Exhibit 10.1

EXECUTION VERSION

 

 

364-DAY CREDIT AGREEMENT

dated as of

October 2, 2018

Among

TAYLOR MORRISON COMMUNITIES, INC.,

as the Borrower

TMM HOLDINGS LIMITED PARTNERSHIP,

as Holdings

TAYLOR MORRISON HOLDINGS II, INC.,

as Canada Holdings

TAYLOR MORRISON HOLDINGS, INC.,

as U.S. Holdings

TAYLOR MORRISON FINANCE, INC.

as U.S. FinCo

THE LENDERS PARTY HERETO,

as Lenders

and

CITIBANK, N.A.,

as Administrative Agent

 

 

CITIBANK, N.A.,

as Sole Lead Arranger and Sole Bookrunner

$200,000,000 364-DAY TERM LOAN CREDIT FACILITY

 

 

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TABLE OF CONTENTS

 

         Page   SECTION 1.    DEFINITIONS      1   1.1   Certain Defined Terms
     1   1.2   Defined Terms; Accounting Terms; Utilization of GAAP for Purposes
of Calculations Under Agreement      38   SECTION 2.    AMOUNTS AND TERMS OF
COMMITMENTS AND LOANS      38   2.1   Commitments; Loans      38   2.2  
Interest on the Loans      40   2.3   Fees      43   2.4   Repayments and
Prepayments; General Provisions Regarding Payments      44   2.5   Use of
Proceeds      46   2.6   Special Provisions Governing Eurodollar Rate Loans     
47   2.7   Increased Costs; Taxes      49   2.8   Mitigation Obligations;
Replacement of Lenders      52   SECTION 3.    [RESERVED]      54   SECTION 4.
   CONDITIONS      54   4.1   Conditions to Effectiveness      54   4.2  
Conditions to Making of Loans on Closing Date      55   SECTION 5.   
REPRESENTATIONS AND WARRANTIES      57   5.1   Corporate Status; Corporate Power
and Authority; Enforceability; Subsidiaries      58   5.2   No Violation;
Governmental Approvals      58   5.3   Financial Statements      59   5.4   No
Material Adverse Change      59   5.5   Title to Properties; Liens; Intellectual
Property      59   5.6   Litigation; Compliance with Laws      60   5.7  
Payment of Taxes      60   5.8   Governmental Regulation      60   5.9  
Compliance with ERISA and Similar Applicable Law      60   5.10   Environmental
Matters      61   5.11   Employee Matters      62  

 

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5.12   Solvency   62 5.13   [Reserved]   62 5.14   True and Complete Disclosure
  62 5.15   Anti-Corruption Laws; Sanctions   62 5.16   Insurance   63 SECTION
6.   AFFIRMATIVE COVENANTS   63 6.1   Financial Statements and Other Reports  
63 6.2   Consolidated Corporate Franchises   67 6.3   Payment of Taxes   68 6.4
  Maintenance of Properties; Insurance   68 6.5   Inspection; Books and Records
  69 6.6   Compliance with Statutes   69 6.7   Execution of Guaranty by Future
Guarantors   69 6.8   [Reserved]   70 6.9   Transactions with Affiliates   70
6.10   End of Fiscal Years; Fiscal Quarters   71 6.11   Use of Proceeds   71
6.12   Changes in Business   71 6.13   Designation of Subsidiaries   71 6.14  
Ratings   72 6.15   Anti-Money Laundering Legislation   72 SECTION 7.   NEGATIVE
COVENANTS   72 7.1   [Reserved]   72 7.2   Limitation on Liens, etc.   72 7.3  
Investments; Joint Ventures   76 7.4   Restricted Payments   79 7.5   Financial
Covenants   82 7.6   Restriction on Fundamental Changes; Asset Sales   82 7.7  
[Reserved]   84 7.8   [Reserved]   84 7.9   Limitation on Debt Payments   85
SECTION 8.   EVENTS OF DEFAULT   85 8.1   Failure to Make Payments When Due   85
8.2   Default in Other Agreements   85 8.3   Breach of Certain Covenants   86
8.4   Breach of Warranty   86 8.5   Bankruptcy, etc.   86 8.6   [Reserved]   87
8.7   Judgments and Attachments   87

 

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8.8   Employee Benefit Plans      87   8.9   Change in Control      87   8.10  
Invalidity of the Guaranty      88   8.11   Clean-Up Period      88   SECTION 9.
   AGENTS      88   9.1   Appointment      88   9.2   Rights as a Lender      89
  9.3   Exculpatory Provisions      89   9.4   Reliance by the Administrative
Agent      90   9.5   Delegation of Duties      90   9.6   Resignation of
Administrative Agent      90   9.7   Release of Guarantors      91   9.8  
Non-Reliance on Administrative Agent and Other Lenders      91   9.9   Duties of
Other Named Entities      91   SECTION 10.    MISCELLANEOUS      92   10.1  
Assignments and Participations in Loans      92   10.2   Expenses; Indemnity;
Damage Waiver      95   10.3   Right of Set-Off      97   10.4   Sharing of
Payments by Lenders      97   10.5   Amendments and Waivers      98   10.6  
Independence of Covenants      100   10.7   Notices      100   10.8   Survival
of Representations, Warranties and Agreements      101   10.9   Failure or
Indulgence Not Waiver; Remedies Cumulative      101   10.10   Marshalling;
Payments Set Aside      101   10.11   Severability      101   10.12  
Obligations Several; Independent Nature of the Lenders’ Rights      101   10.13
  Maximum Amount      102   10.14   Headings      102   10.15   Applicable Law
     103   10.16   Successors and Assigns      103   10.17   Consent to
Jurisdiction and Service of Process      103   10.18   Waiver of Jury Trial     
104   10.19   Confidentiality      104   10.20   Integration; Effectiveness;
Electronic Execution      106   10.21   USA Patriot Act Notification      106  
10.22   Agency of the Borrower for each other Loan Party      107   10.23   No
Fiduciary Duties      107   10.24   Judgment Currency      108   10.25  
[Reserved]      108   10.26   Effect of Certain Inaccuracies      108   10.27  
Acknowledgment and Consent to Bail-In of EEA Financial Institutions      109  

 

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EXHIBITS

 

I   FORM OF NOTICE OF BORROWING II   FORM OF NOTICE OF CONVERSION/CONTINUATION
III   [RESERVED] IV   FORM OF NOTE V   FORM OF GUARANTY VI   FORM OF OFFICER’S
CERTIFICATE VII   [RESERVED] VIII   FORM OF ASSIGNMENT AGREEMENT

SCHEDULES

 

2.1   COMMITMENTS 4.2   LOCAL COUNSEL TO LOAN PARTIES 5.1C   SUBSIDIARIES OF
HOLDINGS 5.16   INSURANCE 6.9   TRANSACTIONS WITH AFFILIATES 7.2   CERTAIN
EXISTING LIENS 7.3   CERTAIN EXISTING INVESTMENTS

 

 

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CREDIT AGREEMENT

This 364-DAY CREDIT AGREEMENT is dated as of October 2, 2018, and entered into
by and among TAYLOR MORRISON COMMUNITIES, INC., a Delaware corporation (the
“Borrower”), TMM HOLDINGS LIMITED PARTNERSHIP, a British Columbia limited
partnership (“Holdings”), TAYLOR MORRISON HOLDINGS II, INC., a company continued
under the laws of the province of British Columbia (“Canada 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 CITIBANK, N.A., as administrative agent for
the Lenders (in such capacity, the “Administrative Agent”).

R E C I T A L S

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 Borrower intends to acquire (the “Acquisition”) AV Homes, Inc.,
a Delaware corporation (the “Acquired Company”), pursuant to the Agreement and
Plan of Merger dated as of June 7, 2018 (the “Merger Agreement”), among TMHC,
the Borrower, Thor Merger Sub, Inc. and the Acquired Company;

C. WHEREAS, in connection with the foregoing, the Borrower has requested that
the Lenders make Loans on the Closing Date in an aggregate principal amount of
up to $200,000,000;

D. WHEREAS, the proceeds of the Loans shall be used on the Closing Date,
together with cash on hand of TMHC and its Subsidiaries and the proceeds of any
New Notes received on or prior to the Closing Date, solely to finance cash
consideration payable in connection with the Acquisition and the other
Transactions;

D. WHEREAS, the Lenders are willing to extend credit in the form of Loans, on
the terms and subject to the conditions set forth herein;

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:

“Acquired Company” has the meaning assigned to that term in the recitals to this
Agreement.

 

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“Acquired Company Refinancing” means the repayment in full of all outstanding
Indebtedness for borrowed money of the Acquired Company and its Subsidiaries
(other than (i) an aggregate principal amount of up to $400,000,000 of the
Acquired Company’s 6.625% Senior Notes due 2022, (ii) an aggregate principal
amount of up to $80,000,000 of the Acquired Company’s unsecured convertible
notes due 2020, (iii) Indebtedness permitted to be incurred or outstanding
pursuant to the Merger Agreement, (iv) local facilities incurred in the ordinary
course of business for working capital purposes and (v) project or property
level financings incurred in the ordinary course of business), and the
termination of all related commitments and the release of all related
guarantees.

“Acquisition” has the meaning assigned to that term in the recitals to this
Agreement.

“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 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.

“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.

“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 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
or Base Rate Loan, the applicable rate per annum set forth below under the
caption “Eurodollar Margin” or “Base 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 initial delivery to the Administrative Agent
of the Section 6.1 Financials following the Effective Date, the Capitalization
Ratio shall be deemed to be in Category 2 for purposes of determining the
Applicable Margin:

 

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CAPITALIZATION RATIO

   EURODOLLAR
MARGIN     BASE RATE
MARGIN  

Category 1

³ 0.55 to 1.00

     2.000 %      1.000 % 

Category 2

< 0.55 to 1.00

> 0.40 to 1.00

     1.750 %      0.750 % 

Category 3

< 0.40 to 1.00

     1.500 %      0.500 % 

Each change in the Applicable Margin resulting from a change in the
Capitalization Ratio shall be effective with respect to all Loans 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.

“Arranger” means Citibank, N.A., as sole lead arranger and sole bookrunner.

“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

 

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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 Indemnity Guaranty or
Non-Recourse Payment Guaranty.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

“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.

 

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“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 ICE Benchmark Administration
Limited (or the successor thereto that takes over the administration of such
rate) LIBO Rate for deposits in U.S. Dollars (as set forth by any service
selected by the Administrative Agent which has been nominated by the ICE
Benchmark Administration Limited (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; provided further that, if such rate shall be less
than zero, such rate shall be deemed to be zero. 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.

“Beneficial Ownership Certification” means a certification regarding beneficial
ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“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.

“Borrower” has the meaning assigned to that term in the preamble to this
Agreement.

“Borrowing Minimum” means $1,000,000.

“Borrowing Multiple” means $100,000.

“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, 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.

 

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“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.

“Canadian Dollars” or “C$” means the lawful currency of Canada.

“Canadian Pension Plan” means a “registered pension plan” as that term is
defined in subsection 248(1) of the Income Tax Act (Canada).

“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 Existing
Credit Agreement Initial Effective Date (whether or not such operating leases
are in effect on the Existing Credit Agreement 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
Existing Credit Agreement Initial Effective Date which would otherwise require
such leases to be treated as Capital Leases.

“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

 

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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 types of securities described in clauses
(a) through (h) above; and (j) other short-term investments utilized by the Loan
parties or the 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.

“Change in Control” has the meaning assigned to that term in Section 8.9.

“Change in Law” means the occurrence, after the 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 Effective Date.

“Closing Date” means the day (which shall be a Business Day) on which the Loans
are made hereunder.

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

 

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“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans hereunder as set forth on Schedule 2.1 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 the earliest of (a) 11:59 p.m., New York
City time, on December 7, 2018, (b) the consummation of the Acquisition without
the borrowing of any Loans hereunder, (c) the date on which the Commitments are
permanently reduced to zero pursuant to Section 2.4A(ii) and (d) the date of
termination of the Commitments pursuant to Section 8.

“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.

“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, U.S. FinCo, the Borrower 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 Maturity 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, U.S. FinCo, the Borrower 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, U.S.
FinCo, the Borrower 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, U.S. FinCo, the Borrower 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, U.S. FinCo, the Borrower
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, U.S. FinCo, the Borrower 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 U.S.
Holdings, Canada Holdings, U.S. FinCo, the Borrower or any Restricted
Subsidiary) in which

 

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Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo, the Borrower 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 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 the 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 expenses
payable by Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo, the Borrower
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,
U.S. FinCo, the Borrower and the Restricted Subsidiaries, less (without
duplication) Intangible Assets of Holdings, U.S. Holdings, Canada Holdings, U.S.
FinCo, the Borrower 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, U.S. FinCo, the Borrower 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, U.S. FinCo, the Borrower 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, U.S. FinCo,
the Borrower 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.

 

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“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, U.S. FinCo, the Borrower 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, U.S. FinCo, the Borrower 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, U.S. FinCo, the Borrower 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.

“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 the 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.

 

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“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 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 Effective Date and each other director if, in each case, such other
director’s nomination for election to the Board of Directors of Parent is
recommended or approved by at least a majority of the then Continuing Directors.

“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.

“Debt Incurrence” means (a) the issuance of any New Notes and (b) any other
incurrence of Indebtedness for borrowed money in an aggregate principal amount
in excess of $5,000,000 by the Borrower, Parent or any of their Subsidiaries,
whether pursuant to a public offering or in a Rule 144A or other private
placement of debt securities (including debt securities convertible into equity
securities) or incurrence of loans under any loan or credit facility, other than
(i) Indebtedness between or among Holdings, the Borrower and their respective
Subsidiaries, (ii) Indebtedness under the Existing Credit Agreement,
(iii) refinancings of Indebtedness outstanding on the Effective Date,
(iv) working capital facilities, Capital Leases and purchase money debt incurred
in the ordinary course of business by Subsidiaries of Holdings and
(v) Non-Recourse Indebtedness.

“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.

 

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“Deposit Account” means a demand, time, savings, passbook or like account with a
bank, savings and loan association, credit union or like organization, other
than an account evidenced by a negotiable certificate of deposit.

“Development 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.

“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 Maturity 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 Borrower
incorporated, formed or organized under the laws of any jurisdiction within the
United States of America or any territory thereof.

 

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“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution defined in clause (a) or (b) of this definition and
is subject to consolidated supervision with its parent.

“EEA Member Country” means (a) any of the member states of the European Union,
(b) Iceland, (c) Liechtenstein and (d) Norway.

“EEA Resolution Authority” means any public administrative authority or any
Person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Effective Date” means October 2, 2018, which was the date on which each of the
conditions precedent specified in Section 4.1 were satisfied (or waived in
accordance with the terms hereof).

“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, Holdings, the
Borrower or any of their respective Subsidiaries or Affiliates.

“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.

“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.

 

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“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 any issuance of Capital Stock or the receipt of any capital
contribution in connection with the IPO.

“Equity Offering” means any bona fide issuance of Capital Stock or equity-linked
securities by Parent, the Borrower or Holdings, whether pursuant to a public
offering or in a Rule 144A or other private placement, other than securities
issued pursuant to employee stock plans or employee compensation plans or issued
to the shareholders of the Acquired Company as consideration for the
Acquisition.

“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 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.

“ERISA Affiliate” means each person (as defined in Section 3(9) of ERISA) that
together with Holdings, the Borrower 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.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor Person), as in effect
from time to time.

“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.

 

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“Eurodollar Base Rate” shall mean, with respect to any borrowing of Eurodollar
Rate Loans for any Interest Period, 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 such Interest Period by reference
to the ICE Benchmark Administration Interest Settlement Rates for deposits in
Dollars (as published by any service selected by the Administrative Agent which
has been nominated by the ICE Benchmark Administration Limited (or its
successor) as an authorized information vendor for the purpose of displaying
such rates, in each case, the “Screen Rate”) for a period equal to such Interest
Period; provided that, if such rate is not available at such time for such
Interest Period (an “Impacted Interest Period”) for any reason, the “Eurodollar
Base Rate” shall be the Interpolated Rate; provided further that, to the extent
that an interest rate is not ascertainable pursuant to the foregoing provisions
of this definition for any Interest Period, then the “Eurodollar Base Rate”
shall mean (x) such other interbank rate with respect to such Interest Period
set forth by any authorized service selected by the Administrative Agent that
reflects an alternative index rate widely recognized in the U.S. syndicated loan
market as the successor to the ICE Benchmark Administration Interest Settlement
Rates for deposits in Dollars or (y) if there is no such authorized service with
respect to an alternative index rate widely recognized as the successor to the
ICE Benchmark Administration Interest Settlement Rates for deposits in Dollars,
such other index rate as may be agreed to by the Administrative Agent and
Borrower with the consent of the Requisite Lenders; provided further that the
Eurodollar Base Rate with respect to any Loans shall be deemed to be not less
than 0.00% per annum.

“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.

“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, U.S.
FinCo, the Borrower 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, U.S. FinCo, the Borrower 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 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 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.

 

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“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, or any other recipient of any payment to be
made by or on account of 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 the
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 Borrower 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” means the Second Amended and Restated Credit
Agreement dated as of July 13, 2011, as amended, supplemented or otherwise
modified from time to time, among the Borrower, Holdings, Canada Holdings, U.S.
Holdings, U.S. FinCo, the lenders from time to time party thereto and Credit
Suisse AG, as administrative agent.

“Existing Credit Agreement Initial Effective Date” means July 13, 2011.

“Existing Credit Agreement Reference Date” means April 12, 2013.

“Facility 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 aggregate
outstanding principal amount of the Loans of that Lender.

“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 initial delivery to the
Administrative Agent of the Section 6.1 Financials following the Effective Date,
the Capitalization Ratio shall be deemed to be in Category 2 for purposes of
determining the Facility Fee Rate:

 

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CAPITALIZATION RATIO

   FACILITY
FEE RATE  

Category 1

³ 0.55 to 1.00

     0.400 % 

Category 2

< 0.55 to 1.00

> 0.40 to 1.00

     0.300 % 

Category 3

< 0.40 to 1.00

     0.250 % 

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.

“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 Effective Date
(or any amended or successor version that is substantively comparable and not
materially more onerous to comply with), or any Treasury regulations promulgated
thereunder or official administrative interpretations thereof and any agreements
entered into pursuant to Section 1471(b)(1) of the Code or any fiscal or
regulatory legislation, rules or practices adopted pursuant to any
intergovernmental agreement entered into in connection with the implementation
of such Sections of the Code.

“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.

 

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“Fee Letters” means (i) the Arranger Fee Letter dated June 7, 2018, among the
Borrower, Holdings and the Arranger, and (ii) the Administrative Agent Fee
Letter dated June 7, 2018, among the Borrower, Holdings and the Arranger.

“Financial Performance Covenants” means the covenants of Holdings set forth in
Section 7.5.

“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.

“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 Borrower or any of their respective
Subsidiaries or any ERISA 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 Borrower 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 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, the 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 Borrower that is
not a Domestic Subsidiary.

“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.

 

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“Funding and Payment Office” means the office of the Administrative Agent
located at 388 Greenwich Street, New York, NY 10013 (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 Borrower and the Lenders).

“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.

“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 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 Parties” means, collectively, (a) the Lenders, (b) the
Administrative Agent, (c) the beneficiaries of each indemnification obligation
undertaken by any Loan Party under the Loan Documents and (d) any successors,
indorsees, transferees and assigns of any of the foregoing.

“Guarantor” means, individually, Holdings, U.S. Holdings, Canada Holdings, U.S.
FinCo, each of the Subsidiary Guarantors or any other wholly-owned Domestic
Subsidiary of U.S. FinCo or the 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.
Notwithstanding anything to the contrary herein, each Subsidiary of Holdings
that guarantees the obligations under the Existing Credit Agreement shall be a
Guarantor.

 

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“Guaranty” means the Guaranty, substantially in the form attached as Exhibit V
hereto, dated as of the Effective Date, and entered into by and among Holdings,
U.S. Holdings, Canada 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) 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.

“Historical Financial Statements” means (i) audited consolidated balance sheets
and related consolidated statements of income, stockholders’ equity and cash
flows of Holdings and its consolidated Subsidiaries for the 2015, 2016 and 2017
Fiscal Years and (ii) unaudited consolidated balance sheets and related
statements of income, stockholders’ equity and cash flows of Holdings and its
consolidated Subsidiaries for the Fiscal Quarters ending March 31, 2018 and
June 30, 2018.

“Holdings” has the meaning assigned to that term in the preamble to this
Agreement.

“Holdings Direct Owner” means Parent or any Parent Intermediate Holding Company,
in each case, that directly owns Capital Stock of Holdings.

“Housing Unit” means a detached or attached (including townhouse condominium or
condominium) single-family house (but excluding mobile homes) owned by the
Borrower or a Subsidiary of the 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 (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, U.S. FinCo, the Borrower 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, U.S. FinCo, the Borrower 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.

 

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“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 Existing Credit Agreement Reference Date or
designated by Holdings as an Insurance Subsidiary on or after the Existing
Credit Agreement Reference 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 Existing Credit
Agreement Reference 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 Base Rate Loan, the last Business Day in each of March,
June, September and December of each year; and

(b) with respect to any Eurodollar 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 date that is three months 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, 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.

“Interpolated Rate” means, at any time, the rate per annum determined by the
Administrative Agent (which determination shall be conclusive and binding absent
manifest error) to be equal to the rate that results from interpolating on a
linear basis between: (a) the Screen Rate for the longest period (for which that
Screen Rate is available in Dollars) that is shorter than the Impacted Interest
Period and (b) the Screen Rate for the shortest period (for which the Screen
Rate is available in Dollars) that exceeds the Impacted Interest Period, in each
case, at such time; provided that if the Interpolated Rate shall be less than
0.00%, such rate shall be deemed to be 0.00% for purposes of this Agreement.

 

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“Investment” means (a) any direct or indirect purchase or other acquisition by
Holdings or any of its 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
Holdings or any of its 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 Holdings
or any of its 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.

“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 the Borrower.

“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.

“Lender Default” means (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 in accordance with Section 2.1A unless such Lender notifies the
Administrative Agent and the Borrower 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 the Borrower and/or the Administrative
Agent that it does not intend to comply with its obligations under Section 2.1
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 Borrower,
of a Lender to confirm in writing to the Administrative Agent and the Borrower
that it will comply with its prospective obligations under Section 2.1 (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 Borrower), 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

 

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to, approval of or acquiescence in, any such proceeding or appointment or
becomes the subject of a Bail-In Action; 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, or such other office or offices as such
Lender may from time to time designate to Holdings and the Administrative Agent.

“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 Notes and the Guaranty.

“Loan Parties” means Holdings, Canada Holdings, U.S. Holdings, U.S. FinCo, the
Borrower and each Subsidiary Guarantor.

“Loans” means the loans made by the Lenders to the Borrower pursuant to
Section 2.1A.

“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 Borrower 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.

“Maturity Date” means the date that is 364 days after the Closing Date or, if
such date is not a Business Day, the next preceding Business Day.

“Maximum Amount” has the meaning assigned to that term in Section 10.13A.

“Merger Agreement” has the meaning assigned to that term in the recitals to this
Agreement.

“Merger Agreement Representations” means the representations made by the
Acquired Company in the Merger Agreement that are material to the interests of
the Lenders (in their capacities as such), but only to the extent that the
Borrower, Holdings or any of their Affiliates have the right to terminate their
respective obligations under the Merger Agreement (or otherwise decline to
consummate the Acquisition) as a result of such representations being
inaccurate.

 

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“Minority Investment” means any Person (other than a Subsidiary of Holdings) in
which a Loan Party 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., or any successor to its ratings
business.

“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
Existing Credit Agreement Reference Date or designated by Holdings as a Mortgage
Subsidiary on or after the Existing Credit Agreement Reference 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, the Borrower or any ERISA Affiliate, to
which Holdings, the Borrower or any ERISA Affiliate is contributing or to which
Holdings, the Borrower or any ERISA Affiliate had an obligation to contribute
within the last six years or with respect to which Holdings, the Borrower or any
ERISA Affiliate has any liability (whether actual or contingent).

“Net Cash Proceeds” means, with respect to any Debt Incurrence or Equity
Offering, the cash proceeds received by Parent, the Borrower or Holdings and
their Subsidiaries in respect thereof, net of all taxes and fees (including
investment banking fees), underwriting discounts, commissions and out of pocket
expenses paid in connection therewith by Parent, the Borrower, Holdings and
their Subsidiaries.

“New Notes” means senior unsecured notes or other funded Indebtedness of the
Borrower (which may be guaranteed by the Guarantors) issued in a public offering
or in a Rule 144A or other private placement.

“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 U.S. FinCo, the Borrower or any Subsidiary Guarantor
in respect of Non-Recourse Indebtedness of any Restricted Subsidiary of U.S.
FinCo or the Borrower.

“Notes” means (a) the promissory notes of the Borrower issued pursuant to
Section 2.1D and (b) any promissory notes issued by the 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 the 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 the 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.

“Obligation Currency” has the meaning assigned to that term in Section 10.24.

 

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“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, and (ii) 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
the 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 the Borrower under or
pursuant to this Agreement and the other Loan Documents and (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.

“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, 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, Taxes imposed as a
result of a present or former connection between such Lender, as applicable, and
the jurisdiction imposing such Taxes (other than a connection arising from such
Lender 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 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.

 

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“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.

“Parent” means TMHC or any other Person who becomes the ultimate holding company
of Holdings and whose ownership of Holdings does not result in a Change in
Control.

“Parent Intermediate Holding Company” means any Subsidiary of Parent that is a
direct or indirect owner of any Capital Stock of Holdings.

“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 the Borrower or any
Subsidiary of the 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 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;

 

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(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, the Borrower
or any Subsidiary of U.S. FinCo or the 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 Borrower and their Subsidiaries,
and that were not 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 the Borrower or any Subsidiary of U.S.
FinCo or the Borrower; provided that such Lien secures only the obligations of
U.S. FinCo, the Borrower 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
Borrower 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 Borrower 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, the Borrower or
any Subsidiary of U.S. FinCo or the Borrower;

 

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(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, the Borrower or any Subsidiary of
U.S. FinCo or the 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;

(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, the Borrower or any Subsidiary of U.S. FinCo or the 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) [Reserved];

(u) [Reserved];

(v) [Reserved];

(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;

 

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(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.

“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, the Borrower or any Subsidiary of Holdings
or ERISA Affiliate or (ii) was so maintained and in respect of which Holdings,
the 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
Citibank, N.A. as its “prime” or “base” 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. Citibank, N.A. 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 (including the allocation of
borrowings of Loans pursuant to Section 2.1A, payments of principal in respect
of Loans on the Maturity Date pursuant to Section 2.4A(v), any payment of
interest in respect of Loans pursuant to Section 2.2, and any payment of
Facility Fees pursuant to Section 2.3A) of any Lender, the percentage obtained
by dividing (i) the Facility Exposure of that Lender by (ii) the aggregate
Facility Exposure of all the Lenders. The Pro Rata Share of each Lender on the
Effective Date shall be set forth in the Register.

“Process Agent” has the meaning specified in Section 10.17C.

 

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“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) Citibank, N.A. and (b) another Lender determined
by the Administrative Agent with the consent of such Lender and 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 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.

 

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“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 Lenders” means Lenders having or holding more than 50% of the
aggregate Facility Exposure of all Lenders; provided that the Facility 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

“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 Effective Date or the Closing
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.

“Restricted Subsidiary” means, unless otherwise specified herein, any Subsidiary
of the Borrower or U.S. FinCo, in each case other than an Unrestricted
Subsidiary.

 

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“S&P” means S&P Global Ratings, or any successor to its ratings business.

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

“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 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 Holdings and its
Restricted Subsidiaries whose outstanding Indebtedness is all Non-Recourse
Indebtedness.

“Specified Representations” means the representations and warranties set forth
in Section 5.1A, Section 5.1B, Section 5.2A(iii), Section 5.2D, Section 5.8,
Section 5.12 and Section 5.15C.

“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, U.S. FinCo, the Borrower 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, U.S.
FinCo, the Borrower 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, U.S.
FinCo, the Borrower 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, U.S.
FinCo, the Borrower and the Restricted Subsidiaries for such period, in each
case determined in accordance with GAAP.

“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

 

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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 Borrower (other than an Unrestricted Subsidiary or an Excluded
Subsidiary) on the Effective Date, and each wholly-owned Domestic Subsidiary of
U.S. FinCo or the Borrower (other than an Unrestricted Subsidiary or an Excluded
Subsidiary) that becomes a party to the Guaranty at any time after the Effective
Date pursuant to Section 6.7.

“Successor Borrower” has the meaning assigned to that term in Section 7.6A(i).

“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.

“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.

“Transactions” means (a) the consummation of the Acquisition, (b) the
consummation of the Acquired Company Refinancing, (c) the execution, delivery
and performance by each Loan Party of the Loan Documents to which it is a party,
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 or a
Eurodollar 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 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.

 

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“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.

“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 Holdings (other than the
Borrower, Canada Holdings, U.S. Holdings and U.S. FinCo) that it, U.S. FinCo or
the Borrower, designates as an Unrestricted Subsidiary pursuant to Section 6.13
subsequent to the Effective Date.

“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. 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. Person” means a “United States person” within the meaning of
Section 7701(a)(30) of the Code.

“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.

“Withholding Agent” means the Borrower and the Administrative Agent.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

 

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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.

SECTION 2.

AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

 

2.1

Commitments; Loans.

A. Each Lender severally agrees to make a loan to the Borrower on the Closing
Date in an aggregate principal amount not to exceed the amount of such Lender’s
Commitment, to be used for the purposes identified in Section 2.5. Amounts
borrowed under this Section 2.1A and repaid may not be reborrowed.

B. Borrowing Mechanics. Loans (including any Loans made as Eurodollar Rate Loans
with a particular Interest Period) shall be in an aggregate minimum amount of
the Borrowing Minimum and integral multiples of the Borrowing Multiple in excess
of that amount. The Borrower shall deliver to the Administrative Agent a Notice
of Borrowing not later than 10:00 a.m. (New York time) on the

 

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proposed Closing Date; provided, that, in the case of any Loan requested as a
Eurodollar Rate Loan, the Borrower 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 Closing Date. The Notice of Borrowing shall specify (i) the
proposed Closing Date (which shall be a Business Day), (ii) the amount and Type
of Loans requested, (iv) in the case of any Loans requested to be made as
Eurodollar 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 or Eurodollar Rate Loans in the manner provided
in Section 2.2D.

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 Borrower shall notify the Administrative Agent prior to the funding of any
Loans in the event that any of the matters to which the Borrower is required to
certify in the Notice of Borrowing are no longer true and correct as of the
Closing Date, and the acceptance by the Borrower of the proceeds of any Loans
shall constitute a re-certification by the Borrower, as of the Closing Date, as
to the matters to which the Borrower is required to certify in the 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 shall be irrevocable and the Borrower shall be bound to
make a borrowing in accordance therewith.

C. Disbursement of Funds. All Loans 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.

Promptly after receipt by the Administrative Agent of a Notice of Borrowing with
respect to a Loan pursuant to Section 2.1B, 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 not later than 1:00 p.m. (New York
time) on the Closing 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
available to the Borrower on the Closing 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 Borrower at the
Funding and Payment Office.

Unless the Administrative Agent shall have received notice from a Lender prior
to the Closing Date that such Lender will not make available to the
Administrative Agent the amount of such Lender’s Loan requested on the Closing
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 Borrower a corresponding amount on the Closing Date. In such
event, if a Lender has not in fact made its share

 

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of the applicable Loan available to the Administrative Agent on the Closing
Date, then the applicable Lender and the Borrower 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 Borrower 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) the Base 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 the Borrower, the interest rate
applicable to Base Rate Loans. If the 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 Borrower the amount of such
interest paid by the Borrower 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 the Borrower
shall be without prejudice to any claim the Borrower may have against a Lender
that shall have failed to make such payment to the Administrative Agent.

Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender, 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) the Base Rate
and (ii) a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.

D. Notes. The Borrower shall execute and deliver on the 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 Borrower issue it such
Note on the terms set forth herein, and the Borrower agrees 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 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 Borrower 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.
Subject to the provisions of Sections 2.2E, 2.6 and 2.7, the Loans shall bear
interest through maturity as follows:

 

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(a) if a Base Rate Loan, then at the sum of the Base Rate plus the Applicable
Margin; or

(b) if a Eurodollar Rate Loan, then at the sum of the Reserve Adjusted
Eurodollar Rate for the relevant Interest Period plus the Applicable Margin.

B. Interest Periods. In connection with each Eurodollar Rate Loan, the Borrower
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 Interest Period shall
(except as provided in Section 2.1B) be, at the Borrower’s option, a one-, two-,
three- or six-month, or, if agreed to by all of the Lenders, shorter than
one-month, period; provided that:

(i) the initial Interest Period for any Eurodollar Rate Loan shall commence on
the Closing Date, 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;

(ii) 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;

(iii) 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;

(iv) 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
(v) of this Section 2.2B, end on the last Business Day of a calendar month;

(v) no Interest Period with respect to any portion of the Loans shall extend
beyond the Maturity Date;

(vi) there shall be no more than three Interest Periods in respect of Eurodollar
Rate Loans outstanding at any time; and

(vii) 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, the Borrower shall be deemed to have selected an
Interest Period of one month.

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).

 

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D. Conversion or Continuation. Subject to the provisions of Section 2.6, the
Borrower shall have the option (i) to convert at any time all or any part of the
outstanding Loans equal to the Borrowing Minimum and integral multiples of the
Borrowing Multiple in excess of that amount from Base Rate Loans to Eurodollar
Rate Loans (or vice versa) or (ii) upon the expiration of any Interest Period
applicable to a Eurodollar 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 Eurodollar Rate Loan for another
permissible Interest Period.

The Borrower 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 Base 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 Eurodollar Rate Loan). A
Notice of Conversion/Continuation shall specify (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii) the amount
and Type 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 Eurodollar Rate Loan, the requested Interest Period and (v) in the case of
a conversion to, or a continuation of, a Eurodollar Rate Loan, that no Event of
Default has occurred and is continuing. Each conversion 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 Type, made, converted or continued on the same date and, in the case of
Eurodollar Rate Loans, as to which a single Interest Period is in effect. If the
Borrower 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.

If the Borrower fails 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.

Neither the Administrative Agent nor any Lender shall incur any liability to the
Borrower in acting upon any 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 Borrower 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 notice, the Borrower
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 shall be irrevocable, and the Borrower shall be bound to effect a
conversion or continuation in accordance therewith.

 

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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 (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 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 Base Rate Loan being converted from a Eurodollar
Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar 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 Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar 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. 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 Borrower agrees 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 Effective Date to and excluding the Commitment Termination Date
equal to (i) the actual daily amount of the unused aggregate Commitments
multiplied by (ii) a rate per annum equal to the Facility Fee Rate at such time.
In addition, the Facility Fees accrued with respect to the Commitment of a
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 Borrower
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 Borrower
prior to such time; provided, that no Facility Fees shall accrue on the
Commitment of a Defaulting Lender so long as such Lender shall be a Defaulting
Lender. The Facility Fees shall be payable in arrears on the Commitment
Termination Date, and shall be calculated based on the actual number of days
elapsed over a 360-day year.

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 the Borrower agree to pay such other fees to
the Administrative Agent as may hereafter be agreed upon from time to time.

 

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2.4

Repayments and Prepayments; General Provisions Regarding Payments.

A. Prepayments and Reductions in Commitments.

(i) Voluntary Prepayments. The Borrower may, upon not less than (i) two Business
Days’ prior written notice, in the case of Eurodollar Rate Loans, or (ii) same
day prior written notice, in the case of Base Rate Loans (which notice the
Administrative 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 Borrower shall prepay a Eurodollar Rate Loan other than on the
expiration of the Interest Period applicable thereto, the Borrower 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) Termination and Reduction of Commitments.

(a) The Borrower may, upon not less than three Business Days’ prior written
notice (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; 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
Borrower’s 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.

(b) On the Closing Date, after giving effect to the Loans to be made on the
Closing Date, the Commitments (other than the Commitment of any Defaulting
Lender, to the extent of a failure by such Defaulting Lender to fund its Loans
on the Closing Date) shall be automatically reduced to zero.

(c) Each Lender’s Commitment shall automatically terminate on the Commitment
Termination Date.

(d) Prior to the Closing Date, the Commitments shall be automatically reduced on
a dollar-for-dollar basis by an amount equal to 100% of the Net Cash Proceeds
received by Parent, the Borrower or any of their Subsidiaries from any Debt
Incurrence or Equity Offering. The Borrower shall give the Administrative Agent
prompt written notice of any mandatory Commitment reduction under this
Section 2.4A(ii)(d), which notice shall be accompanied by a reasonably detailed
calculation of the applicable Net Cash Proceeds.

 

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(iii) Mandatory Prepayment. Within five Business Days following the receipt by
Parent, the Borrower, Holdings or any of their Subsidiaries of Net Cash Proceeds
in respect of any Debt Incurrence or Equity Offering, the Borrower shall prepay
Loans in an aggregate principal amount equal to 100% of such Net Cash Proceeds
in the manner provided in Section 2.4B. The Borrower shall give the
Administrative Agent prompt written notice of any mandatory prepayment under
this Section 2.4A(iii), which notice shall be accompanied by a reasonably
detailed calculation of the applicable Net Cash Proceeds.

(iv) 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, any voluntary prepayment shall be applied first to Base Rate
Loans to the full extent thereof before application to Eurodollar Rate Loans, in
each case in a manner that minimizes the amount of any payments required to be
made by the Borrower pursuant to Section 2.6C.

(v) Repayment of Loans on Maturity Date. On the Maturity Date, the Borrower
shall repay in full all Loans then outstanding.

B. Application of Payments Under the Guaranty and Certain Other Amounts.

(i) [Reserved].

(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 Borrower 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
Borrower 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

 

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succeeding Business Day, in the Administrative Agent’s sole discretion. The
Borrower hereby authorizes the Administrative Agent to charge its 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 Borrower hereunder shall be made in
U.S. Dollars.

(ii) Application of Payments to Principal, Interest and Prepayment Fees. 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 Base Rate
Loans in lieu of its Pro Rata Share of any Eurodollar Rate Loans, the
Administrative Agent shall give effect thereto in apportioning payments received
thereafter.

(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 Borrower 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.

The proceeds of any Loans shall be applied on the Closing Date, together with
cash on hand of Parent and its Subsidiaries and the proceeds of any New Notes
received on or prior to the Closing Date, solely to finance cash consideration
payable in connection with the Acquisition and the other Transactions.

 

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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 Eurodollar 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 Eurodollar Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly give notice
thereof (in writing) to the Borrower 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 Eurodollar Rate Loans, that by
reason of circumstances arising after the Effective Date affecting the London
interbank market, adequate and fair means do not exist for ascertaining the
interest rate applicable to such Loans on the basis provided for in the
definition of Reserve Adjusted Eurodollar Rate, the Administrative Agent shall
on such date give notice (in writing) to the Borrower and each Lender of such
determination, whereupon (i) no Loans may be made or continued as, or converted
to, Eurodollar Rate Loans, until such time as the Administrative Agent notifies
the Borrower and the Lenders that the circumstances giving rise to such notice
no longer exist (such notification not to be unreasonably withheld or delayed)
and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by
the Borrower with respect to the Loans in respect of which such determination
was made shall be deemed to be rescinded by the Borrower; provided, however,
that, at the option of the Borrower, any such Notice of Borrowing may be
re-submitted to the Administrative Agent indicating that the Borrower is
electing a Base Rate Loan, which Loan shall be funded not later than one
Business Day after the date of such Base Rate Loan Notice of Borrowing in
accordance with Section 2.1B.

C. Illegality or Impracticability of Eurodollar 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 Borrower and the Administrative Agent) that the
making, maintaining or continuation of its Eurodollar 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 Effective Date which materially and adversely affect the
London interbank market, then, and in any such event, such Lender shall be an
“Affected Lender” and it shall on that day give notice (in writing) to the
Borrower 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, Eurodollar Rate Loans 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 Eurodollar 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
Base Rate Loan, (c) the Affected Lender’s obligation to maintain its outstanding
Eurodollar Rate Loans (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

 

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into Base Rate Loans on the date of such termination. Notwithstanding the
foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested pursuant to a
Notice of Conversion/Continuation, the Borrower 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 (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, Eurodollar
Rate Loans in accordance with the terms of this Agreement.

D. Compensation For Breakage or Non-Commencement of Interest Periods. The
Borrower 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
Eurodollar 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 anticipated profits) which such Lender may sustain:
(i) if for any reason (other than a default by such Lender) a borrowing of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Conversion/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
Eurodollar 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 Eurodollar
Rate Loans is not made on any date specified in a notice of prepayment given by
the Borrower, or (iv) as a consequence of any other default by the Borrower in
the repayment of any Eurodollar 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 Eurodollar 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
Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing
interest at the rate obtained pursuant to the definition of Reserve Adjusted
Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan
and having a maturity comparable to the relevant Interest Period, 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 Eurodollar 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. Eurodollar Rate Loans After Default. After the occurrence of and during the
continuation of a Default or Event of Default, (i) the Borrower may not elect to
have a Loan be made or maintained as, or converted to, a Eurodollar 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 the Borrower with respect to a
requested borrowing or conversion/continuation that has not yet occurred shall
be deemed to be rescinded by the Borrower.

 

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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); (ii) subject any Lender 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
Eurodollar Rate Loans made by it, or its deposits, reserves, other liabilities
or capital attributable thereto; or (iii) impose on any Lender or the London
interbank market any other condition, cost or expense affecting this Agreement
or Eurodollar Rate Loans hereunder made by such Lender; and the result of any of
the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Rate Loan (or of maintaining its obligations to make
any such Loan), or to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or any other amount), then
upon request of such Lender the Borrower will pay to such Lender such additional
amount or amounts as will compensate such Lender for such additional costs
incurred or reduction suffered.

B. Capital Requirements. If any Lender determines that any Change in Law
affecting such Lender or the applicable Lender Office of such Lender or such
Lender’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
capital or on the capital of such Lender’s holding company, if any, as a
consequence of this Agreement, the Commitments of such Lender or the Loans made
by such Lender, to a level below that which such Lender or such Lender’s holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s policies and the policies of such Lender’s holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender such additional amount or amounts as will compensate
such Lender or such Lender’s holding company for any such reduction suffered.

C. Certificates for Reimbursement. A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as
the case may be, as specified in Section 2.7A or 2.7B and delivered to the
Borrower shall be conclusive absent manifest error. The Borrower shall pay such
Lender 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 to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s right to demand such compensation; provided that the Borrower shall not
be required to compensate a Lender pursuant to this Section for any increased
costs incurred or reductions suffered more than nine months prior to the date
that such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).

 

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E. Taxes.

(i) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower 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 Borrower shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.7E) the
Administrative Agent or Lender, 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 Borrower. Without limiting the provisions of
paragraph (i) above, the Borrower shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with Applicable Laws.

(iii) Indemnification by the Borrower. The Loan Parties shall indemnify the
Administrative Agent and each Lender 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 or
Lender, 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 Borrower by an Agent, or a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender shall be conclusive absent manifest error.

(iv) Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent and the Borrower for the full amount of any Excluded Taxes
attributable to such Lender that are paid or payable by the Administrative Agent
and the Borrower 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 Borrower or the Administrative Agent delivers to the applicable Lender
a certificate stating the amount of Excluded Taxes so payable by the 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 the Borrower to a Governmental Authority,
the Borrower 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.

(a) The Administrative Agent or any Lender, if requested by the 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 the Borrower or the Administrative Agent as will
enable the Borrower or the Administrative Agent to determine whether or not the
Administrative Agent or such Lender 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
Borrower is a U.S. Person,

(i) each Lender that is a U.S. Person shall deliver to the 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 becomes a Lender under
this Agreement (and from time to time thereafter upon the request of the
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 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 Borrower or
the Administrative Agent), whichever of the following is applicable: (i) duly
completed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E, 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
W-8BEN-E 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 Borrower or the Administrative Agent duly
completed together with such supplementary documentation as may be prescribed by
Applicable Laws and reasonably requested by the Borrower or the Administrative
Agent to permit the 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 under this Agreement would be subject to
U.S. Federal withholding Tax imposed by FATCA, such Lender shall deliver to the
Borrower or the Administrative Agent, at the time or times prescribed by
Applicable Law and at such time or times reasonably requested by the Borrower or
the Administrative Agent, such 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 Borrower or the
Administrative Agent as may be necessary for the Borrower or the Administrative
Agent to comply with its obligations under FATCA, to determine that such Lender
has complied with its obligations under FATCA or to determine the amount to
deduct and withhold from such payment; and

 

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(iv) the Administrative Agent shall deliver to the Borrower (in such number of
copies as shall be requested by the 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 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 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 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.

 

2.8

Mitigation Obligations; Replacement of Lenders.

A. Designation of a Different Lender Office. If any Lender requests compensation
under Section 2.7A or 2.7B, or requires the Borrower to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.7E, then such Lender shall (at the request of the
Borrower) use reasonable efforts to designate a different Lender Office for

 

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making, funding or maintaining its Commitments or Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, 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 to any unreimbursed cost or
expense and would not otherwise be materially disadvantageous to such Lender.
The Borrower hereby agrees to pay all reasonable costs and expenses incurred by
any Lender 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 the 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
Eurodollar Rate Loans in accordance with Section 2.6C hereof, then the Borrower
may, at its 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
Borrower 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 Borrower (in the case of all other amounts), (iii)
such Eligible Assignee is able to make, maintain or continue, as applicable,
Eurodollar 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 Borrower to require such
assignment and delegation cease to apply.

 

2.9

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, as the Borrower 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; third, if so determined by
the Administrative Agent and the Borrower, to be held in a deposit account and
released in order to satisfy such Defaulting Lender’s potential future funding
obligations with respect to Loans under this Agreement; fourth, to the payment
of any amounts owing to the Lenders as a result of any judgment of a court of
competent jurisdiction obtained by any

 

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Lender against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement; fifth, so long as no Default or
Event of Default exists, to the payment of any amounts owing to the Borrower as
a result of any judgment of a court of competent jurisdiction obtained by the
Borrower against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement; and sixth, 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 in
respect of which such Defaulting Lender has not fully funded its appropriate
share, and (y) such Loans were made at a time when the conditions set forth in
Sections 4.2 were satisfied or waived, such payment shall be applied solely to
pay the Loans of all Lenders other than Defaulting Lenders on a pro rata basis
prior to being applied to the payment of any Loans of such Defaulting Lender
until such time as all Loans are held by the Lenders pro rata in accordance with
their Commitments. 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 pursuant to this Section 2.9A shall be deemed paid to and
redirected by such Defaulting Lender, and each Lender irrevocably consents
hereto.

B. Defaulting Lender Cure. If the Borrower and the Administrative Agent 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, that Lender
will, to the extent applicable, funds its Loans or take such other actions as
the Administrative Agent may determine to be necessary to cause the Loans to be
held pro rata by the Lenders in accordance with their Pro Rata Shares, 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 Borrower 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.

SECTION 3.

[RESERVED]

SECTION 4.

CONDITIONS

 

4.1

Conditions to Effectiveness.

The effectiveness of this Agreement is subject to the satisfaction of the
following conditions precedent:

A. The Administrative Agent (or its counsel) shall have received (i) this
Agreement, executed and delivered by the Borrower, Holdings, Canada Holdings,
U.S. Holdings, U.S. Finco and each of the Lenders, (ii) the Guaranty, executed
and delivered by each Loan Party, and (iii) a Note in favor of each Lender who
shall have requested the same, executed by the Borrower, and each of the
foregoing shall be in full force and effect.

B. The Lenders and the Administrative Agent shall have received payment of all
fees, and, to the extent invoiced at least three Business Days prior to the
Effective Date, reimbursement of all reasonable and documented expenses,
required to be paid or reimbursed by the Loan Parties in connection with the
transactions contemplated hereby on or before the Effective Date.

 

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4.2

Conditions to Making of Loans on Closing Date.

The obligations of the Lenders to make Loans to the Borrower on the Closing Date
are subject to the following further conditions precedent:

A. The Specified Representations 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), after giving effect to the Transactions, on and as of the Closing
Date to the same extent as though made on and as of the Closing 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.

B. The Merger Agreement Representations shall be true and correct in all
respects, except for any inaccuracy thereof that provides neither Parent nor any
of its Subsidiaries the right under the Merger Agreement not to consummate the
Acquisition.

C. Since June 7, 2018, there shall not have occurred any Effect (as defined in
the Merger Agreement as in effect on such date) that has had or would reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect (as defined in the Merger Agreement as in effect on such date).

D. The Acquisition shall have been, or substantially concurrently with the
funding of the Loans shall be, consummated, in each case pursuant to and on the
terms set forth in the Merger Agreement and without giving effect to amendments,
waivers, consents or other modifications after the date thereof that are
materially adverse to the Arranger or the Lenders (in their capacities as such)
without the consent of the Arranger, not to be unreasonably withheld,
conditioned or delayed (it being agreed that (a) any increase in purchase price
that (i) solely with respect to the cash portion of the purchase price, does not
exceed 10% in the aggregate, (ii) is funded with equity of Parent (or other
equity reasonably satisfactory to the Arranger) and/or (iii) is pursuant to any
purchase price or similar adjustment provision set forth in the Merger Agreement
as in effect of the date thereof, in each case, shall not be deemed to be
materially adverse to the Arranger or the Lenders and shall not require the
consent of the Arranger (it being agreed that any increase in the cash portion
of the purchase price in excess of 10% in the aggregate that is not pursuant to
such a provision of the Merger Agreement in accordance with clause (a)(iii)
above shall be deemed to be materially adverse to the interests of the Arranger
and the Lenders), (b) any decrease in purchase price that (i) solely with
respect to the cash portion of the purchase price, does not exceed 10% in the
aggregate or (ii) is pursuant to any purchase price or similar adjustment
provision set forth in the Merger Agreement as in effect on the date hereof, in
each case, shall not be deemed to be materially adverse to the Arranger or the
Lenders and shall not require the consent of the Arranger so long as such
decrease in the cash portion of the purchase price shall reduce
dollar-for-dollar the Commitments (it being agreed that any decrease in the cash
portion of the purchase price in excess of 10% in the aggregate that is not
pursuant to such a provision of the Merger Agreement in accordance with
clause (b)(ii) above shall be deemed to be materially adverse to the Arranger
and the Lenders)), and (c) any change to the definition of the term “Company
Material Adverse Effect” shall be deemed to be materially adverse to the
Arranger and the Lenders.

E. The Acquired Company Refinancing shall have been, or substantially
concurrently with the funding of the Loans shall be, consummated.

 

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F. The Arranger shall have received (a) U.S. GAAP audited consolidated balance
sheets and related statements of income or operations, stockholders’ or
partners’, as the case may be, equity and cash flows of each of Holdings and the
Acquired Company for the fiscal years ended December 31, 2015, December 31, 2016
and December 31, 2017 (or such lesser number of fiscal years as may be required
by the Acquired Company’s significance pursuant to the Regulation S-X
significance tests) (and the related audit report or reports), (b) U.S. GAAP
unaudited consolidated balance sheets and related statements of income or
operations, (solely in the case of Holdings) stockholders’ or partners’, as the
case may be, equity and cash flows of each of Holdings and the Acquired Company
(subject to normal year-end adjustments and the absence of footnotes) for each
subsequent fiscal quarter (other than any fourth fiscal quarter) ended at least
45 days before the Closing Date (and comparable periods for the prior fiscal
year) and (c) customary pro forma consolidated financial statements of Holdings
and its consolidated Subsidiaries after giving effect to the Transactions, as of
the end of and for the most recently ended fiscal year of Holdings and the
interim period after such most recently ended fiscal year (and the corresponding
period in the prior fiscal year), in respect of each of clauses (a) through (c)
meeting the requirements of Rule 3.05 and Article 11 of Regulation S-X under the
Securities Act and the relevant SEC rules and regulations applicable to an
offering on Form S-3, regardless of when Parent is required to file such
financial statements; provided that filing of the required financial statements
on Form 10-K and Form 10-Q by TMHC and the Acquired Company will satisfy the
foregoing requirements in respect of Holdings and the Acquired Company (provided
that the Arranger is furnished consolidating information that explains in
reasonable detail the differences between the information relating to TMHC, on
the on the one hand, and the information relating to Holdings and its
consolidated Subsidiaries on a stand-alone basis, on the other hand). The
Arranger hereby acknowledges that the requirements of the foregoing clauses
(a) and (b) with respect to periods for which TMHC and the Acquired Company have
filed financial statements on Form 10-K and Form 10-Q have been satisfied;
provided, in each case, that a subsequent Form 8-K, Item 4.02 has not been filed
with respect to such financial statements.

G. The Administrative Agent shall have received a supplement to the Guaranty in
substantially the form of Exhibit A thereto, duly executed by the Acquired
Company and each of its Subsidiaries that is required to become a Guarantor in
accordance with Section 6.7 or the Acquired Company and each of its Subsidiaries
that is required to become a Guarantor in accordance with Section 6.7 shall have
duly executed and delivered the Guaranty.

H. All fees required to be paid on or prior to the Closing Date to the
Administrative Agent, the Arranger and the Lenders pursuant to this Agreement,
any other Loan Document or the Fee Letters, and, to the extent invoiced at least
three Business Days prior to the Closing Date, all reasonable and documented
expenses required to be paid or reimbursed to the Administrative Agent and the
Arranger on or prior to the Closing Date in connection with the transactions
contemplated hereby, shall have been paid (which amounts may be offset against
the proceeds of the Loans).

I. The Administrative Agent shall have received, in accordance with the
provisions of Section 2.1B, an executed Notice of Borrowing, signed by a
Responsible Officer on behalf of the Borrower.

J. The Administrative Agent and its counsel shall have received executed copies
of favorable written opinions of Paul, Weiss, Rifkind, Wharton & Garrison LLP,
counsel for the Loan Parties, and each local counsel listed on Schedule 4.2, in
each case, in form and substance reasonably satisfactory to the Administrative
Agent and its counsel, dated as of the Closing Date.

 

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K. Each Loan Party shall have delivered to the Administrative Agent and each of
the Lenders the following, each, unless otherwise noted, dated the Closing Date:

(i) Certified copies of the certificate of incorporation, organization or
formation, together with a good standing certificate, certificate of status or
certificate of compliance (as applicable) from the applicable Governmental
Authority of its jurisdiction of incorporation, organization or formation, each
dated a recent date prior to the Closing Date (or, in lieu of such certificate
of incorporation, organization or formation, a certification by a Responsible
Officer that there has been no change to such certificate of incorporation,
organization or formation since the most recent copy delivered to the
Administrative Agent, together with a good standing certificate, certificate of
status or certificate of compliance (as applicable) from the applicable
Governmental Authority of its jurisdiction of incorporation, organization or
formation dated a recent date prior to the Closing Date);

(ii) Copies of its Organizational Documents, other than such Organizational
Documents required to be delivered under clause (i) above, certified as of the
Closing Date by its corporate secretary or an assistant secretary;

(iii) A certification by a Responsible Officer, certified as of the Closing
Date, that board resolutions or similar authorizing documents authorizing the
execution, delivery and performance of this Agreement and the other Loan
Documents, the borrowing of the Loans hereunder and the other transactions
contemplated hereby and thereby, have been approved by the Board of Directors of
each Loan Party and that such resolutions or documents are in full force and
effect without modification or amendment; and

(iv) An incumbency certificate of its Responsible Officers executing the Loan
Documents to which it is a party.

L. The Administrative Agent shall have received (i) a certificate executed by a
Responsible Officer of Holdings or the Borrower, certifying as to the
satisfaction of the conditions precedent specified in paragraphs A, B, C, D and
E of this Section 4.2 and (ii) a certificate executed by the chief financial
officer of Holdings, certifying that Holdings and its Subsidiaries, on a
consolidated basis after giving effect to the Transactions, are Solvent.

M. At least three Business Days before the Closing Date, the Administrative
Agent and the Lenders shall have received all documentation and other
information required by bank regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including, without
limitation the USA PATRIOT Act and the Beneficial Ownership Regulation, in each
case to the extent requested at least 10 Business Days prior to the Closing
Date.

SECTION 5.

REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to enter into this Agreement and to make the
Loans, each of Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the
Borrower jointly and severally represents and warrants to the Administrative
Agent and each Lender, on the Effective Date and on the Closing Date, that:

 

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5.1

Corporate Status; Corporate Power and Authority; Enforceability; Subsidiaries.

A. Corporate Status. Each of Holdings, U.S. Holdings, Canada Holdings, U.S.
FinCo, the Borrower 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 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
Effective Date.

 

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 other Transactions or
(c) 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, U.S. FinCo, the Borrower 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, U.S. FinCo, the Borrower 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, U.S. FinCo, the Borrower 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.

 

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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.

 

5.4

No Material Adverse Change.

Since December 31, 2017, 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 Effective Date and as of the Closing
Date, each of Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo, the Borrower
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, U.S.
FinCo, the Borrower 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.

 

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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, U.S.
FinCo or the Borrower, threatened against Holdings, U.S. Holdings, Canada
Holdings, U.S. FinCo, the Borrower, 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, U.S. FinCo, the
Borrower, 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.

 

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 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
Borrower 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 Borrower, 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

 

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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 Borrower 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 Borrower or any of their respective Subsidiaries or any
ERISA Affiliate do not exist (or are not reasonably likely to exist) nor has
Holdings, the Borrower 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 Borrower.

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 Borrower, 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 Borrower 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 Borrower, 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.

 

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5.11

Employee Matters.

There is no strike or work stoppage in existence or threatened involving
Holdings, the Borrower, Canada Holdings, U.S. 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 Effective Date, and immediately after giving effect to the borrowing of
the Loans and the consummation of the other Transactions to occur on the Closing
Date, Holdings and its Subsidiaries, 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 Closing 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 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 Borrower 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

Anti-Corruption Laws; Sanctions.

A. Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo, the Borrower, and each
of their respective Subsidiaries and, to the Knowledge of Holdings and the
Borrower, any director, officer, agent or employee of Holdings, U.S. Holdings,
Canada Holdings, U.S. FinCo, the Borrower or any of their respective
Subsidiaries are in compliance with all applicable sanctions administered or
enforced by the U.S. Department of the Treasury’s Office of Foreign Assets
Control (“OFAC”), the U.S. Department of State, the United Nations Security
Council, the European Union or Her Majesty’s Treasury (“Sanctions”) and with the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “FCPA”) and any other applicable anti-corruption law, in all
material respects. Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo, the
Borrower, and each of their respective Subsidiaries have instituted and maintain
policies and procedures designed to ensure continued compliance with applicable
Sanctions, the FCPA and any other applicable anti-corruption laws.

 

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B. None of Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo, the Borrower or
any of their respective Subsidiaries nor, to the Knowledge of Holdings or the
Borrower, any director, officer, agent or employee of Holdings, U.S. Holdings,
Canada Holdings, U.S. FinCo, the Borrower or any of their respective
Subsidiaries is currently (i) the target of any U.S. sanctions administered by
the Office of Foreign Assets Control of the U.S. Treasury Department or
(ii) located, organized or resident in a country or territory that is, or whose
government is, the target of comprehensive Sanctions.

C. The Borrower will not, directly or indirectly, use the proceeds of the Loans
or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other Person, (i) in furtherance of an offer, payment,
promise to pay, or authorization of the payment or giving of money, or anything
else of value, to any Person in violation of the FCPA or any other applicable
anti-corruption law, or (ii) (A) to fund any activities or business of or with
any Person, or in any country or territory, that, at the time of such funding,
is, or whose government is, the target of Sanctions, or (B) in any other manner
that would result in a violation of Sanctions by any Person (including any
Person participating in the Loans, whether as Administrative Agent, Arranger,
underwriter, advisor, investor, or otherwise).

 

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
Borrower and the Subsidiary Guarantors as of the 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 Borrower, Holdings, Canada Holdings, U.S. 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, U.S. FinCo and the Borrower
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 not then due and
payable), unless the Requisite Lenders shall otherwise give prior written
consent, each of Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the
Borrower shall perform, and shall cause each of their respective Subsidiaries
(to the extent applicable) to perform, all covenants in this Section 6.

 

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

 

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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 Parent or
(B) Parent’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 Parent, 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 Parent or (B) Parent’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 Parent, 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) 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) the calculations required to establish whether Holdings,

 

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U.S. Holdings, Canada Holdings, U.S. FinCo, the Borrower 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 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.

(iv) [Reserved].

(v) Events of Default, Litigation. Promptly after a Responsible Officer of
Holdings, the Borrower 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 Borrower
proposes to take with respect thereto and (ii) any litigation or governmental
proceeding pending against Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo,
the Borrower or any of the Subsidiary Guarantors that could reasonably be
expected to result in a Material Adverse Effect.

(vi) ERISA and Similar Applicable Law. Promptly after Holdings, the Borrower 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 Borrower setting forth details as to such occurrence and the
action, if any, that Holdings, the Borrower, 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 Borrower, 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, the 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, the 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

 

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of the Code with respect to a Plan; or that Holdings, the 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, the 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, the Borrower or any of their
respective Subsidiaries or any ERISA Affiliates may request with respect to any
Multiemployer Plan; provided that if Holdings, the 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, the 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

(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, U.S. FinCo, the Borrower 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, U.S. FinCo, the
Borrower 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, U.S. FinCo, the Borrower 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.

 

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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 Borrower 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 Parent, New TMM, Holdings, U.S. Holdings, Canada Holdings, U.S.
FinCo, the Borrower 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, U.S. FinCo, the Borrower or any of the Restricted Subsidiaries
shall send to the holders of any publicly issued debt of Holdings, U.S.
Holdings, Canada Holdings, U.S. FinCo, the Borrower 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.

(x) Beneficial Ownership Certification. To the extent that any Loan Party
qualifies as a “legal entity customer” under the Beneficial Ownership
Regulation, promptly after a Responsible Officer of such Loan Party obtains
actual knowledge thereof, a Beneficial Ownership Certification or notice of any
change in the information provided in the then-current Beneficial Ownership
Certification that would result in a change to the list of beneficial owners
identified in such Beneficial Ownership Certification.

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 Borrower 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 Borrower 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 Holdings, U.S. FinCo and the 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 Holdings, U.S. FinCo, the Borrower and the
Subsidiary Guarantors may consummate any transaction permitted or not otherwise
prohibited under Section 7.3 or 7.6.

 

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6.3

Payment of Taxes.

Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the 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, U.S. FinCo, the 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,
U.S. FinCo, the Borrower or any of the Restricted Subsidiaries; provided that
none of Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo, the 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.

 

6.4

Maintenance of Properties; Insurance.

A. Each of Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the Borrower
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 Borrower, 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, U.S. FinCo and the Borrower 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 Borrower
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 Borrower; 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].

 

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6.5

Inspection; Books and Records.

Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the Borrower 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,
U.S. FinCo, the Borrower, such Subsidiary Guarantor or such Specified
Subsidiary, as the case may be. Holdings, U.S. Holdings, Canada Holdings, U.S.
FinCo and the Borrower 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 Borrower and at such reasonable times during
normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to the 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 be at the Borrower’s 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 Borrower at any time during
normal business hours and upon reasonable advance notice. The Administrative
Agent and the Lenders shall give Holdings and the Borrower the opportunity to
participate in any discussions with Holdings’ independent public accountants.

 

6.6

Compliance with Statutes.

Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the Borrower 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 Borrower will cause (i) any direct or indirect wholly owned
Domestic Subsidiary of U.S. FinCo or the Borrower (other than any Unrestricted
Subsidiary or any Excluded Subsidiary) formed or otherwise purchased or acquired
after the Effective Date, (ii) any Domestic Subsidiary of U.S. FinCo or the
Borrower (other than any Unrestricted Subsidiary or any Excluded Subsidiary)
that is not a wholly owned Subsidiary on the 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 the Borrower after the 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].

 

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6.8

[Reserved].

 

6.9

Transactions with Affiliates.

Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the Borrower will, and
will cause the Restricted Subsidiaries to, enter into all transactions with any
Affiliate of Holdings or the Borrower on terms substantially as favorable to
Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo, the Borrower or such
Restricted Subsidiary as would be obtainable by Holdings, U.S. Holdings, Canada
Holdings, U.S. FinCo, the 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 or a Loan Party 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, U.S. FinCo, the Borrower and the Restricted
Subsidiaries, (d) [reserved], (e) equity issuances, repurchases, retirements or
other acquisitions or retirements of Capital Stock by U.S. FinCo or the Borrower
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, U.S. FinCo, the 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, U.S. FinCo, the 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, U.S. FinCo, the Borrower and the Restricted
Subsidiaries, (h) transactions pursuant to permitted agreements in existence on
the Effective Date or expected to be in existence on the Closing 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, U.S. FinCo, the Borrower
and any Restricted Subsidiaries to any Affiliate of any of the foregoing 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
the 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, U.S. FinCo, the
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, U.S. FinCo,
the Borrower and the Restricted Subsidiaries in connection with the Transactions
(as defined in the Existing Credit Agreement), (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)

 

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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.

 

6.10

End of Fiscal Years; Fiscal Quarters.

Each of Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the 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, U.S. FinCo and the Borrower’s past practice; provided, however, that
Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the Borrower 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, U.S. FinCo, the Borrower 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 Borrower will use 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, U.S. FinCo, the 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, U.S. FinCo, the Borrower
and each Subsidiary Guarantor, taken as a whole, on the 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 the 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 Borrower 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, as a condition precedent
to the effectiveness of any such designation, the Borrower shall deliver to the
Administrative Agent a certificate setting forth in

 

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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, U.S. FinCo or the 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 or the Existing Credit Agreement. The designation of any
Subsidiary as an Unrestricted Subsidiary shall constitute an Investment by
Holdings therein at the date of designation in an amount equal to the net book
value of Holdings’ investment therein as reflected in the most recent
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 Borrower 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, U.S. FinCo and the Borrower will, and
will cause each Subsidiary Guarantor to, promptly after the request by any
Lender, provide all documentation and other information that such Lender
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, U.S. FinCo and the Borrower
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 not then due and
payable), unless the Requisite Lenders shall otherwise give prior written
consent, Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the Borrower
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, U.S. FinCo and the Borrower will not,
nor will they permit any Subsidiary Guarantor to, directly or indirectly,
create, incur, assume or permit to exist (other than any Lien that, at the time
of the incurrence thereof, was permitted pursuant to any exception below) any
Lien upon any property or assets of any kind (real or personal, tangible or
intangible) of Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo, the
Borrower or any Subsidiary Guarantor, whether now owned or hereafter acquired,
except:

(i) Liens created in favor of the Administrative Agent and the other Guaranteed
Parties to secure the Obligations;

 

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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 Effective Date or expected to be existing on the
Closing 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 Effective Date or the Closing Date, as
applicable, 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 Borrower 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 Borrower
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, the 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 Borrower and the Subsidiary
Guarantors or (c) relating to purchase orders and other agreements entered into
with customers of U.S. FinCo, the 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, the
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
Borrower 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 Borrower 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 encumbrance or restriction imposed under any contract for
the sale by U.S. FinCo, the Borrower or any Subsidiary of U.S. FinCo or the
Borrower of the Capital Stock of any Subsidiary of U.S. FinCo or the Borrower,
or any business unit or division of the Borrower or any Subsidiary of U.S. FinCo
or the Borrower permitted or not otherwise prohibited under this Agreement;
provided that in each case such Liens shall extend only to the relevant Capital
Stock;

 

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(xxiii) Liens securing Non-Recourse Indebtedness (including, for the avoidance
of doubt, Non-Recourse Indemnity Guaranties) of U.S. FinCo, the Borrower 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 Borrower or a Subsidiary
Guarantor and (b) Guarantee Obligations incurred by U.S. FinCo, the Borrower 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) [Reserved];

(xxviii) [Reserved];

(xxix) [Reserved];

(xxx) [Reserved];

(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;

 

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(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;

(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 the Existing Credit
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; and

(xxxv) Liens on Cash or Cash Equivalents created in favor of any Issuing Bank
(as defined in the Existing Credit Agreement) to secure Letters of Credit (as
defined in the Existing Credit Agreement).

B. [Reserved].

 

7.3

Investments; Joint Ventures.

Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the Borrower will not,
nor will they permit any Subsidiary Guarantor to, make or permit to exist (other
than any Investment that, at the time of the making thereof, was permitted
pursuant to any exception below) 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, U.S. FinCo, the Borrower or any
Restricted Subsidiary 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;

(iv) Investments (a) existing or contemplated on the Effective Date or expected
to be existing or contemplated on the Closing Date and listed on Schedule 7.3
and any modifications, replacements, extensions, renewals or reinvestments
thereof and (b) Investments existing on the Effective Date or expected to be
existing on the Closing Date of the 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 or contemplated on the Effective Date or
expected to be existing or contemplated on the Closing Date;

 

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(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) the Acquisition;

(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, the 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));

(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 and (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;

 

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(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 Effective Date or
of any Person merged into U.S. FinCo or the Borrower or merged, amalgamated or
consolidated with a Subsidiary Guarantor in accordance with Section 7.6A after
the 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;

(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.

 

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Any Investment arising in connection with any transfer of funds in connection
with U.S. FinCo’s or the Borrower’s 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 Borrower 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, U.S. FinCo, the 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];

(iii) Holdings may declare and pay Dividends to any Holdings Direct Owner, the
proceeds of which are used to redeem, acquire, retire or repurchase shares of
the Capital Stock of Parent or any Parent Intermediate Holding Company (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 Parent 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

 

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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 Parent and contributed to the 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 and
(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;

(vii) Holdings may make and pay Dividends to any Holdings Direct Owner, the
proceeds of which are used to repurchase Capital Stock of Parent 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 Parent 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 any Holdings Direct Owner (or, at
the election of such Holdings Direct Owner and to the extent that such payment
would otherwise be permitted as a Dividend to such Holdings Direct Owner, may
make payments to such other Persons as such Holdings Direct Owner may specify
for the account of such Holdings Direct Owner):

(a) (x) with respect to any taxable period for which Holdings is a member of a
consolidated, combined, affiliated, unitary or similar income tax group for U.S.
federal and/or applicable state or local income tax purposes of which a direct
or indirect parent of Holdings is the common parent, or for which Holdings is a
disregarded entity for U.S. federal income tax purposes that is wholly-owned
(directly or indirectly) by a C corporation for U.S. federal and/or applicable
state or local income tax purposes, the proceeds of which will be used to pay
the tax liability to each relevant jurisdiction of such consolidated, combined,
affiliated, unitary or similar income tax group in an amount not to exceed the
amount of any U.S. federal, state and/or local income taxes that Holdings and/or
its Subsidiaries, as applicable, would have paid for such taxable period had
Holdings and/or its Subsidiaries, as applicable, been a stand-alone corporate
taxpayer or a stand-alone corporate group; and (y) with respect to any taxable
period for which Holdings is a partnership for U.S. federal income tax purposes
or for which Holdings is a disregarded entity for U.S.

 

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federal income tax purposes that is wholly-owned (directly or indirectly) by a
partnership for U.S. federal and/or applicable state or local income tax
purposes the proceeds of which will be used to pay the tax liability to each
relevant jurisdiction in respect of Holdings or the partnership of which
Holdings is a disregarded entity (including New TMM) or, in each case, 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, Parent 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 Parent;

(c) the proceeds of which shall be used by New TMM, Parent 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, Parent 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(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, Holdings, U.S.
Holdings, Canada Holdings, U.S. FinCo and the Borrower shall ensure that:

A. Capitalization Ratio. The ratio of (i) Consolidated Total Debt as of the last
day of any Fiscal 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 Parent 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 Parent or any of its
Subsidiaries and (b) the cash proceeds of any other Equity Issuance received by
Holdings after the Existing Credit Agreement Reference 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,
U.S. FinCo and the Borrower will not, nor will they permit any Subsidiary
Guarantors to, enter into any merger, consolidation, division 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 the Borrower or any other Person may be merged,
amalgamated, divided into or consolidated with or into the Borrower; provided
that (a) the Borrower shall be the continuing or surviving Person, or the Person
formed by or surviving any such merger, amalgamation, division or consolidation
(if other than the Borrower) (such surviving Person, the “Successor Borrower”)
shall be an entity organized or existing under the laws of the United States,
any state thereof, the District of Columbia or any territory thereof and, at
least five Business Days prior to such merger, amalgamation, division or
consolidation, the Administrative Agent and the Lenders shall have received all
documentation and other information required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and regulations,
(b) the Successor Borrower shall expressly assume all the obligations of the
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, division or consolidation, (d) Holdings shall be in compliance, on
a Pro Forma Basis after giving effect to such merger, amalgamation, division 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, division or consolidation had occurred on the first day of such
Test Period, (e) each Guarantor, unless it is the other party to such merger,
amalgamation, division or consolidation, 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
Borrower shall have delivered to the Administrative Agent an officer’s

 

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certificate stating that such merger, amalgamation, division 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, division or
consolidation does not violate this Agreement or any other Loan Document;
provided further, that if the foregoing are satisfied, the Successor Borrower
will succeed to, and be substituted for, the 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 the Borrower or any other Person (other
than Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo or the Borrower) may
be merged, amalgamated, divided into or consolidated with or into any one or
more Subsidiaries of U.S. FinCo or the Borrower; provided that (a) in the case
of any merger, amalgamation, division or consolidation involving one or more
Subsidiary Guarantors, (1) a Subsidiary Guarantor shall be the continuing or
surviving Person or (2) U.S. FinCo or the Borrower shall take all steps
necessary to cause the Person formed by or surviving any such merger,
amalgamation, division 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, division or consolidation
and any supplements to this Agreement preserve the enforceability of the
Guaranty;

(iii) Canada Holdings may sell, lease, transfer or otherwise dispose of any or
all of its assets (upon voluntary liquidation or otherwise) to Holdings, U.S.
Holdings or any one or more Subsidiaries of U.S. Holdings;

(iv) Canada Holdings may be merged, amalgamated or consolidated with or into
Holdings, U.S. Holdings or any one or more Subsidiaries of U.S. Holdings;
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
(including by way of division) any or all of its assets (upon voluntary
liquidation or otherwise) to U.S. FinCo, the Borrower or any other Subsidiary
Guarantor; and

(vii) any Subsidiary Guarantor may liquidate or dissolve if (A) U.S. FinCo or
the Borrower determines in good faith that such liquidation or dissolution is in
the best interests of the Borrower 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.

 

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B. Asset Sales. Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the
Borrower will not, nor will it permit any Subsidiary Guarantor to, directly or
indirectly, make any Asset Sale, except that:

(i) [Reserved];

(ii) Canada Holdings, U.S. FinCo, the Borrower and their respective Subsidiaries
may sell, lease, assign, convey, transfer or otherwise voluntarily dispose of
assets, including by way of a division (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 and (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;

(iii) Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the Borrower and
each Subsidiary Guarantor may sell, transfer or otherwise dispose of property or
assets to U.S. FinCo, the Borrower or to a Subsidiary Guarantor; provided that
if the transferor of such property is a Guarantor or the Borrower (a) the
transferee thereof must either be the 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, U.S. FinCo and the 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, U.S. FinCo and the 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, U.S. FinCo and the 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].

 

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7.9

Limitation on Debt Payments.

Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the 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 and (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, Holdings, U.S. Holdings,
Canada Holdings, U.S. FinCo, the Borrower 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 the 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 (ii) failure by the Borrower to pay any interest on any Loan or
any fee 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, U.S. FinCo, the Borrower 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, U.S. FinCo, the Borrower 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, U.S. FinCo, the Borrower 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 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 Borrower 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, U.S. FinCo, the Borrower 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, U.S.
FinCo, the Borrower 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, U.S. FinCo, the Borrower 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, U.S. FinCo, the Borrower or any
Subsidiary Guarantor; or Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo,
the Borrower 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, U.S.
FinCo, the Borrower or any Subsidiary Guarantor; or there is commenced against
Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo, the Borrower 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, U.S. FinCo,
the Borrower 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, U.S. FinCo, the
Borrower 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, U.S. FinCo, the Borrower 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, U.S.
FinCo, the Borrower 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, U.S. FinCo, the Borrower 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, U.S.
FinCo, the Borrower 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 Borrower, 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), 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 at least 35% of the outstanding
Voting Stock of Parent; and/or (b) at any time a majority of the Board of
Directors of Parent shall not be Continuing Directors; and/or (c) a change of
control, as contemplated by the definitive documentation governing the Senior
Unsecured Notes, the Existing Credit Agreement 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 the Borrower or U.S. FinCo, (ii) U.S. Holdings shall cease to have
direct or indirect ownership of all the Voting Stock of the Borrower, (iii) U.S.
Holdings shall cease to have direct or indirect ownership of all of the Voting
Stock of U.S. FinCo, (iv) [reserved], (v) the General Partner shall cease to be
the general partner of Holdings and/or (vi) Parent shall cease to have direct or
indirect ownership of all the Voting Stock of Holdings (the occurrence of any of
the foregoing, a “Change in Control”); provided that none of the fundamental
changes permitted by Section 7.6A shall constitute a Change in Control; or

 

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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;

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 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 Borrower,
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, U.S. FinCo, the Borrower 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 and (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 Borrower.

 

8.11

Clean-Up Period.

Notwithstanding anything to the contrary in this Agreement (including
Section 8.4), during the period from and including the Closing Date and ending
on the date that is 90 days after the Closing Date (the “Clean-Up Period”), any
breach of a representation or warranty (other than any Specified Representation)
in this Agreement or any other Loan Document that arises solely by reason of any
matter or circumstance relating to the Acquired Company will be deemed not to be
a breach of such representation or warranty if, and for so long as, the matters
or circumstances giving rise to the relevant breach (a) do not have and would
not reasonably be expected to have a Material Adverse Effect, (b) were not
procured or approved by the Borrower or any of its Affiliates and (c) are
capable of remedy within the Clean-Up Period and the Borrower and the Guarantors
are taking reasonable steps to remedy such breach. If the relevant matters or
circumstances are continuing on or after the expiry of the Clean-Up Period,
there shall be a breach, notwithstanding the immediately preceding sentence (and
without prejudice to the rights and remedies of the Administrative Agent and the
Lenders). For the avoidance of doubt, nothing in this Section 8.11 shall affect
the conditions precedent set forth in Section 4.

SECTION 9.

AGENTS

 

9.1

Appointment.

A. Appointment Authority. Each of the Lenders hereby irrevocably appoints
Citibank, N.A. as the Administrative Agent hereunder and under the other Loan
Documents and authorizes Citibank, N.A., in such capacity, to take such actions
on its behalf and to exercise such powers as are delegated to Citibank, N.A., 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

 

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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, U.S. FinCo, the
Borrower or any of their Subsidiaries. The provisions of this Section 9 are
solely for the benefit of the Administrative Agent and the Lenders, and
Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo, the Borrower 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, U.S. FinCo, the Borrower 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 Documents, have any duty to disclose, and shall not be liable
for the failure to disclose, any information relating to Holdings, the Borrower
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 the
Borrower or a Lender. 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

 

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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
that by its terms must be fulfilled to the satisfaction of a Lender, 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 prior to the making of such Loan. The Administrative
Agent may consult with legal counsel (who may be counsel for Holdings, the
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.

 

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, Holdings and the Borrower.
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 Borrower. Upon receipt of any such notice of resignation, the Requisite
Lenders shall have the right, with the written consent of Holdings and the
Borrower 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 Borrower 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, appoint a
successor Administrative Agent

 

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meeting the qualifications set forth above; provided that if the Administrative
Agent shall notify Holdings, the Borrower 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 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 Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between Holdings, the Borrower 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.

 

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 Borrower 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.

 

9.8

Non-Reliance on Administrative Agent and Other Lenders.

Each Lender 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 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 an Arranger or
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.

 

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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, U.S. FinCo or the 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 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 at the time owing to it); provided that

(a) except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and Loans 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 or Loans
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 or Loans assigned;

(c) any assignment of a Commitment must be consented to by the Borrower and the
Administrative Agent (in each case, not to be unreasonably withheld, delayed or
conditioned); provided, that the consent of the Borrower 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 Borrower shall be deemed to have been given if the Borrower has
not responded within ten Business Days of its 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

 

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(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 Borrower’s 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 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 Borrower 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 Borrower, 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
Borrower, the Administrative Agent 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.

 

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D. Participations. Any Lender may at any time, without the consent of, or notice
to, the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or Holdings, U.S. Holdings, Canada Holdings, U.S.
FinCo, the Borrower 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 Borrower, 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 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, the 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 Borrower, 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 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 Borrower’s 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 Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the Borrower,
to comply with Section 2.7E(vi) as though it were a Lender.

 

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F. Certain Pledges. Any Lender may, without the consent of the Administrative
Agent or the 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 the 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.

G. Affiliated Lenders. None of Holdings or any of its Subsidiaries or Affiliates
may acquire by assignment, participation or otherwise any right or interest in
any of the Commitments or Loans hereunder (and any such attempted acquisition
shall be null and void).

H. [Reserved].

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 Borrower.

 

10.2

Expenses; Indemnity; Damage Waiver.

A. Costs and Expenses. Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and
the Borrower shall, jointly and severally, pay (i) all reasonable and documented
out-of-pocket expenses incurred by the Administrative Agent, the Arranger 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) [reserved]; and (iii) all out-of-pocket expenses incurred
by the Administrative Agent or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender, 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 hereunder, including all
such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.

 

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B. Indemnification. Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the
Borrower shall, jointly and severally, indemnify the Arranger, the
Administrative Agent (and any sub-Agent thereof), 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 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 the
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 or other similar role under this Agreement and other than claims
arising out of any act or omission of the Borrower or any of their affiliates or
(D) arise from settlement of any claim, litigation, investigation or proceeding
effected without the consent of the Borrower, 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
Borrower was 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 Borrower 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 Borrower 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 the 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) 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 Administrative Agent (or any such
sub-Agent) 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) 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) in connection with such capacity. The obligations of the
Lenders under this Section 10.2C are subject to the provisions of Section 10.12.

 

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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 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 or the
Lenders, if an Event of Default shall have occurred and be continuing, the
Administrative Agent, each Lender 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, 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 or Lender 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 or Lender different from the branch
or office holding such deposit or obligated on such indebtedness. The rights of
the Administrative Agent, Lenders, 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, the Lenders or their
respective Affiliates may have. The Administrative Agent and each Lender agrees
promptly to notify the Borrower 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.

 

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

 

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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 the
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, U.S. FinCo, the Borrower
or any of their respective Subsidiaries (as to which the provisions of this
paragraph shall apply). Each of Holdings, U.S. Holdings, Canada Holdings, U.S.
FinCo and the Borrower 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 Borrower rights of setoff and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of Holdings
or the 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
the 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”; (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 or the scheduled date of termination of
any of the Commitments; (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 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

 

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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) [reserved], and
(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. 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. 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 Borrower in any case shall entitle the Borrower 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 Borrower, on the Borrower 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) 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 shall not have received, within five (5) Business Days of the date of such
notice to the Lenders, a written notice from the Requisite Lenders stating that
the Requisite Lenders object 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
Borrower 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 Borrower, 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 Borrower have otherwise agreed; provided that
(i) the Administrative Agent shall waive, or the Borrower 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 Borrower, 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.

 

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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 the Borrower, Holdings or any Subsidiary of Holdings, to the 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 Citibank, N.A., at Citibank, N.A., 1615 Brett
Road, Building 3, New Castle, DE 19720 , attention of Bank Loans Syndications
Department (Facsimile No. (646) 274-5080; E-mail GLAgentOfficeOps@citi.com),
with a copy to Michael Vondriska, 388 Greenwich Street, 7th floor, New York, NY
10013 (Facsimile No. (646) 291-5115; Telephone No. (212) 723-3746; E-mail:
michael.vondriska@citi.com; 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 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
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 pursuant to Section 2.1 if such Lender has notified the
Administrative Agent that it is incapable of receiving notices under such
Section by electronic communication. The Administrative Agent or the 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.

 

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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 hereunder.

B. Notwithstanding anything in this Agreement or implied by law to the contrary,
the agreements of Holdings and the 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 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.

 

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 Borrower, any other Loan Party or any other
party or against or in payment of any or all of the Obligations. To the extent
that the 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 hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
the Lenders pursuant hereto or thereto, shall be deemed to constitute the
Lenders as a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.

 

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10.13

Maximum Amount.

A. It is the intention of Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo
the Borrower 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, 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 jurisdiction) hereunder or under the other Loan Documents or
in any other agreement given to secure the Indebtedness or obligations of the
Borrower 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 Borrower 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 Borrower or any endorser of
the Notes and the Lenders.

B. If under any circumstances any Lender 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 the Borrower in favor of such Lender,
the excess shall be deemed to have been a payment made by mistake and shall be
refunded to the Borrower.

 

10.14

Headings.

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.

 

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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; PROVIDED THAT,
NOTWITHSTANDING THE FOREGOING, IT IS UNDERSTOOD AND AGREED THAT ANY
DETERMINATIONS AS TO (A) WHETHER ANY MERGER AGREEMENT REPRESENTATIONS HAVE BEEN
BREACHED, (B) WHETHER THE BORROWER, HOLDINGS OR ANY OF THEIR AFFILIATES HAVE THE
RIGHT TO TERMINATE THE MERGER AGREEMENT (OR OTHERWISE DECLINE TO CONSUMMATE THE
ACQUISITION), (C) WHETHER A COMPANY MATERIAL ADVERSE EFFECT (AS DEFINED IN THE
MERGER AGREEMENT AS IN EFFECT ON THE DATE THEREOF) HAS OCCURRED AND (D) WHETHER
THE ACQUISITION HAS BEEN CONSUMMATED IN ACCORDANCE WITH THE TERMS OF THE MERGER
AGREEMENT, SHALL, IN EACH CASE, BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.

 

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, U.S. FinCo or the Borrower’s rights or obligations
hereunder or any interest therein may be assigned or delegated by Holdings, U.S.
Holdings, Canada Holdings, U.S. FinCo or the Borrower without the prior written
consent of all Lenders.

 

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 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, U.S. FINCO, THE
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.

 

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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 Holdings and Canada Holdings
irrevocably designates and appoints the Borrower (in such capacity, the “Process
Agent”) as its authorized agent upon which process may be served. Each of
Holdings and Canada 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.

 

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 and each Lender 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

 

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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,
U.S. FinCo, the Borrower and their respective obligations, (g) with the consent
of the Borrower (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 and the Lenders 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 Administrative Agent or any 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 Borrower of
such proposed disclosure as far in advance of such disclosure as practicable
and, at the request of the Borrower 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 Effective
Date, is identified as confidential by the Borrower 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 Borrower 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 Borrower 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.

 

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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.

 

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 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 and the
Lenders to identify the Loan Party, and, if the Loan Party is not an individual,
the Administrative Agent 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 and the Lenders to identify the Loan Party. The
Administrative Agent 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 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).

 

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10.22

Agency of the Borrower for each other Loan Party.

Each of Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo and the other Loan
Parties appoints the 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, U.S. FinCo and the Borrower
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, 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, U.S. FinCo, the Borrower and the other
Loan Parties and their respective Affiliates, on the one hand, and the
Administrative Agent, the Arranger and the Lenders, on the other hand, and
Holdings, U.S. Holdings, Canada Holdings, U.S. FinCo, the Borrower 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, the 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, U.S. FinCo, the
Borrower, any other Loan Party or any of their respective Affiliates,
stockholders, creditors or employees or any other person; (c) none of the
Administrative Agent, the Arranger or any Lender has assumed or will assume an
advisory, agency or fiduciary responsibility in favor of Holdings, U.S.
Holdings, Canada Holdings, U.S. FinCo, the Borrower 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, the Arranger or any Lender has advised or is currently advising Holdings,
U.S. Holdings, Canada Holdings, U.S. FinCo, the Borrower or any other Loan Party
or their respective Affiliates on other matters) and none of the Administrative
Agent, the Arranger or any Lender has any obligation to any of Holdings, U.S.
Holdings, Canada Holdings, U.S. FinCo, the Borrower, 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 Arranger, 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, U.S. FinCo, the Borrower and the other Loan Parties and their
respective Affiliates, and none of the Administrative Agent, the 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 Arranger 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, U.S. FinCo, the Borrower 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, U.S. FinCo, the
Borrower, 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 Arranger and the Lenders with
respect to any breach or alleged breach of agency or fiduciary duty.

 

   107    CREDIT AGREEMENT

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10.24

Judgment Currency.

The obligations of the Borrower and the other Loan Parties hereunder and under
the other Loan Documents to make payments in Dollars shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than Dollars, except to the extent that such
tender or recovery results in the effective receipt by the Administrative Agent
of the full amount in Dollars expressed to be payable to the Administrative
Agent under this Agreement or the other Loan Documents. If, for the purpose of
obtaining or enforcing judgment against the 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 Dollars (such currency being hereinafter referred
to as the “Judgment Currency”) an amount due in Dollars, the conversion shall be
made at the rate of exchange at which, in accordance with normal banking
procedures in the relevant jurisdiction, Dollars could be purchased with such
other currency, determined 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
Borrower covenants and agrees 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 Dollars 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 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 Dollars.

 

10.25

[Reserved].

 

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 Borrower 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.

 

   108    CREDIT AGREEMENT

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10.27

Acknowledgment and Consent to Bail-In of EEA Financial Institutions.

Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among the parties hereto, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Document to the extent such liability is unsecured, may be
subject to the Write-Down and Conversion Powers of any EEA Resolution Authority
and agrees and consents to, and acknowledges and agrees to be bound by:

(i) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(ii) the effects of any Bail-In Action on any such liability, including, if
applicable, (a) a reduction in full or in part or cancellation of any such
liability, (b) a conversion of all, or a portion of, such liability into shares
or other instruments of ownership in such EEA Financial Institution, its parent
entity or a bridge institution that may be issued to it or otherwise conferred
on it, and that such shares or other instruments of ownership will be accepted
by it in lieu of any rights with respect to any such liability under this
Agreement or any other Loan Document or (c) the variation of the terms of such
liability in connection with the exercise of the Write-Down and Conversion
Powers of any EEA Resolution Authority.

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   109    CREDIT AGREEMENT

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

 

TAYLOR MORRISON COMMUNITIES, INC., By:  

/s/ Darrell C. Sherman

  Name: Darrell C. Sherman  

Title: Chief Legal Officer,

          Executive Vice President and Secretary

TMM HOLDINGS LIMITED PARTNERSHIP,

 

By: TMM Holdings (G.P.) ULC, its General Partner

By:  

/s/ Sheryl D. Palmer

  Name: Sheryl D. Palmer   Title: Director TAYLOR MORRISON HOLDINGS II, INC.,
By:  

/s/ Darrell C. Sherman

 

Name: Darrell C. Sherman

 

Title: Chief Legal Officer,

          Executive Vice President and Secretary

TAYLOR MORRISON HOLDINGS, INC., By:  

/s/ Darrell C. Sherman

 

Name: Darrell C. Sherman

 

Title: Chief Legal Officer,

          Executive Vice President and Secretary

TAYLOR MORRISON FINANCE, INC., By:  

/s/ Darrell C. Sherman

 

Name: Darrell C. Sherman

 

Title: Chief Legal Officer,

          Executive Vice President and Secretary

 

      CREDIT AGREEMENT

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CITIBANK, N.A., individually and as Administrative Agent, By:  

/s/ Michael Vondriska

  Name: Michael Vondriska   Title: Vice President

 

      CREDIT AGREEMENT