UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): April 9, 2013

 

 

TAYLOR MORRISON HOME CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-35873   90-0907433

(State or other jurisdiction

of incorporation)

 

(Commission

File No.)

 

(IRS Employer

Identification No.)

4900 N. Scottsdale Road, Suite 2000

Scottsdale, AZ 85251

(Address of principal executive offices)

(480) 840-8100

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 1.01 Entry into a Material Definitive Agreement

Underwriting Agreement

On August 9, 2013, Taylor Morrison Home Corporation (the “ Company ”) entered into an underwriting agreement (the “ Underwriting Agreement ”) with Credit Suisse Securities (USA) LLC and Citigroup Global Markets Inc., as representatives for the underwriters set forth on Schedule A thereto (collectively, the “ Underwriters ”), relating to the Company’s initial public offering (the “ Offering ”) of its Class A common stock, par value $0.00001 per share (the “ Class A Common Stock ”). Under the Underwriting Agreement, the Company agreed to sell 28,572,000 shares of Class A Common Stock to the Underwriters at a purchase price per share of $20.68 (the offering price to the public of $22.00 per share minus the underwriters’ discount). The Company also provided the Underwriters with an option to purchase up to an additional 4,285,800 shares of Class A Common Stock to cover over allotments. The Underwriters exercised this option in full on April 11, 2013 and the Offering closed on April 12, 2013.

The Underwriting Agreement includes customary representations, warranties and covenants by the Company. It also provides that the Company will indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “ Securities Act ”), or contribute to payments the Underwriters may be required to make because of any of those liabilities.

Certain of the Underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various investment banking services for the Company for which they received or will receive customary fees and expenses.

Reorganization Transactions

In connection with the Offering, the Company completed a series of transactions on April 9, 2013 (the “ Reorganization Transactions ”) pursuant to a Reorganization Agreement dated as of April 9, 2013 (the “ Reorganization Agreement ”) among the Company, TMM Holdings II Limited Partnership (“ New TMM ”), other subsidiaries of the Company, affiliates of TPG Global, LLC (“ TPG ”), Oaktree Capital Management, L.P. (“ Oaktree ”), JH Investments Inc. (“ JH ” and together with TPG and Oaktree, the “ Principal Equityholders ”), certain members of the Company’s management and its Board of Directors (the “ Board ”), TPG TMM Holdings II, L.P. (the “ TPG Holding Vehicle ”), OCM TMM Holdings II, L.P. (the “ Oaktree Holding Vehicle ” and, together with the TPG Holding Vehicle, the “ TPG and Oaktree Holding Vehicles ”)) and TMM Holdings Limited Partnership (“ TMM ”). The Reorganization Agreement governs the terms of the Reorganization Transactions, which are described in the Company’s Registration Statement on Form S-1 (File No. 333-185269) (the “ Registration Statement ”).

Prior to the Reorganization Transactions, as previously reported in the Registration Statement, the Company amended and restated its Certificate of Incorporation and amended and restated its By-Laws. The amended and restated Certificate of Incorporation was filed with the Delaware Secretary of State on April 9, 2013.

In the Reorganization Transactions, the existing holders of limited partnership interests in TMM, including the Principal Equityholders and certain members of the Company’s management and Board, through a series of transactions, contributed their limited partnership interests in TMM to a new limited partnership, New TMM, such that TMM and the general partner of TMM became wholly-owned subsidiaries of New TMM. The Company, through a series of transactions, became the sole owner of the general partner of New TMM, and the Company used a portion of the net cash proceeds received in the Offering to purchase common partnership units in New TMM (“ New TMM Units ”) from New TMM.

In the Reorganization Transactions:

 

   

TPG and Oaktree each formed the TPG Holding Vehicle and the Oaktree Holding Vehicle, respectively;

 

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The Principal Equityholders and members of the Company’s management and Board directly or indirectly exchanged all of their respective Class A Units, Class J Units and performance-vesting Class M Units in TMM on a one-for-one basis for new equity interests of the TPG and Oaktree Holding Vehicles with terms that are substantially the same as the Class A Units (other than certain Class A Units exchanged by JH as described below), Class J Units (other than with respect to certain vesting conditions) and performance-vesting Class M Units in TMM surrendered for exchange;

 

   

JH exchanged a portion of its Class A Units in TMM for New TMM Units to be held by JH;

 

   

Members of the Company’s management and Board exchanged all of their time-vesting Class M Units in TMM for New TMM Units with vesting terms that are substantially the same as those of the Class M Units surrendered for exchange;

 

   

New TMM directly or indirectly acquired all of the Class A Units, Class J Units and Class M Units outstanding prior to the Reorganization Transactions; and

 

   

The TPG and Oaktree Holding Vehicles directly or indirectly acquired New TMM Units.

Immediately following the consummation of the Reorganization Transactions, the limited partners of New TMM consisted of the Company, the TPG Holding Vehicle, the Oaktree Holding Vehicle, JH and certain members of the Company’s management and Board. The number of New TMM Units issued to each of the TPG and Oaktree Holding Vehicles, JH and members of the Company’s management and Board as described above was determined based on a hypothetical cash distribution by TMM of the Company’s pre-IPO value to the holders of Class A Units, Class J Units and Class M Units of TMM, the initial public offering price and the price per share paid by the Underwriters for shares of Class A Common Stock in the Offering

In connection with the Reorganization Transactions, the TPG and Oaktree Holding Vehicles, JH and members of the Company’s management and Board were also issued a number of shares of the Company’s Class B common stock, par value $0.00001 per share (the “ Class B Common Stock ”) equal to the number of New TMM Units that each received.

At the closing of the Offering, the Company also used a portion of the net proceeds received in the Offering to purchase 41,164 New TMM Units from Sheryl Palmer, 14,202 New TMM Units from Stephen Wethor, 33,961 New TMM Units from Louis Steffens, 13,173 New TMM Units from Erik Heuser, 4,116 New TMM Units from Kathleen Owen, 4,116 New TMM Units from Graham Hughes and 9,879 New TMM Units from Tawn Kelley, in each case together with the corresponding shares of Class B Common Stock held by such person and in each case for a price per New TMM Unit equal to the price per share of Class A Common Stock paid by the Underwriters to the Company in the Offering.

Put/Call Agreement

On April 15, 2013, in accordance with the terms of a put/call agreement dated as of April 9, 2013 (the “ Put/Call Agreement ”), by and among the Company and the TPG and Oaktree Holding Vehicles, the Company purchased an aggregate of 22,572,722 New TMM Units (and corresponding shares of Class B Common Stock) from the TPG Holding Vehicle and the Oaktree Holding Vehicle for a price per New TMM Unit equal to the price per share of Class A Common Stock paid by the Underwriters to the Company in the Offering. On April 15, 2013 the Company also purchased 604,449 New TMM Units (and corresponding shares of Class B Common Stock) from JH on substantially the same terms.

Limited Partnership Agreement of New TMM

On April 9, 2013, in connection with the Reorganization Transactions, the Company, the TPG Holding Vehicle, the Oaktree Holding Vehicle, JH and certain members of the Company’s management and the Board entered into the Amended and Restated Agreement of Exempted Limited Partnership of New TMM (the “New TMM LPA”). As a result of the Reorganization Transactions and in accordance with the terms of the New TMM LPA, New TMM will, through TMM and its subsidiaries, exercise stewardship

 

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over the business and affairs of Holdings and its subsidiaries and Monarch and its subsidiaries. New TMM will not conduct any activities other than direct or indirect ownership and stewardship over Holdings and Monarch and their respective subsidiaries.

The holders of New TMM Units, including the Company, will generally incur U.S. federal, state and local income taxes on their proportionate share of any net taxable income of New TMM. Net profits and net losses of New TMM will generally be allocated to its members pro rata in accordance with the percentages of their respective New TMM Units, though certain non pro rata adjustments will be made to reflect tax depreciation, amortization and other allocations. To the extent permitted under the Revolving Credit Facility (as defined below), the New TMM LPA will provide for cash distributions to its limited partners if the taxable income of New TMM will give rise to taxable income for its limited partners. In accordance with the New TMM LPA and assuming New TMM is permitted to do so under the Revolving Credit Facility, New TMM will make cash distributions to the extent feasible to the holders of the New TMM Units, including the Company, for purposes of funding their tax obligations in respect of the income of New TMM that is allocated to them. Generally, these tax distributions will be computed based on the Company’s estimate of the net taxable income of New TMM allocable to such holder of New TMM Units multiplied by an assumed tax rate equal to the greater of (x) the highest effective marginal combined U.S. federal, state and local income tax rate prescribed for an individual or corporate resident in San Francisco, California and (y) the highest combined provincial and federal income tax rate applicable to an individual or (if higher) a corporation that is a resident of Canada and is subject to tax in the province of Canada that has the highest income tax rate (in each case taking into account the nondeductibility of certain expenses and the character of the Company’s income). In addition, to the extent permitted under the Company’s Revolving Credit Facility, New TMM may make distributions to the Company without pro rata distributions to other limited partners in order to pay (i) consideration, if any, for redemption, repurchase or other acquisition of equity interests of New TMM to the extent such cash is used to redeem, repurchase or otherwise acquire the Class A Common Stock, (ii) operating, administrative and other similar costs incurred by the Company, and (iii) other payments related to (a) legal, tax, accounting and other professional fees and expenses, (b) judgments, settlements, penalties, fines or other costs and expenses in respect of any claims involving the Company and (c) other fees and expenses related to the maintenance of the Company’s existence or any securities offering, investment or acquisition transaction authorized by the Board.

The New TMM LPA provides that, subject to certain exceptions, any time the Company issues a share of its Class A Common Stock or any other equity security, the net proceeds received by the Company with respect to such issuance, if any, shall be concurrently invested in New TMM and New TMM shall issue to the Company one New TMM Unit or other economically equivalent equity interest. Conversely, if at any time, any shares of the Class A Common Stock are redeemed, repurchased or otherwise acquired, New TMM shall redeem, repurchase or otherwise acquire an equal number of New TMM Units held by the Company, upon the same terms and for the same price, as the shares of the Class A Common Stock are redeemed, repurchased or otherwise acquired.

Under the New TMM LPA, the members have agreed that the Principal Equityholders and/or one or more of their respective affiliates are permitted to engage in business activities or invest in or acquire businesses which may compete with the Company’s business or do business with any of its customer.

Under the New TMM LPA, New TMM will indemnify all of its partners, including the Company, against any and all losses and expenses related thereto incurred by reason of the fact that such person was a partner of New TMM. In the event that losses are incurred as a result of a member’s fraud or willful misconduct, such member is not entitled to indemnification under the New TMM LPA.

New TMM may be dissolved only upon the voluntary agreement of its general partner and the Principal Equityholders or as otherwise required by the laws of the Cayman Islands. Upon dissolution, New TMM will be liquidated and the proceeds from any liquidation will be applied and distributed in the following manner: (a) first, to creditors (including to the extent permitted by law, creditors who are members) in satisfaction of the liabilities of New TMM, (b) second, to establish cash reserves for contingent or unforeseen liabilities and (c) third, to the members in proportion of their interests in New TMM (other than to members holding unvested New TMM Units to the extent that their units do not vest as a result of the event causing the dissolution).

 

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Exchange Agreement

On April 9, 2013, the Company, the TPG Holding Vehicle, the Oaktree Holding Vehicle, JH and certain members of the Company’s management and the Board entered into the Exchange Agreement under which, from time to time, the holders of New TMM Units party to the agreement (or certain of their transferees) have the right to exchange their New TMM Units (along with a corresponding amount of the Class B Common Stock) for shares of the Class A Common Stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications.

Stockholders Agreement

On April 9, 2013, the existing stockholders agreement among the general partner of TMM, TMM and certain of TMM’s limited partners was terminated and the Company entered into a new stockholders agreement with the TPG Holding Vehicle, the Oaktree Holding Vehicle and JH (the “ Stockholders Agreement ”). The Stockholders Agreement contains provisions related to the composition of the Board and the committees thereof. The Stockholders Agreement also provides that the Company does not have any interest or expectancy in the business opportunities of the Principal Equityholders and of their officers, directors, agents, stockholders, members, partners, affiliates and subsidiaries and that each such party shall not have any obligation to offer the Company those opportunities. The TPG Holding Vehicle and the Oaktree Holding Vehicle agreed in the Stockholders Agreement to vote for each other’s Board nominees. In addition, the Stockholders Agreement provides that Requisite Investor Approval (as defined below) must be obtained before the Company is permitted to take certain actions, including effecting a change in control of the Company, acquiring or disposing assets valued at more than $50.0 million, incurring any indebtedness in an aggregate amount in excess of $50.0 million or making a loan in excess of such amount, issuing any equity securities (with limited exceptions), firing or hiring the Company’s Chief Executive Officer and making certain changes to the Board.

For purposes of the Stockholders Agreement, “ Requisite Investor Approval ” means, in addition to the approval of a majority vote of the Board, the approval of a director nominated by the TPG Holding Vehicle, so long as it owns at least 50% of the Company’s common stock held by it at the closing of the Offering (giving effect to the application of net proceeds), and the approval of a director nominated by the Oaktree Holding Vehicle, so long as it owns at least 50% of the Company’s common stock held by it following the Offering (giving effect to the application of net proceeds).

Registration Rights Agreement

On April 9, 2013, the existing registration rights agreement among TMM and certain of its limited partners was terminated and the Company and entered into a new registration rights agreement with the TPG Holding Vehicle, the Oaktree Holding Vehicle and certain members of the Company’s management and the Board (the “ Registration Rights Agreement ”). The Registration Rights Agreement provides the TPG Holding Vehicle and the Oaktree Holding Vehicle with certain demand registration rights, including shelf registration rights, in respect of any shares of the Class A Common Stock held by them, subject to certain conditions. In addition, in the event that the Company registers additional shares of Class A Common Stock for sale to the public following the completion of the Offering, it will be required to give notice of such registration to the TPG Holding Vehicle, the Oaktree Holding Vehicle, JH and the members of the Company’s management and the Board party to the agreement of its intention to effect such a registration, and, subject to certain limitations, include shares of Class A Common Stock held by them in such registration. The Company undertakes in the Registration Rights Agreement to file a shelf registration statement as soon as it meets the applicable eligibility criteria and to use commercially reasonable efforts to have the shelf registration statement declared effective as soon as practicable and to remain effective in order to register the exchange of New TMM Units together with shares of Class B Common Stock for shares of Class A Common Stock by certain members of the Company’s management and the Board from time to time. The Company is required to bear the registration expenses, other than underwriting discounts and commissions and transfer taxes, associated with any registration of shares pursuant to the agreement. The agreement includes customary indemnification provisions in favor of the TPG Holding Vehicle, the Oaktree Holding Vehicle, JH and the members of the Company’s management and the Board party to the agreement, any person who is or might be deemed a control person within the meaning of the Securities Act and the Securities Exchange Act of 1934, as amended, and related parties against certain losses and liabilities (including reasonable costs of investigation and legal expenses) arising out of or based upon any filing or other disclosure made by the Company under the securities laws relating to any such registration.

 

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Governance Agreements

On April 9, 2013, the Company entered into governance agreements setting forth certain matters with respect to the management of its indirect operating subsidiaries, Taylor Morrison Holdings, Inc. (“ Holdings ”) and Monarch Communities Inc. (“ Monarch ”). The Company entered into the U.S. Parent Governance Agreement with the TPG Holding Vehicle, the Oaktree Holding Vehicle, JH and Holdings and the Canadian Parent Governance Agreement with the TPG Holding Vehicle, the Oaktree Holding Vehicle, JH and Monarch. The U.S. Parent Governance Agreement and the Canadian Parent Governance Agreement provide that the composition of the board of Holdings and Monarch, respectively, shall each generally be identical to that of the Board and that the Principal Equityholders have the right to nominate representatives to the committees of such board on the same basis as set forth in the Stockholders Agreement. The U.S. Parent Governance Agreement and the Canadian Parent Governance Agreement also provide affiliates of the Principal Equityholders with approval rights over certain actions on the same basis as set forth in the Stockholders Agreement.

Indemnification Agreements

On April 9, 2013, the Company entered into indemnification agreements with each of its executive officers and directors. These agreements provide, in general, that the Company will indemnify the applicable executive officer and director to the fullest extent permitted by law in connection with their service to the Company or on the Company’s behalf.

Third Amendment to the Amended and Restated Credit Agreement

On April 12, 2013, Taylor Morrison Communities, Inc. and Monarch Corporation, each a subsidiary of the Company (collectively, the “ Borrowers ”), entered into an amendment agreement (the “ Amendment ”) to the Credit Agreement dated as of July 13, 2011, as amended and restated as of April 13, 2012 and as thereafter amended as of August 15, 2012 and December 27, 2012 (the “ Revolving Credit Facility ” and as amended by the Amendment, the “Restated Revolving Credit Facility” ), among the Borrowers, TMM, Credit Suisse AG, as administrative agent, and the other parties thereto. The Amendment, among other things, (a) converts the Revolving Credit Facility into an unsecured facility, (b) reduces the Eurodollar applicable margin from 3.25% to 2.00% (subject to a step-up or step-down based on a capitalization ratio) and base rate applicable margin from 2.25% to 1.00% (subject to a step-up or step-down based on a capitalization ratio), (c) increases the aggregate amount of commitments under the Revolving Credit Facility to $400.0 million, of which $200.0 million will be available for letters of credit, (d) permits the Borrowers to increase the Restated Revolving Credit Facility up to an additional $200.0 million through an accordion feature, (e) permits the Borrowers to borrow up to the commitment amount under the Restated Revolving Credit Facility, unless the capitalization ratio as of the most recently ended fiscal quarter exceeds 0.55 to 1.00, in which case, borrowing availability under the Restated Revolving Credit Facility will be measured by reference to a borrowing base formula to be calculated quarterly (or more frequently as the Borrowers may elect) and (f) extends the maturity date of the facility to April 12, 2017.

 

Item 1.02 Termination of a Material Definitive Agreement

The information contained in Item 1.01 above is hereby incorporated in this Item 1.02 by reference.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

The information contained in Item 1.01 above is hereby incorporated in this Item 2.03 by reference.

 

Item 3.02 Unregistered Sales of Equity Securities

On April 9, 2013, in connection with the Reorganization Transactions, the Company issued an aggregate of 93,736,964 shares of Class B Common Stock at a purchase price of $0.00001 per share to the

 

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TPG Holding Vehicle, the Oaktree Holding Vehicle, JH and certain members of the Company’s management and the Board pursuant to the terms of Class B Common Stock Subscription Agreements between the Company and each such purchaser. The shares of Class B Common Stock were issued in reliance on the registration exemption contained in Section 4(a)(2) of the Securities Act, on the basis that the transaction did not involve a public offering, as well as the safe harbor provided by Rule 506 of Regulation D under the Securities Act . No underwriters were involved in the transaction.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On April 15, 2013, the Company was informed by Brad Carr, President of Monarch Corporation, the indirect subsidiary of the Company through which the Company conducts its business in Canada (“ Monarch Corp. ”), that he would be resigning within the next 60 days.

Consequently, the Company announced on April 15, 2013 that Mr. Carr’s duties will be assumed on an interim basis by David George, the current Executive Vice President and General Counsel of Monarch Corp., who joined Monarch Corp. as a key executive over 25 years ago, and Emilio Tesolin, the current President of Monarch Corp.’s high-rise business, who has been with Monarch Corp. for over 15 years. Ms. Palmer, the Company’s President and Chief Executive Officer, will continue to provide oversight of Monarch Corp.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The information contained in Item 1.01 above is hereby incorporated in this Item 5.03 by reference.

 

Item 9.01 Financial Statements and Exhibits

 

  (d) Exhibits

 

Exhibit
No.

  

Description

  3.1    Amended and Restated Certificate of Incorporation.
  3.2    Amended and Restated By-laws.
10.1    Registration Rights Agreement, dated as of April 9, 2013, by and among Taylor Morrison Home Corporation and the other parties named therein.
10.2    Amended and Restated Agreement of Exempted Limited Partnership of TMM Holdings II Limited Partnership, dated as of April 9, 2013.
10.3    Exchange Agreement, dated as of April 9, 2013, by and among Taylor Morrison Home Corporation and the other parties named therein.
10.4    Stockholders Agreement, dated as of April 9, 2013, by and among Taylor Morrison Home Corporation and the other parties named therein.
10.5    Put/Call Agreement, dated as of April 9, 2013, by and among Taylor Morrison Home Corporation and TPG TMM Holdings II, L.P. and OCM TMM Holdings II, L.P.
10.6    Reorganization Agreement, dated as of April 9, 2013, by and among Taylor Morrison Home Corporation and the other parties named therein.
10.7    U.S. Parent Governance Agreement, dated as of April 9, 2013, by and among Taylor Morrison Home Corporation, Taylor Morrison Holdings, Inc. and the other parties named therein.
10.8    Canadian Parent Governance Agreement, dated as of April 9, 2013, by and among Taylor Morrison Home Corporation, Monarch Communities Inc. and the other parties named therein.
10.9    Amendment Agreement, dated as of April 12, 2013, to the Credit Agreement dated as of July 13, 2011 (as amended and restated as of April 13, 2012 and as thereafter amended as of August 15, 2012 and December 27, 2012), among Taylor Morrison Communities, Inc., Monarch Corporation, TMM Holdings Limited Partnership and the other parties named therein.

 

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SIGNATURES

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

 

TAYLOR MORRISON HOME CORPORATION
By:  

/s/ Darrell C. Sherman

Name:   Darrell C. Sherman
Title:   Vice President, Secretary and General Counsel

Dated: April 15, 2013

 

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EXHIBIT INDEX

 

Exhibit
No.

  

Description

  3.1    Amended and Restated Certificate of Incorporation.
  3.2    Amended and Restated By-laws.
10.1    Registration Rights Agreement, dated as of April 9, 2013, by and among Taylor Morrison Home Corporation and the other parties named therein.
10.2    Amended and Restated Agreement of Exempted Limited Partnership of TMM Holdings II Limited Partnership, dated as of April 9, 2013.
10.3    Exchange Agreement, dated as of April 9, 2013, by and among Taylor Morrison Home Corporation and the other parties named therein.
10.4    Stockholders Agreement, dated as of April 9, 2013, by and among Taylor Morrison Home Corporation and the other parties named therein.
10.5    Put/Call Agreement, dated as of April 9, 2013, by and among Taylor Morrison Home Corporation and TPG TMM Holdings II, L.P. and OCM TMM Holdings II, L.P.
10.6    Reorganization Agreement, dated as of April 9, 2013, by and among Taylor Morrison Home Corporation and the other parties named therein.
10.7    U.S. Parent Governance Agreement, dated as of April 9, 2013, by and among Taylor Morrison Home Corporation, Taylor Morrison Holdings, Inc. and the other parties named therein.
10.8    Canadian Parent Governance Agreement, dated as of April 9, 2013, by and among Taylor Morrison Home Corporation, Monarch Communities Inc. and the other parties named therein.
10.9    Amendment Agreement, dated as of April 12, 2013, to the Credit Agreement dated as of July 13, 2011 (as amended and restated as of April 13, 2012 and as thereafter amended as of August 15, 2012 and December 27, 2012), among Taylor Morrison Communities, Inc., Monarch Corporation, TMM Holdings Limited Partnership and the other parties named therein.

 

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Exhibit 3.1

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

of

TAYLOR MORRISON HOME CORPORATION

Pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware (the “ DGCL ”), Taylor Morrison Home Corporation has adopted this Amended and Restated Certificate of Incorporation (this “ Certificate ”) restating, integrating and further amending its Certificate of Incorporation (originally filed November 15, 2012), which Certificate has been duly proposed by the directors and adopted by the stockholders of the Corporation (by written consent pursuant to Section 228 of the DGCL) in accordance with the provisions of Sections 242 and 245 of the DGCL. Unless defined in the body of this Certificate, capitalized terms used herein have the meanings assigned to them in Article 16.

1. Name . The name of the Corporation is Taylor Morrison Home Corporation.

2. Address; Registered Office and Agent . The address of the Corporation’s registered office is 160 Greentree Drive, Suite 101, in the City of Dover, County of Kent, State of Delaware 19904, and the name of its registered agent at such address is National Registered Agents, Inc.

3. Purposes . The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

4. Number of Shares . The total number of shares of all classes of stock that the Corporation shall have authority to issue is (A): 600,000,000 shares of common stock, divided into 400,000,000 shares of Class A common stock, with the par value of $0.00001 per share (the “ Class A Common Stock ”) and 200,000,000 shares of Class B common stock, with the par value of $0.00001 per share (the “ Class B Common Stock ” and together with the Class A Common Stock, the “ Common Stock ”) and (B) 50,000,000 shares of preferred stock, with the par value of $0.00001 per share (the “ Preferred Stock ”). Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding, the number of authorized shares of any of the Class A Common Stock, Class B Common Stock or Preferred Stock may be increased or decreased, in each case by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL, and no vote of the holders of any of the Class A Common Stock, Class B Common Stock or Preferred Stock voting separately as a class will be required therefor. Notwithstanding the foregoing, the number of authorized shares of any particular class may not be decreased below the number of shares of such class then outstanding plus, in the case of Class A Common Stock, the number of shares of Class A Common Stock issuable in connection with (i) the exchange of all outstanding Class B Common Stock and all outstanding New TMM Units pursuant to Section 2.1 of the Exchange Agreement and (ii) the exercise of outstanding options, warrants, exchange rights, conversion rights or similar rights for Class A Common Stock.


5. Classes of Shares . The designation, relative rights, preferences and limitations of the shares of each class of stock are as follows:

5.1 Common Stock .

(i) Voting Rights .

(1) Except as may otherwise be provided in this Certificate of Incorporation or by applicable law, each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote and shall vote together as a single class on all matters (or, if any holders of Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class with the holders of Preferred Stock); provided , however , that, to the fullest extent permitted by law and subject to Section 5.1(i)(2), holders of Common Stock, as such, will have no voting power with respect to, and will not be entitled to vote on, any amendment to this Certificate (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding class or series of Preferred Stock if the holders of the affected class or series of Preferred Stock are entitled, either separately or together with the holders of one or more other classes or series, to vote thereon under this Certificate (including any certificate of designations relating to any series of Preferred Stock) or under the DGCL.

(2) The holders of the outstanding shares of Class B Common Stock shall be entitled to vote separately as a class upon any amendment to this Certificate (including by merger, consolidation, reorganization or similar event, it being understood that any such merger, consolidation or other business combination that constitutes a Disposition Event in which holders of Class B Common Stock are required to exchange such Common Stock and New TMM Units pursuant to Section 3.8 of the New TMM LPA in such Disposition Event and receive consideration in such Disposition Event in accordance with the terms of the New TMM LPA as in effect prior to such Disposition Event shall not be deemed an amendment hereof) that would alter or change the powers, preferences, or special rights of the Class B Common Stock so as to affect them adversely.

(ii) Dividends; Stock Splits or Combinations .

(1) Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference senior to or the right to participate with the Class A Common Stock with respect to the payment of dividends, dividends of cash or property may be declared and paid on the Class A Common Stock out of the assets of the Corporation that are by law available therefor, at the times and in the amounts as the board of directors of the Corporation (the “ Board ”) in its discretion may determine. Except as otherwise

 

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permitted by the New TMM LPA or as otherwise agreed by holders of a majority of the outstanding shares of Class B Common Stock, dividends of cash or property may be declared and paid on the Class A Common Stock only if there is a concurrent and proportionate dividend paid to the holders of outstanding New TMM Units.

(2) Except as provided in Section 5.1(ii)(3) with respect to stock dividends, dividends of cash or property may not be declared or paid on the Class B Common Stock.

(3) In no event will any stock dividend, stock split, reverse stock split, combination of stock, reclassification or recapitalization be declared or made on any class of Common Stock (each, a “ Stock Adjustment ”) unless (a) a corresponding Stock Adjustment in the class of Common Stock not so adjusted (or corresponding voting power adjustment in the case of shares of Class B Common Stock) at the time outstanding is made in the same proportion and the same manner and (b) the Stock Adjustment has been reflected in the same economically equivalent manner on all New TMM Units. Stock dividends with respect to Class A Common Stock may only be paid with Class A Common Stock and/or Preferred Stock. Stock dividends with respect to Class B Common Stock may only be paid with Class B Common Stock and/or Preferred Stock.

(iii) Liquidation and Other Events .

(1) In the case of any consolidation, merger or similar event that constitutes a Disposition Event and in which holders of Class B Common Stock are required to exchange such Common Stock and New TMM Units pursuant to Section 3.8 of the New TMM LPA, the Corporation shall have the right to repurchase each outstanding share of Class B Common Stock upon the consummation of such Disposition Event for an amount per share equal to the par value thereof, and thereafter such holders of Class B Common Stock shall no longer hold such Class B Common Stock and such Class B Common Stock will be transferred to the Corporation and thereupon shall be retired. For the avoidance of doubt, nothing in this Section 5.1(iii)(1) shall impair the right of a holder of Class B Common Stock and Units to exchange such Class B Common Stock and Units pursuant to Section 2.1 of the Exchange Agreement.

(2) In the case of any consolidation, merger or similar event that shall be subject to Section 3.9 of the New TMM LPA (other than a Disposition Event in which holders of Class B Common Stock are required to exchange such Common Stock and New TMM Units pursuant to Section 3.8 of the New TMM LPA and receive consideration in such Disposition Event in accordance with the terms of the New TMM Units as in effect prior to such Disposition Event), the Corporation shall make, and shall cause to be made, proper provision to convert all outstanding shares of Class B Common Stock into securities, with substantially the same voting, exchange and economic rights to the Class B Common Stock of the surviving entity (or, as applicable, of any other such entity into which New TMM Units (in combination with shares of Class B Common Stock) are exchangeable following such event).

 

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(3) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation and of the preferential and other amounts, if any, to which the holders of Preferred Stock are entitled, if any, the holders of all outstanding shares of Common Stock will be entitled to receive, pari passu, an amount per share equal to the par value thereof, and thereafter the holders of all outstanding shares of Class A Common Stock will be entitled to receive the remaining assets of the Corporation available for distribution ratably in proportion to the number of shares of Class A Common Stock. Without limiting the rights of the holders of Class B Common Stock to exchange their shares of Class B Common Stock together with New TMM Units for shares of Class A Common Stock in accordance with the Exchange Agreement (or for the consideration payable in respect of shares of Class A Common Stock in such voluntary or involuntary liquidation, dissolution or winding up), the holders of shares of Class B Common Stock, as such, will not be entitled to receive, with respect to such shares, any assets of the Corporation in excess of the par value thereof, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

(iv) Retirement of Class B Common Stock . In the event that no New TMM Units remain exchangeable for shares of Class A Common Stock, the Class B Common Stock will be transferred to the Corporation and thereupon shall be retired. In the event that any outstanding share of Class B Common Stock shall cease to be held by a holder of New TMM Units, such share shall automatically and without further action on the part of the Corporation or any holder of Class B Common Stock be transferred to the Corporation and thereupon shall be retired and cease to be outstanding and may not be reissued by the Corporation.

(v) Exchange of Class B Common Stock and New TMM Units . Class B Common Stock may be exchanged from time to time together with a corresponding New TMM Unit for Class A Common Stock in accordance with the Exchange Agreement.

(vi) Taxes . The issuance of shares of Class A Common Stock upon the exercise by the Corporation of its right under Section 2.1 of the Exchange Agreement to exchange shares of Class B Common Stock and New TMM Units will be made without charge to the holders of the shares of Class B Common Stock for any stamp or other similar tax in respect of the issuance, unless any such shares of Class A Common Stock are to be issued in a name other than that of the then record holder of the shares of Class B Common Stock being exchanged, in which case the person or persons requesting the issuance thereof will pay to the Corporation the amount of any tax that may be payable in respect of any transfer involved in the issuance or will establish to the reasonable satisfaction of the Corporation that the tax has been paid or is not payable.

5.2 Preferred Stock . Shares of Preferred Stock may be issued from time to time in one or more series of any number of shares, provided that the aggregate number of shares issued and not retired of any and all such series shall not

 

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exceed the total number of shares of Preferred Stock hereinabove authorized, and with such powers, including voting powers, if any, and the designations, preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, all as shall hereafter be stated and expressed in the resolution or resolutions providing for the designation and issue of such shares of Preferred Stock from time to time adopted by the Board pursuant to authority so to do which is hereby expressly vested in the Board. The powers, including voting powers, if any, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. Each series of shares of Preferred Stock: (a) may have such voting rights or powers, full or limited, if any; (b) may be subject to redemption at such time or times and at such prices, if any; (c) may be entitled to receive dividends (which may be cumulative or non-cumulative) at such rate or rates, on such conditions and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or series of stock, if any; (d) may have such rights upon the voluntary or involuntary liquidation, winding up or dissolution of, upon any distribution of the assets of, or in the event of any merger, sale or consolidation of, the Corporation, if any; (e) may be made convertible into or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock of the Corporation (or any other securities of the Corporation or any other person) at such price or prices or at such rates of exchange and with such adjustments, if any; (f) may be entitled to the benefit of a sinking fund to be applied to the purchase or redemption of shares of such series in such amount or amounts, if any; (g) may be entitled to the benefit of conditions and restrictions upon the creation of indebtedness of the Corporation or any subsidiary, upon the issue of any additional shares (including additional shares of such series or of any other series) and upon the payment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the Corporation or any subsidiary of, any outstanding shares of the Corporation, if any; (h) may be subject to restrictions on transfer or registration of transfer, or on the amount of shares that may be owned by any person or group of persons; and (i) may have such other relative, participating, optional or other special rights, qualifications, limitations or restrictions thereof, if any; all as shall be stated in said resolution or resolutions of the Board providing for the designation and issue of such shares of Preferred Stock.

6. Board of Directors .

6.1 Number of Directors . (A) The business and affairs of the Corporation shall be managed by, or under the direction of, the Board. Except as otherwise provided for or fixed pursuant to Article 5 relating to the rights of the holders of any series of Preferred Stock to elect additional directors, the total number of directors constituting the entire Board shall be not less than three nor more than fifteen, with the then-authorized number of directors being fixed from time to time by the Board.

(B) During any period when the holders of any series of Preferred Stock have the right to elect additional directors as provided for or fixed pursuant to the

 

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provisions of Article 5, then upon the commencement, and for the duration, of the period during which such right continues: (i) the then total authorized number of directors of the Corporation shall automatically be increased by such specified number of additional directors, and the holders of such Preferred Stock shall be entitled to elect the additional directors pursuant to the provisions of the Board’s designation for the series of Preferred Stock, and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to such provisions, whichever occurs earlier, subject to his or her earlier death, disqualification, resignation or removal. Except as otherwise provided by the Board in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate and the total and authorized number of directors of the Corporation shall be reduced accordingly.

6.2 Staggered Board . The Board (other than those directors elected by the holders of any series of Preferred Stock provided for or fixed pursuant to Article 5 (the “ Preferred Stock Directors ”)) shall be divided into three classes, as nearly equal in number as possible, designated Class I, Class II and Class III. Class I directors shall initially serve until the first annual meeting of stockholders following the effectiveness of this Article; Class II directors shall initially serve until the second annual meeting of stockholders following the effectiveness of this Article; and Class III directors shall initially serve until the third annual meeting of stockholders following the effectiveness of this Article. Commencing with the first annual meeting of stockholders following the effectiveness of this Article, each director of each class the term of which shall then expire shall be elected to hold office for a three-year term and until such director’s successor has been duly elected and qualified. In case of any increase or decrease, from time to time, in the number of directors (other than Preferred Stock Directors), the number of directors in each class shall be apportioned as nearly equal as possible. The Board is authorized to assign members of the Board already holding office to Class I, Class II or Class III.

6.3 Vacancies and Newly Created Directorships . Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board resulting from death, resignation, retirement, disqualification, removal or other cause shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board. Any director so chosen shall hold office until the next election of the class for which such director shall have been chosen and until his or her successor shall be elected and qualified. No decrease in the number of directors shall shorten the term of any director then in office.

 

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6.4 Removal of Directors for Cause . Except for such additional directors, if any, as are elected by the holders of any series of Preferred Stock as provided for or fixed pursuant to Article 5, any director or the entire Board may be removed from office at any time, but only for cause and only by the affirmative vote of at least 75% of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class; provided , however , that prior to the Trigger Date, any director of the Corporation may be removed with or without cause by the holders of the majority of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

7. Meetings of Stockholders .

7.1 No Action by Written Consent after the Trigger Date . From and after the Trigger Date, any action required or permitted to be taken by the stockholders of the Corporation may be effected only at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.

7.2 Special Meetings of Stockholders . Subject to any special rights of the holders of any series of Preferred Stock, and to the requirements of applicable law, special meetings of stockholders of the Corporation may be called only (i) by or at the direction of the Board pursuant to a written resolution adopted by a majority of the total number of directors which the Corporation would have if there were no vacancies or (ii) by or at the direction of the Chairman or Vice-Chairman of the Board, the Chief Executive Officer of the Corporation. In addition, prior to the Trigger Date, special meetings of stockholders of the Corporation may be called by the Secretary of the Corporation at the request of the holders of fifty percent (50%) or more of the outstanding shares of Class B Common Stock. Any business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

7.3 Election of Directors by Written Ballot . Unless and except to the extent that the By-laws shall so require, the election of the Directors need not be by written ballot.

8. Business Combinations .

8.1 Opt Out of DGCL 203 . The Corporation shall not be governed by Section 203 of the DGCL.

8.2 Limitations on Business Combinations . Notwithstanding the foregoing, the Corporation shall not engage in any business combination (as defined below), at any point in time at which the Corporation’s Class A Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, with any interested stockholder (as defined below) for a period of three (3) years following the time that such stockholder became an interested stockholder, unless:

(i) prior to such time, the Board approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder, or

 

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(ii) upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock (as defined below) of the Corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (i) persons who are directors and also officers or (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or

(iii) at or subsequent to such time, the business combination is approved by the Board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two thirds of the outstanding voting stock of the Corporation which is not owned by the interested stockholder.

8.3 Definitions . For purposes of this Article 8, references to:

(i) “affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another person.

(ii) “associate,” when used to indicate a relationship with any person, means: (i) any corporation, partnership, unincorporated association or other entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of voting stock; (ii) any trust or other estate in which such person has at least a 20% beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such person, or any relative of such spouse, who has the same residence as such person.

(iii) “business combination,” when used in reference to the Corporation and any interested stockholder of the Corporation, means:

(1) any merger or consolidation of the Corporation or any direct or indirect majority-owned subsidiary of the Corporation (a) with the interested stockholder, or (b) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the interested stockholder and as a result of such merger or consolidation paragraph (b) of this Article 8 is not applicable to the surviving entity;

(2) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a stockholder of the Corporation, to or with the interested stockholder,

 

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whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock of the Corporation;

(3) any transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority-owned subsidiary of the Corporation of any stock of the Corporation or of such subsidiary to the interested stockholder, except: (a) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which securities were outstanding prior to the time that the interested stockholder became such; (b) pursuant to a merger under Section 251(g) of the DGCL; (c) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which security is distributed, pro rata to all holders of a class or series of stock of the Corporation subsequent to the time the interested stockholder became such; (d) pursuant to an exchange offer by the Corporation to purchase stock made on the same terms to all holders of said stock; or (e) any issuance or transfer of stock by the Corporation; provided , however , that in no case under items (c)-(e) of this subsection (3) shall there be an increase in the interested stockholder’s proportionate share of the stock of any class or series of the Corporation or of the voting stock of the Corporation (except as a result of immaterial changes due to fractional share adjustments);

(4) any transaction involving the Corporation or any direct or indirect majority-owned subsidiary of the Corporation which has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the Corporation or of any such subsidiary which is owned by the interested stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the interested stockholder; or

(5) any receipt by the interested stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of the Corporation), of any loans, advances, guarantees, pledges, or other financial benefits (other than those expressly permitted in subsections (1)-(4) above) provided by or through the Corporation or any direct or indirect majority-owned subsidiary.

(iv) “control,” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract, or otherwise. A person who is the owner of 20% or more of the outstanding voting stock of the Corporation, partnership, unincorporated association or other entity shall be presumed to

 

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have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person holds voting stock, in good faith and not for the purpose of circumventing this Article 8, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity.

(v) “interested stockholder” means any person (other than the Corporation or any direct or indirect majority-owned subsidiary of the Corporation) that (i) is the owner of 15% or more of the outstanding voting stock of the Corporation, or (ii) is an affiliate or associate of the Corporation and was the owner of 15% or more of the outstanding voting stock of the Corporation at any time within the three (3) year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder, and the affiliates and associates of such person; provided , however , that the term “interested stockholder” shall not include (a) the Investors or sponsor transferees, or (b) any person whose ownership of shares in excess of the 15% limitation set forth herein is the result of any action taken solely by the Corporation; provided that such person specified in this clause (b) shall be an interested stockholder if thereafter such person acquires additional shares of voting stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an interested stockholder, the voting stock of the Corporation deemed to be outstanding shall include stock deemed to be owned by the person through application of the definition of “owner” below but shall not include any other unissued stock of the Corporation which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

(vi) “owner,” including the terms “own” and “owned,” when used with respect to any stock, means a person that individually or with or through any of its affiliates or associates:

(1) beneficially owns such stock, directly or indirectly; or

(2) has (a) the right to acquire such stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided , however , that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by such person or any of such person’s affiliates or associates until such tendered stock is accepted for purchase or exchange; or (b) the right to vote such stock pursuant to any agreement, arrangement or understanding; provided , however , that a person shall not be deemed the owner of any stock because of such person’s right to vote such stock if the agreement, arrangement or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten (10) or more persons; or

(3) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in item (b) of subsection (2) above), or disposing of such stock with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such stock.

 

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(vii) “person” means any individual, corporation, partnership, unincorporated association or other entity.

(viii) “stock” means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest.

(ix) “sponsor transferee” means any Person who acquires voting stock of the Corporation from a Principal Stockholder (other than in a public offering) and who is designated in writing by such Principal Stockholder as a “sponsor transferee.”

(x) “voting stock” means stock of any class or series entitled to vote generally in the election of directors.

9. Corporate Opportunity .

9.1 Scope . The provisions of this Article 9 are set forth to define, to the extent permitted by applicable law, the duties of Exempted Persons (as defined below) to the Corporation with respect to certain classes or categories of business opportunities. “ Exempted Persons ” means each Investor and its respective Affiliates (other than the Corporation and its subsidiaries) and all of its respective partners, principals, directors, officers, members, managers and/or employees, including any of the foregoing who serve as officers or directors of the Corporation.

9.2 Competition and Allocation of Corporate Opportunities . The Exempted Persons shall not have any fiduciary duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as the Corporation or any of its subsidiaries. To the fullest extent permitted by applicable law, the Corporation, on behalf of itself and its subsidiaries, renounces any interest or expectancy of the Corporation and its subsidiaries in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to the Exempted Persons, even if the opportunity is one that the Corporation or its subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, and each such Exempted Person shall have no duty to communicate or offer such business opportunity to the Corporation and, to the fullest extent permitted by applicable law, shall not be liable to the Corporation or any of its subsidiaries for breach of any fiduciary or other duty, as a director or officer or otherwise, by reason of the fact that such Exempted Person pursues or acquires such business opportunity, directs such business opportunity to another person or fails to present such business opportunity, or information regarding such business opportunity, to the Corporation or its subsidiaries.

 

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9.3 Certain Matters Deemed Not Corporate Opportunities . In addition to and notwithstanding the foregoing provisions of this Article 9, a corporate opportunity shall not be deemed to belong to the Corporation if it is a business opportunity that the Corporation is not financially able or contractually permitted or legally able to undertake, or that is, from its nature, not in the line of the Corporation’s business or is of no practical advantage to it or that is one in which the Corporation has no interest or reasonable expectancy.

9.4 Amendment of this Article . No amendment or repeal of this Article 9 in accordance with the provisions of Article 13 shall apply to or have any effect on the liability or alleged liability of any Exempted Person for or with respect to any activities or opportunities of which such Exempted Person becomes aware prior to such amendment or repeal. This Article 9 shall not limit any protections or defenses available to, or indemnification or advancement rights of, any director or officer of the Corporation under this Certificate, the By-laws or applicable law.

10. Limitation of Liability .

(a) To the fullest extent permitted under the DGCL, as amended from time to time, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director.

(b) Any amendment or repeal of Section 10(a) shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment or repeal.

11. Indemnification .

11.1 Right to Indemnification . The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “ Covered Person ”) who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “ Proceeding ”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another entity or enterprise, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 11.3, the Corporation shall not be required to indemnify a Covered Person in connection with a Proceeding (or part thereof) commenced by such Covered Person (other than a Proceeding brought by such Covered Person (i) by way of defense or counterclaim, or (ii) to enforce such Covered Person’s rights to indemnification, advancement or contribution under any agreement, certificate of incorporation, bylaws or under statute or other law) unless the commencement of such Proceeding (or part thereof) by the Covered Person was authorized by the Board.

 

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11.2 Advancement of Expenses . To the extent not prohibited by applicable law, the Corporation shall advance the expenses (including attorneys’ fees) incurred by a Covered Person that is or was a director of the Corporation in defending any Proceeding in advance of its final disposition and the Corporation may advance the expenses (including attorneys’ fees) incurred by any other Covered Person; provided , however , that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article 11 or otherwise; such undertaking shall be unsecured and interest free and shall be accepted without regard to the Covered Person’s ability to repay amounts advanced and without regard to the Covered Person’s entitlement to indemnification.

11.3 Claims . If a claim for indemnification or advancement of expenses under this Article 11 is not paid in full within thirty (30) days after a written claim therefor by the Covered Person has been received by the Corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.

11.4 Nonexclusivity of Rights . The rights conferred on any Covered Person by this Article 11 shall not be exclusive of any other rights that such Covered Person may have or hereafter acquire under any statute, provision of this Certificate, the By-laws, agreement, vote of stockholders or disinterested directors or otherwise.

11.5 Other Sources .

(a) The Corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another entity or enterprise shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such other entity or enterprise.

(b) In all events, (i) the Corporation hereby agrees that it is the indemnitor of first resort (i.e. its obligation to Indemnitee to provide advancement and/or indemnification to such Covered Person are primary and any obligation of the Principal Stockholders (including any Affiliate thereof other than the Corporation) to provide advancement or indemnification hereunder or under any other indemnification agreement (whether pursuant to contract, by-laws or charter), or any obligation of any insurer of the Principal Stockholders to provide insurance coverage, for the same expenses, liabilities, judgments, penalties, fines and amounts paid in settlement

 

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(including all interest, assessments and other charges paid or payable in connection with or in respect of such expenses, liabilities, judgments, penalties, fines and amounts paid in settlement) incurred by such Covered Person are secondary and (ii) if any Principal Stockholder (or any Affiliate thereof, other than the Corporation) pays or causes to be paid, for any reason, any amounts otherwise indemnifiable hereunder or under any other indemnification agreement (whether pursuant to contract, by-laws or charter) with such Covered Person, then (x) such Principal Stockholder (or such Affiliate, as the case may be), as the case may be, shall be fully subrogated to all rights of such Covered Person with respect to such payment and (y) the Corporation shall fully indemnify, reimburse and hold harmless such Principal Stockholder (or such other Affiliate), as the case may be, for all such payments actually made by such Principal Stockholder (or such other Affiliate).

11.6 Amendment or Repeal . Any amendment or repeal of the foregoing provisions of this Article 11 shall not adversely affect any right or protection hereunder of any Covered Person in respect of any act or omission occurring prior to the time of such amendment or repeal.

11.7 Other Indemnification and Prepayment of Expenses . This Article 11 shall not limit the right of the Corporation, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.

12. Adoption, Amendment or Repeal of By-Laws . In furtherance and not in limitation of the powers conferred by law, the Board is expressly authorized to make, alter, amend or repeal the By-laws subject to the power of the stockholders of the Corporation entitled to vote with respect thereto to make, alter, amend or repeal the By-laws; provided , that with respect to the powers of stockholders entitled to vote with respect thereto to make, alter, amend or repeal the By-laws, from and after the Trigger Date, in addition to any other vote otherwise required by law, the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of the outstanding shares of capital stock of the Corporation entitled to vote with respect thereto, voting together as a single class, shall be required to make, alter, amend or repeal the By-laws.

13. Adoption, Amendment and Repeal of Certificate . The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate, in the manner now or hereafter prescribed by the DGCL, and all rights conferred upon stockholders herein are granted subject to this reservation. Notwithstanding anything to the contrary contained in this Certificate, and notwithstanding that a lesser percentage may be permitted from time to time by applicable law, no provision of Article 6, Sections 7.1 and 7.2 of Article 7 or Articles 8-14 may be altered, amended or repealed in any respect, nor may any provision or bylaw inconsistent therewith be adopted, unless in addition to any other vote required by this Certificate or otherwise required by law, (i) prior to the Trigger Date, such alteration, amendment, repeal or adoption is approved by, in addition to any other vote otherwise required by law, the affirmative vote of the holders of a majority of the voting power of

 

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the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, and (ii) from and after the Trigger Date, such alteration, amendment, repeal or adoption is approved by, in addition to any other vote otherwise required by law, the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, at a meeting of the stockholders called for that purpose.

14. Forum for Adjudication of Disputes . Unless the Corporation consents in writing to the selection of alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL or (d) any action asserting a claim governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of consent to the provision of this Article 14.

15. Severability . If any provision or provisions of this Certificate shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Certificate (including, without limitation, each portion of any paragraph of this Certificate containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of this Certificate (including, without limitation, each such portion of any paragraph of this Certificate containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by law.

16. Definitions . As used in this Certificate, unless the context otherwise requires, the term:

(a) “ Affiliate ” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another person. For the purposes of this definition, “control,” when used with respect to any Person, means the power to direct or cause the direction of the affairs or management of that Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by contract, credit arrangement or otherwise.

(b) “ Board ” is defined in Section 5.1(ii)(1).

(c) “ By-laws ” means the By-laws of the Corporation, as such By-laws may be amended from time to time.

 

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(d) “ Certificate ” is defined in the preamble.

(e) “ Disposition Event ” has the meaning attributed to such term in the New TMM LPA.

(f) “ Class A Common Stock ” is defined in Section 4.

(g) “ Class B Common Stock ” is defined in Section 4.

(h) “ Common Stock ” is defined in Section 4.

(i) “ Corporation ” means Taylor Morrison Home Corporation.

(j) “ Covered Person ” is defined in Section 11.1.

(k) “ DGCL ” is defined in the preamble.

(l) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and any successor law or statute.

(m) “ Exempted Persons ” is defined in Section 9.1.

(n) “ Exchange Agreement ” has the meaning attributed to such term in the Stockholders Agreement.

(o) “ Investors ” means the Principal Stockholders and the JHI Entities.

(p) “ JHI Entities ” means any investment funds affiliated with JH Investments, Inc. and their respective successors and Affiliates.

(q) “ New TMM ” means TMM Holdings II, Limited Partnership.

(r) “ New TMM LPA ” means the Limited Partnership Agreement of New TMM as in effect from time to time.

(s) “ New TMM Units ” has the meaning attributed to such term in the Stockholders Agreement.

(t) “ Oaktree Entities ” means any investment funds affiliated with Oaktree Capital Management, L.P. and their respective successors and Affiliates.

(u) “ Preferred Stock ” is defined in Section 4.

(v) “ Preferred Stock Directors ” is defined in Section 6.2.

(w) “ Principal Stockholders ” means collectively (i) the Oaktree Entities and (ii) the TPG Entities.

 

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(x) “ Proceeding ” is defined in Section 11.1.

(y) “ Stockholders Agreement ” means the Stockholders Agreement among the Corporation, TPG TMM Holdings II, L.P., Oaktree TMM Holdings II, L.P. and JHI Holding Limited Partnership, as in effect from time to time.

(z) “ TPG Entities ” means any investment funds affiliated with TPG Global, LLC and their respective successors and Affiliates.

(aa) “ Trigger Date ” means the first date on which the Principal Stockholders cease collectively to beneficially own (directly or indirectly) more than fifty percent (50%) of the outstanding shares of Common Stock.

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, the undersigned has caused this Certificate to be executed by the officer below this      day of             , 2013.

 

By:  

/s/ Darrell C. Sherman

  Name: Darrell C. Sherman
  Title: Vice President

[Signature Page to Amended and Restated Certificate of Incorporation]

Exhibit 3.2

AMENDED AND RESTATED BY-LAWS

of

TAYLOR MORRISON HOME CORPORATION

(A Delaware Corporation)

 

 


TABLE OF CONTENTS

 

     Page  

ARTICLE 1 DEFINITIONS

     1   

ARTICLE 2 STOCKHOLDERS

     3   

ARTICLE 3 DIRECTORS

     11   

ARTICLE 4 COMMITTEES OF THE BOARD

     17   

ARTICLE 5 OFFICERS

     17   

ARTICLE 6 GENERAL PROVISIONS

     19   

 

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ARTICLE 1

DEFINITIONS

As used in these By-laws, unless the context otherwise requires, the term:

1.1 “ Affiliates ” means, with respect to any person, any other person that controls, is controlled by, or is under common control with such person.

1.2 “ Assistant Secretary ” means an Assistant Secretary of the Corporation.

1.3 “ Assistant Treasurer ” means an Assistant Treasurer of the Corporation.

1.4 “ Board ” means the Board of Directors of the Corporation.

1.5 “ By-laws ” means the By-laws of the Corporation, as amended and restated.

1.6 “ Certificate of Incorporation ” means the Certificate of Incorporation of the Corporation, as amended and restated.

1.7 “ Chairman ” means the Chairman of the Board.

1.8 “ Chief Executive Officer ” means the Chief Executive Officer of the Corporation.

1.9 “ control ” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise.

1.10 “ Corporation ” means Taylor Morrison Home Corporation.

1.11 “ DGCL ” means the General Corporation Law of the State of Delaware, as amended.

1.12 “ Directors ” means the directors of the Corporation.

1.13 “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and any successor law or statute.

1.14 “ Investors ” means the Principal Stockholders and the JHI Entities.

1.15 “ JHI Entities ” means any investment funds affiliated with JH Investments, Inc. and their respective successors and Affiliates.


1.16 “ law ” means any U.S. or non-U.S., federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a governmental authority (including any department, court, agency or official, or non-governmental self-regulatory organization, agency or authority and any political subdivision or instrumentality thereof).

1.17 “ New TMM Units ” means partnership units in New TMM Holdings II Limited Partnership, a Cayman Islands limited partnership.

1.18 “ Nominating Stockholder ” is defined in Section 3.3(B).

1.19 “ Notice of Business ” is defined in Section 2.3(C).

1.20 “ Notice of Nomination ” is defined in Section 3.3(C).

1.21 “ Notice Record Date ” is defined in Section 2.4(A).

1.22 “ Oaktree Entities ” means any investment funds affiliated with Oaktree Capital Management and their respective successors and Affiliates.

1.23 “ Office of the Corporation ” means the executive office of the Corporation, anything in Section 131 of the DGCL to the contrary notwithstanding.

1.24 “ President ” means the President of the Corporation.

1.25 “ Principal Stockholders ” means the Oaktree Entities and the TPG Entities.

1.26 “ Proponent ” is defined in Section 2.3(D)(i).

1.27 “ Public Disclosure ” is defined in Section 2.3(I).

1.28 “ Qualifying Shares ” is defined in Section 3.4.

1.29 “ SEC ” means the Securities and Exchange Commission.

1.30 “ Secretary ” means the Secretary of the Corporation.

1.31 “ Stockholder Associated Person ” is defined in Section 2.3(J).

1.32 “ Stockholder Business ” is defined in Section 2.3(B).

1.33 “ Stockholder Information ” is defined in Section 2.3(D)(iii).

1.34 “ Stockholder Nominees ” is defined in Section 3.3(B).

1.35 “ Stockholders ” means the stockholders of the Corporation.

 

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1.36 “ Stockholders Agreement ” means the Stockholders Agreement by and among the Corporation and the Stockholders thereto.

1.37 “ TPG Entities ” means any investment funds affiliated with TPG Global, LLC and their respective successors and Affiliates.

1.38 “ Treasurer ” means the Treasurer of the Corporation.

1.39 “ Vice Chairman ” means the Vice Chairman of the Board.

1.40 “ Vice President ” means a Vice President of the Corporation.

1.41 “ Voting Commitment ” is defined in Section 3.4.

1.42 “ Voting Record Date ” is defined in Section 2.4(A).

ARTICLE 2

STOCKHOLDERS

2.1 Place of Meetings . Meetings of Stockholders may be held at such place or solely by means of remote communication or otherwise, as may be designated by the Board from time to time.

2.2 Special Meetings . Special meetings of the Stockholders may be called only in the manner set forth in the Certificate of Incorporation. Notice of every special meeting of the Stockholders shall state the purpose or purposes of such meeting. Except as otherwise required by law, the business conducted at a special meeting of Stockholders shall be limited exclusively to the business set forth in the Corporation’s notice of meeting, and the individual or group calling such meeting shall have exclusive authority to determine the business included in such notice.

2.3 Annual Meetings; Stockholder Proposals .

(A) A meeting of Stockholders for the election of Directors and other business shall be held annually at such date and time as may be designated by the Board from time to time.

(B) At an annual meeting of the Stockholders, only business (other than business relating to the nomination or election of Directors, which is governed by Section 3.3) that has been properly brought before the Stockholder meeting in accordance with the procedures set forth in this Section 2.3 shall be conducted. To be properly brought before a meeting of Stockholders, such business must be brought before the meeting (i) by or at the direction of the Board or any committee thereof or (ii) by a Stockholder who (a) was a Stockholder of record of the Corporation when the notice required by this Section 2.3 is delivered to the Secretary and at the time of the meeting, (b) is entitled to vote at the meeting and (c) complies with the notice and other provisions of this Section 2.3. Subject to Section 2.3(K),

 

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and except with respect to nominations or elections of Directors, which are governed by Section 3.3, Section 2.3(B)(ii) is the exclusive means by which a Stockholder may bring business before a meeting of Stockholders. Any business brought before a meeting in accordance with Section 2.3(B)(ii) is referred to as “ Stockholder Business .”

(C) Subject to Section 2.3(K), at any annual meeting of Stockholders, all proposals of Stockholder Business must be made by timely written notice given by or on behalf of a Stockholder of record of the Corporation (the “ Notice of Business ”) and must otherwise be a proper matter for Stockholder action. To be timely, the Notice of Business must be delivered personally or mailed to, and received at the Office of the Corporation, addressed to the Secretary, by no earlier than one hundred and twenty (120) days and no later than ninety (90) days before the first anniversary of the date of the prior year’s annual meeting of Stockholders; provided , however , that if (i) the annual meeting of Stockholders is advanced by more than thirty (30) days, or delayed by more than sixty (60) days, from the first anniversary of the prior year’s annual meeting of Stockholders, (ii) no annual meeting was held during the prior year or (iii) in the case of the Corporation’s first annual meeting of Stockholders as a corporation with a class of equity security registered under the Exchange Act, the notice by the Stockholder to be timely must be received (a) no earlier than one hundred and twenty (120) days before such annual meeting and (b) no later than the later of ninety (90) days before such annual meeting and the tenth day after the day on which the notice of such annual meeting was made by mail or Public Disclosure. In no event shall an adjournment, postponement or deferral, or Public Disclosure of an adjournment, postponement or deferral, of a Stockholder meeting commence a new time period (or extend any time period) for the giving of the Notice of Business.

(D) The Notice of Business must set forth:

(i) the name and record address of each Stockholder proposing Stockholder Business (the “ Proponent ”), as they appear on the Corporation’s books;

(ii) the name and address of any Stockholder Associated Person;

(iii) as to each Proponent and any Stockholder Associated Person, (a) the class or series and number of shares of stock directly or indirectly held of record and beneficially by the Proponent or Stockholder Associated Person, (b) the date such shares of stock were acquired, (c) a description of any agreement, arrangement or understanding, direct or indirect, with respect to such Stockholder Business between or among the Proponent, any Stockholder Associated Person or any others (including their names) acting in concert with any of the foregoing, (d) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions and borrowed or loaned shares) that has been entered into, directly or indirectly, as of the date of the Proponent’s notice by, or on behalf of, the Proponent or any Stockholder Associated Person, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of the Proponent or any Stockholder Associated Person with respect to shares of stock of the Corporation (a “ Derivative ”), (e) a description in reasonable detail of any proxy (including revocable proxies), contract, arrangement, understanding or other relationship pursuant to which the Proponent or Stockholder Associated Person has a right to

 

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vote any shares of stock of the Corporation, (f) any rights to dividends on the stock of the Corporation owned beneficially by the Proponent or Stockholder Associated Person that are separated or separable from the underlying stock of the Corporation, (g) any proportionate interest in stock of the Corporation or Derivatives held, directly or indirectly, by a general or limited partnership in which the Proponent or Stockholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (h) any performance-related fees (other than an asset-based fee) that the Proponent or Stockholder Associated Person is entitled to based on any increase or decrease in the value of stock of the Corporation or Derivatives thereof, if any, as of the date of such notice. The information specified in Section 2.3(D)(i) to (iii) is referred to herein as “ Stockholder Information ”;

(iv) a representation that each Proponent is a holder of record of stock of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such Stockholder Business,

(v) a brief description of the Stockholder Business desired to be brought before the annual meeting, the text of the proposal (including the text of any resolutions proposed for consideration and, if such business includes a proposal to amend the By-laws, the language of the proposed amendment) and the reasons for conducting such Stockholder Business at the meeting;

(vi) any material interest of each Proponent and any Stockholder Associated Person in such Stockholder Business;

(vii) a representation as to whether the Proponent intends (a) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt such Stockholder Business or (b) otherwise to solicit proxies from the Stockholders in support of such Stockholder Business;

(viii) all other information that would be required to be filed with the SEC if the Proponents or Stockholder Associated Persons were participants in a solicitation subject to Section 14 of the Exchange Act; and

(ix) a representation that the Proponents shall provide any other information reasonably requested by the Corporation.

(E) The Proponents shall also provide any other information reasonably requested by the Corporation within ten (10) business days after such request.

(F) In addition, the Proponent shall further update and supplement the information provided to the Corporation in the Notice of Business or upon the Corporation’s request pursuant to Section 2.3(E) as needed, so that such information shall be true and correct as of the record date for the meeting and as of the date that is the later of ten (10) business days before the meeting or any adjournment or postponement thereof. Such update and supplement must be delivered personally or mailed to, and received at the Office of the Corporation, addressed to the Secretary, by no later than five (5) business days after the record date for the

 

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meeting (in the case of the update and supplement required to be made as of the record date), and not later than seven business (7) days before the date for the meeting (in the case of the update and supplement required to be made as of ten (10) business days before the meeting or any adjournment or postponement thereof).

(G) The person presiding over the meeting shall, if the facts warrant, determine and declare to the meeting, that business was not properly brought before the meeting in accordance with the procedures set forth in this Section 2.3, and, if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

(H) If the Proponent (or a qualified representative of the Proponent) does not appear at the meeting of Stockholders to present the Stockholder Business such business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 2.3, to be considered a qualified representative of the Stockholder, a person must be a duly authorized officer, manager or partner of such Stockholder or must be authorized by a writing executed by such Stockholder or an electronic transmission delivered by such Stockholder to act for such Stockholder as proxy at the meeting of Stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of Stockholders.

(I) “ Public Disclosure ” of any date or other information means disclosure thereof by a press release reported by the Dow Jones News Services, Associated Press or comparable U.S. national news service or in a document publicly filed by the Corporation with the SEC pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

(J) “ Stockholder Associated Person ” means with respect to any Stockholder, (i) any other beneficial owner of stock of the Corporation that are owned by such Stockholder and (ii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Stockholder or such beneficial owner.

(K) The notice requirements of this Section 2.3 shall be deemed satisfied with respect to Stockholder proposals that have been properly brought under Rule 14a-8 of the Exchange Act and that are included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting. Further, nothing in this Section 2.3 shall be deemed to affect any rights of the holders of any series of preferred stock of the Corporation pursuant to any applicable provision of the Certificate of Incorporation.

2.4 Record Date .

(A) For the purpose of determining the Stockholders entitled to notice of any meeting of Stockholders or any adjournment thereof, unless otherwise required by the Certificate of Incorporation or applicable law, the Board may fix a record date (the “ Notice Record Date ”), which record date shall not precede the date on which the resolution fixing the record date was adopted by the Board and shall not be more than 60 or less than ten (10) days

 

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before the date of such meeting. The Notice Record Date shall also be the record date for determining the Stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such Notice Record Date, that a later date on or before the date of the meeting shall be the date for making such determination (the “ Voting Record Date ”). For the purposes of determining the Stockholders entitled to express consent to corporate action in writing without a meeting, unless otherwise required by the Certificate of Incorporation or applicable law, the Board may fix a record date, which record date shall not precede the date on which the resolution fixing the record date was adopted by the Board and shall not be more than ten (10) days after the date on which the record date was fixed by the Board. For the purposes of determining the Stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, exercise any rights in respect of any change, conversion or exchange of stock or take any other lawful action, unless otherwise required by the Certificate of Incorporation or applicable law, the Board may fix a record date, which record date shall not precede the date on which the resolution fixing the record date was adopted by the Board and shall not be more than sixty (60) days prior to such action.

(B) If no such record date is fixed:

(i) The record date for determining Stockholders entitled to notice of and to vote at a meeting of Stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held;

(ii) The record date for determining Stockholders entitled to express consent to corporate action in writing without a meeting (unless otherwise provided in the Certificate of Incorporation), when no prior action by the Board is required by applicable law, shall be the first day on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law; and when prior action by the Board is required by applicable law, the record date for determining Stockholders entitled to express consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board takes such prior action; and

(iii) When a determination of Stockholders of record entitled to notice of or to vote at any meeting of Stockholders has been made as provided in this Section 2.4, such determination shall apply to any adjournment thereof, unless the Board fixes a new Voting Record Date for the adjourned meeting, in which case the Board shall also fix such Voting Record Date or a date earlier than such date as the new Notice Record Date for the adjourned meeting.

2.5 Notice of Meetings of Stockholders . Whenever under the provisions of applicable law, the Certificate of Incorporation or these By-laws, Stockholders are required or permitted to take any action at a meeting, notice shall be given stating the place, if any, date and hour of the meeting, the means of remote communication, if any, by which Stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the Voting Record Date, if such date is different from the Notice Record Date, and, in the case of a special meeting, the purposes for which the meeting is called. Unless otherwise provided by these By-laws or applicable law, notice of any meeting shall be given, not less than ten nor more than sixty

 

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(60) days before the date of the meeting, to each Stockholder entitled to vote at such meeting as of the Notice Record Date. If mailed, such notice shall be deemed to be given when deposited in the U.S. mail, with postage prepaid, directed to the Stockholder at his or her address as it appears on the records of the Corporation. An affidavit of the Secretary, an Assistant Secretary or the transfer agent of the Corporation that the notice required by this Section 2.5 has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. If a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. Any business that might have been transacted at the meeting as originally called may be transacted at the adjourned meeting. If, however, the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each Stockholder of record entitled to vote at the meeting. If, after the adjournment, a new Voting Record Date is fixed for the adjourned meeting, the Board shall fix a new Notice Record Date in accordance with Section 2.4(B)(iii) hereof and shall give notice of such adjourned meeting to each Stockholder entitled to vote at such meeting as of the Notice Record Date.

2.6 Waivers of Notice . Whenever the giving of any notice to Stockholders is required by applicable law, the Certificate of Incorporation or these By-laws, a waiver thereof, given by the person entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a Stockholder at a meeting shall constitute a waiver of notice of such meeting except when the Stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purposes of, any regular or special meeting of the Stockholders need be specified in any waiver of notice.

2.7 List of Stockholders . The Secretary shall prepare and make, at least ten (10) days before every meeting of Stockholders, a complete, alphabetical list of the Stockholders entitled to vote at the meeting, and showing the address of each Stockholder and the number of shares registered in the name of each Stockholder. Such list may be examined by any Stockholder, at the Stockholder’s expense, for any purpose germane to the meeting, for a period of at least ten (10) days prior to the meeting, during ordinary business hours at the principal place of business of the Corporation or on a reasonably accessible electronic network as provided by applicable law. If the meeting is to be held at a place, the list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any Stockholder who is present. If the meeting is held solely by means of remote communication, the list shall also be open for inspection as provided by applicable law. Except as provided by applicable law, the stock ledger shall be the only evidence as to who are the Stockholders entitled to examine the list of Stockholders or to vote in person or by proxy at any meeting of Stockholders.

2.8 Quorum of Stockholders; Adjournment . Except as otherwise provided by these By-laws, at each meeting of Stockholders, the presence in person or by proxy of the holders of a majority of the voting power of all outstanding shares of stock entitled to vote at the meeting of Stockholders, shall constitute a quorum for the transaction of any business at such meeting, except that, where a separate vote by a class or series of classes of shares is required, a

 

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quorum shall consist of no less than a majority in voting power of the shares of such classes or series of classes. In the absence of a quorum, the holders of a majority in voting power of the shares of stock present in person or represented by proxy at any meeting of Stockholders, including an adjourned meeting, may adjourn such meeting to another time and place. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of Directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided , however , that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

2.9 Voting; Proxies . At any meeting of Stockholders, all matters other than the election of directors, except as otherwise provided by the Certificate of Incorporation, these By-laws or any applicable law, shall be decided by the affirmative vote of a majority in voting power of shares of stock present in person or represented by proxy and entitled to vote thereon. At all meetings of Stockholders for the election of Directors, a plurality of the votes cast shall be sufficient to elect. Each Stockholder entitled to vote at a meeting of Stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such Stockholder by proxy but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. A Stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary a revocation of the proxy or by delivering a new proxy bearing a later date.

2.10 Voting Procedures and Inspectors at Meetings of Stockholders . The Board, in advance of any meeting of Stockholders, shall appoint one or more inspectors, who may be employees of the Corporation, to act at the meeting and make a written report thereof. The Board may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall (A) ascertain the number of shares outstanding and the voting power of each, (B) determine the shares represented at the meeting and the validity of proxies and ballots, (C) count all votes and ballots, (D) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors and (E) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties. Unless otherwise provided by the Board, the date and time of the opening and the closing of the polls for each matter upon which the Stockholders will vote at a meeting shall be determined by the person presiding at the meeting and shall be announced at the meeting. No ballot, proxies, votes or any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by a Stockholder shall determine otherwise. In determining the validity and counting of proxies and ballots cast at any meeting of Stockholders, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for office at an election may serve as an inspector at such election.

 

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2.11 Conduct of Meetings; Adjournment . The Board may adopt such rules and procedures for the conduct of Stockholder meetings as it deems appropriate. At each meeting of Stockholders, the Chief Executive Officer and/or President or, in the absence of the Chief Executive Officer and/or President, the Chairman or, if there is no Chairman or if there be one and the Chairman is absent, a Vice President and, in case more than one Vice President shall be present, that Vice President designated by the Board (or in the absence of any such designation, the most senior Vice President present), shall preside over the meeting. Except to the extent inconsistent with the rules and procedures as adopted by the Board, the person presiding over the meeting of Stockholders shall have the right and authority to convene, adjourn and reconvene the meeting from time to time, to prescribe such additional rules and procedures and to do all such acts as, in the judgment of such person, are appropriate for the proper conduct of the meeting. Such rules and procedures, whether adopted by the Board or prescribed by the person presiding over the meeting, may include, (A) the establishment of an agenda or order of business for the meeting, (B) rules and procedures for maintaining order at the meeting and the safety of those present, (C) limitations on attendance at or participation in the meeting to Stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the person presiding over the meeting shall determine, (D) restrictions on entry to the meeting after the time fixed for the commencement thereof and (E) limitations on the time allotted to questions or comments by participants. The person presiding over any meeting of Stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, may determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding person should so determine, he or she shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board or the person presiding over the meeting, meetings of Stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The Secretary or, in his or her absence, one of the Assistant Secretaries, shall act as secretary of the meeting. If none of the officers above designated to act as the person presiding over the meeting or as secretary of the meeting shall be present, a person presiding over the meeting or a secretary of the meeting, as the case may be, shall be designated by the Board and, if the Board has not so acted, in the case of the designation of a person to act as secretary of the meeting, designated by the person presiding over the meeting.

2.12 Order of Business . The order of business at all meetings of Stockholders shall be as determined by the person presiding over the meeting.

2.13 Written Consent of Stockholders Without a Meeting . If the Certificate of Incorporation permits action to be taken at any annual or special meeting of Stockholders without a meeting, without prior notice and without a vote, then a consent or consents in writing, setting forth the action to be so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered (by hand or by certified or registered mail, return receipt requested) to the

 

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Corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of Stockholders are recorded. Every written consent shall bear the date of signature of each Stockholder who signs the consent, and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered in the manner required by this Section 2.13, written consents signed by a sufficient number of holders to take action are delivered to the Corporation as aforesaid. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall, to the extent required by applicable law, be given to those Stockholders who have not consented in writing, and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation.

ARTICLE 3

DIRECTORS

3.1 General Powers . The business and affairs of the Corporation shall be managed by or under the direction of the Board. The Board may adopt such rules and procedures, not inconsistent with the Certificate of Incorporation, these By-laws or applicable law, as it may deem proper for the conduct of its meetings and the management of the Corporation.

3.2 Term of Office . The Board shall consist of one or more members, the number thereof to be determined in accordance with the Certificate of Incorporation. Subject to the terms of the Stockholders Agreement (as long as such agreement remains in effect), each Director shall hold office until a successor is duly elected and qualified or until the Director’s earlier death, resignation, disqualification or removal.

3.3 Nominations of Directors .

(A) Subject to Section 3.3(K) and the Stockholders Agreement, and except as otherwise provided by the Stockholders Agreement, only persons who are nominated in accordance with the procedures set forth in this Section 3.3 are eligible for election as Directors.

(B) Nominations of persons for election to the Board may only be made at a meeting properly called for the election of Directors and only (i) by or at the direction of the Board or any committee thereof or (ii) by a Stockholder who (a) was a Stockholder of record of the Corporation when the notice required by this Section 3.3 is delivered to the Secretary and at the time of the meeting, (b) is entitled to vote for the election of Directors at the meeting and (c) complies with the notice and other provisions of this Section 3.3. Subject to Section 3.3(K) and the Stockholders Agreement, Section 3.3(B)(ii) is the exclusive means by which a Stockholder may nominate a person for election to the Board. Persons nominated in accordance with Section 3.3(B)(ii) are referred to as “ Stockholder Nominees .” A Stockholder nominating persons for election to the Board is referred to as the “ Nominating Stockholder .”

 

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(C) Subject to Section 3.3(K) and the Stockholders Agreement, all nominations of Stockholder Nominees must be made by timely written notice given by or on behalf of a Stockholder of record of the Corporation (the “ Notice of Nomination ”). To be timely, the Notice of Nomination must be delivered personally or mailed to and received at the Office of the Corporation, addressed to the attention of the Secretary, by the following dates:

(i) in the case of the nomination of a Stockholder Nominee for election to the Board at an annual meeting of Stockholders, no earlier than one hundred and twenty (120) days and no later than ninety (90) days before the first anniversary of the date of the prior year’s annual meeting of Stockholders; provided , however , that if (a) the annual meeting of Stockholders is advanced by more than thirty (30) days, or delayed by more than sixty (60) days, from the first anniversary of the prior year’s annual meeting of Stockholders, (b) no annual meeting was held during the prior year or (c) in the case of the Corporation’s first annual meeting of Stockholders as a corporation with a class of equity security registered under the Exchange Act, the notice by the Stockholder to be timely must be received (1) no earlier than one hundred and twenty (120) days before such annual meeting and (2) no later than the later of ninety (90) days before such annual meeting and the tenth day after the day on which the notice of such annual meeting was made by mail or Public Disclosure and

(ii) in the case of the nomination of a Stockholder Nominee for election to the Board at a special meeting of Stockholders, no earlier than one hundred and twenty (120) days before and no later than the later of ninety (90) days before such special meeting and the tenth day after the day on which the notice of such special meeting was made by mail or Public Disclosure.

(D) Notwithstanding anything to the contrary, if the number of Directors to be elected to the Board at a meeting of Stockholders is increased and there is no Public Disclosure by the Corporation naming the nominees for the additional directorships at least one hundred (100) days before the first anniversary of the preceding year’s annual meeting, a Notice of Nomination shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered personally and received at the Office of the Corporation, addressed to the attention of the Secretary, no later than the close of business on the tenth day following the day on which such Public Disclosure is first made by the Corporation.

(E) In no event shall an adjournment, postponement or deferral, or Public Disclosure of an adjournment, postponement or deferral, of an annual or special meeting commence a new time period (or extend any time period) for the giving of the Notice of Nomination.

(F) The Notice of Nomination shall set forth:

(i) the Stockholder Information with respect to each Nominating Stockholder and Stockholder Associated Person;

 

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(ii) a representation that each Stockholder nominating a Stockholder Nominee is a holder of record of stock of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such nomination;

(iii) all information regarding each Stockholder Nominee and Stockholder Associated Person that would be required to be disclosed in a solicitation of proxies subject to Section 14 of the Exchange Act, the written consent of each Stockholder Nominee to being named in a proxy statement as a nominee and to serve if elected and a completed signed questionnaire, representation and agreement required by Section 3.4;

(iv) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among a Nominating Stockholder, Stockholder Associated Person or their respective associates, or others acting in concert therewith, including all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the Nominating Stockholder, Stockholder Associated Person or any person acting in concert therewith, were the “registrant” for purposes of such rule and the Stockholder Nominee were a director or executive of such registrant;

(v) a representation as to whether the Nominating Stockholders intends (a) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve the nomination or (b) otherwise to solicit proxies from Stockholders in support of such nomination;

(vi) all other information that would be required to be filed with the SEC if the Nominating Stockholders and Stockholder Associated Person were participants in a solicitation subject to Section 14 of the Exchange Act; and

(vii) a representation that the Nominating Stockholders shall provide any other information reasonably requested by the Corporation.

(G) The Nominating Stockholders shall also provide any other information reasonably requested by the Corporation within ten (10) business days after such request.

(H) In addition, the Nominating Stockholder shall further update and supplement the information provided to the Corporation in the Notice of Nomination or upon the Corporation’s request pursuant to Section 3.3(G) as needed, so that such information shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days before the meeting or any adjournment or postponement thereof. Such update and supplement must be delivered personally or mailed to, and received at the Office of the Corporation, addressed to the Secretary, by no later than five (5) business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than seven (7) business days before the date for the meeting (in the case of the update and supplement required to be made as of ten (10) business days before the meeting or any adjournment or postponement thereof).

 

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(I) The person presiding over the meeting shall, if the facts warrant, determine and declare to the meeting, that the nomination was not made in accordance with the procedures set forth in this Section 3.3, and, if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded.

(J) If the Stockholder (or a qualified representative of the Stockholder) does not appear at the applicable Stockholder meeting to nominate the Stockholder Nominees, such nomination shall be disregarded and such business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 3.3, to be considered a qualified representative of the Stockholder, a person must be a duly authorized officer, manager or partner of such Stockholder or must be authorized by a writing executed by such Stockholder or an electronic transmission delivered by such Stockholder to act for such Stockholder as proxy at the meeting of Stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of Stockholders.

(K) Nothing in this Section 3.3 shall be deemed to affect any rights of the holders of any series of preferred stock of the Corporation pursuant to any applicable provision of the Certificate of Incorporation.

3.4 Nominee and Director Qualifications . Unless the Board determines otherwise or the Stockholders Agreement provides otherwise (as long as such agreement is in effect), to be eligible to be a nominee for election or reelection as a Director, a person must deliver (in accordance with the time periods prescribed for delivery of notice by the Board) to the Secretary at the Office of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (A) is not and will not become a party to (i) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person will act or vote as a Director on any issue or question (a “ Voting Commitment ”) that has not been disclosed to the Corporation or (ii) any Voting Commitment that could limit or interfere with such person’s ability to comply with such person’s fiduciary duties as a Director under applicable law, (B) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a Director that has not been disclosed therein, (C) beneficially owns, or agrees to purchase within ninety (90) days if elected as a Director, not less than 1000 shares of common stock (either and both of such amounts, the “ Qualifying Shares ”) (subject to adjustment for any stock splits or stock dividends occurring after the date of such representation or agreement), will not dispose of such minimum number of shares so long as such person is a Director and has disclosed therein whether all or any portion of the Qualifying Shares were purchased with any financial assistance provided by any other person and whether any other person has any interest in the Qualifying Shares and (D) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, and will comply with all applicable publicly disclosed

 

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corporate governance, conflict of interest, confidentiality and stock ownership and trading and other policies and guidelines of the Corporation that are applicable to Directors; provided , however , that unless the Stockholders Agreement provides otherwise (as long as such agreement is in effect), the provisions of this Section 3.4 shall not apply to any Director nominated by a Principal Stockholder pursuant to the terms of the Stockholders Agreement.

3.5 Resignation . Any Director may resign at any time by notice given in writing or by electronic transmission to the Corporation. Such resignation shall take effect at the date of receipt of such notice or at such later time as is therein specified.

3.6 Regular Meetings . Regular meetings of the Board may be held without notice at such times and at such places as may be determined from time to time by the Board or its Chairman.

3.7 Telephone Meetings . Board or Board committee meetings may be held by means of telephone conference or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation by a Director in a meeting pursuant to this Section 3.7 shall constitute presence in person at such meeting.

3.8 Special Meetings . Special meetings of the Board may be called only on at least twenty-four (24) hours’ notice to each Director given by one of the means specified in Section 3.10 hereof other than by mail (or on at least three (3) days’ notice if given by mail) and only, (i) if prior to the date on which the Principal Stockholders cease collectively to beneficially own (directly or indirectly) more than fifty percent (50%) of the outstanding shares of the common stock of the Corporation, by or at the direction of a director designated for nomination by the Principal Sponsors, (ii) by or at the direction of two or more directors or (iii) by or at the direction of the Chairman or Vice Chairman or the Chief Executive Officer. Any business transacted at any special meeting of the Stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

3.9 Adjourned Meetings . A majority of the Directors present at any meeting of the Board, including an adjourned meeting, whether or not a quorum is present, may adjourn and reconvene such meeting to another time and place. At least twenty-four (24) hours’ notice of any adjourned meeting of the Board shall be given to each Director whether or not present at the time of the adjournment, if such notice shall be given by one of the means specified in Section 3.10 hereof other than by mail, or at least three (3) days’ notice if by mail. Any business may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called.

3.10 Notice Procedure . Subject to Sections 3.8 and 3.11 hereof, whenever notice is required to be given to any Director by applicable law, the Certificate of Incorporation or these By-laws, such notice shall be deemed given effectively if given in person or by telephone, mail addressed to such Director at such Director’s address as it appears on the records of the Corporation, telecopy or by other means of electronic transmission.

3.11 Waiver of Notice . Whenever the giving of any notice to Directors is required by applicable law, the Certificate of Incorporation or these By-laws, a waiver thereof,

 

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given by the Director entitled to the notice, whether before or after such notice is required, shall be deemed equivalent to notice. Attendance by a Director at a meeting shall constitute a waiver of notice of such meeting except when the Director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting was not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special Board or committee meeting need be specified in any waiver of notice.

3.12 Organization . At each meeting of the Board, the Chairman or, in his or her absence, another Director selected by the Board shall preside. The Secretary shall act as secretary at each meeting of the Board. If the Secretary is absent from any meeting of the Board, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all Assistant Secretaries, the person presiding at the meeting may appoint any person to act as secretary of the meeting.

3.13 Quorum of Directors . At any meeting of the Board, a majority of the total number of directors then in office shall constitute a quorum for all purposes, provided that so long as the Principal Stockholders collectively beneficially own (directly or indirectly) more than fifty percent (50%) of the outstanding shares of the common stock of the Corporation, it shall be necessary to constitute a quorum, in addition to a majority of the total number of directors then in office (a) that one director designated for nomination by each of the Principal Stockholders be present (other than attendance for the sole purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened) and (b) for an action of the Board taken at a meeting to be valid, directors that constitute a quorum must be present at the time that the vote on such action is taken. For the avoidance of doubt, so long as the Principal Stockholders collectively beneficially own (directly or indirectly) more than fifty percent (50%) of the outstanding shares of the common stock of the Corporation, if directors that constitute a quorum are not present at the time that the vote on any action is taken, a quorum shall not be constituted with respect to such action, and any vote taken with respect to such action shall not be a valid action of the Board, notwithstanding that a quorum of the Board may have been present at the commencement of such meeting. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, if any, date or time, without further notice or waiver thereof.

3.14 Action by Majority Vote . Except as otherwise expressly required by these By-laws or the Certificate of Incorporation, and subject to the terms of the Stockholders Agreement (as long as such agreement remains in effect), the vote of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board.

3.15 Action Without Meeting . Unless otherwise restricted by these By-laws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all Directors or members of such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writings or electronic transmissions are filed with the minutes of proceedings of the Board or committee.

 

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ARTICLE 4

COMMITTEES OF THE BOARD

The provisions of this Article 4 are subject in all respects to the terms of the Stockholders Agreement (so long as such agreement remains in effect). The Board may designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members present at the meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may, by a unanimous vote, appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent permitted by applicable law, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers that may require it to the extent so authorized by the Board. Unless the Board provides otherwise, at all meetings of such committee, a majority of the then authorized members of the committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee present at any meeting at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes of its meetings. Unless the Board provides otherwise, each committee designated by the Board may make, alter and repeal rules and procedures for the conduct of its business. In the absence of such rules and procedures each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article 3.

ARTICLE 5

OFFICERS

5.1 Positions; Election . The officers of the Corporation shall be a Chairman, Vice Chairman, Chief Executive Officer, President, Vice Presidents, Secretary, Treasurer and any other officers as the Board may elect from time to time, who shall exercise such powers and perform such duties as shall be determined by the Board from time to time. Any number of offices may be held by the same person.

5.2 Term of Office . Each officer of the Corporation shall hold office until such officer’s successor is elected and qualifies or until such officer’s earlier death, resignation or removal. Any officer may resign at any time upon written notice to the Corporation. Such resignation shall take effect at the date of receipt of such notice or at such later time as is therein specified. The resignation of an officer shall be without prejudice to the contract rights of the Corporation, if any. Any officer may be removed at any time with or without cause by the Board. Any vacancy occurring in any office of the Corporation may be filled by the Board. The election or appointment of an officer shall not of itself create contract rights.

 

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5.3 Chairman . The Chairman shall preside at all meetings of the Board and shall exercise such powers and perform such other duties as shall be determined from time to time by the Board.

5.4 Vice Chairman . The Vice Chairman shall exercise such powers and perform such other duties as shall be determined from time to time by the Board.

5.5 Chief Executive Officer . The Chief Executive Officer shall have general supervision over, and direction of, the business and affairs of the Corporation, subject, however, to the control of the Board and of any duly authorized committee of the Board. The Chief Executive Officer shall preside at all meetings of the Stockholders and at all meetings of the Board at which the Chairman (if there be one) is not present. The Chief Executive Officer may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by resolution of the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed and, in general, the Chief Executive Officer shall perform all duties incident to the office of Chief Executive Officer of a corporation and such other duties as may from time to time be assigned to the Chief Executive Officer by resolution of the Board.

5.6 President . The President shall have duties incident to the office of President, and any other duties as may from time to time be assigned to the President by the Chief Executive Officer (if the President and Chief Executive Officer are not the same person) or the Board and subject to the control of the Chief Executive Officer (if the President and Chief Executive Officer are not the same person) and the Board in each case. The President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed.

5.7 Vice Presidents . Vice Presidents shall have the duties incident to the office of Vice President and any other duties that may from time to time be assigned to the Vice President by the Chief Executive Officer, the President or the Board. Any Vice President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed.

5.8 Secretary . The Secretary shall attend all meetings of the Board and of the Stockholders, record all the proceedings of the meetings of the Board and of the Stockholders in a book to be kept for that purpose and perform like duties for committees of the Board, when required. The Secretary shall give, or cause to be given, notice of all special meetings of the Board and of the Stockholders and perform such other duties as may be prescribed by the Chief Executive Officer, the Board or by the President. The Secretary shall have custody of the corporate seal of the Corporation, and the Secretary or an Assistant Secretary, shall have authority to affix the same on any instrument that may require it, and when so affixed, the seal may be attested by the signature of the Secretary or by the signature of such Assistant Secretary.

 

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The Board may give general authority to any other officer to affix the seal of the Corporation and to attest the same by such officer’s signature. The Secretary or an Assistant Secretary may also attest all instruments signed by the Chief Executive Officer, the President or any Vice President. The Secretary shall have charge of all the books, records and papers of the Corporation relating to its organization and management, see that the reports, statements and other documents required by applicable law are properly kept and filed and, in general, perform all duties incident to the office of secretary of a corporation and such other duties as may from time to time be assigned to the Secretary by the Chief Executive Officer, the Board or the President.

5.9 Treasurer . The Treasurer shall have charge and custody of, and be responsible for, all funds, securities and notes of the Corporation, receive and give receipts for moneys due and payable to the Corporation from any sources whatsoever; deposit all such moneys and valuable effects in the name and to the credit of the Corporation in such depositaries as may be designated by the Board, against proper vouchers, cause such funds to be disbursed by checks or drafts on the authorized depositaries of the Corporation signed in such manner as shall be determined by the Board and be responsible for the accuracy of the amounts of all moneys so disbursed, regularly enter or cause to be entered in books or other records maintained for the purpose full and adequate account of all moneys received or paid for the account of the Corporation, have the right to require from time to time reports or statements giving such information as the Treasurer may desire with respect to any and all financial transactions of the Corporation from the officers or agents transacting the same, render to the Chief Executive Officer, the President or the Board, whenever the Chief Executive Officer, the President or the Board shall require the Treasurer so to do, an account of the financial condition of the Corporation and of all financial transactions of the Corporation, disburse the funds of the Corporation as ordered by the Board and, in general, perform all duties incident to the office of Treasurer of a corporation and such other duties as may from time to time be assigned to the Treasurer by the Chief Executive Officer, the Board or the President.

5.10 Assistant Secretaries and Assistant Treasurers . Assistant Secretaries and Assistant Treasurers shall perform such duties as shall be assigned to them by the Secretary or by the Treasurer, respectively, or by the Chief Executive Officer, the Board or the President.

ARTICLE 6

GENERAL PROVISIONS

6.1 Certificates Representing Shares . The shares of stock of the Corporation shall be represented by certificates or all of such shares shall be uncertificated shares that may be evidenced by a book-entry system maintained by the registrar of such stock, or a combination of both. If shares are represented by certificates (if any) such certificates shall be in the form approved by the Board. The certificates representing shares of stock of each class shall be signed by, or in the name of, the Corporation by the Chairman, the Chief Executive Officer, the President or any Vice President, and by the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer. Any or all such signatures may be facsimiles. Although any officer, transfer agent or registrar whose manual or facsimile signature is affixed to such a certificate

 

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ceases to be such officer, transfer agent or registrar before such certificate has been issued, it may nevertheless be issued by the Corporation with the same effect as if such officer, transfer agent or registrar were still such at the date of its issue.

6.2 Transfer and Registry Agents . The Corporation may from time to time maintain one or more transfer offices or agents and registry offices or agents at such place or places as may be determined from time to time by the Board.

6.3 Lost, Stolen or Destroyed Certificates . The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate or his legal representative to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

6.4 Form of Records . Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be maintained on any information storage device or method; provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to applicable law.

6.5 Seal . The corporate seal shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.

6.6 Fiscal Year . The fiscal year of the Corporation shall be determined by the Board.

6.7 Amendments . These By-laws may be altered, amended or repealed in accordance with the Certificate of Incorporation and the DGCL, subject to the Stockholders Agreement (as long as such agreement is in effect).

6.8 Conflict with Applicable Law or Certificate of Incorporation . These By-laws are adopted subject to any applicable law and the Certificate of Incorporation. Whenever these By-laws may conflict with any applicable law or the Certificate of Incorporation, such conflict shall be resolved in favor of such law or the Certificate of Incorporation.

 

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Exhibit 10.1

EXECUTION VERSION

 

 

REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

TAYLOR MORRISON HOME CORPORATION

AND

CERTAIN STOCKHOLDERS

DATED AS OF APRIL 9, 2013

 

 


TABLE OF CONTENTS

 

ARTICLE I EFFECTIVENESS

     2  

Section 1.1.

    

Effectiveness

     2  

ARTICLE II DEFINITIONS

     2  

Section 2.1.

    

Definitions

     2  

Section 2.2.

    

Other Interpretive Provisions

     7  

ARTICLE III REGISTRATION RIGHTS

     7  

Section 3.1.

    

Exchange Registration

     7  

Section 3.2.

    

Demand Registration

     8  

Section 3.3.

    

Shelf Registration

     10  

Section 3.4.

    

Piggyback Registration

     14  

Section 3.5.

    

Lock-Up Agreements

     15  

Section 3.6.

    

Registration Procedures

     15  

Section 3.7.

    

Underwritten Offerings

     22  

Section 3.8.

    

No Inconsistent Agreements; Additional Rights

     23  

Section 3.9.

    

Registration Expenses

     23  

Section 3.10.

    

Indemnification

     24  

Section 3.11.

    

Rules 144 and 144A and Regulation S

     27  

Section 3.12.

    

Existing Registration Statements

     27  

ARTICLE IV MISCELLANEOUS

     28  

Section 4.1.

    

Authority: Effect

     28  

Section 4.2.

    

Notices

     28  

Section 4.3.

    

Termination and Effect of Termination

     30  

Section 4.4.

    

Permitted Transferees

     31  

Section 4.5.

    

Remedies

     31  

Section 4.6.

    

Amendments

     31  

Section 4.7.

    

Governing Law

     31  

Section 4.8.

    

Consent to Jurisdiction

     31  

Section 4.9.

    

WAIVER OF JURY TRIAL

     32  

Section 4.10.

    

Merger; Binding Effect, Etc

     32  

Section 4.11.

    

Counterparts

     33  

Section 4.12

    

Severability

     33  

Section 4.13.

    

No Recourse

     33  

 

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This REGISTRATION RIGHTS AGREEMENT (as it may be amended from time to time in accordance with the terms hereof, the “ Agreement ”), dated as of April 9, 2013, is made by and among:

i. Taylor Morrison Home Corporation, a Delaware corporation (the “ Company ”);

ii. TPG TMM Holdings II, L.P., a Cayman Islands limited partnership (together with its Permitted Transferees that become party hereto, the “ TPG Investor ”);

iii. OCM TMM Holdings II, L.P., a Cayman Islands limited partnership (together with its Permitted Transferees that become party hereto, the “ Oaktree Investor ” and, together with the TPG Investor, the “ Principal Investors ”);

iv. JHI Holding Limited Partnership, a British Columbia limited partnership (the “ JHI Investor ”);

v. the individuals who execute the signature pages hereto under the heading “Managers” (the “ Managers ”); and

vi. such other Persons, if any, that from time to time become party hereto as holders of Registrable Securities pursuant to Section 4.4 in their capacity as Permitted Transferees.

RECITALS

WHEREAS, on July 13, 2011, TMM Holdings Limited Partnership (“ TMM ”), Taylor Morrison Holdings, Inc., Monarch Communities Inc. and certain limited partners of TMM entered into a Registration Rights Agreement (the “ Prior Agreement ”);

WHEREAS, pursuant to a Reorganization Agreement dated the date hereof, the Company has effected a series of reorganization transactions (the “ Reorganization Transactions ”);

WHEREAS, after giving effect to the Reorganization Transactions, the Principal Investors, the JHI Investor and the Managers own limited partnership interests in TMM Holdings II Limited Partnership (“ New TMM Units ”) together with shares of the Company’s Class B common stock, par value $0.00001 per share (the “ Class B Common Stock ”), which, subject to certain restrictions, are exchangeable from time to time at the option of the holder thereof for shares of the Company’s Class A common stock, par value $0.00001 per share (the “ Class A Common Stock ” and, together with the Class B Common Stock, the “ Common Stock ”) pursuant to an Exchange Agreement dated the date hereof (the “ Exchange Agreement ”);

WHEREAS, on the date hereof, the Company has priced an initial public offering of shares of its Class A Common Stock (the “ IPO ”) pursuant to an Underwriting Agreement dated the date hereof (the “ Underwriting Agreement ”);

WHEREAS, on the date hereof, the Prior Agreement is being terminated by the parties thereto; and


WHEREAS, the parties believe that it is in the best interests of the Company and the other parties hereto to set forth their agreements regarding registration rights and certain other matters following the IPO.

NOW, THEREFORE, in consideration of the foregoing and the mutual promises, covenants and agreements of the parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

EFFECTIVENESS

Section 1.1. Effectiveness . This Agreement shall become effective upon the closing of the IPO (the “ Closing ”).

ARTICLE II

DEFINITIONS

Section 2.1. Definitions . As used in this Agreement, the following terms shall have the following meanings:

Adverse Disclosure ” means public disclosure of material non-public information that, in the good faith judgment of the Board of Directors of the Company, after consultation with outside counsel to the Company: (i) would be required to be made in any Registration Statement filed with the SEC by the Company so that such Registration Statement, from and after its effective date, does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) would not be required to be made at such time but for the filing, effectiveness or continued use of such Registration Statement; and (iii) the Company has a bona fide business purpose for not disclosing publicly.

Affiliate ” means, with respect to any specified Person, (a) any Person that directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person or (b) in the event that the specified Person is a natural Person, a Member of the Immediate Family of such Person; provided that the Company and each of its subsidiaries shall be deemed not to be Affiliates of the TPG Investor or the Oaktree Investor. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

Agreement ” shall have the meaning set forth in the Preamble.

Business Day ” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in the City of New York.

Class A Common Stock ” shall have the meaning set forth in the Recitals.

 

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Class B Common Stock ” shall have the meaning set forth in the Recitals.

Closing ” shall have the meaning set forth in Section 1.1.

Common Stock ” shall have the meaning set forth in the Recitals.

Demand Notice ” shall have the meaning set forth in Section 3.2.3.

Demand Registration ” shall have the meaning set forth in Section 3.2.1(a).

Demand Registration Request ” shall have the meaning set forth in Section 3.2.1(a).

Demand Registration Statement ” shall have the meaning set forth in Section 3.2.1(c).

Demand Suspension ” shall have the meaning set forth in Section 3.2.6.

Demanding Holder ” means any Principal Investor that exercises a right to request a Demand Registration pursuant to Section 3.2.

Exchange ” means the exchange of shares of Class B Common Stock together with New TMM Units for shares of Class A Common Stock pursuant to the Exchange Agreement.

Exchange Agreement ” shall have the meaning set forth in the Recitals.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.

Exchange Registration ” shall have the meaning set forth in Section 3.1.1.

Exchange Registration Statement ” shall have the meaning set forth in Section 3.1.1.

FINRA ” means the Financial Industry Regulatory Authority.

Holders ” means holders of Registrable Securities under this Agreement.

IPO ” shall have the meaning set forth in the Recitals.

Issuer Free Writing Prospectus ” means an issuer free writing prospectus, as defined in Rule 433 under the Securities Act, relating to an offer of the Registrable Securities.

Issuer Shares ” means the shares of Common Stock or other equity securities of the Company, and any securities into which such shares of Common Stock or other equity securities shall have been changed or any securities resulting from any reclassification or recapitalization of such shares of Common Stock or other equity securities.

JHI Investor ” shall have the meaning set forth in the Preamble.

Loss ” shall have the meaning set forth in Section 3.10.1.

 

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Manager ” shall have the meaning set forth in the Preamble.

Member of the Immediate Family ” means, with respect to any Person who is an individual, (a) each parent, spouse (but not including a former spouse or a spouse from whom such Person is legally separated) or child (including those adopted) of such individual and (b) each trustee, solely in his or her capacity as trustee, for a trust naming only one or more of the Persons listed in sub-clause (a) as beneficiaries.

New TMM Units ” shall have the meaning set forth in the Recitals.

Oaktree Investor ” shall have the meaning set forth in the Preamble.

Participation Conditions ” shall have the meaning set forth in Section 3.3.5(b).

Permitted Transferee ” means (i) with respect to each Manager, any “Management Permitted Transferee” as defined in the Limited Partnership Agreement of TMM Holdings II Limited Partnership, (ii) with respect to any Principal Investor, any Affiliate of such Principal Investor, (iii) with respect to the JHI Investor, any Affiliate of the JHI Investor, and (iv) such other Persons as each Principal Investor approves in writing.

Person ” means any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.

Piggyback Notice ” shall have the meaning set forth in Section 3.4.1.

Piggyback Registration ” shall have the meaning set forth in Section 3.4.1.

Potential Takedown Participant ” shall have the meaning set forth in Section 3.3.5(b).

Principal Investor Minimum ” means, with respect to a Principal Investor, at least 50% of the shares of Common Stock held by such Principal Investor as of the closing of the transactions contemplated by the Underwriting Agreement and the Put/Call Agreement, or, if neither such closing occurs prior to June 30, 2013, the Closing (as adjusted for any stock dividend or distribution, stock split, reverse stock split, recapitalization, reclassification, reorganization, stock exchange, subdivision, combination thereof or similar transaction).

Principal Investors ” or “ Principal Investor ” shall have the meaning set forth in the Preamble.

Prior Agreement ” shall have the meaning set forth in the Recitals.

Pro Rata Portion ” means, with respect to each Holder requesting that its shares be registered pursuant to a Demand Registration or sold in a Public Offering, a number of such shares equal to the aggregate number of Registrable Securities to be registered in such Demand Registration or sold in such Public Offering (excluding any shares to be registered or sold for the account of the Company) multiplied by a fraction, the numerator of which is the aggregate number of Registrable Securities held by such Holder, and the denominator of which is the aggregate number of Registrable Securities held by all Holders requesting that their Registrable Securities be registered in such Demand Registration or sold in such Public Offering.

 

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Prospectus ” means (i) the prospectus included in any Registration Statement, all amendments and supplements to such prospectus, including post-effective amendments, and all other material incorporated by reference in such prospectus, and (ii) any Issuer Free Writing Prospectus.

Public Offering ” means the offer and sale of Registrable Securities for cash pursuant to an effective Registration Statement under the Securities Act (other than a Registration Statement on Form S-4 or Form S-8 or any successor form).

Put/Call Agreement ” means the Put/Call Agreement, dated as of the date hereof, by and among TPG, Oaktree, TMM Holdings II Limited Partnership and the Company.

Registrable Securities ” means (i) all shares of Class A Common Stock that are not then subject to vesting (but including shares that were at one time subject to vesting to the extent they have vested), (ii) all shares of Class A Common Stock issuable upon exercise, conversion or exchange of any option, warrant or convertible security (including shares of Class A Common Stock issuable upon Exchange) and (iii) all shares of Class A Common Stock directly or indirectly issued or issuable with respect to the securities referred to in clauses (i) or (ii) above by way of unit or stock dividend or unit or stock split, or in connection with a combination of units or shares, recapitalization, merger, consolidation or other reorganization. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (w) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such Registration Statement, (x) such securities shall have been Transferred to the public pursuant to Rule 144, (y) the aggregate number of such securities held by the applicable holder and its Affiliates is less than the number that would subject the distribution thereof to any volume limitation or other restrictions on transfer under Rule 144 and such holder is able to immediately distribute such securities publicly without any restrictions on transfer (including without application of paragraphs (c), (d), (e), (f) and (h) of Rule 144), or (z) such securities shall have ceased to be outstanding. Notwithstanding the foregoing, (A) the Managers shall be deemed not to hold any Registrable Securities at any time the Exchange Registration Statement is effective and (B) the JHI Investor shall be deemed not to hold any Registrable Securities following consummation of the first underwritten Public Offering in which the JHI Investor is offered the opportunity to sell all of its Registrable Securities or all of the Class B Common Stock and corresponding New TMM Units held by it.

Registration ” means registration under the Securities Act of the offer and sale to the public of any Issuer Shares under a Registration Statement. The terms “ register ”, “ registered ” and “ registering ” shall have correlative meanings.

Registration Expenses ” shall have the meaning set forth in Section 3.9.

Registration Statement ” means any registration statement of the Company filed with, or to be filed with, the SEC under the Securities Act, including the related Prospectus, amendments

 

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and supplements to such registration statement, including pre- and post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement other than a registration statement (and related Prospectus) filed on Form S-4 or Form S-8 or any successor form thereto.

Representatives ” means, with respect to any Person, any of such Person’s officers, directors, employees, agents, attorneys, accountants, actuaries, consultants, equity financing partners or financial advisors or other Person associated with, or acting on behalf of, such Person.

Requisite Investor Approval ” means the approval of (a) both Principal Investors for so long as each Principal Investor and its Affiliates beneficially own in the aggregate the Principal Investor Minimum, (b) to the extent only one Principal Investor and its Affiliates beneficially own in the aggregate the Principal Investor Minimum, such Principal Investor and (c) to the extent neither of the Principal Investors together with its respective Affiliates beneficially own in the aggregate the Principal Investor Minimum, holders of a majority of the Issuer Shares; provided that, for purposes of this definition, a Principal Investor shall be deemed to have approved an action to the extent that such Principal Investor or its Affiliates holding a majority of the Issuer Shares held by such Principal Investor and its Affiliates vote in favor of, or provide their written consent to, such action.

Reorganization Transactions ” shall have the meaning set forth in the Recitals.

Rule 144 ” means Rule 144 under the Securities Act (or any successor Rule).

SEC ” means the Securities and Exchange Commission or any successor agency having jurisdiction under the Securities Act.

Securities Act ” means the Securities Act of 1933, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.

Shelf Period ” shall have the meaning set forth in Section 3.3.3.

Shelf Registration ” shall have the meaning set forth in Section 3.3.1(a).

Shelf Registration Notice ” shall have the meaning set forth in Section 3.3.2.

Shelf Registration Request ” shall have the meaning set forth in Section 3.3.1(a).

Shelf Registration Statement ” shall have the meaning set forth in Section 3.3.1(a).

Shelf Suspension ” shall have the meaning set forth in Section 3.3.4.

Shelf Takedown Notice ” shall have the meaning set forth in Section 3.3.5(b).

Shelf Takedown Request ” shall have the meaning set forth in Section 3.3.5(a).

 

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TPG Investor ” shall have the meaning set forth in the Preamble.

TMM ” shall have the meaning set forth in the Recitals.

Transfer ” means, with respect to any Registrable Security, any interest therein, or any other securities or equity interests, a direct or indirect transfer, sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition thereof, including the grant of an option or other right, whether directly or indirectly, whether voluntarily, involuntarily, by operation of law, pursuant to judicial process or otherwise. “ Transferred ” shall have a correlative meaning.

underwritten Public Offering ” means an underwritten Public Offering, including any bought deal or block sale to a financial institution conducted as an underwritten Public Offering.

Underwritten Shelf Takedown ” means an underwritten Public Offering pursuant to an effective Shelf Registration Statement.

Underwriting Agreement ” shall have the meaning set forth in the Recitals.

WKSI ” means any Securities Act registrant that is a well-known seasoned issuer as defined in Rule 405 under the Securities Act at the most recent eligibility determination date specified in paragraph (2) of that definition.

Section 2.2. Other Interpretive Provisions . (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

(b) The words “hereof”, “herein”, “hereunder” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and any subsection and section references are to this Agreement unless otherwise specified.

(c) The term “including” is not limiting and means “including without limitation.”

(d) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

(e) Whenever the context requires, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms.

ARTICLE III

REGISTRATION RIGHTS

The Company will perform and comply, and cause each of its subsidiaries to perform and comply, with such of the following provisions as are applicable to it. Each Holder will perform and comply with such of the following provisions as are applicable to such Holder.

 

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Section 3.1. Exchange Registration .

Section 3.1.1. Mandatory Exchange Registration . At such time as the Company first becomes eligible to file a Registration Statement on Form S-3, the Company shall as promptly as practicable file with the SEC and use reasonable best efforts to cause to be promptly declared effective under the Securities Act a Registration Statement (“ Exchange Registration Statement ”) for the Exchange of all of the shares of Class B Common Stock together with all of the New TMM Units held by the Managers for shares of Class A Common Stock. Such Registration pursuant to this Section 3.1, including as amended, renewed or replaced as provided herein, shall hereinafter be referred to as an “ Exchange Registration .”

Section 3.1.2. Continued Effectiveness; Renewal and Replacement . The Company shall use its reasonable best efforts to keep the Exchange Registration Statement continuously effective under the Securities Act until the date as of which no Manager holds Class B Common Stock or New TMM Units. In addition, the Company shall promptly amend, renew or replace, as necessary, any Exchange Registration Statement that shall have expired or otherwise been deemed unusable and shall use its reasonable best efforts to keep such amended, renewed or replaced Exchange Registration Statement continuously effective under the Securities Act until the date as of which no Manager holds Class B Common Stock or New TMM Units.

Section 3.1.3. Suspension of Registration . If the continued use of the Exchange Registration Statement at any time would require the Company to make an Adverse Disclosure or if the Company is not then eligible to file an Exchange Registration Statement on Form S-3, the Company may, upon giving prompt written notice of such action to the Managers, suspend use of the Exchange Registration Statement; provided , however , that the Company shall not be permitted to exercise such a suspension in the event of an Adverse Disclosure (i) more than one time during any twelve (12)-month period, or (ii) for a period exceeding thirty (30) days on any one occasion.

Section 3.2. Demand Registration .

Section 3.2.1. Request for Demand Registration .

 

  (a) Following the Effective Date, each of the Principal Investors shall have the right to make a written request from time to time (a “ Demand Registration Request ”) to the Company for Registration of all or part of the Registrable Securities held by such Principal Investor. Any such Registration pursuant to a Demand Registration Request shall hereinafter be referred to as a “ Demand Registration .”

 

  (b) Each Demand Registration Request shall specify (x) the kind and aggregate amount of Registrable Securities to be registered, and (y) the intended method or methods of disposition thereof.

 

  (c) Upon receipt of the Demand Registration Request, the Company shall as promptly as practicable file a Registration Statement (a “ Demand Registration Statement ”), as specified in the Demand Registration Request

 

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  for such Demand Registration, relating to such Demand Registration, and use its reasonable best efforts to cause such Demand Registration Statement to be promptly declared effective under the Securities Act.

Section 3.2.2. Limitation on Demand Registrations . The Company shall not be obligated to take any action to effect any Demand Registration if a Demand Registration was declared effective or an Underwritten Shelf Takedown was consummated within the preceding ninety (90) days (unless otherwise consented to by the Company’s Board of Directors).

Section 3.2.3. Demand Notice . Promptly upon receipt of a Demand Registration Request pursuant to Section 3.2.1 (but in no event more than three (3) Business Days thereafter), the Company shall deliver a written notice (a “ Demand Notice ”) of any such Demand Registration Request to all other Holders and the Demand Notice shall offer each such Holder the opportunity to include in the Demand Registration that number of Registrable Securities as each such Holder may request in writing. The Company shall include in the Demand Registration all such Registrable Securities with respect to which the Company has received written requests for inclusion therein within two (2) Business Days after the date that the Demand Notice was delivered.

Section 3.2.4. Demand Withdrawal . A Demanding Holder and any other Holder that has requested its Registrable Securities be included in a Demand Registration pursuant to Section 3.2.3 may withdraw all or any portion of its Registrable Securities included in a Demand Registration from such Demand Registration at any time prior to the effectiveness of the applicable Demand Registration Statement. Upon receipt of a notice to such effect from a Demanding Holder (or if there is more than one Demanding Holder, from all such Demanding Holders) with respect to all of the Registrable Securities included by such Demanding Holder(s) in such Demand Registration, the Company shall cease all efforts to secure effectiveness of the applicable Demand Registration Statement.

Section 3.2.5. Effective Registration . The Company shall use reasonable best efforts to cause the Demand Registration Statement to become effective and remain effective for not less than one hundred eighty (180) days (or such shorter period as will terminate when all Registrable Securities covered by such Demand Registration Statement have been sold or withdrawn), or, if such Demand Registration Statement relates to an underwritten Public Offering, such longer period as in the opinion of counsel for the underwriter or underwriters a Prospectus is required by law to be delivered in connection with sales of Registrable Securities by an underwriter or dealer.

Section 3.2.6. Delay in Filing; Suspension of Registration . If the filing, initial effectiveness or continued use of a Demand Registration Statement at any time would require the Company to make an Adverse Disclosure, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, the Demand Registration Statement (a “ Demand Suspension ”); provided , however , that the Company shall not be permitted to exercise a Demand Suspension (i) more than once during any twelve (12)-month period or (ii) for a

 

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period exceeding thirty (30) days on any one occasion. In the case of a Demand Suspension, the Holders agree to suspend use of the applicable Prospectus in connection with any sale or purchase, or offer to sell or purchase, Registrable Securities, upon receipt of the notice referred to above. The Company shall immediately notify the Holders in writing upon the termination of any Demand Suspension, amend or supplement the Prospectus, if necessary, so it does not contain any untrue statement or omission and furnish to the Holders such numbers of copies of the Prospectus as so amended or supplemented as the Holders may reasonably request. The Company shall, if necessary, supplement or make amendments to the Demand Registration Statement, if required by the registration form used by the Company for the Demand Registration or by the instructions applicable to such registration form or by the Securities Act or the rules or regulations promulgated thereunder or as may reasonably be requested by the Holders of a majority of Registrable Securities that are included in such Demand Registration Statement.

Section 3.2.7. Priority of Securities Registered Pursuant to Demand Registrations . If the managing underwriter or underwriters of a proposed underwritten Public Offering of the Registrable Securities included in a Demand Registration, advise the Company in writing that, in its or their opinion, the number of securities requested to be included in such Demand Registration exceeds the number that can be sold in such offering without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, then the securities to be included in such Registration shall be in the case of any Demand Registration (x) first, allocated to each Holder that has requested to participate in such Demand Registration an amount equal to the lesser of (i) the number of such Registrable Securities requested to be registered or sold by such Holder, and (ii) a number of such shares equal to such Holder’s Pro Rata Portion, and (y) second, and only if all the securities referred to in clause (x) have been included, the number of other securities that, in the opinion of such managing underwriter or underwriters can be sold without having such adverse effect; provided , however , that Registrable Securities held by Managers that were fully vested as of the Closing or held by the JHI Investor shall not be subject to reduction pursuant to this Section 3.2.7 if requested to be included in such Demand Registration by such Manager or the JHI Investor.

Section 3.2.8. Resale Rights . In the event that a Principal Investor requests to participate in a Registration pursuant to this Section 3.2 in connection with a distribution of Registrable Securities to its partners or members, the Registration shall provide for resale by such partners or members, if requested by such Principal Investor.

Section 3.3. Shelf Registration .

Section 3.3.1. Request for Shelf Registration .

 

  (a)

Upon the written request of any Principal Investor from time to time following the Effective Date (a “ Shelf Registration Request ”), the Company shall promptly file with the SEC a shelf Registration Statement pursuant to Rule 415 under the Securities Act (“ Shelf Registration

 

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  Statement ”) relating to the offer and sale of Registrable Securities by any Holders thereof from time to time in accordance with the methods of distribution elected by such Holders and set forth in the Shelf Registration Statement and the Company shall use its reasonable best efforts to cause such Shelf Registration Statement to promptly become effective under the Securities Act. Any such Registration pursuant to a Shelf Registration Request shall hereinafter be referred to as a “ Shelf Registration .”

 

  (b) If on the date of the Shelf Registration Request: (i) the Company is a WKSI, then the Shelf Registration Request may request Registration of an unspecified amount of Registrable Securities; and (ii) the Company is not a WKSI, then the Shelf Registration Request shall specify the aggregate amount of Registrable Securities to be registered. The Company shall provide to the Principal Investors the information necessary to determine the Company’s status as a WKSI upon request.

Section 3.3.2. Shelf Registration Notice . Promptly upon receipt of a Shelf Registration Request (but in no event more than three (3) Business Days thereafter), the Company shall deliver a written notice (a “ Shelf Registration Notice ”) of any such request to all other Holders, which notice shall specify, if applicable, the amount of Registrable Securities to be registered, and the Shelf Registration Notice shall offer each such Holder the opportunity to include in the Shelf Registration that number of Registrable Securities as each such Holder may request in writing. The Company shall include in such Shelf Registration all such Registrable Securities with respect to which the Company has received written requests for inclusion therein within two (2) Business Days after the date that the Shelf Registration Notice has been delivered.

Section 3.3.3. Continued Effectiveness . The Company shall use its reasonable best efforts to keep such Shelf Registration Statement continuously effective under the Securities Act in order to permit the Prospectus forming part of the Shelf Registration Statement to be usable by Holders until the earlier of: (i) the date as of which all Registrable Securities have been sold pursuant to the Shelf Registration Statement or another Registration Statement filed under the Securities Act (but in no event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder); and (ii) the date as of which no Holder holds Registrable Securities (such period of effectiveness, the “ Shelf Period ”). Subject to Section 3.3.4, the Company shall be deemed not to have used its reasonable best efforts to keep the Shelf Registration Statement effective during the Shelf Period if the Company voluntarily takes any action or omits to take any action that would result in Holders of the Registrable Securities covered thereby not being able to offer and sell any Registrable Securities pursuant to such Shelf Registration Statement during the Shelf Period, unless such action or omission is required by applicable law.

Section 3.3.4. Suspension of Registration . If the continued use of such Shelf Registration Statement at any time would require the Company to make an Adverse Disclosure, the Company may, upon giving prompt written notice of such action to the Holders, suspend use of the Shelf Registration Statement (a “ Shelf Suspension ”);

 

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provided , however , that the Company shall not be permitted to exercise a Shelf Suspension (i) more than one time during any twelve (12)-month period, or (ii) for a period exceeding thirty (30) days on any one occasion. In the case of a Shelf Suspension, the Holders agree to suspend use of the applicable Prospectus and in connection with any sale or purchase of, or offer to sell or purchase, Registrable Securities, upon receipt of the notice referred to above. The Company shall immediately notify the Holders in writing upon the termination of any Shelf Suspension, amend or supplement the Prospectus, if necessary, so it does not contain any untrue statement or omission and furnish to the Holders such numbers of copies of the Prospectus as so amended or supplemented as the Holders may reasonably request. The Company shall, if necessary, supplement or make amendments to the Shelf Registration Statement, if required by the registration form used by the Company for the Shelf Registration Statement or by the instructions applicable to such registration form or by the Securities Act or the rules or regulations promulgated thereunder or as may reasonably be requested by any one of the Principal Investors.

Section 3.3.5. Shelf Takedown .

 

  (a) At any time during which the Company has an effective Shelf Registration Statement with respect to a Principal Investor’s Registrable Securities, by notice to the Company specifying the intended method or methods of disposition thereof, such Principal Investor may make a written request (a “ Shelf Takedown Request ”) to the Company to effect a Public Offering, including an Underwritten Shelf Takedown, of all or a portion of such Holder’s Registrable Securities that are covered by such Shelf Registration Statement, and as soon as practicable the Company shall amend or supplement the Shelf Registration Statement for such purpose.

 

  (b) Promptly upon receipt of a Shelf Takedown Request (but in no event more than three (3) Business Days thereafter) for any Underwritten Shelf Takedown, the Company shall deliver a notice (a “ Shelf Takedown Notice ”) to each other Holder with Registrable Securities covered by the applicable Registration Statement, or to all other Holders if such Registration Statement is undesignated (each a “ Potential Takedown Participant ”). The Shelf Takedown Notice shall offer each such Potential Takedown Participant the opportunity to include in any Underwritten Shelf Takedown that number of Registrable Securities as each such Potential Takedown Participant may request in writing. The Company shall include in the Underwritten Shelf Takedown all such Registrable Securities with respect to which the Company has received written requests for inclusion therein within two (2) Business Days after the date that the Shelf Takedown Notice has been delivered. Any Potential Takedown Participant’s request to participate in an Underwritten Shelf Takedown shall be binding on the Potential Takedown Participant; provided that each such Potential Takedown Participant that elects to participate may condition its participation on the Underwritten Shelf Takedown being completed within ten (10) Business Days of its acceptance at a price per share (after giving effect to any underwriters’

 

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  discounts or commissions) to such Potential Takedown Participant of not less than ninety-two percent (92%) of the closing price for the shares on their principal trading market on the Business Day immediately prior to such Potential Takedown Participant’s election to participate (the “ Participation Conditions ”). Notwithstanding the delivery of any Shelf Takedown Notice, but subject to the Participation Conditions (to the extent applicable), all determinations as to whether to complete any Underwritten Shelf Takedown and as to the timing, manner, price and other terms of any Underwritten Shelf Takedown contemplated by this Section 3.3.5 shall be determined by the initiating Principal Investor(s); provided that if such Underwritten Shelf Takedown is to be completed and subject to the Participation Conditions (to the extent applicable), each Potential Takedown Participant’s Pro Rata Portion shall be included in such Underwritten Shelf Takedown if such Potential Takedown Participant has complied with the requirements set forth in this Section 3.3.5.

 

  (c) The Company shall not be obligated to take any action to effect any Underwritten Shelf Takedown if a Demand Registration or an Underwritten Shelf Takedown was consummated within the preceding ninety (90) days (unless otherwise consented to by the Company’s Board of Directors).

Section 3.3.6. Priority of Securities Sold Pursuant to Shelf Takedowns . If the managing underwriter or underwriters of a proposed Underwritten Shelf Takedown pursuant to Section 3.3.5 advise the Company in writing that, in its or their opinion, the number of securities requested to be included in the proposed Underwritten Shelf Takedown exceeds the number that can be sold in such Underwritten Shelf Takedown without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, the number of Registrable Securities to be included in such offering shall be (x) first, allocated to each Holder that has requested to participate in such Underwritten Shelf Takedown an amount equal to the lesser of (i) the number of such Registrable Securities requested to be registered or sold by such Holder, and (ii) a number of such shares equal to such Holder’s Pro Rata Portion, and (y) second, and only if all the securities referred to in clause (x) have been included, the number of other securities that, in the opinion of such managing underwriter or underwriters can be sold without having such adverse effect; provided , however , that Registrable Securities held by Managers that were fully vested as of the Closing or held by the JHI Investor shall not be subject to reduction pursuant to this Section 3.3.6 if requested to be included in such Underwritten Shelf Takedown by such Manager or the JHI Investor.

Section 3.3.7. Resale Rights . In the event that a Principal Investor elects to request a Registration pursuant to this Section 3.3 in connection with a distribution of Registrable Securities to its partners or members, the Registration shall provide for resale by such partners or members, if requested by such Principal Investor.

 

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Section 3.4. Piggyback Registration .

Section 3.4.1. Participation . If the Company at any time proposes to file a Registration Statement under the Securities Act or to conduct a Public Offering with respect to any offering of its equity securities for its own account or for the account of any other Persons (other than (i) a Registration under Sections 3.1, 3.2 or 3.3, (ii) a Registration on Form S-4 or Form S-8 or any successor form to such Forms or (iii) a Registration of securities solely relating to an offering and sale to employees or directors of the Company or its subsidiaries pursuant to any employee stock plan or other employee benefit plan arrangement), then, as soon as practicable (but in no event less than ten (10) Business Days prior to the proposed date of filing of such Registration Statement or, in the case of any such Public Offering, the anticipated pricing or trade date), the Company shall give written notice (a “ Piggyback Notice ”) of such proposed filing or Public Offering to all Holders, and such Piggyback Notice shall offer the Holders the opportunity to register under such Registration Statement, or to sell in such Public Offering, such number of Registrable Securities as each such Holder may request in writing (a “ Piggyback Registration ”). Subject to Section 3.4.2, the Company shall include in such Registration Statement or in such Public Offering as applicable, all such Registrable Securities that are requested to be included therein within two (2) Business Days after the receipt by such Holder of any such notice; provided , however , that if at any time after giving written notice of its intention to register or sell any securities and prior to the effective date of the Registration Statement filed in connection with such Registration, or the pricing or trade date of such Public Offering, the Company shall determine for any reason not to register or sell or to delay Registration or the sale of such securities, the Company shall give written notice of such determination to each Holder and, thereupon, (i) in the case of a determination not to register or sell, shall be relieved of its obligation to register or sell any Registrable Securities in connection with such Registration or Public Offering (but not from its obligation to pay the Registration Expenses in connection therewith), without prejudice, however, to the rights of any Holders entitled to request that such Registration or sale be effected as a Demand Registration under Section 3.2 or an Underwritten Shelf Takedown under Section 3.3, as the case may be, and (ii) in the case of a determination to delay Registration or sale, in the absence of a request for a Demand Registration or an Underwritten Shelf Takedown, as the case may be, shall be permitted to delay registering or selling any Registrable Securities, for the same period as the delay in registering or selling such other securities. If the offering pursuant to such Registration Statement or Public Offering is to be underwritten, then each Holder making a request for a Piggyback Registration pursuant to this Section 3.4.1 shall, and the Company shall make such arrangements with the managing underwriter or underwriters so that each such Holder may, participate in such underwritten offering. If the offering pursuant to such Registration Statement or Public Offering is to be on any other basis, then each Holder making a request for a Piggyback Registration pursuant to this Section 3.4.1 shall, and the Company shall make such arrangements so that each such Holder may, participate in such offering on such basis. Any Holder shall have the right to withdraw all or part of its request for inclusion of its Registrable Securities in a Piggyback Registration by giving written notice to the Company of its request to withdraw; provided that such request must be made in writing prior to the effectiveness of such Registration Statement or, in the case of a Public Offering, at least two (2) Business Days prior to the earlier of the anticipated filing of the “red herring” Prospectus, if applicable, and the anticipated pricing or trade date.

 

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Section 3.4.2. Priority of Piggyback Registration . If the managing underwriter or underwriters of any proposed offering of Registrable Securities included in a Piggyback Registration informs the Company and the participating Holders in writing that, in its or their opinion, the number of securities that such Holders and any other Persons intend to include in such offering exceeds the number that can be sold in such offering without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, then the securities to be included in such Registration shall be (i) first, one hundred percent (100%) of the securities that the Company or (subject to Section 3.8) any Person (other than a Holder) exercising a contractual right to demand Registration, as the case may be, proposes to sell, and (ii) second, and only if all the securities referred to in clause (i) have been included, the number of Registrable Securities that, in the opinion of such managing underwriter or underwriters, can be sold without having such adverse effect, with such number to be allocated among the Holders that have requested to participate in such Registration based on an amount equal to the lesser of (i) the number of such Registrable Securities requested to be sold by such Holder, and (ii) a number of such shares equal to such Holder’s Pro Rata Portion and (iii) third, and only if all of the Registrable Securities referred to in clause (ii) have been included in such Registration, any other securities eligible for inclusion in such Registration.

Section 3.4.3. No Effect on Other Registrations . No Registration of Registrable Securities effected pursuant to a request under this Section 3.4 shall be deemed to have been effected pursuant to Sections 3.2 and 3.3 or shall relieve the Company of its obligations under Sections 3.2 and 3.3.

Section 3.5. Lock-Up Agreements . In connection with each Registration or sale of Registrable Securities pursuant to Section 3.2 or 3.3 conducted as an underwritten Public Offering, each Holder agrees, if requested, to become bound by and to execute and deliver such lock-up agreement with the underwriter(s) of such Public Offering restricting such Holder’s right to (a) Transfer, directly or indirectly, any Registrable Securities or (b) enter into any swap or other arrangement that transfers to another any of the economic consequences of ownership of Registrable Securities, as is entered into by any Principal Investor with the underwriter(s) of such Public Offering; provided , however , that no Holder shall be required to enter into a lock-up agreement covering a period of greater than 90 days after the date of the final Prospectus relating to such offering or such longer period as is agreed to by each of the Principal Investors. Notwithstanding the foregoing, such lock-up agreement shall not apply to (i) distributions-in-kind to a Principal Investor’s partners or members; (ii) Transfers to Affiliates, but only if such Affiliates agree to be bound by the restrictions herein; or (iii) Transfers to Permitted Transferees of such Holder in accordance with the terms of this Agreement.

Section 3.6. Registration Procedures .

Section 3.6.1. Requirements . In connection with the Company’s obligations under Sections 3.1, 3.2, 3.3 and 3.4, the Company shall use its reasonable best efforts to

 

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effect such Registration and to permit the sale of such Registrable Securities in accordance with the intended method or methods of distribution thereof as expeditiously as reasonably practicable, and in connection therewith the Company shall:

 

  (a) prepare the required Registration Statement, including all exhibits and financial statements required under the Securities Act to be filed therewith, and, before filing a Registration Statement or Prospectus or any amendments or supplements thereto, (x) furnish to the underwriters, if any, and to the Holders of the Registrable Securities covered by such Registration Statement, copies of all documents prepared to be filed, which documents shall be subject to the review of such underwriters and such Holders and their respective counsel, (y) make such changes in such documents concerning the Holders prior to the filing thereof as such Holders, or their counsel, may reasonably request and (z) except in the case of a Registration under Section 3.4, not file any Registration Statement or Prospectus or amendments or supplements thereto to which any participating Principal Investor, or the underwriters, if any, shall reasonably object;

 

  (b) prepare and file with the SEC such amendments and post-effective amendments to such Registration Statement and supplements to the Prospectus as may be (x) reasonably requested by any Principal Investor with Registrable Securities covered by such Registration Statement, (y) reasonably requested by any participating Holder (to the extent such request relates to information relating to such Holder), or (z) necessary to keep such Registration Statement effective for the period of time required by this Agreement, and comply with provisions of the applicable securities laws with respect to the sale or other disposition of all securities covered by such Registration Statement during such period in accordance with the intended method or methods of disposition by the sellers thereof set forth in such Registration Statement;

 

  (c) notify the participating Holders and the managing underwriter or underwriters, if any, and (if requested) confirm such notice in writing and provide copies of the relevant documents, as soon as reasonably practicable after notice thereof is received by the Company (a) when the applicable Registration Statement or any amendment thereto has been filed or becomes effective, and when the applicable Prospectus or any amendment or supplement thereto has been filed, (b) of any written comments by the SEC, or any request by the SEC or other federal or state governmental authority for amendments or supplements to such Registration Statement or such Prospectus, or for additional information (whether before or after the effective date of the Registration Statement) or any other correspondence with the SEC relating to, or which may affect, the Registration, (c) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any order by the SEC or any other regulatory authority preventing or suspending the

 

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  use of any preliminary or final Prospectus or the initiation or threatening of any proceedings for such purposes, (d) if, at any time, the representations and warranties of the Company in any applicable underwriting agreement cease to be true and correct in all material respects and (e) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

 

  (d) promptly notify each selling Holder and the managing underwriter or underwriters, if any, when the Company becomes aware of the happening of any event as a result of which the applicable Registration Statement or the Prospectus included in such Registration Statement (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of such Prospectus or any preliminary Prospectus, in light of the circumstances under which they were made) not misleading, when any Issuer Free Writing Prospectus includes information that may conflict with the information contained in the Registration Statement, or, if for any other reason it shall be necessary during such time period to amend or supplement such Registration Statement or Prospectus in order to comply with the Securities Act and, as promptly as reasonably practicable thereafter, prepare and file with the SEC, and furnish without charge to the selling Holders and the managing underwriter or underwriters, if any, an amendment or supplement to such Registration Statement or Prospectus, which shall correct such misstatement or omission or effect such compliance;

 

  (e) to the extent the Company is eligible under the relevant provisions of Rule 430B under the Securities Act, if the Company files any Shelf Registration Statement, the Company shall include in such Shelf Registration Statement such disclosures as may be required by Rule 430B under the Securities Act (referring to the unnamed selling security holders in a generic manner by identifying the initial offering of the securities to the Holders) in order to ensure that the Holders may be added to such Shelf Registration Statement at a later time through the filing of a Prospectus supplement rather than a post-effective amendment;

 

  (f) use its reasonable best efforts to prevent, or obtain the withdrawal of, any stop order or other order or notice preventing or suspending the use of any preliminary or final Prospectus;

 

  (g) promptly incorporate in a Prospectus supplement, Issuer Free Writing Prospectus or post-effective amendment such information as the managing underwriter or underwriters and the Holders of a majority of Registrable Securities being sold agree should be included therein relating to the plan of distribution with respect to such Registrable Securities; and make all

 

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  required filings of such Prospectus supplement, Issuer Free Writing Prospectus or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such Prospectus supplement, Issuer Free Writing Prospectus or post-effective amendment;

 

  (h) furnish to each selling Holder and each underwriter, if any, without charge, as many conformed copies as such Holder or underwriter may reasonably request of the applicable Registration Statement and any amendment or post-effective amendment or supplement thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference);

 

  (i) deliver to each selling Holder and each underwriter, if any, without charge, as many copies of the applicable Prospectus (including each preliminary prospectus) and any amendment or supplement thereto and such other documents as such Holder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities by such Holder or underwriter (it being understood that the Company shall consent to the use of such Prospectus or any amendment or supplement thereto by each of the selling Holders and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto);

 

  (j) on or prior to the date on which the applicable Registration Statement becomes effective, use its reasonable best efforts to register or qualify, and cooperate with the selling Holders, the managing underwriter or underwriters, if any, and their respective counsel, in connection with the Registration or qualification of such Registrable Securities for offer and sale under the securities or “Blue Sky” laws of each state and other jurisdiction as any such selling Holder or managing underwriter or underwriters, if any, or their respective counsel reasonably request in writing and do any and all other acts or things reasonably necessary or advisable to keep such Registration or qualification in effect for such period as required by Section 3.2 or Section 3.3, as applicable, provided that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to taxation or general service of process in any such jurisdiction where it is not then so subject;

 

  (k) cooperate with the selling Holders and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request at least two (2) Business Days prior to any sale of Registrable Securities to the underwriters;

 

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  (l) use its reasonable best efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of such Registrable Securities;

 

  (m) not later than the effective date of the applicable Registration Statement, provide a CUSIP number for all Registrable Securities and provide the applicable transfer agent with printed certificates for the Registrable Securities which are in a form eligible for deposit with The Depository Trust Company (in the case of a Registration Statement);

 

  (n) make such representations and warranties to the Holders being registered, and the underwriters or agents, if any, in form, substance and scope as are customarily made by issuers in public offerings similar to the offering then being undertaken;

 

  (o) enter into such customary agreements (including underwriting and indemnification agreements) and take all such other actions as any participating Principal Investor or the managing underwriter or underwriters, if any, reasonably request in order to expedite or facilitate the Registration and disposition of such Registrable Securities;

 

  (p) obtain for delivery to the Holders being registered and to the underwriter or underwriters, if any, an opinion or opinions from counsel for the Company dated the most recent effective date of the Registration Statement or, in the event of an underwritten Public Offering, the date of the closing under the underwriting agreement, in customary form, scope and substance, which opinions shall be reasonably satisfactory to such Holders or underwriters, as the case may be, and their respective counsel;

 

  (q) in the case of an underwritten Public Offering, obtain for delivery to the Company and the managing underwriter or underwriters, with copies to the Holders included in such Registration or sale, a comfort letter from the Company’s independent certified public accountants or independent auditors (and, if necessary, any other independent certified public accountants or independent auditors of any subsidiary of the Company or any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement) in customary form and covering such matters of the type customarily covered by comfort letters as the managing underwriter or underwriters reasonably request, dated the date of execution of the underwriting agreement and brought down to the closing under the underwriting agreement;

 

  (r) cooperate with each seller of Registrable Securities and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA;

 

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  (s) use its reasonable best efforts to comply with all applicable securities laws and, if a Registration Statement was filed, make available to its security holders, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder;

 

  (t) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Registration Statement from and after a date not later than the effective date of such Registration Statement;

 

  (u) use its best efforts to cause all Registrable Securities covered by the applicable Registration Statement to be listed on each securities exchange on which any of the Company’s equity securities are then listed or quoted and on each inter-dealer quotation system on which any of the Company’s equity securities are then quoted.

 

  (v) make available upon reasonable notice at reasonable times and for reasonable periods for inspection by a representative appointed by the majority of the Holders covered by the applicable Registration Statement, by any underwriter participating in any disposition to be effected pursuant to such Registration Statement and by any attorney, accountant or other agent retained by such Holders or any such underwriter, all pertinent financial and other records and pertinent corporate documents and properties of the Company, and cause all of the Company’s officers, directors and employees and the independent public accountants who have certified its financial statements to make themselves available to discuss the business of the Company and to supply all information reasonably requested by any such Person in connection with such Registration Statement; provided , however , that any such Person gaining access to information regarding the Company pursuant to this Section 3.6.1(v) shall agree to hold in strict confidence and shall not make any disclosure or use any information regarding the Company that the Company determines in good faith to be confidential, and of which determination such Person is notified, unless (a) the release of such information is requested or required (by deposition, interrogatory, requests for information or documents by a governmental entity, subpoena or similar process), (b) disclosure of such information, in the opinion of counsel to such Person, is otherwise required by law, (c) such information is or becomes publicly known other than through a breach of this or any other agreement of which such Person has knowledge, (d) such information is or becomes available to such Person on a non-confidential basis from a source other than the Company or (e) such information is independently developed by such Person;

 

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  (w) in the case of a marketed Public Offering, cause the senior executive officers of the Company to participate in the customary “road show” presentations that may be reasonably requested by the managing underwriter or underwriters in any such offering and otherwise to facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto;

 

  (x) take no direct or indirect action prohibited by Regulation M under the Exchange Act;

 

  (y) take all reasonable action to ensure that any Issuer Free Writing Prospectus utilized in connection with any Registration complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related Prospectus, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and

 

  (z) take all such other commercially reasonable actions as are necessary or advisable in order to expedite or facilitate the disposition of such Registrable Securities in accordance with the terms of this Agreement.

Section 3.6.2. Company Information Requests . The Company may require each seller of Registrable Securities as to which any Registration or sale is being effected to furnish to the Company such information regarding the distribution of such securities and such other information relating to such Holder and its ownership of Registrable Securities as the Company may from time to time reasonably request in writing and the Company may exclude from such Registration or sale the Registrable Securities of any such Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request. Each Holder agrees to furnish such information to the Company and to cooperate with the Company as reasonably necessary to enable the Company to comply with the provisions of this Agreement.

Section 3.6.3. Discontinuing Registration . Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.6.1(d), such Holder will forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3.6.1(d), or until such Holder is advised in writing by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus, or any amendments or supplements thereto, and if so directed by the Company, such Holder shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. In the event the Company shall give any such notice, the period

 

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during which the applicable Registration Statement is required to be maintained effective shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such Registration Statement either receives the copies of the supplemented or amended Prospectus contemplated by Section 3.6.1(d) or is advised in writing by the Company that the use of the Prospectus may be resumed.

Section 3.7. Underwritten Offerings .

Section 3.7.1. Shelf and Demand Registrations . If requested by the underwriters for any underwritten Public Offering, pursuant to a Registration or sale under Sections 3.2 or 3.3, the Company shall enter into an underwriting agreement with such underwriters, such agreement to be reasonably satisfactory in substance and form to each of the Company, each Principal Investor seeking to participate in such offering and the underwriters, and to contain such representations and warranties by the Company and such other terms as are generally prevailing in agreements of that type, including indemnities no less favorable to the recipient thereof than those provided in Section 3.10. The Holders of the Registrable Securities proposed to be distributed by such underwriters shall cooperate with the Company in the negotiation of the underwriting agreement and shall give consideration to the reasonable suggestions of the Company regarding the form thereof. Such Holders to be distributed by such underwriters shall be parties to such underwriting agreement, which underwriting agreement shall: (i) contain such representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such Holders as are customarily made by issuers to selling stockholders in public offerings similar to the applicable offering; and (ii) provide that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement also shall be conditions precedent to the obligations of such Holders. Any such Holder shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Holder, such Holder’s title to the Registrable Securities, such Holder’s intended method of distribution and any other representations required to be made by the Holder under applicable law, and the aggregate amount of the liability of such Holder shall not exceed such Holder’s net proceeds from such offering.

Section 3.7.2. Piggyback Registrations . If the Company proposes to register or sell any of its securities under the Securities Act as contemplated by Section 3.4 and such securities are to be distributed through one or more underwriters, the Company shall, if requested by any Holder pursuant to Section 3.4 and, subject to the provisions of Section 3.4.2, use its reasonable best efforts to arrange for such underwriters to include on the same terms and conditions that apply to the other sellers in such Registration or sale all the Registrable Securities to be offered and sold by such Holder among the securities of the Company to be distributed by such underwriters in such Registration or sale. The Holders of Registrable Securities to be distributed by such underwriters shall be parties to the underwriting agreement between the Company and such underwriters, which underwriting agreement shall (i) contain such representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such Holders as

 

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are customarily made by issuers to selling stockholders in secondary public offerings and (ii) provide that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement also shall be conditions precedent to the obligations of such Holders. Any such Holder shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Holder, such Holder’s title to the Registrable Securities and such Holder’s intended method of distribution or any other representations required to be made by the Holder under applicable law, and the aggregate amount of the liability of such Holder shall not exceed such Holder’s net proceeds from such offering.

Section 3.7.3. Participation in Underwritten Registrations . Subject to the provisions of Section 3.7.1 and Section 3.7.2 above, no Person may participate in any underwritten Public Offering, hereunder unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Persons entitled to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

Section 3.7.4. Selection of Underwriters . In the case of an underwritten Public Offering, under Sections 3.2 or 3.3, the managing underwriter or underwriters to administer the offering shall be determined by the initiating Principal Investor(s); provided that such underwriter or underwriters shall be reasonably acceptable to the Company.

Section 3.8. No Inconsistent Agreements; Additional Rights . Neither the Company nor any of its subsidiaries shall hereafter enter into, and neither the Company nor any of its subsidiaries is currently a party to, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders by this Agreement. Without Requisite Investor Approval, neither the Company nor any of its subsidiaries shall enter into any agreement granting registration or similar rights to any Person, and the Company hereby represents and warrants that, as of the date hereof, no registration or similar rights have been granted to any other Person other than pursuant to this Agreement.

Section 3.9. Registration Expenses . All expenses incident to the Company’s performance of or compliance with this Agreement shall be paid by the Company, including (i) all registration and filing fees, and any other fees and expenses associated with filings required to be made with the SEC or FINRA, (ii) all fees and expenses in connection with compliance with any securities or “Blue Sky” laws (including reasonable fees and disbursements of counsel for the underwriters in connection with blue sky qualifications of the Registrable Securities), (iii) all printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing Prospectuses), (iv) all fees and disbursements of counsel for the Company and of all independent certified public accountants or independent auditors of the Company and any subsidiaries of the Company (including the expenses of any special audit and comfort letters required by or incident to such performance), (v) Securities Act liability insurance or similar insurance if the Company so

 

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desires or the underwriters so require in accordance with then-customary underwriting practice, (vi) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange or quotation of the Registrable Securities on any inter-dealer quotation system, (vii) all applicable rating agency fees with respect to the Registrable Securities, (viii) all reasonable fees and disbursements of legal counsel for each Principal Investor and the JHI Investor to the extent that they participate in such Registration or sale, (ix) all fees and expenses of accountants selected by the Holders of a majority of the Registrable Securities being registered, (x) any reasonable fees and disbursements of underwriters customarily paid by issuers or sellers of securities, (xi) all fees and expenses incurred in connection with the distribution or Transfer of Registrable Securities to or by a Holder or its Permitted Transferees in connection with a Public Offering, (xii) all fees and expenses of any special experts or other Persons retained by the Company in connection with any Registration or sale, (xiii) all of the Company’s internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties) and (xiv) all expenses related to the “road-show” for any underwritten Public Offering (including the reasonable out-of-pocket expenses of the Principal Investors), including all travel, meals and lodging. All such expenses are referred to herein as “ Registration Expenses ”. The Company shall not be required to pay any fees and disbursements to underwriters not customarily paid by the issuers of securities in an offering similar to the applicable offering, including underwriting discounts and commissions and transfer taxes, if any, attributable to the sale of Registrable Securities.

Section 3.10. Indemnification .

Section 3.10.1. Indemnification by the Company . The Company shall indemnify and hold harmless, to the full extent permitted by law, each Holder, each shareholder, member, limited or general partner thereof, each shareholder, member, limited or general partner of each such shareholder, member, limited or general partner, each of their respective Affiliates, officers, directors, shareholders, employees, advisors, and agents and each Person who controls (within the meaning of the Securities Act or the Exchange Act) such Persons and each of their respective Representatives from and against any and all losses, penalties, judgments, suits, costs, claims, damages, liabilities and expenses, joint or several (including reasonable costs of investigation and legal expenses) (each, a “ Loss ” and collectively “ Losses ”) arising out of or based upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement under which such Registrable Securities are registered or sold under the Securities Act (including any final, preliminary or summary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein) or any other disclosure document produced by or on behalf of the Company or any of its subsidiaries including any report and other document filed under the Exchange Act, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus or preliminary Prospectus, in light of the circumstances under which they were made) not misleading or (iii) any violation or alleged violation by the Company or any of its subsidiaries of any federal, state, foreign or common law rule or regulation applicable to the Company or any of its subsidiaries and relating to action or inaction in connection with any such registration, disclosure document or other document or report; provided , that no selling Holder shall be entitled to indemnification pursuant to this Section 3.10.1 in respect of

 

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any untrue statement or omission contained in any information furnished in writing by such selling Holder to the Company specifically for inclusion in a Registration Statement that has not been corrected in a subsequent writing prior to or concurrently with the sale of the Registrable Securities to the Person asserting the claim. This indemnity shall be in addition to any liability the Company may otherwise have. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Holder or any indemnified party and shall survive the Transfer of such securities by such Holder. The Company shall also indemnify underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, their officers and directors and each Person who controls such Persons (within the meaning of the Securities Act and the Exchange Act) to the same extent as provided above with respect to the indemnification of the indemnified parties.

Section 3.10.2. Indemnification by the Selling Holders . Each selling Holder agrees (severally and not jointly) to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors and officers and each Person who controls the Company (within the meaning of the Securities Act or the Exchange Act) from and against any Losses resulting from (i) any untrue statement of a material fact in any Registration Statement under which such Registrable Securities were registered or sold under the Securities Act (including any final, preliminary or summary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein) or (ii) any omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus or preliminary Prospectus, in light of the circumstances under which they were made) not misleading, in each case to the extent, but only to the extent, that such untrue statement or omission is contained in any information furnished in writing by such selling Holder to the Company specifically for inclusion in such Registration Statement and has not been corrected in a subsequent writing prior to or concurrently with the sale of the Registrable Securities to the Person asserting the claim. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder under the sale of Registrable Securities giving rise to such indemnification obligation less any amounts paid by such Holder pursuant to Section 3.10.4 and any amounts paid by such Holder as a result of liabilities incurred under the underwriting agreement, if any, related to such sale. The Company shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above (with appropriate modification) with respect to information furnished in writing by such Persons specifically for inclusion in any Prospectus or Registration Statement.

Section 3.10.3. Conduct of Indemnification Proceedings . Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification ( provided that any delay or failure to so notify the indemnifying party shall relieve the indemnifying party of its obligations hereunder only to the extent, if at all, that it is actually and materially prejudiced by reason of such delay or failure) and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified

 

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party; provided , however , that any Person entitled to indemnification hereunder shall have the right to select and employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (i) the indemnifying party has agreed in writing to pay such fees or expenses, (ii) the indemnifying party shall have failed to assume the defense of such claim within a reasonable time after receipt of notice of such claim from the Person entitled to indemnification hereunder and employ counsel reasonably satisfactory to such Person, (iii) the indemnified party has reasonably concluded (based upon advice of its counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, or (iv) in the reasonable judgment of any such Person (based upon advice of its counsel) a conflict of interest may exist between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person). If the indemnifying party assumes the defense, the indemnifying party shall not have the right to settle such action without the consent of the indemnified party. No indemnifying party shall consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of an unconditional release from all liability in respect to such claim or litigation without the prior written consent of such indemnified party. If such defense is not assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its prior written consent, but such consent may not be unreasonably withheld. It is understood that the indemnifying party or parties shall not, except as specifically set forth in this Section 3.10.3, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements or other charges of more than one separate firm admitted to practice in such jurisdiction at any one time unless (x) the employment of more than one counsel has been authorized in writing by the indemnifying party or parties, (y) an indemnified party has reasonably concluded (based on the advice of counsel) that there may be legal defenses available to it that are different from or in addition to those available to the other indemnified parties or (z) a conflict or potential conflict exists or may exist (based upon advice of counsel to an indemnified party) between such indemnified party and the other indemnified parties, in each of which cases the indemnifying party shall be obligated to pay the reasonable fees and expenses of such additional counsel or counsels.

Section 3.10.4. Contribution . If for any reason the indemnification provided for in Section 3.10.1 and Section 3.10.2 is unavailable to an indemnified party (other than as a result of exceptions contained in Section 3.10.1 and Section 3.10.2) or insufficient in respect of any Losses referred to therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Loss in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party or parties on the other hand in connection with the acts, statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. In connection with any Registration Statement filed with the SEC by the Company, the relative fault of the indemnifying party on the one hand and

 

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the indemnified party on the other hand shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just or equitable if contribution pursuant to this Section 3.10.4 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in this Section 3.10.4. 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 was not guilty of such fraudulent misrepresentation. The amount paid or payable by an indemnified party as a result of the Losses referred to in Sections 3.10.1 and 3.10.2 shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 3.10.4, in connection with any Registration Statement filed by the Company, a selling Holder shall not be required to contribute any amount in excess of the dollar amount of the net proceeds received by such holder under the sale of Registrable Securities giving rise to such contribution obligation less any amounts paid by such Holder pursuant to Section 3.10.2 and any amounts paid by such Holder as a result of liabilities incurred under the underwriting agreement, if any, related to such sale. If indemnification is available under this Section 3.10, the indemnifying parties shall indemnify each indemnified party to the full extent provided in Sections 3.10.1 and 3.10.2 hereof without regard to the provisions of this Section 3.10.4. The remedies provided for in this Section 3.10 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

Section 3.11. Rules 144 and 144A and Regulation S . The Company shall file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if the Company is not required to file such reports, it will, upon the request of any Holder, make publicly available such necessary information for so long as necessary to permit sales that would otherwise be permitted by this Agreement pursuant to Rule 144, Rule 144A or Regulation S under the Securities Act, as such Rules may be amended from time to time or any similar rule or regulation hereafter adopted by the SEC), and it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without Registration under the Securities Act in transactions that would otherwise be permitted by this Agreement and within the limitation of the exemptions provided by (i) Rules 144, 144A or Regulation S under the Securities Act, as such rules may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any Holder, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements and, if not, the specifics thereof.

Section 3.12. Existing Registration Statements . Notwithstanding anything herein to the contrary and subject to applicable law and regulation, the Company may satisfy any obligation hereunder to file a Registration Statement or to have a Registration Statement become effective by a specified date by designating, by notice to the Holders, a Registration Statement that

 

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previously has been filed with the SEC or become effective, as the case may be, as the relevant Registration Statement for purposes of satisfying such obligation, and all references to any such obligation shall be construed accordingly; provided that such previously filed Registration Statement may be amended or, subject to applicable securities laws, supplemented to add the number of Registrable Securities, and, to the extent necessary, to identify as selling stockholders those Holders demanding the filing of a Registration Statement pursuant to the terms of this Agreement. To the extent this Agreement refers to the filing or effectiveness of other Registration Statements, by or at a specified time and the Company has, in lieu of then filing such Registration Statements or having such Registration Statements become effective, designated a previously filed or effective Registration Statement as the relevant Registration Statement for such purposes, in accordance with the preceding sentence, such references shall be construed to refer to such designated Registration Statement, as amended.

ARTICLE IV

MISCELLANEOUS

Section 4.1. Authority: Effect . Each party hereto represents and warrants to and agrees with each other party that the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized on behalf of such party and do not violate any agreement or other instrument applicable to such party or by which its assets are bound. This Agreement does not, and shall not be construed to, give rise to the creation of a partnership among any of the parties hereto, or to constitute any of such parties members of a joint venture or other association. The Company and its subsidiaries shall be jointly and severally liable for all obligations of each such party pursuant to this Agreement.

Section 4.2. Notices . Any notices, requests, demands and other communications required or permitted in this Agreement shall be effective if in writing and (i) delivered personally, (ii) sent by facsimile or e-mail, or (iii) sent by overnight courier, in each case, addressed as follows:

If to the Company to:

 

Taylor Morrison Home Corporation

4900 North Scottsdale Road, Suite 2000

Scottsdale, AZ 85251

Attention:    Darrell Sherman,
   Vice President and General Counsel
Facsimile:    (866) 390-2612
E-mail:    dsherman@taylormorrison.com

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

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York 10019

Attention:    John C. Kennedy
   Lawrence G. Wee
Facsimile:    (212) 757-3990
E-mail:    jkennedy@paulweiss.com
   lwee@paulweiss.com

 

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If to the TPG Investor to:

 

TPG Global, LLC
301 Commerce Street, Suite 3300
Fort Worth, TX 76102
Attention:    Ronald Cami
Facsimile:    (415) 743-1501
E-mail:rcami@tpg.com

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

 

Ropes & Gray LLP
The Prudential Tower
800 Boylston Street
Boston, Massachusetts 02199
Attention:    Alfred O. Rose
   Julie H. Jones
Facsimile:    (617) 951-7050
E-mail:    alfred.rose@ropesgray.com
   julie.jones@ropesgray.com

If to the Oaktree Investor , to:

 

Oaktree Capital Management, L.P.

333 South Grand Ave., 28th Floor

Los Angeles, CA 90071

Attention:    Kenneth Liang
Facsimile:    (213) 830-6293
E-mail:    kliang@oaktreecapital.com

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

 

Debevoise & Plimpton LLP
919 Third Avenue
New York, NY 10022
Attention:    George E.B. Maguire
   Jasmine Ball
Facsimile:    (212) 909-6836
E-mail:    gebmaguire@debevoise.com
   jball@debevoise.com

 

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If to the JHI Investor , to:

 

JHI Holdings Limited Partnership
c/o JHI Advisory Inc.
Suite 3260 - 666 Burrard Street
Vancouver, British Columbia
Canada V6C 2X8
Attention:    G. Gail Edwards
Facsimile:    (604) 648-6685
E-mail:    gedwards@jhinvest.com

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

 

McCarthy Tétrault LLP
1300 - 777 Dunsmuir Street
Vancouver, British Columbia
Canada V7Y 1K2
Attention:    Cameron Belsher
Facsimile:    (604) 622-5674
E-mail:    cbelsher@mccarthy.ca

If to any Manager , to:

 

c/o Taylor Morrison Home Corporation
900 North Scottsdale Road, Suite 2000
Scottsdale, AZ 85251
Attention:    Darrell Sherman,
   Vice President and General Counsel
Facsimile:    (866) 390-2612
E-mail:    dsherman@taylormorrison.com

Notice to the holder of record of any Registrable Securities shall be deemed to be notice to the holder of such securities for all purposes hereof.

Unless otherwise specified herein, such notices or other communications shall be deemed effective (i) on the date received, if personally delivered, (ii) on the date received if delivered by facsimile or e-mail on a Business Day, or if not delivered on a Business Day, on the first Business Day thereafter and (iii) two (2) Business Days after being sent by overnight courier. Each of the parties hereto shall be entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto.

Section 4.3. Termination and Effect of Termination . This Agreement shall terminate upon the date on which no Holder holds any Registrable Securities, except for the provisions of Sections 3.10 and 3.11, which shall survive any such termination. No termination under this Agreement shall relieve any Person of liability for breach prior to termination. In the event this Agreement is terminated, each Person entitled to indemnification rights pursuant to Section 3.10 hereof shall retain such indemnification rights with respect to any matter that (i) may be an indemnified liability thereunder and (ii) occurred prior to such termination.

 

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Section 4.4. Permitted Transferees . The rights of a Holder hereunder may be assigned (but only with all related obligations as set forth below) in connection with a Transfer of New TMM Units, shares of Class B Common Stock or Registrable Securities effected in accordance with the terms of the Limited Partnership Agreement of TMM Holdings II Limited Partnership and this Agreement to a Permitted Transferee of that Holder. Without prejudice to any other or similar conditions imposed hereunder with respect to any such Transfer, no assignment permitted under the terms of this Section 4.4 will be effective unless the Permitted Transferee to which the assignment is being made, if not a Holder, has delivered to the Company a written acknowledgment and agreement in form and substance reasonably satisfactory to the Company that the Permitted Transferee will be bound by, and will be a party to, this Agreement. A Permitted Transferee to whom rights are transferred pursuant to this Section 4.4 may not again transfer those rights to any other Permitted Transferee, other than as provided in this Section 4.4.

Section 4.5. Remedies . The parties to this Agreement shall have all remedies available at law, in equity or otherwise in the event of any breach or violation of this Agreement or any default hereunder. The parties acknowledge and agree that in the event of any breach of this Agreement, in addition to any other remedies that may be available, each of the parties hereto shall be entitled to specific performance of the obligations of the other parties hereto and, in addition, to such other equitable remedies (including preliminary or temporary relief) as may be appropriate in the circumstances. No delay of or omission in the exercise of any right, power or remedy accruing to any party as a result of any breach or default by any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or default occurring later; nor shall any such delay, omission nor waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after that waiver.

Section 4.6. Amendments . This Agreement may not be orally amended, modified, extended or terminated, nor shall any oral waiver of any of its terms be effective. This Agreement may be amended, modified, extended or terminated, and the provisions hereof may be waived, only by an agreement in writing signed by the Company and the Principal Investors; provided , however , that any amendment, modification, extension or termination that disproportionately and adversely affects any of the Managers shall require the prior written consent of the chief executive officer of the Company and any amendment, modification, extension or termination that disproportionately and adversely affects the JHI Investor shall require the prior written consent of the JHI Investor. Each such amendment, modification, extension or termination shall be binding upon each party hereto and each Other Holder. In addition, each party hereto may waive any right hereunder by an instrument in writing signed by such party.

Section 4.7. Governing Law . This Agreement and all claims arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by and construed in accordance with the domestic substantive laws of the State of New York without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

Section 4.8. Consent to Jurisdiction . Each party to this Agreement, by its execution hereof, (i) hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts

 

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sitting in the State of New York for the purpose of any action, claim, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation arising out of or based upon this Agreement or relating to the subject matter hereof, (ii) hereby waives to the extent not prohibited by applicable law, and agrees not to assert, and agrees not to allow any of its subsidiaries to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such proceeding brought in one of the above-named courts is improper, or that this Agreement or the subject matter hereof or thereof may not be enforced in or by such court and (iii) hereby agrees not to commence or maintain any action, claim, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation arising out of or based upon this Agreement or relating to the subject matter hereof or thereof other than before one of the above-named courts nor to make any motion or take any other action seeking or intending to cause the transfer or removal of any such action, claim, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation to any court other than one of the above-named courts whether on the grounds of inconvenient forum or otherwise. Notwithstanding the foregoing, to the extent that any party hereto is or becomes a party in any litigation in connection with which it may assert indemnification rights set forth in this Agreement, the court in which such litigation is being heard shall be deemed to be included in clause (i) above. Notwithstanding the foregoing, any party to this Agreement may commence and maintain an action to enforce a judgment of any of the above-named courts in any court of competent jurisdiction. Each party hereto hereby consents to service of process in any such proceeding in any manner permitted by New York law, and agrees that service of process by registered or certified mail, return receipt requested, at its address specified pursuant to Section 4.2 hereof is reasonably calculated to give actual notice.

Section 4.9. WAIVER OF JURY TRIAL . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 4.9 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 4.9 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

Section 4.10. Merger; Binding Effect, Etc . This Agreement (along with the Exchange Agreement) constitutes the entire agreement of the parties with respect to its subject matter, supersedes all prior or contemporaneous oral or written agreements or discussions with respect to such subject matter, and shall be binding upon and inure to the benefit of the parties hereto and thereto and their respective heirs, representatives, successors and permitted assigns. Except as

 

- 32 -


otherwise expressly provided herein, no Holder or other party hereto may assign any of its respective rights or delegate any of its respective obligations under this Agreement without the prior written consent of the other parties hereto, and any attempted assignment or delegation in violation of the foregoing shall be null and void.

Section 4.11. Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one instrument.

Section 4.12. Severability . In the event that any provision hereof would, under applicable law, be invalid or unenforceable in any respect, such provision shall be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law. The provisions hereof are severable, and in the event any provision hereof should be held invalid or unenforceable in any respect, it shall not invalidate, render unenforceable or otherwise affect any other provision hereof.

Section 4.13. No Recourse . Notwithstanding anything that may be expressed or implied in this Agreement, the Company and each Holder covenant, agree and acknowledge that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement shall be had against any current or future director, officer, employee, general or limited partner or member of any Holder or of any Affiliate or assignee thereof, as such, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any current or future officer, agent or employee of any Holder or any current or future member of any Holder or any current or future director, officer, employee, partner or member of any Holder or of any Affiliate or assignee thereof, as such, for any obligation of any Holder under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.

[ Signature pages follow ]

 

- 33 -


IN WITNESS WHEREOF , each of the undersigned has duly executed this Agreement (or caused this Agreement to be executed on its behalf by its officer or representative thereunto duly authorized) under seal as of the date first above written.

 

Taylor Morrison Home Corporation
By:  

/s/ Darrell Sherman

Name:   Darrell Sherman
Title:   Vice President, General Counsel and Secretary

 

[ Signature Page to Registration Rights Agreement ]


TPG TMM HOLDINGS II, L.P.
By:   TPG TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Ronald Cami

  Name:   Ronald Cami
  Title:   Vice President and Secretary

 

[Signature Page to Registration Rights Agreement]


OCM TMM HOLDINGS II, L.P.
By:   OCM TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Derek Smith

  Name:   Derek Smith
  Title:   Authorized Signatory
By:  

/s/ Kenneth Liang

  Name:   Kenneth Liang
  Title:   Authorized Signatory

 

[Signature Page to Registration Rights Agreement]


JHI HOLDING LIMITED PARTNERSHIP
By:  

LOGO

 

  Name:
  Title:

 

[ Signature Page to Registration Rights Agreement ]


/s/ Kenneth Dar Ahrens

Kenneth Dar Ahrens

 

[Signature Page to Registration Rights Agreement]


/s/ Sally Michelle Bassett

Sally Michelle Bassett

 

[Signature Page to Registration Rights Agreement]


/s/ Philip S. Bodem

Philip S. Bodem

 

[Signature Page to Registration Rights Agreement]


/s/ Calvin R. Boyd

Calvin R. Boyd

 

[Signature Page to Registration Rights Agreement]


/s/ Michelle M Campbell

Michelle M Campbell

 

[Signature Page to Registration Rights Agreement]


/s/ Carl David Cone

Carl David Cone

 

[Signature Page to Registration Rights Agreement]


/s/ Mark A. Delillo

Mark A. Delillo

 

[Signature Page to Registration Rights Agreement]


/s/ Timothy Eller

Timothy Eller

 

[Signature Page to Registration Rights Agreement]


/s/ Charles Enochs

Charles Enochs

 

[Signature Page to Registration Rights Agreement]


/s/ Caroline G. Estrada

Caroline G. Estrada

 

[Signature Page to Registration Rights Agreement]


/s/ Kip Williams Gilleland

Kip Williams Gilleland

 

[Signature Page to Registration Rights Agreement]


/s/ Amy L. Haywood Rino

Amy L. Haywood Rino

 

[Signature Page to Registration Rights Agreement]


/s/ George T. Hennessy

George T. Hennessy

 

[Signature Page to Registration Rights Agreement]


/s/ Erik M. Heuser

Erik M. Heuser

 

[Signature Page to Registration Rights Agreement]


/s/ David Hreha

David Hreha

 

[Signature Page to Registration Rights Agreement]


/s/ Douglas P. Holloway

Douglas P. Holloway

 

[Signature Page to Registration Rights Agreement]


/s/ Graham Hughes

Graham Hughes

 

[Signature Page to Registration Rights Agreement]


/s/ James E. Jimison

James E. Jimison

 

[Signature Page to Registration Rights Agreement]


/s/ Maurice B. Johnson

Maurice B. Johnson

 

[Signature Page to Registration Rights Agreement]


/s/ Tawn Kelley

Tawn Kelley

 

[Signature Page to Registration Rights Agreement]


/s/ John Kempton

John Kempton

 

[Signature Page to Registration Rights Agreement]


/s/ Laura Kunzweiler

Laura Kunzweiler

 

[Signature Page to Registration Rights Agreement]


/s/ Peter Lane

Peter Lane

 

[Signature Page to Registration Rights Agreement]


/s/ John H. Lucas

John H. Lucas

 

[Signature Page to Registration Rights Agreement]


/s/ Tommi Lynn Manning

Tommi Lynn Manning

 

[Signature Page to Registration Rights Agreement]


/s/ Todd Merrill

Todd Merrill

 

[Signature Page to Registration Rights Agreement]


/s/ Douglas Miller

Douglas Miller

 

[Signature Page to Registration Rights Agreement]


/s/ Kathleen R. Owen

Kathleen R. Owen

 

[Signature Page to Registration Rights Agreement]


/s/ Sheryl D. Palmer

Sheryl D. Palmer

 

[Signature Page to Registration Rights Agreement]


/s/ Joseph B. Poletti

Joseph B. Poletti

 

[Signature Page to Registration Rights Agreement]


/s/ Darrell Sherman

Darrell Sherman

 

[Signature Page to Registration Rights Agreement]


/s/ Louis Steffens

Louis Steffens

 

[Signature Page to Registration Rights Agreement]


/s/ Timothy J. Towell

Timothy J. Towell

 

[Signature Page to Registration Rights Agreement]


/s/ Stephen J. Wether

Stephen J. Wether

 

[Signature Page to Registration Rights Agreement]


/s/ Jonathan C. White

Jonathan C. White

 

[Signature Page to Registration Rights Agreement]


/s/ Erin A. Willis

Erin A. Willis

 

[Signature Page to Registration Rights Agreement]


/s/ Robert W. Witte

Robert W. Witte

 

[Signature Page to Registration Rights Agreement]

Exhibit 10.2

EXECUTION VERSION

 

 

 

TMM HOLDINGS II LIMITED PARTNERSHIP

A Cayman Islands Exempted Limited Partnership

 

 

Amended and Restated

Agreement of Exempted Limited Partnership

 

 

Dated April 9, 2013

 

 

 


TABLE OF CONTENTS

 

          Page

1.

  

DEFINITIONS

   1

2.

  

FORMATION AND PURPOSE

   7
   2.1   

Formation

   7
   2.2   

Name

   7
   2.3   

Term

   7
   2.4   

Registered Office and Agent

   8
   2.5   

Purpose and Powers

   8
   2.6   

Limited Liability

   8
   2.7   

Agreement

   9

3.

  

PARTNERSHIP, CAPITAL CONTRIBUTIONS AND UNITS

   9
   3.1   

Partners

   9
   3.2   

Limited Partner Interests and Units

   9
   3.3   

Unvested Common Units

   9
   3.4   

Specific Limitations

   10
   3.5   

Additional Partners and Units

   10
   3.6   

Capital Contributions

   12
   3.7   

Certification

   13
   3.8   

Disposition Events

   13
   3.9   

Tender Offers and Other Events with Respect to TMHC

   14
   3.10   

Record Date

   14

4.

  

CAPITAL ACCOUNTS

   15
   4.1   

Capital Accounts

   15
   4.2   

Revaluations of Assets and Capital Account Adjustments

   15
   4.3   

Additional Capital Account Provisions

   15

5.

  

DISTRIBUTIONS AND ALLOCATIONS OF PROFIT AND LOSS

   16
   5.1   

Distributions

   16
   5.2   

No Violation

   18
   5.3   

Withholding; Tax Indemnity

   18

 

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   5.4   

Property Distributions and Installment Sales

   18
   5.5   

Net Profit or Net Loss

   18
   5.6   

Regulatory Allocations

   20
   5.7   

Tax Allocations

   20
   5.8   

Changes in Partners’ Interests

   21
   5.9   

Allocation for Canadian Tax Purposes

   21
   5.10   

No Duty to Account

   21

6.

  

STATUS, RIGHTS AND POWERS OF LIMITED PARTNERS

   21
   6.1   

Return of Distributions of Capital

   21
   6.2   

No Management or Control

   22

7.

  

MANAGEMENT OF THE PARTNERSHIP

   22
   7.1   

General Partner

   22
   7.2   

Authority of the General Partner Exclusive

   23
   7.3   

Execution of Papers

   24
   7.4   

Noncontravention

   24

8.

  

DESIGNATION, RIGHTS, AUTHORITIES, POWERS, RESPONSIBILITIES AND DUTIES OF OFFICERS AND AGENTS

   24
   8.1   

Officers, Agents

   24

9.

  

BOOKS, RECORDS, ACCOUNTING AND REPORTS

   24
   9.1   

Books and Records

   24
   9.2   

Tax Information

   24
   9.3   

Continuation

   25
   9.4   

Non-Disclosure

   25

10.

  

TAX MATTERS PARTNER

   26
   10.1   

Classification as a Partnership and Other Tax Matters

   26
   10.2   

Tax Matters Partner

   26
   10.3   

Indemnity of Tax Matters Partner

   27
   10.4   

Tax Returns

   27

11.

  

TRANSFER OF INTERESTS

   27
   11.1   

Restricted Transfer

   27
   11.2   

Transfer Requirements

   28

 

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   11.3   

Consent

   28
   11.4   

Withdrawal of Partner

   28
   11.5   

Amendment of Exhibit 3.1

   29
   11.6   

FIRPTA Certificates and Withholding

   29

12.

  

WINDING UP AND DISSOLUTION OF THE PARTNERSHIP

   29
   12.1   

Termination of Limited Partnership

   29
   12.2   

Events of Liquidation

   29
   12.3   

Liquidation

   30
   12.4   

No Further Claim

   30

13.

  

INDEMNIFICATION

   30
   13.1   

Indemnification Rights

   30
   13.2   

Exculpation

   32
   13.3   

Persons Entitled to Indemnity

   32
   13.4   

Procedure Agreements

   33
   13.5   

Business Opportunities

   33
   13.6   

Reliance, etc .

   33

14.

  

REPRESENTATIONS AND COVENANTS BY THE PARTNERS

   34
   14.1   

Investment Intent

   34
   14.2   

Securities Regulation

   34
   14.3   

Knowledge and Experience

   34
   14.4   

Binding Agreement

   34
   14.5   

Tax Position

   34
   14.6   

Information

   35
   14.7   

Tax and Other Advice

   35
   14.8   

Publicly Traded Partnership Matters

   35
   14.9   

Tax Information

   35
   14.10   

Licenses and Permits

   36
   14.11   

Canadian Securities Laws

   36

15.

  

PARTNERSHIP REPRESENTATIONS

   36
   15.1   

Duly Formed

   36
   15.2   

Valid Issue

   37

 

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16.

  

AMENDMENTS TO AGREEMENT

   37
   16.1   

Amendments

   37
   16.2   

Binding Effect

   37

17.

  

GENERAL

   37
   17.1   

Successors; Governing Law

   37
   17.2   

Notices, Etc .

   37
   17.3   

Severability

   40
   17.4   

Construction

   40
   17.5   

Table of Contents, Headings

   40
   17.6   

Rights Limited

   40
   17.7   

Entire Agreement

   41
   17.8   

No Third Party Rights

   41
   17.9   

Effect of Waiver or Consent

   41
   17.10   

Counterparts and Facsimile

   41
   17.11   

Jurisdiction and Venue; Waiver of Jury Trial

   42
   17.12   

Offset

   42
   17.13   

Adjustment of Numbers

   42
   17.14   

Business Days

   42
   17.15   

Survival

   43
   17.16   

Wills

   43
   17.17   

Spousal Consent

   43
   17.18   

Designees

   43
   17.19   

Gender

   43

 

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TMM HOLDINGS II LIMITED PARTNERSHIP

AMENDED AND RESTATED

AGREEMENT OF EXEMPTED LIMITED PARTNERSHIP

This Amended and Restated Agreement of Exempted Limited Partnership (as amended from time to time, this “ Agreement ”) of TMM Holdings II Limited Partnership, a Cayman Islands exempted limited partnership (the “ Partnership ”), dated April 9, 2013 is made by and among TMM Holdings II GP, ULC, an unlimited liability company organized under the laws of British Columbia, as the general partner, TPG TMM Holdings II LP, ULC as the initial limited partner (the “ Initial Limited Partner ”) and each of the Persons executing this Agreement as a limited partner.

RECITALS

WHEREAS, the General Partner formed the Partnership pursuant to an Agreement of Exempted Limited Partnership dated April 3, 2013 by and between the General Partner and the Initial Limited Partner (the “ Original Agreement ”) upon its registration pursuant to Section 9 of the Exempted Limited Partnership Law (2012 Revision) of the Cayman Islands (such law as amended from time to time, or any successor law, the “ ELP Law ”).

WHEREAS, the Partners now desire to enter into this Agreement to amend and restate in its entirety the Original Agreement.

NOW, THEREFORE, in consideration of the mutual covenants expressed herein, the parties hereby agree as follows:

AGREEMENT

 

1. DEFINITIONS.

For purposes of this Agreement (a) certain capitalized terms have specifically defined meanings set forth below, (b) references to “Articles,” “Exhibits,” “Recitals” and “Sections” are to Articles, Exhibits, Recitals and Sections of this Agreement unless explicitly indicated otherwise, (c) references to statutes include all rules and regulations thereunder, and all amendments and successors thereto from time to time and (d) the word “including” shall be construed as “including without limitation.”

Affiliate ” means, with respect to any specified Person, (a) any Person that directly or through one or more intermediaries controls or is controlled by or is under common control with the specified Person, (b) any Person who is a general partner, partner, managing director, manager, officer, director or principal of the specified Person or (c) in the event that the specified Person is a natural Person, a Member of the Immediate Family of such Person. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise; provided that TMHC, the General Partner, the Partnership and each Subsidiary of the Partnership or TMHC shall be deemed not to be an Affiliate of TPG Cayman or Oaktree Cayman.


Affiliate Indemnitors ” is defined in Section 13.1(b) .

Agreement ” is defined in the preamble.

Asset Value ” of any property of the Partnership means its adjusted basis for U.S. federal income tax purposes unless:

 

  (a) the property was accepted by the Partnership as a contribution to capital at a value different from its adjusted basis, in which event the initial Asset Value for such property shall mean the gross Fair Value of the property agreed to by the Partnership and the contributing Limited Partner; or

 

  (b) the property of the Partnership is revalued in accordance with Section 4.2 , in which event the Asset Value for such property shall equal the Fair Value established pursuant to such revaluation.

As of any date, references to the “then prevailing Asset Value” of any property shall mean the Asset Value last determined for such property less the depreciation, amortization and cost recovery deductions taken into account in computing Net Profit or Net Loss in fiscal periods (or portions thereof) subsequent to such prior determination date.

Assignee ” means any Person who acquires in any manner whatsoever any Units or other interest in the Partnership from an Assignor in accordance with Article 11 .

Assignor ” is defined in Section 11.1(b) .

Assumed Tax Rate ” is defined in Section 5.1(a).

Capital Account ” is defined in Section 4.1 .

Capital Contribution ” means, with respect to any Limited Partner, the sum of (a) the amount of money plus (b) the Fair Value of any other property (net of liabilities assumed or to which the property is subject) at the time of contribution, in each case contributed to the Partnership with respect to the Interest held by such Limited Partner pursuant to this Agreement.

Class ” means, when used with reference to a Unit, the class of Units of which such Unit is a part.

Class A Common Stock ” means the Class A common stock, par value $0.00001 per share, of TMHC.

Class B Common Stock ” means the Class B common stock, par value $0.00001 per share, of TMHC.

Code ” means the U.S. Internal Revenue Code of 1986, as amended.

Common Unit Holder ” means a Person in regard to such Person’s particular Interest in Common Units.

 

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Common Units ” is defined in Section 3.2 .

Confidential Information ” is defined in Section 9.3 .

Covered Person ” is defined in Section 13.1(c) .

Disposition Event ” means any merger, consolidation or other business combination of TMHC, whether effectuated through one transaction or series of related transactions (including a tender offer followed by a merger in which holders of Class A Common Stock receive the same consideration per share paid in the tender offer), unless, following such transaction, all or substantially all of the holders of the voting power of all outstanding classes of TMHC Common Stock and series of preferred stock of TMHC that are generally entitled to vote in the election of directors prior to such transaction or series of transactions continue to hold a majority of the voting power of the surviving entity (or its parent) resulting from such transaction or series of transactions in substantially the same proportions as immediately prior to such transaction or series of transactions.

Distribution ” means cash or property (valued at its Fair Value and net of liabilities assumed or to which the property is subject, in each case at the time of distribution) distributed by the Partnership to a Limited Partner in respect of the Limited Partner’s Interest whether by liquidating distribution, dividend or otherwise; provided , that a Distribution does not include any redemption or repurchase by the Partnership of any Common Units or Interests and does not include any recapitalization or exchange or distribution of securities of the Partnership, any subdivision (by Unit split or otherwise) or any combination (by reverse Unit split or otherwise) of any outstanding Units.

ELP Law ” is defined in the recitals.

Equity Securities ” means (a) 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 as well as debt or equity instruments convertible, exchangeable or exercisable into any such units, interests, rights or other ownership interests and (b) with respect to a corporation, any and all shares, interests, participation or other equivalents (however designated) of corporate stock, including all common stock and preferred stock, or warrants, options or other rights to acquire any of the foregoing, including any debt instrument convertible or exchangeable into any of the foregoing.

Exchange Agreement ” means the Exchange Agreement dated as of the date hereof, by and among TMHC, the Partnership and the holders of New TMM Units (as defined therein) and shares of Class B Common Stock from time to time party thereto, as amended or restated from time to time.

Fair Value ” means:

 

  (a) as applied to any asset constituting cash or cash equivalents, the amount of such cash or cash equivalents,

 

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  (b) as applied to any asset constituting publicly traded securities that may be immediately sold in the public markets without any restrictions or limitations, the average, over a period of twenty-one (21) days consisting of the date of valuation and the twenty (20) consecutive business days prior to that date, of the average of the closing prices of the sales of such securities on the primary securities exchange on which such securities may at that time be listed, or, if there have been no sales on such exchange on any day, the average of the highest bid and lowest asked prices on such exchange at the end of such day, or, if on any day such securities are not so listed, the average of the representative bid and asked prices quoted in the NASDAQ System as of 4:00 p.m., New York time, or, if on any day such securities are not quoted in the NASDAQ System, the average of the highest bid and lowest asked prices on such day in the domestic over the counter market as reported by the National Quotation Bureau Incorporated, or any similar successor organization,

 

  (c) as applied to any assets other than cash, cash equivalents, or publicly traded securities that may be immediately sold in the public markets without any restrictions or limitations, the fair value of such assets, as determined by the General Partner, which shall take into account any factors that it deems relevant, and

 

  (d) as applied to any Common Unit after the closing of the IPO, the average, over a period of twenty-one (21) days consisting of the date of valuation and the twenty (20) consecutive business days prior to that date, of the average of the closing prices of the sales of shares of Class A Common Stock on the New York Stock Exchange.

Fiscal Year ” means the fiscal year of the Partnership, which, subject to Section 9.1, shall be the calendar year, or such other fiscal year as determined by the General Partner.

General Partner ” means the Person named in the parties clause above as the general partner and/or any other Person admitted to the Partnership as a general partner, from time to time, in accordance with this Agreement, in each case only for so long as such Person is a general partner of the Partnership in accordance with this Agreement.

Indemnified Persons ” is defined in Section 13.1 .

Initial Limited Partner ” is defined in the preamble.

Interest ” means, with respect to any Person as of any time, such Person’s partnership interest in the Partnership, which includes the number of Units such Limited Partner holds and such Person’s Capital Account balance.

IPO ” means the initial public offering of shares of Class A Common Stock of TMHC.

Legislation ” is defined in Section 14.9 .

 

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Liabilities ” means all liabilities of the Partnership which, in accordance with generally accepted accounting principles in the United States, should be carried as liabilities on the balance sheet of the Partnership.

Limited Partner ” means each Person that executes this Agreement as a limited partner as of the date hereof and/or any other Person admitted to the Partnership as a limited partner, from time to time, in accordance with this Agreement, in each case only for so long as such Person is a limited partner of the Partnership in accordance with this Agreement.

Management Limited Partner ” means any Limited Partner listed under “Management Limited Partners” on the signature pages hereto and any Management Permitted Transferees of such Limited Partner to whom Vested Common Units are Transferred in accordance with the terms of this Agreement.

Management Permitted Transferee ” means, with respect to any Management Limited Partner, any of (a) a Member of the Immediate Family of such Management Limited Partner; (b) a trust established by or for the benefit of such Management Limited Partner of which only such Management Limited Partner and Members of his or her Immediate Family are beneficiaries; and (c) upon an individual Management Limited Partner’s death, an executor, administrator or beneficiary of the estate of the deceased Management Limited Partner.

Management Rollover Agreement ” means, with respect to each Management Limited Partner, the Common Unit Rollover Agreement by and among such Management Limited Partner, the Partnership and TMM, as amended or restated from time to time.

Member of the Immediate Family ” means, with respect to any natural person, (a) each parent, spouse (but not including a former spouse or a spouse from whom such Partner is legally separated) or child (including those adopted) of such individual and (b) each trustee, solely in his or her capacity as trustee and so long as such trustee is reasonably satisfactory to the General Partner, for a trust naming only one or more of the Persons listed in sub-clause (a) as beneficiaries.

MI Plan ” means the New TMM Cayman 2013 Management Incentive Plan, as amended or restated from time to time.

Monarch ” means Monarch Communities Inc., a British Columbia corporation.

Net Profit ” and “ Net Loss ” are defined in Section 5.5 .

Oaktree Cayman ” means OCM TMM Holdings II, L.P., a Cayman Islands exempted limited partnership.

Partners ” means the General Partner and/or the Limited Partners, as the context requires.

Person ” means an individual, a partnership, a joint venture, an association, a corporation, a trust, an estate, a limited liability company, a limited liability partnership, an unincorporated entity of any kind, a governmental entity or any other legal entity.

 

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Regulations ” means the regulations, including temporary regulations, promulgated under the Code.

Regulatory Allocations ” is defined in Section 5.6 .

Representative ” means, with respect to any Person, any director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel, accountants, and financial advisors.

Securities Act ” means the U.S. Securities Act of 1933 and applicable rules and regulations thereunder.

Securities and Exchange Commission ” means the U.S. Securities and Exchange Commission and any successor governmental agency or regulatory body.

Stockholders Agreement ” means the Stockholders Agreement by and among TMHC and the stockholders party thereto, dated as of April 9, 2013.

Subsidiary ” means, with respect to any Person, any corporation, limited liability company, partnership, association or business entity of which (a) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (b) if a limited liability company, partnership, association or other business entity (other than a corporation), a majority of partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity (other than a corporation) if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or control any managing director or general partner of such limited liability company, partnership, association or other business entity. For purposes hereof, references to a “Subsidiary” of any Person shall be given effect only at such times that such Person has one or more Subsidiaries, and, unless otherwise indicated, the term “Subsidiary” refers to a Subsidiary of the Partnership.

Tax Distribution ” is defined in Section 5.1(a) .

Tax Matters Partner ” is defined in Section 10.2 .

TMHC ” means Taylor Morrison Home Corporation, a Delaware corporation.

TMHC Common Stock ” means all classes and series of common stock of TMHC, including the Class A Common Stock and Class B Common Stock.

TMHC Offer ” is defined in Section 3.8 .

TMHI ” means Taylor Morrison Holdings, Inc., a Delaware corporation.

 

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TMM ” means TMM Holdings Limited Partnership, a British Columbia limited partnership.

TPG Cayman ” means TPG TMM Holdings II, L.P., a Cayman Islands exempted limited partnership.

Transfer ” means, with respect to any Units, any interest therein, or any other securities or equity interests, a direct transfer, sale, exchange, assignment, pledge, hypothecation or other direct encumbrance or other direct transfer or disposition thereof, including the direct grant of an option or other right, whether voluntarily, involuntarily, or by operation of law; and “Transferred,” “Transferee” and “Transferor” shall each have a correlative meaning. For the avoidance of doubt, any indirect transfer, sale, exchange, assignment, pledge, hypothecation or other indirect encumbrance or other indirect transfer or disposition shall not fall within the definition of “ Transfer ”.

Units ” means the Common Units and any other class of units of interest in the Partnership that are a measure of a Limited Partner’s share of Net Profit and Net Loss in the Partnership as provided in Article 5 ,

Unvested Common Unit ” means, on any date of determination, any Common Unit held by a Management Limited Partner that is not a Vested Common Unit.

USRPI Information ” is defined in Section 9.2 .

Vested Common Unit ” means, on any date of determination, any Common Unit held by a Management Limited Partner that is “vested” in accordance with such Management Limited Partner’s (or its direct or indirect transferor’s) applicable Management Rollover Agreement.

Withdrawing Partner ” is defined in Section 5.9 .

 

2. FORMATION AND PURPOSE.

2.1 Formation . The Partnership was formed pursuant to the Original Agreement upon its registration as an exempted limited partnership under the ELP Law on April 3, 2013. The rights and liabilities of the Partners shall be determined pursuant to the ELP Law and this Agreement. To the extent that the rights or obligations of any Partner are different by reason of any provision of this Agreement than they would be in the absence of such provision, this Agreement shall, to the extent permitted by the ELP Law, control.

2.2 Name . The name of the Partnership is TMM Holdings II Limited Partnership. The business of the Partnership may be conducted under that name or any other name that the General Partner deems appropriate or advisable in accordance with the ELP Law. The General Partner shall make the filing required by Section 10 of the ELP Law upon any such change of name.

2.3 Term . The term of the Partnership commenced on April 3, 2013 upon the Partnership’s registration as an exempted limited partnership under the ELP Law, and shall continue until the Partnership is wound up and dissolved in accordance with this Agreement.

 

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2.4 Registered Office and Agent . The Partnership’s registered agent for service of process on the Partnership and the address of the Partnership’s registered office in the Cayman Islands shall be c/o Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or such other agent or office in the Cayman Islands as the General Partner may from time to time designate.

2.5 Purpose and Powers . Subject to the limitations contained elsewhere in this Agreement, the Partnership is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Partnership is, engaging in any lawful act or activity for which limited partnerships may be formed under the ELP Law and engaging in any and all activities necessary, advisable, convenient or incidental thereto. The Partnership shall have all powers permitted under applicable laws to do any and all things deemed by the General Partner to be necessary or desirable in furtherance of the purposes of the Partnership. Notwithstanding the foregoing, the Partnership shall not undertake business with the public in the Cayman Islands other than so far as may be necessary for the carrying on of the business of the Partnership exterior to the Cayman Islands.

2.6 Limited Liability .

(a) Except as otherwise required by the ELP Law and this Agreement, the debts, obligations and liabilities of the Partnership, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Partnership, and no Limited Partner shall be obligated personally for any such debt, obligation or liability of the Partnership solely by reason of being a Limited Partner. All Persons dealing with the Partnership shall look solely to the General Partner and the assets of the Partnership for the payment of the debts, obligations or liabilities of the Partnership.

(b) To the fullest extent permitted by law, the General Partner shall not be liable to the Partnership or any other Partner for any act or omission taken or suffered by the General Partner in good faith and in the belief that such act or omission is in the best interests of the Partnership; provided that such act or omission does not constitute actual fraud, gross negligence or willful misconduct by the General Partner. To the fullest extent permitted by law, the General Partner shall not be liable to the Partnership or any other Partner for any action taken by any other Partner, nor shall the General Partner be liable to the Partnership or any other Partner for any action of any employee or agent of the Partnership.

(c) To the fullest extent permitted by law, and notwithstanding any other provision of this Agreement or in any agreement contemplated herein or applicable provisions of law or equity or otherwise, whenever in this Agreement the General Partner is permitted or required to make a decision (i) in its “discretion” or “sole discretion” or under a grant of similar authority or latitude, the General Partner shall be entitled to consider only such interests and factors as it desires, including its own and any of its Affiliates’ interests, and shall have no duty or obligation to give any consideration to any interests of or factors affecting the Partnership or any other person, or (ii) in its “good faith” or under another express standard, the General Partner shall act under such express standard and shall not be subject to any other or different standard.

 

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2.7 Agreement . The General Partner hereby admits each of the Limited Partners who made the Initial New TMM Contribution and the Second Initial New TMM Contribution (as such terms are defined in the Reorganization Agreement dated as of April 9, 2013) and who is a party to this Agreement as a Limited Partner prior to the end of the first Fiscal Year of the Partnership established pursuant to Section 9.1 for Canadian tax purposes, and effective thereafter hereby admits each of the other Limited Partners who is a party to this Agreement as Limited Partners and the General Partner, the Initial Limited Partner and the Limited Partners hereby amend and restate the Original Agreement in its entirety on the terms of this Agreement. The Initial Limited Partner hereby withdraws as a limited partner of the Partnership immediately following the admission of the Limited Partners pursuant to this Section 2.7 and hereby and thereafter shall have no further rights, liabilities or obligations under or in respect of this Agreement.

 

3. PARTNERSHIP, CAPITAL CONTRIBUTIONS AND UNITS.

3.1 Partners . The Limited Partners of the Partnership shall be listed on Exhibit 3.1 , as from time to time amended and supplemented in accordance with this Agreement. The Partnership shall maintain a current list of Limited Partners, the total amount of Capital Contributions made by each such Limited Partner, the number and Class of Units held by such Limited Partner and each Limited Partner’s Capital Account balance. The Partnership will also maintain a current list of the number of each Management Limited Partner’s Unvested Common Units and Vested Common Units.

3.2 Limited Partner Interests and Units . The Interests of the Limited Partners of the Partnership shall be divided into Units. The “ Common Units ” shall initially be the only Class of Units. Each “ Common Unit ” shall represent an Interest in the Partnership, shall be designated as a Common Unit of the Partnership and shall be entitled to the Distributions provided for in Article 5 except as provided in Section 3.3 with respect to the Unvested Common Units. No fractional Units shall be issued. In lieu of any fractional Units, a Limited Partner otherwise entitled to a fractional interest in a Unit, shall receive the nearest whole number of Units (with fractions equal to exactly 0.5 being rounded up).

3.3 Unvested Common Units . Unvested Common Units shall be subject to the terms of the MI Plan and applicable Management Rollover Agreements, and the General Partner shall have sole and absolute discretion to interpret and administer the MI Plan and Management Rollover Agreements and to adopt such amendments thereto or otherwise determine the terms and conditions of such Unvested Common Units in accordance with this Agreement and the applicable Management Rollover Agreements. Except as set forth in Article 5 , distributions shall not be made in respect of Unvested Common Units. Unvested Common Units that fail to vest and are forfeited by the applicable Management Limited Partner shall be cancelled by the Partnership (along with the Interest that such Unvested Common Units represent and the corresponding shares of Class B Common Stock) and shall no longer be entitled to any Distributions. The Partnership shall treat a Management Limited Partner holding an Unvested Common Unit as the owner of such Unit, and the Partnership shall file its IRS Form 1065, and the Partnership shall issue appropriate Schedule K-1s, if any, to such Management Limited Partner, allocating to such Management Limited Partner its distributive share of all items of income, gain, loss, deduction and credit associated with such Unvested Common Unit as if it

 

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were fully vested. Each Management Limited Partner agrees to take into account such distributive share in computing its U.S. federal income tax liability for the entire period during which it holds any Unvested Common Unit. The Partnership and each Limited Partner agree not to claim a deduction (as wages, compensation or otherwise) for U.S. federal, state and local income tax purposes the fair market value of any Unvested Common Unit issued to a Management Limited Partner, whether at the time of grant of the Unit or at the time the Unit becomes a Vested Common Unit. Each recipient of an Unvested Common Unit (whether issued on or after the date hereof) agrees to timely and properly file an election under Section 83(b) of the Code with respect to each Unvested Common Unit and provide the General Partner with a copy of such election.

3.4 Specific Limitations . Without the consent of the General Partner, TPG Cayman and Oaktree Cayman, in each case solely to the extent such Person, directly or indirectly (through a direct or indirect ownership interest in any Limited Partner other than through ownership of TMHC Common Stock), then has an ownership interest in Units or Interests in the Partnership, no Limited Partner shall have the right or power to: (a) withdraw or reduce its Capital Contribution except as provided by the ELP Law or in this Agreement, (b) make voluntary Capital Contributions or contribute any property to the Partnership other than cash, (c) bring an action for partition against the Partnership or any Partnership assets, (d) except as provided by the ELP Law, cause the winding up and dissolution of the Partnership, or (e) require that property other than cash be distributed upon any Distribution.

3.5 Additional Partners and Units .

(a) The General Partner may issue Units or Interests in the Partnership (including other Classes thereof having different rights) and admit Limited Partners in exchange for such contributions to capital (including commitments to make contributions to capital) or such other consideration (including past or future services) and on such terms and conditions (including vesting and forfeiture provisions) as the General Partner determines. Promptly following the issuance of Units or Interests, the General Partner shall cause the books and records of the Partnership to reflect the number of Units or Interests issued, any Limited Partners or additional Limited Partners holding such Units or Interests and, in the case of Units or Interests issued other than solely in connection with the performance of services, the Capital Contribution per Unit or Interest. Upon the execution of a deed of adherence, an amendment to this Agreement or an assumption agreement, together with any other documents or instruments required by the General Partner in connection therewith, and the making of the Capital Contribution (if any) specified to be made at such time, a Person shall be admitted to the Partnership as a Limited Partner.

(b) Notwithstanding the foregoing or anything else to the contrary in this Agreement, if at any time TMHC issues a share of its Class A Common Stock (including in the IPO) or any other Equity Security of TMHC (other than shares of Class B Common Stock), (i) the Partnership shall issue to TMHC one Common Unit (if TMHC issues a share of Class A Common Stock), or such other Equity Security of the Partnership (if TMHC issues Equity Securities other than Class A Common Stock) corresponding to the Equity Securities issued by TMHC, and with substantially the same

 

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rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of TMHC and (ii) the net proceeds received by TMHC with respect to the corresponding share of Class A Common Stock or other Equity Security, if any, shall be concurrently transferred to the Partnership; provided , however , that if TMHC issues any shares of Class A Common Stock (including in the IPO) or other Equity Securities some or all of the net proceeds of which are to be used to fund expenses or other obligations of TMHC for which TMHC would be permitted a cash distribution pursuant to clause (ii) of Section 5.1(d) , then TMHC shall not be required to transfer such net proceeds to the Partnership which are used or will be used to fund such expenses or obligations; provided, further, that if TMHC issues any shares of Class A Common Stock in order to purchase or fund the purchase from a Limited Partner of a number of Common Units (together with shares of Class B Common Stock) equal to the number of shares of Class A Common Stock so issued, then the Partnership shall not issue any new Common Units in connection therewith and TMHC shall not be required to transfer such net proceeds to the Partnership (it being understood that such net proceeds shall instead be transferred to such Limited Partner as consideration for such purchase). Notwithstanding the foregoing, this Section 3.5(b) shall not apply to the issuance and distribution to holders of shares of TMHC Common Stock of rights to purchase Equity Securities of the TMHC under a “poison pill” or similar shareholders rights plan (it being understood that upon exchange of Common Units for Class A Stock, such Class A Stock will be issued together with a corresponding right), or to the issuance under TMHC’s employee benefit plans of any warrants, options, other rights to acquire Equity Securities of TMHC or rights or property that may be converted into or settled in Equity Securities of TMHC, but shall in each of the foregoing cases apply to the issuance of Equity Securities of TMHC in connection with the exercise or settlement of such rights, warrants, options or other rights or property. Except for transactions pursuant to the Exchange Agreement, (x) the Partnership may not issue any additional Common Units to TMHC, any Subsidiary of TMHC or any Person of whom TMHC directly or indirectly owns Equity Securities unless substantially simultaneously TMHC issues or sells an equal number of shares of TMHC’s Class A Common Stock to another Person, and (y) the Partnership may not issue any other Equity Securities of the Partnership to TMHC, any Subsidiary of TMHC or any Person of whom TMHC directly or indirectly owns Equity Securities unless substantially simultaneously TMHC issues or sells, to another Person, an equal number of shares of a new class or series of Equity Securities of TMHC with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Partnership.

(c) TMHC may not redeem, repurchase or otherwise acquire any shares of Class A Common Stock (including upon forfeiture of any unvested shares of Class A Common Stock) unless substantially simultaneously the Partnership redeems, repurchases or otherwise acquires from TMHC an equal number of Common Units for the same price per security and TMHC may not redeem or repurchase any other Equity Securities of TMHC unless substantially simultaneously the Partnership redeems or repurchases from TMHC an equal number of Equity Securities of the Partnership of a corresponding class or series with substantially the same rights to dividends and

 

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distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of TMHC for the same price per security. The Partnership may not redeem, repurchase or otherwise acquire any Common Units from TMHC unless substantially simultaneously TMHC redeems, repurchases or otherwise acquires an equal number of shares of Class A Common Stock for the same price per security from holders thereof, and the Partnership may not redeem, repurchase or otherwise acquire any other Equity Securities of the Partnership from TMHC unless substantially simultaneously TMHC redeems, repurchases or otherwise acquires for the same price per security an equal number of Equity Securities of TMHC of a corresponding class or series with substantially the same rights to dividends and distributions (including distribution upon liquidation) and other economic rights as those of such Equity Securities of TMHC. Notwithstanding the foregoing, to the extent that any consideration payable to TMHC in connection with the redemption or repurchase of any shares of Class A Common Stock or other Equity Securities of TMHC consists (in whole or in part) of shares of Class A Common Stock or such other Equity Securities (including, for the avoidance of doubt, in connection with the cashless exercise of an option or warrant), then the redemption or repurchase of the corresponding Common Units or other Equity Securities of the Partnership shall be effectuated in an equivalent manner. TMHC may not authorize, declare or pay any dividends or distributions in respect of its Class A Common Stock unless substantially simultaneously the Partnership authorizes, declares and pays the same dividend or distribution pursuant to Section 5.1(b) or Section 5.1(c) in respect of its Common Units.

(d) The Partnership shall not in any manner effect any subdivision (by any stock split, stock dividend, reclassification, recapitalization or otherwise) or combination (by reverse stock split, reclassification, recapitalization or otherwise) of the outstanding Common Units unless accompanied by an identical subdivision or combination, as applicable, of the outstanding TMHC Common Stock with corresponding changes made with respect to any other exchangeable or convertible securities. TMHC shall not in any manner effect any subdivision (by any stock split, stock dividend, reclassification, recapitalization or otherwise) or combination (by reverse stock split, reclassification, recapitalization or otherwise) of the outstanding TMHC Common Stock unless accompanied by an identical subdivision or combination, as applicable, of the outstanding Common Units, with corresponding changes made with respect to any other exchangeable or convertible securities.

3.6 Capital Contributions . Each Limited Partner’s Capital Contribution, if any, whether in cash or in-kind, and the number of Units or other Interests issued to such Limited Partner shall be as set forth in Exhibit 3.1 or in the agreement executed by the General Partner pursuant to which such Units were issued to such Limited Partner. Any in-kind Capital Contributions shall be effected by a written assignment or such other documents as the General Partner shall direct. Any Limited Partner making an in-kind Capital Contribution agrees from time to time to take such further acts and execute such further documents as the General Partner may direct to perfect the Partnership’s interest in such in-kind Capital Contribution.

 

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3.7 Certification . In the event that certificates representing Units or other Interests in the Partnership are issued, such certificates will bear the following legend:

“THE UNITS OR OTHER INTERESTS REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON [DATE OF ISSUANCE], HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS (“STATE ACTS”) AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR STATE ACTS OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE TRANSFER OF THE UNITS REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN AN AMENDED AND RESTATED AGREEMENT OF EXEMPTED LIMITED PARTNERSHIP, DATED APRIL 9, 2013, AS IT MAY BE AMENDED FROM TIME TO TIME, GOVERNING THE ISSUER (THE “PARTNERSHIP”) AND BY AND AMONG THE PARTNERS. A COPY OF SUCH AGREEMENT SHALL BE FURNISHED BY THE PARTNERSHIP TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.”

3.8 Disposition Events .

(a) Notwithstanding any other provision of this Agreement, if a Disposition Event is approved in accordance with the Stockholders Agreement and consummated in accordance with applicable law, at the request of the Partnership (or following such Disposition Event, its successor) or TMHC (or following such Disposition Event, its successor), each of the Limited Partners shall be required to exchange with TMHC, at any time and from time to time after, or simultaneously with, the consummation of such Disposition Event, all of such Limited Partner’s Common Units and shares of Class B Common Stock for aggregate consideration for each Common Unit and corresponding share of Class B Common Stock that is equal to the consideration payable in respect of each share of Class A Common Stock in connection with the Disposition Event, provided , however , that in the event of a Disposition Event intended to qualify as a reorganization within the meaning of Section 368(a) of the Code or as a transfer described in Section 351(a) or Section 721 of the Code, a Limited Partner shall not be required to exchange Common Units or shares of Class B Common Stock pursuant to this Section 3.8(a) unless either (i) TPG Cayman and Oaktree Cayman collectively hold less than 5% of the Common Units and shares of Class B Common Stock that were held by TPG Cayman and Oaktree Cayman immediately prior to the IPO (after giving effect to any unit or stock split, reverse unit or stock split, unit or stock distribution or dividend or similar event) or (ii) as a part of such transaction, the Limited Partners are permitted to exchange their Common Units and shares of Class B Common Stock for securities in a transaction that is expected to permit such exchange without current recognition of gain or loss, for U.S. and non-U.S. tax purposes, for the direct and indirect holders of Common Units and shares of Class B Common Stock (except to the extent that property other than securities is received in such exchange) based on a “should” or “will” level opinion from independent tax counsel of recognized standing and expertise.

(b) Notwithstanding any other provision in this Agreement, in a Disposition Event where the consideration payable in such Disposition Event is other than all-cash, if such Disposition Event is consummated in a manner that results in TMHC no longer directly holding Common Units, the new holder of such Common Units (the “ Acquiror ”) shall (i) become a Limited Partner and shall assume all of TMHC’s obligations under this Agreement as set forth in Article 11 and (ii) issue to each Limited Partner (other than the Acquiror) an equity interest in such Acquiror that is equivalent in all respects to each share of Class B Common Stock held by such Limited Partner, including, without limitation, equivalent rights in respect of each such equity interest as those rights set forth in the Exchange Agreement in respect of each share of Class B Common Stock.

 

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3.9 Tender Offers and Other Events with Respect to TMHC . In the event that a tender offer, share exchange offer, issuer bid, take-over bid, recapitalization or similar transaction with respect to TMHC Common Stock (a “ TMHC Offer ”) is proposed by TMHC or is proposed to TMHC or its stockholders and approved by the board of directors of TMHC or is otherwise effected or to be effected with the consent or approval of the board of directors of TMHC, the holders (other than TMHC) of Common Units and shares of Class B Common Stock shall be permitted to participate in such TMHC Offer by delivery of a contingent Election of Exchange (as defined in the Exchange Agreement). In the case of a TMHC Offer proposed by TMHC, TMHC will use its reasonable best efforts expeditiously and in good faith to take all such actions and do all such things as are necessary or desirable to enable and permit the holders (other than TMHC) of Common Units and shares of Class B Common Stock to participate in such TMHC Offer to the same extent or on an economically equivalent basis as the holders of shares of Class A Common Stock without discrimination; provided that, without limiting the generality of this sentence, TMHC will use its reasonable best efforts expeditiously and in good faith to ensure that such holders of Common Units may participate in each such TMHC Offer without being required to exchange Common Units and shares of Class B Common Stock (or, if so required, to ensure that any such exchange shall be effective only upon, and shall be conditional upon, the closing of such TMHC Offer and only to the extent necessary to exchange the number of Common Units and shares being repurchased). Nothing in this Section 3.8 shall affect the rights of the Limited Partners under the Exchange Agreement. For the avoidance of doubt, in all events, tendering holders of Common Units and shares of Class B Common Stock shall be entitled to receive aggregate consideration for each Common Unit and corresponding share of Class B Common Stock that is equal to the consideration payable in respect of each share of Class A Common Stock in connection with a TMHC Offer.

3.10 Record Date . The same record date shall apply in respect of the Common Units, the shares Class B Common Stock and the shares of Class A Common Stock for purposes of any shareholder vote by TMHC, any distribution or dividend by the Partnership or TMHC or any other purpose for which a record date is declared by either the Partnership or TMHC.

 

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4. CAPITAL ACCOUNTS.

4.1 Capital Accounts . A separate account (each, a “ Capital Account ”) shall be established and maintained for each Limited Partner which:

(a) shall be increased by (i) the amount of any Capital Contribution by such Limited Partner to the Partnership and (ii) such Limited Partner’s share of the Net Profit (or items thereof) of the Partnership; and

(b) shall be reduced by (i) the amount of any Distribution to such Limited Partner, (ii) proceeds distributed upon redemption of Common Units by the Partnership and (iii) such Limited Partner’s share of the Net Loss (or items thereof) of the Partnership.

In determining the amount of any liability for purposes of sub-clauses (a)(i) and (b)(i), there shall be taken into account Code Section 752 and any other applicable provisions of the Code and Regulations. It is the intention of the Limited Partners that the Capital Accounts of the Partnership be maintained in accordance with the provisions of Section 704(b) of the Code and the Regulations thereunder and that this Agreement be interpreted consistently therewith. The Capital Account balance for each Limited Partner as of the date hereof shall be listed on Exhibit 3.1 , as from time to time amended and supplemented in accordance with this Agreement.

4.2 Revaluations of Assets and Capital Account Adjustments . Except upon the prior written consent of the General Partner, TPG Cayman and Oaktree Cayman, in each case solely to the extent such Person, directly or indirectly (through a direct or indirect ownership interest in any Limited Partner other than through ownership of TMHC Common Stock), then has an ownership interest in Units or Interests in the Partnership, immediately preceding the issuance of additional Units in exchange for cash, other property, or services to a new or existing Limited Partner or upon the redemption of the Interest of a Limited Partner or the liquidation of the Partnership, the then prevailing Asset Values of the Partnership shall be adjusted to equal their respective gross Fair Value and any increase in the net equity value of the Partnership (Asset Values less Liabilities) shall be credited to the Capital Accounts of the Limited Partners in the same manner as Net Profits are credited under Section 5.5(b) (or any decrease in the net equity value of the Partnership shall be charged in the same manner as Net Losses are charged under Section 5.5(b) ). Accordingly, as of any time Asset Values are adjusted pursuant to this Section 4.2 , the Capital Accounts of Limited Partners will reflect both realized and unrealized gains and losses through such date and the net equity value of the Partnership as of such date.

4.3 Additional Capital Account Provisions . Except as otherwise agreed to in writing by the Partnership and any Limited Partner, no Limited Partner shall have the right to demand a return of all or any part of such Limited Partner’s Capital Contributions. Any return of the Capital Contributions of any Limited Partner shall be made solely from the assets of the Partnership and only in accordance with the terms of this Agreement. No interest shall be paid to any Limited Partner with respect to such Limited Partner’s Capital Contributions or Capital Account. In the event that all or a portion of the Units of a Limited Partner are transferred in accordance with this Agreement, the transferee of such Units shall also succeed to all or the relevant portion of the Capital Account of the transferor (based on the ratio of the number of

 

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Units held by the transferor immediately before the transfer to the number of Units transferred, as applicable), and shall be treated as having made any Capital Contributions, and received any Distributions, made or received with respect to such transferred Units while such Units were held by the transferor. Units held by a Limited Partner may not be transferred independently of the Interest to which the Units relate.

 

5. DISTRIBUTIONS AND ALLOCATIONS OF PROFIT AND LOSS.

5.1 Distributions .

(a) Tax Distributions . To the extent the Partnership has available cash for Distribution by the Partnership under the ELP Law and subject to any applicable agreement to which the Partnership or any of its Subsidiaries is a party governing the terms of indebtedness for borrowed money and subject to the retention and establishment of reserves, or payment to third parties, of such funds as the General Partner deems necessary or desirable in its sole discretion with respect to the reasonable needs and obligations of the Partnership or any of its Subsidiaries, the General Partner shall cause the Partnership to make, on an annual basis or more frequently as determined by the General Partner, a distribution to each Limited Partner or former Limited Partner equal to such Limited Partner’s or former Limited Partner’s Tax Distribution for each Fiscal Year. The “ Tax Distribution ” for a Limited Partner or former Limited Partner for a Fiscal Year is the amount determined by the General Partner to be sufficient such that such amount, together with any other distributions made to such Limited Partner or former Limited Partner during such Fiscal Year, is at least equal to the amount of the Limited Partner’s or former Limited Partner’s U.S. federal, state and local income taxes, with respect to the Limited Partner’s or former Limited Partner’s allocable share (including for the avoidance of doubt any gain or loss allocable to a Partner as the result of the application of Code Section 704(c)) of any Partnership net taxable income and gain for such fiscal period, determined (i) after taking into account any tax deductions or basis adjustments arising under Code Section 743 in respect of such Limited Partner and (ii) by assuming (without regard to such Limited Partner’s actual tax liability) that such income or gain, as applicable, is taxable to the Limited Partner, with respect to Common Units, at the greater of (x) the highest marginal U.S. federal income tax rate then in effect (including any tax on “net investment income”), and a state and local income tax rate equal to the highest marginal rate then in effect for an individual or (if higher) a corporation that is a resident of San Francisco, California, and (y) the highest combined provincial and federal income tax rate applicable to an individual or (if higher) a corporation that is a resident of Canada and is subject to tax in the province of Canada that has the highest income tax rate, in each case taking into account the character of such income or gain (such greater amount as of any applicable date of determination, the “ Assumed Tax Rate ”). For purposes of applying th this Section 5.1(a) , the General Partner may treat a distribution made by the 90 day following the end of a Fiscal Year as occurring during such Fiscal Year (and not the Fiscal Year in which it is in fact made). Notwithstanding anything to the contrary herein, Tax Distributions for a fiscal year with respect to a Common Unit will be made to the Limited Partner or former Limited Partner to whom income is allocated with respect to such Common Unit for U.S. income tax purposes.

 

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(b) Distribution of Net Cash Flow . Subject to Section 5.1(a) and Section 5.1(c) , any applicable agreement to which the Partnership or any of its Subsidiaries is a party governing the terms of indebtedness for borrowed money and the retention and establishment of reserves, or payment to third parties, of such funds as the General Partner deems necessary or desirable in its sole discretion with respect to the reasonable needs and obligations of the Partnership, the net cash flow of the Partnership may be distributed to the Limited Partners at such times as may be determined by the General Partner from time to time in its sole discretion. Except as specifically set forth herein and subject to Section 5.1(a) , Section 5.1(c) and Section 3.3 , all Distributions shall be made ratably among the Common Unit Holders, based on the number of Common Units owned by such holders.

(c) Distributions to Management Limited Partners holding Unvested Units . Notwithstanding Section 5.1(b) , a Management Limited Partner holding an Unvested Common Unit shall only be entitled to receive a distribution in respect of such Unvested Common Unit in an amount equal to the Tax Distributions with respect to such Unvested Unit in accordance with this Section 5.1(c) . The Partnership shall maintain in a segregated account any other amounts that were otherwise distributable to each Management Limited Partner in respect of each Unvested Common Unit that were not distributed as a result of this Section 5.1(c) . After the end of each Fiscal Year, the Partnership shall distribute to each such Management Limited Partner an amount equal to the aggregate amount previously distributable under Section 5.1(b) , with respect to each Unvested Common Unit that shall have become a Vested Common Unit as of the end of such Fiscal Year held by such Management Limited Partner (determined without giving effect to the first sentence of this Section 5.1(c) ).

(d) Distributions to TMHC . Notwithstanding Section 5.1(b) , the General Partner, in its sole discretion, may authorize that (i) cash be distributed to TMHC (which distribution shall be made without pro rata distributions to the other Common Unit Holders) in exchange for the redemption, repurchase or other acquisition of TMHC’s Common Units to the extent that such cash distribution is used to redeem, repurchase or otherwise acquire an equal number of shares of Class A Common Stock in accordance with Section 3.5(b) , and (ii) cash be distributed to TMHC (which distributions shall be made without pro rata distributions to the other Common Unit Holders) as required for TMHC to pay (A) operating, administrative and other similar costs incurred by TMHC, (B) any judgments, settlements, penalties, fines or other costs and expenses in respect of any claims against, or any litigation or proceedings involving, TMHC, (C) fees and expenses related to any securities offering, investment or acquisition transaction (whether or not successful) authorized by the board of directors of TMHC and (D) other fees and expenses in connection with the maintenance of the existence of TMHC (including any costs or expenses associated with being a public company listed on a national securities exchange). For the avoidance of doubt, distributions under this Section 5.1(d) may not be used to pay or facilitate dividends or distributions on the TMHC Common Stock.

(e) Erroneous Distributions. If the Partnership has, pursuant to any clear and manifest accounting or similar error, paid any Limited Partner an amount in excess of

 

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the amount to which it is entitled pursuant to this Article 5 , such Limited Partner shall reimburse the Partnership to the extent of such excess, without interest, within 30 days after demand by the Partnership.

5.2 No Violation . Notwithstanding any provision to the contrary contained in this Agreement, the Partnership shall not make a Distribution to any Limited Partner on account of such Limited Partner’s Interest in the Partnership if such Distribution would violate the ELP Law or any other applicable law.

5.3 Withholding; Tax Indemnity . All amounts withheld pursuant to the Code or any U.S. federal, state, local or non-U.S. tax law with respect to any payment, distribution or allocation to a Limited Partner, or which the Partnership is otherwise obligated to pay to any governmental agency because of the status of a Limited Partner of the Partnership (including any interest, penalties and expenses associated with such payments), shall be treated as amounts distributed to such Limited Partner for all purposes of this Agreement. The General Partner is authorized to withhold from any payments or distributions to Limited Partners, or with respect to allocations to Limited Partners, and in each case to pay over to the appropriate U.S. federal, state, local or non-U.S. government any amounts required to be so withheld. The General Partner shall allocate any such amounts to the Limited Partners in respect of whose payment, distribution or allocation the tax was withheld and shall treat such amounts as actually distributed to such Limited Partners. Each Limited Partner further agrees to indemnify the Partnership in full for any amounts paid pursuant to this Section 5.3 (including any interest, penalties and expenses associated with such payments), to the extent such amounts are not already withheld from any payment or distribution to such Limited Partner, and each Limited Partner shall promptly upon notification of an obligation to indemnify the Partnership pursuant to this Section 5.3 make a cash payment to the Partnership equal to the full amount to be indemnified (and the amount paid shall be added to such Limited Partner’s Capital Account but shall not be treated as a Capital Contribution) with interest to accrue on any portion of such cash payment not paid in full when requested, calculated at a rate equal to 10% per annum, compounded as of the last day of each year (but not in excess of the highest rate per annum permitted by law).

5.4 Property Distributions and Installment Sales . If any assets of the Partnership shall be distributed in kind pursuant to this Article 5 , such assets shall be distributed to the Limited Partners entitled thereto in accordance with Section 5.1(b) . The amount by which the Fair Value of any property to be distributed in kind to the Limited Partners exceeds or is less than the then prevailing Asset Value of such property shall, to the extent not otherwise recognized by the Partnership, be taken into account in determining Net Profit and Net Loss and determining the Capital Accounts of the Limited Partners as if such property had been sold at its Fair Value immediately prior to such Distribution. If any assets are sold in transactions in which, by reason of Section 453 of the Code, gain is realized but not recognized, such gain shall be taken into account when realized in computing gain or loss of the Partnership for purposes of allocation of Net Profit or Net Loss under this Article 5 .

5.5 Net Profit or Net Loss .

(a) The “ Net Profit ” or “ Net Loss ” of the Partnership for each Fiscal Year or relevant part thereof shall mean an amount equal to the Partnership’s taxable income or

 

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loss for U.S. federal income tax purposes for such period (including all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code) with the following adjustments:

(i) Any income of the Partnership that is exempt from U.S. federal income tax shall constitute Net Profits, and any expenses or expenditures of the Partnership which may neither be deducted nor capitalized for tax purposes (or are so treated for tax purposes) shall constitute Net Losses.

(ii) Gain or loss attributable to the disposition of property of the Partnership with an Asset Value different than the adjusted basis of such property for U.S. federal income tax purposes shall be computed with respect to the Asset Value of such property, and any tax gain or loss not included in Net Profit or Net Loss shall be taken into account and allocated for U.S. federal income tax purposes among the Limited Partners pursuant to Section 5.7 .

(iii) Depreciation, amortization or cost recovery deductions with respect to any property with an Asset Value that differs from its adjusted basis for U.S. federal income tax purposes shall be computed in accordance with Asset Value, and any depreciation allowable for U.S. federal income tax purposes shall be allocated in accordance with Section 5.7 .

(iv) To the extent that an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 732, 734 or 743 of the Code is required to be taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m), the amount of such adjustment shall be treated as an item of gain or loss (as the case may be) for purposes of computing Net Profit or Net Loss.

(v) Any items that are required to be specially allocated pursuant to Section 5.6 shall not be taken into account in determining Net Profit or Net Loss.

(b) The Net Profit and Net Loss of the Partnership for any relevant fiscal period or, to the extent necessary to accomplish the purpose of this Section 5.5(b) , gross items of income, gain, deduction, and loss constituting such Net Profit and Net Loss, shall be allocated to the Capital Accounts of the Limited Partners so as to cause, to the extent possible, the Capital Accounts of the Limited Partners as of the end of such fiscal period, as increased by the Limited Partners’ shares of “minimum gain” and “partner minimum gain” (as such terms are used in Regulation Section 1.704-2) not otherwise required to be taken into account in such period, to be equal to the aggregate Distributions that Limited Partners would be entitled to receive (assuming all Units are vested) if all of the assets of the Partnership were sold for their Asset Values (assuming for this purpose only that the Asset Value of an asset that secures a non-recourse liability for purposes of Section 1.1001-2 of the Regulations is no less than the amount of such liability that is allocated to such asset in accordance with Section 1.704-2(d)(2) of the Regulations), all liabilities of the Partnership were repaid from the proceeds of sale and the net remaining proceeds were distributed as of the end of such accounting period in accordance with Section 5.1(b) .

(c) The allocations made pursuant to this Section 5.5 are intended to comply with the provisions of Section 704(b) of the Code and the Regulations thereunder and, in particular, to reflect the Limited Partners’ economic interests in the Partnership as set forth in Section 5.1 , and the General Partner, based on the advice of the Partnership’s auditors or tax counsel, is hereby authorized to interpret and, if necessary, modify this Section 5.5 to the extent necessary to implement such intention.

 

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5.6 Regulatory Allocations . Although the Limited Partners do not anticipate that events will arise that will require application of this Section 5.6 , provisions governing the allocation of taxable income, gain, loss, deduction and credit (and items thereof) are included in this Agreement as may be necessary to provide that the Partnership’s allocation provisions contain a so-called “Qualified Income Offset” and comply with all provisions relating to the allocation of so-called “Nonrecourse Deductions” and “Limited Partner Nonrecourse Deductions” and the chargeback thereof as set forth in the Regulations under Section 704(b) of the Code (“ Regulatory Allocations ”); provided , however , that the Limited Partners intend that all Regulatory Allocations that may be required shall be offset by other Regulatory Allocations or special allocations of tax items so that each Limited Partner’s share of the Net Profit, Net Loss and capital of the Partnership will be the same as it would have been had the events requiring the Regulatory Allocations not occurred. For this purpose the General Partner, based on the advice of the Partnership’s auditors or tax counsel, is hereby authorized to make such special curative allocations of tax items as may be necessary to minimize or eliminate any economic distortions that may result from any required Regulatory Allocations.

5.7 Tax Allocations .

(a) Contributed Assets. In accordance with Section 704(c) of the Code, income, gain, loss and deduction with respect to any property contributed to the Partnership with an adjusted basis for U.S. federal income tax purposes different from the initial Asset Value at which such property was accepted by the Partnership shall, solely for tax purposes, be allocated among the Limited Partners so as to take into account such difference in the manner required by Section 704(c) of the Code and the applicable Regulations.

(b) Revalued Assets. If the Asset Values of any assets of the Partnership are adjusted pursuant to Section 4.2 , subsequent allocations of income, gain, loss and deduction with respect to such assets shall, solely for tax purposes, be allocated among the Limited Partners so as to take into account such adjustment in the same manner as under Section 704(c) of the Code and the applicable Regulations.

(c) Elections and Limitations. The allocations required by this Section 5.7 are solely for purposes of U.S. federal, state and local income taxes and shall not affect the allocation of Net Profits or Net Losses as between Limited Partners or any Limited Partner’s Capital Account. All tax allocations required by this Section 5.7 shall be made using any method permitted by Regulation 1.704-3 as determined by the General Partner, with the advice of the Partnership’s auditors or tax counsel.

(d) Allocations. Except as set forth in this Agreement or otherwise required by law, all items of income, deduction, loss and credit shall be allocated for U.S. federal, state and local income tax purposes in the same manner such items are allocated for purposes of maintaining Capital Accounts.

 

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5.8 Changes in Partners’ Interests . If during any year there is a change in any Partner’s Interest in the Partnership, the General Partner shall confer with the tax advisors to the Partnership and, in conformity with such advice, allocate the Net Profit or Net Loss to the Partners so as to take into account the varying Interests of the Partners in the Partnership in a manner that complies with the provisions of Section 706 of the Code and the Treasury Regulations thereunder; provided that where the transferor or transferee of such Interest is TPG Cayman or Oaktree Cayman, such allocation of Net Profit and Net Loss shall be based on an interim closing of the books of the Partnership as of the date of transfer, unless such transferor or transferee consents to an alternative allocation method.

5.9 Allocation for Canadian Tax Purposes . The income and loss for Canadian tax purposes of the Partnership for a Fiscal Year shall be computed pursuant to Section 96 of the Income Tax Act (Canada) and any other taxation or other legislation or similar laws of Canada or of any province or jurisdiction, as applicable. Each Limited Partner’s share of the income or loss for tax purposes of the Partnership for a Fiscal Year shall be allocated to Limited Partners consistent with this Section 5 ; provided , that where, during a Fiscal Year of the Partnership, a Limited Partner ceases to be a Limited Partner (a “ Withdrawing Partner ”), the share of the income or loss for such Fiscal Year to be allocated to each Limited Partner shall be adjusted to the extent possible so that any such Withdrawing Partner shall be allocated its share of income or loss which accrued during such Fiscal Year up to the time that a Limited Partner became a Withdrawing Partner, and such allocation shall be made consistent with this Section 5 .

5.10 No Duty to Account . The Limited Partners who are not TMHC or Subsidiaries of TMHC shall have no duty to account to the Partnership or other Partners in respect of any profits deriving from activities outside of the Partnership.

 

6. STATUS, RIGHTS AND POWERS OF LIMITED PARTNERS.

6.1 Return of Distributions of Capital . Except as expressly set forth in this Agreement or as otherwise expressly required by law, a Limited Partner, in such capacity, shall have no liability for obligations or liabilities of the Partnership in excess of (a) the amount of such Limited Partner’s Capital Contributions, (b) such Limited Partner’s share of any assets and undistributed profits of the Partnership and (c) to the extent required by law or this Agreement, the amount of any Distributions wrongfully distributed to such Limited Partner. Except as expressly set forth in this Agreement or by the ELP Law upon an insolvency of the Partnership, no Limited Partner shall be obligated by this Agreement to return any Distribution to the Partnership or pay the amount of any Distribution for the account of the Partnership or to any creditor of the Partnership; provided , however , that if any court of competent jurisdiction holds that, notwithstanding this Agreement, any Limited Partner is obligated to return or pay any part

 

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of any Distribution, such obligation shall bind such Limited Partner alone and not any other Limited Partner and provided , further , that if any Limited Partner is required to return all or any portion of any Distribution under circumstances that are not unique to such Limited Partner but that would have been applicable to all Limited Partners (or all similarly situated Limited Partners) if such Limited Partners had been named in the lawsuit against the Limited Partner in question (such as where a Distribution was made to all Limited Partners and rendered the Partnership insolvent, but only one Limited Partner was sued for the return of such Distribution), the Limited Partner that was required to return or repay the Distribution (or any portion thereof) shall be entitled to reimbursement from the other Limited Partners (or the other similarly situated Limited Partners as the case may be) that were not required to return the Distributions made to them based on each such Limited Partner’s share of the Distribution in question. The provisions of the immediately preceding sentence are solely for the benefit of the Limited Partners and shall not be construed as benefiting any third party. The amount of any Distribution returned to the Partnership by a Limited Partner or paid by a Limited Partner for the account of the Partnership or to a creditor of the Partnership shall be added to the account or accounts from which it was subtracted when it was distributed to such Limited Partner.

6.2 No Management or Control . Except as expressly provided in this Agreement, no Limited Partner in its capacity as such shall take part in the management of the Partnership’s activities or interfere in any manner with the management of the affairs of the Partnership or have any right or authority to act for or bind the Partnership or have any voting rights with respect to the Partnership.

 

7. MANAGEMENT OF THE PARTNERSHIP.

7.1 General Partner .

(a) The General Partner shall direct, manage, conduct and control the affairs of the Partnership. Except as otherwise required by this Agreement or by non-waivable provisions of applicable law, the General Partner shall have full and complete authority, power and discretion to manage and control the properties of the Partnership, to make all decisions regarding those matters and to perform any and all other acts or activities customary or incident to the management of the Partnership in fulfillment of the purposes of the Partnership as contemplated by this Agreement.

(b) Except as expressly permitted by this Agreement, the General Partner shall not assign, sell or otherwise transfer all or any part of its interest as the general partner of the Partnership, without the written consent of such of TPG Cayman and Oaktree Cayman, as directly or indirectly (through a direct or indirect ownership interest in any Limited Partner other than through ownership of TMHC Common Stock), then has an ownership interest in Units or Interests in the Partnership.

(c) Unless permitted with the written consent of such of TPG Cayman and Oaktree Cayman as, directly or indirectly (through a direct or indirect ownership interest in any Limited Partner other than through ownership of TMHC Common Stock), then has an ownership interest in Units or Interests in the Partnership, the General Partner shall (A) cause the Partnership to not have any direct subsidiaries other than TMM and

 

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TMM Holdings (G.P.) ULC or directly or indirectly own any equity interests or other debt or equity investments in any other Person (other than its own treasury stock or indirectly through TMHI or Monarch), (B) cause TMM to not have any direct subsidiaries other than TMHI and Monarch or directly or indirectly own any equity interests or other debt or equity investments in any other Person (other than indirectly through TMHI or Monarch) and (C) cause TMM Holdings (G.P.) ULC to not own any equity interests or other debt or equity investments in any Person (other than its direct ownership of the sole general partnership interest in TMM or indirectly through TMHI or Monarch).

(d) The General Partner may not withdraw prior to the dissolution of the Partnership unless (before it does so) it has, in accordance with the terms of this Agreement transferred its entire interest as the general partner of the Partnership to a successor general partner.

(e) The General Partner will maintain a registered office in the Cayman Islands at c/o Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

(f) Except upon the prior written consent of TPG Cayman and Oaktree Cayman, in each case solely to the extent such Person, directly or indirectly (through a direct or indirect ownership interest in any Limited Partner other than through ownership of the TMHC Common Stock), then has an ownership interest in Units or Interests in the Partnership, the Partnership shall not conduct any activities (directly or indirectly) (A) other than stewardship over the investments of the Partnership in its Subsidiaries or (B) that may cause the Partnership (i) to be treated at any time as engaged in a trade or business within the United States within the meaning of Section 864 of the Code (a “trade or business”), (ii) to realize income treated as effectively connected with a trade or business (including pursuant to Section 897 of the Code, but excluding gain from the sale of Monarch Communities Inc.), (iii) to hold interests in a “United States real property interest” (a “USRPI”) for U.S. federal income tax purposes directly or indirectly (other than the stock of Monarch Communities Inc. and other than a USRPI held through a domestic corporation for U.S. federal income tax purposes the stock of which is not a USPRI), (iv) to be treated at any time as engaged in commercial activities within the meaning of Section 892 of the Code; or (v) to carry on business in Canada or to cause an interest in the Partnership to be “taxable Canadian property” within the meaning of the Income Tax Act (Canada).

(g) The General Partner shall be entitled to receive an annual fee of $500 out of the Net Profits of the Partnership.

7.2 Authority of the General Partner Exclusive . Unless authorized to do so by this Agreement or the General Partner, no attorney-in-fact, employee or other agent of the General Partner or the Partnership shall have any power or authority to bind the Partnership in any way, to pledge its credit or to render it liable pecuniarily for any purpose.

 

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7.3 Execution of Papers . Except as the General Partner may generally or in particular cases authorize the execution thereof in some other manner, all deeds, leases, transfers, contracts, bonds, notes, cheques, drafts or other obligations made, accepted or endorsed by the General Partner for on behalf of the Partnership shall be signed by a director or officer of the General Partner.

7.4 Noncontravention . The Partnership will not give effect to any action by any Limited Partner that is in contravention of this Article 7 .

 

8. DESIGNATION, RIGHTS, AUTHORITIES, POWERS, RESPONSIBILITIES AND DUTIES OF OFFICERS AND AGENTS.

8.1 Officers, Agents . The General Partner shall have the power, but no obligation, to appoint officers and agents to act for the Partnership with such titles, if any, as the General Partner deems appropriate and to delegate to such officers or agents such of the powers as are granted to the General Partner hereunder, including the power to execute documents on behalf of the Partnership, as the General Partner may determine. The officers so appointed may include persons holding titles such as Chairman, Chief Executive Officer, Chief Operating Officer, President, Chief Financial Officer, Executive Vice President, Vice President, Treasurer or Controller. Unless the authority of the officer in question is limited in the document appointing such officer or is otherwise specified by the General Partner, any officer so appointed shall have the same authority to act for the Partnership as a corresponding officer of the General Partner would have to act for the General Partner in the absence of a specific delegation of authority and as more specifically set forth in Exhibit 8.1 ; provided , however , that unless such power is specifically delegated to the officer in question either for a specific transaction or generally in a separate writing, no such officer shall have the power to lease or acquire real property, to borrow money, to issue notes, debentures, securities, equity or other interests of or in the Partnership, to make investments in (other than the investment of surplus cash in the ordinary course) or to acquire securities of any Person, to give guarantees or indemnities, to merge, liquidate or dissolve the Partnership or to sell or lease all or any substantial portion of the assets of the Partnership.

 

9. BOOKS, RECORDS, ACCOUNTING AND REPORTS.

9.1 Books and Records . The Partnership shall maintain at its principal office or such other office as the General Partner shall determine such books and records with respect to the Partnership’s activities as the General Partner deems appropriate in accordance with the ELP Law. For Canadian tax purposes, the first Fiscal Year of the Partnership will end immediately after the Second Initial New TMM Contribution (as such term is defined in the Reorganization Agreement dated as of April 9, 2013, by and among the Partnership and certain other parties, pursuant to which, among other things, this Agreement is entered into) and a new Fiscal Year will begin immediately after such time and end on the calendar year end.

9.2 Tax Information . The Tax Matters Partner shall arrange for the preparation and timely filing of all income and other tax and informational returns of the Company. As soon as practicable (but in no event more than 55 days) after the end of each Fiscal Year, the Tax Matters Partner shall prepare and submit to the General Partner for its review and approval the

 

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Partnership’s tax returns for such Fiscal Year. The Tax Matters Partner shall furnish to each Partner a copy of each approved return and statement, together with any schedules or other information which each Limited Partner has reasonably requested or may otherwise require in connection with such Limited Partner’s own tax affairs as soon as practicable (but in no event more than 60 days after the end of each Fiscal Year). In addition, the Tax Matters Partner (a) has as of the date hereof informed each Limited Partner in writing (1) of the current adjusted basis and fair market value, each for U.S. federal income tax purposes, of each of the assets of the Partnership (which includes, for the avoidance of doubt, the stock of TMHI and Monarch) and (2) which of those assets are “United States real property interests” within the meaning of Code Section 897 (and identifying whether such assets are described in Code Section 897(c)(1)(A)(i) or 897(c)(1)(A)(ii)) (the “ USRPI Information ”) and (b) will promptly provide in writing upon the request of a Limited Partner (but in no event more than 10 days after such request is made) the USRPI Information relating to the Partnership as of a given date and such other requested information to assist such Limited Partner in completing its tax withholding and other compliance obligations (including pursuant to Code Section 1446).

9.3 Continuation . The parties intend that the Partnership be treated as a “continuation” for U.S. federal income tax purposes of TMM and shall not (other than with the consent of the General Partner) take a position inconsistent therewith on a tax return except upon a final determination by an applicable taxing authority. Notwithstanding the foregoing, (a) the Partnership shall file an election described in Treasury Regulation Section 301.7701-3 to be classified, as of a date no later than the date hereof, as a partnership for U.S. federal income tax purposes (and any similar election under state, local or non-U.S. law), and it shall not file any election to be classified as other than a partnership for U.S. federal income tax purposes.

9.4 Non-Disclosure .

(a) Each Limited Partner (other than TMHC) (on behalf of itself and, to the extent that such Limited Partner would be responsible for the acts of the following Persons under principles of agency law, its directors, officers, Affiliates, shareholders, partners, employees and agents) agrees that, except as otherwise consented to by the General Partner, all non-public information relating to the Partnership furnished to such Limited Partner, including but not limited to confidential information of the Partnership and its Subsidiaries regarding identifiable, specific and discrete business opportunities being pursued by the Partnership or its Subsidiaries (collectively, “ Confidential Information ”) will be kept confidential, will not be used for commercial or proprietary advantage and will not be disclosed by such Limited Partner (or, to the extent that such Limited Partner would be responsible for the acts of the following Persons under principles of agency law, its directors, officers, Affiliates, shareholders, partners, employees and agents) in any manner, in whole or in part, except that each Limited Partner (and its directors, officers, Affiliates, shareholders, partners, employees and agents) shall be permitted to disclose such Confidential Information (i) to those of its respective agents, Representatives and employees who need to be familiar with such Confidential Information in connection with such Limited Partner’s investment in the Partnership and who are charged with an obligation of confidentiality, (ii) to its respective direct and indirect partners and equity holders so long as they agree to keep such Confidential Information confidential on the terms set forth herein, (iii) with respect to an Affiliate of

 

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TPG Cayman or Oaktree Cayman, as part of such Limited Partner’s or its Affiliates’ reporting or review procedures, or in connection with such Limited Partner’s or its Affiliates’ fund raising, marketing, informational or reporting activities, (iv) for general portfolio information that does not identify the Partnership or its Subsidiaries and (v) to the extent required by law, so long as such Limited Partner shall have first provided the Partnership a reasonable opportunity to contest the necessity of disclosing such Confidential Information. Notwithstanding the foregoing, any Partner and each of his, her, or its Representatives may disclose to any and all Persons, without limitation of any kind, the tax treatment, tax strategies and tax structure of the Partnership and all materials of any kind (including opinions or other tax analyses) that are provided to the Partner and his, her, or its Representatives relating to such tax treatment, tax strategies and tax structure. Each Partner agrees that he, she or it will be responsible for any breach or violation of the provisions of this Section 9.3(a) by any Person receiving Confidential Information from such Partner.

(b) For purposes of this Section 9.3 , “Confidential Information” shall not include any information: (i) of which such Person (or its Affiliates) became aware prior to its affiliation with the Partnership or any Subsidiary thereof from a source not known to be bound by duty or obligations of confidentiality to the Partnership, (ii) of which such Person (or its Affiliates) learns from sources other than the Partnership or its Subsidiaries not known to be bound by duty or obligations of confidentiality to the Partnership, whether prior to or after such information is actually disclosed by the Partnership or its Subsidiaries, or (iii) which is disclosed in a prospectus or other documents available for dissemination to the public. Nothing in this Section 9.3 shall in any way limit or otherwise modify any confidentiality covenants entered into by any Limited Partner pursuant to any other agreement to which such Limited Partner and the Partnership or any of its Subsidiaries are parties.

 

10. TAX MATTERS PARTNER.

10.1 Classification as a Partnership and Other Tax Matters . It is intended that the Partnership will be classified as a partnership for U.S. and Canadian federal tax purposes. The General Partner and/or the Tax Matters Partner are authorized to take such measures as they deem necessary or appropriate to ensure such classification, and all other Partners agree to reasonably cooperate with such measures. Subject to the other terms of this Agreement, the General Partner and/or the Tax Matters Partner shall also be authorized to make any elections, filings and determinations for the Partnership (or enter into any agreements for or on behalf of the Partnership) with respect to taxes (except any election, filing or determination that would cause the Partnership to be treated other than as a partnership for U.S. and Canadian federal tax purposes) and all Partners hereby agree to promptly provide any information reasonably requested by the General Partner and/or the Tax Matters Partner in respect of such tax matters (including, for the avoidance of doubt, any information reasonably requested in connection with ensuring the Partnership’s compliance under Sections 1471-1474 of the Code) and compliance with the Income Tax Act (Canada).

10.2 Tax Matters Partner . Unless and until another Partner is designated as the tax matters partner by the General Partner, the tax matters partner of the Partnership as provided in

 

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the Regulations under Code Section 6231 and any analogous provisions of state law shall be the General Partner, and in such capacity is referred to as the “ Tax Matters Partner ”. Without the prior consent of the General Partner, any Person other than the General Partner that serves as the Tax Matters Partner may not in such capacity (a) settle disputes with the Internal Revenue Service, (b) extend the statute of limitations for any taxes or (c) take any other significant action affecting the tax liability of the Partnership or the Partners.

10.3 Indemnity of Tax Matters Partner . The Partnership shall indemnify and reimburse, to the fullest extent permitted by law, the Tax Matters Partner for all expenses (including legal and accounting fees) incurred as Tax Matters Partner while acting in good faith pursuant to this Article 10 in connection with any administrative or judicial proceeding with respect to the tax liability of the Limited Partners attributable to their interests in the Partnership.

10.4 Tax Returns . Unless otherwise agreed by the General Partner, all tax returns of the Partnership shall be prepared by the Partnership’s independent certified public accountants.

 

11. TRANSFER OF INTERESTS.

11.1 Restricted Transfer .

(a) No Limited Partner shall Transfer any Units without the prior written consent of the General Partner, and such of TPG Cayman and Oaktree Cayman as, directly or indirectly (through a direct or indirect ownership interest in any Limited Partner other than through ownership of TMHC Common Stock), then has an ownership interest in Units or Interests in the Partnership. Any attempted Transfer not in compliance with the terms of this Article 11 shall be null and void and the Partnership shall not in any way give effect to any such Transfer, provided that (i) a Management Limited Partner may Transfer any of such Management Limited Partner’s Vested Common Units to any Management Permitted Transferee thereof if such Transfer is otherwise in compliance with the terms of this Article 11 and the Management Permitted Transferee agrees to assume the obligations of the applicable Management Rollover Agreement and (ii) any Limited Partner may at any time Transfer any of such Limited Partner’s Common Units (except for Unvested Common Units) pursuant to the Exchange Agreement without the consent of the General Partner or any Limited Partner, and the Partnership shall give effect to each such Transfer.

(b) Any Limited Partner who shall Transfer any Units (any such Partner, an “ Assignor ”) in accordance with this Article 11 , shall cease to be a Limited Partner of the Partnership with respect to such Units and shall no longer have any rights or privileges of a Limited Partner with respect to such Units (but shall still be bound by this Agreement in accordance with this Article 11 ).

(c) Notwithstanding anything to the contrary in this Agreement, no Transfer will be made if, in the opinion of legal counsel or a qualified tax advisor to the Partnership, there is a material risk that such Transfer would cause the Partnership to be classified as a “publicly traded partnership” within the meaning of Code Section 7704(b) and/or Treasury Regulation Section 1.7704-1.

 

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(d) Notwithstanding any other provision of this Agreement, no change of name of a Limited Partner, no Transfer of a Unit of a Limited Partner and no admission of an additional Limited Partner will be effective for the purposes of this Agreement until such change, Transfer, substitution or addition is duly reflected in Exhibit 3.1 .

(e) No Limited Partner shall directly or indirectly Transfer all or any part of the economic or other rights that comprise such Limited Partner’s Interest if such Transfer would violate the Insider Trading Policy, then in effect, of TMHC (it being understood, for purposes of this clause (f), that such Limited Partner’s Interest shall be deemed securities governed by such Insider Trading Policy).

11.2 Transfer Requirements . Subject to the provisions of Section 11.1 and except for Transfers of Units pursuant to the Exchange Agreement, no Transfer of Units shall be effective and no Assignee shall be admitted to the Partnership as a Partner unless the following conditions are satisfied or such conditions are waived by the General Partner:

(a) A duly executed written instrument of Transfer is provided to the General Partner, specifying the Units being Transferred and setting forth the intention of the Limited Partner effecting the Transfer that the transferee succeed to a portion or all of such Limited Partner’s Interest as a Limited Partner, and a deed of adherence or assumption agreement duly executed by the transferee agreeing to be bound by this Agreement in respect of the Units Transferred;

(b) If requested by the General Partner, an opinion of responsible counsel (who may be counsel for the Partnership) is provided to it, satisfactory in form and substance to the General Partner to the effect that such Transfer would not violate the Securities Act or any state securities laws or blue sky laws applicable to the Partnership or the Units to be Transferred;

(c) The Limited Partner effecting the Transfer and the transferee execute any other instruments that the General Partner deems reasonably necessary or desirable for admission of the transferee, and the Partner effecting the Transfer and the transferee provide the General Partner any information necessary to comply with the requirements of Code Section 743(e), if applicable; and

(d) The Limited Partner effecting the Transfer or the transferee pays to the Partnership a transfer fee in an amount sufficient to cover the reasonable expenses incurred by the Partnership in connection with the admission of the transferee and provides to the Partnership any information necessary for the Partnership to make required basis adjustments and comply with tax reporting requirements.

11.3 Consent . Each Partner hereby agrees that, upon satisfaction of the terms and conditions of this Article 11 with respect to any proposed Transfer, the Assignee may be admitted as a Limited Partner by the General Partner.

11.4 Withdrawal of Partner . If a Limited Partner Transfers all of its Interest pursuant to Section 11.1 and the Assignee of such Interest is admitted as a Limited Partner pursuant to

 

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Section 11.3 , such Assignee shall be admitted to the Partnership as a Limited Partner effective on the effective date of the Transfer or such other date as may be specified when the Assignee is admitted and, if such Assignor has not already ceased to be a Limited Partner pursuant to Section 11.1(b) , then immediately following such admission the Assignor shall cease to be a Limited Partner of the Partnership. Upon the Assignor ceasing to be a Limited Partner, the Assignor shall not be entitled to any Distributions from and after the date of such Transfer. Notwithstanding the admission of an Assignee as a Limited Partner and, except as otherwise expressly approved by the General Partner, the Assignor shall not be released from any obligations to the Partnership as a Limited Partner (or otherwise) existing as of the date of the Transfer (other than obligations of the Assignor to make future capital contributions, if any), including without limitation the obligations set forth in Section 5.3 .

11.5 Amendment of Exhibit 3.1 . In the event of the admission of any transferee as a Partner of the Partnership, the General Partner shall promptly amend Exhibit 3.1 to reflect such Transfer or admission, as the case may be.

11.6 FIRPTA Certificates and Withholding . For so long as TPG Cayman or Oaktree Cayman owns an Interest in the Partnership (directly or indirectly (through a direct or indirect ownership interest in any Limited Partner other through ownership of TMHC Common Stock)), (1) such Person may submit a request to the General Partner that the Partnership provide to such requesting Person and to TMHC a certificate described in Treasury Regulation Section 1.1445-11T(d), (2) the Partnership shall comply with such request within 10 days of receipt of the request unless doing so would be impermissible under Section 1445 of the Code and the Regulations thereunder, and (3) neither TMHC nor any of its Affiliates will withhold any amounts pursuant to Section 1445 of the Code in connection with a transfer to TMHC or any of its Affiliates of any portion of the Interests held by TPG Cayman or Oaktree Cayman unless TMHC or its Affiliate, as applicable, reasonably determines it is legally required to do so. Notwithstanding anything to the contrary herein, the Partners hereby agree that, as of the date hereof, it is permissible under Section 1445 of the Code and the Regulations thereunder for the Partnership to provide a certificate described in Treasury Regulation Section 1.1445-11T(d), and the Partnership shall execute and deliver such a certificate to TPG Cayman, Oaktree Cayman and TMHC as of the date hereof.

 

12. WINDING UP AND DISSOLUTION OF THE PARTNERSHIP.

12.1 Termination of Limited Partnership . Except as otherwise provided herein, no Limited Partner shall resign or withdraw from the Partnership. The death, retirement, resignation, expulsion, bankruptcy or dissolution of any Limited Partner shall not in and of itself cause the Partnership to be wound up and dissolved, and upon the occurrence of any such event, the Partnership shall be continued without winding up or dissolving.

12.2 Events of Liquidation . The Partnership shall only be wound up upon the occurrence of the following events and Sections 15(2), (5), (6) and (7) of the ELP Law shall not apply to the Partnership except as expressly stated herein: (a) the prior written consent of the General Partner, TPG Cayman and Oaktree Cayman, in each case solely to the extent such Person, directly or indirectly (through a direct or indirect ownership interest in any Limited Partner other than through ownership of TMHC Common Stock), then has an ownership interest

 

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in Units or Interests in the Partnership, which consent and approval shall be in lieu of any vote otherwise required or permitted under the ELP Law to commence winding up and dissolution or (b) 90 days after the occurrence of any event specified under 15(5)(a), (b) or (c) of the ELP Law with respect to the General Partner, unless the Partnership is continued following the appointment of a replacement General Partner by a majority vote of the Limited Partners within 90 days of such event.

12.3 Liquidation . Upon the occurrence of any event specified in Section 12.2 , save where the Partnership is continued as provided for therein, the Partnership shall immediately commence to wind up its affairs. A reasonable period of time shall be allowed for the orderly winding-up of the Partnership’s affairs, discharge of its liabilities, and distribution or liquidation of the remaining assets so as to enable the Partnership to minimize the normal losses attendant to the liquidation process. The Partnership’s property and assets or the proceeds from the liquidation thereof shall be distributed (a) in accordance with the ELP Law and (b) following satisfaction (whether by payment or the making of reasonable provision for payment) of the Partnership’s liabilities, in accordance with Section 5.1 . Upon such final accounting, the General Partner shall file a notice of dissolution in accordance with the ELP Law and the Partnership will then dissolve.

12.4 No Further Claim . Without limitation of the provisions of Sections 12.1 and 12.2 , upon winding-up, each Limited Partner shall look solely to the assets of the Partnership for the return of its capital, and if the Partnership’s property remaining after payment or discharge of the debts and liabilities of the Partnership, including debts and liabilities owed to one or more of the Limited Partners, is insufficient to return the aggregate Capital Contributions of each Limited Partner, such Limited Partners shall have no recourse against the Partnership, any Limited Partner or the General Partner.

 

13. INDEMNIFICATION.

13.1 Indemnification Rights .

(a) General . To the fullest extent permitted by law, the Partnership shall indemnify, defend and hold harmless the General Partner, each officer of the Partnership, TPG Cayman, Oaktree Cayman and each of their respective Affiliates in their respective capacities as General Partner or Limited Partner (or a direct or indirect equity owner of the General Partner or such Limited Partner), officer of the Partnership or Tax Matters Partner (all indemnified persons being referred to as “ Indemnified Persons ” for purposes of this Article 13 ), from any liability, loss or damage incurred by the Indemnified Person by reason of any act performed or omitted to be performed by the Indemnified Person in connection with the activities of the Partnership and from liabilities or obligations of the Partnership imposed on such Person by virtue of such Person’s position with the Partnership, including reasonable attorneys’ fees and costs and any amounts expended in the settlement of any such claims of liability, loss or damage; provided , however , that if the liability, loss, damage or claim arises out of any action or inaction of an Indemnified Person, indemnification under this Section 13.1 shall be available only if such action or inaction was not expressly prohibited by this Agreement and (i) either (A) the Indemnified Person, at the time of such action or

 

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inaction, determined in good faith that its, his or her course of conduct was in, or not opposed to, the best interests of the Partnership and/or its Subsidiaries or (B) in the case of inaction by the Indemnified Person, the Indemnified Person did not intend its, his or her inaction to be harmful or opposed to the best interests of the Partnership and/or its Subsidiaries and (ii) the action or inaction did not constitute fraud or willful misconduct by the Indemnified Person; provided , further , however , that indemnification under this Section 13.1 shall be recoverable only from the assets of the Partnership and not from any assets of the Limited Partners. The Partnership shall advance reasonable attorneys’ fees of an Indemnified Person as incurred, provided that such Indemnified Person executes an undertaking, to repay the amount so paid or reimbursed in the event that a final non-appealable determination by a court of competent jurisdiction finds that such Indemnified Person is not entitled to indemnification under this Article 13 . The Partnership may pay for insurance covering liability of the Indemnified Persons for negligence in the operation of the Partnership’s affairs. Notwithstanding anything to the contrary herein, nothing in this Section 13.1 shall require the Partnership to indemnify any Person in connection with any action, suit, proceeding, claim or counterclaim initiated by or on behalf of such Person, other than an action approved by the General Partner.

(b) Indemnification Priority . The Partnership hereby acknowledges that the rights to indemnification, advancement of expenses and/or insurance provided pursuant to this Section 13.1 may also be provided to certain Indemnified Persons by one or more of their respective Affiliates (other than TMHC, the General Partner or any direct or indirect Subsidiaries of the Partnership) or their insurers (collectively, the “ Affiliate Indemnitors ”). The Partnership and TMHC hereby agree that, as between the Partnership and TMHC on the one hand, and the Affiliate Indemnitors on the other (i) the Partnership and TMHC are jointly and severally the full indemnitors of first resort and the Affiliate Indemnitors are the full indemnitors of second resort with respect to all such indemnifiable claims against such Indemnified Persons, whether arising under this Agreement or otherwise (i.e., the obligations of the Partnership and TMHC to such Indemnified Persons are primary and any obligation of the Affiliate Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Indemnified Persons are secondary), (ii) the Partnership and TMHC shall be jointly and severally required to advance the full amount of expenses incurred by such Indemnified Persons and shall be jointly and severally liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement (or any other agreement between the Partnership or TMHC and such Indemnified Persons), without regard to any rights such Indemnified Persons may have against the Affiliate Indemnitors, and (iii) the Partnership and TMHC irrevocably waive, relinquish and release the Affiliate Indemnitors from any and all claims against the Affiliate Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Partnership and TMHC agree to indemnify the Affiliate Indemnitors directly for any amounts that the Affiliate Indemnitors pay as indemnification or advancement on behalf of any such Indemnified Person and for which such Indemnified Person may be entitled to indemnification from the Partnership or TMHC in connection

 

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with serving as a director or officer (or equivalent titles) of TMHC, the Partnership or their respective Subsidiaries. The Partnership and TMHC further agree that no advancement or payment by the Affiliate Indemnitors on behalf of any such Indemnified Person with respect to any claim for which such Indemnified Person has sought indemnification from the Partnership or TMHC shall affect the foregoing and the Affiliate Indemnitors shall be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Indemnified Person against the Partnership and TMHC, and the Partnership and TMHC shall cooperate with the Affiliate Indemnitors in pursuing such rights.

(c) Third Party Indemnification . The General Partner may make, execute, record and file on its own behalf and on behalf of each Limited Partner all instruments and other documents (including one or more deeds poll in favour of the persons to whom the benefit of the exculpation and indemnification provisions of this Agreement are intended (the “ Covered Persons ”) and/or one or more separate indemnification agreements between the General Partner, the Partnership, each Limited Partner (as applicable) and individual Covered Persons) that the General Partner deems necessary or appropriate in order to extend the benefit of the exculpation and indemnification provisions of this Agreement to the Covered Persons; provided , that, such other instruments and documents authorized hereunder shall be on the same terms as provided for in this Agreement except as otherwise may be required by applicable law

13.2 Exculpation . To the fullest extent permitted by law, no Indemnified Person shall be liable, in damages or otherwise, to TMHC, the Partnership or to any Limited Partner for any loss that arises out of any act performed or omitted to be performed by it, him or her pursuant to the authority granted by this Agreement if (a) either (i) the Indemnified Person, at the time of such action or inaction, determined in good faith that such Indemnified Person’s course of conduct was in, or not opposed to, the best interests of the Partnership, or (ii) in the case of inaction by the Indemnified Person, the Indemnified Person did not intend such Indemnified Person’s inaction to be harmful or opposed to the best interests of the Partnership and (b) the conduct of the Indemnified Person did not constitute fraud or willful misconduct by such Indemnified Person.

13.3 Persons Entitled to Indemnity . Any Person who is within the definition of “ Indemnified Person ” at the time of any action or inaction in connection with the activities of the Partnership shall be entitled to the benefits of this Article 13 as an “Indemnified Person” with respect thereto, regardless of whether such Person continues to be within the definition of “Indemnified Person” at the time of such Indemnified Person’s claim for indemnification or exculpation hereunder. The right to indemnification and the advancement of expenses conferred in this Article 13 shall not be exclusive of any other right which any Person may have or hereafter acquire under any statute, agreement, by law, vote of the General Partner or otherwise. If this Article 13 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Partnership shall nevertheless indemnify and hold harmless each Indemnified Person pursuant to this Article 13 to the fullest extent permitted by any applicable portion of this Article 13 that shall not have been invalidated and to the fullest extent permitted by applicable law.

 

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13.4 Procedure Agreements . The Partnership may enter into an agreement with any Indemnified Person setting forth procedures consistent with applicable law for implementing the indemnities provided in this Article 13 .

13.5 Business and Investment Opportunities . Each employee, consultant and service provider of the Partnership or any of its Subsidiaries that is party to this Agreement shall, and shall cause each of his, her or its Affiliates to, bring all investment or business opportunities to the Partnership of which any of the foregoing become aware and which are related to, complimentary with or competitive with the activities then conducted or proposed to be conducted by the Partnership or any of its Subsidiaries. Notwithstanding the foregoing or anything at law or in equity to the contrary, to the fullest extent permitted by law, neither the foregoing sentence nor the doctrine of corporate opportunity, or any analogous doctrine, shall apply to (a) TPG Cayman, Oaktree Cayman, Builders Holdings International, L.P., Toeis, L.P., Oaktree TM Holdings TP, SRL, JHI Holding Limited Partnership, JHI Management Limited Partnership or their respective Affiliates, (b) any employees or partners of TPG Global, LLC or Oaktree Capital Management, L.P. or (c) any directors or officers (or their respective equivalents) of the General Partner, the Partnership or any Subsidiary of the Partnership that are Affiliates of TPG Global, LLC, Oaktree Capital Management, L.P., JHI Holding Limited Partnership or JHI Management Limited Partnership (any such Person referred to in the foregoing clauses (a), (b) and (c), an “ Exempted Person ”). The Partnership renounces any interest or expectancy of the Partnership in, or in being offered an opportunity to participate in, business or investment opportunities that are from time to time presented to any Exempted Person, including any transactions with TPG Cayman, Oaktree Cayman or any of their respective Affiliates. No Exempted Person who acquires knowledge of a potential transaction, agreement, arrangement or other matter that may be an opportunity for the Partnership, including any transaction with the TPG Cayman, Oaktree Cayman or any of their respective Affiliates, shall have any duty to communicate or offer such opportunity to the Partnership, and such Exempted Person shall not be liable to the Partnership or to the Limited Partners for breach of any fiduciary or other duty by reason of the fact that such Exempted Person pursues or acquires such opportunity, or directs such opportunity to another Person or does not communicate such opportunity or information to the Partnership. No amendment or repeal of this Section 13.5 shall apply to or have any effect on the liability or alleged liability of any Exempted Person for or with respect to any opportunities of which any such Exempted Person becomes aware prior to such amendment or repeal. For the avoidance of doubt, the provisions of this Section 13.5 shall have independent effect with respect to, and shall not be construed as being in lieu of or otherwise limiting, any separate obligations of any Person under any agreement between such Person and the Partnership and/or its Subsidiaries, including any agreement related to any noncompetition, nonsolicitation, confidentiality or other restrictions on the activities or operations of such Person.

13.6 Reliance, etc .

(a) Notwithstanding any other provision of this Agreement, an Indemnified Person acting under this Agreement shall not be liable to the Partnership or to any other Indemnified Person for its, his or her good faith reliance on the provisions of this Agreement. To the fullest extent provided by law, the provisions of this Agreement, to the extent that they restrict the duties (including fiduciary duties) and liabilities of an Indemnified Person otherwise existing at law or in equity, are agreed by the Partnership, each Partner and each Limited Partner to replace such other duties and liabilities of such Indemnified Person.

 

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(b) Notwithstanding any other provision of this Agreement but subject to applicable law, whenever in this Agreement an Indemnified Person is permitted or required to make a decision (i) in its, his or her discretion or under a grant of similar authority, the Indemnified Person shall be entitled to consider only such interests and factors as such Indemnified Person desires, including its, his or her own and its, his or her Affiliates’ interests, and shall, to the fullest extent permitted by applicable law, have no duty or obligation to give any consideration to any interest of or factors affecting the Partnership, any Partner, any Limited Partner or any other Person, or (ii) in its, his or her good faith or under another express standard, the Indemnified Person shall act under such express standard and shall not be subject to any other or different standards.

 

14. REPRESENTATIONS AND COVENANTS BY THE PARTNERS

Each Limited Partner hereby represents and warrants to, and agrees with, the General Partner, severally and not jointly and solely on its own behalf, as follows:

14.1 Investment Intent . Such Partner is acquiring such Partner’s Interest as principal for its own account and not with a view to, or for resale in connection with, the distribution thereof in violation of the Securities Act or applicable Canadian securities legislation.

14.2 Securities Regulation . Such Partner has been advised that its Interest has not been registered under the Securities Act or any state securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities laws or unless an exemption from such registration requirements is available. Such Partner is aware that the Partnership is under no obligation to effect any such registration with respect to Interest or to file for or comply with any exemption from registration except as expressly agreed by the Partnership.

14.3 Knowledge and Experience and Economic Risk . Such Partner is an accredited investor as that term is defined in Regulation D under the Securities Act and/or such Partner has such knowledge and experience in financial and business matters that such Partner is capable of evaluating the merits and risks of such Partner’s investment in the Partnership, is able to incur a complete loss of such investment and is able to bear the economic risk of such investment for an indefinite period of time.

14.4 Binding Agreement . Such Partner has full legal capacity, power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly executed and delivered by such Partner and is the legal, valid and binding obligation of such Partner enforceable against it in accordance with the terms hereof, subject to applicable bankruptcy, insolvency, reorganization, moratorium, arrangement, fraudulent transfer or other similar law affecting creditors’ rights generally.

14.5 Tax Position . Such Partner will not, without the consent of the General Partner, take a position on such Partner’s U.S. federal income tax return, in any claim for refund or in any

 

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administrative or legal proceedings that is inconsistent with this Agreement or with any information return filed by the Partnership. Notwithstanding the foregoing, a Partner may take any such position to the extent (A) it is advised by its tax counsel or tax accountant that such action is reasonably necessary to comply with applicable law and (B) it promptly notifies the General Partner of such action.

14.6 Information . Such Partner has had an opportunity (a) to question, and to receive information from, the Partnership concerning the Partnership, the Units and such Partner’s investment in the Partnership and (b) to obtain any and all additional information necessary to verify the accuracy of any information that such Partner has deemed relevant to make an informed investment decision as to such Partner’s investment in the Partnership.

14.7 Tax and Other Advice . Such Partner has had the opportunity to consult with such Partner’s own tax and other advisors with respect to the consequences to such Partner of the purchase, receipt or ownership of the Units, including the tax consequences under federal, state, local, and other income tax laws of the United States or any other country and the possible effects of changes in such tax laws. Such Partner acknowledges that none of the Partnership, its Subsidiaries, Affiliates, successors, beneficiaries, heirs and assigns and its and their past and present directors, officers, employees, and agents (including their attorneys) makes or has made any representations or warranties to such Partner regarding the consequences to such Partner of the purchase, receipt or ownership of the Units, including the tax consequences under federal, state, local and other tax laws of the United States or any other country and the possible effects of changes in such tax laws.

14.8 Publicly Traded Partnership Matters . Such Partner is acquiring its Interest for its own account and is the sole beneficial owner thereof for U.S. federal income tax purposes. If such Partner is a disregarded entity for U.S. federal income tax purposes, (A) such Partner makes the representations, warranties and covenants in this Section 14.8 on behalf of its owner for U.S. federal income tax purposes and (B) the equity interests in such Partner will not be transferred directly or indirectly in a transaction that is treated for U.S. federal income tax purposes in whole or in part as a transfer of Interests if such transaction causes the Partnership to be unable to rely on the safe harbor described in Treasury Regulations Section 1.7704-1(h), (iii) either (1) such Partner is not, for U.S. federal income tax purposes, a partnership, trust, estate or “S Corporation” as defined in the Code (in each case a “Pass-Through Entity”) or (2) such Partner is, for U.S. federal income tax purposes, a Pass-Through Entity, and within the meaning of Treasury Regulations Section 1.7704-1 (A) it is not a principal purpose of the use of the tiered arrangement involving such Partner to permit the Partnership to satisfy the 100-partner limitation described in Treasury Regulations Section 1.7704-1(h)(1)(ii) or (B) at no time during the term of the Partnership will substantially all of the value of a beneficial owner’s interest in such Partner (directly or indirectly) be attributable to such Partner’s ownership of its Interest and (iv) such Partner has not transferred and will not transfer its Interest on or through (x) an established securities market or (y) a secondary market or the substantial equivalent thereof, all within the meaning of Code Section 7704(b).

14.9 Tax Information . Such Partner’s taxable year-end for U.S. federal income tax purposes is December 31 or such other date identified by such Partner to the Partnership. Such Partner has provided the Partnership with the applicable IRS Form W-8 or W-9 and will provide

 

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the Partnership with such additional information, documentation and representation (including any applicable tax-related forms) as it may reasonably request from time to time including, without limitation, with respect to its citizenship, residency, ownership or control so as to permit the Partnership to evaluate and comply with any tax requirements applicable to the Partnership or its investments. In the event any information, documentation or representations provided by such Partner become incorrect or obsolete, such Partner will promptly inform the General Partner and provided updated information, documentation and representations, as applicable.

14.10 Licenses and Permits . Such Partner will cooperate in providing such information, in signing such documents and in taking any other action as may reasonably be requested by the Partnership in connection with obtaining any non-U.S., federal, state or local license or permit needed to conduct its activities or the activities of any entity in which the Partnership invests.

14.11 Canadian Securities Laws .

(a) Such Partner is aware that (i) its Interest is subject to hold periods and other restrictions on resale pursuant to the provisions of applicable Canadian securities legislation (the “ Legislation ”), (ii) the Partnership has made no representations with respect to such hold periods or resale restrictions, and (iii) such Partner has been advised to seek independent legal advice with respect to any such hold periods or resale restrictions.

(b) Such Partner is aware that the Partnership is not a public company or a “reporting issuer” as defined in the Securities Act (British Columbia) and its Interest has been issued as an exempt distribution, and no filings, clearances or reviews under the Legislation have been or will be made in connection with the distribution.

(c) Such Partner acknowledges that the offer, sale and issuance of its Interest by the Partnership to such Partner is exempt from the prospectus requirements under the Legislation and, as a result: (i) such Partner may not have received information that would otherwise be required under the Legislation or be contained in a prospectus prepared in accordance with the Legislation, (ii) such Partner is restricted from using most of the protections, rights and remedies available under the Legislation, including statutory rights of rescission or damages, and (iii) the Partnership is relieved from certain obligations that would otherwise apply under the Legislation.

 

15. PARTNERSHIP REPRESENTATIONS

In order to induce the Partners to enter into this Agreement and to make the Capital Contributions contemplated hereby, the Partnership hereby represents and warrants to each Partner as follows:

15.1 Duly Formed . The Partnership is a duly formed and validly existing limited partnership under the ELP Law, with all necessary power and authority under the ELP Law to issue the Interests to be issued to the Partners hereunder.

 

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15.2 Valid Issue . When Limited Partners make a Capital Contribution in return for Interests as contemplated by this Agreement, they will hold such Interests, which will represent valid obligations of the Partnership and in respect of which they will not be liable to make any additional capital contributions (except as they otherwise agree) and no obligations of the Partnership will attach thereto.

 

16. AMENDMENTS TO AGREEMENT.

16.1 Amendments . This Agreement may be modified, amended or supplemented by written action of the General Partner; provided , that this Agreement may not be modified, amended or supplemented (i) without the prior written consent of TPG Cayman and Oaktree Cayman to the extent such Person, directly or indirectly (through a direct or indirect ownership interest in any Limited Partner other than through ownership of TMHC Common Stock), has an ownership interest in Units or Interests in the Partnership and (ii) in any way that would affect any Class of Units in a manner materially and disproportionately adverse to any other Class of Units in existence immediately prior to such amendment without the prior written consent of the Limited Partners, not to be unreasonably withheld or delayed, that hold at least a majority of such Class of Units so materially adversely and disproportionately affected (it being understood and agreed that for purposes of this Section 16.1(ii) , the Vested Common Units and Unvested Common Units shall be treated as one Class of Units).

16.2 Binding Effect . Any modification or amendment to this Agreement pursuant to this Article 16 shall be binding on all Limited Partners.

 

17. GENERAL.

17.1 Successors; Governing Law . This Agreement shall be binding upon the executors, administrators, estates, heirs and legal successors of the Limited Partners. This Agreement and the rights of the parties hereunder arising out of or related to this Agreement or the transactions contemplated hereunder shall be governed by, and interpreted in accordance with, the laws of the Cayman Islands, and all rights and remedies shall be governed by such laws without regard to principles of conflicts of laws. Notwithstanding the foregoing, the terms “gross negligence,” “negligence” and “willful misconduct” as used in this Agreement shall be interpreted in accordance with the laws of the State of Delaware.

17.2 Notices, Etc . All notices, demands and communications required or permitted hereunder shall be in writing and shall be deemed effectively given to a party to this Agreement if (i) delivered personally, (ii) sent and received by facsimile, (iii) sent by electronic mail or (iv) sent by certified or registered mail or by Federal Express, UPS or any other comparably reputable overnight courier service, postage prepaid, to the appropriate address as follows: (a) if to any Limited Partner, at the address of such Limited Partner on file with the Partnership; and (b) if to the General Partner or the Partnership, to

 

c/o Taylor Morrison Home Corporation
4900 North Scottsdale Road, Suite 2000
Scottsdale, AZ 85251
Attention:    Darrell Sherman,
   Vice President and General Counsel
Facsimile:    (866) 390-2612
E-mail:    dsherman@taylormorrison.com

 

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with a copy (which shall not constitute notice) to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064
Attention:    John C. Kennedy
   Lawrence G. Wee
Facsimile:    (212) 757-3990
E-mail:    jkennedy@paulweiss.com
   lwee@paulweiss.com
with a copy (which shall not constitute notice) to:
Ropes & Gray LLP
The Prudential Tower
800 Boylston Street
Boston, Massachusetts
USA 02199
Attention:    Julie H. Jones
   Alfred O. Rose
Facsimile:    (617) 951-7050
E-mail:    julie.jones@ropesgray.com
   alfred.rose@ropesgray.com
with a copy (which shall not constitute notice) to:
Debevoise & Plimpton LLP
919 Third Avenue
New York, New York
USA 10022
Attention:    George E.B. Maguire
   Jasmine Ball
Facsimile No.:    (212) 909-6836
E-mail:    gebmaguire@debevoise.com
   jball@debevoise.com
if to TMHC or any Management Limited Partners:
Taylor Morrison Home Corporation
4900 North Scottsdale Road, Suite 2000
Scottsdale, AZ 85251
Attention:    Darrell Sherman,
   Vice President and General Counsel
Facsimile:    (866) 390-2612
E-mail:    dsherman@taylormorrison.com

 

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with a copy (which shall not constitute notice) to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064
Attention:    John C. Kennedy
   Lawrence G. Wee
Facsimile:    (212) 757-3990
E-mail:    jkennedy@paulweiss.com
   lwee@paulweiss.com
if to TPG Cayman:
TPG Global, LLC
301 Commerce Street, Suite 3300
Fort Worth, TX 76102
USA 94104
Attention:    Ronald Cami
Facsimile No.:    (415) 743-1501
E-mail:    rcami@tpg.com
with a copy (which shall not constitute notice) to:
Ropes & Gray LLP
The Prudential Tower
800 Boylston Street
Boston, Massachusetts
USA 02199
Attention:    Julie H. Jones
   Alfred O. Rose
Facsimile:    (617) 951-7050
E-mail:    julie.jones@ropesgray.com
   alfred.rose@ropesgray.com
if to Oaktree Cayman:
Oaktree Capital Management, L.P.
333 South Grand Ave., 28 th Floor
Los Angeles, California
USA 90071
Attention:    Kenneth Liang
Facsimile No.:    (213) 830-6293
E-mail:    kliang@oaktreecapital.com

 

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with a copy (which shall not constitute notice) to:
Debevoise & Plimpton LLP
919 Third Avenue
New York, New York
USA 10022
Attention:    George E.B. Maguire
   Jasmine Ball
Facsimile No.:    (212) 909-6836
Email:    gebmaguire@debevoise.com
   jball@debevoise.com

Unless otherwise specified herein, such notices or other communications shall be deemed effective, (a) on the date received, if personally delivered or sent by facsimile or electronic mail during normal business hours, (b) on the business day after being received if sent by facsimile or electronic mail other than during normal business hours, (c) one business day after being sent by Federal Express, DHL or UPS or other comparably reputable delivery service and (d) five business days after being sent by registered or certified mail. Each of the Limited Partner shall be entitled to specify a different address by giving notice as aforesaid to the General Partner and the Partnership. The General Partner and the Partnership shall be entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto. Sections 8 and 19(3) of the Electronic Transactions Law (2003 Revision) of the Cayman Islands shall not apply.

17.3 Severability . If any provision of this Agreement is determined by a court to be invalid or unenforceable, that determination shall not affect the other provisions hereof, each of which shall be construed and enforced as if the invalid or unenforceable portion were not contained herein. Such invalidity or unenforceability shall not affect any valid and enforceable application thereof, and each such provision shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law.

17.4 Construction . In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, the principle of contra proferentum shall not apply to this Agreement and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any of the provisions of this Agreement.

17.5 Table of Contents, Headings . The table of contents and headings used in this Agreement are used for administrative convenience only and do not constitute substantive matter to be considered in construing this Agreement.

17.6 Rights Limited . Nothing in this Agreement will be construed as (a) giving any Person the right to continued employment with or the right to continue in any other service relationship with the Partnership or any of its Affiliates, or (b) limiting in any respect the ability of the Partnership or any of its Affiliates to terminate any Person’s employment for any reason, even if the termination is in violation of an obligation of the Partnership or its Affiliates to such Person.

 

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17.7 Entire Agreement . This Agreement, each Limited Partner’s respective purchase agreement, subscription agreement, Management Rollover Agreement or unit certificate and the other agreements contemplated hereby and thereby constitute the entire agreement of the Limited Partners and their Affiliates relating to the Partnership and supersede all prior meetings, communications, representations, negotiations, contracts or agreements (including any prior drafts thereof) with respect to the Partnership, whether oral or written, none of which shall be used as evidence of the parties’ intent. In addition, each party hereto acknowledges and agrees that all prior drafts of this Agreement contain attorney work product and shall in all respects be subject to the foregoing sentence.

17.8 No Third Party Rights . Except as expressly provided herein, the provisions of this Agreement are solely for the benefit of the Partnership, the General Partner and the Limited Partners, and no other Person, including creditors of the Partnership, shall have any right or claim against the Partnership, the General Partner or any Limited Partner by reason of this Agreement or any provision hereof or be entitled to enforce any provision of this Agreement. Notwithstanding the foregoing, each Indemnified Person and Exempted Person shall be an express third party beneficiary of this Agreement.

17.9 Effect of Waiver or Consent . A waiver or consent, express or implied, to or of any breach or default by any Person in the performance by that Person of its obligations with respect to the Partnership is not a consent or waiver to or of any other breach or default in the performance by that Person of the same or any other obligations of that Person with respect to the Partnership. Failure on the part of a Person to complain of any act of any Person or to declare any Person in default with respect to the Partnership, irrespective of how long that failure continues, does not constitute a waiver by that Person of its rights with respect to that default until the applicable statute-of-limitations period has run.

17.10 Counterparts and Facsimile . This Agreement may be executed in multiple counterparts with the same effect as if all signing parties had signed the same document. All counterparts shall be construed together and constitute the same instrument. This Agreement, each Limited Partner’s respective purchase agreement, subscription agreement or unit certificate and the other agreements contemplated hereby and thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or electronic delivery (i.e., by email of a PDF signature page) shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or electronic delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or by electronic delivery as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.

 

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17.11 Jurisdiction and Venue; Waiver of Jury Trial .

(a) Subject to the last sentence of this Section 17.11(a) , the parties irrevocably consent to the exclusive jurisdiction and venue of the state and federal courts located in Delaware in connection with any action relating to this Agreement and agree that service of summons, complaint or other process in connection with any such action may be made as set forth in Section 17.2 and that service so made shall be as effective as if personally made in the State of Delaware. To the extent not prohibited by applicable Law, each Partner waives and agrees not to assert, by way of motion, as a defense or otherwise, in any such proceeding brought in the above-named courts, any claim that such Partner is not subject personally to the jurisdiction of such courts, that such Partner’s property is exempt or immune from attachment or execution, that such proceeding is brought in an inconvenient forum, that the venue of such proceeding is improper, or that this Agreement or the subject matter thereof, may not be enforced in or by such courts. Notwithstanding the foregoing, nothing in this Section 17.11 excludes the jurisdiction of the Cayman Islands courts with respect to any matter reserved to it pursuant to the ELP Law or Cayman Islands law.

(b) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 17.11 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 17.11 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

17.12 Offset . Whenever hereunder the Partnership is to pay any sum to any Limited Partner, any amounts that such Limited Partner owes to the Partnership or any of its Subsidiaries may be deducted from that sum before payment and the amount of such sum deducted shall nonetheless be treated as paid to such Limited Partner.

17.13 Adjustment of Numbers . Subject to Section 16.1 , all numbers set forth herein that refer to Unit prices or amounts and all references to numbers of Units shall be appropriately adjusted by the General Partner in good faith to reflect Unit splits, Unit dividends, combinations of Units and other recapitalizations affecting the subject class of equity.

17.14 Business Days . If any time period for giving notice or taking action hereunder expires on a day which is a Saturday, Sunday, or legal holiday in the State of New York, the

 

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Cayman Islands, or the jurisdiction in which the Partnership’s principal office is located, the time period shall automatically be extended to the business day immediately following such Saturday, Sunday, or legal holiday.

17.15 Survival . Section 2.5 , Section 5.3 and Article 13 shall survive and continue in full force in accordance with their terms notwithstanding any termination of this Agreement or the dissolution of the Partnership.

17.16 Wills . Each Limited Partner who is a natural person agrees to execute a will which shall contain a direction and authorization to his or her personal representative, executor or administrator to comply with the provisions of this Agreement and to sell his or her Units, as the case may be, in accordance with this Agreement; provided , however , that the failure of any such Limited Partner to do so shall not affect the validity or enforceability of this Agreement.

17.17 Spousal Consent . If requested by the General Partner, each married Partner, and each such Partner who, subsequent to the date hereof, marries or remarries, shall concurrently with his or her execution hereof deliver to the General Partner the written consent of his or her spouse; provided , however , that the failure of any such Partner to do so shall not affect the validity or enforceability of this Agreement.

17.18 Designees . Each of the rights granted to a Limited Partner may, upon the request of such Limited Partner, be exercised in whole or in part from time to time by its Affiliates and other designees.

17.19 Gender . Any reference to the masculine gender shall be deemed to include the feminine and neuter genders unless the context otherwise requires.

*    *    *    *    *

 

- 43 -


IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have duly executed this Agreement of Exempted Limited Partnership as a deed on the date and year first written above.

 

GENERAL PARTNER:     TMM Holdings II GP, ULC
      By:  

/s/ Darrell Sherman

      Name:   Darrell Sherman
      Title:   Vice President, General Counsel and Secretary

 

[Signature Page to Exempted Limited Partnership Agreement for TMM Holdings II Limited Partnership]


INITIAL LIMITED PARTNER:     Executed and delivered as a deed by:
      TPG TMM Holdings II LP, Inc.
      By:  

/s/ Ronald Cami

        Name:   Ronald Cami
        Title:   Vice President and Secretary

 

[Signature Page to Exempted Limited Partnership Agreement for TMM Holdings II Limited Partnership]


LIMITED PARTNER:     Executed and delivered as a deed by:
      TPG TMM Holdings II, L.P.
      By:   TPG TMM Holdings II GP, ULC,
        its general partner
      By:  

/s/ Ronald Cami

        Name:   Ronald Cami
        Title:   Vice President and Secretary

 

[Signature Page to Exempted Limited Partnership Agreement for TMM Holdings II Limited Partnership]


LIMITED PARTNER:     Executed and delivered as a deed by:
      OCM TMM Holdings II, L.P.
      By:   OCM TMM Holdings II, GP, ULC,
        its general partner
      By:  

/s/ Derek Smith

        Name:   Derek Smith
        Title:   Authorized Signatory
      By:  

/s/ Kenneth Liang

        Name:   Kenneth Liang
        Title:   Authorized Signatory

 

[Signature Page to Exempted Limited Partnership Agreement for TMM Holdings II Limited Partnership]


LIMITED PARTNER:     Executed and delivered as a deed by:
      Taylor Morrison Home Corporation
      By:  

/s/ Darrell Sherman

      Name:   Darrell Sherman
      Title:   Vice President, General Counsel and Secretary

 

[Signature Page to Exempted Limited Partnership Agreement for TMM Holdings II Limited Partnership]


LIMITED PARTNER:     Executed and delivered as a deed by:
      JHI Holding Limited Partnership, by its General Partner, JHI Advisory Ltd.
      By:  

/s/ Joe S. Houssian

        Name:   Joe S. Houssian
        Title:   Director

 

[Signature Page to Exempted Limited Partnership Agreement for TMM Holdings II Limited Partnership]


/s/ Kenneth Dar Ahrens

Kenneth Dar Ahrens

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Sally Michelle Bassett

Sally Michelle Bassett

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Philip S. Bodem

Philip S. Bodem

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Calvin R. Boyd

Calvin R. Boyd

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Michelle M Campbell

Michelle M Campbell

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Carl David Cone

Carl David Cone

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Mark A. Delillo

Mark A. Delillo

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Timothy Eller

Timothy Eller

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Charles Enochs

Charles Enochs

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Caroline G. Estrada

Caroline G. Estrada

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Kip Williams Gilleland

Kip Williams Gilleland

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Amy L. Haywood-Rino

Amy L. Haywood-Rino

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ George T. Hennessy

George T. Hennessy

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Erik M. Heuser

Erik M. Heuser

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Douglas P. Holloway

Douglas P. Holloway

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ David Hreha

David Hreha

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Graham Hughes

Graham Hughes

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ James E. Jimison

James E. Jimison

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Maurice B. Johnson

Maurice B. Johnson

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Tawn Kelley

Tawn Kelley

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ John Kempton

John Kempton

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Peter Lane

Peter Lane

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ John H. Lucas

John H. Lucas

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Tommi Lynn Manning

Tommi Lynn Manning

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Todd Merrill

Todd Merrill

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Douglas Miller

Douglas Miller

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Kathleen R. Owen

Kathleen R. Owen

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Sheryl D. Palmer

Sheryl D. Palmer

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Joseph B. Poletti

Joseph B. Poletti

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Darrell Sherman

Darrell Sherman

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Louis Steffens

Louis Steffens

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Timothy J. Towell

Timothy J. Towell

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Stephen J. Wethor

Stephen J. Wethor

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Jonathan C. White

Jonathan C. White

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Erin A. Willis

Erin A. Willis

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


/s/ Robert W. Witte

Robert W. Witte

 

[Signature Page to LPA of TMM Holdings II Limited Partnership]


Exhibit 3.1

LIMITED PARTNERS OF THE PARTNERSHIP

 

Limited Partner

  

Common Units

TPG TMM Holdings II, L.P.    54,881,984 Common Units
OCM TMM Holdings II, L.P.    54,881,984 Common Units
Taylor Morrison Home Corporation    [ ] Common Units
JHI Holding Limited Partnership    1,208,897 Common Units
Sheryl Palmer    509,677 Common Units
Steve Wethor    198,912 Common Units
Lou Steffens    193,972 Common Units
Darrell Sherman    138,046 Common Units
David Cone    96,205 Common Units
Tawn Kelley    93,703 Common Units
Timothy Eller    63,695 Common Units
Bob Witte    44,576 Common Units
Erik Heuser    57,478 Common Units
Katy Owen    45,430 Common Units
Graham Hughes    44,576 Common Units
Charlie Enochs    31,415 Common Units
Dar Ahrens    29,993 Common Units
Steve Kempton    29,993 Common Units
Jonathan White    29,141 Common Units
Phil Bodem    28,002 Common Units
Maurice Johnson    28,002 Common Units
Tim Towell    28,002 Common Units
Peter Lane    31,848 Common Units
Kip Gilleland    27,434 Common Units
Calvin Boyd    7,963 Common Units
David Hreha    7,963 Common Units
Tom Hennessy    5,119 Common Units
Lynn Manning    5,119 Common Units
Todd Merrill    4,551 Common Units
Erin Willis    4,551 Common Units
Michelle Bassett    3,412 Common Units
Jim Jimison    3,413 Common Units
Michelle Campbell    2,844 Common Units
Mark Delillo    2,844 Common Units
Amy Haywood    2,844 Common Units
Doug Holloway    2,844 Common Units
John Lucas    2,844 Common Units
Doug Miller    2,276 Common Units
Joe Poletti    2,276 Common Units
Carlie Estrada    1,138 Common Units


Exhibit 8.1

OFFICERS

1. Election . The officers may be elected by the General Partner at any time. At any time or from time to time the General Partner may delegate to any officer their power to elect or appoint any other officer or any agents.

2. Tenure . Each officer shall hold office until his or her respective successor is chosen and qualified unless a shorter period shall have been specified by the terms of his or her election or appointment, or in each case until he or she sooner dies, resigns, is removed or becomes disqualified. Each agent shall retain his or her authority at the pleasure of the General Partner, or the officer by whom he or she was appointed or by the officer who then holds agent appointive power.

3. President and Vice President . Unless the General Partner otherwise specifies, the President shall be the chief executive officer and shall have direct charge of all activities of the Partnership and, subject to the control of the General Partner, shall have general charge and supervision of the activities of the Partnership. Any Vice Presidents shall have duties as shall be designated from time to time by the General Partner or the President.

4. Treasurer and Assistant Treasurers . Unless the General Partner otherwise specifies, the Treasurer (or if no Treasurer is elected, the President) shall be the chief financial officer of the Partnership and shall be in charge of its funds and valuable papers, and shall have such other duties and powers as may be designated from time to time by the General Partner or the President. If no Controller is elected, the Treasurer (or if no Treasurer is elected, the President) shall, unless the General Partner otherwise specifies, also have the duties and powers of the Controller. Any Assistant Treasurers shall have such duties and powers as shall be designated from time to time by the General Partner, the President or the Treasurer.

5. Controller and Assistant Controllers . If a Controller is elected, the Controller shall, unless the General Partner otherwise specifies, be the chief accounting officer of the Partnership and be in charge of its books of account and accounting records, and of its accounting procedures. The Controller shall have such other duties and powers as may be designated from time to time by the General Partner, the President or the Treasurer. Any Assistant Controller shall have such duties and powers as shall be designated from time to time by the General Partner, the President, the Treasurer or the Controller.

6. Secretary and Assistant Secretaries . The Secretary shall record all proceedings of the Partners and the General Partner in a book or series of books to be kept therefor and shall file therein all actions by written consent of the General Partner. In the absence of the Secretary from any meeting, an Assistant Secretary, or if no Assistant Secretary is present, a temporary secretary chosen at the meeting, shall record the proceedings thereof. The Secretary shall keep or cause to be kept records, which shall contain the names and record addresses of all Limited Partners. The Secretary shall have such other duties and powers as may from time to time be designated by the General Partner or the President. Any Assistant Secretaries shall have such duties and powers as shall be designated from time to time by the General Partner, the President or the Secretary.


7. Vacancies . If the office of any officer becomes vacant, any person or body empowered to elect or appoint that officer may choose a successor. Each such successor shall hold office for the unexpired term, and until his or her successor is chosen and qualified or in each case until he or she sooner dies, resigns, is removed or becomes disqualified.

8. Resignation and Removal . The General Partner may at any time remove any officer either with or without cause. The General Partner may at any time terminate or modify the authority of any agent. Any officer may resign at any time by delivering his or her resignation in writing to the General Partner, the President or the Secretary. Such resignation shall be effective upon receipt unless specified to be effective at some other time, and without in either case the necessity of its being accepted unless the resignation shall so state.

Exhibit 10.3

EXECUTION VERSION

EXCHANGE AGREEMENT

This EXCHANGE AGREEMENT (as it may be amended from time to time in accordance with the terms hereof, the “ Agreement ”), dated as of April 9, 2013, is made by and among Taylor Morrison Home Corporation, a Delaware corporation (the “ Corporation ”), TMM Holdings II Limited Partnership, a Cayman Islands exempted limited partnership (“ New TMM ”), and the holders of New TMM Units (as defined herein) and shares of Class B Common Stock (as defined herein) from time to time party hereto (each, a “ Holder ”).

WHEREAS, the parties hereto desire to provide for the exchange of New TMM Units together with shares of Class B Common Stock for shares of Class A Common Stock (as defined herein), on the terms and subject to the conditions set forth herein;

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

ARTICLE I

SECTION 1.1. Definitions

The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.

Agreement ” has the meaning set forth in the preamble.

Class A Common Stock ” means the Class A common stock, par value $0.00001 per share, of the Corporation.

Class B Common Stock ” means the Class B common stock, par value $0.00001 per share, of the Corporation.

Code ” means the Internal Revenue Code of 1986, as amended.

Corporation ” has the meaning set forth in the preamble.

Election of Exchange ” has the meaning set forth in Section 2.1(b) of this Agreement.

Exchange ” has the meaning set forth in Section 2.1(a) of this Agreement.

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

Exchange Rate ” means the number of shares of Class A Common Stock for which one Paired Interest is entitled to be Exchanged. On the date of this Agreement, the Exchange Rate shall be 1, subject to adjustment pursuant to Section 2.2 of this Agreement.

Holder ” has the meaning set forth in the preamble.


New TMM ” has the meaning set forth in the preamble.

New TMM LPA ” means the Amended and Restated Agreement of Limited Partnership of New TMM, dated on or about the date hereof, as such agreement may be amended from time to time.

New TMM Unit ” means the Common Units (as such term is defined in the New TMM LPA).

Paired Interest ” means one New TMM Unit together with one share of Class B Common Stock.

Permitted Transferee ” has the meaning given to such term in Section 4.1 of this Agreement.

Registration Rights Agreement ” means the registration rights agreement by and among the Corporation and the stockholders party thereto, dated as of the date hereof.

Stockholders Agreement ” means the stockholders agreement by and among the Corporation and the stockholders party thereto, dated as of the date hereof.

ARTICLE II

SECTION 2.1. Exchange of Paired Interests for Class A Common Stock .

(a) From and after the execution and delivery of this Agreement, each Holder shall be entitled at any time and from time to time, upon the terms and subject to the conditions hereof, to surrender Paired Interests to the Corporation in exchange for the delivery to the Holder of a number of shares of Class A Common Stock that is equal to the product of the number of Paired Interests surrendered multiplied by the Exchange Rate (such exchange, an “ Exchange ”).

(b) A Holder shall exercise its right to effect an Exchange as set forth in Section 2.1(a) above by delivering to the Corporation a written election of exchange in respect of the Paired Interests to be Exchanged substantially in the form of Exhibit A hereto (the “ Election of Exchange ”), duly executed by such Holder or such Holder’s duly authorized attorney, in each case delivered to the Corporation at its address set forth in Section 4.2(a). Each Exchange shall be deemed to be effective at the time the Election of Exchange is delivered to the Corporation, and the exchanging Holder shall be deemed to be a holder of Class A Common Stock from and after that time. As promptly as practicable following the delivery of the Election of Exchange, the Corporation shall deliver or cause to be delivered to the exchanging Holder the number of shares of Class A Common Stock deliverable upon such Exchange, registered in the name of such Holder. To the extent the Class A Common Stock is settled through the facilities of The Depository Trust Company, the Corporation will, subject to Section 2.1(c) below, upon the written instruction of a Holder, deliver the shares of Class A Common Stock deliverable to such Holder, through the facilities of The Depository Trust Company, to the account of the participant of The Depository Trust Company designated by such Holder.

 

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(c) Subject to Section 2.3(b), the shares of Class A Common Stock issued upon an Exchange shall bear a legend in substantially the following form:

THE TRANSFER OF THESE SECURITIES HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION AND MAY NOT BE SOLD OR TRANSFERRED OTHER THAN IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (OR OTHER APPLICABLE LAW), OR AN EXEMPTION THEREFROM.

(d) If (i) any shares of Class A Common Stock may be sold pursuant to a registration statement that has been declared effective by the Securities and Exchange Commission, (ii) all of the applicable conditions of Rule 144 are met, or (iii) if a Holder otherwise requests removal of the legend, the Corporation, upon the written request of the Holder thereof and, in the case of clauses (ii) and (iii), receipt of an opinion of counsel to such Holder reasonably acceptable to the Corporation, shall take all necessary action promptly to remove such legend (in the case of clause (i), with respect to any such shares) and, if the shares of Class A Common Stock are certificated, issue to such Holder new certificates evidencing such shares of Class A Common Stock without the legend.

(e) The Corporation shall bear all expenses in connection with the consummation of any Exchange, whether or not any such Exchange is ultimately consummated, including any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, any Exchange; provided , however , that if any shares of Class A Common Stock are to be delivered in a name other than that of the Holder that requested the Exchange (or The Depository Trust Company or its nominee for the account of a participant of The Depository Trust Company that will hold the shares for the account of such Holder), then such Holder and/or the person in whose name such shares are to be delivered shall pay to the Corporation the amount of any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, such Exchange or shall establish to the reasonable satisfaction of the Corporation that such tax has been paid or is not payable.

SECTION 2.2. Adjustment .

(a) The Exchange Rate and/or the components of a Paired Interest shall be adjusted accordingly if there is: (i) any subdivision (by any stock or unit split, stock or unit distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock or unit split, reclassification, reorganization, recapitalization or otherwise) of the shares of Class B Common Stock or New TMM Units that is not accompanied by a substantially equivalent subdivision or combination of the Class A Common Stock; or (ii) any subdivision (by any stock split, stock dividend or distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock split, reclassification, reorganization, recapitalization or otherwise) of the Class A Common Stock that is not accompanied by a substantially equivalent subdivision or combination of the shares of Class B Common Stock and New TMM Units. If there is any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Common Stock are converted or changed into another security,

 

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securities or other property, then upon any subsequent Exchange, an exchanging Holder shall be entitled to receive the amount of such security, securities or other property that such exchanging Holder would have received if such Exchange had occurred immediately prior to the effective date of such reclassification, reorganization, recapitalization or other similar transaction, taking into account any adjustment as a result of any subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction. For the avoidance of doubt, if there is any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Common Stock are converted or changed into another security, securities or other property, this Section 2.2 shall continue to be applicable, mutatis mutandis , with respect to such security or other property. This Agreement shall apply to the Paired Interests held by the Holders and their Permitted Transferees as of the date hereof, as well as any Paired Interests hereafter acquired by a Holder and his or her or its Permitted Transferees. This Agreement shall apply to, mutatis mutandis , and all references to “Paired Interests” shall be deemed to include, any security, securities or other property of the Corporation or New TMM which may be issued in respect of, in exchange for or in substitution of shares of Class B Common Stock or New TMM Units, as applicable, by reason of any distribution or dividend, split, reverse split, combination, reclassification, reorganization, recapitalization, merger, exchange (other than an Exchange) or other transaction.

SECTION 2.3. Class A Common Stock to be Issued; Class B Common Stock to be Cancelled .

(a) The Corporation shall at all times reserve and keep available out of its authorized but unissued Class A Common Stock, solely for the purpose of issuance upon an Exchange, the maximum number of shares of Class A Common Stock as shall be deliverable upon Exchange of all then-outstanding Paired Interests; provided, that nothing contained herein shall be construed to preclude the Corporation from satisfying its obligations in respect of an Exchange by delivery of shares of Class A Common Stock that are held in the treasury of the Corporation or any of its subsidiaries or by delivery of purchased shares of Class A Common Stock (which may or may not be held in the treasury of the Corporation or any subsidiary thereof). The Corporation covenants that all shares of Class A Common Stock issued upon an Exchange will, upon issuance in accordance with this Agreement, be validly issued, fully paid and non-assessable.

(b) When a Paired Interest has been exchanged in accordance with this Agreement, the share of Class B Common Stock corresponding to such Paired Interest shall be cancelled by the Corporation.

(c) Subject to the terms of the Registration Rights Agreement, the Corporation covenants and agrees to deliver shares of Class A Common Stock, if requested, pursuant to an effective registration statement under the Securities Act with respect to any Exchange to the extent that a registration statement is effective and available for such shares. In the event that any Exchange in accordance with this Agreement is to be effected at a time when any required registration has not become effective or otherwise is unavailable, upon the request and with the reasonable cooperation of the Holders requesting such Exchange, the Corporation and New TMM shall use reasonable best efforts to promptly facilitate such Exchange pursuant to any

 

-4-


reasonably available exemption from such registration requirements. The Corporation shall use reasonable best efforts to list the Class A Common Stock required to be delivered upon Exchange prior to such delivery upon each national securities exchange or inter-dealer quotation system upon which the outstanding Class A Common Stock may be listed or traded at the time of such delivery.

(d) The Corporation agrees that it has taken all or will take such steps as may be required to cause to qualify for exemption under Rule 16b-3(d) or (e), as applicable, under the Exchange Act, and to be exempt for purposes of Section 16(b) under the Exchange Act, any acquisitions from, or dispositions to, the Corporation of equity securities of the Corporation (including derivative securities with respect thereto) and any securities that may be deemed to be equity securities or derivative securities of the Corporation for such purposes that result from the transactions contemplated by this Agreement, by each officer or director of the Corporation, including any director by deputization. The authorizing resolutions shall be approved by either the Corporation’s board of directors or a committee composed solely of two or more Non-Employee Directors (as defined in Rule 16b-3) of the Corporation.

ARTICLE III

SECTION 3.1. Representations and Warranties of the Corporation and of New TMM . Each of the Corporation and New TMM represents and warrants that (i) it is a corporation or limited partnership duly incorporated or formed and is existing in good standing under the laws of its jurisdiction of organization, (ii) it has all requisite corporate or limited partnership power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby and, in the case of the Corporation, to issue the Class A Common Stock in accordance with the terms hereof, (iii) the execution and delivery of this Agreement by it and the consummation by it of the transactions contemplated hereby (including without limitation, in the case of the Corporation, the issuance of the Class A Common Stock) have been duly authorized by all necessary corporate or limited partnership action on its part and (iv) this Agreement constitutes a legal, valid and binding obligation of it enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

SECTION 3.2. Representations and Warranties of the Holders . Each Holder, severally and not jointly, represents and warrants that (i) if it is not a natural person, that it is duly incorporated or formed and, the extent such concept exists in its jurisdiction of organization, is in good standing under the laws of such jurisdiction, (ii) it has all requisite legal capacity and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby, (iii) if it is not a natural person, the execution and delivery of this Agreement by it of the transactions contemplated hereby have been duly authorized by all necessary corporate or other entity action on the part of such Holder and (iv) this Agreement constitutes a legal, valid and binding obligation of such Holder enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

 

-5-


ARTICLE IV

SECTION 4.1. Additional Holders . To the extent a Holder validly transfers any or all of such Holder’s Paired Interests to another person in a transaction in accordance with, and not in contravention of, the New TMM LPA, the Stockholders Agreement or the Registration Rights Agreement, then such transferee (each, a “ Permitted Transferee ”) shall have the right to execute and deliver a joinder to this Agreement, substantially in the form of Exhibit B hereto, whereupon such Permitted Transferee shall become a Holder hereunder. To the extent New TMM issues New TMM Units in the future, then the holder of such New TMM Units shall have the right to execute and deliver a joinder to this Agreement, substantially in the form of Exhibit B hereto, whereupon such holder shall become a Holder hereunder.

SECTION 4.2. Addresses and Notices . All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by courier service, by fax (delivery receipt requested), by electronic mail or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be as specified in a notice given in accordance with this Section 4.2):

(a) If to the Corporation, to:

 

Taylor Morrison Home Corporation

4900 North Scottsdale Road, Suite 2000

Scottsdale, AZ 85251
Attention:      Darrell Sherman,
     Vice President and General Counsel
Facsimile:      (866) 390-2612
E-mail: dsherman@taylormorrison.com

(b) If to New TMM, to:

 

TMM Holdings II Limited Partnership

c/o Taylor Morrison Home Corporation

4900 North Scottsdale Road, Suite 2000

Scottsdale, AZ 85251
Attention:      Darrell Sherman,
     Vice President and General Counsel
Facsimile:      (866) 390-2612
E-mail:      dsherman@taylormorrison.com

(c) If to any Holder, to the address and other contact information set forth in the records of the Corporation or New TMM from time to time.

SECTION 4.3. Further Action . The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.

 

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SECTION 4.4. Binding Effect . This Agreement shall be binding upon and inure to the benefit of all of the parties and, to the extent permitted by this Agreement, their successors, executors, administrators, heirs, legal representatives and assigns.

SECTION 4.5. Severability . If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions is not affected in any manner materially adverse to any party. Upon a determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

SECTION 4.6. Amendment . The provisions of this Agreement may be amended only by the affirmative vote or written consent of each of (i) the Corporation, (ii) New TMM, (iii) TPG TMM Holdings II, L.P. (to the extent it then holds New TMM Units or shares of Class B Common Stock) and (iv) OCM TMM Holdings II, L.P. (to the extent it then holds New TMM Units or shares of Class B Common Stock).

SECTION 4.7. Waiver . No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach of any other covenant, duty, agreement or condition.

SECTION 4.8. Submission to Jurisdiction; Waiver of Jury Trial .

(a) The parties irrevocably consent to the jurisdiction and venue of the state and federal courts located in Delaware in connection with any action relating to this Agreement and agree that service of summons, complaint or other process in connection with any such action may be made as set forth in Section 4.2 and that service so made shall be as effective as if personally made in the State of Delaware. To the extent not prohibited by applicable law, each party hereto waives and agrees not to assert, by way of motion, as a defense or otherwise, in any such proceeding brought in the above-named courts, any claim that such party is not subject personally to the jurisdiction of such courts, that such party’s property is exempt or immune from attachment or execution, that such proceeding is brought in an inconvenient forum, that the venue of such proceeding is improper, or that this Agreement or the subject matter thereof, may not be enforced in or by such courts.

(b) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS

 

-7-


CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 4.8(b) CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 4.8(b) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

SECTION 4.9. Counterparts . This Agreement may be executed and delivered (including by facsimile transmission or by e-mail delivery of a “.pdf” format data file) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Copies of executed counterparts transmitted by telecopy, by e-mail delivery of a “.pdf” format data file or other electronic transmission service shall be considered original executed counterparts for purposes of this Section 4.9.

SECTION 4.10. Tax Treatment . This Agreement shall be treated as part of the New TMM LPA as described in Section 761(c) of the Code and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations promulgated thereunder. As required by the Code and the Treasury Regulations, the parties shall report any Exchange consummated hereunder as a taxable sale of the New TMM Units and shares of Class B Common Stock by a Holder to the Corporation, and no party shall take a contrary position on any income tax return or amendment thereof unless an alternate position is permitted under the Code and Treasury Regulations and the Corporation consents in writing.

SECTION 4.11. Specific Performance . The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to specific performance of the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity.

SECTION 4.12. Independent Nature of Holders’ Rights and Obligations . The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder under hereunder. The decision of each Holder to enter into to this Agreement has been made by such Holder independently of any other Holder. Nothing contained herein, and no action taken by any Holder pursuant hereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated hereby.

SECTION 4.13. Applicable Law . This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

 

-8-


IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered, all as of the date first set forth above.

 

Taylor Morrison Home Corporation
By:  

/s/ Darrell Sherman

Name:   Darrell Sherman
Title:   Vice President, General Counsel and Secretary

 

[Signature Page to Exchange Agreement]


TMM Holdings II Limited Partnership
By:   TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Darrell Sherman

  Name:   Darrell Sherman
  Title:   Vice President, General Counsel and Secretary

 

[Signature Page to Exchange Agreement]


OCM TMM HOLDINGS II, L.P.
By:   OCM TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Derek Smith

  Name:   Derek Smith
  Title:   Authorized Signatory
By:  

/s/ Kenneth Liang

  Name:   Kenneth Liang
  Title:   Authorized Signatory

 

[Signature Page to Exchange Agreement]


TPG TMM HOLDINGS II, L.P.
By:   TPG TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Ronald Cami

  Name:   Ronald Cami
  Title:   Vice President and Secretary

 

[Signature Page to Exchange Agreement]


JHI Holding Limited Partnership, by
its General Partner, JHI Advisory Ltd.
By:  

/s/ Joe S. Houssian

  Name:   Joe S. Houssian
  Title:   Director

 

[Signature Page to Exchange Agreement]


/s/ Kenneth Dar Ahrens

Kenneth Dar Ahrens

 

[Signature Page to Exchange Agreement]


/s/ Sally Michelle Bassett

Sally Michelle Bassett

 

[Signature Page to Exchange Agreement]


/s/ Philip S. Bodem

Philip S. Bodem

 

[Signature Page to Exchange Agreement]


/s/ Calvin R. Boyd

Calvin R. Boyd

 

[Signature Page to Exchange Agreement]


/s/ Michelle M. Campbell

Michelle M. Campbell

 

[Signature Page to Exchange Agreement]


/s/ Carl David Cone

Carl David Cone

 

[Signature Page to Exchange Agreement]


/s/ Mark A. Delillo

Mark A. Delillo

 

[Signature Page to Exchange Agreement]


/s/ Timothy Eller

Timothy Eller

 

[Signature Page to Exchange Agreement]


/s/ Charles Enochs

Charles Enochs

 

[Signature Page to Exchange Agreement]


/s/ Caroline G. Estrada

Caroline G. Estrada

 

[Signature Page to Exchange Agreement]


/s/ Kip Williams Gilleland

Kip Williams Gilleland

 

[Signature Page to Exchange Agreement]


/s/ Amy L. Haywood-Rino

Amy L. Haywood-Rino

 

[Signature Page to Exchange Agreement]


/s/ George T. Hennessy

George T. Hennessy

 

[Signature Page to Exchange Agreement]


/s/ Erik M. Heuser

Erik M. Heuser

 

[Signature Page to Exchange Agreement]


/s/ Douglas P. Holloway

Douglas P. Holloway

 

[Signature Page to Exchange Agreement]


/s/ David Hreha

David Hreha

 

[Signature Page to Exchange Agreement]


/s/ Graham Hughes

Graham Hughes

 

[Signature Page to Exchange Agreement]


/s/ James E. Jimison

James E. Jimison

 

[Signature Page to Exchange Agreement]


/s/ Maurice B. Johnson

Maurice B. Johnson

 

[Signature Page to Exchange Agreement]


/s/ Tawn Kelley

Tawn Kelley

 

[Signature Page to Exchange Agreement]


/s/ John Kempton

John Kempton

 

[Signature Page to Exchange Agreement]


/s/ Laura Kunzweiler

Laura Kunzweiler

 

[Signature Page to Exchange Agreement]


/s/ Peter Lane

Peter Lane

 

[Signature Page to Exchange Agreement]


/s/ John H. Lucas

John H. Lucas

 

[Signature Page to Exchange Agreement]


/s/ Tommi Lynn Manning

Tommi Lynn Manning

 

[Signature Page to Exchange Agreement]


/s/ Todd Merrill

Todd Merrill

 

[Signature Page to Exchange Agreement]


/s/ Douglas Miller

Douglas Miller

 

[Signature Page to Exchange Agreement]


/s/ Kathleen R. Owen

Kathleen R. Owen

 

[Signature Page to Exchange Agreement]


/s/ Sheryl D. Palmer

Sheryl D. Palmer

 

[Signature Page to Exchange Agreement]


/s/ Joseph B. Poletti

Joseph B. Poletti

 

[Signature Page to Exchange Agreement]


/s/ Darrell Sherman

Darrell Sherman

 

[Signature Page to Exchange Agreement]


/s/ Louis Steffens

Louis Steffens

 

[Signature Page to Exchange Agreement]


/s/ Timothy J. Towell

Timothy J. Towell

 

[Signature Page to Exchange Agreement]


/s/ Stephen J. Wethor

Stephen J. Wethor

 

[Signature Page to Exchange Agreement]


/s/ Erin A. Willis

Erin A. Willis

 

[Signature Page to Exchange Agreement]


/s/ Jonathan C. White

Jonathan C. White

 

[Signature Page to Exchange Agreement]


/s/ Robert W. Witte

Robert W. Witte

 

[Signature Page to Exchange Agreement]


EXHIBIT A

[FORM OF]

ELECTION OF EXCHANGE

Taylor Morrison Home Corporation

4900 North Scottsdale Road, Suite 2000

Scottsdale, AZ 85251

Attention:        Darrell Sherman

New TMM Cayman LP

c/o Taylor Morrison Home Corporation

4900 North Scottsdale Road, Suite 2000

Scottsdale, AZ 85251

Attention:        Darrell Sherman

Reference is hereby made to the Exchange Agreement, dated as of April 9, 2013 (the “ Exchange Agreement ”), among Taylor Morrison Home Corporation, a Delaware corporation, TMM Holdings II Limited Partnership, a Cayman Islands exempted limited partnership, and the holders of New TMM Units (as defined therein) from time to time party thereto. Capitalized terms used but not defined herein shall have the meanings given to them in the Exchange Agreement.

The undersigned Holder hereby transfers to the Corporation the number of Paired Interests set forth below in Exchange for shares of Class A Common Stock to be issued in its name as set forth below, in accordance with the terms of the Exchange Agreement.

 

Legal Name of Holder:  

 

 

 

Address:  

 

 

Number of Paired Interests to be Exchanged:  

 

The undersigned hereby represents and warrants that (i) the undersigned has full legal capacity to execute and deliver this Election of Exchange and to perform the undersigned’s obligations hereunder; (ii) this Election of Exchange has been duly executed and delivered by the undersigned and is the legal, valid and binding obligation of the undersigned enforceable against it in accordance with the terms thereof or hereof, as the case may be, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and the availability of equitable remedies; (iii) the shares of Class B Common Stock and New TMM Units subject to this Election of Exchange are being transferred to the Corporation free and clear of any pledge, lien, security interest, encumbrance, equities or claim; and (iv) no consent, approval, authorization, order, registration or qualification of any third party or with any court or governmental agency or body having jurisdiction over the undersigned or the shares of Class B Common Stock or the New TMM Units subject to this Election of Exchange is required to be obtained by the undersigned for the transfer of such shares of Class B Common Stock or New TMM Units to the Corporation.


The undersigned hereby irrevocably constitutes and appoints any officer of the Corporation as the attorney of the undersigned, with full power of substitution and resubstitution in the premises, to do any and all things and to take any and all actions that may be necessary to transfer to the Corporation the shares of Class B Common Stock and New TMM Units subject to this Election of Exchange and to deliver to the undersigned the shares of Class A Common Stock to be delivered in Exchange therefor.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Election of Exchange to be executed and delivered by the undersigned or by its duly authorized attorney.

 

 

Name:  
Dated:  

 


EXHIBIT B

[FORM OF]

JOINDER AGREEMENT

This Joinder Agreement (“ Joinder Agreement ”) is a joinder to the Exchange Agreement, dated as of April 9, 2013 (the “ Agreement ”), among Taylor Morrison Home Corporation, a Delaware corporation (the “ Corporation ”), TMM Holdings II Limited Partnership, a Cayman Islands exempted limited partnership (“ New TMM ”), and each of the Holders from time to time party thereto. Capitalized terms used but not defined in this Joinder Agreement shall have their meanings given to them in the Agreement. This Joinder Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction. In the event of any conflict between this Joinder Agreement and the Agreement, the terms of this Joinder Agreement shall control.

The undersigned, having acquired shares of Class B Common Stock and New TMM Units, hereby joins and enters into the Agreement. By signing and returning this Joinder Agreement to the Corporation, the undersigned (i) accepts and agrees to be bound by and subject to all of the terms and conditions of and agreements of a Holder contained in the Agreement, with all attendant rights, duties and obligations of a Holder thereunder and (ii) makes each of the representations and warranties of a Holder set forth in Section 3.2 of the Agreement as fully as if such representations and warranties were set forth herein. The parties to the Agreement shall treat the execution and delivery hereof by the undersigned as the execution and delivery of the Agreement by the undersigned and, upon receipt of this Joinder Agreement by the Corporation and by New TMM, the signature of the undersigned set forth below shall constitute a counterpart signature to the signature page of the Agreement.

 

Name:  

 

 

Address for Notices:     With copies to:

 

   

 

 

   

 

 

   

 

Exhibit 10.4

EXECUTION VERSION

 

 

 

STOCKHOLDERS AGREEMENT

BY AND AMONG

TAYLOR MORRISON HOME CORPORATION

AND

THE STOCKHOLDERS PARTY HERETO

D ATED AS OF A PRIL 9, 2013

 

 

 


TABLE OF CONTENTS

 

Article I DEFINITIONS

     2  

Section 1.1

  

Definitions

     2  

Section 1.2

  

Other Interpretive Provisions

     5  

Article II REPRESENTATIONS AND WARRANTIES

     6  

Section 2.1

  

Existence; Authority; Enforceability

     6  

Section 2.2

  

Absence of Conflicts

     6  

Section 2.3

  

Consents

     6  

Article III GOVERNANCE

     7  

Section 3.1

  

The Board

     7  

Section 3.2

  

Voting Agreement

     10  

Section 3.3

  

The Boards of Directors of U.S. Parent and Canadian Parent

     10  

Section 3.4

  

Company and Partnership Activities; Approvals

     10  

Section 3.5

  

Subsidiaries of the Company

     12  

Article IV GENERAL PROVISIONS

     12  

Section 4.1

  

Company Charter and Company Bylaws

     12  

Section 4.2

  

Freedom to Pursue Opportunities

     12  

Section 4.3

  

Assignment; Benefit

     13  

Section 4.4

  

Termination

     13  

Section 4.5

  

Limits on Transfer or Issuance of Class B Common Stock

     13  

Section 4.6

  

Severability

     14  

Section 4.7

  

Entire Agreement; Amendment

     14  

Section 4.8

  

Counterparts

     14  

Section 4.9

  

Notices

     14  

Section 4.10

  

Governing Law

     17  

Section 4.11

  

Jurisdiction

     17  

Section 4.12

  

Waiver of Jury Trial

     17  

Section 4.13

  

Specific Performance

     17  

Section 4.14

  

Subsequent Acquisition of Shares

     18  

 

i


This STOCKHOLDERS AGREEMENT (as it may be amended from time to time in accordance with the terms hereof, the “ Agreement ”), dated as of April 9, 2013, is made by and among:

i. Taylor Morrison Home Corporation, a Delaware corporation (the “ Company ”);

ii. TPG TMM Holdings II, L.P., a Cayman Islands limited partnership (together with its Affiliates, “ TPG ” or the “ TPG Investor ”);

iii. OCM TMM Holdings II, L.P., a Cayman Islands limited partnership (together with its Affiliates, “ Oaktree ” or the “ Oaktree Investor ”);

iv. JHI Holding Limited Partnership, a British Columbia limited partnership (together with its Affiliates, “ JHI ” or the “ JHI Investor ”); and

v. such other Persons who from time to time become party hereto by executing a counterpart signature page hereof and are designated by the Board (as defined below) as “ Other Stockholders ” (the “Other Stockholders” and, together with the TPG Investor, the Oaktree Investor and the JHI Investor, the “ Stockholders ”).

For purposes of this Agreement, each of TPG and Oaktree is a “ Principal Sponsor ”, and each of TPG, Oaktree and JHI is an “ Investor ”.

RECITALS

WHEREAS, on July 13, 2011, TMM Holdings (G.P.) Inc., TMM Holdings Limited Partnership (the “ Partnership ”), and certain stockholders party thereto entered into a Stockholders Agreement (the “ Prior Agreement ”);

WHEREAS, pursuant to a Reorganization Agreement dated the date hereof, the Company, the Partnership, the Investors and certain other Persons have effected a series of reorganization transactions (collectively, the “ Reorganization Transactions ”);

WHEREAS, after giving effect to the Reorganization Transactions, the Principal Sponsors own limited partnership interests in TMM Holdings II Limited Partnership (“ New TMM Units ”) and shares of the Company’s Class B common stock, par value $0.00001 per share (the “ Class B Common Stock ”), which, subject to certain restrictions, are exchangeable from time to time at the option of the holder thereof for shares of the Company’s Class A common stock, par value $0.00001 per share (the “ Class A Common Stock ” and, together with the Class B Common Stock, the “ Common Stock ”) pursuant to an Exchange Agreement dated the date hereof;

WHEREAS, on the date hereof, the Company has priced an initial public offering of shares of its Class A Common Stock (the “ IPO ”) pursuant to an Underwriting Agreement dated the date hereof (the “ Underwriting Agreement ”);

 

1


WHEREAS, on the date hereof, the Prior Agreement is being terminated by the parties thereto; and

WHEREAS, the parties hereto desire to provide for certain governance rights and other matters, and to set forth the respective rights and obligations of the Stockholders following the IPO.

NOW, THEREFORE, in consideration of the foregoing and the mutual promises, covenants and agreements of the parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions . As used in this Agreement, the following terms shall have the following meanings:

90-Day Unaffiliated Director ” has the meaning set forth in Section 3.1(a).

Affiliate ” means, with respect to any specified Person, (a) any Person that directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person or (b) in the event that the specified Person is a natural Person, a Member of the Immediate Family of such Person; provided that the Company, the Partnership, U.S. Parent, Canadian Parent and each of their respective subsidiaries shall not be deemed to be Affiliates of the TPG Investor, Oaktree Investor or JHI Investor. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

Agreement ” has the meaning set forth in the Preamble.

Board ” means the board of directors of the Company.

Business Day ” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in the City of New York.

Canadian Parent ” means Monarch Communities Inc., a British Columbia corporation.

Canadian Parent Governance Agreement ” means the Canadian Parent Governance Agreement, dated as of the date hereof, by and among the Company, the Partnership, Canadian Parent and the other parties thereto.

Chief Executive Officer ” means the chief executive officer of the Company then in office.

Class A Common Stock ” has the meaning set forth in the Recitals.

 

2


Class A Units ” means, collectively, the Class A-T Units of TPG TMM Holdings II, L.P. and the Class A-O Units of Oaktree TMM Holdings II, L.P.

Class B Common Stock ” has the meaning set forth in the Recitals.

Class J Units ” means, collectively, the Class J1-T Units, Class J2-T Units and Class J3-T Units of TPG TMM Holdings II, L.P. and the Class J1-O Units, Class J2-O Units and Class J3-O Units of Oaktree TMM Holdings II, L.P.

Closing ” means the closing of the IPO.

Code ” means the U.S. Internal Revenue Code of 1986, as amended. Any reference to a section of the Code shall include a reference to any successor provision thereto.

Common Stock ” has the meaning set forth in the Recitals.

Company ” has the meaning set forth in the Preamble.

Company Bylaws ” means the bylaws of the Company in effect on the date hereof, as may be amended from time to time.

Company Charter ” means the certificate of incorporation of the Company in effect on the date hereof, as may be amended from time to time.

Company Shares ” means (i) all shares of Common Stock that are not then subject to vesting (including shares that were at one time subject to vesting to the extent they have vested), (ii) all shares of Common Stock issuable upon exercise, conversion or exchange of any option, warrant or convertible security that are not then subject to vesting (including shares that were at one time subject to vesting to the extent they have vested) (without double counting shares of Class A Common Stock issuable upon an exchange of shares of Class B Common Stock together with New TMM Units) and (iii) all shares of Common Stock directly or indirectly issued or issuable with respect to the securities referred to in clauses (i) or (ii) above by way of unit or stock dividend or unit or stock split, or in connection with a combination of units or shares, recapitalization, merger, consolidation or other reorganization.

Debt Threshold ” means an amount equal to $50.0 million.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.

Fund Indemnitors ” has the meaning set forth in Section 3.1(i).

Indemnitee ” has the meaning set forth in Section 3.1(i).

Investor ” has the meaning set forth in the Preamble.

IPO ” has the meaning set forth in the Recitals.

 

3


JHI ” or “ JHI Investor ” has the meaning set forth in the Preamble.

JHI Director ” has the meaning set forth in Section 3.1(a).

Loan Threshold ” means an amount equal to $50.0 million.

Majority in Interest ” means, with respect to the Stockholders or any subset thereof, Stockholders who beneficially own a majority of Company Shares held by the Stockholders or such subset of Stockholders, as applicable.

Member of the Immediate Family ” means, with respect to an individual, (a) each parent, spouse (but not including a former spouse or a spouse from whom such individual is legally separated) or child (including those adopted) of such individual and (b) each trustee, solely in his or her capacity as trustee and so long as such trustee is reasonably satisfactory to the Company, for a trust naming only one or more of the Persons listed in sub-clause (a) as beneficiaries.

Necessary Action ” means, with respect to a specified result, all actions necessary to cause such result, including (i) voting or providing a written consent or proxy with respect to the Company Shares, (ii) causing the adoption of stockholders’ resolutions and amendments to the organizational documents of the Company, (iii) executing agreements and instruments, and (iv) making, or causing to be made, with governmental, administrative or regulatory authorities, all filings, registrations or similar actions that are required to achieve such result.

Oaktree ” or “ Oaktree Investor ” has the meaning set forth in the Preamble. “Oaktree Directors” has the meaning set forth in Section 3.1(a).

Other Stockholders ” has the meaning set forth in the Preamble.

Partnership ” has the meaning set forth in the Preamble.

Person ” means any individual, partnership, limited liability company, corporation, trust, association, estate, unincorporated organization or government or any agency or political subdivision thereof.

Principal Sponsor ” has the meaning set forth in the Preamble.

Principal Sponsor Minimum ” means, with respect to a Principal Sponsor, a number of shares of Common Stock equal to at least 50% of the outstanding shares of Common Stock owned by such Principal Sponsor as of the closing of all of the transactions contemplated by the Underwriting Agreement and the Put/Call Agreement, or, if no such closing occurs prior to June 30, 2013, the Closing.

Purchase Consideration Threshold ” means an amount equal to $50.0 million.

Put/Call Agreement ” means the Put/Call Agreement, dated as of the date hereof, by and among TPG, Oaktree, TMM Holdings II Limited Partnership and the Company.

 

4


Representatives ” means, with respect to any Person, any of such Person’s officers, directors, employees, agents, attorneys, accountants, actuaries, consultants or financial advisors or other Person associated with, or acting on behalf of, such Person.

Requisite Investor Approval ” means (a) for so long as each Principal Sponsor holds at least the Principal Sponsor Minimum, the approval of a majority of the Board, including in each case at least one director designated by each Principal Sponsor; and (b) to the extent only one Principal Sponsor holds the Principal Sponsor Minimum, the approval of a majority of the Board, including in each case at least one director designated by such Principal Sponsor. At such time as neither Principal Sponsor holds at least the Principal Sponsor Minimum, any action requiring “Requisite Investor Approval” shall be determined by the Company or the Board in accordance with applicable law.

Sale Consideration Threshold ” means an amount equal to $50.0 million.

Securities Act ” means the Securities Act of 1933, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.

Stockholders ” has the meaning set forth in the Preamble.

TMM Companies ” means the Partnership, TMM Holdings II Limited Partnership, TMM Holdings II GP, ULC and TMM Holdings (G.P.) ULC.

TPG ” or “ TPG Investor ” has the meaning set forth in the Preamble.

TPG Directors ” has the meaning set forth in Section 3.1(a).

Transfer ” means, with respect to any Company Shares, any interest therein, or any other securities or equity interests, a direct or indirect transfer, sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition thereof, including the grant of an option or other right, whether directly or indirectly, whether voluntarily, involuntarily or by operation of law; and “ Transferred ”, “ Transferee ” and “ Transferor ” shall each have a correlative meaning.

Unaffiliated Director ” has the meaning set forth in Section 3.1(a).

Underwriting Agreement ” has the meaning set forth in the Recitals.

U.S. Parent ” means Taylor Morrison Holdings, Inc., a Delaware corporation.

U.S. Parent Governance Agreement ” means the U.S. Parent Governance Agreement, dated as of the date hereof, by and among the Company, the Partnership, U.S. Parent and the other parties thereto.

Section 1.2 Other Interpretive Provisions . (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

 

5


(b) The words “ hereof ,” “ herein ,” “ hereunder ” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and any subsection and section references are to this Agreement unless otherwise specified.

(c) The term “ including ” is not limiting and means “ including without limitation .”

(d) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

(e) Whenever the context requires, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

Each of the parties to this Agreement hereby represents and warrants to each other party to this Agreement that as of the date such party executes this Agreement:

Section 2.1 Existence; Authority; Enforceability . Such party has the power and authority to enter into this Agreement and to carry out its obligations hereunder. Such party is duly organized and validly existing under the laws of its jurisdiction of organization, and the execution of this Agreement, and the consummation of the transactions contemplated herein, have been authorized by all necessary action on the part of its board of directors (or equivalent) and shareholders (or other holders of equity interests), if required, and no other act or proceeding on its part is necessary to authorize the execution of this Agreement or the consummation of any of the transactions contemplated hereby. This Agreement has been duly executed by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

Section 2.2 Absence of Conflicts . The execution and delivery by such party of this Agreement and the performance of its obligations hereunder does not and will not (a) conflict with, or result in the breach of any provision of the constitutive documents of such party, (b) result in any violation, breach, conflict, default or an event of default (or an event which with notice, lapse of time, or both, would constitute a default or an event of default), or give rise to any right of acceleration or termination or any additional payment obligation, under the terms of any contract, agreement or permit to which such party is a party or by which such party’s assets or operations are bound or affected, or (c) violate any law applicable to such party.

Section 2.3 Consents . Other than as expressly required herein or any consents which have already been obtained, no consent, waiver, approval, authorization, exemption, registration, license or declaration is required to be made or obtained by such party in connection with (a) the execution, delivery or performance of this Agreement or (b) the consummation of any of the transactions contemplated herein.

 

6


ARTICLE III

GOVERNANCE

Section 3.1 The Board .

(a) Composition of Initial Board . Prior to Closing, the Company and the Stockholders shall take all Necessary Action to cause the Board to be comprised of ten (10) directors, (i) three (3) of whom shall be designated by TPG (each, a “ TPG Director ”), (ii) three (3) of whom shall be designated by Oaktree (each, an “ Oaktree Director ”), (iii) one (1) of whom shall be designated by JHI (the “ JHI Director ”), (iv) one (1) of whom shall be the Chief Executive Officer and (v) two (2) of whom shall be directors who meet the independence criteria set forth in Rule 10A-3 under the Exchange Act (each, an “ Unaffiliated Director ”). Within ninety (90) days of the effectiveness of this Agreement, the Company and the Stockholders shall take all Necessary Action to cause the Board to increase in size by one (1) director to eleven (11) directors and to fill such vacancy with one (1) additional Unaffiliated Director (the “ 90-Day Unaffiliated Director ”) who shall be appointed by a majority of the Board. The foregoing directors shall be divided into three classes of directors, each of whose members shall serve for staggered three-year terms as follows:

(1) the class I directors shall include one (1) TPG Director, one (1) Oaktree Director, the Chief Executive Officer and one (1) Unaffiliated Director;

(2) the class II directors shall include one (1) TPG Director, one (1) Oaktree Director, the JHI Director and the 90-Day Unaffiliated Director; and

(3) the class III directors shall include one (1) TPG Director, one (1) Oaktree Director and (1) one Unaffiliated Director.

The initial term of the class I directors shall expire immediately following the Company’s 2014 annual meeting of stockholders at which directors are elected. The initial term of the class II directors shall expire immediately following the Company’s 2015 annual meeting of stockholders at which directors are elected. The initial term of the class III directors shall expire immediately following the Company’s 2016 annual meeting at which directors are elected.

For the avoidance of doubt, this Section 3.1(a) is applicable solely to the initial composition of the Board and shall have no further force or effect after the 90-Day Unaffiliated Director is appointed to the Board (except that (i) a director shall remain a member of the class of directors to which he or she was assigned in accordance with this Section 3.1(a) and (ii) the initial terms of each class of directors shall expire as set forth in this Section 3.1(a)).

(b) Principal Sponsor Representation . For so long as a Principal Sponsor holds a number of shares of Common Stock representing at least the percentage of shares of Common Stock held by such Principal Sponsor as of the closing of all of the transactions contemplated by the Underwriting Agreement and the Put/Call Agreement (or, if no such closing occurs prior to June 30, 2013, the Closing) shown below, there shall be included in the slate of nominees recommended by the Board for election as directors at each applicable annual or

 

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special meeting of shareholders at which directors are to be elected that number of individuals designated by such Principal Sponsor (each, a “ Principal Sponsor Designee ”) that, if elected, will result in such Principal Sponsor having the number of directors serving on the Board that is shown below.

 

Percent

   Number of
Directors
 

50% or greater

     3   

Less than 50% but greater than or equal to 10%

     2   

Less than 10% but greater than or equal to 5%

     1   

Upon any decrease in the number of directors that a Principal Sponsor is entitled to designate for election to the Board, such Principal Sponsor shall take all Necessary Action to cause the appropriate number of Principal Sponsor Designees to offer to tender resignation. If such resignation is then accepted by the Board, the Company and the Stockholders shall cause the authorized size of the Board to be reduced accordingly unless the Company with Requisite Investor Approval determines not to reduce the authorized size of the Board.

(c) JHI Representation . For so long as the Principal Sponsors in the aggregate own at least fifty percent (50%) of the number of shares of Common Stock held by the Principal Sponsors as of the closing of all of the transactions contemplated by the Underwriting Agreement and the Put/Call Agreement (or, if no such closing occurs prior to June 30, 2013, the Closing) and JHI owns at least fifty percent (50%) in the aggregate of the Class A Units and at least fifty percent (50%) in the aggregate of the Class J Units that JHI holds as of such time, there shall be included in the slate of nominees recommended by the Board for election as directors at each applicable annual or special meeting of shareholders at which directors are to be elected that number of individuals designated by JHI (each, a “ JHI Designee ”) that, if elected, will result in there being one (1) JHI Director serving on the Board. Upon any decrease in the number of directors that JHI is entitled to designate for election to the Board, JHI shall take all Necessary Action to cause the JHI Designee to offer to tender resignation. If such resignation is accepted by the Board, then the Company and the Stockholders shall cause the authorized size of the Board to be reduced accordingly unless the Company with Requisite Investor Approval determines not to reduce the authorized size of the Board.

(d) CEO Representation . Subject to the last sentence of Section 3.1(e), if the term of the Chief Executive Officer as a director on the Board is to expire in conjunction with any annual or special meeting of shareholders at which directors are to be elected, the Chief Executive Officer shall be included in the slate of nominees recommended by the Board for election.

(e) Vacancies . Except as provided in Sections 3.1(b) and 3.1(c), (i) each Investor shall have the exclusive right to remove its designees from the Board, and the Company and the Principal Sponsors shall take all Necessary Action to cause the removal of any such designee at the request of the designating Investor and (ii) each Investor shall have the exclusive right to designate for election to the Board directors to fill vacancies created by reason of death, removal or resignation of its designees to the Board, and the Company and the Principal Sponsors shall take all Necessary Action to cause any such vacancies to be filled by replacement directors designated by such designating Investor as promptly as reasonably practicable;

 

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provided , that, for the avoidance of doubt and notwithstanding anything to the contrary in this paragraph, no Investor shall have the right to designate a replacement director, and the Company and the Principal Sponsors shall not be required to take any action to cause any vacancy to be filled by any such designee, to the extent that election or appointment of such designee to the Board would result in a number of directors designated by such Investor in excess of the number of directors that such Investor is then entitled to designate for membership on the Board pursuant to Section 3.1(b) or Section 3.1(c), as applicable. If the Chief Executive Officer resigns or is terminated for any reason, the Company, the Chief Executive Officer and the Principal Sponsors shall take all Necessary Action to remove the Chief Executive Officer from the Board and fill such vacancy with the next Chief Executive Officer in office.

(f) Additional Unaffiliated Directors . For so long as any Principal Sponsor has the right to designate at least one (1) director for nomination under this Agreement, the Company will take all Necessary Action to ensure that the number of directors serving on the Board shall not exceed eleven (11); provided , that the number of directors may be increased if necessary to satisfy the requirements of applicable laws and stock exchange regulations.

(g) Committees . Subject to applicable laws and stock exchange regulations, each Principal Sponsor shall have the right to have a representative appointed to serve on each committee of the Board for so long as such Principal Sponsor has the right to designate at least one (1) director for election to the Board. Subject to applicable laws and stock exchange regulations, each Principal Sponsor shall have the right to have a representative appointed as an observer to any committee of the Board to which such Principal Sponsor (i) does not elect to have a representative appointed or (ii) is prohibited by applicable laws or stock exchange regulations from having a representative appointed, in each case for so long as such Principal Sponsor has the right to designate at least one (1) director for nomination under this Agreement.

(h) Reimbursement of Expenses . The Company shall reimburse each TPG Director, Oaktree Director, JHI Director, Principal Sponsor Designee and JHI Designee for all reasonable and documented out-of-pocket expenses incurred in connection with such director’s or designee’s participation in the meetings of the Board or any committee of the Board, including reasonable travel, lodging and meal expenses.

(i) D&O Insurance; Indemnification Priority . The Company shall obtain customary director and officer indemnity insurance on commercially reasonable terms. The Company hereby acknowledges that any director, officer or other indemnified person covered by any such indemnity insurance policy (any such Person, an “ Indemnitee ”) may have certain rights to indemnification, advancement of expenses and/or insurance provided by TPG, Oaktree or one or more of their respective Affiliates (collectively, the “ Fund Indemnitors ”). The Company hereby (i) agrees that the Company and any Company subsidiary that provides indemnity shall be the indemnitor of first resort (i.e., its or their obligations to an Indemnitee shall be primary and any obligation of any Fund Indemnitor to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee shall be secondary), and (ii) irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of an Indemnitee with respect to any claim for which such Indemnitee has

 

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sought indemnification from the Company, as the case may be, shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Indemnitee against the Company.

Section 3.2 Voting Agreement . Each Principal Sponsor agrees to cast all votes to which such Principal Sponsor is entitled in respect of its Company Shares, whether at any annual or special meeting, by written consent or otherwise, so as to cause to be elected to the Board those individuals designated in accordance with Section 3.1(a)-(f) and to otherwise effect the intent of this Article III.

Section 3.3 The Boards of Directors of U.S. Parent and Canadian Parent . The Company shall take all Necessary Action to cause the composition of the board of directors of U.S. Parent and the board of directors of Canadian Parent to be identical at all times to that of the Board; provided , that, notwithstanding anything to the contrary set forth in this Section 3.3, in the event that a Principal Sponsor Designee or JHI Designee is not elected to the Board at the applicable annual or special meeting of shareholders at which such nominee is up for election (or re-election) to the Board pursuant to the terms of this Agreement, the Company shall take all Necessary Action to cause such Principal Sponsor Designee or JHI Designee to be appointed or elected to the board of directors of U.S. Parent and the board of directors of Canadian Parent in place of a director who was not on the slate of nominees recommended by the Board at the time of the annual or special meeting of shareholders at which he or she was not elected (or re-elected) to the Board; provided , further , that the Company shall take all Necessary Action to fill any vacancy caused by the removal or resignation of any such Principal Sponsor Designee or JHI Designee with a replacement director designated by the applicable Principal Sponsor or JHI, as applicable, unless the election or appointment of such a replacement would result in a number of directors designated by such Investor in excess of the number of directors that such Investor is then entitled to designate for membership on the Board pursuant to Section 3.1(b) or Section 3.1(c), as applicable.

Section 3.4 Company and Partnership Activities; Approvals . The Company shall not take, and shall cause TMM Holdings II Limited Partnership and the Partnership not to take, any actions that would cause TMM Holdings II Limited Partnership or the Partnership to conduct any activities other than stewardship over the investments of the Partnership in U.S. Parent and Canadian Parent. The Company shall not conduct any business or operations other than those of a holding company, the sole direct subsidiaries of which are TMM Holdings II Limited Partnership and TMM Holdings II GP, ULC. The Company shall be permitted, among other things, to maintain its legal existence, including by incurring fees, costs and expenses relating to such maintenance, to participate in tax, accounting and other administrative matters as a member of a consolidated group with TMM Holdings II Limited Partnership and its subsidiaries, to make public offerings of any securities (subject to the paragraphs below), to register its securities under applicable securities laws and maintain public listing of its securities, to incur expenses relating to overhead and general operations, to provide indemnification to officers, directors, consultants and agents, and to perform

 

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activities incidental to those enumerated in this sentence. The Company shall take all Necessary Action to cause (i) TMM Holdings II GP, ULC to conduct no activities other than acting as general partner of TMM Holdings II Limited Partnership and (ii) TMM Holdings (G.P.) ULC to conduct no activities other than acting as general partner of the Partnership. In furtherance of the foregoing, the Company shall not take, and shall cause the TMM Companies not to take, any of the following actions without prior Requisite Investor Approval:

 

  i. Any transactions or series of related transactions (i) in which any Person or Persons (other than TPG Investors or Oaktree Investors) acquires in excess of 50% of the then outstanding shares of any class of capital stock (or equivalent) of the Company, any TMM Company, U.S. Parent or Canadian Parent (whether by merger, consolidation, sale or transfer of partnership interests, tender offer, exchange offer, reorganization, recapitalization or otherwise) or (ii) following which any Person or Persons (other than TPG Investors, Oaktree Investors or the Company) have the direct or indirect power to elect a majority of the members of the board of directors (or equivalent) of the Company, any TMM Company, U.S. Parent or Canadian Parent;

 

  ii. Any transaction or series of related transactions involving the sale, lease, exchange or other disposal by the Company or any TMM Company of any of their respective assets for consideration having a fair market value (as reasonably determined by the Board) in excess of the Sale Consideration Threshold;

 

  iii. Any transaction or series of related transactions involving the purchase, rent, license, exchange or other acquisition by the Company or any TMM Company of any assets (including securities) for consideration having a fair market value (as reasonably determined by the Board) in excess of the Purchase Consideration Threshold;

 

  iv. The hiring or termination of the Chief Executive Officer;

 

  v. (A) any incurrence of indebtedness by the Company or any TMM Company if, after taking into account the incurrence of such indebtedness, the aggregate outstanding indebtedness of the Company and the TMM Companies would exceed the Debt Threshold, or (B) the making of any loan, advance or capital contribution to any Person (other than a TMM Company, U.S. Parent or Canadian Parent) by the Company or any TMM Company in excess of the Loan Threshold;

 

  vi.

Any authorization or issuance of equity securities of the Company or its direct or indirect subsidiaries other than (A) pursuant to any equity incentive plans or arrangements of U.S. Parent, Canadian Parent and their respective subsidiaries that have been approved by “Requisite Investor Approval” (as such term is defined in the U.S. Parent Governance

 

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  Agreement and the Canadian Parent Governance Agreement, respectively) or (B) upon an exchange of shares of Class B Common Stock together with New TMM Units for shares of Class A Common Stock; or

 

  vii. Any increase or decrease in the size of the Board other than in accordance with Section 3.1.

Each of TPG and Oaktree acknowledges and agrees that Requisite Investor Approval has been obtained with respect to all actions taken and transactions undertaken on the date hereof in connection with the IPO. Each Investor agrees to cast all votes to which such holder is entitled in respect of its Company Shares, whether at any annual or special meeting, by written consent or otherwise, against any action that otherwise requires Requisite Investor Approval but for which Requisite Investor Approval has not been obtained.

Section 3.5 Unless permitted with Requisite Investor Approval, the Company shall not have any direct subsidiaries other than TMM Holdings II Limited Partnership and TMM Holdings II GP, ULC nor shall it directly own any equity interests or other debt or equity investments in any other Person (other than its own treasury stock). Unless otherwise permitted following receipt of Requisite Investor Approval, the Company shall take all Necessary Action to cause TMM Holdings II GP, ULC not to have any direct subsidiaries other than TMM Holdings II Limited Partnership and not to directly own any equity interests or other debt or equity investments in any other Person (other than its own treasury stock).

ARTICLE IV

GENERAL PROVISIONS

Section 4.1 Company Charter and Company Bylaws .

(a) The provisions of this Agreement shall be controlling if any such provisions or the operation thereof conflict with the provisions of the Company Charter or the Company Bylaws. The Company and the Principal Sponsors agree to take all Necessary Action to amend the Company Charter and Company Bylaws so as to avoid any conflict with the provisions hereof.

(b) Any amendment to the Company Bylaws shall only be effective if approved by Requisite Investor Approval or such shareholder approval as is set forth in the Company Bylaws.

Section 4.2 Freedom to Pursue Opportunities . The parties expressly acknowledge and agree that: (i) each Investor, each Representative of an Investor and each director or officer of the Company, the Partnership or any TMM Company that is an Affiliate or designee of an Investor (each, an “ Investor Designee ”) has the right to, and has no duty (contractual or otherwise) not to, (x) directly or indirectly engage in the

 

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same or similar business activities or lines of business as the Company, the Partnership or any TMM Company, including those deemed to be competing with the Company, the Partnership or any TMM Company, or (y) directly or indirectly do business with any client, customer or supplier of the Company, the Partnership or any TMM Company; and (ii) in the event that an Investor, any Representative of a Principal Sponsor or any Investor Designee acquires knowledge of a potential transaction or matter that may be a corporate opportunity for the Company, the Partnership or any TMM Company, such Investor, Representative or Investor Designee shall have no duty (contractual or otherwise) to communicate or present such corporate opportunity to the Company, the Partnership, any TMM Company or any of their respective Affiliates, and, notwithstanding any provision of this Agreement to the contrary, shall not be liable to the Company, the Partnership, any TMM Company or any of their respective Affiliates, subsidiaries, stockholders or other equity holders for breach of any duty (contractual or otherwise) by reason of the fact that such Investor, Representative or Investor Designee, directly or indirectly, pursues or acquires such opportunity for itself, directs such opportunity to another Person, or does not present such opportunity to the Company, TMM Holdings II Limited Partnership, the Partnership or any of their respective Affiliates. For the avoidance of doubt, the provisions of this Section 4.2 shall have independent effect with respect to, and shall not be construed as being in lieu of or otherwise limiting, any separate obligations of any Person under any agreement between the Company and/or the Partnership, including any agreement related to noncompetition, nonsolicitation, confidentiality or other restrictions on the activities or operations of such Person.

Section 4.3 Assignment; Benefit .

(a) The rights and obligations hereunder shall not be assignable without the prior written consent of the other parties hereto. Any attempted assignment of rights or obligations in violation of this Section 4.3 shall be null and void.

(b) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their respective successors and permitted assigns, and there shall be no third-party beneficiaries to this Agreement other than the Indemnitees and the Fund Indemnitors under Section 3.1(i), and the Investors, their Representatives and the Investor Designees under Section 4.2.

Section 4.4 Termination . If not otherwise stipulated, this Agreement shall terminate automatically (without any action by any party hereto) as to each Stockholder as of the later of (i) when such Stockholder no longer owns any shares of Common Stock, or (ii) when such Stockholder no longer has the right to nominate any directors to the Board pursuant to Article III hereof.

Section 4.5 Limits on Transfer or Issuance of Class B Common Stock . The parties each acknowledge and agree that no shares of Class B Common Stock may be Transferred or issued unless a corresponding number of New TMM Units are Transferred or issued therewith (including any transfers or issuances of shares of Class B Common Stock held in treasury or otherwise, by the Company or any of its subsidiaries) and that the Company will not register any Transfers of shares of Class B Common Stock that do not satisfy this Section 4.5.

 

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Section 4.6 Severability . In the event that any provision of this Agreement shall be invalid, illegal or unenforceable such provision shall be construed by limiting it so as to be valid, legal and enforceable to the maximum extent provided by law and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 4.7 Entire Agreement; Amendment .

(a) This Agreement (together with the U.S. Parent Governance Agreement and the Canadian Parent Governance Agreement) sets forth the entire understanding and agreement between the parties with respect to the transactions contemplated herein and supersedes and replaces any prior understanding, agreement or statement of intent, in each case written or oral, of any kind and every nature with respect hereto. This Agreement or any provision hereof may only be amended, modified or waived, in whole or in part, at any time by an instrument in writing signed by each of the Principal Sponsors with respect to which this Agreement is not terminated; provided that (i) the prior written consent of any Investor shall be required for any amendment, modification or waiver that would have a disproportionate adverse effect in any material respect on the rights of such Investor relative to the other Investors and (ii) the prior written consent of the holders of the Majority in Interest of the Company Shares then held by the Other Stockholders shall be required for any amendment, modification or waiver that would have a disproportionate and adverse effect in any material respect on the rights of Other Stockholders under this Agreement relative to the Investors.

(b) No waiver of any breach of any of the terms of this Agreement shall be effective unless such waiver is expressly made in writing and executed and delivered by the party against whom such waiver is claimed. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. Except as otherwise expressly provided herein, no failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder, or otherwise available in respect hereof at law or in equity, shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

Section 4.8 Counterparts . This Agreement may be executed in any number of separate counterparts each of which when so executed shall be deemed to be an original and all of which together shall constitute one and the same agreement. Counterpart signature pages to this Agreement may be delivered by facsimile or electronic delivery ( i.e ., by email of a PDF signature page) and each such counterpart signature page will constitute an original for all purposes.

Section 4.9 Notices . Unless otherwise specified herein, all notices, consents, approvals, reports, designations, requests, waivers, elections and other communications authorized or required to be given pursuant to this Agreement shall be in writing and

 

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shall be given, made or delivered by personal hand-delivery, by facsimile transmission, by electronic mail, by mailing the same in a sealed envelope, registered first-class mail, postage prepaid, return receipt requested, or by air courier guaranteeing overnight delivery (and such notice shall be deemed to have been duly given, made or delivered (a) on the date received, if delivered by personal hand delivery, (b) on the date received, if delivered by facsimile transmission, by electronic mail or by registered first-class mail prior to 5:00 p.m. prevailing local time on a Business Day, or if delivered after 5:00 p.m. prevailing local time on a Business Day or on other than a Business Day, on the first Business Day thereafter and (c) two (2) Business Days after being sent by air courier guaranteeing overnight delivery), at the following addresses (or at such other address as shall be specified by like notice):

if to the Company to:

 

Taylor Morrison Home Corporation

4900 North Scottsdale Road, Suite 2000

Scottsdale, AZ 85251

Attention:      Darrell Sherman,
     Vice President and General Counsel
Facsimile:      (866) 390-2612
E-mail:      dsherman@taylormorrison.com
with a copy (which shall not constitute notice) to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

Attention:      John C. Kennedy
     Lawrence G. Wee
Facsimile:      (212) 757-3990
E-mail:      jkennedy@paulweiss.com
     lwee@paulweiss.com

if to the TPG Investor, to:

 

TPG Global, LLC

301 Commerce Street, Suite 3300

Fort Worth, TX 76102

Attention:      Ronald Cami
Facsimile:      (415) 743-1501
E-mail:      rcami@tpg.com
with a copy (which shall not constitute notice) to:

Ropes & Gray LLP

The Prudential Tower

800 Boylston Street

Boston, MA 02199

Attention:      Alfred O. Rose
     Julie H. Jones
Facsimile:      (617) 951-7050
E-mail:      alfred.rose@ropesgray.com
     julie.jones@ropesgray.com

 

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if to the Oaktree Investor:

 

Oaktree Capital Management, L.P.

333 South Grand Ave., 28th Floor

Los Angeles, CA 90071

Attention:      Kenneth Liang
Facsimile:      (213) 830-6293
E-mail:      kliang@oaktreecapital.com
with a copy (which shall not constitute notice) to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, NY 10022

Attention:      George E.B. Maguire
     Jasmine Ball
Facsimile:      (212) 909-6836
E-mail:      gebmaguire@debevoise.com
     jball@debevoise.com

if to the JHI Investor, to:

 

JHI Holding Limited Partnership

c/o JHI Advisory Inc.

Suite 3260 - 666 Burrard Street

Vancouver, British Columbia

Canada V6C 2X8

Attention:      G. Gail Edwards
Facsimile:      (604) 648-6685
E-mail:      gedwards@jhinvest.com
with a copy (which shall not constitute notice) to:

McCarthy Tétrault LLP

1300 - 777 Dunsmuir Street

Vancouver, British Columbia

Canada V7Y 1K2

Attention:      Cameron Belsher
Facsimile:      (604) 622-5674
E-mail:      cbelsher@mccarthy.ca

 

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Section 4.10 Governing Law . THIS AGREEMENT AND ANY RELATED DISPUTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.

Section 4.11 Jurisdiction . ANY ACTION OR PROCEEDING AGAINST THE PARTIES RELATING IN ANY WAY TO THIS AGREEMENT MAY BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF DELAWARE OR (TO THE EXTENT SUBJECT MATTER JURISDICTION EXISTS THEREFORE) THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, AND THE PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF BOTH SUCH COURTS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. ANY ACTIONS OR PROCEEDINGS TO ENFORCE A JUDGMENT ISSUED BY ONE OF THE FOREGOING COURTS MAY BE ENFORCED IN ANY JURISDICTION.

Section 4.12 Waiver of Jury Trial . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HERETO WAIVES, AND COVENANTS THAT SUCH PARTY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH THE DEALINGS OF ANY SHAREHOLDER OR THE GENERAL PARTNER IN CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 4.12 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH IT IS RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 4.12 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

Section 4.13 Specific Performance . It is hereby agreed and acknowledged that it will be impossible to measure in money the damages that would be suffered if the parties fail to comply with any of the obligations herein imposed on them by this Agreement and that, in the event of any such failure, an aggrieved party will be irreparably damaged and will not have an adequate remedy at law. Any such party shall therefore be entitled (in addition to any other remedy to which such party may be entitled at law or in equity) to injunctive relief, including specific performance, to enforce such obligations, without the posting of any bond, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law.

 

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Section 4.14 Subsequent Acquisition of Shares . Any equity securities of the Company acquired subsequent to the date hereof by a Stockholder shall be subject to the terms and conditions of this Agreement.

[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written.

 

Taylor Morrison Home Corporation
By:  

/s/ Darrell Sherman

Name:     Darrell Sherman
Title:     Vice President, General Counsel and Secretary

[Signature Page to Stockholders Agreement]


TPG TMM HOLDINGS II, L.P.
By:   TPG TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Ronald Cami

  Name:   Ronald Cami
  Title:   Vice President and Secretary

 

[Signature Page to TMHC Stockholders Agreement]


OCM TMM HOLDINGS II, L.P.
By:   OCM TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Derek Smith

  Name:   Derek Smith
  Title:   Authorized Signatory
By:  

/s/ Kenneth Liang

  Name:   Kenneth Liang
  Title:   Authorized Signatory

 

[Signature Page to TMHC Stockholders Agreement]


JHI Holding Limited Partnership, by

its General Partner, JHI Advisory Ltd.

By:  

/s/ Joe S. Houssian

  Name:   Joe S. Houssian
  Title:   Director

 

[Signature Page to TMHC Stockholders Agreement]


Solely with respect to Section 3.1(e):
Sheryl Palmer

/s/ Sheryl Palmer

 

[Signature Page to TMHC Stockholders Agreement]

Exhibit 10.5

EXECUTION VERSION

PUT/CALL AGREEMENT

This PUT/CALL AGREEMENT (this “ Agreement ”) is entered into as of April 9, 2013 by and between Taylor Morrison Home Corporation, a Delaware corporation (the “ Company ”) and each of the entities identified on Schedule 1 hereto (each a “ Seller ” and collectively, the “ Sellers ”).

Background

A. Each Seller (i) owns in aggregate 54,881,984 common units (the “ Common Units ”) of TMM Holdings II Limited Partnership, formed under the laws of the Cayman Islands, and 54,881,984 shares of the Company’s Class B common stock, $0.00001 par value per share (the “ Class B Common Stock ”), and (ii) desires to have the option to require the Company to purchase from such Seller 9,143,461 of such Seller’s Common Units and a corresponding number of the shares of Class B Common Stock (each such Common Unit together with its corresponding share of Class B Common Stock to be purchased, a “ Purchased Interest ” of such Seller) at the price and upon the terms and conditions set forth in this Agreement;

B. The Company desires to have the option to require each Seller to transfer such Seller’s Purchased Interests to the Company at the price and upon the terms and conditions set forth in this Agreement;

C. The Company is conducting an initial public offering (the “ IPO ”) of shares of its Class A Common Stock (the “ Underwritten Shares ”) pursuant to an Underwriting Agreement, dated April 9, 2013 (the “ Underwriting Agreement ”);

D. If the Sellers elect to exercise their Put Option or Additional Put Option (in each case, as defined below) or the Company elects to exercise its Call Option or Additional Call Option (in each case, as defined below), the Company intends to use a portion of the proceeds received from the IPO to complete such purchase; and

E. The board of directors of the Company or a sub-committee thereof has approved the transactions contemplated by this Agreement for purposes of Rule 16b-3 under the Securities Exchange Act of 1934 (the “ Exchange Act ”), which approval is intended to exempt each issuance to a Seller who may be deemed an officer or director of the Company, including a “director by deputization,” from Section 16(b) of the Exchange Act.

THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agree as follows:

Agreement

1. Put/Call .

(a) Seller Option to Put . Each Seller shall have the option to require the Company to purchase from each Seller all but not less than all of such Seller’s Purchased Interests on the terms and conditions described in this Agreement (such Seller’s “ Put Option ”). Each Seller may exercise such Seller’s Put Option one time on or after April 15, 2013, by delivering written notice of its exercise to the Company (a “ Put Option Notice ”). In addition, in the event the underwriters named in the Underwriting Agreement purchase Optional Securities (as defined in the Underwriting Agreement), each Seller shall have the option to require the Company to purchase a number of additional Common Units and a corresponding number of shares of Class B Common Stock in an amount equal to 50% of the number of such Optional Securities purchased on an as converted basis (such Seller’s option, such Seller’s “ Additional Put Option ” and each such Common Unit together with its corresponding share of Class B Common Stock to be purchased, the “ Additional Purchased Interests ” of such Seller). The Sellers may exercise the Additional Put Option in whole and only once with respect to each purchase of Optional Securities by the underwriters on or after the later of April 15, 2013 and the applicable Optional Closing Date (as defined in the Underwriting Agreement), by delivering written notice of its exercise to the Company (the “ Additional Put Option Notice ”). The obligations of the Company to purchase the Purchased Interests from any Seller pursuant to such Seller’s Put Option shall be subject to the following conditions, the satisfaction of which shall be determined by a special committee of the Board of Directors of the Company comprised solely of independent directors (the “ Special Committee ”): (i) the consummation of the IPO prior to the Closing (as defined below) (ii) the representations and warranties in this Agreement of such Seller shall be true and correct in all material respects as of the Closing, (iii) such Seller shall have complied in all material respects with all of the covenants required to be performed by such Seller pursuant to this Agreement on or prior to the Closing and (iv) since the date hereof, there will not have occurred any event, change, fact, condition, circumstance or occurrence that, when considered either individually or in the aggregate together with all other adverse events, changes, facts, conditions, circumstances or occurrences, has had or would reasonably be expected to have a material adverse effect on (A) the business, operations, results of operations, properties, assets or condition (financial or otherwise) of the Company, TMM Holdings II Limited Partnership and its subsidiaries, taken as a whole, or (B)


the ability of the Company and the Sellers to consummate the transactions contemplated by this Agreement (a “ Material Adverse Effect ”). The obligations of the Company to purchase Additional Purchased Interests from any Seller pursuant to such Seller’s Additional Put Option shall be subject to the following conditions, the satisfaction of which shall be determined by the Special Committee: (i) the consummation of the IPO and the applicable sale of the Optional Securities to the underwriters prior to the applicable Additional Closing (as defined below) (ii) the representations and warranties in this Agreement of such Seller shall be true and correct in all material respects as of the applicable Additional Closing, (iii) such Seller shall have complied in all material respects with all of the covenants required to be performed by such Seller pursuant to this Agreement on or prior to the applicable Additional Closing and (iv) since the date hereof, there will not have occurred any Material Adverse Effect. If not previously exercised, the Put Option will expire on June 30, 2013 or at the date and time the Call Option is exercised. If not previously exercised, the Additional Put Option with respect to any Additional Purchased Interests will expire on June 30, 2013 or at the date and time the Additional Call Option is exercised with respect to such Additional Purchased Interests.

(b) Company Option to Call . The Company, as determined by the Special Committee, shall have the option to require each Seller to transfer all but not less than all of such Seller’s Purchased Interests to the Company on the terms and conditions described in this Agreement (the “ Call Option ”). The Company, as determined by the Special Committee, may exercise the Call Option on or after April 15, 2013, by delivering written notice of its exercise to such Seller (a “ Call Option Notice ”). The obligations of each Seller to transfer the Purchased Interests to the Company pursuant to the Call Option shall not be subject to any conditions. If not previously exercised, the Call Option will expire on June 30, 2013 or at the date and time the Put Option is exercised. In addition, the Company, as determined by the Special Committee, shall have the option to require each Seller to transfer such Seller’s Additional Purchased Interests to the Company on the terms and conditions described in this Agreement (the “ Additional Call Option ”). The Company, as determined by the Special Committee, may exercise the Additional Call Option on or after the later of April 15, 2013 and the Optional Closing Date, by delivering written notice of its exercise to each Seller (an “ Additional Call Option Notice ”). The obligations of the Sellers to transfer Additional Purchased Interests to the Company pursuant to the Additional Call Option shall not be subject to any conditions. If not previously exercised, the Additional Call Option with respect to any Additional Purchased Interests will expire on June 30, 2013 or at the date and time the Additional Put Option is exercised in full. The Additional Call Option may not be exercised with respect to any Additional Purchased Interests with respect to which the Additional Put Option has been exercised.

(c) At the Closing and each Additional Closing, subject to the satisfaction of the conditions and to the terms set forth in paragraphs 1(a) and 1(b) above, each Seller, severally and not jointly, hereby agrees to transfer, assign, sell, convey and deliver to the Company 100% of its right, title and interest in and to all of such Seller’s Purchased Interests or the designated number of such Seller’s Additional Purchased Interests, as applicable, and the Company hereby agrees to purchase all of such Seller’s Purchased Interests or the designated number of such Seller’s Additional Purchased Interests, as applicable, at a purchase price per Purchased Interest equal to the per share price at which the Company sells the Underwritten Shares to the underwriters in the IPO (the “ Per Share Purchase Price ”).

(d) The closing of the Put Option (subject to satisfaction or waiver of the applicable conditions precedent) or Call Option and the transfer of the Purchased Interests from the Sellers to the Company (the “ Closing ”) shall take place at the offices of the Company on or after April 15, 2013 promptly after receipt of the Put Option Notice or Call Option Notice, or at such other time and place as may be agreed upon by the Company and the Sellers. The closing of each Additional Put Option (subject to satisfaction or waiver of the applicable conditions precedent) or Additional Call Option and the transfer of the Additional Purchased Interests from the Sellers to the Company (each, an “ Additional Closing ”) shall take place at the offices of the Company from time to time on or after the later of April 15, 2013 and the Optional Closing Date promptly after receipt of the Additional Put Option Notice or Additional Call Option Notice, or at such other time and place as may be agreed upon by the Company and the Sellers. At the Closing and each Additional Closing, each Seller shall deliver to the Company or as instructed by the Company duly executed transfer powers relating to all of such Seller’s Purchased Interests or the designated number of such Seller’s Additional Purchased Interests, as applicable, and the Company agrees to deliver to each Seller against delivery of such transfer powers the Applicable Purchase Price by wire transfer of immediately available funds to the account(s) specified in writing by such Seller. “ Applicable Purchase Price ” means, with respect to any Seller, the product of (x) the Per Share Purchase Price and (y) the aggregate number of Purchased Interests or Additional Purchased Interests, as applicable, being sold by such Seller pursuant to the terms of this Agreement at the Closing or Additional Closing, as applicable.

2. Company Representations . In connection with the transactions contemplated hereby, the Company represents and warrants to the Sellers as of the date hereof that:

(a) The Company is a corporation duly organized and validly existing under the laws of the State of Delaware. The Company has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby.

 

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(b) This Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and binding agreement of the Company enforceable in accordance with its terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws affecting enforcement of creditors’ rights or by general equitable principles.

(c) The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions herein contemplated will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) violate any provision of the certificate of incorporation or by-laws, or other organizational documents, as applicable, of the Company or its subsidiaries or (iii) violate any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties; in the case of each such clause, after giving effect to any consents, approvals, authorizations, orders, registrations, qualifications, waivers and amendments as will have been obtained or made as of the date of this Agreement, except, in the case of clauses (i) and (iii), as would not reasonably be expected to have a Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the execution, delivery and performance by the Company of its obligations under this Agreement, including the consummation by the Company of the transactions contemplated by this Agreement, except where the failure to obtain or make any such consent, approval, authorization, order, registration or qualification would not reasonably be expected to have a Material Adverse Effect.

3. Representations of the Sellers . In connection with the transactions contemplated hereby, each of the Sellers severally and not jointly represents and warrants to the Company as of the date hereof and covenants and agrees that:

(a) Such Seller is duly organized and existing under the laws of its jurisdiction of organization.

(b) All consents, approvals, authorizations and orders necessary for the execution and delivery by such Seller of this Agreement and for the sale and delivery of the Purchased Interests and Additional Purchased Interests to be sold by such Seller hereunder, have been obtained; and such Seller has authority to enter into this Agreement, and as of the applicable Closing or Additional Closing will have, full right, power and authority to sell, assign, transfer and deliver the Purchased Interests or Additional Purchased Interests, as applicable, to be sold by such Seller hereunder at such Closing or Additional Closing, except for such consents, approvals, authorizations and orders as would not impair in any material respect the consummation of the Sellers’ obligations hereunder.

(c) This Agreement has been duly authorized, executed and delivered by such Seller and constitutes a valid and binding agreement of such Seller, enforceable in accordance with its terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws affecting enforcement of creditors’ rights or by general equitable principles.

(d) The sale of the Purchased Interests and Additional Purchased Interests to be sold by such Seller hereunder and the compliance by such Seller with all of the provisions of this Agreement and the consummation of the transactions contemplated herein (i) does not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any statute, indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which such Seller is a party or by which such Seller is bound or to which any of the property or assets of such Seller is subject as of the date hereof and as of the Closing or the applicable Additional Closing, (ii) nor will such action result in any violation of the provisions of (x) any organizational or similar documents pursuant to which such Seller was formed (to the extent such Seller is not an individual) or (y) any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over such Seller or the property of such Seller; except in the case of clause (i) or clause (ii)(y), for such conflicts, breaches, violations or defaults as would not impair in any material respect the consummation of such Seller’s obligations hereunder.

(e) As of the date hereof and immediately prior to the delivery of the Purchased Interests to the Company at the Closing or the delivery of Additional Purchased Interests to the Company at the applicable Additional Closing, such Seller holds good and valid title to the Purchased Interests or Additional Purchased Interests to be sold at the Closing or such Additional Closing, as applicable, or a securities entitlement in respect thereof, and holds, and will hold until delivered to the Company, such Purchased Interests or Additional Purchased Interests, as applicable, free and clear of all liens, encumbrances, equities or claims; and, upon delivery of such Purchased Interests and Additional Purchased Interests, as applicable, (including by crediting to a securities account of the Company) and payment therefor pursuant hereto, assuming that the Company has no notice of any adverse claims within the meaning of Section 8-105 of the New York Uniform Commercial Code as in effect in the State of New York from time to time (the “UCC”), the Company will acquire good and valid title to such Purchased Interests and Additional Purchased Interests, as applicable, free and clear of all liens, encumbrances, equities or claims, as well as a valid security entitlement (within the meaning of Section 8-102(a)(17) of the UCC) to such Purchased Interests or Additional Purchased Interests purchased by the Company, and no action (whether framed in conversion, replevin, constructive trust, equitable lien or other theory) based on an adverse claim (within the meaning of Section 8-105 of the UCC) to such security entitlement may be asserted against the Company.

(f) Such Seller (either alone or together with its advisors) has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of transfer of the Purchased Interests and the Additional Purchased Interests. Such Seller has had the opportunity to ask questions and receive answers concerning the terms and conditions of the transfer of the Purchased Interests and Additional Purchased Interests and has had full access to such other information concerning the Purchased Interests, Additional Purchased Interests and the Company as it has requested. Such Seller has received all information that it believes is necessary or appropriate in connection with the transfer of the Purchased Interests and Additional Purchased Interests. Such Seller is an informed and sophisticated party and has engaged, to the extent such Seller deems appropriate, expert advisors experienced in the evaluation of transactions of the type contemplated hereby. Such Seller acknowledges that such Seller has not relied upon any express or implied representations or warranties of any nature made by or on behalf of the Company, whether or not any such representations, warranties or statements were made in writing or orally, except as expressly set forth for the benefit of such Seller in this Agreement.

 

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4. Termination . This Agreement shall automatically terminate and be of no further force and effect (a) with respect to the Purchased Interests, in the event that neither the Put Option nor the Call Option has been exercised as set forth in Sections 1(a) or 1(b) on or prior to June 30, 2013; and (b) with respect to any Additional Purchased Interests, in the event that neither the Additional Put Option nor the Additional Call Option applicable to such Additional Purchased Interests has been exercised as set forth in Sections 1(a) or 1(b) on or prior to June 30, 2013.

5. Notices . All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given when delivered personally, mailed by certified or registered mail, return receipt requested and postage prepaid, or sent via a nationally recognized overnight courier, or sent via facsimile to the recipient. Such notices, demands and other communications will be sent to the address indicated below:

To the Sellers:

At the address listed for each Seller on Schedule 1 hereto.

To the Company:

 

Taylor Morrison Home Corporation
4900 North Scottsdale Road, Suite 2000
Scottsdale, AZ 85251
Attention:      Darrell Sherman,
     Vice President and General Counsel
Facsimile:      (866) 390-2612
E-mail:      dsherman@taylormorrison.com
with a copy (which shall not constitute notice) to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064
Attention:      John C. Kennedy
     Lawrence G. Wee
Facsimile:      (212) 757-3990
E-mail:      jkennedy@paulweiss.com
     lwee@paulweiss.com

or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party.

6. Miscellaneous .

(a) Survival of Representations and Warranties . All representations and warranties and covenants contained herein or made in writing by any party in connection herewith shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

 

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(b) Severability . Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal, or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality, or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed, and enforced in such jurisdiction as if such invalid, illegal, or unenforceable provision had never been contained herein.

(c) Complete Agreement . This Agreement and any other agreements ancillary thereto and executed and delivered on the date hereof embody the complete agreement and understanding between the parties and supersede and preempt any prior understandings, agreements, or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.

(d) Counterparts . This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

(e) Assignment; Successors and Assigns . Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, in whole or in part, by any of the parties without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement shall bind and inure to the benefit of and be enforceable by the Sellers and the Company and their respective successors and permitted assigns. Any purported assignment not permitted under this paragraph shall be null and void.

(f) No Third Party Beneficiaries or Other Rights . This Agreement is for the sole benefit of the parties and their successors and permitted assigns and nothing herein express or implied shall give or shall be construed to confer any legal or equitable rights or remedies to any person other than the parties to this Agreement and such successors and permitted assigns.

(g) Governing Law; Jurisdiction . This Agreement and all disputes arising out of or related to this Agreement (whether in contract, tort or otherwise) will be governed by and construed in accordance with the laws of the State of Delaware. EACH OF THE PARTIES TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT. Each of the parties (i) irrevocably submits to the personal jurisdiction of any state or federal court sitting in Wilmington, Delaware, as well as to the jurisdiction of all courts to which an appeal may be taken from such courts, in any suit, action or proceeding relating to or arising out of, under or in connection with this Agreement, (ii) agrees that all claims in respect of such suit, action or proceeding, whether arising under contract, tort or otherwise, shall be brought, heard and determined exclusively in the Delaware Court of Chancery (provided that, in the event that subject matter jurisdiction is unavailable in that court, then all such claims shall be brought, heard and determined exclusively in any other state or federal court sitting in Wilmington, Delaware), (iii) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from such court, and (iv) agrees not to bring any action or proceeding relating to or arising out of, under or in connection with this Agreement or the Company’s business or affairs in any other court, tribunal, forum or proceeding. Each of the parties waives any defense of inconvenient forum to the maintenance of any action or proceeding brought in accordance with this paragraph. Each of the parties agrees that service of any process, summons, notice or document by U.S. registered mail to its address set forth herein shall be effective service of process for any action, suit or proceeding brought against it in accordance with this paragraph, provided that nothing in the foregoing sentence shall affect the right of any party to serve legal process in any other manner permitted by law.

(h) Mutuality of Drafting . The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of the Agreement.

(i) Remedies . The parties hereto agree and acknowledge that money damages will not be an adequate remedy for any breach of the provisions of this Agreement, that any breach of the provisions of this Agreement shall cause the other parties irreparable harm, and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or deposit) for specific performance or other injunctive relief in order to enforce, or prevent any violations of, the provisions of this Agreement.

(j) Amendment and Waiver . The provisions of this Agreement may be amended, modified or waived only with the prior written consent of the Company and each of the Sellers; provided , that this Agreement may not be amended in a manner that is adverse to any Seller without such Seller’s prior written consent. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement, nor shall any waiver constitute a continuing waiver. Moreover, no failure by any party to insist upon strict performance of any of the provisions of this Agreement or to exercise any right or remedy arising out of a breach thereof shall constitute a waiver of any other provisions or any other breaches of this Agreement.

 

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(k) Further Assurances . Each of the Company and the Sellers shall execute and deliver such additional documents and instruments and shall take such further action as may be necessary or appropriate to effectuate fully the provisions of this Agreement.

[Signatures appear on following page.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Put/Call Agreement as of the date first written above.

 

Company:
Taylor Morrison Home Corporation
By:  

/s/ Darrell Sherman

  Name:   Darrell Sherman
  Title:   Vice President, General Counsel and Secretary

 

[Signature Page to Put/Call Agreement]


Sellers:
TPG TMM HOLDINGS II, L.P.
By:   TPG TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Ronald Cami

  Name:   Ronald Cami
  Title:   Vice President and Secretary

 

[Signature Page to Put/Call Agreement]


OCM TMM HOLDINGS II, L.P.
By:   OCM TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Derek Smith

  Name:   Derek Smith
  Title:   Authorized Signatory
By:  

/s/ Kenneth Liang

  Name:   Kenneth Liang
  Title:   Authorized Signatory

 

[Signature Page to Put/Call Agreement]


Sellers:
JHI HOLDINGS LIMITED PARTNERSHIP
By: JHI Advisory Ltd., its general partner
By:  

/s/ Joe S. Houssian

Name:   Joe S. Houssian
Title:   Director

 

[Signature Page to Put/Call Agreement]


Schedule 1

 

Entity

  

Address

TPG TMM HOLDINGS II, L.P.    TPG Global, LLC
   301 Commerce Street, Suite 3300
   Fort Worth, TX 76102
   Attention: Ronald Cami
   Facsimile: (415) 743-1501
   E-mail: rcami@tpg.com
   with a copy (which shall not constitute notice) to:
   Ropes & Gray LLP
   The Prudential Tower
   800 Boylston Street
   Boston, Massachusetts 02199
   Attention: Alfred O. Rose
  

   Julie H. Jones

   Facsimile: (617) 951-7050
   E-mail: alfred.rose@ropesgray.com
  

    julie.jones@ropesgray.com

OCM TMM HOLDINGS II, L.P.    Oaktree Capital Management, L.P.
   333 South Grand Ave., 28th Floor
   Los Angeles, CA 90071
   Attention: Kenneth Liang
   Facsimile: (213) 830-6293
   E-mail: kliang@oaktreecapital.com
   with a copy (which shall not constitute notice) to:
   Debevoise & Plimpton LLP
   919 Third Avenue
   New York, NY 10022
   Attention: George E.B. Maguire
  

   Jasmine Ball

   Facsimile: (212) 909-6836
   E-mail: gebmaguire@debevoise.com
  

    jball@debevoise.com

[Schedule 1 to Put/Call Agreement]

Exhibit 10.6

EXECUTION VERSION

REORGANIZATION AGREEMENT

This Reorganization Agreement (this “ Agreement ”), dated as of April 9, 2013, is entered into by and among Taylor Morrison Home Corporation, a Delaware corporation (“ TMHC ”), TMM Holdings II Limited Partnership, a Cayman Islands exempted limited partnership (“ New TMM ”), TMM Holdings II GP, ULC, a British Columbia unlimited liability company (“ New TMM GP ”), TMM Holdings Limited Partnership, a British Columbia limited partnership (the “ Partnership ”), TMM Holdings (G.P.) Inc., a British Columbia corporation (“ TMM GP ”), Taylor Morrison Holdings, Inc., a Delaware corporation (“ TMHI ”), Monarch Communities Inc., a British Columbia corporation (“ Monarch ”), TPG TMM Holdings II, L.P., a Cayman Islands exempted limited partnership (“ TPG Cayman ”), TPG TMM Holdings II GP, ULC, a British Columbia unlimited liability company (“ TPG Cayman GP ”), OCM TMM Holdings II, L.P., a Cayman Islands exempted limited partnership (“ Oaktree Cayman ”), OCM TMM Holdings II GP, ULC, a British Columbia unlimited liability company (“ Oaktree Cayman GP ”), TPG TMM Holdings II LP, Inc., a British Columbia corporation (the “ TPG Initial Canadian LP ”), OCM TMM Holdings II LP, Inc., a British Columbia corporation (the “ Oaktree Initial Canadian LP ”), Builders Holdings International, L.P., a Barbados limited partnership (“ Builders ”), Toeis, L.P., a Barbados limited partnership (“ Toeis ”), TPG Advisors VI-AIV, Inc., a Cayman Islands exempt company (“ TPG Advisors ”), Oaktree TM Holdings TP, SRL, a Barbados Society with Restricted Liability (“ Oaktree TM ”), Oaktree TM Holdings CTB, LTD, a Cayman Islands exempt company (“ Oaktree CTB ”), JHI Holding Limited Partnership, a British Columbia limited partnership (“ JHI Holding ”), JHI Management Limited Partnership, a British Columbia limited partnership (“ JHI Management ”), MJs Investors, LLC, a Nevada limited liability company (the “ JHI Redeemed Party ”) and the individuals listed on the signature pages hereto under the heading “Management Parties” (each, a “ Management Party ”). The parties hereto are collectively referred to herein as the “ Parties ”.

WHEREAS, the Board of Directors of TMHC (the “ Board ”) has determined to effect an underwritten initial public offering (the “ IPO ”) of shares of TMHC’s Class A Common Stock (as defined below) on the terms and subject to the conditions contained in the Underwriting Agreement (as defined below);

WHEREAS, the Parties desire to effect the Reorganization Transactions (as defined below) in contemplation of the IPO; and

WHEREAS, in connection with the consummation of the Reorganization Transactions and the IPO, the applicable Parties hereto intend to enter into the Reorganization Documents (as defined below).

NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1. Definitions .

 

  a. Certain Defined Terms. As used herein, the following terms shall have the following meanings:

 

  i. Class A Common Stock ” shall mean Class A Common Stock, par value $0.00001 per share, of TMHC.


  ii. Class B Common Stock ” shall mean Class B Common Stock, par value $0.00001 per share, of TMHC.

 

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

 

  iv. IPO Closing ” means the initial closing of the sale of the shares of Class A Common Stock in the IPO (without giving effect to any exercise of the underwriters’ over-allotment option).

 

  v. IPO Effective Time ” means the date and time on which the Registration Statement becomes effective.

 

  vi. JHI Parties ” means JHI Holding and JHI Management.

 

  vii. Oaktree Parties ” means Oaktree TM and Oaktree Cayman.

 

  viii. Paired Interest ” means one vested common unit of New TMM and one share of Class B Common Stock.

 

  ix. Performance-based M-O Unit ” means any Class M-O Units of the Partnership or Oaktree Cayman, as applicable, which vest in connection with the satisfaction of certain performance targets associated with the cash returns of Oaktree TM and certain of its affiliates.

 

  x. Performance-based M-O2 Units ” means any Class M-O2 Units of the Partnership or Oaktree Cayman, as applicable, which vests in connection with the satisfaction of certain performance targets associated with the cash returns of Oaktree TM and certain of its affiliates.

 

  xi. Performance-based M-T Units ” means any Class M-T Units of the Partnership or TPG Cayman, as applicable, which vest in connection with the satisfaction of certain performance targets associated with the cash returns of Builders, Toeis and certain of their respective affiliates.

 

  xii. Performance-based M-T2 Units ” means any Class M-T2 Units of the Partnership or TPG Cayman, as applicable, which vest in connection with the satisfaction of certain performance targets associated with the cash returns of Builders, Toeis and certain of their respective affiliates.

 

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  xiii. Person ” means an individual, a partnership, a joint venture, an association, a corporation, a trust, an estate, a limited liability company, a limited liability partnership, an unincorporated entity of any kind, a governmental entity or any other legal entity.

 

  xiv. Pricing ” means such date and time as the Board or the pricing committee thereof determines, such date and time to be no later than immediately prior to the IPO Effective Time.

 

  xv. Registration Statement ” means the Exchange Act registration statement filed by TMHC on Form 8-A with the SEC to register the Class A Common Stock.

 

  xvi. Reorganization Documents ” means each of the documents attached as an exhibit hereto and all other agreements and documents entered into in connection with the Reorganization Transactions.

 

  xvii. SEC ” means the Securities and Exchange Commission.

 

  xviii. Securities Act ” means the Securities Act of 1933, as amended.

 

  xix. TPG Parties ” means Builders, Toeis and TPG Cayman.

 

  xx. Underwriting Agreement ” means the underwriting agreement, dated as of the day prior to the IPO Effective Time, by and among TMHC and the underwriters of the IPO.

 

  b. Other Definitional Provisions.

 

  i. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article and Section references are to this Agreement unless otherwise specified.

 

  ii. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

2. Reorganization . Subject to the terms and conditions hereinafter set forth, and on the basis of and in reliance upon the representations, warranties, covenants and agreements set forth herein, the parties hereto shall take the actions described in this Section 2 (collectively the “ Reorganization Transactions ”):

 

  a. Promptly following the Pricing and prior to the IPO Effective Time, the applicable Parties hereto shall take the actions set forth below (or cause such actions to take place):

 

  i. JHI Redemption . Each of JHI Holding and JHI Management shall, and each hereby severally agrees to, redeem the limited partnership interests in JHI Holding and JHI Management, respectively, that are owned by the JHI Redeemed Party in exchange for the distribution to the JHI Redeemed Party of its proportionate share of Class A-O Units, Class A-T Units, Class J1-O Units, Class J2-O Units, Class J3-O Units, Class J1-T Units, Class J2-T Units and Class J3-T Units of the Partnership (collectively, the “ JHI Redemption ”), and the JHI Redeemed Party shall retire as a limited partner of each of JHI Holding and JHI Management and cease to be a partner of each of JHI Holding and JHI Management immediately upon the JHI Redemption.

 

3


  ii. TMM GP Conversion . Immediately following the JHI Redemption, TPG Advisors, Oaktree CTB and the JHI Parties shall, and each hereby severally agrees to, convert TMM GP to a British Columbia unlimited liability company.

 

  iii. TPG Cayman and Oaktree Cayman Contributions .

 

  1. Immediately following the JHI Redemption, (A) JHI Holding shall, and hereby agrees to, contribute 2,289,606 Class A-O Units of the Partnership held by it to Oaktree Cayman in exchange for an equal number of Class A-O Units of Oaktree Cayman and (B) simultaneous with the transfers described in clause (A) above, JHI Management shall, and hereby agrees to, contribute each Class J1-O Unit, Class J2-O Unit, and Class J3-O Unit of the Partnership held by it to Oaktree Cayman in exchange for an equal number of Class J1-O Units, Class J2-O Units and Class J3-O Units of Oaktree Cayman (the contributions referenced in clauses (A) and (B) above, collectively the “ JHI O Unit Contribution ”). Each JHI Party will become admitted as a limited partner of Oaktree Cayman upon such transfer; the Partnership Agreement of Oaktree Cayman will reflect the contributions by the JHI Parties and their admission as limited partners; and each JHI Party and each member of Oaktree Cayman shall, and hereby severally agrees to, file the tax election referred to in Section 5(c) of this Agreement in respect of such contribution.

 

  2.

Immediately following the First Initial New TMM Contribution (as defined below), each Management Party who is at such time a resident of Canada for purposes of the Income Tax Act (Canada) or by virtue of an applicable treaty with Canada (a “ Canadian Management Party ”) shall, and hereby agrees to, contribute all of his Class A-O

 

4


  Units and Class A-O2 Units to Oaktree Cayman in exchange for an equal number of Class A-O Units and Class A-O2 Units of Oaktree Cayman (the “ Canadian Management O Unit Contribution ”) and each Canadian Management Party and each member of Oaktree Cayman shall, and each hereby severally agrees to, file the tax election referred to in Section 5(c) of this Agreement in respect of such contribution.

 

  3. Immediately following the JHI Redemption, and simultaneously with the JHI O Unit Contribution, (A) JHI Holding shall, and hereby agrees to, contribute 2,289,606 Class A-T Units of the Partnership held by it to TPG Cayman in exchange for an equal number of Class A-T Units of TPG Cayman and (B) JHI Management shall, and hereby agrees to, contribute each Class J1-T Unit, Class J2- T Unit, and Class J3-T Unit of the Partnership held by it to TPG Cayman in exchange for an equal number of Class J1- T Units, Class J2-T Units and Class J3-T Units of TPG Cayman (the contributions referenced in clauses (A) and (B) above, collectively the “ JHI T Unit Contribution ”). Each JHI Party will become admitted as a limited partner of TPG Cayman upon the transfer; the Partnership Agreement of TPG Cayman will reflect the contributions by the JHI Parties and their admission as limited partners; and each JHI Party and each member of TPG Cayman shall, and hereby severally agrees to, file the tax election referred to in Section 5(c) of this Agreement in respect of such contribution.

 

  4. Immediately following the First Initial New TMM Contribution (as defined below), each Canadian Management Party shall, and hereby agrees to, contribute contemporaneously with the Canadian Management O Unit Contribution all of his Class A-T Units and Class A-T2 Units to TPG Cayman in exchange for an equal number of Class A-T Units and Class A-T2 Units of TPG Cayman (the “ Canadian Management T Unit Contribution ”) and each Canadian Management Party and each member of TPG Cayman shall, and each hereby severally agrees to file the tax election referred to in Section 5(c) of this Agreement in respect of such contribution.

 

  iv. New TMM Contributions .

 

  1.

Immediately following the JHI O Unit Contribution and the JHI T Unit Contribution, (A) Oaktree Cayman and TPG

 

5


  Cayman shall, and each hereby severally agrees to, transfer each Class A-O Unit, Class J1-O Unit, Class J2-O Unit, Class J3-O Unit, Class A-T Unit, Class J1-T Unit, Class J2- T Unit, and Class J3-T Unit of the Partnership that were received in the JHI O Unit Contribution and the JHI T Unit Contribution to New TMM in exchange for a number of common units of New TMM calculated in accordance with Section 4 of this Agreement and (B) simultaneous with the transfers described in clause (A) above, JHI Holding shall, and hereby agrees to, transfer 4,460,394 Class A-T Units, and 4,460,394 Class A-O Units to New TMM in exchange for 1,208,897 common units of New TMM (the contributions referenced in clauses (A) and (B) above, collectively the “ First Initial New TMM Contribution ”). Each of Oaktree Cayman, TPG Cayman and JHI Holding will become admitted as a limited partner of New TMM upon the transfers described above; the Partnership Agreement of New TMM will reflect the contributions by Oaktree Cayman, TPG Cayman and JHI Holding and their admission as limited partners; and each of Oaktree Cayman, TPG Cayman and JHI Holding, respectively, and each of the members of New TMM shall, and each hereby severally agrees to, file the tax election referred to in Section 5(c) of this Agreement in respect of such transfers.

 

  2. Immediately following the Canadian Management O Unit Contribution and the Canadian Management T Unit Contribution, Oaktree Cayman and TPG Cayman shall, and each hereby severally agrees to, transfer each Class A-O Unit, Class A-O2 Unit, Class A-T Unit and Class A-T2 Unit, in each case that were received in the Canadian Management O Unit Contribution and the Canadian Management T Unit Contribution, to New TMM in exchange for a number of common units of New TMM calculated in accordance with Section 4 of this Agreement (the “ Second Initial New TMM Contribution ” and together with the First Initial New TMM Contribution the “ Initial New TMM Contributions ”). Each of Oaktree Cayman and TPG Cayman, respectively, and each of the members of New TMM shall, and each hereby severally agrees to, file the tax election referred to in Section 5(c) of this Agreement in respect of such transfers.

 

  3.

In conjunction with the Initial New TMM Contributions, Oaktree Cayman, TPG Cayman and JHI Holding shall, and each hereby severally agrees to, enter into the Amended and Restated Agreement of Limited Partnership of New

 

6


  TMM, substantially in the form attached hereto as Exhibit A , and the TPG Initial Canadian LP shall withdraw as the initial limited partner.

 

  4. Immediately following the Initial New TMM Contributions, Builders, Toeis, Oaktree TM, the Management Parties who are not residents of Canada under the Income Tax Act (Canada) or by virtue of an applicable treaty with Canada (the “ Non-Canadian Management Parties ”), and the JHI Redeemed Party, shall, and each hereby severally agrees to, transfer each Class A-O Unit, Class A-O2 Unit, Class A-T Unit, Class A-T2 Unit, Class M-O Unit, Class M-O2 Unit, Class M-T Unit, Class M-T2 Unit, Class J1-O Unit, Class J2-O Unit, Class J3-O Unit, Class J1-T Unit, Class J2-T Unit, and Class J3-T Unit of the Partnership, as applicable, held by such Party, to New TMM in exchange for a number of common units of New TMM calculated in accordance with Section 4 of this Agreement (the “ Second New TMM Contribution ”). Simultaneously with the Second New TMM Contribution, TPG Advisors, Oaktree CTB and the JHI Parties shall, and each hereby severally agrees to, transfer all of their respective equity interests in TMM GP to New TMM held by it in exchange for C$0.00001.

 

  5.

Immediately following the Second New TMM Contribution and simultaneously with the TPG Cayman Contribution (as defined below), (A) (i) Oaktree TM shall, and hereby agrees to, contribute all of its common units of New TMM, and (ii) the Non-Canadian Management Parties shall, and each hereby severally agrees to, contribute one-half of the total number of common units of New TMM that were received by such Party in the Second New TMM Contribution in exchange for such Party’s Class A-O Units, Class A-O2 Units, Performance-based M-O Units, and Performance-based M-O2 Units of the Partnership, as applicable, to Oaktree Cayman, in exchange for the same respective numbers of Class A-O Units, Class A-O2 Units, Performance-based M-O Units and Performance-based M-O2 Units of Oaktree Cayman as the respective numbers of Class A-O Units, Class A-O2 Units, Performance-based M- O Units and Performance-based M-O2 Units of the Partnership that such Party transferred to New TMM as part of the Second New TMM Contribution, and (B) the JHI Redeemed Party shall, and hereby agrees to contribute 101,790 common units of New TMM to Oaktree Cayman in exchange for 750,000 Class A-O Units of Oaktree

 

7


  Cayman, and the same respective numbers of Class J1-O Units, Class J2-O Units, and Class J3-O Units of Oaktree Cayman as the respective number of Class J1-O Units, Class J2-O Units and Class J3-O Units of the Partnership that the JHI Redeemed Party transferred to New TMM as part of the Second New TMM Contribution (the contributions referenced in clauses (A) and (B) above, collectively the “ Oaktree Cayman Contribution ”). Simultaneously with the Oaktree Cayman Contribution, Oaktree TM, the Non-Canadian Management Parties (that are transferring common units of New TMM) and the JHI Redeemed Party shall, and each hereby severally agrees to, enter into the Amended and Restated Agreement of Limited Partnership of Oaktree Cayman, substantially in the form agreed upon by the parties thereto, and the Oaktree Initial Canadian LP shall withdraw as the initial limited partner.

 

  6.

Immediately following the Second New TMM Contribution and simultaneously with the Oaktree Cayman Contribution, (A) (i) Builders and Toeis shall, and each hereby severally agrees to, contribute all of their common units of New TMM, and (ii) the Non-Canadian Management Parties shall, and each hereby severally agrees to, contribute one-half of the total number of common units of New TMM that were received by such Party in the Second New TMM Contribution in exchange for such Party’s Class A-T Units, Class A-T2 Units, Performance-based M-T Units, and Performance-based M-T2 Units of the Partnership, as applicable, to TPG Cayman, in exchange for the same respective numbers of Class A-T Units, Class A-T2 Units, Performance-based M-T Units and Performance-based M-T2 Units of TPG Cayman as the respective numbers of Class A-T Units, Class A-T2 Units, Performance-based M-T Units and Performance-based M-T2 Units of the Partnership that such Party transferred to New TMM as part of the Second New TMM Contribution, and (B) the JHI Redeemed Party shall, and hereby agrees to contribute 101,790 common units of New TMM to TPG Cayman, in exchange for 750,000 Class A-T Units of TPG Cayman and the same respective numbers of Class J1-T Units, Class J2-T Units, and Class J3-T Units of TPG Cayman as the respective number of Class J1-T Units, Class J2-T Units and Class J3-T Units of the Partnership that the JHI Redeemed Party transferred to New TMM as part of the Second New TMM Contribution (the contributions referenced in clauses (A) and (B) above, collectively the “ TPG Cayman Contribution ”). Builders, Toeis, the

 

8


  Non-Canadian Management Parties (that are transferring common units of New TMM to TPG Cayman as part of the TPG Cayman Contribution) and the JHI Redeemed Party shall, and each hereby severally agrees to, enter into the Amended and Restated Agreement of Limited Partnership of TPG Cayman, substantially in the form agreed upon by the parties thereto, substantially in the form agreed upon by the parties thereto, and the TPG Initial Canadian LP shall withdraw as the initial limited partner.

 

  v. Adoption of Amended and Restated Charter and Bylaws of TMHC; Issuance of Class B Common Stock

 

  1. Prior to the IPO Effective Time, the Board will adopt the Amended and Restated Certificate of Incorporation of TMHC (the “ TMHC Charter ”) and the Amended and Restated By-laws of TMHC. TMHC will file the TMHC Charter with the Secretary of State of the state of Delaware.

 

  2. Prior to the IPO Effective Time, TMHC will redeem all outstanding shares of capital stock of the Company held by Builders, Toeis and Oaktree TM in exchange for $.00001 per share.

 

  3. Immediately following the Oaktree Cayman Contribution and the TPG Cayman Contribution, TMHC will issue to each holder of common units of New TMM (other than TMHC and New TMM GP) a number of shares of Class B Common Stock equal to the number of common units of New TMM then held by such holder in exchange for $0.00001 per share.

 

  b. At approximately 6:00 a.m. (EST) on the business day following Pricing (and following all of the actions set forth in Section 2(a) and Section 2(b) of this Agreement), TMHC will file the Registration Statement with the SEC.

 

  c. Subject to the satisfaction or waiver of all of the closing conditions enumerated in the Underwriting Agreement, the IPO Closing will take place at approximately 10:00am EST on April 12, 2013.

 

  d. Following the IPO Closing, the following transactions will take place:

 

  i.

Immediately following the IPO Closing, pursuant to a New TMM common unit subscription agreement, TMHC shall, and hereby agrees to, acquire common units of New TMM from New TMM at a price per common unit equal to the price per share paid in the IPO by the underwriters to TMHC for shares of Class A Common

 

9


  Stock (the “ IPO Price Per Share ”). The aggregate number of common units of New TMM to be acquired pursuant to this Section 2(e)(i) by TMHC shall equal the quotient of (a) $[ ] 1 divided by (b) the IPO Price Per Share. The aggregate purchase price for such common units of $[ ] will be paid in cash by TMHC to, or at the direction of, New TMM immediately following the IPO Closing.

 

  ii.

Immediately following the IPO Closing, pursuant to a New TMM common unit subscription agreement, New TMM shall, and hereby agrees to, issue a number of common units of New TMM to TMHC equal to the quotient of (a) [ ] 2 divided by (b) the IPO Price Per Share. The consideration for the issuance of such common units will be TMHC’s agreement to bear the $[ ] of IPO offering expenses.

 

  iii. Immediately following the IPO Closing, pursuant to separate purchase agreements, each Non-Canadian Management Party that intends to sell Paired Interests to TMHC will sell such Paired Interests to TMHC at a price per Paired Interest equal to the IPO Price Per Share.

 

  iv.

Following the IPO Closing, pursuant to, and subject to the conditions in, the JHI Put/Call Agreement (as defined below) (the “ JHI Put/Call ”, (i) JHI Holding may require TMHC to purchase Paired Interests from JHI Holding at a price per Paired Interest equal to the IPO Price Per Share and (ii) TMHC may require JHI Holding to transfer Paired Interests to TMHC at a price per Paired Interest equal to the IPO Price Per Share, as set forth in the JHI Put/Call Agreement. The aggregate number of Paired Interests to be subject to the JHI Put/Call pursuant to this Section 2(e)(iv) with respect to JHI Holding is expected to equal to the quotient of (a) [ ] 3 divided by (b) the IPO Price Per Share. The JHI Put/Call shall not be exercised earlier than April 15, 2013.

 

  v. Following the IPO Closing, pursuant to, and subject to the conditions in, the Put/Call Agreement (as defined below) (the “ Put/Call ”), (i) Oaktree Cayman and TPG Cayman may require TMHC to purchase Paired Interests from TPG Cayman and Oaktree Cayman at a price per Paired Interest equal to the IPO Price Per Share and (ii) TMHC may require Oaktree Cayman and

 

1   To equal aggregate purchase price paid by underwriters to TMHC in the IPO for shares of Class A Common Stock less IPO offering expenses borne by TMHC less the aggregate amount to be used to complete purchase of common units/shares of Class B Common Stock from the sponsors and management in the secondary component of the IPO.
2   To equal the aggregate amount of IPO offering expenses borne by TMHC (as agreed in writing by TMHC, Oaktree Cayman and TPG Cayman).
3   To equal aggregate amount expected to be paid to JHI Holding.

 

10


  TPG Cayman to transfer Paired Interests to TMHC at a price per Paired Interest equal to the IPO Price Per Share, as set forth in the Put/Call Agreement. The aggregate number of Paired Interests to be subject to the Put/Call pursuant to this Section 2(e)(v) with respect to each of TPG Cayman and Oaktree Cayman is expected to equal the quotient of (a) $[ ] 4 divided by (b) the IPO Price Per Share. The Put/Call shall not be exercised earlier than April 15, 2013.

 

  vi. Following the IPO Closing, if the underwriters elect to exercise their over-allotment option on the terms and subject to the conditions contained in the Underwriting Agreement entered into in connection with the IPO (the “ Over-Allotment Option ”), (i) Oaktree Cayman and TPG Cayman may require TMHC to purchase Paired Interests from TPG Cayman and Oaktree Cayman at a price per Paired Interest equal to the IPO Price Per Share and (ii) TMHC may require Oaktree Cayman and TPG Cayman to transfer common units of New TMM and shares of Class B Common Stock to TMHC at a price per Paired Interest equal to the IPO Price Per Share, in each case, pursuant to, and subject to the conditions in, the Put/Call Agreement (the “ Over-Allotment Put/Call ”). The aggregate number of Paired Interests to be subject to the Over-Allotment Put/Call pursuant to this Section 2(e)(vi) with respect to each of TPG Cayman and Oaktree Cayman shall equal the quotient of (a) one-half of the aggregate purchase price paid by the underwriters to TMHC for shares of Class A Common Stock in the Over-Allotment Option divided by (b) the IPO Price Per Share. The Over-Allotment Put/Call shall not be exercised earlier than April 15, 2013.

3. Execution of Documents .

 

  a. TMHC, TPG Cayman, Oaktree Cayman and JHI Holding shall, and each hereby agrees to, enter into the Stockholders Agreement of TMHC, substantially in the form attached hereto as Exhibit B (the “ TMHC Stockholders Agreement ”), promptly following the consummation of the Reorganization Transactions and prior to the IPO Effective Time.

 

  b. TMHC, TMHI, TPG Cayman, Oaktree Cayman and JHI Holding shall, and each hereby agrees to, enter into the Governance Agreement of TMHI (the “ TMHI Governance Agreement ”), substantially in the form attached hereto as Exhibit C , promptly following the consummation of the Reorganization Transactions and prior to the IPO Effective Time.

 

4   To equal aggregate amount expected to be paid to TPG Cayman or Oaktree Cayman.

 

11


  c. TMHC, Monarch, TPG Cayman, Oaktree Cayman and JHI Holding shall, and each hereby agrees to, enter into the Governance Agreement of Monarch (the “ Monarch Governance Agreement ”), substantially in the form attached hereto as Exhibit D , promptly following the consummation of the Reorganization Transactions and prior to the IPO Effective Time.

 

  d. TMHC, TPG Cayman, Oaktree Cayman and the Managers shall, and each hereby agrees to, enter into the Registration Rights Agreement of TMHC (the “ TMHC Registration Rights Agreement ”), substantially in the form attached hereto as Exhibit E , promptly following the consummation of the Reorganization Transactions and prior to the IPO Effective Time.

 

  e. TMHC, New TMM and the holders of common units of New TMM and Class B Common Stock party thereto, shall, and each hereby agrees to, enter into the Exchange Agreement of TMHC (the “ Exchange Agreement ”), substantially in the form attached hereto as Exhibit F , promptly following the consummation of the Reorganization Transactions and prior to the IPO Effective Time.

 

  f. TPG Cayman and Oaktree Cayman shall, and each hereby agrees to, enter into the Coordination Agreement of TMHC (the “ Coordination Agreement ”), substantially in the form agreed upon by the parties thereto, promptly following the consummation of the Reorganization Transactions and prior to the IPO Effective Time.

 

  g. TMHC, TPG Cayman and Oaktree Cayman shall, and each hereby agrees to, enter into the Put/Call Agreement (the “ Put/Call Agreement ”), substantially in the form attached hereto as Exhibit G , promptly following the consummation of the Reorganization Transactions and prior to the IPO Effective Time.

 

  h. TMHC and JHI Holding shall, and each hereby agrees to, enter into the JHI Put/Call Agreement (the “ JHI Put/Call Agreement ”), substantially in the form agreed upon by the parties thereto, promptly following the consummation of the Reorganization Transactions and prior to the IPO Effective Time.

 

  i. The Partnership, Oaktree Cayman and JHI Management shall, and each hereby agrees to, enter into an Oaktree Cayman JHI Unit Rollover Agreement, substantially in the form agreed upon by the parties thereto, with regard to its Class J Units of the Partnership in connection with the JHI O Unit Contribution, promptly following Pricing and prior to the IPO Effective Time.

 

  j.

The Partnership, TPG Cayman and JHI Management shall, and each hereby agrees to, enter into a TPG Cayman JHI Unit Rollover Agreement, substantially in the form agreed upon by the parties thereto, with regard to

 

12


  its Class J Units of the Partnership in connection with the JHI T Unit Contribution, promptly following Pricing and prior to the IPO Effective Time.

 

  k. The Partnership, New TMM, TPG Cayman, Oaktree Cayman, and JHI Holding shall and each hereby agrees to, enter into a First Initial New TMM Contribution Agreement, with regard to the First Initial New TMM Contribution, promptly following Pricing and prior to the IPO Effective Time.

 

  l. The Partnership, Oaktree Cayman and JHI Holding shall and each hereby agrees to, enter into a Class A Unit Rollover Agreement, substantially in the form agreed upon by the parties thereto with regard to the contribution by JHI Holding of Class A-O Units of the Partnership in exchange for Class A-O Units of Oaktree Cayman, promptly following Pricing and prior to the IPO Effective Time.

 

  m. The Partnership, TPG Cayman and JHI Holding shall and each hereby agrees to, enter into a Class A Unit Rollover Agreement, substantially in the form agreed upon by the parties thereto with regard to the contribution by JHI Holding of Class A-T Units of the Partnership in exchange for Class A-T Units of TPG Cayman, promptly following Pricing and prior to the IPO Effective Time.

 

  n. The Partnership, New TMM, Oaktree Cayman and the JHI Redeemed Party shall, and each hereby agrees to, enter into a Rollover Agreement, substantially in the form agreed upon by the parties thereto, with regard to the contribution by the JHI Redeemed Party of Class J Units and Class A-O Units of the Partnership in exchange for common units of New TMM, which in turn will be exchanged for Class J Units and Class A-O Units of Oaktree Cayman, promptly following Pricing and prior to the IPO Effective Time.

 

  o. The Partnership, New TMM, TPG Cayman and the JHI Redeemed Party shall, and each hereby agrees to, enter into a Rollover Agreement, substantially in the form agreed upon by the parties thereto, with regard to the contribution by the JHI Redeemed Party of Class J Units and Class A-T Units of the Partnership in exchange for common units of New TMM, which in turn will be exchanged for Class J Units and Class A-T Units of TPG Cayman, promptly following Pricing and prior to the IPO Effective Time.

 

  p.

The Partnership, New TMM and the unit holders listed on Schedule I hereto shall, and each hereby agrees to, enter into a New TMM Common Unit Rollover Agreement, substantially in the form attached hereto as Exhibit H , in connection with the contribution by holders of Class M-O Units of the Partnership, Class M-O2 Units of the Partnership, Class M-T

 

13


  Units of the Partnership and Class M-T2 Units of the Partnership to New TMM in exchange for common units of New TMM, promptly following Pricing and prior to the IPO Effective Time.

 

  q. The Partnership, New TMM, Oaktree Cayman and the unit holders listed on Schedule II hereto shall, and each hereby agrees to, enter into an Oaktree Cayman Class M Unit Rollover Agreement, substantially in the form attached hereto as Exhibit I , in connection with the contribution by holders of performance-based vesting Class M-O Units of the Partnership and performance-based vesting Class M-O2 Units of the Partnership in exchange for common units of New TMM, which will be in turn exchanged for Class M-O and Class M-O2 Units of Oaktree Cayman, promptly following Pricing and prior to the IPO Effective Time.

 

  r. The Partnership, New TMM, TPG Cayman and the unit holders listed on Schedule II hereto shall, and each hereby agrees to, enter into a TPG Cayman Class M Unit Rollover Agreement, substantially in the form attached hereto as Exhibit J , in connection with the contribution by holders of performance-based vesting Class M-T Units of the Partnership and performance-based vesting Class M-T2 Units of the Partnership in exchange for common units of New TMM, which in turn will be exchanged for Class M-T Units and Class M-T2 Units of TPG Cayman, promptly following Pricing and prior to the IPO Effective Time.

 

  s. The Partnership, Oaktree Cayman, New TMM and the unit holders of the Partnership listed on Schedule III hereto (i) shall, and each hereby agrees to, enter into an Oaktree Cayman Class A Unit Rollover Agreement, substantially in the form attached hereto as Exhibit K , in connection with the contribution by holders of Class A-O Units of the Partnership and Class A-O2 Units of the Partnership in exchange for common units of New TMM, which will in turn be exchanged for Class A-O Units of Oaktree Cayman and Class A-O2 Units of Oaktree Cayman, promptly following Pricing and prior to the IPO Effective Time.

 

  t. The Partnership, TPG Cayman, New TMM and the unit holders of the Partnership listed on Schedule III hereto (i) shall, and each hereby agrees to, enter into an TPG Cayman Class A Unit Rollover Agreement, substantially in the form attached hereto as Exhibit L , in connection with the contribution by holders of Class A-T Units of the Partnership and Class A-T2 Units of the Partnership in exchange for common units of New TMM, which will in turn be exchanged for Class A-T Units of TPG Cayman and Class A-T2 Units of TPG Cayman, promptly following Pricing and prior to the IPO Effective Time.

 

  u.

The Partnership, Oaktree Cayman and the unit holders of the Partnership listed on Schedule IV hereto (i) shall, and each hereby agrees to, enter into an Oaktree Cayman Class A Unit Rollover Agreement, substantially in the

 

14


  form attached hereto as Exhibit M , in connection with the contribution by holders of Class A-O Units of the Partnership and Class A-O2 Units of the Partnership in exchange for Class A-O Units of Oaktree Cayman and Class A-O2 Units of Oaktree Cayman, promptly following Pricing and prior to the IPO Effective Time.

 

  v. The Partnership, TPG Cayman and the unit holders of the Partnership listed on Schedule IV hereto (i) shall, and each hereby agrees to, enter into an TPG Cayman Class A Unit Rollover Agreement, substantially in the form attached hereto as Exhibit N , in connection with the contribution by holders of Class A-T Units of the Partnership and Class A-T2 Units of the Partnership in exchange for Class A-T Units of TPG Cayman and Class A- T2 Units of TPG Cayman, promptly following Pricing and prior to the IPO Effective Time.

 

  w. The Partnership, New TMM and the unit holders of the Partnership listed on Schedule IV hereto (i) shall, and each hereby agrees to, enter into a New TMM Cayman Limited Partnership Incentive Unit Exchange Agreement, substantially in the form attached hereto as Exhibit O , promptly following Pricing and prior to the IPO Effective Time.

 

  x. The Partnership, Oaktree Cayman and the unit holders of the Partnership listed on Schedule IV hereto (i) shall, and each hereby agrees to, enter into an Oaktree Cayman Limited Partnership Incentive Unit Exchange Agreement, substantially in the form attached hereto as Exhibit P , promptly following Pricing and prior to the IPO Effective Time.

 

  y. The Partnership, TPG Cayman and the unit holders of the Partnership listed on Schedule IV hereto (i) shall, and each hereby agrees to, enter into a TPG Cayman Limited Partnership Incentive Unit Exchange Agreement, substantially in the form attached hereto as Exhibit Q , promptly following Pricing and prior to the IPO Effective Time.

4. Exchange of Units of TMM for Units of New TMM .

 

  a. The number of common units of New TMM that will be issued in exchange for any Class A-O Unit, Class A-O2 Unit, Class A-T Unit, Class A-T2 Unit, Class M-O Unit, Class M-O2 Unit, Class M-T Unit, Class M-T2 Unit, Class J1-O Unit, Class J2-O Unit, Class J3-O Units Class J1-T Unit, Class J2-T Unit or Class J3-T Unit of the Partnership will be calculated according to the model agreed by the Parties dated April 9, 2012.

5. Consent to the Reorganization Transactions and the IPO .

 

  a. Each of the Parties hereto hereby acknowledges, agrees and consents to all of the Reorganization Transactions. Each of the Parties hereto shall take all action necessary or appropriate in order to effect, or cause to be effected, to the extent within its control, each of the Reorganization Transactions and the IPO.

 

15


  b. The Parties hereto shall deliver to each other, as applicable, as soon as practicable prior to the IPO Effective Time, each of the Reorganization Documents to which it is a Party, together with any other documents and instruments necessary or desirable to be delivered in connection with the Reorganization Transactions.

 

  c. The Parties hereto intend that the JHI O Unit Contribution, the JHI T Unit Contribution, the Canadian Management O Unit Contribution, the Canadian Management T Unit Contribution and the Initial New TMM Contributions be treated for Canadian federal income tax purposes as dispositions of property to a partnership that qualify for the election under subsection 97(2) of the Income Tax Act (Canada), as amended (the “ITA”) and the corresponding provisions of any applicable provincial statute. The elected amount in such elections shall be determined by the disposing partner in its sole discretion, but such elected amount shall not be less than its cost amount (as defined in the ITA) of the property disposed of to the applicable partnership and, in the case of the Initial New TMM Contribution, shall be equal to its cost amount of the property. The Parties further agree to jointly make the necessary elections and to execute and file, within the prescribed delays, the prescribed election forms and any other documents required to give effect to the foregoing. All the members of each of Oaktree Cayman, TPG Cayman and New TMM hereby give authorization to each of Oaktree Cayman GP, TPG Cayman GP and New TMM GP specifically to act on their behalf regarding the execution, signing and filing of such prescribed election forms and documents and agree to sign an authorizing agreement to confirm such authority of each of Oaktree Cayman GP, TPG Cayman GP and New TMM GP.

 

  d. The Parties hereto intend that (i) the JHI O Unit Contribution, the JHI T Unit Contribution, the Canadian Management O Unit Contribution, the Canadian Management T Unit Contribution, the Oaktree Cayman Contribution, and the TPG Cayman Contribution each be treated for U.S. federal income tax purposes as a contribution to a partnership under Section 721(a) of the Internal Revenue Code of 1986, as amended (the “Code”); and (ii) New TMM be treated as a “continuation” of the Partnership for U.S. federal income tax purposes. The Parties will not take a position on a tax return filed or to be filed with a taxing authority inconsistent with the foregoing except in the case of an applicable final determination by such taxing authority. Notwithstanding the foregoing, (a) New TMM shall file an election described in Treasury Regulation Section 301.7701-3 to be classified, as of a date no later than the date hereof, as a partnership for U.S. federal income tax purposes (and any similar election under state, local or non-U.S. law), and it shall not file any election to be classified as other than a partnership for U.S. federal income tax purposes.

 

16


  e. Each Party hereto shall, no later than the date hereof, execute and deliver a copy of each FIRPTA Notice (as defined in Exhibit R ) set forth opposite such Party’s name in Exhibit R in a form reasonably acceptable to TPG Cayman GP and Oaktree Cayman GP. Each Party shall, within five (5) days of the date hereof, deliver to the address specified in Exhibit R two (2) original copies of each FIRPTA Notice executed by such Party. It is the expectation of the Parties that no withholding will be required under Section 1445 of the Code in connection with the Reorganization Transactions, except with respect to the Canadian Management O Unit Contribution and the Canadian Management T Unit Contribution, in each case to the extent that Oaktree Cayman or TPG Cayman, as the case may be, does not receive a final Notice of Nonrecognition (as defined in Exhibit R) from the relevant Canadian Management Party prior to the time that Oaktree Cayman or TPG Cayman, as the case may be, submits such withholding tax to the Internal Revenue Service (“IRS”). The Parties will not take a position on a tax return filed or to be filed with a taxing authority inconsistent with the foregoing except in the case of an applicable final determination by such taxing authority.

 

  f. Each Canadian Management Party acknowledges that such party will be subject to withholding under Section 1445 of the Code in connection with the Canadian Management O Unit Contribution and the Canadian Management T Unit Contribution, in each case to the extent that Oaktree Cayman or TPG Cayman, as the case may be, does not receive a final Notice of Nonrecognition from such Canadian Management Party prior to the time that Oaktree Cayman or TPG Cayman, as the case may be, submits such withholding tax to the IRS. Each Canadian Management Party agrees to take all action necessary to ensure that the Canadian Management O Unit Contribution and the Canadian Management T Unit Contribution qualify for nonrecognition treatment under the Code (including Section 897 of the Code), including, but not limited to, provision of the FIRPTA Notices required by Exhibit R.

6. No Liabilities in Event of Termination; Certain Covenants . In the event that TMHC determines in writing to abandon the IPO prior to the occurrence of the events described in Section 2, (A) this Agreement shall automatically terminate and be of no further force or effect except for this Section 6 and Sections 8(c), (f), (g), (j) and (k) and (B) there shall be no liability on the part of any of the Parties hereto, except that such termination shall not preclude any Party from pursuing judicial remedies for damages and/or other relief as a result of the breach by the other Parties of any representation, warranty, covenant or agreement contained herein prior to such termination. In the event that TMHC determines to abandon the IPO after the occurrence of some or all of the events described in Section 2, the Parties agree, as applicable, to amend the TMHC Stockholders Agreement, the TMHI Governance Agreement, the Monarch Governance Agreement, the TMHC Registration Rights Agreement, the Exchange

 

17


Agreement and the limited partnership agreements of New TMM, TPG Cayman, Oaktree Cayman and the Partnership so that the governance, transfer restrictions, liquidity rights and other provisions therein with respect to New TMM, TPG Cayman, Oaktree Cayman, the Partnership and each of their respective direct and indirect subsidiaries correspond in the aggregate in all substantive respects with the provisions contained in the Original LPA, the Canadian Parent Governance Agreement (as defined in the Original LPA), the US Parent Governance Agreement (as defined in the Original LPA), the General Partner Stockholders Agreement (as defined in the Original LPA) and the Registration Rights Agreement, dated as of July 13, 2011, by and among the Partnership, Builders, Toeis, Oaktree TM, JHI Holding and the other parties thereto.

7. Representations and Warranties .

 

  a. Representations and Warranties of all Parties. Each Party hereby represents and warrants to all of the other Parties hereto as follows:

 

  i. To the extent such Party is not an individual, such Party is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization or incorporation. The execution, delivery and performance by such Party of this Agreement and of the applicable Reorganization Documents, to the extent a Party thereto and to the extent such Party is not an individual, has been or prior to the IPO Effective Time will be duly authorized by all necessary action;

 

  ii. To the extent such Party is not an individual, such Party has or prior to the IPO Effective Time will have the requisite power, authority and legal right to execute and deliver this Agreement and each of the Reorganization Documents, to the extent a Party thereto, and to consummate the transactions contemplated hereby and thereby, as the case may be;

 

  iii. This Agreement and each of the Reorganization Documents to which it is a Party has been (or when executed will be) duly executed and delivered by such Party and constitute the legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing; and

 

  iv.

Neither the execution, delivery and performance by such Party of this Agreement and the applicable Reorganization Documents, to the extent a Party thereto, nor the consummation by such Party of the transactions contemplated hereby, nor compliance by such

 

18


  Party with the terms and provisions hereof, will, directly or indirectly (with or without notice or lapse of time or both), (i) contravene or conflict with, or result in a breach or termination of, or constitute a default under (or with notice or lapse of time or both, result in the breach or termination of or constitute a default under) the organization documents of such Party (to the extent such Party is not an individual), (ii) constitute a violation by such Party of any existing requirement of law applicable to such Party or any of its properties, rights or assets or (iii) require the consent or approval of any Person, except in the case of clauses (ii) and (iii), as would not reasonably be expected to result in, individual or in the aggregate, a material adverse effect on the ability of such Party to consummate the transaction contemplated by this Agreement.

 

  v. Such Party is the record and beneficial owner of any equity interests of TMHC, TMM, New TMM, TPG Cayman and/or Oaktree Cayman, as applicable, that are intended to be transferred by it pursuant to this Agreement, the Reorganization Documents and/or the transactions contemplated hereby and thereby, and, as applicable, such Party has good and marketable title to such equity interests, free and clear of all encumbrances. Such Party has full right, power and authority to transfer and deliver to any other Party valid title to such equity interests held by such Party, free and clear of all encumbrances.

 

  vi. Such Party (either alone or together with its advisors) has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the Reorganization Transactions. Such Party has had the opportunity to ask questions and receive answers concerning the terms and conditions of the Reorganization Transactions and has had full access to such other information concerning the Reorganization Transactions as it has requested. Such Party has received all information that it believes is necessary or appropriate in connection with the Reorganization Transactions. Such Party is an informed and sophisticated party and has engaged, to the extent such Party deems appropriate, expert advisors experienced in the evaluation of transactions of the type contemplated hereby. Such Party is an accredited investor as that term is defined in Regulation D under the Securities Act of 1933. Such Party understands that the transfer of the securities acquired hereunder has not been registered and agrees to resell such securities pursuant to registration under the Securities Act, pursuant to an available exemption from registration, or, if applicable, in accordance with the provisions of Regulation S under the Securities Act.

 

19


  vii. Such Party, to the extent such Party is JHI Holding, JHI Management or an employee of Monarch, (i) is not a U.S. person (as defined in Regulation S under the Securities Act) or purchasing for the account or benefit of a U.S. person, (ii) is acquiring securities hereunder in an offshore transaction in accordance with Regulation S and (iii) agrees not to engage in hedging transactions with regard to such securities unless in compliance with the Securities Act.

8. Miscellaneous .

 

  a. Amendments and Waivers . This Agreement may be modified, amended or waived only with the written approval of TPG Cayman and Oaktree Cayman, provided, however that an amendment or modification that would affect any other Party in a manner materially and disproportionately adverse to such Party shall be effective against such Party so materially and adversely affected only with the prior written consent of such Party, such consent not to be unreasonably withheld or delayed. The failure of any Party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such Party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

 

  b. Successors, Assigns and Transferees . This Agreement shall bind and inure to the benefit of and be enforceable by the Parties hereto and their respective successors and assigns.

 

  c. Notices . All notices and other communications required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the Party to be notified; (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day, provided that a copy of such notice is also sent via nationally recognized overnight courier, specifying next day delivery, with written verification of receipt; (c) three days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one business day after deposit with a nationally recognized overnight courier, specifying next day delivery with written verification of receipt. All communications shall be sent to such Party’s address as set forth below or at such other address as the Party shall have furnished to each other Party in writing in accordance with this provision:

 

If to TMHC, TMHI or Monarch, to it at:

 

4900 North Scottsdale Road, Suite 2000
Scottsdale, AZ 85251
Attention:    Darrell Sherman,
   Vice President and General Counsel
Facsimile:    (866) 390-2612
E-mail:    dsherman@taylormorrison.com

 

20


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

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York
USA 10019
Attention:    John C. Kennedy
   Lawrence G. Wee
Facsimile No.:    (212) 757-3990
E-mail:    jkennedy@paulweiss.com
   lwee@paulweiss.com
with a copy (which shall not constitute notice) to:
Ropes & Gray LLP
The Prudential Tower
800 Boylston Street
Boston, Massachusetts
USA 02199
Attention:    Julie H. Jones
   Alfred O. Rose
Facsimile:    (617) 951-7050
E-mail:    julie.jones@ropesgray.com
   alfred.rose@ropesgray.com
with a copy (which shall not constitute notice) to:
Debevoise & Plimpton LLP
919 Third Avenue
New York, New York
USA 10022
Attention:    George E.B. Maguire
   Jasmine Ball
Facsimile No.:    (212) 909-6836
E-mail:    gebmaguire@debevoise.com
   jball@debevoise.com
If to New TMM, New TMM GP, the Partnership or TMM GP, to it at:
c/o Taylor Morrison Home Corporation
4900 North Scottsdale Road, Suite 2000
Scottsdale, AZ 85251
Attention:    Darrell Sherman,
   Vice President and General Counsel
Facsimile:    (866) 390-2612
E-mail:    dsherman@taylormorrison.com

 

21


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

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York
USA 10019-6064
Attention:    John C. Kennedy
   Lawrence G. Wee
Facsimile No.:    (212) 757-3990
E-mail:    jkennedy@paulweiss.com
   lwee@paulweiss.com

 

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

 

Ropes & Gray LLP

The Prudential Tower
800 Boylston Street
Boston, Massachusetts
USA 02199
Attention:    Julie H. Jones
   Alfred O. Rose
Facsimile:    (617) 951-7050
E-mail:    julie.jones@ropesgray.com
   alfred.rose@ropesgray.com

 

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

 

Debevoise & Plimpton LLP

919 Third Avenue
New York, New York
USA 10022
Attention:    George E.B. Maguire
   Jasmine Ball
Facsimile No.:    (212) 909-6836
E-mail:    gebmaguire@debevoise.com
   jball@debevoise.com

 

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

 

McCarthy Tétrault LLP

1300 – 777 Dunsmuir Street
Vancouver, British Columbia
Canada V7Y 1K2
Attention:    Cameron Belsher
Facsimile No.:    (604) 622-5674
E-mail:    cbelsher@mccarthy.ca

 

22


if to TPG Cayman, TPG Cayman GP, TPG Initial Canadian LP, Builders, Toeis or TPG Advisors, to it at:

 

TPG Global, LLC

301 Commerce Street, Suite 3300
Fort Worth, TX 76102
Attention:    Ronald Cami
Facsimile No.:    (415) 743-1501
E-mail:    rcami@tpg.com

 

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

 

Ropes & Gray LLP

The Prudential Tower
800 Boylston Street
Boston, Massachusetts
USA 02199
Attention:    Julie H. Jones
   Alfred O. Rose
Facsimile:    (617) 951-7050
E-mail:    julie.jones@ropesgray.com
   alfred.rose@ropesgray.com

 

if to Oaktree Cayman, Oaktree Cayman GP, Oaktree Initial Canadian LP, Oaktree TM or Oaktree CTB, to it at:

 

Oaktree Capital Management, L.P.

333 South Grand Ave., 28 th Floor
Los Angeles, California
USA 90071
Attention:    Kenneth Liang
Facsimile No.:    (213) 830-6293
E-mail:    kliang@oaktreecapital.com

 

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

 

Debevoise & Plimpton LLP

919 Third Avenue
New York, New York
USA 10022
Attention:    George E.B. Maguire
   Jasmine Ball
Facsimile No.:    (212) 909-6836
Email:    gebmaguire@debevoise.com
   jball@debevoise.com

 

23


If to either JHI Party, to it at:

 

JHI Advisory Inc.

Suite 3260 - 666 Burrard Street
Vancouver, British Columbia
Canada V6C 2X8
Attention:    G. Gail Edwards
Facsimile No.:    (604) 648-6685
E-mail:    gedwards@jhinvest.com

 

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

 

McCarthy Tétrault LLP

1300 – 777 Dunsmuir Street
Vancouver, British Columbia
Canada V7Y 1K2
Attention:    Cameron Belsher
Facsimile No.:    (604) 622-5674
E-mail:    cbelsher@mccarthy.ca

 

If to the JHI Redeemed Party, to it at:

 

419 Occidental Ave.

Suite 300
Seattle, Washington
USA 98104
Attention:    Michael Miller
Facsimile No.:    (206) 728-4583
Email:    mikem@intra-corp.com

 

If to any Management Party, to it at:

 

c/o Taylor Morrison Home Corporation

900 North Scottsdale Road, Suite 2000
Scottsdale, AZ 85251
Attention:    Darrell Sherman,
   Vice President and General Counsel
Facsimile:    (866) 390-2612
E-mail:    dsherman@taylormorrison.com

 

24


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

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas
New York, NY 10019-6064
Attention:    John C. Kennedy
   Lawrence G. Wee
Facsimile:    (212) 757-3990
E-mail:    jkennedy@paulweiss.com
   lwee@paulweiss.com

 

  d. Further Assurances; Power of Attorney .

 

  i. At any time or from time to time after the date hereof, the Parties agree to cooperate with each other, and at the request of any other Party, to execute and deliver any further instruments or documents and to take all such further action as another Party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the Parties hereunder.

 

  ii. Each Management Party appoints Sheryl Palmer and Darrell Sherman (each an “ Attorney-in-Fact ”), and each of them, with full power of substitution and resubstitution, as such Management Party’s exclusive and irrevocable agent, proxy and attorney-in fact (and such proxy shall be deemed to be coupled with an interest), for all purposes under this Agreement and the Reorganization Documents, including full power and authority to act on such Management Party’s behalf with respect thereto. Without limiting the generality of the foregoing, the Attorney-in-Fact, acting in good faith, is authorized and empowered to:

 

  1. make all determinations and take all actions with respect to such Management Party’s equity interests of TMM, New TMM, TPG Cayman or Oaktree Cayman, including without limitation the exercise of all rights and the performance of all obligations under this Agreement and the Reorganization Documents, and the transfer or other disposition of such interests;

 

  2. in connection with any such transfer or disposition, execute, endorse and receive all documents, instruments, certificates, statements and agreements on behalf of and in the name of such Management Party necessary to effectuate and consummate the Reorganization Transactions;

 

25


  3. take all actions on such Management Party’s behalf in connection with any claims made under this Agreement or any of the Reorganization Documents to defend or settle such claims;

 

  4. approve any changes or modifications to the Reorganization Documents from the forms set forth on the Exhibits attached hereto prior to execution and delivery;

 

  5. execute and deliver, should it elect to do so in its sole discretion, on such Management Party’s behalf, any amendment to this Agreement or any of the Reorganization Documents or any waiver of any of the terms thereof; and

 

  6. take all other actions to be taken by or on such Management Party’s behalf that are permitted or required under this Agreement or any of the Reorganization Documents.

 

  iii. All decisions and actions taken by the Attorney-in-Fact will be binding upon the Management Parties; no Management Party will have the right to object, dissent, protest or otherwise contest the same; and each Party will be able to rely conclusively on the written instructions of the Attorney-in-Fact as to such decisions and actions taken by the Attorney-in-Fact hereunder. The Attorney-in-Fact will not be liable to any Management Party for any action taken by it in good faith pursuant to this Agreement. The Attorney-in-Fact is serving in that capacity solely for purposes of administrative convenience, and is not personally liable in such capacity for any of the obligations of any Management Party hereunder.

 

  e. Entire Agreement . Except as otherwise expressly set forth herein, this Agreement, together with the Reorganization Documents, embodies the complete agreement and understanding among the Parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the Parties, written or oral, that may have related to the subject matter hereof in any way.

 

  f.

Governing Law; Jurisdiction; Waiver of Jury Trial . This Agreement shall be governed by the laws of the state of New York. To the fullest extent permitted by law, no suit, action or proceeding with respect to this Agreement may be brought in any court or before any similar authority other than in a court of competent jurisdiction in the State of New York, and the Parties hereto hereby submit to the exclusive jurisdiction of such courts for the purpose of such suit, proceeding or judgment. To the fullest

 

26


  extent permitted by law, each Party hereto irrevocably waives any right it may have had to bring such an action in any other court, domestic or foreign, or before any similar domestic or foreign authority. Each of the Parties hereto hereby irrevocably and unconditionally waives trial by jury in any legal action or proceeding in relation to this Agreement and for any counterclaim herein.

 

  g. Severability . Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

  h. Enforcement . Each Party hereto acknowledges that money damages would not be an adequate remedy in the event that any of the covenants or agreements in this Agreement are not performed in accordance with its terms, and it is therefore agreed that in addition to and without limiting any other remedy or right it may have, the non-breaching Party will have the right to an injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction enjoining any such breach and enforcing specifically the terms and provisions hereof.

 

  i. No Third-Party Beneficiaries . This Agreement shall be solely for the benefit of the Parties and no other Person or entity shall be a third Party beneficiary hereof.

 

  j. Titles and Subtitles . The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

  k. Counterparts; Facsimile Signatures . This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. This Agreement may be executed by facsimile signature(s).

* * * * *

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

27


Taylor Morrison Home Corporation
By:  

/s/ Darrell Sherman

Name:   Darrell Sherman
Title:   Vice President, General Counsel and Secretary
In the presence of:

/s/ Dawn D. Baxter

Notary Public in and for Arizona, U.S.A.
   

    (State)

LOGO

 

[Signature Page to Reorganization Agreement]


TMM Holdings II Limited Partnership
By:   TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Darrell Sherman

Name:   Darrell Sherman
Title:   Vice President, General Counsel and Secretary
In the presence of:

/s/ Dawn D. Baxter

Notary Public in and for Arizona, U.S.A.
   

    (State)

LOGO

 

[Signature Page to Reorganization Agreement]


TMM Holdings II GP, ULC
By:  

/s/ Darrell Sherman

Name:   Darrell Sherman
Title:   Vice President, General Counsel and Secretary
In the presence of:

/s/ Dawn D. Baxter

Notary Public in and for Arizona, U.S.A.
   

    (State)

LOGO

 

[Signature Page to Reorganization Agreement]


TMM Holdings Limited Partnership
By:   TMM Holdings (G.P.) Inc., its
  general partner
By:  

/s/ Joe S. Houssian

  Name:   Joe S. Houssian
  Title:   Director
In the presence of:

LOGO

 

Notary Public in and for the Province of British Columbia, Canada
LOGO

 

[ Signature Page to Reorganization Agreement ]


TMM Holdings (G.P.) Inc.
By:  

/s/ Joe S. Houssian

  Name:   Joe S. Houssian
  Title:   Director
In the presence of:

LOGO

 

Notary Public in and for the Province of British Columbia, Canada
LOGO

 

[ Signature Page to Reorganization Agreement ]


TMM Holdings (G.P.) ULC
By:  

/s/ Joe S. Houssian

  Name:   Joe S. Houssian
  Title:   Director
In the presence of:

LOGO

 

Notary Public in and for the Province of British Columbia, Canada
LOGO

 

[ Signature Page to Reorganization Agreement ]


Taylor Morrison Holdings, Inc.
By:  

/s/ Darrell Sherman

Name:   Darrell Sherman
Title:   Vice President, General Counsel and Secretary
In the presence of:

/s/ Dawn D. Baxter

Notary Public in and for Arizona, U.S.A.
   

    (State)

LOGO

 

[Signature Page to Reorganization Agreement]


Monarch Communities Inc.
By:  

/s/ Darrell Sherman

Name:   Darrell Sherman
Title:   Vice President, General Counsel and Secretary
In the presence of:

/s/ Dawn D. Baxter

Notary Public in and for Arizona, U.S.A.
   

    (State)

LOGO

 

[Signature Page to Reorganization Agreement]


TPG TMM Holdings II, L.P.
By:   TPG TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Ronald Cami

  Name:   Ronald Cami
  Title:   Vice President and Secretary
In the presence of:

/s/ Jennifer Epstein

Notary Public in and for California, U.S.A.
   

      (State)

LOGO

 

[Signature Page to Reorganization Agreement]


TPG TMM Holdings II GP, ULC
By:  

/s/ Ronald Cami

  Name:   Ronald Cami
  Title:   Vice President and Secretary
In the presence of:

/s/ Jennifer Epstein

Notary Public in and for California, U.S.A.
   

      (State)

LOGO

 

[Signature Page to Reorganization Agreement]


OCM TMM Holdings II, L.P.
By:   OCM TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Derek Smith

  Name:   Derek Smith
  Title:   Authorized Signatory
In the presence of:

(SEE ATTACHED)

Notary Public in and for             , U.S.A.
                          (State)
By:  

/s/ Kenneth Liang

  Name:   Kenneth Liang
  Title:   Authorized Signatory
In the presence of:

(SEE ATTACHED)

Notary Public in and for             , U.S.A.
                          (State)

 

[Signature Page to Reorganization Agreement]


CERTIFICATE OF ACKNOWLEDGMENT

 

State of California    )     
   )    ss:  
County of Los Angeles    )     

On April 8, 2013, before me, JoBeth A. Linstrot, Notary Public, personally appeared Derek Smith and Kenneth Liang, who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

 

LOGO    

/s/ JoBeth A. Linstrot

   

JoBeth A. Linstrot

Notary Public

(Seal of Notary)

   


OCM TMM Holdings II GP, ULC
By:  

/s/ Derek Smith

  Name:   Derek Smith
  Title:   Authorized Signatory
In the presence of:

(SEE ATTACHED)

Notary Public in and for             , U.S.A.
                          (State)
By:  

/s/ Kenneth Liang

  Name:   Kenneth Liang
  Title:   Authorized Signatory
In the presence of:

(SEE ATTACHED)

Notary Public in and for             , U.S.A.
                          (State)

 

[Signature Page to Reorganization Agreement]


CERTIFICATE OF ACKNOWLEDGMENT

 

State of California    )     
   )    ss:  
County of Los Angeles    )     

On April 8, 2013, before me, JoBeth A. Linstrot, Notary Public, personally appeared Derek Smith and Kenneth Liang, who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

 

LOGO    

/s/ JoBeth A. Linstrot

   

JoBeth A. Linstrot

Notary Public

(Seal of Notary)

   


TPG TMM Holdings II LP, Inc.
By:  

/s/ Ronald Cami

  Name:   Ronald Cami
  Title:   Vice President and Secretary
In the presence of:

/s/ Jennifer Epstein

Notary Public in and for California, U.S.A.
   

      (State)

LOGO

 

[Signature Page to Reorganization Agreement]


OCM TMM Holdings II LP, Inc.
By:  

/s/ Derek Smith

  Name:   Derek Smith
  Title:   Authorized Signatory
In the presence of:

(SEE ATTACHED)

Notary Public in and for             , U.S.A.
                          (State)
By:  

/s/ Kenneth Liang

  Name:   Kenneth Liang
  Title:   Authorized Signatory
In the presence of:

(SEE ATTACHED)

Notary Public in and for             , U.S.A.
                          (State)

 

[Signature Page to Reorganization Agreement]


CERTIFICATE OF ACKNOWLEDGMENT

 

State of California    )     
   )    ss:  
County of Los Angeles    )     

On April 8, 2013, before me, JoBeth A. Linstrot, Notary Public, personally appeared Derek Smith and Kenneth Liang, who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

 

LOGO    

/s/ JoBeth A. Linstrot

   

JoBeth A. Linstrot

Notary Public

(Seal of Notary)

   


BUILDERS HOLDINGS INTERNATIONAL, L.P.
By:   TPG TM III, SRL, its General Partner
By:  

/s/ Ronald Cami

  Name:   Ronald Cami
  Title:   Authorized Signatory
In the presence of:

/s/ Jennifer Epstein

Notary public in and for California
LOGO

 

[Signature Page to Reorganization Agreement]


TOEIS, L.P.
By:   TPG TM III, SRL, its General Partner
By:  

/s/ Ronald Cami

  Name:   Ronald Cami
  Title:   Authorized Signatory
In the presence of:

/s/ Jennifer Epstein

Notary public in and for California
LOGO

 

[Signature Page to Reorganization Agreement]


TPG ADVISORS VI-AIV, Inc.
By:  

/s/ Ronald Cami

  Name:   Ronald Cami
  Title:   Vice President
In the presence of:

/s/ Jennifer Epstein

Notary Public in and for California, U.S.A.
   

      (State)

LOGO

 

[Signature Page to Reorganization Agreement]


Oaktree TM Holdings TP, SRL
By:  

/s/ Jay Ghiya

Name:   Jay Ghiya
Title:   Manager
In the presence of:

(SEE ATTACHED)

Notary Public in and for

 

[Signature Page to Reorganization Agreement]


CERTIFICATE OF ACKNOWLEDGMENT

 

State of California    )     
   )    ss:  
County of Los Angeles    )     

On April 8, 2013, before me, JoBeth A. Linstrot, Notary Public, personally appeared Jay Ghiya, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

 

LOGO    

/s/ JoBeth A. Linstrot

   

JoBeth A. Linstrot

Notary Public

(Seal of Notary)

   


Oaktree TM Holdings CTB, LTD
By:   Oaktree Capital Management, L.P.
Its:   Sole Director
By:  

/s/ Derek Smith

Name:   Derek Smith
Title:   Managing Director
In the presence of:

(SEE ATTACHED)

Notary Public in and for
By:  

/s/ Kenneth Liang

Name:   Kenneth Liang
Title:   Managing Director
In the presence of:

(SEE ATTACHED)

Notary Public in and for

 

[Signature Page to Reorganization Agreement]


CERTIFICATE OF ACKNOWLEDGMENT

 

State of California    )      
   )    ss:   
County of Los Angeles    )      

On April 8, 2013, before me, JoBeth A. Linstrot, Notary Public, personally appeared Derek Smith and Kenneth Liang, who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

 

LOGO  

/s/ JoBeth A. Linstrot

 

JoBeth A. Linstrot

Notary Public

(Seal of Notary)

 


JHI Holding Limited Partnership, by its General Partner, JHI Advisory Ltd.
By:  

/s/ Joe S. Houssian

  Name:   Joe S. Houssian
  Title:   Director
In the presence of:

LOGO

 

Notary Public in and for the Province of British Columbia, Canada
LOGO

 

[Signature Page to Reorganization Agreement]


JHI Management Limited Partnership, by its General Partner, JHI Advisory Ltd.
By:  

/s/ Joe S. Houssian

  Name:   Joe S. Houssian
  Title:   Director
In the presence of:

LOGO

 

Notary Public in and for the Province of British Columbia, Canada
LOGO

 

[Signature Page to Reorganization Agreement]


MJs Investors, LLC
By:  

/s/ R. Mike Miller

  Name:   R. Mike Miller
  Title:   Manager
In the presence of:

/s/ Cathy M. Long

Notary Public in and for WA State
LOGO

 

[Signature Page to Reorganization Agreement]


/s/ Kenneth Dar Ahrens

Kenneth Dar Ahrens

 

[Signature Page to Reorganization Agreement]


/s/ Sally Michelle Bassett

Sally Michelle Bassett

 

[Signature Page to Reorganization Agreement]


/s/ Philip S. Bodem

Philip S. Bodem

 

[Signature Page to Reorganization Agreement]


/s/ Calvin R. Boyd

Calvin R. Boyd

 

State of Arizona                                         )  
County of Maricopa                                  )   LOGO
On this 5 th day of April, 2013, before me personally appeared Calvin R Boyd, whose identity was proven to me on the basis of satisfactory evidence to be the person who he or she claims to be, and acknowledged that he or she signed the above/attached document.  

/s/ Dawn D Baxter

 
Notary Public  

 

[Signature Page to Reorganization Agreement]


/s/ Michelle M Campbell

Michelle M Campbell

 

[Signature Page to Reorganization Agreement]


/s/ Carl David Cone

Carl David Cone

 

[Signature Page to Reorganization Agreement]


/s/ Mark A. Delillo

Mark A. Delillo

 

[Signature Page to Reorganization Agreement]


/s/ Timothy Eller

Timothy Eller

 

[Signature Page to Reorganization Agreement]


/s/ Charles Enochs

Charles Enochs

 

[Signature Page to Reorganization Agreement]


/s/ Caroline G. Estrada

Caroline G. Estrada

 

State of Arizona                                         )   
County of Maricopa                                  )    LOGO
On this 5 th day of April, 2013, before me personally appeared Caroline G Estrada, whose identity was proven to me on the basis of satisfactory evidence to be the person who he or she claims to be, and acknowledged that he or she signed the above/attached document.   

 

/s/ Dawn D Baxter

  
Notary Public   

 

[Signature Page to Reorganization Agreement]


/s/ David George

David George

 

[Signature Page to Reorganization Agreement]


/s/ Kip Williams Gilleland

Kip Williams Gilleland

 

[Signature Page to Reorganization Agreement]


/s/ Amy L. Haywood-Rino

Amy L. Haywood-Rino

 

[Signature Page to Reorganization Agreement]


/s/ George T. Hennessy

George T. Hennessy

 

[Signature Page to Reorganization Agreement]


/s/ Erik M. Heuser

Erik M. Heuser

 

[Signature Page to Reorganization Agreement]


/s/ Douglas P. Holloway

Douglas P. Holloway

 

[Signature Page to Reorganization Agreement]


/s/ David Hreha

David Hreha

 

[Signature Page to Reorganization Agreement]


/s/ Graham Hughes

Graham Hughes

 

State of Arizona                                         )   
County of Maricopa                                  )    LOGO
On this 5 th day of April, 2013, before me personally appeared Graham Hughes, whose identity was proven to me on the basis of satisfactory evidence to be the person who he or she claims to be, and acknowledged that he or she signed the above/attached document.   

 

/s/ Dawn D Baxter

  
Notary Public   

 

[Signature Page to Reorganization Agreement]


/s/ James E. Jimison

James E. Jimison

 

[Signature Page to Reorganization Agreement]


/s/ Maurice B. Johnson

Maurice B. Johnson

 

[Signature Page to Reorganization Agreement]


/s/ Tawn Kelley

Tawn Kelley

 

[Signature Page to Reorganization Agreement]


/s/ John Kempton

John Kempton

 

[Signature Page to Reorganization Agreement]


/s/ Laura Kunzweiler

Laura Kunzweiler

 

[Signature Page to Reorganization Agreement]


/s/ Peter Lane

Peter Lane

 

[Signature Page to Reorganization Agreement]


/s/ John H. Lucas

John H. Lucas

 

State of Arizona                                         )   
County of Maricopa                                  )    LOGO
On this 4 th day of April, 2013, before me personally appeared John Lucas, whose identity was proven to me on the basis of satisfactory evidence to be the person who he or she claims to be, and acknowledged that he or she signed the above/attached document.   

 

/s/ Dawn D Baxter

  
Notary Public   

 

[Signature Page to Reorganization Agreement]


/s/ Tommi Lynn Manning

Tommi Lynn Manning

 

[Signature Page to Reorganization Agreement]


/s/ Todd Merrill

Todd Merrill

 

[Signature Page to Reorganization Agreement]


/s/ Douglas Miller

Douglas Miller

 

[Signature Page to Reorganization Agreement]


/s/ Kathleen R. Owen

Kathleen R. Owen

 

   State of Arizona                                         )
   County of Maricopa                                  )
   On this 8 th day of April, 2013, before me personally appeared Kathleen R Owen, whose identity was proven to me on the basis of satisfactory evidence to be the person who he or she claims to be, and acknowledged that he or she signed the above/attached document.
  

/s/ Nadia O. Edwards

   Notary Public

 

LOGO

 

 

[Signature Page to Reorganization Agreement]


/s/ Sheryl D. Palmer

Sheryl D. Palmer

 

[Signature Page to Reorganization Agreement]


/s/ Joseph B. Poletti

Joseph B. Poletti

 

State of Arizona                                         )   LOGO

 

County of Maricopa                                  )

 
On this 5 th day of April, 2013, before me personally appeared Joseph B Poletti, whose identity was proven to me on the basis of satisfactory evidence to be the person who he or she claims to be, and acknowledged that he or she signed the above/attached document.  

 

/s/ Dawn D Baxter

 
Notary Public  

 

[Signature Page to Reorganization Agreement]


/s/ Darrell Sherman

Darrell Sherman

 

State of Arizona                                         )   LOGO

 

County of Maricopa                                  )

 
On this 5 th day of April, 2013, before me personally appeared Darrell Sherman, whose identity was proven to me on the basis of satisfactory evidence to be the person who he or she claims to be, and acknowledged that he or she signed the above/attached document.  

 

/s/ Dawn D Baxter

 
Notary Public  

 

[Signature Page to Reorganization Agreement]


/s/ Louis Steffens

Louis Steffens

 

[Signature Page to Reorganization Agreement]


/s/ Emilio Tesolin

Emilio Tesolin

 

[Signature Page to Reorganization Agreement]


/s/ Timothy J. Towell

Timothy J. Towell

 

[Signature Page to Reorganization Agreement]


/s/ Stephen J. Wethor

Stephen J. Wethor

 

[Signature Page to Reorganization Agreement]


/s/ Jonathan C. White

Jonathan C. White

 

[Signature Page to Reorganization Agreement]


/s/ Erin A. Willis

Erin A. Willis

 

State of Arizona                                         )   LOGO

 

County of Maricopa                                  )

 
On this 5 th day of April, 2013, before me personally appeared Erin A Willis, whose identity was proven to me on the basis of satisfactory evidence to be the person who he or she claims to be, and acknowledged that he or she signed the above/attached document.  

 

/s/ Dawn D Baxter

 
Notary Public  

 

[Signature Page to Reorganization Agreement]


/s/ Robert W. Witte

Robert W. Witte

 

State of Arizona                                         )   LOGO

 

County of Maricopa                                  )

 
On this 5 th day of April, 2013, before me personally appeared Robert W Witte, whose identity was proven to me on the basis of satisfactory evidence to be the person who he or she claims to be, and acknowledged that he or she signed the above/attached document.  

 

/s/ Dawn D Baxter

 
Notary Public  

 

[Signature Page to Reorganization Agreement]


SCHEDULE I

(U.S. participants with Class M Units)

Ahrens, Dar

Bassett, Michelle

Bodem, Phil

Boyd, Calvin

Campbell, Michelle

Cone, David

Delillo, Mark

Eller, Timothy

Enochs, Charlie

Estrada, Carlie

Gilleland, Kip

Haywood, Amy

Hennessy, Tom

Heuser, Erik

Holloway, Doug

Hreha, David

Hughes, Graham

Jimison, Jim

Johnson, Maurice

Kelley, Tawn

Kempton, Steve

Lane, Peter

Lucas, John

Manning, Lynn

Merrill, Todd

Miller, Doug

Owen, Katy

Palmer, Sheryl

Poletti, Joe

Sherman, Darrell

Steffens, Lou

Towell, Tim

Wethor, Steve

White, Jonathan

Willis, Erin

Witte, Bob


SCHEDULE II

(U.S. participants with Class M Units subject to performance-based vesting)

Ahrens, Dar

Bassett, Michelle

Bodem, Phil

Boyd, Calvin

Campbell, Michelle

Cone, David

Delillo, Mark

Enochs, Charlie

Estrada, Carlie

Gilleland, Kip

Haywood, Amy

Hennessy, Tom

Heuser, Erik

Holloway, Doug

Hreha, David

Hughes, Graham

Jimison, Jim

Johnson, Maurice

Kelley, Tawn

Kempton, Steve

Lucas, John

Manning, Lynn

Merrill, Todd

Miller, Doug

Owen, Katy

Palmer, Sheryl

Poletti, Joe

Sherman, Darrell

Steffens, Lou

Towell, Tim

Wethor, Steve

White, Jonathan

Willis, Erin

Witte, Bob


SCHEDULE III

(US participants with Class A Units)

Ahrens, Dar

Bodem, Phil

Eller, Timothy

Enochs, Charlie

Heuser, Erik

Hughes, Graham

Johnson, Maurice

Kelley, Tawn

Kempton, Steve

Kunzweiller, Laura

Lane, Peter

Owen, Katy

Palmer, Sheryl

Sherman, Darrell

Steffens, Lou

Towell, Tim

Wethor, Steve

White, Jonathan

Witte, Bob


SCHEDULE IV

(Canadian participants)

Carr, Brad

George, David

Tesolin, Emilio


EXHIBITS A-Q


EXHIBIT R

SCHEDULE OF FIRPTA NOTICES

 

Part I. Definitions

Capitalized terms not defined herein are used herein as defined in the Reorganization Agreement to which this Exhibit it attached. As used herein, the following terms shall have the following meanings:

 

(i) Certification of Non-Foreign Status ” shall mean a certification described in Treasury Regulation section 1.1445-2(b) that is substantially in one of the forms of Schedule A hereto and reasonably acceptable to TPG Cayman GP and Oaktree Cayman GP;

 

(ii) IRS ” shall mean the Internal Revenue Service;

 

(iii) FIRPTA Notice ” shall mean a Certification of Non-Foreign Status, a Notice of Nonrecognition, a Required Cover Letter, or a Statement of Partnership FIRPTA Status, as applicable;

 

(iv) Notice of Nonrecognition ” shall mean a notice described in Treasury Regulation section 1.1445-2(d)(2)(i)(A) that is substantially in the form of Schedule B hereto and reasonably acceptable to TPG Cayman GP and Oaktree Cayman GP;

 

(v) Party Providing Notice ” shall mean a Party listed in Part III of this Exhibit;

 

(vi) Required Cover Letter ” shall mean the two cover letters, each as described in Treasury Regulation section 1.1445-2(d)(2)(i)(B), that are substantially in the form of Schedule C hereto and are reasonably acceptable to TPG Cayman GP and Oaktree Cayman GP; and

 

(vii) Statement of Partnership FIRPTA Status ” shall mean a certificate described in Treasury Regulation section 1.1445-11T(d) that is substantially in the form of Schedule D hereto and reasonably acceptable to TPG Cayman GP and Oaktree Cayman GP.

 

Part II. Execution and Delivery of FIRPTA Notices

 

  1. Each Party Providing Notice shall prepare the FIRPTA Notices required hereby from such Party Providing Notice in the following manner:

 

  a. Each Party Providing Notice that is hereby required to prepare a Notice of Nonrecognition and that has a United States Taxpayer Identification Number (“ TIN ”) as of the day prior to the date hereof shall prepare such Notice of Nonrecognition with respect to each Transferee identified opposite such Party’s name in Part III of this Exhibit, in each case with respect to the relevant interests in the Partnership identified opposite such Party’s name in Part III of this Exhibit. Each Party Providing Notice that is hereby required to prepare a Notice of Nonrecognition and that does not have a TIN as of the day prior to the date hereof shall take the steps specified in Section 5, below.


  b. Each Party Providing Notice that is hereby required to prepare a Required Cover Letter shall prepare such Required Cover Letter with respect to the Transferors identified opposite such Party’s name in Part III of this Exhibit.

 

  c. Each Party Providing Notice that is hereby required to prepare a Statement of Partnership FIRPTA Status shall prepare such Statement of Partnership FIRPTA Status with respect to the Transferors identified opposite such Party’s name in Part III of this Exhibit.

 

  2. Each Party Providing Notice shall, no later than the day prior to the date hereof, execute and deliver a copy of each FIRPTA Notice set forth opposite such Party’s name in Part III of this Exhibit.

 

  3. If any Party Providing Notice is a disregarded entity as defined in §1.1445-2(b)(2)(iii), the FIRPTA Notice(s) set forth opposite such Party’s name in Part III of this Exhibit shall be executed by such Party’s most immediate owner that is not a disregarded entity as defined in §1.1445-2(b)(2)(iii).

 

  4. Each Party Providing Notice shall, within five (5) days of the date hereof, deliver two (2) original copies of each FIRPTA Notice executed by such Party to the following address:

Ropes & Gray LLP

The Prudential Tower

800 Boylston Street

Boston, Massachusetts

USA 02199

Attn: Erin T. Turban

erin.turban@ropesgray.com

 

  5. Any Party Providing Notice that is hereby required to prepare a Notice of Nonrecognition but that does not have a TIN as of the day prior to the date hereof shall take the following steps:

 

  a. The Party shall prepare such Notice of Nonrecognition, marked “DRAFT”, with respect to each Transferee identified opposite such Party’s name in Part III of this Exhibit, in each case with respect to the relevant interests in the Partnership identified opposite such Party’s name in Part III of this Exhibit, and each such draft Notice of Nonrecognition shall indicate that such Party has applied for a TIN;

 

  b. The Party shall complete an IRS Form W-7 Application for IRS Individual Taxpayer Identification Number, requesting processing under “Exception 4”;

 

-59-


  c. No later than the day prior to the date hereof, the Party shall send such Form W-7, together with all documentation required by the IRS to be filed with such Form W-7 (including the relevant Notices of Nonrecognition, marked “DRAFT”), to the following address:

1) Internal Revenue Service,

Austin Service Center, ITIN Operation,

PO Box 149342,

Austin TX 78714-9342;

 

  d. No later than the day prior to the date hereof, the Party shall send a copy of such Form W-7 with the relevant Notice of Nonrecognition (marked “DRAFT”) to the address specified in Section 4, above;

 

  e. Upon receipt by the Party of a TIN, the Party shall prepare a final version of each Notice of Nonrecognition identified opposite such Party’s name in Part III of this Exhibit, which shall include such Party’s TIN; and

 

  f. Within five (5) days of the date the Party receives a TIN from the IRS, the Party shall send two (2) original copies of each final Notice of Nonrecognition required by this Schedule R to the address specified in Section 4, above.

 

-60-


Part III. Required FIRPTA Notices*

 

             

INFORMATION FOR COMPLETING NOTICES

Party Providing Notice

  

FIRPTA Notice

  

Transferor

  

Transferee

  

Partnership

Builders   

1.      Notice of Nonrecognition

   N/A    TPG Cayman    New TMM
  

 

2.      Notice of Nonrecognition

   N/A    New TMM    TMM Holdings Limited Partnership
Each Canadian Management Party    Notice of Nonrecognition    N/A   

1.      Oaktree Cayman

   TMM Holdings Limited Partnership
        

 

2.      TPG Cayman

  
JHI Holding    Notice of Nonrecognition    N/A   

1.      New TMM

   TMM Holdings
        

 

2.      Oaktree Cayman

   Limited Partnership
        

 

3.      TPG Cayman

  
JHI Management    Notice of Nonrecognition    N/A   

1.      Oaktree Cayman

   TMM Holdings Limited Partnership
        

 

2.      TPG Cayman

  
JHI Redeemed Party    Certification of Non-Foreign Status    N/A    N/A    N/A


             

INFORMATION FOR COMPLETING NOTICES

Party Providing Notice

  

FIRPTA Notice

  

Transferor

  

Transferee

  

Partnership

New TMM   

1.      Statement of Partnership FIRPTA Status

  

1A.   Oaktree Cayman

 

1B.   TPG Cayman

   N/A    N/A
  

2.      Required Cover Letter

  

2A.   Oaktree Cayman

   N/A    N/A
     

 

2B.   TPG Cayman

     
     

 

2C.   JHI Holding

     
  

3.      Required Cover Letter

  

3A.   Builders

   N/A    N/A
     

 

3B.   Toies

     
     

 

3C.   Oaktree TM

     
  

4.      Notice of Nonrecognition and Required Cover Letter**

   New TMM    New TMM    New TMM
Each Non-Canadian Management Party    Certification of Non-Foreign Status    N/A    N/A    N/A
Oaktree Cayman   

1.      Required Cover Letter

  

1A.   Oaktree TM

   N/A    N/A
     

 

1B.   Each JHI Party

     
     

 

1C.   Each Canadian Management Party***

     
  

2.      Notice of Nonrecognition

   N/A    New TMM    TMM Holdings Limited Partnership
Oaktree TM   

1.      Notice of Nonrecognition

   N/A    Oaktree Cayman    New TMM
  

2.      Notice of Nonrecognition

   N/A    New TMM    TMM Holdings Limited Partnership

 

-62-


             

INFORMATION FOR COMPLETING NOTICES

Party Providing Notice

  

FIRPTA Notice

  

Transferor

  

Transferee

  

Partnership

Toeis   

1.      Notice of Nonrecognition

   N/A    TPG Cayman    New TMM
  

2.      Notice of Nonrecognition

   N/A    New TMM    TMM Holdings Limited Partnership
TPG Cayman   

1.      Required Cover Letter

  

1A.   Builders1B. Toies1C. Each JHI Party1D. Each Canadian Management Party***

   N/A    N/A
  

2.      Notice of Nonrecognition

   N/A    New TMM    TMM Holdings Limited Partnership

 

* The required filings for any entity listed in the table above that is disregarded for U.S. federal income tax purposes will be completed by the regarded owner of such entity. Certain FIRPTA Notices will be provided after the completion of the Reorganization Transactions as agreed by the Parties hereto.
** Documentation to reflect possible Code Section 708 termination of New TMM.
*** Required filings will be adjusted with respect to Canadian Management Parties who do not have as of the date hereof U.S. individual taxpayer identification numbers.

 

-63-


Schedule A: Form of Certification of Non-Foreign Status

1. Form of Certification of Non-Foreign Status for Individual Transferor

[Date]

Ropes & Gray LLP

The Prudential Tower

800 Boylston Street

Boston, Massachusetts

USA 02199

Attn: Erin T. Turban

Re: Certification of Non-Foreign Status of [Party Providing Notice]

Dear Sir or Madam:

Section 1445 of the Internal Revenue Code (the “Code”) provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. For U.S. tax purposes (including section 1445 of the Code), the owner of a disregarded entity (which has legal title to a U.S. real property interest under local law) will be the transferor of the property and not the disregarded entity. To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by [Party Providing Notice] (“Transferor”), the undersigned hereby certifies the following:

 

  1. Transferor is not a nonresident alien for U.S. income tax purposes;

 

  2. Transferor’s U.S. [social security number/taxpayer identification number] is [                    ] ; and

 

  3. Transferor’s home address is [                                         ] .

Transferor understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct, and complete.

[Signature and date]


Schedule A: Form of Certification of Non-Foreign Status

2. Form of Certification of Non-Foreign Status for Entity Transferor

[Date]

Ropes & Gray LLP

The Prudential Tower

800 Boylston Street

Boston, Massachusetts

USA 02199

Attn: Erin T. Turban

Re: Certification of Non-Foreign Status of [Party Providing Notice]

Dear Sir or Madam:

Section 1445 of the Internal Revenue Code (the “Code”) provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. For U.S. tax purposes (including section 1445 of the Code), the owner of a disregarded entity (which has legal title to a U.S. real property interest under local law) will be the transferor of the property and not the disregarded entity. To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by [Party Providing Notice] (“Transferor”), the undersigned hereby certifies the following on behalf of Transferor:

 

  1. Transferor is not a foreign corporation, foreign partnership, foreign trust, foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations);

 

  2. Transferor is not a disregarded entity as defined in §1.1445-2(b)(2)(iii);

 

  3. Transferor’s U.S. employer identification number is [                    ] ; and

 

  4. Transferor’s office address is [                                         ] .

Transferor understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct, and complete, and I further declare that I have authority to sign this document on behalf of Transferor.

[Signature(s) and date]

[Title(s)]

 

-65-


Schedule B: Form of Notice of Nonrecognition

[Note: If the Party Providing Notice does not have a TIN as of the day prior to the date hereof, the initial Notice of Nonrecognition provided should be marked “DRAFT”]

[Date]

[Transferee]

[Address]

Re: Notice of nonrecognition transaction from [Party Providing Notice] to [Transferee]

Dear Sir or Madam:

Section 1445 of the Internal Revenue Code (the “Code”) provides that a transferee of a U.S. real property interest (a “USRPI”) must withhold tax if the transferor is a foreign person. Under Treasury Regulation § 1.1445-2(d)(2), a transferee shall not be required to withhold under section 1445 of the Code with respect to a USRPI if the transferor notifies the transferee that by reason of the operation of a nonrecognition provision of the Code, the transferor is not required to recognize gain or loss with respect to the transfer. To inform the transferee that withholding of tax is not required upon the transfer of USRPIs by [Party Providing Notice] (“Transferor”) to [Transferee] (“Transferee”), the undersigned hereby certifies the following [if Party Providing Notice is an entity: on behalf of Transferor]:

 

  A. Notice . To inform the Transferee that withholding of tax is not required upon the disposition of a USRPI by Transferor, the undersigned hereby submits this notice of a nonrecognition transaction pursuant to Treasury Regulation § 1.1445-2(d)(2).

 

  B. Transferor .

 

  1. The name of the Transferor submitting this Notice is [Party Providing Notice] ;

 

  2. The taxpayer identification number of the Transferor is [                    ] ; and [ Note: If the Party Providing Notice does not have a TIN as of the day prior to the date of the Notice, the initial Notice provided should read “The Transferor does not currently have a taxpayer identification number and has applied for one on IRS Form W-7, requesting processing under “Exception 4.”]

 

  3. The [home/office] address of the Transferor is [                                         ] .

 

  C. Statement . Transferor is not required to recognize any gain or loss with respect to the transfer described herein.

 

  D.

Description of the Transfer . Pursuant to the Reorganization Agreement executed by Transferor and Transferee on [            ] (the “Reorganization Agreement”), Transferor will transfer to Transferee a partnership interest (the “Transferred Interest”) in [Partnership]

 

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  (the “Partnership”) in exchange for a partnership interest in Transferee (the “Received Interest”). The Partnership may hold a USRPI. Immediately after the exchange of the Transferred Interest for the Received Interest, the Transferee will indirectly hold the same potential USRPI.

 

  E. Summary of Facts and Law Supporting Nonrecognition . Code section 721(a) provides that no gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership. Code section 721(b) provides that subsection (a) does not apply in the case of a contribution to a partnership which would be treated as an investment company (within the meaning of section 351 of the Code) if the partnership were incorporated.

In the present case, Transferor will transfer the Transferred Interest to the Transferee in exchange for the Received Interest. Transferee would not be treated as an investment company (within the meaning of section 351 of the Code) if Transferee were incorporated. Therefore, under Code section 721(a), no gain or loss is recognized to Transferor or Transferee as a result of the contribution of the Transferred Interest in exchange for the Received Interest.

Code section 897(e) provides that a nonrecognition provision of the Code shall apply only in the case of an exchange of a USRPI for an interest the sale of which would be subject to taxation. Code section 897(g) provides that the transfer of a partnership interest is taxable to the extent that the partnership interest is attributable to USRPIs. Immediately after the exchange of the Transferred Interest for the Received Interest, the Transferee will indirectly hold the same potential USRPI that the Transferor currently holds indirectly. Therefore, the transfer of the Received Interest would be taxable to the extent that the Received Interest is attributable to a USRPI. Furthermore, the extent the Received Interest is attributable to a USRPI will be the same as the extent the Transferred Interest is attributable to a USRPI. Therefore, the requirement of section 897(e) is met and the nonrecognition provision of Code section 721(a) applies to the transfer described herein.

Treasury Regulation § 1.1445-2(d)(2)(ii) provides that a transferee may not rely upon this Notice of Nonrecognition Transfer, and must withhold under section 1445(a) with respect to the transfer of a USRPI, if the Transferor qualifies for nonrecognition treatment with respect to part, but not all, of the gain realized by the Transferor upon the transfer. In the present case, Transferor is transferring the Transferred Interest solely in exchange for the Received Interest. Therefore, the Transferor qualifies for nonrecognition treatment with respect to all of the gain realized by the transferor upon the transfer of the Transferred Property pursuant to the Reorganization Agreement and Transferee may rely upon the rule set forth in Treasury Regulation § 1.1445-2(d)(2)(i).

Transferor understands that this certification will be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

 

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Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct, and complete [ if Party Providing Notice is an entity: , and I further declare that I have authority to sign this document on behalf of Transferor ] .

[Signature(s) and date]

[Title(s), if Party Providing Notice is an entity]

 

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Schedule C: Form of Required Cover Letter A

[Date]

Internal Revenue Service Center

P.O. box 409101

Ogden, UT 84409

Re: Notice of nonrecognition transaction from [Transferor] to [Party Providing Notice]

Dear Sir or Madam:

Please find attached a notice of a nonrecognition transaction pursuant to Treasury Regulation § 1.1445-2(d)(2) from [Transferor].

 

  1. The name of the Transferee submitting this Notice is [Party Providing Notice] (“Transferee”);

 

  2. The employer identification number of the Transferee is [                    ]; and

 

  3. The office address of the Transferee is [                                        ].

Best regards,

[Name]

[Title]

cc: Director, Philadelphia Service Center

 

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Schedule C: Form of Required Cover Letter B (cont.)

[NOTE DIFFERENT ADDRESS]

[Date]

Director, Philadelphia Service Center

P.O. Box 21086

Drop Point 8731

FIRPTA Unit

Philadelphia, PA 19114-0586

Re: Notice of nonrecognition transaction from [Transferor] to [Party Providing Notice]

Dear Sir or Madam:

Please find attached a notice of a nonrecognition transaction pursuant to Treasury Regulation § 1.1445-2(d)(2) from [Transferor].

 

  1. The name of the Transferee submitting this Notice is [Party Providing Notice] (“Transferee”);

 

  2. The employer identification number of the Transferee is [                    ]; and

 

  3. The office address of the Transferee is [                                        ].

Best regards,

[Name]

[Title]

cc: Internal Revenue Service Center, Ogden, UT

 

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Schedule D: Form of Statement of Partnership FIRPTA Status

[Date]

[TPG Cayman/Oaktree Cayman/JHI Holding]

[Address]

Re: FIRPTA Status of TMM Holdings II Limited Partnership

Dear Sir or Madam:

Section 1445 of the Internal Revenue Code (the “Code”) provides that a transferee of a U.S. real property interest (“USRPI”) must withhold tax if the transferor is a foreign person. Under Treasury Regulation § 1.1445-11T(d)(2), no withholding under section 1445 of the Code is required upon the disposition by a foreign partner of an interest in a domestic or foreign partnership if the transferee is provided a statement, issued by the partnership and signed by a general partner under penalties of perjury no earlier than 30 days before the transfer, certifying that fifty percent or more of the value of the gross assets of the partnership does not consist of USRPIs, or that ninety percent or more of the value of the gross assets of the partnership does not consist of USRPIs plus cash or cash equivalents.

Pursuant to Treasury Regulation § 1.1445-11T(d)(2), the undersigned hereby certifies on behalf of TMM Holdings II Limited Partnership (the “Partnership”) that ninety percent or more of the value of the gross assets of the Partnership does not consist of USRPIs plus cash or cash equivalents.

The Partnership understands that this certification may be disclosed to the Internal Revenue Service and that any false statement contained herein could be punished by fine, imprisonment, or both.

Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct, and complete, and I further declare that I have authority to sign this document on behalf of the Partnership.

[Signature(s) and date]

[Title], [TMM Holdings II GP, ULC], General Partner of TMM Holdings II Limited Partnership

 

-71-

Exhibit 10.7

EXECUTION VERSION

 

 

 

U.S. PARENT GOVERNANCE AGREEMENT

BY AND AMONG

TAYLOR MORRISON HOME CORPORATION,

TAYLOR MORRISON HOLDINGS, INC.,

TPG TMM HOLDINGS II, L.P.,

OCM TMM HOLDINGS II, L.P.

AND

JHI HOLDING LIMITED PARTNERSHIP

D ATED AS OF A PRIL 9, 2013

 

 

 


TABLE OF CONTENTS

 

Article I DEFINITIONS

     2  

Section 1.1

 

Definitions

     2  

Section 1.2

 

Other Interpretive Provisions

     5  

Article II REPRESENTATIONS AND WARRANTIES

     5  

Section 2.1

 

Existence; Authority; Enforceability

     5  

Section 2.2

 

Absence of Conflicts

     5  

Section 2.3

 

Consents

     6  

Article III GOVERNANCE

     6  

Section 3.1

 

The U.S. Parent Board

     6  

Section 3.2

 

U.S. Parent Activities; Approvals

     7  

Article V GENERAL PROVISIONS

     8  

Section 4.1

 

Freedom to Pursue Opportunities

     8  

Section 4.2

 

Assignment; Benefit

     9  

Section 4.3

 

Termination

     9  

Section 4.4

 

Severability

     9  

Section 4.5

 

Entire Agreement; Amendment

     9  

Section 4.6

 

Counterparts

     10  

Section 4.7

 

Notices

     10  

Section 4.8

 

Governing Law

     13  

Section 4.9

 

Jurisdiction

     13  

Section 4.10

 

Waiver of Jury Trial

     13  

Section 4.11

 

Specific Performance

     13  

 

i


This U.S. PARENT GOVERNANCE AGREEMENT (as it may be amended from time to time in accordance with the terms hereof, the “ Agreement ”), dated as of April 9, 2013, is made by and among:

i. Taylor Morrison Home Corporation, a Delaware corporation (the “ Company ”);

ii. Taylor Morrison Holdings, Inc., a Delaware corporation (the “ U.S. Parent ”);

iii. TPG TMM Holdings II, L.P., a Cayman Islands limited partnership (together with its Affiliates, “ TPG ”);

iv. OCM TMM Holdings II, L.P., a Cayman Islands limited partnership (together with its Affiliates, “ Oaktree ”); and

v. JHI Holding Limited Partnership, a British Columbia limited partnership (together with its Affiliates, “ JHI ”).

For purposes of this Agreement, each of TPG and Oaktree is a “ Principal Sponsor ” and each of TPG, Oaktree and JHI is an “ Investor ”.

RECITALS

WHEREAS, on July 13, 2011, TMM Holdings (G.P.) Inc., TMM Holdings Limited Partnership (the “ Partnership ”), the U.S. Parent and certain stockholders party thereto entered into a Governance Agreement (the “ Prior Agreement ”);

WHEREAS, pursuant to a Reorganization Agreement dated the date hereof, the Company, the Partnership, the Investors and certain other Persons have effected a series of reorganization transactions (collectively, the “ Reorganization Transactions ”);

WHEREAS, after giving effect to the Reorganization Transactions, the Principal Sponsors own limited partnership interests in TMM Holdings II Limited Partnership (“ New TMM Units ”) and shares of the Company’s Class B common stock, par value $0.00001 per share (the “ Class B Common Stock ”), which, subject to certain restrictions, are exchangeable from time to time at the option of the holder thereof for shares of the Company’s Class A common stock, par value $0.00001 per share (the “ Class A Common Stock ” and, together with the Class B Common Stock, the “ Common Stock ”) pursuant to an Exchange Agreement dated the date hereof;

WHEREAS, on the date hereof, the Company has priced an initial public offering of shares of its Class A Common Stock (the “ IPO ”) pursuant to an Underwriting Agreement dated the date hereof (the “ Underwriting Agreement ”);

WHEREAS, the Partnership owns 100% of the equity interests in U.S. Parent and Monarch Communities Inc., a British Columbia corporation (“ Canadian Parent ”);

 

1


WHEREAS, the Prior Agreement is being terminated by the parties thereto as of the Closing; and

WHEREAS, the parties hereto desire to provide for the governance of the U.S. Parent.

NOW, THEREFORE, in consideration of the foregoing and the mutual promises, covenants and agreements of the parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions . As used in this Agreement, the following terms shall have the following meanings:

Affiliate ” means, with respect to any specified Person, (a) any Person that directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person or (b) in the event that the specified Person is a natural Person, a Member of the Immediate Family of such Person; provided that the Company, the Partnership, U.S. Parent, Canadian Parent and each of their respective subsidiaries shall be deemed not to be Affiliates of TPG, Oaktree or JHI. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

Agreement ” has the meaning set forth in the Preamble.

Business Day ” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in the City of New York.

Canadian Parent ” has the meaning set forth in the Recitals.

Canadian Parent Governance Agreement ” means the Canadian Parent Governance Agreement, dated as of the date hereof, by and among the Company, the Partnership, Canadian Parent and the other parties thereto.

Class A Common Stock ” has the meaning set forth in the Recitals.

Class B Common Stock ” has the meaning set forth in the Recitals.

Closing ” means the closing of the IPO.

Common Stock ” has the meaning set forth in the Recitals.

Company ” has the meaning set forth in the Preamble.

Company Board ” means the board of directors of the Company.

 

2


Company Shares ” means (i) all shares of Common Stock that are not then subject to vesting (including shares that were at one time subject to vesting to the extent they have vested), (ii) all shares of Common Stock issuable upon exercise, conversion or exchange of any option, warrant or convertible security that are not then subject to vesting (including shares that were at one time subject to vesting to the extent they have vested) (without double counting shares of Class A Common Stock issuable upon an exchange of shares of Class B Common Stock together with New TMM Units) and (iii) all shares of Common Stock directly or indirectly issued or issuable with respect to the securities referred to in clauses (i) or (ii) above by way of unit or stock dividend or unit or stock split, or in connection with a combination of units or shares, recapitalization, merger, consolidation or other reorganization.

Company Stockholders Agreement ” means the Company Stockholders Agreement, dated as of the date hereof, by and among the Company and the stockholders of the Company party thereto.

Debt Threshold ” means an amount equal to $50.0 million.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.

Fund Indemnitors ” has the meaning set forth in Section 3.1(d).

Indemnitee ” has the meaning set forth in Section 3.1(d).

Investor ” has the meaning set forth in the Preamble.

IPO ” has the meaning set forth in the Recitals

JHI ” has the meaning set forth in the Preamble.

JHI Designee ” has the meaning set forth in the Company Stockholders Agreement.

Loan Threshold ” means an amount equal to $50.0 million.

Member of the Immediate Family ” means, with respect to any natural Person, (a) each parent, spouse (but not including a former spouse or a spouse from whom such Partner is legally separated) or child (including those adopted) of such individual and (b) each trustee, solely in his or her capacity as trustee and so long as such trustee is reasonably satisfactory to the U.S. Parent, for a trust naming only one or more of the Persons listed in sub-clause (a) as beneficiaries.

Necessary Action ” shall mean, with respect to a specified result, all actions necessary to cause such result, including (i) voting or providing a written consent or proxy with respect to the Company Shares, (ii) causing the adoption of stockholders’ resolutions and amendments to the organizational documents of the Company, (iii) executing agreements and instruments, and (iv) making, or causing to be made, with governmental, administrative or regulatory authorities, all filings, registrations or similar actions that are required to achieve such result.

 

3


Oaktree ” has the meaning set forth in the Preamble.

Partnership ” has the meaning set forth in the Preamble.

Person ” means any individual, partnership, limited liability company, corporation, trust, association, estate, unincorporated organization or government or any agency or political subdivision thereof.

Principal Sponsor ” has the meaning set forth in the Preamble.

Principal Sponsor Designee ” has the meaning set forth in the Company Stockholders Agreement.

Principal Sponsor Minimum ” means, with respect to a Principal Sponsor, a number of shares of Common Stock equal to at least 50% of the outstanding shares of Common Stock owned by such Principal Sponsor as of the closing of all of the transactions contemplated by the Underwriting Agreement and the Put/Call Agreement, or, if no such closing occurs prior to June 30, 2013, the Closing.

Purchase Consideration Threshold ” means an amount equal to $50.0 million.

Put/Call Agreement ” means the Put/Call Agreement, dated as of the date hereof, by and among TPG, Oaktree, TMM Holdings II Limited Partnership and the Company.

Representatives ” means, with respect to any Person, any of such Person’s officers, directors, employees, agents, attorneys, accountants, actuaries, consultants or financial advisors or other Person associated with, or acting on behalf of, such Person.

Requisite Investor Approval ” means (a) for so long as each Principal Sponsor holds at least the Principal Sponsor Minimum, the approval of a majority of the U.S. Parent Board, including in each case at least one Principal Sponsor Designee of each Principal Sponsor; (b) to the extent only one Principal Sponsor holds the Principal Sponsor Minimum, the approval of a majority of the U.S. Parent Board, including in each case at least one Principal Sponsor Designee of such Principal Sponsor. At such time as neither Principal Sponsor holds at least the Principal Sponsor Minimum, any action requiring “Requisite Investor Approval” shall be determined by U.S. Parent or the U.S. Parent Board in accordance with applicable law.

Sale Consideration Threshold ” means an amount equal to $50.0 million.

Securities Act ” means the Securities Act of 1933, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.

TPG ” has the meaning set forth in the Preamble.

 

4


Underwriting Agreement ” has the meaning set forth in the Recitals.

U.S. Parent ” has the meaning set forth in the Preamble.

U.S. Parent Board ” means the board of directors (or equivalent) of the U.S. Parent.

Section 1.2 Other Interpretive Provisions . (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

(b) The words “ hereof ”, “ herein ”, “ hereunder ” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and any subsection and section references are to this Agreement unless otherwise specified.

(c) The term “ including ” is not limiting and means “ including without limitation .”

(d) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

(e) Whenever the context requires, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

Each of the parties to this Agreement hereby represents and warrants to each other party to this Agreement that as of the date such party executes this Agreement:

Section 2.1 Existence; Authority; Enforceability . Such party has the power and authority to enter into this Agreement and to carry out its obligations hereunder. Such party is duly organized and validly existing under the laws of its jurisdiction of organization, and the execution of this Agreement, and the consummation of the transactions contemplated herein, have been authorized by all necessary action on the part of its board of directors (or equivalent) and shareholders (or other holders of equity interests), if required, and no other act or proceeding on its part is necessary to authorize the execution of this Agreement or the consummation of any of the transactions contemplated hereby. This Agreement has been duly executed by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

Section 2.2 Absence of Conflicts . The execution and delivery by such party of this Agreement and the performance of its obligations hereunder does not and will not (a) conflict with, or result in the breach of any provision of the constitutive documents of such party, (b) result in any violation, breach, conflict, default or an event of default (or an event which with notice, lapse of time, or both, would constitute a default or an event of default), or give rise to any right of acceleration or termination or any additional payment obligation, under the terms of any contract, agreement or permit to which such party is a party or by which such party’s assets or operations are bound or affected, or (c) violate any law applicable to such party.

 

5


Section 2.3 Consents . Other than as expressly required herein or any consents which have already been obtained, no consent, waiver, approval, authorization, exemption, registration, license or declaration is required to be made or obtained by such party in connection with (a) the execution, delivery or performance of this Agreement or (b) the consummation of any of the transactions contemplated herein.

ARTICLE III

GOVERNANCE

Section 3.1 The U.S. Parent Board .

(a) Composition of the U.S. Parent Board . The Company and U.S. Parent shall take all Necessary Action to cause the composition of the U.S. Parent Board to be identical at all times to the composition of the Company Board; provided , that, notwithstanding anything to the contrary set forth in this Section 3.1(a), in the event that a Principal Sponsor Designee or JHI Designee is not elected to the Company Board at the applicable annual or special meeting of the shareholders at which such nominee is up for election (or re-election) to the Company Board, the Company and U.S. Parent shall take all Necessary Action to cause such Principal Sponsor Designee or JHI Designee to be appointed or elected to the U.S. Parent Board; provided , further , that the Company shall take all Necessary Action to fill any vacancy caused by the removal or resignation of any such Principal Sponsor Designee or JHI Designee with a replacement director designated by the applicable Principal Sponsor or JHI, as applicable, unless the election or appointment of such a replacement would result in a number of directors designated by such Investor in excess of the number of directors that such Investor is then entitled to designate for election pursuant to Section 3.1(b) or Section 3.1(c) of the Company Stockholders Agreement, as applicable.

(b) Composition of U.S. Parent Board Committees . The Company and U.S. Parent shall take all Necessary Action to cause there to be an audit committee, a compensation committee and a nominating and governance committee of the U.S. Parent Board in addition to such other committees of the U.S. Parent Board as the U.S. Parent Board determines. Subject to applicable laws and stock exchange regulations, each Principal Sponsor shall have the right to have a representative appointed to serve on each committee of the U.S. Parent Board for so long as such Principal Sponsor shall have the right to designate at least one (1) director for election to the Company Board. Subject to applicable laws and stock exchange regulations and for so long as such Principal Sponsor shall have the right to designate at least one (1) director for election to the Company Board, each Principal Sponsor shall have the right to have a representative appointed as an observer to any committee of the U.S. Parent Board to which such Principal Sponsor (i) does not elect to have a representative appointed or (ii) is prohibited by applicable laws or stock exchange regulations from having a representative appointed.

(c) Reimbursement of Expenses . U.S. Parent shall, and shall cause each of its direct and indirect subsidiaries to, reimburse their directors for all reasonable out-of-pocket expenses incurred in connection with their participation in the meetings of the U.S. Parent Board or any committees thereof, including reasonable travel, lodging and meal expenses.

 

6


(d) D&O Insurance; Indemnification Priority . U.S. Parent shall obtain customary director and officer indemnity insurance on commercially reasonable terms. The Company and U.S. Parent hereby acknowledge that any director, officer or other indemnified person covered by any such indemnity insurance policy (any such Person, an “ Indemnitee ”) may have certain rights to indemnification, advancement of expenses and/or insurance provided by TPG, Oaktree or one or more of their respective Affiliates (collectively, the “ Fund Indemnitors ”). The Company and U.S. Parent hereby (i) agree that the Company, the Partnership, U.S. Parent and their respective direct and indirect subsidiaries shall be the indemnitors of first resort (i.e., their respective obligations to an Indemnitee shall be primary and any obligation of any Fund Indemnitor to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee shall be secondary) and the obligation of the Company, the Partnership, U.S. Parent and their respective direct and indirect subsidiaries to indemnify and advance expenses to an Indemnitee shall be joint and several, and (ii) irrevocably waive, relinquish and release the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company and U.S. Parent further agree that no advancement or payment by the Fund Indemnitors on behalf of an Indemnitee with respect to any claim for which such Indemnitee has sought indemnification from the Company or U.S. Parent, as the case may be, shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or to be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Indemnitee against the Company and U.S. Parent as the case may be.

Section 3.2 U.S. Parent Activities; Approvals .

(a) U.S. Parent shall not take, and shall cause each of its direct and indirect subsidiaries not to take, any of the following actions without prior Requisite Investor Approval:

 

  i. Any transaction or series of related transactions (i) in which any Person or Persons (other than TPG, Oaktree, the Partnership or the Company) acquires in excess of 50% of the then outstanding shares of capital stock of U.S. Parent (whether by merger, consolidation, sale or transfer of partnership interests, tender offer, exchange offer, reorganization, recapitalization or otherwise) or (ii) following which any Person or Persons (other than TPG, Oaktree, the Partnership or the Company) have the direct or indirect power to elect a majority of the members of the board of directors (or equivalent) of U.S. Parent;

 

  ii. Any transaction or series of related transactions involving the sale, lease, exchange or other disposal by U.S. Parent or any of its direct or indirect subsidiaries of any of their respective assets for consideration having a fair market value (as reasonably determined by the U.S. Parent Board) in excess of the Sale Consideration Threshold, other than intercompany transactions between and among direct or indirect wholly-owned subsidiaries of the Partnership;

 

7


  iii. Any transaction or series of related transactions involving the purchase, rent, license, exchange or other acquisition by U.S. Parent or any of its direct or indirect subsidiaries of any assets (including securities) for consideration having a fair market value (as reasonably determined by the U.S. Parent Board) in excess of the Purchase Consideration Threshold, other than intercompany transactions between and among direct or indirect wholly-owned subsidiaries of the Partnership;

 

  iv. The hiring or termination of the chief executive officer of U.S. Parent;

 

  v. (A) any incurrence of indebtedness by U.S. Parent or any of its direct or indirect subsidiaries if, after taking into account the incurrence of such indebtedness, the aggregate outstanding indebtedness of U.S. Parent and its direct and indirect subsidiaries would exceed the Debt Threshold, or (B) the making of any loan, advance or capital contribution to any Person (other than U.S. Parent or any of its direct or indirect subsidiaries) by U.S. Parent or any of its direct or indirect subsidiaries in excess of the Loan Threshold; and

 

  vi. Any change in the composition of the U.S. Parent Board other than in accordance with Section 3.1(a).

Each of TPG and Oaktree acknowledges and agrees that Requisite Investor Approval has been obtained with respect to all actions taken and transactions undertaken in connection with the IPO.

ARTICLE IV

GENERAL PROVISIONS

Section 4.1 Freedom to Pursue Opportunities . The parties expressly acknowledge and agree that: (i) each Investor, each Representative of an Investor and each director or officer of the Company, the Partnership, U.S. Parent or any of their respective subsidiaries that is an Affiliate of an Investor (each, an “ Investor Designee ”) has the right to, and has no duty (contractual or otherwise) not to, (x) directly or indirectly engage in the same or similar business activities or lines of business as the Company, the Partnership, U.S. Parent or any of their respective subsidiaries, including those deemed to be competing with the Company, the Partnership, U.S. Parent or any of their respective subsidiaries, or (y) directly or indirectly do business with any client, customer or supplier of the Company, the Partnership or any of their respective subsidiaries; and (ii) in the event that any Investor, any Representative of an Investor or any Investor Designee acquires knowledge of a potential transaction or matter that may be a corporate opportunity for the Company, the Partnership, U.S. Parent or any of their respective subsidiaries, such Investor, Representative, or Investor Designee shall have no duty (contractual or otherwise) to communicate or present such corporate opportunity to the Company, the Partnership, U.S. Parent or any of their respective subsidiaries, as the case may be, and, notwithstanding any provision of this Agreement to the contrary, shall not be liable to the Company, the Partnership, U.S. Parent or any of their respective Affiliates, subsidiaries, stockholders or other equity holders for breach of any duty (contractual or otherwise) by reason

 

8


of the fact that such Investor, Representative or Investor Designee, directly or indirectly, pursues or acquires such opportunity for itself, directs such opportunity to another Person, or does not present such opportunity to the Company, the Partnership, U.S. Parent or any of their respective subsidiaries. For the avoidance of doubt, the provisions of this Section 4.1 shall have independent effect with respect to, and shall not be construed as being in lieu of or otherwise limiting, any separate obligations of any Person under any agreement between such Person and U.S. Parent and/or any direct or indirect subsidiary thereof, including any agreement related to noncompetition, nonsolicitation, confidentiality or other restrictions on the activities or operations of such Person.

Section 4.2 Assignment; Benefit .

(a) The rights and obligations hereunder shall not be assignable without the prior written consent of the other parties hereto; provided that each of TPG and Oaktree may assign its rights and obligations hereunder to any of its respective Affiliates without the prior written consent of the other parties hereto. Any attempted assignment of rights or obligations in violation of this Section 4.2 shall be null and void.

(b) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their respective successors and permitted assigns, and there shall be no third-party beneficiaries to this Agreement other than the Indemnitees and the Fund Indemnitors under Section 3.1(l) and the Investors, their Representatives and the Investor Designees under Section 4.1.

Section 4.3 Termination . If not otherwise stipulated, this Agreement shall terminate automatically (without any action by any party hereto) as to each Investor as of the later of (i) when such Investor no longer owns any shares of Common Stock, or (ii) when such Investor no longer has the right to nominate any directors to the Company Board pursuant to Article III hereof.

Section 4.4 Severability . In the event that any provision of this Agreement shall be invalid, illegal or unenforceable such provision shall be construed by limiting it so as to be valid, legal and enforceable to the maximum extent provided by law and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 4.5 Entire Agreement; Amendment .

(a) This Agreement (together with the Company Stockholders Agreement and the Canadian Parent Governance Agreement) sets forth the entire understanding and agreement between the parties with respect to the transactions contemplated herein and supersedes and replaces any prior understanding, agreement or statement of intent, in each case written or oral, of any kind and every nature with respect hereto. Except as set forth above, there are no other agreements with respect to the governance of U.S. Parent among the Company, U.S. Parent, TPG, Oaktree and JHI. This Agreement or any provision hereof may only be amended, modified or waived, in whole or in part, at any time by an instrument in writing signed by each of the Principal Sponsors as to which this Agreement has not terminated; provided that the prior written consent of any Investor shall be required for any amendment, modification or waiver that would have a disproportionate and adverse effect in any material respect on the rights of such Investor relative to the other Investors.

 

9


(b) No waiver of any breach of any of the terms of this Agreement shall be effective unless such waiver is expressly made in writing and executed and delivered by the party against whom such waiver is claimed. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. Except as otherwise expressly provided herein, no failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder, or otherwise available in respect hereof at law or in equity, shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

Section 4.6 Counterparts . This Agreement may be executed in any number of separate counterparts each of which when so executed shall be deemed to be an original and all of which together shall constitute one and the same agreement. Counterpart signature pages to this Agreement may be delivered by facsimile or electronic delivery ( i.e ., by email of a PDF signature page) and each such counterpart signature page will constitute an original for all purposes.

Section 4.7 Notices . Unless otherwise specified herein, all notices, consents, approvals, reports, designations, requests, waivers, elections and other communications authorized or required to be given pursuant to this Agreement shall be in writing and shall be given, made or delivered by personal hand-delivery, by facsimile transmission, by electronic mail, by mailing the same in a sealed envelope, registered first-class mail, postage prepaid, return receipt requested, or by air courier guaranteeing overnight delivery (and such notice shall be deemed to have been duly given, made or delivered (a) on the date received, if delivered by personal hand delivery, (b) on the date received, if delivered by facsimile transmission, by electronic mail or by registered first-class mail prior to 5:00 p.m. prevailing local time on a Business Day, or if delivered after 5:00 p.m. prevailing local time on a Business Day or on other than a Business Day, on the first Business Day thereafter and (c) two (2) Business Days after being sent by air courier guaranteeing overnight delivery), at the following addresses (or at such other address as shall be specified by like notice):

if to the Company to:

Taylor Morrison Home Corporation

4900 North Scottsdale Road, Suite 2000

Scottsdale, AZ 85251

  Attention: Darrell Sherman,
       Vice President and General Counsel
  Facsimile: (866) 390-2612
  E-mail: dsherman@taylormorrison.com

 

10


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

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York

USA 10019-6064

  Attention: John C. Kennedy
       Lawrence G. Wee
  Facsimile: (212) 757-3990
  E-mail: jkennedy@paulweiss.com
       lwee@paulweiss.com

if to U.S. Parent to:

Taylor Morrison Holdings, Inc.

c/o Taylor Morrison Home Corporation

4900 North Scottsdale Road, Suite 2000

Scottsdale, AZ 85251

  Attention: Darrell Sherman,
       Vice President and General Counsel
  Facsimile: (866) 390-2612
  E-mail: dsherman@taylormorrison.com

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

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York

USA 10019-6064

  Attention: John C. Kennedy
       Lawrence G. Wee
  Facsimile: (212) 757-3990
  E-mail: jkennedy@paulweiss.com
       lwee@paulweiss.com

if to TPG, to:

TPG Global, LLC

301 Commerce Street, Suite 3300

Fort Worth, TX

USA 76102

  Attention: Ronald Cami
  Facsimile: (415) 743-1501
  E-mail: rcami@tpg.com

 

11


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

Ropes & Gray LLP

The Prudential Tower

800 Boylston Street

Boston, Massachusetts

USA 02199

  Attention: Alfred O. Rose
       Julie H. Jones
  Facsimile: (617) 951-7050
  E-mail: alfred.rose@ropesgray.com
       julie.jones@ropesgray.com

if to Oaktree:

Oaktree Capital Management, L.P.

333 South Grand Ave., 28th Floor

Los Angeles, CA 90071

  Attention: Kenneth Liang
  Facsimile.: (213) 830-6293
  E-mail: kliang@oaktreecapital.com

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

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York

USA 10022

  Attention: George E.B. Maguire
       Jasmine Ball
  Facsimile: (212) 909-6836
  E-mail: gebmaguire@debevoise.com
       jball@debevoise.com

if to JHI, to:

JHI Holdings Limited Partnership

c/o JHI Advisory Inc.

Suite 3260 - 666 Burrard Street

Vancouver, British Columbia

Canada V6C 2X8

  Attention: G. Gail Edwards
  Facsimile: (604) 648-6685
  E-mail: gedwards@jhinvest.com

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

McCarthy Tétrault LLP

1300 - 777 Dunsmuir Street

Vancouver, British Columbia

Canada V7Y 1K2

  Attention: Cameron Belsher
  Facsimile: (604) 622-5674
  E-mail: cbelsher@mccarthy.ca

 

12


Section 4.8 Governing Law . THIS AGREEMENT AND ANY RELATED DISPUTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.

Section 4.9 Jurisdiction . ANY ACTION OR PROCEEDING AGAINST THE PARTIES RELATING IN ANY WAY TO THIS AGREEMENT MAY BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF DELAWARE OR (TO THE EXTENT SUBJECT MATTER JURISDICTION EXISTS THEREFORE) THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, AND THE PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF BOTH SUCH COURTS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. ANY ACTIONS OR PROCEEDINGS TO ENFORCE A JUDGMENT ISSUED BY ONE OF THE FOREGOING COURTS MAY BE ENFORCED IN ANY JURISDICTION.

Section 4.10 Waiver of Jury Trial . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HERETO WAIVES, AND COVENANTS THAT SUCH PARTY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH THE DEALINGS OF ANY SHAREHOLDER OR THE GENERAL PARTNER IN CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 4.10 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 4.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

Section 4.11 Specific Performance . It is hereby agreed and acknowledged that it will be impossible to measure in money the damages that would be suffered if the parties fail to comply with any of the obligations herein imposed on them by this Agreement and that, in the event of any such failure, an aggrieved party will be irreparably damaged and will not have an adequate remedy at law. Any such party shall therefore be entitled (in addition to any other remedy to which such party may be entitled at law or in equity) to injunctive relief, including specific performance, to enforce such obligations, without the posting of any bond, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law.

[Signature pages follow]

 

13


IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written.

 

Taylor Morrison Home Corporation
By:  

/s/ Darrell Sherman

Name:   Darrell Sherman
Title:   Vice President, General Counsel and Secretary

 

[Signature Page to U.S. Parent Governance Agreement]


Taylor Morrison Holdings, Inc.
By:  

/s/ Darrell Sherman

Name:   Darrell Sherman
Title:   Vice President, General Counsel and Secretary

 

[Signature Page to U.S. Parent Governance Agreement]


TPG TMM HOLDINGS II, L.P.
By:   TPG TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Ronald Cami

  Name:   Ronald Cami
  Title:   Vice President, and Secretary

 

[Signature Page to U.S. Parent Governance Agreement]


OCM TMM HOLDINGS II, L.P.
By:   OCM TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Derek Smith

  Name:   Derek Smith
  Title:   Authorized Signatory
By:  

/s/ Kenneth Liang

  Name:   Kenneth Liang
  Title:   Authorized Signatory

 

[Signature Page to U.S. Parent Governance Agreement]


JHI Holding Limited Partnership, by

its General Partner, JHI Advisory Ltd.

By:  

/s/ Joe S. Houssian

  Name:   Joe S. Houssian
  Title:   Director

 

[Signature Page to U.S. Parent Governance Agreement]

Exhibit 10.8

EXECUTION VERSION

 

 

 

CANADIAN PARENT GOVERNANCE AGREEMENT

BY AND AMONG

TAYLOR MORRISON HOME CORPORATION,

MONARCH COMMUNITIES INC.,

TPG TMM HOLDINGS II, L.P.,

OCM TMM HOLDINGS II, L.P.

AND

JHI HOLDING LIMITED PARTNERSHIP

D ATED AS OF A PRIL 9, 2013

 

 

 


TABLE OF CONTENTS

 

Article I DEFINITIONS

     2  

Section 1.1

 

Definitions

     2  

Section 1.2

 

Other Interpretive Provisions

     5  

Article II REPRESENTATIONS AND WARRANTIES

     5  

Section 2.1

 

Existence; Authority; Enforceability

     5  

Section 2.2

 

Absence of Conflicts

     5  

Section 2.3

 

Consents

     6  

Article III GOVERNANCE

     6  

Section 3.1

 

The Canadian Parent Board

     6  

Section 3.2

 

Canadian Parent Activities; Approvals

     7  

Article V GENERAL PROVISIONS

     8  

Section 4.1

 

Freedom to Pursue Opportunities

     8  

Section 4.2

 

Assignment; Benefit

     9  

Section 4.3

 

Termination

     9  

Section 4.4

 

Severability

     9  

Section 4.5

 

Entire Agreement; Amendment

     9  

Section 4.6

 

Counterparts

     10  

Section 4.7

 

Notices

     10  

Section 4.8

 

Governing Law

     13  

Section 4.9

 

Jurisdiction

     13  

Section 4.10

 

Waiver of Jury Trial

     13  

Section 4.11

 

Specific Performance

     13  

 

i


This CANADIAN PARENT GOVERNANCE AGREEMENT (as it may be amended from time to time in accordance with the terms hereof, the “ Agreement ”), dated as of April 9, 2013, is made by and among:

i. Taylor Morrison Home Corporation, a Delaware corporation (the “ Company ”);

ii. Monarch Communities Inc., a British Columbia corporation (the “ Canadian Parent ”);

iii. TPG TMM Holdings II, L.P., a Cayman Islands limited partnership (together with its Affiliates, “ TPG ”);

iv. OCM TMM Holdings II, L.P., a Cayman Islands limited partnership (together with its Affiliates, “ Oaktree ”); and

v. JHI Holding Limited Partnership, a British Columbia limited partnership (together with its Affiliates, “ JHI ”).

For purposes of this Agreement, each of TPG and Oaktree is a “ Principal Sponsor ” and each of TPG, Oaktree and JHI is an “ Investor ”.

RECITALS

WHEREAS, on July 13, 2011, TMM Holdings (G.P.) Inc., TMM Holdings Limited Partnership (the “ Partnership ”), the Canadian Parent and certain stockholders party thereto entered into a Governance Agreement (the “ Prior Agreement ”);

WHEREAS, pursuant to a Reorganization Agreement dated the date hereof, the Company, the Partnership, the Investors and certain other Persons have effected a series of reorganization transactions (collectively, the “ Reorganization Transactions ”);

WHEREAS, after giving effect to the Reorganization Transactions, the Principal Sponsors own limited partnership interests in TMM Holdings II Limited Partnership (“ New TMM Units ”) and shares of the Company’s Class B common stock, par value $0.00001 per share (the “ Class B Common Stock ”), which, subject to certain restrictions, are exchangeable from time to time at the option of the holder thereof for shares of the Company’s Class A common stock, par value $0.00001 per share (the “ Class A Common Stock ” and, together with the Class B Common Stock, the “ Common Stock ”) pursuant to an Exchange Agreement dated the date hereof;

WHEREAS, on the date hereof, the Company has priced an initial public offering of shares of its Class A Common Stock (the “ IPO ”) pursuant to an Underwriting Agreement dated the date hereof (the “ Underwriting Agreement ”);

WHEREAS, the Partnership owns 100% of the equity interests in Canadian Parent and Taylor Morrison Holdings, Inc., a Delaware corporation (“ U.S. Parent ”);

 

1


WHEREAS, the Prior Agreement is being terminated by the parties thereto as of the Closing; and

WHEREAS, the parties hereto desire to provide for the governance of the Canadian Parent.

NOW, THEREFORE, in consideration of the foregoing and the mutual promises, covenants and agreements of the parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions . As used in this Agreement, the following terms shall have the following meanings:

Affiliate ” means, with respect to any specified Person, (a) any Person that directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person or (b) in the event that the specified Person is a natural Person, a Member of the Immediate Family of such Person; provided that the Company, the Partnership, U.S. Parent, Canadian Parent and each of their respective subsidiaries shall be deemed not to be Affiliates of TPG, Oaktree or JHI. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

Agreement ” has the meaning set forth in the Preamble.

Business Day ” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in the City of New York.

Canadian Parent ” has the meaning set forth in the Recitals.

Canadian Parent Board ” means the board of directors (or equivalent) of the Canadian Parent.

Class A Common Stock ” has the meaning set forth in the Recitals.

Class B Common Stock ” has the meaning set forth in the Recitals.

Closing ” means the closing of the IPO.

Common Stock ” has the meaning set forth in the Recitals.

Company ” has the meaning set forth in the Preamble.

Company Board ” means the board of directors of the Company.

 

2


Company Shares ” means (i) all shares of Common Stock that are not then subject to vesting (including shares that were at one time subject to vesting to the extent they have vested), (ii) all shares of Common Stock issuable upon exercise, conversion or exchange of any option, warrant or convertible security that are not then subject to vesting (including shares that were at one time subject to vesting to the extent they have vested) (without double counting shares of Class A Common Stock issuable upon an exchange of shares of Class B Common Stock together with New TMM Units) and (iii) all shares of Common Stock directly or indirectly issued or issuable with respect to the securities referred to in clauses (i) or (ii) above by way of unit or stock dividend or unit or stock split, or in connection with a combination of units or shares, recapitalization, merger, consolidation or other reorganization.

Company Stockholders Agreement ” means the Company Stockholders Agreement, dated as of the date hereof, by and among the Company and the stockholders of the Company party thereto.

Debt Threshold ” means an amount equal to $50.0 million.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.

Fund Indemnitors ” has the meaning set forth in Section 3.1(d).

Indemnitee ” has the meaning set forth in Section 3.1(d).

Investor ” has the meaning set forth in the Preamble.

IPO ” has the meaning set forth in the Recitals

JHI ” has the meaning set forth in the Preamble.

JHI Designee ” has the meaning set forth in the Company Stockholders Agreement.

Loan Threshold ” means an amount equal to $50.0 million.

Member of the Immediate Family ” means, with respect to any natural Person, (a) each parent, spouse (but not including a former spouse or a spouse from whom such Partner is legally separated) or child (including those adopted) of such individual and (b) each trustee, solely in his or her capacity as trustee and so long as such trustee is reasonably satisfactory to the Canadian Parent, for a trust naming only one or more of the Persons listed in sub-clause (a) as beneficiaries.

Necessary Action ” shall mean, with respect to a specified result, all actions necessary to cause such result, including (i) voting or providing a written consent or proxy with respect to the Company Shares, (ii) causing the adoption of stockholders’ resolutions and amendments to the organizational documents of the Company, (iii) executing agreements and instruments, and (iv) making, or causing to be made, with governmental, administrative or regulatory authorities, all filings, registrations or similar actions that are required to achieve such result.

 

3


Oaktree ” has the meaning set forth in the Preamble.

Partnership ” has the meaning set forth in the Preamble.

Person ” means any individual, partnership, limited liability company, corporation, trust, association, estate, unincorporated organization or government or any agency or political subdivision thereof.

Principal Sponsor ” has the meaning set forth in the Preamble.

Principal Sponsor Designee ” has the meaning set forth in the Company Stockholders Agreement.

Principal Sponsor Minimum ” means, with respect to a Principal Sponsor, a number of shares of Common Stock equal to at least 50% of the outstanding shares of Common Stock owned by such Principal Sponsor as of the closing of all of the transactions contemplated by the Underwriting Agreement and the Put/Call Agreement, or, if no such closing occurs prior to June 30, 2013, the Closing.

Purchase Consideration Threshold ” means an amount equal to $50.0 million.

Put/Call Agreement ” means the Put/Call Agreement, dated as of the date hereof, by and among TPG, Oaktree, TMM Holdings II Limited Partnership and the Company.

Representatives ” means, with respect to any Person, any of such Person’s officers, directors, employees, agents, attorneys, accountants, actuaries, consultants or financial advisors or other Person associated with, or acting on behalf of, such Person.

Requisite Investor Approval ” means (a) for so long as each Principal Sponsor holds at least the Principal Sponsor Minimum, the approval of a majority of the Canadian Parent Board, including in each case at least one Principal Sponsor Designee of each Principal Sponsor; (b) to the extent only one Principal Sponsor holds the Principal Sponsor Minimum, the approval of a majority of the Canadian Parent Board, including in each case at least one Principal Sponsor Designee of such Principal Sponsor. At such time as neither Principal Sponsor holds at least the Principal Sponsor Minimum, any action requiring “Requisite Investor Approval” shall be determined by Canadian Parent or the Canadian Parent Board in accordance with applicable law.

Sale Consideration Threshold ” means an amount equal to $50.0 million.

Securities Act ” means the Securities Act of 1933, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.

TPG ” has the meaning set forth in the Preamble.

 

4


Underwriting Agreement ” has the meaning set forth in the Recitals.

U.S. Parent ” has the meaning set forth in the Preamble.

U.S. Parent Governance Agreement ” means the U.S. Parent Governance Agreement, dated as of the date hereof, by and among the Company, the Partnership, U.S. Parent and the other parties thereto.

Section 1.2 Other Interpretive Provisions . (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

(b) The words “ hereof ”, “ herein ”, “ hereunder ” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and any subsection and section references are to this Agreement unless otherwise specified.

(c) The term “ including ” is not limiting and means “ including without limitation .”

(d) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

(e) Whenever the context requires, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

Each of the parties to this Agreement hereby represents and warrants to each other party to this Agreement that as of the date such party executes this Agreement:

Section 2.1 Existence; Authority; Enforceability . Such party has the power and authority to enter into this Agreement and to carry out its obligations hereunder. Such party is duly organized and validly existing under the laws of its jurisdiction of organization, and the execution of this Agreement, and the consummation of the transactions contemplated herein, have been authorized by all necessary action on the part of its board of directors (or equivalent) and shareholders (or other holders of equity interests), if required, and no other act or proceeding on its part is necessary to authorize the execution of this Agreement or the consummation of any of the transactions contemplated hereby. This Agreement has been duly executed by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

Section 2.2 Absence of Conflicts . The execution and delivery by such party of this Agreement and the performance of its obligations hereunder does not and will not (a) conflict with, or result in the breach of any provision of the constitutive documents of such party, (b) result in any violation, breach, conflict, default or an event of default (or an event which with notice, lapse of time, or both, would constitute a default or an event of default), or give rise to any right of acceleration or termination or any additional payment obligation, under the terms of any contract, agreement or permit to which such party is a party or by which such party’s assets or operations are bound or affected, or (c) violate any law applicable to such party.

 

5


Section 2.3 Consents . Other than as expressly required herein or any consents which have already been obtained, no consent, waiver, approval, authorization, exemption, registration, license or declaration is required to be made or obtained by such party in connection with (a) the execution, delivery or performance of this Agreement or (b) the consummation of any of the transactions contemplated herein.

ARTICLE III

GOVERNANCE

Section 3.1 The Canadian Parent Board .

(a) Composition of the Canadian Parent Board . The Company and Canadian Parent shall take all Necessary Action to cause the composition of the Canadian Parent Board to be identical at all times to the composition of the Company Board; provided , that, notwithstanding anything to the contrary set forth in this Section 3.1(a), in the event that a Principal Sponsor Designee or JHI Designee is not elected to the Company Board at the applicable annual or special meeting of the shareholders at which such nominee is up for election (or re-election) to the Company Board, the Company and Canadian Parent shall take all Necessary Action to cause such Principal Sponsor Designee or JHI Designee to be appointed or elected to the Canadian Parent Board; provided , further , that the Company shall take all Necessary Action to fill any vacancy caused by the removal or resignation of any such Principal Sponsor Designee or JHI Designee with a replacement director designated by the applicable Principal Sponsor or JHI, as applicable, unless the election or appointment of such a replacement would result in a number of directors designated by such Investor in excess of the number of directors that such Investor is then entitled to designate for election pursuant to Section 3.1(b) or Section 3.1(c) of the Company Stockholders Agreement, as applicable.

(b) Composition of Canadian Parent Board Committees . The Company and Canadian Parent shall take all Necessary Action to cause there to be an audit committee, a compensation committee and a nominating and governance committee of the Canadian Parent Board in addition to such other committees of the Canadian Parent Board as the Canadian Parent Board determines. Subject to applicable laws and stock exchange regulations, each Principal Sponsor shall have the right to have a representative appointed to serve on each committee of the Canadian Parent Board for so long as such Principal Sponsor shall have the right to designate at least one (1) director for election to the Company Board. Subject to applicable laws and stock exchange regulations and for so long as such Principal Sponsor shall have the right to designate at least one (1) director for election to the Company Board, each Principal Sponsor shall have the right to have a representative appointed as an observer to any committee of the Canadian Parent Board to which such Principal Sponsor (i) does not elect to have a representative appointed or (ii) is prohibited by applicable laws or stock exchange regulations from having a representative appointed.

 

6


(c) Reimbursement of Expenses . Canadian Parent shall, and shall cause each of its direct and indirect subsidiaries to, reimburse their directors for all reasonable out-of-pocket expenses incurred in connection with their participation in the meetings of the Canadian Parent Board or any committees thereof, including reasonable travel, lodging and meal expenses.

(d) D&O Insurance; Indemnification Priority . Canadian Parent shall obtain customary director and officer indemnity insurance on commercially reasonable terms. The Company and Canadian Parent hereby acknowledge that any director, officer or other indemnified person covered by any such indemnity insurance policy (any such Person, an “ Indemnitee ”) may have certain rights to indemnification, advancement of expenses and/or insurance provided by TPG, Oaktree or one or more of their respective Affiliates (collectively, the “ Fund Indemnitors ”). The Company and Canadian Parent hereby (i) agree that the Company, the Partnership, Canadian Parent and their respective direct and indirect subsidiaries shall be the indemnitors of first resort (i.e., their respective obligations to an Indemnitee shall be primary and any obligation of any Fund Indemnitor to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee shall be secondary) and the obligation of the Company, the Partnership, Canadian Parent and their respective direct and indirect subsidiaries to indemnify and advance expenses to an Indemnitee shall be joint and several, and (ii) irrevocably waive, relinquish and release the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company and Canadian Parent further agree that no advancement or payment by the Fund Indemnitors on behalf of an Indemnitee with respect to any claim for which such Indemnitee has sought indemnification from the Company or Canadian Parent, as the case may be, shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or to be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Indemnitee against the Company and Canadian Parent as the case may be.

Section 3.2 Canadian Parent Activities; Approvals .

(a) Canadian Parent shall not take, and shall cause each of its direct and indirect subsidiaries not to take, any of the following actions without prior Requisite Investor Approval:

 

  i. Any transaction or series of related transactions (i) in which any Person or Persons (other than TPG, Oaktree, the Partnership or the Company) acquires in excess of 50% of the then outstanding shares of capital stock of Canadian Parent (whether by merger, consolidation, sale or transfer of partnership interests, tender offer, exchange offer, reorganization, recapitalization or otherwise) or (ii) following which any Person or Persons (other than TPG, Oaktree, the Partnership or the Company) have the direct or indirect power to elect a majority of the members of the board of directors (or equivalent) of Canadian Parent;

 

  ii.

Any transaction or series of related transactions involving the sale, lease, exchange or other disposal by Canadian Parent or any of its direct or indirect subsidiaries of any of their respective assets for consideration having a fair market value (as reasonably determined by the Canadian

 

7


  Parent Board) in excess of the Sale Consideration Threshold, other than intercompany transactions between and among direct or indirect wholly-owned subsidiaries of the Partnership;

 

  iii. Any transaction or series of related transactions involving the purchase, rent, license, exchange or other acquisition by Canadian Parent or any of its direct or indirect subsidiaries of any assets (including securities) for consideration having a fair market value (as reasonably determined by the Canadian Parent Board) in excess of the Purchase Consideration Threshold, other than intercompany transactions between and among direct or indirect wholly-owned subsidiaries of the Partnership;

 

  iv. The hiring or termination of the chief executive officer of Canadian Parent;

 

  v. (A) any incurrence of indebtedness by Canadian Parent or any of its direct or indirect subsidiaries if, after taking into account the incurrence of such indebtedness, the aggregate outstanding indebtedness of Canadian Parent and its direct and indirect subsidiaries would exceed the Debt Threshold, or (B) the making of any loan, advance or capital contribution to any Person (other than Canadian Parent or any of its direct or indirect subsidiaries) by Canadian Parent or any of its direct or indirect subsidiaries in excess of the Loan Threshold; and

 

  vi. Any change in the composition of the Canadian Parent Board other than in accordance with Section 3.1(a).

Each of TPG and Oaktree acknowledges and agrees that Requisite Investor Approval has been obtained with respect to all actions taken and transactions undertaken in connection with the IPO.

ARTICLE IV

GENERAL PROVISIONS

Section 4.1 Freedom to Pursue Opportunities . The parties expressly acknowledge and agree that: (i) each Investor, each Representative of an Investor and each director or officer of the Company, the Partnership, Canadian Parent or any of their respective subsidiaries that is an Affiliate of an Investor (each, an “ Investor Designee ”) has the right to, and has no duty (contractual or otherwise) not to, (x) directly or indirectly engage in the same or similar business activities or lines of business as the Company, the Partnership, Canadian Parent or any of their respective subsidiaries, including those deemed to be competing with the Company, the Partnership, Canadian Parent or any of their respective subsidiaries, or (y) directly or indirectly do business with any client, customer or supplier of the Company, the Partnership or any of their respective subsidiaries; and (ii) in the event that any Investor, any Representative of an Investor or any Investor Designee acquires knowledge of a potential transaction or matter that may be a corporate opportunity for the Company, the Partnership, Canadian Parent or any of their respective subsidiaries, such Investor, Representative, or Investor Designee shall have no duty

 

8


(contractual or otherwise) to communicate or present such corporate opportunity to the Company, the Partnership, Canadian Parent or any of their respective subsidiaries, as the case may be, and, notwithstanding any provision of this Agreement to the contrary, shall not be liable to the Company, the Partnership, Canadian Parent or any of their respective Affiliates, subsidiaries, stockholders or other equity holders for breach of any duty (contractual or otherwise) by reason of the fact that such Investor, Representative or Investor Designee, directly or indirectly, pursues or acquires such opportunity for itself, directs such opportunity to another Person, or does not present such opportunity to the Company, the Partnership, Canadian Parent or any of their respective subsidiaries. For the avoidance of doubt, the provisions of this Section 4.1 shall have independent effect with respect to, and shall not be construed as being in lieu of or otherwise limiting, any separate obligations of any Person under any agreement between such Person and Canadian Parent and/or any direct or indirect subsidiary thereof, including any agreement related to noncompetition, nonsolicitation, confidentiality or other restrictions on the activities or operations of such Person.

Section 4.2 Assignment; Benefit .

(a) The rights and obligations hereunder shall not be assignable without the prior written consent of the other parties hereto; provided that each of TPG and Oaktree may assign its rights and obligations hereunder to any of its respective Affiliates without the prior written consent of the other parties hereto. Any attempted assignment of rights or obligations in violation of this Section 4.2 shall be null and void.

(b) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their respective successors and permitted assigns, and there shall be no third-party beneficiaries to this Agreement other than the Indemnitees and the Fund Indemnitors under Section 3.1(l) and the Investors, their Representatives and the Investor Designees under Section 4.1.

Section 4.3 Termination . If not otherwise stipulated, this Agreement shall terminate automatically (without any action by any party hereto) as to each Investor as of the later of (i) when such Investor no longer owns any shares of Common Stock, or (ii) when such Investor no longer has the right to nominate any directors to the Company Board pursuant to Article III hereof.

Section 4.4 Severability . In the event that any provision of this Agreement shall be invalid, illegal or unenforceable such provision shall be construed by limiting it so as to be valid, legal and enforceable to the maximum extent provided by law and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 4.5 Entire Agreement; Amendment .

(a) This Agreement (together with the Company Stockholders Agreement and the U.S. Parent Governance Agreement) sets forth the entire understanding and agreement between the parties with respect to the transactions contemplated herein and supersedes and replaces any prior understanding, agreement or statement of intent, in each case written or oral, of any kind and every nature with respect hereto. Except as set forth above, there are no other

 

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agreements with respect to the governance of Canadian Parent among the Company, Canadian Parent, TPG, Oaktree and JHI. This Agreement or any provision hereof may only be amended, modified or waived, in whole or in part, at any time by an instrument in writing signed by each of the Principal Sponsors as to which this Agreement has not terminated; provided that the prior written consent of any Investor shall be required for any amendment, modification or waiver that would have a disproportionate and adverse effect in any material respect on the rights of such Investor relative to the other Investors.

(b) No waiver of any breach of any of the terms of this Agreement shall be effective unless such waiver is expressly made in writing and executed and delivered by the party against whom such waiver is claimed. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. Except as otherwise expressly provided herein, no failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder, or otherwise available in respect hereof at law or in equity, shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

Section 4.6 Counterparts . This Agreement may be executed in any number of separate counterparts each of which when so executed shall be deemed to be an original and all of which together shall constitute one and the same agreement. Counterpart signature pages to this Agreement may be delivered by facsimile or electronic delivery ( i.e ., by email of a PDF signature page) and each such counterpart signature page will constitute an original for all purposes.

Section 4.7 Notices . Unless otherwise specified herein, all notices, consents, approvals, reports, designations, requests, waivers, elections and other communications authorized or required to be given pursuant to this Agreement shall be in writing and shall be given, made or delivered by personal hand-delivery, by facsimile transmission, by electronic mail, by mailing the same in a sealed envelope, registered first-class mail, postage prepaid, return receipt requested, or by air courier guaranteeing overnight delivery (and such notice shall be deemed to have been duly given, made or delivered (a) on the date received, if delivered by personal hand delivery, (b) on the date received, if delivered by facsimile transmission, by electronic mail or by registered first-class mail prior to 5:00 p.m. prevailing local time on a Business Day, or if delivered after 5:00 p.m. prevailing local time on a Business Day or on other than a Business Day, on the first Business Day thereafter and (c) two (2) Business Days after being sent by air courier guaranteeing overnight delivery), at the following addresses (or at such other address as shall be specified by like notice):

if to the Company to:

Taylor Morrison Home Corporation

4900 North Scottsdale Road, Suite 2000

Scottsdale, AZ 85251

  Attention: Darrell Sherman,
       Vice President and General Counsel
  Facsimile: (866) 390-2612
  E-mail: dsherman@taylormorrison.com

 

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

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York

USA 10019-6064

  Attention: John C. Kennedy
       Lawrence G. Wee
  Facsimile: (212) 757-3990
  E-mail: jkennedy@paulweiss.com
       lwee@paulweiss.com

if to Canadian Parent to:

Monarch Communities Inc.

c/o Taylor Morrison Home Corporation

4900 North Scottsdale Road, Suite 2000

Scottsdale, AZ 85251

  Attention: Darrell Sherman,
       Vice President and General Counsel
  Facsimile: (866) 390-2612
  E-mail: dsherman@taylormorrison.com

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

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York

USA 10019-6064

  Attention: John C. Kennedy
       Lawrence G. Wee
  Facsimile: (212) 757-3990
  E-mail: jkennedy@paulweiss.com
       lwee@paulweiss.com

if to TPG, to:

TPG Global, LLC

301 Commerce Street, Suite 3300

Fort Worth, TX

USA 76102

  Attention: Ronald Cami
  Facsimile: (415) 743-1501
  E-mail: rcami@tpg.com

 

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

Ropes & Gray LLP

The Prudential Tower

800 Boylston Street

Boston, Massachusetts

USA 02199

  Attention: Alfred O. Rose
       Julie H. Jones
  Facsimile: (617) 951-7050
  E-mail: alfred.rose@ropesgray.com
       julie.jones@ropesgray.com

if to Oaktree:

Oaktree Capital Management, L.P.

333 South Grand Ave., 28th Floor

Los Angeles, CA 90071

  Attention: Kenneth Liang
  Facsimile.: (213) 830-6293
  E-mail: kliang@oaktreecapital.com

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

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York

USA 10022

  Attention: George E.B. Maguire
       Jasmine Ball
  Facsimile: (212) 909-6836
  E-mail: gebmaguire@debevoise.com
       jball@debevoise.com

if to JHI, to:

JHI Holdings Limited Partnership

c/o JHI Advisory Inc.

Suite 3260 - 666 Burrard Street

Vancouver, British Columbia

Canada V6C 2X8

  Attention: G. Gail Edwards
  Facsimile: (604) 648-6685
  E-mail: gedwards@jhinvest.com

 

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

McCarthy Tétrault LLP

1300 - 777 Dunsmuir Street

Vancouver, British Columbia

Canada V7Y 1K2

  Attention: Cameron Belsher
  Facsimile: (604) 622-5674
  E-mail: cbelsher@mccarthy.ca

Section 4.8 Governing Law . THIS AGREEMENT AND ANY RELATED DISPUTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.

Section 4.9 Jurisdiction . ANY ACTION OR PROCEEDING AGAINST THE PARTIES RELATING IN ANY WAY TO THIS AGREEMENT MAY BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF DELAWARE OR (TO THE EXTENT SUBJECT MATTER JURISDICTION EXISTS THEREFORE) THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, AND THE PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF BOTH SUCH COURTS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. ANY ACTIONS OR PROCEEDINGS TO ENFORCE A JUDGMENT ISSUED BY ONE OF THE FOREGOING COURTS MAY BE ENFORCED IN ANY JURISDICTION.

Section 4.10 Waiver of Jury Trial . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HERETO WAIVES, AND COVENANTS THAT SUCH PARTY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH THE DEALINGS OF ANY SHAREHOLDER OR THE GENERAL PARTNER IN CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 4.10 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 4.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

Section 4.11 Specific Performance . It is hereby agreed and acknowledged that it will be impossible to measure in money the damages that would be suffered if the parties fail to comply with any of the obligations herein imposed on them by this Agreement and that, in the event of any such failure, an aggrieved party will be irreparably damaged and will not have an adequate remedy at law. Any such party shall therefore be entitled (in addition to any other

 

13


remedy to which such party may be entitled at law or in equity) to injunctive relief, including specific performance, to enforce such obligations, without the posting of any bond, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law.

[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written.

 

Taylor Morrison Home Corporation
By:  

/s/ Darrell Sherman

Name:   Darrell Sherman
Title:   Vice President, General Counsel and Secretary

 

[Signature Page to Canadian Parent Governance Agreement]


Monarch Communities Inc.
By:  

/s/ Darrell Sherman

Name:   Darrell Sherman
Title:   Vice President, General Counsel and Secretary

 

[Signature Page to Canadian Parent Governance Agreement]


TPG TMM HOLDINGS II, L.P.
By:   TPG TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Ronald Cami

  Name:   Ronald Cami
  Title:   Vice President and Secretary

 

[Signature Page to Canadian Parent Governance Agreement]


OCM TMM HOLDINGS II, L.P.
By:   OCM TMM Holdings II GP, ULC,
  its general partner
By:  

/s/ Derek Smith

  Name:   Derek Smith
  Title:   Authorized Signatory
By:  

/s/ Kenneth Liang

  Name:   Kenneth Liang
  Title:   Authorized Signatory

 

[Signature Page to Canadian Parent Governance Agreement]


JHI Holding Limited Partnership, by
its General Partner, JHI Advisory Ltd.
By:  

/s/ Joe S. Houssian

  Name:   Joe S. Houssian
  Title:   Director

 

[Signature Page to Canadian Parent Governance Agreement]

Exhibit 10.9

EXECUTION VERSION

AMENDMENT AGREEMENT dated as of April 12, 2013 (this “ Agreement ”), to the Credit Agreement dated as of July 13, 2011 (as amended and restated as of April 13, 2012 and as thereafter amended as of August 15, 2012 and December 27, 2012, the “ Existing Credit Agreement ”), among TAYLOR MORRISON COMMUNITIES, INC., a Delaware corporation (the “ U.S. Borrower ”), as co-borrower, MONARCH CORPORATION, an Ontario corporation (the “ Canadian Borrower ” and, together with the U.S. Borrower, the “ Co-Borrowers ”), TMM HOLDINGS LIMITED PARTNERSHIP, a British Columbia limited partnership (“ Holdings ”), MONARCH COMMUNITIES INC., a company continued under the laws of the province of British Columbia (“ Canada Holdings ”), MONARCH PARENT INC., a company incorporated under the laws of the province of British Columbia (“ Canada Intermediate Holdings ”), TAYLOR MORRISON HOLDINGS, INC., a Delaware corporation (“ U.S. Holdings ”), TAYLOR MORRISON FINANCE, INC., a Delaware corporation (“ U.S. FinCo ”), the lenders party thereto and CREDIT SUISSE AG, as administrative agent (in such capacity, the “ Administrative Agent ”), as collateral agent for the Lenders (in such capacity, the “ Existing Collateral Agent ”), as swing line lender and as issuing bank.

A. Pursuant to the Existing Credit Agreement, the Lenders and Issuing Banks have extended, and have agreed to extend, credit to the Co-Borrowers.

B. The Co-Borrowers have requested that the total Commitments under the Existing Credit Agreement (as amended hereby) be increased to $400,000,000.

C. Each Lender is willing to provide the Commitment set forth opposite its name on Schedule 1 hereto on the terms and subject to the conditions set forth in this Agreement and the Existing Credit Agreement, as amended hereby, and subject to the satisfaction of the conditions precedent to effectiveness referred to in Section 4 hereof.

D. Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Subsidiary Guarantors are party to one or more of the Collateral Documents, pursuant to which Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Subsidiary Guarantors have provided security for the Obligations of the Co-Borrowers under the Existing Credit Agreement.

E. Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Subsidiary Guarantors have requested that the Existing Collateral Agent release and terminate all security interests and Liens that the Loan Parties have granted to the Existing Collateral Agent, for its benefit and for the benefit of the Secured Parties, pursuant to the Collateral Documents and, in connection therewith, the Existing Collateral Agent desires to resign from its capacity as the collateral agent for the Lenders.


F. Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Lenders (which includes each Lender under the Existing Credit Agreement) desire to (i) amend and restate the Existing Credit Agreement in the form of the Second Amended and Restated Credit Agreement attached hereto as Exhibit A (the “ Restated Credit Agreement ”) and (ii) amend and restate the Guaranty dated as of July 13, 2011, among each of the signatories thereto in favor of Credit Suisse AG on behalf of the Secured Parties (the “ Existing Guaranty ”) in the form of the Amended and Restated Guaranty attached hereto as Exhibit B (the “ Restated Guaranty ’), in each case, subject to the satisfaction of the conditions precedent to effectiveness referred to in Section 4 hereof.

G. The Lenders under the Existing Credit Agreement are willing to agree to (i) the release of all of the Collateral, (ii) the amendment and restatement of the Existing Credit Agreement as provided herein and (iii) the amendment and restatement of the Existing Guaranty as provided herein, on the terms set forth herein and in the Restated Credit Agreement and subject to the conditions set forth herein.

H. For purposes of this Agreement, the following capitalized terms used but not defined in this Agreement shall have the meanings given them in the Existing Credit Agreement: Collateral, Collateral Documents and Secured Parties. Unless the context otherwise requires, all other capitalized terms used but not defined herein shall have the meanings given them in the Restated Credit Agreement.

Accordingly, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Additional Commitments. (a) Schedule 1 hereto sets forth the Commitment of each Lender as of the Restatement Effective Date (as defined below). The Commitment of each Lender shall be several and not joint.

(b) If, on the Restatement Effective Date, there are any Loans outstanding under the Existing Credit Agreement, such Loans shall, upon the effectiveness of this Agreement, be prepaid from the proceeds of new Loans made under the Restated Credit Agreement, which prepayment shall be accompanied by accrued interest on the Loans being prepaid and any costs incurred by any Lender in accordance with Section 2.4 of the Existing Credit Agreement.

(c) Upon the effectiveness of this Agreement on the Restatement Effective Date, each Lender’s participations in Letters of Credit outstanding under the Existing Credit Agreement on such date shall automatically and without further action be deemed to be held by the Lenders under the Restated Credit Agreement in accordance with their Pro Rata Share.

 

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SECTION 2. Amendment and Restatement of Existing Credit Agreement; Amendment and Restatement of the Existing Guaranty . Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Lenders agree that:

(a) Effective as of the Restatement Effective Date:

(i) the Existing Credit Agreement is hereby amended and restated in its entirety to be in the form of the Restated Credit Agreement attached hereto as Exhibit A ;

(ii) all Exhibits and Schedules to the Existing Credit Agreement are hereby amended and restated to be in the form of the corresponding Exhibits and Schedules attached to the Restated Credit Agreement (or, to the extent there is no corresponding Schedule or Exhibit, shall be deemed to be deleted); and

(iii) the Existing Guaranty is hereby amended and restated in its entirety to be in the form of the Restated Guaranty attached hereto as Exhibit B .

(b) (i) As used in the Restated Credit Agreement, the terms “Agreement”, “this Agreement”, “herein”, “hereinafter”, “hereto”, “hereof”, and words of similar import shall, unless the context otherwise requires, mean, from and after the replacement of the terms of the Existing Credit Agreement by the terms of the Restated Credit Agreement, the Restated Credit Agreement and (ii) as used in the Restated Guaranty, the terms “Guaranty”, “this Guaranty”, “herein”, “hereinafter”, “hereto”, “hereof”, and words of similar import shall, unless the context otherwise requires, mean, from and after the replacement of the terms of the Existing Guaranty by the terms of the Restated Guaranty, the Restated Guaranty.

SECTION 3. Representations and Warranties . To induce the other parties hereto to enter into this Agreement, each of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers, jointly and severally, hereby represents and warrants to each of the other parties hereto that, as of the Restatement Effective Date:

(a) Each Loan Party (i) has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of this Agreement and has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of this Agreement, and (ii) has duly executed and delivered this Agreement and this Agreement constitutes the legal, valid and binding obligation of such Loan Party enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law).

 

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(b) (i) The representations and warranties set forth in Section 5 of the Restated Credit Agreement are true and correct in all material respects (unless qualified as to materiality or Material Adverse Effect, in which case such representations and warranties shall be true and correct in all respects) on and as of the Restatement Effective Date to the same extent as though made on and as of the Restatement Effective Date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties were true and correct in all material respects (unless qualified as to materiality or Material Adverse Effect, in which case such representations and warranties were true and correct in all respects) on and as of such earlier date, and (ii) no Default or Event of Default has occurred and is continuing.

SECTION 4. Effectiveness . This Agreement shall become effective on the date (the “ Restatement Effective Date ”) on which:

(a) The Administrative Agent (or its counsel) shall have received from each of the Loan Parties, each of the Lenders, each of the Issuing Banks and the Administrative Agent and Existing Collateral Agent either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.

(b) The Administrative Agent shall have received from each Loan Party:

(i) Copies of its certificate or articles of incorporation, articles of organization, certificate of limited partnership, certificate of formation or equivalent organizational documentation (as applicable) certified by the applicable Governmental Authority (or, in the case of any Canadian Loan Party, by an officer or director of such Loan Party or its general partner), together with a good standing certificate, certificate of status, certificate of compliance or equivalent certification (in the case of any Canadian Loan Party, if available in such Canadian Loan Party’s jurisdiction of incorporation, organization or formation) from the applicable Governmental Authority of its jurisdiction of incorporation, organization or formation, each dated a recent date prior to the Restatement Effective Date;

(ii) Copies of its Organizational Documents (other than those covered in clause (i) above and excluding the limited partnership agreement of Holdings), certified as of the Restatement Effective Date by its corporate secretary or an assistant secretary (or, in the case of any Canadian Loan Party, by an officer or director of such Loan Party or its general partner);

 

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(iii) Copies of its duly adopted resolutions approving and authorizing the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party that are to be delivered on the Restatement Effective Date, certified as of the Restatement Effective Date by its corporate secretary or an assistant secretary (or, in the case of any Canadian Loan Party, by an officer or director of such Loan Party or its general partner) as being in full force and effect without modification or amendment; and

(iv) An incumbency certificate of its officers (or, in the case of Holdings, of the directors of its general partner) executing this Agreement and the other Loan Documents to which it is a party that are to be delivered on the Restatement Effective Date.

(c) Holdings shall have delivered to the Administrative Agent a solvency certificate on behalf of Holdings and the Co-Borrowers from the treasurer of Holdings in customary form and substance reasonably satisfactory to the Arrangers with respect to Holdings and its Subsidiaries (on a consolidated basis).

(d) The Co-Borrowers shall have paid to the Administrative Agent, the Arrangers or the Lenders, as applicable, any and all costs, fees and expenses (including reasonable and documented legal fees and expenses), other than accrued and unpaid fees and interest payable pursuant to clause (e) below, to the extent then due and owing or accrued and not yet paid under or in connection with the Existing Credit Agreement, the Restated Credit Agreement, the other Loan Documents or any of the documents, instruments, agreements or letter agreements executed in connection herewith (and in the case of costs and expenses, to the extent a written invoice therefor is delivered to the Co-Borrowers not later than two Business Days prior to the Restatement Effective Date).

(e) The Co-Borrowers shall have paid to the Administrative Agent all accrued and unpaid fees and interest with respect to the Loans, outstanding Letters of Credit and Commitments under the Existing Credit Agreement up to but excluding the Restatement Effective Date.

(f) The Administrative Agent and its counsel shall have received executed copies for the Administrative Agent of favorable written opinions of Paul, Weiss, Rifkind, Wharton & Garrison LLP, counsel for the Loan Parties, McCarthy Tétrault LLP, counsel for the Loan Parties, and each local counsel listed on Schedule 2, in each case, in form and substance reasonably satisfactory to the Administrative Agent and its counsel, dated as of the Restatement Effective Date.

 

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(g) On or before the date five Business Days prior to the Restatement Effective Date, Holdings shall have delivered or caused to be delivered to the Administrative Agent and the Lenders all documentation, information and certifications as have been reasonably requested in writing not less than ten days prior to the Restatement Effective Date by the Administrative Agent or the Lenders as being required, in their reasonable determination, by applicable Governmental Authorities under applicable “know your customer” and anti-money laundering rules and regulations (including the USA PATRIOT Act).

(h) The representations and warranties set forth in Section 3 shall be true and correct, and the Administrative Agent shall have received a certificate to that effect dated as of the Restatement Effective Date and executed by a Responsible Officer of each Loan Party.

(i) The Reorganization Transactions and the IPO shall have been, or substantially simultaneously with the effectiveness of this Agreement on the Restatement Effective Date shall be, consummated in accordance with Applicable Law.

The Administrative Agent shall notify the Co-Borrowers and the Lenders of the Restatement Effective Date, and such notice shall be conclusive and binding.

SECTION 5. Release of Liens; Delivery and Release of Collateral; Termination of Collateral Documents . (a) Effective as of the Restatement Effective Date, (i) all of the right, title and interest (including, without limitation, all security interests and other Liens) of the Existing Collateral Agent and the Secured Parties in and to all of the Collateral in which the Loan Parties granted the Existing Collateral Agent, for its benefit and for the benefit of the Secured Parties, a security interest pursuant to the Collateral Documents is hereby released and terminated and (ii) the Existing Collateral Agent shall promptly deliver to the Co-Borrowers (or their designees) all of the tangible Collateral in its possession.

(b) As of the Restatement Effective Date, (x) this Agreement shall constitute the Existing Collateral Agent’s signed or otherwise authenticated authorization for any Co-Borrower or other Loan Party (or their respective designees), as applicable, to file Uniform Commercial Code termination statements for those Uniform Commercial Code filings made by the Existing Collateral Agent pursuant to the Collateral Documents, and to discharge any registrations made in favor of the Existing Collateral Agent against any Loan Party in the British Columbia and Ontario personal property registries in connection with the Collateral Documents, and (y) the following documents shall be promptly executed and/or delivered to the U.S. Borrower (or its designee), without recourse to or warranty by the Existing Collateral Agent or any Secured Party:

(i) any and all securities and debt instruments and related powers and transfer instruments pledged to and in the possession of the Existing Collateral Agent or any of its sub-agents, for its benefit and for the benefit of the Secured Parties, by any Loan Party pursuant to the Existing Credit Agreement or any Collateral Document;

 

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(ii) releases of (or powers authorizing the release of) each of the mortgages and deeds of trust granted to the Existing Collateral Agent, for its benefit and for the benefit of the Secured Parties, by any Loan Party; and

(iii) releases and/or terminations of the security interests held by the Existing Collateral Agent, for its benefit and for the benefit of the Secured Parties, in the patents, trademarks and copyrights of any Loan Party.

(c) The Existing Collateral Agent further agrees to promptly take all additional actions and execute and/or deliver all additional documentation reasonably requested by the Co-Borrowers (or any of their representatives) to evidence the release of its liens and security interests in all of the assets and property securing the Obligations, all at the sole expense of the Co-Borrowers and without representation or warranty by, or recourse to, the Existing Collateral Agent.

(d) Effective as of the Restatement Effective Date, the parties hereto hereby terminate the Collateral Documents, and the Collateral Documents shall be of no further force or effect other than the provisions therein that expressly survive the termination thereof.

SECTION 6. Resignation of the Collateral Agent; Matters Relating to the Collateral Agent . (a) Effective as of the Restatement Effective Date, the Existing Collateral Agent hereby resigns as the collateral agent for the Lenders. On and after the Restatement Effective Date, Credit Suisse AG shall be discharged from its duties and obligations as the collateral agent for the Lenders.

(b) Notwithstanding the resignation of the Existing Collateral Agent effected pursuant hereto, the provisions of Section 9 (Agents) and Section 10.2 (Expenses; Indemnity; Damage Waiver) of the Existing Credit Agreement (in each case, as in effect immediately prior to the Restatement Effective Date), and all other indemnification, expense reimbursement and exculpatory provisions set forth in the Loan Documents (as defined in the Existing Credit Agreement), shall continue in effect for the benefit of the Existing Collateral Agent, each of its sub-agents and each Related Party of any of the foregoing in respect of any actions taken or omitted to be taken by it while it was acting in its capacity as collateral agent for the Lenders or in respect of any actions taken or omitted to be taken hereunder.

SECTION 7. Effect of Agreement . On and after the Restatement Effective Date, each reference to the Existing Credit Agreement in any Loan Document shall be deemed to be a reference to the Restated Credit Agreement. Nothing herein shall be deemed to entitle any Loan Party to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Existing Credit Agreement, the Restated Credit Agreement or any other Loan Document in similar or different circumstances. This Agreement shall constitute a “Loan Document” for all purposes of the Restated Credit Agreement and the other Loan Documents.

 

7


SECTION 8. Acknowledgement and Consent. Each of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, each Co-Borrower and each of the Subsidiary Guarantors identified on the signature pages hereto (collectively, Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and such Subsidiary Guarantors, the “ Reaffirming Loan Parties ”) hereby acknowledges that it expects to receive substantial direct and indirect benefits as a result of this Agreement and the transactions contemplated hereby. Each Reaffirming Loan Party hereby consents to this Agreement and the transactions contemplated hereby, and hereby confirms and agrees that (a) its respective guarantees under each of the Loan Documents to which it is party, notwithstanding the effectiveness of this Agreement and the transactions contemplated hereby, shall continue in full force and effect and shall accrue to the benefit of the Guaranteed Parties with respect to the Obligations (as the same may be increased from time to time, including pursuant to this Agreement), (b) notwithstanding the effectiveness of this Agreement or the Restated Credit Agreement, the obligations of such Reaffirming Loan Party under each of the Loan Documents to which it is a party shall not be impaired and each of the Loan Documents to which such Reaffirming Loan Party is a party is, and shall continue to be, in full force and effect and is hereby confirmed and ratified in all respects, in each case, except as otherwise terminated or amended hereby and (c) all the representations and warranties made by or relating to it contained in the Restated Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the Restatement Effective Date with the same effect as though made on and as of the Restatement Effective Date, except to the extent such representations and warranties expressly relate to an earlier date.

SECTION 9. Counterparts . This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other customary means of electronic transmission (e.g., “pdf”) shall be as effective as delivery of a manually executed counterpart hereof.

SECTION 10. Applicable Law . THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 11. Submission to Jurisdiction . EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT SITTING IN THE BOROUGH OF MANHATTAN, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS

 

8


AGREEMENT OR ANY OTHER LOAN DOCUMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ONLY IN SUCH FEDERAL COURT (EXCEPT THAT, IN THE CASE OF ANY BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDINGS WITH RESPECT TO ANY CREDIT PARTY, ACTIONS OR PROCEEDINGS RELATED TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN SUCH COURT HOLDING SUCH BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDINGS). EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ANY AGENT, ANY LENDER OR ANY ISSUING BANK MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST HOLDINGS, CANADA HOLDINGS, U.S. HOLDINGS, CANADA INTERMEDIATE HOLDINGS, U.S. FINCO, A CO-BORROWER OR THEIR RESPECTIVE PROPERTIES IN THE COURTS OF ANY JURISDICTION.

SECTION 12. Headings . The headings of this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

[Remainder of page intentionally left blank]

 

9


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written.

 

HOLDINGS:

   TMM HOLDINGS LIMITED PARTNERSHIP
   By: TMM Holdings (G.P.) ULC, its General Partner
   By:    /s/ Greg Kranias
      Name: Greg Kranias
      Title: Director

CANADA HOLDINGS:

   MONARCH COMMUNITIES INC. (F/K/A 0913741 B.C. LTD.)
   By:    /s/ Darrell C. Sherman
      Name: Darrell C. Sherman
      Title: Vice President

CANADA INTERMEDIATE

     

HOLDINGS:

   MONARCH PARENT INC. (F/K/A 0914457 B.C. LTD.)
   By:    /s/ Darrell C. Sherman
      Name: Darrell C. Sherman
      Title: Vice President

U.S. HOLDINGS:

  

TAYLOR MORRISON HOLDINGS, INC.

(F/K/A AYLESBURY ACQUISITION PARENT, INC.)

   By:    /s/ Darrell C. Sherman
      Name: Darrell C. Sherman
      Title: Vice President


U.S. FINCO:

   TAYLOR MORRISON FINANCE, INC.
   By:    /s/ Darrell C. Sherman
      Name: Darrell C. Sherman
      Title: Vice President

U.S. BORROWER:

  

TAYLOR MORRISON COMMUNITIES, INC.

(F/K/A TAYLOR WOODROW

HOLDINGS (USA) INC.)

   By:    /s/ Darrell C. Sherman
      Name: Darrell C. Sherman
      Title: Vice President

CANADIAN BORROWER:

   MONARCH CORPORATION
   By:    /s/ Darrell C. Sherman
      Name: Darrell C. Sherman
      Title: Senior Vice President

SUBSIDIARY GUARANTORS:

     
   ATPD, LLC
   DARLING HOMES OF TEXAS, LLC
   DFP TEXAS (GP), LLC
   TAYLOR MORRISON, INC.
   TAYLOR MORRISON AT CRYSTAL FALLS, LLC
   TAYLOR MORRISON HOLDINGS OF ARIZONA, INC.
   TAYLOR MORRISON OF CALIFORNIA, LLC
   TAYLOR MORRISON OF COLORADO, INC.
   TAYLOR MORRISON OF FLORIDA, INC.
   TAYLOR MORRISON OF TEXAS, INC.
   TAYLOR MORRISON SERVICES, INC.
   TAYLOR MORRISON/ARIZONA, INC.
   TAYLOR WOODROW COMMUNITIES – LEAGUE CITY, LTD.
   TAYLOR WOODROW COMMUNITIES AT MIRASOL, LTD.
   TAYLOR WOODROW COMMUNITIES AT PORTICO, L.L.C.


TAYLOR WOODROW COMMUNITIES

AT ST. JOHNS FOREST, L.L.C.

TAYLOR WOODROW HOMES – CENTRAL FLORIDA DIVISION, L.L.C.
TAYLOR WOODROW HOMES – SOUTHWEST FLORIDA DIVISION, L.L.C.
TM HOMES OF ARIZONA, INC.
TW ACQUISITIONS, INC.
TWC/FALCONHEAD WEST, L.L.C.
TWC/MIRASOL, INC.
TWC/STEINER RANCH, LLC

On behalf of each of the above named entities

By:

  /s/ Darrell C. Sherman
 

Name: Darrell C. Sherman

 

Title: Vice President

TAYLOR MORRISON ESPLANADE NAPLES, LLC

On behalf of the above named entity,

By:

  /s/ Louis E. Steffens
 

Name: Louis E. Steffens

 

Title: President


CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
individually as a Lender and Issuing Bank, and as the Administrative Agent and the Existing Collateral Agent

By:

 

/s/ BILL O’DALY

 

Name: BILL O’DALY

 

Title: DIRECTOR

By:

 

/s/ Rahul Parmar

 

Name: Rahul Parmar

 

Title: Associate

 

[Signature Page to Amendment Agreement]


CITIBANK, N.A., CANADIAN BRANCH,

as a Lender and Issuing Bank,

By:

 

/s/ John Hastings

 

Name: John Hastings

 

Title: Principal Officer

          Citibank, N.A.

          Canadian Branch

 

[Signature Page to Amendment Agreement]


DEUTSCHE BANK AG NEW YORK

BRANCH, as a Lender,

By:

  /s/ Michael Getz
 

Name: Michael Getz

 

Title: Vice President

 

By:

  /s/ Marcus M. Tarkington
 

Name: Marcus M. Tarkington

 

Title: Director

 

[Signature Page to Amendment Agreement]


DEUTSCHE BANK AG

CANADA BRANCH,

as a Lender,

By:

 

/s/ Paul M. Jurist

 

Name: Paul M. Jurist

 

Title: Managing Director & Principal Officer

By:

 

/s/ MARCELLUS LEUNG

 

Name: MARCELLUS LEUNG

 

Title: Assistant Vice President

 

[Signature Page to Amendment Agreement]


GOLDMAN SACHS BANK USA,

as a Lender,

By:

 

/s/ Mark Walton

 

Name: Mark Walton

 

Title: Authorized Signatory

 

[Signature Page to Amendment Agreement]


HSBC REALTY CREDIT CORPORATION (USA),

as a Lender,

By:

 

/s/ Michael Leung

 

Name: Michael Leung

 

Title: Senior Vice President

 

JPMORGAN CHASE BANK, N.A.,

as a Lender,

By:

 

/s/ Chiara Carter

 

Name: Chiara Carter

 

Title: Vice President

 

[Signature Page to Amendment Agreement]


TEXAS CAPITAL BANK, NATIONAL ASSOCIATION

as a Lender,

By:

 

/s/ Jerry Schillaci

 

Name: Jerry Schillaci

 

Title: Senior Vice President

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as a Lender,

By:

 

/s/ Elena Bennett

 

Name: Elena Bennett

 

Title: Senior Vice President

 

[Signature Page to Amendment Agreement]


SCHEDULE 1

Commitments

 

Lender

   Commitment  

Credit Suisse AG, Cayman Islands Branch

   $ 77,000,000   

Citibank, N.A., Canadian Branch

   $ 77,000,000   

Deutsche Bank AG New York Branch

   $ 52,000,000   

Goldman Sachs Bank USA

   $ 52,000,000   

JPMorgan Chase Bank, N.A.

   $ 52,000,000   

HSBC Realty Credit Corporation (USA)

   $ 40,000,000   

Wells Fargo Bank, N.A.

   $ 30,000,000   

Texas Capital Bank, National Association

   $ 20,000,000   


SCHEDULE 2

Legal Opinions

 

Counsel

  

Jurisdiction

Brier, Irish, Hubbard & Erhart, P.L.C.    Arizona
Cox, Castle & Nicholson LLP    California
Holland & Hart LLP    Colorado
GrayRobinson, P.A.    Florida
Armbrust & Brown, PLLC    Texas


EXHIBIT A

Restated Credit Agreement


EXHIBIT B

Restated Guaranty


EXHIBIT A

 

 

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

dated as of

July 13, 2011

as amended and restated as of April 13, 2012,

as thereafter amended as of August 15, 2012 and December 27, 2012,

and as further amended and restated as of April 12, 2013

Among

TAYLOR MORRISON COMMUNITIES, INC.,

as U.S. Borrower

MONARCH CORPORATION,

as Canadian Borrower

TMM HOLDINGS LIMITED PARTNERSHIP,

as Holdings

MONARCH COMMUNITIES INC.,

as Canada Holdings

MONARCH PARENT INC.,

as Canada Intermediate Holdings

TAYLOR MORRISON HOLDINGS, INC.,

as U.S. Holdings

TAYLOR MORRISON FINANCE, INC.

as U.S. FinCo

THE LENDERS PARTY HERETO,

as Lenders

and

CREDIT SUISSE AG,

as Administrative Agent

 

 

CREDIT SUISSE SECURITIES (USA) LLC

and CITIGROUP GLOBAL MARKETS INC.,

as Joint Lead Arrangers and Joint Bookrunners

$400,000,000 REVOLVING CREDIT FACILITY

 

 

 


TABLE OF CONTENTS

 

         Page  

SECTION 1. DEFINITIONS

     2   

1.1

  Certain Defined Terms      2   

1.2

  Defined Terms; Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement      46   

1.3

  Exchange Rates      46   

SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

     47   

2.1

  Commitments; Loans      47   

2.2

  Interest on the Loans      51   

2.3

  Fees      55   

2.4

  Repayments and Prepayments; General Provisions Regarding Payments      55   

2.5

  Use of Proceeds      59   

2.6

  Special Provisions Governing Eurodollar Rate Loans      59   

2.7

  Increased Costs; Taxes      61   

2.8

  Mitigation Obligations; Replacement of Lenders      66   

2.9

  Loan Modification Offers      66   

SECTION 3. LETTERS OF CREDIT

     68   

3.1

  Issuance of Letters of Credit and Lenders’ Purchase of Participations Therein      68   

3.2

  Letter of Credit Fees      70   

3.3

  Drawings and Payments and Reimbursement of Amounts Drawn or Paid Under Letters of Credit      71   

3.4

  Obligations Absolute      73   

3.5

  Nature of Issuing Bank’s Duties      74   

3.6

  Defaulting Lenders      75   

3.7

  Resignation of an Issuing Bank      76   

SECTION 4. CONDITIONS

     77   

4.1

  [Reserved]      77   

4.2

  Conditions to All Loans      77   

4.3

  Conditions to Letters of Credit      77   

SECTION 5. REPRESENTATIONS AND WARRANTIES

     78   

5.1

  Corporate Status; Corporate Power and Authority; Enforceability; Subsidiaries      78   

5.2

  No Violation; Governmental Approvals      79   

5.3

  Financial Statements      79   

5.4

  No Material Adverse Change      80   

 

CREDIT AGREEMENT

 

i


5.5   Title to Properties; Liens; Intellectual Property      80   
5.6   Litigation; Compliance with Laws      80   
5.7   Payment of Taxes      81   
5.8   Governmental Regulation      81   
5.9   Compliance with ERISA and Similar Applicable Law      81   
5.10   Environmental Matters      82   
5.11   Employee Matters      82   
5.12   Solvency      82   
5.13   [Reserved]      82   
5.14   True and Complete Disclosure      82   
5.15   Sanctioned Persons      83   
5.16   Insurance      83   
SECTION 6. AFFIRMATIVE COVENANTS      83   
6.1   Financial Statements and Other Reports      84   
6.2   Consolidated Corporate Franchises      88   
6.3   Payment of Taxes      88   
6.4   Maintenance of Properties; Insurance      89   
6.5   Inspection; Books and Records      89   
6.6   Compliance with Statutes      90   
6.7   Execution of Guaranty by Future Guarantors      90   
6.8   [Reserved]      90   
6.9   Transactions with Affiliates      90   
6.10   End of Fiscal Years; Fiscal Quarters      92   
6.11   Use of Proceeds      92   
6.12   Changes in Business      92   
6.13   Designation of Subsidiaries      92   
6.14   Ratings      93   
6.15   Anti-Money Laundering Legislation      93   
SECTION 7. NEGATIVE COVENANTS      93   
7.1   [Reserved]      93   
7.2   Limitation on Liens, etc      93   
7.3   Investments; Joint Ventures      97   
7.4   Restricted Payments      100   
7.5   Financial Covenants      103   
7.6   Restriction on Fundamental Changes; Asset Sales      103   
7.7   [Reserved]      106   
7.8   [Reserved]      106   
7.9   Limitation on Debt Payments      106   
SECTION 8. EVENTS OF DEFAULT      107   
8.1   Failure to Make Payments When Due      107   
8.2   Default in Other Agreements      107   
8.3   Breach of Certain Covenants      108   

 

CREDIT AGREEMENT

 

ii


8.4

  Breach of Warranty      108   

8.5

  Bankruptcy, etc      108   

8.6

  [Reserved]      109   

8.7

  Judgments and Attachments      109   

8.8

  Employee Benefit Plans      109   

8.9

  Change in Control      109   

8.10

  Invalidity of the Guaranty      110   

8.11

  [Reserved]      110   

8.12

  Borrowers’ Right to Cure      111   

SECTION 9. AGENTS

     112   

9.1

  Appointment      112   

9.2

  Rights as a Lender      112   

9.3

  Exculpatory Provisions      112   

9.4

  Reliance by the Administrative Agent      113   

9.5

  Delegation of Duties      113   

9.6

  Resignation of Administrative Agent      114   

9.7

  Release of Guarantors      114   

9.8

  Non-Reliance on Administrative Agent and Other Lenders      115   

9.9

  Duties of Other Named Entities      115   

SECTION 10. MISCELLANEOUS

     115   

10.1

  Assignments and Participations in Loans      115   

10.2

  Expenses; Indemnity; Damage Waiver      119   

10.3

  Right of Set-Off      121   

10.4

  Sharing of Payments by Lenders      122   

10.5

  Amendments and Waivers      122   

10.6

  Independence of Covenants      124   

10.7

  Notices      124   

10.8

  Survival of Representations, Warranties and Agreements      125   

10.9

  Failure or Indulgence Not Waiver; Remedies Cumulative      125   

10.10

  Marshalling; Payments Set Aside      126   

10.11

  Severability      126   

10.12

  Obligations Several; Independent Nature of the Lenders’ Rights      126   

10.13

  Maximum Amount      126   

10.14

  Headings      127   

10.15

  Applicable Law      127   

10.16

  Successors and Assigns      127   

10.17

  Consent to Jurisdiction and Service of Process      128   

10.18

  Waiver of Jury Trial      129   

10.19

  Confidentiality      129   

10.20

  Integration; Effectiveness; Electronic Execution      130   

10.21

  USA Patriot Act Notification      131   

10.22

  Agency of the U.S. Borrower for each other Loan Party      131   

10.23

  No Fiduciary Duties      131   

10.24

  Judgment Currency      132   

10.25

  Additional Borrowing Subsidiaries      133   

10.26

  Effect of Certain Inaccuracies      134   

 

CREDIT AGREEMENT

 

iii


EXHIBITS

 

I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF NOTE
V FORM OF GUARANTY
VI FORM OF OFFICER’S CERTIFICATE
VII FORM OF BORROWING BASE CERTIFICATE
VIII FORM OF ASSIGNMENT AGREEMENT
IX FORM OF BORROWING SUBSIDIARY AGREEMENT
X FORM OF BORROWING SUBSIDIARY TERMINATION

SCHEDULES

 

2.1 COMMITMENTS
3.1 LETTER OF CREDIT COMMITMENTS
5.1C SUBSIDIARIES OF HOLDINGS
5.16 INSURANCE
6.9 TRANSACTIONS WITH AFFILIATES
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS

 

CREDIT AGREEMENT

 

iv


CREDIT AGREEMENT

This SECOND AMENDED AND RESTATED CREDIT AGREEMENT is dated as of July 13, 2011, amended and restated as of April 13, 2012, as thereafter amended as of August 15, 2012 and December 27, 2012, and as further amended and restated as of April 12, 2013, and entered into by and among TAYLOR MORRISON COMMUNITIES, INC. , a Delaware corporation (the “ U.S. Borrower ”), as co-borrower, MONARCH CORPORATION , an Ontario corporation (the “ Canadian Borrower ” and, together with the U.S. Borrower, the “ Co-Borrowers ”), TMM HOLDINGS LIMITED PARTNERSHIP , a British Columbia limited partnership (“ Holdings ”), MONARCH COMMUNITIES INC. , a company continued under the laws of the province of British Columbia (“ Canada Holdings ”), MONARCH PARENT INC. , a company incorporated under the laws of the province of British Columbia (“ Canada Intermediate Holdings ”), TAYLOR MORRISON HOLDINGS, INC. , a Delaware corporation (“ U.S. Holdings ”), TAYLOR MORRISON FINANCE, INC. , a Delaware corporation (“ U.S. FinCo ”), EACH LENDER FROM TIME TO TIME PARTY HERETO (each individually referred to herein as a “ Lender ” and collectively as “ Lenders ”) and CREDIT SUISSE AG , as administrative agent for the Lenders (in such capacity, the “ Administrative Agent ”).

RECITALS

A. WHEREAS , capitalized terms used and not defined in these recitals shall have the meanings assigned to such terms in Section 1.1;

B. WHEREAS , the Co-Borrowers, Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. Holdings, U.S. FinCo, the lenders party thereto and Credit Suisse AG, as administrative agent, collateral agent, swing line lender and issuing bank, have previously entered into a Credit Agreement dated as of July 13, 2011, as amended and restated as of April 13, 2012, and as thereafter amended as of August 15, 2012 and December 27, 2012 (the “ Existing Credit Agreement ”), pursuant to which the Co-Borrowers requested (a) the Lenders (as defined in the Existing Credit Agreement) to extend credit in the form of Revolving Loans (as defined in the Existing Credit Agreement), (b) the Issuing Banks (as defined in the Existing Credit Agreement) to issue Letters of Credit and (c) the Swing Line Lender (as defined in the Existing Credit Agreement) to extend credit in the form of Swing Line Loans (as defined in the Existing Credit Agreement), in each case on the terms and subject to the conditions set forth therein;

C. WHEREAS , the proceeds of the Loans have been and shall be used, and Letters of Credit have been and shall be issued, solely for the purposes set forth in Section 2.5;

D. WHEREAS , the Lenders are willing to continue to extend credit in the form of Loans, and the Issuing Banks are willing to issue Letters of Credit for the accounts of the Co-Borrowers, in each case on the terms and subject to the conditions set forth herein; and

E. WHEREAS , pursuant to the Amendment Agreement, Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers, the Lenders and the Administrative Agent have agreed to amend and restate the Existing Credit Agreement in the form hereof. The amendment and restatement of the Existing Credit Agreement evidenced by this Agreement shall become effective as provided in the Amendment Agreement;

 

CREDIT AGREEMENT


NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

SECTION 1.

DEFINITIONS

1.1 Certain Defined Terms .

The following terms used in this Agreement shall have the following meanings:

Accepting Lenders ” has the meaning assigned to that term in Section 2.9A.

Additional Facilities Amount ” means $200,000,000; provided that to the extent any additional Commitments with a maturity date later than the Commitment Termination Date are made pursuant to Section 2.1A(iii) concurrently with a permanent reduction pursuant to Section 2.4A(ii) in the Commitments existing immediately prior to such time, the Additional Facilities Amount shall be deemed increased by the lesser of (i) the amount of such additional Commitments and (ii) the amount of such permanent reduction.

Administrative Agent ” has the meaning assigned to that term in the preamble to this Agreement.

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

Affected Class ” has the meaning assigned to that term in Section 10.5A.

Affected Lender ” has the meaning assigned to that term in Section 2.6C.

Affected Loans has the meaning assigned to that term in Section 2.6C.

Affected Revolving Credit Class ” has the meaning assigned to that term in Section 2.9A.

Affiliate ” means, 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 the Person specified. The term “ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. The terms “ Controlling ” and “ Controlled ” have meanings correlative thereto.

Agreement ” means this Credit Agreement as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

Amendment Agreement ” means the Amendment Agreement dated as of the Restatement Effective Date, effecting, among other things, the amendment and restatement of the Existing Credit Agreement.

Applicable Laws ” means, as to any Person, any law (including common law), statute, regulation, ordinance, rule, order, decree, judgment, consent decree, writ, injunction, settlement agreement or governmental requirement enacted, promulgated or imposed or entered into or agreed

 

CREDIT AGREEMENT

 

2


by any Governmental Authority (including the USA PATRIOT Act, ERISA and laws relating to Foreign Plans and obligations), in each case applicable to or binding on such Person or any of its property or assets or to which such Person or any of its property or assets is subject.

Applicable Margin ” means, for any day, with respect to any Eurodollar Rate Loan, CDOR Rate Loan, Base Rate Loan or Canadian Prime Rate Loan, the applicable rate per annum set forth below under the caption “Eurodollar / CDOR Margin” or “Base Rate / Canadian Prime Rate Margin”, as the case may be, based on the Capitalization Ratio as of the last day of the most recent Fiscal Year or period, as the case may be, for which Section 6.1 Financials have been delivered; provided that until the date of delivery to the Administrative Agent of the Section 6.1 Financials as of and for the Fiscal Quarter ended June 30, 2013, the Capitalization Ratio shall be deemed to be in Category 2 for purposes of determining the Applicable Margin:

 

CAPITALIZATION RATIO

   EURODOLLAR
/ CDOR
MARGIN
    BASE RATE
/CANADIAN
PRIME RATE
MARGIN
 

Category 1

> 0.55 to 1.00

     2.250     1.250

Category 2

< 0.55 to 1.00

> 0.40 to 1.00

     2.000     1.000

Category 3

< 0.40 to 1.00

     1.875     0.875

Each change in the Applicable Margin resulting from a change in the Capitalization Ratio shall be effective with respect to all Commitments on and after the date of delivery to the Administrative Agent of the Section 6.1 Financials indicating such change until the date immediately preceding the next date of delivery of Section 6.1 Financials indicating another such change. At any time during which Holdings has failed to deliver Section 6.1 Financials, the Capitalization Ratio shall be deemed to be in Category 1 for purposes of determining the Applicable Margin.

Applicable Period ” has the meaning assigned to that term in Section 10.26.

Approved Fund ” means any Fund or similar investment vehicle that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

Arrangers ” means Credit Suisse Securities (USA) LLC and Citigroup Global Markets Inc., as joint lead arrangers and joint bookrunners.

 

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Asset Sale ” means any Disposition (other than operating leases entered into in the ordinary course of business) by Holdings or any of its Subsidiaries to any Person (other than the Loan Parties) of any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, Capital Stock (including, Capital Stock of any Subsidiary of Holdings), but excluding (a) sales (including bulk sales), leases, assignments, conveyances, transfers or other dispositions (including exchanges or swaps) of amenities, homes, Model Units, land, other real property, inventory or goods, in each case held for sale or otherwise disposed of in the ordinary course of a Real Estate Business; (b) Dispositions arising out of, or the granting of, any options or rights of first refusal to purchase real property granted to the master developer or the seller of real property that arise as a result of the non-use or non-development of such real property by a Loan Party; (c) sales, assignments, conveyances, transfers or other dispositions of obsolete or worn out assets in the ordinary course of a Real Estate Business; (d) the creation of Permitted Encumbrances and dispositions in connection with, or pursuant to the exercise of remedies under, Permitted Encumbrances; (e) licenses of Intellectual Property entered into in the ordinary course of a Real Estate Business; (f) sales of Cash Equivalents; (g) immaterial Dispositions (including lot line adjustments) of portions of any Real Estate for dedication to the public or otherwise in connection with the development of Real Estate; (h) immaterial Dispositions for the purpose of resolving any encroachment issues; (i) the dissolution, liquidation or other Disposition of any Dormant Subsidiary; and (j) any Disposition for a purchase price not in excess of $5,000,000.

Assignment Agreement ” means an assignment and assumption agreement in substantially the form of Exhibit VIII annexed hereto or in such other form as may be approved by the Administrative Agent.

Assumed Purchase Money Loan ” means, at any time, (a) any loan secured by Real Property Inventory purchased by any Loan Party and/or an Equity Pledge and incurred or assumed by such Loan Party simultaneously or within 180 days after the date of the purchase of such Real Property Inventory, provided that (i) the original aggregate principal amount of such loan shall not exceed the sum of (x) the purchase price of the Real Property Inventory securing such loan , plus (y) the aggregate amount of costs and expenses incurred in connection with the purchase of such Real Property Inventory and such loan, plus (z) the aggregate amount of all reserves required to be established pursuant to the terms and conditions of such loan and (ii) such loan may only be secured by a security interest on such Real Property Inventory and/or an Equity Pledge and (b) any amendment, modification, extension or refinancing of such loan, provided that, with respect to any amendment, modification, extension or refinancing of such loan, (i) the aggregate principal amount thereof shall not exceed the sum of (x) the greater of (A) the outstanding principal amount of, and accrued interest and prepayment premiums and similar amounts on, such loan at the time of such amendment, modification, extension or refinancing and (B) the purchase price of the Real Property Inventory securing such loan, plus (y) the aggregate amount of costs and expenses incurred in connection with such amendment, modification, extension or refinancing, plus (z) the aggregate amount of all reserves required to be established pursuant to the terms and conditions of such amendment, modification, extension or refinancing ( less any reserves returned to such Loan Party in connection with such amendment, modification, extension or refinancing) and (ii) such loan (as amended, modified, extended or refinanced) shall not be secured by the assets of any Loan Party other than the Real Property Inventory initially purchased by the applicable Loan Party and improvements constructed thereon and/or an Equity Pledge. Notwithstanding anything to the contrary herein, (A) a loan that satisfies the foregoing requirements set forth in this definition shall be an “Assumed Purchase Money Loan” regardless of whether such loan otherwise constitutes Non-Recourse Indebtedness and (B) the obligations under such loan may be guaranteed by a Non-Recourse Guaranty or Non-Recourse Payment Guaranty.

 

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Availability Amount ” means, at any time (a) if the Capitalization Ratio as of the last day of the most recent Test Period for which Section 6.1 Financials have been delivered exceeds 0.55 to 1.00 (a “ Borrowing Base Trigger Event ”), the lesser of (i) the Commitments then in effect and (ii) the Borrowing Base Availability or (b) if clause (a) of this definition is not applicable, the Commitments then in effect.

Bankruptcy Code ” means Title 11 of the United States Code entitled “Bankruptcy”, the Bankruptcy and Insolvency Act (Canada) and the Companies’ Creditors Arrangement Act (Canada), in each case as now and hereafter in effect, or any successor statutes.

Base Rate ” means, at any time, the highest of (a) the Prime Rate, (b) the rate which is 0.5% in excess of the Federal Funds Effective Rate and (c) the Reserve Adjusted Eurodollar Rate on such day (or if such day is not a Business Day, the immediately preceding Business Day) for a deposit in dollars with a maturity of one month plus 1%; provided that, solely for purposes of the foregoing, the Reserve Adjusted Eurodollar Rate for any day shall be calculated using the Eurodollar Base Rate based on the rate set forth on such day at approximately 11:00 a.m. (London time) by reference to the British Bankers’ Association Interest Settlement Rates (or the successor thereto if the British Banker’s Association is no longer making such rates available) for deposits in U.S. Dollars (as set forth by any service selected by the Administrative Agent which has been nominated by the British Bankers’ Association (or its successor) as an authorized information vendor for the purpose of displaying such rates) for a period equal to one month; provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the Eurodollar Base Rate shall be the interest rate per annum determined by the Administrative Agent to be the average of the rates per annum at which deposits in U.S. Dollars are offered for such relevant Interest Period to major banks in the London interbank market in London, England by the Reference Lenders at approximately 11:00 a.m. (London time) on such day. If any of the Reference Lenders shall be unable or shall otherwise fail to supply such rates to the Administrative Agent upon its request, the rate of interest shall be determined on the basis of the quotations of the remaining Reference Lenders.

Base Rate Loans ” means Loans bearing interest at rates determined by reference to the Base Rate as provided in Section 2.2A.

Board ” means the Board of Governors of the Federal Reserve System of the United States (or any successor).

Board of Directors ” means (a) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board, (b) with respect to a partnership, the board of directors of the general partner of the partnership, (c) with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof and (d) with respect to any other Person, the board or committee of such Person serving a similar function.

Borrowers ” means the U.S. Borrower, the Canadian Borrower and any additional Subsidiary of a Co-Borrower that becomes a Borrower under this Agreement pursuant to Section 10.25.

 

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Borrowing Base ” means, as of any date, an amount calculated as follows:

(a) 100% of Unrestricted Cash and Cash Equivalents in excess of $10,000,000, plus

(b) 100% of the amount of Escrow Proceeds Receivable, plus

(c) 90% of the book value of Units Under Contract, plus

(d) 85% of the book value of Units Under Construction, plus

(e) subject to the limitations set forth below, 85% of the book value of Speculative Units, plus

(f) subject to the limitation set forth below, 90% of the book value of Model Units, plus

(g) 65% of the book value of Finished Lots, plus

(h) 65% of the book value of Lots Under Development; plus

(i) subject to the limitations set forth below, 50% of the book value of Entitled Land that is not included in the Borrowing Base clauses (a) through (h).

Notwithstanding the foregoing:

(i) the advance rate for Speculative Units shall decrease to 65% for any Unit that has been a Speculative Unit for more than 360 days;

(ii) the advance rate for Model Units shall decrease to 65% for any Unit that has been a Model Unit for more than 360 days following the sale of the last production Unit in the applicable project relating to such Model Unit; and

(iii) the Borrowing Base shall not include any amount under clause (i) under the Borrowing Base to the extent that such amount would exceed 40% of the total Borrowing Base (it being understood that only the amount of such excess shall be excluded from the Borrowing Base).

Borrowing Base Assets ” means Unrestricted Cash and Cash Equivalents, Escrow Proceeds Receivable, Units Under Contract, Units Under Construction, Speculative Units, Model Units, Finished Lots, Lots Under Development and Entitled Land.

Borrowing Base Availability ” means, on any date, the Borrowing Base, calculated in the most recent Borrowing Base Certificate delivered pursuant to Section 6.1(iv) or 2.4A(iii)(b) as of such date, minus the Borrowing Base Debt on such date; provided , that, in the case of any Borrowing Base Certificate delivered pursuant to clause (c) of Section 6.1(iv), the Borrowing Base calculated therein shall become effective only upon the consummation of the applicable acquisition, regardless of whether such Borrowing Base Certificate shall have been delivered prior to the consummation of such acquisition; provided further , that the Borrowing Base calculated therein (and any Borrowing Base Debt incurred or assumed in connection with the applicable acquisition) shall be used to determine the Borrowing Base Availability at the time of such acquisition if any Co-Borrower intends to borrow Loans at the time of such acquisition and use the proceeds thereof to fund the consideration for such acquisition.

 

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Borrowing Base Certificate ” means a certificate executed by a Responsible Officer in the form annexed hereto as Exhibit VII or another form reasonably acceptable to the Administrative Agent and the Borrowers.

Borrowing Base Debt ” means, as of any date, on a consolidated basis for the Loan Parties, Total Indebtedness, minus, to the extent included therein, (a) Subordinated Debt, (b) Non-Recourse Indebtedness (including, for the avoidance of doubt, Non-Recourse Indemnity Guaranties), (c) Non-Recourse Payment Guaranties and Guarantee Obligations in respect of any Indebtedness incurred by joint ventures or Subsidiaries in an aggregate amount not to exceed the greater of 3.0% of Consolidated Loan Party Adjusted Tangible Assets and $75,000,000, (d) to the extent not otherwise excluded from this definition under clause (b), Permitted Purchase Money Loans, Construction Loans or Combination Loans, in each case, in an amount equal to the lesser of (i) the aggregate principal amount of such Indebtedness and (ii) the sum of (x) the book value of the assets securing such Indebtedness, plus (y) the aggregate amount of costs and expenses incurred in connection with such Indebtedness, plus (z) the aggregate amount of all reserves required to be established pursuant to the terms and conditions of such Indebtedness, and (e) letters of credit or similar arrangements to the extent cash collateralized.

Borrowing Base Trigger Event ” has the meaning assigned to that term in the definition of “Availability Amount”.

Borrowing Minimum ” means $1,000,000 or C$1,000,000, as applicable.

Borrowing Multiple ” means $100,000 or C$100,000, as applicable.

Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close; provided that, (a) with respect to matters relating to Eurodollar Rate Loans, the term “ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in New York City or London, England, are authorized or required by law to close and (b) when used in connection with any Canadian Loan or any Canadian Dollar Letter of Credit, the term “Business Day” shall also (i) exclude any day on which banks are not open for business in Toronto and (ii) include any day on which banks are open for business in Toronto.

Calculation Date ” has the meaning assigned to that term in Section 7.5A.

Canada Holdings ” has the meaning assigned to that term in the preamble to this Agreement.

Canada Intermediate Holdings ” has the meaning assigned to that term in the preamble to this Agreement.

Canadian Borrower ” has the meaning assigned to that term in the preamble to this Agreement.

Canadian Debt Documents ” means (1) the Facility Letter dated November 2, 2012, by and between The Toronto Dominion Bank, as lender, and Monarch Corporation, as borrower and (2) the Facility Letter dated November 20, 2012, between HSBC Bank Canada, as lender, and Monarch Corporation, as borrower, in each case, as amended, extended, supplemented, replaced or otherwise modified from time to time.

 

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Canadian Dollars ” or “ C$ “means the lawful currency of Canada.

Canadian Dollar Equivalent ” means, on any date of determination with respect to an amount in Dollars, the equivalent thereof in Canadian Dollars, determined by the Administrative Agent using the Exchange Rate then in effect pursuant to Section 1.3.

Canadian Dollar Letter of Credit ” means any Letter of Credit denominated in Canadian Dollars.

Canadian LC Disbursement ” means a payment made by an Issuing Bank pursuant to a Canadian Dollar Letter of Credit.

Canadian LC Exposure ” means, at any time, the U.S. Dollar Equivalent of the sum of (a) the aggregate Stated Amount of all Canadian Dollar Letters of Credit that remain available for drawing at such time and (b) the aggregate amount of all Canadian LC Disbursements that have not yet been reimbursed by or on behalf of the Borrowers at such time. The Canadian LC Exposure of any Lender at any time shall be its Pro Rata Share of the total Canadian LC Exposure at such time.

Canadian Loan ” means any Loan denominated in Canadian Dollars.

Canadian Pension Plan ” means a “registered pension plan” as that term is defined in subsection 248(1) of the Income Tax Act (Canada).

Canadian Prime Rate ” means, on any day, the annual rate of interest equal to the greater of: (a) the annual rate of interest determined from time to time by the Administrative Agent as its prime rate in effect at its principal office in Toronto, Ontario (or such other office selected by the Administrative Agent in which its Canadian lending operations are conducted) on such day for interest rates on Canadian Dollar-denominated commercial loans made in Canada; and (b) the sum of (i) the yearly interest rate to which the one-month CDOR Rate is equivalent in effect on such day and (ii) 1.0%.

Canadian Prime Rate Loan ” means a Loan denominated in Canadian Dollars the rate of interest applicable to which is based on the Canadian Prime Rate.

Canadian Revolving Exposure ” means, with respect to the Lenders, at any time, the sum of (a) the U.S. Dollar Equivalent of the aggregate principal amount of the Lenders’ Canadian Loans outstanding at such time and (b) the Lenders’ Canadian LC Exposure at such time. The Canadian Revolving Exposure of any Lender at any time shall be such Lender’s Pro Rata Share of the aggregate Canadian Revolving Exposure at such time.

Canadian Sublimit ” means $80,000,000.

Capital Lease ” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person. Notwithstanding the foregoing, all leases of any Person that are or would be treated as operating leases in accordance with GAAP on the Initial Effective Date (whether or not such operating leases are in effect on the Initial Effective Date) shall continue to be accounted for as operating leases (and not as Capital Leases) for purposes of this Agreement regardless of any change in GAAP following the Initial Effective Date which would otherwise require such leases to be treated as Capital Leases.

 

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Capital Stock ” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing, excluding from all of the foregoing any debt securities convertible into Capital Stock so long as such debt securities are not entitled to share in the payment or distribution of any Dividends (other than Dividends paid in the form of Capital Stock) at any time prior to their conversion into Capital Stock.

Capitalization Ratio ” has the meaning assigned to that term in Section 7.5A.

Cash ” means (a) money, (b) currency or (c) a credit balance in a Deposit Account with a Cash Equivalent Bank.

Cash Equivalent Bank ” means any Lender or any commercial bank organized under the laws of the United States of America, any state thereof, the District of Columbia or Canada, in each case having unimpaired capital and surplus of not less than $500,000,000 (or the Canadian Dollar Equivalent thereof).

Cash Equivalents ” means (a) marketable securities issued or directly and unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof; (b) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having the highest rating obtainable from either S&P or Moody’s (or, at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent from another U.S. nationally recognized rating service); (c) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the Government of Canada or of any Canadian province (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the Government of Canada or of such Canadian province), in each case maturing within one year from the date of acquisition thereof; (d) commercial paper maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody’s (or, at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent from another U.S. nationally recognized rating service); (e) certificates of deposit or bankers’ acceptances maturing within one year from the date of acquisition thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody’s, issued by any Cash Equivalent Bank; (f) Eurodollar time deposits having a maturity of less than one year purchased directly from any Cash Equivalent Bank (provided such deposit is with such bank or any other Cash Equivalent Bank); (g) repurchase agreements with a term of not more than 30 days for underlying securities of the type described in clauses (a), (b), (c) and (f) above entered into with any Cash Equivalent Bank or securities dealers of recognized national standing; (h) marketable short-term money market and similar securities having a rating of at least A-1 or P-1 from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent rating from another U.S. nationally recognized rating service); (i) shares of investment companies that are registered under the Investment Company Act of 1940, as amended, and invest solely in one or more of the

 

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types of securities described in clauses (a) through (h) above; and (j) other short-term investments utilized by Restricted Subsidiaries in jurisdictions other than the United States and Canada in accordance with normal investment practices for cash management in investments of a type analogous to the foregoing.

Cash Management Bank ” means any Person that is an Agent, a Lender or an Affiliate of an Agent or a Lender at the time it provides any Cash Management Services or that is an Agent, a Lender or an Affiliate of an Agent or Lender at any time after it has provided any Cash Management Services.

Cash Management Obligations ” means obligations owed by Holdings, a Co-Borrower, U.S. FinCo or any Restricted Subsidiary to any Cash Management Bank in connection with, or in respect of, any Cash Management Services.

Cash Management Services ” means treasury, depository and cash management services and any automated clearing house fund transfer services.

CDOR Rate ” means, on any day, the sum of (a) the annual rate of interest that is the rate based on an average rate applicable to Canadian Dollar bankers’ acceptances for a term equal to the term of the relevant Interest Period appearing on the Reuters Screen CDOR Page (as defined in the International Swaps and Derivatives, Inc. 2000 definitions, as supplemented or amended from time to time) at approximately 10:00 a.m. (Toronto time), on such date, or if such date is not a Business Day, on the immediately preceding Business Day and (b) 0.10% per annum; provided that if such rate does not appear on the Reuters Screen CDOR Page on such date as contemplated, then the CDOR Rate on such date shall be the rate that would be applicable to Canadian Dollar bankers’ acceptances quoted by the Administrative Agent at its principal office in Toronto, Ontario (or such other office selected by the Administrative Agent in which its Canadian lending operations are conducted) as of 10:00 a.m. (Toronto time) on such date or, if such date is not a Business Day, on the immediately preceding Business Day.

CDOR Rate Loan ” means a Loan denominated in Canadian Dollars the rate of interest applicable to which is based on the CDOR Rate.

Change in Law ” means the occurrence, after the Restatement Effective Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, regulations or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines, regulations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued, in each case to the extent materially different from that in effect on the Restatement Effective Date.

 

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Class ”, when used in reference to any Loans or Commitments, means each of the following classes of Loans or Commitments: (a) the Commitments and the Loans, (b) if any additional Commitments are made pursuant to Section 2.1A(iii) that are Other Credit Extensions, such additional Commitments and Other Credit Extensions (it being understood that any Other Credit Extensions (together with the Commitments in respect thereof) having different terms shall each be construed to be a different Class) or (c) if any Loan Modification Offers are made and accepted pursuant to Section 2.9, the Commitments of the Accepting Lenders and the Loans made thereunder (it being understood that the Loans of Accepting Lenders (together with the Commitments in respect thereof) having different terms shall each be construed to be a different Class); provided , however , that at no time shall there be more than six Classes of Loans or Commitments outstanding under this Agreement.

Co-Borrowers has the meaning assigned to that term in the preamble to this Agreement.

Code ” means the Internal Revenue Code of 1986, as amended to the Restatement Effective Date and from time to time thereafter and any successor statute.

Combination Loan ” means a single loan that is (a) used for both acquisition and construction purposes and (b) satisfies the requirements contained in the definition of “Assumed Purchase Money Loan” or “Seller Purchase Money Loan”, as the case may be, and the definition of “Construction Loan”. A Combination Loan (x) shall be considered an Assumed Purchase Money Loan or a Seller Purchase Money Loan, as the case may be, with respect to the portion of such Combination Loan used for acquisition purposes, and a Construction Loan with respect to the portion of such Combination Loan used for construction purposes, (y) shall be treated as a single loan for purposes of the definition of “Assumed Purchase Money Loan” or “Seller Purchase Money Loan”, as the case may be, and the definition of “Construction Loan”, in each case in connection with any amendment, modification, extension or refinancing of such Combination Loan and (z) may, for the avoidance of doubt, be secured by the Real Property Inventory relating to such Combination Loan and/or an Equity Pledge.

Commitment ” means, with respect to each Lender, the commitment of such Lender to make Loans hereunder (and to acquire participations in Letters of Credit as provided for herein) as set forth on Schedule 2.1 or in any agreement entered into by such Lender pursuant to Section 2.1A(iii), or in the Assignment Agreement pursuant to which such Lender assumed its Commitment, as applicable, as the same may be (a) reduced from time to time pursuant to Section 2.4A(ii) and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 10.1.

Commitment Termination Date ” means, with respect to any Class, the earliest of (a) April 12, 2017, subject to extension as provided in Section 2.9, (b) the date on which the Commitments of such Class are permanently reduced to zero pursuant to Section 2.4A(ii) and (c) the date of termination of the Commitments of such Class pursuant to Section 8.

Commodity Exchange Act ” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

Completed Unit ” means a Unit as to which all necessary construction has been completed in order to obtain a temporary or final certificate of occupancy (whether or not such certificate of occupancy has actually been obtained), or if a certificate of occupancy is not required to be provided to, or issued by, the applicable jurisdiction, respectively, the Unit is otherwise ready for occupancy in accordance with Applicable Law.

 

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Consolidated Adjusted Tangible Net Worth ” means, as of any date of determination, the sum of (a)(i) consolidated stockholders’ equity of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as shown on the most recently delivered Section 6.1 Financials, and (ii) 50% of the aggregate principal amount of Indebtedness included in Consolidated Total Debt as of such date of determination that (x) by its terms is subordinated in right of payment to the Obligations and (y) has a final maturity date that is at least 90 days after the latest Commitment Termination Date hereunder at such time; provided that the amount of such Indebtedness included under this clause (a)(ii) shall not exceed an amount equal to 66  2 / 3 % of the consolidated stockholders’ equity of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries as determined pursuant to clause (a)(i) hereof, less (b) (without duplication) Intangible Assets of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as shown on the most recently delivered Section 6.1 Financials, but excluding any non-cash gain or loss of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries after December 31, 2012 recorded pursuant to Accounting Standards Codification Topic 815 or 820, which results in any adjustment to the net worth of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries on a consolidated basis.

Consolidated Loan Party Adjusted Tangible Assets ” means, as of any date of determination, the total amount of all assets of the Loan Parties, less Intangible Assets of the Loan Parties, in each case as determined on a consolidated basis in accordance with GAAP, as shown on the most recently delivered Section 6.1 Financials.

Consolidated Net Income ” means, for any period, the net income (or loss) of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP; provided that there shall be excluded therefrom (a) the income of any Person (other than a Restricted Subsidiary of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo or a Co-Borrower) in which Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any of their Subsidiaries has an equity interest, to the extent that the declaration or payment of dividends or other distributions of that income by such Person is not at the time permitted by operation of the terms of its charter (or similar organization documents) or any agreement or instrument between or among the holders of the Capital Stock of such Person, or any judgment, decree, statute, rule or governmental regulation applicable to such Person (other than “waterfall” provisions in respect of third-party Indebtedness), (b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Holdings or a Co-Borrower or is merged into or consolidated with Holdings or any of its Subsidiaries or that Person’s assets are acquired by Holdings or any of its Subsidiaries, (c) the income of any Subsidiary of Holdings to the extent that both (i) the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary (unless such restriction with respect to the payment of dividends or similar distribution has been legally waived) and (ii) such restriction on the declaration or payment of dividends or similar distributions would reasonably be expected to materially impair the ability of any Borrower to perform the Obligations, (d) any after-tax gains or losses attributable to discontinued operations, (e) one-time Transaction Costs and any fees, costs and

 

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expenses payable by Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and their Subsidiaries in connection with any acquisitions, joint ventures or other Investments permitted or not otherwise prohibited hereunder (other than Investments made in the ordinary course of business and other than Investments in Subsidiaries) expensed or amortized in such period and including those fees, expenses or charges triggered by change in control provisions, (f) any net gain or loss resulting from currency remeasurements of Indebtedness (including any net loss or gain resulting from Hedge Agreements related to currency exchange risk) and any foreign currency translation gains or losses and (g) to the extent not included in clauses (a) through (f) above, any net extraordinary gains or net non cash extraordinary losses.

Consolidated Tangible Net Worth ” means, as of any date of determination, the consolidated stockholders’ equity of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries, less (without duplication) Intangible Assets of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries, in each case as determined on a consolidated basis in accordance with GAAP, as shown on the most recently delivered Section 6.1 Financials; provided that “Consolidated Tangible Net Worth” shall exclude any non-cash gain or loss of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries after December 31, 2012 recorded pursuant to Accounting Standards Codification Topic 815 or 820, which results in any adjustment to the net worth of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries on a consolidated basis.

Consolidated Total Assets ” means, as of any date of determination, the total amount of all assets of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as shown on the most recently delivered Section 6.1 Financials.

Consolidated Total Capitalization ” means, as of any date of determination, the sum of (a) Consolidated Adjusted Tangible Net Worth as of such date of determination and (b) Consolidated Total Debt as of such date of determination.

Consolidated Total Debt ” means, as at any date of determination, the aggregate amount of (a) all outstanding indebtedness of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries for borrowed money outstanding on such date (excluding (i) outstanding Indebtedness incurred by a Mortgage Subsidiary, so long as neither Holdings nor any other Subsidiary of Holdings (other than such Mortgage Subsidiary) is directly or contingently liable for any such Indebtedness and (ii) Non-Recourse Indebtedness and Non-Recourse Indemnity Guaranties but including, for the avoidance of doubt, Non-Recourse Payment Guaranties), (b) all obligations under Capital Leases of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries outstanding on such date and (c) all obligations owed for all or any part of the deferred purchase price of property (including earn-outs with respect to acquisitions) due and payable in the applicable period to the extent that any such obligation becomes a liability on the balance sheet of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries, in accordance with GAAP, all calculated on a consolidated basis; provided that Consolidated Total Debt shall be determined net of the aggregate amount (to the extent in excess of $5,000,000) of Unrestricted Cash and Cash Equivalents as of such date required to be reflected on a consolidated balance sheet in accordance with GAAP.

 

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Construction Bonds ” means bonds issued by surety bond companies or other Persons or other security for the benefit of municipalities or other political subdivisions to secure the performance by any Borrower or any Subsidiary thereof of its obligations relating to Real Estate improvements and subdivision development and completion.

Construction Loan ” means, at any time, (a) any loan incurred by a Loan Party in order to finance the construction or installation of buildings or other improvements or the performance of site work or similar work (including construction or installation or site work or similar work performed as part of land development) constituting part of, or related to, the Real Property Inventory, provided that (i) the aggregate principal amount of such loan shall not exceed the sum of (x) the aggregate amount of costs and expenses incurred in connection with such construction, installation or site work or similar work (including both so-called “hard” and so-called “soft” costs (such as interest, real estate taxes, carrying costs and professional fees)), plus (y) the aggregate amount of costs and expenses incurred in connection with such loan, plus (z) the aggregate amount of all reserves required to be established pursuant to the terms and conditions of such loan, (ii) such loan may only be secured by a security interest on such Real Property Inventory and/or an Equity Pledge and (b) any amendment, modification, extension or refinancing of such loan, provided that, with respect to any amendment, modification, extension or refinancing of such loan, (i) the aggregate principal amount thereof shall not exceed the sum of (x) the outstanding principal amount of, and accrued interest and prepayment premiums and similar amounts on, such loan at the time of such amendment, modification, extension or refinancing, plus (y) the aggregate amount of costs and expenses incurred in connection with such amendment, modification, extension or refinancing, plus (z) the aggregate amount of all reserves required to be established pursuant to the terms and conditions of such amendment, modification, extension or refinancing (less any reserves returned to such Loan Party in connection with such amendment, modification, extension or refinancing) and (ii) such loan (as amended, modified, extended or refinanced) shall not be secured by the assets of any Loan Party other than such Real Property Inventory and improvements constructed thereon and/or an Equity Pledge. Notwithstanding anything to the contrary herein, (A) a loan that satisfies the foregoing requirements set forth in this definition shall be a “Construction Loan” regardless of whether such loan otherwise constitutes Non-Recourse Indebtedness and (B) the obligations under such loan may be guaranteed by a Non-Recourse Indemnity Guaranty or Non-Recourse Payment Guaranty.

Contingent Obligation ” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person (a) with respect to any Indebtedness, lease, dividend or other obligation of another if the primary purpose or intent thereof by the Person incurring the Contingent Obligation is to provide assurance to the obligee of such obligation of another that such obligation of another will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected (in whole or in part) against loss in respect thereof, (b) with respect to any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings or (c) under Hedge Agreements. Contingent Obligations shall include (i) the direct or indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of another, (ii) the obligation to make take-or-pay or similar payments if required regardless of non-performance by any other party or parties to an agreement and (iii) any liability of such Person for the obligation of another through any agreement (contingent or otherwise) (A) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (B) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of

 

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14


any agreement described under subclause (A) or (B) of this sentence, the primary purpose or intent thereof is as described in the preceding sentence; provided , however , that the term “Contingent Obligation” shall not include (x) obligations (including indemnity obligations but excluding Indebtedness for borrowed money) incurred in the ordinary course of business, including in respect of land acquisition contracts, (y) endorsements of instruments for deposit or collection in the ordinary course of business and (z) mortgage loan repurchase obligations of any Mortgage Subsidiary. The amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if less, the amount to which such Contingent Obligation is specifically limited.

Continuing Directors ” means the directors of the Board of Directors of TMHC on the Restatement Effective Date, after giving effect to the Transactions and the other transactions contemplated thereby, and each other director if, in each case, such other director’s nomination for election to the Board of Directors of TMHC is recommended by at least a majority of the then Continuing Directors or the election of such other director is approved by one or more Sponsors.

Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound other than the Obligations.

Cure Amount ” has the meaning assigned to that term in Section 8.12A.

Cure Right ” has the meaning assigned to that term in Section 8.12A.

Cure Right Expiration Date ” has the meaning assigned to that term in Section 8.12A.

Daily Rate Loan ” means a Base Rate Loan or a Canadian Prime Rate Loan.

Default ” means a condition or event that, after notice or after any applicable grace period has lapsed, or both, would constitute an Event of Default.

Defaulting Lender ” means any Lender with respect to which a Lender Default is in effect.

Deposit Account ” means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a negotiable certificate of deposit.

Development Agreement ” means an agreement entered into with one or more Governmental Authorities (or one or more entities sponsored by Governmental Authorities), other developers, joint venture partners or other Persons, in each case in connection with the payment of the cost of, or the performance of obligations relating to, infrastructure, amenities, common areas and the like, including roads, schools, sidewalks, plazas and parks.

Disposition ” has the meaning assigned to that term in Section 7.6B(ii).

Disqualified Domestic Subsidiary ” means any Domestic Subsidiary that (a) is a disregarded entity for U.S. Federal income tax purposes and (b) owns a Foreign Subsidiary, either directly or indirectly, exclusively through other entities that are disregarded entities for U.S. Federal income tax purposes and the sole assets of such disregarded entities (other than equity interests in each other) consist of Capital Stock of any Foreign Subsidiary.

 

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Disqualified Stock ” means, with respect to any Person, any Capital Stock of such Person that, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise (other than solely as a result of a change of control), is convertible or exchangeable for Indebtedness or Disqualified Stock or is redeemable at the option of the holder thereof (other than solely as a result of a change of control), in whole or in part, in each case prior to the date that is 120 days after the Commitment Termination Date; provided , however , that if such Capital Stock is issued to any plan for the benefit of employees of Holdings or any of its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because (i) it may be required to be repurchased by Holdings or any of its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or (ii) in the case of an option issued to any such employee, such option gives the employee the right, under certain circumstances, to require Holdings to withhold shares to pay the exercise price or the withholding taxes that are applicable upon exercise of such option.

Dividends ” has the meaning assigned to that term in Section 7.4.

Dormant Subsidiary ” means each of Taylor Woodrow Georgia, L.L.C., Taylor Morrison of Nevada, LLC and TW/Olson Venture Management, L.L.C., Taylor Woodrow Communities at Herons Glen, L.L.C., Taylor Woodrow Communities at Seven Meadows, Ltd., Taylor Woodrow Communities at Vasari, L.L.C., Taylor Woodrow U.S. Tower, Inc., The Beach Residences, L.L.C., TW Oaks Meridian, Inc., TW/Beach Residences–Hollywood, L.L.C., TW/Beach Residences–Venice Beach, L.L.C., TW/Olson Venture Management, L.L.C. and TWC/Seven Meadows, L.L.C.

Domestic Subsidiary ” means any Subsidiary of U.S. FinCo or the U.S. Borrower incorporated, formed or organized under the laws of any jurisdiction within the United States of America or any territory thereof.

Eligible Assignee ” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, (d) a commercial bank organized under the laws of the United States or Canada, or any State thereof, and having a combined capital and surplus of at least $250,000,000, (e) a savings and loan association or savings bank organized under the laws of the United States or Canada, or any State or Province thereof, and having a combined capital and surplus of at least $250,000,000, (f) a commercial bank organized under the laws of any other country that is a member of the OECD or has concluded special lending arrangements with the International Monetary Fund associated with its General Arrangements to Borrow or a political subdivision of any such country, and having a combined capital and surplus of at least $250,000,000, so long as such bank is acting through a branch or agency located in the United States, (g) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise holding commercial loans in the ordinary course and having a combined capital and surplus of at least $250,000,000 or an Approved Fund thereof and (h) any other Person (other than a natural person) approved by the Administrative Agent (such approval not to be unreasonably withheld or delayed) and so long as no Event of Default under Section 8.1 or 8.5 has occurred and is continuing, approved by Holdings (such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “ Eligible Assignee ” shall not include any Defaulting Lender, the Sponsors, Holdings, any Co-Borrower or any of their respective Subsidiaries or Affiliates.

 

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EMU Legislation ” means the legislative measures of the European Union or any other country where the Euro is used for the introduction of, changeover to or operation of the Euro in one or more member states.

Entitled Land ” means Qualified Real Property Inventory comprised of land zoned for residential and related uses.

Environmental Claim ” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations (other than internal reports prepared by Holdings or any of its Subsidiaries (a) in the ordinary course of such Person’s business or (b) as required in connection with a financing transaction or an acquisition or disposition of real estate) or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any Environmental Law (hereinafter, “ Claims ”), including (i) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (ii) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation, medical monitoring or injunctive relief relating to or resulting from the Release or threatened Release of Hazardous Materials or arising in any manner from alleged injury or threat of injury to health, safety or the environment.

Environmental Law means any applicable Federal, state, foreign or local statute, law, rule, regulation, directive, ordinance, code and rule of common law now or hereafter in effect and in each case as amended, and any binding judicial or administrative interpretation thereof, including any binding judicial or administrative order, consent decree or judgment, relating to the protection of the environment or, to the extent relating to exposure to Hazardous Materials, of human health or safety.

Environmental Liabilities ” means all liabilities, obligations, responsibilities and all Environmental Claims, arising from (a) environmental, health or safety conditions, (b) the presence, Release or threatened Release of Hazardous Materials at any location, whether or not owned, leased or operated by any Loan Party or any of its Subsidiaries, or (c) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law.

Equity Issuance ” means any issuance or sale by Holdings of any of its Capital Stock or the receipt by Holdings of any capital contribution, except in each case for (a) any issuance of Permitted Cure Securities or the receipt of any capital contribution in connection with any exercise of the Cure Right and (b) any issuance of Capital Stock or the receipt of any capital contribution in connection with the IPO.

Equity Pledge ” means, with respect to any Permitted Purchase Money Loan, Construction Loan or Combination Loan, a pledge of the Capital Stock of the Loan Party that has incurred or assumed such Permitted Purchase Money Loan, Construction Loan or Combination Loan.

ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder. Section references to ERISA are to ERISA as in effect at the Restatement Effective Date and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefore unless such references refer to prior plan years, in which case such references are to ERISA as in effect for the applicable plan year.

 

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ERISA Affiliate ” means each person (as defined in Section 3(9) of ERISA) that together with Holdings, the Co-Borrowers or any Subsidiary thereof would be deemed to be a “single employer” within the meaning of Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

Escrow Proceeds Receivable ” means funds due to any Loan Party held in escrow in connection with the sale and conveyance of title of a Unit to a buyer.

Euro ” means the single currency of the European Union as constituted by the Treaty on European Union and as referred to in the EMU Legislation.

Eurocurrency Reserve Requirements ” means, for each Interest Period for each Eurodollar Rate Loan, the highest reserve percentage applicable to any Lender during such Interest Period under regulations issued from time to time by the Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement), with respect to liabilities or assets consisting of or including Eurocurrency liabilities having a term equal to such Interest Period.

Eurodollar Base Rate ” means the rate per annum determined by the Administrative Agent at approximately 11:00 a.m. (London time) on the date which is two Business Days prior to the beginning of the relevant Interest Period (as specified in the applicable Notice of Borrowing or Notice of Conversion/Continuation) by reference to the British Bankers’ Association Interest Settlement Rates (or the successor thereto if the British Banker’s Association is no longer making such rates available) for deposits in U.S. Dollars (as set forth by any service selected by the Administrative Agent which has been nominated by the British Bankers’ Association (or its successor) as an authorized information vendor for the purpose of displaying such rates) for a period equal to such Interest Period; provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the “Eurodollar Base Rate” shall be the interest rate per annum determined by the Administrative Agent to be the average of the rates per annum at which deposits in U.S. Dollars are offered for such relevant Interest Period to major banks in the London interbank market in London, England by the Reference Lenders at approximately 11:00 a.m. (London time) on the date which is two Business Days prior to the beginning of such Interest Period. If any of the Reference Lenders shall be unable or shall otherwise fail to supply such rates to the Administrative Agent upon its request, the rate of interest shall be determined on the basis of the quotations of the remaining Reference Lenders.

Eurodollar Rate Loans ” means Loans bearing interest at rates determined by reference to the Reserve Adjusted Eurodollar Rate as provided in Section 2.2A.

Event of Default ” means each of the events set forth in Section 8.

Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder from time to time, and any successor statute.

Exchange Rate ” means, on any day, the rate at which Canadian Dollars may be exchanged into U.S. Dollars (or, for purposes of the definition of “Canadian Dollar Equivalent” or any other provision of this Agreement requiring or permitting the conversion of U.S. Dollars to Canadian Dollars, the rate at which U.S. Dollars may be exchanged into Canadian Dollars) as set forth at

 

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approximately 11:00 a.m., New York City time, on such date on the Bloomberg Key Cross Currency Rates Page for Canadian Dollars. In the event that such rate does not appear on any Bloomberg Key Cross Currency Rate Page, the Exchange Rate shall be determined by reference to such other publicly available services for displaying exchange rates as selected by the Administrative Agent, or, at the discretion of the Administrative Agent, such Exchange Rate shall instead be the arithmetic average of the spot rates of exchange of the Administrative Agent in the primary market where its foreign currency exchange operations in respect of Canadian Dollars is then being conducted, at or about 10:00 a.m., local time, on such date for the purchase of U.S. Dollars (or Canadian Dollars, as the case may be) for delivery two Business Days later; provided that if at the time of any such determination, for any reason, no such spot rate is being quoted, the Administrative Agent may use any reasonable method it deems appropriate to determine such rate, and such determination shall be presumed correct absent manifest error.

Excluded Subsidiary ” means (a) any Subsidiary that is not a wholly-owned Subsidiary, (b) any wholly-owned Domestic Subsidiary that is restricted by Applicable Law from guaranteeing the Obligations, (c) any Immaterial Subsidiary (provided that Holdings shall not be permitted to exclude Immaterial Subsidiaries from guaranteeing the Obligations to the extent that (i) the aggregate amount of gross revenue for all Immaterial Subsidiaries (other than Unrestricted Subsidiaries) excluded by this clause (c) exceeds 5% of the consolidated gross revenues of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries for the most recent Test Period ended prior to the date of determination or (ii) the aggregate amount of total assets for all Immaterial Subsidiaries (other than Unrestricted Subsidiaries) excluded by this clause (c) exceeds 5% of the Consolidated Total Assets of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries as at the end of the most recent Test Period ended prior to the date of determination), (d) any Mortgage Subsidiary, (e) any Insurance Subsidiary, (f) any Disqualified Domestic Subsidiary or Domestic Subsidiary of a Foreign Subsidiary of the U.S. Borrower or U.S. FinCo, (g) any Subsidiary that is an SPE, (h) any Dormant Subsidiary and (i) any other Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent (confirmed in writing by notice to the U.S. Borrower), the cost or other consequences (including any adverse tax consequences) of providing a guarantee shall be excessive in view of the benefits to be obtained by the Lenders therefrom.

Excluded Swap Obligation ” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the guarantee of such Guarantor pursuant to the Guaranty of such Swap Obligation (or any guarantee thereof pursuant to the Guaranty) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guarantee of such Guarantor pursuant to the Guaranty becomes effective with respect to such Swap Obligation unless otherwise agreed in writing between the Administrative Agent and the Borrowers. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee is or becomes illegal.

Excluded Taxes ” means, with respect to any payment made by a Loan Party under any Loan Document, any of the following Taxes imposed on or with respect to the Administrative Agent, any Lender, any Issuing Bank, or any other recipient of any payment to be made by or on account of

 

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any obligation of any Loan Party hereunder, (a) Taxes imposed on or measured by its overall net income (however denominated), franchise taxes imposed on it (in lieu of net income taxes) and backup withholding taxes, in each case (1) that are Other Connection Taxes or (2) imposed by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lender Office is located, (b) any branch profits taxes imposed by the United States of America, (c) in the case of a Lender (other than an assignee pursuant to a request by a Borrower under Section 2.8B), any withholding Tax that is imposed on amounts payable to such Lender and is the result of any law in effect on the date on which such Lender becomes a party hereto (or designates a new Lender Office), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new Lender Office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding Tax pursuant to Section 2.7E(i), (d) any withholding Tax that is imposed on amounts payable to the Administrative Agent or a Lender that is attributable to the failure (other than as a result of a Change in Law) of the Administrative Agent or such Lender to comply with Section 2.7E(vi)(b) and (e) any U.S. Federal withholding Tax imposed by FATCA.

Existing Credit Agreement ” has the meaning assigned to that term in the recitals to this Agreement.

Facility Fee Rate ” means the applicable rate per annum set forth below as the case may be, based on the Capitalization Ratio as of the last day of the most recent Fiscal Year or period, as the case may be, for which Section 6.1 Financials have been delivered; provided that until the date of delivery to the Administrative Agent of the Section 6.1 Financials as of and for the Fiscal Quarter ended June 30, 2013, the Capitalization Ratio shall be deemed to be in Category 2 for purposes of determining the Facility Fee Rate:

 

CAPITALIZATION RATIO

   FACILITY FEE
RATE
 

Category 1

> 0.55 to 1.00

     0.500

Category 2

< 0.55 to 1.00

> 0.40 to 1.00

     0.500

Category 3

< 0.40 to 1.00

     0.375

Each change in the Facility Fee Rate resulting from a change in the Capitalization Ratio shall be effective with respect to all Commitments on and after the date of delivery to the Administrative Agent of the Section 6.1 Financials indicating such change until the date immediately preceding the next date of delivery of Section 6.1 Financials indicating another such change. At any time during which Holdings has failed to deliver Section 6.1 Financials, the Capitalization Ratio shall be deemed to be in Category 1 for purposes of determining the Facility Fee Rate.

 

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Facility Fees ” has the meaning assigned thereto in Section 2.3A.

Fair Market Value ” with respect to any asset means the sale value that would be obtained in an arm’s length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy. Fair Market Value shall be determined by Holdings acting in good faith.

FASB ” means the Financial Accounting Standards Board.

FATCA means Sections 1471 through 1474 of the Code as of the Restatement Effective Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), and any applicable Treasury regulation promulgated thereunder or published administrative guidance implementing such law.

Federal Funds Effective Rate ” means, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent.

Financial Performance Covenants ” means the covenants of Holdings set forth in Section 7.5.

Finished Lots ” means Entitled Land with respect to which (a) development has been completed to such an extent to allow use and construction of a Unit on such Entitled Land and, to the extent required, permits for the same are entitled to be obtained and (b) start of construction has not occurred.

Fiscal Quarter ” means a fiscal quarter of a Fiscal Year.

Fiscal Year ” means the fiscal year of Holdings and its Subsidiaries ending on December 31 of each calendar year.

Fixed Rate Loan ” means a Eurodollar Rate Loan or a CDOR Rate Loan.

Foreign Benefit Event ” means, with respect to any Foreign Plan, (i) the existence of an Unfunded Current Liability in excess of the amount permitted under any Applicable Law, or in excess of the amount that would be permitted absent a waiver from a Governmental Authority, (ii) the failure to make the required contributions or payments, under the terms of the plan or any Applicable Law, on or before the due date for such contributions or payments, (iii) the receipt of a notice by a Governmental Authority relating to the intention to terminate any such Foreign Plan, in whole or in part, or to appoint a replacement administrator, trustee or similar official to administer any such Foreign Plan, or alleging the insolvency of any such Foreign Plan, (iv) the incurrence of any liability by Holdings, the Co-Borrowers or any of their respective Subsidiaries or any ERISA

 

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Affiliate under Applicable Law on account of the complete or partial termination of such Foreign Plan or the complete or partial withdrawal of any participating employer therein, the occurrence of an event that could reasonably be expected to result in a complete or partial termination of a Canadian Pension Plan or (v) the occurrence of any transaction that is prohibited under any Applicable Law and that could reasonably be expected to result in the incurrence of any liability by Holdings, the Co-Borrowers or any of their respective Subsidiaries or any ERISA Affiliate, or the imposition on any of the foregoing entities of any fine, excise tax or penalty resulting from any noncompliance with any Applicable Laws.

Foreign Lender ” means any Lender or Issuing Bank that is not a U.S. Person.

Foreign Plan ” means any pension, retirement or employee benefit plan or arrangement that under Applicable Law outside of the United States is required to be funded through a trust, insurance contract or other funding vehicle, including a Canadian Pension Plan, and (i) that is maintained or contributed to by, or entered into with, Holdings, a Co-Borrower or any of their Subsidiaries or any ERISA Affiliate or (ii) with respect to which any of the foregoing entities would reasonably be expected to have actual liability; provided that, for the avoidance of doubt, a “Foreign Plan” does not include a “Plan” as defined below.

Foreign Subsidiary ” means any Subsidiary of U.S. FinCo or the U.S. Borrower that is not a Domestic Subsidiary.

Fronting Exposure ” means, at any time there is a Defaulting Lender, with respect to any Issuing Bank, such Defaulting Lender’s Pro Rata Share of the outstanding Letter of Credit Usage with respect to Letters of Credit issued by such Issuing Bank other than Letter of Credit Usage as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or cash collateralized in accordance with the terms hereof.

Fund ” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans or similar extensions of credit in the ordinary course.

Funding and Payment Office ” means the office of the Administrative Agent located at Eleven Madison Avenue, New York, NY 10010 (or such office of the Administrative Agent or any successor Administrative Agent specified by the Administrative Agent or such successor Administrative Agent in a written notice to the U.S. Borrower and the Lenders).

Funding Date ” means the date of the funding of a Loan, which shall be a Business Day.

GAAP ” means, subject to the limitations on the application thereof set forth in Section 1.2, generally accepted accounting principles, as in effect in the United States of America on the date of determination.

General Partner ” means TMM Holdings (G.P.) ULC, a British Columbia unlimited liability company and the general partner of Holdings.

Governmental Authority ” means the government of the United States, Canada, any other country or any multinational authority, or any state, province or political subdivision thereof, and any entity, body or authority exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including the PBGC and other quasi-governmental entities established to perform such functions.

 

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Guarantee Obligations ” means, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (a) to purchase any such Indebtedness or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such Indebtedness or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such Indebtedness of the ability of the primary obligor to make payment of such Indebtedness or (d) otherwise to assure or hold harmless the owner of such Indebtedness against loss in respect thereof (including endorsements of instruments for deposit or collection in the ordinary course of business or customary and reasonable indemnity obligations in effect on the Restatement Effective Date or entered into in connection with any acquisition or disposition of assets permitted under this Agreement). The amount of any Guarantee Obligation shall be deemed to be an amount equal to the stated or determinable amount of the Indebtedness in respect of which such Guarantee Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

Guaranteed Hedge Agreement ” means any Hedge Agreement that is entered into by and between any Loan Party or any Restricted Subsidiary and any Hedge Bank.

Guaranteed Hedge Obligations ” means the due and punctual payment and performance of all obligations of any Loan Party or Restricted Subsidiary under any Guaranteed Hedge Agreement (other than Excluded Swap Obligations).

Guaranteed Parties means, collectively, (a) the Lenders, (b) each Issuing Bank, (c) the Administrative Agent, (d) each Hedge Bank, (e) each Cash Management Bank, (f) the beneficiaries of each indemnification obligation undertaken by any Loan Party under the Loan Documents and (g) any successors, indorsees, transferees and assigns of any of the foregoing.

Guarantor ” means, individually, Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, each of the Subsidiary Guarantors or any other wholly-owned Domestic Subsidiary of U.S. FinCo or the U.S. Borrower that at any time has executed and delivered a Guaranty pursuant to Section 6.7 and that has not been released from the Obligations in accordance with the provisions of Section 9.7.

Guaranty ” means the Guaranty, annexed as Exhibit V hereto, dated as of the Initial Effective Date, as amended and restated as of the Restatement Effective Date, and entered into by and among Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Subsidiary Guarantors, or executed and delivered by any additional Subsidiary Guarantor from time to time thereafter pursuant to Section 6.7, as such Guaranty may thereafter be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

Hazardous Materials ” means (a) any petroleum or petroleum products, radioactive materials, friable asbestos, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing regulated levels of polychlorinated biphenyls, and radon gas; (b)

 

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any chemicals, materials or substances defined as or included in the definition of “hazardous substances”, “hazardous waste”, “hazardous materials”, “extremely hazardous waste”, “restricted hazardous waste”, “toxic substances”, “toxic pollutants”, “contaminants”, or “pollutants”, or words of similar import, under any applicable Environmental Law; and (c) any other chemical, material or substance, that is prohibited, limited or regulated by any Environmental Law.

Hedge Agreements ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement or any other master agreement (any such master agreement, together with any related schedules, a “ Master Agreement ”), including any such obligations or liabilities under any Master Agreement.

Hedge Bank ” means any Person that is a Lender, the Administrative Agent or an Affiliate of a Lender or the Administrative Agent at the time it enters into a Hedge Agreement or that is a Lender or the Administrative Agent or an Affiliate of a Lender or the Administrative Agent at any time after it has entered into a Hedge Agreement, in its capacity as a party thereto.

Historical Financial Statements ” means audited consolidated balance sheets and related consolidated statements of income and cash flows of Holdings and its consolidated Subsidiaries for the 2011 and 2012 Fiscal Years.

Holdings ” has the meaning assigned to that term in the preamble to this Agreement.

Housing Unit ” means a detached or attached (including townhouse condominium or condominium) single-family house (but excluding mobile homes) owned by a Co-Borrower or a Subsidiary of a Co-Borrower (i) which is completed or for which there has been a start of construction and (ii) which has been or is being constructed on any Real Estate which immediately prior to the start of construction constituted a Real Property Inventory hereunder.

Immaterial Subsidiary ” means, at any date of determination, any Restricted Subsidiary of U.S. FinCo or a Co-Borrower (a) whose total assets at the last day of the Test Period ending on the last day of the most recent fiscal period for which Section 6.1 Financials have been delivered were less than 5% of the Consolidated Total Assets of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries at such date, and (b) whose gross revenues for such Test Period were less than 5% of the consolidated gross revenues of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries for such period, in each case determined in accordance with GAAP.

 

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Indebtedness ” means, as applied to any Person, without duplication, (a) all indebtedness for borrowed money, (b) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP, (c) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money (other than current accounts payable and trade payables (including amounts payable under construction contracts) incurred in the ordinary course of business and accrued expenses incurred in the ordinary course of business), (d) any obligation owed for all or any part of the deferred purchase price of property or services (excluding any such obligations incurred under ERISA, current trade payables incurred in the ordinary course of business and obligations with respect to options or contracts to purchase real property, but including earn-outs with respect to any acquisition), (e) all obligations evidenced by notes, bonds (other than bid or performance bonds), debentures or other similar instruments, (f) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to any property or assets acquired by such Person (even though the rights and remedies of the seller or the lender under such agreement in the event of default are limited to repossession or sale of such property or assets), (g) all obligations, contingent or otherwise, as an account party under any letter of credit or under acceptance, letter of credit or similar facilities to the extent not reflected as trade liabilities on the balance sheet of such Person in accordance with GAAP (excluding any portion of the actual or potential reimbursement obligations that are secured by cash collateral), (h) all obligations, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any Disqualified Stock, (i) all obligations under Hedge Agreements, including, as of any date of determination, the net amounts, if any, that would be required to be paid by such Person if such Hedge Agreements were terminated on such date, (j) all Contingent Obligations in respect of obligations of the kind referred to in clauses (a) through (i) above and (k) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person; provided , that if such Person has not assumed such secured indebtedness that is nonrecourse to its credit, then the amount of indebtedness of such Person pursuant to this clause (k) shall be equal to the lesser of the amount of the secured indebtedness or the Fair Market Value of the assets of such Person which secure such indebtedness; provided , further , that obligations secured by liens on Cash or Cash Equivalent shall not constitute Indebtedness unless such obligations would appear as Indebtedness (or a loan or note or other equivalent term) on the consolidated balance sheet of such Person. For all purposes of this Agreement, the term “Indebtedness” shall not include (x) any reimbursement obligations in respect of Performance Letters of Credit, Construction Bonds or guaranties of performance obligations (such as bid or performance bonds), Non-Recourse Indemnity Guaranties or guaranties of non-financial obligations or (y) Indebtedness owed by one Loan Party to another Loan Party.

Indemnified Taxes ” means Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by any Loan Party under any Loan Document.

Indemnitee ” has the meaning assigned to that term in Section 10.2B.

Information ” has the meaning assigned to that term in Section 10.19.

Initial Effective Date ” means July 13, 2011.

Initial Yield ” means with respect to additional Commitments extended pursuant to Section 2.1A(iii), the amount (as reasonably determined by the Administrative Agent) equal to the sum of (a) the margin above the Reserve Adjusted Eurodollar Rate or the CDOR Rate, as the case

 

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may be, on the Loans to be made under such Commitments (increased by (i) any “Facility Fee Rate” applicable on the date of the calculation and (ii) the amount that any “LIBOR floor” applicable to such Loans on the date of the calculation exceeds the Reserve Adjusted Eurodollar Rate for a one-month Interest Period on such date) and (b) the quotient obtained by dividing (i) the amount of any Up-Front Fees on such Commitments (including any fee or discount received by Lenders in connection with the initial extension thereof) by (ii) the lesser of (x) the Weighted Average Life to Maturity of such Commitments and (y) four.

Insurance Subsidiaries ” means (a) Taylor Woodrow Insurance Services, Inc., (b) Beneva Indemnity Company, (c) Total Florida Title, Inc. and (d) any other corporation, limited partnership, limited liability company or business trust that is (i) organized after the Restatement Effective Date or designated by Holdings as an Insurance Subsidiary on or after the Restatement Effective Date, (ii) a Subsidiary of Holdings and (iii) engaged in the business of providing title insurance, captive insurance (whether for Holdings and its Subsidiaries or otherwise) or insurance agency or other ancillary or complementary services that in each case is subject to state regulation and/or licensing requirements.

Insured Liens ” has the meaning assigned to such term in clause (f) of the definition of “Permitted Encumbrances.”

Intangible Assets ” of any Person means all unamortized debt discount and expense, unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, write-ups of assets over their prior carrying value (other than write-ups which occurred prior to the Restatement Effective Date and other than, in connection with the acquisition of an asset, the write-up of the value of such asset (within one year of its acquisition) to its fair market value in accordance with GAAP) and all other items which would be treated as intangible on the consolidated balance sheet of such Person prepared in accordance with GAAP.

Intellectual Property ” has the meaning assigned to that term in Section 5.5C.

Interest Payment Date ” means:

(a) with respect to any Daily Rate Loan, the last Business Day in each of March, June, September and December of each year, commencing on June 30, 2011; and

(b) with respect to any Fixed Rate Loan, the last day of each Interest Period applicable to such Loan; provided that in the case of each Interest Period of longer than three months, “Interest Payment Date” shall also include the dates that are three months and, if applicable, six months, nine months, twelve months or such other period as agreed by all Lenders pursuant to Section 2.2B after the commencement of such Interest Period.

Interest Period ” has the meaning assigned to that term in Section 2.2B.

Interest Rate Determination Date ” means each date for calculating the Reserve Adjusted Eurodollar Rate or the CDOR Rate, as applicable, for purposes of determining the interest rate in respect of an Interest Period. The Interest Rate Determination Date for purposes of calculating the Reserve Adjusted Eurodollar Rate shall be the second Business Day prior to the first day of the related Interest Period and for purposes of calculating the CDOR Rate shall be the first day of the related Interest Period.

 

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Investment ” means (a) any direct or indirect purchase or other acquisition by U.S. FinCo, a Co-Borrower or any of their respective Subsidiaries of, or of a beneficial interest in, stock or other Securities of any other Person, or (b) any direct or indirect loan, advance (other than loans or advances to employees for moving, education, computer, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by U.S. FinCo, a Co-Borrower or any of their respective Subsidiaries to any other Person, including all indebtedness and accounts receivable acquired from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business; provided , however , that the term “Investment” shall not include (i) current trade and customer accounts receivable for goods furnished or services rendered in the ordinary course of business and payable in accordance with customary trade terms, (ii) advances and prepayments to suppliers for goods and services in the ordinary course of business, (iii) Capital Stock or other Securities acquired in connection with the satisfaction or enforcement of Indebtedness or claims due or owing to U.S. FinCo, a Co-Borrower or any of their respective Subsidiaries or as security for any such Indebtedness or claims, (iv) Cash, (v) Cash Equivalents or (vi) the licensing or contribution of Intellectual Property in the ordinary course of business. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment.

IPO ” means the initial underwritten public offering of Class A common stock, par value $0.00001 per share, of TMHC pursuant to the Registration Statement.

Issuing Bank ” means (a) as the term is used generally in this Agreement, each Lender with a Letter of Credit Commitment, and (b) as the term is used with respect to specific Letters of Credit, (i) with respect to any Letter of Credit issued on or after the Initial Effective Date but prior to the Restatement Effective Date, Credit Suisse AG, in its capacity as the issuer of such Letter of Credit, and (ii) with respect to any Letter of Credit issued on or after the Restatement Effective Date, the Lender that shall have issued (or arranged for the issuance of) such Letter of Credit pursuant to its Letter of Credit Commitment, in its capacity as the issuer of such Letter of Credit, and any other Lender reasonably acceptable to Holdings and the Administrative Agent that shall become an Issuing Bank hereunder, with respect to Letters of Credit issued by it. Each Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

Judgment Currency ” has the meaning assigned to that term in Section 10.24.

Judgment Currency Conversion Date ” has the meaning assigned to that term in Section 10.24.

Knowledge ” means the actual knowledge, after due inquiry, of any Responsible Officer of Holdings or a Co-Borrower.

LC Disbursement ” has the meaning assigned to that term in Section 3.1C.

 

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Lender ” and “ Lenders ” means the Persons identified as “Lenders” and listed on Schedule 2.1 of this Agreement, together with their successors and permitted assigns pursuant to Section 10.1 and the term “Lenders” shall include any Lender providing an additional Commitment pursuant to Section 2.1A(iii); provided that the term “Lenders”, when used in the context of a particular Commitment, means the Lenders having that Commitment.

Lender Default means, subject to Section 3.6D, (a) the failure or refusal (which has not been retracted within three Business Days) of a Lender to make available its portion of any Loans (including any Loans made to reimburse drawings under Letters of Credit) in accordance with Section 2.1A or its portion of Unpaid Drawing in accordance with Section 3.3C unless such Lender notifies the Administrative Agent and the Co-Borrowers in writing that such failure or refusal is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (b) a Lender having notified a Borrower and/or the Administrative Agent that it does not intend to comply with its obligations under Section 2.1 or Section 3.1C, 3.3B or 3.3C, or has made a public statement to the effect that it does not intend to comply with such obligations hereunder or its funding obligations under other agreements generally in which it commits to extend credit (unless such writing or public statement states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) the failure, within three Business Days after written request by the Administrative Agent or the Co-Borrowers, of a Lender to confirm in writing to the Administrative Agent and the Co-Borrowers that it will comply with its prospective obligations under Section 2.1 or Section 3.1C, 3.3B or 3.3C ( provided that a Lender Default with respect to such Lender shall cease pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Co-Borrowers), or (d) a Lender or any Person that directly or indirectly controls such Lender becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in, any such proceeding or appointment; provided that a Lender Default shall not be deemed to have occurred solely by virtue of the ownership or acquisition of any equity interests in any Lender or any Person that directly or indirectly controls such Lender by a Governmental Authority or an instrumentality thereof, so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.

Lender Office ” means, as to any Lender, the office or offices of such Lender specified in the Administrative Questionnaire completed by such Lender and delivered to the Administrative Agent, and the office or offices of such Lender that the Administrative Agent notifies Holdings promptly but not later than two days after the Restatement Effective Date, or such other office or offices as such Lender may from time to time designate to Holdings and the Administrative Agent.

Letters of Credit ” means the commercial Letters of Credit and standby Letters of Credit issued or to be issued by an Issuing Bank for the account of a Co-Borrower pursuant to Section 3.1 for general corporate purposes; provided , however , that no Issuing Bank shall be obligated to issue commercial (as opposed to standby) Letters of Credit hereunder.

 

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Letter of Credit Commitment ” means, with respect to each Issuing Bank, the commitment of such Issuing Bank to issue Letters of Credit hereunder as set forth on Schedule 3.1. The aggregate Letter of Credit Commitments of all Issuing Banks on the Restatement Effective Date is $200,000,000.

Letter of Credit Issuing Office ” means, as to any Issuing Bank, the address from time to time specified in writing by such Issuing Bank to the Borrowers and the Administrative Agent as its letter of credit issuing office.

Letter of Credit Usage ” means, as at any date of determination, the sum of, without duplication, (a) the Canadian LC Exposure plus (b) the U.S. LC Exposure.

Lien ” means any mortgage, pledge, security interest, hypothecation, assignment, lien (statutory or other) or similar encumbrance, and any easement, right-of-way, license, restriction (including zoning restrictions), defect, exception or irregularity in title or similar charge or encumbrance (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof); provided that in no event shall an operating lease be deemed to be a Lien.

Loan Documents ” means this Agreement, the Amendment Agreement, the Notes and the Guaranty.

Loan Parties ” means Holdings, Canada Holdings, U.S. Holdings, Canada Intermediate Holdings, U.S. FinCo, each Borrower and each Subsidiary Guarantor.

Loans ” means the loans made by the Lenders to any Borrower pursuant to Section 2.1A(i) or 2.1A(iii), if applicable.

Loan Modification Offer ” has the meaning assigned to that term in Section 2.9A.

Lots Under Development ” means Entitled Land where physical site improvement has commenced but which is not a Finished Lot, Unit Under Construction, Completed Unit, Speculative Unit, Model Unit or Unit Under Contract.

Management Agreements ” means (1) the Sponsor Management Services Agreement dated as of the Initial Effective Date, among U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, TPG Capital, L.P. and OCM FIE, LLC and (2) JHI Management Services Agreement dated as of the Initial Effective Date, by and among JHI Investments Inc., U.S. Holdings, Canada Holdings and Canada Intermediate Holdings.

Management Investors ” means the (a) management officers, directors and employees of TMHC or any of its Subsidiaries who are investors in (i) TMHC or New TMM or (ii) one or more investment funds managed by any of the Sponsors that is an investor in TMHC or New TMM, in each case as of the Restatement Effective Date or (b) management-level employees or directors who become investors in the foregoing within 60 days of the Restatement Effective Date in connection with the Transactions; provided that not more than 25 management-level employees and directors who were not Management Investors as of the Restatement Effective Date shall become “Management Investors” following the Restatement Effective Date.

 

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Master Agreement ” has the meaning assigned to that term in the definition of “Hedge Agreements”.

Material Adverse Effect ” means a circumstance or condition affecting the business, assets, operations, properties or financial condition of Holdings and its Subsidiaries, taken as a whole, that would materially adversely affect (a) the ability of the Co-Borrowers and the other Loan Parties, taken as a whole, to perform their payment obligations under this Agreement or any of the other Loan Documents or (b) the rights and remedies of the Administrative Agent and the Lenders under this Agreement or any of the other Loan Documents.

Maximum Amount ” has the meaning assigned to that term in Section 10.13A.

Measurement Quarter ” has the meaning set forth in Section 7.5.

Minority Investment ” means any Person (other than a Subsidiary of Holdings) in which U.S. FinCo, a Co-Borrower or any Restricted Subsidiary owns Capital Stock.

Model Unit ” means a Completed Unit to be used as a model home in connection with the sale of Units in a residential housing project.

Moody’s means Moody’s Investors Service, Inc.

Mortgage Subsidiary ” means (a) Taylor Morrison Home Funding LLC, (b) Mortgage Funding Direct Ventures, LLC and (c) any corporation, limited partnership, limited liability company or business trust that is (i) organized after the Restatement Effective Date or designated by Holdings as a Mortgage Subsidiary on or after the Restatement Effective Date, (ii) a Subsidiary of Holdings and (iii) engaged in the business of issuing mortgage loans on residential properties (whether for purchase of homes or refinancing of existing mortgages), purchasing and selling mortgage loans, issuing securities backed by mortgage loans, acting as a broker of mortgage loans and other activities customarily associated with mortgage banking and related businesses.

Multiemployer Plan ” means a “multiemployer plan”, as defined in Section 4001(a)(3) of ERISA, that is subject to ERISA and is or was within the last six years maintained by Holdings, a Co-Borrower or any ERISA Affiliate, to which Holdings, a Co-Borrower or any ERISA Affiliate is contributing or to which Holdings, a Co-Borrower or any ERISA Affiliate had an obligation to contribute within the last six years or with respect to which Holdings, a Co-Borrower or any ERISA Affiliate has any liability (whether actual or contingent).

New TMM ” means TMM Holdings II Limited Partnership, a limited partnership formed under the laws of the Cayman Islands.

Non-Consenting Lender ” has the meaning assigned to that term in Section 10.5B.

Non-Recourse Indebtedness ” with respect to any Person means (a) Indebtedness of such Person for which (i) the sole legal recourse for collection of principal and interest on such Indebtedness is (A) against the specific property (and improvements constructed thereon) identified in the instruments evidencing or securing such Indebtedness and such property was acquired (directly or indirectly, including through the purchase of Capital Stock of the Person owning such property) with the proceeds of such Indebtedness or such Indebtedness was incurred within 180 days after the acquisition (directly or indirectly, including through the purchase of Capital Stock of the Person

 

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owning such property) of such property, (B) so long as such Person does not (y) own or acquire any assets other than the property being acquired, constructed, installed or improved with the proceeds of such Indebtedness, any buildings or other improvements then or thereafter erected on such property and any other property or assets (including any Intangible Assets) incidental or related thereto or (z) incur any liabilities other than such Indebtedness and any other liabilities incidental thereto or related to the ownership, operation and development of such property in the ordinary course of business, against any other assets of such Person, and (C) the enforcement of any applicable Non-Recourse Payment Guaranties in respect of such Indebtedness and (ii) no other assets of such Person may (except as provided in clause (a)(i) above) be realized upon in collection of principal or interest on such Indebtedness and (b) any amendment, modification, extension or refinancing of any Indebtedness described in clause (a) above, provided that such Indebtedness (as amended, modified, extended or refinanced) satisfies the requirement set forth in clause (a) above (other than the requirement that such Indebtedness shall have been incurred within 180 days after the acquisition of the specific property described in cause (a)(i)(A) above). Indebtedness which otherwise constitutes Non-Recourse Indebtedness will not lose its character as Non-Recourse Indebtedness because there is recourse to any borrower, any guarantor or any other Person with respect to such Indebtedness for or in respect of (a) environmental warranties and indemnities, (b) indemnities for and losses arising from fraud, misrepresentation, misapplication or non payment of rents, profits, insurance and condemnation proceeds and other sums actually received by the borrower from secured assets to be paid to the lender, waste and mechanics’ liens, (c) a voluntary bankruptcy filing (or similar filing or action) or collusive involuntary bankruptcy filings by such Person, and other events, actions and circumstances customarily excluded by institutional lenders from exculpation provisions and/or included in separate indemnification agreements or guaranties in non-recourse financings of real estate or (d) completion guaranties (clauses (a) through (d) collectively being referred to hereinafter as “ Non-Recourse Indemnity Guaranties ”).

Non-Recourse Indemnity Guaranties ” has the meaning assigned to such term in the definition of “Non-Recourse Indebtedness”.

Non-Recourse Payment Guaranties ” means Guarantee Obligations (whether secured or unsecured) incurred by (a) U.S. FinCo, the U.S. Borrower or any Subsidiary Guarantor in respect of Non-Recourse Indebtedness of any Restricted Subsidiary of U.S. FinCo or the U.S. Borrower and (b) the Canadian Borrower in respect of Non-Recourse Indebtedness of any Restricted Subsidiary of the Canadian Borrower.

Notes ” means (a) the promissory notes of a Borrower issued pursuant to Section 2.1D and (b) any promissory notes issued by a Borrower in connection with assignments of the Commitment and Loans of any Lender, in each case substantially in the form of Exhibit IV annexed hereto, as they may be amended, restated, supplemented or otherwise modified from time to time.

Notice of Borrowing ” means a notice in the form of Exhibit I annexed hereto delivered by a Borrower to the Administrative Agent pursuant to Section 2.1B with respect to a proposed borrowing.

Notice of Conversion/Continuation ” means a notice substantially in the form of Exhibit II annexed hereto delivered by a Borrower to the Administrative Agent pursuant to Section 2.2D with respect to a proposed conversion or continuation of the applicable basis for determining the interest rate with respect to the Loans specified therein.

 

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Notice of Intent to Cure ” has the meaning assigned to such term in Section 6.1(iii).

Notice of Issuance of Letter of Credit ” means a notice in the form of Exhibit III annexed hereto delivered by a Borrower to the Administrative Agent pursuant to Section 3.1B(i) with respect to the proposed issuance of a Letter of Credit.

Obligation Currency ” has the meaning assigned to that term in Section 10.24.

Obligations ” means the collective reference to (a) the due and punctual payment of (i) the principal of and premium, if any, and interest at the applicable rate provided in this Agreement (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made by any Borrower under this Agreement in respect of any Letter of Credit, when and as due, including payments in respect of reimbursement of disbursements, interest thereon and obligations to provide cash collateral and (iii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of any Borrower or any other Loan Party to any of the Guaranteed Parties under this Agreement and the other Loan Documents, (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of any Borrower under or pursuant to this Agreement and the other Loan Documents, (c) the due and punctual payment and performance of all the covenants, agreements, and liabilities of each other Loan Party under or pursuant to this Agreement or the other Loan Documents, (d) the due and punctual payment and performance of all Guaranteed Hedge Obligations and (e) the due and punctual payment and performance of all Cash Management Obligations. Notwithstanding the foregoing, (i) the Guaranteed Hedge Obligations and the Cash Management Obligations shall be guaranteed pursuant to the Guaranty only to the extent that, and for so long as, the other Obligations are so guaranteed and (ii) any release of Guarantors effected in the manner permitted by this Agreement and the other Loan Documents, shall not require the consent of the holders of the Guaranteed Hedge Obligations or the holders of the Cash Management Obligations.

OFAC ” has the meaning assigned to that term in Section 5.15.

Officer’s Certificate ” means, with respect to any Person, a certificate executed on behalf of such Person (a) if such Person is a partnership or limited liability company, by its chairman of the board (if an officer) or chief executive officer or by the chief financial officer of its general partner or managing member or other Person authorized to do so by its Organizational Documents, (b) if such Person is a corporation, on behalf of such corporation by its chairman of the board (if an officer) or chief executive officer or its chief financial officer or any vice president, and (c) if such Person is Holdings or any of its Subsidiaries, a Responsible Officer.

Organizational Documents ” means (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction), (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and, if applicable, any agreement, instrument,

 

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filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

Other Connection Taxes ” means, with respect to any Lender or Issuing Bank, Taxes imposed as a result of a present or former connection between such Lender or Issuing Bank, as applicable, and the jurisdiction imposing such Taxes (other than a connection arising from such Lender or Issuing Bank having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, any Loan Document).

Other Credit Extensions ” has the meaning assigned to that term in Section 2.1A(iii).

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 any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

PAPA ” means an arrangement, other than with an Affiliate of any Loan Party, which may be unsecured or secured by a Lien granted in conjunction with purchase contracts for the purchase of Real Estate and which provides for future payments due to the sellers of such Real Estate, which future payments may be made at the time of the sale of homes constructed on such Real Estate (or on a date related to the sale or failure to sell such homes) and which payments may be contingent on the sale price of such homes, which arrangement may include (a) adjustments to the land purchase price, (b) profit participations, (c) community marketing fees and community enhancement fees and (d) reimbursable costs paid by the land developer.

Participant ” has the meaning assigned to that term in Section 10.1D.

Participant Register ” has the meaning specified in Section 10.1D.

PBGC ” means the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA (or any successor thereto).

Pension Act ” means the Pension Protection Act of 2006, as amended.

Performance Letter of Credit ” means any letter of credit of any Co-Borrower or any Subsidiary of a Co-Borrower that is issued for the benefit of a municipality, other Governmental Authority, utility, water or sewer authority, or other similar entity for the purpose of assuring such beneficiary of the letter of credit of the proper and timely completion of construction work.

Permitted Amendments ” means an amendment to this Agreement, effected in connection with a Loan Modification Offer pursuant to Section 2.9, providing for an extension of the Commitment Termination Date applicable to all or a portion of the Loans and/or the Commitments of the Accepting Lenders and, in connection therewith, (a) a change in the interest rates with respect to the Loans and/or Commitments of the Accepting Lenders, (b) a change in the fees payable to, or the inclusion of new fees to be payable to, the Accepting Lenders and/or (c) such other modifications to this Agreements and the other Loan Documents to take effect after the Commitment Termination Date then in effect as may be specified therein.

 

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Permitted Cure Securities ” means equity securities of Holdings (or any direct or indirect parent thereof, to the extent contemplated by Section 8.12) having no mandatory redemption, repurchase or similar requirements prior to 120 days after the latest maturity date for any of the Loans, and upon which all dividends or distributions (if any) shall be payable solely in additional shares of such equity security.

Permitted Encumbrances ” means the following types of Liens:

(a) Liens for taxes, assessments or other governmental or quasi-governmental charges or claims that (i) are not yet overdue for a period of more than 30 days, (ii) are being contested in good faith by appropriate proceedings for which appropriate reserves have been established in accordance with GAAP, if required, or (iii) solely encumber property abandoned or in the process of being abandoned;

(b) Liens imposed by law, such as landlord’s, carriers’, warehousemen’s, repairmen’s, construction contractors’ and mechanics’ Liens and other similar Liens, in each case so long as such Liens arise in the ordinary course of business and (i) do not individually or in the aggregate have a Material Adverse Effect or (ii) are with respect to amounts that are (x) not yet overdue for a period of more than 30 days or (y) are being contested in good faith by appropriate proceedings for which appropriate reserves have been established in accordance with GAAP, if required;

(c) Liens arising from judgments or decrees for the payment of money in circumstances not constituting an Event of Default under Section 8.7;

(d) Liens incurred or pledges or deposits made in connection with workers’ compensation, unemployment insurance and other types of social security or similar legislation, or to secure (or secure the bonds or other comparable instrument securing) the performance of tenders, statutory obligations, surety, stay, customs and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds, utility services, developer’s or others’ obligations to make on-site or off-site improvements, obligations to title insurance companies and other similar obligations (including those to secure health, safety and environmental obligations) incurred in the ordinary course of business but not including any Liens imposed under the Pension Benefits Act (Ontario) or any pension standards legislation of any other applicable jurisdiction;

(e) ground leases or other leases, subleases, licenses or sublicenses in respect of real property on which properties owned or leased by U.S. FinCo, a Co-Borrower or any Subsidiary of U.S. FinCo or a Co-Borrower are located;

(f) easements, rights-of-way, licenses, dedications, covenants, conditions, assessment district or similar Liens in connection with municipal or special district financing, agreements with adjoining landowners or state or local Government Authorities, restrictions (including zoning restrictions, ordinances and similar restrictions), reservations, recorded plats, subdivision maps, Development Agreements, recorded condominium or home owner association documents, defects, exceptions or irregularities in title, encroachments, protrusions, water course rights, rights of water and rights in the nature of easements for walkways, sidewalk, public ways, sewers, drains, gas, soil, steam and water mains or pipelines, electrical lights and power, telephone, television and cable conduits, poles, wires or cables granted to reserved or vested in any Governmental Authority or public or private utility and other similar charges or encumbrances, all of which in the aggregate do not interfere in any material respect with the business of U.S. FinCo, the Co-Borrowers and their Subsidiaries, and that were not

 

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incurred in connection with and do not secure any Indebtedness (other than in connection with municipal or special district financing) and Liens insured over by title policies obtained by any Loan Party with respect to Real Property Inventory (such Liens being “ Insured Liens ”);

(g) any interest or title of a lessor, sublessor, licensor or sublicensor or secured by a lessor’s, sublessor’s, licensor’s or sublicensor’s interest under any lease, sublease, license or sublicense in the ordinary course of business;

(h) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(i) Liens on goods or inventory the purchase, shipment or storage price of which is financed by a documentary letter of credit or bankers’ acceptance issued or created for the account of U.S. FinCo or a Co-Borrower or any Subsidiary of U.S. FinCo or a Co-Borrower; provided that such Lien secures only the obligations of U.S. FinCo, the Co-Borrowers or such Subsidiaries in respect of such letter of credit;

(j) leases or subleases, licenses or sublicenses granted to others not interfering in any material respect with the business of U.S. FinCo, the Co-Borrowers and their Subsidiaries, taken as a whole;

(k) Liens created in the ordinary course of business in favor of banks and other financial institutions over credit balances of any bank accounts of U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries held at such banks or financial institutions, as the case may be, to facilitate the operation of cash pooling and/or interest set-off arrangements in respect of such bank accounts in the ordinary course of business;

(l) Liens arising from precautionary UCC financing statement or similar filings made in respect of operating leases entered into by U.S. FinCo, a Co-Borrower or any Subsidiary of U.S. FinCo or a Co-Borrower;

(m) Liens for homeowner, condominium and similar association fees, assessments and other payments;

(n) rights of purchasers and borrowers with respect to security deposits, escrow funds and other amounts held by U.S. FinCo, a Co-Borrower or any Subsidiary of U.S. FinCo or a Co-Borrower;

(o) pledges, deposits and other Liens existing under, or required to be made in connection with, (i) earnest money obligations, escrows or similar purpose undertakings or indemnifications in connection with any purchase and sale agreement, (ii) Development Agreements or other contracts entered into with Governmental Authorities (or an entity sponsored by a Governmental Authority) in connection with the entitlement of real property or (iii) agreements for the funding of infrastructure, including in respect of the issuance of community facility district bonds, metro district bonds, subdivision improvement bonds and similar bonding requirements arising the ordinary course of a Real Estate Business;

(p) Liens on or leases of Model Units and additions, accessions, improvements and replacements and customary deposits in connection therewith and proceeds and products therefrom;

 

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(q) assignments of insurance or condemnation proceeds provided to landlords (or their mortgagees) pursuant to the terms of any lease of property leased by U.S. FinCo, a Co-Borrower or any Subsidiary of U.S. FinCo or a Co-Borrower, in each case with respect to the property so leased, and customary Liens and rights reserved in any lease for rent or for compliance with the terms of such lease;

(r) without limiting the scope of clause (f) above, minor encroachments by improvements located on property over adjacent lands and minor encroachments over the property by improvements of adjacent landowners, if existing on the date of the title searches conducted for purposes of Schedule 7.2;

(s) in connection with any specific Liens listed on Schedule 7.2, any postponement of the same to another Permitted Encumbrance which is registered on title;

(t) with respect to any real property of the Canadian Borrower or any of its Subsidiaries located in Ontario, any subsisting restrictions, exceptions, reservations, limitations, provisos and conditions (including royalties, reservation of mines, mineral rights and timber rights, access to navigable waters and similar rights) expressed in any original grants from the applicable Governmental Authority;

(u) with respect to any real property of the Canadian Borrower or any of its Subsidiaries located in Ontario, any and all encumbrances (including rights, privileges and claims in the nature of profit a prendre) in favor of aboriginal peoples, native peoples or First Nations that do not impair in any material respect the value of the development project subject thereto or the ability of the Loan Parties and the Restricted Subsidiaries to develop such properties or sell residential units or lots in such project in the manner presently contemplated by the applicable parties;

(v) with respect to any real property of the Canadian Borrower or any of its Subsidiaries located in Ontario, the exceptions or qualifications to title found in Section 44(1) of the Land Titles Act (Ontario), save and except for the exceptions and qualifications in paragraphs 1, 2, 3, 4, 5, 8, 11 and 14;

(w) Liens (i) of a collection bank arising under Section 4-210 of the UCC on items in the course of collection and (ii) in favor of a banking institution arising as a matter of law encumbering deposits (including the right to set off) and which are within the general parameters customary in the banking industry;

(x) Liens arising pursuant to vexatious, frivolous or meritless claims, suits, actions or filings initiated, or other similar bad faith actions taken, by a Person that is not an Affiliate of Holdings; provided that a Loan Party is disputing such Lien in good faith and by appropriate proceedings; and

(y) Liens securing reimbursement obligations in respect of Performance Letters of Credit, Construction Bonds or guaranties of performance obligations (such as bid or performance bonds), in each case, incurred in the ordinary course of business.

Permitted Purchase Money Loans ” means, collectively, Seller Purchase Money Loans and Assumed Purchase Money Loans.

 

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Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, limited partnership, governmental authority or other entity.

Plan ” means (a) any Multiemployer Plan or (b) any single employer plan, as defined in Section 4001(a)(15) of ERISA that is subject to ERISA and (i) is maintained for employees of Holdings, a Co-Borrower or any Subsidiary of Holdings or ERISA Affiliate or (ii) was so maintained and in respect of which Holdings, a Co-Borrower or any Subsidiary of Holdings or ERISA Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated.

Prime Rate ” means the rate of interest per annum announced from time to time by Credit Suisse AG as its prime commercial lending rate in effect at its principal office in New York City. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. Credit Suisse AG or any other Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.

Pro Forma Basis ” means, with respect to compliance with any test or covenant hereunder, compliance with such covenant or test after giving effect to the Transactions or any proposed acquisition, investment, distribution or other action which requires compliance on a pro forma basis, using, for purposes of determining such compliance, the historical financial statements of all entities or assets so acquired or to be acquired and the consolidated financial statements of Holdings and its Subsidiaries which shall be reformulated as if the Transactions or such acquisition, investment, distribution or other action, and any acquisitions which have been consummated during the period, and any Indebtedness or other liabilities incurred in connection with any such acquisition, investment, distribution or other action had been consummated at the beginning of such period (and assuming that such Indebtedness bears interest during any portion of the applicable measurement period prior to the relevant acquisition at the weighted average of the interest rates applicable to outstanding Loans during such period).

Pro Rata Share ” means (a) with respect to all payments, computations and other matters relating to the Commitments or the Loans (or any Class of Commitments or Loans, in the case of the allocation of borrowings of Loans pursuant to Section 2.1A(i), 2.1A(iii) or 2.9 (except as otherwise expressly provided in any such Section), payments of principal in respect of Commitments and Loans on any Commitment Termination Date pursuant to Section 2.1A(i), 2.1A(iii) or 2.9, any payment of interest in respect of Loans pursuant to Section 2.2, any payment of Facility Fees pursuant to Section 2.3A and any payment of Letter of Credit fees pursuant to Section 3.2) of any Lender, or any Letter of Credit issued by any Issuing Bank or any participations purchased by any Lender therein, the percentage obtained by dividing (i) the Revolving Loan Exposure (or the Revolving Loan Exposure with respect to such Class of Commitments or Loans, as applicable) of that Lender by (ii) the aggregate Revolving Loan Exposure (or the aggregate Revolving Loan Exposure with respect to such Class of Commitments or Loans, as applicable) of all the Lenders of such Class. The Pro Rata Share of each Lender on the Restatement Effective Date shall be set forth in the Register.

Process Agent ” has the meaning specified in Section 10.17C.

Qualified Additional Lender ” means any Lender and/or any other financial institution that would qualify as an Eligible Assignee, and, if providing an additional Commitment pursuant to Section 2.1A(iii) has been approved by the Administrative Agent and Issuing Banks holding a

 

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majority of the Letter of Credit Commitments if not already a Lender or an Affiliate of a Lender hereunder at such time (such approval not to be unreasonably withheld or delayed); provided that, with respect to such approval by the Issuing Banks, the approval of any Issuing Bank shall be deemed to have been given if such Issuing Bank shall not have responded within five Business Days of its receipt of a request for such approval.

Qualified Real Property Inventory ” means, as of any date, Real Property Inventory that is not subject to or encumbered by any Lien, other than (a) Liens described in clauses (a), (b), (c), (d), (e), (f), (g), (j), (m), (o), (q), (r), (t), (u) and (v) of the definition of “Permitted Encumbrances” and in clauses (i) and (xxv) of Section 7.2A, (b) any Lien that has been bonded around so as to remove such Lien as an encumbrance against such Real Property Inventory and (c) any Insured Lien.

Real Estate ” has the meaning assigned to that term in Section 6.1(viii).

Real Estate Business ” means homebuilding, housing construction, real estate (including masterplan) development or construction and the sale of homes, land and related real estate activities, including the provision of mortgage financing, realty brokerage, title insurance or any other business substantially related or reasonably incidental thereto.

Real Property Inventory ” means, as of any date, land that is owned by any Loan Party, which land is developed, is being developed or held for future development or sale, together with the right, title and interest of such Loan Party in and to the streets, the land lying in the bed of any streets, roads or avenues, open or proposed, in or of, the air space and development rights pertaining thereto and the right to use such air space and development rights, all rights of way, privileges, liberties, tenements, hereditaments and appurtenances belonging in or in any way appertaining thereto, all fixtures, all easements now or hereafter benefiting such land and all royalties and rights appertaining to the use and enjoyment of such land, together with all of the buildings and other improvements now or hereafter erected on such land, and any fixtures appurtenant thereto and all related property and assets (including any Intangible Assets) whether constructed, installed, acquired or otherwise existing at the time of or after the acquisition of, or initial construction on, such land.

Reference Lenders ” means (a) Credit Suisse AG and (b) another Lender determined by the Administrative Agent with the consent of Holdings, which consent shall not be unreasonably withheld or delayed.

refinance ” means to modify, refinance, replace, renew, refund, repay, restate, defer, substitute, supplement, reissue or extend (including pursuant to any defeasance or discharge mechanisms); and the term “refinances,” “refinanced” and “refinancing” as used for any purpose in this Agreement shall have correlative meanings.

Refinancing Indebtedness ” means, in respect of any Indebtedness (the “ Original Indebtedness ”), any Indebtedness that refinances such Original Indebtedness (or any Refinancing Indebtedness in respect thereof); provided that (a) the principal amount (or accreted value, if applicable) of such Refinancing Indebtedness shall not exceed the principal amount (or accreted value, if applicable) of the Original Indebtedness outstanding immediately prior to such refinancing except by an amount equal to the unpaid accrued interest and premiums (including tender premiums) thereon and underwriting discounts, defeasance costs and commissions, plus other reasonable amounts paid and fees and expenses incurred in connection with such refinancing, plus an amount equal to any existing unutilized commitment and letters of credit undrawn thereunder, (b) no

 

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Refinancing Indebtedness shall have any direct or contingent obligors that are not (or would not have been) obligated with respect to the Original Indebtedness being refinanced (except that a Loan Party may be added as an additional obligor) and (c) such Refinancing Indebtedness shall have a final maturity date equal to or later than the final maturity date of, and have a Weighted Average Life to Maturity equal to or greater than the then remaining Weighted Average Life to Maturity of, the Original Indebtedness.

Register ” has the meaning assigned to that term in Section 10.1C.

Registration Statement ” means the registration statement on Form S-1 (No. 333-185269), including the prospectus forming a part thereof, filed by TMHC with the SEC and declared effective under the Securities Act.

Related Parties ” means, with respect to any Person, such Person’s Affiliates and the directors, officers, employees, agents, trustees and advisors of such Person and of such Person’s Affiliates.

Release ” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Materials into the environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Materials), or into or out of any property, including the movement of any Hazardous Material through the air, soil, surface water, groundwater or property.

Reorganization Transactions ” means the transactions referred to as the “Reorganization Transactions” in the Registration Statement and effected pursuant the Reorganization Agreement dated as of April 9, 2013, among TMHC, New TMM, Holdings, U.S. Holdings, Canada Holdings and the other Persons party thereto.

Reportable Event ” means an event described in Section 4043 of ERISA and the regulations thereunder.

Requisite Class Lenders ” means, at any time of determination for any Class of Loans or Commitments, Lenders having or holding more than 50% of the aggregate Revolving Loan Exposure with respect to such Class; provided that the Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the determination of the Requisite Class Lenders at any time.

Requisite Lenders ” means Lenders having or holding more than 50% of the aggregate Revolving Loan Exposure of all Lenders; provided that the Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the determination of the Requisite Lenders at any time.

Reserve Adjusted Eurodollar Rate ” means, with respect to each day during each Interest Period pertaining to a Eurodollar Rate Loan, a rate per annum determined for such day in accordance with the following formula:

Eurodollar Base Rate

1.00 - Eurocurrency Reserve Requirements

Reset Date ” means (a) the date of each Notice of Borrowing for a Loan, if after giving effect thereto any Canadian Dollar Letter of Credit or Canadian Loan would be outstanding on such date, (b) the last Business Day of each month, if any Canadian Dollar Letter of Credit or Canadian

 

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Loan is outstanding on such day, (c) the date of the making of any Canadian Loan or the issuance, extension, renewal or amendment of any Canadian Dollar Letter of Credit and (d) any other day selected by the Administrative Agent (including any day on which the Administrative Agent calculates Letter of Credit Usage) if any Canadian Loan or Canadian Dollar Letter of Credit is outstanding on such day.

Responsible Officer ” means the President, the Vice President, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the Treasurer, the Assistant Treasurer, with respect to certain limited liability companies that do not have officers, any manager thereof, any other senior officer of Holdings or any other Loan Party designated as such in writing to the Administrative Agent by Holdings or such other Loan Party, as applicable, and, with respect to any document delivered on the Restatement Effective Date, the Secretary or the Assistant Secretary of any Loan Party. Any document delivered hereunder that is signed by an Responsible Officer shall be conclusively presumed to have been authorized by all necessary corporate, limited liability company, partnership and/or other action on the part of Holdings or any other Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Person.

Restatement Effective Date ” means April 12, 2013.

Restricted Subsidiary means, unless otherwise specified herein, any Subsidiary of a Co-Borrower or U.S. FinCo other than an Unrestricted Subsidiary.

Revolving Loan Exposure ” means, with respect to any Lender as of any date of determination (a) prior to the termination of the Commitments, that Lender’s Commitment and (b) after the termination of the Commitments, the sum of (i) the U.S. Dollar Equivalent of the aggregate outstanding principal amount of the Loans (or the relevant Class of Loans in connection with a calculation by Class under the definition of “Pro Rata Share”) of that Lender, plus (ii) in the event that Lender is an Issuing Bank, the aggregate Letter of Credit Usage in respect of all Letters of Credit issued by that Lender (net of any participations purchased by other Lenders in such Letters of Credit), plus (iii) the U.S. Dollar Equivalent of the aggregate amount of all participations purchased by that Lender in any issued Letters of Credit or any Unpaid Drawings.

Revolving Loan Yield ” means, at the time of the establishment of any additional Commitments pursuant to Section 2.1A(iii), the sum of (i) the Applicable Margin (as increased by the Facility Fee Rate applicable on such date) then in effect for Fixed Rate Loans under the Commitments (other than such additional Commitments), (ii) the amount that any “LIBOR floor” applicable to such Fixed Rate Loans on such date exceeds the Reserve Adjusted Eurodollar Rate for a one-month Interest Period on such date and (iii) one fourth of the Up-Front Fees paid in respect of the Commitments (other than such additional Commitments). If immediately prior to the establishment of any additional Commitments pursuant to Section 2.1A(iii) there shall exist more than one Class of Commitments hereunder, the Revolving Loan Yield shall be determined separately for each such Class.

S&P ” means Standard & Poor’s Ratings Service, a division of the McGraw-Hill Companies, Inc.

SEC ” means the U.S. Securities and Exchange Commission or any successor thereto.

 

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Section 6.1 Financials ” means the financial statements delivered, or required to be delivered, pursuant to Section 6.1(i) or (ii) together with the accompanying officer’s certificate delivered, or required to be delivered, pursuant to Section 6.1(iii).

Securities ” means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

Securities Act ” means the Securities Act of 1933, as amended from time to time, the rules and regulations promulgated thereunder, and any successor statute.

Seller Purchase Money Loan ” means, at any time, (a) any loan made to a Loan Party by the seller of Real Property Inventory in a single transaction or separate transactions for the exclusive purpose of purchasing such Real Property Inventory, provided that (i) the original aggregate principal amount of such loan shall not exceed the sum of (x) the purchase price of the Real Property Inventory securing such loan, plus (y) the aggregate amount of costs and expenses incurred in connection with the purchase of such Real Property Inventory and such loan, plus (z) the aggregate amount of all reserves required to be established pursuant to the terms and conditions of such loan and (ii) such loan may only be secured by a security interest on such Real Property Inventory and/or an Equity Pledge and (b) any amendment, modification, extension or refinancing of such loan, provided that with respect to any amendment, modification, extension or refinancing of such loan, (i) the aggregate principal amount thereof shall not exceed the sum of (x) the greater of (A) the outstanding principal amount of, and accrued interest and prepayment premiums and similar amounts on, such loan at the time of such amendment, modification, extension or refinancing and (B) the purchase price of the Real Property Inventory securing such loan, plus (y) the aggregate amount of costs and expenses incurred in connection with such amendment, modification, extension or refinancing, plus (z) the aggregate amount of all reserves required to be established pursuant to the terms and conditions of such amendment, modification, extension or refinancing (less any reserves returned to such Loan Party in connection with such amendment, modification, extension or refinancing) and (ii) such loan (as amended, modified, extended or refinanced) shall not be secured by the assets of any Loan Party other than the Real Property Inventory initially purchased by the applicable Loan Party and improvements constructed thereon and/or an Equity Pledge. Notwithstanding anything to the contrary herein, (A) a loan that satisfies the foregoing requirements set forth in this definition shall be a “Seller Purchase Money Loan” regardless of whether such loan otherwise constitutes Non-Recourse Indebtedness and (B) the obligations under such loan may be guaranteed by a Non-Recourse Indemnity Guaranty or Non-Recourse Payment Guaranty.

Senior Unsecured Notes ” means the 7.75% senior notes due 2020 issued under the Indenture, dated as of April 13, 2012, among the U.S. Borrower, Canada Holdings and the trustee named therein from time to time, in an initial aggregate principal amount of $550,000,000 as of April 13, 2012, and in an additional aggregate principal amount of $125,000,000 as of August 21, 2012.

 

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Solvent ” means, with respect to any Person, that as of the date of determination both (a) (i) the then fair saleable value of the property of such Person, sold as a going concern, is (A) greater than the total amount of liabilities (including contingent liabilities but excluding amounts payable under intercompany promissory notes) of such Person and (B) not less than the amount that will be required to pay the probable liabilities on such Person’s then existing debts as they become absolute and matured considering all financing alternatives and potential asset sales reasonably available to such Person, (ii) such Person’s capital is not unreasonably small in relation to its business or any contemplated or undertaken transaction and (iii) such Person does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due; (b) such Person is “solvent” within the meaning given that term and similar terms under Applicable Laws relating to fraudulent transfers and conveyances; or (c) in the case of any Person existing under the laws of Canada or any of its Provinces or territories, such Person is not an “insolvent person” within the meaning of the Bankruptcy and Insolvency Act (Canada). For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

SPE ” means (i) an entity formed for the purposes of holding, acquiring, constructing, developing or improving assets whose acquisition, construction, development or improvement will be financed by Non-Recourse Indebtedness or equity Investments in such entity or (ii) an entity acquired by U.S. FinCo, a Co-Borrower or any of their respective Restricted Subsidiaries whose outstanding Indebtedness is all Non-Recourse Indebtedness.

Specified Subsidiary ” means, at any date of determination, (a) any Restricted Subsidiary whose total assets at the last day of the Test Period ending on the last day of the most recent fiscal period for which Section 6.1 Financials have been delivered were equal to or greater than 10% of the Consolidated Total Assets of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries at such date, (b) any Restricted Subsidiary whose gross revenues for such Test Period were equal to or greater than 10% of the consolidated gross revenues of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries for such period, in each case determined in accordance with GAAP, or (c) each other Restricted Subsidiary that, when such Restricted Subsidiary’s total assets and gross revenues are aggregated with each other Restricted Subsidiary that is not a Specified Subsidiary, would have (i) total assets at the last day of the Test Period ending on the last day of the most recent fiscal period for which Section 6.1 Financials have been delivered that are equal to or greater than 15% of the Consolidated Total Assets of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries at such date or (i) gross revenues for such Test Period that are equal to or greater than 15% of the consolidated gross revenues of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries for such period, in each case determined in accordance with GAAP.

Speculative Unit ” means any Completed Unit that is neither a Unit Under Contract nor a Model Unit.

Sponsors ” means JH Investments Inc., Oaktree Capital Management, L.P. and TPG Global, LLC and their respective Affiliates and all investment funds managed by any of the foregoing (excluding, for the avoidance of doubt, their respective portfolio companies or other operating companies affiliated with JH Investments, Inc., Oaktree Capital Management, L.P. or TPG Global LLC).

 

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Stated Amount ” means, with respect to any Letter of Credit, the maximum amount from time to time available to be drawn thereunder, determined without regard to whether any conditions to drawing could then be met.

Subordinated Debt ” means any Indebtedness of a Loan Party that is subordinated in right of payment to the Obligations pursuant to terms reasonably satisfactory to the Administrative Agent.

Subsidiary ” means, with respect to any Person, any corporation, limited liability company, partnership, association, joint venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof.

Subsidiary Guarantor ” means each wholly-owned Domestic Subsidiary of U.S. FinCo or the U.S. Borrower (other than an Unrestricted Subsidiary or an Excluded Subsidiary) on the Restatement Effective Date, and each wholly-owned Domestic Subsidiary of U.S. FinCo or the U.S. Borrower (other than an Unrestricted Subsidiary or an Excluded Subsidiary) that becomes a party to the Guaranty at any time after the Restatement Effective Date pursuant to Section 6.7.

Successor Borrower ” has the meaning assigned to that term in Section 7.6A(i).

Swap Obligation ” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges (including Canada Pension Plan and provincial pension plan contributions, employment insurance and workers’ compensation premiums) imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto and whether disputed or not.

Test Period ” means, for any determination under this Agreement, the four consecutive fiscal quarters of Holdings then last ended.

TMHC ” means Taylor Morrison Home Corporation, a Delaware corporation.

Total Indebtedness ” means at any time all Indebtedness of the Loan Parties on a consolidated basis.

Total Utilization of Commitments ” means, as at any date of determination, the sum of (a) the U.S. Revolving Exposure plus (b) the Canadian Revolving Exposure.

Transaction Costs ” means the fees, costs and expenses payable by Holdings and its Subsidiaries in connection with the Transactions, including amounts payable to the Administrative Agent and the Lenders.

 

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Transactions ” means (a) the execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party, (b) the Reorganization Transactions, (c) the IPO and (d) the payment of the Transaction Costs.

Treasury Regulations ” means the United States Treasury regulations promulgated under the Code, as amended from time to time and any successor regulations.

Type ” means, with respect to a Loan, its character as a Base Rate Loan, a Canadian Prime Rate Loan, a Eurodollar Rate Loan or a CDOR Rate Loan.

UCC ” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

Unfunded Current Liability ” of any Plan or Foreign Plan means the amount, if any, by which the present value of the accrued benefits under the plan as of the close of its most recent plan year, determined in accordance with FASB Accounting Standards Codification 715 as in effect on the Restatement Effective Date, based upon the actuarial assumptions that would be used by the plan’s actuary in a termination of the plan, exceeds the Fair Market Value of the assets allocable thereto.

Unit ” means Qualified Real Property Inventory that is, or is planned to be, comprised of a single-family residential housing unit or a multi-family residential housing unit.

Unit Under Contract ” means, as of any date, a Unit, whether or not construction has commenced, is completed or is in process, as to which the Loan Party owning such Unit has entered into a bona fide contract of sale (a) substantially in a form customarily employed by such Loan Party, (b) with a Person that is not a Subsidiary or Affiliate of such Loan Party and (c) under which no material defaults giving rise to a termination right by such Loan Party then exist.

Units Under Construction ” means Units where on-site construction has commenced as evidenced by the trenching of foundations for such Units, other than Units Under Contract.

Unpaid Drawings ” means, as of any date of determination, the sum of, without duplication, (a) the amount set forth in clause (b) of the definition of Canadian LC Exposure and (b) the amount set forth in clause (b) of the definition of U.S. LC Exposure.

Unrestricted Cash and Cash Equivalents ” means Cash and Cash Equivalents of the Loan Parties that are free and clear of all Liens (other than Liens described in clauses (a), (b), (c), (k), (w), (x) or (y) (to the extent such Lien does not solely consist of deposit of cash) of the definition of the term “Permitted Encumbrances” or in clause (i) or sub-clauses (a) or (b) of clause (xv) of Section 7.2A); provided , that solely for purposes of the proviso to the definition of “Consolidated Total Debt”, the term “Unrestricted Cash and Cash Equivalents” shall mean Unrestricted Cash and Cash Equivalents of the Loan Parties and the Restricted Subsidiaries.

Unrestricted Subsidiary ” means any Subsidiary of U.S. FinCo or a Co-Borrower that is designated as an Unrestricted Subsidiary by a Co-Borrower or U.S. FinCo, as applicable, pursuant to Section 6.13 subsequent to the Initial Effective Date.

Unused Revolving Commitment ” means, as of any date of determination, the amount by which the aggregate Commitments exceed the Total Utilization of Commitments.

 

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Up-Front Fees ” means the amount of any fees or discounts received by Lenders in connection with the making of loans or extensions of credit, expressed as a percentage of such loan or extension of credit.

U.S. Holdings has the meaning assigned to that term in the preamble to this Agreement.

USA PATRIOT Act ” means the USA PATRIOT Improvement and Reauthorization Act, Title III of Pub. L. 109-177 (signed into law March 9, 2006, as amended from time to time).

U.S. Borrower ” has the meaning assigned to that term in the preamble to this Agreement.

U.S. Dollar Equivalent ” means, on any date of determination, (a) with respect to any amount in U.S. Dollars, such amount and (b) with respect to any amount in Canadian Dollars, the equivalent in U.S. Dollars of such amount, determined by the Administrative Agent pursuant to Section 1.3 using the Exchange Rate then in effect.

U.S. Dollar Letter of Credit ” means any Letter of Credit denominated in U.S. Dollars.

U.S. Dollars ”, “ Dollars ”, “ dollars ” or “ $ ” refers to lawful money of the United States of America.

U.S. FinCo ” has the meaning assigned to that term in the preamble to this Agreement.

U.S. LC Disbursement ” means a payment made by an Issuing Bank pursuant to a U.S. Dollar Letter of Credit.

U.S. LC Exposure ” means, at any time, the sum of (a) the Stated Amount of all U.S. Dollar Letters of Credit that remains available for drawing at such time and (b) the aggregate amount of all U.S. LC Disbursements that have not yet been reimbursed at such time. The U.S. LC Exposure of any Lender at any time shall be its Pro Rata Share of the total U.S. LC Exposure at such time.

U.S. Loan ” means any Loan denominated in U.S. Dollars.

U.S. Person ” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.

U.S. Revolving Exposure ” means, with respect to the Lenders, at any time, the sum of (a) the aggregate principal amount of the Lenders’ U.S. Loans at such time and (b) the Lenders’ U.S. LC Exposure at such time. The U.S. Revolving Exposure of any Lender at any time shall be such Lender’s Pro Rata Share of the aggregate U.S. Revolving Exposure at such time.

Voting Stock ” means, with respect to any Person, shares of such Person’s Capital Stock having the right to vote for the election of directors of such Person under ordinary circumstances.

Weighted Average Life to Maturity ” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the then outstanding principal amount of such Indebtedness.

 

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Withholding Agent ” means the Co-Borrowers and the Administrative Agent.

Yield Differential ” has the meaning assigned to that term in Section 2.1A(iii).

 

1.2 Defined Terms; Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement.

A. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, amended and restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections, Exhibits and Schedules shall be construed to refer to Sections of, and Exhibits and Schedules to, this Agreement (unless expressly referring to another agreement) and (e) the words “asset” and “property” shall be construed to have the same meaning and effect.

B. Except as otherwise expressly provided in this Agreement, (a) all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP and (b) financial statements and other information required to be delivered by Holdings to the Lenders pursuant to clauses (i), (ii), (iv) and (vii) of Section 6.1 shall be prepared in accordance with GAAP (except, with respect to interim financial statements, for the absence of normal year-end audit adjustments and explanatory footnotes) as in effect at the time of such preparation. Calculations in connection with the definitions, covenants and other provisions of this Agreement shall utilize accounting principles and policies in conformity with those used to prepare the Historical Financial Statements; provided that, should such accounting principles and policies change and either Holdings or the Requisite Lenders shall so request, the Administrative Agent and Holdings shall negotiate in good faith to amend such provision to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Requisite Lenders); provided , further , that, until so amended, such provision shall continue to be interpreted in accordance with GAAP prior to such change therein regardless of whether any such request is given before or after such change in GAAP or in the application thereof.

 

1.3 Exchange Rates.

On each Reset Date, the Administrative Agent shall (i) determine the relevant Exchange Rate as of such Reset Date and (ii) give notice thereof to the Lenders and the U.S. Borrower. The Exchange Rate so determined shall become effective on the relevant Reset Date, shall remain effective until the next succeeding Reset Date, and shall for all purposes of this Agreement (other than Sections 3.1B(iii), 3.1C, 3.2, 3.3B, 3.3C and 10.24 or any other provision hereof expressly requiring the use of an Exchange Rate as of a specified date) be the Exchange Rate employed in converting amounts between U.S. Dollars and Canadian Dollars.

 

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SECTION 2.

AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

 

2.1 Commitments; Loans.

A.     (i) Each Lender severally agrees, subject to the limitations set forth below with respect to the maximum amount of Loans permitted to be outstanding from time to time, to lend to the Borrowers from time to time in U.S. Dollars and/or Canadian Dollars during the period on and from the Initial Effective Date to but excluding the Commitment Termination Date an aggregate amount not exceeding its Pro Rata Share of the aggregate amount of the Commitments, to be used for the purposes identified in Section 2.5A. The aggregate amount of the Commitments as of the Restatement Effective Date is $400,000,000. Subject to Section 2.9, each Lender’s Commitment (other than Other Credit Extensions or any Commitments amended by Permitted Amendments pursuant to a Loan Modification Offer) shall expire on the Commitment Termination Date and all Loans (other than Other Credit Extensions or any Loans amended by Permitted Amendments pursuant to a Loan Modification Offer) and all other amounts owed hereunder with respect to the Loans and the Commitments (other than Other Credit Extensions or any Commitments or Loans amended by Permitted Amendments pursuant to a Loan Modification Offer) shall be paid in full not later than that date. Amounts borrowed under this Section 2.1A(i) may be repaid and reborrowed, subject to the limitations and conditions set forth herein, up to but excluding the Commitment Termination Date.

Notwithstanding anything contained herein to the contrary, in no event shall (i) the Total Utilization of Commitments at any time exceed the Availability Amount then in effect or (ii) the aggregate Canadian Revolving Exposure at any time exceed 105% of the Canadian Sublimit then in effect.

(ii) [Reserved].

(iii) Additional Commitments. The Co-Borrowers may from time to time after the Restatement Effective Date, by notice to the Administrative Agent, request that, on the terms and subject to the conditions contained in this Agreement, Qualified Additional Lenders provide up to the Additional Facilities Amount in the aggregate in additional Commitments; provided that (i) no Default or Event of Default shall have occurred and be continuing or would occur after giving effect to such additional Commitments, (ii) the loans under such additional Commitments shall rank pari passu with the Loans to be made pursuant to Section 2.1A(i), (iii) the representations and warranties in Section 5 shall be true and correct in all material respects prior to and after giving effect to such additional Commitments, (iv) the maturity date of any additional Commitments shall be no earlier than, and no scheduled mandatory commitment reduction shall be required prior to, the maturity date of the existing Commitments (or any Other Credit Extensions constituting Commitments), (v) the terms (other than with respect to pricing or maturity) of any additional Commitments and the Loans to be made thereunder, to the extent not consistent with the Commitments and the Loans extended under this Agreement pursuant to Section 2.1A(i), shall be reasonably satisfactory to the Administrative Agent and (vi) if the Initial Yield applicable to the additional Commitments extended pursuant to this Section 2.1A(iii) exceeds by more than 50 basis points the Revolving Loan Yield at such time (the amount by which the Initial Yield applicable to the additional Commitments incurred pursuant to this Section 2.1A(iii) exceeds

 

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the Revolving Loan Yield at such time being referred to herein as the “ Yield Differential ”), then the “LIBOR floor” and/or the Applicable Margin applicable to the Loans shall be increased such that after giving effect to such increases, the Yield Differential shall equal 50 basis points; provided that, to the extent any portion of the Yield Differential is attributable to a higher “LIBOR floor” being applicable to the additional Commitments, the “LIBOR floor” applicable to the Loans shall be increased (or, in the event there is no “LIBOR floor” applicable to the Loans at such time, a “LIBOR floor” shall be added) to an amount not to exceed the “LIBOR floor” applicable to the additional Commitments prior to any increase in the Applicable Margin applicable to the Loans. Nothing contained in this Section 2.1A(iii) or otherwise in this Agreement is intended to commit any Lender or the Administrative Agent to provide any portion of any such additional Commitments. If and to the extent that any Qualified Additional Lenders agree, in their sole discretion, to provide any such additional Commitments on the terms and conditions set forth herein, (a) at such time and in such manner as the Administrative Agent shall reasonably determine, the Qualified Additional Lenders who have in their sole discretion agreed to provide additional Commitments shall purchase and assume outstanding Loans and/or participations incurred in connection with Letters of Credit so as to cause the amount of such Loans and/or participations in connection with Letters of Credit held by each Lender to conform to the respective percentages of the applicable Commitments of the Lenders as so adjusted and (b) the Co-Borrowers shall execute and deliver any additional Notes as any Lender may reasonably request or other amendments or modifications to this Agreement or any other Loan Document as the Administrative Agent may reasonably request.

If any new Commitments incurred pursuant to this Section 2.1A(iii) are to have terms that are different from the Commitments outstanding immediately prior to such incurrence (any such new Commitments, “ Other Credit Extensions ”), all such terms shall be as set forth in a separate assumption agreement among Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Borrowers, the Qualified Additional Lenders providing such additional Revolving Commitments and the Administrative Agent, the execution and delivery of which agreement shall be a condition to the effectiveness of the Other Credit Extensions. If the Borrowers incur new Commitments under this Section 2.1A(iii), regardless of whether such Commitments are Other Credit Extensions, the Borrowers shall, after such time, (x) incur and repay Loans ratably as between the new Commitments and the Commitments outstanding immediately prior to such incurrence and (y) permanently reduce Commitments ratably as between the new Commitments and the Commitments outstanding immediately prior to such incurrence; provided that on the date of incurrence of the new Commitments, the Borrowers may permanently reduce the Commitments outstanding immediately prior to such time without ratably reducing the new Commitments. Notwithstanding anything to the contrary in Section 10.5, the Administrative Agent is expressly permitted, without the consent of any Lender, to amend the Loan Documents to the extent necessary to give effect to any increases pursuant to this Section 2.1A(iii) and mechanical and conforming changes necessary or advisable in connection therewith (including amendments to (1) implement the requirements in the preceding two sentences, (2) ensure pro rata allocations of Eurodollar Rate Loans, Canadian Prime Rate Loans, CDOR Rate Loans and Base Rate Loans between Loans incurred pursuant to this Section 2.1A(iii) and Loans outstanding immediately prior to any such incurrence and (3) implement ratable participation in Letters of Credit between the Other Credit Extensions consisting of Commitments and the Commitments outstanding immediately prior to any such incurrence).

 

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B. Borrowing Mechanics. Loans (including any Loans made as Eurodollar Rate Loans or CDOR Rate Loans with a particular Interest Period) made on any Funding Date (other than Loans made pursuant to Section 3.3B for the purpose of reimbursing the applicable Issuing Bank for the amount of a drawing or payment under a Letter of Credit issued by it) shall be in an aggregate minimum amount of the Borrowing Minimum and integral multiples of the Borrowing Multiple in excess of that amount. The Borrowers shall deliver to the Administrative Agent a Notice of Borrowing not later than 1:00 p.m. (New York time) on the proposed Funding Date; provided , that, in the case of any Loan requested as a Fixed Rate Loan, the Borrowers shall deliver such Notice of Borrowing not later than 1:00 p.m. (New York time), at least three Business Days in advance of the proposed Funding Date. The Notice of Borrowing shall specify (i) the proposed Funding Date (which shall be a Business Day), (ii) whether such Loans are to be U.S. Loans or Canadian Loans, (iii) the amount and Type of Loans requested, (iv) in the case of any Loans requested to be made as Eurodollar Rate Loans or CDOR Rate Loans, the initial Interest Period requested, and (v) remittance instructions applicable for the Loans requested. Loans may be continued as or converted into Base Rate Loans, Eurodollar Rate Loans, CDOR Rate Loans or Canadian Prime Rate Loans in the manner provided in Section 2.2D.

In lieu of delivering the above-described Notices of Borrowing, the Borrowers may give the Administrative Agent telephonic notice by the required time of any proposed borrowing under this Section 2.1B; provided that such notice shall be promptly confirmed in writing by delivery of a Notice of Borrowing to the Administrative Agent on or before the applicable Funding Date. Neither the Administrative Agent nor any Lender shall incur any liability to any Borrower in acting upon any telephonic notice referred to above that the Administrative Agent believes in good faith to have been given by a duly authorized officer or other person authorized to borrow on behalf of the Borrowers or for otherwise acting in good faith under this Section 2.1B, and upon funding of Loans by the Lenders in accordance with this Agreement pursuant to any such telephonic notice, the Borrowers shall have effected Loans hereunder.

The Administrative Agent shall be entitled to rely upon, and shall be fully protected in relying upon, any Notice of Borrowing, Notice of Conversion/Continuation or similar notice believed by the Administrative Agent to be genuine. The Administrative Agent may assume that each Person executing and delivering such a notice was duly authorized, unless the responsible individual acting thereon for the Administrative Agent has actual knowledge to the contrary.

The Borrowers shall notify the Administrative Agent prior to the funding of any Loans in the event that any of the matters to which the Borrowers are required to certify in the applicable Notice of Borrowing are no longer true and correct as of the applicable Funding Date, and the acceptance by the Borrowers of the proceeds of any Loans shall constitute a re-certification by the Borrowers, as of the applicable Funding Date, as to the matters to which the Borrowers are required to certify in the applicable Notice of Borrowing.

Except as otherwise provided in Sections 2.6B, 2.6C, 2.6D and 2.6G, a Notice of Borrowing for any Loan (or telephonic notice in lieu thereof) shall be irrevocable and the Borrowers shall be bound to make a borrowing in accordance therewith.

C. Disbursement of Funds. All Loans and all participations purchased under this Agreement shall be made by the Lenders simultaneously and proportionately to their respective Pro Rata Shares, it being understood that no Lender shall be responsible for any default by any other Lender in that other Lender’s obligation to make a Loan requested hereunder nor shall the Commitment of any Lender to make the particular type of Loan requested be increased or decreased as a result of a default by any other Lender in that other Lender’s obligation to make a Loan requested hereunder.

 

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Promptly after receipt by the Administrative Agent of a Notice of Borrowing with respect to a Loan pursuant to Section 2.1B (or telephonic notice in lieu thereof), the Administrative Agent shall notify each Lender of the proposed borrowing and of the amount of such Lender’s Pro Rata Share of the applicable Loans. Each Lender shall make the amount of its Loan available to the Administrative Agent in the applicable currency not later than 1:00 p.m. (New York time) on the applicable Funding Date in same-day funds at the Funding and Payment Office. Upon satisfaction or waiver of the conditions precedent specified in Section 4.2, the Administrative Agent shall make the proceeds of such Loans in the applicable currency available to the Borrowers on the applicable Funding Date by causing an amount of same-day funds equal to the proceeds of all such Loans received by the Administrative Agent from the Lenders, to be credited to the account of the Borrowers at the Funding and Payment Office.

Unless the Administrative Agent shall have received notice from a Lender prior to the Funding Date for any Loans that such Lender will not make available to the Administrative Agent the amount of such Lender’s Loan requested on such Funding Date, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.1A and may, in reliance upon such assumption and in the Administrative Agent’s sole discretion, make available to the Borrowers a corresponding amount on such Funding Date. In such event, if a Lender has not in fact made its share of the applicable Loan available to the Administrative Agent on the Funding Date, then the applicable Lender and the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrowers to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, for the first three (3) days, at a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and, thereafter, the greater of (x) in the case of U.S. Loans, the Base Rate, and in the case of Canadian Loans, the Canadian Prime Rate, and (y) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (ii) in the case of a payment to be made by a Borrower, the interest rate applicable to Base Rate Loans or Canadian Prime Rate Loans, as the case may be, of the applicable Class. If a Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrowers the amount of such interest paid by the Borrowers for such period. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such borrowing. Nothing in this paragraph shall relieve any Lender of its obligation to fulfill its commitments hereunder and Borrowers shall be without prejudice to any claim any Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

Subject to Section 3.3B, unless the Administrative Agent shall have received notice from the Borrowers prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders and the applicable Issuing Bank hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or such Issuing Bank, as the case may be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders or such Issuing Bank, as the case may be,

 

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severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such Issuing Bank, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, for the first three days, at a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and, thereafter, at the greater of (i) in the case of U.S. Loans, the Base Rate, and in the case of Canadian Loans, the Canadian Prime Rate, and (ii) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

D. Notes. Each of the Co-Borrowers shall execute and deliver on the Restatement Effective Date to each Lender requesting the same (or to the Administrative Agent for such Lender) a Note substantially in the form of Exhibit IV annexed hereto to evidence that Lender’s Loans, in the principal amount of that Lender’s Commitment. Any Lender not receiving a Note may request at any time that the Borrowers issue it such Note on the terms set forth herein, and each of the Borrowers agree to issue such Note promptly upon the request of a Lender. The Notes and the Obligations evidenced thereby shall be governed by, subject to and benefit from all of the terms and conditions of this Agreement and the other Loan Documents.

 

2.2 Interest on the Loans.

A. Rate of Interest. Subject to the provisions of Sections 2.2E, 2.6 and 2.7, each Loan shall bear interest on the unpaid principal amount thereof from the date made to maturity (whether by acceleration or otherwise) at a rate determined by reference to the Base Rate, the Canadian Prime Rate, the CDOR Rate or the Reserve Adjusted Eurodollar Rate, as the case may be. The applicable basis for determining the rate of interest with respect to any Loan shall be selected by the Borrowers initially at the time a Notice of Borrowing is given with respect to such Loan pursuant to Section 2.1B. The basis for determining the interest rate with respect to any Loan may be changed from time to time pursuant to Section 2.2D. If on any day any Loan is outstanding with respect to which notice has not been delivered to the Administrative Agent in accordance with the terms of this Agreement specifying the applicable basis for determining the rate of interest, then for that day that Loan shall bear interest determined by reference to the Base Rate in the case of U.S. Loans and by reference to the Canadian Prime Rate in the case of Canadian Loans. Subject to the provisions of Sections 2.2E, 2.6 and 2.7, the Loans shall bear interest through maturity as follows:

(a) if a Base Rate Loan, then at the sum of the Base Rate plus the Applicable Margin;

(b) if a Canadian Prime Rate Loan, then at the sum of the Canadian Prime Rate plus the Applicable Margin;

(c) if a Eurodollar Rate Loan, then at the sum of the Reserve Adjusted Eurodollar Rate for the relevant Interest Period plus the Applicable Margin; or

(d) if a CDOR Rate Loan, then at the sum of the CDOR Rate plus the Applicable Margin.

B. Interest Periods. In connection with each Fixed Rate Loan, the Borrowers may, pursuant to the applicable Notice of Borrowing or Notice of Conversion/Continuation, as the case may be, select an interest period (each an “ Interest Period ”) to be applicable to such Loan, which

 

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Interest Period shall (except as provided in Section 2.1B) be, at the Borrowers’ option, (i) in the case of U.S. Loans, one-, two-, three- or six-month, or, if agreed to by all of the Lenders, nine- or twelve-month or shorter than one-month, period and (ii) in the case of Canadian Loans, 30 days, 60 days, 90 days or 180 days; provided that:

(i) in the case of Eurodollar Rate Loans,

(A) the initial Interest Period for any Eurodollar Rate Loan shall commence on the Funding Date in respect of such Loan, in the case of a Loan initially made as a Eurodollar Rate Loan, or on the date specified in the applicable Notice of Conversion/Continuation, in the case of a Loan converted to a Eurodollar Rate Loan;

(B) in the case of immediately successive Interest Periods applicable to a Eurodollar Rate Loan continued as such pursuant to a Notice of Conversion/Continuation, each successive Interest Period shall commence on the day on which the next preceding Interest Period expires;

(C) if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided that, if any Interest Period would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day;

(D) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (i)(E) of this Section 2.2B, end on the last Business Day of a calendar month;

(E) no Interest Period with respect to any portion of the Loans of any Class shall extend beyond the Commitment Termination Date or other final maturity date (in the case of Other Credit Extensions), as applicable, of such Class;

(F) there shall be no more than twelve Interest Periods in respect of Eurodollar Rate Loans outstanding at any time; and

(G) in the event the Borrower fails to specify an Interest Period for any Eurodollar Rate Loan in the applicable Notice of Borrowing or Conversion/Continuation, such Borrower shall be deemed to have selected an Interest Period of one month; and

(ii) in the case of CDOR Rate Loans:

(A) the initial Interest Period for any CDOR Rate Loan shall commence on the Funding Date in respect of such Loan, in the case of a Loan initially made as a CDOR Rate Loan, or on the date specified in the applicable Notice of Conversion/Continuation, in the case of a Loan converted to a CDOR Rate Loan;

(B) in the case of immediately successive Interest Periods applicable to a CDOR Rate Loan continued as such pursuant to a Notice of Conversion/Continuation, each successive Interest Period shall commence on the day on which the next preceding Interest Period expires;

 

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(C) if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall be extended or reduced as may be reasonably determined by the Administrative Agent to ensure that each Interest Period shall expire on a Business Day;

(D) no Interest Period with respect to any portion of the Loans of any Class shall extend beyond the Commitment Termination Date or other final maturity date (in the case of Other Credit Extensions), as applicable, of such Class;

(E) there shall be no more than five Interest Periods in respect of CDOR Rate Loans outstanding at any time; and

(F) in the event the Borrowers fail to specify an Interest Period for any CDOR Rate Loan in the applicable Notice of Borrowing or Conversion/Continuation, the Borrowers shall be deemed to have selected an Interest Period of 30 days.

C. Interest Payments. Subject to the provisions of Section 2.2E below, interest on each Loan shall be payable in arrears on each Interest Payment Date applicable to that Loan, upon any prepayment of that Loan (to the extent accrued on the amount being prepaid) and at maturity (including final maturity, by acceleration or otherwise); provided that in the event that any Daily Rate Loans are prepaid pursuant to Section 2.4A(i), interest accrued on such Loans through the date of such prepayment shall be payable on the next succeeding Interest Payment Date applicable to Base Rate Loans or Canadian Prime Rate Loans, as the case may be (or, if earlier, at final maturity).

D. Conversion or Continuation. Subject to the provisions of Section 2.6, the Borrowers shall have the option (i) to convert at any time all or any part of their outstanding Loans equal to the Borrowing Minimum and integral multiples of the Borrowing Multiple in excess of that amount from Daily Rate Loans to Fixed Rate Loans in the same currency (or vice versa) or (ii) upon the expiration of any Interest Period applicable to a Fixed Rate Loan, to continue all or any portion of such Loan equal to the Borrowing Minimum and integral multiples of the Borrowing Multiple in excess of that amount as a Fixed Rate Loan in the same currency for another permissible Interest Period.

The Borrowers shall deliver a Notice of Conversion/Continuation to the Administrative Agent not later than 1:00 p.m. (New York time) on the proposed conversion date (in the case of a conversion to a Daily Rate Loan), and at least three Business Days in advance of the proposed conversion/continuation date (in the case of a conversion to, or a continuation of, a Fixed Rate Loan). A Notice of Conversion/Continuation shall specify (i) the proposed conversion/continuation date (which shall be a Business Day), (ii) the amount, Type and Class of the Loan to be converted/continued, (iii) the nature of the proposed conversion/continuation, (iv) in the case of a conversion to, or a continuation of, a Fixed Rate Loan, the requested Interest Period and (v) in the case of a conversion to, or a continuation of, a Fixed Rate Loan, that no Event of Default has occurred and is continuing. In lieu of delivering the above-described Notice of Conversion/Continuation, the Borrowers may give the Administrative Agent telephonic notice by the required time of any proposed conversion/continuation under this Section 2.2D; provided that such notice shall be promptly confirmed in writing by delivery of a Notice of Conversion/Continuation to the Administrative Agent on or before the proposed conversion/continuation date. Each conversion

 

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or continuance shall be made ratably among the Lenders holding the Loans comprising the affected Borrowing. For purposes of this Section 2.2D, “ Borrowing ” means Loans of the same Class, Type and currency, made, converted or continued on the same date and, in the case of Fixed Rate Loans, as to which a single Interest Period is in effect. If the Borrowers shall not have given notice in accordance with this Section 2.2D to continue any Borrowing into a subsequent Interest Period (and shall not otherwise have given notice in accordance with this Section 2.2D to convert such Borrowing), such Borrowing shall, at the end of the Interest Period applicable thereto (unless repaid pursuant to the terms hereof), automatically be continued into a Base Rate Loan or Canadian Prime Rate Loan, as the case may be.

If the Borrowers fail to specify the Type of Loan the applicable Borrowing is to be converted into or continued as, then the applicable Borrowing shall be deemed to have been requested to be converted into or continued as a Base Rate Loan or a Canadian Prime Rate Loan, as the case may be.

Neither the Administrative Agent nor any Lender shall incur any liability to any Borrower in acting upon any telephonic notice referred to above that the Administrative Agent believes in good faith to have been given by a duly authorized officer or other person authorized to act on behalf of the Borrowers or for otherwise acting in good faith under this Section 2.2D, and upon conversion or continuation of the applicable basis for determining the interest rate with respect to any Loans in accordance with this Agreement pursuant to any such telephonic notice, the Borrowers shall have effected a conversion or continuation, as the case may be, hereunder.

Except as otherwise provided in Sections 2.6B, 2.6C and 2.6G, a Notice of Conversion/Continuation for conversion to, or continuation of, any Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable, and the Borrowers shall be bound to effect a conversion or continuation in accordance therewith.

E. Post-Default Interest. At any time that an Event of Default shall have occurred and be continuing, if all or a portion of the principal amount of any Loan or interest thereon or fees or other amounts due hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall thereafter bear interest (including post-petition interest in any proceeding under the Bankruptcy Code, or other applicable bankruptcy or insolvency laws) payable upon demand (a) in the case of principal, at the rate otherwise applicable to such Loan plus 2% per annum and (b) in all other cases, at a rate which is 2% per annum in excess of the interest rate otherwise payable under this Agreement for Loans bearing interest at a rate determined by reference to the Base Rate for Loans denominated in U.S. Dollars (computed on the basis of the actual number of days elapsed over a year of 360 days), in each case to the extent permitted by Applicable Laws. Payment or acceptance of the increased rates of interest provided for in this Section 2.2E is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of the Administrative Agent or any Lender.

F. Computation of Interest. Interest on Loans shall be computed on the basis of a 360-day year (a 365-or 366-day year, as applicable, in the case of Base Rate Loans based on the Prime Rate and Canadian Prime Rate Loans) and for the actual number of days elapsed in the period during which it accrues. In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest Period applicable to such Loan or, with respect to a Daily Rate Loan being converted from a Fixed Rate Loan, the date of conversion of such Fixed Rate Loan to such Daily Rate Loan, as the case may be, shall be included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan or, with respect to a Daily Rate Loan

 

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being converted to a Fixed Rate Loan, the date of conversion of such Daily Rate Loan to such Fixed Rate Loan, as the case may be, shall be excluded; provided that if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan. For the purposes of the Interest Act (Canada) disclosure thereunder, whenever any interest or any fee to be paid hereunder or in connection herewith is to be calculated on the basis of a 360-day or 365-day year, the yearly rate of interest to which the rate used in such calculation is equivalent is the rate so used multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360 or 365, as applicable. The rates of interest under this Agreement are nominal rates, and not effective rates or yields. The principle of deemed reinvestment of interest does not apply to any interest calculation under this Agreement.

 

2.3 Fees.

A. Facility Fees. The Borrowers agree, jointly and severally, to pay to the Administrative Agent, for distribution to each Lender in proportion to that Lender’s Pro Rata Share of the Commitments, facility fees (the “ Facility Fees ”) for the period from and including the Initial Effective Date to and excluding the Commitment Termination Date equal to (i) the actual daily amount of the aggregate Commitments (whether used or unused) multiplied by (ii) a rate per annum equal to the Facility Fee Rate at such time. Notwithstanding the foregoing, if any Revolving Loan Exposure remains outstanding following the Commitment Termination Date, the Facility Fees shall continue to accrue on such Revolving Loan Exposure for so long as such Revolving Loan Exposure remains outstanding and shall be payable on demand. In addition, the Facility Fees accrued with respect to the Commitment of a Defaulting Lender (except to the extent allocable to the Loans and LC Disbursements actually funded by such Defaulting Lender) during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by the Borrowers so long as such Lender shall be a Defaulting Lender except to the extent that the Facility Fees shall otherwise have been due and payable by the Borrowers prior to such time; provided , that no Facility Fees shall accrue on the Commitment of a Defaulting Lender (except to the extent allocable to the Loans and LC Disbursements actually funded by such Defaulting Lender) so long as such Lender shall be a Defaulting Lender. The Facility Fees shall be payable in arrears on the last Business Day in each of March, June, September and December of each year, commencing on September 30, 2011, and ending on the Commitment Termination Date (unless Revolving Loan Exposure shall be outstanding following the Commitment Termination Date, as provided above).

B. Annual Administrative Fee. Holdings agrees to pay to the Administrative Agent, for the account of it and its Affiliates, an annual administrative fee in such amounts as may have been or hereafter may be agreed between them from time to time.

C. Other Agent Fees. Holdings and each Borrower agree to pay such other fees to the Administrative Agent as may hereafter be agreed upon from time to time.

 

2.4 Repayments and Prepayments; General Provisions Regarding Payments.

A. Prepayments and Reductions in Commitments.

(i) Voluntary Prepayments. The Borrowers may, upon not less than (i) three Business Days’ prior written or telephonic notice, in the case of Fixed Rate Loans, or (ii) one Business Day’s prior written or telephonic notice, in the case of Daily Rate Loans, promptly confirmed in writing to the Administrative Agent (which notice the Administrative

 

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Agent will promptly transmit to each Lender), at any time and from time to time prepay, without premium or penalty, the Loans on any Business Day in whole or in part in an aggregate minimum amount of the Borrowing Minimum and integral multiples of the Borrowing Multiple in excess of that amount or in each case such lesser amount as is then outstanding; provided , however , that in the event the Borrowers shall prepay a Fixed Rate Loan other than on the expiration of the Interest Period applicable thereto, the Borrowers shall, at the time of such prepayment, also pay any amounts payable under Section 2.6D hereof. Notice of prepayment having been given as aforesaid, the Loans shall become due and payable on the prepayment date specified in such notice and in the aggregate principal amount specified therein.

(ii) Voluntary Reductions of Commitments. The Borrowers may, upon not less than three Business Days’ prior written or telephonic notice, promptly confirmed in writing to the Administrative Agent (which notice the Administrative Agent will promptly transmit to each Lender), at any time and from time to time terminate in whole or permanently reduce in part, without premium or penalty, the Commitments in an amount up to the Unused Revolving Commitment at the time of such proposed termination or reduction; provided that any such partial reduction of the Commitments shall be in an aggregate minimum amount of the Borrowing Minimum and integral multiples of the Borrowing Multiple in excess of that amount, or such lesser amount as is then outstanding. The Borrowers’ notice to the Administrative Agent shall designate the date (which shall be a Business Day) of such termination or reduction and the amount of any partial reduction, and such termination or reduction of the Commitments shall be effective on the date specified in such notice and shall reduce the Commitment of each Lender proportionately to its Pro Rata Share.

(iii) Mandatory Prepayments. The Loans shall be prepaid in the manner provided in Section 2.4B upon the occurrence of the following circumstances:

(a) Prepayments Due to Reductions or Restrictions of Commitments. The Borrowers shall prepay the Loans from time to time to the extent necessary so that the Total Utilization of Commitments shall not at any time exceed the Commitments then in effect. If at any time that there are no Loans outstanding (whether after giving effect to any prepayment thereof pursuant to this subclause (a) or otherwise) the Total Utilization of Commitments exceeds the Commitments, the Borrowers shall deposit as cash collateral with the Administrative Agent such amounts as are necessary so that, after giving effect thereto, the amount on deposit in the form of cash collateral with the Administrative Agent pursuant to this subclause (a) is at least equal to such excess. If, on the tenth Business Day prior to the Commitment Termination Date, the conditions precedent to borrowing set forth in Section 4.2B would not be satisfied, then the Borrowers shall, on such date, cash collateralize such amount of Letter of Credit Usage that is attributable to the Commitments. Any failure to make such deposit within two Business Days after notice by the Administrative Agent shall constitute an Event of Default.

(b) Prepayments Due to Borrowing Base Availability. If a Borrowing Base Trigger Event has occurred and is continuing and the Total Utilization of Commitments exceeds the Borrowing Base Availability then in effect, the Borrowers shall, within five Business Days of such occurrence, (x) prepay the Loans from time to time to the extent necessary so that the Total Utilization of

 

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Commitments shall not exceed the Borrowing Base Availability then in effect or (y) deliver to the Administrative Agent an updated Borrowing Base Certificate reflecting changes in the Borrowing Base and/or the Borrowing Base Availability such that, immediately after giving effect to such updated Borrowing Base Certificate, the Total Utilization of Commitments shall not exceed the Borrowing Base Availability. If a Borrowing Base Trigger Event has occurred and is continuing and there are no Loans outstanding (whether after giving effect to any prepayment thereof pursuant to this subclause (b) or otherwise) and the Total Utilization of Commitments exceeds the Borrowing Base Availability then in effect, the Borrowers shall, within five Business Days of such occurrence, (x) deposit as cash collateral with the Administrative Agent such amounts as are necessary so that, after giving effect thereto, the amount on deposit in the form of cash collateral with the Administrative Agent pursuant to this subclause (b) is at least equal to such excess or (y) deliver to the Administrative Agent an updated Borrowing Base Certificate reflecting changes in the Borrowing Base and/or the Borrowing Base Availability such that, immediately after giving effect to such updated Borrowing Base Certificate, the Total Utilization of Commitments shall not exceed the Borrowing Base Availability.

(c) Other Prepayments. If for any reason the Canadian Revolving Exposure exceeds 105% of the Canadian Sublimit, the Borrowers shall promptly prepay Canadian Loans to the extent necessary so that the Canadian Revolving Exposure shall not exceed the Canadian Sublimit then in effect. If at any time that there are no Canadian Loans (whether after giving effect to any prepayment thereof pursuant to this subclause (c) or otherwise), the Canadian Revolving Exposure exceeds 105% of the Canadian Sublimit, the Borrowers shall deposit as cash collateral for Canadian Letters of Credit with the Administrative Agent such amounts as are necessary so that, after giving effect thereto, the amount on deposit in the form of cash collateral with the Administrative Agent pursuant to this subclause (c) is at least equal to the amount by which the Canadian Revolving Exposure exceeds the Canadian Sublimit then in effect.

(iv) Application of Prepayments. Application of Prepayments by Type of Loans. Any voluntary prepayments pursuant to Section 2.4A shall be subject to the requirements of Section 2.6C; provided that, in connection with any voluntary prepayments by a Borrower pursuant to Section 2.4A and considering each Class of Loans being prepaid separately, any voluntary prepayment thereof shall be applied first to Daily Rate Loans to the full extent thereof before application to Fixed Rate Loans, in each case in a manner that minimizes the amount of any payments required to be made by the Borrowers pursuant to Section 2.6C.

B. Application of Payments Under the Guaranty and Certain Other Amounts.

(i) [Reserved] .

 

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(ii) Application of Payments Under the Guaranty . All payments received by the Administrative Agent under the Guaranty shall be applied promptly from time to time by the Administrative Agent in the following order of priority:

(a) to the payment of the reasonable costs and expenses of any collection or other realization under such Guaranty, including reasonable compensation to the Administrative Agent and its agents and counsel, and all expenses, liabilities and advances made or incurred by the Administrative Agent in connection therewith, all in accordance with the terms of this Agreement and such Guaranty;

(b) thereafter, to the extent of any excess such payments, to the payment of all other Obligations for the ratable benefit of the holders thereof;

(c) thereafter, to the extent of any excess such payments, to the payment to the applicable Guarantor or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

C. General Provisions Regarding Payments.

(i) Manner, Time and Currency of Payment. All payments by the Borrowers of principal, interest, fees and other Obligations hereunder and under the Notes shall be made in same day funds and without defense, setoff or counterclaim, free of any restriction or condition, and delivered to the Administrative Agent not later than 1:00 p.m. (New York time) on the date due at the Funding and Payment Office for the account of the Lenders; funds received by the Administrative Agent after that time on such due date shall, at the Administrative Agent’s sole discretion, be deemed to have been paid by the Borrowers on the next succeeding Business Day. For purposes of computing interest or fees, any payments under this Agreement that are made later than 2:00 p.m. (New York time) shall be deemed to have been made on the next succeeding Business Day, in the Administrative Agent’s sole discretion. The Borrowers hereby authorize the Administrative Agent to charge their accounts with the Administrative Agent in order to cause timely payment to be made to the Administrative Agent of all principal, interest, fees and expenses due hereunder (subject to sufficient funds being available in their accounts for that purpose). Each payment to be made by the Borrowers hereunder (other than in respect of Canadian Loans and Canadian LC Disbursements, which each shall be made in Canadian Dollars) shall be made in U.S. Dollars.

(ii) Application of Payments to Principal, Interest and Prepayment Fees. Except as provided in Section 2.2C, all payments and prepayments in respect of the principal amount of any Loan shall include payment of accrued interest and prepayment fees, if any, on the principal amount being repaid or prepaid, and all such payments (and in any event any payments made in respect of any Loan on a date when interest is due and payable with respect to such Loan) shall be applied to the payment of interest and prepayment fees, if any, before application to principal.

(iii) Apportionment of Payments. The aggregate principal, prepayment fees and interest payments shall be apportioned among all outstanding Loans to which such payments relate, in each case proportionately to the Lenders’ respective Pro Rata Shares. The Administrative Agent shall promptly distribute to each applicable Lender, at its applicable Lender Office, its Pro Rata Share of all such payments received by the Administrative Agent and the Facility Fees of such Lender when received by the Administrative Agent pursuant to Section 2.3. Notwithstanding the foregoing provisions of this Section 2.4C(iii) if, pursuant to the provisions of Section 2.6C, any Notice of Conversion/Continuation is withdrawn as to any Affected Lender or if any Affected Lender makes Daily Rate Loans in lieu of its Pro Rata Share of any Fixed Rate Loans, the Administrative Agent shall give effect thereto in apportioning payments received thereafter.

 

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(iv) Payments on Business Days. Except if expressly provided otherwise, whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next preceding Business Day.

(v) Notation of Payment. Each Lender agrees that before disposing of any Note held by it, or any part thereof (other than by granting participations therein), that Lender will make a notation thereon of all Loans evidenced by that Note and all principal payments previously made thereon and of the date to which interest thereon has been paid; provided that the failure to make (or any error in the making of) a notation of any Loan made under such Note shall not limit or otherwise affect such disposition or the obligations of the Borrowers hereunder or under such Note with respect to any Loan or any payments of principal or interest on such Note.

 

2.5 Use of Proceeds.

A. Loans. The proceeds of any Loans shall be applied for working capital and general corporate purposes (including acquisitions and other Investments permitted or not otherwise prohibited under this Agreement) of the Co-Borrowers and their Subsidiaries.

B. Letters of Credit. Letters of Credit shall be used for general corporate purposes of the Co-Borrowers and their Subsidiaries, including backstopping or replacing letters of credit (or other comparable arrangements) of the Borrowers outstanding on the Initial Effective Date.

 

2.6 Special Provisions Governing Eurodollar Rate Loans.

Notwithstanding any other provision of this Agreement to the contrary, the following provisions shall govern with respect to Fixed Rate Loans as to the matters covered:

A. Determination of Applicable Interest Rate. As soon as practicable after 11:00 a.m. (New York time) on each Interest Rate Determination Date, the Administrative Agent shall determine (which determination shall, absent manifest error, be final, conclusive and binding upon all parties) the interest rate that shall apply to Fixed Rate Loans for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to the Borrowers and each Lender.

B. Inability to Determine Applicable Interest Rate. In the event that the Administrative Agent shall have reasonably determined (which determination shall be final and conclusive and binding upon all parties hereto), on any Interest Rate Determination Date with respect to any Fixed Rate Loans, that by reason of circumstances arising after the Restatement Effective Date affecting the London or Toronto interbank market, adequate and fair means do not exist for ascertaining the interest rate applicable to such Loans on the basis provided for in the definition of Reserve Adjusted Eurodollar Rate or CDOR Rate, as the case may be, such Administrative Agent shall on such date give notice (by telecopy or by telephone confirmed in writing) to the Borrowers and each Lender of such determination, whereupon (i) no Loans may be made or continued as, or converted to, Fixed Rate Loans in the applicable currency, until such time as the Administrative Agent notifies the Borrowers and the Lenders that the circumstances giving rise to such notice no longer exist (such

 

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notification not to be unreasonably withheld or delayed) and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by a Borrower with respect to the Loans in respect of which such determination was made shall be deemed to be rescinded by the Borrowers; provided , however , that, at the option of the Borrowers, any such Notice of Borrowing may be re-submitted to the Administrative Agent indicating that the Borrowers are electing a Daily Rate Loan, which Loan shall be funded not later than one Business Day after the date of such Daily Rate Loan Notice of Borrowing in accordance with Section 2.1B.

C. Illegality or Impracticability of Fixed Rate Loans. In the event that on any date any Lender shall have reasonably determined (which determination shall be final and conclusive and binding upon all parties hereto but shall be made only after consultation with the Borrowers and the Administrative Agent) that the making, maintaining or continuation of its Eurodollar Rate Loans and/or CDOR Rate Loans (i) has become unlawful as a result of compliance by such Lender in good faith with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty, governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful) or (ii) has become impracticable as a result of contingencies occurring after the Restatement Effective Date which materially and adversely affect the London interbank market and/or the Toronto interbank market, as the case may be, then, and in any such event, such Lender shall be an “ Affected Lender ” and it shall on that day give notice (by telecopy or by telephone confirmed in writing) to the Borrowers and the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each other Lender). Thereafter (a) the obligation of the Affected Lender to make Loans as, or to convert Loans to, Fixed Rate Loans in the applicable currency shall be suspended until such notice shall be withdrawn by the Affected Lender, (b) to the extent such determination by the Affected Lender relates to a Fixed Rate Loan then being requested pursuant to the Notice of Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make such Loan as (or convert such Loan to, as the case may be) a Daily Rate Loan in such currency, (c) the Affected Lender’s obligation to maintain its outstanding Fixed Rate Loans in the applicable currency (the “ Affected Loans ”) shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or when required by law, and (d) the Affected Loans shall automatically convert into Daily Rate Loans in the applicable currency on the date of such termination. Notwithstanding the foregoing, to the extent a determination by an Affected Lender as described above relates to a Fixed Rate Loan then being requested pursuant to a Notice of Conversion/Continuation, the Borrowers shall have the option, subject to the provisions of Section 2.6D, to rescind such Notice of Borrowing or Notice of Conversion/Continuation as to all Lenders by giving notice (by telecopy or by telephone confirmed in writing) to the Administrative Agent of such rescission on the date on which the Affected Lender gives notice of its determination as described above (which notice of rescission the Administrative Agent shall promptly transmit to each other Lender). Except as provided in the immediately preceding sentence, nothing in this Section 2.6C shall affect the obligation of any Lender other than an Affected Lender to make or maintain Loans as, or to convert Loans to, Fixed Rate Loans in accordance with the terms of this Agreement.

D. Compensation For Breakage or Non-Commencement of Interest Periods. The Borrowers shall compensate the Administrative Agent, upon written request by any Lender (which request shall set forth the basis for requesting such amounts), for all reasonable losses, expenses and liabilities (including any interest paid by such Lender to the lenders of funds borrowed by it to make or carry its Fixed Rate Loans and any actual loss, expense or liability sustained by such Lender in connection with the liquidation or re-employment of such funds, but excluding any loss of

 

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anticipated profits) which such Lender may sustain: (i) if for any reason (other than a default by such Lender) a borrowing of any Fixed Rate Loan does not occur on a date specified therefor in a Notice of Borrowing or a telephonic request for borrowing, or a conversion to or continuation of any Fixed Rate Loan does not occur on a date specified therefor in a Notice of Conversion/Continuation or a telephonic request for conversion or continuation, (ii) if any payment (including any prepayment pursuant to Section 2.4A(iv) or assignment pursuant to Section 2.8 or Section 10.5B) or conversion of any of its Fixed Rate Loans occurs on a date that is not the last day of an Interest Period applicable to that Loan, (iii) if any prepayment of any of its Fixed Rate Loans is not made on any date specified in a notice of prepayment given by the Borrowers, or (iv) as a consequence of any other default by the Borrowers in the repayment of their Fixed Rate Loans when required by the terms of this Agreement.

E. Booking of Loans. Any Lender may make, carry or transfer Loans at, to, or for the account of any of its branch offices or the office of an Affiliate of that Lender.

F. Assumptions Concerning Funding of Fixed Rate Loans. Calculation of all amounts payable to a Lender under this Section 2.6 and under Section 2.7A shall be made as though that Lender had actually funded each of its relevant Fixed Rate Loans through the purchase of a Eurodollar deposit or bankers acceptance, as the case may be, bearing interest at the rate obtained pursuant to the definition of Reserve Adjusted Eurodollar Rate or CDOR Rate, as applicable, in an amount equal to the amount of such Fixed Rate Loan and having a maturity comparable to the relevant Interest Period and, in the case of a Eurodollar Rate Loan, through the transfer of such Eurodollar deposit from an offshore office of that Lender to a domestic office of that Lender in the United States of America; provided , however , that each Lender may fund each of its Fixed Rate Loans in any manner it sees fit and the foregoing assumptions shall be utilized only for the purposes of calculating amounts payable under this Section 2.6 and under Section 2.7A.

G. Fixed Rate Loans After Default. After the occurrence of and during the continuation of a Default or Event of Default, (i) the Borrowers may not elect to have a Loan be made or maintained as, or converted to, a Fixed Rate Loan after the expiration of any Interest Period then in effect for that Loan and (ii) subject to the provisions of Section 2.6D, any Notice of Borrowing or Notice of Conversion/Continuation given by a Borrower with respect to a requested borrowing or conversion/continuation that has not yet occurred shall be deemed to be rescinded by such Borrower.

 

2.7 Increased Costs; Taxes.

A. Increased Costs Generally. If any Change in Law shall: (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any reserve requirement reflected in the Reserve Adjusted Eurodollar Rate) or any Issuing Bank; (ii) subject any Lender or any Issuing Bank to any Taxes (other than (A) Excluded Taxes, (B) Indemnified Taxes, (C) Other Taxes and (D) Other Connection Taxes on gross or net income, profits or receipts (including value-added or similar Taxes)) with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit, any Fixed Rate Loans made by it, or its deposits, reserves, other liabilities or capital attributable thereto; or (iii) impose on any Lender or any Issuing Bank or the London interbank market or the Toronto bankers acceptance market any other condition, cost or expense affecting this Agreement or Fixed Rate Loans hereunder made by such Lender or any Letter of Credit or participation therein; and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Fixed Rate Loan (or of maintaining its obligations

 

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to make any such Loan) or to increase the cost to such Lender or such Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or such Issuing Bank hereunder (whether of principal, interest or any other amount), then upon request of such Lender the Borrowers will pay to such Lender or such Issuing Bank such additional amount or amounts as will compensate such Lender or such Issuing Bank for such additional costs incurred or reduction suffered.

B. Capital Requirements. If any Lender or any Issuing Bank determines that any Change in Law affecting such Lender or such Issuing Bank or the applicable Lender Office of such Lender or the Letter of Credit Issuing Office or such Lender’s or such Issuing Bank’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or such Issuing Bank’s capital or on the capital of such Lender’s or such Issuing Bank’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such Lender, or the Letters of Credit issued by such Issuing Bank to a level below that which such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such Issuing Bank’s policies and the policies of such Lender’s or such Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrowers will pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company for any such reduction suffered.

C. Certificates for Reimbursement. A certificate of a Lender or an Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or such Issuing Bank or its holding company, as the case may be, as specified in Section 2.7A or 2.7B and delivered to the Borrowers shall be conclusive absent manifest error. The Borrowers shall pay such Lender or such Issuing Bank, as the case maybe, the amount shown as due on any such certificate within ten days after receipt thereof.

D. Delay in Requests. Failure or delay on the part of any Lender or any Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or such Issuing Bank’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender or an Issuing Bank pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or such Issuing Bank, as the case may be, notifies the Borrowers of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such Issuing Bank’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

E. Taxes.

(i) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrowers hereunder or any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes; provided that if any Withholding Agent shall be required by Applicable Laws to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable by the applicable Borrower shall be increased as necessary so that after making all required

 

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deductions (including deductions applicable to additional sums payable under this Section 2.7E) the Agent, Lender or Issuing Bank, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Withholding Agent (which shall be the Administrative Agent if the Borrower is a U.S. person) shall make such deductions and (iii) the Withholding Agent shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law.

(ii) Payment of Other Taxes by the Borrowers. Without limiting the provisions of paragraph (i) above, the Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Laws.

(iii) Indemnification by the Borrowers. The Loan Parties shall indemnify the Administrative Agent, each Lender and each Issuing Bank within 20 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.7E) paid by the Administrative Agent, Lender or Issuing Bank, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate stating the amount of such payment or liability and setting forth in reasonable detail the calculation thereof delivered to the Co-Borrowers by an Agent, a Lender or an Issuing Bank (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or an Issuing Bank shall be conclusive absent manifest error.

(iv) Indemnification by the Lenders and Issuing Banks. Each Lender and each Issuing Bank shall severally indemnify the Administrative Agent and the Borrowers for the full amount of any Excluded Taxes attributable to such Lender that are paid or payable by the Administrative Agent and the Borrowers in connection with any Loan Document and any reasonable expenses arising therefrom or with respect thereto, whether or not such Excluded Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The indemnity under this paragraph (iv) shall be paid within 20 days after the applicable Borrower or the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Excluded Taxes so payable by such Borrower or the Administrative Agent. Such certificate shall be conclusive of the amount so payable absent manifest error.

(v) Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by a Borrower to a Governmental Authority, the Borrowers shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(vi) Status of Lenders and Issuing Banks.

(a) The Administrative Agent, any Lender or any Issuing Bank, if requested by a Borrower or the Administrative Agent, shall deliver documentation prescribed by Applicable Laws or the published administrative practice of a relevant Governmental Authority when reasonably requested by such Borrower or the Administrative Agent as will enable such Borrower or the Administrative Agent to determine whether or not the Administrative Agent, such Lender or such Issuing Bank is subject to withholding, backup withholding or information reporting requirements.

 

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(b) Without limiting the generality of the foregoing, for so long as the applicable Borrower is a U.S. Person,

(i) each Lender and Issuing Bank that is a U.S. Person shall deliver to the applicable Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Lender or Issuing Bank becomes a Lender or Issuing Bank, as applicable, under this Agreement (and from time to time thereafter upon the request of the applicable Borrower or the Administrative Agent) a properly completed and duly executed Internal Revenue Service Form W-9;

(ii) each Foreign Lender shall deliver to the applicable Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the applicable Borrower or the Administrative Agent), whichever of the following is applicable: (i) duly completed copies of Internal Revenue Service Form W-8BEN, claiming eligibility for benefits of an income tax treaty to which the United States of America is a party, (ii) duly completed copies of Internal Revenue Service Form W-8ECI, (iii) duly completed copies of Internal Revenue Service Form W-8IMY, (iv) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the applicable Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue Service Form W-8BEN or (v) any other form prescribed by Applicable Laws as a basis for claiming exemption from or a reduction in United States Federal withholding Tax and reasonably requested by the applicable Borrower or the Administrative Agent duly completed together with such supplementary documentation as may be prescribed by Applicable Laws and reasonably requested by the applicable Borrower or the Administrative Agent to permit the applicable Borrower to determine the withholding or deduction required to be made. A Lender shall not be required to deliver any form or statement pursuant to this Section 2.7E(vi) that such Foreign Lender is not legally able to deliver;

(iii) if a payment made to a Lender or Issuing Bank under this Agreement would be subject to U.S. Federal withholding Tax imposed by FATCA, such Lender or Issuing Bank, as applicable, shall deliver to the applicable Borrower or the Administrative Agent, at the time or times prescribed by Applicable Law and at such time or times reasonably requested by the applicable Borrower or the Administrative Agent, such

 

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documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the applicable Borrower or the Administrative Agent as may be necessary for the applicable Borrower or the Administrative Agent to comply with its obligations under FATCA, to determine that such Lender or Issuing Bank, as applicable, has complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment; and

(iv) the Administrative Agent shall deliver to the applicable Borrower (in such number of copies as shall be requested by the applicable Borrower) on or prior to the date on which the Administrative Agent becomes the Administrative Agent under this Agreement (and from time to time thereafter (i) promptly upon the obsolescence, expiration or invalidity of any form previously delivered by the Administrative Agent and (ii) upon the request of the applicable Borrower) a properly completed and duly executed Internal Revenue Service Form W-9 or W-8IMY (or any other form prescribed by Applicable Laws as the basis for claiming complete exemption from United States federal withholding Tax and reasonably requested by the applicable Borrower) certifying the Administrative Agent’s entitlement as of such date to a complete exemption from United States federal withholding Tax with respect to payments to be made under this Agreement and the other Loan Documents.

(v) if the Administrative Agent is a U.S. branch described in Section 1.1441-1(b)(2)(iv)(A) of the Treasury Regulations and delivers to the applicable Borrower a properly completed and duly executed Internal Revenue Service Form W-8IMY pursuant to Section 2.7E(vi)(b)(iv) certifying that the Administrative Agent is a U.S. branch and intends to be treated as a U.S. person for purposes of withholding under Chapter 3 of the Code, then the applicable Borrower and the Administrative Agent shall treat the Administrative Agent as a U.S. person for purposes of withholding under Chapter 3 of the Code, pursuant to Section 1.1441-1(b)(2)(iv) of the Treasury Regulations.

(vii) Treatment of Certain Refunds. If any party determines, in its reasonable discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified pursuant to this Section 2.7E (including additional amounts paid pursuant to Section 2.7E(i)), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, under this Section 2.7E with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that such indemnifying party, upon the request of such indemnified party, agrees to repay to such indemnified party the amount paid over to such indemnified party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority. This paragraph shall not be construed to require any indemnified party to make available its tax returns (or any other information relating to its Taxes which it deems confidential) to the indemnifying party or any other Person.

 

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2.8 Mitigation Obligations; Replacement of Lenders.

A. Designation of a Different Lender Office. If any Lender or any Issuing Bank requests compensation under Section 2.7A or 2.7B, or requires the Borrowers to pay any additional amount to any Lender, any Issuing Bank or any Governmental Authority for the account of any Lender or any Issuing Bank pursuant to Section 2.7E, then such Lender or such Issuing Bank shall (at the request of the Borrowers) use reasonable efforts to designate a different Lender Office or Letter of Credit Issuing Office, as applicable, for making, issuing of or for funding or maintaining its Commitments, Loans or Letters of Credit hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender or such Issuing Bank, as the case may be, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.7, in the future, and (ii) would not subject such Lender or such Issuing Bank to any unreimbursed cost or expense and would not otherwise be materially disadvantageous to such Lender or such Issuing Bank. The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender or any Issuing Bank in connection with any such designation or assignment.

B. Replacement of Lenders. If any Lender requests compensation under Section 2.7A or 2.7B, or if a Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.7E, or if any Lender is a Defaulting Lender, or if any Lender has determined that it is unable to make, maintain or continue its Fixed Rate Loans in accordance with Section 2.6C hereof, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.1), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which Eligible Assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrowers shall have paid to the Administrative Agent the assignment fee specified in Section 10.1B(i)(e), (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 2.6D) from such Eligible Assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts), (iii) such Eligible Assignee is able to make, maintain or continue, as applicable, Fixed Rate Loans, (iv) in the case of any such assignment resulting from a claim for compensation under Section 2.7A or 2.7B or payments required to be made pursuant to Section 2.7E, such assignment will result in a reduction in such compensation or payments thereafter, and (v) such assignment does not conflict with Applicable Laws. A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

 

2.9 Loan Modification Offers.

A. The Borrowers may, by written notice to the Administrative Agent from time to time, make one or more offers (each, a “ Loan Modification Offer ”) to all the Lenders of one or more Classes (each Class subject to such a Loan Modification Offer, an “ Affected Revolving Credit Class ”) to make one or more Permitted Amendments pursuant to procedures reasonably specified by

 

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the Administrative Agent and reasonably acceptable to the Borrowers. Such notice shall set forth (i) the terms and conditions of the requested Permitted Amendment and (ii) the date on which such Permitted Amendment is requested to become effective (which shall not be less than 10 Business Days nor more than 30 Business Days after the date of such notice, unless otherwise agreed to by the Administrative Agent). Permitted Amendments shall become effective only with respect to the Loans and Commitments of the Lenders of the Affected Revolving Credit Class that accept the applicable Loan Modification Offer (such Lenders, the “ Accepting Lenders ”) and, in the case of any Accepting Lender, only with respect to such Lender’s Loans and Commitments of such Affected Revolving Credit Class as to which such Lender’s acceptance has been made.

B. A Permitted Amendment shall be effected pursuant to a Loan Modification Agreement executed and delivered by Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, each Borrower, each applicable Accepting Lender and the Administrative Agent; provided that no Permitted Amendment shall become effective unless Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and each Borrower shall have delivered to the Administrative Agent such customary legal opinions, board resolutions, secretary’s certificates, officer’s certificates and other similar documents as shall be reasonably be requested by the Administrative Agent in connection therewith. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Loan Modification Agreement. Each Loan Modification Agreement may, without the consent of any Lender other than the applicable Accepting Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to give effect to the provisions of this Section 2.9, including any amendments necessary to treat the applicable Loans and/or Commitments of the Accepting Lenders as a new Class of Loans and/or Commitments hereunder; provided that, except as otherwise agreed to by each Issuing Bank, (x) the allocation of the participation exposure with respect to any then-existing or subsequently issued or made Letter of Credit as between the commitments of such new Class and the remaining Commitments shall be made on a ratable basis as between the commitments of such new Class and the remaining Commitments and (y) no Letter of Credit may extend beyond the Commitment Termination Date (as in effect prior to any Permitted Amendment which effectuates an extension of the then-existing Commitment Termination Date) without the consent of the Issuing Bank that issued such Letter of Credit.

C. If a new Class of Loans and Commitment are created under this Section 2.9, the Borrowers shall, after such time, (x) incur and repay Loans ratably as between the new Commitments and the Commitments outstanding immediately prior to the effectiveness of such Loan Modification Offer and (y) permanently reduce Commitments ratably as between the new Commitments and the Commitments outstanding immediately prior to the effectiveness of such Loan Modification Offer; provided that on the date of effectiveness of any Loan Modification Offer, the Borrowers may permanently reduce the Commitments outstanding immediately prior to such time without ratably reducing the new Commitments. Notwithstanding anything to the contrary in Section 10.5, the Administrative Agent is expressly permitted, without the consent of any Lender, to amend the Loan Documents to the extent necessary to give effect to any Loan Modification Offer effected pursuant to this Section 2.9 and mechanical and conforming changes necessary or advisable in connection therewith (including amendments to (i) implement the requirements in the preceding two sentences, (ii) ensure pro rata allocations of Eurodollar Rate Loans, Canadian Prime Rate Loans, CDOR Rate Loans and Base Rate Loans between Loans incurred pursuant to this Section 2.9 and Loans outstanding immediately prior to any such Loan Modification Offer and (iii) implement ratable participation in Letters of Credit between the new Commitments and the Commitments outstanding immediately prior to the effectiveness of any such Loan Modification Offer).

 

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SECTION 3.

LETTERS OF CREDIT

 

3.1 Issuance of Letters of Credit and Lenders’ Purchase of Participations Therein.

A. Letters of Credit. In addition to requesting that the Lenders make Loans pursuant to Section 2.1A(i), the Borrowers may request, in accordance with the provisions of this Section 3.1, from time to time during the period after the Initial Effective Date to but excluding the date which is thirty (30) days before the Commitment Termination Date, that an Issuing Bank issue Letters of Credit for the account of the Borrowers or any Subsidiary Guarantor (provided that any Letter of Credit may be for the benefit of any Subsidiary of a Co-Borrower) for general corporate purposes. Subject to and upon the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Loan Parties herein set forth, such Issuing Bank agrees to issue such Letters of Credit in accordance with the provisions of this Section 3.1; provided that the Borrowers shall not request that such Issuing Bank issue (and such Issuing Bank shall not issue):

(i) any Letter of Credit if, after giving effect to such issuance, (a) the Total Utilization of Commitments would exceed the Availability Amount then in effect, (b) the aggregate Stated Amounts of all Letters of Credit then outstanding would exceed the Letter of Credit Commitments then in effect or (c) the aggregate Stated Amounts of all Letters of Credit issued by such Issuing Bank and then outstanding would exceed the Letter of Credit Commitment of such Issuing Bank (in the case of this clause (c), without the consent of such Issuing Bank);

(ii) any Canadian Letter of Credit if, after giving effect to such issuance, the aggregate Canadian Revolving Exposure would exceed the aggregate Canadian Sublimit then in effect by 5% or more;

(iii) any Letter of Credit having an expiration date later than the date which is 12 months from the date of issuance of such Letter of Credit; provided that this clause (iii) shall not prevent such Issuing Bank from agreeing that a Letter of Credit will automatically be extended for one or more successive periods absent a Default or Event of Default, not to exceed 12 months each unless such Issuing Bank elects not to extend for any such additional period; provided further , that unless the Requisite Lenders otherwise consent, such Issuing Bank shall give notice that it will not extend such Letter of Credit if it has knowledge that a Default or Event of Default has occurred and is continuing on the last day on which such Issuing Bank may give notice to the beneficiary that it will not extend such Letter of Credit;

(iv) any Letter of Credit during any period when a Lender Default exists, unless such Issuing Bank has entered into arrangements satisfactory to it and the Borrowers to eliminate such Issuing Bank’s risk with respect to the Defaulting Lender, including by cash collateralizing such Defaulting Lender’s Pro Rata Share of the Letter of Credit Usage (after giving effect to the issuance of the proposed Letter of Credit);

(v) any commercial Letter of Credit, unless such Issuing Bank has agreed in writing to issue commercial Letters of Credit pursuant to this Section 3.1;

 

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(vi) unless otherwise agreed by such Issuing Bank, any Letter of Credit that, together with all other Letters of Credit issued by such Issuing Bank hereunder, would exceed fifty (50) Letters of Credit in the aggregate.

If an outstanding Letter of Credit is stated to expire after the Commitment Termination Date, then at least 91 days prior to the Commitment Termination Date (or, if later, at the time of the issuance of such Letter of Credit by such Issuing Bank), the Borrowers shall deposit cash with such Issuing Bank or provide such Issuing Bank with a letter of credit acceptable to it that names such Issuing Bank as the beneficiary thereunder, in each case in an amount equal to at least 103% of the Stated Amount of such Letter of Credit, pursuant to arrangements reasonably acceptable to such Issuing Bank.

B. Mechanics of Issuance.

(i) Notice of Issuance. Whenever the Borrowers desire the issuance of a Letter of Credit, they shall deliver to the applicable Issuing Bank, at the applicable Letter of Credit Issuing Office, and the Administrative Agent, at the applicable Funding and Payment Office, a Notice of Issuance of Letter of Credit not later than 1:00 p.m. (New York time) at least five (5) Business Days, or such shorter period as may be agreed to by such Issuing Bank in any particular instance, in advance of the proposed date of issuance. The Notice of Issuance of Letter of Credit shall specify (a) the proposed date of issuance (which shall be a Business Day), (b) the face amount of or maximum aggregate liability under, as applicable, the Letter of Credit, (c) the expiration date of the Letter of Credit, (d) the name and address of the beneficiary, (e) the currency in which such Letter of Credit is to be denominated (which shall be U.S. Dollars or Canadian Dollars) and (f) the verbatim text of the proposed Letter of Credit or the proposed terms and conditions thereof, including a precise description of any documents and the verbatim text of any certificates to be presented by the beneficiary which, if presented by the beneficiary prior to the expiration date of the Letter of Credit, would require such Issuing Bank to make payment thereunder; provided that such Issuing Bank, in its reasonable discretion, may require changes in the text of the proposed Letter of Credit or any such documents or certificates; provided further that no Letter of Credit shall require payment against a conforming draft or other request for payment to be made thereunder on the same business day (under the laws of the jurisdiction in which the office of such Issuing Bank to which such draft or other request for payment is required to be presented is located) that such draft or other request for payment is presented if such presentation is made after 10:00 a.m. (in the time zone of such office of such Issuing Bank) on such Business Day. At the request of the Issuing Bank, the Borrowers shall also complete and submit such Issuing Bank’s standard letter of credit application form.

The Borrowers shall notify such Issuing Bank and the Administrative Agent prior to the issuance of any Letter of Credit in the event that any of the matters to which the Borrowers are required to certify in the applicable Notice of Issuance of Letter of Credit is no longer true and correct as of the proposed date of issuance of such Letter of Credit, and upon the issuance of any Letter of Credit, the Borrowers shall be deemed to have re-certified, as of the date of such issuance, as to the matters to which the Borrowers are required to certify in the applicable Notice of Issuance of Letter of Credit.

 

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(ii) Issuance of Letter of Credit. Upon satisfaction or waiver (in accordance with Section 10.5) of the conditions set forth in Section 4.3, and upon prior confirmation from the Administrative Agent that the issuance of the requested Letter of Credit would not result in the violation of Section 3.1A(i) or 3.1A(ii), such Issuing Bank shall issue the requested Letter of Credit in accordance with such Issuing Bank’s standard procedures, and upon its issuance of such Letter of Credit such Issuing Bank shall promptly notify the Administrative Agent of such issuance, which notice shall be accompanied by a copy of such Letter of Credit.

(iii) Reports to Lenders. (a) On the last Business Day of every calendar month, so long as any Letter of Credit shall have been outstanding during such month, such Issuing Bank shall deliver to the Administrative Agent a report setting forth for such month the daily maximum amount available to be drawn under the Letters of Credit that were outstanding during such calendar month (using, in the case of any Canadian Dollar Letters of Credit, the U.S. Dollar Equivalent thereof calculated as of such date); and (b) on or prior to the fifth Business Day of every calendar month, the Administrative Agent shall deliver to each Lender a report setting forth for the previous calendar month the daily maximum amount available to be drawn under the Letters of Credit that were outstanding during the previous calendar month (using, in the case of any Canadian Dollar Letters of Credit, the U.S. Dollar Equivalent thereof calculated as of such date).

C. Lenders’ Purchase of Participations in Letters of Credit. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the applicable Issuing Bank or the Lenders, the applicable Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the applicable Issuing Bank, such Lender’s Pro Rata Share of any drawings honored or payments made by the Issuing Bank in respect of such Letter of Credit (each, an “ LC Disbursement ”) and not reimbursed by the Borrowers on the date due as provided in Section 3.3B, or of any reimbursement payment required to be refunded to the Borrowers for any reason, in the same currency as such LC Disbursement. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or Event of Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

 

3.2 Letter of Credit Fees.

The Borrowers agree, jointly and severally, to pay the following amounts to the Administrative Agent with respect to Letters of Credit issued by an Issuing Bank for the account of the Borrowers:

(i) with respect to each Letter of Credit, (a) a fronting fee for the account of each Issuing Bank equal to 0.125% per annum of the daily Stated Amount under such Letter of Credit issued by such Issuing Bank (but in no event less than $500 or C$500, as the case may be, per annum for such Letter of Credit), (b) a Letter of Credit fee payable for the account of each Lender equal to the product of (x) the then Applicable Margin for Loans that are Eurodollar Rate Loans and (y) the average daily Stated Amount under such Letter of Credit, in each case, payable in arrears on and to the last Business Day in each of March, June,

 

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September and December of each year, commencing June 30, 2011, and on the Commitment Termination Date and computed on the basis of a 360-day year for the actual number of days elapsed; and

(ii) for the account of each Issuing Bank, with respect to the issuance, amendment or transfer of each Letter of Credit issued by such Issuing Bank and each drawing made thereunder (without duplication of the fees payable under clause (i) above), issuance documentary, administration and processing charges in accordance with such Issuing Bank’s standard schedule for such charges in effect at the time of such issuance, amendment, transfer or drawing, as the case may be.

Promptly upon receipt by the Administrative Agent of any amount described in clause (i)(a) or clause (ii) of this Section 3.2, the Administrative Agent shall distribute such amount to the applicable Issuing Banks. Promptly upon receipt by the Administrative Agent of any amount described in clause (i)(b) of this Section 3.2, the Administrative Agent shall distribute to each Lender its Pro Rata Share of such amount. The fees described in clause (i) of this Section 3.2 shall be paid in U.S. Dollars, if in respect of U.S. Dollar Letters of Credit, or Canadian Dollars, if in respect of Canadian Dollar Letters of Credit, unless otherwise agreed by the Co-Borrowers and the applicable Issuing Bank.

 

3.3 Drawings and Payments and Reimbursement of Amounts Drawn or Paid Under Letters of Credit.

A. Responsibility of Issuing Bank With Respect to Requests for Drawings and Payments. In determining whether to honor any drawing or request for payment under any Letter of Credit by the beneficiary thereof, the applicable Issuing Bank shall be responsible only to determine that the documents and certificates required to be delivered under such Letter of Credit have been delivered and that they comply on their face with the requirements of such Letter of Credit.

B. Reimbursement by the Borrowers of Amounts Drawn or Paid Under Letters of Credit. If any Issuing Bank shall make an LC Disbursement, the Borrowers shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 3:00 p.m., New York City time, on the date that such LC Disbursement is made, if the Borrowers shall have received notice of such LC Disbursement prior to 12:00 noon, New York City time, on such date, or, if such notice has not been received by the Borrowers prior to such time on such date, then not later than (i) 3:00 p.m., New York City time, on the Business Day that the Borrowers receive such notice, if such notice is received prior to 12:00 noon, New York City time, on the day of receipt, or (ii) 2:00 p.m., New York City time, on the Business Day immediately following the day on which the Borrowers receive such notice, if such notice is not received prior to 12:00 noon, New York City time, on the day of receipt; provided that the Borrowers may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.1A(i) or 2.1A(ii) that such payment be financed with a Loan that is a Daily Rate Loan in an equivalent amount to the LC Disbursement, and, to the extent so financed, the Borrowers’ obligation to make such payment shall be discharged and replaced by the resulting Loan.

 

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C. Payment by Lenders of Unpaid Drawings or Payments Under Letters of Credit.

(i) Payment by Lenders. In the event that the Borrowers shall fail for any reason to reimburse any Issuing Bank for an LC Disbursement as provided in Section 3.3B when due or provide cash collateral as required by the last paragraph of Section 3.1A, the Administrative Agent shall notify each Lender of the applicable LC Disbursement or of such failure, the payment then due from the Borrowers in respect thereof and such Lender’s Pro Rata Share thereof. Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Pro Rata Share of the payment then due from the Borrowers, in the same manner as provided in Section 2.1C with respect to Loans made by such Lender (and Section 2.1C shall apply, mutatis mutandis , to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the applicable Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrowers pursuant to this paragraph, the Administrative Agent shall distribute such payment to the applicable Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the applicable Issuing Bank as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of Daily Rate Loans as contemplated above) shall not constitute a Loan and shall not relieve the Borrowers of their obligation to reimburse such LC Disbursement. Any payment made by a Lender pursuant to this paragraph to fund required cash collateral shall constitute a Daily Rate Loan.

(ii) Distribution to Lenders of Reimbursements. In the event any Issuing Bank shall have been reimbursed by other Lenders pursuant to Section 3.3C(i) for all or any portion of any honored drawing or payment made by such Issuing Bank under a Letter of Credit issued by it, such Issuing Bank shall distribute to each other Lender which has paid all amounts payable by it under Section 3.3C(i) with respect to such honored drawing or payment such other Lender’s Pro Rata Share of all payments subsequently received by such Issuing Bank from the Borrowers in reimbursement of such Unpaid Drawings when such payments are received. Any such distribution shall be made to a Lender at its primary address identified to the Administrative Agent or at such other address as such Lender may request.

D. Interest on Unpaid Drawings Under Letters of Credit.

(i) Payment of Interest. The Borrowers agree, jointly and severally, to pay to each Issuing Bank, with respect to any Unpaid Drawings, interest on such amount of Unpaid Drawings from the date such drawing is honored or payment is made to but excluding the date such amount is reimbursed by the Borrowers (including any such reimbursement out of the proceeds of Loans pursuant to Section 3.3B) at a rate equal to (a) for the period from the date such drawing is honored or payment is made to and including the applicable reimbursement date (i) in the case of U.S. Dollar Letters of Credit, the Base Rate plus the Applicable Margin applicable to Loans that are Base Rate Loans and (ii) in the case of Canadian Dollar Letters of Credit, the Canadian Prime Rate plus the Applicable Margin applicable to Loans that are Canadian Prime Rate Loans, and (b) thereafter, a rate which is 2.00% per annum in excess of the rate of interest described in the foregoing clause (a). Interest payable pursuant to this Section 3.3D(i) shall be computed on the basis of a 360-day year for the actual number of days elapsed in the period during which it accrues and shall be payable on demand or, if no demand is made, on the date on which the related LC Disbursement is reimbursed in full.

 

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(ii) Distribution of Interest Payments by Issuing Bank. Promptly upon receipt by any Issuing Bank of any payment of interest pursuant to Section 3.3D(i), (a) such Issuing Bank shall distribute to each other Lender, out of the interest received by such Issuing Bank in respect of the period from the date of the applicable LC Disbursement to but excluding the date on which such Issuing Bank is reimbursed for the amount of such drawing or payment (including any such reimbursement out of the proceeds of Loans pursuant to Section 3.3B), the amount that such other Lender would have been entitled to receive in respect of the Letter of Credit fee that would have been payable in respect of such Letter of Credit for such period pursuant to Section 3.2 if an LC Disbursement had been made, and (b) in the event such Issuing Bank shall have been reimbursed by other Lenders pursuant to Section 3.3C(i) for all or any portion of such LC Disbursement, such Issuing Bank shall distribute to each other Lender which has paid all amounts payable by it under Section 3.3C(i) with respect to such LC Disbursement such other Lender’s Pro Rata Share of any interest received by such Issuing Bank in respect of that portion of such LC Disbursement so reimbursed by other Lenders for the period from the date on which such Issuing Bank was so reimbursed by other Lenders to and including the date on which such portion of such LC Disbursement is reimbursed by the Borrowers.

 

3.4 Obligations Absolute.

The obligation of the Borrowers to reimburse each Issuing Bank for an LC Disbursement in respect of a Letter of Credit issued by it (which reimbursement, for the avoidance of doubt, may be made from the proceeds of Loans pursuant to Section 3.3B) and to repay any Loans made by the Lenders pursuant to Section 3.3B and the obligations of the Lenders under Section 3.3C(i) shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following circumstances:

(i) any lack of validity or enforceability of any Letter of Credit;

(ii) the existence of any claim, set-off, defense or other right which any Borrower or any Lender may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons for whom any such transferee may be acting), any Issuing Bank or other Lender or any other Person or, in the case of a Lender, against any Borrower whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or one of their respective Subsidiaries and the beneficiary for which any Letter of Credit was procured);

(iii) any draft, demand, certificate or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(iv) payment by the applicable Issuing Bank under any Letter of Credit against presentation of a demand, draft or certificate or other document which appears to substantially comply with the terms of such Letter of Credit;

(v) any adverse change in the business, assets, operations, properties, condition (financial or otherwise) or prospects of Holdings or any of its Subsidiaries;

 

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(vi) any breach of this Agreement or any other Loan Document by any party thereto;

(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing; or

(viii) the fact that a Default or Event of Default shall have occurred and be continuing;

provided , in each case, that payment by the applicable Issuing Bank under the applicable Letter of Credit shall not have constituted gross negligence or willful misconduct of such Issuing Bank under the circumstances in question (as determined by a final judgment of a court of competent jurisdiction). In the event any Issuing Bank suffers any monetary loss as a result of a movement in Exchange Rates between the dates of any drawings, payments, reimbursements or other distributions contemplated by this Section 3, the Borrowers shall promptly reimburse the Issuing Bank for any such Exchange Rate related loss upon presentation by the Issuing Bank of a statement describing such loss in reasonable detail.

 

3.5 Nature of Issuing Bank’s Duties.

As between any Borrower and any Issuing Bank, each Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit issued by such Issuing Bank by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, such Issuing Bank shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any Person in connection with the application for and issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged, (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason, (iii) failure of the beneficiary of any such Letter of Credit to comply fully with any conditions required in order to draw upon such Letter of Credit, (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, facsimile or otherwise, whether or not they be in cipher, (v) errors in interpretation of technical terms, (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof, (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing or payment under such Letter of Credit or (viii) any consequences arising from causes beyond the control of such Issuing Bank, including any acts of any Governmental Authorities, and none of the above shall affect or impair, or prevent the vesting of, any of such Issuing Bank’s rights or powers hereunder.

In furtherance and extension and not in limitation of the specific provisions set forth in the first paragraph of this Section 3.5, any action taken or omitted by any Issuing Bank under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not put such Issuing Bank under any resulting liability to the Borrowers.

Notwithstanding anything to the contrary contained in this Section 3.5, the Borrowers shall retain any and all rights they may have against any Issuing Bank for any liability arising solely out of the gross negligence or willful misconduct of such Issuing Bank, as determined by a final judgment of a court of competent jurisdiction.

 

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3.6 Defaulting Lenders.

Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

A. Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 8 or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to any right of setoff shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Bank hereunder; third, to cash collateralize the Issuing Banks’ Fronting Exposure with respect to such Defaulting Lender; fourth, as the Co-Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Co-Borrowers, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) cash collateralize the Issuing Banks’ future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 3.6C; sixth, to the payment of any amounts owing to the Lenders or any Issuing Bank as a result of any judgment of a court of competent jurisdiction obtained by any Lender or any Issuing Bank against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to a Co-Borrower as a result of any judgment of a court of competent jurisdiction obtained by such Co-Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or LC Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued (as applicable) at a time when the conditions set forth in Sections 4.2 and 4.3 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and LC Disbursements owed to, all Lenders other than Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or LC Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in Letters of Credit are held by the Lenders pro rata in accordance with their Commitments without giving effect to Section 3.6B. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section 3.6A shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

B. Reallocation of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in Letter of Credit Usage shall be reallocated among the non-Defaulting Lenders in accordance with their respective Pro Rata Shares (calculated without regard to

 

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such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 4.2 are satisfied at the time of such reallocation (and, unless the Co-Borrowers shall have otherwise notified the Administrative Agent at such time (provided that the Co-Borrowers shall have received reasonable notice of such reallocation), the Co-Borrowers shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Loan Exposure of any non-Defaulting Lender to exceed such non-Defaulting Lender’s Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a non-Defaulting Lender as a result of such non-Defaulting Lender’s increased exposure following such reallocation.

C. Cash Collateral. If the reallocation described in Section 3.6B above cannot, or can only partially, be effected, the Co-Borrowers shall, without prejudice to any right or remedy available to them hereunder or under law, cash collateralize the Issuing Banks’ Fronting Exposure in accordance with the procedures set forth in Section 8.

D. Defaulting Lender Cure. If the Co-Borrowers, the Administrative Agent and each Issuing Bank agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any cash collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit to be held pro rata by the Lenders in accordance with the Commitments (without giving effect to Section 3.6B), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Co-Borrowers while that Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

3.7 Resignation of an Issuing Bank.

In the case of any Issuing Bank, at any time that neither such Issuing Bank nor any of its Affiliates has any Commitment, such Issuing Bank may notify the Administrative Agent that it will resign as an Issuing Bank hereunder and will not thereafter issue, extend or renew Letters of Credit hereunder; provided that such resignation shall not become effective until the acceptance of appointment as an Issuing Bank hereunder by a successor Lender (reasonably acceptable to the Co-Borrowers) of the Letter of Credit Commitment of such resigning Issuing Bank, evidenced by an agreement entered into by such successor, in a form satisfactory to the Co-Borrowers and the Administrative Agent, and, from and after the effective date of such agreement, (a) such successor Lender shall have all the rights and obligations of the previous Issuing Bank under this Agreement and the other Loan Documents and (b) references herein and in the other Loan Documents to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require; provided further that such resigning Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement and the other Loan Documents with respect to Letters of Credit issued by it prior to such time.

 

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SECTION 4.

CONDITIONS

 

4.1 [Reserved].

 

4.2 Conditions to All Loans.

The effectiveness of this Agreement and obligations of the Lenders to make Loans to any Borrower on each Funding Date are subject to the following further conditions precedent:

A. The Administrative Agent shall have received before that Funding Date, in accordance with the provisions of Section 2.1B, an executed Notice of Borrowing, in each case signed by a Responsible Officer on behalf of each Borrower in a writing delivered to the Administrative Agent.

B. As of that Funding Date, the representations and warranties contained herein and in the other Loan Documents shall be true and correct in all material respects (unless qualified as to materiality or Material Adverse Effect, in which case such representations and warranties shall be true and correct in all respects) on and as of that Funding Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects (unless qualified as to materiality or Material Adverse Effect, in which case such representations and warranties shall be true and correct in all respects) on and as of such earlier date.

C. As of that Funding Date and after giving effect to the borrowing of any Loans thereon, (i) the Total Utilization of Commitments would not exceed the Availability Amount then in effect and (ii) the aggregate Canadian Revolving Exposure would not exceed 105% of the Canadian Sublimit then in effect.

D. No event shall have occurred and be continuing or would result from the consummation of the borrowing contemplated by such Notice of Borrowing that would constitute a Default or Event of Default.

E. If the most recent Fiscal Quarter for which Section 6.1 Financials have been delivered was not a Measurement Quarter, then Holdings would have been in compliance with the Financial Performance Covenants as of the last day of such Fiscal Quarter as if it were a Measurement Quarter.

 

4.3 Conditions to Letters of Credit.

The issuance of any Letter of Credit hereunder (whether or not the applicable Issuing Bank is obligated to issue such Letter of Credit) is subject to the satisfaction of the following additional conditions precedent:

A. On or before the date of issuance of such Letter of Credit, the applicable Issuing Bank and the Administrative Agent shall have received, in accordance with the provisions of Section 3.1B(i), an executed Notice of Issuance of Letter of Credit, signed by a Responsible Officer on behalf of the Borrowers in a writing delivered to the Administrative Agent, together with all other information specified in Section 3.1B(i) and such other documents or information as the applicable Issuing Bank may reasonably require in connection with the issuance of such Letter of Credit.

 

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B. On the date of issuance of such Letter of Credit, all conditions precedent described in Sections 4.2B, 4.2C and 4.2D shall be satisfied or waived to the same extent as if the issuance of such Letter of Credit were the making of a Loan and the date of issuance of such Letter of Credit were a Funding Date.

C. If the most recent Fiscal Quarter for which Section 6.1 Financials have been delivered was not a Measurement Quarter, then Holdings would have been in compliance with the Financial Performance Covenants as of the last day of such Fiscal Quarter as if it were a Measurement Quarter.

SECTION 5.

REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to enter into this Agreement and to make the Loans, to induce the Issuing Banks to issue Letters of Credit and to induce the other Lenders to purchase participations therein, each of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers jointly and severally represents and warrants to the Administrative Agent, each Lender and each Issuing Bank, on the Restatement Effective Date, and on each Funding Date, and on the date of issuance of each Letter of Credit, that:

 

5.1 Corporate Status; Corporate Power and Authority; Enforceability; Subsidiaries.

A. Corporate Status. Each of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and each Subsidiary Guarantor (a) is a duly organized and validly existing corporation or other entity in good standing under the laws of the jurisdiction of its organization and has the corporate or other organizational power and authority to own its property and assets and to transact the business in which it is engaged and (b) has duly qualified and is authorized to do business and is in good standing in all jurisdictions where it is required to be so qualified, except where the failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect.

B. Corporate Power and Authority; Enforceability. Each Loan Party has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Loan Documents to which it is a party and has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of the Loan Documents to which it is a party. Each Loan Party has duly executed and delivered each Loan Document to which it is a party and each such Loan Document constitutes the legal, valid and binding obligation of such Loan Party enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law). Each Loan Party and each of the Specified Subsidiaries (a) is in compliance with all Applicable Laws and (b) has all requisite governmental licenses, authorizations, consents and approvals to operate its business as currently conducted except, in each case to the extent that failure to be in compliance therewith could not reasonably be expected to have a Material Adverse Effect.

C. Subsidiaries. On the Restatement Effective Date, Holdings does not have any Subsidiaries other than the Subsidiaries listed on Schedule 5.1C. Schedule 5.1C describes the direct and indirect ownership interest of Holdings in each Subsidiary as of the Restatement Effective Date.

 

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5.2 No Violation; Governmental Approvals.

A. No Violation. None of (a) the execution, delivery and performance by any Loan Party of the Loan Documents to which it is a party and compliance with the terms and provisions thereof, (b) the consummation of the Reorganization Transactions, (c) the consummation of the IPO or (d) the consummation of the transactions contemplated hereby or thereby on the relevant dates therefor, will (i) contravene any applicable provision of any material Applicable Law of any Governmental Authority, (ii) result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of any of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any of the Subsidiary Guarantors pursuant to, (x) the terms of any material indenture, loan agreement, lease agreement, mortgage or deed of trust or (y) any other material Contractual Obligation, in the case of either clause (x) and (y) to which Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any of the Subsidiary Guarantors is a party or by which they or any of their property or assets is bound or (iii) violate any provision of the Organizational Documents of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any of the Subsidiary Guarantors, except with respect to any conflict, breach of contravention or default (but not creation of Liens) referred to in clause (ii)(y), to the extent that such conflict, breach, contravention or default could not reasonably be expected to have a Material Adverse Effect.

B. Governmental Approvals . No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any Governmental Authority is required to authorize or is required in connection with (a) the execution, delivery and performance of any Loan Document or (b) the legality, validity, binding effect or enforceability of any Loan Document, except consents, approvals, exemptions, authorizations, actions, notices and filings that have been duly obtained, taken, given or made and are in full force and effect, unless, in the case of either clause (a) or clause (b), the failure to obtain or make any of the foregoing could not reasonably be expected to have a Material Adverse Effect.

C. [Reserved].

D. Margin Regulations. Neither the making of any Loan hereunder nor the use of the proceeds thereof will violate the provisions of Regulation U or X of the Board.

 

5.3 Financial Statements.

The Historical Financial Statements present fairly in all material respects the financial position and results of operations of Holdings and its consolidated Subsidiaries at the respective dates of such information and for the respective periods covered thereby, subject, in the case of the unaudited financial information, to changes resulting from audit, normal year end audit adjustments and the absence of footnotes. Such financial statements have been prepared in accordance with GAAP consistently applied except to the extent provided in the notes thereto.

 

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5.4 No Material Adverse Change.

Since the date of the most recently delivered Section 6.1 Financials, no event or change has occurred that has caused or could reasonably be expected to cause, either individually or in the aggregate, a Material Adverse Effect.

 

5.5 Title to Properties; Liens; Intellectual Property.

A. Title to Properties; Liens. As of the Restatement Effective Date, and as of each Funding Date thereafter, each of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Subsidiary Guarantors, have good and marketable title to, a valid leasehold interest in, or easements, licenses or other limited property interests in, all properties (other than Intellectual Property, which is dealt with solely in Section 5.5C) that are necessary for the operation of their respective businesses as currently conducted and as proposed to be conducted, free and clear of all Liens (other than Liens permitted or not otherwise prohibited by this Agreement) and except where the failure to have such good title could not reasonably be expected to have a Material Adverse Effect.

B. [Reserved].

C. Intellectual Property. Each of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and each of the Subsidiary Guarantors have good and marketable title to, or a valid license or right to use, all patents, trademarks, servicemarks, trade names, copyrights and all applications therefor, and all other intellectual property rights (collectively, “ Intellectual Property ”), free and clear of all Liens (other than Liens permitted or not otherwise prohibited by Section 7.2A), that are necessary for the operation of their respective businesses as currently conducted and as proposed to be conducted, except where the failure to have any such rights could not reasonably be expected to have a Material Adverse Effect.

 

5.6 Litigation; Compliance with Laws.

There are no actions, suits or proceedings (including Environmental Claims) pending or, to the knowledge of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings U.S. FinCo or the Co-Borrowers, threatened against Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers, any Subsidiary Guarantor or any Specified Subsidiary that could reasonably be expected to result in a Material Adverse Effect. None of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers, any of the Subsidiary Guarantors or any of the Specified Subsidiaries or any of their respective material properties or assets is in violation of, nor will the continued operation of their material properties and assets as currently conducted violate, any law, rule or regulation (including the USA PATRIOT Act and any zoning and building law, ordinance, code or approval, or permits, any Environmental Law), or is in default with respect to any judgment, writ, injunction, decree or order of any Governmental Authority, where such violation or default could reasonably be expected to result in a Material Adverse Effect.

 

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5.7 Payment of Taxes.

Holdings and each of its Subsidiaries have filed on a timely basis all federal Canadian and U.S. income Tax returns (as applicable) and all other material Tax returns, domestic and foreign, required to be filed by them and have paid all material Taxes and assessments payable by them that have become due, other than those not overdue by more than 30 days or being contested in good faith (and for which adequate reserves have been established). Each of Holdings and its Subsidiaries (as applicable) have paid, or have provided adequate reserves (in the good faith judgment of the management of Holdings) in accordance with GAAP for the payment of, all material federal Canadian and U.S., state, provincial and foreign income taxes applicable for all prior Fiscal Years and for the current Fiscal Year to the Restatement Effective Date.

 

5.8 Governmental Regulation.

None of the Loan Parties is required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

5.9 Compliance with ERISA and Similar Applicable Law.

A. Each Plan is in compliance with ERISA, the Code and any Applicable Law; no Reportable Event has occurred (or is reasonably likely to occur) with respect to any Plan; no Multiemployer Plan is insolvent or in reorganization (or is reasonably likely to be insolvent or in reorganization), and no written notice of any such insolvency or reorganization has been given to any of Holdings, the Co-Borrowers or any of their respective Subsidiaries or any ERISA Affiliate; no Plan is in “endangered” or “critical” status (within the meaning of Section 432 of the Code or Section 305 of ERISA); no Multiemployer Plan has received notice concerning the imposition of any withdrawal liability; no Plan has failed to satisfy the minimum funding standard (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived, or has an accumulated or waived funding deficiency (or is reasonably likely to have such a deficiency); no Plan has filed, pursuant to Section 412(c) of the Code or Section 302(c) of ERISA, an application for a waiver of the minimum funding standard with respect to any Plan; none of Holdings, the Co-Borrowers, any of their respective Subsidiaries or any ERISA Affiliate has incurred (or is reasonably likely expected to incur) any liability to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code or has been notified in writing that it will incur any liability under any of the foregoing Sections with respect to any Plan; no Plan is, or is expected to be, in “at risk” status (as defined in Section 430(i)(4) of the Code or Section 303(i)(4) of ERISA; no proceedings have been instituted (or are reasonably likely to be instituted) to terminate or to reorganize any Plan to appoint a trustee to administer any Plan, and no written notice of any such proceedings has been given to any of Holdings, the Co-Borrowers or any of their respective Subsidiaries or any ERISA Affiliate; and the conditions for imposition of a lien that could be imposed under the Code or ERISA on the assets of any of Holdings, the Co-Borrowers or any of their respective Subsidiaries or any ERISA Affiliate do not exist (or are not reasonably likely to exist) nor has Holdings, the Co-Borrowers or any of their respective Subsidiaries or any ERISA Affiliate been notified in writing that such a lien will be imposed on the assets of any of Holdings, any of its Subsidiaries or any ERISA Affiliate on account of any Plan, except to the extent that a breach of any of the representations, warranties or agreements in this Section 5.9 would not result, individually or in the aggregate, in an amount of liability that would be reasonably likely to have a Material Adverse Effect. No Plan has an Unfunded Current Liability that would, individually or when taken together with any other liabilities referenced in this Section 5.9, be reasonably likely to have a Material Adverse Effect. With respect to Multiemployer Plans, the representations and warranties in this Section 5.9, other than any made with respect to (a) liability under Section 4201 or 4204 of ERISA or (b) liability for termination or reorganization of such Plans under ERISA, are made to the best knowledge of Holdings or the Co-Borrowers.

 

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B. Each Foreign Plan is in compliance with Applicable Law and the respective requirements of the governing documents for such plan; with respect to each Foreign Plan, none of Holdings, the Co-Borrowers, any of their respective Subsidiaries, any ERISA Affiliate or any of their respective directors, officers, employees or agents has engaged in a transaction that could subject Holdings, the Co-Borrowers or any of their respective Subsidiaries or any ERISA Affiliate, directly or indirectly, to a tax or civil penalty; reserves have been established in the financial statements furnished to Lenders in respect of any unfunded liabilities in accordance with Applicable Law or, where required, in accordance with ordinary accounting practices in the jurisdiction in which such Foreign Plan is maintained; and no Foreign Benefit Event has occurred, except to the extent that a breach of any of the foregoing representations, warranties or agreements in this Section 5.9 would not result, individually or in the aggregate, in an amount of liability that would be reasonably likely to have a Material Adverse Effect. No Foreign Plan has an Unfunded Current Liability that would, individually or when taken together with any other liabilities referenced in this Section 5.9, be reasonably likely to have a Material Adverse Effect.

 

5.10 Environmental Matters.

A. Except as could not reasonably be expected to have a Material Adverse Effect, (i) Holdings and each of its Subsidiaries is in compliance with all Environmental Laws in all jurisdictions in which Holdings or such Subsidiary, as the case may be, is currently doing business (including having obtained all permits required under Environmental Laws) and (ii) none of Holdings or any of its Subsidiaries has become subject to any pending or, to the knowledge of Holdings or the Co-Borrowers, threatened Environmental Claim or any other Environmental Liability, or knows of any basis therefor or has received any notice thereof.

B. None of Holdings or any of its Subsidiaries has treated, stored, transported or Released Hazardous Materials at or from any currently or formerly owned Real Estate or facility relating to its business in a manner that could reasonably be expected to have a Material Adverse Effect.

 

5.11 Employee Matters.

There is no strike or work stoppage in existence or threatened involving Holdings, the Co-Borrowers, Canada Holdings, U.S. Holdings, Canada Intermediate Holdings, U.S. FinCo, any Subsidiary Guarantor or any Specified Subsidiary that could reasonably be expected to have a Material Adverse Effect.

 

5.12 Solvency.

On the Restatement Effective Date, the Loan Parties, on a consolidated basis, are Solvent.

 

5.13 [Reserved].

 

5.14 True and Complete Disclosure.

A. Factual Information and Data. None of the factual information and data (taken as a whole) heretofore or contemporaneously furnished by any Loan Party or any of its authorized representatives in writing to the Administrative Agent or any Lender on or before the Restatement Effective Date (including all information contained in the Loan Documents) for purposes of or in connection with this Agreement or any transaction contemplated herein contained any untrue

 

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statement of material fact or omitted to state any material fact necessary to make such information and data (taken as a whole) not materially misleading at such time (after giving effect to all supplements so furnished prior to such time) in light of the circumstances under which such information or data was furnished, it being understood and agreed that for purposes of this Section 5.14A, such factual information and data shall not include projections, pro forma financial information or information of a general economic or general industry nature.

B. Projections and Pro Forma Financial Information. The projections and pro forma financial information contained in the information and data referred to in paragraph A of this Section 5.14 were prepared in good faith based upon assumptions believed by Holdings and the Co-Borrowers to be reasonable at the time made, it being recognized by the Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results and such differences may be material.

 

5.15 Sanctioned Persons.

None of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any Co-Borrower or any of their respective Subsidiaries nor, to the Knowledge of Holdings or the Co-Borrowers, any director, officer, agent, employee or Affiliate of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any of their respective Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“ OFAC ”); and the Borrowers will not directly or indirectly use the proceeds of the Loans or the Letters of Credit or otherwise make available such proceeds to any person, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

5.16 Insurance. Schedule 5.16 sets forth a true, complete and correct description of all material insurance policies maintained by or on behalf of U.S. FinCo, the Co-Borrowers and the Subsidiary Guarantors as of the Restatement Effective Date. As of such date, such insurance is in full force and effect and all premiums have been duly paid. U.S. FinCo, the Co-Borrowers, Holdings, Canada Holdings, U.S. Holdings, Canada Intermediate Holdings and the Subsidiary Guarantors have insurance in such amounts and covering such risks and liabilities as are in accordance with normal industry practice.

SECTION 6.

AFFIRMATIVE COVENANTS

Each of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers covenants and agrees that, so long as any of the Commitments hereunder shall remain in effect and until payment in full of all of the Loans and other Obligations (other than contingent indemnification obligations, Guaranteed Hedge Obligations or Cash Management Obligations, in each case, not then due and payable) and the cancellation or expiration of all Letters of Credit (or the making of other arrangements with respect to such Letters of Credit reasonably satisfactory to the Administrative Agent and each relevant Issuing Bank), unless the Requisite Lenders shall otherwise give prior written consent, each of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers shall perform, and shall cause each of their respective Subsidiaries (to the extent applicable) to perform, all covenants in this Section 6.

 

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6.1 Financial Statements and Other Reports.

Holdings will furnish to the Administrative Agent for prompt further distribution to each Lender:

(i) Quarterly Financials. As soon as available and in any event on or before the date on which such financial statements are required to be filed with the SEC with respect to each of the first three quarterly accounting periods in each Fiscal Year of Holdings (or, if such financial statements are not required to be filed with the SEC, on or before the date that is 45 days after the end of each such quarterly accounting period), the consolidated balance sheet of Holdings and its consolidated Subsidiaries as at the end of such quarterly period and the related consolidated statement of operations for such quarterly accounting period and for the elapsed portion of the Fiscal Year ended with the last day of such quarterly period, and the related consolidated statement of cash flows for the elapsed portion of the Fiscal Year ended with the last day of such quarterly period, and setting forth comparative consolidated figures for the related periods in the prior Fiscal Year or, in the case of such consolidated balance sheet, for the last day of the prior Fiscal Year, subject to changes resulting from audit, normal year-end audit adjustments and the absence of footnotes. Notwithstanding the foregoing, the obligations in this clause (i) may be satisfied with respect to financial information of Holdings and its consolidated Subsidiaries by furnishing (A) the applicable financial statements of TMHC or (B) TMHC’s Form 10-K or 10-Q, as applicable, filed with the SEC; provided that, with respect to each of clauses (A) and (B), such information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to TMHC, on the one hand, and the information relating to Holdings and its consolidated Subsidiaries on a stand-alone basis, on the other hand.

(ii) Year-End Financials. As soon as available and in any event on or before the date on which such financial statements are required to be filed with the SEC (or, if such financial statements are not required to be filed with the SEC, on or before the date that is 90 days after the end of each such Fiscal Year), the consolidated balance sheet of Holdings and its consolidated Subsidiaries as at the end of such Fiscal Year, and the related consolidated statement of operations and cash flows for such Fiscal Year, setting forth comparative consolidated figures for the preceding Fiscal Year, and certified by independent registered public accountants of recognized national standing whose opinion shall not be qualified as to the scope of audit or as to the status of Holdings and its consolidated Subsidiaries as a going concern, together in any event with a certificate of the accounting firm providing the audit opinion required by this Section 6.1(ii) stating that in the course of its regular audit of the business of Holdings and its consolidated Subsidiaries, which audit was conducted in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge of any Event of Default relating to Section 7.5 that has occurred and is continuing or, if in the opinion of such accounting firm such an Event of Default has occurred and is continuing, a statement as to the nature thereof. Notwithstanding the foregoing, the obligations in this Section 6.1(ii) may be satisfied with respect to financial information of Holdings and its consolidated Subsidiaries by furnishing (A) the applicable financial statements of TMHC or (B) TMHC’s Form 10-K or 10-Q, as applicable, filed with the SEC; provided that, with respect to each of clauses (A) and (B), (x) such information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to TMHC, on the one hand, and the information relating to Holdings and its consolidated Subsidiaries on a stand-alone basis, on the other hand, and (y)

 

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to the extent such information is in lieu of information required to be provided under this Section 6.1(ii), such materials are accompanied by an opinion of an independent registered public accounting firm of recognized national standing, which opinion shall not be qualified as to the scope of audit or as to the status of the direct or indirect parent of Holdings, as applicable) and its consolidated Subsidiaries as a going concern.

(iii) Officer’s Certificates. At the time of the delivery of the Section 6.1 Financials, an Officer’s Certificate in the form annexed hereto as Exhibit VI to the effect that no Event of Default exists or, if any Event of Default does exist, specifying the nature and extent thereof, which certificate shall set forth (A) solely with respect to each Measurement Quarter, the calculations required to establish whether Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries were in compliance with the provisions of Section 7.5 as at the end of such Fiscal Year or period, as the case may be, (B) a specification of any change in the identity of the Restricted Subsidiaries and Unrestricted Subsidiaries as at the end of such Fiscal Year or period, as the case may be, from the Restricted Subsidiaries and Unrestricted Subsidiaries, respectively, provided to the Lenders on the Restatement Effective Date or the most recent Fiscal Year or period, as the case may be and (C) the Capitalization Ratio at the end of the Fiscal Year or period to which such Officer’s Certificate relates. If such Officer’s Certificate demonstrates an Event of Default resulting from a violation of Section 7.5, any of the Sponsors may deliver, together with such Officer’s Certificate, notice of their intent to cure (a “ Notice of Intent to Cure ”) such Event of Default pursuant to Section 8.12.

(iv) Borrowing Base Certificates . (a) If the Capitalization Ratio as of the last day of any Fiscal Year or period, as the case may be, exceeds 0.55 to 1.00, at the time of the delivery of the Section 6.1 Financials for such Fiscal Year or period, a Borrowing Base Certificate, which certificate shall set forth the calculation of the Borrowing Base and the Borrowing Base Availability as of the close of business on the last day of such Fiscal Year or period, (b) at the Co-Borrowers’ option, on any date, a Borrowing Base Certificate, which certificate shall set forth the calculation of the Borrowing Base and the Borrowing Base Availability as of the close of business on such date and (c) at the Co-Borrowers’ option, in connection with the consummation of any acquisition of a business or other assets permitted or not otherwise prohibited by Section 7.3, a Borrowing Base Certificate, which certificate shall set forth the calculation of the Borrowing Base and the Borrowing Base Availability on a Pro Forma Basis after giving effect to such acquisition, with adjustments to the Borrowing Base and the Borrowing Base Availability to reflect the acquisition of any Borrowing Base Assets and the incurrence or assumption of any Borrowing Base Debt in connection with such acquisition.

(v) Events of Default, Litigation. Promptly after a Responsible Officer of Holdings, the Co-Borrowers or any of the Subsidiary Guarantors obtains actual knowledge thereof, notice of (i) the occurrence of any event that constitutes a Default or an Event of Default, which notice shall specify the nature thereof, the period of existence thereof and what action Holdings or the Co-Borrowers propose to take with respect thereto and (ii) any litigation or governmental proceeding pending against Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any of the Subsidiary Guarantors that could reasonably be expected to result in a Material Adverse Effect.

 

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(vi) ERISA and Similar Applicable Law. Promptly after Holdings, the Co-Borrowers or any Subsidiary Guarantor knows or reasonably should have known of the occurrence of any of the following events that, individually or in the aggregate (including in the aggregate such events previously disclosed or exempt from disclosure hereunder, to the extent the liability therefor remains outstanding), would be reasonably likely to have a Material Adverse Effect, an Officer’s Certificate of Holdings or the Co-Borrowers setting forth details as to such occurrence and the action, if any, that Holdings, the Co-Borrowers, such Subsidiary Guarantor or any applicable ERISA Affiliate is required or proposes to take, together with any notices (required, proposed or otherwise) given to or filed with or by Holdings, the Co-Borrowers, such Subsidiary Guarantor, such ERISA Affiliate, the PBGC (or other applicable Governmental Authority (in the case of a Foreign Plan)), a Plan or Foreign Plan participant (other than notices relating to an individual participant’s benefits) or the Plan or Foreign Plan administrator with respect thereto:

(a) with respect to any Plan: that a Reportable Event has occurred; that a Plan has failed to satisfy the minimum funding standard (or has incurred an accumulated funding deficiency) or an application is to be made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code with respect to a Plan; that a Plan having an Unfunded Current Liability has been or is to be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA (including the giving of written notice thereof); that a Plan has an Unfunded Current Liability that has or will result in a Lien under ERISA or the Code; that proceedings will be or have been instituted to terminate a Plan having an Unfunded Current Liability (including the giving of written notice thereof); that a proceeding has been instituted against Holdings, any Co-Borrower or any of their respective Subsidiaries or an ERISA Affiliate pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan; that the PBGC has notified Holdings, any Subsidiary thereof or any ERISA Affiliate of its intention to appoint a trustee to administer any Plan; that Holdings, any Co-Borrower or any of their respective Subsidiaries or any ERISA Affiliate has failed to make a required installment or other payment pursuant to Section 412 of the Code with respect to a Plan; or that Holdings, any Co-Borrower or any of their respective Subsidiaries or any ERISA Affiliate has incurred or will incur (or has been notified in writing that it will incur) any liability (including any contingent or secondary liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code and promptly following any request therefor, on and after the effectiveness of Title V of the Pension Act, copies of (i) any documents described in Section 101(k)(1) of ERISA that Holdings, any Co-Borrower or any of their respective Subsidiaries or any ERISA Affiliates may request with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA that Holdings, any Co-Borrower or any of their respective Subsidiaries or any ERISA Affiliates may request with respect to any Multiemployer Plan; provided that if Holdings, any Co-Borrower or any of their respective Subsidiaries or any ERISA Affiliates has not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, Holdings, any Co-Borrower or any of their respective Subsidiaries or any ERISA Affiliates shall promptly after the request of any Lender make a request for such documents or notices from the such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof; and

 

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(b) with respect to any Foreign Plan: that a Foreign Benefit Event has occurred.

(vii) Financial Plans. Within 90 days after the commencement of each Fiscal Year of Holdings, a budget of Holdings and its Subsidiaries in reasonable detail for the Fiscal Year as customarily prepared by management of Holdings for its internal use consistent in scope with the financial statements provided pursuant to Section 6.1(ii), setting forth the principal assumptions upon which such budget is based.

(viii) Environmental Matters. Promptly after obtaining knowledge of any one or more of the following environmental matters, unless such environmental matters would not, individually or when aggregated with all other such matters, be reasonably expected to result in a Material Adverse Effect, notice of:

(a) any pending or threatened Environmental Claim against Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any of their Subsidiaries or any Real Estate;

(b) any condition or occurrence on any Real Estate that (x) results in noncompliance by Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any of their Subsidiaries with any Environmental Law or (y) could reasonably be anticipated to form the basis of an Environmental Claim against Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any of their Subsidiaries or any Real Estate;

(c) any condition or occurrence on any Real Estate that could reasonably be anticipated to cause any restrictions on the ownership, occupancy, use or transferability of such Real Estate under any Environmental Law; and

(d) the taking of any removal or remedial action in response to the actual or alleged presence or Release of any Hazardous Material on any Real Estate.

All such notices shall describe in reasonable detail the nature of the Environmental Claim, condition, occurrence or removal, remedial action and the response thereto. The term “ Real Estate ” means land, buildings and improvements at any time owned or leased by Holdings, the Co-Borrowers or any of their Subsidiaries, but excluding all operating fixtures and equipment, whether or not incorporated into improvements.

(ix) Other Information. Promptly upon filing thereof, copies of any filings (including on Form 10-K, 10-Q or 8-K) or registration statements with, and reports to, the SEC or any analogous Governmental Authority in any relevant jurisdiction by TMHC, New TMM, Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any of the Restricted Subsidiaries (other than amendments to any registration statement (to the extent such registration statement, in the form it becomes effective, is delivered to the Administrative Agent for further delivery to the Lenders), exhibits to any registration statement and, if applicable, any registration statements on Form S-8) and copies of all financial statements, proxy statements, notices and reports that Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the

 

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Co-Borrowers or any of the Restricted Subsidiaries shall send to the holders of any publicly issued debt of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and/or any of the Restricted Subsidiaries in their capacity as such holders (in each case to the extent not theretofore delivered to the Administrative Agent for further delivery to the Lenders pursuant to this Agreement) and, with reasonable promptness, such other information (financial or otherwise) as the Administrative Agent on their own behalf or on behalf of any Lender may reasonably request in writing from time to time.

Documents required to be delivered pursuant to Sections 6.1(i), (ii), (vii) and (ix) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically in accordance with Section 10.7B; provided that: (x) upon written request by the Administrative Agent, Holdings or the Co-Borrowers shall deliver paper copies of such documents to the Administrative Agent for further distribution to each Lender until a written request to cease delivering paper copies is given by the Administrative Agent and (y) Holdings or the Co-Borrowers shall notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions ( i.e. , soft copies) of such documents. Each Lender shall be solely responsible for timely accessing posted documents or requesting delivery of paper copies of such documents from the Administrative Agent and maintaining its copies of such documents.

 

6.2 Consolidated Corporate Franchises.

Holdings, U.S. Holdings, Canada Intermediate Holdings, Canada Holdings, U.S. FinCo and each Co-Borrower will do, and will cause each Subsidiary Guarantor to do, or cause to be done, all things necessary to preserve and keep in full force and effect its existence, corporate rights and authority, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect; provided , however , that Holdings, U.S. Holdings, Canada Intermediate Holdings, Canada Holdings, U.S. FinCo, the Co-Borrowers and the Subsidiary Guarantors may consummate any transaction permitted or not otherwise prohibited under Section 7.3 or 7.6.

 

6.3 Payment of Taxes.

Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and each Co-Borrower will pay and discharge, and will cause each of their respective Subsidiaries to pay and discharge, all material Taxes, assessments and governmental charges or levies imposed upon Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, a Co-Borrower or any such Subsidiary or upon its income or profits, or upon any properties belonging to it, prior to the date on which such payments become due, and all lawful material claims that, if unpaid, could reasonably be expected to become a material Lien upon any properties of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, a Co-Borrower or any of the Restricted Subsidiaries; provided that none of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any Co-Borrower or any of their respective Subsidiaries shall be required to pay any such Tax, assessment, charge, levy or claim that is being contested in good faith and by proper proceedings if it has maintained adequate reserves (in the good faith judgment of the management of Holdings) with respect thereto in accordance with GAAP.

 

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6.4 Maintenance of Properties; Insurance.

A. Each of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers will, and will cause the Subsidiary Guarantors to, ensure that its properties and equipment necessary to its business in whomsoever’s possession they may be to the extent that it is within the control of such party to cause the same, are kept in good repair, working order and condition, normal wear and tear excepted, and that from time to time there are made in such properties and equipment all appropriate repairs, renewals, replacements, extensions, additions, betterments and improvements thereto, in each case to the extent and in the manner customary for companies in the industry in which the Co-Borrowers, U.S. FinCo and the Subsidiary Guarantors conduct business and consistent with third-party leases, except in each case to the extent the failure to do so could not be reasonably expected to have a Material Adverse Effect.

B. Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers will, and will cause each of the Subsidiary Guarantors to, at all times maintain in full force and effect, with insurance companies that Holdings and the Co-Borrowers believe (in the good-faith judgment of the management of Holdings) are financially sound and responsible at the time the relevant coverage is placed or renewed, insurance in at least such amounts and against at least such risks (and with such risk retentions) as are usually insured against by companies engaged in businesses and owning similar properties in the same general area similar to those engaged in by Holdings and the Co-Borrowers; and will furnish to the Administrative Agent for further delivery to the Lenders, upon written request from the Administrative Agent, information presented in reasonable detail as to the insurance so carried.

C. [Reserved].

D. [Reserved].

 

6.5 Inspection; Books and Records.

Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers will, and will cause the Subsidiary Guarantors and the Specified Subsidiaries to, maintain proper books of record and account, in which entries that are full, true and correct in all material respects and are in conformity with GAAP consistently applied shall be made of all material financial transactions and matters involving the assets and business of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers, such Subsidiary Guarantor or such Specified Subsidiary, as the case may be. Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers will, and will cause the Subsidiary Guarantors and the Specified Subsidiaries to, permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the reasonable expense of the Co-Borrowers and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the U.S. Borrower; provided that, excluding any such visits and inspections during the continuation of an Event of Default, only the Administrative Agent on behalf of the Lenders may exercise rights of the Administrative Agent and the Lenders under this Section 6.5 and the Administrative Agent shall not exercise such rights more often than two (2) times during any calendar year absent the existence of an Event of Default and only one (1) such time shall

 

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be at the Co-Borrowers’ expense; and provided further , that when an Event of Default exists, the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Co-Borrowers at any time during normal business hours and upon reasonable advance notice. The Administrative Agent and the Lenders shall give Holdings and the Co-Borrowers the opportunity to participate in any discussions with Holdings’ independent public accountants.

 

6.6 Compliance with Statutes.

Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers will, and will cause each of the Subsidiary Guarantors and the Specified Subsidiaries to, comply with all Applicable Laws (including Environmental Laws and permits required thereunder), except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

6.7 Execution of Guaranty by Future Guarantors.

A. Subject to any applicable limitations set forth in the Guaranty, Holdings, U.S. FinCo and the U.S. Borrower will cause (i) any direct or indirect wholly owned Domestic Subsidiary of U.S. FinCo or the U.S. Borrower (other than any Unrestricted Subsidiary or any Excluded Subsidiary) formed or otherwise purchased or acquired after the Restatement Effective Date, (ii) any Domestic Subsidiary of U.S. FinCo or the U.S. Borrower (other than any Unrestricted Subsidiary or any Excluded Subsidiary) that is not a wholly owned Subsidiary on the Restatement Effective Date but subsequently becomes a wholly owned Subsidiary (other than any Unrestricted Subsidiary or any Excluded Subsidiary), (iii) any Subsidiary of Holdings that acquires Capital Stock of U.S. FinCo or any Co-Borrower after the Restatement Effective Date and (iv) any direct or indirect parent of Holdings (including TMHC and New TMM) that incurs Guarantee Obligations in respect of the Senior Unsecured Notes or any other Indebtedness in excess of $35,000,000 in the aggregate, in each case to execute a supplement to the Guaranty substantially in the form of Annex B to the Guaranty in order to become a Guarantor under the Guaranty.

B. [Reserved].

 

6.8 [Reserved].

 

6.9 Transactions with Affiliates.

Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and each Borrower will, and will cause the Restricted Subsidiaries to, enter into all transactions with any Affiliate of Holdings or any Borrower on terms substantially as favorable to Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, a Co-Borrower or such Restricted Subsidiary as would be obtainable by Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, a Co-Borrower or such Restricted Subsidiary at the time in a comparable arm’s-length transaction with a Person other than an Affiliate, other than (a) transactions among Loan Parties or any Restricted Subsidiary or any entity that becomes a Restricted Subsidiary as a result of such transaction, (b) the consummation of the Transactions and the payment of Transaction Costs, (c) loans, guarantees and other transactions by Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries, (d) the payment of termination fees and other amounts payable pursuant to the

 

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Management Agreements in connection with the termination thereof, (e) equity issuances, repurchases, retirements or other acquisitions or retirements of Capital Stock by U.S. FinCo or the Co-Borrowers permitted or not otherwise prohibited under Section 7.4, (f) employment, compensation and severance arrangements and health and benefit plans between Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrower and the Restricted Subsidiaries and their respective officers and employees in the ordinary course of business, (g) the payment of customary fees, compensation and reasonable out-of-pocket costs to, and indemnities provided on behalf of, directors, managers, consultants, officers and employees of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any Co-Borrower and the Restricted Subsidiaries in the ordinary course of business to the extent attributable to the ownership or operation of, or provision of services to Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries, (h) transactions pursuant to permitted agreements in existence on the Restatement Effective Date and set forth on Schedule 6.9 or any amendment thereto to the extent such an amendment is not adverse, taken as a whole, to the Lenders in any material respect, (i) Dividends, redemptions and repurchases permitted or not otherwise prohibited under Section 7.4 and Investments permitted or not otherwise prohibited under Section 7.3, (j) customary payments (including reimbursement of fees and expenses) by Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any Co-Borrower and any Restricted Subsidiaries to the Sponsors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities (including in connection with acquisitions or divestitures, whether or not consummated), which payments are approved by the majority of the members of the Board of Directors or a majority of the disinterested members of the Board of Directors of the General Partner or any Co-Borrower, in good faith, (k) any transaction or series of related transactions having consideration in an aggregate amount less than $10,000,000, (l) any transaction in which the only consideration paid by the Loan Parties or any of their Restricted Subsidiaries is in the form of Capital Stock (other than Disqualified Stock) of any direct or indirect parent of Holdings (including TMHC and New TMM) to Affiliates of Holdings or any cash equity contribution made to the capital of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any Co-Borrower or any Restricted Subsidiary in the form of Capital Stock (other than Disqualified Stock), (m) equity issuances to directors, managers, consultants, officers and employees of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries in connection with the Transactions, (n) the formation and maintenance of any consolidated group or subgroup for tax, accounting or cash pooling or management purposes in the ordinary course of business, (o) transactions entered into good faith with an Affiliate of Holdings which provide for shared services and/or facilities arrangements and which provide cost savings and/or other operations efficiencies to the Loan Parties and the Restricted Subsidiaries, taken as a whole; (p) transactions with customers, suppliers, contractors, joint venture partners or purchasers or sellers of goods or services, in each case, which are in the ordinary course of business (including pursuant to joint venture agreements) and otherwise in compliance with the terms of this Agreement, (q) Intellectual Property licenses in the ordinary course of business and (r) payments to or from, and transactions with, any joint venture in the ordinary course of business; provided that no Affiliate of Holdings (other than the Loan Parties or the Restricted Subsidiaries) has any Investment in any such joint venture.

 

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6.10 End of Fiscal Years; Fiscal Quarters.

Each of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and each Co-Borrower will, for financial reporting purposes, cause (a) each of its, and each Restricted Subsidiary’s, Fiscal Years to end on December 31 of each year and (b) each of its, and each Restricted Subsidiary’s, fiscal quarters to end on dates consistent with such Fiscal Year-end and Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers’ past practice; provided , however , that Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers may, upon written notice to the Administrative Agent, change the financial reporting convention specified above to any other financial reporting convention reasonably acceptable to the Administrative Agent, in which case Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Administrative Agent will, and are hereby authorized by the Lenders to, make any adjustments to this Agreement that are necessary in order to reflect such change in financial reporting.

 

6.11 Use of Proceeds.

The Borrowers will use the Letters of Credit and the proceeds of all Loans for the purposes set forth in Section 2.5.

 

6.12 Changes in Business.

Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, each Borrower and each Subsidiary Guarantor, taken as a whole, will not fundamentally and substantively alter the character of their business, taken as a whole, from the business conducted by Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, each Borrower and each Subsidiary Guarantor, taken as a whole, on the Restatement Effective Date and except for other business activities complementary, incidental, ancillary or related to any of the foregoing or reasonable developments or extensions thereof. None of the following will constitute a violation of this covenant: (a) the engaging by a Subsidiary of Holdings in, or the withdrawal from any business related to, a Real Estate Business, (b) a change in the geographic regions of the United States or Canada in which the Subsidiaries of Holdings operate and (c) the reorganization of the business of the Subsidiaries of Holdings among the Subsidiaries.

 

6.13 Designation of Subsidiaries.

The Board of Directors of Holdings, U.S. FinCo or a Co-Borrower may at any time designate any Restricted Subsidiary as an Unrestricted Subsidiary or any Unrestricted Subsidiary as a Restricted Subsidiary; provided that (i) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (ii) immediately after giving effect to such designation, U.S. FinCo, the Co-Borrowers and the Restricted Subsidiaries shall be in compliance, on a Pro Forma Basis, with the Financial Performance Covenants as of the last day of the most recent Test Period for which Section 6.1 Financials have been delivered and regardless of whether such Test Period included a Measurement Quarter (and, as a condition precedent to the effectiveness of any such designation, the Co-Borrowers shall deliver to the Administrative Agent a certificate setting forth in reasonable detail the calculations demonstrating such compliance), (iii) no Subsidiary may be designated as an Unrestricted Subsidiary if such Subsidiary is U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo or a Borrower and (iv) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for the purposes of the indenture governing the Senior Unsecured Notes. The designation of any Subsidiary as an Unrestricted Subsidiary shall constitute an Investment by U.S. FinCo or the Co-Borrowers therein at the date of designation in an amount equal to the net book value of U.S. FinCo’s or the Co-Borrowers’ (as

 

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applicable) investment therein as reflected in the most recently delivered Section 6.1 Financials. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Subsidiary existing at such time.

 

6.14 Ratings.

Holdings and the Co-Borrowers will exercise commercially reasonable efforts to maintain at all times a public corporate rating from S&P and a public corporate family rating from Moody’s.

 

6.15 Anti-Money Laundering Legislation.

Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and each Co-Borrower will, and will cause each Subsidiary Guarantor to, promptly after the request by any Lender or Issuing Bank, provide all documentation and other information that such Lender or Issuing Bank reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada).

SECTION 7.

NEGATIVE COVENANTS

Each of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers covenants and agrees that, so long as any of the Commitments hereunder shall remain in effect and until payment in full of all of the Loans and other Obligations (other than contingent indemnification obligations, Guaranteed Hedge Obligations or Cash Management Obligations, in each case, not then due and payable) and the cancellation or expiration of all Letters of Credit (or the making of other arrangements with respect to such Letters of Credit reasonably satisfactory to the Administrative Agent and each relevant Issuing Bank), unless the Requisite Lenders shall otherwise give prior written consent, Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers shall perform, and shall cause each of the Subsidiary Guarantors to perform, all covenants in this Section 7.

 

7.1 [Reserved].

 

7.2 Limitation on Liens, etc.

A. Liens.

Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers will not, nor will they permit any Subsidiary Guarantor to, directly or indirectly, create, incur, assume or permit to exist any Lien upon any property or assets of any kind (real or personal, tangible or intangible) of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any Subsidiary Guarantor, whether now owned or hereafter acquired, except:

(i) (A) Liens created in favor of the Administrative Agent and the other Guaranteed Parties to secure the Obligations and (B) Liens created in favor of one or more Issuing Banks to secure Letters of Credit;

 

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(ii) Permitted Encumbrances;

(iii) Liens securing Indebtedness arising under Capital Leases; provided that such Liens do not at any time extend to or cover any assets (except for additions, accessions, improvements and replacements of such assets and customary deposits in connection therewith and proceeds and products therefrom) other than the assets subject to such Capital Leases; provided , that individual financings of equipment provided by one lender may be cross collateralized to other financings of equipment provided by such lender;

(iv) each Lien existing on the Restatement Effective Date and listed on Schedule 7.2; provided that (a) such Lien does not extend to any other property or asset of a Loan Party other than after acquired property that is affixed or incorporated into the property covered by such Lien and proceeds and products thereof and (b) such Lien shall secure only those obligations that it secures on the Restatement Effective Date and any refinancing thereof constituting Refinancing Indebtedness;

(v) the modification, replacement, extension or renewal of any Lien permitted by clause (iii), (iv), (vi) or (xix) of this Section 7.2A upon or in the same assets theretofore subject to such Lien (other than after-acquired property that is affixed or incorporated into the property covered by such Lien or financed by Indebtedness) or the refinancing of the Indebtedness or other obligation secured thereby;

(vi) Liens existing on the assets of any Person that becomes a Subsidiary Guarantor or is merged with or into, consolidated with or acquired by a Loan Party, or existing on assets acquired by U.S. FinCo, the Co-Borrowers or any Subsidiary Guarantor, pursuant to any Investment permitted or not otherwise prohibited under Section 7.3; provided that such Liens attach at all times only to the same assets that such Liens (other than after-acquired property that is affixed or incorporated into the property covered by such Lien and proceeds and products thereof) attached to, and secure only the same Indebtedness or obligations (or any refinancing thereof constituting Refinancing Indebtedness) that such Liens secured, immediately prior to such Person becoming a Subsidiary Guarantor, or the merger or consolidation of such Person with or into a Loan Party, the acquisition of such Person by a Loan Party or the acquisition of such assets, as applicable;

(vii) [Reserved];

(viii) [Reserved];

(ix) [Reserved];

(x) [Reserved];

(xi) Liens (a) on cash advances in favor of the seller of any property to be acquired in an Investment permitted pursuant to, or not otherwise prohibited by, Section 7.3 to be applied against the purchase price for such Investment, and (b) consisting of an agreement to sell, transfer, lease or otherwise dispose of any property in a transaction permitted or not otherwise prohibited under Section 7.6B or in any transaction excluded from the definition of “Asset Sale”, in each case, solely to the extent such Investment or sale, disposition, transfer or lease, as the case may be, would have been permitted on the date of the creation of such Lien;

 

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(xii) Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by U.S. FinCo, the Co-Borrowers or any of the Subsidiary Guarantors in the ordinary course of a Real Estate Business permitted or not otherwise prohibited by this Agreement;

(xiii) Liens deemed to exist in connection with Investments in repurchase agreements permitted or not otherwise prohibited under Section 7.3;

(xiv) Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

(xv) Liens that are contractual rights of set-off (a) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (b) relating to pooled deposit, automatic clearing house or sweep accounts of U.S. FinCo, any Co-Borrower or any Subsidiary Guarantor to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of U.S. FinCo, the Co-Borrowers and the Subsidiary Guarantors or (c) relating to purchase orders and other agreements entered into with customers of U.S. FinCo, a Co-Borrower or any Subsidiary Guarantor in the ordinary course of business;

(xvi) Liens solely on any cash earnest money deposits made by U.S. FinCo, a Co-Borrower or any of the Subsidiary Guarantors in connection with any letter of intent or purchase agreement permitted or not otherwise prohibited hereunder;

(xvii) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

(xviii) [Reserved];

(xix) Liens not otherwise permitted by this Section 7.2A so long as the aggregate outstanding amount of Indebtedness and other obligations secured thereby at any time outstanding does not exceed the greater of (i) 2.0% of Consolidated Loan Party Adjusted Tangible Assets at the time of incurrence and (ii) $50,000,000;

(xx) pledges and deposits in the ordinary course of business securing liability for reimbursement and indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to U.S. FinCo, the Co-Borrowers or any Subsidiary Guarantor;

(xxi) Liens arising in the ordinary course of business to secure accounts payable or similar trade obligations of U.S. FinCo, the Co-Borrowers or any Subsidiary Guarantor not constituting Indebtedness;

(xxii) Liens deemed to exist by reason of (x) any encumbrance or restriction (including put and call arrangements) with respect to the Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement or (y) any

 

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encumbrance or restriction imposed under any contract for the sale by U.S. FinCo, a Co-Borrower or any Subsidiary of U.S. FinCo or a Co-Borrower of the Capital Stock of any Subsidiary of U.S. FinCo or a Co-Borrower, or any business unit or division of a Co-Borrower or any Subsidiary of U.S. FinCo or a Co-Borrower permitted or not otherwise prohibited under this Agreement; provided that in each case such Liens shall extend only to the relevant Capital Stock;

(xxiii) Liens securing Non-Recourse Indebtedness (including, for the avoidance of doubt, Non-Recourse Indemnity Guaranties) of U.S. FinCo, the Co-Borrowers or a Subsidiary Guarantor thereof; provided that such Liens do not at any time encumber any property, except for accessions to such property, other than the property financed by such Indebtedness and the proceeds and products thereof and assets related thereto;

(xxiv) Liens on the Capital Stock of one or more Subsidiaries thereof or in joint ventures or similar entities owned thereby securing (a) Non-Recourse Payment Guaranties incurred by U.S. FinCo, the Co-Borrowers or a Subsidiary Guarantor and (b) Guarantee Obligations incurred by U.S. FinCo, the Co-Borrowers or a Subsidiary Guarantor in respect of any Indebtedness incurred by joint ventures or similar entities that do not constitute Restricted Subsidiaries.

(xxv) Liens securing obligations of any Loan Party to any third party in connection with PAPAs, any option, repurchase right or right of first refusal to purchase real property granted to the master developer or the seller of real property that arises as a result of the non-use or non-development of such real property by a Loan Party and joint development agreements with third parties to perform and/or pay for or reimburse the costs of construction and/or development related to or benefiting any Loan Party’s property (and additions, accessions, improvements and replacements and customary deposits in connection therewith and proceeds and products therefrom) and property belonging to such third parties, in each case entered into in the ordinary course of the Loan Party’s business; provided that such Liens do not at any time encumber any property, except for accessions to such property, other than the property financed by such Indebtedness and the proceeds and products thereof or which is otherwise the subject of such PAPAs, such option, repurchase right or right of first refusal or such joint development agreements;

(xxvi) Liens securing Construction Loans, Combination Loans or Permitted Purchase Money Loans, but only (A) in the case of Permitted Purchase Money Loans, to the extent permitted by the definitions of “Assumed Purchase Money Loan” and “Seller Purchase Money Loan”, (B) in the case of Construction Loans, to the extent permitted by the definition of “Construction Loan” and (C) in the case of Combination Loans, to the extent permitted by the definition of “Combination Loan”;

(xxvii) Liens on assets of the Canadian Borrower or any of its Subsidiaries granted pursuant to the terms and conditions of the Canadian Debt Documents;

(xxviii) Liens on assets of the Canadian Borrower securing Guarantee Obligations incurred by the Canadian Borrower in respect of any Indebtedness incurred by joint ventures or similar entities that do not constitute Restricted Subsidiaries, so long as, at the time of the incurrence thereof and after giving effect thereto, no Event of Default shall have occurred and be continuing;

 

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(xxix) Liens on assets of the Canadian Borrower securing Indebtedness of the Canadian Borrower or any of its Subsidiaries, in an aggregate principal amount not to exceed the greater of (i) 5% of Consolidated Loan Party Adjusted Tangible Assets at the time of the incurrence thereof and (ii) $125,000,000, so long as, at the time of the incurrence thereof and after giving effect thereto, no Event of Default shall have occurred and be continuing;

(xxx) Liens on assets of the Canadian Borrower securing Guarantee Obligations incurred by the Canadian Borrower in respect of Indebtedness of any Restricted Subsidiary so long as, at the time of the incurrence thereof and after giving effect thereto, no Event of Default shall have occurred and be continuing;

(xxxi) Liens on any office building owned by any Loan Party or on any clubhouse located in any development of a Loan Party incurred in the ordinary course of business and not for purposes of securing Indebtedness for borrowed money;

(xxxii) Liens on Cash or Cash Equivalents securing obligations under Hedge Agreements arising in the ordinary course of business and not for speculative purposes;

(xxxiii) Liens against the ownership interest of a Loan Party in a joint venture or a Subsidiary that is not a Loan Party; and

(xxxiv) Liens on Cash or Cash Equivalents in favor of any Lender or other bank or financial institution (including as agent) as security for the obligations of any Loan Party under letters of credit not issued under this Agreement in an aggregate face amount not exceeding the greater of (i) 3.0% of Consolidated Loan Party Adjusted Tangible Assets at the time of incurrence and (ii) $75,000,000.

B. [Reserved].

 

7.3 Investments; Joint Ventures.

Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers will not, nor will they permit any Subsidiary Guarantor to, make or permit to exist any Investment in any Person that is not a Loan Party, except:

(i) extensions of trade credit and credit in connection with the sale of Real Property Inventory and Housing Units, asset purchases (including purchases of inventory, supplies and materials) and the licensing or contribution of Intellectual Property, in each case in the ordinary course of business;

(ii) Investments in assets that were Cash Equivalents at the time made;

(iii) any loan or advance to an officer, director, partner or employee of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any Co-Borrower or any Subsidiary Guarantor made in the ordinary course of business or in accordance with past practice; provided , however , that any such loan or advance exceeding $5,000,000 shall have been approved by the Governing Body of Holdings;

 

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(iv) Investments (a) existing or contemplated on the Restatement Effective Date and listed on Schedule 7.3 and any modifications, replacements, extensions, renewals or reinvestments thereof and (b) Investments existing on the Restatement Effective Date of a Co-Borrower or any Subsidiary Guarantor in a Restricted Subsidiary that is not a Guarantor and any modification, replacement, renewal, extension or reinvestment thereof, so long as the aggregate amount of all Investments pursuant to this clause (iv) is not increased at any time above the amount of such Investments existing on the Restatement Effective Date;

(v) Investments in Hedge Agreements entered into in the ordinary course of business and not for speculative purposes;

(vi) Investments received in connection with the bankruptcy or reorganization of suppliers or customers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business or upon the foreclosure with respect to any secured Investment or other transfer of title with respect to any secured Investment;

(vii) Investments to the extent that payment for such Investments is made solely with Capital Stock of any direct or indirect parent of Holdings (including TMHC and New TMM);

(viii) Investments constituting non-cash proceeds of sales, transfers and other dispositions of assets to the extent permitted or not otherwise prohibited by Section 7.6B;

(ix) [Reserved];

(x) Investments consisting of rebates or extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors and other credits to suppliers in the ordinary course of business;

(xi) [Reserved];

(xii) Investments in the ordinary course of business consisting of Article 3 endorsements for collection or deposit and Article 4 customary trade arrangements with customers consistent with past practices;

(xiii) any Investment in payroll, travel and similar advances to cover business-related travel expenses, moving expenses or other similar expenses, in each case incurred in the ordinary course of business;

(xiv) Guaranties by U.S. FinCo, a Co-Borrower or any Subsidiary Guarantor of leases (other than Capital Leases) or of other obligations, in each case entered into in the ordinary course of business;

(xv) [Reserved];

(xvi) Investments made to repurchase or retire Capital Stock of Holdings (or any direct or indirect parent thereof (including TMHC and New TMM)) owned by any employee stock ownership plan or key employee stock ownership plan of Holdings (or any direct or indirect parent thereof (including TMHC and New TMM));

 

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(xvii) any additional Investments (including Investments in Minority Investments and Unrestricted Subsidiaries and in joint ventures or similar entities that do not constitute Restricted Subsidiaries) as valued at the Fair Market Value of such Investment at the time each such Investment is made; provided that (a) no Default or Event of Default shall have occurred and be continuing or would result therefrom, (b) Holdings would be in compliance with the Financial Performance Covenants on a Pro Forma Basis after giving effect thereto as of the last day of the most recent Fiscal Quarter for which Section 6.1 Financials have been or were required to be delivered (if, on a Pro Forma Basis, such Fiscal Quarter would have been a Measurement Quarter) and (c) Holdings would be in compliance with Section 2.4A(iii)(b) on a Pro Forma Basis after giving effect thereto as of the last day of the most recent Test Period for which Section 6.1 Financials have been or were required to be delivered (if, on a Pro Forma Basis, the Capitalization Ratio as of the last day of such Test Period would have resulted in a Borrowing Base Trigger Event);

(xviii) [Reserved];

(xix) Investments in joint ventures and Restricted Subsidiaries that are not Guarantors, as valued at the Fair Market Value of such Investment at the time each such Investment is made, provided , that the aggregate amount of such Investments (as so valued) shall not cause the aggregate amount of all such Investments made pursuant to this clause (xix) (as so valued) to exceed (1) the greater of (i) 2.0% of Consolidated Loan Party Adjusted Tangible Assets at the time of incurrence and (ii) $50,000,000 plus (2) an amount equal to any repayments, interest, returns, profits, distributions, income and similar amount actually received in respect of any such Investment (which amount shall not exceed the amount of such Investment valued at the Fair Market Value of such Investment at the time such Investment was made);

(xx) Investments of a Subsidiary Guarantor acquired after the Restatement Effective Date or of any Person merged into U.S. FinCo or a Co-Borrower or merged, amalgamated or consolidated with a Subsidiary Guarantor in accordance with Section 7.6A after the Restatement Effective Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;

(xxi) Investments consisting of Indebtedness, fundamental changes, Dispositions and Dividends permitted or not otherwise prohibited under Sections 7.4, 7.6A and 7.6B;

(xxii) Capital contributions or other Investments in Beneva Indemnity Company or any other Insurance Subsidiary by any direct or indirect parent company of Beneva Indemnity Company or any other Insurance Subsidiary to the extent required to comply with Applicable Laws (including solvency laws) or to satisfy other regulatory requirements applicable to Beneva Indemnity Company or such other Insurance Subsidiary;

(xxiii) any Investment in any Person or the purchase of a business or assets, in each case, owned (or previously owned) by a customer of a Loan Party as a condition or in connection with such customer (or any member of such customer’s group) contracting with such Loan Party, in each case in the ordinary course of business;

 

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(xxiv) Obligations (but not payments thereon) with respect to homeowners’ association obligations, community facility district bonds, metro district bonds, mello-roos bonds and subdivision improvement bonds and similar bonding requirements arising in the ordinary course of business; and

(xxv) Guarantee Obligations, including completion guarantee or indemnification obligations (other than for the payment of borrowed money) entered into in the ordinary course of business and incurred for the benefit of any adjoining landowner, lender, seller of real property or municipal government authority (or enterprises thereof) in connection with the acquisition, construction, subdivision, entitlement and development of real property.

Any Investment arising in connection with any transfer of funds in connection with U.S. FinCo’s or the Co-Borrowers’ cash management system in the ordinary course of business shall be disregarded for purposes of this Section 7.3. To the extent that the making of any Investment could be deemed a use of more than one subsection of this Section 7.3, U.S. FinCo and/or the Co-Borrowers may at the time of the making thereof select the subsection(s) to which such Investment or a portion thereof will be deemed a use and in no event shall the same Investment or same portion of such Investment be deemed a use of or be attributable to more than one subsection of this Section 7.3.

 

7.4 Restricted Payments.

Holdings will not declare or pay any dividends (other than dividends payable solely in the Capital Stock of Holdings) or return any capital to its stockholders or make any other distribution, payment or delivery of property or cash to its stockholders as such, in each case in respect of any Capital Stock of Holdings held by such stockholder, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for consideration, any shares of any class of its Capital Stock or the Capital Stock of any direct or indirect parent now or hereafter outstanding (or any options, warrants, stock appreciation rights or phantom-based equity issued with respect to any of its Capital Stock), or set aside any funds for any of the foregoing purposes, or permit U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any Co-Borrower or any of the Restricted Subsidiaries to purchase or otherwise acquire for consideration (other than in connection with an Investment permitted or not otherwise prohibited by Section 7.3 (other than clause (xxi) thereof)) any shares of any class of the Capital Stock of Holdings (or any direct or indirect parent thereof (including TMHC and New TMM)), now or hereafter outstanding (or any options or warrants or stock appreciation rights issued with respect to any of the Capital Stock of Holdings (or any direct or indirect parent thereof(including TMHC and New TMM))) (all of the foregoing “ Dividends ”); provided that:

(i) Holdings may redeem in whole or in part any of its Capital Stock for another class of Capital Stock or rights to acquire its Capital Stock or with proceeds from substantially concurrent equity contributions or issuances of new shares of its Capital Stock; provided that any terms and provisions material to the interests of the Lenders, when taken as a whole, contained in such other class of Capital Stock are at least as advantageous to the Lenders as those contained in the Capital Stock redeemed thereby;

(ii) [Reserved];

 

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(iii) Holdings may declare and pay Dividends to New TMM, the proceeds of which are used to redeem, acquire, retire or repurchase shares of the Capital Stock of New TMM or TMHC (or any options, warrants, stock appreciation rights or phantom-based equity issued with respect to any of such Capital Stock) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of TMHC and its Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any equity, stock option, stock appreciation rights or phantom equity-based plan, any management, director and/or employee stock ownership or option plan, stock subscription plan, employment termination agreement or any employment agreements or stockholders’ agreement; provided that except with respect to non-discretionary repurchases, acquisitions, retirement, or redemptions pursuant to the terms of any equity, stock option, stock appreciation rights or phantom equity-based plan, any management, director or employee stock ownership or option plan, stock subscription plan, employment termination agreement or any employment or shareholder agreement, the aggregate amount of all cash paid in respect of all such shares of Capital Stock so redeemed, acquired, retired or repurchased in any calendar year does not exceed the sum of (A) $10,000,000 plus (ii) all amounts obtained by TMHC and contributed to any Co-Borrower during such calendar year from the sale of such Capital Stock to other present or former officers, consultants, employees and directors in connection with any permitted compensation and incentive arrangements plus (iii) all amounts obtained from any key-man life insurance policies received during such calendar year; notwithstanding the foregoing, 100% of the unused amount of payments in respect of this clause (iii) may be carried forward to succeeding Fiscal Years and utilized to make payments pursuant to this clause (iii);

(iv) [Reserved];

(v) [Reserved];

(vi) Holdings may make additional Dividends so long as (a) no Default or Event of Default shall have occurred and be continuing or would result therefrom, (b) Holdings would be in compliance with the Financial Performance Covenants on a Pro Forma Basis after giving effect thereto as of the last day of the most recent Fiscal Quarter for which Section 6.1 Financials have been or were required to be delivered (if, on a Pro Forma Basis, such Fiscal Quarter would have been a Measurement Quarter) and (c) Holdings would be in compliance with Section 2.4A(iii)(b) on a Pro Forma Basis after giving effect thereto as of the last day of the most recent Test Period for which Section 6.1 Financials have been or were required to be delivered (if, on a Pro Forma Basis, the Capitalization Ratio as of the last day of such Test Period would have resulted in a Borrowing Base Trigger Event);

(vii) Holdings may make and pay Dividends to New TMM, the proceeds of which are used to repurchase Capital Stock of TMHC deemed to occur upon cashless exercise of stock options or warrants held by individuals who are or were officers, managers, consultants, directors and/or employees of TMHC or any of its Subsidiaries (or their respective spouses, former spouses, executors, administrators, heirs or legatees) if such Capital Stock represents a portion of the exercise price, or withholding taxes payable in connection with the exercise, of such options or warrants;

(viii) Holdings may make and pay Dividends to New TMM (or, at the election of New TMM and to the extent that such payment would otherwise be permitted as a Dividend to New TMM, may make payments to such other Persons as New TMM may specify for the account of New TMM):

 

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(a) the proceeds of which will be used to pay the tax liability to each relevant jurisdiction in respect of New TMM or its direct and indirect limited partners, but only to the extent of an amount equal to the greater of the amount of such parties’ (i) U.S. federal, state and local income taxes or (ii) Canadian federal or provincial income taxes, in each case with respect to such parties’ allocable share of any Holdings net taxable income and gain for such fiscal period, determined by assuming (without regard to such parties’ actual tax liability) that such income or gain, as applicable, is taxable to such parties at the greater of (x) the highest marginal U.S. federal income tax rate then in effect (including any tax on “net investment income”), and a state and local income tax rate equal to the highest marginal rate then in effect for an individual or (if higher) a corporation that is a resident of San Francisco, California, and (y) the highest combined provincial and federal income tax rate applicable to an individual or (if higher) a corporation that is a resident of Canada and is subject to tax in the province of Canada that has the highest income tax rate, in each case taking into account the character of such income or gain and the deductibility of state and local income taxes for U.S. federal income tax purposes and provincial income taxes for Canadian federal income tax purposes, provided that no payments shall be permitted under this Section 7.4(viii)(a) at any time that either Holdings or New TMM is taxable as an entity other than a pass-through for U.S. federal income tax purposes;

(b) the proceeds of which shall be used by New TMM or TMHC or any other direct or indirect parent of Holdings to pay its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting and similar expenses provided by third parties), which are reasonable and customary and incurred in the ordinary course of business, in an aggregate amount not to exceed $2,500,000 in any Fiscal Year plus any actual, reasonable and customary indemnification claims made by directors or officers of New TMM or TMHC;

(c) the proceeds of which shall be used by New TMM or TMHC or any other direct or indirect parent of Holdings to pay franchise taxes and other fees, taxes and expenses required to maintain its corporate existence; and

(d) the proceeds of which shall be used by New TMM or TMHC or any other direct or indirect parent of Holdings to pay fees and expenses (other than to Affiliates) related to any unsuccessful equity or debt offering permitted or not otherwise prohibited by this Agreement; and

(ix) Holdings may make payments described in Sections 6.9(b), 6.9(d), 6.9(f), 6.9(g), 6.9(h), 6.9(n) and 6.9(o); and

(x) Holdings may declare and pay Dividends on its common stock of up to 6% per annum of the cash proceeds received by or contributed to Holdings in or from the IPO.

 

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7.5 Financial Covenants. For each Fiscal Quarter of Holdings (i) during which any Loans are outstanding on the last day of such Fiscal Quarter or on more than five separate days during such Fiscal Quarter or (ii) the aggregate Stated Amount of undrawn Letters of Credit (except to the extent cash collateralized) exceeds $40,000,000 or there are any Unpaid Drawings in respect of Letters of Credit on the last day of such Fiscal Quarter or for more than five consecutive days during such Fiscal Quarter (each such Fiscal Quarter, a “ Measurement Quarter ”), Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers shall ensure that:

A. Capitalization Ratio . The ratio of (i) Consolidated Total Debt as of the last day of any Measurement Quarter (any such day being a “ Calculation Date ”) to (ii) Consolidated Total Capitalization as of such Calculation Date (such ratio, the “ Capitalization Ratio ”) shall not exceed 0.60:1.00:

B. Consolidated Tangible Net Worth . Consolidated Tangible Net Worth as of any Calculation Date shall not be less than $1,000,655,978 plus the sum of (i) 50% of Consolidated Net Income since December 31, 2012, if positive, plus (ii) 50% of the cash proceeds of any Equity Issuance received by Holdings since December 31, 2012 (with respect to this subclause (ii), (a) the amount of the cash proceeds received by Holdings directly or indirectly from any officer, director or employee of TMHC or any of its Subsidiaries shall be reduced (but not below zero) by the aggregate amount paid by Holdings to directly or indirectly repurchase the Capital Stock of any direct or indirect parent of Holdings from officers, directors or employees of TMHC or any of its Subsidiaries and (b) the cash proceeds of any other Equity Issuance received by Holdings after the Restatement Effective Date during any Test Period shall be reduced (but not below zero) by the aggregate amount paid by Holdings to directly or indirectly repurchase the Capital Stock of any direct or indirect parent of Holdings during such Test Period.

 

7.6 Restriction on Fundamental Changes; Asset Sales.

A. Fundamental Changes. Except as expressly permitted by Section 7.3 (other than clause (xxi) thereof) or Section 7.6B, Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Co-Borrowers will not, nor will they permit any Subsidiary Guarantors to, enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of all or substantially all its business units, assets or other properties, except that:

(i) (x) any Subsidiary of a Co-Borrower or any other Person may be merged, amalgamated or consolidated with or into a Co-Borrower; provided that (a) the applicable Co-Borrower shall be the continuing or surviving corporation or, in the case of a merger, amalgamation or consolidation with or into a Co-Borrower, the Person formed by or surviving any such merger, amalgamation or consolidation (if other than the applicable Co-Borrower) shall be (i) in the case of any such merger, amalgamation or consolidation involving the U.S. Borrower, an entity organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof and (ii) in the case of any such merger, amalgamation or consolidation involving the Canadian Borrower, an entity organized or existing under the laws of Canada or any province or territory thereof (the applicable Co-Borrower or such Person, as the case may be, being herein referred to as the “ Successor Borrower ”), (b) the Successor Borrower shall expressly assume all the obligations of the applicable Co-Borrower under this Agreement and the other Loan

 

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Documents pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Administrative Agent, (c) no Default or Event of Default shall have occurred and be continuing or would result from the consummation of such merger, amalgamation or consolidation, (d) if such merger, amalgamation or consolidation involves a Co-Borrower, Holdings shall be in compliance, on a Pro Forma Basis after giving effect to such merger, amalgamation or consolidation, with the Financial Performance Covenants, as such covenants are recomputed as at the last day of the most recently ended Fiscal Quarter for which Section 6.1 Financials have been delivered as if such merger, amalgamation or consolidation had occurred on the first day of such Test Period (if, on a Pro Forma Basis, such Fiscal Quarter would have been a Measurement Quarter), (e) each Guarantor, unless it is the other party to such merger, amalgamation or consolidation or unless the Successor Borrower is a Co-Borrower, shall have by a supplement to the Guaranty confirmed that its Guaranty shall apply to the Successor Borrower’s obligations under this Agreement, (f) [reserved], (g) [reserved], (h) the Co-Borrowers shall have delivered to the Administrative Agent an officer’s certificate stating that such merger, amalgamation or consolidation and any supplements to this Agreement preserve the enforceability of the Guaranty and (i) if reasonably requested by the Administrative Agent, an opinion of counsel to the effect that such merger, amalgamation or consolidation does not violate this Agreement or any other Loan Document; provided further , that if the foregoing are satisfied, the Successor Borrower (if other than a Co-Borrower) will succeed to, and be substituted for, the applicable Co-Borrower under this Agreement and (y) U.S. FinCo may merge with and into any Subsidiary Guarantor;

(ii) any Subsidiary of U.S. FinCo or a Co-Borrower or any other Person (other than Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo or a Co-Borrower) may be merged, amalgamated or consolidated with or into any one or more Subsidiaries of U.S. FinCo or such Co-Borrower; provided that (a) in the case of any merger, amalgamation or consolidation involving one or more Subsidiary Guarantors, (1) a Subsidiary Guarantor shall be the continuing or surviving corporation or (2) U.S. FinCo or the applicable Co-Borrower shall take all steps necessary to cause the Person formed by or surviving any such merger, amalgamation or consolidation (if other than a Subsidiary Guarantor) to become a Subsidiary Guarantor, (c) [reserved], (d) [reserved], and (e) Holdings shall have delivered to the Administrative Agent an officer’s certificate stating that such merger, amalgamation or consolidation and any supplements to this Agreement preserve the enforceability of the Guaranty;

(iii) Canada Intermediate Holdings may be merged, amalgamated or consolidated with or into the Canadian Borrower; provided that (a) the Canadian Borrower shall be the continuing or surviving corporation or in the case of a merger, amalgamation or consolidation with or into the Canadian Borrower, the Person formed by or surviving any such merger, amalgamation or consolidation (if other than the Canadian Borrower) shall be an entity organized or existing under the laws of Canada or any province or territory thereof (the Canadian Borrower or such Person, as the case may be, being herein referred to as the “ Successor Borrower ”), (b) the Successor Borrower shall expressly assume all the obligations of the Canadian Borrower under this Agreement and the other Loan Documents pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Administrative Agent , (c) no Default or Event of Default shall have occurred and be continuing or would result from the consummation of such merger, amalgamation or consolidation, (d) Holdings shall be in compliance, on a Pro Forma Basis after giving effect

 

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to such merger, amalgamation or consolidation, with the Financial Performance Covenants, as such covenants are recomputed as at the last day of the most recently ended Fiscal Quarter for which Section 6.1 Financials have been delivered as if such merger, amalgamation or consolidation had occurred on the first day of such Test Period (if, on a Pro Forma Basis, such Fiscal Quarter would have been a Measurement Quarter) and (e) the Co-Borrowers shall have delivered to the Administrative Agent an officer’s certificate stating that such merger, amalgamation or consolidation and any supplements to this Agreement preserve the enforceability of the Guaranty;

(iv) Canada Intermediate Holdings may be merged, amalgamated or consolidated with or into any one or more Subsidiaries of Canada Holdings that is a direct or indirect parent of the Canadian Borrower; provided that (a) in the case of any merger, amalgamation or consolidation involving one or more Guarantors, a Guarantor shall be the continuing or surviving corporation or the Person formed by or surviving any such merger, amalgamation or consolidation (if other than a Guarantor) shall execute a supplement to the Guaranty in order for the surviving Person to become a Guarantor for the benefit of the Guaranteed Parties, (b) [reserved], (c) [reserved], and (d) Holdings shall have delivered to the Administrative Agent an officer’s certificate stating that such merger, amalgamation or consolidation and any supplements to this Agreement preserve the enforceability of the Guaranty;

(v) [reserved];

(vi) any Subsidiary Guarantor may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to U.S. FinCo, the U.S. Borrower or any other Subsidiary Guarantor; and

(vii) any Subsidiary Guarantor may liquidate or dissolve if (A) U.S. FinCo or the Co-Borrowers determine in good faith that such liquidation or dissolution is in the best interests of the Co-Borrowers and is not materially disadvantageous to the Lenders and (B) any assets or business not otherwise disposed of or transferred in accordance with Section 7.3 or 7.6A, or, in the case of any such business, discontinued, shall be transferred to, or otherwise owned or conducted by, another Guarantor after giving effect to such liquidation or dissolution.

B. Asset Sales. Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and each Co-Borrower will not, nor will it permit any Subsidiary Guarantor to, directly or indirectly, make any Asset Sale, except that:

(i) [Reserved];

(ii) U.S. FinCo and each Co-Borrower and the Subsidiary Guarantor may sell, lease, assign, convey, transfer or otherwise voluntarily dispose of assets (each a “ Disposition ”) for fair value; provided that (a) no Default or Event of Default shall have occurred and be continuing or would result therefrom, (b) Holdings would be in compliance with the Financial Performance Covenants on a Pro Forma Basis after giving effect thereto as of the last day of the most recent Fiscal Quarter for which Section 6.1 Financials have been or were required to be delivered (if, on a Pro Forma Basis, such Fiscal Quarter would have been a Measurement Quarter) and (c) Holdings would be in compliance with Section

 

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2.4A(iii)(b) on a Pro Forma Basis after giving effect thereto as of the last day of the most recent Test Period for which Section 6.1 Financials have been or were required to be delivered (if, on a Pro Forma Basis, the Capitalization Ratio as of the last day of such Test Period would have resulted in a Borrowing Base Trigger Event);

(iii) Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and each Co-Borrower and each Subsidiary Guarantor may sell, transfer or otherwise dispose of property or assets to U.S. FinCo, a Co-Borrower or to a Subsidiary Guarantor; provided that if the transferor of such property is a Guarantor or a Co-Borrower (a) the transferee thereof must either be a Co-Borrower or a Guarantor or (b) to the extent such transaction constitutes an Investment, such transaction is permitted or not otherwise prohibited under Section 7.3 (other than clause (xxi) thereof);

(iv) Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and each Co-Borrower and the Subsidiary Guarantors may sell, transfer and otherwise dispose of property to the extent that (a) such property is exchanged for credit against the purchase price of similar replacement property or (b) the proceeds of such Disposition are promptly applied to the purchase price of such replacement property;

(v) Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and each Co-Borrower and the Subsidiary Guarantors may sell, transfer and otherwise dispose of Investments in Excluded Subsidiaries or in joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

(vi) Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and each Co-Borrower and the Subsidiary Guarantors may effect any transaction permitted or not otherwise prohibited by Section 7.3 (other than clause (xxi) thereof), 7.4 or 7.6A; and

(vii) Dispositions not otherwise permitted by this Section 7.6B; provided , that the aggregate Fair Market Value of all assets sold, transferred or otherwise disposed of in reliance upon this clause (vii) during any Fiscal Year shall not exceed $25,000,000.

 

7.7 [Reserved].

 

7.8 [Reserved].

 

7.9 Limitation on Debt Payments.

Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and each Co-Borrower will not, and will not allow any Subsidiary Guarantor to, prepay, repurchase or redeem or otherwise defease prior to scheduled maturity any Indebtedness that is subordinated to the Obligations (it being understood that payments of regularly scheduled interest and principal shall be permitted); provided , however , that so long as (i) no Default or Event of Default shall have occurred and be continuing or would result therefrom, (ii) Holdings would be in compliance with the Financial Performance Covenants on a Pro Forma Basis after giving effect thereto as of the last day of the most recent Fiscal Quarter for which Section 6.1 Financials have been or were required to be delivered (if, on a Pro Forma Basis, such Fiscal Quarter would have been a Measurement Quarter) and (iii)

 

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Holdings would be in compliance with Section 2.4A(iii)(b) on a Pro Forma Basis after giving effect thereto as of the last day of the most recent Test Period for which Section 6.1 Financials have been or were required to be delivered (if, on a Pro Forma Basis, the Capitalization Ratio as of the last day of such Test Period would have resulted in a Borrowing Base Trigger Event), Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any Subsidiary Guarantor may prepay, repurchase, redeem or defease such Indebtedness.

SECTION 8.

EVENTS OF DEFAULT

IF any of the following conditions or events (“ Events of Default ”) shall occur:

 

8.1 Failure to Make Payments When Due.

(i) Failure by any Borrower to pay any installment of principal of any Loan when due (including such payments due in accordance with Section 2.4A(iii) hereof), whether at stated maturity, by acceleration, by notice of prepayment or otherwise, or failure by any Borrower to provide cash collateral in respect of any Letter of Credit as and when required by the last paragraph of Section 3.1A, or (ii) failure by any Borrower to pay any interest on any Loan or any fee or any Unpaid Drawing or any other amount (other than an amount referred to in clause (i) above) due under this Agreement or any other Loan Document within five days after the date due therefor; or

 

8.2 Default in Other Agreements.

(a) Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any of the Subsidiary Guarantors shall (i) default in any payment with respect to any Indebtedness (other than (x) any Indebtedness between or among Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any of the Restricted Subsidiaries, (y) any Indebtedness described in Section 8.1 and (z) Non-Recourse Indebtedness (including, for the avoidance of doubt, Non-Recourse Indemnity Guaranties)) in excess of $35,000,000 in the aggregate for Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and such Subsidiary Guarantors, beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist (other than, with respect to Indebtedness consisting of any Hedge Agreements, termination events or equivalent events pursuant to the terms of such Hedge Agreements), the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, any such Indebtedness to become due prior to its stated maturity unless such holder or holders shall have (or through its or their trustee or agent on its or their behalf) waived such default in a writing to the U.S. Borrower; or (b) without limiting the provisions of clause (a) above, any such Indebtedness shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment or as a mandatory prepayment (and, with respect to Indebtedness consisting of any Hedge Agreements, other than due to a termination event or equivalent event pursuant to the terms of such Hedge Agreements), prior to the stated maturity thereof; or

 

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8.3 Breach of Certain Covenants.

Any Loan Party shall (a) default in the due performance or observance by it of any term, covenant or agreement contained in Section 6.1(v) or Section 7 or (b) default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in Section 8.1 or 8.4 or clause (a) of this Section 8.3) contained in this Agreement or any other Loan Document and such default shall continue unremedied for a period of at least 30 days after receipt of written notice by the Borrowers from the Administrative Agent or the Requisite Lenders; or

 

8.4 Breach of Warranty.

Any representation, warranty or statement made or deemed made by any Loan Party herein or in any other Loan Document or any certificate, statement, report or other document delivered or required to be delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or

 

8.5 Bankruptcy, etc.

Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any Subsidiary Guarantor shall commence a voluntary case, proceeding or action concerning itself under the Bankruptcy Code; or an involuntary case, proceeding or action is commenced against Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any Subsidiary Guarantor and the petition is not controverted within 10 days after commencement of the case, proceeding or action; or an involuntary case, proceeding or action is commenced against Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any Subsidiary Guarantor and the petition is not dismissed within 60 days after commencement of the case, proceeding or action; or a custodian (as defined in the Bankruptcy Code), receiver, receiver manager, trustee or similar person is appointed for, or takes charge of, all or substantially all of the property of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any Subsidiary Guarantor; or Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any Subsidiary Guarantor commences any other proceeding or action under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction (including any applicable corporate legislation) whether now or hereafter in effect relating to Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any Subsidiary Guarantor; or there is commenced against Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any Subsidiary Guarantor any such proceeding or action that remains undismissed for a period of 60 days; or Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any Subsidiary Guarantor is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding or action is entered; or Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any Subsidiary Guarantor suffers any appointment of any custodian, receiver, receiver manager, trustee or the like for it or any substantial part of its property to continue undischarged or unstayed for a period of 60 days; or Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any Subsidiary Guarantor makes a general assignment for the benefit of creditors; or any corporate action is taken by Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any Subsidiary Guarantor for the purpose of effecting any of the foregoing; or

 

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8.6 [Reserved].

 

8.7 Judgments and Attachments.

One or more judgments or decrees shall be entered against Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any of the Subsidiary Guarantors involving a liability of $35,000,000 or more in the aggregate for all such judgments and decrees for Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the Subsidiary Guarantors (to the extent not paid or fully covered by insurance provided by a carrier not disputing coverage) and any such judgments or decrees shall not have been satisfied, vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; or

 

8.8 Employee Benefit Plans.

(a) (i) A Plan shall fail to satisfy the minimum funding standard required for any plan year or part thereof or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code; any Plan is or shall have been terminated or is the subject of termination proceedings under ERISA (including the giving of written notice thereof); an event shall have occurred or a condition shall exist in either case entitling the PBGC to terminate any Plan or to appoint a trustee to administer any Plan (including the giving of written notice thereof); any Plan shall have an accumulated funding deficiency (whether or not waived); or any of Holdings, the Co-Borrowers, any of their respective Subsidiaries or any ERISA Affiliate has incurred or is likely to incur a liability to or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code (including the giving of written notice thereof) or (ii) a Foreign Benefit Event shall have occurred or a Foreign Plan that is a Canadian Pension Plan has been or is in the process of being terminated in whole or in part; (b) there could result from any event or events set forth in clause (a) of this Section 8.8 the imposition of a Lien, the granting of a security interest, or a liability, or the reasonable likelihood of incurring a Lien, security interest or liability; and (c) such Lien, security interest or liability will or would be reasonably likely to have a Material Adverse Effect; or

 

8.9 Change in Control.

(a) (i) any Person, or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) (but excluding any employee benefit plan of such Person or “group” and its Subsidiaries and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than the Sponsors and the Management Investors, shall at any time have acquired direct or indirect beneficial ownership (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act) of a percentage of the outstanding Voting Stock of TMHC that exceeds the percentage of such Voting Stock then beneficially owned, in the aggregate, by the Sponsors and the Management Investors and (ii) such person, entity or “group” shall at any time directly or indirectly beneficially own at least 35% of the outstanding Voting Stock of TMHC, unless the Sponsors and the Management Investors have, at such time, the right or the ability by voting power, contract or otherwise to elect or designate for election at least a majority of the Board of Directors of TMHC; and/or (b) at any time a majority of the Board of Directors of TMHC shall not be Continuing Directors; and/or (c) a change of control,

 

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as contemplated by the definitive documentation governing the Senior Unsecured Notes or any other Indebtedness in excess of $35,000,000 in the aggregate, shall have occurred; and/or (d) (i) Holdings shall cease to have direct or indirect ownership of all the Voting Stock of any Co-Borrower or U.S. FinCo, (ii) U.S. Holdings shall cease to have direct or indirect ownership of all the Voting Stock of the U.S. Borrower, (iii) U.S. Holdings shall cease to have direct or indirect ownership of all of the Voting Stock of U.S. FinCo, (iv) Canada Holdings shall cease to have direct or indirect ownership of all the Voting Stock of the Canadian Borrower, (v) the General Partner shall cease to be the general partner of Holdings, (vi) New TMM shall cease to have direct or indirect ownership of all the Voting Stock of Holdings and/or (vii) TMHC shall cease to have direct or indirect ownership of all the Voting Stock of New TMM; provided that none of the fundamental changes permitted by Section 7.6A shall constitute a Change in Control; or

 

8.10 Invalidity of the Guaranty.

The Guaranty or any material provision thereof shall cease to be in full force or effect or any Guarantor thereunder or any Loan Party shall deny or disaffirm in writing any Guarantor’s obligations under the Guaranty; or

 

8.11 [Reserved].

THEN and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent shall, upon the written request of the Requisite Lenders, by written notice to the U.S. Borrower, take any or all of the following actions, without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against the Borrowers, except as otherwise specifically provided for in this Agreement ( provided that, if an Event of Default specified in Section 8.5 shall occur with respect to Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, any of the Co-Borrowers or any Subsidiary Guarantor, the result that would occur upon the giving of written notice by the Administrative Agent as specified in clauses (i), (ii), (iii) and (iv) below shall occur automatically without the giving of any such notice): (i) declare all Commitments terminated and whereupon the Commitments, if any, of each Lender shall forthwith terminate immediately and any fees theretofore accrued shall forthwith become due and payable without any other notice of any kind, (ii) declare the principal of and any accrued interest and fees in respect of all Loans and all Obligations owing hereunder and thereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers; (iii) terminate any Letter of Credit that may be terminated in accordance with its terms; and/or (iv) direct the Borrowers to pay (and the Borrowers agree that upon receipt of such notice, or upon the occurrence of an Event of Default specified in Section 8.5 with respect to Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any Subsidiary Guarantor, it will pay) to the Administrative Agent at the Funding and Payment Office such additional amounts of cash, to be held as security for the Borrowers’ reimbursement obligations for LC Disbursements that may subsequently occur thereunder, equal to the aggregate Stated Amount of all Letters of Credit issued and then outstanding; provided that the foregoing shall not affect in any way the obligations of the Lenders under Section 3.3C(i).

 

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8.12 Borrowers’ Right to Cure.

A. Financial Performance Covenants. Notwithstanding anything to the contrary contained in this Section 8, in the event that the Co-Borrowers fail to comply with the requirements of any Financial Performance Covenant, until the expiration of the 10th day subsequent to the date the certificate calculating the Financial Performance Covenants is required to be delivered for such Fiscal Quarter pursuant to Section 6.1(iii) (the “ Cure Right Expiration Date ”), Holdings (or any direct or indirect parent thereof) shall have the right to issue Permitted Cure Securities for cash or otherwise receive cash contributions to (or in the case of any direct or indirect parent of Holdings, receive equity interests in Holdings for its cash contributions to) the capital of Holdings (collectively, the “ Cure Right ”), and upon contribution by Holdings of such cash to the Co-Borrowers (the “ Cure Amount ”) pursuant to the exercise by the Co-Borrowers of such Cure Right, such Financial Performance Covenants shall be recalculated giving effect to the following pro forma adjustments:

(i) Consolidated Total Capitalization and Consolidated Tangible Net Worth shall each be increased, for the purpose of measuring such Financial Performance Covenants and for all other purposes under this Agreement, by an amount equal to the Cure Amount; and

(ii) if, after giving effect to the foregoing recalculations, the Co-Borrowers shall then be in compliance with the requirements of such Financial Performance Covenants, the Co-Borrowers shall be deemed to have satisfied the requirements of such Financial Performance Covenants as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of such Financial Performance Covenants that had occurred shall be deemed cured for purposes of this Agreement.

B. Limitation on Exercise of Cure Right. Notwithstanding anything herein to the contrary, (i) in each four fiscal-quarter period there shall be at least two fiscal quarters during which the Cure Right is not exercised, (ii) the Cure Right shall not be exercised more than five times during the term of this Agreement, (iii) the Cure Amount shall be no greater than the amount required for purposes of complying with the applicable Financial Performance Covenants, (iv) the Cure Amount shall not constitute “Unrestricted Cash and Cash Equivalents” for purposes of the proviso to the definition of “Consolidated Total Debt” and (v) solely for purposes of calculating Consolidated Total Capitalization and Consolidated Tangible Net Worth in the Financial Performance Covenants, the Cure Amount shall not be deemed to reduce any Indebtedness or other obligations of the Loan Parties that would otherwise be included in the definition of “Consolidated Total Debt” (including if such Cure Amount is used to repay, repurchase, redeem or defease such Indebtedness or other obligations).

C. Notice of Intent to Cure. Upon receipt of a Notice of Intent to Cure prior to the expiration of the Cure Right Expiration Date, the Lenders shall not be permitted to terminate the Commitments or accelerate Loans held by them solely on the basis of a failure to comply with the requirements of the Financial Performance Covenants in respect of the Fiscal Quarter for which the Notice of Intent to Cure has been delivered unless such failure is not cured pursuant to a Cure Right on or prior to the Cure Right Expiration Date (it being understood that any Default or Event of Default that shall have occurred as a result of the failure to comply with such covenants shall exist for all other purposes of the Credit Agreement and the other Loan Documents until such Cure Right is exercised).

 

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SECTION 9.

AGENTS

 

9.1 Appointment.

A. Appointment Authority. Each of the Lenders and the Issuing Banks hereby irrevocably appoints Credit Suisse AG as the Administrative Agent hereunder and under the other Loan Documents and authorizes Credit Suisse AG, in such capacity, to take such actions on its behalf and to exercise such powers as are delegated to Credit Suisse AG, in such capacity, by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The Administrative Agent agrees to act upon the express conditions contained in this Agreement and the other Loan Documents, as applicable. In performing its functions and duties under this Agreement, the Administrative Agent shall act solely as an agent of the Lenders and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any of their Subsidiaries. The provisions of this Section 9 are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Banks, and Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and their Subsidiaries shall not have rights as a third party beneficiary of any of such provisions.

B. [Reserved].

 

9.2 Rights as a Lender.

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any of their Subsidiaries, or any of their respective Affiliates as if such Person was not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

 

9.3 Exculpatory Provisions.

The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent (i) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or an Event of Default has occurred and is continuing, (ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Requisite Lenders (or such other number or percentage of the Lenders as shall be necessary or believed by the Administrative Agent in good faith to be necessary under the circumstances as provided in Section 10.5); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or Applicable Laws, and (iii) shall not, except as expressly set forth herein and in the other Loan

 

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Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to Holdings, any of the Borrowers or any of their respective Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable to the Lenders for any action taken or not taken by it with the consent or at the request of the Requisite Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.5) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall not be deemed to have knowledge of any Default or Event of Default unless and until written notice thereof is given to the Administrative Agent by a Borrower, a Lender or an Issuing Bank. The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Section 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

9.4 Reliance by the Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, posting or other distribution) believed by it in good faith to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it in good faith to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of any Loan or issuance of any Letter of Credit that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Bank, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or such Issuing Bank prior to the making of such Loan or issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for Holdings, any Borrower or their respective Affiliates), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

9.5 Delegation of Duties.

The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by it. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of Section 9.3 shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as the Administrative Agent.

 

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9.6 Resignation of Administrative Agent.

A. Resignation of the Administrative Agent. The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Banks, Holdings and the Borrowers. Additionally, if the Lender then acting as Administrative Agent is a Defaulting Lender, then the Administrative Agent may be removed by the Requisite Lenders or the Co-Borrowers. Upon receipt of any such notice of resignation, the Requisite Lenders shall have the right, with the written consent of Holdings and the Co-Borrowers if no Default or Event of Default shall have occurred and be continuing (such consent not to be unreasonably withheld or delayed), to appoint a successor Administrative Agent which shall be a bank with an office in New York or an Affiliate of any such bank with an office in New York. If no such successor shall have been so appointed by the Requisite Lenders and shall have accepted such appointment within 10 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, with the written consent of Holdings and the Co-Borrowers if no Event of Default under Section 8.1 or 8.5 shall have occurred and be continuing (such consent not to be unreasonably withheld or delayed) on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify Holdings, the Co-Borrowers and the Lenders that no such successor is willing to accept such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent, shall instead be made by or to each Lender or each Issuing Bank directly, until such time as the Requisite Lenders appoint a successor Administrative Agent, as provided for above in this paragraph. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder and under the Loan Documents. The fees payable by Holdings and the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between Holdings, the Borrowers and such successor. After the retiring applicable Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Section 9 and Section 10.2 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken, by any of them while the retiring Administrative Agent was acting in such capacity.

B. [Reserved].

 

9.7 Release of Guarantors.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Administrative Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender except as expressly required by Section 10.5) to execute any documents or instruments, and to take any other action requested by the Co-Borrowers having the effect of releasing any Guaranty of any Subsidiary Guarantor, in each case to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 10.5

 

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9.8 Non-Reliance on Administrative Agent and Other Lenders.

Each Lender and each Issuing Bank acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and each Issuing Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

 

9.9 Duties of Other Named Entities.

To the extent that any Lender is identified in this Agreement as a Joint Lead Arranger or Joint Bookrunner, such Lender shall not have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender.

SECTION 10.

MISCELLANEOUS

 

10.1 Assignments and Participations in Loans.

A. Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that none of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo or any Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender and the Administrative Agent and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of Section 10.1B, (ii) by way of participation in accordance with the provisions of Section 10.1D or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 10.1F (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 10.1D and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Banks and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

B. Assignments by Lenders.

(i) Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans and participations in the Letters of Credit at the time owing to it); provided that

 

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(a) except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment, Loans and participations in the Letters of Credit at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitment, Loans or Letters of Credit subject to each such assignment (determined as of the date the Assignment Agreement with respect to such assignment is delivered to the Administrative Agent) shall not be less than $2,500,000 or an integral multiple of $1,000,000 in excess thereof; provided , that two or more related Approved Funds will be treated as one assignee for purposes of determining compliance with the minimum assignment amount;

(b) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Commitments, Loans or participations in Letters of Credit assigned;

(c) any assignment of a Commitment must be consented to by the Co-Borrowers, the Administrative Agent and each Issuing Bank (in each case, not to be unreasonably withheld, delayed or conditioned); provided , that the consent of the Co-Borrowers shall not be required (i) if such assignment is made to another Lender or an Affiliate of a Lender or (ii) during the continuance of an Event of Default; provided , further , that such consent of the Co-Borrowers shall be deemed to have been given if the Co-Borrowers have not responded within ten Business Days of their receipt of a request for such consent;

(d) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment Agreement and shall pay to the Administrative Agent a processing and recordation fee of $3,500 (which fee may be waived or reduced in the sole discretion of the Administrative Agent); provided , that only one such fee shall be payable in the case of concurrent assignments to Persons that, after giving effect to such assignments, will be Approved Funds or concurrent assignments by Approved Funds to one assignee; and

(e) the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and if required, applicable tax forms.

(ii) Subject to acceptance and recording thereof by the Administrative Agent pursuant to Section 10.1C, from and after the effective date specified in each Assignment Agreement, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment Agreement, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment Agreement, be released from its obligations under this Agreement (and, in the case of an Assignment Agreement covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 2.7 and 10.2 with respect to facts and circumstances occurring prior to the effective date of such assignment. An Eligible Assignee shall not be entitled to receive any greater payment under Section 2.7 than the assigning Lender would have been entitled to receive with respect to the Loan or portion of the Loan assigned to such Eligible Assignee, unless the grant to such Eligible Assignee is made with the Co-Borrowers’ prior written consent. Except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund with respect to a

 

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Lender, any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 10.1D.

C. Acceptance by Administrative Agent; Recordation in the Register. Upon its receipt of an Assignment Agreement executed by an assigning Lender and an assignee representing that it is an Eligible Assignee, together with the processing and recordation fee referred to in Section 10.1B(i)(d) and any forms, certificates or other evidence with respect to United States federal income tax withholding matters that such assignee may be required to deliver to the Administrative Agent pursuant to Section 2.7E(vi), the Administrative Agent shall, if the Administrative Agent and Co-Borrowers have consented to the assignment evidenced thereby (in each case to the extent such consent is required pursuant to Section 10.1B(i)), (a) accept such Assignment Agreement by executing a counterpart thereof as provided therein (which acceptance shall evidence any required consent of the Administrative Agent to such assignment) and (b) record the information contained therein in a register maintained by the Administrative Agent, solely for this purpose as agent of the Co-Borrowers, for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The Administrative Agent shall maintain a copy of each Assignment Agreement delivered to and accepted by it as provided in this Section 10.1C. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this Section 10.1C. The entries in the Register shall be conclusive absent manifest error, and the Co-Borrowers, each Administrative Agent, the Issuing Banks and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.

D. Participations. Any Lender may at any time, without the consent of, or notice to, any Borrower or any Administrative Agent, sell participations to any Person (other than a natural person or Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any of their Subsidiaries, or any of their respective Affiliates) (each, a “ Participant ”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that

(i) such Lender’s obligations under this Agreement shall remain unchanged,

(ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and

(iii) the Borrowers, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver with respect to any action (i) effecting the extension of the final maturity, the scheduled amortization or the date fixed for the payment of interest or fees with respect to the Loan allocated to such participation, (ii) effecting a reduction of

 

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the principal amount of or affecting the rate of interest payable on any Loan or any fee allocated to such participation or (iii) releasing all or substantially all the value of the Guaranty. Subject to Section 10.1E, each Borrower agrees that each Participant shall be entitled to the benefits of Section 2.7 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 10.1B; provided that such Participant agrees to be subject to Section 2.8 as though it were a Lender. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.3 as though it were a Lender; provided such Participant agrees to be subject to Section 10.4 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “ Participant Register ”); provided , however , that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in “registered form” under Section 5f.103-1(c) of the Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

E. Limitations Upon Participant Rights . A Participant shall not be entitled to receive any greater payment under Section 2.7 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrowers’ prior written consent. Without limiting the generality of the foregoing, a Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.7E with respect to U.S. withholding tax unless the Borrowers are notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 2.7E(vi) as though it were a Lender.

F. Certain Pledges. Any Lender may, without the consent of the Administrative Agent or any Borrower, at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. Notwithstanding anything to the contrary contained herein, any Lender that is a Fund, without the consent of the Administrative Agent or any Borrower, may create a security interest in all or any portion of the Loans owing to it and the Notes, if any, held by it to the trustee or other representative for holders of obligations owed, or securities issued, by such Fund as security for such obligations or securities; provided that unless and until such trustee or other representative actually becomes a Lender in compliance with the other provisions of this Section 10.1, (i) no such pledge shall release the pledging Lender from any of its obligations under this Agreement and (ii) such trustee or other representative shall not be entitled to exercise any of the rights of a Lender under this Agreement and the Notes even though such trustee or other representative may have acquired ownership rights with respect to the pledged interest through foreclosure or otherwise.

 

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G. Affiliated Lenders . None of Holdings or any of its Subsidiaries or Affiliates (including the Sponsors) may acquire by assignment, participation or otherwise any right or interest in any of the Commitments hereunder (and any such attempted acquisition shall be null and void).

H. Defaulting Lenders, etc . In the event that any Lender shall become a Defaulting Lender or S&P, Moody’s or Thompson’s BankWatch (or InsuranceWatch Ratings Service, in the case of Lenders that are insurance companies (or Best’s Insurance Reports, if such insurance company is not rated by Insurance Watch Ratings Service)) shall, after the date that any Lender becomes a Lender, downgrade the long-term certificate deposit ratings of such Lender, and the resulting ratings shall be below BBB-, Baa3 and C (or BB, in the case of a Lender that is an insurance company (or B, in the case of an insurance company not rated by InsuranceWatch Ratings Service)) (or, with respect to any Lender that is not rated by any such ratings service or provider, an Issuing Bank shall have reasonably determined that there has occurred a material adverse change in the financial condition of any such Lender, or a material impairment of the ability of any such Lender to perform its obligations hereunder, as compared to such condition or ability as of the date that any such Lender became a Lender) then each of the Issuing Banks shall have the right, but not the obligation, at its own expense, upon notice to such Lender and the Administrative Agent, to replace such Lender with an assignee (in accordance with and subject to the restrictions contained in paragraph B above), and such Lender hereby agrees to transfer and assign without recourse (in accordance with and subject to the restrictions contained in paragraph B above) all its interests, rights and obligations in respect of its Commitment to such assignee; provided , however , that (i) no such assignment shall conflict with any Applicable Law and (ii) the Issuing Banks or such assignee, as the case may be, shall pay to such Lender in immediately available funds on the date of such assignment the principal of and interest accrued to the date of payment on the Loans made by such Lender hereunder and all other amounts accrued for such Lender’s account or owed to it hereunder.

I. Certain Taxes . Any Other Taxes imposed in respect of an assignment or participation (other than an assignment pursuant to Section 2.8B) shall be the responsibility of either the assigning Lender or the assignee in the case of an assignment or the Lender or the Participant in the case of a participation but, for the avoidance of doubt, shall not be the responsibility of the Co-Borrowers.

 

10.2 Expenses; Indemnity; Damage Waiver.

A. Costs and Expenses. Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and each Borrower shall, jointly and severally, pay (i) all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent, the Arrangers or any of their respective Affiliates, including the reasonable fees, charges and disbursements of counsel for such Persons, in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated); (ii) all reasonable out-of-pocket expenses incurred by any Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder; and (iii) all out-of-pocket expenses incurred by the Administrative Agent, any Lender or any Issuing Bank, including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or any Issuing Bank, in connection with the enforcement or protection of its rights in connection with this Agreement and the other Loan Documents, including its rights under this Section 10.2A, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

 

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B. Indemnification. Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and each Borrower shall, jointly and severally, indemnify the Arrangers, the Administrative Agent (and any sub-Agent thereof), each Issuing Bank, each Lender and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the reasonable fees, charges and disbursements of any counsel for any Indemnitee (but limited, in the case of legal fees and expenses, to the reasonable and documented out-of-pocket fees, disbursements and other charges of one counsel for all Indemnitees taken as a whole in each relevant jurisdiction, and solely in the case of a conflict of interest, one additional counsel in each jurisdiction relevant to each group of affected Indemnitees similarly situated, taken as a whole) incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions, (ii) any Loan, Letter of Credit or use of the proceeds therefrom by any Loan Party or any of its Subsidiaries, (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by Holdings or any of its Subsidiaries, or any Environmental Claim or Environmental Liability related in any way to Holdings or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto or whether such claim, litigation, investigation or proceeding is brought by a third party or by Holdings or any Borrower or any of their Affiliates; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (A) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of any Indemnitee or its Related Parties, (B) are determined by a court of competent jurisdiction by final and nonappealable judgment to have arisen from a material breach of the obligations of such Indemnitee or its Related Parties under the Loan Documents, (C) arise from disputes solely among the Indemnitees other than claims against an Indemnitee in its capacity or in fulfilling its role as an Administrative Agent, Arranger, Issuing Bank or other similar role under this Agreement and other than claims arising out of any act or omission of the Co-Borrowers or any of their affiliates or (D) arise from settlement of any claim, litigation, investigation or proceeding effected without the consent of the Co-Borrowers, which consent shall not be unreasonably withheld or delayed ( provided that such indemnity shall, as to any Indemnitee, be available in respect of losses, claims, damages, liabilities or related expenses arising from any such settlement in the event that (i) the Co-Borrowers were offered the ability to assume the defense of the claim, litigation, investigation or proceeding that was the subject matter of such settlement and elected not to so assume or (ii) such settlement is entered into more than 45 days after receipt by the Co-Borrowers of a request by such Indemnitee for reimbursement of its legal or other expenses incurred in connection with such claim, litigation, investigation or proceeding and the Co-Borrowers not having reimbursed such Indemnitee in accordance with such request prior to the date of such settlement).

C. Reimbursement by the Lenders. To the extent that Holdings or any Borrower fails to pay any amount required under Section 10.2A or 10.2B to be paid by it to the Administrative Agent (or any sub-Agent thereof), any Issuing Bank or any Related Party of any of the foregoing (and without limiting their obligation to do so), each Lender severally agrees to pay to the Agent (or any

 

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such sub-Agent), any Issuing Bank or such Related Party, as the case may be, such Lender’s Pro Rata Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-Agent) or such Issuing Bank in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-Agent) or such Issuing Bank in connection with such capacity. The obligations of the Lenders under this Section 10.2C are subject to the provisions of Section 10.12.

D. Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, no party hereto shall assert, and they each hereby waive, any claim against all other parties hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof; provided that nothing contained in this Section 10.2D shall limit the indemnity and reimbursements obligations set forth in Section 10.2B hereof. No Indemnitee referred to in Section 10.2B above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby, unless such damages are directly caused by the bad faith, gross negligence or willful misconduct of such Indemnitee as determined by a court of competent jurisdiction by final and nonappealable judgment.

E. Payments. All amounts due under this Section 10.2 shall be payable promptly after demand therefor.

10.3 Right of Set-Off.

Without limitation of any other rights of the Administrative Agent, the Lenders or the Issuing Banks, if an Event of Default shall have occurred and be continuing, the Administrative Agent, each Lender, each Issuing Bank and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, upon any Obligation becoming due and payable hereunder to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by the Administrative Agent, Lender, Issuing Bank or any such Affiliate to or for the credit or the account of any Loan Party against any and all of such Obligations, irrespective of whether or not the Administrative Agent, Lender or Issuing Bank shall have made any demand under this Agreement or any other Loan Document and although such Obligations are owed to a branch or office of the Administrative Agent, Lender or Issuing Bank different from the branch or office holding such deposit or obligated on such indebtedness. The rights of the Administrative Agent, Lender, Issuing Bank and their respective Affiliates under this Section 10.3 are in addition to other rights and remedies (including other rights of setoff) which the Administrative Agent, Lender, Issuing Bank or their respective Affiliates may have. Each Agent, Lender and Issuing Bank agrees promptly to notify the Borrowers and the Administrative Agent after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

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10.4 Sharing of Payments by Lenders.

If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its Pro Rata Share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify each Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, to the end that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to (x) any payment made by Holdings or any Borrower pursuant to and in accordance with the express terms of this Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or Participant, other than to Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any of their respective Subsidiaries (as to which the provisions of this paragraph shall apply). Each of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and the Borrowers consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each of Holdings and the Borrowers rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of Holdings or any Borrower, as the case may be, in the amount of such participation.

10.5 Amendments and Waivers.

A. Amendment and Waivers. No amendment, modification, termination or waiver of any provision of this Agreement or of the Notes, or consent to any departure by any Co-Borrower or any other Loan Party therefrom, shall in any event be effective without the written concurrence of the Requisite Lenders; provided that any such amendment, modification, termination, waiver or consent which: (a) reduces or forgives the principal amount of any of the Loans; (b) reduces the percentage specified in the definition of the “Requisite Lenders” or “Requisite Class Lender” (it being understood that, with the consent of the Requisite Lenders, additional extensions of credit pursuant to this Agreement may be included in the definition of the “Requisite Lenders” on substantially the same basis as the Commitments are included on the Restatement Effective Date); (c) changes in any manner any provision of this Agreement which, by its terms, expressly requires the approval or concurrence of all the Lenders; (d) postpones the scheduled final maturity date of any of the Loans; (e) postpones the date or reduces the amount of any scheduled payment (but not prepayment) of principal of any of the Loans or of any scheduled reduction or termination of the Commitments; (f) postpones the date on which any interest or any fees are payable; (g) decreases the interest rate borne by any of the Loans (other than any waiver of any increase in the interest rate applicable to any of the Loans pursuant to Section 2.2E) or the amount of any fees payable hereunder; it being understood that any amendment to the definition of “Capitalization Ratio” will not constitute a reduction in the Facility Fee or Applicable Margin for purpose of this clause (g); (h) increases the maximum duration of Interest Periods permitted hereunder; (i) [reserved]; (j) releases of all or substantially all the value of the Guaranty; (k) amends the definition of “Pro Rata Shares”; or (l) changes in any manner the

 

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provisions contained in Sections 2.4B, 2.4C(iii), 8.1 or 10.4, or this Section 10.5 shall be effective only if evidenced by a writing signed by or on behalf of all the Lenders to whom Obligations are owed or who have Commitments outstanding being directly affected by such amendment, modification, termination, waiver or consent (the consent of the Requisite Lenders not being required for any such change); provided further that any amendment, modification, termination, waiver or consent which amends or modifies the definition of “Approved Fund,” “Eligible Assignee,” or “Fund,” or Section 10.1 to the extent further restricting assignments, shall be effective only if evidenced by a written consent of the Requisite Lenders and the Administrative Agent. In addition, (i) [reserved], (ii) no amendment, modification, termination or waiver of any provision of any Note shall be effective without the written concurrence of the Lender which is the holder of that Note, (iii) no increase in the Commitments of any Lender over the amount thereof then in effect shall be effective without the written concurrence of that Lender, it being understood and agreed that in no event shall waivers or modifications of conditions precedent, covenants, Defaults, Events of Default or of a mandatory prepayment or a reduction of any or all of the Commitments be deemed to constitute an increase of the Commitment of any Lender and that an increase in the available portion of any Commitment of any Lender shall not be deemed to constitute an increase in the Commitment of such Lender, (iv) [reserved], (v) no amendment, modification, termination or waiver of any provision of Section 3, this Section 10.5 or any other provision of this Agreement relating to the rights or obligations of an Issuing Bank shall be effective without the written concurrence of such Issuing Bank, (vi) no amendment, modification, termination or waiver of any provision of Section 9 or of any other provision of this Agreement which, by its terms, expressly requires the approval or concurrence of the Administrative Agent shall be effective without the written concurrence of the Administrative Agent and (vii) [reserved]. The Administrative Agent may, but shall have no obligation to, with the concurrence of any Lender, execute amendments, modifications, waivers or consents on behalf of that Lender and no amendment, modification, termination or waiver which has the effect of changing any payment, voluntary or mandatory prepayments or Commitment reductions applicable to any Class (the “ Affected Class ”) in a manner that disproportionately disadvantages such Class relative to the other Class shall be effective without the written concurrence of the Requisite Class Lenders of the Affected Class (it being understood and agreed that any amendment, modification, termination or waiver of any such provision which only postpones or reduces any voluntary or mandatory prepayment or Commitment reduction from those set forth in Section 2.4 with respect to one Class but not the other Classes shall be deemed to disproportionately disadvantage such one Class but not to disproportionately disadvantage such other Classes for purposes of this clause). Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on the Borrowers in any case shall entitle the Borrowers to any other or further notice or demand in similar or other circumstances. Any amendment, modification, termination, waiver or consent effected in accordance with this Section 10.5 shall be binding upon each Lender at the time outstanding, each future Lender and, if signed by the Borrowers, on the Borrowers and Holdings.

Notwithstanding anything in this Section 10.5A to the contrary, this Agreement and the other Loan Documents may be amended (or amended and restated) (i) with the written approval of the Administrative Agent, Holdings and the lenders of the additional Commitments incurred pursuant to Section 2.1A(iii) to implement the additional Commitments incurred pursuant to and in accordance with Section 2.1A(iii), (ii) with the written approval of the Administrative Agent, Holdings and the Accepting Lenders to implement any Loan Modification Offer that becomes effective pursuant to and in accordance with Section 2.9 or (iii) with the written approval of the Administrative Agent and Holdings to cure any ambiguity, omission, defect or inconsistency so long as the Lenders shall have received at least five (5) Business Days prior written notice thereof and the Administrative Agent

 

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shall not have received, within five (5) Business Days of the date of such notice to the Lenders, a written notice from (x) the Required Lenders stating that the Required Lenders object to such amendment or (y) if affected by such amendment, any Issuing Bank stating that it objects to such amendment.

B. Non-Consenting Lenders. Each Lender grants (x) to the Administrative Agent the right to purchase all (but not less than all) of such Lender’s Commitments and Loans owing to it and the Notes held by it and all of its rights and obligations hereunder and under the other Loan Documents, and (y) to the Borrowers the right to cause an assignment of all (but not less than all) of such Lender’s Commitments and Loans owing to it, its participations in the Notes held by it and all of its rights and obligations hereunder and under the other Loan Documents to Eligible Assignees, which right may be exercised by the Administrative Agent or the Borrowers, as the case may be, if such Lender (a “ Non-Consenting Lender ”) refuses to execute any amendment, waiver or consent which requires the written consent of Lenders other than Requisite Lenders (including such Non-Consenting Lender) and to which Requisite Lenders, the Administrative Agent and the Borrowers have otherwise agreed; provided that (i) the Administrative Agent shall waive, or the Borrowers or the Eligible Assignee shall pay, as the case may be, any required assignment fee, and such Non-Consenting Lender shall receive, in connection with such assignments, payment equal to the aggregate amount of outstanding Loans owed to such Lender (together with all accrued and unpaid interest, fees and other amounts (other than contingent indemnity obligations not then due and payable), including amounts owed under Section 2.6D, owed to such Lender); and (ii) no such assignment shall conflict with any Applicable Law. Each Lender agrees that if the Administrative Agent or the Borrowers, as the case may be, exercise their option hereunder, they shall promptly execute and deliver all agreements and documentation necessary to effectuate such assignment as set forth in Section 10.1. The Administrative Agent shall be entitled (but not obligated) to execute and deliver such agreement and documentation on behalf of such Non-Consenting Lender and any such agreement and/or documentation so executed by the Administrative Agent shall be effective for purposes of documenting an assignment pursuant to Section 10.1.

10.6 Independence of Covenants.

All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another such covenant shall not avoid the occurrence of a Default or Event of Default if such action is taken or condition exists.

10.7 Notices.

A. Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in Section 10.7B below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows: (i) if to any Borrower, Holdings or any Subsidiary of Holdings, to the U.S. Borrower at 4900 N. Scottsdale Road, Suite 2000, Scottsdale, AZ 85251, attention: Darrell C. Sherman (Facsimile No. 1-866-390-2612; Telephone No. (480) 840-8113); (ii) if to the Administrative Agent or to Credit Suisse AG at Credit Suisse AG, Eleven Madison Avenue, New York, NY 10010, attention of Agency Group (Facsimile No. (212) 322-2291; Telephone No. (919) 994-6001); and (iii) if to a Lender, to it at its address (or facsimile number) set forth in its Administrative Questionnaire. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been

 

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given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices delivered through electronic communications, to the extent provided in Section 10.7B below, shall be effective as provided in said Section 10.7B.

B. Electronic Communications. Notices and other communications to the Lenders and the applicable Issuing Bank hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender or any Issuing Bank pursuant to Section 2.1 and Section 3, as the case may be, if such Lender or such Issuing Bank, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Section by electronic communication. The Administrative Agent or each Borrower may, in their discretion, agree to accept notices and other communications to them hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgment); provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

C. Change of Address, Etc. Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

10.8 Survival of Representations, Warranties and Agreements.

A. All representations, warranties and agreements made herein shall survive the execution and delivery of this Agreement and the making of the Loans and the issuance of the Letters of Credit hereunder.

B. Notwithstanding anything in this Agreement or implied by law to the contrary, the agreements of Holdings and each Borrower set forth in Sections 2.6D, 2.7, 10.2, 10.3 and 10.18 and the agreements of the Lenders set forth in Sections 9.2, 9.3, 9.4, 10.2C, 10.3, 10.4 and 10.19 shall survive the payment of the Loans, the cancellation or expiration of the Letters of Credit and the reimbursement of any amounts drawn or paid thereunder, and the termination of this Agreement.

10.9 Failure or Indulgence Not Waiver; Remedies Cumulative.

No failure or delay on the part of the Administrative Agent or any Lender in the exercise of any power, right or privilege hereunder or under any other Loan Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege. All rights and remedies existing under this Agreement and the other Loan Documents are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

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10.10 Marshalling; Payments Set Aside.

Neither the Administrative Agent nor any Lender shall be under any obligation to marshal any assets in favor of the Borrowers, any other Loan Party or any other party or against or in payment of any or all of the Obligations. To the extent that any Borrower or any other Loan Party makes a payment or payments to the Administrative Agent or the Lenders (or to the Administrative Agent for the benefit of the Lenders), or the Administrative Agent or the Lenders enforce any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, any other state, provincial or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred.

10.11 Severability.

In case any provision in or obligation under this Agreement or the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

10.12 Obligations Several; Independent Nature of the Lenders’ Rights.

The obligations of the Lenders and the Issuing Banks hereunder are several and no Lender or Issuing Bank shall be responsible for the obligations or Commitments of any other Lender or Issuing Bank hereunder. Nothing contained herein or in any other Loan Document, and no action taken by the Lenders and the Issuing Banks pursuant hereto or thereto, shall be deemed to constitute the Lenders and the Issuing Banks as a partnership, an association, a joint venture or any other kind of entity. The amounts payable at any time hereunder to each Lender and each Issuing Bank shall be a separate and independent debt, and each Lender and each Issuing Bank shall be entitled to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any other Lender or other Issuing Bank to be joined as an additional party in any proceeding for such purpose.

10.13 Maximum Amount.

A. It is the intention of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo the Borrowers, each Issuing Bank and the Lenders to conform strictly to the usury and similar laws relating to interest from time to time in force (including the relevant provisions of the Criminal Code (Canada)), and all agreements between the Loan Parties and their respective Subsidiaries and the Lenders and Issuing Bank, whether now existing or hereafter arising and whether oral or written, are hereby expressly limited so that in no contingency or event whatsoever, whether by acceleration of maturity hereof or otherwise, shall the amount paid or agreed to be paid in the aggregate to the Lenders as interest (whether or not designated as interest, and including any amount otherwise designated but deemed to constitute interest by a court of competent

 

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jurisdiction) hereunder or under the other Loan Documents or in any other agreement given to secure the Indebtedness or obligations of the Borrowers to the Lenders, or in any other document evidencing, securing or pertaining to the Indebtedness evidenced hereby, exceed the maximum amount permissible under applicable usury or such other laws (the “ Maximum Amount ”). If under any circumstances whatsoever fulfillment of any provision hereof, or any of the other Loan Documents, at the time performance of such provision shall be due, shall involve exceeding the Maximum Amount, then, ipso facto, the obligation to be fulfilled shall be reduced to the Maximum Amount (in the case of any such reduction for the purpose of complying with the Criminal Code (Canada), first by reducing the amount or rate of interest and second by reducing any fees, commissions, costs, expenses, premiums and other amounts which would constitute “interest” for purposes of section 347 thereof). For the purposes of calculating the actual amount of interest paid and/or payable hereunder in respect of laws pertaining to usury or such other laws, all sums paid or agreed to be paid to the holder hereof for the use, forbearance or detention of the Indebtedness of the Borrowers evidenced hereby, outstanding from time to time shall, to the extent permitted by Applicable Law, be amortized, pro-rated, allocated and spread from the date of disbursement of the proceeds of the Notes until payment in full of all of such Indebtedness, so that the actual rate of interest on account of such Indebtedness is uniform through the term hereof. The terms and provisions of this Section shall control and supersede every other provision of all agreements between the Borrowers or any endorser of the Notes and the Lenders and Issuing Bank.

B. If under any circumstances any Lender or Issuing Bank shall ever receive an amount which would exceed the Maximum Amount, such amount shall be treated as a voluntary prepayment under Section 2.4A(i) and shall be so applied in accordance with Section 2.4, hereof or if such excessive interest exceeds the unpaid balance of the Loans and any other Indebtedness of any Borrower in favor of such Lender or Issuing Bank, the excess shall be deemed to have been a payment made by mistake and shall be refunded to the Borrowers.

10.14 Headings.

Section and Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.

10.15 Applicable Law.

THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

10.16 Successors and Assigns.

This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of the Lenders (it being understood that the Lenders’ rights of assignment are subject to Section 10.1). None of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo or any Borrower’s rights or obligations hereunder or any interest therein may be assigned or delegated by Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo or any Borrower without the prior written consent of all Lenders.

 

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10.17 Consent to Jurisdiction and Service of Process.

A. SUBMISSION TO JURISDICTION. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT SITTING IN THE BOROUGH OF MANHATTAN, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ONLY IN SUCH FEDERAL COURT (EXCEPT THAT IN THE CASE OF ANY BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDINGS WITH RESPECT TO ANY LOAN PARTY, ACTIONS OR PROCEEDINGS RELATED TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN SUCH COURT HOLDING SUCH BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDINGS). EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ANY AGENT, ANY LENDER OR ANY ISSUING BANK MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST HOLDINGS, CANADA HOLDINGS, U.S. HOLDINGS, CANADA INTERMEDIATE HOLDINGS, U.S. FINCO, A CO-BORROWER OR THEIR RESPECTIVE PROPERTIES IN THE COURTS OF ANY JURISDICTION. IT IS UNDERSTOOD BY THE PARTIES THAT THE FOREGOING SHALL NOT APPLY TO ANY BANKRUPTCY, INSOLVENCY OR SIMILAR LAW OR ANY PROCEEDING THEREUNDER.

B. WAIVER OF VENUE. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN SECTION 10.17A. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

C. Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 10.7. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by Applicable Law. Each of Canadian Borrower, Canada Holdings and Canada Intermediate Holdings irrevocably designates and appoints U.S. Borrower (in such capacity, the “ Process Agent ”) as its authorized agent upon which process may be served. Each of Canadian Borrower, Canada Holdings and Canada Intermediate Holdings hereby agrees that service of any process by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile to the Process Agent shall be effective service of process.

 

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10.18 Waiver of Jury Trial.

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON PARTY HERETO HAS REPRESENTED TO SUCH PARTY, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.19 Confidentiality.

The Administrative Agent, each Lender and each Issuing Bank agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to it, its Affiliates’ and their respective partners, directors, officers, employees, advisors, representatives and numbering, administration and settlement service providers (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential as provided herein), (b) to the extent requested by any regulatory authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by Applicable Laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section 10.19, to (i) any assignee or pledgee of or Participant in, or any prospective assignee or pledgee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and their respective obligations, (g) with the consent of the Co-Borrowers (such consent not to be unreasonably withheld or delayed), (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section 10.19 or (y) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than a Loan Party or its Affiliates or (i) on a confidential basis to any nationally recognized rating agency that requires access to information about a Lender’s investment portfolio in connection with ratings issued with respect to such Lender. In addition, the Administrative Agent, the Lenders and the Issuing Banks may disclose the existence of this Agreement and information about this Agreement to market data collectors, providers of similar services to the lending industry and service providers to the Administrative Agent in connection with the administration and management of this Agreement and the other Loan Documents. Notwithstanding anything in this Section 10.19 to the contrary, to the extent the

 

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Administrative Agent or Lender discloses Information pursuant to any provision of this Section 10.19, it shall (v) use good faith efforts to do so in such a manner as would be reasonably likely to maintain the confidentiality thereof, and (w) in the case of disclosures outside the ordinary course pursuant to clauses (b) or (c) above (it being understood that disclosures pursuant to clause (b) above in connection with bank or audit exams are in the ordinary course), to the extent practicable (following the exercise of commercially reasonable efforts) and not prohibited by Applicable Law, notify the Co-Borrowers of such proposed disclosure as far in advance of such disclosure as practicable and, at the request of the Co-Borrowers and the expense of the Administrative Agent or such Lender, use commercially reasonable efforts to ensure that any Information so disclosed is accorded confidential treatment.

For purposes of this Section 10.19, “ Information ” means all written information received from Holdings or any of its Subsidiaries or any of their respective Affiliates relating to Holdings or any of its Subsidiaries or any of their respective businesses, which to the extent received on or after the Initial Effective Date, is identified as confidential by the Co-Borrowers or Holdings. Any Person required to maintain the confidentiality of Information as provided in this Section 10.19 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

Each Lender acknowledges that Information furnished to it pursuant to this Agreement may include material non-public information concerning the Loan Parties and their respective Related Parties or their respective securities, and confirms that it has developed compliance procedures regarding the use of material non-public information and that it will handle such material non-public information in accordance with those procedures and Applicable Law, including Federal and state securities laws.

All Information, including requests for waivers and amendments, furnished by Holdings, the Co-Borrowers or the Administrative Agent pursuant to, or in the course of administering, this Agreement will be syndicate-level Information, which may contain material non-public information about the Loan Parties and their respective Related Parties or their respective securities. Accordingly, each Lender represents to Holdings, the Borrowers and the Administrative Agent that it has identified in its Administrative Questionnaire a credit contact who may receive Information that may contain material non-public information in accordance with its compliance procedures and Applicable Law.

10.20 Integration; Effectiveness; Electronic Execution.

A. Integration; Effectiveness. This Agreement and the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent or the Arrangers constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective as provided in the Amendment Agreement.

B. Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment Agreement shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

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10.21 USA Patriot Act Notification.

The following notification is provided to the Loan Parties pursuant to Section 326 of the USA PATRIOT Act:

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT.

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person or entity that opens an account, including any deposit account, treasury management account, loan, other extension of credit, or other financial services product.

What this means for any Loan Party: When a Loan Party opens an account, if the Loan Party is an individual, the Administrative Agent, the Issuing Banks and the Lenders will ask for the Loan Party’s name, residential address, tax identification number, date of birth, and other information that will allow the Administrative Agent, the Issuing Banks and the Lenders to identify the Loan Party, and, if the Loan Party is not an individual, the Administrative Agent, the Issuing Banks and the Lenders will ask for the Loan Party’s name, tax identification number, business address, and other information that will allow the Administrative Agent, the Issuing Banks and the Lenders to identify the Loan Party. The Administrative Agent, the Issuing Banks and the Lenders may also ask, if the Loan Party is an individual, to see the Loan Party’s driver’s license or other identifying documents, and, if the Loan Party is not an individual, to see the Loan Party’s legal organizational documents or other identifying documents.

The Administrative Agent, the Issuing Banks and the Lenders may also be required to obtain, verify and record similar information under other applicable anti-money laundering laws, rules and regulations, including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada).

10.22 Agency of the U.S. Borrower for each other Loan Party.

Each of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, the Canadian Borrower, U.S. FinCo and the other Loan Parties appoints the U.S. Borrower as its agent for all purposes relevant to this Agreement and the other Loan Documents, including the giving and receipt of notices and the execution and delivery of all documents, instruments and certificates contemplated herein and therein and all modifications hereto and thereto.

10.23 No Fiduciary Duties.

In connection with all aspects of each transaction contemplated hereby, Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo and each of the Borrowers acknowledge and agree that: (a) the extensions of credit provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment,

 

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waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the other Loan Parties and their respective Affiliates, on the one hand, and the Administrative Agent, the Arrangers and the Lenders, on the other hand, and Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the other Loan Parties are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (b) in connection with the process leading to such transaction, the Administrative Agent, each Arranger and each Lender is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for any of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers, any other Loan Party or any of their respective Affiliates, stockholders, creditors or employees or any other person; (c) none of the Administrative Agent, any Arranger or any Lender has assumed or will assume an advisory, agency or fiduciary responsibility in favor of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any other Loan Party with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent, any Arranger or any Lender has advised or is currently advising Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers or any other Loan Party or their respective Affiliates on other matters) and none of the Administrative Agent, any Arranger or any Lender has any obligation to any of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers, the other Loan Parties or their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (d) the Administrative Agent, the Arrangers, the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the other Loan Parties and their respective Affiliates, and none of the Administrative Agent, any Arranger or any Lender has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (e) the Administrative Agent, the Arrangers and the Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers and the other Loan Parties have consulted their own legal, accounting, regulatory and tax advisors to the extent they deemed appropriate. Holdings, U.S. Holdings, Canada Holdings, Canada Intermediate Holdings, U.S. FinCo, the Co-Borrowers, the other Loan Parties and their respective Affiliates each hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent, the Arrangers and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty.

10.24 Judgment Currency.

The obligations of the Borrowers and the other Loan Parties hereunder and under the other Loan Documents to make payments in Dollars or in Canadian Dollars, as the case may be (each, an “ Obligation Currency ”) shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the applicable Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the Administrative Agent or an Issuing Bank of the full amount of the Obligation Currency expressed to

 

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be payable to the Administrative Agent or such Issuing Bank under this Agreement or the other Loan Documents. If, for the purpose of obtaining or enforcing judgment against any Borrower or any other Loan Party or in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the applicable Obligation Currency (such currency being hereinafter referred to as the “ Judgment Currency ”) an amount due in the applicable Obligation Currency, the conversion shall be made, as the case may be, at the Canadian Dollar Equivalent or U.S. Dollar Equivalent determined, in each case, as of the Business Day immediately preceding the day on which the judgment is given (such Business Day being hereinafter referred to as the “ Judgment Currency Conversion Date ”).

If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, the Borrowers covenant and agree to pay, or cause to be paid, as a separate obligation and notwithstanding any judgment, such additional amounts, if any (but in any event not a lesser amount), as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the applicable Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate of exchange prevailing on the Judgment Currency Conversion Date.

For purposes of determining the Canadian Dollar Equivalent or U.S. Dollar Equivalent or rate of exchange for this Section 10.24, such amounts shall include any premium and costs payable in connection with the purchase of the applicable Obligation Currency.

10.25 Additional Borrowing Subsidiaries.

A. Each Co-Borrower may designate any of its wholly-owned Restricted Subsidiaries organized under the laws of the United States, Canada or any state or province thereof as a Borrower under the Commitments; provided that the Administrative Agent shall have received, at least five Business Days prior to the date on which such Person is proposed to become a Borrower hereunder, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including to the extent applicable, the USA PATRIOT Act and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada). Upon the receipt by the Administrative Agent of a Borrowing Subsidiary Agreement in substantially the form of Exhibit IX annexed hereto executed by such Subsidiary of a Co-Borrower such Subsidiary shall become a Borrower and a party to this Agreement. A Person shall cease to be a Borrower hereunder at such time as no Loans, fees or any other amounts due in connection therewith pursuant to the terms hereof shall be outstanding by such Person, no Letters of Credit issued for the account of such Person shall be outstanding and such Person and its parent Borrower shall have executed and delivered to the Administrative Agent a Borrowing Subsidiary Termination in substantially the form of Exhibit X annexed hereto.

B. Notwithstanding the foregoing, no Person shall be added as a Borrower hereunder pursuant to this Section 10.25 unless (i) on the effective date of such addition, the conditions set forth in Section 4 shall be satisfied and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Responsible Officer of the applicable potential Borrower or Borrowers and (ii) except as otherwise specified in the applicable Borrowing Subsidiary Agreement, the Administrative Agent shall have received legal opinions, board resolutions and other closing certificates reasonably requested by the Administrative Agent and consistent with those delivered on the Restatement Effective Date.

 

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10.26 Effect of Certain Inaccuracies.

In the event that any financial statement or officer’s certificate delivered pursuant to Section 6.1(i) or (ii) and Section 6.1(iii), respectively, is inaccurate, and such inaccuracy is discovered prior to the earlier of (a) the first anniversary of the delivery of such financial statement or officer’s certificate and (b) the date on which all the Commitments hereunder terminate and, if corrected, would have led to the application of a higher Applicable Margin or a higher Facility Fee Rate for any period (an “ Applicable Period ”) than the Applicable Percentage or Facility Fee Rate applied for such Applicable Period, then (i) the Borrowers shall promptly deliver to the Administrative Agent a corrected financial statement and a corrected officer’s certificate for such Applicable Period, (ii) the Applicable Margin and the Facility Fee Rate shall be determined based on the corrected officer’s certificate for such Applicable Period, and (iii) the Borrower shall promptly pay to the Administrative Agent (for the accounts of the applicable Lenders during the Applicable Period or their successors and assigns) the accrued additional interest or additional Facility Fees (or both) owing as a result of such increased Applicable Margin or Facility Fee Rate for such Applicable Period. This Section 10.26 shall not limit the rights of the Administrative Agent or the Lenders with respect to Section 2.2E or Section 8.

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