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Exhibit 4.13
BEAZER HOMES USA, INC.
$350,000,000 8 3/8% Senior Notes due 2012
PURCHASE AGREEMENT
April 11, 2002
New York, New York
UBS Warburg LLC
299 Park Avenue
New York, New York 10171
Banc One Capital Markets, Inc.
One Bank One Plaza
Mail Suite IL1-0701, 8th Floor
Chicago, Illinois 60670
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010
Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
BNP Paribas Securities Corp.
787 Seventh Avenue
New York, New York 10019
Comerica Securities, Inc.
211 W. Fort Street
MC 3089
Detroit, Michigan 48226
PNC Capital Markets, Inc.
One PNC Plaza
Pittsburgh, Pennsylvania 15222
SunTrust Capital Markets, Inc.
303 Peachtree Street
Atlanta, Georgia 30308
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First Union Securities, Inc.
301 South College Street
Charlotte, North Carolina 28288
Ladies and Gentlemen:
Beazer Homes USA, Inc., a Delaware corporation (the "COMPANY"),
and each of the Guarantors (as defined herein) agree with you as follows:
1. ISSUANCE OF NOTES. The Company proposes to issue and sell to
UBS Warburg LLC, Banc One Capital Markets, Inc., Credit Suisse First Boston
Corporation, Salomon Smith Barney Inc., BNP Paribas Securities Corp., Comerica
Securities, Inc., PNC Capital Markets, Inc., SunTrust Capital Markets, Inc. and
First Union Securities, Inc. (the "INITIAL PURCHASERS") $350,000,000 aggregate
principal amount of 8 3/8% Senior Notes due 2012 (the "ORIGINAL NOTES"). The
Original Notes will be issued pursuant to an indenture (the "INDENTURE"), dated
as of April 17, 2002, as supplemented, and the supplemental indenture (the
"FIRST SUPPLEMENTAL INDENTURE") to be dated the Closing Date (as defined
herein), by and among the Company, the Guarantors and U.S. Bank Trust National
Association, as trustee (the "TRUSTEE"). The Company's obligations under the
Original Notes, the Exchange Notes (as defined herein) and the Indenture will be
unconditionally guaranteed (the "GUARANTEES") on an unsecured senior basis by
each of the entities listed on SCHEDULE I hereto (collectively, the "GUARANTORS"
and, collectively with the Company, the "ISSUERS"). All references herein to the
Original Notes include the related Guarantees, unless the context otherwise
requires. Capitalized terms used but not otherwise defined herein shall have the
meanings given to such terms in the Indenture or the Offering Memorandum (as
defined herein).
The Original Notes will be offered and sold to the Initial
Purchasers 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 Issuers have prepared a preliminary offering
memorandum, dated April 4, 2002 (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 Original Notes.
The Initial Purchasers have advised the Company that the Initial
Purchasers intend, as soon as they deem practicable after this Purchase
Agreement (this "AGREEMENT") has been executed and delivered, to resell the
Original Notes purchased by the Initial Purchasers under 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"
("QIBS"), as defined in Rule 144A under the Act, as such rule may be amended
from time to time ("RULE 144A"), in transactions complying with Rule 144A and
(ii) other eligible purchasers (other than U.S. persons) pursuant to offers and
sales that occur outside the United States within the meaning of Regulation S
under the Act, as such regulation may be amended from time to time ("REGULATION
S") (such offers and sales, the "EXEMPT RESALES"). The persons specified in
clauses (i) and (ii) are sometimes collectively referred to herein as the
"ELIGIBLE PURCHASERS." As used herein the terms "United States" and "U.S.
persons" shall have the respective meanings given them in Regulation S.
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Upon issuance of the Original Notes and until such time as the
same is no longer required under the applicable requirements of the Act, the
Original Notes shall bear the legend relating thereto set forth under "Notice to
Investors" in the Offering Memorandum.
Holders (including subsequent transferees) of the Original Notes
will have the registration rights set forth in the registration rights agreement
(the "REGISTRATION RIGHTS AGREEMENT") to be dated the Closing Date. Pursuant to
the Registration Rights Agreement, the Issuers will agree to (i) file with the
Securities and Exchange Commission (the "COMMISSION") under the circumstances
set forth in the Registration Rights Agreement, (a) a registration statement
under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating to a new
issue of debt securities (collectively with the Private Exchange Securities (as
defined in the Registration Rights Agreement), the "EXCHANGE NOTES" and,
together with the Original Notes, the "NOTES," which term includes the
guarantees related thereto) to be offered in exchange for the Original Notes
(the "EXCHANGE OFFER") and issued under the Indenture or an indenture
substantially identical to the Indenture and/or (b) under certain circumstances
set forth in the Registration Rights Agreement, 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 Original Notes,
and (ii) use their reasonable best efforts to cause such Registration Statements
to be declared effective. This Agreement, the Notes, the Guarantees, the
Indenture, the First Supplemental Indenture and the Registration Rights
Agreement are hereinafter sometimes referred to collectively as the "NOTE
DOCUMENTS."
The Notes are being offered and sold by the Company in part to
finance the transactions contemplated by that certain Agreement and Plan of
Merger dated as of January 29, 2002 by and among the Company, Beazer Homes
Investment Corp. ("MERGER SUB") and Crossmann Communities, Inc. ("CROSSMANN"),
and related exhibits and schedules (collectively, the "MERGER AGREEMENT"),
pursuant to which Crossmann will, upon the terms and subject to the conditions
set forth therein, be merged with and into Merger Sub (the "MERGER"). In
connection with the Merger, certain stockholders of Crossmann entered into a
affiliates agreement (the "AFFILIATES AGREEMENT") dated as of January 29, 2002
and agreed to enter into a stockholders agreement on or prior to the effective
time of the Merger (collectively with the Voting Agreement and the Merger
Agreement, the "MERGER DOCUMENTS").
The Note Documents and the Merger Documents are collectively
referred to herein as the "OPERATIVE DOCUMENTS."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and covenants of the Initial Purchasers contained in
this Agreement, the Issuers agree to issue and sell to the Initial Purchasers,
and, on the basis of the representations, warranties and covenants of the
Issuers contained in this Agreement and subject to the terms and conditions
contained in this Agreement, the Initial Purchasers severally agree to purchase
from the Issuers, the entire aggregate principal amount of the Original Notes
set forth opposite their respective names in SCHEDULE III hereto. The purchase
price for the Original Notes shall be 98% of their principal amount.
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3. DELIVERY AND PAYMENT. Delivery of, and payment of the
purchase price for, the Original Notes shall be made at 10:00 a.m., New York
City time, on April 17, 2002 (such date and time, the "CLOSING DATE") at the
offices of Cahill Gordon & Reindel at 80 Pine Street, New York, New York 10005.
The Closing Date and the location of delivery of and the form of payment for the
Original Notes may be varied by mutual agreement between the Initial Purchasers
and the Company.
One or more of the Original Notes in global form registered in
such names as the Initial Purchasers may request upon at least one business
day's notice prior to the Closing Date and having an aggregate principal amount
corresponding to the aggregate principal amount of the Original Notes 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 to such account or
accounts specified by the Company in accordance with its obligations under
Section 4(g) hereof on or prior to the Closing Date, or by such means as the
parties hereto shall agree prior to the Closing Date.
4. AGREEMENTS OF THE ISSUERS. The Issuers, jointly and
severally, covenant and agree with each Initial Purchaser as follows:
(a) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers, without charge, with as many copies
of the Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments or supplements thereto, as the Initial Purchasers may reasonably
request. The Issuers consent 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.
(b) Not to amend or supplement the Offering Memorandum prior to
the Closing Date unless the Initial Purchasers shall previously have been
advised of such proposed amendment or supplement at least two business days
prior to the proposed use, and shall not have objected to such amendment or
supplement.
(c) If, prior to the time that the Initial Purchasers have
completed their distribution of the Original Notes, any event shall occur
that, in the judgment of the Issuers or in the judgment of counsel to the
Initial Purchasers, makes any statement of a material fact in the Offering
Memorandum, as then amended or supplemented, untrue or that requires the
making of any additions to or changes in the Offering Memorandum in order
to make the statements in the Offering Memorandum, as then amended or
supplemented, in the light of the circumstances under which they are made,
not misleading, or if it is necessary to amend or supplement the Offering
Memorandum to comply with all applicable laws, the Issuers shall promptly
notify the Initial Purchasers of such event and (subject to Section 4(b))
prepare an appropriate amendment or supplement to the Offering Memorandum
so that (i) the statements in the Offering Memorandum, as amended or
supplemented, will, in the light of the circumstances at the time that the
Offering Memorandum is delivered to prospective Eligible Purchasers, not be
misleading and (ii) the Offering Memorandum will comply with applicable
law.
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(d) To cooperate with the Initial Purchasers and counsel to the
Initial Purchasers in connection with the qualification or registration of
the Original Notes under the securities laws of such jurisdictions as the
Initial Purchasers may request and to continue such qualification in effect
so long as required for the Exempt Resales. Notwithstanding the foregoing,
no Issuer 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 excess of a nominal dollar amount in any such jurisdiction
where it is not then so subject.
(e) To advise the Initial Purchasers promptly and, if requested
by the Initial Purchasers, to confirm such advice in writing, of the
issuance by any securities commission of any stop order suspending the
qualification or exemption from qualification of any of the Original Notes
for offering or sale in any jurisdiction, or the initiation of any
proceeding for such purpose by any securities commission or other
regulatory authority. The Issuers shall use their reasonable best efforts
to prevent the issuance of any stop order or order suspending the
qualification or exemption of any of the Original Notes under any
securities laws, and if at any time any securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption of any of the Original Notes under any securities laws, the
Issuers shall use their reasonable best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time.
(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is
terminated other than by reason of a default by the Initial Purchasers, to
pay all costs, expenses, fees and disbursements reasonably incurred and
stamp, documentary or similar taxes incident to and in connection with: (i)
the preparation, printing and distribution of the Preliminary Offering
Memorandum and the Offering Memorandum (including, without limitation,
financial statements) and all amendments and supplements thereto, (ii) all
expenses (including travel expenses) of the Issuers and the Initial
Purchasers in connection with any meetings with prospective investors in
the Original Notes, (iii) the preparation, notarization (if necessary) and
delivery of the Note Documents and all other agreements, memoranda,
correspondence and documents prepared and delivered in connection with this
Agreement and with the Exempt Resales, (iv) the issuance, transfer and
delivery by the Company and the Guarantors of the Original Notes and the
Guarantees, respectively, to the Initial Purchasers, (v) the qualification
or registration of the Notes for offer and sale under the securities laws
of the several states of the United States or provinces of Canada
(including, without limitation, the cost of printing and mailing
preliminary and final "Blue Sky" or legal investment memoranda and fees and
disbursements of counsel (including local counsel) to the Initial
Purchasers relating thereto), (vi) 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, (vii) the preparation of certificates
for the Notes, (viii) the application for quotation of the Notes in The
Portal Market ("PORTAL") of the National Association of Securities Dealers,
Inc. ("NASD"), including, but not limited to, all listing fees and
expenses, (ix) the approval of the Notes by The Depository Trust Company
("DTC") for "book-entry" transfer, (x) the rating of the Notes by rating
agencies, (xi) the fees and expenses of the Trustee and its
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counsel and (xii) the performance by the Issuers of their other obligations
under the Note Documents.
(g) To use the proceeds from the sale of the Original Notes in
the manner described in the Offering Memorandum under the caption "Use of
Proceeds."
(h) To do and perform all things required to be done and
performed under this Agreement by them prior to or after the Closing Date
and to satisfy all conditions precedent on their part to the delivery of
the Original Notes.
(i) Not to, and not to permit any of their subsidiaries to, sell,
offer for sale or solicit offers to buy any security (as defined in the
Act) that would be integrated with the sale of the Original Notes in a
manner that would require the registration under the Act of the sale of the
Original Notes to the Initial Purchasers or the initial resale of the
Original Notes by the Initial Purchasers to any Eligible Purchasers.
(j) Not to, and to use their reasonable best efforts to cause
their affiliates (as defined in Rule 144 under the Act) not to, resell any
of the Original Notes that have been reacquired by any of them.
(k) Not to engage, not to allow any of their subsidiaries to
engage, and to use their reasonable best efforts to cause their other
affiliates and any person acting on their behalf (other than, in any case,
the Initial Purchasers and any of their affiliates, as to whom the Issuers
make no covenant) not to engage, in any form of general solicitation or
general advertising (within the meaning of Regulation D under the Act) in
connection with any offer or sale of the Original Notes in the United
States prior to the effectiveness of a registration statement with respect
to the Notes.
(l) Not to engage, not to allow any of their subsidiaries to
engage, and to use their reasonable best efforts to cause their other
affiliates and any person acting on their behalf (other than, in any case,
the Initial Purchasers and any of their affiliates, as to whom the Issuers
make no covenant) not to engage, in any directed selling effort with
respect to the Original Notes, and to comply with the offering restrictions
requirement of Regulation S. Terms used in this paragraph have the meanings
given to them by Regulation S.
(m) 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 available upon request 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. The Issuers
will pay the expenses of printing and distributing such documents.
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(n) To comply with all of their agreements set forth in the
Registration Rights Agreement.
(o) To comply with all of their obligations set forth in the
representations letter of the Issuers to DTC relating to the approval of
the Notes by DTC for "book-entry" transfer and to use their reasonable best
efforts to obtain approval of the Notes by DTC for "book-entry" transfer.
(p) To use their reasonable best efforts to effect the inclusion
of the Original Notes in Portal.
(q) Prior to the Closing Date, to furnish without charge to the
Initial Purchasers, (i) as soon as they have been prepared, a copy of any
regularly prepared internal financial statements of the Company and its
subsidiaries for any period subsequent to the period covered by the
financial statements appearing in the Offering Memorandum, (ii) all other
reports and other communications (financial or otherwise) that any of the
Issuers mail or otherwise make available to their security holders and
(iii) such other information as the Initial Purchasers shall reasonably
request.
(r) Not to distribute prior to the Closing Date any offering
material in connection with the offer and sale of the Original Notes other
than the Preliminary Offering Memorandum and the Offering Memorandum.
(s) During the period of two years after the Closing Date or, if
earlier, until such time as the Original Notes are no longer restricted
securities (as defined in Rule 144 under the Act), not to be or become a
closed-end investment company required to be registered, but not
registered, under the Investment Company Act of 1940.
(t) In connection with the offering, until the Initial Purchasers
shall have notified the Company of the completion of the resale of the
Notes, not to, and not to permit any of their affiliated purchasers (as
such term is defined in Regulation M under the Exchange Act) to, either
alone or with one or more other persons, bid for or purchase for any
account in which they or any of their affiliated purchasers has a
beneficial interest any Notes in violation of Regulation M; and none of the
Issuers or any of their affiliated purchasers will make bids or purchases
for the purpose of creating actual, or apparent, active trading in, or of
raising the price of, the Notes.
(u) During the period beginning on the date hereof and continuing
until the date six months after the Closing Date, the Issuers and their
affiliates shall not offer, sell, contract to sell or otherwise dispose of,
except pursuant to this Agreement, any Original Notes or any securities of
any of the Issuers that are substantially similar to such notes, without
the prior written consent of the Initial Purchasers.
5. REPRESENTATIONS AND WARRANTIES. (a) The Issuers, jointly and
severally, represent and warrant to the Initial Purchasers that:
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(i) Each of the Preliminary Offering Memorandum and the Offering
Memorandum has been prepared in connection with the Exempt Resales. None of
the Preliminary Offering Memorandum, the Offering Memorandum or any
supplement or amendment thereto contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that the Issuers make no
representation or warranty with respect to information relating to the
Initial Purchasers contained in or omitted from the Preliminary Offering
Memorandum or the Offering Memorandum or any supplement or amendment
thereto, in reliance upon and in conformity with information furnished to
the Company in writing by or on behalf of the Initial Purchasers expressly
for inclusion in the Preliminary Offering Memorandum, the Offering
Memorandum, or any supplement or amendment thereto. No order preventing the
use of the Preliminary Offering Memorandum or the Offering Memorandum, or
any order asserting that any of the transactions contemplated by this
Agreement are subject to the registration requirements of the Act, has been
issued or, to the knowledge of any Issuer, has been threatened.
(ii) The Company has prepared and filed with the Commission in
accordance with the Exchange Act, a joint proxy statement/prospectus and
form of proxy relating to a special meeting of the Company's stockholders
(the "STOCKHOLDERS MEETING") at which the Company's stockholders will be
asked to adopt a proposal to issue common stock of the Company, pursuant to
the Merger Agreement. As used in this Agreement, the term joint proxy
statement/prospectus (the "PROXY STATEMENT") means the definitive proxy
statement and form of proxy, including any annexes, financial statements
and schedules, and any amendments or supplements thereto in the form filed
with the Commission pursuant to Rule 14a-6(j) under the Exchange Act.
(iii) The Proxy Statement complied and will comply, on the date
that the Proxy Statement was mailed to the Company's stockholders and on
the date of the Stockholders Meeting, in all material respects with the
applicable provisions of the Exchange Act, and the Proxy Statement at such
times and on the Closing Date did not and will not, as the case may be,
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The registration statement of which the Proxy Statement is a
part (the "PROXY REGISTRATION STATEMENT") complied and will comply, on the
date of effectiveness thereof and on the Closing Date, in all material
respects with the applicable provisions of the Act, and the Proxy
Registration Statement at such times did not and will not, as the case may
be, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(iv) There are no securities of any of the Issuers that are
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that are quoted in a United States automated interdealer
quotation system of the same class as the Notes within the meaning of Rule
144A.
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(v) As of December 31, 2001, the Company had the authorized
issued and outstanding capital stock as set forth under the heading
"Actual" in the section of the Preliminary Offering Memorandum and the
Offering Memorandum entitled "Capitalization" in the common and preferred
stock line items, respectively. As of the Closing Date, the Company shall
have the authorized issued and outstanding capital stock as set forth under
the heading "As Adjusted" in the section of the Preliminary Offering
Memorandum and the Offering Memorandum entitled "Capitalization", subject
to subsequent issuances of common stock of the Company under employee stock
option plans and the issuance of common stock by the Company pursuant to
the Merger as described in the Offering Memorandum. All of the issued and
outstanding shares of capital stock or other equity interests of the
Company have been duly and validly authorized and issued, are fully paid
and nonassessable and were not issued in violation of any preemptive or
similar right. Except as set forth in the Offering Memorandum, there are no
outstanding options, warrants or other rights to acquire or purchase, or
instruments convertible into or exchangeable for, any shares of capital
stock of the Company or any of the Subsidiaries. No holder of any
securities of the Company or any Subsidiary is entitled to have such
securities (other than the Notes) registered under any registration
statement contemplated by the Registration Rights Agreement.
(vi) 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, lease and operate
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.
(vii) 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, the "SUBSIDIARIES") have been duly
authorized and validly issued and are fully paid and nonassessable, 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. Attached as SCHEDULE II is a true and complete
list of each entity (other than the Company) in which the Company has a
direct or indirect majority equity or voting interest, their jurisdictions
of incorporation or formation, their stockholders and percentage equity
ownership by the Company.
(viii) 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
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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 to the extent each such entity
is a party thereto.
(ix) Each of the Issuers 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 Operative Documents to which
it is a party and to consummate the transactions contemplated by the
Operative Documents to be consummated on its part and, without limitation,
the Company has all requisite corporate power and authority to issue, sell
and deliver the Notes and each Guarantor has all requisite corporate and
partnership power, as the case may be, and authority to execute, deliver
and perform all its obligations under its Guarantee. Each of the Issuers
has duly authorized the execution, delivery and performance of each of the
Operative Documents to which it is a party. Each of the Operative Documents
conforms, or when executed and delivered will conform, in all material
respects to the descriptions thereof in the Offering Memorandum.
(x) 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 to so qualify would not have a Material Adverse Effect
(as defined herein). The Company has no subsidiaries (as defined in the
Exchange Act) other than the Guarantors and such other subsidiaries
("DE-MINIMIS SUBSIDIARIES") as would not require the Company to include
separate financial statements, or a consolidating footnote to its financial
statements, for such subsidiaries in the Preliminary Offering Memorandum
and Offering Memorandum in accordance with the Act and the policies of the
Commission. The Company owns 100% of the outstanding capital stock or
partnership interests, as applicable, of each of the Subsidiaries. Other
than the Corporate Subsidiaries, the Partnership Subsidiary and the
De-Mimimis Subsidiaries, the Company does not own, directly or indirectly,
any shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint
venture, association or other entity. A "MATERIAL ADVERSE EFFECT" means any
material adverse effect on the business, condition (financial or other),
results of operations, performance, properties or prospects of the Company
and the Subsidiaries, taken as a whole.
(xi) This Agreement has been duly and validly executed and
delivered by each Issuer.
(xii) The Indenture and the First Supplemental Indenture, when
duly executed and delivered by each Issuer (assuming the due authorization,
execution and delivery thereof by the Trustee), will be legally binding and
valid obligations of each Issuer, enforceable against each of them in
accordance with their terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, fraudulent conveyance,
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 (collectively,
the "ENFORCEABILITY EXCEPTIONS").
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(xiii) The Original Notes, when issued, authenticated and
delivered by the Company against payment by the Initial Purchasers in
accordance with the terms of this Agreement and the Indenture, will be
legally binding and valid obligations of the Company, entitled to the
benefits of the Indenture and enforceable against the Company in accordance
with their terms, except as enforcement may be limited by the
Enforceability Exceptions.
(xiv) The Exchange Notes, when issued, authenticated and
delivered by the Company in accordance with the terms of the Registration
Rights Agreement, the Exchange Offer and the Indenture, will be legally
binding and valid obligations of the Company, entitled to the benefits of
the Indenture and enforceable against the Company in accordance with their
terms, except that enforceability may be limited by the Enforceability
Exceptions.
(xv) The Guarantees, when the Original Notes are issued,
authenticated and delivered by the Company against payment by the Initial
Purchasers in accordance with the terms of this Agreement and the
Indenture, will be legally binding and valid obligations of the Guarantors,
enforceable against each of them in accordance with their terms, except
that enforceability thereof may be limited by the Enforceability
Exceptions.
(xvi) The guarantees to be endorsed on the Exchange Notes, when
the Exchange Notes are issued, authenticated and delivered in accordance
with the terms of the Registration Rights Agreement, the Exchange Offer and
the Indenture, will be legally binding and valid obligations of the
Guarantors, enforceable against each of them in accordance with their
terms, except that enforceability thereof may be limited by the
Enforceability Exceptions.
(xvii) The Registration Rights Agreement, when duly executed and
delivered by each of the Issuers (assuming the due authorization, execution
and delivery thereof by each Initial Purchaser), will constitute a legally
binding and valid obligation of each of the Issuers, enforceable against
them in accordance with its terms, except that (a) enforceability may be
limited by the Enforceability Exceptions and (b) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws
and public policy considerations.
(xviii) The Merger Agreement has been duly executed and delivered
by the parties thereto and is a legally binding and valid obligation of
each such party, enforceable against it in accordance with its terms,
except that enforceability thereof may be limited by the Enforceability
Exceptions.
(xix) The Company has delivered to the Initial Purchasers a true
and correct copy of each of the Operative Documents, together with all
related agreements and all schedules and exhibits thereto, and there shall
have been no material amendments, alterations, modifications or waivers of
any of the provisions of any such documents since their respective dates of
execution, other than any such amendments, alterations, modifications and
waivers as to which the Initial Purchasers have been advised in writing and
which would be required to be disclosed in the Offering Memorandum; and
there exists no event or condition which would constitute a default or an
event of default under any of the Operative Documents. Each of the
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representations and warranties set forth in the each of the Operative
Documents (other than this Agreement) are true and correct in all material
respects.
(xx) All taxes, fees and other governmental charges that are due
and payable on or prior to the Closing Date in connection with the
execution, delivery and performance of the Note Documents and the
execution, delivery and sale of the Original Notes shall have been paid by
or on behalf of the Company at or prior to the Closing Date.
(xxi) None of the Company or any Subsidiary is (A) in violation
of its charter, bylaws, limited liability company agreement, limited
partnership agreement, operating agreement or other constitutive documents,
(B) in default (or, with notice or lapse of time or both, would be in
default) in the performance or observance of any obligation, agreement,
covenant or condition contained in any bond, debenture, note, indenture,
mortgage, deed of trust, loan or credit agreement, lease, license,
franchise agreement, authorization, permit, certificate or other agreement
or instrument to which any of them is a party or by which any of them is
bound or to which any of their assets or properties is subject
(collectively, "AGREEMENTS AND INSTRUMENTS"), or (C) in violation of any
law, statute, rule or regulation applicable to the Company or any
Subsidiary or their respective assets or Properties or (D) in violation of
any judgment, order or decree of any domestic or foreign court or
governmental agency or authority having jurisdiction over the Company or
any Subsidiary or their respective assets or properties or other
governmental or regulatory authority, agency or other body, which in the
case of clauses (B), (C) and (D) herein, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. There
exists no condition that, with notice, the passage of time or otherwise,
would constitute a default by the Company or any Subsidiary under any such
document or instrument or result in the imposition of any penalty or the
acceleration of any indebtedness, other than penalties, defaults or
conditions that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(xxii) The execution, delivery and performance by each of the
Issuers of the Operative Documents to which it is a party, including the
consummation of the offer and sale of the Original Notes, does not and will
not violate, conflict with or constitute a breach of any of the terms or
provisions of or a default (or an event that with notice or the lapse of
time, or both, would constitute a default) under, or require consent under,
or result in the creation or imposition of a lien, charge or encumbrance on
any property or assets of the Company or any Subsidiary (other than as
created pursuant to the Credit Agreement) pursuant to, (A) the charter,
bylaws, limited liability company agreement, limited partnership agreement,
operating agreement or other constitutive documents of the Company or any
Subsidiary, (B) any of the Note Documents or any Agreements and
Instruments, (C) any law, statute, rule or regulation applicable to the
Company or any Subsidiary or their respective assets or properties or (D)
any judgment, order or decree of any domestic or foreign court or
governmental agency or authority having jurisdiction over the Company or
any Subsidiary or their respective assets or properties. Assuming the
accuracy of the representations and warranties of each of the Initial
Purchasers in Section 5(b) of this Agreement, no consent, approval,
authorization or order of, or filing, registration, qualification, license
or permit of or with, any court or governmental agency, body or
administrative agency, domestic or foreign, is required to be obtained or
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made by the Company or any Subsidiary for the execution, delivery and
performance by the Company and the Subsidiaries of the Operative Documents
to which they are party including the consummation of any of the
transactions contemplated thereby, except (x) such as have been or will be
obtained or made on or prior to the Closing Date, (y) registration of the
Exchange Offer or resale of the Notes under the Act pursuant to the
Registration Rights Agreement and (z) qualification of the Indenture under
the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"), in
connection with the issuance of the Exchange Notes. No consents or waivers
from any other person or entity are required for the execution, delivery
and performance of this Agreement or any of the other Operative Documents
(except, with respect to the Operative Documents, such as may be required
under the securities or Blue Sky laws of the various states) by the Issuers
or the consummation by the Issuers of any of the transactions contemplated
thereby, other than such consents and waivers as have been obtained or will
be obtained prior to the Closing Date and will be in full force and effect.
(xxiii) Except as set forth in the Offering Memorandum, there is
(A) no action, suit or proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign, now pending or,
to the knowledge of the Issuers, threatened or contemplated, to which the
Company or any Subsidiary is or may be a party or to which the business,
assets or property of such person is or may be subject, (B) no statute,
rule, regulation or order that has been enacted, adopted or issued or, to
the knowledge of the Issuers, that has been proposed by any governmental
body or agency, domestic or foreign, (C) no injunction, restraining order
or order of any nature by a federal or state court or foreign court of
competent jurisdiction to which the Company or any Subsidiary is or may be
subject that (x) in the case of clause (A) above, if determined adversely
to the Company or any Subsidiary, could, individually or in the aggregate,
reasonably be expected, (1) to have a Material Adverse Effect or (2) to
interfere with or adversely affect the issuance of the Notes in any
jurisdiction or adversely affect the consummation of the transactions
contemplated by any of the Operative Documents and (y) in the case of
clauses (B) and (C) above, could, individually or in the aggregate,
reasonably be expected, (1) to have a Material Adverse Effect or (2) to
interfere with or adversely affect the issuance of the Notes or the
Guarantees in any jurisdiction or adversely affect the consummation of the
transactions contemplated by any of the Operative Documents. Every request
of any securities authority or agency of any jurisdiction for additional
information with respect to the Notes that has been received by the Company
or any Subsidiary or their counsel prior to the date hereof has been, or
will prior to the Closing Date be, complied with in all material respects.
(xxiv) Except as could not reasonably be expected to have a
Material Adverse Effect, no labor problem or dispute with the employees of
the Company or the Subsidiaries exists or, to the knowledge of the Issuers,
is threatened or imminent.
(xxv) 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
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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; 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).
(xxvi) 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; 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. The Company and
each Subsidiary maintain a system of internal environmental management
controls sufficient to provide reasonable assurance of compliance in all
material respects of their business facilities, real property and
operations with requirements of applicable Environmental Laws.
(xxvii) 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.
(xxviii) 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.
(xxix) 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 such as would not have a Material Adverse Effect or do not
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such properties by the Company and the
Subsidiaries.
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(xxx) The Company and each Subsidiary have, own, possess or have
the right to employ all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively, the
"INTELLECTUAL PROPERTY") necessary to conduct the businesses operated by
them as described in the Offering Memorandum, except where the failure to
own, possess or have the right to employ such Intellectual Property could
not reasonably be expected to have a Material Adverse Effect. Neither of
the Company nor any Subsidiary has received any notice of infringement of
or conflict with (and neither knows of any such infringement or a conflict
with) asserted rights of others with respect to any of the foregoing that,
if such assertion of infringement or conflict were sustained, could
reasonably be expected to have a Material Adverse Effect. The use of the
Intellectual Property in connection with the business and operations of the
Company and the Subsidiaries does not infringe on the rights of any person,
except for such infringement as could not reasonably be expected to have a
Material Adverse Effect.
(xxxi) 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.
(xxxii) The Company, either directly or through one or more
Subsidiaries, has in effect, with financially sound insurers, insurance
with respect to its business and 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.
(xxxiii) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Original 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 Employee
Retirement Income Security Act of 1974, as amended ("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."
(xxxiv) 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 and covenants contained in Section 5(b)(i) of
this Agreement. No form of general solicitation or general advertising (as
those terms are used in Regulation D under the
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Act) was used by the Company, any of the Guarantors or any of their
representatives (other than in the case of the Initial Purchasers and any
of their affiliates, as to whom the Issuers make no representations) 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 an 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.
(xxxv) Neither the Company nor any Subsidiary is an "investment
company" or a company "controlled" by an "investment company" incorporated
in the United States within the meaning of the Investment Company Act of
1940, as amended.
(xxxvi) Each of the Company and its Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that: (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
recorded as necessary to permit preparation of its financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded accountability for its assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.
(xxxvii) None of the Company or any of its 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 Issuers to facilitate the sale or resale of the Original
Notes or (B) sold, bid for, purchased or paid any person any compensation
for soliciting purchases of the Original Notes in a manner that would
require registration of the Original Notes under the Act or paid or agreed
to pay to any person any compensation for soliciting another to purchase
any other securities of any Issuer in a manner that would require
registration of the Original Notes under the Act.
(xxxviii) None of the Company or any of its affiliates (as
defined in Regulation D under the Act) has, directly or through any agent
(other than the Initial Purchasers or any of their affiliates, as to which
no representation is made), sold, offered for sale, contracted to sell,
pledged, solicited offers to buy or otherwise disposed of or negotiated in
respect of, any security (as defined in the Act) that is currently or will
be integrated with the sale of the Original Notes in a manner that would
require the registration of the Original Notes under the Act.
(xxxix) None of the Issuers or any of their affiliates, or any
person acting on its or their behalf (other than the Initial Purchasers or
any of their affiliates, as to whom the Issuers make no representation), is
engaged in any directed selling effort with respect to the Original Notes,
and each of them has complied with the offering restrictions requirement of
Regulation S. Terms used in this paragraph have the meaning given to them
by Regulation S.
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(xl) No form of general solicitation or general advertising
(prohibited by the Act in connection with offers or sales such as the
Exempt Resales) was used by the Company or any of its representatives
(other than the Initial Purchasers or any of their affiliates, as to whom
the Issuers make no representation) in connection with the offer and sale
of any of the Original 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 displayed on any computer terminal, or any seminar
or meeting whose attendees have been invited by any general solicitation or
general advertising. None of the Company or any of its affiliates has
entered into, and none of the Company or any of its affiliates will enter
into, any contractual arrangement with respect to the distribution of the
Original Notes except for this Agreement.
(xli) 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.
(xlii) As of December 31, 2001, none of the Company or any
Subsidiary had any material liabilities or obligations, direct or
contingent, that were not set forth in the consolidated balance sheet as of
such date or in the notes thereto set forth in the Offering Memorandum.
Since December 31, 2001, except as set forth or contemplated in the
Offering Memorandum, (a) none of the Company or any Subsidiary has (1)
incurred any liabilities or obligations, direct or contingent, that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, or (2) entered into any material transaction not in the
ordinary course of business, (b) there has not been any material adverse
change, event or development in respect of the business, properties,
prospects, results of operations or condition (financial or other) of the
Company and the Subsidiaries that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, (c) there has
been no dividend or distribution of any kind declared, paid or made by the
Company on any class of capital stock and (d) there has not been any change
in the long-term debt of the Company or any of the Subsidiaries.
(xliii) Neither the Company nor any Subsidiary (nor any agent
thereof acting on their behalf) has taken, and none of them will take, any
action that might cause this Agreement or the issuance or sale of the Notes
to violate Regulations T, U or X of the Board of Governors of the Federal
Reserve System, as in effect, or as the same may hereafter be in effect, on
the Closing Date.
(xliv) Deloitte & Touche LLP is an independent accountant within
the meaning of the Act. The historical financial statements and the notes
thereto included in the Offering Memorandum present fairly in all material
respects the consolidated financial position and results of operations of
the Company and the Subsidiaries at the respective dates and for the
respective periods indicated. Such financial statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods presented (except as disclosed in
the Offering Memorandum). The other financial and statistical information
and data included in the Offering Memorandum are accurately presented in
all material
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respects and prepared on a basis consistent with the financial statements
and the books and records of the Company and the Subsidiaries.
(xlv) The pro forma financial statements (including the notes
thereto) and the other pro forma financial information included in the
Offering Memorandum (i) comply as to form in all material respects with the
applicable requirements of Regulation S-X promulgated under the Exchange
Act, (ii) have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and (iii) have
been properly computed on the bases described therein; the assumptions used
in the preparation of the pro forma financial data and other pro forma
financial information included in the Offering Memorandum are reasonable in
all material respects and the adjustments used therein are appropriate in
all material respects to give effect to the transactions or circumstances
referred to therein.
(xlvi) 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. Section 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 consumation of the transactions will own
assets having a value of 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;
(xlvii) Except as described in the section entitled "Plan of
Distribution" in the Offering Memorandum, there are no contracts,
agreements or understandings between the Company or any Subsidiary and any
other person other than the Initial Purchasers that would give rise to a
valid claim against, the Company, any Subsidiary or the Initial Purchasers
for a brokerage commission, finder's fee or like payment in connection with
the issuance, purchase and sale of the Notes.
(xlviii) The Indenture is in sufficient form for due
qualification under the Trust Indenture Act;
(xlix) 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 Issuers believe to be reliable and accurate
in all material respects and represent their good faith estimates that are
made on the basis of data derived from such sources.
Each certificate or document signed by any officer of the
Issuers and delivered to the Initial Purchasers or counsel for the Initial
Purchasers pursuant to, or in connection with, this Agreement
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shall be deemed to be a representation and warranty by the Issuers to the
Initial Purchasers as to the matters covered by such certificate or document.
The Issuers acknowledge that the Initial Purchasers and, for purposes of the
opinions to be delivered to the Initial Purchasers pursuant to Section 8 of this
Agreement, counsel to the Issuers and counsel to the Initial Purchasers will
rely upon the accuracy and truth of the foregoing representations and the
Issuers hereby consent to such reliance.
(b) Each of the Initial Purchasers acknowledges that it is
purchasing the Original Notes pursuant to a private sale exemption from
registration under the Act, and that the Original Notes have not been registered
under the Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except pursuant to an exemption from
the registration requirements of the Act. Each of the Initial Purchasers
represents, warrants and covenants to the Issuers that:
(i) (A) Neither it, nor any person acting on its behalf, has or
will solicit offers for, or offer or sell, the Original 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 (B) it has and will
solicit offers for the Original Notes only from, and will offer and sell
the Original Notes only to (1) persons whom such Initial Purchaser
reasonably believes 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 such Initial Purchaser that
each such account is 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
reliance on the exemption from the registration requirements of the Act
pursuant to Rule 144A, or (2) persons other than U.S. persons outside the
United States in reliance on the exemption from the registration
requirements of the Act provided by Regulation S.
(ii) With respect to offers and sales outside the United
States, such Initial Purchaser has offered the Original Notes and will
offer and sell the Original Notes (1) as part of its distribution at any
time and (2) otherwise until 40 days after the later of the commencement of
the offering of the Original Notes and the Closing Date, only in accordance
with Rule 903 of Regulation S or another exemption from the registration
requirements of the Act. Accordingly, neither such Initial Purchaser nor
any persons acting on its behalf has engaged or will engage in any directed
selling efforts (within the meaning of Regulation S) with respect to the
Original Notes, and any such persons have complied and will comply with the
offering restrictions requirements of Regulation S. Terms used in this
Section 5(b)(ii) have the meanings given to them by Regulation S.
(iii) Each Initial Purchaser shall not initially offer or
sell any Notes to persons in the United Kingdom, except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which shall not result in an offer
to the public in the United Kingdom within the meaning of the Public Offers
of Securities Regulations 1995. Each Initial Purchaser shall comply with
all applicable provisions of the Financial Services Act 1986 with respect
to anything done by it in relation to the Notes in, from or
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otherwise involving the United Kingdom. Each Initial Purchaser shall issue
or pass on in the United Kingdom any document received by it in connection
with the issuance of the Notes only to a person of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemption) Order 1996 (as amended) or a person to whom the
document may otherwise lawfully be issued or passed on.
The Initial Purchasers understand that the Issuers and, for
purposes of the opinions to be delivered to them pursuant to Section 8 hereof,
counsel to the Issuers and counsel to the Initial Purchasers will rely upon the
accuracy and truth of the foregoing representations, and the Initial Purchasers
hereby consent to such reliance.
6. INDEMNIFICATION. (a) Each of the Issuers, jointly and
severally, agrees to indemnify and hold harmless each Initial Purchaser, each
person, if any, who controls any Initial Purchaser within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, the agents, employees,
officers and directors of each 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) (collectively,
"LOSSES") to which they or any of them may become subject under the Act, the
Exchange Act or otherwise insofar as such Losses (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 supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED, HOWEVER,
that the Issuers will not be liable in any such case to the extent, but only to
the extent, that any such Loss arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission relating
to any Initial Purchaser made therein in reliance upon and in conformity with
written information relating to such Initial Purchaser furnished to the Company
by or on behalf of such Initial Purchaser 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.
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(b) Each Initial Purchaser agrees, severally and not jointly, to
indemnify and hold harmless each Issuer, each person, if any, who controls any
Issuer within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, and each of their respective agents, employees, officers and
directors and the agents, employees, officers and directors of any such
controlling person from and against any Losses to which they or any of them may
become subject under the Act, the Exchange Act or otherwise insofar as such
Losses (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 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 arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission relating to such Initial
Purchaser made therein in reliance upon and in conformity with information
relating to such Initial Purchaser furnished in writing to the Company by or on
behalf of the Initial Purchasers expressly for use therein. The Issuers and the
Initial Purchasers acknowledge that the information set forth in Section 9 is
the only information furnished in writing by the Initial Purchasers to the
Issuers expressly for use in the Preliminary Offering Memorandum and Offering
Memorandum.
(c) Promptly after receipt by an indemnified party under
subsection 6(a) or 6(b) above of notice of the commencement of any action, suit
or proceeding (collectively, an "ACTION"), such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under such
subsection, notify each party against whom indemnification is to be sought in
writing of the commencement of such action (but the failure so to notify an
indemnifying party shall not relieve such indemnifying party from any liability
that it may have under this Section 6 except to the extent that it has been
prejudiced in any material respect by such failure). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement of such action, the indemnifying party will be entitled to
participate in such action, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense of such action with counsel
reasonably satisfactory to such indemnified party. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ its
or their own counsel in any such action, but the reasonable fees and expenses of
such counsel shall be at the expense of such indemnified party or parties unless
(i) the employment of such counsel shall have been authorized in writing by the
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to take charge of the
defense of such action within a reasonable time after notice of commencement of
the action, or (iii) the named parties to such action (including any impleaded
parties) include such indemnified party and the indemnifying parties (or such
indemnifying parties have assumed the defense of such action), and such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them that are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties 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 reasonable fees and expenses of counsel shall be borne by the indemnifying
parties. In no event shall the indemnifying party be liable for the fees and
expenses of more than one counsel (together with appropriate local counsel) at
any time for all indemnified parties in connection with any one action or
separate but substantially similar or related actions arising in the same
jurisdiction out of the
<Page>
-22-
same general allegations or circumstances. An indemnifying party shall not be
liable for any settlement of any claim or action effected without its written
consent which consent may not be unreasonably withheld. 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 paragraph (a) or (b) of this Section 6, 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 45 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.
7. CONTRIBUTION. (a) In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 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 6 of this
Agreement, each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such aggregate Losses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Issuers, on the one hand, and the Initial Purchasers, on the other hand,
from the offering of the Original 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 above but also the relative fault of the
Issuers, on the one hand, and the Initial Purchasers, on the other hand, in
connection with the statements or omissions that resulted in such Losses, as
well as any other relevant equitable considerations. The relative benefits
received by the Issuers, 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 of Original Notes (net of discounts and commissions
but before deducting expenses) received by the Issuers are to (y) the total
discounts and commissions received by the Initial Purchasers as set forth in
this Agreement. The relative fault of the Issuers, 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 Issuers 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.
(b) The Issuers and each Initial Purchaser agree that it would
not be just and equitable if contribution pursuant to this Section 7 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 7, (i) in no case shall any
Initial Purchaser be required to contribute any amount in excess of the amount
by which the total discount and commissions applicable to the Original Notes
pursuant to this Agreement exceeds the amount of any damages that such Initial
Purchaser 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
<Page>
-23-
(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 7, each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and each director, officer, employee and agent
of such Initial Purchaser shall have the same rights to contribution as such
Initial Purchaser, and each person, if any, who controls any Issuer within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and each
director, officer, employee and agent of such Issuer shall have the same rights
to contribution such Issuer. 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 7, 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 7 or otherwise, except to
the extent that it has been prejudiced in any material respect by such failure;
PROVIDED, HOWEVER, that no additional notice shall be required with respect to
any action for which notice has been given under Section 6 for purposes of
indemnification. Anything in this section to the contrary notwithstanding, 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.
8. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The
obligations of the Initial Purchasers to purchase and pay for the Original
Notes, as provided for in this Agreement, shall be subject to satisfaction of
the following conditions prior to or concurrently with such purchase:
(a) All of the representations and warranties of the Issuers
contained in this Agreement shall be true and correct, or true and correct
in all material respects where such representations and warranties are not
qualified by materiality or Material Adverse Effect, on the date of this
Agreement and, in each case after giving effect to the transactions
contemplated hereby, on the Closing Date, except that if a representation
and warranty is made as of a specific date, and such date is expressly
referred to therein, such representation and warranty shall be true and
correct (or true and correct in all material respects, as applicable) as of
such date. The Issuers shall have performed or complied with all of the
agreements and covenants contained in this Agreement and required to be
performed or complied with by them at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers on the date of this Agreement or at
such later date as the Initial Purchasers may determine. No stop order
suspending the qualification or exemption from qualification of the
Original 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, body, or official that would, as of the Closing Date,
prevent the issuance of the Original Notes or the consumation of the
Exchange Offer; and, except as disclosed in the Offering Memorandum, no
action, suit or proceeding shall have been commenced and be pending against
or affecting or, to the best
<Page>
-24-
knowledge of the Issuers, threatened against any Issuer before any court or
arbitrator or any governmental body, agency or official that, if adversely
determined, could reasonably be expected to have a Material Adverse Effect;
and no stop order preventing the use of the Offering Memorandum, or any
amendment or supplement thereto, or any order asserting that any of the
transactions contemplated by this Agreement are subject to the registration
requirements of the Act shall have been issued. The Company shall not have
amended or supplemented the Offering Memorandum unless the Initial
Purchasers shall previously have been advised of such proposed amendment or
supplement at least two business days prior to the proposed use, and shall
not have reasonably objected to such amendment or supplement.
(d) As of December 31, 2001, except as set forth in the Offering
Memorandum, neither the Company nor any Subsidiary shall have had any
material liabilities or obligations, direct or contingent, that were not
set forth in the Company's consolidated balance sheet as of such date or in
the notes thereto set forth in the Offering Memorandum. Since December 31,
2001, except as set forth or contemplated in the Offering Memorandum, (a)
none of the Company, the Subsidiaries or Crossmann has (1) incurred any
liabilities or obligations, direct or contingent, that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect, or (2) entered into any material transaction not in the ordinary
course of business, (b) there shall not have been any event or development
in respect of the business or condition (financial or other) of the
Company, the Subsidiaries or Crossmann that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect,
(c) there shall have been no dividend or distribution of any kind declared,
paid or made by the Company on any class of capital stock and (d) there
shall not have been any incurrence of additional long term debt (or any
modifications, amendments or waivers to or under any agreements relating to
any long term debt) by the Company or any of the Subsidiaries, other than
under any existing line of credit or revolving credit facility in the
ordinary course of business.
(e) The Initial Purchasers shall have received certificates,
dated the Closing Date, signed by two authorized officers of each Issuer
confirming, as of the Closing Date, to their knowledge, the matters set
forth in paragraphs (a), (b), (c) and (d) of this Section 8.
(f) The Initial Purchasers shall have received on the Closing
Date opinions dated the Closing Date, addressed to the Initial Purchasers,
of Paul, Hastings, Janofsky & Walker LLP, counsel to the Issuers,
substantially in the form of Exhibit A hereto in form and substance
reasonably satisfactory to the Initial Purchasers and counsel to the
Initial Purchasers.
(g) The Initial Purchasers shall have received on the Closing
Date opinions dated the Closing Date, addressed to the Initial Purchasers,
of local counsel to Crossmann and its subsidiaries in the States of
Indiana, Kentucky, Ohio, Tennessee, North Carolina and South Carolina in
form and substance reasonably satisfactory to the Initial Purchasers and
counsel to the Initial Purchasers.
(h) 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.
<Page>
-25-
(i) The Initial Purchasers shall have received a "comfort
letter" from Deloitte & Touche LLP, independent public accountants for the
Company, dated 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, the Initial Purchasers
shall have received a "bring-down comfort letter" from Deloitte & Touche
LLP, dated as of the Closing Date, addressed to the Initial Purchasers and
in form and substance satisfactory to the Initial Purchasers and counsel to
the Initial Purchasers.
(j) The Issuers and the Trustee shall have executed and
delivered the First Supplemental Indenture and the Initial Purchasers shall
have received copies, conformed as executed, thereof.
(k) The Issuers and the Initial Purchasers shall have executed
and delivered the Registration Rights Agreement and the Initial Purchasers
shall have received counterparts, conformed as executed, thereof.
(l) The Merger shall have been consummated, or shall be
consummated substantially simultaneously with the offering of the Notes on
the Closing Date, on the terms and conditions set forth in the Merger
Agreement in the form previously delivered to the Initial Purchasers. The
Merger Agreement shall be in full force and effect, and there shall have
been no material amendments, alterations, modifications or waivers of any
provision thereof since the date of this Agreement (unless consented to in
writing by the Initial Purchasers).
(m) All government authorizations required in connection with
the issue and sale of the Notes as contemplated under this Agreement and
the performance of the Issuers' obligations hereunder and under Indenture
and the Notes shall be in full force and effect.
(n) The Initial Purchasers shall have been furnished with wiring
instructions for the application of the proceeds of the Original Notes in
accordance with this Agreement and such other information as they may
reasonably request.
(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 8 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.
(p) The Original Notes shall be eligible for trading in Portal
upon issuance.
(q) All agreements set forth in the representation letter of the
Issuers to DTC relating to the approval of the Notes by DTC for
"book-entry" transfer shall have been complied with.
(r) All conditions to the Merger set forth in the Merger
Agreement shall have been satisfied or waived with the prior written
consent of the Initial Purchasers. The Certificate of Merger and Articles
of Merger with respect to the Merger shall be in form and substance
<Page>
-26-
satisfactory to the Initial Purchaser and shall be filed with the Secretary
of State of the State of Delaware and Secretary of State of the State of
Indiana, respectively, substantially concurrently with the Closing.
(s) All costs, fees and expenses (including, without limitation,
legal fees and expenses) and other compensation payable to the Initial
Purchasers and their affiliates in connection with the offering of the
Original Notes, the commitment to provide the bridge loan facility and the
Merger shall have been, or simultaneously with the issuance of the Original
Notes shall be, paid.
(t) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have been any downgrading,
nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate
the direction of the possible change, in the rating accorded any Issuer's
debt by any "nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the Act.
(u) If there has been any amendment or supplement to the
Offering Memorandum, the Initial Purchasers shall have been provided draft
copies thereof at a reasonable time prior to the use thereof and the
Initial Purchasers shall not have objected to any such amendment or
supplement.
(v) At the Closing Date, this Agreement shall be amended to
cause each of the Crossmann entities listed on SCHEDULE I (the "Crossmann
entities") to become parties hereto. Such amendment, substantially in form
of Exhibit B hereto, shall be executed only by each of the Crossmann
entities.
The documents required to be delivered by this Section 8 will be
delivered at the office of counsel for the Initial Purchasers on the Closing
Date.
9. INITIAL PURCHASERS' INFORMATION. The Issuers and the Initial
Purchasers severally acknowledge that the statements with respect to the
delivery of the Original Notes to the Initial Purchasers set forth in the first
sentence of the fourth paragraph, the first sentence of the sixth paragraph and
the seventh paragraph under the caption "Plan of Distribution" in the
Preliminary Offering Memorandum and the Offering Memorandum constitute the only
information furnished in writing by the Initial Purchasers expressly for use in
the Preliminary Offering Memorandum or the Offering Memorandum.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All
representations and warranties, covenants and agreements contained in this
Agreement, including the agreements contained in Sections 4(f) and 11(d), the
indemnity agreements contained in Section 6 and the contribution agreements
contained in Section 7 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 of the Initial Purchasers or by or on behalf of the
Issuers or any controlling person thereof, and shall survive delivery of and
payment for the Original Notes to and by the Initial Purchasers. The agreements
contained in
<Page>
-27-
Sections 4(f), 6, 7 and 11(d) shall survive the termination of this Agreement,
including pursuant to Section 11.
11. 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 6 and 7) on the Initial Purchasers' part to the Issuers if, on or prior
to such date, (i) the Issuers shall have failed, refused or been unable to
perform in any material respect any agreement on its part to be performed under
this Agreement when and as required, (ii) any other condition to the obligations
of the Initial Purchasers under this Agreement to be fulfilled by the Issuers
pursuant to Section 8 is not fulfilled when and as required and not waived in
writing by the Initial Purchasers, (iii) trading in securities generally on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended or materially limited, or minimum prices shall
have been established thereon 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 federal or New York authorities,
(v) there is an outbreak or escalation of hostilities or other national or
international calamity, in any case involving the United States, 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 or other national or international calamity or
crisis (economic, political, financial or otherwise) which affects the U.S. and
international markets, making it, in the Initial Purchasers' reasonable
judgment, impracticable to proceed with the offering or delivery of the Original
Notes on the terms and in the manner contemplated in the Offering Memorandum or
(vi) there shall have been such a material adverse change or material disruption
in the financial, banking or capital markets generally (including, without
limitation, the markets for debt securities of companies similar to the Company)
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' reasonable 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 11 shall
be given at the address specified in Section 12 below by telephone, telex,
telephonic facsimile or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to Section
11(b), or if the sale of the Notes provided for in this Agreement is not
consummated because of any refusal, inability or failure on the part of the
Issuers to satisfy any condition to the obligations of the Initial Purchasers
set forth in this Agreement to be satisfied on its part or because of any
refusal, inability or failure on the part of the Issuers to perform any
agreement in this Agreement or comply with any provision of this Agreement, the
Issuers will reimburse the Initial Purchasers for all of their reasonable
out-of-pocket expenses (including, without limitation, the reasonable fees and
expenses of the Initial Purchasers' counsel) incurred in connection with this
Agreement.
<Page>
-28-
(e) If on the Closing Date any one or more of the Initial
Purchasers fails or refuses to purchase the Original Notes which it or they have
agreed to purchase hereunder on such date and the aggregate principal amount of
the Original Notes which such defaulting Initial Purchaser or Initial
Purchasers, as the case may be, agreed but failed or refused to purchase is not
more than 10% of the aggregate principal amount of the Original Notes to be
purchased on such date by all Initial Purchasers, each non-defaulting Initial
Purchaser shall be obligated severally, in the proportion which the principal
amount of the Original Notes set forth opposite its name in Schedule III bears
to the aggregate principal amount of the Original Notes which all the
non-defaulting Initial Purchasers, as the case may be, have agreed to purchase,
or in such other proportion as you may specify, to purchase the Original Notes
which such defaulting Initial Purchaser or Initial Purchasers, as the case may
be, agreed but failed or refused to purchase on such date; provided that in no
event shall the aggregate principal amount of the Original Notes which any
Initial Purchaser has agreed to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 11 by an amount in excess of one-ninth of
such principal amount of the Original Notes without the written consent of such
Initial Purchaser. If on the Closing Date any Initial Purchaser or Initial
Purchasers shall fail or refuse to purchase the Original Notes and the aggregate
principal amount of the Original Notes with respect to which such default occurs
is more than 10% of the aggregate principal amount of the Original Notes to be
purchased by all Initial Purchasers and arrangements satisfactory to the Initial
Purchasers and the Company for purchase of such Original Notes are not made
within 24 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Initial Purchaser and the Company.
In any such case which does not result in termination of this Agreement, either
you or the Company shall have the right to postpone the Closing Date, but in no
event for longer than five days, in order that the required changes, if any, in
the Offering Memorandum or any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting Initial
Purchaser from liability to the Issuers or any Initial Purchasers who have not
defaulted in respect of any default of any such Initial Purchaser under this
Agreement.
12. NOTICE. (a) 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, telegraphed or telecopied and confirmed in writing to UBS Warburg
LLC, 299 Park Avenue, New York, New York 10171 (telephone: (212) 821-3000, fax:
(212) 821-3285), Attention: Syndicate Department, with a copy to Cahill, Gordon
& Reindel, 80 Pine Street, New York, NY 10005 (telephone: (212) 701-3000, fax:
(212) 269-5420), Attention: Daniel J. Zubkoff, Esq; and if sent to the Issuers,
shall be mailed, delivered or, telegraphed or telecopied and confirmed in
writing to Beazer Homes, USA, Inc., 5775 Peachtree Dunwoody Road, Suite B-200,
Atlanta, Georgia 30342 (telephone: (404) 250-3420, fax: (404) 250-3575),
Attention: President, with a copy to Paul, Hastings, Janofsky & Walker, LLP, 399
Park Avenue, New York, NY 10022 (telephone: (212) 318-6000, fax: (212)
319-4090), Attention: William F. Schwitter, Esq.
(b) All such notices and communications shall be deemed to have
been duly given: (i) when delivered by hand, if personally delivered, (ii) five
business days after being deposited in the mail, postage prepaid, if mailed;
(iii) when receipt acknowledged by telecopier machine, if telecopied; and (iv)
and one business day after being timely delivered to a next-day air courier.
<Page>
-29-
13. PARTIES. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the Initial Purchasers, the Issuers and the
controlling persons and agents referred to in Sections 6 and 7, 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.
14. 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).
15. 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.
16. COUNTERPARTS. This Agreement may be executed in various
counterparts each of which when taken together shall be deemed an original and
shall constitute one and the same instrument.
<Page>
If the foregoing Purchase Agreement correctly sets forth the
understanding among the Issuers 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 Issuers and the
Initial Purchasers.
BEAZER HOMES USA, INC.
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President
BEAZER HOMES CORP.
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President
BEAZER/SQUIRES REALTY, INC.
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President
BEAZER HOMES SALES ARIZONA INC.
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President
BEAZER REALTY CORP.
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President
BEAZER MORTGAGE CORPORATION
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President
<Page>
BEAZER HOMES HOLDINGS CORP.
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President
BEAZER HOMES TEXAS HOLDINGS, INC.
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President
BEAZER HOMES TEXAS, L.P.
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President of the
General Partner, Beazer Homes
Texas Holdings, Inc.
APRIL CORPORATION
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President
BEAZER SPE, LLC
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President of the
Sole Member, Beazer Homes
Holdings Corp.
BEAZER HOMES INVESTMENT CORP.
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President
-31-
<Page>
BEAZER REALTY, INC.
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President
BEAZER CLARKSBURG, LLC
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President of
the Sole Managing Member, Beazer
Homes Corp.
HOMEBUILDERS TITLE SERVICES OF VIRGINIA, INC.
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President
HOMEBUILDERS TITLE SERVICES, INC.
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President
TEXAS LONE STAR TITLE, L.P.
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President of the
General Partner, Beazer Homes
Texas Holdings, Inc.
-32-
<Page>
UNIVERSAL SOLUTIONS INSURANCE AGENCY, INC.
By: /s/ David S. Weiss
----------------------------------------
Name: David S. Weiss
Title: Executive Vice President
Confirmed and accepted as of
the date first above written:
UBS WARBURG LLC
By: /s/ Adam L. Reeder
------------------------------------
Name: Adam L. Reeder
Title: Managing Director
By: /s/ Adam L. Reeder
------------------------------------
Name: Adam L. Reeder
Title: Managing Director
BANC ONE CAPITAL MARKETS, INC.
By: /s/ Thomas J. McGrath
------------------------------------
Name: Thomas J. McGrath
Title: Managing Director
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Beth May
------------------------------------
Name: Beth May
Title: Managing Director
SALOMON SMITH BARNEY INC.
By: /s/ Marc E. Schneider
------------------------------------
Name: Marc Schneider
Title: Director
BNP PARIBAS SECURITIES CORP.
By: /s/ Christine M. Smith Howard
------------------------------------
Name: Christine M. Smith Howard
Title: Authorized Signatory
-33-
<Page>
COMERICA SECURITIES, INC.
By: /s/ Michael J. Wilk
------------------------------------
Name: Michael J. Wilk
Title: Managing Director
PNC CAPITAL MARKETS, INC.
By: /s/ J. Scott Holmes
------------------------------------
Name: J. Scott Holmes
Title: Managing Director
SUNTRUST CAPITAL MARKETS, INC.
By: /s/ Bill Herrell
------------------------------------
Name: Bill Herrell
Title: Director
FIRST UNION SECURITIES, INC.
By: /s/ David Haase
------------------------------------
Name: David Haase
Title: Managing Director
-34-
<Page>
SCHEDULE I
GUARANTORS(1)
Beazer Homes Corp.
Beazer/Squires Realty, Inc.
Beazer Homes Sales Arizona Inc.
Beazer Realty Corp.
Beazer Mortgage Corporation
Beazer Homes Holdings Corp.
Beazer Homes Texas Holdings, Inc.
Beazer Homes Texas, L.P.
April Corporation
Beazer SPE, LLC
Beazer Homes Investment Corp.
Beazer Realty, Inc.
Beazer Clarksburg, LLC
Homebuilders Title Services of Virginia, Inc.
Homebuilders Title Services, Inc.
Texas Lone Star Title, L.P.
Universal Solutions Insurance Agency, Inc.
GUARANTORS ADDED AT THE CLOSING OF THE MERGER (CROSSMANN ENTITIES):
Builder's Link, Inc.
Crossmann Communities of North Carolina, Inc.
Crossmann Communities of Ohio, Inc.
Crossmann Communities of Tennessee, LLC
Crossmann Communities Partnership
Crossmann Investments, Inc.
Crossmann Management Inc.
Crossmann Mortgage Corp.
Crossmann Realty, Co.
Cutter Homes Ltd.
Deluxe Aviation, Inc.
Deluxe Homes of Lafayette, Inc.
Deluxe Homes of Ohio, Inc.
Merit Realty, Inc.
Paragon Title, LLC
Pinehurst Builders LLC
Trinity Homes LLC
- ----------
(1) The Guarantor are comprised of existing Subsidiary Guarantors and those
Subsidiary Guarantors that will be added at the closing of the Merger.
<Page>
Pinehurst Builders LLC
Trinity Homes LLC
<Page>
SCHEDULE II
<Table>
<Caption>
%
OWNED BY
JURISDICTION OF THE COMPANY
INCORPORATION OR (DIRECTLY OR
SUBSIDIARY FORMATION STOCKHOLDERS INDIRECTLY)
---------- ----------------- ------------ -------------
EXISTING SUBSIDIARIES
Beazer Homes Corp. TN Beazer Homes Holding Corp. 100
Beazer/Squires Realty, Inc. NC Beazer Homes Corp. 100
Beazer Homes Sales Arizona Inc. DE Beazer Homes Holdings Corp. 100
Beazer Realty Corp. GA Beazer Homes Corp. 100
Beazer Mortgage Corporation DE Beazer Homes USA, Inc. 100
Beazer Homes Holdings Corp. DE Beazer Homes USA, Inc. 100
Beazer Homes Texas Holdings, Inc. DE Beazer Homes Holdings Corp. 100
Beazer Homes Texas, L.P. DE Beazer Homes Corp.; Beazer 100
Homes Texas Holdings, Inc.
April Corporation CO Beazer Homes Holdings Corp. 100
Beazer SPE, LLC GA Beazer Homes Holdings Corp. 100
Beazer Homes Investment Corp. DE Beazer Homes USA, Inc. 100
Beazer Realty, Inc. NJ Beazer Homes Corp. 100
Beazer Clarksburg, LLC MD Beazer Homes Corp. 100
Homebuilders Title Services of VA Beazer Homes USA, Inc. 100
Virginia, Inc.
Homebuilders Title Services, Inc. DE Beazer Homes USA, Inc. 100
Texas Lone Star Title, L.P. TX Beazer Homes Sales Arizona, 100
Inc.; Beazer Homes Texas
Holdings Inc.
</Table>
<Page>
<Table>
Universal Solutions Insurance Agency, DE Beazer Homes USA, Inc. 100
Inc.
United Home Insurance Corporation VT Beazer Homes Corp.; Beazer 100
Homes Holdings Corp.; Beazer
Homes Texas Holdings, Inc.
Security Title Insurance Company, Inc. VT Beazer Homes USA, Inc 100
Stone Ridge Co-Tenancy Venture Beazer Homes Corp.; Centex 50
Homes
Lansdowne Community Development, LLC VA Beazer Homes Corp.; Centex 25
Homes; WL Homes LLC, dba
John Laing homes; Van Metre
Lansdowne Investments, LLC
Buildnet, Inc. Beazer Homes USA, Inc. (222,272 Series C
Preferred Shares)
Homebuilders Financial Network, Inc. Beazer Homes USA, Inc. ($2,437,500 note
convertible to
equity)
Builders Homesite, Inc. DE Beazer Homes Holdings Corp. (Common 2,206,230
(Cooperative Consortium shares; Series A-2
Among Builders) Preferred 1,691,410)
SUBSIDIARIES ACQUIRED IN THE MERGER
Builder's Link, Inc. OH Crossmann Communities of 100
Ohio, Inc.
Crossmann Communities of North NC Crossmann Communities, Inc. 100
Carolina, Inc.
Crossmann Communities of Ohio, Inc. OH Crossmann Communities, Inc. 100
Crossmann Communities of Tennessee, LLC TN Crossmann Communities, Inc.; 100
Deluxe Homes of Lafayette, Inc.
Crossmann Communities IN Crossmann Communities, Inc.; 100
Partnership Deluxe Homes of Lafayette, Inc.
</Table>
-38-
<Page>
<Table>
Crossmann-Habitat, LLC IN Crossmann Communities 70
Partnership; Habitat for
Humanity of Lafayette, Inc.
Crossmann Investments, Inc. IN Crossmann Communities, Inc. 100
Crossmann Management Inc. IN Crossmann Communities, Inc. 100
Crossmann Mortgage Corp. IN Crossmann Communities, Inc. 100
Crossmann Realty, Co. IN Crossmann Communities of 100
Ohio, Inc.
Cutter Homes Ltd. KY Crossmann Communities, Inc. 100
Deluxe Aviation, Inc. IN Crossmann Communities, Inc. 100
Deluxe Homes of Lafayette, Inc. IN Crossmann Communities, Inc. 100
Deluxe Homes of Ohio, Inc. OH Crossmann Communities of 100
Ohio, Inc.
Merit Realty of Tennessee, Inc. TN Merit Realty, Inc. 100
Merit Realty, Inc. IN Crossmann Communities, Inc. 100
Paragon Title, LLC IN Crossmann Communities, Inc.; 100
Deluxe Homes of Lafayette, Inc.
Pinehurst Builders LLC SC Crossmann Communities of 100
North Carolina, Inc.
Meridan Structural Insurance, Risk Crossmann Communities, Inc.; 100
Retention Group, Inc. Crossmann Communities
Partnership; Crossmann
Communities of Tennessee,
LLC; Crossmann Communities
of Ohio, Inc.; Crossmann
Communities of North
Carolina, Inc.; Cutter Homes
LTD; Trinity Homes LLC
</Table>
<Page>
<Table>
Trinity Homes LLC IN Crossmann Communities, Inc.; 100
Crossmann Communities
Partnership
Crossmann Properties, LLC IN Crossmann Investments, Inc. 19
WCD Associates, LLC IN Crossmann Communities 37.5
Partnership
</Table>
<Page>
SCHEDULE III
<Table>
<Caption>
PRINCIPAL AMOUNT OF
INITIAL PURCHASER ORIGINAL NOTES
UBS Warburg LLC $175,000,000
Banc One Capital Markets, Inc. 80,000,000
Credit Suisse First Boston Corporation 35,000,000
Salomon Smith Barney Inc. 35,000,000
BNP Paribas Securities Corp. 5,000,000
Comerica Securities, Inc. 5,000,000
PNC Capital Markets, Inc. 5,000,000
SunTrust Capital Markets, Inc. 5,000,000
First Union Securities, Inc. 5,000,000
Total $350,000,000
</Table>
<Page>
EXHIBIT A
FORM OF OPINION OF PAUL, HASTINGS, JANOFSKY & WALKER, LLP,
GENERAL COUNSEL FOR THE COMPANY
The opinion of Paul, Hastings, Janofsky & Walker, LLP, counsel
for the Company (capitalized terms not otherwise defined herein shall have the
meanings provided in the Purchase Agreement, to which this is an Exhibit), to be
delivered pursuant to Section 8(f) of the Purchase Agreement shall be to the
effect 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;
(ii) all of the issued and outstanding shares of capital stock
of each of the Corporate Subsidiaries that is a Delaware or Georgia
corporation have been duly authorized and validly issued and are fully paid
and non-assessable and, to such counsel's knowledge based solely on such
counsel's review of stock ledgers provided to such counsel, 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 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 that is a Delaware or
Georgia corporation or limited liability company has been duly incorporated
or formed, as the case may be, and the Partnership Subsidiary has been duly
formed, and is validly existing as a corporation, in the case of the
Corporate Subsidiaries that are either a Delaware or Georgia corporation or
limited liability company, 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 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 listed on a schedule to such
opinion;
(v) this Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors that are a Delaware
corporation, Delaware limited liability company, Georgia corporation,
Georgia limited liability company or Delaware limited partnership;
A-1
<Page>
(vi) the Indenture and the First Supplemental Indenture have
been duly authorized, executed and delivered by each of the Company and
each of the Guarantors that are a Delaware corporation, Delaware limited
liability company, Georgia corporation, Georgia limited liability company
or Delaware limited partnership, and, assuming due authorization, execution
and delivery by the Trustee, are legal, valid and binding agreements of
each of the Company and each of the Guarantors enforceable in accordance
with their terms, except as enforcement may be limited by the
Enforceability Exceptions;
(vii) the Notes have been duly authorized by the Company and the
Guarantees have been duly authorized by each of the Guarantors that are a
Delaware corporation, Delaware limited liability company, Georgia
corporation, Georgia limited liability company or Delaware limited
partnership 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 enforcement may be limited by the Enforceability Exceptions;
(viii) the Exchange Notes have been duly authorized by the
Company and the Guarantees have been duly authorized by each of the
Guarantors that are a Delaware corporation, Delaware limited liability
company, Georgia corporation, Georgia limited liability company or Delaware
limited partnership and, when executed and authenticated in accordance with
the terms of the Indenture and issued in connection with the Exchange
Offer, 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 enforcement may be limited by the Enforceability Exceptions;
(ix) the Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and the Guarantors that
are a Delaware corporation, Delaware limited liability company, Georgia
corporation, Georgia limited liability company or Delaware limited
partnership 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 enforcement may be
limited by the Enforceability Exceptions;
(x) the Company will not, upon consummation of the
transactions contemplated by this Agreement, be an "investment company," or
a "promoter" or "principal underwriter" for a "registered investment
company," as such terms are defined in the Investment Company Act of 1940,
as amended;
(xi) the Notes, the Exchange Notes, the Guarantees, the
Indenture, the First Supplemental 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, order of filing, 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
A-2
<Page>
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;
(xiii) no registration under the Act is required in connection
with the sale of the Original Notes to the Initial Purchasers as
contemplated by this Agreement and the Offering Memorandum or in connection
with the initial resale of the Original 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 (i) the charter or by-laws of the Company
or any of the Subsidiaries, (ii) under any provisions of any license,
indenture, lease, mortgage, deed of trust, bank loan, credit agreement or
other agreement or instrument which is attached or incorporated by
reference as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 2001 (except that such counsel expresses no
opinion with respect to clause (ii) above as to any covenant, restriction
or provision of any such agreement with respect to financial covenants,
ratios or financial tests or any aspect of the financial condition or
results of operations of the Company or any of its Subsidiaries), (iii) or
result in any violation of, the Delaware General Corporation Law, the laws
of the States of New York and Georgia or the Federal laws of the United
States of America or (iv) to such counsel's knowledge, any judgment, order
or decree applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body or
arbitrator of the United States or the States of New York, Georgia or
Delaware having jurisdiction over the Company or any of its Subsidiaries,
or of Crossmann and its subsidiaries, which breach or default could
reasonably be expected to have a Material Adverse Effect;
(xv) to the best of such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents of a character which
are required to be summarized or described in the Offering Memorandum which
have not been so summarized or described;
(xvi) the Indenture is in sufficient form for due qualification
under the Trust Indenture Act.
(xvii) When the Certificate of Merger has been filed with the
Secretary of State of the State of Delaware, the Merger will become
effective in Delaware in accordance with Delaware General Corporation Law.
We have participated in the preparation of the Offering
Memorandum. From time to time we have had discussions with officers, directors
and employees of the Company and the Subsidiaries, the independent accountants
who examined the consolidated financial statements of the Company and their
subsidiaries included in the Offering Memorandum, and the Initial Purchasers at
which the contents of the Offering Memorandum and related matters were
discussed. We have not independently
A-3
<Page>
verified and are not passing upon, and do not assume responsibility for, the
accuracy, completeness or fairness of the information contained in the Offering
Memorandum. Based upon the participation and discussions described above,
however, no facts have come to such counsel's attention that cause it to believe
that the Offering Memorandum, as of its date or as of the date hereof, contained
or contains an untrue statement of a material fact, or omitted or omits to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading (it being
understood that we have not been requested to and do not make any comment with
respect to the financial statements and the notes thereto and the other
financial, statistical and accounting data included in 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 of involving the
application of the laws of any jurisdiction other than the state 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.
A-4
<Page>
EXHIBIT B
FORM OF
AMENDMENT NO. 1 TO PURCHASE AGREEMENT
This Amendment No.1 (the "Amendment") to the Purchase
Agreement (the "Agreement") among Beazer Homes USA, Inc., a Delaware corporation
(the "Company"), each of the Company's subsidiaries listed on Schedule I thereto
(the "Guarantors") and UBS Warburg LLC, Banc One Capital Markets, Inc., Credit
Suisse First Boston Corporation, Salomon Smith Barney Inc., BNP Paribas
Securities Corp., SunTrust Capital Markets, Inc. and First Union Securities,
Inc. (collectively, the "Initial Purchasers"), dated as of April 11, 2002, is
made and entered into as of the 17th day of April, 2002 by and among the
Company, the Guarantors and the Initial Purchasers. Capitalized terms used but
otherwise not defined herein shall have the respective meanings ascribed to them
in the Agreement.
WHEREAS, pursuant to Section 8(v) of the Agreement, the
Agreement shall be amended at the Closing Date to cause each of the Crossmann
entities (the "Crossmann entities") to become parties to the Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements set forth herein, and in the Agreement, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. The Crossmann entities hereby agree to become parties to
the Agreement and shall be considered Guarantors for purposes thereof;
2. On and after the date hereof, all references to the
Agreement shall be deemed to refer to the Agreement, as amended hereby; and
3. Except as expressly modified hereby, the Agreement is
hereby ratified and confirmed and shall remain in full force and effect.
B-1
<Page>
4. IN WITNESS WHEREOF, the Crossmann entities have caused
this Amendment to be duly executed as of the date first written above.
BUILDER'S LINK, INC.
CROSSMANN COMMUNITIES OF NORTH
CAROLINA, INC.
CROSSMANN COMMUNITIES OF OHIO, INC.
CROSSMANN COMMUNITIES OF TENNESSEE, LLC
CROSSMANN COMMUNITIES PARTNERSHIP
CROSSMANN INVESTMENTS, INC.
CROSSMANN MANAGEMENT INC.
CROSSMANN MORTGAGE CORP.
CROSSMANN REALTY, CO.
CUTTER HOMES LTD.
DELUXE AVIATION, INC.
DELUXE HOMES OF LAFAYETTE, INC.
DELUXE HOMES OF OHIO, INC.
MERIT REALTY, INC.
PARAGON TITLE, LLC
PINEHURST BUILDERS LLC
TRINITY HOMES LLC.,
AS GUARANTORS
By
------------------------------------
Title:
B-2