REVOLVING LOAN AGREEMENT

Exhibit 10.24

EXECUTION

Published CUSIP Number: ________________

REVOLVING LOAN AGREEMENT

Dated as of November 22, 2005

among

KB HOME

THE BANKS PARTY HERETO

BANK OF AMERICA, N.A.

CITICORP NORTH AMERICA, INC.
and
JPMORGAN CHASE BANK, N.A.
as Co-Syndication Agents

CALYON NEW YORK BRANCH,
WACHOVIA BANK, N.A.,
BARCLAYS BANK PLC
and
THE ROYAL BANK OF SCOTLAND PLC
as Co-Documentation Agents

and

BANC OF AMERICA SECURITIES LLC
and
CITIGROUP GLOBAL MARKETS INC.
as Joint Lead Arrangers and Joint Book Managers

TABLE OF CONTENTS

REVOLVING LOAN AGREEMENT

Dated as of November 22, 2005

This Revolving Loan Agreement (as it may from time to time be supplemented, modified, amended, renewed, extended or supplanted, this “ Agreement ”), dated as of November 22, 2005, is entered into by and among KB HOME, a Delaware corporation (“ Borrower ”), each financial institution set forth on the signature pages of this Agreement or which from time to time becomes party hereto (collectively, the “ Banks ” and individually, a “ Bank ”), Bank of America, N.A., as Administrative Agent, Citicorp North America, Inc. and JPMorgan Chase Bank, N.A., as Co-Syndication Agents, Calyon New York Branch, Wachovia Bank, N.A., Barclays Bank plc and The Royal Bank of Scotland plc, as Co-Documentation Agents, and Banc of America Securities LLC and Citigroup Global Markets Inc., as Joint Lead Arrangers and Joint Book Managers.

RECITALS

This Agreement establishes a new credit facility replacing that certain Revolving Loan Agreement dated as of October 24, 2003 (as amended, the “ Prior Revolving Loan Agreement ”) by and among Borrower, the banks named therein, Bank of America, N.A., as administrative agent, and various other banks in various agent capacities. Subject to the transition provisions of Section 3.17, and as contemplated by Section 8.1(a)(ix), the terms and provisions of this Agreement shall become effective and the Prior Revolving Loan Agreement shall terminate as of the Closing Date.

WHEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

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

“ Acquisition ” means any transaction, or any series of related transactions, consummated after the Closing Date, by which Borrower or any of its Subsidiaries directly or indirectly (a) acquires any ongoing business or all or substantially all of the assets of any firm, corporation, partnership or limited liability company, joint venture or other business entity or division thereof, whether through purchase of assets, merger or otherwise, (b) acquires control of securities of a corporation representing 50% or more of the ordinary voting power for the election of directors or (c) acquires control of a 50% or more ownership interest in any firm, corporation, partnership, limited liability company, joint venture or other business entity.

“ Additional Commitment Bank ” has the meaning set forth in Section 2.9(d).

“ Administrative Agent ” means Bank of America in its capacity as administrative agent under this Agreement and the other Loan Documents, or any successor administrative agent.

“ Administrative Agent’s Office ” means the Administrative Agent’s address and, as appropriate, account set forth on Schedule 11.6, or such other address or account as the Administrative Agent may, from time to time, notify the Borrower and the Banks.

“ Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Administrative Agent to the Banks.

“ Advance ” means an advance made or to be made to Borrower by a Bank pursuant to Article II .

“ Affiliate ” means, with respect to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person. As used in this definition, “control” (including its correlative meanings, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise); provided that, in any event, any Person which owns directly or indirectly 10% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation that has more than 100 record holders of such securities or 10% or more of the partnership or other ownership interests of any other Person that has more than 100 record holders of such interests will be deemed to control such corporation or other Person.

“ Agent Parties ” has the meaning set forth in Section 11.6(c).

“ Agent-Related Persons ” means the Administrative Agent, together with its Affiliates (including Bank of America in its capacity as the Administrative Agent and BAS in its capacity as an Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.

“ Agreement ” has the meaning set forth in the first paragraph hereof.

“ Applicable Base Rate Spread ” means the applicable per annum percentage set forth in the definition of “Applicable Rates”.

“ Applicable Commitment Fee Rate ” means the applicable per annum percentage set forth in the definition of “Applicable Rates”.

“ Applicable Eurodollar Rate Spread ” means the applicable per annum percentage set forth in the definition of “Applicable Rates”.

“ Applicable Federal Funds Rate ” means, as of any date of determination, a rate per annum equal to the Federal Funds Rate in effect on such date and if such Federal Funds Rate is not available to the Swing Line Bank, such rate per annum as is reasonably determined by the Swing Line Bank as representing its actual cost of funding Swing Line Loans, without the addition of fees or markup of any kind.

“ Applicable Letter of Credit Fee ” means the applicable per annum percentage set forth in the definition of “Applicable Rates”.

“ Applicable Pricing Level ” means, for any day, the Applicable Pricing Level that is determined in accordance with Borrower’s Debt Rating and Consolidated Leverage Ratio, as appropriate, on such date as follows:

Borrower must, pursuant to Section 7.1(k), provide the Administrative Agent with notice of each change in the Applicable Pricing Level that is due to any change in a Debt Rating. Any change in the Applicable Pricing Level resulting from a change in the Consolidated Leverage Ratio shall be effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 7.2; provided , however , that if a Compliance Certificate is not delivered on or prior to a date required by Section 7.2, and if the Compliance Certificate indicates that the Applicable Pricing Level of Borrower will increase ( i.e. , becomes less favorable to Borrower), the date of increase in the Applicable Pricing Level will be deemed to be the date upon which such Compliance Certificate was due under Section 7.2, not the date upon which such Compliance Certificate was delivered.

In the event that there is a difference in the Applicable Pricing Levels determined by the Debt Ratings and the Consolidated Leverage Ratio, respectively, the lower of such Applicable Pricing Levels shall apply (with the Applicable Pricing Level I being the lowest and the Applicable Pricing Level V being the highest), unless there is a difference in the Applicable Pricing Levels (as indicated by the Debt Ratings and the Consolidated Leverage Ratio) of more than one level, in which case, the Applicable Pricing Level that is one level lower than the Applicable Pricing Level of the higher Applicable Pricing Level shall apply.

“ Applicable Rates ” means, as of any date of determination, the following percentages per annum, based upon the Applicable Pricing Level on that date:

“ Arrangers ” mean BAS and CGMI, in their capacity as joint lead arrangers and joint book managers.

“ Assignee Group ” means two or more Eligible Assignees that are Affiliates of one another.

“ Assignment and Assumption ” means an assignment and assumption substantially in the form of Exhibit A .

“ Associate ” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on the date hereof.

“ Attorney Costs ” means and includes all reasonable fees, expenses and disbursements of any law firm or other external counsel.

“ Authorizations ” has the meaning set forth for that term in Section 4.1.

“ Bank ” means each financial institution whose name is set forth in the signature pages of this Agreement and each lender which may hereafter become a party to this Agreement pursuant to Section 11.8.

“ Bank of America ” means Bank of America, N.A. and its successors.

“ BAS ” means Banc of America Securities LLC and its successors.

“ Base Rate " means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus ¹ / 2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

“ Base Rate Advance ” means an Advance made by a Bank to fund its Pro Rata Share of a Base Rate Loan.

“ Base Rate Loan ” means a Loan that bears interest based on the Base Rate.

“ Borrower ” means KB Home, a Delaware corporation, and its successors and permitted assigns.

“ Borrower Materials ” has the meaning set forth in Section 7.1.

“ Borrowing Base ” has the meaning set forth in Section 2.8(b).

“ Borrowing Base Certificate ” means a written calculation of the Borrowing Base, substantially in the form of Exhibit B signed, on behalf of Borrower by a Senior Officer of Borrower.

“ Borrowing Base Subsidiary ” means (a) any Guarantor Subsidiary and (b) any direct or indirect wholly-owned Domestic Subsidiary of Borrower or any Guarantor Subsidiary.

“ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state of New York, the state where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

“ Capital Lease ” means, with respect to any Person, a lease of any Property by that Person as lessee that is, or should be in accordance with Financial Accounting Standards Board Statement No. 13, recorded as a “capital lease” on a balance sheet of that Person prepared in accordance with Generally Accepted Accounting Principles consistently applied.

“ Cash ” means all monetary items ( including currency, coin and bank demand deposits) that are treated as cash under Generally Accepted Accounting Principles consistently applied.

“ Cash Collateralize ” has the meaning set forth in Section 2.5(g).

“ Cash Equivalents ” means, with respect to any Person, that Person’s Investments in:

“ CGMI ” means Citigroup Global Markets Inc. and its successors.

“ Change in Control ” means, and shall be deemed to have occurred at such time as any of the following events shall occur:

Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred if at any time Borrower, any Subsidiary of Borrower, any employee stock ownership plan or any other employee benefit plan, including any Pension Plan of Borrower or any Subsidiary of Borrower, or any person holding Borrower’s Voting Stock for or pursuant to the terms of such employee benefit plan, files or becomes obligated to file a report under or in response to Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report) under the Exchange Act disclosing beneficial ownership by it of shares of Borrower’s Voting Stock, whether in excess of 50% or otherwise.

“ Change in Law ” means the occurrence, after the date of this Agreement, of any of the following:

“ Closing Date ” means the date of this Agreement.

“ Code ” means the Internal Revenue Code of 1986, as amended or replaced and as in effect from time to time.

“ Commission ” means the Securities and Exchange Commission and any successor commission.

“ Commitment ” means, subject to Sections 2.6, 2.7 and 2.9, $1,500,000,000. The Pro Rata Shares of the Banks with respect to the Commitment are set forth in Schedule 1.1 .

“ Compensation Period ” has the meaning set forth for that term in Section 3.14.

“ Compliance Certificate ” means a compliance certificate in the form of Exhibit C signed, on behalf of Borrower, by a Senior Officer of Borrower.

“ Consolidated Adjusted EBITDA ” means, for any period, Consolidated EBITDA for such period plus (a) the amount of capitalized interest that was included in cost of sales in determining Consolidated Net Income for such period plus (b) all non-Cash Net Realizable Value Adjustments made during such period.

“ Consolidated EBITDA ” means, for any period, the sum of (a) Consolidated Net Income for such period, plus (b) any extraordinary loss reflected in such Consolidated Net Income, minus (c) any extraordinary gain reflected in such Consolidated Net Income, plus (d) Consolidated Interest Expense for such period, plus (e) the aggregate amount of federal, state and foreign income taxes payable by Borrower and its Consolidated Subsidiaries for such period, plus (f) depreciation, amortization and all other non-cash expenses of Borrower and its Consolidated Subsidiaries for such period, in each case as determined in accordance with Generally Accepted Accounting Principles consistently applied, plus (g) any Distributions made in Cash by KB France to Borrower during such period, and in the case of items (d), (e) and (f), only to the extent deducted in the determination of Consolidated Net Income for such period.

“ Consolidated FIN 46 Subsidiaries ” means entities that would not be GAAP Subsidiaries but for the issuance of the pronouncement entitled Financial Interpretation Number 46 (“FIN 46”) “Consolidation of Variable Interest Entities” by the Financial Accounting Standards Board on January 17, 2003.

“ Consolidated Interest Coverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated Adjusted EBITDA for the 12 month period ending on such date to (b) the sum of (i) Consolidated Interest Expense for the 12 month period ending on such date plus (ii) all dividends ( other than dividends paid in the same class of stock) paid on any preferred stock of Borrower during the 12 month period ending on such date.

“ Consolidated Interest Expense ” means, for any period, the aggregate amount of interest, fees, charges and related expenses paid or payable to a lender by Borrower and its Consolidated Subsidiaries on a consolidated basis in connection with borrowed money (including any capitalized interest and accretion of original issue discount on long-term debt) and the interest portion of any capitalized lease payments.

“ Consolidated Leverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated Total Indebtedness on that date to (b) Consolidated Tangible Net Worth on that date.

“ Consolidated Net Income ” means, for any period, the net income of Borrower and its Consolidated Subsidiaries on a consolidated basis determined in accordance with Generally Accepted Accounting Principles consistently applied.

“ Consolidated Subsidiaries ” means, with respect to Borrower, Borrower’s GAAP Subsidiaries (other than KB France and Borrower’s Consolidated FIN 46 Subsidiaries).

“ Consolidated Tangible Net Worth ” means, as of any date of determination, the Shareholders’ Equity of Borrower and its GAAP Subsidiaries on a consolidated basis on that date minus the Intangible Assets of Borrower and its GAAP Subsidiaries on a consolidated basis on that date minus any non-cash gain (or plus any non-cash loss, as applicable) resulting from any marked to market adjustments made directly to Consolidated Tangible Net Worth as a result of fluctuations in the value of foreign currency instruments owned by Borrower or any of its GAAP Subsidiaries as mandated under FAS 133.

“ Consolidated Total Indebtedness ” means, as of any date of determination, all Indebtedness and Contingent Guaranty Obligations of Borrower and its Consolidated Subsidiaries on a consolidated basis on that date (without duplication for any guaranty by Borrower of a Consolidated Subsidiary’s Indebtedness or any guaranty by a Consolidated Subsidiary of either Borrower’s or another Consolidated Subsidiary’s Indebtedness or otherwise) minus (a) all Indebtedness and Contingent Guaranty Obligations of Financial Subsidiaries on a consolidated basis (but only to the extent that such Financial Subsidiaries are also Consolidated Subsidiaries and there is no recourse to Borrower or any other Consolidated Subsidiary) on that date minus (b) all Indebtedness and Contingent Guaranty Obligations of Foreign Subsidiaries of the Borrower on a consolidated basis (but only to the extent that such Foreign Subsidiaries of the Borrower are also Consolidated Subsidiaries and there is no recourse to Borrower or any other Consolidated Subsidiary or any of their respective Property) on that date minus (c) the amount, if any, by which the aggregate Cash and Cash Equivalents of Borrower and its Consolidated Subsidiaries ( other than the Financial Subsidiaries and Foreign Subsidiaries) on a consolidated basis on that date are in excess of $15,000,000 (but not to exceed $300,000,000).

“ Construction Costs ” means, as of any date of determination, all costs actually incurred by Borrower or any Borrowing Base Subsidiary with respect to the construction of Units on Developed Lots, including land basis.

“ Contingent Guaranty Obligation ” means, as to any Person, any (a) direct or indirect guarantee of Indebtedness of, or other obligation performable by, any other Person ( other than a performance obligation undertaken in the ordinary and usual course of business or obligations with respect to letters of credit), including any endorsement ( other than for collection or deposit in the ordinary course of business), co-making or sale with recourse of the obligations of any other Person or (b) assurance given to an obligee with respect to the performance of an obligation ( other than a performance obligation undertaken in the ordinary and usual course of business) by, or the financial condition of, any other Person, whether direct, indirect or contingent, including any purchase or repurchase agreement covering such obligation or any collateral security therefor, any agreement to provide funds (by means of loans, capital contributions or otherwise) to such other Person, any agreement to support the solvency or level of any balance sheet item of such other Person, any “keep-well”, “take-or-pay”, “through put” or other arrangement of whatever

nature having the effect of assuring or holding harmless any obligee against loss with respect to any obligation of such other Person, or the LTV Maintenance Exposure resulting from any LTV Maintenance Agreement; provided , however , that notwithstanding the foregoing, no such guarantee or assurance shall constitute a Contingent Guarantee Obligation of a Person, if such Person’s obligations thereunder constitute limited exclusions from the otherwise non-recourse nature of such other Person’s Indebtedness or other obligations, except and until the acts, conduct or events triggering recourse to such Person have occurred. The amount of any Contingent Guaranty Obligation shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation (unless the Contingent Guaranty Obligation is limited by its terms to a lesser amount, in which case to the extent of such amount) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the Person in good faith; provided , however , that if any Person is liable severally but not jointly and severally with one or more other obligors under any Contingent Guaranty Obligation, the amount of such Contingent Guaranty Obligation shall be the product of (x) the amount determined as set forth above and (y) the maximum percentage of the aggregate liability under such Contingent Guaranty Obligation with respect to which such Person is severally liable.

“ Contractual Obligation ” means, as to any Person, any provision of any outstanding Securities issued by that Person or of any material agreement, instrument or undertaking to which that Person is a party or by which it or any of its Property is bound, other than , in the case of Borrower and its Subsidiaries, any of the Loan Documents.

“ Debt Rating ” means, as of any date of determination, the rating as determined by the Rating Agencies (collectively, the “ Debt Ratings ”) of the Borrower’s non-credit-enhanced, senior unsecured long-term debt; provided that if a Debt Rating is issued by each of the Rating Agencies, then the two highest of such Debt Ratings shall apply (with the Debt Rating for Applicable Pricing Level I being the highest and the Debt Rating for Applicable Pricing Level V being the lowest), unless there is a split in Debt Ratings of more than one level, in which case the Applicable Pricing Level that is one level higher than the Applicable Pricing Level of the lower Debt Rating shall apply.

“ Debtor Relief Laws ” means the Bankruptcy Code of the United States of America, as amended from time to time, and all other applicable liquidation, conservatorship, insolvency, reorganization, or similar debtor relief Laws from time to time in effect affecting the rights of creditors generally.

“ Default ” means any event that, with the giving of any notice or passage of time, or both, would be an Event of Default.

“ Default Rate ” has the meaning set forth for that term in Section 3.7.

“ Defaulting Bank ” has the meaning set forth for that term in Section 10.13.

“ Designated Deposit Account ” means a demand deposit account to be maintained by Borrower with Bank of America, as from time to time designated by Borrower by written notification to the Administrative Agent.

“ Developed Lots ” means, as of any date of determination, subdivision lots located in the United States that are wholly-owned by Borrower or its Borrowing Base Subsidiaries, unencumbered by any Lien or Liens ( other than Permitted Encumbrances), and that are subject to a recorded plat or

subdivision map, in substantial compliance with all applicable Laws and available for the construction thereon of foundations for Units.

“ Distribution ” means, with respect to any shares of capital stock or any warrant or right to acquire shares of capital stock or any other equity security issued by a Person, (a) the retirement, redemption, purchase, or other acquisition for value ( other than for capital stock of the same type of such Person) by such Person of any such security, (b) the declaration or payment by such Person of any dividend in Cash or in Property ( other than in capital stock of the same type of such Person) on or with respect to any such security, and (c) any Investment by such Person in any holder of 5% or more of the capital stock (or other equity securities) of such Person, if a purpose of such Investment is to avoid the characterization of the transaction between such Person and such holder as a Distribution under clause (a) or (b) above. In addition, to the extent any loan or advance by Borrower to one of its Subsidiaries is deemed to be an “Investment” for purposes of this Agreement, then any principal payment made by such Subsidiary in respect of such loan or advance shall be considered a Distribution for purposes of Section 6.12.

“ Dollars ” means the national currency of the United States of America.

“ Domestic Lending Office ” means, with respect to each Bank, its office, branch or affiliate identified on the signature pages hereof as its Domestic Lending Office or such other office, branch or affiliate as such Bank may hereafter designate as its Domestic Lending Office by notice to the Borrower and the Administrative Agent.

“ Domestic Subsidiary ” means, with respect to any Person and as of any date of determination, a Subsidiary of such Person (a) that is organized under the Laws of the United States of America or any state thereof and (b) the majority of the assets of which (as reflected on a balance sheet of such Subsidiary prepared in accordance with Generally Accepted Accounting Principles consistently applied) is located in the United States of America; provided that Kaufman and Broad International, Inc., a California corporation, shall in no event be considered a Domestic Subsidiary of Borrower.

“ Domestic Unimproved Land ” means, as of any date of determination, real Property located in the United States of America that is: (a) owned by Borrower or any of its Subsidiaries if on that date there has been expended by Borrower or any of its Subsidiaries less than 50% of the costs reasonably estimated by Borrower (in accordance with its past practices as of the Closing Date) to develop such real Property into Developed Lots; or (b) owned by Persons other than Borrower or any of its Subsidiaries but which, if owned by Borrower or any of its Subsidiaries on that date, would have satisfied the requirement set forth in clause (a) and if on that date Borrower or any of its Subsidiaries holds an option to purchase such real Property for which it has paid an amount equal to 33% or more of the purchase price provided for in such option to purchase, provided , that in the event an option to purchase land covers more than one parcel, phase or lot, any deposit paid by Borrower or any of its Subsidiaries shall be allocated to each parcel, phase or lot pro rata in accordance with the purchase price of the parcels, phases or lots. The “book value” with respect to Domestic Unimproved Land referred to in Section 6.15 shall be calculated as if the option to purchase had been exercised as of the date of determination, and otherwise in accordance with Generally Accepted Accounting Principles, consistently applied.

“ Eligible Assignee ” means: (a) a Bank; (b) an Affiliate of a Bank; and (c) any other Person (other than a natural person) approved by (i) the Administrative Agent and the Swing Line Bank, and (ii) unless a Default or an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the

foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

“ ERISA ” means, at any date, the Employee Retirement Income Security Act of 1974 and the regulations thereunder, all as the same shall be in effect at such date.

“ ERISA Affiliate ” means, with respect to any Person, any other Person (or any trade or business, whether or not incorporated) that is under common control with that Person within the meaning of Section 414 of the Code.

“ ERISA Event ” means: (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

“ Escrow Receivables ” means, as of any date of determination, the amounts due to Borrower or any Borrowing Base Subsidiary and held at an escrow or title company following the sale and conveyance of title of a Model Home or Unit to a buyer (including an escrow or title company that is a Subsidiary of the Borrower) to the extent that such amounts are free and clear of all Liens and Rights of Others and are not subject to any restriction pursuant to any Contractual Obligations.

“ Eurodollar Advance ” means an Advance made by a Bank to fund its Pro Rata Share of a Eurodollar Rate Loan.

“ Eurodollar Base Rate ” has the meaning set forth in the definition of Eurodollar Rate.

“ Eurodollar Rate ” means for any Interest Period with respect to any Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula:

Where, “ Eurodollar Base Rate ” means, for such Interest Period, the rate per annum equal to the British Bankers Association LIBOR Rate (“ BBA LIBOR ”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, 2 Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurodollar Base Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars

for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m., London time, 2 Business Days prior to the commencement of such Interest Period.

“ Eurodollar Rate Loan ” means a Loan that bears interest at a rate based on the Eurodollar Rate.

“ Eurodollar Reserve Percentage ” means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to 5 decimal places) in effect on such day, whether or not applicable to any Bank, under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”). The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.

“ Event of Default ” has the meaning provided in Section 9.1.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Excluded Taxes ” means, with respect to the Administrative Agent, any Bank, an Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder,

“ Existing Letters of Credit ” has the meaning set forth in Section 3.17.

“ Existing Maturity Date ” has the meaning set forth in Section 2.9(a).

“ Exposure ” means for any Bank, as of any date of determination, the product obtained by multiplying that Bank’s then effective Pro Rata Share by the then effective Commitment.

“ Extended Maturity Date ” has the meaning set forth in Section 2.9(e).

“ Extending Bank ” means a Bank that agrees to extend its Maturity Date pursuant to Section 2.9.

“ Extension Effective Date ” has the meaning set forth in Section 2.9(c).

“ Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

“ Financial Letter of Credit ” means any letter of credit issued by an issuer for the account of the Borrower or a Subsidiary that represents an irrevocable obligation on the part of the issuer:

“ Financial Subsidiary ” means (a) the Mortgage Company and its Subsidiaries, so long as such entities continue to engage in the mortgage banking business, (b) any Subsidiary of Borrower that is organized and operates solely to issue (i) collateralized mortgage obligations or (ii) other similar asset-backed obligations, and (c) any other Subsidiary of Borrower that (i) is engaged primarily in the business of origination, marketing, and servicing of residential mortgage loans, the sale of servicing rights, or the financing of long term residential mortgage loans, (ii) holds not less than 95% of its total assets in the form of Cash, Cash Equivalents, notes and mortgages receivable, Cash held by a trustee for the benefit of such Subsidiary or other financial instruments and (iii) is the subject of an Officer’s Certificate of Borrower delivered to the Administrative Agent stating that such Subsidiary is a Financial Subsidiary within the meaning hereof. As of the Closing Date, the Financial Subsidiaries are Westview Company, KB Home Title Services Inc., KB Home Insurance Agency Inc., KB Home Insurance Agency of Texas Holdings Inc., Homesafe Company and San Antonio Title Co.

“ Fiscal Quarter ” means each of the fiscal quarters of Borrower ending on each February 28 (or 29, if a leap year), May 31, August 31 and November 30, or as otherwise changed by the Borrower upon advance written notice to the Administrative Agent, but subject to the requirements of Section 1.2.

“ Fiscal Year ” means each of the fiscal years of Borrower ending on each November 30 or as otherwise changed by the Borrower upon advance written notice to the Administrative Agent, but subject to the requirements of Section 1.2.

“ Fitch ” means Fitch Ratings, or any successor thereto.

“ Foreign Bank ” means any Bank that is organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“ Foreign Subsidiary ” means, with respect to any Person, a Subsidiary of that Person which is not a Domestic Subsidiary and with respect to Borrower, includes Kaufman and Broad International, Inc., a California corporation.

“ GAAP Subsidiaries ” means, with respect to Borrower, all entities whose financial statements are consolidated with the consolidated financial statements of Borrower under Generally Accepted Accounting Principles.

“ GAAP Value ” means, with respect to any property or asset, the book value for such property or asset determined in accordance with Generally Accepted Accounting Principles consistently applied.

“ Generally Accepted Accounting Principles ” means, as of any date of determination, accounting principles set forth as “generally accepted” in then currently effective statements of the Auditing Standards Board of the American Institute of Certified Public Accountants, or, if such statements are not then in effect, accounting principles that are then approved by a significant segment of the accounting profession in the United States of America. The term “ consistently applied ,” as used in connection therewith, means that the accounting principles applied to financial statements of a Person as of any date or for any period are consistent in all material respects (subject to Section 1.2) to those applied to financial statements of that Person as of recent prior dates and for recent prior periods.

“ Government Securities ” means (a) readily marketable direct full faith and credit obligations of the United States of America or obligations unconditionally guaranteed by the full faith and credit of the United States of America and (b) obligations of an agency or instrumentality of, or corporation owned, controlled or sponsored by, the United States of America that are generally considered in the securities industry to be implicit obligations of the United States of America.

“ Governmental Agency ” means (a) any federal, state, county or municipal government, or political subdivision thereof, (b) any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality, or public body, (c) any court or administrative tribunal, or (d) any arbitration tribunal or other non-governmental authority to whose jurisdiction a Person has consented, in each case whether of the United States of America or any other nation.

“ Guarantor Subsidiary ” means (a) any Domestic Subsidiary which is a Consolidated Subsidiary and a Significant Subsidiary, other than any Financial Subsidiary and (b) any other Domestic Subsidiary, other than any Financial Subsidiary, that is designated in writing by Borrower as a Guarantor Subsidiary.

“ Hazardous Materials ” means substances defined as “hazardous substances” pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601 et seq., or as “hazardous”, “toxic” or “pollutant” substances or as “solid waste” pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., or as “friable asbestos” pursuant to the

Toxic Substances Control Act, 15 U.S.C. § 2601 et seq. or any other applicable Hazardous Materials Law, in each case as such Laws are amended from time to time.

“ Hazardous Materials Laws ” means all Laws governing the treatment, transportation or disposal of Hazardous Materials applicable to any real Property of Borrower or its Subsidiaries.

“ Increasing Bank ” has the meaning set forth in Section 2.7(a).

“ Indebtedness ” means, with respect to any Person, without duplication, (a) all indebtedness of such Person for borrowed money, (b) that portion of the obligations of such Person under Capital Leases which should properly be recorded as a liability on a balance sheet of that Person prepared in accordance with Generally Accepted Accounting Principles consistently applied, (c) any obligation of such Person that is evidenced by a promissory note or other instrument representing an extension of credit to such Person, whether or not for borrowed money, (d) any obligation of such Person for the deferred purchase price of Property or services ( other than trade or other accounts payable in the ordinary course of business in accordance with customary industry terms), (e) any obligation of the types referred to in clauses (a) through (d) above that is secured by a Lien ( other than a Permitted Encumbrance) on assets of such Person, whether or not that Person has assumed such obligation or whether or not such obligation is non-recourse to the credit of such Person, but only to the extent of the fair market value of the assets so subject to the Lien if such obligation is non-recourse, (f) obligations of such Person arising under acceptance facilities or under facilities for the discount of accounts receivable of such Person, (g) any obligation of such Person under Financial Letters of Credit issued for the account of such Person, and (h) net obligations of such Person under any Swap Contract. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.

“ Indemnified Liabilities ” has the meaning set forth in Section 11.10.

“ Indemnified Taxes ” means Taxes other than Excluded Taxes.

“ Indemnitees ” has the meaning set forth in Section 11.10.

“ Information ” has the meaning set forth in Section 11.12.

“ Intangible Assets ” means assets that are considered intangible assets under Generally Accepted Accounting Principles consistently applied, including (a) customer lists, goodwill, computer software, unamortized deferred charges, unamortized debt discount, capitalized research and development costs and other intangible assets and (b) any write-up in book value of any asset subsequent to its acquisition, but excluding any existing write-up in book value of any asset acquired by Borrower or any of its Subsidiaries prior to October 3, 2000, as such write-up may decrease (but not increase) from time to time.

“ Interest Period ” means, as to each Eurodollar Rate Loan, a period of 1, 2, 3 or 6 months or, subject to the consent of the Administrative Agent, in its reasonable discretion, a period of 1, 2 or 3 weeks, as designated by Borrower; provided that (a) the first day of each Interest Period must be a Business Day, (b) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day, unless such Business Day falls in the next calendar month, in which case the Interest Period shall end on the next preceding Business Day, and (c) no Interest Period may extend beyond the Maturity Date.

“ Investment ” means, with respect to any Person, any investment by that Person, whether by means of purchase or other acquisition of capital stock or other Securities of any other Person or by means of loan, advance, capital contribution, or other debt or equity participation or interest in any other Person, including any partnership or joint venture interest in any other Person; provided that an Investment of a Person shall not include any trade or account receivable arising in the ordinary course of the business of such Person, whether or not evidenced by a note or other writing. The amount of any Investment shall be the amount actually invested, less any return of capital, without adjustment for subsequent increases or decreases in the market value of such Investment.

“ Investment Grade Credit Rating ” means, as of any date of determination, that at least 2 Rating Agencies have as of that date issued credit ratings for Borrower’s non-credit-enhanced long-term senior unsecured debt of (a) at least BBB- in the case of S&P, (b) at least Baa3 in the case of Moody’s and (c) at least BBB- in the case of Fitch.

“ IRS ” means the United States Internal Revenue Service.

“ ISP98 ” has the meaning set forth in Section 2.5(h).

“ Issuing Bank ” means:

“ Joint Venture ” means any Person, other than a Subsidiary, (a) in which Borrower or any Subsidiary of Borrower holds an equity Investment which entitles Borrower or such Subsidiary to more than 10% of (i) the ordinary voting power for the election of the board of directors or other governing body of such Person or (ii) the partnership, membership or other ownership interest in such Person, and (b) which has at least one holder of its equity interests that is not an Affiliate of Borrower or any Subsidiary of Borrower. Notwithstanding the foregoing, for the purposes of Section 6.16, the term “Joint Venture” will not include any equity Investment in any Person if the dollar amount of that investment is less than $1,000,000, computed in accordance with Generally Accepted Accounting Principles consistently applied, but only to the extent that the aggregate dollar amount of such equity Investments is less than $25,000,000.

“ KB France ” means Kaufman & Broad S.A., a French S ociété Anonyme .

“ L/C Advance ” means, with respect to each Bank, such Bank’s funding of its participation in any L/C Borrowing in accordance with its Pro Rata Share.

“ L/C Borrowing ” means an extension of credit resulting from a drawing under a Letter of Credit which has not been reimbursed on the date required or refinanced as a Loan.

“ Land Parcels ” means parcels of land located in the United States wholly-owned by Borrower or any Borrowing Base Subsidiary that are unencumbered by any Lien or Liens ( other than Permitted Encumbrances).

“ Laws ” means, collectively, all foreign, federal, state and local statutes, treaties, codes, ordinances, rules, regulations and controlling precedents of any Governmental Agency.

“ Lending Office ” means, as to any Bank, the office or offices of such Bank described as such in such Bank’s Administrative Questionnaire, or such other office or offices as a Bank may from time to time notify the Borrower and the Administrative Agent.

“ Letter of Credit ” means any of the standby letters of credit issued by an Issuing Bank under the Commitment pursuant to Section 2.5, either as originally issued or as the same may be supplemented, modified, amended, renewed, extended or supplanted. A Letter of Credit shall be a Financial Letter of Credit or a Performance Letter of Credit.

“ Letter of Credit Application ” means an application and agreement for the issuance or amendment of a Letter of Credit in the form, from time to time, that is in use by an Issuing Bank.

“ Letter of Credit Collateralize ” has the meaning set forth in Section 2.5(g).

“ Letter of Credit Usage ” means, as of any date of determination, the aggregate undrawn face amount of outstanding Letters of Credit plus the aggregate amount of all Unreimbursed Amounts, including all L/C Borrowings.

“ Lien ” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, lien or charge of any kind, whether voluntarily incurred or arising by operation of Law or otherwise, affecting any Property, including any agreement to grant any of the foregoing ( other than an agreement which gives to a Person the right to become equally and ratably secured with any other Person to whom a Lien is granted on any item of Property) any conditional sale or other title retention agreement, any lease in the nature of a security interest, or the filing of or agreement to give any financing statement ( other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest) under the Uniform Commercial Code or comparable Law of any jurisdiction with respect to any Property.

“ Loans ” means the aggregate of the Advances made at any one time by the Banks pursuant to Article II .

“ Loan Documents ” means, collectively, this Agreement, the Notes, the Letters of Credit, Letter of Credit Applications, the Swing Line Documents, the Subsidiary Guaranty, any Loan Notice, any Swing Line Loan Notice, any Request for Letter of Credit, any Compliance Certificate, any Borrowing Base Certificate and any other instruments, documents or agreements of any type or nature hereafter executed and delivered by Borrower or any of its Subsidiaries or Affiliates to the Administrative Agent or any other Bank in any way relating to or in furtherance of this Agreement, in each case either as originally executed or as the same may from time to time be supplemented, modified, amended, restated, extended or supplanted.

“ Loan Notice ” means a notice of (a) a request for a Loan, (b) a conversion of Loans from one Type to the other or (c) a continuation of Eurodollar Rate Loans, which may be given by telephone and, if in writing, shall be substantially in the form of Exhibit D .

“ Loan Parties ” means, collectively, the Borrower and each Guarantor Subsidiary.

“ Lots Under Development ” means, as of any date of determination, Land Parcels that are being developed into Developed Lots or that are scheduled for the commencement of development into Developed Lots within 6 calendar months after the date of determination.

“ LTV Maintenance Agreement ” means a guaranty or other agreement entered into by the Borrower or any of its Consolidated Subsidiaries, for the benefit of the holder of any secured Indebtedness of a Person that is not the Borrower or any of its Consolidated Subsidiaries, to maintain a specified loan-to-value ratio with respect to real Property that secures such Indebtedness.

“ LTV Maintenance Exposure ” means, with respect to any LTV Maintenance Agreement, the amount equal to (a) the amount of the Indebtedness with respect to which the LTV Maintenance Agreement is delivered exceeds (b) the product of (i) the book value of the real Property securing such Indebtedness (or such lesser value as is provided in or determined under the agreements governing such Indebtedness) and (ii) a percentage equal to the loan-to-value ratio (stated as a fraction) that the Borrower or any of its Consolidated Subsidiaries agrees to maintain under the applicable LTV Maintenance Agreement; provided that if the Borrower or one of its Consolidated Subsidiaries is liable severally but not jointly and severally with one or more other obligors under the LTV Maintenance Agreement, the amount of the Contingent Guaranty Obligation in respect of such LTV Maintenance Agreement for the Borrower or such Consolidated Subsidiary shall be the product of (x) the amount determined as set forth above and (y) the maximum percentage of the aggregate liability under such LTV Maintenance Agreement with respect to which the Borrower or such Consolidated Subsidiary is severally liable; provided further , that if the LTV Maintenance Exposure with respect to a LTV Maintenance Agreement is less than zero, the LTV Maintenance Exposure for that LTV Maintenance Agreement shall be deemed to be zero.

“ Material Adverse Effect ” means any circumstance or event, or any set of circumstances or events which, individually or when aggregated with any other circumstances or events, (a) has or is reasonably likely to have any material adverse effect upon the validity or enforceability of any Loan Document, (b) is or is reasonably likely to be material and adverse to the condition (financial or otherwise) or operations of Borrower and its Subsidiaries, taken as a whole, or (c) materially impairs or is reasonably likely to materially impair the ability of Borrower and its Subsidiaries, taken as a whole, to perform the Obligations.

“ Material Amount of Assets ” means, as of any date of determination, more than 15% of the consolidated total assets of Borrower and its Subsidiaries as of such date ( other than assets of, or Investments in, Financial Subsidiaries, KB France or Borrower’s Consolidated FIN 46 Subsidiaries).

“ Maturity Date ” means the later of (a) November 22, 2010 and (b) if maturity is extended pursuant to Section 2.9, such extended maturity date as determined pursuant to such Section.

“ Model Homes ” means housing Units which have been completed, furnished and landscaped and are used in the marketing efforts with respect to a residential home community.

“ Moody’s ” means Moody’s Investors Service, Inc. and any successor thereto.

“ Mortgage Company ” means KB Home Mortgage Company, an Illinois corporation and a wholly owned Financial Subsidiary of Borrower.

“ Multiemployer Plan ” means any employee benefit plan of a type described in Section 4001(a)(3) of ERISA.

“ Net Realizable Value Adjustment ” means the adjustment required pursuant to Generally Accepted Accounting Principles consistently applied ( including FAS 121 issued by the Financial

Accounting Standards Board) to reflect a decrease in the book value of assets below their historical costs.

“ New Bank ” has the meaning set forth in Section 2.7(a).

“ Non-Extending Bank ” has the meaning set forth in Section 2.9(b).

“ Non-Recourse Indebtedness ” means Indebtedness incurred in connection with the purchase or improvement of Property (a) that is secured solely by the Property purchased or improved, (b) with respect to which the holder of such Indebtedness has recourse only to such Property, and (c) that is otherwise non-recourse (whether by contract or under applicable Law) to any Person.

“ Note ” means each promissory note made by Borrower to a Bank evidencing the Advances under that Bank’s Pro Rata Share of the Commitment, substantially in the form of Exhibit E , either as originally executed or as the same may from time to time be supplemented, modified, amended, renewed, extended or supplanted.

“ Notice Date ” has the meaning set forth in Section 2.9(a).

“ Obligations ” means all present and future obligations of every kind or nature of Borrower or any Party at any time and from time to time owed to the Administrative Agent or the Banks or any one or more of them under any one or more of the Loan Documents, whether due or to become due, matured or unmatured, liquidated or unliquidated, or contingent or noncontingent, including obligations of performance as well as obligations of payment, and including interest that accrues to the extent permitted by applicable Law after the commencement of any proceeding under any Debtor Relief Law by or against Borrower.

“ Officer’s Certificate ” means, when used with reference to any Person, a certificate signed by a Senior Officer of such Person.

“ Opinions of Counsel ” means the favorable written legal opinions of (a) Munger, Tolles & Olson llp , special counsel to Borrower and (b) Kimberly N. King, Vice President and Secretary of Borrower, substantially in the form of Exhibits F-1 and F-2 , respectively, together with copies of all factual certificates and legal opinions upon which such counsel has relied.

“ Other Taxes ” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

“ Outstanding Amount ” means:

“ Participant ” has the meaning set forth in Section 11.8(d).

“ Party ” means any Person other than the Banks or the Administrative Agent which now or hereafter is a party to any of the Loan Documents.

“ PBGC ” means the Pension Benefit Guaranty Corporation or any successor thereto established under ERISA.

“ Pension Plan ” means any “employee pension benefit plan” (as such term is defined in ERISA) which is subject to Title IV of ERISA and which is maintained for employees of Borrower or any of its ERISA Affiliates.

“ Performance Letter of Credit ” means any letter of credit issued by an issuer for the account of the Borrower or a Subsidiary that is not a Financial Letter of Credit.

“ Permitted Encumbrances ” means: