We are offering to exchange up to $300 million aggregate principal amount of our registered 5.125% Senior Notes due 2027 (the
exchange notes
), for the identical aggregate principal amount of our outstanding unregistered 5.125% Senior Notes due 2027, which were issued on June 6, 2017 (the
outstanding notes
). The aggregate principal
amount of the outstanding notes, and therefore, the aggregate principal amount of exchange notes which would be issued if all the outstanding notes were exchanged, is $300 million. The exchange offer will expire at 5:00 p.m., New York City
time, on September 14, 2017 unless we extend the offer. Promptly following the expiration of the exchange offer, we will exchange the exchange notes for all outstanding notes that are validly tendered and not withdrawn prior to the expiration of the
exchange offer. You may withdraw tenders of outstanding notes at any time prior to the expiration of the exchange offer. The terms of the exchange notes to be issued will be identical in all material respects to those of the outstanding notes,
except that the exchange notes do not have any transfer restrictions, registration rights or rights to additional interest. We will not receive any cash proceeds from the exchange offer.
The exchange notes are our unsecured senior obligations. The exchange notes rank equally with all of our other unsecured senior indebtedness.
Prior to the exchange offer, there has been no public market for the exchange notes. We do not currently intend to list the exchange notes
on a securities exchange or seek approval for quotation of the exchange notes on an automated quotation system. Therefore, it is unlikely that an active trading market for the exchange notes will develop.
The exchange agent for the exchange offer is Wells Fargo Bank, National Association.
DESCRIPTION OF THE EXCHANGE NOTES
As used below in this Description of the Exchange Notes section, the term
Issuer
means Meritage Homes
Corporation, a Maryland corporation, and its successors, but not any of its subsidiaries. The Issuer will issue the exchange notes described herein (which we sometimes refer to as the
Notes
or the
notes
) under
an indenture, dated as of June 6, 2017, among the Issuer, the Guarantors and Wells Fargo Bank, National Association, as trustee. The terms of the notes include those set forth in the indenture and those made part of the indenture by reference
to the Trust Indenture Act.
The following is a summary of the material terms and provisions of the notes. As used in this
Description of the Exchange Notes, the terms Notes and notes mean the series of the Issuers senior debt securities issued under the indenture designated as its 5.125% Senior Notes due 2027, in each case
except as otherwise expressly provided or as the context otherwise requires. The following summary does not purport to be a complete description of the notes and is subject to the detailed provisions of the indenture. You can find definitions of
certain terms used in this description under the heading Certain Definitions.
PRINCIPAL, MATURITY AND INTEREST
The notes will mature on June 6, 2027. The notes will bear interest at the rate shown on the cover page of this prospectus, payable on
June 6 and December 6 of each year, commencing on December 6, 2017, to Holders of record at the close of business on May 15 or November 15, as the case may be, immediately preceding the relevant interest payment date. Interest on the
notes will be computed on the basis of a
360-day
year of twelve
30-day
months.
The notes will be issued in registered form, without coupons, and in denominations of $2,000 and integral multiples of $1,000 in excess
thereof.
The Issuer may issue an unlimited amount of notes having identical terms and conditions to the notes being issued in this
offering (
Additional Notes
). Any Additional Notes will be part of the same issue as the notes being issued in this offering and will vote on all matters as one class with the notes being issued in this offering, including, without
limitation, waivers, amendments, redemptions and offers to purchase. For purposes of this Description of the Exchange Notes, references to the notes include Additional Notes, if any.
METHODS OF RECEIVING PAYMENTS ON THE NOTES
If a holder has given wire transfer instructions to the Issuer at least ten business days prior to the applicable payment date, the Issuer will
make all payments (but only to the extent the Issuer acts as its own paying agent) on such holders notes in accordance with those instructions. Otherwise, payments on the notes will be made at the office or agency of the paying agent and
registrar for the notes within the City and State of Minneapolis, Minnesota unless the Issuer elects to make interest payments (but only to the extent the Issuer acts as its own paying agent) by check mailed to the holders at their addresses set
forth in the register of holders.
RANKING
The notes will be general unsecured obligations of the Issuer. The notes will rank senior in right of payment to all future obligations of the
Issuer that are, by their terms, expressly subordinated in right of payment to the notes and
pari passu
in right of payment with all existing and future unsecured obligations of the Issuer that are not so subordinated. Each note guarantee
will be a general unsecured obligation of the Guarantor thereof and will rank senior in right of payment to all future obligations of such Guarantor that are, by their terms, expressly subordinated in right of payment to such note guarantee and
pari passu
in right of payment with all existing and future unsecured obligations of such Guarantor that are not so subordinated.
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The notes and each note guarantee will be effectively subordinated to secured Indebtedness of the
Issuer and the applicable Guarantor to the extent of the value of the assets securing such Indebtedness. Although the indenture contains limitations on the amount of additional Secured Debt that the Issuer and the Subsidiaries may incur, under
certain circumstances, the amount of this Indebtedness could be substantial. See Certain Covenants Restrictions on Secured Debt.
NOTE GUARANTEES
The Issuers
obligations under the notes and the indenture will be fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each Guarantor.
As of the date of the issuance of the notes offered by this offering memorandum, all of our Subsidiaries will be Guarantors (except for
Buckeye Land, L.L.C., Arcadia Ranch, L.L.C. and Sundance Buckeye, LLC).
However, our future Financial Services Subsidiaries will not be required to
guarantee the notes. See Certain Covenants Additional Note Guarantees. In the event of a bankruptcy, liquidation or reorganization of any of these
non-guarantor
Subsidiaries, these
non-guarantor
Subsidiaries will pay the holders of their debts and their trade creditors before they will be able to distribute any of their assets to us.
The obligations of each Guarantor under its note guarantee will be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its note guarantee or pursuant to
its contribution obligations under the indenture, result in the obligations of such Guarantor under its note guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law. However, this provision may not be
effective to protect the subsidiary guarantees from being voided under fraudulent conveyance law. Each Guarantor that makes a payment for distribution under its note guarantee is entitled to a contribution from each other Guarantor in a pro rata
amount based on adjusted net assets of each Guarantor.
In the event of a sale or other disposition of all of the assets of any Guarantor,
by way of merger, consolidation or otherwise, or a sale or other disposition of all of the Equity Interests of any Guarantor then held by the Issuer and the Subsidiaries, then that Guarantor will be released and relieved of any obligations under its
note guarantee.
OPTIONAL REDEMPTION
Prior to December 6, 2026, we may, at our option, redeem the notes in whole at any time or in part from time to time, on at least 30 but
not more than 60 days prior notice to holders, at a redemption price equal to the greater of:
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100% of the principal amount of the notes being redeemed, or
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the sum of the present values of the Remaining Scheduled Payments on the notes being redeemed, discounted to the date of redemption, on a semiannual basis, at the Treasury Rate plus 50 basis points (0.50%).
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On or after December 6, 2026, we may redeem all of the notes at any time at a redemption price equal to 100% of the
principal amount of the notes being redeemed plus accrued and unpaid interest on the notes to the redemption date.
In each case, we will
also pay accrued interest on the notes being redeemed to the date of redemption. In determining the redemption price and accrued interest, interest will be calculated on the basis of a
360-day
year consisting
of twelve
30-day
months.
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Any redemption or notice of redemption may, in the Issuers discretion, be subject to the
satisfaction of one or more conditions precedent, including the occurrence of a Change of Control, and any redemption date may be delayed in order to fulfill any such condition precedent by a notice delivered in writing to the trustee
Comparable Treasury Issue
means the United States Treasury security selected by the Reference Treasury Dealer as having a
maturity comparable to the remaining term of the notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of the notes.
Comparable Treasury Price
means, with respect to any redemption date, (1) the
average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if fewer than four such Reference Treasury Dealer Quotations are provided to the
trustee, the average of all such quotations.
Reference Treasury Dealer
means Citigroup Global Markets Inc. and its
successors;
provided, however
, that, if the foregoing ceases to be a primary U.S. Government securities dealer in the United States (a
Primary Treasury Dealer
), we will substitute another Primary Treasury Dealer.
Reference Treasury Dealer Quotation
means, with respect to the Reference Treasury Dealer and any redemption date, the
average, as determined by the Issuer, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by the Reference Treasury Dealer at 5:00 p.m., New
York City time, on the third business day preceding such redemption date.
Remaining Scheduled Payments
means, with
respect to any note, the remaining scheduled payments of the principal (or of the portion) thereof to be redeemed and interest thereon that would be due after the related redemption date but for such redemption;
provided
,
however
,
that, if such redemption date is not an interest payment date with respect to such note, the amount of the next succeeding scheduled interest payment thereon will be reduced by the amount of interest accrued thereon to such redemption date.
Treasury Rate
means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.
The Issuer may acquire notes by means other than a redemption, whether pursuant to an issuer tender offer, open market purchase or otherwise,
so long as the acquisition does not otherwise violate the terms of the indenture.
SELECTION AND NOTICE OF REDEMPTION
In the event that less than all of the notes are to be redeemed at any time pursuant to an optional redemption, selection of the notes for
redemption will be made by the trustee in compliance with the requirements of the principal national securities exchange, if any, on which the notes are listed or, if the notes are not then listed on a national securities exchange, pro rata, by lot
or by such method as may be required by DTCs procedures;
provided
,
however
, that no notes of a principal amount of $2,000 or less shall be redeemed in part.
Notice of redemption will be mailed by first-class mail (in the case of notes held in book entry form, sent by electronic transmission) at
least 30 but not more than 60 days before the date of redemption to each holder of notes to be redeemed at its registered address. If any note is to be redeemed in part only, the notice of redemption that relates to that note will state the portion
of the principal amount of the note to be redeemed. A new note in a principal amount equal to the unredeemed portion of the note will be issued in the name of the holder of the note
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upon cancellation of the original note. On and after the date of redemption, interest will cease to accrue on notes or portions thereof called for redemption so long as the Issuer has deposited
with the paying agent for the notes funds in satisfaction of the redemption price (including accrued and unpaid interest on the notes to be redeemed) pursuant to the indenture.
CHANGE OF CONTROL
Upon the occurrence of
a Change of Control Triggering Event, each holder will have the right to require that the Issuer purchase that holders notes for a cash price (the
Change of Control Purchase Price
) equal to 101% of the principal amount of
the notes to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase.
Within 30 days following a Change
of Control Triggering Event, the Issuer will mail, or caused to be mailed (in the case of notes held in book entry form, sent by electronic transmission), to the holders a notice:
(1) describing the transaction or transactions that constitute the Change of Control;
(2) offering to purchase, pursuant to the procedures required by the indenture and described in the notice, on a date specified
in the notice (which shall be a business day not earlier than 30 days nor later than 60 days from the date the notice is sent) and for the Change of Control Purchase Price, all notes properly tendered by such holder pursuant to such change of
control offer; and
(3) describing the procedures that holders must follow to accept the change of control offer.
The change of control offer is required to remain open for at least 20 business days or for such longer period as is required by law. The
Issuer will publicly announce the results of the change of control offer on or as soon as practicable after the date of purchase.
If a
change of control offer is made, there can be no assurance that the Issuer will have available funds sufficient to pay for all or any of the notes that might be delivered by holders seeking to accept the change of control offer. In addition, we
cannot assure you that in the event of a Change of Control Triggering Event the Issuer will be able to obtain the consents necessary to consummate a change of control offer from the lenders under agreements governing outstanding Indebtedness which
may prohibit the offer.
The provisions described above that require us to make a change of control offer following a Change of Control
Triggering Event will be applicable regardless of whether any other provisions of the indenture are applicable. Except as described above with respect to a Change of Control Triggering Event, the indenture does not contain provisions that permit the
holders of the notes to require that the Issuer purchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.
The Issuers obligation to make a change of control offer will be satisfied if a third party makes the change of control offer in the
manner and at the times and otherwise in compliance with the requirements applicable to a change of control offer made by the Issuer and purchases all notes properly tendered and not withdrawn under the change of control offer.
A Change of Control includes certain sales of all or substantially all of the assets of the Issuer and the Subsidiaries. The
phrase all or substantially all as used in the indenture (including as set forth under Certain Covenants Limitations on Mergers, Consolidations, Etc. below) varies according to the facts and
circumstances of the subject transaction, has no clearly established meaning under New York law (which governs the indenture) and is subject to judicial interpretation. Accordingly, in certain circumstances there may be a degree of uncertainty in
ascertaining whether a particular transaction would involve a disposition of all or substantially all of the assets of the Issuer, and therefore it may be unclear as to whether a Change of Control has occurred and whether the holders
have the right to require the Issuer to purchase notes.
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The Issuer will comply with applicable tender offer rules, including the requirements of Rule
14e-l
under the Exchange Act and any other applicable laws and regulations in connection with the purchase of notes pursuant to a change of control offer. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control provisions of the indenture, the Issuer shall comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of
Control provisions of the indenture by virtue of this compliance.
CERTAIN COVENANTS
In connection with the notes, we have not agreed to any financial covenants or any restrictions on the payment of dividends or the issuance or
repurchase of our securities. We have agreed to no covenants or other provisions to protect holders of the notes in the event of a highly leveraged transaction, other than with respect to certain change of control transactions. See
Change of Control.
Restrictions on Secured Debt
The indenture provides that the Issuer will not, and will not cause or permit a Restricted Subsidiary to, create, incur, assume or guarantee
any Secured Debt unless the notes will be secured equally and ratably with (or prior to) such Secured Debt, with certain exceptions. This restriction does not prohibit the creation, incurrence, assumption or guarantee of Secured Debt which is
secured by:
(1) Liens on model homes, homes held for sale, homes that are under contract for sale, contracts for the sale
of homes, land (improved or unimproved), manufacturing plants, warehouses or office buildings and fixtures and equipment located thereat, or thereon;
(2) Liens on assets of a Person existing at the time such Person is acquired or merged with or into or consolidated with the
Issuer or any such Restricted Subsidiary (and not created in anticipation or contemplation thereof);
(3) Liens arising
from conditional sales agreements or title retention agreements with respect to property acquired by the Issuer or a Restricted Subsidiary; and
(4) Liens securing Indebtedness of a Restricted Subsidiary owed to the Issuer or to a Wholly Owned Restricted Subsidiary of the
Issuer.
Additionally, such permitted Secured Debt includes any amendment, restatement, supplement, renewal, replacement, extension or
refunding in whole or in part, of Secured Debt permitted at the time of the original incurrence thereof.
In addition, the Issuer and its
Restricted Subsidiaries may create, incur, assume or guarantee Secured Debt, without equally or ratably securing the notes, if immediately thereafter the sum of (1) the aggregate principal amount of all Secured Debt outstanding (excluding
(i) Secured Debt permitted under clauses (1) through (4) above and (ii) any Secured Debt in relation to which the notes have been equally and ratably secured) and (2) all Attributable Debt in respect of Sale and Leaseback Transactions
(excluding Attributable Debt in respect of Sale and Leaseback Transactions satisfying the conditions set forth in clauses (1), (2) and (3) under Restrictions on Sale and Leaseback Transactions) as of the date of
determination would not exceed 20% of Consolidated Net Tangible Assets.
The provisions described above with respect to limitations on
Secured Debt are not applicable to
Non-
Recourse Land Financing by virtue of the definition of Secured Debt, and will not restrict or limit our or our Restricted Subsidiaries ability to create, incur,
assume or guarantee any unsecured Indebtedness, or of any subsidiary which is not a Restricted Subsidiary to create, incur, assume or guarantee any secured or unsecured Indebtedness.
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Restrictions on Sale and Leaseback Transactions
The indenture provides that the Issuer will not, and will not permit any Restricted Subsidiary to, enter into any Sale and Leaseback
Transaction, unless:
(1) written notice is promptly given to the trustee of the Sale and Leaseback Transaction;
(2) fair value is received by the Issuer or the relevant Restricted Subsidiary for the property sold (as determined in good
faith pursuant to a resolution of the board of directors of the Issuer delivered to the trustee); and
(3) the Issuer or
such Restricted Subsidiary, within 365 days after the completion of the Sale and Leaseback Transaction, applies an amount equal to the net proceeds therefrom either:
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to the redemption, repayment or retirement of debt securities of any series under the indenture (including the cancellation by the trustee of any debt securities of any series delivered by the Issuer to the trustee) or
Senior Indebtedness of the Issuer, or
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to the purchase by the Issuer or any Restricted Subsidiary of the Issuer of property substantially similar to the property sold or transferred.
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In addition, the Issuer and its Restricted Subsidiaries may enter into a Sale and Leaseback Transaction if immediately thereafter the sum of
(1) the aggregate principal amount of all Secured Debt outstanding (excluding Secured Debt permitted under clauses (1) through (4) described in Restrictions on Secured Debt, above or Secured Debt in relation to
which the notes have been equally and ratably secured) and (2) all Attributable Debt in respect of Sale and Leaseback Transactions (excluding Attributable Debt in respect of Sale and Leaseback Transactions satisfying the conditions set forth in
clauses (1), (2) and (3) above) as of the date of determination would not exceed 20% of Consolidated Net Tangible Assets.
Limitations on Mergers, Consolidations, Etc.
The Issuer will not, directly or indirectly, in a single transaction or a series of related transactions, (a) consolidate or merge with or into
(other than a merger that satisfies the requirements of clause (1) below with a Wholly Owned Restricted Subsidiary solely for the purpose of changing the Issuers jurisdiction of incorporation to another State of the United States), or
sell, lease, transfer, convey or otherwise dispose of or assign all or substantially all of the assets of the Issuer or the Issuer and its Restricted Subsidiaries (taken as a whole) or (b) adopt a plan of liquidation unless, in either case:
(1) either:
(a) the Issuer will be the surviving or continuing Person; or
(b) the Person formed by or surviving such consolidation or merger or to which such sale, lease, conveyance or other
disposition shall be made (or, in the case of a plan of liquidation, any Person to which assets are transferred) (collectively, the
Successor
) is a corporation or limited liability company organized and existing under the laws of
any State of the United States of America or the District of Columbia, and the Successor expressly assumes, by supplemental indenture in form and substance satisfactory to the trustee, all of the obligations of the Issuer under the notes, the
indenture and the Registration Rights Agreement;
provided
that at any time the Successor is a limited liability company, there shall be a
co-issuer
of the notes that is a corporation; and
(2) immediately after giving effect to such transaction and the assumption of the obligations as set forth in clause (1)(b)
above and the incurrence of any Indebtedness to be incurred in connection therewith, no Default shall have occurred and be continuing.
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Except as provided under the caption Note Guarantees, no Guarantor may
consolidate with or merge with or into another Person, whether or not affiliated with such Guarantor, unless:
(1) either:
(a) such Guarantor will be the surviving or continuing Person; or
(b) the Person formed by or surviving any such consolidation or merger assumes, by supplemental indenture in form and substance
satisfactory to the trustee, all of the obligations of such Guarantor under the note guarantee of such Guarantor, the indenture and the Registration Rights Agreement; and
(2) immediately after giving effect to such transaction, no Default shall have occurred and be continuing.
For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of
all or substantially all of the assets of one or more Restricted Subsidiaries, the Equity Interests of which constitute all or substantially all of the assets of the Issuer, will be deemed to be the transfer of all or substantially all of the assets
of the Issuer.
The Issuer shall deliver to the trustee on or prior to the consummation of a transaction proposed pursuant to clause 1(b)
of the first or second paragraph of this section above an officers certificate and an opinion of counsel stating that the proposed transaction and such supplemental indenture comply with the indenture and constitutes the legal, valid and
binding obligation of the Issuer, enforceable against it in accordance with its terms.
Upon any consolidation, combination or merger of
the Issuer or a Guarantor, or any transfer of all or substantially all of the assets of the Issuer in accordance with the foregoing, in which the Issuer or such Guarantor is not the continuing obligor under the notes or its note guarantee, the
surviving entity formed by such consolidation or into which the Issuer or such Guarantor is merged or to which the conveyance, lease or transfer is made will succeed to, and be substituted for, and may exercise every right and power of, the Issuer
or such Guarantor under the indenture, the notes and the note guarantees with the same effect as if such surviving entity had been named therein as the Issuer or such Guarantor and, except in the case of a conveyance, transfer or lease, the Issuer
or such Guarantor, as the case may be, will be released from the obligation to pay the principal of and interest on the notes or in respect of its note guarantee, as the case may be, and all of the Issuers or such Guarantors other
obligations and covenants under the notes, the indenture and its note guarantee, if applicable.
Notwithstanding the foregoing, any
Restricted Subsidiary may merge into the Issuer or another Restricted Subsidiary.
Additional Note Guarantees
If, after the Issue Date, the Issuer or any Restricted Subsidiary shall acquire or create another Restricted Subsidiary, then the Issuer shall
cause such Restricted Subsidiary to:
(1) execute and deliver to the trustee (a) a supplemental indenture in form and
substance satisfactory to the trustee pursuant to which such Restricted Subsidiary shall unconditionally guarantee all of the Issuers obligations under the notes and the indenture and (b) a notation of guarantee in respect of its note
guarantee; and
(2) deliver to the trustee one or more opinions of counsel that such supplemental indenture:
(a) has been duly authorized, executed and delivered by such Restricted Subsidiary; and
(b) constitutes a valid and legally binding obligation of such Restricted Subsidiary enforceable against it in accordance with
its terms.
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Reports
Whether or not required by the SEC, so long as any notes are outstanding, the Issuer will furnish to the trustee, within the time periods
specified in the SECs rules and regulations (including any grace periods or extensions permitted by the SEC):
(1)
all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms
10-Q
and
10-K
if the Issuer were required to file
these Forms, including a Managements Discussion and Analysis of Financial Condition and Results of Operations and, with respect to the annual information only, a report on the annual financial statements by the Issuers
independent registered public accounting firm; and
(2) all current reports that would be required to be filed with the SEC
on Form
8-K
if the Issuer were required to file these reports.
In addition, whether or not
required by the SEC, the Issuer will file a copy of all of the information and reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the SECs rules and regulations
(unless the SEC will not accept the filing) and make the information available to securities analysts and prospective investors upon request. The Issuer and the Guarantors have agreed that, for so long as any notes remain outstanding, the Issuer
will furnish to the holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Delivery of such reports, information and documents to the trustee is for informational purposes only and the trustees receipt of the
foregoing shall not constitute constructive or actual notice of any information contained therein, including the Issuers compliance with any of its covenants under the indenture (as to which the trustee is entitled to rely exclusively on the
officers certificate).
EVENTS OF DEFAULT
Each of the following is an
Event of Default
:
(1) failure by the Issuer to pay interest on any of the notes when it becomes due and payable and the continuance of any such
failure for 30 days;
(2) failure by the Issuer to pay the principal on any of the notes when it becomes due and payable,
whether at stated maturity, upon redemption, upon purchase, upon acceleration or otherwise;
(3) failure by the Issuer to
comply with any of its agreements or covenants described above under Certain Covenants Limitations on Mergers, Consolidations, Etc.;
(4) failure by the Issuer to comply with any other agreement or covenant in the indenture and continuance of this failure for
30 days after notice of the failure has been given to the Issuer by the trustee or by the holders of at least 25% of the aggregate principal amount of the notes then outstanding;
(5) default under any mortgage, indenture or other instrument or agreement under which there may be issued or by which there
may be secured or evidenced Indebtedness (other than
Non-Recourse
Land Financing) of the Issuer or any Restricted Subsidiary, whether such Indebtedness now exists or is incurred after the Issue Date, which
default:
(a) is caused by a failure to pay when due principal on such Indebtedness within the applicable express grace
period,
(b) results in the acceleration of such Indebtedness prior to its express final maturity, or
(c) results in the commencement of judicial proceedings to foreclose upon, or to exercise remedies under applicable law or
applicable security documents to take ownership of, the assets securing such Indebtedness,
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and in each case, the principal amount of such Indebtedness, together with any other Indebtedness with respect to
which an event described in clause (a), (b) or (c) has occurred and is continuing, aggregates (i) $40 million or more or (ii) such lesser amount as may be applicable to the corresponding event of default in any outstanding other
capital markets Indebtedness (other than
Non-Recourse
Land Financing) of the Issuer or any of its Restricted Subsidiaries which was outstanding on the Issue Date (the
cross acceleration
provisions
);
(6) one or more judgments or orders that exceed (i) $35 million or (ii) such lesser
amount as may be applicable to the corresponding event of default in any other outstanding capital market Indebtedness (other than
Non-
Recourse Land Financing) of the Issuer or any of its Restricted
Subsidiaries which was outstanding on the Issue Date, in each case, in the aggregate (net of amounts covered by insurance or bonded) for the payment of money have been entered by a court or courts of competent jurisdiction against the Issuer or any
Restricted Subsidiary and such judgment or judgments have not been satisfied, stayed, annulled or rescinded within 60 days of being entered (the
judgment default provisions
);
(7) the Issuer or any Significant Subsidiary pursuant to or within the meaning of any bankruptcy law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in an involuntary case,
(c) consents to the appointment of a custodian of it or for all or substantially all of its assets, or
(d) makes a general assignment for the benefit of its creditors;
(8) a court of competent jurisdiction enters an order or decree under any bankruptcy law that:
(a) is for relief against the Issuer or any Significant Subsidiary as debtor in an involuntary case,
(b) appoints a custodian of the Issuer or any Significant Subsidiary or a custodian for all or substantially all of the assets
of the Issuer or any Significant Subsidiary, or
(c) orders the liquidation of the Issuer or any Significant Subsidiary,
and the order or decree remains unstayed and in effect for 60 days; or
(9) any note guarantee of any Significant
Subsidiary ceases to be in full force and effect (other than in accordance with the terms of such note guarantee and the indenture) or is declared null and void and unenforceable or found to be invalid or any Guarantor denies its liability under its
note guarantee (other than by reason of release of a Guarantor from its note guarantee in accordance with the terms of the indenture and the note guarantee).
If an Event of Default (other than an Event of Default specified in clause (7) or (8) above with respect to the Issuer), shall have
occurred and be continuing under the indenture, the trustee, by written notice to the Issuer, or the holders of at least 25% in aggregate principal amount of the notes then outstanding by written notice to the Issuer and the trustee, may declare all
amounts owing under the notes to be due and payable immediately. Upon such declaration of acceleration, the aggregate principal of and accrued and unpaid interest on the outstanding notes shall immediately become due and payable;
provided,
however
, that after such acceleration, but before a judgment or decree based on acceleration, the holders of a majority in aggregate principal amount of such outstanding notes may, under certain circumstances, rescind and annul such acceleration
if all Events of Default, other than the nonpayment of accelerated principal and interest, have been cured or waived as provided in the indenture. If an Event of Default specified in clause (7) or (8) with respect to the Issuer occurs, all
outstanding notes shall become due and payable without any further action or notice.
The trustee shall, within 30 days after the
occurrence of any Default with respect to the notes, give the holders written notice of all uncured Defaults thereunder actually known to it;
provided, however
, that, except in the case of an Event of Default in payment with respect to the
notes or a Default in complying with Certain Covenants Limitations on Mergers, Consolidations, Etc., the trustee shall be protected in withholding such notice if and so long as a committee of its trust
officers in good faith determines that the withholding of such notice is in the interest of the holders.
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No holder will have any right to institute any proceeding with respect to the indenture or for
any remedy thereunder, unless the trustee:
(1) has failed to act for a period of 60 days after receiving written notice of
a continuing Event of Default by such holder and a request to act by holders of at least 25% in aggregate principal amount of notes outstanding;
(2) has been offered indemnity against loss, liability or expense satisfactory to it in its reasonable judgment; and
(3) has not received from the holders of a majority in aggregate principal amount of the outstanding notes a direction
inconsistent with such request.
However, such limitations do not apply to a suit instituted by a holder of any Note for enforcement of
payment of the principal of or interest on such note on or after the due date therefor (after giving effect to the grace period specified in clause (1) of the first paragraph of this Events of Default section).
The Issuer is required to deliver to the trustee annually a statement regarding compliance with the indenture and, upon any officer of the
Issuer becoming aware of any Default, a statement specifying such Default and what action the Issuer is taking or proposes to take with respect thereto.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Issuer may, at its option and at any time, elect to have its obligations and the obligations of the Guarantors discharged with respect to
the outstanding notes. Legal defeasance means that the Issuer and the Guarantors shall be deemed to have paid and discharged the entire indebtedness represented by the notes and the note guarantees, and the Indenture shall cease to be of further
effect as to all outstanding notes and note guarantees, except as to:
(1) rights of holders to receive payments in respect
of the principal of and interest on the notes when such payments are due from the trust funds referred to below,
(2) the
Issuers obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes, and the maintenance of an office or agency for payment and money for security payments held in
trust,
(3) the rights, powers, trust, duties, and immunities of the trustee, and the Issuers obligation in
connection therewith, and
(4) the legal defeasance provisions of the indenture.
In addition, the Issuer may, at its option and at any time, elect to have its obligations and the obligations of the Guarantors released with
respect to most of the covenants under the indenture (including, without limitation, the cross acceleration provisions and the judgment default provisions), except as described otherwise in the indenture, and thereafter any omission to comply with
such obligations shall not constitute a Default. In the event covenant defeasance occurs, certain Events of Default (not including nonpayment and, solely for a period of 91 days following the deposit referred to in clause (1) of the next
paragraph, bankruptcy, receivership, rehabilitation and insolvency events) will no longer apply. Covenant defeasance will not be effective until such bankruptcy, receivership, rehabilitation and insolvency events no longer apply. The Issuer may
exercise its legal defeasance option regardless of whether it previously exercised covenant defeasance.
In order to exercise either legal defeasance or
covenant defeasance:
(1) the Issuer must irrevocably deposit with the trustee, in trust, for the benefit of the holders,
U.S. legal tender, U.S. Government obligations or a combination thereof, in such amounts as will be sufficient (without reinvestment) in the opinion of a nationally recognized firm of independent public accountants
26
selected by the Issuer, to pay the principal of and interest on the notes on the stated date for payment or on the redemption date of the principal or installment of principal of or interest on
the notes, and the trustee must have a valid, perfected, exclusive security interest in such trust,
(2) in the case of
legal defeasance, the Issuer shall have delivered to the trustee an opinion of counsel in the United States reasonably acceptable to the trustee confirming that:
(a) the Issuer has received from, or there has been published by the Internal Revenue Service, a ruling, or
(b) since the date of the indenture, there has been a change in the applicable U.S. federal income tax law,
in either case to the effect that, and based thereon this opinion of counsel shall confirm that, the holders will not recognize income, gain or loss for U.S.
federal income tax purposes as a result of the legal defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such legal defeasance had not occurred,
(3) in the case of covenant defeasance, the Issuer shall have delivered to the trustee an opinion of counsel in the United
States reasonably acceptable to the trustee confirming that the holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if the covenant defeasance had not occurred,
(4) no Default shall have occurred and be continuing on the date of such deposit (other than a Default resulting from the
borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing),
(5) the legal
defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under the indenture or any other material agreement or instrument to which the Issuer or any of its Subsidiaries is a party or by which the
Issuer or any of its Subsidiaries is bound,
(6) the Issuer shall have delivered to the trustee an officers
certificate stating that the deposit was not made by it with the intent of preferring the holders over any other of its creditors or with the intent of defeating, hindering, delaying or defrauding any other of its creditors or others, and
(7) the Issuer shall have delivered to the trustee an officers certificate and an opinion of counsel, each stating that
the conditions provided for, in the case of the officers certificate, clauses (1) through (6) and, in the case of the opinion of counsel, clauses (1) (with respect to the validity and perfection of the security interest), (2) and/or
(3) and (5) of this paragraph have been complied with.
If the funds deposited with the trustee to effect covenant defeasance are
insufficient to pay the principal of and interest on the notes when due, then our obligations and the obligations of Guarantors under the indenture will be revived and no such defeasance will be deemed to have occurred.
SATISFACTION AND DISCHARGE
The indenture
will be discharged and will cease to be of further effect (except as to rights of registration of transfer or exchange of notes which shall survive until all notes have been canceled) as to all outstanding notes when either:
(1) all the notes that have been authenticated and delivered (except lost, stolen or destroyed notes which have been replaced
or paid and notes for whose payment money has been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from this trust) have been delivered to the trustee for cancellation, or
(2) (a) all notes not delivered to the trustee for cancellation otherwise have become due and payable or have been called for
redemption pursuant to the provisions described under Optional Redemption, and
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the Issuer has irrevocably deposited or caused to be deposited with the trustee trust funds in trust in an amount of money sufficient to pay and discharge the entire Indebtedness (including all
principal and accrued interest) on the notes not theretofore delivered to the trustee for cancellation,
(b) the Issuer has
paid all sums payable by it under the indenture,
(c) the Issuer has delivered irrevocable instructions to the trustee to
apply the deposited money toward the payment of the notes at maturity or on the date of redemption, as the case may be, and
(d) the trustee, for the benefit of the holders, has a valid, perfected, exclusive security interest in this trust.
In addition, the Issuer must deliver an officers certificate, and an opinion of counsel (as to legal matters) stating that all
conditions precedent to satisfaction and discharge have been complied with.
TRANSFER AND EXCHANGE
A holder will be able to register the transfer of or exchange of any notes only in accordance with the provisions of the indenture. The
registrar may require a holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the indenture. Without the prior consent of the Issuer, the registrar is not
required (1) to register the transfer of or exchange any note selected for redemption, (2) to register the transfer of or exchange any note for a period of 15 days before a selection of notes to be redeemed or (3) to register the
transfer or exchange of a note between a record date and the next succeeding interest payment date.
The notes will be issued in
registered form and the registered holder will be treated as the owner of such note for all purposes.
The transferor shall also provide
or cause to be provided to the trustee all information necessary to allow the trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code
Section 6045. The trustee may rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.
AMENDMENT, SUPPLEMENT AND WAIVER
Subject
to certain exceptions, the indenture or the notes may be amended with the consent (which may include consents obtained in connection with a tender offer or exchange offer for notes) of the holders of at least a majority in principal amount of the
notes then outstanding, and any existing Default under, or compliance with any provision of, the indenture may be waived (other than any continuing Default in the payment of the principal or interest on the notes) with the consent (which may include
consents obtained in connection with a tender offer or exchange offer for notes) of the holders of a majority in principal amount of the notes then outstanding;
provided
that:
(a) no such amendment may, without the consent of the holders of
two-thirds
in
aggregate principal amount of notes then outstanding, amend the obligation of the Issuer under the heading Change of Control or the related definitions that could adversely affect the rights of any holder; and
(b) without the consent of each holder affected, the Issuer and the trustee may not:
(1) change the maturity of any note;
(2) reduce the amount, extend the due date or otherwise affect the terms of any scheduled payment of interest on or principal
of the notes;
(3) reduce any premium payable upon optional redemption of the notes, change the date on which any notes are
subject to redemption or otherwise alter the provisions with respect to the redemption of the notes;
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(4) make any note payable in money or currency other than that stated in the
notes;
(5) modify or change any provision of the indenture or the related definitions to affect the ranking of the notes
or any note guarantee in a manner that adversely affects the holders;
(6) reduce the percentage of holders necessary to
consent to an amendment or waiver to the indenture or the notes;
(7) impair the rights of holders to receive payments of
principal of or interest on the notes;
(8) release any Guarantor from any of its obligations under its note guarantee or
the indenture, except as permitted by the indenture; or
(9) make any change in these amendment and waiver provisions.
Notwithstanding the foregoing, the Issuer and the trustee may amend the indenture, the note guarantees or the notes without the consent of any
holder, to cure any ambiguity, defect or inconsistency, to provide for uncertificated notes in addition to or in place of certificated notes, to provide for the assumption of the Issuers obligations to the holders in the case of a merger or
acquisition, to release any Guarantor from any of its obligations under its note guarantee or the indenture (to the extent permitted by the indenture), to make any change that does not materially adversely affect the rights of any holder or, in the
case of the indenture, to maintain the qualification of the indenture under the Trust Indenture Act.
The trustee shall sign any amendment,
supplement or waiver authorized pursuant to the indenture if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the trustee. If it does, the trustee may, but need not, sign it. In signing
or refusing to sign such amendment, supplement or waiver the trustee shall receive and shall be fully protected in relying conclusively upon an officers certificate and an opinion of counsel stating, in addition to certain matters required by
the indenture, that such amendment, supplement or waiver is authorized or permitted by the indenture and all conditions precedent required thereunder to such amendment, supplement or waiver have been satisfied and that it constitutes a legal, valid,
binding and enforceable obligation of the Issuer and any Guarantors party thereto.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the Issuer will have any liability for any obligations of
the Issuer under the notes or the indenture or of any Guarantor under its note guarantee or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder by accepting a note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of the notes and the note guarantees.
CONCERNING THE TRUSTEE
Wells Fargo Bank, National Association is the trustee under the indenture and has been appointed by the Issuer as registrar and paying agent
with regard to the notes. The indenture contains certain limitations on the rights of the trustee, should it become a creditor of the Issuer, to obtain payment of claims in certain cases, or to realize on certain assets received in respect of any
such claim as security or otherwise. The trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest (as defined in the indenture), it must eliminate such conflict or resign.
The holders of a majority in principal amount of the then outstanding notes will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the trustee, subject to certain exceptions. The indenture provides that, in case an Event of Default occurs and is not cured, the trustee will be required, in the exercise of its
power, to use the degree of care of a prudent person in similar circumstances in the conduct of his or her own affairs. Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the indenture
at the request of any holder, unless such holder shall have offered to the trustee security and indemnity satisfactory to the trustee.
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GOVERNING LAW
The indenture, the notes and the note guarantees will be governed by, and construed in accordance with, the laws of the State of New York.
CERTAIN DEFINITIONS
Set forth below is a
summary of certain of the defined terms used in the indenture. Reference is made to the indenture for the full definition of all such terms.
Attributable Indebtedness
, when used with respect to any Sale and Leaseback Transaction, means, as at the time of
determination, the present value (discounted at a rate equivalent to the Issuers then-current weighted average cost of funds for borrowed money as at the time of determination, compounded on a semi-annual basis) of the total obligations of the
lessee for rental payments during the remaining term of any Capitalized Lease included in any such Sale and Leaseback Transaction.
Bankruptcy
Event
means the commencement of any case under the Bankruptcy Code (Title 11 of the United States Code)
or the commencement of any other bankruptcy, reorganization, receivership, or similar proceeding under any federal, state or foreign law or by or against any Person for whom the Issuer or a Restricted Subsidiary has executed a Springing Guarantee
for the benefit of such Person;
provided,
however
, that the filing of an involuntary case against such Person shall only be a Bankruptcy Event if: (i) such involuntary case is filed in whole or in part by the Issuer or a
Restricted Subsidiary, any member in such Person which is an affiliate of the Issuer or a Restricted Subsidiary, or any other affiliate of the Issuer or a Restricted Subsidiary, or (ii) the Issuer or a Restricted Subsidiary, any member in such
Person which is an affiliate of the Issuer or a Restricted Subsidiary, or any other affiliate of the Issuer or a Restricted Subsidiary shall in any way induce or participate in the filing, whether directly or indirectly, of an involuntary bankruptcy
case against such Person or any other Person, and such involuntary case or proceeding is not dismissed with prejudice within 120 days of the filing thereof.
Capitalized Lease
means a lease required to be capitalized for financial reporting purposes in accordance with GAAP.
Capitalized Lease Obligations
of any Person means the obligations of such Person to pay rent or other amounts under a
Capitalized Lease, and the amount of such obligation shall be the capitalized amount thereof determined in accordance with GAAP.
Change of Control
means the occurrence of any of the following events:
(1) any person or group (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other
than one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules
13d-3
and
13d-5
under the Exchange Act, except that for purposes of this
clause that person or group shall be deemed to have beneficial ownership of all securities that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly
or indirectly, of voting stock representing more than 50% of the voting power of the total outstanding voting stock of the Issuer;
(2) during any period of two consecutive years, individuals who at the beginning of such period constituted the board of
directors (together with any new directors whose election to such board of directors or whose nomination for election by the stockholders of the Issuer was approved by a vote of the majority of the directors of the Issuer then still in office who
were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of directors of the Issuer;
(3) (a) all or substantially all of the assets of the Issuer and the Restricted Subsidiaries are sold or otherwise transferred
to any person other than a Wholly Owned Restricted Subsidiary or one or more
30
Permitted Holders or (b) the Issuer consolidates or merges with or into another person other than a Permitted Holder or any person other than a Permitted Holder consolidates or merges with
or into the Issuer, in either case under this clause (3), in one transaction or a series of related transactions in which immediately after the consummation thereof persons owning voting stock representing in the aggregate 100% of the total voting
power of the voting stock of the Issuer immediately prior to such consummation do not own voting stock representing a majority of the total voting power of the voting stock of the Issuer or the surviving or transferee person; or
(4) the Issuer shall adopt a plan of liquidation or dissolution or any such plan shall be approved by the stockholders of the
Issuer.
Change of Control Triggering Event
means the occurrence of both a Change of Control and a Rating Decline.
Consolidated Net Tangible Assets
means, as of any date, the total amount of assets which would be included on a combined
balance sheet of the Restricted Subsidiaries (not including the Issuer) together with the total amount of assets that would be included on the Issuers balance sheet, not including its subsidiaries, under GAAP (less applicable reserves and
other properly deductible items) after deducting therefrom:
(1) all short-term liabilities, except for liabilities payable
by their terms more than one year from the date of determination (or renewable or extendible at the option of the obligor for a period ending more than one year after such date);
(2) investments in Subsidiaries that are not Restricted Subsidiaries; and
(3) all goodwill, trade names, trademarks, patents, unamortized debt discount, unamortized expense incurred in the issuance of
debt and other intangible assets.
Default
means (1) any Event of Default or (2) any event, act or condition
that, after notice or the passage of time or both, would be an Event of Default.
Equity Interests
of any Person means
(1) any and all shares or other equity interests (including common stock, preferred stock, limited liability company interests and partnership interests) in such Person and (2) all rights to purchase, warrants or options (whether or not
currently exercisable), participations or other equivalents of or interests in (however designated) such shares or other interests in such Person.
Financial Services Subsidiary
means a Subsidiary engaged exclusively in mortgage banking (including mortgage origination,
loan servicing, mortgage brokerage and title and escrow businesses), master servicing and related activities, including, without limitation, a Subsidiary which facilitates the financing of mortgage loans and mortgage-backed securities and the
securitization of mortgage-backed bonds and other activities ancillary thereto.
GAAP
means generally accepted
accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect on the Issue Date.
Guarantors
means each Restricted Subsidiary of the Issuer on the Issue Date, and each other Person that is required to
become a Guarantor by the terms of the indenture after the Issue Date, in each case, until such Person is released from its note guarantee.
Hedging Obligations
of any Person means the obligations of such Person pursuant to (1) any interest rate swap
agreement, interest rate collar agreement or other similar agreement or arrangement designed to protect
31
such Person against fluctuations in interest rates, (2) agreements or arrangements designed to protect such Person against fluctuations in foreign currency exchange rates in the conduct of
its operations, or (3) any forward contract, commodity swap agreement, commodity option agreement or other similar agreement or arrangement designed to protect such Person against fluctuations in commodity prices, in each case entered into in
the ordinary course of business for bona fide hedging purposes and not for the purpose of speculation.
Indebtedness
means:
(1) any liability of any Person:
(A) for borrowed money, or
(B) evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation) given in connection with
the acquisition of any businesses, properties or assets of any kind (other than a trade payable or a current liability arising in the ordinary course of business), or
(C) for the payment of money relating to a Capitalized Lease Obligation, or
(D) for all Redeemable Capital Stock valued at the greater of its voluntary or involuntary liquidation preference plus accrued
and unpaid dividends;
(2) any liability of others described in the preceding clause (1) that such Person has
guaranteed or that is otherwise its legal liability;
provided,
however
, that a Springing Guarantee shall not be deemed to be Indebtedness under this clause (2) until the earliest to occur of (a) the demand by a lender
for payment under such Springing Guarantee, (b) the occurrence or failure to occur of any event, act or circumstance that, with or without the giving of notice and/or passage of time, entitles a lender to make a demand for payment thereunder or
(c) a Bankruptcy Event;
(3) all Indebtedness referred to in (but not excluded from) clauses (1) and (2) above of
other Persons and all dividends of other Persons, the payment of which is secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including, without
limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness; and
(4) any amendment, supplement, modification, deferral, renewal, extension or refunding or any liability of the types referred
to in clauses (1), (2) and (3) above.
Issue Date
means June 6, 2017.
Lien
means, with respect to any asset, any mortgage, deed of trust, lien (statutory or other), pledge, lease, easement,
restriction, covenant, charge, security interest or other encumbrance of any kind or nature in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention
agreement, and any lease in the nature thereof, any option or other agreement to sell, and any filing of, or agreement to give, any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction (other than
cautionary filings in respect of operating leases).
Moodys
means Moodys Investors Service, Inc., and its
successors.
Non-Recourse
Land Financing
means any Indebtedness of the Issuer
or any Restricted Subsidiary for which the holder of such Indebtedness has no recourse, directly or indirectly, to the Issuer or such Restricted Subsidiary for the principal of, premium, if any, and interest on such Indebtedness, and for which the
Issuer or such Restricted Subsidiary is not, directly or indirectly, obligated or otherwise liable for the principal of, premium, if any, and interest on such Indebtedness, except pursuant to mortgages, deeds of trust or other Liens or other
recourse obligations or liabilities in respect of specific land or other real property interests of the Issuer or such Restricted Subsidiary;
provided
that recourse obligations or liabilities of the Issuer or such Restricted Subsidiary solely
for indemnities, covenants (including, without limitation, performance, completion or similar
32
covenants), or breach of any warranty, representation or covenant in respect of any Indebtedness, including liability by reason of any agreement by the Issuer or any Restricted Subsidiary to
provide additional capital or maintain the financial condition of or otherwise support the credit of the Person incurring the Indebtedness, will not prevent Indebtedness from being classified as
Non-Recourse
Land Financing.
Permitted Holders
means Steven J. Hilton, his wife and children, any corporation, limited liability
company or partnership in which he has voting control and is the direct and beneficial owner of a majority of the Equity Interests and any trust for the benefit of him or his wife or children.
Person
means any individual, corporation, partnership, joint venture, association, joint stock company, trust,
unincorporated organization, limited liability company, government or any agency or political subdivision hereof or any other entity.
Rating Agency
means each of (a) S&P and (b) Moodys.
Rating Category
means:
(1) with respect to S&P, any of the following categories: BB, B, CCC, CC, C and D (or equivalent successor categories); and
(2) with respect to Moodys, any of the following categories: Ba, B, Caa, Ca, C and D (or equivalent successor
categories).
In determining whether the rating of the notes has decreased by one or more gradations, gradations within Rating Categories
(+ and for S&P; or 1, 2 and 3 for Moodys) will be taken into account (e.g., with respect to S&P a decline in rating from BB+ to BB, as well as from BB to B+, will constitute a decrease of one
gradation).
Rating Date
means the date which is 90 days prior to the earlier of (1) a Change of Control and
(2) public notice of the occurrence of a Change of Control or of the intention by the Issuer to effect a Change of Control.
Rating Decline
means the decrease (as compared with the Rating Date) by one or more gradations within Rating Categories as
well as between Rating Categories of the rating of the notes by a Rating Agency on, or within 120 days after, the earlier of the date of public notice of the occurrence of a Change of Control or of the intention by the Issuer to effect a Change of
Control (which period will be extended for so long as the rating of the notes is under publicly announced consideration for possible downgrade by any of the Rating Agencies).
Redeemable Capital Stock
means any capital stock of the Issuer or any Subsidiary that, either by its terms, by the terms of
any security into which it is convertible or exchangeable or otherwise, (1) is or upon the happening of an event or passage of time would be required to be redeemed on or prior to the final stated maturity of the notes or (2) is redeemable
at the option of the holder thereof at any time prior to such final stated maturity or (3) is convertible into or exchangeable for debt securities at any time prior to such final stated maturity.
Registration Rights Agreement
means the registration rights agreement dated as of the Issue Date among the Issuer, the
Guarantors and the Initial Purchasers and any registration rights agreement related to Additional Notes entered into after the Issue Date.
Restricted Subsidiary
means any Subsidiary of the Issuer, which is not: (i) a Financial Services Subsidiary or
(ii) an Unrestricted Subsidiary.
S&P
means Standard & Poors Ratings Services, a division of
the McGraw-Hill Companies, Inc., and its successors.
Sale and Leaseback Transaction
means a sale or transfer made by
the Issuer or a Restricted Subsidiary (except a sale or transfer made to the Issuer or another Restricted Subsidiary) of any property which is either (1)
33
a manufacturing facility, office building or warehouse whose book value equals or exceeds 1% of Consolidated Net Tangible Assets as of the date of determination or (2) another property (not
including a model home) which exceeds 5% of Consolidated Net Tangible Assets as of the date of determination, if such sale or transfer is made with the agreement, commitment or intention of leasing such property to the Issuer or a Restricted
Subsidiary.
SEC
means the U.S. Securities and Exchange Commission.
Secured Debt
means any Indebtedness which is secured by (1) a Lien on any property of the Issuer or the property of
any Restricted Subsidiary or (2) a Lien on shares of stock owned directly or indirectly by the Issuer or a Restricted Subsidiary in a corporation or on equity interests owned by the Issuer or a Restricted Subsidiary in a partnership or other
entity not organized as a corporation or in the Issuers rights or the rights of a Restricted Subsidiary in respect of Indebtedness of a corporation, partnership or other entity in which the Issuer or a Restricted Subsidiary has an equity
interest;
provided
that Secured Debt shall not include
Non-Recourse
Land Financing that consists exclusively of land under development, land held for future
development or improved lots and parcels, as such categories of assets are determined in accordance with GAAP. The securing in the foregoing manner of any such Indebtedness which immediately prior thereto was not Secured Debt shall
be deemed to be the creation of Secured Debt at the time security is given.
Senior Indebtedness
means the principal of
(and premium, if any, on) and interest on (including interest accruing after the occurrence of an Event of Default or after the filing of a petition initiating any proceeding pursuant to any bankruptcy law whether or not such interest is an
allowable claim in any such proceeding) and other amounts due on or in connection with any Indebtedness of the Issuer, whether outstanding on the date hereof or hereafter created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the debt securities. Notwithstanding the foregoing,
Senior Indebtedness shall not include (1) Indebtedness of the Issuer that is expressly subordinated in right of payment to any Senior Indebtedness of the Issuer, (2) Indebtedness of the Issuer that by operation of law is
subordinate to any general unsecured obligations of the Issuer, (3) Indebtedness of the Issuer to any Subsidiary, (4) Indebtedness of the Issuer incurred in violation of the restrictions described under Restrictions on Secured Debt
and Restrictions on Sale and Leaseback Transactions, (5) to the extent it might constitute Indebtedness, any liability for federal, state or local taxes or other taxes, owed or owing by the Issuer, and (6) to the extent it might
constitute Indebtedness, trade account payables owed or owing by the Issuer or any of its Subsidiaries.
Significant
Subsidiary
means (1) any Restricted Subsidiary that would be a significant subsidiary as defined in Regulation
S-X
promulgated pursuant to the Securities Act of 1933 as such
regulation is in effect on the Issue Date and (2) any Restricted Subsidiary that, when aggregated with all other Restricted Subsidiaries that are not otherwise Significant Subsidiaries and as to which any event described in clause (7) or
(8) under Events of Default has occurred and is continuing, would constitute a Significant Subsidiary under clause (1) of this definition.
Springing Guarantee
means a guarantee by a Person which by its express terms does not become effective until the occurrence
of a Bankruptcy Event.
Subsidiary
means, with respect to any Person:
(1) any corporation, limited liability company, association or other business entity of which more than 50% of the total voting
power of the Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the election of the board of directors or comparable governing body thereof are at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership
(a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or one or more Subsidiaries of such Person (or any combination
thereof).
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Unless otherwise specified, Subsidiary refers to a Subsidiary of the Issuer.
Trust Indenture Act
means the Trust Indenture Act of 1939, as amended.
Unrestricted
Subsidiary
means a Subsidiary designated by the Issuer (evidenced by resolutions of the board of
directors of the Issuer and an officers certificate, delivered to the trustee certifying compliance with this definition) as a Subsidiary resulting from any investment (including any guarantee of Indebtedness) made by the Issuer or any
Restricted Subsidiary of the Issuer in joint ventures engaged in homebuilding, land acquisition or land development businesses and businesses that are reasonably related thereto or reasonable extensions thereof with unaffiliated third parties;
provided
that the aggregate amount of investments in all Unrestricted Subsidiaries shall not exceed (i) $25 million or (ii) such lesser amount as may be applicable to the corresponding investment limitation in any other
outstanding capital markets Indebtedness (other than
Non-Recourse
Land Financing) of the Issuer or any of its Restricted Subsidiaries which was outstanding on the Issue Date (with the amount of each investment
being calculated based upon the amount of investments made on or after the date such joint venture becomes a Subsidiary) (the
Investment
Basket
);
provided,
further
that if the Issuer
subsequently designates a Subsidiary, which previously had been designated an Unrestricted Subsidiary, to be a Restricted Subsidiary (evidenced by resolutions of the board of directors of the Issuer and an officers certificate, delivered to
the trustee certifying compliance with this definition) and causes such Subsidiary to comply with provisions set forth under the covenant Certain Covenants Additional Note Guarantees, then the amount of any investments
in such Unrestricted Subsidiary made on or after the date such joint venture became a Subsidiary shall be credited against the Investment Basket (up to a maximum amount of (i) $25 million or (ii) such lesser amount as may be applicable to
the corresponding investment limitation in any other outstanding capital markets Indebtedness (other than
Non-Recourse
Land Financing) of the Issuer or any of its Restricted Subsidiaries which was outstanding
on the Issue Date). As of the Issue Date, Buckeye Land, L.L.C., Arcadia Ranch L.L.C. and Sundance Buckeye, LLC are designated as Unrestricted Subsidiaries.
Wholly Owned Restricted Subsidiary
means a Restricted Subsidiary of which 100% of the Equity Interests (except for
directors qualifying shares or certain minority interests owned by other Persons solely due to local law requirements that there be more than one stockholder, but which interest is not in excess of what is required for such purpose) are owned
directly by the Issuer or through one or more Wholly Owned Restricted Subsidiaries.
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THE EXCHANGE OFFER
Purposes and Effects
We issued the
outstanding notes on June 6, 2017 to the initial purchasers, who resold the outstanding notes to qualified institutional buyers (as defined in Rule 144A under the Securities Act) and certain
non-U.S.
persons in accordance with Regulation S of the Securities Act. In connection with the sale of the outstanding notes, we and the initial purchasers entered into the registration rights agreement
pursuant to which we agreed to file with the SEC a registration statement with respect to an offer to exchange the outstanding notes with the exchange notes within 120 days after the outstanding notes were issued. In addition, we agreed to use our
reasonable best efforts to cause the registration statement to become effective under the Securities Act within 180 days after the outstanding notes were issued and to issue the exchange notes pursuant to the exchange offer. A copy of the
registration rights agreement has been filed as an exhibit to the registration statement of which this prospectus is a part.
The exchange
offer is being made pursuant to the registration rights agreement. Holders of outstanding notes who do not tender their outstanding notes or whose outstanding notes are tendered but not accepted would have to rely on exemptions from registration
requirements under the securities laws, including the Securities Act, if they wish to sell their outstanding notes.
Based on
interpretations by the staff of the SEC set forth in
no-action
letters issued to persons unrelated to us, we believe the exchange notes issued pursuant to the exchange offer in exchange for outstanding notes
may be offered for sale, sold and otherwise transferred by any holder (other than a person that is an affiliate of ours within the meaning of Rule 405 under the Securities Act and except as set forth in the next paragraph) without
registration or the delivery of a prospectus under the Securities Act, provided the holder acquires the exchange notes in the ordinary course of the holders business and the holder is not participating and does not intend to participate, and
has no arrangement or understanding with any person to participate, in the distribution of the exchange notes.
If a person were to
participate in the exchange offer for the purpose of distributing securities in a manner not permitted by the SECs interpretation, (1) the position of the staff of the SEC enunciated in the
no-action
letters would not be applicable to the person and (2) the person would be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with a
sale of the exchange notes with any such resale transaction effected by it covered by an effective registration statement containing the selling securityholder information required by Item 507 or 508 of the SECs Regulation
S-K.
Each broker-dealer that receives exchange notes for its own account in exchange for outstanding
notes which the broker-dealer acquired as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any sale of those exchange notes.
The exchange offer is not being made to, nor will we accept surrenders for exchange from, holders of exchange notes with addresses in any
jurisdiction in which the exchange offer or the issuance of exchange notes pursuant to it would violate applicable securities or blue sky laws. Prior to the exchange offer, however, we will register or qualify, or cooperate with the holders of the
outstanding notes and their respective counsel in connection with the registration or qualification of, the exchange notes for offer and sale under the securities or blue sky laws of such jurisdictions as are necessary to permit consummation of the
exchange offer and do anything else which is necessary or advisable to enable the offer and issuance of the exchange notes in those jurisdictions.
Terms of the Exchange Offer
Upon the
terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal, promptly following expiration of the exchange offer, we will issue exchange notes in exchange for all
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outstanding notes which are validly tendered prior to 5:00 p.m., New York City time, on the expiration date (as defined below) and not withdrawn. The principal amount of the exchange notes issued
in the exchange will be the same as the principal amount of the outstanding notes for which they are exchanged. Holders may tender some or all of their outstanding notes in response to the exchange offer.
However, outstanding notes may be tendered only in denominations of $2,000 and integral multiples of
$1,000 in excess thereof. See Description of the Exchange Notes.
The form and terms of the exchange notes will be the same in all material respects as the form and terms of the outstanding notes, except that
(1) the exchange notes will be registered under the Securities Act and hence will not bear legends regarding restrictions on transfer and (2) because the exchange notes will be registered, holders of exchange notes will not be, and upon
the consummation of the exchange offer, except under limited circumstances, holders of outstanding notes will no longer be, entitled to rights under the registration rights agreement intended for holders of unregistered securities.
Outstanding notes which are not tendered for exchange or are tendered but not accepted in the exchange offer will remain outstanding and be
entitled to the benefits of the indenture, but will not be entitled to any registration rights under the registration rights agreement.
We will be deemed to accept all the outstanding notes which are validly tendered and not withdrawn when we give oral or written notice to that
effect to the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving exchange notes from us.
If any tendered outstanding notes are not accepted for exchange because of an invalid tender or otherwise, those outstanding notes will be
returned, without expense, to the tendering holder promptly after the expiration date.
Holders who tender outstanding notes in response
to the exchange offer will not be required to pay brokerage commissions or fees or, except as described in the instructions in the letter of transmittal, transfer taxes. We will pay all charges and expenses, other than certain taxes described below,
in connection with the exchange offer. See Fees and Expenses.
Expiration Date; Extension; Termination; Amendments
The exchange offer will expire at 5:00 p.m., New York City time, on September 14, 2017, the expiration date unless we extend it by
notice to the exchange agent. The expiration date will be at least 20 business days after commencement of the exchange offer in accordance with Rule
14e-1(a)
under the Exchange Act. We reserve the right to
extend the exchange offer at our discretion. If we extend the exchange offer, the term expiration date will mean the time and date on which the exchange offer as extended will expire. We will notify the exchange agent of any extension by
oral or written notice and will make a public announcement of any extension, not later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date. We may terminate the exchange offer by written notice to
the exchange agent if any of the conditions described below under Conditions of the Exchange Offer is not satisfied. If the exchange offer is amended in a manner that we determine to constitute a material change, including
the waiver of a material condition, we will promptly disclose the amendment in a prospectus supplement that will be distributed to the registered holders and we will extend the offer period if necessary so that at least five business days remain in
the offer following notice of the material change.
Interest on Exchange Notes
The exchange notes will bear interest at 5.125% per year from and including June 6, 2017. Interest on the exchange notes will be payable
twice a year, on June 6 and December 6, beginning December 6, 2017. In order to
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avoid duplicative payment of interest, all interest accrued on outstanding notes that are accepted for exchange before December 6, 2017 will be superseded by the interest that is deemed to have
accrued on the exchange notes from June 6, 2017 through the date of exchange.
Termination of Certain Rights
The registration rights agreement provides that, with certain exceptions, if: (1) the exchange offer registration statement has not been
filed with the SEC on or prior to the 120th calendar day following the date of original issue of the outstanding notes; (2) the exchange offer registration statement has not been declared effective on or prior to the 180th calendar day
following the date of original issue of the outstanding notes, or (3) the exchange offer is not consummated on or prior to the 240th day following the date of original issue of the outstanding notes (each event referred to in clauses
(1) through (3) above being a registration default), the interest rate borne by the outstanding notes will be increased by 0.25% per annum upon the occurrence of a registration default. This rate will continue to increase by 0.25%
each 90 day period that the liquidated damages (as defined below) continue to accrue under any such circumstance. However, the maximum total increase in the interest rate will in no event exceed one percent (1.0%) per year. We refer to this increase
in the interest rate on the notes as liquidated damages. Such interest is payable in addition to any other interest payable from time to time with respect to the outstanding notes and the exchange notes in cash on each interest payment
date to the holders of record for such interest payment date. After the cure of registration defaults, the accrual of liquidated damages will stop and the interest rate will revert to the original rate.
Holders of exchange notes will not be and, upon consummation of the exchange offer, holders of outstanding notes will no longer be, entitled
to rights under the registration rights agreement intended for holders of outstanding notes which are restricted as to transferability, except as otherwise provided in the registration rights agreement. The exchange offer will be deemed consummated
when we deliver to the exchange agent exchange notes in the same aggregate principal amount as that of the outstanding notes which are validly tendered and not withdrawn.
In the event that:
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any changes in law or the applicable interpretations of the SEC do not permit us to effect the exchange offer;
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the exchange offer is not consummated within 240 days after the original issue date of the outstanding notes;
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any holder notifies us that it is prohibited by law or applicable interpretations of the SEC from participating in the exchange offer;
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in the case of any holder that participates in the exchange offer, such holder does not receive freely transferable notes on the date of the exchange (other than due solely to the status of such holder as an affiliate
of the Issuer);
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the initial purchasers of the outstanding notes so requests with respect to notes that have, or are reasonably likely to be determined to have, the status of unsold allotments in an initial distribution; or
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or any holder of notes that is not entitled to participate in the exchange offer so requests
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then, the Issuer
and the Guarantors shall as promptly as practicable, but in no event later than 45 days after the occurrence of any of the above shelf registration statement triggering events, file with the SEC a shelf registration statement covering resales of the
outstanding notes by holders who satisfy certain conditions relating to the provision of information in connection with the shelf registration statement.
Procedures for Tendering
All of the
outstanding notes were issued in book-entry form, and all of the outstanding notes are currently represented by global certificates held for the account of DTC. We have confirmed with DTC that the
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outstanding notes may be tendered using ATOP. The exchange agent will establish an account with DTC for purposes of the exchange offer promptly after the commencement of the exchange offer, and
DTC participants may electronically transmit their acceptance of the exchange offer by causing DTC to transfer their outstanding notes to the exchange agent via ATOP. In connection with the transfer, DTC will send an agents message
to the exchange agent as well as a book-entry confirmation of the transfer of the tendered outstanding notes into the exchange agents account at DTC. The agents message will state that DTC has received instructions from the participant
to tender outstanding notes and that the participant agrees to be bound by the terms of the letter of transmittal. By using the ATOP procedures described above, you will not be required to deliver a letter of transmittal to the exchange agent. You
will, however, be bound by the letter of transmittals terms just as if you had signed it. The agents message must be received by the exchange agent at or prior to the expiration of the exchange offer; compliance with ATOP or other
applicable DTC procedures does not itself constitute delivery to the exchange agent.
A tender of outstanding notes by a holder will
constitute an agreement by the holder to transfer the outstanding notes to us in exchange for exchange notes on the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal.
If you are the beneficial owner of outstanding notes that are registered in the name of a broker-dealer, commercial bank, trust company, or
other nominee and you wish to tender, you should contact the registered holder promptly and instruct such holder on your behalf.
All
questions as to the validity, form, eligibility (including time of receipt) and acceptance and withdrawal of tendered outstanding notes will be determined by us in our sole discretion, and that determination will be final and binding. We reserve the
right to reject any outstanding notes which are not properly tendered or the acceptance of which we believe might be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular outstanding notes,
without being required to waive the same defects, irregularities or conditions as to other outstanding notes. Our interpretation of the terms and conditions of the exchange offer (including the instructions in the letter of transmittal) will be
final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of outstanding notes must be cured by the expiration date, or by such later time as we may determine. Although we intend to request the
exchange agent to notify holders of defects or irregularities with respect to tenders of outstanding notes, neither we, the exchange agent nor any other person will incur any liability for failure to give such notification. Tenders of outstanding
notes will not be deemed to have been made until all defects and irregularities have been cured or waived. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not
been cured or waived will be returned by the exchange agent to the tendering holders, unless otherwise provided in the letter of transmittal, promptly following the expiration date.
We have the right (subject to limitations contained in the indenture) (1) to purchase or make offers for any outstanding notes that
remain outstanding after the expiration date and (2) to the extent permitted by applicable law, to purchase outstanding notes in privately negotiated transactions or otherwise. The terms of any such purchases or offers could differ from the
terms of the exchange offer.
By tendering, a holder will be representing to us, among other things, that: (1) it or the person who
will acquire the exchange notes being issued as a result of the exchange offer (whether or not that is the holder) will be acquiring them in the ordinary course of that persons business, (2) neither the holder nor any such other person
has an arrangement or understanding with any person to participate in a distribution of the exchange notes, (3) it is not a broker-dealer that owns outstanding notes acquired directly from us or an affiliate of ours, it is not an
affiliate of the company (as defined in Rule 405 under the Securities Act) or any of the guarantors, and (5) it is not acting on behalf of any other person who could not truthfully make the representation described in this
paragraph. In addition, if the holder is a broker-dealer that will receive exchange notes for its own account in exchange for outstanding notes that were acquired as result of market-making activities or other trading activities, the holder will, by
tendering, acknowledge that it will comply with the prospectus delivery requirements of the Securities Act in connection with any resale of those exchange notes.
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Conditions of the Exchange Offer
Notwithstanding any other term of the exchange offer, we will not be required to accept for exchange, or exchange securities for, any
outstanding notes, if:
(a) any action or proceeding is instituted or threatened in any court or by or before any
governmental agency which might materially impair our or the guarantors ability to proceed with the exchange offer or any material adverse development has occurred in any existing action or proceeding with respect to us or any of the
guarantors that would impair our or their ability to proceed;
(b) the exchange offer would violate any law or
interpretation by the staff of the SEC; or
(c) any governmental approval has not been obtained, which approval we deem
necessary for the consummation of the exchange offer.
If any of the conditions are not satisfied, we may (1) refuse to accept any
outstanding notes and return all tendered outstanding notes to the tendering holders, (2) extend the exchange offer and retain all outstanding notes tendered prior to the expiration of the exchange offer, subject, however, to the rights of
holders to withdraw such outstanding notes (see Withdrawal of Tenders), (3) waive such unsatisfied conditions with respect to the exchange offer and accept all properly tendered outstanding notes which have not been
withdrawn, (4) terminate the exchange offer, or (5) amend the exchange offer.
Guaranteed Delivery Procedures
Holders who wish to tender their outstanding notes but cannot complete the procedure for book-entry transfer prior to the expiration of the
exchange offer may effect a tender if:
(a) The tender is made through an eligible institution;
(b) Prior to the expiration date, the exchange agent receives from the eligible institution a properly completed and duly
executed notice of guaranteed delivery (by facsimile transmission, mail or hand) setting forth the name and address of the eligible holder and the principal amount of outstanding notes tendered, stating that the tender is being made by that notice
of guaranteed delivery, and guaranteeing that, within three New York Stock Exchange trading days after the expiration date, confirmation of a book-entry transfer into the exchange agents account at DTC and an agents message will be
delivered to the exchange agent; and
(c) Confirmation of a book-entry transfer into the exchange agents account at
DTC and an agents message is received by the exchange agent within three New York Stock Exchange trading days after the expiration date.
Upon the request to the exchange agent, a form of notice of guaranteed delivery will be sent to holders who wish to use the guaranteed
delivery procedures described above.
Withdrawal of Tenders
Except as otherwise described below, tenders of outstanding notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the
expiration date. For a withdrawal to be effective, you must comply with the appropriate procedures of the ATOP system. Any notice of withdrawal must (1) specify the name of the person who deposited the outstanding notes to be withdrawn,
(2) identify the outstanding notes to be withdrawn (including the principal amounts of the outstanding notes), (3) specify the name in which the withdrawn outstanding notes are to be registered, if different from that of the depositor, and
(4) otherwise comply with the requirements of DTC and ATOP. All questions as to the validity, form and eligibility (including time of receipt) of withdrawal notices will be determined by us in our sole discretion, and that determination will be
final and binding on all parties. Any outstanding notes which are withdrawn will be deemed not to have been validly
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tendered for purposes of the exchange offer, and no exchange notes will be issued with respect to those outstanding notes unless they are validly
re-tendered.
Any outstanding notes which have been tendered but which are not accepted for exchange or which are withdrawn will be returned to the holder without cost to the holder promptly after withdrawal,
rejection of tender or termination of the exchange offer. Properly withdrawn outstanding notes may be
re-tendered
at any time prior to the expiration date in accordance with the procedures described above
under Procedures for Tendering.
Fees and Expenses
We will bear the expenses of soliciting tenders pursuant to the exchange offer. Solicitations may be made by mail, electronic transmission,
telephone or in person by officers and regular employees of ours and our affiliates.
We have not retained any dealer-manager in
connection with the exchange offer and will not make any payments to brokers, dealers or others for soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse
it for its reasonable
out-of-pocket
expenses in connection with the exchange offer. We may also reimburse brokerage houses and other custodians, nominees and fiduciaries
for the reasonable
out-of-pocket
expenses they incur in forwarding copies of this prospectus, letters of transmittal and related documents to the beneficial owners of
the outstanding notes and in handling or forwarding tenders for exchange. We will pay the other expenses incurred in connection with the exchange offer, including fees and expenses of the trustee, accounting and legal fees and printing costs.
We will pay all transfer taxes, if any, applicable to the exchange of outstanding notes for exchange notes pursuant to the exchange offer. If,
however, exchange notes or outstanding notes for principal amounts which are not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, a person other than the registered holder of the outstanding notes
tendered, or if tendered outstanding notes are registered in the name of a person other than the person who agrees to be bound by the letter of transmittal, or if a transfer tax is imposed for any other reason, other than the exchange of outstanding
notes for exchange notes pursuant to the exchange offer, the tendering holder must pay the transfer taxes (whether imposed on the registered holder or any other person). Unless satisfactory evidence of payment of transfer taxes or exemption from the
need to pay them is submitted with the letter of transmittal, the amount of the transfer taxes will be billed directly to the tendering holder. We may refuse to issue exchange notes in exchange for outstanding notes, or to return outstanding notes
which are not exchanged, until we receive evidence satisfactory to us that any transfer taxes payable by the holder have been paid.
Consequences of
Failure to Exchange Outstanding Notes
If a holder does not exchange outstanding notes for exchange notes in response to the exchange
offer, the outstanding notes will continue to be subject to the restrictions on transfer described in the legend on the certificate evidencing the outstanding notes, and will not have the benefit of any agreement by us to register outstanding notes
under the Securities Act. In general, notes may not be offered or sold, unless the sale is registered under the Securities Act, or unless the offer and sale are exempt from, or not subject to, the Securities Act or any applicable state securities
laws.
Participation in the exchange offer is voluntary and holders should carefully consider whether to accept the exchange offer and
tender their outstanding notes. Holders of outstanding notes are urged to consult their financial and tax advisors in making their own decisions on what action to take.
Accounting Treatment
The exchange notes
will be recorded in our accounting records at the same carrying value as the outstanding notes on the date of the exchange. Accordingly, we will not recognize any gain or loss for accounting purposes as a result of the exchange offer. We will
amortize the expenses of the exchange offer over the term of the exchange notes.
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Exchange Agent
Wells Fargo Bank, National Association has been appointed as exchange agent for the exchange offer. All correspondence in connection with the
exchange offer should be addressed to the exchange agent, as follows:
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By Registered or Certified Mail:
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By Regular Mail or Overnight Courier
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WELLS FARGO BANK, N.A.
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WELLS FARGO BANK, N.A.
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Corporate Trust Operations
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Corporate Trust Operations
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MAC N9300-070
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MAC N9300-070
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600 South Fourth Street
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600 South Fourth Street
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Minneapolis, MN 55402
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Minneapolis, MN 55402
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In Person by Hand Only:
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By Facsimile:
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WELLS FARGO BANK, N.A.
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(For Eligible Institutions Only):
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Corporate Trust Services
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Fax (612) 667-6282
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600 South Fourth Street
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Minneapolis, MN 55402
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For Information or Confirmation by
Telephone: (800)
344-5128
Requests for additional copies of this prospectus or the letter of transmittal or accompanying documents should be directed to the exchange
agent.
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