Exhibit 10.7

EXECUTION VERSION

 

 

 

U.S. PARENT GOVERNANCE AGREEMENT

BY AND AMONG

TAYLOR MORRISON HOME CORPORATION,

TAYLOR MORRISON HOLDINGS, INC.,

TPG TMM HOLDINGS II, L.P.,

OCM TMM HOLDINGS II, L.P.

AND

JHI HOLDING LIMITED PARTNERSHIP

DATED AS OF APRIL 9, 2013

 

 

 

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TABLE OF CONTENTS

 

Article I DEFINITIONS

     2  

Section 1.1

 

Definitions

     2  

Section 1.2

 

Other Interpretive Provisions

     5  

Article II REPRESENTATIONS AND WARRANTIES

     5  

Section 2.1

 

Existence; Authority; Enforceability

     5  

Section 2.2

 

Absence of Conflicts

     5  

Section 2.3

 

Consents

     6  

Article III GOVERNANCE

     6  

Section 3.1

 

The U.S. Parent Board

     6  

Section 3.2

 

U.S. Parent Activities; Approvals

     7  

Article V GENERAL PROVISIONS

     8  

Section 4.1

 

Freedom to Pursue Opportunities

     8  

Section 4.2

 

Assignment; Benefit

     9  

Section 4.3

 

Termination

     9  

Section 4.4

 

Severability

     9  

Section 4.5

 

Entire Agreement; Amendment

     9  

Section 4.6

 

Counterparts

     10  

Section 4.7

 

Notices

     10  

Section 4.8

 

Governing Law

     13  

Section 4.9

 

Jurisdiction

     13  

Section 4.10

 

Waiver of Jury Trial

     13  

Section 4.11

 

Specific Performance

     13  

 

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

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

ii. Taylor Morrison Holdings, Inc., a Delaware corporation (the “U.S. Parent”);

iii. TPG TMM Holdings II, L.P., a Cayman Islands limited partnership (together
with its Affiliates, “TPG”);

iv. OCM TMM Holdings II, L.P., a Cayman Islands limited partnership (together
with its Affiliates, “Oaktree”); and

v. JHI Holding Limited Partnership, a British Columbia limited partnership
(together with its Affiliates, “JHI”).

For purposes of this Agreement, each of TPG and Oaktree is a “Principal Sponsor”
and each of TPG, Oaktree and JHI is an “Investor”.

RECITALS

WHEREAS, on July 13, 2011, TMM Holdings (G.P.) Inc., TMM Holdings Limited
Partnership (the “Partnership”), the U.S. Parent and certain stockholders party
thereto entered into a Governance Agreement (the “Prior Agreement”);

WHEREAS, pursuant to a Reorganization Agreement dated the date hereof, the
Company, the Partnership, the Investors and certain other Persons have effected
a series of reorganization transactions (collectively, the “Reorganization
Transactions”);

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

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

WHEREAS, the Partnership owns 100% of the equity interests in U.S. Parent and
Monarch Communities Inc., a British Columbia corporation (“Canadian Parent”);

 

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WHEREAS, the Prior Agreement is being terminated by the parties thereto as of
the Closing; and

WHEREAS, the parties hereto desire to provide for the governance of the U.S.
Parent.

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

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. As used in this Agreement, the following terms shall
have the following meanings:

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

“Agreement” has the meaning set forth in the Preamble.

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

“Canadian Parent” has the meaning set forth in the Recitals.

“Canadian Parent Governance Agreement” means the Canadian Parent Governance
Agreement, dated as of the date hereof, by and among the Company, the
Partnership, Canadian Parent and the other parties thereto.

“Class A Common Stock” has the meaning set forth in the Recitals.

“Class B Common Stock” has the meaning set forth in the Recitals.

“Closing” means the closing of the IPO.

“Common Stock” has the meaning set forth in the Recitals.

“Company” has the meaning set forth in the Preamble.

“Company Board” means the board of directors of the Company.

 

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“Company Shares” means (i) all shares of Common Stock that are not then subject
to vesting (including shares that were at one time subject to vesting to the
extent they have vested), (ii) all shares of Common Stock issuable upon
exercise, conversion or exchange of any option, warrant or convertible security
that are not then subject to vesting (including shares that were at one time
subject to vesting to the extent they have vested) (without double counting
shares of Class A Common Stock issuable upon an exchange of shares of Class B
Common Stock together with New TMM Units) and (iii) all shares of Common Stock
directly or indirectly issued or issuable with respect to the securities
referred to in clauses (i) or (ii) above by way of unit or stock dividend or
unit or stock split, or in connection with a combination of units or shares,
recapitalization, merger, consolidation or other reorganization.

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

“Debt Threshold” means an amount equal to $50.0 million.

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

“Fund Indemnitors” has the meaning set forth in Section 3.1(d).

“Indemnitee” has the meaning set forth in Section 3.1(d).

“Investor” has the meaning set forth in the Preamble.

“IPO” has the meaning set forth in the Recitals

“JHI” has the meaning set forth in the Preamble.

“JHI Designee” has the meaning set forth in the Company Stockholders Agreement.

“Loan Threshold” means an amount equal to $50.0 million.

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

“Necessary Action” shall mean, with respect to a specified result, all actions
necessary to cause such result, including (i) voting or providing a written
consent or proxy with respect to the Company Shares, (ii) causing the adoption
of stockholders’ resolutions and amendments to the organizational documents of
the Company, (iii) executing agreements and instruments, and (iv) making, or
causing to be made, with governmental, administrative or regulatory authorities,
all filings, registrations or similar actions that are required to achieve such
result.

 

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“Oaktree” has the meaning set forth in the Preamble.

“Partnership” has the meaning set forth in the Preamble.

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

“Principal Sponsor” has the meaning set forth in the Preamble.

“Principal Sponsor Designee” has the meaning set forth in the Company
Stockholders Agreement.

“Principal Sponsor Minimum” means, with respect to a Principal Sponsor, a number
of shares of Common Stock equal to at least 50% of the outstanding shares of
Common Stock owned by such Principal Sponsor as of the closing of all of the
transactions contemplated by the Underwriting Agreement and the Put/Call
Agreement, or, if no such closing occurs prior to June 30, 2013, the Closing.

“Purchase Consideration Threshold” means an amount equal to $50.0 million.

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

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

“Requisite Investor Approval” means (a) for so long as each Principal Sponsor
holds at least the Principal Sponsor Minimum, the approval of a majority of the
U.S. Parent Board, including in each case at least one Principal Sponsor
Designee of each Principal Sponsor; (b) to the extent only one Principal Sponsor
holds the Principal Sponsor Minimum, the approval of a majority of the U.S.
Parent Board, including in each case at least one Principal Sponsor Designee of
such Principal Sponsor. At such time as neither Principal Sponsor holds at least
the Principal Sponsor Minimum, any action requiring “Requisite Investor
Approval” shall be determined by U.S. Parent or the U.S. Parent Board in
accordance with applicable law.

“Sale Consideration Threshold” means an amount equal to $50.0 million.

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

“TPG” has the meaning set forth in the Preamble.

 

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“Underwriting Agreement” has the meaning set forth in the Recitals.

“U.S. Parent” has the meaning set forth in the Preamble.

“U.S. Parent Board” means the board of directors (or equivalent) of the U.S.
Parent.

Section 1.2 Other Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.

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

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

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

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

ARTICLE II

REPRESENTATIONS AND WARRANTIES

Each of the parties to this Agreement hereby represents and warrants to each
other party to this Agreement that as of the date such party executes this
Agreement:

Section 2.1 Existence; Authority; Enforceability. Such party has the power and
authority to enter into this Agreement and to carry out its obligations
hereunder. Such party is duly organized and validly existing under the laws of
its jurisdiction of organization, and the execution of this Agreement, and the
consummation of the transactions contemplated herein, have been authorized by
all necessary action on the part of its board of directors (or equivalent) and
shareholders (or other holders of equity interests), if required, and no other
act or proceeding on its part is necessary to authorize the execution of this
Agreement or the consummation of any of the transactions contemplated hereby.
This Agreement has been duly executed by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.

Section 2.2 Absence of Conflicts. The execution and delivery by such party of
this Agreement and the performance of its obligations hereunder does not and
will not (a) conflict with, or result in the breach of any provision of the
constitutive documents of such party, (b) result in any violation, breach,
conflict, default or an event of default (or an event which with notice, lapse
of time, or both, would constitute a default or an event of default), or give
rise to any right of acceleration or termination or any additional payment
obligation, under the terms of any contract, agreement or permit to which such
party is a party or by which such party’s assets or operations are bound or
affected, or (c) violate any law applicable to such party.

 

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Section 2.3 Consents. Other than as expressly required herein or any consents
which have already been obtained, no consent, waiver, approval, authorization,
exemption, registration, license or declaration is required to be made or
obtained by such party in connection with (a) the execution, delivery or
performance of this Agreement or (b) the consummation of any of the transactions
contemplated herein.

ARTICLE III

GOVERNANCE

Section 3.1 The U.S. Parent Board.

(a) Composition of the U.S. Parent Board. The Company and U.S. Parent shall take
all Necessary Action to cause the composition of the U.S. Parent Board to be
identical at all times to the composition of the Company Board; provided, that,
notwithstanding anything to the contrary set forth in this Section 3.1(a), in
the event that a Principal Sponsor Designee or JHI Designee is not elected to
the Company Board at the applicable annual or special meeting of the
shareholders at which such nominee is up for election (or re-election) to the
Company Board, the Company and U.S. Parent shall take all Necessary Action to
cause such Principal Sponsor Designee or JHI Designee to be appointed or elected
to the U.S. Parent Board; provided, further, that the Company shall take all
Necessary Action to fill any vacancy caused by the removal or resignation of any
such Principal Sponsor Designee or JHI Designee with a replacement director
designated by the applicable Principal Sponsor or JHI, as applicable, unless the
election or appointment of such a replacement would result in a number of
directors designated by such Investor in excess of the number of directors that
such Investor is then entitled to designate for election pursuant to
Section 3.1(b) or Section 3.1(c) of the Company Stockholders Agreement, as
applicable.

(b) Composition of U.S. Parent Board Committees. The Company and U.S. Parent
shall take all Necessary Action to cause there to be an audit committee, a
compensation committee and a nominating and governance committee of the U.S.
Parent Board in addition to such other committees of the U.S. Parent Board as
the U.S. Parent Board determines. Subject to applicable laws and stock exchange
regulations, each Principal Sponsor shall have the right to have a
representative appointed to serve on each committee of the U.S. Parent Board for
so long as such Principal Sponsor shall have the right to designate at least one
(1) director for election to the Company Board. Subject to applicable laws and
stock exchange regulations and for so long as such Principal Sponsor shall have
the right to designate at least one (1) director for election to the Company
Board, each Principal Sponsor shall have the right to have a representative
appointed as an observer to any committee of the U.S. Parent Board to which such
Principal Sponsor (i) does not elect to have a representative appointed or
(ii) is prohibited by applicable laws or stock exchange regulations from having
a representative appointed.

(c) Reimbursement of Expenses. U.S. Parent shall, and shall cause each of its
direct and indirect subsidiaries to, reimburse their directors for all
reasonable out-of-pocket expenses incurred in connection with their
participation in the meetings of the U.S. Parent Board or any committees
thereof, including reasonable travel, lodging and meal expenses.

 

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(d) D&O Insurance; Indemnification Priority. U.S. Parent shall obtain customary
director and officer indemnity insurance on commercially reasonable terms. The
Company and U.S. Parent hereby acknowledge that any director, officer or other
indemnified person covered by any such indemnity insurance policy (any such
Person, an “Indemnitee”) may have certain rights to indemnification, advancement
of expenses and/or insurance provided by TPG, Oaktree or one or more of their
respective Affiliates (collectively, the “Fund Indemnitors”). The Company and
U.S. Parent hereby (i) agree that the Company, the Partnership, U.S. Parent and
their respective direct and indirect subsidiaries shall be the indemnitors of
first resort (i.e., their respective obligations to an Indemnitee shall be
primary and any obligation of any Fund Indemnitor to advance expenses or to
provide indemnification for the same expenses or liabilities incurred by
Indemnitee shall be secondary) and the obligation of the Company, the
Partnership, U.S. Parent and their respective direct and indirect subsidiaries
to indemnify and advance expenses to an Indemnitee shall be joint and several,
and (ii) irrevocably waive, relinquish and release the Fund Indemnitors from any
and all claims against the Fund Indemnitors for contribution, subrogation or any
other recovery of any kind in respect thereof. The Company and U.S. Parent
further agree that no advancement or payment by the Fund Indemnitors on behalf
of an Indemnitee with respect to any claim for which such Indemnitee has sought
indemnification from the Company or U.S. Parent, as the case may be, shall
affect the foregoing and the Fund Indemnitors shall have a right of contribution
and/or to be subrogated to the extent of such advancement or payment to all of
the rights of recovery of such Indemnitee against the Company and U.S. Parent as
the case may be.

Section 3.2 U.S. Parent Activities; Approvals.

(a) U.S. Parent shall not take, and shall cause each of its direct and indirect
subsidiaries not to take, any of the following actions without prior Requisite
Investor Approval:

 

  i. Any transaction or series of related transactions (i) in which any Person
or Persons (other than TPG, Oaktree, the Partnership or the Company) acquires in
excess of 50% of the then outstanding shares of capital stock of U.S. Parent
(whether by merger, consolidation, sale or transfer of partnership interests,
tender offer, exchange offer, reorganization, recapitalization or otherwise) or
(ii) following which any Person or Persons (other than TPG, Oaktree, the
Partnership or the Company) have the direct or indirect power to elect a
majority of the members of the board of directors (or equivalent) of U.S.
Parent;

 

  ii. Any transaction or series of related transactions involving the sale,
lease, exchange or other disposal by U.S. Parent or any of its direct or
indirect subsidiaries of any of their respective assets for consideration having
a fair market value (as reasonably determined by the U.S. Parent Board) in
excess of the Sale Consideration Threshold, other than intercompany transactions
between and among direct or indirect wholly-owned subsidiaries of the
Partnership;

 

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  iii. Any transaction or series of related transactions involving the purchase,
rent, license, exchange or other acquisition by U.S. Parent or any of its direct
or indirect subsidiaries of any assets (including securities) for consideration
having a fair market value (as reasonably determined by the U.S. Parent Board)
in excess of the Purchase Consideration Threshold, other than intercompany
transactions between and among direct or indirect wholly-owned subsidiaries of
the Partnership;

 

  iv. The hiring or termination of the chief executive officer of U.S. Parent;

 

  v. (A) any incurrence of indebtedness by U.S. Parent or any of its direct or
indirect subsidiaries if, after taking into account the incurrence of such
indebtedness, the aggregate outstanding indebtedness of U.S. Parent and its
direct and indirect subsidiaries would exceed the Debt Threshold, or (B) the
making of any loan, advance or capital contribution to any Person (other than
U.S. Parent or any of its direct or indirect subsidiaries) by U.S. Parent or any
of its direct or indirect subsidiaries in excess of the Loan Threshold; and

 

  vi. Any change in the composition of the U.S. Parent Board other than in
accordance with Section 3.1(a).

Each of TPG and Oaktree acknowledges and agrees that Requisite Investor Approval
has been obtained with respect to all actions taken and transactions undertaken
in connection with the IPO.

ARTICLE IV

GENERAL PROVISIONS

Section 4.1 Freedom to Pursue Opportunities. The parties expressly acknowledge
and agree that: (i) each Investor, each Representative of an Investor and each
director or officer of the Company, the Partnership, U.S. Parent or any of their
respective subsidiaries that is an Affiliate of an Investor (each, an “Investor
Designee”) has the right to, and has no duty (contractual or otherwise) not to,
(x) directly or indirectly engage in the same or similar business activities or
lines of business as the Company, the Partnership, U.S. Parent or any of their
respective subsidiaries, including those deemed to be competing with the
Company, the Partnership, U.S. Parent or any of their respective subsidiaries,
or (y) directly or indirectly do business with any client, customer or supplier
of the Company, the Partnership or any of their respective subsidiaries; and
(ii) in the event that any Investor, any Representative of an Investor or any
Investor Designee acquires knowledge of a potential transaction or matter that
may be a corporate opportunity for the Company, the Partnership, U.S. Parent or
any of their respective subsidiaries, such Investor, Representative, or Investor
Designee shall have no duty (contractual or otherwise) to communicate or present
such corporate opportunity to the Company, the Partnership, U.S. Parent or any
of their respective subsidiaries, as the case may be, and, notwithstanding any
provision of this Agreement to the contrary, shall not be liable to the Company,
the Partnership, U.S. Parent or any of their respective Affiliates,
subsidiaries, stockholders or other equity holders for breach of any duty
(contractual or otherwise) by reason

 

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of the fact that such Investor, Representative or Investor Designee, directly or
indirectly, pursues or acquires such opportunity for itself, directs such
opportunity to another Person, or does not present such opportunity to the
Company, the Partnership, U.S. Parent or any of their respective subsidiaries.
For the avoidance of doubt, the provisions of this Section 4.1 shall have
independent effect with respect to, and shall not be construed as being in lieu
of or otherwise limiting, any separate obligations of any Person under any
agreement between such Person and U.S. Parent and/or any direct or indirect
subsidiary thereof, including any agreement related to noncompetition,
nonsolicitation, confidentiality or other restrictions on the activities or
operations of such Person.

Section 4.2 Assignment; Benefit.

(a) The rights and obligations hereunder shall not be assignable without the
prior written consent of the other parties hereto; provided that each of TPG and
Oaktree may assign its rights and obligations hereunder to any of its respective
Affiliates without the prior written consent of the other parties hereto. Any
attempted assignment of rights or obligations in violation of this Section 4.2
shall be null and void.

(b) This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto, and their respective successors and permitted assigns, and there
shall be no third-party beneficiaries to this Agreement other than the
Indemnitees and the Fund Indemnitors under Section 3.1(l) and the Investors,
their Representatives and the Investor Designees under Section 4.1.

Section 4.3 Termination. If not otherwise stipulated, this Agreement shall
terminate automatically (without any action by any party hereto) as to each
Investor as of the later of (i) when such Investor no longer owns any shares of
Common Stock, or (ii) when such Investor no longer has the right to nominate any
directors to the Company Board pursuant to Article III hereof.

Section 4.4 Severability. In the event that any provision of this Agreement
shall be invalid, illegal or unenforceable such provision shall be construed by
limiting it so as to be valid, legal and enforceable to the maximum extent
provided by law and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

Section 4.5 Entire Agreement; Amendment.

(a) This Agreement (together with the Company Stockholders Agreement and the
Canadian Parent Governance Agreement) sets forth the entire understanding and
agreement between the parties with respect to the transactions contemplated
herein and supersedes and replaces any prior understanding, agreement or
statement of intent, in each case written or oral, of any kind and every nature
with respect hereto. Except as set forth above, there are no other agreements
with respect to the governance of U.S. Parent among the Company, U.S. Parent,
TPG, Oaktree and JHI. This Agreement or any provision hereof may only be
amended, modified or waived, in whole or in part, at any time by an instrument
in writing signed by each of the Principal Sponsors as to which this Agreement
has not terminated; provided that the prior written consent of any Investor
shall be required for any amendment, modification or waiver that would have a
disproportionate and adverse effect in any material respect on the rights of
such Investor relative to the other Investors.

 

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(b) No waiver of any breach of any of the terms of this Agreement shall be
effective unless such waiver is expressly made in writing and executed and
delivered by the party against whom such waiver is claimed. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate or
be construed as a further or continuing waiver of such breach or as a waiver of
any other or subsequent breach. Except as otherwise expressly provided herein,
no failure on the part of any party to exercise, and no delay in exercising, any
right, power or remedy hereunder, or otherwise available in respect hereof at
law or in equity, shall operate as a waiver thereof, nor shall any single or
partial exercise of such right, power or remedy by such party preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.

Section 4.6 Counterparts. This Agreement may be executed in any number of
separate counterparts each of which when so executed shall be deemed to be an
original and all of which together shall constitute one and the same agreement.
Counterpart signature pages to this Agreement may be delivered by facsimile or
electronic delivery (i.e., by email of a PDF signature page) and each such
counterpart signature page will constitute an original for all purposes.

Section 4.7 Notices. Unless otherwise specified herein, all notices, consents,
approvals, reports, designations, requests, waivers, elections and other
communications authorized or required to be given pursuant to this Agreement
shall be in writing and shall be given, made or delivered by personal
hand-delivery, by facsimile transmission, by electronic mail, by mailing the
same in a sealed envelope, registered first-class mail, postage prepaid, return
receipt requested, or by air courier guaranteeing overnight delivery (and such
notice shall be deemed to have been duly given, made or delivered (a) on the
date received, if delivered by personal hand delivery, (b) on the date received,
if delivered by facsimile transmission, by electronic mail or by registered
first-class mail prior to 5:00 p.m. prevailing local time on a Business Day, or
if delivered after 5:00 p.m. prevailing local time on a Business Day or on other
than a Business Day, on the first Business Day thereafter and (c) two
(2) Business Days after being sent by air courier guaranteeing overnight
delivery), at the following addresses (or at such other address as shall be
specified by like notice):

if to the Company to:

Taylor Morrison Home Corporation

4900 North Scottsdale Road, Suite 2000

Scottsdale, AZ 85251

  Attention: Darrell Sherman,

       Vice President and General Counsel

  Facsimile: (866) 390-2612

  E-mail: dsherman@taylormorrison.com

 

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

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York

USA 10019-6064

  Attention: John C. Kennedy

       Lawrence G. Wee

  Facsimile: (212) 757-3990

  E-mail: jkennedy@paulweiss.com

       lwee@paulweiss.com

if to U.S. Parent to:

Taylor Morrison Holdings, Inc.

c/o Taylor Morrison Home Corporation

4900 North Scottsdale Road, Suite 2000

Scottsdale, AZ 85251

  Attention: Darrell Sherman,

       Vice President and General Counsel

  Facsimile: (866) 390-2612

  E-mail: dsherman@taylormorrison.com

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

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York

USA 10019-6064

  Attention: John C. Kennedy

       Lawrence G. Wee

  Facsimile: (212) 757-3990

  E-mail: jkennedy@paulweiss.com

       lwee@paulweiss.com

if to TPG, to:

TPG Global, LLC

301 Commerce Street, Suite 3300

Fort Worth, TX

USA 76102

  Attention: Ronald Cami

  Facsimile: (415) 743-1501

  E-mail: rcami@tpg.com

 

11

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

Ropes & Gray LLP

The Prudential Tower

800 Boylston Street

Boston, Massachusetts

USA 02199

  Attention: Alfred O. Rose

       Julie H. Jones

  Facsimile: (617) 951-7050

  E-mail: alfred.rose@ropesgray.com

       julie.jones@ropesgray.com

if to Oaktree:

Oaktree Capital Management, L.P.

333 South Grand Ave., 28th Floor

Los Angeles, CA 90071

  Attention: Kenneth Liang

  Facsimile.: (213) 830-6293

  E-mail: kliang@oaktreecapital.com

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

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York

USA 10022

  Attention: George E.B. Maguire

       Jasmine Ball

  Facsimile: (212) 909-6836

  E-mail: gebmaguire@debevoise.com

       jball@debevoise.com

if to JHI, to:

JHI Holdings Limited Partnership

c/o JHI Advisory Inc.

Suite 3260 - 666 Burrard Street

Vancouver, British Columbia

Canada V6C 2X8

  Attention: G. Gail Edwards

  Facsimile: (604) 648-6685

  E-mail: gedwards@jhinvest.com

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

McCarthy Tétrault LLP

1300 - 777 Dunsmuir Street

Vancouver, British Columbia

Canada V7Y 1K2

  Attention: Cameron Belsher

  Facsimile: (604) 622-5674

  E-mail: cbelsher@mccarthy.ca

 

12

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Section 4.8 Governing Law. THIS AGREEMENT AND ANY RELATED DISPUTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.

Section 4.9 Jurisdiction. ANY ACTION OR PROCEEDING AGAINST THE PARTIES RELATING
IN ANY WAY TO THIS AGREEMENT MAY BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE
STATE OF DELAWARE OR (TO THE EXTENT SUBJECT MATTER JURISDICTION EXISTS
THEREFORE) THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, AND
THE PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF BOTH SUCH COURTS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING. ANY ACTIONS OR PROCEEDINGS TO ENFORCE
A JUDGMENT ISSUED BY ONE OF THE FOREGOING COURTS MAY BE ENFORCED IN ANY
JURISDICTION.

Section 4.10 Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW THAT CANNOT BE WAIVED, EACH PARTY HERETO WAIVES, AND COVENANTS THAT SUCH
PARTY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT
TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING
ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY
CONNECTED WITH THE DEALINGS OF ANY SHAREHOLDER OR THE GENERAL PARTNER IN
CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE. EACH PARTY HERETO
ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS
SECTION 4.10 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND
WILL RELY IN ENTERING INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION 4.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH
PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

Section 4.11 Specific Performance. It is hereby agreed and acknowledged that it
will be impossible to measure in money the damages that would be suffered if the
parties fail to comply with any of the obligations herein imposed on them by
this Agreement and that, in the event of any such failure, an aggrieved party
will be irreparably damaged and will not have an adequate remedy at law. Any
such party shall therefore be entitled (in addition to any other remedy to which
such party may be entitled at law or in equity) to injunctive relief, including
specific performance, to enforce such obligations, without the posting of any
bond, and if any action should be brought in equity to enforce any of the
provisions of this Agreement, none of the parties hereto shall raise the defense
that there is an adequate remedy at law.

[Signature pages follow]

 

13

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.

 

Taylor Morrison Home Corporation By:  

/s/ Darrell Sherman

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

 

[Signature Page to U.S. Parent Governance Agreement]

--------------------------------------------------------------------------------

Taylor Morrison Holdings, Inc. By:  

/s/ Darrell Sherman

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

 

[Signature Page to U.S. Parent Governance Agreement]

--------------------------------------------------------------------------------

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

/s/ Ronald Cami

  Name:   Ronald Cami   Title:   Vice President, and Secretary

 

[Signature Page to U.S. Parent Governance Agreement]

--------------------------------------------------------------------------------

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

/s/ Derek Smith

  Name:   Derek Smith   Title:   Authorized Signatory By:  

/s/ Kenneth Liang

  Name:   Kenneth Liang   Title:   Authorized Signatory

 

[Signature Page to U.S. Parent Governance Agreement]

--------------------------------------------------------------------------------

JHI Holding Limited Partnership, by

its General Partner, JHI Advisory Ltd.

By:  

/s/ Joe S. Houssian

  Name:   Joe S. Houssian   Title:   Director

 

[Signature Page to U.S. Parent Governance Agreement]