EXHIBIT 4.3
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KB HOME,
Company,
THE GUARANTORS PARTY HERETO,
Guarantors,
and
SUNTRUST BANK,
Trustee
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SECOND SUPPLEMENTAL INDENTURE
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Dated as of June 30, 2004
6-3/8% Senior Notes due 2011
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THIS SECOND SUPPLEMENTAL INDENTURE is dated as of June 30, 2004 among
KB HOME, a Delaware corporation (the "Company"), the Guarantors (as defined in
the Original Indenture referred to below), and SUNTRUST BANK, a banking
association duly organized and existing under the laws of Georgia (the
"Trustee").
RECITALS
WHEREAS the Company and the Guarantors have executed and delivered to
the Trustee an Indenture dated as of January 28, 2004 (the "Original
Indenture"), which Original Indenture has been previously amended and
supplemented by a First Supplemental Indenture dated as of January 28, 2004 (the
"First Supplemental Indenture"; and the Original Indenture, as supplemented and
amended by the First Supplemental Indenture and by this Second Supplemental
Indenture, is hereinafter called the "Indenture"), providing for the issuance by
the Company from time to time of its debt securities (the "Securities");
WHEREAS, Section 901 of the Original Indenture provides that the
Company may enter into supplemental indentures to, among other things, establish
the form or terms of Securities of any series as permitted by Sections 201 and
301 of the Original Indenture and any deletions from or additions or changes to
the Original Indenture in connection therewith;
WHEREAS the Company and the Guarantors propose in and by this Second
Supplemental Indenture to supplement and amend the Original Indenture in certain
respects to establish a series of Securities issued by the Company and
guaranteed by the Guarantors pursuant to the Indenture designated as the "6-3/8%
Senior Notes due 2011"; and
WHEREAS the Company and the Guarantors have requested that the Trustee
execute and deliver this Second Supplemental Indenture and have certified that
all requirements necessary to make this Second Supplemental Indenture a valid
instrument in accordance with its terms have been satisfied, and that the
execution and delivery of this Second Supplemental Indenture have been duly
authorized in all respects.
NOW THEREFORE, for and in consideration of the premises and the
purchase of the Notes (as defined below) by the Holders (as defined in the
Original Indenture) thereof, it is mutually covenanted and agreed, for the equal
and proportionate benefit of all Holders of the Notes as follows:
SECTION 1. Definitions.
(a) Terms used herein and not defined herein have the meanings
ascribed to such terms in the Original Indenture.
(b) As used in this Second Supplemental Indenture, the
following terms have the meanings specified below:
"Additional Interest" has the meaning set forth in the Initial
Registration Rights Agreement.
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"Additional Notes" means any additional Notes which may be issued from
time to time pursuant to a "re-opening" of the series of Notes as contemplated
by Section 2(a).
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depository and, if applicable, Euroclear or Clearstream, as the case may be,
that apply to such transfer or exchange.
"Certificated Notes" has the meaning provided in Section 2(b).
"Clearstream" means Clearstream Banking, S.A. and any successor
thereto.
"Closing Date" means June 30, 2004.
"DTC Legend" means, collectively, legends substantially in the form of
the legends appearing in the first and second paragraphs of Exhibit A hereto.
"Euroclear" means Euroclear System and any successor thereto.
"Exchange Notes" means Notes that are Exchange Securities (as defined
in the Initial Registration Rights Agreement).
"Exchange Offer" has the meaning set forth in the Initial Registration
Rights Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Initial Registration Rights Agreement.
"Global Notes" has the meaning provided in Section 2(b). For purposes
of clarity, it is hereby confirmed that the Global Notes constitute global
Securities as referred to in the Original Indenture and that the term "Global
Notes" includes the Regulation S Global Notes and the Rule 144A Global Notes or
any of them.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Purchasers" means the initial purchasers named in the Purchase
Agreement.
"Initial Registration Rights Agreement" means the Registration Rights
Agreement dated as of June 30, 2004 among the Company, the Guarantors and the
Initial Purchasers.
"Letter of Transmittal" means a letter of transmittal as contemplated
by Section 2(a) of the Initial Registration Rights Agreement.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" means the series of Securities issued pursuant to the Indenture
designated as the 6-3/8% Senior Notes due 2011, including Notes initially issued
on the Closing Date, any Exchange Notes or Private Exchange Notes issued in
exchange for any other Notes, and any other Notes issued after the Closing Date
under the Indenture. For purposes of the Indenture, all Notes,
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including, without limitation, Exchange Notes, Private Exchange Notes and
Additional Notes, shall vote together and otherwise constitute a single series
of Securities under the Indenture.
"Participant" means, with respect to the Depository, Euroclear or
Clearstream, a Person who has an account with the Depository, Euroclear or
Clearstream, respectively (and with respect to the Depository, shall include
Euroclear and Clearstream).
"Private Exchange Notes" means Notes that are Private Exchange
Securities (as defined in the Initial Registration Rights Agreement).
"Private Placement Legend" means a legend substantially in the form of
the legend appearing in the third paragraph of Exhibit A hereto.
"Purchase Agreement" means the Purchase Agreement dated June 23, 2004
among the Company, the Guarantors, Banc of America Securities LLC and the other
Initial Purchasers party thereto.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means either (1) the Initial
Registration Rights Agreement, or (2) with respect to any subsequent issuance of
Additional Notes in a transaction exempt from the registration requirements of
the Securities Act, the registration rights agreement, if any, entered into by
the Company and the other parties thereto in connection with such issuance, or
both, as the context shall require.
"Regulation S" means Regulation S under the Securities Act or any
successor thereto.
"Regulation S Global Note" has the meaning provided in Section 2(b).
"Regulation S Permanent Global Note" has the meaning provided in
Section 2(b) of this Second Supplemental Indenture.
"Regulation S Temporary Global Note" has the meaning provided in
Section 2(b) of this Second Supplemental Indenture.
"Resale Restriction Termination Date" has the meaning provided in
Section 3(a).
"Restricted Certificated Note" means a Certificated Note bearing, or
that is required under this Second Supplemental Indenture to bear, a Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing, or that is
required under this Second Supplemental Indenture to bear, a Private Placement
Legend.
"Restricted Note" means each of a Restricted Certificated Note and a
Restricted Global Note.
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"Restricted Period" means the period beginning on and including the
date when the Notes were first offered through the Initial Purchasers or the
Closing Date, whichever is later, and continuing through and including the 40th
calendar day thereafter.
"Rule 144" means Rule 144 under the Securities Act or any successor
thereto.
"Rule 144A" means Rule 144A under the Securities Act or any successor
thereto.
"Rule 144A Global Note" has the meaning provided in Section 2(b).
"Rule 903" means Rule 903 promulgated under the Securities Act or any
successor thereto.
"Rule 904" means Rule 904 promulgated under the Securities Act or any
successor thereto.
"Second Supplemental Indenture" means this Second Supplemental
Indenture dated as of June 30, 2004 among the Company, the Guarantors and the
Trustee, as originally executed and delivered or, if amended or supplemented as
provided in the Indenture, as so amended or supplemented, and shall include the
form and terms of the Notes established hereby.
"Shelf Registration Statement" has the meaning set forth in the Initial
Registration Rights Agreement.
"Transfer Certificate" means a Transfer Certificate substantially in
the form included in Exhibit A hereto, and which may be the Transfer Certificate
attached to a Note or a separate Transfer Certificate.
"United States" has the meaning set forth in Regulation S. For purposes
of clarity, it is hereby confirmed that the term "United States," as used in
this Second Supplemental Indenture, shall have the foregoing meaning and not the
meaning set forth in the Original Indenture.
"U.S. Person" shall mean a "U.S. person" as defined in Regulation S.
"Unrestricted Certificated Note" means a Certificated Note that does
not bear and is not required under this Second Supplemental Indenture to bear a
Private Placement Legend.
"Unrestricted Global Note" means a permanent Global Note that does not
bear, and is not required under this Second Supplemental Indenture to bear, a
Private Placement Legend.
SECTION 2. Creation of the Notes. Pursuant to Sections 201 and 301 of
the Original Indenture, there is hereby created a new series of Securities
designated as the "6-3/8% Senior Notes due 2011." The Notes (including, without
limitation, the Exchange Notes and Private Exchange Notes) shall be in
substantially the form set forth in Exhibit A hereto, with such changes therein
as may be authorized by any officer of the Company executing any Notes by manual
or facsimile signature, such approval to be conclusively evidenced by the
execution thereof by such officer. The Notes shall have the following terms:
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(a) The aggregate principal amount of the Notes which may be
authenticated and delivered under the Indenture is limited to $350,000,000,
except for Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305,
306, 905 or 1107 of the Original Indenture (including, without limitation,
Exchange Notes or Private Exchange Notes issued in exchange for other Notes);
provided, however, such series may be re-opened by the Company for the issuance
of Additional Notes, so long as any such Additional Notes have the same form and
terms (other than date of issuance and the date from which interest thereon
shall begin to accrue and except that the form of such Additional Notes may
refer to a different Registration Rights Agreement than the Notes issued on the
Closing Date and such Additional Notes, if issued pursuant to a registration
statement which is effective under the Securities Act, need not bear the Private
Placement Legend and may omit the paragraph included in Exhibit A hereto which
refers to the Registration Rights Agreement), and carry the same right to
receive accrued and unpaid interest, as the Notes theretofore issued; provided,
however, that, notwithstanding the foregoing, such series may not be reopened if
the Company has effected defeasance or covenant defeasance with respect to the
Notes pursuant to Sections 402(2) or 402(3), respectively, of the Original
Indenture or has effected satisfaction and discharge with respect to the Notes
pursuant to Section 401 of the Original Indenture; and provided, further, that
no Additional Notes may be issued at a price that would cause such Additional
Notes to have "original issue discount" within the meaning of Section 1273 of
the Internal Revenue Code of 1986, as amended.
(b) The Notes are to be issuable only as Registered Securities
without Coupons. The Notes shall be initially issued in book-entry form and
represented by permanent global Notes deposited with or on behalf of and
registered in the name of the Depository or its nominee (the "Global Notes").
The initial Depository for the Global Notes shall be The Depository Trust
Company, the depository arrangements shall be those employed by whoever shall be
the Depository with respect to the Global Notes from time to time, and the
Trustee shall be entitled to make any endorsements on any Global Note to reflect
any increases or decreases in the principal amount thereof. Notes initially
offered and sold in reliance on Rule 144A shall initially be issued in the form
of one or more permanent Global Notes (the "Rule 144A Global Notes"). Notes
initially offered and sold in "offshore transactions" (as defined in Regulation
S) pursuant to Regulation S shall initially be issued in the form of one or more
temporary Global Notes (the "Regulation S Temporary Global Notes"). Following
the Restricted Period, interests in the Regulation S Temporary Global Notes may
be exchanged, subject to compliance with Section 3 hereof, for interests in one
or more permanent Global Notes (the "Regulation S Permanent Global Notes" and,
together with the Regulation S Temporary Global Notes, the "Regulation S Global
Notes"). Notwithstanding the foregoing, certificated Notes in definitive form
("Certificated Notes") may be issued in exchange for Global Notes under the
circumstances contemplated by the seventh paragraph of Section 305 of the
Original Indenture.
(c) The initial offering price of the Notes shall be 99.281%
of the principal amount thereof, plus accrued interest, if any, from June 30,
2004.
(d) The Stated Maturity of the Notes on which the principal
thereof is due and payable shall be August 15, 2011.
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(e) The principal of the Notes shall bear interest at the rate
of 6-3/8% per annum from June 30, 2004 or from the most recent date to which
interest has been paid or duly provided for, payable semiannually in arrears on
February 15 and August 15 (each, an "Interest Payment Date") of each year,
commencing February 15, 2005, to the Persons in whose names such Notes (or one
or more Predecessor Securities) are registered at the close of business on the
February 1 or August 1 immediately prior to such Interest Payment Dates (each, a
"Regular Record Date") regardless of whether such Regular Record Date is a
Business Day. Interest on the Notes will be computed on the basis of a 360-day
year consisting of twelve 30-day months. No Additional Amounts shall be payable
on the Notes.
(f) The Notes are redeemable, as a whole or from time to time
in part, at the option of the Company on the terms and subject to the conditions
set forth in the Original Indenture and in the form of Note attached as Exhibit
A to this Second Supplemental Indenture.
(g) The Notes shall not be repayable or redeemable at the
option of the Holders prior to the Stated Maturity of the principal thereof
(except as provided in Article Five of the Original Indenture) and shall not be
subject to a sinking fund or analogous provision.
(h) The Borough of Manhattan, The City of New York is hereby
designated as a Place of Payment for the Notes.
(i) The Company hereby appoints the Trustee, acting through
the office of the Trustee located at c/o Computershare Trust Company of New
York, Wall Street Plaza, 88 Pine Street, 19th Floor, New York, New York 10005,
in the Borough of Manhattan, The City of New York, as the Company's Office or
Agency for the purposes specified in Section 1002 of the Original Indenture;
provided, however, subject to Section 1002 of the Original Indenture, the
Company may at any time remove the Trustee as its Office or Agency in the
Borough of Manhattan, The City of New York designated for such purposes and may
from time to time designate one or more other Offices or Agencies for such
purposes and may from time to time rescind such designation, so long as the
Company shall at all times maintain an Office or Agency for such purposes in the
Borough of Manhattan, The City of New York.
(j) The Notes shall be issued in denominations of $1,000 and
integral multiples of $1,000 in excess thereof.
(k) The principal of, premium, if any, and interest on the
Notes shall be payable in Dollars.
(l) Sections 402(2) and 402(3) of the Original Indenture shall
apply to the Notes; provided that (i) the Company may effect defeasance and
covenant defeasance pursuant to Sections 402(2) and 402(3), respectively, only
with respect to all (and not less than all) of the Outstanding Notes, and (ii)
the only covenants that shall be subject to covenant defeasance shall be those
expressly referred to in Section 402(3) of the Original Indenture.
(m) Anything in the Indenture or the Notes to the contrary
notwithstanding, payments of the principal of and premium, if any, and interest
on the Global Notes shall be made by wire transfer.
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(n) To the extent that any provision of the Indenture or the
Notes provides for the payment of interest on overdue principal of, or premium,
if any, or interest on, the Notes, then, to the extent permitted by law,
interest on such overdue principal, premium, if any, and interest shall accrue
at the rate of interest borne by the Notes. If Additional Interest shall be
payable on any Note for any day then, for purposes of the immediately preceding
sentence, the rate of interest borne by such Note for such day shall be the sum
of the original interest rate on such Note plus the rate at which Additional
Interest shall accrue on such Note for such day.
(o) The Notes shall have such other terms and provisions as
are set forth in the form of Note attached as Exhibit A hereto, all of which
terms and provisions are incorporated by reference in and made a part of this
Second Supplemental Indenture as if set forth in full herein.
(p) As used in the Indenture with respect to the Notes and in
the certificates evidencing the Notes, all references to "premium" on the Notes
shall mean any amounts (other than accrued interest) payable upon the redemption
of any Notes in excess of 100% of the principal amount of such Notes.
(q) As provided in the Registration Rights Agreement,
Additional Interest may, subject to the terms and conditions specified therein,
be payable on all or some of the Notes from time to time. Whenever in the
Indenture (including, without limitation, this Second Supplemental Indenture) or
the Notes there is mentioned, in any context, the payment of the interest on the
Notes, such mention shall be deemed to include mention of the payment of
Additional Interest to the extent that, in such context, Additional Interest is,
was or would be payable in respect thereof pursuant to the terms of the
Registration Rights Agreement, and express mention of the payment of Additional
Interest in any provision of the Indenture (including, without limitation, this
Second Supplemental Indenture) or in the Notes shall not be construed as
excluding Additional Interest in those provisions of the Indenture (including,
without limitation, this Second Supplemental Indenture) or the Notes where such
express mention is not made.
(r) The Notes shall have the benefit of the Guarantees and the
Guarantors hereby confirm that the principal of and premium, if any, and
interest (including, without limitation, any Additional Interest) on the Notes
shall be guaranteed pursuant to the Guarantees and otherwise in accordance with
and subject to the limitations set forth in Article Sixteen of the Original
Indenture.
(s) The Notes shall rank senior in right of payment to the
Company's 8-5/8% Senior Subordinated Notes due 2008, 7-3/4% Senior Subordinated
Notes due 2010 and 9-1/2% Senior Subordinated Notes due 2011 (the "Senior
Subordinated Notes") and shall constitute "Senior Indebtedness" as defined in
the Indenture dated as of November 19, 1996, as amended and supplemented by the
First Supplemental Indenture thereto dated as of December 18, 2003 (as so
amended and supplemented, the "Senior Subordinated Indenture"), by and between
the Company, the guarantors party thereto and Trustee, as successor trustee.
Each Guarantor's Guarantee of the Notes shall rank senior in right of payment to
its guarantee of the Senior Subordinated Notes and shall constitute "Guarantor
Senior Indebtedness" as defined in the Senior Subordinated Indenture. The Notes
shall rank pari passu in right of payment with the Company's 5-3/4% Senior Notes
due 2014.
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(t) Exchange Notes and Private Exchange Notes may from time to
time be executed by the Company and delivered to the Trustee for authentication,
and the Trustee shall thereupon authenticate and deliver said Exchange Notes or
Private Exchange Notes, as the case may be, upon receipt and subsequent
cancellation of an equal aggregate principal amount of Notes (or beneficial
interests in Global Notes) tendered for exchange pursuant to the Exchange Offer
(in the case of the Exchange Notes) or as contemplated by the Registration
Rights Agreement (in the case of Private Exchange Notes), upon a Company Order
without any further action by the Company. Anything herein to the contrary
notwithstanding (other than Section 3(b)(v)), Private Exchange Notes may be
issued to the Initial Purchasers under the circumstances set forth in Section 2
of the Registration Rights Agreement and, if issued, such Private Exchange Notes
(x) may be issued in the form of Global Notes or Certificated Notes or both and
(y) if issued as Certificated Notes, may be exchanged for, or transferred to
Persons who will take delivery thereof in the form of, beneficial interests in
Global Notes, subject to compliance with the transfer restrictions set forth in
Section 3 hereof.
SECTION 3. Special Transfer Provisions.
(a) Legend on Restricted Notes.
(i) Each Note (including Global Notes and Private
Exchange Notes) shall bear a Private Placement Legend until such time
as such Note is exchanged for an Exchange Note pursuant to the Exchange
Offer (it being understood that such Exchange Notes shall not bear the
Private Placement Legend) or sold or otherwise transferred pursuant to
an effective registration statement under the Securities Act or
pursuant to the exemption from the registration requirements under the
Securities Act provided by Rule 144 (if available); provided that upon
a request made by the Holder of any Note bearing a Private Placement
Legend from and after the date of expiration of the holding period
applicable to sales of such Note pursuant to Rule 144(k) (the "Resale
Restriction Termination Date"), or from and after the date that such
Note has been sold or otherwise transferred pursuant to an effective
registration statement under the Securities Act or pursuant to the
exemption from the registration requirements under the Securities Act
provided by Rule 144 (if available), the Company will execute and the
Trustee will authenticate and deliver, in exchange for such Note, a new
Note in like aggregate principal amount but not bearing the Private
Placement Legend; and provided, further, that Regulation S Permanent
Global Notes shall not bear the Private Placement Legend. In connection
with any request to remove the Private Placement Legend from a Note
being transferred pursuant to Rule 144 prior to the Resale Restriction
Termination Date, the Company may request that the transferor deliver
such legal opinions and other certificates as the Company reasonably
may require to confirm that such transfer is being made in accordance
with Rule 144.
(ii) Any Note issued upon registration of transfer or
exchange of a Note which bears a Private Placement Legend shall, except
as otherwise permitted pursuant to this Second Supplemental Indenture,
also bear a Private Placement Legend. Any Note issued upon registration
of transfer or exchange of a Note which does not bear a Private
Placement Legend shall not bear a Private Placement Legend.
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(iii) Except in the case of (i) Exchange Notes issued
pursuant to the Exchange Offer and (ii) the Regulation S Permanent
Global Notes, the Trustee shall not issue any Notes which do not bear
the Private Placement Legend until it has received an Officers'
Certificate from the Company directing it to do so, and the Company
agrees that it shall deliver such an Officers' Certificate directing
the Trustee to issue Notes which do not bear the Private Placement
Legend as and when required by this Second Supplemental Indenture.
(b) Book-Entry Provisions for Global Notes.
(i) General. Transfers of a Global Note shall be limited
as specified in the DTC Legend. Transfers and exchanges of beneficial
interests in a Global Note may be made in accordance with the
Applicable Procedures, subject to the other provisions of this Section
3 to the extent applicable.
(ii) Exchange of Global Notes for Certificated Notes.
Except as provided in Section 2(t) hereof, beneficial interests in
Global Notes shall be exchangeable for Certificated Notes only under
the circumstances specified in the seventh paragraph of Section 305 of
the Original Indenture. In the event of such an exchange, the Global
Notes shall be deemed to be surrendered to the Trustee for cancellation
and the Company shall execute, and the Trustee shall authenticate and
deliver, to each beneficial owner identified by the Depository, in
exchange for its interest in the Global Notes, an equal aggregate
principal amount of Certificated Notes, registered in the names
provided by the Depository; provided that any Certificated Notes issued
in exchange for beneficial interests in Global Notes that bear the
Private Placement Legend also shall bear the Private Placement Legend;
and provided, further, that Certificated Notes may not be issued in
exchange for beneficial interests in Regulation S Temporary Global
Notes until after the end of the Restricted Period and thereafter may
be issued only upon receipt by the Security Registrar of the
certification required by Rule 903(b)(3)(ii)(B) of Regulation S. In
connection with each such exchange, the Trustee shall reflect on its
books and records and by endorsement on the grid attached to the
applicable Global Note the date and a decrease in the principal amount
of such Global Note equal to the principal amount of the beneficial
interest so exchanged. Except as provided in the seventh paragraph of
Section 305 of the Original Indenture and in Section 2(t) hereof,
beneficial interests in Global Notes may not be exchanged for, or
transferred to Persons who will take delivery thereof in the form of,
Certificated Notes.
(iii) Transfers among Global Notes. In connection with
any exchange of a beneficial interest in a Global Note for, or any
transfer of a beneficial interest in a Global Note to a Person who will
take delivery thereof in the form of, a beneficial interest in another
Global Note, the Trustee shall reflect on its books and records and by
endorsement on the grid attached to such original Global Note the date
and a decrease in the principal amount of such first Global Note equal
to the principal amount of the beneficial interest to be so exchanged
or transferred, as the case may be, and shall also reflect on its books
and records and on the grid attached to such second Global Note the
date and an increase in the principal amount of such second Global Note
equal to the principal amount of the beneficial interest to be so
exchanged or transferred, as the case
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may be, provided that any transfer or exchange of a beneficial interest
in a Restricted Global Note must comply with the applicable transfer
restrictions set forth in this Section 3.
(iv) Transfers of Certificated Notes for Global Notes.
In the event that Certificated Notes are issued under the circumstances
specified in Section 2(t) or Section 3(b)(ii) above and, thereafter,
the Company permits Certificated Notes to be exchanged for, or
transferred to Persons who will take delivery thereof in the form of,
beneficial interests in Global Notes (it being understood that the
Company shall not be required to permit any such transfer or exchange
of a Certificated Note (other than a Private Exchange Note) for
beneficial interests in Global Notes), then in connection with any
exchange of a beneficial interest in a Certificated Note for, or any
transfer of a Certificated Note to a Person who will take delivery
thereof in the form of, a beneficial interest in a Global Note, the
Trustee shall reflect on its books and records and on the grid attached
to such Global Note the date and an increase in the principal amount of
such Global Note equal to the principal amount of the Certificated Note
to be transferred or exchanged, as the case may be, the Trustee shall
cancel such Certificated Note and, if the entire principal amount of
such Certificated Note is not being transferred or exchanged, the
Company shall execute, and the Trustee shall authenticate and deliver,
one or more Certificated Notes equal in principal amount to the
principal amount not being transferred or exchanged, as the case may
be, registered in the name of the transferor or the Person effecting
such exchange, as the case may be; provided that any such transfer or
exchange of a Restricted Certificated Note must comply with the
applicable transfer restrictions set forth in this Section 3.
(v) Exchanges of Interest in Regulation S Temporary
Global Notes. Anything herein to the contrary notwithstanding,
(A) in no event shall beneficial interests in any
Regulation S Temporary Global Note be exchanged for, or
transferred to a Person who will take delivery thereof in the
form of, beneficial interests in the Regulation S Permanent
Global Notes or any other Unrestricted Global Note, or for
Certificated Notes, until (x) after the end of the Restricted
Period and (y) receipt by the Security Registrar of the
certification required pursuant to Rule 903(b)(3)(ii)(B) of
Regulation S,
(B) in no event shall any beneficial interest in the
Regulation S Temporary Global Note be transferred to any U.S.
Person or to the account or for the benefit of any U.S.
Person, and
(C) interests in the Regulation S Temporary Global
Notes may only be acquired in compliance with Regulation S.
(c) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depository, in accordance with the
provisions of this Second Supplemental Indenture and the Applicable Procedures.
Beneficial interests in the Restricted Global Notes shall be subject to
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restrictions on transfer comparable to those set forth herein to the extent
required by the Securities Act. Transfers of beneficial interests in Global
Notes shall also require compliance with paragraph (i) or (ii) below, as the
case may be, as well as one or more of the following subparagraphs, as
applicable.
(i) Transfer of Beneficial Interests in the Same Global
Note.
(A) Beneficial interests in any Restricted Global
Note may be transferred to Persons who take delivery thereof
in the form of a beneficial interest in the same Restricted
Global Note in accordance with the transfer restrictions set
forth in the Private Placement Legend; provided, however, that
prior to the expiration of the Restricted Period and receipt
by the Security Registrar of the certification required by
Rule 903(b)(3)(ii)(B) of Regulation S, transfers of beneficial
interests in the Regulation S Temporary Global Note may not be
made to a U.S. Person or for the account or benefit of a U.S.
Person (other than an Initial Purchaser).
(B) Beneficial interests in any Unrestricted Global
Note may be transferred to Persons who take delivery thereof
in the form of a beneficial interest in an Unrestricted Global
Note.
(C) No written orders or instructions shall be
required to be delivered to the Security Registrar to effect
the transfers described in this Section 3(c)(i).
(ii) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
3(c)(i) above, the transferor of such beneficial interest must deliver
to the Security Registrar either:
(A) (1) a written order from a Participant or an
Indirect Participant given to the Depository in accordance
with the Applicable Procedures directing the Depository to
credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited
with such increase; provided, however, that interests in a
Regulation S Temporary Global Note may not be exchanged for,
or transferred to a Person who will take delivery thereof in
the form of, interests in a Regulation S Permanent Global Note
or any other Unrestricted Global Note until (x) after the end
of the Restricted Period and (y) receipt by the Security
Registrar of the certification required by Rule
903(b)(3)(ii)(B) of Regulation S, or
(B) In the event that beneficial interests in Global
Notes shall be exchangeable for Certificated Notes as
described in Section 3(b)(ii) above, (1) a written order from
a Participant or an Indirect Participant given to the
Depository in accordance with the Applicable Procedures
directing the
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Depository to cause to be issued a Certificated Note in an
amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given by the Depository to the
Security Registrar containing information regarding the Person
in whose name such Certificated Note shall be registered to
effect the transfer or exchange referred to in subsection
(B)(1) above; provided that in no event shall Certificated
Notes be issued upon the transfer or exchange of beneficial
interests in the Regulation S Temporary Global Note prior to
(x) the expiration of the Restricted Period and (y) the
receipt by the Security Registrar of the certification
required pursuant to Rule 903(b)(3)(ii)(B) of Regulation S.
Upon consummation of an Exchange Offer by the Company in accordance
with Section 3(g) hereof, the requirements of this Section 3(c)(ii)
shall be deemed to have been satisfied upon receipt by the Security
Registrar of the instructions contained in the Letter of Transmittal
delivered by or on behalf of any owner of such beneficial interests in
the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global
Notes contained in this Second Supplemental Indenture and the Notes or
otherwise applicable under the Securities Act, the Trustee shall adjust
the principal amount of the relevant Global Notes pursuant to Section
2(b) hereof.
(iii) Transfer of Beneficial Interests in a Restricted
Global Note to another Restricted Global Note. A beneficial interest in
any Restricted Global Note may be transferred to a Person who takes
delivery thereof in the form of a beneficial interest in another
Restricted Global Note only if the transfer complies with the
requirements of Section 3(c)(ii) above and the Security Registrar
receives the following:
(A) if the transferee shall take delivery in the
form of a beneficial interest in the Rule 144A Global Note,
then the transferor must deliver a properly completed and
executed Transfer Certificate making the certification in item
(c) thereof and with the last paragraph of such Transfer
Certificate signed on behalf of the transferee; and
(B) if the transferee shall take delivery in the
form of a beneficial interest in the Regulation S Temporary
Global Note or the Regulation S Permanent Global Note, then
the transferor must deliver a properly completed and executed
Transfer Certificate making the certification in item (d)
thereof; provided that beneficial interests in the Regulation
S Temporary Global Note may not be transferred to any U.S.
Person or to or for the account or benefit of any U.S. Person
(other than the Initial Purchasers).
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may be
exchanged by any owner thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note only if the exchange or transfer complies with the requirements of
Section 3(c)(ii) above and:
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(A) such exchange or transfer is effected pursuant
to the Exchange Offer in accordance with the Registration
Rights Agreement and the owner of the beneficial interest, in
the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal
that (1) it is acquiring the Exchange Notes in the ordinary
course of its business, (2) it has no arrangement or
understanding with any Person to participate in the
distribution (within the meaning of the Securities Act) of the
Exchange Notes, and (3) it is not an affiliate (as defined in
Rule 405 under the Securities Act) of the Company or any of
the Guarantors;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement or pursuant to another effective registration
statement under the Securities Act; or
(C) the Security Registrar receives the following:
(1) if the owner of such beneficial interest
in a Restricted Global Note (other than the Regulation S
Temporary Global Note) proposes to exchange such
beneficial interest for a beneficial interest in an
Unrestricted Global Note, a properly completed and
executed Transfer Certificate making the certification in
item (b) thereof; provided that no such exchange shall
take place prior to the Resale Restriction Termination
Date; or
(2) if the owner of such beneficial interest
in a Regulation S Temporary Global Note proposes to
exchange such beneficial interest for, or to transfer such
beneficial interest to a Person who would take delivery
thereof in the form of, a beneficial interest in a
Regulation S Permanent Global Note or other Unrestricted
Global Note, the certification required by Rule
903(b)(3)(ii)(B) of Regulation S; provided that no such
transfer shall take place until after the end of the
Restricted Period; or
(3) if the owner of such beneficial interest
in a Restricted Global Note (other than the Regulation S
Temporary Global Note) proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of a beneficial interest in an
Unrestricted Global Note, a properly completed and
executed Transfer Certificate making the certifications in
item (e) thereof;
and, in the case of any transfer made pursuant to clause (3)
of this subparagraph (C) prior to the Resale Restriction
Termination Date, if the Security Registrar so requests, an
opinion of counsel in form reasonably acceptable to the
Security Registrar to the effect that such transfer is in
compliance with the Securities Act.
If any such transfer is effected pursuant to subsection (B) or (C)
above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon
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receipt of a Company Order, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant
to subsection (B) or (C) above.
(v) Transfer and Exchange of Beneficial Interests in an
Unrestricted Global Note for Beneficial Interests in Restricted Global
Note. Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who would take delivery
thereof in the form of, a beneficial interest in a Restricted Global
Note.
(d) Transfer or Exchange of Beneficial Interests for
Certificated Notes. The following provisions shall be applicable only if and to
the extent that the Company is required to issue Certificated Notes under the
circumstances contemplated by Sections 2(t) or 3(b)(ii) hereof.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Certificated Notes. If any owner of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Certificated Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Certificated Note, then, upon receipt by the Security
Registrar of the following documentation:
(A) if the owner of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Certificated Note, a properly
completed and executed Transfer Certificate from such Holder
making the certification in item (b) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities
Act, a properly completed and executed Transfer Certificate
from such Holder making the certification in item (c) thereof
and with the last paragraph of such Transfer Certificate
signed on behalf of the transferee; or
(C) if such beneficial interest is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904 under the Securities Act, a properly
completed and executed Transfer Certificate from such Holder
making the certification in item (d) thereof;
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly, and the Company shall
execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions a Restricted Certificated Note in the
appropriate principal amount. Any Restricted Certificated Note issued
in exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 3(d)(i) shall be registered in such name or
names and in such authorized denomination or denominations as the owner
of such beneficial interest shall instruct the Security Registrar
through instructions from the Depository and the Participant or
Indirect Participant. The Trustee shall deliver such Restricted
Certificated Notes to the Persons in whose names such Notes are so
registered. Any Restricted Certificated Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this
Section
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3(d)(i) shall bear the Private Placement Legend and shall be subject to
all restrictions on transfer contained therein.
(ii) Beneficial Interests in Regulation S Temporary
Global Note to Certificated Notes. Notwithstanding any other provisions
of this Section 3(d) to the contrary, a beneficial interest in the
Regulation S Temporary Global Note may not be exchanged for a
Certificated Note or transferred to a Person who takes delivery thereof
in the form of a Certificated Note prior to (x) the end of the
Restricted Period and (y) the receipt by the Security Registrar of the
certification required pursuant to Rule 903(b)(3)(ii)(B) under the
Securities Act, except in the case of a transfer pursuant to an
exemption from the registration requirements of the Securities Act
other than Rule 903 or Rule 904.
(iii) Beneficial Interests in Restricted Global Notes to
Unrestricted Certificated Notes. An owner of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Certificated Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Certificated Note only if:
(A) such exchange or transfer is effected pursuant
to the Exchange Offer in accordance with the Registration
Rights Agreement and the owner of such beneficial interest, in
the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal
that(1) it is acquiring the Exchange Notes in the ordinary
course of its business, (2) it has no arrangement or
understanding with any Person to participate in the
distribution (within the meaning of the Securities Act) of the
Exchange Notes, and (3) it is not an affiliate (as defined in
Rule 405 under the Securities Act) of the Company or any of
the Guarantors;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement or pursuant to another effective registration
statement under the Securities Act; or
(C) the Security Registrar receives the following:
(1) if the owner of such beneficial interest
in a Restricted Global Note (other than a Regulation S
Temporary Global Note) proposes to exchange such
beneficial interest for an Unrestricted Certificated Note,
a properly completed and executed Transfer Certificate
from such owner making the certification in item (b)
thereof; provided that no such exchange shall take place
prior to the Resale Restriction Termination Date; or
(2) if the owner of such beneficial interest
in a Restricted Global Note (other than a Regulation S
Temporary Global Note) proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of an Unrestricted Certificated Note,
a
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properly completed and executed Transfer Certificate from
such Holder making the certification in item (e) thereof;
and, in the case of any transfer made pursuant to this
subparagraph (C) prior to the Resale Restriction Termination
Date, if the Security Registrar so requests, an opinion of
counsel in form reasonably acceptable to the Security
Registrar to the effect that such transfer is in compliance
with the Securities Act.
(iv) Beneficial Interests in Unrestricted Global Notes
to Unrestricted Certificated Notes. If any owner of a beneficial
interest in an Unrestricted Global Note proposes to exchange such
beneficial interest for an Unrestricted Certificated Note or to
transfer such beneficial interest to a Person who takes delivery
thereof in the form of an Unrestricted Certificated Note, then, upon
satisfaction of the conditions set forth in Section 3(b)(ii) hereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced, and the Company shall execute and
the Trustee shall authenticate and deliver to the Person designated in
the instructions an Unrestricted Certificated Note in the appropriate
principal amount. Any Unrestricted Certificated Note issued in exchange
for a beneficial interest pursuant to this Section 3(d)(iv) shall be
registered in such name or names and in such authorized denomination or
denominations as the owner of such beneficial interest shall instruct
the Security Registrar through instructions from the Depository and the
Participant or Indirect Participant. The Trustee shall deliver such
Unrestricted Certificated Notes to the Persons in whose names such
Notes are so registered.
(e) Transfer and Exchange of Certificated Notes for Beneficial Interests. In the
event that Certificated Notes are issued, the Company may (but, except as
otherwise provided in Section 2(t) hereof, shall not be required to) permit
Certificated Notes to be exchanged for, or transferred to Persons who would take
delivery thereof in the form of, a beneficial interest in a Global Note, in
which case the following procedures shall be applicable to such exchanges and
transfers.
(i) Restricted Certificated Notes to Beneficial
Interests in Restricted Global Notes. If any Holder of a Restricted
Certificated Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note or to transfer such Restricted
Certificated Notes to a Person who takes delivery thereof in the form
of a beneficial interest in a Restricted Global Note, then, upon
receipt by the Security Registrar of the following documentation:
(A) if the Holder of such Restricted Certificated
Note proposes to exchange such Note for a beneficial interest
in a Restricted Global Note, a properly completed and executed
Transfer Certificate from such Holder making the
certifications in item (b) thereof, and an additional
certificate from such Holder to the effect that (x) if such
Restricted Global Note is a Rule 144A Global Note, such Holder
is a QIB who acquired such Restricted Certificated Note in
compliance with Rule 144A or (y) if such Restricted Global
Note is a Regulation S Global Note, such Holder is not a U.S.
Person and is not holding such Restricted Certificated Note
for the account or benefit of a U.S. Person and that it
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acquired such Restricted Certificated Note in an "offshore
transaction" in compliance with Regulation S;
(B) if such Restricted Certificated Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a properly completed and executed Transfer
Certificate making the certification in item (c) thereof and
with the last paragraph of such Transfer Certificate signed on
behalf of the transferee; or
(C) if such Restricted Certificated Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act,
a properly completed and executed Transfer Certificate making
the certification in item (d) thereof
Upon satisfaction of the applicable conditions set forth in this
subparagraph (i) the Trustee shall cancel the applicable Restricted
Certificated Note and increase or cause to be increased the aggregate
principal amount of the applicable Restricted Global Note.
(ii) Restricted Certificated Notes to Beneficial
Interests in Unrestricted Global Notes. A Holder of a Restricted
Certificated Note may exchange such Note for a beneficial interest in
an Unrestricted Global Note or transfer such Restricted Certificated
Note to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant
to the Exchange Offer in accordance with the Registration
Rights Agreement and the Holder, in the case of an exchange,
or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that (1) it is acquiring the
Exchange Notes in the ordinary course of its business, (2) it
has no arrangement or understanding with any Person to
participate in the distribution (within the meaning of the
Securities Act) of the Exchange Notes, and (3) it is not an
affiliate (as defined in Rule 405 under the Securities Act) of
the Company or any of the Guarantors;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement or pursuant to another effective registration
statement under the Securities Act; or
(C) the Registrar receives the following:
(1) if the Holder of such Certificated Notes
proposes to exchange such Notes for a beneficial interest
in the Unrestricted Global Note, a properly completed and
executed Transfer Certificate making the certification in
item (b) thereof; provided that no such exchange shall
take place prior to the Resale Restriction Termination
Date; or
(2) if the Holder of such Certificated Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form
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of a beneficial interest in the Unrestricted Global Note,
a properly completed and executed Transfer Certificate
from such Holder making the certifications in item (e)
thereof;
and, in the case of any transfer made pursuant to this
subparagraph (C) prior to the Resale Restriction Termination
Date, if the Security Registrar so requests an opinion of
counsel in form reasonably acceptable to the Security
Registrar to the effect that such transfer is in compliance
with the Securities Act,
Upon satisfaction of the applicable conditions set forth in this
subparagraph (ii), the Trustee shall cancel the applicable Certificated
Notes and increase or cause to be increased the aggregate principal
amount of the applicable Unrestricted Global Note.
(iii) Unrestricted Certificated Notes to Beneficial
Interests in Unrestricted Global Notes. A Holder of an Unrestricted
Certificated Note may exchange such Note for a beneficial interest in
an Unrestricted Global Note or transfer such Certificated Note to a
Person who takes delivery thereof in the form of a beneficial interest
in an Unrestricted Global Note at any time. Upon receipt of a request
for such an exchange or transfer, the Trustee shall cancel the
applicable Unrestricted Certificated Note and increase or cause to be
increased the aggregate principal amount of the applicable Unrestricted
Global Notes.
If any such exchange or transfer from a Certificated Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B),
(ii)(C) or (iii) above at a time when the applicable Unrestricted
Global Note has not yet been issued, the Company shall issue and, upon
receipt of a Company Order, the Trustee shall authenticate one or more
applicable Unrestricted Global Notes in an aggregate principal amount
equal to the principal amount of Certificated Notes so transferred.
(f) Transfer and Exchange of Certificated Notes for Certificated Notes. Upon
request by a Holder of Certificated Notes and such Holder's compliance with the
provisions of this Section 3(f), the Security Registrar shall register the
transfer or exchange of Certificated Notes. Prior to such registration of
transfer or exchange, the requesting Holder shall present or surrender to the
Security Registrar the Certificated Notes duly endorsed or accompanied by a
written instruction of transfer in form satisfactory to the Security Registrar
duly executed by such Holder or by its attorney, duly authorized in writing. In
addition, the requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the following
provisions of this Section 3(f).
(i) Restricted Certificated Notes to Restricted
Certificated Notes. Any Restricted Certificated Note may be transferred
to and registered in the name of Persons who take delivery thereof in
the form of a Restricted Certificated Note if the Security Registrar
receives the following:
(A) if the transfer is being made to a QIB in
accordance with Rule 144A under the Securities Act, then the
transferor must deliver a properly completed and executed
Transfer Certificate making the certification in item (c)
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thereof and with the last paragraph of such Transfer
Certificate signed on behalf of the transferee; and
(B) if the transfer is being made in accordance with
Rule 903 or Rule 904, then the transferor must deliver a
properly completed and executed Transfer Certificate making
the certification in item (d) thereof.
(ii) Restricted Certificated Notes to Unrestricted
Certificated Notes. Any Restricted Certificated Note may be exchanged
by the Holder thereof for an Unrestricted Certificated Note or
transferred to a Person or Persons who take delivery thereof in the
form of an Unrestricted Certificated Note if:
(A) such exchange or transfer is effected pursuant
to the Exchange Offer in accordance with the Registration
Rights Agreement and the Holder, in the case of an exchange,
or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that (1) it is acquiring the
Exchange Notes in the ordinary course of its business, (2) it
has no arrangement or understanding with any Person to
participate in the distribution (within the meaning of the
Securities Act) of the Exchange Notes, and (3) it is not an
affiliate (as defined in Rule 405 under the Securities Act) of
the Company or any of the Guarantors;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement or pursuant to another effective
registration statement under the Securities Act; or
(C) the Security Registrar receives the following:
(1) if the Holder of such Restricted
Certificated Notes proposes to exchange such Notes for an
Unrestricted Certificated Note, a properly completed and
executed Transfer Certificate making the certification in
item (b) thereof; provided that no such exchange shall
take place prior to the Resale Restriction Termination
Date; or
(2) if the Holder of such Restricted
Certificated Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of an
Unrestricted Certificated Note, a properly completed and
executed Transfer Certificate making the certifications in
item (e) thereof;
and, in the case of any transfer made pursuant to this
subparagraph (C) prior to the Resale Restriction Termination
Date, if the Security Registrar so requests, an opinion of
counsel in form reasonably acceptable to the Company to the
effect that such transfer is in compliance with the Securities
Act.
(iii) Unrestricted Certificated Notes to Unrestricted
Certificated Notes. A Holder of Unrestricted Certificated Notes may
transfer such Notes to a Person who takes delivery thereof in the form
of an Unrestricted Certificated Note. Upon receipt of a
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request to register such a transfer, the Security Registrar shall
register the Unrestricted Certificated Notes pursuant to the
instructions from the Holder thereof.
(g) Exchange Offer. Upon the occurrence of the Exchange Offer
in accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of a Company Order, the Trustee shall authenticate (i) one or
more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal that (1) they are acquiring the Exchange Notes in the ordinary
course of its business, (2) they have no arrangement or understanding with any
Person to participate in the distribution (within the meaning of the Securities
Act) of the Exchange Notes, and (3) they are not affiliates (as defined in Rule
405 under the Securities Act) of the Company or any of the Guarantors and
accepted for exchange in the Exchange Offer and (ii) Unrestricted Certificated
Notes in an aggregate principal amount equal to the principal amount of the
Restricted Certificated Notes tendered for acceptance by any Person that
certifies in the applicable Letter of Transmittal that (1) it is acquiring the
Exchange Notes in the ordinary course of its business, (2) it has no arrangement
or understanding with any Person to participate in the distribution (within the
meaning of the Securities Act) of the Exchange Notes, and (3) it is not an
affiliate (as defined in Rule 405 under the Securities Act) of the Company or
any of the Guarantors and accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Unrestricted Global Notes, the Trustee
shall cause the aggregate principal amount of the applicable Restricted Global
Notes to be reduced accordingly, and the Company shall execute and the Trustee
shall authenticate and deliver to the Persons designated by the Holders of
Restricted Certificated Notes so accepted Unrestricted Certificated Notes in a
like principal amount.
(h) Other Transfers. In the case of any transfer or exchange
of a Restricted Note the procedures and requirements for which are not addressed
in this Section 3, such transfer or exchange will be subject to such procedures
and requirements as may be reasonably prescribed by the Company from time to
time and which shall be consistent with the procedures and requirements set
forth in this Section 3. In addition, notwithstanding the restrictions set forth
in the Private Placement Legend, the Company may from time to time permit the
transfer of Notes and beneficial interests in Global Notes to be made pursuant
to exemptions from the registration requirements of the Securities Act in
addition to the exemption provided by Rule 144, but subject to the Company
having obtained such certifications, legal opinions or other documents as it may
require to confirm that such transfer is exempt from such registration
requirements.
(i) Exceptions to Transfer Restrictions. The restrictions on
transfer and other provisions set forth in Section 3(c) and in the Private
Placement Legend shall not be applicable with respect to any Note following the
Resale Restriction Termination Date for such Note, and (except for Section
3(b)(v)) also shall not be applicable in the case of the exchange of Notes for
Private Exchange Notes pursuant to the Registration Rights Agreement so long as
such Private Exchange Notes are held or beneficially owned by Initial
Purchasers.
(j) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note shall be deemed to have
acknowledged the restrictions on transfer of such Note set forth in this Second
Supplemental Indenture and in such legend and to
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have agreed that it will transfer such Note only as provided in this Second
Supplemental Indenture. The Security Registrar shall retain, in accordance with
its customary procedures, copies of all letters, notices and other written
communications received pursuant to this Section 3. The Company shall have the
right to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Security Registrar.
SECTION 4. Other Provisions.
(a) Amendment to Section 101 of the Original Indenture.
(i) Section 101 of the Original Indenture is hereby
amended, solely insofar as relates to the Notes, by adding the
following definition in appropriate alphabetical sequence:
"`Second Supplemental Indenture' means the
Second Supplemental Indenture dated as of June 30,
2004 among KB Home, the Guarantors and the Trustee."
(ii) Section 101 of the Indenture is hereby amended,
solely insofar as relates to the Notes, by deleting the definition of
"Subject Notes" appearing in such Section 101 and replacing such
definition with the following:
"`Subject Notes' means, with respect to any
series of Securities issued under this Indenture, (1)
Securities of any other series issued under this
Indenture and (2) the Company's 7-3/4% Senior Notes
due October 15, 2004, 8-5/8% Senior Subordinated
Notes due 2008, 7-3/4% Senior Subordinated Notes due
2010 and 9-1/2% Senior Subordinated Notes due 2011,
or any of the foregoing."
(b) Amendment to Section 309 of the Original Indenture.
Section 309 of the Original Indenture is hereby amended, solely insofar as it
relates to the Notes, by adding the following sentence to the end of such
Section:
"Anything in this Indenture to the contrary
notwithstanding, the Company will cause any Notes (as
defined in the Second Supplemental Indenture) which
are redeemed, purchased or otherwise acquired by the
Company, any of the Guarantors or any of the
Company's Subsidiaries, and will use its best efforts
to cause any Notes which are redeemed, purchased or
otherwise acquired by any of the Company's other
"affiliates" (as defined in Rule 144, or any
successor thereto, under the Securities Act), to be
delivered to the Trustee for cancellation and the
Company will not resell or otherwise transfer, will
cause the Guarantors and its Subsidiaries not to
resell or otherwise transfer, and will use its best
efforts to cause its other "affiliates" not to resell
or otherwise transfer, any such Notes nor will the
Company issue any new Notes to replace any such
Notes, and all Notes so delivered to the Trustee
shall be cancelled promptly by the Trustee."
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(c) Amendment to Article Ten of the Original Indenture.
Article Ten of the Indenture is hereby amended, solely insofar as relates to the
Notes, by adding the following Section 1013 to appear in the appropriate
numerical order:
"Section 1013. Delivery of Rule 144A Information.
"If and so long as Company or any of the
Guarantors is not subject to the reporting
requirements of Section 13 or 15(d) of the Exchange
Act (other than, in the case of a Guarantor, because
such Guarantor is exempt from such reporting
requirements), the Company will prepare and will
furnish to any Holder of any Notes (as defined in the
Second Supplemental Indenture), any beneficial owner
of an interest in a Global Note (as defined in the
Second Supplemental Indenture), and any prospective
purchaser or other prospective transferee of any
Notes designated by such Holder or beneficial owner,
promptly upon request and at the expense of Company,
the financial statements and other information
specified in Rule 144A(d)(4) (or any successor
provision thereof) under the Securities Act, in each
case to the extent necessary to permit the resale or
other transfer of Notes and the related Guarantees by
such Holder or beneficial owner to be made in
compliance with Rule 144A (or any successor provision
thereof) under the Securities Act."
(d) Amendment of Section 1601 of the Original Indenture.
Section 1601 of the Original Indenture is hereby amended, solely insofar as
relates to the Notes, by deleting the first sentence of the first paragraph of
such Section 1601 and inserting in its place the following sentence:
"Subject to the provisions of this Article
Sixteen, in recognition of the benefits that the
issuance of the Securities will confer upon the
Company and the Guarantors and for other good and
valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each Guarantor
hereby absolutely, fully, unconditionally and
irrevocably guarantees, jointly and severally, to
each Holder of any Securities and to each Holder of
any Coupons appertaining thereto and to the Trustee
on behalf of each such Holder prompt payment when
due, whether at Stated Maturity, by declaration of
acceleration, upon redemption at the option of the
Company, upon repurchase or repayment at the option
of the Holder or otherwise, and at all times
thereafter, of the principal of and premium, if any,
and interest (including, without limitation,
Additional Interest), if any, on, and all Additional
Amounts and other amounts, if any, payable with
respect to, the Securities (whether Outstanding on
the date of this Indenture or issued on or after such
date) and any Coupons appertaining thereto
(including, without limitation, to the maximum extent
permitted by law, interest on any overdue principal,
premium, if any, interest (including, without
limitation, Additional Interest), if any, or
Additional Amounts or other amounts, if any, in
respect of the Securities) and the due and punctual
payment of any sinking
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fund or analogous payments provided for pursuant to
the terms of any of the Securities or this Indenture,
and of any and all other existing and future
indebtedness and liabilities of every kind, nature
and character, direct or indirect, absolute or
contingent, liquidated or unliquidated, voluntary or
involuntary, of the Company to the Holders of the
Securities or any Coupons appertaining thereto
arising under this Indenture or the Securities or
such Coupons (collectively, the "Guaranteed
Obligations"), all in accordance with the respective
terms of the Securities and any Coupons appertaining
thereto and this Indenture."
SECTION 5. Governing Law; Second Supplemental Indenture. This Second
Supplemental Indenture shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made or instruments
entered into and, in each case, performed in said State. The terms and
conditions of this Second Supplemental Indenture shall be, and be deemed to be,
part of the terms and conditions of the Indenture for any and all purposes.
Other than as amended and supplemented by this Second Supplemental Indenture,
the Original Indenture, as amended and supplemented by the First Supplemental
Indenture, is in all respects ratified and confirmed.
SECTION 6. Acceptance by Trustee. Subject to Section 9 hereof, the
Trustee hereby accepts this Second Supplemental Indenture and agrees to perform
the same upon the terms and conditions set forth in the Original Indenture, as
amended and supplemented by the First Supplemental Indenture.
SECTION 7. Counterparts. This Second Supplemental Indenture may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute but one
instrument.
SECTION 8. Headings. The headings of this Second Supplemental Indenture
are for reference only and shall not limit or otherwise affect the meaning
hereof.
SECTION 9. Trustee Not Responsible for Recitals. The recitals herein
contained are made by the Company and the Guarantors and not by the Trustee, and
the Trustee assumes no responsibility for the correctness thereof. The Trustee
shall not be responsible in any manner whatsoever for or in respect of the
validity or sufficiency of this Second Supplemental Indenture, except as to its
validity with respect to the Trustee.
SECTION 10. Separability. In case any one or more of the provisions
contained in this Second Supplemental Indenture shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions hereof shall not, to the fullest extent permitted by law, in any way
be affected or impaired thereby.
[SIGNATURE PAGE FOLLOWS]
-23-
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed, all as of the day and year first above written.
COMPANY: KB HOME
By: /s/ KELLY M. ALLRED
----------------------------------
Kelly M. Allred
Vice President, Treasury and
Risk Management
[SEAL]
Attest:
/s/ WILLIAM R. HOLLINGER
- -----------------------------
William R. Hollinger
Senior Vice President and Controller
GUARANTORS: KB HOME PHOENIX INC., an
Arizona corporation
By: /s/ KELLY M. ALLRED
----------------------------------
Kelly M. Allred
Vice President and Treasurer
[SEAL]
Attest:
/s/ WILLIAM R. HOLLINGER
- -----------------------------
William R. Hollinger
Vice President, CFO and Assistant Secretary
-24-
KB HOME COASTAL INC., a
California corporation
By: /s/ KELLY M. ALLRED
----------------------------------
Kelly M. Allred
Vice President, Treasury and
Risk Management
[SEAL]
Attest:
/s/ WILLIAM R. HOLLINGER
- -----------------------------
William R. Hollinger
Senior Vice President and Controller
KB HOME NORTH BAY INC., a
California corporation
By: /s/ KELLY M. ALLRED
----------------------------------
Kelly M. Allred
Vice President and Treasurer
[SEAL]
Attest:
/s/ WILLIAM R. HOLLINGER
- -----------------------------
William R. Hollinger
Vice President, CFO and Assistant Secretary
-25-
KB HOME SOUTH BAY INC., a
California corporation
By: /s/ KELLY M. ALLRED
----------------------------------
Kelly M. Allred
Vice President and Treasurer
[SEAL]
Attest:
/s/ WILLIAM R. HOLLINGER
- -----------------------------
William R. Hollinger
Vice President and Assistant Secretary
KB HOME GREATER LOS ANGELES INC., a
California corporation
By: /s/ KELLY M. ALLRED
----------------------------------
Kelly M. Allred
Vice President and Treasurer
[SEAL]
Attest:
/s/ WILLIAM R. HOLLINGER
- -----------------------------
William R. Hollinger
Vice President, CFO and Assistant Secretary
-26-
KB HOME COLORADO INC., a
Colorado corporation
By: /s/ KELLY M. ALLRED
----------------------------------
Kelly M. Allred
Vice President and Treasurer
[SEAL]
Attest:
/s/ WILLIAM R. HOLLINGER
- -----------------------------
William R. Hollinger
Vice President, CFO and Assistant Secretary
KB HOME NEVADA INC., a
Nevada corporation
By: /s/ KELLY M. ALLRED
----------------------------------
Kelly M. Allred
Vice President and Treasurer
[SEAL]
Attest:
/s/ WILLIAM R. HOLLINGER
- -----------------------------
William R. Hollinger
Vice President, CFO and Assistant Secretary
-27-
KB HOME LONE STAR LP, a Texas
limited partnership
By: KBSA, Inc., a Texas corporation,
Its general partner
By: /s/ KELLY M. ALLRED
----------------------------------
Kelly M. Allred
Vice President and Treasurer
[SEAL]
Attest:
/s/ WILLIAM R. HOLLINGER
- -----------------------------
William R. Hollinger
Vice President, CFO and Assistant Secretary
-28-
TRUSTEE: SUNTRUST BANK,
as Trustee
By: /s/ MURIEL SHAW
------------------------------
Name: Muriel Shaw
Title: Trust Officer
[SEAL]
Attest:
/s/ JACK ELLERIN
- -----------------------------
Name: Jack Ellerin
Title: Assistant Vice President
-29-
Exhibit A
[FORM OF NOTE]
[LEGEND FOR INCLUSION IN GLOBAL NOTE -- THIS NOTE IS A GLOBAL SECURITY REFERRED
TO IN THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE THEREOF. THIS NOTE IS EXCHANGEABLE FOR NOTES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE CERTIFICATED FORM, THIS
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF
THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.]
[LEGEND FOR INCLUSION IN GLOBAL NOTE -- UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[THE FOLLOWING LEGEND TO BE INCLUDED ON ALL NOTES (OTHER THAN EXCHANGE NOTES AND
REGULATION S PERMANENT GLOBAL NOTES) UNTIL, IN THE CASE OF ANY NOTE, THE HOLDING
PERIOD APPLICABLE TO SUCH NOTE UNDER RULE 144(K) OF THE SECURITIES ACT EXPIRES,
SUCH NOTE IS SOLD OR TRANSFERRED PURSUANT TO A REGISTRATION STATEMENT THAT HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR SUCH LEGEND HAS BEEN REMOVED
IN ACCORDANCE WITH OTHER PROVISIONS OF THE INDENTURE -- THIS NOTE (OR ITS
PREDECESSOR) AND THE GUARANTEES OF THIS NOTE WERE ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH TRANSFEREE OF THIS NOTE IS HEREBY NOTIFIED THAT THE TRANSFEROR
OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A OR REGULATION S THEREUNDER. THE HOLDER
OF THIS NOTE REPRESENTS THAT IT IS EITHER (X) A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OR (Y) NOT A U.S. PERSON AND IS
ACQUIRING THIS NOTE IN RELIANCE UPON AND IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT, AND THE HOLDER AGREES FOR THE BENEFIT OF THE COMPANY (AS
SUCH TERM IS DEFINED IN THIS NOTE) THAT, PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER RULE 144(K) (OR ANY SUCCESSOR
PROVISION) OF THE SECURITIES ACT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED, ONLY (I) TO A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
903 OR 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, AND IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE
A-1
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY TRANSFEREE OF
THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.]
[Principal Amount: $ o [FOR INCLUSION IN GLOBAL NOTES -- (or
No. [RA - o] such other principal amount as is set forth on Schedule A hereto)]
[RST - o]
[RSP - o]
[R - o]
CUSIP No. [Rule 144A: 48666K AJ 8]
[Regulation S: U2446H AA 5]
[Exchange Note: 48666K AK 5]
ISIN No. [Rule 144A: US48666KAJ88]
[Regulation S: USU2446HAA50]
[Exchange Note: US48666KAK51]
Common
Code: [Regulation S: o]
KB Home
6-3/8% Senior Notes due 2011
KB Home, a Delaware corporation (hereinafter called the "Company",
which term includes any successor corporation under the Indenture referred to
below), for value received, hereby promises to pay to _______________________,
or registered assigns, the principal sum of __________________ DOLLARS
($_______) [FOR INCLUSION IN GLOBAL NOTES -- or such other principal amount as
is set forth on Schedule A hereto] on August 15, 2011, and to pay interest
thereon from June 30, 2004, or from the most recent date to which interest has
been paid or duly provided for, semiannually in arrears on February 15 and
August 15 of each year (each, an "Interest Payment Date"), commencing February
15, 2005, and at Maturity, at the rate of 6-3/8% per annum, until the principal
hereof is paid or duly made available for payment. Interest on this Note shall
be calculated on the basis of a 360-day year consisting of twelve 30-day months.
The interest so payable and punctually paid or duly provided for on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Note (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the February 1 or August 1 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
shall forthwith cease to be payable to the Person who was the Holder hereof on
the relevant Regular Record Date by virtue of having been such Holder, and may
be paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to the Holder of this Note not less than 10 days prior to
such Special Record Date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in such Indenture.
Payment of the principal of and premium, if any, and interest on this
Note will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that, at the
option of the Company, interest may be paid by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register or by transfer to an account maintained by the payee with a bank
located in the United States; provided, further, that if this Note is a Global
Note registered in the name of a Depository or its nominee, then, anything in
the Indenture or the Notes to the contrary notwithstanding, payments of the
principal of and premium, if any, and interest on this Note shall be made by
wire transfer.
This Note is one of a duly authorized issue of Securities of the
Company (herein called the "Notes") issued and to be issued in one or more
series under an Indenture dated as of January 28, 2004 (the "Original
Indenture"), as amended and supplemented by the First Supplemental Indenture
dated as of January 28, 2004 (the "First Supplemental Indenture") and by the
Second Supplemental Indenture dated as of June 30, 2004 (the "Second
Supplemental Indenture"; the Original Indenture, as amended and supplemented by
the First Supplemental Indenture
and the Second Supplemental Indenture and all other indentures supplemental
thereto, is herein called the "Indenture"), each among the Company, the
Guarantors and SunTrust Bank, as trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Guarantors, the Trustee and the Holders of the Notes, and
the terms upon which the Notes are, and are to be, authenticated and delivered.
This Note is one of the series designated on the face hereof, initially limited
(subject to exceptions provided in the Indenture and subject to the right of the
Company to reopen such series for issuance of additional Securities of such
series upon the terms and subject to the conditions specified in the Indenture)
in aggregate principal amount to $350,000,000.
Payments of principal of and premium, if any, and interest (including,
without limitation, Additional Interest) on the Notes are fully, irrevocably and
unconditionally guaranteed, jointly and severally, by the Guarantors on the
terms and subject to the limitations set forth in the Indenture. A Guarantor may
be released from its obligations under the Indenture and those obligations may
be reinstated, all on the terms and subject to the conditions set forth in the
Indenture.
The Notes may be redeemed, in whole or from time to time in part, at
the Company's option on any date (each, a "Redemption Date") at a redemption
price equal to the greater of: (a) 100% of the principal amount of the Notes to
be redeemed, and (b) the sum of the present values of the remaining scheduled
payments of principal and interest on the Notes to be redeemed (exclusive of
interest accrued to the applicable Redemption Date) discounted to such
Redemption Date on a semiannual basis, assuming a 360-day year consisting of
twelve 30-day months, at the Treasury Rate plus 30 basis points, plus, in the
case of both clause (a) and (b) above, accrued and unpaid interest on the
principal amount of the Notes being redeemed to such Redemption Date.
Notwithstanding the foregoing, installments of interest whose Stated Maturity is
on or prior to a Redemption Date will be payable to the Holders of the Notes (or
one or more Predecessor Securities) registered as such at the close of business
on the relevant Regular Record Dates according to their terms and the provisions
of the Indenture.
As used in this Note, the following terms have the meanings set forth
below:
"Treasury Rate" means, with respect to any Redemption Date for the
Notes: (a) the yield, under the heading that represents the average for the
immediately preceding week, appearing in the most recently published statistical
release designated "H.15(519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the Final Maturity Date for the Notes,
yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue shall be determined and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis, rounding
to the nearest month); or (b) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such Redemption Date. The Treasury
Rate shall be calculated on the third Business Day preceding the applicable
Redemption Date. As used in the immediately preceding sentence and in the
definition of "Reference Treasury Dealer Quotations" below, the term "Business
Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in The City of New York are authorized or
obligated by law, regulation or executive order to close.
"Comparable Treasury Issue" means, with respect to any Redemption Date
for the Notes, the United States Treasury security selected by the Independent
Investment Banker as having a maturity comparable to the remaining term of the
Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of the Notes to be
redeemed.
"Independent Investment Banker" means, with respect to any Redemption
Date for the Notes, Banc of America Securities LLC and its successors or, if
such firm or any successor to such firm, as the case may be, is
unwilling or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing appointed by the Trustee
after consultation with the Company.
"Comparable Treasury Price" means, with respect to any Redemption Date
for the Notes: (a) the average of four Reference Treasury Dealer Quotations for
such Redemption Date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (b) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer" means Banc of America Securities LLC and
its successors (provided, however, that if such firm or any such successor, as
the case may be, shall cease to be a primary U.S. Government securities dealer
in New York City (a "Primary Treasury Dealer"), the Trustee, after consultation
with the Company, will substitute therefor another Primary Treasury Dealer) and
three other Primary Treasury Dealers selected by the Trustee after consultation
with the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date for the Notes, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Redemption Date.
"Final Maturity Date" means August 15, 2011.
Notice of any redemption by the Company will be mailed at least 30 days
but not more than 60 days before any Redemption Date to each Holder of Notes to
be redeemed. If less than all the Notes are to be redeemed at the option of the
Company, the Trustee will select, in such manner as it deems fair and
appropriate, the Notes (or portions thereof) to be redeemed. Unless the Company
defaults in payment of the Redemption Price (including, without limitation,
interest, if any, accrued to the applicable Redemption Date), on and after the
applicable Redemption Date interest will cease to accrue on the Notes or
portions thereof called for redemption on such Redemption Date.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of and accrued and unpaid interest on the Notes may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantors and the rights of the Holders of the Securities of
each series issued under the Indenture at any time by the Company, the
Guarantors and the Trustee with the consent of the Holders of not less than a
majority in aggregate principal amount of the Securities at the time Outstanding
of each series affected thereby. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities of any series at the time Outstanding, on behalf of the Holders
of all Securities of such series, to waive compliance by the Company and the
Guarantors with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Notes issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Note, at the time, place and rate, and in the coin or currency,
herein and in the Indenture prescribed.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Security
Register upon surrender of this Note for registration of transfer at the Office
or Agency of the Company maintained for the purpose in any place where the
principal of and interest on this Note are payable, duly endorsed, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder hereof or by his
attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Notes are issuable only in fully registered form without coupons in
the denominations of $1,000 and integral multiples of $1,000 in excess thereof.
As provided in the Indenture and subject to certain limitations set forth
therein, the Notes are exchangeable for a like aggregate principal amount of
Notes of authorized denominations as requested by the Holders surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith, other than
in certain cases provided in the Indenture.
Prior to due presentment of this Note for registration of transfer, the
Company, the Guarantors, the Trustee and any agent of the Company, any Guarantor
or the Trustee may treat the Person in whose name this Note is registered as the
owner hereof for all purposes, whether or not this Note shall be overdue, and
none of the Company, the Guarantors or the Trustee nor any such agent shall be
affected by notice to the contrary.
[THIS PARAGRAPH TO BE OMITTED FROM EXCHANGE NOTES -- In addition to
rights provided to the Holders of the Notes under the Indenture, Holders of
Notes shall have the rights set forth in the Registration Rights Agreement dated
as of June 30, 2004 among the Company, the Guarantors and Banc of America
Securities LLC and the other initial purchasers party thereto (as the same may
be amended or supplemented from time to time in accordance with its terms, the
"Registration Rights Agreement"). Pursuant to the Registration Rights Agreement,
the Holders of the Notes will, subject to certain exceptions and on the terms
and subject to the conditions specified in the Registration Rights Agreement,
have the right to exchange their Notes for a like principal amount of Exchange
Notes (as defined in the Second Supplemental Indenture) issued under the
Indenture, which Exchange Notes will have been registered under the Securities
Act. The Holders of the Notes shall be entitled to receive certain Additional
Interest (as defined in the Second Supplemental Indenture) on the Notes in the
event such exchange offer is not consummated or upon certain other conditions,
on the terms and subject to the conditions and exceptions set forth in the
Registration Rights Agreement.]
The Indenture contains provisions whereby (i) the Company and the
Guarantors may be discharged from their obligations with respect to the Notes
(subject to certain exceptions) or (ii) the Company may be released from its
obligations under specified covenants and agreements in the Indenture, in each
case if the Company irrevocably deposits with the Trustee money and/or
Government Obligations sufficient to pay and discharge the entire indebtedness
on all Notes, and satisfies certain other conditions, all as more fully provided
in the Indenture. In addition, the Indenture shall cease to be of further effect
(subject to certain exceptions) with respect to the Notes when (1) either (A)
all Notes previously authenticated and delivered have been delivered (subject to
certain exceptions) to the Trustee for cancellation, or (B) all Notes (i) have
become due and payable or (ii) will become due and payable at their Stated
Maturity within one year or (iii) are to be called for redemption within one
year and, in the case of (i), (ii) or (iii) above, the Company has irrevocably
deposited with the Trustee money in an amount sufficient to pay and discharge
the entire indebtedness on all such Notes not theretofore delivered to the
Trustee for cancellation in respect of principal, premium, if any, and interest
to the date of such deposit (if such Notes have become due and payable) or to
the Stated Maturity or Redemption Date thereof, as the case may be, and (2) the
Company satisfies certain other conditions, all as more fully provided in the
Indenture.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
All terms used in this Note which are defined in the Indenture and not
defined herein shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee under the Indenture by the manual signature of one of
its authorized signatories, this Note shall not be entitled to any benefits
under the Indenture (including, without limitation, the Guarantees) or be valid
or obligatory for any purpose.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed and its corporate seal to be duly attested by the manual or facsimile
signatures of its duly authorized officers and has caused its corporate seal (or
a facsimile thereof) to be affixed or imprinted hereon.
Dated:
[Seal] KB HOME
Attest: By:
---------------------------- -------------------------------
Name: Name:
Title: Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
SUNTRUST BANK, as Trustee
By:
--------------------------------
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM--as tenants in common
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT-- ___________Custodian_____________
(Cust) (Minor)
under the Uniform Gift to Minors Act
--------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
---------------------------------
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------
- -----------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
- --------------------------------------------------------------------------------
the within security and all rights thereunder, hereby irrevocably constituting
and appointing
_____________________________________________________________________Attorney to
transfer said security on the books of the Company with full power of
substitution in the premises.
Dated: Signed:
-------------------------------- ---------------------------------
Notice: The signature to this assignment must correspond with the name
as it appears upon the face of the within security in every
particular, without alteration or enlargement or any change
whatever.
A-8
[FOR INCLUSION IN GLOBAL NOTES]
SCHEDULE A
The initial principal amount of this Global Note is ________ Dollars
($_______). The following increases or decreases in the principal amount of this
Global Note have been made:
Principal amount of
Amount of increase Amount of decrease in this Global Note Signature of
in principal amount principal amount of following such authorized signatory
Date made of this Global Note this Global Note decrease or increase of Trustee
- --------- ------------------- ---------------- -------------------- ----------
[FOR INCLUSION IN NOTES BEARING THE PRIVATE PLACEMENT LEGEND]
TRANSFER CERTIFICATE
Re: KB HOME
6-3/8% Senior Notes due 2011 (the "Notes")
Capitalized terms used but not defined in this Certificate shall have the
meanings given to such terms in the Indenture (as defined in the Note to which
this Certificate is attached).
The undersigned (the "Transferor") has requested a transfer of this Note or a
portion hereof (in either such case, the "Specified Notes"). In connection with
such request, the Transferor does hereby certify that such transfer is being
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act") (as indicated by the applicable box
checked below), or the transfer does not require registration under the
Securities Act because (as indicated by the applicable box checked below):
(a)[ ] The Specified Notes are being transferred pursuant to
an effective registration statement under the Securities Act.
(b)[ ] The Specified Notes are being acquired for the Transferor's
own account, without transfer.
(c)[ ] The Specified Notes are being transferred in compliance
with Rule 144A ("Rule 144A") under the Securities Act to a
Person the Transferor reasonably believes is a "qualified
institutional buyer" (as defined in Rule 144A) (a "QIB") that
is purchasing the Specified Notes for its own account or for
the account of another QIB, in each case to whom notice has
been given that the transfer is being made in reliance on Rule
144A.
(d)[ ] The Specified Notes are being transferred in compliance
with Regulation S ("Regulation S") under the Securities Act in
an "offshore transaction" (as defined in Regulation S) outside
the "United States" (as defined in Regulation S) to a Person
the Transferor reasonably believes is not a "U.S. person" (as
defined in Regulation S), and in conjunction therewith the
Transferor hereby certifies:
(1) that the offer of the Specified Notes was not made to
a person in the United States;
(2) at the time the buy order was originated, the
transferee was outside the United States or the
Transferor and any person acting on its behalf
reasonably believed that the transferee was outside
the United States or the transaction was executed in,
on or through the facilities of a "designated
offshore securities market" (as defined in Regulation
S) and neither the Transferor nor any person acting
on its behalf knows that the transaction was
prearranged with a buyer in the United States;
(3) no "directed selling efforts" (as defined in
Regulation S) have been made by the Transferor or any
person acting on its behalf in the United States in
contravention of the requirements of Rule 903 or Rule
904 of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the U.S.
Securities Act of 1933; and
(5) if the transfer is being made prior to the
termination of the "Restricted Period" applicable to
the Specified Notes, the transfer is not being made
to a U.S. Person or for the account or benefit of a
U.S. Person (other than the Initial Purchasers).
(e)[ ] The Specified Notes are being transferred pursuant to
the exemption from the registration requirements of the
Securities Act provided by Rule 144 (or any successor thereto)
thereunder.
This Certificate and the statements contained herein are made for the benefit of
the Trustee and the Company.
____________________________________________
(Insert Name of Transferor)
By:
________________________________________
Date: _____________________
TO BE COMPLETED BY TRANSFEREE
IF (c) ABOVE IS CHECKED:
The undersigned transferee represents and warrants that (i) it is a QIB (as
defined above) and is aware that the Specified Notes (as defined above) are
being transferred in reliance on Rule 144A (as defined above), (ii) the
undersigned is acquiring the Specified Notes for its own account or for the
account of one or more other QIBs over which it exercises sole investment
discretion (in which latter case the undersigned has given notice to each such
account that the Specified Notes are being transferred in reliance on Rule 144A)
and (iii) this instrument has been executed on behalf of the undersigned
transferee by one of its executive officers. The undersigned transferee
acknowledges and agrees that the Specified Notes and the Guarantees thereof have
not been registered under the Securities Act (as defined above), and may not be
transferred except in accordance with the resale and other transfer restrictions
set forth in the legend on the face thereof and in the Indenture pursuant to
which the Notes were issued.
Dated: _________________________ __________________________________
(Insert Name of Transferee)
By:
_________________________________
Executive Officer