0001104659-03-022302.txt : 20031006 0001104659-03-022302.hdr.sgml : 20031006 20031006170332 ACCESSION NUMBER: 0001104659-03-022302 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20031006 GROUP MEMBERS: CRESCENT/MACH I G.P. CORPORATION GROUP MEMBERS: CRESCENT/MACH I PARTNERS, L.P. GROUP MEMBERS: HOME ASSET MANAGEMENT CORPORATION GROUP MEMBERS: TCW ASSET MANAGEMENT COMPANY GROUP MEMBERS: TCW INVESTMENT MANAGEMENT COMPANY GROUP MEMBERS: TCW SHARED OPPORTUNITY FUND II, L.P. GROUP MEMBERS: TCW/CRESCENT MEZZANINE INVESTMENT PARTNERS, L.P. GROUP MEMBERS: TCW/CRESCENT MEZZANINE PARTNERS, L.P. GROUP MEMBERS: TCW/CRESCENT MEZZANINE TRUST GROUP MEMBERS: TCW/CRESCENT MEZZANINE, LLC FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TCW GROUP INC CENTRAL INDEX KEY: 0000850401 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 865 SOUTH FIGUEROA ST CITY: LOS ANGELES STATE: CA ZIP: 90017 MAIL ADDRESS: STREET 1: 865 SOUTH FIGUEROA STREET STREET 2: 865 SOUTH FIGUEROA STREET CITY: LOS ANGELES STATE: CA ZIP: 90017 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN RESIDENTIAL INVESTMENT TRUST INC CENTRAL INDEX KEY: 0001035744 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 330741174 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-52265 FILM NUMBER: 03930111 BUSINESS ADDRESS: STREET 1: 445 MARINE VIEW AVE SUITE 230 STREET 2: STE 260 CITY: DEL MAR STATE: CA ZIP: 92014 BUSINESS PHONE: 6193505008 MAIL ADDRESS: STREET 1: 445 MARINE VIEW AVE SUITE 230 CITY: DEL MAR STATE: CA ZIP: 92014 SC 13D 1 a03-3863_1sc13d.htm SC 13D

SEC 1746
(3-00)

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

	UNITED STATES	OMB APPROVAL
	SECURITIES AND EXCHANGE COMMISSION	OMB Number: 3235-0145
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	SCHEDULE 13D	Estimated average burden hours per response.....14.90

Under the Securities Exchange Act of 1934
(Amendment No. )*

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)

AMERICAN RESIDENTIAL INVESTMENT TRUST, INC.

(Name of Issuer)

Common Stock, $0.01 par value

(Title of Class of Securities)

02926T-10-3

(CUSIP Number)

Linda D. Barker, Esq.

The TCW Group, Inc.

865 South Figueroa Street, Suite 1800

Los Angeles, California 90017

213-244-0694

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

September 25, 2003

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ]

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7(b) for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 02926T103

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). The TCW Group, Inc.

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			[ ]
		(b)			[ X ]

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) Not Applicable

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

	6.	Citizenship or Place of Organization Nevada

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0

			8.	Shared Voting Power 1,622,500 (See Items 4 and 5)

			9.	Sole Dispositive Power 0

			10.	Shared Dispositive Power 1,622,500 (See Items 4 and 5)

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,622,500 (See Items 4 and 5)

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ]

	13.	Percent of Class Represented by Amount in Row (11) 20.6% (See Items 4 and 5)

	14.	Type of Reporting Person (See Instructions) HC, CO

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). TCW/Crescent Mezzanine Partners, L.P.

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			[ ]
		(b)			[ X ]

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) WC

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0

			8.	Shared Voting Power 1,622,500 (See Items 4 and 5)

			9.	Sole Dispositive Power 0

			10.	Shared Dispositive Power 1,622,500 (See Items 4 and 5)

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,622,500 (See Items 4 and 5)

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ]

	13.	Percent of Class Represented by Amount in Row (11) 20.6% (See Items 4 and 5)

	14.	Type of Reporting Person (See Instructions) PN

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). TCW/Crescent Mezzanine Investment Partners, L.P.

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			[ ]
		(b)			[ X ]

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) WC

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0

			8.	Shared Voting Power 1,622,500 (See Items 4 and 5)

			9.	Sole Dispositive Power 0

			10.	Shared Dispositive Power 1,622,500 (See Items 4 and 5)

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,622,500 (See Items 4 and 5)

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ]

	13.	Percent of Class Represented by Amount in Row (11) 20.6% (See Items 4 and 5)

	14.	Type of Reporting Person (See Instructions) PN

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). TCW/Crescent Mezzanine Trust

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			[ ]
		(b)			[ X ]

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) WC

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0

			8.	Shared Voting Power 1,622,500 (See Items 4 and 5)

			9.	Sole Dispositive Power 0

			10.	Shared Dispositive Power 1,622,500 (See Items 4 and 5)

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,622,500 (See Items 4 and 5)

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ]

	13.	Percent of Class Represented by Amount in Row (11) 20.6% (See Items 4 and 5)

	14.	Type of Reporting Person (See Instructions) OO (Business Trust)

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). TCW Shared Opportunity Fund II, L.P.

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			[ ]
		(b)			[ X ]

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) WC

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0

			8.	Shared Voting Power 1,622,500 (See Items 4 and 5)

			9.	Sole Dispositive Power 0

			10.	Shared Dispositive Power 1,622,500 (See Items 4 and 5)

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,622,500 (See Items 4 and 5)

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ]

	13.	Percent of Class Represented by Amount in Row (11) 20.6% (See Items 4 and 5)

	14.	Type of Reporting Person (See Instructions) PN

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Crescent/Mach I Partners, L.P.

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			[ ]
		(b)			[ X ]

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) WC

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0

			8.	Shared Voting Power 1,622,500 (See Items 4 and 5)

			9.	Sole Dispositive Power 0

			10.	Shared Dispositive Power 1,622,500 (See Items 4 and 5)

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,622,500 (See Items 4 and 5)

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ]

	13.	Percent of Class Represented by Amount in Row (11) 20.6% (See Items 4 and 5)

	14.	Type of Reporting Person (See Instructions) PN

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). TCW/Crescent Mezzanine, LLC

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			[ ]
		(b)			[ X ]

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) Not Applicable

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0

			8.	Shared Voting Power 1,622,500 (See Items 4 and 5)

			9.	Sole Dispositive Power 0

			10.	Shared Dispositive Power 1,622,500 (See Items 4 and 5)

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,622,500 (See Items 4 and 5)

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ]

	13.	Percent of Class Represented by Amount in Row (11) 20.6% (See Items 4 and 5)

	14.	Type of Reporting Person (See Instructions) OO (limited liability company), IA

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). TCW Investment Management Company

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			[ ]
		(b)			[ X ]

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) Not Applicable

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

	6.	Citizenship or Place of Organization California

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0

			8.	Shared Voting Power 1,622,500 (See Items 4 and 5)

			9.	Sole Dispositive Power 0

			10.	Shared Dispositive Power 1,622,500 (See Items 4 and 5)

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,622,500 (See Items 4 and 5)

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ]

	13.	Percent of Class Represented by Amount in Row (11) 20.6% (See Items 4 and 5)

	14.	Type of Reporting Person (See Instructions) HC, CO, IA

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). TCW Asset Management Company

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			[ ]
		(b)			[ X ]

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) Not Applicable

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

	6.	Citizenship or Place of Organization California

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0

			8.	Shared Voting Power 1,622,500 (See Items 4 and 5)

			9.	Sole Dispositive Power 0

			10.	Shared Dispositive Power 1,622,500 (See Items 4 and 5)

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,622,500 (See Items 4 and 5)

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ]

	13.	Percent of Class Represented by Amount in Row (11) 20.6% (See Items 4 and 5)

	14.	Type of Reporting Person (See Instructions) HC, CO, IA

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Crescent/Mach I G.P. Corporation

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			[ ]
		(b)			[ X ]

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) Not Applicable

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

	6.	Citizenship or Place of Organization Texas

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0

			8.	Shared Voting Power 1,622,500 (See Items 4 and 5)

			9.	Sole Dispositive Power 0

			10.	Shared Dispositive Power 1,622,500 (See Items 4 and 5)

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,622,500 (See Items 4 and 5)

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ]

	13.	Percent of Class Represented by Amount in Row (11) 20.6% (See Items 4 and 5)

	14.	Type of Reporting Person (See Instructions) CO

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Home Asset Management Corp.

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			[ ]
		(b)			[ X ]

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) WC

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0

			8.	Shared Voting Power 1,600,000 (See Items 4 and 5)

			9.	Sole Dispositive Power 0

			10.	Shared Dispositive Power 1,600,000 (See Items 4 and 5)

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,600,000 (See Items 4 and 5)

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ]

	13.	Percent of Class Represented by Amount in Row (11) 20.6% (See Items 4 and 5)

	14.	Type of Reporting Person (See Instructions) CO

Item 1.	Security and Issuer
This statement relates to the shares of common stock, par value $0.01 per share (“Common Stock”), of American Residential Investment Trust, Inc., a Maryland corporation (the “Company”), whose principal executive offices are located at 10421 Waterbridge Circle, Suite 250, San Diego, California 92121.

Item 2.	Identity and Background
This statement is filed by TCW/Crescent Mezzanine Partners, L.P. , a Delaware limited partnership (“Partners”), TCW/Crescent Mezzanine Investment Partners, L.P. , a Delaware limited partnership (“Investment Partners”), TCW/Crescent Mezzanine Trust, a Delaware business trust (“Trust”), TCW Shared Opportunity Fund II, L.P., a Delaware limited partnership (“SHOP”), Crescent/Mach I Partners, L.P., a Delaware limited partnership (“CMI”, and, together with Partners, Investment Partners, Trust and SHOP, the “Funds”), The TCW Group, Inc., a Nevada corporation (“Group”), TCW/Crescent Mezzanine, LLC, a Delaware limited liability company (“Mezzanine”), TCW Investment Management Company, a California corporation (“TIMCO”), TCW Asset Management Company, a California corporation (“TAMCO”), Crescent/Mach I G.P. Corporation, a Texas corporation (“CMIGP”, and, together with the Funds, Group, Mezzanine, TIMCO and TAMCO, the “TCW Reporting Persons”)), and Home Asset Management Corp., a Delaware corporation (“HAMCO”, and together with the TCW Reporting Persons, the “Reporting Persons”). The Reporting Persons are making this single, joint filing because they may be deemed to constitute a “group” within the meaning of Section 13(d)(3) of the Act, although neither the fact of this filing nor anything contained herein shall be deemed to be an admission by the Reporting Persons that such a group exists. A copy of the Joint Filing Agreement of the Reporting Persons is attached hereto as Exhibit 1.
During the last five years, none of the Reporting Persons and, to the best knowledge of the Reporting Persons, none of the executive officers or directors listed herein, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, none of the Reporting Persons and, to the best knowledge of the Reporting Persons, none of such individuals, has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
The Funds
As to the Funds, information is included herein with respect to Mezzanine (the general partner of Partners and Investment Partners, managing owner of Trust, and investment advisor to Partners, Investment Partners and Trust), TIMCO (the general partner of and investment advisor to SHOP), CMIGP (the general partner of CMI), TAMCO (the investment advisor to CMI), and Group (the sole shareholder of CMIGP, TIMCO and TAMCO). The Funds have delegated all disposition and voting discretion to their respective investment advisor, and thus disclaim any beneficial ownership of the Common Stock covered by this Schedule 13D.

Group is a holding company of entities involved in the principal business of providing investment advice and management services. Mezzanine, TIMCO and TAMCO are investment advisors and provide investment advice and management services to institutional and high net worth individual investors. The principal business of the Funds is to make investments in securities, including common and preferred stock, debt securities and other interests in business organizations with the principal objective of appreciation of capital invested. CMIGP operates in furtherance of the investment objectives of CMI.

The address of the principal business and principal office for Group, TIMCO and TAMCO is 865 South Figueroa Street, Suite 1800, Los Angeles, California 90017. The address of the principal business and principal office for Mezzanine and CMIGP is 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, California 90025.

The TCW Reporting Persons, together with Group’s other direct and indirect subsidiaries, collectively constitute The TCW Group, Inc. business unit (the “TCW Business Unit”). The TCW Business Unit is primarily engaged in the provision of investment management services.

As of July 6, 2001, the ultimate parent company of Group is Société Générale S.A., a company incorporated under the laws of France (“SG”). The principal business of SG is acting as a holding company for a global financial services group, which includes certain distinct specialized business units that are independently operated, including the TCW Business Unit.

SG, for purposes of the federal securities laws, may be deemed ultimately to control Group and the TCW Business Unit. SG, its executive officers and directors, and its direct and indirect subsidiaries (including all of its business units except the TCW Business Unit), may beneficially own shares of Common Stock. In accordance with Exchange Act Release No. 34-39538 (January 12, 1998) and due to the separate management and independent operation of its business units, SG disclaims beneficial ownership of the Common Stock beneficially owned by the Reporting Persons. The TCW Reporting Persons each disclaim beneficial ownership of Common Stock, if any, beneficially owned by SG and any of SG’s other business units. Accordingly, this Schedule 13D does not include any information with respect to shares of Common Stock, if any, beneficially owned by SG or any of SG’s other business units.

Mezzanine

The directors and the executive officers of Mezzanine are listed below. The principal address for Messrs. Attanasio, Beyer and Chapus is 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, California 90025. The principal address for Messrs. Sonneborn, Stern, Cahill and DeVito is 865 South Figueroa Street, Suite 1800, Los Angeles, CA 90017. The principal address for Messrs. Hicks and Furst is 200 Crescent Court, Suite 1600, Dallas, Texas 75201. Each director and executive officer is a citizen of the United States.

Directors
Mark L. Attanasio		Director
Robert D. Beyer		Director
Jean-Marc Chapus		Director

Jack D. Furst		Director
Thomas O. Hicks		Director
William C. Sonneborn		Director
Marc I. Stern		Director

Executive Officers
Robert D. Beyer		Chairman and Portfolio Manager
Jean-Marc Chapus		Chief Executive Officer, President and Portfolio Manager
Mark L. Attanasio		Managing Director and Portfolio Manager
Michael E. Cahill		Managing Director, General Counsel & Secretary
David S. DeVito		Managing Director, Chief Financial Officer & Assistant Secretary

TIMCO

The directors and the executive officers of TIMCO are listed below. The principal business address for each executive officer and director is 865 South Figueroa Street, Suite 1800, Los Angeles, California 90017. Each executive officer is a citizen of the United States of America.

Directors
Alvin R. Albe, Jr.		Director
Thomas E. Larkin, Jr.		Director
Marc I. Stern		Director, Chairman

Executive Officers		Title
Marc I. Stern		Chairman
Thomas E. Larkin, Jr.		Vice Chairman
Alvin R. Albe, Jr.		President & Chief Executive Officer
Robert D. Beyer		Executive Vice President & Chief Investment Officer
William C. Sonneborn		Executive Vice President & Chief Operating Officer
Michael E. Cahill		Managing Director, General Counsel & Secretary
David S. DeVito		Managing Director, Chief Financial Officer & Assistant Secretary

TAMCO

The directors and the executive officers of TAMCO are listed below. The principal business address for each executive officer and director is 865 South Figueroa Street, Suite 1800, Los Angeles, California 90017. Each executive officer is a citizen of the United States of America.

Directors
Christopher J. Ainley		Director
Alvin R. Albe, Jr.		Director
Mark L. Attanasio		Director
Charles W. Baldiswieler		Director

Philip A. Barach		Director
Javier W. Baz		Director
Brian M. Beitner		Director
Robert D. Beyer		Director
Glen E. Bickerstaff		Director
Michael E. Cahill		Director
Arthur R. Carlson		Director
Jean-Marc Chapus		Director
Robert A. Day		Director, Chairman
David S. DeVito		Director
Penelope D. Foley		Director
Douglas S. Foreman		Director
Nicola F. Galluccio		Director
Mark W. Gibello		Director
Jeffrey E. Gundlach		Director
Raymond F. Henze, III		Director
Thomas E. Larkin, Jr.		Director
Stephen McDonald		Director
Patrick R. Pagni		Director
Nathan B. Sandler		Director
William C. Sonneborn		Director
Komal S. Sri-Kumar		Director
Marc I. Stern		Director

Executive Officers		Title
Robert A. Day		Chairman of the Board & Chief Executive Officer
Thomas E. Larkin, Jr.		Vice Chairman
Marc I. Stern		President & Vice Chairman
Alvin R. Albe, Jr.		Executive Vice President & Chief Marketing Officer
Robert D. Beyer		Executive Vice President & Chief Investment Officer
William C. Sonneborn		Executive Vice President & Chief Operating Officer
Mark W. Gibello		Executive Vice President
Michael E. Cahill		Managing Director, General Counsel & Secretary
David S. DeVito		Managing Director, Chief Financial Officer & Assistant Secretary

CMIGP

The directors and the executive officers of CMIGP are listed below. The principal business address for each executive officer and director is 865 South Figueroa Street, Suite 1800, Los Angeles, California 90017. Each executive officer is a citizen of the United States.

Directors
Alvin R. Albe, Jr.		Director
Mark L. Attanasio		Director
Robert D. Beyer		Director

Donald J. Puglisi		Director
Marc I. Stern		Director, Chairman

Executive Officers		Title
Marc I. Stern		Chairman of the Board
Robert D. Beyer		President & Chief Executive Officer
Michael E. Cahill		General Counsel & Secretary
David S. DeVito		Chief Financial Officer & Treasurer

Group

The executive officers of Group are listed below. The directors are listed on Schedule I hereto. The principal business address for each executive officer is 865 South Figueroa Street, Suite 1800, Los Angeles, California 90017. Each executive officer is a citizen of the United States of America unless otherwise specified below:

Executive Officers		Title
Robert A. Day		Chairman of the Board & Chief Executive Officer
Ernest O. Ellison		Vice Chairman
Thomas E. Larkin, Jr.		Vice Chairman
Marc I. Stern		President
Alvin R. Albe, Jr.		Executive Vice President & Chief Marketing Officer
Robert D. Beyer		Executive Vice President & Chief Investment Officer
William C. Sonneborn		Executive Vice President & Chief Operating Officer
Patrick R. Pagni*		Executive Vice President
Michael E. Cahill		Managing Director, General Counsel & Secretary
David S. DeVito		Managing Director and Chief Financial Officer & Assistant Secretary

* citizen of France

HAMCO

Until December 20, 2001 the principal business of HAMCO was the management of the Company pursuant to that certain Management Agreement dated February 27, 1997, between the Company and HAMCO. Since the termination of the management agreement on December 20, 2001, the principal business of HAMCO is to hold securities of the Company. The address of the principal business and principal office for Hamco is 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, CA 90025. The directors and the executive officers of HAMCO, in addition to their principal addresses and occupations, are listed below. Each executive officer is a citizen of the United States.

Martin Anderson is Chairman of the Board of Directors, Vice President and Secretary of HAMCO. Mr. Anderson’s business address is Alii Place, Suite 1800, 1099 Alakea Street, Honolulu, HI 96813. Mr. Anderson’s principal occupation is as an attorney at Goodsill Anderson Quinn & Stifel LLP, Alii Place, Suite 1800, 1099 Alakea Street, Honolulu, HI 96813.

John C. Rocchio is a Director and President of HAMCO. Mr. Rocchio’s business address is 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, CA 90025. Mr. Rocchio’s principal occupation is as Managing Director of entities affiliates with Group, including Mezzanine, TIMCO and TAMCO, 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, CA 90025. Mr. Rocchio is also a Director of the Company.
Tyrone Chang is a Director of HAMCO. Mr. Chang’s business address is 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, CA 90025. Mr. Chang’s principal occupation is as an investment analyst of entities affiliates with Group, including Mezzanine, TIMCO and TAMCO, 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, CA 90025.
Joe Keenan is Chief Financial Officer and Treasurer of HAMCO. Mr. Keenan’s business address is 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, CA 90025. Mr. Keenan’s principal occupation is as a senior vice president of entities affiliates with Group, including Mezzanine, TIMCO and TAMCO, 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, CA 90025.
Item 3.	Source and Amount of Funds or Other Consideration
As more fully described under Item 4 below, on February 11, 1997, HAMCO, MDC Reit Holdings, LLC, a Delaware limited liability company of which HAMCO was the managing member (“Holdings”), the Company and the Funds entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”), pursuant to which the Funds acquired $25,000,000 aggregate principal amount of HAMCO’s 12% Senior Secured Notes due February 11, 2002 (the “Senior Secured Notes”) and warrants to purchase up to 666,667 shares of common stock of HAMCO (the “Warrants”), in exchange for an investment of $25,000,000. The majority of the funds were contributed by HAMCO to Holdings to fund the acquisition of 1,600,000 shares of Common Stock (the “Company Shares”). The funds required for the purchase of the Senior Secured Notes and the Warrants by the Funds were obtained from general funds available to the Funds.
As more fully described under Item 4 below, the Senior Secured Notes and Warrants were restructured, as part of a restructuring of the debt and equity HAMCO (the “HAMCO Restructuring”), into voting common stock of HAMCO and the New Notes (as defined below).
Item 4.	Purpose of Transaction
Arrangements Prior to the HAMCO Restructuring
Pursuant to the Securities Purchase Agreement, the Funds invested $25,000,000 in HAMCO, in exchange for the Senior Secured Notes (as amended) and the Warrants. As security for HAMCO’s obligations under the Securities Purchase Agreement and Holdings’ obligations under a Subsidiary Guaranty dated February 11, 1997, Holdings granted the Funds a continuing security interest in the Company Shares (and all income therefrom and proceeds thereof) pursuant to the terms of a Pledge Agreement dated February 11, 1997 by and between Holdings and Bankers Trust Company, as collateral agent (the “Pledge Agreement”). Under the terms of

the Pledge Agreement, Holdings was entitled to exercise all voting and consensual rights pertaining to the Company Shares, and was entitled to receive any and all dividends and distributions paid in respect of the Company Shares, unless and until HAMCO defaulted under the Securities Purchase Agreement.

On December 20, 2001, in connection with the termination of the management arrangement between HAMCO and the Company, the Company made a payment of $10,000,000 to HAMCO, which funds were then paid to the Funds to reduce the principal amount of the Senior Secured Notes. In addition, pursuant to that certain Amendment No. 1 to the Securities Purchase Agreement dated December 20, 2001 (the “Securities Purchase Agreement Amendment”), the Company was released from all obligations under the Securities Purchase Agreement.

The Hamco Restructuring

Contribution Agreement.

On September 24, 2003, HAMCO, Holdings, the Funds, and the other members of Holdings entered into a Contribution Agreement (the “Contribution Agreement”), providing for, among other things (i) the contribution by the Funds to HAMCO of all of their membership interests in Holdings, and (ii) the contribution by the other members of Holdings (the “Preferred Stockholders”) to HAMCO of all of the HAMCO Preferred Stockholders' membership interests in Holdings. In connection therewith, HAMCO agreed to amend and restate its Amended and Restated Certificate of Incorporation (the “Amended Certificate”) to, among other things, amend the rights and preferences of its authorized classes of preferred stock (the “HAMCO Preferred Stock”), and to authorize a new class of Series A Common Stock (the “HAMCO Class A Common Stock”).

In exchange for the Funds’ contribution of their Holdings membership interests, the Funds received 800,000 shares of HAMCO Class A Common Stock, representing all of the issued and outstanding shares of HAMCO Class A Common Stock, as follows: CMI received 80,000 shares, Investment Partners received 14,445 shares, Partners received 528,644 shares, Trust received 160,911 shares and SHOP received 16,000 shares. In exchange for HAMCO Preferred Stockholders' contribution of Holdings membership interests, HAMCO amended certain rights and preferences of the HAMCO Preferred Stock. Pursuant to the terms of the Amended Certificate, the HAMCO Preferred Stock is non-voting, except with respect to extraordinary corporate transactions and further amendments to the Amended Certificate, and except that the holders of HAMCO Preferred Stock, voting together as a single class, are entitled to elect one director of HAMCO.

The transactions contemplated by the Contribution Agreement were consummated on September 24, 2003.

Merger Agreement.

Immediately subsequent to the consummation of the transactions contemplated by the Contribution Agreement, on September 25, 2003, HAMCO, Holdings, the Funds and the other stockholders of HAMCO entered into an Agreement and Plan of Merger (the “Merger Agreement”), providing for, among other things, (i) the merger of Holdings with and into

HAMCO, with HAMCO continuing as the surviving corporation, (ii) the cancellation of the existing equity of HAMCO (other than the HAMCO Class A Common Stock and the HAMCO Preferred Stock), and (iii) the cancellation of the Warrants. The merger was consummated on September 25, 2003. Thus, as a result of the transactions contemplated by the Contribution Agreement and the Merger Agreement, the Funds currently are the record owners of all outstanding voting securities of HAMCO (subject to the rights of the HAMCO Preferred Stockholders described above), and HAMCO is the record owner of the Company Shares.

Amended and Restated Stockholders Agreement.

Pursuant to an Amended and Restated Stockholders Agreement, Voting Agreement and Irrevocable Proxy (the “Stockholders Agreement”) dated September 24, 2003, by and among HAMCO, the Funds and the HAMCO Preferred Stockholders, the Funds were granted sole disposition discretion with respect to the Company Shares. In connection therewith, each stockholder of HAMCO agreed to vote their shares as directed by the Funds in favor of any transaction or transactions with respect to the sale, transfer or other disposition of the Company Shares by HAMCO (an “AmReit Sale Transaction”), and granted to the Funds an irrevocable proxy to vote any securities of HAMCO owned by them in connection with any such AmReit Sale Transaction.

Amended and Restated Securities Purchase Agreement.

On September 25, 2003, HAMCO and the Funds entered into an Amended and Restated Securities Purchase Agreement (the “Amended and Restated Securities Purchase Agreement”) with respect to $19,238,904 principal amount of HAMCO’s 8% Senior Secured Notes due December 31, 2004 (the “New Notes”). Pursuant to the Amended and Restated Securities Purchase Agreement, among other things, the Senior Secured Notes were exchanged for New Notes with a principal balance of $19,238,904, the maturity date was extended from February 11, 2004 to December 31, 2004, and the interest rate was reduced from 12% to 8%.

Pledge Assumption Agreement.

Pursuant to an Assumption Agreement and Amendment No. 1 to Pledge Agreement (the “Pledge Assumption Agreement”) dated September 25, 2003, by and between HAMCO and Deutsche Bank Trust Company of Americas, a New York banking corporation formerly known as Bankers Trust Company, as collateral agent, HAMCO acknowledged its assumption of Holdings’ obligations under the Pledge Agreement with respect to the New Notes. The Pledge Assumption Agreement additionally amended the Pledge Agreement, among other things, to reflect the transactions contemplated by the Merger Agreement and the agreements set forth in the Amended and Restated Securities Purchase Agreement.

General.
The provisions of the Securities Purchase Agreement, the Securities Purchase Agreement Amendment, the Amended and Restated Securities Purchase Agreement, the Contribution Agreement, the Merger Agreement, the Stockholders Agreement, the Pledge Agreement, the Pledge Assumption Agreement and the Registration Rights Agreement (defined in Item 6 below) are set forth as exhibits to this Schedule, and are incorporated herein in their entirety by this reference in response to this Item. The descriptions of the terms and provisions of these documents in this Item 4 and Item 6 are a summary only of the material terms of such agreements, and are qualified in their entirety by reference to such documents.
The Reporting Persons may, from time to time, subject to developments with respect to the Company and market conditions, consider and determine to effect the purchase or sale of shares of Common Stock. Notwithstanding the foregoing, except as set forth herein, none of the Reporting Persons have any plans or proposals which would relate to or result in any of the actions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5.	Interest in Securities of the Issuer
(a), (b) The Reporting Persons may be deemed beneficially to own up to 1,600,000 shares of Common Stock, representing in the aggregate approximately 20.3% of the outstanding shares of Common Stock, based on the number of outstanding shares of Common Stock set forth in the Form 10-K filed by the Company on August 14, 2003.
In addition, the reported numbers of shares of Common Stock of the TCW Reporting Persons include (a) 7,500 options exercisable for Common Stock granted by the Company to John C. Rocchio on December 11, 2001, which are exercisable until December 11, 2011 at an exercise price of $1.65, (b) 7,500 options exercisable for Common Stock granted by the Company to John C. Rocchio on July 19, 2002, which are exercisable until July 19, 2012 at an exercise price of $3.30, and (c) 7,500 options exercisable for Common Stock granted by the Company to John C. Rocchio on June 19, 2003, which are exercisable until June 19, 2013 (collectively, the “Options”). Pursuant to the organizational documents and policies of the Funds, the Funds are entitled to the economic benefits of all options granted to Group personnel who serve as directors of portfolio companies. As a result, John C. Rocchio disclaims beneficial ownership of the reported securities. Including the shares of Common Stock subject to the Options, the TCW Reporting Persons may be deemed beneficially to own up to 1,622,500 shares of Common Stock, representing in the aggregate approximately 20.6% of the outstanding shares of Common Stock. The percentages of the outstanding shares of Common Stock beneficially owned by the Reporting Persons reported herein assume the exercise in full of the Options.
The Reporting Persons may be deemed to be part of one or more “groups” for purposes of Regulation 13D-G promulgated under the Securities Exchange Act of 1934, but disclaims that status.
(c) Except as described herein, no transactions in shares of common stock of the Company were effected during the past 60 days by the Reporting Persons or, to the best of their knowledge, any of the individuals identified in Item 2.
(d) Not applicable.
(e) Not applicable.

Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
Pursuant to a Registration Rights Agreement dated February 11, 1997, by and among the Company, the Funds, Holdings and the other parties named therein, as amended by Amendment No. 1 dated December 20, 2001, by and among the Company, the Funds, Holdings, HAMCO and the other parties named therein, HAMCO and the Funds are entitled to certain rights with respect to the registration of the Company Shares under the Securities Act of 1933 (the “Securities Act”). Subject to certain limitations, if the Company registers any of its securities under the Securities Act, either for its own account or the account of other security holders, HAMCO and the Funds are entitled to written notice of the registration and are entitled to include the Company Shares therein, provided, among other conditions, that the underwriters of any offering have the right to limit the number of such shares included in the registration. All fees, costs and expenses of such registrations (other than the underwriting discount and commissions and legal expenses of such holders) will generally be borne by the Company. In addition, HAMCO and the Funds may require, on up to four occasions, the Company to use its best efforts to file a registration statement under the Securities Act at the Company's expense with respect to the Company Shares, subject to certain conditions and limitations. Further, HAMCO and the Funds may require the Company, at the Company's expense, to register their shares on Form S-3 when such form becomes available to the Company, subject to certain conditions and limitations.
Except as set forth in this statement, to the best knowledge of the Reporting Persons, no contracts, arrangements, understandings or relationships (legal or otherwise) exist among the persons named in Item 2 or between such persons and any other person with respect to any securities of the Company.
Item 7.	Material to Be Filed as Exhibits

Schedule I		Directors of Group

Exhibit 1		Joint Filing Agreement dated October 6, 2003, among the Reporting Persons.

Exhibit 2		Securities Purchase Agreement dated February 11, 1997, among HAMCO, Holdings, the Company and the Funds. (1)

Exhibit 3		Securities Purchase Agreement Amendment No. 1 dated December 20, 2001, among the Company, HAMCO, Holdings and the Funds. (2)

Exhibit 4		Securities Purchase Agreement Amendment No. 2 dated February 10, 2002, among HAMCO, Holdings and the Funds.

Exhibit 5		Securities Purchase Agreement Amendment No. 3 dated February 10, 2003, among HAMCO, Holdings and the Funds.

Exhibit 6		Amended and Restated Securities Purchase Agreement dated September 25, 2003, among HAMCO and the Funds.

Exhibit 7		Contribution Agreement dated September 24, 2003, among HAMCO, Holdings, the Funds, and the other members of Holdings.

Exhibit 8		Merger Agreement dated September 25, 2003, among HAMCO,

		Holdings, the Funds and the other stockholders of HAMCO.

Exhibit 9		Stockholders Agreement dated September 24, 2003, among HAMCO, the Funds and the HAMCO Preferred Stockholders.

Exhibit 10		Pledge Agreement dated February 11, 1997, between Holdings and Bankers Trust Company, as collateral agent.

Exhibit 11		Pledge Assumption Agreement dated September 25, 2003, between HAMCO and Deutsche Bank Trust Company of Americas.

Exhibit 12		Registration Rights Agreement dated February 11, 1997, among the Company, the Funds, Holdings and the other parties named therein. (3)

Exhibit 13		Amendment No. 1 to Registration Rights Agreement dated December 20, 2001, among the Company, the Funds, Holdings, HAMCO and the other parties named therein. (4)

(1) Incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-11 filed September 25, 1997 (File No. 333-33679).

(2) Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-11 filed September 25, 1997 (File No. 333-33679).

(3) Incorporated by reference to Exhibit 10.19 to the Company’s current report on Form 8-K filed January 9, 2002 (File No. 001-13485).

(4) Incorporated by reference to Exhibit 10.18 to the Company’s current report on Form 8-K filed January 9, 2002 (File No. 001-13485).

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to TCW/Crescent Mezzanine Partners, L.P., TCW/Crescent Mezzanine Investment Partners, L.P. and TCW/Crescent Mezzanine Trust, as applicable, is true, complete and correct.

Dated: October 6, 2003

	TCW/CRESCENT MEZZANINE PARTNERS, L.P.
	TCW/CRESCENT MEZZANINE TRUST
	TCW/CRESCENT MEZZANINE INVESTMENT PARTNERS, L.P.

	By: TCW/Crescent Mezzanine, LLC, its investment manager

		By:	/s/ Linda D. Barker
		Name: Linda D. Barker
		Title: Authorized Signatory

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to Crescent/Mach I Partners, L.P. is true, complete and correct.

Dated: October 6, 2003

	CRESCENT/MACH I PARTNERS, L.P.

	By: TCW Asset Management Company, its investment advisor

		By:	/s/ Linda D. Barker
		Name: Linda D. Barker
		Title: Authorized Signatory

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to TCW Shared Opportunity Fund II, L.P. is true, complete and correct.

Dated: October 6, 2003

	TCW SHARED OPPORTUNITY FUND II, L.P.

	By: TCW Investment Management Company, its investment advisor

		By:	/s/ Linda D. Barker
		Name: Linda D. Barker
		Title: Authorized Signatory

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to TCW/Crescent Mezzanine LLC is true, complete and correct.

Dated: October 6, 2003

	TCW/CRESCENT MEZZANINE, LLC

	By:	/s/ Linda D. Barker
	Name: Linda D. Barker
	Title: Authorized Signatory

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to Crescent/Mach I G.P. Corporation is true, complete and correct.

Dated: October 6, 2003

	CRESCENT/MACH I G.P. CORPORATION

	By:	/s/ John-Marc Chapus
	Name:			John-Marc Chapus
	Title:		Authorized Signatory

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to The TCW Group, Inc. is true, complete and correct.

Dated: October 6, 2003

	THE TCW GROUP, INC.

	By:	/s/ Linda D. Barker
	Name: Linda D. Barker
	Title: Authorized Signatory

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to TCW Investment Management Company is true, complete and correct.

Dated: October 6, 2003

	TCW INVESTMENT MANAGEMENT COMPANY

	By:	/s/ Linda D. Barker
	Name: Linda D. Barker
	Title: Authorized Signatory

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to TCW Asset Management Company is true, complete and correct.

Dated: October 6, 2003

	TCW ASSET MANAGEMENT COMPANY

	By:	/s/ Linda D. Barker
	Name: Linda D. Barker
	Title: Authorized Signatory

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to Home Asset Management Corp. is true, complete and correct.

Dated: October 6, 2003

	HOME ASSET MANAGEMENT CORP.

	By:	/s/ John C. Rocchio
	Name: John C. Rocchio
	Title: President

SCHEDULE I

BOARD OF DIRECTORS OF THE TCW GROUP, INC.

All of the following individuals are directors of The TCW Group, Inc. Each director is a citizen of the United States of America unless otherwise indicated below:

MARK L. ATTANASIO

11100 Santa Monica Blvd., Suite 2000

Los Angeles, CA 90025

GLEN E. BICKERSTAFF

Group Managing Director

Trust Company of the West

865 South Figueroa Street

Los Angeles, CA 90017

PHILIPPE CITERNE

Chief Executive Officer

Société Générale, S.A.

Tour Société Générale

17, cour Valmy

92972 Paris-La Defense Cedex-France

(Citizen of France)

PHILIPPE COLLAS

Chairman and Chief Executive Officer

Société Générale Asset Management, S.A.

2, place de la Coupole

92078 Paris-La Defense Cedex-France

(Citizen of France)

ROBERT A. DAY

Chairman of the Board, Chairman and Chief Executive Officer

Trust Company of the West

865 South Figueroa St., Suite 1800

Los Angeles, CA 90017

DAMON P. DE LASZLO, ESQ.

Managing Director of Harwin Engineers S.A., Chairman & D.P.

Advisers Holdings Limited

Byron’s Chambers

A2 Albany, Piccadilly

London W1V 9RD – England

(Citizen of United Kingdom)

WILLIAM C. EDWARDS

Partner

Bryan & Edwards

3000 Sand Hill Road, Suite 190

Menlo Park, CA 94025

ERNEST O. ELLISON

Vice Chairman

Trust Company of the West

865 South Figueroa St., Suite 1800

Los Angeles, California 90017

CARLA A. HILLS

1200 19th Street, N.W., Suite 201

Washington, DC 20036

KENT KRESA

Chairman & Chief Executive Officer

Northrop Grumman Corporation

1840 Century Park East

Los Angeles, CA 90067

THOMAS E. LARKIN, JR.

President

Trust Company of the West

865 South Figueroa St., Suite 1800

Los Angeles, CA 90017

DAVID LEE

Managing General Partner

Clarity Partners

100 North Crescent Drive, Suite 300

Beverly Hills, CA 90210

MASATOSHI SATO

Director, Managing Director

SOMPO Japan Insurance Inc.

26-1, Nishi-Shinjuku 1-Chrome,

Shinjuku-ku, Tokyo 160-8338, Japan

(Citizen of Japan)

EDFRED L. SHANNON, JR.

Investor/Rancher

1000 S. Fremont Ave.

Alhambra, CA 91804

ROBERT G. SIMS

Private Investor

11770 Bernardo Plaza Court, Suite 108

San Diego, CA 92128

MARC I. STERN

President

The TCW Group, Inc.

865 South Figueroa St., Suite 1800

Los Angeles, CA 90017

JAMES R. UKROPINA

O’Melveny & Myers LLP

400 South Hope Street, 15th Floor

Los Angeles, CA 90071

EXHIBIT INDEX

Schedule I		Directors of Group

Exhibit 1		Joint Filing Agreement dated October 6, 2003, among the Reporting Persons.

Exhibit 2		Securities Purchase Agreement dated February 11, 1997, among HAMCO, Holdings, the Company and the Funds. (1)

Exhibit 3		Securities Purchase Agreement Amendment No. 1 dated December 20, 2001, among the Company, HAMCO, Holdings and the Funds. (2)

Exhibit 4		Securities Purchase Agreement Amendment No. 2 dated February 10, 2002, among HAMCO, Holdings and the Funds.

Exhibit 5		Securities Purchase Agreement Amendment No. 3 dated February 10, 2003, among HAMCO, Holdings and the Funds.

Exhibit 6		Amended and Restated Securities Purchase Agreement dated September 25, 2003, among HAMCO and the Funds.

Exhibit 7		Contribution Agreement dated September 24, 2003, among HAMCO, Holdings, the Funds, and the other members of Holdings.

Exhibit 8		Merger Agreement dated September 25, 2003, among HAMCO, Holdings, the Funds and the other stockholders of HAMCO.

Exhibit 9		Stockholders Agreement dated September 24, 2003, among HAMCO, the Funds and the HAMCO Preferred Stockholders.

Exhibit 10		Pledge Agreement dated February 11, 1997, between Holdings and Bankers Trust Company, as collateral agent.

Exhibit 11		Pledge Assumption Agreement dated September 25, 2003, between HAMCO and Deutsche Bank Trust Company of Americas.

Exhibit 12		Registration Rights Agreement dated February 11, 1997, among the Company, the Funds, Holdings and the other parties named therein. (3)

Exhibit 13		Amendment No. 1 to Registration Rights Agreement dated December 20, 2001, among the Company, the Funds, Holdings, HAMCO and the other parties named therein. (4)

(1) Incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-11 filed September 25, 1997 (File No. 333-33679).

(2) Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-11 filed September 25, 1997 (File No. 333-33679).

(3) Incorporated by reference to Exhibit 10.19 to the Company’s current report on Form 8-K filed January 9, 2002 (File No. 001-13485).

(4) Incorporated by reference to Exhibit 10.18 to the Company’s current report on Form 8-K filed January 9, 2002 (File No. 001-13485).

EX-1 3 a03-3863_1ex1.htm EX-1

EXHIBIT 1

JOINT FILING AGREEMENT

JOINT FILING AGREEMENT (this “Agreement”), dated as of October 6, 2003, among TCW/Crescent Mezzanine Partners, L.P. , a Delaware limited partnership, TCW/Crescent Mezzanine Investment Partners, L.P. , a Delaware limited partnership, TCW/Crescent Mezzanine Trust, a Delaware business trust, TCW Shared Opportunity Fund II, L.P., a Delaware limited partnership, Crescent/Mach I Partners, L.P., a Delaware limited partnership, The TCW Group, Inc., a Nevada corporation, TCW/Crescent Mezzanine, LLC, a Delaware limited liability company, TCW Investment Management Company, a California corporation, TCW Asset Management Company, a California corporation, Crescent/Mach I G.P. Corporation, a Texas corporation, and Home Asset Management Corp., a Delaware corporation (collectively, the “Joint Filers”).

W I T N E S S E T H

WHEREAS, as of the date hereof, each of the Joint Filers is filing a Schedule 13D under the Securities Exchange Act of 1934 (the “Exchange Act”) with respect to securities of American Residential Investment Trust, Inc. (the “Schedule 13D”);

WHEREAS, each of the Joint Filers is individually eligible to file the Schedule 13D;

WHEREAS, each of the Joint Filers wishes to file the Schedule 13D and any amendments thereto jointly and on behalf of each of the Joint Filers, pursuant to Rule 13d-1(k)(1) under the Exchange Act;

NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the parties hereto agree as follows:

1. The Joint Filers hereby agree that the Schedule 13D is, and any amendments thereto will be, filed on behalf of each of the Joint Filers pursuant to Rule 13d-1(k)(1)(iii) under the Exchange Act.

2. Each of the Joint Filers hereby acknowledges that, pursuant to Rule 13d-1(k)(1)(i) under the Exchange Act, it is responsible for the timely filing of the Schedule 13D and any amendments thereto, and for the completeness and accuracy of the information concerning it contained therein, and is not responsible for the completeness and accuracy of the information concerning any of the other parties contained therein, unless it knows or has reason to know that such information is inaccurate.

3. Each of the Joint Filers hereby agrees that this Agreement shall be filed as an exhibit to the Schedule 13D, pursuant to Rule 13d-1(k)(1)(iii) under the Exchange Act.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed individually or by their respective directors hereunto duly authorized as of the day and year first above written.

TCW/CRESCENT MEZZANINE PARTNERS, L.P.
TCW/CRESCENT MEZZANINE TRUST
TCW/CRESCENT MEZZANINE INVESTMENT PARTNERS, L.P.


By: TCW/Crescent Mezzanine, LLC, its investment manager

	By:	/s/ Linda D. Barker
	Name: Linda D. Barker
	Title: Authorized Signatory

CRESCENT/MACH I PARTNERS, L.P.

By: TCW Asset Management Company, its investment advisor

	By:	/s/ Linda D. Barker
	Name: Linda D. Barker
	Title: Authorized Signatory

TCW SHARED OPPORTUNITY FUND II, L.P.

By: TCW Investment Management Company, its investment advisor

	By:	/s/ Linda D. Barker
	Name: Linda D. Barker
	Title: Authorized Signatory

TCW/CRESCENT MEZZANINE, LLC

By:	/s/ Linda D. Barker
Name: Linda D. Barker
Title: Authorized Signatory

CRESCENT/MACH I G.P. CORPORATION

By:	/s/ Jean-Marc Chapus
Name:			Jean-Marc Chapus
Title:		Authorized Signatory

THE TCW GROUP, INC.

By:	/s/ Linda D. Barker
Name: Linda D. Barker
Title: Authorized Signatory

TCW INVESTMENT MANAGEMENT COMPANY

By:	/s/ Linda D. Barker
Name: Linda D. Barker
Title: Authorized Signatory

TCW ASSET MANAGEMENT COMPANY

By:	/s/ Linda D. Barker
Name: Linda D. Barker
Title: Authorized Signatory

HOME ASSET MANAGEMENT CORP.

By:	/s/ John C. Rocchio
Name: John C. Rocchio
Title: President

EX-4 4 a03-3863_1ex4.htm EX-4

Exhibit 4

AMENDMENT NO. 2 TO
SECURITIES PURCHASE AGREEMENT, CONSENT TO AMENDMENT OF NOTES
AND WAIVER OF PAYMENT DEFAULT

This Amendment No. 2 to the Securities Purchase Agreement, Consent to Amendment of Notes and Waiver of Payment Default (the “Amendment”), is dated as of February 10, 2002 by and among Home Asset Management Corp., a Delaware corporation (the “Issuer”), MDC REIT Holdings, L.L.C., a Delaware limited liability company (“Holdings”), TCW/Crescent Mezzanine Partners, L.P., TCW/Crescent Mezzanine Trust, TCW/Crescent Mezzanine Investment Partners, L.P., Crescent/Mach I Partners, L.P. and TCW Shared Opportunity Fund II, L.P. (collective, the “TCW Entities”). The Issuer, Holdings and the TCW Entities are collectively referred to herein as the “Parties”.

RECITALS

WHEREAS, the Parties have entered into that certain Securities Purchase Agreement, dated as of February 11, 1997, pursuant to which the Issuer sold its 12% Senior Secured Notes due February 11, 2002 (the “Notes”), as amended by that certain Amendment No. 1 to Securities Purchase Agreement, dated as of December 14, 2001 (the “Original Securities Purchase Agreement”); and

WHEREAS, the Parties and each holder of Notes have agreed to extend the maturity of the Notes to February 11, 2003.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual representations, warranties, undertakings and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Definitions; References. Unless otherwise specifically defined herein, each term used herein that is defined in the Original Securities Purchase Agreement shall have the meaning assigned to such term in the Original Securities Purchase Agreement. Each reference to “hereof,” “hereunder,” “herein” and “hereby” and other similar reference contained in the Original Securities Purchase Agreement shall from and after the date of this Amendment refer to the Original Securities Purchase Agreement as amended hereby.

2. Effectiveness of Amendments. This Amendment shall become effective, and the Original Securities Purchase Agreement shall be amended as provided herein, upon the execution of this Amendment by all of the Parties and the execution of the Amendment to 12% Senior Secured Notes in the form attached as Exhibit A, hereto.

3. Extension of Maturity. The Original Securities Purchase Agreement is amended as follows:

Section 1.1(a)(1) is amended such that “February 11, 2002” is replaced with “February 11, 2003”; and

Section 9.1 is amended such that the definition of “Maturity Date” reads in its entirety “‘Maturity Date’ means February 11, 2003.”

4. Effectiveness of the Agreement. Except as amended hereby, the Original Securities Purchase Agreement shall continue in full force and effect.

5. Incorporation of Terms. This Amendment shall be governed by and construed in accordance with Section 8 of the Original Securities Purchase Agreement.

6. Waiver of Payment Default. The undersigned being all of the Purchasers and the holders of each of the Notes, hereby waive, pursuant to Section 8.1 of the Original Securities Purchase Agreement, any Default or Event of Default arising solely due to the failure of the Issuer to repay the principal of the Notes upon their former stated maturity of February 11, 2002. This is not a waiver of any interest payment due on any Note, nor is it to be construed as a waiver of the Issuer’s obligation to repay the principal of the Notes upon their new stated maturity of February 11, 2003.

7. Consent to Amendment of Notes. The undersigned being all of the Purchasers and the holders of each of the Notes, hereby consent, pursuant to Section 8.1 of the Original Securities Purchase Agreement, to the amendment of each of the Notes solely to extend their maturity to February 11, 2003, in the form attached as Exhibit A hereto.

* * *

IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 to the Securities Purchase Agreement, Consent to Amendment of Notes and Waiver of Payment Default as of the date first set forth above.

	HOME ASSET MANAGEMENT CORP.


	By:	/s/ [ILLEGIBLE]


	MDC REIT HOLDINGS, LLC

	By:	Home Asset Management Corp.
	Its:	Managing Member


	By:	/s/ [ILLEGIBLE]


	TCW/CRESCENT MEZZANINE PARTNERS, L.P.
	TCW/CRESCENT MEZZANINE TRUST
	TCW/CRESCENT MEZZANINE INVESTMENT PARTNERS, L.P.

	By:	TCW/CRESCENT MEZZANINE, L.L.C.
	Its:	Investment Manager


	By:	/s/ [ILLEGIBLE]
		Name:
		Title:

	CRESCENT/MACH I PARTNERS, L.P.

	By:	TCW ASSET MANAGEMENT COMPANY,
	Its:	Investment Advisor


	By:
		Name:
		Title:


	By:
		Name:
		Title:


	TCW SHARED OPPORTUNITY FUND II, L.P.

	By:	TCW INVESTMENT MANAGEMENT COMPANY,
	Its:	Investment Manager


	By:
		Name:
		Title:


	By:
		Name:
		Title:

EXHIBIT A

Amendment of 12% Senior Secured Notes

AMENDMENT TO 12% SENIOR SECURED NOTES

Reference is made to the 12% Senior Secured Notes due February 11, 2002, designated N-1, N-2, N-3, N-4 and N-5 (each a “Note”, and collectively, the “Notes”), issued by Home Asset Management Corp., a Delaware corporation (the “Issuer”), and guaranteed by MDC Reit Holdings, LLC, a Delaware limited liability company (“Holdings”), as of February 11, 1997, in an aggregate principal amount of $25,000,000 in connection with the Securities Purchase Agreement, dated as of February 11, 1997, by and among the Issuer, Holdings, American residential Investment Trust, Inc, a Maryland Corporation and the purchasers listed on the signature pages thereto (as amended to date, the “Securities Purchase Agreement”).

Pursuant to the procedures set forth in the Securities Purchase Agreement, as incorporated into the Notes, the Issuer hereby amends each of the Notes as follows:

The title of each of the Notes is amended to read in its entirety “12% Senior Secured Note due February 11, 2003”; and

The first paragraph of each of the Notes following the Note number, principal amount and the Issuer’s name in all capitals is amended so that “February 11, 2002” is replaced with “February 11, 2003”.

IN WITNESS WHEREOF, the Issuer has executed and delivered this Amendment to 12% Senior Secured Notes on this day of March, 2002.

	HOME ASSET MANAGEMENT CORP.


	By:	/s/ George E. McCown
		George E. McCown
	Its:	President

The undersigned guarantor of each of the Notes hereby agrees to this Amendment to 12% Senior Secured Notes.

March , 2002	MDC REIT HOLDINGS, LLC


	By:	/s/ [ILLEGIBLE]
		Home Asset Management Corp.
	Its:	Managing Member


	By:	/s/ George E. McCown
		George E. McCown
		President

Exhibit 5

AMENDMENT NO. 3 TO
SECURITIES PURCHASE AGREEMENT, CONSENT TO AMENDMENT OF NOTES
AND WAIVER OF PAYMENT DEFAULT

This Amendment No. 3 to the Securities Purchase Agreement, Consent to Amendment of Notes and Waiver of Payment Default (the “Amendment”), is dated as of February 10, 2003 by and among Home Asset Management Corp., a Delaware corporation (the “Issuer”), MDC REIT Holdings, L.L.C., a Delaware limited liability company (“Holdings”), TCW/Crescent Mezzanine Partners, L.P., TCW/Crescent Mezzanine Trust, TCW/Crescent Mezzanine Investment Partners, L.P., Crescent/Mach I Partners, L.P. and TCW Shared Opportunity Fund II, L.P. (collective, the “TCW Entities”). The Issuer, Holdings and the TCW Entities are collectively referred to herein as the “Parties”.

RECITALS

WHEREAS, the Parties have entered into that certain Securities Purchase Agreement, dated as of February 11, 1997, pursuant to which the Issuer sold its 12% Senior Secured Notes due February 11, 2002 (the “Notes”), as amended by that certain Amendment No. 1 to Securities Purchase Agreement, dated as of December 14, 2001, as amended by that certain Amendment No. 2 to Securities Purchase Agreement, dated as of February 10, 2002 (the “Original Securities Purchase Agreement”); and

WHEREAS, the Parties and each holder of Notes have agreed to extend the maturity of the Notes to February 11, 2004.

AGREEMENT

3. Extension of Maturity. The Original Securities Purchase Agreement is amended as follows:

Section 1.1(a)(1) is amended such that “February 11, 2003” is replaced with “February 11, 2004”; and

Section 9.1 is amended such that the definition of “Maturity Date” reads in its entirety “‘Maturity Date’ means February 11, 2004.”

4. Effectiveness of the Agreement. Except as amended hereby, the Original Securities Purchase Agreement shall continue in full force and effect.

5. Incorporation of Terms. This Amendment shall be governed by and construed in accordance with Section 8 of the Original Securities Purchase Agreement.

6. Waiver of Payment Default. The undersigned being all of the Purchasers and the holders of each of the Notes, hereby waive, pursuant to Section 8.1 of the Original Securities Purchase Agreement, any Default or Event of Default arising solely due to the failure of the Issuer to repay the principal of the Notes upon their former stated maturity of February 11, 2003. This is not a waiver of any interest payment due on any Note, nor is it to be construed as a waiver of the Issuer’s obligation to repay the principal of the Notes upon their new stated maturity of February 11, 2004.

* * *

IN WITNESS WHEREOF, the parties have executed this Amendment No. 3 to the Securities Purchase Agreement, Consent to Amendment of Notes and Waiver of Payment Default as of the date first set forth above.

	HOME ASSET MANAGEMENT CORP.


	By:	/s/ [ILLEGIBLE]


	MDC REIT HOLDINGS, LLC

	By:	Home Asset Management Corp.
	Its:	Managing Member

	By:	/s/ [ILLEGIBLE]


	TCW/CRESCENT MEZZANINE PARTNERS, L.P.
	TCW/CRESCENT MEZZANINE TRUST
	TCW/CRESCENT MEZZANINE INVESTMENT
	PARTNERS, L.P.

	By:	TCW/CRESCENT MEZZANINE, L.L.C.
	Its:	Investment Manager


	By:	/s/ [ILLEGIBLE]
		Name:
		Title:

HOME ASSET MANAGEMENT CORP.

By:


MDC REIT HOLDINGS, LLC

By:	Home Asset Management Corp.
Its:	Managing Member

By:


TCW/CRESCENT MEZZANINE PARTNERS, L.P.
TCW/CRESCENT MEZZANINE TRUST
TCW/CRESCENT MEZZANINE INVESTMENT
PARTNERS, L.P.

By:	TCW/CRESCENT MEZZANINE, L.L.C.
Its:	Investment Manager

By:	/s/ John C. Rocchio
	Name:	JOHN C. ROCCHIO
	Title:	MANAGING DIRECTOR

CRESCENT/MACH I PARTNERS, L.P.

By:	TCW ASSET MANAGEMENT COMPANY,
Its:	Investment Advisor


By:	/s/ John C. Rocchio
	Name:	JOHN C. ROCCHIO
	Title:	MANAGING DIRECTOR


By:	/s/ Randolph R. Birkman
	Name:	Randolph R. Birkman
	Title:	Managing Director

TCW SHARED OPPORTUNITY FUND II, L.P.

By:	TCW INVESTMENT MANAGEMENT COMPANY,
Its:	Investment Manager


By:	/s/ John C. Rocchio
	Name:	JOHN C. ROCCHIO
	Title:	MANAGING DIRECTOR


By:	/s/ Randolph R. Birkman
	Name:	Randolph R. Birkman
	Title:	Managing Director

EXHIBIT A

Amendment of 12% Senior Secured Notes

AMENDMENT TO 12% SENIOR SECURED NOTES

Reference is made to the 12% Senior Secured Notes due February 11, 2003, designated N-1, N-2, N-3, N-4 and N-5 (each a “Note”, and collectively, the “Notes”), issued by Home Asset Management Corp., a Delaware corporation (the “Issuer”), and guaranteed by MDC Reit Holdings, LLC, a Delaware limited liability company (“Holdings”), as of February 11, 1997, in an aggregate principal amount of $25,000,000 in connection with the Securities Purchase Agreement, dated as of February 11, 1997, by and among the Issuer, Holdings, American residential Investment Trust, Inc, a Maryland Corporation and the purchasers listed on the signature pages thereto (as amended to date, the “Securities Purchase Agreement”).

Pursuant to the procedures set forth in the Securities Purchase Agreement, as incorporated into the Notes, the Issuer hereby amends each of the Notes as follows:

The title of each of the Notes is amended to read in its entirety “12% Senior Secured Note due February 11, 2004”; and

The first paragraph of each of the Notes following the Note number, principal amount and the Issuer’s name in all capitals is amended so that “February 11, 2003” is replaced with “February 11, 2004”.

IN WITNESS WHEREOF, the Issuer has executed and delivered this Amendment to 12% Senior Secured Notes on this 10 day of February, 2003.

	HOME ASSET MANAGEMENT CORP.


	By:	/s/ [ILLEGIBLE]

	Its:

The undersigned guarantor of each of the Notes hereby agrees to this Amendment to 12% Senior Secured Notes.

February 10, 2003		MDC REIT HOLDINGS, LLC


	By:	/s/ [ILLEGIBLE]
		Home Asset Management Corp.
	Its:	Managing Member


	By:

EX-6 6 a03-3863_1ex6.htm EX-6

EXHIBIT 6

AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT

by and among

HOME ASSET MANAGEMENT CORP., as Issuer,

and

TCW/CRESCENT MEZZANINE PARTNERS, L.P.,

TCW/CRESCENT MEZZANINE TRUST,

TCW/CRESCENT MEZZANINE INVESTMENT PARTNERS, L.P.,

CRESCENT/MACH I PARTNERS, L.P., and

TCW SHARED OPPORTUNITY FUND II, L.P., as Purchasers

$19,238,904 Principal Amount

8% Senior Secured Notes due December 31, 2004

Dated as of September 25, 2003

TABLE OF CONTENTS

SECTION 1. AMENDMENT AND RESTATEMENT

	1.1	Amendment and Restatement of the Notes
	1.2	Consummation of the Transactions
	1.3	Registration of the Notes
	1.4	Delivery Expenses
	1.5	Taxes
	1.6	Direct Payment
	1.7	Lost, Etc. Notes
	1.8	Indemnification
	1.9	Further Actions

SECTION 2. CLOSING CONDITIONS

	2.1	Delivery of the Transaction Documents
	2.2	Compliance with Agreements
	2.3	Completion of Other Transactions
	2.4	Representations and Warranties
	2.5	No Event of Default
	2.6	Proceedings Satisfactory
	2.7	Consents and Permits
	2.8	No Material Judgment or Order

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE ISSUER.

	3.1	Power and Authority
	3.2	Binding Agreement
	3.3	Consents and Approvals; No Violations
	3.4	Private Offering
	3.5	Brokers
	3.6	Representations and Warranties

SECTION 4. REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER.

	4.1	Power and Authority
	4.2	Binding Agreement
	4.3	Notes Restricted

SECTION 5. COVENANTS

	5.1	Payment of Notes; Satisfaction of Obligations
	5.2	Financial Statements and Reports
	5.3	Compliance Certificate

	5.4	Limitation on Restricted Payments
	5.5	Limitation on Incurrence of Additional Indebtedness and Issuance of Disqualified Stock
	5.6	Limitation on Liens
	5.7	Limitation on Sale of Assets
	5.8	Limitation on Capital Expenditures
	5.9	Intentionally Omitted
	5.10	Fiscal Years
	5.11	Intentionally Omitted
	5.12	Stay, Extension and Usury Laws.
	5.13	Corporate Existence; Merger; Successor Corporation.
	5.14	Limitation on the Businesses of the Issuer
	5.15	Taxes
	5.16	Investment Company Act
	5.17	Ownership of Subsidiaries
	5.18	Employee Plans
	5.19	Inconsistent Agreements
	5.20	Compliance with Laws; Maintenance of Licenses
	5.21	Inspection of Properties and Records
	5.22	Board of Director Observation Rights
	5.23	Maintenance of Office or Agency
	5.24	Private Placement Number
	5.25	Information to Prospective Purchasers
	5.26	Impairment of Security Interest

SECTION 6. REDEMPTION

	6.1	Mandatory Redemption
	6.2	Selection of Notes to Be Redeemed
	6.3	Notice of Redemption
	6.4	Effect of Notice of Redemption
	6.5	Payment of Redemption Price

SECTION 7. DEFAULTS AND REMEDIES

	7.1	Events of Default
	7.2	Acceleration of Notes: Remedies
	7.3	Other Remedies
	7.4	Waiver of Past Defaults
	7.5	Rights of Holders to Receive Payment
	7.6	Undertaking for Costs

SECTION 8. AMENDMENTS AND WAIVERS

	8.1	With Consent of Holders
	8.2	Revocation and Effect of Consents

	8.3	Notation on or Exchange of Notes
	8.4	Payment of Expenses
	8.5	Waiver of Defaults Occurring Prior to the Closing; Release of Claims

SECTION 9. DEFINITIONS

	9.1	Definitions.
	9.2	Rules of Construction

SECTION 10. MISCELLANEOUS

	10.1	Notices.
	10.2	Successors and Assigns
	10.3	Counterparts
	10.4	Headings
	10.5	Governing Law: Submission to Jurisdiction
	10.6	Entire Agreement
	10.7	Severability
	10.8	Further Assurances
	10.9	Disclosure of Financial Information
	10.10	Fair Construction


ANNEX A Form of Amended and Restated Note

iii

AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT

This Amended and Restated Securities Purchase Agreement dated as of September 25, 2003 (this “Agreement”), is entered into by and among Home Asset Management Corp., a Delaware corporation (the “Issuer”), and TCW/Crescent Mezzanine Partners, L.P., TCW/Crescent Mezzanine Trust, TCW/Crescent Mezzanine Investment Partners, L.P., Crescent/Mach I Partners, L.P. and TCW Shared Opportunity Fund II, L.P. (each, a “Purchaser,” and collectively, the “Purchasers”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in Section 9.1.

WHEREAS, the Issuer and the Purchasers are parties to that certain Securities Purchase Agreement, dated as of February 11, 1997, as amended by the Securities Purchase Amendments (the “Original Securities Purchase Agreement”), by and among the Issuer, the Purchasers, MDC Reit Holdings, LLC, a Delaware limited liability company (“Holdings”), and American Residential Investment Trust, Inc., a Maryland corporation (“Amreit”);

WHEREAS, pursuant to the Original Securities Purchase Agreement, the Issuer issued $25,000,000 in aggregate principal amount of its 12% Senior Secured Notes due February 11, 2002, as amended by the Notes Amendments (the “Original Notes”), to the Purchasers;

WHEREAS, the parties to the Original Purchase Agreement entered into Amendment No. 1 to Securities Purchase Agreement, dated as of December 20, 2001, pursuant to which Amreit was removed as a party to the Original Securities Purchase Agreement;

WHEREAS, the Issuer repaid $10,000,000 in aggregate principal amount of the Original Notes in 2001 and, as of the date hereof, the Purchasers collectively hold 100% of the outstanding Original Notes;

WHEREAS, the Original Notes are presently due on February 11, 2004;

WHEREAS, in connection with a proposed restructuring of the Issuer and Holdings, TCW and the holders of the Preferred Stock of the Issuer will contribute their ownership interests in Holdings to the Issuer and Holdings will merge with and into the Issuer, with the Issuer as the surviving entity (collectively, the “Restructuring”); and

WHEREAS, in connection with the Restructuring, the Issuer and the Purchasers desire to amend and restate the Original Securities Purchase Agreement in accordance with the terms herein, and the Issuer desires to pledge the Amreit Stock to secure its obligations under this Agreement.

In consideration of the premises, mutual covenants and agreements hereinafter contained and for other good and valuable consideration, the receipt and

adequacy of which are hereby acknowledged, the Issuer agrees and each of the Purchasers agrees, severally but not jointly, as follows:

SECTION 1. AMENDMENT AND RESTATEMENT.

1.1 Amendment and Restatement of the Notes.

(a) On or before the Closing, the Issuer will have authorized an amendment and restatement of the Original Notes, substantially in the form attached hereto as Annex A (the “Notes”). The Notes will provide, among other things, that they will from and after the Closing bear interest at a rate of 8% per annum, payable annually, and will be due on December 31, 2004. At the Closing, in exchange for the Original Notes, the Issuer shall issue to the holders of the Original Notes new certificates representing Notes with a principal amount equal to the outstanding principal amount under the Original Notes plus accrued and unpaid interest as of the date of the issuance of the Notes.

(b) The Notes will include such notations, legends or endorsements set forth thereon or required by law. The Notes will be in any principal amount. Subject to Section 1.7, the aggregate principal amount of the Notes outstanding at any one time may not exceed $19,238,904. The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Agreement and, to the extent applicable, the Issuer and the Purchasers, by their execution and delivery of this Agreement, expressly agree to such terms and provisions and to be bound thereby.

1.2 Consummation of the Transactions.

(a) Closing. The consummation of the transactions contemplated by this Agreement (the “Transactions”) shall take place at a closing (the “Closing”) at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400, Los Angeles, California 90071, concurrent with the execution of this Agreement by the parties hereto or such other Business Day as may be agreed upon by the Purchasers and the Issuer (the “Closing Date”). At the Closing, the parties hereto shall deliver the agreements, documents or instruments specified in Section 2.1.

(b) Fees and Expenses. Regardless of whether the Transactions are consummated, the Issuer agrees to pay or reimburse all reasonable expenses (other than Taxes) relating to this Agreement, including but not limited to:

(1) each Purchaser’s reasonable expenses incurred in connection with the transactions contemplated by any of the Transaction Documents;

(2) the reasonable fees and other charges and expenses of the Purchasers’ counsel, Skadden, Arps, Slate, Meagher & Flom LLP,

in connection with the Transaction Documents and the transactions contemplated thereby;

(3) the cost of printing, reproducing and delivering to each Purchaser’s home office or the office of such Purchaser’s designee, insured to such Purchaser’s satisfaction, each of the Transaction Documents;

(4) any reasonable fees and expenses (including the reasonable fees and expenses of counsel) in connection with any registration or qualification of the Notes required in connection with the offer and sale of the Notes pursuant to this Agreement under the securities or “blue sky” laws of any jurisdiction requiring such registration or qualification or in connection with obtaining any exemptions from such requirements;

(5) each Purchaser’s expenses (including the reasonable fees and expenses of counsel) relating to any amendment to, or modification or restatement of, or any waiver or consent or preservation of rights under, any of the Documents; and

(6) all other expenses, including without limitation fees and other charges and expenses of counsel and reasonable accountants’ fees incurred by the Issuer or Holdings in connection with the transactions contemplated by any of the Transaction Documents.

The Issuer shall deliver to each of the Purchasers or to such other persons as such Purchaser shall direct, concurrently with the Closing, by intra-bank or Federal funds bank wire transfer of same day funds, payment for any reasonable and documented out-of-pocket expenses for which such Purchaser is entitled to reimbursement pursuant to this Section 1.2(c).

(c) Other Purchasers. Each Purchaser’s obligations hereunder are subject to the execution and delivery of this Agreement by the other Purchasers listed on the signature pages hereof. The obligations of each Purchaser shall be several and not joint, and no Purchaser shall be liable or responsible for the acts of any other Purchaser under this Agreement.

1.3 Registration of the Notes.

The Issuer shall cause to be kept at its principal office a register for the registration and transfer of the Notes (the “Note Register”). The names and addresses of the Holders of Notes, the transfer of Notes and the names and addresses of the transferees of the Notes shall be registered in the Note Register. The Person in whose name any registered Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes of this Agreement, and the Issuer shall not be affected by any

notice to the contrary, until due presentment of such Note for registration of transfer so provided in this Section 1.3. Payment of or on account of the principal and interest on any registered Notes shall be made to or upon the written order of such registered holder. When Notes are presented to the Issuer, with a request to register the transfer of such Notes or to exchange such Notes for an equal amount of Notes of other authorized denominations, the Issuer shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met.

1.4 Delivery Expenses.

If a Holder surrenders any Note to the Issuer for any reason, the Issuer shall pay the cost of delivering to such Holder’s home office or to the office of such Holder’s designee from the Issuer insured to such Holder’s satisfaction, the surrendered Note and each Note issued in substitution, replacement or exchange for, or upon conversion of, the surrendered Note.

1.5 Taxes.

(a) The Issuer agrees to (i) pay all Taxes (other than Taxes in the nature of net or gross income, franchise or gift Taxes) and governmental fees in connection with the issuance, sale, delivery or transfer by the Issuer to each Holder of a Note and the execution and delivery of the other Transaction Documents, and (ii) hold such Holder harmless without limitation as to time against any and all liabilities with respect to all such Taxes and fees. The obligations of the Issuer under this Section 1.5 shall survive the payment or prepayment of the Notes, at maturity, upon redemption or otherwise, and the termination of this Agreement and the other Documents.

(b) The parties acknowledge and agree that (i) the Notes represent indebtedness of the Issuer for Tax purposes, (ii) the fair market value as of the date hereof of the Common Stock issued to the Purchasers in accordance with the Contribution Agreement is equal to the fair market value of the consideration transferred to the Issuer in exchange for such Common Stock, and (iii) there will be no “original issue discount” on the Notes, as determined pursuant to Sections 1271-1275 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The parties agree (i) to file all Tax Returns in a manner consistent with this Section 1.5(b), and (ii) not to take any Tax position inconsistent with this Section 1.5(b).

1.6 Direct Payment.

(a) The Issuer will pay or cause to be paid all amounts payable with respect to any Note (without any presentment of such Note and without any notation of such payment being made thereon) by crediting (before 12:00 Noon, New York time), by Federal funds bank wire transfer in same day funds to each Holder’s account in any bank in the United States of America as may be designated and specified in writing by such Holder at least two Business Days prior thereto. Each Purchaser’s initial bank account name and number for this purpose is set forth on the signature pages hereto.

Notwithstanding anything to the contrary contained in the Notes, if any principal amount payable with respect to a Note is payable, at maturity, upon redemption or otherwise, on a Legal Holiday, then the Issuer shall pay such amount on the next succeeding Business Day, and interest shall accrue on such amount until the date on which such amount is paid and payment of such accrued interest shall be made concurrently with the payment of such amount; provided that the Issuer may elect to pay in full (but not in part) any such amount on the last Business Day prior to the date such payment otherwise would be due, and no such additional interest shall accrue on such amount. Notwithstanding anything to the contrary contained in the Notes, if any interest payable with respect to a Note is payable on a Legal Holiday, then the Issuer shall pay such interest on the next succeeding Business Day, and such extension of time shall be included in the computation of the interest payment; provided that the Issuer may elect to pay in full (but not in part) any such interest on the last Business Day prior to the date such payment otherwise would be due, and such diminution in time shall be included in the computation of the interest payment.

1.7 Lost, Etc. Notes.

If a mutilated Note is surrendered to the Issuer or if the Holder of a Note claims and submits an affidavit or other evidence, satisfactory to the Issuer to the effect that the Note has been lost, destroyed or wrongfully taken, the Issuer shall issue a replacement Note if the customary requirements relating to replacement securities are reasonably satisfied. If required by the Issuer, such Holder must provide an indemnity bond, or other form of indemnity, sufficient in the judgment of the Issuer to protect the Issuer from any loss which it may suffer if a Note is replaced. If any Purchaser or any other institutional Holder (or nominee thereof) is the owner of any such lost, stolen or destroyed Note, then the affidavit of an authorized officer of such owner, setting forth the fact of loss, theft or destruction and of its ownership of the Note at the time of such loss, theft or destruction shall be accepted as satisfactory evidence thereof, and no further indemnity shall be required as a condition to the execution and delivery of a new Note other than the unsecured written agreement of such owner reasonably satisfactory to the Issuer to indemnify the Issuer or at the option of the Purchaser, an indemnity bond in the amount of the Note remaining outstanding.

Every replacement Note shall be an obligation of the Issuer.

1.8 Indemnification.

In addition to all other sums due hereunder or provided for in this Agreement or any of the other Documents and any and all obligations of the Issuer to indemnify any Purchaser hereunder or under any of the other Documents, the Issuer (the “Indemnifying Party”) hereby agrees, without limitation as to time, to indemnify each Purchaser, each Affiliate of a Purchaser and each director, officer, employee, counsel, agent or representative of such Purchaser and its Affiliates (collectively, the “Indemnified Parties”) against, and hold it and them harmless from, to the fullest extent lawful, all losses, claims, damages, liabilities, costs (including, without limitation, costs of

preparation and reasonable attorneys’ fees and disbursements) and expenses, including expenses of investigation but excluding Taxes (collectively, “Losses”), incurred by it or them and arising out of or in connection with this Agreement, the other Documents or the transactions contemplated hereby or thereby (or any other document or instrument executed herewith or pursuant hereto or thereto), regardless of whether the Transactions are consummated and regardless of whether any Indemnified Party is a formal party to any proceeding; provided, however, that the Indemnifying Party shall not be liable to any Indemnified Party for any Losses to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or review) that such Losses arose from the gross negligence or willful misconduct of such Indemnified Party, that (a) is independent of any wrongful act by the Indemnifying Party, its Affiliates or any of its representatives and (b) was not taken by such Indemnified Party in reliance upon any of the representations, warranties, covenants or promises of the Issuer made herein (including, without limitation, those incorporated by reference herein) or in the other Documents, including (without limitation) the certificates delivered by the Issuer pursuant hereto or thereto. The Indemnifying Party agrees to reimburse any Indemnified Party promptly for all such Losses as they are incurred by such Indemnified Party (regardless of whether it is or may be ultimately determined that an Indemnified Party is not entitled to indemnification hereunder). Prior to reimbursing any Indemnified Party for any Losses pursuant to this Section 1.8, the Indemnifying Party may require such Indemnified Party to provide a written undertaking to reimburse the Indemnifying Party if it is finally judicially determined by a court of competent jurisdiction (which determination is not subject to appeal or review) that such Indemnified Party was not entitled to indemnification pursuant to this Section 1.8 or otherwise. The obligations of the Indemnifying Party under this Section 1.8 shall survive the payment or prepayment of the Notes, at maturity, upon acceleration, redemption or otherwise, any transfer of the Notes by any Purchaser and the termination of this Agreement or any of the other Documents.

In addition, the Issuer shall, without limitation as to time, indemnify, reimburse, defend and hold harmless the Indemnified Parties for, from, and against all Losses resulting to, imposed on, or incurred by any of the Indemnified Parties, directly or indirectly, arising out of any of the following: (i) any pollution or threat to human health or the environment that is related in any way to the management, use, control, ownership or operation of the business or property in connection with the business of the Issuer or any of its Subsidiaries, by the Issuer or such Subsidiary (if any), or any Person for whom the Issuer or such Subsidiary (if any) is or may be responsible by law or contract, including, without limitation, all on-site and off-site activities involving Materials of Environmental Concern, and that occurred, existed, arises out of conditions or circumstances that occurred or existed, or was caused, in whole or in part, on or before the Closing Date; or (ii) any Environmental Claim against any Person whose liability for such Environmental Claim the Issuer or any of its Subsidiaries has assumed or retained either contractually or by operation of law, including but not limited to any pollution or threat to human health or the environment, or any Federal, state, local or foreign approvals.

In case any action, claim or proceeding shall be brought against any Indemnified Party with respect to which indemnity may be sought against the Indemnifying Party hereunder, such Indemnified Party shall promptly notify the Indemnifying Party in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party and payment of all fees and expenses incurred in connection with the defense thereof. The failure to so notify the Indemnifying Party shall not affect any obligation it may have to any Indemnified Party under this Agreement or otherwise, except to the extent that (as finally determined by a court of competent jurisdiction (which determination is not subject to review or appeal)) such failure materially and adversely prejudiced the Indemnifying Party. Each Indemnified Party shall have the right to employ separate counsel in such action, claim or proceeding and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of each Indemnified Party unless: (i) the Indemnifying Party has agreed to pay such expenses; or (ii) the Indemnifying Party has failed promptly to assume the defense and employ counsel reasonably satisfactory to such Indemnified Party; or (iii) the named parties to any such action, claim or proceeding (including any impleaded parties) include any Indemnified Party and the Indemnifying Party or an Affiliate of the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that either (x) there may be one or more legal defenses available to it which are different from or in addition to those available to the Indemnifying Party or such Affiliate or (y) a conflict of interest may exist if such counsel represents such Indemnified Party and the Indemnifying Party or its Affiliate; provided that, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel in the circumstances described in clause (i), (ii) or (iii) above, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Parties; provided, however, that the Indemnifying Party shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be responsible hereunder for the fees and expenses of more than one such firm of separate counsel (in addition to any local counsel), which counsel shall be designated by such Indemnified Party. The Indemnifying Party shall not be liable for any settlement of any such action effected without its written consent (which shall not be unreasonably withheld). The Indemnifying Party agrees that it will not, without the Indemnified Parties’ prior written consent, consent to entry of any judgment or settle or compromise any pending or threatened claim, action or proceeding in respect of which indemnification or contribution may be sought hereunder unless the foregoing contains an unconditional release, in form and substance reasonably satisfactory to the Indemnified Parties, of the Indemnified Parties from all liability and obligation arising therefrom.

If the indemnification provided for in this Section 1.8 is unavailable to, or insufficient to hold harmless, any Indemnified Party in respect of any Losses referred to therein, then the Indemnifying Party shall have an obligation to contribute to the amount paid or payable by such Persons as a result of such Losses in such proportion as is

appropriate to reflect the relative fault, as finally judicially determined by a court of competent jurisdiction (which determination is not subject to appeal or review), of the Indemnifying Party, its subsidiaries and Affiliates, on the one hand, and such Indemnified Party, on the other hand, in connection with the actions which resulted in such Losses as well as any other relevant equitable considerations. The amount paid or payable by any such Person as a result of the Losses referred to above shall be deemed to include, subject to the limitations set forth in this Section 1.8, any legal or other fees or expenses reasonably incurred by such Person in connection with any investigation, lawsuit or legal or administrative action or proceeding.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 1.8 were determined by pro rata allocation or solely by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation, in each case, as finally judicially determined by a court of competent jurisdiction (which determination is not subject to appeal or review).

1.9 Further Actions.

During the period from the date hereof to the Closing Date, the Issuer shall (i) take all actions necessary or appropriate to cause its representations and warranties contained in Section 3 to be true and correct as of the Closing Date (unless stated to refer to another date), both before and after giving effect to the transactions contemplated by this Agreement and the other Transaction Documents, as if made on and as of such date, and (ii) take, or cause to be taken, all action, and do, or cause to be done, all things necessary, proper or advisable under applicable law and regulations to consummate and make effective the Transactions, including, without limitation, obtaining all consents and approvals of all Persons and removing all injunctive or other impediments or delays, legal or otherwise, which are necessary to the consummation of the transactions contemplated by this Agreement and the other Transaction Documents.

SECTION 2. CLOSING CONDITIONS.

The obligations of each Purchaser to consummate the Transactions at the Closing shall be subject to the satisfaction of each of the following conditions on or before the Closing Date:

2.1 Delivery of the Transaction Documents.

The Issuer shall have delivered to each Purchaser, in form and substance satisfactory to such Purchaser, the following:

(a) The Notes, duly executed by the Issuer, in aggregate principal amount set forth below such Purchaser’s name on the signature pages hereto, in exchange for the Original Notes.

(b) Resolutions of the board of directors of the Issuer, certified by the Secretary or Assistant Secretary of the Issuer, to be duly adopted and in full force and effect on such date, authorizing (i) the execution, delivery and performance of this Agreement, the Notes, and the other Transaction Documents to which the Issuer is a party and the consummation of the transactions contemplated hereby and thereby and (ii) specific officers of the Issuer to execute and deliver this Agreement, the Notes, and any other Transaction Documents to which the Issuer is a party.

(c) Certificates of the Secretary or an Assistant Secretary of the Issuer as to the incumbency and signatures of the officers or representatives of such entity executing any of the Transaction Documents, together with evidence of the incumbency of such Secretary or Assistant Secretary.

(d) True and correct copies of the Assumption Agreement and Amendment to Pledge Agreement and the Amendment to Collateral Agency Agreement.

(e) Such additional information and materials as any Purchaser may reasonably request.

2.2 Compliance with Agreements.

The Issuer shall have performed and complied in all material respects with all agreements, covenants and conditions contained herein, in each of the other Transaction Documents and in any other document contemplated hereby or thereby which are required to be performed or complied with by such party on or before the Closing Date.

2.3 Completion of Other Transactions.

Simultaneously with or prior to the Closing:

(a) Each of the other Transaction Documents shall have been executed and delivered by each of the parties thereto in form and substance satisfactory to the Purchasers, and such parties shall have consummated the transactions contemplated thereby, in accordance with all applicable laws.

(b) The Restructuring shall have been completed pursuant to the Contribution Agreement and the Restructuring Merger Agreement.

2.4 Representations and Warranties.

Unless stated to relate to another date, all of the representations and warranties of the Issuer contained or incorporated by reference herein or in any of the

other Transaction Documents shall be true and correct on and as of the Closing Date, both before and after giving effect to the transactions contemplated hereby and by the other Transaction Documents.

2.5 No Event of Default.

No event shall have occurred and be continuing, or would result from the consummation of the transactions contemplated to be consummated on or prior to the Closing Date by this Agreement or any of the other Transaction Documents, that constitutes or would constitute a Default or an Event of Default.

2.6 Proceedings Satisfactory.

All proceedings taken in connection with the issuance of the Notes, the transactions contemplated hereby and all documents and papers relating thereto, shall be reasonably satisfactory to such Purchaser. Such Purchaser and its counsel shall have received copies of such documents and papers as they may reasonably request in connection therewith, all in form and substance satisfactory to such Purchaser.

2.7 Consents and Permits.

The Issuer shall have received all consents, permits, approvals and authorizations and sent or made all notices, filings, registrations and qualifications as may be required pursuant to any law, statute, regulation or rule (Federal, state, local or foreign) or pursuant to any other agreement, order or decree to which any of them is a party or to which any of them is subject, in connection with the transactions to be consummated on or prior to the Closing Date as contemplated by this Agreement or any of the other Transaction Documents.

2.8 No Material Judgment or Order.

There shall not be on the Closing Date any judgment or order of a court of competent jurisdiction or any ruling of any agency of the Federal, state or local government that, in the reasonable judgment of any Purchaser or its counsel, would prohibit the consummation of, or materially impair the ability of any party hereto to consummate, the transactions contemplated by this Agreement or any of the other Transaction Documents.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE ISSUER.

A. Representations and Warranties of the Issuer. The Issuer represents and warrants on the date hereof and as of the Closing, as follows:

3.1 Power and Authority.

The Issuer is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation. The Issuer has full corporate power

and authority to execute and deliver this Agreement and each of the other Transaction Documents, and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by the Issuer of this Agreement and each of the other Transaction Documents, and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by the board of directors of the Issuer, and no other corporate action on the part of the Issuer is necessary to authorize the execution and delivery by the Issuer of this Agreement and the other Transaction Documents or the consummation by it of the transactions contemplated hereby and thereby.

3.2 Binding Agreement.

This Agreement and each of the other Transaction Documents have been duly executed and delivered by the Issuer and, assuming due and valid authorization, execution and delivery thereof by the Purchasers and the other parties thereto, each of this Agreement and the other Transaction Documents constitutes a legal, valid and binding obligation of the Issuer, enforceable against the Issuer in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’ rights generally and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

3.3 Consents and Approvals; No Violations.

Except for the filings, registrations, qualifications, permits, authorizations, notices, consents and approvals (i) expressly contemplated by this Agreement, (ii) as have been already obtained, filed or given on or prior to the Closing Date (and copies of which will be delivered to the Purchasers) and (iii) under Federal and state securities laws which are permitted to be made after the Closing Date and which the Issuer hereby agrees to file within the time period prescribed by applicable law, none of the execution, delivery or performance of this Agreement or any of the other Transaction Documents by the Issuer, the consummation by the Issuer of any of the transactions contemplated hereby or thereby, or compliance by the Issuer with any of the provisions hereof or thereof will (a) conflict with or result in any breach of any provision of the Charter Documents of the Issuer, (b) require any filing, registration or qualification with, or permit, authorization, consent or approval of, any governmental entity or other Person (including consents from parties to loans, contracts, leases and other agreements to which the Issuer is a party), (c) require any consent, approval or notice under, or result in a violation or breach of, or constitute (with or without due notice or the passage of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any agreement to which the Issuer is a party, or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Issuer or any of its properties or assets.

3.4 Private Offering.

Assuming the truth and correctness of the representations and warranties set forth in Section 4, the issuance of the Securities hereunder are exempt from the registration and prospectus delivery requirements of the Securities Act. In the case of each offer or issuance of the Notes, no form of general solicitation or general advertising was used by the Issuer or its representatives, including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

3.5 Brokers.

The Issuer has not dealt with any broker, finder, commission agent or other such intermediary in connection with the issuance of the Notes and the transactions contemplated by this Agreement and the other Transaction Documents, and the Issuer is not under any obligation to pay any broker’s or finder’s fee or commission or similar payment in connection with such transactions.

3.6 Representations and Warranties.

All representations and warranties (and the related schedules) of the Issuer contained in any of the other Transaction Documents, each in the form as in effect on the date hereof without amendment or waiver, shall be deemed to constitute representations and warranties of the Issuer under this Agreement with the same force and effect as the representations and warranties expressly set forth herein. Such representations and warranties are true and correct on the date hereof and will be true and correct as of the Closing Date as if made at and as of such date and are hereby incorporated by reference herein as if made hereby by the Issuer to the Purchasers. Unless otherwise defined herein, for purposes of this Section 3.6, the definitions contained in each of the other Transaction Documents (insofar as they relate to the representations and warranties incorporated herein) are hereby incorporated by reference herein and made a part hereof.

B. Survival of Representations and Warranties. All of the representations and warranties of the Issuer hereunder and under the other Transaction Documents shall survive the execution and delivery of the same, any investigation by any Purchaser and the Closing.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER.

Each Purchaser (as to itself only) and each Account Manager (as to the managed accounts of Purchasers) represents and warrants to the Issuer that:

4.1 Power and Authority.

Such Purchaser or such Account Manager is an entity duly organized, validly existing and in good standing under the laws of its state of incorporation. Such Purchaser or such Account Manager has all requisite power and authority to execute and deliver this Agreement, and to consummate the Transactions. Each Purchaser has taken all actions necessary to authorize it (or, in the case of an Account Manager, such Account Manager is duly authorized by the managed account for which it is acting) to execute, deliver and perform this Agreement and to consummate the Transactions.

4.2 Binding Agreement.

This Agreement has been duly executed and delivered by such Purchaser or such Account Manager and, assuming due and valid authorization, execution and delivery thereof by the Issuer, this Agreement constitutes a legal, valid and binding obligation of such Purchaser or such Account Manager, enforceable against such Purchaser or such Account Manager in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’ rights generally and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

4.3 Notes Restricted.

No transfer or sale (including, without limitation, by pledge or hypothecation) of the Notes by any Holder which is otherwise permitted hereunder, other than a transfer or sale to the Issuer, shall be effective unless such transfer or sale is made (a) pursuant to an effective registration statement under the Act and a valid qualification under applicable state securities or “blue sky” laws or (b) without such registration or qualification as a result of the availability of an exemption therefrom and, if reasonably requested by the Issuer, counsel for such Holder shall have furnished the Issuer with an opinion, reasonably satisfactory in form and substance to the Issuer, to the effect that no such registration is required because of the availability of an exemption from the registration requirements of the Securities Act; provided, however, that with respect to transfers by Holders to their Affiliates, no such opinion shall be required. A transfer made by a Holder which is a state-sponsored employee benefit plan to a successor trust or fiduciary pursuant to a statutory reconstitution shall be expressly permitted and no opinions of counsel shall be required in connection therewith.

Notwithstanding anything to the contrary in this Section 4.4, Crescent/MACH I Partners, L.P. (“MACH I”) and TCW/Crescent Mezzanine Trust (“Crescent Trust”) shall each be permitted to pledge the Notes held by it to a trustee for the benefit of secured noteholders pursuant to documents relating to the financing of MACH I and Crescent Trust, respectively.

SECTION 5. COVENANTS.

So long as any of the Notes remain unpaid and outstanding, the Issuer covenants to the Holders of outstanding Notes as follows:

5.1 Payment of Notes; Satisfaction of Obligations.

The Issuer shall pay the principal of, and interest on, the Notes on the dates and in the manner provided in the Notes. To the extent lawful, the Issuer shall pay interest (including interest accruing after the commencement of any proceeding under any Bankruptcy Law) on all unpaid amounts outstanding under the Notes (including overdue installments of principal or interest) at a rate equal to 10% per annum, compounded annually.

5.2 Financial Statements and Reports.

(a) The Issuer shall maintain a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in conformity with GAAP. Upon the reasonable request of any Holder, the Issuer shall deliver to each Holder the financial statements and other reports described below:

(1) Quarterly Financials.

As soon as available and in any event within forty-five (45) days after the end of each fiscal quarter (other than the last quarter of any fiscal year), the Issuer shall deliver: (A) the consolidated balance sheet of the Issuer and its Subsidiaries (if any) as at the end of such fiscal quarter and the related consolidated statements of operations, shareholders’ equity and cash flows for such fiscal quarter and for the period from the beginning of the then current fiscal year to the end of such fiscal quarter, setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous fiscal year and the corresponding figures from the consolidated plan and financial forecast for the current fiscal year delivered pursuant to subsection 5.2(a)(3)(iv) of this Section 5.2, all in reasonable detail and certified by the chief financial officer of the Issuer that they present fairly the consolidated financial condition of the Issuer and its Subsidiaries (if any) as at the dates indicated and the results of their operations, shareholders’ equity and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments, and (B) a schedule of the outstanding Indebtedness for borrowed money of the Issuer and its Subsidiaries (if any) describing in reasonable detail each such debt issue or loan outstanding and the principal amount (excluding original issue discount) and amount of accrued and unpaid interest with respect to each such debt issue or loan.

(2) Year-End Financials.

As soon as available and in any event within ninety (90) days after the end of each fiscal year, the Issuer shall deliver: (A) the consolidated balance sheet of the Issuer and its Subsidiaries (if any) as at the end of such year and the related consolidated statements of income, shareholders’ equity and cash flows of the Issuer and its Subsidiaries (if any) for such fiscal year, setting forth in each case in comparative form the corresponding figures for the previous fiscal year and the corresponding figures from the consolidated plan and financial forecast delivered pursuant to subsection 5.2(a)(3)(iv) of this Section 5.2 for the fiscal year covered by such financial statements, all in reasonable detail and certified by the chief financial officer of the Issuer that they present fairly the consolidated financial condition of the Issuer and its Subsidiaries (if any) as at the dates indicated and the results of their operations and their cash flows for the periods indicated, (B) a schedule of the outstanding Indebtedness for borrowed money of the Issuer and its Subsidiaries (if any) describing in reasonable detail each such debt issue or loan outstanding and the principal amount (excluding original issue discount) of accrued and unpaid interest with respect to each such debt issue or loan, and (C) in the case of such consolidated financial statements, a report thereon of the Independent Auditors, which report shall be unqualified, shall express no doubts about the ability of the Issuer and its Subsidiaries (if any) to continue as a going concern, and shall state that such consolidated financial statements fairly present the consolidated financial position of the Issuer and its Subsidiaries (if any) as of the dates indicated and the results of their operations, shareholders’ equity and their cash flows for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements) and that the examination by such Independent Auditors in connection with such consolidated financial statements has been made in accordance with United States generally accepted auditing standards.

(3) Other Information.

(i) Promptly upon receipt thereof, copies of all reports submitted to the management of the Issuer by independent public accountants, whether in connection with each annual, interim or special audit of the consolidated financial statements of the Issuer made by such accountants or otherwise, including the management letter submitted by such accountants to management in connection with their annual audit;

(ii) Copies of all material reports, letters and other correspondence from local, state or Federal regulatory or other agencies relating to business, licenses or operating contracts of the Issuer or any of its Subsidiaries;

(iii) Notice to each Holder of (i) any violation of or noncompliance with any Environmental Laws that could reasonably be expected

to have a Material Adverse Effect, (ii) any communication (written or oral) or Environmental Claim, whether from a governmental authority, citizens group, employee or otherwise, alleging that the Issuer is not in compliance with any Environmental Law or asserting liability of the Issuer for contamination from or as a result (directly or indirectly) of any Materials of Environmental Concern, which noncompliance or liability could reasonably be expected to have a Material Adverse Effect or (iii) any releases or threatened releases (including, without limitation, any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, disposing or dumping, on-site or offsite) of any Materials of Environmental Concern for which the Issuer could be held liable, either in fact or by law, which releases could reasonably be expected to have a Material Adverse Effect;

(iv) A consolidated plan and financial forecast for the Issuer and its Subsidiaries (if any) to be delivered to the Holders on or prior to December 1 of the year preceding the year to which such consolidated plan and financial forecast relates, in the same form as such consolidated plan and financial forecast is delivered to the members of the board of directors of the Issuer; and

(v) Copies of such other information and data with respect to the Issuer or any of its Subsidiaries as from time to time may be reasonably requested by any Holder.

(b) Each financial statement delivered pursuant to Section 5.2(a)(1) (Quarterly Financials) or Section 5.2(a)(2) (Year-End Financials) shall be in a form reasonably acceptable to each Purchaser and, in the case of financial statements delivered pursuant to Section 5.2(a)(1) or Section 5.2(a)(2), shall be accompanied by a brief narrative description of business and financial trends and developments material to the Persons included in such financial statements and significant transactions that have occurred in the appropriate period or periods covered thereby.

(c) The Issuer shall cause each of the Independent Auditors who perform audits of the financial statements of the Issuer, to provide a letter to each of the Holders, reasonably satisfactory to each such Holder, stating that such Holder shall be entitled to rely upon each certification by such Independent Auditors of the consolidated financial statements of the Issuer. The Issuer shall also provide each of such Independent Auditors with instructions that they may communicate directly with each Holder.

5.3 Compliance Certificate.

(a) Upon the request of any Holder, the Issuer shall deliver to the Holders, within thirty (30) days after the end of each calendar month, an Officers’ Certificate stating that a review of the activities of the Issuer and its Subsidiaries (if any) during the preceding month, fiscal quarter or fiscal year, as the case may be, has been made under the supervision of the signing Officers with a view to determining whether

the Issuer and its Subsidiaries (if any) have kept, observed, performed and fulfilled their respective obligations under this Agreement, and further stating, as to each such Officer signing such certificate, that to his or her knowledge, the Issuer and its Subsidiaries (if any) each has kept, observed, performed and fulfilled each and every covenant contained in this Agreement (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge) and that to his or her knowledge, no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes are prohibited or if such event has occurred, a description of the event.

(b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the financial statements delivered pursuant to Section 5.2(a)(2) shall be accompanied by a written statement of the Independent Auditors that in making the examination necessary for certification of such financial statements nothing has come to their attention which would lead them to believe that the Issuer or any of its Subsidiaries has violated any provisions of this Agreement or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such Independent Auditors shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation.

(c) The Issuer shall deliver to the Holders, forthwith upon becoming aware of (i) any Default or Event of Default or (ii) any default or event of default under any other loan agreement, mortgage, indenture or instrument referred to in Section 7.1(f), an Officers’ Certificate specifying in reasonable detail such Default, Event of Default or default or event of default and the nature of any remedial or corrective action the Issuer or its Subsidiaries propose to take with respect thereto.

5.4 Limitation on Restricted Payments.

The Issuer shall not, and shall cause each of its Subsidiaries (if any) not to, (a) declare or pay any dividends, either in cash or property, on, or make any distribution to the holders (as such) in respect of, any class of Equity Interest in the Issuer or any of its Subsidiaries (if any), (b) purchase, redeem or otherwise acquire or retire for value any Equity interests of the Issuer or any of its Subsidiaries or any other Affiliate of the Issuer, (c) purchase, redeem, defease or otherwise acquire or retire for value any indebtedness (other than the Notes) that is pari passu with or subordinated to the Notes, or (d) make any Investment, except, in each of the foregoing cases, as specifically permitted by the Issuer’s Charter Documents.

5.5 Limitation on Incurrence of Additional Indebtedness and Issuance of Disqualified Stock.

The Issuer shall not, and shall cause each of its Subsidiaries (if any), including without limitation, upon the creation or acquisition of such Subsidiary, not to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly

or indirectly liable with respect to any Indebtedness or issue any Disqualified Stock other than pursuant to this Agreement, the Issuer’s Charter Documents or the Notes.

5.6 Limitation on Liens.

The Issuer shall not, and shall cause each of its Subsidiaries (if any) not to, create or suffer to exist any Liens upon any assets of the Issuer or any such Subsidiaries or any shares of capital stock of such Subsidiaries, in each case now owned or hereafter acquired; provided, however, that this Section 5.6 shall not prohibit the creation or continuing existence of any Permitted Lien.

5.7 Limitation on Sale of Assets.

The Issuer shall not, and shall cause each of its Subsidiaries (if any) not to, make any Asset Sale.

5.8 Limitation on Capital Expenditures.

The Issuer shall not, and shall cause each of its Subsidiaries (if any) not to, make or incur Capital Expenditures in any fiscal year.

5.9 Intentionally Omitted.

5.10 Fiscal Years.

At all times, the Issuer shall maintain, and shall cause each of its Subsidiaries (if any) to maintain, its fiscal year ending on December 31st.

5.11 Intentionally Omitted.

5.12 Stay, Extension and Usury Laws.

The Issuer covenants and agrees (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, and will use its best efforts to resist any attempts to claim or take the benefit of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of its obligations under this Agreement or the Notes; and the Issuer (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holders, but will suffer and permit the execution of every such power as though no such law has been enacted.

5.13 Corporate Existence; Merger; Successor Corporation.

(a) The Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate or other existence and, to the

extent it has any Subsidiary, the corporate or other existence of such Subsidiary, in each case, in accordance with the organizational documents and the corporate or other rights (charter and statutory), licenses and franchises of the Issuer and such Subsidiary; provided, however, that the Issuer and its Subsidiaries (if any) shall not be required to preserve any such right, license or franchise, or corporate or other existence, if the board of directors of the Issuer shall determine in good faith that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and its Subsidiaries (if any) and that the loss thereof is not adverse in any material respect to any Holder.

(b) The Issuer shall not in a single transaction or through a series of related transactions, (i) consolidate with or merge with or into any other Person, or transfer (by lease, assignment, sale or otherwise) all or substantially all of its properties and assets as an entirety or substantially as an entirety to another Person or group of affiliated Persons (unless, in the case of the Amreit Stock, such transfer is effected in accordance with the provisions of the Stockholders Agreement) or (ii) adopt a Plan of Liquidation.

5.14 Limitation on the Businesses of the Issuer.

The Issuer shall not conduct or operate any business, perform any obligations, hold any assets; provided, however, that the Issuer may own Equity Interests in Amreit; provided, further, however, that the Issuer may (i) exercise any rights or privileges it has by virtue of its ownership of the Equity Interests in Amreit, (ii) enter into, and perform its obligations under, each of the Documents to which it is a party, (iii) pay its Taxes and (iv) otherwise maintain its existence. At all times, the Issuer shall own directly all the Amreit Shares and shall not distribute, sell, convey, transfer or otherwise dispose of any of the Amreit Stock, except as provided for under the Stockholders Agreement and the Pledge Agreement.

5.15 Taxes.

The Issuer shall, and shall cause each of its Subsidiaries (if any) to, pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all Taxes levied or imposed upon the Issuer or such Subsidiary, as the case may be, or upon the income, profits or property of the Issuer or such Subsidiary, as the case may be, and (ii) all Taxes, which, if unpaid, would or may by law become a Lien, upon the property of the Issuer or such Subsidiary, as the case may be; provided, however, that neither the Issuer nor any of its Subsidiaries shall be required to pay or discharge or cause to be paid or discharged any such Tax, the applicability or validity of which is being contested in good faith by appropriate proceedings which will prevent the forfeiture or sale of any property of the Issuer or such Subsidiary, as the case may be, and for which disputed amounts reserves have been established in accordance with GAAP, in an amount which the Issuer believes in good faith is adequate.

5.16 Investment Company Act.

The Issuer shall not, and shall cause each of its Subsidiaries (if any) not to, become an investment company subject to registration under the Investment Company Act of 1940, as amended.

5.17 Ownership of Subsidiaries.

The Issuer shall not create or cause or permit to exist any Subsidiary of the Issuer.

5.18 Employee Plans.

The Issuer shall not, and shall cause each of its Subsidiaries (if any) not to, create, adopt or approve any Employee Plan.

5.19 Inconsistent Agreements.

The Issuer shall not, and shall cause each of its Subsidiaries (if any) not to, (a) enter into any agreement or arrangement that is inconsistent with, or would impair the ability of the Issuer or any of its Subsidiaries to fulfill the obligations of the Issuer or any of its Subsidiaries under, this Agreement, or (b) supplement, amend or otherwise modify the terms of their respective Charter Documents if the effect thereof would be materially adverse to the Holders.

5.20 Compliance with Laws; Maintenance of Licenses.

The Issuer shall, and shall cause each of its Subsidiaries (if any) to, comply with all statutes, ordinances, governmental rules and regulations, judgments, orders and decrees (including all Environmental Laws) to which any of them is subject, and maintain, obtain and keep in effect all licenses, permits, franchises and other governmental authorizations necessary to the ownership or operation of their respective properties or the conduct of their respective businesses, except to the extent that the failure to so comply or maintain, obtain and keep in effect could not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.

5.21 Inspection of Properties and Records.

The Issuer shall allow, and shall cause each of its Subsidiaries (if any) to allow, each Purchaser and each Holder of at least $5,000,000 in aggregate principal amount of the Notes or, in the event there is no Holder of at least $5,000,000 in aggregate principal amount of the Notes, each Purchaser and the Holder who holds the greatest aggregate principal amount of the Notes (and so long as a Default or an Event of Default has occurred and is continuing, each Purchaser and Holder) (or, in each case, such Persons as any of them may designate) (individually and collectively, “Inspectors”),

subject to appropriate agreements as to confidentiality, (a) to visit and inspect any of the properties of the Issuer or any of its Subsidiaries, (b) to examine all their books of account, records, reports and other papers and to make copies and extracts therefrom, (c) to discuss their respective affairs, finances and accounts with their respective officers and employees and (d) to discuss the financial condition of the Issuer and its Subsidiaries (if any) with their independent accountants upon reasonable notice to the Issuer of its intention to do so and so long as the Issuer shall be given the reasonable opportunity to participate in such discussions (and by this provision the Issuer authorizes said accountants to have such discussions with the Inspectors). All such visits, examinations and discussions set forth in the preceding sentence shall be at such reasonable times and as often as may be reasonably requested; provided that unless a Default or an Event of Default shall have occurred and be continuing such visits shall be limited to one per calendar quarter. If a Default or an Event of Default shall have occurred and be continuing, the Issuer shall pay or reimburse all Inspectors for expenses that such Inspectors may reasonably incur in connection with any such visitations or inspections.

5.22 Board of Director Observation Rights.

In the event no member of the board of directors of the Issuer is nominated or appointed by the Purchasers or their Affiliates, each of the Purchasers shall have the right to have one representative present (whether in person or by telephone) at all meetings of the boards of directors (and committees thereof) of the Issuer; provided that such representative shall not be entitled to vote at such meetings. The Issuer shall send to each such representative all of the notices, information and other materials that are distributed to the members of the board of directors of the Issuer, and shall provide the Purchasers with a notice and agenda of each meeting of the board of directors (and committees thereof) of the Issuer at the same time as delivered to the members of such board of directors; provided, however, that upon the request of any such representative, the Issuer shall refrain from sending such notices, information and other materials for so long as such representative shall request. Such Purchasers shall provide notice to the Issuer of the identity and address of, or any change with respect to the identity or address of, such representative. The Issuer shall reimburse the Purchasers for the reasonable out-of-pocket expenses of one such representative incurred in connection with the attendance at such meetings.

5.23 Maintenance of Office or Agency.

The Issuer shall maintain (a) an office or agency in the Borough of Manhattan, The City of New York where the Notes may be presented for payment; (b) an office or agency where the Notes may be presented for registration and transfer and for exchange as provided in this Agreement; and (c) an office or agency where notices and demands to or upon the Issuer in respect of the Notes may be served. The location of such office or agency initially shall be as set forth on Schedule 5.23. The Issuer shall give to each Holder written notice of any change of location thereof.

5.24 Private Placement Number.

The Issuer consents to the filing of copies of this Agreement with Standard & Poor’s Corporation, or such other organization acceptable to the Purchasers, to obtain a private placement number and with the National Association of Insurance Commissioners.

5.25 Information to Prospective Purchasers.

The Issuer shall, upon the request of any Purchaser or subsequent Holder, deliver to such Purchaser or such Holder and any prospective purchaser designated by such Purchaser or such Holder promptly following the request of such Purchaser or such Holder or such prospective purchaser such information which such Purchaser or such Holder or such prospective purchaser may reasonably request in order to comply with the information requirements of Rule 144A.

5.26 Impairment of Security Interest.

The Issuer shall not, and shall cause each of its Subsidiaries (if any) not to, take any action that would have the result of impairing the security interests created pursuant to the Pledge Agreement, unless such action is permitted thereby.

SECTION 6. REDEMPTION.

6.1 Mandatory Redemption.

(a) The Issuer shall redeem the Notes, or a portion thereof, in accordance with the terms and conditions provided herein and in Section 4 of the Notes.

(b) Within four Business Days after (i) the date on which any or all of the shares of the Amreit Stock are sold, transferred, conveyed or otherwise disposed of or (ii) the consummation of any Asset Sale permitted by the Majority Holders, the Issuer shall apply the Net Proceeds thereof to the redemption, pursuant to this Section 6, of such principal amount of the Notes as the Purchasers may determine in their sole discretion. The redemption price for Notes that the Issuer is required to redeem pursuant to this Section 6.1(b) shall be equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon to (and including) the Redemption Date.

6.2 Selection of Notes to Be Redeemed.

If fewer than all of the Notes are to be redeemed, the Issuer shall redeem the Notes pro rata, in such manner as complies with applicable legal requirements, if any. The Issuer may select for redemption any portions of the principal of Notes. Provisions of this Agreement that apply to Notes called for redemption also apply to portions of Notes called for redemption.

6.3 Notice of Redemption.

At least thirty (30) days but not more than sixty (60) days before a Redemption Date, the Issuer shall mail a notice of redemption (“Notice of Redemption”) by first-class mail to each Holder whose Notes are to be redeemed at such Holder’s registered address; provided, however, that in the case of a redemption of Notes required pursuant to Section 6.1(c), the Issuer shall not be required to mail the relevant Notice of Redemption prior to two (2) days before the relevant Redemption Date. Each Notice of Redemption shall identify the Notes to be redeemed and shall state:

(a) the Redemption Date;

(b) the Redemption Price;

(d) that Notes called for redemption must be surrendered to the Issuer to collect the Redemption Price;

(e) that, unless the Issuer defaults in making the Redemption Price, interest on Notes called for redemption ceases to accrue on and after the Redemption Date, and the only remaining right of the Holders of such Notes is to receive payment of the Redemption Price upon surrender to the Issuer of the Notes redeemed;

(f) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the Redemption Date, and upon surrender of such Note, a new Note or Notes in aggregate principal amount equal to the unredeemed portion thereof will be issued;

(g) if fewer than all the Notes are to be redeemed, the identification of the particular Notes (or portion(s) thereof) to be redeemed, as well as the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Note(s) to be outstanding after such partial redemption; and

(h) the paragraph of the Notes pursuant to which the Notes are to be redeemed.

6.4 Effect of Notice of Redemption.

Once Notice of Redemption is mailed in accordance with Section 6.3 above, Notes called for redemption become due and payable on the Redemption Date and at the Redemption Price. Upon surrender to the Issuer, such Notes called for redemption shall be paid at the Redemption Price.

6.5 Payment of Redemption Price.

On presentation and surrender of any Notes with respect to which a Notice of Redemption has been given, at a place of payment specified in such notice, such Notes or specified portions thereof shall be paid and redeemed by the Issuer at the applicable Redemption Price.

If, on or prior to the Redemption Date, the Issuer deposits in a segregated account or otherwise sets aside funds sufficient to pay the Redemption Price of the Notes called for redemption, then, unless the Issuer defaults in the payment of such Redemption Price, interest on the Notes to be redeemed will cease to accrue on and after the applicable Redemption Date, regardless of whether such Notes are presented for payment.

SECTION 7. DEFAULTS AND REMEDIES.

7.1 Events of Default.

An “Event of Default” occurs if:

(a) the Issuer defaults in the payment of the principal of any Note when the same becomes due and payable at maturity, upon redemption or otherwise;

(b) the Issuer defaults in the payment of interest on any Note or any other amount payable hereunder when the same becomes due and payable and the Default continues for a period of five (5) days;

(c) the Issuer fails to comply with any of the agreements, covenants, or provisions of this Agreement or the Notes and the Default continues for the period and after the notice specified below;

(d) if any of the representations or warranties of the Issuer made in this Agreement (including those representations and warranties incorporated by reference herein) are untrue in any respect, the result of which could reasonably be expected to have a Material Adverse Effect;

(e) if the Issuer sells, transfers or otherwise disposes of any Equity Interests in Amreit, other than such sales, transfers or dispositions in accordance with the provisions of the Stockholders Agreement;

(f) if the Issuer fails to sell, transfer or otherwise dispose of any Equity Interests in Amreit in the manner of, and within five (5) Business Days after, TCW’s request (made in accordance with the Stockholders Agreement) to the Issuer that such Equity Interests be sold, transferred or otherwise disposed of;

(g) if (i) the Issuer or any of its Subsidiaries defaults in the payment of principal or interest payments under any loan agreement, note, mortgage, indenture or

instrument under which there may be issued or by which there may be secured or evidenced any other indebtedness of the Issuer or any of its Subsidiaries for borrowed money (or the payment of which is guaranteed by the Issuer or any of its Subsidiaries), whether such indebtedness or guarantee now exists or shall be created hereafter, and the principal amount of such indebtedness, together with the principal amount of any other such indebtedness for which there is a default in the payment of interest or principal, aggregates $1,000,000 or more, or (ii) an event of default occurs under any loan agreement, note, mortgage, indenture or instrument which shall represent a default in payment upon final maturity or otherwise result in the acceleration of such indebtedness prior to its expressed maturity and the principal amount of such indebtedness, together with the principal amount of any other such indebtedness with respect to which there has been a default in payment upon final maturity or the maturity of which has been so accelerated and has not been paid, aggregates $1,000,000 or more;

(h) a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Issuer or any of its Subsidiaries and such remains undischarged for a period (during which execution shall not be effectively stayed) of thirty (30) days, provided that the aggregate of all such judgments exceeds $1,000,000;

(i) the filing by the Issuer or any of its Subsidiaries (any such person, a “Debtor”) of a petition commencing a voluntary case under section 301 of title 11 of the United States Code, or the commencement by a Debtor of a case or proceeding under any other Bankruptcy Law seeking the adjustment, restructuring, or discharge of the debts of such Debtor, or the liquidation of such Debtor, including without limitation the making by a Debtor of an assignment for the benefit of creditors; or the taking of any corporate action by a Debtor in furtherance of or to facilitate, conditionally or otherwise, any of the foregoing;

(j) the filing against a Debtor of a petition commencing an involuntary case under section 303 of title 11 of the United States Code, with respect to which case (a) such Debtor consents or fails to timely object to the entry of, or fails to seek the stay and dismissal of, an order of relief, (b) an order for relief is entered and is pending and unstayed on the 60th day after the filing of the petition commencing such case, or if stayed, such stay is subsequently lifted so that such order for relief is given full force and effect, or (c) no order for relief is entered, but the court in which such petition was filed has not entered an order dismissing such petition by the 60th day after the filing thereof; or the commencement under any other Bankruptcy Law of a case or proceeding against a Debtor seeking the adjustment, restructuring, or discharge of the debts of such Debtor, or the liquidation of such Debtor, which case or proceeding is pending without having been dismissed on the 60th day after the commencement thereof;

(k) the entry by a court of competent jurisdiction of a judgment, decree or order appointing a receiver, liquidator, trustee, custodian or assignee of a Debtor or of the property of a Debtor, or directing the winding up or liquidation of the affairs or property of a Debtor, and (i) such Debtor consents or fails to timely object to the entry of,

or fails to seek the stay and dismissal of, such judgment, decree, or order, or (ii) such judgment, decree or order is in full force and effect and is not stayed on the 60th day after the entry thereof, or, if stayed, such stay is thereafter lifted so that such judgment, decree or order is given full force and effect;

(l) any member of the controlled group of which the Issuer is a member shall, directly or indirectly, (i) terminate any employee pension benefit plan subject to Title IV of ERISA and as a result of such termination the Issuer and its Subsidiaries, collectively, would incur any liability or (ii) make a complete or partial withdrawal (within the meaning of Section 4201 of ERISA) from any multiemployer plan if as a result of such withdrawal (within the meaning of Section 4201 of ERISA) the Issuer and its Subsidiaries, collectively, would incur any liability; and

(m) the Pledge Agreement shall be amended, modified or supplemented or shall for any reason cease to be, or be asserted in writing by any responsible officer of the Issuer or any of its Subsidiaries not to be, in full force and effect or enforceable in accordance with its terms or shall cease to give, directly or indirectly, the Collateral Agent or the Holders the benefits, liens, rights, powers and privileges purported to be created thereby, including, without limitation, a perfected security interest in the Pledged Stock (as defined in the Pledge Agreement) in accordance with the terms thereof;

The term “Bankruptcy Law” means title 11, U.S. Code or any similar Federal or state law for the relief of debtors.

A Default under clause (c) of this Section 7.1 shall be an Event of Default without any notice or passage of time, except that such a Default that results from a breach of Section 5.1, 5.2, 5.3, 5.12, 5.16, 5.19, 5.20, 5.21, 5.22, 5.23, 5.24, 5.25 or 5.26 shall not be an Event of Default until the Majority Holders notify the Issuer of the Default and the Issuer does not cure the Default within 30 days after receipt of the notice. A Default under clauses (e) or (f) of this Section 7.1 or clause (g) of this Section 7.1 (other than a Default resulting from the acceleration of any indebtedness described therein, which Default shall be an Event of Default without the notice specified in this paragraph) shall not be an Event of Default until the Majority Holders notify the Issuer of the Default. Each notice referred to in this paragraph must specify the Default, demand that it be remedied and state that the notice is a “Notice of Default.”

7.2 Acceleration of Notes: Remedies.

Subject to the following paragraph, if an Event of Default (other than an Event of Default specified in clause (i), (j) or (k) of Section 7.1) occurs and is continuing, the Majority Holders, by notice to the Issuer, may declare the unpaid principal of and any accrued interest on all the Notes to be due and payable, and immediately upon such declaration, the principal and interest shall be due and payable. If an Event of Default specified in clause (i), (j) or (k) of Section 7.1 occurs, such an amount shall ipso facto

become and be immediately due and payable without any declaration or other act on the part of any Holder.

The Majority Holders, by notice to the Issuer, may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration.

7.3 Other Remedies.

If an Event of Default occurs and is continuing, Holders of the Notes may pursue any available remedy to collect the payment of principal or interest on the Notes or to enforce the performance of any provision of the Notes, this Agreement or any other Documents.

A delay or omission by any Holder of any Notes in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

7.4 Waiver of Past Defaults.

The Majority Holders, by notice to the Issuer, may waive an existing Default or Event of Default and its consequences except a continuing Default or Event of Default in the payment of the principal of or interest on any Notes.

7.5 Rights of Holders to Receive Payment.

Notwithstanding any other provision of this Agreement, the right of any Holder of a Note to receive payment of principal and interest on the Note, on or after the respective due dates expressed in the Note, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of the Holder.

7.6 Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this Agreement, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant.

SECTION 8. AMENDMENTS AND WAIVERS.

8.1 With Consent of Holders.

The Issuer, when authorized by a resolution of the board of directors of the Issuer, with the written consent of the Majority Holders, may amend, modify or restate this Agreement or the Notes, provided that each Holder shall have received prior notice of such proposed amendment. The Majority Holders may waive compliance by the Issuer with any provision of this Agreement or the Notes, provided that each Holder shall have received prior notice of such proposed amendment. Without the consent of each Holder affected, however, no amendment or waiver may (with respect to any Notes held by a nonconsenting Holder of Notes):

(a) reduce the principal amount of Notes whose Holders must consent to an amendment or waiver of any provision of this Agreement or the Notes;

(b) reduce the principal of, or change the fixed maturity of, any Note, alter the provisions with respect to the redemption of Notes, or reduce the purchase price payable in connection with repurchases of the Notes pursuant to Section 5.11;

(d) waive a Default or Event of Default in the payment of principal of, or interest on. the Notes or that resulted from a failure to comply with Section 5.11 (except a rescission of acceleration of the Notes by the Majority Holders and a waiver of the payment default that resulted from such acceleration);

(e) make the principal of, or the interest on, any Note payable in any manner other than that stated in this Agreement and the Notes;

(f) make any change in the provisions of this Agreement relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, or interest on. the Notes;

(g) waive a redemption payment with respect to any Note; or

(h) make any change in the foregoing amendment and waiver provisions.

It shall not be necessary for the consent of the Holders under this Section 8 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment or waiver under this Section 8 becomes effective, the Issuer shall mail to the Holders affected thereby a notice briefly describing the amendment or waiver. Any failure of the Issuer to mail such notice, or any defect

therein, shall not, however, in any way impair or affect the validity of any such amendment or waiver.

In connection with any amendment under this Section 8, the Issuer may offer, but shall not be obligated to offer, to any Holder who consents to such amendment or waiver, consideration for such Holder’s consent.

8.2 Revocation and Effect of Consents.

Until an amendment or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder or subsequent Holder may revoke the consent as to its or his Note or portion of its or his Note by notice to the Issuer received before the date on which the Majority Holders have consented (and not theretofore revoked such consent) to the amendment or waiver.

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment or waiver, which record date shall be at least thirty (30) days prior to the first solicitation of such consent. If a record date is fixed, then notwithstanding the last sentence of the immediately preceding paragraph, those persons who were Holders at such record date (or their duly designated proxies), and only those persons, shall be entitled to revoke any consent previously given, regardless of whether such persons continue to be Holders after such record date. No such consent shall be valid or effective for more than ninety (90) days after such record date.

After an amendment or waiver becomes effective, it shall bind every Holder, unless it makes a change described in any of clauses (a) through (h) of Section 8.1, in which case, the amendment or waiver shall bind only each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note; provided that any such waiver shall not impair or affect the right of any Holder to receive payment of principal of, and interest on, a Note, on or after the respective due dates expressed in such Note, or to bring suit for the enforcement of any such payment on or after such respective dates without the consent of such Holder.

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver, consent or amendment, Notes owned by the Issuer or any Affiliate of the Issuer (other than the Purchasers) shall be considered as though not outstanding.

8.3 Notation on or Exchange of Notes.

If an amendment or waiver changes the terms of a Note, the Issuer may require the Holder of the Note to deliver it to the Issuer so that it may place an appropriate notation on the Note about the changed terms and return it to the Holder.

8.4 Payment of Expenses.

The Issuer agrees to pay or reimburse each Purchaser’s out-of-pocket expenses (including the reasonable fees and expenses of counsel but excluding Taxes) relating to any amendment or modification of, or any waiver or consent under, this Agreement, the Notes and any other Documents.

8.5 Waiver of Defaults Occurring Prior to the Closing; Release of Claims.

For purposes of clarification, notwithstanding anything to the contrary, each Purchaser, by executing this Agreement, waives the Issuer’s compliance with, and such Purchaser’s rights and remedies under, the provisions of the Original Securities Purchase Agreement with respect to any and all Defaults or Events of Default that may, or may be deemed to, exist prior to the Closing. This Section 8.5 shall not, in any way, be deemed to be a waiver of any interest payment due on any Note from and after the Closing, nor is it to be construed as a waiver of the Issuer’s obligation to repay the principal of the Notes on the Maturity Date in accordance with their terms. In consideration of the Purchasers’ agreement in this Section 8.5, the Issuer hereby irrevocably releases and forever discharges each Purchaser and its Affiliates, successors, assigns, directors, officers, employees, agents, consultants, attorneys, auditors and accountants (each, a “Released Person”) of and from all damages, losses, claims, demands, liabilities, obligations, actions and causes of action whatsoever that the Issuer may have, arising as of or prior to the Closing, against such Purchaser or any Released Person on account of or in any way touching, concerning, arising out of or founded upon the Original Securities Purchase Agreement, the Original Notes, the Issuer Pledge Agreement and the Collateral Agency Agreement.

SECTION 9. DEFINITIONS.

9.1 Definitions.

As used in this Agreement, the following terms shall have the following meanings:

“Account Manager” means each Purchaser, if any, duly authorized to act as attorney in-fact on behalf of any Person in purchasing or holding, in the name of and using funds provided by such Person, the Notes hereunder.

“Affiliate” means, with respect to any referenced Person, a Person (i) that directly or indirectly through one or more intermediaries controls, or is controlled by, or

is under common control with, such referenced Person, (ii) that directly or indirectly through one or more intermediaries beneficially owns or holds 10% or more of the combined voting power of the total Voting Securities of such referenced Person or (iii) of which 10% or more of the combined voting power of the total Voting Securities directly or indirectly through one or more intermediaries is beneficially owned or held by such referenced Person or a Subsidiary of such referenced Person. For purposes of this definition, “control” when used with respect to any person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of Voting Securities, by agreement or otherwise; and the terms “affiliated,” “controlling” and “controlled” have meanings correlative to the foregoing.

“Agreement” has the meaning given to such term in the preamble.

“Amreit” means American Residential Investment Trust, Inc., a Maryland corporation, and any successor thereto.

“Amreit Stock” means all of the shares of the common stock, par value $0.01 per share, of Amreit owned by the Issuer and which have been pledged by the Issuer to secure the Issuer’s obligations under the Notes.

“Amendment to Collateral Agency Agreement” means that Amendment No. 1 to the Collateral Agency Agreement, dated as of the date hereof, by and between the Issuer, the Purchasers (as beneficiaries) and the Collateral Agent.

“Asset Sale” means (i) the sale, lease, conveyance or other disposition of assets (including by way of a sale-and-leaseback) of the Issuer or any of its Subsidiaries or (ii) the issuance or sale of Equity Interests of any of the Subsidiaries of the Issuer to any Person other than the Issuer, in the case of either clause (i) or (ii) above, whether in a single transaction or a series of related transactions; provided, however, that the sale, conveyance or other disposition of the Amreit Stock in accordance with the provisions of the Stockholders Agreement shall not be deemed to be an “Asset Sale” for purposes of this Agreement.

“Bankruptcy Law” has the meaning given to such term in Section 7.1.

“Business Day” means any day which is not a Legal Holiday.

“Capital Expenditures” means, without duplication, for any Person for any period, the aggregate of all expenditures including deposits (whether paid in cash or property or accrued as liabilities and including the aggregate amount of all principal payments due for the entire term of all Capital Leases that are required to be capitalized on the balance sheet) made by such Person that, in conformity with GAAP, are required to be included in the property, plant, equipment, or similar fixed asset account.

“Capital Lease” means any lease of any property (whether real, personal or mixed) that, in conformity with GAAP, should be accounted for as a capital lease.

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of corporate stock, including without limitation all common stock and preferred stock.

“Capitalized Lease Obligation” means, with respect to any Person for any period, any obligation of such Person to pay rent or other amounts under a Capital Lease; the amount of such obligation shall be the capitalized amount thereof determined in accordance with GAAP.

“Charter Documents” of any Person means the articles of organization, articles of incorporation, certificate of incorporation, bylaws, declaration of trust, trust agreement, certificate of formation, limited liability company agreement, certificate of limited partnership, limited partnership agreement and any other organizational document, each as amended or restated (or both) to date, of such Person.

“Closing” has the meaning given to such term in Section 1.2(a).

“Closing Date” has the meaning given to such term in Section 1.2(a).

“Collateral Agency Agreement” means the Collateral Agency Agreement dated as of February 11, 1997, by and among the Issuer, Holdings, the Purchasers, as beneficiaries, and Bankers Trust Company, a New York banking corporation, as collateral agent.

“Collateral Agent” means the collateral agent under the Collateral Agency Agreement.

“Common Stock” means the Issuer’s common stock, par value $.0001 per share, Class A common stock, par value $.0001 per share, and Class B common stock (if any), par value $.0001 per share.

“consolidated” when used with reference to any accounting term, means the amount described by such accounting term, determined on a consolidated basis in accordance with GAAP, after elimination of intercompany items.

“Contribution Agreement” means the Contribution Agreement, made and entered into as of September 24, 2003, by and among TCW, holders of the Preferred Stock, the Issuer and Holdings.

“Default” means any event which is, or after notice or passage of time would be, an Event of Default.

“Disqualified Stock” means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or

upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof, in whole or in part, on or prior to the Maturity Date.

“Documents” means the Transaction Documents, the Collateral Agency Agreement, the Stockholders Agreement and the Registration Rights Agreement, collectively, or each of such documents singularly, and any documents or instruments contemplated by or executed in connection with any of them or any of the transactions contemplated hereby or thereby.

“Employee Plan” shall mean (a) each deferred compensation and each incentive compensation, stock purchase, stock option and other equity compensation plan, program, agreement or arrangement; (b) each severance or termination pay, medical, surgical, hospitalization, life insurance and other “welfare” plan, fund or program (within the meaning of Section 3(1) of ERISA); (c) each profit-sharing, stock bonus or other “pension” plan, fund or program (within the meaning of Section 3(2) of ERISA); and (d) each employment, termination or severance agreement; and each other employee benefit plan, fund, program, agreement or arrangement, in each case, that is sponsored, maintained or contributed to or required to be contributed to by the Issuer or by any ERISA Affiliate, or to which the Issuer or an ERISA Affiliate is party, whether written or oral, for the benefit of any director, employee or former employee of the Issuer or any of its Subsidiaries.

“Environmental Claim” means any claim, action, cause of action, investigation of which the Issuer, including any of its employees, are aware, or notice (written or oral) by any Person alleging potential liability (including, without limitation, potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, or penalties) arising out of, based on or resulting from (a) the presence, or release into the environment, of any Material of Environmental Concern at any location, regardless of whether owned or operated by the Issuer, or (b) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law.

“Environmental Laws” means all Federal, state, local and foreign laws and regulations relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of Materials of Environmental Concern, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern.

“Equity Interest” means (a) with respect to a corporation, any and all Capital Stock or warrants, options or other rights to acquire Capital Stock (but excluding any debt security which is convertible into, or exchangeable or exercisable for, Capital Stock) and (b) with respect to a partnership, limited liability company or similar Person,

any and all units, interests, rights to purchase, warrants, options or other equivalents of, or other ownership interests in any such Person.

“ERISA” means The Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute or law thereto.

“ERISA Affiliate” shall mean any trade or business, whether or not incorporated, that together with the Issuer would be deemed a “single employer” within the meaning of Section 4001(b) of ERISA.

“Event of Default” has the meaning given to such term in Section 7.1.

“GAAP” means those generally accepted accounting principles and practices which are recognized as such on the Closing Date by the American Institute of Certified Public Accountants acting through its Accounting Principles Board or by the Financial Accounting Standards Board or through other appropriate boards or committees thereof and which are consistently applied for all periods after the date hereof so as to properly reflect the financial conditions, and the results of operations, shareholders’ equity and cash flows, of the Issuer and its consolidated subsidiaries (if any). In the event that any Accounting Change (as defined below) shall occur and such change would result in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then the Issuer shall enter into negotiations in order to amend such provisions of this Agreement so as to equitably reflect such Accounting Change with the desired result that after such amendment has been executed and delivered the criteria for the Issuer’s compliance with this Agreement shall be as nearly as practicable the same after such Accounting Change as they were prior to such Accounting Change having been made. Until such time as such an amendment shall have been executed and delivered by the Issuer and the Majority Holders, all financial covenants, standards and terms in this Agreement shall continue to be calculated and construed as if such Accounting Change had not occurred. “Accounting Change” means any change in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or, if applicable, the SEC (or successors thereto or agencies with similar functions). That certain terms or computations are explicitly modified by the phrase “in accordance with GAAP” shall in no way be construed to limit the foregoing.

“Government Body” means any Federal, state, local or foreign governmental authority or regulatory body, any subdivision, agency, commission or authority thereof or any quasi-governmental or private body exercising any governmental regulatory authority thereunder and any Person directly or indirectly owned by and subject to the control of any of the foregoing, or any court, arbitrator or other judicial or quasi-judicial tribunal.

“Hedging Obligations” means, with respect to any Person, the obligations of such Person under (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, in each case, designed to protect such Person against

fluctuations in interest rates and (ii) other agreements or arrangements designed to protect such Person against fluctuations in interest rates.

“Holder” or “Holders” means each Purchaser (so long as it holds any Note) and any other holder of any of the Notes.

“Holdings” has the meaning given to such term in the preamble hereof.

“Indebtedness” means, with respect to any Person, the aggregate amount of, without duplication, the following:

(a) all obligations for borrowed money;

(b) all obligations evidenced by bonds, debentures, notes or other similar instruments;

(c) all obligations to pay the deferred purchase price of property or services (except Trade Payables, accrued commissions and other similar accrued current liabilities in respect of such obligations, in any case, not overdue, arising in the ordinary course of business);

(d) all Capitalized Lease Obligations;

(e) all obligations or liabilities of others secured by a lien on any asset owned by such Person or Persons regardless of whether such obligation or liability is assumed;

(f) all obligations of such Person or Persons, contingent or otherwise, in respect of any letters of credit or bankers’ acceptances;

(g) all Hedging Obligations; and

(h) all guaranties.

“Independent Auditors” means the independent certified public accountants of recognized national standing selected by the Issuer.

“Inspectors” has the meaning given to such term in Section 5.21.

“Investment” means, with respect to any Person, any direct, indirect or beneficial investment by such Person, whether by means of share purchase, loan, advance, extension of credit (other than accounts receivable and trade credits arising in the ordinary course of business), capital contribution or otherwise, in or to any other Person, the guaranty by such Person of any Indebtedness of any other Person or the subordination of any claim against any other Person to other Indebtedness of such other Person.

“Issuer” has the meaning given to such term in the preamble hereof.

“Issuer Pledge Agreement” means the Pledge Agreement, dated as of February 11, 1997, between the Issuer, as pledgor, and the Collateral Agent, as pledgee, as may be amended, modified and restated from time to time.

“Legal Holiday” means a Saturday, Sunday or day on which banks and trust companies in the principal place of business of the Issuer or in New York are not required to be open.

“Lien” means any mortgage, pledge, lien, encumbrance, charge or adverse claim affecting title or resulting in a charge against real or personal property, or security interest of any kind (including, without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell and any filing of any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).

“Majority Holders” means, at any time, the Holder or Holders of at least a majority in aggregate principal amount of the then outstanding Notes.

“Material Adverse Effect” means (a) a material adverse effect upon the business, operations, properties, assets, condition (financial or otherwise) or prospects of the Issuer or (b) a material adverse effect on the ability of the Issuer to perform its obligations under this Agreement or any of the other Transaction Documents or of any Purchaser or Holder to enforce or collect any of the obligations hereunder or thereunder. In determining whether any individual event could reasonably be expected to result in a Material Adverse Effect, notwithstanding that such event does not of itself have such effect, a Material Adverse Effect shall be deemed to have occurred if the cumulative effect of such event and all other then existing events could reasonably be expected to result in a Material Adverse Effect.

“Materials of Environmental Concern” means chemicals, pollutants, contaminants, industrial, toxic or hazardous wastes, substances or constituents, petroleum and petroleum products (or any by-product or constituent thereof), asbestos or asbestos-containing materials, or PCBs.

“Maturity Date” means December 31, 2004.

“Net Proceeds” means, with respect to any sale or other disposition of any assets, (a) cash received by the Issuer or any of its Subsidiaries from such sale or other disposition and (b) promissory notes received by the Issuer or any of its Subsidiaries from such sale or other disposition upon the liquidation or conversion of such notes into cash, in each case after (i) provision for all Taxes measured by or resulting from such sale or other disposition, (ii) payment of all brokerage commissions and other fees and expenses related to such sale or other disposition, and (iii) amounts applied to repayment of Indebtedness secured by a Lien on the asset sold or disposed.

“Note Register” has the meaning given to such term in Section 1.3.

“Notes” has the meaning given to such term in Section 1.1.

“Notes Amendments” means, collectively, (a) Amendment to 12% Senior Secured Notes, dated March , 2002, executed by the Company and Holdings, and (b) Amendment to 12% Senior Secured Notes, dated February 10, 2003, executed by the Company and Holdings.

“Notice of Redemption” has the meaning given to such term in Section 6.3.

“Obligations” means, with reference to any Indebtedness, any principal of, premium, interest, penalties, fees and other liabilities payable from time to time and obligations performable under the documentation governing such Indebtedness.

“Officer” of a Person mean its Chairman of the Board, Chief Executive Officer, President, Treasurer, any Vice President, Secretary or any Assistant Secretary.

“Officers’ Certificate” means a certificate signed by any two Officers, one of whom must be the Chairman of the Board, the Chief Executive Officer, the President, the Treasurer or a Vice President of the Issuer.

“Permitted Liens” means with respect to any Person: (a) Liens incurred or deposits made by such Person under worker’s compensation laws, unemployment insurance laws or similar legislation, or Liens incurred or good faith deposits made in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or Liens incurred or deposits made to secure public or statutory obligations of such Person or deposits of cash or United States Government bonds made to secure the performance of statutory obligations, surety, stay, customs and appeal bonds to which such Person is a party, or deposits made as security for contested taxes or import duties or for the payment of rent, in each case in the ordinary course of business; (b) Liens imposed by law, such as carriers’, warehousemen’s, materialmen’s and mechanics’ Liens or Liens arising out of judgments or awards against such Person with respect to which such Person shall then be prosecuting appeal or other proceedings for review and which do not constitute an Event of Default under Section 7.1(g); provided that, in each case, such appeal or other proceeding is being made in good faith and with respect to which reserves or other appropriate provisions are being made in accordance with GAAP; (c) Liens securing the payment of Taxes which are not yet subject to penalties for non-payment or which are being contested in good faith and by appropriate proceedings, with respect to which reserves or other appropriate provisions are being maintained in accordance with GAAP; (d) Liens in favor of issuers of surety bonds or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business; (e) minor survey exceptions, encumbrances, easements or reservations of, or rights of others for, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as

to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not incurred in connection with Indebtedness or other extensions of credit and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person; (f) purchase money Liens upon or in any real or personal property (including fixture and other equipment) acquired or held by the Issuer or any of its Subsidiaries in the ordinary course of business to secure the purchase price of such property or to secure Indebtedness permitted hereunder and incurred solely for the purpose of financing the acquisition of such property, or Liens existing on such property at the time of its acquisition (other than any such Lien created in contemplation of such acquisition), provided that (i) no such Lien shall extend to or cover any property other than the property being acquired and (ii) any such Indebtedness would be permitted to be incurred under this Agreement; and (g) any Liens created pursuant to the Pledge Agreement.

“Person” means an individual, partnership, corporation, limited liability company, trust or unincorporated organization or a government or agency or political subdivision thereof.

“Plan of Liquidation” means, with respect to any Person, a plan that provides for, contemplates or the effectuation of which is preceded or accompanied by (regardless of whether substantially contemporaneously, in phases or otherwise) (a) the sale, lease, conveyance or other disposition of all or substantially all of the assets of such Person otherwise than as an entirety or substantially as an entirety and (b) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition and all or substantially all of the remaining assets of such Person to holders of Capital Stock of such Person.

“Pledge Agreement” means the Pledge Agreement, dated as of February 11, 1997, between Holdings, as pledgor, and the Collateral Agent, as pledgee, as may be amended, modified and restated from time to time.

“Preferred Stock” means the Issuer’s Series A Non-Voting Cumulative Preferred Stock, par value $.0001 per share, and Series B Non-Voting Cumulative Preferred Stock, par value $.0001 per share.

“Property” or “property” means any assets or property of any kind or nature whatsoever, real, personal or mixed (including fixtures), whether tangible or intangible, provided that the terms “Property” or “property,” when used with respect to any Person, shall not include securities issued by such.

“Purchasers” means the purchasers on the signature pages hereto.

“Redemption Date” means, when used with respect to any Note to be redeemed, the date fixed for such redemption pursuant to this Agreement and the Notes.

“Redemption Price” means, when used with respect to any Note to be redeemed, the price fixed for such redemption pursuant to this Agreement and the Notes.

“Registration Rights Agreement” means the Registration Rights Agreement, entered into as of February 11, 1997, as amended, by and among Amreit and the Persons signatories thereto.

“Restructuring” has the meaning given to such term in the preamble.

“Restructuring Merger Agreement” means the Agreement and Plan of Merger, dated as of September 25, 2003, by and among Holdings, the Issuer, TCW and the other Persons signatories thereto, as amended, modified or restated from time to time.

“Rule 144” means Rule 144 as promulgated by the SEC under the Securities Act, as amended from time to time, and any successor rule or regulation thereto.

“Rule 144A” means Rule 144A as promulgated by the SEC under the Securities Act, as amended from time to time, and any successor rule or regulation thereto.

“SEC” means the Securities and Exchange Commission and any successor thereto.

“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute or law thereto.

“Securities Purchase Amendments” means, collectively, (a) Amendment No. 1 to Securities Purchase Agreement, dated as of December 20, 2001, by and among Amreit, Holdings, the Company and the TCW/Crescent Mezzanine Partners, L.P., TCW/Crescent Mezzanine Trust, TCW/Crescent Mezzanine Investment Partners, L.P., Crescent/Mach I Partners, L.P. and TCW Shared Opportunity Fund II, L.P. (collectively, the “TCW Noteholders”), (b) Amendment No. 2 to Securities Purchase Agreement, dated as of February 10, 2002, by and among Amreit, Holdings, the Company and the TCW Noteholders, and (c) Amendment No. 3 to Securities Purchase Agreement, dated as of February 10, 2003, by and among Amreit, Holdings, the Company and the TCW Noteholders.

“Stockholders Agreement” means the Amended and Restated Stockholders Agreement, Voting Agreement and Irrevocable Proxy, entered into on September 24, 2003, between the Issuer and the stockholders of the Issuer listed on Exhibit A thereto, as amended, modified or restated from time to time.

“Subsidiary” means, with respect to any Person, (a) a corporation a majority of whose Capital Stock with voting power, under ordinary circumstances, to elect directors is, at the date of determination, directly or indirectly, owned by such

Person, by one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person, (b) a partnership in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but, in the case of a limited partner, only if such Person or its Subsidiary is entitled to receive more than 50% of the assets of such partnership upon its dissolution or (c) any limited liability company or any other Person (other than a corporation or a partnership) in which such Person, a Subsidiary of such Person or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.

“Tax Return” means any return, declaration, statement, report, schedule, information return or other document relating to Taxes, including any amendment thereof.

“Taxes” means all Federal, state, local and foreign taxes, and other assessments of a similar nature (whether imposed directly or through withholding), including any interest, additions to tax, or penalties applicable thereto.

“TCW” means, collectively, TCW/Crescent Mezzanine Partners, L.P., a Delaware limited partnership, TCW/Crescent Mezzanine Investment Partners, L.P., a Delaware limited partnership, TCW/Crescent Mezzanine Trust, a trust organized under the laws of Delaware, Crescent/Mach I Partners, L.P., a Delaware limited partnership, TCW Shared Opportunity Fund II, L.P., a Delaware limited partnership, and their respective Affiliates, or any one of the foregoing.

“Trade Payables” means, with respect to any Person, accounts payable and other similar accrued current liabilities in respect of obligations or indebtedness to trade creditors created, assumed or guaranteed by such Person or any of its Subsidiaries in the ordinary course of business in connection with the obtaining of property or services.

“Transactions” has the meaning given to such term in the preamble.

“Transaction Documents” means this Agreement, the Notes, the Assumption Agreement and Amendment to Pledge Agreement, the Pledge Agreement and the Amendment to the Collateral Agency Agreement, collectively, or each of such documents singularly.

“U.S. Legal Tender” means such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.

“Voting Securities” means any class of Equity Interests of a Person pursuant to which the holders thereof have, at the time of determination, the general voting power under ordinary circumstances to vote for the election of directors, managers, trustees or general partners of such Person (irrespective of regardless of

whether at the time any other class or classes will have or might have voting power by reason of the happening of any contingency).

9.2 Rules of Construction.

Unless the context otherwise requires:

(a) a term has the meaning assigned to it;

(b) “or” is not exclusive;

(d) provisions apply to successive events and transactions;

(e) “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision; and

(f) any reference to a “Section,” “Annex” or “Schedule” refers to a Section of, an Annex to, or a Schedule to this Agreement, respectively.

SECTION 10. MISCELLANEOUS.

10.1 Notices.

All notices and other communications provided for or permitted hereunder shall be made by hand-delivery, first-class mail, telex, fax, or overnight air courier guaranteeing next day delivery:

(a) if to any Purchaser or Holder, at the address or fax number set forth on the signature pages hereto (or, in the case of a Holder other than a Purchaser, at the address or fax number provided in writing by such Holder to the Issuer), with a copy (which shall not constitute notice) to Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400, Los Angeles, California 90071, Fax No. (213) 687-5600, Attention: Jeffrey H. Cohen; and

(b) if to the Issuer, at 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, California 90025, Fax No. (310) 235-5967, Attention: Joe Keenan, with a copy (which shall not constitute notice) to Martin Anderson, Goodsill, Anderson, Quinn & Stifel, 1099 Alakea Street, Suite 1800, Honolulu, Hawaii 96813, Fax No. (808) 547-5880, and a copy (which shall not constitute notice) to Bingham McCutchen LLP, 1900 University Avenue, East Palo Alto, California 94303, Attention: Alan Kalin, Esq.

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after

being deposited in the mail, postage prepaid, if mailed; when answered back if telexed; when receipt acknowledged, if faxed; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. The parties may change the addresses to which notices are to be given by giving five days’ prior notice of such change in accordance herewith.

10.2 Successors and Assigns.

This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties.

10.3 Counterparts.

This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

10.4 Headings.

The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

10.5 Governing Law: Submission to Jurisdiction.

THIS AGREEMENT, THE NOTES AND ALL ISSUES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW EXCEPT SECTIONS 5-1401 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND RULE 327(b) OF THE NEW YORK CIVIL PRACTICE LAWS AND RULES). TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THE ISSUER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE NOTES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE ISSUER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEEDING AGAINST THE ISSUER IN ANY OTHER JURISDICTION.

10.6 Entire Agreement.

This Agreement, together with the Notes and the other Documents (and any agreement between the Issuer and any Holder relating to transfers), is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. This Agreement, together with the Notes and the other Documents, supersedes all prior agreements and understandings between the parties with respect to such subject matter.

10.7 Severability.

In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected, it being intended that each Purchaser’s rights and privileges shall be enforceable to the fullest extent permitted by law.

10.8 Further Assurances.

The Issuer shall, and shall cause each of its Subsidiaries (if any) to, at its cost and expense, upon request of any Purchaser or Holder, duly execute and deliver, or cause to be duly executed and delivered, to such Purchaser or Holder such further instruments and do or cause to be done such further acts as may be necessary or proper in the reasonable opinion of such Purchaser or Holder to carry out more effectually the provisions and purposes of this Agreement and the other Documents.

10.9 Disclosure of Financial Information.

Each Holder is hereby authorized to deliver a copy of any financial statement or any other information relating to the business, operations or financial condition of the Issuer and each of its Subsidiaries (if any) which may be furnished to it hereunder or otherwise, to any other Holder, any court, Governmental Body claiming to have jurisdiction over such Holder, to the National Association of Insurance Commissioners or similar organizations, as may be required or appropriate in response to any summons or subpoena in connection with any litigation, to the extent necessary to comply with any law, order, regulation or ruling applicable to such Holder, to any rating agency, in order to protect its investment hereunder, or to any Person which shall, or shall have any right or obligation to, succeed to all or any part of such Holder’s interest in any

of the Notes and this Agreement or to any actual or prospective purchaser or assignee thereof.

10.10 Fair Construction.

This Agreement shall be interpreted without regard to which party hereto initiated the drafting process or proposed or drafted particular language and shall not be construed for or against any party hereto by reason of such initiation, proposal or drafting.

[Signature pages follow]

IN WITNESS WHEREOF, this Agreement has been duly executed by the parties set forth below as of the date first written above.

	ISSUER:

	HOME ASSET MANAGEMENT CORP.


	By:	/s/ Martin Anderson
		Name: Martin Anderson
		Title: Chairman

	PURCHASER:

	TCW/CRESCENT MEZZANINE PARTNERS, L.P.
	TCW/CRESCENT MEZZANINE TRUST
	TCW/CRESCENT MEZZANINE INVESTMENT PARTNERS, L.P.

	By:	TCW/CRESCENT MEZZANINE, L.L.C.,
		its investment manager


	By:	/s/ John C. Rocchio
		Name: John C. Rocchio
		Title: Managing Director

Address for Notices:

TCW/Crescent Mezzanine, LLC

11100 Santa Monica Boulevard, Suite 2000

Los Angeles, California 90025

Phone: (310) 235-5982

Fax: (310) 235-5967

Attention: Tyrone Chang

Principal Amount of Notes to be issued:

$12,713,155.49 to TCW/Crescent Mezzanine Partners, L.P.

$ 3,869,683.91 to TCW/Crescent Mezzanine Trust

$ 347,396.12 to TCW/Crescent Mezzanine Investment Partners, L.P.

	PURCHASER:

	CRESCENT/MACH I PARTNERS, L.P.

	By:	TCW ASSET MANAGEMENT COMPANY, its investment advisor


	By:	/s/ John C. Rocchio
		Name: John C. Rocchio
		Title: Managing Director


	By:	/s/ James M. Hassett
		Name: James M. Hassett
		Title: Managing Director

Address for Notices:

Trust Company of the West

11100 Santa Monica Boulevard, Suite 2000

Los Angeles, California 90025

Phone: (310) 235-5982

Fax: (310) 235-5967

Attention: Tyrone Chang

Principal Amount of Notes to be issued:

$1,923,890.40 to Crescent/Mach I Partners, L.P.

	PURCHASER:

	TCW SHARED OPPORTUNITY FUND II, L.P.

	By:	TCW INVESTMENT MANAGEMENT COMPANY, its investment manager

	By:	/s/ John C. Rocchio
		Name: John C. Rocchio
		Title: Managing Director


	By:	/s/ James M. Hassett
		Name: James M. Hassett
		Title: Managing Director

Address for Notices:

Trust Company of the West

11100 Santa Monica Boulevard, Suite 2000

Los Angeles, California 90025

Phone: (310) 235-5982

Fax: (310) 235-5967

Attention: Tyrone Chang

Principal Amount of Notes to be issued:

$384,778.08 to TCW Shared Opportunity Fund II, L.P.

ANNEX A

Form of the Amended and Restated Note

Schedule 5.23

Collateral Agent

Deutsche Bank Trust Company Americas

Corporate Trust and Agency Services

60 Wall Street – 27th Floor

Mail Stop – NYC60 – 2710

New York, New York 10005

Attention: Dorothy Robinson

Telephone: (212) 250-7345

Fax: (212) 797-8615

EX-7 7 a03-3863_1ex7.htm EX-7

EXHIBIT 7

CONTRIBUTION AGREEMENT

THIS CONTRIBUTION AGREEMENT (this “Agreement”) is made and entered into as of September 24, 2003 (the “Effective Date”), by and among Crescent/Mach I Partners, L.P., TCW/Crescent Mezzanine Investment Partners, L.P., TCW/Crescent Mezzanine Partners, L.P., TCW/Crescent Mezzanine Trust and TCW Shared Opportunity Fund II, L.P. (collectively, the “TCW Entities”), the entities and persons listed in Schedule 1 hereto (the “Preferred Stock LLC Members” and, together with the TCW Entities, the “Assignors”), Home Asset Management Corp., a Delaware corporation (the “Assignee”), and MDC Reit Holdings, LLC, a Delaware limited liability company (the “Company”).

R E C I T A L S

WHEREAS, the Assignors hold certain membership interests (the “Membership Interests”) in the Company;

WHEREAS, the Assignors desire to contribute to the Assignee (the “Contribution”) all of their right, title and interest in and to the Membership Interests under the Company’s amended and restated limited liability company agreement, entered into as of February 11, 1997 (the “LLC Agreement”);

WHEREAS, upon consummation of the Contribution in accordance with the terms and subject to the conditions herein, the Assignee will own 100% of the Membership Interests in the Company;

WHEREAS, in consideration for the Contribution the Assignors have agreed to make hereunder, the Assignee desires to amend the rights and preferences of Series A Non-Voting Cumulative Preferred Stock, $.0001 par value (“Series A Preferred Stock”), and Series B Non-Voting Cumulative Preferred Stock, $.0001 par value (“Series B Preferred Stock”), of the Assignee (collectively, the “Assignee Preferred Stock”), and desires to issue shares of a newly authorized Class A common stock, par value $.0001, of the Assignee (“Assignee Class A Common Stock” and, together with the Assignee Preferred Stock, the “Assignee Capital Stock”), in each case upon the terms and subject to the conditions set forth in this Agreement;

WHEREAS, the Contribution is one of a series of transactions pursuant to which the members of the Company and stockholders of the Assignee desire to restructure the Company and the Assignee, and, following the consummation of the Contribution transaction pursuant to the terms herein, the Company will be merged with and into the Assignee, with the Assignee as the surviving entity (the “Merger” and, together with the Contribution, the “Restructuring”);

WHEREAS, as part of the Merger, 100% of the Membership Interests of the Company and certain shares of the common stock (and options and warrants to purchase common stock) of the Assignee will, in each case, be cancelled, and certain employee benefit plans of the Assignee will be terminated;

WHEREAS, in connection with the Restructuring, the Assignee will also terminate an escrow agreement and a pledge agreement to which it is a party, and amend and restate its existing stockholders agreement, voting agreement and irrevocable proxy;

WHEREAS, the Assignee and the TCW Entities are also parties to that certain Securities Purchase Agreement, dated as of February 11, 1997, by and among the Assignee, the TCW Entities, the Company and American Residential Investment Trust, Inc., a Maryland corporation (the “Original Securities Purchase Agreement”), and in connection with the Restructuring, the Assignee and the TCW Entities desire to amend and restate the Original Securities Purchase Agreement (as amended) and to exchange the 12% Senior Secured Notes issued thereunder for 8% Senior Secured Notes (the “Related Notes Transaction”); and

WHEREAS, the Assignee and the TCW Entities expects to consummate the Related Notes Transaction upon the completion of the Restructuring.

A G R E E M E N T

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

1. Contribution. Upon the terms and subject to the conditions set forth herein, at the Closing:

1.1 Each TCW Entity shall contribute to the Assignee the Membership Interests set forth opposite its name on Schedule 2-A hereto, and the Assignee shall deliver to each TCW Entity the number of shares of Assignee Class A Common Stock set forth opposite the name of such TCW Entity on Schedule 2-B hereto.

1.2 Each Preferred Stock LLC Member shall contribute to the Assignee the Membership Interests set forth opposite its name on Schedule 3 hereto, and the Assignee shall file with the Delaware Secretary of State a seconded amended and restated certificate of incorporation of the Assignee (the “Second Amended and Restated Charter”) in the form attached as Annex A hereto.

2. Closing. The consummation of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400, Los Angeles, California 90071, at 9:00 a.m (Los Angeles time), on the first business day following the satisfaction and/or waiver of all of the conditions set forth in Section 7 of this Agreement or such other time and place as the parties hereto shall collectively agree (the “Closing Date”). At the Closing:

2.1 the Company shall deliver to the Assignee an amended Schedule 1 to the LLC Agreement, which sets forth the Assignee as the sole member of the Company and holding 100% of the Sharing Ratio (as defined in the LLC Agreement) in the Company;

2.2 if the Assignor is a natural person, such Assignor shall deliver (if applicable) to the Assignee the consent of such Assignor’s spouse in the form attached as Annex B hereto;

2.3 the Assignee shall deliver to each TCW Entity a certificate or certificates, registered in the name of such TCW Entity, representing the number of shares of Assignee Class A Common Stock set forth opposite such TCW Entity’s name on Schedule 2-B hereto;

2.4 each party hereto shall have delivered a duly executed Amended and Restated Stockholders Agreement, Voting Agreement and Irrevocable Proxy, in the form attached as Annex C hereto (the “Stockholders Agreement”);

2.5 the board of directors of Assignee shall have approved and adopted resolutions giving effect to Section 3.2 of the Stockholders Agreement;

2.6 the Assignee shall have delivered the resignation of Bruce Mosbacher, effective as of the Closing Date, as a member of its board of directors and as an officer of the Assignee; and

2.7 each party hereto shall deliver all other documents, instruments and writings required to be delivered by such party hereto at or prior to the Closing pursuant to Section 7.

3. Representations and Warranties of the Assignors. Each Assignor hereby represents and warrants to the Assignee, only as to itself (or himself) and the Membership Interests set forth opposite its or his name on Schedule 2-A or Schedule 3 hereto, as follows:

3.1 Title to Membership Interest. The assignment and contribution of the Membership Interests to the Assignee pursuant to this Agreement will vest in the Assignee legal and valid title to such Membership Interests, free and clear of all liens, security interests, adverse claims or other encumbrances of any character whatsoever (“Encumbrances”) other than Encumbrances under the LLC Agreement and applicable securities laws.

3.2 Legal Power; Organization; Qualification. The Assignor who is a natural person is competent and has all requisite power and authority to execute and deliver this Agreement and to consummate the transaction contemplated hereby. Except as set forth in Schedule 4 hereto, no person has any community property rights, by virtue of marriage or otherwise, in any of the Member Interests. The Assignor which is not a natural person has been duly organized, and is validly existing and in good standing, under the laws of its jurisdiction of formation, has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and has taken all necessary corporate or other action to authorize the execution, delivery and performance of this Agreement.

3.3 Binding Agreement. This Agreement has been duly executed and delivered by the Assignor and, assuming due and valid authorization, execution and delivery by the Assignee and the Company, this Agreement constitutes a legal, valid and binding obligation of such Assignor, enforceable against such Assignor in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’

rights generally and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies. The spousal consents being executed by the persons listed on Schedule 4 hereto, if any, are enforceable against such persons in accordance with their terms.

3.4 Consents and Approvals; No Violations. Except for the filings, permits, authorizations, consents and approvals expressly contemplated by this Agreement, none of the execution, delivery or performance of this Agreement by the Assignor, the consummation by the Assignor of any of the transactions contemplated hereby or compliance by the Assignor with any of the provisions hereof will (a) conflict with or result in any breach of any provision of the certificate of incorporation, the by-laws or similar organizational documents of such Assignor, (b) require any filing with, or permit, authorization, consent or approval of, any governmental entity or other person (including consents from parties to loans, contracts, leases and other agreements to which such Assignor is a party), (c) require any consent, approval or notice under, or result in a violation or breach of, or constitute (with or without due notice or the passage of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any agreement to which such Assignor is a party, or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to such Assignor or any of such Assignor’s properties or assets, excluding from the foregoing clauses (b), (c) and (d) such violations, breaches or defaults which would not, individually or in the aggregate, have a material adverse effect on such Assignor or its ability to consummate the transactions contemplated hereby.

3.5 Investment Experience, etc. The Assignor is an “accredited investor” as that term is defined in Rule 501(a)(3) of Regulation D promulgated under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The Assignor can bear the economic risk of its investment in the Assignee Capital Stock and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of an investment in the Assignee Capital Stock. The Assignee Capital Stock is being acquired in a transaction not involving any public offering within the meaning of the Securities Act, and the Assignor understands and acknowledges that the Assignee Capital Stock has not been registered and may never be registered under the Securities Act. The Assignor is acquiring the Assignee Capital Stock solely for such Assignor’s own account and not with a view to a sale or distribution thereof in violation of any securities laws. The Assignor acknowledges that such Assignor has received, or has had access to, all information which such Assignor considers necessary or advisable to enable such Assignor to make a decision concerning such Assignor’s acquisition of the Assignee Capital Stock.

4. Representations and Warranties of the Assignee.

4.1 Assignee hereby represents and warrants to each Assignor as follows:

(a) Power and Authority. The Assignee is a corporation duly organized, validly existing and, except for state franchise taxes and penalties outstanding as of the date hereof, in good standing under the laws of its state of incorporation. The Assignee has requisite corporate power and authority to execute and deliver this Agreement, and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Assignee of

this Agreement and the consummation by it of the transactions contemplated hereby have been duly authorized by the board of directors of the Assignee, and no other corporate action on the part of the Assignee is necessary to authorize the execution and delivery by the Assignee of this Agreement or the consummation by it of the transactions contemplated hereby.

(b) Binding Agreement. This Agreement has been duly executed and delivered by the Assignee and, assuming due and valid authorization, execution and delivery thereof by the Assignors and the Company, this Agreement constitutes a legal, valid and binding obligation of the Assignee, enforceable against the Assignee in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

(c) Consents and Approvals; No Violations. Except for the filings, permits, authorizations, consents and approvals expressly contemplated by this Agreement, none of the execution, delivery or performance of this Agreement by the Assignee, the consummation by the Assignee of any of the transactions contemplated hereby or compliance by the Assignee with any of the provisions hereof will (i) conflict with or result in any breach of any provision of the certificate of incorporation, the by-laws or similar organizational documents of such Assignee, (ii) require any filing with, or permit, authorization, consent or approval of, any governmental entity or other person (including consents from parties to loans, contracts, leases and other agreements to which the Assignee is a party), (iii) require any consent, approval or notice under, or result in a violation or breach of, or constitute (with or without due notice or the passage of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any agreement to which the Assignee is a party, or (iv) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Assignee or any of its properties or assets, excluding from the foregoing clauses (ii), (iii) and (iv) such violations, breaches or defaults which would not, individually or in the aggregate, have a material adverse effect on such Assignee or its ability to consummate the transactions contemplated hereby.

(d) Investment Experience, etc. The Assignee can bear the economic risk of its investment in the Membership Interests, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Membership Interests. The Membership Interests are being acquired in a transaction not involving any public offering within the meaning of the Securities Act, and the Assignee understands and acknowledges that the Membership Interests have not been registered and may never be registered under the Securities Act. The Assignee is acquiring the Membership Interests solely for its own account and not with a view to a sale or distribution thereof in violation of any securities laws. The Assignee acknowledges that it has received, or has had access to, all information which it considers necessary or advisable to enable it to make a decision concerning its acquisition of the Membership Interests.

4.2 Assignee hereby represents and warrants to each TCW Entity that the shares of Assignee Class A Common Stock to be issued to such TCW Entity at the Closing in

accordance with the terms of this Agreement have been duly authorized and, at the Closing, will be validly issued, fully paid and nonassessable.

5. Representations and Warranties of the Company. The Company hereby represents and warrants to each Assignor and the Assignee as follows:

(a) Power and Authority. The Company is a limited liability company duly organized, validly existing and, except for state annual taxes and penalties outstanding as of the date hereof, in good standing under the laws of its state of formation. The Company has the requisite limited liability company power and authority to execute and deliver this Agreement, and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Company of this Agreement and the consummation by it of the transactions contemplated hereby have been duly authorized by its members, and no other action on the part of the Company is necessary to authorize the execution and delivery by the Company of this Agreement or the consummation by it of the transactions contemplated hereby.

(b) Binding Agreement. This Agreement has been duly executed and delivered by the Company and, assuming due and valid authorization, execution and delivery thereof by the Assignors and the Assignee, this Agreement constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

(c) Consents and Approvals; No Violations. Except for the filings, permits, authorizations, consents and approvals expressly contemplated by this Agreement, none of the execution, delivery or performance of this Agreement by the Company, the consummation by the Company of any of the transactions contemplated hereby or compliance by the Company with any of the provisions hereof will (i) conflict with or result in any breach of any provision of the amended and restated limited liability company agreement and other organizational documents of the Company, (ii) require any filing with, or permit, authorization, consent or approval of, any governmental entity or other person (including consents from parties to loans, contracts, leases and other agreements to which the Company is a party), (iii) require any consent, approval or notice under, or result in a violation or breach of, or constitute (with or without due notice or the passage of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any agreement to which the Company is a party, or (iv) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company or any of its properties or assets.

6. Covenants; Consents; Waivers.

6.1 Subject to the terms and conditions hereof, prior to the Closing, each of the parties hereto agrees to use its reasonable commercial efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement

and to cooperate with each party hereto in connection with the foregoing, including, without limitation, obtaining all necessary waivers, consents and approvals from other persons to complete the transactions contemplated hereby.

6.2 Each of the parties hereto shall cooperate with each other party hereto with regard to (a) the preparation, execution and filing of Tax Returns and (b) any Tax audit, administrative or court proceeding and any other matter relating to Taxes, in each case, with regard to the Company or relating to or arising out of the transactions contemplated by this Agreement. Such cooperation shall include the provision of all relevant information to another party, including relevant information to complete the Tax Return of such party. Assignee shall prepare and timely file all Tax Returns of Assignee and the Company required to be filed in connection with the transactions contemplated by this Agreement, including, without limitation, the Company’s Tax Returns for its taxable year ending on the Closing Date. For purposes of this Section 6.2 “Taxes” shall mean all United States federal, state, local and foreign taxes, assessments, levies, duties, imposts or similar charges (whether imposed directly or through withholding), including any interests, additions to tax or penalties applicable thereto and “Tax Returns” shall mean all United States federal, state, local and foreign tax returns, declarations, statements, reports, schedules, forms and information returns relating to Taxes, including any amendments thereof.

6.3 Each of the Assignors consents to the transfer by the other Assignors of their respective Membership Interests to the Assignee in accordance with the terms set forth herein. Each party hereto agrees that the transactions contemplated hereby shall not be subject to the requirements of Article IX of the LLC Agreement and hereby waives applicability of such Article IX to the transactions contemplated by this Agreement.

6.4 Each of the Assignors, in its or his capacity as a stockholder of the Assignee, hereby consents to, approves and adopts, in all respects, the Second Amended and Restated Charter, in the form attached as Annex A hereto. The consent of each Assignor under this Section 6.4 is given as of the date of this Agreement pursuant to Section 228 of the General Corporation Law of the State of Delaware.

6.5 In connection with the issuance by the Assignee of the Assignee Class A Common Stock, each of the Assignors (other than the TCW Entities) hereby waive their preemptive rights under Section 10 of that certain Stockholders Agreement, Irrevocable Proxy and Voting Agreement, entered into as of February 11, 1997, by and among the Assignee and the stockholders named therein, to the extent such preemptive rights may be deemed applicable to the transaction contemplated hereunder.

6.6 Each Preferred Stock LLC Member hereby appoints each of Martin Anderson and Bruce Mosbacher, effective from and after the Effective Date, to act, jointly or severally, as such Preferred Stock LLC Member’s Representative (each, a “Preferred Stock LLC Member Representative”) under this Agreement in accordance with the terms herein.

7. Conditions to Closing.

7.1 Conditions to the Assignee’s Obligations. The obligations of the Assignee hereunder required to be performed at the Closing shall be subject to the satisfaction or waiver, at or prior to the Closing, of the following conditions, all of which shall be deemed to have been satisfied at or prior to the Closing unless the Assignors, individually or as a group, deliver a written notice to the Assignee prior to the Closing Date stating that the conditions set forth in this Section 7.1 have not been satisfied:

(a) Representations and Warranties. The representations and warranties of each of the Assignors and the Company set forth in this Agreement shall be true and correct in all material respects on and as of the Closing Date.

(b) Performance of Obligations of Each Assignor and the Company. Each of the Assignors and the Company shall have performed in all material respects all obligations and agreements, and complied in all material respects with all covenants, contained in this Agreement to be performed and complied with at or prior to the Closing Date.

(c) No Injunctions or Restraints; Approvals and Consents. No temporary restraining order or preliminary or permanent injunction of any court, administrative agency or other governmental body of competent jurisdiction prohibiting any of the transactions contemplated by this Agreement shall be in effect. All third-party consents and all governmental and regulatory approvals and clearances, if any, necessary for the consummation of the transactions contemplated by this Agreement shall have been obtained and shall be in full force and effect, and the Assignee shall be reasonably satisfied that the consummation of such transactions does not and will not contravene any applicable law, except to the extent any contravention or contraventions, individually or in the aggregate, could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Assignors to complete the transactions contemplated hereby.

7.2 Conditions to Assignors’ Obligations. The obligations of the Assignors hereunder required to be performed at the Closing shall be subject to the satisfaction or waiver, at or prior to the Closing, of the following conditions:

(a) Representations and Warranties. The representations and warranties of the Assignee set forth in this Agreement shall be true and correct in all material respects on and as of the Closing Date.

(b) Performance of Obligations of the Assignee. The Assignee shall have performed in all material respects all obligations and agreements, and complied in all material respects with all covenants, contained in this Agreement to be performed and complied with at or prior to the Closing Date.

and effect, and the Assignors shall be reasonably satisfied that the consummation of such transactions does not and will not contravene any applicable law, except to the extent any contravention or contraventions, individually or in the aggregate, could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Assignors to complete the transactions contemplated hereby.

(d) Certificate. The Assignee shall have delivered to the TCW Entities and the Preferred Stock LLC Member Representatives (collectively, the “Assignor Representatives”) a certificate, dated the Closing Date and signed on behalf of the Assignee by its Chairman of the Board, certifying that the conditions set forth in this Section 7.2 have been satisfied with respect to the Assignee.

8. Termination; Right to Rescind this Agreement.

8.1 Right to Terminate. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing:

(a) by the unanimous written consent of the parties hereto, provided that, for purposes of this Section 8.1(a), each Preferred Stock LLC Member Representative shall be permitted, and is authorized, to consent to such termination on behalf of each Preferred Stock LLC Member;

(b) by the Assignor Representatives, by written notice to the Assignee, if there has been a material violation or breach by Assignee of any representation, warranty, covenant or agreement set forth in this Agreement, which violation or breach has not been cured within ten (10) business days following receipt by the Assignee of notice of such breach; or

(c) by the Assignee, by written notice to the Assignor Representatives, if there has been a material violation or breach by any of the Assignors of any representation, warranty, covenant or agreement set forth in this Agreement, which violation or breach has not been cured within ten (10) business days following receipt by the breaching Assignor of notice of such breach.

8.2 Effect of Termination. In the event of termination of this Agreement in accordance with Section 8.1, this Agreement shall forthwith become void and have no effect, except (a) to the extent that such termination results from the material breach by a party hereto of its obligations hereunder (in which case such breaching party shall be liable for all damages allowable at law and any relief available at equity), and (b) that Section 8.2 and Section 9 shall survive termination of this Agreement.

8.3 Right to Rescind. If the Closing shall not have occurred on or prior to September 10, 2003 (the “Outside Date”), then any person or entity that has become a signatory to this Agreement on or prior to the Outside Date may, in its sole and absolute discretion, without further action on its part (other than as contemplated by this Section 8.3) or on the part of any other signatory hereto, or payment by it, rescind its agreement to be a party hereto by giving written notice as follows and pursuant to Section 9.7 hereof:

(a) in the case of the Assignee or the Company, by written notice to the Assignor Representatives;

(b) in the case of the TCW Entities, by written notice to the Assignee and the Preferred Stock LLC Member Representatives; and

8.4 Effect of Rescission. In the event any signatory hereto rescinds his, her or its agreement to be a party hereto in accordance with Section 8.3, this Agreement shall forthwith become void and have no effect as to such entity or person, except that Section 8.4 and Section 9.6 shall survive any rescission of this Agreement by any signatory hereto.

9. Miscellaneous.

9.1 Entire Agreement; Amendment. This Agreement, including all schedules and annexes hereto, constitutes the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between such parties, whether oral or written, with respect to the subject matter hereof. No amendment, modification or alteration of the terms or provisions of this Agreement shall be binding unless the same shall be in writing and duly executed by the parties hereto.

9.2 Assignment; Successors and Assigns. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties hereto; provided that each Preferred Stock LLC Member Representatives shall be permitted, and is authorized, to consent to such assignment on behalf of each Preferred Stock LLC Member. Subject to the preceding sentence, the terms and conditions of this Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and permitted assigns and is not intended to confer any rights, remedies or benefits on any other persons.

9.3 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original and all of which shall constitute the same instrument.

9.4 Headings. The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction hereof.

9.5 No Waiver. No action taken in connection with this Agreement, including any investigation by or on behalf of any party hereto, will be deemed to constitute a waiver by the party taking any action of compliance by any other party hereto with any of such party’s representation, warranty or agreement contained herein. The waiver by any party hereto of a breach of any provision of this Agreement will not operate or be construed as a waiver of any subsequent breach.

9.6 Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and/or expenses; provided, however, that if any action or proceeding is instituted to enforce or interpret the terms of this Agreement, the prevailing party in such action shall be entitled, in addition to any other relief to which the party is entitled, to reimbursement of its reasonable attorneys fees and expenses; provided, further, that the Assignee shall pay all costs and expenses incurred by the TCW Entities in connection with this Agreement and the transactions contemplated hereby, including, without limitation, reasonable fees and expenses of legal counsel and other advisors, regardless of whether the transactions contemplated hereby are consummated.

9.7 Notices. All notices, demands, requests, consents, approvals or other communications required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be delivered (charges prepaid, receipt confirmed or return receipt requested (if available)) by hand, by nationally recognized air courier service, by certified mail or fax, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Notice shall be deemed given and effective (a) if delivered by hand or by nationally recognized courier service, when delivered at the address specified in this Section 9.7 (or in accordance with the latest unrevoked written direction from such party), (b) if by certified mail, upon mailing or (c) if given by fax when such fax is transmitted to the fax number specified in this Section 9.7 (or in accordance with the latest unrevoked written direction from such party), provided the appropriate confirmation is received.

(i)	if to any of the TCW Entities, to it at:

		TCW/Crescent Mezzanine Partners, L.P.
		11100 Santa Monica Boulevard, Suite 2000
		Los Angeles, California 90025
		Phone:	(310) 235-5982
		Fax:	(310) 235-5967
		Attention: Tyrone Chang

	with a copy (which shall not constitute notice) to:

		Skadden, Arps, Slate, Meagher & Flom LLP
		300 South Grand Avenue, Suite 3400
		Los Angeles, California 90071-3132
		Phone: (213) 687-5000
		Fax: (213) 687-5000
		Attention: Jeffrey Cohen, Esq.

(ii)	if to any of the Preferred Stock LLC Members, to such Member at the addresses set forth under such Member’s name on Schedule 1 hereto.

(iii)	if to the Assignee or the Company, to it at:

	Home Asset Management Corp.
	c/o Martin Anderson, Esq.
	Goodsill, Anderson, Quinn & Steifel
	1099 Alakea Street, Suite 1800
	Honolulu, Hawaii 96813
	Phone:	(808) 547-5660
	Fax:	(808) 547-5880

with a copy (which shall not constitute notice) to:

	Bingham McCutchen, LLP
	1900 University Avenue
	East Palo Alto, California 94303
	Phone:	(650) 849-4400
	Fax:	(650) 849-4800
	Attention: Alan Kalin, Esq.

and

	TCW/Crescent Mezzanine Partners, L.P.
	11100 Santa Monica Boulevard, Suite 2000
	Los Angeles, California 90025
	Telephone:		(310) 235-5982
	Fax:		(310) 235-5967
	Attention:		Tyrone Chang

9.8 Further Assurances. From and after the Closing, each party hereto shall do, and shall cause each party over which it has power as trustee to do, all such further acts and execute, acknowledge, deliver and file all such further instruments and documents as may be necessary or desirable to give effect to and carry out the transactions contemplated by this Agreement.

9.9 Governing Law. The validity, performance and enforcement of this Agreement and any agreement entered into pursuant hereto, unless expressly provided to the contrary, will be governed by the laws of the State of Delaware, without giving effect to the principles of conflicts of law thereof.

9.10 Consent to Jurisdiction. Each of the Assignors, the Company and the Assignee (a) consents and irrevocably submits, in any legal action or proceeding relating to this Agreement, to the jurisdiction of the courts of the State of Delaware and of the courts of the United States for a judicial district within the territorial limits of the State of Delaware, and consents that any such action or proceeding may be brought in such courts, (b) consents and irrevocably submits to the venue of such action or proceeding in Delaware (or such judicial district of a court of the United States as will include the same), and waives any objection that it may now or hereafter have to the venue of such action or proceeding in any such courts or that such action or proceeding was brought in an inconvenient forum and (c) consents that service of legal process in any such action or proceeding may be made upon it by certified mail, return

receipt requested, postage prepaid, to such party at its address specified in Section 9.7; provided, however, that nothing in this Section 9.10 shall prevent any party hereto from bringing any action in any other jurisdiction.

9.11 Confidentiality. The terms and conditions of this Agreement, and the transactions contemplated hereby, shall be confidential and shall not be disclosed without the prior written consent of the other parties hereto (provided that each Preferred Stock LLC Member Representatives shall be permitted, and is authorized, to consent to such disclosure on behalf of each Preferred Stock LLC Member), except (a) that each party hereto may disclose such terms and conditions to its representatives, advisors and counsel who acknowledge the confidentiality hereof, (b) as required by law or (c) or as otherwise mutually agreed upon by the parties hereto. The parties hereto recognize and agree that in the event of a breach of this Section 9.11, money damages will be insufficient to redress the harm caused by such breach and injunctive relief shall be an appropriate remedy for such breach. Notwithstanding the foregoing, each party hereto (and each employee, representative, or other agent of such party) may disclose to any and all persons, without limitation of any kind, the tax treatment and any facts that may be relevant to the tax structure of the agreements contained herein; provided, however, that no party hereto (and no employee, representative, or other agent thereof) shall disclose any other information that is not relevant to understanding the tax treatment and tax structure of the agreements contained herein (including the identity of any party hereto and any information that could lead another to determine the identity of any party hereto), or any other information to the extent that such disclosure could result in a violation of any federal or state securities law.

9.12 Public Announcements. Each of the parties hereto agrees that, except as contemplated by Section 9.11, no public release or announcement concerning the terms of this Agreement or the transactions contemplated hereby shall be issued by any party without the prior written consent (which consent shall not be unreasonably withheld) of the other parties hereto, except as such release or announcement may be required by law.

9.13 Specific Performance. The Assignee, on the one hand, and each Assignor and the Company, on the other hand, each acknowledges that the other will be irreparably harmed and that there will be no adequate remedy at law in the event of a violation by it of any of its covenants or agreements contained in this Agreement. It is accordingly agreed that, in addition to any other remedies which may be available upon the breach of such covenants and agreements, each of (a) Assignee or (b) Assignor and the Company, as the case may be, shall have the right to obtain injunctive relief to restrain any breach or threatened breach of, or otherwise to obtain specific performance of, the other’s covenants or agreements contained in this Agreement.

9.14 Fair Construction. This Agreement shall be interpreted without regard to which party hereto initiated the drafting process or proposed or drafted particular language and shall not be construed for or against any party hereto by reason of such initiation, proposal or drafting.

[Signature Pages Follow]

IN WITNESS WHEREOF, each of the parties hereto has executed, or has caused this Agreement to be executed on its behalf, as of the date first above written.

ASSIGNORS:

CRESCENT/MACH I PARTNERS, L.P.

By:	TCW Asset Management Company its investment advisor


	By:	/s/ John C. Rocchio
	Name: John C. Rocchio
	Title: Managing Director


	By:	/s/ James M. Hassett
	Name: James M. Hassett
	Title: Managing Director


TCW/CRESCENT MEZZANINE PARTNERS, L.P.
TCW/CRESCENT MEZZANINE TRUST
TCW/CRESCENT MEZZANINE INVESTMENT PARTNERS, L.P.

By:	TCW/Crescent Mezzanine, L.L.C., its investment manager


	By:	/s/ John C. Rocchio
	Name: John C. Rocchio
	Title: Managing Director

TCW SHARED OPPORTUNITY FUND II, L.P.

By:		TCW INVESTMENT MANAGEMENT COMPANY, its investment manager


		By:	/s/ John C. Rocchio
		Name: John C. Rocchio
		Title: Managing Director


		By:	/s/ James M. Hassett
		Name: James M. Hassett
		Title: Managing Director


ERNEST J. GALLO 1991 FAMILY TRUST


By:	/s/ Joseph E. Gallo
Name: Joseph E. Gallo
Title: Trustee


JOSEPH C. GALLO 1994 FAMILY TRUST


By:	/s/ Joseph E. Gallo
Name: Joseph E. Gallo
Title: Trustee


STEPHANIE A. GALLO 1990 FAMILY TRUST


By:	/s/ Joseph E. Gallo
Name: Joseph E. Gallo
Title: Trustee


PK PARTNERS


By:	/s/ Peter E. Haas, Jr.
Name: Peter E. Haas, Jr.
Title: Managing General Partner

	JOSEPHINE B. HAAS REVOCABLE TRUST


	By:	/s/ Josephine B. Haas
	Name: Josephine B. Haas
	Title: Trustee


	KELLER 1991 TRUST


	By:	/s/ George M. Keller
	Name: George M. Keller
	Title: Trustee


	LILLARD PARTNERS


	By:	/s/ John S. Lillard
	Name: John S. Lillard
	Title: Manager


	PLF PARTNERS


	By:	/s/ W. Parlin Lillard, Jr.
	Name: W. Parlin Lillard, Jr.
	Title: General Partner


	SAW ISLAND PARTNERS


	By:	/s/ R. Bruce Mosbacher
	Name: R. Bruce Mosbacher
	Title: General Partner


	/s/ Martin Anderson
	Martin Anderson

	ASSIGNEE:

	HOME ASSET MANAGEMENT CORP., a Delaware corporation


	By:	/s/ Martin Anderson
		Name: Martin Anderson
		Title: Chairman


	COMPANY:

	MDC REIT HOLDINGS, LLC, a Delaware limited liability company

	By:	Home Asset Management Corp., Its managing member


	By:	/s/ Martin Anderson
		Name: Martin Anderson
		Title: Chairman

Schedule 1

List of Preferred Stock LLC Members

Ernest J. Gallo 1991 Family Trust

c/o Susan Zakarian

600 Yosemite Blvd.

P.O. Box 1130

Modesto, CA 95353

Joseph C. Gallo 1994 Family Trust

c/o Susan Zakarian

600 Yosemite Blvd.

P.O. Box 1130

Modesto, CA 95353

Stephanie A. Gallo 1990 Family Trust

c/o Susan Zakarian

600 Yosemite Blvd.

P.O. Box 1130

Modesto, CA 95353

Josephine B. Haas Revocable Trust

c/o Roy Cuenca

Argonaut Securities

1155 Battery Street

San Francisco, CA 94111

Keller 1991 Trust

c/o George Keller

Chevron Corporation

345 California Street, 30^th Floor

San Francisco, CA 94104

Lillard Partners

c/o John S. Lillard

1340 N. Waukegan Road

Lake Forest, IL 60045

PK Partners

c/o Roy Cuenca

Argonaut Securities

1155 Battery Street

San Francisco, CA 94111

PLF Partners

c/o W. Parlin Lillard, Jr.

533 Middle Road

Del Rey Beach, FL 33483

Saw Island Partners

c/o R. Bruce Mosbacher

2200 Sand Hill Road, Suite 150

Menlo Park, CA 94025

Martin Anderson, Esq.

Goodsill, Anderson, Quinn & Steifel

1099 Alakea Street, Suite 1800

Honolulu, HI 96813

Schedule 2-A

Membership Interests of TCW Entities

As of September 24, 2003

Crescent/Mach I Partners, L.P.		Membership Interests representing 0.00146% of the Company’s Aggregate Capital Contribution

TCW/Crescent Mezzanine Investment Partners, L.P.		Membership Interests representing 0.00026% of the Company’s Aggregate Capital Contribution

TCW/Crescent Mezzanine Partners, L.P.		Membership Interests representing 0.00964% of the Company’s Aggregate Capital Contribution

TCW/Crescent Mezzanine Trust		Membership Interests representing 0.00293% of the Company’s Aggregate Capital Contribution

TCW Shared Opportunity Fund II, L.P.		Membership Interests representing 0.00030% of the Company’s Aggregate Capital Contribution

Schedule 2-B

Class A Common Stock Issuance

Crescent/Mach I Partners, L.P.		80,000 shares of Class A Common Stock

TCW/Crescent Mezzanine Investment Partners, L.P.		14,445 shares of Class A Common Stock

TCW/Crescent Mezzanine Partners, L.P.		528,644 shares of Class A Common Stock

TCW/Crescent Mezzanine Trust		160,911 shares of Class A Common Stock

TCW Shared Opportunity Fund II, L.P.		16,000 shares of Class A Common Stock

Total		800,000 shares of Class A Common Stock

Schedule 3

Membership Interests of Preferred Stock LLC Members

Schedule 4

Spousal Consent

Annex A

Form of the Second Amended and Restated Certificate

Annex B

Form of Spousal Consent

Annex C

Form of Amended and Restated Stockholders Agreement, Voting Agreement
and Irrevocable Proxy

EX-8 8 a03-3863_1ex8.htm EX-8

EXHIBIT 8

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (this “Merger Agreement”) is entered into as of September 25, 2003, by and among Home Asset Management Corp., a Delaware corporation (“HAMCO”), MDC Reit Holdings, LLC, a Delaware limited liability company (“Holdings”), Crescent/Mach I Partners, L.P., a Delaware limited partnership, TCW/Crescent Mezzanine Investment Partners, L.P., a Delaware limited partnership, TCW/Crescent Mezzanine Partners, L.P., a Delaware limited partnership, TCW/Crescent Mezzanine Trust, a trust organized under the laws of Delaware, and TCW Shared Opportunity Fund II, L.P., a Delaware limited partnership (collectively, the “TCW Entities”), and the other entities and persons signatories hereto (collectively, the “Non-TCW Stockholders,” and together with the TCW Entities, the “HAMCO Stockholders”).

W I T N E S S E T H

WHEREAS, pursuant to that certain Contribution Agreement, dated as of September 24, 2003 (the “Contribution Agreement”), by and among the TCW Entities, the entities and persons listed in Schedule 1 hereto (collectively, the “Preferred Stockholders”), HAMCO and Holdings, the TCW Entities and the Preferred Stockholders contributed all of their membership interests in Holdings (the “Membership Interests”) to HAMCO in consideration of HAMCO’s agreement to amend certain rights and preferences of its Series A Non-Voting Mandatorily Convertible Preferred Stock, par value $.0001 per share (“Series A Preferred Stock”), and its Series B Non-Voting Preferred Stock, par value $.0001 per share (“Series B Preferred Stock” and, collectively, the “HAMCO Preferred Stock”), and to issue shares of its newly authorized Class A common stock, par value $.0001 per share (“HAMCO Class A Common Stock”);

WHEREAS, after giving effect to the transactions contemplated by the Contribution Agreement, HAMCO owns 100% of the Membership Interests of Holdings;

WHEREAS, each of the Non-TCW Stockholders owns the number of shares of common stock, par value $.0001 per share, of HAMCO (the “HAMCO Common Stock”), the number of shares of HAMCO Preferred Stock and the number of warrants to purchase such number of shares of HAMCO Common Stock (the “Warrants”), in each case as set forth on Schedule 2 hereto;

WHEREAS, each of the TCW Entities owns the number of shares of HAMCO Class A Common Stock and Warrants to purchase such number of shares of HAMCO Common Stock, in each case as set forth on Schedule 3 hereto;

WHEREAS, HAMCO has authority to issue (i) 5,000,000 shares of common stock, par value $.0001 per share, of which 1,500,000 shares are designated as HAMCO Common Stock, 1,500,000 shares are designated as HAMCO Class A Common Stock and 500,000 shares are designated as Class B Common Stock, par value $.0001 per share, of HAMCO (the “HAMCO Class B Common Stock” and, together with the HAMCO Class A Common Stock and the HAMCO Common Stock, the “Common

Stock,” and, together with the HAMCO Preferred Stock, the “HAMCO Capital Stock”), and (ii) 200,000 shares of HAMCO Preferred Stock, of which 20,000 shares are designated as Series A Preferred Stock and 40,000 shares are designated as Series B Preferred Stock;

WHEREAS, as of the date hereof, HAMCO has not issued any options to purchase any shares of Common Stock (collectively, the “Options”) pursuant to its 1997 Stock Option Plan (the “Stock Option Plan”) and in connection with the Merger, HAMCO desires to terminate the Stock Option Plan;

WHEREAS, HAMCO has adopted an executive deferred compensation plan in October 1997, which plan shall continue to be in effect after the Effective Time of the Merger;

WHEREAS, HAMCO, as sole and managing member of Holdings (the “Sole LLC Member”), has authorized and approved the Merger, on the terms and subject to the conditions herein provided;

WHEREAS, the Board of Directors of HAMCO (the “Board”) has unanimously determined that it is advisable and in the best interests of HAMCO to merge with Holdings on the terms and subject to the conditions herein provided, and the Board has authorized and approved the Merger and this Merger Agreement; and

WHEREAS, the HAMCO Stockholders are being asked to authorize and approve the Merger, on the terms and subject to the conditions herein provided.

NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth herein and intending to be legally bound hereby, the parties hereto agree as follows:

1. Merger. Holdings shall be merged with and into HAMCO (the “Merger”), with HAMCO as the surviving corporation (hereafter sometimes referred to as the “Surviving Corporation”), pursuant to Section 18-209 of the Limited Liability Company Act of the State of Delaware and Sections 251 and 264 of the General Corporation Law of the State of Delaware (the “DGCL”), and HAMCO shall continue to be governed by the laws of the State of Delaware after the Merger. The Merger shall become effective (the “Effective Time”) upon the filing of a certificate of merger with the Secretary of State of the State of Delaware in accordance with the DGCL.

2. Governing Documents. The Second Amended and Restated Certificate of Incorporation and the bylaws of HAMCO, as in effect immediately prior to the Effective Time, shall be the certificate of incorporation and the bylaws (collectively, the “Charter Documents”) of the Surviving Corporation, without change or amendment, until thereafter amended in accordance with the provisions thereof and applicable law.

3. Directors and Officers. The directors and officers of HAMCO immediately prior to the Effective Time shall be and become the directors and officers of

the Surviving Corporation, each with the same position and titles as immediately prior to the Effective Time. Each director and officer shall serve in accordance with the Charter Documents of the Surviving Corporation until their respective successors are elected and qualified or until their earlier resignation or removal.

4. Succession. At the Effective Time, HAMCO shall succeed to Holdings in the manner of and as more fully set forth in the DGCL. At the Effective Time, the separate existence of Holdings shall cease. Without limiting the foregoing, HAMCO shall (a) continue to possess all of its assets, rights, power and property as constituted immediately prior to the Effective Time, (b) be subject to all actions previously taken by the Board and the Sole LLC Member, (c) succeed, without other transfer, to all of the assets, rights, powers and property of Holdings, (d) continue to be subject to all of the debts, liabilities and obligations of HAMCO as constituted immediately prior to the Effective Time and (e) succeed, without other transfer, to all rights, privileges, powers and franchises of a public and private nature of Holdings, subject to all of the debts, liabilities and obligations of Holdings in the same manner as if HAMCO had itself incurred them.

5. Representations and Warranties of HAMCO. HAMCO represents and warrants to the other parties hereto as follows:

(a) Power and Authority. HAMCO is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation. HAMCO has full corporate power and authority to execute and deliver this Merger Agreement and each other document or instrument contemplated hereby, and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by HAMCO of this Merger Agreement and each other document or instrument contemplated hereby, and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by the Board, and no other corporate action on the part of HAMCO is necessary to authorize the execution and delivery by HAMCO of this Merger Agreement and each other document or instrument contemplated hereby, or the consummation by it of the transactions contemplated hereby and thereby.

(b) Binding Agreement. This Merger Agreement and each other document or instrument contemplated hereby have been duly executed and delivered by HAMCO and, assuming due and valid authorization, execution and delivery thereof by the other parties hereto and thereto, each of this Merger Agreement and the other documents or instruments contemplated hereby constitutes a legal, valid and binding obligation of HAMCO, enforceable against HAMCO in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

(c) Consents and Approvals; No Violations. Except for the filings, permits, authorizations, consents and approvals expressly contemplated by this Merger

Agreement, none of the execution, delivery or performance of this Merger Agreement or any of the other documents or instruments contemplated hereby by HAMCO, the consummation by HAMCO of any of the transactions contemplated hereby or thereby, or compliance by HAMCO with any of the provisions hereof or thereof will (i) conflict with or result in any breach of any provision of the Charter Documents of HAMCO, (ii) require any filing with, notice under, or permit, authorization, consent or approval of, any governmental entity or other person (including consents from parties to loans, contracts, leases and other agreements to which HAMCO is a party), except such as have been already obtained, filed or given, (iii) result in a violation or breach of, or constitute (with or without due notice or the passage of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any agreement to which HAMCO is a party, or (iv) violate any order, writ, injunction, decree, statute, rule or regulation applicable to HAMCO or any of its properties or assets.

6. Representations and Warranties of Holdings. Holdings represents and warrants to the other parties hereto as follows:

(a) Power and Authority. Holdings is a limited liability company duly organized, validly existing and in good standing under the laws of its state of organization. Holdings has the requisite limited liability company power and authority to execute and deliver this Merger Agreement and each other document or instrument contemplated hereby, and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by Holdings of this Merger Agreement and each other document or instrument contemplated hereby, and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by the Sole LLC Member, and no other corporate action on the part of Holdings is necessary to authorize the execution and delivery by Holdings of this Merger Agreement and each other document or instrument contemplated hereby, or the consummation by it of the transactions contemplated hereby and thereby.

(b) Binding Agreement. This Merger Agreement and each other document or instrument contemplated hereby have been duly executed and delivered by Holdings and, assuming due and valid authorization, execution and delivery thereof by the other parties hereto and thereto, each of this Merger Agreement and the other documents or instruments contemplated hereby constitutes a legal, valid and binding obligation of Holdings, enforceable against Holdings in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

(c) Consents and Approvals; No Violations. Except for the filings, permits, authorizations, consents and approvals expressly contemplated by this Merger Agreement, none of the execution, delivery or performance of this Merger Agreement or any of the other documents or instruments contemplated hereby by Holdings, the consummation by Holdings of any of the transactions contemplated hereby or thereby, or

compliance by Holdings with any of the provisions hereof or thereof will (i) conflict with or result in any breach of any provision of the certificate of formation or limited liability company agreement of Holdings, (ii) require any filing with, notice under, or permit, authorization, consent or approval of, any governmental entity or other person (including consents from parties to loans, contracts, leases and other agreements to which Holdings is a party), except such as have been already obtained, filed or given, (iii) result in a violation or breach of, or constitute (with or without due notice or the passage of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any agreement to which Holdings is a party, or (iv) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Holdings or any of its properties or assets.

7. Representations and Warranties of the HAMCO Stockholders. Each of the HAMCO Stockholders represents and warrants to the other parties hereto as follows:

(a) Power and Authority. Such HAMCO Stockholder is duly organized, validly existing and in good standing under the laws of its state of organization. Such HAMCO Stockholder has full power and authority to execute and deliver this Merger Agreement and each other document or instrument contemplated hereby, and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by such HAMCO Stockholder of this Merger Agreement and each other document or instrument contemplated hereby, and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by such HAMCO Stockholder, and no other action, corporate or other, on the part of such HAMCO Stockholder is necessary to authorize the execution and delivery by such HAMCO Stockholder of this Merger Agreement and each other document or instrument contemplated hereby, or the consummation by it of the transactions contemplated hereby and thereby.

(b) Binding Agreement. This Merger Agreement and each other document or instrument contemplated hereby have been duly executed and delivered by such HAMCO Stockholder and, assuming due and valid authorization, execution and delivery thereof by the other parties hereto and thereto, each of this Merger Agreement and the other documents or instruments contemplated hereby constitutes a legal, valid and binding obligation of such HAMCO Stockholder, enforceable against such HAMCO Stockholder in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’ rights generally and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

(c) Consents and Approvals; No Violations. Except for the filings, permits, authorizations, consents and approvals expressly contemplated by this Merger Agreement, none of the execution, delivery or performance of this Merger Agreement or any of the other documents or instruments contemplated hereby by such HAMCO Stockholder, the consummation by such HAMCO Stockholder of any of the transactions

contemplated hereby or thereby, or compliance by such HAMCO Stockholder with any of the provisions hereof or thereof will (i) conflict with or result in any breach of any provision of the any of the organizational documents of such HAMCO Stockholder, (ii) require any filing with, notice under, or permit, authorization, consent or approval of, any governmental entity or other person (including consents from parties to loans, contracts, leases and other agreements to which such HAMCO Stockholder is a party), except such as have been already obtained, filed or given, (iii) result in a violation or breach of, or constitute (with or without due notice or the passage of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any agreement to which such HAMCO Stockholder is a party, or (iv) violate any order, writ, injunction, decree, statute, rule or regulation applicable to such HAMCO Stockholder or any of its properties or assets, excluding from the foregoing clauses (ii), (iii) and (iv) such violations, breaches or defaults which would not, individually or in the aggregate, have a material adverse effect on such HAMCO Stockholder or its ability to consummate the transactions contemplated hereby.

8. Cancellation of Holdings Membership Interests. At the Effective Time, each Membership Interest shall automatically be canceled and retired and shall cease to exist, and no other consideration shall be delivered or deliverable in exchange therefor, and each holder of any such Membership Interests shall cease to have any rights with respect thereto.

9. Treatment of HAMCO Capital Stock. At the Effective Time, (a) each share of HAMCO Common Stock shall automatically be canceled and retired and shall cease to exist, and no other consideration shall be delivered or deliverable in exchange therefor, and each holder of a certificate representing any such shares of such HAMCO Common Stock shall cease to have any rights with respect thereto and (b) each share of HAMCO Series A Preferred Stock, HAMCO Series B Preferred Stock and HAMCO Class A Common Stock issued and outstanding prior to the Effective Time shall remain outstanding, without change or amendment, after the Effective Time.

10. Cancellation of Warrants. At the Effective Time, all of the then outstanding and unexercised Warrants previously granted to any HAMCO Stockholder shall be cancelled and shall no longer be exercisable, and no other consideration shall be delivered or deliverable in exchange therefor. Each holder of Warrants (a “Warrant Holder”) hereby irrevocably consents and agrees, with full knowledge of the effects thereof, to the cancellation of all Warrants held by such Warrant Holder. Each Warrant Holder further consents and agrees that upon such termination, such Warrant Holder shall have no further right or claim to such Warrants or other payments and issuances in connection therewith, and each Warrant Holder forever releases HAMCO and each of its related affiliates, subsidiaries, officers, directors, employees and agents from any and all claims, rights or actions in connection with the Warrants or payments made with respect thereto.

11. Termination of the Stock Option Plan. Effective as of the Effective Time, the Stock Option Plan shall be terminated.

12. HAMCO Stockholders Consent. Each HAMCO Stockholder hereby consents to, authorizes, approves and adopts the Merger, this Merger Agreement and the transactions contemplated herein, on the terms and subject to the conditions set forth in this Merger Agreement. The consent referred to in this Section 12 is given as of the date of this Merger Agreement pursuant to Section 228 of the DGCL.

13. Miscellaneous

(a) Governing Law. This Merger Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to any applicable principles of conflicts of law.

(b) Counterparts. This Merger Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which shall constitute one agreement.

(c) Headings. The various headings are inserted for purposes of reference only and shall not affect the meaning or interpretation of this Merger Agreement or any provision thereof.

(d) Further Assurances. From time to time, as and when required by HAMCO or by its successors and assigns, there shall be executed and delivered on behalf of Holdings and the HAMCO Stockholders such deeds and other instruments, and there shall be taken or caused to be taken by it such further and other action, as shall be appropriate or necessary in order to vest, perfect or confirm, of record or otherwise, in HAMCO the title to and possession of all the property, interests, assets, rights, privileges, immunities, powers, franchises and authority of Holdings and the HAMCO Stockholders, and otherwise to carry out the purposes of this Merger Agreement, and the officers and directors of HAMCO are fully authorized, in the name and on behalf of Holdings, the HAMCO Stockholders or otherwise, to take any and all such action and to execute and deliver any and all such deeds and other instruments. In addition, each of Holdings, the HAMCO Stockholders and HAMCO agrees to do and perform all things required or as may be necessary or desirable to effectuate the purposes and intent hereof.

(e) Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and/or expenses; provided, however, that if any action or proceeding is instituted to enforce or interpret the terms of this Agreement, the prevailing party in such action shall be entitled, in addition to any other relief to which the party is entitled, to reimbursement of its reasonable attorneys fees and expenses; provided, further, that HAMCO shall pay all costs and expenses incurred by the TCW Entities in connection with this Agreement and the transactions contemplated hereby, including, without limitation, reasonable fees and expenses of legal counsel and other advisors, regardless of whether the transactions contemplated hereby are consummated.

(f) Amendment and Abandonment. At any time, this Merger Agreement may be amended in any manner as may be determined in the judgment of the

Sole LLC Member and the Board to be necessary, desirable or expedient in order to clarify the intention of the parties hereto or to effect or facilitate the purposes and intent of this Merger Agreement; provided that, no such amendment may alter or change the amount or kind of securities to be received in the Merger or alter or change any term of the certificate of incorporation of the Surviving Corporation, in each case without the requisite approval of the HAMCO Stockholders. In addition, at any time before the Effective Time, this Merger Agreement may be terminated and the Merger may be abandoned by the Sole LLC Member and the Board for any reason, notwithstanding approval of this Merger Agreement by the HAMCO Stockholders.

(g) Fair Construction. This Merger Agreement shall be interpreted without regard to which party hereto initiated the drafting process or proposed or drafted particular language and shall not be construed for or against any party hereto by reason of such initiation, proposal or drafting.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Merger Agreement to be executed as of the date first above written.

HOME ASSET MANAGEMENT CORP., a Delaware corporation


By:	/s/ Martin Anderson
	Name: Martin Anderson
	Title: Chairman


MDC REIT HOLDINGS, LLC, a Delaware limited liability company

By:			Home Asset Management Corp., its managing member


			By:		/s/ Martin Anderson
					Name: Martin Anderson
					Title: Chairman


HAMCO STOCKHOLDERS:


CRESCENT/MACH I PARTNERS, L.P.

By:				TCW Asset Management Company, its investment advisor


By:		/s/ John C. Rocchio
		Name: John C. Rocchio
		Title: Managing Director


By:		/s/ James M. Hassett
		Name: James M. Hassett
		Title: Managing Director

TCW/CRESCENT MEZZANINE PARTNERS, L.P.
TCW/CRESCENT MEZZANINE TRUST
TCW/CRESCENT MEZZANINE INVESTMENT PARTNERS, L.P.

By:			TCW/Crescent Mezzanine, L.L.C., its investment manager


By:	/s/ John C. Rocchio
	Name: John C. Rocchio
	Title: Managing Director


TCW SHARED OPPORTUNITY FUND II, L.P.

By:			TCW INVESTMENT MANAGEMENT COMPANY, its investment manager


By:		/s/ John C. Rocchio
		Name: John C. Rocchio
		Title: Managing Director


By:		/s/ James M. Hassett
		Name: James M. Hassett
		Title: Managing Director


ERNEST J. GALLO 1991 FAMILY TRUST


By:		/s/ Joseph E. Gallo
		Name: Joseph E. Gallo
		Title: Trustee

	JOSEPH C. GALLO 1994 FAMILY TRUST


	By:	/s/ Joseph E. Gallo
		Name: Joseph E. Gallo
		Title: Trustee


	STEPHANIE A. GALLO 1990 FAMILY TRUST


	By:	/s/ Joseph E. Gallo
		Name: Joseph E. Gallo
		Title: Trustee


	PK PARTNERS


	By:	/s/ Peter E. Haas, Jr.
		Name: Peter E. Haas, Jr.
		Title: Managing General Partner


	JOSEPHINE B. HAAS REVOCABLE TRUST


	By:	/s/ Josephine B. Haas
		Name: Josephine B. Haas
		Title: Trustee


	KELLER 1991 TRUST


	By:	/s/ George M. Keller
		Name: George M. Keller
		Title: Trustee

	LILLARD PARTNERS


	By:	/s/ John S. Lillard
		Name: John S. Lillard
		Title: Manager


	PLF PARTNERS


	By:	/s/ W. Parlin Lillard, Jr.
		Name: W. Parlin Lillard, Jr.
		Title: General Partner


	SAW ISLAND PARTNERS


	By:	/s/ R. Bruce Mosbacher
		Name: R. Bruce Mosbacher
		Title: General Partner


	/s/ Martin Anderson
	Martin Anderson


	/s/ John M. Robbins
	John M. Robbins


	/s/ Jay M. Fuller
	Jay M. Fuller

Schedule 1

List of Preferred Stockholders

Ernest J. Gallo 1991 Family Trust

c/o Susan Zakarian

600 Yosemite Blvd.

P.O. Box 1130

Modesto, CA 95353

Joseph C. Gallo 1994 Family Trust

c/o Susan Zakarian

600 Yosemite Blvd.

P.O. Box 1130

Modesto, CA 95353

Stephanie A. Gallo 1990 Family Trust

c/o Susan Zakarian

600 Yosemite Blvd.

P.O. Box 1130

Modesto, CA 95353

Josephine B. Haas Revocable Trust

c/o Roy Cuenca

Argonaut Securities

1155 Battery Street

San Francisco, CA 94111

Keller 1991 Trust

c/o George Keller

Chevron Corporation

345 California Street, 30^th Floor

San Francisco, CA 94104

Lillard Partners

c/o John S. Lillard

1340 N. Waukegan Road

Lake Forest, IL 60045

PK Partners

c/o Roy Cuenca

Argonaut Securities

1155 Battery Street

San Francisco, CA 94111

PLF Partners

c/o W. Parlin Lillard, Jr.

533 Middle Road

Del Rey Beach, FL 33483

Saw Island Partners

c/o R. Bruce Mosbacher

2200 Sand Hill Road, Suite 150

Menlo Park, CA 94025

Martin Anderson, Esq.

Goodsill, Anderson, Quinn & Steifel

1099 Alakea Street

Suite 1800

Honolulu, HI 96813

Schedule 2

HAMCO Capital Stock Held by Non-TCW Stockholders

S-2A

Schedule 3

HAMCO Capital Stock Held by TCW Entities

Name	Number of Shares of Class A Common Stock	Warrants to purchase Number of Shares of HAMCO Common Stock
Crescent/Mach I Partners, L.P.	80,000	66,667

TCW/Crescent Mezzanine Investment Partners, L.P.	14,445	12,038

TCW/Crescent Mezzanine Partners, L.P.	528,644	440,537

TCW/Crescent Trust	160,911	134,092

TCW Shared Opportunity Fund II, L.P.	16,000	13,333

S-3A

EX-9 9 a03-3863_1ex9.htm EX-9

EXHIBIT 9

HOME ASSET MANAGEMENT CORP.

AMENDED AND RESTATED STOCKHOLDERS AGREEMENT,

VOTING AGREEMENT AND IRREVOCABLE PROXY

DATED SEPTEMBER 24, 2003

TABLE OF CONTENTS

1.	Certain Definitions
2.	Transferability
	2.1		Restrictions on Transferability
	2.2		Restrictive Legend
	2.3		Notice of Proposed Transfers; Securities Law Compliance
3.	Board of Directors
	3.1		Voting for the Election of Directors
	3.2		Election Of Directors
4.	Sale of Amreit Stock
5.	Issuance of Additional Shares
6.	Miscellaneous
	6.1		Governing Law
	6.2		Successors and Assigns
	6.3		Entire Agreement
	6.4		Notices, etc.
	6.5		Delays or Omissions
	6.6		Counterparts
	6.7		Severability
	6.8		Amendments
	6.9		Jurisdiction
	6.10		Termination


		Exhibit A		Name and Addresses of Stockholders

HOME ASSET MANAGEMENT CORP.
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT,
VOTING AGREEMENT AND IRREVOCABLE PROXY

THIS AMENDED AND RESTATED STOCKHOLDERS AGREEMENT, VOTING AGREEMENT AND IRREVOCABLE PROXY (this “Agreement”) is entered into as of September 24, 2003, by and among Home Asset Management Corp., a Delaware corporation (the “Company”), and the Stockholders listed on Exhibit A hereto, as that Exhibit may be amended from time to time in accordance with the provisions of this Agreement.

RECITALS

WHEREAS, the Company is a party to that certain Stockholders Agreement, Irrevocable Proxy and Voting Agreement, entered into as of February 11, 1997 (the “Original Stockholders Agreement”), by and among the Company and the stockholders named therein, in connection with issuances of certain debt and equity securities of the Company;

WHEREAS, in connection with the proposed Restructuring, the Stockholders desire to amend and restate the Original Stockholders Agreement in accordance with the terms of this Agreement; and

WHEREAS, the Company is contemporaneously entering into the Contribution Agreement, amending the rights and preferences of its Preferred Stock and issuing newly authorized shares of its Class A Common Stock (in each case pursuant to the Contribution Agreement), and entering into an amended and restated securities purchase agreement with respect to the Senior Secured Notes.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants, and conditions set forth in this Agreement, the parties hereby mutually agree as follows:

1. Certain Definitions. As used in this Agreement, the following terms shall have the following respective meanings:

“Affiliate” shall mean, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with such Person.

“Amreit Stock” shall mean all of the shares of the common stock, par value $0.01 per share, of American Residential Investment Trust, Inc., a Maryland corporation, and its successors, owned by the Company and which have been pledged by the Company to secure the Company’s obligations under the Senior Secured Notes.

“Bylaws” shall mean the Company’s bylaws, as amended and/or restated from time to time.

“Certificate” shall mean the Second Amended and Restated Certificate of Incorporation of the Company, as amended and/or restated from time to time.

“Class A Common Stock” shall mean the Company’s Class A common stock, par value $.0001 per share.

“Class B Common Stock” shall mean the Company’s Class B common stock, par value $.0001 per share.

“Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

“Common Stock” shall mean the Company’s common stock, par value $.0001 per share, Class A Common Stock and Class B Common Stock (if any).

“Contribution Agreement” shall mean the Contribution Agreement, made and entered into as of September 24, 2003, by and among TCW, holders of the Preferred Stock, the Company and Holdings.

“Holder” or “Holders” shall mean any Person listed on Exhibit A hereto holding Securities.

“Holdings” shall mean MDC Reit Holdings, LLC, a Delaware limited liability company.

“Merger Agreement” shall mean the Agreement and Plan of Merger to be entered into by and among Holdings, the Company and the other entities or persons signatories thereto following completion of the transactions contemplated by the Contribution Agreement.

“Options” shall mean the options to purchase Common Stock granted by the Company from time to time.

“Non-TCW Stockholders” shall mean any Stockholder other than a TCW Stockholder.

“Person” shall mean an individual, partnership, corporation, limited liability company, trust or unincorporated organization or a government or agency or political subdivision thereof.

“Preferred Stock” shall mean any shares of the Company’s Preferred Stock that may be outstanding from time to time.

“Restructuring” shall mean the transactions contemplated by the Restructuring Documents.

“Restructuring Documents” shall mean the Contribution Agreement, the Merger Agreement and the Securities Purchase Agreement.

“Securities” shall mean Preferred Stock, Common Stock, Warrants, Options and any Common Stock or other securities issued upon exercise of any Warrants or Options, but shall not include Senior Secured Notes.

“Securities Act” shall mean the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

“Securities Purchase Agreement” shall mean the Amended and Restated Securities Purchase Agreement to be entered into by and among the Company as issuer, and TCW, as purchasers, upon completion of the transactions contemplated by the Merger Agreement, as amended, modified or restated from time to time.

“Senior Secured Notes” shall mean the Company’s 8% Senior Secured Notes, as amended, due on December 31, 2004, held by the noteholders under the Securities Purchase Agreement, as amended, modified or restated from time to time, and any securities or other indebtedness issued in exchange, refinancing, replacement, rearrangement, extension, renewal or refunding thereof.

“Series A Preferred Stock” shall mean the Company’s Series A Non-Voting Mandatorily Convertible Preferred Stock, $.0001 par value per share.

“Series B Preferred Stock” shall mean the Company’s Series B Non-Voting Preferred Stock, $.0001 par value per share.

“Stockholders” shall mean each Person who has executed this Agreement and each Person who becomes a party to this Agreement in the future.

“TCW” shall mean, collectively, TCW/Crescent Mezzanine Partners, L.P., a Delaware limited partnership, TCW/Crescent Mezzanine Trust, a trust organized under the laws of Delaware, TCW/Crescent Mezzanine Investment Partners, L.P., a Delaware limited partnership, Crescent/Mach I Partners, L.P., a Delaware limited partnership, TCW Shared Opportunity Fund II, L.P., a Delaware limited partnership, and such Persons to whom TCW Transfers Securities in a manner permitted by this Agreement.

“TCW Stockholders” shall mean TCW and its Affiliates.

“Transfer” shall mean a sale, assignment, encumbrance, gift, pledge, hypothecation or other disposition of Securities or any interest therein.

“Warrants” shall mean warrants to purchase Common Stock issued by the Company from time to time.

2. Transferability.

2.1 Restrictions on Transferability. The Securities shall not be Transferred except upon compliance with the provisions of the Securities Act and this Agreement, and any attempted Transfer in violation of the terms hereof is void ab initio and transfers no right, title or interest in or to any Securities or any interest therein, whether now owned or hereafter acquired, to the purported transferee, buyer, donee, assignee or encumbrance holder. Each party to this Agreement will cause any proposed transferee (other than a transferee of securities sold pursuant to a registration statement or pursuant to Rule 144 or Rule 145(d) under the Securities Act) of the Securities to agree in writing to take and hold such securities subject to the provisions and upon the conditions specified in this Agreement, and no Transfer shall become effective until the transferee delivers, or causes to be delivered, its agreement in writing that such transferee agrees to be legally bound by the terms of this Agreement to the same extent as the transferor.

2.2 Restrictive Legend. Each certificate representing (i) the Securities or (ii) any securities issued in respect of the Securities, that is held by a party hereto shall be stamped or otherwise imprinted with a legend in the following form (in addition to any legend required under applicable state securities laws):

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”). THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE ACT, OR IN COMPLIANCE WITH RULE 144 UNDER THE ACT OR PURSUANT TO ANOTHER EXEMPTION THEREFROM. THE SECURITIES ARE ALSO SUBJECT TO PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND A STOCKHOLDERS AGREEMENT, VOTING AGREEMENT AND IRREVOCABLE PROXY, WHICH CONTAIN RESTRICTIONS ON TRANSFER, A VOTING AGREEMENT AND AN IRREVOCABLE PROXY. COPIES OF THE CERTIFICATE AND SUCH STOCKHOLDERS AGREEMENT MAY BE OBTAINED FROM THE SECRETARY OF THE COMPANY.”

2.3 Notice of Proposed Transfers; Securities Law Compliance. The holder of each certificate representing any of the Securities by acceptance thereof agrees to comply in all respects with the provisions of this Section. Prior to any proposed Transfer, unless there is in effect a registration statement under the Securities Act covering the proposed Transfer, the Holder thereof shall give written notice to the Company of such Holder’s intention to effect such Transfer. Each such notice shall describe the manner and circumstances of the proposed Transfer in sufficient detail, and, if requested by the Company, shall be accompanied by either (i) a written opinion of legal counsel (who may be internal counsel) who shall be reasonably satisfactory to the Company addressed to the Company and reasonably satisfactory in form and substance to the Company’s counsel, to the effect that the proposed Transfer may be effected without registration under the Securities Act or registration or qualification under any applicable state securities laws, (ii) a “no action” letter from the staff of the Commission to the effect that the distribution of such

securities without registration will not result in recommendation by the staff of the Commission that action be taken with respect thereto, or (iii) such other showing that may be reasonably satisfactory to legal counsel to the Company, whereupon the holder of such Securities shall be entitled to Transfer such Securities in accordance with the terms of the notice delivered by the holder to the Company. Notwithstanding the foregoing, the requirements of clauses (i), (ii), or (iii) above need not be satisfied with respect to the following transactions: (A) transactions in compliance with Rule 144 under the Securities Act so long as the Company is furnished with satisfactory evidence of compliance with such Rule; (B) Transfers by a Holder which is a partnership or limited liability company on a pro rata basis in accordance with the terms of the partnership or limited liability company operating agreement to a general partner, limited partner or member of such partnership or limited liability company or a retired partner of such partnership or member of such limited liability company who retires after the date hereof, or to the estate of any such partner, member or retired partner or member; (C) Transfers by a Holder which is a corporation to any wholly-owned subsidiary or parent of such corporation that wholly owns such corporation. In addition, Transfers made by a Holder that is a state sponsored employee benefit plan to a successor trust or fiduciary or pursuant to a statutory reconstitution shall be expressly permitted, and the requirements of clauses (i), (ii) and (iii) of this Section need not be satisfied.

3. Board of Directors.

3.1 Voting for the Election of Directors. Each of the Stockholders agrees, during the term of this Agreement and any extensions thereof, to hold all of the shares of Common Stock registered in their respective names (and any securities of the Company issued with respect to, or in exchange or substitution therefor or upon conversion thereof) subject to, and to vote such Common Stock in accordance with, the provisions of this Agreement in connection with the election of directors.

3.2 Election Of Directors. The Company’s Certificate or Bylaws shall at all times authorize a Board of Directors consisting of three to five members. The members of the Board of Directors shall be nominated, elected, removed, and replaced in the following manner:

(a) Selection. Two directors shall be selected by TCW so long as TCW holds any shares of Common Stock (collectively, the “TCW Directors”). One director shall be selected by the holders of a majority of the outstanding Series A Preferred Stock and Series B Preferred Stock, voting together as single class, in accordance with the procedures set forth in the Certificate. Directors selected in accordance with the foregoing can be removed or replaced only by the vote or consent of the same group of Stockholders that selected such directors. The TCW Directors shall be appointed as members of the executive committee of the Board of Directors or any committee performing the equivalent functions of an executive committee. The Company will reimburse the TCW Directors (or an observer appointed by TCW if no representative of TCW is then serving as a director) for reasonable expenses incurred in attending meetings of the Board of Directors or committees thereof.

(b) Election. Each of the Stockholders hereby agrees (i) that such Stockholder will vote his, her or its shares of Common Stock of the Company to elect those directors selected according to (a) above and (ii) that Martin Anderson, John Rocchio and Tyrone Chang shall be the directors of the Company as of the closing of the transactions contemplated by

the Contribution Agreement.

(c) The obligations of the Company under this Section 3.2, if any, other than the last sentence of Section 3.2 (a), shall be subject to compliance by the Company and the Board of Directors with their fiduciary duties.

4. Sale of Amreit Stock.

(a) TCW may, in its sole and absolute discretion, at any time or from time to time, determine that the Company shall sell, transfer or otherwise dispose of all or any portion of the Amreit Stock, in one or more transactions and upon terms and conditions that TCW may determine in its sole discretion (each such sale, transfer or disposition, an “Amreit Stock Transaction”). Upon the communication in writing of any such determination by TCW to the Company, the Company shall use its reasonable best efforts to sell, transfer or otherwise dispose of such Amreit Stock in the manner, upon the terms and subject to the conditions determined by TCW.

(b) The Stockholders each agree that any sale of Amreit Stock pursuant to Section 4(a) may be taken without any further action of, or consent by, the Stockholders and that any such transaction shall be deemed to have already been approved by the Stockholders. In order to implement the agreement in this Section 4, each of the Non-TCW Stockholders:

(i) hereby agrees, by execution of this Agreement, to, if requested by the Company or TCW, vote or execute and deliver written consents, in respect of all Securities now owned, hereafter registered in his, her or its name or hereafter acquired, in favor of any such Amreit Stock Transaction. Each of the Non-TCW Stockholders affirms that its agreement to vote for the approval of each Amreit Stock Transaction is given as a condition of this Agreement and the other agreements between the parties hereto and as such is coupled with an interest and is irrevocable. This voting agreement shall remain in full force and effect and be enforceable against any donee, transferee or assignee of the Securities that is required to become a party to this Agreement. This voting agreement shall remain in full force and effect throughout the time that the Amreit Stock is owned by the Company. It is understood that this voting agreement relates solely to Amreit Stock Transactions and does not constitute the agreement to vote or consent as to any other matters; and

(ii) hereby grants to TCW, by execution of this Agreement, an irrevocable proxy pursuant to the provisions of Section 212 of the Delaware General Corporation Law to vote, or to execute and deliver written consents or otherwise act with respect to, all Securities now owned, hereafter registered in his, her or its name or hereafter acquired as fully, to the same extent and with the same effect as such Stockholder might or could do under any applicable laws or regulations governing the rights and powers of a Delaware corporation in connection with any such Amreit Stock Transaction. Each of the Non-TCW Stockholders affirms that this proxy is given as a condition of this Agreement and the other agreements between the parties hereto and as such is

coupled with an interest and is irrevocable. This proxy shall remain in full force and effect and be enforceable against any donee, transferee or assignee of the Securities that is required to become a party to this Agreement. This proxy shall remain in full force and effect throughout the time that that the Amreit Stock is owned by the Company. It is understood that this proxy relates solely to Amreit Stock Transactions and does not constitute the grant of any rights to vote as to any other matters.

5. Issuance of Additional Shares.

The Company shall require any person to whom it issues shares of Preferred Stock or Common Stock to become a party to this Agreement and agree to be bound by all the provisions hereof. The parties hereto agree that any such additional purchaser shall become a party hereto, without further consent of the parties, by signing this Agreement and being added to the list of parties on Exhibit A hereto.

6. Miscellaneous.

6.1 Governing Law. The validity, performance and enforcement of this Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of laws provisions thereof.

6.2 Successors and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto.

6.3 Entire Agreement. This Agreement and each of the agreements referenced herein, constitute the full and entire understanding and agreement between the parties with regard to the subject matter hereof and supersede all prior oral or written (and all contemporaneous oral) agreements or understandings with respect to the subject matter hereof.

6.4 Notices, etc. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, return receipt requested, postage prepaid, or otherwise delivered by hand, messenger or facsimile transmission, addressed: (a) if to a party listed on Exhibit A or a transferee of such party, at such party’s address as set forth on Exhibit A, or at such other address as such party or its transferee shall have furnished to the Company in writing, or (b) if to the Company:

if to the Company		Home Asset Management Corp. 11100 Santa Monica Boulevard, Suite 2000 Los Angeles, California 90025
		Phone: (310) 235-5927
		Fax: (310) 235-5967
		Attention: Joe Keenan

with a copy to (which
shall not constitute

Home Asset Management Corp.
c/o Martin Anderson, Esq.

notice)	Goodsill, Anderson, Quinn & Steifel 1099 Alakea Street, Suite 1800 Honolulu, Hawaii 96813
	Phone:	808-547-5660
	Fax:	808-547-5880


with a copy to (which shall not constitute notice)	TCW/Crescent Mezzanine Partners, L.P. 11100 Santa Monica Boulevard, Suite 2000 Los Angeles, California 90025
	Phone: (310) 235-5982
	Fax: (310) 235-5967
	Attention: Tyrone Chang

or such other address as the Company shall have furnished to the parties listed on Exhibit A in writing. Notices to Stockholders shall be sent to the address of such Stockholder on the books and records of the Company. Each such notice or other communication shall for all purposes of this Agreement be treated as effective or as having been given when delivered, if delivered by hand or by messenger (or overnight courier), 24 hours after confirmed receipt if sent by facsimile transmission or at the earlier of its receipt or on the fifth day after mailing as aforesaid.

6.5 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party hereto upon any breach or default of the Company under this agreement, shall impair any such right, power or remedy of such holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereunder occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to any party, shall be cumulative and not alternative.

6.6 Counterparts. This Agreement may be executed in any number of counterparts, each of which may be executed by less than all of the parties hereto, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

6.7 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

6.8 Amendments. The provisions of this Agreement may be amended at any time and from time to time, and particular provisions of this Agreement may be waived, with and only with an agreement or consent in writing signed by the Company and by the holders of at least a majority of the Securities (a) held by TCW and (b) held by the other Stockholders.

6.9 Jurisdiction. Each party hereto (a) consents and irrevocably submits, in any legal action or proceeding relating to this Agreement, to the jurisdiction of the courts of the State of Delaware and of the courts of the United States for a judicial district within the territorial limits of the State of Delaware, and consents that any such action or proceeding may be brought in such courts, (b) consents and irrevocably submits to the venue of such action or proceeding in Delaware (or such judicial district of a court of the United States as will include the same), and waives any objection that it may now or hereafter have to the venue of such action or proceeding in any such courts or that such action or proceeding was brought in an inconvenient forum and (c) consents that service of legal process in any such action or proceeding may be made upon it by certified mail, return receipt requested, postage prepaid, to such party at its address specified in Section 6.4; provided that nothing herein shall prevent any Stockholder from bringing any action in any other jurisdiction; provided, further, that the State Treasurer of Michigan as Custodian of various retirement systems shall not be subject to this Section 6.9.

6.10 Termination. The provisions of this Agreement shall terminate upon the tenth anniversary of the date of this Agreement.

* * * *

[Signature Pages Follow]

IN WITNESS WHEREOF, the foregoing Amended and Restated Stockholders Agreement, Voting Agreement and Irrevocable Proxy is hereby executed as of the date first above written.

HOME ASSET MANAGEMENT CORP.


By:	/s/ Martin Anderson
Name: Martin Anderson
Title: Chairman


ERNEST J. GALLO 1991 FAMILY TRUST


By:	/s/ Joseph E. Gallo
Name:		Joseph E. Gallo
Title:		Trustee


JOSEPH C. GALLO 1994 FAMILY TRUST


By:	/s/ Joseph E. Gallo
Name:		Joseph E. Gallo
Title:		Trustee


STEPHANIE A. GALLO 1990 FAMILY TRUST


By:	/s/ Joseph E. Gallo
Name:		Joseph E. Gallo
Title:		Trustee


PK PARTNERS


By:	/s/ Peter E. Haas, Hr.
Name:		Peter E. Haas, Jr.
Title:		Managing General Partner

JOSEPHINE B. HAAS REVOCABLE TRUST


By:	/s/ Josephine B. Haas
Name:		Josephine B. Haas
Title:		Trustee


KELLER 1991 TRUST


By:	/s/ George M. Keller
Name:		George M. Keller
Title:		Trustee


LILLARD PARTNERS


By:	/s/ John S. Lillard
Name:		John S. Lillard
Title:		Manager


PLF PARTNERS


By:	/s/ W. Parlin Lillard, Jr.
Name: W. Parlin Lillard, Jr.
Title: General Partner


SAW ISLAND PARTNERS


By:	/s/ R. Bruce Mosbacher
Name:		R. Bruce Mosbacher
Title:		General Partner

/s/ Martin Anderson
Martin Anderson


CRESCENT/MACH I PARTNERS, L.P.

By:		TCW Asset Management Company, its investment advisor


By:	/s/ John C. Rocchio
Name: John C. Rocchio
Title: Managing Director


By:	/s/ James M. Hassett
Name: James M. Hassett
Title: Managing Director


TCW/CRESCENT MEZZANINE PARTNERS, L.P.
TCW/CRESCENT MEZZANINE TRUST
TCW/CRESCENT MEZZANINE INVESTMENT PARTNERS, L.P.

By:		TCW/Crescent Mezzanine, L.L.C., its investment manager


By:	/s/ John C. Rocchio
Name: John C. Rocchio
Title: Managing Director

TCW SHARED OPPORTUNITY FUND II, L.P.

By:		TCW INVESTMENT MANAGEMENT COMPANY, its investment manager


By:	/s/ John C. Rocchio
Name: John C. Rocchio
Title: Managing Director


By:	/s/ James M. Hassett
Name: James M. Hassett
Title: Managing Director

EXHIBIT A

HOME ASSET MANAGEMENT CORP.

NAMES AND ADDRESSES OF STOCKHOLDERS

Ernest J. Gallo 1991 Family Trust

c/o Susan Zakarian

600 Yosemite Blvd.

P.O. Box 1130

Modesto, CA 95353

Joseph C. Gallo 1994 Family Trust

c/o Susan Zakarian

600 Yosemite Blvd.

P.O. Box 1130

Modesto, CA 95353

Stephanie A. Gallo 1990 Family Trust

c/o Susan Zakarian

600 Yosemite Blvd

P.O. Box 1130

Modesto, CA 95353

Josephine B. Haas Revocable Trust

c/o Roy Cuenca

Argonaut Securities

1155 Battery Street

San Francisco, CA 94111

Keller 1991 Trust

c/o George Keller

Chevron Corporation

345 California Street, 30^th Floor

San Francisco, CA 94104

Lillard Partners

c/o John S. Lillard

1340 N. Waukegan Road

Lake Forest, IL 60045

A-1

PK Partners

c/o Roy Cuenca

Argonaut Securities

1155 Battery Street

San Francisco, CA 94111

PLF Partners

c/o W. Parlin Lillard, Jr.

533 Middle Road

Del Rey Beach, FL 33483

Saw Island Partners

c/o R. Bruce Mosbacher

2200 Sand Hill Road, Suite 150

Menlo Park, CA 94025

Martin Anderson, Esq.

Goodsill, Anderson, Quinn & Steifel

1099 Alakea Street

Suite 1800

Honolulu, HI 96813

Crescent/Mach I Partners, L.P.

11100 Santa Monica Blvd.

Suite 2000

Los Angeles, CA 90025

TCW/Crescent Mezzanine Investment Partners, L.P.

11100 Santa Monica Blvd.

Suite 2000

Los Angeles, CA 90025

TCW/Crescent Mezzanine Partners, L.P.

11100 Santa Monica Blvd.

Suite 2000

Los Angeles, CA 90025

A-2

TCW/Crescent Mezzanine Trust

11100 Santa Monica Blvd.

Suite 2000

Los Angeles, CA 90025

TCW Shared Opportunity Fund II, L.P.

11100 Santa Monica Blvd.

Suite 2000

Los Angeles, CA 90025

A-3

EX-10 10 a03-3863_1ex10.htm EX-10

Exhibit 10

PLEDGE AGREEMENT
(By MDC Reit Holdings, LLC)

This Pledge Agreement dated as of February 11, 1997 (this “Agreement”) is entered into by MDC Reit Holdings, LLC, a Delaware limited liability company (the “Company”), to and in favor of Bankers Trust Company, a New York banking corporation, as collateral agent (the “Collateral Agent”), for the benefit of the Holders (as defined below). Capitalized terms used herein and not defined herein shall have the meaning set forth in the Securities Purchase Agreement (defined below).

1. Security for Notes. This Agreement is made by the Company in favor of the Collateral Agent pursuant to the Securities Purchase Agreement dated February 11, 1997 (as amended, restated, supplemented or otherwise modified from time to time in accordance with the provisions thereof, the “Securities Purchase Agreement”) by and among Home Asset Management Corp., a Delaware corporation (the “Issuer”), the Company, American Residential Investment Trust, Inc., a Maryland corporation (“Reit”), and each of the purchasers listed on the signature pages thereto (the “Purchasers”), providing, among other things, for the purchase by the Purchasers of $25,000,000 aggregate principal amount of the Issuer’s 12% Senior Secured Notes due February 11, 2002 (the “Notes”), and in order to induce the Purchasers to enter into the Securities Purchase Agreement and to purchase the Notes thereunder. The agreements of and pledge by the Company hereunder are in favor of the Collateral Agent for the benefit of the Holders, to secure (a) the obligations of the Company, in its capacity as Guarantor pursuant to Section 10 of the Securities Purchase Agreement, and (b) the due performance of and compliance by the Company with all the terms of and all the obligations of the Company to the Holders under the Subsidiary Guaranty of the Company (the “Guaranty”) and the Securities Purchase Agreement (all the foregoing contained in subclauses (a) and (b) hereinafter referred to as the “Secured Obligations”). For the purposes hereof, the term “Holder” or “Holders” shall mean each Purchaser (so long as it holds any of the Notes) and any other holder of the Notes. The Purchasers have entered into a Collateral Agency Agreement dated as of February 11, 1997 with the Collateral Agent (as amended, restated, supplemented or otherwise modified from time to time in accordance with the provisions thereof, the “Collateral Agency Agreement”) to act as their agent to take possession of and hold the Pledged Security on their behalf.

2. Pledge of Stock. To secure the prompt and complete payment and performance in full of the Secured Obligations, the Company hereby pledges and grants to the Collateral Agent, for the ratable benefit of each Holder, a security interest in, and transfers and delivers to the Collateral Agent, all shares of capital stock listed on Schedule 1 hereto (the “Pledged Stock”), together with (i) appropriate undated stock powers duly executed in blank and all requisite Federal and state stock transfer tax stamps, if any, and (ii) subject to the provisions of Section 6 hereof, all income and profits thereof, all distributions thereon, all other proceeds thereof and all rights and privileges pertaining thereto.

3. Pledged Security. All property at any time pledged with the Collateral Agent hereunder or in which the Collateral Agent is granted a security interest hereunder (whether described herein or not), and (subject to the provisions of Section 6 hereof) all income therefrom and proceeds thereof, are herein collectively sometimes referred to as the “Pledged Security.”

4. Stock Dividends, Distributions, etc. If, while this Agreement is in effect, the Company shall become entitled to receive or shall receive any stock certificate or other security in respect of the Pledged Stock (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital, or issued in

connection with any reorganization or merger), or any option or rights with respect thereto, whether as an addition to, in substitution of, or in exchange for any shares of any Pledged Stock, or otherwise, the Company agrees to accept the same as the Collateral Agent’s agent and to hold the same in trust on behalf of the Collateral Agent for the benefit of the Holders and to deliver the same forthwith to the Collateral Agent in the exact form received, with the endorsement of the Company when necessary and/or the appropriate undated stock, bond or other appropriate powers duly executed in blank, to be held by the Collateral Agent, for the benefit of the Holders, subject to the terms hereof, as additional Pledged Security for the Secured Obligations. Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of the issuer thereof shall be paid over to the Collateral Agent to be held by it in trust as additional Pledged Security for the Secured Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of the issuer thereof or pursuant to the reorganization thereof, the property so distributed shall, subject to the provisions of Section 6, be delivered to the Collateral Agent to be held by it as additional Pledged Security for the Secured Obligations. All sums of money and property so paid or distributed in respect of the Pledged Stock which are received by the Company shall, until paid or delivered to the Collateral Agent, be held by the Company in trust as additional Pledged Security for the Secured Obligations.

5. Voting, etc., While No Event of Default. Unless an Event of Default shall have occurred and be continuing, the Company shall be entitled to vote any and all shares of the Pledged Stock and to give consents, waivers and ratifications in respect thereof, and neither the Collateral Agent nor the Holders shall be entitled to transfer all or any part of the Pledged Stock into its name or the name of its nominee or nominees, provided that no vote shall be cast, no consent, waiver or ratification shall be given and no action shall be taken by the Company which would violate or be inconsistent with any of the terms of the Securities Purchase Agreement, the Notes or this Agreement, or which would have the effect of impairing the position or interests of the Company, the Collateral Agent or any Holder. All such rights of the Company to vote and to give consents, waivers and ratifications shall cease in case an Event of Default or a Default shall occur and be continuing.

6. Dividends and Other Distributions. Unless an Event of Default shall have occurred and be continuing, all dividends and other distributions payable in respect of the Pledged Stock shall be paid to the Company. In case an Event of Default shall have occurred and be continuing, all such dividends and other distributions and payments shall be paid to the Collateral Agent for the ratable benefit of the Holders.

7. Remedies in Case of Event of Default. In case an Event of Default shall have occurred and be continuing, the Collateral Agent, for and on behalf of the Holders, subject to the provisions of Section 7 of the Securities Purchase Agreement and the Collateral Agency Agreement, shall be entitled to exercise all of the rights, powers and remedies (whether vested in the Collateral Agent by this Agreement, by law, in equity, by statute or otherwise) for the protection and enforcement of the Collateral Agent’s rights (and the rights of the Holders) in respect of the Pledged Security, and the Collateral Agent shall be entitled, without limitation:

(a) to transfer all or any part of the Pledged Security into the name of the Collateral Agent (for the benefit of the Holders) or into the name of any Holder or Holders or the name of their respective nominee or nominees;

(b) to vote all or any part of the Pledged Security (whether or not transferred into the names of the Holders or the Collateral Agent) and give all consents, waivers and ratifications in respect of the Pledged Security and otherwise act with respect thereto as though the Collateral Agent or the Holders, as the case may be, were the outright owner thereof; or

(c) at any time or from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Pledged Security, or any interest therein, at any public or private sale, without demand of performance, advertisement or notice of intention to sell or of the time or place of sale or adjournment thereof or to redeem or otherwise (all of which are hereby waived by the Company), for cash, on credit or for other property, for immediate or future delivery without any assumption of credit risk and for such price or prices and on such terms as the Collateral Agent or the Holder in its or their sole and absolute discretion may determine, provided that at least 10 days notice (or such greater notice as may be required by applicable law) of the time and place of any such sale shall be given to the Company.

All sums received by the Collateral Agent hereunder or in respect of the Pledged Security shall (except as otherwise provided in Section 9 hereof) be applied by the Collateral Agent as follows:

(a) first, to the payment of all proper costs incurred by the Holders and/or the Collateral Agent in the collection thereof (including, without limitation, stamp or other taxes in respect of the transfer or sale of any Pledged Security and the reasonable compensation, expenses and disbursements of the Holders and/or the Collateral Agent and their/its counsel);

(b) second, to the payment of the whole amount then due and payable on the Notes for principal, premium, if any, and interest, and, in case there shall be insufficient moneys to pay in full the whole amount so due and payable, then, first, to the payment of all amounts of interest at the time due and payable on the Notes, without preference or priority of any amount of interest over any other amount of interest, or of any Note over any other Note, second, to the payment of all amounts of principal at the time due and payable on the Notes, without preference or priority of any amount of principal over any other amount of principal, or of any Note over any other Note, and third, to the payment of all amount of premium, if any, at the time due and payable on the Notes, without preference or priority of any amount of premium, if any, over any other amount of premium, or of any Note over any other Note, all such payments of principal, premium, if any, and interest to be made ratably to the persons entitled thereto without discrimination or preference;

(c) third, to the payment of all amounts then due and payable by the Company in respect of its obligations under the Guaranty and the Securities Purchase Agreement; and

(d) fourth, any balance shall be paid to the Company or to whomsoever may be entitled thereto or as a court of competent jurisdiction may direct, provided that in the event that all of the conditions to the termination of this Agreement pursuant to Section 13 shall not have been fulfilled, such balance shall be held and applied from time to time as provided in subdivisions (a), (b) and (c) of this Section 7 until all such conditions shall have been fulfilled.

8. Representations, Warranties and Covenants of the Company. The Company represents, warrants and agrees that:

(a) it is the legal, record and beneficial owner of, and has good and marketable title to, the Pledged Stock described in Schedule 1 hereto, subject to no Lien except the security interest created by this Agreement;

(b) Schedule 1 truly and accurately sets forth the number of the issued and outstanding shares owned by the Company of the capital stock of each corporation listed thereon;

(c) all the shares of the Pledged Stock have been duly and validly issued, are fully paid and non-assessable, and the Company has no other interest in Reit other than such Pledged Stock;

(d) the pledge, assignment and delivery of the Pledged Security pursuant to this Agreement creates a valid perfected security interest in the Pledged Security, and the proceeds thereof, subject to no prior Lien or to any agreement purporting to grant to any third party a security interest in the property or assets of the Company which would include the Pledged Security;

(e) the Company’s chief executive office and chief place of business is located at 445 Marine View, Suite 130, Del Mar, California 92014;

(f) the Company will not change its chief executive office nor its chief place of business from the location specified in clause (e) of this Section 8 without giving 60 days’ prior written notice thereof to the Collateral Agent;

(g) none of the Pledged Stock constitutes margin stock, as defined in Regulation U of the Board of Governors of the Federal Reserve System; and

(h) the Company owns no share of the capital stock of any corporation other than the Pledged Stock.

The Company covenants and agrees that it will defend the Collateral Agent’s and, to the extent applicable, the Holders’ right, title and security interest in and to the Pledged Security and the proceeds thereof against the claims and demands of all Persons whomsoever, and the Company covenants and agrees that it will have like title to and right to pledge any other property at any time hereafter pledged to the Collateral Agent as Pledged Security hereunder and will likewise defend the Collateral Agent’s and the Holders’ right thereto and security interest therein.

9. No Disposition, etc. Without the prior written consent of the Collateral Agent and the Holders of a majority in aggregate principal amount of outstanding Notes, the Company agrees that it will not sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Pledged Security, nor will it create, incur or permit to exist any Lien with respect to any of the Pledged Security, or any interest therein, or any proceeds thereof, except for the security interest provided for by this Agreement.

10. Registration Rights. (a) If the Collateral Agent or the Holders shall determine to exercise the right to sell any or all of the Pledged Stock pursuant to Section 7 hereof, and if in the opinion of counsel for the Collateral Agent or the Holders it is necessary, or if in the opinion of the Collateral Agent or the Holders it is advisable, to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act of 1933, as amended (the “Securities Act”), the Company will cause each issuing corporation to execute and deliver, and cause the directors and officers of each thereof to execute and deliver, all at the Company’s expense, all such instruments and documents, and to do or cause to be done all such other acts and things as may be necessary or, in the opinion of the Collateral Agent or the Holders, advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act and to use its best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and to make all amendments or supplements thereto and/or to the related prospectus which, in the opinion of the Collateral Agent or the Holders, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. The Company agrees to use its best efforts to cause each such issuing corporation to comply with the provisions of the securities or “Blue Sky” laws of any jurisdiction which the Collateral Agent or any Holder shall designate and to cause each such issuing corporation to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act.

(b) The Company recognizes that the Collateral Agent or the Holders may be unable, or find it undesirable, to effect a public sale of any or all the Pledged Stock by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, but may be compelled or desire to resort to one or more private sales thereof to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof in violation of the Securities Act. The Company acknowledges and agrees that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale, but, notwithstanding such circumstances, such private sale shall be deemed to have been made in a commercially reasonable manner. The Collateral Agent and the Holders shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the issuing corporation of such securities to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if the issuing corporation would agree to do so.

(c) The Company further agrees to do or cause to be done all such other acts and things as may be necessary to make such sale or sales of any portion or all of the Pledged Stock valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at the Company’s expense. The Company further agrees that a breach of any of the covenants contained in this Section 10 will cause irreparable injury to the Holders, that the Collateral Agent and the Holders have no adequate remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this Section 10 shall be specifically enforceable against the Company, and the Company hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Securities Purchase Agreement.

11. Remedies Cumulative, etc. Each right, power and remedy of the Holders provided in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise. The exercise or partial exercise by the Holders or the Collateral Agent of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by the Holders or the Collateral Agent of all such other rights, powers or remedies, and no failure or delay on the part of the Holders or the Collateral Agent to exercise any such right, power or remedy shall operate as a waiver thereof.

12. The Company’s Obligations Absolute, etc. The obligations of the Company under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, discharged or in any way unpaired by any circumstance whatsoever, including without limitation: (a) any amendment or modification of the Notes, the Securities Purchase Agreement, the Guaranty, or any instrument provided for herein or therein, or any assignment, transfer or other disposition of any thereof; (b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such instrument or any exercise or non-exercise of any right, remedy, power or privilege under or in respect of any such instrument or this Agreement; (c) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or similar proceeding with respect to the Company or any of its properties or creditors; or (d) any limitation on the Company’s liability or obligations under any such instrument or any invalidity or unenforceability, in whole or in part, of any such instrument or any term thereof; whether or not the Company shall have notice of knowledge or any of the foregoing.

13. Termination. This Agreement shall terminate upon the receipt by the Collateral Agent of written notice from the Majority Holders of the indefeasible payment (or prepayment) in full of the principal of and the premium, if any, and interest on all the Notes, in accordance with the terms of the Securities Purchase Agreement and the Notes, and the indefeasible payment of all other amounts then owing to the Collateral Agent or the Holders hereunder, under the Securities Purchase Agreement, the Notes and the Guaranty. At the time of such termination, the Collateral Agent, at the request and expense of the Company, will execute and deliver to the Company a proper instrument or instruments provided to the Collateral Agent acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to the Company such of the Pledged Security as has not yet theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any moneys at the time held by the Collateral Agent or the Holders hereunder.

14. Further Assurances, etc. The Company, at its expense, will duly execute, acknowledge and deliver all such instruments and take all such action as the Collateral Agent may request in order further to effectuate the purposes of this Agreement and to carry out the terms hereof. The Company, at its expense, will at all times cause this Agreement (or a proper notice or statement in respect hereof) to be duly recorded, published and filed and rerecorded, republished and refiled in such manner and in such places, if any, and will pay or cause to be paid all such recording, filing and other taxes, fees and charges, if any, and will comply with all such statutes and regulations, if any, as may be required by law in order to establish, perfect, preserve and protect the rights and security interest of the Collateral Agent (for the ratable benefit of the Holders) hereunder.

15. Notices. All communications provided for hereunder shall be sent by first-class mail addressed, (a) if to the Collateral Agent, at its offices at Four Albany Street, New York, New York 10006, Attention: Corporate Trust and Agency Group - Capital Market Services, and if to any successor Collateral Agent, at its address as set forth in the instrument appointing such successor Collateral Agent, (b) if to the Company, at its offices at 445 Marine View, Suite 130, Del Mar, California 92014, Attention: Jay M. Fuller, or at such other address, or to the attention of such other officer, as the Company shall have furnished in writing to the Collateral Agent, and (c) if to any Holder, at the address set forth in Section 11.1 of the Securities Purchase Agreement or such other address as such Holder shall have furnished in writing to the Company.

16. Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term hereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Collateral Agent (acting at the direction of the Holders of at least a majority in aggregate principal amount of the Notes at the time outstanding), provided that no such amendment or waiver shall, without the prior written consent of the Collateral Agent (acting at the direction of the Holders of all of the Notes at the time outstanding), (a) reduce the aforesaid percentage of the principal amount of the Holders which are required to consent to any such amendment or waiver, or (b) adversely affect the status of the security interest created by this Agreement as a perfected security interest in the Pledged Collateral as security for the Notes. Any amendment or waiver effected in accordance with this Section 15 shall be binding upon each the Company and the Collateral Agent.

17. Choice of Law and Jurisdiction. THIS AGREEMENT AND ALL ISSUES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE PLEDGED SECURITY, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEEDING AGAINST THE COMPANY IN ANY OTHER JURISDICTION.

18. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

19. Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

20. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto, regardless of whether so expressed, and, in particular, shall inure to the benefit of and be enforceable by the Collateral Agent for the benefit of the Holders, and to the extent applicable, to the Holders in their individual capacities.

21. Entire Agreement. This Agreement embodies the entire agreement and understanding between the Collateral Agent and the Company as to the subject matter hereof and supersedes all prior agreements and understandings relating to the subject matter hereof.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their respective officers thereunto duly authorized as of the date first above written.

MDC REIT HOLDINGS LLC

By:	HOME ASSET MANAGEMENT CORP., its Managing Member


	By:		/s/ David E. De Leeuw
			David E. De Leeuw
			President


BANKERS TRUST COMPANY, as Collateral Agent


By:		/s/ Kevin Weeks
Name:		KEVIN WEEKS
Title:		ASSISTANT TREASURER

SCHEDULE 1

PLEDGED SECURITY

2,000,000 Shares of Common Stock, par value $0.01 per share, of American Residential Investments, Inc., a Maryland corporation, represented by Certificate Number C-1.

EX-11 11 a03-3863_1ex11.htm EX-11

EXHIBIT 11

ASSUMPTION AGREEMENT AND
AMENDMENT NO. 1 TO PLEDGE AGREEMENT

This ASSUMPTION AGREEMENT AND AMENDMENT NO. 1 TO PLEDGE AGREEMENT (this “Agreement”) is made on this 25^th day of September, 2003, by and between Home Asset Management Corp., a Delaware corporation (“HAMCO”), and Deutsche Bank Trust Company Americas, a New York banking corporation formerly known as Bankers Trust Company, as collateral agent (the “Collateral Agent”) under the Pledge Agreement, dated as of February 11, 1997, by and between MDC Reit Holdings, LLC, a Delaware limited liability company (“Holdings”), and the Collateral Agent (the “Pledge Agreement”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Pledge Agreement.

WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of September 25, 2003, by and among HAMCO, Holdings, Crescent/Mach I Partners, L.P., a Delaware limited partnership, TCW/Crescent Mezzanine Investment Partners, L.P., a Delaware limited partnership, TCW/Crescent Mezzanine Partners, L.P., a Delaware limited partnership, TCW/Crescent Mezzanine Trust, a trust organized under the laws of Delaware, and TCW Shared Opportunity Fund II, L.P., a Delaware limited partnership, and the other entities and persons signatories thereto (the “Merger Agreement”), Holdings was merged with and into HAMCO with HAMCO as the surviving corporation;

WHEREAS, pursuant to Section 4 of the Merger Agreement, HAMCO succeeded (i) to all of the assets, rights, powers and property of Holdings and (ii) to all rights, privileges, powers and franchises of a public and private nature of Holdings, subject to all of the debts, liabilities and obligations of Holdings in the same manner as if HAMCO had itself incurred them, including, without limitation, Holdings’ obligations under the Pledge Agreement, and as a result, HAMCO is the successor party in interest to Holdings with respect to the Pledge Agreement; and

WHEREAS, HAMCO and the Collateral Agent desire to amend the Pledge Agreement on the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I
ASSUMPTION OF OBLIGATIONS AND ASSIGNMENT OF RIGHTS

HAMCO (i) hereby assumes and unconditionally agrees to perform all of Holdings’ obligations under the Pledge Agreement and to be bound by all terms, provisions and covenants of the Pledge Agreement, and (ii) shall be entitled to any and all rights and other benefits of Holdings under the Pledge Agreement, in each case, as if HAMCO had been the original party to the Pledge Agreement. The Collateral Agent

hereby consents and agrees to the foregoing assumption of obligations and assignment of rights.

ARTICLE II
AMENDMENTS

2.1 Amendments to the Pledge Agreement.

(a) Notwithstanding anything to the contrary in the Pledge Agreement, all references to “Notes” in the Pledge Agreement shall, from and after the date hereof, mean the 8% Senior Secured Notes due December 31, 2004 (as amended, modified or restated from time to time).

(b) Notwithstanding anything to the contrary in the Pledge Agreement, all references to “Secured Obligations” in the Pledge Agreement shall, from and after the date hereof, mean all of the obligations of the Issuer under the Securities Purchase Agreement.

(d) Section 8(a) shall be amended and restated in its entirety to read as follows:

“(a) it is the legal, record and beneficial owner of, and has good and marketable title to, the Pledged Stock described in Schedule 1 hereto, subject to no Lien except the security interest created by this Agreement and the encumbrances under that certain Amended and Restated Stockholders Agreement, Voting Agreement and Irrevocable Proxy, entered into on September 24, 2003, between the Company and the stockholders of the Company listed on Exhibit A thereto (as may be amended, modified or restated from time to time).”

(e) Section 8(e) shall be amended and restated in its entirety to read as follows:

“(e) the Company’s chief executive office and chief place of business is located at 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, California 90025;”

(f) Section 9 of the Pledge Agreement shall be amended and restated in its entirety to read as follows:

“9. No Disposition, etc. Without the prior written consent of the Collateral Agent and the Holders of a majority in aggregate principal amount of outstanding Notes, the Company agrees that it will not sell, assign, transfer, exchange (each of the following, a “Disposition”), or otherwise Dispose of, or grant any option with respect to, the Pledged Security, nor will it create, incur or permit to exist any Lien with respect to

any of the Pledged Security, or any interest therein, or any proceeds thereof; provided, however, that this Section 9 shall not apply to (a) any security interest provided for by this Agreement and (b) any Disposition effected pursuant to the provisions of the Amended and Restated Stockholders Agreement, entered into as of September 24, 2003, by and among the Issuer and the stockholders listed on Exhibit A thereto, as it may be amended, modified or restated from time to time.”

(g) The first sentence of Section 10(a) of the Pledge Agreement shall be amended and restated in its entirety as follows:

“(a) If the Collateral Agent or the Holders shall determine to exercise the right to sell any or all of the Pledged Stock pursuant to Section 7 hereof, and if in the opinion of counsel for the Collateral Agent or the Holders it is necessary, or if in the opinion of the Collateral Agent or the Holders it is advisable, to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act of 1933, as amended (the “Securities Act”), the Company will cause each issuing corporation to execute and deliver, and cause the directors and officers of each thereof to execute and deliver, all at the Company’s expense, all such instruments and documents, and to do or cause to be done all such other acts and things as may be necessary or, in the opinion of the Collateral Agent or the Holders, advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act and to use its best efforts to cause the registration statement thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and to make all amendments or supplements thereto and/or to the related prospectus which, in the opinion of the Collateral Agent or the Holders, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto, provided, that the obligations of the Company under this Section 10(a) to register, or cause the registration of, the Pledged Stock (or that portion thereof to be sold) shall be no greater than the maximum extent of all rights afforded to the Company under that certain Registration Rights Agreement, entered into as of February 11, 1997 (the “Registration Rights Agreement”), by and among American Residential Investment Trust, Inc., a Maryland corporation (“Amreit”) and the holders signatories thereto, as amended by Amendment No. 1 to the Registration Rights Agreement, entered into as of December 20, 2001, by and among Amreit and the holders signatories thereto.”

(h) Schedule 1 to the Pledge Agreement shall be amended and restated in its entirety to read as follows:

“1. 240,000 Shares of Common Stock, par value $0.01 per share, of American Residential Investment Trust, Inc., a Maryland corporation, represented by Certificate Number ARI 0299.

2. 1,360,000 Shares of Common Stock, par value $0.01 per share, of American Residential Investment Trust, Inc., a Maryland corporation, represented by Certificate Number ARI 0300.”

2.2 Effect of Amendment. Except as set forth herein, the provisions of the Pledge Agreement shall remain in full force and effect and all references therein to (a) “this Agreement” or “the Agreement” shall be deemed to refer to and mean “this Agreement” or “the Agreement”, as amended by this Agreement, and (b) the “Company” shall be deemed to refer to and mean HAMCO.

ARTICLE III
MISCELLANEOUS

3.1 Successors and Assigns. This Agreement is binding upon and shall inure to the benefit of HAMCO and the Collateral Agent and their successors and assigns.

3.2 Entire Agreement. The Pledge Agreement, as amended by this Agreement, constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and thereof, and is not intended to confer upon any person other than the parties hereto and thereto any rights or remedies hereunder.

3.3 Governing Law; Submission to Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW EXCEPT SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND RULE 327(b) OF THE NEW YORK CIVIL PRACTICE LAWS AND RULES). TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, EACH OF HAMCO AND THE COLLATERAL AGENT IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF HAMCO AND THE COLLATERAL AGENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF

ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST HAMCO OR THE COLLATERAL AGENT IN ANY OTHER JURISDICTION.

3.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument. Each party hereto shall become bound by this Agreement immediately upon affixing its signature hereto.

3.5 Headings. The headings of the sections and paragraphs of this Agreement have been inserted for convenience of reference only and do not constitute a part of this Agreement.

3.6 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

3.7 Further Assurances. The parties hereto shall execute such other documents and take such further actions as may be required or useful to carry out the purposes hereof.

3.8 Fair Construction. This Agreement shall be interpreted without regard to which party hereto initiated the drafting process or proposed or drafted particular language and shall not be construed for or against any party hereto by reason of such initiation, proposal or drafting.

3.9 Acknowledgments. By executing this Agreement, each party hereto represents and warrants that it has the requisite power and authority to execute and deliver this Agreement and has taken all necessary corporate or other action to authorize the execution and delivery of this Agreement.

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and delivered by its duly authorized officer as of the date first above written.

	HOME ASSET MANAGEMENT CORP.


	By:	/s/ Martin Anderson
	Name: Martin Anderson
	Title: Chairman


	DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent


	By:	/s/ Dorothy Robinson
	Name: Dorothy Robinson
	Title: Vice President

Under the Securities Exchange Act of 1934 (Amendment No. )*

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)

Signature

Under the Securities Exchange Act of 1934
(Amendment No. )*

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)