Exhibit 10.1

Execution Version

ESCROW AND SECURITY AGREEMENT

Dated as of April 25, 2018

 

 

TOPBUILD ESCROW CORP.

as Grantor

U.S. BANK NATIONAL ASSOCIATION

as Escrow Agent, Financial Institution and Trustee

and

TOPBUILD CORP.

 

 

 

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THIS ESCROW AND SECURITY AGREEMENT is entered into on April 25, 2018 (this
“Agreement”), by and among U.S. Bank National Association as escrow agent (in
such capacity, the “Escrow Agent”), U.S. Bank National Association as a “bank”
and “securities intermediary” (each term as defined in the Code (as defined
herein)) (in such capacities, the “Financial Institution”), U.S. Bank National
Association as trustee under the Indenture described below (the “Trustee”),
TopBuild Escrow Corp., a Delaware corporation (the “Grantor”), and Grantor’s
sole stockholder, TopBuild Corp., a Delaware Corporation (the “Company”).

RECITALS

Pursuant to that certain indenture dated as of April 25, 2018 (as may be amended
or supplemented from time to time, the “Indenture”), by and between the Grantor
and the Trustee, the Grantor has, concurrently with the execution and delivery
of this Agreement, issued $400,000,000 aggregate principal amount of its 5.625%
Senior Notes due 2026 (the “Notes”). The Notes have been issued in a private
placement (the “Offering”) pursuant to that certain purchase agreement dated as
of April 11, 2018 (the “Purchase Agreement”), among the Grantor, the Company and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative (the
“Representative”) of the several initial purchasers named therein (the “Initial
Purchasers”). In connection with the Offering, the Company and the Grantor
prepared an Offering Memorandum dated April 11, 2018 (the “Offering
Memorandum”).

As set forth in the Offering Memorandum, the Company intends to use the proceeds
from the issuance and sale of the Notes, together with borrowings under its
secured credit facility: (i) to fund the purchase price payable in connection
with the consummation of the Company’s pending acquisition of USI Legend Parent,
Inc. (“USI” and such acquisition, the “Acquisition”); (ii) to pay fees and
expenses in connection therewith and with the offering of the Notes; (iii) to
repay all amounts outstanding under USI’s existing credit facility and terminate
such facility; and (iv) for general corporate purposes. As the consummation of
the USI Acquisition will not occur contemporaneously with the issuance of the
Notes, the Company and the Grantor have agreed with the Initial Purchasers in
the Purchase Agreement, and the Grantor has agreed with the Trustee in the
Indenture, to enter into this Agreement and to escrow the net proceeds from the
Offering and certain additional funds as provided herein. When and if the Escrow
Conditions (as defined herein) are satisfied, the escrowed proceeds will be
released to the Company, and if such conditions are not satisfied on or prior to
August 30, 2018 (the “Outside Date”), the escrowed proceeds and other property
in the Escrow Account (as defined herein) will be released to the Trustee for
application to fund a special mandatory redemption of the Notes as provided in
Section 1.05(d).

 

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The Grantor, the Trustee, the Financial Institution and the Escrow Agent hereby
agree that, in consideration of the mutual promises and covenants contained
herein, the Financial Institution will maintain the Escrow Account and the
Escrow Agent will distribute the Escrowed Property (as defined below) in
accordance with and subject to the following:

ARTICLE 1

INSTRUCTIONS

Section 1.01. Appointment of the Escrow Agent. The Grantor and the Trustee
hereby appoint U.S. Bank National Association as Escrow Agent in accordance with
the terms and conditions set forth herein, and U.S. Bank National Association
hereby accepts such appointment.

Section 1.02 Escrowed Property.

The initial funds to be deposited with the Financial Institution and the Escrow
Agent will be as follows:

(a) Concurrently with the execution and delivery hereof and the issuance of the
Notes, as provided in the Purchase Agreement, the Representative of the Initial
Purchasers will deposit, or cause to be deposited, with the Financial
Institution $394,000,000.00 and the Grantor will deposit, or cause to be
deposited, with the Financial Institution $14,125,000, in each case in cash or
by wire transfer in immediately available funds (the “Initial Deposit”), which
amounts collectively represent an amount sufficient to redeem in cash the
principal amount of the Notes at a redemption price equal to 100% of the
principal amount of the Notes plus the interest that would accrue to, but
excluding, September 5, 2018, if the Notes are required to be redeemed pursuant
to Section 3.09 of the Indenture. The Escrow Agent shall have no responsibility
to monitor or enforce the obligation of any party to make a deposit into the
Escrow Account. The Escrow Agent has no responsibility for determining whether
the amount of the Initial Deposit or any other deposit in the Escrow Account is
sufficient for any intended purpose.

(b) The Financial Institution will accept the Initial Deposit and will hold such
funds, all investments thereof, any Distributions (as hereinafter defined) and
the proceeds of the foregoing in account number 276070000 maintained by the
Financial Institution in the name of the Trustee (such account, the “Escrow
Account”) for disbursement in accordance with the provisions hereof. The Trustee
will be the entitlement holder with respect to the Escrowed Property and the
Escrow Account. The Grantor will not have any access to the Escrow Account or
the Escrowed Property, other than in accordance with Section 1.05 hereof. The
Initial Deposit, the Escrow Account and all funds or securities now or hereafter
credited to the Escrow Account, all investments of any of the foregoing, plus
all interest, dividends and other distributions and payments on any of the
foregoing (collectively the “Distributions”) received or receivable in respect
of any of the foregoing, together with all proceeds of any of the foregoing are
collectively referred to herein as “Escrowed Property.”

 

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Section 1.03. Grantor’s Limited Rights in Escrowed Property; Security Interest.

(a) The Grantor hereby pledges, assigns and grants to the Trustee, for the
ratable benefit of the holders of the Notes, as security for the due and
punctual payment when due of all amounts that may be payable from time to time
under the Indenture and the Notes, a continuing security interest in, and a lien
on, all of the Grantor’s rights, whether now existing or hereafter acquired or
arising, under this Agreement and in all right, title and interest of the
Grantor, whether now existing or hereafter acquired or arising, in the Escrow
Account, the Escrowed Property and all security entitlements in respect of
financial assets credited to the Escrow Account from time to time.

(b) The Grantor represents, warrants and agrees that the security interest of
the Trustee pursuant to this Agreement, to the extent that the Grantor has
rights herein, and the Escrow Account and Escrowed Property, will, upon
execution and delivery of this Agreement by all parties hereto, at all times on
and thereafter be valid, perfected and enforceable (subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity
regardless of whether considered in a proceeding in equity or at law) as a first
priority security interest by the Trustee against the Grantor and all third
parties in accordance with the terms of this Agreement and the terms of the New
York Uniform Commercial Code, as amended, or any successor provision (the “NY
UCC”).

(c) The parties hereto acknowledge and agree that: (i) the Escrow Account will
be treated as a “Securities Account,” (ii) the Escrowed Property (other than the
Escrow Account) will be treated as “Financial Assets,” (iii) this Agreement
governs the Escrow Account and provides rules governing the priority among
possible “Entitlement Orders” received by the Financial Institution from the
Grantor, the Trustee and any other persons entitled to give Entitlement Orders
with respect to such Financial Assets and (iv) the “Securities Intermediary’s
Jurisdiction” is the State of New York. The Financial Institution represents and
warrants that it is a “Securities Intermediary” with respect to the Escrow
Account and the “Financial Assets” credited to the Escrow Account. Except as
specifically provided herein, the NY UCC will apply to this Agreement, and all
terms quoted in this Section 1.03(c) and in Section 1.03(e) have the respective
meanings assigned to them by Article 8 and Article 9, as applicable, of the NY
UCC.

(d) The Escrow Agent hereby agrees that all property delivered to the Escrow
Agent for crediting to the Escrow Account will be promptly credited to the
Escrow Account by the Financial Institution. The Financial Institution
represents and warrants that it has not entered into, and agrees that it will
not enter into, any control agreement or any other agreement relating to the
Escrow Account or the Escrowed Property with any third party without the prior
written consent of the Grantor, the Trustee and the Representative. The parties
agree that

 

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all financial assets (except cash) credited to the Escrow Account will be
registered in the name of the Financial Institution or indorsed to the Financial
Institution or in blank and in no case will any financial asset credited to the
Escrow Account be registered in the name of the Grantor, payable to the order of
the Grantor or specially indorsed to the Grantor unless such financial asset has
been further indorsed to the Financial Institution or in blank.

(e) Each of the parties hereto acknowledges and agrees that the Escrow Account
and the Escrowed Property will be under the “control” of the Trustee (in
accordance with the Indenture and this Agreement) and, notwithstanding any other
provision of this Agreement, the Financial Institution will comply with all
Entitlement Orders with respect to the Escrow Account and all instructions
directing disposition of funds in the Escrow Account, in each case originated by
the Trustee (in accordance with the Indenture and this Agreement) without
further consent of the Grantor or any other person; provided, however, that so
long as the Trustee has not notified the Escrow Agent and Financial Institution
in writing that a Default (as defined in the Indenture) exists or following the
receipt by the Escrow Agent and the Financial Institution of a written notice
from the Trustee that any existing Default (as defined in the Indenture) has
been cured or waived, the Financial Institution shall honor Entitlement Orders
issued by the Grantor in accordance with Section 1.05 hereof.

(f) The Grantor agrees to take all steps reasonably necessary in connection with
the perfection of the Trustee’s security interest in this Agreement and the
Escrowed Property and the protection of the Escrowed Property from claims by
third parties and, without limiting the generality of the foregoing, the Grantor
hereby authorizes the Trustee and the Initial Purchasers on behalf of the
Trustee to file one or more UCC financing statements in such jurisdictions and
filing offices and containing such description of collateral as the Trustee, or
the Initial Purchasers on behalf of the Trustee, may determine are reasonably
necessary in order to perfect the security interest granted herein, and any such
filing is authorized to be made by the Trustee, the Initial Purchasers or their
respective counsel, in each case on behalf of the Trustee. The Grantor
represents and warrants that it is duly incorporated and validly existing as a
corporation under the laws of the state of Delaware and is not organized under
the laws of any other jurisdiction, and the Grantor hereby agrees that, prior to
the termination of this Agreement, it will not change its name or jurisdiction
of organization without giving the Trustee and the Initial Purchasers not more
than 10 or less than 5 days’ prior written notice thereof.

(g) Upon the release of any Escrowed Property pursuant to Section 1.05 hereof,
the security interest of the Trustee for the benefit of the holders of the Notes
granted herein will automatically terminate with respect to all such Escrowed
Property so released without any further action and such released Escrowed
Property will be delivered to the recipient free and clear of any and all liens,
claims or encumbrances of the Financial Institution, the Escrow Agent, the
Trustee and the holders of the Notes. The Trustee will, at the reasonable
request

 

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of the Grantor, take all steps reasonably necessary to terminate any financing
statements and will execute such other documents without recourse,
representation or warranty of any kind as the Grantor may reasonably request in
writing to evidence or confirm the termination of the security interest in such
released Escrowed Property.

Section 1.04. Investment of Escrowed Property. The Escrow Agent is authorized
and directed, and agrees promptly to deposit the Escrowed Property including
without limitation the Initial Deposit in the Escrow Account and hereby agrees
to treat any such investment as a “Financial Asset” within the meaning of
Section 8-102(a)(9) of the NY UCC. The Escrowed Property shall be invested by
the Escrow Agent in U.S. Bank Money Market Account – CUSIP 9AMMF05B2. The
Grantor and Trustee acknowledge receipt of the prospectus for such fund at the
time of execution of this Agreement.

Section 1.05. Distribution of Escrowed Property. Subject to Section 1.03(e), the
Escrow Agent is directed to cause the Financial Institution to hold and
distribute the Escrowed Property in the following manner:

(a) The Escrow Agent will release the Escrowed Property only as specifically
provided for in this Section 1.05. All release and disbursement instructions and
Entitlement Orders delivered to Escrow Agent shall specify (i) the amount to be
disbursed, (ii) the date of disbursement, (iii) the recipient(s) of the
disbursement, and (iv) the manner of disbursement and delivery instructions
except that in the case of parties having wire transfer instructions specified
in Section 1.07, the wire transfer instruction need not be set forth at length,
but may instead reference Section 1.07.

(b) Upon the satisfaction of the following conditions, the Grantor will promptly
deliver an Officers’ Certificate (such delivery to be in accordance with Section
3.01 hereof), substantially in the form attached as Exhibit A hereto and signed
by two Authorized Persons (as defined in Section 3.01 hereof) of the Grantor, to
the Trustee and the Escrow Agent, confirming that all of the following
conditions (collectively, the “Escrow Conditions”) have been satisfied or will
be satisfied substantially concurrently with the release of the Escrowed
Property and instructing the Escrow Agent to release the Escrowed Property (the
“Officers’ Certificate”):

(i) the consummation of the Acquisition pursuant to the Acquisition Agreement
(as defined in the Indenture);

(ii) the consummation of borrowings under the Credit Agreement (as defined in
the Indenture) with terms consistent in all material respects with those
described in the Offering Memorandum;

 

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(iii) the execution and delivery by the Company of a supplemental indenture
pursuant to which it shall assume the obligations of the Grantor under the
Indenture and the Notes;

(iv) the execution and delivery by each Domestic Subsidiary (as defined in the
Indenture) of the Company that guarantees Indebtedness (as defined in the
Indenture) or is a borrower, in each case, under the Credit Agreement, of (A) a
supplemental indenture pursuant to which such Domestic Subsidiary will become a
guarantor party to the Indenture and (B) a joinder agreement under which it will
become a party to the Purchase Agreement; and

(v) the delivery by or at the request of the Grantor of certain opinions of its
counsel to the Initial Purchasers as required under Section 5 of the Purchase
Agreement;

provided that, it is understood that certain steps set forth above may occur
during the day after the release of funds from the Escrow Account, and the funds
shall be released upon certification, as set forth in the Officers’ Certificate,
that such steps will occur during the day thereafter.

(c) Promptly upon receipt of the Officers’ Certificate from the Grantor, the
Escrow Agent will cause the liquidation of all investments, if any, of Escrowed
Property then held by it and cause the release of all of the Escrowed Property
to the Company or to such other persons as specified in the Officers’
Certificate, at the Grantor’s written direction by wire transfer of immediately
available funds (i) in accordance with the wire transfer instructions set forth
in Section 1.07 hereof or to the Trustee, as directed by the Grantor or (ii) in
accordance with the wire transfer instructions set forth in the Officers’
Certificate.

(d) If the Escrow Conditions have not been satisfied on or prior to the Outside
Date, the Escrow Agent will, upon receipt of written notification from the
Grantor that such conditions have not been satisfied, which the Grantor shall be
required to provide (or if the Escrow Agent receives written notice pursuant to
Section 1.05(e) prior to such time), cause the liquidation of all investments of
Escrowed Property then held by it on or before noon on the Business Day
immediately prior to September 5, 2018 and cause the release of all of the
Escrowed Property as follows:

(i) first, to the Paying Agent under the Indenture, an amount of Escrowed
Property certified by the Grantor as equal to the Special Mandatory Redemption
Price for payment to the holders of the Notes in accordance with the special
mandatory redemption provision contained in Section 3.09 of the Indenture; such
release of Escrowed Property to the Paying Agent under the Indenture will be
made by wire transfer of immediately available funds in accordance with the wire
instructions set forth in Section 1.07 hereof; provided that if the amount of
the Escrowed

 

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Property is less than the amount required to be paid for the Special Mandatory
Redemption Price, the Grantor will deliver, or cause to be delivered, to the
Paying Agent, on or prior to September 5, 2018, an amount equal to the
deficiency, in accordance with Section 3.07 of the Indenture; and

(ii) second, to the Grantor, any Escrowed Property remaining after distributions
in clause (d) (i) above, by wire transfer of immediately available funds in
accordance with the wire instructions set forth in Section 1.07 hereof.

(e) The Grantor may determine, in the good faith judgment of the Board of
Directors of the Grantor, that the conditions contained in clause (b) of this
Section 1.05 will not be satisfied on or prior to the Outside Date, in which
case the Grantor shall be required to cause a special mandatory redemption of
the Notes under Section 3.09 of the Indenture. Upon written notice and
instruction from the Trustee to the Escrow Agent (which will only be given after
the Grantor has given the corresponding written notice to the Trustee, which
notice specifies the special mandatory redemption price as required by
Section 3.09 of the Indenture (the “Special Mandatory Redemption Price”)) that
the Grantor is required to cause the special mandatory redemption of the Notes
and certification of the date fixed for such special mandatory redemption, the
Escrow Agent will, on or before noon on the Business Day immediately prior to
the date fixed for such special mandatory redemption, cause the liquidation of
all investments of Escrowed Property then held by the Financial Institution and
release all of the Escrowed Property as follows:

(i) first, to the Paying Agent under the Indenture, an amount of Escrowed
Property in cash equal to the Special Mandatory Redemption Price (as specified
in such instructions from the Trustee) for payment to the holders of the Notes
in accordance with the redemption provisions contained in Section 3.09 of the
Indenture; such release of Escrowed Property to the Paying Agent under the
Indenture will be made by wire transfer of immediately available funds in
accordance with the wire instructions set forth in Section 1.07 hereof; provided
that if the amount of the Escrowed Property is less than the amount required to
be paid for the Special Mandatory Redemption Price, the Grantor will deliver to
the Paying Agent, on or prior to the date fixed for such special mandatory
redemption, an amount equal to the deficiency, in accordance with Section 3.07
of the Indenture; and

(ii) second, to the Grantor, any Escrowed Property remaining after distributions
in Section 1.05(d)(i), by wire transfer of immediately available funds in
accordance with the wire instructions set forth in Section 1.07 hereof.

 

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(f) If the Escrow Agent receives a written notice and instruction from the
Trustee that the principal amount of and accrued and unpaid interest on the
Notes have become immediately due and payable pursuant to Article 6 of the
Indenture, then the Escrow Agent will, within one Business Day after receipt of
such written notice and instruction from the Trustee, cause the liquidation of
all Escrowed Property then held by the Financial Institution and cause the
release of all of the Escrowed Property as follows:

(i) first, to the Escrow Agent and the Trustee, an amount of Escrowed Property
in cash equal to amounts due and owing to the Escrow Agent and Trustee (as set
forth in the notice provided pursuant to this Section 1.05(f)) in respect of
fees, expenses and liabilities of the Escrow Agent under this Agreement and the
Trustee under the Indenture, as the case may be;

(ii) second, upon the written direction of the Trustee, to the Paying Agent for
payment to the holders of the Notes, an amount of Escrowed Property sufficient
to pay such accelerated principal amount and interest, if any, thereon; such
release of Escrowed Property to the Paying Agent will be made by wire transfer
of immediately available funds in accordance with the wire instructions set
forth in Section 1.07 hereof; and

(iii) third, to the Grantor, any Escrowed Property remaining after distributions
in Section 1.05(f)(i) and Section 1.05(f)(ii), by wire transfer of immediately
available funds in accordance with the wire instructions set forth in Section
1.07 hereof.

(g) In any case hereunder in which the Escrow Agent is to receive written
instructions to release the Escrowed Property, the Escrow Agent shall be
entitled to conclusively rely on such written instructions with no
responsibility to calculate or confirm amounts or percentages to release or
compliance with any other document.

(h) The Trustee and the Grantor shall provide the Escrow Agent with a list of
Authorized Persons (as defined in Section 3.01), initially authorized hereunder
as set forth on Schedule 3.01; as such Schedule 3.01 may be amended or
supplemented from time to time by delivery of a revised and re-executed Schedule
3.01 to the Escrow Agent. Notwithstanding the foregoing sentence, the Escrow
Agent is authorized to comply with and rely upon any notices, instructions or
other communications reasonably believed by it in good faith to have been sent
or given by the Trustee or the Grantor, as the case may be, or by a person or
persons authorized by the Trustee or the Grantor. The Escrow Agent specifically
allows for receiving direction by written or electronic transmission from an
Authorized Person with the following caveat, the Grantor agrees to indemnify and
hold harmless the Escrow Agent against any and all claims, losses, damages,
liabilities, judgments, costs and reasonable expenses (including reasonable and
documented attorneys’ fees of one legal counsel)

 

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(collectively, “Losses”) incurred or sustained by the Escrow Agent as a result
of or in connection with the Escrow Agent’s reliance upon and compliance with
instructions or directions given by written or electronic transmission by them
respectively; provided, however, that such Losses have not arisen from the gross
negligence or willful misconduct of the Escrow Agent, it being understood that
forbearance on the part of the Escrow Agent to verify or confirm that the person
giving the instructions or directions, is, in fact, an Authorized Person shall
not be deemed to constitute gross negligence or willful misconduct. In the event
funds transfer instructions are given to the Escrow Agent pursuant to the terms
of this Agreement (other than with respect to fund transfers to be made
contemporaneously with the execution of this Agreement), regardless of the
method used to transmit such instructions, such instructions must be given by an
Authorized Person. Further, the Escrow Agent is authorized to obtain and rely
upon confirmation of such instructions by telephone call-back to the applicable
Authorized Person. The Escrow Agent may require any party hereto which is
entitled to direct the delivery of fund transfers to designate a phone number or
numbers for purposes of confirming the requested transfer. The Trustee and the
Grantor agree that the Escrow Agent may delay the initiation of any fund
transfer until all security measures it deems to be necessary and appropriate
have been completed and shall incur no liability for such delay.

Section 1.06. Addresses. Notices, instructions and other communications will be
sent as follows:

 

  (a) to Escrow Agent, Financial Institution or Trustee:

U.S. Bank National Association

Attn: Global Corporate Trust Services

200 South Biscayne Blvd.

Miami, FL 33131]

Telephone:        (305) 350-1752

Facsimile:         (305) 350-1745

E-mail:              Michael.Daly3@usbank.com

 

  (b) to the Company, the Grantor or a Guarantor:

TopBuild Corp.

475 North Williamson Blvd

Daytona Beach, FL 322114

Phone: (386) 304-1327

Email: joe.jacumin@topbuild.com

Attention: Joe Jacumin

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

Greenberg Traurig, P.A.

 

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333 S.E. 2nd Avenue

Miami, FL 333131

Phone: (305) 579-0589

Facsimile: (305) 961-5589

Email: altmand@gtlaw.com

Attention: Drew M. Altman

 

  (c) to the Representative and the Initial Purchasers:

Merrill Lynch, Pierce, Fenner & Smith

            Incorporated

One Bryant Park

New York, New York 10036

Facsimile: (212) 901-7867

Attention: Legal Department

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

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017

Facsimile: (212) 701-5111

Attention: Michael Kaplan

Section 1.07. Wire Transfer Instructions.

Unless otherwise indicated in the Officers’ Certificate, all cash (including the
cash proceeds from liquidation of any Escrowed Property) distributed from the
Escrow Account to the Grantor or the Company will be transferred by wire
transfer of immediately available funds in accordance with the following wire
transfer instructions:

[Bank Name: PNC Bank

Account Name: TopBuild Corp

ABA # 043000096

Account # 1029012528

Address: 249 Fifth Avenue, Pittsburgh, PA

Phone: (386) 763-7281

Unless otherwise indicated in writing from the Trustee or the Paying Agent to
the Escrow Agent, all cash distributed from the Escrow Account to the Paying
Agent will be transferred by wire transfer of immediately available funds in
accordance with the following wire transfer instructions:

U.S. Bank National Association

ABA# 0910000222

BNF : US Bank TFM

Beneficiary Account # 180120521620

Ref.: TopBuild Notes Account 005840NS

Contact: M. Daly

 

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Unless otherwise indicated in writing from the Escrow Agent to the Grantor and
the Initial Purchasers, the Initial Deposit and any fees described in Exhibit B
hereto will be transferred to the Escrow Agent by wire transfer of immediately
available funds in accordance with the following wire transfer instructions:

U.S. Bank National Association

ABA/Routing # 091000022

Beneficiary Account #: 104793255431

Beneficiary Account Address:         777 E. Wisconsin Avenue

                                                           Milwaukee, WI
53202-5300

Further credit to Account Name: TopBuild Escrow Corp. Escrow

Further credit to Account #: 276070000

Upon termination of this Agreement and after any required liquidation or
distribution of Escrowed Property for the benefit of any person other than the
Grantor pursuant to Section 1.05 hereof, any Escrowed Property that consists of
assets other than cash and is to be released to the Grantor, the Escrow Agent
shall cause the liquidation of such Escrowed Property into cash and distribute
it to the Grantor upon the written request of the Grantor pursuant to this
Section 1.07. No request by the Grantor pursuant to this paragraph shall
constitute an “Entitlement Order” or instruction with respect to the Escrowed
Property.

Section 1.08. Compensation.

(a) Upon execution of this Agreement, the Grantor will pay the Escrow Agent for
its services in accordance with the fee schedule agreed to by and between the
Grantor and the Escrow Agent attached hereto as Exhibit B.

(b) The fees agreed upon for the services rendered hereunder is intended as full
compensation for the Escrow Agent’s services as contemplated by this Escrow
Agreement; provided, however, that in the event that the Escrow Agent renders
any service not contemplated in this Escrow Agreement at the written direction
of the Grantor, then the Escrow Agent shall be compensated for such other
services as agreed between the Grantor and the Escrow Agent.

(c) If any reasonable fees, expenses or costs incurred by, or any obligations
owed to the Escrow Agent hereunder are not paid when due, the Escrow Agent may
set off against any Escrowed Property released to the Grantor from this escrow
in accordance with Section 1.05 hereof. The Escrow Agent shall have no right to
set off against, and hereby waives any lien it may otherwise have against, any
Escrowed Property prior to its release from escrow or which is released or to be
released in accordance with the terms of this Agreement. The Grantor shall
remain liable for any unpaid reasonable fees, expenses or costs incurred by, or
any obligations owed to the Escrow Agent hereunder.

 

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(d) The obligations of the Grantor contained in this Section 1.08 will survive
the termination of this Agreement or the earlier resignation or removal of the
Escrow Agent.

ARTICLE 2

TERMS AND CONDITIONS

Section 2.01. Rights, Duties and Immunities of Escrow Agent.

(a) Scope of duties. The duties, responsibilities and obligations of the Escrow
Agent will be limited to those expressly set forth herein and no duties,
responsibilities or obligations will be inferred or implied. The Escrow Agent
will not be required to inquire as to the performance or observation of any
obligation, term or condition under any other agreement or arrangement to which
the Grantor is a party, even though reference thereto may be made herein. The
Escrow Agent will not be required to comply with any direction or instruction
other than those contained herein or delivered in accordance with this
Agreement. Other than as may be required to fulfill its duties and obligations
as contemplated by this Agreement, the Escrow Agent will not be required to, and
will not, expend or risk any of its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder.

(b) Limitation on liability. The Escrow Agent will not be liable for any action
taken or omitted or for any loss or injury resulting from its actions or its
performance or lack of performance of its duties hereunder in the absence of
gross negligence, willful misconduct or fraud on its part. In no event will the
Escrow Agent be liable (i) for any incidental, consequential, punitive, special
or indirect damages or penalties, regardless of the form of action and whether
or not any such damages or penalties were foreseeable and contemplated or even
if the Escrow Agent has been advised of the likelihood of such damages or
penalty and regardless of the form of action, (ii) for an amount in excess of
the value of the Escrowed Property or (iii) for any liability in connection with
the investment or reinvestment of any cash held by it hereunder in accordance
with the terms hereof, including without limitation any liability for any delays
(not resulting from its gross negligence, willful misconduct or fraud) in the
investment, reinvestment or liquidation of the Escrowed Property, or any loss of
interest or income incident to any such delay.

(c) Further limitation on liability. The Escrow Agent will not incur any
liability for not performing any act or fulfilling any duty, obligation or
responsibility hereunder by reason of any occurrence beyond the reasonable
control of the Escrow Agent (including but not limited to any act or provision
of any present or future law or regulation or governmental authority, any act of
God, acts of war or terror, strikes, lockouts, riots, epidemics, governmental
regulations, fire, communication line failures, computer viruses, power
failures, earthquakes or other disasters or the unavailability of the Federal
Reserve Bank wire or other wire or communication facility).

 

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(d) Right to consult counsel. The Escrow Agent may consult with legal counsel of
its own choosing, at the reasonable expense of the Grantor (to the extent
documented), as to any matter relating to this Agreement, and the Escrow Agent
will not incur any liability in acting in good faith in accordance with any
advice from such counsel. The Grantor shall promptly pay, upon demand, the
reasonable fees and expenses of any such counsel.

(e) Duty of care. The Escrow Agent will not be under any duty to give the
Escrowed Property held by it hereunder any greater degree of care than it gives
its own similar property and will not be required to invest any funds held
hereunder except as directed in accordance with this Agreement. Uninvested funds
held hereunder will not earn or accrue interest.

(f) Collection. All funds and other property deposited into the Escrow Account
or otherwise collected for deposit therein will be subject to the Escrow Agent’s
usual collection practices or terms regarding items received by the Escrow Agent
for deposit or collection. The Escrow Agent will not be required, or have any
duty, to notify any Person of any payment or maturity under the terms of any
instrument deposited hereunder, or to take any legal action to enforce payment
of any check, note or security deposited hereunder or to exercise any right or
privilege that may be afforded to the holder of any such security.

(g) Statements. The Escrow Agent will provide to the Grantor and the Trustee
monthly statements identifying transactions, transfers or holdings of Escrowed
Property, and each such statement will be deemed to be correct and final, absent
manifest error, upon receipt thereof by the Grantor and the Trustee unless the
Escrow Agent is notified in writing to the contrary within 45 Business Days of
the date of such statement.

(h) Disclaimer with respect to Escrowed Property. The Escrow Agent will not be
responsible in any respect for the form, execution, validity, value or
genuineness of documents or securities deposited into escrow or held hereunder,
or for any description therein, or for the identity, authority or rights of
persons executing or delivering or purporting to execute or deliver any such
document, security or endorsement. The Escrow Agent makes no representation as
to the validity, value, genuineness or the collectability of any security or
other document or instrument held by or delivered to it. The Escrow Agent will
not be called upon to advise any party as to the wisdom in selling or retaining
or taking or refraining from any action with respect to any securities or other
property deposited hereunder.

 

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(i) Ambiguity or uncertainty. In the event of any ambiguity or uncertainty
hereunder or in any notice, instruction or other communication received by the
Escrow Agent hereunder, the Escrow Agent may, in its reasonable sole discretion,
refrain from taking any action other than retaining possession of the Escrowed
Property, unless the Escrow Agent receives written instructions, signed by the
Grantor, the Trustee and/or the Representative, as applicable, which eliminates
such ambiguity or uncertainty.

(j) Conflicting claims. In the event of any dispute between or conflicting
claims by or among the Grantor and/or any other person or entity with respect to
any Escrowed Property, the Escrow Agent will be entitled, in its reasonable sole
discretion, to refuse to comply with any and all claims, demands or instructions
with respect to such Escrowed Property so long as such dispute or conflict
continues, and the Escrow Agent will not be or become liable in any way to the
Grantor for failure or refusal to comply with such conflicting claims, demands
or instructions. The Escrow Agent will be entitled to refuse to act until, in
its sole discretion, either (i) such conflicting or adverse claims or demands
have been determined by a final order, judgment or decree of a court of
competent jurisdiction, which order, judgment or decree is not subject to
appeal, or settled by agreement between the conflicting parties as evidenced in
a writing satisfactory to the Escrow Agent or (ii) the Escrow Agent has received
security or an indemnity reasonably satisfactory to it sufficient to hold it
harmless from and against any and all Losses (as defined in Section 2.02 hereof)
which it may incur by reason of so acting. The Escrow Agent may, in addition,
elect, in its sole discretion, to commence an interpleader action or seek other
judicial relief or orders as it may deem, in its sole discretion, necessary. The
reasonable and documented out-of-pocket costs and expenses (including reasonable
and documented attorneys’ fees and expenses of one legal counsel) incurred in
connection with such proceeding will be paid by, and will be solely an
obligation of, the Grantor.

(k) Compliance with judicial orders. If at any time the Escrow Agent is served
with any judicial or administrative order, judgment, decree, writ or other form
of judicial or administrative process that in any way affects the Escrowed
Property, including but not limited to orders of attachment or garnishment or
other forms of levies or injunctions or stays relating to the transfer of the
Escrowed Property (an “Order”), the Escrow Agent is authorized to comply
therewith in any manner as it or its legal counsel of its own choosing deems
necessary, provided that the Escrow Agent shall, prior to taking any such action
in respect of the Order and if not advised by counsel that to do so would
constitute a violation of law, use its best commercially reasonable efforts to
notify the Grantor and the Trustee of such Order to allow the Grantor to seek an
appropriate order or waive compliance with the provisions of this Agreement; and
if the Escrow Agent complies with this Section 2.01(k) and any such Order, the
Escrow Agent will not be liable to any of the parties hereto or to any other
person or entity even though such Order may be subsequently modified or vacated
or otherwise determined to have been without legal force or effect.

 

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(l) Right to rely on communications. The Escrow Agent will be entitled to
conclusively rely upon any order, judgment, certification, demand, instruction,
notice, instrument or other writing delivered to it hereunder without being
required to determine the authenticity or the correctness of any fact stated
therein or the propriety or validity or the service thereof. The Escrow Agent
may act in conclusive reliance upon any instrument or signature reasonably
believed by it to be genuine and may assume that any person purporting to give
receipt or advice to make any statement or execute any document in connection
with the provisions hereof has been duly authorized to do so. When the Escrow
Agent acts on any information, instructions, communications (including, but not
limited to, communications with respect to the delivery of securities or the
wire transfer of funds) sent by facsimile, email or other form of electronic or
data transmission, the Escrow Agent, absent gross negligence, willful misconduct
or fraud will not be responsible or liable in the event such communication is
not an authorized or authentic communication of the Grantor or Trustee, as the
case may be, or is not in the form the Grantor or Trustee sent or intended to
send (whether due to fraud, distortion or otherwise). Pursuant to Section 2.02
hereof, the Grantor will indemnify the Escrow Agent against any Losses (as such
term is defined in Section 2.02 hereof) it may incur as a result of acting in
accordance with any such communication.

(m) Right to request instruction. At any time the Escrow Agent may request an
instruction in writing from the Grantor and the Trustee and may, at its own
option, include in such request the course of action it proposes to take and the
date on which it proposes to act, regarding any matter arising in connection
with its duties and obligations hereunder. The Escrow Agent will not be liable
for acting in accordance with such a proposal on or after the date specified
therein; provided that (i) the specified date will be at least five Business
Days after each of the Grantor and the Trustee receives the Escrow Agent’s
request for instructions and its proposed course of action and (ii) prior to so
acting, the Escrow Agent has not received the written instructions requested.

(n) Liability for Taxes. Except as otherwise set forth herein, the Escrow Agent
does not have any interest in the Escrowed Property deposited hereunder but is
serving as escrow holder only and having only possession thereof. The Grantor
will pay or promptly reimburse the Escrow Agent upon request for any transfer
taxes or other taxes relating to the Escrowed Property incurred in connection
herewith and will indemnify and hold harmless the Escrow Agent with respect to
any amounts that it is obligated to pay in the way of such taxes, in each case
to the reasonable satisfaction of the Escrow Agent. Any payments of income from
the Escrow Account will be subject to withholding regulations then in force
under applicable law. Trustee and the Grantor further agree as follows: The
Escrow Agent shall, for each calendar year (or portion thereof) that the Escrow
Account is in existence, report the income of the Escrow Account (i) to the
Grantor and (ii) to the IRS, as required by law. The parties to this Agreement
agree that they will not take any position in connection with the preparation,
filing or audit of any tax return that is in any way inconsistent with the
foregoing determination or the information returns or reports provided by the
Escrow Agent, except as required by law. The Trustee and the Grantor shall
provide the Escrow

 

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Agent with such tax forms and certificates as shall be reasonably requested by
the Escrow Agent. The Escrow Agent shall have no responsibility for the tax
consequences of this Agreement, and the Grantor shall consult with independent
counsel concerning any and all tax matters.

(o) Withholding Requests and Indemnification. The Grantor and the Company,
jointly and severally, agree to (i) assume all obligations imposed now or
hereafter by any applicable tax law or regulation with respect to payments or
performance under this Agreement, (ii) request the Escrow Agent in writing with
respect to withholding and other taxes, assessments or other governmental
charges, and advise the Escrow Agent in writing with respect to any
certifications and governmental reporting that may be required under any
applicable laws or regulations, and (iii) indemnify and hold the Escrow Agent
harmless pursuant to Section 2.02 below from any liability or obligation on
account of taxes, assessments, additions for late payment, interest, penalties,
expenses and other governmental charges that may be assessed or asserted against
Escrow Agent.

(p) Extension of rights of Escrow Agent. The rights, privileges, protections,
immunities and benefits given to the Escrow Agent, including without limitation,
its right to be indemnified, are extended to, and shall be enforceable by, the
Escrow Agent in each of its capacities hereunder, and each agent, custodian and
other person or entity employed to act hereunder.

Section 2.02. Indemnity. From and at all times after the date of this Agreement,
the Grantor and the Company, jointly and severally, shall, to the fullest extent
permitted by law, defend, indemnify and hold harmless the Escrow Agent and each
director, officer, employee, attorney, agent and affiliate of the Escrow Agent
(collectively, the “Indemnified Parties”) against any and all actions, claims
(whether or not valid), losses, damages, liabilities, penalties, costs and
expenses of any kind or nature whatsoever (including without limitation
reasonable attorneys’ fees, costs and expenses) (collectively, “Losses”)
incurred by or asserted against any of the Indemnified Parties, whether direct,
indirect or consequential, as a result of or arising from or in any way relating
to any claim, demand, suit, action or proceeding (including any inquiry or
investigation) by any person, including without limitation the Grantor or the
Company, whether threatened or initiated, arising from or in connection with the
negotiation, preparation, execution, performance or failure of performance of
this Agreement, any Losses or any transactions contemplated herein, whether or
not any such Indemnified Party is a party to any such action, proceeding, suit
or the target of any such inquiry or investigation; provided, however, that the
Grantor and the Company shall not be liable pursuant to this Section 2.02 for
any Losses which resulted from the Escrow Agent’s material breach of this
Agreement, gross negligence or willful misconduct as determined by a final
non-appealable decision of a court of competent jurisdiction. Each Indemnified
Party shall, in its sole discretion, have the right to select and employ
separate counsel with respect to any action or claim brought or asserted against
it, and the reasonable fees of such counsel shall be paid upon demand by the
Grantor and the Company jointly and severally. The obligations of the Grantor
and the Company under this section shall survive any termination of this
Agreement and the resignation or removal of the Escrow Agent.

 

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Section 2.03 Resignation and Removal of Escrow Agent. (a) The Grantor may remove
the Escrow Agent at any time by giving to the Escrow Agent and the Trustee 5
days’ prior notice in writing signed by the Grantor. The Escrow Agent may resign
at any time by giving to the Grantor and the Trustee 15 days’ prior written
notice thereof.

(b) Within 10 days after giving the foregoing notice of removal to the Escrow
Agent or receiving the foregoing notice of resignation from the Escrow Agent,
the Grantor will appoint a successor escrow agent, upon notice to the Trustee.
The Grantor will cause any successor escrow agent to assume the obligations of
the Escrow Agent hereunder or to enter into such other escrow and security
agreement as may be reasonably acceptable to the Grantor, and any such other
escrow and security agreement shall be administratively acceptable to the
Trustee. If a successor escrow agent has not accepted such appointment by the
end of such 10-day period or such successor escrow agent has not become so
bound, the Escrow Agent may apply to a court of competent jurisdiction for the
appointment of a successor escrow agent or for other appropriate relief. The
reasonable and documented out-of-pocket costs and expenses (including reasonable
and documented attorneys’ fees and expenses of one legal counsel) incurred by
the Escrow Agent in connection with such proceeding will be paid by, and be
deemed to be solely an obligation of, the Grantor.

(c) Subject to Section 1.08(c), upon receipt of the identity of the successor
escrow agent, the Escrow Agent will deliver the Escrowed Property then held
hereunder to the successor escrow agent. Upon delivery of the Escrowed Property
to the successor escrow agent, the Escrow Agent will have no further duties,
responsibilities or obligations hereunder.

Section 2.04. Termination. This Agreement will terminate upon the distribution
of all Escrowed Property from the Escrow Account in accordance with the
provisions of Section 1.05 hereof, except such provisions of this Agreement that
by their express terms survive the termination of this Agreement and/or the
resignation or removal of the Escrow Agent. Upon termination of this Agreement,
all security interest of the Trustee for the benefit of the holders of the Notes
granted pursuant to, and described in, Section 1.03 of this Agreement shall
automatically terminate without any further action. The Trustee shall at the
reasonable request of the Grantor or the Company take all steps reasonably
necessary to terminate any financing statements that have not been terminated
pursuant to Section 1.03(g) hereof and shall execute such other documents
without recourse, representation or warranty of any kind as the Grantor or the
Company may reasonably request in writing to evidence or confirm the termination
of such security interest.

 

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ARTICLE 3

MISCELLANEOUS

Section 3.01. Notices. All notices and other communications under this Agreement
will be in writing in English and will be deemed given (a) on the date of
delivery when delivered personally, (b) upon acknowledgement of delivery when
mailing such notice, (c) upon acknowledgement of delivery when delivered by
electronic means, (d) on the next Business Day after delivery to a recognized
overnight courier or (e) when sent by facsimile to the parties at the addresses
set forth in Section 1.06 hereof (or to such other address as a party may have
specified by notice given to the other parties pursuant to this provision).
Whenever under the terms hereof the time for giving a notice or performing an
act falls upon a day that is not a Business Day, such time will be extended to
the next Business Day. Attached as Schedule 3.01 hereto and made a part hereof
is a list of those persons initially entitled to give notices, instructions and
other communications to the Trustee and/or the Escrow Agent on behalf of the
Grantor hereunder (each such representative, an “Authorized Person”). Schedule
3.01 may be amended from time to time by written notice from the Grantor to the
Escrow Agent and the Trustee, with a copy to the Initial Purchasers.

Section 3.02. Representations and Warranties. Each of the Grantor, the Trustee,
the Financial Institution and the Escrow Agent hereby represents and warrants
(a) that this Agreement has been duly authorized, executed and delivered on its
behalf and constitutes its legal, valid and binding obligation (subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity regardless of whether considered in a proceeding in equity or at law) and
(b) that the execution, delivery and performance of this Agreement by it does
not and will not violate any applicable law or regulation governing, in the case
of the Trustee, its corporate trust powers.

Section 3.03. Governing Law; Consent to Jurisdiction; Construction. (a) THIS
AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

(b) The Financial Institution’s jurisdiction for purposes of Sections 8-110 and
9-304 of the NY UCC will be the State of New York.

(c) Each party hereto irrevocably agrees that any legal action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby will be brought in the federal or state courts located in the Borough of
Manhattan in the City of New York, and irrevocably submits to the exclusive
jurisdiction of such courts in any such action or proceeding. The parties hereby
irrevocably and unconditionally waive any objection to the laying of

 

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venue of any lawsuit, action or other proceeding in any such court, and hereby
further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such lawsuit, action or other proceeding brought in any
such court has been brought in an inconvenient forum. The parties further agree
that service of any process, summons, notice or document by certified or
registered mail, return receipt requested, to such party’s address set forth in
Section 1.06 hereof (or directed to it at the address last specified for notices
hereunder) will be effective service of process for any lawsuit, action or other
proceeding brought in any such court, and such service will be deemed completed
10 days after the same is so mailed.

(d) Except as set forth in Section 1.03(c), capitalized terms that are used but
not defined in this Agreement have the meanings assigned to them in the
Indenture. The term “will” as used in this Agreement shall be interpreted to
express a command. The term “or” is not exclusive. Words in the singular include
the plural and words in the plural include the singular.

Section 3.04. Rights and Remedies. The rights and remedies conferred upon the
parties hereto will be cumulative, and the exercise or waiver of any such right
or remedy will not preclude or inhibit the exercise of any additional rights or
remedies. The waiver of any right or remedy hereunder will not preclude the
subsequent exercise of such right or remedy.

Section 3.05. Benefit of the Parties. This Agreement will be binding upon the
parties hereto and each of their successors and permitted assigns. This
Agreement will inure solely to the benefit of the parties hereto and (subject to
Section 3.06 hereof) each of their respective successors and permitted assigns,
and no other person will have or be construed to have any legal or equitable
right, remedy or claim under, in respect of, or by virtue of this Agreement.

Section 3.06. Assignment. This Agreement and the rights and obligations
hereunder of parties hereto may not be assigned except with the prior written
consent of the other parties hereto, and any purported assignment without such
consent will be null and void, except for the appointment of a successor Escrow
Agent pursuant to Section 2.03 hereof, the appointment of a successor Trustee
pursuant to Section 7.08 of the Indenture or a Trustee succession under
Section 7.09 of the Indenture. No party hereto shall assign its rights hereunder
until its assignee has submitted to the Escrow Agent (i) Patriot Act disclosure
materials and the Escrow Agent has determined that on the basis of such
materials it may accept such assignee as a customer and (ii) assignee has
delivered an IRS Form W-8 or W-9, as appropriate, to the Escrow Agent which the
Escrow Agent has determined to have been properly signed and completed. In
addition, the foregoing rights to assign shall be subject, in the case of any
party having an obligation to indemnify the Escrow Agent, to the Escrow Agent’s
approval based upon the financial ability of assignee to indemnify it being
reasonably comparable to the financial ability of assignor, which approval shall
not be unreasonably withheld.

 

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Section 3.07. Merger; No Third Party Beneficiaries. This Agreement constitutes
the entire agreement of the parties hereto with respect to the subject matter
contained herein and supersedes all prior oral or written agreements in regards
thereto. Nothing in this Agreement, express or implied, is intended to or shall
confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.

Section 3.08. Amendment. Except as otherwise permitted herein and subject to the
provisions of the Indenture, this Agreement may be amended, supplemented or
otherwise modified only by a written amendment signed by all the parties hereto,
and no waiver of any provision hereof will be effective unless expressed in a
writing signed by all of the parties hereto.

Section 3.09. Severability. The invalidity, illegality or unenforceability of
any provision of this Agreement will in no way affect the validity, legality or
enforceability of any other provision, and if any provision is held to be
enforceable as a matter of law, the other provisions will not be affected
thereby and will remain in full force and effect.

Section 3.10. Headings and Captions. The headings and captions included in this
Agreement are included solely for convenience of reference and will have no
effect on the interpretation or operation of this Agreement.

Section 3.11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which counterpart, when so executed and delivered, will be
deemed to be an original and all such counterparts together will constitute one
and the same instrument. The exchange of copies of this Agreement and of
signature pages by facsimile or email attachment shall constitute effective
execution and delivery of this Agreement as to the parties hereto and may be
used in lieu of the original Agreement for all purposes. Signatures of the
parties hereto transmitted by facsimile or email attachment shall be deemed to
be their original signatures for all purposes.

Section 3.12. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTION CONTEMPLATED HEREBY.

Section 3.13. U.S.A. Patriot Act. The parties hereto acknowledge that in
accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, the
Financial Institution and the Escrow Agent like all financial institutions and
in order to help fight the funding of terrorism and money laundering, is
required to obtain, verify, and record information that identifies each person
or legal entity that establishes a relationship or opens an account with the
Trustee, the Financial Institution and the Escrow Agent. The parties to this
Agreement agree that they will provide the Trustee, the Financial Institution
and the Escrow Agent with such information as any of them may reasonably request
in order for the parties to satisfy the requirements of the U.S.A. Patriot Act.

 

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Section 3.14. The Trustee. The Trustee has entered into this Agreement not in
its individual capacity but solely as Trustee under the Indenture and shall be
entitled, in connection with its execution, delivery and performance of this
Agreement, to all the rights, protections, immunities and exculpations available
to it as Trustee under the Indenture. The Trustee shall not be liable to the
Escrow Agent or the Financial Institution for the payment of any amounts owing
to them under this Agreement, payment of which amounts shall be the sole
obligation of the Grantor.

Section 3.15. ERISA. The Grantor represents and warrants at the date of this
Agreement and at all times until the termination of this Agreement that it is
not and is not acting on behalf of (i) an “employee benefit plan” within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended, (“ERISA”) that is subject to Part 4 of Subtitle B of Title I of
ERISA, (ii) a “plan” within the meaning of Section 4975(e)(1) of the Code, to
which Section 4975 of the Code applies, (iii) an entity whose underlying assets
include “plan assets” subject to Title I of ERISA or Section 4974 of the Code by
reason of Section 3(42) of ERISA, U.S. Department of Labor Regulation 29 CFR
Section 25 10.3-101 or otherwise, or (IV) a “governmental plan” (as defined in
ERISA or the Code) or another type of plan (or an entity whose assets are
considered to include the assets of any such governmental or other plan) that is
subject to any law, rule or restriction that is substantively similar or of
similar effect to Section 406 of ERISA or Section 4975 of the Code (“Similar
Law”). The Grantor will provide written notice to Escrow Agent if it is aware
that it is in breach of this representation and warranty or is aware that with
the passing of time, giving of notice or expiring of any applicable grace period
it will be in breach of this representation and warranty.

Section 3.16. Business Day. As used in this Agreement, “Business Day” means a
day other than a Saturday, Sunday, or other day when banking institutions in New
York, New York are authorized or required by law or executive order to be
closed.

[Signature page follows]

 

 

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
by a duly authorized officer as of the day and year first written above.

 

TOPBUILD CORP. By:  

/s/ John S. Peterson

  Name: John S. Peterson   Title: Chief Financial Officer

TOPBUILD ESCROW CORP.

    as Grantor

By:  

/s/ John S. Peterson

  Name: John S. Peterson   Title: Chief Financial Officer

U.S. BANK NATIONAL ASSOCIATION,

    as Escrow Agent and Financial Institution

By:  

/s/ Michael C. Daly

  Name: Michael C. Daly   Title: Vice President

U.S. BANK NATIONAL ASSOCIATION,

    as Trustee

By:  

/s/ Michael C. Daly

  Name: Michael C. Daly   Title: Vice President

 

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SCHEDULE 3.011

Escrow Agreement Dated as of [date] by and among [Designate Parties]

Certificate of Authorized Representatives – [Designate Party]

 

Name:                                          
                                                Name:
                                         
                                              Title:
                                         
                                                   Title:
                                         
                                                 Phone:
                                         
                                                 Phone:
                                         
                                               Facsimile:
                                         
                                          Facsimile:
                                         
                                        E-mail:
                                        
                                                E-mail:
                                        
                                              Signature:
                                         
                                          Signature:
                                         
                                       

Fund Transfer / Disbursement Authority Level:

 

Authority Level:

  Fund Transfer / Disbursement

☐   Initiate

☐   Verify transactions initiated by others

 

☐   Initiate

☐   Verify transactions initiated by others

 

Name:                                          
                                                Name:
                                         
                                              Title:
                                         
                                                   Title:
                                         
                                                 Phone:
                                         
                                                 Phone:
                                         
                                               Facsimile:
                                         
                                          Facsimile:
                                         
                                        E-mail:
                                        
                                                E-mail:
                                        
                                              Signature:
                                         
                                          Signature:
                                         
                                       

Fund Transfer / Disbursement Authority Level:

 

Authority Level:

  Fund Transfer / Disbursement

☐   Initiate

☐   Verify transactions initiated by others

 

☐   Initiate

☐   Verify transactions initiated by others

 

1 

This Schedule 3.01 may be amended from time to time by written notice from the
Grantor to the Escrow Agent, the Trustee and the Initial Purchasers.

 

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The Escrow Agent is authorized to comply with and rely upon any notices,
instructions or other communications believed by it to have been sent or given
by the person or persons identified above including without limitation, to
initiate and verify funds transfers as indicated.

 

[Name of Party]: By:  

 

  Name:   Title: Date:                       

 

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EXHIBIT A

FORM OF OFFICERS’ CERTIFICATE

of

TOPBUILD ESCROW CORP.

Dated [•], 2018

This certificate is being delivered to the Trustee and the Escrow Agent pursuant
to Section 1.05(b) of the Escrow and Security Agreement, dated as of April 25,
2018 (the “Escrow and Security Agreement”), among TopBuild Escrow Corp. (the
“Grantor”), a Delaware corporation, TopBuild Corp. a Delaware corporation and
the sole stockholder of the Grantor (the “Company”), U.S. Bank National
Association as Escrow Agent (in such capacity, the “Escrow Agent”), U.S. Bank
National Association as Financial Institution (in such capacity, the “Financial
Institution”) and U.S. Bank National Association as Trustee under the Indenture
(in such capacity, the “Trustee”). Capitalized terms used but not defined herein
have the respective meanings specified in the Escrow and Security Agreement and
the Indenture. The Grantor hereby instructs the Escrow Agent to release the
Escrowed Property and certifies through the undersigned officers that all of the
following conditions have been met or will be satisfied substantially
concurrently with the release of the Escrowed Property (or will occur during the
day after the release of funds from the Escrow Account):

(i) the Acquisition has been consummated pursuant to the Acquisition Agreement
(as defined in the Indenture);

(ii) the Company has made borrowings under the Credit Agreement (as defined in
the Indenture) with terms consistent in all material respects with those
described in the Offering Memorandum;

(iii) the Company has executed and delivered a supplemental indenture pursuant
to which it has assumed the obligations of the Grantor under the Indenture and
the Notes;

(iv) each Domestic Subsidiary (as defined in the Indenture) of the Company that
guarantees Indebtedness (as defined in the Indenture) or is a borrower, in each
case, under the Credit Agreement has executed and delivered (A) a supplemental
indenture pursuant to which such Domestic Subsidiary has become a guarantor
party to the Indenture and (B) a joinder agreement under which it has become a
party to the Purchase Agreement;

(v) the opinions specified under Section 5 of the Purchase Agreement required to
be delivered concurrently with the release of the Escrowed Property have been
delivered; and

(vi) the Escrowed Property shall be delivered by wire transfer of immediately
available funds in such amounts, to such persons and in accordance with the
instructions set forth on Schedule I attached to this Officers’ Certificate;

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provided that, it is understood that certain steps set forth above may occur
during the day after the release of funds from the Escrow Account, and the funds
shall be released upon certification that such steps will occur during the day
thereafter.

[Signature page follows]

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IN WITNESS WHEREOF, the Grantor through an Authorized Person, has signed this
Officers’ Certificate as of the date first set forth above.

 

TOPBUILD ESCROW CORP. By:  

 

  Name:   Title: By:  

 

  Name:   Title:

 

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Schedule I

[Payees and wire instructions]

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EXHIBIT B

SCHEDULE OF FEES FOR ESCROW AGENT SERVICES

ESCROW AGENT FEE SCHEDULE

All fees in respect of this Agreement have been paid.

THE SET-UP FEES AND FIRST YEAR’S ANNUAL ADMINISTRATION FEES ARE DUE UPON
EXECUTION OF THE ESCROW AGREEMENT. Escrow Agent reserves the right to bill at
cost for all reasonable, documented out-of-pocket expenses, including
out-of-pocket expenses in connection with the closing. Out-of-pocket expenses
include, but are not limited to, professional services (e.g. legal or
accounting), travel expenses, telephone and facsimile transmission costs,
postage (including express mail and overnight delivery charges), and copying
charges.