UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 7, 2012
KB HOME
(Exact name of registrant as specified in its charter)
Delaware | 1-9195 | 95-3666267 | ||
(State or other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
10990 Wilshire Boulevard, Los Angeles, California | 90024 | |||
(Address of Principal Executive Offices) | (Zip Code) |
Registrants telephone number, including area code: (310) 231-4000
Not Applicable
(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 8.01. Other Events
On February 7, 2012, KB Home issued $350,000,000 in aggregate principal amount of its 8.00% Senior Notes due 2020 (the Notes). KB Home filed a prospectus supplement, dated February 1, 2012, under its Registration Statement on Form S-3ASR (No. 333-176930) with respect to the offering of the Notes. Exhibits are filed herewith in connection with the issuance of the Notes.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
1.1 | Underwriting Agreement, dated February 1, 2012, regarding $350,000,000 of KB Homes 8.00% Senior Notes due 2020. | |
4.26 | Form of 8.00% Senior Note due 2020. | |
4.27 | Officers Certificate and Guarantors Officers Certificate dated February 7, 2012, establishing the form and terms of the Notes. | |
5.3 | Opinion of Munger, Tolles & Olson LLP. | |
5.4 | Opinion of Parsons Behle & Latimer. | |
23.3 | Consent of Munger, Tolles & Olson LLP (included in Exhibit 5.3). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 7, 2012
KB Home | ||
By: |
/s/ BRIAN J. WORAM |
|
Brian J. Woram | ||
Executive Vice President, General Counsel and Secretary | ||
Registered In-House Counsel |
EXHIBIT INDEX
Exhibit
|
Description |
|
1.1 | Underwriting Agreement, dated February 1, 2012, regarding $350,000,000 of KB Homes 8.00% Senior Notes due 2020. | |
4.26 | Form of 8.00% Senior Note due 2020. | |
4.27 | Officers Certificate and Guarantors Officers Certificate dated February 7, 2012 establishing the form and terms of the Notes. | |
5.3 | Opinion of Munger, Tolles & Olson LLP. | |
5.4 | Opinion of Parsons Behle & Latimer. | |
23.3 | Consent of Munger, Tolles & Olson LLP (included in Exhibit 5.3). |
Exhibit 1.1
KB HOME
(a Delaware corporation)
$350,000,000
8.00% Senior Notes due 2020
UNDERWRITING AGREEMENT
February 1, 2012
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Deutsche Bank Securities Inc.
As Representatives of the several Underwriters
named in Schedule B hereto
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
c/o Credit Suisse Securities (USA) LLC
Eleven Madison Avenue
New York, New York 10010
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
One Bryant Part
New York, New York 10036
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005
Ladies and Gentlemen:
KB Home, a Delaware corporation (the Company ), and the Companys subsidiaries listed on Schedule A hereto (the Guarantors ) confirm their agreement with Citigroup Global Markets Inc. ( Citigroup ), Credit Suisse Securities (USA) LLC ( Credit Suisse ), Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) and Deutsche Bank Securities Inc. (Deutsche Bank) and each of the other underwriters, if any, named in Schedule B hereto (collectively, the Underwriters , which term shall also include any underwriters substituted as hereinafter provided in Section 10 hereof), for whom Citigroup, Credit Suisse, Merrill Lynch and Deutsche Bank are acting as representative (in such capacity, the Representatives ), with respect to the sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of $350 million aggregate principal amount of the Companys 8.00% Senior Notes due 2020 (the Securities ). The Securities will be unconditionally guaranteed on a senior basis by each of the Guarantors (the Guarantees ) pursuant to the Indenture (as defined below).
The Securities are to be issued pursuant to an Indenture (the Original Indenture ) dated as of January 28, 2004, as amended and supplemented by the First Supplemental Indenture (the First Supplemental Indenture ) thereto dated as of January 28, 2004, as further amended and supplemented by the Second Supplemental Indenture (the Second Supplemental Indenture ) thereto dated as of June 30, 2004, the Third Supplemental Indenture (the Third Supplemental Indenture ) thereto dated as of May 1, 2006, the Fourth Supplemental Indenture (the Fourth Supplemental Indenture ) thereto dated as of November 9, 2006, the Fifth Supplemental Indenture (the Fifth Supplemental Indenture ) thereto dated as of August 17, 2007, and the Sixth Supplemental Indenture (the Sixth Supplemental Indenture ) thereto dated as of January 30, 2012 (the Original Indenture, as so amended and supplemented, the Indenture ), each among the Company, the Guarantors and U.S. Bank National Association, as successor to SunTrust Bank, as trustee (the Trustee ).
In this Agreement, the Guarantors are sometimes referred to as the Significant Subsidiaries.
The Company has filed with the Securities and Exchange Commission (the Commission ) a registration statement on Form S-3 (No. 333-176930) (the Current Registration Statement ) for the registration under the Securities Act of 1933 (the 1933 Act ) of, among other securities, the Securities and the Guarantees, which registration statement automatically became effective upon filing on September 20, 2011 and copies of which have heretofore been delivered to the Representatives. The Indenture has been qualified under the Trust Indenture Act of 1939, as amended (the 1939 Act ). The Company proposes to file with the Commission, pursuant to Rule 430B ( Rule 430B ) of the rules and regulations of the Commission under the 1933 Act (the 1933 Act Regulations ) and paragraph (b) of Rule 424 ( Rule 424(b) ) of the 1933 Act Regulations, the Prospectus Supplement (as defined in Section 3(i) hereof) and the related prospectus dated September 20, 2011 (the Base Prospectus ) relating to the Securities and Guarantees, and has previously advised the Representatives of all further information (financial and other) with respect to the Company and the Guarantors set forth therein. Any information included in the Prospectus Supplement or the Base Prospectus that was omitted from the Current Registration Statement at the time it became effective but that is deemed to be part of and included in the Current Registration Statement pursuant to
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paragraph (f) of Rule 430B is referred to as the Rule 430B Information . Each prospectus, together with the related prospectus supplement, relating to the Securities that omitted the Rule 430B Information or that was captioned Subject to Completion (or a similar caption) that was used after effectiveness of the Current Registration Statement, is herein called, together with the documents incorporated and deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, a Preliminary Prospectus , and all references herein to any Preliminary Prospectus shall be deemed to include the Statutory Prospectus (as hereinafter defined). The Current Registration Statement, at any given time, including the amendments thereto to such time, the exhibits and any schedules thereto at such time, the documents incorporated and deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at such time, and the documents and information (including, without limitation, any 430B Information) otherwise deemed to be a part thereof or included therein by the 1933 Act Regulations at such time, is hereinafter called, the Registration Statement . The Base Prospectus and the Prospectus Supplement including the documents incorporated and deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first furnished (electronically or otherwise) to the Underwriters for use in connection with the offering of the Securities (whether to meet the requests of purchasers pursuant to Rule 173 under the 1933 Act Regulations or otherwise) or, if not furnished to the Underwriters, in the form first filed by the Company pursuant to Rule 424(b), are herein called collectively, the Prospectus .
All references in this Agreement to documents, financial statements and schedules and other information which is contained, included, stated, described in or referred to in the Registration Statement, the Prospectus, the Base Prospectus, the Statutory Prospectus or any Preliminary Prospectus (and all other references of like import) shall be deemed to mean and include all such documents, financial statements and schedules and other information which is incorporated or deemed to be incorporated by reference in, or otherwise deemed by the 1933 Act Regulations (including, without limitation, Rule 430B) to be a part of or included in, the Registration Statement, the Prospectus, the Base Prospectus, the Statutory Prospectus or such Preliminary Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, the Prospectus, the Base Prospectus, the Statutory Prospectus or any Preliminary Prospectus shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934, as amended (the 1934 Act ), which is incorporated or deemed to be incorporated by reference in the Registration Statement, the Prospectus, the Base Prospectus, the Statutory Prospectus or such Preliminary Prospectus, as the case may be.
The Company and the Guarantors understand that the Underwriters propose to make a public offering (the Offering ) of the Securities and the Guarantees as soon as the Representatives deem advisable after this Agreement has been executed and delivered.
In connection with the Offering, the Company has made offers (the Tender Offers) to purchase up to $340 million in aggregate principal amount of its outstanding 5-3/4% Senior Notes due 2014 (the 2014 Notes) and 5-7/8% Senior Notes due 2015 and 6-1/4% Senior Notes due 2015 (together, the 2015 Notes), consisting of up to $100 million of its 2014 Notes and a maximum amount of the 2015 Notes on an equal priority basis, on the terms and subject to the conditions set forth in the Offer to Purchase dated January 19, 2012. The Company has
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appointed Citigroup and Credit Suisse to act as Dealer Managers for the Tender Offers pursuant to a Dealer Manager Agreement, dated January 19, 2012, by and among Citigroup, Credit Suisse and the Company.
This Agreement, the Securities and the Indenture are hereinafter sometimes referred to, collectively, as the Operative Documents and, individually, as an Operative Document .
All references herein to a subsidiary or subsidiaries of the Company shall include, without limitation (i) the Guarantors and (ii) all other subsidiaries of the Company, including any consolidated joint ventures in which the Company or any of its other subsidiaries is a participant, any consolidated limited and general partnerships in which the Company or any of its other subsidiaries owns partnership interests and any consolidated limited liability companies in which the Company or any of its other subsidiaries owns membership interests (such consolidated joint ventures, limited and general partnerships and limited liability companies being hereinafter called, collectively, the Partnerships and, individually, a Partnership ).
SECTION 1. Representations and Warranties .
(a) The Company and the Guarantors, jointly and severally, represent and warrant to each Underwriter as of the date hereof (such date being hereinafter referred to as the Representation Date), as of the Applicable Time (as defined below) and as of the Closing Time (as defined below), and agree with each Underwriter, as follows:
(i) The Company and the Guarantors meet the requirements for use of Form S-3 under the 1933 Act and the 1933 Act Regulations. No stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are threatened by the Commission, and any request on the part of the Commission for additional information has been complied with.
At (w) the time of filing the Current Registration Statement, (x) the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Sections 13 or 15(d) of the 1934 Act or form of prospectus), (y) the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) of the 1933 Act Regulations) made any offer relating to the Securities in reliance on the exemption in Rule 163, and (z) the Applicable Time (with such date being used as the determination date for purposes of this clause (z)), the Company was or is (as the case may be) a well-known seasoned issuer as defined in Rule 405 of the 1933 Act Regulations ( Rule 405 ). The Registration Statement, as of the Applicable Time (as defined below), meets the requirements set forth in Rule 415(a)(1)(x) of the 1933 Act Regulations. The Company agrees to pay the fees required by the Commission, if any, relating to the Securities within the time required by Rule 456(b)(1) of the 1933 Act Regulations and otherwise in accordance with Rules 456(b) and 457(r) of the 1933 Act Regulations.
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At the time that the Registration Statement was first filed, at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of the Securities and at the Applicable Time, the Company was not and is not an ineligible issuer, as defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered such an ineligible issuer.
At the respective times the Registration Statement and any post-effective amendments thereto first became or become effective, at the time the Companys most recent Annual Report on Form 10-K was filed with the Commission, at each new effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations, at the date hereof and at the Closing Time, the Registration Statement and any amendments and supplements thereto complied in all material respects and will comply in all material respects with the applicable requirements of the 1933 Act, the 1933 Act Regulations, the 1939 Act and the rules and regulations of the Commission under the 1939 Act (the 1939 Act Regulations ), and did not, do not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Base Prospectus, as of its date and as of the Representation Date, the Statutory Prospectus and any other Preliminary Prospectus, as of the date of the preliminary prospectus supplement constituting a part thereof, and the Prospectus and any amendments or supplements thereto, as of the Representation Date and at the Closing Time, complied, comply and will comply, in each case, in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and did not, do not and will not contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
Each Preliminary Prospectus, each Issuer Free Writing Prospectus, if any, and the Prospectus delivered to the Underwriters for use in connection with this offering was or will be identical to the electronically transmitted copy thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T of the Commission.
As of the Applicable Time, neither (x) all Issuer General Use Free Writing Prospectuses (as defined below) issued at or prior to the Applicable Time, the Statutory Prospectus and the information set forth on Schedule C hereto, all considered together (collectively, the General Disclosure Package ), nor (y) any individual Issuer Limited Use Free Writing Prospectus, when considered together with the General Disclosure Package, nor (z) any road show that is a written communication within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, included or will include any untrue statement of a material fact or omitted or will omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
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As of the time that an Issuer Free Writing Prospectus containing the information in the Final Term Sheet (as defined in Section 3(i)) shall have been filed with the Commission, the General Disclosure Package will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading.
As used in this subsection and elsewhere in this Agreement:
Applicable Time shall mean 4:57 p.m. (New York City time) on the date of this Agreement.
Issuer Free Writing Prospectus means any issuer free writing prospectus, as defined in Rule 433 of the 1933 Act Regulations (Rule 433), relating to the Securities that (i) is required to be filed with the Commission by the Company, (ii) is a road show that is a written communication within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Companys records pursuant to Rule 433(g).
Issuer General Use Free Writing Prospectus means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors, as evidenced by its being specified in Schedule D hereto.
Issuer Limited Use Free Writing Prospectus means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.
Statutory Prospectus means, collectively, the Base Prospectus and the preliminary prospectus supplement dated February 1, 2012 relating to the offering of the Securities and the Guarantees, including the documents incorporated and deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first furnished (electronically or otherwise) to the Underwriters for use in connection with the offering of the Securities.
Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Securities or until any earlier date that the Company notified or notifies the Representatives as described in Section 3(e), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any document incorporated or deemed to be incorporated by reference therein that has not been superseded or modified.
The representations and warranties in this subsection 1(a)(i) shall not apply to statements in or omissions from the Registration Statement, the Prospectus, any Preliminary Prospectus or any Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through the Representatives expressly for use therein or the information contained in any Statement of Eligibility of a trustee under the 1939 Act filed or incorporated by reference as an exhibit to the Registration Statement (a Form T-1 ).
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(ii) Ernst & Young LLP, whose reports are incorporated by reference into the Registration Statement, the Statutory Prospectus and the Prospectus, is an independent registered public accounting firm with respect to the Company and its subsidiaries as required by the 1933 Act and the 1933 Act Regulations.
(iii) The financial statements included or incorporated by reference in the Registration Statement, the General Disclosure Package, and the Prospectus present fairly the financial position of the Company and its consolidated subsidiaries as at the dates indicated and the results of operations of the Company and its consolidated subsidiaries for the periods specified; except as otherwise stated in the Registration Statement, the General Disclosure Package and the Prospectus, said financial statements have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis; the supporting schedules included or incorporated by reference in the Registration Statement, the Statutory Prospectus, the General Disclosure Package and the Prospectus present fairly the information required to be stated therein; the Companys ratios of earnings to fixed charges and, if applicable, of earnings to combined fixed charges and preferred stock dividends included in the Base Prospectus under the caption Ratios of Earnings to Fixed Charges and in the Prospectus Supplement under the caption Selected Consolidated Financial Data and in Exhibit 12.1 to the Registration Statement have been calculated in compliance with Item 503(d) of Regulation S-K of the Commission; and the pro forma financial statements, if any, and related notes thereto included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly the information shown therein, have been prepared in accordance with the Commissions rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein.
(iv) Since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package, and the Prospectus, except as otherwise stated therein, (A) there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, (B) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise, and (C) except for regular quarterly dividends in customary amounts per share on the Companys common stock, par value $1.00 per share (the Common Stock ), there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. As used in this subsection (iv), the term Registration Statement means the Registration Statement excluding any amendments or supplements thereto after the date of this Agreement; the term General Disclosure Package means the General Disclosure Package excluding any amendments or supplements thereto after the Applicable Time; and the term Prospectus means the Prospectus excluding any amendments or supplements thereto after the date of this Agreement.
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(v) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the General Disclosure Package and the Prospectus and to enter into and perform its obligations under the Operative Documents and the Guarantees; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in the State of California and in each other jurisdiction, if any, in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except jurisdictions (other than the State of California) where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise; and without limitation to the foregoing provisions of this subparagraph, the only jurisdiction in which the Company is qualified as a foreign corporation is the State of California.
(vi) Each Guarantor is either a corporation or a limited liability company. Each Guarantor has been duly organized and is validly existing as a corporation or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its organization, has power and authority to own, lease and operate its properties and to conduct its business as described in the General Disclosure Package and the Prospectus and to enter into and perform its obligations under the Operative Documents to which it is a party, and is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise; without limitation to the foregoing provisions of this subparagraph, none of the Guarantors is qualified as a foreign corporation or limited liability company in any jurisdiction, other than KB HOME Orlando LLC, KB HOME Tampa LLC, KB HOME Fort Myers LLC, and KB HOME Treasure Coast LLC, each a Delaware limited liability company qualified as a foreign limited liability company in the State of Florida; all of the issued and outstanding capital stock of each Guarantor which is a corporation has been duly authorized and validly issued, is fully paid and non-assessable and is owned (except for directors qualifying shares and a nominal number of shares held by affiliated parties) by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; and all of the outstanding equity interests in each Guarantor which is a limited liability company have been duly authorized (if applicable) and validly issued, are fully paid and non-assessable and are owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. Except for the Guarantors, no subsidiary of the Company (including, without limitation, any Partnership) is a significant subsidiary as defined in Rule 1-02 of Regulation S-X (as in effect on January 1, 1996 and as of the date hereof). Schedule A hereto sets forth the names of each of the Guarantors, its jurisdiction of organization and whether such Guarantor is a corporation, limited liability company or other entity.
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(vii) (A) The authorized, issued and outstanding capital stock of the Company is as set forth in the audited consolidated balance sheet as of November 30, 2011 appearing in the Companys Annual Report on Form 10-K for the fiscal year then ended (except for (1) subsequent issuances, if any, pursuant to reservations, agreements or employee benefit plans referred to or incorporated by reference in the General Disclosure Package and the Prospectus, and (2) repurchases of Common Stock pursuant to stock repurchase programs that are described in the General Disclosure Package and the Prospectus; the shares of issued and outstanding Common Stock have been duly authorized and validly issued and are fully paid and non-assessable; the Common Stock, the Companys authorized but unissued special common stock, par value $1.00 per share (the Special Common Stock ), and the Companys authorized and unissued preferred stock, par value $1.00 per share (the Preferred Stock ), conform to the respective statements relating thereto included in the General Disclosure Package and the Prospectus;
(B) the Securities have been duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and, when issued by the Company, authenticated by the Trustee and delivered pursuant to the provisions of the Indenture and this Agreement against payment of the consideration set forth herein, the Securities will have been duly executed and delivered by the Company and will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors rights generally or by general equitable principles, and will be entitled to the benefits of the Indenture;
(C) The Original Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture and the Sixth Supplemental Indenture have been duly authorized, executed and delivered by the Company and each of the Guarantors party thereto and constitute valid and binding agreements of the Company and each of the Guarantors, enforceable against the Company and each of the Guarantors in accordance with their terms, except in each case as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors rights generally or by general equitable principles, and except in each case against any Company subsidiary that has been released as a Guarantor under the Indenture, and the Indenture has been duly qualified under the 1939 Act; and
(D) the Operative Documents and the Guarantees conform and will conform in all material respects to the respective descriptions thereof contained in the General Disclosure Package and the Prospectus.
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(viii) Neither the Company nor any Guarantor is in violation of any statute, law, rule, regulation, judgment, order or decree applicable to such party of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over such party or any of its properties (except where such violations would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise).
(ix) The Company is not in violation of its charter or by-laws and none of the Guarantors is in violation of its charter or by-laws or other organizational documents, and neither the Company nor any of the Guarantors is in default in the performance or observance of (A) any obligation, agreement, covenant or condition contained in any outstanding debt securities previously issued under the Indenture (the Senior Notes ), the Indenture or the guarantees of the Senior Notes (the Senior Guarantees ), (the Senior Notes, the Indenture and the Senior Guarantees are hereinafter called, collectively, the Subject Instruments and, individually, a Subject Instrument ) or (B) any obligation, agreement, covenant or condition contained in any other contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of the Guarantors is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of the Guarantors is subject, which default or violation would have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise; and the execution, delivery and performance of this Agreement and the other Operative Documents and the Guarantees, the consummation of the transactions contemplated herein and the other Operative Documents and the Guarantees and compliance by the Company and the Guarantors with their respective obligations under such agreements to which they are parties have been duly authorized by all necessary action, corporate or other, and will not conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Guarantors pursuant to, any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of the Guarantors is a party or by which it or any of them may be bound (including, without limitation, the Subject Instruments), or to which any of the property or assets of the Company or any of the Guarantors is subject, except (other than in the case of the Subject Instruments) for a conflict, breach, default, lien, charge or encumbrance which would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, nor will such action result in any violation of the provisions of the charter, by-laws or other organizational documents of the Company or any of the Guarantors or any applicable law, administrative regulation or administrative or court order or decree;
(x) There is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened, against or affecting the Company or any of its subsidiaries, which is required to be disclosed in the Registration Statement, the Statutory Prospectus or the Prospectus (other than as disclosed therein), or which is not so disclosed and (net
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of reserves and insurance) which the Company believes might result in any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, or which might materially and adversely affect the properties or assets thereof or which might materially and adversely affect the consummation of this Agreement or the other Operative Documents; all pending legal or governmental proceedings to which the Company or any subsidiary is a party or of which any of their respective property or assets is the subject which are not described in or incorporated by reference in the Registration Statement, the Statutory Prospectus, the General Disclosure Package and the Prospectus, including ordinary routine litigation incidental to the business, are, considered in the aggregate and net of reserves and insurance, not material to the Company and its subsidiaries considered as one enterprise; and there are no contracts or documents of the Company or any of its subsidiaries which are required to be filed as exhibits to the documents incorporated or deemed to be incorporated by reference in the Registration Statement, the Statutory Prospectus or the Prospectus by the 1933 Act or by the 1933 Act Regulations which have not been so filed or incorporated by reference.
(xi) No authorization, approval or consent of any court or governmental authority or agency is necessary in connection with the issuance and sale of the Securities or the Guarantees, the consummation by the Company or any Guarantor of any of the other transactions contemplated hereby or by any of the other Operative Documents, except such as may be required and have been obtained under the 1933 Act, the 1933 Act Regulations, the 1934 Act, the 1934 Act Regulations (as defined below) and the 1939 Act, and such as may be required under state securities laws.
(xii) This Agreement has been duly authorized, executed and delivered by the Company and each of the Guarantors.
(xiii) The documents incorporated or deemed to be incorporated by reference in the Registration Statement, the Statutory Prospectus and the Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission under the 1934 Act (the 1934 Act Regulations ), and (a) when read together with the other information in the Registration Statement, at the time the Registration Statement and any amendments thereto first became effective, at the time the Companys most recent Annual Report on Form 10K was filed with the Commission and at each new effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations, (b) when read together with the other information in the General Disclosure Package, at the Applicable Time and (c) when read together with the other information in the Prospectus, at the Representation Date and at the Closing Time, did not, do not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(xiv) The Securities rank and will rank pari passu in right of payment with the Senior Notes. The Guarantees rank and will rank pari passu in right of payment with the Senior Guarantees.
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(xv) There are no holders of securities of the Company with currently exercisable registration rights to have any securities registered as part of the Registration Statement or included in the offering contemplated by this Agreement.
(xvi) The Company and each of the Guarantors have good and marketable title to all of their respective properties, in each case free and clear of all liens, encumbrances and defects, except (i) customary liens and encumbrances arising in the ordinary course of the Companys construction and development business and the financing thereof, (ii) as stated or incorporated by reference in the Statutory Prospectus, the General Disclosure Package and the Prospectus or (iii) such as do not materially affect the value of such properties in the aggregate to the Company and its subsidiaries considered as one enterprise and do not materially interfere with the use made and proposed to be made of such properties.
(xvii) The Company and the Guarantors possess such certificates, authorities and permits issued by the appropriate state, federal and foreign regulatory agencies or bodies necessary to conduct all material aspects of the business now operated by them, and neither the Company nor any of the Guarantors has received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would materially and adversely affect the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise.
(xviii) No default or event of default with respect to any Indebtedness (as such term is defined in the Base Prospectus under the caption Description of Debt SecuritiesCertain Definitions) of the Company or any of the Guarantors entitling, or which, with notice or lapse of time or both, would entitle, the holders thereof to accelerate the maturity thereof exists or will exist as a result of the execution and delivery of this Agreement, any of the other Operative Documents, the issuance and sale of the Securities or the Guarantees or the consummation of the transactions contemplated hereby or thereby.
(xix) The Company and each of the Guarantors have filed all tax returns required to be filed, which returns, as amended, are complete and correct in all material respects, and neither the Company nor any Guarantor is in default in the payment of any taxes which were payable pursuant to said returns or any assessments with respect to said returns which would materially and adversely affect the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise.
(xx) The Company and each of the Guarantors maintain a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with managements general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in
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conformity with generally accepted accounting principles and to maintain accountability for assets; (C) access to assets is permitted only in accordance with managements general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(xxi) The Company and its subsidiaries maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act); based on the most recent evaluation, the Companys principal executive officer and principal financial officer concluded that the Companys disclosure controls and procedures were effective as of November 30, 2011.
(xxii) The Company and the Guarantors have not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the 1934 Act, the 1934 Act Regulations or otherwise, stabilization or manipulation of the price of any security of the Company or the Guarantors to facilitate the sale or resale of the Securities.
(xxiii) None of the Operative Documents or the Guarantees is or will be, and no payment by the Company or any of the Guarantors of any amounts payable under or pursuant to any of the Operative Documents or the Guarantees (including, without limitation, any principal, premium, if any, or interest) is or will be, subject to any usury law or other limitation on the rate or amount of interest or other amounts payable thereunder or the yield thereon (collectively, Usury Laws ), or violates, contravenes or breaches, or will violate, contravene or breach, any Usury Laws.
(xxiv) Neither the Company nor any of the Guarantors is, and upon issuance and sale of the Securities and the Guarantees as contemplated by this Agreement and application of the net proceeds therefrom as described in the Statutory Prospectus, the General Disclosure Package and the Prospectus, including towards consummation of the Tender Offers, neither the Company nor any of the Guarantors will be, an investment company or an entity controlled by an investment company as such terms are defined in the Investment Company Act of 1940, as amended (the 1940 Act ).
(xxv) No subsidiary of the Company is a guarantor of, or is a party to or bound by any instrument or agreement pursuant to which it is or may be required to guarantee or cause another subsidiary of the Company to guarantee, any borrowings, bonds, notes, debentures or other indebtedness or lease obligations of the Company, except for the Indenture and that certain Amended and Restated Deed of Trust and Security Agreement dated as of November 9, 2011 by KB HOME Nevada Inc. to the Company and the related Amended and Restated Promissory Note of even date therewith made by KB HOME Nevada Inc. in favor of the Company . The Company is not a party to or bound by any instrument or agreement pursuant to which it is or may be required to cause any of its subsidiaries to guarantee any borrowings, bonds, notes, debentures or other indebtedness or lease obligations of the Company, other than the Indenture. The only persons or entities that have guaranteed the Senior Notes or any indebtedness or other obligations of the Company under the Indenture, are the Guarantors. Except as provided by law, no
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subsidiary of the Company (other than previously unconsolidated joint ventures) is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such subsidiarys capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiarys property or assets to the Company or any other subsidiary of the Company.
(xxvi) The Company and, to the best of its knowledge, its officers and directors in their capacities as such, are in compliance with the applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission promulgated in connection therewith that are effective as of the date hereof, except where the failure to so comply would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise.
(xxvii) The Company and the Guarantors are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ( Environmental Laws ), except where such noncompliance with Environmental Laws would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise. There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval or any related constraints on operating activities or any potential liabilities to third parties) which would have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise.
(xxviii) Neither the Company nor any Guarantor has any liability for any prohibited transaction or accumulated funding deficiency (within the meaning of Section 412 of the Internal Revenue Code of 1986, as amended) or any complete or partial withdrawal liability with respect to any pension, profit sharing or other plan which is subject to the Employee Retirement Income Security Act of 1974, as amended ( ERISA ), to which the Company or any Guarantor makes or ever has made a contribution and in which any employee of the Company or any Guarantor is or has ever been a participant, except where such liability would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise. With respect to such plans, the Company and each Guarantor is in compliance in all material respects with all applicable provisions of ERISA, except where such noncompliance would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise.
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(xxix) The Registration Statement is not the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the 1933 Act, and neither the Company nor any of the Guarantors nor any of the Companys other subsidiaries is the subject of a pending proceeding under Section 8A of the 1933 Act in connection with the offering of the Securities or the Guarantees.
(xxx) The statements (including any assumptions described therein) included under the caption Managements Discussion and Analysis of Financial Condition and Results of OperationsOutlook in the Companys Annual Report on Form 10-K for the fiscal year ended November 30, 2011 are within the coverage of Rule 175(b) under the 1933 Act to the extent such statements constitute forward-looking statements as defined in Rule 175(c) under the 1933 Act and were made by the Company with a reasonable basis and reflect the Companys good faith estimate of the matters described therein.
(xxxi) The Company is not and, to the knowledge of the Company, none of its subsidiaries or any director, officer, agent, employee or Affiliate of the Company or any of its subsidiaries is currently subject to any sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury ( OFAC ); and the Company will not directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(xxxii) The Company is not and, to the knowledge of the Company, none of its currently operating subsidiaries nor any director, officer, agent, employee or Affiliate of the Company or any of its currently operating subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the FCPA ), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any foreign official (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA; and the Company and, to the knowledge of the Company, its currently operating subsidiaries and its Affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures reasonably designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(xxxiii) The operations of the Company and, to the knowledge of the Company, the operations of its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements and the money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the Money Laundering Laws ) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
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(b) Any certificate signed by any officer or other authorized signatory of the Company or any of the Guarantors and delivered to the Representatives or to counsel for the Underwriters shall be deemed a joint and several representation and warranty by the Company and the Guarantors to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing .
(a) On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each Underwriter, and each Underwriter, severally and not jointly, agrees to purchase from the Company, at 96.898% of the principal amount thereof, the aggregate principal amount of Securities set forth in Schedule B opposite the name of such Underwriter, plus any additional aggregate principal amount of Securities which such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Payment of the purchase price for the Securities shall be made at the offices of the Company, 10990 Wilshire Boulevard, Los Angeles, California, or at such other place as shall be agreed upon by the Representatives and the Company, at 6:30 a.m., California time, on February 7, 2012, or such other time not later than ten business days after such date as shall be agreed upon by the Representatives and the Company (such time and date of payment and delivery of the Securities being herein called Closing Time ). Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the Representatives for the respective accounts of the several Underwriters of certificates for the Securities to be purchased by them. Certificates for the Securities shall be in such denominations and registered in such names as the Representatives may request in writing at least one full business day before Closing Time. It is understood that each Underwriter has authorized the Representatives, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Securities which it has agreed to purchase. Citigroup, Credit Suisse, Merrill Lynch and Deutsche Bank, individually and not as representatives of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for any Securities to be purchased by any Underwriter whose payment therefor has not been received by the Closing Time, but such payment shall not relieve such Underwriter from its obligations hereunder. The certificates for the Securities will be made available for examination and packaging by the Representatives not later than 10:00 a.m. (New York City time) on the last business day prior to Closing Time in New York, New York.
SECTION 3. Covenants of the Company . The Company and each Guarantor, jointly and severally, covenant with each Underwriter as follows:
(a) Subject to the provisions of Sections 3(b) hereof, during the period beginning on the date of this Agreement through and including the date (the Termination Date ), which date shall not be earlier than the Closing Time, as evidenced by a notice from the Representatives to the Company (which notice from the Representatives may be in writing or oral), on which all of the Securities shall have been
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sold by the Underwriters and the Prospectus is no longer required to be delivered or made available on request to investors under the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations, the Company will notify the Representatives immediately, and confirm the notice in writing, (i) of the effectiveness of any post-effective amendment to the Registration Statement, (ii) of the mailing, the delivery or transmittal to the Commission for filing of any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus or any amendment to the Registration Statement or amendment or supplement to any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus or any document incorporated or deemed to be incorporated by reference in or otherwise deemed to be a part of or included in any of the foregoing (including, without limitation, pursuant to Rule 430B) or any document to be filed pursuant to the 1934 Act by the Company or any Guarantor, (iii) of the receipt of any comments or inquiries from the Commission relating to the Registration Statement, the Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus or the documents incorporated or deemed to be incorporated by reference in or otherwise deemed to be a part of or included in any of the foregoing (including, without limitation, pursuant to Rule 430B), (iv) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus or any documents incorporated or deemed to be incorporated by reference in or otherwise deemed to be a part of or included in any of the foregoing (including, without limitation, pursuant to Rule 430B) or for additional information, (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose or of any examination pursuant to Section 8(e) of the 1933 Act concerning the Registration Statement and (vi) if the Company or any of the Guarantors or any of the Companys other subsidiaries becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the offering of the Securities or the Guarantees. The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) During the period beginning on the date of this Agreement through and including the Termination Date, the Company will give the Representatives notice of its intention to file or prepare any post-effective amendment to the Registration Statement or any amendment or supplement to any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus (including any revised prospectus which the Company proposes for use by the Underwriters in connection with the offering of the Securities which differs from the Prospectus first provided to the Underwriters for use in connection with the offering of the Securities (whether to meet requests of purchasers pursuant to Rule 173 under the 1933 Act Regulations or otherwise) or, if not furnished to the Underwriters, in the form first filed pursuant to Rule 424(b) of the 1933 Act Regulations), will furnish the Representatives with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and, except in the case of Current Reports on Form 8-K that are deemed to have been furnished and not filed for purposes of the 1933 Act and the 1934 Act and are therefore not incorporated or deemed to be incorporated by reference in the Registration Statement, any Preliminary Prospectus or the Prospectus, will not file any such
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amendment or supplement or use any such prospectus to which the Representatives or counsel for the Underwriters shall reasonably object. The Company has given the Representatives notice of any filings made pursuant to the 1934 Act or 1934 Act Regulations within 48 hours prior to the Applicable Time; the Company will give the Representatives notice of its intention to make any such filing from the Applicable Time through the Termination Date and will furnish the Representatives with copies of any such documents a reasonable amount of time prior to such proposed filing and, except in the case of Current Reports on Form 8-K that are deemed to have been furnished and not filed for purposes of the 1933 Act and the 1934 Act and are therefore not incorporated or deemed to be incorporated by reference in the Registration Statement, any Preliminary Prospectus or the Prospectus, will not file or use any such document to which the Representatives or counsel for the Underwriters shall reasonably object.
(c) The Company has delivered to the Representatives one copy of the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein) and will also deliver to the Representatives as many conformed copies of the Registration Statement as originally filed and of each amendment thereto (without exhibits) as the Representatives may reasonably request.
(d) The Company will furnish to each Underwriter, from time to time during the period when the Prospectus is required to be delivered or furnished upon request to investors under the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations, such number of copies of each Preliminary Prospectus, if any, the Prospectus (as amended or supplemented, if applicable) and each Issuer Free Writing Prospectus as such Underwriter may reasonably request, for the purposes contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations.
(e) If, during the period beginning on the date of this Agreement through and including the Termination Date, any event shall occur as a result of which it is necessary, in the opinion of counsel for the Underwriters or the Company, to amend or supplement the Prospectus in order to make the Prospectus not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, the Company will, subject to the provisions of Section 3(b) hereof, forthwith amend or supplement the Prospectus (in form and substance satisfactory to the Representatives and counsel for the Underwriters) so that, as so amended or supplemented, the Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time it is delivered to a purchaser, not misleading, and the Company will furnish to the Underwriters a reasonable number of copies of such amendment or supplement. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or the Statutory Prospectus or any other Preliminary Prospectus, the Company will promptly notify the Representatives and will promptly cease use of such Issuer Free Writing Prospectus or, subject to the provisions of Section 3(b) hereof, amend or supplement, at
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its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company will promptly notify the Representatives and the Underwriters and will promptly cease use of such Issuer Free Writing Prospectus (and each of the Underwriters agrees, severally and not jointly, that, upon receipt of such notice from the Company, such Underwriter will promptly cease use of such Issuer Free Writing Prospectus) and, subject to the provisions of Section 3(b) hereof, the Company will promptly amend or supplement, at its own expense, either (a) such Issuer Free Writing Prospectus or (b) the Statutory Prospectus and the Prospectus to eliminate or correct such conflict, untrue statement or omission.
(f) The Company and the Guarantors will endeavor, in cooperation with the Underwriters, to qualify the Securities and the Guarantees for offering and sale under the applicable securities laws of such states and other jurisdictions of the United States as the Representatives may designate; provided , however , that neither the Company nor any of the Guarantors shall be obligated to qualify as a foreign corporation or other entity, as the case may be, in any jurisdiction in which it is not so qualified. In each jurisdiction in which the Securities or the Guarantees have been so qualified, the Company and the Guarantors will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for so long as may be required by applicable law. The Company will promptly advise the Representatives of the receipt by the Company of any notification with respect to the suspension of qualification of the Securities or the Guarantees for sale in any state or jurisdiction or the initiating or threatening of any proceeding for such purpose.
(g) The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide to the Underwriters the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(h) The Company will use the net proceeds received by it from the sale of the Securities in the manner to be specified in the Prospectus Supplement under Use of Proceeds.
(i) (1) Immediately following the execution of this Agreement, the Company will prepare a final term sheet (the Final Term Sheet ) reflecting the final terms of the Securities, in the form set forth on Schedule C hereto, with such changes therein or additions thereto as may be approved by the Representatives, and shall as promptly as practicable file such Final Term Sheet as an issuer free writing prospectus pursuant to Rule 433; provided that the Company shall furnish the Representatives with copies of any such Issuer Free Writing Prospectus a reasonable amount of time prior to such proposed filing and will not use or file any such Issuer Free Writing Prospectus to which the Representatives or counsel to the Underwriters shall reasonably object.
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(2) Immediately following the execution of this Agreement, the Company will prepare a prospectus supplement, dated the date hereof (the Prospectus Supplement ), containing the terms of the Securities and the Guarantees, the plan of distribution thereof and such other information as may be required by the 1933 Act or the 1933 Act Regulations or as the Representatives and the Company deem appropriate.
(3) The Company will effect the filings (including, without limitation, the filings of the Statutory Prospectus, the Prospectus and each Issuer Free Writing Prospectus) required under Rule 424(b) and Rule 433, as the case may be, in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)) and Rule 433, as the case may be, and, if applicable, will take such steps as it deems necessary to ascertain promptly whether any such document transmitted for filing under Rule 424(b) or Rule 433 was received for filing by the Commission and, in the event that it was not, will promptly file such document.
(j) The Company, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act (or would be required to be delivered upon request by a purchaser pursuant to Rule 173 under the 1934 Act), will file all documents required to be filed with the Commission pursuant to Sections 13, 14 or 15 of the 1934 Act within the time periods required by the 1934 Act and the 1934 Act Regulations.
(k) During a period from and including the date of this Agreement through and including the day which is 30 days after the date of this Agreement, the Company will not, without the prior written consent of the Representatives, directly or indirectly, issue, sell, offer to sell, grant any option for the sale of, or otherwise dispose of, any debt securities or any securities convertible into or exchangeable or exercisable for any debt securities (except for the Securities sold to the Underwriters pursuant to this Agreement); provided that the foregoing shall not prevent the Company or its subsidiaries from making borrowings under existing bank credit facilities or letter of credit facilities or under the potential new credit facility described in the Prospectus Supplement under Prospectus Supplement Summary Recent Developments Potential New Letter of Credit Facility.
(l) The Company and the Guarantors agree, jointly and severally, that, unless they have obtained or will obtain the prior written consent of the Representatives, and each Underwriter, severally and not jointly, agrees with the Company that, unless it has obtained or will obtain, as the case may be, the prior written consent of the Company, it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a free writing prospectus (as defined in Rule 405) required to be filed by the Company with the Commission or retained by the Company under Rule 433, other than the information contained in the Final Term Sheet prepared and filed pursuant to Section 3(i) hereof; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of any Issuer Free Writing Prospectus included in Schedule D hereto. Any such free writing prospectus consented to by the Representatives or the Company is hereinafter referred to as a Permitted Free Writing Prospectus. The Company and the Guarantors agree, jointly and severally, that (x) they have treated and will treat, as the
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case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (y) they have complied and will comply, as the case may be, with the requirements of Rules 164 and 433 under the 1933 Act Regulations applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.
SECTION 4. Payment of Expenses . The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the printing and filing of the Registration Statement as originally filed and of each amendment thereto, (ii) the printing or reproduction of this Agreement and the other Operative Documents, (iii) the preparation, issuance and delivery of the certificates for the Securities to the Underwriters, (iv) the fees and disbursements of counsel and accountants to the Company and the Guarantors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey, (vi) the printing and delivery to the Underwriter of copies of the Registration Statement as originally filed and of each amendment thereto, of any Permitted Free Writing Prospectus, any Preliminary Prospectuses and of the Prospectus and any amendments or supplements thereto and any costs associated with the electronic delivery of any of the foregoing by the Underwriters to investors, (vii) the printing and delivery to the Underwriters of copies of the Blue Sky Survey, (viii) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities, (ix) any fees payable in connection with the rating of the Securities, and (x) any fees and expenses of a depositary in connection with holding the Securities in book-entry form.
If this Agreement is terminated by the Representatives in accordance with the provisions of Section 5 or Section 9(a)(i), the Company shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters Obligations . The obligations of the Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company and the Guarantors herein contained, to the performance by the Company and the Guarantors of their respective obligations hereunder, and to the following further conditions:
(a) At Closing Time no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission. The Prospectus containing the 430B Information (including the Prospectus Supplement referred to in Section 3(i) hereof) shall have been filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations within the prescribed time period (without reliance on Rule 424(b)(8)) and an Issuer Free Writing Prospectus containing the information in the Final Term Sheet shall have been filed with the Commission pursuant to Rule 433 within the prescribed time period, and prior to Closing Time the Company shall have provided evidence satisfactory to the Representatives of the timely filing or transmittal of each such document.
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(b) At Closing Time the Representatives shall have received:
(i) The favorable opinion, dated as of Closing Time, of Munger, Tolles & Olson LLP, counsel for the Company and the Guarantors, in form and substance satisfactory to counsel for the Underwriters, to the effect set forth in Exhibit A hereto.
(ii) The favorable opinion, dated as of Closing Time, William A. (Tony) Richelieu, Corporate Counsel and Assistant Corporate Secretary of the Company, in form and substance satisfactory to counsel for the Underwriters, to the effect set forth in Exhibit B hereto.
(iii) The favorable opinion, dated as of Closing Time, of Jones Day, counsel for the Underwriters, with respect to this Agreement, the Indenture, the Securities, the Registration Statement, the Prospectus and such other matters as the Underwriters may request.
(iv) In giving their opinions required by subsections (b)(i), (b)(ii) and (b)(iii), respectively, of this Section, Munger, Tolles & Olson LLP, William A. (Tony) Richelieu, and Jones Day shall each additionally state that no facts have come to their attention that have caused them to believe that
(A) the Registration Statement (which term shall be defined to include the Rule 430B Information) (except for financial statements and schedules and other financial and statistical data included or incorporated by reference therein or omitted therefrom and any Form T-1, as to which counsel need make no statement), at the time it first became effective, as of the date that the Companys most recent Annual Report on Form 10-K was filed with the Commission or at the new effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or
(B) the Prospectus (except for financial statements and schedules and other financial and statistical data included or incorporated by reference therein or omitted therefrom, as to which counsel need make no statement), at the Representation Date or at Closing Time, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or
(C) the General Disclosure Package (except for financial statements and schedules and other financial and statistical data included or incorporated by reference therein or omitted therefrom and any Form T-1, as to which counsel need make no statement), as of the Applicable Time, included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
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(v) The favorable opinions, dated as of the Closing Time, of local counsel for the Guarantors organized under the laws of the State of Nevada, in form and substance satisfactory to counsel for the Underwriters, to the effect set forth in Exhibit C hereto.
(c) At Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the Representatives shall have received a certificate of the President or a Vice President of the Company and of the chief financial or chief accounting officer of the Company, dated as of Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties of the Company and the Guarantors in Section 1 are true and correct with the same force and effect as though expressly made at and as of Closing Time, (iii) the Company and each of the Guarantors has complied with all agreements and satisfied all conditions set forth in this Agreement on its part to be performed or satisfied at or prior to Closing Time, (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and, to the best of such officers knowledge and information, no proceedings for that purpose have been initiated or threatened by the Commission, and (v) since the date of this Agreement, none of the ratings assigned by any nationally recognized statistical rating organization to any debt securities of the Company or any subsidiary of the Company has been lowered and no such rating agency has publicly announced that it has placed any debt securities of the Company or of any subsidiary of the Company on what is commonly termed a watch list for a possible downgrading. As used in this Section 5(c), the term Registration Statement means the Registration Statement excluding any amendments or supplements thereto after the date of this Agreement; the term General Disclosure Package means the General Disclosure Package excluding any amendments or supplements thereto after the Applicable Time; and Prospectus means the Prospectus excluding any amendments or supplements thereto after the date of this Agreement.
(d) (i) At the Applicable Time, the Representatives shall have received from Ernst & Young LLP a letter dated such date, in form and substance satisfactory to the Representatives, containing statements and information of the type ordinarily included in accountants comfort letters to underwriters with respect to the financial statements and financial information included and incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus (including, without limitation, any pro forma financial statements), and (ii) at the Closing Time, the Representatives shall have received from Ernst & Young LLP a letter to the effect that they reaffirm the statements made in the letter furnished pursuant to clause (i) of this subsection (d) of this Section, provided that such letter shall use a cut-off date not more than three business days prior to the Closing Time.
23
(e) At Closing Time, the Securities shall have a rating of at least B2 from Moodys Investors Service Inc., B+ from Standard & Poors and B+ from Fitch Ratings, and the Company shall have delivered to the Representatives a letter from each such rating agency or other evidence satisfactory to the Representatives, confirming that the Securities have such ratings.
(f) Prior to the Closing Time, if required by the 1933 Act, the 1933 Act Regulations, the 1939 Act or the 1939 Act Regulations, the Trustee shall have filed with the Commission an application for the purpose for determining the eligibility of the Trustee under the 1939 Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the 1939 Act and the Commission shall not have issued an order refusing to permit such application to become effective or taken any similar action.
(g) At Closing Time, counsel for the Underwriters shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Securities and Guarantees as herein contemplated and related proceedings, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company and the Guarantors in connection with the issuance and sale of the Securities and Guarantees as herein contemplated and in connection with the other transactions contemplated by this Agreement shall be satisfactory in form and substance to the Representatives and counsel for the Underwriters.
If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representatives by notice to the Company at any time at or prior to Closing Time, and such termination shall be without liability of any party to any other party except as provided in Section 4 hereof. Notwithstanding any such termination, the provisions of Sections 4, 6, 7 and 8 shall remain in effect.
SECTION 6. Indemnification .
(a) The Company and the Guarantors, jointly and severally, agree to indemnify and hold harmless each Underwriter, its directors and officers, its employees, and its respective affiliates and agents, in each case only for such affiliates and agents who have, or are alleged to have, participated in the distribution of Securities, and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereto (including, without limitation, the Rule 430B Information) or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package or the Prospectus (or any
24
amendment or supplement to any of the foregoing) or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including, subject to Section 6(c) hereof, the fees and disbursements of counsel chosen by the Representatives), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above;
provided , however , that the foregoing indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission (1) made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto) or any Preliminary Prospectus any Issuer Free Writing Prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement to any of the foregoing), it being understood that such information is limited to the Underwriter Information (as defined below) or (2) in the Form T-1.
(b) Each Underwriter, severally and not jointly agrees to indemnify and hold harmless the Company and its directors, each of its officers who signed the Registration Statement and its employees, each Guarantor and its directors, each of its officers who signed the Registration Statement and its employees, and each person who signed the Registration Statement on behalf of KB HOME Orlando LLC, a Delaware limited liability company ( KB Orlando ), KB HOME Tampa LLC, a Delaware limited liability company ( KB Tampa ), KB HOME Fort Myers LLC, a Delaware limited liability company ( KB Fort Myers ), and KB HOME Treasure Coast LLC, a Delaware limited liability company ( KB Treasure Coast ), and each person, if any, who controls the Company or any Guarantor within the meaning of Section 15 of the 1933 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement or any amendment thereto (including, without limitation, the Rule 430B Information) or any Preliminary Prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement to any of the foregoing) in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto) or such Preliminary Prospectus, such Issuer Free Writing Prospectus, the
25
General Disclosure Package or the Prospectus (or any amendment or supplement to any of the foregoing); provided that the Company acknowledges that the statements set forth under the caption Underwriting in the Statutory Prospectus and the Prospectus (i) in the table in the first paragraph and (ii) the seventh and eighth paragraphs (such statements, the Underwriter Information ) constitute the only such information furnished in writing by or on behalf of each Underwriter.
(c) Each indemnified party shall give written notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. An indemnifying party may participate at its own expense in the defense of any such action. In no event shall the indemnifying parties be liable for the fees and expenses of more than one counsel (in addition to any local counsel), separate from their own counsel (i) in the case of indemnity pursuant to Section 6(a), for the Underwriters, the directors and officers of any Underwriter, and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act and (ii) in the case of indemnity pursuant to Section 6(b), for the Company and its directors, each of its officers who signed the Registration Statement, and its employees, each Guarantor and its directors, each of its officers who signed the Registration Statement and its employees, and each person who signed the Registration Statement on behalf of KB Orlando, KB Tampa, KB Fort Myers, and KB Treasure Coast, and each person, if any, who controls the Company or any Guarantor within the meaning of Section 15 of the 1933 Act, in each case in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is a party and indemnity is provided hereunder, unless such settlement (x) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (y) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
SECTION 7. Contribution . In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Sections 6(a) or (b) is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms, the Company and the Guarantors, on the one hand, and the Underwriters, on the other hand, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and the Guarantors and one or more of the Underwriters, as incurred, in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by the Underwriters on the other from the offering of the Securities; provided, however, that in no case shall any Underwriters be responsible for any amount in excess of the purchase discount or commission applicable to the Securities purchased by such Underwriters hereunder. For purposes of this Section 7, the benefits received by the Company and the Guarantors shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by it, and
26
benefits received by the Underwriters shall be deemed to be equal to the total purchase discounts and commissions; provided , however , that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each director, officer, employee, and respective affiliate and agent, in each case only for such affiliates and agents who have, or are alleged to have, participated in the distribution of Securities, and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as such Underwriter, and each director of the Company or any Guarantor, each officer of the Company or any Guarantor who signed the Registration Statement, each employee of the Company or any Guarantor, and each person who signed the Registration Statement on behalf of KB Orlando, KB Tampa, KB Fort Myers, and KB Treasure Coast, and each person, if any, who controls the Company or any Guarantor within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as the Company or such Guarantor, as the case may be. The Underwriters respective obligations to contribute pursuant to this Section 7 are several in proportion to aggregate principal amount of Securities set forth opposite their respective names in Schedule B hereto and not joint. The obligations of the Company and the Guarantors to contribute pursuant to this Section 7 are joint and several.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery . All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers of the Company or any of the Guarantors or any of the Companys other subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any controlling person, or by or on behalf of the Company or any of the Guarantors, and shall survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement .
(a) The Representatives may terminate this Agreement, by notice to the Company, at any time at or prior to Closing Time (i) if there has been, since the date of this Agreement or since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States or any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representatives, impracticable to market the Securities or to enforce contracts for the sale of the Securities, or (iii) if trading in the securities of the Company has been suspended or materially limited by the Commission or a national securities exchange, or if trading generally on the New York Stock Exchange or the Nasdaq Global Select Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by either of said exchanges or by order of the Commission or any other governmental authority, or if a banking moratorium has been declared by either federal, New York or California authorities, or (iv) if the
27
rating assigned by any nationally recognized statistical rating organization to any debt securities of the Company or of any subsidiary of the Company shall have been lowered or if any such rating agency shall have publicly announced that it has placed any debt securities of the Company or any trust preferred securities, capital securities or similar securities of any subsidiary of the Company on what is commonly termed a watch list for a possible downgrading. As used in this Section 9(a), the term Registration Statement means the Registration Statement excluding any amendments or supplements thereto after the date of this Agreement; the term General Disclosure Package means the General Disclosure Package excluding any amendments or supplements thereto after the Applicable Time; and Prospectus means the Prospectus excluding any amendments or supplements thereto subsequent to the date of this Agreement.
(b) If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof. Notwithstanding any such termination, the provisions of Sections 4, 6, 7 and 8 shall remain in effect.
SECTION 10. Default by One or More of the Underwriters . If one or more of the Underwriters shall fail at Closing Time to purchase the Securities which it or they are obligated to purchase under this Agreement (the Defaulted Securities ), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters or any other underwriters to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have completed such arrangements within such 24 hour period, then:
(a) if the aggregate principal amount of the Defaulted Securities does not exceed 10% of the aggregate principal amount of Securities to be purchased at Closing Time, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the aggregate principal amount of the Defaulted Securities exceeds 10% of the aggregate principal amount of Securities to be purchased at Closing Time, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement, either the Representatives or the Company shall have the right to postpone the Closing Time for a period not exceeding seven days in order to effect any required changes in the General Disclosure Package, the Prospectus or in any other documents or arrangements. As used herein, the term Underwriter includes any person substituted for an Underwriter under this Section 10.
28
SECTION 11. Notices . All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representatives at c/o Citigroup Global Markets Inc., 388 Greenwich Street, New York, New York 10013, Attention: General Counsel (fax number: 212-816-7912); to c/o Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, New York 10010-3629, Attention: Transactions Advisory Group (fax number: 212-325-8278 and confirmation number: 212-538-0661); to c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated, One Bryant Park, New York, New York 10036 Attention: High Yield Legal Department (fax number: 917-267-7085); to c/o Deutsche Bank Securities Inc., 60 Wall Street, New York, New York 10005, Attention: High Yield Syndicate Desk, Third Floor, with a copy to the attention of the General Counsel, 36th Floor (fax number: 212-797-4561); and notices to the Company and the Guarantors shall be directed to them at 10990 Wilshire Boulevard, Los Angeles, California 90024, Attention: William A. (Tony) Richelieu, Corporate Counsel and Assistant Corporate Secretary (fax number: 310-231-4280).
SECTION 12. Parties . This Agreement shall inure to the benefit of and be binding upon the Underwriters, the Guarantors and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters, the Guarantors and the Company and their respective successors and the controlling persons and officers and directors and other persons referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters, the Company and the Guarantors and their respective successors and said controlling persons and officers and directors and other persons and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. No Advisory or Fiduciary Responsibility .
(a) Each of the Company and the Guarantors hereby (i) acknowledges that the purchase and sale of the Securities pursuant to this Agreement is an arms-length commercial transaction between the Company and the Guarantors, on the one hand, and the Underwriters and any affiliate through which any of them may be acting, on the other hand, (ii) acknowledges that the Underwriters are acting as principal and not as agent or fiduciary of the Company or the Guarantors, (iii) acknowledges that the Companys engagement of the Underwriters in connection with the offering and the process leading up to the offering is as independent contractors and not in any other capacity, (iv) agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether any of the Underwriters has advised or is currently advising the Company or any of the Guarantors on related or other matters); and (v) agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company or any Guarantor, in connection with such transaction or the process leading thereto. Each of the Company and the Guarantors further acknowledge that (i) the several Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that
29
differ from those of the Company and the Guarantors and the several Underwriters have no obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (ii) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and the Company and the Guarantors have consulted their own legal, accounting, regulatory and tax advisors to the extent they deemed appropriate.
SECTION 14. Submission to Jurisdiction; Waiver of Jury Trial. No proceeding related to this Agreement or the transactions contemplated hereby may be commenced, prosecuted or continued in any court other than the courts of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York, which courts shall have jurisdiction over the adjudication of such matters, and the Company and the Guarantors hereby jointly and severally consent to the jurisdiction of such courts and personal service with respect thereto. The Company and the Guarantors hereby jointly and severally waive all right to trial by jury in any proceeding (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement. The Company and the Guarantors jointly and severally agree that a final judgment in any such proceeding brought in any such court shall be conclusive and binding upon the Company and the Guarantors and may be enforced in any other courts to whose jurisdiction the Company or any of the Guarantors is or may be subject, by suit upon such judgment.
SECTION 15. Governing Law and Time . This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in said State. Unless otherwise set forth herein, specified times of day refer to New York City time.
[SIGNATURE PAGE FOLLOWS]
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If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company and the Guarantors a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the Underwriters, the Company and the Guarantors in accordance with its terms.
Very truly yours, | ||
KB HOME | ||
By: |
/s/ Jeff J. Kaminski |
|
Name: | Jeff J. Kaminski | |
Title: | Executive Vice President and Chief Financial Officer | |
KB HOME COASTAL INC. | ||
By: |
/s/ Thad Johnson |
|
Name: | Thad Johnson | |
Title: | Vice President and Treasurer | |
KB HOME GREATER LOS ANGELES INC. | ||
By: |
/s/ Thad Johnson |
|
Name: | Thad Johnson | |
Title: | Vice President and Treasurer | |
KB HOME SACRAMENTO INC. | ||
By: |
/s/ Thad Johnson |
|
Name: | Thad Johnson | |
Title: | Vice President and Treasurer | |
KB HOME SOUTH BAY INC. | ||
By: |
/s/ Thad Johnson |
|
Name: | Thad Johnson | |
Title: | Vice President and Treasurer |
KB HOME RENO INC. | ||
By: |
/s/ Thad Johnson |
|
Name: | Thad Johnson | |
Title: | Vice President and Treasurer | |
KB HOME LAS VEGAS INC. | ||
By: |
/s/ Thad Johnson |
|
Name: | Thad Johnson | |
Title: | Vice President and Treasurer | |
KB HOME NEVADA INC. | ||
By: |
/s/ Thad Johnson |
|
Name: | Thad Johnson | |
Title: | Vice President and Treasurer | |
KB HOME ORLANDO LLC | ||
KB HOME TAMPA LLC | ||
KB HOME FORT MYERS LLC | ||
KB HOME TREASURE COAST LLC | ||
By: | KB HOME Florida LLC, its sole member | |
By: |
/s/ William R. Hollinger |
|
Name: | William R. Hollinger | |
Title: | Vice President |
CONFIRMED AND ACCEPTED BY THE REPRESENTATIVES
as of the date first above written:
CITIGROUP GLOBAL MARKETS INC.
By: |
/s/ David Leland |
|
Name: | David Leland | |
Title: | Managing Director | |
CREDIT SUISSE SECURITIES (USA) LLC | ||
By: |
/s/ Katie Stein |
|
Name: | Katie Stein | |
Title: | Director | |
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED |
||
By: |
/s/ Michael Grimes |
|
Name: | Michael Grimes | |
Title: | Director | |
DEUTSCHE BANK SECURITIES INC. | ||
By: |
/s/ Chris Blum |
|
Name: | Chris Blum | |
Title: | Director | |
By: |
/s/ Chris White |
|
Name: | Chris White | |
Title: | Director |
On behalf of each the Underwriters
SCHEDULE A
List of Guarantors
1. | KB HOME Coastal Inc., a California corporation |
2. | KB HOME Greater Los Angeles Inc., a California corporation |
3. | KB HOME Orlando LLC, a Delaware limited liability company |
4. | KB HOME Sacramento Inc., a California corporation |
5. | KB HOME South Bay Inc., a California corporation |
6. | KB HOME Reno Inc., a Nevada corporation |
7. | KB HOME Las Vegas Inc., a Nevada corporation |
8. | KB HOME Nevada Inc., a Nevada corporation |
9. | KB HOME Tampa LLC, a Delaware limited liability company |
10. | KB HOME Fort Myers LLC, a Delaware limited liability company |
11. | KB HOME Treasure Coast LLC, a Delaware limited liability company |
Schedule A
SCHEDULE B
Names of Underwriters |
Aggregate
Principal Amount of Securities |
|||
Citigroup Global Markets Inc. |
$ | 126,000,000 | ||
Credit Suisse Securities (USA) LLC |
$ | 101,500,000 | ||
Merrill Lynch, Pierce, Fenner & Smith Incorporated |
$ | 43,750,000 | ||
Deutsche Bank Securities Inc. |
$ | 43,750,000 | ||
Wells Fargo Securities, LLC |
$ | 35,000,000 | ||
|
|
|||
Total |
$ | 350,000,000 | ||
|
|
Schedule B
SCHEDULE C
Pricing Term Sheet
ISSUER FREE WRITING PROSPECTUS
RELATING TO PRELIMINARY PROSPECTUS SUPPLEMENT
DATED FEBRUARY 1, 2012
FILED PURSUANT TO RULE 433
REGISTRATION NUMBER 333-176930
KB HOME
$350,000,000 8.00% Senior Notes due 2020
Final Pricing Term Sheet
February 1, 2012
This Final Pricing Term Sheet is qualified in its entirety by reference to the Preliminary Prospectus Supplement. The information in this Final Pricing Term Sheet supplements the Preliminary Prospectus Supplement and supersedes the information in the Preliminary Prospectus Supplement to the extent inconsistent with the information in the Preliminary Prospectus Supplement.
Issuer: | KB HOME | |
Securities: | 8.00% Senior Notes due 2020 (Notes) | |
Amount: | $350,000,000 | |
Coupon (Interest Rate): | 8.00% | |
Yield: | 8.25% | |
Spread to Benchmark Treasury: | 640 bps | |
Benchmark Treasury: | UST 1.849% due November 15, 2021 | |
Scheduled Maturity Date: | March 15, 2020 | |
Public Offering Price: | 98.523% | |
Gross Proceeds: | $344,830,500 | |
Underwriting Discount: | 1.625% of principal amount | |
Net Proceeds to Issuer before Estimated Expenses: | $339,143,000 | |
Net Proceeds to Issuer after Estimated Expenses: | $338,443,000 | |
Payment Dates: | March 15 and September 15 of each year, commencing on September 15, 2012 | |
Record Dates: | March 1 and September 1 of each year |
Redemption |
The Notes will be redeemable in whole at any time or in part from time to time, at the Issuers option, at a redemption price equal to the greater of:
(1) 100% of the principal amount of the Notes to be redeemed; or
(2) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being 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 (as defined in the Preliminary Prospectus Supplement), plus 50 basis points, plus in each case accrued and unpaid interest on the Notes being redeemed to the redemption date. |
|
Change of Control Triggering Event: | Upon a change of control triggering event, the Issuer will be required to make an offer to repurchase all outstanding Notes at a price in cash equal to 101% of the principal amount of the Notes, plus any accrued and unpaid interest to, but not including, the repurchase date. | |
CUSIP: | 48666K AQ2 | |
ISIN: | US48666KAQ22 | |
Distribution: | SEC Registered (Registration No. 333-176930) | |
Listing: | None | |
Trade Date: | February 1, 2012 | |
Settlement Date: | February 7, 2012 (T+4) | |
Joint Book-Running Managers: |
Citigroup Global Markets Inc. Credit Suisse Securities (USA) LLC Merrill Lynch, Pierce, Fenner & Smith Incorporated Deutsche Bank Securities Inc. |
|
Co-Manager: | Wells Fargo Securities, LLC |
Increased Offering Size and Tender Offers Amendment
The Issuer has increased the aggregate amount of Notes offered as described in the Preliminary Prospectus Supplement from $250.0 million to $350.0 million, resulting in net cash proceeds to the Issuer (after deducting underwriting discounts and estimated fees and expenses) of $338.4 million.
The Issuer also announced on February 1, 2012 that it has amended the previously announced tender offers for its 5-1/4% Senior Notes due 2014 (the 2014 Notes), 5-7/8% Senior Notes due 2015 and 6-1/4% Senior Notes due 2015 (together, the 2015 Notes) to increase the Maximum Tender Amounts (as defined in the Preliminary Prospectus Supplement) to $340.0 million, and extended the Early Tender Premium on the 2014 Notes to the Expiration Date. The Early Tender Premium for the 2015 Notes was not extended. The Issuer intends to use the net proceeds from the Note offering to purchase such increased amount of notes in the tender offers, if accepted, subject to the terms and conditions of the tender offers described in the Offer to Purchase dated January 19, 2012 and related Letter of Transmittal, as amended or supplemented. Any additional net proceeds to the Issuer may be used for general corporate purposes as described in the Preliminary Prospectus Supplement under Use of Proceeds.
The Issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Issuer has filed with the SEC for more complete information about the Issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, copies may be obtained by contacting Citigroup Global Markets Inc. at the following address: Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, New York 11220 or by telephone at 1-877-858-5407 or by e-mail at batprospectusdept@citi.com.
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
SCHEDULE D
Issuer General Use Free Writing Prospectuses
1. Pricing Term Sheet set forth on Schedule C
Exhibit 4.26
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
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: $350,000,000 | |||
CUSIP No. 48666K AQ2 | (or such other principal amount | |||
ISIN No. US48666KAQ22 | as is set forth on Schedule A hereto) |
KB Home
8.00% Senior Notes due 2020
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 FIFTY MILLION DOLLARS ($350,000,000) or such other principal amount as is set forth on Schedule A hereto on March 15, 2020, and to pay interest thereon from February 7, 2012, or from the most recent date to which interest has been paid or duly provided for, semiannually in arrears on March 15 and September 15 of each year (each, an Interest Payment Date), commencing September 15, 2012, and at Maturity, at the rate of 8.00% 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 March 1 or September 1 (whether or not a Business Day), as the case may be, immediately 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), the Second Supplemental Indenture dated as of June 30, 2004 (the Second Supplemental Indenture), the Third Supplemental Indenture dated as of May 1, 2006 (the Third Supplemental Indenture), the Fourth Supplemental Indenture dated as of November 9, 2006 (the Fourth Supplemental Indenture), the Fifth Supplemental Indenture dated as of August 17, 2007 (the Fifth Supplemental Indenture) and the Sixth Supplemental Indenture dated as of January 30, 2012 (the Sixth Supplemental Indenture; the Original Indenture, as amended and supplemented by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture and all other indentures supplemental thereto, is herein called the Indenture), each among the Company, the Guarantors and U.S. Bank National Association (successor in interest to 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 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 at any time or from time to time in part, at the Companys 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 50 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 |
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(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 Bankers 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 Bankers means, with respect to any Redemption Date for the Notes, (a) Citigroup Global Markets Inc. and its successors and (b) Credit Suisse Securities (USA) LLC and its successors or, if either such firm or any successor to such firm, as the case may be, is unwilling or unable to select the Comparable Treasury Issue, the other firm exclusively or, if neither such firm or any successor to such firms, as the case may be, is willing or able 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 each of (a) Citigroup Global Markets Inc. and its successors, (b) Credit Suisse Securities (USA) LLC and its successors, (c) Merrill Lynch, Pierce, Fenner & Smith Incorporated and its successors and (d) Deutsche Bank Securities Inc. and its successors ( provided in each case, 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).
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 March 15, 2020.
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.
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If a Change of Control Triggering Event occurs, unless the Company has exercised its option to redeem the Notes by notifying the Holders of Notes to that effect as described above, the Company will be required to make an offer (a Change of Control Offer) to each Holder of Notes to repurchase all or any part (equal to $2,000 or any integral multiples of $1,000 in excess thereof) of that Holders Notes on the terms set forth herein. In a Change of Control Offer, the Company will be required to offer payment in cash equal to 101% of the aggregate principal amount of the Notes repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased up to, but not including, the date of repurchase (a Change of Control Payment).Within 30 days following any Change of Control Triggering Event or, at the Companys option, prior to any Change of Control, but after public announcement of the transaction that constitutes or may constitute the Change of Control, notice will be given to Holders of the Notes describing the transaction that constitutes or may constitute the Change of Control Triggering Event and offering to repurchase the Notes on the date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date that notice is given or, if the notice is given prior to the Change of Control, no earlier than 30 days and no later than 60 days from the date on which the Change of Control Triggering Event occurs, other than in each case as may be required by law (a Change of Control Payment Date). The notice will, if mailed prior to the date of consummation of the Change of Control, state that the Change of Control Offer is conditioned on the Change of Control Triggering Event occurring on or prior to the applicable Change of Control Payment Date.
On each Change of Control Payment Date, the Company will, to the extent lawful, accept for payment all Notes or portions of Notes properly tendered and not withdrawn pursuant to the terms of the Change of Control Offer; deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and deliver or cause to be delivered to the Trustee the Notes properly tendered and accepted together with an Officers Certificate stating the aggregate principal amount of Notes or portions of Notes being repurchased. The Company will not be required to make a Change of Control Offer upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer in the manner, at the times and price and otherwise substantially in compliance with the requirements for an offer made by the Company and the third party promptly purchases all Notes properly tendered and not withdrawn under its offer. In addition, the Company will not repurchase any Notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default under the Indenture, other than a default in the payment of the Change of Control Payment upon a Change of Control Triggering Event.
To the extent that the provisions of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the Exchange Act), or any other securities laws and regulations that are applicable in connection with the repurchase of the Notes as a result of a Change of Control Triggering Event conflict with the Change of Control Offer provisions of the Notes, the Company may comply with those securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control Offer provisions of the Notes by virtue of any such conflict.
For purposes of the Change of Control Offer provisions of the Notes, the following terms will be applicable:
Change of Control means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the Companys assets and the assets of its subsidiaries, taken as a whole, to any person, other than to the Company or one of its subsidiaries;
(2) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any person becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Companys outstanding Voting Stock or other Voting Stock into which the Companys Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares;
(3) the Companys consolidation with, or the Companys merger with or into, any person, or any person consolidates with, or merges with or into, the Company, in either case, pursuant to a transaction in which any of the Companys outstanding Voting Stock or the Voting Stock of such other person is
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converted into or exchanged for cash, securities or other property, other than pursuant to a transaction in which shares of the Companys Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person or any direct or indirect parent company of the surviving person immediately after giving effect to such transaction, measured by voting power rather than number of shares;
(4) the first day on which a majority of the members of the Companys board of directors are not Continuing Directors; or
(5) the adoption by the Companys board of directors of a plan relating to the Companys liquidation or dissolution.
Notwithstanding the foregoing, a transaction (or series of related transactions) will not be deemed to involve a Change of Control under clauses (1) or (2) above if the Company becomes a direct or indirect wholly-owned subsidiary of a holding company and (a) the direct or indirect holders of a majority of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of a majority of the Companys Voting Stock immediately prior to that transaction or (b) the shares of the Companys Voting Stock outstanding immediately prior to such transaction are converted into or exchanged for a majority of the Voting Stock of such holding company immediately after giving effect to such transaction.
The term person is used in this definition as that term is used in Section 13(d)(3) of the Exchange Act.
Change of Control Triggering Event means the occurrence of both a Change of Control and a Rating Event.
Continuing Director means, as of any date of determination, any member of the Companys board of directors who (1) was a member of the Companys board of directors on the date the Notes were issued, (2) was nominated for election to the Companys board of directors with the approval of a committee of the board of directors consisting of a majority of independent Continuing Directors or (3) was nominated for election, elected or appointed to the Companys board of directors with the approval of a majority of the Continuing Directors who were members of the Companys board of directors at the time of such nomination, election or appointment (either by a specific vote or by approval of a proxy statement in which such member was named as a nominee for election as a director, without objection by such member to such nomination).
Investment Grade Rating means a rating equal to or higher than Baa3 (or the equivalent) by Moodys and BBB- (or the equivalent) by S&P, or, if applicable, the equivalent investment grade credit rating by any Substitute Rating Agency or Substitute Rating Agencies.
Moodys means Moodys Investors Service, Inc., or any successor thereto.
Rating Agencies means (1) each of Moodys and S&P and (2) if any of Moodys or S&P ceases to rate the applicable Notes or fails to make a rating of the applicable Notes publicly available for reasons outside of the Companys control, a Substitute Rating Agency in lieu thereof.
Rating Event means the rating on the Notes is lowered independently by each of the Rating Agencies and the Notes are rated below an Investment Grade Rating by each of the Rating Agencies, in each case on any day during the period (which period will be extended so long as either of the Rating Agencies has publicly announced that, as a result of the Change of Control, the rating of the Notes is under consideration for a possible downgrade) commencing 60 days prior to the first public announcement of the occurrence of a Change of Control or of the Companys intention to effect a Change of Control and ending 60 days following consummation of such Change of Control.
S&P means Standard & Poors Rating Services, a Standard & Poors Financial Services LLC business, or any successor thereto.
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Substitute Rating Agency means a nationally recognized statistical rating organization within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company (as certified by a resolution of the Companys Board of Directors) as a replacement agency for Moodys or S&P, or both of them, as the case may be.
Voting Stock means, with respect to any specified person (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date, the capital stock of that person that is at the time entitled to vote generally in the election of the board of directors of that person.
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 $2,000 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
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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.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by the manual or facsimile signatures of its duly authorized officers.
Dated: February 7, 2012
KB HOME | ||||||||||||
By: |
/s/ Thad Johnson |
By: |
/s/ Tony Richelieu |
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Name: | Thad Johnson | Name: | Tony Richelieu | |||||||||
Title: | Vice President and Treasurer | Title: | Assistant Corporate Secretary |
TRUSTEES CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. |
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U.S. BANK NATIONAL ASSOCIATION, as Trustee | ||
By: |
/s/ Muriel Shaw |
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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:
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
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Attorney |
to transfer said security on the books of the Company with full power of substitution in the premises.
Dated: |
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Signed: |
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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.
SCHEDULE A
The initial principal amount of this global Note is Three Hundred Fifty Million Dollars ($350,000,000). The following increases or decreases in the principal amount of this global Note have been made:
Date made |
Amount of increase in
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Amount of decrease in
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Principal amount of this
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Signature of authorized
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Exhibit 4.27
Officers Certificate and Guarantors Officers Certificate
Pursuant to Sections 201 and 301 of the Indenture
Dated: February 7, 2012
Jeff J. Kaminski, Executive Vice President and Chief Financial Officer, and Brian J. Woram, Executive Vice President, General Counsel and Corporate Secretary (together, the Company Officers), of KB Home, a Delaware corporation (the Company), and William R. Hollinger, Vice President, and Tony Richelieu, Secretary (together with Mr. Hollinger, the Guarantor Officers), of each of KB HOME South Bay Inc., a California corporation, KB HOME Coastal Inc., a California corporation, KB HOME Greater Los Angeles Inc., a California corporation, KB HOME Sacramento Inc., a California corporation, KB HOME Reno Inc., a Nevada corporation, KB HOME Las Vegas Inc., a Nevada corporation, KB HOME Nevada Inc., a Nevada corporation and KB HOME Florida LLC, a Delaware limited liability company (the Member), as sole member of KB HOME Orlando LLC, a Delaware limited liability company, KB HOME Tampa LLC, a Delaware limited liability company, KB HOME Fort Myers LLC, a Delaware limited liability company, and KB HOME Treasure Coast LLC, a Delaware limited liability company (the LLCs and collectively, excluding the Member, 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), the Second Supplemental Indenture dated as of June 30, 2004 (the Second Supplemental Indenture), the Third Supplemental Indenture dated as of May 1, 2006 (the Third Supplemental Indenture), the Fourth Supplemental Indenture dated as of November 9, 2006 (the Fourth Supplemental Indenture), the Fifth Supplemental Indenture dated as of August 17, 2007 (the Fifth Supplemental Indenture), and the Sixth Supplemental Indenture dated as of January 30, 2012 (the Sixth Supplemental Indenture; the Original Indenture, as amended and supplemented by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture and the Sixth Supplemental Indenture, is hereinafter called the Indenture), each among the Company, the Guarantors and U.S. Bank National Association, as successor to 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 limited liability company 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 Companys 8.00% Senior Notes due 2020 (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 pursuant to resolutions duly adopted by the Audit and Compliance Committee of the Board of Directors of the Company on January 9, 2012 and by the Company Officers pursuant to authority delegated to them by such resolutions (collectively, the Company Resolutions) and such terms are as set forth in Annex I hereto, and the issuance, form and terms of the Notes were approved and the guarantees of the Notes and all related Guaranteed Obligations (as defined in the Indenture) by the Guarantors were approved and confirmed by resolutions duly adopted by the Board of Directors of each Guarantor (other than the LLCs) and by the Member and the Company on January 30, 2012 (collectively, the Guarantors Resolutions) and by the Guarantor Officers pursuant to authority delegated to them by the Guarantors Resolutions,
(2) the form of certificate evidencing the Notes was established and approved 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 Audit and Compliance Committee of the Board of Directors of the Company and by each Guarantors Board of Directors (other than the LLCs) and by the Member and the Company, as the case may be, and are in full force and effect on the date hereof, are attached as exhibits 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.
By: |
/s/ JEFF J. KAMINSKI |
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Jeff J. Kaminski | ||
Executive Vice President and Chief Financial Officer |
By: |
/s/ BRIAN J. WORAM |
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Brian J. Woram | ||
Executive Vice President, General Counsel and Corporate Secretary |
By: |
/s/ WILLIAM R. HOLLINGER |
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William R. Hollinger | ||
Vice President of each of the Guarantors and of the Member (as such terms are defined in the foregoing Officers Certificate) |
By: |
/s/ TONY RICHELIEU |
|
Tony Richelieu | ||
Secretary of each of the Guarantors and of the Member (as such terms are defined in the foregoing Officers Certificate) |
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 8.00% Senior Notes due 2020 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 $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 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 one or more 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 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 Underwriters at a price of 96.898% of the principal amount thereof.
(5) The Stated Maturity of the Notes on which the principal thereof is due and payable shall be March 15, 2020.
(6) The principal of the Notes shall bear interest at the rate of 8.00% per annum from February 7, 2012 or from the most recent date to which interest has been paid or duly provided for, payable semiannually in arrears on March 15 and September 15 (each, an Interest Payment Date) of each year, commencing September 15, 2012, to the Persons in whose names such Notes (or one or more Predecessor Securities) are registered at the close of business on the March 1 or September 1, respectively, 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 in part from time to time, 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 the Officers Certificate and Guarantors Officers Certificate of which this Annex I constitutes a part.
(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 in the event of a Change of Control Triggering Event as specified in the form of Note which appears as Annex II to the Officers Certificate and Guarantors Officers Certificate of which this Annex I constitutes a part and 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 U.S. Bank National Association 100 Wall Street, 16th Floor, New York, NY 10005, Attn: Corporate Trust Services, in the Borough of Manhattan, The City of New York, as the Companys 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 $2,000 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 the Officers Certificate and Guarantors Officers Certificate of which this Annex I constitutes a part, 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 and all related Guaranteed Obligations 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 Company may, at its option, cause (x) any Subsidiary to become a Guarantor, whether or not such Subsidiary is a Domestic Significant Subsidiary, and (y) any Subsidiary to continue as a Guarantor, notwithstanding the fact that such Subsidiary does not or ceases to qualify as a Domestic Significant Subsidiary.
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: $350,000,000 | |
CUSIP No. 48666K AQ2 | (or such other principal amount | |
ISIN No. US48666KAQ22 | as is set forth on Schedule A hereto) |
KB Home
8.00% Senior Notes due 2020
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 FIFTY MILLION DOLLARS ($350,000,000) or such other principal amount as is set forth on Schedule A hereto on March 15, 2020, and to pay interest thereon from February 7, 2012, or from the most recent date to which interest has been paid or duly provided for, semiannually in arrears on March 15 and September 15 of each year (each, an Interest Payment Date), commencing September 15, 2012, and at Maturity, at the rate of 8.00% 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 March 1 or September 1 (whether or not a Business Day), as the case may be, immediately 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), the Second Supplemental Indenture dated as of June 30, 2004 (the Second Supplemental Indenture), the Third Supplemental Indenture dated as of May 1, 2006 (the Third Supplemental Indenture), the Fourth Supplemental Indenture dated as of November 9, 2006 (the Fourth Supplemental Indenture), the Fifth Supplemental Indenture dated as of August 17, 2007 (the Fifth Supplemental Indenture) and the Sixth Supplemental Indenture dated as of January 30, 2012 (the Sixth Supplemental Indenture; the Original Indenture, as amended and supplemented by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture and all other indentures supplemental thereto, is herein called the Indenture), each among the Company, the Guarantors and U.S. Bank National Association (successor in interest to 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 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 at any time or from time to time in part, at the Companys 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 50 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 |
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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 Bankers 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 Bankers means, with respect to any Redemption Date for the Notes, (a) Citigroup Global Markets Inc. and its successors and (b) Credit Suisse Securities (USA) LLC and its successors or, if either such firm or any successor to such firm, as the case may be, is unwilling or unable to select the Comparable Treasury Issue, the other firm exclusively or, if neither such firm or any successor to such firms, as the case may be, is willing or able 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 each of (a) Citigroup Global Markets Inc. and its successors, (b) Credit Suisse Securities (USA) LLC and its successors, (c) Merrill Lynch, Pierce, Fenner & Smith Incorporated and its successors and (d) Deutsche Bank Securities Inc. and its successors ( provided in each case, 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).
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 March 15, 2020.
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,
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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 a Change of Control Triggering Event occurs, unless the Company has exercised its option to redeem the Notes by notifying the Holders of Notes to that effect as described above, the Company will be required to make an offer (a Change of Control Offer) to each Holder of Notes to repurchase all or any part (equal to $2,000 or any integral multiples of $1,000 in excess thereof) of that Holders Notes on the terms set forth herein. In a Change of Control Offer, the Company will be required to offer payment in cash equal to 101% of the aggregate principal amount of the Notes repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased up to, but not including, the date of repurchase (a Change of Control Payment).Within 30 days following any Change of Control Triggering Event or, at the Companys option, prior to any Change of Control, but after public announcement of the transaction that constitutes or may constitute the Change of Control, notice will be given to Holders of the Notes describing the transaction that constitutes or may constitute the Change of Control Triggering Event and offering to repurchase the Notes on the date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date that notice is given or, if the notice is given prior to the Change of Control, no earlier than 30 days and no later than 60 days from the date on which the Change of Control Triggering Event occurs, other than in each case as may be required by law (a Change of Control Payment Date). The notice will, if mailed prior to the date of consummation of the Change of Control, state that the Change of Control Offer is conditioned on the Change of Control Triggering Event occurring on or prior to the applicable Change of Control Payment Date.
On each Change of Control Payment Date, the Company will, to the extent lawful, accept for payment all Notes or portions of Notes properly tendered and not withdrawn pursuant to the terms of the Change of Control Offer; deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and deliver or cause to be delivered to the Trustee the Notes properly tendered and accepted together with an Officers Certificate stating the aggregate principal amount of Notes or portions of Notes being repurchased. The Company will not be required to make a Change of Control Offer upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer in the manner, at the times and price and otherwise substantially in compliance with the requirements for an offer made by the Company and the third party promptly purchases all Notes properly tendered and not withdrawn under its offer. In addition, the Company will not repurchase any Notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default under the Indenture, other than a default in the payment of the Change of Control Payment upon a Change of Control Triggering Event.
To the extent that the provisions of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the Exchange Act), or any other securities laws and regulations that are applicable in connection with the repurchase of the Notes as a result of a Change of Control Triggering Event conflict with the Change of Control Offer provisions of the Notes, the Company may comply with those securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control Offer provisions of the Notes by virtue of any such conflict.
For purposes of the Change of Control Offer provisions of the Notes, the following terms will be applicable:
Change of Control means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the Companys assets and the assets of its subsidiaries, taken as a whole, to any person, other than to the Company or one of its subsidiaries;
(2) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any person becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Companys outstanding Voting Stock or other Voting Stock into which the Companys Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares;
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(3) the Companys consolidation with, or the Companys merger with or into, any person, or any person consolidates with, or merges with or into, the Company, in either case, pursuant to a transaction in which any of the Companys outstanding Voting Stock or the Voting Stock of such other person is converted into or exchanged for cash, securities or other property, other than pursuant to a transaction in which shares of the Companys Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person or any direct or indirect parent company of the surviving person immediately after giving effect to such transaction, measured by voting power rather than number of shares;
(4) the first day on which a majority of the members of the Companys board of directors are not Continuing Directors; or
(5) the adoption by the Companys board of directors of a plan relating to the Companys liquidation or dissolution.
Notwithstanding the foregoing, a transaction (or series of related transactions) will not be deemed to involve a Change of Control under clauses (1) or (2) above if the Company becomes a direct or indirect wholly-owned subsidiary of a holding company and (a) the direct or indirect holders of a majority of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of a majority of the Companys Voting Stock immediately prior to that transaction or (b) the shares of the Companys Voting Stock outstanding immediately prior to such transaction are converted into or exchanged for a majority of the Voting Stock of such holding company immediately after giving effect to such transaction.
The term person is used in this definition as that term is used in Section 13(d)(3) of the Exchange Act.
Change of Control Triggering Event means the occurrence of both a Change of Control and a Rating Event.
Continuing Director means, as of any date of determination, any member of the Companys board of directors who (1) was a member of the Companys board of directors on the date the Notes were issued, (2) was nominated for election to the Companys board of directors with the approval of a committee of the board of directors consisting of a majority of independent Continuing Directors or (3) was nominated for election, elected or appointed to the Companys board of directors with the approval of a majority of the Continuing Directors who were members of the Companys board of directors at the time of such nomination, election or appointment (either by a specific vote or by approval of a proxy statement in which such member was named as a nominee for election as a director, without objection by such member to such nomination).
Investment Grade Rating means a rating equal to or higher than Baa3 (or the equivalent) by Moodys and BBB- (or the equivalent) by S&P, or, if applicable, the equivalent investment grade credit rating by any Substitute Rating Agency or Substitute Rating Agencies.
Moodys means Moodys Investors Service, Inc., or any successor thereto.
Rating Agencies means (1) each of Moodys and S&P and (2) if any of Moodys or S&P ceases to rate the applicable Notes or fails to make a rating of the applicable Notes publicly available for reasons outside of the Companys control, a Substitute Rating Agency in lieu thereof.
Rating Event means the rating on the Notes is lowered independently by each of the Rating Agencies and the Notes are rated below an Investment Grade Rating by each of the Rating Agencies, in each case on any day during the period (which period will be extended so long as either of the Rating Agencies has publicly announced that, as a result of the Change of Control, the rating of the Notes is under consideration for a possible downgrade) commencing 60 days prior to the first public announcement of the occurrence of a Change of Control or of the Companys intention to effect a Change of Control and ending 60 days following consummation of such Change of Control.
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S&P means Standard & Poors Rating Services, a Standard & Poors Financial Services LLC business, or any successor thereto.
Substitute Rating Agency means a nationally recognized statistical rating organization within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company (as certified by a resolution of the Companys Board of Directors) as a replacement agency for Moodys or S&P, or both of them, as the case may be.
Voting Stock means, with respect to any specified person (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date, the capital stock of that person that is at the time entitled to vote generally in the election of the board of directors of that person.
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 $2,000 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.
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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.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by the manual or facsimile signatures of its duly authorized officers.
Dated: February 7, 2012
KB HOME | ||||||||||||
By: |
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By: |
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Name: | Thad Johnson | Name: | Tony Richelieu | |||||||||
Title: | Vice President and Treasurer | Title: | Assistant Corporate Secretary |
TRUSTEES CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION, as Trustee |
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By: |
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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:
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
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Attorney |
to transfer said security on the books of the Company with full power of substitution in the premises.
Dated: |
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Signed: |
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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.
SCHEDULE A
The initial principal amount of this global Note is Three Hundred Fifty Million Dollars ($350,000,000). The following increases or decreases in the principal amount of this global Note have been made:
Date made |
Amount of increase in
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Amount of decrease in
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Principal amount of this
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Signature of authorized
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Exhibit 5.3
MUNGER, TOLLES & OLSON LLP
355 SOUTH GRAND AVENUE
35 TH FLOOR
LOS ANGELES, CALIFORNIA 90017
(213) 683-9100
February 7, 2012
KB Home
10990 Wilshire Boulevard
Los Angeles, CA 90024
Re: | Registration Statement on Form S-3 (File No. 333-176930) |
Ladies and Gentlemen:
We have acted as counsel for KB Home, a Delaware corporation (the Company), in connection with the Companys Registration Statement on Form S-3, as amended by Post-Effective Amendment No. 1 thereto (with such amendment, the Registration Statement), filed with the Securities and Exchange Commission (the Commission) under the Securities Act of 1933, as amended (the Securities Act), for the registration of the offer and sale by the Company and the Guarantors (as defined below) from time to time of the securities listed therein.
This opinion is intended to update the opinions we previously delivered in connection with the initial filing of the Registration Statement and the filing of Post-Effective Amendment No. 1 thereto and is being delivered to you in connection with the proposed issuance of $350,000,000 in aggregate principal amount of the Companys 8.00% Senior Notes due 2020 (the Notes) offered pursuant to the Underwriting Agreement, dated February 1, 2012 (the Underwriting Agreement), among the Company, the Guarantors, Citigroup Global Markets Inc, Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Deutsche Bank Securities Inc.
KB Home
February 7, 2012
Page 2
We have also acted as counsel to KB HOME Sacramento Inc., KB HOME South Bay Inc., KB HOME Coastal Inc. and KB HOME Greater Los Angeles Inc., each a California corporation, KB HOME Tampa LLC, KB HOME Fort Myers LLC, KB HOME Treasure Coast LLC, and KB HOME Orlando LLC, each a Delaware limited liability company, and KB HOME Las Vegas Inc., KB HOME Nevada Inc. and KB HOME Reno Inc., each a Nevada corporation (collectively, the Guarantors) in connection with the registration on the Registration Statement of the sale by the Guarantors of their guarantees (the Guarantees) of the Notes.
The Notes and the Guarantees will be issued pursuant to the Indenture, dated as of January 28, 2004, as amended and supplemented on June 30, 2004, May 1, 2006, November 9, 2006, August 17, 2007 and January 30, 2012 (the Indenture), among the Company, the Guarantors and U.S. Bank National Association (successor in interest to SunTrust Bank), as Trustee (the Trustee), and the Officers Certificate and Guarantors Officers Certificate dated February 7, 2012, establishing the form and terms of the Notes.
We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary or advisable for purposes of this opinion. As to certain factual matters, we have relied, without independent verification, on statements and representations of officers and other representatives of the Company, the Guarantors and others. In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the originals of all documents submitted to us as copies. We have also assumed the due authorization, execution and delivery of the Indenture by, and the enforceability of the Indenture against, the Trustee and the due authentication of the Notes by the Trustee in the manner provided in the Indenture.
Based upon foregoing, we are of the opinion that when the Notes shall have been delivered against payment therefor pursuant to the terms of the Underwriting Agreement, the Notes will constitute the valid and binding obligation of the Company and the Guarantees will constitute the valid and binding obligations of the Guarantors, in each case subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors rights and to general equitable principles.
We render this opinion only with respect to, and express no opinion herein concerning, the application or effect of the laws of any jurisdiction other than the Federal laws of the United States, the laws of the State of New York, the laws of the State of California, the laws of the State of Nevada, the General Corporation Law of the State of Delaware and the Delaware Limited Liability Company Act, in each case as in effect as of this date. With respect to matters of Nevada law, we have, with your approval, relied upon the opinion, dated the date hereof, of Parsons Behle & Latimer, delivered to you, and our opinion is subject to the same assumptions, qualifications and limitations with respect to such matters as are contained in such opinion.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and the reference to our firm name and the discussion of our opinion under the caption Legal Matters in the Registration Statement and the related Prospectus. In giving such consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations thereunder.
Very truly yours, |
/s/ MUNGER, TOLLES & OLSON LLP |
Exhibit 5.4
50 West Liberty Street Suite 750 Reno, Nevada 89501 Telephone 775.323.1601 Facsimile 775.348.7250 |
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February 7, 2012
KB Home
10990 Wilshire Boulevard
Los Angeles, CA 90024
Re: | KB Home 8.00% Senior Notes due 2020 |
Ladies and Gentlemen:
We have acted as Nevada counsel at the request of KB Home, a Delaware corporation (the Company), on behalf of KB HOME Nevada Inc., KB HOME Reno Inc. and KB HOME Las Vegas Inc., each a Nevada corporation (collectively, the Nevada Guarantors), in connection with the Companys offering of $350,000,000 in aggregate principal amount of the Companys 8.00% Senior Notes due 2020 (the Securities), the offering of which was registered on its Registration Statement on Form S-3 (no. 333-176930), as amended (the Registration Statement). The offering is being made pursuant to the Underwriting Agreement dated February 1, 2012 (the Underwriting Agreement), by and among (i) the Company, (ii) the guarantors named therein and (iii) Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Deutsche Bank Securities Inc., as representatives of the several underwriters named in Schedule B thereto. The Securities are to be issued pursuant to an Indenture dated as of January 28, 2004 (the Base Indenture), as amended and supplemented by a First Supplemental Indenture dated as of January 28, 2004 (the First Supplemental Indenture), a Second Supplemental Indenture dated as of June 30, 2004 (the Second Supplemental Indenture), a Third Supplemental Indenture dated as of May 1, 2006 (the Third Supplemental Indenture), a Fourth Supplemental Indenture dated as of November 9, 2006 (the Fourth Supplemental Indenture), a Fifth Supplemental Indenture dated as of August 17, 2007 (the Fifth Supplemental Indenture) and a Sixth Supplemental Indenture dated as of January 30, 2012 (the Sixth Supplemental Indenture; the Base Indenture, as amended and supplemented by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture and the Sixth Supplemental Indenture, is hereinafter called the Indenture), each among the Company, the guarantors party thereto and U.S. Bank National Association (successor in interest to SunTrust Bank), as trustee, and will be guaranteed by each of the Nevada Guarantors pursuant to the Indenture.
February 7, 2012
Page Two
In connection with rendering this opinion, we have made such legal and factual examinations and inquiries and obtained such advice, assurances and certificates as we have deemed necessary or advisable under the circumstances in order to render this opinion including, but not limited to, an examination of originals or copies of the following:
(a) The Indenture;
(b) The Articles of Incorporation of Kaufman and Broad Reno, Inc. (now known as KB HOME Reno Inc.), filed with the Nevada Secretary of State on December 1, 1998; and Certificate of Amendment filed with the Nevada Secretary of States Office on August 31, 2004.
(c) The Code of Bylaws of Kaufman and Broad of Reno, Inc. (now known as KB HOME Reno Inc.) dated December 2, 1998;
(d) The Written Consent Resolution of the Directors of KB HOME Reno Inc. authorizing the execution, delivery and performance of its obligations under, and the consummation of the transactions contemplated by, the Indenture and the Underwriting Agreement, including the guaranty of the Companys obligations under the Indenture and the Securities;
(e) The Articles of Incorporation of KB HOME Las Vegas Inc. filed with the Nevada Secretary of State on February 11, 2010.
(f) The By-laws of KB HOME Las Vegas Inc., dated as of February 11, 2010;
(g) The Written Consent Resolution of the Directors of KB HOME Las Vegas Inc. authorizing the execution, delivery and performance of its obligations under, and the consummation of the transactions contemplated by, the Indenture and the Underwriting Agreement, including the guaranty of the Companys obligations under the Indenture and the Securities;
(h) The Articles of Incorporation of Kaufman and Broad of Nevada, Inc. (now known as KB HOME Nevada Inc.) filed with the Nevada Secretary of State on July 6, 1992, amended by Certificate of Amendment filed with the Nevada Secretary of State on January 17, 2001;
(i) The Code of Bylaws of Kaufman and Broad of Nevada, Inc. (now known as KB HOME Nevada Inc.) dated July 7, 1992, as amended July 1, 1997;
(j) The Written Consent Resolution of the Directors of KB HOME Nevada Inc. authorizing the execution, delivery and performance of its obligations under, and the consummation of the transactions contemplated by, the Indenture and the Underwriting Agreement, including the guaranty of the Companys obligations under the Indenture and the Securities;
February 7, 2012
Page Three
(k) The Secretarys Certificate of KB Home delivered to us in connection with the offering of the Securities;
(l) Certificates of Good Standing of the Nevada Guarantors dated as of January 30, 2012 issued by the Nevada Secretary of State;
(m) The Underwriting Agreement; and
(n) A photocopy of the executed global note representing the aggregate principal amount of all of the Securities.
In connection with this opinion, we have examined and relied upon the representations and warranties as to factual matters contained in and made pursuant to the Underwriting Agreement by the various parties and the Secretarys Certificate, including as to the fact of delivery of the Indenture and the Underwriting Agreement, and upon originals or copies certified to our satisfaction of such records, documents, certificates, opinions, memoranda, and other instruments as in our judgment are necessary or appropriate to enable us to render the opinion expressed below.
Our opinion is expressed only with respect to the laws of the State of Nevada.
On the basis of the foregoing, and subject to the General Qualifications set forth in Schedule A to this letter, the Assumptions set forth in Schedule B to this letter, and the Excluded Law and Legal Issues set forth in Schedule C to this letter, in reliance thereon, and with the foregoing qualifications, we are of the opinion that:
A. Each Nevada Guarantor is a corporation organized under the laws of the State of Nevada, has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Nevada and has power and authority as a corporation to enter into and perform its obligations under the Indenture.
B. The Indenture has been duly authorized, executed and delivered by each Nevada Guarantor.
Our opinions set forth above are limited to the matters expressly set forth in this opinion letter, and no opinion may be implied or inferred beyond the matters expressly stated. This opinion letter speaks only as to the law and facts in effect or existing as of the date hereof, and we undertake no obligation or responsibility to update or supplement our opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law which may hereafter occur.
February 7, 2012
Page Four
We hereby consent to the filing of this opinion letter as an exhibit to the Companys Current Report filed on Form 8-K or the Registration Statement. In giving such consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations thereunder. Munger, Tolles & Olson LLP may rely on this opinion letter as if it were an addressee hereof on this date for the sole purpose of rendering its opinion letter to the Company relating to the offering of the Securities, as filed as an exhibit to the Companys Current Report filed on Form 8-K or the Registration Statement.
Sincerely, |
/s/ Parsons Behle & Latimer |
PARSONS BEHLE & LATIMER |
SCHEDULE A
GENERAL QUALIFICATIONS
The opinions in the letter to which this Schedule is attached ( our letter ) are subject to the qualifications as set forth in this Schedule A .
1. Bankruptcy and Insolvency Exception . Each of our opinions of our letter is subject to the effect of bankruptcy, insolvency, reorganization, receivership, moratorium and other similar laws relating to creditors rights.
SCHEDULE B
ASSUMPTIONS
For purposes of our opinion letter, we have relied, without investigation, upon each of the following assumptions:
1. Each document submitted to us for review is accurate and complete, each such document that is an original is authentic, each such document that is a copy conforms to an authentic original, and all signatures on each such document are genuine;
2. Each certificate obtained from a governmental authority relied on by us is accurate, complete and authentic and all relevant official public records to which each such certificate relates are accurate and complete; and
3. Each of the Nevada Guarantors bylaws and all amendments to each such documents have been adopted in accordance with all applicable legal requirements.
SCHEDULE C
EXCLUDED LAW AND LEGAL ISSUES
None of the opinions or advice contained in our opinion letter covers or otherwise addresses any of the following laws, regulations or other governmental requirements or legal issues:
1. | Federal laws, including federal regulations; |
2. | Fraudulent transfer and fraudulent conveyance laws; and |
3. | Nevada State Securities (Blue Sky) laws. |