SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)
KAUFMAN AND BROAD HOME CORPORATION
----------------------------------
(Name of Issuer)
Common Stock
------------
(Title of Class of Securities)
486168107
---------
(CUSIP Number)
Robert E. Lewis
3325 Ali Baba Lane
Suite 603
Las Vegas, Nevada 89118
(702) 736-8960
---------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 7, 1999
-------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(e),13d-1(f) or 13d-1(g), check the following box: [ ]
The information required on the remainder of this cover
page shall not be deemed to be "filed" for the purpose of Section
18 of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
CUSIP NO. 486168107 Schedule 13D
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
Robert E. Lewis
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP<*> (a)[X]
(b)[ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH:
7 SOLE VOTING POWER<*>
3,043,422
8 SHARED VOTING POWER*
400,000
9 SOLE DISPOSITIVE POWER*
3,043,422
10 SHARED DISPOSITIVE POWER*
400,000
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON<*>
3,443,422
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11<*>
7.2%
14 TYPE OF REPORTING PERSON
IN
<*> SEE ITEMS 2 AND 5 OF TEXT BELOW
2
<PAGE>
CUSIP NO. 486168107 Schedule 13D
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
LH Evans, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP<*> (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH:
7 SOLE VOTING POWER<*>
2,880,783
8 SHARED VOTING POWER<*>
0
9 SOLE DISPOSITIVE POWER<*>
2,880,783
10 SHARED DISPOSITIVE POWER<*>
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON<*>
2,880,783
12 CHECK BOX IF THE AGGREGATE AMOUNT N ROW 11 EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11<*>
6.0*
14 TYPE OF REPORTING PERSON
CO
<*> SEE ITEMS 2 AND 5 OF TEXT BELOW
3
<PAGE>
CUSIP NO. 486168107 Schedule 13D
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
Terrain Enterprises, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP<*> (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH:
7 SOLE VOTING POWER<*>
31,749
8 SHARED VOTING POWER<*>
0
9 SOLE DISPOSITIVE POWER<*>
31,749
10 SHARED DISPOSITIVE POWER<*>
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON <*>
31,749
12 CHECK BOX IF THE AGGREGATE AMOUNT N ROW 11 EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11<*>
0.07%
14 TYPE OF REPORTING PERSON
CO
<*> SEE ITEMS 2 AND 5 OF TEXT BELOW
4
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CUSIP NO. 486168107 Schedule 13D
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
LHE Platte, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP<*> (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH:
7 SOLE VOTING POWER<*>
0
8 SHARED VOTING POWER<*>
400,000
9 SOLE DISPOSITIVE POWER<*>
0
10 SHARED DISPOSITIVE POWER<*>
400,000
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON<*>
400,000
12 CHECK BOX IF THE AGGREGATE AMOUNT N ROW 11 EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11<*>
0.8%
14 TYPE OF REPORTING PERSON
CO
<*> SEE ITEMS 2 AND 5 OF TEXT BELOW
5
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CUSIP NO. 486168107 Schedule 13D
ITEM 1. SECURITY AND ISSUER
This report relates to the Common Stock of Kaufman and
Broad Home Corporation (the "Company") which has its principal
executive offices located at 10990 Wilshire Boulevard, Los
Angeles, California 90024.
ITEM 2. IDENTITY AND BACKGROUND
This statement is being filed by Robert E. Lewis, in
his individual capacity and as a member of LH Evans, LLC
("Evans"), as the sole shareholder and President of Terrain
Enterprises, Inc. ("Terrain") and as the sole shareholder and
President of Crestview Construction of Nevada, Inc. and Parkside
Construction Co., Inc., each a member of Lewis Holding Company,
LLC, which in turn is a member of LHE Platte, LLC ("Platte").
Mr. Lewis' principal business address is 3325 Ali Baba Lane,
Suite 603, Las Vegas, Nevada 89118 and his present occupation is
the President of Kaufman and Broad of Nevada, Inc., a wholly
owned subsidiary of the Company. The Company is engaged in the
homebuilding business.
Evans is a limited liability company formed under the
laws of the State of Delaware with its principal and business
address at 1156 N. Mountain Avenue, Upland, California 91785.
The principal business of Evans is to hold the Common Stock of
the Company.
Terrain is a corporation organized under the laws of
the State of California with its principal and business address
at 1156 N. Mountain Avenue, Upland, California 91785. The
principal business of Terrain is to hold the Common Stock of the
Company and other securities. Robert E. Lewis is the sole
shareholder and President of Terrain.
Platte and Lewis Holding Company, LLC are limited
liability companies formed under the laws of the State of
Delaware with their principal and business addresses at 1156 N.
Mountain Avenue, Upland, California 91785. The principal
business of Platte is to hold the Common Stock of the Company and
the principal business of Lewis Holding Company, LLC is to hold
member interests in Platte and other limited liability companies.
Crestview Construction of Nevada, Inc. is a Nevada
corporation with its principal and business address at 3325 Ali
Baba Lane, Suite 603, Las Vegas, Nevada 89118. The principal
business of Crestview Construction of Nevada, Inc. is to hold a
member interest in Lewis Holding Company, LLC. Robert E. Lewis
is the sole shareholder and President of Crestview Construction
of Nevada, Inc.
Parkside Construction Co., Inc. is a California
corporation with its principal and business address at 1156 N.
Mountain Avenue, Upland, California 91785. The principal
business of Parkside Construction Co., Inc. is to hold a member
interest in Lewis Holding Company, LLC. Robert E. Lewis is the
sole shareholder and President of Parkside Construction Co., Inc.
Mr. Lewis, Evans, Terrain and Platte may constitute a
"group" for purposes of Section 13d of the Securities Exchange
Act of 1934.
6
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CUSIP NO. 486168107 Schedule 13D
For purposes of this statement, Evans, Terrain, Platte,
Lewis Holding Company, LLC, Crestview Construction of Nevada,
Inc. and Parkside Construction Co., Inc. are collectively
referred to as the "Entities".
During the last five years, none of Mr. Lewis or any of
the Entities has been (a) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), or (b) a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was
or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to federal or state securities laws or finding any
violation with respect to such laws.
Mr. Lewis is a citizen of the United States of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Mr. Lewis, Terrain and Platte acquired all of their
shares of Company Common Stock pursuant to that certain Purchase
Agreement, executed as of January 7, 1999 (the "Purchase
Agreement"), by and among the Company and the Sellers (which
included Mr. Lewis, Terrain and Platte) and the Corporations
named therein. Pursuant to the Purchase Agreement, the Company
acquired substantially all the homebuilding assets of the Lewis
Homes group of companies. Evans acquired its shares of Common
Stock of the Company from LHC Platte, LLC, LHN Platte, LLC and
LHE Platte, LLC, each of which in turn acquired its shares
pursuant to the Purchase Agreement.
ITEM 4. PURPOSE OF TRANSACTION
Mr. Lewis, Terrain and Platte acquired their shares of
Company Common Stock pursuant to the Purchase Agreement. Evans
acquired its shares of Company Common Stock from LHC Platte, LLC,
LHN Platte, LLC and LHE Platte, LLC, each of which in turn
acquired its shares pursuant to the Purchase Agreement. In
connection with the Purchase Agreement, the Company and certain
identified Shareholders (including Mr. Lewis, Evans, Terrain and
Platte), entered into a Shareholder Agreement, dated as of
January 7, 1999 (the "Shareholder Agreement"). Pursuant to the
Shareholder Agreement, among other things, the Company has agreed
to elect a designee of the Shareholders to serve on the Company's
Board of Directors until the Company's annual meeting of
shareholders held in 2000 (the "2000 Annual Meeting"). Randall
W. Lewis, a Shareholder and the brother of Mr. Lewis, has been
elected to the Company's Board of Directors.
The Board of Directors of the Company is not obligated
to nominate Randall W. Lewis for reelection at the 2000 Annual
Meeting. If, before the 2000 Annual Meeting, Randall W. Lewis
for any reason shall become unable or otherwise shall cease to
serve as a director, the Shareholders are entitled to designate
another person from those listed on Exhibit A to the Shareholder
Agreement, which includes Mr. Lewis, to complete Randall W.
Lewis' term of office and the Company is obligated as soon as
practicable to use its best efforts to cause the Board of
Directors of the Company to elect such designee to complete the
term.
7
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CUSIP NO. 486168107 Schedule 13D
The Shareholder Agreement also provides that each
Shareholder agrees to vote and to grant or withhold a written
consent with respect to (or, if and to the extent that a
Shareholder is the beneficial but not the record owner, agrees to
cause to be voted and to cause a written consent to be granted or
withheld with respect to) all shares of Common Stock of the
Company that such Shareholder beneficially owns (whether acquired
pursuant to the Purchase Agreement or otherwise) in the manner
recommended by the Board of Directors of the Company on all
matters submitted to a vote of the Company's shareholders;
provided, however, that the Shareholder shall be entitled to vote
and to grant or withhold a written consent with respect to their
shares in favor of the election to the Board of Directors of the
Company of any person designated by them in accordance with the
Shareholder Agreement. The foregoing agreement regarding voting
is suspended automatically and becomes ineffective if (a) the
aggregate beneficial ownership of the Common Stock of the Company
by the Shareholders becomes less than 10% of the outstanding
Common Stock of the Company or (b) the Board of Directors of the
Company does not nominate the Shareholders' designee for election
at the 2000 Annual Meeting or a subsequent annual meeting at
which directors of the designee's class are nominated for
election.
The Shareholder Agreement also provides that no
Shareholder shall, directly or indirectly, offer, sell or
transfer any shares of Common Stock of the Company that such
Shareholder beneficially owns (whether acquired pursuant to the
Purchase Agreement or otherwise), without offering the Company
right of first refusal in the manner provided in the Shareholder
Agreement and except in compliance with certain exceptions set
forth in the Shareholder Agreement.
Other than as described above, and as contemplated by
the Shareholder Agreement, none of Mr. Lewis or any of the
Entities has any plans or proposals which relate to, or may
result in, the matters listed on Items 4(a)-(j) of Schedule 13D
(although they reserve the right to develop such).
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Mr. Lewis beneficially owns 3,443,422 shares, equal to
approximately 7.2% of the outstanding shares of the Common Stock
of the Company, of which 130,890 shares are held of record by Mr.
Lewis (0.3%), 2,880,783 shares are held of record by Evans
(6.0%), 31,749 shares are held of record by Terrain (0.07%) and
400,000 shares are held of record by Platte (0.8%). Except as
set forth in the Shareholder Agreement, Mr. Lewis exercises sole
voting power and sole dispositive power over all of the shares
owned of record by Mr. Lewis, Evans and Terrain and, as a result
of his ownership and control of Crestview Construction of Nevada,
Inc. and Parkside Construction Co., Inc., which are members of
Lewis Holding Company, LLC, which in turn is a member of Platte,
has shared voting and dispositive power with respect to the
shares held of record by Platte. Except as discussed in the
following sentence and as otherwise described herein, none of Mr.
Lewis, Evans, Terrain or Platte has acquired or disposed of any
of the Company's Common Stock during the past 60 days. On
January 7, 1999, Platte purchased a total of 2,223,108 shares of
Company Common Stock pursuant to the Purchase Agreement, and
immediately transferred all of such shares except the 400,000 it
currently owns as follows: 990,000 shares to LH Ranier, LLC;
816,827 shares to Evans; and 16,281 shares to LH Jagerhorn, LLC.
8
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CUSIP NO. 486168107 Schedule 13D
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF
THE ISSUER
See Item 4 for a description of the Purchase Agreement
and the Shareholder Agreement, which are incorporated herein by
reference. Certain identified Shareholders (including Mr. Lewis,
Evans, Terrain and Platte) and the Company have entered into a
Registration Rights Agreement, dated as of January 7, 1999 (the
"Registration Rights Agreement"), pursuant to which the
Shareholders are entitled to certain "demand registration rights"
with respect to their shares of the Company Common Stock. The
Company will not be obligated to file a registration statement
relating to a demand registration request: (1) sooner than July
1, 2000 (except that after July 1, 1999, the Company will be
obligated to file a registration statement if the request for the
registration statement is with respect to shares of the Company
Common Stock held by or on behalf of the estate of a deceased
Shareholder); (2) for an aggregate of more than 2,000,000 shares
of Common Stock during each of (i) the six-month period
commencing July 1, 2000, (ii) the twelve-month period commencing
January 1, 2001, and (iii) the six-month period commencing
January 1, 2002 (each such period being a "Demand Period"); (3)
more than once in any one of the Demand Periods; (4) within a
period of two months after the effective date of any other
registration statement of the Company demanded under the
Registration Rights Agreement or (5) if such registration request
is for a number of securities which have an aggregate market
value less than $10 million. The Registration Right Agreement
also grants the Shareholders certain "piggyback registration
rights" at any time prior to July 1, 2002, subject to certain
exceptions.
Evans has executed and delivered Collateralized and
Guaranteed Promissory Notes, dated January 7, 1999, with each of
LHC Platte, LLC (the "LHC Note"), LHN Platte, LLC (the "LHN
Note") and LHE Platte, LLC (the "LHE Note" and together with the
LHC Note and the LHN Note, collectively, the "Notes"). The LHC
Note is in the original principal amount of $54,039,170 and is
payable to LHC Platte, LLC, the LHN Note is in the original
principal amount of $7,105,527 and is payable to LHN Platte, LLC
and the LHE Note is in the original principal amount of
$24,198,500 and is payable to LHE Platte, LLC. The Notes were
issued in exchange for the shares of the Company Common Stock
acquired by Evans. Each of the Notes will not bear interest
during the first 90 days of its term. Thereafter, all fixed
principal will bear interest at the rate of 8% per annum,
compounded annually. Through and including the second
anniversary of each Note, accrued interest will not be payable
currently. Thereafter, interest only (accrued from the second
anniversary of such Note) will be payable beginning February 1,
2002 and on the first day of each month thereafter, with a final
installment, consisting of all fixed principal and all accrued
but unpaid interest, payable on the fifth anniversary of such
Note. The principal of a Note can vary as described in the copy
of that Note attached hereto as Exhibit 5, 6 and 7 and
incorporated herein by reference. The LHC Note, LHN Note and LHE
Note are collateralized by a first lien accommodation pledge
by Mr. Lewis, in his individual capacity, of certain securities
owned by Mr. Lewis other than Company Common Stock. The full,
prompt and timely payment of the Notes is also guaranteed by
Robert E. Lewis.
Except as set forth above, to the best of Mr. Lewis'
knowledge, no contracts, arrangements, understandings or
relationships (legal or otherwise) exist among the persons named
in Item 2 or among such persons and any other persons with
respect to any securities of the Company, including but not limited
to, transfer or voting of any such securities, finder's fees,
9
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CUSIP NO. 486168107 Schedule 13D
joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving
or withholding of proxies.
The descriptions of the Purchase Agreement, Shareholder
Agreement, Registration Rights Agreement and the Notes contained
or incorporated herein by reference are qualified in their
entirety by the copies of the Purchase Agreement, Shareholder
Agreement, Registration Rights Agreement and the Notes referenced
or attached as exhibits to this statement.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 Joint Filing Agreement.
Exhibit 2 Purchase Agreement, executed January 7, 1999, by and
among the Company and the Sellers and Corporations
named therein (incorporated by reference to Exhibit 2.3
to the Current Report on Form 8-K filed with the
Securities and Exchange Commission on January 22, 1999
by the Company).
Exhibit 3 Shareholder Agreement, dated January 7, 1999, by and
among the Company and the Shareholders listed on the
signature page thereto (incorporated by reference to
Exhibit 99.2 to the Current Report on Form 8-K filed
with the Securities and Exchange Commission on January
22, 1999 by the Company).
Exhibit 4 Registration Rights Agreement, dated as of January 7,
1999, by and among the Company and the Shareholders
listed on the signature page thereto (incorporated by
reference to Exhibit 99.1 to the Current Report on Form
8-K filed with the Securities and Exchange Commission
on January 22, 1999 by the Company).
Exhibit 5 Collateralized and Guaranteed Promissory Note, dated
January 7, 1999, with LH Evans, LLC, as payor, and LHC
Platte, LLC, as payee.
Exhibit 6 Collateralized and Guaranteed Promissory Note, dated
January 7, 1999, with LH Evans, LLC, as payor, and LHN
Platte, LLC, as payee.
Exhibit 7 Collateralized and Guaranteed Promissory Note, dated
January 7, 1999, with LH Evans, LLC, as payor, and LHE
Platte, LLC, as payee.
10
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CUSIP NO. 486168107 Schedule 13D
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
Dated: February 22, 1999
/s/ Robert E. Lewis
-----------------------------
Robert E. Lewis
LH EVANS, LLC
By: /s/ Robert E. Lewis
------------------------------
Robert E. Lewis, its member
TERRAIN ENTERPRISES, INC.
By: /s/ Robert E. Lewis
------------------------------
Robert E. Lewis, President
LHE PLATTE, LLC
By: Lewis Holding Company,
LLC,its member
By: Crestview Construction
of Nevada, Inc.,
its member
By: /s/ Robert E. Lewis
------------------------
Robert E. Lewis,
President
11
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CUSIP NO. 486168107 Schedule 13D
Joint Filing Agreement
(Pursuant to Rule 13d-1(f))
In accordance with Rule 13d-1(f) promulgated under the
Securities Exchange Act of 1934, as amended, the persons named
below agree to the joint filing on behalf of each of them of a
Statement on Schedule 13D (including amendments thereto) with
respect to the Common Stock of Kaufman and Broad Home Corporation
and further agree that this Joint Filing Agreement be included as
an exhibit to such joint filing. Each party to this Joint Filing
Agreement expressly authorizes Robert E. Lewis to file on such
party's behalf any and all amendments to such Statement. Each
such party undertakes to notify Robert E. Lewis of any changes
giving rise to an obligation to file an amendment to Schedule 13D
and it is understood that in connection with this Statement and
all amendments thereto each such party shall be responsible only
for information supplied by such party.
In evidence thereof, the undersigned, being duly
authorized, hereby execute this Agreement this 22nd day of
February, 1999.
/s/ Robert E. Lewis
----------------------------
Robert E. Lewis
LH EVANS, LLC
By: /s/ Robert E. Lewis
-----------------------
Robert E. Lewis, its member
TERRAIN ENTERPRISES, INC.
By: /s/ Robert E. Lewis
-----------------------
Robert E. Lewis, President
LHE PLATTE, LLC
By: Lewis Holding Company,
LLC, its member
By: Crestview Construction
of Nevada, Inc., its
member
By: /s/ Robert E. Lewis
---------------------
Robert E. Lewis,
President
12
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COLLATERALIZED AND GUARANTEED PROMISSORY NOTE
Los Angeles, California
January 7, 1999
FOR VALUE RECEIVED, the undersigned, the payor listed
as such on Exhibit "A" ("Payor"), promises to pay to the order of
the party listed as "Payee" on Exhibit "A" at Upland, California,
or at such other place as the holder of this Note may from time
to time designate, the principal amount (the "Principal")
specified below, together with interest thereon as specified
below.
1. The Principal shall not bear interest during the
first (90) days of the term of this Note. Commencing upon the
ninety-first (91st) day of the term of this Note, all Fixed
Principal (as ultimately determined below) shall bear interest
at the rate of eight percent (8%) per annum, compounded
annually and computed on the basis of a 360-day year of 30-day
months, until paid in full. Through and including the second
anniversary of this Note, accrued interest shall not be payable
currently; thereafter, interest only (accrued from the second
anniversary of this Note) shall be payable monthly, beginning
February 1, 2002, and the first day of each month thereafter,
with a final installment, consisting of all Fixed Principal
and all accrued but unpaid interest, payable on the fifth
anniversary of this Note. Interest accrued on all Fixed
Principal shall be computed retroactively (to the ninety-first
(91st) day of the term of this Note) upon each portion of
Fixed Principal once the amount of that portion of Fixed
Principal becomes known.
2. The Principal balance of this Note shall vary
from time to time as provided below, and for purposes of
determining the Principal balance of this Note the following
terms shall have the following meanings:
The "Collared Region" shall be the region bounded
as an upper boundary by the Upper Limit (inclusive of that
boundary) and as a lower boundary by the Lower Limit (inclusive
of that boundary).
The "Contingency Period" shall be the period
(inclusive of its boundaries) beginning on the day immediately
following the Initial 90 Days and ending on the earlier of: (i)
the second anniversary of this Note, and (ii) the date on which
all of the Kaufman and Broad Stock has been sold, transferred or
otherwise disposed of by Payor to unaffiliated persons or
entities.
The "Fixed Principal" shall mean any portion(s) of
the Principal of this Note which has (have) become fixed in
amount pursuant to any provision of this Note.
The "Initial 90 Days" shall be the first ninety
(90) days of the term of this Note.
<PAGE>
The "Kaufman and Broad Stock" shall be the common
stock, par value, $1.00 per share, of Kaufman and Broad Home
Corporation, a Delaware corporation, purchased by Payor from
Payee with this Note.
The "Lower Limit" shall be the amount which is
equal to 88.4% of the 90 Day Principal.
The "90 Day Principal" shall be the Principal at
the end of the Initial 90 Days.
The "Original Principal" shall be the amount shown
on Exhibit "A."
The "Recomputed Principal" on any day shall equal
the product of (i) the sum set forth on Exhibit "A" as the
"Number of Shares" and (ii) the closing price on that date (or
the last trading day immediately preceding the date of
determination, if the date of determination is not a trading day)
quoted on the New York Stock Exchange (or any successor exchange
on which such shares shall be listed) for the common stock, par
value $1.00 per share, of Kaufman and Broad Home Corporation, a
Delaware corporation.
The "Upper Limit" shall be the amount which is
equal to 125% (with rounding down to the next lowest cent) of the
90 Day Principal.
3. The Principal of this Note on the date hereof shall
equal the Original Principal. On any day thereafter during the
Initial 90 Days, the Principal of this Note shall equal the
Recomputed Principal on that day. On any day thereafter during
the Contingency Period, the Principal of this Note shall equal the
Recomputed Principal on that day; provided, however, if (i) the
Recomputed Principal on any such day shall exceed the Upper
Limit, then the Principal shall equal the Upper Limit, and (ii)
if the Recomputed Principal on any such day shall be less than
the Lower Limit, then the Principal shall equal the Lower Limit.
4. All Principal of this Note not theretofore fixed in
amount pursuant to any other provision of this Note shall become
fixed (as determined above) on the final day of the Contingency
Period and thereafter shall cease to fluctuate.
5. Notwithstanding anything to the contrary stated
herein, if any portion of the Kaufman and Broad Stock is sold,
transferred or otherwise disposed of ("Sold") by Payor to any
unaffiliated person or entity during the term of this Note, the
following shall apply: (a) that portion of the Principal balance
of this Note evidencing Payor's payment for the Kaufman and Broad
Stock so Sold (the "Sold Shares Principal Amount") shall be fixed in
amount as of the date of that Sale (if it has not already become
fixed pursuant to any other provision of this Note) and shall not
fluctuate thereafter during the remainder of the term of this
Note; and (b) the remaining balance of the Principal of this Note
(i.e. that portion evidencing Payor's payment for the Kaufman and
Broad Stock not Sold by Payor) shall continue to be governed by
the provisions of Sections 2-5 of this Note, mutatis mutandis,
and for these purposes the "Number of Shares" shall be reduced by
the number of shares of the Kaufman and Broad Stock so Sold.
<PAGE>
6. All or any portion of the outstanding Principal of
this Note may be prepaid at any time by Payor, without penalty or
premium, provided only that all interest then accrued but unpaid
thereon is also paid in full at that time. For purposes of
computing the accrued interest so due and payable, the amount
of Principal prepaid shall constitute Fixed Principal as of the
date of prepayment.
7. This Note shall be fully collateralized by a first
lien pledge of assets as more particularly described in a Pledge
Agreement (Stock), of even date herewith, made by the party
identified as the "Pledgor" on Exhibit A, in favor of Payee.
8. The full, prompt and timely payment of this Note
shall be guaranteed by a Guaranty, of even date herewith, by the
party identified as the "Guarantor on Exhibit "A", in favor of
Payee.
9. If this Note is not paid when due, the undersigned
promises to pay all costs and expenses of collection, whether or
not suit is filed hereon; such costs and expenses shall include,
without limitation, all costs, expenses and attorneys' fees actually
incurred by the holder hereof in connection with any insolvency,
bankruptcy, arrangements or other similar proceedings involving
the undersigned which in any way affects the exercise by the
holder hereof of its legal rights and remedies under this Note.
10. No single or partial exercise of any power hereunder
shall preclude other or further exercise thereof or the exercise
of any other power. No delay or omission on the part of the
holder hereof in exercising any right hereunder shall operate as a
waiver of such right or any other right under this Note. The
acceptance of any amount due and payable hereunder shall not
operate as a waiver with respect to any other amount then owing
and unpaid.
11. Presentment, demand, protest, notices of protest,
dishonor and nonpayment of this Note and all notices of every
kind are hereby waived by all parties to this Note, whether the
undersigned, principal, surety, guarantor or endorser, except as
provided herein. To the extent permitted by applicable law, the
defense of the statute of limitations is hereby waived by the
undersigned.
12. Principal and interest evidenced hereby are payable
only in lawful money of the United States. The receipt of a
check shall not, in itself, constitute payment hereunder unless and
until paid in good funds.
[this space intentionally left blank]
<PAGE>
13. This Note is to be governed by and construed in
accordance with the laws of the State of California except to the
extent United States federal law permits the holder to contract
for, charge or receive a greater amount of interest. In any
action brought under or arising out of this Note, the undersigned
hereby consents to the in personam jurisdiction of any state or
federal court sitting in Los Angeles, California, waives any
claim or defense that such forum is not convenient or proper, and
consents to service of process by any means authorized by
California law.
14. THE UNDERSIGNED HEREBY WAIVES, AND COVENANTS THAT
THE UNDERSIGNED WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT
OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT
OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
OUT OF OR BASED UPON THIS NOTE, THE SUBJECT MATTER HEREOF OR ANY
DOCUMENT RELATING HERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING OR WHETHER IN CONTRACT OR IN TORT OR OTHERWISE.
PAYOR
LH EVANS, LLC, a Delaware Limited
liability company
By: LH Elba, Inc., a California
corporation, its Member
By: /s/ ROBERT E. LEWIS
-----------------------
Robert E. Lewis, its
President
<PAGE>
EXHIBIT "A"
to Collateralized and Guaranteed Promissory Notes
1. Payor: LH Evans, LLC
2. Payee: LHC Platte, LLC
3. Original Principal: $54,039,170
4. Number of Shares: 1,824,107
5. Pledgor: Robert E. Lewis
6. Guarantor: Robert E. Lewis
<PAGE>
COLLATERALIZED AND GUARANTEED PROMISSORY NOTE
Los Angeles, California
January 7, 1999
FOR VALUE RECEIVED, the undersigned, the payor listed
as such on Exhibit "A" ("Payor"), promises to pay to the order of
the party listed as "Payee" on Exhibit "A" at Upland, California,
or at such other place as the holder of this Note may from time
to time designate, the principal amount (the "Principal")
specified below, together with interest thereon as specified
below.
1. The Principal shall not bear interest during the
first (90) days of the term of this Note. Commencing upon the
ninety-first (91st) day of the term of this Note, all Fixed
Principal (as ultimately determined below) shall bear interest
at the rate of eight percent (8%) per annum, compounded
annually and computed on the basis of a 360-day year of 30-day
months, until paid in full. Through and including the second
anniversary of this Note, accrued interest shall not be payable
currently; thereafter, interest only (accrued from the second
anniversary of this Note) shall be payable monthly, beginning
February 1, 2002, and the first day of each month thereafter,
with a final installment, consisting of all Fixed Principal
and all accrued but unpaid interest, payable on the fifth
anniversary of this Note. Interest accrued on all Fixed
Principal shall be computed retroactively (to the ninety-first
(91st) day of the term of this Note) upon each portion of
Fixed Principal once the amount of that portion of Fixed
Principal becomes known.
2. The Principal balance of this Note shall vary
from time to time as provided below, and for purposes of
determining the Principal balance of this Note the following
terms shall have the following meanings:
The "Collared Region" shall be the region bounded
as an upper boundary by the Upper Limit (inclusive of that
boundary) and as a lower boundary by the Lower Limit (inclusive
of that boundary).
The "Contingency Period" shall be the period
(inclusive of its boundaries) beginning on the day immediately
following the Initial 90 Days and ending on the earlier of: (i)
the second anniversary of this Note, and (ii) the date on which
all of the Kaufman and Broad Stock has been sold, transferred or
otherwise disposed of by Payor to unaffiliated persons or
entities.
The "Fixed Principal" shall mean any portion(s) of
the Principal of this Note which has (have) become fixed in
amount pursuant to any provision of this Note.
The "Initial 90 Days" shall be the first ninety
(90) days of the term of this Note.
<PAGE>
The "Kaufman and Broad Stock" shall be the common
stock, par value, $1.00 per share, of Kaufman and Broad Home
Corporation, a Delaware corporation, purchased by Payor from
Payee with this Note.
The "Lower Limit" shall be the amount which is
equal to 88.4% of the 90 Day Principal.
The "90 Day Principal" shall be the Principal at
the end of the Initial 90 Days.
The "Original Principal" shall be the amount shown
on Exhibit "A."
The "Recomputed Principal" on any day shall equal
the product of (i) the sum set forth on Exhibit "A" as the
"Number of Shares" and (ii) the closing price on that date (or
the last trading day immediately preceding the date of
determination, if the date of determination is not a trading day)
quoted on the New York Stock Exchange (or any successor exchange
on which such shares shall be listed) for the common stock, par
value $1.00 per share, of Kaufman and Broad Home Corporation, a
Delaware corporation.
The "Upper Limit" shall be the amount which is
equal to 125% (with rounding down to the next lowest cent) of the
90 Day Principal.
3. The Principal of this Note on the date hereof shall
equal the Original Principal. On any day thereafter during the
Initial 90 Days, the Principal of this Note shall equal the
Recomputed Principal on that day. On any day thereafter during
the Contingency Period, the Principal of this Note shall equal the
Recomputed Principal on that day; provided, however, if (i) the
Recomputed Principal on any such day shall exceed the Upper
Limit, then the Principal shall equal the Upper Limit, and (ii)
if the Recomputed Principal on any such day shall be less than
the Lower Limit, then the Principal shall equal the Lower Limit.
4. All Principal of this Note not theretofore fixed
in amount pursuant to any other provision of this Note shall become
fixed (as determined above) on the final day of the Contingency
Period and thereafter shall cease to fluctuate.
5. Notwithstanding anything to the contrary stated
herein, if any portion of the Kaufman and Broad Stock is sold,
transferred or otherwise disposed of ("Sold") by Payor to any
unaffiliated person or entity during the term of this Note, the
following shall apply: (a) that portion of the Principal balance of
this Note evidencing Payor's payment for the Kaufman and Broad Stock
so Sold (the "Sold Shares Principal Amount") shall be fixed in
amount as of the date of that Sale (if it has not already become
fixed pursuant to any other provision of this Note) and shall not
fluctuate thereafter during the remainder of the term of this
Note; and (b) the remaining balance of the Principal of this Note
(i.e. that portion evidencing Payor's payment for the Kaufman and
Broad Stock not Sold by Payor) shall continue to be governed by
the provisions of Sections 2-5 of this Note, mutatis mutandis,
and for these purposes the "Number of Shares" shall be reduced by
the number of shares of the Kaufman and Broad Stock so Sold.
<PAGE>
6. All or any portion of the outstanding Principal of
this Note may be prepaid at any time by Payor, without penalty or
premium, provided only that all interest then accrued but unpaid
thereon is also paid in full at that time. For purposes of
computing the accrued interest so due and payable, the amount
of Principal prepaid shall constitute Fixed Principal as of the
date of prepayment.
7. This Note shall be fully collateralized by a first
lien pledge of assets as more particularly described in a Pledge
Agreement (Stock), of even date herewith, made by the party
identified as the "Pledgor" on Exhibit A, in favor of Payee.
8. The full, prompt and timely payment of this Note
shall be guaranteed by a Guaranty, of even date herewith, by the
party identified as the "Guarantor on Exhibit "A", in favor of
Payee.
9. If this Note is not paid when due, the undersigned
promises to pay all costs and expenses of collection, whether or
not suit is filed hereon; such costs and expenses shall include,
without limitation, all costs, expenses and attorneys' fees actually
incurred by the holder hereof in connection with any insolvency,
bankruptcy, arrangements or other similar proceedings involving
the undersigned which in any way affects the exercise by the
holder hereof of its legal rights and remedies under this Note.
10. No single or partial exercise of any power hereunder
shall preclude other or further exercise thereof or the exercise
of any other power. No delay or omission on the part of the
holder hereof in exercising any right hereunder shall operate as a
waiver of such right or any other right under this Note. The
acceptance of any amount due and payable hereunder shall not
operate as a waiver with respect to any other amount then owing
and unpaid.
11. Presentment, demand, protest, notices of protest,
dishonor and nonpayment of this Note and all notices of every
kind are hereby waived by all parties to this Note, whether the
undersigned, principal, surety, guarantor or endorser, except as
provided herein. To the extent permitted by applicable law, the
defense of the statute of limitations is hereby waived by the
undersigned.
12. Principal and interest evidenced hereby are
payable only in lawful money of the United States. The receipt of
a check shall not, in itself, constitute payment hereunder unless
and until paid in good funds.
[this space intentionally left blank]
<PAGE>
13. This Note is to be governed by and construed in
accordance with the laws of the State of California except to the
extent United States federal law permits the holder to contract
for, charge or receive a greater amount of interest. In any
action brought under or arising out of this Note, the undersigned
hereby consents to the in personam jurisdiction of any state or
federal court sitting in Los Angeles, California, waives any
claim or defense that such forum is not convenient or proper, and
consents to service of process by any means authorized by
California law.
14. THE UNDERSIGNED HEREBY WAIVES, AND COVENANTS THAT
THE UNDERSIGNED WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT
OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT
OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
OUT OF OR BASED UPON THIS NOTE, THE SUBJECT MATTER HEREOF OR ANY
DOCUMENT RELATING HERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING OR WHETHER IN CONTRACT OR IN TORT OR OTHERWISE.
PAYOR
LH EVANS, LLC, a Delaware Limited
liability company
By: LH Elba, Inc., a California
corporation, its Member
By: /s/ ROBERT E. LEWIS
-----------------------
Robert E. Lewis, its
President
<PAGE>
EXHIBIT "A"
to Collateralized and Guaranteed Promissory Notes
1. Payor: LH Evans, LLC
2. Payee: LHN Platte, LLC
3. Original Principal: $7,105,527
4. Number of Shares: 239,849
5. Pledgor: Robert E. Lewis
6. Guarantor: Robert E. Lewis
<PAGE>
COLLATERALIZED AND GUARANTEED PROMISSORY NOTE
Los Angeles, California
January 7, 1999
FOR VALUE RECEIVED, the undersigned, the payor listed
as such on Exhibit "A" ("Payor"), promises to pay to the order of
the party listed as "Payee" on Exhibit "A" at Upland, California,
or at such other place as the holder of this Note may from time
to time designate, the principal amount (the "Principal")
specified below, together with interest thereon as specified
below.
1. The Principal shall not bear interest during the
first (90) days of the term of this Note. Commencing upon the
ninety-first (91st) day of the term of this Note, all Fixed
Principal (as ultimately determined below) shall bear interest
at the rate of eight percent (8%) per annum, compounded
annually and computed on the basis of a 360-day year of 30-day
months, until paid in full. Through and including the second
anniversary of this Note, accrued interest shall not be payable
currently; thereafter, interest only (accrued from the second
anniversary of this Note) shall be payable monthly, beginning
February 1, 2002, and the first day of each month thereafter,
with a final installment, consisting of all Fixed Principal
and all accrued but unpaid interest, payable on the fifth
anniversary of this Note. Interest accrued on all Fixed
Principal shall be computed retroactively (to the ninety-first
(91st) day of the term of this Note) upon each portion of
Fixed Principal once the amount of that portion of Fixed
Principal becomes known.
2. The Principal balance of this Note shall vary
from time to time as provided below, and for purposes of
determining the Principal balance of this Note the following
terms shall have the following meanings:
The "Collared Region" shall be the region bounded
as an upper boundary by the Upper Limit (inclusive of that
boundary) and as a lower boundary by the Lower Limit (inclusive
of that boundary).
The "Contingency Period" shall be the period
(inclusive of its boundaries) beginning on the day immediately
following the Initial 90 Days and ending on the earlier of: (i)
the second anniversary of this Note, and (ii) the date on which
all of the Kaufman and Broad Stock has been sold, transferred or
otherwise disposed of by Payor to unaffiliated persons or
entities.
The "Fixed Principal" shall mean any portion(s) of
the Principal of this Note which has (have) become fixed in
amount pursuant to any provision of this Note.
The "Initial 90 Days" shall be the first ninety
(90) days of the term of this Note.
<PAGE>
The "Kaufman and Broad Stock" shall be the common
stock, par value, $1.00 per share, of Kaufman and Broad Home
Corporation, a Delaware corporation, purchased by Payor from
Payee with this Note.
The "Lower Limit" shall be the amount which is
equal to 88.4% of the 90 Day Principal.
The "90 Day Principal" shall be the Principal at
the end of the Initial 90 Days.
The "Original Principal" shall be the amount shown
on Exhibit "A."
The "Recomputed Principal" on any day shall equal
the product of (i) the sum set forth on Exhibit "A" as the
"Number of Shares" and (ii) the closing price on that date (or
the last trading day immediately preceding the date of
determination, if the date of determination is not a trading day)
quoted on the New York Stock Exchange (or any successor exchange
on which such shares shall be listed) for the common stock, par
value $1.00 per share, of Kaufman and Broad Home Corporation, a
Delaware corporation.
The "Upper Limit" shall be the amount which is
equal to 125% (with rounding down to the next lowest cent) of the
90 Day Principal.
3. The Principal of this Note on the date hereof shall
equal the Original Principal. On any day thereafter during the
Initial 90 Days, the Principal of this Note shall equal the
Recomputed Principal on that day. On any day thereafter during
the Contingency Period, the Principal of this Note shall equal
the Recomputed Principal on that day; provided, however, if (i)
the Recomputed Principal on any such day shall exceed the Upper
Limit, then the Principal shall equal the Upper Limit, and (ii)
if the Recomputed Principal on any such day shall be less than
the Lower Limit, then the Principal shall equal the Lower Limit.
4. All Principal of this Note not theretofore fixed
in amount pursuant to any other provision of this Note shall become
fixed (as determined above) on the final day of the Contingency
Period and thereafter shall cease to fluctuate.
5. Notwithstanding anything to the contrary stated
herein, if any portion of the Kaufman and Broad Stock is sold,
transferred or otherwise disposed of ("Sold") by Payor to any
unaffiliated person or entity during the term of this Note, the
following shall apply: (a) that portion of the Principal balance
of this Note evidencing Payor's payment for the Kaufman and Broad
Stock so Sold (the "Sold Shares Principal Amount") shall be fixed
in amount as of the date of that Sale (if it has not already become
fixed pursuant to any other provision of this Note) and shall not
fluctuate thereafter during the remainder of the term of this
Note; and (b) the remaining balance of the Principal of this Note
(i.e. that portion evidencing Payor's payment for the Kaufman and
Broad Stock not Sold by Payor) shall continue to be governed by
the provisions of Sections 2-5 of this Note, mutatis mutandis,
and for these purposes the "Number of Shares" shall be reduced by
the number of shares of the Kaufman and Broad Stock so Sold.
<PAGE>
6. All or any portion of the outstanding Principal of
this Note may be prepaid at any time by Payor, without penalty or
premium, provided only that all interest then accrued but unpaid
thereon is also paid in full at that time. For purposes of
computing the accrued interest so due and payable, the amount
of Principal prepaid shall constitute Fixed Principal as of the
date of prepayment.
7. This Note shall be fully collateralized by a first
lien pledge of assets as more particularly described in a Pledge
Agreement (Stock), of even date herewith, made by the party
identified as the "Pledgor" on Exhibit A, in favor of Payee.
8. The full, prompt and timely payment of this Note
shall be guaranteed by a Guaranty, of even date herewith, by the
party identified as the "Guarantor on Exhibit "A", in favor of
Payee.
9. If this Note is not paid when due, the undersigned
promises to pay all costs and expenses of collection, whether or
not suit is filed hereon; such costs and expenses shall include,
without limitation, all costs, expenses and attorneys' fees actually
incurred by the holder hereof in connection with any insolvency,
bankruptcy, arrangements or other similar proceedings involving
the undersigned which in any way affects the exercise by the
holder hereof of its legal rights and remedies under this Note.
10. No single or partial exercise of any power hereunder
shall preclude other or further exercise thereof or the exercise
of any other power. No delay or omission on the part of the
holder hereof in exercising any right hereunder shall operate as a
waiver of such right or any other right under this Note. The
acceptance of any amount due and payable hereunder shall not
operate as a waiver with respect to any other amount then owing
and unpaid.
11. Presentment, demand, protest, notices of protest,
dishonor and nonpayment of this Note and all notices of every
kind are hereby waived by all parties to this Note, whether the
undersigned, principal, surety, guarantor or endorser, except as
provided herein. To the extent permitted by applicable law, the
defense of the statute of limitations is hereby waived by the
undersigned.
12. Principal and interest evidenced hereby are payable
only in lawful money of the United States. The receipt of a
check shall not, in itself, constitute payment hereunder unless and
until paid in good funds.
[this space intentionally left blank]
<PAGE>
13. This Note is to be governed by and construed in
accordance with the laws of the State of California except to the
extent United States federal law permits the holder to contract
for, charge or receive a greater amount of interest. In any
action brought under or arising out of this Note, the undersigned
hereby consents to the in personam jurisdiction of any state or
federal court sitting in Los Angeles, California, waives any
claim or defense that such forum is not convenient or proper, and
consents to service of process by any means authorized by
California law.
14. THE UNDERSIGNED HEREBY WAIVES, AND COVENANTS THAT
THE UNDERSIGNED WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT
OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT
OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
OUT OF OR BASED UPON THIS NOTE, THE SUBJECT MATTER HEREOF OR ANY
DOCUMENT RELATING HERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING OR WHETHER IN CONTRACT OR IN TORT OR OTHERWISE.
PAYOR
LH EVANS, LLC, a Delaware Limited
liability company
By: LH Elba, Inc., a California
corporation, its Member
By: /s/ ROBERT E. LEWIS
-----------------------
Robert E. Lewis, its
President
<PAGE>
EXHIBIT "A"
to Collateralized and Guaranteed Promissory Notes
1. Payor: LH Evans, LLC
2. Payee: LHE Platte, LLC
3. Original Principal: $24,198,500
4. Number of Shares: 816,827
5. Pledgor: Robert E. Lewis
6. Guarantor: Robert E. Lewis
<PAGE>
