AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 27, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BEAZER HOMES USA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1521 58-2086934
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
ORGANIZATION)
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5775 PEACHTREE DUNWOODY ROAD
SUITE C-550
ATLANTA, GEORGIA 30342
(404) 250-3420
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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SEE TABLE OF ADDITIONAL REGISTRANTS BELOW
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IAN J. MCCARTHY
CHIEF EXECUTIVE OFFICER
5775 PEACHTREE DUNWOODY ROAD
SUITE C-550
ATLANTA, GEORGIA 30342
(404) 250-3420
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
WILLIAM F. SCHWITTER, ESQ.
PAUL, HASTINGS, JANOFSKY & WALKER LLP
399 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 318-6000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
If any of the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
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CALCULATION OF REGISTRATION FEE
PRINCIPAL AMOUNT PROPOSED MAXIMUM
AT PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES MATURITY TO BE OFFERING PRICE PRINCIPAL AMOUNT REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT AT MATURITY FEE(1)
8 7/8% Senior Notes due 2008 $100,000,000 100% $100,000,000 $29,500
Subsidiary Guarantees
---- ---- ---- ----
(1) Calculated pursuant to Rule 457.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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BEAZER HOMES USA, INC.
TABLE OF ADDITIONAL REGISTRANTS
PRIMARY
STANDARD
INDUSTRIAL IRS EMPLOYER
STATE OF CLASSIFICATION IDENTIFICATION
NAME INCORPORATION/FORMATION CODE NUMBER NO.
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Beazer Homes Corp....................................... Tennessee 1521 62-0880780
Beazer/Squires Realty, Inc.............................. North Carolina 1521 56-1807308
Beazer Homes Sales Arizona Inc.......................... Delaware 1521 86-0728694
Beazer Realty Corp...................................... Georgia 1521 58-1200012
Panitz Homes Realty, Inc................................ Florida 1521 59-2639673
Beazer Mortgage Corporation............................. Delaware 6163 58-2203537
Beazer Homes Holdings Corp.............................. Delaware 1521 58-2222637
Beazer Homes Texas Holdings, Inc........................ Delaware 1521 58-2222643
Beazer Homes Texas, L.P................................. Delaware 1521 76-0496353
The address, including zip code, and telephone number, including area code,
of the principal offices of the additional registrants listed above (the
"Additional Registrants") is: c/o Beazer Homes USA, Inc., 5775 Peachtree
Dunwoody Road, Suite C-550, Atlanta, GA 30342 and the telephone number at that
address is (404) 250-3420.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED APRIL 27, 1998
PROSPECTUS
BEAZER HOMES USA, INC.
OFFER TO EXCHANGE ITS 8 7/8% SENIOR NOTES DUE 2008, WHICH
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, FOR ANY AND ALL OF ITS OUTSTANDING
8 7/8% SENIOR NOTES DUE 2008
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
, 1998, UNLESS EXTENDED.
Beazer Homes USA, Inc., a Delaware corporation (the "Company"), hereby offers,
upon the terms and subject to the conditions set forth in this Prospectus and
the accompanying letter of transmittal (the "Letter of Transmittal" and together
with this Prospectus, the "Exchange Offer"), to exchange its 8 7/8% Senior Notes
due 2008 (the "Exchange Notes"), which have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), pursuant to a Registration
Statement (as defined herein) of which this Prospectus is a part, for an equal
principal amount of its outstanding 8 7/8% Senior Notes due 2008 (the "Old
Notes"), of which $100.0 million principal amount is outstanding. The Exchange
Notes and the Old Notes are collectively referred to herein as the "Notes."
The Company will accept for exchange any and all Old Notes that are validly
tendered and not withdrawn on or prior to 5:00 p.m., New York City time, on
, 1998, unless the Exchange Offer is extended (the "Expiration Date").
Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York
City time, on the Expiration Date. The Exchange Notes will be issued and
delivered promptly after the Expiration Date. The Exchange Offer is not
conditioned upon any minimum principal amount of Old Notes being tendered for
exchange. See "The Exchange Offer." Old Notes may be tendered only in integral
multiples of $1,000. The Company has agreed to pay the expenses of the Exchange
Offer.
The Exchange Notes will be obligations of the Company evidencing the same debt
as the Old Notes and will be entitled to the benefits of the same indenture,
dated as of March 25,1998 (the "Indenture"), between the Company and U.S. Bank
Trust National Association (formerly known as First Trust National Association),
as trustee (the "Trustee"). The form and terms of the Exchange Notes are
substantially the same as the form and terms of the Old Notes except that the
Exchange Notes have been registered under the Securities Act. See "The Exchange
Offer."
The Exchange Notes will bear interest from March 20, 1998. Holders of Old Notes
whose Old Notes are accepted for exchange will be deemed to have waived the
right to receive any payment in respect of interest on the Old Notes accrued up
until the date of the issuance of the Exchange Notes. Such waiver will not
result in the loss of interest income to such holders, since the Exchange Notes
will bear interest from the issue date of the Old Notes.
Interest on the Exchange Notes will be payable semi-annually on April 1 and
October 1 of each year, commencing on October 1, 1998. The Exchange Notes will
mature on April 1, 2008. Except as set forth below, the Exchange Notes will not
be redeemable prior to April 1, 2003. Thereafter, the Exchange Notes will be
redeemable at the option of the Company, in whole or in part, at the redemption
prices set forth herein, together with accrued and unpaid interest, if any, to
the date of redemption. In addition, at any time on or prior to April 1, 2001,
the Company may, subject to certain requirements, redeem up to 35% of the
original aggregate principal amount of the Exchange Noes with the net cash
proceeds of one or more Equity Offerings (as defined herein), at 108.875% of the
principal amount thereof, together with accrued and unpaid interest, if any, to
the date of redemption; PROVIDED, that at least $65 million of Notes remain
outstanding immediately after any such redemption. Upon the occurrence of a
Change of Control (as defined herein), each holder of the Exchange Notes may
require the Company to repurchase such holder's Exchange Notes at 101% of the
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
(as defined herein), if any, to the date of repurchase. See "Description of
Notes-Change of Control."
Each broker-dealer that receives Exchange Notes for its own account in exchange
for Old Notes, where such Old Notes were acquired by such broker-dealer as a
result of market-making or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange Notes.
The Letter of Transmittal states that, by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Notes received in exchange for Old Notes
where such Old Notes were acquired by such broker-dealer as a result of
market-making or other trading activities. The Company has agreed that for a
period of 180 days after consummation of the Exchange Offer, it will make this
Prospectus, as it may be amended or supplemented from time to time, available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
There has been no public market for the Old Notes. If a market for the Exchange
Notes should develop, the Exchange Notes could trade at a discount from their
principal amount. The Company does not intend to list the Exchange Notes on a
national securities exchange or quotation system. There can be no assurance that
an active public market for the Exchange Notes will develop.
SEE "RISK FACTORS" BEGINNING ON PAGE 14 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE EXCHANGE NOTES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-4 (together with all
amendments, exhibits, schedules and supplements thereto, the "Registration
Statement") under the Securities Act with respect to the Exchange Notes offered
hereby. This Prospectus, which forms a part of the Registration Statement, does
not contain all the information set forth in the Registration Statement, certain
parts of which have been omitted in accordance with the rules and regulations of
the Commission. For further information with respect to the Company and the
Exchange Notes offered hereby, reference is made to the Registration Statement.
Statements contained in this Prospectus as to the contents of certain documents
filed as exhibits to the Registration Statement are not necessarily complete
and, in each case, are qualified by reference to the copy of the document so
filed. The Registration Statement can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World
Trade Center, 13th Floor, New York, New York 10048. Copies of such material may
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Such material also
can be reviewed through the Commission's Electronic Data Gathering, Analysis,
and Retrieval System ("EDGAR"), which is publicly available through the
Commission's web site (http://www.sec.gov).
The Company's Common Stock and Series A Preferred Stock is traded on the New
York Stock Exchange (the "NYSE") and reports, proxy and information statements,
and other information concerning the Company can be inspected at the offices of
the NYSE at 20 Broad Street, New York New York 10005.
The Company intends to furnish to each holder of the Exchange Notes annual
reports containing audited financial statements and quarterly reports containing
unaudited financial information for the first three quarters of each fiscal
year. The Company also will furnish to each holder of the Exchange Notes such
other reports as may be required by applicable law.
The principal executive offices of the Company are located at 5775 Peachtree
Dunwoody Road, Suite C-550, Atlanta, Georgia 30342, and its telephone number is
(404) 250-3420.
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
This Prospectus contains "forward-looking statements" within the meaning of
the federal securities law. These forward-looking statements include, among
others, statements concerning the Company's outlook for the future, overall and
market specific trends, the Company's expectations as to funding its capital
expenditures and operations, and other statements of expectations, beliefs,
future plans and strategies, anticipated events or trends, and similar
expressions concerning matters that are not historical facts. The
forward-looking statements in this Prospectus are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed in or implied by the statements. Significant factors that could cause
actual results to differ materially from those expressed in the forward-looking
statements include, but are not limited to, the following: (i) economic changes
nationally or in one of the Company's local markets; (ii) volatility of mortgage
interest rates; (iii) increased competition in some of the Company's local
markets; (iv) increased prices for labor, land and raw materials used in the
production of houses; (v) increased land development costs of projects under
development; (vi) any delays in reacting to changing consumer preference in home
design; and (vii) delays or difficulties in implementing the Company's
initiatives to reduce its production and overhead cost structure.
2
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-12822) pursuant to the Exchange Act are incorporated herein by reference:
(i) the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997;
(ii) the Company's Quarterly Report on Form 10-Q for the quarterly
period ended December 31, 1997;
(iii) the Company's Current Report on Form 8-K dated March 10, 1998;
(iv) the Company's Current Report on Form 8-K dated March 19, 1998; and
(v) the Company's Current Report on Form 8-K dated March 31, 1998.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the Exchange Offer shall be deemed incorporated by reference
into this Prospectus and to be a part hereof from the date such documents are
filed.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein will be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in any subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded will not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH
PERSON TO WHOM A COPY OF THIS PROSPECTUS IS DELIVERED, UPON THE WRITTEN OR ORAL
REQUEST OF SUCH PERSON, A COPY OF EACH DOCUMENT INCORPORATED HEREIN BY
REFERENCE. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO IAN J. MCCARTHY,
PRESIDENT AND CHIEF EXECUTIVE OFFICER, BEAZER HOMES USA, INC., 5775 PEACHTREE
DUNWOODY ROAD, SUITE C-550, ATLANTA, GEORGIA 30342.
3
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION, INCLUDING THE FINANCIAL STATEMENTS AND NOTES THERETO, APPEARING
ELSEWHERE OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. EXCEPT WHERE
OTHERWISE INDICATED, THE "COMPANY" OR "BEAZER" MEANS BEAZER HOMES USA, INC. AND
ALL OF ITS SUBSIDIARIES.
THE COMPANY
Beazer Homes USA, Inc. ("Beazer" or the "Company") designs, builds and sells
single family homes in the Southeast, Southwest and Central regions of the
United States and, based on home closings, is one of the ten largest builders of
single family detached homes in the nation. The Company's Southeast region
includes Georgia, North Carolina, South Carolina, Tennessee and Florida, its
Southwest region includes Arizona, California and Nevada and its Central region
includes Texas. The Company's homes are designed to appeal primarily to
entry-level and first time move-up home buyers. For the twelve months ended
December 31, 1997, the Company had 5,710 home closings, revenues of
approximately $845.6 million and EBITDA (as defined) of approximately $40.7
million.
The Company's objective is to provide its customers with homes that
incorporate quality and value while seeking to maximize its return on invested
capital. To achieve this objective, the Company has developed a business
strategy which focuses on the following elements:
GEOGRAPHIC DIVERSITY AND GROWTH MARKETS. The Company competes in a large
number of geographically diverse markets and attempts to react quickly to
allocate capital to those markets which it believes provide attractive
growth characteristics and opportunities for superior returns. The majority
of the Company's markets have experienced significant population and
employment growth in recent years. Seven of the nine states in which the
Company operates were ranked among the top ten for population growth for the
years 1995 through 2000 as projected by the U.S. Census Bureau. The Company
strives to maintain a strong competitive position in all of its markets and
believes that it is among the top five single family homebuilders in the
majority of such markets. Within these markets, the Company builds homes in
a variety of projects, typically with fewer than 150 homesites per project.
QUALITY HOMES FOR ENTRY-LEVEL AND FIRST TIME MOVE-UP HOME BUYERS. The
Company seeks to maximize customer satisfaction by offering homes which
incorporate quality materials, distinctive design features, convenient
locations and competitive prices. The Company focuses on entry-level and
first time move-up home buyers because it believes they represent the
largest segment of the homebuilding market. In addition, the Company seeks
to customize its homes to individual home buyers through the use of design
options and upgrades, many of which are sold through the centralized design
centers recently opened by the Company in the majority of its markets. The
Company believes that through the increased sale of options and upgrades it
can improve both the value of its homes to its customers and its profit
margins. During fiscal 1997, the average sales price of the Company's homes
closed was approximately $147,100.
DECENTRALIZED OPERATIONS WITH EXPERIENCED MANAGEMENT. The Company
believes its in-depth knowledge of its local markets enables it to better
serve its customers. The Company's local managers, who have significant
experience in both the homebuilding industry and the markets they serve, are
responsible for operating decisions regarding design, construction and
marketing. The Company combines these decentralized operations with
centralized corporate-level management, which controls decisions regarding
overall strategy, land acquisitions and financial matters. In addition, over
the past year, the Company has embarked on a centrally driven effort to
redesign its sales and construction processes and to streamline its
information systems. The Company's process redesign, information systems and
mortgage origination efforts are part of a centrally driven emphasis on
improving the Company's overall profitability.
4
CONSERVATIVE LAND POLICIES. The Company seeks to maximize its return on
capital employed by limiting its investment in land and by focusing on
inventory turnover. To implement this strategy and to reduce the risks
associated with investments in land, the Company enters into option
agreements to control land whenever possible. At December 31, 1997,
approximately 50% of the land controlled by the Company was subject to
option contracts. In addition, the Company does not speculate in unentitled
land.
During the quarter ended December 31, 1997, the Company received 1,086 new
contracts for homes, an increase of approximately 5% over the quarter ended
December 31, 1996. Backlog at December 31, 1997 was 1,336 homes, with a total
dollar value of approximately $212.7 million, a decrease in number of homes of
approximately 0.8%, but an increase of approximately 7.3% in dollar value, from
backlog at December 31, 1996.
During fiscal year 1996, the Company established Beazer Mortgage Company
("Beazer Mortgage"). Beazer Mortgage originates, but does not hold or service,
mortgages for home buyers of the homebuilding operations of the Company. At
December 31, 1997, Beazer Mortgage had branches operating in eight of the nine
states in which the Company operates and opened a branch in the last state,
Tennessee, in January 1998.
RECENT DEVELOPMENTS
For the two months ended February 28, 1998, the Company had 1,488 new orders
for homes, a 55% increase over 961 new orders for the two months ended February
28, 1997.
Effective November 28, 1997, the Company acquired the assets of the Orlando,
Florida homebuilding operations of Calton Homes, Inc. ("Calton") for
approximately $16.8 million. The Orlando acquisition is part of the Company's
emphasis on expanding its operations in Florida, a state which the Company
believes can grow significantly in the future due to positive population and
employment trends.
On December 9, 1997, the Company and Corporacion GEO S.A. de C.V.
("Corporacion GEO"), the largest builder of affordable homes in Mexico, entered
into a joint venture arrangement to build homes in the United States. The joint
venture will focus exclusively on the development, construction and sale of
affordable housing (initially expected to be priced between $35,000 and $45,000)
in the Southern United States, initially focusing on Texas. The joint venture is
owned 60% by Corporacion GEO and 40% by Beazer. The Company expects that the
joint venture will deliver its first homes in its initial project located in El
Paso, Texas in late calendar 1998. The Company does not expect the joint venture
to have a significant effect on operating results in fiscal 1998.
The Company's principal executive offices are located at 5775 Peachtree
Dunwoody Road, Suite C-550, Atlanta, Georgia 30342, and its telephone number is
(404) 250-3420.
5
THE EXCHANGE OFFER
THE EXCHANGE OFFER......... $1,000 principal amount of Exchange Notes will be issued in
exchange for each $1,000 amount of Old Notes validly tendered
pursuant to the Exchange Offer. As of the date hereof, $100.0
million in aggregate principal amount of Old Notes are
outstanding. The Company will issue the Exchange Notes to
tendering holders of Old Notes promptly after the Expiration
Date.
RESALES.................... Based on an interpretation by the staff of the Commission set
forth in Morgan Stanley & Co., Incorporated, SEC No-Action
Letter (available June 5, 1991) (the "Morgan Stanley Letter"),
Exxon Capital Holdings Corporation, SEC No-Action Letter
(available May 13, 1988) (the "Exxon Capital Letter") and
similar letters, the Company believes that Exchange Notes
issued pursuant to the Exchange Offer in exchange for Old Notes
may be offered for resale, resold and otherwise transferred by
any person receiving such Exchange Notes, whether or not such
person is the holder (other than any such holder or other
person which is (i) a broker-dealer that receives Exchange
Notes for its own account in exchange for Old Notes, where such
Old Notes were acquired by such broker-dealer as a result of
market-making or other trading activities, or (ii) an
"affiliate" of the Company within the meaning of Rule 405 under
the Securities Act (collectively, "Restricted Holders"))
without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that (a)
such Exchange Notes are acquired in the ordinary course of
business of such holder or other person (b) neither such holder
nor such other person is engaged in or intends to engage in a
distribution of such Exchange Notes and (c) neither such holder
nor other person has any arrangement or understanding with any
person to participate in the distribution of such Exchange
Notes. If any person were to be participating in the Exchange
Offer for the purposes of participating in a distribution of
the Exchange Notes in a manner not permitted by the
Commission's interpretation, such person (a) could not rely
upon the Morgan Stanley Letter, the Exxon Capital Letter of
similar letters and (b) must comply with the registration and
prospectus delivery of Securities Act in connection with a
secondary resale transaction. Each broker or dealer that
receives Exchange Notes for its own account in in exchange for
Old Notes that were acquired by such broker or dealer as a
result of market-making or other activities, must acknowledge
that it will deliver a prospectus in connection with any sale
of such Exchange Notes. See "Plan of Distribution."
EXPIRATION DATE............ 5:00 p.m., New York City time, on , 1998 unless
the Exchange Offer is extended, in which the term "Expiration
Date" means the latest date and time to which the Exchange
Offer is extended.
ACCRUED INTEREST ON THE
EXCHANGE NOTES AND OLD
NOTES.................... The Exchange Notes will bear interest from March 20, 1998.
Holders of Old Notes whose Old Notes are accepted for exchange
will be deemed to have waived the right to receive any payment
in respect of interest on such Old Notes accrued to the date of
issuance of the Exchange Notes.
CONDITIONS TO THE EXCHANGE
OFFER.................... The Exchange Offer is subject to certain customary conditions.
The
6
conditions are limited and relate in general to proceedings
which have been instituted or laws which have been adopted that
might impair the ability of the Company to proceed with the
Exchange Offer. As of the date of this Prospectus, none of
these events had occurred, and the Company believes their
occurrence to be unlikely. If any such conditions exist prior
to the Expiration Date, the Company may (a) refuse to accept
any Old Notes and return all previously tendered Old Notes, (b)
extend the Exchange Offer or (c) waive such conditions. See
"The Exchange Offer--Conditions."
PROCEDURES FOR TENDERING
NOTES.................... Each holder of Old Notes wishing to accept the Exchange Offer
must complete, sign and date the Letter of Transmittal, or a
facsimile thereof, in accordance with the instructions
contained herein and therein, and mail or otherwise deliver
such Letter of Transmittal, or such facsimile, together with
the Old Notes to be exchanged and any other required
documentation to the Exchange Agent (as defined) at the address
set forth herein and therein. Tendered Old Notes, the Letter of
Transmittal and accompanying documents must be received by the
Exchange Agent by 5:00 p.m. New York City time, on the
Expiration Date. See "The Exchange Offer--Procedures for
Tendering." By executing the Letter of Transmittal, each holder
will represent to the Company that, among other things, the
Exchange Notes acquired pursuant to be Exchange Offer are being
obtained in the ordinary course of business of the person
receiving such Exchange Notes, whether or not such person is
the holder, that neither the holder nor any such other person
is engaged in or intends to engage in a distribution of the
Exchange Notes or has an arrangement or understanding with any
person to participate in the distribution of such Exchange
Notes, and that neither the holder nor any such other person is
an "affiliate," as defined under Rule 405 of the Securities
Act, of the Company.
SPECIAL PROCEDURES FOR
BENEFICIAL HOLDERS....... Any beneficial holder whose Old Notes are registered in the
name of its broker, dealer, commercial bank, trust company or
other nominee and who wishes to tender in the Exchange Offer
should contact such registered holder promptly and instruct
such registered holder to tender of its behalf. If such
beneficial holder wishes to tender on its own behalf, such
beneficial holder must, prior to completing and executing the
Letter of Transmittal and delivering its Old Notes, either make
appropriate arrangements to register ownership of the Old Notes
in such holder's name or obtain a properly completed bond power
from the registered holder. The transfer of record ownership
may take considerable time. See "The Exchange Offer--Procedures
for Tendering."
GUARANTEED DELIVERY
PROCEDURES............... Holders of Old Notes who wish to tender their Old Notes and
whose Old Notes are not immediately available or who cannot
deliver their Old Notes and a properly completed Letter of
Transmittal or any other documents required by the Letter of
Transmittal to the Exchange Agent prior to the Expiration Date
may tender their Old Notes according to the guaranteed delivery
procedures set forth in "The Exchange Offer-- Guaranteed
Delivery Procedures."
WITHDRAWAL RIGHTS.......... Tenders may be withdrawn at any time prior to 5:00 p.m., New
York City time, on the Expiration Date.
7
ACCEPTANCE OF OLD NOTES AND
DELIVERY OF EXCHANGE
NOTES.................... Subject to certain conditions, the Company will accept for
exchange any and all Old Notes which are properly tendered in
the Exchange Offer prior to 5:00 p.m., New York City time, on
the Expiration Date. The Exchange Notes issued pursuant to the
Exchange Offer will be delivered promptly after the Expiration
Date. See "The Exchange Offer--Terms of the Exchange Offer."
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES............. The exchange of Old Notes for Exchange Notes pursuant to the
Exchange Offer will not be a taxable event for federal income
tax purposes. A holder's holding period for Exchange Notes will
include the holding period for Old Notes. For a discussion
summarizing certain U.S. federal income tax consequences to
holders of the Exchange Notes, see "Certain Federal Income Tax
Consequences."
EXCHANGE AGENT............. U.S. Bank Trust National Association is serving as exchange
agent (the "Exchange Agent") in connection with Exchange Offer.
Deliveries by hand should be addressed to U.S. Bank Trust
National Association, 100 Wall Street, 20th Floor, New York,
New York 10005, Attention: Cathy Donohue (for a New York
depository only) or to U.S. Bank Trust National Association,
Fourth Floor--Bond Drop Window, 180 East Fifth Street, St.
Paul, Minnesota 55101 (for all others). Deliveries by
registered, certified or overnight mail should be addressed to
U.S. Bank Trust National Association, Attention: Specialized
Finance, 180 East Fifth Street, St. Paul, Minnesota 55101, and
deliveries by first class mail should be addressed to U.S. Bank
Trust National Association, P.O. Box 64485, St. Paul, Minnesota
55101. For information with respect to the Exchange Offer,
contact the Exchange Agent at telephone number 800-934-6802 or
facsimile number 612-244-1537.
USE OF PROCEEDS............ The Company will not receive any proceeds from the Exchange
Offer. See "Use of Proceeds." The Company has agreed to bear
the expenses of the Exchange Offer pursuant to the Registration
Rights Agreement (as defined). No underwriter is being used in
connection with the Exchange Offer.
8
SUMMARY OF TERMS OF EXCHANGE NOTES
The Exchange Offer constitutes an offer to exchange up to $100.0 million
aggregate principal amount of the Exchange Notes for up to an equal aggregate
principal amount of Old Notes. The Exchange Notes will be obligations of the
Company evidencing the same indebtedness as the Old Notes, and will be entitled
to the benefit of the same indenture (the "Indenture"). The form and terms of
the Exchange Notes are substantially the same as the form and terms of the Old
Notes except that the Exchange Notes have been registered under the Securities
Act. See "Description of the Notes."
COMPARISON WITH OLD NOTES
FREELY TRANSFERABLE............... The Exchange Notes will be freely transferable under the
Securities Act by holders who are not Restricted
Holders. Restricted Holders are restricted from
transferring the Exchange Notes without compliance with
the registration and prospectus delivery requirements of
the Securities Act. The Exchange Notes will be identical
in all material respects (including interest rate,
maturity and restrictive covenants) to the Old Notes,
with the exception that the Exchange Notes will be
registered under the Securities Act. See "The Exchange
Offer--Terms of the Exchange Offer."
REGISTRATION RIGHTS............... The holders of Old Notes currently are entitled to
certain registration rights pursuant to the Registration
Rights Agreement, dated as of March 25, 1998 (the
"Registration Rights Agreement"), by and among the
Company and SBC Warburg Dillon Read Inc., Donaldson,
Lufkin & Jenrette Securities Corporation and Salomon
Smith Barney, the initial purchasers of the Old Notes
(collectively, the "Initial Purchasers"), including the
right to cause the Company to register the Old Notes
under the Securities Act if the Exchange Offer is not
consummated prior to the Exchange Offer Termination Date
(as defined). See "The Exchange Offer-- Conditions."
However, pursuant to the Registration Rights Agreement,
such registration rights will expire upon consummation
of the Exchange Offer. Accordingly, holders of Old Notes
who do not exchange their Old Notes for Exchange Notes
in the Exchange Offer will not be able to reoffer,
resell or otherwise dispose of their Old Notes unless
such Old Notes are subsequently registered under the
Securities Act or unless an exemption from the
registration requirements of the Securities Act is
available.
TERMS OF THE EXCHANGE NOTES
MATURITY DATE..................... April 1, 2008.
INTEREST PAYMENT DATES............ April 1 and October 1, commencing October 1,1998.
9
OPTIONAL REDEMPTION............... The Exchange Notes will be redeemable at the Company's
option, in whole or in part, at any time on or after
April 1, 2003, at the redemption prices set forth
herein, together with accrued and unpaid interest and
Liquidated Damages (as defined) if any, to the date of
redemption. In addition, on or prior to April 1, 2001,
in the event of one or more Equity Offerings, the
Company may, at its option, redeem up to 35% of the
principal amount of Exchange Notes originally issued
from the net proceeds thereof at a redemption price
equal to 108.875% of the principal amount thereof,
together with accrued and unpaid interest and Liquidated
Damages, if any, to the date of redemption; provided,
that at least $65 million of Notes remain outstanding
immediately after such redemption.
CHANGE OF CONTROL................. Upon a Change of Control, each holder of the Exchange
Notes will have the right to require the Company to
repurchase all or a portion of such holder's Exchange
Notes at a price of 101% of the principal amount thereof
plus accrued interest to the repurchase date. See
"Description of the Notes--Certain Covenants--Change of
Control."
SUBSIDIARY GUARANTEES............. The Exchange Notes will be unconditionally guaranteed,
on a senior basis, by substantially all of the Company's
existing wholly-owned direct and indirect subsidiaries
and each subsidiary that in the future guarantees the
Credit Facility (collectively, the "Subsidiary
Guarantors"). The Subsidiary Guarantors will be joint
and several, general unsecured obligations of the
Subsidiary Guarantors.
RANKING........................... The Exchange Notes will be general unsecured obligations
of the Company, ranking PARI PASSU in right of payment
to all existing and future senior debt of the Company,
including the Company's $200 million unsecured Credit
Facility (the "Credit Facility") and the Company's
outstanding 9% Senior Notes due 2004 (the "1994 Notes").
In addition, the Exchange Notes will be effectively
subordinated to all secured obligations to the extent of
the assets securing such obligations. At December 31,
1997, after giving effect to the issuance of the
Exchange Notes, the Company would have had approximately
$238 million of senior debt outstanding, none of which
wold have been secured. The Indenture pursuant to which
the Exchange Notes are being issued permits the Company
to incur additional indebtedness, including senior debt,
subject to certain limitations. See "Description of
Notes--General" and "Description of Notes-- Certain
Covenants--Limitations on Additional Indebtedness."
10
CERTAIN COVENANTS................. The Indenture contains certain covenants that, among
other things, limit the ability of the Company and its
subsidiaries to incur additional indebtedness, pay
dividends or make other distributions, make investments,
dispose of assets, create certain liens, enter into sale
and leaseback transactions, enter into certain
transactions with affiliates, or enter into certain
mergers or consolidations or sell all or substantially
all of the Company's assets. See "Description of
Notes--Certain Covenants."
RISK FACTORS
The homebuilding industry in cyclical and is significantly affected by
changes in economic and other conditions, such as variability in real estate
values and the availability and cost of mortgage financing for the Company's
customers. A majority of the Company's markets have been, and are expected to
continue to be, sensitive to such changes in economic conditions. For a
discussion of these and other factors that should be considered in evaluating an
investment in the Exchange Notes, see "Risk Factors."
11
SUMMARY CONSOLIDATED
FINANCIAL AND OPERATING INFORMATION
(DOLLARS IN THOUSANDS)
THREE MONTHS ENDED
FISCAL YEAR ENDED SEPTEMBER 30, DECEMBER 31,
---------------------------------- ----------------------
1995 1996 1997 1996 1997
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
INCOME STATEMENT DATA:
Total revenue...................................... $ 647,828 $ 866,627 $ 851,101 $ 161,083 $ 155,626
Costs and expenses:
Home construction and land sales................. 552,204 732,395 720,992 135,371 130,475
Amortization of previously capitalized
interest....................................... 13,268 15,134 14,857 2,740 3,047
Selling, general and administrative.............. 63,727 88,976 91,270 18,773 19,296
Writedown of inventory........................... -- -- 6,326 -- --
---------- ---------- ---------- ---------- ----------
Operating income................................... 18,629 30,122 17,656 4,199 2,808
Other income....................................... 291 71 538 190 150
---------- ---------- ---------- ---------- ----------
Income before income taxes......................... 18,920 30,193 18,194 4,389 2,958
Provision for income taxes......................... 7,568 11,927 7,005 1,712 1,139
---------- ---------- ---------- ---------- ----------
Net income......................................... $ 11,352 $ 18,266 $ 11,189 $ 2,677 $ 1,819
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
OPERATING DATA:
Units:
New orders, net of cancellations(1).............. 4,841 5,621 5,551 1,034 1,086
Closings......................................... 4,363 5,935 5,785 1,113 1,038
Backlog at end of period......................... 1,484 1,426 1,192 1,347 1,336
Aggregate sales value of homes in backlog at end of
period........................................... $ 212,163 $ 210,637 $ 190,439 $ 198,265 $ 212,650
Average sales price per home closed................ $ 148.5 $ 146.0 $ 147.1 $ 144.7 $ 149.9
FISCAL YEAR ENDED SEPTEMBER 30, TWELVE MONTHS ENDED
------------------------------- DECEMBER 31,
1995 1996 1997 1997
--------- --------- --------- --------------------
(UNAUDITED)
OTHER DATA:
EBIT(2).................................................. $ 32,188 $ 45,327 $ 39,377 $ 38,253
EBITDA(3)................................................ 33,542 46,855 41,598 40,743
Interest incurred(4)..................................... 14,737 14,176 16,159 17,593
Ratio of EBIT to interest incurred....................... 2.18x 3.20x 2.44x 2.17x
Ratio of EBITDA to interest incurred..................... 2.28x 3.31x 2.57x 2.32x
Ratio of Total Debt to EBITDA............................ 3.43x 2.45x 3.49x 5.77x
12
SEPTEMBER 30, DECEMBER 31,
---------------------------------- ----------------------
1995 1996 1997 1996 1997
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
BALANCE SHEET DATA:
Cash............................................... $ 40,407 $ 12,942 $ 1,267 $ 3,178 $ --
Inventory.......................................... 285,268 320,969 361,945 347,627 423,945
Total assets....................................... 345,240 356,643 399,595 372,879 462,762
Borrowings under Credit Facility................... -- -- 30,000 37,000 120,000
9% Senior Notes due 2004 115,000 115,000 115,000 115,000 115,000
Total debt......................................... 115,000 115,000 145,000 152,000 235,000
Stockholders' equity............................... 164,544 178,701 179,286 179,659 180,186
- ------------------------
(1) New orders for the fiscal years ended September 30, 1995 and 1996 and for
the three months ended December 31, 1997 do not include 19, 256 and 96 homes
in backlog, respectively, from acquired operations at the date of such
acquisitions.
(2) "EBIT" means net income before (i) total interest expensed and previously
capitalized interest amortized to cost of sales; (ii) income taxes; and
(iii) a $6.3 million writedown to inventory in the Company's Nevada
operations during fiscal 1997. For this purpose, "total interest expensed
and previously capitalized interest amortized to cost of sales" is
calculated in accordance with the definition of "Interest Expense" in the
Indenture and set forth herein under "Description of Notes-- Certain
Definitions."
(3) "EBITDA" means EBIT (as defined) plus depreciation and amortization and is
calculated in accordance with the definition of "Consolidated Cash Flow
Available for Fixed Charges" in the Indenture and set forth herein under
"Description of Notes--Certain Definitions." EBITDA is not intended to
represent cash flow for the period nor has it been presented as an
alternative to net income, determined in accordance with generally accepted
accounting principles, as an indicator of operating performance. In
addition, this measure of EBITDA may not be comparable to similar measures
reported by other companies. See "Selected Consolidated Financial
Information."
(4) "Interest incurred" is calculated in accordance with the definition of the
term "Interest Incurred" in the Indenture and set forth herein under
"Description of Notes--Certain Definitions."
13
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN, OR INCORPORATED BY
REFERENCE IN, THIS PROSPECTUS, THE FOLLOWING FACTORS SHOULD BE CONSIDERED
CAREFULLY BY PROSPECTIVE INVESTORS.
HOMEBUILDING INDUSTRY MARKET CONDITIONS
The homebuilding industry is cyclical and is significantly affected by
changes in national and local economic and other conditions, such as employment
levels, availability of financing, interest rates, consumer confidence and
housing demand. The risks inherent to homebuilders in purchasing and developing
land increase as consumer demand for housing decreases. Because of the long-term
financial commitment involved in purchasing a home, general economic
uncertainties tend to result in more caution on the part of home buyers, which
tends to result in fewer home purchases. Such uncertainties could adversely
affect the performance of the Company and the market price for its securities.
In addition, homebuilders are subject to various risks, many of which are
outside the control of the homebuilder, including conditions of supply and
demand in local markets, weather conditions and natural disasters, such as
hurricanes, earthquakes and wildfires, delays in construction schedules, cost
overruns, changes in government regulations, increases in real estate taxes and
other local government fees and availability and cost of land, materials and
labor. Although the principal raw materials used in the homebuilding industry
generally are available from a variety of sources, such materials are subject to
periodic price fluctuations. There can be no assurance that the occurrence of
any of the foregoing will not have a material adverse effect on the Company.
The homebuilding industry is also subject to the potential for significant
variability and fluctuations in real estate values. Although the Company
believes that its projects are currently reflected on the Company's balance
sheet at or below their net realizable value, no assurances can be given that in
the future write-downs will not be material in amount.
INTEREST RATES; MORTGAGE FINANCING
Virtually all purchasers of the Company's homes finance their acquisitions
through lenders providing mortgage financing. In general, housing demand is
adversely affected by increases in interest rates, unavailability of mortgage
financing, increasing housing costs and unemployment. If mortgage interest rates
increase and the ability of prospective buyers to finance home purchases is
adversely affected, the Company's sales, gross margins and net income and the
market prices of the Company's securities may be adversely impacted. The
Company's homebuilding activities are also dependent upon the availability and
cost of mortgage financing for buyers of homes owned by potential customers so
those customers ("move-up buyers") can sell their homes and purchase a home from
the Company. In addition, the Company believes that the availability of Federal
Housing Administration ("FHA") and Veterans Administration ("VA") mortgage
financing is an important factor in marketing many of its homes. Any limitations
or restrictions on the availability of such financing could adversely affect the
Company's sales. Furthermore, changes in federal income tax laws may affect
demand for new homes. Proposals have been publicly discussed to eliminate or
limit the deductibility of mortgage interest for federal income tax purposes and
to eliminate or limit tax-free rollover treatment provided under current law
where proceeds of the sale of a principal residence are reinvested in a new
principal residence. Enactment of such proposals may have an adverse effect on
the homebuilding industry in general, and demand for the Company's products in
particular. No prediction can be made whether any such proposals will be enacted
and, if enacted, the particular form such laws would take.
VARIABILITY OF RESULTS
Although the Company had net income for fiscal years 1996 and 1997, there
can be no assurance that the Company's profitability will continue on a
quarterly or annual basis. The Company historically has
14
experienced and in the future expects to continue to experience, variability in
sales and net income on a quarterly basis. Factors expected to contribute to
this variability in the future include, among others (i) the timing of home
closings and land sales; (ii) the Company's ability to continue to acquire
additional land or options thereon on acceptable terms; (iii) the condition of
the real estate market and the general economy in the markets in which the
Company operates and other markets into which the Company may expand its
operations; (iv) the cyclical nature of the homebuilding industry and changes in
prevailing interest rates and the availability of mortgage financing; and (v)
costs of material and labor and delays in construction schedules. The Company's
historical financial performance is not necessarily a meaningful indicator of
future results and, in general, the Company expects its financial results to
vary from project to project and from quarter to quarter.
COMPETITION
The homebuilding industry is highly competitive and fragmented. Homebuilders
compete for desirable properties, financing, raw materials and skilled labor.
The Company competes for residential sales with other developers, individual
resales of existing homes, available rental housing and, to a lesser extent,
resales of condominiums. The Company's competitors include large homebuilding
companies, some of which have greater financial resources than the Company, and
small homebuilders, some of which may have lower costs.
FINANCING; LEVERAGE
The homebuilding industry is capital intensive and homebuilding requires
significant up-front expenditures to acquire land and begin development.
Accordingly, the Company incurs substantial indebtedness to finance its
homebuilding activities. Although the Company believes that internally generated
funds and available borrowings under the Credit Facility will be sufficient to
fund the Company's capital and other expenditures (including land purchases in
connection with ordinary development activities), there can be no assurance that
the amounts available from such sources will be sufficient. The Company may be
required to seek additional capital in the form of equity or debt financing from
a variety of potential sources, including additional bank financing and/or
securities offerings. The amount and types of indebtedness which the Company may
incur is limited by the terms of the indentures governing the Notes and the 1994
Notes and by the terms of the Credit Facility. In addition, the availability of
borrowed funds, especially for land acquisition and construction financing, may
be greatly reduced nationally, and the lending community may require increased
amounts of equity to be invested in a project by borrowers in connection with
both new loans and the extension of existing loans. If the Company is not
successful in obtaining sufficient capital to fund its planned capital and other
expenditures, new projects planned or begun may be significantly delayed or
abandoned. Any such delay or abandonment could result in a reduction in sales
and may adversely affect the Company's future results of operations.
The Credit Facility contains numerous operating and financial maintenance
covenants. There can be no assurance that the Company will be able to maintain
compliance with the financial and other covenants contained in the Credit
Facility. Failure to comply with such covenants (following expiration of any
applicable cure periods) would result in a default under the Credit Facility and
could result in the acceleration of the indebtedness thereunder, under the Notes
and under the 1994 Notes.
NATURAL DISASTERS; AVAILABILITY OF HOMEOWNERS' INSURANCE
The climates and geology of many of the states in which the Company
operates, including California, Florida, Georgia, South Carolina, North
Carolina, Tennessee and Texas, present increased risks of natural disasters. To
the extent that hurricanes, severe storms, earthquakes, droughts, floods,
wildfires or other natural disasters or similar events occur, the homebuilding
industry in general, and the Company's business in particular, in such states
may be adversely affected.
15
Certain insurance companies doing business in Florida have restricted,
curtailed or suspended the issuance of homeowners' insurance policies on single
family and multi-family homes. This has had the effect of increasing the cost of
insurance to prospective purchasers of homes in Florida. Mortgage financing for
a new home is conditioned, among other things, on the availability of adequate
homeowners' insurance. There can be no assurance that homeowners' insurance will
be affordable to prospective purchasers of the Company's homes offered for sale
in Florida. Long-term restrictions on, or unavailability of, homeowners'
insurance in Florida could have an adverse effect on the homebuilding industry
in that market in general, and on the Company's business within that market in
particular.
OPTION CONTRACTS WITH SPECIFIC PERFORMANCE OBLIGATIONS
The Company acquires certain lots by means of option contracts, some of
which have specific performance obligations. Under such contracts, the Company
generally is required to purchase specific numbers of lots on fixed dates
pursuant to a contractually established schedule. If the Company fails to
purchase the required number of lots on the date fixed for purchase pursuant to
such contracts, the party granting the option to the Company generally has the
right either to terminate the option granted pursuant to the option contract in
its entirety or to require the Company to purchase such lots, notwithstanding a
general decline in real estate values.
GOVERNMENT REGULATIONS; ENVIRONMENTAL CONTROLS
The Company is subject to local, state and federal statutes and rules
regulating certain developmental matters, as well as building and site design.
In addition, certain fees, some of which may be substantial, may be imposed to
defray the cost of providing certain governmental services and improvements. The
Company may be subject to additional costs and delays or may be precluded
entirely from building its projects because of "no growth" or "slow growth"
initiatives, building permit allocation ordinances, building moratoriums or
similar governmental regulations that could be imposed in the future due to
health, safety, welfare or environmental concerns. The Company must also obtain
certain licenses, permits and approvals from certain government agencies for
certain of its activities, the granting or receipt of which are beyond the
Company's control.
The Company and its competitors are subject to a variety of local, state and
federal statutes, ordinances, rules and regulations concerning the protection of
health and the environment. The particular environmental laws which apply to any
given community vary greatly according to the community site, the site's
environmental conditions and the present and former use of the site.
Environmental laws may result in delays, may cause the Company to incur
substantial compliance and other costs and may prohibit or severely restrict
development in certain environmentally sensitive regions or areas. In addition,
environmental regulations can have an adverse impact on the availability and
price of certain raw materials such as lumber. The Company's projects in
California are especially susceptible to restrictive government regulations and
environmental laws.
HOLDING COMPANY STRUCTURE; GUARANTEES; FRAUDULENT TRANSFER STATUTES
The Company is a holding company, the assets of which consist principally of
the stock and membership interests of its subsidiaries through which the Company
conducts its operations. As a holding company, the Company is and will be
dependent upon payments from its subsidiaries, including dividends and
distributions, for the generation of funds necessary to service its obligations,
including the payment of principal of and interest on the Notes. In addition,
the ability of the Company's subsidiaries to make such payments to the Company
is and may be subject to restrictions under applicable state laws.
Under applicable federal or state fraudulent transfer conveyance statutes,
the Subsidiary Guarantees, under certain circumstances, may be subordinated to
existing or future indebtedness of the Company or the Subsidiary Guarantors, and
the Subsidiary Guarantees could be found to be void and/or unenforceable
16
in accordance with their terms. Under such statutes, if a court were to find
that, at the time the Subsidiary Guarantees were issued, a Subsidiary Guarantor
received less than a reasonably equivalent value or fair consideration in
exchange for such obligation and was insolvent, or became insolvent by the
issuance of the Subsidiary Guarantee, was engaged in a business or transaction
or about to engage in a business or transaction for which its remaining assets
constituted unreasonably small capital, intended to incur, or believed that it
would incur, debts beyond its ability to pay such debts as they matured, or,
irrespective of any consideration received or its solvency at the time, actually
intended to hinder, delay or defraud its present or future creditors, such court
could void such Subsidiary Guarantee, or subordinate such Subsidiary Guarantee
to all other indebtedness of such Subsidiary Guarantor. In such event, there can
be no assurance that any repayment of the Notes, either by the Company or the
Subsidiary Guarantors, could ever be recovered by holders of the Notes.
For the purposes of the foregoing, the measure of insolvency varies
depending upon the law of the jurisdiction which is being applied. Based upon
financial and other information currently available to it, management of the
Company believes that the Notes and the Subsidiary Guarantees are being incurred
for proper purposes and in good faith and that at the time the Notes and the
Subsidiary Guarantees are issued, the Company and each Subsidiary Guarantor, as
the case may be, will be (i) neither insolvent nor rendered insolvent thereby,
(ii) in possession of sufficient capital to run its business effectively and
(iii) incurring debts within its ability to pay as the same mature or become
due. In reaching these conclusions, the Company has relied upon various
valuations and estimates of future cash flow that necessarily involve a number
of assumptions and choices of methodology. No assurance can be given, however,
that the assumptions and methodologies chosen by the Company would be adopted by
a court or that a court would concur with the Company's conclusions as to its
solvency.
CHANGE OF CONTROL
Upon a Change of Control, the holders of the Notes have the right to require
the Company to offer to purchase all of the outstanding Notes at 101% of the
principal amount thereof, plus accrued and unpaid interest to the date of
purchase. There can be no assurance that the Company will have sufficient funds
available or will be permitted by its other debt agreements to purchase the
Notes upon the occurrence of a Change of Control. In addition, a Change of
Control may require the Company to offer to purchase other outstanding
indebtedness, including the 1994 Notes, and may cause a default under the Credit
Facility. The inability to purchase all of the tendered Notes would constitute
an Event of Default (as defined herein) under the Indenture. See "Description of
Notes--Certain Covenants--Change of Control."
LACK OF PUBLIC MARKET FOR THE NOTES
The Exchange Notes will be new securities for which there is currently no
public market. The Company does not intend to list the Exchange Notes on any
national securities exchange or quotation system. The Initial Purchasers have
advised the Company that they currently intend to make a market in the Exchange
Notes but they are not obligated to do so and, if commenced, may discontinue
such market making at any time. Accordingly, there can be no assurance as to the
development of any market or liquidity of any market that may develop for the
Exchange Notes. To the extent that Old Notes are tendered and accepted in the
Exchange Offer, the aggregate principal amount of Old Notes outstanding will
decrease, with a resulting decrease in the liquidity of the market therefor.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Old Notes who do not exchange their Old Notes for Exchange Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of the Old Notes set forth in the legend thereon as a consequence of
the issuance of the Old Notes pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act. In general,
Old Notes may not be offered or sold, unless registered under the Securities
Act, except pursuant to an exemption from,
17
or in a transaction not subject to, the Securities Act and applicable state
securities laws. The Company currently does not anticipate that it will register
the Old Notes under the Securities Act.
USE OF PROCEEDS
The Company will not receive any proceeds from the Exchange Offer. In
consideration of issuing the Exchange Notes as contemplated in this Prospectus,
the Company will receive in exchange Old Notes of like principal amount, the
terms of which are identical in all material respects to the Exchange Notes. The
Old Notes surrendered in exchange for Exchange Notes will be retired and
canceled and cannot be reissued. Accordingly, issuance of the Exchange Notes
will not result in any increase in the indebtedness of the Company. The Company
has agreed to bear the expenses of the Exchange Offer pursuant to the
Registration Rights Agreement. No underwriter is being used in connection with
the Exchange Offer.
18
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
December 31, 1997 and as adjusted to give effect to the sale by the Company of
the Notes and the use of net proceeds therefrom. This table should be read in
conjunction with the Consolidated Financial Statements, including the notes
thereto, incorporated by reference into this Prospectus.
AS OF DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
-----------------------
ACTUAL AS ADJUSTED
---------- -----------
Debt:
Credit Facility........................................................................ $ 120,000 $ 23,567
9% Senior Notes due 2004............................................................... 115,000 115,000
8 7/8% Senior Notes due 2008, net of discount of $817.................................. -- 99,183
---------- -----------
Total debt........................................................................... 235,000 237,750
---------- -----------
Stockholders' equity:
Preferred stock, $.01 par value; 5,000,000 shares authorized; 2,000,000 shares issued
and outstanding ($50,000 aggregate liquidation preference)........................... 20 20
Common stock, $.01 par value; 30,000,000 shares authorized; 9,355,957 shares issued and
6,064,180 shares outstanding(1)...................................................... 93 93
Additional paid-in capital............................................................... 187,798 187,798
Retained earnings........................................................................ 45,620 45,620
Treasury stock (3,291,777 shares)........................................................ (51,983) (51,983)
Unearned restricted stock................................................................ (1,362) (1,362)
---------- -----------
Total stockholders' equity........................................................... 180,186 180,186
---------- -----------
Total capitalization..................................................................... $ 415,186 $ 417,936
---------- -----------
---------- -----------
- ------------------------
(1) Excludes an aggregate of 560,500 shares of Common Stock reserved for
outstanding options under the Company's 1994 Stock Incentive Plan and the
Company's Non-Employee Director Stock Option Plan.
19
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The selected consolidated financial information is derived from the audited
consolidated financial statements of the Company as of and for the fiscal years
ended September 30, 1993 through 1997. The selected historical consolidated
financial information as of and for the three month periods ended December 31,
1996 and 1997 is derived from the unaudited financial statements incorporated by
reference herein. Such unaudited information, in the opinion of the Company, is
presented on a basis consistent with the audited Consolidated Financial
Statements incorporated by reference in this Prospectus and includes all
adjustments (consisting only of normal, recurring adjustments) necessary for a
fair presentation of the results for such periods. Interim information for the
three months ended December 31, 1996 and 1997 may not be indicative of
operations for the full fiscal year.
The following selected consolidated financial information should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Consolidated Financial Statements, related
notes and other financial information included and incorporated by reference
herein.
THREE MONTHS
ENDED
FISCAL YEAR ENDED SEPTEMBER 30, DECEMBER 31,
------------------------------------------ --------------------
1993(1) 1994 1995 1996 1997 1996 1997
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA) (UNAUDITED)
INCOME STATEMENT DATA:
Total revenue.......................... $ 275,054 $ 536,526 $ 647,828 $ 866,627 $ 851,101 $ 161,083 $ 155,626
Costs and expenses:
Home construction and land sales..... 222,461 450,570 552,204 732,395 720,992 135,371 130,475
Amortization of previously
capitalized interest............... 3,049 9,768 13,268 15,134 14,857 2,740 3,047
Selling, general and
administrative..................... 29,585 48,811 63,727 88,976 91,270 18,773 19,296
Writedown of inventory............... -- -- -- -- 6,326 -- --
--------- --------- --------- --------- --------- --------- ---------
Operating income....................... 19,959 27,377 18,629 30,122 17,656 4,199 2,808
Other income (expense)................. (295) 24 291 71 538 190 150
--------- --------- --------- --------- --------- --------- ---------
Income before income taxes............. 19,664 27,401 18,920 30,193 18,194 4,389 2,958
Provision for income taxes............. 7,394 10,933 7,568 11,927 7,005 1,712 1,139
--------- --------- --------- --------- --------- --------- ---------
Income before cumulative effect of
change in accounting for income
taxes................................ 12,270 16,468 11,352 18,266 11,189 2,677 1,819
Cumulative effect of change in
accounting for income taxes.......... 3,776 -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Net income............................. $ 16,046 $ 16,468 $ 11,352 $ 18,266 $ 11,189 $ 2,677 $ 1,819
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Earnings per share(2):
Basic................................ n/m n/m 1.26 2.24 1.18 .27 .14
Diluted n/m n/m 1.23 2.01 1.15 .26 .14
Ratio of earnings to fixed
charges(3)........................... 3.38x 3.22x 2.13x 3.01x 1.99x 2.12x 1.28x
20
1993 1994 1995 1996 1997 1996 1997
--------- --------- --------- --------- --------- --------- ---------
SEPTEMBER 30, DECEMBER 31,
------------------------------- --------------------
(DOLLARS IN THOUSANDS) (UNAUDITED)
BALANCE SHEET DATA:
Cash................................... $ 819 $ 35,980 $ 40,407 $ 12,942 $ 1,267 $ 3,178 $ --
Inventory.............................. 225,863 253,356 285,268 320,969 361,945 347,627 423,945
Total assets........................... 245,349 314,941 345,240 356,643 399,595 372,879 462,762
Borrowings under Credit Facility....... -- -- -- -- 30,000 37,000 120,000
9% Senior Notes due 2004............... -- 115,000 115,000 115,000 115,000 115,000 115,000
Total debt............................. 119,925 115,000 115,000 115,000 145,000 152,000 235,000
Stockholders' equity................... 95,595 150,406 164,544 178,701 179,286 179,659 180,186
- ------------------------
(1) Includes eight months of operating results for Watt Housing, which was
acquired in February, 1993.
(2) Earnings per share have been restated in accordance with Statement of
Financial Accounting Standards No. 128, "Earnings per Share".
(3) Computed by dividing earnings by fixed charges. "Earnings" consist of income
from operations before income taxes, plus amortization of previously
capitalized interest included in costs of sales and fixed charges, exclusive
of capitalized interest costs. "Fixed Charges" consist of interest costs
incurred, including capitalized interest costs plus amortization of loan
costs and that portion of operating lease rental expense (33%) deemed to be
representative of interest.
n/m -- Earnings per share figures for periods prior to and including the
Company's initial public offering are not meaningful.
21
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER
GENERAL
In connection with the sale of Old Notes to the Initial Purchasers pursuant
to the Purchase Agreement, dated March 20, 1998, among the Company and SBC
Warburg Dillon Read, Inc., Donaldson, Lufkin & Jenrette Securities Corporation
and Salomon Smith Barney (collectively, the "Initial Purchasers"), the holders
of the Old Notes became entitled to the benefits of the Registration Rights
Agreement.
Under the Registration Rights Agreement, the Company became obligated to (a)
file a registration statement in connection with a registered exchange offer
within 45 days after March 20, 1998, the date the Old Notes were issued (the
"Issue Date"), and (b) cause the registration statement relating to such
registered exchange offer to become effective within 120 days after the Issue
Date. The Exchange Offer being made hereby, if consummated within the required
time periods, will satisfy the Company's obligations under the Registration
Rights Agreement. This Prospectus, together with the Letter of Transmittal, is
being sent to all such beneficial holders known to the Company.
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal, the Company will accept all Old
Notes properly tendered and not withdrawn prior to 5:00 p.m., New York City
time, on the Expiration Date. The Company will issue $1,000 principal amount of
Exchange Notes in exchange for each $1,000 principal amount of outstanding Old
Notes accepted in the Exchange Offer. Holders may tender some or all of their
Old Notes pursuant to the Exchange Offer.
Based on an interpretation by the staff of the Commission set forth in the
Morgan Stanley Letter, the Exxon Capital Letter and similar letters, the Company
believes that Exchange Notes issued pursuant to the Exchange Offer in exchange
for Old Notes may be offered for resale, resold and otherwise transferred by any
person who received such Exchange Notes, whether or not such person is the
holder (other than Restricted Holders) without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that such
Exchange Notes are acquired in the ordinary course of such holder's or other
person's business, neither such holder nor such other person is engaged in or
intends to engage in any distribution of the Exchange Notes and such holders or
other persons have no arrangement or understanding with any person to
participate in the distribution of such Exchange Notes.
If any person were to be participating in the Exchange Offer for the
purposes of participating in a distribution of the Exchange Notes in a manner
not permitted by the Commission's interpretation, such person (a) could not rely
upon the Morgan Stanley Letter, the Exxon Capital Letter or similar letters and
(b) must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction.
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Old Notes, where such Old Notes were acquired by such broker-dealer
as a result of market-making or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Notes. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Notes received in exchange
for Old Notes where such Old Notes were acquired by such broker-dealer as result
of market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after consummation of the Exchange Offer, it will
make this Prospectus, as it may be amended or supplemented from time to time,
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution."
22
The Company will not receive any proceeds from the Exchange Offer. See "Use
of Proceeds." The Company has agreed to bear the expenses of the Exchange Offer
pursuant to the Registration Rights Agreement. No underwriter is being used in
connection with the Exchange Offer.
The Company shall be deemed to have accepted validly tendered Old Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
of Old Notes for the purposes of receiving the Exchange Notes from the Company
and delivering Exchange Notes to such holders.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender or the occurrence of certain conditions set forth herein under
"-Conditions" without waiver by the Company, certificates for any such
unaccepted Old Notes will be returned, without expense, to the tendering holder
thereof as promptly as practicable after the Expiration Date.
Holders of Old Notes who tender in the Exchange Offer will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of Old Notes,
pursuant to the Exchange Offer. The Company will pay all charges and expenses,
other than certain applicable taxes in connection with the Exchange Offer. See
"--Fees and Expenses."
In the event the Exchange Offer is consummated, the Company will not be
required to register the Old Notes. In such event, holders of Old Notes seeking
liquidity in their investment would have to rely on exemptions to registration
requirements under the securities laws, including the Securities Act. See "Risk
Factors--Consequences of Failure to Exchange."
EXPIRATION DATE; EXTENSIONS; AMENDMENT
The term "Expiration Date" shall mean the expiration date set forth on the
cover page of this Prospectus, unless the Company, in its sole discretion,
extends the Exchange Offer, in which case the term "Expiration Date" shall mean
the latest date to which the Exchange Offer is extended.
In order to extend the Expiration Date, the Company will notify the Exchange
Agent of any extension by oral or written notice and will issue a public
announcement thereof, each prior to 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Such announcement
may state that the Company is extending the Exchange Offer for a specified
period of time.
The Company reserves the right (a) to delay accepting any Old Notes, to
extend the Exchange Offer or to terminate the Exchange Offer and not accept Old
Notes not previously accepted if any of the conditions set forth herein under
"--Conditions" shall have occurred and shall not have been waived by the Company
(if permitted to be waived by the Company), by giving oral or written notice of
such delay, extension or termination to the Exchange Agent, or (b) to amend the
terms of the Exchange Offer in any manner deemed by it to be advantageous to the
holders of the Old Notes. Any such delay in acceptance, extension, termination
or amendment will be followed as promptly as practicable by oral or written
notice thereof. If the Exchange Offer is amended in a manner determined by the
Company to constitute a material change, the Company will promptly disclose such
amendment in a manner reasonably calculated to inform the holders of the Old
Notes of such amendment and the Company may extend the Exchange Offer, depending
upon the significance of the amendment and the manner of disclosure to holders
of the Old Notes, if the Exchange Offer would otherwise expire during such
extension period.
Without limiting the manner in which the Company may choose to make public
announcement of any extension, amendment or termination of the Exchange Offer,
the Company shall have no obligation to publish, advertise, or otherwise
communicate any such public announcement, other than by making a timely release
to an appropriate news agency.
23
INTEREST ON THE EXCHANGE NOTES
The Exchange Notes will bear interest from March 20, 1998 payable
semiannually on April 1 and October 1 of each year, commencing October 1, 1998,
at the rate of 8 7/8% per annum. Holders of Old Notes whose Old Notes are
accepted for exchange will be deemed to have waived the right to receive any
payment in respect of interest on the Old Notes accrued up until the date of the
issuance of the Exchange Notes.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by instruction 2 of the Letter of Transmittal, and mail
or otherwise deliver such Letter of Transmittal or such facsimile, together with
the Old Notes and any other required documents. To be validly tendered, such
documents must reach the Exchange Agent on or before 5:00 p.m., New York City
time, on the Expiration Date.
The tender by a holder of Old Notes will constitute an agreement between
such holder and the Company in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal.
Delivery of all documents must be made to the Exchange Agent at its address
set forth below. Holders may also request their respective brokers, dealers,
commercial banks, trust companies or nominees to effect such tender for such
holders.
The method of delivery of Old Notes and the Letter of Transmittal and all
other required documents to the Exchange Agent is at the election and risk of
the holders. Instead of delivery by mail, it is recommended that holders use an
overnight or hand delivery service. In all cases, sufficient time should be
allowed to assure timely delivery to the Exchange Agent on or before 5:00 p.m.
New York City time, on the Expiration Date. No Letter of Transmittal or Old
Notes should be sent to the Company.
Only a holder of Old Notes may tender such Old Notes in the Exchange Offer.
The term "holder" with respect to the Exchange Offer means any person in whose
name Old Notes are registered on the books of the Company or any other person
who has obtained a properly completed bond power from the registered holder.
Any beneficial holder whose Old Notes are registered in the name of its
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on its behalf. If such beneficial holder wishes to
tender on its own behalf, such registered holder must, prior to completing and
executing the Letter of Transmittal and delivering its Old Notes, either make
appropriate arrangements to register ownership of the Old Notes in such holder's
name or obtain a properly completed bond power from the registered holder. The
transfer of record ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States (an "Eligible Institution") unless the Old Notes tendered pursuant
thereto are tendered (a) by a registered holder who has not completed the box
entitled "Special Issuance Instructions" or "Special Delivery Instructions" on
the Letter of Transmittal or (b) for the account of an Eligible Institution. In
the event that signatures on a Letter of Transmittal or a notice of withdrawal,
as the case may be, are required to be guaranteed, such guarantee must be by an
Eligible Institution.
If the Letter of Transmittal is signed by a person other than the registered
holder of any Old Notes listed therein, such Old Notes must be endorsed or
accompanied by appropriate bond powers and a proxy
24
which authorizes such person to tender the Old Notes on behalf of the registered
holder, in each case signed as the name of the registered holder or holders
appears on the Old Notes.
If the Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by the Company,
evidence satisfactory to the Company of their authority so to act must be
submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), and withdrawal of the tendered Old Notes will be determined by the
Company in its sole discretion, which determination will be final and binding.
The Company reserves the absolute right to reject any and all Old Notes not
properly tendered or any Old Notes the Company's acceptance of which would, in
the opinion of counsel for the Company, be unlawful. The Company also reserves
the right to waive any irregularities or conditions of tender as to particular
Old Notes. The Company's interpretation of the terms and conditions of the
Exchange Offer (including the instructions in the Letter of Transmittal) will be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Old Notes must be cured within such time as the
Company shall determine. None of the Company, the Exchange Agent or any other
person shall be under any duty to give notification of defects or irregularities
with respect to tenders of Old Notes, nor shall any of them incur any liability
for failure to give such notification. Tenders of Old Notes will not be deemed
to have been made until such irregularities have been cured or waived. Any Old
Notes received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned without cost to such holder by the Exchange Agent to the tendering
holders of Old Notes, unless otherwise provided in the Letter of Transmittal, as
soon as practicable following the Expiration Date.
In addition, the Company reserves the right in its sole discretion to (a)
purchase or make offers for any Old Notes that remain outstanding subsequent to
the Expiration Date or, as set forth under "-- Conditions," to terminate the
Exchange Offer in accordance with the terms of the Registration Rights Agreement
and (b) to the extent permitted by applicable law, purchase Old Notes in the
open market, in privately negotiated transactions or otherwise. The terms of any
such purchases or offers will differ from the terms of the Exchange Offer.
By tendering, each holder will represent to the Company that, among other
things, (a) the Exchange Notes acquired pursuant to the Exchange Offer are being
obtained in the ordinary course of business of such holder or other person, (b)
neither such holder nor such other person is engaged in or intends to engage in
a distribution of the Exchange Notes (c) neither such holder or other person has
any arrangement or understanding with any person to participate in the
distribution of such Exchange Notes, and (d) such holder or other person is not
an "affiliate," as defined under Rule 405 of the Securities Act, of the Company
or, if such holder or other person is such an affiliate, will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable.
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Old Notes, where such Old Notes were acquired by such broker-dealer
as a result of market-making or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Notes. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Notes received in exchange
for Old Notes where such Old Notes were acquired by such broker-dealer as result
of market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after consummation of the Exchange Offer, it will
make this Prospectus, as it may be amended or supplemented from time to time,
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution."
25
The Old Notes were issued on March 20, 1998 and there is no public market
for them at present. To the extent Old Notes are tendered and accepted in the
Exchange Offer, the principal amount of outstanding Old Notes will decrease with
a resulting decrease in the liquidity in the market therefor. Following the
consummation of the Exchange Offer, holders of Old Notes will continue to be
subject to certain restrictions on transfer. Accordingly, the liquidity of the
market for the Old Notes could be adversely affected.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (a) whose Old Notes are not
immediately available or (b) who cannot deliver their Old Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent prior to the
Expiration Date, may effect a tender if: (i) the tender is make through an
Eligible Institution; (ii) prior to the Expiration Date, the Exchange Agent
receives from such Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder of the Old Notes, the
certificate number or numbers of such Old Notes and the principal amount of Old
Notes tendered, stating that the tender is being made thereby, and guaranteeing
that, within three business days after the Expiration Date, the Letter of
Transmittal (or facsimile thereof) together with the certificate(s) representing
the Old Notes to be tendered in proper form for transfer and any other documents
required by the Letter of Transmittal will be deposited by the Eligible
Institution with the Exchange Agent; and (iii) such properly completed and
executed Letter of Transmittal (or facsimile thereof) together with the
certificate(s) representing all tendered Old Notes in proper form for transfer
and all other documents required by the Letter of Transmittal are received by
the Exchange Agent within three business days after the Expiration Date.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date,
unless previously accepted for exchange.
To withdraw a tender of Old Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the Expiration Date. Any such notice of withdrawal must (a) specify the name of
the person having deposited the Old Notes to be withdrawn (the "Depositor"), (b)
identify the Old Notes to be withdrawn (including the certificate number or
numbers and principal amount of such Old Notes), (c) be signed by the Depositor
in the same manner as the original signature on the Letter of Transmittal by
which such Old Notes were tendered (including any required signature guarantees)
or be accompanied by documents of transfer sufficient to have the Trustee with
respect to the Old Notes register the transfer of such Old Notes into the name
of the Depositor withdrawing the tender and (d) specify the name in which any
such Old Notes are to be registered, if different from that of the Depositor.
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company, whose
determination shall be final and binding on all parties. Any Old Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer and no Exchange Notes will be issued with respect thereto unless
the Old Notes so withdrawn are validly retendered. Any Old Notes which have been
tendered but which are not accepted for exchange will be returned to the holder
thereof without cost to such holder as soon as practicable after withdrawal,
rejection of tender or termination of the Exchange Offer. Properly withdrawn Old
Notes may be retendered by following one of the procedures described above under
"--Procedures for Tendering" at any time prior to the Expiration Date.
26
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company will not
be required to accept for exchange, or exchange, any Exchange Notes for any Old
Notes, and may terminate or amend the Exchange Offer before the acceptance of
any Old Notes for exchange, if the Exchange Offer violates any applicable law or
interpretation by the staff of the Commission.
If the Company determines in its sole discretion that the foregoing
condition exists, the Company may (i) refuse to accept any Old Notes and return
all tendered Old Notes to the tendering holders, (ii) extend the Exchange Offer
and retain all Old Notes tendered prior to the expiration of the Exchange Offer,
subject, however, to the rights of holders who tendered such Old Notes to
withdraw their tendered Old Notes, or (iii) waive such condition, if
permissible, with respect to the Exchange Offer and accept all properly tendered
Old Notes which have not been withdrawn. If such waiver constitutes a material
change to the Exchange Offer, the Company will promptly disclose such waiver by
means of a prospectus supplement that will be distributed to the holders, and
the Company will extend the Exchange Offer as required by applicable law.
Pursuant to the Registration Rights Agreement, if an Exchange Offer shall
not be consummated prior to the Exchange Offer Termination Date, the Company
will be obligated to cause to be filed with the Commission a shelf registration
statement with respect to the Old Notes (the "Shelf Registration Statement") as
promptly as practicable after the Exchange Offer Termination Date and thereafter
use its best efforts to have the Shelf Registration Statement declared
effective.
"Exchange Offer Termination Date" means the date on which the earliest of
any of the following events occurs: (a) applicable interpretations of the staff
of the Commission do not permit the Company to effect the Exchange Offer, (b)
any holder of Notes notifies the Company that either (i) such holder is not
eligible to participate in the Exchange Offer or (ii) such holder participates
in the Exchange Offer and does not receive freely transferable Exchange Notes in
exchange for tendered Old Notes or (c) the Exchange Offer is not consummated
within 120 days after the Issue Date.
If any of the conditions described above exist, the Company will refuse to
accept any Old Notes and will return all tendered Old Notes to exchanging
holders of the Old Notes.
EXCHANGE AGENT
U.S. Bank Trust National Association has been appointed as Exchange Agent
for the Exchange Offer. Questions and requests for assistance and requests for
additional copies of this Prospectus or of the Letter of Transmittal and
deliveries of completed Letters of Transmittal with tendered Old Notes should be
directed to the Exchange Agent addressed as follows:
BY REGISTERED, CERTIFIED OR OVERNIGHT BY FIRST CLASS MAIL:
MAIL:
U.S. BANK TRUST NATIONAL ASSOCIATION U.S. BANK TRUST NATIONAL ASSOCIATION
ATTN: SPECIALIZED FINANCE P.O. BOX 64485
180 EAST FIFTH STREET ST. PAUL, MN 55101
ST. PAUL, MN 55101
BY HAND (NEW YORK DEPOSITORY ONLY): BY HAND (ALL OTHERS):
U.S. BANK TRUST NATIONAL ASSOCIATION U.S. BANK TRUST NATIONAL ASSOCIATION
100 Wall Street, 20th Floor Fourth Floor--Bond Drop Window
New York, NY 10005 180 Fifth Street
Attention: Cathy Donohue St. Paul, MN 55101
BY FACSIMILE:
(For Eligible Institutions Only)
(612) 244-1537
TELEPHONE NUMBER:
(800) 934-6802 Bondholder Services
27
The Company will indemnify the Exchange Agent and its agents for any loss,
liability or expense incurred by them, including reasonable costs and expenses
of their defense, except for any such loss, liability or expense caused by
negligence or bad faith.
FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by the Company. The principal solicitation for tenders pursuant to the
Exchange Offer is being made by mail. Additional solicitations may be made by
officers and regular employees of the Company and its affiliates in person, by
telephone or facsimile.
The Company will not make any payments to brokers, dealers, or other persons
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
the Exchange Agent for its reasonable out-of-pocket expenses in connection
therewith. The Company may also pay brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them
in forwarding copies of this Prospectus, Letters of Transmittal and related
documents to the beneficial owners of the Old Notes, and in handling or
forwarding tenders for exchange.
The expenses to be incurred in connection with the Exchange Offer, including
fees and expenses of the Exchange Agent and Trustee and accounting and legal
fees and expenses, will be paid by the Company.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Old Notes pursuant to the Exchange Offer. If, however, certificates
representing Exchange Notes (or Old Notes for principal amounts not tendered or
accepted for exchange) are to be delivered to, or are to be registered or issued
in the name of, any person other than the registered holder of the Old Notes
tendered, or if tendered Old Notes are registered in the name of any person
other than the person signing the Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of Old Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted with the Letter of Transmittal, the amount of such transfer
taxes will be billed directly to such tendering holder.
ACCOUNTING TREATMENT
The Company will not recognize any gain or loss for accounting purposes upon
the consummation of the Exchange Offer. The expense of the Exchange Offer will
be amortized by the Company over the term of the Exchange Notes under GAAP.
28
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company designs, builds and sells single family homes in the Southeast,
Southwest and Central regions of the United States. The Company's Southeast
Region includes Georgia, North Carolina, South Carolina, Tennessee and Florida;
its Southwest Region includes Arizona, California and Nevada and its Central
Region includes Texas. (The Company's other markets include a single project in
New Jersey which was closed out during fiscal 1996.) The Company intends,
subject to market conditions, to expand in its current markets and to consider
entering new markets through expansion from existing markets ("satellite
expansion") or through acquisitions of established regional homebuilders.
The Company's homes are designed to appeal primarily to entry-level and
first time move-up home buyers, and are generally offered for sale in advance of
their construction. The majority of homes are sold pursuant to standard sales
contracts entered into prior to commencement of construction. Once a contract
has been signed, the Company classifies the transaction as a "new order." Such
sales contracts are usually subject to certain contingencies such as the buyer's
ability to qualify for financing. Homes covered by such sales contracts are
considered by the Company as its "backlog." The Company does not recognize
revenue on homes in backlog until the sales are closed and the risk of ownership
has been transferred to the buyer.
The following tables present certain operating and financial data for the
periods discussed:
THREE MONTHS ENDED
YEAR ENDED SEPTEMBER 30, DECEMBER 31,
---------------------------------------------- --------------------------
1995 1996 1997 1996 1997
------ ----------------- ----------------- ------ -----------------
AMOUNT AMOUNT % CHANGE AMOUNT % CHANGE AMOUNT AMOUNT % CHANGE
------ ------ -------- ------ -------- ------ ------ --------
NUMBER OF NEW ORDERS, NET OF CANCELLATIONS (I):
Southeast Region:
Georgia........................................... 310 253 (18.4)% 165 (34.8)% 27 29 7.4%
North Carolina.................................... 661 671 1.5 608 (9.4) 107 125 16.8
South Carolina.................................... 233 303 30.0 393 29.7 81 82 1.2
Tennessee......................................... 537 457 (14.9) 413 (9.6) 81 86 6.2
Florida........................................... 342 364 6.4 390 7.1 73 95 30.1
------ ------ -------- ------ -------- ------ ------ --------
Total Southeast................................... 2,083 2,048 (1.7) 1,969 (3.9) 369 417 13.0
------ ------ -------- ------ -------- ------ ------ --------
------ ------ -------- ------ -------- ------ ------ --------
Southwest Region:
Arizona........................................... 1,363 1,681 23.3 1,264 (24.8) 246 261 6.1
California........................................ 856 1,008 17.8 1,017 0.9 207 210 1.4
Nevada............................................ 441 483 9.5 536 11.0 92 102 10.9
------ ------ -------- ------ -------- ------ ------ --------
Total Southwest................................... 2,660 3,172 19.2 2,817 (11.2) 545 573 5.1
------ ------ -------- ------ -------- ------ ------ --------
------ ------ -------- ------ -------- ------ ------ --------
Central Region:
Texas............................................. 98 401 309.2 765 90.8 120 96 (20.0)
Other Markets..................................... -- -- -- -- -- -- -- --
------ ------ -------- ------ -------- ------ ------ --------
Total............................................. 4,841 5,621 16.1% 5,551 (1.2)% 1,034 1,086 5.0%
------ ------ -------- ------ -------- ------ ------ --------
------ ------ -------- ------ -------- ------ ------ --------
(i) New orders for the years ended September 30, 1995 and 1996 and for the
three months ended December 31, 1997 do not include 19, 256 and 96 homes in
backlog, respectively, from acquired operations at the date of such
acquisitions.
29
THREE MONTHS ENDED DECEMBER
YEAR ENDED SEPTEMBER 30, 31,
---------------------------------------------- ----------------------------
1996 1997
1995 ----------------- ---------------- 1996 1997
-------- % % -------- ------------------
AMOUNT AMOUNT CHANGE AMOUNT CHANGE AMOUNT AMOUNT % CHANGE
-------- -------- ------- -------- ------ -------- -------- --------
NUMBER OF HOMES IN BACKLOG AT END OF PERIOD:
Southeast Region:
Georgia...................................... 107 52 (51.4 )% 43 (17.3 )% 45 37 (17.8)%
North Carolina............................... 218 192 (11.9 ) 172 (10.4 ) 180 194 7.8
South Carolina............................... 80 107 33.8 109 1.9 126 83 (34.1)
Tennessee.................................... 194 125 (35.6 ) 81 (35.2 ) 109 99 (9.2)
Florida...................................... 109 104 (4.6 ) 100 (3.8 ) 111 190 71.2
-------- -------- ------- -------- ------ -------- -------- --------
Total Southeast.............................. 708 580 (18.1 ) 505 (12.9 ) 571 603 5.6
-------- -------- ------- -------- ------ -------- -------- --------
-------- -------- ------- -------- ------ -------- -------- --------
Southwest Region:
Arizona...................................... 456 414 (9.2 ) 262 (36.7 ) 346 317 (8.4)
California................................... 106 96 (9.4 ) 78 (18.8 ) 177 129 (27.1)
Nevada....................................... 160 170 6.3 139 (18.2 ) 102 137 34.3
-------- -------- ------- -------- ------ -------- -------- --------
Total Southwest.............................. 722 680 (5.8 ) 479 (29.6 ) 625 583 (6.7)
-------- -------- ------- -------- ------ -------- -------- --------
-------- -------- ------- -------- ------ -------- -------- --------
Central Region:
Texas........................................ 53 166 213.2 208 25.3 151 150 (0.7)
Other Markets................................ 1 -- n/m -- -- -- -- --
-------- -------- ------- -------- ------ -------- -------- --------
Total........................................ 1,484 1,426 (3.9 )% 1,192 (16.4 )% 1,347 1,336 (0.8)%
-------- -------- ------- -------- ------ -------- -------- --------
-------- -------- ------- -------- ------ -------- -------- --------
SALES VALUE OF HOMES IN BACKLOG AT END OF
PERIOD:
Southeast region............................. $102,511 $ 98,092 (4.3 )% $ 81,720 (16.7 )% $ 92,601 $ 97,635 5.4%
Southwest region............................. 101,346 86,539 (14.6 ) 73,346 (15.2 ) 82,129 89,585 9.1
Central region............................... 8,133 26,006 219.8 35,373 36.0 23,535 25,430 8.1
Other markets................................ 173 -- n/m -- -- -- -- --
-------- -------- ------- -------- ------ -------- -------- --------
Total........................................ $212,163 $210,637 (0.7 )% $190,439 (9.6 )% $198,265 $212,650 7.3%
-------- -------- ------- -------- ------ -------- -------- --------
-------- -------- ------- -------- ------ -------- -------- --------
NUMBER OF CLOSINGS:
Southeast Region:
Georgia...................................... 254 308 21.3% 174 (43.5 )% 34 35 2.9%
North Carolina............................... 597 697 16.8 628 (9.9 ) 119 103 (13.4)
South Carolina............................... 225 276 22.7 391 41.7 62 108 74.2
Tennessee.................................... 471 526 11.7 457 (13.1 ) 97 68 (29.9)
Florida...................................... 306 405 32.4 394 (2.7 ) 66 101 53.0
-------- -------- ------- -------- ------ -------- -------- --------
Total Southeast.............................. 1,853 2,212 19.4 2,044 (7.6 ) 378 415 9.8%
-------- -------- ------- -------- ------ -------- -------- --------
-------- -------- ------- -------- ------ -------- -------- --------
Southwest Region:
Arizona...................................... 1,255 1,852 47.6 1,416 (23.5 ) 314 206 (34.4)
California................................... 838 1,018 21.5 1,035 1.7 185 159 (14.1)
Nevada....................................... 351 473 34.8 567 19.9 101 104 3.0
-------- -------- ------- -------- ------ -------- -------- --------
Total Southwest.............................. 2,444 3,343 36.8 3,018 (9.7 ) 600 469 (21.8)%
-------- -------- ------- -------- ------ -------- -------- --------
-------- -------- ------- -------- ------ -------- -------- --------
Central Region:
Texas........................................ 64 379 492.2 723 90.8 135 154 14.1
Other Markets................................ 2 1 (50.0 ) -- n/m -- -- --
-------- -------- ------- -------- ------ -------- -------- --------
Total........................................ 4,363 5,935 36.0% 5,785 (2.5 )% 1,113 1,038 (6.7)%
-------- -------- ------- -------- ------ -------- -------- --------
-------- -------- ------- -------- ------ -------- -------- --------
REVENUE:
Southeast region............................. $266,228 $332,159 24.8% $333,648 0.4% $ 64,069 $ 66,179 3.3%
Southwest region............................. 370,369 475,662 28.4 404,760 (14.9 ) 76,144 63,443 (16.7)
Central region............................... 10,886 58,621 438.5 112,693 92.2 20,870 26,004 24.6
Other markets................................ 345 185 (46.4 ) -- -- -- -- --
-------- -------- ------- -------- ------ -------- -------- --------
Total........................................ $647,828 $886,627 33.8% $851,101 (1.8 )% $161,083 $155,626 (3.4)%
-------- -------- ------- -------- ------ -------- -------- --------
-------- -------- ------- -------- ------ -------- -------- --------
30
THREE MONTHS ENDED DECEMBER
YEAR ENDED SEPTEMBER 30, 31,
---------------------------------------------- ----------------------------
1996 1997
1995 ----------------- ---------------- 1996 1997
-------- % % -------- ------------------
AMOUNT AMOUNT CHANGE AMOUNT CHANGE AMOUNT AMOUNT % CHANGE
-------- -------- ------- -------- ------ -------- -------- --------
AVERAGE SALES PRICE PER HOME CLOSED:
Southeast region............................. $ 143.7 $ 150.2 4.5% $ 163.2 8.7% $ 169.5 $ 159.5 (5.9)%
Southwest region............................. 151.5 142.3 (6.1 ) 134.1 (5.8 ) 126.9 135.3 6.6
Central region............................... 170.1 154.7 (9.1 ) 155.9 0.7 154.6 168.9 9.2
Other markets................................ 172.5 185.0 7.2 -- n/m -- -- --
-------- -------- ------- -------- ------ -------- -------- --------
Total........................................ $ 148.5 $ 146.0 (1.7 )% $ 147.1 0.8% $ 144.7 $ 149.9 3.6%
NUMBER OF ACTIVE SUBDIVISIONS AT YEAR END:
Southeast region............................. 88 99 12.5% 104 5.1% 86 113 31.4%
Southwest region............................. 51 62 21.6 60 (3.2 ) 45 61 35.6
Central region............................... 10 31 210.0 33 6.5 31 32 3.2
Other markets -- -- -- -- -- -- -- --
-------- -------- ------- -------- ------ -------- -------- --------
Total........................................ 149 192 28.9% 197 2.6% 162 206 27.2%
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
- ------------------------------
n/m = Percentage change not meaningful
SEASONALITY AND QUARTERLY VARIABILITY
The Company has historically experienced significant seasonality and
quarter-to-quarter variability in homebuilding activity levels. The annual
operating cycle generally reflects escalating new orders in the Company's second
and third fiscal quarters. Since closings usually trail home sales by four to
six months, closings typically are lowest in the first quarter of the fiscal
year, and revenues from home closings usually peak in the third and fourth
quarters of the fiscal year. The Company believes that this seasonality reflects
the preference of home buyers to shop for a new home in the spring, as well as
the scheduling of construction to accommodate seasonal weather conditions. This
trend, however, may be altered in periods of extreme fluctuations in economic
conditions, such as interest rates and general confidence. The Company's
operations can also be affected by inflation. All costs and expenses including
land, raw materials, subcontracted labor and interest would increase in an
inflationary period and, as a result, the Company's margins could decrease
unless the increased costs were recovered through higher sales prices. The
following table presents certain unaudited quarterly financial and operating
data for the Company's last eight fiscal quarters. These historical results are
not necessarily indicative of results to be expected for any future period.
31
QUARTER ENDED
-------------------------------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
(DOLLARS IN THOUSANDS) 1996 1996 1996 1996 1997 1997 1997 1997
- ----------------------- --------- -------- ------------- ------------ --------- -------- ------------- ------------
TOTAL REVENUE.......... $196,505 $217,065 $294,828 $161,083 $177,762 $195,608 $316,647 $155,626
NUMBER OF NEW ORDERS,
NET:
Southeast region....... 617 550 445 369 573 555 472 417
Southwest region....... 995 837 646 545 733 789 750 573
Central region......... 94 119 134 120 228 250 167 96
--------- -------- ------------- ------------ --------- -------- ------------- ------------
Total.................. 1,706 1,506 1,225 1,034 1,534 1,594 1,389 1,086
--------- -------- ------------- ------------ --------- -------- ------------- ------------
--------- -------- ------------- ------------ --------- -------- ------------- ------------
NUMBER OF CLOSINGS:
Southeast region....... 483 554 709 378 457 493 716 415
Southwest region....... 836 868 1,044 600 627 651 1,140 469
Central region......... 46 74 202 135 143 171 274 154
--------- -------- ------------- ------------ --------- -------- ------------- ------------
Total.................. 1,365 1,496 1,955 1,113 1,227 1,315 2,130 1,038
--------- -------- ------------- ------------ --------- -------- ------------- ------------
--------- -------- ------------- ------------ --------- -------- ------------- ------------
NEW ORDERS AND BACKLOG
The increase in new orders for the three month period ended December 31,
1997 compared to the same period in 1996 is principally the result of an
increase in the number of active subdivisions. Each of the Company's operating
regions contributed to an increase in the number of active subdivisions, and
both the Southeast and Southwest region experienced an increase in new orders.
The Company's Central region did not recognize an increase in new orders for the
comparable periods as a result of delays in the opening of several subdivisions
in that region. The Company believes that the increased active subdivision
levels will contribute to positive new order growth during the remainder of
fiscal 1998.
The comparison of active subdivision levels for the Company has been
positive for each of the last two fiscal years. The increase in active
subdivisions at September 30, 1997 compared to September 30, 1996 is the result
of the Company acquiring favorable land positions and opening a number of new
subdivisions during the last two quarters of fiscal 1997, replenishing
subdivision levels depleted during the first six months of the fiscal year. In
contrast, while the number of active subdivisions at September 30, 1996 is above
that of September 30, 1995 many of the subdivisions were nearing close-out
status and the number of active subdivisions declined by 30 in the first quarter
of 1997 compared to the last quarter of 1996.
The Company experienced fewer new orders during the year ended September 30,
1997 than the year ended September 30, 1996. The principal reason for this
decrease is a reduction in the number of active subdivisions in early fiscal
1997 in the Company's Arizona operations. Excluding the Company's Arizona
operations, new orders increased by 347 homes in fiscal 1997. The principal
increase was in the Company's Texas operations.
The Company has historically experienced fluctuations in new order activity
in periods of significant mortgage rate changes. Additional factors that impact
the Company's new order trends include the ability to react to changing customer
preferences through product mix and pricing, local economic conditions and
product supply (as measured by the number of active subdivisions). The Company
believes that during the year ended September 30, 1996, effective product mix
and pricing, especially in the affordable first-time home buyer market in
Arizona, contributed to positive order growth in the Company's markets for the
year ended September 30, 1996, compared to the year ended September 30, 1995,
despite the increase in mortgage interest rates that began in January 1996 and
continued for the remainder of the Company's fiscal year.
The number of homes in backlog at December 31, 1997 decreased compared to
December 31, 1996 principally because of a lower level of backlog entering the
period. The dollar value of backlog at
32
December 31, 1997, however, is greater than that at December 31, 1996,
reflecting a change in mix of the Company's markets as well as increases in the
average sales price of homes in backlog in all regions.
Backlog levels correspond directly with the new order and closing trends
experienced by the Company. Despite an accelerating new order trend late in the
Company's 1997 fiscal year, increased closings during the fourth quarter
contributed to lower backlog levels at September 30, 1997 compared to September
30, 1996.
RESULTS OF OPERATIONS
The following table shows certain items in the Company's statements of
income expressed as a percentage of total revenue.
THREE MONTHS
YEAR ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
------------------- ------------
1995 1996 1997 1996 1997
----- ----- ----- ----- -----
Total revenue............................................................................. 100.0% 100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Home construction and land sales........................................................ 85.2 84.5 84.7 84.0 83.8
Amortization of previously capitalized interest......................................... 2.0 1.7 1.7 1.7 2.0
Selling, general and administrative expenses............................................ 9.8 10.3 10.7 11.7 12.4
Writedown of inventory.................................................................. -- -- 0.7 -- --
----- ----- ----- ----- -----
Operating income.......................................................................... 3.0% 3.5% 2.1% 2.6% 1.8%
COMPARISON OF THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1997
REVENUES
The decrease in revenues for the three months ended December 31, 1997
compared to the same period in 1996 is principally the result of reduced
closings in the Company's Southwest region. Lower backlog levels entering the
quarter ended December 31, 1997 was the primary reason for the decrease in the
Southwest. The Company's Southeast and Central regions, however, experienced
increases in both revenues and closings for the comparable periods. The increase
in the Southeast region is attributable to a substantially higher number of
closings in South Carolina and Florida resulting from higher opening backlog
figures for the respective periods and the contribution of the acquired Calton
operations (16 closings and $2.5 million in revenues). The increase in the
Company's Central region is the result of higher opening backlog levels in this
region.
HOME CONSTRUCTION AND LAND SALES
The cost of home construction and land sales as a percentage of revenues
decreased for the three month period ended December 31, 1997 compared to the
same period in 1996. The decrease is largely attributable to expansion of the
Company's profitability initiatives, specifically design centers and mortgage
origination operations. The Company is now operating design centers in seven
states and mortgage origination operations in eight states. This compares to six
and three states with design centers and mortgage origination operations,
respectively, at December 31, 1996. Additionally, substantially improved gross
margins in the Company's California operations contributed to the overall
decrease in the cost of home construction and land sales as a percentage of
revenues for the three month period ended December 31, 1997 compared to the same
period in fiscal 1997.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased as a percentage of
total revenues for the three month period ended December 31, 1997 compared to
the same period in the prior year. This increase can
33
be attributed to higher overhead and marketing costs associated with the
increase in active subdivision levels in most of the Company's markets.
AMORTIZATION OF PREVIOUSLY CAPITALIZED INTEREST
Amortization of previously capitalized interest expense as a percentage of
revenues for the three months ended December 31, 1997 is greater than the
comparable period in 1996 as a result of increased borrowing levels associated
with the Company's increased investment in inventory during the quarter.
INCOME TAXES
The decrease in the Company's effective income tax rate from 39.0% for the
three month period ended December 31, 1996 compared to 38.5% for the same period
at December 31, 1997 is principally the result of a reduction in the overall
effective state income tax rate.
COMPARISON OF THE FISCAL YEARS ENDED 1995, 1996 AND 1997
REVENUES
The decrease in revenues for the year ended September 30, 1997 compared to
the year ended September 30, 1996 is the result of a 3% decrease in the number
of homes closed offset by a 1% increase in average sales price. The principal
reason for the decrease in home closings was a decline in home closings in
Arizona, the Company's largest market. This decrease is partially offset by the
continued expansion of the Company's Texas operations. The slight increase in
the average sales price is the result of the decrease in closings in Arizona
where the average sales price is below the Company average.
The increase in revenues for the year ended September 30, 1996 compared to
the same period in 1995 is the result of a 36% increase in the number of homes
closed partially offset by a 1.7% decrease in average sales price. The increase
in home closings was experienced in all markets and is a result of the strong
order growth early in fiscal 1996 and the expansion of the Texas operations
entered initially via the acquisition of Bramalea Homes Texas ("Bramalea") in
April 1995 and supplemented through the acquisition of Trendmaker Homes--Dallas
in June 1996. The small decrease in average sales price is the result of
shifting product mix in the Southeast region, an emphasis on the affordable
product mix in the Southwest (especially in Arizona), and decreases in Texas as
a result of the Company opening new, lower-priced subdivisions in Dallas.
HOME CONSTRUCTION AND LAND SALES
Cost of home construction and land sales ("COS") as a percentage of revenues
increased for the year ended September 30, 1997 compared to 1996. The principal
reason for the increase relates to issues in the Company's Nevada operations.
For the fiscal year ended September 30, 1997, the COS as a percentage of
revenues was 91.2% for the Nevada operations compared to 84.7% for the total
Company. During fiscal 1997, the Company experienced development issues in two
subdivisions in Nevada, resulting in a writedown to inventory and reduced
margins in other subdivisions in Nevada. The Company has made management changes
in its Nevada operations and has implemented additional controls around projects
involving significant development expenditures. The Company believes the issues
in Nevada have been resolved and anticipates recognizing improving gross margins
as a percentage of revenues for the Nevada operations during fiscal 1998. COS as
a percentage of revenues decreased for the year ended September 30, 1996
compared to 1995. The decrease is largely attributable to decreases in hard
construction costs (material and labor), and an increase in deliveries from
homes started subsequent to sale relative to fiscal 1995. Additionally, the
Company's Arizona and Texas markets, which typically experience higher gross
margins than the Company average, represent a greater percentage of total
closings for the year.
34
WRITEDOWN OF INVENTORY
During the quarter ended March 31, 1997, the Company recorded a pre-tax
charge of approximately $6.3 million to write down two properties located in
Nevada to their estimated fair market value (based on the sales prices of
comparable projects). The two Nevada properties, Craig Ranch in North Las Vegas
and Promontory in Reno, had incurred significant development costs that were not
anticipated at the beginning of the project. As a result, the estimated future
undiscounted cash flows of the projects were less than their respective book
values at that time.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative ("SG&A") expenses increased as a
percentage of revenues in each of the last two fiscal years. The increase in
fiscal 1997 compared to fiscal 1996 is principally the result of increased sales
and marketing expenses relating to the opening of new subdivisions within the
Company's existing markets. The sales and marketing component of total SG&A as a
percentage of revenues increased to 6.5% from 6.1% in fiscal 1996. The general
and administrative component of total SG&A was 4.2% for both fiscal 1997 and
1996. The increase in SG&A as a percentage of revenues in fiscal 1996 compared
to fiscal 1995 can be attributed primarily to certain consulting and start-up
costs relating to various long-term initiatives the Company began in late fiscal
1996.
AMORTIZATION OF PREVIOUSLY CAPITALIZED INTEREST
The decrease in interest amortized to costs and expenses as a percentage of
revenues for the year ended September 30, 1996 compared to the same period in
1995 is the result of a favorable interest rate environment and accelerated
inventory turnover.
INCOME TAXES
The Company's effective income tax rate was 38.5%, 39.5% and 40.0% for 1997,
1996 and 1995, respectively. The decrease in 1997 and 1996 is principally the
result of various tax savings strategies implemented during 1996.
FINANCIAL CONDITION AND LIQUIDITY
The Credit Facility provides for up to $200 million of unsecured borrowings.
At December 31, 1997 the Company had $120 million of outstanding borrowings
under the Credit Facility. The Company fulfills its short-term cash requirements
with cash generated from its operations and unused funds available under the
Credit Facility. Available borrowings under the Credit Facility are limited to
certain percentages of homes under contract, unsold homes, substantially
improved lots and accounts receivable. At December 31, 1997, after giving effect
to the Offering and the application of the net proceeds therefrom, the Company
would have had available additional borrowings of $21.2 million under the Credit
Facility. During the quarter ended December 31, 1997 the Company utilized
borrowings under the Credit Facility of approximately $16.8 million for the
acquisition of the Orlando, Florida operations of Calton.
The Credit Facility includes a financial covenant limiting the dollar value
of Land (as defined) owned by the Company to the amount of its Tangible Net
Worth (as defined). At December 31,1997 the value of Land owned by the Company
exceeded this maximum by approximately $6 million. The Company has received a
waiver from each of the participating banks in the Credit Facility relating to
this covenant through March 31, 1998. The Company was in compliance with this
covenant at February 28, 1998, and expects to be in compliance as of March 31,
1998, through its use of land in the ordinary course of business.
During fiscal 1996, the Company utilized borrowings under its then-existing
credit agreement of $21.4 million for acquisitions. All such borrowings were
repaid as of September 30, 1996.
35
The Company has utilized, and will continue to utilize, land options as a
method of controlling and subsequently acquiring land. At December 31, 1997 the
Company had 9,975 lots under option. At December 31, 1997, the Company had
commitments with respect to option contracts with specific performance
obligations of approximately $46.7 million. The Company expects to exercise all
of its option contracts with specific performance obligations and, subject to
market conditions, substantially all of its options contracts without specific
performance obligations.
In June 1996, the Company's Board of Directors approved a stock repurchase
plan authorizing the repurchase of up to 10% (approximately 660,000 shares) of
the Company's then outstanding stock. Such repurchases, if completed, would be
effected at various prices from time to time in the open market. The timing of
the purchase and the exact number of shares will depend on market conditions. As
of December 31, 1997 the Company had purchased 542,510 shares for an aggregate
purchase price of approximately $7.3 million under this repurchase plan.
The 1994 Notes mature in March 2004 and bear interest at 9% per annum
payable semiannually. The 1994 Notes contain certain restrictive covenants,
including limitations on payment of dividends. At December 31, 1997, under the
most restrictive covenants, approximately $30.4 million was available for
payment of cash dividends and for the acquisition by the Company of its common
stock.
All significant subsidiaries of the Company are guarantors of the 1994
Notes, are jointly and severally liable for the Company's obligations under the
1994 Notes and will be guarantors of the Notes being offered pursuant to this
Prospectus. Separate financial statements and other disclosures concerning each
of the significant subsidiaries are not included in the Company's Consolidated
Financial Statements incorporated by reference in this Prospectus, as the
aggregate assets, liabilities, earnings and equity of the subsidiaries equal
such amounts for the Company on a consolidated basis and separate subsidiary
financial statements are not considered material to investors. The total assets,
revenues and operating profit of the non-guarantor subsidiaries are in the
aggregate immaterial to the Company on a consolidated basis. Neither the Credit
Facility nor the 1994 Notes restrict, nor will the Notes restrict, distributions
to the Company by its subsidiaries.
Management believes that the Company's current borrowing capacity, and
anticipated cash flows from its operations, are sufficient to meet liquidity
needs for the foreseeable future. There can be no assurance, however, that
amounts available in the future from the Company's sources of liquidity will be
sufficient to meet the Company's future capital needs. The amount and types of
indebtedness that the Company may incur may be limited by the terms of the
Notes, the 1994 Notes and the Credit Facility. The Company continually evaluates
expansion opportunities through acquisition of established regional homebuilders
and such opportunities may require the Company to seek additional capital in the
form of equity or debt financing from a variety of potential sources, including
additional bank financing and/or securities offerings.
YEAR 2000 COMPLIANCE
The Company has assessed the vulnerability of its computer systems to the
"Year 2000 issue" and the cost of addressing Year 2000 compliance. In connection
with its systems streamlining efforts, the Company is currently in the process
of implementing new information systems. Such systems will replace the majority
of the information systems previously being used by the Company. The Company has
determined that its new systems are Year 2000 compliant. Presently, the Company
does not believe that systems streamlining efforts or Year 2000 compliance will
result in material investments by the Company, nor does the Company anticipate
the Year 2000 issue will have material adverse effects on the business
operations or financial performance of the Company. The Company further does not
believe that the impact of Year 2000 compliance on any of its subcontractors,
suppliers and vendors will have a material adverse effect upon the Company.
There can be no assurance, however, that the Year 2000 issue will not adversely
affect the Company and its business.
36
RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement No. 128, "Earnings per Share" ("SFAS 128"). SFAS 128 establishes new
standards for computing and presenting earnings per share ("EPS") information.
The Company adopted SFAS 128 during the first quarter of fiscal 1998. In
accordance with SFAS 128, the Company has restated EPS in all prior periods to
comply with the new standard. In June 1997, the FASB issued Statement No. 130,
"Reporting Comprehensive Income" ("SFAS 130"), and Statement No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS
131"). Both SFAS 130 and SFAS 131 become effective for fiscal periods or years
beginning after December 15, 1997 with early adoption permitted. The Company is
evaluating the effects these statements will have on its financial reporting and
disclosures. The statements will have no effect on the Company's results of
operations, financial position, capital resources or liquidity.
37
BUSINESS
OVERVIEW
The Company designs, builds and sells single family homes in the Southeast,
Southwest and Central regions of the United States and, based on home closings,
is one of the ten largest builders of single family detached homes in the
nation. The Company's Southeast region includes Georgia, North Carolina, South
Carolina, Tennessee and Florida, its Southwest region includes Arizona,
California and Nevada and its Central region includes Texas. The Company's homes
are designed to appeal primarily to entry-level and first time move-up home
buyers. For the twelve months ended December 31, 1997, the Company had 5,710
home closings, revenues of approximately $845.6 million and EBITDA of $40.7
million.
The Company's objective is to provide its customers with homes that
incorporate quality and value while seeking to maximize its return on invested
capital. To achieve this objective, the Company has developed a business
strategy which focuses on the following elements:
GEOGRAPHIC DIVERSITY AND GROWTH MARKETS. The Company competes in a
large number of geographically diverse markets and attempts to react quickly
to allocate capital to those markets which it believes provide attractive
growth characteristics and opportunities for superior returns. The majority
of the Company's markets have experienced significant population and
employment growth in recent years. Seven of the nine states in which the
Company operates were ranked among the top ten for population growth for the
years 1995 through 2000 as projected by the U.S. Census Bureau. The Company
strives to maintain a strong competitive position in all of its markets and
believes that it is among the top five single family homebuilders in the
majority of such markets. Within these markets, the Company builds homes in
a variety of projects, typically with fewer than 150 homesites per project.
QUALITY HOMES FOR ENTRY-LEVEL AND FIRST TIME MOVE-UP HOME BUYERS. The
Company seeks to maximize customer satisfaction by offering homes which
incorporate quality materials, distinctive design features, convenient
locations and competitive prices. The Company focuses on entry-level and
first time move-up home buyers because it believes they represent the
largest segment of the homebuilding market. In addition, the Company seeks
to customize its homes to individual homebuyers through the use of design
options and upgrades, many of which are sold through the centralized design
centers recently opened by the Company in the majority of its markets. The
Company believes that through the increased sale of options and upgrades it
can improve both the value of its homes to its customers and its profit
margins. During fiscal 1997, the average sales price of the Company's homes
closed was approximately $147,100.
DECENTRALIZED OPERATIONS WITH EXPERIENCED MANAGEMENT. The Company
believes its in-depth knowledge of its local markets enables it to better
serve its customers. The Company's local managers, who have significant
experience in both the homebuilding industry and the markets they serve, are
responsible for operating decisions regarding design, construction and
marketing. The Company combines these decentralized operations with
centralized corporate-level management which controls decisions regarding
overall strategy, land acquisitions and financial matters. In addition, over
the past year, the Company has embarked on a centrally driven effort to
redesign its sales and construction processes and to streamline its
information systems. The Company's process redesign, information systems and
mortgage origination efforts are part of a centrally driven emphasis on
improving the Company's overall profitability.
CONSERVATIVE LAND POLICIES. The Company seeks to maximize its return on
capital employed by limiting its investment in land and by focusing on
inventory turnover. To implement this strategy and to reduce the risks
associated with investments in land, the Company enters into option
agreements to control land whenever possible. At December 31, 1997,
approximately 50% of the land controlled by
38
the Company was subject to option contracts. In addition, the Company does
not speculate in unentitled land.
During the quarter ended December 31, 1997, the Company received 1,086 new
contracts for homes, an increase of approximately 5% over the quarter ended
December 31, 1996. Backlog at December 31, 1997 was 1,336 homes, with a total
dollar value of approximately $212.7 million, a decrease in number of homes of
approximately 0.8%, but an increase of approximately 7.3% in dollar value, from
backlog at December 31, 1996.
During fiscal year 1996, the Company established Beazer Mortgage. Beazer
Mortgage originates, but does not hold or service, mortgages for homebuyers of
the homebuilding operations of the Company. At December 31, 1997, Beazer
Mortgage had branches operating in eight of the nine states in which the Company
operates. Beazer Mortgage opened a branch in the last state, Tennessee, in
January 1998.
DESCRIPTION OF MARKETS AND PRODUCTS
The Company evaluates a number of factors in determining which geographic
markets to enter or in which to concentrate its homebuilding activities. The
Company attempts to anticipate swings in economic and real estate conditions by
evaluating such statistical information as (i) the historical and projected
growth of the population; (ii) the number of new jobs created or projected to be
created; (iii) the number of housing starts in previous periods; (iv) building
lot availability and price; (v) housing inventory; (vi) level of competition;
and (vii) home sales absorption rates. In addition, the Company seeks to avoid
direct competition in a particular market with respect to product type.
The Company maintains the flexibility to alter its product mix within a
given market depending on market conditions and, in determining its product mix,
considers demographic trends, demand for a particular type of product, margins,
timing and the economic strength of the market. While remaining responsive to
market opportunities within the industry, the Company in recent years has
focused, and intends to continue to focus, its business primarily on entry-level
and first time move-up housing in the form of single family detached homes and
townhouses. Generally, entry-level homes are priced at the lower end of the
market and target first time home buyers, while first time move-up homes
generally are priced in the mid-to-upper price range and target a wide variety
of home buyers as they progress in income and family size. Although certain of
the Company's move-up homes are priced at the upper end of the market and the
Company offers a selection of amenities, the Company generally does not build
"custom homes," and its prices of first time move-up homes generally are well
below the prices of custom homes in most areas. The Company attempts to maximize
efficiency by using standardized design plans whenever possible.
The following table summarizes information regarding the Company's markets
as of and for the year ended September 30, 1997. The number of active projects
by state is as of September 30, 1997, while the number of homes closed by state
covers the entire fiscal year then-ended. As a result of changes during the
39
fiscal year in the number of active projects in certain states, the number of
active projects and the number of homes closed may not be comparable.
AVERAGE
CLOSING ACTIVE NUMBER OF
YEAR PRICE BY PROJECTS HOMES CLOSED
STATE MARKETS ENTERED STATE BY STATE BY STATE
- ----------------------------- ----------------------------------- ----------- ---------- ----------- ---------------
SOUTHEAST REGION:
Florida:(1) Jacksonville....................... 1993 $ 182,600 32 394
Treasure Coast..................... 1995
Fort Meyers/Naples................. 1996
Tampa/St. Petersburg............... 1996
Georgia: Atlanta............................ 1985 164,500 13 174
North Carolina: Charlotte.......................... 1987 155,200 22 628
Raleigh............................ 1992
South Carolina: Charleston......................... 1987 117,000 15 391
Columbia........................... 1993
Myrtle Beach....................... 1996
Tennessee: Nashville.......................... 1987 196,700 22 457
Knoxville.......................... 1995
SOUTHWEST REGION:
Arizona: Phoenix............................ 1993 112,800 30 1,416
California: Los Angeles County................. 1993 151,600 17 1,035
Orange County...................... 1993
Riverside & San Bernardino
Counties......................... 1993
San Diego County................... 1992
Ventura County..................... 1993
Solano County...................... 1993
Nevada: Las Vegas.......................... 1993 155,400 13 567
Reno/Sparks........................ 1996
CENTRAL REGION:
Texas: Dallas............................. 1995 155,900 33 723
Houston............................ 1995
--- -----
Total Company: $ 147,100 197 5,785
--- -----
--- -----
- ------------------------
(1) Through its acquisition of the Orlando operations of Calton, the Company
entered the Orlando, Florida market subsequent to the fiscal year ended
September 30, 1997.
The Company's homebuilding and marketing activities are conducted under the
name of Beazer Homes in each of its markets except in: (i) Ft. Meyers/Naples,
where it does business as GulfCoast Homes; (ii) Jacksonville, where it does
business as Panitz Homes; (iii) Tennessee, where it does business as Phillips
Builders; and (iv) North Carolina and South Carolina, where it does business as
Squires Homes.
GROWTH STRATEGY AND MARKET POSITION
The Company has grown, and intends to continue to grow, its operations
through a combination of internal growth and expansion into new markets through
acquisitions. The Company's overall growth strategy is comprised of three
components: (i) internal growth in markets where the Company believes it can
strengthen its competitive position; (ii) expansion into "satellite" markets
near its current markets, where it can leverage off of its existing operations;
and (iii) expansion into new markets and regions through acquisitions. The
Company believes that a strong competitive position in each of the markets it
40
serves allows it to have better access to land and subcontractor labor in those
markets. The Company strives to be one of the top five builders in each of the
markets in which it operates. Currently, the Company believes that it is among
the top five builders, measured by 1997 housing starts or closings, in Raleigh,
Charlotte, Nashville, Knoxville, Charleston, Columbia, Jacksonville, Phoenix,
Las Vegas and Sacramento. Although the Company is not among the top five
builders in the Southern California market, it is currently experiencing
significant growth and improvements in profitability that are consistent with
recent growth in that region of the state.
LAND ACQUISITION AND DEVELOPMENT
The Company acquires land both through purchase and by means of option
contracts. Substantially all of the land acquired by the Company is purchased
only after necessary entitlements have been obtained so that the Company has
certain rights to begin development or construction as market conditions
dictate. In certain situations, the Company may purchase or control through
options unentitled property where it perceives an opportunity to build on such
property in a manner consistent with the Company's strategy. The term
"entitlements" refers to development agreements, tentative maps or recorded
plats, depending on the jurisdiction within which the land is located.
Entitlements generally give a developer the right to obtain building permits
upon compliance with conditions that are usually within the developer's control.
Although entitlements are ordinarily obtained prior to the Company's purchase of
land, the Company is still required to obtain a variety of other governmental
approvals and permits during the development process.
The Company selects its land for development based upon a variety of
factors, including (i) internal and external demographic and marketing studies;
(ii) suitability for projects comprised of generally less than 150 homesites;
(iii) suitability for development during the time period of one to five years
from the beginning of the development process to the last closing; (iv)
financial review as to the feasibility of the proposed project, including
projected value created, profit margins and returns on capital employed; (v) the
ability to secure governmental approvals and entitlements; (vi) environmental
and legal due diligence; (vii) competition; (viii) proximity to local traffic
corridors and amenities; and (ix) management's judgment as to the real estate
market, economic trends and the Company's experience in a particular market.
The Company generally purchases land or obtains an option to purchase land
which, in either case, requires certain site improvements prior to construction.
Where required, the Company then undertakes or, in the case of land under
option, the grantor of the option then undertakes, the development activities
(through contractual arrangements with local developers) that include site
planning and engineering, as well as constructing road, sewer, water, utilities,
drainage and recreational facilities and other amenities. When available in
certain markets, the Company also buys finished lots that are ready for
construction.
The Company strives to develop a design and marketing concept for each of
its projects, which includes determination of size, style and price range of the
homes, layout of streets, layout of individual lots and overall community
design. The product line offered in a particular project depends upon many
factors, including the housing generally available in the area, the needs of a
particular market and the Company's cost of lots in the project. The Company is,
however, often able to use standardized design plans. The development and
construction of each project are managed by the Company's operating divisions,
each of which is led by a president who, in turn, reports to the Company's
Executive Vice President of Operations and the Company's Chief Executive
Officer. At the development stage, a manager supervises development of buildable
lots. In addition, a field superintendent is located at each project site to
supervise actual construction, and each division has one or more customer
service and marketing representatives assigned to projects operated by that
division. The Company typically controls between a 2.5 and 3.0 year supply of
lots, approximately 50% of which are owned and 50% controlled through options.
During the quarter ended December 31, 1997, the Company increased its supply of
land such that it represented a 3.5 year supply based upon the last twelve
months' closings. This increase in the
41
Company's supply of land, however, is consistent with the Company's positive
view of the current economic conditions and its recent growth in new orders
during the two months ended February 28, 1998. The following table sets forth,
by state, the Company's land inventory as of December 31, 1997.
LAND UNDER
LAND OWNED CONTRACT
-------------------------- -------------
FINISHED UNDEVELOPED FINISHED UNDEVELOPED
LOTS LOTS(1) LOTS LOTS(1) TOTAL
----------- ------------- ----------- ------------- ---------
SOUTHEAST REGION:
Georgia................................... 393 -- 105 58 556
North Carolina............................ 672 125 570 1,216 2,583
South Carolina............................ 411 -- 129 1,064 1,604
Tennessee................................. 1,056 16 817 533 2,422
Florida................................... 877 -- 1,072 147 2,096
SOUTHWEST REGION:
Arizona................................... 1,354 -- 2,756 -- 4,110
California................................ 1,095 582 296 362 2,335
Nevada.................................... 593 682 324 -- 1,599
CENTRAL REGION:
Texas..................................... 1,972 -- 392 134 2,498
----- ----- ----- ----- ---------
Total................................... 8,423 1,405 6,461 3,514 19,803
----- ----- ----- ----- ---------
----- ----- ----- ----- ---------
- ------------------------
(1) Undeveloped lots consist of raw land that is expected to be developed into
the respective number of lots reflected in this table.
The Company acquires certain lots by means of option contracts. Option
contracts generally require the payment of a cash deposit or issuance of a
letter of credit for the right to acquire lots during a specified period of time
at a certain price. Under option contracts without specific performance
obligations, the Company's liability is limited to forfeiture of the
non-refundable deposits, which aggregated approximately $10.7 million at
December 31, 1997. Under option contracts with specific performance obligations,
the Company generally is required to purchase specific numbers of lots on fixed
dates pursuant to a contractually established schedule. Under such option
contracts with specific performance obligations, the party granting the option
is required to maintain and/or develop the property pursuant to certain
standards specified in the contract and to deliver lots which are free of any
liens and are appropriate for residential building pursuant to a specified
schedule. If the Company fails to purchase the required number of lots on the
date fixed for purchase pursuant to such option contracts and the party granting
the option has fulfilled all of its obligations under the contract, the party
granting the option to the Company generally has the right to either terminate
the option granted pursuant to the option contract in its entirety or to require
the Company to purchase the remaining lots. If the party granting the option
fails to meet its obligations under such option contracts, the Company generally
may, at its option, either not make the lot purchase or require the party
granting the option to cure the deficiency. Under such option contracts, if the
Company purchases a lot and subsequently discovers that the lot did not meet all
of the conditions specified by the option contract, the Company generally may
require the party granting the option to repurchase the lot or cure the
deficiency. At December 31, 1997, committed amounts under option contracts with
specific performance obligations aggregated approximately $46.7 million, while
option contracts without specific performance obligations aggregated
approximately $190.1 million. The Company's option contracts have expiration
periods ranging from one to 60 months.
CONSTRUCTION
The Company acts as the general contractor for the construction of its
projects. The Company's project development operations are controlled by its
subsidiaries and divisions, whose employees supervise
42
the construction of each project, coordinate the activities of subcontractors
and suppliers, subject their work to quality and cost controls and assure
compliance with zoning and building codes. The Company specifies that quality,
durable materials be used in the construction of the Company's homes. The
Company's subcontractors follow design plans prepared by architects and
engineers who are retained by the Company and whose designs are geared to the
local market. Subcontractors typically are retained on a project-by-project
basis to complete construction at a fixed price. Agreements with the Company's
subcontractors and materials suppliers are generally entered into after
competitive bidding, and the Company does not have any long-term contractual
commitments with any of its subcontractors or suppliers. In connection with such
competitive bid process, the Company obtains information from prospective
subcontractors and vendors with respect to their financial condition and ability
to perform their agreements with the Company. The Company does not maintain
significant inventories of construction materials except for materials being
utilized for homes under construction. The Company has numerous suppliers of raw
materials and services used in its business, and such materials and services
have been and continue to be readily available. Material prices may fluctuate,
however, due to various factors, including demand or supply shortages which may
be beyond the control of the Company's vendors. The Company from time to time
enters into regional and national supply contracts with certain of its vendors.
For instance, during 1996 the Company entered into a three-year agreement with
General Electric as its exclusive supplier of appliances. The Company believes
that its relationships with its suppliers and subcontractors are good.
Construction time for the Company's homes depends on the availability of
labor, materials and supplies, product type and location. Homes are designed to
promote efficient use of space and materials, and to minimize construction costs
and time. In the majority of the Company's markets, construction of a home
historically has been completed within three to four months following
commencement of construction. At December 31, 1997, the Company had 700 finished
homes, of which 238 were sold and included in backlog at such date.
CORPORATE OPERATIONS
At a centralized level, the Company (i) evaluates and selects geographic
markets; (ii) allocates capital resources to particular markets, including with
respect to land acquisitions; (iii) maintains the Company's relations with its
lenders to regulate the flow of financial resources and develop consistent
relationships with such lenders; (iv) maintains centralized information systems;
and (v) monitors the decentralized operations of the Company's subsidiaries and
divisions. The Company allocates capital resources necessary for new projects
consistent with its overall operating strategy. The Company varies such capital
allocation based on market conditions, results of operations and other factors.
Capital commitments are determined through consultation among selected executive
and operational personnel, who play an important role in ensuring that new
projects are consistent with the Company's strategy. Centralized financial
controls are also maintained through the standardization of accounting and
financial policies and procedures, which are applied uniformly throughout the
Company. Over the past year, the Company has embarked on a centrally driven
effort to redesign its sales and construction processes and to streamline its
information systems. The Company's process redesign, information systems and
mortgage origination efforts are part of an emphasis on improving the Company's
overall profitability.
Structurally, the Company operates through separate divisions, which are
generally located within the areas in which they operate. Each division is
managed by executives with substantial experience in the division's market. In
addition, each division is equipped with the skills to complete the functions of
land acquisition, map processing, land development, construction, marketing,
sales and product service.
WARRANTY PROGRAM
The Company provides a one-year limited warranty of workmanship and
materials with each of its homes, which generally includes home inspection
visits with the customer during the first year following
43
the purchase of a home. The Company subcontracts its homebuilding work to
subcontractors who provide the Company with an indemnity and a certificate of
insurance prior to receiving payments for their work and, therefore, claims
relating to workmanship and materials are generally the primary responsibility
of the Company's subcontractors.
The Company has established a risk retention group, United Home Insurance
Corp. ("UHIC"), to self insure its structural warranty obligations and replace
the Company's warranty program with Home Buyers Warranty Corporation ("HBW").
During fiscal 1997, UHIC was licensed by the State of Vermont as a captive
insurance risk retention group. UHIC did not insure any warranty obligations
during fiscal 1997, however such insurance has been provided by UHIC to Beazer
home buyers starting in calendar 1998. The Company believes this will result in
cost savings to the Company as well as increased control over the warranty
process.
For homes purchased prior to the establishment of UHIC, the Company provided
a 10-year homeowners' warranty through a single national agreement with HBW.
Under both the UHIC and HBW warranties, the first year of such warranties covers
defects in plumbing, electrical, heating, cooling and ventilation systems, and
major structural defects; the second year of such warranty covers major
structural defects and certain defects in plumbing, electrical, heating, cooling
and ventilation systems of the home (exclusive of defects in appliances,
fixtures and equipment); and the final eight years of protection cover only
major structural defects.
An allowance of approximately 0.5% to 1.0% of the sale price of a home is
established to cover warranty expenses, although this allowance is subject to
adjustment in special circumstances. The Company's historical experience is that
such warranty expenses generally fall within the amount established for such
allowance.
For homes closed prior to October 7, 1994, the Company's structural warranty
coverage was with the Home Owners Warranty Corporation ("HOW"). On October 7,
1994, the Commonwealth of Virginia placed HOW under temporary receivership, and
a permanent injunction followed on October 17, 1994. Terms of the injunction
allowed policies that were effective prior to October 7, 1994 to be honored for
their full term, but there can be no assurance that funds set aside will be
sufficient to honor any claims under any such policies. Concurrent with the
above, the Company entered into an agreement with HBW to provide its homebuyers
with equally suitable coverage for homes closed subsequent to October 7, 1994.
The Company anticipates, however, that substantially all claims under such
policies will be at levels below applicable deductibles and, therefore, could be
the subject of a claim under the Company's warranty. The Company does not
currently have any material litigation or claims regarding warranties or latent
defects with respect to the construction of its homes. The Company believes that
claims and litigation will be substantially covered by the Company's warranty
accrual or insurance.
MARKETING AND SALES
The Company makes extensive use of advertising and other promotional
activities, including newspaper advertisements, brochures, direct mail and the
placement of strategically located sign boards in the immediate areas of its
developments.
The Company normally builds, decorates, furnishes and landscapes between one
and five model homes for each project and maintains on-site sales offices. At
December 31, 1997, the Company maintained 309 model homes, of which 248 were
owned and 61 were leased from third parties pursuant to sale and leaseback
agreements. The Company believes that model homes play a particularly important
role in the Company's marketing efforts. Consequently, the Company expends a
significant effort in creating an attractive atmosphere at its model homes.
Interior decorations are undertaken by both in-house and third party local
design specialists, and vary among the Company's models based upon the
lifestyles of targeted home buyers. The purchase of furniture, fixtures and
fittings is coordinated to ensure that manufacturers' bulk discounts are
utilized to the maximum extent. Structural changes in design from the model
homes are
44
not generally permitted, but home buyers may select various optional amenities.
The Company also uses a cross-referral program that encourages Company personnel
to direct customers to other Company subdivisions based on the customers' needs.
The Company generally sells its homes through commissioned employees (who
typically work from the sales offices located at the model homes used in each
division) as well as through independent brokers. Company personnel are
available to assist prospective home buyers by providing them with floor plans,
price information and tours of model homes and in connection with the selection
of options. The Company's selection of interior features is a principal
component of the Company's marketing and sales efforts. The Company has
attempted to increase the sales of such options and interior features by opening
centralized design centers in the majority of its markets during fiscal 1997.
Sales personnel are trained by the Company and attend periodic meetings to be
updated on sales techniques, competitive products in the area, the availability
of financing, construction schedules, marketing and advertising plans, which
management believes result in a sales force with extensive knowledge of the
Company's operating policies and housing products. The Company's policy also
provides that sales personnel be licensed real estate agents where required by
law.
The Company typically also builds a number of homes for which no signed
sales contract exists at the time of commencement of construction. The use of an
inventory of such homes is necessary to satisfy the requirements of relocated
personnel and of independent brokers, who often represent customers who require
a completed home within 60 days. At December 31, 1997, excluding models, the
Company had 1,219 homes at various stages of completion for which the Company
had not received a sales contract.
The Company uses various sales incentives (such as landscaping and certain
interior home options and upgrades) in order to attract home buyers. The use of
incentives depends largely on prevailing economic and competitive market
conditions.
CUSTOMER FINANCING
The Company provides customer financing in certain markets through branch
offices of Beazer Mortgage. Beazer Mortgage provides mortgage originations only,
and does not retain or service the mortgages that it originates. Such mortgages
are generally funded by one of a network of mortgage lenders arranged for the
Company by Homebuilders Financial Network, an independent consultant of the
Company. As of December 31, 1997, Beazer Mortgage had branches operating in
eight of the nine states in which the Company operates. Beazer Mortgage opened a
branch in the last state, Tennessee, in January 1998.
For operations that have not established Beazer Mortgage branches, the
Company seeks to assist its home buyers in obtaining financing from mortgage
lenders offering qualified home buyers a variety of financing options, including
a wide variety of conventional, FHA and VA financing programs. From time to
time, the Company has arranged for lender representatives to be available in
sales offices, has prequalified home buyers and has paid a portion of the
closing costs and discount mortgage points to assist home buyers with financing.
In certain limited circumstances, the Company may attempt to minimize potential
risks relating to the availability of customer financing by purchasing mortgage
financing commitments that lock in the availability of funds and interest rates
at specified levels for a certain period of time. Since substantially all home
buyers utilize long-term mortgage financing to purchase a home, adverse economic
conditions, increases in unemployment and high mortgage interest rates may deter
and eliminate a substantial number of potential home buyers from the Company's
markets in the future.
JOINT VENTURE
On December 9, 1997, the Company and Corporacion GEO, the largest builder of
affordable homes in Mexico, entered into a joint venture arrangement to build
homes in the United States. The joint venture will focus exclusively on the
development, construction and sale of affordable housing (initially expected to
45
be priced between $35,000 and $45,000) in the Southern United States, initially
focusing on Texas. The joint venture is owned 60% by Corporacion GEO and 40% by
Beazer. The Company's capital contributions to the joint venture over the
venture's first three years of operations are not expected to exceed $6.0
million. The Company intends to use the joint venture as its entry into the
affordable segment of the housing market, typically served by the manufactured
housing industry. The Company believes that as a result of immigration and
population growth trends, affordable housing will be one of the fastest growing
segments of the housing market and is currently one that is underserved by
conventional housing companies. The Company further believes that Corporacion
GEO's extensive experience in affordable housing, as well as its building design
and construction techniques, will assist the Company in profitably serving this
segment of the market. The Company expects that the joint venture will deliver
its first homes in its initial project located in El Paso, Texas in late
calendar 1998. The Company does not expect the joint venture to have a
significant effect on operating results in fiscal 1998.
COMPETITION AND MARKET FACTORS
The development and sale of residential properties is highly competitive and
fragmented. The Company competes for residential sales on the basis of a number
of interrelated factors, including location, reputation, amenities, design,
quality and price, with numerous large and small homebuilders, including some
homebuilders with nationwide operations and greater financial resources and/or
lower costs than the Company. The Company also competes for residential sales
with individual resales of existing homes, available rental housing and, to a
lesser extent, resales of condominiums. The Company believes that it compares
favorably to other builders in the markets in which it operates, due primarily
to (i) its experience within its geographic markets and breadth of product line,
which allow it to vary its regional product offerings to reflect changing market
conditions; (ii) its responsiveness to market conditions, enabling it to
capitalize on the opportunities for advantageous land acquisitions in desirable
locations; and (iii) its reputation for quality design, construction and
service.
The housing industry is cyclical and is affected by consumer confidence
levels, prevailing economic conditions generally, and interest rate levels in
particular. A variety of other factors affect the housing industry and demand
for new homes, including the availability of labor and materials and increases
in the costs thereof, changes in costs associated with home ownership such as
increases in property taxes and energy costs, changes in consumer preferences,
demographic trends and the availability of and changes in mortgage financing
programs.
GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS
Substantially all the Company's land is purchased with entitlements, giving
it the right to obtain building permits upon compliance with specified
conditions, which generally are within the Company's control. Upon compliance
with such conditions, the Company must seek building permits. The length of time
necessary to obtain such permits and approvals affects the carrying costs of
unimproved property acquired for the purpose of development and construction. In
addition, the continued effectiveness of permits already granted is subject to
factors such as changes in policies, rules and regulations and their
interpretation and application. Several governmental authorities in California
have imposed impact fees as a means of defraying the cost of providing certain
governmental services to developing areas. To date, the governmental approval
processes discussed above have not had a material adverse effect on the
Company's development activities, and indeed all homebuilders in a given market
face the same fees and restrictions. There can be no assurance, however, that
these and other restrictions will not adversely affect the Company in the
future.
The Company may also be subject to periodic delays or may be precluded
entirely from developing communities due to building moratoriums or
"slow-growth" or "no-growth" initiatives or building permit allocation
ordinances which could be implemented in the future in the states and markets in
which it operates. Substantially all of the Company's land is entitled and,
therefore, the moratoriums generally
46
would only adversely affect the Company if they arose from health, safety and
welfare issues such as insufficient water or sewage facilities. Local and state
governments also have broad discretion regarding the imposition of development
fees for projects in their jurisdiction. These are normally established,
however, when the Company receives recorded final maps and building permits. The
Company is also subject to a variety of local, state and federal statutes,
ordinances, rules and regulations concerning the protection of health and the
environment. These laws may result in delays, cause the Company to incur
substantial compliance and other costs, and prohibit or severely restrict
development in certain environmentally sensitive regions or areas.
BONDS AND OTHER OBLIGATIONS
The Company is frequently required, in connection with the development of
its projects, to obtain letters of credit and performance, maintenance and other
bonds in support of its related obligations with respect to such developments.
The amount of such obligations outstanding at any time varies in accordance with
the Company's pending development activities. In the event any such bonds or
letters of credit are drawn upon, the Company would be obligated to reimburse
the issuer of such bonds or letters of credit. At December 31, 1997, there were
approximately $6.2 million and $58.3 million of outstanding letters of credit
and performance bonds, respectively, for such purposes. The Company does not
believe that any such bonds or letters of credit are likely to be drawn upon.
EMPLOYEES AND SUBCONTRACTORS
At December 31, 1997, the Company employed 1,214 persons, of whom 277 were
sales and marketing personnel, 421 were executive, management and administrative
personnel, 452 were involved in construction, 36 were personnel of Beazer
Mortgage and 28 were employed at the Nashville, Tennessee manufacturing
facility. Although none of the Company's employees is covered by collective
bargaining agreements, certain of the subcontractors engaged by the Company are
represented by labor unions or are subject to collective bargaining
arrangements. The Company believes that its relations with its employees and
subcontractors are good.
PROPERTIES
The Company leases approximately 8,900 square feet of office space in
Atlanta, Georgia to house its corporate headquarters. The Company also leases an
aggregate of approximately 135,000 square feet of office space for is
subsidiaries' operations at various locations. The Company owns approximately
18,500 square feet of manufacturing space and 6,800 square feet of office space
in Nashville, Tennessee.
LITIGATION
The Company is involved in various legal proceedings, all of which have
arisen in the ordinary course of business and some of which are covered by
insurance. In the opinion of the Company's management, none of the claims
relating to such proceedings will have a material adverse effect on the
financial condition, results of operations or cash flows of the Company.
47
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company are as follows:
NAME AGE POSITION
- ----------------------------------------------------- --- -----------------------------------------------------
Brian C. Beazer...................................... 63 Non-Executive Chairman of the Board and Director
Ian J. McCarthy...................................... 44 President, Chief Executive Officer and Director
Michael H. Furlow.................................... 47 Executive Vice President, Operations
David S. Weiss....................................... 37 Executive Vice President, Chief Financial Officer and
Director
John Skelton......................................... 48 Senior Vice President, Operations and Controller
Peter H. Simons...................................... 38 Vice President, Corporate Development
James A. Moore....................................... 57 Vice President, Chairman of the Process Redesign and
Systems Advisory Committee
Cory J. Boydston..................................... 38 Vice President--Administration and Treasurer
Thomas B. Howard, Jr................................. 69 Director
George W. Mefferd.................................... 70 Director
D.E. Mundell......................................... 65 Director
Larry T. Solari...................................... 54 Director
BRIAN C. BEAZER. Mr. Beazer has served as non-executive Chairman since March
1994. He began work in the construction industry in the late 1950's. He served
as Chief Executive Officer of Beazer PLC from 1968 to 1991, and Chairman of that
company from 1983 to 1991. Mr. Beazer is also a Director of Beazer Japan Ltd.,
Seal Mint Ltd., Jade Holdings Pfe Ltd., Jade Technologies Singapore Pfe Ltd. and
U.S. Industries, Inc.
IAN J. MCCARTHY. Mr. McCarthy is the President and Chief Executive Officer
of the Company. Mr. McCarthy has served as President of predecessors of the
Company since January 1991, responsible for all United States residential
homebuilding operations in that capacity. During the period from May 1981 to
January 1991, Mr. McCarthy was employed in Hong Kong and Thailand as a Civil
Engineer becoming a Director of Beazer Far East and, from January 1980 to May
1981, he was employed by Kier, Ltd., a company engaged in the United Kingdom
construction industry which became an indirect, wholly-owned subsidiary of
Beazer PLC. Mr. McCarthy is a chartered civil engineer with a Bachelor of
Science degree from The City University, London.
MICHAEL H. FURLOW. Mr. Furlow joined the Company in October 1997 as the
Executive Vice President for Operations. In this capacity the Division
Presidents report to Mr. Furlow and he is responsible for the performance of
those operating divisions. During the preceding 12 years Mr. Furlow was with
Pulte Home Corporation in various field and corporate roles, most recently as a
Regional President. Mr. Furlow received a Bachelor of Arts degree with honors in
accounting from the University of West Florida and initially worked as a CPA for
Arthur Young & Company.
DAVID S. WEISS. Mr. Weiss has served as Executive Vice President and Chief
Financial Officer of the Company since November 1993. Mr. Weiss served as the
Assistant Corporate Controller of Hanson Industries, the United States arm of
Hanson PLC, for the period from February 1993 to March 1994. Mr. Weiss was
manager of Financial Reporting for Colgate-Palmolive Company from November 1991
to February 1993 and was with the firm of Deloitte & Touche from 1982 to
November 1991, at which time he served as a Senior Audit manager. Mr. Weiss
holds a Master of Business Administration degree from the Wharton School and
undergraduate degrees in Accounting and English from the University of
Pennsylvania. Mr. Weiss is a licensed Certified Public Accountant.
48
JOHN SKELTON. Mr. Skelton has served as the Company's Senior Vice President,
Operations and Controller since March 1994. Mr. Skelton served as Vice President
and Chief Financial Officer of Beazer Homes, Inc. since 1985. During the period
1977 to 1985, Mr. Skelton served as Finance Director of Leech Homes, a
subsidiary of Leech PLC which was acquired by Beazer PLC in 1985. After
graduating with a Bachelor's degree from Durham University in the United
Kingdom, he was employed by Deloitte & Touche and is a Fellow of the Institute
of Chartered Accountants in England and Wales.
PETER H. SIMONS. Mr. Simons has served as Vice President of Corporate
Development since September 1994. The preceding year, he was Director of
Operations for Lokelani Homes in Hawaii. From 1989 to 1993, Mr. Simons was a
Senior Project Manager for Castle & Cooke Properties in Hawaii. Mr. Simons
earned a Bachelor of Arts degree from Yale University and a Masters in Public
and Private Management from the Yale School of Management.
JAMES A. MOORE. Mr. Moore joined the Company as President of Beazer Homes
Nevada in January 1994. Mr. Moore served the Company as Southeast Regional
Manager responsible for operations in Georgia, Texas and Florida for the period
from May 1995 to September 1997. In September 1997. Mr. Moore was appointed
Chairman of the Process Redesign and Systems Advisory Committee. Prior to
joining the Company, Mr. Moore was President of Watt Housing Corp., a
homebuilding and land development company, as well as a director and officer of
Watt Housing Corp. and several of its subsidiaries. Mr. Moore has also acted as
a management consultant in the homebuilding industry. Mr. Moore earned a
Bachelor of Science degree in Accounting from Northern Illinois University. Mr.
Moore is a licensed Certified Public Accountant.
CORY J. BOYDSTON. Mrs. Boydston has been the Vice President--Administration
and Treasurer of the Company since January 1998. Prior to joining the Company,
Mrs. Boydston served in various capacities with Lennar Corporation from 1987 to
1997, including Chief Financial Officer. Prior to joining Lennar Corporation,
Mrs. Boydston was with Hayes Microcomputer Products in Atlanta, Georgia from
1985 to 1987, and was with Arthur Andersen & Co. in Atlanta, Georgia from 1981
to 1984. Mrs. Boydston holds a Bachelor of Arts degree in Accounting from
Florida State University and holds an active Certified Public Accountant's
license in the State of Georgia.
THOMAS B. HOWARD, JR. Mr. Howard has been Director of the Company since
1995. He served as the Chairman and Chief Executive Officer of Gifford-Hill &
Company, a construction and aggregates company, from 1969 to 1989. Gifford-Hill
& Co. was acquired by Beazer PLC in 1989 and Mr. Howard served as Chairman and
Chief Executive Officer of the successor company until 1992. During the period
1957 to 1969, Mr. Howard held various positions with Vulcan Materials Company.
Mr. Howard currently serves as a Director of Lennox International, Inc. and on
the Board of Trustees of the Methodist Hospitals Foundation.
GEORGE W. MEFFERD. Mr. Mefferd has served as a Director since March 1994. In
1986, Mr. Mefferd served as Group Vice President and a Director of Fluor
Corporation, an engineering and construction company. From 1974 to 1986, Mr.
Mefferd held various positions with Fluor Corporation, including Senior Vice
President--Finance, Treasurer, Group Vice President and Chief Financial Officer.
D.E. MUNDELL. Mr. Mundell has served as a Director since March 1994. Mr.
Mundell has served as Chairman of ORIX USA Corporation, a financial services
company, since January 1991. During the period 1959 to 1990, Mr. Mundell held
various positions within United States Leasing International, Inc., retiring as
Chairman in 1990. He is also a Director of Varian Associates and Stockton
Holding, Ltd.
LARRY T. SOLARI. Mr. Solari has served as a Director since March 1994. He is
the Chairman and CEO of Sequentia, Inc., Cleveland, Ohio and is also Chairman
and CEO of BSI Holdings, Inc. Mr. Solari was the President of the Building
Materials Group of Domtar, Inc. He was the President of the Construction
Products Group, Owens-Corning Fiberglass from 1986 to 1994. Mr. Solari is a
Director of Pacific Coast Building Products, Inc., Sequentia, Inc. and Therma
True, Inc. and he has been a Director of the Policy Advisory Board of the
Harvard Joint Center for Housing Studies and an Advisory Board Member of the
National Home Builders Association.
49
DESCRIPTION OF THE CREDIT FACILITY
The Company maintains a revolving line of credit with a group of banks
pursuant to that certain Credit Facility, dated as of October 22, 1996, and
amended as of July 29, 1997 and as of December 10, 1997 among the Company, The
First National Bank of Chicago as the issuing bank and agent and the other banks
party thereto. The Credit Facility provides for up to $200 million of unsecured
borrowings. Borrowings under the Credit Facility generally bear interest payable
monthly at a fluctuating rate based upon the corporate base rate of interest
announced by The First National Bank of Chicago, the federal funds rate or
LIBOR. All outstanding borrowings under the Credit Facility are due in February
2001. The Credit Facility contains various operating and financial covenants and
substantially all of Company's subsidiaries are guarantors of the Company's
obligations under the Credit Facility. The Credit Facility includes a financial
covenant limiting the dollar value of Land (as defined therein) owned by the
Company to the amount of its Tangible Net Worth (as defined therein). At
December 31, 1997, the value of Land owned by the Company exceeded this maximum
by approximately $6 million. The Company has received a waiver from each of the
participating banks in the Credit Facility relating to this covenant through
March 31, 1998. The Company was in compliance with this covenant at February 28,
1998, and expects to be in compliance as of March 31, 1998, through its use of
Land in the ordinary course of business.
Available borrowings under the Credit Facility are limited to certain
percentages of homes under contract, unsold homes, substantially improved lots
and accounts receivable. At December 31, 1997 the Company had $120 million in
borrowings outstanding at an average interest rate of 7.3% and had available
additional borrowings of approximately $24.8 million under the Credit Facility.
After giving effect to the application of the proceeds received upon issuance of
the Old Notes, at December 31, 1997 the Company would have had approximately
$23.6 million in borrowings outstanding and would have had available additional
borrowings of approximately $21.2 million under the Credit Facility.
DESCRIPTION OF 1994 NOTES
The Company has outstanding $115 million principal amount of 1994 Notes,
which mature on March 1, 2004. Interest on the 1994 Notes accrues at 9% PER
ANNUM and is payable semiannually. The Company may, at its option, redeem the
1994 Notes in whole or in part at any time after March 1, 1999, initially at
102.571% of the principal amount, declining ratably to 100% of the principal
amount thereof on or after March 1, 2001, in each case together with accrued
interest. The 1994 Notes are unsecured and rank PARI PASSU (except as to
collateral) with, or senior in right of payment to, all other existing and
future indebtedness of the Company. The 1994 Notes are guaranteed on a senior
unsecured basis by all of the significant subsidiaries of the Company.
The indenture governing the 1994 Notes (the "1994 Note Indenture") contains
certain restrictive covenants, including covenants which restrict the ability of
the Company and its subsidiaries from (i) declaring any dividends or making
other distributions on, or redeeming the Company's equity securities, including
its common stock; (ii) redeeming or otherwise acquiring any subordinated
indebtedness of the Company or certain indebtedness of its subsidiaries; (iii)
making certain investments; (iv) incurring additional indebtedness; (v) selling
or leasing assets or property not in the ordinary course of business; (vi)
undergoing certain fundamental changes (such as mergers, consolidations and
liquidations); (vii) creating certain liens; (viii) entering into certain
transactions with affiliates; and (ix) imposing additional future restrictions
on upstream payments from certain subsidiaries, all as set forth in the 1994
Note Indenture. In addition, the 1994 Note Indenture provides that in the event
of defined changes in control or if the consolidated tangible net worth of the
Company and its subsidiaries falls below a specified level or, in certain
circumstances, upon sales of assets, the Company is required to make an offer to
repurchase certain specified amounts of outstanding 1994 Notes. At December 31,
1997, under the most restrictive covenants, approximately $30.4 million was
available for payment of cash dividends and for the acquisition by the Company
of its common stock.
50
DESCRIPTION OF PREFERRED STOCK
The Company has authority to issue 5,000,000 shares of Preferred Stock, from
time to time, in one or more series, as authorized by the Board of Directors of
the Company. As of the date of this Prospectus, the Company has issued 2,000,000
shares of Preferred Stock, denominated Series A Cumulative Convertible
Exchangeable Preferred Stock (the "Series A Shares"), all of which shares are
outstanding as of the date hereof. The Series A Shares pay dividends quarterly
at an annual rate of 8%, are convertible at the holder's option into Common
Stock at a conversion price of $19.05 per share of Common Stock and are
exchangeable, at the Company's option, into 8% Convertible Subordinated
Debentures due 2005. The Series A Shares are redeemable, in whole or in part, at
the option of the Company on and after September 1, 1998 initially at a price of
$26.25 per share and thereafter at prices declining to $25.00 per share on and
after September 1, 2003, plus accrued and unpaid dividends, if any, to the
redemption date.
As of the date of this Prospectus, the Company has adopted a Shareholder
Rights Plan and distributed a dividend of one preferred share purchase right (a
"Right") to purchase one one-hundredth of a share of Preferred Stock,
denominated Junior Participating Preferred Stock, Series B (the "Series B
Shares") of the Company. The Company has authorized the issuance of up to
300,000 shares of Series B Shares. The Rights are redeemable and may be amended
at the Company's option before they become exercisable. Until a Right is
exercised, the holder of a Right has no rights as a shareholder of the Company.
The Rights expire on June 24, 2006.
DESCRIPTION OF NOTES
The Old Notes were and the Exchange Notes will be issued under an Indenture,
dated as of March 25, 1998, between the Company and U.S. Bank Trust National
Association (the "Trustee"). The following summaries of certain provisions of
the Indenture do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the
Indenture, including the definitions of certain terms therein. Wherever
particular sections or defined terms of the Indenture not otherwise defined
herein are referred to, such sections or defined terms shall be incorporated
herein by reference. A copy of the Indenture is filed as an exhibit to the
Registration Statement.
GENERAL
The Notes are general unsecured senior obligations of the Company. The
maximum aggregate principal amount of the Notes to be issued under the Indenture
is $200 million. Additional Notes may be issued from time to time subject to the
limitations set forth under "Certain Covenants--Limitations on Additional
Indebtedness." The Notes are guaranteed by each of the Subsidiary Guarantors
pursuant to the guarantees (the "Subsidiary Guarantees") described below. The
Indebtedness represented by the Notes ranks PARI PASSU in right of payment with
all existing and future unsecured Indebtedness of the Company that is not, by
its terms, expressly subordinated in right of payment to the Notes. The
Subsidiary Guarantees are general unsecured obligations of the Subsidiary
Guarantors and rank PARI PASSU in right of payment with all existing and future
unsecured Indebtedness of the Subsidiary Guarantors that is not, by its terms,
expressly subordinated in right of payment to the Subsidiary Guarantees.
Substantially all of the operations of the Company are conducted through the
Subsidiary Guarantors, which comprise all of the significant subsidiaries of the
Company. As a result, the Company is dependent upon the earnings and cash flow
of the Subsidiary Guarantors to meet its obligations, including obligations with
respect to the Notes.
Secured creditors of the Company will have a claim on the assets which
secure the obligations of the Company to such creditors prior to claims of
holders of the Notes against those assets. At December 31, 1997, as adjusted to
give effect to the application of the proceeds received upon issuance of the Old
Notes, the total Indebtedness of the Company, other than the Notes, would have
been approximately $138 million, none of which would have been subordinated to
the Notes or the Subsidiary Guarantees. Secured
51
creditors of the Subsidiary Guarantors will have a claim on the assets which
secure the obligations of such Subsidiary Guarantors prior to claims of holders
of the Notes against those assets. The Indenture relating to the Notes contains
certain limitations on the ability of the Company and its Restricted
Subsidiaries to create Liens and incur additional Indebtedness. In addition to
certain other Permitted Liens, the Company and its Restricted Subsidiaries may
create Liens securing Indebtedness permitted under the Indenture, provided that
the aggregate amount of Indebtedness secured by Liens (other than Non-Recourse
Indebtedness secured by Liens) does not exceed 40% of Consolidated Tangible
Assets. Each of the Company's Subsidiaries, other than UHIC, is a Restricted
Subsidiary. See "Certain Covenants--Limitations on Additional Indebtedness" and
"--Restrictions on Restricted Subsidiary Indebtedness."
The Notes bear interest at the rate PER ANNUM shown on the cover page of
this Prospectus from March 20, 1998, payable on April 1 and October 1 of each
year, commencing on October 1, 1998, to holders of record (the "Holders") at the
close of business on March 15 or September 15, as the case may be, immediately
preceding the respective interest payment date. The Notes will mature on April
1, 2008, and will be issued in denominations of $1,000 and integral multiples
thereof.
Principal, premium, if any, and interest on the Notes will be payable, and
the Notes may be presented for registration of transfer or exchange, at the
offices of the Trustee. Payments must be paid by check mailed to the registered
addresses of the Holders. The Holders must surrender their Notes to the Paying
Agent to collect principal payments. The Company may require payment of a sum
sufficient to cover any transfer tax or other governmental charge payable in
connection with certain transfers or exchanges of the Notes. The Trustee
currently acts as the Paying Agent and the Registrar under the Indenture. The
Company may subsequently act as the Paying Agent and/or the Registrar and the
Company may change any Paying Agent and/or any Registrar without prior notice to
the Holders.
OPTIONAL REDEMPTION
The Company may redeem all or any portion of the Notes at any time and from
time to time on or after April 1, 2003 and prior to maturity at the following
redemption prices (expressed in percentages of the principal amount thereof)
together, in each case, with accrued and unpaid interest to the date fixed for
redemption, if redeemed during the 12-month period beginning on April 1 of each
year indicated below:
YEAR PERCENTAGE
- --------------------------------------------------------------------------------- -----------
2003............................................................................. 104.438%
2004............................................................................. 102.958%
2005............................................................................. 101.479%
2006 and thereafter.............................................................. 100.000%
In addition, on or prior to April 1, 2001, the Company may, at its option,
redeem up to 35% of the outstanding Notes with the net proceeds of an Equity
Offering at 108.875% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date fixed for redemption; PROVIDED, that at least $65
million principal amount of the Notes remain outstanding after such redemption.
In the event less than all of the Notes are to be redeemed at any time,
selection of the Notes to be redeemed will be made by the Trustee from among the
outstanding Notes on a PRO RATA basis, by lot or by any other method permitted
by the Indenture. Notice of redemption will be mailed at least 15 days but not
more than 60 days before the redemption date to each Holder whose Notes are to
be redeemed at the registered address of such Holder. On and after the
redemption date, interest will cease to accrue on the Notes or portions thereof
called for redemption.
MANDATORY OFFERS TO PURCHASE THE NOTES
The Indenture requires the Company (i) to offer to purchase all of the
outstanding Notes upon a Change of Control of the Company, (ii) to offer to
purchase a portion of the outstanding Notes using Net
52
Proceeds neither used to repay certain Indebtedness nor used or invested as
provided in the Indenture or (iii) to offer to purchase 10% of the original
outstanding principal amount of the Notes in the event that, at the end of any
two consecutive fiscal quarters, the Company's Consolidated Tangible Net Worth
is less than $85 million. See "Certain Covenants--Change of Control,"
"--Disposition of Proceeds of Asset Sales" and "--Maintenance of Consolidated
Tangible Net Worth."
None of the provisions relating to an offer to purchase is waivable by the
Board of Directors of the Company. If an offer to purchase upon a Change of
Control or otherwise were to be required, there can be no assurance that the
Company would have sufficient funds to pay the purchase price for all Notes that
the Company is required to purchase. In addition, the Company's ability to
finance the purchase of Notes may be limited by the terms of its then existing
borrowing agreements. Failure by the Company to purchase the Notes when required
will result in an Event of Default with respect to the Notes.
If an offer is made to purchase Notes as a result of a Change of Control or
otherwise, the Company will comply with applicable law, including, without
limitation, Section 14(e) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and Rule 14e-1 thereunder, if applicable.
The Change of Control feature of the Notes may in certain circumstances make
more difficult or discourage a takeover of the Company and, thus, the removal of
incumbent management. The Change of Control feature, however, is not the result
of management's knowledge of any specific effort to obtain control of the
Company by means of a merger, tender offer, solicitation or otherwise, or part
of a plan by management to adopt a series of anti-takeover provisions.
THE SUBSIDIARY GUARANTEES
Each of the Subsidiary Guarantors will (so long as they remain Subsidiaries
of the Company) unconditionally guarantee on a joint and several basis all of
the Company's obligations under the Notes, including its obligations to pay
principal, premium, if any, and interest with respect to the Notes. Each of the
Subsidiary Guarantees will be an unsecured obligation of the Subsidiary
Guarantors and will rank PARI PASSU with all existing and future unsecured
Indebtedness of such Subsidiary Guarantors that is not, by its terms, expressly
subordinated in right of payment to the Subsidiary Guarantee. Except as provided
in "Certain Covenants" below, the Company is not restricted from selling or
otherwise disposing of any of the Subsidiary Guarantors.
The Indenture provides that each Restricted Subsidiary (other than, in the
Company's discretion, any Restricted Subsidiary the assets of which have a book
value of not more than $5 million) is a Subsidiary Guarantor and, at the
Company's discretion, any Unrestricted Subsidiary may be a Subsidiary Guarantor.
The Indenture provides that if all or substantially all of the assets of any
Subsidiary Guarantor or all of the capital stock of any Subsidiary Guarantor is
sold (including by issuance or otherwise) by the Company or any of its
Subsidiaries in a transaction constituting an Asset Sale, and if the Net
Proceeds from such Asset Sale are used in accordance with the covenant,
"Disposition of Proceeds of Asset Sales," then such Subsidiary Guarantor (in the
event of a sale or other disposition of all of the capital stock of such
Subsidiary Guarantor) or the corporation acquiring such assets (in the event of
a sale or other disposition of all or substantially all of the assets of such
Subsidiary Guarantor) shall be released and discharged of its Subsidiary
Guarantee obligations.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
terms used in the Indenture.
"ACQUISITION INDEBTEDNESS" means Indebtedness of any Person and its
Subsidiaries existing at the time such Person became a Subsidiary of the Company
(or such Person is merged with or into the Company or one of the Company's
Subsidiaries) or assumed in connection with the acquisition of assets from any
such
53
Person, including, without limitation, Indebtedness Incurred in connection with,
or in contemplation of (a) such Person being merged with or into or becoming a
Subsidiary of the Company or one of its Subsidiaries (but excluding Indebtedness
of such Person which is extinguished, retired or repaid in connection with such
Person being merged with or into or becoming a Subsidiary of the Company or one
of its Subsidiaries) or (b) such acquisition of assets from any such Person.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling or controlled by, or under direct or indirect common control with,
such Person. For purposes of the Indenture, each executive officer and director
of the Company and each Subsidiary of the Company will be an Affiliate of the
Company. In addition, for purposes of the Indenture, control of a Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise. Notwithstanding the foregoing, the term "Affiliate" will not include,
with respect to the Company or any Restricted Subsidiary which is a Wholly Owned
Subsidiary of the Company, any Restricted Subsidiary which is a Wholly Owned
Subsidiary of the Company.
"ASSET SALE" for any Person means the sale, lease, conveyance or other
disposition (including, without limitation, by merger, consolidation or sale and
leaseback transaction, and whether by operation of law or otherwise) of any of
that Person's assets (including, without limitation, the sale or other
disposition of Capital Stock of any Subsidiary of such Person, whether by such
Person or such Subsidiary), whether owned on the date of the Indenture or
subsequently acquired in one transaction or a series of related transactions, in
which such Person and/or its Subsidiaries receive cash and/or other
consideration (including, without limitation, the unconditional assumption of
Indebtedness of such Person and/or its Subsidiaries) having an aggregate Fair
Market Value of $500,000 or more as to each such transaction or series of
related transactions; PROVIDED, HOWEVER, that (i) a transaction or series of
related transactions that results in a Change of Control shall not constitute an
Asset Sale, (ii) sales of homes in the ordinary course of business will not
constitute Asset Sales, (iii) sales, leases, conveyances or other dispositions,
including, without limitation, exchanges or swaps of real estate in the ordinary
course of business, for development of the Company's or any of its Subsidiaries'
projects, will not constitute Asset Sales, (iv) sales, leases, sale-leasebacks
or other dispositions of amenities, model homes and other improvements at the
Company's or its Subsidiaries' projects in the ordinary course of business will
not constitute Asset Sales, and (v) transactions between the Company and any of
its Restricted Subsidiaries which are Wholly Owned Subsidiaries, or among such
Restricted Subsidiaries which are Wholly Owned Subsidiaries of the Company, will
not constitute Asset Sales.
"BANK CREDIT FACILITY" means the Credit Facility among the Company, as
borrower thereunder, the Subsidiary Guarantors and the financial institutions
named therein, as such facility may be amended, restated, supplemented or
otherwise modified from time to time, and includes any facility extending the
maturity of, refinancing or restructuring (including, without limitation, the
inclusion of additional borrowers thereunder that are Unrestricted Subsidiaries)
all or any portion of, the Indebtedness under such facility or any successor
facilities and includes any facility with one or more lenders refinancing or
replacing all or any portion of the Indebtedness under such facility or any
successor facilities.
"BANKRUPTCY LAW" means title 11 of the United States Code, as amended, or
any similar federal or state law for the relief of debtors.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL STOCK" of any Person means any and all shares, rights to purchase,
warrants or options (whether or not currently exercisable), participations, or
other equivalents of or interests in (however designated and whether voting or
non-voting) the equity (which includes, but is not limited to, common stock,
preferred stock and partnership and joint venture interests) of such Person
(excluding any debt securities that are convertible into, or exchangeable for,
such equity).
54
"CAPITALIZED LEASE OBLIGATIONS" of any Person means the obligations of such
Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligation will be the capitalized amount thereof determined in
accordance with GAAP.
"CHANGE OF CONTROL" means any of the following: (i) the sale, lease,
conveyance or other disposition of all or substantially all of the Company's
assets as an entirety or substantially as an entirety to any Person or "group"
(within the meaning of Section 13(d)(3) of the Exchange Act) in one or a series
of transactions; provided that a transaction where the holders of all classes of
Common Equity of the Company immediately prior to such transaction own, directly
or indirectly, 50 percent or more of the aggregate voting power of all classes
of Common Equity of such Person or group immediately after such transaction will
not be a Change of Control; (ii) the acquisition by the Company and/or any of
its Subsidiaries of 50 percent or more of the aggregate voting power of all
classes of Common Equity of the Company in one transaction or a series of
related transactions; (iii) the liquidation or dissolution of the Company;
provided that a liquidation or dissolution of the Company which is part of a
transaction or series of related transactions that does not constitute a Change
of Control under the "provided" clause of clause (i) above will not constitute a
Change of Control under this clause (iii); (iv) any transaction or a series of
related transactions (as a result of a tender offer, merger, consolidation or
otherwise) that results in, or that is in connection with, (a) any Person,
including a "group" (within the meaning of Section 13(d)(3) of the Exchange Act)
acquiring "beneficial ownership" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of 50 percent or more of the aggregate voting
power of all classes of Common Equity of the Company or of any Person that
possesses "beneficial ownership" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of 50 percent or more of the aggregate voting
power of all classes of Common Equity of the Company or (b) less than 50 percent
(measured by the aggregate voting power of all classes) of the Common Equity of
the Company being registered under Section 12(b) or 12(g) of the Exchange Act;
or (v) a majority of the Board of Directors of the Company not being comprised
of Continuing Directors.
"COMMON EQUITY" of any Person means all Capital Stock of such Person that is
generally entitled to (i) vote in the election of directors of such Person, or
(ii) if such Person is not a corporation, vote or otherwise participate in the
selection of the governing body, partners, managers or others that will control
the management and policies of such Person.
"CONSOLIDATED CASH FLOW AVAILABLE FOR FIXED CHARGES" of the Company and its
Restricted Subsidiaries means for any period (a) the sum of the amounts for such
period of (i) Consolidated Net Income, PLUS (ii) Consolidated Income Tax Expense
(without regard to income tax expense or credits attributable to extraordinary
and nonrecurring gains or losses on Asset Sales), plus (iii) Consolidated
Interest Expense, PLUS (iv) all depreciation, and, without duplication,
amortization (including, without limitation, capitalized interest amortized to
cost of sales), PLUS (v) all other noncash items reducing Consolidated Net
Income during such period, MINUS (b) all other noncash items increasing
Consolidated Net Income during such period; all as determined on a consolidated
basis for the Company and its Restricted Subsidiaries in accordance with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" of the Company means, with
respect to any determination date, the ratio of (i) Consolidated Cash Flow
Available for Fixed Charges of the Company for the prior four full fiscal
quarters for which financial results have been reported immediately preceding
the determination date, to (ii) the aggregate Consolidated Interest Incurred of
the Company for the prior four full fiscal quarters for which financial results
have been reported immediately preceding the determination date; provided that
(1) with respect to any Indebtedness Incurred during, and remaining outstanding
at the end of, such four full fiscal quarter period, such Indebtedness will be
assumed to have been incurred as of the first day of such four full fiscal
quarter period, (2) with respect to Indebtedness repaid (other than a repayment
of revolving credit obligations repaid solely out of operating cash flows)
during such four full fiscal quarter period, such Indebtedness will be assumed
to have been repaid on the first day of such four
55
full fiscal quarter period, (3) with respect to the Incurrence of any
Acquisition Indebtedness, such Indebtedness and any proceeds therefrom will be
assumed to have been Incurred and applied as of the first day of such four full
fiscal quarter period, and the results of operations of any Person and any
Subsidiary of such Person that, in connection with or in contemplation of such
Incurrence, becomes a Subsidiary of the Company or is merged with or into the
Company or one of the Company's Subsidiaries or whose assets are acquired, will
be included, on a pro forma basis, in the calculation of the Consolidated Fixed
Charge Coverage Ratio as if such transaction had occurred on the first day of
such four full fiscal quarter period, and (4) with respect to any other
transaction pursuant to which any Person becomes a Subsidiary of the Company or
is merged with or into the Company or one of the Company's Subsidiaries or
pursuant to which any Person's assets are acquired, such Consolidated Fixed
Charge Coverage Ratio shall be calculated on a pro forma basis as if such
transaction had occurred on the first day of such four full fiscal quarter
period, but only if such transaction would require a pro forma presentation in
financial statements prepared pursuant to Rule 11-02 of Regulation S-X under the
Securities Act.
"CONSOLIDATED INCOME TAX EXPENSE" of the Company for any period means the
income tax expense of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" of the Company for any period means the
Interest Expense of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST INCURRED" of the Company for any period means the
Interest Incurred of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" of the Company for any period means the aggregate
net income (or loss) of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; PROVIDED
that there will be excluded from such net income (to the extent otherwise
included therein), without duplication: (i) the net income (or loss) of any
Person (other than a Restricted Subsidiary) in which any Person (including,
without limitation, an Unrestricted Subsidiary) other than the Company or any
Restricted Subsidiary has an ownership interest, except to the extent that any
such income has actually been received by the Company or any Restricted
Subsidiary in the form of cash dividends or similar cash distributions during
such period, or in any other form but converted to cash during such period, (ii)
except to the extent includible in Consolidated Net Income pursuant to the
foregoing clause (i), the net income (or loss) of any Person that accrued prior
to the date that (a) such Person becomes a Restricted Subsidiary or is merged
with or into or consolidated with the Company or any of its Restricted
Subsidiaries or (b) the assets of such Person are acquired by the Company or any
of its Restricted Subsidiaries, (iii) the net income of any Restricted
Subsidiary to the extent that (but only so long as) the declaration or payment
of dividends or similar distributions by such Restricted Subsidiary of that
income is not permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary during such period, (iv) in
the case of a successor to the Company by consolidation, merger or transfer of
its assets, any earnings of the successor prior to such merger, consolidation or
transfer of assets and (v) the gains (but not losses) realized during such
period by the Company or any of its Restricted Subsidiaries resulting from (a)
the acquisition of securities issued by the Company or extinguishment of
Indebtedness of the Company or any of its Restricted Subsidiaries, (b) Asset
Sales by the Company or any of its Restricted Subsidiaries and (c) other
extraordinary items realized by the Company or any of its Restricted
Subsidiaries. Notwithstanding the foregoing, in calculating Consolidated Net
Income, the Company will be entitled to take into consideration the tax benefits
associated with any loss described in clause (v) of the preceding sentence, but
only to the extent such tax benefits are actually recognized by the Company or
any of its Restricted Subsidiaries during such period; PROVIDED, FURTHER, that
there will be included in such net income, without duplication, the net income
of any Unrestricted Subsidiary to the extent such net income is actually
56
received by the Company or any of its Restricted Subsidiaries in the form of
cash dividends or similar cash distributions during such period, or in any other
form but converted to cash during such period.
"CONSOLIDATED TANGIBLE ASSETS" of the Company as of any date means the total
amount of assets of the Company and its Restricted Subsidiaries (less applicable
reserves) on a consolidated basis at the end of the fiscal quarter immediately
preceding such date, as determined in accordance with GAAP, less: (i) Intangible
Assets and (ii) appropriate adjustments on account of minority interests of
other Persons holding equity investments in Restricted Subsidiaries, in the case
of each of clauses (i) and (ii) above, as reflected on the consolidated balance
sheet of the Company and its Restricted Subsidiaries as of the end of the fiscal
quarter immediately preceding such date.
"CONSOLIDATED TANGIBLE NET WORTH" of the Company as of any date means the
stockholders' equity (including any Preferred Stock that is classified as equity
under GAAP, other than Disqualified Stock) of the Company and its Restricted
Subsidiaries on a consolidated basis at the end of the fiscal quarter
immediately preceding such date, as determined in accordance with GAAP, plus any
amount of unvested deferred compensation included, in accordance with GAAP, as
an offset to stockholders' equity, less the amount of Intangible Assets
reflected on the consolidated balance sheet of the Company and its Restricted
Subsidiaries as of the end of the fiscal quarter immediately preceding such
date.
"CONTINUING DIRECTOR" means at any date a member of the Board of Directors
of the Company who (i) was a member of the Board of Directors of the Company on
the initial issuance date of the Notes under the Indenture or (ii) was nominated
for election or elected to the Board of Directors of the Company with the
affirmative vote of at least a majority of the directors who were Continuing
Directors at the time of such nomination or election.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
"DEFAULT" means any event, act or condition that is, or after notice or the
passage of time, or both, would be, an Event of Default.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
final maturity date of the Notes; PROVIDED that any Capital Stock which would
not constitute Disqualified Stock but for provisions thereof giving holders
thereof the right to require the Company to repurchase or redeem such Capital
Stock upon the occurrence of a change of control occurring prior to the final
maturity of the Notes will not constitute Disqualified Stock if the change of
control provisions applicable to such Capital Stock are no more favorable to the
holders of such Capital Stock than the "Change of Control" covenant set forth in
the Indenture and such Capital Stock specifically provides that the Company will
not repurchase or redeem (or be required to repurchase or redeem) any such
Capital Stock pursuant to such provisions prior to the Company's repurchase of
Notes pursuant to the "Change of Control" covenant set forth in the Indenture.
"DISQUALIFIED STOCK DIVIDEND" of any Person means, for any dividend payable
with regard to Disqualified Stock issued by such Person, the amount of such
dividend multiplied by a fraction, the numerator of which is one and the
denominator of which is one minus the maximum statutory combined federal, state
and local income tax rate (expressed as a decimal number between 1 and 0) then
applicable to such Person.
"EQUITY OFFERING" means a public or private equity offering by the Company
for cash of Capital Stock, other than an offering of Disqualified Stock.
"EVENT OF DEFAULT" has the meaning set forth in "Description of
Notes--Events of Default."
"EXISTING INDEBTEDNESS" means all of the Indebtedness of the Company and its
Subsidiaries that is outstanding on the date of the Indenture.
57
"FAIR MARKET VALUE" with respect to any asset or property means the sale
value that would be obtained in an arm's length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing buyer
under no compulsion to buy. Fair Market Value shall be determined by the Board
of Directors of the Company acting in good faith and shall be evidenced by a
board resolution (certified by the Secretary or Assistant Secretary of the
Company) delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth in the
opinions and interpretations of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and interpretations of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the date of the Indenture.
"HEDGING OBLIGATIONS" of any Person means the obligations of such Person
pursuant to any interest rate swap agreement, foreign currency exchange
agreement, interest rate collar agreement, option or futures contract or other
similar agreement or arrangement relating to interest rates or foreign exchange
rates.
"HOLDER" means a Person in whose name a Note is registered in the Security
Register.
"INCUR" means to, directly or indirectly, create, incur, assume, guarantee,
extend the maturity of, or otherwise become liable with respect to any
Indebtedness; provided, however, that neither the accrual of interest (whether
such interest is payable in cash or kind) nor the accretion of original issue
discount shall be considered an Incurrence of Indebtedness.
"INDEBTEDNESS" of any Person at any date means, without duplication, (i) all
indebtedness of such Person for borrowed money (whether or not the recourse of
the lender is to the whole of the assets of such Person or only to a portion
thereof), (ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all fixed obligations of such Person
in respect of letters of credit or other similar instruments (or reimbursement
obligations with respect thereto), other than standby letters of credit issued
for the benefit of, or surety and performance bonds issued by, such Person in
the ordinary course of business, (iv) all obligations of such Person with
respect to Hedging Obligations (other than those that fix or cap the interest
rate on variable rate Indebtedness otherwise permitted by the Indenture or that
fix the exchange rate in connection with Indebtedness denominated in a foreign
currency and otherwise permitted by the Indenture), (v) all obligations of such
Person to pay the deferred and unpaid purchase price of property or services,
including, without limitation, all conditional sale obligations of such Person
and all obligations under any title retention agreement; PROVIDED, HOWEVER, that
(a) any obligations described in the foregoing clause (v) which are non-interest
bearing and which have a maturity of not more than six months from the date of
Incurrence thereof shall not constitute Indebtedness and (b) trade payables and
accrued expenses Incurred in the ordinary course of business shall not
constitute Indebtedness, (vi) all Capitalized Lease Obligations of such Person,
(vii) all Indebtedness of others secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person, (viii) all
Indebtedness of others guaranteed by, or otherwise the liability of, such Person
to the extent of such guarantee or liability, and (ix) all Disqualified Stock
issued by such Person (the amount of Indebtedness represented by any
Disqualified Stock will equal the greater of the voluntary or involuntary
liquidation preference plus accrued and unpaid dividends). The amount of
Indebtedness of any Person at any date will be (a) the outstanding balance at
such date of all unconditional obligations as described above, (b) the maximum
liability of such Person for any contingent obligations under clause (viii)
above and (c) in the case of clause (vii) (if the Indebtedness referred to
therein is not assumed by such Person), the lesser of the (A) Fair Market Value
of all assets subject to a Lien securing the Indebtedness of others on the date
that the Lien attaches and (B) amount of the Indebtedness secured.
"INDEPENDENT FINANCIAL ADVISOR" means an accounting, appraisal or investment
banking firm of nationally recognized standing that is, in the reasonable
judgment of the Company's Board of Directors, (i) qualified to perform the task
for which it has been engaged, and (ii) disinterested and independent, in a
58
direct and indirect manner, of the parties to the Affiliate Transaction with
respect to which such firm has been engaged.
"INTANGIBLE ASSETS" of the Company means all unamortized debt discount and
expense, unamortized deferred charges, goodwill, patents, trademarks, service
marks, trade names, copyrights and all other items which would be treated as
intangibles on the consolidated balance sheet of the Company and its Restricted
Subsidiaries prepared in accordance with GAAP.
"INTEREST EXPENSE" of any Person for any period means, without duplication,
the aggregate amount of (i) interest which, in conformity with GAAP, would be
set opposite the caption "interest expense" or any like caption on an income
statement for such Person (including, without limitation, imputed interest
included on Capitalized Lease Obligations, all commissions, discounts and other
fees and charges owed with respect to letters of credit securing financial
obligations and bankers' acceptance financing, the net costs associated with
Hedging Obligations, amortization of other financing fees and expenses, the
interest portion of any deferred payment obligation, amortization of discount or
premium, if any, and all other noncash interest expense other than interest and
other charges amortized to cost of sales) and includes, with respect to the
Company and its Restricted Subsidiaries, without duplication (including
duplication of the foregoing items), all interest amortized to cost of sales for
such period, and (ii) the amount of Disqualified Stock Dividends recognized by
the Company on any Disqualified Stock whether or not paid during such period.
"INTEREST INCURRED" of any Person for any period means, without duplication,
the aggregate amount of (i) interest which, in conformity with GAAP, would be
set opposite the caption "interest expense" or any like caption on an income
statement for such Person (including, without limitation, imputed interest
included on Capitalized Lease Obligations, all commissions, discounts and other
fees and charges owed with respect to letters of credit securing financial
obligations and bankers' acceptance financing, the net costs associated with
Hedging Obligations, amortization of other financing fees and expenses, the
interest portion of any deferred payment obligation, amortization of discount or
premium, if any, and all other noncash interest expense other than interest and
other charges amortized to cost of sales) and includes, with respect to the
Company and its Restricted Subsidiaries, without duplication (including
duplication of the foregoing items), all interest capitalized for such period,
all interest attributable to discontinued operations for such period to the
extent not set forth on the income statement under the caption "interest
expense" or any like caption, and all interest actually paid by the Company or a
Restricted Subsidiary under any guarantee of Indebtedness (including, without
limitation, a guarantee of principal, interest or any combination thereof) of
any other Person during such period and (ii) the amount of Disqualified Stock
Dividends recognized by the Company on any Disqualified Stock whether or not
declared during such period.
"INVESTMENTS" of any Person means all (i) investments by such Person in any
other Person in the form of loans, advances or capital contributions, (ii)
guarantees of Indebtedness or other obligations of any other Person by such
Person, (iii) purchases (or other acquisitions for consideration) by such Person
of Indebtedness, Capital Stock or other securities of any other Person and (iv)
other items that would be classified as investments on a balance sheet of such
Person determined in accordance with GAAP.
"JOINT VENTURE ENTITY" means the joint venture between the Company and
Corporacion GEO S.A. de C.V.
"LEGAL HOLIDAY" means Saturday, Sunday or a day on which banking
institutions in New York, New York, Chicago, Illinois, or at a place of payment
are authorized or obligated by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment
shall be made at that place on the next succeeding day that is not a Legal
Holiday.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or other similar encumbrance of any kind upon or in respect of
such asset, whether or not filed, recorded or
59
otherwise perfected under applicable law (including, without limitation, any
conditional sale or other title retention agreement, and any lease in the nature
thereof, any option or other agreement to sell, and any filing of, or agreement
to give, any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"MATERIAL SUBSIDIARY" means any Subsidiary of the Company which accounted
for five percent or more of the Consolidated Tangible Assets or Consolidated
Cash Flow Available for Fixed Charges of the Company on a consolidated basis for
the fiscal year ending immediately prior to any Default or Event of Default.
"NET PROCEEDS" means (i) cash (in U.S. dollars or freely convertible into
U.S. dollars) received by the Company or any Restricted Subsidiary from an Asset
Sale net of (a) all brokerage commissions, investment banking fees and all other
fees and expenses (including, without limitation, fees and expenses of counsel,
financial advisors, accountants and investment bankers) related to such Asset
Sale, (b) provisions for all income and other taxes measured by or resulting
from such Asset Sale of the Company or any of its Restricted Subsidiaries, (c)
payments made to retire Indebtedness that was incurred in accordance with the
Indenture and that either (1) is secured by a Lien incurred in accordance with
the Indenture on the property or assets sold or (2) is required in connection
with such Asset Sale to the extent actually repaid in cash, (d) amounts required
to be paid to any Person (other than the Company or a Restricted Subsidiary)
owning a beneficial interest in the assets subject to the Asset Sale and (e)
appropriate amounts to be provided by the Company or any Restricted Subsidiary
thereof, as the case may be, as a reserve, in accordance with GAAP, against any
liabilities associated with such Asset Sale and retained by the Company or any
Restricted Subsidiary thereof, as the case may be, after such Asset Sale,
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations or post-closing purchase price adjustments
associated with such Asset Sale, all as reflected in an Officers' Certificate
delivered to the Trustee, and (ii) all noncash consideration received by the
Company or any of its Restricted Subsidiaries from such Asset Sale upon the
liquidation or conversion of such consideration into cash, without duplication,
net of all items enumerated in subclauses (a) through (e) of clause (i) hereof.
"NON-RECOURSE INDEBTEDNESS" with respect to any Person means Indebtedness of
such Person for which (i) the sole legal recourse for collection of principal
and interest on such Indebtedness is against the specific property identified in
the instruments evidencing or securing such Indebtedness and such property was
acquired with the proceeds of such Indebtedness or such Indebtedness was
Incurred within 90 days after the acquisition of such property and (ii) no other
assets of such Person may be realized upon in collection of principal or
interest on such Indebtedness.
"OFFICER" means the chairman, the chief executive officer, the president,
the chief financial officer, the chief operating officer, the chief accounting
officer, the treasurer, or any assistant treasurer, the controller, the
secretary, any assistant secretary or any vice president of a Person.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers, one of
whom must be the Person's chief executive officer, chief operating officer,
chief financial officer or chief accounting officer.
"PAYING AGENT" means any office or agency where Notes and the Subsidiary
Guarantees may be presented for payment.
"PERMITTED INVESTMENTS" of any Person means Investments of such Person in
(i) direct obligations of the United States or any agency thereof or obligations
guaranteed by the United States or any agency thereof, in each case maturing
within 180 days of the date of acquisition thereof, (ii) certificates of deposit
maturing within 180 days of the date of acquisition thereof issued by a bank,
trust company or savings and loan association which is organized under the laws
of the United States or any state thereof having capital, surplus and undivided
profits aggregating in excess of $250 million and a Keefe Bank Watch Rating of C
or better, (iii) certificates of deposit maturing within 180 days of the date of
acquisition thereof issued by a
60
bank, trust company or savings and loan association organized under the laws of
the United States or any state thereof other than banks, trust companies or
savings and loan associations satisfying the criteria in (ii) above, PROVIDED
that the aggregate amount of all certificates of deposit issued to the Company
at any one time by such bank, trust company or savings and loan association will
not exceed $100,000, (iv) commercial paper given the highest rating by two
established national credit rating agencies and maturing not more than 180 days
from the date of the acquisition thereof, (v) repurchase agreements or
money-market accounts which are fully secured by direct obligations of the
United States or any agency thereof and (vi) in the case of the Company and its
Subsidiaries, any receivables or loans taken by the Company or a Subsidiary in
connection with the sale of any asset otherwise permitted by the Indenture.
"PERMITTED LIENS" means (i) Liens for taxes, assessments or governmental
charges or claims that either (a) are not yet delinquent or (b) are being
contested in good faith by appropriate proceedings and as to which appropriate
reserves have been established or other provisions have been made in accordance
with GAAP, (ii) statutory Liens of landlords and carriers', warehousemen's,
mechanics', suppliers', materialmen's, repairmen's or other Liens imposed by law
and arising in the ordinary course of business and with respect to amounts that,
to the extent applicable, either (a) are not yet delinquent or (b) are being
contested in good faith by appropriate proceedings and as to which appropriate
reserves have been established or other provisions have been made in accordance
with GAAP, (iii) Liens (other than any Lien imposed by the Employee Retirement
Income Security Act of 1974, as amended) incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, (iv) Liens incurred
or deposits made to secure the performance of tenders, bids, leases, statutory
obligations, surety and appeal bonds, progress payments, government contracts
and other obligations of like nature (exclusive of obligations for the payment
of borrowed money), in each case incurred in the ordinary course of business of
the Company and its Subsidiaries, (v) attachment or judgment Liens not giving
rise to a Default or an Event of Default and which are being contested in good
faith by appropriate proceedings, (vi) easements, rights-of-way, restrictions
and other similar charges or encumbrances not materially interfering with the
ordinary course of business of the Company and its Subsidiaries, (vii) zoning
restrictions, licenses, restrictions on the use of real property or minor
irregularities in title thereto, which do not materially impair the use of such
real property in the ordinary course of business of the Company and its
Subsidiaries or the value of such real property for the purpose of such
business, (viii) leases or subleases granted to others not materially
interfering with the ordinary course of business of the Company and its
Subsidiaries, (ix) purchase money mortgages (including, without limitation,
Capitalized Lease Obligations and purchase money security interests), (x) Liens
securing Refinancing Indebtedness; PROVIDED that such Liens only extend to
assets which are similar to the type of assets securing the Indebtedness being
refinanced and such refinanced Indebtedness was previously secured by such
similar assets, (xi) Liens securing Indebtedness of the Company and its
Restricted Subsidiaries permitted to be Incurred under the Indenture; PROVIDED
that the aggregate amount of Indebtedness secured by Liens (other than
Non-Recourse Indebtedness secured by Liens) will not exceed 40 percent of
Consolidated Tangible Assets, (xii) any interest in or title of a lessor to
property subject to any Capitalized Lease Obligations incurred in compliance
with the provisions of the Indenture, (xiii) Liens existing on the date of the
Indenture, including, without limitation, Liens securing Existing Indebtedness
(xiv) any option, contract or other agreement to sell an asset; PROVIDED such
sale is not otherwise prohibited under the Indenture, (xv) Liens securing
Non-Recourse Indebtedness of the Company or a Restricted Subsidiary thereof;
PROVIDED that such Liens apply only to the property financed out of the net
proceeds of such Non-Recourse Indebtedness within 90 days of the incurrence of
such Non-Recourse Indebtedness, (xvi) Liens on property or assets of any
Restricted Subsidiary securing Indebtedness of such Restricted Subsidiary owing
to the Company or one or more Restricted Subsidiaries, (xvii) Liens securing
Indebtedness of an Unrestricted Subsidiary, (xviii) any right of a lender or
lenders to which the Company or a Restricted Subsidiary may be indebted to
offset against, or appropriate and apply to the payment of, such Indebtedness
any and all balances, credits, deposits, accounts or monies of the Company or a
Restricted Subsidiary with or held by such lender or lenders, (xix) any pledge
or deposit of cash or property in
61
conjunction with obtaining surety and performance bonds and letters of credit
required to engage in constructing on-site and off-site improvements required by
municipalities or other governmental authorities in the ordinary course of
business of the Company or any Restricted Subsidiary; (xx) Liens in favor of
customs and revenue authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods, (xxi) Liens
encumbering customary initial deposits and margin deposits, and other Liens that
are customary in the industry and incurred in the ordinary course of business
securing Indebtedness under Hedging Obligations and forward contracts, options,
futures contracts, futures options or similar agreements or arrangements
designed to protect the Company or any of its Subsidiaries from fluctuations in
the price of commodities, and (xxii) Liens arising out of conditional sale,
title retention, consignment or similar arrangements for the sale of goods
entered into by the Company or any of its Subsidiaries in the ordinary course of
business.
"PERSON" means any individual, corporation, partnership, joint venture,
incorporated or unincorporated association, joint stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"PREFERRED STOCK" of any Person means all Capital Stock of such Person which
has a preference in liquidation or with respect to the payment of dividends.
"REFINANCING INDEBTEDNESS" means Indebtedness that refunds, refinances or
extends any Existing Indebtedness or other Indebtedness permitted to be incurred
by the Company or its Restricted Subsidiaries pursuant to the terms of the
Indenture, but only to the extent that (i) the Refinancing Indebtedness is
subordinated to the Notes or the Subsidiary Guarantees, as the case may be, to
the same extent as the Indebtedness being refunded, refinanced or extended, if
at all, (ii) the Refinancing Indebtedness is scheduled to mature either (a) no
earlier than the Indebtedness being refunded, refinanced or extended, or (b)
after the maturity date of the Notes, (iii) the portion, if any, of the
Refinancing Indebtedness that is scheduled to mature on or prior to the maturity
date of the Notes has a Weighted Average Life to Maturity at the time such
Refinancing Indebtedness is Incurred that is equal to or greater than the
Weighted Average Life to Maturity of the portion of the Indebtedness being
refunded, refinanced or extended that is scheduled to mature on or prior to the
maturity date of the Notes, (iv) such Refinancing Indebtedness is in an
aggregate amount that is equal to or less than the aggregate amount then
outstanding under the Indebtedness being refunded, refinanced or extended, (v)
such Refinancing Indebtedness is Incurred by the same Person that initially
Incurred the Indebtedness being refunded, refinanced or extended, except that
the Company may Incur Refinancing Indebtedness to refund, refinance or extend
Indebtedness of any Restricted Subsidiary, and (vi) such Refinancing
Indebtedness is Incurred within 180 days after the Indebtedness being refunded,
refinanced or extended is so refunded, refinanced or extended.
"REGISTRAR" means an office or agency where Notes may be presented for
registration of transfer or for exchange.
"RESTRICTED INVESTMENT" with respect to any Person means any Investment
(other than any Permitted Investment) by such Person in any (i) of its
Affiliates, (ii) executive officer or director or any Affiliate of such Person,
or (iii) any other Person other than a Restricted Subsidiary; PROVIDED, HOWEVER,
that with respect to the Company and its Restricted Subsidiaries, any loan or
advance to an executive officer or director of the Company or a Subsidiary will
not constitute a Restricted Investment provided such loan or advance is made in
the ordinary course of business and, if such loan or advance exceeds $100,000
(other than a readily marketable mortgage loan not exceeding $500,000, such loan
or advance has been approved by the Board of Directors of the Company or a
disinterested committee thereof. Notwithstanding the above, a Subsidiary
Guarantee shall not be deemed a Restricted Investment.
"RESTRICTED PAYMENT" with respect to any Person means (i) the declaration of
any dividend or the making of any other payment or distribution of cash,
securities or other property or assets in respect of such Person's Capital Stock
(except that a dividend payable solely in Capital Stock (other than Disqualified
Stock) of such Person will not constitute a Restricted Payment), (ii) any
payment on account of the
62
purchase, redemption, retirement or other acquisition for value of such Person's
Capital Stock or any other payment or distribution made in respect thereof
(other than payments or distributions excluded from the definition of Restricted
Payment in clause (i) above), either directly or indirectly, (iii) any
Restricted Investment, and (iv) any principal payment, redemption, repurchase,
defeasance or other acquisition or retirement of any Indebtedness of any
Unrestricted Subsidiary or of Indebtedness of the Company which is subordinated
in right of payment to the Notes or of Indebtedness of a Restricted Subsidiary
which is subordinated in right of payment to its Subsidiary Guarantee; PROVIDED,
HOWEVER, that with respect to the Company and its Subsidiaries, Restricted
Payments will not include (a) any payment described in clause (i), (ii) or (iii)
above made to the Company or any of its Restricted Subsidiaries which are Wholly
Owned Subsidiaries by any of the Company's Subsidiaries, or (b) any purchase,
redemption, retirement or other acquisition for value of Indebtedness or Capital
Stock of such Person or its Subsidiaries if the consideration therefor consists
solely of Capital Stock (other than Disqualified Stock) of such Person.
"RESTRICTED SUBSIDIARY" means each of the Subsidiaries of the Company which
is not an Unrestricted Subsidiary.
"SECURITY REGISTER" is a register of the Notes and of their transfer and
exchange kept by the Registrar.
"SUBSIDIARY" of any Person means any (i) corporation of which at least a
majority of the aggregate voting power of all classes of the Common Equity is
directly or indirectly beneficially owned by such Person, and (ii) any entity
other than a corporation of which such Person, directly or indirectly,
beneficially owns at least a majority of the Common Equity.
"SUBSIDIARY GUARANTEE" means the guarantee of the Notes by each Subsidiary
Guarantor under the Indenture.
"SUBSIDIARY GUARANTORS" means each of (i) Beazer Homes Corp., a Tennessee
corporation, Beazer/ Squires Realty, Inc., a North Carolina corporation, Beazer
Homes Sales Arizona Inc., a Delaware corporation, Beazer Realty Corp., a Georgia
corporation, Panitz Homes Realty, Inc., a Florida corporation, Beazer Mortgage
Corporation, a Delaware corporation, Beazer Homes Holdings Corp., a Delaware
corporation, Beazer Homes Texas Holdings, Inc., a Delaware corporation and
Beazer Homes Texas, L.P., a Delaware limited partnership and (ii) each of the
Company's Subsidiaries that becomes a guarantor of the Notes pursuant to the
provisions of the Indenture.
"TRUST OFFICER" means any vice president, trust officer or other authorized
person of the Trustee assigned by the Trustee to administer its corporate trust
matters.
"TRUSTEE" means the party named as such until a successor replaces such
party in accordance with the applicable provisions of the Indenture and
thereafter means the successor trustee serving under the Indenture.
"UNRESTRICTED SUBSIDIARY" means United Home Insurance Corp. and each of the
Subsidiaries of the Company so designated by a resolution adopted by the Board
of Directors of the Company as provided below and PROVIDED that (a) neither the
Company nor any of its other Subsidiaries (other than Unrestricted Subsidiaries)
(1) provides any direct or indirect credit support for any Indebtedness of such
Subsidiary (including any undertaking, agreement or instrument evidencing such
Indebtedness) or (2) is directly or indirectly liable for any Indebtedness of
such Subsidiary, (b) the creditors with respect to Indebtedness for borrowed
money of such Subsidiary have agreed in writing that they have no recourse,
direct or indirect, to the Company or any other Subsidiary of the Company (other
than Unrestricted Subsidiaries), including, without limitation, recourse with
respect to the payment of principal or interest on any Indebtedness of such
Subsidiary and (c) no default with respect to any Indebtedness of such
Subsidiary (including any right which the holders thereof may have to take
enforcement action against such Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Company and of its
other Subsidiaries (other than other Unrestricted Subsidiaries), to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity. The Board of
63
Directors of the Company may designate an Unrestricted Subsidiary to be a
Restricted Subsidiary; PROVIDED that (i) any such redesignation will be deemed
to be an Incurrence by the Company and its Restricted Subsidiaries of the
Indebtedness (if any) of such redesignated Subsidiary for purposes of the
"Limitations on Additional Indebtedness" covenant set forth in the Indenture as
of the date of such redesignation, (ii) immediately after giving effect to such
redesignation and the Incurrence of any such additional Indebtedness, the
Company and its Restricted Subsidiaries could incur $1.00 of additional
Indebtedness under the Consolidated Fixed Charge Coverage Ratio contained in the
"Limitations on Additional Indebtedness" covenant set forth in the Indenture and
(iii) the Liens of such Unrestricted Subsidiary could then be incurred in
accordance with the "Limitation on Liens" covenant set forth in the Indenture as
of the date of such redesignation. Subject to the foregoing, the Board of
Directors of the Company also may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary; provided that (i) all previous Investments by the
Company and its Restricted Subsidiaries in such Restricted Subsidiary (net of
any returns previously paid on such Investments) will be deemed to be Restricted
Payments at the time of such designation and will reduce the amount available
for Restricted Payments under the "Limitations on Restricted Payments" covenant
set forth in the Indenture, (ii) immediately after giving effect to such
designation and reduction of amounts available for Restricted Payments under the
"Limitations on Restricted Payments" covenant set forth in the Indenture, the
Company and its Restricted Subsidiaries could incur $1.00 of additional
Indebtedness under the Consolidated Fixed Charge Coverage Ratio contained in the
"Limitations on Additional Indebtedness" covenant set forth in the Indenture and
(iii) no Default or Event of Default shall have occurred or be continuing. Any
such designation or redesignation by the Board of Directors of the Company will
be evidenced to the Trustee by the filing with the Trustee of a certified copy
of the resolution of the Board of Directors of the Company giving effect to such
designation or redesignation and an Officers' Certificate certifying that such
designation or redesignation complied with the foregoing conditions and setting
forth the underlying calculations.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness
or portion thereof, at any date, the number of years obtained by dividing (i)
the sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including, without limitation, payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment
by (ii) the sum of all such payments described in clause (a) above.
"WHOLLY OWNED SUBSIDIARY" of any Person means (i) a Subsidiary, of which 100
percent of the Common Equity (except for directors' qualifying shares or certain
minority interests owned by other Persons solely due to local law requirements
that there be more than one stockholder, but which interest is not in excess of
what is required for such purpose) is owned directly by such Person or through
one or more other Wholly Owned Subsidiaries of such Person, or (ii) any entity
other than a corporation in which such Person, directly or indirectly, owns all
of the Common Equity of such entity.
"WORKING CAPITAL FACILITIES" means, collectively, the Bank Credit Facility
and one or more other facilities among the Company, as borrower thereunder, any
Subsidiary Guarantor and one or more lenders pursuant to which the Company may
Incur Indebtedness for working capital purposes or to finance the acquisition,
holding or development of property by the Company and the Restricted
Subsidiaries (including the financing of any related interest reserve), as any
such facility may be amended, restated, supplemented or otherwise modified from
time to time, and includes any agreement extending the maturity of, or
restructuring (including, without limitation, the inclusion of additional
borrowers thereunder that are Unrestricted Subsidiaries), all or any portion of
the Indebtedness under such facility or any successor facilities and includes
any facility with one or more lenders refinancing or replacing all or any
portion of the Indebtedness under such facility or any successor facility.
64
CERTAIN COVENANTS
DISPOSITION OF PROCEEDS OF ASSET SALES. The Indenture provides that the
Company will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, make any Asset Sale unless (i) the Company or the Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Sale at least equal to the Fair Market Value for the shares or assets sold or
otherwise disposed of; provided that the aggregate Fair Market Value of the
consideration received from any Asset Sale that is not in the form of cash or
cash equivalents (in U.S. dollars or freely convertible into U.S. dollars) will
not, when aggregated with the Fair Market Value of all other noncash
consideration received by the Company and its Restricted Subsidiaries from all
previous Asset Sales since the date of the Indenture that has not been converted
into cash or cash equivalents (in U.S. dollars or freely convertible into U.S.
dollars), exceed five percent of the Consolidated Tangible Assets of the Company
at the time of the Asset Sale under consideration, and (ii) the Company will
apply or will cause one or more of its Restricted Subsidiaries to apply an
amount equal to the aggregate Net Proceeds received by the Company or any
Restricted Subsidiary from all Asset Sales occurring subsequent to the date of
the Indenture as follows: (A) to repay any outstanding Indebtedness of the
Company that is not subordinated to the Notes or other Indebtedness of the
Company, or to the payment of any Indebtedness of any Restricted Subsidiary that
is not subordinated to the Subsidiary Guarantee of such Restricted Subsidiary,
in each case within one year after such Asset Sale; or (B) to acquire properties
and assets that will be used in the businesses of the Company and its Restricted
Subsidiaries existing on the date of the Indenture within one year after such
Asset Sale, PROVIDED, HOWEVER, that (x) in the case of applications contemplated
by clause (ii)(A) the payment of such Indebtedness will result in a permanent
reduction in committed amounts, if any, under the Indebtedness repaid at least
equal to the amount of the payment made, (y) in the case of applications
contemplated by clause (ii)(B), the Board of Directors has, within such one year
period, adopted in good faith a resolution committing such Net Proceeds to such
use and (z) none of such Net Proceeds shall be used to make any Restricted
Payment. The amount of such Net Proceeds neither used to repay the Indebtedness
described above nor used or invested as set forth in the preceding sentence
constitutes "Excess Proceeds." Notwithstanding the above, any Asset Sale that is
subject to the "Limitations on Mergers and Consolidations" covenant set forth in
the Indenture will not be subject to the "Disposition of Proceeds of Asset
Sales" covenant set forth in the Indenture.
The Indenture also provides that, notwithstanding the foregoing, to the
extent the Company or any of its Restricted Subsidiaries receives securities or
other noncash property or assets as proceeds of an Asset Sale, the Company will
not be required to make any application of such noncash proceeds required by
clause (a) of the "Disposition of Proceeds of Asset Sale" covenant set forth in
the Indenture until it receives cash or cash equivalent proceeds from a sale,
repayment, exchange, redemption or retirement of or extraordinary dividend or
return of capital on such noncash property. Any amounts deferred pursuant to the
preceding sentence will be applied in accordance with clause (a) of the
"Disposition of Proceeds of Asset Sale" covenant set forth in the Indenture when
cash or cash equivalent proceeds are thereafter received from a sale, repayment,
exchange, redemption or retirement of or extraordinary dividend or return of
capital on such noncash property.
The Indenture also provides that, when the aggregate amount of Excess
Proceeds equals $10,000,000 or more, the Company will so notify the Trustee in
writing by delivery of an Officers' Certificate and will offer to purchase from
all Holders (an "Excess Proceeds Offer"), and will purchase from Holders
accepting such Excess Proceeds Offer on the date fixed for the closing of such
Excess Proceeds Offer (the "Asset Sale Offer Date"), the maximum principal
amount (expressed as a multiple of $1,000) of Notes plus accrued and unpaid
interest thereon, if any, to the Asset Sale Offer Date that may be purchased and
paid, as the case may be, out of the Excess Proceeds, at an offer price (the
"Asset Sale Offer Price") in cash in an amount equal to 100 percent of the
principal amount thereof plus accrued and unpaid interest, if any, to the Asset
Sale Offer Date, in accordance with the procedures set forth in the "Disposition
of Proceeds of Asset Sale" covenant in the Indenture. To the extent that the
aggregate amount of Notes tendered
65
pursuant to an Excess Proceeds Offer is less than the Excess Proceeds relating
thereto, then the Company may use such Excess Proceeds, or a portion thereof,
for general corporate purposes in the business of the Company and its Restricted
Subsidiaries existing on the date of the Indenture. Upon completion of an Excess
Proceeds Offer, the amount of Excess Proceeds will be reset at zero.
In addition, the Indenture provides that, within 30 days after the date on
which the amount of Excess Proceeds equals $10,000,000 or more, the Company
(with notice to the Trustee) or the Trustee at the Company's request (and at the
expense of the Company) will send or cause to be sent by first-class mail, to
all Persons who were Holders on the date such Excess Proceeds equaled
$10,000,000, at their respective addresses appearing in the Security Register, a
notice of such occurrence and of such Holders' rights arising as a result
thereof. The Indenture also provides that:
(a) In the event the aggregate principal amount of Notes surrendered by
Holders together with accrued interest thereon exceeds the amount of Excess
Proceeds, the Company will select the Notes to be purchased on a pro rata
basis from all Notes so surrendered, with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, will be purchased. To the extent that the Excess
Proceeds remaining are less than $1,000, the Company may use such Excess
Proceeds for general corporate purposes. Holders whose Notes are purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered.
(b) Not later than one Business Day after the Asset Sale Offer Date in
connection with which the Excess Proceeds Offer is being made, the Company
will (i) accept for payment Notes or portions thereof tendered pursuant to
the Excess Proceeds Offer (on a pro rata basis if required), (ii) deposit
with the Paying Agent money sufficient, in immediately available funds, to
pay the purchase price of all Notes or portions thereof so accepted and
(iii) deliver to the Paying Agent an Officers' Certificate identifying the
Notes or portions thereof accepted for payment by the Company. The Paying
Agent will promptly mail or deliver to Holders so accepted payment in an
amount equal to the Asset Sale Offer Price of the Notes purchased from each
such Holder, and the Company will execute and upon receipt of an Officers'
Certificate of the Company the Trustee will promptly authenticate and mail
or deliver to such Holder a new Note equal in principal amount to any
unpurchased portion of the Note surrendered. Any Notes not so accepted will
be promptly mailed or delivered by the Paying Agent at the Company's expense
to the Holder thereof. The Company will publicly announce the results of the
Excess Proceeds Offer promptly after the Asset Sale Offer Date.
(c) Any Excess Proceeds Offer will be conducted by the Company in
compliance with applicable law, including, without limitation, Section 14(e)
of the Exchange Act and Rule 14e-1 thereunder, if applicable.
(d) Whenever Excess Proceeds are received by the Company, and prior to
the allocation of such Excess Proceeds pursuant to this covenant, such
Excess Proceeds will be set aside by the Company in a separate account to be
held in trust for the benefit of the Holders; PROVIDED, HOWEVER, that in the
event the Company will be unable to set aside such Excess Proceeds in a
separate account because of provisions of applicable law or of the Working
Capital Facilities, the Company will not be required to set aside such
Excess Proceeds.
66
(e) Notwithstanding the foregoing, an Excess Proceeds Offer may be made
by one or more Restricted Subsidiaries in lieu of the Company.
There can be no assurance that sufficient funds will be available at the
time of an Excess Proceeds Offer to make any required repurchases. The Company's
failure to make or to cause one or more Restricted Subsidiaries to make any
required repurchases in the event of an Excess Proceeds Offer will create an
Event of Default under the Indenture.
LIMITATIONS ON RESTRICTED PAYMENTS. The Indenture provides that the Company
will not, and will not cause or permit any of its Restricted Subsidiaries to,
make any Restricted Payment, directly or indirectly, after the date of the
Indenture if at the time of such Restricted Payment:
(i) the amount of such proposed Restricted Payment (the amount of such
Restricted Payment, if other than in cash, will be determined in good faith
by a majority of the disinterested members of the Board of Directors of the
Company), when added to the aggregate amount of all Restricted Payments
declared or made after the date of the Indenture, exceeds the sum of: (1)
$50 million, PLUS (2) 50 percent of the Company's Consolidated Net Income
accrued during the period (taken as a single period) commencing January 1,
1998 and ending on the last day of the fiscal quarter immediately preceding
the fiscal quarter in which the Restricted Payment is to occur (or, if such
aggregate Consolidated Net Income is a deficit, minus 100 percent of such
aggregate deficit), PLUS (3) the net cash proceeds derived from the issuance
and sale of Capital Stock of the Company and its Restricted Subsidiaries
that is not Disqualified Stock (other than a sale to a Subsidiary of the
Company) after the date of the Indenture, PLUS (4) 100 percent of the
principal amount of, or, if issued at a discount, the accreted value of, any
Indebtedness of the Company or a Restricted Subsidiary which is issued
(other than to a Subsidiary of the Company) after the date of the Indenture
that is converted into or exchanged for Capital Stock of the Company that is
not Disqualified Stock, PLUS (5) 100 percent of the aggregate amounts
received by the Company or any Restricted Subsidiary from the sale,
disposition or liquidation (including by way of dividends) of any Investment
(other than to any Subsidiary of the Company and other than to the extent
sold, disposed of or liquidated with recourse to the Company or any of its
Subsidiaries or to any of their respective properties or assets) but only to
the extent (x) not included in clause (2) above and (y) that the making of
such Investment constituted a permitted Restricted Investment, PLUS (6) 100
percent of the principal amount of, or if issued at a discount, the accreted
value of, any Indebtedness or other obligation that is the subject of a
guarantee by the Company which is released (other than due to a payment on
such guarantee) after the date of the Indenture, but only to the extent that
such guarantee constituted a permitted Restricted Payment; or
(ii) the Company would be unable to incur $1.00 of additional
Indebtedness under the Consolidated Fixed Charge Coverage Ratio contained in
the "Limitations on Additional Indebtedness" covenant set forth in the
Indenture; or
(iii) a Default or Event of Default has occurred and is continuing or
occurs as a consequence thereof.
Notwithstanding the foregoing, the provisions of the "Limitation on
Restricted Payments" covenant set forth in the Indenture will not prevent:
(i) the payment of any dividend within 60 days after the date of declaration
thereof if the payment thereof would have complied with the limitations of
the Indenture on the date of declaration, PROVIDED that (x) such dividend
will be deemed to have been paid as of its date of declaration for the
purposes of this covenant and (y) at the time of payment of such dividend no
other Default or Event of Default shall have occurred and be continuing or
would result therefrom; (ii) the retirement of shares of the Company's
Capital Stock or the Company's or a Restricted Subsidiary of the Company's
Indebtedness for, or out of the net proceeds of a substantially concurrent
sale (other than a sale to a Subsidiary of the Company) of, other shares of
its Capital Stock (other than Disqualified Stock), PROVIDED that the
proceeds of any such sale will be excluded in any computation made under
clause (3) above; (iii) the redemption, repurchase, defeasance or retirement
67
for value of Indebtedness, including premium, if any, with the proceeds of
Refinancing Indebtedness; (iv) payments or distributions pursuant to or in
connection with a merger, consolidation or transfer of assets that complies
with the provisions of the Indenture applicable to mergers, consolidations
and transfers of all or substantially all of the property and assets of the
Company or any Guarantor or (v) Investments in the Joint Venture Entity in
an aggregate amount not to exceed $6.0 million.
LIMITATIONS ON ADDITIONAL INDEBTEDNESS. The Indenture provides that the
Company will not, and will not cause or permit any of its Subsidiaries, directly
or indirectly, to, Incur any Indebtedness (other than Indebtedness between the
Company and its Restricted Subsidiaries which are Wholly Owned Subsidiaries or
among such Restricted Subsidiaries which are Wholly Owned Subsidiaries)
including Acquisition Indebtedness, unless, after giving effect thereto and the
application of the proceeds therefrom, either (i) the Company's Consolidated
Fixed Charge Coverage Ratio on the date thereof would be at least 2.0 to 1.0 or
(ii) the ratio of Indebtedness of the Company and the Restricted Subsidiaries to
Consolidated Tangible Net Worth is less than 2.25 to 1.
Notwithstanding the foregoing, the provisions of the Indenture will not
prevent: (i) the Company from Incurring (A) Refinancing Indebtedness, (B)
Non-Recourse Indebtedness, (C) Indebtedness evidenced by the Notes issued on the
Issue Date or the Exchange Notes, or (D) Indebtedness Incurred under Working
Capital Facilities not to exceed the greater of $75 million or 15% of
Consolidated Tangible Assets, (ii) Unrestricted Subsidiaries from Incurring
Indebtedness, (iii) any Subsidiary Guarantee of Indebtedness of the Company
under the Notes, (iv) the Company and its Restricted Subsidiaries from Incurring
Indebtedness under any deposits made to secure performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, progress statements,
government contracts and other obligations of like nature (exclusive of the
obligation for the payment of borrowed money), and (v) the Company and its
Restricted Subsidiaries from guaranteeing Indebtedness of the Joint Venture
Entity in an amount not to exceed $6.0 million less the amount of all other
Investments made by the Company and its Restricted Subsidiaries in the Joint
Venture Entity, in each case Incurred in the ordinary course of business of the
Company or the Restricted Subsidiary.
The Company shall not, and the Company will not cause or permit any
Subsidiary Guarantor that is a Restricted Subsidiary to, directly or indirectly,
in any event Incur any Indebtedness that purports to be by its terms (or by the
terms of any agreement governing such Indebtedness) subordinated to any other
Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be,
unless such Indebtedness is also by its terms (or by the terms of any agreement
governing such Indebtedness) made expressly subordinated to the Notes or the
Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, to the
same extent and in the same manner as such Indebtedness is subordinated to such
other Indebtedness of the Company or such Subsidiary Guarantor, as the case may
be.
For purposes of determining compliance with this "Limitations on Additional
Indebtedness" covenant, in the event an item of Indebtedness meets the criteria
of more than one of the types of Indebtedness described in the above clauses of
this covenant, the Company, in its sole discretion, shall classify such item of
Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses.
RESTRICTIONS ON RESTRICTED SUBSIDIARY INDEBTEDNESS. In addition to the
limitations provided for under the covenant, "Limitation on Additional
Indebtedness", the Indenture provides that the Company will not permit any
Restricted Subsidiaries to, directly or indirectly, Incur any additional
Indebtedness after the date of the Indenture other than: (i) any guarantee of
Indebtedness of the Company permitted to be Incurred under the Indenture (other
than Non-Recourse Indebtedness), (ii) Refinancing Indebtedness, (iii)
Non-Recourse Indebtedness, (iv) Acquisition Indebtedness not to exceed $10
million aggregate principal amount at any one time outstanding, (v) Indebtedness
to the Company for so long as held by the Company; provided that such
Indebtedness is subordinated to any Subsidiary Guarantee, (vi) Indebtedness to
another Restricted Subsidiary which is a Wholly Owned Subsidiary so long as held
by such Restricted
68
Subsidiary; provided that such Indebtedness is subordinated to any Subsidiary
Guarantee, (vii) any Subsidiary Guarantee of Indebtedness of the Company under
the Notes and (viii) any deposits made to secure performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, progress statements,
government contracts, and other obligations of like nature (exclusive of the
obligation for the payment of borrowed money), in each case Incurred in the
ordinary course of business of the Restricted Subsidiary, consistent with past
practice.
LIMITATIONS AND RESTRICTIONS ON ISSUANCE OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES. The Indenture provides that the Company will not permit any
Restricted Subsidiary to issue, or permit to be outstanding at any time,
Preferred Stock or any other Capital Stock constituting Disqualified Stock other
than any such Capital Stock issued to or held by the Company or any Restricted
Subsidiary of the Company which is a Wholly Owned Subsidiary.
CHANGE OF CONTROL. The Indenture provides that, following the occurrence of
any Change of Control, the Company will so notify the Trustee in writing by
delivery of an Officers' Certificate and will offer to purchase (a "Change of
Control Offer") from all Holders, and will purchase from Holders accepting such
Change of Control Offer on the date fixed for the closing of such Change of
Control Offer (the "Change of Control Payment Date"), the outstanding principal
amount of Notes at an offer price (the "Change of Control Price") in cash in an
amount equal to 101 percent of the aggregate principal amount thereof plus
accrued and unpaid interest, if any, to the Change of Control Payment Date in
accordance with the procedures set forth in the "Change of Control" covenant of
the Indenture.
In addition, the Indenture provides that, within 30 days after the date on
which a Change of Control occurs, the Company (with Notice to the Trustee) or
the Trustee at the Company's request (and at the expense of the Company) will
send or cause to be sent by first-class mail, postage pre-paid, to all Persons
who were Holders on the date of the Change of Control at their respective
addresses appearing in the Security Register, a notice of such occurrence and of
such Holder's rights arising as a result thereof.
The Indenture also provides that:
(a) In the event of a Change of Control Offer, the Company will only be
required to accept Notes in denominations of $1,000 or integral multiples
thereof.
(b) Not later than one Business Day after the Change of Control Payment
Date in connection with which the Change of Control Offer is being made, the
Company will (i) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent
money sufficient, in immediately available funds, to pay the purchase price
of all Notes or portions thereof so accepted and (iii) deliver to the Paying
Agent an Officers' Certificate identifying the Notes or portions thereof
accepted for payment by the Company. The Paying Agent will promptly mail or
deliver to Holders of Notes so accepted payment in an amount equal to the
Change of Control Price of the Notes purchased from each such Holder, and
the Company will execute and, upon receipt of an Officer's Certificate of
the Company, the Trustee will promptly authenticate and mail or deliver to
such Holder a new Note equal in principal amount to any unpurchased portion
of the Note surrendered. Any Notes not so accepted will be promptly mailed
or delivered by the Paying Agent at the Company's expense to the Holder
thereof. The Company will publicly announce the results of the Change of
Control Offer promptly after the Change of Control Payment Date.
(c) Any Change of Control Offer will be conducted by the Company in
compliance with applicable law, including, without limitation, Section 14(e)
of the Exchange Act and Rule 14e-1 thereunder.
The Company may enter into other arrangements or Incur other Indebtedness
with similar change of control obligations. There can be no assurance that
sufficient funds will be available at the time of a Change of Control to make
any required repurchases. The Company's failure to make any required repurchases
in the event of a Change of Control Offer will create an Event of Default under
the Indenture.
69
No quantitative or other established meaning has been given to the phrase
"all or substantially all" (which appears in the definition of Change of
Control) by courts which have interpreted this phrase in various contexts. In
interpreting this phrase, courts make a subjective determination as to the
portion of assets conveyed, considering such factors as the value of the assets
conveyed and the proportion of an entity's income derived from the assets
conveyed. Accordingly, there may be uncertainty as to whether a Holder of Notes
can determine whether a Change of Control has occurred and exercise any remedies
such Holder may have upon a Change of Control.
LIMITATIONS ON TRANSACTIONS WITH STOCKHOLDERS AND AFFILIATES. The Indenture
provides that the Company will not, and will not permit any of its Subsidiaries
to, make any Investment, loan, advance, guarantee or capital contribution to or
for the benefit of, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or for the benefit of, or purchase or lease any
property or assets from, or enter into or amend any contract, agreement or
understanding with, or for the benefit of, (i) any Affiliate of the Company or
any Affiliate of the Company's Subsidiaries or (ii) any Person (or any Affiliate
of such person) holding 10 percent or more of the Common Equity of the Company
or any of its Subsidiaries (each an "Affiliate Transaction"), except on terms
that are no less favorable to the Company or the relevant Subsidiary, as the
case may be, than those that could have been obtained in a comparable
transaction on an arm's length basis from a person that is not an Affiliate.
The Indenture also provides that the Company will not, and will not permit
any of its Subsidiaries to, enter into any Affiliate Transaction involving or
having a value of more than $1 million, unless, in each case, such Affiliate
Transaction has been approved by a majority of the disinterested members of the
Company's Board of Directors.
The Indenture also provides that the Company will not, and will not permit
any of its Subsidiaries to, enter into an Affiliate Transaction involving or
having a value of more than $5 million unless the Company has delivered to the
Trustee an opinion of an Independent Financial Advisor to the effect that the
transaction is fair to the Company or the relevant Subsidiary, as the case may
be, from a financial point of view.
The Indenture also provides that, notwithstanding the foregoing, an
Affiliate Transaction will not include (i) any contract, agreement or
understanding with, or for the benefit of, or plan for the benefit of, employees
of the Company or its Subsidiaries (in their capacity as such) that has been
approved by the Company's Board of Directors, (ii) Capital Stock issuances to
members of the Board of Directors, officers and employees, of the Company or its
Subsidiaries pursuant to plans approved by the stockholders of the Company,
(iii) any Restricted Payment otherwise permitted under the "Limitations on
Restricted Payments" covenant set forth in the Indenture, (iv) any transaction
between the Company and a Restricted Subsidiary or a Restricted Subsidiary and
another Restricted Subsidiary, (v) any transaction pursuant to the tax sharing
agreement, the agreement with Beazer Homes Ltd. regarding use of name and the
cross-indemnity agreement, in each case with the Company's former parent or
affiliates, as such agreements are in effect on the date of the Indenture or
(vi) any transactions pursuant to the joint venture agreement with the Joint
Venture Entity, as such agreement is in effect on the date of the Indenture.
LIMITATIONS ON LIENS. The Indenture provides that the Company will not, and
will not permit any of its Restricted Subsidiaries to, create, incur, assume or
suffer to exist any Liens, other than Permitted Liens, on any of its or their
assets, property, income or profits therefrom unless contemporaneously therewith
or prior thereto all payments due under the Indenture and the Notes are secured
on an equal and ratable basis with the obligation or liability so secured until
such time as such obligation or liability is no longer secured by a Lien. The
Indenture also provides that no Liens will be permitted to be created or
suffered to exist on any Indebtedness from the Company in favor of any
Restricted Subsidiary and that such Indebtedness will not be permitted to be
sold, disposed of or otherwise transferred.
70
LIMITATIONS ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED
SUBSIDIARIES. The Indenture provides that the Company will not, and will not
permit any of its Restricted Subsidiaries to, create, assume or otherwise cause
or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Restricted Subsidiary to (i) pay dividends or make any
other distributions on its Capital Stock or any other interest or participation
in, or measured by, its profits, owned by the Company or any of its other
Restricted Subsidiaries, or pay interest on or principal of any Indebtedness
owed to the Company or any of its other Restricted Subsidiaries, (ii) make loans
or advances to the Company or any of its other Restricted Subsidiaries, or (iii)
transfer any of its properties or assets to the Company or any of its other
Restricted Subsidiaries, except for encumbrances or restrictions existing under
or by reason of (a) applicable law, (b) covenants or restrictions contained in
the agreements evidencing Existing Indebtedness as in effect on the date of the
Indenture, (c) any restrictions or encumbrances arising under Acquisition
Indebtedness; PROVIDED, that such encumbrance or restriction applies only to the
obligor on such Indebtedness and its Subsidiaries and that such Acquisition
Indebtedness was not incurred by the Company or any of its Subsidiaries or by
the Person being acquired in connection with or in anticipation of such
acquisition, (d) any restrictions or encumbrances arising in connection with
Refinancing Indebtedness; provided that any restrictions and encumbrances of the
type described in this clause (d) that arise under such Refinancing Indebtedness
are not more restrictive than those under the agreement creating or evidencing
the Indebtedness being refunded, refinanced, replaced or extended, (e) any
agreement restricting the sale or other disposition of property securing
Indebtedness permitted by the Indenture if such agreement does not expressly
restrict the ability of a Subsidiary of the Company to pay dividends or make
loans or advances, and (f) reasonable and customary borrowing base covenants set
forth in agreements evidencing Indebtedness otherwise permitted by the
Indenture, which covenants restrict or limit the distribution of revenues or
sale proceeds from real estate or a real estate project based upon the amount of
indebtedness outstanding on such real estate or real estate project and the
value of some or all of the remaining real estate or the project's remaining
assets, and customary provisions restricting subletting or assignment of any
lease governing a leasehold interest of the Company or any of its Restricted
Subsidiaries.
MAINTENANCE OF CONSOLIDATED TANGIBLE NET WORTH. The Indenture provides
that:
(a) In the event that the Consolidated Tangible Net Worth of the Company
is less than $85
million at the end of any two consecutive fiscal quarters (the last day of
the second fiscal quarter being referred to in the Indenture as the
"Deficiency Date"), within 30 days after the end of each such period, the
Company will so notify the Trustee in writing by delivery of an Officers'
Certificate and will offer to purchase from all Holders (a "Net Worth
Offer"), and will purchase from Holders accepting such Net Worth Offer on
the date fixed for the closing of such Net Worth Offer (the "Net Worth Offer
Date"), 10 percent of the original outstanding principal amount of the Notes
(the "Net Worth Amount") at an offer price (the "Net Worth Offer Price") in
cash in an amount equal to 100 percent of the aggregate principal amount
thereof plus accrued and unpaid interest, if any, to the Net Worth Offer
Date. To the extent that the aggregate amount of Notes tendered pursuant to
a Net Worth Offer is less than the Net Worth Amount relating thereto, then
the Company may use the excess of the Net Worth Amount over the amount of
Notes tendered, or a portion thereof, for general corporate purposes. In no
event shall the Company's failure to meet the Consolidated Tangible Net
Worth threshold at the end of any fiscal quarter be counted toward the
making of more than one Net Worth Offer. The Company may reduce the
principal amount of Notes to be purchased pursuant to the Net Worth Offer by
subtracting 100 percent of the principal amount (excluding premium) of Notes
acquired by the Company or any Wholly Owned Subsidiary subsequent to the
Deficiency Date and surrendered for cancellation through purchase,
redemption (other than pursuant to this covenant) or exchange, and that were
not previously used as a credit against any obligation to repurchase Notes
pursuant to this covenant.
(b) In the event that the Consolidated Tangible Net Worth of the Company
is less than $85 million at the end of any two consecutive fiscal quarters,
within 30 days after the end of such period,
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the Company (with notice to the Trustee) or the Trustee at the Company's
request (and at the expense of the Company) will send or cause to be sent by
first-class mail, postage pre-paid, to all Persons who were Holders on the
date of the end of the second such consecutive fiscal quarter, at their
respective addresses appearing in the Security Register, a notice of such
occurrence and of each Holder's rights arising as a result thereof. Such
notice will contain all instructions and materials necessary to enable
Holders to tender their Notes to the Company.
(c) In the event that the aggregate principal amount of Notes
surrendered by Holders exceeds the Net Worth Amount, the Company will select
the Notes to be purchased on a pro rata basis from all Notes so surrendered,
with such adjustments as may be deemed appropriate by the Company so that
only Notes in denominations of $1,000, or integral multiples thereof, will
be purchased. To the extent that the Net Worth Amount remaining is less than
$1,000, the Company may use such Net Worth Amount for general corporate
purposes. Holders whose Notes are purchased only in part will be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered.
(d) Not later than one Business Day after the Net Worth Offer Date in
connection with which the Net Worth Offer is being made, the Company will
(i) accept for payment Notes or portions thereof tendered pursuant to the
Net Worth Offer (on a pro rata basis if required pursuant to the
"Maintenance of Consolidated Tangible Net Worth" covenant set forth in the
Indenture), (ii) deposit with the Paying Agent money sufficient, in
immediately available funds, to pay the purchase price of all Notes or
portions thereof so accepted and (iii) deliver to the Paying Agent an
Officers' Certificate identifying the Notes or portions thereof accepted for
payment by the Company. The Paying Agent will promptly mail or deliver to
Holders of Notes so accepted payment in an amount equal to the Net Worth
Offer Price of the Notes purchased from each such Holder, and the Company
will execute and the Trustee will promptly authenticate and mail or deliver
to such Holder a new Note equal in principal amount to any unpurchased
portion of the Note surrendered. Any Notes not so accepted will be promptly
mailed or delivered by the Paying Agent at the Company's expense to the
Holder thereof. The Company will publicly announce the results of the Net
Worth Offer promptly after the Net Worth Offer Date.
(e) Any Net Worth Offer will be conducted by the Company in compliance
with applicable law, including, without limitation, Section 14(e) of the
Exchange Act and Rule 14e-1 thereunder, if applicable.
There can be no assurance that sufficient funds will be available at the
time of a Net Worth Offer to make any required repurchases. The Company's
failure to make any required repurchases in the event of a Net Worth Offer will
create an Event of Default under the Indenture.
LIMITATIONS ON MERGERS AND CONSOLIDATIONS. The Indenture provides that
neither the Company nor any Subsidiary Guarantor will consolidate or merge with
or into, or sell, lease, convey or otherwise dispose of all or substantially all
of its assets (including, without limitation, by way of liquidation or
dissolution), or assign any of its obligations under the Notes, the Guarantees
or the Indenture (as an entirety or substantially in one transaction or series
of related transactions), to any Person or permit any of its Restricted
Subsidiaries to do any of the foregoing (in each case other than with the
Company or another Wholly Owned Restricted Subsidiary) unless: (i) the Person
formed by or surviving such consolidation or merger (if other than the Company
or such Subsidiary Guarantor, as the case may be), or to which such sale, lease,
conveyance or other disposition or assignment will be made (collectively, the
"Successor"), is a solvent corporation or other legal entity organized and
existing under the laws of the United States or any state thereof or the
District of Columbia, and the Successor assumes by supplemental indenture in a
form reasonably satisfactory to the Trustee all of the obligations of the
Company or such Subsidiary Guarantor, as the case may be, under the Notes or
such Subsidiary Guarantor's Subsidiary Guarantee, as the case may be, and the
Indenture, (ii) immediately after giving effect to such transaction, no Default
or Event of Default has occurred and is continuing, (iii) immediately after
giving effect to such transaction and the use
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of any net proceeds therefrom, on a pro forma basis, the Consolidated Tangible
Net Worth of the Company or the Successor (in the case of a transaction
involving the Company), as the case may be, would be at least equal to the
Consolidated Tangible Net Worth of the Company immediately prior to such
transaction and (iv) immediately after giving effect to such transaction and the
use of any net proceeds therefrom, on a pro forma basis, the Consolidated Fixed
Charge Coverage Ratio of the Company or the Successor (in the case of a
transaction involving the Company), as the case may be, would be such that the
Company or the Successor (in the case of a transaction involving the Company),
as the case may be, would be entitled to Incur at least $1.00 of additional
Indebtedness under such Consolidated Fixed Charge Coverage Ratio test in the
"Limitations on Additional Indebtedness" covenant set forth in the Indenture.
The foregoing provisions shall not apply to a transaction involving the
consolidation or merger of a Subsidiary Guarantor with or into another person,
or the sale, lease, conveyance or other disposition of all or substantially all
of the assets of such Subsidiary Guarantor, that results in such Subsidiary
Guarantor being released from its Subsidiary Guarantee as provided under "The
Subsidiary Guarantees" above.
No quantitative or other established meaning has been given to the phrase
"all or substantially all" by courts which have interpreted this phrase in
various contexts. In interpreting this phrase, courts make a subjective
determination as to the portion of assets conveyed, considering such factors as
the value of the assets conveyed and the proportion of an entity's income
derived from the assets conveyed. Accordingly, there may be uncertainty as to
whether a Holder of Notes can determine whether the Company has sold, leased,
conveyed or otherwise disposed of all or substantially all of its assets and
exercise any remedies such Holder may have upon the occurrence of any such
transaction.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture:
(i) the failure by the Company to pay interest on any Note when the same
becomes due and payable and the continuance of any such failure for a period
of 30 days;
(ii) the failure by the Company to pay the principal or premium of any
Note when the same becomes due and payable at maturity, upon acceleration or
otherwise (including the failure to make payment pursuant to a Change of
Control Offer, a Net Worth Offer or an Excess Proceeds Offer);
(iii) the failure by the Company or any of its Subsidiaries to comply
with any of its agreements or covenants in, or provisions of, the Notes, the
Subsidiary Guarantees or the Indenture and such failure continues for the
period and after the notice specified below;
(iv) the acceleration of any Indebtedness (other than Non-Recourse
Indebtedness) of the Company or any of its Subsidiaries that has an
outstanding principal amount of $3 million or more in the aggregate;
(v) the failure by the Company or any of its Subsidiaries to make any
principal or interest payment in respect of Indebtedness (other than
Non-Recourse Indebtedness) of the Company or any of its Subsidiaries with an
outstanding aggregate amount of $3 million or more within five days of such
principal or interest payment becoming due and payable (after giving effect
to any applicable grace period set forth in the documents governing such
Indebtedness);
(vi) a final judgment or judgments that exceed $3 million or more in the
aggregate, for the payment of money, having been entered by a court or
courts of competent jurisdiction against the Company or any of its
Subsidiaries and such judgment or judgments is not satisfied, stayed,
annulled or rescinded within 60 days of being entered;
(vii) the Company or any Material Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case,
73
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(viii) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Material Subsidiary as
debtor in an involuntary case,
(B) appoints a Custodian of the Company or any Material Subsidiary or
a Custodian for all or substantially all of the property of the Company
or any Material Subsidiary, or
(C) orders the liquidation of the Company or any Material Subsidiary
and the order or decree remains unstayed and in effect for 60 days; or
(ix) any Subsidiary Guarantee ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guarantee and
the Indenture) or is declared null and void and unenforceable or found to be
invalid or any Subsidiary Guarantor denies its liability under its
Subsidiary Guarantee (other than by reason of release of a Subsidiary
Guarantor from its Subsidiary Guarantee in accordance with the terms of the
Indenture and the Subsidiary Guarantee).
A Default as described in sub-clause (iii) above will not be deemed an Event
of Default until the Trustee notifies the Company, or the Holders of at least 25
percent in principal amount of the then outstanding Notes notify the Company and
the Trustee, of the Default and the Company does not cure the Default within 60
days after receipt of the notice. The notice must specify the Default, demand
that it be remedied and state that the notice is a "Notice of Default." If such
a Default is cured within such time period, it ceases.
If an Event of Default (other than an Event of Default specified in
sub-clauses (vii) and (viii) above) shall have occurred and be continuing under
the Indenture, the Trustee by notice to the Company, or the Holders of at least
25 percent in principal amount of the Notes then outstanding by notice to the
Company and the Trustee, may declare all Notes to be due and payable
immediately. Upon such declaration of acceleration, the amounts due and payable
on the Notes, as determined pursuant to the provisions of the "Acceleration"
section of the Indenture, will be due and payable immediately. If an Event of
Default with respect to the Company specified in sub-clauses (vii) and (viii)
above occurs, such an amount will IPSO FACTO become and be immediately due and
payable without any declaration, notice or other act on the part of the Trustee
and the Company or any Holder. The Holders of a majority in principal amount of
the Notes then outstanding by written notice to the Trustee and the Company may
waive such Default or Event of Default (other than any Default or Event of
Default in payment of principal or interest) on the Notes under the Indenture.
Holders of a majority in principal amount of the then outstanding Notes may
rescind an acceleration and its consequence (except an acceleration due to
nonpayment of principal or interest on the Notes) if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived.
The Holders may not enforce the provisions of the Indenture, the Notes or
the Subsidiary Guarantees except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in principal amount of the Notes then
outstanding may direct the Trustee in its exercise of any trust or power,
provided, however, that such direction does not conflict with the terms of the
Indenture. The Trustee may withhold from the Holders notice of any continuing
Default or Event of Default (except any Default or Event of Default in payment
of principal or interest on the Notes or that resulted from the failure to
comply with the covenant entitled Change of Control) if the Trustee determines
that withholding such notice is in the Holders' interest.
74
The Company is required to deliver to the Trustee a quarterly statement
regarding compliance with the Indenture, and include in such statement, if any
Officer of the Company is aware of any Default or Event of Default, a statement
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto. In addition, the Company is
required to deliver to the Trustee prompt written notice of the occurrence of
any Default or Event of Default and any other development, financial or
otherwise, which might materially affect its business, properties or affairs or
the ability of the Company to perform its obligations under the Indenture.
REPORTS
The Indenture provides that, as long as any of the Notes are outstanding,
the Company will deliver to the Trustee and mail to each Holder within 15 days
after the filing of the same with the Commission copies of the quarterly and
annual reports and of the information, documents and other reports with respect
to the Company and the Subsidiary Guarantors, if any, which the Company and the
Subsidiary Guarantors may be required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act. The Indenture further provides that,
notwithstanding that neither the Company nor any of the Guarantors may be
required to remain subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, the Company will continue to file with the Commission and
provide the Trustee and Holders with such annual and quarterly reports and such
information, documents and other reports with respect to the Company and the
Subsidiary Guarantors as are required under Sections 13 and 15(d) of the
Exchange Act. If filing of documents by the Company with the Commission as
aforementioned in this paragraph is not permitted under the Exchange Act, the
Company shall promptly upon written notice supply copies of such documents to
any prospective holder. The Company and each Subsidiary Guarantor will also
comply with the other provisions of Section 314(a) of the Trust Indenture Act.
DISCHARGE OF INDENTURE
The Indenture permits the Company and the Subsidiary Guarantors to terminate
all of their respective obligations under the Indenture, other than the
obligation to pay interest on and the principal of the Notes and certain other
obligations, at any time by (i) depositing in trust with the Trustee, under an
irrevocable trust agreement, money or U.S. Government Obligations in an amount
sufficient to pay principal of and interest on the Notes to their maturity or
redemption, as the case may be, and to pay all other sums payable by the Company
and the Subsidiary Guarantors under the Indenture as they become due and (ii)
complying with certain other conditions, including delivery to the Trustee of an
opinion of counsel to the effect that Holders will not recognize income, gain or
loss for federal income tax purposes as a result of the Company's exercise of
such right and will be subject to federal income tax on the same amount and in
the same manner and at the same times as would have been the case otherwise.
In addition, the Indenture permits the Company and the Subsidiary Guarantors
to terminate all of their respective obligations under the Indenture (including
the obligations to pay interest on and the principal of the Notes and certain
other obligations), at any time by (i) depositing in trust with the Trustee,
under an irrevocable trust agreement, money or U.S. Government Obligations in an
amount sufficient (without regard to reinvestment of any interest thereon), in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certificate thereof delivered to the Trustee, to pay
principal of and interest on the Notes to their maturity or redemption, as the
case may be, and to pay all other sums payable by the Company and the Subsidiary
Guarantors under the Indenture as they become due and (ii) complying with
certain other conditions, including delivery to the Trustee of an opinion of
counsel that the Company has received from the Internal Revenue Service a ruling
or that since the date of the Indenture there has been a change in the
applicable federal income tax law, in either case to the effect that Holders
will not recognize income, gain or loss for federal income tax purposes as a
result of the Company's exercise of such right and will be subject to federal
income tax on the same amount and in the same manner and at the same times as
would have been the case otherwise.
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TRANSFER AND EXCHANGE
A Holder will be able to transfer or exchange Notes only in accordance with
the provisions of the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents, and to pay
any taxes and fees required by law or permitted by the Indenture.
AMENDMENT, SUPPLEMENT AND WAIVER
Subject to certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent (which may include consents obtained in connection
with a tender offer or exchange offer for Notes) of the Holders of at least a
majority in principal amount of the Notes then outstanding, and any existing
Default or Event of Default (other than any continuing Default or Event of
Default in the payment of interest on or the principal of the Notes) under, or
compliance with any provision of, the Indenture may be waived with the consent
(which may include consents obtained in connection with a tender offer or
exchange offer for Notes) of the Holders of a majority in principal amount of
the Notes then outstanding. Without the consent of any Holder, the Company, the
Subsidiary Guarantors and the Trustee may amend the Indenture or the Notes or
waive any provision of the Indenture to cure any ambiguity, defect or
inconsistency, to comply with the "Limitations on Mergers and Consolidations"
section set forth in the Indenture; to provide for uncertificated Notes in
addition to certificated Notes; to make any change that does not adversely
affect the legal rights under the Indenture of any Holder; to comply with or
qualify the Indenture under the Trust Indenture Act; or to reflect a Subsidiary
Guarantor ceasing to be liable on the Subsidiary Guarantees because it is no
longer a Subsidiary of the Company.
Without the consent of each Holder affected, the Company may not (i) reduce
the amount of Notes whose Holders must consent to an amendment, supplement or
waiver, (ii) reduce the rate of or change the time for payment of interest,
including default interest, on any Note, (iii) reduce the principal of or change
the fixed maturity of any Note or alter the provisions with respect to
redemption under the "Optional Redemption" section set forth in the Indenture or
with respect to mandatory offers to repurchase Notes pursuant to the
"Disposition of Proceeds of Asset Sales," "Change of Control" and "Maintenance
of Consolidated Tangible Net Worth" covenants set forth in the Indenture, (iv)
make any Note payable in money other than that stated in the Note, (v) make any
change in the "Waiver of Past Defaults and Compliance with Indenture
Provisions", "Rights of Holders to Receive Payment" or, in part, the "With
Consent of Holders" sections set forth in the Indenture, (vi) modify the ranking
or priority of the Notes or any Subsidiary Guarantee, (vii) release any
Subsidiary Guarantor from any of its obligations under its Subsidiary Guarantee
or the Indenture otherwise than in accordance with the terms of the Indenture,
or (viii) waive a continuing Default or Event of Default in the payment of
principal of or interest on the Notes.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of the Indenture (and the obligation of the Company to
obtain any such consent otherwise required from such Holder) may be subject to
the requirement that such Holder shall have been the Holder of record of any
Notes with respect to which such consent is required or sought as of a date
identified by the Trustee in a notice furnished to Holders in accordance with
the terms of the Indenture.
NO PERSONAL LIABILITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS, DIRECTORS OR
EMPLOYEES
The Indenture provides that no recourse for the payment of the principal of,
premium, if any, or interest on any of the Notes, or for any claim based thereon
or otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company or any Subsidiary Guarantor in the
Indenture or in any of the Notes or because of the creation of any Indebtedness
represented thereby, shall be had against any incorporator, shareholder,
officer, director, employee or controlling person of the Company, any Subsidiary
Guarantor or any successor Person thereof. Each Holder, by accepting such Notes
waives and releases all such liability.
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CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest (as defined in
the Indenture), it must eliminate such conflict or resign.
The Holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
occurs and is not cured, the Trustee will be required, in the exercise of its
power, to use the degree of care of a prudent person in similar circumstances in
the conduct of his own affairs. Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request of any Holder, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to the Trustee.
GOVERNING LAW
The Indenture, the Notes and the Subsidiary Guarantees are governed by the
laws of the State of New York.
DELIVERY AND FORM OF SECURITIES
BOOK ENTRY; DELIVERY AND FORM
The Old Notes are, and the Exchange Notes will be, issued in the form of one
Global Note (the "Global Note"). The Global Note will be deposited on the date
of the closing of the Exchange Offer with, or on behalf of, the Trustee as
custodian for the Depository Trust Company (the "Depositary") and registered in
the name of Cede & Co., as nominee of the Depositary (such nominee being
referred to herein as the "Global Note Holder"). The Depositary will maintain
the Notes in denominations of $1,000 and integral multiples thereof through its
book-entry facilities.
The Depositary has advised the Company and the Initial Purchasers as
follows: It is a limited-purpose trust company which was created to hold
securities for its participating organizations (the "Participants") and to
facilitate the clearance and settlement of transactions in such securities
between Participants through electronic book-entry changes in accounts of its
Participants. Participants include securities brokers and dealers (including the
Initial Purchasers), banks, trust companies, clearing corporations and certain
other organizations. Access to the Depositary's book-entry system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a Participant, either
directly or indirectly ("indirect participants"). Persons who are not
Participants may beneficially own securities held by the Depositary only through
Participants or indirect participants.
The Company expects that pursuant to procedures established by the
Depositary (i) upon the issuance by the Company of the Notes, the Depositary
will credit the accounts of Participants designated by the Initial Purchasers
with the principal amount of the Notes purchased by the Initial Purchasers and
(ii) ownership of beneficial interests in the Global Note will be shown on, and
the transfer of that ownership will be effected through, records maintained by
the Depositary (with respect to Participants' interest), the Participants and
the indirect participants.
The laws of some states require that certain persons take physical delivery
in definitive form of securities that they own. Consequently, the ability to
transfer beneficial interests in the Global Note is limited to such extent.
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Investors in the Global Note may hold their interests therein directly
through the Depositary, if they are Participants in such system, or indirectly
through organizations that are Participants in such system.
So long as a nominee of the Depositary is the registered owner of the Global
Note, such nominee will be considered the sole owner or holder of the Notes for
all purposes under the Indenture. Except as provided below, owners of beneficial
interests in the Global Note will not be entitled to have Notes registered in
their names, will not receive or be entitled to receive physical delivery of
Notes in definitive form and will not be considered the owners or holders
thereof under the Indenture, including with respect to giving of any directions,
instructions or approvals to the Trustee thereunder.
Neither the Company nor the Trustee, the Paying Agent or the Registrar will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in the Global
Note, or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Principal and interest payments on the Global Note registered in the name of
the Depositary's nominee will be made by the Company, either directly or through
a paying agent, to the Depositary's nominee as the registered owner of the
Global Note. Under the terms of the Indenture, the Company and the Trustee will
treat the persons in whose names the Notes are registered as the owners of such
Notes for the purpose of receiving payments of principal and interest on such
Notes and for all other purposes whatsoever. Therefore, neither the Company, the
Trustee nor any paying agent has any direct responsibility or liability for the
payment of principal or interest on the Notes to owners of beneficial interests
in the Global Note. The Depositary has advised the Company and the Trustee that
its present practice is, upon receipt of any payment, to credit immediately the
accounts of the Participants with payment in amounts proportionate to their
respective holdings in principal amount of beneficial interest in the Global
Note as shown on the records of the Depositary. Payments by Participants and
indirect participants to owners of beneficial interests in the Global Note will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bear form or registered in
"street name" and will be the responsibility of such Participants or indirect
participants.
As long as the Notes are represented by a Global Note, the Global Note
Holder will be the holder of the Notes and therefore will be the only entity
that can exercise a right to repayment or repurchase of the Notes. Notice by
Participants or indirect participants or by owners of beneficial interests in
the Global Note held through such Participants or indirect participants of the
exercise of the option to elect repayment of beneficial interests in Notes
represented by the Global Note must be transmitted to the Depositary in
accordance with its procedures on a form required by the Depositary and provided
to Participants. In order to ensure that the Depositary's nominee will timely
exercise a right to repayment with respect to a particular Note, the beneficial
owner of such Note must instruct the broker or other Participant or exercise a
right to repayment. Different firms have cut-off times for accepting
instructions from their customers and, accordingly, each beneficial owner should
consult the broker or other Participant or indirect participant through which it
holds an interest in a Note in order to ascertain the cut-off time by which such
an instruction must be given in order for timely notice to be delivered to the
Depositary.
Subject to certain conditions, any person having a beneficial interest in
the Global Note may, upon request to the Trustee, exchange such beneficial
interest for Notes in definitive form. Upon any such exchange, the Trustee is
required to register such Notes in the name of, and cause the same to be
delivered to, such Person or Persons (or the nominee of any thereof). Such Notes
would be issued in fully registered form and would be subject to the legal
requirements described herein under "Transfer Restriction." In addition, if (i)
the Company notifies the Trustee in writing that the Depositary is no longer
willing or able to act as a depositary and the Company is unable to locate a
qualified successor within 90 days or (ii) the Company, at its option, notifies
the Trustee in writing that it elects to cause the issuance of Notes in
definitive form under the Indenture, then, upon surrender by the Global Note
Holder of the Global Note,
78
Notes in such form will be issued to each person that such Global Note Holder
and the Depositary identifies as being the beneficial owner of the related
Notes.
Neither the Company nor the Trustee will be liable for any delay by the
Global Note Holder or the Depositary in identifying the owners of beneficial
interests in the Global Note and the Company and the Trustee may conclusively
rely on, and will be protected in relying on, instructions from the Global Note
Holder or the Depositary for all purposes.
The Indenture requires that payments in respect of the Notes represented by
the Global Note (including principal, premium, if any, interest and Liquidated
Damages) be made in same day funds. Interests in the Global Note trade in the
Depositary's same-day funds settlement system, and any permitted secondary
market trading activity in the Notes will, therefore, be required by the
Depositary to be settled in same-day funds. Transfer between Participants in the
Depositary will be effected in accordance with the Depositary's procedures, and
will be settled in same-day funds.
79
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes the material United States federal
income tax consequences of the Exchange Offer to a holder of Old Notes that is
an individual citizen or resident of the United States or a United States
corporation that purchased the Old Notes pursuant to their original issue (a
"U.S. Holder"). It is based on the Internal Revenue Code of 1986, as amended to
the date hereof (the "Code") existing and proposed Treasury regulations, and
judicial and administrative determinations, all of which are subject to change
at any time, possibly on a retroactive basis. The following relates only to the
Old Notes, and the Exchange Notes received therefor, that are held as "capital
assets" within the meaning of Section 1221 of the Code by U.S. Holders. It does
not discuss state, local, or foreign tax consequences, nor does it discuss tax
consequences to subsequent purchasers (persons who did not purchase the Old
Notes pursuant to their original issue), or to categories of holders that are
subject to special rules, such as foreign persons, tax-exempt organizations,
insurance companies, banks, and dealers in stocks and securities. Tax
consequences may vary depending on the particular status of an investor. No
rulings will be sought from the Internal Revenue Service (the "IRS") with
respect to the federal income tax consequences of the Exchange Offer.
THIS SECTION DOES NOT PURPORT TO DEAL WITH ALL ASPECTS OF FEDERAL INCOME
TAXATION THAT MAY BE RELEVANT TO AN INVESTOR'S DECISION TO EXCHANGE OLD NOTES
FOR EXCHANGE NOTES. EACH INVESTOR SHOULD CONSULT WITH ITS OWN TAX ADVISOR
CONCERNING THE APPLICATION OF THE FEDERAL INCOME TAX LAWS AND OTHER TAX LAWS TO
ITS PARTICULAR SITUATION BEFORE DETERMINING WHETHER TO EXCHANGE OLD NOTES FOR
EXCHANGE NOTES.
THE EXCHANGE OFFER
The exchange of Exchange Notes pursuant to the Exchange Offer should be
treated as a continuation of the corresponding Old Notes because the terms of
the Exchange Notes are not materially different from the terms of the Old Notes,
and accordingly (i) such exchange should not constitute a taxable event to a
U.S. Holder, (ii) no gain or loss should be realized by a U.S. Holder upon
receipt of an Exchange Note, (iii) the holding period of the Exchange Note
should include the holding period of the Old Note exchanged therefor and (iv)
the adjusted tax basis of the Exchange Note should be the same as the adjusted
tax basis of the Old Note exchanged therefor immediately before the exchange.
STATED INTEREST
Stated interest on a Note will be taxable to a U.S. Holder as ordinary
interest income at the time that such interest accrues or is received, in
accordance with the U.S. Holder's regular method of accounting for federal
income tax purposes. The Notes are not considered to have been issued with
original issue discount for federal income tax purposes.
SALE, EXCHANGE OR RETIREMENT OF THE NOTES
A U.S. Holder's tax basis in a Note generally will be its cost. A U.S.
Holder generally will recognize gain or loss on the sale, exchange or retirement
of a Note in an amount equal to the difference between the amount realized on
the sale, exchange or retirement and the tax basis of the Note. Gain or loss
recognized on the sale, exchange or retirement of a Note (excluding amount
received in respect of accrued interest, which will be taxable as ordinary
interest income) generally will be capital gain or loss. The maximum rate of tax
on long term capital gains on most capital assets held by an individual, trust
or estate for more than 18 months is 20%, and for most capital assets held for
more than one year and up to 18 months is 28%.
80
BACKUP WITHHOLDING
Under certain circumstances, a U.S. Holder of a Note may be subject to
"backup withholding" at a 31% rate with respect to payments of interest thereon
or the gross proceeds from the disposition thereof. This withholding generally
applies if the U.S. Holder fails to furnish his or her social security number or
other taxpayer identification number in the specified manner and in certain
other circumstances. Any amount withheld from a payment to a U.S. Holder under
the backup withholding rules is allowable as a credit against such U.S. Holder's
federal income tax liability provided that the required information is furnished
to the IRS. Corporations and certain other entities described in the Code and
Treasury regulations are exempt from backup withholding if their exempt status
is properly established.
PLAN OF DISTRIBUTION
A broker-dealer that is the holder of Old Notes that were acquired for the
account of such broker-dealer as a result of market-making or other trading
activities (other than Old Notes acquired directly from the Company or any
affiliate of the Company) may exchange such Old Notes for Exchange Notes
pursuant to the Exchange Offer; PROVIDED, that each broker-dealer that receives
Exchange Notes for its own account in exchange for Old Notes, where such Old
Notes were acquired by such broker-dealer as a result of market-making or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of Exchange Notes received in exchange for Old Notes
where such Old Notes were acquired as a result of market-making activities or
other trading activities. The Company has agreed that for a period of 180 days
after consummation of the Exchange Offer, it will make this Prospectus, as it
may be amended or supplemented from time to time, available to any broker-dealer
for use in connection with any such resale. In addition, until , 1998, all
dealers effecting transactions in the Exchange Notes may be required to deliver
a prospectus.
The Company will not receive any proceeds from any sale of Exchange Notes by
broker-dealers or any other holder of Exchange Notes. Exchange Notes received by
broker-dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange Notes or
a combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such
Exchange Noes. Any broker-dealer that resells Exchange Notes that were received
by it for its own account pursuant to the Exchange Offer and any broker or
dealer that participates in a distribution of such Exchange Notes may be deemed
to be an "underwriter" within the meaning of the Securities Act and any profit
on any such resale of Exchange Notes and any commissions or concessions received
by any such persons may be deemed to be under writing compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after consummation of the Exchange Offer, the
Company will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. The Company has agreed to pay all
expenses incident to the Exchange Offer and to the Company's performance of, or
compliance with, the Registration Rights Agreement (other than commissions or
concessions of any brokers or dealers) and will indemnify the holders of the
Notes (including any broker-dealers) against certain liabilities, including
liabilities under the Securities Act.
81
LEGAL MATTERS
Certain legal matters relating to the Exchange Notes offered hereby will be
passed upon on behalf of the Company by Paul, Hastings, Janofsky & Walker LLP,
New York, New York.
EXPERTS
The financial statements as of and for the years ended September 30, 1997
and 1996 incorporated in this Prospectus by reference from the Company's Annual
Report on Form 10-K for the year ended September 30, 1997 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
The consolidated financial statements of the Company for the year ended
September 30, 1995 incorporated by reference in this Prospectus from the
Company's Annual Report on Form 10-K for the year ended September 30, 1997, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
82
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE INITIAL PURCHASERS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY ANY
OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME AFTER THE DATE HEREOF OR THAT THERE HAS NOT BEEN A CHANGE IN THE
AFFAIRS IN THE COMPANY SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
Available Information................. 2
Incorporation of Certain Information
By Reference........................ 3
Prospectus Summary.................... 4
Risk Factors.......................... 14
Use of Proceeds....................... 18
Capitalization........................ 19
Selected Consolidated Financial
Information......................... 20
Exchange Offer........................ 22
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 29
Business.............................. 38
Management............................ 48
Description of the Credit Facility.... 50
Description of 1994 Notes............. 50
Description of Preferred Stock........ 51
Description of Notes.................. 51
Certain Federal Income Tax
Consequences........................ 80
Plan of Distribution.................. 81
Legal Matters......................... 82
Experts............................... 82
------------------------
UNTIL , 1998 (40 DAYS AFTER THE DATE OF THIS PROSPECTUS) ALL DEALERS
EFFECTING TRANSACTIONS IN THE EXCHANGE NOTES, WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION
TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
---------------------
PROSPECTUS
---------------------
, 1998
[LOGO]
BEAZER HOMES USA, INC.
OFFER TO EXCHANGE ITS
8 7/8% SENIOR NOTES DUE 2008,
WHICH HAVE BEEN REGISTERED
UNDER
THE SECURITIES ACT OF 1933,
AS AMENDED,
FOR ANY AND ALL OF ITS OUTSTANDING
8 7/8% SENIOR NOTES DUE 2008
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Beazer Homes USA, Inc.'s Certificate of Incorporation, as amended and
restated, indemnifies its officers and directors to the fullest extent permitted
by the Delaware General Corporation Law (the "DGCL"). Under Section 145 of the
DGCL, a corporation may indemnify its directors, officers, employees and agents
and its former directors, officers, employees and agents and those who serve, at
the corporation's request, in such capacities with another enterprise, against
expenses (including attorneys' fees), as well as judgments, fines and
settlements in nonderivative lawsuits, actually and reasonably incurred in
connection with the defense of any action, suit or proceeding in which they or
any of them were or are made parties or are threatened to be made parties by
reason of their serving or having served in such capacity. The DGCL provides,
however, that such person must have acted in good faith and in a manner such
person reasonably believed to be in (or not opposed to) the best interests of
the corporation and, in the case of a criminal action, such person must have had
no reasonable cause to be believe his or her conduct was unlawful. In addition,
the DGCL does not permit indemnification in an action or suit by or in the right
of the corporation, where such person has been adjudged liable to the
corporation, unless, and only to the extent that, a court determines that such
person fairly and reasonably is entitled to indemnity for costs the court deems
proper in light of liability adjudication. Indemnity is mandatory to the extent
a claim, issue or matter has been successfully defended. The Certificate of
Incorporation, as amended and restated, and the DGCL also prohibit limitations
on officer or director liability for acts or omissions which resulted in a
violation of a statute prohibiting certain dividend declarations, certain
payments to stockholders after dissolution and particular types of loans. The
effect of these provisions is to eliminate the rights of Beazer Homes USA., Inc.
and its stockholders (through stockholders' derivative suits on behalf of Beazer
Homes USA, Inc.) to recover monetary damages against an officer or director for
breach of fiduciary duty as an officer or director (including breaches resulting
from grossly negligent behavior), except in the situations described above.
These provisions will not limit the liability of directors or officers under the
federal securities laws of the United States. The foregoing summary of Beazer
Homes USA, Inc.'s Certificate of Incorporation, as amended and restated, is
qualified in its entirety by reference to the relevant provisions thereof
(incorporated by reference as Exhibit 3.1).
See Item 22 for a statement of the Company's undertaking as to the
Commission's position respecting indemnification arising under the Securities
Act.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
a. Exhibits
EXHIBIT
NUMBER
- -----------
3.1 (7) --Amended and Restated Certificate of Incorporation of the Company.
3.2 (7) --Amended and Restated Bylaws of the Company
3.3(a) (2) Certificate of Incorporation of Beazer Homes Corp. (f/k/a Phillips Builders, Inc.).
3.3(b) Articles of Amendment to the Charter of Beazer Homes Corp. (filed herewith).
3.3(c) Certificate of Incorporation of Beazer Homes Holdings Corp. (f/k/a BZH Holdings Corp.)(filed
herewith).
II-1
EXHIBIT
NUMBER
- -----------
3.3(d) Certificate of Amendment to the Certificate of Incorporation of Beazer Homes Holdings Corp.
(filed herewith).
3.3(e) Certificate of Amendment to the Certificate of Incorporation of Beazer Homes Holdings Corp.
(filed herewith).
3.3(f) (2) Amended Articles of Incorporation of Beazer Realty Corp. (f/k/a Beazer-Cohn Realty Corp.).
3.3(g) Articles of Amendment to Articles of Incorporation of Beazer Realty Corp. (filed herewith).
3.3(h) Certificate of Incorporation of Beazer Mortgage Corporation (filed herewith).
3.3(i) (2) Certificate of Incorporation of Beazer Homes Sales Arizona Inc.
3.3(j) (2) Articles of Incorporation of Beazer/Squires Realty, Inc.
3.3(k) Articles of Incorporation of Panitz Homes Realty, Inc. (filed herewith).
3.3(l) Certificate of Incorporation of Beazer Homes Texas Holdings, Inc. (filed herewith).
3.3(m) Certificate of Amendment of the Certificate of Incorporation of Beazer Homes Texas Holdings,
Inc. (filed herewith).
3.3(n) Certificate of Limited Partnership of Beazer Homes Texas, L.P. (filed herewith).
3.4(a) (2) Bylaws of Beazer Homes Corp. (f/k/a Phillips Builders Inc.).
3.4(b) Bylaws of Beazer Homes Holdings Corp. (filed herewith).
3.4(c) (2) Bylaws of Beazer Realty Corp. (f/k/a Beazer-Cohn Realty Corp.).
3.4(d) Bylaws of Beazer Mortgage Corporation (filed herewith).
3.4(e) (2) Bylaws of Beazer Homes Sales Arizona Inc.
3.4(f) (2) Bylaws of Beazer/Squires Realty, Inc.
3.4(g) Bylaws of Panitz Homes Realty, Inc. (filed herewith).
3.4(h) Bylaws of Beazer Homes Texas Holdings, Inc. (filed herewith).
3.4(i) Agreement of Limited Partnership of Beazer Homes Texas, L.P. (filed herewith).
4.1 (1) --Indenture dated as of March 2, 1994 among the Company, its subsidiaries party thereto, and
U.S. Bank Trust National Association (formerly known as Continental Bank, National
Association) as trustee, relating to the Company's 9% Senior Notes due 2004.
4.2 (2) --Form of 9% Senior Note due 2004.
4.3 (6) --Specimen of Common Stock Certificate.
4.4 (4) --Form of Certificate of Designations for Series A Cumulative Convertible Exchangeable Preferred
Stock, $.01 par value per share
4.5 (4) --Form of Certificate representing shares of Series A Cumulative Convertible Exchangeable
Preferred Stock, $.01 par value per share.
4.6 (4) --Form of Indenture between the Company and the First National Bank of Boston, as trustee,
relating to the 8% Convertible Subordinated Debentures due 2005.
II-2
EXHIBIT
NUMBER
- -----------
4.7 (4) --Form of 8% Convertible Subordinated Debenture due 2005
4.8 (5) --Retirement Savings and Investment Plan.
4.9 (5) --Summary Plan Description.
4.10 (8) --Rights Agreement, dated as of June 21, 1996, between the Company and First Chicago Trust
Company of New York, as Rights Agent.
4.11 First Supplemental Indenture dated as of June 13, 1995 among the Company, its subsidiaries
parties thereto and U.S. Bank Trust National Association, as trustee, relating to the
Company's 9% Senior Notes due 2004 (filed herewith).
4.12 Second Supplemental Indenture dated as of February 1, 1996 among the Company, its subsidiaries
parties thereto and U.S. Bank Trust National Association, as trustee, relating to the
Company's 9% Senior Notes due 2004 (filed herewith).
4.13 Third Supplemental Indenture dated as of March 18, 1998 among the Company, its subsidiaries
parties thereto and U.S. Bank Trust National Association, as trustee, relating to the
Company's 9% Senior Notes due 2004 (filed herewith).
4.14 --Indenture dated as of March 25, 1998 among the Company, its subsidiaries parties thereto, and
U.S. Bank Trust National Association, as trustee, relating to the Company's 8 7/8% Senior
Notes due 2008 (filed herewith).
4.15 --Form of Old Note (filed herewith).
4.16 --Form of Exchange Note (filed herewith).
4.17 --Purchase Agreement dated as of March 20, 1998 between the Company, its subsidiaries parties
thereto, and the Initial Purchasers named therein (filed herewith).
4.18 --Registration Rights Agreement dated as of March 25, 1998 between the Company, its subsidiaries
parties thereto, and the Initial Purchasers named therein (filed herewith).
5.1 --Opinion of Paul, Hastings, Janofsky & Walker LLP as to the validity of the Securities being
registered (filed herewith).
10.1 (10) --Credit Agreement dated as of October 22, 1996 between the Company and First National Bank of
Chicago, as agent.
10.2 (3) --Amended 1994 Stock Incentive Plan.
10.3 (3) --Non--Employee Director Stock Option Plan.
10.4 (2) --Asset Purchase Agreement dated as of April 14, 1993, as amended, between Beazer Homes Holdings
Inc., Beazer Homes California Inc., Beazer Homes Nevada Inc., Beazer Homes Arizona Inc.,
Beazer Homes Sales Arizona Inc., Watt Housing Corporation, Watt American, Inc., Watt/Hancock
Homes of Arizona, Inc., Watt Homes Inc., Watt Nevada, Inc., Watt Homes of Northern California,
Inc., Watt Pacific, Inc., Orange Homes South, Inc., Narcissa Corporation, and WH/Arizona, Inc.
10.5 (9) --Amended and Restated Employment Agreement dated as of March 31, 1995 between the Company and
Ian J. McCarthy.
II-3
EXHIBIT
NUMBER
- -----------
10.6 (9) --Amended and Restated Employment Agreement dated as of March 31, 1995 between the Company and
David S. Weiss.
10.7 (9) --Amended and Restated Employment Agreement dated as of March 31, 1995 between the Company and
John Skelton.
10.8 (9) --Amended and Restated Employment Agreement dated as of March 31, 1995 between the Company and
Gary N. Baucom.
10.9 (1) --Employment Agreement dated as of March 2, 1994 between the Company and H. Eddie Phillips.
10.11 (10) --Supplemental Employment Agreement dated as of July 17, 1996 between the Company and Ian J.
McCarthy.
10.12 (10) --Supplemental Employment Agreement dated as of July 17, 1996 between the Company and David S.
Weiss.
10.13 (10) --Supplemental Employment Agreement dated as of July 17, 1996 between the Company and John
Skelton.
10.14 (10) --Supplemental Employment Agreement dated as of July 17, 1996 between the Company and Peter H.
Simons.
10.15 (11) --First Amendment dated July 29, 1997 to Credit Agreement.
10.16 (12) --Second Amendment dated December 10, 1997 to Credit Agreement.
10.17 --Third Amendment dated March 19, 1998 to Credit Agreement (filed herewith).
10.18 (13) --Employment Agreement dated as of January 13, 1998 between the Company and Michael H. Furlow.
10.19 (13) --Employment Agreement dated as of January 21, 1998 between the Company and Cory Boydston.
11 (10) (12) --Earnings Per Share Calculations.
(13)
12 --Ratio of Earnings to fixed charges calculation (filed herewith).
21 (12) --Subsidiaries of the Company.
23.1 --Consent of Paul, Hastings, Janofsky & Walker LLP (included in Exhibit 5.1).
23.2 --Consent of Deloitte & Touche LLP, Independent Auditors (filed herewith).
23.3 --Consent of Ernst & Young LLP, Independent Auditors (filed herewith).
24.1 --Power of Attorney (included in Part II of this Registration Statement).
25.1 --Statement of Eligibility of U.S. Bank Trust National Association, as Trustee, on Form T-1
(filed herewith).
99.1 --Form of Letter of Transmittal (filed herewith).
99.2 --Form of Notice of Guaranteed Delivery (filed herewith).
II-4
- ------------------------
(1) Incorporated herein by reference to the exhibits to the Company's report of
Form 10--Q for the quarterly period ended March 31, 1994.
(2) Incorporated herein by reference to the exhibits to the Company's
Registration Statement on Form S--1 (Registration No. 33--72982) initially
filed on December 15, 1993.
(3) Incorporated herein by reference to the exhibits to the Company's report on
Form 10--K for the year ended September 30, 1994.
(4) Incorporated herein by reference to the exhibits to the Company's
Registration Statement on Form S--3 (Registration No. 33--92892) initially
filed on June 15, 1995.
(5) Incorporated herein by reference to the exhibits to the Company's
Registration Statement on Form S--8 (Registration No. 33--91904) filed on
May 4, 1995.
(6) Incorporated herein by reference to the exhibits to the Company's
Registration Statement on Form S--1 (Registration No. 33--72576) initially
filed on December 6, 1993.
(7) Incorporated herein by reference to the exhibits to the Company's report on
Form 8--K filed on May 30, 1996.
(8) Incorporated herein by reference to the exhibits to the Company's report on
Form 8--K filed on June 21, 1996
(9) Incorporated herein by reference to the exhibits to the Company's report on
Form 10--Q for the quarterly period ended March 31, 1995.
(10) Incorporated herein by reference to the exhibits to the Company's report on
Form 10--K for the year ended September 30, 1996.
(11) Incorporated herein by reference to the exhibits to the Company's report on
Form 10--Q for the quarterly period ended June 30, 1997.
(12) Incorporated herein by reference to the exhibits to the Company's report on
Form 10--K for the year ended September 30, 1997.
(13) Incorporated herein by reference to the exhibits to the Company's report on
Form 10--Q for the quarterly period ended December 31, 1997.
b. Financial Statement Schedules.
None required.
ITEM 22. UNDERTAKINGS
(14) The undersigned registrant hereby undertakes:
a. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high of the estimated maximum offering range may
be reflected in the form of prospectus
II-5
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
b. That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
c. To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
d. That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
person who may be deemed underwriters, in addition to the information called for
by the other items of the applicable form.
e. That every prospectus: (i) that is filed pursuant to paragraph (4)
immediately proceeding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to the
registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
f. To respond to requests for information that is incorporated by reference
into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one
business day of receipt of such request, and to send the incorporated documents
by first class mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
g. To supply by means of post-effective amendment all information concerning
a transaction, and the company being acquired involved therein, that was not the
subject of and included in the registration statement when it became effective.
(15) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
(16) The undersigned registrant hereby undertakes to file an application for the
purpose of determining eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules
and regulations prescribed by the Securities and Exchange Commission under
Section 305(b)(2) of the Trust Indenture Act.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia
on the 24th day of April, 1998.
BEAZER HOMES USA, INC.
BY: /S/ IAN J. MCCARTHY
-------------------------------------
Ian J. McCarthy
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Ian J. McCarthy and David S. Weiss, or any one or more of them, his true and
lawful attorney-in-fact, for him and in his name, place and stead, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement and to cause the same to be filed with the Securities and Exchange
Commission, hereby granting to said attorneys-in-fact full power and authority
to do and perform all and every act and thing whatsoever requisite or desirable
to be done in and about the premises as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
acts and things that said attorneys-in-fact may do or cause to be done by virtue
of these presents.
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ ------------------------- ----------------
/s/ BRIAN C. BEAZER Director and April 24, 1998
- ------------------------------ Non-Executive Chairman
Brian C. Beazer of the Board
/s/ IAN J. MCCARTHY Director, President and April 24, 1998
- ------------------------------ Chief Executive Officer
Ian J. McCarthy (Principal Executive
Officer)
/s/ DAVID S. WEISS Director, Executive Vice April 24, 1998
- ------------------------------ President and Chief
David S. Weiss Financial Officer
(Principal Financial
Officer)
/s/ THOMAS B. HOWARD, JR.
- ------------------------------ Director April 24, 1998
Thomas B. Howard, Jr.
/s/ GEORGE W. MEFFERD
- ------------------------------ Director April 24, 1998
George W. Mefferd
/s/ D.E. MUNDELL
- ------------------------------ Director April 24, 1998
D.E. Mundell
II-7
SIGNATURE TITLE DATE
- ------------------------------ ------------------------- ----------------
/s/ LARRY T. SOLARI
- ------------------------------ Director April 24, 1998
Larry T. Solari
/s/ JOHN SKELTON Senior Vice President, April 24, 1998
- ------------------------------ Controller and Secretary
John Skelton (Principal Accounting
Officer)
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia
on the 24th day of April, 1998.
BEAZER HOMES CORP.
BY: /S/ IAN J. MCCARTHY
-------------------------------------
Ian J. McCarthy
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Ian J. McCarthy and David S. Weiss, or any one or more of them, his true and
lawful attorney-in-fact, for him and in his name, place and stead, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement and to cause the same to be filed with the Securities and Exchange
Commission, hereby granting to said attorneys-in-fact full power and authority
to do and perform all and every act and thing whatsoever requisite or desirable
to be done in and about the premises as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
acts and things that said attorneys-in-fact may do or cause to be done by virtue
of these presents.
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ ------------------------- ----------------
/s/ IAN J. MCCARTHY Director, President and April 24, 1998
- ------------------------------ Chief Executive Officer
Ian J. McCarthy (Principal Executive
Officer)
/s/ DAVID S. WEISS Vice President and Chief April 24, 1998
- ------------------------------ Financial Officer
David S. Weiss (Principal Financial
Officer)
/s/ BRIAN C. BEAZER
- ------------------------------ Director April 24, 1998
Brian C. Beazer
/s/ JOHN SKELTON
- ------------------------------ Controller (Principal April 24, 1998
John Skelton Accounting Officer)
II-9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia
on the 24th day of April, 1998.
BEAZER HOMES HOLDINGS CORP.
BY: /S/ IAN J. MCCARTHY
-------------------------------------
Ian J. McCarthy
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Ian J. McCarthy and David S. Weiss, or any one or more of them, his true and
lawful attorney-in-fact, for him and in his name, place and stead, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement and to cause the same to be filed with the Securities and Exchange
Commission, hereby granting to said attorneys-in-fact full power and authority
to do and perform all and every act and thing whatsoever requisite or desirable
to be done in and about the premises as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
acts and things that said attorneys-in-fact may do or cause to be done by virtue
of these presents.
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ ------------------------- ----------------
/s/ IAN J. MCCARTHY Director, President and April 24, 1998
- ------------------------------ Chief Executive Officer
Ian J. McCarthy (Principal Executive
Officer)
/s/ DAVID S. WEISS Vice President and Chief April 24, 1998
- ------------------------------ Financial Officer
David S. Weiss (Principal Financial
Officer)
/s/ BRIAN C. BEAZER
- ------------------------------ Director April 24, 1998
Brian C. Beazer
/s/ JOHN SKELTON
- ------------------------------ Controller (Principal April 24, 1998
John Skelton Accounting Officer)
II-10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia
on the 24th day of April 1998.
BEAZER REALTY CORP.
BY: /S/ IAN J. MCCARTHY
-------------------------------------
Ian J. McCarthy
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Ian J. McCarthy and David S. Weiss, or any one or more of them, his true and
lawful attorney-in-fact, for him and in his name, place and stead, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement and to cause the same to be filed with the Securities and Exchange
Commission, hereby granting to said attorneys-in-fact full power and authority
to do and perform all and every act and thing whatsoever requisite or desirable
to be done in and about the premises as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
acts and things that said attorneys-in-fact may do or cause to be done by virtue
of these presents.
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ ------------------------- ----------------
/s/ IAN J. MCCARTHY Director, President and April 24, 1998
- ------------------------------ Chief Executive Officer
Ian J. McCarthy (Principal Executive
Officer)
/s/ DAVID S. WEISS Vice President and Chief April 24, 1998
- ------------------------------ Financial Officer
David S. Weiss (Principal Financial
Officer)
/s/ BRIAN C. BEAZER
- ------------------------------ Director April 24, 1998
Brian C. Beazer
/s/ JOHN SKELTON
- ------------------------------ Controller (Principal April 24, 1998
John Skelton Accounting Officer)
II-11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia
on the 24th day of April 1998.
BEAZER MORTGAGE CORPORATION
BY: /S/ IAN J. MCCARTHY
-------------------------------------
Ian J. McCarthy
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Ian J. McCarthy and David S. Weiss, or any one or more of them, his true and
lawful attorney-in-fact, for him and in his name, place and stead, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement and to cause the same to be filed with the Securities and Exchange
Commission, hereby granting to said attorneys-in-fact full power and authority
to do and perform all and every act and thing whatsoever requisite or desirable
to be done in and about the premises as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
acts and things that said attorneys-in-fact may do or cause to be done by virtue
of these presents.
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ ------------------------- ----------------
/s/ IAN J. MCCARTHY Director, President and April 24, 1998
- ------------------------------ Chief Executive Officer
Ian J. McCarthy (Principal Executive
Officer)
/s/ DAVID S. WEISS Vice President and Chief April 24, 1998
- ------------------------------ Financial Officer
David S. Weiss (Principal Financial
Officer)
/s/ BRIAN C. BEAZER
- ------------------------------ Director April 24, 1998
Brian C. Beazer
/s/ JOHN SKELTON
- ------------------------------ Controller (Principal April 24, 1998
John Skelton Accounting Officer)
II-12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia
on the 24th day of April, 1998.
BEAZER HOMES SALES ARIZONA INC.
BY: /S/ IAN J. MCCARTHY
-------------------------------------
Ian J. McCarthy
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Ian J. McCarthy and David S. Weiss, or any one or more of them, his true and
lawful attorney-in-fact, for him and in his name, place and stead, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement and to cause the same to be filed with the Securities and Exchange
Commission, hereby granting to said attorneys-in-fact full power and authority
to do and perform all and every act and thing whatsoever requisite or desirable
to be done in and about the premises as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
acts and things that said attorneys-in-fact may do or cause to be done by virtue
of these presents.
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ ------------------------- ----------------
/s/ IAN J. MCCARTHY Director, President and April 24, 1998
- ------------------------------ Chief Executive Officer
Ian J. McCarthy (Principal Executive
Officer)
/s/ DAVID S. WEISS Vice President and Chief April 24, 1998
- ------------------------------ Financial Officer
David S. Weiss (Principal Financial
Officer)
/s/ BRIAN C. BEAZER
- ------------------------------ Director April 24, 1998
Brian C. Beazer
/s/ JOHN SKELTON
- ------------------------------ Controller (Principal April 24, 1998
John Skelton Accounting Officer)
II-13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia
on the 24th day of April, 1998.
BEAZER/SQUIRES REALTY, INC.
BY: /S/ IAN J. MCCARTHY
-------------------------------------
Ian J. McCarthy
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Ian J. McCarthy and David S. Weiss, or any one or more of them, his true and
lawful attorney-in-fact, for him and in his name, place and stead, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement and to cause the same to be filed with the Securities and Exchange
Commission, hereby granting to said attorneys-in-fact full power and authority
to do and perform all and every act and thing whatsoever requisite or desirable
to be done in and about the premises as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
acts and things that said attorneys-in-fact may do or cause to be done by virtue
of these presents.
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ ------------------------- ----------------
/s/ IAN J. MCCARTHY Director, President and April 24, 1998
- ------------------------------ Chief Executive Officer
Ian J. McCarthy (Principal Executive
Officer)
/s/ DAVID S. WEISS Vice President and Chief April 24, 1998
- ------------------------------ Financial Officer
David S. Weiss (Principal Financial
Officer)
/s/ BRIAN C. BEAZER
- ------------------------------ Director April 24, 1998
Brian C. Beazer
/s/ JOHN SKELTON
- ------------------------------ Controller (Principal April 24, 1998
John Skelton Accounting Officer)
II-14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia
on the 24th day of April, 1998.
PANITZ HOMES REALTY, INC.
BY: /S/ IAN J. MCCARTHY
-------------------------------------
Ian J. McCarthy
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Ian J. McCarthy and David S. Weiss, or any one or more of them, his true and
lawful attorney-in-fact, for him and in his name, place and stead, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement and to cause the same to be filed with the Securities and Exchange
Commission, hereby granting to said attorneys-in-fact full power and authority
to do and perform all and every act and thing whatsoever requisite or desirable
to be done in and about the premises as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
acts and things that said attorneys-in-fact may do or cause to be done by virtue
of these presents.
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ ------------------------- ----------------
/s/ IAN J. MCCARTHY Director, President and April 24, 1998
- ------------------------------ Chief Executive Officer
Ian J. McCarthy (Principal Executive
Officer)
/s/ DAVID S. WEISS Vice President and Chief April 24, 1998
- ------------------------------ Financial Officer
David S. Weiss (Principal Financial
Officer)
/s/ BRIAN C. BEAZER
- ------------------------------ Director April 24, 1998
Brian C. Beazer
/s/ JOHN SKELTON
- ------------------------------ Controller (Principal April 24, 1998
John Skelton Accounting Officer)
II-15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia
on the 24th day of April, 1998.
BEAZER HOMES TEXAS HOLDINGS, INC.
BY: /S/ IAN J. MCCARTHY
-------------------------------------
Ian J. McCarthy
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Ian J. McCarthy and David S. Weiss, or any one or more of them, his true and
lawful attorney-in-fact, for him and in his name, place and stead, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement and to cause the same to be filed with the Securities and Exchange
Commission, hereby granting to said attorneys-in-fact full power and authority
to do and perform all and every act and thing whatsoever requisite or desirable
to be done in and about the premises as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
acts and things that said attorneys-in-fact may do or cause to be done by virtue
of these presents.
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ ------------------------- ----------------
/s/ IAN J. MCCARTHY Director, President and April 24, 1998
- ------------------------------ Chief Executive Officer
Ian J. McCarthy (Principal Executive
Officer)
/s/ DAVID S. WEISS Vice President and Chief April 24, 1998
- ------------------------------ Financial Officer
David S. Weiss (Principal Financial
Officer)
/s/ BRIAN C. BEAZER
- ------------------------------ Director April 24, 1998
Brian C. Beazer
/s/ JOHN SKELTON
- ------------------------------ Controller (Principal April 24, 1998
John Skelton Accounting Officer)
II-16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia
on the 24th day of April, 1998.
BEAZER HOMES TEXAS, L.P.
a Delaware Limited Partnership
By: Beazer Homes Texas Holdings, Inc.
as General Partner
By: /s/ IAN J. MCCARTHY
-------------------------------------
Ian J. McCarthy
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Ian J. McCarthy and David S. Weiss, or any one or more of them, his true and
lawful attorney-in-fact, for him and in his name, place and stead, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement and to cause the same to be filed with the Securities and Exchange
Commission, hereby granting to said attorneys-in-fact full power and authority
to do and perform all and every act and thing whatsoever requisite or desirable
to be done in and about the premises as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
acts and things that said attorneys-in-fact may do or cause to be done by virtue
of these presents.
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ ------------------------- ----------------
/s/ IAN J. MCCARTHY Director, President and April 24, 1998
- ------------------------------ Chief Executive Officer
Ian J. McCarthy (Principal Executive
Officer)
/s/ DAVID S. WEISS Vice President and Chief April 24, 1998
- ------------------------------ Financial Officer
David S. Weiss (Principal Financial
Officer)
/s/ BRIAN C. BEAZER
- ------------------------------ Director April 24, 1998
Brian C. Beazer
/s/ JOHN SKELTON
- ------------------------------ Controller (Principal April 24, 1998
John Skelton Accounting Officer)
II-17
INDEX OF EXHIBITS
EXHIBIT
NUMBER
- -----------
3.1 * --Amended and Restated Certificate of Incorporation of the Company.
3.2 * --Amended and Restated Bylaws of the Company
3.3(a) * Certificate of Incorporation of Beazer Homes Corp. (f/k/a Phillips Builders, Inc.).
3.3(b) Articles of Amendment to the Charter of Beazer Homes Corp. (filed herewith).
3.3(c) Certificate of Incorporation of Beazer Homes Holdings Corp. (f/k/a BZH Holding
Corp.)(filed herewith).
3.3(d) Certificate of Amendment to the Certificate of Incorporation of Beazer Homes Holdings
Corp. (filed herewith).
3.3(e) Certificate of Amendment to the Certificate of Incorporation of Beazer Homes Holdings
Corp. (filed herewith).
3.3(f) * Amended Articles of Incorporation of Beazer Realty Corp. (f/k/a Beazer-Cohn Realty Corp.).
3.3(g) Articles of Amendment to Articles of Incorporation of Beazer Realty Corp. (filed
herewith).
3.3(h) Certificate of Incorporation of Beazer Mortgage Corporation (filed herewith).
3.3(i) * Certificate of Incorporation of Beazer Homes Sales Arizona Inc.
3.3(j) * Articles of Incorporation of Beazer/Squires Realty, Inc.
3.3(k) Articles of Incorporation of Panitz Homes Realty, Inc. (filed herewith).
3.3(l) Certificate of Incorporation of Beazer Homes Texas Holdings, Inc. (filed herewith).
3.3(m) Certificate of Amendment of the Certificate of Incorporation of Beazer Homes Texas
Holdings, Inc. (filed herewith).
3.3(n) Certificate of Limited Partnership of Beazer Homes Texas, L.P. (filed herewith).
3.4(a) * Bylaws of Beazer Homes Corp. (f/k/a Phillips Builders Inc.).
3.4(b) Bylaws of Beazer Homes Holdings Corp. (filed herewith).
3.4(c) * Bylaws of Beazer Realty Corp. (f/k/a Beazer-Cohn Realty Corp.).
3.4(d) Bylaws of Beazer Mortgage Corporation (filed herewith).
3.4(e) * Bylaws of Beazer Homes Sales Arizona Inc.
3.4(f) * Bylaws of Beazer/Squires Realty, Inc.
3.4(g) Bylaws of Panitz Homes Realty, Inc. (filed herewith).
3.4(h) Bylaws of Beazer Homes Texas Holdings, Inc. (filed herewith).
3.4(i) Agreement of Limited Partnership of Beazer Homes Texas, L.P. (filed herewith).
4.1 * --Indenture dated as of March 2, 1994 among the Company, its subsidiaries party thereto,
and U.S. Bank Trust National Association (formerly known as Continental Bank, National
Association) as trustee, relating to the Company's 9% Senior Notes due 2004.
4.2 * --Form of 9% Senior Note due 2004.
EXHIBIT
NUMBER
- -----------
4.3 * --Specimen of Common Stock Certificate.
4.4 * --Form of Certificate of Designations for Series A Cumulative Convertible Exchangeable
Preferred Stock, $.01 par value per share
4.5 * --Form of Certificate representing shares of Series A Cumulative Convertible Exchangeable
Preferred Stock, $.01 par value per share.
4.6 * --Form of Indenture between the Company and the First National Bank of Boston, as trustee,
relating to the 8% Convertible Subordinated Debentures due 2005.
4.7 * --Form of 8% Convertible Subordinated Debenture due 2005
4.8 * --Retirement Savings and Investment Plan.
4.9 * --Summary Plan Description.
4.10 * --Rights Agreement, dated as of June 21, 1996, between the Company and First Chicago Trust
Company of New York, as Rights Agent.
4.11 First Supplemental Indenture dated as of June 13, 1995 among the Company, its subsidiaries
parties thereto and U.S. Bank Trust National Association, as trustee, relating to the
Company's 9% Senior Notes due 2004 (filed herewith).
4.12 Second Supplemental Indenture dated as of February 1, 1996 among the Company, its
subsidiaries parties thereto and U.S. Bank Trust National Association, as trustee,
relating to the Company's 9% Senior Notes due 2004 (filed herewith).
4.13 Third Supplemental Indenture dated as of March 18, 1998 among the Company, its
subsidiaries parties thereto and U.S. Bank Trust National Association, as trustee,
relating to the Company's 9% Senior Notes due 2004 (filed herewith).
4.14 --Indenture dated as of March 25, 1998 among the Company, its subsidiaries parties
thereto, and U.S. Bank Trust National Association, as trustee, relating to the Company's
8 7/8% Senior Notes due 2008 (filed herewith).
4.15 --Form of Old Note (filed herewith).
4.16 --Form of Exchange Note (filed herewith).
4.17 --Purchase Agreement dated as of March 20, 1998 between the Company, its subsidiaries
parties thereto, and the Initial Purchasers named therein (filed herewith).
4.18 --Registration Rights Agreement dated as of March 25, 1998 between the Company, its
subsidiaries parties thereto, and the Initial Purchasers named therein (filed herewith).
5.1 --Opinion of Paul, Hastings, Janofsky & Walker LLP as to the validity of the Securities
being registered (filed herewith).
10.1 * --Credit Agreement dated as of October 22, 1996 between the Company and First National
Bank of Chicago, as agent.
10.2 * --Amended 1994 Stock Incentive Plan.
10.3 * --Non--Employee Director Stock Option Plan.
EXHIBIT
NUMBER
- -----------
10.4 * --Asset Purchase Agreement dated as of April 14, 1993, as amended, between Beazer Homes
Holdings Inc., Beazer Homes California Inc., Beazer Homes Nevada Inc., Beazer Homes
Arizona Inc., Beazer Homes Sales Arizona Inc., Watt Housing Corporation, Watt American,
Inc., Watt/Hancock Homes of Arizona, Inc., Watt Homes Inc., Watt Nevada, Inc., Watt
Homes of Northern California, Inc., Watt Pacific, Inc., Orange Homes South, Inc.,
Narcissa Corporation, and WH/Arizona, Inc.
10.5 * --Amended and Restated Employment Agreement dated as of March 31, 1995 between the Company
and Ian J. McCarthy.
10.6 * --Amended and Restated Employment Agreement dated as of March 31, 1995 between the Company
and David S. Weiss.
10.7 * --Amended and Restated Employment Agreement dated as of March 31, 1995 between the Company
and John Skelton.
10.8 * --Amended and Restated Employment Agreement dated as of March 31, 1995 between the Company
and Gary N. Baucom.
10.9 * --Employment Agreement dated as of March 2, 1994 between the Company and H. Eddie
Phillips.
10.11 * --Supplemental Employment Agreement dated as of July 17, 1996 between the Company and Ian
J. McCarthy.
10.12 * --Supplemental Employment Agreement dated as of July 17, 1996 between the Company and
David S. Weiss.
10.13 * --Supplemental Employment Agreement dated as of July 17, 1996 between the Company and John
Skelton.
10.14 * --Supplemental Employment Agreement dated as of July 17, 1996 between the Company and
Peter H. Simons.
10.15 * --First Amendment dated July 29, 1997 to Credit Agreement.
10.16 * --Second Amendment dated December 10, 1997 to Credit Agreement.
10.17 --Third Amendment dated March 19, 1998 to Credit Agreement (filed herewith).
10.18 * --Employment Agreement dated as of January 13, 1998 between the Company and Michael H.
Furlow.
10.19 * --Employment Agreement dated as of January 21, 1998 between the Company and Cory Boydston.
11 * --Earnings Per Share Calculations.
12 --Ratio of Earnings to fixed charges calculation (filed herewith).
21 * --Subsidiaries of the Company.
23.1 --Consent of Paul, Hastings, Janofsky & Walker LLP (included in Exhibit 5.1).
23.2 --Consent of Deloitte & Touche LLP, Independent Auditors (filed herewith).
23.3 --Consent of Ernst & Young LLP, Independent Auditors (filed herewith).
24.1 --Power of Attorney (included in Part II of this Registration Statement).
25.1 --Statement of Eligibility of U.S. Bank Trust National Association, as Trustee, on Form
T-1 (filed herewith).
99.1 --Form of Letter of Transmittal (filed herewith).
99.2 --Form of Notice of Guaranteed Delivery (filed herewith).
- ------------------------
* Incorporated by reference (See Part II Item 21 of the Company's Registration
Statement on Form S-4 (Reg. No. 333- )).
Exhibit 3.3(b)
ARTICLES OF AMENDMENT TO THE CHARTER
CORPORATE CONTROL NUMBER (IF KNOWN) FILING FEE: $10.00
--------------------------------
PURSUANT TO THE PROVISIONS OF SECTION 48-2D-106 OF THE TENNESSEE BUSINESS
CORPORATION ACT, THE UNDERSIGNED CORPORATION ADOPTS THE FOLLOWING ARTICLES
OF AMENDMENT TO ITS CHARTER:
PLEASE MARK THE BLOCK THAT APPLIES:
|X| AMENDMENT IS TO BE EFFECTIVE WHEN FILED BY THE SECRETARY OF STATE.
|_| AMENDMENT IS TO BE EFFECTIVE,
--------------------------------------------
MONTH DAY YEAR
(NOT TO BE LATER THAN 90TH DAY AFTER THE DATE THIS DOCUMENT IS FILED.) IF
NEITHER BLOCK IS CHECKED, THE AMENDMENT WILL BE EFFECTIVE AT THE TIME OF
FILING.
1. PLEASE INSERT THE NAME OF THE CORPORATION AS IT APPEARS ON
RECORD: Phillips Builders, Inc.
---------------------------------------------------------------
IF CHANGING THE NAME, INSERT THE NEW NAME ON THE LINE BELOW:
Beazer Homes Corp.
----------------------------------------------------------------------
2. PLEASE INSERT ANY CHANGES THAT APPLY:
A. PRINCIPAL ADDRESS:
------------------------------------------------
STREET ADDRESS
----------------------------------------------------------------------
CITY STATE ZIP CODE
B. REGISTERED AGENT:
-------------------------------------------------
C. REGISTERED ADDRESS:
-----------------------------------------------
STREET ADDRESS
TN
----------------------------------------------------------------------
CITY STATE ZIP CODE COUNTY
D. OTHER CHANGES:
3. THE CORPORATION IS FOR PROFIT.
4. THE MANNER (IF NOT SET FORTH IN THE AMENDMENT) FOR IMPLEMENTATION OF
ANY EXCHANGE, RECLASSIFICATION, OR CANCELLATION OF ISSUED SHARES IS AS
FOLLOWS:
5. THE AMENDMENT WAS DULY ADOPTED ON January 11 1996 BY:
----------------------------------
MONTH DAY YEAR
(NOTE: PLEASE MARK THE BLOCK THAT APPLIES)
|_| - THE INCORPORATORS.
|_| - THE BOARD OF DIRECTORS WITHOUT SHAREHOLDER APPROVAL, AS SUCH IS NOT
REQUIRED.
|X| - THE SHAREHOLDERS.
PRESIDENT OF BEAZER HOMES INC;
SOLE SHAREHOLDER OF PHILLIPS BUILDERS INC.
/S/ IAN J McCARTHY
- ---------------------------------- ----------------------------
SIGNER'S CAPACITY SIGNATURE
Exhibit 3.3(c)
CERTIFICATE OF INCORPORATION
OF
BZH HOLDINGS CORP.
ARTICLE I. The name of this corporation shall be "BZH Holdings
Corp."
ARTICLE II. Its registration office in the State of Delaware is to
be located at 1209 Orange Street, Wilmington, County of New Castle, Delaware
19801 and its registered agent at such address is The Corporation Trust Company.
ARTICLE III. The purpose or purposes of this corporation shall be to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE IV. The total number of shares of stock which this
corporation is authorized to issue is 30,000,000 shares of Common Stock, par
value $0.01 per share.
ARTICLE V. The name and address of the incorporator is as follows:
Ken Kimura, Paul, Hastings, Janofsky & Walker, 399 Park Avenue, 31st Floor, New
York, New York 10022.
ARTICLE VI. The Board of Directors shall have the power to adopt,
amend or repeal the by-laws.
ARTICLE VII. No director shall be personally liable to this
corporation or its stockholders for monetary damages for any breach of fiduciary
duty by such director as a director. Notwithstanding the foregoing sentence, a
director shall be liable to the extent provided by applicable law: (i) for
breach of the director's duty of loyalty to this corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant to Section
174 of the General Corporation Law of the State of Delaware or (iv) for any
transaction from which the director derived an improper personal benefit. No
amendment to or repeal of this Article Seven shall apply to or have any effect
on the liability or alleged liability of any director of this corporation for or
with respect to any acts or omissions of such director occurring prior to such
amendment.
1
IN WITNESS WHEREOF, the undersigned, being the incorporator
hereinbefore named, has executed, signed and acknowledged this certificate of
incorporation this 11th day of January, 1996.
By: /s/ Ken Kimura
Name: Ken Kimura
Title: Sole Incorporator
2
Exhibit 3.3 (d)
Certificate of Amendment
of the Certificate of Incorporation of
BZH Holdings Corp.
BZH Holdings Corp., a Delaware corporation (the "Company"), pursuant
to Section 242 of the General Corporation Law of Delaware, certifies that:
1. The Board of Directors of the Company and the stockholders of the
Company have adopted the following resolution amending the Company's Certificate
of Incorporation:
"RESOLVED, that the Certificate of Incorporation of BZH Holdings Corp. be
amended by changing Article I thereof so that, as amended, said Article
shall be and read as follows:
'Article I. The name of this corporation shall be "Beazer Homes
Holdings Corp.'"
2. The foregoing amendment to the Certificate of Incorporation of
the Company has been duly adopted in accordance with the provisions of Section
242 of the General Corporation Law of Delaware.
IN WITNESS WHEREOF, BZH Holdings Corp., has caused this Certificate
of Amendment to be signed and attested by its duly authorized officer this 15th
day of March, 1996.
BZH Holdings Corp.
By: /s/ Ian J. McCarthy
Name: Ian J. McCarthy
Title: President/ CEO
Exhibit 3.3(e)
Certificate of Amendment
of the Certificate of Incorporation of
Beazer Homes Holdings Corp.
Beazer Homes Holdings Corp., a Delaware corporation (the "Company"),
pursuant to Section 242 of the General Corporation Law of Delaware, certifies
that:
1. The Board of Directors of the Company and the stockholders of the
Company have adopted the following resolution amending the Company's Certificate
of Incorporation:
"RESOLVED, that the Certificate of Incorporation of Beazer Homes Holdings
Corp. be amended by changing Article IV thereof so that, as amended, said
Article shall be and read as follows:
'Article IV. The total number of shares of stock which this
corporation is authorized to issue is 3,000 shares of Common Stock,
par value $0.01 per share.'"
2. The foregoing amendment to the Certificate of Incorporation of
the Company has been duly adopted in accordance with the provisions of Section
242 of the General Corporation Law of Delaware.
IN WITNESS WHEREOF, Beazer Homes Holdings Corp., has caused this
Certificate of Amendment to be signed and attested by its duly authorized
officer this 29th day of March, 1996.
Beazer Homes Holdings Corp.
By: /s/ Ian J. McCarthy
Name: Ian J. McCarthy
Title: Authorized Officer
Exhibit 3.3(g)
ARTICLES OF AMENDMENT
OF
BEAZER-COHN REALTY CORP.
I.
The name of the Corporation is:
BEAZER-COHN REALTY CORP.
II.
The Articles of Incorporation of the Corporation are hereby amended to
change the Corporation's name to:
BEAZER REALTY CORP.
III.
The proposed Articles of Amendment was adopted by the written consent of
the shareholders of the Corporation by Join Corporate Action dated August 10,
1995.
IN WITNESS WHEREOF, BEAZER-COHN REALTY CORP., caused these Articles of
Amendment to be executed, its corporate seal to be affixed and the foregoing to
be attested, all by its duly authorized officer on this 15th day of January,
1996.
BEAZER-COHN REALTY CORP.
By: /s/ Ian J. McCarthy
-----------------------------------
IAN J. McCARTHY, Its Chairman
[CORPORATE SEAL]
ATTEST:
By: /s/ Jennifer P. Jones
------------------------------
JENNIFER P. JONES, Secretary
Exhibit 3.3(h)
CERTIFICATE OF INCORPORATION
OF
BEAZER MORTGAGE CORPORATION
* * * * *
1. The name of the corporation Beazer Mortgage Corporation.
2. The address of its registered office in the Sate of Delaware is Corporation
Trust Center, 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of its registered agent at such address is The Corporation
Trust Company.
3. The nature of the business or purposes to be conducted or promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of stock which the corporation shall have
authority to issue is One Thousand (1000); all of such shares shall be without
par value.
5. The name and mailing address of each incorporator is as follows:
NAME MAILING ADDRESS
- ---- ---------------
M.A. Brzoska 1209 Orange Street, Wilmington, Delaware 19801
L. J. Vitalo 1209 Orange Street, Wilmington, Delaware 19801
D.M. Dembkowski 1209 Orange Street, Wilmington, Delaware 19801
The power of the incorporators shall terminate upon filing of the Certificate of
Incorporation.
The name and mailing address of each person, who is to serve as a director until
the first annual meeting of the stockholders or until a successor is elected and
qualified, is as follows:
NAME MAILING ADDRESS
- ---- ---------------
Brian C. Beazer 5775 Peachtree Dunwoody Road, Suite C-550,
Atlanta, GA 30342
Ian J. McCarthy 5775 Peachtree Dunwoody Road, Suite C-550,
Atlanta, GA 30342
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred by Section
109(a) of the General Corporation Law of Delaware, the board of directors is
expressly authorized.
To adopt, amend or repeal the by-laws of the corporation.
By a majority of the whole board, to designate one or more committees,
each committee to consist of one or more of the directors of the corporation.
The board may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. The by-laws may provide that in the absence of disqualification
of a member of a committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the board of directors,
or in the by-laws of the corporation, shall have and may exercise all the powers
and authority of the board of directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all papers which may require it but no such committee shall have the
power or authority in reference to amending the Certificate of Incorporation,
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
by-laws of the corporation; and, unless the resolution or by-laws, expressly so
provide, no such committee shall have the power or authority to declare a
dividend or to authorize the issuance of stock.
When and as authorized by the stockholders in accordance with law, to
sell, lease or exchange all or substantially all of the property and assets of
the corporation, including its good will and its corporate franchises, upon such
terms and conditions and for such consideration, which may consist in whole or
in part of money or property including shares of stock in, and/or other
securities or, any other corporation or corporations, as its board of directors
shall deem expedient and for the best interests of the corporation.
8. Elections of directors need not be by written ballot unless the by-laws of
the corporation shall so provide.
2
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws may provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the by-laws of the corporation.
Whenever a compromise or arrangement is proposed between this corporation
and its creditors or any class of them and/or between this corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of this
corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for this corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this corporation under
the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be , to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of the corporation, as the case may be, and also this corporation.
9. The corporation reserves the right to amend, alter, change or repeal nay
provision contained to this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
10. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any improper
personal benefit.
3
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named,
for the purpose of forming a corporation pursuant to the General Corporation Law
of the State of Delaware, do make this Certificate, hereby declaring and
certifying that this is our act and deed and the facts herein stated are true,
and accordingly have hereunto set our hands this 28th day of November 1995
/s/ M.A. Brzoska
/s/ L. J. Vitalo
/s/ D. M. Dembrowski
4
Exhibit 3.3(k)
ARTICLE OF INCORPORATION
OF
PANITZ HOMES REALTY, INC.
The undersigned subscriber to these Articles of Incorporation, being a
natural person competent to contract, hereby forms a corporation for profit
under the laws of the State of Florida.
ARTICLE I - NAME
The name of this corporation is PANITZ HOMES REALTY, INC.
ARTICLE II - DURATION
This corporation shall exist perpetually.
ARTICLE III - PURPOSE
This corporation is organized for the following purposes:
(a) To engage in the Real Estate Brokerage business and the doing of any
of any and all things related thereto.
(b) The ownership, purchase, sale, mortgage or pledge, and the dealing in
and with all kinds of and manner of property, whether real, personal,
tangible or intangible.
(c) The transaction of any and all other lawful business for which
corporations may be incorporated and the doing of all lawful things
related thereto.
ARTICLE IV - CAPITAL STOCK
This corporation is authorized to issue 7,5000 shares of $1.00 per value
common stock.
ARTICLE V - INITIAL REGISTERED OFFICE AND AGENT
This street address of the initial registered office of this corporation
is 6339-1 Argyle Forest Boulevard, Jacksonville, Florida 32244, and the name of
the initial registered agent of this corporation at that address is Leon J.
Panitz, Jr.
ARTICLE VI - INITIAL BOARD OF THE DIRECTORS
This corporation shall have two (2) directors initially. The number of
directors may be either increased or diminished from time to time by this
by-laws but shall never be less than one (1).
The names and addresses of the initial directors of the corporation are:
Leon J. Panitz, Jr. 6339-1 Argyle Forest Boulevard
Jacksonville, Florida 32244
Arthur M. Darby 6339-1 Argyle Forest Boulevard
Jacksonville, Florida 32244
ARTICLE VII - RESTRAINT ON TRANSFER OF SHARES
The shareholders may, be agreement, impose any reasonable restraint on the
transfer or alienation of shares.
ARTICLE VIII - INCORPORATOR
This corporation reserves the right to amend or repeal any provisions
contained in these Articles of Incorporation, or any amendment hereto, and any
right conferred upon he shareholders is subject to this reservation.
IN WITNESS WHEREOF, the undersigned subscriber has executed these Articles of
Incorporation , this 23, day of January, 1986.
/s/ Leon J. Panitz, Jr.
--------------------------
LEON J. PANITZ, JR.
STATE OF FLORIDA
COUNTY OF CLAY
2
BEFORE ME, a notary public authorized to take acknowledgments in the state
and county set forth above, personally appeared LEON J. PANITZ, JR., known to me
and to be the person who executed the foregoing Articles of Incorporation, and
he acknowledged before me that he executed those Articles of Incorporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, in the state and county aforesaid, this 23rd day of January, 1986.
----------------------------------
Notary Public, State of Florida
My Commission Expires: 12-6-88
(Seal)
3
Exhibit 3.3(l)
CERTIFICATE OF INCORPORATION
OF
BEAZER HOMES TEXAS HOLDINGS, INC.
ARTICLE I. The name of this corporation shall be "Beazer Homes Texas
Holdings, Inc."
ARTICLE II. Its registration office in the State of Delaware is to
be located at 1209 Orange Street, Wilmington, County of New Castle, Delaware
19801 and its registered agent at such address is The Corporation Trust Company.
ARTICLE III. The purpose or purposes of this corporation shall be to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE IV. The total number of shares of stock which this
corporation is authorized to issue is 30,000,000 shares of Common Stock, par
value $0.01 per share.
ARTICLE V. The name and address of the incorporator is as follows:
Ken Kimura, Paul, Hastings, Janofsky & Walker, 399 Park Avenue, 31st Floor, New
York, New York 10022.
ARTICLE VI. The Board of Directors shall have the power to adopt,
amend or repeal the by-laws.
ARTICLE VII. No director shall be personally liable to this
corporation or its stockholders for monetary damages for any breach of fiduciary
duty by such director as a director. Notwithstanding the foregoing sentence, a
director shall be liable to the extent provided by applicable law: (i) for
breach of the director's duty of loyalty to this corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant to Section
174 of the General Corporation Law of the State of Delaware or (iv) for any
transaction from which the director derived an improper personal benefit. No
amendment to or repeal of this Article Seven shall apply to or have any effect
on the liability or alleged liability of any director of this corporation for or
with respect to any acts or omissions of such director occurring prior to such
amendment.
IN WITNESS WHEREOF, the undersigned, being the incorporator
hereinbefore named, has executed, signed and acknowledged this certificate of
incorporation this 11th day of January, 1996.
By: /s/ Ken Kimura
Name: Ken Kimura
Title: Sole Incorporator
2
Exhibit 3.3(m)
Certificate of Amendment
of the Certificate of Incorporation of
Beazer Homes Texas Holdings, Inc.
Beazer Homes Texas Holdings, Inc., a Delaware corporation (the
"Company"), pursuant to Section 242 of the General Corporation Law of Delaware,
certifies that:
1. The Board of Directors of the Company and the stockholders of the
Company have adopted the following resolution amending the Company's Certificate
of Incorporation:
"RESOLVED, that the Certificate of Incorporation of Beazer Homes Texas
Holdings, Inc. be amended by changing Article IV thereof so that, as
amended, said Article shall be and read as follows:
'Article IV. The total number of shares of stock which this
corporation is authorized to issue is 3,000 shares of Common Stock,
par value $0.01 per share.'"
2. The foregoing amendment to the Certificate of Incorporation of
the Company has been duly adopted in accordance with the provisions of Section
242 of the General Corporation Law of Delaware.
IN WITNESS WHEREOF, Beazer Homes Texas Holdings, Inc., has caused
this Certificate of Amendment to be signed and attested by its duly authorized
officer this 29th day of March, 1996.
Beazer Homes Texas Holdings, Inc.
By: /s/ Ian J. McCarthy
Name: Ian J. McCarthy
Title: Authorized Officer
Exhibit 3.3(n)
CERTIFICATE OF LIMITED PARTNERSHIP
OF
BEAZER HOMES TEXAS, L.P.
This Certificate of Limited Partnership of Beazer Homes Texas, L.P.
(the "Limited Partnership") is being executed by the undersigned for the purpose
of forming a limited partnership pursuant to the Delaware Revised Uniform
Limited Partnership Act (6 Del. C. ss.17-101, et seq.).
1. The name of the Limited Partnership is "Beazer Homes Texas,
L.P.".
2. The address of the Limited Partnership's registered office in the
State of Delaware is 1209 Orange Street, City of Wilmington, County of New
Castle, Delaware 19801. The Limited Partnership's registered agent at that
address is The Corporation Trust Company.
3. The name and business address of the sole general partner is
Beazer Homes Texas Holdings, Inc., a Delaware corporation, c/o Beazer
Homes USA, Inc., 5775 Peachtree Dunwoody Road, Suite C-550, Atlanta,
Georgia 30342.
IN WITNESS WHEREOF, the undersigned, as the sole general partner of
the Limited Partnership, has caused this Certificate of Limited Partnership to
be duly executed this 26th day of March, 1996.
BEAZER HOMES TEXAS HOLDINGS, INC.
GENERAL PARTNER
By: /s/ David S. Weiss
Name: David S. Weiss
Title: Executive Vice President and CFO
Exhibit 3.4(b)
BY-LAWS
OF
BEAZER HOMES HOLDINGS CORP.
A DELAWARE CORPORATION
TABLE OF CONTENTS
Page
----
Article I -- Stockholders............................................ 1
1. Annual Meetings....................................... 1
2. Special Meetings...................................... 1
3. Quorums............................................... 2
4. Organization.......................................... 2
5. Voting; Proxies: Required Vote........................ 2
6. Inspectors............................................ 3
Article II -- Board of Directors..................................... 4
1. General Powers........................................ 4
2. Qualification; Number; Term; Remuneration............. 4
3. Quorum and Manner of Voting........................... 4
4. Places of Meetings.................................... 4
5. Annual Meeting........................................ 4
6. Regular Meetings...................................... 5
7. Special Meetings...................................... 5
8. Notice of Meetings.................................... 5
9. Organization.......................................... 5
10. Resignation........................................... 5
11. Vacancies............................................. 5
12. Action by Written Consent............................. 5
13. Electronic Communication.............................. 5
Article III -- Committees............................................ 6
1. Appointment........................................... 6
2. Procedures; Quorum and Manner of Acting............... 6
3. Action by Written Consent............................. 6
4. Electronic Communication.............................. 6
5. Termination........................................... 6
Article IV -- Officers............................................... 6
1. Election and Qualifications........................... 6
2. Term of Office and Remuneration....................... 7
3. Resignation; Removal.................................. 7
i
Page
----
4. Powers and Duties of Officers......................... 7
Article V -- Contracts, Etc.......................................... 8
1. Contracts............................................. 8
2. Proxies; Powers of Attorney; Other Instruments........ 8
Article VI -- Books and Records...................................... 9
1. Location.............................................. 9
2. Addresses of Stockholders............................. 9
3. Fixing Date for Determination of Stockholders of
Record................................................ 9
Article VII Certificates Representing Stock.......................... 10
1. Certificates, Signatures.............................. 10
2. Transfers of Stock.................................... 10
3. Fractional Shares..................................... 10
4. Lost, Stolen or Destroyed Certificates................ 11
Article VIII -- Dividends............................................ 11
Article IX -- Ratification........................................... 11
Article X -- Corporate Seal.......................................... 12
Article XI -- Fiscal Year............................................ 12
Article XII -- Waiver of Notice...................................... 12
Article XIII -- Amendments........................................... 12
Article XIV -- Indemnification....................................... 12
1. Power to Indemnify in Action, Suits or Proceedings
Other Than Those By or In The Right of the
Corporation........................................... 12
2. Power to Indemnify in Actions, Suits or Proceedings
By or In The Right of the Corporation................. 13
3. Authorization of Indemnification...................... 13
4. Good Faith Defined.................................... 14
ii
Page
----
5. Indemnification By A Court............................ 14
6. Expenses Payable In Advance........................... 14
7. Non-Exclusivity and Survival of Indemnification....... 14
8. Meaning of "other enterprises" in connection with
Employee Benefit Plans, etc........................... 15
9. Insurance............................................. 15
iii
ARTICLE I -- STOCKHOLDERS
1. Annual Meetings.
(a) All meetings of the Stockholders for the election of
directors shall be held in the County of New Castle, State of Delaware, at such
place as may be fixed from time to time by the Board of Directors, or at such
other place either within or without the State of Delaware as shall be
designated from time to time by the Board of Directors and stated in the notice
of the meeting. Meetings of Stockholders for any other purpose may be held at
such time and place, within or without the State of Delaware, as shall be stated
in the notice of the meeting or in a duly executed waiver of notice thereof.
(b) Annual meetings of Stockholders shall be held on such date
and at such time as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting, at which they shall elect by
a plurality vote a Board of Directors, and transact such other business as may
properly be brought before the meeting.
(c) Written notice of the annual meeting stating the place,
date, and hour of the meeting shall be given to each Stockholder entitled to
vote at such meeting not less than ten days nor more than sixty days prior to
the date of the meeting.
(d) The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten days before every meeting of
Stockholders, a complete list of the Stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
Stockholder and the number of shares registered in the name of each Stockholder.
Such list shall be open to the examination of any Stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any Stockholder who is
present. The stock ledger shall be the only evidence as to the Stockholders
entitled to examine the stock ledger, the list required by this Section 1 or the
books of the Corporation, or to vote in person or by proxy at any meeting of
Stockholders.
2. Special Meetings.
(a) Special meetings of the Stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the Certificate of
Incorporation of the Corporation, may be called by the President and shall be
called by the President or Secretary at the request in writing of a majority of
the Board of Directors, or at the request in writing of a Stockholder or
Stockholders owning a majority in amount of the entire capital stock of
the Corporation issued and outstanding and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting.
(b) Written notice of a special meeting stating the place,
date, and hour of the meeting and, in general terms, the purpose or purposes for
which the meeting is called, shall be given not less than ten days nor more than
sixty days prior to the date of the meeting, to each Stockholder entitled to
vote at such meeting. Whenever the directors shall fail to fix such place, the
meeting shall be held at the principal executive offices of the Corporation.
(c) Business transacted at any special meeting of Stockholders
shall be limited to the purpose or purposes stated in the notice.
3. Quorums.
(a) The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the Stockholders for the
transaction of business except as otherwise provided by statute or by the
Certificate of Incorporation. If, however, such quorum shall not be present or
represented at any meeting of the Stockholders, the Stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting, at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each Stockholder of record entitled to
vote at the meeting. When a quorum is once present it is not broken by the
subsequent withdrawal of any Stockholder.
(b) When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one on which by express provision of the Delaware General
Corporation Law, the Certificate of Incorporation or these By-Laws, a different
vote is required in which case such express provision shall govern and control
the decision of such question.
4. Organization. Meetings of Stockholders shall be presided over by
the Chairman, if any, or if none or in the Chairman's absence the President, if
any, or if none or in the President's absence, by a Chairman to be chosen by the
Stockholders entitled to vote who are present in person or by proxy at the
meeting. The Secretary of the Corporation, or in the Secretary's absence an
Assistant Secretary, shall act as Secretary of every meeting, but
2
if neither the Secretary nor an Assistant Secretary is present, the presiding
officer of the meeting shall appoint any person present to act as Secretary of
the meeting.
5. Voting; Proxies: Required Vote.
(a) At each meeting of Stockholders, every Stockholder shall
be entitled to vote in person or by proxy appointed by an instrument in writing,
subscribed by such Stockholder or by such Stockholder's duly authorized
attorney-in-fact but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period), and, unless
the Certificate of Incorporation provides otherwise, shall have one vote for
each share of stock entitled to vote registered in the name of such Stockholder
on the books of the Corporation on the applicable record date fixed pursuant to
these By-Laws. At all elections of directors the voting may but need not be by
ballot and the affirmative vote of holders of a plurality of the stock present
in person or represented by proxy and entitled to vote on such election shall
elect such directors. Except as otherwise required by law or the Certificate of
Incorporation, any other action shall be authorized by the affirmative vote of
holders of a majority of the stock present in person or represented by proxy and
entitled to vote on such matter.
(b) Any action required or permitted to be taken at any
meeting of Stockholders may, except as otherwise required by law or the
Certificate of Incorporation, be taken without a meeting, without prior notice
and without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted, and the writing or
writings are filed with the permanent records of the Corporation. Prompt notice
of the taking of corporate action without a meeting by less than unanimous
written consent shall be given to these Stockholders who have not consented in
writing.
(c) Where a separate vote by a class or classes is required, a
majority of the outstanding shares of such class or classes, present in person
or represented by proxy, shall constitute a quorum entitled to vote on the
matter and the affirmative vote of the majority of shares of such class or
classes present in person or represented by proxy at the meeting shall be the
act of such class, unless otherwise provided in the Corporation's Certificate of
Incorporation.
6. Inspectors. The Board of Directors, in advance of any meeting,
may, but need not, appoint one or more inspectors of election to act at the
meeting or any adjournment thereof. If an inspector or inspectors are not so
appointed, the person presiding at the meeting may, but need not, appoint one or
more inspectors. In case any person who may be appointed as an inspector fails
to appear or act, the vacancy may be filled by appointment made by the Board of
Directors in advance of the meeting or at the meeting by
3
the person presiding thereat. Each inspector, if any, before entering upon the
discharge of his or her duties, shall take and sign an oath faithfully to
execute the duties of inspector at such meeting with strict impartiality and
according to the best of his or her ability. The inspectors, if any, shall
determine the number of shares of stock outstanding and the voting power of
each, the shares of stock represented at the meeting, the existence of a quorum,
and the validity and effect of proxies, and shall receive votes, ballots or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots or consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all Stockholders. On request of the person presiding at
the meeting, the inspector or inspectors, if any, shall make a report in writing
of any challenge, question or matter determined by such inspector or inspectors
and execute a certificate of any fact found by such inspector or inspectors.
ARTICLE II -- BOARD OF DIRECTORS
1. General Powers. The business, property and affairs of the
Corporation shall be managed by, or under the direction of, the Board of
Directors.
2. Qualification; Number; Term; Remuneration.
(a) Each director shall be at least 18 years of age. A
director need not be a Stockholder, a citizen of the United States, or a
resident of the State of Delaware. The number of directors constituting the
entire Board of Directors shall be one or such other number as may be fixed from
time to time by the Board of Directors or the Stockholders. One of the directors
may be selected by the Board of Directors to be its Chairman, who shall preside
at meetings of the Stockholders and the Board of Directors and shall have such
other duties, if any, as may from time to time be assigned by the Board of
Directors. In the absence of formal selection, the President of the Corporation
shall serve as Chairman. The use of the phrase "entire Board" herein refers to
the total number of directors which the Corporation would have if there were no
vacancies.
(b) Directors who are elected at an annual meeting of
Stockholders, and directors who are elected in the interim to fill vacancies and
newly created directorships, shall hold office until the next annual meeting of
Stockholders and until their successors are elected and qualified or until their
earlier resignation or removal.
(c) Directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a fixed sum
for attendance at each meeting of the Board of Directors or a stated salary for
serving as director. No such payment shall preclude any director from serving
the Corporation in any other capacity and receiving compensation therefor.
Members of special or standing Committees may be allowed like compensation for
attending Committee meetings.
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3. Quorum and Manner of Voting. Except as otherwise provided by law,
a majority of the entire Board of Directors shall constitute a quorum. A
majority of the directors present, whether or not a quorum is present, may
adjourn a meeting from time to time to another time and place without notice.
The vote of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors.
4. Places of Meetings. Meetings of the Board of Directors may be
held at any place within or without the State of Delaware, as may from time to
time be fixed by resolution of the Board of Directors, or as may be specified in
the notice of meeting.
5. Annual Meeting. Following the annual meeting of Stockholders, the
newly elected Board of Directors shall meet for the purpose of the election of
officers and the transaction of such other business as may properly come before
the meeting. Such meeting may be held without notice immediately after the
annual meeting of Stockholders at the same place at which such Stockholders'
meeting is held.
6. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such times and places as the Board of Directors shall from time
to time by resolution determine.
7. Special Meetings. Special meetings of the Board of Directors
shall be held whenever called by the Chairman of the Board, President, or by a
majority of the directors then in office.
8. Notice of Meetings. A notice of the place, date and time and the
purpose or purposes of each meeting of the Board of Directors shall be given to
each director by mailing the same at least two days before the meeting, or by
telephoning or faxing the same or by delivering the same personally not later
than the day before the day of the meeting.
9. Organization. At all meetings of the Board of Directors, the
Chairman or in the Chairman's absence or inability to act, the President, or in
the President's absence, a Chairman chosen by the directors, shall preside. The
Secretary of the Corporation shall act as secretary at all meetings of the Board
of Directors when present, and, in the Secretary's absence, the presiding
officer may appoint any person to act as Secretary.
10. Resignation. Any director may resign at any time upon written
notice to the Corporation and such resignation shall take effect upon receipt
thereof by the President or Secretary, unless otherwise specified in the
resignation. Any or all of the director may be removed with or without cause, by
the holders of a majority of the shares of stock outstanding and entitled to
vote for the election of directors.
5
11. Vacancies. Unless otherwise provided in these By-Laws, vacancies
on the Board of Directors, whether caused by resignation, death,
disqualification, removal, an increase in the authorized number of directors or
otherwise, may be filled by the affirmative vote of a majority of the remaining
directors, although less than a quorum, or by a sole remaining director, or at a
special meeting of the Stockholders, by vote of the Stockholders required for
the election of directors generally.
12. Action by Written Consent. Any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a meeting
if all the directors consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board of Directors.
13. Electronic Communication. Any member or members of the Board of
Directors may participate in a meeting of the Board of Directors by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear and speak to each other.
ARTICLE III -- COMMITTEES
1. Appointment. The Board of Directors may, by resolution passed by
a majority of the whole Board of Directors, designate one or more Committees,
each Committee to consist of two or more of the directors of the Corporation.
The Board of Directors may designate one or more directors as alternate members
of any Committee, who may replace any absent or disqualified member at any
meeting of the Committee. Any such Committee, to the extent provided in the
resolution, shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the Corporation, and may authorize
the seal of the Corporation to be affixed to all papers which may require it.
Such Committee or Committees shall have such name or names as may be determined
from time to time by resolution adopted by the Board of Directors.
2. Procedures; Quorum and Manner of Acting. Each Committee shall fix
its own rules of procedure, and shall meet where and as provided by such rules
or by resolution of the Board of Directors. Except as otherwise provided by law,
the presence of a majority of the then appointed members of a Committee shall
constitute a quorum for the transaction of business by that Committee, and in
every case where a quorum is present the affirmative vote of a majority of the
members of the Committee present shall be the act of the Committee. Each
Committee shall keep minutes of its proceedings, and actions taken by a
Committee shall be reported to the Board of Directors.
3. Action by Written Consent. Any action required or permitted to be
taken at any meeting of any Committee of the Board of Directors may be taken
without a
6
meeting if all the members of the Committee consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Committee.
4. Electronic Communication. Any member or members of a Committee of
the Board of Directors may participate in a meeting of a Committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear and speak to each other.
5. Termination. In the event any person shall cease to be a director
of the Corporation, such person shall simultaneously therewith cease to be a
member of any Committee appointed by the Board of Directors.
ARTICLE IV -- OFFICERS
1. Election and Qualifications. The Board of Directors at its first
meeting held after each annual meeting of Stockholders shall elect the officers
of the Corporation, which shall include a President and a Secretary, and may
include, by election or appointment, one or more Vice-Presidents (any one or
more of whom may be given an additional designation of rank or function), a
Treasurer and such Assistant Secretaries, such Assistant Treasurers and such
other officers as the Board of Directors may from time to time deem proper. Each
officer shall have such powers and duties as may be prescribed by these By-Laws
and as may be assigned by the Board of Directors or the President. Any two or
more offices may be held by the same person.
2. Term of Office and Remuneration. The term of office of all
officers shall be one year and until their respective successors have been
elected and qualified, but any officer may be removed from office, either with
or without cause, at any time by the Board of Directors. Any vacancy in any
office arising from any cause may be filled for the unexpired portion of the
term by the Board of Directors. The remuneration of all officers of the
Corporation may be fixed by the Board of Directors or in such manner as the
Board of Directors shall provide.
3. Resignation; Removal. Any officer may resign at any time upon
written notice to the Corporation and such resignation shall take effect upon
receipt thereof by the President or Secretary, unless otherwise specified in the
resignation. Any officer shall be subject to removal, with or without cause, at
any time by the Board of Directors.
4. Powers and Duties of Officers.
(a) The Chairman of the Board of Directors, if there be one,
shall preside at all meetings of the Board of Directors and shall have such
other powers and duties as may from time to time be assigned by the Board of
Directors.
7
(b) The President shall be the chief executive officer of the
Corporation and shall preside at all meetings of the Stockholders and, if there
is no Chairman, of the Board of Directors and shall have general management of
and supervisory authority over the property, business and affairs of the
Corporation and its other officers. The President may execute and deliver in the
name of the Corporation powers of attorney, contracts, bonds and other
obligations and instruments, and shall have such other authority and perform
such other duties as from time to time may be assigned by the Board of
Directors. The President shall see that all orders and resolutions of the Board
of Directors are carried into effect and shall perform such additional duties
that usually pertain to this office.
(c) A Vice President may execute and deliver in the name of
the Corporation powers of attorney, contracts, bonds and other obligations and
instruments pertaining to the regular course of such Vice President's duties,
and shall have such other authority and perform such other duties as from time
to time may be assigned by the Board of Directors or the President.
(d) The Treasurer shall in general have all duties and
authority incident to the position of Treasurer and such other duties and
authority as may be assigned by the Board of Directors or the President. The
Treasurer shall keep full and accurate accounts of receipts and disbursements in
books belonging to the Corporation and shall deposit all moneys and other
valuable effects in the name and to the credit of the Corporation in such
depositories as may be designated by or at the direction of the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors or the President, and shall render, upon
request, an account of all such transactions.
(e) The Secretary shall in general have all the duties and
authority incident to the position of Secretary and such other duties and
authority as may be assigned by the Board of Directors or the President. The
Secretary shall attend all meetings of the Board of Directors and all meetings
of Stockholders and record all the proceedings thereat in a book or books to be
kept for that purpose. The Secretary shall give, or cause to be given, notice of
all meetings of the Stockholders and special meetings of the Board of Directors.
The Secretary shall have custody of the seal of the Corporation and any officer
of the Corporation shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by the signature of the
Secretary or any other officer.
(f) Any assistant officer shall have such duties and authority
as the officer such assistant officer assists and, in addition, such other
duties and authority as the Board of Directors or President shall from time to
time assign.
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ARTICLE V -- CONTRACTS, ETC.
1. Contracts. The Board of Directors may authorize any person or
persons, in the name and on behalf of the Corporation, to enter into or execute
and deliver any and all deeds, bonds, mortgages, contracts and other obligations
or instruments, and such authority may be general or confined to specific
instances.
2. Proxies; Powers of Attorney; Other Instruments.
(a) The Chairman, the President, any Vice President, the
Treasurer or any other person designated by any of them shall have the power and
authority to execute and deliver proxies, powers of attorney and other
instruments on behalf of the Corporation in connection with the execution of
contracts, the purchase of real or personal property, the rights and powers
incident to the ownership of stock by the Corporation and such other situations
as the Chairman, the President, such Vice President or the Treasurer shall
approve, such approval to be conclusively evidenced by the execution of such
proxy, power of attorney or other instrument on behalf of the Corporation.
(b) The Chairman, the President, any Vice President, the
Treasurer or any other person authorized by proxy or power of attorney executed
and delivered by any of them on behalf of the Corporation may attend and vote at
any meeting of stockholders of any company in which the Corporation may hold
stock, and may exercise on behalf of the Corporation any and all of the rights
and powers incident to the ownership of such stock at any such meeting, or
otherwise as specified in the proxy or power of attorney so authorizing any such
person. The Board of Directors, from time to time, may confer like powers upon
any other person.
ARTICLE VI -- BOOKS AND RECORDS
1. Location. The books and records of the Corporation may be kept at
such place or places within or outside the State of Delaware as the Board of
Directors or the respective officers in charge thereof may from time to time
determine. The record books containing the names and addresses of all
Stockholders, the number and class of shares of stock held by each and the dates
when they respectively became the owners of record thereof shall be kept by the
Secretary as prescribed in these By-Laws or by such officer or agent as shall be
designated by the Board of Directors.
2. Addresses of Stockholders. Notices of meetings and all other
corporate notices may be delivered personally or mailed to each Stockholder at
the Stockholder's address as it appears on the records of the Corporation.
9
3. Fixing Date for Determination of Stockholders of Record.
(a) In order that the Corporation may determine the
Stockholders entitled to notice of or to vote at any meeting of Stockholders or
any adjournment thereof, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors and which record date shall not
be more than sixty days nor less than ten days before the date of such meeting.
If no record date is fixed by the Board of Directors, the record date for
determining Stockholders entitled to notice of or to vote at a meeting of
Stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held. A determination of
Stockholders of record entitled to notice of or to vote at a meeting of
Stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the
Stockholders entitled to consent to corporate action in writing without a
meeting, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the Board of Directors and which date shall not be more than ten days after
the date upon which the resolution fixing the record date is adopted by the
Board of Directors. If no record date has been fixed by the Board of Directors,
the record date for determining Stockholders entitled to consent to corporate
action in writing without a meeting, when no prior action by the Board of
Directors is required, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of Stockholders are
recorded. Delivery made to the Corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board of Directors and prior action by the Board of
Directors is required by law, the record date for determining Stockholders
entitled to consent to corporate action in writing without a meeting shall be at
the close of business on the day on which the Board of Directors adopts the
resolution taking such prior action.
(c) In order that the Corporation may determine the
Stockholders entitled to receive payment of any dividend or other distribution
or allotment of any rights or the Stockholders entitled to exercise any rights
in respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action not contemplated by paragraph (a) or (b) of this Section
3, the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted and
which record date shall be not more than sixty days prior to such action. If no
record date is fixed, the record date for determining Stockholders for any such
purpose shall
10
be at the close of business on the day on which the Board of Directors adopts
the resolution relating thereto.
ARTICLE VII CERTIFICATES REPRESENTING STOCK
1. Certificates, Signatures. The shares of the Corporation shall be
represented by certificates, provided that the Board of Directors of the
Corporation may provide by resolution or resolutions that some or all of any or
all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock represented
by certificates and upon request every holder of uncertificated shares shall be
entitled to have a certificate, signed by or in the name of the Corporation by
the Chairman or Vice Chairman of the Board of Directors, or the President or
Vice-President, and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Corporation, representing the number of shares
registered in certificate form. Any and all signatures on any such certificate
may be facsimiles. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
The name of the holder of record of the shares represented thereby, with the
number of such shares and the date of issue, shall be entered on the books of
the Corporation. The Board of Directors shall have power and authority to make
all such rules and regulations as it may deem expedient concerning the issue,
transfer and registration of certificates representing shares of the
Corporation.
2. Transfers of Stock. Upon compliance with provisions restricting
the transfer or registration of transfer of shares of stock, if any, shares of
capital stock shall be transferrable on the books of the Corporation only by the
holder of record thereof in person, or by duly authorized attorney, upon
surrender and cancellation of certificates for a like number of shares, properly
endorsed, and the payment of all taxes due thereon.
3. Fractional Shares. The Corporation may, but shall not be required
to, issue certificates for fractions of a share where necessary to effect
authorized transactions, or the Corporation may pay in cash the fair value of
fractions of a share as of the time when those entitled to receive such
fractions are determined, or it may issue scrip in registered or bearer form
over the manual or facsimile signature of an officer of the Corporation or of
its agent, exchangeable as therein provided for full shares, but such scrip
shall not entitle the holder to any rights of a Stockholder except as therein
provided.
4. Lost, Stolen or Destroyed Certificates. The Corporation may issue
a new certificate of stock in place of any certificate, theretofore issued by
it, alleged to have
11
been lost, stolen or destroyed, and the Board of Directors may require the owner
of any lost, stolen or destroyed certificate, or his legal representative, to
give the Corporation a bond sufficient to indemnify the Corporation against any
claim that may be made against it on account of the alleged loss, theft or
destruction of any such certificate or the issuance of any such new certificate.
ARTICLE VIII -- DIVIDENDS
Subject to the provisions of applicable law and the Certificate of
Incorporation, the Board of Directors shall have full power to determine whether
any, and, if any, what part of any, funds legally available for the payment of
dividends shall be declared as dividends and paid to Stockholders; the division
of the whole or any part of such funds of the Corporation shall rest wholly
within the lawful discretion of the Board of Directors, and it shall not be
required at any time, against such discretion, to divide or pay any part of such
funds among or to the Stockholders as dividends or otherwise; and before payment
of any dividend, there may be set aside out of any funds of the Corporation
available for dividends such sum or sums as the Board of Directors from time to
time, in its absolute discretion, deems proper as a reserve or reserves to meet
contingencies or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for any proper purpose, and the Board of
Directors may modify or abolish any such reserve. Stockholders shall receive
dividends pro rata in proportion to the number of shares of Common Stock
respectively held by them. A holder of Common Stock shall be deemed to share pro
rata in all dividends declared by the Board of Directors within the meaning of
the preceding sentence if such Stockholder receives assets (whether consisting
of cash, securities, real property, equipment, inventory or other assets) the
fair market value of which is in the same proportion to the fair market value of
the total assets of the Corporation available for distribution as a dividend as
the number of shares of Common Stock held by such holder of Common Stock is to
the total number of issued and outstanding shares of Common Stock of the
Corporation. A Stockholder shall not have the right to receive a pro rata share
of each or any such asset available for distribution as a dividend, however, the
Corporation shall not be prohibited hereby from making a pro rata distribution
of each or any such asset available for distribution as a dividend. The fair
market value of any and all assets of the Corporation distributed as a dividend
shall be determined in the sole discretion of the Corporation's Board of
Directors.
ARTICLE IX -- RATIFICATION
Any transaction, questioned in any lawsuit on the ground of lack of
authority, defective or irregular execution, adverse interest of any director,
officer or Stockholder, nondisclosure, miscomputation, or the application of
improper principles or practices of accounting, may be ratified before or after
judgment, by the Board of Directors or by the Stockholders, as appropriate, and
if so ratified shall have the same force and effect as if the
12
questioned transaction had been originally duly authorized. Such ratification
shall be binding upon the Corporation and its Stockholders and shall constitute
a bar to any claim or execution of any judgment in respect of such questioned
transaction.
ARTICLE X -- CORPORATE SEAL
The corporate seal shall contain the words "Corporate Seal" and such
additional information as the officer inscribing such seal shall determine in
such officer's sole discretion. The corporate seal may be used by causing it or
a facsimile thereof to be impressed or affixed or reproduced or otherwise
displayed or it may be manually inscribed.
ARTICLE XI -- FISCAL YEAR
The fiscal year of the Corporation shall be fixed, and shall be
subject to change, by the Board of Directors. Unless otherwise fixed by the
Board of Directors, the fiscal year of the Corporation shall end on September
30.
ARTICLE XII -- WAIVER OF NOTICE
Whenever notice is required to be given by these By-Laws or by the
Certificate of Incorporation or by law, a written waiver thereof, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to notice.
ARTICLE XIII -- AMENDMENTS
The Board of Directors shall have power to adopt, amend or repeal
By-Laws. By-Laws adopted by the Board of Directors may be repealed or changed,
and new By-Laws made, by the Stockholders, and the Stockholders may prescribe
that any By-Law made by them shall not be altered, amended or repealed by the
Board of Directors.
ARTICLE XIV -- INDEMNIFICATION
1. Power to Indemnify in Action, Suits or Proceedings Other Than
Those By or In The Right of the Corporation. Subject to Section 3 of this
Article XIV, the Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' and
other professionals' fees), judgments,
13
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that the conduct was unlawful.
2. Power to Indemnify in Actions, Suits or Proceedings By or In The
Right of the Corporation. Subject to Section 3 of this Article XIV, the
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' and
other professionals' fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the Corporation, except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Corporation unless and only to the extent
that the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
3. Authorization of Indemnification. Any indemnification under this
Article XIV (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because such
person has met the applicable standard of conduct set forth in Section 1 or
Section 2 of this Article XIV, as the case may be. Such determination shall be
made (i) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (ii) if
such a quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (iii) if the Board of Directors so directs, by the Stockholders. To
the extent, however, that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding described above, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses (including
attorneys' and other
14
professionals' fees) actually and reasonably incurred by such person in
connection therewith, without the necessity of authorization in the specific
case.
4. Good Faith Defined. For purposes of any determination under
Section 3 of this Article XIV, a person shall be deemed to have acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the Corporation, or, with respect to any criminal action or
proceeding, to have had no reasonable cause to believe the conduct was unlawful,
if the action is based on (a) the records or books of account of the Corporation
or another enterprise (as defined below in this Section 4), or on information
supplied to such person by the officers of the Corporation or another enterprise
in the course of their duties, unless such person had reasonable cause to
believe that reliance thereon would not be justifiable, or on (b) the advice of
legal counsel for the Corporation or another enterprise, or on information or
records given or reports made to the Corporation or another enterprise by an
independent certified public accountant, independent financial adviser,
appraiser or other expert, as to matters reasonably believed to be within such
other person's professional or expert competence. The term "another enterprise"
as used in this Section 4 shall mean any other corporation or any partnership,
joint venture, trust or other enterprise of which such person is or was serving
at the request of the Corporation as a director, officer, employee or agent. The
provisions of this Section 4 shall not be deemed to be exclusive or to limit in
any way the circumstances in which a person may be deemed to have met the
applicable standard of conduct set forth in Sections 1 or 2 of this Article XIV,
as the case may be.
5. Indemnification By A Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article XIV, and
notwithstanding the absence of any determination thereunder, any director,
officer, employee or agent may apply to any court of competent jurisdiction in
the State of Delaware for indemnification to the extent otherwise permissible
under Sections 1 and 2 of this Article XIV. The basis of such indemnification by
a court shall be a determination by such court that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standards of conduct set forth in Sections 1 or 2 of this
Article XIV, as the case may be. Notice of any application for indemnification
pursuant to this Section 5 shall be given to the Corporation promptly upon the
filing of such application.
6. Expenses Payable In Advance. Expenses (including attorneys' and
other professionals' fees) incurred by an officer or director in defending any
threatened or pending civil, criminal, administrative or investigative action,
suit or proceeding may, but shall not be required to, be paid by the Corporation
in advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or officer, to repay
such amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the Corporation as authorized in this Article XIV.
Such expenses (including attorneys' and other professionals' fees) incurred by
other employees
15
and agents may be so paid upon such terms and conditions, if any, as the Board
of Directors deems appropriate.
7. Non-Exclusivity and Survival of Indemnification. The
indemnification and advancement of expenses provided by or granted pursuant to
this Article XIV shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
any By-Law, agreement, contract, vote of Stockholders or of disinterested
directors, or pursuant to the direction (howsoever embodied) of any court of
competent jurisdiction or otherwise, it being the policy of the Corporation that
indemnification of the persons specified in Sections 1 and 2 of this Article XIV
(as distinguished from advancement of funds pursuant to Section 6 of this
Article XIV) shall be made to the fullest extent permitted by law. The
provisions of this Article XIV shall not be deemed to preclude the
indemnification of any person who is not specified in Sections 1 and 2 of this
Article XIV but whom the Corporation has the power or obligation to indemnify
under the provisions of the General Corporation Law of the State of Delaware, or
otherwise. The indemnification provided by this Article XIV shall continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors, administrators and other
comparable legal representatives of such person. The rights conferred in this
Article XIV shall be enforceable as contract rights, and shall continue to exist
after any rescission or restrictive modification hereof with respect to events
occurring prior thereto.
8. Meaning of "other enterprises" in connection with Employee
Benefit Plans, etc. For purposes of this Article XIV (including Sections 1, 2, 4
and 9 hereof), references to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on a person
with respect to an employee benefit plan; references to "serving at the request
of the Corporation" shall include any service as a director, officer, employee
or agent of the Corporation which imposes duties on, or involves services by,
such director, officer, employee, or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who has acted in good
faith and in a manner reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of the Corporation" as
referred to in this Article XIV.
9. Insurance. The Corporation may, but shall not be required to,
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person's status as such, whether or
not the Corporation would have the power or the obligation to indemnify such
person against such liability under the provisions of this Article XIV.
16
Exhibit 3.4(d)
BY-LAWS
OF
BEAZER MORTGAGE CORPORATION
(a Delaware corporation)
ARTICLE I
Stockholders
SECTION 1. Annual Meetings. (a) All meetings of the Stockholders for
the election of directors shall be held in the Country of New Castle, State of
Delaware, at such place as may be fixed from time to time by the Board of
Directors, or at such other place either within or without the State of Delaware
as shall be designated from time to time by the Board of Directors and stated in
the notice of the meeting. Meetings of Stockholders for any other purpose may be
held at such time and place, within or without the State of Delaware, as shall
be stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
(b) Annual meetings of Stockholders shall be held on such date and
at such time as shall be designated from time to time by the Board of Directors
and stated in the notice of the meeting, at which they shall elect by a
plurality vote a Board of Directors, and transact such other business as may be
properly be brought before the meeting.
(c) Written notice of the annual meeting stating the place, date and
hour of the meeting shall be given to each Stockholder entitled to vote at such
meeting not less than ten days nor more than sixty days prior to the date of the
meeting.
(d) The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten days before every meeting of
Stockholders, a complete list of the Stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
Stockholder and the number of share registered in the name of each Stockholder.
Such list shall be open to the examination of any Stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to
be held, which place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any Stockholder who is present. The stock
ledger shall be the only evidence as to the Stockholders entitled to examine the
stock ledger, the list required by this section or the books of the Corporation,
or to vote in person or by proxy at any meeting of Stockholders.
SECTION 2. Special Meetings. (a) Special meetings of the
Stockholders, for any purpose or purposes, unless otherwise prescribed by
statute or by the certificate of Incorporation of the Corporation, may be called
by the President and shall be called by the President or Secretary at the
request in writing of a majority in amount of the entire capital stock of the
Corporation issued and outstanding and entitled to vote. Such request shall
state the purpose of purposes of the proposed meeting.
(b) Written notice of a special meeting stating the place, date, and
hour of the meeting and, in general terms, the purpose or purposes for which the
meeting is called, shall be given not less than ten days nor more than sixty
days prior to the date of the meeting, to each Stockholder entitled to vote at
such meeting. Whenever the directors shall fail to fix such place, the meeting
shall be held at the principal executive offices of the Corporation.
(c) Business transacted at any special meeting of Stockholders shall
be limited to the purpose or purposes stated in the notice.
SECTION 3. Quorums. (a) The holders of a majority of the stock
issued and outstanding entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
Stockholders for the transaction of business except as otherwise provided by
statute or by the certificate of incorporation. If, however, such quorum shall
not be present or represented at any meeting of the Stockholders, the
Stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting, at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each Stockholder of
record entitled to vote at the meeting. When a quorum is once present it is not
broken by the subsequent withdrawal of any Stockholder.
2
(b) When a quorum is present at any meeting, the vote of the holders
of a majority of the stock having voting power present in person or represented
by proxy shall decide any question brought before such meeting, unless the
question is one on which by express provision of the Delaware General
Corporation Law or of the Certificate of Incorporation, a different vote is
required in which case such express provision shall govern and control the
decision of such question.
SECTION 4. Organization. Meetings or Stockholders shall be presided
over by the Chairman, if any, or if none or in the Chairman's absence the
President, if any, or if none or in the President's absence, by a Chairman to be
chosen by the Stockholders entitled to vote who are present in person or by
proxy at the meeting. The Secretary of the Corporation, or in the Secretary's
absence an Assistant Secretary, shall act as Secretary of every meeting, but if
neither the Secretary nor an Assistant Secretary is present, the presiding
officer of the meeting shall appoint any person present to act as Secretary of
the meeting.
SECTION 5. Voting; Proxies; Required Vote. (a) At each meeting of
Stockholders, every Stockholder shall be entitled to vote in person or by proxy
appointed by an instrument in writing, subscribed by such Stockholder or by such
Stockholder's duly authorized attorney-in-fact (but no such proxy shall be voted
or acted upon after three years from its date, unless the proxy provides for a
longer period), and, unless the Certificate of Incorporation provides otherwise,
shall have one vote for each share of stock entitled to vote registered in the
name of such Stockholder on the books of the Corporation on the applicable
record date fixed pursuant to these By-Laws. At all elections of directors the
voting may but need not be by ballot and a plurality of the votes case there
shall elect. Except as otherwise required by law or the Certificate of
Incorporation, any other action shall be authorized by a majority of the votes
cast.
(b) Any action required or permitted to be taken at any meeting of
Stockholders may, except as otherwise required by law of the Certificate of
Incorporation, be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of record of the issued and outstanding capital stock of
the Corporation having a majority of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted, and the writing or writings are filed with the permanent
records of the Corporation. Prompt notice of the taking of corporate action
without a meeting by less than unanimous written consent shall be given to those
Stockholders who have not consented in writing.
3
(c) Where a separate vote by a class or classes, present in person
or represented by proxy, shall constitute a quorum entitled to vote on that
matter, the affirmative vote of the majority of shares of such class of classes
present in person or represented by proxy at the meeting shall be the act of
such class, unless otherwise provided in the Corporation's Certificate of
Incorporation.
SECTION 6. The Board of Directors, in advance of any meeting, may,
but need not, appoint one or more inspectors of election to act at the meeting
or any adjournment thereof. If an inspector or inspectors are not so appointed,
the person presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an inspector fails to
appear or act, the vacancy may be filled by appointment made by the directors in
advance of the meeting or at the meeting by the person presiding thereat. Each
Inspector, if any, before entering upon the discharge of his or her duties,
shall take and sign an oath faithfully to execute the duties of inspector at
such meeting with strict impartiality and according to the best of his ability.
The inspectors, if any, shall determine the number of shares of stock
outstanding and the voting power of each, the shares of stock represented at the
meeting, the existence of a quorum, and the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and tabulate all
votes, ballots or consents, determine the result, and do such acts as are proper
to conduct the election or vote with fairness to all Stockholders. On request of
the person presiding at the meeting, the inspector or inspectors, if any, shall
make a report in writing of any challenge, question or matter determined by such
inspector or inspectors and execute a certificate of any fact found by such
inspector or inspectors.
ARTICLE II
Board of Directors
SECTION 1. General Powers. The business, property and affairs of the
Corporation shall be managed by, or under the direction of, the Board of
Directors.
SECTION 2. Qualification; Number; Term; Remuneration. (a) Each
director shall be at least 18 years of age. A director need not be a
Stockholder, a citizen of the United States, or a resident of the State of
Delaware. The number of directors constituting the entire Board shall be one or
such other number not greater than ten as may be fixed from time to time by the
Board of directors or the Stockholders. One of the directors may be selected by
the Board of Directors to be its Chairman, who shall preside at meetings of the
stockholders and the Board of Directors and shall have such other
4
duties, if any, as may from time to time be assigned by the Board of Directors.
In the absence of formal selection, the President of the Corporation shall serve
as Chairman. The use of the phrase "entire Board" herein refers to the total
number of directors which the Corporation would have if there were no vacancies.
(b) Directors who are elected at an annual meeting of Stockholders,
and directors who are elected in the interim to fill vacancies and newly created
directorships, shall hold office until next annual meeting of Stockholders and
until their successors are elected and qualified or until their earlier
resignation or removal.
(c) Directors may be paid their expenses, if any, of attendance at
each meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
Committee meetings.
SECTION 3. Quorum and Manner of Voting. Except as otherwise provided
by law, a majority of the entire Board of directors shall constitute a quorum. A
majority of the directors present, whether or not a quorum is present, may
adjourn a meeting from time to time to another time and place without notice.
The vote of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors.
SECTION 4. Places of Meetings. Meetings of the Board may be held at
any place within or without the State of Delaware, as may from time to time be
fixed by resolution of the Board of Directors, or as may be specified in the
notice of meeting.
SECTION 5. Annual Meeting. Following the annual meeting of
Stockholders, the newly elected Board of Directors shall meet for the purpose of
the election of officers and the transaction of such other business as may
properly come before the meeting. Such meeting may be held without notice
immediately after the annual meeting of stockholders at the same place at which
such Stockholders' meeting of Stockholders at the same place at which such
Stockholders' meeting is held.
SECTION 6. Regular Meetings. Regular meetings of the Board of
Directors shall from time to time by resolution determine.
5
SECTION 7. Special Meetings. Special meetings of the Board of
Directors shall be held whenever called by the Chairman of Board, President, or
by a majority of the directors then in office.
SECTION 8. Notice of Meetings. A notice of the place, date and time
and the purpose or purposes of each meeting of the Board of Directors shall be
given to each director by mailing the same at least two days before the meeting,
or by telephoning or faxing the same or by delivering the same personally not
later than the day before the day of the meeting.
SECTION 9. Organization. At all meetings of the Board of Directors,
the Chairman or in the Chairman's absence or inability to act, the President, or
in the President's absence, a Chairman chosen by the directors, shall preside.
The Secretary of the corporation shall act as secretary at all meetings of the
Board of Directors when present, and, in the Secretary's absence, the presiding
officer may appoint any person to act as Secretary.
SECTION 10. Resignation. Any director may resign at ant time upon
written notice to the Corporation and such resignation shall take effect upon
receipt thereof by the President or Secretary, unless otherwise specified in the
resignation. Any or all of the directors may be removed, with or without cause,
by the holders of a majority of the shares of stock outstanding and entitled to
vote for the election of directors.
SECTION 11. Vacancies. Unless otherwise provided in these By-Laws,
vacancies on the Board of directors, whether caused by resignation, death,
disqualification, removal, an increase in the authorized number of directors or
otherwise, may be filled by the affirmative vote of a majority of the remaining
directors, although less than a quorum, or by a sole remaining director, or at a
special meeting of the stockholders, by vote of the stockholders required for
the election of directors generally.
SECTION 12. Action by Written Consent. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if all the directors consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board of
Directors.
SECTION 13. Electronic Communication. Any member or members of the
board of Directors may participate in a meeting of the Board by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear and speak to each other.
6
ARTICLE III
Committees
SECTION 1. Appointment. The Board of Directors may, by resolution
passed by a majority of the whole board, designate one or more Committees, each
Committee to consist of two or more of the directors of the Corporation. The
Board of Directors may designate one or more directors as alternate members of
any Committee, who may replace any absent or disqualified member at any meeting
of the committee. Any such committee, to the extent provided in the resolution,
shall have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it. Such
Committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the Board o Directors.
SECTION 2. Procedures, Quorum and Manner of Acting. Each Committee
shall fix its own rules or procedure, and shall meet where and as provided by
such rules or by resolution of the Board of Directors. Except as otherwise
provided by law, the presence of a majority of the then appointed members of a
Committee shall constitute a quorum for the transaction of business by that
committee, and in every case where a quorum is present the affirmative vote of a
majority of the members of the committee present shall be the act of the
Committee. Each Committee shall keep minutes of its proceedings, and actions
taken by a Committee shall be reported to the Board of Directors.
SECTION 3. Action by Written Consent. Any action required or
permitted to be taken at any meeting of any Committee of the Board of Directors
may be taken without a meeting if all the members of the committee consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Committee.
SECTION 4. Electronic Communication. Any member or members of a
Committee of the Board of Directors may participate in a meeting of a Committee
by means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear and speak to each other.
SECTION 5. Termination. In the event any person shall cease to be a
director of the Corporation, such person shall simultaneously therewith cease to
be a member of any Committee appointed by the Board of Directors.
7
ARTICLE IV
Officers
SECTION 1. Election and Qualifications. The Board of Directors at
its first meeting held after each annual meeting of Stockholders shall elect the
officers of the Corporation, which shall include a President and a Secretary,
and may include by election or appointment, one or more Vice-Presidents (any one
or more of whom may be given an additional designation of rank or function), a
Treasurer and such Assistant Secretaries, such Assistant Treasurers and such
other officers as the Board of Directors may from time to time deem proper. Each
officer shall have such powers and duties as may be prescribed by these By-Laws
and as may be assigned by the Board of Directors or the President. Any two or
more offices may be held by the same person.
SECTION 2. Term of Office and Remuneration. The term of office of
all officers shall be one year and until their respective successors have been
elected and qualified, but any officer may be removed from office, either with
or without cause, at any time by the Board of Directors. Any vacancy in any
office arising from any cause may be filled for the unexpired portion of the
term by the Board of Directors. The remuneration of all officers of the
corporation may be fixed by the Board of Directors or in such manner as the
Board of Directors shall provide.
SECTION 3. Resignation, Removal. Any officer may resign at any time
upon written notice to the Corporation and such resignation shall take effect
upon receipt thereof by the President or Secretary, unless otherwise specified
in the resignation. Any officer shall be subject to removal, with or without
cause, at any time by vote of a majority of the entire Board of Directors.
SECTION 4. Powers and Duties of Officers.
(a) The Chairman of the Board of Directors, if there be one, shall
preside at all meetings of the Board of Directors and shall have such other
powers and duties as may from time to time be assigned by the Board of
Directors.
(b) The President shall be the chief executive officer of the
Corporation and shall preside at all meetings of the Stockholders and, if there
is no Chairman, of the Board of Directors and shall have general management of
and supervisory authority over the property, business and affairs of the
Corporation and its other officers. The President may execute and deliver in the
name of the Corporation powers of attorney, contracts bonds and other
obligations and instruments, and shall have such other authority and
8
perform such other duties as from time to time may be assigned by the Board of
Directors. The President shall see that all orders and resolutions of the Board
of Directors are carried into effect and shall perform such additional duties
that usually pertain to this office.
(c) A Vice President may execute and deliver in the name of the
Corporation powers of attorney, contracts, bonds and other obligations and
instruments pertaining to the regular course of such Vice President's duties,
and shall have such other authority and perform such other duties as from time
to time may be assigned by the Board of Directors or the President.
(d ) The Treasurer shall in general have all duties and authority
incident to the position of Treasurer and such other duties and authority as may
be assigned by the Board of Directors or the President. The Treasurer shall keep
full and accurate accounts of receipts and disbursements in books belonging to
the Corporation and shall deposit all moneys and other valuable effects in the
name and to the credit of the Corporation in such depositories as may be
designated by or at the direction of the Board of Directors. The Treasurer shall
disburse the funds of the Corporation as may be ordered by the Board of
Directors or the President, and shall render, upon request, an account of all
such transactions.
(e) The Secretary shall in general have all the duties and authority
incident to the position of Secretary and such other duties and authority as may
be assigned by the Board of Directors or the President. The Secretary shall
attend all meetings of the Board of Directors and all meetings of Stockholders
and record all the proceedings threat in a book or books to be kept for that
purpose. The Secretary shall give, or cause to be given notice of all meetings
of the Stockholders and special meetings of the Board of Directors. The
Secretary shall have custody of the seal of the Corporation and any officer of
the Corporation shall have authority to affix the same to any instrument
requiring it and so affixed, it may be attested by the signature of the
Secretary or any other officer.
(f) Any assistant officer shall have such duties and authority as
the officer such assistant officer assists and, in addition, such other duties
and authority as the Board of Directors or President shall from time to time
assign.
9
ARTICLE V
Contracts, Etc.
SECTION 1. Contracts. The Board of Directors may authorize any
person or persons, in the name and behalf of the Corporation, to enter into or
execute and deliver any and all deeds, bonds, mortgages, contracts and other
obligations or instruments, and such authority may be general or confined to
specific instances.
SECTION 2. Proxies: Powers of Attorney; Other Instruments. (a) The
Chairman, the President, any Vice President, the Treasurer or any other person
designated by any of them shall have the power and authority to execute and
deliver proxies, powers of attorney and other instruments on behalf of the
Corporation in connection with the execution of contracts, the purchase of real
or personal property, the rights and powers incident to the ownership of stock
by the Corporation and such other situations as the Chairman, the President,
such Vice President or the Treasurer shall approve, such approval to be
conclusively evidenced by the execution of such proxy, power of attorney or
other instrument on behalf of the Corporation.
(b) The Chairman, the President, any Vice President, the Treasurer
or any other person authorized by proxy or power of attorney executed and
delivered by any of them on behalf of the Corporation many attend and vote at
any meeting of Stockholders of any company in which the Corporation may hold
stock, and may exercise on behalf of the Corporation any and all of the rights
and powers incident to the ownership of such stock at any meeting, or otherwise
as specified in the proxy or power of attorney so authorizing any such person.
The Board of Directors, from time to time, may confer like powers upon any
person.
10
ARTICLE VI
Books and Records
SECTION 1. Location. The books and records of the Corporation may be kept
at such place or places within or outside the State of Delaware as the Board of
Directors or the respective officers in charge thereof may from time to time
determine. The record books containing the names and addresses of all
Stockholders, the number and class of shares of stock held by each and the dates
when they respectively became the owners of record thereof shall be kept by the
Secretary as prescribed in the By-Laws or by such officer or agent as shall be
designated by the Board of Directors.
SECTION 2. Addresses of Stockholders. Notices of meeting and all other
corporate notices may be delivered personally or mailed to each Stockholder at
the Stockholder's address as it appears on the records of the Corporation.
SECTION 3. Fixing Date for Determination of Stockholders of Record. (a) In
order that the Corporation may determine the Stockholders entitled to notice of
or to vote at any meeting of Stockholders or any adjournment thereof, the Board
of Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors and which record date shall not be more than 60 days nor less than 10
days before the date of such meeting. If no record date is fixed by the Board of
Directors, the record date for determining Stockholders entitled to notice of or
to vote at a meeting of Stockholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting is
held. A determination of Stockholders of record entitled to notice of or to vote
at a meeting of Stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
(b) In order that the Corporation may determine the Stockholders
entitled to consent to corporate action in writing without a meeting, the Board
of Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors and which date shall not be more than 10 days after the date upon
which the resolution fixing the record date is adopted by the determining
Stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is required, shall be
the first date on which a signed written consent setting forth the action taken
or proposed to
11
be taken is delivered to the Corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the Corporation having custody of the book in which proceedings of meetings
of Stockholders are recorded. Delivery made to the Corporation having custody of
the book in which proceedings of meetings of Stockholders are recorded. Delivery
made to the Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the Board of Directors and prior action by the Board of Directors is required by
law, the record date for determining Stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the Board of Directors adopts the resolution taking such
prior action.
(c) In order that the Corporation may determine the Stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the Stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action not contemplated by paragraph (a) or (b) of this Section 3, the
Board of Directors may fix a record date, which record date shall not precede
the date upon which the resolution fixing the record date is adopted and which
record date shall not be more than 60 days prior to the action. If no record
date is fixed, the record date for determining Stockholders for any such purpose
shall be at the close of business on the day on which the Board of Directors
adopt the resolution relating thereto.
ARTICLE VII
Certificates Representing Stock
SECTION 1. Certificates: Signatures. The shares of the Corporation
shall be represented by certificates, provided that the Board of Directors of
the Corporation may provide by resolution or resolutions that some or all of any
of all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock represented
by certificates and upon request every holder of uncertificated shares shall be
entitled to have a certificate, signed by or in the name of the Corporation by
the Chairman or Vice-Chairman of the Board of Directors, or the President or
Vice-President, and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Corporation, representing the number of shares
registered in certificate form. Any and all signatures on any such certificate
may be facsimiles. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
12
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
The name of the holder of record of the shares represented thereby, with the
number of such shares and the date of issue, shall be entered on the books of
the Corporation. The Board of Directors shall have power and authority to make
all such rules and regulations as it may deem expedient concerning the issue,
transfer and registration of certificates representing shares of the
Corporation.
SECTION 2. Transfers of Stock. Upon compliance with provisions
restricting the transfer or registration of transfer of shares of stock, if any,
shares of capital stock shall be transferrable on the books of the Corporation
only by the holder of record thereof in person, or by duly authorized attorney,
upon surrender and cancellation of certificates for a like number of shares,
properly endorsed, and the payment of all taxes due thereon.
SECTION 3. Fractional Shares. The Corporation may, but shall not be
required to, issue certificates for fractions of a share where necessary to
effect authorized transactions, or the Corporation may pay in cash the fair
value of fractions of a share as of the time when those entitled to receive such
factions are determined, or it may issue scrip in registered or bearer form over
the manual or facsimile signature of an officer of the Corporation or of its
agent, exchangeable as therein provided for full shares, but such scrip shall
not entitle the holder to any rights of a Stockholder except as therein
provided.
SECTION 4. Lost, Stolen or Destroyed Certificates. The Corporation
may issue a new certificate of stock in place of any certificate, therefore
issued by it, alleged to have been lost, stolen or destroyed, and the Board of
Directors may require the owner of any lost, stolen or destroyed certificates,
or his legal representative, to give the Corporation a bond sufficient to
indemnify the Corporation against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of any such new certificate.
ARTICLE VIII
Dividends
Subject to the provisions of applicable law and the Certificate of
Incorporation, the Board of Directors shall have full power to determine whether
any, and, if any, what part of any, funds legally available for the payment of
dividends shall be declared as dividends and paid to Stockholders; the division
of the whole or any part of such funds of the Corporation shall rest wholly
within the lawful discretion of the Board
13
of Directors, and it shall not be required at any time, against such discretion,
to divide or pay any part of such funds among or to the Stockholders as
dividends or otherwise; and before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the Board of Directors from time to time, in its absolute discretion,
deems proper as a reserve or reserves, to meet contingencies or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for any proper purpose, and the Board of Directors may modify or abolish any
such reserve. Stockholders shall receive dividends pro rata in proportion to the
number of shares of Common Stock respectively held by them. A holder of Common
Stock shall be deemed to share pro rata in all dividends declared by the Board
of Directors within the meaning of the preceding sentence if such Stockholder
receives assets (whether consisting of cash, securities, real property,
equipment, inventory or other assets) the fair market value of which is the same
proportion to the fair market, value of the total assets of the Corporation
available for distribution as a dividend as the number of shares of Common Stock
held by such holder of Common Stock is to the total number of issued and
outstanding shares of Common Stock of the Corporation. A Stockholder shall not
have the right to receive a pro rata share of each or any such asset available
for distribution as a dividend; however, the corporation shall not be prohibited
in the sole discretion of the Corporation's Board of Directors.
ARTICLE IX
Ratification
Any transaction, questioned in any lawsuit on the ground of lack of
authority, defective or irregular execution, adverse interest of director,
officer or Stockholder, non-disclosure, miscomputation, or the application of
improper principles of practices of accounting, may be ratified before or after
judgment, by the Board of Directors or by the Stockholders, and if so ratified
shall have the same force and effect as if the questioned transaction had been
originally duly authorized. Such ratification shall be binding upon the
Corporation and its Stockholders and shall constitute a bar to any claim or
execution of any judgment in respect of such questioned transaction.
ARTICLE X
Corporate Seal
The corporate seal shall be in either of the following forms: (a)
the letters "L.S." or (b) a circular inscription which contains the words
"Corporate Seal" and such additional information as the officer inscribing such
seal shall determine in such officer's
14
sole discretion. The corporate seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise displayed or it
may be manually inscribed.
ARTICLE XI
Fiscal Year
The fiscal year of the Corporation shall be fixed, and shall be
subject to change, by the Board of Directors. Unless otherwise fixed by the
Board of Directors, the fiscal year of the Corporation shall end on the Saturday
closest to September 30.
ARTICLE XII
Waiver of Notice
Whenever notice is required to be given by these By-Laws or by the
Certificate of Incorporation or by law, a written waiver thereof, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to notice.
ARTICLE XIII
Amendments
The Board of Directors shall have power to adopt, amend or repeal
ByLaws. By-Laws adopted by the Board of Directors may be repealed or changed,
and new By-Laws made, by the Stockholders, and the Stockholders may prescribe
that any ByLaw made by them shall not be altered, amended or repealed by the
Board of Directors.
ARTICLE XIV
Indemnification
SECTION 1. Power to Indemnify in Actions, Suits or Proceedings Other
Than Those By Or In the Right Of The Corporation. Subject to Section 3 of this
article XIV, the Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the
15
right of the Corporation) by reason of the fact that such person is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' and other professionals' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if such person
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the Corporation, and with respect to any criminal
action or proceeding, had no reasonable cause to believe the conduct was
unlawful. The termination of criminal action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendre or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner reasonably believed to the best interests of
the Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that the conduct was unlawful.
SECTION 2. Power to Indemnify In Actions, Suits Or Proceedings By Or
In The Right Of The Corporation. Subject to Section 3 of this Article XIV, the
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by the reason of
the fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' and
other professionals' fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the Corporation except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of which the Court of Chancery or such other court shall deem proper.
SECTION 3. Authorization of Indemnification. Any indemnification
under this Article XIV (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination of the
director, officer, employee or agent is proper in the circumstances because such
person has met the applicable standard of conduct set forth in Section 1 or
Section 2 of this Article XIV, as the case may be. Such determination shall be
made (i) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or
16
proceeding, or (ii) if such a quorum is not obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (iii) if the Board of Directors so directs, by the Stockholders. To
the extent, however, that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding described above, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses (including
attorneys' and other professionals' fees) actually and reasonably incurred such
person in connection therewith, without the necessity of authorization in the
specific case.
SECTION 4. Good Faith Defined. For purposes of any determination
under Section 3 of this Article XIV, a person shall be deemed to have acted in
good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the Corporation, or with respect to any criminal action or
proceeding, to have had no reasonable cause to believe the conduct was unlawful,
if the action is based on (a) the records or books of account of the Corporation
or another enterprise (as defined below in this Section 4), or on information
supplied to such person by the officers of the Corporation or another enterprise
in the course of their duties, unless such person had reasonable cause to
believe that reliance thereon would not be justifiable, on or (b) the advice of
legal counsel for the Corporation or another enterprise, or on information or
records given or reports made to the Corporation or another enterprise by an
independent certified public accountant, independent financial adviser,
appraiser or other expert, as to matters reasonably believed to be within such
other person's professional or expert competence. The term "another enterprise"
as used in this Section 4 shall mean any other corporation or any partnership,
joint venture, trust or other enterprise of which such person is or was serving
at the request of the Corporation as a director, officer, employee or agent. The
provisions of this Section 4 shall not be deemed to be exclusive or to limit in
any way the circumstances in which a person may be deemed to have met the
applicable standard of conduct set forth in Sections 1 or 2 of this Article XIV,
as the case may be.
SECTION 5. Indemnification by A Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article XIV, and
notwithstanding the absence of any determination thereunder, any director,
officer, employee or agent may apply to any court competent jurisdiction in the
State of Delaware for indemnification to the extent otherwise permissible under
Sections 1 and 2 of this Article XIV. The basis of such indemnification by a
court shall be a determination by such court that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standards of conduct set forth in Sections 1 or 2 of this
Article XIV, as the case may be. Notice of any application for indemnification
pursuant to this Section 5 shall be given to the Corporation promptly upon the
filing of such application.
17
SECTION 6. Expenses Payable in Advance. Expenses (including
attorneys' and other professionals' fees) incurred by an officer or director in
defending any threatened or pending civil, criminal, administrative or
investigative action, suit or proceeding may, but shall not be required to, be
paid by the Corporation in advance of the final disposition or such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such director to
repay such amount if it shall ultimately be determined that such person is not
entitled to be identified by the Corporation as authorized in this Article XIV.
Such expenses (including attorneys' and other professionals' fees) incurred by
other employees and agents may be so paid upon such terms and conditions, if
any, as the Board of Directors deems appropriate.
SECTION 7. Non-exclusivity and Survival of Indemnification. The
indemnification and advancement of expenses provided by or granted pursuant to
this Article XIV shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
any By-Law, agreement, contract, vote of Stockholders or of disinterested
directors, or pursuant to the direction (howsoever embodied) of any court of
competent jurisdiction or otherwise, it being the policy of the Corporation that
indemnification of the persons specified in Sections 1 and 2 of this article XIV
(as distinguished from advanced of funds pursuant to Section 6 of this Article
XIV but whom the Corporation has the power or obligation to indemnify under the
provisions of the General Corporation Law of the State of Delaware, or
otherwise. The indemnification provided by this Article XIV shall continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors, administrators and other
comparable legal representatives of such person. The rights conferred in this
Article XIV shall be enforceable as contract rights, and shall continue to exist
after any recession or restrictive modification hereof with respect to events
occurring prior thereto.
SECTION 8. Meaning of "other enterprises" in connection with
Employee Benefits Plans, etc. For purposes of this Article XIV (including
Sections 1, 2, 4 and 9 hereof), references to "other enterprises" shall include
employee benefit plans; referenced to "fines" shall include any excise taxes
assessed on a person with respect to an employee benefit plan; references to
"serving at the request of the Corporation" shall include any service as a
director, officer, employee or agent of the Corporation which imposes duties on,
or involves services by, such director officer, employee, or agent with respect
to an employee benefit plan, its participants or beneficiaries; and a person who
has acted in good faith and in a manner reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan shall
be deemed to have acted in a manner "not opposed to the best interests of the
Corporation" as referred to in this Article XIV.
18
SECTION 9. Insurance. The Corporation may, but shall not be required
to, purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another Corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such persons against such liability
under the provisions of this Article XIV.
19
Exhibit 3.4(g)
BY-LAWS
OF
PANITZ HOMES REALTY, INC.
ARTICLE I
Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders of
this corporation shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting of shareholders for any year
shall be held no later than thirteen months after the last preceding annual
meeting of shareholders. Business transacted at the annual meeting shall include
the election of directors of the corporation.
Section 2. Special Meeting. Special meetings of the shareholders shall
be held when directed by the President or the Board of Directors, or when
requested in writing by the holders of not less than ten percent of all shares
entitled to vote at the meeting. A meeting requested by shareholders shall be
called for a date not less than ten nor more than sixty days after the request
is made, unless the shareholders requesting the meeting designate a later date.
The call for the meeting shall be issued by the Secretary, unless the President,
Board of Directors, or shareholders requesting the meeting shall designate
another person to do so.
Section 3. Place. Meetings of shareholders may be held within or
without the State of Florida.
Section 4. Notice. Written notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor more than
sixty days before the meeting, either personally or by first class mail, by or
at the direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail addressed to the shareholder at his address as it
appears on the stock transfer books of the corporation, with postage thereon
prepaid.
Section 5. Notice of Adjourned Meetings. When a meeting is adjourned
to another time or place, it shall not be necessary to give any notice of the
adjourned
meeting if the time and place to which the meeting is adjourned are announced at
the meeting at which the adjournment is taken, and at the adjourned meeting any
business may be transacted on the original date of the meeting. If, however,
after the adjournment the Board of Directors fixes a new record date for the
adjourned meeting, a notice of the adjourned meeting shall be given as provided
in this section to each shareholder of record on the new record date entitled to
vote at such meeting.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, sixty
days. If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors
may fix in advance a date as of the record date for any determination of
shareholders, such date in any case to be not more than sixty days and, in case
of a meeting of shareholders, not less than ten days prior to the date on which
the particular action requiring such determination of shareholders is to be
taken.
If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at a meeting
of shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting
of shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof, unless the Board of Directors fixes a
new record date for the adjourned meeting.
Section 7. Voting Record. The officers or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each. The list,
for a period of ten days prior to such meeting, shall be kept on file at the
registered office of the corporation, at the principal place of business of the
corporation or at the office of the transfer agent or registrar of the
corporation and any shareholder shall be entitled to inspect the list at any
time during
2
usual business hours. The list shall also be produced and kept open at the time
and place of the meeting and shall be subject to the inspection of any
shareholder at any time during the meeting.
If the requirements of this section have not been substantially
complied with, the meeting on demand of any shareholder in person or by proxy,
shall be adjourned until the requirements are complied with. If no such demand
is made, failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a specified item of business is required to
be voted on by a class or series of stock, a majority of the shares of such
class or series shall constitute a quorum for the transaction of such item of
business by that class or series.
If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 9. Voting of Shares. Each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Treasury shares, shares of stock of this corporation owned by another
corporation, the majority of the voting stock of which is owned or controlled by
this corporation, and shares of stock of this corporation held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed in
writing by the shareholder or his duly authorized attorney-in-fact.
At each election for directors every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to be elected at
that time and for whose election he has a right to vote.
3
Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the by-laws
of the corporate shareholder; or, in the absence of any applicable by-laws, by
such person as the Board of Directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the by-laws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the chairman of the board, president, any vice president,
secretary and treasurer of the corporate shareholder shall be presumed to
possess, in that order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority to do so
be contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of
redeemable shares has been mailed to the holders thereof and a sum sufficient to
redeem such shares has been deposited with a bank or trust company with
irrevocable instruction and authority to pay the redemption price to the holders
thereof upon surrender of certificates therefor, such shares shall not be
entitled to vote on any matter and shall not be deemed to be outstanding shares.
Section 10. Proxies. Every shareholder entitled to vote at a meeting
of shareholders or to express consent or dissent without a meeting or a
shareholders' duly authorized attorney-in-fact may authorize another person-or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact.
No proxy shall be valid after the expiration of eleven months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the shareholder executing it, except as otherwise by law.
4
The authority of the holder of a proxy to act shall not be revoked by
the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two or more
persons and does not otherwise provide, a majority of them present at the
meeting, or if only one is present then that one, may exercise all the powers
conferred by the proxy; but if the proxy holders present at the meeting are
equally divided as to the right and manner of voting in any particular case, the
voting of such shares shall be prorated.
If a proxy expressly provides, any proxy holder may appoint in writing
a substitute to act in his place.
Section 11. Voting Trusts. Any number of shareholders of this
corporation may create a voting trust for the purpose of conferring upon a
trustee or trustees the right to vote or otherwise represent their shares, as
provided by law. Where the counterpart of a voting trust agreement and the copy
of the record of the holders of voting trust certificates has been deposited
with the corporation as provided by law, such documents shall be subject to the
same right of examination by a shareholder of the corporation, in person or by
agent or attorney, as are the books and records of the corporation, and such
counterpart and such copy of such record shall be subject to examination by
holder of record of voting trust certificates either in person or by agent or
attorney, at any reasonable time for any proper purpose.
Section 12. Shareholders' Agreements. Two or more shareholders, of
this corporation may enter an agreement providing for the exercise of voting
rights in the manner provided in the agreement or relating to any phase of the
affairs of the corporation as provided by law. Nothing therein shall impair the
right of this corporation to treat the shareholders of record as entitled to
vote the shares standing in their names.
Section 13. Action by Shareholders Without a Meeting. Any action
required by law, these by-laws, or the articles of incorporation of this
corporation to be taken at any annual or special meeting of shareholders of the
corporation, or any action which may be taken at any annual or special meeting
of such shareholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. If any class of shares is entitled to vote thereon as a class, such
written consent shall be required of the holders of a majority of the shares of
each class of shares entitled to vote as a class thereon and of the total shares
entitled to vote thereon.
5
Within ten days after obtaining such authorization by written consent,
notice shall be given to those shareholders who have not consented in writing.
The notice shall fairly summarize the material features of the authorized
action, and, if the action be a merger, consolidation or sale or exchange of
assets for which dissenters rights are provided under this act, the notice shall
contain a clear statement of the right of shareholders dissenting therefrom to
be paid the fair value of their shares upon compliance with further provisions
of this act regarding the rights of dissenting shareholder.
ARTICLE II
Directors
Section 1. Function. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this
state or shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have authority
to fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform his duties as
a director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
(a) one or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented,
(b) counsel, public accountants or other persons as to matters which
the director reasonably believes to be within such person's professional or
expert competence, or
6
(c) a committee of the board upon which he does not serve, duly
designated in accordance with a provision of the articles of incorporation
or the by-laws, as to matters within its designated authority, which
committee the director reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if he
has knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this action shall
have no liability by reason of being or having been a director of the
corporation.
Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless he
votes against such action or abstains from voting in respect thereto because of
an asserted conflict of interest.
Section 6. Number. This corporation shall have two (2) directors. The
number of directors may be increased or decreased from time to time by amendment
to these by-laws, but no decrease shall have the effect of shortening the terms
of any incumbent director.
Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.
At the first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term for
which he is elected and until his successor shall have been elected and
qualified or until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any Vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders.
Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed,
7
with or without cause, by a vote of the holders of a majority of the shares then
entitled to vote at an election of directors.
Section 10. Quorum and Voting. A majority of the number of directors
fixed by these by-laws shall constitute a quorum for the transaction of
business. The act of the majority of the directors present at a meeting at which
quorum is present shall be the act of the Board of Directors.
Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or avoidable because of such relationship or interest or because
such director or directors are present at the meeting of the Board of Directors
or a committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purposes, if:
(a) The fact of such relationship of interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies
the contract or transaction by a vote or consent sufficient for the purpose
without counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify
such contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
(d) Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or
transaction.
Section 12. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:
(a) approve or recommend to shareholders actions or proposals
required by law to be approved by shareholders,
(b) designate candidates for the office of director, for purposes of
proxy solicitation or otherwise,
8
(c) fill vacancies on the Board of Directors or any committee thereof,
(d) amend the by-laws,
(e) authorize or approve the reacquisition of shares unless pursuant
to a general formula or method specified by the Board of Directors, or
(f) authorize or approve the issuance or sale of, or any contract to
issue or sell, shares or designate the terms of a series of a class of
shares, except that the Board of Directors, having acted regarding general
authorization for the issuance or sale of shares, or any contract thereof,
and, in the case of a series, the designation thereof, may, pursuant to a
general formula or method specified by the Board of Directors, by
resolution or by adoption of a stock option or other plan, authorize a
committee to fix the terms of any contract for the sale of the shares and
to fix the terms upon which such shares may be issued or sold, including,
without limitations, the price, the rate or manner of payment of dividends,
provisions for redemption, sinking funds, conversion, voting or
preferential rights, and provisions for other features of a class of
shares, or a series of a class of shares, with full power in such committee
to adopt any final resolution setting forth all the terms thereof and to
authorize the statement of the terms of a series for filing with the
Department of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee.
Section 13. Place of Meetings. Regular and special meetings by the
Board of Directors may be held within or without the State of Florida.
Section 14. Time, Notice and Call of Meetings. Regular meetings of the
Board of Directors shall be held without notice immediately following the annual
shareholders meeting. Written notice of the time and place of special meetings
of the Board of Directors shall be given to each director by either personal
delivery, telegram or cablegram at least two days before the meeting or by
notice mailed to the director at least five days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all obligations to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of
9
the meeting, any objection to the transaction of business because the meeting is
not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of such meeting.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
Meetings of the Board of Directors may be called by the chairman of
the board, by the president of the corporation, or by any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 15. Action Without a Meeting. Any action required at a meet to
be taken at a meeting of the directors of a corporation, or any action which may
be taken at a meeting of the directors or a committee thereof, may be taken
without a meeting if a consent in writing, setting forth the action so to be
taken, signed by all of the directors, or all the members of the committee, as
the case may be, is filed in the minutes of the proceedings of the board or of
the committee. Such consent shall have the same effect as a unanimous vote.
ARTICLE III
Officers
Section 1. Officers. The officers of this corporation shall consist of
a president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors at the first meeting of directors immediately following the
annual meeting of shareholders of this corporation, and shall serve until their
successors are chosen and qualify. Such other officers and assistant officers
and agents as may be deemed necessary may be elected or appointed by the Board
of Directors from time to time. Any two or more officers may be held by the same
person. The failure to elect a president, secretary or treasurer shall not
affect the existence of this corporation.
10
Section 2. Duties. The officers of this corporation shall have the
following duties.
The President shall be the chief executive officer of the corporation,
shall have general and active management of the business and affairs of the
corporation subject to the directors of the Board of Directors, and shall
preside at all meetings of the stockholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the
corporate records except the financial records; shall record the minutes of all
meetings of the stockholders and Board of Directors, send all notices of
meetings out, and perform such other duties as may be prescribed by the Board of
Directors or the President.
The Treasurer shall have custody of all corporate funds and financial
records, shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of stockholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of Officers. Any officer or agent elected or
appointed by the Board of Directors may be removed by the board whenever in its
judgment the best interests of the corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only
by vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Any vacancy, however occurring, in any office may be filled by the
Board of Directors, unless the by-laws shall have expressly reserved such power
to the shareholders.
Removal of any officer shall be without prejudice to the contract
rights, if any, of the person so removed; however, election or appointment of an
officer or agent shall not itself create contract rights.
ARTICLE IV
Stock Certificates
Section 1. Issuance. Every holder of shares in this corporation shall
be entitled to have a certificate, representing all shares to which he is
entitled. No certificate shall be issued for any share until such share is fully
paid.
11
Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance.
Every certificate representing shares issued by this corporation shall
set forth or fairly summarize upon the face or back of the certificate, or shall
state that the corporation will furnish to any shareholder upon request and
without charge a full statement of, the designations, preferences, limitations
and relative rights of the shares of each class or series authorized to be
issued, and the variations in the relative rights and preferences between the
shares of each series so far as the same have been fixed and determined, and the
authority of the Board of Directors to fix and determine the relative rights and
preferences of subsequent series.
Every certificate representing shares which are restricted as to the
sale, disposition or other transfer of such shares shall state that such shares
are restricted as to transfer and shall state that the corporation will furnish
to any shareholder upon request and without charge a full statement of, such
restrictions.
Each certificate representing shares shall state upon the fact
thereof; the name of the corporation; that the corporation is organized under
the laws of this state; the name of the person or persons to whom issued; the
number and class of shares, and the designation of the series, if any, which
such certificates represents; a statement that the shares are without par value.
Section 3. Transfer of Stock. No stock in this corporation shall Be
sold or offered for sale unless all the stock proposed to be sold is first
offered to the other holders of stock in this corporation and if no other holder
of stock desires to purchase said stock then said stock shall be offered for
sale to the corporation before being duly sold to any non-stockholder. No stock
in this corporation shall be subject to pledge, excepting with the consent in
writing of all stockholders of the corporation.
The corporation shall be entitled to treat the holder of record of any
share or shares as the absolute owner thereof for all purposes and, accordingly,
shall not be bound to recognize any legal, equitable or other claim to, or
interest in, such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise expressly
provided by law.
12
Section 4. Lost, Stolen, or Destroyed Certificates. The corporation
shall issue a new stock certificate in the place of any certificate previously
issued if the holder of record of the certificate (a) makes proof in affidavit
form that it has been lost, destroyed or wrongfully taken; (b) requests the
issue of a new certificate before the corporation has notice that the
certificate has been acquired by a purchaser for value in good faith and without
notice of any adverse claim; (c) gives bond in such form as the corporation may
direct, to indemnify the corporation, the transfer agent, and registrar against
any claim that may be made on account of the alleged loss, destruction, or theft
of a certificate; and (d) satisfies any other reasonable requirements imposed by
the corporation.
ARTICLE V
Books and Records
Section 1. Books and Records. This corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and committees of directors.
This corporation shall keep at its registered office or principal
place of business, or at the office of its transfer agent, or registrar, a
record of its shareholders, giving the names and addresses of all shareholders,
and the number, class and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. Any person who shall have
been a holder of record of shares or of voting trust certificates therefor at
least six months immediately preceding his demand or shall be the holder of
record of, or the holder of record of voting trust certificates for, at least
five percent of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any reasonable time or
times, for any proper purpose its relevant books and records of accounts,
minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four months after the
close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial condition of the corporation as of
the close of its fiscal year, and a profit and loss statement showing the
results of the operations of the corporation during its fiscal year.
13
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in
the registered office of the corporation in this state, shall be kept for at
least five years, and shall be subject to inspection during business hours by
any shareholder or holder of voting trust certificates, in person or by agent.
ARTICLE VI
Dividends
The Board of Directors of this corporation may, from time to time,
declare and the corporation may pay dividends on its shares in cash, property or
its own shares, except when the corporation is insolvent or when the payment
thereof would render the corporation insolvent or when the declaration or
payment thereof would be contrary to any restrictions contained in the articles
of incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and
unrestricted earned surplus of the corporation or out of capital surplus,
howsoever arising but each dividend paid out of capital surplus, shall be
identified as a distribution of capital surplus, and the amount per share
paid from such surplus shall be disclosed to the shareholders receiving the
same concurrently with the distribution.
(b) Dividends may be declared and paid in the corporation's own
treasury shares.
(c) Dividends may be declared and paid in the corporation's own
authorized but unissued shares out of any unreserved and unrestricted
surplus of the corporation upon the following conditions.
(1) If a dividend is payable in shares having a par value, such
shares shall be issued at not less than the par value thereof and
there shall be transferred to stated capital at the time such dividend
is paid an amount of surplus equal to the aggregate par value of the
shares to be issued as a dividend.
14
(2) If a dividend is payable in shares without par value, such
shares shall be issued at such stated value as shall be fixed by the
Board of Directors by resolution adopted at the time such dividend is
declared, and there shall be transferred to stated capital at the time
such dividend is paid an amount of surplus equal to the aggregate
stated value so fixed in respect of such shares; and the amount per
share so transferred to stated capital shall be disclosed to the
shareholders receiving such dividend concurrently with the payment
thereof.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the articles of incorporation
so provide or such payment is authorized by the affirmative vote or the
written consent of the holders of at least a majority of the outstanding
shares of the class in which the payment is to be made.
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated
capital of the corporation shall not be construed to be a share dividend
within the meaning of this section.
ARTICLE VII
Corporate Seal
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the following:
PANITZ HOMES REALTY, INC.
CORPORATE SEAL
FLORIDA - 1986
15
ARTICLE VIII
Amendment
These by-laws may be repealed or amended, and new by-laws may be
adopted, by either the Board of Directors or the shareholders, but the Board of
Directors may not amend or repeal any by-law adopted by shareholders if the
shareholders specifically provide such by-law not subject to amendment or repeal
by the directors.
Approved this ______ day of _____________, 1986.
---------------------------
ARTHUR M. DARBY
16
Exhibit 3.4 (h)
BY-LAWS
OF
BEAZER HOMES TEXAS HOLDINGS, INC.
A DELAWARE CORPORATION
TABLE OF CONTENTS
Page
----
Article I -- Stockholders............................................ 1
1. Annual Meetings....................................... 1
2. Special Meetings...................................... 1
3. Quorums............................................... 2
4. Organization.......................................... 2
5. Voting; Proxies: Required Vote........................ 2
6. Inspectors............................................ 3
Article II -- Board of Directors..................................... 4
1. General Powers........................................ 4
2. Qualification; Number; Term; Remuneration............. 4
3. Quorum and Manner of Voting........................... 4
4. Places of Meetings.................................... 4
5. Annual Meeting........................................ 4
6. Regular Meetings...................................... 5
7. Special Meetings...................................... 5
8. Notice of Meetings.................................... 5
9. Organization.......................................... 5
10. Resignation........................................... 5
11. Vacancies............................................. 5
12. Action by Written Consent............................. 5
13. Electronic Communication.............................. 5
Article III -- Committees............................................ 6
1. Appointment........................................... 6
2. Procedures; Quorum and Manner of Acting............... 6
3. Action by Written Consent............................. 6
4. Electronic Communication.............................. 6
5. Termination........................................... 6
Article IV -- Officers............................................... 6
1. Election and Qualifications........................... 6
2. Term of Office and Remuneration....................... 7
3. Resignation; Removal.................................. 7
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Page
----
4. Powers and Duties of Officers......................... 7
Article V -- Contracts, Etc.......................................... 8
1. Contracts............................................. 8
2. Proxies; Powers of Attorney; Other Instruments........ 8
Article VI -- Books and Records...................................... 9
1. Location.............................................. 9
2. Addresses of Stockholders............................. 9
3. Fixing Date for Determination of Stockholders of
Record ............................................... 9
Article VII Certificates Representing Stock.......................... 10
1. Certificates, Signatures.............................. 10
2. Transfers of Stock.................................... 10
3. Fractional Shares..................................... 10
4. Lost, Stolen or Destroyed Certificates................ 11
Article VIII -- Dividends............................................ 11
Article IX -- Ratification........................................... 11
Article X -- Corporate Seal.......................................... 12
Article XI -- Fiscal Year............................................ 12
Article XII -- Waiver of Notice...................................... 12
Article XIII -- Amendments........................................... 12
Article XIV -- Indemnification....................................... 12
1. Power to Indemnify in Action, Suits or Proceedings
Other Than Those By or In The Right of the
Corporation........................................... 12
2. Power to Indemnify in Actions, Suits or Proceedings
By or In The Right of the Corporation................. 13
3. Authorization of Indemnification...................... 13
4. Good Faith Defined.................................... 14
ii
Page
----
5. Indemnification By A Court............................ 14
6. Expenses Payable In Advance........................... 14
7. Non-Exclusivity and Survival of Indemnification....... 14
8. Meaning of "other enterprises" in connection with
Employee Benefit Plans, etc........................... 15
9. Insurance............................................. 15
iii
ARTICLE I -- STOCKHOLDERS
1. Annual Meetings.
(a) All meetings of the Stockholders for the election of
directors shall be held in the County of New Castle, State of Delaware, at such
place as may be fixed from time to time by the Board of Directors, or at such
other place either within or without the State of Delaware as shall be
designated from time to time by the Board of Directors and stated in the notice
of the meeting. Meetings of Stockholders for any other purpose may be held at
such time and place, within or without the State of Delaware, as shall be stated
in the notice of the meeting or in a duly executed waiver of notice thereof.
(b) Annual meetings of Stockholders shall be held on such date
and at such time as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting, at which they shall elect by
a plurality vote a Board of Directors, and transact such other business as may
properly be brought before the meeting.
(c) Written notice of the annual meeting stating the place,
date, and hour of the meeting shall be given to each Stockholder entitled to
vote at such meeting not less than ten days nor more than sixty days prior to
the date of the meeting.
(d) The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten days before every meeting of
Stockholders, a complete list of the Stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
Stockholder and the number of shares registered in the name of each Stockholder.
Such list shall be open to the examination of any Stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any Stockholder who is
present. The stock ledger shall be the only evidence as to the Stockholders
entitled to examine the stock ledger, the list required by this Section 1 or the
books of the Corporation, or to vote in person or by proxy at any meeting of
Stockholders.
2. Special Meetings.
(a) Special meetings of the Stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the Certificate of
Incorporation of the Corporation, may be called by the President and shall be
called by the President or Secretary at the request in writing of a majority of
the Board of Directors, or at the request in writing of a Stockholder or
Stockholders owning a majority in amount of the entire capital stock of
the Corporation issued and outstanding and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting.
(b) Written notice of a special meeting stating the place,
date, and hour of the meeting and, in general terms, the purpose or purposes for
which the meeting is called, shall be given not less than ten days nor more than
sixty days prior to the date of the meeting, to each Stockholder entitled to
vote at such meeting. Whenever the directors shall fail to fix such place, the
meeting shall be held at the principal executive offices of the Corporation.
(c) Business transacted at any special meeting of Stockholders
shall be limited to the purpose or purposes stated in the notice.
3. Quorums.
(a) The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the Stockholders for the
transaction of business except as otherwise provided by statute or by the
Certificate of Incorporation. If, however, such quorum shall not be present or
represented at any meeting of the Stockholders, the Stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting, at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each Stockholder of record entitled to
vote at the meeting. When a quorum is once present it is not broken by the
subsequent withdrawal of any Stockholder.
(b) When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one on which by express provision of the Delaware General
Corporation Law, the Certificate of Incorporation or these By-Laws, a different
vote is required in which case such express provision shall govern and control
the decision of such question.
4. Organization. Meetings of Stockholders shall be presided over by
the Chairman, if any, or if none or in the Chairman's absence the President, if
any, or if none or in the President's absence, by a Chairman to be chosen by the
Stockholders entitled to vote who are present in person or by proxy at the
meeting. The Secretary of the Corporation, or in the Secretary's absence an
Assistant Secretary, shall act as Secretary of every meeting, but
2
if neither the Secretary nor an Assistant Secretary is present, the presiding
officer of the meeting shall appoint any person present to act as Secretary of
the meeting.
5. Voting; Proxies: Required Vote.
(a) At each meeting of Stockholders, every Stockholder shall
be entitled to vote in person or by proxy appointed by an instrument in writing,
subscribed by such Stockholder or by such Stockholder's duly authorized
attorney-in-fact but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period), and, unless
the Certificate of Incorporation provides otherwise, shall have one vote for
each share of stock entitled to vote registered in the name of such Stockholder
on the books of the Corporation on the applicable record date fixed pursuant to
these By-Laws. At all elections of directors the voting may but need not be by
ballot and the affirmative vote of holders of a plurality of the stock present
in person or represented by proxy and entitled to vote on such election shall
elect such directors. Except as otherwise required by law or the Certificate of
Incorporation, any other action shall be authorized by the affirmative vote of
holders of a majority of the stock present in person or represented by proxy and
entitled to vote on such matter.
(b) Any action required or permitted to be taken at any
meeting of Stockholders may, except as otherwise required by law or the
Certificate of Incorporation, be taken without a meeting, without prior notice
and without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted, and the writing or
writings are filed with the permanent records of the Corporation. Prompt notice
of the taking of corporate action without a meeting by less than unanimous
written consent shall be given to these Stockholders who have not consented in
writing.
(c) Where a separate vote by a class or classes is required, a
majority of the outstanding shares of such class or classes, present in person
or represented by proxy, shall constitute a quorum entitled to vote on the
matter and the affirmative vote of the majority of shares of such class or
classes present in person or represented by proxy at the meeting shall be the
act of such class, unless otherwise provided in the Corporation's Certificate of
Incorporation.
6. Inspectors. The Board of Directors, in advance of any meeting,
may, but need not, appoint one or more inspectors of election to act at the
meeting or any adjournment thereof. If an inspector or inspectors are not so
appointed, the person presiding at the meeting may, but need not, appoint one or
more inspectors. In case any person who may be appointed as an inspector fails
to appear or act, the vacancy may be filled by appointment made by the Board of
Directors in advance of the meeting or at the meeting by
3
the person presiding thereat. Each inspector, if any, before entering upon the
discharge of his or her duties, shall take and sign an oath faithfully to
execute the duties of inspector at such meeting with strict impartiality and
according to the best of his or her ability. The inspectors, if any, shall
determine the number of shares of stock outstanding and the voting power of
each, the shares of stock represented at the meeting, the existence of a quorum,
and the validity and effect of proxies, and shall receive votes, ballots or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots or consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all Stockholders. On request of the person presiding at
the meeting, the inspector or inspectors, if any, shall make a report in writing
of any challenge, question or matter determined by such inspector or inspectors
and execute a certificate of any fact found by such inspector or inspectors.
ARTICLE II -- BOARD OF DIRECTORS
1. General Powers. The business, property and affairs of the
Corporation shall be managed by, or under the direction of, the Board of
Directors.
2. Qualification; Number; Term; Remuneration.
(a) Each director shall be at least 18 years of age. A
director need not be a Stockholder, a citizen of the United States, or a
resident of the State of Delaware. The number of directors constituting the
entire Board of Directors shall be one or such other number as may be fixed from
time to time by the Board of Directors or the Stockholders. One of the directors
may be selected by the Board of Directors to be its Chairman, who shall preside
at meetings of the Stockholders and the Board of Directors and shall have such
other duties, if any, as may from time to time be assigned by the Board of
Directors. In the absence of formal selection, the President of the Corporation
shall serve as Chairman. The use of the phrase "entire Board" herein refers to
the total number of directors which the Corporation would have if there were no
vacancies.
(b) Directors who are elected at an annual meeting of
Stockholders, and directors who are elected in the interim to fill vacancies and
newly created directorships, shall hold office until the next annual meeting of
Stockholders and until their successors are elected and qualified or until their
earlier resignation or removal.
(c) Directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a fixed sum
for attendance at each meeting of the Board of Directors or a stated salary for
serving as director. No such payment shall preclude any director from serving
the Corporation in any other capacity and receiving compensation therefor.
Members of special or standing Committees may be allowed like compensation for
attending Committee meetings.
4
3. Quorum and Manner of Voting. Except as otherwise provided by law,
a majority of the entire Board of Directors shall constitute a quorum. A
majority of the directors present, whether or not a quorum is present, may
adjourn a meeting from time to time to another time and place without notice.
The vote of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors.
4. Places of Meetings. Meetings of the Board of Directors may be
held at any place within or without the State of Delaware, as may from time to
time be fixed by resolution of the Board of Directors, or as may be specified in
the notice of meeting.
5. Annual Meeting. Following the annual meeting of Stockholders, the
newly elected Board of Directors shall meet for the purpose of the election of
officers and the transaction of such other business as may properly come before
the meeting. Such meeting may be held without notice immediately after the
annual meeting of Stockholders at the same place at which such Stockholders'
meeting is held.
6. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such times and places as the Board of Directors shall from time
to time by resolution determine.
7. Special Meetings. Special meetings of the Board of Directors
shall be held whenever called by the Chairman of the Board, President, or by a
majority of the directors then in office.
8. Notice of Meetings. A notice of the place, date and time and the
purpose or purposes of each meeting of the Board of Directors shall be given to
each director by mailing the same at least two days before the meeting, or by
telephoning or faxing the same or by delivering the same personally not later
than the day before the day of the meeting.
9. Organization. At all meetings of the Board of Directors, the
Chairman or in the Chairman's absence or inability to act, the President, or in
the President's absence, a Chairman chosen by the directors, shall preside. The
Secretary of the Corporation shall act as secretary at all meetings of the Board
of Directors when present, and, in the Secretary's absence, the presiding
officer may appoint any person to act as Secretary.
10. Resignation. Any director may resign at any time upon written
notice to the Corporation and such resignation shall take effect upon receipt
thereof by the President or Secretary, unless otherwise specified in the
resignation. Any or all of the director may be removed with or without cause, by
the holders of a majority of the shares of stock outstanding and entitled to
vote for the election of directors.
5
11. Vacancies. Unless otherwise provided in these By-Laws, vacancies
on the Board of Directors, whether caused by resignation, death,
disqualification, removal, an increase in the authorized number of directors or
otherwise, may be filled by the affirmative vote of a majority of the remaining
directors, although less than a quorum, or by a sole remaining director, or at a
special meeting of the Stockholders, by vote of the Stockholders required for
the election of directors generally.
12. Action by Written Consent. Any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a meeting
if all the directors consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board of Directors.
13. Electronic Communication. Any member or members of the Board of
Directors may participate in a meeting of the Board of Directors by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear and speak to each other.
ARTICLE III -- COMMITTEES
1. Appointment. The Board of Directors may, by resolution passed by
a majority of the whole Board of Directors, designate one or more Committees,
each Committee to consist of two or more of the directors of the Corporation.
The Board of Directors may designate one or more directors as alternate members
of any Committee, who may replace any absent or disqualified member at any
meeting of the Committee. Any such Committee, to the extent provided in the
resolution, shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the Corporation, and may authorize
the seal of the Corporation to be affixed to all papers which may require it.
Such Committee or Committees shall have such name or names as may be determined
from time to time by resolution adopted by the Board of Directors.
2. Procedures; Quorum and Manner of Acting. Each Committee shall fix
its own rules of procedure, and shall meet where and as provided by such rules
or by resolution of the Board of Directors. Except as otherwise provided by law,
the presence of a majority of the then appointed members of a Committee shall
constitute a quorum for the transaction of business by that Committee, and in
every case where a quorum is present the affirmative vote of a majority of the
members of the Committee present shall be the act of the Committee. Each
Committee shall keep minutes of its proceedings, and actions taken by a
Committee shall be reported to the Board of Directors.
3. Action by Written Consent. Any action required or permitted to be
taken at any meeting of any Committee of the Board of Directors may be taken
without a
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meeting if all the members of the Committee consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Committee.
4. Electronic Communication. Any member or members of a Committee of
the Board of Directors may participate in a meeting of a Committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear and speak to each other.
5. Termination. In the event any person shall cease to be a director
of the Corporation, such person shall simultaneously therewith cease to be a
member of any Committee appointed by the Board of Directors.
ARTICLE IV -- OFFICERS
1. Election and Qualifications. The Board of Directors at its first
meeting held after each annual meeting of Stockholders shall elect the officers
of the Corporation, which shall include a President and a Secretary, and may
include, by election or appointment, one or more Vice-Presidents (any one or
more of whom may be given an additional designation of rank or function), a
Treasurer and such Assistant Secretaries, such Assistant Treasurers and such
other officers as the Board of Directors may from time to time deem proper. Each
officer shall have such powers and duties as may be prescribed by these By-Laws
and as may be assigned by the Board of Directors or the President. Any two or
more offices may be held by the same person.
2. Term of Office and Remuneration. The term of office of all
officers shall be one year and until their respective successors have been
elected and qualified, but any officer may be removed from office, either with
or without cause, at any time by the Board of Directors. Any vacancy in any
office arising from any cause may be filled for the unexpired portion of the
term by the Board of Directors. The remuneration of all officers of the
Corporation may be fixed by the Board of Directors or in such manner as the
Board of Directors shall provide.
3. Resignation; Removal. Any officer may resign at any time upon
written notice to the Corporation and such resignation shall take effect upon
receipt thereof by the President or Secretary, unless otherwise specified in the
resignation. Any officer shall be subject to removal, with or without cause, at
any time by the Board of Directors.
4. Powers and Duties of Officers.
(a) The Chairman of the Board of Directors, if there be one,
shall preside at all meetings of the Board of Directors and shall have such
other powers and duties as may from time to time be assigned by the Board of
Directors.
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(b) The President shall be the chief executive officer of the
Corporation and shall preside at all meetings of the Stockholders and, if there
is no Chairman, of the Board of Directors and shall have general management of
and supervisory authority over the property, business and affairs of the
Corporation and its other officers. The President may execute and deliver in the
name of the Corporation powers of attorney, contracts, bonds and other
obligations and instruments, and shall have such other authority and perform
such other duties as from time to time may be assigned by the Board of
Directors. The President shall see that all orders and resolutions of the Board
of Directors are carried into effect and shall perform such additional duties
that usually pertain to this office.
(c) A Vice President may execute and deliver in the name of
the Corporation powers of attorney, contracts, bonds and other obligations and
instruments pertaining to the regular course of such Vice President's duties,
and shall have such other authority and perform such other duties as from time
to time may be assigned by the Board of Directors or the President.
(d) The Treasurer shall in general have all duties and
authority incident to the position of Treasurer and such other duties and
authority as may be assigned by the Board of Directors or the President. The
Treasurer shall keep full and accurate accounts of receipts and disbursements in
books belonging to the Corporation and shall deposit all moneys and other
valuable effects in the name and to the credit of the Corporation in such
depositories as may be designated by or at the direction of the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors or the President, and shall render, upon
request, an account of all such transactions.
(e) The Secretary shall in general have all the duties and
authority incident to the position of Secretary and such other duties and
authority as may be assigned by the Board of Directors or the President. The
Secretary shall attend all meetings of the Board of Directors and all meetings
of Stockholders and record all the proceedings thereat in a book or books to be
kept for that purpose. The Secretary shall give, or cause to be given, notice of
all meetings of the Stockholders and special meetings of the Board of Directors.
The Secretary shall have custody of the seal of the Corporation and any officer
of the Corporation shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by the signature of the
Secretary or any other officer.
(f) Any assistant officer shall have such duties and authority
as the officer such assistant officer assists and, in addition, such other
duties and authority as the Board of Directors or President shall from time to
time assign.
ARTICLE V -- CONTRACTS, ETC.
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1. Contracts. The Board of Directors may authorize any person or
persons, in the name and on behalf of the Corporation, to enter into or execute
and deliver any and all deeds, bonds, mortgages, contracts and other obligations
or instruments, and such authority may be general or confined to specific
instances.
2. Proxies; Powers of Attorney; Other Instruments.
(a) The Chairman, the President, any Vice President, the
Treasurer or any other person designated by any of them shall have the power and
authority to execute and deliver proxies, powers of attorney and other
instruments on behalf of the Corporation in connection with the execution of
contracts, the purchase of real or personal property, the rights and powers
incident to the ownership of stock by the Corporation and such other situations
as the Chairman, the President, such Vice President or the Treasurer shall
approve, such approval to be conclusively evidenced by the execution of such
proxy, power of attorney or other instrument on behalf of the Corporation.
(b) The Chairman, the President, any Vice President, the
Treasurer or any other person authorized by proxy or power of attorney executed
and delivered by any of them on behalf of the Corporation may attend and vote at
any meeting of stockholders of any company in which the Corporation may hold
stock, and may exercise on behalf of the Corporation any and all of the rights
and powers incident to the ownership of such stock at any such meeting, or
otherwise as specified in the proxy or power of attorney so authorizing any such
person. The Board of Directors, from time to time, may confer like powers upon
any other person.
ARTICLE VI -- BOOKS AND RECORDS
1. Location. The books and records of the Corporation may be kept at
such place or places within or outside the State of Delaware as the Board of
Directors or the respective officers in charge thereof may from time to time
determine. The record books containing the names and addresses of all
Stockholders, the number and class of shares of stock held by each and the dates
when they respectively became the owners of record thereof shall be kept by the
Secretary as prescribed in these By-Laws or by such officer or agent as shall be
designated by the Board of Directors.
2. Addresses of Stockholders. Notices of meetings and all other
corporate notices may be delivered personally or mailed to each Stockholder at
the Stockholder's address as it appears on the records of the Corporation.
3. Fixing Date for Determination of Stockholders of Record.
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(a) In order that the Corporation may determine the
Stockholders entitled to notice of or to vote at any meeting of Stockholders or
any adjournment thereof, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors and which record date shall not
be more than sixty days nor less than ten days before the date of such meeting.
If no record date is fixed by the Board of Directors, the record date for
determining Stockholders entitled to notice of or to vote at a meeting of
Stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held. A determination of
Stockholders of record entitled to notice of or to vote at a meeting of
Stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the
Stockholders entitled to consent to corporate action in writing without a
meeting, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the Board of Directors and which date shall not be more than ten days after
the date upon which the resolution fixing the record date is adopted by the
Board of Directors. If no record date has been fixed by the Board of Directors,
the record date for determining Stockholders entitled to consent to corporate
action in writing without a meeting, when no prior action by the Board of
Directors is required, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of Stockholders are
recorded. Delivery made to the Corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board of Directors and prior action by the Board of
Directors is required by law, the record date for determining Stockholders
entitled to consent to corporate action in writing without a meeting shall be at
the close of business on the day on which the Board of Directors adopts the
resolution taking such prior action.
(c) In order that the Corporation may determine the
Stockholders entitled to receive payment of any dividend or other distribution
or allotment of any rights or the Stockholders entitled to exercise any rights
in respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action not contemplated by paragraph (a) or (b) of this Section
3, the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted and
which record date shall be not more than sixty days prior to such action. If no
record date is fixed, the record date for determining Stockholders for any such
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
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ARTICLE VII CERTIFICATES REPRESENTING STOCK
1. Certificates, Signatures. The shares of the Corporation shall be
represented by certificates, provided that the Board of Directors of the
Corporation may provide by resolution or resolutions that some or all of any or
all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock represented
by certificates and upon request every holder of uncertificated shares shall be
entitled to have a certificate, signed by or in the name of the Corporation by
the Chairman or Vice Chairman of the Board of Directors, or the President or
Vice-President, and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Corporation, representing the number of shares
registered in certificate form. Any and all signatures on any such certificate
may be facsimiles. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
The name of the holder of record of the shares represented thereby, with the
number of such shares and the date of issue, shall be entered on the books of
the Corporation. The Board of Directors shall have power and authority to make
all such rules and regulations as it may deem expedient concerning the issue,
transfer and registration of certificates representing shares of the
Corporation.
2. Transfers of Stock. Upon compliance with provisions restricting
the transfer or registration of transfer of shares of stock, if any, shares of
capital stock shall be transferrable on the books of the Corporation only by the
holder of record thereof in person, or by duly authorized attorney, upon
surrender and cancellation of certificates for a like number of shares, properly
endorsed, and the payment of all taxes due thereon.
3. Fractional Shares. The Corporation may, but shall not be required
to, issue certificates for fractions of a share where necessary to effect
authorized transactions, or the Corporation may pay in cash the fair value of
fractions of a share as of the time when those entitled to receive such
fractions are determined, or it may issue scrip in registered or bearer form
over the manual or facsimile signature of an officer of the Corporation or of
its agent, exchangeable as therein provided for full shares, but such scrip
shall not entitle the holder to any rights of a Stockholder except as therein
provided.
4. Lost, Stolen or Destroyed Certificates. The Corporation may issue
a new certificate of stock in place of any certificate, theretofore issued by
it, alleged to have been lost, stolen or destroyed, and the Board of Directors
may require the owner of any lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond sufficient to indemnify the
Corporation against any claim that may be made against it on
11
account of the alleged loss, theft or destruction of any such certificate or the
issuance of any such new certificate.
ARTICLE VIII -- DIVIDENDS
Subject to the provisions of applicable law and the Certificate of
Incorporation, the Board of Directors shall have full power to determine whether
any, and, if any, what part of any, funds legally available for the payment of
dividends shall be declared as dividends and paid to Stockholders; the division
of the whole or any part of such funds of the Corporation shall rest wholly
within the lawful discretion of the Board of Directors, and it shall not be
required at any time, against such discretion, to divide or pay any part of such
funds among or to the Stockholders as dividends or otherwise; and before payment
of any dividend, there may be set aside out of any funds of the Corporation
available for dividends such sum or sums as the Board of Directors from time to
time, in its absolute discretion, deems proper as a reserve or reserves to meet
contingencies or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for any proper purpose, and the Board of
Directors may modify or abolish any such reserve. Stockholders shall receive
dividends pro rata in proportion to the number of shares of Common Stock
respectively held by them. A holder of Common Stock shall be deemed to share pro
rata in all dividends declared by the Board of Directors within the meaning of
the preceding sentence if such Stockholder receives assets (whether consisting
of cash, securities, real property, equipment, inventory or other assets) the
fair market value of which is in the same proportion to the fair market value of
the total assets of the Corporation available for distribution as a dividend as
the number of shares of Common Stock held by such holder of Common Stock is to
the total number of issued and outstanding shares of Common Stock of the
Corporation. A Stockholder shall not have the right to receive a pro rata share
of each or any such asset available for distribution as a dividend, however, the
Corporation shall not be prohibited hereby from making a pro rata distribution
of each or any such asset available for distribution as a dividend. The fair
market value of any and all assets of the Corporation distributed as a dividend
shall be determined in the sole discretion of the Corporation's Board of
Directors.
ARTICLE IX -- RATIFICATION
Any transaction, questioned in any lawsuit on the ground of lack of
authority, defective or irregular execution, adverse interest of any director,
officer or Stockholder, nondisclosure, miscomputation, or the application of
improper principles or practices of accounting, may be ratified before or after
judgment, by the Board of Directors or by the Stockholders, as appropriate, and
if so ratified shall have the same force and effect as if the questioned
transaction had been originally duly authorized. Such ratification shall be
binding upon the Corporation and its Stockholders and shall constitute a bar to
any claim or execution of any judgment in respect of such questioned
transaction.
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ARTICLE X -- CORPORATE SEAL
The corporate seal shall contain the words "Corporate Seal" and such
additional information as the officer inscribing such seal shall determine in
such officer's sole discretion. The corporate seal may be used by causing it or
a facsimile thereof to be impressed or affixed or reproduced or otherwise
displayed or it may be manually inscribed.
ARTICLE XI -- FISCAL YEAR
The fiscal year of the Corporation shall be fixed, and shall be
subject to change, by the Board of Directors. Unless otherwise fixed by the
Board of Directors, the fiscal year of the Corporation shall end on September
30.
ARTICLE XII -- WAIVER OF NOTICE
Whenever notice is required to be given by these By-Laws or by the
Certificate of Incorporation or by law, a written waiver thereof, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to notice.
ARTICLE XIII -- AMENDMENTS
The Board of Directors shall have power to adopt, amend or repeal
By-Laws. By-Laws adopted by the Board of Directors may be repealed or changed,
and new By-Laws made, by the Stockholders, and the Stockholders may prescribe
that any By-Law made by them shall not be altered, amended or repealed by the
Board of Directors.
ARTICLE XIV -- INDEMNIFICATION
1. Power to Indemnify in Action, Suits or Proceedings Other Than
Those By or In The Right of the Corporation. Subject to Section 3 of this
Article XIV, the Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' and
other professionals' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding if such person acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe
13
the conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that the conduct
was unlawful.
2. Power to Indemnify in Actions, Suits or Proceedings By or In The
Right of the Corporation. Subject to Section 3 of this Article XIV, the
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' and
other professionals' fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the Corporation, except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Corporation unless and only to the extent
that the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
3. Authorization of Indemnification. Any indemnification under this
Article XIV (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because such
person has met the applicable standard of conduct set forth in Section 1 or
Section 2 of this Article XIV, as the case may be. Such determination shall be
made (i) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (ii) if
such a quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (iii) if the Board of Directors so directs, by the Stockholders. To
the extent, however, that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding described above, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses (including
attorneys' and other professionals' fees) actually and reasonably incurred by
such person in connection therewith, without the necessity of authorization in
the specific case.
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4. Good Faith Defined. For purposes of any determination under
Section 3 of this Article XIV, a person shall be deemed to have acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the Corporation, or, with respect to any criminal action or
proceeding, to have had no reasonable cause to believe the conduct was unlawful,
if the action is based on (a) the records or books of account of the Corporation
or another enterprise (as defined below in this Section 4), or on information
supplied to such person by the officers of the Corporation or another enterprise
in the course of their duties, unless such person had reasonable cause to
believe that reliance thereon would not be justifiable, or on (b) the advice of
legal counsel for the Corporation or another enterprise, or on information or
records given or reports made to the Corporation or another enterprise by an
independent certified public accountant, independent financial adviser,
appraiser or other expert, as to matters reasonably believed to be within such
other person's professional or expert competence. The term "another enterprise"
as used in this Section 4 shall mean any other corporation or any partnership,
joint venture, trust or other enterprise of which such person is or was serving
at the request of the Corporation as a director, officer, employee or agent. The
provisions of this Section 4 shall not be deemed to be exclusive or to limit in
any way the circumstances in which a person may be deemed to have met the
applicable standard of conduct set forth in Sections 1 or 2 of this Article XIV,
as the case may be.
5. Indemnification By A Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article XIV, and
notwithstanding the absence of any determination thereunder, any director,
officer, employee or agent may apply to any court of competent jurisdiction in
the State of Delaware for indemnification to the extent otherwise permissible
under Sections 1 and 2 of this Article XIV. The basis of such indemnification by
a court shall be a determination by such court that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standards of conduct set forth in Sections 1 or 2 of this
Article XIV, as the case may be. Notice of any application for indemnification
pursuant to this Section 5 shall be given to the Corporation promptly upon the
filing of such application.
6. Expenses Payable In Advance. Expenses (including attorneys' and
other professionals' fees) incurred by an officer or director in defending any
threatened or pending civil, criminal, administrative or investigative action,
suit or proceeding may, but shall not be required to, be paid by the Corporation
in advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or officer, to repay
such amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the Corporation as authorized in this Article XIV.
Such expenses (including attorneys' and other professionals' fees) incurred by
other employees and agents may be so paid upon such terms and conditions, if
any, as the Board of Directors deems appropriate.
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7. Non-Exclusivity and Survival of Indemnification. The
indemnification and advancement of expenses provided by or granted pursuant to
this Article XIV shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
any By-Law, agreement, contract, vote of Stockholders or of disinterested
directors, or pursuant to the direction (howsoever embodied) of any court of
competent jurisdiction or otherwise, it being the policy of the Corporation that
indemnification of the persons specified in Sections 1 and 2 of this Article XIV
(as distinguished from advancement of funds pursuant to Section 6 of this
Article XIV) shall be made to the fullest extent permitted by law. The
provisions of this Article XIV shall not be deemed to preclude the
indemnification of any person who is not specified in Sections 1 and 2 of this
Article XIV but whom the Corporation has the power or obligation to indemnify
under the provisions of the General Corporation Law of the State of Delaware, or
otherwise. The indemnification provided by this Article XIV shall continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors, administrators and other
comparable legal representatives of such person. The rights conferred in this
Article XIV shall be enforceable as contract rights, and shall continue to exist
after any rescission or restrictive modification hereof with respect to events
occurring prior thereto.
8. Meaning of "other enterprises" in connection with Employee
Benefit Plans, etc. For purposes of this Article XIV (including Sections 1, 2, 4
and 9 hereof), references to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on a person
with respect to an employee benefit plan; references to "serving at the request
of the Corporation" shall include any service as a director, officer, employee
or agent of the Corporation which imposes duties on, or involves services by,
such director, officer, employee, or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who has acted in good
faith and in a manner reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of the Corporation" as
referred to in this Article XIV.
9. Insurance. The Corporation may, but shall not be required to,
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person's status as such, whether or
not the Corporation would have the power or the obligation to indemnify such
person against such liability under the provisions of this Article XIV.
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Exhibit 3.4(i)
Beazer Homes Texas, L.P.
Agreement of Limited Partnership
THIS AGREEMENT OF LIMITED PARTNERSHIP (this "Agreement") is entered
into as of the 26th day of March, 1996 between Beazer Homes Texas Holdings,
Inc., a Delaware corporation (the "General Partner"), and Beazer Homes Holding
Corp., a Delaware corporation (the "Limited Partner" and together with the
General Partner, the "Partners" and individually a "Partner").
RECITALS
WHEREAS, the General Partner and the Limited Partner desire to form
a limited partnership under the Delaware Revised Uniform Limited Partnership
Act, as amended and in effect from time to time (the "Act"); and
WHEREAS, in order to effect the business objectives of the
Partnership, the parties hereto desire to provide the terms for the formation,
capitalization and governance of the Partnership and to set forth in detail
their rights and obligations relating to the Partnership.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto, intending to be legally bound hereby, agree as
follows:
TERMS OF AGREEMENT
Section I. GENERAL PROVISIONS.
1.1 Formation. The parties hereto hereby agree to form the
Partnership. The General Partner shall take all necessary action required by law
to maintain the Partnership as a limited partnership under the Act and under the
laws of all other jurisdictions in which the Partnership may elect to conduct
business.
1.2 Name. The name of the Partnership shall be Beazer Homes Texas,
L.P.
1.3 Business of the Partnership. The purpose of the Partnership
shall be to engage in the business of manufacturing homesite inventory and
related services in the United States and to engage in any business activity
related or incidental thereto.
1.4 Place of Business. The Partnership shall maintain its principal
office and place of business at the address set forth on the signature page
hereto. The Partnership shall also maintain an address and a place of business
in the state of Delaware, located at the Corporation Trust Center, 1209 Orange
Street, Wilmington, Delaware 19801. The registered agent of the Partnership at
such address shall be The Corporation Trust Company. The General Partner may, at
any time and from time to time, change the location of its place of business.
The General Partner may establish such additional place or places of business as
it may from time to time determine.
1.5 Duration of the Partnership. The Partnership shall commence on
the date the Certificate of Limited Partnership for the Partnership is filed in
accordance with the Act and shall continue its existence without interruption,
subject to the provisions of the Act, until December 31, 2026, unless terminated
at an earlier date in accordance with Section VIII of this Agreement.
Notwithstanding the foregoing, and subject to the provisions of Section VIII
hereof, the Partners may extend the Partnership's term beyond December 31, 2026
by unanimous vote.
1.6 Title to Partnership Property. All property owned by the
Partnership, whether real or personal, tangible or intangible, shall be owned by
the Partnership as an entity, and no Partner individually shall have any
ownership interest in such property.
1.7 Merger Agreement. Each of the Partners acknowledge and agree
that that certain Agreement and Plan of Merger (the "Merger Agreement") whereby
Beazer Homes Texas, Inc., a Texas corporation will be merged with and into the
Partnership has been duly authorized by the constituent documents of each party
to the Merger Agreement. The General Partner is hereby authorized to execute,
deliver and perform the Merger Agreement and any documents, instruments, or
agreements contemplated by or relating to the Merger Agreement.
1.8 Qualification to Do Business. For the purpose of authorizing the
Partnership to do business under the laws of any state, territory or possession
of the United States or of any foreign country in which it is necessary or
convenient for the Partnership to transact business, the General Partner of the
Partnership be, and they hereby are, authorized, directed and empowered, in the
name and on behalf of the Partnership, to take such action as may be necessary
or advisable to effect the qualification of the Partnership to do business as a
foreign corporation in any of such states, territories, possessions or foreign
countries and in connection therewith to appoint and substitute all necessary
agents or attorneys for service of process, to designate or change the location
of all necessary statutory offices, and to
2
execute, acknowledge, verify, deliver, file or cause to be published any
necessary applications, papers, certificates, reports, consents to service of
process, powers of attorney and other instruments as may be required by any of
such laws, and, whenever it is expedient for the Partnership to cease doing
business and withdraw from any such state, territory, possession or foreign
country, to revoke any appointment of agent or attorney for service of process
and to file such applications, papers, certificates, reports, revocation of
appointment or surrender of authority as may be necessary to terminate the
authority of the Partnership to do business in any such state, territory,
possession or foreign country.
Section II. DEFINITIONS. For purposes of this Agreement, unless the
context otherwise requires, the following terms shall have the following
respective meanings:
2.1 Act. Defined in the recitals.
2.2 Affiliate. When used with reference to a specific Person, (a)
any director, officer, employee or general partner of such Person and (b) a
Person who directly, or indirectly through one or more intermediaries, controls,
is controlled by or is under common control with, the specified Person. As used
herein, "control" shall mean the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
2.3 Agreement. This Agreement of Limited Partnership, as it may be
amended from time to time.
2.4 Applicable Law. As to any Person, any law, act, ordinance, code,
requirement, rule, regulation, policy, subpoena, order, writ, award, injunction,
judgment or decree, whether foreign or domestic, and whether national, federal,
state, provincial, or local, applicable to such Person or its assets.
2.5 Bankruptcy. For purposes of this Agreement, the filing by any
Person of any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future federal or state bankruptcy, insolvency or
other similar statute, law or regulation; or the filing by any Person of any
answer admitting (or the failure by such Person to make a required responsive
pleading to) the material allegations of a petition filed against such Person in
any such proceeding; or the seeking or consenting to or acquiescence in the
judicial appointment of any trustee, fiscal agent, receiver or liquidator of
such Person or of all or any substantial part of its properties or the taking of
any action looking to its dissolution or liquidation; or the failure, within
ninety (90) days after the commencement of an involuntary case or action against
any such Person seeking any bankruptcy, reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, of such case or action to have
been dismissed or of all orders and proceedings
3
thereunder affecting the operations or the business of such Person to have been
stayed, or the setting aside of the stay of any such order or proceeding
thereafter; or the failure, within ninety (90) days after the judicial
appointment without the consent or acquiescence of such Person of any trustee,
fiscal agent, receiver or liquidator of such person or of all or any substantial
part of its properties, of such appointment to have been vacated; or the
assignment by such Person for the benefit of creditors or the admission in
writing by such Person that its assets are insufficient to pay its liabilities
as they come due.
2.6 Capital Account. The account maintained by the Partnership for
each Partner as provided in Section 4.3 of this Agreement.
2.7 Capital Contributions. The total amount of all cash and the fair
market value of all property contributed (or deemed to be contributed) by each
Partner to the Partnership.
2.8 Cash Flow. Any cash generated by the Partnership in any manner
to the extent that the General Partner determines such cash is not necessary for
the operation of the Partnership's business.
2.9 Claims. Defined in Section 3.4 hereof.
2.10 Code. The Internal Revenue Code of 1986, as amended and in
effect from time to time, and any successor statute, statutes or statutory
provisions thereto.
2.11 General Partner. Defined in the preamble hereof and any and all
other Persons who become substitute or successor general partners in accordance
with the provisions of this Agreement.
2.12 Limited Partner. Defined in the preamble hereof and any and all
other Persons who become substitute or successor limited partners in accordance
with the provisions of this Agreement.
2.13 Liquidating Share. In the case of the dissolution of the
Partnership, the positive Capital Account balance of a Partner as of the close
of business on the effective date of such dissolution.
2.14 Liquidator. Defined in Section 8.2(a) hereof.
2.15 Partner and Partners. Defined in the Recitals.
2.16 Partnership. Beazer Homes Texas, L.P., the Delaware limited
partnership.
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2.17 Partnership Interest. The ownership interest of a Partner in
the Partnership from time to time, including the right of such Partner to any
and all distributions (liquidating and otherwise) and allocations of the income,
gains, losses, deductions and credits of the Partnership to which such Partner
may be entitled, as provided in this Agreement and in the Act, together with the
management and participation rights devolving on such Partner by virtue of his
or her status as a partner under the Act and as specifically set forth in this
Agreement, and the obligations of such Partner to comply with all the terms and
provisions of this Agreement and of the Act.
2.18 Percentage Interest. Each Partner's allocable share of all
income, gains, losses, deductions, credits and, when specified herein,
distributions of the Partnership.
2.19 Person. Any individual, partnership, corporation, trust,
limited liability company or other entity.
2.20 Service. The Internal Revenue Service, an agency of the United
States Government, or any successor agency thereto.
Section III. POWERS, DUTIES, LIABILITIES AND COMPENSATION.
3.1 Management of the Partnership. The management and control of the
business and affairs of the Partnership shall be vested in the General Partner.
3.2 Authority of the General Partner.
(a) The General Partner shall have all the authority, rights and
powers conferred by law and those required or appropriate to the management and
operation of the Partnership's business. Except as otherwise expressly provided
in this Agreement, all decisions with respect to any matter set forth in this
Agreement or otherwise affecting or arising out of the conduct of the business
of the Partnership shall be made by the General Partner. Specifically, but not
by way of limitation, the General Partner shall be authorized in the name of and
on behalf of the Partnership:
(i) to borrow and lend money and, as security therefor, to mortgage,
pledge or otherwise encumber the assets of the Partnership;
(ii) to employ such agents, employees, managers, investment
managers, accountants, attorneys, consultants and other Persons, including
itself, necessary or appropriate to carry out the business and affairs of
the Partnership, whether or not any such Persons so employed are
associated with or related to any Partner, and to pay such fees, expenses,
salaries, wages and
5
other compensation to such Persons as it shall, in its sole discretion,
determine;
(iii) to pay, extend, renew, modify, adjust, submit to arbitration,
prosecute, defend or compromise, upon such terms as it may determine and
upon such evidence as it may deem sufficient, any obligation, suit,
liability, cause of action or claim, including any relating to the payment
of taxes, either in favor of or against the Partnership;
(iv) to pay any and all fees and to make any and all expenditures
which it, in its sole discretion, deems necessary or appropriate in
connection with the organization of the Partnership and the carrying out
of its obligations and responsibilities under this Agreement;
(v) to enter into agreements and engage in any transaction with
Persons with which or whom the General Partner is or may be affiliated or
with any other Persons;
(vi) to make all elections required or permitted to be made by the
Partnership under the Code, including but not limited to the election
pursuant to Code Section 754 to adjust the basis of the Partnership's
assets for United States Federal income tax purposes; and
(vii) to assume and exercise all rights, powers and responsibilities
granted to general partners by the Act.
(b) With respect to all of its rights, powers and responsibilities
under this Agreement, the General Partner is authorized to execute and
deliver, in the name and on behalf of the Partnership, such notes and
other evidences of indebtedness, contracts, assignments, deeds, leases,
loan agreements, mortgages, deeds of trust and other security instruments
as it deems proper, all on such terms and conditions as it deems proper.
3.3 Services of the General Partner. The General Partner shall
devote such time and effort to the business of the Partnership as may be
necessary to promote adequately the interests of the Partnership and the
mutual interests of the Partners; provided, however, that, it is
specifically understood and agreed that the General Partner (and the
officers and directors of the General Partner) shall not be required to
devote full time to the business of the Partnership; provided, further,
that, the General Partner and its Affiliates may at any time and from time
to time engage in and possess interests in other business ventures
(whether or not in competition with the business of the Partnership) of
any and every type and description, independently or with others, and
neither the Partnership nor any Partner
6
shall by virtue of this Agreement or otherwise have any right, title or interest
in or to such independent ventures.
3.4 Liability of the General Partner; Indemnification of the General
Partner. Neither the General Partner nor any of its Affiliates shall have any
liability to the Partnership or to any Partner for any loss suffered by the
Partnership which arises out of any action or inaction of the General Partner or
any of its Affiliates, so long as the General Partner or such Affiliates, in
good faith, shall have determined that such action or inaction was in the best
interest of the Partnership and such action or inaction did not constitute fraud
or willful misconduct. The General Partner and its Affiliates shall be
indemnified by the Partnership to the fullest extent permitted by law against
any losses, judgments, liabilities, damages, expenses and amounts paid in
settlement of any claims (together, the "Claims") sustained in connection with
any act performed or omission within the scope of authority conferred by this
Agreement; provided, that, such Claims were not the result of fraud or willful
misconduct on the part of the General Partner, or any of its Affiliates. The
Partnership may advance to the General Partner and any of its Affiliates any
amounts required to defend against any Claim for which the General Partner or
any of such Affiliates may be entitled to indemnification in accordance with
this Section 3.4. If it is ultimately determined that the Person receiving such
advance is not entitled to indemnification pursuant to this Section 3.4, such
Person shall promptly repay to the Partnership any amounts so advanced by the
Partnership.
3.5 Limitations on Limited Partner. Except as set forth in this
Agreement, the Limited Partner, in its capacity as Limited Partner, shall not
(a) be permitted to take part in the control of the business or affairs of the
Partnership, (b) have any voice in the management or operation of the
Partnership or (c) have the authority or power in its capacity as Limited
Partner to act as agent for or on behalf of the Partnership or any other
Partner, to do any act that would be binding on the Partnership or any other
Partner or to incur any expenditures on behalf of or with respect to the
Partnership. A Limited Partner shall not have the right to demand or receive
property other than cash for its Partnership Interest.
3.6 Liability of Limited Partners. So long as a Limited Partner
complies with the provisions of Section 3.5 hereof, it shall not be required to
make any contributions to the capital of the Partnership to restore a loss or
deficit Capital Account balance in excess of its Capital Contribution, and it
shall have no liability for the losses, debts, liabilities or other obligations
of the Partnership in excess of its Capital Contribution except as otherwise
provided under the Act.
3.7 Rights of Limited Partners. The Limited Partners shall have only
the rights expressly granted to them in this Agreement and as required under the
Act. Each Limited Partner may receive any distributions or allocations to which
it is entitled in accordance with Section V hereof.
7
3.8 Certain Fees and Expenses. Except as specifically provided to
the contrary in this Agreement, all out-of-pocket expenses incurred by the
General Partner, whether or not in direct connection with the organization and
operation of the Partnership's business, including, without limitation, legal
fees and accounting fees relating to the organization of the Partnership, shall
be paid by the Partnership or reimbursed to the General Partner by the
Partnership without the consent of the Limited Partners.
3.9 Action Without a Meeting. To the extent that any matter must be
approved by a vote of the Limited Partners, such vote may be submitted to the
Limited Partners for their approval by written consent without a meeting.
Written consents shall be treated for all purposes as votes at a meeting.
Section IV. CAPITAL CONTRIBUTIONS.
4.1 General Partner Capital Contribution. The General Partner has
contributed the amount set forth on Exhibit A attached hereto to the Partnership
in exchange for its 1% Partnership Interest in the Partnership.
4.2 Limited Partner Capital Contribution. The Limited Partner has
contributed the amount set forth on Exhibit A attached hereto to the Partnership
in exchange for its 99% Partnership Interest in the Partnership.
4.3 Capital Accounts.
(a) A Capital Account shall be maintained for each Partner in
accordance with the capital account maintenance rules set forth in Treasury
Regulations Section 1.704-1(b)(2)(iv). Without limiting the generality of the
foregoing, each Partner's Capital Account shall be increased by (i) the amount
of any money contributed by such Partner to the Partnership, (ii) the fair
market value (as determined by the General Partner) of property contributed by
such Partner to the Partnership (net of liabilities secured by such contributed
property that the Partnership is considered to assume or take subject to under
Code Section 752) and (iii) allocations to such Partner of Partnership income
and gain, including income and gain exempt from tax and income and gain
described in Treasury Regulations Section 1.704-1(b)(2)(iv)(g), but excluding
items of income and gain described in Treasury Regulations Section
1.704-1(b)(4)(i), and each Partner's Capital Account shall be decreased by (A)
the amount of any money distributed to such Partner by the Partnership, (B) the
fair market value (as determined by the General Partner) of property distributed
to such Partner by the Partnership (net of liabilities secured by such
distributed property that the distributee Partner is considered to assume or
take subject to under Code Section 752), (C) allocations to such Partner of
expenditures of the Partnership described in Code Section 705(a)(2)(B) and (D)
allocations to such Partner of Partnership loss and deduction, including loss
and deduction described in Treasury Regulations Section 1.704-1(b)(2)(iv)(g),
but excluding
8
items of loss or deduction described in clause (B) of this Section 4.3(a) and
Treasury Regulations Section 1.704-1(b)(4)(i) and 1.704-1(b)(4)(iii). The
Capital Account of each Partner shall be appropriately adjusted for income,
gain, loss and deduction as required by Treasury Regulations Section
1.704-1(b)(2)(iv)(g) (relating to allocations and adjustments resulting from the
reflection of property on the books of the Partnership at book value, or a
revaluation thereof, rather than at such property's adjusted tax basis).
(b) No interest shall be paid by the Partnership on any Capital
Contribution. No Partner shall be entitled to withdraw from the Partnership, or
demand the return of any part of its Capital Contribution or any balance in its
Capital Account, or to receive any distribution, except in accordance with the
terms of this Agreement. No Partner shall be liable for the return of the
Capital Contributions of any other Partner.
(c) Notwithstanding any provision herein to the contrary, the
Limited Partner's Capital Account shall be increased by the fair market value of
the assets (less any liabilities) of Beazer Homes Texas, Inc., a Texas
corporation and a wholly owned subsidiary of the Limited Partner (the
"Subsidiary") attributable to the Partnership as a result of the merger of the
Subsidiary with and into the Partnership, pursuant to that certain Agreement and
Plan of Merger between the Subsidiary and the Partnership.
Section V. DISTRIBUTIONS AND ALLOCATIONS.
5.1 Distributions. The Partnership may make distributions to the
Partners in U.S. dollars out of Cash Flow at such times and in such amounts as
the General Partner may determine, in its sole discretion. Distributions
pursuant to this Section 5.1 will be made 99% to the Limited Partner and 1% to
the General Partner.
5.2 Allocation of Income, Gain, Loss, Deduction and Credit.
(a) Items of income, gain, loss and deduction shall be allocated to
the Partners in accordance with, and in proportion to, their respective
Percentage Interests.
(b) Except to the extent otherwise provided in Treasury Regulations
Section 1.704-1(b)(4)(ii), any tax credits or tax credit recapture for any year
shall be allocated among the Partners in accordance with each Partner's
Percentage Interest as of the time such tax credit or tax credit recapture
arises.
(c) Notwithstanding the foregoing, all allocations of income, gain,
loss and deduction are intended to have substantial economic effect within the
meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2). Accordingly,
the General Partner shall have the authority to cause any item of income, gain,
loss or deduction to be allocated in such a manner as to comply with the
substantial economic effect and capital account
9
maintenance rules set forth under Code Section 704 and the Treasury Regulations
promulgated thereunder. In this regard, each Partner shall be specially
allocated items of Partnership income and gain in the amounts necessary to
comply with Treasury Regulations Sections 1.704-1(b)(2)(ii)(d) ("qualified
income offset"), 1.704-2(f) ("minimum gain chargeback") and 1.704-2(i)(4)
("partner minimum gain chargeback"), respectively. The previous sentence is
intended to comply with the qualified income offset, minimum gain chargeback and
partner minimum gain chargeback requirements in Treasury Regulations Sections
1.704-1(b)(2)(ii)(d), 1.704-2(f) and 1.704-2(i)(4), respectively, and shall be
interpreted consistently therewith.
5.3 Allocations Upon Transfer of Partnership Interests. In the event
of the transfer of any Partnership Interest, all items of income, gain, loss,
deduction and credit for the fiscal year in which the transfer occurs shall be
allocated for Federal income tax purposes between the transferor and the
transferee on the basis of the ownership of the interest at the time the
particular item is taken into account by the Partnership for Federal income tax
purposes, except to the extent otherwise required by Code Section 706(d).
Distributions made on or after the effective date of transfer shall be made to
the transferee, regardless of when such distributions accrued on the books of
the Partnership. The effective date of the transfer shall be (a) in the case of
a voluntary transfer, the actual date the transfer is recorded on the books of
the Partnership or (b) in the case of an involuntary transfer, the date of the
operative event.
Section VI. BOOKS AND RECORDS; ACCOUNTS.
6.1 Books and Records. The General Partner shall maintain at the
office of the Partnership full and accurate books of the Partnership showing the
names and addresses of the Partners, all receipts and expenditures, assets and
liabilities, profits and losses, and all other books, records and information
required by the Act or necessary for recording the Partnership's business and
affairs including (a) federal, state and local income tax or information returns
and reports, if any, and (b) audited financial statements of the Partnership.
All Partners and their duly authorized representatives shall have the right to
inspect and copy during reasonable business hours, at their expense, any and all
of the Partnership's books and records, including books and records necessary to
enable a Partner to defend any tax audit or related proceeding.
6.2 Tax Matters Partners; Annual Tax Returns. The General Partner is
hereby designated the "Tax Matters Partner" for federal income tax purposes
pursuant to Section 6231 of the Code (or any successor provision thereof) and is
authorized to take all necessary action to qualify as such. The General Partner
shall prepare or cause to be prepared all tax returns and any other reports or
forms (including IRS Forms K-1) as required by the Service or as may be
necessary for a Partner to file its Federal or any required state or local
income tax return. In the event that the Tax Matters Partner shall determine
that it
10
is prudent to modify the manner in which Capital Accounts, or any debits or
credits thereto are computed in order to comply with Treasury Regulations
Section 1.704-1(b), the Tax Matters Partner may make such modifications.
6.3 Delivery to Partners and Inspection. Each Partner, or its duly
authorized representative, has the right, upon reasonable request and at its own
expense, to do each of the following:
(a) Subject to applicable law and confidentiality agreements to
which the Partnership or the General Partner is a party, inspect and copy during
normal business hours any of the Partnership records as provided in Section 6.1;
(b) Obtain from the General Partner, promptly after becoming
available, a copy of the Partnership's federal, state and local income or other
tax or information returns for each year; and
(c) Each Partner agrees to hold in confidence, (i) information
determined by the General Partner to be confidential, such determination to be
based upon the General Partner's reasonable belief that disclosure of such
information is likely to have an adverse effect on the Partnership or its
business and (ii) information which the Partnership is required by agreements
with third parties to hold confidential.
6.4 Reports to Partners. Within one hundred twenty (120) days after
the end of each fiscal year (or such later date as the General Partner shall
determine), the General Partner shall furnish the Partners within an unaudited
financial report of the Partnership.
Section VII. ASSIGNABILITY OF INTERESTS.
7.1 Transfer Restrictions; Substitute Partners. Any Partner may
transfer its Partnership Interest only in accordance with Applicable Law. No
assignee, purchaser or transferee of any Partner's Partnership Interest shall
have the right to become a substitute Partner, unless:
(a) The transferring Partner has designated such intention in a
written instrument of assignment, a sale or transfer, a copy of which has been
delivered to the General Partner and has otherwise complied with the provisions
of Section 7.1;
(b) The person acquiring the Partner's Partnership Interest has
adopted and agreed in writing to be bound by all of the provisions hereof, as
the same may have been amended, and to assume all outstanding funding
commitments of the transferring Partner;
11
(c) The transferring Partner has obtained the written consent of the
General Partner, which consent shall not be unreasonably withheld;
(d) All documents reasonably required by the General Partner and the
Act to effect the substitution of the person acquiring the Partner's Partnership
Interest as a Partner shall have been executed and filed at no cost to the
Partnership; and
(e) Any necessary prior consents have been obtained from any
regulatory authorities.
7.2 Resignation.
(a) The General Partner may voluntarily resign at any time. Subject
to the prior admission to the Partnership of a substituted General Partner, the
General Partner shall be deemed to have resigned on the 90th day after the
occurrence of its Bankruptcy. Upon the resignation, Bankruptcy or dissolution of
the General Partner, the business of the Partnership shall terminate and the
Partnership shall thereafter be dissolved in accordance with the Act, unless a
successor General Partner is appointed or elected pursuant to Section 7.2(c) of
this Agreement and a majority in interest of the remaining Partners elect to
continue the Partnership in accordance with the Act. To the extent permitted by
law, the General Partner shall not cease to be the General Partner of the
Partnership for any reason other than the reasons set forth in this Section 7.2.
(b) If the General Partner shall voluntarily or involuntarily cease
for any reason to be the general partner of the Partnership, (i) it nevertheless
shall be and remain liable for all obligations and liabilities incurred by it as
General Partner prior to the time it shall cease to be the General Partner, but
it shall be free of any obligation or liability incurred on account of the
activities of the Partnership from and after that time and (ii) it shall remain
entitled to exculpation and indemnification from the Partnership to the extent
provided herein or elsewhere.
(c) At any time within ninety (90) days after the date of notice of
resignation, dissolution or Bankruptcy of the General Partner, a majority in
interest of the remaining Partners may elect or designate a substituted General
Partner in accordance with the Act. Upon the payment by the substituted General
Partner to the Partnership of an amount equal to the fair market value of a 1
percent Percentage Interest in the Partnership and the written agreement of the
substituted General Partner elected or designated to be bound by this Agreement,
it shall thereafter serve as General Partner subject to all of the terms,
conditions and liabilities to which the predecessor General Partner was subject;
provided, however, that, the substituted General Partner must be admitted to the
Partnership prior to the withdrawal of the predecessor General Partner.
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Section VIII. DISSOLUTION AND TERMINATION.
8.1 Dissolution. Unless sooner terminated in accordance with its
terms, the Partnership shall be dissolved upon the occurrence of any one of the
following:
(a) an election to dissolve the Partnership made by the General
Partner;
(b) the sale, exchange or other disposition of all or substantially
all of the property of the Partnership;
(c) the Bankruptcy, dissolution, liquidation, death, disability,
legal incapacity, removal or withdrawal of the General Partner, absent the
appointment of a substituted General Partner by the Limited Partners;
(d) the expiration of the term of the Partnership pursuant to
Section 1.5; or
(e) any other event causing dissolution of the Partnership under the
Act.
8.2 Liquidation of Partnership Assets.
(a) Upon the dissolution of the Partnership, a Person (which may
include the General Partner) shall be appointed by the General Partner (or, if
the General Partner has been dissolved, a majority in interest of the Limited
Partners) to act as liquidator (the "Liquidator") to wind up the Partnership.
The Liquidator shall be required to agree not to resign at any time without
fifteen (15) days' prior written notice and (if other than the General Partner)
may be removed at any time, with or without cause, by notice of removal approved
by the General Partner (or, if the General Partner has been dissolved, a
majority in interest of the Limited Partners). Upon the resignation or removal
of the Liquidator, a successor and substitute Liquidator (who shall have and
succeed to all rights, powers and obligations of the original Liquidator) shall,
within thirty (30) days thereafter, be approved by the General Partner (or, if
the General Partner has been dissolved, a majority in interest of the Limited
Partners). Except as expressly provided in this Section 8.2, the Liquidator
approved in the manner provided herein shall have and may exercise, without
further authorization or approval of any of the parties hereto, all of the
powers conferred upon the General Partner under the terms of this Agreement
(provided that the Liquidator shall be subject to all applicable limitations,
contractual and otherwise, upon the exercise of such powers) to the extent
appropriate or necessary in the reasonable and good faith judgment of the
Liquidator to carry out the duties and functions of the Liquidator hereunder for
and during such period of time as shall be reasonably required to complete the
winding-up and liquidation of the Partnership as provided for herein.
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(b) The proceeds of liquidation shall be:
(i) First, applied to the payment of the debts and liabilities of
the Partnership (including any loans to the Partnership made by any
Partner or any Affiliate thereof), the expenses of liquidation, and the
establishment of such reserves as the Liquidator may reasonably deem
necessary for potential or contingent liabilities of the Partnership;
(ii) Next, distributed to the Partners in proportion to, and to the
extent of, each Partner's Liquidating Share, after giving effect to all
contributions, distributions and allocations for all periods; and
(iii) Thereafter, to the Partners in accordance with, and in
proportion to, their respective Percentage Interests.
(c) Liquidating distributions must be made by the later of (i) the
end of the fiscal year in which the liquidation occurs or (ii) ninety (90) days
after the date of liquidation.
8.3 Distribution in Kind.
(a) If the Liquidator shall determine that the Partners would be
materially adversely affected if the Partnership were to convert the
Partnership's assets to cash or cash equivalents, then the Liquidator may
distribute all assets, at their then prevailing fair market values, in kind to
the Partners. If so, the Liquidator shall obtain an independent appraisal of the
fair market value of each such asset as of a date reasonably close to the date
of liquidation. Any unrealized appreciation or depreciation with respect to such
assets shall be allocated among the Partners (in accordance with Section 5.2
hereof, assuming that the property was sold for fair market value) and
distribution of any such assets in kind to Partners shall be considered for
purposes of Section 8.2 hereof a distribution of an amount equal to the assets'
fair market value less any liabilities secured by such distributed property that
such Partner is considered to assume or take subject to under Section 752 of the
Code.
(b) Notwithstanding the provisions of Section 8.3(a) hereof, if,
upon liquidation of the Partnership, the Liquidator shall determine in good
faith that an immediate sale of part or all of the Partnership's assets would
cause undue loss to the Partners, the Liquidator may, in order to avoid such
loss, either:
(i) defer the liquidation of, and withhold from distribution for a
reasonable time, any assets of the Partnership except those necessary to
satisfy debts and liabilities of the Partnership (other than those to the
Partners); or
14
(ii) liquidate such Partnership assets as may be necessary to pay
the debts and liabilities of the Partnership and then distribute to the
remaining Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 8.2 hereof, undivided interests
in any remaining Partnership assets.
8.4 Cancellation of Certificate of Limited Partnership. Upon the
completion of the distribution of Partnership assets as provided in this Section
VIII, the Partnership shall be terminated, and the Liquidator (or the Partners,
if necessary) shall cause the cancellation of the Certificate of Limited
Partnership and all amendments thereto, and shall take such other actions as may
be necessary or appropriate to terminate the Partnership.
Section IX. RULES OF CONVENTION.
9.1 Notices. Any notices, elections or demands permitted or required
to be made under this Agreement shall be in writing, signed by the Partner
giving such notice, election or demand and shall be delivered personally, or
sent by facsimile or by regular mail or by registered or certified mail, return
receipt requested, to each of the other Partners, at its address set forth in
the records of the Partnership, or at such other address as may be supplied by
written notice given in conformity with the terms of this Section 9.1. All
notices shall be deemed to have been delivered on the date of their personal
delivery or mailing.
9.2 Successors and Assigns. Subject to the restrictions on transfer
set forth in this Agreement, this Agreement and each provision of this Agreement
shall be binding upon and shall inure to the benefit of the Partners, their
respective successors, successors-in-title, heirs and permitted assigns, and
each successor-in-interest to any Partner, whether such successor acquires such
interest by way of gift, purchase, foreclosure or by any other method, shall
hold such interest subject to all of the terms and provisions of this Agreement.
9.3 Power of Attorney. Each Limited Partner, including any
substituted Limited Partner, by the execution of this Agreement or any
counterpart of this Agreement, hereby irrevocably constitutes and appoints the
General Partner, each officer and director of the General Partner, any person or
entity that becomes a substituted General Partner of the Partnership and each of
them acting singly, in each case with full power of substitution, his or its
true and lawful agent and attorney-in-fact, with full power and authority in his
name, place and stead, to make, execute, acknowledge, swear to, deliver, file
and record such documents and instruments as may be necessary or appropriate to
carry out the provisions of this Agreement, including, but not limited to (i)
such amendments to this Agreement as are necessary to admit a substituted
Limited Partner or substituted General Partner to the Partnership pursuant to
the terms of this Agreement and (ii) such documents and instruments as are
necessary to cancel the Partnership's Certificate of Limited Partnership. This
power
15
of attorney, being coupled with an interest, is irrevocable, and shall survive
the death, dissolution or incapacity of the respective Limited Partners.
9.4 Amendments. In addition to any amendments otherwise authorized
in this Agreement, amendments generally may be made to this Agreement from time
to time by a written document duly executed by the General Partner and by the
Limited Partner; provided, however, that any amendment that would change the
allocations or distributions among the Partners or that would require additional
Capital Contributions will require the unanimous approval of the Limited
Partners.
9.5 Partition. No Partner or any successor-in-interest to any
Partner shall have the right while this Agreement remains in effect to have any
property of the Partnership partitioned, and each Partner, on behalf of itself,
its successors, representatives, heirs and assigns, hereby waives any such
right. It is the intention of the Partners that during the term of this
Agreement the rights of the Partners and their successors-in-interest, as among
themselves, shall be governed by the terms of this Agreement, and that the
rights of any Partner or successor-in-interest to assign, transfer, sell or
otherwise dispose of his interest in any property shall be subject to the
limitations and restrictions of this Agreement.
9.6 No Waiver. The failure of any Partner to insist upon strict
performance of a covenant under this Agreement or of any obligation under this
Agreement, irrespective of the length of time for which such failure continues,
shall not be a waiver of that Partner's right to demand strict compliance in the
future. No consent or waiver, express or implied, to or of any breach or default
in the performance of any obligation under this Agreement shall constitute a
consent or waiver to or of any other breach or default in the performance of the
same or any other obligation under this Agreement.
9.7 Entire Agreement. This Agreement constitutes the full and
complete agreement of the parties to this Agreement with respect to the subject
matter of this Agreement.
9.8 Further Action. The Partners shall execute and deliver all
documents, provide all information, and take or forebear from all such action as
may be necessary or appropriate to achieve the purposes of this Agreement.
9.9 Captions. The titles or captions of Sections or Sections
contained in this Agreement are inserted only as a matter of convenience and for
reference, are not a part of this Agreement, and in no way define, limit, extend
or describe the scope of this Agreement or the intent of any provision of this
Agreement.
16
9.10 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall for all purposes constitute one
agreement, binding on all the Partners, notwithstanding that all Partners have
not signed the same counterpart.
9.11 Separability. In case any of the provisions contained in this
Agreement or any application of any of those provisions shall be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this Agreement and other
applications of those provisions shall not in any way be affected or impaired
thereby.
9.12 Proxy. Whenever the vote of the Limited Partners is referred to
in this Agreement, the General Partner may vote on behalf of any Limited Partner
if such Limited Partner has by written proxy authorized the General Partner to
do so.
9.13 Signatures. The signature of the General Partner shall be
sufficient to bind the Partnership to any agreement or any document.
9.14 Construction. None of the provisions of this Agreement shall be
for the benefit of, or enforceable by, any creditors of the Partnership or other
third parties. No provision of this Agreement may be waived except by a writing
specifically waiving such provision and executed by the party chargeable with
such waiver.
9.15 Applicable Law. This Agreement, and the application or
interpretation thereof, shall be governed exclusively by its terms and by the
laws of the State of New York, excluding the conflicts of law provisions
thereof.
17
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
Beazer Homes Texas Holdings, Inc.
By: /s/ David S. Weiss
Name: David S. Weiss
Title: Vice President
Address for Notices:
5775 Peachtree Dunwoody Road
Suite C-550
Atlanta, GA 30342
Beazer Homes Holdings Corp.
By: /s/ Ian J. McCarthy
Name: Ian J. McCarthy
Title: President
Address for Notices:
5775 Peachtree Dunwoody Road
Suite C-550
Atlanta, GA 30342
EXHIBIT A
CAPITAL CONTRIBUTIONS
General Partner Capital Contribution Percentage Interest
- --------------- -------------------- -------------------
Beazer Homes Texas $1 1%
Holdings, Inc.
Limited Partner Capital Contribution Percentage Interest
- --------------- -------------------- -------------------
Beazer Homes Holding Corp. $99 99%
19
Exhibit 4.11
================================================================================
FIRST SUPPLEMENTAL INDENTURE
Dated as of June 13, 1995
among
BEAZER HOMES USA, INC.,
as Issuer,
BEAZER HOMES HOLDINGS INC.,
BEAZER HOMES, INC.,
SQUIRES HOMES, INC.,
PHILLIPS BUILDERS, INC.,
BEAZER/SQUIRES REALTY, INC.,
BEAZER HOMES SALES ARIZONA INC.,
BEAZER HOMES NEVADA INC.,
BEAZER HOMES GEORGIA, INC.,
BEAZER HOMES CALIFORNIA INC.,
BEAZER HOMES ARIZONA INC.,
BEAZER-COHN REALTY CORP.,
BDWI-SUNRIDGE, INC.,
BEAZER HOMES FLORIDA, INC.,
SUNRIDGE COUNTRY CLASSICS, L.P.,
PANITZ HOMES REALTY, INC., and
BEAZER HOMES TEXAS, INC.,
as Guarantors, and
BANK OF AMERICA ILLINOIS,
as Trustee
to
INDENTURE
Dated as of March 2, 1994
Relating to
$115,000,000 Aggregate Principal Amount of
9% Senior Notes due 2004
================================================================================
FIRST SUPPLEMENTAL INDENTURE
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of June 13, 1995 (this
"Supplement"), by and among BEAZER HOMES USA, INC., a Delaware corporation, (the
"Company"), BEAZER HOMES HOLDINGS INC., a Delaware corporation, BEAZER HOMES,
INC., a Delaware corporation, SQUIRES HOMES, INC., a Delaware corporation,
PHILLIPS BUILDERS, INC., a Tennessee corporation, BEAZER/SQUIRES REALTY, INC., a
North Carolina corporation, BEAZER HOMES SALES ARIZONA INC., a Delaware
corporation, BEAZER HOMES NEVADA INC., a Nevada corporation, BEAZER HOMES
GEORGIA, INC., a Georgia corporation, BEAZER HOMES CALIFORNIA INC., a Delaware
corporation, BEAZER HOMES ARIZONA INC., a Delaware corporation, BEAZER-COHN
REALTY CORP., a Georgia corporation, BDWI-SUNRIDGE, INC., a Delaware
corporation, BEAZER HOMES FLORIDA, INC., a Delaware corporation, and SUNRIDGE
COUNTRY CLASSICS, L.P., a California limited partnership (collectively, the
"Existing Guarantors"), PANITZ HOMES REALTY, INC., a Florida corporation, and
BEAZER HOMES TEXAS, INC., a Texas corporation (together, the "Additional
Guarantors"), and BANK OF AMERICA ILLINOIS, as trustee (the "Trustee").
Capitalized terms used but not defined herein shall have the meanings
respectively ascribed thereto in the Indenture, dated as of March 2, 1994, among
the Company, as issuer, the Existing Guarantors, as guarantors of the Company's
obligations thereunder, and the Trustee (the "Indenture"), pursuant to which
$115,000,000 aggregate principal amount of the Company's 9% Senior Notes due
2004 were issued and with respect to which this Supplement relates.
RECITALS OF THE PARTIES:
WHEREAS, the parties hereto desire to amend the Indenture to add the
Additional Guarantors as Guarantors of the Company's obligations thereunder
pursuant to Section 11.03 thereof.
NOW, THEREFORE, THIS SUPPLEMENT WITNESSETH:
1. The parties hereto agree to add, effective as of the date hereof, the
Additional Guarantors as Guarantors under the Indenture and the Additional
Guarantors agree to be subject to the provisions of the Indenture as Guarantors.
Each Additional Guarantor shall execute and deliver to the Trustee
contemporaneously herewith, for the equal and proportionate benefit of the
Holders of the Securities, its Guarantee set forth in Appendix A hereto.
2. Nothing contained herein shall be deemed or construed to relieve any
party to the Indenture of its obligations thereunder as in effect immediately
prior to the effectiveness of this Supplement or to impair any of such
obligations in any way and, except to the extent the Indenture is amended
hereby, the Indenture shall remain in full
force and effect and each of the parties hereto hereby confirms all the terms
and provisions of the Indenture as amended hereby.
3. This Supplement shall be governed by and construed in accordance with
the laws that govern the Indenture and its construction.
4. This Supplement may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
[The remainder of this page was intentionally left blank]
2
IN WITNESS WHEREOF, each the parties hereto has caused this
Supplement to be duly executed by its representative, thereunto duly authorized,
as of the day and year first written above.
(The Company)
BEAZER HOMES USA, INC.
By: /s/ Ian J. McCarthy
--------------------------------------------
Name: Ian J. McCarthy
Title: President and Chief Executive Officer
(The Existing Guarantors)
BEAZER HOMES HOLDINGS INC.
BDWI-SUNRIDGE, INC.
BEAZER HOMES, INC.,
on behalf of itself and as General Partner of
SUNRIDGE COUNTRY CLASSICS, L.P.
By: /s/ Ian J. McCarthy
-------------------------
Name: Ian J. McCarthy
Title: President
SQUIRES HOMES, INC.
PHILLIPS BUILDERS, INC.
BEAZER/SQUIRES REALTY, INC.
BEAZER HOMES SALES ARIZONA INC.
BEAZER HOMES NEVADA INC.
BEAZER HOMES GEORGIA, INC.
BEAZER HOMES CALIFORNIA INC.
BEAZER HOMES ARIZONA INC.
BEAZER-COHN REALTY CORP.
BEAZER HOMES FLORIDA, INC.
By: /s/ Ian J. McCarthy
-------------------------
Name: Ian J. McCarthy
Title: Chairman
3
(The Additional Guarantors)
PANITZ HOMES REALTY, INC.
By: /s/ Ian J. McCarthy
--------------------------
Name: Ian J. McCarthy
Title: President
BEAZER HOMES TEXAS, INC.
By: /s/ Ian J. McCarthy
--------------------------
Name: Ian J. McCarthy
Title: Chairman
(The Trustee)
BANK OF AMERICA ILLINOIS, as trustee
By: /s/ K.L. Clark
--------------------------
Name: K.L. Clark
Title: Trust Officer
4
Appendix A-1
GUARANTEE
For value received, the undersigned hereby, jointly and severally with the
other Guarantors under the Indenture, unconditionally guarantees to the Holder
of this Security the payments of principal of, premium, if any, and interest on
this Security in the amounts and at the time when due and interest on the
overdue principal, premium, if any, and interest, if any, of this Security, if
lawful, and the payment or performance of all other obligations of the Company
under the Indenture or the Securities, to the Holder of this Security and the
Trustee, all in accordance with and subject to the terms and limitations of this
Security, Article 11 of the Indenture and this Guarantee. This Guarantee will
become effective in accordance with Article 11 of the Indenture and its terms
shall be evidenced therein. The validity and enforceability of any Guarantee
shall not be affected by the fact that it is not affixed to any particular
Security.
The obligations of the undersigned to the Holders of Securities and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of this Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
Dated: June 13, 1995
PANITZ HOMES REALTY, INC.
By: /s/ Ian J. McCarthy
--------------------------
Name: Ian J. McCarthy
Title: Chairman
Appendix A-2
GUARANTEE
For value received, the undersigned hereby, jointly and severally with the
other Guarantors under the Indenture, unconditionally guarantees to the Holder
of this Security the payments of principal of, premium, if any, and interest on
this Security in the amounts and at the time when due and interest on the
overdue principal, premium, if any, and interest, if any, of this Security, if
lawful, and the payment or performance of all other obligations of the Company
under the Indenture or the Securities, to the Holder of this Security and the
Trustee, all in accordance with and subject to the terms and limitations of this
Security, Article 11 of the Indenture and this Guarantee. This Guarantee will
become effective in accordance with Article 11 of the Indenture and its terms
shall be evidenced therein. The validity and enforceability of any Guarantee
shall not be affected by the fact that it is not affixed to any particular
Security.
The obligations of the undersigned to the Holders of Securities and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of this Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
Dated: June 13, 1995
BEAZER HOMES TEXAS, INC.
By: /s/ Ian J. McCarthy
--------------------------
Name: Ian J. McCarthy
Title: Chairman
Exhibit 4.12
================================================================================
SECOND SUPPLEMENTAL INDENTURE
Dated as of February 1, 1996
among
BEAZER HOMES USA, INC.,
as Issuer,
BEAZER HOMES HOLDINGS INC.,
BEAZER HOMES, INC.,
SQUIRES HOMES, INC.,
BEAZER HOMES CORP. (formerly PHILLIPS BUILDERS, INC.),
BEAZER/SQUIRES REALTY, INC.,
BEAZER HOMES SALES ARIZONA INC.,
BEAZER HOMES NEVADA INC.,
BEAZER HOMES GEORGIA, INC.,
BEAZER HOMES CALIFORNIA INC.,
BEAZER HOMES ARIZONA INC.,
BEAZER-COHN REALTY CORP.,
BDWI-SUNRIDGE, INC.,
BEAZER HOMES FLORIDA, INC.,
SUNRIDGE COUNTRY CLASSICS, L.P.,
PANITZ HOMES REALTY, INC.,
BEAZER HOMES TEXAS, INC., and
BEAZER MORTGAGE CORPORATION,
as Guarantors, and
FIRST BANK NATIONAL ASSOCIATION,
as Trustee
to
INDENTURE
Dated as of March 2, 1994
Relating to
$115,000,000 Aggregate Principal Amount of
9% Senior Notes due 2004
================================================================================
SECOND SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE, dated as of February 1, 1996 (this
"Supplement"), by and among BEAZER HOMES USA, INC., a Delaware corporation, (the
"Company"), BEAZER HOMES HOLDINGS INC., a Delaware corporation, BEAZER HOMES,
INC., a Delaware corporation, SQUIRES HOMES, INC., a Delaware corporation,
BEAZER HOMES CORP. (FORMERLY PHILLIPS BUILDERS, INC.), a Tennessee corporation,
BEAZER/SQUIRES REALTY, INC., a North Carolina corporation, BEAZER HOMES SALES
ARIZONA INC., a Delaware corporation, BEAZER HOMES NEVADA INC., a Nevada
corporation, BEAZER HOMES GEORGIA, INC., a Georgia corporation, BEAZER HOMES
CALIFORNIA INC., a Delaware corporation, BEAZER HOMES ARIZONA INC., a Delaware
corporation, BEAZER-COHN REALTY CORP., a Georgia corporation, BDWI-SUNRIDGE,
INC., a Delaware corporation, BEAZER HOMES FLORIDA, INC., a Delaware
corporation, SUNRIDGE COUNTRY CLASSICS, L.P., a California limited partnership,
PANITZ HOMES REALTY, INC., a Florida corporation, and BEAZER HOMES TEXAS, INC.,
a Texas corporation (collectively, the "Existing Guarantors"), BEAZER MORTGAGE
CORPORATION, a Delaware corporation (the "Additional Guarantor"), and FIRST BANK
NATIONAL ASSOCIATION, as trustee (the "Trustee"). Capitalized terms used but not
defined herein shall have the meanings respectively ascribed thereto in the
Indenture, dated as of March 2, 1994, as amended by the First Supplemental
Indenture, dated as of June 13, 1995, among the Company, as issuer, the Existing
Guarantors, as guarantors of the Company's obligations thereunder, and the
Trustee (the "Indenture"), pursuant to which $115,000,000 aggregate principal
amount of the Company's 9% Senior Notes due 2004 were issued and with respect to
which this Supplement relates.
RECITALS OF THE PARTIES:
WHEREAS, the parties hereto desire to amend the Indenture to add the
Additional Guarantor as Guarantor of the Company's obligations thereunder
pursuant to Section 11.03 thereof.
NOW, THEREFORE, THIS SUPPLEMENT WITNESSETH:
1. The parties hereto agree to add, effective as of the date hereof,
the Additional Guarantor as Guarantor under the Indenture and the Additional
Guarantor agrees to be subject to the provisions of the Indenture as Guarantor.
The Additional Guarantor shall execute and deliver to the Trustee
contemporaneously herewith, for the equal and proportionate benefit of the
Holders of the Securities, its Guarantee set forth in Appendix A hereto.
2. Nothing contained herein shall be deemed or construed to relieve
any party to the Indenture of its obligations thereunder as in effect
immediately prior to the
effectiveness of this Supplement or to impair any of such obligations in any way
and, except to the extent the Indenture is amended hereby, the Indenture shall
remain in full force and effect and each of the parties hereto hereby confirms
all the terms and provisions of the Indenture as amended hereby.
3. This Supplement shall be governed by and construed in accordance
with the laws that govern the Indenture and its construction.
4. This Supplement may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute but one and the same instrument.
[The remainder of this page was intentionally left blank]
2
IN WITNESS WHEREOF, each the parties hereto has caused this
Supplement to be duly executed by its representative, thereunto duly authorized,
as of the day and year first written above.
(The Company)
BEAZER HOMES USA, INC.
By: /s/ Ian J. McCarthy
--------------------------
Name: Ian J. McCarthy
Title: President and Chief Executive Officer
(The Existing Guarantors)
BEAZER HOMES HOLDINGS INC.
BDWI-SUNRIDGE, INC.
BEAZER HOMES, INC.,
on behalf of itself and as General Partner of
SUNRIDGE COUNTRY CLASSICS, L.P.
By: /s/ Ian J. McCarthy
--------------------------
Name: Ian J. McCarthy
Title: President
SQUIRES HOMES, INC.
BEAZER HOMES CORP. (formerly
PHILLIPS BUILDERS, INC.)
BEAZER/SQUIRES REALTY, INC.
BEAZER HOMES SALES ARIZONA INC.
BEAZER HOMES NEVADA INC.
BEAZER HOMES GEORGIA, INC.
BEAZER HOMES CALIFORNIA INC.
BEAZER HOMES ARIZONA INC.
BEAZER-COHN REALTY CORP.
BEAZER HOMES FLORIDA, INC.
(cont.)
3
PANITZ HOMES REALTY, INC.
BEAZER HOMES TEXAS, INC.
By: /s/ Ian J. McCarthy
--------------------------
Name: Ian J. McCarthy
Title: Chairman
(The Additional Guarantor)
BEAZER MORTGAGE CORPORATION
By: /s/ Ian J. McCarthy
--------------------------
Name: Ian J. McCarthy
Title: Chairman and President
(The Trustee)
FIRST BANK NATIONAL ASSOCIATION, as
trustee
By: /s/ Maria Fowler
--------------------------
Name: Maria Fowler
Title: Trust Officer
4
Appendix A
GUARANTEE
For value received, the undersigned hereby, jointly and severally with the
other Guarantors under the Indenture, unconditionally guarantees to the Holder
of this Security the payments of principal of, premium, if any, and interest on
this Security in the amounts and at the time when due and interest on the
overdue principal, premium, if any, and interest, if any, of this Security, if
lawful, and the payment or performance of all other obligations of the Company
under the Indenture or the Securities, to the Holder of this Security and the
Trustee, all in accordance with and subject to the terms and limitations of this
Security, Article 11 of the Indenture and this Guarantee. This Guarantee will
become effective in accordance with Article 11 of the Indenture and its terms
shall be evidenced therein. The validity and enforceability of any Guarantee
shall not be affected by the fact that it is not affixed to any particular
Security.
The obligations of the undersigned to the Holders of Securities and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of this Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
Dated: February 1, 1996
BEAZER MORTGAGE CORPORATION
By: /s/ Ian J. McCarthy
--------------------------
Name: Ian J. McCarthy
Title: Chairman
Exhibit 4.13
================================================================================
THIRD SUPPLEMENTAL INDENTURE
Dated as of March 18, 1998
among
BEAZER HOMES USA, INC.,
as Issuer,
BEAZER HOMES CORP. (formerly PHILLIPS BUILDERS, INC.),
BEAZER/SQUIRES REALTY, INC.,
BEAZER HOMES SALES ARIZONA INC.,
BEAZER REALTY CORP. (formerly BEAZER-COHN REALTY CORP.),
PANITZ HOMES REALTY, INC.,
BEAZER MORTGAGE CORPORATION,
BEAZER HOMES HOLDINGS CORP.,
BEAZER HOMES TEXAS HOLDINGS, INC., and
BEAZER HOMES TEXAS, L.P.
as Guarantors, and
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
to
INDENTURE
Dated as of March 2, 1994
Relating to
$115,000,000 Aggregate Principal Amount of
9% Senior Notes due 2004
================================================================================
THIRD SUPPLEMENTAL INDENTURE
THIS THIRD SUPPLEMENTAL INDENTURE, dated as of March 18, 1998 (this
"Supplement"), by and among (i) Beazer Homes USA, Inc., a Delaware corporation
(the "Company"), (ii) Beazer Mortgage Corporation, a Delaware corporation,
Beazer Homes Corp. (f/k/a Phillips Builders, Inc.), a Tennessee corporation,
Beazer Homes Sales Arizona Inc., a Delaware corporation, Beazer Realty Corp., a
Georgia corporation, Beazer/Squires Realty, Inc., a North Carolina corporation,
and Panitz Homes Realty, Inc., a Florida corporation (collectively, the
"Existing Guarantors"), (iii) Beazer Homes Holdings Corp., a Delaware
corporation, Beazer Homes Texas Holdings, Inc., a Delaware corporation, and
Beazer Homes Texas, L.P., a Delaware limited partnership (collectively, the
"Additional Guarantors") and (iv) First Trust National Association, as trustee
(the "Trustee"). Capitalized terms used but not defined herein shall have the
meanings respectively ascribed thereto in the Indenture, dated as of March 2,
1994, as amended by the First Supplemental Indenture, dated as of June 13, 1995,
as further amended by the Second Supplemental Indenture, dated as of February 1,
1996, among the Company, as issuer, the guarantors of the Company's obligations
thereunder, and the Trustee (the "Indenture"), pursuant to which $115,000,000
aggregate principal amount of the Company's 9% Senior Notes due 2004 were issued
and with respect to which this Supplement relates.
RECITALS OF THE PARTIES:
WHEREAS, the parties hereto desire to amend the Indenture to add the
Additional Guarantors as Guarantors of the Company's obligations thereunder
pursuant to Section 11.03 thereof; and
WHEREAS, the parties hereto desire to amend the Indenture to
acknowledge the release of the Liquidating Guarantors (as defined below) as
Guarantors of the Company's obligations thereunder pursuant to Section 11.04
thereof.
NOW, THEREFORE, THIS SUPPLEMENT WITNESSETH:
1. The parties hereto agree to add, effective as of the date hereof,
the Additional Guarantors as Guarantors under the Indenture and the Additional
Guarantors agree to be subject to the provisions of the Indenture as Guarantors.
Each of the Additional Guarantors shall execute and deliver to the Trustee
contemporaneously herewith, for the equal and proportionate benefit of the
Holders of the Securities, its respective Guarantee set forth in Appendix A
hereto.
2. The parties hereto acknowledge that (a) each of Beazer Homes
Arizona Inc., a Delaware corporation, Beazer Homes California Inc., a Delaware
corporation, Beazer Homes Nevada Inc., a Nevada corporation, Beazer Homes, Inc.,
a Delaware corporation, Beazer Homes Georgia, Inc., a Georgia corporation,
Squires Homes, Inc., a Delaware corporation, Beazer Homes Florida, Inc., a
Delaware corporation, Beazer Homes Texas, Inc., a Texas corporation, BZH Inc.
(f/k/a Beazer Homes Holdings, Inc.), a Delaware corporation, BDWI-Sunridge,
Inc., a Delaware corporation, and Sunridge Country Classics, L.P., a California
limited partnership (collectively, the "Liquidating Guarantors"), were
liquidated, dissolved or merged into another guarantor of the Company's
obligations under the Indenture, as applicable, (b) the Liquidating Guarantors'
respective obligations under the
Indenture were assumed by (i) Beazer Homes Corp., with respect to Beazer Homes
Georgia, Inc. and Squires Homes, Inc., (ii) Beazer Homes Holdings Corp., with
respect to Beazer Homes Arizona, Inc., Beazer Homes California, Inc., Beazer
Homes Nevada, Inc., Beazer Homes, Inc. and BZH, Inc. and (iii) Beazer Homes
Texas, L.P., with respect to Beazer Homes Texas, Inc. and (c) in accordance with
Section 11.04 of the Indenture the Liquidating Guarantors have been
automatically and unconditionally released and discharged from all of their
respective obligations under the Indenture.
3. Except as set forth in Section 2 hereof, nothing contained herein
shall be deemed or construed to relieve any party to the Indenture of its
obligations thereunder as in effect immediately prior to the effectiveness of
this Supplement or to impair any of such obligations in any way and, except to
the extent the Indenture is amended hereby, the Indenture shall remain in full
force and effect and each of the parties hereto hereby confirms all the terms
and provisions of the Indenture as amended hereby.
4. This Supplement shall be governed by and construed in accordance
with the laws that govern the Indenture and its construction.
5. This Supplement may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute but one and the same instrument.
[The remainder of this page was intentionally left blank]
IN WITNESS WHEREOF, each the parties hereto has caused this
Supplement to be duly executed by its representative, thereunto duly authorized,
as of the day and year first written above.
The Company: Beazer Homes USA, Inc.
By: /s/ David S. Weiss
Name: David S. Weiss
Title: Executive Vice President, Chief
Financial Officer
The Existing Guarantors: Beazer Mortgage Corporation
Beazer Homes Corp.
Beazer Homes Sales Arizona Inc.
Beazer Realty Corp.
Beazer/Squires Realty, Inc.
Panitz Homes Realty, Inc.
By: /s/ David S. Weiss
Name: David S. Weiss
Title: Vice President
The Additional Guarantors: Beazer Homes Holdings Corp.
Beazer Homes Texas Holdings, Inc.
By: /s/ David S. Weiss
Name: David S. Weiss
Title: Vice President
Beazer Homes Texas, L.P.
By: Beazer Homes Texas Holdings, Inc.
its general partner
By: /s/ David S. Weiss
Name: David S. Weiss
Title: Vice President
The Trustee: First Trust National Association, as trustee
By: /s/ Michael T. Goodwin
Name: Michael T. Goodwin
Title: Assistant Vice President
Appendix A-1
GUARANTEE
For value received, the undersigned hereby, jointly and severally
with the other Guarantors under the Indenture, unconditionally guarantees to the
Holder of this Security the payments of principal of, premium, if any, and
interest on this Security in the amounts and at the time when due and interest
on the overdue principal, premium, if any, and interest, if any, of this
Security, if lawful, and the payment or performance of all other obligations of
the Company under the Indenture or the Securities, to the Holder of this
Security and the Trustee, all in accordance with and subject to the terms and
limitations of this Security, Article 11 of the Indenture and this Guarantee.
This Guarantee will become effective in accordance with Article 11 of the
Indenture and its terms shall be evidenced therein. The validity and
enforceability of any Guarantee shall not be affected by the fact that it is not
affixed to any particular Security.
The obligations of the undersigned to the Holders of Securities and
to the Trustee pursuant to this Guarantee and the Indenture are expressly set
forth in Article 11 of the Indenture and reference is hereby made to the
Indenture for the precise terms of this Guarantee and all of the other
provisions of the Indenture to which this Guarantee relates.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
Dated: March 18, 1998 Beazer Homes Holdings Corp.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
Appendix A-2
GUARANTEE
For value received, the undersigned hereby, jointly and severally with the
other Guarantors under the Indenture, unconditionally guarantees to the Holder
of this Security the payments of principal of, premium, if any, and interest on
this Security in the amounts and at the time when due and interest on the
overdue principal, premium, if any, and interest, if any, of this Security, if
lawful, and the payment or performance of all other obligations of the Company
under the Indenture or the Securities, to the Holder of this Security and the
Trustee, all in accordance with and subject to the terms and limitations of this
Security, Article 11 of the Indenture and this Guarantee. This Guarantee will
become effective in accordance with Article 11 of the Indenture and its terms
shall be evidenced therein. The validity and enforceability of any Guarantee
shall not be affected by the fact that it is not affixed to any particular
Security.
The obligations of the undersigned to the Holders of Securities and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of this Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
Dated: March 18, 1998 Beazer Homes Texas Holdings, Inc.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
Appendix A-3
GUARANTEE
For value received, the undersigned hereby, jointly and severally with the
other Guarantors under the Indenture, unconditionally guarantees to the Holder
of this Security the payments of principal of, premium, if any, and interest on
this Security in the amounts and at the time when due and interest on the
overdue principal, premium, if any, and interest, if any, of this Security, if
lawful, and the payment or performance of all other obligations of the Company
under the Indenture or the Securities, to the Holder of this Security and the
Trustee, all in accordance with and subject to the terms and limitations of this
Security, Article 11 of the Indenture and this Guarantee. This Guarantee will
become effective in accordance with Article 11 of the Indenture and its terms
shall be evidenced therein. The validity and enforceability of any Guarantee
shall not be affected by the fact that it is not affixed to any particular
Security.
The obligations of the undersigned to the Holders of Securities and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of this Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
Dated: March 18, 1998 Beazer Homes Texas, L.P.
By: Beazer Homes Texas Holdings, Inc., its
general partner
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
GUARANTEE
For value received, the undersigned hereby, jointly and severally with the
other Guarantors under the Indenture, unconditionally guarantees to the Holder
of this Security the payments of principal of, premium, if any, and interest on
this Security in the amounts and at the time when due and interest on the
overdue principal, premium, if any, and interest, if any, of this Security, if
lawful, and the payment or performance of all other obligations of the Company
under the Indenture or the Securities, to the Holder of this Security and the
Trustee, all in accordance with and subject to the terms and limitations of this
Security, Article 11 of the Indenture and this Guarantee. This Guarantee will
become effective in accordance with Article 11 of the Indenture and its terms
shall be evidenced therein. The validity and enforceability of any Guarantee
shall not be affected by the fact that it is not affixed to any particular
Security.
The obligations of the undersigned to the Holders of Securities and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of this Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
Dated: March 18, 1998 Beazer Homes Holdings Corp.
By: /s/ David S. Weiss
Name: David S. Weiss
Title: Vice President
GUARANTEE
For value received, the undersigned hereby, jointly and severally with the
other Guarantors under the Indenture, unconditionally guarantees to the Holder
of this Security the payments of principal of, premium, if any, and interest on
this Security in the amounts and at the time when due and interest on the
overdue principal, premium, if any, and interest, if any, of this Security, if
lawful, and the payment or performance of all other obligations of the Company
under the Indenture or the Securities, to the Holder of this Security and the
Trustee, all in accordance with and subject to the terms and limitations of this
Security, Article 11 of the Indenture and this Guarantee. This Guarantee will
become effective in accordance with Article 11 of the Indenture and its terms
shall be evidenced therein. The validity and enforceability of any Guarantee
shall not be affected by the fact that it is not affixed to any particular
Security.
The obligations of the undersigned to the Holders of Securities and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of this Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
Dated: March 18, 1998 Beazer Homes Texas Holdings, Inc.
By: /s/ David S. Weiss
Name: David S. Weiss
Title: Vice President
GUARANTEE
For value received, the undersigned hereby, jointly and severally with the
other Guarantors under the Indenture, unconditionally guarantees to the Holder
of this Security the payments of principal of, premium, if any, and interest on
this Security in the amounts and at the time when due and interest on the
overdue principal, premium, if any, and interest, if any, of this Security, if
lawful, and the payment or performance of all other obligations of the Company
under the Indenture or the Securities, to the Holder of this Security and the
Trustee, all in accordance with and subject to the terms and limitations of this
Security, Article 11 of the Indenture and this Guarantee. This Guarantee will
become effective in accordance with Article 11 of the Indenture and its terms
shall be evidenced therein. The validity and enforceability of any Guarantee
shall not be affected by the fact that it is not affixed to any particular
Security.
The obligations of the undersigned to the Holders of Securities and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of this Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
Dated: March 18, 1998 Beazer Homes Texas, L.P.
By: Beazer Homes Texas Holdings, Inc., its
general partner
By: /s/ David S. Weiss
Name: David S. Weiss
Title: Vice President
Exhibit 4.14
INDENTURE
Dated as of March 25, 1998,
among
BEAZER HOMES USA, INC.
as Issuer
BEAZER HOMES CORP.
BEAZER/SQUIRES REALTY, INC.
BEAZER HOMES SALES ARIZONA INC.
BEAZER REALTY CORP.
PANITZ HOMES REALTY, INC.
BEAZER MORTGAGE CORPORATION
BEAZER HOMES HOLDINGS CORP.
BEAZER HOMES TEXAS HOLDINGS, INC. and
BEAZER HOMES TEXAS, L.P.
as Subsidiary Guarantors
and
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
----------------
8 7/8% Senior Notes due 2008
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- -------
310(a)(1) ..................................................... 7.10
(a)(2) ..................................................... 7.10
(a)(3) ..................................................... N.A.
(a)(4) ..................................................... N.A.
(b) ........................................................ 7.08; 7.10
(c) ........................................................ N.A.
311(a) ........................................................ 7.11
(b) ........................................................ 7.11
(c) ........................................................ N.A.
312(a) ........................................................ 8.01; 8.02
(b) ........................................................ 8.02; 12.03
(c) ........................................................ 12.03
313(a) ........................................................ 7.06
(b)(1) ..................................................... 7.06
(b)(2) ..................................................... 7.06
(c) ........................................................ 7.06
(d) ........................................................ 7.06
314(a) ........................................................ 4.03
(b) ........................................................ N.A.
(c)(1) ..................................................... 12.04; 12.05
(c)(2) ..................................................... 12.04; 12.05
(c)(3) ..................................................... 12.05
(d) ........................................................ N.A.
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture
(e) ...................................................... 12.05
(f) ...................................................... N.A.
315(a) ...................................................... 7.01
(b) ...................................................... 7.05
(c) ...................................................... 7.01
(d) ...................................................... 7.01
(e) ...................................................... 6.11
316(a)(last sentence) ....................................... 2.09
(a)(1)(A) ................................................ 6.05
(a)(1)(B) ................................................ 6.04
(a)(2) ................................................... Not applicable
(b) ...................................................... 6.07
317(a)(1) ................................................... 6.08
(a)(2) ................................................... 6.09
(b) ...................................................... 2.04; 2.05
318(a) ...................................................... 12.01
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture
Page
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Rules of Construction ..................................... 1
Section 1.02. Definitions ............................................... 2
Section 1.03. Incorporation by Reference of TIA 24
ARTICLE 2
THE SECURITIES
Section 2.01. Dating; Incorporation of Form in Indenture ................ 24
Section 2.02. Execution and Authentication .............................. 25
Section 2.03. Registrar and Paying Agent ................................ 26
Section 2.04. Paying Agent to Hold Money in Trust
Section 2.05. Noteholder Lists .......................................... 27
Section 2.06. Transfer and Exchange ..................................... 28
Section 2.07. Replacement Notes ......................................... 28
Section 2.08. Outstanding Notes ......................................... 29
Section 2.09. Temporary Notes ........................................... 29
Section 2.10. Cancellation. ............................................. 29
Section 2.11. Defaulted Interest ........................................ 30
Section 2.12. Deposit of Moneys ......................................... 30
-i-
Page
----
Section 2.13. CUSIP Number .............................................. 31
Section 2.14. Book-Entry Provisions or Global Notes ..................... 31
Section 2.15. Special Transfer Provisions ............................... 33
ARTICLE 3
OPTIONAL REDEMPTION
Section 3.01. Notices to Trustee ........................................ 36
Section 3.02. Selection of Notes To Be Redeemed ......................... 36
Section 3.03. Notices to Holders ........................................ 36
Section 3.04. Effect of Notice of Redemption ............................ 37
Section 3.05. Deposit of Redemption Price ............................... 37
Section 3.06. Notes Redeemed in Part .................................... 38
Section 3.07. Optional Redemption ....................................... 38
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes ........................................... 39
Section 4.02. Maintenance of Office or Agency ............................ 39
Section 4.03. SEC Reports; Financial Statements .......................... 40
Section 4.04. Money for Security Payments To Be Held in Trust ............ 40
Section 4.05. Compliance Certificate ..................................... 41
Section 4.06. Corporate Existence, etc ................................... 42
Section 4.07. Payment of Taxes and Other Claims .......................... 42
Section 4.08. Insurance .................................................. 43
Section 4.09. Stay, Extension and Usury Laws ............................. 43
Section 4.10. Maintenance of Properties .................................. 44
Section 4.11. Disposition of Proceeds of Asset Sale ...................... 44
-ii-
Page
----
Section 4.12. Limitations on Restricted Payments ........................ 48
Section 4.13. Limitations on Additional Indebtedness .................... 50
Section 4.14. Restrictions on Restricted Subsidiary Indebtedness ........ 51
Section 4.15. Limitations and Restrictions on Issuance of Capital Stock of
Restricted Subsidiaries ................................. 52
Section 4.16. Change of Control ......................................... 52
Section 4.17. Limitation an Transactions With Stockholders and Affiliates 55
Section 4.18. Limitations on Liens ...................................... 56
Section 4.19. Limitations on Restrictions on Distributions from Restricted
Subsidiaries ............................................ 56
Section 4.20. Maintenance of Consolidated Tangible Net Worth ............ 57
Section 4.21. Guarantees ................................................ 61
ARTICLE 5
SUCCESSORS
Section 5.01. Limitations on Mergers and Consolidations ................. 61
Section 5.02. Successor Corporation Substituted ......................... 62
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default .......................................... 63
Section 6.02. Acceleration ............................................... 65
Section 6.03. Other Remedies ............................................. 66
-iii-
Page
----
Section 6.04. Waiver of Past Defaults and Compliance with
Indenture Provisions ................................... 66
Section 6.05. Control by Majority ........................................ 66
Section 6.06. Limitations on Suits ....................................... 67
Section 6.07. Rights of Holders To Receive Payment ....................... 67
Section 6.08. Collection Suit by Trustee ................................. 68
Section 6.09. Trustee May File Proofs of Claim ........................... 68
Section 6.10. Priorities ................................................. 68
Section 6.11. Undertaking for Costs ...................................... 69
Section 6.12. Restoration of Rights and Remedies ......................... 69
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee .......................................... 70
Section 7.02. Rights of Trustee. ......................................... 71
Section 7.03. Individual Rights of Trustee. .............................. 72
Section 7.04. Trustee's Disclaimer. ...................................... 72
Section 7.05. Notice of Defaults. ........................................ 73
Section 7.06. Reports by Trustee to Holders. ............................. 73
Section 7.07. Compensation and Indemnity. ................................ 73
Section 7.08. Replacement of Trustee. .................................... 74
Section 7.09. Successor Trustee by Merger, et. ........................... 75
Section 7.10. Eligibility; Disqualification. ............................. 76
Section 7.11. Preferential Collection of Claims Against Company .......... 76
ARTICLE 8
HOLDERS' LISTS
Section 8.01. Company To Furnish Trustee Names and Addresses of Holders .. 76
-iv-
Page
----
Section 8.02. Preservation of Information. 77
ARTICLE 9
DISCHARGE OF INDENTURE
Section 9.01. Termination of Company and Guarantor Obligations. .......... 77
Section 9.02. Application of Trust Money. ................................ 81
Section 9.03. Repayment to Company. ...................................... 81
Section 9.04. Reinstatement. ............................................. 81
ARTICLE 10
AMENDMENTS
Section 10.01. Without Consent of Holders. ............................... 82
Section 10.02. With Consent of Holders. .................................. 83
Section 10.03. Compliance with TIA. ...................................... 84
Section 10.04. Revocation and Effect of Consents. ........................ 84
Section 10.05. Notation on or Exchange of Note. .......................... 85
Section 10.06. Trustee To Sign Amendments, etc. .......................... 85
ARTICLE 11
GUARANTEE OF SECURITIES
Section 11.01. Guarantees of Notes. ...................................... 86
Section 11.02. Execution and Delivery of Guarantee. ...................... 88
Section 11.03. Additional Guarantors. 89
Section 11.04. Release of a Guarantor. ................................... 89
Section 11.05. Waiver of Subrogation. .................................... 90
-v-
Page
----
ARTICLE 12
MISCELLANEOUS
Section 12.01. TIA Controls. ............................................. 91
Section 12.02. Notices. .................................................. 91
Section 12.03. Communications by Holders with Other Holders. ............. 93
Section 12.04. Certificate and Opinion as to Conditions Precedent. 93
Section 12.05. Statements Required in Certificate or Opinion. ............ 93
Section 12.06. Rules by Trustee and Agents. .............................. 94
Section 12.07. No Recourse Against Others. ............................... 94
Section 12.08. Governing Law. ............................................ 95
Section 12.09. No Adverse Interpretation of Other Agreements. ............ 95
Section 12.10. Successors. ............................................... 95
Section 12.11. Severability. ............................................. 95
Section 12.12. Counterpart Originals. .................................... 96
Section 12.13. Trustee as Paying Agent and Registrar. .................... 96
Section 12.14. Table of Contents, Headings, etc. 96
Section 12.15. Benefits of Indenture. .................................... 96
Section 12.16. Acceptance of Trust. ...................................... 96
Section 12.17. Treasury Notes. ........................................... 96
EXHIBIT A - Form of 8 7/8% Senior Note due 2008
Form of Subsidiary Guarantee
EXHIBIT B - Form of Legend for Global Notes
EXHIBIT C1 - Form of Assignment for 144A Note
-vi-
Page
----
EXHIBIT C2 - Form of Assignment for Regulation S Note
EXHIBIT D - Form of Certificate to be Delivered
in Connection with Transfers to Non-
QIB Accredited Investors
EXHIBIT E Form of Certificate to be Delivered
in Connection with Transfers Pursuant
to Regulation S
-vii-
-1-
INDENTURE, dated as of March 25, 1998, among BEAZER HOMES USA, INC.,
a Delaware corporation, BEAZER HOMES CORP., a Tennessee corporation,
BEAZER/SQUIRES REALTY, INC., a North Carolina corporation, BEAZER HOMES SALES
ARIZONA INC., a Delaware corporation, BEAZER REALTY CORP., a Georgia
corporation, PANITZ HOMES REALTY, INC., a Florida corporation, BEAZER MORTGAGE
CORPORATION, a Delaware corporation, BEAZER HOMES HOLDINGS CORP., a Delaware
corporation, BEAZER HOMES TEXAS HOLDINGS, INC., a Delaware corporation, and
BEAZER HOMES TEXAS, L.P., a Delaware limited partnership, and FIRST TRUST
NATIONAL ASSOCIATION, a national banking association organized under the laws of
the United States of America, as trustee.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Company's
8 7/8% Senior Notes due 2008.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
-2-
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision hereof;
(d) "or" is not exclusive; and
(e) provisions apply to successive events and transactions.
Section 1.02. Definitions.
Capitalized terms used herein will have the following respective
meanings when used herein:
"Acquisition Indebtedness" means Indebtedness of any Person and its
Subsidiaries existing at the time such Person became a Subsidiary of the Company
(or such Person is merged with or into the Company or one of the Company's
Subsidiaries) or assumed in connection with the acquisition of assets from any
such Person, including, without limitation, Indebtedness Incurred in connection
with, or in contemplation of (a) such Person being merged with or into or
becoming a Subsidiary of the Company or one of its Subsidiaries (but excluding
Indebtedness of such Person which is extinguished, retired or repaid in
connection with such Person being merged with or into or becoming a Subsidiary
of the Company or one of its Subsidiaries) or (b) such acquisition of assets
from any such Person.
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, such Person. For purposes of this Indenture, each executive
officer and director of the Company and each Subsidiary of the Company will be
an Affiliate of the Company. In addition, for
-3-
purposes of this Indenture, control of a Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise. Notwithstanding
the foregoing, the term "Affiliate" will not include, with respect to the
Company or any Restricted Subsidiary which is a Wholly Owned Subsidiary of the
Company, any Restricted Subsidiary which is a Wholly Owned Subsidiary of the
Company.
"Affiliate Transaction" has the meaning set forth in Section 4.17(a)
hereof.
"Agent" means any Registrar or Paying Agent.
"Asset Sale" for any Person means the sale, lease, conveyance or
other disposition (including, without limitation, by merger, consolidation or
sale and leaseback transaction, and whether by operation of law or otherwise) of
any of that Person's assets (including, without limitation, the sale or other
disposition of Capital Stock of any Subsidiary of such Person, whether by such
Person or such Subsidiary), whether owned on the date hereof or subsequently
acquired in one transaction or a series of related transactions, in which such
Person and/or its Subsidiaries receive cash and/or other consideration
(including, without limitation, the unconditional assumption of Indebtedness of
such Person and/or its Subsidiaries) having an aggregate Fair Market Value of
$500,000 or more as to each such transaction or series of related transactions;
provided, however, that (i) a transaction or series of related transactions that
results in a Change of Control shall not constitute an Asset Sale, (ii) sales of
homes in the ordinary course of business will not constitute Asset Sales,(iii)
sales, leases, conveyances or other dispositions, including, without limitation,
exchanges or swaps of real estate in the
-4-
ordinary course of business, for development of the Company's or any of its
Subsidiaries' projects, will not constitute Asset Sales, (iv) sales, leases,
sale-leasebacks or other dispositions of amenities, model homes and other
improvements at the Company's or its Subsidiaries' projects in the ordinary
course of business will not constitute Asset Sales, and (v) transactions between
the Company and any of its Restricted Subsidiaries which are Wholly Owned
Subsidiaries, or among such Restricted Subsidiaries which are Wholly Owned
Subsidiaries of the Company, will not constitute Asset Sales.
"Asset Sale Offer Date" has the meaning set forth in Section 4.11(c)
hereof.
"Asset Sale Offer Price" has the meaning set forth in Section
4.11(c) hereof.
"Bank Credit Facility" means the Credit Facility among the Company,
as borrower thereunder, the Subsidiary Guarantors and the financial institutions
named therein, as such facility has been and may be amended, restated,
supplemented or otherwise modified from time to time, and includes any facility
extending the maturity of, refinancing or restructuring (including, without
limitation, the inclusion of additional borrowers thereunder that are
Unrestricted Subsidiaries) all or any portion of, the Indebtedness under such
facility or any successor facilities and includes any facility with one or more
lenders refinancing or replacing all or any portion of the Indebtedness under
such facility or any successor facilities.
"Bankruptcy Law" means title 11 of the United States Code, as
amended, or any similar federal or state law for the relief of debtors.
-5-
"Board of Directors" means the board of directors of a Person or any
authorized committee of the board of directors of such Person.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" of any Person means any and all shares, rights to
purchase, warrants or options (whether or not currently exercisable),
participations, or other equivalents of or interests in (however designated and
whether voting or non-voting) the equity (which includes, but is not limited to,
common stock, preferred stock and partnership and joint venture interests) of
such Person (excluding any debt securities that are convertible into, or
exchangeable for, such equity).
"Capitalized Lease Obligations" of any Person means the obligations
of such Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligation will be the capitalized amount thereof determined in
accordance with GAAP.
"Cedel" means Cedel Bank, societe anonyme.
"Change of Control" means any of the following: (i) the sale, lease,
conveyance or other disposition of all or substantially all of the Company's
assets as an entirety or substantially as an entirety to any Person or "group"
(within the meaning of Section 13(d)(3) of the Exchange Act) in one or a series
of transactions; provided that a transaction where the holders of all classes of
Common Equity of the Company immediately prior to such transaction own, directly
or indirectly, 50 percent or more of the aggregate voting power of all classes
of Common Equity of such Person or group immediately after
-6-
such transaction will not be a Change of Control; (ii) the acquisition by the
Company and/or any of its Subsidiaries of 50 percent or more of the aggregate
voting power of all classes of Common Equity of the Company in one transaction
or a series of related transactions; (iii) the liquidation or dissolution of the
Company; provided that a liquidation or dissolution of the Company which is part
of a transaction or series of related transactions that does not constitute a
Change of Control under the "provided" clause of clause (i) above will not
constitute a Change of Control under this clause (iii); (iv) any transaction or
a series of related transactions (as a result of a tender offer, merger,
consolidation or otherwise) that results in, or that is in connection with, (a)
any Person, including, a "group" (within the meaning of Section 13(d)(3) of the
Exchange Act) acquiring "beneficial ownership" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 50 percent or more of the
aggregate voting power of all classes of Common Equity of the Company or of any
Person that possesses "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of 50 percent or more of the aggregate
voting power of all classes of Common Equity of the Company or (b) less than 50
percent (measured by the aggregate voting power of all classes) of the Common
Equity of the Company being registered under Section 12(b) or 12(g) of the
Exchange Act; or (v) a majority of the Board of Directors of the Company not
being comprised of Continuing Directors.
"Change of Control Offer" has the meaning set forth in Section
4.16(a) hereof.
"Change of Control Payment Date" has the meaning set forth in
Section 4.16(a) hereof.
-7-
"Change of Control Price" has the meaning set forth in Section
4.16(a) hereof.
"Common Equity" of any Person means all Capital Stock of such Person
that is generally entitled to (i) vote in the election of directors of such
Person, or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or others
that will control the management and policies of such Person.
"Company" means Beazer Homes USA, Inc., a Delaware corporation, and
any successor thereof.
"Consolidated Cash Flow Available for Fixed Charges" of the Company
and its Restricted Subsidiaries means for any period (a) the sum of the amounts
for such period of (i) Consolidated Net Income, plus (ii) Consolidated Income
Tax Expense (without regard to income tax expense or credits attributable to
extraordinary and nonrecurring gains or losses on Asset Sales), plus (iii)
Consolidated Interest Expense, plus (iv) all depreciation, and, without
duplication, amortization (including, without limitation, capitalized interest
amortized to cost of sales), plus (v) all other noncash items reducing
Consolidated Net Income during such period, minus (b) all other noncash items
increasing Consolidated Net Income during such period; all as determined on a
consolidated basis for the Company and its Restricted Subsidiaries in accordance
with GAAP.
"Consolidated Fixed Charge Coverage Ratio" of the Company means,
with respect to any determination date, the ratio of (i) Consolidated Cash Flow
Available for Fixed Charges of the Company for the prior four full fiscal
quarters for which financial results have been reported immediately preceding
the determination date, to
-8-
(ii) the aggregate Consolidated Interest Incurred of the Company for the prior
four full fiscal quarters for which financial results have been reported
immediately preceding the determination date; provided that (1) with respect to
any Indebtedness Incurred during, and remaining outstanding at the end of, such
four full fiscal quarter period, such Indebtedness will be assumed to have been
Incurred as of the first day of such four full fiscal quarter period, (2) with
respect to Indebtedness repaid (other than a repayment of revolving credit
obligations repaid solely out of operating cash flows) during such four full
fiscal quarter period, such Indebtedness will be assumed to have been repaid on
the first day of such four full fiscal quarter period, (3) with respect to the
Incurrence of any Acquisition Indebtedness, such Indebtedness and any proceeds
therefrom will be assumed to have been Incurred and applied as of the first day
of such four full fiscal quarter period, and the results of operations of any
Person or any Subsidiary of such Person that, in connection with or in
contemplation of such Incurrence, becomes a Subsidiary of the Company or is
merged with or into the Company or one of the Company's Subsidiaries or whose
assets are acquired, will be included, on a pro forma basis, in the calculation
of the Consolidated Fixed Charge Coverage Ratio as if such transaction had
occurred on the first day of such four full fiscal quarter period, and (4) with
respect to any other transaction pursuant to which any Person becomes a
Subsidiary of the Company or is merged with or into the Company or one of the
Company's Subsidiaries or pursuant to which any Person's assets are acquired,
such Consolidated Fixed Charge Coverage Ratio shall be calculated on a pro forma
basis as if such transaction had occurred on the first day of such four full
fiscal quarter period, but only if such transaction would require a pro forma
presentation in financial statements prepared
-9-
pursuant to Rule 11-02 of Regulation S-X under the Securities Act.
"Consolidated Income Tax Expense" of the Company for any period
means the income tax expense of the Company and its Restricted Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" of the Company for any period means
the Interest Expense of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Incurred" of the Company for any period means
the Interest Incurred of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" of the Company for any period means the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period, determined on a consolidated basis in accordance with GAAP;
provided that there will be excluded from such net income (to the extent
otherwise included therein), without duplication: (i) the net income (or loss)
of any Person (other than a Restricted Subsidiary) in which any Person
(including, without limitation, an Unrestricted Subsidiary) other than the
Company or any Restricted Subsidiary has an ownership interest, except to the
extent that any such income has actually been received by the Company or any
Restricted Subsidiary in the form of cash dividends or similar cash
distributions during such period, or in any other form but converted to cash
during such period, (ii) except to the extent includable in
-10-
Consolidated Net Income pursuant to the foregoing clause (i), the net income (or
loss) of any Person that accrued prior to the date that (a) such Person becomes
a Restricted Subsidiary or is merged with or into or consolidated with the
Company or any of its Restricted Subsidiaries or (b) the assets of such Person
are acquired by the Company or any of its Restricted Subsidiaries, (iii) the net
income of any Restricted Subsidiary to the extent that (but only so long as) the
declaration or payment of dividends or similar distributions by such Restricted
Subsidiary of that income is not permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary during such
period, (iv) in the case of a successor to the Company by consolidation, merger
or transfer of its assets, any earnings of the successor prior to such merger,
consolidation or transfer of assets and (v) the gains (but not losses) realized
during such period by the Company or any of its Restricted Subsidiaries
resulting from (a) the acquisition of securities issued by the Company or
extinguishment of Indebtedness of the Company or any of its Restricted
Subsidiaries, (b) Asset Sales by the Company or any of its Restricted
Subsidiaries and (c) other extraordinary items realized by the Company or any of
its Restricted Subsidiaries. Notwithstanding the foregoing, in calculating
Consolidated Net Income, the Company will be entitled to take into consideration
the tax benefits associated with any loss described in clause (v) of the
preceding sentence, but only to the extent such tax benefits are actually
recognized by the Company or any of its Restricted Subsidiaries during such
period; provided, further, that there will be included in such net income,
without duplication, the net income of any Unrestricted Subsidiary to the extent
such net income is actually received by the Company or any of its Restricted
-11-
Subsidiaries in the form of cash dividends or similar cash distributions during
such period, or in any other form but converted to cash during such period.
"Consolidated Tangible Assets" of the Company as of any date means
the total amount of assets of the Company and its Restricted Subsidiaries (less
applicable reserves) on a consolidated basis at the end of the fiscal quarter
immediately preceding such date, as determined in accordance with GAAP, less:
(i) Intangible Assets and (ii) appropriate adjustments on account of minority
interests of other Persons holding equity investments in Restricted
Subsidiaries, in the case of each of clauses (i) and (ii) above, as reflected on
the consolidated balance sheet of the Company and its Restricted Subsidiaries as
of the end of the fiscal quarter immediately preceding such date.
"Consolidated Tangible Net Worth" of the Company as of any date
means the stockholders' equity (including any Preferred Stock that is classified
as equity under GAAP, other than Disqualified Stock) of the Company and its
Restricted Subsidiaries on a consolidated basis at the end of the fiscal quarter
immediately preceding such date, as determined in accordance with GAAP, plus any
amount of unvested deferred compensation included, in accordance with GAAP, as
an offset to stockholders' equity, less the amount of Intangible Assets
reflected on the consolidated balance sheet of the Company and its Restricted
Subsidiaries as of the end of the fiscal quarter immediately preceding such
date.
"Continuing Director" means at any date a member of the Board of
Directors of the Company who (i) was a member of the Board of Directors of the
Company on the initial issuance date of the Notes hereunder or (ii) was
nominated for election or elected to the Board of
-12-
Directors of the Company with the affirmative vote of at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election.
"Corporate Trust Office of the Trustee" will be at the address of
the Trustee specified in Section 12.02 hereof or such other address as the
Trustee may give notice to the Company.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Default" means any event, act or condition that is, or after notice
or the passage of time, or both, would be, an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
final maturity date of the Notes; provided that any Capital Stock which would
not constitute Disqualified Stock but for provisions thereof giving holders
thereof the right to require the Company to repurchase or redeem such Capital
Stock upon the occurrence of a change of control occurring prior to the final
maturity of the Notes will not constitute Disqualified Stock if the change of
control provisions applicable to such Capital Stock are no more favorable to the
holders of such Capital Stock than the provisions contained in Section 4.16
hereof and such Capital Stock specifically provides that the Company will not
repurchase or redeem (or be required to repurchase or redeem) any such Capital
Stock pursuant to such provisions
-13-
prior to the Company's repurchase of Notes pursuant to Section 4.16 hereof.
"Disqualified Stock Dividend" of any Person means, for any dividend
payable with regard to Disqualified Stock issued by such Person, the amount of
such dividend multiplied by a fraction, the numerator of which is one and the
denominator of which is one minus the maximum statutory combined federal, state
and local income tax rate (expressed as a decimal number between 1 and 0) then
applicable to such Person.
"DTC" means the Depository Trust Company or its successors.
"Equity Offering" means a public or private equity offering by the
Company for cash of Capital Stock, other than an offering of Disqualified Stock.
"Euroclear" means Morgan Guaranty Trust Company of New York
(Brussels Office) as operator of the Euroclear System.
"Event of Default" has the meaning set forth in Section 6.01(a)
hereof.
"Excess Proceeds" has the meaning set forth in Section 4.11(a)
hereof.
"Excess Proceeds Offer" has the meaning set forth in Section 4.11(c)
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
-14-
"Existing Indebtedness" means all of the Indebtedness of the Company
and its Subsidiaries that is outstanding on the date hereof.
"Fair Market Value" with respect to any asset or property means the
sale value that would be obtained in an arm's length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy. Fair Market Value shall be determined
by the Board of Directors of the Company acting in good faith and shall be
evidenced by a board resolution (certified by the Secretary or Assistant
Secretary of the Company) delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth in
the opinions and interpretations of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
interpretations of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect on the date hereof.
"Global Note" means the global note, without coupons, representing
all or a portion of the Notes deposited with the DTC substantially in the form
of Exhibit A attached hereto.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any interest rate swap agreement, foreign currency exchange
agreement, interest rate collar agreement, option or futures contract or other
similar agreement or arrangement relating to interest rates or foreign exchange
rates.
-15-
"Holder" or "Noteholder" means a Person in whose name a Note is
registered in the Security Register.
"Incur" means to, directly or indirectly, create, incur, assume,
guarantee, extend the maturity of, or otherwise become liable with respect to
any Indebtedness; provided, however, that neither the accrual of interest
(whether such interest is payable in cash or kind) nor the accretion of original
issue discount shall be considered an Incurrence of Indebtedness.
"Indebtedness" of any Person at any date means, without duplication,
(i) all indebtedness of such Person for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof), (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all fixed obligations of
such Person in respect of letters of credit or other similar instruments (or
reimbursement obligations with respect thereto), other than standby letters of
credit issued for the benefit of, or surety and performance bonds issued by,
such Person in the ordinary course of business, (iv) all obligations of such
Person with respect to Hedging Obligations (other than those that fix or cap the
interest rate on variable rate Indebtedness otherwise permitted by this
Indenture or that fix the exchange rate in connection with Indebtedness
denominated in a foreign currency and otherwise permitted by this Indenture),
(v) all obligations of such Person to pay the deferred and unpaid purchase price
of property or services, including, without limitation, all conditional sale
obligations of such Person and all obligations under any title retention
agreement; provided, however, that (a) any obligations described in the
foregoing clause (v) which are non-interest bearing and which have a maturity of
not more than six months from the date of Incurrence thereof shall
-16-
not constitute Indebtedness and (b) trade payables and accrued expenses Incurred
in the ordinary course of business shall not constitute Indebtedness, (vi) all
Capitalized Lease Obligations of such Person, (vii) all Indebtedness of others
secured by a Lien on any asset of such Person, whether or not such Indebtedness
is assumed by such Person, (viii) all Indebtedness of others guaranteed by, or
otherwise the liability of, such Person to the extent of such guarantee or
liability, and (ix) all Disqualified Stock issued by such Person (the amount of
Indebtedness represented by any Disqualified Stock will equal the greater of the
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends). The amount of Indebtedness of any Person at any date will be (a) the
outstanding balance at such date of all unconditional obligations as described
above, (b) the maximum liability of such Person for any contingent obligations
under clause (viii) above and (c) in the case of clause (vii) (if the
Indebtedness referred to therein is not assumed by such Person), the lesser of
the (A) Fair Market Value of all assets subject to a Lien securing the
Indebtedness of others on the date that the Lien attaches and (B) amount of the
Indebtedness secured.
"Indenture" means this Indenture, as amended from time to time in
accordance with its terms.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
reasonable judgment of the Company's Board of Directors, (i) qualified to
perform the task for which it has been engaged, and (ii) disinterested and
independent, in a direct and indirect manner, of the parties to the Affiliate
Transaction with respect to which such firm has been engaged.
-17-
"Institutional Accredited Investor" means an entity in which all of
the equity owners are accredited investors within the meaning of Rule
501(a)(1),(2),(3) or (7) under the Securities Act.
"Intangible Assets" of the Company means all unamortized debt
discount and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights and all other items which
would be treated as intangibles on the consolidated balance sheet of the Company
and its Restricted Subsidiaries prepared in accordance with GAAP.
"Interest Expense" of any Person for any period means, without
duplication, the aggregate amount of (i) interest which, in conformity with
GAAP, would be set opposite the caption "interest expense" or any like caption
on an income statement for such Person (including, without limitation, imputed
interest included on Capitalized Lease Obligations, all commissions, discounts
and other fees and charges owed with respect to letters of credit securing
financial obligations and bankers' acceptance financing, the net costs
associated with Hedging Obligations, amortization of other financing fees and
expenses, the interest portion of any deferred payment obligation, amortization
of discount or premium, if any, and all other noncash interest expense other
than interest and other charges amortized to cost of sales) and includes, with
respect to the Company and its Restricted Subsidiaries, without duplication
(including duplication of the foregoing items), all interest amortized to cost
of sales for such period, and (ii) the amount of Disqualified Stock Dividends
recognized by the Company on any Disqualified Stock whether or not paid during
such period.
"Interest Incurred" of any Person for any period means, without
duplication, the aggregate amount of (i)
-18-
interest which, in conformity with GAAP, would be set opposite the caption
"interest expense" or any like caption on an income statement for such Person
(including, without limitation, imputed interest included on Capitalized Lease
Obligations, all commissions, discounts and other fees and charges owed with
respect to letters of credit securing financial obligations and bankers'
acceptance financing, the net costs associated with Hedging Obligations,
amortization of other financing fees and expenses, the interest portion of any
deferred payment obligation, amortization of discount or premium, if any, and
all other noncash interest expense other than interest and other charges
amortized to cost of sales) and includes, with respect to the Company and its
Restricted Subsidiaries, without duplication (including duplication of the
foregoing items), all interest capitalized for such period, all interest
attributable to discontinued operations for such period to the extent not set
forth on the income statement under the caption "interest expense" or any like
caption, and all interest actually paid by the Company or a Restricted
Subsidiary under any guarantee of Indebtedness (including, without limitation, a
guarantee of principal, interest or any combination thereof) of any other Person
during such period and (ii) the amount of Disqualified Stock Dividends
recognized by the Company on any Disqualified Stock whether or not declared
during such period.
"Interest Payment Date" means April 1 and October 1 of each year, or
if any such day is not a Business Day, on the next succeeding Business Day.
"Investments" of any Person means all (i) investments by such Person
in any other Person in the form of loans, advances or capital contributions,
(ii) guarantees of Indebtedness or other obligations of any other Person by such
Person, (iii) purchases (or other
-19-
acquisitions for consideration) by such Person of Indebtedness, Capital Stock or
other securities of any other Person and (iv) other items that would be
classified as investments on a balance sheet of such Person determined in
accordance with GAAP.
"Issue Date" means the date the Notes are first issued by the
Company and authenticated by the Trustee under this Indenture.
"Joint Venture Entity" means the joint venture between the Company
and Corporacion GEO S.A. de C.V.
"Legal Holiday" means Saturday, Sunday or a day on which banking
institutions in New York, New York, Chicago, Illinois, or at a place of payment
are authorized or obligated by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment
shall be made at that place on the next succeeding day that is not a Legal
Holiday.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or other similar encumbrance of any kind upon or in
respect of such asset, whether or not filed, recorded or otherwise perfected
under applicable law (including, without limitation, any conditional sale or
other title retention agreement, and any lease in the nature thereof, any option
or other agreement to sell, and any filing of, or agreement to give, any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction).
"Material Subsidiary" means any Subsidiary of the Company which
accounted for five percent or more of the Consolidated Tangible Assets or
Consolidated Cash Flow Available for Fixed Charges of the Company on a
-20-
consolidated basis for the fiscal year ending immediately prior to any Default
or Event of Default.
"Maturity Date" means April 1, 2008.
"Net Proceeds" means (i) cash (in U.S. dollars or freely convertible
into U.S. dollars) received by the Company or any Restricted Subsidiary from an
Asset Sale net of (a) all brokerage commissions, investment banking fees and all
other fees and expenses (including, without limitation, fees and expenses of
counsel, financial advisors, accountants and investment bankers) related to such
Asset Sale, (b) provisions for all income and other taxes measured by or
resulting from such Asset Sale of the Company or any of its Restricted
Subsidiaries, (c) payments made to retire Indebtedness that was Incurred in
accordance with this Indenture and that either (1) is secured by a Lien incurred
in accordance with this Indenture on the property or assets sold or (2) is
required in connection with such Asset Sale to the extent actually repaid in
cash, (d) amounts required to be paid to any Person (other than the Company or a
Restricted Subsidiary) owning a beneficial interest in the assets subject to the
Asset Sale and (e) appropriate amounts to be provided by the Company or any
Restricted Subsidiary thereof, as the case may be, as a reserve, in accordance
with GAAP, against any liabilities associated with such Asset Sale and retained
by the Company or any Restricted Subsidiary thereof, as the case may be, after
such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations or post-closing
purchase price adjustments associated with such Asset Sale, all as reflected in
an Officers' Certificate delivered to the Trustee, and (ii) all noncash
consideration received by the Company or any of its Restricted Subsidiaries from
-21-
such Asset Sale upon the liquidation or conversion of such consideration into
cash, without duplication, net of all items enumerated in subclauses (a) through
(e) of clause (i) hereof.
"Net Worth Amount" has the meaning set forth in Section 4.20(a)
hereof.
"Net Worth Offer" has the meaning set forth in Section 4.20(a)
hereof.
"Net Worth Offer Date" has the meaning set forth in Section 4.20(a)
hereof.
"Net Worth Offer Price" has the meaning set forth in Section 4.20(a)
hereof.
"Non-Recourse Indebtedness" with respect to any Person means
Indebtedness of such Person for which (i) the sole legal recourse for collection
of principal and interest on such Indebtedness is against the specific property
identified in the instruments evidencing or securing such Indebtedness and such
property was acquired with the proceeds of such Indebtedness or such
Indebtedness was Incurred within 90 days after the acquisition of such property
and (ii) no other assets of such Person may be realized upon in collection of
principal or interest on such Indebtedness.
"Notes" means the securities that are issued under this Indenture as
amended or supplemented from time to time pursuant to this Indenture.
"Officer" means the chairman, the chief executive officer, the
president, the chief financial officer, the chief operating officer, the chief
accounting officer, the treasurer, or any assistant treasurer, the
-22-
controller, the secretary, any assistant secretary or any vice president of a
Person.
"Officers' Certificate" means a certificate signed by two Officers,
one of whom must be the Person's chief executive officer, chief operating
officer, chief financial officer or chief accounting officer.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or of any Subsidiary Guarantor or the Trustee.
"Paying Agent" has the meaning set forth in Section 2.03 hereof.
"Permitted Investments" of any Person means Investments of such
Person in (i) direct obligations of the United States or any agency thereof or
obligations guaranteed by the United States or any agency thereof, in each case
maturing within 180 days of the date of acquisition thereof, (ii) certificates
of deposit maturing within 180 days of the date of acquisition thereof issued by
a bank, trust company or savings and loan association which is organized under
the laws of the United States or any state thereof having capital, surplus and
undivided profits aggregating in excess of $250 million and a Keefe Bank Watch
Rating of C of better, (iii) certificates of deposit maturing within 180 days of
the date of acquisition thereof issued by a bank, trust company or savings and
loan association organized under the laws of the United States or any state
thereof other than banks, trust companies or savings and loan associations
satisfying the criteria in (ii) above, provided that the aggregate amount of all
certificates of deposit issued to the Company at any one time by such bank,
trust company or savings and loan association will not exceed $100,000,
-23-
(iv) commercial paper given the highest rating by two established national
credit rating agencies and maturing not more than 180 days from the date of the
acquisition thereof, (v) repurchase agreements or money-market accounts which
are fully secured by direct obligations of the United States or any agency
thereof and (vi) in the case of the Company and its Subsidiaries, any
receivables or loans taken by the Company or a Subsidiary in connection with the
sale of any asset otherwise permitted by this Indenture.
"Permitted Liens" means (i) Liens for taxes, assessments or
governmental charges or claims that either (a) are not yet delinquent or (b) are
being contested in good faith by appropriate proceedings and as to which
appropriate reserves have been established or other provisions have been made in
accordance with GAAP, (ii) statutory Liens of landlords and carriers',
warehousemen's, mechanics', suppliers', materialmen's, repairmen's or other
Liens imposed by law and arising in the ordinary course of business and with
respect to amounts that, to the extent applicable, either (a) are not yet
delinquent or (b) are being contested in good faith by appropriate proceedings
and as to which appropriate reserves have been established or other provisions
have been made in accordance with GAAP, (iii) Liens (other than any Lien imposed
by the Employee Retirement Income Security Act of 1974, as amended) incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security, (iv)
Liens incurred or deposits made to secure the performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, progress payments,
government contracts and other obligations of like nature (exclusive of
obligations for the payment of borrowed money), in each case incurred in the
ordinary course of business of the Company and its Subsidiaries,
-24-
(v) attachment or judgment Liens not giving rise to a Default or an Event of
Default and which are being contested in good faith by appropriate proceedings,
(vi) easements, rights-of-way, restrictions and other similar charges or
encumbrances not materially interfering with the ordinary course of business of
the Company and its Subsidiaries, (vii) zoning restrictions, licenses,
restrictions on the use of real property or minor irregularities in title
thereto, which do not materially impair the use of such real property in the
ordinary course of business of the Company and its Subsidiaries or the value of
such real property for the purpose of such business, (viii) leases or subleases
granted to others not materially interfering with the ordinary course of
business of the Company and its Subsidiaries, (ix) purchase money mortgages
(including, without limitation, Capitalized Lease Obligations and purchase money
security interests), (x) Liens securing Refinancing Indebtedness; provided that
such Liens only extend to assets which are similar to the type of assets
securing the Indebtedness being refinanced and such refinanced Indebtedness was
previously secured by such similar assets, (xi) Liens securing Indebtedness of
the Company and its Restricted Subsidiaries permitted to be incurred under this
Indenture; provided that the aggregate amount of Indebtedness secured by Liens
(other than Non-Recourse Indebtedness secured by Liens) will not exceed 40
percent of Consolidated Tangible Assets, (xii) any interest in or title of a
lessor to property subject to any Capitalized Lease Obligations incurred in
compliance with the provisions of this Indenture, (xiii) Liens existing on the
date of this Indenture, including, without limitation, Liens securing Existing
Indebtedness, (xiv) any option, contract or other agreement to sell an asset;
provided such sale is not otherwise prohibited under this Indenture, (xv) Liens
securing Non-Recourse Indebtedness of the Company or a Restricted Subsidiary
thereof;
-25-
provided that such Liens apply only to the property financed out of the net
proceeds of such Non-Recourse Indebtedness within 90 days of the incurrence of
such Non-Recourse Indebtedness, (xvi) Liens on property or assets of any
Restricted Subsidiary securing Indebtedness of such Restricted Subsidiary owing
to the Company or one or more Restricted Subsidiaries, (xvii) Liens securing
Indebtedness of an Unrestricted Subsidiary, (xviii) any right of a lender or
lenders to which the Company or a Restricted Subsidiary may be indebted to
offset against, or appropriate and apply to the payment of, such Indebtedness
any and all balances, credits, deposits, accounts or monies of the Company or a
Restricted Subsidiary with or held by such lender or lenders, (xix) any pledge
or deposit of cash or property in conjunction with obtaining surety and
performance bonds and letters of credit required to engage in constructing
on-site and off-site improvements required by municipalities or other
governmental authorities in the ordinary course of business of the Company or
any Restricted Subsidiary, (xx) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods, (xxi) Liens encumbering customary
initial deposits and margin deposits, and other Liens that are customary in the
industry and incurred in the ordinary course of business securing Indebtedness
under Hedging Obligations and forward contracts, options, futures contracts,
futures options or similar agreements or arrangements designed to protect the
Company or any of its Subsidiaries from fluctuations in the price of
commodities, and (xxii) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by the
Company or any of its Subsidiaries in the ordinary course of business.
-26-
"Person" means any individual, corporation, partnership, joint
venture, incorporated or unincorporated association, joint stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Preferred Stock" of any Person means all Capital Stock of such
Person which has a preference in liquidation or with respect to the payment of
dividends.
"Private Placement Legend" means the legend initially set forth on
the Notes in the form set forth on Exhibit A.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Refinancing Indebtedness" means indebtedness that refunds,
refinances or extends any Existing Indebtedness or other Indebtedness permitted
to be incurred by the Company or its Restricted Subsidiaries pursuant to the
terms of this Indenture, but only to the extent that (i) the Refinancing
Indebtedness is subordinated to the Notes or the Subsidiary Guarantees, as the
case may be, to the same extent as the Indebtedness being refunded, refinanced
or extended, if at all, (ii) the Refinancing Indebtedness is scheduled to mature
either (a) no earlier than the Indebtedness being refunded, refinanced or
extended, or (b) after the maturity date of the Notes, (iii) the portion, if
any, of the Refinancing Indebtedness that is scheduled to mature on or prior to
the maturity date of the Notes has a Weighted Average Life to Maturity at the
time such Refinancing Indebtedness is Incurred that is equal to or greater than
the Weighted Average Life to Maturity of the portion of the Indebtedness being
refunded, refinanced or extended that is scheduled to mature on or prior to the
maturity date of
-27-
the Notes, (iv) such Refinancing Indebtedness is in an aggregate amount that is
equal to or less than the aggregate amount then outstanding under the
Indebtedness being refunded, refinanced or extended, (v) such Refinancing
Indebtedness is Incurred by the same Person that initially Incurred the
Indebtedness being refunded, refinanced or extended, except that the Company may
Incur Refinancing Indebtedness to refund, refinance or extend Indebtedness of
any Restricted Subsidiary and (vi) such Refinancing Indebtedness is Incurred
within 180 days after the Indebtedness being refunded, refinanced or extended is
so refunded, refinanced or extended.
"Registrar" has the meaning set forth in Section 2.03 hereof.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 25, 1998, by and between the Initial Purchasers,
the Company and the Subsidiary Guarantors.
"Regulation S" means Regulation S promulgated under the Securities
Act (including any successor registration thereto) as it may be amended from
time to time.
"Restricted Investment" with respect to any Person means any
Investment (other than any Permitted Investment) by such Person in any (i) of
its Affiliates, (ii) executive officer or director or any Affiliate of such
Person, or (iii) any other Person other than a Restricted Subsidiary; provided,
however, that with respect to the Company and its Restricted Subsidiaries, any
loan or advance to an executive officer or director of the Company or a
Subsidiary will not constitute a Restricted Investment provided such loan or
advance is made in the ordinary course of business and, if such loan
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or advance exceeds $100,000 (other than a readily marketable mortgage loan not
exceeding $500,000), such loan or advance has been approved by the Board of
Directors of the Company or a disinterested committee thereof. Notwithstanding
the above, a Subsidiary Guarantee shall not be deemed a Restricted Investment.
"Restricted Payment" with respect to any Person means (i) the
declaration of any dividend or the making of any other payment or distribution
of cash, securities or other property or assets in respect of such Person's
Capital Stock (except that a dividend payable solely in Capital Stock (other
than Disqualified Stock) of such Person will not constitute a Restricted
Payment), (ii) any payment on account of the purchase, redemption, retirement or
other acquisition for value of such Person's Capital Stock or any other payment
or distribution made in respect thereof (other than payments or distributions
excluded from the definition of Restricted Payment in clause (i) above), either
directly or indirectly, (iii) any Restricted Investment and (iv) any principal
payment, redemption, repurchase, defeasance or other acquisition or retirement
of any Indebtedness of any Unrestricted Subsidiary or of Indebtedness of the
Company which is subordinated in the right of payment to the Notes or of
Indebtedness of a Restricted Subsidiary which is subordinated in right of
payment to its Subsidiary Guarantee; provided, however, that with respect to the
Company and its Subsidiaries, Restricted Payments will not include (a) any
payment described in clause (i), (ii) or (iii) above made to the Company or any
of its Restricted Subsidiaries which are Wholly Owned Subsidiaries by any of the
Company's Subsidiaries, or (b) any purchase, redemption, retirement or other
acquisition for value of Indebtedness or Capital Stock of such Person or its
Subsidiaries if the consideration therefor consists solely
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of Capital Stock (other than Disqualified Stock) of such Person.
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
promulgated under the Securities Act; provided that the Trustee shall be
entitled to request and conclusively rely upon an Opinion of Counsel with
respect to whether a Note is a Restricted Security.
"Restricted Subsidiary" means each of the Subsidiaries of the
Company which is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 as promulgated under the Securities Act,
as such rule may be amended from time to time, or any similar rule (other than
Rule 144A) or regulation hereafter adopted by the SEC providing for offers and
sales of securities made in compliance therewith resulting in offers and sales
by subsequent holders that are not affiliates of an issuer of such securities
being free of the registration and prospectus delivery requirements of the
Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act, as
such rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the SEC.
"SEC" means the Securities and Exchange Commission, and any
successor thereto.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" is a register of the Notes and of their transfer
and exchange kept by the Registrar.
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"Subsidiary" of any Person means (i) any corporation of which at
least a majority of the aggregate voting power of all classes of the Common
Equity is directly or indirectly beneficially owned by such Person, and (ii) any
entity other than a corporation of which such Person, directly or indirectly,
beneficially owns at least a majority of the Common Equity.
"Subsidiary Guarantee" means the guarantee of the Notes by each
Subsidiary Guarantor under the provisions contained herein.
"Subsidiary Guarantors" means each of (i) Beazer Homes Corp., a
Tennessee corporation, Beazer/Squires Realty, Inc., a North Carolina
corporation, Beazer Home Sales Arizona Inc., a Delaware corporation, Beazer
Realty Corp., a Georgia corporation, Panitz Homes Realty, Inc., a Florida
corporation, Beazer Mortgage Corporation, a Delaware corporation, Beazer Homes
Holdings Corp., a Delaware corporation, Beazer Homes Texas Holdings, Inc., a
Delaware corporation and Beazer Homes Texas, L.P., a Delaware limited
partnership, and (ii) each of the Company's Subsidiaries that becomes a
guarantor of the Notes pursuant to the provisions contained herein.
"Successor" has the meaning set forth in Section 5.01(a) hereof.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Trust Officer" means any vice president, trust officer or other
authorized person of the Trustee assigned by the Trustee to administer its
corporate trust matters.
"Trustee" means the party named as such until a successor replaces
such party in accordance with the
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applicable provisions of this Indenture and thereafter means the successor
trustee serving hereunder.
"U.S. Government Obligations" means direct obligations of the United
States for the payment of which the full faith and credit of the United States
is pledged.
"Unrestricted Subsidiary" means United Home Insurance Corp. and each
of the Subsidiaries of the Company so designated by a resolution adopted by the
Board of Directors of the Company as provided below and provided that (a)
neither the Company nor any of its other Subsidiaries (other than Unrestricted
Subsidiaries) (1) provides any direct or indirect credit support for any
Indebtedness of such Subsidiary (including any undertaking, agreement or
instrument evidencing such Indebtedness) or (2) is directly or indirectly liable
for any Indebtedness of such Subsidiary, (b) the creditors with respect to
Indebtedness for borrowed money of such Subsidiary have agreed in writing that
they have no recourse, direct or indirect, to the Company or any other
Subsidiary of the Company (other than Unrestricted Subsidiaries), including,
without limitation, recourse with respect to the payment of principal or
interest on any Indebtedness of such Subsidiary and (c) no default with respect
to any Indebtedness of such Subsidiary (including any right which the holders
thereof may have to take enforcement action against such Subsidiary) would
permit (upon notice, lapse of time or both) any holder of any other Indebtedness
of the Company and of its other Subsidiaries (other than other Unrestricted
Subsidiaries) to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity. The
Board of Directors of the Company may designate an Unrestricted Subsidiary to be
a Restricted Subsidiary; provided that (i) any such redesignation will be deemed
to be an Incurrence by the
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Company and its Restricted Subsidiaries of the Indebtedness (if any) of such
redesignated Subsidiary for purposes of the covenant set forth in Section
4.13(a) hereof as of the date of such redesignation, (ii) immediately after
giving effect to such redesignation and the Incurrence of any such additional
Indebtedness, the Company and its Restricted Subsidiaries could Incur $1.00 of
additional Indebtedness under the Consolidated Fixed Charge Coverage Ratio
contained in the covenant set forth in Section 4.13(a) hereof and (iii) the
Liens of such Unrestricted Subsidiary could then be incurred in accordance with
Section 4.18 hereof as of the date of such redesignation. Subject to the
foregoing, the Board of Directors of the Company also may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary; provided that (i) all
previous Investments by the Company and its Restricted Subsidiaries in such
Restricted Subsidiary (net of any returns previously paid on such Investments)
will be deemed to be Restricted Payments at the time of such designation and
will reduce the amount available for Restricted Payments under the covenant set
forth in Section 4.12 hereof, (ii) immediately after giving effect to such
designation and reduction of amounts available for Restricted Payments under the
covenant set forth in Section 4.12 hereof, the Company and its Restricted
Subsidiaries could incur $1.00 of additional Indebtedness under the Consolidated
Fixed Charge Coverage Ratio contained in the covenant set forth in Section
4.13(a) hereof and (iii) no Default or Event of Default shall have occurred or
be continuing. Any such designation or redesignation by the Board of Directors
of the Company will be evidenced to the Trustee by the filing with the Trustee
of a certified copy of the resolution of the Board of Directors of the Company
giving effect to such designation or redesignation and an Officers' Certificate
certifying that such designation or redesignation complied
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with the foregoing conditions and setting forth the underlying calculations.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness or portion thereof, at any date, the number of years obtained by
dividing (i) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other required
payment of principal, including, without limitation, payment at final maturity,
in respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment
by (ii) the sum of all such payments described in clause (a) above.
"Wholly Owned Subsidiary" of any Person means (i) a Subsidiary, of
which 100 percent of the Common Equity (except for directors' qualifying shares
or certain minority interests owned by other Persons solely due to local law
requirements that there be more than one stockholder, but which interest is not
in excess of what is required for such purpose) is owned directly by such Person
or through one or more other Wholly Owned Subsidiaries of such Person, or (ii)
any entity other than a corporation in which such Person, directly or
indirectly, owns all of the Common Equity of such entity.
"Working Capital Facilities" means, collectively, the Bank Credit
Facility and one or more other facilities among the Company, as borrower
thereunder, any Subsidiary Guarantor and one or more lenders pursuant to which
the Company may Incur Indebtedness for working capital purposes or to finance
the acquisition, holding or development of property by the Company and the
Restricted Subsidiaries (including the financing of any related interest
reserve), as any such facility may be amended, restated, supplemented or
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otherwise modified from time to time, and includes any agreement extending the
maturity of, or restructuring (including, without limitation, the inclusion of
additional borrowers thereunder that are Unrestricted Subsidiaries), all or any
portion of the Indebtedness under such facility or any successor facilities and
includes any facility with one or more lenders refinancing or replacing all or
any portion of the Indebtedness under such facility or any successor facility.
Section 1.03. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
All terms used in this Indenture that are defined in the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
ARTICLE 2
THE SECURITIES
Section 2.01. Dating; Incorporation of Form in Indenture.
The Notes and the Subsidiary Guarantees shall be substantially in
the form of Exhibit A which is incorporated in and made part of this Indenture.
The Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. The Company may use "CUSIP" numbers in issuing the
Notes. The Company shall approve the form of the Notes.
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Without limiting the generality of the foregoing, Notes offered and
sold to QIBs in reliance on Rule 144A ("Rule 144A Notes") shall bear the Private
Placement Legend and include the form of assignment set forth in Exhibit C-1,
Notes offered and sold in offshore transactions in reliance on Regulation S
("Regulation S Notes") shall bear the Private Placement Legend and include the
form of assignment set forth in Exhibit C-2, and Notes offered and sold to
Institutional Accredited Investors in transactions exempt from registration
under the Securities Act not made in reliance upon Rule 144A or Regulation S
("Other Notes") may be represented by the Restricted Global Note or, if such an
investor may not hold an interest in the Restricted Global Note, a physical note
("Physical Note") in each case bearing the Private Placement Legend. Each Note
shall be dated the date of its authentication.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
Section 2.02. Execution and Authentication.
The Notes shall be executed on behalf of the Company by two Officers
of the Company or an Officer and an Assistant Secretary of the Company. Such
signature may be either manual or facsimile. The Company's seal shall be
impressed, affixed, imprinted or reproduced on the Notes and may be in facsimile
form.
If an Officer whose signature is on a Note no longer holds that
office at the time the Trustee
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authenticates the Note, the Note shall be valid nevertheless.
A Note shall not be valid until the Trustee manually signs the
certificate of authentication on the Note. Such signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee or an authenticating agent shall authenticate Notes for
original issue in the aggregate principal amount not to exceed $200,000,000 in
one or more series upon a request from the Company (a "Company Request"),
provided the aggregate principal amount of initial Notes on the Issue Date is
$100,000,000. After the Issue Date additional Notes may be issued from time to
time subject to the limitations set forth in Section 4.13. The aggregate
principal amount of Notes outstanding at any time may not exceed $200,000,000
except as provided in Section 2.07 hereof. Upon receipt of a Company Request,
the Trustee shall authenticate an additional series of Notes in an aggregate
principal amount not to exceed $200,000,000 for issuance in exchange for all
Notes previously issued pursuant to an exchange offer registered under the
Securities Act ("Exchange Notes"). Exchange Notes may have such distinctive
series designation as and such changes in the form thereof as are specified in
the Company Request referred to in the preceding sentence. The Notes shall be
issuable only in registered form without coupons and only in denominations of
$1,000 and integral multiples thereof.
In the event that the Company shall issue and the Trustee shall
authenticate any Notes issued under this Indenture subsequent to the Issue Date
pursuant to the immediately preceding paragraph, the Company shall use its
reasonable efforts to obtain the same "CUSIP" number for such Notes as is
printed on the Notes outstanding at such
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time; provided, however, that if any series of Notes issued under this Indenture
subsequent to the Issue Date is determined by the Company to be a different
class of security than the Notes outstanding at such time for federal income tax
purposes, the Company may obtain a "CUSIP" number for such Notes that is
different than the "CUSIP" number printed on the Notes then outstanding.
Notwithstanding the foregoing, all Notes issued under this Indenture
shall vote and consent together on all matters (as to which any of such Notes
may vote or consent) as one class and no series of Notes will have the right to
vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent to authenticate
Notes. An authenticating agent may authenticate Notes whenever the Trustee may
do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
right as an Agent to deal with the Company or an Affiliate.
Section 2.03. Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency located in the Borough of Manhattan, City of New York, State of New
York where Notes may be presented for payment ("Paying Agent") and an office or
agency where notices and demands to or upon the Company in respect of the Notes
and this Indenture may be served. The Registrar shall keep a register of the
Notes and of their transfer and exchange. The Company may have one or more
co-registrars and one or more additional paying agents. Neither the Company nor
any Affiliate may act as Paying Agent. The Company may
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change any Paying Agent, Registrar or co-registrar without notice to any
Noteholder.
The Company shall enter into an appropriate agency agreement with
any Registrar or Paying Agent not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any such Agent. If
the Company fails to maintain a Registrar or Paying Agent, or agent for service
of notices and demands, or fails to give the foregoing notice, the Trustee shall
act as such. The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of notices and demands in connection with the Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
On or before each due date of the principal of and interest on any
Notes, the Company shall deposit with the Paying Agent a sum sufficient to pay
such principal and interest so becoming due. The Company at any time may require
a Paying Agent to pay all money held by it to the Trustee and the Trustee, may
at any time during the continuance of any Payment Default, upon written request
to a Paying Agent, require such Paying Agent to forthwith pay to the Trustee all
sums so held in trust by such Paying Agent together with a complete accounting
of such sums. Upon doing so, the Paying Agent shall have no further liability
for the money.
Section 2.05. Noteholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders and shall otherwise comply with TIA Section 312(a). If
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the Trustee is not the Registrar, the Company shall furnish to the Trustee on or
before each March 15 and September 15 in each year, and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of Noteholders.
Section 2.06. Transfer and Exchange.
Subject to Sections 2.14 and 2.15, when a Note is presented to the
Registrar with a request to register the transfer thereof, the Registrar shall
register the transfer as requested if the requirements of applicable law are met
and, when Notes are presented to the Registrar with a request to exchange them
for an equal principal amount of Notes of other authorized denominations, the
Registrar shall make the exchange as requested provided that every Note
presented or surrendered for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by the holder
thereof or his attorney duly authorized in writing. To permit transfers and
exchanges, upon surrender of any Note for registration of transfer at the office
or agency maintained pursuant to Section 2.03 hereof, the Company shall execute
and the Trustee shall authenticate Notes at the Registrar's request. Any
exchange or transfer shall be without charge, except that the Company may
require payment by the holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation to a transfer or exchange,
but this provision shall not apply to any exchange pursuant to Sections 2.09,
3.06 or 10.05 hereof. The Trustee shall not be required to register transfers of
Notes or to exchange Notes for a period of 15 days before selection of any Notes
to be redeemed. The Trustee shall not be required to exchange or register
transfers of any
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Notes called or being called for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
Any holder of the Global Note shall, by acceptance of such Global
Note, agree that transfers of the beneficial interests in such Global Note may
be effected only through a book entry system maintained by the holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Global Note shall be required to be reflected in a book entry.
Section 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the holder
of a Note presents evidence to the satisfaction of the Company and the Trustee
that the Note has been lost, destroyed or wrongfully taken, the Company shall
issue and the Trustee shall authenticate a replacement Note if the Trustee's
requirements are met. An indemnity bond may be required by the Company or the
Trustee that is sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Note is replaced. In every case of destruction, loss or theft,
the applicant shall also furnish to the Company and to the Trustee evidence to
their satisfaction of the destruction, loss or the theft of such Note and the
ownership thereof. The Company and the Trustee may charge for its expenses in
replacing a Note. Every replacement Note is an additional obligation of the
Company.
Section 2.08. Outstanding Notes.
Notes outstanding at any time are all Notes authenticated by the
Trustee except for those cancelled by
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it, those delivered to it for cancellation, and those described in this Section
2.08 as not outstanding.
If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding until the Company and the Trustee receive proof satisfactory to each
of them that the replaced Note is held by a bona fide purchaser.
If a Paying Agent holds on a Redemption Date or Maturity Date money
sufficient to pay the principal of, premium, if any, and accrued interest on
Notes payable on that date, then on and after that date such Notes cease to be
outstanding and interest on them ceases to accrue.
Subject to Section 12.17, a Note does not cease to be outstanding
solely because the Company or an Affiliate holds the Note.
Section 2.09. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes. Temporary Notes
shall be substantially in the form, and shall carry all rights, of definitive
Notes but may have variations that the Company considers appropriate for
temporary Notes. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Notes in exchange for temporary Notes
presented to it.
Section 2.10. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee
shall cancel and destroy or return to the Company in
-42-
accordance with its normal practice, all Notes surrendered for transfer,
exchange, payment or cancellation unless the Company instructs the Trustee in
writing to deliver the Notes to the Company. Subject to Section 2.07 hereof, the
Company may not issue new Notes to replace Notes in respect of which it has
previously paid all principal, premium and interest accrued thereon, or
delivered to the Trustee for cancellation.
Section 2.11. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted amounts, plus any interest payable on defaulted amounts
pursuant to Section 4.01 hereof, to the persons who are Noteholders on a
subsequent special record date. The Company shall fix the special record date
and payment date in a manner satisfactory to the Trustee and provide the Trustee
at least 20 days notice of the proposed amount of default interest to be paid
and the special payment date. At least 15 days before the special record date,
the Company shall mail or cause to be mailed to each Noteholder at his address
as it appears on the Notes register maintained by the Registrar a notice that
states the special record date, the payment date (which shall be not less than
five nor more than ten days after the special record date), and the amount to be
paid. In lieu of the foregoing procedures, the Company may pay defaulted
interest in any other lawful manner satisfactory to the Trustee.
Section 2.12. Deposit of Moneys.
Prior to 11:00 a.m., New York City time, on each Interest Payment
Date and Maturity Date, the Company shall have deposited with the Paying Agent
in immediately available funds money sufficient to make cash payments, if any,
due on such Interest Payment Date or Maturity Date,
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as the case may be, in a timely manner which permits the Trustee to remit
payment to the holders on such Interest Payment Date or Maturity Date, as the
case may be. The principal and interest on Global Notes shall be payable to the
Depository or its nominee, as the case may be, as the sole registered owner and
the sole holder of the Global Notes represented thereby. The principal and
interest on Notes in certificated form shall be payable at the office of the
Paying Agent.
Section 2.13. CUSIP Number.
The Company in issuing the Notes may use one or more "CUSIP"
numbers, and if so, the Trustee shall use the appropriate CUSIP number(s) in
notices of redemption or exchange as a convenience to holders; provided that any
such notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number(s) printed in the notice or on the Notes, and that
reliance may be placed only on the other identification numbers printed on the
Notes.
Section 2.14. Book-Entry Provisions for Global Notes.
(a) Rule 144A Notes and Other Notes which may be held in global
form, other than Regulation S Notes, initially shall be represented by one or
more notes in registered, global form without interest coupons (collectively,
the "Restricted Global Note"). Regulation S Notes initially shall be represented
by one global note in registered form without interest coupons (collectively,
the "Regulation S Global Note," and, together with the Restricted Global Note,
the "Global Notes"). The Global Notes initially shall (i) be registered in the
name of The Depository Trust Company (the "Depository") or the nominee of the
Depository, in each case for credit to an account of an Agent Member (as defined
below); (ii) be delivered
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to the Trustee as custodian for the Depository; and (iii) bear legends as set
forth in Exhibit B.
Members of, or direct or indirect participants in, the Depository
("Agent Members") shall have no rights under this Indenture with respect to any
Global Note held on their behalf by the Depository, or the Trustee as its
custodian, or under the Global Notes, and the Depository may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of the Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Agent Members, the operation of customary practices
governing the exercise of the rights of a holder of any Note.
(b) Transfers of Global Notes shall be limited to transfer in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in the Global Notes may be transferred or
exchanged for Physical Notes upon receipt by the Trustee of written instructions
from the Depository or its nominee on behalf of any beneficial owner and in
accordance with the rules and procedures of the Depository and the provisions of
Section 2.15. In addition, a Global Note shall be exchangeable for Physical
Notes if (i) the Depository (x) notifies the Company that it is unwilling or
unable to continue as depository for such Global Note and the Company thereupon
fails to appoint a successor depository or (y) has ceased to be a clearing
agency registered under the Exchange Act; (ii) the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of such
Physical Notes or (iii) there shall have occurred and be continuing a Default or
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an Event of Default with respect to the Notes. In all cases, Physical Notes
delivered in exchange for any Global Note or beneficial interests therein shall
be registered in the names, and issued in any approved denominations, requested
by or on behalf of the Depository (in accordance with its customary procedures).
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall upon receipt of a written order from the
Company authenticate and make available for delivery, one or more Physical Notes
of like tenor and amount.
(d) In connection with the transfer of Global Notes as an entirety
to beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in writing in exchange for its beneficial
interest in the Global Notes, an equal aggregate principal amount of Physical
Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Security delivered
in exchange for an interest in a Global Note pursuant to paragraph (b), (c) or
(d) shall, except as otherwise provided by paragraphs (a)(i)(x); and (c) of
Section 2.15, bear the legend regarding transfer restrictions applicable to the
Physical Notes set forth in Exhibit A.
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(f) On or prior to the 40th-day after the later of the commencement
of the offering of the Notes represented by the Regulation S Global Note and the
issue date of such Notes (such period through and including such 40th day, the
"Restricted Period"), a beneficial interest in a Regulation S Global Note may be
transferred to a Person who takes delivery in the form of an interest in the
corresponding Restricted Global Note only upon receipt by the Trustee of a
written certification from the transferor to the effect that such transfer is
being made (i)(a) to a Person whom the transferor reasonably believes is a QIB
in a transaction meeting the requirements of Rule 144A or (b) pursuant to
another exemption from the registration requirements under the Securities Act
which is accompanied by an opinion of counsel regarding the availability of such
exemption and (ii) in accordance with all applicable securities laws of any
state of the United States or any other jurisdiction.
(g) Beneficial interests in the Restricted Global Note may be
transferred to a Person who takes delivery in the form of an interest in the
Regulation S Global Note, whether before or after the expiration of the
Restricted Period, only if the transferor first delivers to the Trustee a
written certificate to the effect that such transfer is being made in accordance
with Rule 903 or 904 of Regulation S or Rule 144 (if available) and that, if
such transfer occurs prior to the expiration of the Restricted Period, the
interest transferred will be held immediately thereafter through Euroclear or
CEDEL.
(h) Any beneficial interest in one of the Global Notes that is
transferred to a Person who takes delivery in the form of an interest in another
Global Note shall, upon transfer, cease to be an interest in such Global Note
and become an interest in such other Global Note and, accordingly, shall
thereafter be subject to all
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transfer restrictions and other procedures applicable to beneficial interests in
such other Global Note for as long as it remains such an interest.
(i) The holder of any Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a holder is entitled
to take under this Indenture or the Notes.
Section 2.15. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors and
Non-U.S. Persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Note constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to any
Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note constituting a
Restricted Security, whether or not such Note bears the Private Placement
Legend, if (x) the requested transfer is after March 20, 1999 or (y) in the case
of a transfer to an Institutional Accredited Investor which is not a QIB
(excluding non-U.S. Persons), the proposed transferee has delivered to the
Registrar a certificate substantially in the form of Exhibit D hereto or (2)in
the case of a transfer to a Non-U.S. Person (including a QIB), the proposed
transferor has delivered to the Registrar a certificate substantially in the
form of Exhibit E hereto; and
(ii) if the proposed transferor is an Agent Member holding a beneficial
interest in a Global Note, upon receipt by the Registrar of (x) the certificate,
if any, required by paragraph (i) above; and (y) instructions
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given in accordance with the Depository's and the Registrar's procedures,
whereupon (a) the Registrar shall reflect on its books and records the date; and
(if the transfer does not involve a transfer of outstanding Physical Notes) a
decrease in the principal amount of a Global Note in an amount equal to the
principal amount of the beneficial interest in a Global Note to be transferred;
and (b) the Company shall execute and the Trustee shall authenticate and make
available for delivery one or more Physical Notes of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Note constituting a
Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is being
made by a proposed transferor who has checked the box provided for on the form
of Note stating, or has otherwise advised the Company and the Registrar in
writing, that the sale has been made in compliance with the provisions of Rule
144A to a transferee who has signed the certification provided for on the form
of Note stating, or has otherwise advised the Company and the Registrar in
writing, that it is purchasing the Note for its own account or an account with
respect to which it exercises sole investment discretion and that it and any
such account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon its foregoing
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representations in order to claim the exemption from registration provided by
Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to be
transferred consist of Physical Notes which after transfer are to be evidenced
by an interest in the Global Note, upon receipt by the Registrar of instructions
given in accordance with the Depository's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an increase in the
principal amount of the Global Note in an amount equal to the principal amount
of the Physical Notes to be transferred, and the Trustee shall cancel the
Physical Notes so transferred.
(c) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless (i) the circumstances contemplated by paragraph (a)(i)(x) of this Section
2.15 exist; (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act or (iii)
such Note has been sold pursuant to an effective registration statement under
the Securities Act.
(d) General. By its acceptance of any Note bearing the Private
Placement Legend, each holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private
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Placement Legend and agrees that it will transfer such Note only as provided in
this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.14 or this Section 2.15.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable notice to the Registrar.
ARTICLE 3
OPTIONAL REDEMPTION
Section 3.01. Notices to Trustee.
In the event the Company elects to redeem Notes pursuant to the
optional redemption provisions of Section 3.07 hereof, it will notify the
Trustee in writing, at least 15 days but not more than 60 days before mailing of
a notice of a redemption date, of the redemption date and the principal amount
of Notes to be redeemed.
Section 3.02. Selection of Notes To Be Redeemed.
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(a) In the event less than all of the Notes are to be redeemed, the
Trustee will select the Notes to be redeemed pro rata or by lot or by any other
method the Trustee deems fair and appropriate but only in integral multiples of
$1,000. The particular Notes to be redeemed will be selected, unless otherwise
provided herein, not less than 20 nor more than 60 days prior to the redemption
date by the Trustee from the outstanding Notes not previously called for
redemption.
(b) The Trustee will promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed but not in integral
multiples of less than $1,000. Provisions of this Indenture that apply to Notes
called for redemption also apply to portions of Notes called for redemption.
Section 3.03. Notices to Holders.
(a) At least 15 days but not more than 60 days before a redemption
date, the Company will mail a notice to each Holder whose Notes are to be
redeemed.
(b) The notice will identify the Notes to be redeemed and will
state:
(i) the redemption date;
(ii) the redemption price;
(iii) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date, upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion will be issued;
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(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered to the Paying
Agent at the address specified in such notice to collect the redemption price;
(vi) that, unless the Company defaults in making the redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
redemption date;
(vii) the paragraph of the Notes pursuant to which the Notes are being
redeemed;
(viii) the aggregate principal amount of Notes that are being redeemed;
and
(ix) the information required to be included in such notice pursuant to
Section 2.13 hereof, if applicable.
(c) At the Company's written request, the Trustee will give the
notice required in this Section 3.03 in the Company's name and at its expense.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Notes called for redemption
become due and payable on the redemption date at the redemption price and,
subject to Section 3.05(b) hereof, interest on such Notes ceases to accrue on
and after the redemption date.
Section 3.05. Deposit of Redemption Price.
(a) At least one Business Day prior to the redemption date, the
Company will deposit with the Trustee or with the Paying Agent money sufficient
to pay the
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redemption price of, and accrued and previously unpaid interest on, all Notes to
be redeemed on that date, and the Trustee will remit the redemption price to
Holders entitled thereto. Subject to Section 9.03 hereof, the Trustee or the
Paying Agent will return to the Company any money not required for that purpose.
(b) If the Company complies with Section 3.05(a) hereof, interest on
the Notes or portions thereof to be redeemed (whether or not such Notes are
presented for payment) will cease to accrue on the applicable redemption date.
If any Note called for redemption is not so paid upon surrender because of the
failure of the Company to comply with Section 3.05(a) hereof, then interest will
be paid on the unpaid principal from the redemption date until such principal is
paid and on any interest not paid on such unpaid principal, in each case, at the
rate provided in the Notes and in Section 4.01(b) hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company will
issue and the Trustee will authenticate and, for so long as a Subsidiary
Guarantee of a Subsidiary Guarantor shall be in effect in accordance with this
Indenture and such Subsidiary Guarantee, such Subsidiary Guarantor shall endorse
its respective Subsidiary Guarantee thereon for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
Section 3.07. Optional Redemption.
The Company may redeem all or any portion of the Notes at any time
and from time to time on or after April 1, 2003 at the following redemption
prices (expressed in
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percentages of the principal amount thereof) together, in each case, with
accrued and unpaid interest to the date fixed for redemption, if redeemed during
the 12-month period beginning on April 1 of each year indicated below:
Year Percentage
---- ----------
2003 104.438%
2004 102.958%
2005 101.479%
2006 and thereafter 100.000%
In addition, on or prior to April 1, 2001, the Company may, at its
option, redeem up to 35% of the outstanding Notes with the net proceeds of an
Equity Offering at 108.875% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date fixed for redemption; provided that at
least $65 million principal amount of the Notes remain outstanding after such
redemption.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
(a) The Company will pay the principal of, and interest on, the
Notes on the dates and in the manner provided herein and in the Notes. In the
event the
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Company is not the Paying Agent, principal and interest will be considered paid
on the date due if the Trustee or Paying Agent holds on that date money
deposited by the Company designated for and sufficient to pay all principal and
interest then due. In the event the Company or any of its Subsidiaries is the
Paying Agent, principal and interest will be considered paid on the date actual
payment is mailed to the Holders entitled to such payments.
(b) The Company will pay interest on overdue principal at the rate
equal to 1% per annum in excess of the per annum interest rate on the Notes to
the extent lawful; the Company shall pay interest on overdue installments of
interest at the same rate as is payable on overdue principal to the extent
lawful.
Section 4.02. Maintenance of Office or Agency.
(a) Pursuant to the provisions of Section 2.03 hereof, the Company
will maintain, in New York, New York, an office or agency (which may be an
office of the Trustee or the Registrar) where Notes and the Subsidiary
Guarantees may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company or any Subsidiary Guarantor in
respect of the Notes, the Subsidiary Guarantees and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company fails to maintain any such required office or agency or fails
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
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(b) The Company may also from time to time designate one or more
other offices or agencies where the Notes and the Subsidiary Guarantees may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission will in any manner relieve the Company of its obligation to maintain
an office or agency in New York, New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
(c) The Company hereby designates the corporate trust office of the
Trustee set forth in Section 12.02 as such office of the Company.
Section 4.03. SEC Reports; Financial Statements.
(a) As long as the Notes are outstanding, whether or not the Company
or the Subsidiary Guarantors are subject to Section 13 or 15(d) of the Exchange
Act, the Company shall file or cause to be filed with the SEC the quarterly and
annual reports and information, documents and other reports with respect to the
Company and the Subsidiary Guarantors, if any, which the Company or the
Subsidiary Guarantors would have been required to file with the SEC pursuant to
such Sections 13 and 15(d) if the Company or the Subsidiary Guarantors were so
subject. Such documents are to be filed with the SEC on or prior to the
respective dates (the "Required Filing Dates") by which the Company would have
been required so to file such documents if the Company were so subject. The
Company shall also in any event (x) within 15 days after each Required Filing
Date deliver to the Trustee and mail to each Holder copies of the quarterly or
annual reports and of the information, documents and other reports with respect
to the Company and the Subsidiary
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Guarantors, if any, which the Company and the Subsidiary Guarantors would have
been required to file with the SEC pursuant to Sections 13 and 15(d) of the
Exchange Act if the Company or the Subsidiary Guarantors were subject to such
Sections and (y) if filing such documents by the Company with the SEC is not
permitted under the Exchange Act, promptly upon written request supply copies of
such documents to any prospective Holder.
(b) The Company and each Subsidiary Guarantor will also comply with
the other provisions of TIA ss. 314(a).
Section 4.04. Money for Security Payments To Be Held in Trust.
(a) In the event the Company or any Restricted Subsidiary will at
any time act as Paying Agent, it will, not less than one Business Day before
each due date of the principal of or interest on any of the Notes, segregate and
hold in trust for the benefit of the Holders entitled thereto a sum sufficient
to pay the principal or interest so becoming due until such sums will be paid to
such Persons or otherwise disposed of as herein provided, and will promptly
notify the Trustee of its action or failure to so act.
(b) In the event the Company or any Restricted Subsidiary is not
acting as Paying Agent, the Company will, not less than one Business Day before
each due date of the principal of or interest on any Notes, deposit with a
Paying Agent a sum in same day funds sufficient to pay the principal or interest
so becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal or interest, and, unless such Paying Agent is the
Trustee, the Company will promptly notify the Trustee of such action or any
failure to so act.
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(c) In the event the Company is not acting as Paying Agent, the
Company will cause each Paying Agent other than the Trustee to execute and
deliver to the Trustee an instrument in which such Paying Agent will agree with
the Trustee, subject to the provisions of this Section, that such Paying Agent
will:
(i) hold all sums held by it for the payment of the principal of or
interest on Notes in trust for the benefit of the Holders and the Trustee
entitled thereto until such sums will be paid to such Persons or otherwise
disposed of as herein provided;
(ii) give the Trustee notice of any Default by the Company in the making
of any payment of principal or interest on the Notes;
(iii) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(iv) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and disabilities of
such Paying Agent.
Section 4.05. Compliance Certificate.
(a) The Company will deliver to the Trustee, within 60 days after
the end of each of the first three fiscal quarters and within 120 days after the
end of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries has been made under
the supervision of the signing Officers with a view to determining whether the
Company and each of the Subsidiary Guarantors has kept, observed, performed and
fulfilled its obligations
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under this Indenture, and further stating, as to each such officer signing such
certificate, that, to the best of his knowledge, the Company and each of the
Subsidiary Guarantors has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which he may have knowledge and what action the Company and
each of the Subsidiary Guarantors is taking or proposes to take with respect
thereto). The first certificate to be delivered pursuant to this Section 4.05(a)
shall be for the fiscal quarter ending March 31, 1998.
(b) The Company will give prompt written notice to the Trustee of
the occurrence of any Default or Event of Default and any other development,
financial or otherwise, which might materially affect its business, properties
or affairs or the ability of the Company to perform its obligations hereunder.
Section 4.06. Corporate Existence, etc.
Subject to the provisions of Article 5 hereof, each of the Company
and each of the Subsidiary Guarantors will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and the rights (charter and statutory), licenses and franchises of the Company
and each of the Subsidiary Guarantors, except in such cases where a failure to
do so would not in the judgment of management of the Company have a material
adverse effect on the business, prospects, assets or financial condition of the
Company and its Restricted Subsidiaries taken as a whole and would not have a
materially adverse impact on the Holders as such.
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Section 4.07. Payment of Taxes and Other Claims.
The Company and each of the Subsidiary Guarantors will pay or
discharge or cause to be paid or discharged, before the same will become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary Guarantor, as the case may be, or
upon the income, profits or property of the Company or any Subsidiary Guarantor,
as the case may be, other than any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate provision has been made in
accordance with GAAP and (ii) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a Lien (other than a Permitted
Lien) upon the property of the Company or any Subsidiary Guarantor, as the case
may be, in each case except to the extent the failure to do so would not have,
in the judgment of management of the Company, a material adverse effect on the
Company and its Restricted Subsidiaries taken as a whole.
Section 4.08. Insurance.
The Company will maintain and will cause each of its Restricted
Subsidiaries to maintain (either in the name of the Company or in such
Restricted Subsidiary's own name) with third party insurance companies or
pursuant to self-insurance, (i) insurance on all their respective properties,
(ii) public liability insurance against claims for personal injury or death as a
result of the use of any products sold by it and (iii) insurance coverage
against other business risks, in each case, in at least such amounts and against
at least such other risks (and with such risk retention) as are usually and
prudently insured
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against in the same general area by companies engaged in the same or a similar
business.
Section 4.09. Stay, Extension and Usury Laws.
Each of the Company and each of the Subsidiary Guarantors covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the Company's or any Subsidiary Guarantor's
obligation to pay the Notes or the Subsidiary Guarantees and each of the Company
and each of the Subsidiary Guarantors (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law insofar as such
law applies to the Notes or the Subsidiary Guarantees, and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.10. Maintenance of Properties.
Each of the Company and the Subsidiary Guarantors will take
reasonable action to maintain in appropriate condition each of its principal
properties which in the judgment of management of the Company is essential to
the business operations of the Company and its Subsidiaries taken as a whole and
the loss of which would have a material adverse effect on the financial
condition of the Company and its Subsidiaries taken as a whole. Nothing
contained in this Section 4.10 will prevent or restrict the sale, abandonment or
other disposition of any property which management deems advisable.
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Section 4.11. Disposition of Proceeds of Asset Sales.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, make any Asset Sale unless (i) the
Company or the Restricted Subsidiary, as the case may be, receives consideration
at the time of such Asset Sale at least equal to the Fair Market Value for the
shares or assets sold or otherwise disposed of; provided that the aggregate Fair
Market Value of the consideration received from any Asset Sale that is not in
the form of cash or cash equivalents (in U.S. dollars or freely convertible into
U.S. dollars) will not, when aggregated with the Fair Market Value of all other
noncash consideration received by the Company and its Restricted Subsidiaries
from all previous Asset Sales since the date hereof that has not been converted
into cash or cash equivalents (in U.S. dollars or freely convertible into U.S.
dollars), exceed five percent of the Consolidated Tangible Net Assets of the
Company at the time of the Asset Sale under consideration, and (ii) the Company
will apply or will cause one or more of its Restricted Subsidiaries to apply an
amount equal to the aggregate Net Proceeds received by the Company or any
Restricted Subsidiary from all Asset Sales occurring subsequent to the date
hereof as follows: (A) to repay any outstanding Indebtedness of the Company that
is not subordinated to the Notes or other Indebtedness of the Company, or to the
payment of any Indebtedness of any Restricted Subsidiary that is not
subordinated to the Subsidiary Guarantee of such Restricted Subsidiary, in each
case within one year after such Asset Sale; or (B) to acquire properties and
assets that will be used in the businesses of the Company and its Restricted
Subsidiaries existing on the date of this Indenture within one year after such
Asset Sale, provided, however, that (x) in the case of applications contemplated
by clause (ii)(A) the payment of such Indebtedness will result in a permanent
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reduction in committed amounts, if any, under the Indebtedness repaid at least
equal to the amount of the payment made, (y) in the case of applications
contemplated by clause (ii)(B), the Board of Directors has, within such one year
period, adopted in good faith a resolution committing such Net Proceeds to such
use and (z) none of such Net Proceeds shall be used to make any Restricted
Payment. The amount of such Net Proceeds neither used to repay the Indebtedness
described above nor used or invested as set forth in the preceding sentence
constitutes "Excess Proceeds." Notwithstanding the above, any Asset Sale that is
subject to Section 5.01 hereof will not be subject to this Section 4.11 hereof.
(b) Notwithstanding Section 4.11(a) hereof, to the extent the
Company or any of its Restricted Subsidiaries receives securities or other
noncash property or assets as proceeds of an Asset Sale, the Company will not be
required to make any application of such noncash proceeds required by Section
4.11(a) hereof until it receives cash or cash equivalent proceeds from a sale,
repayment, exchange, redemption or retirement of or extraordinary dividend or
return of capital on such noncash property. Any amounts deferred pursuant to the
preceding sentence will be applied in accordance with Section 4.11(a) hereof
when cash or cash equivalent proceeds are thereafter received from a sale,
repayment, exchange, redemption or retirement of or extraordinary dividend or
return of capital on such noncash property.
(c) When the aggregate amount of Excess Proceeds equals $10,000,000
or more, the Company will so notify the Trustee in writing by delivery of an
Officers' Certificate and will offer to purchase from all Holders (an "Excess
Proceeds Offer"), and will purchase from Holders accepting such Excess Proceeds
Offer on the date fixed for the closing of such Excess Proceeds Offer (the
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"Asset Sale Offer Date"), the maximum principal amount (expressed as a multiple
of $1,000) of Notes plus accrued and unpaid interest thereon, if any, to the
Asset Sale Offer Date that may be purchased and paid, as the case may be, out of
the Excess Proceeds, at an offer price (the "Asset Sale Offer Price") in cash in
an amount equal to 100 percent of the principal amount thereof plus accrued and
unpaid interest, if any, to the Asset Sale Offer Date, in accordance with the
procedures set forth in this Section 4.11. To the extent that the aggregate
amount of Notes tendered pursuant to an Excess Proceeds Offer is less than the
Excess Proceeds relating thereto, then the Company may use such Excess Proceeds,
or a portion thereof, for general corporate purposes in the business of the
Company and its Restricted Subsidiaries existing on the date of this Indenture.
Upon completion of an Excess Proceeds offer, the amount of Excess Proceeds will
be reset at zero.
(d) Within 30 days after the date on which the amount of Excess
Proceeds equals $10,000,000 or more, the Company (with Notice to the Trustee) or
the Trustee at the Company's request (and at the expense of the Company) will
send or cause to be sent by first-class mail to all Persons who were Holders on
the date such Excess Proceeds equaled $10,000,000, at their respective addresses
appearing in the Security Register, a notice of such occurrence and of such
Holders' rights arising as a result thereof. Such notice will contain all
instructions and materials necessary to enable Holders to tender their Notes to
the Company. Such notice, which will govern the terms of the Excess Proceeds
Offer, will state:
(i) that the Excess Proceeds Offer is being made pursuant to this Section
4.11 and the length of time such Excess Proceeds Offer will remain open;
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(ii) that the Holder has the right to require the Company to repurchase
such Holder's Notes at the Asset Sale Offer Price;
(iii) that any Note not tendered will continue to accrue interest;
(iv) that any Note accepted for payment pursuant to the Excess Proceeds
Offer will cease to accrue interest on the Asset Sale Offer Date;
(v) that the Asset Sale Offer Date will be no earlier than 45 days nor
later than 60 days from the date such notice is mailed;
(vi) that Holders electing to have a Note purchased pursuant to any Excess
Proceeds Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, to
the Company, a depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice prior to termination of the Excess Proceeds
Offer;
(vii) that Holders will be entitled to withdraw their election if the
Company, depositary or Paying Agent, as the case may be, receives, not later
than the expiration of the Excess Proceeds Offer, or such longer period as may
be required by law, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing its
election to have the Note purchased;
(viii) that Holders whose Notes are purchased only in part will be issued
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered; and
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(ix) information concerning the details of the Excess Proceeds Offer and
the business of the Company which the Company in good faith believes will enable
such Holders to make an informed decision (which at a minimum will include (A)
the most recently filed Annual Report on Form 10-K (including audited
consolidated financial statements of the Company, the most recent subsequently
filed Quarterly Report on Form 10-Q and any Current Report on Form 8-K of the
Company filed subsequent to such Quarterly Report, other than Current Reports
describing Asset Sales otherwise described in the offering materials relating to
the Excess Proceeds Offer (or corresponding successor reports) (or in the event
the Company is not required to prepare any of the foregoing Forms, the
comparable information required pursuant to Section 4.03 hereof); provided that
the Company may at its option incorporate by reference any such filed reports in
the notice, (B) a description of material developments in the Company's business
subsequent to the date of the latest of such reports and (C) if material,
appropriate pro forma financial information.
(e) In the event the aggregate principal amount of Notes surrendered
by Holders together with accrued interest thereon exceeds the amount of Excess
Proceeds, the Company will select the Notes to be purchased on a pro rata basis
from all Notes so surrendered, with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, will be purchased. To the extent that the Excess
Proceeds remaining are less than $1,000, the Company may use such Excess
Proceeds for general corporate purposes. Holders whose Notes are purchased only
in part will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered.
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(f) Not later than one Business Day after the Asset Sale Offer Date
in connection with which the Excess Proceeds offer is being made, the Company
will (i) accept for payment Notes or portions thereof tendered pursuant to the
Excess Proceeds Offer (on a pro rata basis if required), (ii) deposit with the
Paying Agent money sufficient, in immediately available funds, to pay the
purchase price of all Notes or portions thereof so accepted and (iii) deliver to
the Paying Agent an Officers' Certificate identifying the Notes or portions
thereof accepted for payment by the Company. The Paying Agent will promptly mail
or deliver to Holders so accepted payment in an amount equal to the Asset Sale
Offer Price of the Notes purchased from each such Holder, and the Company will
execute and upon receipt of an Officers' Certificate of the Company the Trustee
will promptly authenticate and mail or deliver to such Holder a new Note equal
in principal amount to any unpurchased portion of the Note surrendered. Any
Notes not so accepted will be promptly mailed or delivered by the Paying Agent
at the Company's expense to the Holder thereof. The Company will publicly
announce the results of the Excess Proceeds Offer promptly after the Asset Sale
Offer Date. For purposes of this clause M, the Company will choose a Paying
Agent which will not be the Company or a Subsidiary thereof.
(g) Any Excess Proceeds Offer will be conducted by the Company in
compliance with applicable law, including, without limitation, Section 14(e) of
the Exchange Act and Rule 14e -1 thereunder, if applicable.
(h) Whenever Excess Proceeds are received by the Company, and prior
to the allocation of such Excess Proceeds pursuant to this Section 4.11, such
Excess Proceeds will be set aside by the Company in a separate account to be
held in trust for the benefit of the Holders; provided, however, that in the
event the Company
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will be unable to set aside such Excess Proceeds in a separate account because
of provisions of applicable law or of the Working Capital Facilities, the
Company will not be required to set aside such Excess Proceeds.
(i) Notwithstanding the foregoing, an Excess Proceeds Offer may be
made by one or more Restricted Subsidiaries in lieu of the Company.
Section 4.12. Limitations on Restricted Payments.
(a) The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, make any Restricted Payment, directly or indirectly,
after the date hereof if at the time of such Restricted Payment:
(i) the amount of such proposed Restricted Payment (the amount of such
Restricted Payment, if other than in cash, will be determined in good faith by a
majority of the disinterested members of the Board of Directors of the Company),
when added to the aggregate amount of all Restricted Payments declared or made
after the date hereof, exceeds the sum of: (1) $50,000,000 plus (2) 50 percent
of the Company's Consolidated Net Income accrued during the period (taken as a
single period) commencing January 1, 1998 and ending on the last day of the
fiscal quarter immediately preceding the fiscal quarter in which the Restricted
Payment is to occur (or, if such aggregate Consolidated Net Income is a deficit,
minus 100 percent of such aggregate deficit), plus (3) the net cash proceeds
derived from the issuance and sale of Capital Stock of the Company and its
Restricted Subsidiaries that is not Disqualified Stock (other than a sale to a
Subsidiary of the Company) after the date hereof, plus (4) 100 percent of the
principal amount of, or, if issued at a
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discount, the accreted value of, any Indebtedness of the Company or a Restricted
Subsidiary which is issued (other than to a Subsidiary of the Company) after the
date hereof that is converted into or exchanged for Capital Stock of the Company
that is not Disqualified Stock, plus (5) 100 percent of the aggregate amounts
received by the Company or any Restricted Subsidiary from the sale, disposition
or liquidation (including by way of dividends) of any Investment (other than to
any Subsidiary of the Company and other than to the extent sold, disposed of or
liquidated with recourse to the Company or any of its Subsidiaries or to any of
their respective properties or assets) but only to the extent (x) not included
in Section 4.12(a)(i)(2) above and (y) that the making of such Investment
constituted a permitted Restricted Investment, plus (6) 100 percent of the
principal amount of, or if issued at a discount the accreted value of, any
Indebtedness or other obligation that is the subject of a guarantee by the
Company which is released (other than due to a payment on such guarantee) after
the date hereof, but only to the extent that the granting of such guarantee
constituted a permitted Restricted Payment under the definition set forth in
Section 1.02 hereof; or
(ii) the Company would be unable to Incur $1.00 of additional Indebtedness
under the Consolidated Fixed Charge Coverage Ratio contained in the covenant set
forth in Section 4.13(a) hereof; or
(iii) a Default or Event of Default has occurred and is continuing or
occurs as a consequence thereof.
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(b) Notwithstanding the foregoing, the provisions of this Section
4.12 will not prevent: (i) the payment of any dividend within 60 days after the
date of declaration thereof if the payment thereof would have complied with the
limitations of this Indenture on the date of declaration, provided that (x) such
dividend will be deemed to have been paid as of its date of declaration for the
purposes of this Section 4.12 and (y) at the time of payment of such dividend no
other Default or Event of Default shall have occurred and be continuing or would
result therefrom; (ii) the retirement of shares of the Company's Capital Stock
or the Company's or a Restricted Subsidiary of the Company's Indebtedness for,
or out of the net proceeds of a substantially concurrent sale (other than a sale
to a Subsidiary of the Company) of, other shares of its Capital Stock (other
than Disqualified Stock), provided that the proceeds of any such sale will be
excluded in any computation made under Section 4.12(a)(i)(3) above; (iii) the
redemption, repurchase, defeasance or retirement for value of Indebtedness,
including premium, if any, with the proceeds of Refinancing Indebtedness; (iv)
payments or distributions pursuant to or in connection with a merger,
consolidation or transfer of assets that complies with the provisions of the
Indenture applicable to mergers, consolidations and transfers of all or
substantially all of the property and assets of the Company or any Subsidiary
Guarantor or (v) Investments in the Joint Venture Entity in an aggregate amount
not to exceed $6.0 million.
Section 4.13. Limitations on Additional Indebtedness.
(a) The Company will not, and will not cause or permit any of its
Subsidiaries, directly or indirectly, to, Incur any Indebtedness (other than
Indebtedness between the Company and its Restricted Subsidiaries which are
Wholly Owned Subsidiaries or among such Restricted Subsidiaries which are Wholly
Owned Subsidiaries) including Acquisition Indebtedness, unless, after giving
effect thereto and the application of the
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proceeds therefrom, either (i) the Company's Consolidated Fixed Charge Coverage
Ratio on the date thereof would be at least 2.0 to 1.0 or (ii) the ratio of
Indebtedness of the Company and the Restricted Subsidiaries to Consolidated
Tangible Net Worth is less than 2.25 to 1.
(b) Notwithstanding the foregoing, the provisions of this Indenture
will not prevent: (i) the Company from Incurring (A) Refinancing Indebtedness,
(B) Non-Recourse Indebtedness, (C) Indebtedness evidenced by the Notes issued on
the Issue Date or the Exchange Notes, (D) Indebtedness Incurred under Working
Capital Facilities not to exceed the greater of $75,000,000 or 15% of
Consolidated Tangible Assets; (ii) Unrestricted Subsidiaries from Incurring
Indebtedness; (iii) any Subsidiary Guarantee of Indebtedness of the Company
under the Notes; (iv) the Company and its Restricted Subsidiaries from Incurring
Indebtedness under any deposits made to secure performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, progress statements,
government contracts and other obligations of like nature (exclusive of the
obligation for the payment of borrowed money) and (v) the Company and its
Restricted Subsidiaries from guaranteeing Indebtedness of the Joint Venture
Entity in an amount not to exceed $6.0 million less the amount of all other
Investments made by the Company and its Restricted Subsidiaries in the Joint
Venture Entity, in each case Incurred in the ordinary course of business of the
Company or the Restricted Subsidiary.
(c) The Company shall not, and the Company will not cause or permit
any Subsidiary Guarantor that is a Restricted Subsidiary to, directly or
indirectly, in any event Incur any Indebtedness that purports to be by its terms
(or by the terms of any agreement governing such Indebtedness) subordinated to
any other Indebtedness of the Company or of such Subsidiary Guarantor, as the
case may be, unless such Indebtedness is also by its terms (or by the terms of
any agreement governing such
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Indebtedness) made expressly subordinated to the Notes or the Subsidiary
Guarantee of such Subsidiary Guarantor, as the case may be, to the same extent
and in the same manner as such Indebtedness is subordinated to such other
Indebtedness of the Company or such Subsidiary Guarantor, as the case may be.
(d) For purposes of determining compliance with this Section 4.13,
in the event an item of Indebtedness meets the criteria of more than one of the
types of Indebtedness described in this Section 4.13, the Company, in its sole
discretion, shall classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of such clauses.
Section 4.14. Restrictions on Restricted Subsidiary Indebtedness.
In addition to the limitations provided for under Section 4.13
hereof, the Company will not permit any Restricted Subsidiaries to, directly or
indirectly, Incur any additional Indebtedness after the date hereof other than:
(i) any guarantee of Indebtedness of the Company permitted to be Incurred under
this Indenture (other than Non-Recourse Indebtedness), (ii) Refinancing
Indebtedness, (iii) Non-Recourse Indebtedness, (iv) Acquisition Indebtedness not
to exceed $10,000,000 aggregate principal amount at any one time outstanding;
(v) Indebtedness to the Company for so long as held by the Company; provided
that such Indebtedness is subordinated to any Subsidiary Guarantee, (vi)
Indebtedness to another Restricted Subsidiary which is a Wholly Owned Subsidiary
so long as held by such Restricted Subsidiary; provided that such Indebtedness
is subordinated to any Subsidiary Guarantee, (vii) any Subsidiary Guarantee of
Indebtedness of the Company under the Notes and (viii) any deposits made to
secure performance of tenders, bids, leases, statutory obligations, surety and
appeal bonds, progress statements, government contracts, and other obligations
of like
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nature (exclusive of the obligation for the payment of borrowed money), in each
case Incurred in the ordinary course of business of the Restricted Subsidiary,
consistent with past practice.
Section 4.15. Limitations and Restrictions on Issuance of Capital Stock of
Restricted Subsidiaries.
The Company will not permit any Restricted Subsidiary to issue, or
permit to be outstanding at any time, Preferred Stock or any other Capital Stock
constituting Disqualified Stock other than any such Capital Stock issued to or
held by the Company or any Restricted Subsidiary of the Company which is a
Wholly Owned Subsidiary.
Section 4.16. Change of Control.
(a) Following the occurrence of any Change of Control, the Company
will so notify the Trustee in writing by delivery of an Officers' Certificate
and will offer to purchase (a "Change of Control Offer") from all Holders, and
will purchase from Holders accepting such Change of Control Offer on the date
fixed for the closing of such Change of Control Offer (the "Change of Control
Payment Date"), the outstanding principal amount of Notes at an offer price (the
"Change of Control Price") in cash in an amount equal to 101 percent of the
aggregate principal amount thereof plus accrued and unpaid interest, if any, to
the Change of Control Payment Date in accordance with the procedures set forth
in this Section 4.16.
(b) Within 30 days after the date on which a Change of Control
occurs, the Company (with Notice to the Trustee) or the Trustee at the Company's
request (and at the expense of the Company), will send or cause to be sent by
first class mail, postage prepaid, to all Persons who were Holders on the date
of the Change of Control at their respective addresses appearing in the Security
Register, a notice of such occurrence and of
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such Holders' rights arising as a result thereof. Such notice will contain all
instructions and materials necessary to enable Holders to tender their Notes to
the Company. Such notice, which will govern the terms of the Change of Control
Offer, will state:
(i) that the Change of Control Offer is being made pursuant to
Section 4.16(a) hereof and the length of time the Change of Control Offer
will remain open;
(ii) that the Holder has the right to require the Company to
repurchase such Holder's Notes at the Change of Control Price;
(iii) that any Note not tendered will continue to accrue interest;
(iv) that any Note accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest on the Change of Control
Payment Date;
(v) that the Change of Control Payment Date will be no earlier than
45 days nor later than 60 days from the date such notice is mailed;
(vi) that Holders electing to have a Note purchased pursuant to any
Change of Control Offer will be, required to surrender the Note, with the
form entitled "option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Company, a depositary, if appointed by the Company,
or a Paying Agent at the address specified in the notice prior to
termination of the Change of Control Offer;
(vii) that Holders will be entitled to withdraw their election if
the Company, depositary or Paying Agent, as the case may be, receives, not
later than the expiration
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of the Change of Control Offer, or such longer period as may be required
by law, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing its
election to have the Note purchased;
(viii) that Holders which elect to have their Notes purchased only
in part will be issued new Notes in a principal amount equal to the
unpurchased portion of the Notes surrendered;
(ix) information concerning the date and details of the Change of
Control and the business of the Company which the Company in good faith
believes will enable such Holders to make an informed decision (which at a
minimum will include (A) the most recently filed Annual Report on Form
10-K (including audited consolidated financial statements) of the Company,
the most recent subsequently filed Quarterly Report on Form 10-Q and any
Current Report on Form 8-K of the Company filed subsequent to such
Quarterly Report, other than Current Reports describing Asset Sales
otherwise described in the offering materials relating to the Change of
Control Offer (or corresponding successor reports) (or in the event the
Company is not required to prepare any of the foregoing Forms, the
comparable information required pursuant to Section 4.03 hereof); provided
that the Company may at its option incorporate by reference any such filed
reports in the notice, (B) a description of material developments in the
Company's business subsequent to the date of the latest of such reports,
and (C) if material, appropriate pro forma financial information).
(c) In the event of a Change of Control Offer, the Company will only
be required to accept Notes in denominations of $1,000 or integral multiples
thereof.
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(d) Not later than one Business Day after the Change of Control
Payment Date in connection with which the Change of Control Offer is being made,
the Company will (i) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent
money sufficient, in immediately available funds, to pay the purchase price of
all Notes or portions thereof so accepted and (iii) deliver to the Paying Agent
an Officers' Certificate identifying the Notes or portions thereof accepted for
payment by the Company. The Paying Agent will promptly mail or deliver to
Holders of Notes so accepted payment in an amount equal to the Change of Control
Price of the Notes purchased from each such Holder, and the Company will execute
and, upon receipt of an Officers' Certificate of the Company, the Trustee will
promptly authenticate and mail or deliver to such Holder a new Note equal in
principal amount to any unpurchased portion of the Note surrendered. Any Notes
not so accepted will be promptly mailed or delivered by the Paying Agent at the
Company's expense to the Holder thereof. The Company will publicly announce the
results of the Change of Control Offer promptly after the Change of Control
Payment Date. For purposes of this Section 4.16(d), the Company will choose a
Paying Agent which will not be the Company or a Subsidiary thereof.
(e) Any Change of Control Offer will be conducted by the Company in
compliance with applicable law, including, without limitation, Section 14(e) of
the Exchange Act and Rule 14e-1 thereunder.
Section 4.17. Limitation on Transactions With Stockholders and Affiliates.
(a) The Company will not, and will not permit any of its
Subsidiaries to, make any Investment, loan, advance, guarantee or capital
contribution to or for the benefit of, or sell, lease, transfer or otherwise
dispose of any of its
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properties or assets to, or for the benefit of, or purchase or lease any
property or assets from, or enter into or amend any contract, agreement or
understanding with, or for the benefit of, (i) any Affiliate of the Company or
any Affiliate of the Company's Subsidiaries or (ii) any Person (or any Affiliate
of such Person) holding 10 percent or more of the Common Equity of the Company
or any of its Subsidiaries (each an "Affiliate Transaction"), except on terms
that are no less favorable to the Company or the relevant Subsidiary, as the
case may be, than those that could have been obtained in a comparable
transaction on an arm's length basis from a Person that is not an Affiliate.
(b) The Company will not, and will not permit any of its
Subsidiaries to, enter into any Affiliate Transaction involving or having a
value of more than $1,000,000, unless, in each case, such Affiliate Transaction
has been approved by a majority of the disinterested members of the Company's
Board of Directors.
(c) The Company will not, and will not permit any of its
Subsidiaries to, enter into an Affiliate Transaction involving or having a value
of more than $5,000,000 unless the Company has delivered to the Trustee an
opinion of an Independent Financial Advisor to the effect that the transaction
is fair to the Company or the relevant Subsidiary, as the case may be, from a
financial point of view.
(d) Notwithstanding the foregoing, an Affiliate Transaction will not
include (i) any contract, agreement or understanding with, or for the benefit
of, or plan for the benefit of, employees of the Company or its Subsidiaries (in
their capacity as such) that has been approved by the Company's Board of
Directors, (ii) Capital Stock issuances to members of the Board of Directors,
officers and employees, of the Company or its Subsidiaries pursuant to plans
approved by the stockholders of the Company, (iii) any Restricted Payment
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otherwise permitted under Section 4.12 hereof, (iv) any transaction between the
Company and a Restricted Subsidiary or a Restricted Subsidiary and another
Restricted Subsidiary, (v) any transaction pursuant to the tax sharing
agreement, the agreement with Beazer Homes Ltd. regarding use of name and the
cross indemnity agreement, in each case with the Company's former parent or
affiliates, as such agreements are in effect on the date of the Indenture, or
(vi) any transactions pursuant to the joint venture agreement with the Joint
Venture Entity, as such agreement is in effect on the date hereof.
Section 4.18. Limitations on Liens.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens, other than
Permitted Liens, on any of its or their assets, property, income or profits
therefrom unless contemporaneously therewith or prior thereto all payments due
hereunder and under the Notes are secured on an equal and ratable basis with the
obligation or liability so secured until such time as such obligation or
liability is no longer secured by a Lien.
(b) The Company will not create or suffer to exist on any
Indebtedness from the Company in favor of any Restricted Subsidiary any Lien and
such Indebtedness will not be sold, disposed of or otherwise transferred.
Section 4.19. Limitations on Restrictions on Distributions from Restricted
Subsidiaries.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, assume or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions on
its Capital Stock or any other interest or participation in,
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or measured by, its profits, owned by the Company or any of its other Restricted
Subsidiaries, or pay interest on or principal of any Indebtedness owed to the
Company or any of its other Restricted Subsidiaries, (ii) make loans or advances
to the Company or any of its other Restricted Subsidiaries, or (iii) transfer
any of its properties or assets to the Company or any of its other Restricted
Subsidiaries, except for encumbrances or restrictions existing under or by
reason of (a) applicable law, (b) covenants or restrictions contained in the
agreements evidencing Existing Indebtedness as in effect on the date hereof, (c)
any restrictions or encumbrances arising under Acquisition Indebtedness;
provided, that such encumbrance or restriction applies only to the obligor on
such Indebtedness and its Subsidiaries and that such Acquisition Indebtedness
was not incurred by the Company or any of its Subsidiaries or by the Person
being acquired in connection with or in anticipation of such acquisition, (d)
any restrictions or encumbrances arising in connection with Refinancing
Indebtedness; provided that any restrictions and encumbrances of the type
described in this clause (d) that arise under such Refinancing Indebtedness are
not more restrictive than those under the agreement creating or evidencing the
Indebtedness being refunded, refinanced, replaced or extended, (e) any agreement
restricting the sale or other disposition of property securing Indebtedness
permitted by this Indenture if such agreement does not expressly restrict the
ability of a Subsidiary of the Company to pay dividends or make loans or
advances, and (f) reasonable and customary borrowing base covenants set forth in
agreements evidencing Indebtedness otherwise permitted by this Indenture, which
covenants restrict or limit the distribution of revenues or sale proceeds from
real estate or a real estate project based upon the amount of indebtedness
outstanding on such real estate or real estate project and the value of some or
all of the remaining real estate or the project's remaining assets, and
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of the Company or any of its Restricted Subsidiaries.
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Section 4.20. Maintenance of Consolidated Tangible Net Worth.
(a) In the event the Consolidated Tangible Net Worth of the Company
is less than $85,000,000 at the end of any two consecutive fiscal quarters (the
last day of the second fiscal quarter being referred to herein as the
"Deficiency Date"), within 30 days after the end of each such period, the
Company will so notify the Trustee in writing by delivery of an Officers'
Certificate and will offer to purchase from all Holders (a "Net Worth Offer"),
and will purchase from Holders accepting such Net Worth Offer on the date fixed
for the closing of such Net Worth Offer (the "Net Worth Offer Date"), 10 percent
of the original outstanding principal amount of the Notes (the "Net Worth
Amount") at an offer price (the "Net Worth Offer Price") in cash in an amount
equal to 100 percent of the aggregate principal amount thereof plus accrued and
unpaid interest, if any, to the Net Worth Offer Date, in accordance with the
procedures set forth in this Section 4.20. To the extent that the aggregate
amount of Notes tendered pursuant to a Net Worth Offer is less than the Net
Worth Amount relating thereto, then the Company may use the excess of the Net
Worth Amount over the amount of Notes tendered, or a portion thereof, for
general corporate purposes. In no event shall the Company's failure to meet the
Consolidated Tangible Net Worth threshold at the end of any fiscal quarter be
counted toward the making of more than one Net Worth Offer. The Company may
reduce the principal amount of Notes to be purchased pursuant to the Net Worth
Offer by subtracting 100% of the principal amount (excluding premium) of Notes
acquired by the Company or any Wholly Owned Subsidiary subsequent to the
Deficiency Date and surrendered for cancellation through purchase, redemption
(other than pursuant to this Section 4.20) or exchange, and that were not
previously used as a credit against any obligation to repurchase Notes pursuant
to this Section 4.20.
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(b) In the event the Consolidated Tangible Net Worth of the Company
is less than $85,000,000 at the end of any two consecutive fiscal quarters,
within 30 days after the end of such period, the Company (with notice to the
Trustee) or the Trustee at the Company's request (and at the expense of the
Company) will send or cause to be sent by first-class mail, postage pre-paid, to
all Persons who were Holders on the date of the end of the second such
consecutive fiscal quarter, at their respective addresses appearing in the
Security Register, a notice of such occurrence and of each Holder's rights
arising as a result thereof. Such notice will contain all instructions and
materials necessary to enable Holders to tender their Notes to the Company. Such
notice, which will govern the terms of the Net Worth Offer, will state:
(i) that the Net Worth Offer is being made pursuant to Section
4.20(a) hereof and the length of time such Net Worth Offer will remain
open;
(ii) that the Holder has the right to require the Company to
repurchase such Holder's Notes at the Net Worth Offer Price;
(iii) that any Note not tendered will continue to accrue interest;
(iv) that any Note accepted for payment pursuant to the Net Worth
Offer will cease to accrue interest on the Net Worth Offer Date;
(v) that the Net Worth Offer Date will be no earlier than 45 days
nor later than 60 days from the date such notice is mailed;
(vi) that Holders electing to have a Note purchased pursuant to any
Net Worth Offer will be required to surrender the Note, with the form
entitled "Option of
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Holder to Elect Purchase" on the reverse of the Note completed, to the
Company, a depositary, if appointed by the Company, or a Paying Agent at
the address specified in the notice prior to termination of the Net Worth
Offer;
(vii) that Holders will be entitled to withdraw their election if
the Company, depositary or Paying Agent, as the case may be, receives, not
later than the expiration of the Net Worth Offer, or such longer period as
may be required by law, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Note the Holder delivered for the purchase and a statement that such
Holder is withdrawing its election to have the Note purchased;
(viii) that Holders whose Notes are purchased only in part will be
issued Notes equal in principal amount to the unpurchased portion of the
Notes surrendered; and
(ix) information concerning the period and details of the events
requiring the Net Worth Offer and the business of the Company which the
Company in good faith believes will enable such Holders to make an
informed decision (which at a minimum will include (A) the most recently
filed Annual Report on Form 10-K (including audited consolidated financial
statements) of the Company, the most recent subsequently filed Quarterly
Report on Form 10-Q and any Current Report on Form 8-K of the Company
filed subsequent to such Quarterly Report, other than Current Reports
describing Asset Sales otherwise described in the offering materials
relating to the Net Worth Offer (or corresponding successor reports) (or
in the event the Company is not required to prepare any of the foregoing
Forms, the comparable information required pursuant to Section 4.03
hereof); provided that the Company may, at its option, incorporate by
reference any such filed reports in the notice, (B) a description of
material
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developments in the Company's business subsequent to the date of the
latest of such reports, and (C) if material, appropriate pro forma
financial information).
(c) In the event that the aggregate principal amount of Notes
surrendered by Holders exceeds the Net Worth Amount, the Company will select the
Notes to be purchased on a pro rata basis from all Notes so surrendered, with
such adjustments as may be deemed appropriate by the Company so that only Notes
in denominations of $1,000, or integral multiples thereof, will be purchased. To
the extent that the Net Worth Amount remaining is less than $1,000, the Company
may use such Net Worth Amount for general corporate purposes. Holders whose
Notes are purchased only in part will be issued new Notes equal in principal
amount to the unpurchased portion of the Notes surrendered.
(d) Not later than one Business Day after the Net Worth Offer Date
in connection with which the Net Worth Offer is being made, the Company will (i)
accept for payment Notes or portions thereof tendered pursuant to the Net Worth
offer (on a pro rata basis if required pursuant to Section 4.20(c) above), (ii)
deposit with the Paying Agent money sufficient, in immediately available funds,
to pay the purchase price of all Notes or portions thereof so accepted and (iii)
deliver to the Paying Agent an Officers' Certificate identifying the Notes or
portions thereof accepted for payment by the Company. The Paying Agent will
promptly mail or deliver to Holders of Notes so accepted payment in an amount
equal to the Net Worth Offer Price of the Notes purchased from each such Holder,
and the Company will execute and the Trustee will promptly authenticate and mail
or deliver to such Holder a new Note equal in principal amount to any
unpurchased portion of the Note surrendered. Any Notes not so accepted will be
promptly mailed or delivered by the Paying Agent at the Company's expense to the
Holder thereof. The Company will publicly announce the results of the Net Worth
Offer promptly after the Net Worth
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Offer Date. For purposes of this Section 4.20(d), the Company will choose a
Paying Agent which will not be the Company or a Subsidiary thereof.
(e) Any Net Worth Offer will be conducted by the Company in
compliance with applicable law, including, without limitation, Section 14(e) of
the Exchange Act and Rule 14e-1 thereunder, if applicable.
Section 4.21. Subsidiary Guarantees.
After the date hereof, the Company will cause each of its
Subsidiaries that is or becomes a Restricted Subsidiary (other than, in the
Company's discretion, any Restricted Subsidiary the assets of which have a book
value of not more than $5,000,000 to be a Subsidiary Guarantor hereunder in
accordance with the provisions of Section 11.03 hereof. The Company may, in its
discretion, cause any Unrestricted Subsidiary to become a Subsidiary Guarantor
hereunder in the same manner.
ARTICLE 5
SUCCESSORS
Section 5.01. Limitations on Mergers and Consolidations.
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(a) Neither the Company nor any Subsidiary Guarantor will
consolidate or merge with or into, or sell, lease, convey or otherwise dispose
of all or substantially all of its assets (including, without limitation, by way
of liquidation or dissolution), or assign any of its obligations hereunder,
under the Notes or under the Subsidiary Guarantees (as an entirety or
substantially in one transaction or series of related transactions), to any
Person or permit any of its Restricted Subsidiaries to do any of the foregoing
(in each case other than with the Company or another Wholly Owned Restricted
Subsidiary) unless: (i) the Person formed by or surviving such consolidation or
merger (if other than the Company or such Subsidiary Guarantor, as the case may
be), or to which such sale, lease, conveyance or other disposition or assignment
will be made (collectively, the "Successor"), is a solvent corporation or other
legal entity organized and existing under the laws of the United States or any
state thereof or the District of Columbia, and the Successor assumes by
supplemental indenture in a form reasonably satisfactory to the Trustee all of
the obligations of the Company or such Subsidiary Guarantor, as the case may be,
under the Notes or such Subsidiary Guarantor's Subsidiary Guarantee, as the case
may be, and this Indenture, (ii) immediately after giving effect to such
transaction, no Default or Event of Default has occurred and is continuing,
(iii) immediately after giving effect to such transaction and the use of any net
proceeds therefrom, on a pro forma basis, the Consolidated Tangible Net Worth of
the Company or the Successor (in the case of a transaction involving the
Company), as the case may be, would be at least equal to the Consolidated
Tangible Net Worth of the Company immediately prior to such transaction, and
(iv) immediately after giving effect to such transaction and the use of any net
proceeds therefrom, on a pro forma basis, the Consolidated Fixed Charge Coverage
Ratio of the Company or the Successor (in the case of a transaction involving
the Company), as the case may be, would be such that the Company or the
Successor (in the case of a transaction involving the Company), as the case may
be, would
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be entitled to Incur at least $1.00 of additional Indebtedness under such
Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.13 hereof.
The foregoing provisions shall not apply to a transaction involving the
consolidation or merger of a Subsidiary Guarantor with or into another person,
or the sale, lease, conveyance or other disposition of all or substantially all
of the assets of such Subsidiary Guarantor, that results in such Subsidiary
Guarantor being released from its Subsidiary Guarantee as provided under Section
11.04 hereof.
(b) The Company or any Subsidiary Guarantor, as the case may be,
will deliver to the Trustee prior to the consummation of the proposed
transaction an Officers' Certificate to the foregoing effect and an opinion of
Counsel stating that the proposed transaction and such supplemental indenture
comply with this Indenture.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company or
any assignment of its obligations under this Indenture or the Notes in
accordance with Section 5.01 hereof, upon assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of the due and punctual payment of the
principal of, premium, if any, and interest on all of the Notes and the due and
punctual performance and observance of all the covenants and conditions of this
Indenture to be performed or observed by the Company, the Successor formed by
such consolidation or into or with which the Company is merged or to which such
sale, lease, conveyance or other disposition or assignment is made will succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such Successor has been
named as the Company
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herein and such Successor may cause to be signed and may issue in its own name
or in the name of the Company, any or all Notes issuable hereunder and the
predecessor Company, in the case of a sale, lease, conveyance or other
disposition or assignment, will be released from all obligations under this
Indenture and the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
(a) "Event of Default," wherever used herein, means any of the
following events (whatever the reason for such Event of Default and whether it
will be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) the failure by the Company to pay interest on any Note when the
same becomes due and payable and the continuance of any such failure for a
period of 30 days;
(ii) the failure by the Company to pay the principal or premium of
any Note when the same becomes due and payable at maturity, upon
acceleration or otherwise (including the failure to make payment pursuant
to a Change of Control Offer, a Net Worth Offer or an Excess Proceeds
Offer);
(iii) the failure by the Company or any of its Subsidiaries to
comply with any of its agreements or covenants in, or provisions of, the
Notes, the Subsidiary
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Guarantees or this Indenture and such failure continues for the period and
after the notice specified below;
(iv) the acceleration of any Indebtedness (other than Non-Recourse
Indebtedness) of the Company or any of its Subsidiaries that has an
outstanding principal amount of $3,000,000 or more in the aggregate;
(v) the failure by the Company or any of its Subsidiaries to make
any principal or interest payment in respect of Indebtedness (other than
Non-Recourse Indebtedness) of the Company or any of its Subsidiaries with
an outstanding aggregate amount of $3,000,000 or more within five days of
such principal or interest payment becoming due and payable (after giving
effect to any applicable grace period set forth in the documents governing
such Indebtedness);
(vi) a final judgment or judgments that exceed $3,000,000 or more in
the aggregate, for the payment of money, having been entered by a court or
courts of competent jurisdiction against the Company or any of its
Subsidiaries and such judgment or judgments is not satisfied, stayed,
annulled or rescinded within 60 days of being entered;
(vii) the Company or any Material Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
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(D) makes a general assignment for the benefit of its
creditors;
(viii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Material
Subsidiary as debtor in an involuntary case,
(B) appoints a Custodian of the Company or any Material
Subsidiary or a Custodian for all or substantially all of the
property of the Company or any Material Subsidiary, or
(C) orders the liquidation of the Company or any Material
Subsidiary and the order or decree remains unstayed and in effect
for 60 days; or
(ix) any Subsidiary Guarantee ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guarantee and
this Indenture) or is declared null and void and unenforceable or found to
be invalid or any Subsidiary Guarantor denies its liability under its
Subsidiary Guarantee (other than by reason of release of a Subsidiary
Guarantor from its Subsidiary Guarantee in accordance with the terms of
this Indenture and the Subsidiary Guarantee).
(b) The Trustee will not be deemed to know of a Default unless a
Trust Officer has actual knowledge of such Default or receives written notice of
such Default with specific reference to such Default.
(c) A Default under Section 6.01(a)(iii) hereof will not be deemed
an Event of Default until the Trustee notifies
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the Company, or the Holders of at least 25 percent in principal amount of the
then outstanding Notes notify the Company and the Trustee, of the Default and
the Company does not cure the Default within 60 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default." If such a Default is cured
within such time period, it ceases.
Section 6.02. Acceleration.
(a) If an Event of Default (other than an Event of Default with
respect to the Company specified in clause (vii) or (viii) of section 6.01(a)
hereof) shall have occurred and be continuing under this Indenture, the Trustee
by notice to the Company, or the Holders of at least 25 percent in principal
amount of the Notes then outstanding by notice to the Company and the Trustee,
may declare all Notes to be due and payable immediately. Upon such declaration
of acceleration, the amounts due and payable on the Notes, as determined in
Section 6.02(b) hereof, will be due and payable immediately. If an Event of
Default with respect to the Company specified in clause (vii) or (viii) of
Section 6.01(a) hereof occurs, such an amount will ipso facto become and be
immediately due and payable without any declaration, notice or other act on the
part of the Trustee and the Company or any Holder. The Holders of a majority in
principal amount of the Notes then outstanding by written notice to the Trustee
and the Company may waive such Default or Event of Default (other than any
Default or Event of Default in payment of principal or interest) on the Notes
under this Indenture. Holders of a majority in principal amount of the then
outstanding Notes may rescind an acceleration and its consequences (except an
acceleration due to nonpayment of principal or interest on the Notes) if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived.
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(b) In the event that the maturity of the Notes is accelerated
pursuant to Section 6.02(a) hereof, 100 percent of the principal amount of the
Notes (or, in the case of a default under Section 6.01(a)(ii) or (iii) hereof
resulting from a breach of the covenant set forth in Section 4.16 hereof, 101
percent of the principal amount of the Notes) will become due and payable plus
accrued interest, if any, to the date of payment.
Section 6.03. Other Remedies.
(a) If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal or interest on the Notes and the Subsidiary Guarantees or
to enforce the performance of any provision of the Notes or this Indenture.
(b) The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default will not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults and Compliance with Indenture Provisions.
Subject to Sections 6.07 and 10.02 hereof, the Holders of a majority
in principal amount of the then outstanding Notes by notice to the Trustee may
waive an existing Default or Event of Default and its consequences (including
waivers obtained in connection with a tender offer or exchange offer for Notes),
except a continuing Default or Event of Default in the payment of the principal
of or interest on any Note. Upon any such waiver, such Default will cease to
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exist, and any Event of Default arising therefrom will be deemed to have been
cured for every purpose of this Indenture, but no such waiver will extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture that the Trustee determines may be
unduly prejudicial to the rights of other Holders, or that may subject the
Trustee to legal liability; provided that the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction.
Section 6.06. Limitations on Suits.
(a) A Holder may pursue a remedy with respect to this Indenture, the
Subsidiary Guarantees or the Notes only if:
(i) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(ii) the Holder(s) of at least 25 percent in principal amount of the
then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(iii) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
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(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(v) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
(b) A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
Section 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal and interest on the Note,
on or after the respective due dates expressed in the Note, or, subject to
Section 6.06 hereof, to bring suit for the enforcement of any such payment on or
after such respective dates, will not be impaired or affected without the
consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a)(i) or
6.01(a)(ii) hereof occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express trust against the
Company or any Subsidiary Guarantor for the amount of principal and interest
remaining unpaid on the Notes or the Subsidiary Guarantees, as the case may be,
determined in accordance with Section 6.02 hereof, and such further amount as
will be sufficient to cover the costs and expenses of collection, including,
without limitation, the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
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Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including, without limitation, any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Holders allowed in any judicial proceedings relative to the
Company or any Subsidiary Guarantor, its creditors or property and will be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee consents to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. Nothing contained herein will be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Notes, the Subsidiary Guarantees or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 6.10. Priorities.
(a) In the event the Trustee collects any money pursuant to this
Article 6, it will pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07 hereof;
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SECOND: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
THIRD: to the Company or such other Person legally entitled thereto.
(b) The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant (other than the Trustee) in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a
suit by a Holder pursuant to Section 6.07 hereof, or a suit by Holders holding,
in the aggregate, more than ten percent in principal amount of the then
outstanding Notes.
Section 6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then, and in every such case, the Company, the
Subsidiary Guarantors, the Trustee and the Holders will,
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subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders will continue as though no such
proceeding has been instituted.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee will exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in such exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any such certificates or opinions which are
specifically required to be furnished to the Trustee by any of the
provisions hereof, the Trustee will examine the certificates and opinions
to
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determine whether or not, on their face, they appear to conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this Section 7.01(c) does not limit the effect of Section
7.01(b) hereof;
(ii) the Trustee will not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Trustee will not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
Whether or not therein expressly so provided, every provision of this Indenture
that in any way relates to the Trustee is subject to clauses (i), (ii) and (iii)
of this Section 7.01(c).
(d) No provision of this Indenture will require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it has reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) The Trustee will not be liable for interest on any money
received by it except as the Trustee may agree with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law. Subject to Section 7.03 hereof, all money received from
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the Trustee will, until applied as herein provided, be held in trust for the
payment of principal and interest on the Notes.
Section 7.02. Rights of Trustee.
Subject to Section 7.01 hereof:
(i) the Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts of matters as it may see fit, and, if the
Trustee determines to make such further inquiry or investigation, it will
be entitled to examine the books, records, and premises of the Company,
personally or by agent or attorney;
(ii) before the Trustee acts or refrains from acting, it may require
an Officers' Certificate, an Opinion of Counsel, or both. The Trustee will
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee
may consult with counsel satisfactory to it and the written advice of such
counsel or any Opinion of Counsel will be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(iii) the Trustee may act through agents and will not be responsible
for the misconduct or negligence of any agent appointed with due care;
provided, however, that the Trustee will in any event be liable for the
misappropriation of funds deposited with it or in an account within its
dominion and control;
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(iv) the Trustee will not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers conferred upon it by this Indenture; and
(v) unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company will be sufficient
if signed by an Officer of the Company.
(a) The Trustee will be under no obligation to exercise and may
refuse to exercise any of the rights or powers vested in it by this Indenture at
the request or direction, if any, of the Holders pursuant to this Indenture,
unless such Holders have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any of its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy
of this Indenture, any Subsidiary Guarantee or the Notes, it will not be
accountable for any actions taken by the Company or any action taken by the
Trustee hereunder at the direction of the Company or in reliance upon an Opinion
of Counsel, and it will not be responsible for any statement or recital herein
or any statement in the Notes or
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any Subsidiary Guarantee other than its certificate of authentication.
Section 7.05. Notice of Defaults.
(a) If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee will mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs. However, except in
the case of a Default or Event of Default in payment of principal or interest on
any Note or a breach of the Change of Control covenant, the Trustee may withhold
such notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interest of Holders.
Section 7.06. Reports by Trustee to Holders.
(a) Within 60 days after each May 15, beginning with May 15, 1998,
the Trustee will mail to Holders a brief report dated as of such reporting date
that complies with TIA ss. 313(a); provided, however, if no event described in
TIA ss. 313(a) has occurred within such calendar year, no report need be
transmitted. The Trustee also will comply with TIA S 313(b) and ss. 313(c).
(b) A copy of each report at the time of its mailing to Holders will
be filed with the SEC and each stock exchange, if any, on which the Notes are
listed. The Company will notify the Trustee when the Notes are listed on any
stock exchange.
Section 7.07. Compensation and Indemnity.
(a) The Company and each Subsidiary Guarantor, jointly and
severally, agree:
(i) to pay to the Trustee all reasonable compensation for all
services rendered by it hereunder
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(which compensation will not be limited by any provision of law in regard
to the compensation of a trustee of an express trust);
(ii) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including, without
limitation, the reasonable compensation and the expenses, advances and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(iii) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
(b) The Trustee shall notify the Company and each Subsidiary
Guarantor promptly of any claim for which it may seek indemnity. Neither, the
Company nor any Subsidiary Guarantor need pay for any settlement made without
its consent, which consent shall not be unreasonably withheld.
(c) To secure the Company's payment obligations in this Section
7.07, the Trustee will have a Lien prior to the Notes on all money or property
held or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes.
(d) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(a)(vii) or (a)(viii) occurs, the
expenses and the
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compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.08. Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee will become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign and be discharged from the trust hereby
created by so notifying the Company in writing. The Holders of a majority in
principal amount of the Notes then outstanding may remove the Trustee by so
notifying the Trustee and the Company. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10 hereof;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(iii) a Custodian or public officer takes charge of the Trustee or
its property; or
(iv) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company or any other obligor upon the
Notes will promptly appoint a successor Trustee.
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at
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least ten percent in principal amount of the then outstanding Notes may petition
any court of competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee fails to comply with Section 7.10 hereof, any
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee, subject to the Lien provided for in Section
7.07(c) hereof. Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 hereof will continue
for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
(a) Subject to Section 7.10 hereof, if the Trustee consolidates,
merges or converts into, or transfers all or substantially all of its corporate
trust business to, another corporation, the successor corporation without any
further act will be the successor Trustee; provided that in the case of a
transfer of all or substantially all of its corporate trust business to another
corporation, the transferee corporation expressly assumes all of the Trustee's
liabilities hereunder.
(b) In case any Notes have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating
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Trustee may adopt such authentication and deliver the Notes so authenticated,
with the same effect as if such successor Trustee had itself authenticated such
Notes.
Section 7.10. Eligibility; Disqualification.
(a) There will at all times be a Trustee hereunder which will (i) be
a corporation organized and doing business under the laws of the United States,
any state thereof or the District of Columbia, authorized under such laws to
exercise corporate trustee power, (ii) be subject to supervision or examination
by federal or state (or the District of Columbia) authority and (iii) have a
combined capital and surplus of at least $150 million as set forth in its most
recent published annual report of condition.
(b) This Indenture will always have a Trustee who satisfies the
requirements of TIA ss.ss. 310(a)(1) and 310(a)(2). The Trustee is subject to
TIA ss. 310(b). If at any time the Trustee ceases to be eligible in accordance
with the provisions of this Section 7.10, it will resign immediately in the
manner and with the effect specified in Section 7.08 hereof. The provisions of
TIA ss. 310 shall apply to the Company, as obligor of the securities.
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed will be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
HOLDERS' LISTS
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Section 8.01. Company To Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(i) semi-annually, not more than 15 days before each Interest
Payment Date, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of the record date of such
Interest Payment Date; and
(ii) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that if and so long as the Trustee will be the Registrar, no
such list need be furnished.
Section 8.02. Preservation of Information.
The Trustee will preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 8.01 hereof and the names
and addresses of Holders received by the Trustee in its capacity as Registrar or
Paying Agent (if so acting).
ARTICLE 9
DISCHARGE OF INDENTURE
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Section 9.01. Termination of Company and Subsidiary Guarantor Obligations.
(a) This Indenture shall cease to be of further effect (except that
the Company's and Subsidiary Guarantor's obligations under Section 7.07 hereof
and the Trustee's and Paying Agent's obligations under Section 9.03 hereof shall
survive) when all outstanding Notes theretofore authenticated and issued have
been delivered (other than destroyed, lost or stolen Notes that have been
replaced or paid) to the Trustee for cancellation and the Company has paid all
sums payable hereunder. In addition, the Company may elect to have either
paragraph (b) or paragraph (c) below be applied to the outstanding Notes upon
compliance with the conditions set forth in paragraph (d) below.
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b) and compliance with the conditions set forth in
paragraph (d), the Company and the Subsidiary Guarantors shall be deemed to have
been released and discharged from their respective obligations with respect to
the outstanding Notes and Subsidiary Guarantees on the date the conditions set
forth below are satisfied (hereinafter, "legal defeasance"). For this purpose,
such legal defeasance means that the Company and the Subsidiary Guarantors shall
be deemed to have paid and discharged the entire indebtedness represented by the
outstanding Notes and Subsidiary Guarantees, which shall thereafter be deemed to
be "outstanding" only for the purposes of the Sections of and matters under this
Indenture referred to in (i) and (ii) below, and to have satisfied all its other
obligations under such Notes, Subsidiary Guarantees and this Indenture insofar
as such Notes and Subsidiary Guarantees are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder:
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(i) the rights of Holders of outstanding Notes to receive solely from the trust
fund described in paragraph (d) below and as more fully set forth in such
paragraph, payments in respect of the principal of, premium, if any, and
interest on such Notes when such payments are due, (ii) the Company's and the
Subsidiary Guarantors' obligations with respect to such Notes under Sections
2.06, 2.07, 4.02 and 9.04, and, with respect to the Trustee, under Section 7.07,
(iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder
and (iv) this Section 9.01. Subject to compliance with this Section 9.01, the
Company may exercise its option under this paragraph (b) notwithstanding the
prior exercise of its option under paragraph (c) below with respect to the Notes
and the Subsidiary Guarantees.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c) and compliance with the conditions set forth in
paragraph (d), the Company and each Subsidiary Guarantor shall be released and
discharged, subject to Section 9.04, from its obligations under any covenant
contained in Article V and in Sections 4.03, 4.05 and 4.08 through 4.21 with
respect to the outstanding Notes and the Subsidiary Guarantees on and after the
date the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"), and the Notes and the Subsidiary Guarantees shall thereafter be
deemed to be not "outstanding" for the purpose of any direction, waiver, consent
or declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants but shall continue to be deemed "outstanding" for
all other purposes hereunder. For this purpose, such covenant defeasance means
that, with respect to the outstanding Notes, the Company and each Subsidiary
Guarantor may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision herein
or in any other
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document and such omission to comply shall not constitute a Default or an Event
of Default under Section 6.01, but, except as specified above, the remainder of
this Indenture and such Notes and Subsidiary Guarantees shall be unaffected
thereby.
(d) The following shall be the conditions to the application of
either paragraph (b) or (c) above to the outstanding Notes:
(1) the Company or any Subsidiary Guarantor shall have irrevocably
deposited in trust with the Trustee or, at the option of the Trustee, with
a trustee, satisfactory to the Trustee and the Company, under the terms of
an irrevocable trust agreement in form and substance satisfactory to the
Trustee, money or U.S. Government Obligations sufficient (without regard
to reinvestment of any interest thereon), in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay principal and
interest on the Notes to maturity or redemption, as the case may be, and
to pay all other sums payable by it hereunder as the same shall become
due; provided that (i) the trustee of the irrevocable trust shall have
been irrevocably instructed to pay such money or the proceeds of such U.S.
Government Obligations to the Trustee and (ii) the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to the payment of said principal and interest with
respect to the Notes;
(2) the Company shall have delivered to the Trustee an Officers'
Certificate stating that all conditions precedent provided for relating to
either the legal defeasance under paragraph (b) above or the covenant
defeasance under paragraph (c) above, as the case may be, have been
complied with;
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(3) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(4) such legal defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a Default or Event of Default
under, any other agreement or instrument to which the Company or any
Subsidiary Guarantor (so long as its Subsidiary Guarantee is in effect in
accordance with the Indenture and its Subsidiary Guarantee) is a party or
by which it is bound;
(5) in the case of an election under paragraph (b) above, the
Company shall have delivered to the Trustee an opinion of Counsel from
nationally recognized counsel acceptable to the Trustee stating that (x)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (y) since the date of this Indenture,
there has been a change in the applicable Federal income tax law, in
either case to the effect that the Holders of the outstanding Notes will
not recognize income, gain or loss for Federal income tax purposes as a
result of such legal defeasance and will be subject to Federal income tax
on the same amount and in the same manner and at the same time as would
have been the case if such legal defeasance had not occurred; and
(6) in the case of an election under paragraph (c) above, the
Company shall have delivered to the Trustee an opinion of Counsel from
nationally recognized counsel acceptable to the Trustee to the effect that
the Holders of the outstanding Notes will not recognize income, gain or
loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amount
and in the same manner and at the same time as would have been the case if
such covenant defeasance had not occurred.
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(e) After such irrevocable deposit made pursuant to this Section
9.01 and satisfaction of the other conditions set forth herein, the Trustee upon
request shall acknowledge in writing the discharge of the Company's and the
Subsidiary Guarantors' obligations under this Indenture, except for those
surviving obligations specified above.
In order to have money available on a payment date to pay principal
or interest on the Notes, the U.S. Government Obligations shall be payable as to
principal or interest on or before such payment date in such amounts as will
provide the necessary money. U.S. Government Obligations shall not be callable
at the issuer's option.
Section 9.02. Application of Trust Money.
The Trustee or a trustee satisfactory to the Trustee and the Company
will hold in trust money or U.S. Government Obligations deposited with it
pursuant to Section 9.01 hereof. It will apply the deposited money and the money
from U.S. Government Obligations through the Paying Agent and in accordance with
this Indenture to the payment of principal of and interest on the Notes.
Section 9.03. Repayment to Company.
(a) The Trustee and the Paying Agent will promptly pay to the
Company or any Subsidiary Guarantor, as the case may be, upon written request
any excess money or securities held by them at any time.
(b) The Trustee and the Paying Agent shall pay to the Company or any
Subsidiary Guarantor, as the case may be, upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years after the date upon which such payment shall have become due; provided,
however, that the Company shall have either caused
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notice of such payment to be mailed to each Holder entitled thereto no less than
30 days prior to such repayment or within such period shall have published such
notice in a financial newspaper of widespread circulation published in The City
of New York. After payment to the Company or any Subsidiary Guarantor, as the
case may be, Holders entitled to the money must look to the Company or any
Subsidiary Guarantor, as the case may be, for payment as general creditors
unless an applicable abandoned property law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
Section 9.04. Reinstatement.
In the event the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations in accordance with Section 9.01 hereof by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's and any Subsidiary Guarantors' obligations under
this Indenture, the Subsidiary Guarantees and the Notes will be revived and
reinstated as though no deposit had occurred pursuant to Section 9.01 hereof
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with Section 9.01 hereof;
provided, however, that if the Company or any Subsidiary Guarantor has made any
payment of interest on or principal of any Notes because of the reinstatement of
its obligations, the Company or any Subsidiary Guarantor, as the case may be,
will be subrogated to the rights of the Holders of such Notes to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 10
AMENDMENTS
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Section 10.01. Without Consent of Holders.
(a) The Company, the Subsidiary Guarantors and the Trustee may amend
this Indenture or the Notes or waive any provision hereof without the consent of
any Holder:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Notes in addition to certificated
Notes;
(iii) to make any change that does not, in the opinion of the
Trustee, adversely affect the legal rights hereunder of any Holder;
(iv) to comply with the qualification of this Indenture under the
TIA; or
(v) to reflect a Subsidiary Guarantor ceasing to be liable on the
Subsidiary Guarantees because it is no longer a Subsidiary of the Company.
(b) Upon the request of the Company, accompanied by a resolution of
the Board of Directors of the Company and each of the Subsidiary Guarantors
authorizing the execution of any supplemental indenture for one or more of the
purposes described in clause (a) of this Section 10.01, and upon receipt by the
Trustee of the documents described in Section 10.06 hereof, the Trustee will
join with the Company and the Subsidiary Guarantors in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture
and make any further appropriate agreements and stipulations that may be
contained therein. After an amendment or waiver under this Section 10.01 becomes
effective, the Company will mail to the Holders of each Note affected thereby a
notice describing the amendment or waiver. Any failure of
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the Company to mail such notice will not, however, affect the validity of any
such supplemental indenture.
Section 10.02. With Consent of Holders.
(a) Except as provided below in this Section 10.02, the Company, the
Subsidiary Guarantors and the Trustee may amend this Indenture, the Subsidiary
Guarantees or the Notes with the written consent (which may include consents
obtained in connection with a tender offer or exchange offer for Notes) of the
Holders of at least a majority in principal amount of the Notes then
outstanding.
(b) Upon the request of the Company and the Subsidiary Guarantors,
accompanied by the resolutions of their respective Boards of Directors
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of the Holders as aforesaid,
and upon receipt by the Trustee of the documents described in Section 10.06
hereof, the Trustee will join with the Company and the Subsidiary Guarantors in
the execution of such supplemental indenture.
(c) It will not be necessary for the consent of the Holders under
this Section 10.02 to approve the particular form of any proposed amendment or
waiver, but it will be sufficient if such consent approves the substance
thereof.
(d) The Holders of a majority in principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture, the Subsidiary Guarantees or the Notes
(including waivers obtained in connection with a tender offer or exchange offer
for Notes). However, without the consent of each Holder affected, an amendment
or waiver under this Section 10.02 may not:
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(i) reduce the amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
(ii) reduce the rate of or change the time for payment of interest
on any Note;
(iii) reduce the principal of or change the fixed maturity of any
Note or alter the provisions with respect to redemption under Section 3.07
hereof or with respect to mandatory offers to repurchase Notes pursuant to
Sections 4.11, 4.16 and 4.20 hereof;
(iv) make any Note payable in money other than that stated in the
Note;
(v) make any change in Section 6.04 or Section 6.07 hereof or in
this sentence of this Section 10.02;
(vi) modify the ranking or priority of the Notes or any Subsidiary
Guarantee;
(vii) release any Subsidiary Guarantor from any of its obligations
under its Subsidiary Guarantee or this Indenture otherwise than in
accordance with the terms hereof; or
(viii) waive a continuing Default or Event of Default in the payment
of principal of or interest on the Notes.
(e) The right of any Holder to participate in any consent required
or sought pursuant to any provision of this Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder has been the Holder of record of any
Notes with respect to which such consent is required or sought as of a date
identified by the Trustee in a notice
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furnished to Holders in accordance with the terms of this Indenture.
Section 10.03. Compliance with TIA.
Every amendment to this Indenture, the Subsidiary Guarantees or the
Notes will comply in form and substance with the TIA as then in effect.
Section 10.04. Revocation and Effect of Consents.
(a) until an amendment (which includes any supplement) or waiver
becomes effective, a consent to it by a Holder of a Note is a continuing consent
by the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder's Note, even if notation of the
consent is not made on any Note. However, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of a Note if the
Trustee receives written notice of revocation before the date the amendment or
waiver becomes effective. An amendment or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
(b) The Company may, but will not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment
or waiver. If the Company elects to fix a record date for such purpose, the
record date will be fixed at (i) the later of 30 days prior to the first
solicitation of such consent or the date of the most recent list of Holders
furnished to the Trustee prior to such solicitation pursuant to Section 8.02
hereof or (ii) such other date as the Company will designate. If a record date
is fixed, then notwithstanding the provisions of Section 10.04(a) hereof, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, will be entitled to consent to such amendment or waiver
or to revoke
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any consent previously given, whether or not such Persons continue to be Holders
after such record date. No consent will be valid or effective for more than 90
days after such record date unless consents from Holders of the principal amount
of Notes required hereunder for such amendment or waiver to be effective have
also been given and not revoked within such 90- day period.
(c) After an amendment or waiver becomes effective it will bind
every Holder, unless it is of the type described in any of clauses (i) through
(viii) of Section 10.02(d) hereof. In such case, the amendment or waiver will
bind each Holder of a Note who has consented to it and every subsequent Holder
of a Note that evidences the same debt as the consenting Holder's Note.
Section 10.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment or
waiver on any Note thereafter authenticated or on any Subsidiary Guarantee. The
Company in exchange for all Notes and Subsidiary Guarantees may issue, and the
Trustee will authenticate, new Notes and Subsidiary Guarantees that reflect the
amendment or waiver.
Section 10.06. Trustee To Sign Amendments, etc.
The Trustee will sign any amendment or supplemental indenture
authorized pursuant to this Article 10 if the amendment does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it does,
the trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplemental indenture, the Trustee will be entitled to receive
and, subject to Section 7.01 hereof, will be fully protected in relying upon, an
Officers' Certificate and an opinion of Counsel as conclusive evidence that such
amendment or supplemental indenture is authorized or
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permitted by this Indenture, that it is not inconsistent herewith, and that it
will be valid and binding upon the Company and the Subsidiary Guarantors in
accordance with its terms.
ARTICLE 11
GUARANTEE OF SECURITIES
Section 11.01. Subsidiary Guarantees of Notes.
Subject to the provisions of this Article 11, each Subsidiary
Guarantor hereby jointly and severally unconditionally guarantees to each Holder
of a Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes or the obligations of the Company or any other Subsidiary
Guarantors to the Holders or the Trustee hereunder or thereunder, that: (a) the
principal of, premium, if any, and interest on the Notes will be duly and
punctually paid in full when due, whether at maturity, by acceleration or
otherwise, and interest on the overdue principal and (to the extent permitted by
law) interest, if any, on the Notes and all other obligations of the Company or
the Subsidiary Guarantors to the Holders or the Trustee hereunder or thereunder
(including fees, expenses or other) and all other obligations with respect to
the Notes and the Indenture will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any Notes, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at maturity, by acceleration or otherwise. Failing payment when
due of any amount so guaranteed, or failing performance of any other obligation
of the Company to
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the Holders, for whatever reason, each Subsidiary Guarantor will be obligated to
pay, or to perform or cause the performance of, the same immediately. An Event
of Default under this Indenture or the Notes shall constitute an event of
default under this Subsidiary Guarantee, and shall entitle the Holders of Notes
to accelerate the obligations of the Subsidiary Guarantors hereunder in the same
manner and to the same extent as the obligations of the Company and the
Subsidiary Guarantors.
Each of the Subsidiary Guarantors hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any holder of the Notes with respect
to any provisions hereof or thereof, any release of any other Subsidiary
Guarantor, the recovery of any judgment against the Company, any action to
enforce the same, whether or not a Subsidiary Guarantee is affixed to any
particular Note, or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Subsidiary Guarantor. Each of the
Subsidiary Guarantors hereby waives the benefit of diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that its
Subsidiary Guarantee will not be discharged except by complete performance of
the obligations contained in the Notes, this Indenture and this Subsidiary
Guarantee. If any Holder or the Trustee is required by any court or otherwise to
return to the Company or to any Subsidiary Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to the Company or such
Subsidiary Guarantor, any amount paid by the Company or such Subsidiary
Guarantor to the Trustee or such Holder, this Subsidiary Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Subsidiary Guarantor further agrees
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that, as between it, on the one hand, and the Holders of Notes and the Trustee,
on the other hand, (a) subject to this Article 11, the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (b) in the event of any acceleration of such
obligations as provided in Article 6 hereof, such obligations (whether or not
due and payable) shall forthwith become due and payable by the Subsidiary
Guarantors for the purpose of this Subsidiary Guarantee.
This Subsidiary Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Company
for liquidation or reorganization, should the Company become insolvent or make
an assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Notes are,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee on the Notes, whether as a "voidable
preference," "fraudulent transfer" or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Subsidiary Guarantees
shall, to the fullest extent permitted by law, be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.
No stockholder, officer, director, employer or incorporator, past,
present or future, or any Subsidiary Guarantor, as such, shall have any personal
liability under this Subsidiary Guarantee by reason of his, her or its status
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as such stockholder, officer, director, employer or incorporator.
The Subsidiary Guarantors shall have the right to seek contribution
from any non-paying Subsidiary Guarantor so long as the exercise of such right
does not impair the rights of the Holders under this Subsidiary Guarantee.
Each Subsidiary Guarantor, and by its acceptance hereof each Holder,
hereby confirms that it is the intention of all such parties that the guarantee
by each Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute
a fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law. To effectuate the foregoing intention, the Holders
and each Subsidiary Guarantor hereby irrevocably agree that the obligations of
each Subsidiary Guarantor under the Subsidiary Guarantees shall be limited to
the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of each Subsidiary Guarantor, result in the obligations of
each Subsidiary Guarantor under the Subsidiary Guarantees not constituting such
fraudulent transfer or conveyance.
Section 11.02. Execution and Delivery of Subsidiary Guarantee.
To further evidence the Subsidiary Guarantee set forth in Section
11.01, each Subsidiary Guarantor hereby agrees that a notation of such
Subsidiary Guarantee, substantially in the form included in Exhibit A hereto,
shall be endorsed on each Note authenticated and delivered by the Trustee after
such Subsidiary Guarantee is executed and executed by either manual or facsimile
signature of an Officer of each Subsidiary Guarantor. The validity and
enforceability of any Subsidiary
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Guarantee shall not be affected by the fact that it is not affixed to any
particular Note.
Each of the Subsidiary Guarantors hereby agrees that its Subsidiary
Guarantee set forth in Section 11.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
If an Officer of a Subsidiary Guarantor whose signature is on this
Indenture or a Note no longer holds that office at the time the Trustee
authenticates such Note or at any time thereafter, such Subsidiary Guarantor's
Subsidiary Guarantee of such Note shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Subsidiary Guarantee set
forth in this Indenture on behalf of the Subsidiary Guarantor.
Section 11.03. Additional Subsidiary Guarantors.
Any Person may become a Subsidiary Guarantor by executing and
delivering to the Trustee (a) a supplemental indenture in form and substance
satisfactory to the Trustee which subjects such Person to the provisions of this
Indenture as a Subsidiary Guarantor, and (b) an opinion of Counsel to the effect
that such supplemental indenture has been duly authorized and executed by such
Person and constitutes the legal, valid, binding and enforceable obligation of
such Person (subject to such customary exceptions concerning fraudulent
conveyance laws, creditors' rights and equitable principles as may be acceptable
to the Trustee in its discretion).
Section 11.04. Release of a Subsidiary Guarantor.
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(a) Except in the case where the prohibition on transfer in Section
5.01 is applicable, if all or substantially all of the assets of any Subsidiary
Guarantor or all of the capital stock of any Subsidiary Guarantor is sold
(including by issuance or otherwise) by the Company or any of its Subsidiaries
in a transaction constituting an Asset Sale, and if the Net Proceeds from such
Asset Sale are used in accordance with Section 4.11, then such Subsidiary
Guarantor (in the event of a sale or other disposition of all of the capital
stock of such Subsidiary Guarantor) or the corporation acquiring such assets (in
the event of a sale or other disposition of all or substantially all of the
assets of such Subsidiary Guarantor) shall be deemed automatically and
unconditionally released and discharged from all obligations under this Article
11 without any further action required on the part of the Trustee or any Holder,
provided that each such Subsidiary Guarantor (or its assets) is sold or disposed
of in accordance with Section 4.11 and Article 5 hereof.
(b) The Trustee shall deliver an appropriate instrument evidencing
the release of a Subsidiary Guarantor upon receipt of a request of the Company
accompanied by an Officers' Certificate certifying as to the compliance with
this Section 11.04. Any Subsidiary Guarantor not so released or the entity
surviving such Subsidiary Guarantor, as applicable, will remain or be liable
under its Subsidiary Guarantee as provided in this Article 11.
The Trustee shall execute any documents reasonably requested by the
Company or a Subsidiary Guarantor in order to evidence the release of such
Subsidiary Guarantor from its obligations under its Subsidiary Guarantee
endorsed on the Notes and under this Article 11.
Except as set forth in Articles 4 and 5 hereof and this Section
11.04, nothing contained in this Indenture or in any of the Notes shall prevent
any consolidation or merger of a
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Subsidiary Guarantor with or into the Company or another Subsidiary Guarantor or
shall prevent any sale or conveyance of the property of a Subsidiary Guarantor
as an entirety or substantially as an entirety to the Company or another
Subsidiary Guarantor.
Section 11.05. Waiver of Subrogation.
Each Subsidiary Guarantor hereby irrevocably waives any claim or
other rights which it may now or hereafter acquire against the Company or any of
its Subsidiaries that arise from the existence, payment, performance or
enforcement of such Subsidiary Guarantor's obligations under this Subsidiary
Guarantee and this Indenture, including, without limitation, any right of
subrogation, reimbursement, exoneration, indemnification, and any right to
participate in any claim or remedy of any Holder of Notes against the Company or
any of its Subsidiaries, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law, including, without limitation,
the right to take or receive from the Company or any of its Subsidiaries,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim or other rights. If any
amount shall be paid to any Subsidiary Guarantor in violation of the preceding
sentence and the Notes shall not have been paid in full, such amount shall have
been deemed to have been paid to such Subsidiary Guarantor for the benefit of,
and held in trust for the benefit of, the Holders of the Notes, and shall
forthwith be paid to the Trustee for the benefit of such Holders to be credited
and applied upon the Notes, whether matured or unmatured, in accordance with the
terms of this Indenture. Each Subsidiary Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
11.05 is knowingly made in contemplation of such benefits.
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ARTICLE 12
MISCELLANEOUS
Section 12.01. TIA Controls.
(a) The provisions of TIA ss.ss. 310 through 317 that impose duties
on any Person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
(b) If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA ss. 318(c), the imposed duties will
control.
Section 12.02. Notices.
(a) Any notice or communication by the Company or any Subsidiary
Guarantor or by the Trustee to any party hereto is duly given if in writing and
delivered in person or mailed by first class mail (registered or certified,
return receipt requested), telecopier or overnight air courier guaranteeing next
day delivery, to such other party's address:
If to the Company or to the Subsidiary Guarantors:
Beazer Homes USA, Inc.
5775 Peachtree Dunwoody Road,
Suite C-550
Atlanta, Georgia 30342
Telecopier No.: (404) 250-3428
Attention: President
If to the Trustee:
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First Trust National Association
One Illinois Center
Mail Station IL1C3000
111 East Wacker Drive
Suite 3000
Chicago, Illinois 60601
Telecopier No.: (312) 228-9459
Attention: Corporate Trust Administration
If to the Trustee in the Borough of Manhattan:
First Trust of New York
100 Wall Street
20th Floor
New York, New York 10005
Telecopier No.: (212) 514-7431
Attention: Bond Drop Window
(b) The Company, any Subsidiary Guarantor or the Trustee, by notice
to the other parties hereto, may designate additional or different addresses for
subsequent notices or communications.
(c) All notices and communications will be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, if mailed; when receipt acknowledged, if
telecopied; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.
(d) Any notice or communication to a Holder will be mailed by
first-class, postage-prepaid mail, return receipt requested, to the Holder's
address shown on the register kept by the Registrar. Failure to mail a notice or
communication to a Holder or any defect in it will not affect its sufficiency
with respect to other Holders.
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(e) If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
(f) If the Company mails a notice or communication to Holders, it
will mail a copy to the Trustee and each Agent at the same time.
Section 12.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Indenture, the Subsidiary
Guarantees or the Notes. The Company, the Subsidiary Guarantors, the Trustee,
the Registrar and anyone else will have the protection of TIA ss. 312(c).
Section 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or any Subsidiary
Guarantor to the Trustee to take any action under this Indenture, the Company
and each Subsidiary Guarantor will furnish to the Trustee and the Trustee may
rely upon, as conclusive evidence:
(i) an Officers' Certificate (which will include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been complied with;
and
(ii) an opinion of Counsel (which will include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been complied
with.
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Section 12.05. Statements Required in Certificate or Opinion.
(a) Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss.ss. 314(a)(4)) will include:
(i) a statement that the Person making such certificate or opinion
has read such condition or covenant;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of such Person, such Person
has made such examination or investigation as is necessary to enable him
or her to express an informed opinion as to whether or not such condition
or covenant has been complied with; and
(iv) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
(b) Any Officers' Certificate may be based, insofar as it relates to
legal matters, upon an opinion of Counsel, unless such Officer knows that the
opinion with respect to the matters upon which his certificate may be based as
aforesaid is erroneous, or in the exercise of reasonable care should know that
the same is erroneous. Any Opinion of Counsel may be based, insofar as it
relates to factual matters, upon the certificate, statement or opinion of or
representations by an officer or officers of the Company or any Subsidiary
Guarantor, as the case may be, or other persons or firms deemed
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appropriate by such counsel, unless such counsel knows that the certificate,
statement or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous.
(c) Any Officers' Certificate, statement or Opinion of Counsel may
be based, insofar as it relates to accounting matters, upon a certificate or
opinion of or representation by an accountant (who may be an employee of the
Company), or firm of accountants, unless such Officer or counsel, as the case
may be, knows that the certificate or opinion or representation with respect to
the accounting matters upon which his certificate, statement or opinion may be
based as aforesaid is erroneous.
Section 12.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07. No Recourse Against Others.
No recourse for the payment of the principal of, premium, if any, or
interest on any of the Notes, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company or any Subsidiary Guarantor in this Indenture or in any
of the Notes or in any Subsidiary Guarantee or because of the creation of any
Indebtedness represented hereby, shall be had against any incorporator,
shareholder, officer, director, employee or controlling person of the Company,
any Subsidiary Guarantor or any successor Person thereof. Each Holder, by
accepting such Notes waives and releases all such liability.
Section 12.08. Governing Law.
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This Indenture, the Subsidiary Guarantees and the Notes will be
governed by and construed in accordance with the laws of the State of New York,
without regard to principles of conflicts of laws.
Section 12.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or a Subsidiary thereof. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture. This writing
constitutes the entire agreement of the parties with respect to the subject
matter hereof. Unless expressly otherwise indicated herein, an action or
transaction permitted by one provision hereof must nonetheless comply with all
other applicable provisions hereof; and any action or transaction not permitted
by any provision of this Indenture will not be permitted regardless of whether
any other provision hereof might permit such action or transaction.
Section 12.10. Successors.
All agreements of the Company and of the Subsidiary Guarantors in
this Indenture, the Subsidiary Guarantees and the Notes will bind their
respective successors. All agreements of the Trustee in this Indenture will bind
its successors.
Section 12.11. Severability.
In case any provision in this Indenture, the Subsidiary Guarantees
or in the Notes is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
Section 12.12. Counterpart Originals.
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The parties may sign any number of copies of this Indenture. Each
signed copy will be an original, but all of them together represent the same
agreement.
Section 12.13. Trustee as Paying Agent and Registrar.
The Company initially appoints the Trustee as Paying Agent and
Registrar.
Section 12.14. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and will in no way modify
or restrict any of the terms or provisions hereof.
Section 12.15. Benefits of Indenture.
Nothing in this Indenture or in the Notes or in the Subsidiary
Guarantees, express or implied, will give to any Person, other than the parties
hereto and their successors hereunder and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
Section 12.16. Acceptance of Trust.
First Trust National Association, the Trustee named herein, hereby
accepts the trusts in this Indenture declared and provided, upon the terms and
conditions hereinabove set forth.
Section 12.17. Treasury Notes.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, any Subsidiary
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of the Company or any Subsidiary Guarantor or any of their respective Affiliates
will be deemed to be not outstanding; provided that for the purpose of
determining whether the Trustee is protected in relying on any such direction,
waiver or consent, only Notes which the Trustee knows are so owned will be so
disregarded.
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IN WITNESS WHEREOF, the undersigned have duly executed this
Indenture as of the date first above written.
BEAZER HOME USA, INC.
By:*
---------------------------------
Name:
Title:
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By:/s/ H.H. Hall, Jr.
---------------------------------
Name: H.H. Hall, Jr.
Title: Vice President
GUARANTORS:
BEAZER HOMES CORP.
By:*
---------------------------------
BEAZER/SQUIRES REALTY, INC.
By:*
---------------------------------
BEAZER HOMES SALES ARIZONA INC.
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By:*
---------------------------------
BEAZER REALTY CORP.
By:*
---------------------------------
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PANITZ HOMES REALTY, INC.
By:*
---------------------------------
BEAZER MORTGAGE CORPORATION
By:*
---------------------------------
BEAZER HOMES HOLDINGS CORP.
By:*
---------------------------------
BEAZER HOMES TEXAS HOLDINGS, INC.
By:*
---------------------------------
BEAZER HOMES TEXAS, L.P.
By:*
---------------------------------
* Executed by David S. Weiss as an authorized officer of each of the Company
and the Guarantors.
EXHIBIT A
[Form of Face of Note]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY (1) BY ITS ACQUISITION HEREOF REPRESENTS THAT (A) IT
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY
EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT AND (2) IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE ISSUER THAT PRIOR TO THE DATE WHICH IS ONE YEAR
AFTER THE LATER OF THE DATE OF ORIGINAL ISSUANCE OF THIS NOTE AND THE LAST DATE
ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE
(THE "RESALE RESTRICTION TERMINATION DATE") (X) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (i)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION
A-1
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A PERSON THAT IS NOT A U.S. PERSON (AS DEFINED IN RULE 902
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE ISSUER SO REQUESTS), (ii) TO THE ISSUER OR (iii) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISICTION AND (Y) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN (X) ABOVE. THE FOREGOING RESTRICTIONS ON
RESALE WILL NOT APPLY SUBSEQUENT TO THE RESALE RESTRICTION TERMINATION DATE.
A-2
8 7/8% SENIOR NOTE DUE 2008
No. [ ] $____________
CUSIP No.
BEAZER HOMES USA, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars in accordance with paragraph 3 hereof.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Certificate of Authentication: Dated: March 25, 1998
This is to certify that this
Note is one of the Notes
described in the within mentioned
Indenture
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FIRST TRUST NATIONAL ASSOCIATION, BEAZER HOMES USA, INC.
as Trustee
By:
----------------------
Name:
Title:
By: By:
-------------------- ----------------------
Authorized Signature Name:
Title:
A-4
[Form of Reverse Side of Note]
8 7/8% SENIOR NOTE DUE 2008
1. Indenture. Beazer Homes USA, Inc., a Delaware corporation (the
"Company"), issued the Notes under an Indenture, dated as of March 25, 1998 (the
"Indenture"), among the Company, Beazer Homes Corp., Beazer/Squires Realty,
Inc., Beazer Homes Sales Arizona Inc., Beazer Realty Corp., Panitz Homes Realty,
Inc., Beazer Mortgage Corporation, Beazer Homes Holdings Corp., Beazer Homes
Texas Holdings, Inc. and Beazer Homes Texas, L.P. (collectively, the "Subsidiary
Guarantors") and First Trust National Association, as trustee (the "Trustee").
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended
(the "TIA"), as in effect on the date of execution of the Indenture. The Notes
are subject to all such terms, and Holders are referred to the Indenture and the
TIA for a statement of such terms. The Notes are general, unsecured, senior
obligations of the Company limited to $200,000,000 in aggregate principal
amount, plus amounts, if any, sufficient to pay interest on outstanding Notes as
set forth in paragraph 4 hereof; provided the principal amount of initial Notes
issued on the Issue Date was $100,000,000. Capitalized terms used but not
otherwise defined in this Note have the respective meanings ascribed to such
terms in the Indenture.
No reference herein to the Indenture and no provisions of this Note
or of the Indenture shall alter or impair the obligation of the Company or any
Subsidiary Guarantor, which, in each case, is absolute and unconditional, to pay
the principal of, premium, if any, and interest on this Note at the times,
place, and rate, and in the coin or currency, herein prescribed.
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2. Subsidiary Guarantee. This Note is entitled to the benefit of the
Subsidiary Guarantees of the Subsidiary Guarantors on a senior unsecured basis,
which Subsidiary Guarantees are subject to release. Reference is hereby made to
Article 11 of the Indenture and to the Subsidiary Guarantees endorsed on this
Note for a statement of the respective rights, limitations of rights, duties and
obligations thereunder of each of the Subsidiary Guarantors, the Trustee and the
Holders, and to the release of the Subsidiary Guarantees under specified
conditions.
3. Principal. The Company hereby promises to pay to the Holder of
this Note, subject to the provisions of paragraph 7 hereof, the principal amount
of this Note on April 1, 2008, or if such date is not a Business Day, on the
next succeeding Business Day.
4. Interest. The Company promises to pay interest on the outstanding
principal amount of this Note from the date this Note is issued until final
repayment of the outstanding principal amount at the rate of 8 7/8% per annum.
The Company will pay interest semi-annually on April 1 and October 1 of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date"). Interest on the Notes will accrue from
the most recent Interest Payment Date or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest will
accrue from each next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date will be October 1, 1998. The Company will pay
interest on overdue principal from time to time on demand at the rate of one
percent per annum in excess of the per annum interest rate; it shall pay
interest on overdue installments of interest (without regard to any
A-6
applicable grace periods) from time to time on demand at the same rate as is
payable on overdue principal to the extent lawful. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
5. Method of Payment. The Company will pay interest on the Notes to
the Persons who are registered Holders of Notes at the close of business on the
March 15 or September 15 (each, a "record date") next preceding the Interest
Payment Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date. The Holder must surrender this Note to a
Paying Agent to collect any principal payment. The Company will pay the
principal of, and interest on, the Notes in money of the United States that at
the time of payment is legal tender for payment of public and private debts. The
Company, however, may pay such amounts by check payable in such money. It may
mail a principal or interest check to a Holder's registered address.
6. Paying Agent and Registrar. Initially, First Trust National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-registrar
without notice to any Holder. Subject to the provisions of the Indenture, the
Company or any Restricted Subsidiary may act in any such capacity.
7. Optional Redemption. The Company may redeem all or any portion of
the Notes at any time and from time to time on or after April 1, 2003 and prior
to maturity at the following redemption prices (expressed in percentages of the
principal amount) together, in each case, with accrued and unpaid interest to
the date fixed for redemption if redeemed during the twelve-month period
beginning on April 1 of each year indicated below:
A-7
Year Percentage
---- ----------
2003 ................... 104.438%
2004 ................... 102.958%
2005 ................... 101.479%
2006 and thereafter .... 100.000%
In addition, on or prior to April 1, 2001, the Company may, at its
option, redeem up to 35% of the outstanding Notes with the net proceeds of an
Equity Offering at 108.875% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date fixed for redemption; provided that at
least $65 million principal amount of the Notes remain outstanding after such
redemption.
8. Notices of Redemption. Notice of redemption will be mailed at
least 15 days but not more than 60 days before the redemption date to each
Holder of Notes to be redeemed at such Holder's registered address. Subject to
the provisions of the Indenture, on and after the redemption date, interest
ceases to accrue on Notes or portions thereof called for redemption.
9. Mandatory Offers to Repurchase. Within 30 days after the
occurrence of any Change of Control, the Company will offer to purchase all
outstanding Notes at a purchase price equal to 101 percent of the aggregate
principal amount of the Notes, plus accrued and unpaid interest to the Change of
Control Payment Date.
Within 30 days after the date on which the aggregate amount of
Excess Proceeds (from an Asset Sale) equals at any time and from time to time
$10,000,000 or more, the Company will offer to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds at a purchase
price equal to 100 percent of the outstanding principal amount
A-8
thereof plus accrued and unpaid interest to the Asset Sale Offer Date.
Within 30 days after the end of any two consecutive fiscal quarters
during which the Consolidated Tangible Net Worth of the Company is at any time
and from time to time less than $85,000,000, the Company will offer to purchase
10 percent of the original outstanding principal amount of the Notes at a
purchase price equal to 100 percent of the original outstanding principal amount
thereof plus accrued and unpaid interest to the Net Worth Offer Date.
A Change of Control Offer, an Excess Proceeds Offer or a Net Worth
Offer will remain open for the period specified in the Indenture. Promptly after
the termination of a Change of Control Offer, an Excess Proceeds Offer or a Net
Worth Offer, subject to the terms of the Indenture, the Company will purchase,
and mail or deliver payment, for all Notes tendered and accepted pursuant to
such Offer.
A Holder may tender in response to a Change of Control Offer, an
Excess Proceeds Offer or a Net Worth Offer all or any portion of its Notes at
its discretion by completing the form entitled "OPTION OF HOLDER TO ELECT
PURCHASE" appearing on the reverse of this Note. Any portion of Notes tendered
must be an integral multiple of $1,000.
10. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not exchange or register the transfer of any Note or portion of a
A-9
Note selected for redemption. Also, it need not issue, exchange or register the
transfer of any Notes for a period of 15 Business Days before a selection of
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
11. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
12. Amendments and Waivers. Subject to certain exceptions, the
Indenture, the Subsidiary Guarantees or the Notes may be amended or supplemented
with the consent (which may include consents obtained in connection with a
tender offer or exchange offer for Notes) of the Holders of at least a majority
in principal amount of the Notes then outstanding, and any existing Default or
Event of Default under, or compliance with any provision of, the Indenture may
be waived (other than any continuing Default or Event of Default in the payment
of interest on or the principal of Notes) with the consent (which may include
consents obtained in connection with a tender offer or exchange offer for Notes)
of the Holders of a majority in principal amount of the Notes then outstanding.
Without the consent of any Holder, the Company, the Subsidiary Guarantors and
the Trustee may amend the Indenture or the Notes or waive any provision of the
Indenture to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to certificated Notes, to provide for the
assumption of the Company's obligations to Holders in the case of a merger or
acquisition, to make any change that does not adversely affect the legal rights
of any Holder, to comply with the qualification of the Indenture under the TIA
or to reflect a Subsidiary Guarantor ceasing to be liable on the Subsidiary
Guarantees because it is no longer a Subsidiary of the Company.
The right of any Holder to participate in any consent required or
sought pursuant to any provision of the Indenture
A-10
(and the obligation of the Company to obtain any such consent otherwise required
from such Holder) may be subject to the requirement that such Holder be the
Holder of record of any Notes with respect to which such consent is required or
sought as of a date identified by the Trustee in a notice furnished to Holders
in accordance with the terms of this Indenture.
Without the consent of each Holder affected, the Company may not (i)
reduce the rate of or change the time for payment of interest, including default
interest, on any Note, (ii) reduce the principal of or change the fixed maturity
of any Note or alter the provisions with respect to redemption under Section
3.07 of the Indenture or with respect to mandatory offers to purchase Notes
pursuant to Sections 4.11, 4.16 and 4.20 of the Indenture, (iii) make any Note
payable in money other than that stated in the Note, (iv) make any change to
Section 6.04, 6.07 or 10.02(d)(v) of the Indenture, (v) reduce the amount of
Notes whose Holders must consent to an amendment, supplement or waiver to the
Indenture, (vi) modify the ranking or priority of the Notes or any Subsidiary
Guarantee, (vii) release any Subsidiary Guarantor from any of its obligations
under its Subsidiary Guarantee or the Indenture otherwise than in accordance
with the Indenture or (viii) waive a continuing Default or Event of Default in
the payment of principal of or interest on the Notes.
13. Defaults and Remedies. Events of Default include: default in
payment of interest when due and payable and continuance thereof on the Notes
for 30 days; default in payment of principal, or premium, on the Notes when due
and payable at maturity, acceleration or otherwise; failure by the Company or
any of its Subsidiaries for 60 days after notice to comply with any of its
covenants or agreements in the Notes, the Subsidiary Guarantees or the
Indenture; acceleration of certain other Indebtedness of the Company or any of
its Subsidiaries; failure by the Company or any of its Subsidiaries
A-11
to pay certain Indebtedness when the same becomes due and payable; certain final
judgments that remain undischarged against the Company or any of its
Subsidiaries; certain events of bankruptcy or insolvency of the Company or its
Material Subsidiaries; and any Subsidiary Guarantee ceases to be in full force
and effect (other than in accordance with its terms) or is declared null and
void and unenforceable or found to be invalid or any Subsidiary Guarantor denies
liability under its Subsidiary Guarantee (other than by reason of release of a
Subsidiary Guarantor from its Subsidiary Guarantee). If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25 percent in
principal amount of the then outstanding Notes may declare all the Notes to be
immediately due and payable in an amount equal to 100 percent (or in the case of
Default under Section 6.01(a)(iii) of the Indenture resulting from a breach of
Section 4.16 of the Indenture, 101 percent) of the principal amount of the Notes
plus accrued and unpaid interest to the date of payment, except that in the case
of an Event of Default arising from certain events of bankruptcy or insolvency,
all outstanding Notes become due and payable immediately without any action or
notice. Holders may not enforce the Indenture or the Notes except as provided in
the Indenture. The Trustee will require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders of
a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests.
14. Trustee Dealings With Company. The Trustee, in its individual or
any other capacity, may become the owner or pledgee of Notes, and may otherwise
deal with the Company or any of its Affiliates with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights.
A-12
However, the Trustee is subject to Sections 7.10 and 7.11 of the Indenture.
15. No Recourse Against Others. No recourse for the payment of the
principal of, premium, if any, or interest on any of the Notes, or for any claim
based thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of the Company or any Subsidiary Guarantor in
the Indenture or in any of the Notes or in any Subsidiary Guarantee or because
of the creation of any Indebtedness represented thereby, shall be had against
any incorporator, shareholder, officer, director, employee or controlling person
of the Company, any Subsidiary Guarantor or any successor Person thereof. Each
Holder, by accepting such Notes waives and releases all such liability.
16. Authentication. The Note will not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose until
authenticated by the manual signature of the Trustee or an authenticating agent.
17. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
A-13
The Company will furnish to any Holder, upon written request and
without charge, a copy of the Indenture. Requests may be made to:
Beazer Homes USA, Inc.
5775 Peachtree Dunwoody Road,
Suite C-550
Atlanta, Georgia 30342
Attention: Secretary
A-14
SUBSIDIARY GUARANTEE
For value received, each of the undersigned hereby, jointly and
severally, unconditionally guarantees to the Holder of this Note the payments of
principal of, premium, if any, and interest on this Note in the amounts and at
the time when due and interest on the overdue principal, premium, if any, and
interest, if any, of this Note, if lawful, and the payment or performance of all
other obligations of the Company under the Indenture or the Notes, to the Holder
of this Note and the Trustee, all in accordance with and subject to the terms
and limitations of this Note, Article 11 of the Indenture and this Subsidiary
Guarantee. This Subsidiary Guarantee will become effective in accordance with
Article 11 of the Indenture and its terms shall be evidenced therein. The
validity and enforceability of any Subsidiary Guarantee shall not be affected by
the fact that it is not affixed to any particular Note.
The obligations of the undersigned to the Holders of Notes and to
the Trustee pursuant to the Subsidiary Guarantee and the Indenture are expressly
set forth in Article 11 of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Subsidiary Guarantee and all of the other
provisions of the Indenture to which this Subsidiary Guarantee relates.
A-15
This Subsidiary Guarantee is subject to release upon the terms set
forth in the Indenture.
BEAZER HOMES CORP.
BEAZER/SQUIRES REALTY, INC.
BEAZER HOMES SALES ARIZONA INC.
BEAZER REALTY CORP.
PANITZ HOMES REALTY, INC.
BEAZER MORTGAGE CORPORATION
BEAZER HOMES HOLDINGS CORP.
BEAZER HOMES TEXAS HOLDINGS, INC.
BEAZER HOMES TEXAS, L.P.,
By:
-------------------------
Name: David S. Weiss
Title: An Authorized
Officer of
Each of the
Subsidiary Guarantors
A-16
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.11, 4.16 or 4.20 of the Indenture, check the box below:
|_| Section 4.11 (Excess Proceeds Offer)
|_| Section 4.16 (Change of Control Offer)
|_| Section 4.20 (Net Worth Offer)
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.11, 4.16 or 4.20 of the Indenture, as applicable,
state the principal amount you elect to have purchased: $_________. Note: The
amount you elect to have purchased must be an integral multiple of $1,000.
Date: ___________________ Your signature _________________
(Sign exactly as
your name appears
on the Note)
Signature Subsidiary
Guarantee:
A-17
EXHIBIT B
FORM OF LEGEND FOR GLOBAL NOTES
Any Global Note authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS
NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE,
AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A
WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF
THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY
BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (A NEW YORK CORPORATION) (THE
"DEPOSITORY") TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS IS REQUESTED BY AN
B-1
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
B-2
EXHIBIT C-1
[FORM OF ASSIGNMENT FOR 144A NOTE]
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
[Check One]
[ ] (a) this Note is being transferred in compliance with the
exemption from registration under the Securities Act provided
by Rule 144A thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with
(a) above and documents are being furnished which comply with
the conditions of transfer set forth in this Note and the
Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.15 of the Indenture shall have been satisfied.
C-1-1
Date:__________________ Your Signature:______________________
--------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
Signature Subsidiary Guarantee:
--------------------------------
C-1-2
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: __________________ ____________________________
NOTICE: To be executed by
an executive officer
C-1-3
EXHIBIT C-2
[FORM OF ASSIGNMENT FOR 144A NOTE]
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
[Check One]
[ ] (a) this Note is being transferred in compliance with the
exemption from registration under the Securities Act provided
by Rule 144A thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with
(a) above and documents are being furnished which comply with
the conditions of transfer set forth in this Note and the
Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.15 of the Indenture shall have been satisfied.
Date:__________________ Your Signature:______________________
C-2-1
--------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
Signature Subsidiary Guarantee:
--------------------------------
C-2-2
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: __________________ ____________________________
NOTICE: To be executed by
an executive officer
C-2-3
EXHIBIT D
Form of Certificate to Be Delivered
in Connection with Transfers
to Non-QIB Accredited Investors
___________, _____
First Trust National Association
One Illinois Center
Mail Station IL1C3000
111 East Wacker Drive
Suite 3000
Chicago, IL 60601
Attention: Corporate Trust Department
Re: Beazer Homes USA, Inc.
8 7/8% Senior Notes due 2008
Dear Sirs:
We are delivering this letter in connection with a proposed purchase
of 8 7/8% Senior Notes due 2008 (the "Notes") of Beazer Homes USA, Inc. (the
"Company").
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1),(2),(3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are
accredited investors within the meaning of Rule 501(a)(1),(2),(3) or (7)
under the Securities Act (an "Institutional Accredited Investor");
(ii) any purchase of Notes by us will be for our own account or for
the account of one or more other Institutional Accredited Investors;
D-1
(iii) in the event that we purchase any Notes , we will acquire
Notes having a minimum purchase price of at least $100,000 for our own
account and for each separate account for which we are acting;
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing Notes;
(v) we are not acquiring Notes with a view to any distribution
thereof in a transaction that would violate the Securities Act or the
securities laws of any State of the United States or any other applicable
jurisdiction; provided that the disposition of our property and the
property of any accounts for which we are acting as fiduciary shall remain
at all times within our control; and
(vi) we acknowledge that we have had access to such financial and
other information, and have been afforded the opportunity to ask such
questions of representatives of the Company and receive answers thereto,
as we deem necessary in connection with our decision to purchase Notes.
We understand that the Notes are being offered in a transaction not
involving any public offering within the meaning of the Securities Act and
that the Notes have not been registered under the Securities Act, and we
agree, on our own behalf and on behalf of each account for which we
acquire any Notes, that such Notes may be offered, resold, pledged or
otherwise transferred only (i) to a person whom we reasonably believe to
be a qualified institutional buyer (as defined in Rule 144A under the
Securities Act), in a transaction meeting the requirements of Rule 144A,
in a transaction meeting the requirements of Rule 144, outside the United
States in a transaction meeting the requirements of Rule 904 under the
Securities Act, or in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion
of counsel if the Company so requests), (ii) to the Company or (iii)
pursuant to an effective registration statement, and, in each case, in
accordance with any applicable securities laws of any State of the United
States or any other applicable jurisdiction. We
D-2
understand that the registrar will not be required to accept for
registration of transfer of any Notes, except upon presentation of
evidence satisfactory to the Company that the foregoing restrictions on
transfer have been complied with. We further understand that the Notes
purchased by us will be in the form of definitive physical certificates
and that such certificates will bear a legend reflecting the substance of
this paragraph.
D-3
We acknowledge that you and others will rely upon our confirmations,
acknowledgments and agreements set forth herein, and we agree to notify you
promptly in writing if any of our representations or warranties herein ceases to
be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
-------------------------------
(Name of Purchaser)
By:
---------------------------
Name:
Title:
Address: --------------------------------
--------------------------------
--------------------------------
D-4
EXHIBIT E
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
___________, _____
First Trust National Association
One Illinois Center
Mail Station IL1C3000
111 East Wacker Drive
Suite 3000
Chicago, IL 60601
Attention: Corporate Trust Department
Re: Beazer Homes USA, Inc.
(the "Company") 8 7/8% Senior
Notes due 2008 (the "Notes")
Dear Sirs:
In connection with our proposed sale of $___________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
E-1
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
--------------------------
Authorized Signature
E-2
Exhibit 4.15
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A
DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER
THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (A NEW YORK CORPORATION) (THE "DEPOSITORY") TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY (1) BY ITS ACQUISITION HEREOF
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT AND (2) IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT PRIOR TO THE DATE
WHICH IS ONE YEAR AFTER THE LATER OF THE DATE OF ORIGINAL ISSUANCE OF THIS NOTE
AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS NOTE (THE "RESALE RESTRICTION TERMINATION DATE") (X) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A PERSON THAT IS NOT A U.S.
PERSON (AS DEFINED IN RULE 902 UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS),
(ii) TO THE ISSUER OR (iii)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISICTION AND (Y) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN (X) ABOVE. THE FOREGOING RESTRICTIONS ON
RESALE WILL NOT APPLY SUBSEQUENT TO THE RESALE RESTRICTION TERMINATION DATE.
8 7/8% SENIOR NOTE DUE 2008
No. 1 $100,000,000
CUSIP No. 07556Q AC 9
BEAZER HOMES USA, INC.
promises to pay to CEDE & CO.
or registered assigns,
the principal sum of ONE HUNDRED MILLION
Dollars in accordance with paragraph 3 hereof.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Certificate of Authentication: Dated: March 25, 1998
This is to certify that this
Note is one of the Notes
described in the within mentioned
Indenture
FIRST TRUST NATIONAL ASSOCIATION, BEAZER HOMES USA, INC.
as Trustee
By: /s/ Ian J. McCarthy
--------------------------
Name: Ian J. McCarthy
Title: President & CEO
By: /s/ H.H. Hall, Jr. By: /s/ David S. Weiss
-------------------------- --------------------------
Authorized Signature Name: David S. Weiss
Title: Executive Vice
President and
CFO
1
8 7/8% SENIOR NOTE DUE 2008
1. Indenture. Beazer Homes USA, Inc., a Delaware corporation (the
"Company"), issued the Notes under an Indenture, dated as of March 25, 1998 (the
"Indenture"), among the Company, Beazer Homes Corp., Beazer/Squires Realty,
Inc., Beazer Homes Sales Arizona Inc., Beazer Realty Corp., Panitz Homes Realty,
Inc., Beazer Mortgage Corporation, Beazer Homes Holdings Corp., Beazer Homes
Texas Holdings, Inc. and Beazer Homes Texas, L.P. (collectively, the "Subsidiary
Guarantors") and First Trust National Association, as trustee (the "Trustee").
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended
(the "TIA"), as in effect on the date of execution of the Indenture. The Notes
are subject to all such terms, and Holders are referred to the Indenture and the
TIA for a statement of such terms. The Notes are general, unsecured, senior
obligations of the Company limited to $200,000,000 in aggregate principal
amount, plus amounts, if any, sufficient to pay interest on outstanding Notes as
set forth in paragraph 4 hereof; provided the principal amount of initial Notes
issued on the Issue Date was $100,000,000. Capitalized terms used but not
otherwise defined in this Note have the respective meanings ascribed to such
terms in the Indenture.
No reference herein to the Indenture and no provisions of this Note or of
the Indenture shall alter or impair the obligation of the Company or any
Subsidiary Guarantor, which, in each case, is absolute and unconditional, to pay
the principal of, premium, if any, and interest on this Note at the times,
place, and rate, and in the coin or currency, herein prescribed.
2
2. Subsidiary Guarantee. This Note is entitled to the benefit of the
Subsidiary Guarantees of the Subsidiary Guarantors on a senior unsecured basis,
which Subsidiary Guarantees are subject to release. Reference is hereby made to
Article 11 of the Indenture and to the Subsidiary Guarantees endorsed on this
Note for a statement of the respective rights, limitations of rights, duties and
obligations thereunder of each of the Subsidiary Guarantors, the Trustee and the
Holders, and to the release of the Subsidiary Guarantees under specified
conditions.
3. Principal. The Company hereby promises to pay to the Holder of this
Note, subject to the provisions of paragraph 7 hereof, the principal amount of
this Note on April 1, 2008, or if such date is not a Business Day, on the next
succeeding Business Day.
4. Interest. The Company promises to pay interest on the outstanding
principal amount of this Note from the date this Note is issued until final
repayment of the outstanding principal amount at the rate of 8 7/8% per annum.
The Company will pay interest semi-annually on April 1 and October 1 of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date"). Interest on the Notes will accrue from
the most recent Interest Payment Date or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest will
accrue from each next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date will be October 1, 1998. The Company will pay
interest on overdue principal from time to time on demand at the rate of one
percent per annum in excess of the per annum interest rate;
3
it shall pay interest on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate as is
payable on overdue principal to the extent lawful. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
5. Method of Payment. The Company will pay interest on the Notes to the
Persons who are registered Holders of Notes at the close of business on the
March 15 or September 15 (each, a "record date") next preceding the Interest
Payment Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date. The Holder must surrender this Note to a
Paying Agent to collect any principal payment. The Company will pay the
principal of, and interest on, the Notes in money of the United States that at
the time of payment is legal tender for payment of public and private debts. The
Company, however, may pay such amounts by check payable in such money. It may
mail a principal or interest check to a Holder's registered address.
6. Paying Agent and Registrar. Initially, First Trust National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-registrar
without notice to any Holder. Subject to the provisions of the Indenture, the
Company or any Restricted Subsidiary may act in any such capacity.
7. Optional Redemption. The Company may redeem all or any portion of the
Notes at any time and from time to time on or after April 1, 2003 and prior to
maturity at the following redemption prices (expressed in percentages of the
principal amount) together, in each case, with accrued and unpaid interest to
the date fixed for
4
redemption if redeemed during the twelve-month period beginning on April 1 of
each year indicated below:
Year Percentage
- ---- ----------
2003............................ 104.438%
2004............................ 102.958%
2005............................ 101.479%
2006 and thereafter............. 100.000%
In addition, on or prior to April 1, 2001, the Company may, at its option,
redeem up to 35% of the outstanding Notes with the net proceeds of an Equity
Offering at 108.875% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date fixed for redemption; provided that at least $65
million principal amount of the Notes remain outstanding after such redemption.
8. Notices of Redemption. Notice of redemption will be mailed at least 15
days but not more than 60 days before the redemption date to each Holder of
Notes to be redeemed at such Holder's registered address. Subject to the
provisions of the Indenture, on and after the redemption date, interest ceases
to accrue on Notes or portions thereof called for redemption.
9. Mandatory Offers to Repurchase. Within 30 days after the occurrence of
any Change of Control, the Company will offer to purchase all outstanding Notes
at a purchase price equal to 101 percent of the aggregate principal amount of
the Notes, plus accrued and unpaid interest to the Change of Control Payment
Date.
Within 30 days after the date on which the aggregate amount of Excess
Proceeds (from an Asset Sale) equals at any time and from time to time
$10,000,000 or more, the Company
5
will offer to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds at a purchase price equal to 100 percent of
the outstanding principal amount thereof plus accrued and unpaid interest to the
Asset Sale Offer Date.
Within 30 days after the end of any two consecutive fiscal quarters during
which the Consolidated Tangible Net Worth of the Company is at any time and from
time to time less than $85,000,000, the Company will offer to purchase 10
percent of the original outstanding principal amount of the Notes at a purchase
price equal to 100 percent of the original outstanding principal amount thereof
plus accrued and unpaid interest to the Net Worth Offer Date.
A Change of Control Offer, an Excess Proceeds Offer or a Net Worth Offer
will remain open for the period specified in the Indenture. Promptly after the
termination of a Change of Control Offer, an Excess Proceeds Offer or a Net
Worth Offer, subject to the terms of the Indenture, the Company will purchase,
and mail or deliver payment, for all Notes tendered and accepted pursuant to
such Offer.
A Holder may tender in response to a Change of Control Offer, an Excess
Proceeds Offer or a Net Worth Offer all or any portion of its Notes at its
discretion by completing the form entitled "OPTION OF HOLDER TO ELECT PURCHASE"
appearing on the reverse of this Note. Any portion of Notes tendered must be an
integral multiple of $1,000.
10. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder,
6
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not exchange or register the transfer of any Note or portion of a
Note selected for redemption. Also, it need not issue, exchange or register the
transfer of any Notes for a period of 15 Business Days before a selection of
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
11. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
12. Amendments and Waivers. Subject to certain exceptions, the Indenture,
the Subsidiary Guarantees or the Notes may be amended or supplemented with the
consent (which may include consents obtained in connection with a tender offer
or exchange offer for Notes) of the Holders of at least a majority in principal
amount of the Notes then outstanding, and any existing Default or Event of
Default under, or compliance with any provision of, the Indenture may be waived
(other than any continuing Default or Event of Default in the payment of
interest on or the principal of Notes) with the consent (which may include
consents obtained in connection with a tender offer or exchange offer for Notes)
of the Holders of a majority in principal amount of the Notes then outstanding.
Without the consent of any Holder, the Company, the Subsidiary Guarantors and
the Trustee may amend the Indenture or the Notes or waive any provision of the
Indenture to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to certificated Notes, to provide for the
assumption of the Company's obligations to Holders in the case of a merger or
acquisition, to make any change that does not adversely affect the legal rights
of any Holder, to comply with the qualification of the Indenture under the TIA
or to reflect a
7
Subsidiary Guarantor ceasing to be liable on the Subsidiary Guarantees because
it is no longer a Subsidiary of the Company.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of the Indenture (and the obligation of the Company to
obtain any such consent otherwise required from such Holder) may be subject to
the requirement that such Holder be the Holder of record of any Notes with
respect to which such consent is required or sought as of a date identified by
the Trustee in a notice furnished to Holders in accordance with the terms of
this Indenture.
Without the consent of each Holder affected, the Company may not (i)
reduce the rate of or change the time for payment of interest, including default
interest, on any Note, (ii) reduce the principal of or change the fixed maturity
of any Note or alter the provisions with respect to redemption under Section
3.07 of the Indenture or with respect to mandatory offers to purchase Notes
pursuant to Sections 4.11, 4.16 and 4.20 of the Indenture, (iii) make any Note
payable in money other than that stated in the Note, (iv) make any change to
Section 6.04, 6.07 or 10.02(d)(v) of the Indenture, (v) reduce the amount of
Notes whose Holders must consent to an amendment, supplement or waiver to the
Indenture, (vi) modify the ranking or priority of the Notes or any Subsidiary
Guarantee, (vii) release any Subsidiary Guarantor from any of its obligations
under its Subsidiary Guarantee or the Indenture otherwise than in accordance
with the Indenture or (viii) waive a continuing Default or Event of Default in
the payment of principal of or interest on the Notes.
13. Defaults and Remedies. Events of Default include: default in payment
of interest when due and payable and continuance thereof on the Notes for 30
days; default in payment of principal, or premium, on the Notes when due and
8
payable at maturity, acceleration or otherwise; failure by the Company or any of
its Subsidiaries for 60 days after notice to comply with any of its covenants or
agreements in the Notes, the Subsidiary Guarantees or the Indenture;
acceleration of certain other Indebtedness of the Company or any of its
Subsidiaries; failure by the Company or any of its Subsidiaries to pay certain
Indebtedness when the same becomes due and payable; certain final judgments that
remain undischarged against the Company or any of its Subsidiaries; certain
events of bankruptcy or insolvency of the Company or its Material Subsidiaries;
and any Subsidiary Guarantee ceases to be in full force and effect (other than
in accordance with its terms) or is declared null and void and unenforceable or
found to be invalid or any Subsidiary Guarantor denies liability under its
Subsidiary Guarantee (other than by reason of release of a Subsidiary Guarantor
from its Subsidiary Guarantee). If an Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25 percent in principal amount of the
then outstanding Notes may declare all the Notes to be immediately due and
payable in an amount equal to 100 percent (or in the case of Default under
Section 6.01(a)(iii) of the Indenture resulting from a breach of Section 4.16 of
the Indenture, 101 percent) of the principal amount of the Notes plus accrued
and unpaid interest to the date of payment, except that in the case of an Event
of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes become due and payable immediately without any action or
notice. Holders may not enforce the Indenture or the Notes except as provided in
the Indenture. The Trustee will require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders of
a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default
9
in payment of principal or interest) if it determines that withholding notice is
in their interests.
14. Trustee Dealings With Company. The Trustee, in its individual or any
other capacity, may become the owner or pledgee of Notes, and may otherwise deal
with the Company or any of its Affiliates with the same rights it would have if
it were not Trustee. Any Agent may do the same with like rights. However, the
Trustee is subject to Sections 7.10 and 7.11 of the Indenture.
15. No Recourse Against Others. No recourse for the payment of the
principal of, premium, if any, or interest on any of the Notes, or for any claim
based thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of the Company or any Subsidiary Guarantor in
the Indenture or in any of the Notes or in any Subsidiary Guarantee or because
of the creation of any Indebtedness represented thereby, shall be had against
any incorporator, shareholder, officer, director, employee or controlling person
of the Company, any Subsidiary Guarantor or any successor Person thereof. Each
Holder, by accepting such Notes waives and releases all such liability.
16. Authentication. The Note will not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose until authenticated by the
manual signature of the Trustee or an authenticating agent.
17. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
10
The Company will furnish to any Holder, upon written request and without
charge, a copy of the Indenture. Requests may be made to:
Beazer Homes USA, Inc.
5775 Peachtree Dunwoody Road,
Suite C-550
Atlanta, Georgia 30342
Attention: Secretary
SUBSIDIARY GUARANTEE
For value received, each of the undersigned hereby, jointly and severally,
unconditionally guarantees to the Holder of this Note the payments of principal
of, premium, if any, and interest on this Note in the amounts and at the time
when due and interest on the overdue principal, premium, if any, and interest,
if any, of this Note, if lawful, and the payment or performance of all other
obligations of the Company under the Indenture or the Notes, to the Holder of
this Note and the Trustee, all in accordance with and subject to the terms and
limitations of this Note, Article 11 of the Indenture and this Subsidiary
Guarantee. This Subsidiary Guarantee will become effective in accordance with
Article 11 of the Indenture and its terms shall be evidenced therein. The
validity and enforceability of any Subsidiary Guarantee shall not be affected by
the fact that it is not affixed to any particular Note.
The obligations of the undersigned to the Holders of Notes and to the
Trustee pursuant to the Subsidiary Guarantee and the Indenture are expressly set
forth in Article 11 of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Subsidiary Guarantee and all of the other
provisions of the Indenture to which this Subsidiary Guarantee relates.
This Subsidiary Guarantee is subject to release upon the terms set forth
in the Indenture.
BEAZER HOMES CORP.
BEAZER/SQUIRES REALTY, INC.
BEAZER HOMES SALES ARIZONA INC.
BEAZER REALTY CORP.
PANITZ HOMES REALTY, INC.
BEAZER MORTGAGE CORPORATION
BEAZER HOMES HOLDINGS CORP.
BEAZER HOMES TEXAS HOLDINGS, INC.
BEAZER HOMES TEXAS, L.P.,
By: /s/ David S. Weiss
------------------------------
Name: David S. Weiss
Title: An Authorized
Officer of
Each of the
Subsidiary Guarantors
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.11, 4.16 or 4.20 of the Indenture, check the box below:
|_| Section 4.11 (Excess Proceeds Offer)
|_| Section 4.16 (Change of Control Offer)
|_| Section 4.20 (Net Worth Offer)
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.11, 4.16 or 4.20 of the Indenture, as applicable,
state the principal amount you elect to have purchased: $_________. Note: The
amount you elect to have purchased must be an integral multiple of $1,000.
Date: ___________________ Your signature _________________
(Sign exactly as
your name appears
on the Note)
Signature Subsidiary
Guarantee:
[FORM OF ASSIGNMENT FOR 144A NOTE]
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
________________________________________________________________________________
________________________________________________________________________________
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act provided by Rule 144A
thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.15 of the Indenture shall have been satisfied.
Date:__________________ Your Signature:______________________
--------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
Signature Subsidiary Guarantee:
--------------------------------
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: __________________ ____________________________
NOTICE: To be executed by
an executive officer
Exhibit 4.16
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A
DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER
THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (A NEW YORK CORPORATION) (THE "DEPOSITORY") TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
8 7/8% SENIOR NOTE DUE 2008
No. 1 $100,000,000
CUSIP No. 07556Q AD 7
BEAZER HOMES USA, INC.
promises to pay to CEDE & CO.
or registered assigns,
the principal sum of ONE HUNDRED MILLION
Dollars in accordance with paragraph 3 hereof.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Certificate of Authentication: Dated: May __, 1998
This is to certify that this
Note is one of the Notes
described in the within mentioned
Indenture
U.S. BANK TRUST NATIONAL BEAZER HOMES USA, INC.
ASSOCIATION, as Trustee
By:
----------------------
Name:
Title:
By:
----------------------
By: Name:
---------------------- Title:
Authorized Signature
1
8 7/8% SENIOR NOTE DUE 2008
1. Indenture. Beazer Homes USA, Inc., a Delaware corporation (the
"Company"), issued the Notes under an Indenture, dated as of March 25, 1998 (the
"Indenture"), among the Company, Beazer Homes Corp., Beazer/Squires Realty,
Inc., Beazer Homes Sales Arizona Inc., Beazer Realty Corp., Panitz Homes Realty,
Inc., Beazer Mortgage Corporation, Beazer Homes Holdings Corp., Beazer Homes
Texas Holdings, Inc. and Beazer Homes Texas, L.P. (collectively, the "Subsidiary
Guarantors") and First Trust National Association, as trustee (the "Trustee").
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended
(the "TIA"), as in effect on the date of execution of the Indenture. The Notes
are subject to all such terms, and Holders are referred to the Indenture and the
TIA for a statement of such terms. The Notes are general, unsecured, senior
obligations of the Company limited to $200,000,000 in aggregate principal
amount, plus amounts, if any, sufficient to pay interest on outstanding Notes as
set forth in paragraph 4 hereof; provided the principal amount of initial Notes
issued on the Issue Date was $100,000,000. Capitalized terms used but not
otherwise defined in this Note have the respective meanings ascribed to such
terms in the Indenture.
No reference herein to the Indenture and no provisions of this Note or of
the Indenture shall alter or impair the obligation of the Company or any
Subsidiary Guarantor, which, in each case, is absolute and unconditional, to pay
the principal of, premium, if any, and interest on this Note at the times,
place, and rate, and in the coin or currency, herein prescribed.
2
2. Subsidiary Guarantee. This Note is entitled to the benefit of the
Subsidiary Guarantees of the Subsidiary Guarantors on a senior unsecured basis,
which Subsidiary Guarantees are subject to release. Reference is hereby made to
Article 11 of the Indenture and to the Subsidiary Guarantees endorsed on this
Note for a statement of the respective rights, limitations of rights, duties and
obligations thereunder of each of the Subsidiary Guarantors, the Trustee and the
Holders, and to the release of the Subsidiary Guarantees under specified
conditions.
3. Principal. The Company hereby promises to pay to the Holder of this
Note, subject to the provisions of paragraph 7 hereof, the principal amount of
this Note on April 1, 2008, or if such date is not a Business Day, on the next
succeeding Business Day.
4. Interest. The Company promises to pay interest on the outstanding
principal amount of this Note from March 20, 1998 until final repayment of the
outstanding principal amount at the rate of 8 7/8% per annum. The Company will
pay interest semi-annually on April 1 and October 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
Interest Payment Date or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest will
accrue from each next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date will be October 1, 1998. The Company will pay
interest on overdue principal from time to time on demand at the rate of one
percent per annum in excess of the per annum interest rate; it
3
shall pay interest on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate as is
payable on overdue principal to the extent lawful. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
5. Method of Payment. The Company will pay interest on the Notes to the
Persons who are registered Holders of Notes at the close of business on the
March 15 or September 15 (each, a "record date") next preceding the Interest
Payment Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date. The Holder must surrender this Note to a
Paying Agent to collect any principal payment. The Company will pay the
principal of, and interest on, the Notes in money of the United States that at
the time of payment is legal tender for payment of public and private debts. The
Company, however, may pay such amounts by check payable in such money. It may
mail a principal or interest check to a Holder's registered address.
6. Paying Agent and Registrar. Initially, U.S. Bank Trust National
Association (formerly known as First Trust National Association), the Trustee
under the Indenture, will act as Paying Agent and Registrar. The Company may
change any Paying Agent, Registrar or co-registrar without notice to any Holder.
Subject to the provisions of the Indenture, the Company or any Restricted
Subsidiary may act in any such capacity.
7. Optional Redemption. The Company may redeem all or any portion of the
Notes at any time and from time to time on or after April 1, 2003 and prior to
maturity at the following redemption prices (expressed in percentages of the
principal amount) together, in each case, with accrued and unpaid interest to
the date fixed for
4
redemption if redeemed during the twelve-month period beginning on April 1 of
each year indicated below:
Year Percentage
- ---- ----------
2003............................ 104.438%
2004............................ 102.958%
2005............................ 101.479%
2006 and thereafter............. 100.000%
In addition, on or prior to April 1, 2001, the Company may, at its option,
redeem up to 35% of the outstanding Notes with the net proceeds of an Equity
Offering at 108.875% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date fixed for redemption; provided that at least $65
million principal amount of the Notes remain outstanding after such redemption.
8. Notices of Redemption. Notice of redemption will be mailed at least 15
days but not more than 60 days before the redemption date to each Holder of
Notes to be redeemed at such Holder's registered address. Subject to the
provisions of the Indenture, on and after the redemption date, interest ceases
to accrue on Notes or portions thereof called for redemption.
9. Mandatory Offers to Repurchase. Within 30 days after the occurrence of
any Change of Control, the Company will offer to purchase all outstanding Notes
at a purchase price equal to 101 percent of the aggregate principal amount of
the Notes, plus accrued and unpaid interest to the Change of Control Payment
Date.
Within 30 days after the date on which the aggregate amount of Excess
Proceeds (from an Asset Sale) equals at any time and from time to time
$10,000,000 or more, the Company
5
will offer to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds at a purchase price equal to 100 percent of
the outstanding principal amount thereof plus accrued and unpaid interest to the
Asset Sale Offer Date.
Within 30 days after the end of any two consecutive fiscal quarters during
which the Consolidated Tangible Net Worth of the Company is at any time and from
time to time less than $85,000,000, the Company will offer to purchase 10
percent of the original outstanding principal amount of the Notes at a purchase
price equal to 100 percent of the original outstanding principal amount thereof
plus accrued and unpaid interest to the Net Worth Offer Date.
A Change of Control Offer, an Excess Proceeds Offer or a Net Worth Offer
will remain open for the period specified in the Indenture. Promptly after the
termination of a Change of Control Offer, an Excess Proceeds Offer or a Net
Worth Offer, subject to the terms of the Indenture, the Company will purchase,
and mail or deliver payment, for all Notes tendered and accepted pursuant to
such Offer.
A Holder may tender in response to a Change of Control Offer, an Excess
Proceeds Offer or a Net Worth Offer all or any portion of its Notes at its
discretion by completing the form entitled "OPTION OF HOLDER TO ELECT PURCHASE"
appearing on the reverse of this Note. Any portion of Notes tendered must be an
integral multiple of $1,000.
10. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder,
6
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not exchange or register the transfer of any Note or portion of a
Note selected for redemption. Also, it need not issue, exchange or register the
transfer of any Notes for a period of 15 Business Days before a selection of
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
11. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
12. Amendments and Waivers. Subject to certain exceptions, the Indenture,
the Subsidiary Guarantees or the Notes may be amended or supplemented with the
consent (which may include consents obtained in connection with a tender offer
or exchange offer for Notes) of the Holders of at least a majority in principal
amount of the Notes then outstanding, and any existing Default or Event of
Default under, or compliance with any provision of, the Indenture may be waived
(other than any continuing Default or Event of Default in the payment of
interest on or the principal of Notes) with the consent (which may include
consents obtained in connection with a tender offer or exchange offer for Notes)
of the Holders of a majority in principal amount of the Notes then outstanding.
Without the consent of any Holder, the Company, the Subsidiary Guarantors and
the Trustee may amend the Indenture or the Notes or waive any provision of the
Indenture to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to certificated Notes, to provide for the
assumption of the Company's obligations to Holders in the case of a merger or
acquisition, to make any change that does not adversely affect the legal rights
of any Holder, to comply with the qualification of the Indenture under the TIA
or to reflect a
7
Subsidiary Guarantor ceasing to be liable on the Subsidiary Guarantees because
it is no longer a Subsidiary of the Company.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of the Indenture (and the obligation of the Company to
obtain any such consent otherwise required from such Holder) may be subject to
the requirement that such Holder be the Holder of record of any Notes with
respect to which such consent is required or sought as of a date identified by
the Trustee in a notice furnished to Holders in accordance with the terms of
this Indenture.
Without the consent of each Holder affected, the Company may not (i)
reduce the rate of or change the time for payment of interest, including default
interest, on any Note, (ii) reduce the principal of or change the fixed maturity
of any Note or alter the provisions with respect to redemption under Section
3.07 of the Indenture or with respect to mandatory offers to purchase Notes
pursuant to Sections 4.11, 4.16 and 4.20 of the Indenture, (iii) make any Note
payable in money other than that stated in the Note, (iv) make any change to
Section 6.04, 6.07 or 10.02(d)(v) of the Indenture, (v) reduce the amount of
Notes whose Holders must consent to an amendment, supplement or waiver to the
Indenture, (vi) modify the ranking or priority of the Notes or any Subsidiary
Guarantee, (vii) release any Subsidiary Guarantor from any of its obligations
under its Subsidiary Guarantee or the Indenture otherwise than in accordance
with the Indenture or (viii) waive a continuing Default or Event of Default in
the payment of principal of or interest on the Notes.
13. Defaults and Remedies. Events of Default include: default in payment
of interest when due and payable and continuance thereof on the Notes for 30
days; default in payment of principal, or premium, on the Notes when due and
8
payable at maturity, acceleration or otherwise; failure by the Company or any of
its Subsidiaries for 60 days after notice to comply with any of its covenants or
agreements in the Notes, the Subsidiary Guarantees or the Indenture;
acceleration of certain other Indebtedness of the Company or any of its
Subsidiaries; failure by the Company or any of its Subsidiaries to pay certain
Indebtedness when the same becomes due and payable; certain final judgments that
remain undischarged against the Company or any of its Subsidiaries; certain
events of bankruptcy or insolvency of the Company or its Material Subsidiaries;
and any Subsidiary Guarantee ceases to be in full force and effect (other than
in accordance with its terms) or is declared null and void and unenforceable or
found to be invalid or any Subsidiary Guarantor denies liability under its
Subsidiary Guarantee (other than by reason of release of a Subsidiary Guarantor
from its Subsidiary Guarantee). If an Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25 percent in principal amount of the
then outstanding Notes may declare all the Notes to be immediately due and
payable in an amount equal to 100 percent (or in the case of Default under
Section 6.01(a)(iii) of the Indenture resulting from a breach of Section 4.16 of
the Indenture, 101 percent) of the principal amount of the Notes plus accrued
and unpaid interest to the date of payment, except that in the case of an Event
of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes become due and payable immediately without any action or
notice. Holders may not enforce the Indenture or the Notes except as provided in
the Indenture. The Trustee will require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders of
a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default
9
in payment of principal or interest) if it determines that withholding notice is
in their interests.
14. Trustee Dealings With Company. The Trustee, in its individual or any
other capacity, may become the owner or pledgee of Notes, and may otherwise deal
with the Company or any of its Affiliates with the same rights it would have if
it were not Trustee. Any Agent may do the same with like rights. However, the
Trustee is subject to Sections 7.10 and 7.11 of the Indenture.
15. No Recourse Against Others. No recourse for the payment of the
principal of, premium, if any, or interest on any of the Notes, or for any claim
based thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of the Company or any Subsidiary Guarantor in
the Indenture or in any of the Notes or in any Subsidiary Guarantee or because
of the creation of any Indebtedness represented thereby, shall be had against
any incorporator, shareholder, officer, director, employee or controlling person
of the Company, any Subsidiary Guarantor or any successor Person thereof. Each
Holder, by accepting such Notes waives and releases all such liability.
16. Authentication. The Note will not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose until authenticated by the
manual signature of the Trustee or an authenticating agent.
17. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
10
The Company will furnish to any Holder, upon written request and without
charge, a copy of the Indenture. Requests may be made to:
Beazer Homes USA, Inc.
5775 Peachtree Dunwoody Road,
Suite C-550
Atlanta, Georgia 30342
Attention: Secretary
SUBSIDIARY GUARANTEE
For value received, each of the undersigned hereby, jointly and severally,
unconditionally guarantees to the Holder of this Note the payments of principal
of, premium, if any, and interest on this Note in the amounts and at the time
when due and interest on the overdue principal, premium, if any, and interest,
if any, of this Note, if lawful, and the payment or performance of all other
obligations of the Company under the Indenture or the Notes, to the Holder of
this Note and the Trustee, all in accordance with and subject to the terms and
limitations of this Note, Article 11 of the Indenture and this Subsidiary
Guarantee. This Subsidiary Guarantee will become effective in accordance with
Article 11 of the Indenture and its terms shall be evidenced therein. The
validity and enforceability of any Subsidiary Guarantee shall not be affected by
the fact that it is not affixed to any particular Note.
The obligations of the undersigned to the Holders of Notes and to the
Trustee pursuant to the Subsidiary Guarantee and the Indenture are expressly set
forth in Article 11 of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Subsidiary Guarantee and all of the other
provisions of the Indenture to which this Subsidiary Guarantee relates.
This Subsidiary Guarantee is subject to release upon the terms set forth
in the Indenture.
BEAZER HOMES CORP.
BEAZER/SQUIRES REALTY, INC.
BEAZER HOMES SALES ARIZONA INC.
BEAZER REALTY CORP.
PANITZ HOMES REALTY, INC.
BEAZER MORTGAGE CORPORATION
BEAZER HOMES HOLDINGS CORP.
BEAZER HOMES TEXAS HOLDINGS, INC.
BEAZER HOMES TEXAS, L.P.,
By:
-----------------------
Name: David S. Weiss
Title: An Authorized
Officer of
Each of the
Subsidiary Guarantors
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.11, 4.16 or 4.20 of the Indenture, check the box below:
|_| Section 4.11 (Excess Proceeds Offer)
|_| Section 4.16 (Change of Control Offer)
|_| Section 4.20 (Net Worth Offer)
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.11, 4.16 or 4.20 of the Indenture, as applicable,
state the principal amount you elect to have purchased: $_________. Note: The
amount you elect to have purchased must be an integral multiple of $1,000.
Date: ___________________ Your signature _________________
(Sign exactly as
your name appears
on the Note)
Signature Subsidiary
Guarantee:
Exhibit 4.17
BEAZER HOMES USA, INC.
$100,000,000 8 7/8% Senior Notes due 2008
PURCHASE AGREEMENT
March 20, 1998
SBC WARBURG DILLON READ INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON SMITH BARNEY
as Initial Purchasers
c/o SBC Warburg Dillon Read Inc.
535 Madison Avenue
New York, New York 10022
Dear Sirs:
Beazer Homes USA, Inc. (the "Company"), a Delaware corporation,
proposes to issue and sell to SBC Warburg Dillon Read Inc., Donaldson, Lufkin &
Jenrette Securities Corporation and Salomon Smith Barney (the "Initial
Purchasers") $100,000,000 aggregate principal amount of its 8 7/8% Senior Notes
due 2008 (the "Notes"). The Notes will be issued pursuant to an indenture (the
"Indenture"), to be dated the Closing Date (as defined below), by and among the
Company, the guarantors listed on the signature pages hereto (collectively, the
"Guarantors") and First Trust National Association, as trustee (the "Trustee").
The Company's obligations under the Notes and the Exchange Notes (as defined
below) will be unconditionally guaranteed on an unsecured basis by each of the
Guarantors pursuant to each of their guarantees (the "Guarantees") and the Notes
and the Guarantees will rank pari passu with the Company's $115,000,000 9%
Senior Notes due 2004 (the "2004 Notes") and the guarantees of the 2004 Notes,
respectively. All references herein to the Notes or the Exchange Notes include
the related guarantees, unless the context otherwise requires. Capitalized terms
used but not
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otherwise defined herein shall have the meanings given to such terms in the
Indenture or the Offering Memorandum (as defined below).
The Notes will be offered and sold to the Initial Purchasers (the
"Offering") pursuant to an exemption from the registration requirements under
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"). The Company has prepared a preliminary offering
memorandum, dated March 10, 1998 (the "Preliminary Offering Memorandum"), and a
final offering memorandum, dated and available for distribution on the date
hereof (the "Offering Memorandum"), relating to the Company, the Guarantors and
the Notes.
The Initial Purchasers have advised the Company that the Initial
Purchasers intend, as soon as they deem advisable after this Purchase Agreement
has been executed and delivered, to resell (the "Exempt Resales") the Notes
purchased by the Initial Purchasers under this Purchase Agreement (this
"Agreement") in private sales exempt from registration under the Act on the
terms set forth in the Offering Memorandum, as amended or supplemented, solely
to (i) persons whom the Initial Purchasers reasonably believe to be "qualified
institutional buyers," as defined in Rule 144A under the Act ("QIBs"), in
compliance with Rule 144A and (ii) other eligible purchasers pursuant to offers
and sales that occur outside the U.S. within the meaning of Regulation S under
the Act ("Regulation S"); the persons specified in clauses (i)-(ii) are
sometimes collectively referred to herein as the "Eligible Purchasers."
Holders (including subsequent transferees) of the Notes will have
the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date, substantially in
the form of Exhibit A to this Agreement, for so long as such Notes constitute
"Transfer Restricted Securities" (as defined in the
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Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Company and the Guarantors will agree to (A) file with the Securities and
Exchange Commission (the "Commission"), under the circumstances set forth in the
Registration Rights Agreement, (i) a registration statement under the Act (the
"Exchange Offer Registration Statement") relating to the Company's 8 7/8% Senior
Notes due 2008 to be offered in exchange (the "Exchange Notes") for the Notes
(the "Exchange Offer") and/or (ii) a shelf registration statement pursuant to
Rule 415 under the Act (the "Shelf Registration Statement" and, together with
the Exchange Offer Registration Statement, the "Registration Statements")
relating to the resale by certain holders of the Notes, and (B) use their best
efforts to cause such Registration Statements to be declared effective as soon
as practicable. This Agreement, the Notes, the Exchange Notes, the Indenture and
the Registration Rights Agreement are hereinafter sometimes referred to
collectively as the "Operative Documents."
Upon original issuance of the Notes and until such time as the same
is no longer required under the applicable requirements of the Act, the Notes
shall bear the legend provided in the Offering Memorandum.
The net proceeds from the Offering will be used by the Company to
repay indebtedness outstanding under its Credit Facility (as defined in the
Preliminary Offering Memorandum) and to pay any related fees and expenses in
connection therewith.
The Company, each of the Guarantors, and the Initial Purchasers
agree as follows:
1. SALE AND PURCHASE. Upon the basis of the representations,
warranties and covenants contained in this Agreement, and subject to the other
terms and conditions herein set forth, the Company agrees to issue and sell to
the Initial
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Purchasers, and the Initial Purchasers agree to purchase from the Company, the
aggregate principal amount of the Notes set forth opposite the name of such
Initial Purchaser on Exhibit B hereto. The purchase price for the Notes shall be
96.933% of their principal amount. The Company shall cause each Guarantor to
unconditionally guarantee on an unsecured basis by such Guarantor the Company's
obligations under the Notes and the Exchange Notes.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Notes
shall be made to the Company by wire transfer of immediately available funds, to
an account of the Company designated by the Company at least two business days
prior to the payment date, against delivery of the certificates for the Notes
for the account of the Initial Purchasers. Delivery of, and payment of the
purchase price for, the Notes shall be made at 9:00 a.m., New York City time, on
the third business day following the date of this Agreement (the "Closing Date")
at the offices of Cahill Gordon & Reindel, 80 Pine Street, New York, New York
10005. The Closing Date, and the location of delivery of, and the form of
payment for, the Notes may be varied by mutual agreement between the Initial
Purchasers and the Company.
One or more of the Notes in global form or certificated form, as the
case may be, registered in such names as the Initial Purchasers may request upon
at least one business day's notice prior to the Closing Date, having an
aggregate principal amount corresponding to the aggregate principal amount of
the Notes sold pursuant to Exempt Resales to QIBs, in the case of the Notes in
global form, and to other Eligible Purchasers, in the case of Notes in
certificated form sold pursuant to Regulation S, shall be delivered by the
Company to the Initial Purchasers (or as the Initial Purchasers direct), against
payment by the Initial Purchasers of the purchase price therefor by means of
transfer of immediately available funds (including book transfer) reasonably
acceptable
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to the Initial Purchasers and the Company to the order of the Company. The Notes
in global form shall be made available to the Initial Purchasers for inspection
not later than 9:30 a.m. on the business day immediately preceding the Closing
Date.
3. AGREEMENTS OF THE ISSUERS. The Company and the Guarantors
covenant and agree with the Initial Purchasers as follows:
(a) To furnish such information as may be required and otherwise to
cooperate with the Initial Purchasers and counsel to the Initial
Purchasers in qualifying the Notes and Exchange Notes for offering and
sale under the securities or blue sky laws of such jurisdictions as the
Initial Purchasers may request and to maintain such qualification in
effect so long as required by such laws for the Exempt Resales, provided
that neither the Company nor any Guarantor shall be required to qualify as
a foreign corporation in any jurisdiction in which it is not so qualified
or to file a general consent to service of process in any such
jurisdiction or subject itself to taxation in any jurisdiction in which it
is not then so subject (except service of process with respect to the
offering and sale of the Notes and Exchange Notes); and to promptly advise
the Initial Purchasers of the receipt by the Company or any Guarantor of
any notification with respect to the suspension of the qualification of
the Notes or Exchange Notes for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose.
(b) To furnish the Initial Purchasers and those persons identified
by the Initial Purchasers, without charge, with such number of copies of
the Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments or supplements thereto, as the Initial Purchasers may
reasonably request for purposes
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contemplated by the Act. The Company consents to the use of the
Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments and supplements thereto required pursuant to this Agreement, by
the Initial Purchasers in connection with Exempt Resales that are in
compliance with Section 4(B) of this Agreement.
(c) From and after the Closing Date, for so long as any of the Notes
remain outstanding, to deliver without charge to the Initial Purchasers,
promptly upon their becoming available, copies of (i) all reports and
other communications (financial or otherwise) that the Company shall mail
or otherwise make available to its securityholders, (ii) all reports or
financial statements furnished to or filed by the Company and each of the
Guarantors with the Commission or any national securities exchange and
(iii) such other information as the Initial Purchasers may reasonably
request regarding the Company or the Subsidiaries.
(d) To advise the Initial Purchasers promptly of the happening of
any event known to the Company prior to the Closing Date which, in the
judgment of the Company, would require the making of any change in the
Preliminary Offering Memorandum or the Offering Memorandum then being
used, so that the Preliminary Offering Memorandum or the Offering
Memorandum would not include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they are made, not misleading,
and, during such time, to prepare and furnish, at the Company's expense,
to the Initial Purchasers promptly such amendments or supplements to the
Preliminary Offering Memorandum or the Offering Memorandum as may be
necessary to reflect any such change and to furnish the Initial Purchasers
a copy of such proposed amendment or supplement. The Company shall
promptly prepare, upon the
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Initial Purchasers' reasonable request, any amendment or supplement to the
Offering Memorandum that may be necessary or advisable in connection with
Exempt Resales.
(e) To furnish to the Initial Purchasers as early as practicable
prior to the time of purchase, but not later than two business days prior
thereto, a copy of the latest available unaudited interim consolidated
financial statements, if any, of the Company and the Subsidiaries which
have been read by the Company's independent certified public accountants,
as stated in their letter to be furnished pursuant to Section 6(c) of this
Agreement.
(f) To apply the net proceeds from the sale of the Notes in the
manner set forth under the caption "Use of Proceeds" in the Offering
Memorandum.
(g) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement becomes effective or is terminated, to
pay all costs, expenses, fees and taxes (other than any transfer taxes and
other than fees and disbursements of counsel to the Initial Purchasers,
except as may be required by clause (iv) below) incident to and in
connection with: (i) the preparation, printing, filing and distribution of
the Preliminary Offering Memorandum and the Offering Memorandum and all
amendments and supplements thereto, (ii) the preparation and delivery of
the Operative Documents and all other agreements, memoranda,
correspondence and documents prepared and delivered in connection with
this Agreement and with the Exempt Resales, (iii) the issuance, transfer
and delivery by the Company and the Guarantors of the Notes and the
Guarantees, respectively, to the Initial Purchasers, (iv) the
qualification or registration of the Notes for offer and sale under the
securities or Blue Sky laws of the several states (including, without
limitation, the
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cost of printing and mailing a preliminary and final Blue Sky memorandum
and the fees and disbursements of counsel to the Initial Purchasers
relating thereto), (v) the furnishing of such copies of the Preliminary
Offering Memorandum and the Offering Memorandum, and all amendments and
supplements thereto, as may be reasonably requested for use in connection
with Exempt Resales, (vi) the preparation of certificates for the Notes
and Exchange Notes (including, without limitation, printing and engraving
thereof), (vii) the application for eligibility of the Notes for trading
in the Private Offerings, Resales and Trading through Automated Linkages
("PORTAL") market of the National Association of Securities Dealers, Inc.
("NASD"), including, but not limited to, all application fees and
expenses, (viii) the approval of the Notes and Exchange Notes by The
Depository Trust Company ("DTC") for "book-entry" transfer, (ix) the
rating of the Notes and Exchange Notes by rating agencies, (x) the fees
and expenses of the Trustee and its counsel and (xi) the performance by
the Company and the Guarantors of their other obligations under the
Operative Documents, including, but not limited to, the fees,
disbursements and expenses of the Company's counsel and accountants.
(h) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Notes in a manner that would
require the registration under the Act of the sale of the Notes to the
Initial Purchasers or any Eligible Purchasers.
(i) From and after the Closing Date, for so long as any of the Notes
remain outstanding and are "restricted securities" within the meaning of
Rule 144(a)(3) under the Act and during any period in which the Company is
not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), to make
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available the information required by Rule 144A(d)(4) under the Act to (i)
any holder or beneficial owner of Notes in connection with any sale of
such Notes and (ii) any prospective purchaser of such Notes from any such
holder or beneficial owner designated by the holder or beneficial owner.
(j) To comply with all of its agreements set forth in the
Registration Rights Agreement and all agreements set forth in the
representations letter of the Company to DTC relating to the approval of
the Notes by DTC for "book-entry" transfer.
(k) To use its best efforts to effect the eligibility of the Notes
for trading in the PORTAL market and to obtain approval of the Notes by
DTC for "book-entry" transfer.
(l) Not to distribute prior to the Closing Date any offering
material in connection with the offer and sale of the Notes other than the
Preliminary Offering Memorandum and the Offering Memorandum.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND GUARANTORS. (A)
The Company and each of the Guarantors represents and warrants to the Initial
Purchasers that:
(1) Each of the Preliminary Offering Memorandum and the Offering
Memorandum has been prepared in connection with the Exempt Resales.
Neither the Preliminary Offering Memorandum nor the Offering Memorandum,
or any supplement or amendment thereto, contains an untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no warranty or representation with respect
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to any statement made in reliance upon and in conformity with information
concerning the Initial Purchasers and furnished in writing by the Initial
Purchasers to the Company expressly for use in the Preliminary Offering
Memorandum or the Offering Memorandum. No order asserting that any of the
transactions contemplated by this Agreement are subject to the
registration requirements of the Act has been issued or threatened.
(2) As of the date of this Agreement, the Company has an authorized
capitalization as set forth under the heading entitled "Actual" in the
section of the Preliminary Offering Memorandum and the Offering Memorandum
entitled "Capitalization" and, as of the time of purchase, the Company
shall have an authorized capitalization as set forth under the heading
entitled "As Adjusted" in the section of the Preliminary Offering
Memorandum and the Offering Memorandum entitled "Capitalization"; all of
the issued and outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Company has been duly incorporated and is validly existing as a
corporation in good standing under the law of the State of Delaware with
full corporate power and authority to own its properties and conduct its
business as described in the Preliminary Offering Memorandum and the
Offering Memorandum, to execute and deliver this Agreement and to issue,
sell and deliver the Senior Notes as herein contemplated.
(3) All of the issued and outstanding shares of the capital stock of
each of the Company's corporate subsidiaries (the "Corporate
Subsidiaries"), have been duly authorized and validly issued and are fully
paid and nonassessable and the partnership interests which the Company
owns in Beazer Homes Texas, L.P. (the "Partnership Subsidiary" and,
together with the Corporate Subsidiaries,
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the "Subsidiaries") have been duly authorized and validly issued and are
fully paid and non-assessable, and both the capital stock of the Corporate
Subsidiaries and the partnership interests in the Partnership Subsidiary
are owned by the Company free and clear of any pledge, lien, encumbrance,
security interest, preemptive right or other claim; except as described in
the Preliminary Offering Memorandum and the Offering Memorandum, there are
no outstanding rights, subscriptions, warrants, calls, options or other
agreements of any kind with respect to the capital stock or the
partnership interests of the Company or the Subsidiaries; the Company does
not own, directly or indirectly, shares of capital stock of any
corporation other than the Corporate Subsidiaries, or partnership
interests in any partnership other than the Partnership Subsidiary, except
that the Company does own a 40% interest in the Joint Venture Entity (as
defined in the Preliminary Offering Memorandum).
(4) Each of the Corporate Subsidiaries has been duly incorporated,
and the Partnership Subsidiary has been duly formed, and is validly
existing as a corporation, in the case of the Corporate Subsidiaries, or
as a limited partnership, in the case of the Partnership Subsidiary, in
good standing under the laws of its respective jurisdiction of
incorporation or formation with full corporate or partnership power, as
the case may be, and authority to own its respective properties and
conduct its respective business as described in the Preliminary Offering
Memorandum and the Offering Memorandum and to execute and deliver the
Indenture and the Guarantees.
(5) The Company and each of the Guarantors have all requisite
corporate and partnership power, as the case may be, and authority to
execute, deliver and perform all of their obligations under the Operative
Documents and to consummate the transactions contemplated by the Operative
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Documents and, without limitation, the Company has all requisite corporate
power and authority to issue, sell and deliver the Notes and each of the
Guarantors has all requisite corporate and partnership power, as the case
may be, and authority to execute, deliver and perform all of its
obligations under the Guarantees.
(6) The Company and each of the Subsidiaries are duly qualified or
licensed by and are in good standing in each jurisdiction in which the
nature of their respective businesses or their respective ownership or
leasing of their respective properties requires such qualification, except
where the failure, individually or in the aggregate, to be so licensed or
qualified and in good standing would not have a material adverse effect on
the properties, assets, prospects, operations, business or condition
(financial or otherwise) of the Company and the Subsidiaries taken as a
whole; and the Company and each of the Subsidiaries are in compliance in
all material respects with the laws, orders, rules and regulations issued
or administered by such jurisdictions.
(7) The Indenture has been duly authorized by each of the Company
and each of the Guarantors and, when executed and delivered by each of
them, will be a legal, valid and binding agreement of each enforceable in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance and fraudulent
transfer, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally and general principles of equity.
(8) The Notes have been duly authorized by the Company and the
Guarantees have been duly authorized by each of the Guarantors and, when
executed and authenticated in accordance with the terms of the
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Indenture and delivered to and paid for by you, the Notes will constitute
legal, valid and binding obligations of the Company and the Guarantees
will constitute legal, valid and binding obligations of each Guarantor, in
each case enforceable in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance and fraudulent transfer, reorganization, moratorium
or similar laws relating to or affecting creditors' rights generally and
general principles of equity.
(9) The Exchange Notes have been duly and validly authorized for
issuance by the Company and, when issued, authenticated and delivered by
the Company in accordance with the terms of the Exchange Offer and the
Indenture, the Exchange Notes will be legal, valid and binding obligations
of the Company, entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, except that
enforceability of the Exchange Notes may be limited by bankruptcy,
insolvency, fraudulent conveyance and fraudulent transfer, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity and the discretion of the
court before which any proceedings therefor may be brought. The Exchange
Notes, when issued, authenticated and delivered, will conform in all
material respects to the description thereof in the Offering Memorandum.
(10) The Guarantees have been duly and validly authorized by the
Guarantors and, when the Notes and Exchange Notes are executed and
delivered in accordance with the terms of the Indenture and the
Registration Rights Agreement, will be legal, valid and binding
obligations of the Guarantors, enforceable against each of them in
accordance with their respective terms, except that enforceability of the
Guarantees may be limited by
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bankruptcy, insolvency, fraudulent conveyance and fraudulent transfer,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity and the
discretion of the court before which any proceedings therefor may be
brought. The Guarantees, when executed and delivered, will conform in all
material respects to the description thereof in the Preliminary Offering
Memorandum and the Offering Memorandum.
(11) The Registration Rights Agreement has been duly and validly
authorized by the Company and each of the Guarantors and, when duly
executed and delivered by the Company and each of the Guarantors, will be
a legal, valid and binding agreement of the Company and each of the
Guarantors, enforceable against each of them in accordance with its terms,
except that (a) enforceability of the Registration Rights Agreement may be
limited by bankruptcy, insolvency, fraudulent conveyance and fraudulent
transfer, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity and the discretion of the court before which any proceedings
therefor may be brought and (b) any rights to indemnity or contribution
thereunder may be limited by federal and state securities laws and public
policy considerations. The Registration Rights Agreement will conform in
all material respects to the description thereof in the Preliminary
Offering Memorandum and the Offering Memorandum.
(12) Neither the Company nor any of the Subsidiaries is in breach
of, or in default under (nor has any event occurred which with notice,
lapse of time, or both would constitute a breach of, or default under),
its respective charter or by-laws or in the performance or observance of
any obligation, agreement, covenant or condition contained
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in any license, indenture, lease, mortgage, deed of trust, bank loan or
credit agreement or other agreement or instrument material to the conduct
of the business of the Company and the Subsidiaries, taken as a whole, to
which the Company or any of the Subsidiaries is a party or by which any of
them is bound, and the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
will not conflict with, or result in any breach of or constitute a default
under (nor constitute any event which with notice, lapse of time, or both
would constitute a breach of, or default under), any provisions of the
charter or by-laws of the Company or any of the Subsidiaries or under any
provision of any license, indenture, lease, mortgage, deed of trust, bank
loan or credit agreement or other agreement or instrument to which the
Company or any of the Subsidiaries or any of their respective affiliates
is a party or by which the Company or any of the Subsidiaries or their
respective properties may be bound or affected, or under any federal,
state, local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Company or any of the Subsidiaries or any of their
respective affiliates.
(13) This Agreement has been duly and validly authorized by the
Company and each of the Guarantors and, when duly executed and delivered
by the Company and each of the Guarantors, will be a legal, valid and
binding agreement of the Company and each of the Guarantors, enforceable
against each of them in accordance with its terms, except that (a)
enforceability of the Registration Rights Agreement may be limited by
bankruptcy, insolvency, fraudulent conveyance and fraudulent transfer,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity and the
discretion of the court before which any proceedings therefor may be
brought and
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(b) any rights to indemnity or contribution thereunder may be limited by
federal and state securities laws and public policy considerations.
(14) The Notes, the Guarantees and the Indenture conform in all
material respects to the descriptions thereof contained in the Preliminary
Offering Memorandum and the Offering Memorandum.
(15) No approval, authorization, consent or order of or filing with
any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance and sale of the Notes, Exchange Notes and the Guarantees
as contemplated hereby, except such as have been or will be obtained and
made on or prior to the Closing Date (or, in the case of the Registration
Rights Agreement, will be obtained and made under the Act, the Trust
Indenture Act and state securities or Blue Sky laws and regulations).
(16) Each of the Company and the Subsidiaries has all necessary
permits, licenses, authorizations, consents and approvals and has made all
necessary filings required under any federal, state, local or foreign law,
regulation or rule, and has obtained all necessary authorizations,
consents and approvals from other persons, material to the conduct of its
respective business; neither the Company nor any of the Subsidiaries is in
violation of, or in default under, any such license, authorization,
consent or approval or any federal, state, local or foreign law,
regulation or rule or any decree, order judgment applicable to the Company
or any of the Subsidiaries the effect of which could have a material
adverse effect on the properties, assets, prospects, operations, business
or condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole.
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(17) All legal or governmental proceedings, contracts or documents
of a character required to be described in the Preliminary Offering
Memorandum and the Offering Memorandum have been so described as required.
(18) Other than as described in the Preliminary Offering Memorandum
and the Offering Memorandum, there are no actions, suits or proceedings
pending or, to the Company's best knowledge, threatened against the
Company or any of the Subsidiaries or any of their respective properties,
at law or in equity, or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency
which could result in a judgment, decree or order having a material
adverse effect on the properties, assets, prospects, operations, business
or conditions (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole.
(19) The audited and unaudited financial statements and information
incorporated by reference in the Preliminary Offering Memorandum and the
Offering Memorandum present fairly the consolidated financial position of
the Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company for the
periods specified, subject, in the case of such unaudited financial
statements, to normal year end adjustments; such financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as
otherwise noted therein); and all adjustments to historical data made by
the Company in preparing the pro forma data were reasonable.
(20) Subsequent to the respective dates as of which information is
given in the Preliminary Offering
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Memorandum and the Offering Memorandum, and except as may be otherwise
stated in the Preliminary Offering Memorandum and the Offering Memorandum,
there has not been (i) any material adverse change, financial or
otherwise, in the business, properties, prospects, results of operations
or condition (financial or otherwise), present or prospective, of the
Company and the Subsidiaries, taken as a whole, (ii) any transaction,
which is or could be material to the business, properties, prospects,
results of operations or condition (financial or otherwise), present or
prospective, of the Company and the Subsidiaries, taken as a whole,
contemplated or entered into by the Company or any of the Subsidiaries, or
(iii) any obligation, contingent or otherwise, directly or indirectly
incurred by the Company or any of the Subsidiaries which is or could be
material to the business, properties, prospects, results of operations or
condition (financial or otherwise), present or prospective, of the Company
and the Subsidiaries taken as a whole.
(21) Neither the Company nor any of the Guarantors is, nor will any
of them be, after giving effect to the issuance and sale of the Notes and
the Guarantees and the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby,
(i) insolvent, (ii) left with unreasonably small capital with which to
engage in its anticipated businesses, or (iii) incurring debts beyond its
ability to pay such debts as they mature.
(22) The Company and the Subsidiaries have good title to all
properties and assets owned by them and have good leasehold interest in
each property and asset leased by them, in each case free and clear of all
pledges, liens, encumbrances, security interests, charges, mortgages and
defects, except as such do not materially affect the value
-19-
of such property and as such do not interfere with the use made and
proposed to be made of such properties by the Company and the
Subsidiaries.
(23) The business, operations and facilities of the Company and each
of the Subsidiaries have been and are being conducted in compliance with
all applicable laws, ordinances, rules, regulations, licenses, permits,
approvals, plans, authorizations or requirements relating to occupational
safety and health, or pollution, or protection of health or the
environment, or reclamation (including, without limitation, those relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants or hazardous or toxic substances, materials or wastes into
ambient air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of chemical substances, materials or wastes, whether
solid, gaseous or liquid in nature) or otherwise relating to remediating
real property of any governmental department, commission, board, bureau,
agency or instrumentality of the United States, any state or political
subdivision thereof, or any foreign jurisdiction, and all applicable
judicial or administrative agency or regulatory decrees, awards, judgments
and orders relating thereto, except any violation thereof which would not,
individually or in the aggregate, have a material adverse effect on the
properties, assets, prospects, operations, business or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a
whole; and neither the Company nor any of the Subsidiaries has received
any notice from a governmental instrumentality or any third party alleging
any violation thereof or liability thereunder (including, without
limitation, liability for costs of investigating or remediating sites
containing hazardous substances and/or damages to natural resources).
-20-
(24) There is no claim pending or, to the best knowledge of the
Company, threatened or contemplated under any federal, state, local or
foreign law, rule or regulation governing pollution or protection of the
environment (the "Environmental Laws") against the Company or any of the
Subsidiaries which, if adversely determined, would have a material adverse
effect on the properties, assets, prospects, operation, business or
condition (financial or otherwise) of the Company and the Subsidiaries
taken as a whole; there are no past or present actions or conditions
including, without limitation, the release of any hazardous substance or
waste regulated under any Environmental Law that are likely to form the
basis of any such claim against the Company or any of the Subsidiaries
which, if adversely determined, would have a material adverse effect on
the properties, assets, prospects, operation, business or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a
whole.
(25) The Company and each of the Subsidiaries have filed all federal
or state income and franchise tax returns required to be filed and have
paid all taxes shown thereon as due, and there is no material tax
deficiency which has been or is reasonably likely to be asserted against
the Company or any of the Subsidiaries; all material tax liabilities of
the Company and the Subsidiaries are adequately provided for on the books
of the Company and the Subsidiaries.
(26) The Company has not incurred any liability for any finder's
fees or similar payments in connection with the transactions herein
contemplated.
(27) The Company, either directly or through one or more
Subsidiaries, has in effect, with financially sound insurers, insurance
with respect to its business and
-21-
properties and the business and properties of the Subsidiaries against
loss or damage of the kind customarily insured against by corporations
engaged in the same or similar businesses and similarly situated, of such
type and in such amounts as are customarily carried under similar
circumstances by such other corporations.
(28) None of the Company or its Subsidiaries is an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act"), or analogous foreign laws and regulations.
(29) None of the Company, the Guarantors or their Affiliates (as
defined in Rule 501(b) of Regulation D under the Act) has (A) taken,
directly or indirectly, any action designed to, or that might reasonably
be expected to, cause or result in stabilization or manipulation of the
price of any security of the Company or any of the Guarantors to
facilitate the sale or resale of the Notes or (B) since the date of the
Preliminary Offering Memorandum (x) sold, bid for, purchased or paid any
person any compensation for soliciting purchases of the Notes in a manner
that would require registration of the Notes under the Act or (y) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company or any of the Guarantors in a
manner that would require registration of the Notes under the Act.
(30) No registration under the Act of the Notes is required for the
sale of the Notes to the Initial Purchasers as contemplated by this
Agreement or for the Exempt Resales, assuming in each case that (A) the
purchasers who buy the Notes in the Exempt Resales are Eligible Purchasers
and (B) the accuracy of and compliance with the Initial Purchasers'
representations, warranties
-22-
and covenants contained in Section 4(B) of this Agreement. No form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) was used by the Company, any of the Guarantors
or any of their representatives in connection with the offer and sale of
any of the Notes or in connection with Exempt Resales, including, but not
limited to, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising.
(31) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Notes, the Exchange Notes, and
Guarantees to be purchased by the Eligible Purchasers will not involve any
prohibited transaction within the meaning of Section 406(a) of ERISA or
Section 4975(c)(1)(A)-(D) of the Code. The representation made by the
Company and each of the Guarantors in the preceding sentence is made in
reliance upon and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by the Eligible
Purchasers as set forth in the Offering Memorandum under the caption
"Transfer Restrictions."
(32) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, and each amendment or supplement thereto, as
of its date, contains the information specified in, and meets the
requirements of, Rule 144A(d)(4) under the Act.
(33) Neither the Company nor any of its Subsidiaries (nor any agent
acting on behalf of the Company or any of the Subsidiaries) has taken, and
none of them will take, any action that might cause this Agreement or the
issuance or sale of the Notes or Exchange Notes to violate Regulation G
(12 C.F.R. Part 207), Regulation T (12 C.F.R.
-23-
Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R.
Part 224) of the Board of Governors of the Federal Reserve System or
analogous foreign laws and regulations, in each case as in effect, or as
the same may hereafter be in effect, on the Closing Date.
(34) No forward-looking statement (within the meaning of Section 27A
of the Act and Section 21E of the Exchange Act) contained in the Offering
Memorandum has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.
(35) None of the Company or the Guarantors is or, upon consummation
of the transactions, will be (A) "insolvent" as that term is defined in
Section 101(32) of the United States Bankruptcy Code (the "Bankruptcy
Code") (11 U.S.C. ss. 101(32)), Section 2 of the Uniform Fraudulent
Transfer Act ("UFTA") or Section 2 of the Uniform Fraudulent Conveyance
Act ("UFCA"), (B) an entity with "unreasonably small capital" as that term
is used in Section 548(a)(2)(ii) of the Bankruptcy Code or Section 5 of
the UFCA, (C) engaged or about to engage in a business or transaction for
which its remaining property is "unreasonably small" in relation to the
business or transaction as that term is used in Section 4 of the UFTA or
(D) unable to pay its debts as they mature or become due, within the
meaning of Section 548(a)(2)(B)(iii) of the Bankruptcy Code, Section 4 of
the UFTA and Section 6 of the UFCA. The Company and each of the Guarantors
now owns and upon consummation of the transactions will own assets having
a value at both "fair valuation" and at "present fair saleable value"
greater than the amount required to pay its "debts" as such terms are used
in Section 2 of the UFTA and Section 2 of the UFCA.
-24-
(36) The statistical and market-related data included in the
Preliminary Offering Memorandum and the Offering Memorandum are based on
or derived from sources that the Company and the Guarantors believe to be
reliable and accurate and represent the Company's and the Guarantors' good
faith estimates that are made on the basis of data derived from such
sources.
The Company and each of the Guarantors acknowledges that the Initial
Purchasers and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 7 of this Agreement, the law firm acting as
counsel to the Company and each of the Guarantors and counsel to the Initial
Purchasers will rely upon the accuracy and truth of the foregoing
representations and the Company and each Guarantor hereby consents to such
reliance.
(B) Each of the Initial Purchasers represents, warrants and
covenants to the Company that they are QIBs with such knowledge and experience
in financial and business matters as are necessary in order to evaluate the
merits and risks of an investment in the securities. The Initial Purchasers
represent, warrant and agree with the Company that (i) they are not acquiring
the Notes with a view to any distribution thereof that would violate the Act or
the securities laws of any state of the United States or any applicable
jurisdiction, (ii) they have not and will not solicit offers for, or offer or
sell, the Notes by any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Act and (iii) they
have and will solicit offers for the Notes only from, and will offer the Notes
only to, (x) persons whom the Initial Purchasers reasonably believe to be QIBs
or, if any such person is buying for one or more institutional accounts for
which such person is acting as fiduciary or agent, only when such person has
represented to the Initial Purchasers that each such account is
-25-
a QIB to whom notice has been given that such sale or delivery is being made in
reliance on Rule 144A, and, in each case, in transactions under Rule 144A, or
(y) persons other than U.S. persons outside the U.S. in reliance on Regulation
S.
Each of the Initial Purchasers represents and warrants that the
source of funds being used by them to acquire the Notes does not include the
assets of any "employee benefit plan" (within the meaning of Section 3 of ERISA)
or any "plan" (within the meaning of Section 4975 of the Code).
The Initial Purchasers understand that the Company and, for purposes
of the opinion to be delivered to them pursuant to Section 7(f) hereof, counsel
to the Company will rely upon the accuracy and truth of the foregoing
representations, and the Initial Purchasers hereby consent to such reliance.
5. INDEMNIFICATION. (a) Each of the Company and the Guarantors, on a
joint and several basis, agrees to indemnify and hold harmless the Initial
Purchasers, each person, if any, who controls an Initial Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, the agents,
employees, officers and directors of an Initial Purchaser and the agents,
employees, officers and directors of any such controlling person from and
against any and all losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to reasonable attorneys' fees and any and all
reasonable expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all reasonable amounts paid in settlement of any claim or litigation) to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact
-26-
contained in the Preliminary Offering Memorandum or the Offering Memorandum, or
in any supplement thereto or amendment thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that the Company and the Guarantors will not be liable in any such case
to the extent, but only to the extent, that any such loss, liability, claim,
damage or expense arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information relating to the Initial
Purchasers furnished to the Company by or on behalf of the Initial Purchasers
expressly for use therein; provided, further, that such indemnity with respect
to the Preliminary Offering Memorandum shall not inure to the benefit of the
Initial Purchasers (or any persons controlling the Initial Purchasers) from whom
the person asserting such loss, claim, damage or liability purchased the Notes
which are the subject thereof if such person did not receive a copy of the
Offering Memorandum (or the Offering Memorandum as amended or supplemented) at
or prior to the confirmation of the sale of such Notes to such person (and the
Offering Memorandum or any such amended or supplemented Offering Memorandum, as
applicable, shall have been delivered by the Company to the Initial Purchasers a
reasonable amount of time prior to the mailing or delivery, as applicable, of
such confirmation) and any such untrue statement or omission or alleged untrue
statement or omission of a material fact contained in such Preliminary Offering
Memorandum was corrected in the Offering Memorandum (or the Offering Memorandum
as amended or supplemented). This indemnity agreement will be in addition to any
liability that each of the Company and the Guarantors may otherwise have,
including, but not limited to, liability under this Agreement.
-27-
If any action is brought against the Initial Purchasers or any such
person in respect of which indemnity may be sought against the Company and the
Guarantors pursuant to the foregoing paragraph, the Initial Purchasers or such
person shall promptly notify the indemnifying party in writing of the
institution of such action and the indemnifying party shall assume the defense
of such action, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses, provided, however,
that the omission to so notify the indemnifying party shall not relieve the
indemnifying party from any liability which they may have to the Initial
Purchasers or any such person or otherwise. The Initial Purchasers or such
person shall have the right to employ their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of the Initial
Purchasers unless the employment of such counsel shall have been authorized in
writing by the indemnifying party in connection with the defense of such action
or the indemnifying party shall not have employed counsel to have charge of the
defense of such action or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to the indemnifying party
(in which case the indemnifying party shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties (but the
indemnifying parties may employ counsel and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of the
indemnifying parties)), in any of which events such fees and expenses shall be
borne by the indemnifying party and paid as incurred (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with appropriate local counsel) in any
one action or series of related actions in the same jurisdiction representing
the indemnified parties who are parties to such action). The indemnifying party
shall not be liable for any settlement of any such claim or action effected
without its
-28-
written consent but if settled with the written consent of the indemnifying
party, the indemnifying party agrees to indemnify and hold harmless the Initial
Purchasers and any such person from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(b) The Initial Purchasers agree to indemnify and hold harmless the
Company and the Guarantors, each person, if any, who controls the Company or any
of the Guarantors within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, and each of its agents, employees, officers and directors and
the agents, employees, officers and directors of such controlling person from
and against any losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to reasonable attorneys' fees and any and all
reasonable expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or
-29-
threatened, or any claim whatsoever and any and all reasonable amounts paid in
settlement of any claim or litigation) to which they or either of them may
become subject under the Act, the Exchange Act or otherwise insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Preliminary Offering Memorandum or the
Offering Memorandum, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that any such
loss, liability, claim, damage or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
relating to the Initial Purchasers furnished to the Company by or on behalf of
the Initial Purchasers in writing expressly for use therein. The Company and the
Initial Purchasers acknowledge that the information set forth in Section 8 is
the only information furnished in writing by the Initial Purchasers to the
Company expressly for use in the Offering Memorandum. This indemnity agreement
will be in addition to any liability that the Initial Purchasers may otherwise
have, including, but not limited to, liability under this Agreement.
If any action is brought against the Company or the Guarantors or
any such person in respect of which indemnity may be sought against the Initial
Purchasers pursuant to the foregoing paragraph, the Company, the Guarantors or
such person shall promptly notify the Initial Purchasers in writing of the
institution of such action and the Initial Purchasers shall assume the defense
of such action, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses, provided, however,
that the
-30-
omission to so notify the Initial Purchasers shall not relieve the Initial
Purchasers from any liability which they may have to the Company, the Guarantors
or any such person or otherwise. The Company, the Guarantors or such person
shall have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the Company or such
person unless the employment of such counsel shall have been authorized in
writing by the Initial Purchasers in connection with the defense of such action
or the Initial Purchasers shall not have employed counsel to have charge of the
defense of such action or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to the Initial Purchasers
(in which case the Initial Purchasers shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties, but the
Initial Purchasers may employ counsel and participate in the defense thereof but
the fees and expenses of such counsel shall be at the expense of the Initial
Purchasers), in any of which events such fees and expenses shall be borne by the
Initial Purchasers and paid as incurred (it being understood, however, that the
Initial Purchasers shall not be liable for the expenses of more than one
separate counsel (together with appropriate local counsel) in any one action or
series of related actions in the same jurisdiction representing the indemnified
parties who are parties to such action). Anything in this paragraph to the
contrary notwithstanding, the Initial Purchasers shall not be liable for any
settlement of any such claim or action effected without the written consent of
the Initial Purchasers but if settled with the written consent of the Initial
Purchasers, the Initial Purchasers agree to indemnify and hold harmless the
Company, the Guarantors and any such person from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
-31-
contemplated by the second sentence of this paragraph, then the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into more
than 60 business days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party at least 30
days' prior notice of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
6. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 5 of this
Agreement is for any reason held to be unavailable from the indemnifying party,
or is insufficient to hold harmless a party indemnified under Section 5 of this
Agreement, the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, shall contribute to the amount paid or payable by
such indemnified party as a result of such aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action or any claims
asserted) to which the Company and/or the Guarantors and the Initial Purchasers
may be subject (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors, on the one hand, and the
Initial Purchasers, on the other hand, from the Offering or, (ii) if
-32-
such allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Guarantors, on the one
hand, and the Initial Purchasers, on the other hand, in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Guarantors, on the one
hand, and the Initial Purchasers, on the other hand, shall be deemed to be in
the same proportion as (x) the total proceeds from the Offering (net of
discounts and commissions but before deducting expenses) received by the Company
and the Guarantors and (y) the total discounts and commissions received by the
Initial Purchasers as set forth in the table on the cover page of the Offering
Memorandum. The relative fault of the Company and the Guarantors, on the one
hand, and the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company (and the Guarantors) or the
Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission or
alleged statement or omission.
The Company, the Guarantors and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 6 were
determined by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to above.
Notwithstanding the provisions of this Section 6, (i) in no case shall the
Initial Purchasers be required to contribute any amount in excess of the amount
by which the total discount and commissions applicable to the Notes pursuant to
this Agreement exceeds the amount of any damages that the Initial Purchasers
have otherwise been required to pay by
-33-
reason of any untrue or alleged untrue statement or omission or alleged omission
and (ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
Section 6, each person, if any, who controls the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Initial Purchasers, and each person, if
any, who controls the Company or the Guarantors within the meaning of Section 15
of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company or the Guarantors, respectively, where applicable,
subject in each case to clauses (i) and (ii) of this paragraph. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim for contribution
may be made against another party or parties under this Section 6, notify such
party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 6 or otherwise; provided, however, that no additional notice shall be
required with respect to any action for which notice has been given under
Section 5 for purposes of indemnification. No party shall be liable for
contribution with respect to any action or claim settled without its written
consent; provided, however, that such written consent was not unreasonably
withheld.
7. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations of
the Initial Purchasers to purchase and pay for the Notes, as provided for in
this Agreement, shall be subject to satisfaction of the following conditions
prior to or concurrently with such purchase:
-34-
(a) All of the representations and warranties of the Company and the
Guarantors contained in this Agreement shall be true and correct on the
date of this Agreement and on the Closing Date. The Company and the
Guarantors shall have performed or complied with all of the agreements
contained in this Agreement and required to be performed or complied with
by them at or prior to the Closing Date.
(b) No stop order suspending the qualification or exemption from
qualification of the Notes in any jurisdiction shall have been issued and
no proceeding for that purpose shall have been commenced or shall be
pending or threatened.
(c) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency that would, as of the Closing Date, prevent the issuance of the
Notes or the Exchange Offer; no action, suit or proceeding shall have been
commenced and be pending against or affecting or, to the best knowledge of
the Company and the Guarantors, threatened against the Company and/or the
Guarantors before any court or arbitrator or any governmental body, agency
or official that, if adversely determined, would result in a material
adverse effect.
(d) Since the date as of which information is given in the Offering
Memorandum, except as expressly set forth therein, neither the Company nor
any of its Subsidiaries had any material liabilities or obligations,
direct or contingent, that were not set forth in the Company's
consolidated balance sheet as of December 31, 1997 or in the notes
thereto. Since the date as of which information is given in the Offering
Memorandum and up to the Closing Date, except as otherwise expressly set
forth in the Offering Memorandum, (a) none of the Company or its
-35-
Subsidiaries has (1) incurred any liabilities or obligations, direct or
contingent, that would, either individually or in the aggregate, result in
a material adverse effect or (2) entered into any material transaction not
in the ordinary course of business, and (b) there has not been any event
or development in respect of the business, development or financial
condition of the Company or any of its Subsidiaries that would, either
individually or in the aggregate, result in a material adverse effect.
(e) The Company will, at the time of purchase, deliver to the
Initial Purchasers a certificate of the chief executive officer and chief
financial officer to the effect that the representations and warranties of
the Company as set forth in this Agreement and the conditions set forth in
paragraphs (a), (b), (c) and (d) of this Section 7 have been met and that
they are true and correct as of the Closing Date.
(f) The Company shall have furnished to the Initial Purchasers at
the time of purchase, an opinion of Paul, Hastings, Janofsky & Walker,
LLP, counsel for the Company, addressed to the Initial Purchasers, and
dated the time of purchase and in form reasonably satisfactory to Cahill
Gordon & Reindel, counsel for the Initial Purchasers, substantially
stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with full corporate power and authority to own
its properties and conduct its business as described in the
Preliminary Offering Memorandum and the Offering Memorandum, to
execute and deliver this Agreement and to issue, sell and deliver
the Notes as herein contemplated;
-36-
(ii) all of the issued and outstanding shares of capital stock
of each of the Corporate Subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable and the
partnership interests which the Company owns in the Partnership
Subsidiary have been duly authorized and validly issued and are
fully paid and non-assessable, and both the capital stock of the
Corporate Subsidiaries and the partnership interests in the
Partnership Subsidiary are owned by the Company or one or more of
the Subsidiaries and, to the best knowledge of such counsel, free
and clear of any pledge, lien, encumbrance, security interest,
preemptive rights or other claim; except as described in the
Preliminary Offering Memorandum and the Offering Memorandum and, to
the best knowledge of such counsel, there are no outstanding rights,
subscriptions, warrants, calls, options or other agreements of any
kind with respect to the capital stock or the partnership interests
of the Company or the Subsidiaries;
(iii) each of the Corporate Subsidiaries has been duly
incorporated and the Partnership Subsidiary has been duly formed,
and is validly existing as a corporation, in the case of the
Corporate Subsidiaries, or as a limited partnership, in the case of
the Partnership Subsidiary, in good standing under the laws of its
respective jurisdiction of incorporation or formation, as the case
may be, with full corporate or partnership power, as the case may
be, and authority to own its respective properties and conduct its
respective business as described in the Preliminary Offering
Memorandum and the
-37-
Offering Memorandum and to execute and deliver the Indenture and the
Guarantees;
(iv) the Company and the Subsidiaries are duly qualified, and
are in good standing, in each jurisdiction in which the nature of
its business or its ownership or its leasing of property requires
such qualification, except where the failure, individually or in the
aggregate, to be so qualified could have a material adverse effect
on the properties, assets, prospects, operations, business or
condition (financial or otherwise) of the Company and the
Subsidiaries;
(v) this Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors and constitutes a legal,
valid and binding obligation of the Company and the Guarantors
enforceable against the Company and each of the Guarantors in
accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance and fraudulent transfer, moratorium or similar laws
relating to or affecting creditors' rights generally and general
principles of equity;
(vi) the Indenture has been duly authorized, executed and
delivered by each of the Company and each of the Guarantors, and,
assuming due authorization, execution and delivery by the Trustee,
is a legal, valid and binding agreement of each of the Company and
each of the Guarantors enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws relating to
-38-
or affecting creditors' rights generally and general principles of
equity;
(vii) the Notes have been duly authorized by the Company and
the Guarantees have been duly authorized by each of the Guarantors
and, when executed and authenticated in accordance with the terms of
the Indenture and delivered to and paid for by the Initial
Purchasers, will be legal, valid and binding obligations of the
Company and the Guarantees will constitute legal, valid and binding
obligations of each Guarantor, in each case enforceable in
accordance with their terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws relating to or affecting
creditors' rights generally and general principles of equity;
(viii) the Exchange Notes have been duly authorized by the
Company and the Guarantees have been duly authorized by each of the
Guarantors and, when executed and authenticated in accordance with
the terms of the Indenture and delivered to and paid for by the
Initial Purchasers, will be legal, valid and binding obligations of
the Company and the Guarantees will constitute legal, valid and
binding obligations of each Guarantor, in each case enforceable in
accordance with their terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws relating to or affecting
creditors' rights generally and general principles of equity;
(ix) the Registration Rights Agreement has been duly
authorized, executed and delivered by the
-39-
Company and the Guarantors and constitutes a legal, valid and
binding obligation of the Company and the Guarantors enforceable
against the Company and each of the Guarantors in accordance with
its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance and
fraudulent transfer, moratorium or similar laws relating to or
affecting creditors' rights generally and general principles of
equity;
(x) (a) the Company has an authorized capitalization as set
forth under the heading entitled "Actual" in the section of the
Preliminary Offering Memorandum and the Offering Memorandum entitled
"Capitalization"; and (b) the outstanding shares of Common Stock
have been duly and validly authorized and issued and are fully paid,
nonassessable and free of statutory and contractual preemptive
rights;
(xi) the Notes, the Exchange Notes, the Guarantees, the
Indenture and the Registration Rights Agreement conform in all
material respects as to legal matters to the descriptions thereof
contained in the Preliminary Offering Memorandum and the Offering
Memorandum;
(xii) no consent, approval, authorization or order of any
governmental authority is required for the issuance and sale by the
Company of the Notes to the Initial Purchasers or the consummation
by the Company of the transactions contemplated herein, except as
such as may be required under states securities or "Blue Sky" laws,
or the laws of any foreign jurisdiction, as to which such counsel
need not express an opinion;
-40-
(xiii) no registration under the Act is required in connection
with the sale of the Notes to the Initial Purchasers as contemplated
by this Agreement and the Offering Memorandum or in connection with
the initial resale of the Notes by the Initial Purchasers in
accordance with this Agreement, and prior to the commencement of the
Exchange Offer (as defined in the Registration Rights Agreement),
and the effectiveness of the Shelf Registration Statement (as
defined in the Registration Rights Agreement), and the Indenture is
not required to be qualified under the Trust Indenture Act;
(xiv) the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby do not and will not conflict with,
or result in a breach of, or constitute a default under (nor
constitute any event which with notice, lapse of time, or both,
would constitute a breach of or default under), any provisions of
the charter or by-laws of the Company or any of the Subsidiaries or
under any provisions of any license, indenture, lease, mortgage,
deed of trust, bank loan, credit agreement or other agreement or
instrument known to such counsel to which the Company or any of the
Subsidiaries is a party or by which any of them or their respective
properties may be bound or affected, or under any law, regulation or
rule or any decree, judgment or order known to such counsel
applicable to the Company or any of the Subsidiaries;
(xv) to the best of such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents of a character
which are
-41-
required to be summarized or described in the Offering Memorandum
which have not been so summarized or described;
(xvi) to the best of such counsel's knowledge, there are no
actions, suits or proceedings pending or threatened against the
Company or any of the Subsidiaries or any of their respective
properties, at law or in equity or before or by any commission,
board, body, authority or agency which are required to be described
in the Offering Memorandum but are not so described;
(xvii) the Indenture is in sufficient form for due
qualification under the Trust Indenture Act.
Such counsel shall also state that, in connection with the
preparation of the Preliminary Offering Memorandum and the Offering
Memorandum, such counsel has participated in various discussions and
meetings with representatives of the Initial Purchasers, officers and
other representatives of the Company and representatives of the Company's
independent public accountants, and has examined copies of documents
furnished to such counsel by the Company as such counsel deems relevant.
Such counsel shall also state that nothing has come to the attention of
such counsel that led them to believe that the Preliminary Offering
Memorandum and the Offering Memorandum or any supplement thereto at the
date of such Preliminary Offering Memorandum and the Offering Memorandum
or such supplement, and at all times up to and including the time of
purchase or additional time of purchase, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading
(it being understood that such counsel need not
-42-
express an opinion with respect to the financial statements, the notes
thereto and the related schedules and other information of an accounting,
financial or statistical nature included in the Preliminary Offering
Memorandum and the Offering Memorandum).
In rendering any such opinion, such counsel may rely, as to matters
of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials and, as to
matters involving the application of the laws of any jurisdiction other
than the States of Delaware or New York or the United States, to the
extent satisfactory in form and scope to Cahill Gordon & Reindel, counsel
to the Initial Purchasers.
(g) The Initial Purchasers shall have received on the Closing Date
an opinion (satisfactory in form and substance to the Initial Purchasers)
dated the Closing Date of Cahill Gordon & Reindel, counsel to the Initial
Purchasers, covering substantially such matters as are customarily covered
in such opinions.
(h) The Initial Purchasers shall have received a "comfort letter"
from Deloitte & Touche LLP, independent public accountants for the Company
and the Guarantors, dated as of the date of this Agreement, addressed to
the Initial Purchasers and in form and substance satisfactory to the
Initial Purchasers and counsel to the Initial Purchasers. In addition, as
of the Closing Date, the Initial Purchasers shall have received a
"bring-down comfort letter" from Deloitte & Touche, LLP in form and
substance satisfactory to the Initial Purchasers and counsel to the
Initial Purchasers covering the same items and matters as covered in the
"comfort letter" but as of a date that is not more than three days prior
to the date thereof and any changes and additions to the Preliminary
-43-
Offering Memorandum that were made producing the Offering Memorandum.
(i) The Initial Purchasers shall have received a "comfort letter"
from Ernst & Young LLP, independent public accountants for the Company and
the Guarantors, dated as of the date of this Agreement, addressed to the
Initial Purchasers and in form and substance satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers.
(j) The Company, the Guarantors and the Trustee shall have entered
into the Indenture and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(k) The Company, the Guarantors and the Initial Purchasers shall
have entered into the Registration Rights Agreement and the Initial
Purchasers shall have received counterparts, conformed as executed,
thereof.
(l) The Notes shall have been approved as eligible for trading in
the PORTAL market.
(m) Between the time of execution of this Agreement and the time of
purchase of the Notes, there shall not have occurred any downgrading, nor
shall any notice have been given of (i) any intended or potential
downgrading or (ii) any review or possible change that does not indicate
an improvement in, or maintenance of, the rating accorded any securities
of or guaranteed by the Company or any subsidiary of the Company by any
"nationally recognized statistical rating organization", as that term is
defined in Rule 436(g)(2) promulgated under the Act.
(n) The Initial Purchasers shall have been furnished with certified
copies of such documents as they may
-44-
reasonably request and all closing documents from the closings of the
transactions contemplated hereby.
(o) Cahill Gordon & Reindel, counsel to the Initial Purchasers,
shall have been furnished with such documents as they may reasonably
request to enable them to review or pass upon the matters referred to in
this Section 7 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations,
warranties or conditions contained in this Agreement.
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by the Initial Purchasers on notice to the Company
at any time at or prior to the Closing Date, and such termination shall be
without liability of any party to any other party except that the Company shall
reimburse the Initial Purchasers for all of the reasonable out-of-pocket
expenses, including the reasonable expense of Initial Purchasers' counsel,
incurred by the Initial Purchasers in connection with this Agreement.
Notwithstanding any such termination, the provisions of Sections 3(g), 5, 6, 9,
10(d) and 13 shall remain in effect.
The Company's obligation under this Agreement to sell the Notes to
the Initial Purchasers on the Closing Date is subject to the Initial Purchasers
purchasing and paying for all of the Notes.
8. INITIAL PURCHASERS' INFORMATION. The Company and the Initial
Purchasers severally acknowledge that the statements set forth in (i) the last
paragraph on the front cover page concerning the forms of the offering by the
Initial Purchasers; (ii) the first paragraph on page 3 concerning stabilization
activities by the Initial Purchasers; and (iii) the statements concerning the
Initial Purchasers contained in
-45-
the fifth paragraph and the fifth sentence of the third paragraph under the
caption "Plan of Distribution" in the Offering Memorandum constitute the only
information furnished in writing by the Initial Purchasers expressly for use in
the Offering Memorandum.
9. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations
and warranties, covenants and agreements contained in this Agreement, including
the agreements contained in Sections 3(g) and 10(d), the indemnity agreements
contained in Section 5 and the contribution agreements contained in Section 6
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Initial Purchasers or any controlling
person thereof or by or on behalf of the Company, any of the Guarantors or any
controlling person of any thereof, and shall survive delivery of and payment for
the Notes to and by the Initial Purchasers. The representations contained in
Section 4 and the agreements contained in Sections 3(g), 5, 6, 10(d) and 13
shall survive the termination of this Agreement, including pursuant to Sections
7 and 10.
10. EFFECTIVE DATE OF AGREEMENT; TERMINATION. (a) This Agreement
shall become effective upon execution and delivery of a counterpart hereof by
each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Company from
the Initial Purchasers, without liability (other than with respect to Sections 5
and 6) on the Initial Purchasers if, on or prior to such date, (i) the Company
or any of the Guarantors shall have failed, refused or been unable to perform in
any material respect any agreement on its part to be performed under this
Agreement, (ii) any other condition of the obligations of the Initial Purchasers
under this Agreement as provided in Section 7 is not fulfilled when
-46-
and as required in any material respect, (iii) trading in securities generally
on the New York Stock Exchange shall have been suspended or materially limited,
or minimum prices shall have been established on such exchange by the
Commission, or by such exchange or other regulatory body or governmental
authority having jurisdiction, (iv) a general banking moratorium shall have been
declared by U.S. federal or New York authorities, or if a moratorium in foreign
exchange trading by major international banks or persons shall have been
declared, (v) there is an outbreak or escalation of hostilities or other
national or international calamity on or after the date of this Agreement, or if
there has been a declaration by the United States of a national emergency or
war, the effect of which shall be, in the Initial Purchasers' judgment, to make
it inadvisable or impracticable to proceed with the offering or delivery of the
Notes on the terms and in the manner contemplated in the Offering Memorandum or
(vi) there shall have been such a material adverse change in general economic,
political or financial conditions or the effect (or potential effect if the
financial markets in the United States have not yet opened) of international
conditions on the financial markets in the United States shall be such as, in
the Initial Purchasers' judgment, to make it inadvisable or impracticable to
proceed with the offering or delivery of the Notes on the terms and in the
manner contemplated in the Offering Memorandum.
(c) Any notice of termination pursuant to this Section 10 shall be
given at the address specified in Section 11 below by telephone or telephonic
facsimile, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any clause of
Section 10(b), or if the sale of the Notes provided for in this Agreement is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in this Agreement is not satisfied or because of any
-47-
refusal, inability or failure on the part of either of the Company or any
Guarantor to perform any agreement in this Agreement or comply with any
provision of this Agreement, the Company and the Guarantors will, subject to
demand by the Initial Purchasers, reimburse the Initial Purchasers for all of
its reasonable out-of-pocket expenses (including the reasonable fees and
expenses of the Initial Purchasers' counsel) incurred in connection with this
Agreement.
11. NOTICE. All communications with respect to or under this
Agreement, except as may be otherwise specifically provided in this Agreement,
shall be in writing and, if sent to the Initial Purchasers, shall be mailed,
delivered, or telecopied and confirmed in writing to SBC Warburg Dillon Read
Inc., 535 Madison Avenue, New York, New York 10022 (telephone: (212) 906-7000),
Attention: Corporate Finance Department, telecopy number: (212) 593-0164; and if
sent to the Company or the Guarantors, shall be mailed, delivered or telecopied
and confirmed in writing to Beazer Homes USA, Inc., 5775 Peachtree Dunwoody
Road, Suite C-550, Atlanta, Georgia 30342, telephone: (404) 250-3420, telecopy
number : (404) 250-3428, Attention: President, and Paul, Hastings, Janofsky &
Walker LLP, 399 Park Avenue, 31st Floor, New York, New York 10022, telephone:
(212) 318-6000, telecopy number: (212) 319-4090, Attention:
William F. Schwitter.
All such notices and communications shall be deemed to have been
duly given: (i) at the time delivered by hand, if personally delivered; (ii)
five business days after being deposited in the mail, postage prepaid, if
mailed; (iii) when receipt acknowledged if telecopied; and (iv) on the next
business day, if timely delivered to an air courier guaranteeing overnight
delivery.
12. PARTIES. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Initial Purchasers and the Company and the
Guarantors and the
-48-
controlling persons and agents referred to in Sections 5 and 6, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Notes from the Initial Purchasers.
13. CONSTRUCTION. This Agreement shall be construed in accordance
with the internal laws of the State of New York (without giving effect to any
provisions thereof relating to conflicts of law) and each of the parties hereto
consent to the jurisdiction of the courts of the State of New York. Each of the
parties hereto agrees to submit to the jurisdiction of the the U.S. Federal
Courts sitting in the City of New York for the purposes of any suit, action or
proceeding arising out of or relating to this Indenture. Nothing herein shall
affect the right to serve process in any other manner permitted by law or shall
limit the right of the Initial Purchasers to bring proceedings against the
Company and/or the Guarantors in the courts of any other jurisdiction.
14. CAPTIONS. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
15. SUBMISSION TO JURISDICTION. The Company and the Guarantors
irrevocably submit to the nonexclusive jurisdiction of any Federal court sitting
in New York over any suit, action or proceeding arising out of or relating to
this agreement. The Company and the Guarantors irrevocably waive, to the fullest
extent permitted by law, any objection they may now or thereafter have to the
laying of venue of any such court and any claim that any such suit, action or
proceeding brought in such a court has been brought in an inconvenient forum.
The Company and the Guarantors agree that a final judgment in any
-49-
such suit, action or proceeding brought in any such court shall be conclusive
and binding upon the Company and the Guarantors and may be enforced in any other
courts to the jurisdiction of which the Company and the Guarantors are or may be
subject, by suit upon such judgment.
16. COUNTERPARTS. This Agreement may be executed in various
counterparts and by the parties to this Agreement in separate counterparty, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
17. MISCELLANEOUS. SBC Warburg Dillon Read Inc., an indirect, wholly
owned subsidiary of Swiss Bank Corporation, is not a bank and is separate from
any affiliated bank, including any U.S. branch or agency of Swiss Bank
Corporation. Because SBC Warburg Dillon Read Inc. is a separately incorporated
entity, it is solely responsible for its own contractual obligations and
commitments, including obligations with respect to sales purchases of
securities. Securities sold, offered or recommended by SBC Warburg Dillon Read
Inc. are not deposits, are not insured by the Federal Deposit Insurance
Corporation, are not guaranteed by a branch or agency, and are not otherwise an
obligation or responsibility of a branch or agency.
A lending affiliate of SBC Warburg Dillon Read Inc. may have lending
relationships with issuers of securities underwritten or privately placed by SBC
Warburg Dillon Read Inc. To the extent required under the securities laws,
prospectuses and other disclosure documents for securities underwritten or
privately placed by SBC Warburg Dillon Read Inc. will disclose the existence of
any such lending relationships and whether the proceeds of the issue will be
used to repay debts owed to affiliates of SBC Warburg Dillon Read Inc.
-50-
Without the Company's prior written approval, the U.S. branches and
agencies of Swiss Bank Corporation will not share with SBC Warburg Dillon Read
Inc. any non-public information concerning the Company or any of the Guarantors,
and SBC Warburg Dillon Read Inc. will not share any non-public information
received from the Initial Purchasers with any of such U.S. branches and agencies
of Swiss Bank Corporation.
-51-
If the foregoing correctly sets forth the understanding among the
Company, the Guarantors and the Initial Purchasers, please so indicate in the
space provided below for the purpose, whereupon this letter and your acceptance
shall constitute a binding agreement among the Company, the Guarantors and the
Initial Purchasers.
BEAZER HOMES USA, INC.
By:*
---------------------------------
Name:
Title:
GUARANTORS:
BEAZER HOMES CORP.
By:*
---------------------------------
BEAZER/SQUIRES REALTY, INC.
By:*
---------------------------------
BEAZER HOMES SALES ARIZONA INC.
By:*
---------------------------------
BEAZER REALTY CORP.
By:*
---------------------------------
PANITZ HOMES REALTY, INC.
By:*
---------------------------------
BEAZER MORTGAGE CORPORATION
By:*
---------------------------------
BEAZER HOMES HOLDINGS CORP.
By:*
---------------------------------
BEAZER HOMES TEXAS HOLDINGS, INC.
By:*
---------------------------------
BEAZER HOMES TEXAS, L.P.
By:*
---------------------------------
* Executed by David S. Weiss as an authorized officer of
each of the Company and the Guarantors.
Confirmed and accepted as
of the date first above
written:
SBC WARBURG DILLON READ INC.
By: /s/ Allan P. Merrill
---------------------------------
Name: Allan P. Merrill
Title: Executive Director
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Eric A. Anderson
---------------------------------
Name: Eric A. Anderson
Title: Managing Director
SALOMON SMITH BARNEY
By: /s/ Beth May
---------------------------------
Name: Beth May
Title: Vice President
Exhibit A
Form of Registration Rights Agreement
Exhibit B
Principal Amount
Initial Purchasers of Notes
- ------------------ ----------------
SBC Warburg Dillon Read Inc............ $50.000,000
Donaldson Lufkin & Jenrette
Securities Corporation............... 30,000,000
Salomon Smith Barney................... 20,000,000
------------
$100,000,000
------------
Exhibit 4.18
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of March 25, 1998
by and among
BEAZER HOMES USA, INC.
THE GUARANTORS NAMED HEREIN
and
THE INITIAL PURCHASERS NAMED HEREIN
- --------------------------------------------------------------------------------
-1-
This Registration Rights Agreement (the "Agreement") is made and
entered into as of March 25, 1998 by and among BEAZER HOMES USA, INC., a
Delaware corporation (the "Company"), the GUARANTORS (as defined herein) and SBC
WARBURG DILLON READ INC., DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
and SALOMON SMITH BARNEY (the "Initial Purchasers"). The execution and delivery
of this Agreement is a condition to the obligations of the Initial Purchasers to
purchase $100,000,000 of the Company's 8 7/8% Senior Notes due 2008 under the
Purchase Agreement, dated as of March 20, 1998 (the "Purchase Agreement"), by
and among the Company, the Guarantors and the Initial Purchasers.
The Company, the Guarantors and the Initial Purchasers hereby agree
as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall
have the following meanings:
Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated by the Commission pursuant thereto.
Action: As defined in Section 8(c) of this Agreement.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Closing Date: The date that the Notes are purchased by the Initial
Purchasers pursuant to the Purchase Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence of (i) the
filing and effectiveness under the Act of
-2-
the Exchange Offer Registration Statement relating to the Notes to be issued in
the Exchange Offer, (ii) the maintenance of such Registration Statement
continuously effective and the keeping of the Exchange Offer open for a period
not less than the minimum period required pursuant to Section 3(b) of this
Agreement and (iii) the delivery by the Company to the Registrar under the
Indenture of New Notes in the same aggregate principal amount as the aggregate
principal amount of Old Notes that were so tendered.
Damages Payment Date: With respect to the Notes, each Interest
Payment Date.
Effectiveness Target Date: As defined in Section 5 of this
Agreement.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission pursuant thereto.
Exchange Offer: The registration under the Act by the Company and
the Guarantors of the New Notes pursuant to a Registration Statement pursuant to
which the Company and the Guarantors offer the Holders of all outstanding
Transfer Restricted Securities the opportunity to exchange all such outstanding
Old Notes that are Transfer Restricted Securities held by such Holders for New
Notes in an aggregate principal amount equal to the aggregate principal amount
of the Old Notes that are Transfer Restricted Securities tendered in such
exchange offer by such Holders.
Exchange Offer Effective Date: The date on which the Exchange Offer
Registration Statement is declared effective by the Commission.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
-3-
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Notes to (i) certain "qualified institutional buyers," as
such term is defined in Rule 144A under the Act, and (ii) other eligible
purchasers pursuant to Regulation S under the Act.
Guarantors: Each Subsidiary of the Company that, pursuant to the
Indenture, is, or is required to become, a guarantor of the obligations of the
Company under the Notes and the Indenture.
Holders: As defined in Section 2(b) of this Agreement.
Indenture: The Indenture, dated as of March 25, 1998, by and among
the Company, the Guarantors and First Trust National Association, as trustee
(the "Trustee"), pursuant to which the Notes are to be issued, as such Indenture
is amended or supplemented from time to time in accordance with its terms.
Initial Purchasers: SBC Warburg Dillon Read Inc., Donaldson, Lufkin
& Jenrette Securities Corporation and Salomon Smith Barney.
Interest Payment Date: As defined in the Notes.
NASD: National Association of Securities Dealers, Inc.
New Notes: The Company's 8 7/8% Senior Notes due 2008 to be issued
pursuant to the Indenture in connection with the Exchange Offer and evidencing
the same debt as the Old Notes, including the guarantees by the Guarantors.
Notes: Old Notes and New Notes.
Old Notes: The Company's 8 7/8% Senior Notes due 2008 to be issued
pursuant to the Indenture on the Closing date, including the guarantees by the
Guarantors.
-4-
Participating Broker Dealer: As defined in Section 6(a)(iii) of this
Agreement.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
and supplements thereto, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such Prospectus.
Registration Default: As defined in Section 5 of this Agreement.
Registration Statement: Any registration statement of the Company
and the Guarantors relating to (a) an offering of New Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement that is filed pursuant
to the provisions of this Agreement, in each case, including the Prospectus
included therein, all amendments and supplements thereto (including pre- and
post-effective amendments) and all exhibits and material incorporated by
reference or deemed to be incorporated by reference, if any, therein.
Shelf Filing Deadline: As defined in Section 4(a) of this Agreement.
Shelf Registration Statement: As defined in Section 4(a) of this
Agreement.
Subsidiary: With respect to any Person, any other Person of which a
majority of the equity ownership or the voting securities is at the time owned,
directly or indirectly, by such Person or by one or more other subsidiaries of
such Person or a combination thereof.
-5-
TIA: The Trust Indenture Act of 1939, as amended (15 U.S.C. Section
77aaa-77bbbb), as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note until the earliest to
occur of (i) the date on which each such Old Note has been exchanged by a person
other than a Broker-Dealer for a New Note in the Exchange Offer, (ii) following
the exchange by a Broker-Dealer in the Exchange Offer of an Old Note for a New
Note, the date on which such New Note is sold to a purchaser who receives from
such Broker-Dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration Statement, (iii) the date on which
such Note has been effectively registered under the Act and disposed of in
accordance with the Shelf Registration Statement or (iv) the date on which such
Note is distributed to the public pursuant to Rule 144 under the Act.
Underwritten Registration or Underwritten Offering: A registration
in which securities of the Company are sold to an underwriter for reoffering to
the public pursuant to an effective Registration Statement.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person beneficially owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless, due to a change in law or Commission policy after the
date hereof, the Exchange Offer shall not be permissible under applicable
federal law or Commission policy,
-6-
the Company and the Guarantors shall (i) cause to be filed with the Commission
as soon as practicable on or prior to 45 days after the Closing Date, a
Registration Statement under the Act relating to the New Notes and the Exchange
Offer and (ii) use their best efforts to cause such Registration Statement to be
declared effective by the Commission as soon as practicable on or prior to 120
days after the Closing Date. In connection with the foregoing, the Company and
the Guarantors shall (A) file all pre-effective amendments to such Registration
Statement as may be necessary to cause such Registration Statement to become
effective, (B) if applicable, file a post-effective amendment to such
Registration Statement pursuant to Rule 430A under the Act, (C) cause all
necessary filings in connection with the registration and qualification of the
New Notes to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer (provided, however, that
the Company and the Guarantors shall not be obligated to qualify as foreign
corporations in any jurisdiction in which they are not so qualified or to take
any action that would subject them to general service of process or taxation in
any jurisdiction where they are not so subject, except service of process with
respect to the offering and sale of the Notes and Exchange Notes) and (D) upon
the effectiveness of such Registration Statement, commence the Exchange Offer
and use their best efforts to issue on or prior to 45 days after the Exchange
Offer Effective Date, New Notes in exchange for all Old Notes tendered in the
Exchange Offer. The Exchange Offer shall be on the appropriate form permitting
registration of the New Notes to be offered in exchange for the Transfer
Restricted Securities and to permit resales of New Notes held by Broker-Dealers
as contemplated by Section 3(c) below. If, after such Exchange Offer
Registration Statement initially is declared effective by the Commission, the
Exchange Offer or the issuance of New Notes under the Exchange Offer or the
resale of New Notes received by Broker-Dealers in the Exchange Offer as
contemplated by Section 3(c) below is interfered with by any stop order,
injunction or other order or requirement of the Commission or any other
governmental agency or court, such Registration Statement shall be deemed not to
have become
-7-
effective for purposes of this Agreement during the period that such stop order,
injunction or other similar order or requirement shall remain in effect.
(b) The Company shall cause the Exchange Offer Registration
Statement to be effective continuously and shall keep the Exchange Offer open
for a period of not less than the minimum period required under applicable
federal and state securities laws to consummate the Exchange Offer; provided,
however, that in no event shall such period be less than 20 business days. The
Company and the Guarantors shall cause the Exchange Offer to comply with all
applicable federal and state securities laws. The Company and the Guarantors
shall only offer to exchange New Notes for Old Notes in the Exchange Offer, and
only the New Notes shall be registered under the Exchange Offer Registration
Statement.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus included in the Exchange Offer Registration
Statement that any Broker-Dealer that holds Old Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company), may exchange such Old
Notes pursuant to the Exchange Offer; provided, however, that such Broker-Dealer
may be deemed to be an "underwriter" within the meaning of the Act and must,
therefore, deliver a prospectus meeting the requirements of the Act in
connection with any resales of the New Notes received by such Broker-Dealer in
the Exchange Offer. Such "Plan of Distribution" section shall allow the use of
the Prospectus by all Persons subject to the prospectus delivery requirements of
the Act, including Participating Broker-Dealers, and shall also contain all
other information with respect to such resales by Broker-Dealers that the
Commission may require to permit such resales pursuant thereto, but such "Plan
of Distribution" shall not name any such Broker-Dealer or disclose the amount of
Notes held by any such Broker-Dealer except to the extent required by the
Commission
-8-
as a result of a change in policy after the date of this Agreement.
The Company and the Guarantors shall use their best efforts to keep
the Exchange Offer Registration Statement continuously effective, supplemented
and amended as required by the provisions of Section 6(c) below to the extent
necessary to ensure that it is available for resales of Notes acquired by
Broker-Dealers for their own accounts as a result of market-making activities or
other trading activities, and to ensure that it conforms with the requirements
of this Agreement, the Act and the policies, rules and regulations of the
Commission as announced from time to time. The Company shall provide sufficient
copies of the latest version of such Prospectus to Broker-Dealers promptly upon
request at any time during such period in order to facilitate such resales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company and the Guarantors are
not required to file an Exchange Offer Registration Statement or to consummate
the Exchange Offer because the Exchange Offer is not permitted by applicable law
or Commission policy or (ii) any Holder of Transfer Restricted Securities shall
notify the Company within 20 business days of the commencement of the Exchange
Offer that such Holder (A) is prohibited by applicable law or Commission policy
from participating in the Exchange Offer, or (B) may not resell the New Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder or (C)
is a Broker-Dealer and holds Old Notes (including the Initial Purchasers who
hold Old Notes as part of an unsold allotment from the original offering of the
Notes) acquired directly from the Company or one of its affiliates or (iii) the
Company and the Guarantors do not consummate the Exchange Offer within 45 days
following the effectiveness date of the Exchange Offer Registration Statement,
then the Company and the Guarantors shall (x) cause to be filed a shelf
registration statement
-9-
pursuant to Rule 415 under the Act, which may be an amendment to the Exchange
Offer Registration Statement (in either event, the "Shelf Registration
Statement"), on or prior to the earliest to occur of (1) the 45th day after the
date on which the Company determines that it is not required to file the
Exchange Offer Registration Statement or (2) the 45th day after the date on
which the Company receives notice from a Holder of Transfer Restricted
Securities as contemplated by clause (ii) above (such earliest date being the
"Shelf Filing Deadline"), which Shelf Registration Statement shall provide for
resales of all Transfer Restricted Securities the Holders of which shall have
provided the information required pursuant to Section 4(b) of this Agreement,
and (y) use its best efforts to cause such Shelf Registration Statement to be
declared effective by the Commission on or before the 120th day after the Shelf
Filing Deadline. The Company and the Guarantors shall use their best efforts to
keep such Shelf Registration Statement continuously effective, supplemented and
amended as required by the provisions of Sections 6(b) and (c) of this Agreement
to the extent necessary to ensure that it is available for resales of Notes by
the Holders of Transfer Restricted Securities entitled to the benefit of this
Section 4(a) and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a continuous period of two years following the
date on which such Shelf Registration Statement becomes effective under the Act
or such shorter period that will terminate when all the Notes covered by the
Shelf Registration Statement have been sold pursuant to such Shelf Registration
Statement.
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 15 business days after receipt of a request
therefor, such information regarding such Holder as the Company may reasonably
request for use in connection with any Shelf Registration Statement or
Prospectus
-10-
or preliminary Prospectus included in such Shelf Registration Statement. Each
Holder as to which any Shelf Registration Statement is being effected agrees to
furnish promptly to the Company all information required to be disclosed to make
the information previously furnished to the Company by such Holder not
materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any of the Registration Statements required by this Agreement
is not filed with the Commission on or prior to the date specified for such
filing in this Agreement, (ii) any of such Registration Statements has not been
declared effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
Exchange Offer has not been Consummated within 45 business days after the
Exchange Offer Effective Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or usable in
connection with resales of Transfer Restricted Securities during the periods
required by this Agreement (each such event referred to in clauses (i) through
(iv), a "Registration Default"), the Company and the Guarantors hereby agree to
pay liquidated damages to each Holder of Transfer Restricted Securities with
respect to the first 90-day period immediately following the occurrence of such
Registration Default, in an amount equal to $.05 per week per $1,000 principal
amount of Notes constituting Transfer Restricted Securities held by such Holder
for each week or portion thereof that the Registration Default continues. The
amount of the liquidated damages shall increase by an additional $.05 per week
per $1,000 in principal amount of Notes constituting Transfer Restricted
Securities with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum amount of liquidated damages of $.30
per week per $1,000 in principal amount of Notes constituting Transfer
Restricted Securities. Notwithstanding the foregoing, the Company and the
Guarantors shall not be required to pay liquidated damages to each Holder
-11-
of Transfer Restricted Securities if the Registration Default arises from the
failure of the Company and the Guarantors to file, or cause to become effective,
a Shelf Registration Statement within the time period required by Section 4 of
this Agreement and such Registration Default is by reason of the failure of the
Holders to provide the information regarding the Holder reasonably requested by
the Company, the NASD or any other regulatory agency having jurisdiction over
any of the Holders at least 10 business days prior to such Registration Default.
All accrued liquidated damages shall be paid by the Company on each Damages
Payment Date to the Holders by wire transfer of immediately available funds or
by federal funds check and to the Holders of certificated securities by mailing
a check to such Holders' registered addresses. Following the cure of all
Registration Defaults relating to any particular Transfer Restricted Securities,
the accrual of liquidated damages with respect to such Transfer Restricted
Securities will cease.
All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Transfer Restricted Security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall comply with all of the
provisions of Section 6(c) below, shall use their best efforts to effect such
exchange to permit the sale of Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:
-12-
(i) If, due to a change in law or Commission policy after the date
hereof, in the reasonable opinion of counsel to the Company there is a
question as to whether the Exchange Offer is permitted by applicable
federal law or Commission policy, the Company hereby agrees to seek a
no-action letter or other favorable decision from the Commission allowing
the Company and the Guarantors to Consummate an Exchange Offer for such
Old Notes. The Company hereby agrees to pursue the issuance of such a
no-action letter or favorable decision to the Commission staff level but
shall not be required to take commercially unreasonable action to effect a
change of Commission policy. The Company hereby agrees, however, to (A)
participate in telephonic conferences with the Commission, (B) deliver to
the Commission an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that
such an Exchange Offer should be permitted and (C) diligently pursue a
resolution (which need not be favorable) by the Commission of such
submission. The Initial Purchasers shall be given prior notice of any
action taken by the Company under this clause (i).
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation of the Exchange Offer, a written representation
to the Company (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the effect
that (A) it is not an affiliate of the Company or any of the Guarantors,
(B) it is not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any person to participate in, a
distribution of the New Notes to be issued in the Exchange Offer and (C)
it is acquiring the New Notes in its ordinary course of business. In
addition, all such Holders of Transfer Restricted Securities shall
otherwise cooperate in the Company's preparations for the Exchange Offer.
-13-
(iii) The Company, the Guarantors and the Initial Purchasers
acknowledge that the staff of the Commission has taken the position that
any broker-dealer that owns New Notes that were received by such
broker-dealer for its own account in the Exchange Offer (a "Participating
Broker-Dealer") may be deemed to be an "underwriter" within the meaning of
the Act and must deliver a prospectus meeting the requirements of the Act
in connection with any resale of such New Notes (other than a resale of an
unsold allotment resulting from the original offering of the Notes).
The Company, the Guarantors and the Initial Purchasers also
acknowledge that it is the Commission staff's position that if the
Prospectus contained in the Exchange Offer Registration Statement includes
a plan of distribution containing a statement to the above effect and the
means by which Participating Broker-Dealers may resell the New Notes,
without naming the Participating Broker-Dealers or specifying the amount
of New Notes owned by them, such Prospectus may be delivered by
Participating Broker-Dealers to satisfy their prospectus delivery
obligations under the Act in connection with resales of New Notes for
their own accounts, so long as the Prospectus otherwise meets the
requirements of the Act.
(b) Shelf Registration Statement. In the event that a Shelf
Registration Statement is required by this Agreement, the Company and the
Guarantors shall comply with all the provisions of Section 6(c) of this
Agreement and shall use their best efforts to effect such registration to permit
the sale of the Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution of such Transfer Restricted
Securities and, in connection therewith, the Company and the Guarantors will as
expeditiously as possible prepare and file with the Commission a Shelf
Registration Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in
-14-
accordance with the intended method or methods of distribution of such Transfer
Restricted Securities.
(c) General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus, to the extent that the same
are required to be available to permit resales of Notes by Broker-Dealers), the
Company and the Guarantors shall:
(i) use their best efforts to keep such Registration Statement
continuously effective for the applicable time period required hereunder
and provide all requisite financial statements (including, if required by
the Act or any regulation thereunder, financial statements of the
Guarantors) for the period specified in Section 3 or 4 of this Agreement,
as applicable; upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to contain
a material misstatement or omission or (B) not to be effective and usable
for resale of Transfer Restricted Securities during the period required by
this Agreement, the Company shall promptly notify the Holders to suspend
use of the Prospectus, and the Holders shall suspend use of the
Prospectus, and such Holders shall not communicate non-public information
to any third party, in violation of the securities laws, until the Company
and the Guarantors have made an appropriate amendment to such Registration
Statement, in the case of clause (A), correcting any such misstatement or
omission, and, in the case of either clause (A) or (B), the Company and
the Guarantors shall use their best efforts to cause such amendment to be
declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to such Registration Statement as may be
necessary to keep the
-15-
Registration Statement effective for the applicable period set forth in
Section 3 or 4 of this Agreement, as applicable, or such shorter period as
will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Act during the applicable time
period required hereunder and to comply fully with the applicable
provisions of Rules 424 and 430A under the Act in a timely manner; and
comply with the provisions of the Act and the Exchange Act with respect to
the disposition of all Transfer Restricted Securities covered by such
Registration Statement during such period in accordance with the intended
method or methods of distribution by the sellers of such securities set
forth in such Registration Statement as so amended or in such Prospectus
as so supplemented;
(iii) advise the underwriter(s), if any, the Initial Purchasers,
and, in the case of a Shelf Registration Statement, each of the selling
Holders promptly and, if requested by such Persons, to confirm such advice
in writing, (A) when the Prospectus or any prospectus supplement or
post-effective amendment has been filed and, with respect to any
Registration Statement or any post-effective amendment thereto, when the
same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to
the Prospectus or for additional information relating to such Registration
Statement or Prospectus, (C) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement under the
Act or of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or sale
in any jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening of
any event that makes any statement of a material fact made in the
Registration
-16-
Statement, the Prospectus, any amendment or supplement to such
Registration Statement or Prospectus, as the case may be, or any document
incorporated by reference in such Registration Statement or Prospectus
untrue in any material respect, or that requires the making of any
additions to or changes in the Registration Statement or the Prospectus in
order to make the statements in such Registration Statement or Prospectus
not misleading and that in the case of the Prospectus, it will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws,
the Company and the Guarantors shall use their best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(iv) furnish to each of the underwriter(s), if any, the Initial
Purchasers and, in the case of a Shelf Registration Statement, each of the
selling Holders before filing with the Commission, copies of any
Registration Statement or any Prospectus included in such Registration
Statement or Prospectus or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents incorporated
by reference after the initial filing of such Registration Statement),
which documents will be subject to the reasonable review of such
underwriter(s), if any, the Initial Purchasers, and such Holders for a
period of at least five business days, and the Company and the Guarantors
will not file any such Registration Statement or Prospectus or any
amendment or supplement to any such Registration Statement or Prospectus,
as the case may be, (including all such
-17-
documents incorporated by reference) to which any underwriter, Initial
Purchasers or selling Holder shall reasonably object within five business
days after the receipt of such Registration Statement or Prospectus. A
selling Holder or underwriter, if any, shall be deemed to have reasonably
objected to such filing if such Registration Statement, Prospectus,
amendment or supplement, as applicable, as proposed to be filed, contains
a material misstatement or omission;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus, (a)
provide copies of such document to the selling Holders and to the
underwriter(s), if any, (b) make the Company's and the Guarantors'
representatives available for discussion of such document and other
customary due diligence matters; provided that such discussion and due
diligence shall be coordinated on behalf of the selling Holders by one
counsel designated by and on behalf of such selling Holders and (c)
include such information in such document prior to the filing of such
document as such selling Holders or underwriter(s), if any, may reasonably
request;
(vi) make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition pursuant
to such Registration Statement and any attorney or accountant retained by
such selling Holders or any of the underwriter(s), if any, at the offices
where normally kept, during reasonable business hours, all relevant
financial and other records, pertinent corporate documents and properties
of the Company and the Guarantors and cause the Company's and the
Guarantors' officers, directors and employees to supply all information
reasonably requested by any such Holder, underwriter, attorney or
accountant in connection with such Registration Statement subsequent to
the filing thereof and prior to its effectiveness; provided, however, that
such persons shall first agree in writing with the Company that any
information that is
-18-
reasonably and in good faith designated by the Company in writing as
confidential at the time of delivery of such information shall be kept
confidential by such persons, unless and to the extent that (i) disclosure
of such information is required by court or administrative order or is
necessary to respond to inquiries of regulatory authorities, (ii)
disclosure of such information is required by law (including any
disclosure requirements pursuant to federal securities laws in connection
with the filing of the Shelf Registration Statement or the use of any
Prospectus), (iii) such information becomes generally available to the
public other than as a result of a disclosure or failure to safeguard such
information by such person or (iv) such information becomes available to
such person from a source other than the Company and its Subsidiaries and
such source is not bound by a confidentiality agreement;
(vii) if requested by any selling Holders or the underwriter(s), if
any, promptly incorporate in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, information with respect to the principal
amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid for Transfer Restricted
Securities and any other terms of the offering of the Transfer Restricted
Securities to be sold in such offering; and make all required filings of
such Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
provided, however, that the Company shall not be required to take any
action pursuant to this Section 6(c)(vii) that would, in the opinion of
counsel for the Company, violate applicable law;
-19-
(viii) furnish to each underwriter, if any, the Initial Purchasers
and upon request to the Company to a selling Holder without charge, at
least one conformed copy of the Registration Statement, as first filed
with the Commission, and of each amendment thereto, including, upon the
request of such Person, all documents incorporated by reference therein
and all exhibits to the extent requested (including exhibits incorporated
therein by reference);
(ix) deliver to each selling Holder, each of the underwriter(s), if
any, and the Initial Purchasers, without charge, such number of copies of
the Prospectus (including each preliminary prospectus) and any amendment
or supplement thereto as such Persons may reasonably request; the Company
and the Guarantors hereby consent to the use of the Prospectus and any
amendment or supplement to the Prospectus by each of the selling Holders
and each of the underwriter(s), if any, in connection with the offering
and the sale of the Transfer Restricted Securities in accordance with the
terms thereof and with U.S. Federal securities laws and Blue Sky laws
covered by the Prospectus or any amendment or supplement thereto;
(x) enter into such agreements (including an underwriting agreement
in form, scope and substance as is customary in underwritten offerings of
securities of this type) and take all such other reasonable actions in
connection therewith in order to expedite or facilitate the disposition of
the Transfer Restricted Securities pursuant to any Registration Statement
contemplated by this Agreement, all as may be reasonably requested by any
Holder of Transfer Restricted Securities or the underwriter(s), if any, in
connection with any sale or resale of Transfer Restricted Securities
pursuant to any Registration Statement contemplated by this Agreement; and
whether or not an underwriting agreement is entered into and whether or
not the registration is an Underwritten Registration, the Company and the
Guarantors shall (i) make such representations and warranties to the
Holders of such Transfer Restricted Securities and the
-20-
underwriters, if any, with respect to the business of the Company and its
Subsidiaries (including with respect to businesses or assets acquired or
to be acquired by any of them), and the Shelf Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings, and confirm the same if and when customarily requested; (ii)
obtain opinions of counsel to the Company and the Guarantors and updates
thereof (which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to the underwriters, if any, and special
counsel to the Holders of the Transfer Restricted Securities being sold),
addressed to each selling Holder of Transfer Restricted Securities and
each of the underwriters, if any, covering the matters customarily covered
in opinions requested in underwritten offerings and such other matters as
may be reasonably requested by such underwriters, if any, and special
counsel to Holders of Transfer Restricted Securities; (iii) use their best
efforts to obtain customary "cold comfort" letters and updates thereof
from the independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company or
any such subsidiary for which financial statements and financial data is,
or is required to be, included in the Registration Statement), addressed
(where reasonably possible) to each selling Holder of Transfer Restricted
Securities and each of the underwriters, if any, such letters to be in
customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with underwritten offerings; (iv) if
an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable to the selling
Holders and the underwriters, if any, than those set forth in Section 8
hereof (or such other provisions and procedures acceptable to Holders of a
majority in aggregate principal amount of Transfer
-21-
Restricted Securities covered by such Shelf Registration Statement and the
underwriters, if any); and (v) deliver such documents and certificates as
may be reasonably requested by the Holders of a majority in aggregate
principal amount of the Transfer Restricted Securities being sold and the
underwriters, if any, to evidence the continued validity of the
representations and warranties made pursuant to clause (i) above and to
evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company.
If at any time the representations and warranties of the Company and
the Guarantors contemplated in clause (A)(1) above cease to be true and
correct, the Company shall so advise the Initial Purchasers and the
underwriter(s), if any, and each selling Holder promptly and, if requested
by any of them, shall confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted Securities,
cooperate with and cause the Guarantors to cooperate with the selling
Holders, the underwriter(s), if any, and their respective counsel in
connection with the registration and qualification (or exemption from such
registration or qualification) of the Transfer Restricted Securities for
offer and sale under the securities or Blue Sky laws of such jurisdictions
as the selling Holders and underwriter(s), if any, may reasonably request
in writing and do any and all other acts or things necessary or advisable
to enable the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the Registration Statement; provided, however, that
neither the Company nor the Guarantors shall be required to register or
qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to the service of process or to
taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
-22-
(xii) if a Shelf Registration is filed pursuant to Section 2(b),
cooperate with the selling Holders of Registrable Securities and the
managing Underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to be
sold, which certificates shall not bear any restrictive legends and shall
be in a form eligible for deposit with The Depository Trust Company; and
enable such Transfer Restricted Securities to be in such denominations and
registered in such names as the managing underwriters, if any, or Holders
may reasonably request;
(xiii) in connection with any sale or transfer of Transfer
Restricted Securities that will result in such securities no longer being
Transfer Restricted Securities, cooperate with and cause the Guarantors to
cooperate with the selling Holders and the underwriter(s), if any, to
facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be
in such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to
any sale of Transfer Restricted Securities made by such underwriter(s);
(xiv) use its best efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers of such Transfer Restricted
Securities or the underwriter(s), if any, to consummate the disposition of
such Transfer Restricted Securities, subject to the proviso contained in
clause (xi) above;
(xv) if any fact or event contemplated by Section 6(c)(iii)(D) of
this Agreement shall exist or have occurred, prepare a supplement or
post-effective amendment to the Registration Statement or related
Prospectus or any
-23-
document incorporated in such Registration Statement or Prospectus by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Registration Statement will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein not misleading and the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading;
(xvi) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and
provide the Trustee under the Indenture with printed certificates for the
Transfer Restricted Securities that are in a form eligible for deposit
with The Depository Trust Company;
(xvii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter" that is
required to be retained in accordance with the rules and regulations of
the NASD);
(xviii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission in regards to any Registration
Statement, and make generally available to its securityholders, as soon as
practicable, a consolidated earning statement of the Company meeting the
requirements of Rule 158 (which need not be audited) for the twelve-month
period (A) commencing at the end of any fiscal quarter in which Transfer
Restricted Securities are sold to underwriters in a firm commitment or
reasonable best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of the
Company's first fiscal quarter
-24-
commencing after the effective date of the Registration Statement;
(xix) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the Trustee
and the Holders to effect such changes to the Indenture, if any, as may be
required for such Indenture to be so qualified in accordance with the
terms of the TIA; and execute, and use its best efforts to cause the
Trustee to execute, all customary documents that may be required to effect
such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely
manner.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) of this Agreement, such Holder
will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xv) of this Agreement, or until it is advised in writing (the "Advice") by
the Company that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus. If so directed by the Company, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of such notice. In the event that the Company shall give any such
notice, the time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 of this Agreement, as applicable, shall be
extended by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 6(c)(iii)(D) of this Agreement to
and including the date when each selling Holder covered by such
-25-
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 6(c)(xv) of this Agreement or shall
have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All fees and expenses incident to the Company's and the
Guarantors' performance of or compliance with this Agreement will be borne by
the Company regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and expenses
(including filings made with the NASD (and, if applicable, the reasonable fees
and expenses of any "qualified independent underwriter" and its counsel that may
be required by the rules and regulations of the NASD)); (ii) all fees and
expenses of compliance with federal securities and state Blue Sky or securities
laws; (iii) all expenses of printing (including printing certificates for the
New Notes to be issued in the Exchange Offer and printing of Prospectuses); (iv)
all reasonable fees and disbursements of counsel for the Company, the Guarantors
and, subject to Section 7(b) below, the Holders of Transfer Restricted
Securities; and (v) all reasonable fees and disbursements of independent
certified public accountants of the Company and the Guarantors (including the
expenses of any special audit and comfort letters required by or incident to
such performance).
The Company and the Guarantors will, in any event, bear their
internal expenses (including, without limitation, all salaries and expenses of
their officers and employees performing legal or accounting duties), the
expenses of any annual audit and the fees and expenses of any Person, including
special experts, retained by them.
Notwithstanding the foregoing or anything in this Agreement to the
contrary, each Holder of Transfer Restricted Notes shall pay all underwriting
discounts and commissions of any underwriters with respect to any Notes sold by
or on behalf of it.
-26-
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Cahill Gordon & Reindel or such other counsel as may be chosen by the Holders of
a majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) Each of the Company and the Guarantors, on a joint and several
basis, agrees to indemnify and hold harmless (i) the Initial Purchasers, each
Holder of Transfer Restricted Securities and each Participating Broker Dealer,
(ii) each person, if any, who controls any of the foregoing within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act (any of the persons
referred to in this clause (ii) being hereinafter referred to as a "controlling
person") and (iii) its agents, employees, officers and directors and the agents,
employees, officers and directors of any such controlling person (collectively,
the "Indemnified Persons") from and against any and all losses, liabilities,
claims, damages and expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all reasonable expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all reasonable amounts paid in
settlement of any claim or litigation) to which they or any of them may become
subject under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or
-27-
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the Company and the Guarantors will not be liable in any
such case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission (i) made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Indemnified Person relating to such
Indemnified Person expressly for use therein or (ii) contained in any
preliminary prospectus or any Prospectus if the Initial Purchasers, such Holder,
such Participating Broker-Dealer or such underwriter, if any, failed to send or
deliver a copy of the Prospectus (as then amended or supplemented if the Company
shall have timely furnished any amendments or supplements thereto) to the Person
asserting such losses, liabilities, claims or damages on or prior to the
delivery of written confirmation of any sale of securities covered thereby to
such Person in any case where such delivery is required by the Act and a court
of competent jurisdiction in a judgment not subject to appeal or final review
shall have determined that such Prospectus (as so amended or supplemented) would
have corrected such untrue statement or omission and the delivery thereof would
have eliminated such losses, claims, damages or liabilities. This indemnity
agreement will be in addition to any liability that the Company and the
Guarantors may otherwise have, including, but not limited to, liability under
this Agreement.
If any action is brought against any Indemnified Persons or any such
person in respect of which indemnity may be sought against the Company and the
Guarantors pursuant to the foregoing paragraph, such Indemnified Persons or such
person shall promptly notify the indemnifying party in writing of the
institution of such action and the indemnifying party shall assume the defense
of such action, including the employment of
-28-
counsel reasonably satisfactory to such indemnified party and payment of all
fees and expenses, provided, however, except to the extent that the indemnifying
party shall be materially prejudiced thereby (through the forfeiture of
substantive rights or defenses), that the omission to so notify the indemnifying
party shall not relieve the indemnifying party from any liability which they may
have to the Indemnified Persons or any such person or otherwise. Such
Indemnified Persons shall have the right to employ its own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
Indemnified Persons unless the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such action or the indemnifying party shall not have employed counsel to have
charge of the defense of such action or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to the indemnifying
party (in which case the indemnifying party shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the indemnifying
party and paid as incurred (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate counsel
(together with appropriate local counsel) in any one action or series of related
actions in the same jurisdiction representing the indemnified parties who are
parties to such action). The indemnifying party shall not be liable for any
settlement of any such claim or action effected without its written consent but
if settled with the written consent of the indemnifying party, the indemnifying
party agrees to indemnify and hold harmless any Indemnified Persons and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without
-29-
its written consent if (i) such settlement is entered into more than 60 business
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days'
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(b) In connection with any Registration Statement pursuant to which
a Holder of Transfer Restricted Securities offers or sells Transfer Restricted
Securities, such Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company and the Guarantors, their respective directors and officers
and any person controlling the Company or a Guarantor within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and each of
their agents, employees, officers and directors and the agents, employees,
officers and directors of such controlling person from and against any losses,
liabilities, claims, damages and expenses whatsoever (including but not limited
to reasonable attorneys' fees and any and all reasonable expenses whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever and any and all reasonable
amounts paid in settlement of any claim or litigation) to which they or either
of them may become subject under the Act, the Exchange Act or otherwise insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a
-30-
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that any such
loss, liability, claim, damage or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
relating to such Holder furnished to the Company by or on behalf of such Holder
expressly for use in such Registration Statement. This indemnity agreement will
be in addition to any liability that such Holder may otherwise have, including,
but not limited to, liability under this Agreement.
If any action is brought against the Company or the Guarantors or
any such person in respect of which indemnity may be sought against any Holder
of Transfer Restricted Securities pursuant to foregoing paragraph, the Company,
the Guarantors or such person shall promptly notify such Holder in writing of
the institution of such action and such Holder shall assume the defense of such
action, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses, provided, however,
except to the extent that the indemnifying party shall be materially prejudiced
thereby (through the forfeiture of substantive rights or defenses), that the
omission to so notify such Holder shall not relieve such Holder from any
liability which they may have to the Company, the Guarantors or any such person
or otherwise. The Company, the Guarantors or such person shall have the right to
employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Company or such person unless the
employment of such counsel shall have been authorized in writing by such Holder
of Transfer Restricted Securities in connection with the defense of such action
or such Holder shall not have employed counsel to have charge of the defense of
such action or such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are different from or
additional to those available to such Holder (in which case such Holder shall
not have the right to direct
-31-
the defense of such action on behalf of the indemnified party or parties, but
such Holder may employ counsel and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such Holder), in
any of which events such fees and expenses shall be borne by such Holder and
paid as incurred (it being understood, however, that such Holder shall not be
liable for the expenses of more than one separate counsel in any one action or
series of related actions in the same jurisdiction representing the indemnified
parties who are parties to such action). Anything in this paragraph to the
contrary notwithstanding, any Holder of Transfer Restricted Securities shall not
be liable for any settlement of any such claim or action effected without the
written consent of such Holder but if settled with the written consent of such
Holder, such Holder agrees to indemnify and hold harmless the Company, the
Guarantors and any such person from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnifying party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
-32-
(c) In order to provide for contribution in circumstances in which
the indemnification provided for in paragraphs (a) and (b) of this Section 8 is
for any reason held to be unavailable from the indemnifying party, or is
insufficient to hold harmless a party indemnified under this Section 8, the
Company, the Guarantors and the Indemnified Parties shall contribute to the
aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action or any claims asserted) to which the Company, and/or
the Guarantors and the Indemnified Parties may be subject, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors, on the one hand, and the Indemnified Parties, on the
other hand, from the offering of the Old Notes or, (ii) if such allocation is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Guarantors, on the one hand, and the
Indemnified Parties, on the other hand, in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Guarantors, on the one hand, and the
Indemnified Parties, on the other hand, shall be deemed to be in the same
proportion as the total proceeds from the offering of Old Notes (net of
discounts but before deducting expenses) received by the Company as set forth in
the table on the cover page of the Offering Memorandum bear to the total
proceeds received by such Holder with respect to its sale of Transfer Restricted
Securities or New Notes. The relative fault of the Company and the Guarantors,
on the one hand, and the Indemnified Parties, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Guarantors
or the Indemnified Parties and the parties'
-33-
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company, the Guarantors and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this paragraph (c)
of this Section 8 were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to above. Notwithstanding the provisions of paragraph (c) of this
Section 8, (i) in no case shall an Indemnified Party be required to contribute
any amount in excess of the amount by which the total received by such
Indemnified Party with respect to its sale of its Transfer Restricted Securities
or New Notes, as the case may be, exceeds the amount of any damages that such
Indemnified Party has otherwise been required to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this paragraph (c) of this
Section 8, each person, if any, who controls an Indemnified Party within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Indemnified Party, and each person, if
any, who controls the Company or the Guarantors within the meaning of Section 15
of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company or the Guarantors, subject in each case to clauses
(i) and (ii) of this paragraph. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any Action against such
party in respect of which a claim for contribution may be made against another
party or parties under this paragraph 8(c), notify such party or parties from
whom contribution may be sought, but, except to the extent that the indemnifying
party shall be materially prejudiced thereby (through the forfeiture of
substantive rights and defenses), the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any obligation it or they may have under this
-34-
paragraph (c) or otherwise. No party shall be liable for contribution with
respect to any action or claim settled without its written consent; provided,
however, that such written consent was not unreasonably withheld.
SECTION 9. RULE 144A
The Company and the Guarantors shall use their best efforts, for so
long as any Transfer Restricted Securities remain outstanding, to make available
to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale of such securities and any prospective purchaser of
such Transfer Restricted Securities from such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Act in order to permit resales
of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration under
this Agreement unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled under this Agreement to approve such
arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorneys, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that
-35-
such investment bankers and managers must be reasonably satisfactory to the
Company.
SECTION 12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to exercise
all rights provided in this Agreement, in the Indenture, the Purchase Agreement
or granted by law, including recovery of liquidated or other damages, will be
entitled to specific performance of its rights under this Agreement. The Company
and the Guarantors agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agree to waive the defense in any Action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Each of the Company and the
Guarantors will not on or after the date of this Agreement enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions of this Agreement. The Company has not previously entered into any
agreement granting any registration rights with respect to its securities to any
Person. The rights granted to the Holders under this Agreement do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's securities under any agreement in effect on the date of this
Agreement.
(c) Adjustments Affecting the Notes. Without the written consent of
the Holders of a majority in aggregate principal amount of outstanding Transfer
Restricted Notes, the Company and the Guarantors will not take any action, or
permit any change to occur, with respect to the Notes that would materially and
adversely affect the ability of the Holders to Consummate any Exchange Offer.
-36-
(d) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions of this Agreement may not be given unless the Company has
obtained the written consent of Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities. Notwithstanding the
foregoing, a waiver or consent to departure from the provisions of this
Agreement that relates exclusively to the rights of Holders whose securities are
being sold or tendered pursuant to a Registration Statement and that does not
affect directly or indirectly the rights of other Holders whose securities are
not being sold or tendered pursuant to such Registration Statement may be given
by the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities being so sold or tendered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivering, first-class
mail (registered or certified, return receipt requested), telecopier or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company or the Guarantors, at:
Beazer Homes USA, Inc.
5775 Peachtree Dunwoody Road
Suite C-550
Atlanta, Georgia 30342
Facsimile: (404) 250-3428
Attention: President
with a copy to:
Paul, Hastings, Janofsky & Walker LLP
399 Park Avenue
31st Floor
-37-
New York, New York 10022
Facsimile: (212) 319-4090
Attention: William F. Schwitter
All such notices and communications shall be deemed to have been
duly given: (i) at the time delivered by hand, if personally delivered; (ii)
five business days after being deposited in the mail, postage prepaid, if
mailed; (iii) when receipt acknowledged, if telecopied; and (iv) on the next
business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties to this Agreement in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Captions. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
-38-
(j) Submission to Jurisdiction. The Company and the Guarantors
irrevocably submit to the nonexclusive jurisdiction of any Federal court sitting
in New York over any suit, action or proceeding arising out of or relating to
this agreement. The Company and the Guarantors irrevocably waive, to the fullest
extent permitted by law, any objection it may now or thereafter have to the
laying of venue of any such court and any claim that any such suit, action or
proceeding brought in such a court has been brought in an inconvenient forum.
The Company and the Guarantors agree that a final judgment in any such suit,
action or proceeding brought in any such court shall be conclusive and binding
upon the Company and the Guarantors and may be enforced in any other courts to
the jurisdiction of which the Company and the Guarantors are or may be subject,
by suit upon such judgment.
(k) Severability. In the event that any one or more of the
provisions contained in this Agreement, or the application of any such provision
in any circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained in this Agreement shall not be affected or
impaired thereby.
(l) Entire Agreement. This Agreement together with the other
Operative Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties to
this Agreement in respect of the subject matter contained in this Agreement.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to in this Agreement with respect to the
registration rights granted by the Company with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
BEAZER HOMES USA, INC.
By:*
-----------------------
Name:
Title:
GUARANTORS:
BEAZER HOMES CORP.
By:*
-----------------------
BEAZER/SQUIRES REALTY, INC.
By:*
-----------------------
BEAZER HOMES SALES ARIZONA INC.
By:*
-----------------------
BEAZER REALTY CORP.
By:*
-----------------------
PANITZ HOMES REALTY, INC.
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By:*
-----------------------
BEAZER MORTGAGE CORPORATION
By:*
-----------------------
BEAZER HOMES HOLDINGS CORP.
By:*
-----------------------
BEAZER HOMES TEXAS HOLDINGS, INC.
By:*
-----------------------
BEAZER HOMES TEXAS, L.P.
By:*
-----------------------
* Executed by David S. Weiss as an authorized officer of each of the Company
and the Guarantors.
-41-
Confirmed and Accepted and agreed
as of the date first above
written:
SBC WARBURG DILLON READ INC.
By:/s/ Allan P. Merrill
--------------------------------
Name: Allan P. Merrill
Title: Executive Director
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:/s/ Eric A. Anderson
--------------------------------
Name: Eric A. Anderson
Title: Managing Director
SALOMON SMITH BARNEY
By:/s/ Richard L. Moriarty
--------------------------------
Name: Richard L. Moriarty
Title: Managing Director
EXHIBIT 5.1
April 24, 1998
Beazer Homes USA, Inc.
5775 Peachtree Dunwoody Road
Suite C-550
Atlanta, Georgia 30342
BEAZER HOMES USA, INC.
REGISTRATION STATEMENT ON FORM S-4
Ladies and Gentlemen:
This opinion is delivered in our capacity as counsel to Beazer Homes USA,
Inc., a Delaware corporation (the "Issuer"), in connection with the Issuer's
registration statement on Form S-4 (the "Registration Statement") filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
relating to the offering by the Issuer of up to $100,000,000 aggregate principal
amount at maturity of its 8 7/8% Senior Notes due 2008 (the "Notes").
In connection with this opinion, we have examined copies or originals of
such documents, resolutions, certificates and instruments of the Issuer as we
have deemed necessary to form a basis for the opinion hereinafter expressed. In
addition, we have reviewed certificates of public officials, statutes, records
and other instruments and documents as we have deemed necessary to form a basis
for the opinion hereinafter expressed. In our examination of the foregoing, we
have assumed, without independent investigation, (i) the genuineness of all
signatures, and the authority of all persons or entities signing all documents
examined by us and (ii) the authenticity of all documents submitted to us as
originals and the conformity to authentic original documents of all copies
submitted to us as certified, conformed or photostatic copies. With regard to
certain factual matters, we have relied, without independent investigation or
verification, upon statements and representations of representatives of the
Issuer.
Based upon and subject to the foregoing, we are of the opinion that, as of
the date hereof, when the Notes have been duly authenticated by U.S. Bank Trust
National Association in its capacity as Trustee, and duly executed and delivered
on behalf of the Issuer against payment therefor as contemplated by the
Registration Statement, the Notes will be legally issued and will constitute
binding obligations of the Issuer, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance and transfer, moratorium or other laws now
or hereafter in effect relating to or affecting the rights or remedies of
creditors generally and by general principles of equity (whether applied in a
proceeding at law or in equity) including, without limitation, standards of
materiality, good faith and reasonableness in the interpretation and enforcement
of contracts, and the application of such principles to limit the availability
of equitable remedies such as specific performance.
We hereby consent to being named as counsel to the Issuer in the
Registration Statement, to the references therein to our firm under the caption
"Legal Matters" and to the inclusion of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Commission thereunder.
Very truly yours,
/s/ Paul, Hastings, Janofsky & Walker LLP
Exhibit 10.17
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT ("Amendment") is entered
into as of March 19, 1998 among BEAZER HOMES USA, INC., a Delaware corporation
(the "Borrower"), BEAZER MORTGAGE CORPORATION, a Delaware corporation, BEAZER
HOMES CORP., a Tennessee corporation, BEAZER HOMES SALES ARIZONA INC., a
Delaware corporation, BEAZER REALTY CORP., a Georgia corporation, BEAZER SQUIRES
REALTY, INC., a North Carolina corporation, PANITZ HINES REALTY, Inc., a Florida
corporation, BEAZER HOMES HOLDING CORP., a Delaware corporation, BEAZER TEXAS
HOLDINGS, INC., a Delaware corporation, and BEAZER HOMES TEXAS, L.P., a Delaware
limited partnership (collectively, the "Guarantors") and THE FIRST NATIONAL BANK
OF CHICAGO, BANKBOSTON, N.A. (formerly known as The First National Bank of
Boston), BANK ONE, ARIZONA, N.A., GUARANTY FEDERAL BANK, F.S.B., BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION (successor by merger to Bank of America
Illinois), AMSOUTH BANK, COMERICA BANK and SUNTRUST BANK (collectively, the
"Banks") and THE FIRST NATIONAL BANK OF CHICAGO as Agent (the "Agent") for the
Banks and as Issuing Bank under the Agreement (as hereinafter defined).
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the Banks, the Agent and the
Issuing Bank are party to that certain Credit Agreement dated as of October 22,
1996, as amended by First Amendment to Credit Agreement dated as of July 29,
1997 and Second Amendment to Credit Agreement dated as of December 10, 1997
(such Credit Agreement, as so amended, being herein referred to as the
"Agreement") providing for certain loans to be made from time to time by the
Banks to the Borrower not to exceed, at any time outstanding, the principal sum
of $200,000,000; and
WHEREAS, the parties desire to amend the Agreement to increase the
Debt permitted under Section 6.02(B);
NOW, THEREFORE, for good and valuable consideration, the Borrower,
the Guarantors, the Banks, the Agent and the Issuing Bank hereby covenant and
agree as follows:
1. Permitted Debt. Section 6.02(B) is hereby amended by deleting
"$40,000,000" and inserting in lieu thereof "$125,000,000." 2. Ratification. The
Agreement, as amended hereby, is hereby ratified and remains in full force and
effect.
3. Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties to this Amendment in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorize, as of the
date first written.
BORROWER:
BEAZER HOMES USA, INC.
By: /s/ David S. Weiss
David S. Weiss
Executive Vice President and
Chief Financial Officer
GUARANTORS:
BEAZER MORTGAGE CORPORATION
By: /s/ David S. Weiss
David S. Weiss
Vice President
BEAZER HOMES SALES ARIZONA INC.
By: /s/ David S. Weiss
David S. Weiss
Vice President
-2-
BEAZER REALTY CORP.
By: /s/ David S. Weiss
David S. Weiss
Vice President
BEAZER/SQUIRES REALTY, INC.
By: /s/ David S. Weiss
David S. Weiss
Vice President
PANITZ HOMES REALTY INC.
By: /s/ David S. Weiss
David S. Weiss
Vice President
BEAZER HOMES HOLDINGS CORP.
By: /s/ David S. Weiss
David S. Weiss
Vice President
-3-
BEAZER TEXAS HOLDINGS, INC.
By: /s/ David S. Weiss
David S. Weiss
Vice President
BEAZER HOMES TEXAS, L.P.
By: BEAZER TEXAS HOLDINGS, INC.
its general partner
By: /s/ David S. Weiss
David S. Weiss
Vice President
BANKS:
THE FIRST NATIONAL BANK OF CHICAGO,
as a Bank, the Agent and the Issuing Bank
By: /s/ Gregory A. Gilbert
Name: Gregory A. Gilbert
Vice President
BANK ONE, ARIZONA, N.A.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
-4-
GUARANTY FEDERAL BANK, F.S.B.
By: /s/ Richard V. Thompson
Name: Richard V. Thompson
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION (successor by merger to
Bank of America Illinois)
By: /s/ Daniel E. Walsh
Name: Daniel E. Walsh
Title: Vice President
BANKBOSTON, N.A. (formerly known as The
First National Bank of Boston)
By: /s/ Kevin C. Hake
Name: Kevin C. Hake
Title: Director
AMSOUTH BANK
By: Ronny Hudspeth
Name: Ronny Hudspeth
Title:Vice President
-5-
COMERICA BANK
By: /s/ David J. Campbell
Name: David J. Campbell
Title: Vice President
SUNTRUST BANK, ATLANTA
By: /s/ R. Michael Dunlap
Name: R. Michael Dunap
Title: Vice President
By: /s/ Jonathan H. James
Name: Jonathan H. James
Title: B.O.
-6-
EXHIBIT 12
RATIO OF EARNINGS TO FIXED CHARGES:
3 MOS. ENDED
DECEMBER 31,
--------------------
COMPUTATION OF HISTORICAL RATIOS: 1993 1994 1995 1996 1997 1996 1997
--------- --------- --------- --------- --------- --------- ---------
Earnings--
EBIT.............................. 19,664 27,401 18,920 30,193 18,194 4,389 2,958
Fixed charges..................... 6,776 11,657 15,472 15,516 17,078 3,528 4,937
Less: interest capitalized........ (6,553) (11,306) (14,737) (14,176) (16,159) (3,181) (4,615)
Add: interest amortized to COS.... 3,049 9,768 13,268 15,134 14,857 2,740 3,047
--------- --------- --------- --------- --------- --------- ---------
Earnings available for fixed
charges......................... 22,936 37,520 32,923 46,667 33,970 7,476 6,327
--------- --------- --------- --------- --------- --------- ---------
Fixed charges--
Interest incurred and
capitalized..................... 6,553 11,306 14,737 14,176 16,159 3,181 4,615
Interest expense.................. -- -- -- -- --
Portion of rents representative of
interest........................ 223 351 735 1,340 919 347 322
--------- --------- --------- --------- --------- --------- ---------
Total fixed charges............... 6,776 11,657 15,472 15,516 17,078 3,528 4,937
--------- --------- --------- --------- --------- --------- ---------
Ratio of earnings to fixed
charges............................ 3.38 3.22 2.13 3.01 1.99 2.12 1.28
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Beazer Homes USA, Inc. (the "Company") on Form S-4 of our report dated October
30, 1997 (November 28, 1997 as to Note 13), appearing in and incorporated by
reference in the Annual Report on Form 10-K of the Company for the year ended
September 30, 1997 and to the reference to us under the heading "Experts" in the
Prospectus, which is a part of this Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Atlanta, Georgia
April 23, 1998
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-4 and related Prospectus of Beazer Homes USA,
Inc. for the registration of $100,000,000 of 8 7/8% Senior Notes due 2008 and to
the incorporation by reference therein of our report dated October 27, 1995,
with respect to the consolidated financial statements of Beazer Homes USA, Inc.
included in its Annual Report (Form 10-K) for the year ended September 30, 1997,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Atlanta, Georgia
April 23, 1998
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility of
a Trustee Pursuant to Section 305(b)(2)___
-------------------------------------------------------
U.S. BANK TRUST NATIONAL ASSOCIATION
F/K/A FIRST TRUST NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
111 E. Wacker Drive, Suite 3000
Chicago, Illinois 60601 36-4046888
(Address of principal executive offices) (Zip Code) I.R.S. Employer
Identification No.
Michael T. Goodwin
111 E. Wacker Drive, Suite 3000
Chicago, Illinois 60601
Telephone (312) 228-9455
(Name, address and telephone number of agent for service)
BEAZER HOMES USA, INC.
(Exact name of obligor as specified in its charter)
Delaware 58-2086934
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5775 Peachtree Dunwoody Road
Suite C-550
Atlanta, Georgia 30342
(Address of Principal Executive Offices) (Zip Code)
(Guarantors are identified on the next page )
8 7/8% Senior Notes due 2008
(Title of the Indenture Securities)
================================================================================
Guarantors
Beazer Homes Corp.
Beazer/Squires Realty, Inc.
Beazer Homes Sales Arizona, Inc.
Beazer Realty Corp.
Panitz Homes Realty, Inc.
Beazer Mortgage Corporation
Beazer Homes Holdings Corp.
Beazer Homes Texas Holdings, Inc.
Beazer Homes Texas, L.P.
2
FORM T-1
Item 1. GENERAL INFORMATION. Furnish the following information as to the
Trustee.
a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency
Washington, D.C.
b) Whether it is authorized to exercise corporate trust powers.
Yes
Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the
Trustee, describe each such affiliation.
None
Items 3-15 Not applicable because, to the best of Trustee's knowledge, the
Trustee is not a trustee under any other indenture under which any
other securities or certificates of interest or participation in any
other securities of the obligor are outstanding and there is not,
nor has there been, a default with respect to securities issued
under this indenture.
Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of
this statement of eligibility and qualification.
1. A copy of the Articles of Association of the Trustee now in
effect, incorporated herein by reference to Exhibit 1 of Form
T-1, Registration No. 333-18235.
2. A copy of the certificate of authority of the Trustee to
commence business, incorporated herein by reference to Exhibit
2 to Item 16 of Form T-1, Registration No. 333-18235
3. A copy of the certificate of authority of the Trustee to
exercise corporate trust powers, incorporated herein by
reference to Exhibit 3 to Item 16 of Form T-1, Registration
No. 333-18235
4. A copy of the existing bylaws of the Trustee, as now in
effect, incorporated herein by reference to Exhibit 4 of Form
T-1, Registration No. 333-18235
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the
Trust Indenture Act of 1939, incorporated herein by reference
to Exhibit 6 of Form T-1, Registration No. 333-18235
7. A copy of the latest report of condition of the Trustee
published pursuant to law or the requirements of its
supervising or examining authority, filed herewith.
8. Not applicable.
9. Not applicable.
3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
Trustee, U.S. BANK TRUST NATIONAL ASSOCIATION, F/K/A FIRST TRUST NATIONAL
ASSOCIATION, a national banking association organized and existing under the
laws of the United States of America, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Chicago,State of Illinois on the
24th day of April, 1998.
U.S. BANK TRUST NATIONAL ASSOCIATION
f/k/a FIRST TRUST NATIONAL ASSOCIATION
By: /s/ Michael T.Goodwin
---------------------
Michael T. Goodwin
Assistant Vice President and Assistant Secretary
4
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED
SAVINGS BANKS FOR DECEMBER 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the Last business day of the
quarter.
Schedule RC - Balance Sheet
- --------------------------------------------------------------------------------
ASSETS Dollar Amounts in Thousands
---------------------------
1. Cash and balances due from depository institutions (from schedule RC-A): RCON
----
a. Noninterest-bearing balances and currency and coin (1) 0081....... 55,536 1.a
--------
b. Interest-bearing balances (2) 0071....... 0 1.b
--------------------------------
2. Securities:
a. Held-to-maturity securities (from schedule RC-B, column A) 1754....... 0 2.a
----------
b. Available-for-sale securities (from Schedule RC-B column D) 1773....... 3,216 2.b
---------
3. Federal funds sold and securities purchased under
agreement to resell 1350....... 0 3.
----------------------------------------------------
4. Loans and lease financing receivables: RCON
----
a. Loans and leases, net of unearned income
(from Schedule RC-C) 2122.....0 ............................... 4.a
-------------------------------------
b. LESS: Allowance for loan and lease losses 3123.....0 ............................... 4.b
----------------
c. LESS: Allocated transfer risk reserve 3128.....0 ............................... 4.c
--------------------
d. Loans and leases, net of unearned income, 2125.......
allowance, and reserve (item 4.a minus 4.b and 4.c) 0 4.d
-------------------
5. Trading assets 3545....... 0 5.
-----------------------------------------------------------
6. Premises and fixed assets (including capitalized leases) 2145....... 95 6.
------------------
7. Other real estate owned (from Schedule RC-M) 2150....... 0 7.
------------------------------
8. Investments in unconsolidated subsidiaries and associates companies (from
Schedule RC-M) 2130....... 0 8.
------------------------------------------------------------
9. Customers' liability to this bank on acceptances outstanding 2155....... 0 9.
--------------
10. Intangible assets (from Schedule RC-M) 2143....... 48,072 10.
------------------------------------
11. Other assets (from Schedule RC-F) 2160....... 2,435 11.
-----------------------------------------
12. Total assets (sum of items 1 through 11) 2170....... 109,354 12.
----------------------------------
- -------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
Schedule RC - Balance Sheet
- --------------------------------------------------------------------------------
LIABILITIES
13. Deposits: RCON
----
a. In domestic offices (sum of totals of
columns A and C from Schedule RC-E) 2200....... 0 13.a
-----------------------------------
RCON
----
(1) Noninterest-bearing (1) 6631.....0 ................................ 13.a.1
---------------------------
(2) Interest-bearing 6636.....0 ................ ............... 13.a.2
----------------------------------
b. In foreign offices, Edge and Agreement subsidiaries, ...............................
and IBFs ...............................
-------------------------------------------------
(1) Noninterest-bearing ...............................
-------------------------------
(2) Interest-bearing
-------------------------------
14. Federal funds purchase and securities sold under
agreements to repurchase 2800....... 0 14.
-------------------------------------------------
15. a. Demand notes issued to the U.S. Treasury 2840....... 0 15.a
------------------------------
b. Trading liabilities 3548 ...... 0 15.b
---------------------------------------------------
16. Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
a. With a remaining maturity of one year or less 2332....... 0 16.a
-------------------------
b. With a remaining maturity of more than one year
through three years A547....... 0 16.b
-------------------------
c. With a remaining maturity of more than three years A548....... 0 16.c
-------------------
17. Not applicable
18. Bank's liability on acceptances executed and outstanding 2920....... 0 18.
------------------
19. Subordinated notes and debentures (2) 3200....... 0 19.
-------------------------------------
20. Other liabilities (from Schedule RC-G) 2930....... 2,072 20.
------------------------------------
21. Total liabilities (sum of items 13 through 20) 2948....... 2,072 21
----------------------------
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus 3838....... 0 23.
-----------------------------
24. Common stock 3230....... 1,000 24.
--------------------------------------------------------------
25. Surplus (exclude all surplus related to preferred stock) 3839 106,712 25.
------------------
26. a. Undivided profits and capital reserves 3632....... ( 430) 26.a
--------------------------------
b. Net unrealized holding gains (losses) on available-for-sale
securities 8434....... 0 26.b
-----------------------------------------------------------
27. Cumulative foreign currency translation adjustments ...............................
-----------------------
28. Total equity capital (sum of items 23 through 27) 3210....... 107,282 28.
-------------------------
29. Total liabilities and equity capital (sum of items 21 and 28) 3300....... 109,354 29.
-------------
Schedule RC - Balance Sheet
- --------------------------------------------------------------------------------
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below
that best describes the most comprehensive level of auditing work
performed for the bank by independent external auditors as of any date
during 1996_______________________ 6724....... N/A M.1
1 = Independent audit of the bank conducted in accordance 5 = Review of the bank's financial statements by external
with generally accepted auditing standards by a certified auditors
public accounting firm which submits a report on the bank
2 = Independent audit of the bank's parent holding company 6 = Compilation of the bank's financial statements by
conducted in accordance with generally accepted auditing external auditors
standards by a certified public accounting firm which
submits a report on the consolidated holding company (but
not on the bank separately)
3 = Directors' examination of the bank conducted in 7 = Other audit procedures (excluding tax preparation work)
accordance with generally accepted auditing standards by
a certified public accounting firm (may be required by
state chartering authority)
4 = Directors' examination of the bank performed by other 8 = No external audit work
external auditors (may be required by state chartering
authority)
- ----------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited life preferred stock and related surplus.
Schedule RC-A - Cash and Balances Due From Depository Institutions
- --------------------------------------------------------------------------------
Exclude assets held for trading. Dollar Amounts
in Thousands
---------------------
1. Cash items in process of collection, unposted debits, and currency and coin: RCON
----
a. Cash items in process of collection and unposted debits 0020... 0 1.a
----------------------------
b. Currency and coin 0080... 0 1.b
-----------------------------------------------------------------
2. Balances due from depository institutions in the U.S.:
a. U.S. branches and agencies of foreign banks 0083... 0 2.a
----------------------------------------
b. Other commercial banks in the U.S. and other depository institutions in the U.S. 0085... 55,536 2.b
---
3. Balances due from banks in foreign countries and foreign central banks:
a. Foreign branches of other U.S. banks 0073... 0 3.a
-----------------------------------------------
b. Other banks in foreign countries and foreign central banks 0074... 0 3.b
-------------------------
4. Balances due from Federal Reserve Banks 0090... 0 4.
------------------------------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, sum of items 1.a and 1.b) 0010... 55,536 5.
----
Memorandum
- -------------------------------------------------------------------------------- Dollar
Amounts in Thousands
---------------------
1. Noninterest-bearing balances due from commercial banks in the U.S. RCON
----
(included in items 2.a and 2.b above) 0050... 55,536 M.1
--------------------------------------------------
EXHIBIT 99.1
LETTER OF TRANSMITTAL
BEAZER HOMES USA, INC.
OFFER TO EXCHANGE ITS
8 7/8% SENIOR NOTES DUE 2008
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
8 7/8% SENIOR NOTES DUE 2008
PURSUANT TO THE PROSPECTUS DATED , 1998
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME, ON , 1998,
UNLESS THE OFFER IS EXTENDED.
The Exchange Agent for the Exchange Offer is:
U.S. BANK TRUST NATIONAL ASSOCIATION
F/K/A FIRST TRUST NATIONAL ASSOCIATION
BY REGISTERED, CERTIFIED OR OVERNIGHT MAIL: BY FIRST CLASS MAIL:
U.S. Bank Trust National Association U.S. Bank Trust National Association
Attn: Specialized Finance P.O. Box 64485
180 East Fifth Street St. Paul, MN 55101
St. Paul, MN 55101
BY HAND (NEW YORK DEPOSITORY ONLY): BY HAND (ALL OTHERS):
U.S. Bank Trust National Association U.S. Bank Trust National Association
100 Wall Street, 20th Floor Fourth Floor--Bond Drop Window
New York, NY 10005 180 East Fifth Street
Attention: Cathy Donohue St. Paul, MN 55101
BY FACSIMILE: TELEPHONE NUMBER:
(612) 244-1537 (For Eligible Institutions (800) 934-6802 Bondholder Services
Only)
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old Notes (as
defined below) either if Old Notes are to be forwarded herewith or if tenders of
Old Notes are to be made by book-entry transfer to an account maintained by U.S.
Bank Trust National Association (the "Exchange Agent") at The Depository Trust
Company ("DTC") pursuant to the procedures set forth in "The Exchange Offer --
Procedures for Tendering Old Notes" in the Prospectus.
Holders of Old Notes whose certificates (the "Certificates") for such Old
Notes are not immediately available or who cannot deliver their Certificates and
all other required documents to the Exchange Agent on or prior to the Expiration
Date (as defined in the Prospectus) or who cannot complete the procedures for
book-entry transfer on a timely basis, must tender their Old Notes according to
the guaranteed delivery procedures set forth in "The Exchange Offer --
Procedures for Tendering Old Notes -- Guaranteed Delivery" in the Prospectus.
SEE INSTRUCTION 1. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY
TO THE EXCHANGE AGENT.
2
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
- -------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES TENDERED
- -------------------------------------------------------------------------------------------
IF BLANK, PLEASE PRINT NAME AND OLD NOTES TENDERED
ADDRESS OF REGISTERED HOLDER (ATTACH ADDITIONAL LIST OF NOTES)
- -------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
OF
OLD NOTES
PRINCIPAL AMOUNT TENDERED
CERTIFICATE OF (IF LESS THAN
NUMBER(S)* OLD NOTES ALL)**
- -------------------------------------------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
TOTAL AMOUNT TENDERED:
- -------------------------------------------------------------------------------------------
* Need not be completed by book-entry holders.
** Old Notes may be tendered in whole or in part in denominations of $1,000 and
integral multiplies thereof. All Old Notes held shall be deemed tendered
unless a lesser number is specified in this column.
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE
THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
DTC Account No.______________________ Transaction Code No. ______________
/ / CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s): ___________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution which Guaranteed Delivery: _____________________________
IF GUARANTEED DELIVERY IS TO BE MADE BY BOOK-ENTRY TRANSFER:
Name of Tendering Institution: _____________________________________________
DTC Account No.______________________ Transaction Code No. ______________
/ / CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD NOTES
ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE.
3
/ / CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD NOTES FOR ITS
OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A
"PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF
THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name: ______________________________________________________________________
Address: ___________________________________________________________________
4
Ladies and Gentlemen:
The undersigned hereby tenders to Beazer Homes USA, Inc., a Delaware
corporation (the "Company"), the above described aggregate principal amount of
the Company's 8 7/8% Senior Notes due 2008 (the "Old Notes") in exchange for a
like aggregate principal amount of the Company's 8 7/8% Senior Notes due 2008
(the "Exchange Notes") which have been registered under Securities Act of 1933
(the "Securities Act"), upon the terms and subject to the conditions set forth
in the Prospectus dated , 1998 (as the same may be amended or
supplemented from time to time, the "Prospectus"), receipt of which is
acknowledged, and in this Letter of Transmittal (which, together with the
Prospectus, constitute the "Exchange Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Notes tendered herewith in accordance with the terms and
conditions of the Exchange Offer (including, if the Exchange Offer is extended
or amended, the terms and conditions of any such extension or amendment), the
undersigned hereby sells, assigns and transfers to or upon the order of the
Company all right, title and interest in and to such Old Notes as are being
tendered herewith. The undersigned hereby irrevocably constitutes and appoints
the Exchange Agent as its agent and attorney-in-fact (with full knowledge that
the Exchange Agent is also acting as agent of the Company in connection with the
Exchange Offer) with respect to the tendered Old Notes, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), subject only to the right of withdrawal described in
the Prospectus, to (i) deliver Certificates for Old Notes to the Company
together with all accompanying evidences of transfer and authenticity to, or
upon the order of, the Company, upon receipt by the Exchange Agent, as the
undersigned's agent, of the Exchange Notes to be issued in exchange for such Old
Notes, (ii) present Certificates for such Old Notes for transfer, and to
transfer the Old Notes on the books of the Company, and (iii) receive for the
account of the Company all benefits and otherwise exercise all rights of
beneficial ownership of such Old Notes, all in accordance with the terms and
conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS FULL
POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD NOTES
TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR EXCHANGE, THE COMPANY
WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE THERETO, FREE AND CLEAR OF
ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES, AND THAT THE OLD NOTES
TENDERED HEREBY ARE NOT SUBJECT TO ANY ADVERSE CLAIMS OR PROXIES. THE
UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND DELIVER ANY ADDITIONAL DOCUMENTS
DEEMED BY THE COMPANY OR THE EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO
COMPLETE THE EXCHANGE, ASSIGNMENT AND TRANSFER OF THE OLD NOTES TENDERED HEREBY,
AND THE UNDERSIGNED WILL COMPLY WITH ITS OBLIGATIONS UNDER THE REGISTRATION
RIGHTS AGREEMENT. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE
EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Old Notes
tendered hereby should be printed above, if they are not already set forth
above, as they appear on the Certificates representing such Old Notes. The
Certificate number(s) and the Old Notes that the undersigned wishes to tender
should be indicated in the appropriate boxes above.
If any tendered Old Notes are not exchanged pursuant to the Exchange Offer
for any reason, or if Certificates are submitted for more Old Notes than are
tendered or accepted for exchange, Certificates for such nonexchanged or
nontendered Old Notes will be returned (or, in the case of Old Notes tendered by
book-entry transfer, such Old Notes will be credited to an account maintained at
DTC), without expense to the tendering holder, promptly following the expiration
or termination of the Exchange Offer.
5
The undersigned understands that tenders of Old Notes pursuant to any one of
the procedures described in "The Exchange Offer--Procedures for Tendering Old
Notes" in the Prospectus and in the instructions hereto will, upon the Company's
acceptance for exchange of such tendered Old Notes, constitute a binding
agreement between the undersigned and the Company upon the terms and subject to
the conditions of the Exchange Offer. The undersigned recognizes that, under
certain circumstances set forth in the Prospectus, the Company may not be
required to accept for exchange any of the Old Notes tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the Exchange Notes be
issued in the name(s) of the undersigned or, in the case of a book-entry
transfer of Old Notes, that such Exchange Notes be credited to the account
indicated above maintained at DTC. If applicable, substitute Certificates
representing Old Notes not exchanged or not accepted for exchange will be issued
to the undersigned or, in the case of a book-entry transfer of Old Notes, will
be credited to the account indicated above maintained at DTC. Similarly, unless
otherwise indicated under "Special Delivery Instructions," please deliver
Exchange Notes to the undersigned at the address shown below the undersigned's
signature.
By tendering Old Notes and executing this Letter of Transmittal, the
undersigned hereby represents and agrees that (i) the undersigned is not an
"affiliate" (as defined in Rule 405 under the Securities Act) of the Company or
any of its subsidiaries, (ii) any Exchange Notes to be received by the
undersigned are being acquired in the ordinary course of its business, (iii) the
undersigned has no arrangement or understanding with any person to participate
in a distribution (within the meaning of the Securities Act) of Exchange Notes
to be received in the Exchange Offer, and (iv) if the undersigned is not a
Broker-Dealer, the undersigned is not engaged in, and does not intend to engage
in, a distribution (within the meaning of the Securities Act) of such Exchange
Notes. By tendering Old Notes pursuant to the Exchange Offer and executing this
Letter of Transmittal, a holder of Old Notes which is a Broker-Dealer represents
and agrees, consistent with certain interpretive letters issued by the staff of
the Division of Corporation Finance of the Securities and Exchange Commission to
third parties, that (a) such Old Notes held by the Broker-Dealer are held only
as a nominee, or (b) such Old Notes were acquired by such Broker-Dealer for its
own account as a result of market-making activities or other trading activities
and it will deliver the Prospectus (as amended or supplemented from time to
time) meeting the requirements of the Securities Act in connection with any
resale of such Exchange Notes (provided that, by so acknowledging and by
delivering a prospectus, such Broker-Dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act). See "The Exchange
Offer--Resales of Exchange Notes" in the Prospectus.
The Company has agreed that, subject to the provisions of the Registration
Rights Agreement, the Prospectus, as it may be amended or supplemented from time
to time, may be used by a Participating Broker-Dealer (as defined below) in
connection with resales of Exchange Notes received in exchange for Old Notes,
where such Old Notes were acquired by such Participating Broker-Dealer for its
own account as a result of market-making activities or other trading activities,
for a period ending 180 days after the Expiration Date (subject to extension
under certain limited circumstances described in the Prospectus) or, if earlier,
when all such Exchange Notes have been disposed of by such Participating
Broker-Dealer. However, a Participating Broker-Dealer who intends to use the
Prospectus in connection with the resale of Exchange Notes received in exchange
for Old Notes pursuant to the Exchange Offer must notify the Company, or cause
the Company to be notified, on or prior to the Expiration Date, that it is a
Participating Broker-Dealer. Such notice may be given in the space provided
herein for that purpose or may be delivered to the Exchange Agent at one of the
addresses set forth in the Prospectus under "The Exchange Offer--Exchange
Agent." In that regard, each Broker-Dealer who acquired Old Notes for its own
account as a result of market-making or other trading activities (a
"Participating Broker-Dealer"), by tendering such Old Notes and executing this
Letter of Transmittal, agrees that, upon receipt of notice from the Company of
the occurrence of any event or the discovery of any fact which makes any
statement contained or incorporated by reference in the Prospectus untrue in any
material respect or which causes the
6
Prospectus to omit to state a material fact necessary in order to make the
statements contained or incorporated by reference therein, in light of the
circumstances under which they were made, not misleading or of the occurrence of
certain other events specified in the Registration Rights Agreement, such
Participating Broker-Dealer will suspend the sale of Exchange Notes pursuant to
the Prospectus until the Company has amended or supplemented the Prospectus to
correct such misstatement or omission and has furnished copies of the amended or
supplemented Prospectus to the Participating Broker-Dealer or the Company has
given notice that the sale of the Exchange Notes may be resumed, as the case may
be. If the Company gives such notice to suspend the sale of the Exchange Notes,
it shall extend the 180-day period referred to above during which Participating
Broker-Dealers are entitled to use the Prospectus in connection with the resale
of Exchange Notes by the number of days in the period from and including the
date of the giving of such notice to and including the date when the Company
shall have made available to Participating Broker-Dealers copies of the
supplemented or amended Prospectus necessary to resume resales of the Exchange
Notes or to and including the date on which the Company has given notice that
the use of the applicable Prospectus may be resumed, as the case may be.
Holders of Old Notes whose Old Notes are accepted for exchange will not
receive accrued interest on such Old Notes for any period from and after the
last Interest Payment Date to which interest has been paid or duly provided for
on such Old Notes prior to the original issue date of the Exchange Notes or, if
no such interest has been paid or duly provided for, will not receive any
accrued interest on such Old Notes, and the undersigned waives the right to
receive any interest on such Old Notes accrued from and after such Interest
Payment Date or, if no such interest has been paid or duly provided for, from
and after March 20, 1998.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
7
HOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Old Notes hereby tendered or on a security position
listing, or by any person(s) authorized to become the registered holder(s) by
endorsements and documents transmitted herewith (including such opinions of
counsel, certifications and other information as may be required by the Company
or the Trustee for the Old Notes to comply with the restrictions on transfer
applicable to the Old Notes). If signature is by an attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or another acting in
a fiduciary capacity or representative capacity, please set forth the signer's
full title. See Instruction 5.
(SIGNATURE(S) OF HOLDER(S))
Dated: _______________, 1998
Name(s): _______________________________________________________________________
(Please Print)
Address: _______________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number: ________________________________________________
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER(S)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 2 AND 5)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
(Please Print)
Date: ____________________________________________________________________, 1998
Capacity of Title: _____________________________________________________________
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number: ________________________________________________
8
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the Exchange Notes are to be issued in the name of
someone other than the registered holder of the Old Notes whose name(s)
appear(s) above:
Issue Exchange Notes to:
Name: __________________________________________________________________________
(Please Print)
Address: _______________________________________________________________________
_______________________________________________________________________________
(Include Zip Code)
_______________________________________________________________________________
(Taxpayer Identification or Social Security No.)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the Exchange Notes are to be sent to someone other than
the registered holder of the Old Notes whose name(s) appear(s) above, or to such
registered holder(s) at an address other than that shown above.
Mail Exchange Notes to:
Name: __________________________________________________________________________
(Please Print)
Address: _______________________________________________________________________
_______________________________________________________________________________
(Include Zip Code)
_______________________________________________________________________________
(Taxpayer Identification or Social Security No.)
9
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made pursuant
to the procedures for tender by book-entry transfer set forth in "The Exchange
Offer--Procedures for Tendering Old Notes" in the Prospectus. Certificates, or
timely confirmation of a book-entry transfer of such Old Notes into the Exchange
Agent's account at DTC, as well as this Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, and any other documents required by this Letter of Transmittal, must
be received by the Exchange Agent at one of its addresses set forth herein on or
prior to the Expiration Date. Old Notes may be tendered in whole or in part in
the principal amount of $1,000 and integral multiples thereof.
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available or (ii) who cannot deliver their Old Notes, this Letter of
Transmittal and all other required documents to the Exchange Agent on or prior
to the Expiration Date or (iii) who cannot complete the procedures for delivery
by book-entry transfer on a timely basis, may tender their Old Notes by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedures set forth in "The Exchange Offer--Procedures for
Tendering Old Notes--Guaranteed Delivery" in the Prospectus. Pursuant to such
procedures: (i) such tender must be made by or through an Eligible Institution
(as defined below); (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by the Company,
must be received by the Exchange Agent on or prior to the Expiration Date; and
(iii) the Certificates (or a book-entry confirmation (as defined in the
Prospectus)) representing all tendered Old Notes, in proper form for transfer,
together with a Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees and any other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent within three New York Stock Exchange trading days after the date
of execution of such Notice of Guaranteed Delivery, all as provided in "The
Exchange Offer--Procedures for Tendering Old Notes--Guaranteed Delivery" in the
Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile or mail to the Exchange Agent, and must include a guarantee by an
Eligible Institution in the form set forth in such Notice. For Old Notes to be
properly tendered pursuant to the guaranteed delivery procedure, the Exchange
Agent must receive a Notice of Guaranteed Delivery on or prior to the Expiration
Date. As used herein and in the Prospectus, "Eligible Institution" means a firm
or other entity identified in Rule 17Ad-15 under the Exchange Act as "an
eligible guarantor institution," including (as such terms are defined therein)
(i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or
government securities broker or dealer; (iii) a credit union; (iv) a national
securities exchange, registered securities association or clearing agency; or
(v) a savings association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
The Company will not accept any alternative, conditional or contingent
tenders. Each tendering holder, by execution of a Letter of Transmittal (or
facsimile thereof), waives any right to receive any notice of the acceptance of
such tender.
10
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder (which
term, for purposes of this document, shall include any participant in DTC
whose name appears on a security position listing as the owner of the Old
Notes) of Old Notes tendered herewith, unless such holder(s) has completed
either the box entitled "Special Issuance Instructions" or the box entitled
"Special Delivery Instructions" above, or
(ii) such Old Notes are tendered for the account of a firm that is an
Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature(s)
on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Old Notes" is inadequate, the Certificate number(s) and/or the
principal amount of Old Notes and any other required information should be
listed on a separate signed schedule which is attached to this Letter of
Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Notes will be
accepted only in the principal amount of $1,000 and integral multiples thereof.
If less than all the Old Notes evidenced by any Certificate submitted are to be
tendered, fill in the principal amount of Old Notes which are to be tendered in
the box entitled "Principal Amount of Old Notes Tendered (if less than all)." In
such case, new Certificate(s) for the remainder of the Old Notes that were
evidenced by your old Certificate(s) will only be sent to the holder of the Old
Notes, promptly after the Expiration Date. All Old Notes represented by
Certificates delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time on or prior to the Expiration Date. In order for a withdrawal to be
effective on or prior to that time, a written, telegraphic, telex or facsimile
transmission of such notice of withdrawal must be timely received by the
Exchange Agent at one of its addresses set forth above or in the Prospectus on
or prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Old Notes to be withdrawn, the aggregate
principal amount of Old Notes to be withdrawn, and (if Certificates for Old
Notes have been tendered) the name of the registered holder of the Old Notes as
set forth on the Certificate for the Old Notes, if different from that of the
person who tendered such Old Notes. If Certificates for the Old Notes have been
delivered or otherwise identified to the Exchange Agent, then prior to the
physical release of such Certificates for the Old Notes, the tendering holder
must submit the serial numbers shown on the particular Certificates for the Old
Notes to be withdrawn and the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution, except in the case of Old Notes tendered
for the account of an Eligible Institution. If Old Notes have been tendered
pursuant to the procedures for book-entry transfer set forth in "The Exchange
Offer--Procedures for Tendering Old Notes," the notice of withdrawal must
specify the name and number of the account at DTC to be credited with the
withdrawal of Old Notes, in which case a notice of withdrawal will be effective
if delivered to the Exchange Agent by written, telegraphic, telex or facsimile
transmission. Withdrawals of tenders of Old Notes may not be rescinded. Old
Notes properly withdrawn will not be deemed validly tendered for purposes of the
Exchange Offer, but may be retendered at any subsequent time on or prior to the
Expiration Date by following any of the procedures described in the Prospectus
under "The Exchange Offer--Procedures for Tendering Old Notes."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company, in its
sole discretion, whose determination shall be final and binding on all parties.
Neither the Company, any affiliates or assigns of the Company, the Exchange
Agent nor any other person shall be under any duty to give any notification of
any irregularities in any notice of withdrawal or incur any liability for
failure to give any such notification. Any Old Notes which have been
11
tendered but which are withdrawn will be returned to the holder thereof without
cost to such holder promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Old
Notes tendered hereby, the signature(s) must correspond exactly with the name(s)
as written on the face of the Certificate(s) without alteration, enlargement or
any change whatsoever.
If any of the Old Notes tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Notes are registered in different name(s) on several
Certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal (or facsimiles thereof) as there are different
registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and must submit proper evidence
satisfactory to the Company, in its sole discretion, of such persons' authority
to so act.
When this Letter of Transmittal is signed by the registered owner(s) of the
Old Notes listed and transmitted hereby, no endorsement(s) of Certificate(s) or
separate bond power(s) are required unless Exchange Notes are to be issued in
the name of a person other than the registered holder(s). Signature(s) on such
Certificate(s) or bond power(s) must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Old Notes listed, the Certificates must be endorsed
or accompanied by appropriate bond powers, signed exactly as the name or names
of the registered owner(s) appear(s) on the Certificates, and also must be
accompanied by such opinions of counsel, certifications and other information as
the Company or the Trustee for the Old Notes may require in accordance with the
restrictions on transfer applicable to the Old Notes. Signatures on such
Certificates or bond powers must be guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If Exchange Notes are to be
issued in the name of a person other than the signer of this Letter of
Transmittal, or if Exchange Notes are to be sent to someone other than the
signer of this Letter of Transmittal or to an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
Certificates for Old Notes not exchanged will be returned by mail or, if
tendered by book-entry transfer, by crediting the account indicated above
maintained at DTC. See Instruction 4.
7. IRREGULARITIES. The Company will determine, in its sole discretion, all
questions as to the form of documents, validity, eligibility (including time of
receipt) and acceptance for exchange of any tender of Old Notes, which
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any and all tenders determined by it not to be in
proper form or the acceptance of which, or exchange for, may, in the view of
counsel to the Company, be unlawful. The Company also reserves the absolute
right, subject to applicable law, to waive any of the conditions of the Exchange
Offer set forth in the Prospectus under "The Exchange Offer--Certain Conditions
to the Exchange Offer" or any conditions or irregularity in any tender of Old
Notes of any particular holder whether or not similar conditions or
irregularities are waived in the case of other holders. The Company's
interpretation of the terms and conditions of the Exchange Offer (including this
Letter of Transmittal and the instructions hereto) will be final and binding. No
tender of Old Notes will be deemed to have been validly made until all
irregularities with respect to such tender have been cured or waived. Neither
the Company, any affiliates or assigns of the Company, the Exchange Agent, nor
any other person shall be under any duty to give notification of any
irregularities in tenders or incur any liability for failure to give such
notification.
12
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Exchange Agent at one of its
addresses and telephone number set forth on the front of this Letter of
Transmittal. Additional copies of the Prospectus, the Notice of Guaranteed
Delivery and the Letter of Transmittal may be obtained from the Exchange Agent
or from your broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a holder whose tendered Old Notes are accepted for exchange is required
to provide the Exchange Agent with such holder's correct taxpayer identification
number ("TIN") on Substitute Form W-9 below. If the Exchange Agent is not
provided with the correct TIN, the Internal Revenue Service (the "IRS") may
subject the holder or other payee to a $50 penalty. In addition, payments to
such holders or other payees with respect to Old Notes exchanged pursuant to the
Exchange Offer may be subject to 31% backup withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the tendering
holder has not been issued a TIN and has applied for a TIN or intends to apply
for a TIN in the near future. If the box in Part 2 is checked, the holder or
other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60 day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within such 60 day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31% of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Notes or of the last transferee appearing on the transfers attached to,
or endorsed on, the Old Notes. If the Old Notes are registered in more than one
name or are not in the name of the actual owner, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax. Rather, the
U.S. Federal income tax liability of a person subject to backup withholding will
be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s)
representing Old Notes have been lost, destroyed or stolen, the holder should
promptly notify the Exchange Agent. The holder will then be instructed as to the
steps that must be taken in order to replace the Certificate(s). This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, destroyed or stolen Certificate(s) have been followed.
13
11. SECURITY TRANSFER TAXES. Holders who tender their Old Notes for
exchange will not be obligated to pay any transfer taxes in connection
therewith. If, however, Exchange Notes are to be delivered to, or are to be
issued in the name of, any person other than the registered holder of the Old
Notes tendered, or if a transfer tax is imposed for any reason other than the
exchange of Old Notes in connection with the Exchange Offer, then the amount of
any such transfer tax (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with the Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE
EXPIRATION DATE.
14
TO BE COMPLETED BY ALL TENDERING NOTEHOLDERS
(SEE INSTRUCTION 9)
PAYEE'S NAME: U.S. BANK TRUST NATIONAL ASSOCIATION
- --------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR SOCIAL SECURITY NUMBER
FORM W-9 TIN IN THE BOX AT RIGHT AND OR ------------------------
DEPARTMENT OF THE TREASURY, CERTIFY BY SIGNING AND EMPLOYER IDENTIFICATION NUMBER
INTERNAL REVENUE SERVICE DATING BELOW
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER ("TIN")
AND CERTIFICATION
--------------------------------------------------------------------
CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT
(1) the number shown on this form is my correct Taxpayer
Identification Number (or that I am waiting for a number to be
issued to me).
(2) I am not subject to backup withholding because: (a) I am exempt
from backup withholding, (b) I have not been notified by the
Internal Revenue Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer
subject to withholding.
(3) any other information provided on this form is true and correct.
CERTIFICATION INSTRUCTIONS--YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU
HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO
BACKUP WITHHOLDING BECAUSE OF UNDER-REPORTING INTEREST OR DIVIDENDS
ON YOUR TAX RETURN. HOWEVER, IF AFTER BEING NOTIFIED BY THE IRS THAT
YOU WERE SUBJECT TO BACKUP WITHHOLDING, YOU RECEIVED ANOTHER
NOTIFICATION FROM THE IRS THAT YOU ARE NO LONGER SUBJECT TO BACKUP
WITHHOLDING, DO NOT CROSS OUT ITEM (2).
PART 2
SIGNATURE DATE AWAITING TIN / /
- --------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a Taxpayer Identification Number by the time of payment, 31%
of all payments made to me on account of the Exchange Notes shall be retained
until I provide a Taxpayer Identification Number to the Exchange Agent and that,
if I do not provide my Taxpayer Identification Number within 60 days, such
retained amounts shall be remitted to the Internal Revenue Service as backup
withholding and 31% of all reportable payments made to me thereafter will be
withheld and remitted to the Internal Revenue Service until I provide a Taxpayer
Identification Number.
Signature ______________________________ Date______________ , 1998
15
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
8 7/8% SENIOR NOTES DUE 2008
OF
BEAZER HOMES USA, INC.
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Company's (as defined below) 8 7/8% Senior Notes due 2008
(the "Old Notes") are not immediately available, (ii) Old Notes, the Letter of
Transmittal and all other required documents cannot be delivered to U.S. Bank
Trust National Association (the "Exchange Agent") on or prior to the Expiration
Date (as defined in the Prospectus referred to below) or (iii) the procedures
for delivery by book-entry transfer cannot be completed on a timely basis. This
Notice of Guaranteed Delivery may be delivered by hand, overnight courier or
mail, or transmitted by facsimile transmission, to the Exchange Agent. See "The
Exchange Offer -- Procedures for Tendering Old Notes" in the Prospectus.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON ,
1998, UNLESS THE OFFER IS EXTENDED, (THE "EXPIRATION DATE"). TENDERS OF OLD
NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. NEW YORK CITY TIME ON
THE BUSINESS DAY PRIOR TO THE EXPIRATION DATE.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
U.S. BANK TRUST NATIONAL ASSOCIATION
F/K/A FIRST TRUST NATIONAL ASSOCIATION
BY REGISTERED, CERTIFIED OR OVERNIGHT MAIL: BY FIRST CLASS MAIL
U.S. BANK TRUST NATIONAL ASSOCIATION U.S. BANK TRUST NATIONAL ASSOCIATION
ATTN: SPECIALIZED FINANCE P.O. BOX 64485
180 EAST FIFTH STREET ST. PAUL, MN 55101
ST. PAUL, MN 55101
BY HAND (NEW YORK DEPOSITORY ONLY): BY HAND (ALL OTHERS):
U.S. BANK TRUST NATIONAL ASSOCIATION U.S. BANK TRUST NATIONAL ASSOCIATION
100 Wall Street, 20th Floor Fourth Floor--Bond Drop Window
New York, NY 10005 180 East Fifth Street
Attention: Cathy Donohue St. Paul, MN 55101
BY FACSIMILE:
(For Eligible Institutions Only)
(612) 244-1537
TELEPHONE NUMBER
(800) 934-6802 Bondholder Services
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA
FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
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Ladies and Gentlemen:
The undersigned hereby tenders to Beazer Homes USA, Inc., a Delaware
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Prospectus dated , 1998 (as the same may be amended or
supplemented from time to time, the "Prospectus"), and the related Letter of
Transmittal (which together constitute the "Exchange Offer"), receipt of which
is hereby acknowledged, the aggregate principal amount of Old Notes set forth
below pursuant to the guaranteed delivery procedures set forth in the Prospectus
under the caption "The Exchange Offer -- Procedures for Tendering Old Notes."
Aggregate Principal Amount Tendered: Name(s) of Registered Holder(s):
Certificate No(s). (if available): Address(es):
If Old Notes will be tendered by book-entry
transfer, provide the following information:
DTC Account Number: Area Code and
Date: Telephone Number(s):
Signature(s):
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association (each, an "Eligible Institution"),
hereby guarantees to deliver to the Exchange Agent, at one of its addresses set
forth above, either the Old Notes tendered hereby in proper form for transfer,
or confirmation of the book-entry transfer of such Old Notes to the Exchange
Agent's account at The Depository Trust Company ("DTC"), pursuant to the
procedures for book-entry transfer set forth in the Prospectus, in either case
together with one or more properly completed and duly executed Letter(s) of
Transmittal (or facsimile thereof) and any other required documents within three
New York Stock Exchange trading days after the date of execution of this Notice
of Guaranteed Delivery.
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The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Old Notes tendered hereby to the Exchange Agent within the
time period set forth above and that failure to do so could result in a
financial loss to the undersigned.
Name of Firm:
Address:
(Zip Code)
Area Code and
Telephone Number:
(Authorized Signature)
Title:
Name:
(Please type or print)
Date:
NOTE: DO NOT SEND OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. ACTUAL
SURRENDER OF OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A
PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER
REQUIRED DOCUMENTS.
4
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed and
duly executed copy of this Notice of Guaranteed Delivery and any other documents
required by this Notice of Guaranteed Delivery must be received by the Exchange
Agent at its address set forth herein prior to the Expiration Date. The method
of delivery of this Notice of Guaranteed Delivery and any other required
documents to the Exchange Agent is at the election and sole risk of the holder,
and the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. As an alternative to delivery by mail the
holders may wish to consider using an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure timely delivery. For a
description of the guaranteed delivery procedures, see Instruction-1 of the
Letter of Transmittal.
2. SIGNATURES ON THIS NOTICE OF GUARANTEED DELIVERY. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Old Notes, the
signature must correspond with the name(s) written on the face of the Old Notes
without alteration, enlargement, or any change whatsoever. If this Notice of
Guaranteed Delivery is signed by a participant of the Book-Entry Transfer
Facility whose name appears on a security position listing as the owner of the
Old Notes, the signature must correspond with the name shown on the security
position listing as the owner of the Old Notes.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder(s) of any Old Notes listed or a participant of the Book-Entry
Transfer Facility, this Notice of Guaranteed Delivery must be accompanied by
appropriate bond powers, signed as the name of the registered holder(s) appears
on the Old Notes or signed as the name of the participant shown on the
Book-Entry Transfer Facility's security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing and submit with the Letter of Transmittal evidence
satisfactory to the Company of such person's authority to so act.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance for additional copies of the Prospectus may be directed to the
Exchange Agent at the address specified in the Prospectus. Holders may also
contact their broker, dealer, commercial bank, trust company, or other nominee
for assistance concerning the Exchange Offer.
5
