Exhibit 1.2
OAKWOOD HOMES CORPORATION
(a North Carolina corporation)
$125,000,000 7.875% Senior Notes Due 2004
$175,000,000 8.125% Senior Notes Due 2009
TERMS AGREEMENT
February 25, 1999
To: Oakwood Homes Corporation
7800 McCloud Road
Greensboro, North Carolina 27409-9634
Ladies and Gentlemen:
We understand that Oakwood Homes Corporation, a North Carolina
corporation (the "Company"), proposes to issue and sell $125,000,000 aggregate
principal amount of its 7.875% Senior Notes Due 2004 and $175,000,000 aggregate
principal amount of its 8.125% Senior Notes Due 2009 (collectively, the "Notes")
(such securities also being hereinafter referred to as the "Underwritten
Securities"). Subject to the terms and conditions set forth or incorporated by
reference herein, we the underwriters named below (the "Underwriters") offer to
purchase, severally and not jointly, the principal amount of Underwritten
Securities opposite their names set forth below at the purchase price set forth
below. Capitalized terms used herein and not otherwise defined shall have the
respective meanings given to such terms under the form of Indenture (the
"Indenture") filed as an Exhibit to Amendment No. 2 to the Registration
Statement on Form S-3 (No. 333-47053) and under the First Supplemental Indenture
(the "Supplemental Indenture") between the Company and the Trustee (as defined
therein) relating to the Notes, which is attached hereto as Annex I, including
in the case of certain terms the respective meanings given to such terms under
the form of the Notes included in the Supplemental Indenture. This Terms
Agreement supplements the terms and conditions of the Underwriting Agreement
attached hereto as Annex II, dated the date hereof between the Company and the
Underwriters, which shall govern the offering of the Underwritten Securities.
Principal Amount Principal Amount
Underwriters of Notes Due 2004 of Notes Due 2009
- ------------ ----------------- -----------------
NationsBanc Montgomery Securities LLC $75,000,000 $105,000,000
First Union Capital Markets Corp. $25,000,000 $ 35,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated $25,000,000 $ 35,000,000
----------------- -----------------
Total $125,000,000 $175,000,000
================= =================
Price to the Company: 99.128% 98.785%
Company Proceeds: $123,910,000 $172,873,750
The Underwritten Securities shall have the following terms:
Title: $125,000,000 7.875% Senior Notes Due 2004
$175,000,000 8.125% Senior Notes Due 2009
Rank: Pari passu with all of the Company's other
unsecured and unsubordinated indebtedness.
Ratings: Baa3/BBB-
Aggregate principal amount: $125,000,000 5 year Notes
$175,000,000 10 year Notes
------------
$300,000,000 Total
Denominations: $1,000.00
Currency of payment: U.S. Dollars
Interest rate or formula: 7.875% per annum (5 year Notes)
8.125% per annum (10 year Notes)
Interest payment dates: Semi-annually on March 1 and September 1,
beginning September 1, 1999
Regular record dates: February 15 and August 15 of each year
Stated maturity dates: March 1, 2004 (5 year Notes)
March 1, 2009 (10 year Notes)
Redemption provisions: Redeemable, in whole or in part, at the
Company's option at any time on not less
than 30 nor more than 60 days' notice at the
greater of (i) 100% of principal amount of
the Notes being redeemed or (ii) as
determined by the Quotation Agent, the sum
of the present values of the remaining
scheduled payments of principal and interest
on the Notes (not including any portion of
those payments of interest accrued as of the
Redemption Date) discounted to the
Redemption Date on a semi-annual basis at
the Adjusted Treasury Rate plus 25 basis
points plus, in each case, accrued and
unpaid interest to the Redemption Date.
Redeemable by the Company, at the option of
each Holder of the Notes, in whole or in
part upon the occurrence of a Change in
Control Triggering Event, for cash equal to
101% of the principal amount of the Notes
tendered for
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redemption plus any interest accrued and
unpaid through the Purchase Date.
The terms and conditions relating to any
such redemption shall be as set forth under
the Supplemental Indenture (including the
form of the Notes contained therein).
Sinking fund requirements: None.
Defeasance provisions: The Notes are subject to defeasance and the
Company will be discharged from its
obligations with respect to the Notes upon
compliance with certain conditions.
The Company may omit to comply with certain
restrictive covenants applicable to the
Notes upon compliance with certain
conditions.
The terms and conditions relating to any
such defeasance and covenant defeasance
shall be as set forth under the Supplemental
Indenture.
Listing requirements: The Notes will not be listed on any
securities exchange or included in any
automated quotation system.
Black-out provisions: None.
Fixed or Variable Price Offering: Fixed price offering with an initial public
offering price of 99.728% of the principal
amount of the Notes Due 2004, and 99.435% of
the principal amount of the Notes Due 2009,
plus in each case accrued interest, if any,
from March 2, 1999 or from the most recent
date to which interest has been paid or
provided for.
Form: The form of the Notes shall be as set forth
in the Supplemental Indenture.
OTHER TERMS AND CONDITIONS: The terms and conditions of the Notes shall
be as set forth in the Supplemental
Indenture and under the Indenture, as
provided for in the Supplemental Indenture.
Closing date and location: March 2, 1999 at 9:00 A.M. (Eastern time) at
the offices of Kennedy Covington Lobdell &
Hickman, L.L.P., 100 North Tryon Street,
42nd Floor, Charlotte, North Carolina
28202-4006 or at such other time and place
as shall be agreed upon by the
Representatives of the Underwriters and the
Company.
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Co-managers: First Union Capital Markets Corp. Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
ALL OF THE PROVISIONS CONTAINED IN THE SUPPLEMENTAL INDENTURE ATTACHED
AS ANNEX I HERETO AND IN THE UNDERWRITING AGREEMENT ATTACHED AS ANNEX II HERETO
ARE HEREBY INCORPORATED BY REFERENCE IN THEIR ENTIRETY HEREIN AND SHALL BE
DEEMED TO BE A PART OF THIS TERMS AGREEMENT TO THE SAME EXTENT AS IF SUCH
PROVISIONS HAD BEEN SET FORTH IN FULL HEREIN.
Please accept this offer no later than 5:00 P.M. (Eastern time) on
February 25, 1999 by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.
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Very truly yours,
NationsBanc Montgomery Securities LLC
First Union Capital Markets Corp.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: NationsBanc Montgomery Securities LLC
By: /s/ Lynn T. McConnell
-----------------------------------
Authorized Signatory
Acting on behalf of itself and the
other named Underwriters
Accepted:
OAKWOOD HOMES CORPORATION
By: /s/ Douglas R. Muir
----------------------------------
Name: Douglas R. Muir
Title: Senior Vice President
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Annex I
Form of Supplemental Indenture
[Omitted]
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Annex II
Underwriting Agreement
[Omitted]
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