EXHIBIT 4.25
OFFICERS' CERTIFICATE AND GUARANTORS' OFFICERS' CERTIFICATES
PURSUANT TO SECTIONS 201 AND 301 OF THE INDENTURE
Dated: December 15, 2004
Kimberly N. King, Vice President, Associate General Counsel
and Corporate Secretary, and Kelly Masuda, the Vice President, Capital Markets
and Treasurer, of KB HOME, a Delaware corporation (the "Company"), and Kimberly
N. King, the Secretary, and Kelly M. Allred, the Vice President and Treasurer,
of KB HOME PHOENIX INC., an Arizona corporation, KB HOME COASTAL INC., a
California corporation, KB HOME NORTH BAY INC., a California corporation, KB
HOME SOUTH BAY INC., a California corporation, KB HOME GREATER LOS ANGELES INC.,
a California corporation, KB HOME COLORADO INC., a Colorado corporation, KB HOME
NEVADA INC., a Nevada corporation, and KBSA, INC., a Texas corporation (the
"General Partner") and general partner of KB HOME LONE STAR LP, a Texas limited
partnership (the "Partnership") (collectively and including, without limitation,
the Partnership but excluding the General Partner, the "Guarantors"), hereby
certify as follows:
The undersigned, having read the appropriate provisions of the
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 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, is hereinafter called the "Indenture"), each
among the Company, the Guarantors and SunTrust Bank, as trustee (the "Trustee"),
including Sections 103, 201, 301 and 303 thereof and the definitions in such
Indenture relating thereto, and certain other corporate and partnership
documents and records, and having made such examination and investigation as, in
the opinion of the undersigned, each considers necessary to enable the
undersigned to express an informed opinion as to whether or not the conditions
set forth in the Indenture relating to the establishment of the terms of the
Company's 5-7/8% Senior Notes due 2015 (the "Notes") and the form of certificate
evidencing the Notes have been complied with, and whether the conditions in the
Indenture relating to the authentication and delivery by the Trustee of the
Notes have been complied with, certify that (1) the terms of the Notes were
established by resolutions duly adopted by unanimous written consent of the 2004
Executive Committee (as defined below) on December 7, 2004 and by the
undersigned pursuant to authority delegated to them by resolutions duly adopted
by unanimous written consent of the Board of Directors of the Company on
November 8, 2004 and by unanimous written consent of the members of the
Executive Committee of the Board of Directors (the "2004 Executive Committee")
on December 7, 2004 (collectively, the "Company Resolutions") and by resolutions
duly adopted by each Guarantor's Board of Directors (other than the Partnership)
and the General Partner on December 7, 2004 (collectively, the "Guarantors'
Resolutions") and such terms are as set forth in Annex I hereto, (2) the form of
certificate evidencing the Notes was established by the undersigned pursuant to
authority delegated to them by the Company Resolutions and the Guarantors'
Resolutions and shall be in substantially the form attached as Annex II hereto,
(3) a true, complete and correct copy of the Company Resolutions and the
Guarantors' Resolutions, which were duly adopted by the Board of Directors of
the Company and the 2004 Executive Committee or each Guarantor's Board of
Directors (other than the Partnership) and the General Partner, as the case may
be, and are in full force and effect on the date hereof, are attached as an
exhibit to the Certificate of the Secretary of the Company of even date
herewith, and (4) the form and terms of the Notes have been established pursuant
to Sections 201 and 301 of the Indenture and comply with the Indenture and, in
the
opinion of the undersigned, all conditions provided for in the Indenture
(including, without limitation, those set forth in Sections 103, 201, 301 and
303 of the Indenture) relating to the establishment of the terms of the Notes
and the form of certificate evidencing the Notes, and relating to the
authentication and delivery of the Notes, have been complied with.
This certificate may be executed by the parties hereto in
counterparts, each of which when so executed shall be deemed to be an original,
with the same effect as if the signatures thereto and hereto were on the same
instrument, but all such counterparts shall together constitute but one and the
same instrument.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, we have hereunto set our hands as of the
date first written above.
KB HOME
By: /s/ KIMBERLY N. KING
-------------------------------------
Kimberly N. King
Vice President, Associate General
Counsel and Corporate Secretary
By: /s/ KELLY MASUDA
--------------------------------
Kelly Masuda
Vice President, Capital Markets
and Treasurer
KB HOME PHOENIX INC., an Arizona
corporation
By: /s/ KIMBERLY N. KING
-------------------------------------
Kimberly N. King
Secretary
By: /s/ KELLY M. ALLRED
------------------------------
Kelly M. Allred
Vice President and Treasurer
KB HOME COASTAL INC., a California
corporation
By: /s/ KIMBERLY N. KING
-------------------------------------
Kimberly N. King
Secretary
By: /s/ KELLY M. ALLRED
------------------------------
Kelly M. Allred
Vice President and Treasurer
KB HOME NORTH BAY INC., a California
corporation
By: /s/ KIMBERLY N. KING
------------------------------------
Kimberly N. King
Secretary
By: /s/ KELLY M. ALLRED
------------------------------
Kelly M. Allred
Vice President and Treasurer
KB HOME SOUTH BAY INC., a California
corporation
By: /s/ KIMBERLY N. KING
-------------------------------------
Kimberly N. King
Secretary
By: /s/ KELLY M. ALLRED
------------------------------
Kelly M. Allred
Vice President and Treasurer
KB HOME GREATER LOS ANGELES INC.,
a California corporation
By: /s/ KIMBERLY N. KING
-------------------------------------
Kimberly N. King
Secretary
By: /s/ KELLY M. ALLRED
------------------------------
Kelly M. Allred
Vice President and Treasurer
KB HOME COLORADO INC., a Colorado
corporation
By: /s/ KIMBERLY N. KING
-------------------------------------
Kimberly N. King
Secretary
By: /s/ KELLY M. ALLRED
------------------------------
Kelly M. Allred
Vice President and Treasurer
KB HOME NEVADA INC., a Nevada corporation
By: /s/ KIMBERLY N. KING
-------------------------------------
Kimberly N. King
Secretary
By: /s/ KELLY M. ALLRED
------------------------------
Kelly M. Allred
Vice President and Treasurer
KB HOME LONE STAR LP, a Texas limited
partnership
By: KBSA, Inc., a Texas corporation,
Its general partner
By: /s/ KIMBERLY N. KING
-------------------------------------
Kimberly N. King
Secretary
By: /s/ KELLY M. ALLRED
------------------------------
Kelly M. Allred
Vice President and Treasurer
ANNEX I
Capitalized terms used in this Annex I and not otherwise
defined herein have the same definitions as in the Indenture referred to in the
Officers' Certificate and Guarantors' Officers' Certificate of which this Annex
I constitutes a part.
(1) The Securities of the series established hereby shall be
known and designated as the 5-7/8% Senior Notes due 2015 and are sometimes
hereinafter called the "Notes."
(2) The aggregate principal amount of the Notes which may be
authenticated and delivered under the Indenture is limited to $300,000,000,
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 Indenture; provided, however, such series may be
re-opened by the Company for the issuance of additional Notes of such series, 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
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 Section 402(2) or 402(3),
respectively, of the Indenture or has effected satisfaction and discharge with
respect to the Notes pursuant to Section 401 of the 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.
(3) 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 Depositary or its nominee (the "Global Notes").
The initial depositary (the "Depositary") for the Global Notes shall be The
Depository Trust Company, the depositary arrangements shall be those employed by
whoever shall be the Depositary with respect to the Global Notes from time to
time, and the Trustee shall be entitled to make any endorsements on any Global
Notes to reflect any increases or decreases in the principal amount thereof.
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.
(4) The Notes shall be sold to the Underwriter at a price of
99.357% of the principal amount thereof.
(5) The Stated Maturity of the Notes on which the principal
thereof is due and payable shall be January 15, 2015.
(6) The principal of the Notes shall bear interest at the rate
of 5-7/8% per annum from December 15, 2004 or from the most recent date to which
interest has been paid or duly provided for, payable semiannually in arrears on
January 15 and July 15 (each, an "Interest Payment Date") of each year,
commencing July 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
January 1 or July 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.
(7) The Notes are redeemable, as a whole at any time 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 Indenture and in the
form of Note which appears as Annex II to this Officers' Certificate and
Guarantors' Officers' Certificate.
(8) 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 Indenture) and shall not be subject
to a sinking fund or analogous provision.
(9) The Borough of Manhattan, The City of New York is hereby
designated as a Place of Payment for the Notes.
(10) The Company hereby appoints the Trustee, acting through
the office of the Trustee located at c/o SunTrust Robinson Humphrey Capital
Markets, 125 Broad Street, 3rd Floor, New York, New York 10004, 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 Indenture; provided, however, subject
to Section 1002 of the 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.
(11) The Notes shall be issued in denominations of $1,000 and
integral multiples of $1,000 in excess thereof.
(12) The principal of, premium, if any, and interest on the
Notes shall be payable in Dollars.
(13) Sections 402(2) and 402(3) of the 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 Indenture.
(14) The Notes shall not be convertible into or exchangeable
for other securities.
(15) 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.
(16) 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.
(17) The Notes shall have such other terms and provisions as
are set forth in the form of Note attached as Annex II to this Officers'
Certificate and Guarantors' Officers' Certificate, all of which terms and
provisions are incorporated by reference in and made a part of this Annex I as
if set forth in full herein.
(18) 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.
(19) The Notes shall have the benefit of the Guarantees and
the Guarantors hereby confirm that the principal of and premium, if any, and
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 Indenture.
(20) 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 the 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.
(21) Section 101 of the Original 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 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."
ANNEX II
Form of Certificate Evidencing the Notes
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.
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.
No. R-01 Principal Amount: $300,000,000
CUSIP No. 48666KAL3 (or such other principal amount
ISIN No. US48666KAL35 as is set forth on Schedule A hereto)
KB Home
5-7/8% Senior Notes due 2015
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 Cede & Co., or registered
assigns, the principal sum of THREE HUNDRED MILLION DOLLARS ($300,000,000) or
such other principal amount as is set forth on Schedule A hereto on January 15,
2015, and to pay interest thereon from December 15, 2004, or from the most
recent date to which interest has been paid or duly provided for, semiannually
in arrears on January 15 and July 15 of each year (each, an "Interest Payment
Date"), commencing July 15, 2005, and at Maturity, at the rate of 5-7/8% 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 January 1 or July 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; and 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
$300,000,000.
Payments of principal of and premium, if any, and 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 on Notes whose Stated
Maturity is on or prior to the relevant Redemption Date will be payable to the
Holders of such Notes (or one or more Predecessor Securities) registered as such
at the close of business on the relevant Regular Record Date 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
2
(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, Credit Suisse First Boston 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 Credit Suisse First Boston 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 January 15, 2015.
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.
3
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.
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.
4
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.
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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: December 15, 2004
[Seal] KB HOME
Attest: By:
---------------------------------------------- ----------------------------------------------
Name: Kimberly N. King Name: Kelly Masuda
Title: Vice President, Associate General Title: Vice President, Capital Markets
Counsel and Corporate Secretary and Treasurer
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
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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.
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SCHEDULE A
The initial principal amount of this global Note is Three Hundred Million
Dollars ($300,000,000). 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
8