NVR, INC. and NVR HOMES, INC. (AS SUBSIDIARY GUARANTOR) AND THE BANK OF NEW YORK as Trustee First Supplemental Indenture Dated as of April 14, 1998 8% Senior Notes Due 2005
Exhibit 4.4
NVR, INC.
and
NVR HOMES, INC. (AS SUBSIDIARY GUARANTOR)
and
NVR HOMES, INC. (AS SUBSIDIARY GUARANTOR)
AND
Dated as of April 14, 1998
8% Senior Notes Due 2005
FIRST SUPPLEMENTAL INDENTURE, dated as of April 14, 1998, between NVR, INC., a Virginia
corporation (hereinafter called the “Company”), and NVR HOMES, INC., a Virginia corporation
(“Homes” ), as a Subsidiary Guarantor (as defined), each having its principal office at 0000
Xxxxxxxxxxx Xxxx, Xxxxx 000, XxXxxx, Xxxxxxxx, 00000 and THE BANK OF NEW YORK, a New York banking
corporation (the “Trustee”), having a Corporate Trust Office at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx, as Trustee under the Base Indenture and this First Supplemental Indenture (each as
hereinafter defined). Capitalized terms used and not otherwise defined herein shall have the
meaning set forth in the Base Indenture (as defined).
RECITALS
WHEREAS, the Company, and the Trustee have as of April 14, 1998 entered into an Indenture (the
"Base Indenture”) providing for the issuance by the Company from time to time of its senior debt
securities evidencing its unsecured and unsubordinated indebtedness, which, pursuant to Section
301(23) of the Base Indenture may be guaranteed by one or more of the Company’s subsidiaries;
WHEREAS, no Securities have been issued under the Base Indenture;
WHEREAS, the Company desires under this First Supplemental Indenture to issue the Notes (as
defined in Article III hereof) to be guaranteed on a senior unsecured basis by Homes (and under
certain circumstances defined herein, by other Subsidiary Guarantors (as defined in Article III
hereof)), and has duly authorized the creation of the Notes and the execution and delivery of this
First Supplemental Indenture to modify and supplement the Base Indenture and provide certain
additional provisions as hereinafter described;
WHEREAS, Homes desires to guarantee the Notes on a senior unsecured basis and, in accordance
with Section 301(23) of the Base Indenture and this First Supplemental Indenture, Homes has duly
authorized the issuance of its Subsidiary Guarantee (as defined) and the execution and delivery of
this First Supplemental Indenture and the Subsidiary Guarantee;
WHEREAS, in accordance with Section 901(7) of the Base Indenture, the Company and the Trustee
are authorized and permitted to amend and supplement the Base Indenture as set forth herein,
without the consent of any Holder, and all requirements set forth in Article Nine of the Base
Indenture to make this First Supplemental Indenture effective have been satisfied; and
WHEREAS, the Company, Homes and the Trustee deem it advisable to enter into this First
Supplemental Indenture for the purposes of establishing the terms of the Notes and the Subsidiary
Guarantees and for providing for the rights, obligations and duties of the Trustee with respect to
the Notes and Subsidiary Guarantees;
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the mutual premises and agreements herein contained, the Company,
Homes and the Trustee covenant and agree, for the equal and proportionate benefit of all Holders of
the Notes, as follows:
ARTICLE I.
CREATION OF THE NOTES
CREATION OF THE NOTES
Section 1.01. Designation of Series. Pursuant to the terms hereof and Sections 201 and 301 of
the Base Indenture, the Company hereby creates a series of its Notes known as the “8% Senior Notes
due 2005,” which shall be guaranteed by Homes and such Notes (including the associated Subsidiary
Guarantees) shall be deemed “Securities” for all purposes under the Base Indenture.
Section 1.02. Form of Notes. The definitive form of the Notes shall be substantially in the
form set forth in Exhibit A attached hereto and the definitive form of the Subsidiary
Guarantees to be attached to the Notes shall be substantially in the form set forth in Exhibit
B, each of which is incorporated herein and made part hereof. The Notes shall bear interest, be
payable and have such other terms as are stated in the form of definitive Note or in the Base
Indenture, as supplemented by this First Supplemental Indenture.
Section 1.03. Limit on Amount of Series. The initial principal amount of Notes issued under
this First Supplemental Indenture shall be $145,000,000 and the aggregate principal amount of Notes
authorized to be issued
under this series shall not exceed $175,000,000. Additional Notes may, upon the execution and
delivery of this First Supplemental Indenture or from time to time thereafter (subject to Section
5.02 hereof), be executed by the Company and delivered to the Trustee for authentication, and the
Trustee shall thereupon authenticate and deliver said Notes (which shall include the applicable
Subsidiary Guarantee) to or upon the written order of the Company, signed by its Chairman of the
Board, President or a Vice President and by its Chief Financial Officer, Treasurer or an Assistant
Treasurer or its Secretary or an Assistant Secretary, without further action by the Company.
Section 1.04. Certificate of Authentication. The Trustee’s certificate of authentication to be
borne on the Notes shall be substantially as provided in the Base Indenture.
Section 1.05. Designation of Restricted and Unrestricted Subsidiaries. As of the Issue Date,
the Restricted Subsidiaries of the Company shall be NVR Homes, Inc., NVR Financial Services, Inc.,
RVN, Inc. and Fox Ridge Homes, Inc. As of the Issue Date, all other Subsidiaries of the Company
shall be Unrestricted Subsidiaries.
ARTICLE II.
APPOINTMENT OF THE TRUSTEE FOR THE NOTES
APPOINTMENT OF THE TRUSTEE FOR THE NOTES
Section 2.01. Appointment of Trustee. Pursuant and subject to the Base Indenture, the Company,
Homes and the Trustee hereby constitute the Trustee as trustee to act on behalf of the Holders of
the Notes, and as the principal Paying Agent and Security Registrar for the Notes, effective upon
execution and delivery of this First Supplemental Indenture. By execution, acknowledgment and
delivery of this First Supplemental Indenture, the Trustee hereby accepts appointment as trustee,
Paying Agent and Security Registrar with respect to the Notes, and agrees to perform such trusts
upon the terms and conditions in the Base Indenture and in this First Supplemental Indenture set
forth.
Section 2.02. Rights, Powers, Duties and Obligations of the Trustee. Any rights, powers,
duties and obligations by any provisions of the Base Indenture conferred or imposed upon the
Trustee shall, insofar as permitted by law, be conferred or imposed upon and exercised or performed
by the Trustee with respect to the Notes.
ARTICLE III.
DEFINITIONS
DEFINITIONS
So long as any of the Notes are Outstanding, the following definitions shall be applicable to
the Notes, be included as defined terms for all purposes under the Base Indenture with respect to
the Notes and, to the extent inconsistent with the definition of such term contained in Section 101
of the Base Indenture, shall replace such definition for purposes of the Notes:
“1993 Notes” means the Company’s 11% Senior Notes due April 15, 2003 issued under that certain
Indenture dated as of September 30, 1993, as amended, among the Company, Homes, NVR Financial
Services, Inc., RVN, Inc. and Fox Ridge Homes, Inc. and IBJ Xxxxxxxxx Bank & Trust Company.
“Acquired Indebtedness” means Indebtedness of any Person that is not a Restricted Subsidiary,
which Indebtedness is outstanding at the time such Person becomes a Restricted Subsidiary, or is
merged into or consolidated with, the Company or a Restricted Subsidiary; provided, however, that
such Indebtedness was not incurred in connection with, or in contemplation of, such Person becoming
a Restricted Subsidiary or such merger or consolidation.
“Adjusted Net Assets” of a Subsidiary Guarantor at any date shall mean the lesser of (i) the
amount by which the fair value of the property of such Subsidiary Guarantor exceeds the total
amount of liabilities, including, without limitation, contingent liabilities (after giving effect
to all other fixed and contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Subsidiary Guarantee, of such Subsidiary Guarantor at such date and (ii) the
amount by which the present fair salable value of the assets of such Subsidiary Guarantor at such
date exceeds the amount that will be required to pay the probable liability of such Subsidiary
Guarantor on its debts (after giving effect to all other fixed and contingent liabilities incurred
or assumed on such date and after giving effect to any collection from any Subsidiary of such
Subsidiary Guarantor in respect of the obligations of such Subsidiary under the Subsidiary
Guarantee), excluding debt in respect of the Subsidiary Guarantee, as they become absolute and
matured.
“Affiliate” means, with respect to any specified Person, any other Person directly or
indirectly controlling or controlled by, or under direct or indirect common control with, such
specified Person. For purposes of this definition, the term “control” means the power to direct the
management and policies of a Person, either directly or through one or more intermediaries, whether
through the ownership of voting securities, by contract, or otherwise, or (b) without limiting the
foregoing, ownership of 20% or more of the voting power of the voting common equity of such Person
(on a fully diluted basis). Notwithstanding the foregoing, the term “Affiliate” shall not include,
with respect to the Company or any Restricted Subsidiary, any Restricted Subsidiary or, with
respect to any Restricted Subsidiary, the Company.
“Asset Sale” means, with respect to any Person, the sale, lease, conveyance or other
disposition (including, without limitation, by merger or consolidation, and whether by operation of
law or otherwise) of any of that Person’s assets (including, without limitation, the sale or other
disposition of Capital Stock of any Subsidiary of such Person, whether by such Person or by such
Subsidiary) whether owned on the Issue Date or subsequently acquired, in one transaction or a
series of related transactions, in which such Person and/or its Subsidiaries receive cash and/or
other consideration (including, without limitation, the unconditional assumption of Indebtedness of
such Person and/or its Subsidiaries) having an aggregate fair market value of $10,000,000 or more
as to such transaction or series of related transactions (each such transaction being referred to
herein as a “disposition”); provided, however, that the following transactions shall not constitute
an Asset Sale: (i) a transaction or series of related transactions that results in a Change of
Control; (ii) dispositions of land, building lots, homes, infrastructure, other buildings,
improvements, appurtenances and entitlements in the ordinary course of business and dispositions of
obsolete equipment; (iii) exchanges or swaps of real estate by the Company in the ordinary course
of business for real estate of substantially equivalent value (or for real estate and cash or Cash
Equivalents which, in the aggregate, have a substantially equivalent value); (iv) dispositions
between or among the Company and any one or more Restricted Subsidiaries or between or among
Restricted Subsidiaries; (v) a disposition that is a Permitted Investment (to the extent such
Permitted Investment may be deemed to constitute an Asset Sale) or a Restricted Payment permitted
under Section 5.01 hereof; and (vi) dispositions of the Capital Stock of Xxxx Mortgage Acceptance
Corporation IV.
“Attributable Debt” means, with respect to any Capitalized Lease Obligations, the capitalized
amount thereof determined in accordance with GAAP.
“Bank Credit Facility” means the Amended and Restated Credit and Security Agreement, dated as
of May 5, 1995, among NVR Homes, as borrower, the Company, as a guarantor, and the lenders named
therein and BankBoston N.A., as agent (together with the documents related thereto (including,
without limitation, any guaranty agreements), as such facility has been or may be amended,
restated, supplemented or otherwise modified from time to time, and includes any facility extending
the maturity of, increasing the total commitment of, or restructuring (including, without
limitation, the inclusion of Subsidiary Guarantors thereunder that are Restricted Subsidiaries of
the Company) all or any portion of, the Indebtedness under such facility or any successor or
replacement facilities and includes any facility with one or more agents or lenders refinancing or
replacing all or any portion of the Indebtedness under such facility or any successor facilities.
“Bankruptcy Law” means Title 11 of the United States Code, as amended, or any similar federal
or state law for the relief of debtors.
“Base Indenture” has the meaning set forth in the Recitals.
“Board of Directors” means the board of directors of the Company or any authorized committee
thereof.
“Capital Stock” means any and all shares, interests, participations or other equivalents
(however designated) of or in a Person’s capital stock or other equity interests, and options,
rights or warrants to purchase such capital stock or other equity interests, whether now
outstanding or issued after the Issue Date, including, without limitation, all Preferred Stock of
such Person if such Person is a corporation or membership interests if such Person is a limited
liability company and each general and limited partnership interest of such Person if such Person
is a partnership.
“Capitalized Lease Obligations” of any Person means the obligations of such Person to pay rent
or other amounts under a lease that is required to be capitalized for financial reporting purposes
in accordance with GAAP, and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
“Cash Equivalents” means (a) U.S. government obligations; (b) GNMA securities; (c) debt issued
by other agencies of the United States of America; (d) commercial paper rated either “A1” or
comparable by S&P or “P1” or comparable by Xxxxx’x; (e) Dutch auction preferred stocks rated either
“AA” or comparable by S&P or “Aa2” or comparable by Xxxxx’x; (f) certificates of deposit issued by
commercial banks or savings and loan associations whose short-term debt is rated either “A1” or
comparable by S&P or “P1” or comparable by Xxxxx’x or a comparable rating by Xxxxxxxx’x Bank Watch,
or if such an institution is a subsidiary, then its parent corporation may have such a rating; (g)
bankers acceptances issued by financial institutions that meet the requirements for certificates of
deposit; (h) deposits in institutions having the same qualifications required for investments in
certificates of deposit; (i) repurchase agreements collateralized by any otherwise acceptable
collateral as defined above; (j) money market accounts a majority of whose assets are composed of
items described by any of the foregoing clauses (a) through (i) through brokerage firms deemed
acceptable by the Company’s management; and (k) investments in mutual funds that are registered
under the Investment Company Act of 1940, as amended, which have net assets of at least
$100,000,000 and at least 85% of whose assets consist of securities having a rating of not less
than AAA or its equivalent by Xxxxx’x or investments or other obligations of the type described in
clauses (a) through (j) above (without regard to maturities).
“Change of Control” means the occurrence of any of the following events:
(i) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or
consolidation) in one or more series of related transactions of all or substantially all of the
assets of the Company on a consolidated basis;
(ii) any “person” or “group” (as such terms are used in Section 13(d) of the Exchange Act) is
or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of more than 50 percent of the total voting power of all securities
generally entitled to vote in the election of directors of the Company;
(iii) during any period of two consecutive calendar years, individuals who at the beginning of
such period constituted the Board of Directors (together with any new directors whose election by
such Board of Directors or whose nominations for elections by the stockholders of the Company was
approved by a majority vote of the directors of the Company 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
then in office; or
(iv) the merger or consolidation of the Company with or into another person or the merger of
another person with or into the Company in a transaction with the effect that immediately after
such transaction the stockholders of the Company immediately prior to such transaction hold less
than 50% of the total voting power of all securities generally entitled to vote in the election of
directors of the Person surviving such merger or consolidation.
“Consolidated EBITDA” of any Person for any period means (a) the Consolidated Net Income of
such Person for such period, plus (b) the sum, without duplication (and only to the extent such
amounts are deducted in determining such Consolidated Net Income), of (i) the provision for income
taxes for such period for such Person and its Subsidiaries (or, with respect to the Company, for
the Company and its Restricted Subsidiaries) (except to the extent of tax benefits associated with
an extraordinary loss) for such period, (ii) depreciation and amortization expense of such Person
and its Subsidiaries (or, with respect to the Company, for the Company and its Restricted
Subsidiaries), (iii) Consolidated Interest Expense of such Person for such period, and (iv) all
other noncash, nonextraordinary charges (excluding any non-cash charges to the extent they
represent an accrual of or reserve for cash charges in any future period or amortization of a
prepaid cash charge that was paid in a prior period) reducing Consolidated Net Income for such
period determined, in each case, on a consolidated basis for such Person and its Subsidiaries (or,
with respect to the Company, for the Company and its Restricted Subsidiaries) in accordance with
GAAP.
“Consolidated Fixed Charge Coverage Ratio” on any date (the “Transaction Date”) means, with
respect to any Person, the ratio of (a) the aggregate amount of Consolidated EBITDA of such Person
attributable to continuing operations and businesses for the Reference Period to (b) the sum of (i)
the aggregate Consolidated Interest Incurred of such Person (exclusive of amounts attributable to
discontinued operations and businesses, but in each case only to the extent that the obligations
giving rise to such Consolidated Interest Incurred would no longer be obligations
contributing to such Person’s Consolidated Interest Incurred subsequent to the Transaction
Date) for the Reference Period, plus (ii) dividends paid or accrued (unless paid to, or accrued in
favor of, the Company or its Restricted Subsidiaries) on Disqualified Capital Stock of the Company
and Restricted Subsidiaries of the Company during the Reference Period times a fraction, the
numerator of which is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of the Company; provided that for purposes of such
computation, in calculating Consolidated EBITDA and Consolidated Interest Incurred, (w) the
transaction giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio shall
be assumed to have occurred (on a pro forma basis) on the first day of the Reference Period; (x)
the Incurrence of any Refinancing Indebtedness during the Reference Period or subsequent thereto
and on or prior to the Transaction Date (and the proceeds of which were used to refinance
Indebtedness other than Indebtedness under revolving credit facilities) shall be assumed to have
occurred (on a pro forma basis) on the first day of such Reference Period; (y) Consolidated
Interest Incurred attributable to any Indebtedness being Incurred bearing a floating interest rate
shall be computed as if the rate in effect on the Transaction Date had been the applicable rate for
the entire period, unless the Company or any of its Restricted Subsidiaries is a party to an
Interest Swap Obligation (which shall remain in effect for the 12-month period after the
Transaction Date) that has the effect of fixing the interest rate on the date of computation, in
which case such rate (whether higher or lower) shall be used; and (z) all members of the
consolidated group of the Company on the Transaction Date that were acquired during the Reference
Period or on or prior to the Transaction Date shall be deemed to be members of the consolidated
group of the Company, along with any Indebtedness incurred in connection with the acquisition
thereof, for the entire Reference Period.
“Consolidated Interest Expense” of any Person for any period means the Interest Expense of
such Person and its Subsidiaries or, with respect to the Company, of the Company and its Restricted
Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“Consolidated Interest Incurred” of any Person for any period means the Interest Incurred of
such Person and its Subsidiaries or, with respect to the Company, of the Company and its Restricted
Subsidiaries (other than the Company’s financial services segment Restricted Subsidiaries) for such
period, determined on a consolidated basis in accordance with GAAP.
“Consolidated Net Assets” of the Company as of any date means the total amount of assets of
the Company and its Restricted Subsidiaries (less applicable reserves) on a consolidated basis at
the end of the fiscal quarter immediately preceding such date for which financial information is
available, as determined in accordance with GAAP, as reflected on the consolidated balance sheet of
the Company and its Restricted Subsidiaries as of the end of such fiscal quarter.
“Consolidated Net Income” of any Person for any period means the aggregate net income (or
loss) of such Person and its Subsidiaries (or, with respect to the Company, of the Company and its
Restricted Subsidiaries) (collectively for the purposes of this definition of Consolidated Net
Income only, the “Relevant Person”) for such period, determined on a consolidated basis in
accordance with GAAP, excluding without duplication: (a) the net income (or loss) of any other
Person in which the Relevant Person has an ownership interest, other than cash dividends or cash
distributions during such period that have been received by the Relevant Person; (b) extraordinary
gains and losses, net of the tax effects thereof; (c) except to the extent includable in
Consolidated Net Income pursuant to the foregoing clause (a), the net income (or loss) of any
Person that accrued prior to the date that such Person was acquired by the Relevant Person or is
merged into or consolidated with the Relevant Person or any of its Subsidiaries (or in the case of
the Company, any Person that is an Unrestricted Subsidiary or prior to the date that such Person is
acquired by the Company as a Restricted Subsidiary or becomes a Restricted Subsidiary); (d) the net
income of any Restricted Subsidiary to the extent that (and only so long as) the declaration or
payment of dividends or similar distributions by such Restricted Subsidiary of that income is
prohibited by the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted Subsidiary during such
period; (e) any expense related to the amortization of reorganization value in excess of amounts
allocable to identifiable assets (as defined by GAAP) and (f) any noncash expense related to the
issuance of Qualified Capital Stock of the Company pursuant to the Company’s 1994 Management
Incentive Plan.
“Consolidated Net Worth” of any Person as of any date means the stockholders’ equity
(including any preferred stock that is classified as equity under GAAP, but excluding Disqualified
Capital Stock) of such Person and its Subsidiaries (or, with respect to the Company, of the Company
and its Restricted Subsidiaries) on a consolidated basis at
the end of the fiscal quarter immediately preceding such date for which financial information
is available, as determined in accordance with GAAP.
“Currency Agreement” of any Person means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect such Person or any of its
Subsidiaries or Affiliates against fluctuations in currency values.
“Custodian” means any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.
“Default” means any event, act or condition that is, or after notice or the passage of time or
both would be, unless otherwise timely cured, an Event of Default.
“Designation Amount” has the meaning set forth in the definition of “Unrestricted Subsidiary.”
“Disinterested Director” means a member of the Board of Directors of the Company who does not
have any material direct or indirect financial interest in or with respect to the transaction being
considered.
“Disqualified Capital Stock” means (a) with respect to any Person, any Capital Stock of such
Person or its Subsidiaries that, by its terms or by the terms of any security into which it is
convertible or exchangeable, is, or upon the happening of an event or the passage of time would be,
required to be redeemed or repurchased by such Person or its Subsidiaries, including at the option
of the Holder, in whole or in part, or has, or upon the happening of an event or passage of time
would have, a redemption or similar payment due on or prior to the Stated Maturity; and (b) with
respect to any Restricted Subsidiary, any Capital Stock (other than (i) Capital Stock owned by the
Company or a Restricted Subsidiary; and (ii) common stock with no preferences or privileges and
with no redemption or repayment provisions).
“Equity Investor” with respect to any Person means any other Person that has made an
investment in the capital stock, shares, interests, participation or other ownership interests of
such other Person (including any option, warrant or right to acquire any such interest) or has made
any capital contribution to such other Person and owns a minority interest in such Person.
“Event of Default” has the meaning set forth in Section 4.01 hereof
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Existing Indebtedness” means all of the Indebtedness of the Company and its Subsidiaries that
is outstanding on the Issue Date.
“First Supplemental Indenture” means the Base Indenture as modified and supplemented by this
First Supplemental Indenture, as either may be modified, amended or supplemented in accordance with
their terms.
“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 date of this First Supplemental
Indenture.
“Holder” means the person in whose name a Note is registered on the register for the Notes.
“Incur” means, with respect to any Indebtedness or other obligation of any Person, to create,
issue, incur (including by conversion, exchange or otherwise), assume, guarantee or otherwise
become liable in respect of such Indebtedness or other obligation or the recording, as required
pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of
such Person (and “Incurrence,” “Incurred” and “Incurring” shall have meanings correlative to the
foregoing). Indebtedness of a Person existing at the time such Person becomes a Restricted
Subsidiary or is merged or consolidated with or into the Company or any Restricted Subsidiary shall
be deemed to be Incurred at such time. Neither the accrual of interest, nor the accretion of
original issue discount, nor the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, nor the payment of dividends on Disqualified Capital Stock in the
form of additional shares of the same class of Disqualified Capital Stock shall be deemed to be an
Incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of this First
Supplemental Indenture; provided, in
each such case, that the amount thereof is included for purposes of the Consolidated Fixed
Charge Coverage Ratio of the Company. In addition, the mere extension of the term of lender
commitments to extend credit or funds to the Company or any of its Subsidiaries pursuant to a
revolving credit agreement or similar arrangement shall not be deemed to be an Incurrence of
Indebtedness.
“Indebtedness” of any Person means, without duplication, (a) any liability of such Person
(other than accounts payable, other trade payables, general contingency and tax reserves,
liabilities for deposits and deferred income which in accordance with GAAP are recorded as
liabilities and accrued expenses (including without limitation, obligations for insurance premiums)
Incurred in the ordinary course of business) (i) for borrowed money or under any reimbursement
obligation relating to a letter of credit or other similar instruments (other than standby letters
of credit, performance, completion, surety or similar bonds or instruments issued for the benefit
of such Person or surety, performance, completion or payment xxxxx, xxxxxxx money notes or similar
purpose undertakings or indemnifications issued by, such Person in the ordinary course of
business); (ii) 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 or with services (other than any obligation to pay a contingent purchase price which,
as of the date of Incurrence thereof is not required to be recorded as a liability in accordance
with GAAP); or (iii) in respect of Capitalized Lease Obligations (to the extent of the Attributable
Debt in respect thereof), (b) any Indebtedness of others that such Person has guaranteed to the
extent of the guaranty, (c) to the extent not otherwise included, Interest Swap Obligations or the
obligations of such Person under Currency Agreements, in either case to the extent recorded as
liabilities not constituting Interest Incurred, net of amounts recorded as assets in respect of
such agreements, in accordance with GAAP, (d) all Indebtedness of others secured by a Lien (other
than a Permitted Lien) on any asset of such Person, whether or not such Indebtedness is assumed by
such Person, and (e) all Disqualified Stock issued by such Person (the amount of indebtedness
represented by any Disqualified Stock shall equal the greater of the voluntary or involuntary
liquidation preference plus accrued and unpaid dividends). The amount of Indebtedness of any Person
at any date shall be (A) the outstanding balance at such date of all unconditional obligations as
described above, net of any unamortized discount to be accounted for as Interest Expense, in
accordance with GAAP, (B) the maximum liability of such Person for any contingent obligations under
clause (b) above at such date, net of, any unamortized discount to be accounted for as Interest
Expense in accordance with GAAP and (C) in the case of clause (d) above, the lesser of (1) the fair
market value of any asset subject to a Lien securing the Indebtedness of others on the date that
the Lien attaches and (2) the amount of the Indebtedness secured.
“Interest Expense” of any Person for any period means, without duplication, the aggregate
amount of interest which, in conformity with GAAP, should be set opposite the caption “interest
expense” or any like caption on an income statement for such Person (including, without limitation,
imputed interest included on Capitalized Lease Obligations, the interest portion of any deferred
payment obligation, amortization of discount or premium, if any, and all other noncash interest
expense) plus, with respect to the Company and its Restricted Subsidiaries, without duplication
(including duplication of the foregoing items), amortization of issue costs on Indebtedness, all
interest included as a component of cost of sales for such period, and all commissions, discounts
and other fees and charges owed with respect to bankers’ acceptance financing, and amortization and
expensing of other financing fees and expenses, and all interest actually paid by the Company or a
Restricted Subsidiary under any guaranty of Indebtedness (including, without limitation, a guaranty
of principal, interest or any combination thereof) of any other Person during such period.
“Interest Incurred” of any Person for any period means, without duplication, the aggregate
amount of interest which, in conformity with GAAP, should be set opposite the caption “interest
expense” or any like caption on an income statement for such Person (including, without limitation,
imputed interest included on Capitalized Lease Obligations, the interest portion of any deferred
payment obligation, amortization of discount or premium, if any, and all other noncash interest
expense) plus, with respect to the Company and its Restricted Subsidiaries, without duplication
(including duplication of the foregoing items), all interest capitalized for such period,
amortization of issue costs on Indebtedness, all commissions, discounts and other fees and charges
owed with respect to bankers’ acceptance financing, amortization and expensing of other financing
fees and expenses, and all interest actually paid by the Company or a Restricted Subsidiary under
any guaranty of Indebtedness (including, without limitation, a guaranty of principal, interest or
any combination thereof) of any other Person during such period.
“Interest Swap Obligation” means any obligation of any Person pursuant to any arrangement
whereby such Person is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating
rate of interest on a stated notional amount in exchange for periodic payments made by such
Person calculated by applying a fixed or floating rate of interest on the same notional amount;
provided, that the term “Interest Swap Obligation” shall also include interest rate exchange,
collar, swap option, futures contracts or other similar agreements providing interest rate
protection.
“Investment” by any Person in any other Person means (without duplication) (a) the acquisition
by such Person (whether for cash, property, services, securities or otherwise) of Capital Stock,
bonds, notes, debentures, partnership, or other ownership interests, or other securities of such
other Person, (b) the making by such Person of any deposit with, or advance, loan or other
extension of credit to, such other Person (including the purchase of property from such other
Person subject to an understanding or agreement, contingent or otherwise, to resell such property
to such other Person), except in the ordinary course of business, (c) the entering into by such
Person of any guaranty of, or other contingent obligation with respect to, Indebtedness or other
liability of such other Person, or (d) the making of any capital contribution by such Person to
such other Person.
“Investment Grade” shall mean BBB- or higher by S&P or Baa3 or higher by Moody’s or the
equivalent of such ratings by S&P or Moody’s.
“Issue Date” means the date of original issuance of the Notes.
“Lien” means any mortgage, lien, pledge, charge, security interest or encumbrance of any kind
with respect to any Property.
“Moody’s” means Xxxxx’x Investors Service, Inc. or any successor to its debt rating business.
“Net Cash Proceeds” means (i) cash (in U.S. dollars or freely convertible into U.S. dollars)
received by the Company or any Restricted Subsidiary from an Asset Sale net of all (a) brokerage
commissions, and all other fees and expenses (including, without limitation, fees and expenses of
counsel and investment bankers) related to such Asset Sale, (b) provisions for all income and other
taxes measured by or resulting from such Asset Sale, (c) payments made to retire Indebtedness where
payment of such Indebtedness is required by instruments governing such indebtedness and secured by
the assets sold pursuant to and in connection with such Asset Sale, (d) amounts required to be paid
to any Person (other than the Company or a Restricted Subsidiary) owning a legal or beneficial
interest in the assets subject to the Asset Sale, (e) appropriate amounts to be provided by the
Company or any Restricted Subsidiary thereof, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained by the Company or any
Restricted Subsidiary thereof, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment liabilities under any indemnification obligations
associated with such Asset Sale, all as reflected in an Officers’ Certificate delivered to the
Trustee, and (ii) all noncash consideration received by the Company or any of its Restricted
Subsidiaries from such Asset Sale promptly thereupon liquidated or converted into cash, without
duplication, net of all items enumerated in subclauses (a) through (e) of clause (i) hereof.
“Non-Recourse Indebtedness” means, with respect to any Person, Indebtedness (or any portion
thereof) of such Person for which the sole legal recourse for collection of principal, premium, and
interest on such Indebtedness is against the specific property identified in the instruments
evidencing or securing such Indebtedness, which property was acquired with the proceeds of such
Indebtedness or such Indebtedness was Incurred within 180 days after the acquisition of such
property, without any liability on the part of any such Person for any deficiency with respect to
principal, premium or interest.
“Notes” means the 8% Senior Notes due 2005 issued hereunder, as supplemented from time to time
in accordance with the terms hereof.
“Officer” means the Chairman of the Board, the President, the Chief Executive Officer, any
Vice President, the Treasurer or the Secretary of the Company or, as applicable, any Restricted
Subsidiary.
“Permitted Business” means any business primarily engaged in homebuilding (including
townhomes, condominiums and single family homes), related financial services, or other activities
reasonably related or incident to the foregoing.
“Permitted Investment” means (a) Investments in Cash Equivalents, (b) Investments in the
Company or in its Restricted Subsidiaries, (c) Investments by the Company or any Restricted
Subsidiary of the Company in a Person,
if as a result of such Investment (i) such Person becomes a Restricted Subsidiary of the
Company or (ii) such Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted
Subsidiary; (d) advances to Xxxx Mortgage Acceptance Corporation IV for the purpose of redeeming
the bonds of such entity; provided that (i) the net proceeds of the sale of the collateral securing
such bonds shall be used to repay such advance with any remaining net proceeds to be distributed as
a dividend to NVRFS, (ii) at the time of such Investment, a valid written commitment shall be in
place from an investor not affiliated with the Company to purchase such collateral within a
specified period of time, which period shall in no event exceed 60 days, and at a specific price or
yield and (iii) each advance is repaid within two Business Days after the delivery of the
collateral pursuant to such written commitment; (e) loans or advances made in the ordinary course
of business to officers, directors or employees of the Company or any of its Restricted
Subsidiaries in an amount not to exceed $2,000,000 at any one time outstanding, (f) Investments
made prior to the Issue Date, (g) Investments in the form of guaranties to the extent such
guaranties are permitted to be Incurred pursuant to Section 5.02 hereof, (h) net cash Investments
in and advances to Unrestricted Subsidiaries in an amount not to exceed $20,000,000 at any one time
outstanding, (i) Investments having an aggregate fair market value (measured on the date each such
Investment is made and without giving effect to subsequent changes in value) not to exceed
$15,000,000 in any fiscal year and not to exceed $30,000,000 at any one time outstanding, in any
Permitted Business and (j) Investments in NVR Mortgage Finance, Inc. to be used by NVR Mortgage
Finance, Inc. solely for the purpose of funding mortgage loans in the ordinary course of business
in an amount not to exceed $25,000,000; provided, however, that (i) a valid take-out commitment is
in place at the time of the closing of the mortgage loan from an investor not affiliated with the
Company, and (ii) any particular advance remains outstanding for no more than 15 consecutive
calendar days in any calendar month.
“Permitted Liens” means (a) Liens for taxes, assessments or governmental charges or claims
that either (i) are not yet delinquent, (ii) are being contested in good faith by appropriate
proceedings and as to which appropriate reserves have been established or other provisions have
been made in accordance with GAAP, or (iii) solely encumber property abandoned or in the process of
being abandoned, (b) statutory Liens of landlords and carriers’, warehousemen’s, mechanics’,
suppliers’, materialmen’s, repairmen’s or other Liens imposed by law and arising in the ordinary
course of business and with respect to amounts that, to the extent applicable, either (i) are not
yet delinquent or (ii) are being contested in good faith by appropriate proceedings and as to which
appropriate reserves have been established or other provisions have been made in accordance with
GAAP, (c) Liens Incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social security, (d) Liens
Incurred or deposits made to secure the performance of tenders, bids, leases, statutory
obligations, surety and appeal bonds, performance bonds, completion bonds, performance guaranty
bonds, progress payments, government contracts, utility services and other obligations of like
nature in each case Incurred in the ordinary course of business, (e) attachment or judgment Liens
with respect to judgments or proceedings which, with the passage of time, would not constitute an
Event of Default and which are being contested in good faith by appropriate proceedings, (f)
easements, dedications, assessment district or similar Liens in connection with municipal or
special district financing, rights-of-way, zoning restrictions, reservations and other similar
charges, encumbrances or burdens not materially interfering with the ordinary course of business,
(g) leases or subleases granted to others not materially interfering with the ordinary course of
business, (h) Liens on assets securing Refinancing Indebtedness which refinanced Indebtedness that
was previously secured by such assets, (i) any interest in or title of a lessor to property subject
to any Capitalized Lease Obligation Incurred in compliance with this First Supplemental Indenture,
(j) Liens existing on the date of this First Supplemental Indenture, including without limitation,
Liens securing Existing Indebtedness, (k) any right of first refusal, right of first offer, option,
contract or other agreement to sell or purchase an asset, pay lot premiums or participate in the
income or revenue derived therefrom, (l) Liens securing Non-Recourse Indebtedness of the Company or
a Restricted Subsidiary, (m) Liens on property or assets of any Restricted Subsidiary securing
Indebtedness of such Restricted Subsidiary owing to the Company or one or more of its Restricted
Subsidiaries, (n) any legal right of, or right granted in good faith to, a lender or lenders to
which the Company or a Restricted Subsidiary may be indebted to offset against, or appropriate and
apply to the payment of, such Indebtedness any and all balances, credits, deposits, accounts or
monies of the Company or a Restricted Subsidiary with or held by such lender or lenders, (o) Liens
in favor of the Trustee arising pursuant to this First Supplemental Indenture, (p) Liens Incurred
in the ordinary course of business as security for the Company’s or its Restricted Subsidiaries’
obligations with respect to indemnification in favor of title insurance providers, (q) letters of
credit, bonds or other assets pledged to secure insurance in the ordinary course of business, (r)
Liens on property of a person existing at the time such person is merged into or consolidated with
the Company or any Restricted Subsidiary of the Company; provided, that such Liens were not
incurred in connection with, or in
contemplation of, such merger or consolidation; (s) Liens on property existing at the time of
acquisition thereof by the Company or any Restricted Subsidiary of the Company; provided that such
Liens (a) were not incurred in connection with, or in contemplation of, such acquisition and (b) do
not extend to any assets of the Company or any of its Restricted Subsidiaries other than the
property so acquired; (t) Liens incurred or pledges or deposits made in the ordinary course of
business to secure payment of workers’ compensation, or to participate in any fund in connection
with workers’ compensation, unemployment insurance, old age pensions or other social security
programs; (u) Liens created by special assessment districts used to finance infrastructure
improvements; (v) interests of purchasers of housing units in such units arising under the
applicable contracts of sale or applicable law; (w) any pledge or deposit of cash or property in
conjunction with obtaining bonds or letters of credit required to engage in constructing on-site
and off-site improvements required by municipalities or other governmental authorities in the
ordinary course of business; (x) purchase money mortgages (including, without limitation,
Capitalized Lease Obligations and purchase money security interests); and (y) any other Liens,
provided, that the aggregate amount of obligations secured by such other Liens outstanding at any
one time does not exceed 10% of the Company’s Consolidated Net Worth at the time of Incurrence
thereof.
“Person” means any individual, corporation, partnership, limited liability company, joint
venture, incorporated or unincorporated association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
“Preferred Stock” of any Person means all Capital Stock of such Person which has a preference
in liquidation or with respect to the payment of dividends.
“Property” of any Person means all types of real, personal, tangible, intangible or mixed
property owned by such Person, whether or not included in the most recent consolidated balance
sheet of such Person and its Subsidiaries under GAAP.
“Qualified Capital Stock” means Capital Stock other than Disqualified Capital Stock.
“Public Equity Offering” means an underwritten public offering by the Company of its Qualified
Capital Stock pursuant to a registration statement effective under the Securities Act (other than a
registration statement on Form S-8 or similar form).
“Rating Agencies” shall mean (i) S&P and (ii) Moody’s.
“Reference Period” with regard to any Person means the four full fiscal quarters of such
Person ended on or immediately preceding any date upon which any determination is to be made
pursuant to the terms of the Notes or this First Supplemental Indenture for which financial
information is available.
“Refinancing Indebtedness” means Indebtedness that is an extension, renewal, replacement or
refunding of Indebtedness permitted to be Incurred by this First Supplemental Indenture; provided,
however, that (a) the maximum principal amount of Refinancing Indebtedness (or, if such Refinancing
Indebtedness does not require cash payments prior to maturity or is otherwise issued at a discount,
the original issue price of such Refinancing Indebtedness) permitted may not exceed (i) the
principal amount of the Indebtedness being extended, renewed, replaced or refunded plus reasonable
financing fees and other associated reasonable out-of-pocket expenses and any prepayment premium,
penalty, consent fees and accrued interest (collectively, “Refinancing Fees”); or (ii) if such
Indebtedness being extended, renewed, replaced, or refunded was issued at an original issue
discount, the original issue price, plus amortization of the original issue discount to the time of
the Incurrence of the Refinancing Indebtedness plus Refinancing Fees, (b) except with respect to
Indebtedness Incurred to finance the acquisition, holding or development of real property and
related appurtenances and the construction of improvements thereon and Incurred in the ordinary
course of business and in compliance with the terms of this First Supplemental Indenture, the
Refinancing Indebtedness has a Weighted Average Life and a final maturity that is equal to or
greater than the Indebtedness being extended, renewed, replaced or refunded at the time of such
extension, renewal, replacement or refunding, (c) the Refinancing Indebtedness shall rank with
respect to the Notes to an extent no less favorable in respect thereof to the Holders than the
Indebtedness being refinanced, and (d) the Company may Incur Refinancing Indebtedness only to
refinance Indebtedness of the Company or a Subsidiary Guarantor, and a Subsidiary Guarantor may
Incur Refinancing Indebtedness only to refinance Indebtedness of the Company or a Subsidiary
Guarantor and a Restricted Subsidiary that is not a Subsidiary Guarantor may incur Refinancing
Indebtedness only to refinance Indebtedness of such Restricted Subsidiary or another
Restricted Subsidiary that is not a Subsidiary Guarantor.
“Restricted Payment” means, with respect to any Person, (a) any dividend or other distribution
on shares of Capital Stock of the Company or any Restricted Subsidiary, (b) any payment on account
of the purchase, redemption or other acquisition or retirement for value, in whole or in part, of
any shares of Capital Stock of the Company or any Restricted Subsidiary, (c) any defeasance,
redemption, repurchase, or other acquisition or retirement for value, or any payment in respect of
any amendment (in anticipation of or in connection with any such retirement, acquisition, or
defeasance), in whole or in part, of any Indebtedness of the Company or a Restricted Subsidiary
that is subordinate in right of payment to the Notes, but only if such defeasance, redemption,
repurchase or other acquisition or retirement is made prior to the scheduled payment on such
Indebtedness and (d) any Investment (other than a Permitted Investment); provided, however, that
the term “Restricted Payment” does not include (i) any dividend, distribution, or other payment on
shares of Capital Stock of the Company or a Restricted Subsidiary solely in shares of Qualified
Capital Stock of the Company or such Restricted Subsidiary, (ii) any dividend, distribution, or
other payment to the Company or any of its Restricted Subsidiaries by any of its Subsidiaries,
(iii) the purchase, redemption or other acquisition or retirement for value of any shares of
Capital Stock of a Subsidiary owned by the Company, (iv) any defeasance, redemption, repurchase or
other acquisition or retirement for value, in whole or in part, of (A) Indebtedness of the Company
payable solely in shares of Capital Stock or Subordinated Indebtedness of the Company, (B)
Indebtedness or Disqualified Capital Stock of a Restricted Subsidiary payable solely in shares of
Capital Stock of the Company or such Restricted Subsidiary or Subordinated Indebtedness of the
Company, or (C) Indebtedness of the Company owed to Subsidiary Guarantors and Indebtedness of the
Company that is subordinated in right of payment to the Notes and owed to its Restricted
Subsidiaries that are not Subsidiary Guarantors, (v) any defeasance, redemption, repurchase, or
other acquisition or retirement for value, in whole or in part, of Subordinated Indebtedness of the
Company or a Restricted Subsidiary existing on the Issue Date or (vi) any proportionate payment in
respect of minority interests in Restricted Subsidiaries to the extent that the payment constitutes
a return of capital that was not included in the Company’s shareholders’ equity or a dividend or
similar distribution not included in determining the Company’s Consolidated Net Income.
“Restricted Subsidiary” means each of the Subsidiaries of the Company which is not an
Unrestricted Subsidiary.
“S&P” means Standard and Poor’s Ratings Group or any successor to its debt rating business.
“SEC” means the Securities and Exchange Commission or any successor agency performing the
duties now assigned to it under the TIA.
“Securities” has the meaning set forth in the Recitals.
“Securities Act” means the Securities Act of 1933, as amended.
“Significant Subsidiary” means any Subsidiary of the Company which would constitute a
“significant subsidiary” as defined in Rule 1.02 of Regulation S-X under the Securities Act and the
Exchange Act.
“Stated Maturity,” when used with respect to any Note, means June 1, 2005.
“Subordinated Indebtedness” means Indebtedness of the Company which is subordinated in right
of payment to the prior payment in full, including all payment of principal, premium and all
accrued interest (and post-petition interest) on, and all other amounts owing in connection with
the Notes.
“Subsidiary” of any Person means any corporation or other entity (other than political
subdivisions or enterprises thereof or governmental agencies) of which at least 50% of the Capital
Stock having ordinary voting power to elect the Board of Directors or other persons performing
similar functions is at the time directly or indirectly owned or controlled by such Person.
“Subsidiary Guarantor” means NVR Homes, Inc. and any other Subsidiary of the Company that is
required to execute a Subsidiary Guarantee pursuant to this First Supplemental Indenture.
“Subsidiary Guarantee” means the guarantee of the Notes by any Subsidiary Guarantor as set
forth in Exhibit B hereto.
“TIA” means the Trust Indenture Act of 1939, as in effect from time to time.
“Trustee” means the party named as such in the Base Indenture and this First Supplemental
Indenture until a successor replaces it pursuant to the Base Indenture and thereafter means the
successor serving under the Base Indenture and this First Supplemental Indenture.
“U.S. Legal Tender” means such coin or currency of the United States of America as at the time
of payment shall be legal tender for the payment of public and private debts.
“Unrestricted Subsidiary” means each of the Subsidiaries of the Company so designated by a
resolution adopted by the Board of Directors of the Company as provided below and whose creditors
have no direct or indirect recourse (including, without limitation, no recourse with respect to the
payment of principal or interest on Indebtedness of such Subsidiary) to the Company or a Restricted
Subsidiary. The Board of Directors of the Company may redesignate an Unrestricted Subsidiary to be
a Restricted Subsidiary; provided that (i) any such redesignation shall be deemed to be an
Incurrence by the Company and its Restricted Subsidiaries of the Indebtedness (if any) of such
redesignated Subsidiary for purposes of this First Supplemental Indenture as of the date of such
redesignation, and (ii) immediately after giving effect to such redesignation and the incurrence of
any such additional Indebtedness, the Company and its Restricted Subsidiaries could incur $1.00 of
additional Indebtedness pursuant to paragraph (b) of Section 5.02 hereof. Subject to the foregoing,
the Board of Directors of the Company also may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary; provided that (i) a Restricted Payment shall be deemed to be made at the
time of such designation and such designation shall reduce the Basket to the extent of the book
value (in accordance with GAAP) of the Company’s or a Restricted Subsidiary’s investment in the
Subsidiary being designated an Unrestricted Subsidiary (the “Designation Amount”), and (ii)
immediately after giving effect to such designation and reduction of the Basket, the Company and
its Restricted Subsidiaries could incur $1.00 of additional Indebtedness pursuant to paragraph (b)
of Section 5.02 hereof. Any such designation or redesignation by the Board of Directors of the
Company shall be evidenced to the Trustee by the filing with the Trustee a certified copy of the
resolution of the Board of Directors of the Company giving effect to such designation or
redesignation and an Officers’ Certificate certifying that such designation or redesignation
complied with the foregoing conditions and setting forth the underlying calculations of such
Officers’ Certificate.
“Weighted Average Life” means, as of the date of determination, with respect to any debt
instrument, the quotient obtained by dividing (i) the sum of the products of the number of years
from the date of determination to the dates of each successive scheduled principal payment of such
debt instrument multiplied by the amount of such principal payment by (ii) the sum of all such
principal payments.
ARTICLE IV.
EVENTS OF DEFAULT
EVENTS OF DEFAULT
Section 4.01. Events of Default. Pursuant to Section 301(15) of the Base Indenture, so long as
any Notes are outstanding, the Company covenants and agrees that “Event of Default,” wherever used
herein, means any one of the following events, which are applicable to the Notes instead of the
Events of Default specified in Section 501 of the Base Indenture:
(a) default in the payment of interest on the Notes as and when the same becomes due and
payable and the continuance of any such failure for 30 days;
(b) default in the payment of all or any part of the principal or premium, if any, on the
Notes when and as the same become due and payable at maturity, redemption, by declaration of
acceleration or otherwise;
(c) failure by the Company or a Restricted Subsidiary, as the case may be, to comply with
Sections 5.01, 5.02, 5.04, 5.08, 5.09, 5.10 or Article VI hereof;
(d) default in the observance or performance of, or breach of, any covenant, agreement or
warranty of the Company contained in the Notes, the Base Indenture or this First Supplemental
Indenture (unless specifically dealt with elsewhere), and continuance of such default or breach for
a period of 60 days after there has been given, by registered or certified mail, to the Company by
the Trustee, or to the Company and the Trustee by Holders of at least 25% in aggregate principal
amount of the outstanding Notes, a written notice specifying such default or breach, requiring it
to be remedied and stating that such notice is a “Notice of Default” hereunder;
(e) a decree, judgment, or order by a court of competent jurisdiction shall have been entered
adjudging the Company or any of its Significant Subsidiaries as bankrupt or insolvent, or approving
as properly filed a petition in an involuntary case or proceeding seeking reorganization of the
Company or any of its Significant Subsidiaries under any bankruptcy or similar law, or a decree,
judgment or order of a court of competent jurisdiction directing the appointment of a receiver,
liquidator, trustee, or assignee in bankruptcy or insolvency of the Company, any of its Significant
Subsidiaries, or of the property of any such Person, or the winding up or liquidation of the
affairs of any such Person, shall have been entered, and the continuance of any such decree,
judgment or order unstayed and in effect for a period of 90 consecutive days;
(f) the Company or any of its Significant Subsidiaries shall institute proceedings to be
adjudicated a voluntary bankrupt (including conversion of an involuntary proceeding into a
voluntary proceeding), or shall consent to the filing of a bankruptcy proceeding against it, or
shall file a petition or answer or consent to the filing of any such petition, or shall consent to
the appointment of a Custodian, receiver, liquidator, trustee, or assignee in bankruptcy or
insolvency of it or any of its assets or property, or shall make a general assignment for the
benefit of creditors, or shall admit in writing its inability to pay its debts generally as they
become due, or shall, within the meaning of any Bankruptcy Law, become insolvent, or fail generally
to pay its debts as they become due;
(g) (i) the acceleration of any Indebtedness (other than Non-Recourse Indebtedness) of the
Company or any of its Restricted Subsidiaries (in accordance with the terms of such Indebtedness
and after giving effect to any applicable grace period set forth in the documents governing such
Indebtedness) that has an outstanding principal amount of $25,000,000 or more individually or in
the aggregate to be immediately due and payable; and (ii) the failure by the Company or any of its
Restricted Subsidiaries to make any principal, premium, interest or other required payment in
respect of Indebtedness (other than Non-Recourse Indebtedness) of the Company or any of its
Restricted Subsidiaries with an outstanding aggregate principal amount of $25,000,000 or more
individually or in the aggregate (after giving effect to any applicable grace period set forth in
the documents governing such Indebtedness);
(h) one or more final nonappealable judgments (in the amount not covered by insurance or not
reserved for) or the issuance of any warrant of attachment against any portion of the property or
assets (except with respect to Non-Recourse Indebtedness) of the Company or any Restricted
Subsidiary, which are $10,000,000 or more individually or in the aggregate, at any one time
rendered against the Company or any of its Restricted Subsidiaries by a court of competent
jurisdiction and not bonded, satisfied or discharged for a period (during which execution shall not
be effectively stayed) of (i) 45 days after the judgment (which, if there is more than one
judgment, causes such judgments to exceed $10,000,000 in the aggregate) becomes final and such
court shall not have ordered or approved, and the parties shall not have agreed upon, the payment
of such judgment at a later date or dates or (ii) 60 days after all or any part of such judgment is
payable pursuant to any court order or agreement between the parties; and
(i) any Subsidiary Guarantee of the Notes shall be held in a judicial proceeding to be
unenforceable or invalid or shall, except as permitted by this First Supplemental Indenture, cease
for any reason to be in full force and effect, or any Subsidiary Guarantor, or any Person acting on
behalf of a Subsidiary Guarantor, shall deny or disaffirm its obligations in respect of the Notes.
Section 4.02. Acceleration of Maturity; Rescission and Annulment. The following shall replace
Section 502 of the Base Indenture in its entirety:
If an Event of Default with respect to the Notes occurs and is continuing (other than an Event
of Default specified in sub-clauses (e) or (f) above relating to the Company), then in each such
case, unless the principal of all of the Notes shall have already become due and payable, either
the Trustee or the holders of 25% in aggregate principal amount of the Notes then outstanding, by
notice in writing to the Company (and to the Trustee if given by the Holders) (an “Acceleration
Notice”), may declare all principal, determined as set forth below, including in each case accrued
interest thereon, to be due and payable immediately. If an Event of Default specified in
sub-clauses (e) or (f) above occurs relating to the Company, all principal and accrued and unpaid
interest thereon shall be immediately due and payable on all outstanding Notes without any
declaration or other act on the part of the Trustee or the Holders. The Holders of a majority in
principal amount of the Notes then outstanding by written notice to the Trustee and the Company may
waive any Default or Event of Default (other than any Default or Event of Default in payment of
principal or interest) on the Notes under this First Supplemental Indenture. Holders of a majority
in principal amount of the then outstanding Notes may rescind an acceleration and its consequence
(except an acceleration due to nonpayment of principal or interest on the Notes) if the rescission
would not conflict with any judgment or decree and if all existing Events of Default (other than
the non-payment of accelerated principal) have been cured or waived.
ARTICLE V.
COVENANTS OF THE COMPANY
COVENANTS OF THE COMPANY
Pursuant to Section 301(15) of the Base Indenture, so long as any of the Notes are
Outstanding, the Company covenants and agrees, in addition to the covenants and agreements
contained in Article Ten of the Base Indenture, as follows:
Section 5.01. Limitations on Restricted Payments. Until the Notes are rated Investment Grade
by both Rating Agencies, after which time the following covenant no longer shall be binding on the
Company or any Restricted Subsidiary:
(a) neither the Company nor any of its Restricted Subsidiaries shall, directly or indirectly,
make any Restricted Payment, if, after giving effect thereto on a pro forma basis:
(i) the Company could not Incur $1.00 of additional Indebtedness pursuant to provisions
described in paragraph (b) of Section 5.02 hereof;
(ii) a Default or an Event of Default would occur or be continuing; or
(iii) the aggregate amount of all Restricted Payments, including such proposed Restricted
Payment, made by the Company and its Restricted Subsidiaries, from and after the Issue Date
and on or prior to the date of such Restricted Payment, shall exceed the sum (the “Basket”)
of:
(A) 50% of Consolidated Net Income of the Company for the period (taken as one
accounting period), commencing with the first full fiscal quarter which includes the
Issue Date, to and including the fiscal quarter ended immediately prior to the date of
each calculation for which internal financial statements are available (or, if
Consolidated Net Income for such period is negative, then minus 100% of such deficit);
plus
(B) 100% of the amount of any Indebtedness of the Company or a Restricted Subsidiary
Incurred after the Issue Date that is converted into or exchanged for Qualified Capital
Stock of the Company after the Issue Date; plus
(C) to the extent that any Restricted Investment made after the date of this First
Supplemental Indenture is sold for cash or otherwise reduced or liquidated or repaid for
cash, in whole or in part, the lesser of (1) the cash return of capital with respect to
such Restricted Investment (less the cost of disposition, if any) and (2) the initial
amount of such Restricted Investment; plus
(D) unless accounted for pursuant to clause (B) above, 100% of the aggregate net
proceeds (after payment of reasonable out-of-pocket expenses, commissions and discounts
incurred in connection therewith) received by the Company from the sale or issuance
(other than to a Subsidiary of the Company) of its Qualified Capital Stock after the
Issue Date and on or prior to the date of such Restricted Payment; plus
(E) with respect to any Unrestricted Subsidiary that is redesignated as a Restricted
Subsidiary after the Issue Date in accordance with the definition of Unrestricted
Subsidiary (so long as the designation of such Subsidiary as an Unrestricted Subsidiary
was treated as a Restricted Payment made after the Issue Date and only to the extent not
included in the calculation of Consolidated Net Income), an amount equal to the lesser of
(x) the book value in accordance with GAAP of the Company’s or a Restricted Subsidiary’s
Investment in such Subsidiary, and (y) the Designation Amount at the time of such
Subsidiary’s designation as an Unrestricted Subsidiary; plus
(F) 100% of tax benefits, if any, for the period (taken as one accounting period),
commencing with the first full fiscal quarter which includes the Issue Date, realized by
the Company from stock option exercises and from the issuance of the Company’s Qualified
Capital Stock pursuant to equity-based employee benefit plans that are recorded as an
increase to shareholders’ equity in accordance with GAAP; plus
(G) $50,000,000.
(b) The foregoing clause (a) does not prohibit:
(i) the payment of any dividend within 60 days after the date of its declaration if such
dividend could have been made on the date of its declaration in compliance with the foregoing
provisions;
(ii) the payment of cash dividends or other distributions to any Equity Investor or joint
venture participant of a Restricted Subsidiary with respect to a class of Capital Stock of
such Restricted Subsidiary or joint venture owned by such Equity Investor or joint venture
participant so long as the Company or its Restricted Subsidiaries simultaneously receive a
dividend or distribution with respect to their Investment in such Restricted Subsidiary or
joint venture either in U.S. Legal Tender or the same form as the dividend or distribution
received by such Equity Investor or joint venture participant and in proportion to their
proportionate interest in the same class of Capital Stock of such Restricted Subsidiary (or in
the case of a joint venture that is a partnership or a limited liability company, as provided
for in the documentation governing such joint venture), as the case may be;
(iii) repurchases or redemptions of Capital Stock of the Company from any former
directors, officers and employees of the Company in the aggregate up to $3,000,000 during any
calendar year (provided, however, that any amounts not used in any calendar year may be used
in any subsequent year); or
(iv) the retirement of Capital Stock of the Company or the retirement of Indebtedness of
the Company, in exchange for or out of the proceeds of a substantially concurrent sale (other
than a sale to a Subsidiary of the Company) of, other shares of its Qualified Capital Stock
and the retirement of Capital Stock or Indebtedness of a Restricted Subsidiary in exchange for
or out of the proceeds of a substantially concurrent sale of its Qualified Capital Stock,
provided that, in each case, the amount of any such proceeds is excluded for purposes of
clause (a)(iii)(D) above.
Any Restricted Payment made in accordance with clauses (i) and (iii) of this paragraph shall
reduce the Basket. In calculating the Basket, any Restricted Payment not made in cash and any
non-cash amounts received for purposes of clause (D) shall be valued at fair market value as
determined in good faith by the Board of Directors, whose determination shall be conclusive and
whose resolution with respect thereto shall be delivered to the Trustee promptly after the adoption
thereof.
Section 5.02. Limitations on Indebtedness.
(a) Neither the Company nor any of its Restricted Subsidiaries may, directly or indirectly,
Incur any Indebtedness except (i) Non-Recourse Indebtedness Incurred in the ordinary course of
business; (ii) Indebtedness evidenced by Notes and Subsidiary Guarantees issued on the Issue Date;
(iii) Indebtedness of the Company solely to any Subsidiary Guarantor, Indebtedness of any
Subsidiary Guarantor to any other Subsidiary Guarantor or to the Company or Indebtedness of any
Restricted Subsidiary that is not a Subsidiary Guarantor to the Company or to any Restricted
Subsidiary, provided that neither the Company nor any Restricted Subsidiary shall become liable to
any Person with respect to such Indebtedness other than the Company or a Restricted Subsidiary;
(iv) Refinancing Indebtedness (including any subsequent refinancing, extension, renewal,
replacement or refunding thereof that satisfies the conditions set forth in the definition of
“Refinancing Indebtedness”) (A) of any Indebtedness permitted to be Incurred pursuant to clauses
(ii) or (iv) of this paragraph (a) or the immediately following paragraph (b) or (B) of any
Indebtedness to the extent outstanding on the Issue Date (other than under the Bank Credit
Facility, the 1993 Notes or Capitalized Lease Obligations being repaid using proceeds from the sale
of the Notes); (v) Indebtedness Incurred solely in respect of performance, completion, guaranty and
similar bonds and similar purpose undertakings and Indebtedness under any xxxxxxx money notes,
tenders, bids, leases, statutory obligations, surety and appeal bonds, progress statements,
government contracts, letters of credit, escrow agreements and other obligations of like nature and
deposits made to secure performance of any of the foregoing, in each case in the ordinary course of
business; (vi) Indebtedness incurred by the Company or any Subsidiary Guarantor under the Bank
Credit Facility in an aggregate principal amount not to exceed $100,000,000 at any time, less the
aggregate amount of all proceeds of sales or dispositions of assets applied to permanently reduce
the outstanding amount (or, in the case of a revolving credit facility the committed amount) of
such Indebtedness pursuant to Section 5.04 hereof and guaranties thereof by Subsidiary Guarantors;
(vii) (A) Indebtedness which represents the assumption by the Company or a Restricted Subsidiary of
Indebtedness of a Restricted Subsidiary permitted to be Incurred pursuant to the terms of this
First Supplemental Indenture, and (B) Indebtedness of a Subsidiary Guarantor represented by
guaranties in respect of Indebtedness of the Company or another Subsidiary Guarantor permitted to
be Incurred pursuant to this First Supplemental Indenture and (C) Indebtedness of the Company
represented by guaranties in respect of Indebtedness of a Subsidiary Guarantor permitted to be
Incurred pursuant to this First Supplemental Indenture; (viii) other Indebtedness outstanding on
the Issue Date, including the 1993 Notes; (ix) purchase money obligations and Capitalized Lease
Obligations; and (x) Indebtedness of the Company or any Subsidiary Guarantor to any Unrestricted
Subsidiary or any Restricted Subsidiary that is not a Subsidiary Guarantor in an aggregate amount
not to exceed $20,000,000 at any one time outstanding.
(b) Notwithstanding the foregoing, the Company and its Restricted Subsidiaries that are
Subsidiary Guarantors may Incur Indebtedness, in each case, if, at the time such Indebtedness is
Incurred: (i) no Default or Event of Default shall have occurred and be continuing or would occur
after giving effect to such transaction, and (ii) immediately after giving effect thereto (without
duplication) on a pro forma basis, either (A) the Consolidated Fixed Charge Coverage Ratio of the
Company on the date of such Incurrence is at least equal to 2.0 to 1 or (B) the ratio of
Indebtedness of the Company and its Restricted Subsidiaries on a consolidated basis on the date of
such Incurrence (excluding for purposes of such calculation other Indebtedness specifically
permitted to be Incurred pursuant to clause (i) or clause (v) of the preceding paragraph), to
Consolidated Net Worth of the Company is less than 3.25 to 1.
Neither the Company nor any Restricted Subsidiary shall incur any Indebtedness that is
contractually subordinated in right of payment to any other Indebtedness of the Company or such
Restricted Subsidiary unless such Indebtedness is also contractually subordinated in right of
payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of
the Company or a Restricted Subsidiary shall be deemed to be contractually subordinated in right of
payment to any other Indebtedness of the Company solely by virtue of being unsecured.
Furthermore, for purposes of determining compliance with this covenant in the event that an
item of proposed Indebtedness meets the criteria of more than one of the categories described in
clauses (i) through (x) of paragraph (a) above as of the date of incurrence thereof, or is entitled
to be Incurred pursuant to paragraph (b) of this covenant as of the date of incurrence thereof, the
Company shall, in its sole discretion, classify such item of Indebtedness on the date of its
Incurrence in any manner that complies with this covenant.
Section 5.03. Limitations on Transactions with Affiliates. Until the Notes are rated
Investment Grade by both Rating Agencies, after which time the following covenant no longer shall
be binding on the Company or any Restricted Subsidiary:
(a) Neither the Company nor any of its Restricted Subsidiaries may, directly or indirectly,
make any loan, advance, guaranty or capital contribution to or for the benefit of, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or for the benefit of, or
purchase or lease any property or assets from, or enter into or amend any contract, agreement or
understanding with, or for the benefit of any Affiliate (each an “Affiliate Transaction”), except
for (i) Restricted Payments otherwise permitted under this First Supplemental Indenture, and (ii)
transactions, the terms of which are at least as favorable as the terms which could be obtained by
the Company or such Restricted Subsidiary, as the case may be, in a comparable transaction made on
an arm’s-length basis with Persons who are not Affiliates.
(b) In addition, (i) with respect to any Affiliate Transaction or series of related Affiliate
Transactions with an aggregate value in excess of $5,000,000, such transaction must first be
approved by a majority of the Disinterested Directors and (ii) with respect to any Affiliate
Transaction or related series of Affiliate Transactions with an aggregate value in excess of
$25,000,000, the Company must first deliver to the Trustee a favorable written opinion from an
investment banking firm of national reputation as to the fairness from a financial point of view of
such transaction to the Company or such Restricted Subsidiary, as the case may be, or with respect
to transactions involving real property, a determination of value by a licensed real estate
appraisal firm that is of regional standing in the region in which the subject property is located
and which has professionals that are MAI certified.
(c) Notwithstanding the foregoing, Affiliate Transactions shall not include (i) transactions
exclusively between or among the Company and one or more Restricted Subsidiaries or between or
among one or more Restricted Subsidiaries, (ii) any contract, agreement or understanding with, or
for the benefit of, or planned for the benefit of, employees, officers or directors of the Company
or any Restricted Subsidiary (in their capacity as such) that has been approved by the Board of
Directors (or a committee thereof) or is in the ordinary course of business and consistent with
past practice, (iii) issuances of Qualified Capital Stock of the Company to members of the Board of
Directors, officers and employees of the Company or its Subsidiaries pursuant to plans approved by
the stockholders or the Board of Directors (or a committee thereof) or is in the ordinary course of
business and consistent with past practice of the Company, (iv) home sales and readily marketable
mortgage loans to employees, officers and directors of the Company and Subsidiaries in the ordinary
course of business, (v) payment of regular fees and reimbursement of expenses to members of the
Board of Directors who are not employees of the Company and reimbursement of expenses and payment
of wages and other compensation to officers and employees of the Company or any of its Subsidiaries
or loans or advances in respect thereof, (vi) contractual arrangements in effect on the Issue Date
and renewals and extensions thereof not involving modifications materially adverse to the Company
or any Restricted Subsidiary, (vii) Restricted Payments or Permitted Investments otherwise made in
compliance with this First Supplemental Indenture or (viii) the advancement of general and
administrative expenses of the Company and its Subsidiaries that are reimbursed in the ordinary
course of business.
Section 5.04. Limitations on Asset Sales. Subject to Article VI hereof and until the Notes are
rated Investment Grade by both Rating Agencies, after which time the following covenant no longer
shall be binding on the Company, neither the Company nor any Restricted Subsidiary may, directly or
indirectly, consummate an Asset Sale, unless the Company (or such Restricted Subsidiary, as the
case may be) receives consideration at the time of such Asset Sale at least equal to the fair
market value (reasonably evidenced by a good faith resolution of the Board of Directors or the
board of directors or comparable governing body of such Restricted Subsidiary, whose resolution
shall be conclusive) of the assets sold or otherwise disposed of, provided that the aggregate fair
market value of the consideration received from any Asset Sale that is not in the form of cash or
Cash Equivalents shall not, when aggregated with the fair market value of all other noncash
consideration received by the Company and its Restricted Subsidiaries from all previous Asset Sales
since the Issue Date that has not been converted into cash or Cash Equivalents, exceed 10% of the
Consolidated Net Assets of the Company at the time of the Asset Sale under consideration; and,
provided, further, however, that the amount of (x) any liabilities of the Company or any Restricted
Subsidiary (other than liabilities that are Incurred in connection with or in contemplation of such
Asset Sale) that are assumed by the transferee of any such assets and (y) any notes or other
obligations received by the Company or any such Restricted Subsidiary from such transferee that are
promptly converted by the Company or such Restricted Subsidiary into cash, shall be deemed to be
cash (to the extent of the cash received) for purposes of this provision.
Within 180 days after the receipt of any Net Cash Proceeds from an Asset Sale, the Company may
apply such Net Cash Proceeds in its sole discretion (a) to permanently repay Indebtedness under the
Bank Credit Facility (and to permanently reduce the commitment thereunder for purposes of clause
(a)(vi) of Section 5.02 hereof) or (b) to acquire all or substantially all of the assets of, or
Capital Stock representing a majority of the voting power in the election of directors or other
governing body of, another Permitted Business, (c) to make a capital expenditure or (d) to acquire
other assets not classified as current under GAAP that are used or useful in a Permitted Business.
Pending the final application of any such Net Cash Proceeds, the Company may temporarily reduce
revolving credit borrowings or otherwise invest such Net Cash Proceeds in any manner that is not
prohibited by this First Supplemental Indenture. Any Net Cash Proceeds from Asset Sales that are
not applied or invested as provided in the first sentence of this paragraph shall be deemed to
constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $10,000,000, the
Company shall be required to make an offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in
this First Supplemental Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets (an “Asset Sale Offer”) to purchase the maximum principal amount of
Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds, at
an offer price for the Notes in cash in an amount equal to 100% of the principal amount thereof
plus accrued and unpaid interest thereon, if any, to the date of purchase, in accordance with the
procedures set forth in this First Supplemental Indenture and such other pari passu Indebtedness.
To the extent that any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use such Excess Proceeds for any purpose not otherwise prohibited by this First
Supplemental Indenture. If the aggregate principal amount of Notes and such other pari passu
Indebtedness tendered into such Asset Sale Offer surrendered by Holders thereof exceeds the amount
of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be
purchased on a pro rata basis. Upon completion of such offer to purchase (and without regard to
whether all Excess Proceeds are used therefor), the amount of Excess Proceeds shall be reset at
zero.
Any Asset Sale Offer shall be conducted by the Company in compliance with applicable law,
including, without limitation, Section 14(e) of the Exchange Act and Rule 14e-1 thereunder, if
applicable.
Section 5.05. Limitations on Restrictions Affecting Restricted Subsidiaries. The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (a)(i) pay dividends or make any other distributions to the
Company or any of its Restricted Subsidiaries on its Capital Stock or with respect to any other
interest or participation in, or measured by, its profits, or (ii) pay any Indebtedness owed to the
Company or any of its Restricted Subsidiaries, (b) make loans or advances to the Company or any of
is Restricted Subsidiaries, (c) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries, or (d) guarantee the Notes or any
Indebtedness issued in exchange for, or the proceeds of which are used to extend, refinance, renew,
replace, or refund the Notes, except for such encumbrances or restrictions described in (a) through
(d) above existing under or by reasons of (i) Existing Indebtedness as in effect on the date of
this First Supplemental Indenture, (ii) applicable law or regulation, (iii) any instrument
governing Acquired Indebtedness as in effect at the time of acquisition, which encumbrance or
restriction is not applicable to any person, or the properties or assets of any person, other than
the person, or the properties or assets of the person, so acquired, provided that the Consolidated
Net Income of such person shall not be taken into account in determining whether such acquisition
was permitted by the terms of this First Supplemental Indenture, (iv) by reason of customary
non-assignment provisions or prohibitions on subletting in leases or other contracts entered into
in the ordinary course of business, (v) Refinancing Indebtedness permitted under clause (iv) of
paragraph (a) of Section 5.02 hereof, provided that the restrictions contained in the agreements
governing such Refinancing Indebtedness are no more restrictive than those contained in the
agreements governing the Indebtedness being refinanced, or (vi) with respect to clause (c) above,
(A) purchase money obligations, Non-Recourse Indebtedness and Capital Lease Obligations for
property acquired or leased in the ordinary course of business, (B) any agreement restricting the
sale or other disposition of properties securing Indebtedness permitted by this First Supplemental
Indenture if such agreement does not expressly restrict the ability of a Restricted Subsidiary to
pay dividends or make loans or advances to the Company, (C) restrictions or encumbrances contained
in any security agreements permitted by this First Supplemental Indenture securing Indebtedness
permitted by this First Supplemental Indenture to the extent that such restrictions or encumbrances
restrict the transfer of assets (or proceeds thereof) subject to such security agreement, or (D)
any restrictions or encumbrances with respect to a Restricted Subsidiary imposed pursuant to an
agreement which has been entered into for the sale or disposition of the Capital Stock or assets of
such Restricted Subsidiary or such an agreement which has been entered into for the sale or
disposition of assets of the Company to the extent otherwise permitted by this First Supplemental
Indenture, including in connection with any Asset Sale, as applicable only to such assets or
Capital Stock to be sold, or (vii) customary agreements entered into in the ordinary course of
business restricting the ability of a joint venture to make distributions or payments of cash or
property to participants in such joint venture.
Section 5.06. Limitations on Liens. The Company may not and may not permit any Restricted
Subsidiary to Incur, or suffer to exist any Lien (other than Permitted Liens) upon any of its
property or assets, whether now owned or hereafter acquired.
Section 5.07. Payments for Consent. Neither the Company nor any of its Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee
or otherwise, to any Holder of
the Notes for or as an inducement to any consent, waiver or amendment of any terms or
provisions of this First Supplemental Indenture or the Notes unless such consideration is offered
and paid to all Holders of the Notes that so consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or agreement.
Section 5.08. Guarantees of Certain Indebtedness. The Company shall not permit any of its
Restricted Subsidiaries other than the Subsidiary Guarantors, directly or indirectly, to guarantee the payment of any Indebtedness under the Bank Credit Facility, any other
credit facility, or any other Indebtedness of the Company or any other Restricted Subsidiary,
unless such Restricted Subsidiary, the Company and the Trustee execute and deliver a supplemental
indenture evidencing a Subsidiary Guarantee of the Notes. Neither the Company nor any Subsidiary
Guarantor shall be required to make a notation on the Notes to reflect any such subsequent
Subsidiary Guarantee. Nothing in this covenant shall be construed to permit any Restricted
Subsidiary of the Company to incur Indebtedness otherwise prohibited by Section 5.02 hereof.
Section 5.09. Maintenance of Consolidated Net Worth. The Company is required to furnish to the
Trustee an Officers’ Certificate within 55 days after the end of any fiscal quarter (100 days after
the end of any fiscal year) notifying the Trustee that the Company’s Consolidated Net Worth has
declined below $80.0 million (the “Minimum Required Net Worth”) at the end of any fiscal quarter in
which the Company’s Consolidated Net Worth has so declined. If, on the last day of each of any two
consecutive fiscal quarters (the last day of the second fiscal quarter being referred to herein as
a “Deficiency Date”), the Company’s Consolidated Net Worth is less than the Minimum Required Net
Worth, then the Company is required, no later than 65 days after each such Deficiency Date (110
days if such Deficiency Date is the last day of the Company’s fiscal year), to make an offer to all
Holders of Notes to purchase (a “Purchase Offer”) 10% of the aggregate principal amount of the
Notes theretofore issued under this First Supplemental Indenture (the “Offer Amount”) at a purchase
price equal to 100% of the principal amount of the Notes, plus accrued interest to the date of
purchase. The Purchase Offer is required to remain open for a period of 20 Business Days following
its commencement, except to the extent otherwise permitted by applicable law (as extended, the
“Offer Period”) and the Company is required to purchase the Offer Amount of the Notes on a
designated date no later than one Business Day after the termination of the Offer Period, or if
less than the Offer Amount of Notes shall have been tendered, all Notes then tendered; provided,
however, that the Company shall not be obligated to purchase any of such Notes unless Holders of
Notes of at least 10% of the Offer Amount shall have tendered and not subsequently withdrawn their
Notes for repurchase. If the aggregate principal amount of Notes tendered exceeds the Offer Amount,
the Company is required to purchase the Notes tendered to it pro rata among the Notes tendered
(with such adjustments as may be appropriate so that only Notes in denominations of $1,000 and
integral multiples thereof shall be purchased). The Company shall comply with all applicable
federal and state securities laws in connection with each Purchase Offer. In no event shall the
failure of the Company’s Consolidated Net Worth to equal or exceed the Minimum Required Net Worth
at the end of the fiscal quarter be counted toward the making of more than one Purchase Offer. The
Company may reduce the principal amount of Notes to be purchased pursuant to the Purchase Offer by
subtracting 100% of the principal amount (excluding premium) of Notes acquired by the Company
subsequent to the Deficiency Date through purchase (otherwise than pursuant to this Section 5.09 or
Section 5.04 or Section 5.10 hereof), optional redemption or exchange and surrender for
cancellation.
Section 5.10. Repurchase of Notes Upon Change of Control. In the event that a Change of
Control has occurred, each Holder shall have the right, at such Holder’s option, subject to the
terms and conditions of this First Supplemental Indenture, to require the Company to repurchase all
or any part of such Holder’s Notes (provided that the principal amount of such Notes must be $1,000 or an integral multiple thereof) on the date that is no later than 60 Business
Days (unless a later date is required by applicable law) after the occurrence of such Change of
Control (the “Change of Control Payment Date”), at a cash price equal to 101% of the principal
amount thereof, plus accrued and unpaid interest, if any (the “Change of Control Purchase Price”),
to the Change of Control Payment Date.
The Company shall notify the Trustee within ten Business Days after the Company becomes aware
of the occurrence of a Change of Control. Within 20 Business Days after the occurrence of a Change
of Control, the Company shall make an unconditional offer (a “Change of Control Offer”) to all
Holders of Notes to purchase all of
the Notes at the Change of Control Purchase Price by sending written notice of a Change of
Control Offer, by first class mail, to each Holder at its registered address, with a copy to the
Trustee.
On or before the Change of Control Payment Date, the Company shall (i) accept for payment
Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent U.S. Legal Tender sufficient to pay the Change of Control Purchase Price
(together with accrued and unpaid interest) of all Notes so tendered and (iii) deliver to the
Trustee Notes so accepted together with an Officers’ Certificate listing the Notes or portions
thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of
Notes so accepted payment in an amount equal to the Change of Control Purchase Price (together with
accrued and unpaid interest), and the Trustee shall promptly authenticate and mail or deliver to
such Holders a new Note equal in principal amount to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.
The Change of Control purchase feature of the Notes may make more difficult or discourage a
takeover of the Company, and, thus, the removal of incumbent management. To the extent applicable
and if required by law, the Company shall comply with Section 14 of the Exchange Act and the
provisions of Regulation 14E and any other tender offer rules under the Exchange Act and other
securities laws, rules and regulations which may then be applicable to any offer by the Company to
purchase the Notes at the option of Holders upon a Change of Control.
Section 5.11. Use of Certain Proceeds. The Company shall commence a tender offer to repurchase
the remaining 1993 Notes as promptly as practicable following the Issue Date. The Company shall
redeem all remaining untendered outstanding 1993 Notes in December 1998 at a purchase price of
105.5% of the principal amount thereof in accordance with the terms of the indenture governing the
1993 Notes, and shall maintain, at all times prior to completion of such redemption, Investments in
Cash Equivalents at least equal to the lesser of (i) $80.0 million, and (ii) the outstanding
principal amount of 1993 Notes not theretofore redeemed or repurchased. In addition, the Company
shall, as promptly as practicable, deposit in escrow with an escrow agent that is not an Affiliate
of the Company, $12,000,000 pending the Company’s use of such funds to exercise its purchase option
under that certain Lease Agreement dated May 15, 1989 by and among Corporate Property Associates 9,
L.P., as landlord and NVHomes L.P., Xxxx Operations G.P. and Xxxx Homes, Inc., as amended, or as
otherwise permitted in accordance with the terms of the escrow agreement. The Company shall use its
commercially reasonable efforts to effect such purchase option in accordance with its terms.
ARTICLE VI.
MERGER, CONSOLIDATION OR SALE OF ASSETS
MERGER, CONSOLIDATION OR SALE OF ASSETS
Pursuant to Section 301(15) of the Base Indenture, so long as any of the Notes are
outstanding, the following provision shall replace Section 801 of the Base Indenture for purposes
of the Notes:
(a) The Company shall not consolidate with or merge with or into, any other Person, or
transfer all or substantially all of its assets to, any entity unless permitted by law and unless
(i) the resulting, surviving or transferee entity, which shall be a corporation, partnership,
limited liability company or other entity organized and existing under the laws of the United
States or a State thereof or the District of Columbia, assumes by supplemental indenture, in a form
reasonably satisfactory to the Trustee, all of the obligations of the Company under the Notes and
this First Supplemental Indenture, (ii) immediately after giving effect to, and as a result of,
such transaction, no Default or Event of Default shall have occurred and be continuing, (iii)
immediately after giving effect to such transaction on a pro forma basis, the net worth of the
surviving or transferee entity on a stand-alone basis is at least equal to the Consolidated Net
Worth of the Company immediately prior to such transaction; and (iv) the Company or the surviving
or transferee entity thereof would immediately thereafter be permitted to Incur at least $1.00 of
additional Indebtedness pursuant to the provisions described in paragraph (b) under Section 5.02
hereof. The provisions of clause (iii) or clause (iv) above shall not apply to a transaction or
series of related transactions in which the sole participants are Restricted Subsidiaries of the
Company or to a transaction between the Company and one or more of its Restricted Subsidiaries,
subject to any limitations on mergers involving Subsidiary Guarantors.
(b) For purposes of clause (a), the sale, lease, conveyance, assignment, transfer, or other
disposition of all or substantially all of the properties and assets of one or more Subsidiaries of
the Company, which properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the Company, on a
consolidated basis, shall be deemed to be the transfer of all or substantially all of
the properties and assets of the Company. Thereafter such successor corporation or
corporations shall succeed to and be substituted for the Company with the same effect as if it had
been named herein as the “Company” and all such obligations of the predecessor corporation shall
terminate.
ARTICLE VII.
REDEMPTION
REDEMPTION
The Notes shall be redeemable at the option of the Company, in whole or in part, at any time
on or after June 1, 2003, at the redemption prices (expressed as a percentage of principal amount)
set forth below, plus accrued and unpaid interest thereon, if any, to the redemption date, if
redeemed during the 12-month period beginning on June 1 of the years indicated below:
| Redemption Year | Price | |||
2003
|
104.000 | |||
2004
|
102.000 | |||
2005
|
100.000 | |||
In addition, prior to June 1, 2001, the Company may redeem up to 35% of the aggregate
principal amount of the Notes issued under this First Supplemental Indenture at a redemption price
equal to 108% of the principal amount of the Notes so redeemed, plus accrued and unpaid interest
thereon, if any, to the redemption date with the net cash proceeds of one or more Public Equity
Offerings; provided, however, that (x) at least $113,750,000 aggregate principal amount of all
Notes issued under the Indenture remains outstanding immediately after giving effect to any such
redemption (excluding any Notes held by the Company) and (y) notice of any such redemption is given
within 60 days of the applicable Public Equity Offering.
Selection of the Notes or portions thereof for redemption pursuant to the foregoing shall be
made by the Trustee pro rata or by lot. Notice of redemption shall be mailed via courier
guaranteeing overnight delivery at least 30 days but not more than 60 days before the redemption
date to each Holder whose Notes are to be redeemed at the registered address of such Holder. On and
after the redemption date, interest shall cease to accrue on the Notes or portions thereof called
for redemption.
ARTICLE VIII.
GUARANTEES
GUARANTEES
Pursuant to Section 301(23) of the Base Indenture, and until the 91st day after the Notes have
been paid in full, the following provisions shall be a part of this First Supplemental Indenture.
Section 8.01. Unconditional Subsidiary Guarantee. Each Subsidiary Guarantor hereby
unconditionally, jointly and severally, guarantees (such guarantee to be referred to herein as the
“Subsidiary Guarantee”) to each Holder of a Note authenticated and delivered by the Trustee and to
the Trustee and its successors and assigns, irrespective of the validity and enforceability of this
First Supplemental Indenture, the Notes or the obligations of the Company hereunder or thereunder,
that: (i) the principal of, interest and premium, if any, on the Notes will be promptly paid in
full when due, subject to any applicable grace period, whether at stated maturity, by acceleration
or otherwise and interest on the overdue principal of, and interest on any interest, to the extent
lawful, and premium, if any, on the Notes and all other obligations of the Company to the Holders
or the Trustee hereunder or thereunder will be promptly paid in full, all in accordance with the
terms hereof and thereof; and (ii) in case of any extension of time of payment or renewal of any
Notes or of any such other obligations, the same will be promptly paid in full when due in
accordance with the terms of the extension or renewal, subject to any applicable grace period,
whether at stated maturity, by acceleration or otherwise, subject, however, in the case of clauses
(i) and (ii) above, to the limitations set forth in Section 8.04. Each Subsidiary Guarantor hereby
agrees that its obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this First Supplemental
Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of
the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against
the Company, any action to enforce the same or any other circumstances which might otherwise
constitute a legal or equitable discharge or defense of a guarantor (other than indefeasable
payment in full of the Notes). Each Subsidiary Guarantor hereby waives diligence, presentment,
demand for payment, filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest, notice and all
demands whatsoever and covenants that this Subsidiary Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes, this First Supplemental Indenture
and in the Subsidiary Guarantee. If any Holder or the Trustee is required by any court or otherwise
to return to the Company, any Subsidiary Guarantor, or any Custodian, trustee, liquidator or other
similar official acting in relation to the Company or any Subsidiary Guarantor, any amount paid by
the Company or any Subsidiary Guarantor to the Trustee or such Holder, this Subsidiary Guarantee,
to the extent theretofore discharged, shall be reinstated in full force and effect as to such
amount only. Each Subsidiary Guarantor further agrees that, as between each Subsidiary Guarantor,
on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in this First Supplemental Indenture
for the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y)
in the event of any acceleration of such obligations as provided in this First Supplemental
Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable
by each Subsidiary Guarantor for the purpose of the Subsidiary Guarantee.
Section 8.02. Release of a Subsidiary Guarantor. Upon (i) a sale or other disposition of all
or substantially all of the assets of any Subsidiary Guarantor, by way of merger, consolidation or
otherwise, or (ii) a sale, distribution or other disposition of all of the capital stock of any
Subsidiary Guarantor, including, without limitation, a distribution of all of the capital stock of
any Subsidiary Guarantor to stockholders of the Company in a transaction that complies with Section
5.01 hereof, such Subsidiary Guarantor (in the event of a sale or other disposition, by way of such
a merger, consolidation, distribution or otherwise, of all of the capital stock of such Subsidiary
Guarantor) or the Person acquiring the property (in the event of a sale or disposition of all or
substantially all of the assets of such Subsidiary Guarantor) will be released and relieved of any
obligations under its Subsidiary Guarantee; provided that the Net Cash Proceeds of such sale or
other disposition are applied in accordance with the provisions of Section 5.04 hereof.
Section 8.03. Limitation of Subsidiary Guarantor’s Liability. Each Subsidiary Guarantor and by
its acceptance hereof each Holder hereby confirms that it is the intention of all such parties that
the guarantee by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law. To
effectuate the foregoing intention, the Holders and such Subsidiary Guarantor hereby irrevocably
agree that the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee shall be
limited to the maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to Section 8.05, result
in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting
such fraudulent transfer or conveyance.
Section 8.04. Subsidiary Guarantors May Consolidate, Etc. on Certain Terms. No Subsidiary
Guarantor may consolidate with or merge with or into (whether or not such Subsidiary Guarantor is
the surviving Person) another corporation, Person or entity (other than the Company or another
Subsidiary Guarantor), unless (i) subject to the provisions of Section 8.02 hereof, the Person
formed by or surviving any such consolidation or merger (if other than the Subsidiary Guarantor)
assumes all of the obligations of such Subsidiary Guarantor under the Notes (including the
Subsidiary Guarantee) and this First Supplemental Indenture pursuant to a supplemental indenture,
in form and substance reasonably satisfactory to the Trustee, together with an Officers’
Certificate of the Company and an Opinion of Counsel stating that the transaction and such
supplemental indenture comply with this First Supplemental Indenture (provided that this
requirement will not apply to a substantially concurrent merger involving the Company, Homes and
NVR Financial Services, Inc.), and (ii) immediately after giving effect to such transaction, no
Default or Event of Default exists.
Section 8.05. Contribution. In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the event any payment or
distribution is
made by any Subsidiary Guarantor (a “Funding Subsidiary Guarantor”) under this Subsidiary
Guarantee, such Funding Subsidiary Guarantor shall be entitled to a contribution from all other
Subsidiary Guarantors in a pro rata amount based on the Adjusted Net Assets of each Subsidiary
Guarantor (including the Funding Subsidiary Guarantor) for all payments, damages and expenses
incurred by that Funding Subsidiary Guarantor in discharging the Company’s obligations with respect
to the Notes or any other Subsidiary Guarantor’s obligations with respect to this Subsidiary
Guarantee.
Section 8.06. Waiver of Subrogation. Until the Notes are paid in full, each Subsidiary
Guarantor hereby irrevocably waives any claim or other rights which it may now or hereafter acquire
against the Company that arise from the existence, payment, performance or enforcement of such
Subsidiary Guarantor’s obligations under this Subsidiary Guarantee and this First Supplemental
Indenture, including, without limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any Holder of Notes against
the Company, whether or not such claim, remedy or right arises in equity, or under contract,
statute or common law, including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or by setoff or in any other manner,
payment or security on account of such claim or other rights. If any amount shall be paid to any
Subsidiary Guarantor in violation of the preceding sentence and the Notes shall not have been paid
in full, such amount shall have been deemed to have been paid to such Subsidiary Guarantor for the
benefit of, and held in trust for the benefit of, the Holders of the Notes, and shall forthwith be
paid to the Trustee for the benefit of such Holders to be credited and applied upon the Notes,
whether matured or unmatured, in accordance with the terms of this First Supplemental Indenture.
Each Subsidiary Guarantor acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this First Supplemental Indenture and that the waiver set
forth in this Section 8.06 is knowingly made in contemplation of such benefits.
Section 8.07. Execution of Subsidiary Guarantee. To evidence their guarantee to the Holders
specified in Section 8.01, the Subsidiary Guarantors hereby agree to execute the Subsidiary
Guarantee in substantially the form of Exhibit B recited to be endorsed on each Note ordered to be
authenticated and delivered by the Trustee. Each Subsidiary Guarantor hereby agrees that its
guarantee set forth in Section 8.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee. Each such Subsidiary
Guarantee shall be signed on behalf of each Subsidiary Guarantor by one Officer (who shall have
been duly authorized by all requisite corporate actions) prior to the authentication of the Note on
which it is endorsed, and the delivery of such Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of such Subsidiary Guarantee on behalf of such
Subsidiary Guarantor. Such signatures upon the Subsidiary Guarantee may be by manual or facsimile
signature of such duly authorized Officer and may be imprinted or otherwise reproduced on the
Subsidiary Guarantee, and in case any such Officer who shall have signed the Subsidiary Guarantee
shall cease to be such Officer before the Note on which such Subsidiary Guarantee is endorsed shall
have been authenticated and delivered by the Trustee or disposed of by the Company, such Note
nevertheless may be authenticated and delivered or disposed of as though the person who signed the
Subsidiary Guarantee had not ceased to be such Officer of the Subsidiary Guarantor.
Section 8.08. Obligations of Each Subsidiary Guarantor Unconditional. Nothing contained in
this Article VIII or elsewhere in this First Supplemental Indenture or in the Notes or the
Subsidiary Guarantees is intended to or shall impair, as among any Subsidiary Guarantor, its
creditors, and the Holders of the Notes, the obligation of such Subsidiary Guarantor, which is
absolute and unconditional, to pay to the Holders of the Notes the principal of and any interest on
the Notes as and when the same shall become due and payable in accordance with the terms of the
Subsidiary Guarantees, or is intended to or shall affect the relative rights of the Holders of the
Notes and creditors of any Subsidiary Guarantor, nor shall anything herein or therein prevent the
Holder of any Note or the Trustee on its behalf from exercising all remedies otherwise permitted by
applicable law upon default under this First Supplemental Indenture, subject to the rights, if any,
in respect of cash, property or securities of any Subsidiary Guarantor received upon the exercise
of such remedy.
Section 8.09. Notice to Trustee. The Company or any Subsidiary Guarantor shall give prompt
written notice to the Trustee of any fact known to the Company or any such Subsidiary Guarantor
which would prohibit the making of any payment to or by the Trustee in respect of the Subsidiary
Guarantees pursuant to the provisions of this Article VIII. Regardless of anything to the contrary
contained in this Article VIII or elsewhere in this First Supplemental Indenture, the Trustee shall
not be charged with knowledge of the existence of any Default or Event of Default with respect to
any facts which would prohibit the making of any payment to or by the Trustee unless and
until a Responsible Officer of the Trustee shall have received notice in writing from the
Company or a Subsidiary Guarantor, and, prior to receipt of any such written notice, the Trustee
shall be entitled to assume (in the absence of actual knowledge of a Responsible Officer to the
contrary) that no such facts exist.
Section 8.10. Reliance on Judicial Order or Certificate of Liquidating Agent. Upon any payment
or distribution of assets of any Subsidiary Guarantor referred to in this Article VIII, the
Trustee, subject to the provisions of this First Supplemental Indenture, and the Holders shall be
entitled to rely upon any order or decree made by any court of competent jurisdiction in which
bankruptcy, dissolution, winding-up, liquidation or reorganization proceedings are pending, or upon
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, delivered to the Trustee or the Holders, for the purpose of
ascertaining the persons entitled to participate in such distribution, the amount thereof or
payable thereon, the amount or amounts paid or distribution thereon and all other facts pertinent
thereto or to this Article VIII.
ARTICLE IX
OFFER TO REPURCHASE PURSUANT TO SECTION 5.04 OR 5.09 HEREOF
OFFER TO REPURCHASE PURSUANT TO SECTION 5.04 OR 5.09 HEREOF
In the event that, pursuant to Section 5.04 or Section 5.09 hereof, the Company shall be
required to commence an Asset Sale Offer or a Purchase Offer (a “Repurchase Offer”), it shall
follow the procedures specified below.
The Repurchase Offer shall remain open for a period of 20 Business Days following its
commencement and no longer, except to the extent that a longer period is required by applicable law
(as extended, the “Offer Period”). No later than one Business Day after the termination of the
Offer Period (the “Purchase Date”), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 5.04 or Section 5.09 hereof (the “Offer Amount”) or,
subject to the terms of Section 5.09 (if such repurchase is pursuant to Section 5.09 hereof), if
less than the Offer Amount has been tendered, all Notes tendered in response to the Repurchase
Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are
made.
If the Purchase Date is on or after an interest payment record date and on or before the
related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose
name a Note is registered at the close of business on such record date, and no additional interest
shall be payable to Holders who tender Notes pursuant to the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Company shall send, by first class mail, a
notice to the Trustee and each of the Holders. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Notes pursuant to the Repurchase Offer. The
Repurchase Offer shall be made to all Holders. The notice, which shall govern the terms of the
Repurchase Offer, shall state:
(a) that the Repurchase Offer is being made pursuant to this Article IX and, as applicable,
Section 5.04 or Section 5.09 hereof and the length of time the Repurchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date and in the case of a Repurchase
Offer being made pursuant to Section 5.09 hereof that the Company shall not be obligated to
purchase any of such Notes unless Holders of Notes of at least 10% of the Offer Amount shall have
tendered and not subsequently withdrawn their Notes for repurchase;
(c) that any Note not tendered or accepted for payment shall continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any Note accepted for payment
pursuant to the Repurchase Offer shall cease to accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may only
elect to have all of such Note purchased and may not elect to have only a portion of such Note
purchased;
(f) that Holders electing to have a Note purchased pursuant to any Repurchase Offer shall be
required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the
reverse of the Note completed, or transfer by book-entry transfer, to the Company, a depositary, if
appointed by the Company, or a Paying Agent at the address specified in the notice at least three
days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the Company, the depositary
or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer
Period, a telegram, facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer
Amount, the Company shall select the Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only Notes in denominations of
$1,000, or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment,
on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered
pursuant to the Repurchase Offer or, subject to the terms of Section 5.09 hereof in the case of a
Repurchase Offer made pursuant thereto, if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers’ Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the terms of this
Article IX. The Company, the Depository Trust Company or the Paying Agent, as the case may be,
shall promptly (but in any case not later than one Business Day after the Purchase Date) mail or
deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by
such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new
Note, and the Trustee, upon written request from the Company shall authenticate and mail or deliver
such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce the results of the Repurchase Offer on the
Repurchase Date.
Other than as specifically provided in this Article IX, any purchase pursuant to this Article IX
shall be made pursuant to the provisions of Article Eleven of the Base Indenture.
ARTICLE X
MISCELLANEOUS
MISCELLANEOUS
Section. 10.01. Discharge; Defeasance. Articles 4 and 13 of the Base Indenture relating to
Satisfaction and Discharge and to Defeasance and Covenant Defeasance, respectively, shall be
applicable to the Notes issued under this First Supplemental Indenture.
Section 10.02. Application of First Supplemental Indenture. Each and every term and condition
contained in this First Supplemental Indenture that modifies, amends or supplements the terms and
conditions of the Base Indenture shall apply only to the Notes created hereby and not to any future
series of Securities established under the Base Indenture.
Section 10.11. Benefits of First Supplemental Indenture. Nothing contained in this First
Supplemental Indenture shall or shall be construed to confer upon any person other than a Holder of
the Notes, the Company and the Trustee any right or interest to avail itself or himself, as the
case may be, of any benefit under any provision of this First Supplemental Indenture.
Section 10.04. Defined Terms. All capitalized terms which are used herein and not otherwise
defined herein are defined in the Base Indenture and are used herein with the same meanings as in
the Base Indenture.
Section 10.05. Effective Date. This First Supplemental Indenture shall be effective as of the
date first above written and upon the execution and delivery hereof by each of the parties hereto.
Section 10.06. Governing Law. This First Supplemental Indenture shall be governed by, and
construed in accordance with, the internal laws of the State of New York.
Section 10.07. Counterparts. This First Supplemental Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Section 10.08. Satisfaction and Discharge. This First Supplemental Indenture shall cease to be
of further force and effect upon compliance with Section 401 of the Indenture with respect to the
Notes created hereby.
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be
duly executed by their respective officers hereunto duly authorized, all as of the day and year
first above written.
| NVR, INC. |
||||
| Dated: April 14, 1998 | By: | /s/ Xxxx X. Xxxxxxx | ||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Senior Vice President Finance and Chief Financial Officer |
|||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Vice President and Controller | |||
Attest: /s/ [illegible]
| NVR HOMES, INC. |
||||
| Dated: April 14, 1998 | By: | /s/ Xxxx X. Xxxxxxx | ||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Senior Vice President | |||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Vice President | |||
Attest: /s/ [illegible]
| THE BANK OF NEW YORK as Trustee |
||||
| Dated: April 14, 1998 | By: | /s/ XxxxXxxx Xxxxxxx | ||
| Name: | XxxxXxxx Xxxxxxx | |||
| Title: | Assistant Vice President | |||
EXHIBIT A
FORM OF NOTE
FORM OF NOTE
NVR, INC.
8% Senior Notes due 2005
| Principal Amount | ||
| CUSIP No. 00000XXX0 | $145,000,000 |
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO CEDE &
CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL THIS CERTIFICATE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE THEREOF OR BY A
NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF
DTC OR A NOMINEE OF SUCH SUCCESSOR.
NVR, Inc., a Virginia corporation (the “Issuer,” which term includes any successor under the
Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of One Hundred Forty Five Million Dollars on June 1, 2005
(the “Maturity Date”), and to pay interest thereof from April 14, 1998 (or from the most recent
Interest Payment Date to which interest has been paid or duly provided for), semiannually in
arrears on June 1 and December 1 of each year (each, an “Interest Payment Date”), commencing on
June 1, 1998, and on the Maturity Date, at a rate of 8% per annum, until payment of said principal
sum has been made or duly provided for.
The interest so payable and punctually paid or duly provided for on an Interest Payment Date
and on the Maturity Date will be paid to the Holder in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the “Regular Record Date” for such
payment, which will be the May 15 and November 15 (regardless of whether such day is a Business Day
(as defined below)) next preceding such payment date or the Maturity Date, as the case may be. Any
interest not so punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date, and shall be paid to the Holder in whose name this Note (or one
or more predecessor Notes) is registered at the close of business on a subsequent record date for
the payment of such defaulted interest (which shall not be less than five Business Days prior to
the date of the payment of such defaulted interest) established by notice given by mail or by on
behalf of the Issuer to the Holders of the Notes not less than 15 days preceding such subsequent
record date. Interest on this Note will be computed on the basis of a 360-day year of twelve 30-day
months.
The principal of this Note payable on the Maturity Date will be paid against presentation and
surrender of this Note at the office or agency of the Issuer maintained for that purpose in New
York, New York. The Issuer hereby initially designates the Corporate Trust Office of the Trustee in
New York, New York as the office to be maintained by it where Notes may be presented for payment,
registration of transfer, or exchange and where notices or demands to or upon the Issuer in respect
of the Notes or the Indenture referred to on the reverse hereof may be served.
Interest payable on this Note on any Interest Payment Date and on the Maturity Date, as the
case may be, will be the amount of interest accrued during the applicable Interest Period (as
defined below).
An “Interest Period” is each period from and including the immediately preceding Interest
Payment Date (or from and including April 14, 1998, in the case of the initial Interest Period) to
but excluding the applicable Interest Payment Date or the Maturity Date, as the case may be. If any
Interest Payment Date other than the Maturity Date
would otherwise be a day that is not a Business Day, any amounts payable on such Interest
Payment Date will be paid on the succeeding Business Day with the same force and effect as if it
were paid on the date such payment was due. If the Maturity Date falls on a day that is not a
Business Day, principal and interest payable on the Maturity Date will be paid on the succeeding
Business Day with the same force and effect as if paid on the date such payment was due, and no
interest will accrue on the amount so payable for the period from and after the Maturity Date.
Payments of principal and interest in respect of this Note will be made by wire transfer of
immediately available funds (or with respect to any Note not held in global form, by a U.S. dollar
check or by wire transfer of immediately available funds) in such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of public and private
debts.
Reference is made to the further provisions of this Note set forth on the reverse hereof. Such
further provisions shall for all purposes have the same effect as though fully set forth at this
place. Capitalized terms used herein, including on the reverse hereof, and not defined herein or on
the reverse hereof shall have the respective meanings given to such terms in the Indenture.
This Note shall not be entitled to the benefits of the Indenture referred to on the reverse
hereof or be valid or become obligatory for any purpose until the certificate of authentication
hereon shall have been manually signed by the Trustee under such Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed manually or by
facsimile by its duly authorized officers.
| Dated: April_____, 1998 | NVR, INC., as Issuer |
|||
| By: | ||||
| Name: | ||||
| Its: | ||||
| By: | ||||
| Name: | ||||
| Its: | ||||
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is
one of the Securities of the series designated herein referred to in the within-mentioned Indenture.
| Dated: April ___,1998 | THE BANK OF NEW YORK |
|||
| By: | ||||
| Authorized Signatory | ||||
[REVERSE OF NOTE]
NVR, INC.
NVR, INC.
8% Senior Notes due 2005
This security is one of a duly authorized issue of debentures, notes, bonds, or other
evidences of indebtedness of the Issuer (hereinafter called the “Securities”) of the series
hereinafter specified, all issued or to be issued under and pursuant to an Indenture dated as of
April 14, 1998, between the Issuer and The Bank of New York, as trustee (the “Trustee”) as
supplemented by the First Supplemental Indenture dated as of April 14, 1998 among the Issuer, NVR
Homes, Inc. as a subsidiary guarantor and the Trustee (as so supplemented, herein called the
“Indenture”), duly executed and delivered by the Issuer to The Bank of New York, as Trustee (herein
called the “Trustee,” which term includes any successor trustee under the Indenture with respect to
the series of Securities of which this Note is a part), to which Indenture and all Indentures
supplemental thereto that are applicable to the Notes (as defined below) reference is hereby made
for a description of the rights, limitations of rights, obligations, duties, and immunities
thereunder of the Trustee, the Issuer, and the Holders of the Securities, and of the terms upon
which the Securities are, and are to be, authenticated and delivered. The Securities may be issued
in one or more series, which different series may be issued in various aggregate principal amounts,
may mature at different times, may bear interest (if any) at different rates, may be subject to
different redemption provisions (if any), and may otherwise vary as provided in the Indenture. This
Security is one of a series designated as the 8% Senior Notes due 2005 of the Issuer (the “Notes”),
limited in aggregate principal amount to $175,000,000.
In case an Event of Default with respect to the 8% Senior Notes due 2005 shall have occurred
and be continuing, the principal hereof and premium (if any) may be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect, and subject to the
conditions provided in the Indenture.
The Notes shall be redeemable at the option of the Company, in whole or in part, at any time
on or after June 1, 2003, at the redemption prices (expressed as a percentage of principal amount)
set forth below, plus accrued and unpaid interest thereon, if any, to the redemption date, if
redeemed during the 12-month period beginning on June 1 of the years indicated below:
| Redemption Year | Price | |||
2003
|
104.000 | % | ||
2004
|
102.000 | % | ||
2005
|
100.000 | % | ||
In addition, prior to June 1, 2001, the Company may redeem up to 35% of the aggregate
principal amount of the Notes issued under this First Supplemental Indenture at a redemption price
equal to 108% of the principal amount of the Notes so redeemed, plus accrued and unpaid interest
thereon, if any, to the redemption date with the net cash proceeds of one or more Public Equity
Offerings; provided, however, that (x) at least $113,750,000 aggregate principal amount of all
Notes issued under the Indenture remains outstanding immediately after giving effect to any such
redemption (excluding any Notes held by the Company) and (y) notice of any such redemption is given
within 60 days of the applicable Public Equity Offering.
Selection of the Notes or portions thereof for redemption pursuant to the foregoing shall be
made by the Trustee pro rata or by lot. Notice of redemption shall be mailed via courier
guaranteeing overnight delivery at least 30 days but not more than 60 days before the redemption
date to each Holder whose Notes are to be redeemed at the registered address of such Holder. On and
after the redemption date, interest shall cease to accrue on the Notes or portions thereof called
for redemption.
The covenants set forth in Article V of the First Supplemental Indenture shall be fully
applicable to the Notes.
The First Supplemental Indenture provides that, subject to certain conditions, (i) if a Change
of Control (as defined in the First Supplemental Indenture) occurs, the Issuer shall be required to
make a Change of Control Offer, (ii) in the event of certain Asset Sales, the Company shall be
required to make an Asset Sale Offer (in each case as such terms are defined in the First
Supplemental Indenture) and (iii) if the Company does not maintain a Minimum Required Net Worth (as
defined in the First Supplemental Indenture), the Company shall be required to make a Purchase
Offer (as defined in the First Supplemental Indenture), in certain circumstances, for all or a
portion of the Notes.
The Indenture contains provisions permitting the Issuer and the Trustee, with the consent of
the Holders of not less than a majority of the aggregate principal amount of the Securities at the
time Outstanding of all series to be affected (voting as one class), evidenced as provided in the
Indenture, to execute supplemental Indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental Indenture or modifying in
any manner the rights of the Holders of the Securities of each series; provided, however, that no
such supplemental Indenture shall, without the consent of the Holder of each Security so affected,
among other things (i) change the final maturity of any Security, or reduce the principal amount
thereof or any premium thereon, or reduce the rate or extend the time of payment of any interest
thereof, or impair or affect the rights of any Holder to institute suit for the payment on any
Security, or (ii) reduce the percentage of Securities, the Holders of which are required to consent
to any such supplemental Indenture, (iii) reduce the percentage of Securities, the Holders of which
are required to consent to any waiver of compliance with certain provisions of the Indenture or any
waiver of certain defaults thereunder or (iv) modify the ranking or priority of the Securities. It
is also provided in the Indenture that, with respect to certain defaults or Events of Default
regarding the Securities of any series, the Holders of a majority in aggregate principal amount
outstanding of the Securities of such series (or, in the case of certain defaults or Events of
Default, all series of Securities) may on behalf of the Holders of all the Securities of such
series (or all of the Securities, as the case may be) waive any such past default or Event of
Default and its consequences, prior to any declaration accelerating the maturity of such
Securities, or, subject to certain conditions, may rescind a declaration of acceleration and its
consequences with respect to such Securities. The preceding sentence shall not, however, apply to a
default in the payment of the principal of or premium, if any, or interest on any of the
Securities. Any such consent or waiver by the Holder of this Security (unless revoked as provided
in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and
owners of this Security and any securities that may be issued in exchange or substitution herefor,
irrespective of whether or not any notation thereof is made upon this Security or such other
securities.
As provided in and subject to the provisions of the Indenture, the Holder of this Security
shall not have the right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless (a) such Holder
shall have previously given the Trustee written notice of a continuing Event of Default, (b) the
Holders of not less than 25% in aggregate principal amount of the Securities Outstanding shall have
made written request to the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity and the Trustee shall not have received from
the Holders of a majority in aggregate principal amount of the Securities Outstanding a direction
inconsistent with such request, and (c) the Trustee shall have failed to institute any such
proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof, premium, if any, or interest hereon on or after the respective due
dates expressed herein.
No references herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the
principal, premium, if any, and interest on this Security in the manner, at the respective times,
at the rate and in the coin or currency herein prescribed.
This Security is issuable only in registered form without coupons in denominations of $1,000
and integral multiples thereof. Securities may be exchanged for a like aggregate principal amount
of Securities of this series of other authorized denominations at the office or agency of the
Issuer in New York, New York, in the manner and subject to the limitations provided in the
Indenture, but without the payment of any service charge except for any tax or other governmental
charge imposed in connection therewith.
This Security is not subject to a sinking fund requirement.
Upon due presentment for registration of transfer of Securities at the office or agency of the
Issuer in New York, New York, a new Security or Securities of the same series of authorized
denominations in an equal aggregate principal amount will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Indenture, without charge except for any tax
or other governmental charge imposed in connection therewith.
No recourse under or upon any obligation, covenant or agreement contained in the Indenture, in
any Security or coupon appertaining thereto, or because of any indebtedness evidenced hereby or
thereby (including, without limitation, any obligation or indebtedness relating to the principal
of, or premium, if any, or interest or any other amounts due, or claimed to be due, on this
Security), or for any claim based thereon or otherwise in respect thereof,
shall be had against any promoter, as such, or against any past, present or future
shareholder, office or director, as such, of the Issuer or of any successor, either directly or
through the Issuer or any successor, under any rule of law, statute or constitutional provision or
by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance hereof and as part of the
consideration for the issue hereof.
Prior to due presentation of a Security for registration of transfer, the Issuer, the Trustee,
and any authorized agent of the Issuer or the Trustee may deem and treat the Person in whose name
this Security is registered as the absolute owner of this Security (whether or not this Security
shall be overdue and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and premium, if any, and
subject to the provisions herein and on the face hereof; interest hereon, and for all other
purposes, and neither the Issuer nor the Trustee nor any authorized agent of the Issuer or the
Trustee shall be affected by any notice to the contrary.
The Indenture and this Security shall be governed by the internal laws of the State of New
York, United States of America.
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused “CUSIP” numbers to be printed on the Securities of this series
as a convenience to the Holders of such Securities. No representation is made as to the correctness
or accuracy of such CUSIP numbers as printed on the Securities, and reliance may be placed only on
the other identification numbers printed hereon.
ASSIGNMENT FORM AND CERTIFICATE OF TRANSFER
To assign this Security fill in the form below:
(I) or (we) assign and transfer this Security to
(I) or (we) assign and transfer this Security to
(Insert assignee’s social security or tax identification number, if any)
(Print or type assignee’s name, address and zip code)
Your signature: |
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| (Sign exactly as your name appears on the other side of this Security) |
Date:
|
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Signature Guarantee:
|
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| Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Trustee, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Trustee in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended | ||||
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer pursuant to Section 5.04, 5.09
or 5.10 of the First Supplemental Indenture, check here .
If you want to elect to have only a part of this Note purchased by the Issuer pursuant to
Section 5.04, 5.09 or 5.10 of the First Supplemental Indenture, state the amount:
$
Dated:
Your Signature:
(sign exactly as your name appears on the
other side of this Security)
other side of this Security)
Signature Guarantee:
Signatures must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Trustee, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”) or such
other “signature guarantee program” as may be determined by the Trustee in
addition to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
EXHIBIT B
FORM OF SUBSIDIARY GUARANTEE
NVR Homes, Inc., a Virginia corporation (hereinafter referred to as the “Subsidiary
Guarantor,” which term includes any successor Subsidiary Guarantor under the Indenture dated as of
April 14, 1998 between NVR, Inc. and The Bank of New York as Trustee (the “Trustee”) as
supplemented by the First Supplemental Indenture dated as of April 14, 1998 between NVR, Inc., the
Subsidiary Guarantor and the Trustee (the “Indenture”) referred to in the Note upon which this
notation is endorsed), (i) has unconditionally guaranteed that (a) the principal of, interest and
premium, if any, on the Notes will be promptly paid in full when due, subject to any applicable
grace period, whether at stated maturity, by acceleration or otherwise and interest on the overdue
principal of, and interest on interest, to the extent lawful, and premium, if any, on the Notes and
all other obligations of the Company to the Holders or the Trustee under the Indenture or the Notes
will be promptly paid in full, all in accordance with the terms set forth in the Indenture and
Notes; and (b) in case of any extension of time of payment or renewal of the Notes or of any such
other obligations, the same will be promptly paid in full when due in accordance with the terms of
the extension or renewal, subject to any applicable grace period, whether at stated maturity, by
acceleration or otherwise, (ii) has agreed to pay any and all costs and expenses (including
reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under
this Subsidiary Guarantee; provided, however, that this Subsidiary Guarantee is limited as to the
Subsidiary Guarantor to the extent necessary not to constitute a fraudulent conveyance or
fraudulent transfer.
No stockholder, officer, director or incorporator, as such, past, present or future, of any
Subsidiary Guarantor shall have any personal liability under this Subsidiary Guarantee by reason of
his or its status as such stockholder, officer, director or incorporator.
This Subsidiary Guarantee shall be binding upon the undersigned and, to the extent provided in
the Indenture, its successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by
any Holder or the Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all subject to the terms and
conditions hereof.
This Subsidiary Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Note upon which this Subsidiary Guarantee is noted shall have
been executed by the Trustee under the Indenture by the manual signature of one of its authorized
officers.
IN WITNESS WHEREOF, the Subsidiary Guarantor has caused this Subsidiary Guarantee to be signed
manually or by facsimile by its duly authorized officer.
| NVR HOMES, INC., as Subsidiary Guarantor |
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| By: | ||||
| Name: | ||||
| Title: | ||||
