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EXHIBIT 2.1
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AMERICAN HOMESTAR CORPORATION
$61,000,000
8.32% Senior Notes due July 10, 2007
______________
NOTE PURCHASE AGREEMENT
______________
Dated as of July 10, 1997
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. AUTHORIZATION OF NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. SALE AND PURCHASE OF NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 4. CONDITIONS TO CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4.1. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4.2. Performance; No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4.3. Compliance Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4.4. Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4.5. Purchase Permitted By Applicable Law, etc . . . . . . . . . . . . . . . . . . . . 3
Section 4.6. Sale of Other Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4.7. Payment of Special Counsel Fees . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4.8. Private Placement Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4.9. Changes in Corporate Structure . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.10. Proceedings and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.11. NAIC Rating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . 4
Section 5.1. Organization; Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 5.2. Authorization, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 5.3. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates . . . . . . . . 5
Section 5.5. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5.6. Compliance with Laws, Other Instruments, Etc. . . . . . . . . . . . . . . . . . . 6
Section 5.7. Governmental Authorizations, etc. . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders . . . . . . . . . . . . 6
Section 5.9. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.10. Title to Property; Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.11. Licenses, Permits, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.12. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.13. Private Offering by the Company . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.14. Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.15. Existing Material Indebtedness; Future Liens . . . . . . . . . . . . . . . . . . 8
Section 5.16. Foreign Assets Control Regulations, etc. . . . . . . . . . . . . . . . . . . . 9
Section 5.17. Status under Certain Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.18. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 6. REPRESENTATIONS OF THE PURCHASER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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Section 6.1. Purchase for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.2. Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 7. INFORMATION AS TO COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.1. Financial and Business Information . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.2. Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.3. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 8. PREPAYMENT OF THE NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8.1. Required Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8.2. Optional Prepayments with Make-Whole Amount . . . . . . . . . . . . . . . . . . . 15
Section 8.3. Allocation of Partial Prepayments . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 8.4. Maturity; Surrender, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 8.5. Purchase of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 8.6. Make-Whole Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 9. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 9.1. Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 9.2. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 9.3. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 9.4. Payment of Taxes and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 9.5. Corporate Existence, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 9.6. Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 10. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 10.1. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 10.2. Merger, Consolidation, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 10.3. Sale of Assets, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 10.4. Limitations on Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 10.5. Fixed Charges Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 10.6. Net Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 10.7. Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 10.8. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 10.9. Restricted Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 10.10. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 10.11. Restrictions on Dividends of Subsidiaries, Etc. . . . . . . . . . . . . . . . . . 23
SECTION 11. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 12. REMEDIES ON DEFAULT, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 12.1. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 12.2. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 12.3. Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. . . . . . . . . . . . . . . . 27
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SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. . . . . . . . . . . . . . . . . . . . . . . 27
Section 13.1. Registration of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 13.2. Transfer and Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 13.3. Replacement of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 14. PAYMENTS ON NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 14.1. Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 14.2. Home Office Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 15. EXPENSES, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 15.1. Transaction Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 15.2. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. . . . . . . . . . . . . . . 29
SECTION 17. AMENDMENT AND WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 17.1. Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 17.2. Solicitation of Holders of Notes . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 17.3. Binding Effect, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 17.4. Notes Held by Company, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 18. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 19. REPRODUCTION OF DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 20. CONFIDENTIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 21. SUBSTITUTION OF PURCHASER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 22. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 22.1. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 22.2. Payments Due on Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 22.3. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 22.4. Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 22.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 22.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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SCHEDULE A - INFORMATION RELATING TO PURCHASERS
SCHEDULE B - DEFINED TERMS
SCHEDULE 4.9 - Changes in Corporate Structure
SCHEDULE 5.4 - Subsidiaries of the Company and Ownership of Subsidiary Stock,
Affiliates and Directors and Senior Officers
SCHEDULE 5.5 - Financial Statements
SCHEDULE 5.9 - Taxes
SCHEDULE 5.14 - Use of Proceeds
SCHEDULE 5.15 - Existing Indebtedness
SCHEDULE 5.18 - Environmental Matters
EXHIBIT 1 - Form of 8.32% Senior Note due July 10, 2007
EXHIBIT 4.4(a) - Form of Opinion of Special Counsel for the Company
EXHIBIT 4.4(b) - Form of Opinion of Special Counsel for the Purchasers
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AMERICAN HOMESTAR CORPORATION
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
8.32% Senior Notes due July 10, 2007
Dated as of July 10, 1997
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
AMERICAN HOMESTAR CORPORATION, a Texas corporation (the "Company"),
agrees with you as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $61,000,000 aggregate
principal amount of its 8.32% Senior Notes due July 10, 2007 (the "Notes", such
term to include any such notes issued in substitution therefor pursuant to
Section 13 of this Agreement or the Other Agreements (as hereinafter defined)).
The Notes shall be substantially in the form set out in Exhibit 1, with such
changes therefrom, if any, as may be approved by you and the Company. Certain
capitalized terms used in this Agreement are defined in Schedule B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
The Company and you acknowledge and agree that the interest rate or
other forbearance payable on the Notes shall not exceed the highest rate
permitted under applicable law. All agreements between you and the Company are
hereby limited by the provisions of this paragraph which shall override and
control all such agreements, whether now existing or hereafter arising and
whether written or oral. In no way, nor in any event or contingency (including
but not limited to prepayment, default, demand for payment, or acceleration of
the maturity of any obligation), shall the interest taken, reserved, contracted
for, charged or received under the Notes or otherwise, exceed the maximum
nonusurious amount permissible under applicable law. If, from any possible
construction of any document, interest would otherwise be payable in excess of
the maximum nonusurious amount, any such construction shall be subject to the
provisions of this paragraph and such document shall be automatically reformed
and the interest payable shall be automatically reduced to the maximum
nonusurious amount permitted under applicable law, without the necessity of
execution of any amendment or new document. If the holder of a Note shall ever
receive anything of value which is characterized as interest under applicable
law and which would apart from this provision be in excess of the maximum
lawful amount, an amount equal to the amount which would have been excessive
interest shall, without penalty, be applied to the reduction of the principal
amount owing on the indebtedness evidenced hereby in the inverse order of its
maturity and not to the payment of interest, or refunded to the Company if and
to the extent such amount which would have been excessive exceeds such unpaid
principal. All interest paid or agreed to be paid to the holder of a Note
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full stated term (including any renewal or
extension) of such indebtedness
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American Homestar Corporation Note Purchase Agreement
so that the amount of interest on account of such indebtedness does not exceed
the maximum nonusurious amount permitted by applicable law.
SECTION 2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes in the principal amount specified opposite
your name in Schedule A at the purchase price of 100% of the principal amount
thereof. Contemporaneously with entering into this Agreement, the Company is
entering into separate Note Purchase Agreements (the "Other Agreements")
identical with this Agreement with each of the other purchasers named in
Schedule A (the "Other Purchasers"), providing for the sale at such Closing to
each of the Other Purchasers of Notes in the principal amount specified
opposite its name in Schedule A. Your obligation hereunder, and the
obligations of the Other Purchasers under the Other Agreements, are several and
not joint obligations, and you shall have no obligation under any Other
Agreement and no liability to any Person for the performance or nonperformance
by any Other Purchaser thereunder.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. Chicago time, at a closing (the
"Closing") on July 10, 1997 or on such other Business Day thereafter as may be
agreed upon by the Company and you and the Other Purchasers. At the Closing
the Company will deliver to you the Notes to be purchased by you in the form of
a single Note (or such greater number of Notes in denominations of at least
$100,000 as you may request) dated the date of the Closing and registered in
your name (or in the name of your nominee), against delivery by you to the
Company or its order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available funds for the
account of Associates Commercial Corporation for the Company to account number
▇▇▇▇▇▇▇ at The First National Bank of Chicago, ABA #▇▇▇▇▇▇▇▇▇. If at the
Closing the Company shall fail to tender such Notes to you as provided above in
this Section 3, or any of the conditions specified in Section 4 shall not have
been fulfilled to your satisfaction, you shall, at your election, be relieved
of all further obligations under this Agreement, without thereby waiving any
rights you may have by reason of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
Section 4.1. Representations and Warranties. The representations
and warranties of the Company in this Agreement shall be correct in all
material respects when made and at the time of the Closing.
Section 4.2. Performance; No Default. The Company shall have
performed and complied in all material respects with all agreements and
conditions contained in this Agreement required to be performed or complied
with by it prior to or at the Closing, and after giving effect to the issue and
sale of the Notes (and the application of the proceeds thereof as contemplated
by Schedule 5.14), no
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American Homestar Corporation Note Purchase Agreement
Default or Event of Default shall have occurred and be continuing. Neither the
Company nor any Subsidiary shall have entered into any transaction since the
date of the Memorandum that would have been prohibited by Sections 10.1, 10.2
or 10.3 hereof had such Sections applied since such date.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to
you an Officer's Certificate, dated the date of the Closing, certifying that
the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to
you a certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes and the Agreements.
Section 4.4. Opinions of Counsel. You shall have received opinions
in form and substance satisfactory to you, dated the date of the Closing (a)
from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ L.L.P. counsel for the Company, covering the matters set
forth in Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably request
(and the Company hereby instructs its counsel to deliver such opinion to you)
and (b) from ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, your special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b) and
covering such other matters incident to such transactions as you may reasonably
request.
Section 4.5. Purchase Permitted By Applicable Law, etc. On the
date of the Closing your purchase of Notes shall (a) be permitted by the laws
and regulations of each jurisdiction to which you are subject, without recourse
to provisions (such as Section 1405(a)(8) of the New York Insurance Law)
permitting limited investments by insurance companies without restriction as to
the character of the particular investment, (b) not violate any applicable law
or regulation (including, without limitation, Regulation G, T or X of the Board
of Governors of the Federal Reserve System) and (c) not subject you to any tax,
penalty or liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If requested by
you, you shall have received an Officer's Certificate certifying as to such
matters of fact as you may reasonably specify to enable you to determine
whether such purchase is so permitted.
Section 4.6. Sale of Other Notes. Contemporaneously with the
Closing, the Company shall sell to the Other Purchasers, and the Other
Purchasers shall purchase, the Notes to be purchased by them at the Closing as
specified in Schedule A.
Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the
Closing the reasonable fees, charges and disbursements of your special counsel
referred to in Section 4.4 to the extent reflected in a statement of such
counsel rendered to the Company at least one Business Day prior to the Closing.
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American Homestar Corporation Note Purchase Agreement
Section 4.8. Private Placement Number. A Private Placement Number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Notes.
Section 4.9. Changes in Corporate Structure. Except as specified
in Schedule 4.9, the Company shall not have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and shall not have
succeeded to all or any substantial part of the liabilities of any other
entity, at any time following the date of the most recent financial statements
referred to in Schedule 5.5.
Section 4.10. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or other copies
of such documents as you or they may reasonably request.
Section 4.11. NAIC Rating. A rating of "2" or better issued by the
Securities Valuation Office of the National Association of Insurance
Commissioners shall have been obtained for the Notes and you shall have
received evidence thereof reasonably satisfactory to you.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which
the failure to be so qualified or in good standing could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
The Company has the corporate power and authority to own or hold under lease
the properties it purports to own or hold under lease, to transact the business
it transacts and proposes to transact, to execute and deliver this Agreement
and the Other Agreements and the Notes and to perform the provisions hereof and
thereof.
Section 5.2. Authorization, Etc. This Agreement, the Other
Agreements and the Notes have been duly authorized by all necessary corporate
action on the part of the Company, and this Agreement constitutes, and upon
execution and delivery thereof each Note will constitute, a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
Section 5.3. Disclosure. The Company, through its agent, ▇▇▇▇▇▇,
Read & Co. Inc., has delivered to you and each Other Purchaser a copy of a
Confidential Private Placement Memorandum,
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American Homestar Corporation Note Purchase Agreement
dated April 1997 (the "Memorandum"), relating to the transactions contemplated
hereby. The Memorandum fairly describes, in all material respects, the general
nature of the business and principal properties of the Company and its
Subsidiaries. This Agreement, the Memorandum, the documents, certificates or
other writings delivered to you by or on behalf of the Company in connection
with the transactions contemplated hereby and the financial statements listed
in Schedule 5.5, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which
they were made. Since May 31, 1996, there has been no change in the financial
condition, operations, business, properties or prospects of the Company or any
Subsidiary except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact
known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Memorandum or in
the other documents, certificates and other writings delivered to you by or on
behalf of the Company specifically for use in connection with the transactions
contemplated hereby.
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its organization, and
the percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii) of
the Company's Affiliates, other than Subsidiaries, and (iii) of the Company's
directors and senior officers.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and clear
of any Lien (except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a
foreign corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or other power
and authority to own or hold under lease the properties it purports to own or
hold under lease and to transact the business it transacts and proposes to
transact.
(d) No Subsidiary is a party to, or otherwise subject to, any
legal restriction or any agreement (other than this Agreement, the agreements
listed on Schedule 5.4 and customary limitations imposed by corporate law
statutes) restricting the ability of such Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to the Company or
any of its Subsidiaries that owns outstanding shares of capital stock or
similar equity interests of such Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to
each Purchaser copies of the financial statements of the Company and its
Subsidiaries listed on Schedule 5.5. All of said
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American Homestar Corporation Note Purchase Agreement
financial statements (including in each case the related schedules and notes)
fairly present the consolidated financial position of the Company and its
Subsidiaries as of the respective dates specified in such Schedule and the
consolidated results of their operations and cash flows for the respective
periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in the
notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments).
Section 5.6. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Company of this Agreement and the
Notes will not (a) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by- laws, or any
other agreement or instrument to which the Company or any Subsidiary is bound
or by which the Company or any Subsidiary or any of their respective properties
may be bound or affected, (b) conflict with or result in a breach of any of the
terms, conditions or provisions of any order, judgment, decree, or ruling of
any court, arbitrator or Governmental Authority applicable to the Company or
any Subsidiary or (c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or any
Subsidiary.
Section 5.7. Governmental Authorizations, etc. No consent,
approval or authorization of, or registration, filing or declaration with, any
Governmental Authority is required in connection with the execution, delivery
or performance by the Company of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and
Orders. (a) There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary or any property of the Company or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any
term of any agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance,
rule or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Subsidiaries have filed
all tax returns that are required to have been filed in any jurisdiction, and
have paid all taxes shown to be due and payable on such returns and all other
taxes and assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (a) the amount of which is not individually or in the aggregate
Material, (b) the amount, applicability or validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which
the Company or a Subsidiary, as the case may be, has established adequate
reserves in accordance with GAAP or (c) set forth on Schedule 5.9. The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges,
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American Homestar Corporation Note Purchase Agreement
accruals and reserves on the books of the Company and its Subsidiaries in
respect of Federal, state or other taxes for all fiscal periods are adequate.
The Federal income tax liabilities of the Company and its Subsidiaries have
been determined by the Internal Revenue Service and paid for all fiscal years
up to and including the fiscal year ended May 31, 1990.
Section 5.10. Title to Property; Leases. The Company and its
Subsidiaries have good and sufficient title to their respective properties,
including all such properties reflected in the most recent audited balance
sheet referred to in Section 5.5 or purported to have been acquired by the
Company or any Subsidiary after said date (except as sold or otherwise disposed
of in the ordinary course of business), in each case free and clear of Liens
prohibited by this Agreement. All leases that individually or in the aggregate
are Material are valid and subsisting and are in full force and effect in all
material respects.
Section 5.11. Licenses, Permits, Etc.
(a) The Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the
Company infringes in any Material respect any license, permit, franchise,
authorization, patent, copyright, service ▇▇▇▇, trademark, trade name or other
right owned by any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its Subsidiaries
with respect to any patent, copyright, service ▇▇▇▇, trademark, trade name or
other right owned or used by the Company or any of its Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or
any ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under
each of the Plans (other than Multiemployer Plans), determined as of the end of
such Plan's most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan's most recent actuarial
valuation report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities. The terms "benefit
liabilities" has the meaning specified in
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American Homestar Corporation Note Purchase Agreement
section 4001 of ERISA and the terms "current value" and "present value" have
the meaning specified in Section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as
of the last day of the Company's most recently ended fiscal year in accordance
with Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance
and sale of the Notes hereunder will not involve any transaction that is
subject to the prohibitions of section 406 of ERISA or in connection with which
a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The
representation by the Company in the first sentence of this Section 5.12(e) is
made in reliance upon and subject to the accuracy of your representation in
Section 6.2 as to the sources of the funds used to pay the purchase price of
the Notes to be purchased by you.
Section 5.13. Private Offering by the Company. Neither the Company
nor anyone acting on its behalf has offered the Notes or any similar securities
for sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than you,
the Other Purchasers and not more than 50 other Institutional Investors, each
of which has been offered the Notes at a private sale for investment. Neither
the Company nor anyone acting on its behalf has taken, or will take, any action
that would subject the issuance or sale of the Notes to the registration
requirements of Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will
apply the proceeds of the sale of the Notes to (i) refinance existing Debt
(other than Debt which would be included within the definition of Total
Subordinated Debt) as described on Schedule 5.14, (ii) the acquisition of
Brilliant Homes Corporation and (iii) for general corporate purposes. No part
of the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation G of the Board of Governors of the Federal Reserve System
(12 CFR 207), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 1% of the value of the consolidated assets of the Company
and its Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 1% of the value of such assets. As used
in this Section, the terms "margin stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in said Regulation G.
Section 5.15. Existing Material Indebtedness; Future Liens. (a)
Schedule 5.15 sets forth a complete and correct list of all outstanding
Indebtedness greater than $50,000 of the Company and its Subsidiaries as of May
31, 1997, since which date there has been no Material change in the
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American Homestar Corporation Note Purchase Agreement
amounts, interest rates, sinking funds, installment payments or maturities of
the Indebtedness of the Company or its Subsidiaries. Neither the Company nor
any Subsidiary is in default and no waiver of default is currently in effect,
in the payment of any principal or interest on any Indebtedness greater than
$50,000 of the Company or such Subsidiary and no event or condition exists with
respect to any Indebtedness greater than $50,000 of the Company or any
Subsidiary that would permit (or that with notice or the lapse of time, or
both, would permit) one or more Persons to cause such Indebtedness to become
due and payable before its stated maturity or before its regularly scheduled
dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor
any Subsidiary has agreed or consented to cause or permit in the future (upon
the happening of a contingency or otherwise) any of its property, whether now
owned or hereafter acquired, to be subject to a Lien not permitted by Section
10.10.
Section 5.16. Foreign Assets Control Regulations, etc. Neither the
sale of the Notes by the Company hereunder nor its use of the proceeds thereof
will violate the Trading with the Enemy Act, as amended, or any of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.
Section 5.17. Status under Certain Statutes. Neither the Company
nor any Subsidiary is subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 1935, as amended,
the Interstate Commerce Act, as amended, or the Federal Power Act, as amended.
Section 5.18. Environmental Matters. Except as set forth on
Schedule 5.18, neither the Company nor any Subsidiary has knowledge of any
claim or has received any notice of any claim, and no proceeding has been
instituted raising any claim against the Company or any of its Subsidiaries or
any of their respective real properties now or formerly owned, leased or
operated by any of them or other assets, alleging any damage to the environment
or violation of any Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect. Except as set
forth on Schedule 5.18.
(a) neither the Company nor any Subsidiary has knowledge of any
facts which would give rise to any claim, public or private, of violation of
Environmental Laws or damage to the environment emanating from, occurring on or
in any way related to real properties now or formerly owned, leased or operated
by any of them or to other assets or their use, except, in each case, such as
could not reasonably be expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored any
Hazardous Materials on real properties now or formerly owned, leased or
operated by any of them or has disposed of any Hazardous Materials in a manner
contrary to any Environmental Laws in each case in any manner that could
reasonably be expected to result in a Material Adverse Effect; and
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American Homestar Corporation Note Purchase Agreement
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance with
applicable Environmental Laws, except where failure to comply could not
reasonably be expected to result in a Material Adverse Effect.
The Company represents and warrants that its aggregate liabilities with
respect to the matters referred to in Schedule 5.18 (i) will not have a
Material Adverse Effect and (ii) could not reasonably be expected to result in
costs to the Company and its Subsidiaries in excess of $1,000,000 which the
Company expects will be payable over an eight to ten year period.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
Section 6.1. Purchase for Investment. You represent that you are
purchasing the Notes for your own account or for one or more separate accounts
maintained by you or for the account of one or more pension or trust funds and
not with a view to the distribution thereof, provided that the disposition of
your or their property shall at all times be within your or their control. You
understand that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.
Section 6.2. Source of Funds. You represent that at least one of
the following statements is an accurate representation as to each source of
funds (a "Source") to be used by you to pay the purchase price of the Notes to
be purchased by you hereunder:
(a) if you are an insurance company, the Source is your "insurance
company general account" as defined in Department of Labor Prohibited
Transaction Exemption PTE 95-60 (60 FR 35925), July 12, 1995 (hereinafter "PTE
95- 60"), and in respect thereof you represent that there is no "employee
benefit plan" (as defined in Section 3(3) of ERISA and Section 4975(e)(1) of
the Code) established or maintained by the Company (and affiliates thereof as
defined in Section V(a)(1) of the PTE 95-60) with respect to which the amount
of general account reserves and liabilities of all contracts held by or on
behalf of such plan exceed ten percent (10%) of the total reserves and
liabilities of such general account (exclusive of separate account liabilities)
plus surplus, as set forth in the National Association of Insurance
Commissioners' Annual Statement filed with your state of domicile; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of Prohibited Transaction Exemption (▇▇▇▇") 90-1
(issued January 29, 1990), or (ii) a bank collective investment fund, within
the meaning of the PTE 91-38 (issued July 12, 1991) and, except as you have
disclosed to the Company in writing pursuant to this paragraph (b), no employee
benefit plan or group of plans maintained by the same employer or employee
organization beneficially owns more than 10% of all assets allocated to such
pooled separate account or collective investment fund; or
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American Homestar Corporation Note Purchase Agreement
(c) the Source constitutes assets of an "investment fund" (within
the meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the QPAM
Exemption), no employee benefit plans assets that are included in such
investment fund, when combined with the assets of all other employee benefit
plans established or maintained by the same employer or by an affiliate (within
the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by
the same employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of Part I(c) and (g)
of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in Section V(e)
of the QPAM Exemption) owns a 5% or more interest in the Company and (i) the
identity of such QPAM and (ii) the names of all employee benefit plans whose
assets are included in such investment fund have been disclosed to the Company
in writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee benefit plans,
each of which has been identified to the Company in writing pursuant to this
paragraph (e); or
(f) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
If you indicate that you are relying on any representation contained in
subparagraph (b), (c) or (e) above, the Company shall deliver on the Closing
Date a certificate, which shall either state that (i) it is neither a party in
interest nor a "disqualified person" (as defined in Section 4975(e)(2) of the
Code), with respect to any plan identified pursuant to paragraphs (b) or (e)
above, or (ii) with respect to any plan identified pursuant to subparagraph (c)
above, neither it nor any "affiliate" (as defined in Section V(c) of the QPAM
Exemption) has at such time, and during the immediately preceding one year,
exercised the authority to appoint or terminate said QPAM as manager of any
plan identified in writing pursuant to subparagraph (c) above or to negotiate
the terms of said QPAM's management agreement on behalf of any such identified
plan.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO COMPANY.
Section 7.1. Financial and Business Information. The Company shall
deliver to each holder of Notes that is an Institutional Investor:
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American Homestar Corporation Note Purchase Agreement
(a) Quarterly Statements C promptly, and in any event within 60
days after the end of each quarterly fiscal period in each fiscal year of the
Company (other than the last quarterly fiscal period of each such fiscal year),
duplicate copies of:
(i) consolidated balance sheets of (x) the Company and its
Subsidiaries and (y) the Company and its Restricted Subsidiaries as at
the end of such quarter, and
(ii) consolidated statements of income, cash flows, and
changes in shareholders' equity, of (x) the Company and its
Subsidiaries and (y) the Company and its Restricted Subsidiaries for
such quarter and (in the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP applicable to quarterly financial statements
generally, and certified by a Senior Financial Officer as fairly presenting, in
all material respects, the financial position of the companies being reported
on and their results of operations and cash flows, subject to changes resulting
from year-end adjustments, provided that delivery within the time period
specified above of copies of the Company's Quarterly Report on Form 10-Q
prepared in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the requirements
of this Section 7.1(a) with respect to the financial statements of the Company
and its Subsidiaries;
(b) Annual Statements C promptly, and in any event within 105 days
after the end of each fiscal year of the Company, duplicate copies of,
(i) consolidated balance sheets of (x) the Company and its
Subsidiaries and (y) the Company and its Restricted Subsidiaries, as at
the end of such year, and
(ii) consolidated statements of income, cash flows, and
changes in shareholders' equity, of (x) the Company and its
Subsidiaries and (y) the Company and its Restricted Subsidiaries, for
such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, (x) in
the case of the consolidated financial statements of the Company and its
Restricted Subsidiaries referred to above, certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial position
of the companies being reported on and their results of operations and cash
flows and, (y) in the case of each of the consolidated financial statements of
the Company and its Subsidiaries referred to above, accompanied by
(A) an opinion thereon of independent certified
public accountants of recognized national standing, which
opinion shall state that such financial statements present
fairly, in all material respects, the financial position of
the companies being reported upon and their results of
operations and cash flows and have been prepared in conformity
with GAAP, and that the examination
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American Homestar Corporation Note Purchase Agreement
of such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable
basis for such opinion in the circumstances, and
(B) a certificate of such accountants stating
that they have reviewed this Agreement and stating further
whether, in making their audit, they have become aware of any
condition or event that then constitutes a Default or an Event
of Default, and, if they are aware that any such condition or
event then exists, specifying the nature and period of the
existence thereof (it being understood that such accountants
shall not be liable, directly or indirectly, for any failure
to obtain knowledge of any Default or Event of Default unless
such accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted auditing
standards or did not make such an audit),
provided that the delivery within the time period specified above of the
Company's Annual Report on Form 10-K for such fiscal year (together with the
Company's annual report to shareholders, if any, prepared pursuant to Rule
14a-3 under the Exchange Act) prepared in accordance with the requirements
therefor and filed with the Securities and Exchange Commission, together with
the accountant's certificate described in clause (B) above, shall be deemed to
satisfy the requirements of this Section 7.1(b) with respect to the financial
statements of the Company and its Subsidiaries;
(c) SEC and Other Reports C promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or proxy
statement sent by the Company or any Subsidiary to public securities holders
generally, and (ii) each regular or periodic report, each registration
statement (without exhibits except as expressly requested by such holder), and
each prospectus and all amendments thereto filed by the Company or any
Subsidiary with the Securities and Exchange Commission and of all press
releases and other statements made available generally by the Company or any
Subsidiary to the public concerning developments that are Material;
(d) Notice of Default or Event of Default C promptly, and in any
event within five days after a Responsible Officer becoming aware of (i) the
existence of any Default or Event of Default or that any Person has given any
notice or taken any action with respect to a claimed default hereunder or that
any Person has given any notice or taken any action with respect to a claimed
default of the type referred to in Section 11(f), a written notice specifying
the nature and period of existence thereof and what action the Company is
taking or proposes to take with respect thereto or (ii) the acceleration of any
Note pursuant to Section 12.1 hereof, a written notice setting forth the
principal amount of each Note so accelerated, the name of the holder thereof
and the circumstances surrounding such acceleration;
(e) ERISA Matters C promptly, and in any event within five days
after a Responsible Officer becoming aware of any of the following, a written
notice setting forth
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American Homestar Corporation Note Purchase Agreement
the nature thereof and the action, if any, that the Company or an ERISA
Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as
defined in section 4043(b) of ERISA and the regulations thereunder, for
which notice thereof has not been waived pursuant to such regulations
as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or any
ERISA Affiliate of a notice from a Multiemployer Plan that such action
has been taken by the PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could result
in the incurrence of any liability by the Company or any ERISA
Affiliate pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the Code relating to employee benefit plans, or in
the imposition of any Lien on any of the rights, properties or assets
of the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or such penalty or excise tax provisions, if such liability or
Lien, taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material Adverse
Effect;
(f) Notices from Governmental Authority C promptly, and in any
event within 30 days of receipt thereof, copies of any notice to the Company or
any Subsidiary from any Federal or state Governmental Authority relating to any
order, ruling, statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect; and
(g) Requested Information C with reasonable promptness, such other
data and information relating to the business, operations, affairs, financial
condition, assets or properties of the Company or any of its Subsidiaries or
relating to the ability of the Company to perform its obligations hereunder and
under the Notes as from time to time may be reasonably requested by any such
holder of Notes, including, without limitation, quarterly and annual
consolidating balance sheets and statements of income of the Company and its
Subsidiaries (upon the request of a holder until such time, if any, as such
request has been rescinded).
Section 7.2. Officer's Certificate. Each set of financial
statements delivered to a holder of Notes pursuant to Section 7.1(a) or Section
7.1(b) hereof shall be accompanied by a certificate of a Senior Financial
Officer setting forth:
(a) Covenant Compliance C the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.3 through Section 10.10 hereof,
inclusive, during the quarterly or annual period covered by the statements then
being furnished (including with respect to each such Section,
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American Homestar Corporation Note Purchase Agreement
where applicable, the calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms of such Sections,
and the calculation of the amount, ratio or percentage then in existence); and
(b) Event of Default C a statement that such officer has reviewed
the relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and its
Subsidiaries from the beginning of the quarterly or annual period covered by
the statements then being furnished to the date of the certificate and that
such review shall not have disclosed the existence during such period of any
condition or event that constitutes a Default or an Event of Default or, if any
such condition or event existed or exists (including, without limitation, any
such event or condition resulting from the failure of the Company or any
Subsidiary to comply with any Environmental Law), specifying the nature and
period of existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.
Section 7.3. Inspection. The Company shall permit the
representatives of each holder of Notes that is an Institutional Investor:
(a) No Default C if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the Company, to
visit the principal executive office of the Company, to discuss the affairs,
finances and accounts of the Company and its Subsidiaries with the Company's
officers, and (with the consent of the Company, which consent will not be
unreasonably withheld) its independent public accountants, and (with the
consent of the Company, which consent will not be unreasonably withheld) to
visit the other offices and properties of the Company and each Subsidiary, all
at such reasonable times and as often as may be reasonably requested in
writing; and
(b) Default C if a Default or Event of Default then exists, at the
expense of the Company, to visit and inspect any of the offices or properties
of the Company or any Subsidiary, to examine all their respective books of
account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective officers and independent public accountants (and by this
provision the Company authorizes said accountants to discuss the affairs,
finances and accounts of the Company and its Subsidiaries), all at such times
and as often as may be requested.
SECTION 8. PREPAYMENT OF THE NOTES.
Section 8.1. Required Prepayments. On July 10, 2002 and on each
July 10 thereafter to and including July 10, 2006, the Company will prepay
$10,166,667 principal amount (or such lesser principal amount as shall then be
outstanding) of the Notes at par and without payment of the Make-Whole Amount
or any premium, provided that upon any partial prepayment of the Notes pursuant
to Section 8.2 or purchase of the Notes permitted by Section 8.5 the principal
amount of each required prepayment of the Notes becoming due under this Section
8.1 on and after the date of such
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American Homestar Corporation Note Purchase Agreement
prepayment or purchase shall be reduced in the same proportion as the aggregate
unpaid principal amount of the Notes is reduced as a result of such prepayment
or purchase.
Section 8.2. Optional Prepayments with Make-Whole Amount. The
Company may, at its option, upon notice as provided below, prepay at any time
all, or from time to time any part of, the Notes, in an amount not less than
10% of the aggregate principal amount of the Notes then outstanding in the case
of a partial prepayment, at 100% of the principal amount so prepaid, together
with interest accrued thereon to the date of such prepayment, plus the
Make-Whole Amount determined for the prepayment date with respect to such
principal amount. The Company will give each holder of Notes written notice of
each optional prepayment under this Section 8.2 not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment. Each such
notice shall specify such date, the aggregate principal amount of the Notes to
be prepaid on such date, the principal amount of each Note held by such holder
to be prepaid (determined in accordance with Section 8.3), and the interest to
be paid on the prepayment date with respect to such principal amount being
prepaid, and shall be accompanied by a certificate of a Senior Financial
Officer as to the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation. Two Business Days
prior to such prepayment, the Company shall deliver to each holder of Notes a
certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
Section 8.3. Allocation of Partial Prepayments. In the case of
each partial prepayment of the Notes, the principal amount of the Notes to be
prepaid shall be allocated among all of the Notes at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof not theretofore called for prepayment.
Section 8.4. Maturity; Surrender, Etc. In the case of each
prepayment of Notes pursuant to this Section 8, the principal amount of each
Note to be prepaid shall mature and become due and payable on the date fixed
for such prepayment, together with interest on such principal amount accrued to
such date and the applicable Make- Whole Amount, if any. From and after such
date, unless the Company shall fail to pay such principal amount when so due
and payable, together with the interest and Make-Whole Amount, if any, as
aforesaid, interest on such principal amount shall cease to accrue. Any Note
paid or prepaid in full shall be surrendered to the Company and cancelled and
shall not be reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.
Section 8.5. Purchase of Notes. The Company will not and will not
permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Notes except upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the
Notes. The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
Section 8.6. Make-Whole Amount. The term "Make-Whole Amount"
means, with respect to any Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such Note over the amount of such
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American Homestar Corporation Note Purchase Agreement
Called Principal, provided that the Make-Whole Amount may in no event be less
than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:
"Called Principal" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"Discounted Value" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by (i)
the yields reported, as of 10:00 A.M. (New York City time) on the
second Business Day preceding the Settlement Date with respect to such
Called Principal, on the display designated as "USD" of the Bloomberg
Financial Markets Services Screen (or such other display as may replace
USD of Bloomberg Financial Markets Services Screen) for actively traded
U.S. Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date, or
(ii) if such yields are not reported as of such time or the yields
reported as of such time are not ascertainable, the Treasury Constant
Maturity Series Yields reported, for the latest day for which such
yields have been so reported as of the second Business Day preceding
the Settlement Date with respect to such Called Principal, in Federal
Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a
constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury ▇▇▇▇
quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the duration closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the duration closest to and less than the
Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the
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American Homestar Corporation Note Purchase Agreement
Settlement Date with respect to such Called Principal if no payment of
such Called Principal were made prior to its scheduled due date,
provided that if such Settlement Date is not a date on which interest
payments are due to be made under the terms of the Notes, then the
amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.2 or
12.1.
"Settlement Date" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will, and will cause
each of its Subsidiaries to, comply with all laws, ordinances or governmental
rules or regulations to which each of them is subject, including, without
limitation, Environmental Laws, and will obtain and maintain in effect all
licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent
necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 9.2. Insurance. The Company will, and will cause each of
its Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
Section 9.3. Maintenance of Properties. The Company will, and will
cause each of its Subsidiaries to, maintain and keep, or cause to be maintained
and kept, their respective properties in good repair, working order and
condition (other than ordinary wear and tear), so that the business carried on
in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Subsidiary from discontinuing
the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims. The Company will and
will cause each of its Subsidiaries to file all tax returns required to be
filed in any jurisdiction and to pay and discharge all taxes shown to be due
and payable on such returns and all other taxes, assessments, governmental
charges, or levies imposed on them or any of their properties, assets, income
or franchises, to the
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American Homestar Corporation Note Purchase Agreement
extent such taxes and assessments have become due and payable and before they
have become delinquent and all claims for which sums have become due and
payable that have or might become a Lien on properties or assets of the Company
or any Subsidiary, provided that neither the Company nor any Subsidiary need
pay any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor in accordance with GAAP
on the books of the Company or such Subsidiary or (ii) the nonpayment of all
such taxes and assessments in the aggregate could not reasonably be expected to
have a Material Adverse Effect.
Section 9.5. Corporate Existence, Etc. The Company will at all
times preserve and keep in full force and effect its corporate existence.
Subject to Sections 10.2 and 10.3, the Company will at all times preserve and
keep in full force and effect the corporate existence of each of its
Subsidiaries and all rights and franchises of the Company and its Subsidiaries
unless, in the good faith judgment of the Company, the termination of or
failure to preserve and keep in full force and effect such corporate existence,
right or franchise could not, individually or in the aggregate, have a Material
Adverse Effect.
Section 9.6. Nature of Business. The Company will not, and will
not permit any of its Subsidiaries to, engage to any substantial extent in any
business other than the businesses in which the Company and its Subsidiaries
are engaged on the date of this Agreement as described in the Memorandum and
businesses reasonably related thereto or in furtherance thereof excluding, in
all events, the business of manufacturing or selling motor homes, travel
trailers, camper units or recreational vehicles.
SECTION 10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Transactions with Affiliates. The Company will not
and will not permit any Subsidiary to enter into directly or indirectly any
transaction or Material group of related transactions (including without
limitation the purchase, lease, sale or exchange of properties of any kind or
the rendering of any service) with any Affiliate (other than the Company or
another Subsidiary), except in the ordinary course and pursuant to the
reasonable requirements of the Company's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Subsidiary
than would be obtainable in a comparable arm's-length transaction with a Person
not an Affiliate.
Section 10.2. Merger, Consolidation, etc. The Company shall not,
and shall not permit any Restricted Subsidiary to, consolidate with or merge
with any other corporation or convey, transfer or lease substantially all of
its assets in a single transaction or series of transactions to any Person
unless:
(a) in the case of any consolidation or merger involving the
Company, the successor formed by such consolidation or the survivor of such
merger or the Person that
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American Homestar Corporation Note Purchase Agreement
acquires by conveyance, transfer or lease substantially all of the assets of
the Company as an entirety, as the case may be, shall be a solvent corporation
organized and existing under the laws of the United States or any State thereof
(including the District of Columbia), and, if the Company is not such
corporation, (i) such corporation shall have executed and delivered to each
holder of any Notes its assumption of the due and punctual performance and
observance of each covenant and condition of this Agreement, the Other
Agreements and the Notes and (ii) shall have caused to be delivered to each
holder of any Notes an opinion of nationally recognized independent counsel, or
other independent counsel reasonably satisfactory to the Required Holders, to
the effect that all agreements or instruments effecting such assumption have
been duly authorized, executed and delivered and are valid and enforceable in
accordance with their terms and comply with the terms hereof;
(b) in the case of any consolidation or merger involving a
Restricted Subsidiary and not involving the Company, such Restricted Subsidiary
shall be the survivor, or the successor corporation shall be a Wholly-Owned
Restricted Subsidiary;
(c) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; and
(d) immediately after giving effect to such transaction, the
successor corporation would be permitted to incur at least $1.00 of additional
Debt pursuant to Section 10.4.
No such conveyance, transfer or lease of substantially all of the assets of the
Company shall have the effect of releasing the Company or any successor
corporation that shall theretofore have become such in the manner prescribed in
this Section 10.2 from its liability under this Agreement or the Notes.
Section 10.3. Sale of Assets, Etc. Except as permitted under
Section 10.2, the Company will not, and will not permit any of its Restricted
Subsidiaries to, make any Asset Disposition unless:
(a) in the good faith opinion of the management or the Board of
Directors of the Company, the Asset Disposition is in exchange for
consideration having a Fair Market Value at least equal to that of the property
exchanged and is in the best interests of the Company or such Restricted
Subsidiary; and
(b) immediately after giving effect to the Asset Disposition, no
Default or Event of Default would exist;
(c) immediately after giving effect to the Asset Disposition, (i)
the Disposition Value of all property that was the subject of any Asset
Disposition occurring in the period of 365 days then ending would not exceed
10% of Consolidated Assets as of the end of the then most recently ended fiscal
year of the Company and (ii) the Disposition Value of all property that was the
subject of any Asset Disposition occurring since the date of the Closing would
not exceed 25% of Consolidated Assets as of the end of the then most recently
ended fiscal year of the Company; and
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American Homestar Corporation Note Purchase Agreement
(d) the Company would be permitted to incur at least $1.00 of
additional Debt pursuant to the provisions of
Section 10.4. Limitations on Debt. The Company will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, guarantee, or otherwise become directly or indirectly liable with
respect to any Debt, unless on the date the Company or such Restricted
Subsidiary becomes liable with respect to any such Debt and immediately after
giving effect thereto and the concurrent retirement of any other Debt,
(a) Total Senior Debt is less than 60% of Total Capitalization,
(b) the sum of Total Senior Debt plus Total Subordinated Debt is
less than 65% of Total Capitalization,
(c) Priority Debt is less than 15% of Consolidated Net Worth, and
(d) no Default or Event of Default exists.
Section 10.5. Fixed Charges Coverage Ratio. The Company will not
permit the ratio of (i) Earnings Before Interest, Taxes and Rent to (ii) Total
Interest and Rent Expense, determined as of the end of each fiscal quarter, for
the immediately preceding four consecutive fiscal quarters (taken as a single
accounting period) to be less than 2.25 to 1.00.
Section 10.6. Net Working Capital. The Company will not, at any
time, permit Net Working Capital to be less than $1.00.
Section 10.7. Consolidated Net Worth. The Company will not permit
Consolidated Net Worth to be less than the sum of (a) $60,000,000, plus (b) an
aggregate amount equal to 35% of its Consolidated Net Income on a cumulative
basis (but, in each case, only if a positive number) for each completed fiscal
year beginning with the fiscal year ended May 31, 1997.
Section 10.8. Restricted Payments. (a) Limitation. The Company
will not, and will not permit any of its Restricted Subsidiaries to, at any
time, declare or make or incur any liability to declare or make, any Restricted
Payment unless immediately after giving effect to such action, the aggregate
amount of Restricted Payments of the Company and its Restricted Subsidiaries
declared or made during the period commencing on June 1, 1997, and ending on
the date such Restricted Payment is declared or made, inclusive, would not
exceed the sum of
(i) $5,000,000, plus
(ii) 50% of Consolidated Net Income on a
cumulative basis for such period (or minus 100% of
Consolidated Net Income for such period if Consolidated Net
Income is a loss).
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American Homestar Corporation Note Purchase Agreement
(b) Time of Payment. The Company will not, and will not permit
any of its Restricted Subsidiaries to, authorize or declare a Restricted
Payment that is not payable within 60 days of authorization or declaration.
Section 10.9. Restricted Investments. The Company will not, and
will not permit any of its Restricted Subsidiaries to, make or authorize any
Restricted Investments.
Section 10.10. Limitation on Liens. The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly
create, incur, assume or permit to exist (upon the happening of a contingency
or otherwise) any Lien on or with respect to any property or asset (including,
without limitation, any document or instrument in respect of goods or accounts
receivable) of the Company or any such Restricted Subsidiary, whether now owned
or held or hereafter acquired, or any income or profits therefrom or assign or
otherwise convey any right to receive income or profits (unless it makes, or
causes to be made, effective provision whereby the Notes will be equally and
ratably secured with any and all other obligations thereby secured, such
security to be pursuant to an agreement reasonably satisfactory to the Required
Holders and, in any such case, the Notes shall have the benefit, to the fullest
extent that, and with such priority as, the holders of the Notes may be
entitled under applicable law, of an equitable Lien on such property, provided
that each holder retains the right to waive, with respect to itself, the
benefits of any such Lien), except:
(a) Liens for taxes, assessments or other governmental charges
which are not yet due and payable or the payment of which is not at the time
required by Section 9.4;
(b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens, in each case,
incurred in the ordinary course of business for sums not yet due and payable or
the payment of which is not at the time required by Section 9.1;
(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business (i) in connection with
workers' compensation, unemployment insurance and other types of social
security or retirement benefits, or (ii) to secure (or to obtain letters of
credit that secure) the performance of tenders, statutory obligations, surety
bonds, appeal bonds (not in excess of $1,000,000), bids, leases (other than
Capital Leases), performance bonds, purchase, construction or sales contracts
and other similar obligations, in each case not incurred or made in connection
with the borrowing of money, the obtaining of advances or credit or the payment
of the deferred purchase price of property;
(d) any attachment or judgment Lien, unless the judgment it
secures (i) shall not, within 30 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall not have been
discharged within 30 days after the expiration of any such stay or (ii) exceeds
$1,000,000;
(e) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or encumbrances, in each
case incidental to, and not interfering
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American Homestar Corporation Note Purchase Agreement
with, the ordinary conduct of the business of the Company or any of its
Restricted Subsidiaries, provided that such Liens do not, in the aggregate,
materially detract from the value of such property;
(f) Liens on property or assets of the Company or any of its
Restricted Subsidiaries securing Debt owing to the Company or to another
Restricted Subsidiary;
(g) Liens on Manufactured Homes inventory (together with any
mobile homes, motor homes, travel trailers, camper units and recreational
vehicles which may then be owned by the Company or any Restricted Subsidiary)
and Cash in Transit of the Company and its Restricted Subsidiaries securing, in
each case, Debt of the Company or a Restricted Subsidiary under its Floor Plan
Financing;
(h) Liens existing on the date of this Agreement and securing Debt
of the Company and its Restricted Subsidiaries as indicated on Schedule 5.15;
(i) any Lien created to secure all or any part of the purchase
price, or to secure Debt incurred or assumed to pay all or any part of the
purchase price or cost of construction, of tangible property (or any
improvement thereon) acquired or constructed by the Company or a Restricted
Subsidiary after the date of the Closing, provided that
(i) any such Lien shall extend solely to the item or items
of such property (or improvement thereon) so acquired or constructed
and, if required by the terms of the instrument originally creating
such Lien, other property (or improvement thereon) which is an
improvement to or is acquired for specific use in connection with such
acquired or constructed property (or improvement thereon) or which is
real property being improved by such acquired or constructed property
(or improvement thereon),
(ii) the principal amount of the Debt secured by any such
Lien shall at no time exceed an amount equal to the lesser of (A) the
cost of the Company or such Restricted Subsidiary of the property (or
improvement thereon) so acquired or constructed and (B) the Fair Market
Value (as determined in good faith by the board of directors of the
Company) of such property (or improvement thereon) at the time of such
acquisition or construction, and
(iii) any such Lien shall be created contemporaneously with,
or within 180 days after, the acquisition or construction of such
property;
(j) any Lien existing on property of a Person immediately prior to
its being consolidated with or merged into the Company or a Restricted
Subsidiary or its becoming a Restricted Subsidiary, or any Lien existing on any
property acquired by the Company or any Restricted Subsidiary at the time such
property is so acquired (whether or not the Debt secured thereby shall have
been assumed), provided that (i) no such Lien shall have been created or
assumed in contemplation of such consolidation or merger or such Person's
becoming a Restricted Subsidiary or such acquisition of property, and (ii) each
such Lien shall extend solely to the item or items of property so acquired and,
if required by the terms
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American Homestar Corporation Note Purchase Agreement
of the instrument originally creating such Lien, other property which is an
improvement to or is acquired for specific use in connection with such acquired
property;
(k) other Liens provided that at the time of incurrence of such
other Liens and after giving effect to the application of the proceeds secured
thereby, Priority Debt shall not exceed 15% of Consolidated Net Worth; and
(l) any Lien renewing, extending or refunding any Lien permitted
by paragraphs (g), (h), (i) or (j) of this Section 10.10, provided that (i) the
principal amount of Debt secured by such Lien immediately prior to such
extension, renewal or refunding is not increased or the maturity thereof
reduced, (ii) such Lien is not extended to any other property, and (iii)
immediately after such extension, renewal or refunding no Default or Event of
Default would exist.
Section 10.11. Restrictions on Dividends of Subsidiaries, Etc. The
Company will not, and will not permit any of its Subsidiaries to, enter into
any agreement which would restrict any Subsidiary's ability or right to pay
dividends to, or make advances to or Investments in, the Company or, if such
Subsidiary is not directly owned by the Company, the "parent" Subsidiary of
such Subsidiary.
SECTION 11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or
otherwise; or
(b) the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and payable;
or
(c) the Company defaults in the performance of or compliance with
any term contained in Section 10; or
(d) the Company defaults in the performance of or compliance with
any term contained herein (other than those referred to in paragraphs (a), (b)
and (c) of this Section 11) and such default is not remedied within 30 days
after the earlier of (i) a Responsible Officer obtaining actual knowledge of
such default and (ii) the Company receiving written notice of such default from
any holder of a Note (any such written notice to be identified as a "notice of
default" and to refer specifically to this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or on behalf
of the Company or by any officer of the Company in this Agreement or in any
writing furnished in connection with the transactions contemplated hereby
proves to have been false or incorrect in any material respect on the date as
of which made; or
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American Homestar Corporation Note Purchase Agreement
(f) (i) the Company or any Restricted Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal of
or premium or make-whole amount or interest on any Indebtedness that is
outstanding in an aggregate principal amount of at least $1,000,000 beyond any
period of grace provided with respect thereto, or (ii) the Company or any
Restricted Subsidiary is in default in the performance of or compliance with
any term of any evidence of any Indebtedness in an aggregate outstanding
principal amount of at least $1,000,000 or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and as a consequence
of such default or condition such Indebtedness has become, or has been declared
(or one or more Persons are entitled to declare such Indebtedness to be), due
and payable before its stated maturity or before its regularly scheduled dates
of payment, or (iii) as a consequence of the occurrence or continuation of any
event or condition (other than the passage of time or the right of the holder
of Indebtedness to convert such Indebtedness into equity interests), (x) the
Company or any Restricted Subsidiary has become obligated to purchase or repay
Indebtedness before its regular maturity or before its regularly scheduled
dates of payment in an aggregate outstanding principal amount of at least
$1,000,000, or (y) one or more Persons have the right to require the Company or
any Restricted Subsidiary so to purchase or repay such Indebtedness; or
(g) the Company or any Restricted Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they become
due, (ii) files, or consents by answer or otherwise to the filing against it
of, a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of any
jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv)
consents to the appointment of a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial part
of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi)
takes corporate action for the purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of its
Restricted Subsidiaries, a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial part of
its property, or constituting an order for relief or approving a petition for
relief or reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any jurisdiction,
or ordering the dissolution, winding-up or liquidation of the Company or any of
its Restricted Subsidiaries, or any such petition shall be filed against the
Company or any of its Restricted Subsidiaries and such petition shall not be
dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money of
greater than $500,000 are rendered against one or more of the Company and its
Restricted Subsidiaries and which judgments are not, within 30 days after entry
thereof, bonded, discharged or stayed pending appeal; or
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American Homestar Corporation Note Purchase Agreement
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a waiver of
such standards or extension of any amortization period is sought or granted
under Section 412 of the Code, (ii) a notice of intent to terminate any Plan
shall have been or is reasonably expected to be filed with the PBGC or the PBGC
shall have instituted proceedings under ERISA section 4042 to terminate or
appoint a trustee to administer any Plan or the PBGC shall have notified the
Company or any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit liabilities"
(within the meaning of section 4001(a)(18) of ERISA) under all Plans,
determined in accordance with Title IV of ERISA, shall exceed $500,000, (iv)
the Company or any ERISA Affiliate shall have incurred or is reasonably
expected to incur any liability pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to employee benefit
plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer
Plan, or (vi) the Company or any Restricted Subsidiary establishes or amends
any employee welfare benefit plan that provides post-employment welfare
benefits in a manner that would increase the liability of the Company or any
Restricted Subsidiary thereunder; and any such event or events described in
clauses (i) through (vi) above, either individually or together with any other
such event or events, could reasonably be expected to have a Material Adverse
Effect.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
Section 12.1. Acceleration. (a) If an Event of Default with respect
to the Company described in paragraph (g) or (h) of Section 11 (other than an
Event of Default described in clause (i) of paragraph (g) or described in
clause (vi) of paragraph (g) by virtue of the fact that such clause encompasses
clause (i) of paragraph (g)) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing,
any holder or holders of more than 33-1/3% in principal amount of the Notes at
the time outstanding may at any time at its or their option, by notice or
notices to the Company, declare all the Notes then outstanding to be
immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at
the time outstanding affected by such Event of Default may at any time, at its
or their option, by notice or notices to the Company, declare all the Notes
held by it or them to be immediately due and payable.
Upon any Note's becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Note will forthwith mature and
the entire unpaid principal amount of such Note, plus (i) all accrued and
unpaid interest thereon and (ii) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or
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American Homestar Corporation Note Purchase Agreement
further notice, all of which are hereby waived. The Company acknowledges, and
the parties hereto agree, that each holder of a Note has the right to maintain
its investment in the Notes free from repayment by the Company (except as
herein specifically provided for), and that the provision for payment of a
Make-Whole Amount by the Company in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default
has occurred and is continuing, and irrespective of whether any Notes have
become or have been declared immediately due and payable under Section 12.1,
the holder of any Note at the time outstanding may proceed to protect and
enforce the rights of such holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein or in any Note, or for an injunction against a violation of
any of the terms hereof or thereof, or in aid of the exercise of any power
granted hereby or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been
declared due and payable pursuant to clause (b) or (c) of Section 12.1, the
holders of more than 66-2/3% in principal amount of the Notes then outstanding,
by written notice to the Company, may rescind and annul any such declaration
and its consequences if (a) the Company has paid all overdue interest on the
Notes, all principal of and Make-Whole Amount, if any, on any Notes that are
due and payable and are unpaid other than by reason of such declaration, and
all interest on such overdue principal and Make-Whole Amount, if any, and (to
the extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) all Events of Default and Defaults, other than
non- payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 17, and
(c) no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this
Section 12.3 will extend to or affect any subsequent Event of Default or
Default or impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power
or remedy conferred by this Agreement or by any Note upon any holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under Section 15,
the Company will pay to the holder of each Note on demand such further amount
as shall be sufficient to cover all costs and expenses of such holder incurred
in any enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys' fees, expenses and disbursements.
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee
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American Homestar Corporation Note Purchase Agreement
of one or more Notes shall be registered in such register. Prior to due
presentment for registration of transfer, the Person in whose name any Note
shall be registered shall be deemed and treated as the owner and holder thereof
for all purposes hereof, and the Company shall not be affected by any notice or
knowledge to the contrary. The Company shall give to any holder of a Note that
is an Institutional Investor promptly upon request therefor, a complete and
correct copy of the names and addresses of all registered holders of Notes.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of any
Note at the principal executive office of the Company for registration of
transfer or exchange (and in the case of a surrender for registration of
transfer, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of such Note or its attorney duly authorized
in writing and accompanied by the address for notices of each transferee of
such Note or part thereof), the Company shall execute and deliver, at the
Company's expense (except as provided below), one or more new Notes (as
requested by the holder thereof) in exchange therefor, in an aggregate
principal amount equal to the unpaid principal amount of the surrendered Note.
Each such new Note shall be payable to such Person as such holder may request
and shall be substantially in the form of Exhibit 1. Each such new Note shall
be dated and bear interest from the date to which interest shall have been paid
on the surrendered Note or dated the date of the surrendered Note if no
interest shall have been paid thereon. The Company may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect
of any such transfer of Notes. Notes shall not be transferred in denominations
of less than $100,000, provided that if necessary to enable the registration of
transfer by a holder of its entire holding of Notes, one Note may be in a
denomination of less than $100,000. Any transferee, by its acceptance of a
Note registered in its name (or the name of its nominee), shall be deemed to
have made the representation set forth in Section 6.2.
Section 13.3. Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note is, or
is a nominee for, an original Purchaser or another holder of a Note with a
minimum net worth of at least $100,000,000, such Person's own unsecured
agreement of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a
new Note, dated and bearing interest from the date to which interest shall have
been paid on such lost, stolen, destroyed or mutilated Note or dated the date
of such lost, stolen, destroyed or mutilated Note if no interest shall have
been paid thereon.
SECTION 14. PAYMENTS ON NOTES.
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American Homestar Corporation Note Purchase Agreement
Section 14.1. Place of Payment. Subject to Section 14.2, payments
of principal, Make-Whole Amount, if any, and interest becoming due and payable
on the Notes shall be made in Chicago, Illinois at the principal office of The
First National Bank of Chicago in such jurisdiction. The Company may at any
time, by notice to each holder of a Note, change the place of payment of the
Notes so long as such place of payment shall be either the principal office of
the Company in such jurisdiction or the principal office of a bank or trust
company in such jurisdiction.
Section 14.2. Home Office Payment. So long as you or your nominee
shall be the holder of any Note, and notwithstanding anything contained in
Section 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, and
interest by the method and at the address specified for such purpose below your
name in Schedule A, or by such other method or at such other address as you
shall have from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the making of
any notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, you shall surrender such Note for cancellation, reasonably promptly
after any such request, to the Company at its principal executive office or at
the place of payment most recently designated by the Company pursuant to
Section 14.1. Prior to any sale or other disposition of any Note held by you
or your nominee you will, at your election, either endorse thereon the amount
of principal paid thereon and the last date to which interest has been paid
thereon or surrender such Note to the Company in exchange for a new Note or
Notes pursuant to Section 13.2. The Company will afford the benefits of this
Section 14.2 to any Institutional Investor that is the direct or indirect
transferee of any Note purchased by you under this Agreement and that has made
the same agreement relating to such Note as you have made in this Section 14.2.
SECTION 15. EXPENSES, ETC.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all reasonable costs
and expenses (including reasonable attorneys' fees of a special counsel and, if
reasonably required, local or other counsel) incurred by you and each Other
Purchaser or holder of a Note in connection with such transactions and in
connection with any amendments, waivers or consents under or in respect of this
Agreement or the Notes (whether or not such amendment, waiver or consent
becomes effective), including, without limitation: (a) the costs and expenses
incurred in enforcing or defending (or determining whether or how to enforce or
defend) any rights under this Agreement or the Notes or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or the Notes, or by reason of being a holder of
any Note, and (b) the costs and expenses, including financial advisors' fees,
incurred in connection with the insolvency or bankruptcy of the Company or any
Subsidiary or in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes. The Company will pay, and
will save you and each other holder of a Note harmless from, all claims in
respect of any fees, costs or expenses, if any, of brokers and finders incurred
in connection with the purchase by you of the Notes on the date of Closing
(other than those retained by you).
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American Homestar Corporation Note Purchase Agreement
Section 15.2. Survival. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or
transfer by you of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of you or any
other holder of a Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the subject
matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
Section 17.1. Requirements. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment
or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or
any defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may,
without the written consent of the holder of each Note at the time outstanding
affected thereby, (i) subject to the provisions of Section 12 relating to
acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment or
method of computation of interest or of the Make-Whole Amount on, the Notes,
(ii) change the percentage of the principal amount of the Notes the holders of
which are required to consent to any such amendment or waiver, or (iii) amend
any of Sections 8, 11(a), 11(b), 12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any
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American Homestar Corporation Note Purchase Agreement
holder of Notes of any waiver or amendment of any of the terms and provisions
hereof or of the Notes unless such remuneration is concurrently paid, or
security is concurrently granted, on the same terms, ratably to each holder of
Notes then outstanding whether or not such holder consented to such waiver or
amendment.
Section 17.3. Binding Effect, Etc. Any amendment or waiver consented
to as provided in this Section 17 applies equally to all holders of Notes and
is binding upon them and upon each future holder of any Note and upon the
Company without regard to whether such Note has been marked to indicate such
amendment or waiver. No such amendment or waiver will extend to or affect any
obligation, covenant, agreement, Default or Event of Default not expressly
amended or waived or impair any right consequent thereon. No course of dealing
between the Company and the holder of any Note nor any delay in exercising any
rights hereunder or under any Note shall operate as a waiver of any rights of
any holder of such Note. As used herein, the term "this Agreement" and
references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
Section 17.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of the Vice
President-Finance, or at such other address as the Company shall have
specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
SECTION 19. REPRODUCTION OF DOCUMENTS.
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American Homestar Corporation Note Purchase Agreement
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and you may destroy any original document so reproduced.
The Company agrees and stipulates that, to the extent permitted by applicable
law, any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by you
in the regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
This Section 19 shall not prohibit the Company or any other holder of Notes
from contesting any such reproduction to the same extent that it could contest
the original, or from introducing evidence to demonstrate the inaccuracy of any
such reproduction.
SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary
in connection with the transactions contemplated by or otherwise pursuant to
this Agreement that is proprietary in nature and that was clearly marked or
labeled or otherwise adequately identified in writing when received by you as
being confidential information of the Company or such Subsidiary, including,
without limitation, the Memorandum, provided that such term does not include
information that (a) was publicly known or otherwise known to you prior to the
time of such disclosure, (b) subsequently becomes publicly known through no act
or omission by you or any Person acting on your behalf, (c) otherwise becomes
known to you other than through disclosure by the Company or any Subsidiary or
(d) constitutes financial statements delivered to you under Section 7.1 that
are otherwise publicly available. You will maintain the confidentiality of
such Confidential Information in accordance with procedures adopted by you in
good faith to protect confidential information of third parties delivered to
you, provided that you may deliver or disclose Confidential Information to (i)
your directors, trustees, officers, employees, agents, attorneys and
affiliates, (ii) your financial advisors and other professional advisors, (iii)
any other holder of any Note, (iv) any Institutional Investor to which you sell
or offer to sell such Note or any part thereof or any participation therein,
(v) any Person from which you offer to purchase any security of the Company (if
such Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (vi) any federal
or state regulatory authority having jurisdiction over you, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
you are a party or (z) if an Event of Default has occurred and is continuing,
to the extent you may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under your Notes and this Agreement. Each holder of a Note, by
its acceptance of a Note, will be deemed to have agreed to be bound by and to
be entitled to the benefits of this
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American Homestar Corporation Note Purchase Agreement
Section 20 as though it were a party to this Agreement. On reasonable request
by the Company in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 20.
SECTION 21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and
such Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than
in this Section 21), such word shall be deemed to refer to such Affiliate in
lieu of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
SECTION 22. MISCELLANEOUS.
Section 22.1. Successors and Assigns. All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note) whether so
expressed or not.
Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or Make-Whole Amount or interest on any Note that is due on a date
other than a Business Day shall be made on the next succeeding Business Day
without including the additional days elapsed in the computation of the
interest payable on such next succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by
law) not invalidate or render unenforceable such provision in any other
jurisdiction.
Section 22.4. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to
action
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American Homestar Corporation Note Purchase Agreement
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
Section 22.5. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.
Section 22.6. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed
by, the law of the State of Illinois excluding choice-of-law principles of the
law of such State that would require the application of the laws of a
jurisdiction other than such State.
* * * * *
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American Homestar Corporation Note Purchase Agreement
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to
the Company, whereupon the foregoing shall become a binding agreement between
you and the Company.
Very truly yours,
AMERICAN HOMESTAR CORPORATION
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
----------------------------
Its President and Co. CEO
The foregoing is hereby agreed
to as of the date thereof.
[ADD PURCHASER SIGNATURE BLOCKS]
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INFORMATION RELATING TO PURCHASERS
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE $9,800,000
COMPANY
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due June 15, 2007, PPN
026651 A* 0, principal or interest") to:
Citibank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ : PRACTISING LAW INSTITUTE. 10043
ABA No. ▇▇▇▇▇▇▇▇▇
For MassMutual Long Term Pool
Account No. 4067-3488
Re: Description of security, principal and interest split
with telephone advice to the Securities Custody and Collection Department of
Massachusetts Mutual Life Insurance Company at (▇▇▇) ▇▇▇-▇▇▇▇.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed to:
Attention: Securities Custody and Collection Department, F 381
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
42
SCHEDULE A
(to Note Purchase Agreement)
43
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE $4,200,000
COMPANY
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal or interest") to:
Chase Manhattan Bank, N.A.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ : PRACTISING LAW INSTITUTE. 10081
ABA No. ▇▇▇▇▇▇▇▇▇
For MassMutual Pension Management
Account No. 910-▇▇▇▇▇▇▇
Re: Description of security, principal and interest split
with telephone advice to the Securities Custody and Collection Department of
Massachusetts Mutual Life Insurance Company at (▇▇▇) ▇▇▇-▇▇▇▇.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed to:
Attention: Securities Custody and Collection Department, F 381
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
44
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
ALLSTATE LIFE INSURANCE COMPANY $1,000,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇ $3,000,000
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ $1,500,000
Attention: Private Placements Department $3,000,000
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on or in respect of the Notes to be made by Fedwire transfer of
immediately available funds (identifying each payment with name of the Issuer,
the Private Placement Number preceded by "DPP" and the payment as principal,
interest or premium) in the exact format as follows:
BBK = ▇▇▇▇▇▇ Trust and Savings Bank
ABA #▇▇▇▇▇▇▇▇▇
BNF = Allstate Life Insurance Company
Collection Account #▇▇▇-▇▇▇-▇
ORG = [Name of Issuer]
OBI = DPP - 026651 A* O C
Payment Due Date (MM/DD/YY) C
P ______ (Enter "P" and the amount of principal being remitted,
for example, P5000000.00) C
I ______ (Enter "I" and the amount of interest being remitted,
for example, I225000.00)
Notices
All notices of scheduled payments and written confirmation of each such wire
transfer, to be sent to:
Allstate Insurance Company
Investment Operations-Private Placements
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
All financial reports, compliance certificates and all other written
communications, including notice of prepayments to be addressed as first
provided above.
A-4
45
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
Securities should be delivered to:
Citibank, Federal Savings Bank
Citicorp Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
4th Floor, Zone 6
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
For Allstate Life Insurance Company/Safekeeping Account No. 846627
A-5
46
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
ALLSTATE LIFE INSURANCE COMPANY $1,500,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Private Placements Department
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on or in respect of the Notes to be made by Fedwire transfer of
immediately available funds (identifying each payment with name of the Issuer,
the Private Placement Number preceded by "DPP" and the payment as principal,
interest or premium) in the exact format as follows:
BBK = ▇▇▇▇▇▇ Trust and Savings Bank
ABA #▇▇▇▇▇▇▇▇▇
BNF = Allstate Life Insurance Company
Collection Account #▇▇▇-▇▇▇-▇
ORG = [Name of Issuer]
OBI = DPP - 026651 A* O C
Payment Due Date (MM/DD/YY) C
P ______ (Enter "P" and the amount of principal being remitted,
for example, P5000000.00) C
I ______ (Enter "I" and the amount of interest being remitted,
for example, I225000.00)
Notices
All notices of scheduled payments and written confirmation of each such wire
transfer, to be sent to:
Allstate Insurance Company
Investment Operations-Private Placements
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
All financial reports, compliance certificates and all other written
communications, including notice of prepayments to be addressed as first
provided above.
A-6
47
Name of Nominee in which Notes are to be issued: Citibank, Federal Savings
Bank as Collateral Agent and Trustee Under the Security and Trust Agreement
Dated as of September 1, 1993 (Northbrook Life Insurance Company, Secured Party
and Beneficiary)
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
Securities should be delivered to:
Citibank, Federal Savings Bank
Citicorp Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
4th Floor, Zone 6
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
For Allstate Life Insurance Company/Safekeeping Account No. 846635
A-7
48
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
THE NORTHWESTERN MUTUAL LIFE $10,000,000
INSURANCE COMPANY
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Securities Department
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal, premium or interest") to:
Bankers Trust Company (ABA #0210-01033)
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Insurance ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
for credit to: The Northwestern Mutual Life Insurance Company
Account Number ▇▇-▇▇▇-▇▇▇
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment
to be addressed, Attention: Investment Operations.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
A-8
49
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
NORTHERN LIFE INSURANCE COMPANY $4,500,000
c/o ReliaStar Investment Research, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal, premium or interest") to:
First National Bank N.A./Mpls.
ABA #▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: Securities Accounting
Ref: Issuer, Cusip, Coupon & Maturity
for credit to: Northern Life Insurance Company
Account Number 1602-3237-6105
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
Deliver Securities to:
ReliaStar Investment Research, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
A-9
50
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
WASHINGTON SQUARE ADVISERS PRIVATE $2,500,000
PLACEMENT TRUST FUND
c/o Washington Square Advisers, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal, premium or interest") to:
First National Bank N.A./Mpls.
ABA #▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Ref: Issuer, Cusip, Coupon & Maturity
for credit to: Washington Square Advisers Private Placement Trust Fund
Account Number: ▇▇▇▇▇▇▇▇
F/F/C First Trust Company
A/C 180121167365
ITG A/C 47300020
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
Deliver Securities to:
ReliaStar Investment Research, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
A-10
51
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
RELIASTAR BANKERS SECURITY LIFE $1,000,000
INSURANCE COMPANY
c/o ReliaStar Investment Research, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal, premium or interest") to:
Chase Manhattan
ABA #▇▇▇▇▇▇▇▇▇
New York, NEW YORK : PRACTISING LAW INSTITUTE.
Ref: Issue Name, PPN and P&I Breakdown
for credit to: ReliaStar Bankers Security Life Insurance Company
A/C #544755102
A/C #1960 Dept 571 NonStandard Securities
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: ▇▇▇▇▇▇ & CO.
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
Deliver Securities to:
ReliaStar Investment Research, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
A-11
52
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
RELIASTAR UNITED SERVICES LIFE $1,000,000
INSURANCE COMPANY
c/o ReliaStar Investment Research, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal, premium or interest") to:
Bankers Trust
New York, New York
ABA #▇▇▇▇▇▇▇▇▇
Ref: Security description and P&I Breakdown
for credit to: ReliaStar United Services Life Insurance Company
Account Number ▇▇-▇▇▇-▇▇▇
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: ▇▇▇▇▇▇▇ & CO.
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
Deliver Securities to:
ReliaStar Investment Research, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
A-12
53
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
GREAT NORTHERN INSURED ANNUITY CORPORATION $6,000,000
Two Union Square
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Investment Department, ▇▇▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal, premium or interest") to:
Bankers Trust Company
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ABA #▇▇▇▇▇▇▇▇▇
Attention: ▇▇-▇▇▇-▇▇▇
Account Number 97835
Notices
All notices with respect to payments and written confirmation of each such
payment, to be addressed:
Great Northern Insured Annuity Corporation
▇/▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Investment Accounting, 14th Floor
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
All other notices and communications to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: ▇▇▇▇▇▇▇ & CO.
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
A-13
54
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
▇▇▇▇▇▇ INVESTORS LIFE INSURANCE COMPANY $2,900,000
c/o Zurich Investment Management, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal, premium and/or Make Whole Amount") to:
HARE & Co - Account No. 195279
at
The Bank of New York
ABA No.: ▇▇▇▇▇▇▇▇▇
BNF
IOC 566
Attention: Security Income Collection
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: HARE & Co
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
A-14
55
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
FEDERAL ▇▇▇▇▇▇ LIFE ASSURANCE COMPANY $1,400,000
c/o Zurich Investment Management, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal, premium and/or Make Whole Amount") to:
HARE & Co - Account No. 195269
at
The Bank of New York
ABA No.: ▇▇▇▇▇▇▇▇▇
BNF
IOC 566
Attention: Security Income Collection
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: HARE & Co
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
A-15
56
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
ZURICH LIFE INSURANCE COMPANY $200,000
OF AMERICA
c/o Zurich Investment Management, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal, premium and/or Make Whole Amount") to:
HARE & Co - Account No. 399609
at
The Bank of New York
ABA No.: ▇▇▇▇▇▇▇▇▇
BNF
IOC 566
Attention: Security Income Collection
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: HARE & Co
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
A-16
57
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
FIDELITY LIFE ASSOCIATION (COINSURANCE 92) $175,000
c/o Zurich Investment Management, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal, premium and/or Make Whole Amount") to:
HARE & Co - Account No. 195270
at
The Bank of New York
ABA No.: ▇▇▇▇▇▇▇▇▇
BNF
IOC 566
Attention: Security Income Collection
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: HARE & Co
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
A-17
58
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
FIDELITY LIFE ASSOCIATION (COINSURANCE) $175,000
c/o Zurich Investment Management, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal, premium and/or Make Whole Amount") to:
HARE & Co - Account No. 195272
at
The Bank of New York
ABA No.: ▇▇▇▇▇▇▇▇▇
BNF
IOC 566
Attention: Security Income Collection
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: HARE & Co
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
A-18
59
NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
FIDELITY LIFE ASSOCIATION $150,000
c/o Zurich Investment Management, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal, premium and/or Make Whole Amount") to:
HARE & Co - Account No. 195271
at
The Bank of New York
ABA No.: ▇▇▇▇▇▇▇▇▇
BNF
IOC 566
Attention: Security Income Collection
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: HARE & Co
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
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NAME AND ADDRESS OF PURCHASER PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
AMERICAN BANKERS LIFE ASSURANCE $4,000,000
COMPANY OF FLORIDA
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ ▇▇▇▇▇▇
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal or interest") to:
The Chase Manhattan Bank, N.A.
ABA #▇▇▇▇▇▇▇▇▇
For the account of: American Bankers Life Assurance Company of Florida
Account No. 144056361
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
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NAME AND ADDRESS OF PURCHASER
PRINCIPAL AMOUNT
OF NOTES
TO BE PURCHASED
PROVIDENT MUTUAL LIFE INSURANCE COMPANY $3,000,000
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Securities Investment Department
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 8.32% Senior Notes due July 10, 2007, PPN
026651 A* 0, principal, premium or interest") to:
PNC Bank
(ABA #031-000-053)
Broad and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
for credit to: Provident Mutual Life Insurance Company
Account Number ▇▇-▇▇▇▇-▇▇▇▇
Notices
All notices and communications requiring overnight express delivery service
should be addressed to:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
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DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or
indirectly, 10% or more of any class of voting or equity interests. As used in
this definition, "Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise. Unless the context otherwise clearly requires, any reference to an
"Affiliate" is a reference to an Affiliate of the Company.
"Asset Disposition" means any Transfer except:
(a) any
(i) Transfer from a Restricted Subsidiary to the Company
or a Wholly-Owned Restricted Subsidiary; and
(ii) Transfer from the Company to a Restricted Subsidiary
(other than a Wholly-Owned Subsidiary) or from a Restricted Subsidiary
to another Restricted Subsidiary, which in either case is for Fair
Market Value, so long as immediately before and immediately after the
consummation of any such Transfer and after giving effect thereto, no
Default or Event of Default exists; and
(b) any Transfer made in the ordinary course of business and
involving only property that is either (i) inventory held for sale or (ii)
equipment, fixtures, supplies or materials no longer required in the operation
of the business of the Company or any of its Restricted Subsidiaries or that is
obsolete.
"Business Day" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Dallas, Texas or New York, New York are
required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and
the incurrence of a liability in accordance with GAAP.
63
SCHEDULE B
(to Note Purchase Agreement)
64
"Capital Lease Obligation" means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
"Cash in Transit" shall mean any asset on the Company's balance sheet
representing money due for the sale of manufactured homes for which a financing
commitment has been obtained (which commitment provides for a closing and
funding not more than 60 days after the date of such commitment) and a down
payment has been received by the Company from the purchaser thereof.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Company" means American Homestar Corporation, a Texas corporation.
"Confidential Information" is defined in Section 20.
"Consolidated Assets" means, at any time, the total assets of the
Company and its Restricted Subsidiaries which would be shown as assets on a
consolidated balance sheet of the Company and its Restricted Subsidiaries as of
such time prepared in accordance with GAAP, after eliminating all amounts
properly attributable to minority interests, if any, in the stock and surplus
of Restricted Subsidiaries.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Company and its Restricted Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between the Company and its
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and its Restricted Subsidiaries in accordance with GAAP, provided that there
shall be excluded:
(a) the income (or loss) of any Person accrued prior to the
date it became a Restricted Subsidiary or is merged into or consolidated with
the Company or a Restricted Subsidiary, and the income (or loss) of any Person,
substantially all of the assets of which have been acquired in any manner,
realized by such other Person prior to the date of acquisition,
(b) the income (or loss) of any Person (other than a
Restricted Subsidiary) in which the Company or any Restricted Subsidiary has an
ownership interest, except to the extent that any such income has been actually
received by the Company or such Restricted Subsidiary in the form of cash
dividends or similar cash distributions,
(c) without limiting the provisions of Section 10.11, the
undistributed earnings of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or
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similar distributions by such Restricted Subsidiary is not at the time
permitted by the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Restricted Subsidiary,
(d) any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was made out of income
accrued during such period,
(e) any aggregate net gain (but not any aggregate net loss)
during such period arising from the sale, conversion, exchange or other
disposition of capital assets (such term to include, without limitation, (i)
all non-current assets and, without duplication, (ii) the following, whether or
not current: all fixed assets, whether tangible or intangible, all inventory
sold in conjunction with the disposition of fixed assets, and all Securities),
(f) any gains resulting from any write-up of any assets (but
not any loss resulting from any write-down of any assets),
(g) any gain arising from the acquisition of any Security, or
the extinguishment, under GAAP, of any Debt, of the Company or any Restricted
Subsidiary,
(h) any net income or gain (but not any net loss) during such
period from (i) any change in accounting principles in accordance with GAAP,
(ii) any prior period adjustments resulting from any change in accounting
principles in accordance with GAAP, (iii) any extraordinary or non-recurring
items, or (iv) any discontinued operations or the disposition thereof,
(i) any deferred credit representing the excess of equity in
any Restricted Subsidiary at the date of acquisition over the cost of the
investment in such Restricted Subsidiary,
(j) in the case of a successor to the Company by
consolidation or merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer of
assets, and
(k) any portion of such net income that cannot be freely
converted into United States Dollars.
"Consolidated Net Worth" means, at any time,
(a) the total assets of the Company and its Restricted
Subsidiaries which would be shown as assets on a consolidated balance sheet of
the Company and its Restricted Subsidiaries as of such time prepared in
accordance with GAAP, minus
(b) the total liabilities of the Company and its Restricted
Subsidiaries which would be shown as liabilities on a consolidated balance
sheet of the Company and its
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66
Restricted Subsidiaries as of such time prepared in accordance with GAAP,
including all amounts properly attributable to minority interests, if any, in
the stock and surplus of Restricted Subsidiaries.
"Debt" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including, without limitation, all liabilities created
or arising under any conditional sale or other title retention agreement with
respect to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed or
otherwise become liable for such liabilities); and
(e) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (d) hereof.
Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (e) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" means that rate of interest that is the greater of (i)
2.0% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii) 2.0% over the rate of interest publicly
announced by Citibank, N.A. in New York, New York, or any successor thereof, as
its "base" or "prime" rate.
"Distribution" means, in respect of any corporation, association or
other business entity:
(a) dividends or other distributions or payments on capital stock or
other equity interest of such corporation, association or other business entity
(except distributions in such stock or other equity interest); and
(b) the redemption or acquisition of such stock or other equity
interests or of warrants, rights or other options to purchase such stock or
other equity interests (except when solely in exchange for such stock or other
equity interests) unless made, contemporaneously, from the net proceeds of a
sale of such stock or other equity interests.
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67
"Earnings Before Interest, Taxes and Rent" means with respect to any
period, Consolidated Net Income of the Company and its Restricted Subsidiaries
for such period plus all amounts deducted in the computation thereof on account
of (a) Interest Charges for such period, (b) Lease Rentals for such period and
(c) taxes imposed on or measured by income or excess profits of the Company and
its Restricted Subsidiaries for such period.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, at any time and with respect to any
property, the sale value of such property that would be realized in an
arm's-length sale at such time between an informed and willing buyer and an
informed and willing seller (neither being under a compulsion to buy or sell).
"Floor Plan Financing" means all working capital Debt of the Company
incurred to finance manufactured homes inventory held and available for sale,
which Debt is required to be reduced substantially concurrently with the sales
of such inventory out of the proceeds of such sales.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts jurisdiction
over any properties of the Company or any Subsidiary, or
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68
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any Indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such Indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such Indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any other
Person or otherwise to advance or make available funds for the purchase or
payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of any other Person to make payment of the
Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or obligation
against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the obligor
under any Guaranty, the Indebtedness or other obligations that are the subject
of such Guaranty shall be assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety,
the removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to
Section 13.1.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
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(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under any
conditional sale or other title retention agreement with respect to any such
property);
(c) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed or
otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account by
banks and other financial institutions (whether or not representing obligations
for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (f) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
"Institutional Investor" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 10% of the aggregate principal
amount of the Notes then outstanding, and (c) any bank, trust company, savings
and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.
"Interest Charges" means, with respect to any period, the sum (without
duplication) of the following (in each case, eliminating all offsetting debits
and credits between the Company and its Restricted Subsidiaries and all other
items required to be eliminated in the course of the preparation of
consolidated financial statements of the Company and its Restricted
Subsidiaries in accordance with GAAP): (a) all interest in respect of Debt of
the Company and its Restricted Subsidiaries (including imputed interest on
Capital Lease Obligations) deducted in determining Consolidated Net Income for
such period, and (b) all debt discount and expense amortized or required to be
amortized in the determination of Consolidated Net Income for such period.
"Investment" means any investment, made in cash or by delivery of
property, by the Company or any of its Restricted Subsidiaries (i) in any
Person, whether by acquisition of stock, indebtedness or other obligation or
Security, or by loan, Guaranty, advance, capital contribution or otherwise, or
(ii) in any property.
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"Lease Rentals" means, with respect to any period, the sum of the
rental and other obligations required to be paid during such period by the
Company or any Restricted Subsidiary as lessee under all leases of real or
personal property (other than Capital leases), excluding any amount required to
be paid by the lessee (whether or not therein designated as rental or
additional rental) on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, provided that, if at the date of
determination, any such rental or other obligations (or portions thereof) are
contingent or not otherwise definitely determinable by the terms of the related
lease, the amount of such obligations (or such portion thereof) (i) shall be
assumed to be equal to the amount of such obligations for the period of 12
consecutive calendar months immediately preceding the date of determination or
(ii) if the related lease was not in effect during such preceding 12-month
period, shall be the amount estimated by a Senior Financial Officer of the
Company on a reasonable basis and in good faith.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 8.6.
"Manufactured Homes" means any mobile, modular and manufactured homes.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the
Company to perform its obligations under this Agreement and the Notes, or (c)
the validity or enforceability of this Agreement or the Notes.
"Memorandum" is defined in Section 5.3.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"Net Working Capital" means Total Current Assets minus Total Current
Liabilities, as determined in accordance with GAAP.
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
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"Other Agreements" is defined in Section 2.
"Other Purchasers" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any
liability.
"Preferred Stock" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"Priority Debt" means (i) all Debt of the Restricted Subsidiaries and
(but without duplication) (ii) all Debt of the Company and its Restricted
Subsidiaries secured by Liens permitted under Section 10.10 (excluding Sections
10.10(f) and (g)).
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, ▇▇▇▇▇▇
or inchoate. AQPAM Exemption" means Prohibited Transaction Class Exemption
84-14 issued by the United States Department of Labor.
"Required Holders" means, at any time, the holders of at least 66-2/3%
in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this agreement.
"Restricted Investments" means all Investments except the following:
(a) property to be used in the ordinary course of business of the
Company and its Restricted Subsidiaries;
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(b) current assets arising from the sale of goods and services in
the ordinary course of business of the Company and its Restricted Subsidiaries;
(c) Investments in one or more Restricted Subsidiaries or any Person
that concurrently with such Investment becomes a Restricted Subsidiary,
(d) Investments in United States Governmental Securities, provided
that such obligations mature within 365 days from the date of acquisition
thereof;
(e) Investments in certificates of deposit or banker's acceptances
issued by an Acceptable Bank, provided that such obligations mature within 365
days from the date of acquisition thereof;
(f) Investments in commercial paper given the highest rating by a
credit rating agency of recognized national standing and maturing not more than
270 days from the date of creation thereof;
(g) Investments in Repurchase Agreements; and
(h) participations purchased by the Company in Floor Plan Financing.
As of any date of determination, each Restricted Investment shall be valued at
the greater of
(x) the amount at which such Restricted Investment is shown on the
books of the Company or any of its Restricted Subsidiaries (or zero if such
Restricted Investment is not shown on any such books); and
(y) either
(i) in the case of any Guaranty of the obligation of any
Person, the amount which the Company or any of its Restricted
Subsidiaries has paid on account of such obligation less any recoupment
by the Company or such Subsidiary of any such payments, or
(ii) in the case of any other Restricted Investment, the
excess of (x) the greater of (A) the amount originally entered on the
books of the Company or any of its Restricted Subsidiaries with
respect thereto and (B) the cost thereof to the Company or its
Restricted Subsidiary over (y) any return of capital (after income
taxes applicable thereto) upon such Restricted Investment through the
sale or other liquidation thereof or part thereof or otherwise.
As used in this definition of "Restricted Investments":
"Acceptable Bank" means any bank or trust company (i) which is
organized under the laws of the United States of America or any State thereat
(ii) which has capital surplus and undivided
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profits at least $250,000,000, and (iii) whose long-term unsecured debt
obligations (or the long-term unsecured debt obligations of the bank holding
company owning all of the capital stock of such bank or trust company) shall
have been given a rating of "A" or better by S&P, "A2" or better by Moody's or
an equivalent rating by any other credit rating agency of recognized national
standing.
"Acceptable Broker-Dealer" means any Person other than natural person
(i) which is registered as a broker or dealer pursuant to the Exchange Act and
(ii) whose long-term unsecured debt obligations shall have been given a rating
of "A" or better by S&P, "A2" or better or Moody's by an equivalent rating by
any other credit rating agency of recognized national standing.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Repurchase Agreement" means any written agreement
(a) that provides for (i) the transfer of one or more United States
Governmental Securities in an aggregate principal amount at least equal to the
amount of the Transfer Price (defined below) to the Company or any of its
Subsidiaries from an Acceptable Bank or an Acceptable Broker-Dealer against a
transfer of funds (the "Transfer Price") by the Company or such Subsidiary to
such Acceptable Bank or Acceptable Broker-Dealer, and (ii) a simultaneous
agreement by the Company or such Subsidiary, in connection with such transfer
of funds, to transfer to such Acceptable Bank or Acceptable Broker-Dealer the
same or substantially similar United States Governmental Securities for a price
not less than the Transfer Price plus a reasonable return thereon at a date
certain not later than 365 days after such transfer of funds,
(b) in respect of which the Company or such Subsidiary shall have
the right, whether by contract or pursuant to applicable law, to liquidate such
agreement upon the occurrence of any default thereunder, and
(c) in connection with which the Company or such Subsidiary, or an
agent thereat shall have taken all action required by applicable law or
regulations to perfect a Lien in such United States Governmental Securities.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc.
"United States Governmental Security" means any direct obligation of,
or obligation guaranteed by, the United States of America, or any agency
controlled or supervised by or acting as an instrumentality of the United
States of America pursuant to authority granted by the Congress of the United
States of America, so long as such obligation or guarantee shall have the
benefit of the full faith and credit of the United States of America which
shall have been pledged pursuant to authority granted by the Congress of the
United States of America.
"Restricted Payment" means
B-12
74
(a) any Distribution in respect of the Company or any Restricted
Subsidiary of the Company (other than on account of capital stock or other
equity interests of a Restricted Subsidiary of the Company owned legally and
beneficially by the Company or another Restricted Subsidiary of the Company),
including, without limitation, any Distribution resulting in the acquisition by
the Company of Securities which would constitute treasury stock, and
(b) any payment, repayment, redemption, retirement, repurchase or
other acquisition, direct or indirect, by the Company or any Restricted
Subsidiary of, on account of, or in respect of, the principal of any
Subordinated Debt (or any installment thereof) prior to the regularly scheduled
maturity date thereof (as in effect on the date such Subordinated Debt was
originally incurred).
For purposes of this Agreement, the amount of any Restricted Payment
made in property shall be the greater of (x) the Fair Market Value of such
property (as determined in good faith by the board of directors (or equivalent
governing body) of the Person making such Restricted Payment) and (y) the net
book value thereof on the books of such Person, in each case determined as of
the date on which such Restricted Payment is made.
"Restricted Subsidiary" means any Subsidiary so designated on Schedule
5.4 and any other Subsidiary (i) which is organized under the laws of the
United States or any State thereof; (ii) which conducts substantially all of
its business and has substantially all of its assets within the United States;
and (iii) of which more than 80% (by number of votes) of the Voting Stock is
beneficially owned, directly or indirectly, by the Company.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Security" has the meaning set forth in Section 2(1) of the Securities
Act.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"Significant Subsidiary" means Oak Creek Housing Corporation, American
Homestar Financial Services, Inc. and Nationwide Housing Corporation.
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries owns sufficient equity or
voting interests to enable it or them (as a group) ordinarily, in the absence
of contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person
or one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of
its Subsidiaries).
B-13
75
Unless the context otherwise clearly requires, any reference to a "Subsidiary"
is a reference to a Subsidiary of the Company.
"Subsidiary Stock" means, with respect to an Person, the stock (or any
options or warrants to purchase stock or other Securities exchangeable for or
convertible into stock) of any Subsidiary of such Person.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"Total Capitalization" means as of the date of any determination
thereof, the sum of (a) Total Debt plus (b) Consolidated Net Worth, determined
on a consolidated basis in accordance with GAAP.
"Total Current Assets" means, at any time, the total assets of the
Company and its Restricted Subsidiaries which would be shown as current assets
on a balance sheet of the Company and its Restricted Subsidiaries prepared in
accordance with GAAP at such time.
"Total Current Liabilities" means, at any time, the total liabilities
of the Company and its Restricted Subsidiaries which would be shown as current
liabilities on a balance sheet of the Company and its Restricted Subsidiaries
prepared in accordance with GAAP at such time.
"Total Debt" means, as of the date of any determination thereof, the
sum of (i) Total Senior Debt plus (ii) Total Subordinated Debt.
"Total Interest and Rent Expense" means, with respect to any period,
the sum of (a) Interest Charges for such period and (b) Lease Rentals for such
period.
"Total Senior Debt" means, as of the date of any determination thereof,
(i) all Debt of the Company and its Restricted Subsidiaries other than Total
Subordinated Debt minus (ii) Cash in Transit from financial institutions.
"Total Subordinated Debt" means and includes all unsecured Debt of the
Company which (i) has a remaining average life (determined in accordance with
the procedures set forth in Section 8.6) which is longer than the Remaining
Average Life (as defined in Section 8.6) of the Notes, and (ii) is subject to
subordination provisions acceptable to the holders of the Notes.
B-14
76
"Transfer" means, with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its
property, including, without limitation, Subsidiary Stock.
"Unrestricted Subsidiary" means any Subsidiary which is not a
Restricted Subsidiary.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-Owned Restricted Subsidiary" means, at any time, any Restricted
Subsidiary one hundred percent (100%) of all of the equity interests (except
directors' qualifying shares) and voting interests of which are owned by any
one or more of the Company and the Company's Wholly-Owned Subsidiaries at such
time.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or more
of the Company and the Company's other Wholly-Owned Subsidiaries at such time.
B-15
77
CHANGES IN CORPORATE STRUCTURE
The current corporate structure, as of June 30, 1997, is as set forth
on the Corporate Organization Chart provided in the Memorandum.
SCHEDULE 4.9
(to Note Purchase Agreement)
78
SUBSIDIARIES OF THE COMPANY AND
OWNERSHIP OF SUBSIDIARY STOCK,
AFFILIATES AND DIRECTORS AND SENIOR OFFICERS
1. RESTRICTED SUBSIDIARIES
PERCENTAGE OF CAPITAL
STOCK OR SIMILAR EQUITY
NATURE AND INTERESTS OWNED BY THE
JURISDICTION OF COMPANY AND EACH
NAME OF SUBSIDIARY INCORPORATION SUBSIDIARY
-------------------------------- --------------- -----------------------
Nationwide Housing Systems, Inc. Texas 100%
Nationwide Housing Corporation Texas 100%
Nationwide West, Inc. Texas 100%
Associated Retailers Group, Inc. Texas 100%
Nationwide NC Homes, Inc. Texas 100%
American Homestar Financial Services, Inc. Texas 100%
Western Insurance Agency, Inc. Texas 100%
Lifestar Reinsurance, Ltd. Turks & Caicos 100%
Oak Creek Housing Corporation Texas 100%
American Homestar of Burleson, Inc. Texas 100%
American Homestar of Lancaster, Inc. Texas 100%
Oak Creek Homes, Inc. Nevada 100%
Heartland Homes, Inc. North Carolina 100%
Guerdon Holdings, Inc. Delaware 100%
Guerdon Homes, Inc. Delaware 100%
Brilliant Holding Corporation Delaware 100%
Brilliant Homes Corporation Alabama 100%
Brilliant Carriers, Inc. Alabama 100%
SCHEDULE 5.4
(to Note Purchase Agreement)
79
2. UNRESTRICTED SUBSIDIARIES
PERCENTAGE OF CAPITAL
STOCK OR SIMILAR EQUITY
NATURE AND INTERESTS OWNED BY THE
JURISDICTION OF COMPANY AND EACH
NAME OF SUBSIDIARY INCORPORATION SUBSIDIARY
-------------------------------- --------------- -----------------------
Roadmasters Transport Company, Inc. Texas 51%
3. NAME OF AFFILIATE (OTHER THAN SUBSIDIARIES):
PERCENTAGE OF CAPITAL
STOCK OR SIMILAR EQUITY
NATURE AND INTERESTS OWNED BY THE
JURISDICTION OF COMPANY AND EACH
NAME OF AFFILIATE INCORPORATION SUBSIDIARY
------------------------------------------------- --------------- -----------------------
21st Century Mortgage Corporation Delaware 50 %
Woodperfect, L.P., an Alabama Limited Partnership Alabama 16.4%
Woodperfect, Inc. Alabama 20.4%
4. NAMES OF DIRECTORS AND SENIOR OFFICERS AND OFFICE(S) HELD:
A. DIRECTORS
Lad ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
-2-
80
B. OFFICERS
NAME OFFICE
----------------------- ----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Chairman and Co-Chief Executive Officer
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. President and Co-Chief Executive Officer
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Executive Vice President, Chief Financial
Officer and Secretary
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Vice President and Treasurer
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. Vice President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President
-3-
81
FINANCIAL STATEMENTS
For each of the fiscal years ended May 31, 1992 through 1996.
SCHEDULE 5.5
(to Note Purchase Agreement)
82
TAXES
On April 30, 1997, the Internal Revenue Service (AIRS") issued a 30 Day
Letter notifying the Company of proposed adjustments to its federal income tax
for the year ended May 31, 1993. The IRS assessed the Company an additional
$345,748 which includes additional taxes of $210,282, interest of $93,410 and
penalties of $42,056. The Company filed a Protest with the IRS on June 30,
1997 disputing a large portion of the assessment. Of the $210,282 of
additional taxes assessed, the Company has protested an increase of $156,125 as
well as penalties totaling $42,056.
SCHEDULE 5.9
(to Note Purchase Agreement)
83
USE OF PROCEEDS
Repay existing Secured Bank Debt
Bank One 25.7
Deutsch (Brilliant) 8.0 33.7
-----
Reduce Net Floor Plan Indebtedness 26.7
Origination Costs 0.6
----
61.0
====
SCHEDULE 5.14
(to Note Purchase Agreement)
84
EXISTING INDEBTEDNESS
AS OF MAY 31, 1997
Indebtedness of the Company and its Subsidiaries as of May 31, 1997 was as
follows:
BALANCE
FINAL OUTSTANDING AS
OBLIGOR LENDER NATURE MATURITY OF MAY 31, 1997
------------- ----------- -------------------- ---------- ---------------
AHC/OCHC Bank One #1 Burleson Plant 4/1/2000 883,331
AHC/OCHC Bank One #2 Lancaster Plant 4/1/2000 883,331
▇▇▇/▇▇▇▇ ▇▇▇▇ ▇▇▇ #▇ ▇▇▇ ▇▇▇▇▇ Expansion/ 2/28/2002 2,018,331
Guerdon Acquisition
AHC/OCHC Bank One #5 Guerdon Acquisition 2/28/2002 4,111,905
AHC/OCHC Bank One #6 Guerdon Acquisition 2/28/2002 10,358,280
AHC/OCHC Bank One #7 Guerdon Acquisition 2/28/2002 6,805,555
AHC ▇▇▇ ▇▇▇▇▇▇▇ Heartland Acquisition 9/3/1998 750,000
AHC ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Heartland Acquisition 9/3/1998 750,000
(1)Heartland Homes Toyota Credit Equipment 10/11/1998 8,255
*Guerdon Homes, Inc. ▇▇▇▇▇▇▇▇▇ Property 12/1/2010 24,000
AHC/Nationwide Housing Bank One #3 Gulf Freeway Property 4/1/2000 636,000
Systems, Inc.
*Nationwide Housing Albuquerque-Land Albuquerque 7/1/2001 138,091
*Nationwide Housing JL Investments Burleson Property 11/1/2010 171,140
*Nationwide Housing ▇▇▇▇▇ ▇▇▇▇▇▇▇ Seguin Property 5/1/2002 38,742
*Nationwide Housing ▇▇▇ ▇▇▇▇▇▇ Seguin Property 5/1/2002 38,742
*Nationwide Housing ▇▇ ▇▇▇▇▇▇▇ Lake ▇▇▇▇▇▇▇ Property 4/1/2001 45,386
*Nationwide Housing ▇▇▇ ▇▇▇▇▇▇ Amarillo Property 11/1/2001 35,696
*Nationwide Housing ▇▇▇▇▇ ▇▇▇▇ Amarillo Property 11/1/2000 26,334
Associated Retailers Group, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Manu-Fac Acquisition 9/3/1997 250,000
Inc. ==========
27,973,119
----------------------
(1) Secured by Liens.
SCHEDULE 5.15
(to Note Purchase Agreement)
85
ENVIRONMENTAL MATTERS
▇▇▇▇, Brilliant and Guin, Alabama: Final Report-Environmental Investigation of
Brilliant Homes, dated February 25, 1997, prepared by Environmental Management
& Engineering, Inc.
Lynn, Alabama: Limited Phase II Environmental Investigation, dated February
14, 1997, prepared by Environmental Management & Engineering, Inc.
Lynn, Alabama: Groundwater Assessment Report, dated May 1, 1997, prepared by
▇▇▇▇▇▇▇▇ Engineering, Inc.
Lynn, Alabama: Phase I Environmental Site Assessment, dated July 1996,
prepared by ▇▇▇▇▇▇ Environmental Engineering, Inc.
SCHEDULE 5.18
(to Note Purchase Agreement)
86
[FORM OF NOTE]
American Homestar Corporation
8.32% Senior Note due JULY 10, 2007
No. [_________] [Date]
$[____________] PPN 026651 A* 0
FOR VALUE RECEIVED, the undersigned, AMERICAN HOMESTAR CORPORATION
(herein called the "Company"), a corporation organized and existing under the
laws of the State of Texas, hereby promises to pay to [________________], or
registered assigns, the principal sum of [________________] DOLLARS on July 10,
2007, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of 8.32% per annum from
the date hereof, payable semiannually, on the tenth day of July and January in
each year, commencing with the first of such dates next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b)
to the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 10.32% or (ii) 2.0% over the rate of interest
publicly announced by Citibank, N.A., or any successor thereof, from time to
time in New York, New York as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at The First National Bank of Chicago in Chicago, Illinois or at such
other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreements referred to
below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of July
10, 1997 (as from time to time amended, the "Note Purchase Agreements"),
between the Company and the respective Purchasers named therein and is entitled
to the benefits thereof. Each holder of this Note will be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreements and (ii) to have made the
representation set forth in Section 6 of the Note Purchase Agreements.
EXHIBIT 1
(to Note Purchase Agreement)
87
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreements. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreements, but not
otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
The Company and the holder hereof acknowledge and agree that the
interest rate or other forbearance payable on the Notes shall not exceed the
highest rate permitted under applicable law.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
AMERICAN HOMESTAR CORPORATION
By
---------------------------------
Its
E-1-2
88
FORM OF OPINION OF SPECIAL COUNSEL
TO THE COMPANY
The closing opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ L.L.P., special counsel to the
Company which is called for by Section 4.4(a) of the Note Purchase Agreements,
shall be dated the date of the Closing and addressed to you and the Other
Purchasers, shall be satisfactory in scope and form to you and the Other
Purchasers and shall be to the effect that:
1. The Company is a corporation, duly incorporated,
validly existing and in good standing under the laws of the State of
Texas, has the corporate power and the corporate authority to execute
and perform the Note Purchase Agreements and to issue the Notes and has
the full corporate power and the corporate authority to conduct the
activities in which it is now engaged and is duly licensed or qualified
as a foreign corporation and is in good standing as a foreign
corporation in each jurisdiction in which the character of the
properties owned or leased by it or the nature of the business
transacted by it makes such licensing or qualification necessary.
2. Each Note Purchase Agreement has been duly authorized
by all necessary corporate action on the part of the Company, has been
duly executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of
such principles is considered in a proceeding in equity or at law).
3. Each Significant Subsidiary is a corporation in good
standing under the laws of its jurisdiction of incorporation and is
duly licensed or qualified and is in good standing in each jurisdiction
in which the character of the properties owned or leased by it or the
nature of the business transacted by it makes such licensing or
qualification necessary and all of the issued and outstanding shares of
capital stock of each such Significant Subsidiary are owned by the
Company.
4. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed
and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
EXHIBIT 4.4(a)
(to Note Purchase Agreement)
89
5. No approval, consent or withholding of objection on
the part of, or filing, registration or qualification with, any
Governmental Authority, is necessary in connection with the execution,
delivery or performance by the Company of the Note Purchase Agreements
or the Notes.
6. The issuance of the Notes and the use of the proceeds
of the sale of the Notes in accordance with the provisions of and
contemplated by the Note Purchase Agreements do not violate or conflict
with Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.
7. The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Note Purchase Agreements
do not conflict with or result in any breach of any of the provisions
of or constitute a default under or result in the creation or
imposition of any Lien upon any of the property of the Company pursuant
to the provisions of the Articles of Incorporation or By-laws of the
Company or any agreement or other instrument known to such counsel to
which the Company is a party or by which the Company may be bound.
8. There are no proceedings pending or, to the knowledge
of such counsel, threatened against or affecting the Company or any
Subsidiary in any court or before any Governmental Authority which, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect.
9. Neither the Company nor any of its Subsidiaries is an
"investment company", or a company "controlled" by an "investment
company", as such terms are defined in the Investment Company Act of
1940, as amended.
10. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreements do not,
under existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
The opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ L.L.P. (i) shall cover such other matters
relating to the sale of the Notes as you and the Other Purchasers may
reasonably request and (ii) is limited to the laws of the State of Texas and
the Federal laws of the United States. With respect to matters of fact on
which such opinion is based, such counsel shall be entitled to rely on
appropriate certificates of public officials and officers of the Company.
E-4.4(a)-2
90
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
The closing opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, special counsel to the
Purchasers, called for by Section 4.4(b) of the Note Purchase Agreements, shall
be dated the date of Closing and addressed to you and the other Purchasers,
shall be satisfactory in form and substance to you and the other Purchasers and
shall be to the effect that:
1. The Company is a corporation, validly existing and in
good standing under the laws of the State of Texas and has the
corporate power and the corporate authority to execute and deliver the
Note Purchase Agreements and to issue the Notes.
2. Each Note Purchase Agreement has been duly authorized
by all necessary corporate action on the part of the Company, has been
duly executed and delivered by the Company and constitutes the legal,
valid and binding contract of the Company enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of
such principles is considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, and the Notes being
delivered on the date hereof have been duly executed and delivered by
the Company and constitute the legal, valid and binding obligations of
the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered
in a proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreements do not,
under existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
The opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall also state that the opinion of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ L.L.P. is satisfactory in scope and form to ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
and that, in their opinion, the Purchasers are justified in relying thereon.
EXHIBIT 4.4(b)
(to Note Purchase Agreement)
91
In rendering the opinion set forth in paragraph 1 above, ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Articles of Incorporation certified by, and a certificate of
good standing of the Company from, the Secretary of State of the State of Texas
and the By-laws of the Company. The opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ is limited
to the general business corporation law of the State of Illinois and the
Federal laws of the United States.
With respect to matters of fact upon which such opinion is based,
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ may rely on appropriate certificates of public officials and
officers of the Company and upon representations of the Company, the other
Purchasers and you delivered in connection with the issuance and sale of the
Notes.
E-4.4(b)-2