COMPLIANCE WITH LEGAL REQUIREMENTS. No Company is in violation
of any Legal Requirements (including Environmental Laws), other than such
violations which could not, individually or collectively, be a Material Adverse
Event. No Company has received notice alleging any non-compliance with any Legal
Requirements, except for such non-compliance which no longer exists or which
could not be a Material Adverse Event.

         7.17     FULL DISCLOSURE. There is no material fact or condition
relating to the Loan Documents or the financial condition, business, or property
of any Company which could be a Material Adverse Event and which has not been
disclosed, in writing, to Administrative Agent. All information heretofore
furnished by any Company to any Credit Party in connection with the Loan
Documents was, and all such information hereafter furnished by any Company to
any Credit Party will be, true and accurate in all material respects or based on
reasonable estimates on the date as of which such information is stated or
certified.

         7.18     SENIOR DEBT. The Obligation constitutes (and will constitute
until payment in full and cancellation of all Commitments hereunder) Borrower's
direct and unconditional obligation and ranks at least pari passu with other
unsecured and unsubordinated Debt of Borrower.

         7.19     TAX SHELTER REGULATIONS. Borrower does not intend to treat the
Borrowings and related transactions as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4). In the event Borrower
determines to take any action inconsistent with such intention, it will promptly
notify Administrative Agent thereof. If Borrower so notifies Administrative
Agent, Borrower acknowledges that one or more Lenders may treat its Credit
Extensions as part of a transaction that is subject to Treasury Regulation
Section 301.6112-1, and such Lender or Lenders, as applicable, will maintain the
lists and other records required by such Treasury Regulation.

SECTION 8 AFFIRMATIVE COVENANTS.

         Borrower covenants and agrees to perform, observe, and comply with each
of the following covenants, from the Closing Date and so long thereafter as
Lenders are committed to make any Credit Extensions under this Agreement and
thereafter until the payment in full of all Principal Debt and payment in full
of all interest, fees, and other amounts of the Obligation then due and owing,
unless Borrower receives a prior written consent to the contrary by
Administrative Agent as authorized by Required Lenders:

         8.1      USE OF PROCEEDS. Borrower shall use the proceeds of all Credit
Extensions only for the purposes represented herein.

         8.2      BOOKS AND RECORDS. Borrower shall, and shall cause each other
Company to, maintain books, records, and accounts necessary to prepare all
Financial Statements delivered hereunder in accordance with GAAP.

         8.3      ITEMS TO BE FURNISHED. Borrower shall cause the following to
be furnished to Administrative Agent and each Lender:

         (a)      ANNUAL FINANCIAL STATEMENTS. Promptly after preparation, and
no later than one hundred and twenty (120) days after the last day of each
fiscal year of Borrower, Financial Statements showing the consolidated and
consolidating financial condition and results of operations of the Companies, as
of, and for the year ended on, such day, each accompanied by:

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                                       33


                  (I)      with respect to the consolidated Financial
         Statements, the unqualified opinion of a firm of nationally-recognized
         independent certified public accountants, based on an audit using
         generally accepted auditing standards, that such Financial Statements
         were prepared in accordance with GAAP and present fairly the
         consolidated financial condition and results of operations of the
         Companies;

                  (II)     any management letter delivered to Borrower prepared
         by such accounting firm with respect to such Financial Statements; and

                  (III)    a Compliance Certificate.

         (b)      PERIODIC FINANCIAL STATEMENTS. Promptly after preparation, and
no later than sixty (60) days after the last day of each fiscal quarter of
Borrower (other than the last fiscal quarter of any fiscal year), Financial
Statements showing the consolidated and consolidating financial condition and
results of operations calculated for the Companies for such fiscal quarter and
for the period from the beginning of the then-current fiscal year to such last
day, accompanied by (i) an internally prepared financial summary of the
Companies and other information as Administrative Agent may reasonably request,
and (ii) a Compliance Certificate with respect to such Financial Statements.

         (c)      MANAGEMENT LETTERS. Promptly upon receipt thereof, copies of
all auditor's annual management letters delivered to Borrower.

         (d)      NOTICES OF LITIGATION, DEFAULTS, ETC. Notice, promptly after
Borrower knows or has reason to know of (i) the existence and status of any
Litigation which is reasonably likely to be determined adversely and, if so
adversely determined, could be a Material Adverse Event, or of any order or
judgment for the payment of money which (individually or collectively) is in
excess of $20,000,000, or any warrant of attachment, sequestration, or similar
proceeding against the assets of any Company having a value (individually or
collectively) of $20,000,000 or more, (ii) any material change in any material
fact or circumstance represented or warranted in any Loan Document, (iii) a
Potential Default or Event of Default specifying the nature thereof and what
action Borrower or any other Company has taken, is taking, or proposes to take
with respect thereto; provided, however, that Borrower shall have no obligation
to notify Administrative Agent or Lenders of a Potential Default under SECTION
9.12 unless Borrower has actual knowledge of such Potential Default and such
Potential Default has continued, or Borrower reasonably expects such Potential
Default to continue, for a period of five (5) consecutive days, (iv) the receipt
by any Company of any notice from any Governmental Authority of the expiration
without renewal, termination, material modification or suspension of, or
institution of any proceedings to terminate, materially modify, or suspend, any
Authorization which any Company is required to hold in order to operate its
business in compliance with all Legal Requirements, other than such expirations,
terminations, suspensions, or modifications which individually or in the
aggregate would not be a Material Adverse Event, (v) any federal, state, or
local statute, regulation, or ordinance or judicial or administrative order
limiting or controlling the operations of any Company which has been issued or
adopted hereafter and which is of material adverse importance or effect in
relation to the operations of the Companies taken as a whole, (vi) the receipt
by any Company of notice of any violation or alleged violation of any
Environmental Law, which violation or alleged violation could, individually or
collectively with other such violations or allegations, reasonably be expected
to be a Material Adverse Event, or (vii) (A) the occurrence of a Reportable
Event that, alone or together with any other Reportable Event, could reasonably
be expected to result in liability of any Company to the PBGC in an aggregate
amount exceeding $20,000,000; (B) any expressed statement in writing on the part
of the PBGC of its

CREDIT AGREEMENT

                                       34


intention to terminate any Employee Plan or Plans; (C) Borrower's or an ERISA
Affiliate's becoming obligated to file with the PBGC a notice of failure to make
a required installment or other payment with respect to an Employee Plan; or (D)
the receipt by Borrower or an ERISA Affiliate from the sponsor of a
Multiemployer Plan of either a notice concerning the imposition of withdrawal
liability in an aggregate amount exceeding $20,000,000 or of the impending
termination or reorganization of such Multiemployer Plan.

         (e)      SCHEDULE AND EXHIBIT UPDATES. Concurrently with the delivery
of each Compliance Certificate, to the extent any of the information or
disclosures provided on any of the SCHEDULES or EXHIBITS delivered pursuant to
this Agreement or any Loan Documents has become outdated or incorrect in any
material respect, such revised or updated SCHEDULES or EXHIBITS as may be
necessary or appropriate to update or correct such information or disclosures.

         (f)      SEC FILINGS. Promptly after the filing thereof, a true,
correct, and complete copy of each Form 10-K, Form 10-Q, and Form 8-K filed by
or on behalf of Borrower with the Securities and Exchange Commission.

         (g)      CHANGE IN RATINGS. Promptly upon the receipt of notice
thereof, and in any event within three (3) Business Days after any change in the
Moody's Rating or the S & P Rating, notice of such change.

         (h)      TAX SHELTER REGULATIONS. Promptly after Borrower has notified
Administrative Agent of any intention by Borrower to treat the Borrowings and
related transactions as being a "reportable transaction" (within the meaning of
Treasury Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886 or
any successor form.

         (i)      OTHER INFORMATION. Promptly upon request therefor by any
Credit Party, such information (not otherwise required to be furnished under the
Loan Documents) respecting the business affairs, assets, and liabilities of the
Companies, as reasonably requested.

         8.4      INSPECTIONS. Borrower shall, and shall cause each other
Company to, upon reasonable notice, allow any Credit Party (or its
Representatives) (except in the case of Administrative Agent or its
Representatives or unless an Event of Default exists (which in either case shall
be at the expense of Borrower), at the sole expense of such Credit Party) to
inspect any of their properties, to review reports, files, and other records and
to make and take away copies thereof, to conduct tests or investigations, and to
discuss any of their affairs, conditions, and finances with other creditors,
directors, officers, employees, other representatives, and independent
accountants of the Companies, from time to time, during reasonable business
hours.

         8.5      TAXES. Borrower shall, and shall cause each other Company to
(a) promptly pay when due any and all Taxes other than Taxes the failure to pay
could not be a Material Adverse Event or the applicability, amount, or validity
of which is being contested in good faith by appropriate proceedings diligently
conducted, and against which reserves or other provisions required by GAAP have
been made, and in respect of which levy and execution of any lien securing same
have been and continue to be stayed, and (b) notify Administrative Agent
immediately if the Internal Revenue Service or any other taxing authority
commences or notifies any Company of its intention to commence an audit or
investigation with respect to any Taxes of any kind due or alleged to be due
from any Company to the extent that the failure to pay such Taxes could be a
Material Adverse Event.

CREDIT AGREEMENT

                                       35


         8.6      PAYMENT OF OBLIGATIONS. Borrower shall pay the Obligation in
accordance with the terms and provisions of the Loan Documents. Borrower shall,
and shall cause each Restricted Company to, promptly pay (or renew and extend)
all of its material obligations as the same become due (unless such obligations
(other than the Obligation) are being contested in good faith by appropriate
proceedings).

         8.7      MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS. Except as
otherwise permitted by SECTION 9.10, Borrower shall, and shall cause each other
Company to, at all times: (a) maintain its existence and good standing in the
jurisdiction of its organization and its authority to transact business in all
other jurisdictions where the failure to so maintain could be a Material Adverse
Event; (b) maintain all licenses, permits, and franchises necessary for its
business where the failure to so maintain could be a Material Adverse Event; (c)
keep all of its assets which are useful in and necessary to its business in good
working order and condition (ordinary wear and tear excepted) and make all
necessary repairs thereto and replacements thereof where the failure to do so
could be a Material Adverse Event; and (d) do all things necessary to obtain,
renew, extend, and continue in effect all Authorizations which may at any time
and from time to time be necessary for the Companies to operate their businesses
in compliance with all Legal Requirements, where the failure to so obtain,
renew, extend, or continue in effect could be a Material Adverse Event.

         8.8      INSURANCE. Borrower shall, and shall cause each other Company
to, maintain with financially sound, responsible, and reputable insurance
companies or associations insurance reasonably acceptable to Administrative
Agent concerning its properties and businesses against casualties and
contingencies and of types and in amounts (and with co-insurance and
deductibles) as is customary in the case of similar businesses. At
Administrative Agent's request, Borrower shall, and shall cause each other
Company to, promptly deliver to Administrative Agent evidence of insurance for
each policy of insurance and evidence of payment of all premiums.

         8.9      PRESERVATION AND PROTECTION OF RIGHTS. Borrower shall, and
shall cause each other Company to, perform such acts and duly authorize,
execute, acknowledge, deliver, file, and record any additional agreements,
documents, instruments, and certificates as Administrative Agent or Required
Lenders may reasonably deem necessary or appropriate in order to preserve and
protect the Rights of the Credit Parties under any Loan Document.

         8.10     ENVIRONMENTAL LAWS. Borrower shall, and shall cause each other
Company to (a) conduct its business so as to comply with all applicable
Environmental Laws and shall promptly take corrective action to remedy any
non-compliance with any Environmental Law, and (b) promptly investigate and
remediate any known Release or threatened Release of any Hazardous Material on
any property owned by any Company or at any facility operated by any Company to
the extent and degree necessary to comply with all Environmental Laws, except,
in the cases of CLAUSES (a) and (b), to the extent that the failure to do so
could not be a Material Adverse Event.

         8.11     COMPLIANCE WITH LEGAL REQUIREMENTS. Borrower shall, and shall
cause each other Company to, comply with the provisions of all Legal
Requirements applicable to it, and any material written or oral agreement,
contract, commitment, or understanding to which it is a party, unless the
failure to so comply alone, or when aggregated with all other such
non-compliance, could not be a Material Adverse Event.

         8.12     DESIGNATION OF UNRESTRICTED SUBSIDIARIES

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                                       36


         (a)      Borrower shall have the option of designating any Restricted
Subsidiary as an Unrestricted Subsidiary by giving prior written notice to the
Administrative Agent and Lenders (as provided in the next sentence), provided
that (i) such designation does not result in an Event of Default or a Potential
Default, and (ii) the aggregate of (x) the Recourse Debt of such Restricted
Subsidiary (determined as at the date of such designation), and (y) the
aggregate Recourse Debt of all other Subsidiaries of Borrower, if any, which
Borrower has previously designated as Unrestricted Subsidiaries (determined for
each such other Subsidiary as at the date of designation of the new Unrestricted
Subsidiary and determined for all such Subsidiaries (including the new
Unrestricted Subsidiary) on a consolidated basis in accordance with GAAP) does
not exceed the greater of (a) twenty-five percent (25%) of Consolidated Debt
(determined as at the date of such designation) excluding the Restricted
Subsidiary to be so designated, or (b) $500,000,000. Each notice of designation
delivered pursuant to the preceding sentence shall be accompanied by the
following documents, each certified by a Responsible Officer of Borrower and
setting forth the relevant financial information as at a specified date not
earlier than ten (10) days before the effective date of such designation: (X) a
statement showing, in reasonable detail, the Tangible Net Worth, the total Debt,
and the total assets of each Restricted Subsidiary the subject of such notice of
designation; and (Y) a Compliance Certificate showing comparative figures for
Borrower and the Restricted Subsidiaries before and after giving effect to such
notice of designation and a statement demonstrating, in reasonable detail,
compliance with CLAUSE (II) of the first sentence of this SECTION 8.12(A). Any
attempted designation by Borrower of a Restricted Subsidiary as an Unrestricted
Subsidiary other than in compliance with the limitations contained in this
SECTION 8.12(a) shall be ineffective as fully as if such attempted designation
had never occurred.

         (b)      Borrower shall have the option of designating any newly formed
or acquired Subsidiary as an Unrestricted Subsidiary so long as such designation
complies with the requirements of the proviso in the first sentence of SECTION
8.12(a) and Administrative Agent receives a list of newly formed or acquired
Unrestricted Subsidiaries in connection with the delivery of each Compliance
Certificate delivered to Administrative Agent pursuant to SECTION 8.3, which
Compliance Certificate shall contain a statement that Borrower is in compliance
with CLAUSE (ii) of the first sentence of SECTION 8.12(a) (for such purpose the
reference to "Restricted Subsidiary" in CLAUSE (ii) of the first sentence of
SECTION 8.12(a) shall be deemed to read "newly formed or acquired Subsidiary").

         (c)      If, as of any date, the aggregate Recourse Debt of the
Unrestricted Subsidiaries (determined on a consolidated basis in accordance with
GAAP) exceeds the greater of (a) twenty-five percent (25%) of Consolidated Debt
as of such date or (b) $500,000,000, then Borrower shall designate an
Unrestricted Subsidiary or Subsidiaries to be a Restricted Subsidiary such that
the aggregate Recourse Debt of the remaining Unrestricted Subsidiaries does not
exceed the greater of (a) twenty-five percent (25%) of Consolidated Debt
(including the newly designated Restricted Subsidiary), or (b) $500,000,000.
Borrower shall notify Administrative Agent and Lenders of any such designation
not later than ten (10) days after the requirement to make such designation
arises pursuant to the preceding sentence, accompanied by the following
documents, each certified by a Responsible Officer of Borrower and setting forth
the relevant financial information as at a specified date not earlier than ten
(10) days before the effective date of such designation: (X) a statement
showing, in reasonable detail, the Tangible Net Worth, the total Debt, and the
total assets of the Subsidiary to be designated a Restricted Subsidiary, and (Y)
a Compliance Certificate showing comparative figures for Borrower and the
Restricted Subsidiaries before and after giving effect to such notice of
designation and a statement demonstrating, in reasonable detail, compliance with
this SECTION 8.12(c).

CREDIT AGREEMENT

                                       37


SECTION 9 NEGATIVE COVENANTS.

         Borrower covenants and agrees to perform, observe, and comply with each
of the following covenants, from the Closing Date and so long thereafter as
Lenders are committed to make any Credit Extensions under this Agreement and
thereafter until the payment in full of all Principal Debt and payment in full
of all other interest, fees, and other amounts of the Obligation then due and
owing, unless Borrower receives a prior written consent to the contrary by
Administrative Agent as authorized by Required Lenders (or all Lenders, in the
case of SECTION 9.6):

         9.1      EMPLOYEE BENEFIT PLANS. Borrower shall not, and shall not
permit any ERISA Affiliate to, directly or indirectly, engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Tax
Code), and the Companies and their respective ERISA Affiliates shall not,
directly or indirectly, (a) incur any "accumulated funding deficiency" as such
term is defined in Section 302 of ERISA with respect to any Employee Plan, (b)
permit any Employee Plan to be subject to involuntary termination proceedings
pursuant to Title IV of ERISA, or (c) fully or partially withdraw from any
Multiemployer Plan, if such prohibited transaction, accumulated funding
deficiency, termination proceeding, or withdrawal would result individually or
in the aggregate in liability on the part of Borrower in excess of $20,000,000.

         9.2      LIENS. Borrower shall not, and shall not permit any other
Restricted Company to, directly or indirectly, (a) create, incur, or suffer or
permit to be created or incurred or to exist any Lien upon any Stock of any
Restricted Subsidiary (other than Stock not owned by a Company), or (b) create,
incur, or suffer or permit to be created or incurred or to exist any Lien upon
any of its other assets, except in the case of CLAUSE (B):

                  (i)      pledges or deposits made to secure payment of
         worker's compensation, or to participate in any fund in connection with
         worker's compensation, unemployment insurance, pensions, or other
         social security programs;

                  (ii)     good-faith pledges or deposits made to secure
         performance of bids, tenders, insurance or other contracts (other than
         for the repayment of borrowed money), or leases, or to secure statutory
         obligations, surety or appeal bonds, or indemnity, performance, or
         other similar bonds as all such Liens arise in the ordinary course of
         business of the Restricted Companies;

                  (iii)    encumbrances consisting of zoning restrictions,
         easements, or other restrictions on the use of real property, none of
         which impair in any material respect the use of such property by the
         Person in question in the operation of its business, and none of which
         is violated by existing or proposed structures or land use;

                  (iv)     Liens of landlords or of mortgagees of landlords,
         arising solely by operation of law, on fixtures and movable property
         located on premises leased in the ordinary course of business;

                  (v)      the following, so long as the applicability, amount,
         or validity of which is being contested in good faith by appropriate
         proceedings diligently conducted, and against which reserves or other
         provisions required by GAAP have been made, levy and execution thereon
         have been stayed and continue to be stayed, and they do not in the
         aggregate materially detract from the value of the property of the
         Person in question, or materially impair the use thereof in the
         operation of its business: (A) claims and Liens for Taxes (other than
         Liens relating to

CREDIT AGREEMENT

                                       38


         Environmental Laws or ERISA); (B) claims and Liens upon, and defects of
         title to, real or personal property, including any attachment of
         personal or real property or other legal process prior to adjudication
         of a dispute of the merits; and (C) claims and Liens of mechanics,
         materialmen, warehousemen, carriers, landlords, or other like Liens;

                  (vi)     Liens in cash collateral securing letters of credit
         under that certain Letter of Credit and Reimbursement Agreement dated
         of even date herewith, by and among Borrower, Bank of America, N.A., as
         Administrative Agent, and the lenders party thereto;

                  (vii)    Liens in favor of Borrower;

                  (viii)   Liens in assets or properties acquired with purchase
         money Debt securing only such purchase money Debt;

                  (ix)     Liens on any property or asset of any corporation or
         other entity existing at the time such corporation or other entity
         becomes a Subsidiary or is merged or consolidated with or into any
         Restricted Company or at the time such property or asset is acquired
         from such corporation or other entity, other than any Lien placed on
         any property or asset of such corporation or other entity in
         contemplation of such acquisition, merger, or consolidation;

                  (x)      Liens securing non-recourse Debt incurred in
         connection with industrial revenue or similar financing;

                  (xi)     Liens for current taxes not yet due; and

                  (xii)    any renewals, extensions, or refinancings (but not
         increase in the principal amount thereof) of any of the foregoing
         Permitted Liens.

         9.3      SUBSIDIARY INDEBTEDNESS; LIMITATIONS ON UPSTREAMING. Borrower
shall not permit any Restricted Subsidiary to guaranty any Debt of Borrower
unless such Restricted Subsidiary also executes a pari passu guaranty of the
Obligation. Borrower shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly agree to any restriction or limitation on the making
of dividends or distributions, the repaying of loans or advances or the
transferring of assets from any Restricted Subsidiary to Borrower or any other
Restricted Subsidiary, except (a) restrictions and limitations imposed by Legal
Requirements, (b) customary restrictions and limitations contained in agreements
relating to the sale of a Subsidiary or its assets that is permitted hereunder
and (c) any other restrictions that could not reasonably be expected to cause a
Material Adverse Event.

         9.4      TRANSACTIONS WITH AFFILIATES. Borrower shall not, and shall
not permit any other Restricted Company to, enter into any transaction with any
of its Affiliates, other than transactions upon fair and reasonable terms not
materially less favorable than such Restricted Company could obtain or could
become entitled to in an arm's-length transaction with a Person that was not its
Affiliate.

         9.5      COMPLIANCE WITH DOCUMENTS. Borrower shall not, and shall not
permit any other Company to, violate the provisions of its Constituent
Documents, or modify, repeal, replace, or amend any provision of its Constituent
Documents, if such action could materially and adversely affect the Rights of
any Credit Party under this Agreement or the other Loan Documents.

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                                       39


         9.6      ASSIGNMENT. Borrower shall not assign or transfer any of its
Rights, duties, or obligations under any of the Loan Documents.

         9.7      FISCAL YEAR AND ACCOUNTING METHODS. Borrower shall not, and
shall not permit any other Restricted Company to, change its method of
accounting, other than immaterial changes in methods or as required by GAAP.
Borrower shall not, and shall not permit any other Restricted Company to, change
its fiscal year for book accounting purposes, except upon the delivery of
written notice to Administrative Agent.

         9.8      GOVERNMENT REGULATIONS. Borrower shall not, and shall not
permit any other Restricted Company to, conduct its business in such a way that
it will become subject to regulation under the Investment Company Act of 1940,
as amended, the Public Utility Holding Company Act of 1935, as amended, or any
other Legal Requirement (other than Regulations T, U, and X of the Board of
Governors of the Federal Reserve System) which regulates the incurrence of Debt.

         9.9      SALE OF ASSETS. Borrower shall not, and shall not permit any
other Restricted Company to, sell, assign, transfer, or otherwise dispose of all
or substantially all of its assets, other than (a) sales, assignments,
transfers, or other dispositions of assets by a Restricted Subsidiary to
Borrower or to another Restricted Subsidiary and (b) sales, assignments,
transfers, or other dispositions of assets (to Persons other than Borrower or a
Restricted Subsidiary) of Restricted Subsidiaries (i) having an aggregate fair
market value not to exceed $100,000,000 in any fiscal year, or (ii) in the
ordinary course of business.

         9.10     MERGERS AND DISSOLUTIONS; SALE OF CAPITAL STOCK. Borrower
shall not, and shall not permit any other Restricted Company to, directly or
indirectly, merge or consolidate with any other Person, other than (a) mergers
or consolidations involving Borrower if Borrower is the surviving entity, and
(b) mergers or consolidations among Wholly-owned Companies, in each case so long
as no Potential Default or Event of Default exists or would result therefrom;
provided that in any merger involving any Restricted Company, a Restricted
Company must be the surviving entity. Borrower shall not, and shall not permit
any other Restricted Company to, liquidate, wind up, or dissolve (or suffer any
liquidation or dissolution), other than liquidations, wind ups, or dissolutions
incident to mergers or consolidations permitted under this SECTION 9.10.
Borrower shall not, and shall not permit any other Company to, sell, assign,
lease, transfer, or otherwise dispose of the Stock of any other Restricted
Company, other than sales, assignments, leases, transfers, or other such
dispositions to another Company. Notwithstanding the foregoing, nothing in this
Agreement shall prohibit any mergers, consolidations, liquidations, wind ups, or
dissolutions of any Subsidiary or the sale, assignment, lease, transfer, or
other disposal of the Stock of any Subsidiary so long as (i) no Potential
Default or Event of Default exists or would result from such merger,
consolidation, liquidation, wind up, or dissolution or such sale, assignment,
lease, transfer, or other disposal of such Stock, (ii) after giving effect
thereto, the character of the business of the Restricted Companies, on a
consolidated basis, will not be materially changed, and (iii) the assets, annual
revenues, and annual net income, in each case determined in accordance with
GAAP, of the affected Subsidiary does not exceed $100,000,000.

         9.11     NEW BUSINESS. Borrower shall not, and shall not permit any
other Restricted Company to, directly or indirectly, permit or suffer to exist
any material change (on a consolidated basis) in the type of businesses in which
it is engaged from the businesses (on a consolidated basis) of the Companies as
conducted on the Closing Date.

         9.12     FINANCIAL COVENANTS.

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                                       40


         (a)      LEVERAGE RATIO. Borrower shall not permit the Leverage Ratio
(expressed as a percent), as of the last day of any fiscal quarter of Borrower,
to be greater than fifty-five percent (55%).

         (b)      INTEREST COVERAGE. Borrower shall not permit the Interest
Coverage Ratio, as of the last day of any fiscal quarter of Borrower, to be less
than 2.0 to 1.0.

         (c)      MINIMUM TANGIBLE NET WORTH. Borrower shall not permit
Consolidated Tangible Net Worth, as of any date, to be less than the sum of (a)
$1,700,000,000, plus (b) fifty percent (50%) of the amount of Net Proceeds from
any Equity Issuance subsequent to March 31, 2003, plus (c) fifty percent (50%)
of Cumulative Consolidated Net Income.

SECTION 10 DEFAULT.

         The term "EVENT OF DEFAULT" means the occurrence of any one or more of
the following events:

         10.1     PAYMENT OF OBLIGATION. The failure or refusal of Borrower to
pay (a) all or any part of the Principal Debt when the same becomes due (whether
by its terms, by acceleration, or as otherwise provided in the Loan Documents),
or (b) any other part of the Obligation within five (5) calendar days after the
due date, or (c) the indemnification and reimbursement obligations provided for
in the Loan Documents after demand therefor.

         10.2     COVENANTS. The failure or refusal of Borrower (and, if
applicable, any other Company) to punctually and properly perform, observe, and
comply with:

         (a)      any covenant, agreement, or condition contained in SECTION 8.3
(other than SECTIONS 8.3(e), 8.3(f), and 8.3(g)); or

         (b)      any covenant, agreement, or condition contained in SECTIONS
8.3(e), 8.3(f), 8.3(g), 8.12, or 9, and such failure or refusal continues
unremedied for ten (10) days after the earlier of (i) notice given by
Administrative Agent to Borrower of such failure or refusal, or (ii) Borrower's
actual knowledge of such failure or refusal; or

         (c)      any other covenant, agreement, or condition contained in any
Loan Document (other than the covenants to pay the Obligation and the covenants
in CLAUSE (A) or (B) preceding) and such failure or refusal continues unremedied
for thirty (30) days after the earlier of (i) notice given by Administrative
Agent to Borrower of such failure or refusal, or (ii) Borrower's actual
knowledge of such failure or refusal.

         10.3     DEBTOR RELIEF. Any Restricted Company (a) shall not be
Solvent, (b) fails to pay its Debts generally as they become due, (c) makes an
assignment for the benefit of creditors, (d) voluntarily seeks, consents to, or
acquiesces in the benefit of any Debtor Relief Law, other than as a creditor or
claimant, or (e) becomes a party to or is made the subject of any proceeding
provided for by any Debtor Relief Law, other than as a creditor or claimant,
that could suspend or otherwise adversely affect the Rights of any Credit Party
granted in the Loan Documents (unless, in the event such proceeding is
involuntary, the petition instituting same is dismissed within sixty (60) days
after its filing without the entry of an order for relief or the appointment of
a receiver) or an order of relief or judgment is entered in, or a receiver or
similar officer is appointed pursuant to, any such proceeding.

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                                       41


         10.4     JUDGMENTS AND ATTACHMENTS. Any Restricted Company fails,
within sixty (60) days after entry, to pay, bond, or otherwise discharge any
judgment or order for the payment of money in excess of $20,000,000
(individually or collectively) or any warrant of attachment, sequestration, or
similar proceeding against any Restricted Company's assets having a value
(individually or collectively) of $20,000,000, in each case, which is not stayed
on appeal.

         10.5     GOVERNMENT ACTION.

         (a)      A final non-appealable order is issued by any Governmental
Authority, including, but not limited to, the United States Justice Department,
seeking to cause any Restricted Company to divest a significant portion of its
assets pursuant to any antitrust, restraint of trade, unfair competition,
industry regulation, or similar Legal Requirements; or

         (b)      Any Governmental Authority shall condemn, seize, or otherwise
appropriate, or take custody or control of, all or any substantial portion of
the assets of any Restricted Company.

         10.6     MISREPRESENTATION. Any representation or warranty made by
Borrower contained in any Loan Document shall at any time prove to have been
incorrect in any material respect when made.

         10.7     CHANGE OF CONTROL. A Change in Control of Borrower shall
occur.

         10.8     DEFAULT UNDER OTHER DEBT AND AGREEMENTS.

         (a)      Any Restricted Company fails to make any payments when due
(after lapse of any applicable grace periods) with respect to any Debt of such
Restricted Company (other than the Obligation) in excess (individually or
collectively) of $20,000,000; and

         (b)      Any default exists under any agreement (other than the Loan
Documents) to which any Restricted Company is a party, which has not been waived
by the parties thereto, the effect of which has been to cause, or to permit any
Person to cause, an amount of Debt of such Restricted Company in excess
(individually or collectively) of $20,000,000 to become due and payable by such
Restricted Company (whether by acceleration or by its terms).

         10.9     EMPLOYEE BENEFIT PLANS.

         (a)      A "Reportable Event" or "Reportable Events," or a failure to
make a required installment or other payment (within the meaning of Section
412(n)(1) of the Tax Code), shall have occurred with respect to any Employee
Plan or Plans that is reasonably expected to result in liability of Borrower to
the PBGC or to an Employee Plan in an aggregate amount exceeding $20,000,000; or

         (b)      Borrower or any ERISA Affiliate has provided to any affected
party a sixty (60) day notice of intent to terminate an Employee Plan pursuant
to a distress termination in accordance with Section 4041(c) of ERISA if the
liability reasonably expected to be incurred as a result of such termination
will exceed $20,000,000; or

         (c)      A trustee shall be appointed by a United States district court
to administer any such Employee Plan pursuant to SECTION 4042(b) of ERISA; or

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                                       42


         (d)      The PBGC shall institute proceedings (including giving notice
of intent thereof) to terminate any such Employee Plan if such termination
proceeding is reasonably expected to result in liability on the part of Borrower
in excess of $20,000,000; or

         (e)      (i) Borrower or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred withdrawal liability
(within the meaning of Section 4201 of ERISA) to such Multiemployer Plan, (ii)
Borrower or such ERISA Affiliate does not have reasonable grounds for contesting
such withdrawal liability or is not contesting such withdrawal liability in a
timely and appropriate manner and (iii) the amount of such withdrawal liability
specified in such notice, when aggregated with all other amounts required to be
paid to Multiemployer Plans in connection with withdrawal liabilities
(determined as of the date or dates of such notification), exceeds $20,000,000;
or

         (f)      Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
if solely as a result of such reorganization or termination the aggregate annual
contributions of Borrower and its ERISA Affiliates to all Multiemployer Plans
that are then in reorganization or have been or are being terminated have been
or will be increased over the amounts required to be contributed to such
Multiemployer Plans for their most recently completed plan years by an amount
exceeding $20,000,000.

         10.10    VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS. Any Loan
Document shall, at any time after its execution and delivery and for any reason,
cease to be in full force and effect in any material respect or be declared to
be null and void (other than in accordance with the terms hereof or thereof) or
the validity or enforceability thereof be contested by Borrower or Borrower
shall deny in writing that it has any or any further liability or obligations
under any Loan Document to which it is a party.

SECTION 11 RIGHTS AND REMEDIES.

         11.1     REMEDIES UPON DEFAULT.

         (a)      If an Event of Default exists under SECTION 10.3(c), 10.3(d),
or 10.3(e), then the commitment to extend credit hereunder shall automatically
terminate and the entire unpaid balance of the Obligation shall automatically
become due and payable without any action or notice of any kind whatsoever.

         (b)      If any Event of Default exists, then Administrative Agent may
(and, subject to the terms of SECTION 12, shall upon the request of Required
Lenders) or Required Lenders may, do any one or more of the following: (i) if
the maturity of the Obligation has not already been accelerated under SECTION
11.1(a), then declare the entire unpaid balance of the Obligation, or any part
thereof, immediately due and payable, whereupon it shall be due and payable;
(ii) terminate the commitments of Lenders to extend credit hereunder; (iii)
reduce any claim to judgment; (iv) to the extent permitted by all Legal
Requirements, exercise (or request each Lender to, and each Lender shall be
entitled to, exercise) the Rights of offset or banker's Lien against the
interest of any Company in and to every account and other property of any
Company which are in the possession of any Credit Party to the extent of the
full amount of the Obligation (to the extent permitted by all Legal
Requirements, Borrower being deemed directly obligated to each Credit Party in
the full amount of the Obligation for such purposes); and (v) exercise any and
all other legal or equitable Rights afforded by the Loan Documents, the Legal
Requirements of the State of Texas, or any other applicable jurisdiction as
Administrative Agent shall deem appropriate, or otherwise, including, but not
limited to, the Right to bring suit or other proceedings before any

CREDIT AGREEMENT

                                       43


Governmental Authority either for specific performance of any covenant or
condition contained in any of the Loan Documents or in aid of the exercise of
any Right granted to any Credit Party in any of the Loan Documents; provided
that each Lender reserves the Right to bring suit to recover Obligations owing
to such Lender after such Obligations become due and payable in the event
Administrative Agent or Required Lenders do not do so on its behalf.

         11.2     BORROWER WAIVERS. To the extent permitted by all Legal
Requirements, Borrower hereby waives presentment and demand for payment,
protest, notice of intention to accelerate, notice of acceleration, and notice
of protest and nonpayment, and agrees that its liability with respect to the
Obligation (or any part thereof) shall not be affected by any renewal or
extension in the time of payment of the Obligation (or any part thereof), by any
indulgence, or by any release or change in any security for the payment of the
Obligation (or any part thereof).

         11.3     PERFORMANCE BY ADMINISTRATIVE AGENT. If any covenant, duty, or
agreement of Borrower is not performed in accordance with the terms of the Loan
Documents, while an Event of Default exists, then Administrative Agent may, at
its option (but subject to the approval of Required Lenders), perform or attempt
to perform such covenant, duty, or agreement on behalf of Borrower. In such
event, any amount expended by Administrative Agent in such performance or
attempted performance shall be payable by Borrower to Administrative Agent on
demand, shall become part of the Obligation, and shall bear interest at the
Default Rate from the date of such expenditure by Administrative Agent until
paid. Notwithstanding the foregoing, it is expressly understood that
Administrative Agent does not assume, and shall never have, except by its
express written consent, any liability or responsibility for the performance of
any covenant, duty, or agreement of Borrower.

         11.4     DELEGATION OF DUTIES AND RIGHTS. The Credit Parties may
perform any of their duties or exercise any of their Rights under the Loan
Documents by or through their respective Representatives.

         11.5     NOT IN CONTROL. Nothing in any Loan Document shall, or shall
be deemed to (a) give any Credit Party the Right to exercise control over the
assets (including real property), affairs, or management of any Company, (b)
preclude or interfere with compliance by any Company with any Legal Requirement,
or (c) require any act or omission by any Company that may be harmful to Persons
or property. Any "Material Adverse Event" or other materiality qualifier in any
representation, warranty, covenant, or other provision of any Loan Document is
included for credit documentation purposes only and shall not, and shall not be
deemed to, mean that any Credit Party acquiesces in any non-compliance by any
Company with any Legal Requirement or document, or that any Credit Party does
not expect any Company to promptly, diligently, and continuously carry out all
appropriate removal, remediation, and termination activities required or
appropriate in accordance with all Environmental Laws. The Credit Parties have
no fiduciary relationship with or fiduciary duty to any Company arising out of
or in connection with the Loan Documents, and the relationship between the
Credit Parties, on the one hand, and the Companies, on the other hand, in
connection with the Loan Documents is solely that of debtor and creditor. The
power of the Credit Parties under the Loan Documents is limited to the Rights
provided in the Loan Documents, which Rights exist solely to assure payment and
performance of the Obligation and may be exercised in a manner calculated by the
Credit Parties in their respective good faith business judgment.

         11.6     COURSE OF DEALING. The acceptance by any Credit Party at any
time and from time to time of partial payment on the Obligation shall not be
deemed to be a waiver of any Event of Default then existing. No waiver by any
Credit Party of any Event of Default shall be deemed to be a waiver of any other
then-existing or subsequent Event of Default. No delay or omission by any Credit
Party in

CREDIT AGREEMENT

                                       44


exercising any Right under the Loan Documents shall impair such Right or be
construed as a waiver thereof or any acquiescence therein, nor shall any single
or partial exercise of any such Right preclude other or further exercise
thereof, or the exercise of any other Right under the Loan Documents or
otherwise.

         11.7     CUMULATIVE RIGHTS. All Rights available to the Credit Parties
under the Loan Documents are cumulative of and in addition to all other Rights
granted to the Credit Parties at law or in equity, whether or not the Obligation
is due and payable and whether or not the Credit Parties have instituted any
suit for collection, foreclosure, or other action in connection with the Loan
Documents.

         11.8     APPLICATION OF PROCEEDS. Any and all proceeds ever received by
any Credit Party from the exercise of any Rights pertaining to the Obligation
shall be applied to the Obligation in the order and manner set forth in SECTION
3.11.

         11.9     CERTAIN PROCEEDINGS. Borrower will promptly execute and
deliver, or cause the execution and delivery of, all applications, certificates,
instruments, registration statements, and all other documents and papers any
Credit Party may reasonably request in connection with the obtaining of any
consent, approval, registration, qualification, permit, license, or
Authorization of any Governmental Authority or other Person necessary or
appropriate for the effective exercise of any Rights under the Loan Documents.
Because Borrower agrees that the Credit Parties' remedies at law for failure of
Borrower to comply with the provisions of this SECTION 11.9 would be inadequate
and that such failure would not be adequately compensable in damages, Borrower
agrees that the covenants of this SECTION 11.9 may be specifically enforced.

         11.10    EXPENSES; INDEMNIFICATION.

         (a)      Borrower agrees (i) to pay or reimburse Administrative Agent
for all reasonable out-of-pocket costs and expenses incurred in connection with
the development, preparation, negotiation, and execution of this Agreement and
the other Loan Documents and any amendment, waiver, consent, or other
modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (ii) to pay or reimburse
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or the other Loan Documents (including
all such costs and expenses incurred during any "workout" or restructuring in
respect of the Obligation and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs. The
foregoing costs and expenses shall include all search, filing, recording, title
insurance, and appraisal charges and fees and taxes related thereto, and other
out-of-pocket expenses incurred by Administrative Agent and the cost of
independent public accountants and other outside experts retained by the
Administrative Agent or any Lender. All amounts due under this SECTION 11.10(a)
shall be payable within ten (10) Business Days after demand therefor. The
agreements in this SECTION 11.10(a) shall survive the termination of the
Commitments and repayment of the Obligation.

         (b)      Whether or not the transactions contemplated hereby are
consummated, Borrower shall indemnify and hold harmless each Agent-Related
Person, each Lender and their respective Affiliates, directors, officers,
employees, counsel, agents, and attorneys-in-fact (collectively, "INDEMNITEES")
from and against any and all liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses, and
disbursements (including Attorney Costs) of any kind or nature

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                                       45


whatsoever which may at any time be imposed on, incurred by or asserted against
any such Indemnitee in any way relating to or arising out of or in connection
with (i) the execution, delivery, enforcement, performance or administration of
any Loan Document or any other agreement, letter or instrument delivered in
connection with the transactions contemplated thereby or the consummation of the
transactions contemplated thereby, (ii) any Commitment, Borrowing, or the use or
proposed use of the proceeds therefrom, or (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property currently or formerly
owned or operated by Borrower or any Subsidiary, or any liability under
Environmental Law related in any way to Borrower or any Subsidiary, or (iv) any
actual or prospective claim, litigation, investigation, or proceeding relating
to any of the foregoing, whether based on contract, tort, or any other theory
(including any investigation of, preparation for, or defense of any pending or
threatened claim, investigation, litigation, or proceeding) and regardless of
whether any Indemnitee is a party thereto (all the foregoing, collectively, the
"INDEMNIFIED LIABILITIES"), IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING,
IN WHOLE OR IN PART, OUT OF THE NEGLIGENCE OF THE INDEMNITEE; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses, or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence, bad faith, or willful misconduct of such Indemnitee. No
Indemnitee shall be liable for any damages arising from the use by others of any
information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Agreement, nor shall
Borrower or any Indemnitee have any liability for any indirect, punitive, or
consequential damages relating to this Agreement or any other Loan Document or
arising out of its activities in connection herewith or therewith (whether
before or after the Closing Date). All amounts due under this SECTION 11.10(b)
shall be payable within ten (10) Business Days after demand therefor. The
agreements in this SECTION 11.10(B) shall survive the resignation of
Administrative Agent, the replacement of any Lender, the termination of the
Commitments, and the repayment, satisfaction or discharge of the Obligation.

SECTION 12 ADMINISTRATIVE AGENT.

         12.1     APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT. Each
Lender hereby irrevocably appoints, designates, and authorizes Administrative
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere herein or in
any other Loan Document, Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall
Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Administrative
Agent. Without limiting the generality of the foregoing sentence, the use of the
term "agent" herein and in the other Loan Documents with reference to
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable Law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.

         12.2     DELEGATION OF DUTIES. Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees, or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such

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                                       46


duties. Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.

         12.3     LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person
shall (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct in connection with its duties expressly set forth herein), or (b) be
responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by any Company or any officer
thereof, contained herein or in any other Loan Document, or in any certificate,
report, statement, or other document referred to or provided for in, or received
by Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability, or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Company or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books, or
records of any Company or any Affiliate thereof.

         12.4     RELIANCE BY ADMINISTRATIVE AGENT.

         (a)      Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement, or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to any
Company), independent accountants and other experts selected by Administrative
Agent. Administrative Agent shall be fully justified in failing or refusing to
take any action under any Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Lenders (or such greater number of Lenders as may be expressly
required hereby in any instance) and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders.

         (b)      For purposes of determining compliance with the conditions
specified in SECTION 6.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless Administrative Agent shall have
received notice from such Lender prior to the proposed Closing Date specifying
its objection thereto.

         12.5     NOTICE OF EVENT OF DEFAULT. Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Event of Default,
except with respect to defaults in the payment of principal, interest, and fees
required to be paid to Administrative Agent for the account of the Lenders,
unless Administrative Agent shall have received written notice from a Lender or
Borrower referring to this Agreement, describing such Event of Default and
stating that such notice is a "notice of default." Administrative Agent will
notify Lenders of its receipt of any such notice and of its giving of notice to
Borrower pursuant to SECTIONS 10.2(b) or (c). Administrative Agent shall take
such action with

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                                       47


respect to such Event of Default as may be directed by the Required Lenders in
accordance with SECTION 10; provided, however, that unless and until
Administrative Agent has received any such direction, Administrative Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Event of Default as it shall deem advisable or in
the best interest of the Lenders.

         12.6     CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT. Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Company or any Affiliate thereof, shall be deemed
to constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. Each Lender represents to
Administrative Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial, and other condition and
creditworthiness of the Companies, and all applicable bank or other regulatory
Legal Requirements relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to Borrower
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals, and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial, and other condition and creditworthiness of Borrower.
Except for notices, reports, and other documents expressly required to be
furnished to Lenders by Administrative Agent herein, Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial, and other condition or creditworthiness of any Companies or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.

         12.7     INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the
transactions contemplated hereby are consummated, Lenders shall indemnify upon
demand each Agent-Related Person (to the extent not reimbursed by or on behalf
of any Company and without limiting the obligation of any Company to do so), Pro
Rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided, however, that no Lender shall
be liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities to the extent determined in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person's own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the Required
Lenders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this SECTION 12.7. Without limitation of the foregoing, each Lender
shall reimburse Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment, or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that
Administrative Agent is not reimbursed for such expenses by or on behalf of
Borrower. The undertaking in this SECTION 12.7 shall survive termination of the
Aggregate Commitments, the payment of the Obligation and the resignation of
Administrative Agent.

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                                       48


         12.8     ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
Administrative Agent and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, and generally engage in any
kind of banking, trust, financial advisory, underwriting, or other business with
each Company and its respective Affiliates as though Administrative Agent were
not Administrative Agent and without notice to or consent of Lenders. Lenders
acknowledge that, pursuant to such activities, Administrative Agent or its
Affiliates may receive information regarding any Company or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Company or such Affiliate) and acknowledge that Administrative
Agent shall be under no obligation to provide such information to them. With
respect to Borrowings, Administrative Agent shall have the same rights and
powers under this Agreement as any other Lender and may exercise such rights and
powers as though it were not Administrative Agent, and the terms "Lender" and
"Lenders" include Administrative Agent in its individual capacity.

         12.9     SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may
resign as Administrative Agent upon thirty (30) days' notice to Lenders. If
Administrative Agent resigns under this Agreement, the Required Lenders shall
appoint from among Lenders a successor administrative agent for Lenders, which
successor administrative agent shall be consented to by Borrower at all times
other than during the existence of an Event of Default (which consent of
Borrower shall not be unreasonably withheld or delayed). If no successor
administrative agent is appointed prior to the effective date of the resignation
of Administrative Agent, Administrative Agent may appoint, after consulting with
Lenders and with the consent of Borrower at all times other than during the
existence of an Event of Default (which consent of Borrower shall not be
unreasonably withheld or delayed), a successor administrative agent from among
Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, the Person acting as such successor administrative agent shall
succeed to all the rights, powers, and duties of the retiring Administrative
Agent, and the term "Administrative Agent" shall mean such successor
administrative agent, and the retiring Administrative Agent's appointment,
powers, and duties as Administrative Agent shall be terminated without any other
or further act or deed on the part of such retiring Administrative Agent or any
other Lender. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this SECTION 12 and SECTION 11.10 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement. If no successor administrative
agent has accepted appointment as Administrative Agent by the date which is
thirty (30) days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above.

         12.10    ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIMS. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition, or other judicial
proceeding relative to any Company, Administrative Agent (irrespective of
whether the principal of any Borrowing shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether
Administrative Agent shall have made any demand on Borrower) shall be entitled
and empowered, by intervention in such proceeding or otherwise:

         (a)      to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Borrowings and any
other Obligation that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of Lenders and
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements, and advances of Lenders and Administrative Agent and
their respective agents and counsel and all other

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                                       49


amounts due Lenders and Administrative Agent under SECTIONS 5 and 11.10) allowed
in such judicial proceeding; and

         (b)      to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
the Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Administrative Agent and
its agents and counsel, and any other amounts due Administrative Agent under
SECTIONS 5 and 11.10.

Nothing contained herein shall be deemed to authorize Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment, or composition affecting the Obligation
or the rights of any Lender or to authorize Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding.

         12.11    OTHER AGENT; ARRANGERS; AND MANAGERS. No Lender or other
Persons identified on the facing page or signature pages of this Agreement as a
"syndication agent," "documentation agent," "book manager," "arranger," or "lead
arranger" shall have any right, power, obligation, liability, responsibility, or
duty under this Agreement other than, in the case of such Lenders, those
applicable to all Lenders as such. Without limiting the foregoing, no Lender or
other Person so identified shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on any Lenders or other Persons so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.

SECTION 13 MISCELLANEOUS.

         13.1     HEADINGS. The headings, captions, and arrangements used in any
of the Loan Documents are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify, or modify the terms of the Loan
Documents, nor affect the meaning thereof.

         13.2     NONBUSINESS DAYS. In any case where any payment or action is
due under any Loan Document on a day which is not a Business Day, such payment
or action may be delayed until the next-succeeding Business Day, but interest
and fees shall continue to accrue in respect of any payment to which it is
applicable until such payment is in fact made; provided that if, in the case of
any such payment in respect of a Eurodollar Borrowing, the next-succeeding
Business Day is in the next calendar month, then such payment shall be made on
the next-preceding Business Day.

         13.3     COMMUNICATIONS.

         (a)      GENERAL. Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission). All such written notices shall be mailed,
faxed, or delivered to the applicable address, facsimile number, or (subject to
SECTION 13.3(C) below) electronic mail address, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number specified for such Person on SCHEDULE
2.1 or to such other address, facsimile number, electronic mail

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                                       50


address, or telephone number as shall be designated by such party in a notice to
the other parties. All such notices and other communications shall be deemed to
be given or made upon the earlier to occur of (i) actual receipt by the relevant
party hereto and (ii) (A) if delivered by hand or by courier, when signed for by
or on behalf of the relevant party hereto; (B) if delivered by mail, four (4)
Business Days after deposit in the mails, postage prepaid; (C) if delivered by
facsimile, when sent and receipt has been confirmed by telephone; and (D) if
delivered by electronic mail (which form of delivery is subject to the
provisions of SECTION 13.3(C) below), when delivered; provided, however, that
notices and other communications to Administrative Agent pursuant to SECTION 2
shall not be effective until actually received by Administrative Agent. In no
event shall a voicemail message be effective as a notice, communication or
confirmation hereunder.

         (b)      EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Companies, Administrative Agent, and Lenders. Administrative Agent may also
require that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile document or signature.

         (c)      LIMITED USE OF ELECTRONIC MAIL. Electronic mail and Internet
and intranet websites may be used only to distribute routine communications and
to distribute Loan Documents for execution by the parties thereto, and may not
be used for any other purpose.

         (d)      RELIANCE BY ADMINISTRATIVE AGENT AND LENDERS. Administrative
Agent and Lenders shall be entitled to rely and act upon any notices (including
telephonic Notices of Borrowing) purportedly given by or on behalf of Borrower
even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. Borrower shall indemnify each
Agent-Related Person and each Lender from all losses, costs, expenses, and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of Borrower. All telephonic notices to and
other communications with Administrative Agent may be recorded by Administrative
Agent, and each of the parties hereto hereby consents to such recording.

         13.4     FORM AND NUMBER OF DOCUMENTS. Each agreement, document,
instrument, or other writing to be furnished under any provision of this
Agreement must be in form and substance and in such number of counterparts as
may be reasonably satisfactory to Administrative Agent and its counsel.

         13.5     EXCEPTIONS TO COVENANTS. Borrower shall not, and shall not
permit any other Company to, take any action or fail to take any action which is
permitted as an exception to any of the covenants contained in any Loan Document
if such action or omission would result in the breach of any other covenant
contained in any of the Loan Documents.

         13.6     SURVIVAL. All covenants, agreements, undertakings,
representations, and warranties made in any of the Loan Documents shall survive
the execution and delivery thereof and all closings under the Loan Documents.
All such representations and warranties have been or will be relied upon by
Administrative Agent and each Lender regardless of any investigation made by
Administrative Agent or any Lender or on their behalf and notwithstanding that
Administrative Agent or any Lender may have had notice or knowledge of any
Potential Default or Event of Default at the time of any Borrowing and shall
continue in full force and effect as long as any Borrowing or other Obligation
is outstanding. All rights

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                                       51


of, and provisions relating to, reimbursement and indemnification of any Credit
Party shall survive termination of this Agreement and payment in full of the
Obligation.

         13.7     GOVERNING LAW. THE LEGAL REQUIREMENTS OF THE STATE OF TEXAS
AND OF THE UNITED STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF THE
PARTIES TO THE LOAN DOCUMENTS AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND
INTERPRETATION OF THE LOAN DOCUMENTS.

         13.8     INVALID PROVISIONS. If any provision in any Loan Document is
held to be illegal, invalid, or unenforceable, then such provision shall be
fully severable; the appropriate Loan Document shall be construed and enforced
as if such provision had never comprised a part thereof; and the remaining
provisions thereof shall remain in full force and effect and shall not be
affected by such provision or by its severance therefrom. Each Credit Party and
each Company party to such Loan Document agree to negotiate, in good faith, the
terms of a replacement provision as similar to the severed provision as may be
possible and be legal, valid, and enforceable.

         13.9     ENTIRETY. THE RIGHTS AND OBLIGATIONS OF BORROWER AND THE
CREDIT PARTIES SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS,
AND INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN SUCH PARTIES ARE
SUPERSEDED BY AND MERGED INTO SUCH WRITINGS. THIS AGREEMENT (AS AMENDED IN
WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY
BORROWER AND/OR ANY CREDIT PARTY (TOGETHER WITH ALL COMMITMENT LETTERS AND FEE
LETTERS AS THEY RELATED TO THE PAYMENT OF FEES AFTER THE CLOSING DATE)REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         13.10    JURISDICTION; VENUE; SERVICE OF PROCESS; JURY TRIAL. EACH
PARTY HERETO, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, HEREBY (A)
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED
IN TEXAS, AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN
ANY LEGAL PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND
THE OBLIGATION BY SERVICE OF PROCESS AS PROVIDED BY TEXAS LEGAL REQUIREMENTS,
(B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY ALL LEGAL
REQUIREMENTS, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY LITIGATION ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS
AND THE OBLIGATION BROUGHT IN ANY SUCH COURT, (C) IRREVOCABLY WAIVES ANY CLAIMS
THAT ANY LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM, (D) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF
ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH LITIGATION BY THE MAILING OF COPIES
THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, AT ITS
ADDRESS SET FORTH HEREIN, (E) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING
AGAINST ANY PARTY HERETO ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS
OR THE OBLIGATION SHALL BE BY COURT TRIAL WITHOUT JURY, AND (F) IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY ALL LEGAL REQUIREMENTS, ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT, THE TRANSACTIONS
CONTEMPLATED THEREBY, OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN

CREDIT AGREEMENT

                                       52


DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREINAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE;
AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR COPY OF
THIS SECTION 13.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. The scope of
each of the foregoing waivers is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter of
this transaction, including contract claims, tort claims, breach of duty claims,
and all other common law and statutory claims. Borrower and each other party to
this Agreement acknowledge that this waiver is a material inducement to the
agreement of each party hereto to enter into a business relationship, that each
has already relied on this waiver in entering into this Agreement, and each will
continue to rely on each of such waivers in related future dealings. Borrower
and each other party to this Agreement warrant and represent that they have
reviewed these waivers with their legal counsel, and that they knowingly and
voluntarily agree to each such waiver following consultation with legal counsel.
THE WAIVERS IN THIS SECTION 13.10 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THESE WAIVERS SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, SUPPLEMENTS, AND REPLACEMENTS TO OR OF THIS OR ANY OTHER
Loan Document. In the event of Litigation, this Agreement may be filed as a
written consent to a trial by the court.

         13.11    AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS.

         (a)      Except as otherwise specifically provided, (i) this Agreement
may only be amended, modified or waived by an instrument in writing executed
jointly by Borrower and Required Lenders, and, in the case of any matter
affecting Administrative Agent by Administrative Agent, and may only be
supplemented by documents delivered or to be delivered in accordance with the
express terms hereof, and (ii) the other Loan Documents may only be the subject
of an amendment, modification, or waiver if Borrower and Required Lenders, and,
in the case of any matter affecting Administrative Agent (except as set forth
above), Administrative Agent, have approved same; provided that no such
amendment or waiver shall, unless signed by each Lender directly affected
thereby, (i) increase the Commitment of such Lender, (ii) reduce the principal
of or rate of interest on any Borrowing or any fees or other amounts payable
hereunder, (iii) postpone any date fixed for the payment of any scheduled
installment of principal of or interest on any Borrowing or any fees or other
amounts payable hereunder or for termination of any of the Total Commitment,
(iv) change the percentage of the Total Commitment or of the unpaid principal
amount of the Notes, or the number of Lenders, which shall be required for
Lenders or any of them to take any action under this SECTION 13.11(a) or any
other provision of this Agreement, or (v) amend, modify or waive this SECTION
13.11(a) or the Pro Rata or ratable treatment of Lenders under this Agreement.

         (b)      Any conflict or ambiguity between the terms and provisions
herein and terms and provisions in any other Loan Document shall be controlled
by the terms and provisions herein.

         (c)      No course of dealing nor any failure or delay by any Credit
Party or any of its Representatives with respect to exercising any Right of any
Credit Party hereunder shall operate as a waiver thereof. A waiver must be in
writing and signed by Administrative Agent and Required Lenders (or by all
Lenders, if required hereunder) to be effective, and such waiver will be
effective only in the specific instance and for the specific purpose for which
it is given.

         13.12    MULTIPLE COUNTERPARTS. This Agreement may be executed in a
number of identical counterparts, each of which shall be deemed an original for
all purposes and all of which constitute,

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                                       53


collectively, one agreement; but, in making proof of this Agreement, it shall
not be necessary to produce or account for more than one such counterpart. It is
not necessary that each Lender execute the same counterpart so long as identical
counterparts are executed by Borrower, each Lender, and Administrative Agent.
This Agreement shall become effective when counterparts hereof shall have been
executed and delivered to Administrative Agent by each Lender, Administrative
Agent, and Borrower, or, when Administrative Agent shall have received
telecopied, telexed, or other evidence satisfactory to it that such party has
executed and is delivering to Administrative Agent a counterpart hereof.

         13.13    SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS.

         (a)      The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender 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 SECTION 13.13(B), (ii) by way of participation in
accordance with the provisions of SECTION 13.13(d), or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of SECTION
13.13(f). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
SECTION 13.13(d) and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

         (b)      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 outstanding Borrowings at the
time owing to it); provided that: (i) except in the case of an assignment of the
entire remaining amount of the assigning Lender's Commitment and outstanding
Borrowings at the time owing to it or in the case of an assignment to a Lender
or an Affiliate of a Lender or an Approved Fund (as defined in SECTION 13.13(g))
with respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Borrowings outstanding thereunder) subject to each such
assignment, determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to Administrative Agent or, if "Trade Date" is
specified in the Assignment and Assumption, as of the Trade Date, shall not be
less than $5,000,000 or a whole multiple of $500,000 in excess thereof, and
after such assignment, no Lender shall hold a Commitment of less than $5,000,000
unless each of Administrative Agent and, so long as no Event of Default has
occurred and is continuing, Borrower otherwise consents (each such consent not
to be unreasonably withheld or delayed); (ii) 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 Borrowings or
the Commitment assigned; (iii) any assignment of a Commitment must be approved
by Administrative Agent (which approval shall not be unreasonably withheld)
unless the Person that is the proposed assignee is itself a Lender (whether or
not the proposed assignee would otherwise qualify as an Eligible Assignee); and
(iv) the parties to each assignment shall execute and deliver to Administrative
Agent an Assignment and Assumption, together with a processing and recordation
fee of $3,500. Subject to acceptance and recording thereof by Administrative
Agent pursuant to SECTION 13.13(c), from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, 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 and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption 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 to the benefits of

CREDIT AGREEMENT

                                       54


SECTIONS 4.1, 4.5, and 4.6 (with respect to facts and circumstances occurring
prior to the effective date of such assignment) and 11.10). Upon request,
Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this subsection 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 SECTION 13.13(d).

         (c)      Administrative Agent, acting solely for this purpose as an
agent of Borrower, shall maintain at Administrative Agent's office a copy of
each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of Lenders, and the Commitments of, and
principal amounts of the Borrowings owing to, each Lender pursuant to the terms
hereof from time to time (the "REGISTER"). The entries in the Register shall be
conclusive in the absence of manifest error, and Borrower, Administrative Agent,
and Lenders may treat each 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 the contrary. The Register shall be
available for inspection by Borrower and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.

         (d)      Any Lender may at any time, without the consent of, or notice
to, Borrower or Administrative Agent, sell participations to any Person (other
than a natural person or Borrower or any of Borrower's Affiliates or
Subsidiaries) (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
its Commitment and/or Borrowings 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, and (iii) Borrower, Administrative Agent, and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification, or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in the first proviso to
SECTION 13.11(a) that directly affects such Participant. Subject to SECTION
13.13(e), Borrower agrees that each Participant shall be entitled to the
benefits of SECTIONS 4.1, 4.5, and 4.6 to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to SECTION 13.13(b).

         (e)      A Participant shall not be entitled to receive any greater
payment under SECTIONS 4.1 or 4.5 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 Borrower's
prior written consent. A Participant that would be a Lender that is not a
"United States person" within the meaning of Section 7701(a)(30) of the Tax
Code, if it were a Lender shall not be entitled to the benefits of SECTION 4.6
unless Borrower is notified of the participation sold to such Participant and
such Participant agrees, for the benefit of Borrower, to comply with SECTION 4.6
as though it were a Lender.

         (f)      Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

         (g)      As used herein, the following terms have the following
meanings:

CREDIT AGREEMENT

                                       55


         APPROVED FUND means any Fund that is administered or managed by (a) a
         Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate
         of an entity that administers or manages a Lender.

         ELIGIBLE ASSIGNEE means: (a) a Lender; (b) an Affiliate of a Lender;
         (c) an Approved Fund; and (d) any other Person (other than a natural
         person) approved by (i) Administrative Agent, and (ii) unless an Event
         of Default has occurred and is continuing, Borrower (each such approval
         not to be unreasonably withheld or delayed); provided that
         notwithstanding the foregoing, "Eligible Assignee" shall not include
         Borrower or any of Borrower's Affiliates or Subsidiaries.

         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 and similar extensions of credit in the ordinary
         course of its business.

         (h)      Notwithstanding anything to the contrary contained herein, any
Lender that is a Fund may create a security interest in all or any portion of
the Borrowings owing to it and the Note, 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
SECTION 13.13, (i) no such pledge shall release the pledging Lender from any of
its obligations under the Loan Documents and (ii) such trustee shall not be
entitled to exercise any of the rights of a Lender under the Loan Documents even
though such trustee may have acquired ownership rights with respect to the
pledged interest through foreclosure or otherwise.

         13.14    DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN
CIRCUMSTANCES. The obligations of Borrower under the Loan Documents shall remain
in full force and effect until termination of the Total Commitment and payment
in full of the Principal Debt and of all interest, fees, and other amounts of
the Obligation then due and owing, except that SECTIONS 4, 11, and 13, and any
other provisions under the Loan Documents expressly intended to survive by the
terms hereof or by the terms of the applicable Loan Documents, shall survive
such termination. If at any time any payment of the principal of or interest on
any Note or any other amount payable by Borrower under any Loan Document is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy, or reorganization of any Company or otherwise, then the obligations
of Borrower under the Loan Documents with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.

         13.15    LIMITED WAIVER.Each of the Lenders hereunder that is a Lender
under the Existing Credit Agreement hereby waives the requirement set forth in
Section 2.4 of the Existing Credit Agreement that Borrower provide ten (10)
Business Days prior notice of the termination of the commitments thereunder. The
waiver set forth herein is limited as provided herein and shall not be deemed to
be a waiver or consent to any deviation from the terms of this Agreement or the
other Loan Documents.

         13.16    CONFIDENTIALITY.Each of Administrative Agent and Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees, and agents, including accountants, legal
counsel, and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority (including any self-regulatory
authority, such as the 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

CREDIT AGREEMENT

                                       56


proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this SECTION 13.15, to
(i) any assignee of or Participant in, or any prospective assignee 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 Borrower and its obligations, (g) with the
consent of Borrower, or (h) to the extent such Information (x) becomes publicly
available other than as a result of a breach of this SECTION 13.15 or (y)
becomes available to Administrative Agent or any Lender on a nonconfidential
basis from a source other than Borrower. For purposes of this Section,
"INFORMATION" means all information received from any Company relating to any
Company or any of their respective businesses, other than any such information
that is available to Administrative Agent or any Lender on a nonconfidential
basis prior to disclosure by any Company, provided that, in the case of
information received from a Company after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this SECTION 13.15
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Notwithstanding anything herein to the contrary, "INFORMATION" shall not
include, and each party hereto may disclose without limitation of any kind, any
information with respect to the "tax treatment" and "tax structure" (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to such party relating to such
tax treatment and tax structure; provided that with respect to any document or
similar item that in either case contains information concerning the tax
treatment or tax structure of the transaction as well as other information, this
sentence shall only apply to such portions of the document or similar item that
relate to the tax treatment or tax structure of the Borrowings, and transactions
contemplated hereby.

        [REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGES FOLLOW.]

CREDIT AGREEMENT

                                       57


EXECUTED as of the first date written above.

                                  CENTEX CORPORATION,
                                  as Borrower

                                  By: -s- Vicki A. Roberts
                                      -----------------------------------------
                                      Vicki A. Roberts
                                      Vice President and Treasurer

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  BANK OF AMERICA, N.A., as Administrative Agent
                                  and as a Lender

                                  By: -s- Mark Lariviere
                                      ------------------------------------------
                                      Mark Lariviere
                                      Managing Director

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  JPMORGAN CHASE BANK, as a Lender

                                  By: -s- David L. Howard
                                      ------------------------------------------
                                      David L. Howard
                                      Vice President

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  THE ROYAL BANK OF SCOTLAND PLC,
                                  as a Lender

                                  By: /s/ David Apps
                                      ------------------------------------------
                                      David Apps
                                      Senior Vice President

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  CITICORP NORTH AMERICA, INC.,
                                  as a Lender

                                  By: -s- Michael Chiopak
                                      ------------------------------------------
                                      Michael Chiopak
                                      Vice President

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  BANK ONE, NA, as a Lender

                                  By: -s- James P. Krcmarik
                                      ------------------------------------------
                                      James P. Krcmarik
                                      Associate Director

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  BNP PARIBAS, as a Lender

                                  By: -s- Jeff Tebeaux
                                      ------------------------------------------
                                      Jeff Tebeaux
                                      Vice President

                                  By: -s- Henry F. Setina
                                      ------------------------------------------
                                      Henry F. Setina
                                      Director

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  CREDIT LYONNAIS NEW YORK BRANCH,
                                  as a Lender

                                  By: -s- Attila Koc
                                      ------------------------------------------
                                      Attila Koc
                                      Senior Vice President

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  CREDIT SUISSE FIRST BOSTON, ACTING
                                  THROUGH ITS CAYMAN ISLANDS BRANCH,
                                  as a Lender

                                  By: -s- Bill O'Daly
                                      ------------------------------------------
                                      Bill O'Daly
                                      Director

                                  By: Cassandra Droogan
                                      ------------------------------------------
                                      Cassandra Droogan
                                      Associate

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  SUNTRUST BANK, as a Lender

                                  By: -s- W. John Wendler
                                      ------------------------------------------
                                      W. John Wendler
                                      Director

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  THE BANK OF TOKYO-MITSUBISHI, LTD.,
                                  as a Lender

                                  By: -s- John M. Mearns
                                      ------------------------------------------
                                      John M. Mearns
                                      Vice President and Manager

                                  By: -s- Brenda S. Trader
                                      ------------------------------------------
                                      Brenda S. Trader
                                      Banking Officer

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  COMERICA BANK, as a Lender

                                  By: -s- Casey L. Ostrander
                                      ------------------------------------------
                                      Casey L. Ostrander
                                      Assistant Vice President

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  WASHINGTON MUTUAL BANK, FA,
                                  as a Lender

                                  By: -s- Mary Bowman
                                      ------------------------------------------
                                      Mary Bowman
                                      Senior Vice President

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  LLOYDS TSB BANK, PLC,
                                  as a Lender

                                  By: -s- Windsor R. Davies
                                      ------------------------------------------
                                      Windsor R. Davies
                                      Director, Corporate Banking, USA
                                                 D061

                                  By: -s- [ILLEGIBLE]
                                      ------------------------------------------
                                      [ILLEGIBLE]
                                      Vice President, Corporate Banking, USA
                                                 [ILLEGIBLE]

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  PNC BANK, NATIONAL ASSOCIATION,
                                  as a Lender

                                  By: -s- Douglas G. Paul
                                      ------------------------------------------
                                      Douglas G. Paul
                                      Senior Vice President

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  BANCA DI ROMA - CHICAGO BRANCH,
                                  as a Lender

                                  By: -s- Joyce Montgomery
                                      ------------------------------------------
                                      Joyce Montgomery
                                      Vice President

                                  By: -s- Aurora Pensa
                                      ------------------------------------------
                                      Aurora Pensa
                                      Vice President

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  UBS AG, CAYMAN ISLANDS BRANCH,
                                  as a Lender

                                  By: -s- Patricia O'Kicki
                                      ------------------------------------------
                                      Patricia O'Kicki
                                      Director

                                  By: -s- Wilfred V. Saint
                                      ------------------------------------------
                                      Wilfred V. Saint
                                      Associate Director
                                      Banking Products
                                      Services, US

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  THE NORTHERN TRUST COMPANY,
                                  as a Lender

                                  By: -s- Paul H. Theiss
                                      ------------------------------------------
                                      Paul H. Theiss
                                      Vice President

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT



                                  US BANK NATIONAL ASSOCIATION,
                                  as a Lender

                                  By: -s- Joseph L. Sooter, Jr.
                                      ------------------------------------------
                                      Joseph L. Sooter, Jr.
                                      Vice President

         SIGNATURE PAGE TO CENTEX CORPORATION REVOLVING CREDIT AGREEMENT


                                    EXHIBIT A

                             FORM OF REVOLVING NOTE

$_______________                                                  August 7, 2003

         FOR VALUE RECEIVED, the undersigned, CENTEX CORPORATION, a Nevada
corporation ("BORROWER"), hereby promises to pay to the order of
_______________________ ("LENDER"), at the offices of BANK OF AMERICA, N.A., as
Administrative Agent for Lender and others as hereinafter described, on the
Termination Date, the lesser of (i) _____________________________________
($____________) and (ii) the aggregate Principal Debt disbursed by Lender to
Borrower and outstanding and unpaid on the Termination Date (together with
accrued and unpaid interest thereon).

         This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement, dated as of August 7, 2003 (as amended,
modified, supplemented, or restated from time to time, the "AGREEMENT"), among
Borrower, Lender and other lenders named therein, and Agents, and is one of the
"Notes" referred to therein. Unless defined herein, capitalized terms used
herein that are defined in the Agreement have the meaning given to such terms in
the Agreement. Reference is made to the Agreement for provisions affecting this
note regarding applicable interest rates, principal and interest payment dates,
final maturity, voluntary and mandatory prepayments, acceleration of maturity,
exercise of Rights, payment of attorneys' fees, court costs and other costs of
collection, certain waivers by Borrower and others now or hereafter obligated
for payment of any sums due hereunder and security for the payment hereof.
Without limiting the immediately preceding sentence, reference is made to
SECTION 3.8 of the Agreement for usury savings provisions.

         THE LAWS OF THE STATE OF TEXAS AND OF THE UNITED STATES OF AMERICA
SHALL GOVERN THE RIGHTS AND DUTIES OF BORROWER AND LENDER AND THE VALIDITY,
CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION HEREOF.

                                  CENTEX CORPORATION

                                  By  __________________________________________
                                      Name:  ___________________________________
                                      Title: ___________________________________

CENTEX EXHIBITS AND SCHEDULES

                                       1


                                    EXHIBIT B

                         FORM OF COMPLIANCE CERTIFICATE
                              (Centex Corporation)

DATE:                 ______________, _____

SUBJECT PERIOD:       ________ended ________________, ______

ADMINISTRATIVE AGENT: Bank of America, N.A.

BORROWER:             Centex Corporation

         This certificate is delivered under the Credit Agreement, dated as of
August 7, 2003 (as amended, modified, supplemented, or restated from time to
time, the "CREDIT AGREEMENT"), among Borrower, Administrative Agent, and other
Agents and Lenders party thereto. Capitalized terms used herein and not
otherwise defined herein shall have the meaning given to such terms in the
Credit Agreement.

         The undersigned certifies to Lenders that:

         (a)      the undersigned is a Responsible Officer of Borrower in the
position(s) set forth under the signature below;

         (b)      the Financial Statements of the Companies attached to this
certificate were prepared in accordance with GAAP, and present fairly in all
material respects the consolidated financial condition and results of operations
of the Companies as of, and for the [three, six, or nine months, or fiscal year]
ended on, ____________, _____ (the "SUBJECT PERIOD") [(subject only to normal
year-end audit adjustments)];

         (c)      a review of the activities of the Companies during the Subject
Period has been made under my supervision with a view to determining whether,
during the Subject Period, the Companies have kept, observed, performed, and
fulfilled all of their respective obligations under the Loan Documents, and
during the Subject Period, (i) the Companies kept, observed, performed, and
fulfilled each and every covenant and condition of the Loan Documents (except
for the deviations, if any, set forth on ANNEX A to this certificate) in all
material respects, and (ii) no Event of Default (nor any Potential Default) has
occurred which has not been cured or waived (except the Events of Default or
Potential Defaults, if any, described on ANNEX A to this certificate);

         (d)      the status of compliance by Borrower with SECTION 9.12(a),
(b), and (c) of the Credit Agreement at the end of the Subject Period is as set
forth on ANNEX B to this certificate; and

         (e)      during the Subject Period, each Schedule to each Loan Document
that was required to be revised and supplied to Administrative Agent in
accordance with the terms of the Loan Documents has been so revised and
supplied.

CENTEX EXHIBITS AND SCHEDULES

                                       2


[Signature of Responsible Officer of Borrower]

                                  By: __________________________________________
                                      Name:  ___________________________________
                                      Title: ___________________________________

CENTEX EXHIBITS AND SCHEDULES

                                       3


                        ANNEX A TO COMPLIANCE CERTIFICATE

                         DEVIATIONS FROM LOAN DOCUMENTS/
                         DEFAULTS OR POTENTIAL DEFAULTS

                              (If none, so state.)

CENTEX EXHIBITS AND SCHEDULES

                                       4


                        ANNEX B TO COMPLIANCE CERTIFICATE
                              (Centex Corporation)

Status of Compliance with SECTION 9.12(a), (b) and (c) of the Credit Agreement
(1)

         Borrower shall provide to Administrative Agent (for the benefit of
Lenders) detailed calculations, in form and substance reasonably acceptable to
Administrative Agent, demonstrating compliance with the following covenants:

SECTION 9.3            INDEBTEDNESS OF RESTRICTED SUBSIDIARIES

SECTION 9.12(a)        LEVERAGE RATIO

SECTION 9.12(b)        INTEREST COVERAGE

SECTION 9.12(c)        MINIMUM TANGIBLE NET WORTH

(1)      All as more particularly determined in accordance with the terms of the
         Credit Agreement, which control in the event of conflicts with this
         form.

CENTEX EXHIBITS AND SCHEDULES

                                       5


                                   EXHIBIT C-1

                           FORM OF NOTICE OF BORROWING

                             _________________, ____

Bank of America, N.A.
       as Administrative Agent for the
       Lenders as defined in the Credit
       Agreement referred to below
901 Main Street, 14th Floor
Dallas, Texas  75202
Attn:  Taelitha Harris
       Phone:  214.209.3645
       Fax:  214.290.9644

         Reference is made to the Credit Agreement, dated as of August 7, 2003
(as amended, modified, supplemented, or restated from time to time,
"AGREEMENT"), among the undersigned, the Lenders named therein, and Agents.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Agreement. The undersigned hereby gives
you notice pursuant to the Agreement that it requests a Borrowing under the
Agreement, and in that connection sets forth below the terms on which such
Borrowing is requested to be made:

(A)      Date of Borrowing*                                (A) ________________

(B)      Amount of Borrowing**                             (B) ________________

(C)      Type of Borrowing***                              (C) ________________

(D)      For a Eurodollar Borrowing, the Interest Period
         and the last day thereof****                      (D) ________________

         On the date the rate is set, please confirm the interest rate below and
return by facsimile transmission to ___________________.

         Borrower hereby certifies that the following statements are true and
correct on the date hereof, and will be true and correct on the Borrowing Date
specified herein after giving effect to such Borrowing:

                  (a)      this Borrowing will not cause the Total Principal
         Debt to exceed the Total Commitment;

                  (b)      all of the representations and warranties of Borrower
         set forth in the Loan Documents (excluding the representations and
         warranties which speak to a specific date or are based on facts which
         have changed by transactions expressly contemplated or permitted by the
         Agreement) are true and correct in all material respects;

CENTEX EXHIBITS AND SCHEDULES

                                       6


                  (c)      no Event of Default or Potential Default has occurred
         and is continuing; and

                  (d)      the funding of such Borrowing is permitted by all
         applicable Legal Requirements.

                                  Very truly yours,

                                  CENTEX CORPORATION

                                  By  __________________________________________
                                      Name:  ___________________________________
                                      Title: ___________________________________

Facility Rate: _____________________

Confirmed by: ______________________________

      *  Must be a Business Day occurring prior to the Termination Date and be
         at least (i) three (3) Business Days following receipt by
         Administrative Agent of this Notice of Borrowing for any Eurodollar
         Borrowing, and (ii) one (1) Business Day following receipt by
         Administrative Agent of this Notice of Borrowing for any Prime Rate
         Borrowing.

    **   Not less than $5,000,000 or a greater integral multiple of $1,000,000
         (whether a Prime Rate Borrowing or a Eurodollar Borrowing).

   ***   Eurodollar Borrowing or Prime Rate Borrowing.

  ****   Eurodollar Borrowing -- 1, 2, 3, or 6 months.
         In no event may the Interest Period end after the Termination Date.

CENTEX EXHIBITS AND SCHEDULES

                                       7


                                   EXHIBIT C-2

                    FORM OF NOTICE OF CONVERSION/CONTINUATION

                             ______________ __, ____

Bank of America, N.A.
         as Administrative Agent for the
         Lenders as defined in the Credit
         Agreement referred to below
901 Main Street, 14th Floor
Dallas,  Texas  75202
Attn:    Taelitha Harris
         Phone:  214.209.3645
         Fax:  214.290.9644

         Reference is made to (i) the Credit Agreement, dated as of August 7,
2003 (as amended, modified, supplemented, or restated from time to time,
"AGREEMENT"), among the undersigned, the Lenders named therein, and Agents.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Agreement. The undersigned hereby gives
you notice pursuant to SECTION 3.10 of the Agreement that it elects to Convert a
Borrowing from one Type to another Type or elects to Continue a Borrowing and
select a new Interest Period for a Eurodollar Borrowing, and in that connection,
sets forth below the terms on which such Conversion or Continuation is requested
to be made:

(A)      Date of Borrowing*                                     (A)   __________

(B)      Amount of Borrowing**                                  (B)   __________

(C)      Type of Borrowing***                                   (C)   __________

(D)      For Conversion to, or Continuation of, a Eurodollar
         Borrowing, the Interest Period and the last day        (D)   __________
         thereof****

         On the date the rate is set, please confirm the interest rate below and
return by facsimile transmission to ___________________.

                                     Very truly yours,

                                     CENTEX CORPORATION

                                     By  _______________________________________
                                         Name:__________________________________
                                         Title:_________________________________

Facility Rate:_______________

Confirmed by:____________________

CENTEX EXHIBITS AND SCHEDULES

                                       8



   *     Must be a Business Day at least (i) three (3) Business Days following
         receipt by Administrative Agent of this Notice of
         Conversion/Continuation for a Conversion from a Prime Rate Borrowing to
         a Eurodollar Borrowing or a Continuation of a Eurodollar Borrowing for
         an additional Interest Period, and (ii) one (1) Business Day following
         receipt by Administrative Agent of this Notice of
         Conversion/Continuation for a Conversion from a Eurodollar Borrowing to
         a Prime Rate Borrowing.

  **     Not less than $5,000,000 or a greater integral multiple of $1,000,000
         (if a Prime Rate Borrowing); not less than $5,000,000 or a greater
         integral multiple of $1,000,000 (if a Eurodollar Borrowing).

 ***     Eurodollar Borrowing or Prime Rate Borrowing.

****     Eurodollar Borrowing -- 1, 2, 3, or 6 months. In no event may the
         Interest Period end after the Termination Date.

CENTEX EXHIBITS AND SCHEDULES

                                       9



                                   EXHIBIT C-3

                          FORM OF NOTICE OF PREPAYMENT

                             ______________ __, ____

Bank of America, N.A.
         as Administrative Agent for the
         Lenders as defined in the Credit
         Agreement referred to below
901 Main Street, 14th Floor
Dallas, Texas  75202
Attn:    Taelitha Harris
         Phone:  214.209.3645
         Fax:  214.290.9644

         Reference is made to the Credit Agreement, dated as of August 7, 2003
(as amended, modified, supplemented, or restated from time to time,
"AGREEMENT"), among the undersigned, the Lenders named therein, and Agents.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Agreement. The undersigned hereby gives
you notice pursuant to the Agreement that it plans to make a prepayment of a
Borrowing under the Agreement, and in that connection sets forth below the terms
on which such prepayment will be made:

(A)      Prepayment date*                                       (A)   __________

(B)      Amount of prepayment**                                 (B)   __________

(C)      Type of Borrowing to be prepaid***                     (C)   __________

(D)      For a Eurodollar Borrowing, the Interest Period and
         the last day thereof for the prepayment to be          (D)   __________
         applied****

                                     Very truly yours,

                                     CENTEX CORPORATION

                                     By ________________________________________
                                        Name:___________________________________
                                        Title:__________________________________

CENTEX EXHIBITS AND SCHEDULES

                                       10



   *     Must be a Business Day occurring on or prior to the Termination Date
         and be at least (i) three (3) Business Days following receipt by
         Administrative Agent of this Notice of Prepayment for any Eurodollar
         Borrowing, and (ii) one (1) Business Day following receipt by
         Administrative Agent of this Notice of Prepayment for any Prime Rate
         Borrowing.

  **     Not less than $5,000,000 or a greater integral multiple of $1,000,000
         (whether a Prime Rate Borrowing or a Eurodollar Borrowing).

 ***     Eurodollar Borrowing or Prime Rate Borrowing.

****     Eurodollar Borrowing -- 1, 2, 3, or 6 months.

CENTEX EXHIBITS AND SCHEDULES

                                       11



                                    EXHIBIT D

                           FORM OF OPINION OF COUNSEL

         The opinion delivered by counsel to Borrower must be in form and
substance acceptable to Administrative Agent and its special counsel and cover
the following matters:

         1.       Borrower is duly incorporated, validly existing, and in good
standing under the Legal Requirements of the State of Nevada.

         2.       Borrower is duly qualified to transact business and is in good
standing as a foreign corporation in the State of Texas and in each other
jurisdiction where, to the best of that counsel's knowledge, the nature and
extent of Borrower's business and properties require due qualification and good
standing.

         3.       Borrower possesses all requisite corporate power and authority
to conduct its business as is now being, or is contemplated by the Credit
Agreement to be, conducted.

         4.       The execution and delivery by Borrower of each Loan Document
to which it is a party and the performance by it of its obligations thereunder,
(a) are within its corporate power, (b) have been duly authorized by all
necessary corporate action on its behalf, (c) except for any action or filing
that has been taken or made on or before the date of this opinion, and the
filing of the Loan Documents with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, require no action by or filing
with any Governmental Authority, (d) do not violate any provision of its
Constituent Documents, (e) do not to the best knowledge of counsel after
reasonable inquiry violate any Legal Requirement applicable to it or, to the
best knowledge of counsel after reasonable inquiry, any material agreements to
which it is a party and of which counsel is aware, and (f) do not result in the
creation or imposition of any Lien on any asset of Borrower pursuant to a
material agreement of Borrower of which counsel is aware.

         5.       Upon execution and delivery by all parties to it, each Loan
Document will constitute a legal and binding obligation of Borrower, enforceable
against it in accordance with its terms, except as enforceability may be limited
by applicable Debtor Relief Laws and general principles of equity.

         6.       To the best knowledge of counsel after reasonable inquiry, (a)
no Company is subject to, or aware of the threat of, any Litigation that is
reasonably likely to be determined adversely to it and, if so adversely
determined, would be a Material Adverse Event, and (b) no outstanding or unpaid
judgments against any Company exist that could be a Material Adverse Event.

CENTEX EXHIBITS AND SCHEDULES

                                       12



                                    EXHIBIT E

                   FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption (this "ASSIGNMENT AND ASSUMPTION") is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] ("ASSIGNOR") and [Insert name of Assignee] ("ASSIGNEE").
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (the "CREDIT AGREEMENT"), receipt
of a copy of which is hereby acknowledged by Assignee. The Standard Terms and
Conditions set forth in ANNEX 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

For an agreed consideration, Assignor hereby irrevocably sells and assigns to
Assignee, and Assignee hereby irrevocably purchases and assumes from Assignor,
subject to and in accordance with the Standard Terms and Conditions and the
Credit Agreement (including Section 13.13(b) thereof), as of the Effective Date
inserted by Administrative Agent as contemplated below (i) all of Assignor's
rights and obligations as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of Assignor under the respective facilities identified
below and (ii) to the extent permitted to be assigned under applicable law, all
claims, suits, causes of action, and any other right of Assignor (in its
capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto, or the loan transactions governed
thereby or in any way based on or related to any of the foregoing, including,
but not limited to, contract claims, tort claims, malpractice claims, statutory
claims, and all other claims at law or in equity related to the rights and
obligations sold and assigned pursuant to CLAUSE (i) above (the rights and
obligations sold and assigned pursuant to CLAUSES (i) and (ii) above being
referred to herein collectively as, the "ASSIGNED INTEREST"). Such sale and
assignment is without recourse to Assignor and, except as expressly provided in
this Assignment and Assumption, without representation or warranty by Assignor.

1.       Assignor:______________________________

2.       Assignee:______________________________ [and is an Affiliate/Approved
                  Fund of [identify Lender]1]

3.       Borrower: Centex Corporation, a Nevada corporation

4.       Administrative Agent: Bank of America, N.A., as the administrative
                               agent under the Credit Agreement

5.       Credit Agreement:     The Credit Agreement, dated as of August 7, 2003,
                               among Centex  Corporation,  the Lenders parties
                               thereto, Bank of America, N.A., as Administrative
                               Agent

- -----------------------
1 Select as applicable.

CENTEX EXHIBITS AND SCHEDULES

                                       13



6.       Assigned Interest:



                           Total                  Amount of               Percentage
                    Commitment/Borrowings   Commitment/Borrowings         Assigned of
Facility Assigned     for all Lenders*            Assigned*         Commitment/Borrowings2
- -----------------   ---------------------   ---------------------   ----------------------
                                                           
_________________   $____________________   $____________________   ______________________%
_________________   $____________________   $____________________   ______________________%
_________________   $____________________   $____________________   ______________________%


[7.      Trade Date: __________________]3

Effective Date: __________________, 20___ [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:
                                           ASSIGNOR
                                           [NAME OF ASSIGNOR]

                                           By: _____________________________
                                               Title:

                                           ASSIGNEE
                                           [NAME OF ASSIGNEE]

                                           By: _____________________________
                                               Title:
Consented to and Accepted:

BANK OF AMERICA, N.A., as Administrative Agent

By: _________________________________
    Title:

Consented to and Accepted:

By: _________________________________
    Title:]

- ----------
         * Amount to be adjusted by the counterparties to take into account any
payments or prepayments made between the Trade Date and the Effective Date.

         2 Set forth, to at least 9 decimals, as a percentage of the
Commitment/Borrowings of all Lenders thereunder.

         3 To be completed if Assignor and Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

CENTEX EXHIBITS AND SCHEDULES
                                       14



                      ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

                        STANDARD TERMS AND CONDITIONS FOR
                            ASSIGNMENT AND ASSUMPTION

                  1.       Representations and Warranties.

                  1.1.     Assignor. Assignor: (a) represents and warrants that
(i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance, or other adverse
claim, and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties, or
representations made in or in connection with the Credit Agreement or any other
Loan Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency, or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of Borrower, any of its Subsidiaries
or Affiliates or any other Person obligated in respect of any Loan Document, or
(iv) the performance or observance by the Borrower, any of its Subsidiaries or
Affiliates, or any other Person of any of their respective obligations under any
Loan Document.

                  1.2.     Assignee. Assignee: (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it meets all requirements of an Eligible Assignee under the
Credit Agreement (subject to receipt of such consents as may be required under
the Credit Agreement), (iii) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement as a Lender thereunder and, to
the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to SECTION 8.3
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on Administrative Agent or any other Lender, and (v) if it is a Lender
that is not a "United States person" within the meaning of Section 7701(a)(30)
of the Tax Code, attached hereto is any documentation required to be delivered
by it pursuant to the terms of the Credit Agreement, duly completed and executed
by Assignee; and (b) agrees that (i) it will, independently and without reliance
on Administrative Agent, Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

                  2.       Payments. From and after the Effective Date,
Administrative Agent shall make all payments in respect of the Assigned interest
(including payments of principal, interest, fees and other amounts) to Assignee
whether such amounts have accrued prior to or on or after the Effective Date.
The Assignor and Assignee shall make all appropriate adjustments in payments by
Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.

                  3.       General Provisions. This Assignment and Assumption
shall be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one

CENTEX EXHIBITS AND SCHEDULES

                                       15


instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of Texas.

CENTEX EXHIBITS AND SCHEDULES

                                       16



                                  SCHEDULE 2.1

                  LENDERS AND COMMITMENTS; ADDRESSES FOR NOTICE



                                                                           PRO RATA
            NAME AND ADDRESS OF LENDERS                   COMMITMENT         PART
                                                                     
Bank of America, N.A.                                    $  95,000,000     11.87500%
Attn:  Bryce Langen
NC1-007-15-06
100 N. Tryon Street
Charlotte, NC 28255
Phone:  704.387.5104
Fax:  704.386.0255

[With a copy to:

Bank of America, N.A.
Attn: Agency Management
901 Main Street, 14th Floor
Dallas, TX  75202
Phone:  214.209.4109
Fax:  214-290-9448]

JPMorgan Chase Bank                                      $  90,000,000     11.25000%
Attn:  David L. Howard
2200 Ross Avenue, Third Floor
Dallas, TX  75201
Phone:  214.965.4756
Fax:  214.965.2044

The Royal Bank of Scotland plc
Attn:  Dave Apps                                         $  90,000,000     11.25000%
101 Park Avenue
New York, NY  10178
Phone:  212.401.3745
Fax:  212.401.3456


CENTEX EXHIBITS AND SCHEDULES

                                       17





                                                                           PRO RATA
            NAME AND ADDRESS OF LENDERS                   COMMITMENT         PART
                                                                     
Citicorp North America, Inc.                             $  85,000,000     10.62500%
Attn:  Michael Chlopak
390 Greenwich Street, 1st Floor
New York, NY  10013
Phone:  212.723.5899
Fax:  212.723.8547

Bank One, NA                                             $  50,000,000      6.25000%
Attn:  F. Patt Schiewitz
1 Bank One Plaza, Suite IL1-0315
Chicago, IL  60670
Phone:  312.732.1148
Fax:  312.732.5939

BNP Paribas                                              $  50,000,000      6.25000%
Attn:  Jeff Tebeaux
12201 Merit Drive, Suite 860
Dallas, TX  75251
Phone:  214.953.9737
Fax:  972.788.9140

Credit Lyonnais New York Branch                          $  50,000,000      6.25000%
Attn:  Robert Smith
2200 Ross Avenue, Suite 4400 West
Dallas, TX  75201
Phone:  214.220.2311
Fax:  214.220.2323

Credit Suisse First Boston, acting through its Cayman    $  50,000,000      6.25000%
Islands Branch
Attn:  William O'Daly
Eleven Madison Avenue
New York, NY  10010
Phone:  212.325.1986
Fax:  212.743.2254


CENTEX EXHIBITS AND SCHEDULES

                                       18





                                                                           PRO RATA
            NAME AND ADDRESS OF LENDERS                   COMMITMENT         PART
                                                                      
SunTrust Bank                                            $  35,000,000      4.37500%
Attn:  W. John Wendler
8245 Boone Boulevard, Suite 820
Vienna, VA  22181
Phone:  703.902.9041
Fax:  703.902.9245

The Bank of Tokyo-Mitsubishi, Ltd.                       $  37,500,000      4.68750%
Attn:  John Mearns / Brenda Trader
2001 Ross Avenue, Suite 3150
Dallas, TX  75201
Phone:  214.954.1200 ext. 104 / ext. 111
Fax:  214.954.1007

Comerica Bank                                            $  37,500,000      4.68750%
Attn:  Casey L. Ostrander
500 Woodward Avenue, 7th Floor
MC: 3256
Detroit, MI 48226
Phone:  313.222.5286
Fax:  313.222.9295

Washington Mutual Bank, FA                               $  37,500,000      4.68750%
Attn:  Mary Bowman
5050 Broadway, 1st Floor
Oakland, CA  94611
Phone:  510.658.1209
Fax:  510.658.1407

Lloyds TSB Bank plc                                      $  26,250,000      3.28125%
Attn:  Windsor Davies
1251 Avenue of the Americas, 39th Floor
New York, NY  10020
Phone:  212.930.8909
Fax:  212.930.5098


CENTEX EXHIBITS AND SCHEDULES

                                       19





                                                                           PRO RATA
            NAME AND ADDRESS OF LENDERS                   COMMITMENT         PART
                                                                      
PNC Bank, National Association                           $  26,250,000      3.28125%
Attn:  Douglas Paul
2 Tower Center, 18th Floor
East Brunswick, NJ  08816
Phone:  732.220.3566
Fax:  732.220.3744

Banca di Roma - Chicago Branch                           $  15,000,000      1.87500%
Attn:  Joyce Montgomery
225 West Washington, Suite 1200
Chicago, IL  60606
Phone:  312.704.2648
Fax:  312.726.3058

UBS AG, Cayman Islands Branch                            $  10,000,000      1.25000%
Attn:  [Denise Conzo]
677 Washington Boulevard
6-South
Stamford, CT  06901
Phone:  203.719.3853
Fax:  203.719.3888

The Northern Trust Company                               $   7,500,000      0.93750%
Attn:  Paul Theiss
50 South LaSalle Street
Chicago, IL  60675
Phone:  312.557.1791
Fax:  312.444.7028

US Bank National Association                             $   7,500,000      0.93750%
Attn:  Joseph Sooter
One US Bank Plaza
5L-MO-T12M
St. Louis, MO  63101
Phone:  314.418.2462
Fax:  314.418.3859

                           Totals                        $ 800,000,000    100.00000%


CENTEX EXHIBITS AND SCHEDULES

                                       20



                                  SCHEDULE 7.3

                                  SUBSIDIARIES



                        SUBSIDIARY                                  STATE OF        OWNERSHIP
                                                                    FORMATION       PERCENTAGE
                                                                              
CDMC HOLDING, INC.                                               (Nevada)                  100%
GREAT LAKES DEVELOPMENT CO., INC.                                (Nevada)               100.00%
CROSLAND ACCEPTANCE ASSOCIATES V                                 (North Carolina)          100%
CROSLAND BOND COMPANY                                            (North Carolina)          100%
GENBOND TWO, INC.                                                (North Carolina)          100%
JOHN CROSLAND COMPANY                                            (North Carolina)          100%
MORTGAGE ACCEPTANCE ASSOCIATES NO. 2                             (North Carolina)          100%
MORTGAGE COLLATERAL ASSOCIATES NO. 1                             (North Carolina)          100%
MORTGAGE COLLATERAL ASSOCIATES NO. 3                             (North Carolina)          100%
CENTEX CONSTRUCTION PRODUCTS, INC.                               (Delaware)              65.10%
AMERICAN GYPSUM COMPANY                                          (Delaware)              65.10%
AMERICAN GYPSUM MARKETING COMPANY                                (Delaware)              65.10%
CCP CEMENT COMPANY                                               (Nevada)                65.10%
CCP CONCRETE/AGGREGATES LLC                                      (Delaware)              65.10%
CCP GYPSUM COMPANY                                               (Nevada)                65.10%
CCP LAND COMPANY                                                 (Nevada)                65.10%
CENTEX CEMENT CORPORATION                                        (Nevada)                65.10%
CENTEX MATERIALS LLC                                             (Delaware)              65.10%
CXP FUNDING, LLC                                                 (Delaware)              65.10%
HOLLIS & EASTERN RAILROAD COMPANY LLC                            (Delaware)              65.10%
M & W DRYWALL SUPPLY COMPANY                                     (Nevada)                65.10%
MATHEWS READYMIX LLC                                             (California)            65.10%
MOUNTAIN CEMENT COMPANY                                          (Nevada)                65.10%
NEVADA CEMENT COMPANY                                            (Nevada)                65.10%
REPUBLIC PAPERBOARD COMPANY LLC                                  (Delaware)              65.10%
TEXAS CEMENT COMPANY                                             (Nevada)                65.10%
TLCC GP LLC                                                      (Delaware)              65.10%
TLCC LP LLC                                                      (Delaware)              65.10%
WESTERN AGGREGATES LLC                                           (Nevada)                65.10%
WESTERN CEMENT COMPANY OF CALIFORNIA                             (California)            65.10%
A. W. MORTGAGE, L.P.                                             (Texas)                 50.01%
ADFINET, INC.                                                    (Nevada)                  100%
ADFITECH, INC.                                                   (Nevada)                  100%
AMERICAN LANDMARK MORTGAGE, LTD.                                 (Florida)               50.01%
ASHLEY TURNER FINANCE, L.P.                                      (Texas)                 50.01%
AT-HOME MORTGAGE ASSOCIATES, LTD.                                (Florida)               50.01%
AUSTIN PARTNERS IN LENDING, L.P.                                 (Texas)                 50.01%
BANYAN FINANCIAL OF CENTRAL FLORIDA, L.P.                        (Texas)                 50.01%


                                                                         Page 21





                        SUBSIDIARY                                  STATE OF        OWNERSHIP
                                                                    FORMATION       PERCENTAGE
                                                                              
BENEFIT ASSET MANAGEMENT CORPORATION                             (California)              100%
BUILDER'S HOME MORTGAGE, L.P.                                    (Washington)            50.01%
CALIFORNIA HOME MORTGAGE, L.P.                                   (Texas)                 50.01%
CENTEX EQUITY CORPORATION                                        (Nevada)                  100%
CENTEX FINANCIAL SERVICES, INC.                                  (Nevada)                  100%
CENTEX HOME EQUITY COMPANY, LLC                                  (Delaware)                100%
CENTEX OFFICE VICEROY I, L.P.                                    (Delaware)                100%
CENTEX TECHNOLOGY, INC.                                          (Nevada)                  100%
CENTEX TITLE & ANCILLARY SERVICES, INC.                          (Nevada)                  100%
CENTEX VICEROY GENERAL PARTNER, LLC                              (Delaware)                100%
CHEC ASSET RECEIVABLE CORPORATION                                (Nevada)                  100%
CHEC CONDUIT FUNDING, LLC                                        (Delaware)                100%
CHEC FUNDING, LLC                                                (Delaware)                100%
CHEC INDUSTRIAL LOAN COMPANY                                     (Tennessee)               100%
CHEC INDUSTRIAL LOAN CORPORATION                                 (Minnesota)               100%
CHEC RESIDUAL, LLC                                               (Delaware)                100%
COMMERCE APPRAISAL SERVICES, LLC                                 (Delaware)                100%
COMMERCE LAND TITLE AGENCY, LLC                                  (Ohio)                    100%
COMMERCE LAND TITLE, INC.                                        (Nevada)                  100%
COMMERCE TITLE COMPANY                                           (California)              100%
COMMERCE TITLE COMPANY, INC.                                     (Alabama)                 100%
COMMERCE TITLE COMPANY OF NEW MEXICO, LLC                        (Delaware)                100%
COMMERCE TITLE INSURANCE COMPANY                                 (California)              100%
COMMERCE TITLE VENTURES, LLC                                     (Delaware)                100%
CORE MORTGAGE CONNECTION, L.P.                                   (Texas)                 50.01%
CTX MORTGAGE COMPANY, LLC                                        (Delaware)                100%
CTX MORTGAGE FUNDING III, LLC                                    (Delaware)                100%
CTX MORTGAGE FUNDING, LLC                                        (Delaware)                100%
CTX MORTGAGE VENTURES CORPORATION                                (Nevada)                  100%
CTX MORTGAGE VENTURES, LLC                                       (Delaware)                100%
CTX SWAP I, LLC                                                  (Delaware)                100%
DALLAS SUBURBS MORTGAGE, L.P.                                    (Texas)                    50%
DARDEN FINANCIAL SERVICES, L.P.                                  (Texas)                 50.01%
DENALI FINANCIAL SERVICES, L.P.                                  (Texas)                 50.01%
DUNDEE INSURANCE AGENCY, INC.                                    (Texas)                   100%
EXPRESS FINANCIAL SERVICES, LIMITED PARTNERSHIP                  (North Carolina)        50.01%
FAIRWAY FINANCIAL GROUP, L.P.                                    (Texas)                 50.01%
FIRST CENTURY MORTGAGE, L.P.                                     (Texas)                 50.01%
FLORIDA LANDMARK MORTGAGE, L.P.                                  (Texas)                 50.01%
FOUR OAKS MORTGAGE, L.P.                                         (North Carolina)        50.01%
GLG MORTGAGE, L.P.                                               (Texas)                 50.01%
HARWOOD INSURANCE SERVICES, LLC                                  (California)              100%


                                                                         Page 22





                        SUBSIDIARY                                  STATE OF        OWNERSHIP
                                                                    FORMATION       PERCENTAGE
                                                                              
HARWOOD SERVICE COMPANY OF GEORGIA, LLC                          (Georgia)                 100%
HARWOOD SERVICE COMPANY OF NEW JERSEY, LLC                       (New Jersey)              100%
HARWOOD SERVICE COMPANY, LLC                                     (Delaware)                100%
HARWOOD STREET FUNDING I, LLC                                    (Delaware)                   *
HARWOOD STREET FUNDING II, LLC                                   (Delaware)                100%
HEARTLAND MORTGAGE, L.P.                                         (California)            50.01%
HOMEFRONTMORTGAGE, L.P.                                          (Washington             50.01%
LEWIS MORTGAGE COMPANY, L.P.                                     (Texas)                 50.01%
LMX FINANCIAL SERVICES, LTD.                                     (Florida)               50.01%
METROPOLITAN TAX SERVICE, INC.                                   (Nevada)                  100%
METROPOLITAN TITLE & GUARANTY COMPANY                            (Florida)                 100%
MH ACQUISITION COMPANY, LLC                                      (Delaware)                100%
MORTGAGE PORTFOLIO SERVICES, INC.                                (Delaware)                100%
MPS FUNDING CORPORATION                                          (Delaware)                100%
NAB ASSET COMPANY, LLC                                           (Texas)                   100%
NEW HOME MORTGAGE SPECIALISTS, L.P.                              (Washington)            50.01%
OPTIMA INFORMATION SOLUTIONS, LLC                                (Delaware)                 71%
PACIFIC AMERICAN MORTGAGE COMPANY                                (Texas)                   100%
PENNSTAR FINANCIAL, LLC                                          (Delaware)              50.01%
PINE RIDGE FINANCIAL, L.P.                                       (Washington)            50.01%
ROBERG FINANCIAL, L.P.                                           (Texas)                 50.01%
T.W. LEWIS MORTGAGE COMPANY, L.P.                                (Texas)                 50.01%
VENTURE TITLE AGENCY, LTD., LLLP                                 (Florida)               50.02%
WESTWOOD INSURANCE AGENCY                                        (Nevada)                  100%
WESTWOOD INSURANCE AGENCY OF ARIZONA, INC.                       (Arizona)                 100%
WESTWOOD INSURANCE AGENCY                                        (California)              100%
ARMOR INSURANCE COMPANY                                          (Vermont)                 100%
CENTEX INTERNATIONAL, INC.                                       (Nevada)                  100%
CENTEX INTERNATIONAL, LLC                                        (Delaware)              98.95%
CENTEX LIFE SOLUTIONS, INC.                                      (Nevada)                  100%
CENTEX MANAGEMENT SERVICES LIMITED                               (United Kingdom)        98.95%
CENTEX SERVICE COMPANY                                           (Nevada)                  100%
CTX HOLDING COMPANY                                              (Nevada)                  100%
21 HOUSING COMPANY, LLC                                          (Delaware)                100%
AAA HOLDINGS, INC.                                               (Delaware)                100%
ABC HOMES LIMITED                                                (United Kingdom)           50%
BARRINGTON CARPET, LLC                                           (Delaware)                100%
CENTEX BUILDING SERVICES, INC.                                   (Nevada)                  100%
CENTEX DEVELOPMENT MANAGEMENT COMPANY                            (Nevada)                  100%
CENTEX HOMES                                                     (Nevada)                99.95%
CENTEX HOMES INTERNATIONAL LIMITED                               (United Kingdom)          100%
CENTEX HOMES MARKETING, INC.                                     (Georgia)                 100%


                                                                         Page 23





                        SUBSIDIARY                                  STATE OF        OWNERSHIP
                                                                    FORMATION       PERCENTAGE
                                                                              
CENTEX HOMES OF CALIFORNIA II, LLC                               (Delaware)              99.73%
CENTEX HOMES OF CALIFORNIA, LLC                                  (Delaware)              99.73%
CENTEX HOMES REALTY COMPANY                                      (Nevada)                  100%
CENTEX HOMES REALTY, INC.                                        (Michigan)                100%
CENTEX HOMES, INC.                                               (Texas)                   100%
CENTEX HOMES, LLC                                                (Delaware)              99.95%
CENTEX LATIN AMERICA, INC.                                       (Nevada)                  100%
CENTEX LOST CREEK RANCH, LLC                                     (Delaware)              99.95%
CENTEX MANUFACTURED HOUSING GROUP, LLC                           (Delaware)                100%
CENTEX REAL ESTATE CONSTRUCTION COMPANY                          (Nevada)                  100%
CENTEX REAL ESTATE CORPORATION                                   (Nevada)                  100%
CENTEX REALTY, INC.                                              (Florida)                 100%
CITY HOMEBUILDERS, INC.                                          (Texas)                   100%
COYOTE CANYON, LLC                                               (Delaware)              99.95%
CTX BUILDERS SUPPLY SERVICES, LLC                                (Delaware)              99.95%
DESARROLLOS EN LATINOAMERICA SERVICIOS ADMINSTRATIVOS S
DE RL DE CV                                                      (Mexico)                  100%
EMPRESAS INMOBILIARIAS DE MEXICO, S. DE R.L. DE C.V.             (Mexico)                  100%
FOX & JACOBS, INC.                                               (Texas)                   100%
MEADOW VISTA COMPANY, LLC                                        (Delaware)                100%
MELROSE PARK JOINT VENTURE                                       (Florida)               53.31%
SELECTIVE - DELAWARE, L.L.C.                                     (Delaware)              99.95%
ST LENDING, INC.                                                 (Delaware)              99.73%
SUNSET RANCHOS DEVELOPERS, LLC                                   (Delaware)              99.95%
SYCAMORE CREEK                                                   (California)            50.00%
THE JONES COMPANY BUILDING SERVICES, LLC                         (Nevada)                99.95%
THE JONES COMPANY HOMES, LLC                                     (Nevada)                99.95%
THE JONES COMPANY HOMES REALTY, LLC                              (Nevada)                99.95%
WAYNE HOMES, LLC                                                 (Delaware)              97.44%
WAYNE HOMES MID ATLANTIC, LLC                                    (Delaware)              99.95%
CENTEX HOME SERVICES COMPANY                                     (Nevada)                  100%
CENTEX HOMETEAM LAWN CARE, LLC                                   (Delaware)                100%
CENTEX HOMETEAM SECURITY, INC.                                   (Nevada)                  100%
HOMETEAM PEST DEFENSE, INC.                                      (Nevada)                  100%
HOMETEAM PEST DEFENSE, LLC                                       (Delaware)                100%
BATESON DAILEY, A JOINT VENTURE                                  (Michigan)                 65%
CENTEX ATLANTIC, LCL                                             (Delaware)                100%
CENTEX CONCORD                                                   (Tennessee)                50%
CENTEX CONCORD PROPERTY MANAGEMENT, L.L.C.                       (Tennessee)                50%
CENTEX CONSTRUCTION COMPANY, INC.                                (Nevada)                  100%
CENTEX CONSTRUCTION GROUP, INC.                                  (Nevada)                  100%
CENTEX CONSTRUCTION GROUP SERVICES, LLC                          (Delaware)                100%


                                                                         Page 24





                        SUBSIDIARY                                  STATE OF        OWNERSHIP
                                                                    FORMATION       PERCENTAGE
                                                                              
CENTEX ENGINEERING & CONSTRUCTION, INC.                          (Nevada)                  100%
CENTEX GOLDEN CONSTRUCTION COMPANY                               (Nevada)                  100%
CENTEX LANDIS LIMITED LIABILITY COMPANY NO.1                     (Louisiana)               100%
CENTEX RODGERS, INC.                                             (Nevada)                  100%
CENTEX ROONEY CONSTRUCTION CO., INC./HUBER, HUNT &
NICHOLS, INC., A JOINT VENTURE                                   (Florida)                  65%
CENTEX ROONEY CONSTRUCTION CO., INC./LANDIS COMPANY, INC. A
JOINT VENTURE                                                    Louisiana)                 70%
CENTEX ROONEY CONSTRUCTION CO., INC./RATTLER
CONSTRUCTION CONTRACTORS, INC., A JOINT VENTURE                  (Florida)                  75%
CENTEX ROONEY CONSTRUCTION COMPANY/ACI, A JOINT VENTURE          (Florida)                  50%
CENTEX ROONEY MARINE, INC.                                       (Florida)                 100%
CENTEX ROONEY/GRAY CONSTRUCTION, A JOINT VENTURE                 (Florida)                  85%
CENTEX ROONEY/HLM CORRECTIONAL DESIGN BUILDERS, LC               (Florida)                  70%
CENTEX ROONEY/KBJ DESIGN/BUILD, L.L.C.                           (Delaware)                 90%
CENTEX ROONEY/LLT, A JOINT VENTURE                               (Florida)                  75%
CENTEX ROONEY/PGAL DESIGN BUILDERS, L.C.                         (Florida)                  90%
CENTEX ROONEY/RS&H DESIGN BUILDERS, L.C.                         (Florida)                  90%
CENTEX ROONEY/SCHENKEL SHULTZ DESIGN/BUILDERS, L.C.              (Florida)                  50%
CENTEX SEISMIC SERVICES, INC.                                    (Nevada)                   95%
CENTEX/F&S, L.L.C.                                               (Delaware)                100%
CENTEX/FPC, L.L.C.                                               (Delaware)                100%
CENTEX/HKS II, L.L.C.                                            (Delaware)                100%
CENTEX/HKS, CANYON, L.L.C.                                       (Delaware)                100%
CENTEX/HKS, L.L.C.                                               (Delaware)                100%
CENTEX/MASHBURN, A JOINT VENTURE                                 (North Carolina)           65%
CENTEX/MORRIS II, L.L.C.                                         (Delaware)                100%
CENTEX/MORRIS, L.L.C.                                            (Delaware)                100%
CENTEX/OMNIPLAN, L.L.C.                                          (Delaware)                100%
CENTEX/OMNIPLAN II, L.L.C.                                       (Delaware)                100%
CENTEX/SCHENKEL SHULTZ, L.L.C.                                   (Delaware)                100%
+CENTEX/SHG, L.L.C.                                              (Delaware)                100%
CENTEX/SICNER, LLC                                               (Delaware)                 90%
CENTEX/WORTHGROUP, L.L.C.                                        (Delaware)                100%
CENTEX-3D/I, A JOINT VENTURE                                     (Texas)                    90%
CENTEX-AIM CONSTRUCTION, L.L.C.                                  (Michigan)                 80%
CENTEX-GILFORD, A JOINT VENTURE                                  (Virginia)              79.58%
CENTEX-GILFORD, A JOINT VENTURE II                               (Virginia)                 88%
CENTEX-ROONEY CONSTRUCTION CO., INC.                             (Florida)                 100%
CENTEX-ROONEY CONSTRUCTION CO. OF GEORGIA, LLC                   (Delaware)                100%
CENTEX-ROONEY CONSTRUCTION CO., INC./CONSTRUCT TWO


                                                                         Page 25





                        SUBSIDIARY                                  STATE OF        OWNERSHIP
                                                                    FORMATION       PERCENTAGE
                                                                              
CONSTRUCTION MANAGERS, INC., A JOINT VENTURE                    (Florida)                  90%

CKC FACILITIES GROUP, L.C.                                       (Florida)                  60%
GHQ COMPANY, INC.                                                (Nevada)                  100%
INDEPENDENT GENERAL AGENCY, INC.                                 (Texas)                   100%
KIRCHMAN/CENTEX, A JOINT VENTURE                                 (Florida)                  75%
THE STUDENT COMMUNITIES GROUP, L.C.                              (Florida)                  50%


                                                                         Page 26





                                                                    STATE OF        OWNERSHIP
                  UNRESTRICTED SUBSIDIARY                           FORMATION       PERCENTAGE
                                                                              
CDMC HOLDING, INC.                                               (Nevada)                  100%
GREAT LAKES DEVELOPMENT CO., INC.                                (Nevada)               100.00%
CROSLAND ACCEPTANCE ASSOCIATES V                                 (North Carolina)          100%
CROSLAND BOND COMPANY                                            (North Carolina)          100%
GENBOND TWO, INC.                                                (North Carolina)          100%
JOHN CROSLAND COMPANY                                            (North Carolina)          100%
MORTGAGE ACCEPTANCE ASSOCIATES NO. 2                             (North Carolina)          100%
MORTGAGE COLLATERAL ASSOCIATES NO. 1                             (North Carolina)          100%
MORTGAGE COLLATERAL ASSOCIATES NO. 3                             (North Carolina)          100%
CENTEX CONSTRUCTION PRODUCTS, INC.                               (Delaware)              65.10%
AMERICAN GYPSUM COMPANY                                          (Delaware)              65.10%
AMERICAN GYPSUM MARKETING COMPANY                                (Delaware)              65.10%
CCP CEMENT COMPANY                                               (Nevada)                65.10%
CCP CONCRETE/AGGREGATES LLC                                      (Delaware)              65.10%
CCP GYPSUM COMPANY                                               (Nevada)                65.10%
CCP LAND COMPANY                                                 (Nevada)                65.10%
CENTEX CEMENT CORPORATION                                        (Nevada)                65.10%
CENTEX MATERIALS LLC                                             (Delaware)              65.10%
CXP FUNDING, LLC                                                 (Delaware)              65.10%
HOLLIS & EASTERN RAILROAD COMPANY LLC                            (Delaware)              65.10%
M & W DRYWALL SUPPLY COMPANY                                     (Nevada)                65.10%
MATHEWS READYMIX LLC                                             (California)            65.10%
MOUNTAIN CEMENT COMPANY                                          (Nevada)                65.10%
NEVADA CEMENT COMPANY                                            (Nevada)                65.10%
REPUBLIC PAPERBOARD COMPANY LLC                                  (Delaware)              65.10%
TEXAS CEMENT COMPANY                                             (Nevada)                65.10%
TLCC GP LLC                                                      (Delaware)              65.10%
TLCC LP LLC                                                      (Delaware)              65.10%
WESTERN AGGREGATES LLC                                           (Nevada)                65.10%
WESTERN CEMENT COMPANY OF CALIFORNIA                             (California)            65.10%
A. W. MORTGAGE, L.P.                                             (Texas)                 50.01%
ADFINET, INC.                                                    (Nevada)                  100%
ADFITECH, INC.                                                   (Nevada)                  100%
AMERICAN LANDMARK MORTGAGE, LTD.                                 (Florida)               50.01%
ASHLEY TURNER FINANCE, L.P.                                      (Texas)                 50.01%
AT-HOME MORTGAGE ASSOCIATES, LTD.                                (Florida)               50.01%
AUSTIN PARTNERS IN LENDING, L.P.                                 (Texas)                 50.01%
BANYAN FINANCIAL OF CENTRAL FLORIDA, L.P.                        (Texas)                 50.01%
BENEFIT ASSET MANAGEMENT CORPORATION                             (California)              100%


CENTEX EXHIBITS AND SCHEDULES

                                       27





                                                                    STATE OF        OWNERSHIP
                  UNRESTRICTED SUBSIDIARY                           FORMATION       PERCENTAGE
                                                                              
BUILDER'S HOME MORTGAGE, L.P.                                    (Washington)            50.01%
CALIFORNIA HOME MORTGAGE, L.P.                                   (Texas)                 50.01%
CENTEX EQUITY CORPORATION                                        (Nevada)                  100%
CENTEX FINANCIAL SERVICES, INC.                                  (Nevada)                  100%
CENTEX HOME EQUITY COMPANY, LLC                                  (Delaware)                100%
CENTEX OFFICE VICEROY I, L.P.                                    (Delaware)                100%
CENTEX TECHNOLOGY, INC.                                          (Nevada)                  100%
CENTEX TITLE & ANCILLARY SERVICES, INC.                          (Nevada)                  100%
CENTEX VICEROY GENERAL PARTNER, LLC                              (Delaware)                100%
CHEC ASSET RECEIVABLE CORPORATION                                (Nevada)                  100%
CHEC CONDUIT FUNDING, LLC                                        (Delaware)                100%
CHEC FUNDING, LLC                                                (Delaware)                100%
CHEC INDUSTRIAL LOAN COMPANY                                     (Tennessee)               100%
CHEC INDUSTRIAL LOAN CORPORATION                                 (Minnesota)               100%
CHEC RESIDUAL, LLC                                               (Delaware)                100%
COMMERCE APPRAISAL SERVICES, LLC                                 (Delaware)                100%
COMMERCE LAND TITLE AGENCY, LLC                                  (Ohio)                    100%
COMMERCE LAND TITLE, INC.                                        (Nevada)                  100%
COMMERCE TITLE COMPANY                                           (California)              100%
COMMERCE TITLE COMPANY, INC.                                     (Alabama)                 100%
COMMERCE TITLE COMPANY OF NEW MEXICO, LLC                        (Delaware)                100%
COMMERCE TITLE INSURANCE COMPANY                                 (California)              100%
COMMERCE TITLE VENTURES, LLC                                     Delaware)                100%
CORE MORTGAGE CONNECTION, L.P.                                   (Texas)                 50.01%
CTX MORTGAGE COMPANY, LLC                                        (Delaware)                100%
CTX MORTGAGE FUNDING III, LLC                                    (Delaware)                100%
CTX MORTGAGE FUNDING, LLC                                        (Delaware)                100%
CTX MORTGAGE VENTURES CORPORATION                                (Nevada)                  100%
CTX MORTGAGE VENTURES, LLC                                       (Delaware)                100%
CTX SWAP I, LLC                                                  (Delaware)                100%
DALLAS SUBURBS MORTGAGE, L.P.                                    (Texas)                    50%
DARDEN FINANCIAL SERVICES, L.P.                                  (Texas)                 50.01%
DENALI FINANCIAL SERVICES, L.P.                                  (Texas)                 50.01%
DUNDEE INSURANCE AGENCY, INC.                                    (Texas)                   100%
EXPRESS FINANCIAL SERVICES, LIMITED PARTNERSHIP                  (North Carolina)        50.01%
FAIRWAY FINANCIAL GROUP, L.P.                                    (Texas)                 50.01%
FIRST CENTURY MORTGAGE, L.P.                                     (Texas)                 50.01%
FLORIDA LANDMARK MORTGAGE, L.P.                                  (Texas)                 50.01%
FOUR OAKS MORTGAGE, L.P.                                         (North Carolina)        50.01%
GLG MORTGAGE, L.P.                                               (Texas)                 50.01%


CENTEX EXHIBITS AND SCHEDULES

                                       28





                                                                    STATE OF        OWNERSHIP
                  UNRESTRICTED SUBSIDIARY                           FORMATION       PERCENTAGE
                                                                              
HARWOOD INSURANCE SERVICES, LLC                                  (California)              100%
HARWOOD SERVICE COMPANY OF GEORGIA, LLC                          (Georgia)                 100%
HARWOOD SERVICE COMPANY OF NEW JERSEY, LLC                       (New Jersey)              100%
HARWOOD SERVICE COMPANY, LLC                                     (Delaware)                100%
HARWOOD STREET FUNDING I, LLC                                    (Delaware)                   *
HARWOOD STREET FUNDING II, LLC                                   (Delaware)                100%
HEARTLAND MORTGAGE, L.P.                                         (California)            50.01%
HOMEFRONTMORTGAGE, L.P.                                          (Washington             50.01%
LEWIS MORTGAGE COMPANY, L.P.                                     (Texas)                 50.01%
LMX FINANCIAL SERVICES, LTD.                                     (Florida)               50.01%
METROPOLITAN TAX SERVICE, INC.                                   (Nevada)                  100%
METROPOLITAN TITLE & GUARANTY COMPANY                            (Florida)                 100%
MH ACQUISITION COMPANY, LLC                                      (Delaware)                100%
MORTGAGE PORTFOLIO SERVICES, INC.                                (Delaware)                100%
MPS FUNDING CORPORATION                                          (Delaware)                100%
NAB ASSET COMPANY, LLC                                           (Texas)                   100%
NEW HOME MORTGAGE SPECIALISTS, L.P.                              (Washington)            50.01%
OPTIMA INFORMATION SOLUTIONS, LLC                                (Delaware)                 71%
PACIFIC AMERICAN MORTGAGE COMPANY                                (Texas)                   100%
PENNSTAR FINANCIAL, LLC                                          (Delaware)              50.01%
PINE RIDGE FINANCIAL, L.P.                                       (Washington)            50.01%
ROBERG FINANCIAL, L.P.                                           (Texas)                 50.01%
T.W. LEWIS MORTGAGE COMPANY, L.P.                                (Texas)                 50.01%
VENTURE TITLE AGENCY, LTD., L.P.                                 (Florida)               50.02%
WESTWOOD INSURANCE AGENCY                                        (Nevada)                  100%
WESTWOOD INSURANCE AGENCY OF ARIZONA, INC.                       (Arizona)                 100%
WESTWOOD INSURANCE AGENCY                                        (California)              100%


*     Owned 100% by holders of various series of Subordinated Certificates
      issued by Harwood Street Funding I, LLC. These holders are not affiliated
      with Centex Corporation.

CENTEX EXHIBITS AND SCHEDULES

                                       29

EX-10.1(B)

exv10w1xby

EX-10.2

                                                                    EXHIBIT 10.2

                  LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                      among

                               CENTEX CORPORATION,
                                    Borrower

                             BANK OF AMERICA, N.A.,
                              Administrative Agent

                                       and

                            THE LENDERS NAMED HEREIN,
                                     Lenders

                                  $250,000,000

                           DATED AS OF AUGUST 7, 2003

                                  BANK ONE, NA,
                                Syndication Agent

                         BANC OF AMERICA SECURITIES LLC,
                    Sole Lead Arranger and Sole Book Manager



                                TABLE OF CONTENTS



                                                                                                      Page
                                                                                                   
SECTION 1 DEFINITIONS AND TERMS..............................................................           1

         1.1      DEFINITIONS................................................................           1

         1.2      NUMBER AND GENDER OF WORDS; OTHER REFERENCES...............................          15

         1.3      ACCOUNTING PRINCIPLES......................................................          15

         1.4      TIME REFERENCES............................................................          15

SECTION 2 CREDIT EXTENSION PROVISIONS........................................................          15

         2.1      LETTERS OF CREDIT..........................................................          15

         2.2      LENDERS; INCREASE IN TOTAL COMMITMENT......................................          23

         2.3      VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS..........................          24

SECTION 3 TERMS OF PAYMENT...................................................................          24

         3.1      NOTES AND PAYMENTS.........................................................          24

         3.2      MANDATORY PAYMENTS.........................................................          25

         3.3      DEFAULT RATE...............................................................          25

         3.4      INTEREST RECAPTURE.........................................................          25

         3.5      INTEREST CALCULATIONS......................................................          26

         3.6      MAXIMUM RATE...............................................................          26

         3.7      ORDER OF APPLICATION.......................................................          26

         3.8      RIGHT OF SET-OFF; ADJUSTMENTS..............................................          27

         3.9      BOOKING BORROWINGS.........................................................          27

SECTION 4 CHANGE IN CIRCUMSTANCES............................................................          28

         4.1      INCREASED COST AND REDUCED RETURN..........................................          28

         4.2      LIMITATION ON TYPES OF BORROWINGS..........................................          29

         4.3      ILLEGALITY.................................................................          29

         4.4      TREATMENT OF AFFECTED LOANS................................................          29

         4.5      COMPENSATION...............................................................          30

         4.6      TAXES......................................................................          30


LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       i


                                                                                                   
SECTION 5 FEES...............................................................................          32

         5.1      TREATMENT OF FEES..........................................................          32

         5.2      FEES OF ADMINISTRATIVE AGENT...............................................          32

         5.3      LETTER OF CREDIT FEES......................................................          32

         5.4      FRONTING FEE AND DOCUMENTARY AND PROCESSING CHARGES PAYABLE TO L/C ISSUER..          32

         5.5      UNUSED FEE.................................................................          32

SECTION 6 CONDITIONS PRECEDENT...............................................................          33

         6.1      CONDITIONS PRECEDENT TO CLOSING............................................          33

         6.2      CONDITIONS TO ALL CREDIT EXTENSIONS........................................          33

SECTION 7 REPRESENTATIONS AND WARRANTIES.....................................................          34

         7.1      PURPOSE OF LETTER OF CREDIT FACILITY.......................................          34

         7.2      EXISTENCE, GOOD STANDING, AUTHORITY, AND AUTHORIZATIONS....................          35

         7.3      SUBSIDIARIES; CAPITAL STOCK................................................          35

         7.4      AUTHORIZATION AND CONTRAVENTION............................................          35

         7.5      BINDING EFFECT.............................................................          35

         7.6      FINANCIAL STATEMENTS.......................................................          35

         7.7      LITIGATION, CLAIMS, INVESTIGATIONS.........................................          36

         7.8      TAXES......................................................................          36

         7.9      ENVIRONMENTAL MATTERS......................................................          36

         7.10     EMPLOYEE BENEFIT PLANS.....................................................          36

         7.11     PROPERTIES; LIENS..........................................................          37

         7.12     GOVERNMENT REGULATIONS.....................................................          37

         7.13     TRANSACTIONS WITH AFFILIATES...............................................          37

         7.14     NO DEFAULT.................................................................          37

         7.15     SOLVENCY...................................................................          37

         7.16     COMPLIANCE WITH LEGAL REQUIREMENTS.........................................          37

         7.17     FULL DISCLOSURE............................................................          37

         7.18     SENIOR DEBT................................................................          37

         7.19     TAX SHELTER REGULATIONS....................................................          37

SECTION 8 AFFIRMATIVE COVENANTS..............................................................          38



LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       ii


                                                                                                   
         8.1      USE OF PROCEEDS............................................................          38

         8.2      BOOKS AND RECORDS..........................................................          38

         8.3      ITEMS TO BE FURNISHED......................................................          38

         8.4      INSPECTIONS................................................................          40

         8.5      TAXES......................................................................          40

         8.6      PAYMENT OF OBLIGATIONS.....................................................          40

         8.7      MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS.............................          40

         8.8      INSURANCE..................................................................          40

         8.9      PRESERVATION AND PROTECTION OF RIGHTS......................................          41

         8.10     ENVIRONMENTAL LAWS.........................................................          41

         8.11     COMPLIANCE WITH LEGAL REQUIREMENTS.........................................          41

         8.12     DESIGNATION OF UNRESTRICTED SUBSIDIARIES...................................          41

SECTION 9 NEGATIVE COVENANTS.................................................................          42

         9.1      EMPLOYEE BENEFIT PLANS.....................................................          42

         9.2      LIENS......................................................................          42

         9.3      SUBSIDIARY INDEBTEDNESS; LIMITATIONS ON UPSTREAMING........................          44

         9.4      TRANSACTIONS WITH AFFILIATES...............................................          44

         9.5      COMPLIANCE WITH DOCUMENTS..................................................          44

         9.6      ASSIGNMENT.................................................................          44

         9.7      FISCAL YEAR AND ACCOUNTING METHODS.........................................          44

         9.8      GOVERNMENT REGULATIONS.....................................................          44

         9.9      SALE OF ASSETS.............................................................          44

         9.10     MERGERS AND DISSOLUTIONS; SALE OF CAPITAL STOCK............................          44

         9.11     NEW BUSINESS...............................................................          45

         9.12     FINANCIAL COVENANTS........................................................          45

SECTION 10 DEFAULT...........................................................................          45

         10.1     PAYMENT OF OBLIGATION......................................................          45

         10.2     COVENANTS..................................................................          45

         10.3     DEBTOR RELIEF..............................................................          46

         10.4     JUDGMENTS AND ATTACHMENTS..................................................          46

         10.5     GOVERNMENT ACTION..........................................................          46

         10.6     MISREPRESENTATION..........................................................          46



LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       iii


                                                                                                   
         10.7     CHANGE OF CONTROL..........................................................          46

         10.8     DEFAULT UNDER OTHER DEBT AND AGREEMENTS....................................          46

         10.9     EMPLOYEE BENEFIT PLANS.....................................................          47

         10.10    VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS..............................          47

SECTION 11 RIGHTS AND REMEDIES...............................................................          48

         11.1     REMEDIES UPON DEFAULT......................................................          48

         11.2     BORROWER WAIVERS...........................................................          48

         11.3     PERFORMANCE BY ADMINISTRATIVE AGENT........................................          48

         11.4     DELEGATION OF DUTIES AND RIGHTS............................................          49

         11.5     NOT IN CONTROL.............................................................          49

         11.6     COURSE OF DEALING..........................................................          49

         11.7     CUMULATIVE RIGHTS..........................................................          49

         11.8     APPLICATION OF PROCEEDS....................................................          49

         11.9     CERTAIN PROCEEDINGS........................................................          49

         11.10    EXPENSES; INDEMNIFICATION..................................................          50

SECTION 12 ADMINISTRATIVE AGENT..............................................................          51

         12.1     APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT......................          51

         12.2     DELEGATION OF DUTIES.......................................................          51

         12.3     LIABILITY OF ADMINISTRATIVE AGENT..........................................          51

         12.4     RELIANCE BY ADMINISTRATIVE AGENT...........................................          52

         12.5     NOTICE OF EVENT OF DEFAULT.................................................          52

         12.6     CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT.........          52

         12.7     INDEMNIFICATION OF ADMINISTRATIVE AGENT....................................          53

         12.8     ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY............................          53

         12.9     SUCCESSOR ADMINISTRATIVE AGENT.............................................          54

         12.10    ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIMS.............................          54

         12.11    OTHER AGENT; ARRANGERS; AND MANAGERS.......................................          55

SECTION 13 MISCELLANEOUS.....................................................................          55

         13.1     HEADINGS...................................................................          55

         13.2     NONBUSINESS DAYS...........................................................          55

         13.3     COMMUNICATIONS.............................................................          55



LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       iv


                                                                                                    
         13.4     FORM AND NUMBER OF DOCUMENTS...............................................          56

         13.5     EXCEPTIONS TO COVENANTS....................................................          56

         13.6     SURVIVAL...................................................................          56

         13.7     GOVERNING LAW..............................................................          56

         13.8     INVALID PROVISIONS.........................................................          56

         13.9     ENTIRETY...................................................................          57

         13.10    JURISDICTION; VENUE; SERVICE OF PROCESS; JURY TRIAL........................          57

         13.11    AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS...............................          58

         13.12    MULTIPLE COUNTERPARTS......................................................          58

         13.13    SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS.....................          59

         13.14    DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN CIRCUMSTANCES          61

         13.15    CONFIDENTIALITY............................................................          61



LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                        v


                             SCHEDULES AND EXHIBITS

Schedule 1.1         -       Existing Letters of Credit
Schedule 2.1         -       Lenders and Commitments; Addresses for Notice
Schedule 7.3         -       Subsidiaries and Stock

Exhibit A            -       Form of Note
Exhibit B            -       Form of Compliance Certificate
Exhibit C            -       Form of Notice of Conversion/Continuation
Exhibit D            -       Form of Opinion of Counsel
Exhibit E            -       Form of Assignment and Acceptance Agreement

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       vi


                  LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

         THIS LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT is entered into as of
August 7, 2003 (the "CLOSING DATE") among CENTEX CORPORATION, a Nevada
corporation ("BORROWER"), Lenders (hereinafter defined), and BANK OF AMERICA,
N.A., as Administrative Agent (hereinafter defined).

                                 R E C I T A L S

         A.       Borrower has requested that Lenders extend credit to Borrower
in the form of this Agreement, providing for, among other things, a letter of
credit facility in the aggregate principal amount of up to $250,000,000.

         B.       Upon and subject to the terms and subject to the conditions of
this Agreement, Lenders are willing to extend such credit to Borrower.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

SECTION 1 DEFINITIONS AND TERMS.

         1.1      DEFINITIONS. As used herein:

         ADJUSTED EURODOLLAR RATE means, for any Eurodollar Borrowing for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100th of 1%) determined by Administrative Agent to be equal to the
quotient obtained by dividing (a) the Eurodollar Rate for such Eurodollar
Borrowing for such Interest Period by (b) one (1) minus the Reserve Requirement
for such Eurodollar Borrowing for such Interest Period.

         ADMINISTRATIVE AGENT means Bank of America, N.A., and its permitted
successors and assigns as "Administrative Agent" for Lenders under this
Agreement.

         AFFILIATE of any Person means any other Person who directly or
indirectly controls, or is controlled by, or is under common control with, such
Person, and, for purposes of this definition only, "control," "controlled by,"
and "under common control with" mean possession, directly or indirectly, of the
power to direct or cause the direction of management or policies (whether
through ownership of voting securities, by contract, or otherwise).

         AGENT-RELATED PERSONS means Administrative Agent, together with its
Affiliates (including Arranger), and the officers, directors, employees, agents
and attorneys-in-fact of such Persons and Affiliates.

         AGREEMENT means this Letter of Credit and Reimbursement Agreement (as
the same may hereafter be amended, modified, supplemented, or restated from time
to time).

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT



         APPLICABLE LENDING OFFICE means, for each Lender, the "Lending Office"
of such Lender (or an Affiliate of such Lender) designated on SCHEDULE 2.1 or
such other office as such Lender may from time to time specify to Administrative
Agent and Borrower by written notice in accordance with the terms hereof as the
office by which its Credit Extensions are to be made and maintained.

         APPLICABLE MARGIN means, as of any date of determination, the interest
margin over the Prime Rate or the Adjusted Eurodollar Rate, and the applicable
fees payable pursuant to SECTION 5.5 that corresponds to the Moody's Rating and
the S & P Rating set forth below on such date of determination:



                                                                          Applicable Margin for
                                                   Applicable Margin      Eurodollar Borrowings       Applicable
                  Moody's                           for Prime Rate        and Letter of Credit        Margin for
Level             Rating          S & P Rating        Borrowings                  Fees               Unused Fees
                                                                                      
  1            A3 or higher     A- or higher            0.0000%                  0.6250%               0.1250%

  2            Baa1             BBB+                    0.0000%                  0.7750%               0.1500%

  3            Baa2             BBB                     0.0000%                  0.9000%               0.1750%

  4            Baa3             BBB-                    0.0000%                  1.0750%               0.2250%

  5            Ba1 or lower     BB+ or lower            0.2500%                  1.3000%               0.3000%
               or               or
               Not Rated        Not Rated


For purposes of the foregoing: (a) if the Moody's Rating and the S & P Rating
shall fall within different LEVELS, then the Applicable Margin shall be
determined by reference to the numerically higher LEVEL (e.g., if the S & P
Rating is in LEVEL 1 and the Moody's Rating is in LEVEL 2, then the Applicable
Margin shall be determined by reference to LEVEL 2); and (b) if either Moody's
or S & P no longer publishes ratings and Borrower and Administrative Agent
cannot agree on another ratings agency to replace Moody's or S & P, as the case
may be, then the Moody's Rating or the S & P Rating, as the case may be, shall
be deemed to be "Not Rated." Each change in the Applicable Margin shall be
effective, in the case of an upgrade, immediately following Administrative
Agent's receipt of notice from Borrower, as required in SECTION 8.3(g), of a
change in the Moody's Rating or the S & P Rating, and in the case of a
downgrade, on the date of the public announcement thereof.

         APPROVED FUND is defined in SECTION 13.13(g).

         ARRANGER means Banc of America Securities LLC, and its successors and
permitted assigns in its capacity as "Sole Lead Arranger" under the Loan
Documents.

         ATTORNEY COSTS means and includes all reasonable fees, expenses, and
disbursements of any law firm or other external counsel.

         AUTHORIZATIONS means all filings, recordings, and registrations with,
and all validations or exemptions, approvals, orders, authorizations, consents,
franchises, licenses, certificates, and permits from, any Governmental
Authority.

         BORROWER is defined in the preamble to this Agreement.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       2



         BORROWING means any Prime Rate Borrowing or Eurodollar Borrowing
pursuant to SECTION 2.1(c).

         BUSINESS DAY means (a) for all purposes, any day other than Saturday,
Sunday, and any other day on which commercial banking institutions are required
or authorized by any Legal Requirement to be closed at the place of
Administrative Agent's Payment Office or payments cannot be made on the United
States Fedwire System, and (b) in addition to the foregoing, in respect of any
Eurodollar Borrowing, a day on which dealings in United States dollars are
conducted in the London interbank market and commercial banks are open for
international business in London.

         CAPITALIZED LEASE OBLIGATIONS means all obligations under Capital
Leases taken at the amount thereof accounted for as liabilities in accordance
with GAAP.

         CAPITAL LEASE means any capital lease or sublease which should be
capitalized on a balance sheet in accordance with GAAP.

         CASH COLLATERALIZE is defined in SECTION 2.1(i).

         CHANGE IN CONTROL means, with respect to any Person, any event or
series of events by which:

         (a)      any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of such Person or its Subsidiaries, and any Person acting
in its capacity as trustee, agent or other fiduciary or administrator of any
such plan) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934, except that a Person or group shall
be deemed to have "beneficial ownership" of all securities that such Person or
group has the right to acquire (such right, an "OPTION RIGHT"), whether such
right is exercisable immediately or only after the passage of time), directly or
indirectly, of fifty percent (50%) or more of the equity securities of such
Person entitled to vote for members of the board of directors or equivalent
governing body of such Person on a fully-diluted basis (and taking into account
all such securities that such Person or group has the right to acquire pursuant
to any option right); or

         (b)      during any period of twelve (12) consecutive months, a
majority of the members of the board of directors or other equivalent governing
body of such Person cease to be composed of individuals (i) who were members of
that board or equivalent governing body on the first day of such period, (ii)
whose election or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting at the time
of such election or nomination at least a majority of that board or equivalent
governing body, or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in clauses (i)
and (ii) above constituting at the time of such election or nomination at least
a majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any Person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors).

         CLOSING DATE is defined in the preamble to this Agreement.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       3


         COMMITMENT means, for any Lender at any date of determination, the
amount stated beside each Lender's name as set forth on SCHEDULE 2.1 or on the
most-recently amended SCHEDULE 2.1, if any, prepared by Administrative Agent
pursuant to SECTION 2.2 or SECTION 13.13 (which amount is subject to increase,
reduction, or cancellation in accordance with this Agreement).

         COMPANIES means, as of any date, Borrower and each of its Subsidiaries,
and COMPANY means any one of the Companies.

         COMPLIANCE CERTIFICATE means a certificate signed by a Responsible
Officer, substantially in the form of EXHIBIT B.

         CONSEQUENTIAL LOSS is defined in SECTION 4.5.

         CONSOLIDATED ADJUSTED NET INCOME means, for any period of
determination, consolidated net earnings (after income taxes and without
deduction for losses) of the Companies, but excluding (a) gains from
extraordinary items for such period, and (b) any aggregate net gain during such
period arising from the sale, exchange, or other disposition of capital assets
by the Companies (including any fixed assets, whether tangible or intangible,
all inventory sold in conjunction with the disposition of fixed assets, and all
securities (other than securities sold in the ordinary course of business)).

         CONSOLIDATED DEBT means, as of any date of determination, (a) all Debt
of the Restricted Companies, on a consolidated basis, minus (b) Excess Cash not
subject to any Liens or other restrictions not inherent in the particular
investment or obligation; provided that, for purposes of SECTION 8.12,
Consolidated Debt means, as of the date of determination, all Debt of the
Restricted Companies, on a consolidated basis.

         CONSOLIDATED EBITDA means, for any period of determination and without
duplication, the EBITDA of the Restricted Companies, on a consolidated basis.

         CONSOLIDATED INTEREST EXPENSE means, for any period of determination,
the Interest Expense of the Restricted Companies, on a consolidated basis.

         CONSOLIDATED TANGIBLE NET WORTH means, as of any date of determination,
Tangible Net Worth of the Companies (other than any Excluded Subsidiary), on a
consolidated basis determined in accordance with GAAP.

         CONSTITUENT DOCUMENTS means, with respect to any Person, its articles
or certificate of incorporation, bylaws, partnership agreement, organizational
documents, limited liability company agreement, trust agreement, or such other
documents as may govern such Person's formation, organization, and management.

         CONTINGENT OBLIGATIONS means as to any Person any obligation of such
Person guaranteeing any Debt, leases, dividends, or other obligations ("PRIMARY
OBLIGATIONS") of any other Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, and any other obligation of such Person, whether or not
contingent, pursuant to which such Person is liable under or with respect to a
primary obligation of a primary obligor, in each case that would be included on
a balance sheet of such Person (or disclosed and assigned a monetary value in
the footnotes thereto) properly prepared in accordance with GAAP as a
"Contingent Obligation."

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       4


         CONTINUE, CONTINUATION, and CONTINUED refers to the continuation
pursuant to SECTION 2.1(c) of a Eurodollar Borrowing from one Interest Period to
the next Interest Period.

         CONVERT, CONVERSION, and CONVERTED refers to a conversion pursuant to
SECTION 2.1(c) of one Type of Borrowing into another Type of Borrowing.

         CREDIT EXTENSION means each of the following: (a) a Borrowing; and (b)
an L/C Credit Extension.

         CREDIT PARTIES means Administrative Agent and Lenders, and CREDIT PARTY
means any one of the Credit Parties.

         CUMULATIVE CONSOLIDATED NET INCOME means the sum of Quarterly
Consolidated Net Income for the fiscal quarter ended March 31, 2003, and for
each succeeding fiscal quarter during the term hereof.

         CURRENT FINANCIALS means, at the time of any determination thereof, the
most recently delivered to the Credit Parties of either (a) the Financial
Statements for the fiscal year ended March 31, 2003, calculated on a
consolidated basis for the Companies, or (b) the Financial Statements required
to be delivered under SECTION 8.3(a) or 8.3(b), as the case may be.

         DEBT means (without duplication), for any Person, the sum of the
following: (a) all liabilities, obligations, and indebtedness of such Person for
money borrowed; (b) all liabilities, obligations, and indebtedness of such
Person which is evidenced by bonds, notes, debentures, or other similar
instruments; (c) all Capitalized Lease Obligations of such Person; (d) all
obligations of such Person issued or assumed as the deferred purchase price of
property, all conditional sale obligations of such Person, and obligations of
such Person under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business that are not past-due for
more than ninety (90) days); (e) all Contingent Obligations of such Person; (f)
all obligations of the type referred to in CLAUSES (a) and (b) preceding of
other Persons secured by any Lien on any property or asset of such Person
(whether or not such obligation is assumed by such Person); (g) the face amount
of all letters of credit and banker's acceptances issued for the account of such
Person, and without duplication, all drafts drawn and unpaid thereunder; (h) all
Stock of such Person subject to repurchase or redemption by such Person other
than at the sole option of such Person; (i) all obligations of such Person to
purchase Stock (or other property) which arise out of or in connection with the
sale by such Person of the same or substantially similar Stock (or property);
and (j) all liabilities, obligations, and indebtedness of such Person arising
under Financial Hedges entered into by such Person as determined in accordance
with GAAP.

         DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent
transfer or conveyance, suspension of payments, or similar Legal Requirements
from time to time in effect affecting the Rights of creditors generally.

         DEFAULTING LENDER means, as of any date, any Lender that has (a) failed
to make a Credit Extension required to be made by it hereunder, or (b) given
notice to Administrative Agent or Borrower that it will not make, or that it has
disaffirmed or repudiated any obligation to make, any Credit Extension hereunder
(unless such notice is given by all Lenders).

         DEFAULT RATE means, (i) with respect to any Borrowing, on any date, a
per annum rate of interest equal from day to day to the lesser of (a) the
non-default interest rate applicable to such Borrowing, plus two percent (2%)
and (b) the Maximum Rate, and (ii) with respect to any other Obligation under
the Loan

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       5


Documents, the lesser of (a) the Prime Rate plus the then-effective Applicable
Margin for Prime Rate Borrowings, plus two percent (2%) and (b) the Maximum
Rate.

         DOLLARS and the symbol $ mean lawful money of the United States of
America.

         EBITDA means, with respect to any Person for any fiscal period, an
amount equal to (a) consolidated net income of such Person for such period,
minus (b) the sum of (i) income tax credits, (ii) interest income, (iii) gains
from extraordinary items for such period, and (iv) any aggregate net gain during
such period arising from the sale, exchange, or other disposition of capital
assets by such Person (including any fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the disposition of fixed
assets, and all securities (other than securities sold in the ordinary course of
business)), in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP,
but without duplication, minus (c) any cash payments made in respect of any item
of extraordinary loss accrued during a prior period and added back to EBITDA in
such prior period pursuant to CLAUSE (d)(v) below, plus (d) the sum of (i) any
provision for income taxes, (ii) Interest Expense, (iii) the amount of
depreciation and amortization for such period, (iv) the amount of any deduction
to consolidated net income as the result of any stock option expense, (v) the
amount of any item of extraordinary loss not paid in cash in such period, and
(vi) the absolute value of any aggregate net loss during such period arising
from the sale, exchange, or other disposition of capital assets by such Person
(including any fixed assets, whether tangible or intangible, all inventory sold
in conjunction with the disposition of fixed assets, and all securities (other
than securities sold in the ordinary course of business)), in each case to the
extent included in the calculation of consolidated net income of such Person for
such period in accordance with GAAP, but without duplication.

         ELIGIBLE ASSIGNEE is defined in SECTION 13.13(g).

         EMPLOYEE PLAN means an employee pension benefit plan covered by Title
IV of ERISA and established or maintained by Borrower or any ERISA Affiliate,
but not including any Multiemployer Plan.

         ENVIRONMENTAL LAW means any Legal Requirement relating to protection of
the public health and welfare and/or the environment, including any Legal
Requirement relating to: the generation, processing, treatment, storage,
transport, disposal, investigation, and remediation or other management of
Hazardous Materials; the storage, handling, use, and transport of chemicals and
Hazardous Materials; and protection of areas of particular environmental
concern, including wetlands, areas inhabited by endangered species, historic
sites, and areas above protected aquifers.

         EQUITY ISSUANCE means the issuance or sale by any Restricted Company of
any Stock, other than present and future Stock issued to other Companies or to
employees, directors, or consultants of any of the Companies.

         ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and rulings thereunder.

         ERISA AFFILIATE means any company or trade or business (whether or not
incorporated) which, for purposes of Title IV of ERISA, is a member of
Borrower's controlled group or which is under common control with Borrower
within the meaning of Section 414(b), (c), (m), or (o) of the Tax Code.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       6


         EURODOLLAR BORROWING means a Borrowing bearing interest at the sum of
the Adjusted Eurodollar Rate plus the Applicable Margin for Eurodollar
Borrowings.

         EURODOLLAR RATE means, for any Eurodollar Borrowing for any Interest
Period:

         (a)      the rate per annum equal to the rate determined by
Administrative Agent to be the offered rate that appears on the page of the
Telerate screen (or any successor thereto) that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m. (London time)
two (2) Business Days prior to the first day of such Interest Period; or

         (b)      if the rate referenced in the preceding CLAUSE (a) does not
appear on such page or service or such page or service shall not be available,
the rate per annum equal to the rate determined by Administrative Agent to be
the offered rate on such other page or other service that displays an average
British Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London time)
two (2) Business Days prior to the first day of such Interest Period; or

         (c)      if the rates referenced in the preceding CLAUSES (a) and (b)
are not available, the rate per annum determined by Administrative Agent as the
rate of interest at which deposits in Dollars for delivery on the first day of
such Interest Period in same day funds in the approximate amount of the
Eurodollar Borrowing being made, continued, or converted by Administrative Agent
and with a term equivalent to such Interest Period would be offered by
Administrative Agent's London branch to major banks in the London interbank
eurodollar market at their request at approximately 4:00 p.m. (London time) two
(2) Business Days prior to the first day of such Interest Period.

         EVENT OF DEFAULT is defined in SECTION 10.

         EXCESS CASH means, for the Restricted Companies as of any date of
determination thereof, (a) cash, plus (b) time deposits with, and certificates
of deposit, bank notes and bankers' acceptances issued by, any Lender or any
domestic bank, savings bank or savings and loan association having capital,
surplus and undivided profits aggregating at least $1,000,000,000, plus (c)
investments in direct obligations of the United States of America or any agency,
government-sponsored enterprise or instrumentality thereof, or obligations fully
guaranteed by the United States of America or any agency, government-sponsored
enterprise or instrumentality thereof, provided that such obligations mature
within one (1) year of the date of acquisition thereof, plus (d) investments in
commercial paper rated (at the time of purchase) in one of the two highest
short-term rating categories by two (2) or more national credit rating agencies
and maturing not more than two hundred and seventy (270) days from the date of
creation thereof, plus (e) repurchase agreements involving any of the
obligations described in CLAUSES (b), (c) and (d) above so long as the other
party to the repurchase agreement has short-term unsecured debt obligations or
short-term deposits rated (at the time of purchase) in the highest grade by two
(2) or more national credit rating agencies, plus (f) investments in direct
obligations of any money-market fund or other similar investment company that is
rated "AAAm" or "AAAm-G" by S & P and "Aaa" by Moody's or whose investments
consist, directly or indirectly, primarily of short-term money market
securities, which may include obligations described in the foregoing clauses of
this definition, minus (g) $15,000,000; provided that in no event shall Excess
Cash be less than zero.

         EXCLUDED SUBSIDIARY means any Unrestricted Subsidiary that has a
continuing default or event of default under any Debt in excess of $20,000,000
at any time.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       7


         EXCLUDED TAXES is defined in SECTION 4.6(a).

         EXHIBIT means an exhibit to this Agreement unless otherwise specified.

         EXISTING LETTERS OF CREDIT means those certain letters of credit listed
on SCHEDULE 1.1.

         FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with member banks
of the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, then
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, then the Federal Funds Rate for such day shall be the average rate charged
to Administrative Agent (in its individual capacity) on such day on such
transactions.

         FINANCIAL HEDGE means a swap, collar, floor, cap, or other contract
which is intended to reduce or eliminate the risk of fluctuations in interest
rates.

         FINANCIAL STATEMENTS means balance sheets, statements of operations,
statements of shareholders' investments, and statements of cash flows prepared
in accordance with GAAP, which statements of operations and statements of cash
flows shall be in comparative form to the corresponding period of the preceding
fiscal year, and which balance sheets and statements of shareholders'
investments shall be in comparative form to the prior fiscal year-end figures.

         FUND is defined in SECTION 13.13(g).

         GAAP means generally accepted accounting principles in the United
States of America as set forth in the opinions and pronouncements of the
American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board which are applicable
from time to time.

         GOVERNMENTAL AUTHORITY means any applicable (a) local, state,
municipal, federal, or foreign judicial, executive, or legislative
instrumentality, (b) private arbitration board or panel, or (c) central bank.

         HAZARDOUS MATERIAL means "hazardous substance," "pollutant or
contaminant," and "petroleum," and "natural gas liquids" as those terms are
defined or used in Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 96.01 et seq.), as amended or
supplemented from time to time, and any other substances regulated because of
their effect or potential effect on public health and the environment including
PCBs, lead paint, asbestos, urea formaldehyde, radioactive materials,
putrescible materials, petroleum distillates, medical waste, and infectious
materials.

         HONOR DATE is defined in SECTION 2.1(c).

         INCREASING LENDER is defined in SECTION 2.2(b).

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       8


         INDEMNIFIED LIABILITIES is defined in SECTION 11.10(b).

         INDEMNITEES is defined in SECTION 11.10(b).

         INTEREST COVERAGE RATIO means, as of any date of determination thereof,
the ratio of (a) Consolidated EBITDA, plus net income of each Unrestricted
Subsidiary (without duplication and determined in accordance with GAAP) that is
earned and eligible for distribution, to (b) Consolidated Interest Expense, in
each case for the most-recent four (4) fiscal quarters ending on or prior to the
date of determination.

         INTEREST EXPENSE means, for any period of calculation thereof, for any
Person, the aggregate amount of all interest (including facility and utilization
fees) on all Debt of such Person, whether paid in cash or accrued as a liability
and payable in cash during such period, including (a) imputed interest on
Capitalized Lease Obligations, (b) the amortization of any original issue
discount on any Debt, (c) the interest portion of any deferred payment
obligation, (d) all commissions, discounts, and other fees and charges owed with
respect to letters of credit or bankers' acceptance financing, (e) net costs
associated with Financial Hedges, and (f) the interest component of any Debt
that is guaranteed or secured by such Person, and all cash premiums or penalties
for the repayment, redemption, or repurchase of Debt.

         INTEREST PERIOD is determined in accordance with SECTION 2.1(c)(ii).

         L/C CREDIT EXTENSION means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal,
amendment, or increase of the amount thereof.

         L/C ISSUERS means Bank of America, N.A., Bank One, NA, JPMorgan Chase
Bank, Suntrust Bank, BNP Paribas, Comerica Bank, and such other Lenders which
agree, at the request of Borrower and with the consent of Administrative Agent
(such consent not to be unreasonably withheld), to issue one or more Letters of
Credit pursuant to the terms and conditions of this Agreement, and L/C ISSUER
means any one of the L/C ISSUERS.

         L/C OBLIGATIONS means, as at any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts.

         LEGAL REQUIREMENTS means all applicable statutes, laws, treaties,
ordinances, tariff requirements, rules, regulations, orders, writs, injunctions,
decrees, judgments, opinions, or interpretations of any Governmental Authority.

         LENDERS means, on any date of determination, the financial institutions
named on SCHEDULE 2.1 (as the same may be amended from time to time by
Administrative Agent to reflect the admission of a Subsequent Lender in
accordance with SECTION 2.2(b) and assignments made in accordance with SECTION
13.13(b)), and subject to the terms and conditions of this Agreement, their
respective successors and assigns.

         LETTER OF CREDIT means any letter of credit issued hereunder. A Letter
of Credit hereunder shall be a standby or commercial letter of credit.

         LETTER OF CREDIT APPLICATION means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by each L/C Issuer.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       9


         LETTER OF CREDIT EXPIRATION DATE means August 5, 2005.

         LEVERAGE RATIO means, as of any date of determination thereof, the
ratio of (a) Consolidated Debt outstanding on such date minus Subordinated Debt
in an amount not to exceed $200,000,000, to (b) the sum of (i) Consolidated Debt
outstanding on such date, plus (ii) Consolidated Tangible Net Worth determined
in accordance with GAAP.

         LIEN means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind, and any other
Right of or arrangement with any creditor (other than under or relating to
subordination or other intercreditor arrangements) to have its claim satisfied
out of any property or assets, or the proceeds therefrom, prior to the general
creditors of the owner thereof.

         LITIGATION means any action by or before any Governmental Authority.

         LOAN DOCUMENTS means (a) this Agreement and the Notes, (b) the Letters
of Credit and Letter of Credit Applications, (c) all agreements, documents, or
instruments in favor of any Credit Party ever delivered by Borrower pursuant to
this Agreement or otherwise delivered in connection with all or any part of the
Obligation, and (d) any and all future renewals, extensions, restatements,
reaffirmations, or amendments of, or supplements to, all or any part of the
foregoing.

         MATERIAL ADVERSE EVENT means any set of one or more circumstances or
events which, individually or collectively, could reasonably be expected to
result in any (a) material impairment of the ability of Borrower to perform any
of its payment or other material obligations under the Loan Documents, (b)
material and adverse effect on the business, properties, condition (financial or
otherwise), or results of operations of the Companies (taken as a whole), (c)
material and adverse effect on the validity or enforceability of any of the Loan
Documents or the Rights of any Credit Party thereunder, or (d) Potential Default
or Event of Default. The term Material Adverse Event is used in this Agreement
to qualify certain of the representations, warranties, and covenants contained
herein, but is not, in and of itself, a condition precedent to any Borrowings
hereunder or an independent representation (except as provided in the last
sentence of SECTION 7.6), covenant, or Event of Default.

         MAXIMUM AMOUNT and MAXIMUM RATE respectively mean, for each Lender, the
maximum non-usurious amount and the maximum non-usurious rate of interest which,
under all Legal Requirements, such Lender is permitted to contract for, charge,
take, reserve, or receive on the Obligation.

         MOODY'S means Moody's Investors Service, Inc. and any successor
thereto.

         MOODY'S RATING means the most recently-announced rating from time to
time of Moody's assigned to any class of long-term senior, unsecured debt
securities issued by Borrower, as to which no letter of credit, guaranty, or
third-party credit support is in place, regardless of whether all or any part of
such Debt has been issued at the time such rating was issued.

         MULTIEMPLOYER PLAN means a multiemployer plan as defined in Section
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Tax Code to which any
Company or any ERISA Affiliate is making, or has made, or is accruing, or has
accrued, an obligation to make contributions.

         NET PROCEEDS means, with respect to any Equity Issuance by Borrower or
any Restricted Subsidiary, the amount of cash received by such Company in
connection with such transaction after deducting therefrom the aggregate,
without duplication, of the following amounts to the extent properly

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       10


attributable to such transaction: (a) reasonable brokerage commissions,
attorneys' fees, finder's fees, financial advisory fees, accounting fees,
underwriting fees, investment banking fees, and other similar commissions and
fees (and expenses and disbursements of any of the foregoing), in each case, to
the extent paid or payable by such Company; (b) printing and related expenses
and filing, recording, or registration fees or charges or similar fees or
charges paid by such Company; and (c) taxes paid or payable by such Company to
any Governmental Authority as a result of such transaction.

         NOTES means each promissory note substantially in the form of EXHIBIT
A, executed by Borrower, and all modifications, amendments, renewals,
extensions, and restatements of all or any part thereof, and NOTE means any one
of the Notes.

         NOTICE OF CONVERSION/CONTINUATION means a notice substantially in the
form of EXHIBIT C.

         OBLIGATION means all present and future indebtedness, liabilities, and
obligations, and all renewals and extensions thereof, or any part thereof, now
or hereafter owed to any Credit Party or any Affiliate of any Credit Party by
Borrower pursuant to any Loan Document, together with all interest accruing
thereon, fees, costs, and expenses (including all reasonable Attorney Costs
incurred in the enforcement or collection thereof) payable under the Loan
Documents.

         PARTICIPANT is defined in SECTION 13.13(d).

         PAYMENT OFFICE means Administrative Agent's office located at Dallas,
Texas or such other office as Administrative Agent shall notify Borrower and the
Credit Parties in writing.

         PBGC means the Pension Benefit Guaranty Corporation, or any successor
thereof, established pursuant to ERISA.

         PERMITTED LIENS means Liens permitted under SECTION 9.2 as described in
such SECTION.

         PERSON means any individual, entity, or Governmental Authority.

         POTENTIAL DEFAULT means the occurrence of any event or existence of any
circumstance which, with the giving of notice or lapse of time or both, would
become an Event of Default.

         PRIME RATE means, for any day, a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (0.5%), and (b) the per annum rate of interest in effect for such day as
publicly announced from time to time by Bank of America, N.A. as its prime rate,
which rate may not be the lowest rate of interest charged by Bank of America,
N.A. to its customers for such day. The "prime rate" is a rate set by Bank of
America, N.A. based upon various factors including its costs and desired return,
general economic conditions, and other factors, and it is used as a reference
point for pricing of some loans which may be priced at, above, or below such
announced rate. Any change in Bank of America N.A.'s "prime rate" or the Federal
Funds Rate shall be effective on the effective date of such change in the "prime
rate" or the Federal Funds Rate.

         PRIME RATE BORROWING means a Borrowing bearing interest at the sum of
the Prime Rate plus the Applicable Margin for Prime Rate Borrowings.

         PRINCIPAL DEBT means, for a Credit Party and at any time, the unpaid
principal balance of all outstanding Borrowings from such Credit Party hereunder
as of such date.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       11


         PRO RATA or PRO RATA PART, for each Lender, means (a) for purposes of
any commitment to participate in Letters of Credit and fund Borrowings in
respect of this Agreement, respectively, the percentage stated opposite such
Lender's name as set forth on SCHEDULE 2.1 or on the most recently amended
SCHEDULE 2.1, if any, prepared by Administrative Agent pursuant to SECTION 2.2
or SECTION 13.13, and (b) for all other purposes, the proportion which the
portion of the Principal Debt and L/C Obligations owed to such Lender (without
duplication, whether directly (net of participations sold to other Lenders) or
by participation) bears to the Total Outstandings at the time in question, or if
no Principal Debt or L/C Obligations are outstanding, then the proportion that
the aggregate of such Lender's Commitment bears to the Total Commitment then in
effect.

         QUARTERLY CONSOLIDATED NET INCOME means, for any fiscal quarter,
Consolidated Adjusted Net Income for such quarter; provided that if Consolidated
Adjusted Net Income for any quarter is less than $0, then Quarterly Consolidated
Net Income for such fiscal quarter shall be equal to $0.

         RECOURSE DEBT means all Debt of each Unrestricted Subsidiary on which
any Restricted Company is obligated, as a guarantor or otherwise.

         REGISTER is defined in SECTION 13.13(c).

         REGULATION D means Regulation D of the Board of Governors of the
Federal Reserve System, as amended.

         REGULATION U means Regulation U of the Board of Governors of the
Federal Reserve System, as amended.

         RELEASE means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the environment (including air, groundwater, surface water, soil, other
environmental media, or natural resources).

         REPAYMENT DATE is defined in SECTION 2.1(c)(vii).

         REPORTABLE EVENT shall have the meaning specified in Section 4043 of
ERISA or the regulations issued thereunder in connection with an Employee Plan,
excluding events for which the notice requirement is waived under applicable
PBGC regulations other than those events described in Sections 2615.11, 2615.15
and 2615.19 of such regulations, including each such provision as it may
subsequently be renumbered.

         REPRESENTATIVES means representatives, officers, directors, employees,
attorneys, and agents.

         REQUIRED LENDERS means (a) on any date of determination prior to
termination of the Total Commitment, those Lenders (other than Defaulting
Lenders) collectively holding more than fifty percent (50%) of the Total
Commitment (excluding the Commitments of any Defaulting Lenders), or (b) on any
date of determination occurring after the Total Commitment has terminated, those
Lenders collectively holding more than fifty percent (50%) of the Total
Outstandings (excluding the Principal Debt and L/C Obligations of any Defaulting
Lenders).

         RESERVE REQUIREMENT means, at any time, the maximum rate at which
reserves (including any marginal, special, supplemental, or emergency reserves)
are required to be maintained under regulations

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       12


issued from time to time by the Board of Governors of the Federal Reserve System
(or any successor) by member banks of the Federal Reserve System against
"Eurocurrency liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with respect to
(a) any category of liabilities which includes deposits by reference to which
the Adjusted Eurodollar Rate is to be determined, or (b) any category of
extensions of credit or other assets which include Eurodollar Borrowings. The
Adjusted Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.

         RESPONSIBLE OFFICER of Borrower means its chairman, vice chairman,
president, chief executive officer, chief financial officer, executive vice
president, senior vice president, or treasurer, or, for all purposes under the
Loan Documents, any other officer designated from time to time by the Board of
Directors or Executive Committee of the Board of Directors of Borrower, which
designated officer is acceptable to Administrative Agent.

         RESTRICTED COMPANY means Borrower and each Restricted Subsidiary.

         RESTRICTED SUBSIDIARY means each of Borrower's Subsidiaries, other than
Unrestricted Subsidiaries.

         RIGHTS means rights, remedies, powers, privileges, and benefits.

         SCHEDULE means, unless specified otherwise, a schedule attached to this
Agreement, as the same may be supplemented and modified from time to time in
accordance with the terms of the Loan Documents.

         SOLVENT means, as to a Person, that (a) the aggregate fair market value
of such Person's assets exceeds its liabilities (whether contingent,
subordinated, unmatured, unliquidated, or otherwise), (b) such Person has
sufficient cash flow to enable it to pay its Debts as they mature, and (c) such
Person does not have unreasonably small capital to conduct such Person's
businesses.

         S & P means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto.

         S & P RATING means the most recently-announced rating from time to time
of S & P assigned to any class of long-term senior, unsecured debt securities
issued by Borrower, as to which no letter of credit, guaranty, or third-party
credit support is in place, regardless of whether all or any part of such Debt
has been issued at the time such rating was issued.

         STOCK means all shares, options, warrants, general or limited
partnership interests, membership interests, or other ownership interests
(regardless of how designated) of or in a corporation, partnership, limited
liability company, trust, or other entity, whether voting or nonvoting,
including common stock, preferred stock, or any other similar "equity security"
(as such term is defined in Rule 3a11-1 of the General Rules and Regulations
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended).

         SUBORDINATED DEBT means any Debt of Borrower (a) subordinated to the
Obligation and including customary provisions regarding payment blockage,
payover, standstill, voting rights, and notices,

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       13


(b) which, as of the date of calculation, is not considered a "current
liability" in accordance with GAAP, and (c) which requires no payments of
principal until its maturity.

         SUBSEQUENT LENDER is defined in SECTION 2.2(b).

         SUBSIDIARY means, in respect of any Person (herein referred to as the
"PARENT"), any corporation, partnership, limited liability company, association,
or other business entity (a) of which Stock representing more than fifty percent
(50%) of the equity or more than fifty percent (50%) of the ordinary voting
power or more than fifty percent (50%) of the general partnership interests are,
at the time any determination is being made, owned, Controlled, or held, or (b)
which is, at the time any determination is made, otherwise Controlled, by the
Parent or one or more Subsidiaries of the Parent or by the Parent and one or
more Subsidiaries of the Parent; provided that ownership by Borrower or its
Subsidiaries of more than fifty percent (50%) of the limited partnership
interests in Centex Development Company, L.P. shall not, by itself, result in
such company being deemed a Subsidiary of Borrower. "CONTROL" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of Stock, by contract, or otherwise, and "CONTROLLING" and
"CONTROLLED" shall have meanings correlative thereto.

         TANGIBLE NET WORTH means, for any Person as of any date of
determination, the consolidated net worth of such Person determined in
accordance with GAAP, less (without duplication), the sum of the following: (a)
all intangibles determined in accordance with GAAP (including, without
limitation, goodwill and deferred or capitalized acquisition costs), (b) all
minority interests in any Subsidiary of such Person, (c) unamortized Debt
discount and expense, (d) any non-cash gain (or plus any non-cash loss, as
applicable) resulting from any mark-to-market adjustments made directly to
consolidated net worth as a result of fluctuations in the value of financial
instruments owned by Borrower or any of its Subsidiaries as mandated under FAS
133, and (e) all reserves (except contingency reserves not allocated to specific
purposes and not deducted from assets, which are properly treated as
appropriations of surplus or retained earnings) and any write-up in book value
of assets resulting from a revaluation of such asset subsequent to March 31,
2003.

         TAX CODE means the Internal Revenue Code of 1986, as amended, together
with the rules and regulations promulgated thereunder.

         TAXES means, for any Person, taxes, assessments, duties, levies,
imposts, deductions, charges, or withholdings, or other governmental charges or
levies imposed upon such Person, its income, or any of its properties,
franchises, or assets.

         TERMINATION DATE means the earlier of (a) August 5, 2004, and (b) the
effective date of any other termination or cancellation of all of Lenders'
Commitments to make Credit Extensions under, and in accordance with, this
Agreement.

         TOTAL COMMITMENT means, on any date of determination, the sum of all
Commitments for all Lenders (as the same may have been reduced, increased, or
canceled in accordance with this Agreement) then in effect.

         TOTAL OUTSTANDINGS means the amount of Total Principal Debt plus
(without duplication) the outstanding amount of L/C Obligations.

         TOTAL PRINCIPAL DEBT means, at any time, the sum of the Principal Debt
of all Lenders.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       14


         TYPE means any type of Borrowing determined with respect to the
interest option applicable thereto.

         UNREIMBURSED AMOUNT has the meaning set forth in SECTION 2.1(c)(i).

         UNRESTRICTED SUBSIDIARY means any Subsidiary (a) that is designated as
an Unrestricted Subsidiary on the Closing Date and listed on SCHEDULE 7.3, or
(b) as otherwise designated in a writing delivered to Administrative Agent and
meeting the requirements set forth in SECTION 8.12.

         WHOLLY-OWNED when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of Stock (except
shares required as directors' qualifying shares) shall be owned by Borrower or
one or more of its Wholly-owned Subsidiaries.

         1.2      NUMBER AND GENDER OF WORDS; OTHER REFERENCES. Unless otherwise
specified in the Loan Documents, (a) where appropriate, the singular includes
the plural and vice versa, and words of any gender include each other gender,
(b) heading and caption references may not be construed in interpreting
provisions, (c) monetary references are to currency of the United States of
America, (d) section, paragraph, annex, schedule, exhibit, and similar
references are to the particular Loan Document in which they are used, (e)
references to "telecopy," "facsimile," "fax," or similar terms are to facsimile
or telecopy transmissions, (f) references to "including" mean including without
limiting the generality of any description preceding that word, (g) the rule of
construction that references to general items that follow references to specific
items are limited to the same type or character of those specific items is not
applicable in the Loan Documents, (h) references to any Person include that
Person's heirs, personal representatives, successors, trustees, receivers, and
permitted assigns, (i) references to any Legal Requirement include every
amendment or supplement to it, rule and regulation adopted under it, and
successor or replacement for it, and (j) references to any Loan Document or
other document include every renewal and extension of it, amendment and
supplement to it, and replacement or substitution for it.

         1.3      ACCOUNTING PRINCIPLES. All accounting and financial terms used
in the Loan Documents and the compliance with each financial covenant therein
shall be determined in accordance with GAAP, and all accounting principles shall
be applied on a consistent basis so that the accounting principles in a current
period are comparable in all material respects to those applied during the
preceding comparable period. If Borrower or any Credit Party determines that a
change in GAAP from that in effect on the date hereof has altered the treatment
of certain financial data to its detriment under this Agreement, then such party
may, by written notice to the others and Administrative Agent not later than ten
(10) days after the effective date of such change in GAAP, request renegotiation
of the financial covenants affected by such change. If Borrower and Required
Lenders have not agreed on revised covenants within thirty (30) days after
delivery of such notice, then, for purposes of this Agreement, GAAP will mean
generally accepted accounting principles without giving effect to the change
that gave rise to the renegotiation.

         1.4      TIME REFERENCES. Unless otherwise specified in the Loan
Documents (a) time references are to time in Chicago, Illinois, and (b) in
calculating a period from one date to another, the word "from" means "from and
including" and the word "to" or "until" means "to but excluding."

SECTION 2 CREDIT EXTENSION PROVISIONS.

         2.1 LETTERS OF CREDIT.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       15


         (a)      THE LETTER OF CREDIT COMMITMENT.

                  (i)      Subject to the terms and conditions set forth herein,
         (A) each L/C Issuer agrees, in reliance upon the agreements of the
         other Lenders set forth in this SECTION 2.1, (x) from time to time on
         any Business Day during the period from the Closing Date until the
         Termination Date, to issue Letters of Credit for the account of
         Borrower or for the account of Borrower and one or more Subsidiaries
         (provided that the issuance of a Letter of Credit for the account of a
         Subsidiary of Borrower shall not relieve Borrower of any of its
         obligations under this Agreement), and to amend (which may include
         renewals, extensions, or increases in a Letter of Credit) Letters of
         Credit previously issued by it, in accordance with SECTION 2.1(b); (y)
         from time to time on any Business Day during the period from the
         Termination Date until the Business Day immediately prior to the Letter
         of Credit Expiration Date, to amend Letters of Credit previously issued
         by it in accordance with SECTION 2.1(b); provided that no such
         amendment shall renew, extend, or increase any such Letter of Credit;
         and (z) at any time, in accordance with the terms of the Letters of
         Credit, to honor drafts under the Letters of Credit; provided that no
         L/C Issuer shall be obligated to make any L/C Credit Extension with
         respect to any Letter of Credit if the Total Outstandings would exceed
         the Total Commitment; and (B) Lenders severally agree to participate in
         Letters of Credit issued for the account of Borrower or for the account
         of Borrower and one or more Subsidiaries; provided that no Lender shall
         be obligated to participate in any Letter of Credit if as of the date
         of such L/C Credit Extension, any Lender's Pro Rata Part of the Total
         Outstandings would exceed such Lender's Commitment. Within the
         foregoing limits, and subject to the terms and conditions hereof,
         Borrower's ability to obtain Letters of Credit shall be fully
         revolving, and accordingly Borrower may, during the foregoing period,
         obtain Letters of Credit to replace Letters of Credit that have expired
         or been canceled or that have been drawn upon and reimbursed. All
         Existing Letters of Credit shall be deemed to have been issued pursuant
         hereto, and from and after the Closing Date shall be subject to and
         governed by the terms and conditions hereof.

                  (ii)     No L/C Issuer shall issue any Letter of Credit if:

                           (A)      any order, judgment, or decree of any
                                    Governmental Authority with jurisdiction
                                    over such L/C Issuer shall by its terms
                                    purport to enjoin or restrain such L/C
                                    Issuer from issuing such Letter of Credit,
                                    or any Legal Requirement applicable to such
                                    L/C Issuer or any request or directive
                                    (whether or not having the force of law)
                                    from any Governmental Authority with
                                    jurisdiction over such L/C Issuer shall
                                    prohibit, or request that such L/C Issuer
                                    refrain from, the issuance of letters of
                                    credit generally or such Letter of Credit in
                                    particular or shall impose upon such L/C
                                    Issuer with respect to such Letter of Credit
                                    any restriction, reserve, or capital
                                    requirement (for which such L/C Issuer is
                                    not otherwise compensated hereunder) not in
                                    effect on the Closing Date, or shall impose
                                    upon such L/C Issuer any unreimbursed loss,
                                    cost, or expense which was not applicable on
                                    the Closing Date and which such L/C Issuer
                                    in good faith deems material to it;

                           (B)      except for the applicable Existing Letters
                                    of Credit and Letters of Credit issued after
                                    the Closing Date in an aggregate maximum
                                    available amount that does not exceed
                                    $2,000,000 at any time, the expiry date of
                                    such

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       16


                                    requested Letter of Credit would occur more
                                    than twelve (12) months after the date of
                                    issuance, unless the Required Lenders have
                                    approved such expiry date;

                           (C)      the issuance of such Letter of Credit would
                                    violate one or more policies of such L/C
                                    Issuer with respect to the issuance of
                                    letters of credit generally; or

                           (D)      such Letter of Credit is in an initial
                                    amount less than $10,000 (unless otherwise
                                    agreed to by Administrative Agent and the
                                    L/C Issuer) or is to be used for a purpose
                                    other than general corporate needs including
                                    insurance bonding requirements or
                                    denominated in a currency other than
                                    Dollars.

                  (iii) No L/C Issuer shall be obligated to amend (which may
         include renewals, extensions, or increases in a Letter of Credit) any
         Letter of Credit if (A) such L/C Issuer would have no obligation at
         such time to issue such Letter of Credit in its amended form under the
         terms hereof, or (B) the beneficiary of such Letter of Credit does not
         accept the proposed amendment to such Letter of Credit.

         (b)      PROCEDURES FOR ISSUANCE AND AMENDMENT OF LETTERS OF CREDIT.

                  (i)      Each Letter of Credit shall be issued or amended, as
         the case may be, upon the request of Borrower delivered to an L/C
         Issuer (with a copy to Administrative Agent) in the form of a Letter of
         Credit Application, appropriately completed and signed by a Responsible
         Officer of Borrower. Such Letter of Credit Application must be received
         by an L/C Issuer and Administrative Agent not later than 11:00 a.m. at
         least five (5) Business Days (or such later date and time as such L/C
         Issuer may agree in a particular instance in its sole discretion) prior
         to the proposed issuance date or date of amendment, as the case may be.
         In the case of a request for an initial issuance of a Letter of Credit,
         such Letter of Credit Application shall specify in form and detail
         reasonably satisfactory to such L/C Issuer: (A) the proposed issuance
         date of the requested Letter of Credit (which shall be a Business Day);
         (B) the amount thereof; (C) the expiry date thereof; (D) the name and
         address of the beneficiary thereof; (E) the documents to be presented
         by such beneficiary in case of any drawing thereunder; (F) the full
         text of any certificate to be presented by such beneficiary in case of
         any drawing thereunder; (G) the name and address of any Subsidiary that
         is an account party along with Borrower; and (H) such other matters as
         such L/C Issuer may reasonably require. In the case of a request for an
         amendment of any outstanding Letter of Credit, such Letter of Credit
         Application shall specify in form and detail reasonably satisfactory to
         the applicable L/C Issuer: (A) the Letter of Credit to be amended; (B)
         the proposed date of amendment thereof (which shall be a Business Day);
         (C) the nature of the proposed amendment; and (D) such other matters as
         such L/C Issuer may reasonably require.

                  (ii)     Promptly after receipt of any Letter of Credit
         Application, the L/C Issuer will confirm with Administrative Agent (by
         telephone or in writing) that Administrative Agent has received a copy
         of such Letter of Credit Application from Borrower and, if not, the L/C
         Issuer will provide Administrative Agent with a copy thereof. Upon
         receipt by such L/C Issuer of confirmation from Administrative Agent
         that the requested issuance or amendment is permitted in accordance
         with the terms hereof, then, subject to the terms and conditions
         hereof, such L/C Issuer shall, on the requested date, issue a Letter of
         Credit for the account of Borrower or

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       17


         Borrower and the specified Subsidiary or enter into the applicable
         amendment, as the case may be, in each case in accordance with such L/C
         Issuer's usual and customary business practices. If, prior to the
         issuance of a Letter of Credit, the applicable L/C Issuer receives a
         request from Borrower to review the Letter of Credit to be issued, such
         L/C Issuer shall send a copy of such proposed Letter of Credit to
         Borrower for review. Immediately upon the issuance of each Letter of
         Credit, each Lender shall be deemed to, and hereby irrevocably and
         unconditionally agrees to, purchase from such L/C Issuer a risk
         participation in such Letter of Credit in an amount equal to the
         product of such Lender's Pro Rata Part times the amount of such Letter
         of Credit.

                  (iii)    If Borrower so requests in any applicable Letter of
         Credit Application, the applicable L/C Issuer may, in its sole and
         absolute discretion, agree to issue a Letter of Credit that has
         automatic renewal provisions (each, an "AUTO-RENEWAL LETTER OF
         CREDIT"); provided that any such Auto-Renewal Letter of Credit must
         permit such L/C Issuer to prevent any such renewal at least once in
         each twelve-month period (commencing with the date of issuance of such
         Letter by Credit) by giving prior notice to the beneficiary thereof not
         later than a day (the "NONRENEWAL NOTICE DATE") in each such
         twelve-month period to be agreed upon at the time such Letter of Credit
         is issued. Unless otherwise directed in writing by such L/C Issuer, the
         Borrower shall not be required to make a specific request to such L/C
         Issuer for any such renewal. Once an Auto-Renewal Letter of Credit has
         been issued, the Lenders shall be deemed to have authorized (but may
         not require) such L/C Issuer to permit the renewal of such Letter of
         Credit at any time to an expiry date not later than the Letter of
         Credit Expiration Date; provided, however, that such L/C Issuer shall
         not permit any such renewal if (A) such L/C Issuer has determined that
         it could not at such time issue such Letter of Credit in its renewed
         form under the terms hereof (by reason of the provisions of SECTION
         2.1(a)(ii) or otherwise), or (B) it has received notice (which may be
         by telephone or in writing) on or before the day that is two Business
         Days before the Nonrenewal Notice Date (1) from the Administrative
         Agent that the Required Lenders have elected not to permit such renewal
         or (2) from the Administrative Agent, any Lender or the Borrower that
         one or more of the applicable conditions specified in SECTION 6.2 is
         not then satisfied.

                  (iv)     Promptly after its delivery of any Letter of Credit
         or any amendment to a Letter of Credit to an advising bank with respect
         thereto or to the beneficiary thereof, the L/C Issuer will also deliver
         to Borrower and Administrative Agent a true and complete copy of such
         Letter of Credit or amendment.

         (c)      DRAWINGS AND REIMBURSEMENTS; FUNDING OF PARTICIPATIONS.

                  (i)      Upon receipt from the beneficiary of any Letter of
         Credit of any notice of a drawing under such Letter of Credit, the
         applicable L/C Issuer shall promptly notify Borrower and Administrative
         Agent thereof. Not later than 11:00 a.m. on the date of any payment by
         any L/C Issuer under a Letter of Credit (each such date, an "HONOR
         DATE"), Borrower shall reimburse such L/C Issuer through Administrative
         Agent in an amount equal to the amount of such drawing (prior to any
         conversion into a Borrowing, the "UNREIMBURSED AMOUNT"); provided that
         if the Honor Date for such Letter of Credit occurs prior to the
         Termination Date, then, unless Borrower reimburses L/C Issuer through
         Administrative Agent in respect of such drawing prior to 11:00 a.m. on
         such Honor Date, such Unreimbursed Amount shall automatically convert
         into a Prime Rate Borrowing or, if Borrower has so elected pursuant to
         and in accordance with SECTION 2.1(c)(ii) and so long as no Event of
         Default exists, into a Eurodollar Borrowing.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       18


                  (ii)     Borrower may, upon irrevocable notice to L/C Issuer
         and Administrative Agent in accordance with SECTION 2.1(c)(iii), (A)
         elect, as of any Business Day, to convert any Prime Rate Borrowing (or
         Unreimbursed Amount if such Business Day occurs prior to the
         Termination Date) into a Eurodollar Borrowing or (B) elect, as of the
         last day of any Interest Period having a duration of fourteen (14)
         days, (x) to continue Eurodollar Borrowings having Interest Periods
         expiring on such day as Eurodollar Borrowings having Interest Periods
         of fourteen (14) days, or (y) to convert Eurodollar Borrowings having
         Interest Periods expiring on such day into Prime Rate Borrowings. When
         Borrower requests to convert any Unreimbursed Amount or Prime Rate
         Borrowing into a Eurodollar Borrowing, Borrower may elect the interest
         period (each an "INTEREST PERIOD") applicable thereto, which shall be,
         at Borrower's option, fourteen (14) days or one (1) month in each case
         to the extent available from each Lender; provided, however, that: (a)
         the initial Interest Period for a Eurodollar Borrowing shall commence
         on the date of such Borrowing (including the date of any Conversion
         thereto), and each Interest Period occurring thereafter in respect of
         such Borrowing shall commence on the day on which the next preceding
         Interest Period applicable thereto expires; (b) if any Interest Period
         for a Eurodollar Borrowing begins on a day for which there is no
         numerically corresponding Business Day in the calendar month at the end
         of such Interest Period, then such Interest Period shall end on the
         next Business Day immediately following what otherwise would have been
         such numerically corresponding day in the calendar month at the end of
         such Interest Period (unless such date would be in a different calendar
         month from what would have been the month at the end of such Interest
         Period, or unless there is no numerically corresponding day in the
         calendar month at the end of the Interest Period; whereupon, such
         Interest Period shall end on the last Business Day in the calendar
         month at the end of such Interest Period); (c) no Interest Period may
         be chosen with respect to any portion of any Borrowing which would
         extend beyond the scheduled repayment date (including any dates on
         which mandatory prepayments are required to be made) for such portion
         of the Total Principal Debt.

                  (iii)    Borrower shall deliver a Notice of
         Conversion/Continuation to be received by L/C Issuer and Administrative
         Agent not later than 11:00 a.m. at least three (3) Business Days in
         advance of the Conversion/Continuation Date, specifying:

                  (A)      the proposed Conversion/Continuation Date;

                  (B)      the type of Borrowing resulting from the proposed
                           conversion or continuation; and

                  (C)      other than in the case of conversions into Prime Rate
                           Borrowings, the duration of the requested Interest
                           Period.

         Upon receipt of a Notice of Conversion/Continuation, Administrative
         Agent shall promptly notify each Lender of the contents thereof and
         such notice shall not thereafter be revocable by Borrower.

                  (iv)     If upon the expiration of any Interest Period
         Borrower has failed to continue the Eurodollar Borrowings having
         Interest Periods then expiring, Borrower shall be deemed to have
         elected to convert such Eurodollar Borrowings into Prime Rate
         Borrowings effective as of the expiration date of such Interest Period.

                  (v)      Each Borrowing shall bear interest on the outstanding
         principal amount thereof from the date of such Borrowing until the date
         repaid at a rate per annum equal to the Adjusted Eurodollar Rate or the
         Prime Rate, as the case may be (and subject to Borrower's

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       19


         right to convert to the other type of Borrowing under this SECTION
         2.1(c)), plus the Applicable Margin. Notwithstanding the foregoing,
         after the Termination Date any Unreimbursed Amounts shall bear interest
         at the Default Rate. Interest on each Borrowing shall be paid in
         arrears on the Repayment Date.

                  (vi)     Borrower may, subject to SECTION 2.1(c)(viii) and
         upon at least one (1) Business Day's notice to Administrative Agent,
         prepay any Borrowing in whole or in part by prepaying the principal
         amount to be prepaid together with accrued interest thereon to the date
         of prepayment plus any amounts owing pursuant to SECTION 4.5.

                  (vii)    All Borrowings resulting from an Unreimbursed Amount
         shall be due and payable on the thirty-first (31st) day after the date
         the Unreimbursed Amount is converted into a Borrowing (or, if such day
         is not a Business Day, on the first (1st) Business Day succeeding such
         day) (the "REPAYMENT DATE").

                  (viii)   If Borrower prepays any Eurodollar Borrowings on any
         day other than the last day of an Interest Period applicable thereto,
         or if any Unreimbursed Amount or Prime Rate Borrowing is not converted
         or continued into an Eurodollar Borrowing after notice has been given
         to Administrative Agent in accordance with SECTION 2.1(c)(iii),
         Borrower shall reimburse each Lender for any amounts owing pursuant to
         SECTION 4.5.

                  (ix)     If Borrower fails to reimburse the applicable L/C
         Issuer on any Honor Date, then Administrative Agent shall, upon notice
         from the applicable L/C Issuer, notify each Lender of the Honor Date,
         the Unreimbursed Amount, whether the Unreimbursed Amount has been
         converted into a Prime Rate Borrowing or Eurodollar Borrowing, and such
         Lender's Pro Rata Part of such Unreimbursed Amount or Borrowing. Each
         Lender (including the Lender acting as L/C Issuer) shall upon any such
         notice make funds available to Administrative Agent for the account of
         the applicable L/C Issuer at the Applicable Lending Office of
         Administrative Agent in an amount equal to its Pro Rata Part of such
         Unreimbursed Amount or Borrowing not later than 1:00 p.m. on the
         Business Day specified in such notice by Administrative Agent.
         Administrative Agent shall remit the funds so received to the
         applicable L/C Issuer.

                  (x)      Until each Lender funds its participation or Pro Rata
         Part of a Borrowing pursuant to SECTION 2.1(c)(ix) to reimburse the
         applicable L/C Issuer for any amount drawn under any Letter of Credit,
         interest in respect of such Lender's Pro Rata Part of such amount shall
         be solely for the account of such L/C Issuer.

                  (xi)     Each Lender's obligation to fund participations or
         Borrowings to reimburse each L/C Issuer for amounts drawn under Letters
         of Credit issued in accordance with this Agreement, as contemplated by
         this SECTION 2.1(c), shall be absolute and unconditional and shall not
         be affected by any circumstance, including (A) any set-off,
         counterclaim, recoupment, defense, or other right which such Lender may
         have against an L/C Issuer, Borrower, or any other Person for any
         reason whatsoever, (B) the occurrence or continuance of an Event of
         Default or Potential Default, or (C) any other occurrence, event, or
         condition, whether or not similar to any of the foregoing.

                  (xii)    If any Lender fails to make available to
         Administrative Agent for the account of an L/C Issuer any amount
         required to be paid by such Lender pursuant to the foregoing provisions
         of this SECTION 2.1(c) by the time specified in SECTION 2.1(c)(ix),
         such L/C Issuer shall be entitled

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       20


         to recover from such Lender (acting through Administrative Agent), on
         demand, such amount with interest thereon for the period from the date
         such payment is required to the date on which such payment is
         immediately available to such L/C Issuer at a rate per annum equal to
         the Federal Funds Rate from time to time in effect. A certificate of an
         L/C Issuer submitted to any Lender (through Administrative Agent) with
         respect to any amounts owing under this SECTION 2.1(c)(xii) shall be
         conclusive absent manifest error.

         (d)      REPAYMENT OF PARTICIPATIONS OR BORROWINGS.

                  (i)      At any time after an L/C Issuer has made a payment
         under any Letter of Credit and has received from any Lender such
         Lender's funding of its participation in an Unreimbursed Amount or Pro
         Rata Part of a Borrowing as a result of such payment in accordance with
         SECTION 2.1(c), if Administrative Agent receives for the account of
         such L/C Issuer any payment in respect of the related Unreimbursed
         Amount or Borrowing or interest thereon (whether directly from Borrower
         or otherwise) Administrative Agent will distribute to such Lender its
         Pro Rata Part thereof in the same funds as those received by
         Administrative Agent.

                  (ii)     If any payment received by Administrative Agent for
         the account of an L/C Issuer pursuant to SECTION 2.1(c)(i) is required
         to be returned under any of the circumstances described in SECTION
         13.14 (including pursuant to any settlement entered into by an L/C
         Issuer in its discretion), each Lender shall pay to Administrative
         Agent for the account of such L/C Issuer its Pro Rata Part thereof on
         demand of Administrative Agent, plus interest thereon from the date of
         such demand to the date such amount is returned by such Lender, at a
         rate per annum equal to the Federal Funds Rate from time to time in
         effect.

         (e)      OBLIGATIONS ABSOLUTE. The obligation of Borrower to reimburse
an L/C Issuer for each drawing under each Letter of Credit and to repay each
Borrowing shall be absolute, unconditional, and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:

                  (i)      any lack of validity or enforceability of such Letter
         of Credit, this Agreement, or any other agreement or instrument
         relating thereto;

                  (ii)     the existence of any claim, counterclaim, set-off,
         defense, or other right that Borrower may have at any time against any
         beneficiary or any transferee of such Letter of Credit (or any Person
         for whom any such beneficiary or any such transferee may be acting),
         any L/C Issuer or any other Person, whether in connection with this
         Agreement, the transactions contemplated hereby, or by such Letter of
         Credit or any agreement or instrument relating thereto, or any
         unrelated transaction;

                  (iii)    any draft, demand, certificate, or other document
         presented under such Letter of Credit proving to be forged, fraudulent,
         invalid, or insufficient in any respect or any statement therein being
         untrue or inaccurate in any respect; or any loss or delay in the
         transmission or otherwise of any document required in order to make a
         drawing under such Letter of Credit;

                  (iv)     any payment by any L/C Issuer under such Letter of
         Credit against presentation of a draft or certificate that does not
         strictly comply with the terms of such Letter of Credit; or any payment
         made by any L/C Issuer under such Letter of Credit to any Person
         purporting to be a trustee in bankruptcy, debtor-in-possession,
         assignee for the benefit of creditors, liquidator,

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       21


         receiver, or other representative of or successor to any beneficiary or
         any transferee of such Letter of Credit, including any arising in
         connection with any proceeding under any Debtor Relief Law; or

                  (v)      any other circumstance or happening whatsoever,
         whether or not similar to any of the foregoing, including any other
         circumstance that might otherwise constitute a defense available to, or
         a discharge of, Borrower.

Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with Borrower's instructions or other irregularity, Borrower will
promptly notify the applicable L/C Issuer. Borrower shall be conclusively deemed
to have waived any such claim against each L/C Issuer and their correspondents
unless such notice is given as aforesaid.

         (f)      ROLE OF L/C ISSUER. Each Lender and Borrower agree that, in
paying any drawing under a Letter of Credit, no L/C Issuer shall have any
responsibility to obtain any document (other than any sight draft, certificates,
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. No L/C Issuer,
Agent-Related Person, or any of the respective correspondents, participants, or
assignees of any L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable, (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct, or (iii) the
due execution, effectiveness, validity, or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application.
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude Borrower's
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. No L/C Issuer, Agent-Related
Person, or any of the respective correspondents, participants, or assignees of
any L/C Issuer, shall be liable or responsible for any of the matters described
in SECTIONS 2.01(e)(i) THROUGH (v); provided, however, that anything in such
clauses or elsewhere in this Agreement or any other Loan Document to the
contrary notwithstanding, Borrower may have a claim against an L/C Issuer, and
an L/C Issuer may be liable to Borrower, to the extent, but only to the extent,
of any direct, as opposed to consequential or exemplary, damages suffered by
Borrower which Borrower proves were caused by such L/C Issuer's willful
misconduct, bad faith, or gross negligence or such L/C Issuer's willful failure
to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, each L/C Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and no L/C Issuer shall be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.

         (g)      APPLICABILITY OF ISP98 AND UCP. Unless otherwise expressly
agreed by any L/C Issuer and Borrower when a Letter of Credit is issued, (i) the
rules of the "International Standby Practices 1998" published by the Institute
of International Banking Law & Practice (or such later version thereof as may be
in effect at the time of issuance) shall apply to each standby Letter of Credit,
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the "ICC")
at the time of issuance (including the ICC decision

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       22


published by the Commission on Banking Technique and Practice on April 6, 1998
regarding the European single currency (euro)) shall apply to each commercial
Letter of Credit.

         (h)      CONFLICT WITH LETTER OF CREDIT APPLICATION. In the event of
any conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.

         (i)      CASH COLLATERAL. If, as of the Letter of Credit Expiration
Date, any Letter of Credit may for any reason remain outstanding and partially
or wholly undrawn, Borrower shall immediately Cash Collateralize the
then-undrawn amount of all outstanding Letters of Credit (in an amount equal to
such outstanding amount determined as of the Letter of Credit Expiration Date).
For purposes hereof, "CASH COLLATERALIZE" means to pledge and deposit with or
deliver to Administrative Agent, for the benefit of each L/C Issuer and the
Lenders, as collateral for the undrawn amount of all outstanding Letters of
Credit, cash or deposit account balances pursuant to documentation in form and
substance satisfactory to Administrative Agent and each L/C Issuer (which
documents are hereby consented to by the Lenders). Derivatives of such term have
corresponding meanings. Effective as of the time Borrower is required under this
SECTION 2.1(i) or any other provision of this Agreement or the Loan Documents to
Cash Collateralize the then-undrawn amount of all outstanding Letters of Credit,
Borrower hereby grants to Administrative Agent, for the benefit of each L/C
Issuer and the Lenders, a security interest in all such cash, deposit accounts
and all balances therein and all proceeds of the foregoing in an amount equal to
such undrawn amount of outstanding Letters of Credit. Cash collateral shall be
maintained in blocked, non-interest bearing deposit accounts at Administrative
Agent. Cash collateral shall be released from such Lien as and to the extent
that Letters of Credit expire or terminate or are drawn upon and reimbursed.

         (j)      L/C ISSUER REPORTING REQUIREMENTS. Each L/C Issuer shall, no
later than the third (3rd) Business Day following the last day of each month,
provide to Administrative Agent a schedule of the Letters of Credit issued by
it, in form and substance reasonably satisfactory to Administrative Agent,
showing the date of issuance of each Letter of Credit, the account party, the
original face amount (if any), the expiration date, and the reference number of
any Letter of Credit outstanding at any time during such month, and showing the
aggregate amount (if any) payable by Borrower to such L/C Issuer during the such
month pursuant to SECTION 5.4. Promptly after the receipt of such schedule from
each L/C Issuer, Administrative Agent shall provide to Lenders a summary of such
schedules.

         2.2      LENDERS; INCREASE IN TOTAL COMMITMENT.

         (a)      The Lenders on the Closing Date shall be the Lenders set forth
on SCHEDULE 2.1 on the Closing Date.

         (b)      At any time after the Closing Date through April 7, 2004,
Administrative Agent may, from time to time at the request of Borrower, increase
the Total Commitment by (i) admitting additional Lenders hereunder (each a
"SUBSEQUENT LENDER"), or (ii) increasing the Commitment of any Lender (each an
"INCREASING LENDER"), subject to the following conditions:

                  (A)      each Subsequent Lender is an Eligible Assignee;

                  (B)      each Subsequent Lender executes and delivers to
                           Administrative Agent a signature page to this
                           Agreement;

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                                       23


                  (C)      after giving effect to the admission of any
                           Subsequent Lender or the increase in the Commitment
                           of any Increasing Lender, the Total Commitment does
                           not exceed $350,000,000;

                  (D)      each increase in the Total Commitment shall be in the
                           amount of $10,000,000 or a greater integral multiple
                           of $500,000;

                  (E)      no admission of any Subsequent Lender shall increase
                           the Commitment of any existing Lender without the
                           written consent of such Lender;

                  (F)      no Potential Default or Event of Default exists;

                  (G)      no Lender shall be an Increasing Lender without the
                           written consent of such Lender; and

                  (H)      the amount of all increases in the Total Commitment
                           pursuant to this SECTION 2.2 shall not exceed
                           $100,000,000 in the aggregate.

After the admission of any Subsequent Lender or the increase in the Commitment
of any Increasing Lender, Administrative Agent shall promptly provide to each
Lender and to Borrower a new SCHEDULE 2.1 to this Agreement. In the event that
there are any Unreimbursed Amounts or Borrowings outstanding after giving effect
to an increase in the Total Commitment pursuant to this SECTION 2.2, upon notice
from Administrative Agent to Lenders, the amount of such Unreimbursed Amounts or
Borrowings owing to each Lender shall be appropriately adjusted to reflect the
new Pro Rata Parts of Lenders, and Borrower shall pay any Consequential Losses
associated therewith pursuant to SECTION 4.5.

         2.3      VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. Without
premium or penalty, and upon giving not less than ten (10) Business Days prior
written and irrevocable notice to Administrative Agent, Borrower may permanently
terminate in whole or in part the Total Commitment; provided that: (a) each
partial termination shall be in the amount of $5,000,000 or a greater integral
multiple of $1,000,000; (b) the amount of the Total Commitment may not be
reduced below the Total Outstandings; and (c) each reduction shall be allocated
Pro Rata among Lenders in accordance with their respective Pro Rata Parts.
Promptly after receipt of such notice of termination or reduction,
Administrative Agent shall notify each Lender of the proposed termination or
reduction. Such termination or partial reduction of the Total Commitment shall
be effective on the Business Day specified in Borrower's notice (which date must
be at least ten (10) Business Days after Borrower's delivery of such notice). In
the event that the Total Commitment is reduced to zero and there are no
outstanding Obligations, this Agreement shall be terminated to the extent
specified in SECTION 13.14, and all Letter of Credit fees and other fees then
earned and unpaid hereunder and all other amounts of the Obligation then due and
owing shall be immediately due and payable, without notice or demand by any
Credit Party.

SECTION 3 TERMS OF PAYMENT.

         3.1      NOTES AND PAYMENTS.

         (a)      NOTES. The Credit Extensions made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
Administrative Agent in the ordinary course of business. The accounts or records
maintained by Administrative Agent and each Lender shall be conclusive absent
manifest error of the amount of the Credit Extensions made by such Lender and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of
Borrower hereunder to pay any amount owing with respect to the Obligation. In
the event of any conflict between the accounts and records maintained by any
Lender and

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       24


the accounts and records of Administrative Agent in respect of such matters, the
accounts and records of Administrative Agent shall control in the absence of
manifest error. Upon the request of any Lender made through Administrative
Agent, Borrower shall execute and deliver to such Lender (through Administrative
Agent) a Note, which shall evidence the Borrowings from such Lender in addition
to such accounts or records. Each Lender may attach schedules to its Note and
endorse thereon the date, Type (if applicable), amount and maturity of
Borrowings and payments with respect thereto.

         (b)      PAYMENTS. Each payment or prepayment on the Obligation is due
and must be paid by Borrower to Administrative Agent at its Payment Office in
Dollars and in immediately available funds, without set-off, deduction, defense,
recoupment, or counterclaim, by 11:00 a.m. on the day due. Payments made after
11:00 a.m. shall be deemed made on the Business Day next following. If any
payment or prepayment on the Obligation is stated to be due on a day that is not
a Business Day, such payment shall be due on the next following Business Day,
and, to the extent applicable, interest and fees shall continue to accrue until
such payment or prepayment is actually made. Administrative Agent shall pay to
each Lender any payment or prepayment to which such Lender is entitled hereunder
on the same day Administrative Agent shall have received the same from Borrower;
provided that such payment or prepayment is received by Administrative Agent
prior to 11:00 a.m., and otherwise before 11:00 a.m. on the Business Day next
following. If and to the extent Administrative Agent shall not make such
payments to Lenders when due as set forth in the preceding sentence, then such
unpaid amounts shall accrue interest, payable by Administrative Agent, at the
Federal Funds Rate from the due date until (but not including) the date on which
Administrative Agent makes such payments to Lenders.

         3.2      MANDATORY PAYMENTS.

         (a)      Each Borrowing is due and payable on the Repayment Date for
such Borrowing.

         (b)      On any date of determination, if the Total Outstandings exceed
the Total Commitment, then Borrower shall either prepay the Principal Debt
and/or Cash Collateralize or cause to be canceled the undrawn amount of
outstanding Letters of Credit in at least the amount of such excess, together
with (A) all accrued and unpaid interest on the Principal Debt prepaid, and (B)
any Consequential Loss arising as a result thereof.

         (c)      All mandatory payments pursuant to this SECTION 3.2 shall be
applied to the Principal Debt owing to each Lender according to its Pro Rata
Part except as otherwise specifically provided herein.

         3.3      DEFAULT RATE. At the option of Required Lenders at any time
while an Event of Default exists and to the extent permitted by all Legal
Requirements, all past due Principal Debt and all past due accrued interest
thereon, and fees and expenses payable hereunder and under the other Loan
Documents shall bear interest at the Default Rate until paid, regardless whether
such payment is made before or after entry of a judgment.

         3.4      INTEREST RECAPTURE. If the designated rate applicable to any
Borrowing exceeds the Maximum Rate, then the rate of interest on such Borrowing
shall be limited to the Maximum Rate, but any subsequent reductions in such
designated rate shall not reduce the rate of interest thereon below the Maximum
Rate until the total amount of interest accrued thereon equals the amount of
interest which would have accrued thereon if such designated rate had at all
times been in effect. In the event that at maturity (stated or by acceleration),
or at final payment of the Total Principal Debt, the total amount of interest
paid or accrued is less than the amount of interest which would have accrued if
such designated

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       25


rates had at all times been in effect, then, at such time and to the extent
permitted by all Legal Requirements, Borrower shall pay an amount equal to the
difference between (a) the lesser of the amount of interest which would have
accrued if such designated rates had at all times been in effect and the amount
of interest which would have accrued if the Maximum Rate had at all times been
in effect, and (b) the amount of interest actually paid or accrued on the Total
Principal Debt.

         3.5      INTEREST CALCULATIONS.

         (a)      All computations of interest for Prime Rate Borrowings shall
be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of interest shall be calculated on
the basis of actual number of days (including the first (1st) day but excluding
the last day) elapsed but computed as if each calendar year consisted of 360
days. All interest rate determinations and calculations by Administrative Agent
shall be conclusive and binding absent manifest error.

         (b)      The provisions of this Agreement relating to the calculation
of the Prime Rate and the Adjusted Eurodollar Rate are included only for the
purpose of determining the rate of interest or other amounts to be paid
hereunder that are based upon such rate.

         3.6      MAXIMUM RATE. Regardless of any provision contained in any
Loan Document, no Credit Party shall ever be entitled to contract for, charge,
take, reserve, receive, or apply, as interest on the Obligation, or any part
thereof, any amount in excess of the Maximum Rate, and if any Credit Party ever
does so, then such excess shall be deemed a partial prepayment of principal and
treated hereunder as such and any remaining excess shall be refunded to
Borrower. In determining if the interest paid or payable exceeds the Maximum
Rate, Borrower and the Credit Parties shall, to the maximum extent permitted
under all Legal Requirements, (a) treat all Borrowings as but a single extension
of credit (and the Credit Parties and Borrower agree that such is the case and
that provision herein for multiple Borrowings is for convenience only), (b)
characterize any non-principal payment as an expense, fee, or premium rather
than as interest, (c) exclude voluntary prepayments and the effects thereof, and
(d) amortize, prorate, allocate, and spread the total amount of interest
throughout the entire contemplated term of the Obligation; provided that if the
Obligation is paid and performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual period of
existence thereof exceeds the Maximum Amount, then the Credit Parties shall
refund such excess, and, in such event, the Credit Parties shall not, to the
extent permitted by all Legal Requirements, be subject to any penalties provided
by any Legal Requirements for contracting for, charging, taking, reserving, or
receiving interest in excess of the Maximum Amount.

         3.7      ORDER OF APPLICATION.

         (a)      Payments and prepayments of the Obligation shall be applied in
the order and manner specified in this Agreement; provided, however, if no order
is otherwise specified and no Potential Default or Event of Default exists,
payments and prepayments of the Obligation shall be applied first, to fees,
second, to accrued interest then due and payable on the Total Principal Debt,
and then to the remaining Obligation in the order and manner as Borrower may
direct.

         (b)      If a Potential Default or Event of Default exists (or if
Borrower fails to give directions as permitted under SECTION 3.7(a)), any
payment or prepayment (including proceeds from the exercise of any Rights) shall
be applied to the Obligation in the following order: (i) to the ratable payment
of all fees, expenses, and indemnities for which the Credit Parties have not
been paid or reimbursed in accordance

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       26


with the Loan Documents; (ii) to the ratable payment of accrued and unpaid
interest on the Total Principal Debt; (iii) to the ratable payment of the Total
Principal Debt; and (iv) to the payment of the remaining Obligation in the order
and manner Required Lenders deem appropriate.

         (c)      Subject to the provisions of SECTION 12 and provided that
Administrative Agent shall not in any event be bound to inquire into or to
determine the validity, scope, or priority of any interest or entitlement of any
Credit Party and may suspend all payments or seek appropriate relief (including
instructions from Required Lenders or an action in the nature of interpleader)
in the event of any doubt or dispute as to any apportionment or distribution
contemplated hereby, Administrative Agent shall promptly distribute such amounts
to each Credit Party in accordance with this Agreement and the related Loan
Documents.

         3.8      RIGHT OF SET-OFF; ADJUSTMENTS.

         (a)      SET-OFF. Upon the occurrence and during the continuance of any
Event of Default, each Lender (and each of its Affiliates) is hereby authorized
at any time and from time to time, to the fullest extent permitted by applicable
Legal Requirements, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender (or any of its Affiliates) to or
for the credit or the account of Borrower against any and all of the obligations
of Borrower now or hereafter existing under this Agreement and the Note held by
such Lender, irrespective of whether such Lender shall have made any demand
under this Agreement or such Note and although such obligations may be
unmatured. Each Lender agrees promptly to notify Borrower after any such set-off
and application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this SECTION 3.8(a) are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that such
Lender may have.

         (b)      SHARING OF PAYMENTS. If any Lender (a "BENEFITED LENDER")
shall at any time receive any payment of all or part of the Borrowings or
participations in Unreimbursed Amounts owing to it, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Borrowings owing to it, or interest thereon, then such Benefited Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Borrowings owing to it, or shall provide
such other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such Benefited Lender to share the
excess payment or benefits of such collateral or proceeds ratably with all
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefited Lender, then such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest. Borrower agrees that any Lender so
purchasing a participation from a Lender pursuant to this SECTION 3.8(b) may, to
the fullest extent permitted by applicable Legal Requirements, exercise all of
its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Person were the direct creditor of Borrower in
the amount of such participation.

         3.9      BOOKING BORROWINGS. To the extent permitted by all Legal
Requirements, any Lender may make, carry, or transfer its Borrowings at, to, or
for the account of any of its branch offices or the office of any of its
Affiliates; provided that no Affiliate shall be entitled to receive any greater
payment under SECTION 4 than the transferor Lender would have been entitled to
receive with respect to such Borrowings.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       27


SECTION 4 CHANGE IN CIRCUMSTANCES.

         4.1      INCREASED COST AND REDUCED RETURN.

         (a)      CHANGE IN LEGAL REQUIREMENTS. If, after the date hereof, the
adoption of any applicable Legal Requirement, or any change in any applicable
Legal Requirement, or any change in the interpretation or administration thereof
by any Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any such
Governmental Authority:

                  (i)      shall subject such Lender (or its Applicable Lending
         Office) to any tax, duty, or other charge with respect to any
         Eurodollar Borrowing, its Note, any Letter of Credit issued by it or
         its obligation to make Eurodollar Borrowings or issue or participate in
         Letters of Credit, or change the basis of taxation of any amounts
         payable to such Lender (or its Applicable Lending Office) under this
         Agreement or its Note in respect of any Eurodollar Borrowings or any
         L/C Obligations owing to it (other than taxes imposed on the overall
         net income of such Lender by the jurisdiction in which such Lender has
         its principal office or such Applicable Lending Office);

                  (ii)     shall impose, modify, or deem applicable any reserve,
         special deposit, assessment, or similar requirement (other than the
         Reserve Requirement utilized in the determination of the Adjusted
         Eurodollar Rate) relating to any extensions of credit or other assets
         of, or any deposits with or other liabilities or commitments of, such
         Lender (or its Applicable Lending Office), including the Commitment of
         such Lender hereunder; or

                  (iii)    shall impose on such Lender (or its Applicable
         Lending Office) or the London interbank market any other condition
         affecting this Agreement or its Note or any of such extensions of
         credit or liabilities or commitments;

and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of being obligated to make, making,
Converting into, Continuing, or maintaining any Eurodollar Borrowings or of
issuing Letters of Credit or purchasing or maintaining participations in Letters
of Credit or to reduce any sum received or receivable by such Lender (or its
Applicable Lending Office) under this Agreement or its Note with respect to any
Eurodollar Borrowings or with respect to any L/C Obligations owing to it, then
Borrower shall pay to such Lender on demand such amount or amounts as will
compensate such Lender for such increased cost or reduction. If any Lender
requests compensation by Borrower under this SECTION 4.1(a), then Borrower may,
by notice to such Lender (with a copy to Administrative Agent), suspend the
obligation of such Lender to make or Continue Eurodollar Borrowings, or Convert
all Eurodollar Borrowings into Prime Rate Borrowings, until the event or
condition giving rise to such request ceases to be in effect (in which case the
provisions of SECTION 4.4 shall be applicable); provided that such suspension
shall not affect the Right of such Lender to receive the compensation so
requested.

         (b)      CAPITAL ADEQUACY. If, after the date hereof, any Lender shall
have determined that the adoption of any applicable Legal Requirement regarding
capital adequacy or any change therein or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
Governmental Authority, has or would have the effect of reducing the rate of
return on the capital of such Lender or any corporation controlling such Lender
as a consequence of such

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       28


Lender's obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.

         (c)      NOTICE. Each Lender shall promptly notify Borrower and
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
SECTION 4.1 and will use reasonable efforts to designate a different Applicable
Lending Office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to it. Any Lender claiming compensation under this SECTION 4.1
shall furnish to Borrower and Administrative Agent a statement setting forth the
additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such amount, such
Lender may use any reasonable averaging and attribution methods.

         4.2      LIMITATION ON TYPES OF BORROWINGS.

         If on or prior to the first (1st) day of any Interest Period for any
Eurodollar Borrowing:

         (a)      Administrative Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period; or

         (b)      Required Lenders determine (which determination shall be
conclusive) and notify Administrative Agent that the Adjusted Eurodollar Rate
will not adequately and fairly reflect the cost to Lenders of funding Eurodollar
Borrowings for such Interest Period;

then Administrative Agent shall give Borrower prompt notice thereof specifying
the relevant amounts or periods, and so long as such condition remains in
effect, Lenders shall be under no obligation to make additional Eurodollar
Borrowings, Continue any Eurodollar Borrowings, or to Convert any Prime Rate
Borrowings to Eurodollar Borrowings and Borrower shall, on the last day(s) of
the then-current Interest Period(s) for the outstanding Eurodollar Borrowings,
either prepay such Borrowings or Convert such Borrowings into Prime Rate
Borrowings in accordance with the terms of this Agreement.

         4.3      ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Borrowings
hereunder, then such Lender shall promptly notify Administrative Agent and
Borrower thereof and such Lender's obligation to make or Continue Eurodollar
Borrowings and to Convert Prime Rate Borrowings into Eurodollar Borrowings shall
be suspended until such time as such Lender may again make, maintain, and fund
Eurodollar Borrowings (in which case the provisions of SECTION 4.4 shall be
applicable).

         4.4      TREATMENT OF AFFECTED LOANS. If the obligation of any Lender
to make or Continue Eurodollar Borrowings or to Convert Prime Rate Borrowings
into Eurodollar Borrowings shall be suspended pursuant to SECTION 4.1, 4.2, or
4.3, then such Lender's Eurodollar Borrowings shall be automatically Converted
into Prime Rate Borrowings on the last day(s) of the then current Interest
Period(s) for all Eurodollar Borrowings (or, in the case of a Conversion
required by SECTION 4.3, on such earlier date as such Lender may specify to
Borrower with a copy to Administrative Agent) and, unless and

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                                       29


until such Lender gives notice as provided below that the circumstances
specified in SECTION 4.1, 4.2, or 4.3 that gave rise to such Conversion no
longer exist:

         (a)      to the extent that such Lender's Eurodollar Borrowings have
been so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Borrowings shall be applied
instead to its Prime Rate Borrowings; and

         (b)      all Borrowings that would otherwise be made or Continued by
such Lender as Eurodollar Borrowings shall be made or Continued instead as Prime
Rate Borrowings, and all Borrowings of such Lender that would otherwise be
Converted into Eurodollar Borrowings shall be Converted instead into (or shall
remain as) Prime Rate Borrowings.

If such Lender gives notice to Borrower (with a copy to Administrative Agent)
that the circumstances specified in SECTION 4.1, 4.2, OR 4.3 that gave rise to
the Conversion of such Lender's Eurodollar Borrowings pursuant to this SECTION
4.4 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Borrowings made by
other Lenders are outstanding, then such Lender's Prime Rate Borrowings shall be
automatically Converted, on the first (1st) day(s) of the next succeeding
Interest Period(s) for such outstanding Eurodollar Borrowings, to the extent
necessary so that, after giving effect thereto, all Eurodollar Borrowings held
by Lenders are held Pro Rata (as to principal amounts, Types, and Interest
Periods).

         4.5      COMPENSATION. Upon the request of any Lender, Borrower shall
pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (herein called a "CONSEQUENTIAL LOSS") incurred by it as a result of:

         (a)      any payment, prepayment, or Conversion of a Eurodollar
Borrowing for any reason (including the acceleration of the Obligation pursuant
to SECTION 11.1) on a date other than the last day of the Interest Period for
such Borrowing; or

         (b)      any failure by Borrower for any reason (including the failure
of any condition precedent specified in SECTION 6 to be satisfied) to Convert,
Continue, or prepay a Eurodollar Borrowing on the date for such Conversion,
Continuation, or prepayment specified in the relevant Notice of Conversion or
Continuation.

         4.6      TAXES.

         (a)      Any and all payments by Borrower to or for the account of any
Credit Party hereunder or under any other Loan Document shall be made free and
clear of and without deduction for any and all present or future Taxes,
excluding, in the case of each Credit Party, Taxes based on or measured by its
income, and franchise taxes imposed on it by the jurisdiction under the Legal
Requirements of which such Credit Party (or its Applicable Lending Office) is
organized or any political subdivision thereof (such income and franchise Taxes
being "EXCLUDED TAXES"). If Borrower shall be required by any Legal Requirement
to deduct any Taxes (other than Excluded Taxes) from or in respect of any sum
payable under this Agreement or any other Loan Document to any Credit Party,
then (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this SECTION 4.6) such Credit Party receives an amount equal to
the sum it would have received had no such deductions been made, (ii) Borrower
shall make such deductions, and (iii) Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with all Legal Requirements.

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                                       30


         (b)      In addition, Borrower agrees to pay any and all present or
future stamp or documentary Taxes and any other excise or property Taxes or
charges or similar levies which arise from any payment made under this Agreement
or any other Loan Document or from the execution or delivery of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter referred
to as "OTHER TAXES").

         (c)      Borrower agrees to indemnify each Credit Party for the full
amount of Taxes (other than Excluded Taxes) and Other Taxes (including any Taxes
or Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this SECTION 4.6) paid by such Credit Party and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto.

         (d)      Each Lender organized under the Legal Requirements of a
jurisdiction outside the United States, on or prior to the date of its execution
and delivery of this Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on which it becomes a Lender
in the case of each other Lender, and from time to time thereafter if requested
in writing by Borrower or Administrative Agent (but only so long as such Lender
remains lawfully able to do so), shall provide Borrower and Administrative Agent
with (i) Internal Revenue Service Form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States, (ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any
successor form prescribed by the Internal Revenue Service, and (iii) any other
form or certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Tax Code), certifying that such
Lender is entitled to an exemption from or a reduced rate of tax on payments
pursuant to this Agreement or any of the other Loan Documents.

         (e)      For any period with respect to which a Lender has failed to
provide Borrower and Administrative Agent with the appropriate form pursuant to
SECTION 4.6(D) (unless such failure is due to a change in any Legal Requirement
occurring subsequent to the date on which a form originally was required to be
provided), such Lender shall not be entitled to indemnification under SECTIONS
4.6(A) or (B) with respect to Taxes imposed by the United States; provided,
however, that should a Lender, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes (other than Excluded
Taxes) because of its failure to deliver a form required hereunder, Borrower
shall take such steps as such Lender shall reasonably request to assist such
Lender to recover such Taxes.

         (f)      If Borrower is required to pay additional amounts to or for
the account of any Lender pursuant to this SECTION 4.6, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.

         (g)      Within thirty (30) days after the date of any payment of Taxes
or Other Taxes, Borrower shall furnish to Administrative Agent the original or a
certified copy of a receipt evidencing such payment.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       31


         (h)      Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained in
SECTIONS 4.1, 4.5, and 4.6 shall survive the termination of the Total Commitment
and the payment in full of the Notes.

SECTION 5 FEES.

         5.1      TREATMENT OF FEES. Except as otherwise provided by any Legal
Requirement, the fees described in this SECTION 5: (a) do not constitute
compensation for the use, detention, or forbearance of money; (b) are in
addition to, and not in lieu of, interest and expenses otherwise described in
this Agreement; (c) shall be payable in accordance with SECTION 3.1; (d) shall
be non-refundable; (e) shall, to the fullest extent permitted by all Legal
Requirements, bear interest, if not paid when due, at the Default Rate; and (f)
shall be calculated on the basis of actual number of days (including the first
day but excluding the last day) elapsed, but computed as if each calendar year
consisted of 360 days.

         5.2      FEES OF ADMINISTRATIVE AGENT. Borrower shall pay to
Administrative Agent the fees specified in the letter agreement dated May 29,
2003 between Administrative Agent and Borrower, as amended, which fees shall be
for the account of Administrative Agent and for the account of the Credit
Parties as shall be agreed between Administrative Agent and each other Credit
Party.

         5.3      LETTER OF CREDIT FEES. Borrower shall pay to Administrative
Agent for the account of the Lenders in accordance with their respective Pro
Rata Parts a Letter of Credit fee for each outstanding Letter of Credit equal to
a rate per annum equal to the Applicable Margin for Letters of Credit times the
daily maximum amount available to be drawn under such Letter of Credit (whether
or not such maximum amount is then in effect under such Letter of Credit). Such
Letter of Credit fees shall accrue and be computed on a quarterly basis in
arrears, and shall be due and payable on the fifteenth (15th) day after the end
of each March, June, September, and December, commencing with the first such
date to occur after the issuance of such Letter of Credit, on the Letter of
Credit Expiration Date and thereafter on demand. If there is any change in the
Applicable Margin during any quarter, the daily maximum amount of each Letter of
Credit shall be computed and multiplied by the Applicable Margin separately for
each period during such quarter that such Applicable Margin was in effect.

         5.4      FRONTING FEE AND DOCUMENTARY AND PROCESSING CHARGES PAYABLE TO
L/C ISSUER. Borrower shall pay directly to the applicable L/C Issuer for its own
account a fronting fee with respect to each Letter of Credit issued or renewed
by such L/C Issuer equal to the greater of (a) $1,500 and (b) (i) 0.125% per
annum times (ii) the aggregate maximum amount which is available to be drawn
under such Letter of Credit. Such fronting fee shall be due and payable on the
fifteenth (15th) day after the end of each March, June, September, and December,
commencing with the first such date to occur after the issuance or renewal of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand. In addition, Borrower shall pay directly to the applicable L/C Issuer
for its own account the customary issuance, presentation, amendment, and other
processing fees, and other standard costs and charges, of such L/C Issuer
relating to letters of credit as from time to time in effect. Such customary
fees and standard costs and charges are due and payable on demand and are
nonrefundable.

         5.5      UNUSED FEE. For the period from the Closing Date to the
Termination Date, Borrower shall pay to Administrative Agent, for the ratable
benefit of Lenders, an unused fee, calculated daily but payable quarterly in
installments in arrears, on the fifteenth (15th) day after the end of each
March, June, September, and December and on the Termination Date, commencing
September 30, 2003. Each installment shall be in an amount equal to the product
of (a) the rate per annum equal to the Applicable

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       32


Margin for Unused Fees times (b) the actual daily amount by which the Total
Commitment exceeds Total Outstandings.

SECTION 6 CONDITIONS PRECEDENT.

         6.1      CONDITIONS PRECEDENT TO CLOSING. This Agreement shall not
become effective unless the following conditions precedent are satisfied on or
before the Closing Date:

         (a)      BORROWER DOCUMENTS. Borrower shall deliver or cause to be
delivered to Administrative Agent the following, each, unless otherwise noted,
dated as of the Closing Date:

                  (i)      certified copies of its Constituent Documents,
         together with existence and good standing certificates from the
         Secretary of State of Nevada and foreign qualification and good
         standing certificates from the State of Texas, each dated a recent date
         prior to the Closing Date;

                  (ii)     a certificate of Responsible Officers of Borrower
         certifying (A) its Constituent Documents, (B) resolutions of its Board
         of Directors (or of the "Executive Committee" of the Board of Directors
         upon delivery of resolutions of the Board of Directors authorizing such
         action by an Executive Committee) approving and authorizing the
         execution, delivery, and performance of this Agreement and the other
         Loan Documents, certified as of the Closing Date as being in full force
         and effect without modification or amendment, and (C) signatures and
         incumbency of its officers executing this Agreement and the other Loan
         Documents;

                  (iii)    executed originals of this Agreement, the Notes, if
         any, and the other Loan Documents to be executed by Borrower; and

                  (iv)     such other documents as Administrative Agent may
         reasonably request.

         (b)      OPINION OF COUNSEL FOR BORROWER. The Credit Parties and their
respective counsel shall have received originally executed copies of a favorable
written opinion of counsel for Borrower, in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated as of the Closing
Date, and setting forth substantially the matters in the opinions designated in
EXHIBIT D.

         (c)      FEES. Borrower shall have paid to Administrative Agent, (i)
for distribution (as appropriate) to the Credit Parties, the fees payable on the
Closing Date referred to in SECTION 5.2, and (ii) all reasonable fees and
expenses incurred by Administrative Agent and Arranger in connection with the
negotiation, preparation, and closing of the transactions evidenced by the Loan
Documents (including, without limitation, Attorney Costs).

         (d)      COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent, acting on behalf of Lenders, and its counsel shall be
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.

         6.2      CONDITIONS TO ALL CREDIT EXTENSIONS. The obligations of the
Credit Parties to make each Credit Extension (including the initial Credit
Extension) are subject to the following further conditions precedent:

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       33


         (a)      NOTICE OF CREDIT EXTENSION. Administrative Agent and the
applicable L/C Issuer shall have received, in accordance with the provisions of
SECTION 2.1, an originally executed Letter of Credit Application or Notice of
Conversion/Continuation, as applicable.

         (b)      REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. As
of the date of such Credit Extension, Borrower's representations and warranties
in each Loan Document are true, correct, and complete in all material respects
(unless they speak to a specific date or are based on facts which have changed
by transactions expressly contemplated or permitted by this Agreement).

         (c)      NO DEFAULT. No Potential Default or Event of Default exists or
would be caused by the making of such Credit Extension.

         (d)      NO INJUNCTION OR RESTRAINING ORDER. No order, judgment, or
decree of any Governmental Authority shall purport to enjoin or restrain any
Credit Party from making such Credit Extension.

         (e)      NO VIOLATION. The making of such Credit Extension shall not
violate any Legal Requirement, including Regulation T, Regulation U, or
Regulation X of the Board of Governors of the Federal Reserve System.

         (f)      OTHER MATTERS. All matters related to such Credit Extension
must be satisfactory to Required Lenders and their respective counsel in their
reasonable determination, and upon the reasonable request of Administrative
Agent, Borrower shall deliver to Administrative Agent evidence substantiating
any of the matters in the Loan Documents which are necessary to enable Borrower
to qualify for such Credit Extension.

Each condition precedent in this Agreement is material to the transactions
contemplated in this Agreement, and time is of the essence in respect of each
thereof. Subject to the prior approval of Required Lenders, the Credit Parties
may make a Credit Extension without all conditions being satisfied, but, to the
extent permitted by all Legal Requirements, such Credit Extension shall not be
deemed to be a waiver of the requirement that each such condition precedent be
satisfied as a prerequisite for any subsequent Credit Extension, unless Required
Lenders specifically waive each such item in writing.

SECTION 7 REPRESENTATIONS AND WARRANTIES.

         Borrower represents and warrants to the Credit Parties as follows:

         7.1      PURPOSE OF LETTER OF CREDIT FACILITY. Borrower will use (or
will loan or contribute such proceeds to its Subsidiaries to so use) all
proceeds of Credit Extensions for one or more of the following: (a) for lawful,
corporate purposes; and (b) to satisfy its insurance bonding requirements. No
Restricted Company is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any "margin stock" within the meaning of Regulation U. No part of the
proceeds of any Credit Extension will be used, directly or indirectly, for a
purpose which violates any Legal Requirement, including the provisions of
Regulation T, U, or X (as enacted by the Board of Governors of the Federal
Reserve System, as amended). "Margin Stock" (as defined in Regulation U)
constitutes less than twenty-five percent (25%) of those assets of the Companies
that are subject to any limitation on sale, pledge, or similar restrictions
hereunder.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       34


         7.2      EXISTENCE, GOOD STANDING, AUTHORITY, AND AUTHORIZATIONS. Each
Restricted Company is duly organized, validly existing, and in good standing
under the Legal Requirements of its jurisdiction of organization. Each
Restricted Company is duly qualified to transact business and is in good
standing in each jurisdiction where the nature and extent of its business and
properties require the same, except where the failure to be so qualified could
not constitute a Material Adverse Event. Each Restricted Company possesses all
the Authorizations necessary or required in the conduct of its respective
business(es), and the same are valid, binding, enforceable, and subsisting
without any defaults thereunder or enforceable adverse limitations thereon and
are not subject to any proceedings or claims opposing the issuance, development,
or use thereof or contesting the validity thereof, except for any such
circumstance that could not be a Material Adverse Event.

         7.3      SUBSIDIARIES; CAPITAL STOCK. The Companies have no
Subsidiaries except as disclosed on SCHEDULE 7.3, such schedule reflecting each
Subsidiary's jurisdiction of incorporation (as supplemented and modified in
writing from time to time to reflect any changes to such SCHEDULE as a result of
transactions permitted or not prohibited by the Loan Documents) and each
Unrestricted Subsidiary is designated as such. All of the outstanding Stock of
each Subsidiary is duly authorized, validly issued, fully paid, and
nonassessable and, except (a) for directors' qualifying shares, or (b) as
otherwise set forth on SCHEDULE 7.3, are owned directly or indirectly by
Borrower (as supplemented and modified in writing from time to time to reflect
any changes to such SCHEDULE as a result of transactions permitted or not
prohibited by the Loan Documents), free and clear, in the case of all Restricted
Subsidiaries, of any Liens, restrictions (including restrictions on transfer),
claims, or Rights of another Person except for restrictions on transfer imposed
by securities Legal Requirements and general corporate Legal Requirements.

         7.4      AUTHORIZATION AND CONTRAVENTION. The execution and delivery by
Borrower of each Loan Document and the performance by Borrower of its
obligations thereunder (a) are within the corporate power of Borrower, (b) have
been duly authorized by all necessary corporate action on the part of Borrower,
(c) require no action by or in respect of Authorizations of or filing with, any
Governmental Authority, which action, Authorization, or filing has not been
taken, received, or made on or prior to the Closing Date (or if later, the date
of execution and delivery of such Loan Document) other than filing of the Loan
Documents pursuant to securities Legal Requirements, (d) will not violate any
provision of the Constituent Documents of any Company, (e) will not violate any
provision of any Legal Requirement applicable to any Company, other than such
violations which individually or collectively could not be a Material Adverse
Event, (f) will not violate any material written or oral agreements, contracts,
commitments, or understandings to which any Company is a party, other than such
violations which could not be a Material Adverse Event, or (g) will not result
in the creation or imposition of any Lien on any asset of any Company.

         7.5      BINDING EFFECT. Upon execution and delivery by all parties
thereto, each Loan Document to which Borrower is a party will constitute a
legal, valid, and binding obligation of Borrower, enforceable against Borrower
in accordance with its terms, except as enforceability may be limited by
applicable Debtor Relief Laws and general principles of equity.

         7.6      FINANCIAL STATEMENTS. The Current Financials were prepared in
accordance with GAAP and present fairly, in all material respects, the
consolidated financial condition, results of operations, and cash flows of the
Companies as of and for the portion of the fiscal year ending on the date or
dates thereof (subject only to normal year-end audit adjustments). There were no
material liabilities, direct or indirect, fixed or contingent, of the Companies
as of the date or dates of the Current Financials which are required

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       35


under GAAP to be reflected therein or in the notes thereto, and are not so
reflected. No Material Adverse Event has occurred from March 31, 2003 to the
Closing Date.

         7.7      LITIGATION, CLAIMS, INVESTIGATIONS. No Company is subject to,
or aware of the threat of, any Litigation which is reasonably likely to be
determined adversely to any Company, and, if so adversely determined, could
(individually or collectively with other Litigation) be a Material Adverse
Event. There are no outstanding orders or judgments for the payment of money in
excess of $20,000,000 (individually or collectively) or any warrant of
attachment, sequestration, or similar proceeding against the assets of any
Company having a value (individually or collectively) of $20,000,000 or more
which is not either (a) stayed on appeal, or (b) being contested in good faith
by appropriate proceedings diligently conducted, and against which reserves or
other provisions required by GAAP have been made. There are no formal
complaints, suits, claims, investigations, or proceedings initiated at or by any
Governmental Authority pending or, to the best knowledge of Borrower, threatened
against any Company which is reasonably likely to be determined adversely and,
if so adversely determined, could be a Material Adverse Event, nor any
judgments, decrees, or orders of any Governmental Authority outstanding against
any Company that could be a Material Adverse Event.

         7.8      TAXES. All Tax returns of each Company required to be filed
have been filed (or extensions have been granted) prior to delinquency, except
for any such returns for which the failure to so file could not be a Material
Adverse Event, and all Taxes imposed upon each Company which are due and payable
have been paid prior to delinquency, other than Taxes (a) that are being
contested in good faith by appropriate proceedings diligently conducted, and
against which reserves or other provisions required by GAAP have been made, or
(b) for which nonpayment thereof could not be a Material Adverse Event.

         7.9      ENVIRONMENTAL MATTERS. No Company, after reasonable inquiry,
(a) knows of any environmental condition or circumstance, such as the presence
or Release of any Hazardous Materials, on any property presently or previously
owned or leased by any Company or to which Hazardous Materials generated by any
Company have been taken, that could be a Material Adverse Event, (b) knows of
any violation by any Company of any Environmental Law that could be a Material
Adverse Event, or (c) knows that any Company is under any obligation to remedy
any violation of any Environmental Law or any Release or threatened Release of
any Hazardous Materials that could be a Material Adverse Event.

         7.10     EMPLOYEE BENEFIT PLANS. (a) No Employee Plan has incurred an
accumulated funding deficiency, as defined in Section 302 of ERISA and Section
412 of the Tax Code, (b) neither Borrower nor any ERISA Affiliate has incurred a
liability which is currently due and remains unpaid under Title IV of ERISA to
the PBGC or to an Employee Plan in connection with any such Employee Plan, (c)
neither Borrower nor any ERISA Affiliate has withdrawn in whole or in part from
participation in a Multiemployer Plan, (d) Borrower has not engaged in any
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Tax Code), and (e) no Reportable Event has occurred which is reasonably
likely to result in the termination of an Employee Plan if such accumulated
funding deficiency, liability, withdrawal, prohibited transaction, or Reportable
Event is reasonably likely to result individually or in the aggregate in
liability on the part of Borrower in excess of $20,000,000. The present value of
all benefit liabilities within the meaning of Title IV of ERISA under each
Employee Plan (based on those actuarial assumptions used to fund such Employee
Plan) did not, as of the last annual valuation date for the most recent plan
year of such Employee Plan, exceed the value of the assets of such Employee
Plan, and the total present values of all benefit liabilities within the meaning
of Title IV of ERISA of all Employee Plans (based on the actuarial assumptions
used to fund each such Employee Plan) did not, as of the respective annual
valuation dates for the most recent plan year of each such Plan, exceed the
value of the assets of all such Employee Plans.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       36


         7.11     PROPERTIES; LIENS. Each Restricted Company has good and
indefeasible title to all its property reflected on the Current Financials,
except for property that (a) is obsolete, or (b) has been disposed of in the
ordinary course of business or as otherwise permitted by the Loan Documents.
Except for Permitted Liens, there is no Lien on any property of any Restricted
Company.

         7.12     GOVERNMENT REGULATIONS. No Company is subject to regulation
under the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, or any other Legal Requirement (other than
Regulations T, U, and X of the Board of Governors of the Federal Reserve System)
which regulates the incurrence of Debt.

         7.13     TRANSACTIONS WITH AFFILIATES. No Restricted Company is a party
to a transaction with any of its Affiliates, other than transactions upon fair
and reasonable terms not materially less favorable than such Restricted Company
could obtain or could become entitled to in an arm's-length transaction with a
Person that was not its Affiliate.

         7.14     NO DEFAULT. No event has occurred and is continuing or would
result from the incurring of obligations by Borrower under this Agreement or any
other Loan Document which constitutes an Event of Default or a Potential
Default. No Restricted Company is in default under or with respect to any
material written or oral agreements, contracts, commitments, or understandings
to which any Restricted Company is party which could, individually or together
with all such defaults, be a Material Adverse Event.

         7.15     SOLVENCY. At the time of each Credit Extension hereunder, each
Restricted Company is (and after giving effect to the transactions contemplated
by the Loan Documents and any incurrence of additional Debt, will be) Solvent.

         7.16     COMPLIANCE WITH LEGAL REQUIREMENTS. No Company is in violation
of any Legal Requirements (including Environmental Laws), other than such
violations which could not, individually or collectively, be a Material Adverse
Event. No Company has received notice alleging any non-compliance with any Legal
Requirements, except for such non-compliance which no longer exists or which
could not be a Material Adverse Event.

         7.17     FULL DISCLOSURE. There is no material fact or condition
relating to the Loan Documents or the financial condition, business, or property
of any Company which could be a Material Adverse Event and which has not been
disclosed, in writing, to Administrative Agent. All information heretofore
furnished by any Company to any Credit Party in connection with the Loan
Documents was, and all such information hereafter furnished by any Company to
any Credit Party will be, true and accurate in all material respects or based on
reasonable estimates on the date as of which such information is stated or
certified.

         7.18     SENIOR DEBT. The Obligation constitutes (and will constitute
until payment in full and cancellation of all Commitments hereunder) Borrower's
direct and unconditional obligation and ranks at least pari passu with other
unsecured and unsubordinated Debt of Borrower.

         7.19     TAX SHELTER REGULATIONS. Borrower does not intend to treat the
Borrowings and related transactions as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4). In the event Borrower
determines to take any action inconsistent with such intention, it will promptly
notify Administrative Agent thereof. If Borrower so notifies Administrative
Agent,

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       37


Borrower acknowledges that one or more Lenders may treat its Credit Extensions
as part of a transaction that is subject to Treasury Regulation Section
301.6112-1, and such Lender or Lenders, as applicable, will maintain the lists
and other records required by such Treasury Regulation.

SECTION 8 AFFIRMATIVE COVENANTS.

         Borrower covenants and agrees to perform, observe, and comply with each
of the following covenants, from the Closing Date and so long thereafter as
Lenders are committed to make any Credit Extensions under this Agreement and
thereafter until the payment in full of all Principal Debt, all L/C Obligations,
and payment in full of all interest, fees, and other amounts of the Obligation
then due and owing, unless Borrower receives a prior written consent to the
contrary by Administrative Agent as authorized by Required Lenders:

         8.1      USE OF PROCEEDS. Borrower shall use the proceeds of all Credit
Extensions only for the purposes represented herein.

         8.2      BOOKS AND RECORDS. Borrower shall, and shall cause each other
Company to, maintain books, records, and accounts necessary to prepare all
Financial Statements delivered hereunder in accordance with GAAP.

         8.3      ITEMS TO BE FURNISHED. Borrower shall cause the following to
be furnished to Administrative Agent and each Lender:

         (a)      ANNUAL FINANCIAL STATEMENTS. Promptly after preparation, and
no later than one hundred and twenty (120) days after the last day of each
fiscal year of Borrower, Financial Statements showing the consolidated and
consolidating financial condition and results of operations of the Companies, as
of, and for the year ended on, such day, each accompanied by:

                  (i)      with respect to the consolidated Financial
         Statements, the unqualified opinion of a firm of nationally-recognized
         independent certified public accountants, based on an audit using
         generally accepted auditing standards, that such Financial Statements
         were prepared in accordance with GAAP and present fairly the
         consolidated financial condition and results of operations of the
         Companies;

                  (ii)     any management letter delivered to Borrower prepared
         by such accounting firm with respect to such Financial Statements; and

                  (iii)    a Compliance Certificate.

         (b)      PERIODIC FINANCIAL STATEMENTS. Promptly after preparation, and
no later than sixty (60) days after the last day of each fiscal quarter of
Borrower (other than the last fiscal quarter of any fiscal year), Financial
Statements showing the consolidated and consolidating financial condition and
results of operations calculated for the Companies for such fiscal quarter and
for the period from the beginning of the then-current fiscal year to such last
day, accompanied by (i) an internally prepared financial summary of the
Companies and other information as Administrative Agent may reasonably request,
and (ii) a Compliance Certificate with respect to such Financial Statements.

         (c)      MANAGEMENT LETTERS. Promptly upon receipt thereof, copies of
all auditor's annual management letters delivered to Borrower.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       38


         (d)      NOTICES OF LITIGATION, DEFAULTS, ETC. Notice, promptly after
Borrower knows or has reason to know of (i) the existence and status of any
Litigation which is reasonably likely to be determined adversely and, if so
adversely determined, could be a Material Adverse Event, or of any order or
judgment for the payment of money which (individually or collectively) is in
excess of $20,000,000, or any warrant of attachment, sequestration, or similar
proceeding against the assets of any Company having a value (individually or
collectively) of $20,000,000 or more, (ii) any material change in any material
fact or circumstance represented or warranted in any Loan Document, (iii) a
Potential Default or Event of Default specifying the nature thereof and what
action Borrower or any other Company has taken, is taking, or proposes to take
with respect thereto; provided, however, that Borrower shall have no obligation
to notify Administrative Agent or Lenders of a Potential Default under SECTION
9.12 unless Borrower has actual knowledge of such Potential Default and such
Potential Default has continued, or Borrower reasonably expects such Potential
Default to continue, for a period of five (5) consecutive days, (iv) the receipt
by any Company of any notice from any Governmental Authority of the expiration
without renewal, termination, material modification or suspension of, or
institution of any proceedings to terminate, materially modify, or suspend, any
Authorization which any Company is required to hold in order to operate its
business in compliance with all Legal Requirements, other than such expirations,
terminations, suspensions, or modifications which individually or in the
aggregate would not be a Material Adverse Event, (v) any federal, state, or
local statute, regulation, or ordinance or judicial or administrative order
limiting or controlling the operations of any Company which has been issued or
adopted hereafter and which is of material adverse importance or effect in
relation to the operations of the Companies taken as a whole, (vi) the receipt
by any Company of notice of any violation or alleged violation of any
Environmental Law, which violation or alleged violation could individually or
collectively with other such violations or allegations, reasonably be expected
to be a Material Adverse Event, or (vii) (A) the occurrence of a Reportable
Event that, alone or together with any other Reportable Event, could reasonably
be expected to result in liability of any Company to the PBGC in an aggregate
amount exceeding $20,000,000; (B) any expressed statement in writing on the part
of the PBGC of its intention to terminate any Employee Plan or Plans; (C)
Borrower's or an ERISA Affiliate's becoming obligated to file with the PBGC a
notice of failure to make a required installment or other payment with respect
to an Employee Plan; or (D) the receipt by Borrower or an ERISA Affiliate from
the sponsor of a Multiemployer Plan of either a notice concerning the imposition
of withdrawal liability in an aggregate amount exceeding $20,000,000 or of the
impending termination or reorganization of such Multiemployer Plan.

         (e)      SCHEDULE AND EXHIBIT UPDATES. Concurrently with the delivery
of each Compliance Certificate, to the extent any of the information or
disclosures provided on any of the SCHEDULES or EXHIBITS delivered pursuant to
this Agreement or any Loan Documents has become outdated or incorrect in any
material respect, such revised or updated SCHEDULES or EXHIBITS as may be
necessary or appropriate to update or correct such information or disclosures.

         (f)      SEC FILINGS. Promptly after the filing thereof, a true,
correct, and complete copy of each Form 10-K, Form 10-Q, and Form 8-K filed by
or on behalf of Borrower with the Securities and Exchange Commission.

         (g)      CHANGE IN RATINGS. Promptly upon the receipt of notice
thereof, and in any event within three (3) Business Days after any change in the
Moody's Rating or the S & P Rating, notice of such change.

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       39


         (h)      TAX SHELTER REGULATIONS. Promptly after Borrower has notified
Administrative Agent of any intention by Borrower to treat the Borrowings and
related transactions as being a "reportable transaction" (within the meaning of
Treasury Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886 or
any successor form.

         (i)      OTHER INFORMATION. Promptly upon request therefor by any
Credit Party, such information (not otherwise required to be furnished under the
Loan Documents) respecting the business affairs, assets, and liabilities of the
Companies, as reasonably requested.

         8.4      INSPECTIONS. Borrower shall, and shall cause each other
Company to, upon reasonable notice, allow any Credit Party (or its
Representatives) (except in the case of Administrative Agent or its
Representatives or unless an Event of Default then exists (which in either case
shall be at the expense of Borrower), at the sole expense of such Credit Party)
to inspect any of their properties, to review reports, files, and other records
and to make and take away copies thereof, to conduct tests or investigations,
and to discuss any of their affairs, conditions, and finances with other
creditors, directors, officers, employees, other representatives, and
independent accountants of the Companies, from time to time, during reasonable
business hours.

         8.5      TAXES. Borrower shall, and shall cause each other Company to
(a) promptly pay when due any and all Taxes other than Taxes the failure to pay
could not be a Material Adverse Event or the applicability, amount, or validity
of which is being contested in good faith by appropriate proceedings diligently
conducted, and against which reserves or other provisions required by GAAP have
been made, and in respect of which levy and execution of any lien securing same
have been and continue to be stayed, and (b) notify Administrative Agent
immediately if the Internal Revenue Service or any other taxing authority
commences or notifies any Company of its intention to commence an audit or
investigation with respect to any Taxes of any kind due or alleged to be due
from any Company to the extent that the failure to pay such Taxes could be a
Material Adverse Event.

         8.6      PAYMENT OF OBLIGATIONS. Borrower shall pay the Obligation in
accordance with the terms and provisions of the Loan Documents. Borrower shall,
and shall cause each Restricted Company to, promptly pay (or renew and extend)
all of its material obligations as the same become due (unless such obligations
(other than the Obligation) are being contested in good faith by appropriate
proceedings).

         8.7      MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS. Except as
otherwise permitted by SECTION 9.10, Borrower shall, and shall cause each other
Company to, at all times: (a) maintain its existence and good standing in the
jurisdiction of its organization and its authority to transact business in all
other jurisdictions where the failure to so maintain could be a Material Adverse
Event; (b) maintain all licenses, permits, and franchises necessary for its
business where the failure to so maintain could be a Material Adverse Event; (c)
keep all of its assets which are useful in and necessary to its business in good
working order and condition (ordinary wear and tear excepted) and make all
necessary repairs thereto and replacements thereof where the failure to do so
could be a Material Adverse Event; and (d) do all things necessary to obtain,
renew, extend, and continue in effect all Authorizations which may at any time
and from time to time be necessary for the Companies to operate their businesses
in compliance with all Legal Requirements, where the failure to so obtain,
renew, extend, or continue in effect could be a Material Adverse Event.

         8.8      INSURANCE. Borrower shall, and shall cause each other Company
to, maintain with financially sound, responsible, and reputable insurance
companies or associations insurance reasonably acceptable to Administrative
Agent concerning its properties and businesses against casualties and

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       40


contingencies and of types and in amounts (and with co-insurance and
deductibles) as is customary in the case of similar businesses. At
Administrative Agent's request, Borrower shall, and shall cause each other
Company to, promptly deliver to Administrative Agent evidence of insurance for
each policy of insurance and evidence of payment of all premiums.

         8.9      PRESERVATION AND PROTECTION OF RIGHTS. Borrower shall, and
shall cause each other Company to, perform such acts and duly authorize,
execute, acknowledge, deliver, file, and record any additional agreements,
documents, instruments, and certificates as Administrative Agent or Required
Lenders may reasonably deem necessary or appropriate in order to preserve and
protect the Rights of the Credit Parties under any Loan Document.

         8.10     ENVIRONMENTAL LAWS. Borrower shall, and shall cause each other
Company to (a) conduct its business so as to comply with all applicable
Environmental Laws and shall promptly take corrective action to remedy any
non-compliance with any Environmental Law, and (b) promptly investigate and
remediate any known Release or threatened Release of any Hazardous Material on
any property owned by any Company or at any facility operated by any Company to
the extent and degree necessary to comply with all Environmental Laws, except,
in the cases of CLAUSES (A) and (B), to the extent that the failure to do so
could not be a Material Adverse Event.

         8.11     COMPLIANCE WITH LEGAL REQUIREMENTS. Borrower shall, and shall
cause each other Company to, comply with the provisions of all Legal
Requirements applicable to it, and any material written or oral agreement,
contract, commitment, or understanding to which it is a party, unless the
failure to so comply alone, or when aggregated with all other such
non-compliance, could not be a Material Adverse Event.

         8.12     DESIGNATION OF UNRESTRICTED SUBSIDIARIES

         (a)      Borrower shall have the option of designating any Restricted
Subsidiary as an Unrestricted Subsidiary by giving prior written notice to the
Administrative Agent and Lenders (as provided in the next sentence), provided
that (i) such designation does not result in an Event of Default or a Potential
Default, and (ii) the aggregate of (x) the Recourse Debt of such Restricted
Subsidiary (determined as at the date of such designation), and (y) the
aggregate Recourse Debt of all other Subsidiaries of Borrower, if any, which
Borrower has previously designated as Unrestricted Subsidiaries (determined for
each such other Subsidiary as at the date of designation of the new Unrestricted
Subsidiary and determined for all such Subsidiaries (including the new
Unrestricted Subsidiary) on a consolidated basis in accordance with GAAP) does
not exceed the greater of (a) twenty-five percent (25%) of Consolidated Debt
(determined as at the date of such designation) excluding the Restricted
Subsidiary to be so designated, or (b) $500,000,000. Each notice of designation
delivered pursuant to the preceding sentence shall be accompanied by the
following documents, each certified by a Responsible Officer of Borrower and
setting forth the relevant financial information as at a specified date not
earlier than ten (10) days before the effective date of such designation: (X) a
statement showing, in reasonable detail, the Tangible Net Worth, the total Debt,
and the total assets of each Restricted Subsidiary the subject of such notice of
designation; and (Y) a Compliance Certificate showing comparative figures for
Borrower and the Restricted Subsidiaries before and after giving effect to such
notice of designation and a statement demonstrating, in reasonable detail,
compliance with CLAUSE (ii) of the first sentence of this SECTION 8.12(a). Any
attempted designation by Borrower of a Restricted Subsidiary as an Unrestricted
Subsidiary other than in compliance with the limitations contained in this
SECTION 8.12(a) shall be ineffective as fully as if such attempted designation
had never occurred.

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                                       41


         (b)      Borrower shall have the option of designating any newly formed
or acquired Subsidiary as an Unrestricted Subsidiary so long as such designation
complies with the requirements of the proviso in the first sentence of SECTION
8.12(a) and Administrative Agent receives a list of newly formed or acquired
Unrestricted Subsidiaries in connection with the delivery of each Compliance
Certificate delivered to Administrative Agent pursuant to SECTION 8.3, which
Compliance Certificate shall contain a statement that Borrower is in compliance
with CLAUSE (ii) of the first sentence of SECTION 8.12(a) (for such purpose the
reference to "Restricted Subsidiary" in CLAUSE (ii) of the first sentence of
SECTION 8.12(a) shall be deemed to read "newly formed or acquired Subsidiary").

         (c)      If, as of any date, the aggregate Recourse Debt of the
Unrestricted Subsidiaries (determined on a consolidated basis in accordance with
GAAP) exceeds the greater of (a) twenty-five percent (25%) of Consolidated Debt
as of such date or (b) $500,000,000, then Borrower shall designate an
Unrestricted Subsidiary or Subsidiaries to be a Restricted Subsidiary such that
the aggregate Recourse Debt of the remaining Unrestricted Subsidiaries does not
exceed the greater of (a) twenty-five percent (25%) of Consolidated Debt
(including the newly designated Restricted Subsidiary), or (b) $500,000,000.
Borrower shall notify Administrative Agent and Lenders of any such designation
not later than ten (10) days after the requirement to make such designation
arises pursuant to the preceding sentence, accompanied by the following
documents, each certified by a Responsible Officer of Borrower and setting forth
the relevant financial information as at a specified date not earlier than ten
(10) days before the effective date of such designation: (X) a statement
showing, in reasonable detail, the Tangible Net Worth, the total Debt, and the
total assets of the Subsidiary to be designated a Restricted Subsidiary, and (Y)
a Compliance Certificate showing comparative figures for Borrower and the
Restricted Subsidiaries before and after giving effect to such notice of
designation and a statement demonstrating, in reasonable detail, compliance with
this SECTION 8.12(c).

SECTION 9         NEGATIVE COVENANTS.

         Borrower covenants and agrees to perform, observe, and comply with each
of the following covenants, from the Closing Date and so long thereafter as
Lenders are committed to make any Credit Extensions under this Agreement and
thereafter until the payment in full of all Principal Debt, all L/C Obligations,
and payment in full of all other interest, fees, and other amounts of the
Obligation then due and owing, unless Borrower receives a prior written consent
to the contrary by Administrative Agent as authorized by Required Lenders (or
all Lenders, in the case of SECTION 9.6):

         9.1      EMPLOYEE BENEFIT PLANS. Borrower shall not, and shall not
permit any ERISA Affiliate to, directly or indirectly, engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Tax
Code), and the Companies and their respective ERISA Affiliates shall not,
directly or indirectly, (a) incur any "accumulated funding deficiency" as such
term is defined in Section 302 of ERISA with respect to any Employee Plan, (b)
permit any Employee Plan to be subject to involuntary termination proceedings
pursuant to Title IV of ERISA, or (c) fully or partially withdraw from any
Multiemployer Plan, if such prohibited transaction, accumulated funding
deficiency, termination proceeding, or withdrawal would result individually or
in the aggregate in liability on the part of Borrower in excess of $20,000,000.

         9.2      LIENS. Borrower shall not, and shall not permit any other
Restricted Company to, directly or indirectly, (a) create, incur, or suffer or
permit to be created or incurred or to exist any Lien upon any Stock of any
Restricted Subsidiary (other than Stock not owned by a Company), or (b) create,
incur, or suffer or permit to be created or incurred or to exist any Lien upon
any of its other assets, except in the case of CLAUSE (b):

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       42


         (i)      pledges or deposits made to secure payment of worker's
compensation, or to participate in any fund in connection with worker's
compensation, unemployment insurance, pensions, or other social security
programs;

         (ii)     good-faith pledges or deposits made to secure performance of
bids, tenders, insurance or other contracts (other than for the repayment of
borrowed money), or leases, or to secure statutory obligations, surety or appeal
bonds, or indemnity, performance, or other similar bonds as all such Liens arise
in the ordinary course of business of the Restricted Companies;

         (iii)    encumbrances consisting of zoning restrictions, easements, or
other restrictions on the use of real property, none of which impair in any
material respect the use of such property by the Person in question in the
operation of its business, and none of which is violated by existing or proposed
structures or land use;

         (iv)     Liens of landlords or of mortgagees of landlords, arising
solely by operation of law, on fixtures and movable property located on premises
leased in the ordinary course of business;

         (v)      the following, so long as the applicability, amount, or
validity of which is being contested in good faith by appropriate proceedings
diligently conducted, and against which reserves or other provisions required by
GAAP have been made, levy and execution thereon have been stayed and continue to
be stayed, and they do not in the aggregate materially detract from the value of
the property of the Person in question, or materially impair the use thereof in
the operation of its business: (A) claims and Liens for Taxes (other than Liens
relating to Environmental Laws or ERISA); (B) claims and Liens upon, and defects
of title to, real or personal property, including any attachment of personal or
real property or other legal process prior to adjudication of a dispute of the
merits; and (C) claims and Liens of mechanics, materialmen, warehousemen,
carriers, landlords, or other like Liens;

         (vi)     Liens in favor of Administrative Agent with respect to Cash
Collateralized Letters of Credit;

         (vii)    Liens in favor of Borrower;

         (viii)   Liens in assets or properties acquired with purchase money
Debt securing only such purchase money Debt;

         (ix)     Liens on any property or asset of any corporation or other
entity existing at the time such corporation or other entity becomes a
Subsidiary or is merged or consolidated with or into any Restricted Company or
at the time such property or asset is acquired from such corporation or other
entity, other than any Lien placed on any property or asset of such corporation
or other entity in contemplation of such acquisition, merger, or consolidation;

         (x)      Liens securing non-recourse Debt incurred in connection with
industrial revenue or similar financing;

         (xi)     Liens for current taxes not yet due; and

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       43


         (xii)    any renewals, extensions, or refinancings (but not increase in
the principal amount thereof) of any of the foregoing Permitted Liens.

         9.3      SUBSIDIARY INDEBTEDNESS; LIMITATIONS ON UPSTREAMING. Borrower
shall not permit any Restricted Subsidiary to guaranty any Debt of Borrower
unless such Restricted Subsidiary also executes a pari passu guaranty of the
Obligation. Borrower shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly agree to any restriction or limitation on the making
of dividends or distributions, the repaying of loans or advances or the
transferring of assets from any Restricted Subsidiary to Borrower or any other
Restricted Subsidiary, except (a) restrictions and limitations imposed by Legal
Requirements, (b) customary restrictions and limitations contained in agreements
relating to the sale of a Subsidiary or its assets that is permitted hereunder
and (c) any other restrictions that could not reasonably be expected to cause a
Material Adverse Event.

         9.4      TRANSACTIONS WITH AFFILIATES. Borrower shall not, and shall
not permit any other Restricted Company to, enter into any transaction with any
of its Affiliates, other than transactions upon fair and reasonable terms not
materially less favorable than such Restricted Company could obtain or could
become entitled to in an arm's-length transaction with a Person that was not its
Affiliate.

         9.5      COMPLIANCE WITH DOCUMENTS. Borrower shall not, and shall not
permit any other Company to, violate the provisions of its Constituent
Documents, or modify, repeal, replace, or amend any provision of its Constituent
Documents, if such action could materially and adversely affect the Rights of
any Credit Party under this Agreement or the other Loan Documents.

         9.6      ASSIGNMENT. Borrower shall not assign or transfer any of its
Rights, duties, or obligations under any of the Loan Documents.

         9.7      FISCAL YEAR AND ACCOUNTING METHODS. Borrower shall not, and
shall not permit any other Restricted Company to, change its method of
accounting, other than immaterial changes in methods or as required by GAAP.
Borrower shall not, and shall not permit any other Restricted Company to, change
its fiscal year for book accounting purposes, except upon the delivery of
written notice to Administrative Agent.

         9.8      GOVERNMENT REGULATIONS. Borrower shall not, and shall not
permit any other Restricted Company to, conduct its business in such a way that
it will become subject to regulation under the Investment Company Act of 1940,
as amended, the Public Utility Holding Company Act of 1935, as amended, or any
other Legal Requirement (other than Regulations T, U, and X of the Board of
Governors of the Federal Reserve System) which regulates the incurrence of Debt.

         9.9      SALE OF ASSETS. Borrower shall not, and shall not permit any
other Restricted Company to, sell, assign, transfer, or otherwise dispose of all
or substantially all of its assets, other than (a) sales, assignments,
transfers, or other dispositions of assets by a Restricted Subsidiary to
Borrower or to another Restricted Subsidiary and (b) sales, assignments,
transfers, or other dispositions of assets (to Persons other than Borrower or a
Restricted Subsidiary) of Restricted Subsidiaries (i) having an aggregate fair
market value not to exceed $100,000,000 in any fiscal year, or (ii) in the
ordinary course of business.

         9.10     MERGERS AND DISSOLUTIONS; SALE OF CAPITAL STOCK. Borrower
shall not, and shall not permit any other Restricted Company to, directly or
indirectly, merge or consolidate with any other Person, other than (a) mergers
or consolidations involving Borrower if Borrower is the surviving entity, and
(b) mergers or consolidations among Wholly-owned Companies, in each case so long
as no Potential

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       44


Default or Event of Default exists or would result therefrom; provided that in
any merger involving Restricted Company, a Restricted Company must be the
surviving entity. Borrower shall not, and shall not permit any other Restricted
Company to, liquidate, wind up, or dissolve (or suffer any liquidation or
dissolution), other than liquidations, wind ups, or dissolutions incident to
mergers or consolidations permitted under this SECTION 9.10. Borrower shall not,
and shall not permit any other Company to, sell, assign, lease, transfer, or
otherwise dispose of the Stock of any other Restricted Company, other than
sales, assignments, leases, transfers, or other such dispositions to another
Company. Notwithstanding the foregoing, nothing in this Agreement shall prohibit
any mergers, consolidations, liquidations, wind ups, or dissolutions of any
Subsidiary or the sale, assignment, lease, transfer, or other disposal of the
Stock of any Subsidiary so long as (i) no Potential Default or Event of Default
exists or would result from such merger, consolidation, liquidation, wind up, or
dissolution or such sale, assignment, lease, transfer, or other disposal of such
Stock, (ii) after giving effect thereto, the character of the business of the
Restricted Companies, on a consolidated basis, will not be materially changed,
and (iii) the assets, annual revenues, and annual net income, in each case
determined in accordance with GAAP, of the affected Subsidiary does not exceed
$100,000,000.

         9.11     NEW BUSINESS. Borrower shall not, and shall not permit any
other Restricted Company to, directly or indirectly, permit or suffer to exist
any material change (on a consolidated basis) in the type of businesses in which
it is engaged from the businesses (on a consolidated basis) of the Companies as
conducted on the Closing Date.

         9.12     FINANCIAL COVENANTS.

         (a)      LEVERAGE RATIO. Borrower shall not permit the Leverage Ratio
(expressed as a percent), as of the last day of any fiscal quarter of Borrower,
to be greater than fifty-five percent (55%).

         (b)      INTEREST COVERAGE. Borrower shall not permit the Interest
Coverage Ratio, as of the last day of any fiscal quarter of Borrower, to be less
than 2.0 to 1.0.

         (c)      MINIMUM TANGIBLE NET WORTH. Borrower shall not permit
Consolidated Tangible Net Worth, as of any date, to be less than the sum of (a)
$1,700,000,000, plus (b) fifty percent (50%) of the amount of Net Proceeds from
any Equity Issuance subsequent to March 31, 2003, plus (c) fifty percent (50%)
of Cumulative Consolidated Net Income.

SECTION 10 DEFAULT.

         The term "EVENT OF DEFAULT" means the occurrence of any one or more of
the following events:

         10.1     PAYMENT OF OBLIGATION. The failure or refusal of Borrower to
pay (a) all or any part of the Principal Debt or any L/C Obligation when the
same becomes due (whether by its terms, by acceleration, or as otherwise
provided in the Loan Documents), or (b) any other part of the Obligation within
five (5) calendar days after the due date, or (c) the indemnification and
reimbursement obligations provided for in the Loan Documents after demand
therefor.

         10.2     COVENANTS. The failure or refusal of Borrower (and, if
applicable, any other Company) to punctually and properly perform, observe, and
comply with:

         (a)      any covenant, agreement, or condition contained in SECTION 8.3
(other than SECTIONS 8.3(e), 8.3(f), and 8.3(g)); or

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                                       45


         (b)      any covenant, agreement, or condition contained in SECTIONS
8.3(e), 8.3(f), 8.3(g), 8.12, or 9, and such failure or refusal continues
unremedied for ten (10) days after the earlier of (i) notice given by
Administrative Agent to Borrower of such failure or refusal, or (ii) Borrower's
actual knowledge of such failure or refusal; or

         (c)      any other covenant, agreement, or condition contained in any
Loan Document (other than the covenants to pay the Obligation and the covenants
in CLAUSE (a) or (b) preceding) and such failure or refusal continues unremedied
for thirty (30) days after the earlier of (i) notice given by Administrative
Agent to Borrower of such failure or refusal, or (ii) Borrower's actual
knowledge of such failure or refusal.

         10.3     DEBTOR RELIEF. Any Restricted Company (a) shall not be
Solvent, (b) fails to pay its Debts generally as they become due, (c) makes an
assignment for the benefit of creditors, (d) voluntarily seeks, consents to, or
acquiesces in the benefit of any Debtor Relief Law, other than as a creditor or
claimant, or (e) becomes a party to or is made the subject of any proceeding
provided for by any Debtor Relief Law, other than as a creditor or claimant,
that could suspend or otherwise adversely affect the Rights of any Credit Party
granted in the Loan Documents (unless, in the event such proceeding is
involuntary, the petition instituting same is dismissed within sixty (60) days
after its filing without the entry of an order for relief or the appointment of
a receiver) or an order of relief or judgment is entered in, or a receiver or
similar officer is appointed pursuant to, any such proceeding.

         10.4     JUDGMENTS AND ATTACHMENTS. Any Restricted Company fails,
within sixty (60) days after entry, to pay, bond, or otherwise discharge any
judgment or order for the payment of money in excess of $20,000,000
(individually or collectively) or any warrant of attachment, sequestration, or
similar proceeding against any Restricted Company's assets having a value
(individually or collectively) of $20,000,000, in each case, which is not stayed
on appeal.

         10.5     GOVERNMENT ACTION.

         (a)      A final non-appealable order is issued by any Governmental
Authority, including, but not limited to, the United States Justice Department,
seeking to cause any Restricted Company to divest a significant portion of its
assets pursuant to any antitrust, restraint of trade, unfair competition,
industry regulation, or similar Legal Requirements; or

         (b)      Any Governmental Authority shall condemn, seize, or otherwise
appropriate, or take custody or control of all or any substantial portion of the
assets of any Restricted Company.

         10.6     MISREPRESENTATION. Any representation or warranty made by
Borrower contained in any Loan Document shall at any time prove to have been
incorrect in any material respect when made.

         10.7     CHANGE OF CONTROL. A Change in Control of Borrower shall
occur.

         10.8     DEFAULT UNDER OTHER DEBT AND AGREEMENTS.

         (a)      Any Restricted Company fails to make any payments when due
(after lapse of any applicable grace periods) with respect to any Debt of such
Restricted Company (other than the Obligation) in excess (individually or
collectively) of $20,000,000; and

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                                       46


         (b)      Any default exists under any agreement (other than the Loan
Documents) to which any Restricted Company is a party, which has not been waived
by the parties thereto, the effect of which has been to cause, or to permit any
Person to cause, an amount of Debt of such Restricted Company in excess
(individually or collectively) of $20,000,000 to become due and payable by such
Restricted Company (whether by acceleration or by its terms).

         10.9     EMPLOYEE BENEFIT PLANS.

         (a)      A "Reportable Event" or "Reportable Events," or a failure to
make a required installment or other payment (within the meaning of Section
412(n)(1) of the Tax Code), shall have occurred with respect to any Employee
Plan or Plans that is reasonably expected to result in liability of Borrower to
the PBGC or to an Employee Plan in an aggregate amount exceeding $20,000,000; or

         (b)      Borrower or any ERISA Affiliate has provided to any affected
party a sixty (60) day notice of intent to terminate an Employee Plan pursuant
to a distress termination in accordance with Section 4041(c) of ERISA if the
liability reasonably expected to be incurred as a result of such termination
will exceed $20,000,000; or

         (c)      A trustee shall be appointed by a United States district court
to administer any such Employee Plan pursuant to Section 4042(b) of ERISA; or

         (d)      The PBGC shall institute proceedings (including giving notice
of intent thereof) to terminate any such Employee Plan if such termination
proceeding is reasonably expected to result in liability on the part of Borrower
in excess of $20,000,000; or

         (e)      (i) Borrower or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred withdrawal liability
(within the meaning of Section 4201 of ERISA) to such Multiemployer Plan, (ii)
Borrower or such ERISA Affiliate does not have reasonable grounds for contesting
such withdrawal liability or is not contesting such withdrawal liability in a
timely and appropriate manner and (iii) the amount of such withdrawal liability
specified in such notice, when aggregated with all other amounts required to be
paid to Multiemployer Plans in connection with withdrawal liabilities
(determined as of the date or dates of such notification), exceeds $20,000,000;
or

         (f)      Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
if solely as a result of such reorganization or termination the aggregate annual
contributions of Borrower and its ERISA Affiliates to all Multiemployer Plans
that are then in reorganization or have been or are being terminated have been
or will be increased over the amounts required to be contributed to such
Multiemployer Plans for their most recently completed plan years by an amount
exceeding $20,000,000.

         10.10    VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS. Any Loan
Document shall, at any time after its execution and delivery and for any reason,
cease to be in full force and effect in any material respect or be declared to
be null and void (other than in accordance with the terms hereof or thereof) or
the validity or enforceability thereof be contested by Borrower or Borrower
shall deny in writing that it has any or any further liability or obligations
under any Loan Document to which it is a party.

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                                       47


SECTION 11 RIGHTS AND REMEDIES.

         11.1     REMEDIES UPON DEFAULT.

         (a)      If an Event of Default exists under SECTION 10.3(C), 10.3(D),
or 10.3(e) then (i) the commitment to extend credit hereunder shall
automatically terminate (ii) the entire unpaid balance of the Obligation shall
automatically become due and payable, and (iii) Borrower shall automatically be
required to Cash Collateralize the then-undrawn amount of outstanding Letters of
Credit (in an amount equal to the outstanding amount thereof), in each case
without any action or notice of any kind whatsoever.

         (b)      If any Event of Default exists, then Administrative Agent may
(and, subject to the terms of SECTION 12, shall upon the request of Required
Lenders) or Required Lenders may, do any one or more of the following: (i) if
the maturity of the Obligation has not already been accelerated under SECTION
11.1(a), then declare the entire unpaid balance of the Obligation, or any part
thereof, immediately due and payable, whereupon it shall be due and payable;
(ii) terminate the commitments of Lenders to extend credit hereunder; (iii)
reduce any claim to judgment; (iv) to the extent permitted by all Legal
Requirements, exercise (or request each Lender to, and each Lender shall be
entitled to, exercise) the Rights of offset or banker's Lien against the
interest of any Company in and to every account and other property of any
Company which are in the possession of any Credit Party to the extent of the
full amount of the Obligation (to the extent permitted by all Legal
Requirements, Borrower being deemed directly obligated to each Credit Party in
the full amount of the Obligation for such purposes); (v) require that Borrower
Cash Collateralize the then-undrawn amount of outstanding Letters of Credit (in
an amount equal to the outstanding amount thereof); and (vi) exercise any and
all other legal or equitable Rights afforded by the Loan Documents, the Legal
Requirements of the State of Texas, or any other applicable jurisdiction as
Administrative Agent shall deem appropriate, or otherwise, including, but not
limited to, the Right to bring suit or other proceedings before any Governmental
Authority either for specific performance of any covenant or condition contained
in any of the Loan Documents or in aid of the exercise of any Right granted to
any Credit Party in any of the Loan Documents; provided that each Lender
reserves the right to bring suit to recover Obligations owing to such Lender
after such Obligations become due and payable in the event Administrative Agent
or Required Lenders do not do so on its behalf.

         11.2     BORROWER WAIVERS. To the extent permitted by all Legal
Requirements, Borrower hereby waives presentment and demand for payment,
protest, notice of intention to accelerate, notice of acceleration, and notice
of protest and nonpayment, and agrees that its liability with respect to the
Obligation (or any part thereof) shall not be affected by any renewal or
extension in the time of payment of the Obligation (or any part thereof), by any
indulgence, or by any release or change in any security for the payment of the
Obligation (or any part thereof).

         11.3     PERFORMANCE BY ADMINISTRATIVE AGENT. If any covenant, duty, or
agreement of Borrower is not performed in accordance with the terms of the Loan
Documents, while an Event of Default exists, then Administrative Agent may, at
its option (but subject to the approval of Required Lenders), perform or attempt
to perform such covenant, duty, or agreement on behalf of Borrower. In such
event, any amount expended by Administrative Agent in such performance or
attempted performance shall be payable by Borrower to Administrative Agent on
demand, shall become part of the Obligation, and shall bear interest at the
Default Rate from the date of such expenditure by Administrative Agent until
paid. Notwithstanding the foregoing, it is expressly understood that
Administrative Agent

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                                       48


does not assume, and shall never have, except by its express written consent,
any liability or responsibility for the performance of any covenant, duty, or
agreement of Borrower.

         11.4     DELEGATION OF DUTIES AND RIGHTS. The Credit Parties may
perform any of their duties or exercise any of their Rights under the Loan
Documents by or through their respective Representatives.

         11.5     NOT IN CONTROL. Nothing in any Loan Document shall, or shall
be deemed to (a) give any Credit Party the Right to exercise control over the
assets (including real property), affairs, or management of any Company, (b)
preclude or interfere with compliance by any Company with any Legal Requirement,
or (c) require any act or omission by any Company that may be harmful to Persons
or property. Any "Material Adverse Event" or other materiality qualifier in any
representation, warranty, covenant, or other provision of any Loan Document is
included for credit documentation purposes only and shall not, and shall not be
deemed to, mean that any Credit Party acquiesces in any non-compliance by any
Company with any Legal Requirement or document, or that any Credit Party does
not expect any Company to promptly, diligently, and continuously carry out all
appropriate removal, remediation, and termination activities required or
appropriate in accordance with all Environmental Laws. The Credit Parties have
no fiduciary relationship with or fiduciary duty to any Company arising out of
or in connection with the Loan Documents, and the relationship between the
Credit Parties, on the one hand, and the Companies, on the other hand, in
connection with the Loan Documents is solely that of debtor and creditor. The
power of the Credit Parties under the Loan Documents is limited to the Rights
provided in the Loan Documents, which Rights exist solely to assure payment and
performance of the Obligation and may be exercised in a manner calculated by the
Credit Parties in their respective good faith business judgment.

         11.6     COURSE OF DEALING. The acceptance by any Credit Party at any
time and from time to time of partial payment on the Obligation shall not be
deemed to be a waiver of any Event of Default then existing. No waiver by any
Credit Party of any Event of Default shall be deemed to be a waiver of any other
then-existing or subsequent Event of Default. No delay or omission by any Credit
Party in exercising any Right under the Loan Documents shall impair such Right
or be construed as a waiver thereof or any acquiescence therein, nor shall any
single or partial exercise of any such Right preclude other or further exercise
thereof, or the exercise of any other Right under the Loan Documents or
otherwise.

         11.7     CUMULATIVE RIGHTS. All Rights available to the Credit Parties
under the Loan Documents are cumulative of and in addition to all other Rights
granted to the Credit Parties at law or in equity, whether or not the Obligation
is due and payable and whether or not the Credit Parties have instituted any
suit for collection, foreclosure, or other action in connection with the Loan
Documents.

         11.8     APPLICATION OF PROCEEDS. Any and all proceeds ever received by
any Credit Party from the exercise of any Rights pertaining to the Obligation
shall be applied to the Obligation in the order and manner set forth in SECTION
3.7.

         11.9     CERTAIN PROCEEDINGS. Borrower will promptly execute and
deliver, or cause the execution and delivery of, all applications, certificates,
instruments, registration statements, and all other documents and papers any
Credit Party may reasonably request in connection with the obtaining of any
consent, approval, registration, qualification, permit, license, or
Authorization of any Governmental Authority or other Person necessary or
appropriate for the effective exercise of any Rights under the Loan Documents.
Because Borrower agrees that the Credit Parties' remedies at law for failure of
Borrower to comply with the provisions of this SECTION 11.9 would be inadequate
and that such failure would not be

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                                       49


adequately compensable in damages, Borrower agrees that the covenants of this
SECTION 11.9 may be specifically enforced.

         11.10    EXPENSES; INDEMNIFICATION.

         (a)      Borrower agrees (i) to pay or reimburse Administrative Agent
for all reasonable out-of-pocket costs and expenses incurred in connection with
the development, preparation, negotiation, and execution of this Agreement and
the other Loan Documents and any amendment, waiver, consent, or other
modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (ii) to pay or reimburse
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or the other Loan Documents (including
all such costs and expenses incurred during any "workout" or restructuring in
respect of the Obligation and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs. The
foregoing costs and expenses shall include all search, filing, recording, title
insurance, and appraisal charges and fees and taxes related thereto, and other
out-of-pocket expenses incurred by Administrative Agent and the cost of
independent public accountants and other outside experts retained by the
Administrative Agent or any Lender. All amounts due under this SECTION 11.10(a)
shall be payable within ten (10) Business Days after demand therefor. The
agreements in this SECTION 11.10(a) shall survive the termination of the
Commitments and repayment of the Obligation.

         (b)      Whether or not the transactions contemplated hereby are
consummated, Borrower shall indemnify and hold harmless each Agent-Related
Person, each Lender and their respective Affiliates, directors, officers,
employees, counsel, agents, and attorneys-in-fact (collectively, "INDEMNITEES")
from and against any and all liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses, and
disbursements (including Attorney Costs) of any kind or nature whatsoever which
may at any time be imposed on, incurred by or asserted against any such
Indemnitee in any way relating to or arising out of or in connection with (i)
the execution, delivery, enforcement, performance or administration of any Loan
Document or any other agreement, letter or instrument delivered in connection
with the transactions contemplated thereby or the consummation of the
transactions contemplated thereby, (ii) any Commitment, Borrowing, Letter of
Credit, or the use or proposed use of the proceeds therefrom, or (iii) any
actual or alleged presence or release of Hazardous Materials on or from any
property currently or formerly owned or operated by Borrower or any Subsidiary,
or any liability under Environmental Law related in any way to Borrower or any
Subsidiary, or (iv) any actual or prospective claim, litigation, investigation,
or proceeding relating to any of the foregoing, whether based on contract, tort,
or any other theory (including any investigation of, preparation for, or defense
of any pending or threatened claim, investigation, litigation, or proceeding)
and regardless of whether any Indemnitee is a party thereto (all the foregoing,
collectively, the "INDEMNIFIED LIABILITIES"), IN ALL CASES, WHETHER OR NOT
CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE NEGLIGENCE OF THE
INDEMNITEE; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses, or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence, bad faith, or
willful misconduct of such Indemnitee or such Indemnitee's willful failure to
pay under any Letter of Credit after the presentation to it by the beneficiary
of a sight draft and certificate(s) strictly complying with the terms and
conditions of a Letter of Credit. No Indemnitee shall be liable for any damages
arising from the use by others of any information or other

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                                       50


materials obtained through IntraLinks or other similar information transmission
systems in connection with this Agreement, nor shall Borrower or any Indemnitee
have any liability for any indirect, punitive, or consequential damages relating
to this Agreement or any other Loan Document or arising out of its activities in
connection herewith or therewith (whether before or after the Closing Date). All
amounts due under this SECTION 11.10(B) shall be payable within ten (10)
Business Days after demand therefor. The agreements in this SECTION 11.10(B)
shall survive the resignation of Administrative Agent, the replacement of any
Lender, the termination of the Commitments, and the repayment, satisfaction or
discharge of the Obligation.

SECTION 12 ADMINISTRATIVE AGENT.

         12.1     APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.

         (a)      Each Lender hereby irrevocably appoints, designates, and
authorizes Administrative Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, Administrative Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Administrative Agent have or be deemed to have any fiduciary
relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to Administrative Agent is not intended to connote any fiduciary or
other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.

         (b)      Each L/C Issuer shall act on behalf of Lenders with respect to
the Letters of Credit issued by it and the Letter of Credit Applications
associated therewith, and such L/C Issuer shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this SECTION 12 with
respect to any acts taken or omissions suffered by such L/C Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and the
Letter of Credit Applications pertaining to such Letters of Credit as fully as
if the term "Administrative Agent" as used in this SECTION 12 and in the
definition of "Agent-Related Person" included such L/C Issuer with respect to
such acts or omissions, and (ii) as additionally provided herein with respect to
such L/C Issuer.

         12.2     DELEGATION OF DUTIES. Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees, or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct.

         12.3     LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person
shall (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct in connection with its duties expressly set forth herein), or (b) be
responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by any Company or any officer
thereof, contained herein or in any other Loan Document, or in any certificate,

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                                       51


report, statement, or other document referred to or provided for in, or received
by Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability, or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Company or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books, or
records of any Company or any Affiliate thereof.

         12.4     RELIANCE BY ADMINISTRATIVE AGENT.

         (a)      Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement, or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to any
Company), independent accountants and other experts selected by Administrative
Agent. Administrative Agent shall be fully justified in failing or refusing to
take any action under any Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Lenders (or such greater number of Lenders as may be expressly
required hereby in any instance) and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders.

         (b)      For purposes of determining compliance with the conditions
specified in SECTION 6.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless Administrative Agent shall have
received notice from such Lender prior to the proposed Closing Date specifying
its objection thereto.

         12.5     NOTICE OF EVENT OF DEFAULT. Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Event of Default,
except with respect to defaults in the payment of principal, interest, and fees
required to be paid to Administrative Agent for the account of the Lenders,
unless Administrative Agent shall have received written notice from a Lender or
Borrower referring to this Agreement, describing such Event of Default and
stating that such notice is a "notice of default." Administrative Agent will
notify Lenders of its receipt of any such notice and of its giving of notice to
Borrower pursuant to SECTIONS 10.2(b) or (c). Administrative Agent shall take
such action with respect to such Event of Default as may be directed by the
Required Lenders in accordance with SECTION 10; provided, however, that unless
and until Administrative Agent has received any such direction, Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default as it shall deem
advisable or in the best interest of the Lenders.

         12.6     CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT. Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or

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                                       52


review of the affairs of any Company or any Affiliate thereof, shall be deemed
to constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. Each Lender represents to
Administrative Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial, and other condition and
creditworthiness of the Companies, and all applicable bank or other regulatory
Legal Requirements relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to Borrower
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals, and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial, and other condition and creditworthiness of Borrower.
Except for notices, reports, and other documents expressly required to be
furnished to Lenders by Administrative Agent herein, Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial, and other condition or creditworthiness of any Companies or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.

         12.7     INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the
transactions contemplated hereby are consummated, Lenders shall indemnify upon
demand each Agent-Related Person (to the extent not reimbursed by or on behalf
of any Company and without limiting the obligation of any Company to do so), Pro
Rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided, however, that no Lender shall
be liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities to the extent determined in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person's own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the Required
Lenders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this SECTION 12.7. Without limitation of the foregoing, each Lender
shall reimburse Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment, or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that
Administrative Agent is not reimbursed for such expenses by or on behalf of
Borrower. The undertaking in this SECTION 12.7 shall survive termination of the
Aggregate Commitments, the payment of the Obligation, and the resignation of
Administrative Agent.

         12.8     ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
Administrative Agent and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, and generally engage in any
kind of banking, trust, financial advisory, underwriting, or other business with
each Company and its respective Affiliates as though Administrative Agent were
not Administrative Agent and without notice to or consent of Lenders. Lenders
acknowledge that, pursuant to such activities, Administrative Agent or its
Affiliates may receive information regarding any Company or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Company or such Affiliate) and acknowledge that Administrative
Agent shall be under no obligation to provide such information to them. With
respect to Borrowings, Administrative Agent shall have the same rights and
powers under this Agreement as any other Lender and may exercise such rights and
powers as though it

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                                       53


were not Administrative Agent, and the terms "Lender" and "Lenders" include
Administrative Agent in its individual capacity.

         12.9     SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may
resign as Administrative Agent upon thirty (30) days' notice to Lenders. If
Administrative Agent resigns under this Agreement, the Required Lenders shall
appoint from among Lenders a successor administrative agent for Lenders, which
successor administrative agent shall be consented to by Borrower at all times
other than during the existence of an Event of Default (which consent of
Borrower shall not be unreasonably withheld or delayed). If no successor
administrative agent is appointed prior to the effective date of the resignation
of Administrative Agent, Administrative Agent may appoint, after consulting with
Lenders and with the consent of Borrower at all times other than during the
existence of an Event of Default (which consent of Borrower shall not be
unreasonably withheld or delayed), a successor administrative agent from among
Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, the Person acting as such successor administrative agent shall
succeed to all the rights, powers, and duties of the retiring Administrative
Agent, and the term "Administrative Agent" shall mean such successor
administrative agent, and the retiring Administrative Agent's appointment,
powers, and duties as Administrative Agent shall be terminated without any
further act or deed on the part of any other Lender. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this SECTION 12 and SECTION 11.10 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement. If no successor administrative agent has accepted
appointment as Administrative Agent by the date which is thirty (30) days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.

         12.10    ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIMS. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition, or other judicial
proceeding relative to any Company, Administrative Agent (irrespective of
whether the principal of any Borrowing shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether
Administrative Agent shall have made any demand on Borrower) shall be entitled
and empowered, by intervention in such proceeding or otherwise:

         (a)      to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Borrowings and any
other Obligation that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of Lenders and
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements, and advances of Lenders and Administrative Agent and
their respective agents and counsel and all other amounts due Lenders and
Administrative Agent under SECTIONS 5 and 11.10) allowed in such judicial
proceeding; and

         (b)      to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
the Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Administrative Agent and
its agents and counsel, and any other amounts due Administrative Agent under
SECTIONS 5 and 11.10.

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                                       54


Nothing contained herein shall be deemed to authorize Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment, or composition affecting the Obligation
or the rights of any Lender or to authorize Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding.

         12.11    OTHER AGENT; ARRANGERS; AND MANAGERS. No Lender or other
Persons identified on the facing page or signature pages of this Agreement as a
"syndication agent," "documentation agent," "book manager," "arranger," or "lead
arranger" shall have any right, power, obligation, liability, responsibility, or
duty under this Agreement other than, in the case of such Lenders, those
applicable to all Lenders as such. Without limiting the foregoing, no Lender or
other Person so identified shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on any Lenders or other Persons so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.

SECTION 13 MISCELLANEOUS.

         13.1     HEADINGS. The headings, captions, and arrangements used in any
of the Loan Documents are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify, or modify the terms of the Loan
Documents, nor affect the meaning thereof.

         13.2     NONBUSINESS DAYS. In any case where any payment or action is
due under any Loan Document on a day which is not a Business Day, such payment
or action may be delayed until the next-succeeding Business Day, but interest
and fees shall continue to accrue in respect of any payment to which it is
applicable until such payment is in fact made; provided that if, in the case of
any such payment in respect of a Eurodollar Borrowing, the next-succeeding
Business Day is in the next calendar month, then such payment shall be made on
the next-preceding Business Day.

         13.3     COMMUNICATIONS.

         (a)      GENERAL. Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission). All such written notices shall be mailed,
faxed, or delivered to the applicable address, facsimile number, or (subject to
SECTION 13.3(c) below) electronic mail address, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number specified for such Person on SCHEDULE
2.1 or to such other address, facsimile number, electronic mail address, or
telephone number as shall be designated by such party in a notice to the other
parties. All such notices and other communications shall be deemed to be given
or made upon the earlier to occur of (i) actual receipt by the relevant party
hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on
behalf of the relevant party hereto; (B) if delivered by mail, four (4) Business
Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of SECTION
13.3(c) below), when delivered; provided, however, that notices and other
communications to Administrative Agent or any L/C Issuer pursuant to SECTION 2
shall not be effective until actually received by Administrative Agent or such
L/C Issuer. In no event shall a voicemail message be effective as a notice,
communication or confirmation hereunder.

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                                       55


         (b)      EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Companies, Administrative Agent, and Lenders. Administrative Agent may also
require that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile document or signature.

         (c)      LIMITED USE OF ELECTRONIC MAIL. Electronic mail and Internet
and intranet websites may be used only to distribute routine communications and
to distribute Loan Documents for execution by the parties thereto, and may not
be used for any other purpose.

         (d)      RELIANCE BY ADMINISTRATIVE AGENT AND LENDERS. Administrative
Agent and Lenders shall be entitled to rely and act upon any notices (including
telephonic Notices of Borrowing) purportedly given by or on behalf of Borrower
even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. Borrower shall indemnify each
Agent-Related Person and each Lender from all losses, costs, expenses, and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of Borrower. All telephonic notices to and
other communications with Administrative Agent may be recorded by Administrative
Agent, and each of the parties hereto hereby consents to such recording.

         13.4     FORM AND NUMBER OF DOCUMENTS. Each agreement, document,
instrument, or other writing to be furnished under any provision of this
Agreement must be in form and substance and in such number of counterparts as
may be reasonably satisfactory to Administrative Agent and its counsel.

         13.5     EXCEPTIONS TO COVENANTS. Borrower shall not, and shall not
permit any other Company to, take any action or fail to take any action which is
permitted as an exception to any of the covenants contained in any Loan Document
if such action or omission would result in the breach of any other covenant
contained in any of the Loan Documents.

         13.6     SURVIVAL. All covenants, agreements, undertakings,
representations, and warranties made in any of the Loan Documents shall survive
the execution and delivery thereof and all closings under the Loan Documents.
All such representations and warranties have been or will be relied upon by
Administrative Agent and each Lender regardless of any investigation made by
Administrative Agent or any Lender or on their behalf and notwithstanding that
Administrative Agent or any Lender may have had notice or knowledge of any
Potential Default or Event of Default at the time of any Borrowing and shall
continue in full force and effect as long as any Borrowing or other Obligation
is outstanding. All rights of, and provisions relating to, reimbursement and
indemnification of any Credit Party shall survive termination of this Agreement
and payment in full of the Obligation.

         13.7     GOVERNING LAW. THE LEGAL REQUIREMENTS OF THE STATE OF TEXAS
AND OF THE UNITED STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF THE
PARTIES TO THE LOAN DOCUMENTS AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND
INTERPRETATION OF THE LOAN DOCUMENTS.

         13.8     INVALID PROVISIONS. If any provision in any Loan Document is
held to be illegal, invalid, or unenforceable, then such provision shall be
fully severable; the appropriate Loan Document shall be construed and enforced
as if such provision had never comprised a part thereof; and the remaining

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                                       56


provisions thereof shall remain in full force and effect and shall not be
affected by such provision or by its severance therefrom. Each Credit Party and
each Company party to such Loan Document agree to negotiate, in good faith, the
terms of a replacement provision as similar to the severed provision as may be
possible and be legal, valid, and enforceable.

         13.9     ENTIRETY. THE RIGHTS AND OBLIGATIONS OF BORROWER AND THE
CREDIT PARTIES SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS,
AND INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN SUCH PARTIES ARE
SUPERSEDED BY AND MERGED INTO SUCH WRITINGS. THIS AGREEMENT (AS AMENDED IN
WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY
BORROWER AND/OR ANY CREDIT PARTY (TOGETHER WITH ALL COMMITMENT LETTERS AND FEE
LETTERS AS THEY RELATED TO THE PAYMENT OF FEES AFTER THE CLOSING DATE)REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         13.10    JURISDICTION; VENUE; SERVICE OF PROCESS; JURY TRIAL. EACH
PARTY HERETO, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, HEREBY (A)
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED
IN TEXAS, AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN
ANY LEGAL PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND
THE OBLIGATION BY SERVICE OF PROCESS AS PROVIDED BY TEXAS LEGAL REQUIREMENTS,
(B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY ALL LEGAL
REQUIREMENTS, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY LITIGATION ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS
AND THE OBLIGATION BROUGHT IN ANY SUCH COURT, (C) IRREVOCABLY WAIVES ANY CLAIMS
THAT ANY LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM, (D) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF
ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH LITIGATION BY THE MAILING OF COPIES
THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, AT ITS
ADDRESS SET FORTH HEREIN, (E) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING
AGAINST ANY PARTY HERETO ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS
OR THE OBLIGATION SHALL BE BY COURT TRIAL WITHOUT JURY, AND (F) IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY ALL LEGAL REQUIREMENTS, ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT, THE TRANSACTIONS
CONTEMPLATED THEREBY, OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN
DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREINAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE;
AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR COPY OF
THIS SECTION 13.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. The scope of
each of the foregoing waivers is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter of
this transaction, including contract claims, tort claims, breach of duty claims,
and all other common law and statutory claims. Borrower and each other party to
this Agreement acknowledge that this waiver is a material inducement to the
agreement of each party hereto to enter into a business relationship, that each
has already relied on this waiver in entering into this Agreement, and each will
continue to rely on each of such waivers in related future dealings. Borrower
and each other party to this Agreement warrant and

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                                       57


represent that they have reviewed these waivers with their legal counsel, and
that they knowingly and voluntarily agree to each such waiver following
consultation with legal counsel. THE WAIVERS IN THIS SECTION 13.10 ARE
IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS, AND
REPLACEMENTS TO OR OF THIS OR ANY OTHER Loan Document. In the event of
Litigation, this Agreement may be filed as a written consent to a trial by the
court.

         13.11    AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS.

         (a)      Except as otherwise specifically provided, (i) this Agreement
may only be amended, modified or waived by an instrument in writing executed
jointly by Borrower and Required Lenders, and, in the case of any matter
affecting Administrative Agent by Administrative Agent, and may only be
supplemented by documents delivered or to be delivered in accordance with the
express terms hereof, and (ii) the other Loan Documents may only be the subject
of an amendment, modification, or waiver if Borrower and Required Lenders, and,
in the case of any matter affecting Administrative Agent (except as set forth
above), Administrative Agent, have approved same; provided that no such
amendment or waiver shall, unless signed by each Lender directly affected
thereby, (i) increase the Commitment of such Lender, (ii) reduce the principal
of or rate of interest on any Unreimbursed Amount or Borrowing or any fees or
other amounts payable hereunder, (iii) postpone any date fixed for the payment
of any scheduled installment of principal of or interest on any Unreimbursed
Amount or Borrowing or any fees or other amounts payable hereunder or for
termination of any of the Total Commitment, (iv) change the percentage of the
Total Commitment or of the unpaid principal amount of the Notes, or the number
of Lenders, which shall be required for Lenders or any of them to take any
action under this SECTION 13.11(a) or any other provision of this Agreement; (v)
amend, modify or waive this SECTION 13.11(a), or (vi) amend, modify or waive the
Pro Rata or ratable treatment of Lenders under this Agreement, or amend, modify
or waive the obligation of Borrower to Cash Collateralize the outstanding amount
of Letters of Credit.

         (b)      Any conflict or ambiguity between the terms and provisions
herein and terms and provisions in any other Loan Document shall be controlled
by the terms and provisions herein.

         (c)      No course of dealing nor any failure or delay by any Credit
Party or any of its Representatives with respect to exercising any Right of any
Credit Party hereunder shall operate as a waiver thereof. A waiver must be in
writing and signed by Administrative Agent and Required Lenders (or by all
Lenders, if required hereunder) to be effective, and such waiver will be
effective only in the specific instance and for the specific purpose for which
it is given.

         13.12    MULTIPLE COUNTERPARTS. This Agreement may be executed in a
number of identical counterparts, each of which shall be deemed an original for
all purposes and all of which constitute, collectively, one agreement; but, in
making proof of this Agreement, it shall not be necessary to produce or account
for more than one such counterpart. It is not necessary that each Lender execute
the same counterpart so long as identical counterparts are executed by Borrower,
each Lender, and Administrative Agent. This Agreement shall become effective
when counterparts hereof shall have been executed and delivered to
Administrative Agent by each Lender, Administrative Agent, and Borrower, or,
when Administrative Agent shall have received telecopied, telexed, or other
evidence satisfactory to it that such party has executed and is delivering to
Administrative Agent a counterpart hereof.

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                                       58


         13.13    SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS.

         (a)      The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender 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 SECTION 13.13(b), (ii) by way of participation in
accordance with the provisions of SECTION 13.13(d), or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of SECTION
13.13(f). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
SECTION 13.13(d) and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

         (b)      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 outstanding Borrowings
(including for purposes of this SECTION 13.13(b) participations in L/C
Obligations) at the time owing to it); provided that: (i) except in the case of
an assignment of the entire remaining amount of the assigning Lender's
Commitment and outstanding Borrowings and participations in Unreimbursed Amounts
at the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund (as defined in SECTION 13.13(g)) with
respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Borrowings and participations in Unreimbursed Amounts
outstanding thereunder) subject to each such assignment, determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to Administrative Agent or, if "Trade Date" is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $5,000,000 or a whole
multiple of $500,000 in excess thereof, and after such assignment, no Lender
shall hold a Commitment of less than $5,000,000 unless each of Administrative
Agent and, so long as no Event of Default has occurred and is continuing,
Borrower otherwise consents (each such consent not to be unreasonably withheld
or delayed); (ii) 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 Borrowings or the Commitment assigned; (iii)
any assignment of a Commitment or unfunded participation in Unreimbursed Amounts
must be approved by Administrative Agent (which approval shall not be
unreasonably withheld) unless the Person that is the proposed assignee is itself
a Lender (whether or not the proposed assignee would otherwise qualify as an
Eligible Assignee); and (iv) the parties to each assignment shall execute and
deliver to Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500. Subject to acceptance and recording
thereof by Administrative Agent pursuant to SECTION 13.13(c), from and after the
effective date specified in each Assignment and Assumption, the Eligible
Assignee thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Assignment and Assumption, 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 and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption 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 to the benefits of SECTIONS 4.1,
4.5, and 4.6 (with respect to facts and circumstances occurring prior to the
effective date of such assignment) and 11.10). Upon request, Borrower (at its
expense) shall execute and deliver a Note to the assignee Lender. Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this subsection 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 SECTION 13.13(d).

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         (c)      Administrative Agent, acting solely for this purpose as an
agent of Borrower, shall maintain at Administrative Agent's office a copy of
each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of Lenders, and the Commitments of,
principal amounts of the Borrowings and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "REGISTER"). The entries in
the Register shall be conclusive in the absence of manifest error, and Borrower,
Administrative Agent, and Lenders may treat each 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 the contrary. The Register
shall be available for inspection by Borrower and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.

         (d)      Any Lender may at any time, without the consent of, or notice
to, Borrower or Administrative Agent, sell participations to any Person (other
than a natural person or Borrower or any of Borrower's Affiliates or
Subsidiaries) (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
its Commitment and/or Borrowings and participations in L/C Obligations 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, and (iii) Borrower,
Administrative Agent, and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification, or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other modification
described in the first proviso to SECTION 13.11(a) that directly affects such
Participant. Subject to SECTION 13.13(e), Borrower agrees that each Participant
shall be entitled to the benefits of SECTIONS 4.1, 4.5, and 4.6 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to SECTION 13.13(b).

         (e)      A Participant shall not be entitled to receive any greater
payment under SECTIONS 4.1 or 4.5 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 Borrower's
prior written consent. A Participant that would be a Lender that is not a
"United States person" within the meaning of Section 7701(a)(30) of the Tax
Code, if it were a Lender shall not be entitled to the benefits of SECTION 4.6
unless Borrower is notified of the participation sold to such Participant and
such Participant agrees, for the benefit of Borrower, to comply with SECTION 4.6
as though it were a Lender.

         (f)      Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

         (g)      As used herein, the following terms have the following
         meanings:

         APPROVED FUND means any Fund that is administered or managed by (a) a
         Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate
         of an entity that administers or manages a Lender.

         ELIGIBLE ASSIGNEE means: (a) a Lender; (b) an Affiliate of a Lender;
         (c) an Approved Fund; and (d) any other Person (other than a natural
         person) approved by (i) Administrative Agent (provided

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                                       60


         that Administrative Agent shall not give such approval of any such
         other Person unless such other Person has a combined capital and
         surplus of at least $250,000,000 and has among its usual business
         activities the issuance of or the purchase of participations in letters
         of credit), and (ii) unless an Event of Default has occurred and is
         continuing, Borrower (each such approval not to be unreasonably
         withheld or delayed); provided that notwithstanding the foregoing,
         "Eligible Assignee" shall not include Borrower or any of Borrower's
         Affiliates or Subsidiaries.

         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 and similar extensions of credit in the ordinary
         course of its business.

         (h)      Notwithstanding anything to the contrary contained herein, any
Lender that is a Fund may create a security interest in all or any portion of
the Borrowings owing to it and the Note, 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
SECTION 13.13, (i) no such pledge shall release the pledging Lender from any of
its obligations under the Loan Documents and (ii) such trustee shall not be
entitled to exercise any of the rights of a Lender under the Loan Documents even
though such trustee may have acquired ownership rights with respect to the
pledged interest through foreclosure or otherwise.

         13.14    DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN
CIRCUMSTANCES. The obligations of Borrower under the Loan Documents shall remain
in full force and effect until termination of the Total Commitment and payment
in full of the Principal Debt and of all interest, fees, and other amounts of
the Obligation then due and owing, except that SECTIONS 4, 11, and 13, and any
other provisions under the Loan Documents expressly intended to survive by the
terms hereof or by the terms of the applicable Loan Documents, shall survive
such termination. If at any time any payment of the principal of or interest on
any Note or any other amount payable by Borrower under any Loan Document is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy, or reorganization of any Company or otherwise, then the obligations
of Borrower under the Loan Documents with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.

         13.15    CONFIDENTIALITY. Each of Administrative Agent and Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees, and agents, including accountants, legal
counsel, and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority (including any self-regulatory
authority, such as the 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 thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this SECTION 13.15, to
(i) any assignee of or Participant in, or any prospective assignee 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 Borrower and its obligations, (g) with the
consent of Borrower, or (h) to the extent such Information (x) becomes publicly
available other than as a result of a breach of this SECTION 13.15 or (y)
becomes available to Administrative Agent or any Lender on a nonconfidential
basis from a source other than Borrower. For purposes of this Section,
"INFORMATION" means all information received from any Company relating to any
Company or any of

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       61


their respective businesses, other than any such information that is available
to Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Company, provided that, in the case of information received
from a Company after the date hereof, such information is clearly identified at
the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this SECTION 13.15 shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Notwithstanding anything herein to the contrary, "INFORMATION" shall not
include, and each party hereto may disclose without limitation of any kind, any
information with respect to the "tax treatment" and "tax structure" (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to such party relating to such
tax treatment and tax structure; provided that with respect to any document or
similar item that in either case contains information concerning the tax
treatment or tax structure of the transaction as well as other information, this
sentence shall only apply to such portions of the document or similar item that
relate to the tax treatment or tax structure of the Borrowings, and transactions
contemplated hereby.

         [REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGES FOLLOW]

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

                                       62


EXECUTED as of the first date written above.

                              CENTEX CORPORATION,
                              as Borrower

                              By: -s- Vicki A. Roberts
                                  --------------------------------
                                  Vicki A. Roberts
                                  Vice President and Treasurer

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              BANK OF AMERICA, N.A., as Administrative Agent
                              and as a Lender

                              By: -s- Mark Lariviere
                                  --------------------------------
                                  Mark Lariviere
                                  Managing Director

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              BANK ONE, NA, as Syndication Agent and as a
                              Lender

                              By: -s- James P. Krcmarik
                                  --------------------------------
                                  Name: James P. Krcmarik
                                  Title: Associate Director

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              JPMORGAN CHASE BANK, as a Lender

                              By: -s- David L. Howard
                                  --------------------------------
                                  Name: David L. Howard
                                  Title: Vice President

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              THE ROYAL BANK OF SCOTLAND PLC,
                              as a Lender

                              By: -s- David Apps
                                  --------------------------------
                                  Name: David Apps
                                  Title: Senior Vice President

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              BNP PARIBAS, as a Lender

                              By: -s- Jeff Tebeaux
                                  --------------------------------
                                  Name: Jeff Tebeaux
                                  Title: Vice President

                                       Henry F. Setina
                                  --------------------------------
                                       Henry F. Setina
                                           Director

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              CREDIT LYONNAIS NEW YORK BRANCH,
                              as a Lender

                              By: -s- Attila Koc
                                  --------------------------------
                                  Name: Attila Koc
                                  Title: Senior Vice President

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              CREDIT SUISSE FIRST BOSTON, ACTING
                              THROUGH ITS CAYMAN ISLANDS BRANCH,
                              as a Lender

                              By: -s- Bill O'Daly
                                  --------------------------------
                                  Name: Bill O'Daly
                                  Title: Director

                              By: Cassandra Droogan
                                  --------------------------------
                                  Name: Cassandra Droogan
                                  Title: Associate

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              SUNTRUST BANK, as a Lender

                              By: -s- W. John Wendler
                                  --------------------------------
                                  Name: W. John Wendler
                                  Title: Director

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              THE BANK OF TOKYO-MITSUBISHI, LTD.,
                              as a Lender

                              By:      -s- John M. Mearns
                                  --------------------------------
                                  Name: John M. Mearns
                                  Title: Vice President and Manager

                              By: -s- Brenda S. Trader
                                  --------------------------------
                                  Name: Brenda S. Trader
                                  Title: Banking Officer

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              COMERICA BANK, as a Lender

                              By: -s- Casey L. Ostrander
                                  --------------------------------
                                  Name: Casey L. Ostrander
                                  Title: Assistant Vice President

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              WASHINGTON MUTUAL BANK, FA,
                              as a Lender

                              By: -s- [ILLEGIBLE]
                                  --------------------------------
                                  Name: [ILLEGIBLE]
                                  Title: Senior Vice President

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              LLOYDS TSB BANK, PLC,
                              as a Lender

                              By: -s- Windsor R. Davies
                                  --------------------------------
                              Name: Windsor R. Davies
                              Title: Director, Corporate Banking, USA
                                          D061

                              By: -s- Richard M. Heath
                                  --------------------------------
                              Name: Richard M. Heath
                              Title: Vice President, Corporate Banking, USA
                                           H009

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              PNC BANK, NATIONAL ASSOCIATION,
                              as a Lender

                              By: -s- Douglas G. Paul
                                  --------------------------------
                                  Name: Douglas G. Paul
                                  Title: Senior Vice President

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              BANCA DI ROMA - CHICAGO BRANCH,
                              as a Lender

                              By: -s- Joyce Montgomery
                                  --------------------------------
                                  Name: Joyce Montgomery
                                  Title: Vice President

                              By: -s- Aurora Pensa
                                  --------------------------------
                                  Name: Aurora Pensa
                                  Title: Vice President

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              UBS AG, CAYMAN ISLANDS BRANCH,
                              as a Lender

                              By: -s- Patricia O'Kicki
                                  --------------------------------
                                  Name: Patricia O'Kicki
                                  Title: Director

                              By: -s- Wilfred V. Saint
                                  --------------------------------
                                  Name: Wilfred V. Saint
                                  Title: Associate Director
                                         Banking Products
                                         Services, US

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              THE NORTHERN TRUST COMPANY,
                              as a Lender

                              By: -s- Paul H. Theiss
                                  --------------------------------
                                  Name: Paul H. Theiss
                                  Title: Vice President

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                              US BANK NATIONAL ASSOCIATION,
                              as a Lender

                              By: -s- Joseph L. Sooter, Jr.
                                  --------------------------------
                                  Name: Joseph L. Sooter, Jr.
                                  Title: Vice President

                      SIGNATURE PAGE TO CENTEX CORPORATION
               LETTER OF CREDIT AND REIMBURSEMENT CREDIT AGREEMENT



                                                              [LETTER OF CREDIT]

                                    EXHIBIT A

                            FORM OF PROMISSORY NOTE

$_______________                                                 August 7, 2003

         FOR VALUE RECEIVED, the undersigned, CENTEX CORPORATION, a Nevada
corporation ("BORROWER"), hereby promises to pay to the order of
_______________________ ("LENDER"), at the offices of BANK OF AMERICA, N.A., as
Administrative Agent for Lender and others as hereinafter described, on the
Repayment Date for each Borrowing, the lesser of (i) _____________________
($____________) and (ii) the aggregate principal amount of such Borrowing
disbursed by Lender to Borrower and outstanding and unpaid on such Repayment
Date (together with accrued and unpaid interest thereon).

         This note has been executed and delivered under, and is subject to the
terms of, the Letter of Credit and Reimbursement Agreement dated as of August 7,
2003 (as amended, modified, supplemented, or restated from time to time, the
"AGREEMENT"), among Borrower, Lender and other lenders named therein, and
Agents, and is one of the "Notes" referred to therein. Unless defined herein,
capitalized terms used herein that are defined in the Agreement have the meaning
given to such terms in the Agreement. Reference is made to the Agreement for
provisions affecting this note regarding applicable interest rates, principal
and interest payment dates, final maturity, voluntary and mandatory prepayments,
acceleration of maturity, exercise of Rights, payment of attorneys' fees, court
costs and other costs of collection, certain waivers by Borrower and others now
or hereafter obligated for payment of any sums due hereunder and security for
the payment hereof. Without limiting the immediately preceding sentence,
reference is made to SECTION 3.6 of the Agreement for usury savings provisions.

         THE LAWS OF THE STATE OF TEXAS AND OF THE UNITED STATES OF AMERICA
SHALL GOVERN THE RIGHTS AND DUTIES OF BORROWER AND LENDER AND THE VALIDITY,
CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION HEREOF.

                                           CENTEX CORPORATION

                                           By __________________________________
                                              Name:  ___________________________
                                              Title: ___________________________

CENTEX EXHIBITS AND SCHEDULES

                                        1



                                                              [LETTER OF CREDIT]

                                    EXHIBIT B

                         FORM OF COMPLIANCE CERTIFICATE
                              (Centex Corporation)

DATE: _________________, ________

SUBJECT PERIOD: __________ended ________________, ______

ADMINISTRATIVE AGENT: Bank of America, N.A.

BORROWER: Centex Corporation

         This certificate is delivered under the Letter of Credit and
Reimbursement Agreement, dated as of August 7, 2003 (as amended, modified,
supplemented, or restated from time to time, the "CREDIT AGREEMENT"), among
Borrower, Administrative Agent, and other Agents and Lenders party thereto.
Capitalized terms used herein and not otherwise defined herein shall have the
meaning given to such terms in the Credit Agreement.

         The undersigned certifies to Lenders that:

         (a)      the undersigned is a Responsible Officer of Borrower in the
position(s) set forth under the signature below;

         (b)      the Financial Statements of the Companies attached to this
certificate were prepared in accordance with GAAP, and present fairly in all
material respects the consolidated financial condition and results of operations
of the Companies as of, and for the [three, six, or nine months, or fiscal year]
ended on, ____________, _____(the "SUBJECT PERIOD") [(subject only to normal
year-end audit adjustments)];

         (c)      a review of the activities of the Companies during the Subject
Period has been made under my supervision with a view to determining whether,
during the Subject Period, the Companies have kept, observed, performed, and
fulfilled all of their respective obligations under the Loan Documents, and
during the Subject Period, (i) the Companies kept, observed, performed, and
fulfilled each and every covenant and condition of the Loan Documents (except
for the deviations, if any, set forth on ANNEX A to this certificate) in all
material respects, and (ii) no Event of Default (nor any Potential Default) has
occurred which has not been cured or waived (except the Events of Default or
Potential Defaults, if any, described on ANNEX A to this certificate);

         (d)      the status of compliance by Borrower with SECTION 9.12(a),
(b), and (c) of the Credit Agreement at the end of the Subject Period is as set
forth on ANNEX B to this certificate; and

         (e)      during the Subject Period, each Schedule to each Loan Document
that was required to be revised and supplied to Administrative Agent in
accordance with the terms of the Loan Documents has been so revised and
supplied.

CENTEX EXHIBITS AND SCHEDULES

                                        2



                                                              [LETTER OF CREDIT]

[Signature of Responsible Officer of Borrower]

                                           By __________________________________
                                              Name:  ___________________________
                                              Title: ___________________________

CENTEX EXHIBITS AND SCHEDULES

                                        3



                                                              [LETTER OF CREDIT]

                        ANNEX A TO COMPLIANCE CERTIFICATE

                         DEVIATIONS FROM LOAN DOCUMENTS/
                         DEFAULTS OR POTENTIAL DEFAULTS

                              (If none, so state.)

CENTEX EXHIBITS AND SCHEDULES

                                        4


                                                              [LETTER OF CREDIT]

                        ANNEX B TO COMPLIANCE CERTIFICATE
                              (Centex Corporation)

                   Status of Compliance with SECTION 9.12(a),
                     (b) and (c)of the Credit Agreement (1)


         Borrower shall provide to Administrative Agent (for the benefit of
Lenders) detailed calculations, in form and substance reasonably acceptable to
Administrative Agent, demonstrating compliance with the following covenants:

SECTION 9.3           INDEBTEDNESS OF RESTRICTED SUBSIDIARIES

SECTION 9.12(a)       LEVERAGE RATIO

SECTION 9.12(b)       INTEREST COVERAGE

SECTION 9.12(c)       MINIMUM TANGIBLE NET WORTH

(1)      All as more particularly determined in accordance with the terms of the
         Credit Agreement, which control in the event of conflicts with this
         form.

CENTEX EXHIBITS AND SCHEDULES

                                        5



                                                              [LETTER OF CREDIT]
                                    EXHIBIT C

                    FORM OF NOTICE OF CONVERSION/CONTINUATION

                             _________________, ____

Bank of America, N.A.
         as Administrative Agent for the
         Lenders as defined in the Credit
         Agreement referred to below
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn:    Taelitha Harris
         Phone:  214.209.3645
         Fax:  214.290.9644

         Reference is made to (i) the Letter of Credit and Reimbursement
Agreement, dated as of August 7, 2003 (as amended, modified, supplemented, or
restated from time to time, "AGREEMENT"), among the undersigned, the Lenders
named therein, and Agents. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Agreement.
The undersigned hereby gives you notice pursuant to SECTION 2.1(c)(iii) of the
Agreement that it elects to Convert a Borrowing from one Type to another Type or
elects to Continue a Borrowing and select a new Interest Period for a Eurodollar
Borrowing, and in that connection, sets forth below the terms on which such
Conversion or Continuation is requested to be made:

                                                              
(A)      Date of Borrowing*                                      (A)    ________________

(B)      Amount of Borrowing                                     (B)    ________________

(C)      Type of Borrowing**                                     (C)    ________________

(D)      For Conversion to, or Continuation of, a Eurodollar     (D)    ________________
         Borrowing, the Interest Period and the last day
         thereof***



         On the date the rate is set, please confirm the interest rate below and
return by facsimile transmission to ___________________.

                                           Very truly yours,

                                           CENTEX CORPORATION

                                           By __________________________________
                                              Name:  ___________________________
                                              Title: ___________________________

Facility Rate: ______________________

Confirmed by: _______________________________

CENTEX EXHIBITS AND SCHEDULES

                                        6



                                                              [LETTER OF CREDIT]

*        Must be a Business Day at least three (3) Business Days following
         receipt by Administrative Agent of this Notice of
         Conversion/Continuation.

**       Eurodollar Borrowing or Prime Rate Borrowing.

***      Eurodollar Borrowing - 14 days or 1 month. In no event may the Interest
         Period end after the applicable scheduled repayment date of such
         Borrowing or Letter of Credit Expiration Date.

CENTEX EXHIBITS AND SCHEDULES

                                        7



                                                              [LETTER OF CREDIT]

                                    EXHIBIT D

                           FORM OF OPINION OF COUNSEL

         The opinion delivered by counsel to Borrower must be in form and
substance acceptable to Administrative Agent and its special counsel and cover
the following matters:

         1.       Borrower is duly incorporated, validly existing, and in good
standing under the Legal Requirements of the State of Nevada.

         2.       Borrower is duly qualified to transact business and is in good
standing as a foreign corporation in the State of Texas and in each other
jurisdiction where, to the best of that counsel's knowledge, the nature and
extent of Borrower's business and properties require due qualification and good
standing.

         3.       Borrower possesses all requisite corporate power and authority
to conduct its business as is now being, or is contemplated by the Credit
Agreement to be, conducted.

         4.       The execution and delivery by Borrower of each Loan Document
to which it is a party and the performance by it of its obligations thereunder,
(a) are within its corporate power, (b) have been duly authorized by all
necessary corporate action on its behalf, (c) except for any action or filing
that has been taken or made on or before the date of this opinion, and the
filing of the Loan Documents with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, require no action by or filing
with any Governmental Authority, (d) do not violate any provision of its
Constituent Documents, (e) do not to the best knowledge of counsel after
reasonable inquiry violate any Legal Requirement applicable to it or, to the
best knowledge of counsel after reasonable inquiry, any material agreements to
which it is a party and of which counsel is aware, and (f) do not result in the
creation or imposition of any Lien on any asset of Borrower pursuant to a
material agreement of Borrower of which counsel is aware.

         5.       Upon execution and delivery by all parties to it, each Loan
Document will constitute a legal and binding obligation of Borrower, enforceable
against it in accordance with its terms, except as enforceability may be limited
by applicable Debtor Relief Laws and general principles of equity.

         6.       To the best knowledge of counsel after reasonable inquiry, (a)
no Company is subject to, or aware of the threat of, any Litigation that is
reasonably likely to be determined adversely to it and, if so adversely
determined, would be a Material Adverse Event, and (b) no outstanding or unpaid
judgments against any Company exist that could be a Material Adverse Event.

CENTEX EXHIBITS AND SCHEDULES

                                        8



                                                              [LETTER OF CREDIT]

                                    EXHIBIT E

                   FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption (this "ASSIGNMENT AND ASSUMPTION") is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] ("ASSIGNOR") and [Insert name of Assignee] ("ASSIGNEE").
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (the "CREDIT AGREEMENT"), receipt
of a copy of which is hereby acknowledged by Assignee. The Standard Terms and
Conditions set forth in ANNEX 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

For an agreed consideration, Assignor hereby irrevocably sells and assigns to
Assignee, and Assignee hereby irrevocably purchases and assumes from Assignor,
subject to and in accordance with the Standard Terms and Conditions and the
Credit Agreement (including Section 13.13(b) thereof), as of the Effective Date
inserted by Administrative Agent as contemplated below (i) all of Assignor's
rights and obligations as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of Assignor under the facility identified below
(including, without limitation, Letters of Credit under such facility) and (ii)
to the extent permitted to be assigned under applicable law, all claims, suits,
causes of action, and any other right of Assignor (in its capacity as a Lender)
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant
thereto, or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims,
tort claims, malpractice claims, statutory claims, and all other claims at law
or in equity related to the rights and obligations sold and assigned pursuant to
CLAUSE (i) above (the rights and obligations sold and assigned pursuant to
CLAUSES (i) and (ii) above being referred to herein collectively as, the
"ASSIGNED INTEREST"). Such sale and assignment is without recourse to Assignor
and, except as expressly provided in this Assignment and Assumption, without
representation or warranty by Assignor.

1.       Assignor: ________________________________________

2.       Assignee: ________________________________________ [and is an
                   Affiliate/Approved Fund of [identify Lender]1]

3.       Borrower: Centex Corporation, a Nevada corporation

4.       Administrative Agent: Bank of America, N.A., as the administrative
                               agent under the Credit Agreement

5.       Credit Agreement:     The Letter of Credit and Reimbursement Agreement,
                               dated as of August 7, 2003, among Centex
                               Corporation, the Lenders parties thereto, Bank
                               of America, N.A., as Administrative Agent

______________________________
         1 Select as applicable.

CENTEX EXHIBITS AND SCHEDULES

                                        9



                                                              [LETTER OF CREDIT]

6.       Assigned Interest:



                            Total                  Amount of                Percentage
                     Commitment/Borrowings    Commitment/Borrowings         Assigned of
Facility Assigned      for all Lenders*           Assigned*             Commitment/Borrowings2
- -----------------    ---------------------    ----------------------    ----------------------
                                                               
  _____________      $____________________     $____________________    ______________________%
  _____________      $____________________     $____________________    ______________________%
  _____________      $____________________     $____________________    ______________________%



[7.      Trade Date __________________]3

Effective Date: __________________, 20___ [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

                                          ASSIGNOR
                                          --------
                                          [NAME OF ASSIGNOR]
                                          By __________________________________
                                             Title: ___________________________

                                          ASSIGNEE
                                          --------
                                          [NAME OF ASSIGNEE]
                                          By: _____________________________
                                              Title:
Consented to and Accepted:

BANK OF AMERICA, N.A., as Administrative Agent

By: _________________________________
    Title:

[Consented to and Accepted:

CENTEX CORPORATION, a Nevada corporation

By: _________________________________
    Title:]
_________________________

         * Amount to be adjusted by the counterparties to take into account any
payments or prepayments made between the Trade Date and the Effective Date.

         2 Set forth, to at least 9 decimals, as a percentage of the
Commitment/Borrowings of all Lenders thereunder.

         3 To be completed if Assignor and Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

CENTEX EXHIBITS AND SCHEDULES

                                       10


                                                              [LETTER OF CREDIT]

                      ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

                        STANDARD TERMS AND CONDITIONS FOR
                            ASSIGNMENT AND ASSUMPTION

         1.       Representations and Warranties.

         1.1.     Assignor. Assignor: (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance, or other adverse claim, and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties, or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency, or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document, or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates, or any other Person of any of
their respective obligations under any Loan Document.

         1.2.     Assignee. Assignee: (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iv)
it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to SECTION 8.3 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on Administrative Agent or any other Lender, and (v) if it is a Lender that is
not a "United States person" within the meaning of Section 7701(a)(30) of the
Tax Code, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
Assignee; and (b) agrees that (i) it will, independently and without reliance on
Administrative Agent, Assignor or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Loan Documents,
and (ii) it will perform in accordance with their terms all of the obligations
which by the terms of the Loan Documents are required to be performed by it as a
Lender.

         2.       Payments. From and after the Effective Date, Administrative
Agent shall make all payments in respect of the Assigned interest (including
payments of principal, interest, fees and other amounts) to Assignee whether
such amounts have accrued prior to or on or after the Effective Date. The
Assignor and Assignee shall make all appropriate adjustments in payments by
Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.

         3.       General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment

CENTEX EXHIBITS AND SCHEDULES

                                       11


                                                              [LETTER OF CREDIT]

and Assumption may be executed in any number of counterparts, which together
shall constitute one instrument. Delivery of an executed counterpart of a
signature page of this Assignment and Assumption by telecopy shall be effective
as delivery of a manually executed counterpart of this Assignment and
Assumption. This Assignment and Assumption shall be governed by, and construed
in accordance with, the law of the State of Texas.

CENTEX EXHIBITS AND SCHEDULES

                                       12


                                                              [LETTER OF CREDIT]

                                  SCHEDULE 1.1

                           EXISTING LETTERS OF CREDIT



                                           ISSUE   EXPIRATION                                                             AMOUNT
            ISSUER             L/C #        DATE      DATE       APPLICANT                  BENEFICIARY                      $
- -------------------------- -------------- -------- ---------- ----------------  -------------------------------------  -------------
                                                                                                     
Bank of America, N.A.      00000000916355 12/20/98  12/19/03  Centex Homes      Travelers Casualty A                    1,900,000.00
Bank of America, N.A.      00000003054936 03/19/03  03/14/04  Centex Homes      Donlen Trust                              500,000.00
Bank of America, N.A.      00000003704341 12/01/00  12/01/03  Centex Homes      Mullrock Mortgage                         245,000.00
Bank of America, N.A.      00000003704342 01/23/01  01/19/04  Centex Homes      Enterprise Leasing                        500,000.00
Bank of America, N.A.      00000003704347 03/01/01  02/27/04  Centex Homes      Old Republic Insurance                  1,000,000.00
Bank of America, N.A.      00000003704362 05/31/01  05/31/04  Centex Homes      Enterprise Leasing                        500,000.00
Bank of America, N.A.      00000003704363 06/06/01  06/01/04  Centex Homes      City of Longmont                          672,367.00
Bank of America, N.A.      00000003704367 06/27/01  06/13/04  Centex Homes      Liberty Mutual Insurance                  647,160.00
Bank of America, N.A.      00000003704389 11/14/01  11/14/03  Centex Homes      ZurichAmerican Insurance               7,000,000.00
Bank of America, N.A.      00000003704392 12/10/01  12/10/03  Centex Homes      Comerica Bank Texas                     1,195,650.00
Bank of America, N.A.      00000003704393 12/04/01  12/05/03  Centex Homes      Arbor Commercial Mort.                    354,671.00
Bank of America, N.A.      00000003704394 12/04/01  12/05/03  Centex Homes      Arbor Commercial Mort.                    154,472.00
Bank of America, N.A.      00000003704403 08/08/02  08/06/03  Centex Homes      Liberty Mutual Insurance                  400,000.00
Bank of America, N.A.      00000000113767 10/02/99  10/01/03  Centex Homes      Commissioner of Insurance                250,000.000
Bank of America, N.A.      00000003054810 03/17/03  03/17/04  Centex Homes      Palmetto Glen, LLC                         50,000.00
Bank of America, N.A.      00000003055540 04/16/03  10/31/04  Centex Homes      Union County                              755,631.87
Bank of America, N.A.      00000003056164 05/16/03  05/15/04  Centex Homes      City of Boynton Beach                      25,047.00
Bank of America, N.A.      00000003055469 05/30/03  05/28/04  Centex Homes      City of Boynton Beach                       5,997.00
Bank of America, N.A.      00000003056601 06/05/03  06/03/04  Centex Homes      City of Lake St. Louis                     10,000.00
Bank of America, N.A.      00000003056852 06/16/03  06/16/04  Centex Homes      St. Louis County, MI                      412,312.95
Bank of America, N.A.      00000003056853 06/16/03  06/16/04  Centex Homes      St. Louis County, MI                      154,143.68
Bank of America, N.A.      00000003056854 06/16/03  06/16/04  Centex Homes      St. Louis County, MI                       24,175.30
Bank of America, N.A.      00000003056855 06/16/03  06/16/04  Centex Homes      St. Louis County, MI                       52,878.23
Bank of America, N.A.      00000003056856 06/16/03  06/16/04  Centex Homes      St. Louis County, MI                       25,558.92
Bank of America, N.A.      00000003056857 06/16/03  06/16/04  Centex Homes      St. Louis County, MI                      578,871.49
Bank of America, N.A.      00000003056858 06/16/03  06/16/04  Centex Homes      St. Louis County, MI                      365,117.35
Bank of America, N.A.      00000003057016 06/20/03  06/20/04  Centex Homes      Horry County                              627,827.56
Bank of America, N.A.      00000003057017 06/20/03  06/20/04  Centex Homes      Horry County                              614,535.60
Bank of America, N.A.      00000003057299 07/02/03  07/01/04  Centex Homes      County of Lexington                       121,675.00
Bank of America, N.A.      00000003057300 07/02/03  07/01/04  Centex Homes      County of Lexington                       154,249.00
Bank of America, N.A.      00000003057331 07/08/03  07/08/04  Centex Homes      St. Louis County, MI                      190,872.40
Bank of America, N.A.      00000003057332 07/08/03  07/08/04  Centex Homes      St. Louis County, MI                      387,144.92
Bank of America, N.A.      00000003704335 08/24/00  09/01/03  Centex Homes      Board of County Comm.                     110,049.00
Bank of America, N.A.      00000003704336 08/24/00  09/01/03  Centex Homes      Board of County Comm.                     942,731.00
Bank of America, N.A.      00000003704337 08/25/00  09/01/03  Centex Homes      City of Farmington                        164,900.00
Bank of America, N.A.      00000003704354 05/18/01  09/01/03  Centex Homes      Town of Mount Pleasant                     24,215.63
Bank of America, N.A.      00000003704355 05/25/01  05/22/04  Centex Homes      Charter Township of                        24,620.00
Bank of America, N.A.      00000003704356 05/25/01  10/22/03  Centex Homes      Washtenaw County Roa                      170,368.00
Bank of America, N.A.      00000003704358 05/25/01  10/22/03  Centex Homes      Washtenaw County Dra                      286,080.00
Bank of America, N.A.      00000003704364 06/11/01  02/01/04  Centex Homes      City of Maple Grove                       154,800.00
Bank of America, N.A.      00000003704366 06/13/01  12/12/03  Centex Homes      City of Longmont                           88,815.40
Bank of America, N.A.      00000003704368 06/20/01  12/22/03  Centex Homes      City of Rosemount                           9,020.00
Bank of America, N.A.      00000003704369 06/20/01  12/15/03  Centex Homes      City of Rosemount                          30,800.00
Bank of America, N.A.      00000003704372 06/20/01  06/20/04  Centex Homes      Raritan Township                           60,000.00
Bank of America, N.A.      00000003704374 07/06/01  06/30/04  Centex Homes      City of Farmington                         33,500.00
Bank of America, N.A.      00000003704375 07/06/01  08/15/03  Centex Homes      Town of Mount Pleasant                     25,138.12
Bank of America, N.A.      00000003704378 08/02/01  08/29/03  Centex Homes      City of Raleigh                            24,026.67


CENTEX EXHIBITS AND SCHEDULES

                                       13


                                                              [LETTER OF CREDIT]



                                           ISSUE   EXPIRATION                                                             AMOUNT
            ISSUER             L/C #        DATE      DATE       APPLICANT                  BENEFICIARY                      $
- -------------------------- -------------- -------- ---------- ----------------  -------------------------------------  -------------
                                                                                                     
Bank of America, N.A.      00000003704383 09/25/01  09/26/03  Centex Homes      Town of Mount Pleasant                     35,901.00
Bank of America, N.A.      00000003704385 10/31/01  06/03/04  Centex Homes      County of Lexington                        48,900.00
Bank of America, N.A.      00000003704388 11/15/01  12/31/03  Centex Homes      The City of Inver Gr                       47,685.00
Bank of America, N.A.      00000003704391 11/29/01  11/28/03  Centex Homes      City of Raleigh                            45,121.22
Bank of America, N.A.      00000003704404 08/19/02  12/31/03  Centex Homes      The City of Inver Gr                      221,385.62
Bank of America, N.A.      00000003704405 08/21/02  08/20/03  Centex Homes      Round Lake Development                  1,550,218.00
Bank of America, N.A.      00000003704407 10/08/02  10/07/03  Centex Homes      City of Rosemount                          90,000.00
Bank of America, N.A.      00000003704408 10/07/02  10/04/03  Centex Homes      Union County                              372,559.00
Bank of America, N.A.      00000003704409 10/07/02  10/04/03  Centex Homes      Union County                               13,553.00
Bank of America, N.A.      00000003704410 10/07/02  10/04/03  Centex Homes      Union County                              330,745.00
Bank of America, N.A.      00000003704411 10/07/02  10/04/03  Centex Homes      Union County                               19,440.00
Bank of America, N.A.      00000003704412 10/28/02  10/24/03  Centex Homes      Jackson Point Development                  50,000.00
Bank of America, N.A.      00000003704413 01/15/03  05/01/04  Centex Homes      County of Lexington                        37,000.00
Bank of America, N.A.      00000003710150 01/31/03  01/27/04  Centex Homes      Walker Title & Escrow                     225,000.00
Bank of America, N.A.      00000003710151 02/03/03  01/30/04  Centex Homes      City of Raleigh                            46,754.55
Bank One, NA               00327902       07/01/03  07/01/04  Centex Homes      Union County                              171,541.90
Bank One, NA               00327908       07/01/03  07/01/04  Centex Homes      Union County                                7,863.00
Bank One, NA               00327883       12/31/02  12/30/04  Centex Homes      The Stagecoach Valley, Ltd.                71,000.00
Bank One, NA               00327885       01/30/03  01/27/05  Centex Homes      439 Development, Ltd.                     290,000.00
Bank One, NA               00327894       04/15/03  04/14/04  Centex Homes      City of Elk River                         100,000.00
Bank One, NA               00327886       04/15/03  04/10/04  Centex Homes      City of Maple Grove                       233,000.00
Bank One, NA               00327910       07/25/03  12/18/03  Centex Homes      Commerce Title Co.                       340,000.000
Bank One, NA               00327895       04/15/03  04/14/04  Centex Homes      City of Elk River                         861,000.00
Bank One, NA               00327888       03/07/03  03/05/04  Centex Homes      Tappey Bartholow Squires                  150,000.00
Bank One, NA               00327889       03/07/03  03/05/04  Centex Homes      Mobile Shelters Land Holding, LLC         175,000.00
Bank One, NA               00327890       03/17/03  03/28/04  Centex Homes      City of Raleigh                            73,071.42
Bank One, NA               00327901       06/06/03  01/06/05  Centex Homes      City of Oregon City                        69,953.00
Bank One, NA               00327909       07/22/03  07/18/04  Centex Homes      Village of Shiloh                          50,000.00
Bank One, NA               00327900       04/25/03  04/25/05  Centex Homes      W & B Development, Ltd.                   285,000.00
Bank One, NA               00327907       07/01/03  07/01/04  Centex Homes      Union County                              205,454.45
Bank One, NA               00327904       07/01/03  07/01/04  Centex Homes      Union County                               10,261.00
Bank One, NA               00327905       07/01/03  07/01/04  Centex Homes      Union County                              109,367.35
Bank One, NA               00327906       07/01/03  07/01/04  Centex Homes      Union County                               14,673.00
Bank One, NA               00327903       06/26/03  09/30/03  Centex Homes      Boulder County Transportation Dept.        14,816.60
Bank One, NA               00313940       05/04/92  05/04/04  Centex Homes      County of Loudoun                         73,000.000
Bank One, NA               00313941       05/04/92  05/04/04  Centex Homes      County of Loudoun                        140,000.000
Bank One, NA               00313942       05/04/92  05/04/04  Centex Homes      County of Loudoun                         87,000.000
Bank One, NA               00318612       07/20/00  07/24/04  Centex Homes      Shapell Industries, Inc.                  532,347.04
Bank One, NA               00318615       09/05/00  02/01/04  Centex Homes      City of Maplegrove                         15,000.00
Bank One, NA               00318616       09/05/00  12/30/03  Centex Homes      Village of Lake in the Hills              145,088.00
Bank One, NA               00318619       09/21/00  09/20/03  Centex Homes      City of Longmont                          370,596.50
Bank One, NA               00318624       10/23/00  12/30/03  Centex Homes      Village of Lake in the Hills              334,000.00
Bank One, NA               00318625       10/23/00  12/30/03  Centex Homes      Village of Lake in the Hills              125,000.00
Bank One, NA               00318626       10/26/00  09/07/03  Centex Homes      City of Loveland                          270,050.00
Bank One, NA               00318628       11/20/00  11/17/03  Centex Homes      Metropolitan Title & Guaranty Co.          50,000.00
Bank One, NA               00318633       12/29/00  12/28/03  Centex Homes      Sklpcha 1, Ltd., a Texas LP                21,000.00
Bank One, NA               00318645       08/01/01  10/19/03  Centex Homes      Wayne County DPS                           90,000.00
Bank One, NA               00318647       07/26/01  07/30/04  Centex Homes      Charter Township of Canton                351,600.00
Bank One, NA               00318648       07/26/01  07/30/04  Centex Homes      Washtenaw Co. Drain Commissioner          535,530.00
Bank One, NA               00318650       08/23/01  08/20/04  Centex Homes      Washtenaw County Rd. Commission           849,343.00
Bank One, NA               00318853       09/21/01  09/25/04  Centex Homes      Residential Funding Corporation        2,623,000.000
Bank One, NA               00318655       09/26/01  12/31/03  Centex Homes      City of Prior Lake                        289,375.00
Bank One, NA               00318656       09/24/01  09/21/03  Centex Homes      Waterford Landing Hm. Owners Assc.        520,000.00
Bank One, NA               00318671       02/28/02  02/01/04  Centex Homes      City of Maple Grove                       135,860.00


CENTEX EXHIBITS AND SCHEDULES

                                       14


                                                              [LETTER OF CREDIT]



                                           ISSUE   EXPIRATION                                                             AMOUNT
            ISSUER             L/C #        DATE      DATE       APPLICANT                  BENEFICIARY                      $
- -------------------------- -------------- -------- ---------- ----------------  -------------------------------------  -------------
                                                                                                     
Bank One, NA               00318659       11/21/01  02/01/04  Centex Homes      City of Maplegrove                         17,063.00
Bank One, NA               00318661       03/21/02  12/31/03  Centex Homes      Unimproved Besinger Properties            750,000.00
Bank One, NA               00318663       04/15/02  04/11/04  Centex Homes      City of Oceanside                          43,093.00
Bank One, NA               00318664       12/17/01  12/14/03  Centex Homes      City of Rosemount                         200,000.00
Bank One, NA               00318665       12/17/01  12/14/03  Centex Homes      City of Rosemount                         200,000.00
Bank One, NA               00318669       03/11/02  03/11/04  Centex Homes      Dobson II, LLC                            217,120.00
Bank One, NA               00318672       03/06/02  12/31/03  Centex Homes      The Carpentersville Group                 650,000.00
Bank One, NA               00318673       04/15/02  04/11/04  Centex Homes      City of Oceanside                         112,482.00
Bank One, NA               00318674       04/17/02  06/30/04  Centex Homes      Town of Mt. Pleasant                       36,825.00
Bank One, NA               00318676       05/16/02  02/01/04  Centex Homes      City of Maple Grove                         9,400.00
Bank One, NA               00318677       05/16/02  02/01/04  Centex Homes      City of Maple Grove                        83,800.00
Bank One, NA               00318678       05/16/02  02/01/04  Centex Homes      City of Maple Grove                       597,800.00
Bank One, NA               00318679       05/16/02  02/01/04  Centex Homes      City of Maple Grove                       882,500.00
Bank One, NA               00318683       06/13/02  12/22/03  Centex Homes      City of Rosemount                         112,750.00
Bank One, NA               00318682       05/28/02  05/28/04  Centex Homes      Killeen Thunder Creek, Ltd.               237,000.00
Bank One, NA               00318684       07/01/02  08/31/03  Centex Homes      Town of Mt. Pleasant                       30,525.00
Bank One, NA               00318685       07/02/02  01/08/04  Centex Homes      County of Lexington, So. Carolina          41,384.50
Bank One, NA               00318689       08/02/02  07/30/04  Centex Homes      Union County                              743,177.23
Bank One, NA               00318690       08/02/02  07/30/04  Centex Homes      Union County                               36,063.19
Bank One, NA               00318691       08/06/02  08/05/04  Centex Homes      Waugh Chapel Limited Partnership          300,000.00
Bank One, NA               00318692       08/15/02  08/08/04  Centex Homes      Union County                               36,274.39
Bank One, NA               00318693       08/15/02  08/12/04  Centex Homes      Union County                            1,048,782.21
Bank One, NA               00318694       08/15/02  08/15/04  Centex Homes      City of Westminster                       778,405.76
Bank One, NA               00318695       08/15/02  08/15/04  Centex Homes      City of Westminster                       520,626.85
Bank One, NA               00382346       06/10/97  12/09/03  Centex Homes      City of Longmont                          197,374.00
Bank One, NA               00382361       08/13/97  02/01/04  Centex Homes      City of Maple Grove                        15,000.00
Bank One, NA               00382375       11/14/97  08/27/03  Centex Homes      Town of Parker                             81,097.60
Bank One, NA               00382442       08/10/98  08/10/03  Centex Homes      Sandpiper Bay Land Company, Inc.          100,000.00
Bank One, NA               00382702       09/04/98  09/04/04  Centex Homes      C.V. Perry & Co.                          134,400.00
Bank One, NA               00382738       03/18/99  04/01/04  Centex Homes      Union County                              127,625.00
Bank One, NA               00327898       04/15/03  06/01/05  Centex Homes      Union County                               21,577.61
Bank One, NA               00327899       04/15/03  06/01/05  Centex Homes      Union County                              245,100.45
Bank One, NA               00382779       09/21/99  12/31/03  Centex Homes      Village of North Aurora                   705,592.86
Bank One, NA               00382796       03/06/00  03/01/04  Centex Homes      City of Longmont                          254,509.50
Bank One, NA               00327867       09/18/02  09/16/04  Centex Homes      Echo Development, Ltd.                    86,000.000
Bank One, NA               00327870       10/04/02  10/04/04  Centex Homes      United Water Princeton Meadows          1,077,366.00
Bank One, NA               00327868       09/30/02  11/30/03  Centex Homes      OXI, LLC                                  500,000.00
Bank One, NA               00382394       01/28/98  01/20/04  Centex Homes      Blackmoor Land Development                 50,000.00
Bank One, NA               00382784       10/21/99  12/31/03  Centex Homes      Village of North Aurora                   193,445.99
Bank One, NA               00327878       11/12/02  11/11/03  Centex Homes      Village of Round Lake                   1,703,576.60
Bank One, NA               00327877       11/06/02  10/30/03  Centex Homes      City of Longmont                        2,021,134.00
Bank One, NA               00327882       11/21/02  08/30/04  Centex Homes      County of Eagle, State of Colorado         32,236.71
Bank One, NA               00327869       10/02/02  11/30/03  Centex Homes      The Town of Mt. Pleasant                  117,115.00
Bank One, NA               00327872       10/23/02  10/31/03  Centex Homes      Wells Fargo Bank Minnesota                740,980.00
Bank One, NA               00327873       10/23/02  10/31/03  Centex Homes      Wells Fargo Bank Minnesota              1,500,000.00
Bank One, NA               00327879       11/13/02  11/11/03  Centex Homes      Village of Oswego                       1,373,757.12
Bank One, NA               00327881       11/21/02  08/30/04  Centex Homes      County of Eagle, State of Colorado         79,190.26
Bank One, NA               00327880       12/02/02  11/22/03  Centex Homes      Fleet National Bank                     4,478,790.00
Bank One, NA               00327884       01/13/03  01/09/04  Centex Homes      The City of Wheatridge                    715,549.00
Bank One, NA               00327891       04/02/03  04/02/04  Centex Homes      City of Rosemount                         679,000.00
Bank One, NA               00327896       04/16/03  04/10/04  Centex Homes      City of Maple Grove                     1,957,100.00
Bank One, NA               00327886       04/15/03  04/10/04  Centex Homes      City of Maple Grove                       233,000.00
Bank One, NA               00327896       04/16/03  04/10/04  Centex Homes      City of Maple Grove                     1,957,100.00
Banque Nationale de Paris  S400150        02/04/94  02/08/04  Centex Corp.      Travelers Indemnity Company             3,215,000.00


CENTEX EXHIBITS AND SCHEDULES

                                       15


                                                              [LETTER OF CREDIT]



                                           ISSUE   EXPIRATION                                                             AMOUNT
            ISSUER             L/C #        DATE      DATE       APPLICANT                  BENEFICIARY                      $
- -------------------------- -------------- -------- ---------- ----------------  -------------------------------------  -------------
                                                                                                     
Banque Nationale de Paris  91866446       01/21/03  01/31/04  Centex Corp.      Zurich American Insurance Group        13,300,000.00
Comerica Bank              00000000583342 05/23/03  02/01/04  Centex Corp.      City of Maple Grove                        68,860.00
Comerica Bank              00000000583272 05/21/03  02/01/04  Centex Corp.      City of Maple Grove                     1,488,000.00
Comerica Bank              00000000583273 05/21/03  02/01/04  Centex Corp.      City of Maple Grove                        17,545.00
Comerica Bank              00000000583343 05/23/03  02/01/04  Centex Corp.      City of Maple Grove                       366,000.00
Comerica Bank              00000000583344 05/23/03  02/01/04  Centex Corp.      City of Maple Grove                        23,430.00
Comerica Bank              00000000583345 05/23/03  02/01/04  Centex Corp.      City of Maple Grove                     1,067,400.00
Comerica Bank              00000000583341 05/23/03  05/14/04  Centex Corp.      Washtenaw County Rd. Commission         1,022,774.00
Comerica Bank              00000000583402 05/28/03  05/28/04  Centex Corp.      Wellington Partners, LLC                  725,000.00
Comerica Bank              00000000583885 06/18/03  06/17/04  Centex Corp.      City of Rosemount                        114,000.000
Comerica Bank              00000000584189 06/30/03  06/27/04  Centex Corp.      Washtenaw County Rd. Commission           742,054.00
Comerica Bank              00000000584473 07/11/03  07/10/04  Centex Corp.      Ashton Oaks, LLC                          100,000.00
Comerica Bank              00000000584537 07/14/03  07/11/04  Centex Corp.      City of Milan                             974,314.00
Comerica Bank              00000000584301 07/07/03  07/02/04  Centex Corp.      City of Rosemount                         352,000.00
Comerica Bank              00000000584302 07/07/03  07/02/04  Centex Corp.      City of Rosemount                         268,400.00
Comerica Bank              00000000584752 07/22/03  07/23/04  Centex Corp.      City of Woodbury                        1,816,313.00
Comerica Bank              00000000584753 07/22/03  07/23/04  Centex Corp.      City of Woodbury                           54,022.20
Comerica Bank              00000000584943 07/30/03  07/30/04  Centex Corp.      WalMart Stores East, LP                2,307,000.00
Comerica Bank              00000000584536 07/14/03  07/11/04  Centex Corp.      Washtenaw Cnty. Drain Commission          753,918.00
JPMorgan Chase Bank        D221538        01/23/02  01/17/04  Centex Corp.      Zurich American Insurance Group         7,000,000.00
JPMorgan Chase Bank        D220589        12/21/01  01/09/04  Centex Corp.      The Travelers Indemnity Company         6,400,000.00
JPMorgan Chase Bank        D291129        07/28/99  07/31/04  Centex Materials  City of Austin                             47,725.70
JPMorgan Chase Bank        D229664        09/05/02  03/01/04  Centex Homes      County of Lexington, So. Carolina          83,627.30
JPMorgan Chase Bank        D229684        09/05/02  03/01/04  Centex Homes      County of Lexington, So. Carolina         201,830.22
JPMorgan Chase Bank        D229866        09/09/02  07/31/03  Centex Homes      Nextly Bank  Myrtle Beach LPO            750,000.00
JPMorgan Chase Bank        D230276        09/20/02  09/19/03  Centex Homes      Residential Funding Corp.               1,364,450.00
JPMorgan Chase Bank        D233345        12/26/02  12/31/03  Home Services     Old Republic Insurance Company          3,000,000.00
JPMorgan Chase Bank        D234681        02/10/03  01/31/04  Centex Devlpmnt.  Industrial Properties Corporation       1,000,000.00
SunTrust Bank              F503221        03/07/02  03/01/04  Centex Homes      Liberty Mutual Insurance Company          319,680.00
SunTrust Bank              F503235        03/25/02  03/22/04  Centex Homes      Anne Arundel County                       152,423.00
SunTrust Bank              F840258        12/12/02  12/12/03  Centex Homes      Liberty Mutual Insurance Company          250,000.00
SunTrust Bank              F841319        06/02/03  05/30/04  Centex Homes      Riverwalk at Occoquan, Inc.                40,000.00
SunTrust Bank              F841581        07/16/03  07/15/04  Centex Homes      Walker Title & Escrow Company             600,000.00
SunTrust Bank              P000019        10/24/02  10/18/03  Centex Homes      County of York                            112,000.00
SunTrust Bank              P000040        10/31/02  10/28/03  Centex Homes      City of Spring Hill                     1,191,000.00
SunTrust Bank              P000072        11/18/02  10/30/03  Centex Homes      Orange County Board of                      2,383.00
SunTrust Bank              P000073        11/18/02  10/30/03  Centex Homes      Orange County Board of                     14,431.00
SunTrust Bank              P000126        12/12/02  12/12/04  Centex Homes      City of Mt. Juliet                        296,624.00
SunTrust Bank              P000127        12/12/02  12/12/04  Centex Homes      City of Mr. Juliet                         32,571.00
SunTrust Bank              P000180        12/31/02  12/30/03  Centex Homes      Orange County Commissioners               125,000.00
SunTrust Bank              P000184        01/06/03  12/23/03  Centex Homes      Union County                              415,863.55
SunTrust Bank              P000185        01/06/03  12/23/03  Centex Homes      Union County                               22,812.80
SunTrust Bank              P000187        01/06/03  02/28/04  Centex Homes      Orange County Board of                      5,252.00
SunTrust Bank              P000210        01/13/03  02/28/04  Centex Homes      Orange County Board of                      6,030.00
SunTrust Bank              P000262        01/30/03  5/01/04   Centex Homes      County of York                             42,000.00
SunTrust Bank              P000321        02/19/03  09/30/03  Centex Homes      Orange County Board of                    300,000.00
SunTrust Bank              P000360        03/05/03  02/28/04  Centex Homes      Orange County Board of                    169,764.10
SunTrust Bank              P000379        03/11/03  03/11/04  Centex Homes      Commerce Title Agency                     500,000.00
SunTrust Bank              P000473        04/16/03  10/31/04  Centex Homes      Union County                            1,008,248.07
SunTrust Bank              P000474        04/16/03  10/31/04  Centex Homes      Union County                              196,674.04
SunTrust Bank              P000475        04/16/03  06/30/04  Centex Homes      Union County                               40,250.00
SunTrust Bank              P000487        04/25/03  12/31/04  Centex Homes      City of Inver Grove Heights             2,447,998.00
SunTrust Bank              P000495        04/28/03  04/28/04  Centex Homes      County of York                          2,150,000.00
SunTrust Bank              P000635        07/10/03  07/09/04  Centex Homes      West Wilson Utility District              282,200.00


CENTEX EXHIBITS AND SCHEDULES

                                       16


                                                              [LETTER OF CREDIT]



                                           ISSUE   EXPIRATION                                                             AMOUNT
            ISSUER             L/C #        DATE      DATE       APPLICANT                  BENEFICIARY                      $
- -------------------------- -------------- -------- ---------- ----------------  -------------------------------------  -------------
                                                                                                     
SunTrust Bank              P000685        08/04/03  02/04/04  Centex Homes      South Valley Sewer District               145,794.00
SunTrust Bank              P600896        12/15/99  02/01/04  Centex Homes      City of Maple Grove                         3,000.00
SunTrust Bank              P601230        03/13/01  02/01/04  Centex Homes      City of Maple Grove                        25,300.00
SunTrust Bank              P601250        04/11/01  04/01/04  Centex Homes      Powhatan Enterprises, Inc.                133,795.00
SunTrust Bank              P601253        04/13/01  04/11/04  Centex Homes      City of Brentwood                           6,500.00
SunTrust Bank              P601272        04/30/01  04/27/04  Centex Homes      Williamson County Regional                 72,000.00
SunTrust Bank              P601275        04/30/01  04/27/04  Centex Homes      City of Brentwood                           6,000.00
SunTrust Bank              P601403        11/07/01  11/06/03  Centex Homes      City of Boynton Beach                   1,291,910.00
SunTrust Bank              P601447        01/29/02  12/14/03  Centex Homes      Board of Supervisors of Fairfax           105,000.00
SunTrust Bank              P601449        01/30/02  12/14/03  Centex Homes      Board of Supervisors of Fairfax           337,100.00
SunTrust Bank              P601457        02/11/02  01/31/04  Centex Homes      Board of Supervisors of Fairfax           215,000.00
SunTrust Bank              P601475        03/20/02  03/18/04  Centex Homes      Residential Funding Corporation         2,700,000.00
SunTrust Bank              P601480        03/27/02  03/27/04  Centex Homes      City of Rosemount                         115,000.00
SunTrust Bank              P601500        04/18/02  04/17/04  Centex Homes      Board of Supervisors of                   161,800.00
SunTrust Bank              P601501        04/18/02  10/15/03  Centex Homes      King Farm Associates L.L.C.               100,000.00
SunTrust Bank              P601529        05/15/02  10/30/03  Centex Homes      Orange County Board of                      8,010.00
SunTrust Bank              P601530        05/15/02  10/30/03  Centex Homes      Orange County Board of                      4,140.00
SunTrust Bank              P601531        05/15/02  10/30/03  Centex Homes      Orange County Board of                     24,864.00
SunTrust Bank              P601532        05/15/02  10/30/03  Centex Homes      Orange County Board of                     33,108.00
SunTrust Bank              P601558        06/14/02  06/14/04  Centex Homes      City of Brentwood                         146,150.00
SunTrust Bank              P601559        06/17/02  06/03/04  Centex Homes      Metropolitan Department of                 23,750.00
SunTrust Bank              P601571        07/02/02  10/30/03  Centex Homes      Orange County Board of                     61,857.00
SunTrust Bank              P601609        08/29/02  01/06/04  Centex Homes      West Wilson Utility District               11,566.70
SunTrust Bank              P601649        10/16/02  10/11/03  Centex Homes      Board of Supervisors of Fairfax           358,200.00


CENTEX EXHIBITS AND SCHEDULES

                                       17


                                                              [LETTER OF CREDIT]

                                  SCHEDULE 2.1

                  LENDERS AND COMMITMENTS; ADDRESSES FOR NOTICE



                                                       PRO RATA
   NAME AND ADDRESS OF LENDERS         COMMITMENT        PART
                                                 
Bank of America, N.A.                 $ 20,000,000       8.00%
Attn:  Bryce Langen
NC1-007-15-06
100 N. Tryon Street
Charlotte, NC 28255
Phone: 704.387.5104
Fax: 704.386.0255

[With a copy to:

Bank of America, N.A.
Attn: Agency Management
901 Main Street, 14th Floor
Dallas, TX  75202
Phone: 214.209.4109
Fax: 214-290-9448]

Bank One, NA                          $ 40,000,000      16.00%
Attn: F. Patt Schiewitz
1 Bank One Plaza, Suite IL1-0315
Chicago, IL  60670
Phone: 312.732.1148
Fax: 312.732.5939

JPMorgan Chase Bank                   $ 20,000,000       8.00%
Attn: David L. Howard
2200 Ross Avenue, Third Floor
Dallas, TX  75201
Phone: 214.965.4756
Fax: 214.965.2044


CENTEX EXHIBITS AND SCHEDULES

                                       18


                                                              [LETTER OF CREDIT]



                                                                                       PRO RATA
                   NAME AND ADDRESS OF LENDERS                         COMMITMENT        PART
                                                                                 
The Royal Bank of Scotland plc
Attn: Dave Apps                                                       $ 20,000,000      8.00%
101 Park Avenue
New York, NY  10178
Phone: 212.401.3745
Fax:  212.401.3456

BNP Paribas                                                           $ 20,000,000      8.00%
Attn: Jeff Tebeaux
12201 Merit Drive, Suite 860
Dallas, TX  75251
Phone: 214.953.9737
Fax: 972.788.9140

Credit Lyonnais New York Branch                                       $ 20,000,000      8.00%
Attn: Robert Smith
2200 Ross Avenue, Suite 4400 West
Dallas, TX  75201
Phone: 214.220.2311
Fax: 214.220.2323

Credit Suisse First Boston, acting through its Cayman Islands Branch  $ 20,000,000      8.00%
Attn: William O'Daly
Eleven Madison Avenue
New York, NY  10010
Phone: 212.325.1986
Fax: 212.743.2254

SunTrust Bank                                                         $ 20,000,000      8.00%
Attn: W. John Wendler
8245 Boone Boulevard, Suite 820
Vienna, VA  22181
Phone: 703.902.9041
Fax: 703.902.9245


CENTEX EXHIBITS AND SCHEDULES

                                       19


                                                              [LETTER OF CREDIT]



                                                           PRO RATA
   NAME AND ADDRESS OF LENDERS             COMMITMENT        PART
                                                     
The Bank of Tokyo-Mitsubishi, Ltd.        $ 12,500,000       5.00%
Attn: John Mearns / Brenda Trader
2001 Ross Avenue, Suite 3150
Dallas, TX  75201
Phone: 214.954.1200 ext. 104 / ext. 111
Fax: 214.954.1007

Comerica Bank                             $ 12,500,000       5.00%
Attn: Casey L. Ostrander
500 Woodward Avenue, 7th Floor
MC: 3256
Detroit, MI 48226
Phone: 313.222.5286
Fax: 313.222.9295

Washington Mutual Bank, FA                $ 12,500,000       5.00%
Attn: Mary Bowman
5050 Broadway, 1st Floor
Oakland, CA 94611
Phone: 510.658.1209
Fax: 510.658.1407

Lloyds TSB Bank plc                       $  8,750,000       3.50%
Attn: Windsor Davies
1251 Avenue of the Americas, 39th Floor
New York, NY  10020
Phone: 212.930.8909
Fax: 212.930.5098

PNC Bank, National Association            $  8,750,000       3.50%
Attn: Douglas Paul
2 Tower Center, 18th Floor
East Brunswick, NJ  08816
Phone: 732.220.3566
Fax: 732.220.3744


CENTEX EXHIBITS AND SCHEDULES

                                       20


                                                              [LETTER OF CREDIT]



                                                           PRO RATA
   NAME AND ADDRESS OF LENDERS             COMMITMENT        PART
                                                     
Banca di Roma - Chicago Branch            $  5,000,000       2.00%
Attn: Joyce Montgomery
225 West Washington, Suite 1200
Chicago, IL  60606
Phone: 312.704.2648
Fax: 312.726.3058

UBS AG, Cayman Islands Branch             $  5,000,000       2.00%
Attn: [Denise Conzo]
677 Washington Boulevard
6-South
Stamford, CT  06901
Phone: 203.719.3853
Fax: 203.719.3888

The Northern Trust Company                $  2,500,000       1.00%
Attn: Paul Theiss
50 South LaSalle Street
Chicago, IL 60675
Phone: 312.557.1791
Fax: 312.444.7028

US Bank National Association              $  2,500,000       1.00%
Attn: Joseph Sooter
One US Bank Plaza
5L-MO-T12M
St. Louis, MO 63101
Phone: 314.418.2462
Fax: 314.418.3859
                  Totals                  $250,000,000     100.00%


CENTEX EXHIBITS AND SCHEDULES

                                       21


                                  SCHEDULE 7.3
                                  SUBSIDIARIES



                                                                   STATE OF                              OWNERSHIP
SUBSIDIARY                                                         FORMATION                             PERCENTAGE
                                                                                                   
CDMC HOLDING, INC.                                             (Nevada)                                       100%
GREAT LAKES DEVELOPMENT CO., INC.                              (Nevada)                                    100.00%
CROSLAND ACCEPTANCE ASSOCIATES V                               (North Carolina)                               100%
CROSLAND BOND COMPANY                                          (North Carolina)                               100%
GENBOND TWO, INC.                                              (North Carolina)                               100%
JOHN CROSLAND COMPANY                                          (North Carolina)                               100%
MORTGAGE ACCEPTANCE ASSOCIATES NO. 2                           (North Carolina)                               100%
MORTGAGE COLLATERAL ASSOCIATES NO. 1                           (North Carolina)                               100%
MORTGAGE COLLATERAL ASSOCIATES NO. 3                           (North Carolina)                               100%
CENTEX CONSTRUCTION PRODUCTS, INC.                             (Delaware)                                   65.10%
AMERICAN GYPSUM COMPANY                                        (Delaware)                                   65.10%
AMERICAN GYPSUM MARKETING COMPANY                              (Delaware)                                   65.10%
CCP CEMENT COMPANY                                             (Nevada)                                     65.10%
CCP CONCRETE/AGGREGATES LLC                                    (Delaware)                                   65.10%
CCP GYPSUM COMPANY                                             (Nevada)                                     65.10%
CCP LAND COMPANY                                               (Nevada)                                     65.10%
CENTEX CEMENT CORPORATION                                      (Nevada)                                     65.10%
CENTEX MATERIALS LLC                                           (Delaware)                                   65.10%
CXP FUNDING, LLC                                               (Delaware)                                   65.10%
HOLLIS & EASTERN RAILROAD COMPANY LLC                          (Delaware)                                   65.10%
M & W DRYWALL SUPPLY COMPANY                                   (Nevada)                                     65.10%
MATHEWS READYMIX LLC                                           (California)                                 65.10%
MOUNTAIN CEMENT COMPANY                                        (Nevada)                                     65.10%
NEVADA CEMENT COMPANY                                          (Nevada)                                     65.10%
REPUBLIC PAPERBOARD COMPANY LLC                                (Delaware)                                   65.10%
TEXAS CEMENT COMPANY                                           (Nevada)                                     65.10%
TLCC GP LLC                                                    (Delaware)                                   65.10%
TLCC LP LLC                                                    (Delaware)                                   65.10%
WESTERN AGGREGATES LLC                                         (Nevada)                                     65.10%
WESTERN CEMENT COMPANY OF CALIFORNIA                           (California)                                 65.10%
A. W. MORTGAGE, L.P.                                           (Texas)                                      50.01%
ADFINET, INC.                                                  (Nevada)                                       100%
ADFITECH, INC.                                                 (Nevada)                                       100%
AMERICAN LANDMARK MORTGAGE, LTD.                               (Florida)                                    50.01%
ASHLEY TURNER FINANCE, L.P.                                    (Texas)                                      50.01%
AT-HOME MORTGAGE ASSOCIATES, LTD.                              (Florida)                                    50.01%
AUSTIN PARTNERS IN LENDING, L.P.                               (Texas)                                      50.01%
BANYAN FINANCIAL OF CENTRAL FLORIDA, L.P.                      (Texas)                                      50.01%


                                                                         Page 22




                                                                   STATE OF                              OWNERSHIP
SUBSIDIARY                                                         FORMATION                             PERCENTAGE
                                                                                                   
BENEFIT ASSET MANAGEMENT CORPORATION                           (California)                                   100%
BUILDER'S HOME MORTGAGE, L.P.                                  (Washington)                                 50.01%
CALIFORNIA HOME MORTGAGE, L.P.                                 (Texas)                                      50.01%
CENTEX EQUITY CORPORATION                                      (Nevada)                                       100%
CENTEX FINANCIAL SERVICES, INC.                                (Nevada)                                       100%
CENTEX HOME EQUITY COMPANY, LLC                                (Delaware)                                     100%
CENTEX OFFICE VICEROY I, L.P.                                  (Delaware)                                     100%
CENTEX TECHNOLOGY, INC.                                        (Nevada)                                       100%
CENTEX TITLE & ANCILLARY SERVICES, INC.                        (Nevada)                                       100%
CENTEX VICEROY GENERAL PARTNER, LLC                            (Delaware)                                     100%
CHEC ASSET RECEIVABLE CORPORATION                              (Nevada)                                       100%
CHEC CONDUIT FUNDING, LLC                                      (Delaware)                                     100%
CHEC FUNDING, LLC                                              (Delaware)                                     100%
CHEC INDUSTRIAL LOAN COMPANY                                   (Tennessee)                                    100%
CHEC INDUSTRIAL LOAN CORPORATION                               (Minnesota)                                    100%
CHEC RESIDUAL, LLC                                             (Delaware)                                     100%
COMMERCE APPRAISAL SERVICES, LLC                               (Delaware)                                     100%
COMMERCE LAND TITLE AGENCY, LLC                                (Ohio)                                         100%
COMMERCE LAND TITLE, INC.                                      (Nevada)                                       100%
COMMERCE TITLE COMPANY                                         (California)                                   100%
COMMERCE TITLE COMPANY, INC.                                   (Alabama)                                      100%
COMMERCE TITLE COMPANY OF NEW MEXICO, LLC                      (Delaware)                                     100%
COMMERCE TITLE INSURANCE COMPANY                               (California)                                   100%
COMMERCE TITLE VENTURES, LLC                                   (Delaware)                                     100%
CORE MORTGAGE CONNECTION, L.P.                                 (Texas)                                      50.01%
CTX MORTGAGE COMPANY, LLC                                      (Delaware)                                     100%
CTX MORTGAGE FUNDING III, LLC                                  (Delaware)                                     100%
CTX MORTGAGE FUNDING, LLC                                      (Delaware)                                     100%
CTX MORTGAGE VENTURES CORPORATION                              (Nevada)                                       100%
CTX MORTGAGE VENTURES, LLC                                     (Delaware)                                     100%
CTX SWAP I, LLC                                                (Delaware)                                     100%
DALLAS SUBURBS MORTGAGE, L.P.                                  (Texas)                                         50%
DARDEN FINANCIAL SERVICES, L.P.                                (Texas)                                      50.01%
DENALI FINANCIAL SERVICES, L.P.                                (Texas)                                      50.01%
DUNDEE INSURANCE AGENCY, INC.                                  (Texas)                                        100%
EXPRESS FINANCIAL SERVICES, LIMITED PARTNERSHIP                (North Carolina)                             50.01%
FAIRWAY FINANCIAL GROUP, L.P.                                  (Texas)                                      50.01%
FIRST CENTURY MORTGAGE, L.P.                                   (Texas)                                      50.01%
FLORIDA LANDMARK MORTGAGE, L.P.                                (Texas)                                      50.01%
FOUR OAKS MORTGAGE, L.P.                                       (North Carolina)                             50.01%
GLG MORTGAGE, L.P.                                             (Texas)                                      50.01%
HARWOOD INSURANCE SERVICES, LLC                                (California)                                   100%


                                                                         Page 23




                                                                   STATE OF                              OWNERSHIP
SUBSIDIARY                                                         FORMATION                             PERCENTAGE
                                                                                                   
HARWOOD SERVICE COMPANY OF GEORGIA, LLC                        (Georgia)                                      100%
HARWOOD SERVICE COMPANY OF NEW JERSEY, LLC                     (New Jersey)                                   100%
HARWOOD SERVICE COMPANY, LLC                                   (Delaware)                                     100%
HARWOOD STREET FUNDING I, LLC                                  (Delaware)                                        *
HARWOOD STREET FUNDING II, LLC                                 (Delaware)                                     100%
HEARTLAND MORTGAGE, L.P.                                       (California)                                 50.01%
HOMEFRONTMORTGAGE, L.P.                                        (Washington                                  50.01%
LEWIS MORTGAGE COMPANY, L.P.                                   (Texas)                                      50.01%
LMX FINANCIAL SERVICES, LTD.                                   (Florida)                                    50.01%
METROPOLITAN TAX SERVICE, INC.                                 (Nevada)                                       100%
METROPOLITAN TITLE & GUARANTY COMPANY                          (Florida)                                      100%
MH ACQUISITION COMPANY, LLC                                    (Delaware)                                     100%
MORTGAGE PORTFOLIO SERVICES, INC.                              (Delaware)                                     100%
MPS FUNDING CORPORATION                                        (Delaware)                                     100%
NAB ASSET COMPANY, LLC                                         (Texas)                                        100%
NEW HOME MORTGAGE SPECIALISTS, L.P.                            (Washington)                                 50.01%
OPTIMA INFORMATION SOLUTIONS, LLC                              (Delaware)                                      71%
PACIFIC AMERICAN MORTGAGE COMPANY                              (Texas)                                        100%
PENNSTAR FINANCIAL, LLC                                        (Delaware)                                   50.01%
PINE RIDGE FINANCIAL, L.P.                                     (Washington)                                 50.01%
ROBERG FINANCIAL, L.P.                                         (Texas)                                      50.01%
T.W. LEWIS MORTGAGE COMPANY, L.P.                              (Texas)                                      50.01%
VENTURE TITLE AGENCY, LTD., LLLP                               (Florida)                                    50.02%
WESTWOOD INSURANCE AGENCY                                      (Nevada)                                       100%
WESTWOOD INSURANCE AGENCY OF ARIZONA, INC.                     (Arizona)                                      100%
WESTWOOD INSURANCE AGENCY                                      (California)                                   100%
ARMOR INSURANCE COMPANY                                        (Vermont)                                      100%
CENTEX INTERNATIONAL, INC.                                     (Nevada)                                       100%
CENTEX INTERNATIONAL, LLC                                      (Delaware)                                   98.95%
CENTEX LIFE SOLUTIONS, INC.                                    (Nevada)                                       100%
CENTEX MANAGEMENT SERVICES LIMITED                             (United Kingdom)                             98.95%
CENTEX SERVICE COMPANY                                         (Nevada)                                       100%
CTX HOLDING COMPANY                                            (Nevada)                                       100%
21 HOUSING COMPANY, LLC                                        (Delaware)                                     100%
AAA HOLDINGS, INC.                                             (Delaware)                                     100%
ABC HOMES LIMITED                                              (United Kingdom)                                50%
BARRINGTON CARPET, LLC                                         (Delaware)                                     100%
CENTEX BUILDING SERVICES, INC.                                 (Nevada)                                       100%
CENTEX DEVELOPMENT MANAGEMENT COMPANY                          (Nevada)                                       100%
CENTEX HOMES                                                   (Nevada)                                     99.95%
CENTEX HOMES INTERNATIONAL LIMITED                             (United Kingdom)                               100%
CENTEX HOMES MARKETING, INC.                                   (Georgia)                                      100%


                                                                         Page 24




                                                                   STATE OF                              OWNERSHIP
SUBSIDIARY                                                         FORMATION                             PERCENTAGE
                                                                                                   
CENTEX HOMES OF CALIFORNIA II, LLC                             (Delaware)                                   99.73%
CENTEX HOMES OF CALIFORNIA, LLC                                (Delaware)                                   99.73%
CENTEX HOMES REALTY COMPANY                                    (Nevada)                                       100%
CENTEX HOMES REALTY, INC.                                      (Michigan)                                     100%
CENTEX HOMES, INC.                                             (Texas)                                        100%
CENTEX HOMES, LLC                                              (Delaware)                                   99.95%
CENTEX LATIN AMERICA, INC.                                     (Nevada)                                       100%
CENTEX LOST CREEK RANCH, LLC                                   (Delaware)                                   99.95%
CENTEX MANUFACTURED HOUSING GROUP, LLC                         (Delaware)                                     100%
CENTEX REAL ESTATE CONSTRUCTION COMPANY                        (Nevada)                                       100%
CENTEX REAL ESTATE CORPORATION                                 (Nevada)                                       100%
CENTEX REALTY, INC.                                            (Florida)                                      100%
CITY HOMEBUILDERS, INC.                                        (Texas)                                        100%
COYOTE CANYON, LLC                                             (Delaware)                                   99.95%
CTX BUILDERS SUPPLY SERVICES, LLC                              (Delaware)                                   99.95%
DESARROLLOS EN LATINOAMERICA SERVICIOS ADMINSTRATIVOS S
DE RL DE CV                                                    (Mexico)                                       100%
EMPRESAS INMOBILIARIAS DE MEXICO, S. DE R.L. DE C.V.           (Mexico)                                       100%
FOX & JACOBS, INC.                                             (Texas)                                        100%
MEADOW VISTA COMPANY, LLC                                      (Delaware)                                     100%
MELROSE PARK JOINT VENTURE                                     (Florida)                                    53.31%
SELECTIVE - DELAWARE, L.L.C.                                   (Delaware)                                   99.95%
ST LENDING, INC.                                               (Delaware)                                   99.73%
SUNSET RANCHOS DEVELOPERS, LLC                                 (Delaware)                                   99.95%
SYCAMORE CREEK                                                 (California)                                 50.00%
THE JONES COMPANY BUILDING SERVICES, LLC                       (Nevada)                                     99.95%
THE JONES COMPANY HOMES, LLC                                   (Nevada)                                     99.95%
THE JONES COMPANY HOMES REALTY, LLC                            (Nevada)                                     99.95%
WAYNE HOMES, LLC                                               (Delaware)                                   97.44%
WAYNE HOMES MID ATLANTIC, LLC                                  (Delaware)                                   99.95%
CENTEX HOME SERVICES COMPANY                                   (Nevada)                                       100%
CENTEX HOMETEAM LAWN CARE, LLC                                 (Delaware)                                     100%
CENTEX HOMETEAM SECURITY, INC.                                 (Nevada)                                       100%
HOMETEAM PEST DEFENSE, INC.                                    (Nevada)                                       100%
HOMETEAM PEST DEFENSE, LLC                                     (Delaware)                                     100%
BATESON DAILEY, A JOINT VENTURE                                (Michigan)                                      65%
CENTEX ATLANTIC, LCL                                           (Delaware)                                     100%
CENTEX CONCORD                                                 (Tennessee)                                     50%
CENTEX CONCORD PROPERTY MANAGEMENT, L.L.C.                     (Tennessee)                                     50%
CENTEX CONSTRUCTION COMPANY, INC.                              (Nevada)                                       100%
CENTEX CONSTRUCTION GROUP, INC.                                (Nevada)                                       100%
CENTEX CONSTRUCTION GROUP SERVICES, LLC                        (Delaware)                                     100%


                                                                         Page 25




                                                                   STATE OF                              OWNERSHIP
SUBSIDIARY                                                         FORMATION                             PERCENTAGE
                                                                                                   
CENTEX ENGINEERING & CONSTRUCTION, INC.                        (Nevada)                                       100%
CENTEX GOLDEN CONSTRUCTION COMPANY                             (Nevada)                                       100%
CENTEX LANDIS LIMITED LIABILITY COMPANY NO.1                   (Louisiana)                                    100%
CENTEX RODGERS, INC.                                           (Nevada)                                       100%
CENTEX ROONEY CONSTRUCTION CO., INC./HUBER, HUNT &
NICHOLS, INC., A JOINT VENTURE                                 (Florida)                                       65%
CENTEX ROONEY CONSTRUCTION CO., INC./LANDIS COMPANY, INC. A
JOINT VENTURE                                                  Louisiana)                                      70%
CENTEX ROONEY CONSTRUCTION CO., INC./RATTLER
CONSTRUCTION CONTRACTORS, INC., A JOINT VENTURE                (Florida)                                       75%
CENTEX ROONEY CONSTRUCTION COMPANY/ACI, A JOINT VENTURE        (Florida)                                       50%
CENTEX ROONEY MARINE, INC.                                     (Florida)                                      100%
CENTEX ROONEY/GRAY CONSTRUCTION, A JOINT VENTURE               (Florida)                                       85%
CENTEX ROONEY/HLM CORRECTIONAL DESIGN BUILDERS, LC             (Florida)                                       70%
CENTEX ROONEY/KBJ DESIGN/BUILD, L.L.C.                         (Delaware)                                      90%
CENTEX ROONEY/LLT, A JOINT VENTURE                             (Florida)                                       75%
CENTEX ROONEY/PGAL DESIGN BUILDERS, L.C.                       (Florida)                                       90%
CENTEX ROONEY/RS&H DESIGN BUILDERS, L.C.                       (Florida)                                       90%
CENTEX ROONEY/SCHENKEL SHULTZ DESIGN/BUILDERS, L.C.            (Florida)                                       50%
CENTEX SEISMIC SERVICES, INC.                                  (Nevada)                                        95%
CENTEX/F&S, L.L.C.                                             (Delaware)                                     100%
CENTEX/FPC, L.L.C.                                             (Delaware)                                     100%
CENTEX/HKS II, L.L.C.                                          (Delaware)                                     100%
CENTEX/HKS, CANYON, L.L.C.                                     (Delaware)                                     100%
CENTEX/HKS, L.L.C.                                             (Delaware)                                     100%
CENTEX/MASHBURN, A JOINT VENTURE                               (North Carolina)                                65%
CENTEX/MORRIS II, L.L.C.                                       (Delaware)                                     100%
CENTEX/MORRIS, L.L.C.                                          (Delaware)                                     100%
CENTEX/OMNIPLAN, L.L.C.                                        (Delaware)                                     100%
CENTEX/OMNIPLAN II, L.L.C.                                     (Delaware)                                     100%
CENTEX/SCHENKEL SHULTZ, L.L.C.                                 (Delaware)                                     100%
CENTEX/SHG, L.L.C.                                             (Delaware)                                     100%
CENTEX/SICNER, LLC                                             (Delaware)                                      90%
CENTEX/WORTHGROUP, L.L.C.                                      (Delaware)                                     100%
CENTEX-3D/I, A JOINT VENTURE                                   (Texas)                                         90%
CENTEX-AIM CONSTRUCTION, L.L.C.                                (Michigan)                                      80%
CENTEX-GILFORD, A JOINT VENTURE                                (Virginia)                                   79.58%
CENTEX-GILFORD, A JOINT VENTURE II                             (Virginia)                                      88%
CENTEX-ROONEY CONSTRUCTION CO., INC.                           (Florida)                                      100%
CENTEX-ROONEY CONSTRUCTION CO. OF GEORGIA, LLC                 (Delaware)                                     100%
CENTEX-ROONEY CONSTRUCTION CO., INC./CONSTRUCT TWO
CONSTRUCTION MANAGERS, INC., A JOINT VENTURE                   (Florida)                                       90%


                                                                         Page 26




                                                                   STATE OF                              OWNERSHIP
SUBSIDIARY                                                         FORMATION                             PERCENTAGE
                                                                                                   
CKC FACILITIES GROUP, L.C.                                     (Florida)                                       60%
GHQ COMPANY, INC.                                              (Nevada)                                       100%
INDEPENDENT GENERAL AGENCY, INC.                               (Texas)                                        100%
KIRCHMAN/CENTEX, A JOINT VENTURE                               (Florida)                                       75%
THE STUDENT COMMUNITIES GROUP, L.C.                            (Florida)                                       50%


                                                                         Page 27




UNRESTRICTED                                                       STATE OF                              OWNERSHIP
SUBSIDIARY                                                         FORMATION                             PERCENTAGE
                                                                                                   
CDMC HOLDING, INC.                                             (Nevada)                                      100%
GREAT LAKES DEVELOPMENT CO., INC.                              (Nevada)                                   100.00%
CROSLAND ACCEPTANCE ASSOCIATES V                               (North Carolina)                              100%
CROSLAND BOND COMPANY                                          (North Carolina)                              100%
GENBOND TWO, INC.                                              (North Carolina)                              100%
JOHN CROSLAND COMPANY                                          (North Carolina)                              100%
MORTGAGE ACCEPTANCE ASSOCIATES NO. 2                           (North Carolina)                              100%
MORTGAGE COLLATERAL ASSOCIATES NO. 1                           (North Carolina)                              100%
MORTGAGE COLLATERAL ASSOCIATES NO. 3                           (North Carolina)                              100%
CENTEX CONSTRUCTION PRODUCTS, INC.                             (Delaware)                                  65.10%
AMERICAN GYPSUM COMPANY                                        (Delaware)                                  65.10%
AMERICAN GYPSUM MARKETING COMPANY                              (Delaware)                                  65.10%
CCP CEMENT COMPANY                                             (Nevada)                                    65.10%
CCP CONCRETE/AGGREGATES LLC                                    (Delaware)                                  65.10%
CCP GYPSUM COMPANY                                             (Nevada)                                    65.10%
CCP LAND COMPANY                                               (Nevada)                                    65.10%
CENTEX CEMENT CORPORATION                                      (Nevada)                                    65.10%
CENTEX MATERIALS LLC                                           (Delaware)                                  65.10%
CXP FUNDING, LLC                                               (Delaware)                                  65.10%
HOLLIS & EASTERN RAILROAD COMPANY LLC                          (Delaware)                                  65.10%
M & W DRYWALL SUPPLY COMPANY                                   (Nevada)                                    65.10%
MATHEWS READYMIX LLC                                           (California)                                65.10%
MOUNTAIN CEMENT COMPANY                                        (Nevada)                                    65.10%
NEVADA CEMENT COMPANY                                          (Nevada)                                    65.10%
REPUBLIC PAPERBOARD COMPANY LLC                                (Delaware)                                  65.10%
TEXAS CEMENT COMPANY                                           (Nevada)                                    65.10%
TLCC GP LLC                                                    (Delaware)                                  65.10%
TLCC LP LLC                                                    (Delaware)                                  65.10%
WESTERN AGGREGATES LLC                                         (Nevada)                                    65.10%
WESTERN CEMENT COMPANY OF CALIFORNIA                           (California)                                65.10%
A. W. MORTGAGE, L.P.                                           (Texas)                                     50.01%
ADFINET, INC.                                                  (Nevada)                                      100%
ADFITECH, INC.                                                 (Nevada)                                      100%
AMERICAN LANDMARK MORTGAGE, LTD.                               (Florida)                                   50.01%
ASHLEY TURNER FINANCE, L.P.                                    (Texas)                                     50.01%
AT-HOME MORTGAGE ASSOCIATES, LTD.                              (Florida)                                   50.01%
AUSTIN PARTNERS IN LENDING, L.P.                               (Texas)                                     50.01%
BANYAN FINANCIAL OF CENTRAL FLORIDA, L.P.                      (Texas)                                     50.01%
BENEFIT ASSET MANAGEMENT CORPORATION                           (California)                                  100%


                                                                         Page 28




UNRESTRICTED                                                       STATE OF                              OWNERSHIP
SUBSIDIARY                                                         FORMATION                             PERCENTAGE
                                                                                                   
BUILDER'S HOME MORTGAGE, L.P.                                  (Washington)                                50.01%
CALIFORNIA HOME MORTGAGE, L.P.                                 (Texas)                                     50.01%
CENTEX EQUITY CORPORATION                                      (Nevada)                                      100%
CENTEX FINANCIAL SERVICES, INC.                                (Nevada)                                      100%
CENTEX HOME EQUITY COMPANY, LLC                                (Delaware)                                    100%
CENTEX OFFICE VICEROY I, L.P.                                  (Delaware)                                    100%
CENTEX TECHNOLOGY, INC.                                        (Nevada)                                      100%
CENTEX TITLE & ANCILLARY SERVICES, INC.                        (Nevada)                                      100%
CENTEX VICEROY GENERAL PARTNER, LLC                            (Delaware)                                    100%
CHEC ASSET RECEIVABLE CORPORATION                              (Nevada)                                      100%
CHEC CONDUIT FUNDING, LLC                                      (Delaware)                                    100%
CHEC FUNDING, LLC                                              (Delaware)                                    100%
CHEC INDUSTRIAL LOAN COMPANY                                   (Tennessee)                                   100%
CHEC INDUSTRIAL LOAN CORPORATION                               (Minnesota)                                   100%
CHEC RESIDUAL, LLC                                             (Delaware)                                    100%
COMMERCE APPRAISAL SERVICES, LLC                               (Delaware)                                    100%
COMMERCE LAND TITLE AGENCY, LLC                                (Ohio)                                        100%
COMMERCE LAND TITLE, INC.                                      (Nevada)                                      100%
COMMERCE TITLE COMPANY                                         (California)                                  100%
COMMERCE TITLE COMPANY, INC.                                   (Alabama)                                     100%
COMMERCE TITLE COMPANY OF NEW MEXICO, LLC                      (Delaware)                                    100%
COMMERCE TITLE INSURANCE COMPANY                               (California)                                  100%
COMMERCE TITLE VENTURES, LLC                                   (Delaware)                                    100%
CORE MORTGAGE CONNECTION, L.P.                                 (Texas)                                     50.01%
CTX MORTGAGE COMPANY, LLC                                      (Delaware)                                    100%
CTX MORTGAGE FUNDING III, LLC                                  (Delaware)                                    100%
CTX MORTGAGE FUNDING, LLC                                      (Delaware)                                    100%
CTX MORTGAGE VENTURES CORPORATION                              (Nevada)                                      100%
CTX MORTGAGE VENTURES, LLC                                     (Delaware)                                    100%
CTX SWAP I, LLC                                                (Delaware)                                    100%
DALLAS SUBURBS MORTGAGE, L.P.                                  (Texas)                                        50%
DARDEN FINANCIAL SERVICES, L.P.                                (Texas)                                     50.01%
DENALI FINANCIAL SERVICES, L.P.                                (Texas)                                     50.01%
DUNDEE INSURANCE AGENCY, INC.                                  (Texas)                                       100%
EXPRESS FINANCIAL SERVICES, LIMITED PARTNERSHIP                (North Carolina)                            50.01%
FAIRWAY FINANCIAL GROUP, L.P.                                  (Texas)                                     50.01%
FIRST CENTURY MORTGAGE, L.P.                                   (Texas)                                     50.01%
FLORIDA LANDMARK MORTGAGE, L.P.                                (Texas)                                     50.01%
FOUR OAKS MORTGAGE, L.P.                                       (North Carolina)                            50.01%
GLG MORTGAGE, L.P.                                             (Texas)                                     50.01%
HARWOOD INSURANCE SERVICES, LLC                                (California)                                  100%


                                                                         Page 29




UNRESTRICTED                                                       STATE OF                              OWNERSHIP
SUBSIDIARY                                                         FORMATION                             PERCENTAGE
                                                                                                   
HARWOOD SERVICE COMPANY OF GEORGIA, LLC                        (Georgia)                                     100%
HARWOOD SERVICE COMPANY OF NEW JERSEY, LLC                     (New Jersey)                                  100%
HARWOOD SERVICE COMPANY, LLC                                   (Delaware)                                    100%
HARWOOD STREET FUNDING I, LLC                                  (Delaware)                                       *
HARWOOD STREET FUNDING II, LLC                                 (Delaware)                                    100%
HEARTLAND MORTGAGE, L.P.                                       (California)                                50.01%
HOMEFRONTMORTGAGE, L.P.                                        (Washington                                 50.01%
LEWIS MORTGAGE COMPANY, L.P.                                   (Texas)                                     50.01%
LMX FINANCIAL SERVICES, LTD.                                   (Florida)                                   50.01%
METROPOLITAN TAX SERVICE, INC.                                 (Nevada)                                      100%
METROPOLITAN TITLE & GUARANTY COMPANY                          (Florida)                                     100%
MH ACQUISITION COMPANY, LLC                                    (Delaware)                                    100%
MORTGAGE PORTFOLIO SERVICES, INC.                              (Delaware)                                    100%
MPS FUNDING CORPORATION                                        (Delaware)                                    100%
NAB ASSET COMPANY, LLC                                         (Texas)                                       100%
NEW HOME MORTGAGE SPECIALISTS, L.P.                            (Washington)                                50.01%
OPTIMA INFORMATION SOLUTIONS, LLC                              (Delaware)                                     71%
PACIFIC AMERICAN MORTGAGE COMPANY                              (Texas)                                       100%
PENNSTAR FINANCIAL, LLC                                        (Delaware)                                  50.01%
PINE RIDGE FINANCIAL, L.P.                                     (Washington)                                50.01%
ROBERG FINANCIAL, L.P.                                         (Texas)                                     50.01%
T.W. LEWIS MORTGAGE COMPANY, L.P.                              (Texas)                                     50.01%
VENTURE TITLE AGENCY, LTD., L.P.                               (Florida)                                   50.02%
WESTWOOD INSURANCE AGENCY                                      (Nevada)                                      100%
WESTWOOD INSURANCE AGENCY OF ARIZONA, INC.                     (Arizona)                                     100%
WESTWOOD INSURANCE AGENCY                                      (California)                                  100%


*        Owned 100% by holders of various series of Subordinated
         Certificates issued by Harwood Street Funding I, LLC. These
         holders are not affiliated with Centex Corporation.

                                                                         Page 30

EX-31.1

exv31w1

EX-31.2

exv31w2

EX-31.3

exv31w3

EX-31.4

exv31w4

EX-31.5

exv31w5

EX-31.6

exv31w6

EX-32.1

exv32w1

EX-32.2

exv32w2

EX-32.3

exv32w3

EX-32.4

exv32w4

EX-32.5

exv32w5

EX-32.6

exv32w6