EXHIBIT 4.2
EXECUTION COPY
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KB HOME,
Company,
THE GUARANTORS PARTY HERETO,
Guarantors,
and
SUNTRUST BANK,
Trustee
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FIRST SUPPLEMENTAL INDENTURE
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Dated as of January 28, 2004
5 3/4% Senior Notes due 2014
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THIS FIRST SUPPLEMENTAL INDENTURE (this "First Supplemental Indenture")
is dated as of January 28, 2004 among KB HOME, a Delaware corporation (the
"Company"), the Guarantors (as defined in the Original Indenture referred to
below), and SUNTRUST BANK, a banking association duly organized and existing
under the laws of Georgia (the "Trustee").
RECITALS
WHEREAS the Company and the Guarantors have executed and delivered to
the Trustee an Indenture dated as of January 28, 2004 (the "Original Indenture;"
the Original Indenture, as amended and supplemented by this First Supplemental
Indenture, is hereinafter called, the "Indenture"), providing for the issuance
by the Company from time to time of its debt securities (the "Securities");
WHEREAS, Section 901 of the Original Indenture provides that the Company
may enter into a supplemental indenture to, among other things, establish the
form or terms of Securities of any series as permitted by Sections 201 and 301
of the Original Indenture and any deletions from or additions or changes to the
Original Indenture in connection therewith;
WHEREAS the Company and the Guarantors propose in and by this First
Supplemental Indenture to supplement and amend the Original Indenture in certain
respects to establish a series of Securities issued by the Company and
guaranteed by the Guarantors pursuant to the Indenture designated as the "5 3/4%
Senior Notes due 2014"; and
WHEREAS the Company and the Guarantors have requested that the Trustee
execute and deliver this First Supplemental Indenture and have certified that
all requirements necessary to make this First Supplemental Indenture a valid
instrument in accordance with its terms have been satisfied, and that the
execution and delivery of this First Supplemental Indenture have been duly
authorized in all respects.
NOW THEREFORE, for and in consideration of the premises and the purchase
of the Notes (as defined below) by the Holders (as defined in the Original
Indenture) thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes as follows:
SECTION 1. Definitions.
(a) Terms used herein and not defined herein have the meanings ascribed
to such terms in the Original Indenture.
(b) As used in this First Supplemental Indenture, the following terms
have the meanings specified below:
"Additional Interest" has the meaning set forth in the Initial
Registration Rights Agreement.
"Additional Notes" means any additional Notes which may be issued from
time to time pursuant to a "re-opening" of the series of Notes as contemplated
by Section 2(a).
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"Certificated Notes" has the meaning provided in Section 2(b).
"Closing Date" means January 28, 2004.
"DTC Legend" means, collectively, legends substantially in the form of
the legends appearing in the first and second paragraphs of Exhibit A hereto.
"Exchange Offer" has the meaning set forth in the Initial Registration
Rights Agreement.
"Exchange Notes" means Notes that are Exchange Securities (as defined in
the Initial Registration Rights Agreement).
"First Supplemental Indenture" means this First Supplemental Indenture
dated as of January 28, 2004 among the Company, the Guarantors and the Trustee,
as originally executed and delivered or, if amended or supplemented as provided
in the Indenture, as so amended or supplemented, and shall include the form and
terms of the Notes established hereby.
"Global Notes" has the meaning provided in Section 2(b). For purposes of
clarity, it is hereby confirmed that the Global Notes constitute global
Securities as referred to in the Original Indenture.
"Initial Registration Rights Agreement" means the Registration Rights
Agreement dated as of January 28, 2004 among the Company, the Guarantors and the
Initial Purchasers.
"Initial Purchasers" means the initial purchasers named in the Purchase
Agreement.
"Notes" means the series of Securities issued pursuant to the Indenture
designated as the 5 3/4% Senior Notes due 2014, including Notes initially issued
on the Closing Date, any Exchange Notes or Private Exchange Notes issued in
exchange for any other Notes, and any other Notes issued after the Closing Date
under the Indenture. For purposes of the Indenture, all Notes, including,
without limitation, Exchange Notes, Private Exchange Notes and Additional Notes,
shall vote together and otherwise constitute a single series of Securities under
the Indenture.
"Private Exchange Notes" means Notes that are Private Exchange
Securities (as defined in the Initial Registration Rights Agreement.
"Private Placement Legend" means a legend substantially in the form of
the legend appearing in the third paragraph of Exhibit A hereto.
"Purchase Agreement" means the Purchase Agreement dated January 28, 2004
among the Company, the Guarantors, Banc of America Securities LLC and the other
Initial Purchasers party thereto.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means either (1) the Initial
Registration Rights Agreement, or (2) with respect to any subsequent issuance of
Additional Notes in a transaction exempt from the registration requirements of
the Securities Act, the registration rights
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agreement, if any, entered into by the Company and the other parties thereto in
connection with such issuance, or both, as the context shall require.
"Resale Restriction Termination Date" has the meaning provided in
Section 3(a).
"Restricted Note" means any Note except for (i) an Exchange Note issued
pursuant to the Exchange Offer, (ii) a Note which has been sold or transferred
pursuant to an effective registration statement under the Securities Act, (iii)
a Note from which the Private Placement Legend has been removed in accordance
with the provisions of this First Supplemental Indenture, (iv) a Note which has
been transferred in accordance with Rule 144 and (v) a Note issued upon
registration of transfer of, or in exchange for, Notes which are not Restricted
Notes.
"Rule 144A" means Rule 144A under the Securities Act or any successor
thereto.
"Rule 144" means Rule 144 under the Securities Act or any successor
thereto.
"Transfer Certificate" means a Transfer Certificate substantially in the
form included in Exhibit A hereto.
SECTION 2. Creation of the Notes. Pursuant to Sections 201 and 301 of
the Original Indenture, there is hereby created a new series of Securities
designated as the "5 3/4% Senior Notes due 2014" and which are sometimes herein
referred to as the "Notes." The Notes (including, without limitation, the
Exchange Notes and Private Exchange Notes) shall be in substantially the form
set forth in Exhibit A hereto, with such changes therein as may be authorized by
any officer of the Company executing any Notes by manual or facsimile signature,
such approval to be conclusively evidenced by the execution thereof by such
officer. The Notes shall have the following terms:
(a) The aggregate principal amount of the Notes which may be
authenticated and delivered under the Indenture is limited to
$250,000,000, except for Notes authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Notes pursuant to Sections 304, 305, 306, 905 or 1107 of the Original
Indenture (including, without limitation, Exchange Notes or Private
Exchange Notes issued in exchange for other Notes), provided, however,
such series may be re-opened by the Company for the issuance of
Additional Notes, so long as any such Additional Notes have the same
form and terms (other than date of issuance and the date from which
interest thereon shall begin to accrue and except that the form of such
Additional Notes may refer to a different Registration Rights Agreement
than the Notes issued on the Closing Date and such Additional Notes, if
issued pursuant to a registration statement which is effective under the
Securities Act, need not bear the Private Placement Legend and may omit
the paragraph included in Exhibit A hereto which refers to the
Registration Rights Agreement), and carry the same right to receive
accrued and unpaid interest, as the Notes theretofore issued; provided,
however, that, notwithstanding the foregoing, such series may not be
reopened if the Company has effected defeasance or covenant defeasance
with respect to the Notes pursuant to Sections 402(2) or 402(3),
respectively, of the Original Indenture or has effected satisfaction and
discharge with respect to the Notes pursuant to Section 401 of the
Original Indenture; and provided, further, that no
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Additional Notes may be issued at a price that would cause such
Additional Notes to have "original issue discount" within the meaning of
Section 1273 of the Internal Revenue Code of 1986, as amended.
(b) The Notes are to be issuable only as Registered Securities
without Coupons. The Notes shall be issued in book-entry form and
represented by one or more permanent global Notes registered in the name
of a Depository or its nominee (the "Global Notes"), the initial
Depository for the Global Notes shall be The Depository Trust Company,
the depository arrangements shall be those employed by whoever shall be
the Depository with respect to the Global Notes from time to time, and
the Trustee shall be entitled to make any endorsements on any Global
Note to reflect any increases or decreases in the principal amount
thereof. Notwithstanding the foregoing, certificated Notes in definitive
form ("Certificated Notes") may be issued in exchange for Global Notes
under the circumstances contemplated by the seventh paragraph of Section
305 of the Original Indenture.
(c) The initial offering price of the Notes shall be 99.474% of
the principal amount thereof, plus accrued interest, if any, from
January 28, 2004.
(d) The Stated Maturity of the Notes on which the principal
thereof is due and payable shall be February 1, 2014.
(e) The principal of the Notes shall bear interest at the rate of
5 3/4% per annum from January 28, 2004 or from the most recent date to
which interest has been paid or duly provided for, payable semiannually
in arrears on February 1 and August 1 (each, an "Interest Payment Date")
of each year, commencing August 1, 2004, to the Persons in whose names
such Notes (or one or more Predecessor Securities) are registered at the
close of business on the January 15 or July 15 immediately prior to such
Interest Payment Dates (each, a "Regular Record Date") regardless of
whether such Regular Record Date is a Business Day. Interest on the
Notes will be computed on the basis of a 360-day year consisting of
twelve 30-day months. No Additional Amounts shall be payable on the
Notes.
(f) The Notes are redeemable, as a whole or from time to time in
part, at the option of the Company on the terms and subject to the
conditions set forth in the Original Indenture and in the form of Note
attached as Exhibit A to this First Supplemental Indenture.
(g) The Notes shall not be repayable or redeemable at the option
of the Holders prior to the Stated Maturity of the principal thereof
(except as provided in Article Five of the Original Indenture) and shall
not be subject to a sinking fund or analogous provision.
(h) The Borough of Manhattan, The City of New York is hereby
designated as a Place of Payment for the Notes.
(i) The Company hereby appoints the Trustee, acting through the
office of the Trustee located at c/o Computershare Trust Company of New
York, Wall ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
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▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in the Borough of
Manhattan, The City of New York, as the Company's Office or Agency for
the purposes specified in Section 1002 of the Original Indenture;
provided, however, subject to Section 1002 of the Original Indenture,
the Company may at any time remove the Trustee as its Office or Agency
in the Borough of Manhattan, The City of New York designated for such
purposes and may from time to time designate one or more other Offices
or Agencies for such purposes and may from time to time rescind such
designation, so long as the Company shall at all times maintain an
Office or Agency for such purposes in the Borough of Manhattan, The City
of New York.
(j) The Notes shall be issued in denominations of $1,000 and
integral multiples of $1,000 in excess thereof.
(k) The principal of, premium, if any, and interest on the Notes
shall be payable in Dollars.
(l) Sections 402(2) and 402(3) of the Original Indenture shall
apply to the Notes, provided that (i) the Company may effect defeasance
and covenant defeasance pursuant to Sections 402(2) and 402(3),
respectively, only with respect to all (and not less than all) of the
Outstanding Notes, and the only covenants that shall be subject to
covenant defeasance shall be those expressly referred to in Section
402(3) of the Original Indenture.
(m) Anything in the Indenture or the Notes to the contrary
notwithstanding, payments of the principal of and premium, if any, and
interest on the Global Notes shall be made by wire transfer.
(n) To the extent that any provision of the Indenture or the
Notes provides for the payment of interest on overdue principal of, or
premium, if any, or interest on, the Notes, then, to the extent
permitted by law, interest on such overdue principal, premium, if any,
and interest shall accrue at the rate of interest borne by the Notes. If
Additional Interest shall be payable on any Note for any day then, for
purposes of the immediately preceding sentence, the rate of interest
borne by such Note for such day shall be the sum of the original
interest rate on such Note plus the rate at which Additional Interest
shall accrue on such Note for such day.
(o) The Notes shall have such other terms and provisions as are
set forth in the form of Note attached as Exhibit A hereto, all of which
terms and provisions are incorporated by reference in and made a part of
this Supplemental Indenture as if set forth in full herein.
(p) As used in the Indenture with respect to the Notes and in the
certificates evidencing the Notes, all references to "premium" on the
Notes shall mean any amounts (other than accrued interest) payable upon
the redemption of any Notes in excess of 100% of the principal amount of
such Notes.
(q) As provided in the Registration Rights Agreement, Additional
Interest may, subject to the terms and conditions specified therein, be
payable on all or some of
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the Notes from time to time. Whenever in the Indenture (including,
without limitation, this First Supplemental Indenture) or the Notes
there is mentioned, in any context, the payment of the interest on the
Notes, such mention shall be deemed to include mention of the payment of
Additional Interest to the extent that, in such context, Additional
Interest is, was or would be payable in respect thereof pursuant to the
terms of the Registration Rights Agreement, and express mention of the
payment of Additional Interest in any provision of the Indenture
(including, without limitation, this First Supplemental Indenture) or in
the Notes shall not be construed as excluding Additional Interest in
those provisions of the Indenture (including, without limitation, this
First Supplemental Indenture) or the Notes where such express mention is
not made.
(r) The Notes shall have the benefit of the Guarantees and the
Guarantors hereby confirm that the principal of and premium, if any, and
interest (including, without limitation, any Additional Interest) on the
Notes shall be guaranteed pursuant to the Guarantees and otherwise in
accordance with and subject to the limitations set forth in Article
Sixteen of the Original Indenture.
(s) The Notes shall rank senior in right of payment to the
Company's 8-5/8% Senior Subordinated Notes due 2008, 7-3/4% Senior
Subordinated Notes due 2010 and 9-1/2% Senior Subordinated Notes due
2011 (the "Senior Subordinated Notes") and shall constitute "Senior
Indebtedness" as defined in the Indenture dated as of November 19, 1996,
as amended and supplemented by the First Supplemental Indenture thereto
dated as of December 18, 2003 (as so amended and supplemented, the
"Senior Subordinated Indenture"), by and between the Company, the
guarantors party thereto and Trustee, as successor trustee. Each
Guarantor's Guarantee of the Notes shall rank senior in right of payment
to its guarantee of the Senior Subordinated Notes and shall constitute
"Guarantor Senior Indebtedness" as defined in the Senior Subordinated
Indenture.
(t) Exchange Notes and Private Exchange Notes may from time to
time be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver
said Exchange Notes or Private Exchange Notes, as the case may be, upon
receipt and subsequent cancellation of an equal aggregate principal
amount of Notes (or beneficial interests in Global Notes) tendered for
exchange pursuant to the Exchange Offer (in the case of the Exchange
Notes) or as contemplated by the Registration Rights Agreement (in the
case of Private Exchange Notes), upon a Company Order without any
further action by the Company.
SECTION 3. Special Transfer Provisions.
(a) Legend on Restricted Notes. (1) Each Note (including Global
Notes and Private Exchange Notes) shall bear a Private Placement Legend until
such time as such Note is exchanged for an Exchange Note pursuant to the
Exchange Offer (it being understood that such Exchange Notes shall not bear the
Private Placement Legend) or sold or otherwise transferred pursuant to an
effective registration statement under the Securities Act or pursuant to the
exemption from the registration requirements under the Securities Act provided
by Rule 144 (if available); provided that upon the request made by the Holder of
any Note bearing a Private Placement Legend from and after the date of
expiration of the holding period applicable to sales
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of such Note pursuant to Rule 144(k) (the "Resale Restriction Termination
Date"), or from and after the date that such Note shall cease to be a Restricted
Note, the Company will execute and the Trustee will authenticate and deliver, in
exchange for such Note, a new Note in like aggregate principal amount but not
bearing the Private Placement Legend. In connection with any request to remove
the Private Placement Legend from a Note being transferred pursuant to Rule 144
prior to the Resale Restriction Termination Date, the Company may request that
the transferor deliver such legal opinions and other certificates as the Company
reasonably may require to confirm that such transfer is being made in accordance
with Rule 144.
(2) Any Note issued upon registration of transfer or
exchange of a Note which bears a Private Placement Legend shall, except as
otherwise permitted pursuant to this First Supplemental Indenture, also bear a
Private Placement Legend. Any Note issued upon registration of transfer or
exchange of a Note which does not bear a Private Placement Legend shall not bear
a Private Placement Legend.
(3) Except in the case of Exchange Notes issued pursuant
to the Exchange Offer, the Trustee shall not issue any Notes which do not bear
the Private Placement Legend until it has received an Officers' Certificate from
the Company directing it to do so.
(b) Book-Entry Provisions for Global Notes.
(1) General. Transfers of a Global Note shall be limited
as specified in the DTC Legend. Transfers and exchanges of beneficial interests
in a Global Note may be made in accordance with the rules and procedures of the
Depository, subject to the provisions of Section 3(c) to the extent applicable.
(2) Exchange of Global Notes for Certificated Notes.
Beneficial interests in Global Notes shall be exchangeable for Certificated
Notes only under the circumstances specified in the seventh paragraph of Section
305 of the Original Indenture. In the event of such an exchange, the Global
Notes shall be deemed to be surrendered to the Trustee for cancellation and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository, in exchange for its interest in
the Global Notes, an equal aggregate principal amount of Certificated Notes,
registered in the names provided by the Depository; provided that any
Certificated Notes issued in exchange for beneficial interests in Global Notes
that bear the Private Placement Legend also shall bear the Private Placement
Legend. In connection with each such exchange, the Trustee shall reflect on its
books and records and by endorsement on the grid attached to the applicable
Global Note the date and a decrease in the principal amount of such Global Note
equal to the principal amount of the beneficial interest so exchanged. Except as
provided in the seventh paragraph of Section 305 of the Original Indenture,
beneficial interests in Global Notes may not be exchanged for, or transferred to
Persons who will take delivery thereof in the form of, Certificated Notes.
(3) Transfers Among Global Notes. In connection with any
transfer of a beneficial interest in a Global Note to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note,
the Trustee shall reflect on its books and records and by endorsement on the
grid attached to such original Global Note the date and a decrease in the
principal amount of such first Global Note equal to the principal amount of the
beneficial interest
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to be so transferred, and shall also reflect on its books and records and on the
grid attached to such second Global Note the date and an increase in the
principal amount of such second Global Note equal to the principal amount of the
beneficial interest to be transferred; provided that any transfer of a
beneficial interest in a Global Note which is a Restricted Note to a Person who
will take delivery thereof in the form of a beneficial interest in a Global Note
which is not a Restricted Note shall be effected only pursuant to the Exchange
Offer or as otherwise permitted by this First Supplemental Indenture.
(4) Transfers of Certificated Notes for Global Notes. In
the event that Certificated Notes are issued under the circumstances specified
in Section 3(b)(2) above and, thereafter, the Company permits Certificated Notes
to be transferred to Persons who will take delivery thereof in the form of
beneficial interests in Global Notes (it being understood that the Company shall
not be required to permit any such transfer of a Certificated Note for
beneficial interests in Global Notes), then in connection with any transfer of a
Certificated Note to a Person who will take delivery thereof in the form of a
beneficial interest in a Global Note, the Trustee shall reflect on its books and
records and on the grid attached to such Global Note the date and an increase in
the principal amount of such Global Note equal to the principal amount of the
Certificated Note to be transferred, the Trustee shall cancel such Certificated
Note and, if the entire principal amount of such Certificated Note is not being
transferred, the Company shall execute, and the Trustee shall authenticate and
deliver, one or more Certificated Notes equal in principal amount to the
principal amount not being transferred, registered in the name of the
transferor.
(c) Transfer Restrictions.
(1) Transfers of Beneficial Interests in Global Notes.
Beneficial interests in Global Notes may be transferred to Persons who will take
delivery thereof in the form of beneficial interests in the same or other Global
Notes, and may be exchanged for interests in other Global Notes, in accordance
with the rules and procedures of the Depository; provided that, except for the
issuance of beneficial interests in Exchange Notes in exchange for Restricted
Notes pursuant to the Exchange Offer and as otherwise provided pursuant to this
First Supplemental Indenture, a beneficial interest in a Global Note which is a
Restricted Note may only be transferred to a Person who takes delivery thereof
in the form of a beneficial interest in a Global Note which bears the Private
Placement Legend and a beneficial interest in a Global Note which is a
Restricted Note may only be exchanged for an interest in a Global Note which
bears the Private Placement Legend.
(2) Transfers of Restricted Certificated Notes. In the
case of any proposed registration of transfer or exchange of a Certificated Note
which is a Restricted Note (including, if applicable, a transfer or exchange of
a Certificated Note for an interest in a Global Note), the Security Registrar
shall register the transfer or shall effect such exchange, as the case may be,
if the transferor has executed a Transfer Certificate and checked an appropriate
box on such Transfer Certificate and, in the case of a transfer pursuant to Rule
144A, the transferee has executed such Transfer Certificate, and the transferor
has delivered such Transfer Certificate to the Trustee.
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(3) Other Transfers. In the case of any transfer or
exchange of a Restricted Note the procedures and requirements for which are not
addressed in this Section 3(c), such transfer or exchange will be subject to
such procedures and requirements as may be reasonably prescribed by the Company
from time to time and which shall be consistent with the procedures and
requirements set forth in this Section 3(c). In addition, notwithstanding the
restrictions set forth in the Private Placement Legend, the Company may from
time to time permit the transfer of Notes and beneficial interests in Global
Notes to be made pursuant to exemptions from the registration requirements of
the Securities Act in addition to the exemption provided by Rule 144, but
subject to the Company having obtained such certifications, legal opinions or
other documents as it may require to confirm that such transfer is exempt from
such registration requirements.
(4) Exceptions to Transfer Restrictions. The restrictions
on transfer and other provisions set forth in this Section 3(c) and in the
Private Placement Legend shall not be applicable with respect to any Note
following the Resale Restriction Termination Date for such Note, and also shall
not be applicable in the case of the exchange of Notes for Exchange Notes
pursuant to the Exchange Offer or for Private Exchange Notes pursuant to the
Registration Rights Agreement.
(d) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such a Note shall be deemed to have acknowledged the
restrictions on transfer of such Note set forth in this First Supplemental
Indenture and in such legend and to have agreed that it will transfer such Note
only as provided in this First Supplemental Indenture. The Security Registrar
shall retain, in accordance with its customary procedures, copies of all
letters, notices and other written communications received pursuant to Section
3(c). The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
SECTION 4. Other Provisions.
(a) Amendment to Section 101 of the Original Indenture. Section 101 of
the Original Indenture is hereby amended, solely insofar as relates to the
Notes, by adding the following definition in appropriate alphabetical sequence:
"'First Supplemental Indenture" means the First Supplemental
Indenture dated as of January 28, 2004 among KB Home, the
Guarantors and the Trustee.'"
(b) Amendment to Section 309 of the Original Indenture. Section 309 of the
Original Indenture is hereby amended, solely insofar as it relates to the Notes,
by adding the following sentence to the end of such Section:
"Anything in this Indenture to the contrary notwithstanding, the
Company will cause any Notes (as defined in the First
Supplemental Indenture) which are redeemed, purchased or
otherwise acquired by the Company, any of the Guarantors or any
of the Company's Subsidiaries, and will use its best efforts to
cause any Notes which are redeemed, purchased or otherwise
acquired by any of
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the Company's other "affiliates" (as defined in Rule 144, or any
successor thereto, under the Securities Act), to be delivered to
the Trustee for cancellation and the Company will not resell or
otherwise transfer, will cause the Guarantors and its
Subsidiaries not to resell or otherwise transfer, and will use
its best efforts to cause its other "affiliates" not to resell or
otherwise transfer, any such Notes nor will the Company issue any
new Notes to replace any such Notes, and all Notes so delivered
to the Trustee shall be cancelled promptly by the Trustee."
(c) Amendment to Article Ten of the Original Indenture. Article
Ten of the Original Indenture is hereby amended, solely insofar as it relates to
the Notes, by adding the following Section 1013 to appear in appropriate
numerical order:
"Section 1013. Delivery of Rule 144A Information.
"If and so long as Company or any of the Guarantors is not
subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act (other than, in the case of a Guarantor, because
such Guarantor is exempt from such reporting requirements), the
Company will prepare and will furnish to any Holder of any Notes
(as defined in the First Supplemental Indenture), any beneficial
owner of an interest in a Global Note (as defined in the First
Supplemental Indenture), and any prospective purchaser or other
prospective transferee of any Notes designated by such Holder or
beneficial owner, promptly upon request and at the expense of
Company, the financial statements and other information specified
in Rule 144A(d)(4) (or any successor) under the Securities Act,
in each case to the extent necessary to permit the resale or
other transfer of Notes and the related Guarantees by such Holder
or beneficial owner to be made in compliance with Rule 144A (or
any successor) under the Securities Act."
(d) Amendment of Section 1601 of the Original Indenture. Section
1601 of the Original Indenture is hereby amended, solely insofar as relates to
the Notes, by deleting the first sentence of the first paragraph of such Section
1601 and inserting in its place the following sentence:
"Subject to the provisions of this Article Sixteen, in
recognition of the benefits that the issuance of the Securities
will confer upon the Company and the Guarantors and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each Guarantor hereby absolutely,
fully, unconditionally and irrevocably guarantees, jointly and
severally, to each Holder of any Securities and to each Holder of
any Coupons appertaining thereto and to the Trustee on behalf of
each such Holder prompt payment when due, whether at Stated
Maturity, by declaration of acceleration, upon redemption at the
option of the Company, upon repurchase or repayment at the option
of the Holder or otherwise, and at all times thereafter, of the
principal of and premium, if any, and interest (including,
without limitation, Additional Interest), if any, on, and all
Additional Amounts and other amounts, if any, payable with
respect to, the Securities (whether Outstanding on the date of
this Indenture or issued on or after
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such date) and any Coupons appertaining thereto (including,
without limitation, to the maximum extent permitted by law,
interest on any overdue principal, premium, if any, interest
(including, without limitation, Additional Interest), if any, or
Additional Amounts or other amounts, if any, in respect of the
Securities) and the due and punctual payment of any sinking fund
or analogous payments provided for pursuant to the terms of any
of the Securities or this Indenture, and of any and all other
existing and future indebtedness and liabilities of every kind,
nature and character, direct or indirect, absolute or contingent,
liquidated or unliquidated, voluntary or involuntary, of the
Company to the Holders of the Securities or any Coupons
appertaining thereto arising under this Indenture or the
Securities or such Coupons (collectively, the "Guaranteed
Obligations"), all in accordance with the respective terms of the
Securities and any Coupons appertaining thereto and this
Indenture."
SECTION 5. Governing Law; First Supplemental Indenture. This First
Supplemental Indenture shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made or instruments
entered into and, in each case, performed in said State. The terms and
conditions of this First Supplemental Indenture shall be, and be deemed to be,
part of the terms and conditions of the Indenture for any and all purposes.
Other than as amended and supplemented by this First Supplemental Indenture, the
Original Indenture is in all respects ratified and confirmed.
SECTION 6. Acceptance by Trustee. Subject to Section 9 hereof, the
Trustee hereby accepts this First Supplemental Indenture and agrees to perform
the same upon the terms and conditions set forth in the Original Indenture.
SECTION 7. Counterparts. This First Supplemental Indenture may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute but one
instrument.
SECTION 8. Headings. The headings of this First Supplemental Indenture
are for reference only and shall not limit or otherwise affect the meaning
hereof.
SECTION 9. Trustee Not Responsible for Recitals. The recitals herein
contained are made by the Company and the Guarantors and not by the Trustee, and
the Trustee assumes no responsibility for the correctness thereof. The Trustee
shall not be responsible in any manner whatsoever for or in respect of the
validity or sufficiency of this First Supplemental Indenture, except as to its
validity with respect to the Trustee.
SECTION 10. Separability. In case any one or more of the provisions
contained in this First Supplemental Indenture shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions hereof shall not, to the fullest extent permitted by law, in any way
be affected or impaired thereby.
[SIGNATURE PAGE FOLLOWS]
- 11 -
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed, all as of the day and year first above written.
COMPANY: KB HOME
By: /s/
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President, Treasury
and Risk Management
[SEAL]
Attest:
/s/
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President, Corporate Legal
Affairs and Corporate Secretary
GUARANTORS: KB HOME PHOENIX INC., an Arizona
corporation
By: /s/
---------------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and
Treasurer
[SEAL]
Attest:
/s/
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
- 12 -
KB HOME COASTAL INC., a California
corporation
By: /s/
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and
Treasurer
[SEAL]
Attest:
/s/
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
KB HOME NORTH BAY INC., a California
corporation
By: /s/
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and
Treasurer
[SEAL]
Attest:
/s/
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
- 13 -
KB HOME SOUTH BAY INC., a California
corporation
By: /s/
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
[SEAL]
Attest:
/s/
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
KB HOME GREATER LOS ANGELES INC., a
California corporation
By: /s/
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
[SEAL]
Attest:
/s/
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
- 14 -
KB HOME COLORADO INC., a Colorado
corporation
By: /s/
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
[SEAL]
Attest:
/s/
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
KB HOME NEVADA INC., a Nevada
corporation
By: /s/
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
[SEAL]
Attest:
/s/
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
- 15 -
KB HOME LONE STAR LP, a Texas
limited partnership
By: KBSA, Inc., a Texas corporation,
Its general partner
By: /s/
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
[SEAL]
Attest:
/s/
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
- 16 -
TRUSTEE: SUNTRUST BANK,
as Trustee
By: /s/
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Trust Officer
[SEAL]
Attest:
/s/
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
- 17 -
Exhibit A
[FORM OF NOTE]
[LEGEND FOR INCLUSION IN GLOBAL NOTE -- THIS NOTE IS A GLOBAL SECURITY REFERRED
TO IN THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE IS EXCHANGEABLE FOR NOTES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY 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 DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]
[LEGEND FOR INCLUSION IN GLOBAL NOTE -- UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[THE FOLLOWING LEGEND TO BE INCLUDED ON ALL NOTES (OTHER THAN EXCHANGE NOTES)
UNTIL, IN THE CASE OF ANY NOTE, THE HOLDING PERIOD APPLICABLE TO SUCH NOTE UNDER
RULE 144(k) OF THE SECURITIES ACT EXPIRES, SUCH NOTE IS RESOLD PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
OR SUCH LEGEND HAS BEEN REMOVED IN ACCORDANCE WITH OTHER PROVISIONS OF THE
INDENTURE-- THIS NOTE (OR ITS PREDECESSOR) AND THE GUARANTEES OF THIS NOTE WERE
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH TRANSFEREE OF THIS NOTE IS HEREBY NOTIFIED
THAT THE TRANSFEROR OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND AGREES FOR THE BENEFIT OF
THE COMPANY (AS SUCH TERM IS DEFINED IN THIS NOTE) THAT, PRIOR TO THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER RULE 144(k) (OR ANY
SUCCESSOR PROVISION) OF THE SECURITIES ACT (A) THIS NOTE MAY BE OFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO A QUALIFIED INSTITUTIONAL BUYER IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (OR
ANY SUCCESSOR THERETO) THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN EACH OF CASES
(I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY TRANSFEREE OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.]
A-1
[Principal Amount: $ _ [FOR INCLUSION IN GLOBAL
NOTES--(or such other principal amount as is set forth
on Schedule A hereto)]
No. [RA - _]
[R - _]
CUSIP No. [Rule 144A: 48666K AG 4]
[Exchange Note: 48666K AH 2]
ISIN No. [Rule 144A: US48666KAG40]
[Exchange Note: US48666KAH23]
KB Home
5 3/4% Senior Notes due 2014
KB Home, a Delaware corporation (hereinafter called the "Company", which term
includes any successor corporation under the Indenture referred to below), for
value received, hereby promises to pay to ___________________________, or
registered assigns, the principal sum of __________________ DOLLARS ($_______)
[FOR INCLUSION IN GLOBAL NOTES-- or such other principal amount as is set forth
on Schedule A hereto] on February 1, 2014, and to pay interest thereon from
January 28, 2004, or from the most recent date to which interest has been paid
or duly provided for, semiannually in arrears on February 1 and August 1 of each
year (each, an "Interest Payment Date"), commencing August 1, 2004, and at
Maturity, at the rate of 5 3/4% per annum, until the principal hereof is paid or
duly made available for payment. Interest on this Note shall be calculated on
the basis of a 360-day year consisting of twelve 30-day months. The interest so
payable and punctually paid or duly provided for on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
Note (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the
January 15 or July 15 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date shall
forthwith cease to be payable to the Person who was the Holder hereof on the
relevant Regular Record Date by virtue of having been such Holder, and may be
paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to the Holder of this Note not less than 10 days prior to
such Special Record Date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in such Indenture.
Payment of the principal of and premium, if any, and interest on this Note will
be made at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that, at the option of the
Company, interest may be paid by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or by
transfer to an account maintained by the payee with a bank located in the United
States; provided, further, that if this Note is a Global Note registered in the
name of a Depository or its nominee, then, anything in the Indenture or the
Notes to the contrary notwithstanding, payments of the principal of and premium,
if any, and interest on this Note shall be made by wire transfer.
This Note is one of a duly authorized issue of Securities of the Company (herein
called the "Notes") issued and to be issued in one or more series under an
Indenture dated as of January 28, 2004 (the "Original Indenture"), as amended
and supplemented by the First Supplemental Indenture dated as of January 28,
2004 (the "First Supplemental Indenture"; the Original Indenture, as amended and
supplemented by the First Supplemental Indenture and all other indentures
supplemental thereto, is herein called the "Indenture"), each among the Company,
the Guarantors and SunTrust Bank, as trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Guarantors, the Trustee and the Holders of the Notes, and
the terms upon which the Notes are, and are to be, authenticated and delivered.
This Note is one of the series designated on the face hereof, initially limited
(subject to exceptions provided in the Indenture and subject to the right of the
Company to reopen such series for issuance of additional
A-2
Securities of such series upon the terms and subject to the conditions specified
in the Indenture) in aggregate principal amount to $250,000,000.
Payments of principal of and premium, if any, and interest (including, without
limitation, Additional Interest) on the Notes are fully, irrevocably and
unconditionally guaranteed, jointly and severally, by the Guarantors on the
terms and subject to the limitations set forth in the Indenture. A Guarantor may
be released from its obligations under the Indenture and those obligations may
be reinstated, all on the terms and subject to the conditions set forth in the
Indenture.
The Notes may be redeemed, in whole or from time to time in part, at the
Company's option on any date (each, a "Redemption Date") at a redemption price
equal to the greater of: (a) 100% of the principal amount of the Notes to be
redeemed, and (b) the sum of the present values of the remaining scheduled
payments of principal and interest on the Notes to be redeemed (exclusive of
interest accrued to the applicable Redemption Date) discounted to such
Redemption Date on a semiannual basis, assuming a 360-day year consisting of
twelve 30-day months, at the Treasury Rate plus 30 basis points, plus, in the
case of both clause (a) and (b) above, accrued and unpaid interest on the
principal amount of the Notes being redeemed to such Redemption Date.
Notwithstanding the foregoing, installments of interest whose Stated Maturity is
on or prior to a Redemption Date will be payable to the Holders of the Notes (or
one or more Predecessor Securities) registered as such at the close of business
on the relevant Regular Record Dates according to their terms and the provisions
of the Indenture.
As used in this Note, the following terms have the meanings set forth
below:
"Treasury Rate" means, with respect to any Redemption Date for the
Notes: (a) the yield, under the heading that represents the average for the
immediately preceding week, appearing in the most recently published statistical
release designated "H.15(519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the Final Maturity Date for the Notes,
yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue shall be determined and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis, rounding
to the nearest month); or (b) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such Redemption Date. The Treasury
Rate shall be calculated on the third Business Day preceding the applicable
Redemption Date. As used in the immediately preceding sentence and in the
definition of "Reference Treasury Dealer Quotations" below, the term "Business
Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in The City of New York are authorized or
obligated by law, regulation or executive order to close.
"Comparable Treasury Issue" means, with respect to any Redemption Date
for the Notes, the United States Treasury security selected by the Independent
Investment Banker as having a maturity comparable to the remaining term of the
Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of the Notes to be
redeemed.
"Independent Investment Banker" means, with respect to any Redemption
Date for the Notes, Banc of America Securities LLC and its successors or, if
such firm or any successor to such firm, as the case may be, is unwilling or
unable to select the Comparable Treasury Issue, an independent investment
banking institution of national standing appointed by the Trustee after
consultation with the Company.
"Comparable Treasury Price" means, with respect to any Redemption Date
for the Notes: (a) the average of four Reference Treasury Dealer Quotations for
such Redemption Date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (b) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such quotations.
A-3
"Reference Treasury Dealer" means each of Banc of America Securities LLC
and its successors (provided, however, that if such firm or any such successor,
as the case may be, shall cease to be a primary U.S. Government securities
dealer in New York City (a "Primary Treasury Dealer"), the Trustee, after
consultation with the Company, will substitute therefor another Primary Treasury
Dealer) and three other Primary Treasury Dealers selected by the Trustee after
consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date for the Notes, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Redemption Date.
"Final Maturity Date" means February 1, 2014.
Notice of any redemption by the Company will be mailed at least 30 days
but not more than 60 days before any Redemption Date to each Holder of Notes to
be redeemed. If less than all the Notes are to be redeemed at the option of the
Company, the Trustee will select, in such manner as it deems fair and
appropriate, the Notes (or portions thereof) to be redeemed. Unless the Company
defaults in payment of the Redemption Price (including, without limitation,
interest, if any, accrued to the applicable Redemption Date), on and after the
applicable Redemption Date interest will cease to accrue on the Notes or
portions thereof called for redemption on such Redemption Date.
If an Event of Default with respect to the Notes shall occur and be continuing,
the principal of and accrued and unpaid interest on the Notes may be declared
due and payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantors and the rights of the Holders of the Securities of
each series issued under the Indenture at any time by the Company, the
Guarantors and the Trustee with the consent of the Holders of not less than a
majority in aggregate principal amount of the Securities at the time Outstanding
of each series affected thereby. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities of any series at the time Outstanding, on behalf of the Holders
of all Securities of such series, to waive compliance by the Company and the
Guarantors with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Notes issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and premium, if any, and interest on
this Note, at the time, place and rate, and in the coin or currency, herein and
in the Indenture prescribed.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Security Register
upon surrender of this Note for registration of transfer at the Office or Agency
of the Company maintained for the purpose in any place where the principal of
and interest on this Note are payable, duly endorsed, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by the Holder hereof or by his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Notes are issuable only in fully registered form without coupons in the
denominations of $1,000 and integral multiples of $1,000 in excess thereof. As
provided in the Indenture and subject to certain limitations set forth therein,
the Notes are exchangeable for a like aggregate principal amount of Notes of
authorized denominations as requested by the Holders surrendering the same.
A-4
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith, other than in
certain cases provided in the Indenture.
Prior to due presentment of this Note for registration of transfer, the Company,
the Guarantors, the Trustee and any agent of the Company, any Guarantor or the
Trustee may treat the Person in whose name this Note is registered as the owner
hereof for all purposes, whether or not this Note shall be overdue, and none of
the Company, the Guarantors or the Trustee nor any such agent shall be affected
by notice to the contrary.
[THIS PARAGRAPH TO BE OMITTED FROM EXCHANGE NOTES-- In addition to
rights provided to the Holders of the Notes under the Indenture, Holders of
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of January 28, 2004 among the Company, the Guarantors and Banc of
America Securities LLC and the other initial purchasers party thereto (as the
same may be amended or supplemented from time to time in accordance with its
terms, the "Registration Rights Agreement"). Pursuant to the Registration Rights
Agreement, the Holders of the Notes will, subject to certain exceptions and on
the terms and subject to the conditions specified in the Registration Rights
Agreement, have the right to exchange their Notes for a like principal amount of
Exchange Notes issued under the Indenture, which Exchange Notes will have been
registered under the Securities Act. The Holders of the Notes shall be entitled
to receive certain Additional Interest on the Notes in the event such exchange
offer is not consummated or upon certain other conditions, on the terms and
subject to the conditions and exceptions set forth in the Registration Rights
Agreement.]
The Indenture contains provisions whereby (i) the Company and the Guarantors may
be discharged from their obligations with respect to the Notes (subject to
certain exceptions) or (ii) the Company may be released from its obligations
under specified covenants and agreements in the Indenture, in each case if the
Company irrevocably deposits with the Trustee money and/or Government
Obligations sufficient to pay and discharge the entire indebtedness on all
Notes, and satisfies certain other conditions, all as more fully provided in the
Indenture. In addition, the Indenture shall cease to be of further effect
(subject to certain exceptions) with respect to the Notes when (1) either (A)
all Notes previously authenticated and delivered have been delivered (subject to
certain exceptions) to the Trustee for cancellation, or (B) all Notes (i) have
become due and payable or (ii) will become due and payable at their Stated
Maturity within one year or (iii) are to be called for redemption within one
year and, in the case of (i), (ii) or (iii) above, the Company has irrevocably
deposited with the Trustee money in an amount sufficient to pay and discharge
the entire indebtedness on all such Notes not theretofore delivered to the
Trustee for cancellation in respect of principal, premium, if any, and interest
to the date of such deposit (if such Notes have become due and payable) or to
the Stated Maturity or Redemption Date thereof, as the case may be, and (2) the
Company satisfies certain other conditions, all as more fully provided in the
Indenture.
This Note shall be governed by and construed in accordance with the laws of the
State of New York.
All terms used in this Note which are defined in the Indenture and not defined
herein shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee under the Indenture by the manual signature of one of its
authorized signatories, this Note shall not be entitled to any benefits under
the Indenture (including, without limitation, the Guarantees) or be valid or
obligatory for any purpose.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
A-5
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
and its corporate seal to be duly attested by the manual or facsimile signatures
of its duly authorized officers and has caused its corporate seal (or a
facsimile thereof) to be affixed or imprinted hereon.
Dated:
---------------------
[Seal] KB HOME
Attest: By:
------------------------------------- ----------------------------
Name: Name:
Title: Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities of the
series designated therein referred to
in the within-mentioned Indenture.
SUNTRUST BANK, as Trustee
By:
-----------------------------------------
Authorized Signatory
A-6
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM--as tenants in common
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship and
not as tenants in common
UNIF GIFT MIN ACT-- ___________Custodian_____________
(Cust) (Minor)
under the Uniform Gift to Minors Act
--------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
------------------------------------------------------
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
---------------------------------------------------------
---------------------------------------------------------
--------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
--------------------------------------------------------------------------------
the within security and all rights thereunder, hereby irrevocably constituting
and appointing
________________________________________________________________________Attorney
to transfer said security on the books of the Company with full power of
substitution in the premises.
Dated: Signed:
---------------------------------- --------------------------
Notice: The signature to this assignment must correspond with the name as it
appears upon the face of the within security in every particular,
without alteration or enlargement or any change whatever.
A-7
[FOR INCLUSION IN GLOBAL NOTES]
SCHEDULE A
The initial principal amount of this Global Note is ________ Dollars
($_______). The following increases or decreases in the principal amount of this
Global Note have been made:
================================================================================================
Amount of Amount of Principal amount
increase in decrease in of this Global Signature of
principal amount principal amount Note following authorized
of this Global of this Global such decrease or signatory of
Date made Note Note increase Trustee
================================================================================================
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A-8
[FOR INCLUSION IN NOTES BEARING THE PRIVATE PLACEMENT LEGEND]
TRANSFER CERTIFICATE
Re: KB HOME
5 3/4% Senior Notes due 2014 (the "Notes")
Capitalized terms used but not defined in this Certificate shall have the
meanings given to such terms in the Indenture (as defined in the Note to which
this Certificate is attached).
The undersigned (the "Transferor") has requested a transfer of this Note or a
portion hereof (in either such case, the "Specified Notes"). In connection with
such request, the Transferor does hereby certify that such transfer is being
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act") (as indicated by the applicable box
checked below), or the transfer does not require registration under the
Securities Act because (as indicated by the applicable box checked below):
(a)[ ] The Specified Notes are being transferred pursuant to an
effective registration statement under the Securities Act.
(b)[ ] The Specified Notes are being acquired for the Transferor's
own account, without transfer.
(c)[ ] The Specified Notes are being transferred in compliance with
Rule 144A ("Rule 144A") under the Securities Act to a Person the
Transferor reasonably believes is a "qualified institutional
buyer" (as defined in Rule 144A) (a "QIB") that is purchasing the
Specified Notes for its own account or for the account of another
QIB, in each case to whom notice has been given that the transfer
is being made in reliance on Rule 144A.
(d)[ ] The Specified Notes are being transferred pursuant to the
exemption from the registration requirements of the Securities
Act provided by Rule 144 (or any successor thereto) thereunder.
This Certificate and the statements contained herein are made for the benefit of
the Trustee and the Company.
------------------------------
(Insert Name of Transferor)
By:
---------------------------
Date:
---------------------
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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TO BE COMPLETED BY TRANSFEREE
IF (c) ABOVE IS CHECKED:
The undersigned transferee represents and warrants that (i) it is a QIB (as
defined above) and is aware that the Specified Notes (as defined above) are
being transferred in reliance on Rule 144A (as defined above), (ii) the
undersigned is acquiring the Specified Notes for its own account or for the
account of one or more other QIBs over which it exercises sole investment
discretion (in which latter case the undersigned has given notice to each such
account that the Specified Notes are being transferred in reliance on Rule 144A)
and (iii) this instrument has been executed on behalf of the undersigned
transferee by one of its executive officers. The undersigned transferee
acknowledges and agrees that the Specified Notes and the Guarantees thereof have
not been registered under the Securities Act (as defined above), and may not be
transferred except in accordance with the resale and other transfer restrictions
set forth in the legend on the face thereof and in the Indenture pursuant to
which the Notes were issued.
Dated:
------------------------------- ------------------------------------
(Insert Name of Transferee)
By:
---------------------------------
Executive Officer
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