STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement"), dated
as of September 21, 2000, is entered into by and among KAUFMAN
AND BROAD HOME CORPORATION, a Delaware corporation (the
"Company"), and the other signatories hereto listed on the
signature pages to this Agreement (each a "Shareholder" and
collectively the "Shareholders").
WHEREAS, the Company and the Shareholders (or their
predecessors in interest) are parties to that certain Shareholder
Agreement, dated as of January 7, 1999 (the "Shareholder
Agreement"), and that certain Registration Rights Agreement,
dated January 7, 1999 (the "Registration Rights Agreement");
WHEREAS, on the terms and subject to the conditions set
forth in this Agreement, the Shareholders desire to sell, and the
Company desires to purchase, an aggregate of 4,000,000 shares
(the "Shares") of the Company's common stock, par value $1.00 per
share ("Common Stock"), held by the Shareholders; and
WHEREAS, in connection with the sale of the Shares, the
Company and the Shareholders wish to amend the Registration
Rights Agreement and the Shareholder Agreement and enter into the
other agreements contained in this Agreement;
NOW, THEREFORE, upon the premises and the mutual
promises herein contained, and for good and valuable
consideration, the receipt and adequacy of which are
acknowledged, the parties hereby agree as follows:
1. Sale of Shares. Subject to the terms and
conditions of this Agreement, at the Closing the Company shall
buy, and each Shareholder shall sell to the Company, the number
of Shares of Common Stock set forth opposite such Shareholder's
name on Exhibit A hereto for a purchase price of (a) Six Dollars
and Fifty Cents ($6.50) per Share in cash and (b) a promissory
note for Nineteen Dollars and Fifty Cents ($19.50) per Share in
the form attached hereto as Exhibit B (the "Promissory Note," and
together with the promissory notes issued to the other
Shareholders, the "Promissory Notes"). The aggregate purchase
price for all of the Shares shall be Twenty Six Million Dollars
($26,000,000) in cash (the "Cash Purchase Price") and Promissory
Notes with an aggregate principal amount of Seventy Eight Million
Dollars ($78,000,000).
2. Closing. The purchase and sale of Shares
contemplated by this Agreement (the "Closing") will take place at
the offices of Munger, Tolles & Olson LLP at 355 South Grand
Avenue, 35th Floor, Los Angeles, California at 10:00 a.m. (Los
Angeles time) on September 21, 2000. At the Closing,
(a) each Shareholder who is an individual will
deliver to the Company a fully executed and notarized
special power of attorney appointing Robert E. Lewis as such
Shareholder's true and lawful attorney;
(b) each Shareholder that is a corporation or
limited liability company will deliver to the Company an
original of such Shareholder's duly adopted resolutions or a
certified copy of its bylaws or operating agreement
authorizing the sale of the Shares and designating a duly
authorized representative to act on behalf of such
Shareholder;
(c) the Shareholders will deliver to the Company
certificates representing the Shares, accompanied by duly
executed stock powers, with signatures guaranteed by a
participant in the Securities Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Program or
the Stock Exchange Medallion Program, for transfer to the
Company; and
(d) the Company will deliver to each Shareholder
(i) such Shareholder's portion of the Cash Purchase Price
payable by wire transfer in such an amount and pursuant to
the instructions set forth on Exhibit A and (ii) a duly
executed Promissory Note in the principal amount specified
for such Shareholder on Exhibit A.
To the extent that a Shareholder is selling to the Company less
than all of the shares of Common Stock evidenced by a particular
stock certificate, within two business days of the Closing, the
Company shall deliver to any such Shareholder a new certificate
of like tenor evidencing the remaining shares of Common Stock
owned by such Shareholder.
3. Amendments.
(a) Amendment of Registration Rights Agreement.
Effective as of the Closing, Section 2(b)(iii) of the
Registration Rights Agreement shall be amended in its
entirety to read as follows:
"(iii) the Company shall not be obligated to
file a registration statement relating to a registration
request pursuant to this Section 2(b): (A) sooner than
January 1, 2002 (except that the foregoing restriction shall
not apply to a request for registration of Registrable
Securities held by or on behalf of the estate of a deceased
Shareholder, but in such case the Company shall have no
obligation to serve the Request Notice or to include in the
registration any Registrable Securities other than those
held by or on behalf of such estate); (B) for an aggregate
of more than 2,000,000 shares of Common Stock during the six-
month period commencing January 1, 2002 (the "Demand
Period"); (C) more than once in the Demand Period; or (D) if
such registration request (including Registrable Securities
requested to be included in response to a Request Notice) is
for a number of Registrable Securities which have an
aggregate market value less than $10 million."
(b) Amendment of Shareholder Agreement.
Effective as of the Closing, the second sentence of Section
2 of the Shareholder Agreement shall be amended in its
entirety to read as follows:
"The foregoing agreement (the "Voting Agreement")
shall be suspended automatically and become ineffective on
the earliest to occur of the following events: (a) the
aggregate beneficial ownership (whenever used herein, as
defined under Section 13(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) of Common Stock by
the Shareholders becomes less than 2,000,000 shares, (b) the
Board 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, (c) the currently incumbent chief
executive officer of the Company as of September 21, 2000
ceases to hold the office of chief executive officer, or (d)
December 1, 2003."
4. Representations and Warranties of the
Shareholders. Each Shareholder individually represents and
warrants to the Company as of the Closing as follows:
(a) Shareholder has good and marketable title to,
and sole record and beneficial ownership of, the number of
the Shares set forth opposite such Shareholder's name on
Exhibit A hereto, which are to be transferred to the Company
pursuant to this Agreement, free and clear of any and all
covenants, conditions, marital property rights, and other
Encumbrances.
(b) If Shareholder is an entity, Shareholder has
been duly incorporated or formed and is validly existing in
good standing under the laws of its state of incorporation
or formation. Whether an individual or an entity,
Shareholder has the right, power and authority to enter into
this Agreement and any ancillary agreements hereto, to
transfer, convey and sell to the Company at the Closing the
Shares to be sold to the Company by such Shareholder, and
otherwise perform its obligations under this Agreement and
any ancillary agreements. Upon consummation of the Closing,
the Company will acquire from such Shareholder the legal and
beneficial ownership of, and all right to vote and other
rights inhering in the Shares to be sold to the Company by
such Shareholder, free and clear of all covenants,
conditions, marital property rights, or other Encumbrances.
(c) Shareholder is not a party to, subject to or
bound by any Law or Order, and no Action is pending against
Shareholder or, to Shareholder's knowledge, threatened, that
would prevent the execution, delivery or performance of this
Agreement by Shareholder or the transfer, conveyance and
sale of the Shares to be sold by Shareholder to the Company
pursuant to the terms hereof.
(d) This Agreement has been duly authorized by
all necessary corporate, partnership or limited liability
company action on the part of Shareholder, and if
Shareholder is a corporation, partnership or limited
liability company, this Agreement has been executed and
delivered by Shareholder and is a valid and binding
obligation of Shareholder, enforceable against Shareholder
in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
similar laws limiting creditors' rights generally and
equitable principles.
(e) Neither the execution and delivery of this
Agreement, nor the consummation of the transactions
contemplated hereby by Shareholder violates or will violate
or results or will result in a breach of any of the terms
and provisions of, or constitutes or will constitute a
default under any material Contract to which Shareholder is
a party or is bound or which applies to the Shares being
sold, or any Order applicable to Shareholder or to the
Shares being sold.
(f) If and to the extent required, Shareholder
hereby consents to the execution, delivery and performance
of this Agreement by each other Shareholder.
(g) Shareholder will acquire the Promissory Note
for investment for Shareholder's own accounts and not with a
view to or for offer or sale in connection with any
distribution thereof. Shareholder understands that the
Promissory Note will not be registered under the Securities
Act of 1933, as amended (the "Securities Act") or any
applicable state securities laws by reason of a specific
exemption or exception from the registration requirements
thereof which depend upon, among other things, the accuracy
of Shareholder's representations and warranties in this
Section. Shareholder understands that the Promissory Note
will bear a legend substantially to the effect that the
Promissory Note may not be transferred without the prior
consent of the Company (which shall not be unreasonably
withheld) and has not been registered under the Securities
Act or any applicable state securities laws and may be
offered and sold only if so registered or upon delivery to
the Company of an opinion of counsel that an exemption or
exception from such registration is applicable.
(h) Shareholder acknowledges receipt of all
information requested from the Company and considered by
Shareholder to be necessary or appropriate for deciding
whether to sell the Shares and acquire the Promissory Note
pursuant to this Agreement, including, without limitation,
any documents filed by the Company with the Securities and
Exchange Commission. Shareholder is an "accredited
investor" within the meaning of Rule 501(a) under the
Securities Act or has such knowledge and experience in
financial and business matters that Shareholder is capable
of evaluating the merits and risks of, and Shareholder is
able to bear the economic risks of, selling such Shares of
Common Stock and acquiring such Shareholder's interest in
the Promissory Note. Shareholder has had the opportunity to
ask questions and receive answers regarding the terms and
conditions of the sale of the Shares and the acquisition of
an interest in the Promissory Note pursuant to this
Agreement, and Shareholder is satisfied with the
responsiveness and adequacy of such answers. Shareholder
understands and acknowledges that events or circumstances
may occur after the date hereof that may be favorable or
unfavorable to the Company's earnings, business affairs or
operations, and that such events or circumstances may result
in changes in the fair market value of the Shares.
5. Representations and Warranties of the Company.
The Company represents and warrants to each Shareholder as of the
Closing as follows:
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware. The Company has all necessary corporate
power and authority to carry on its business as now being
conducted. The Company has the necessary corporate power
and authority to execute, deliver and perform this Agreement
and the Promissory Notes.
(b) The purchase of the Shares and the issuance
of the Promissory Notes have been duly and validly
authorized by the Board of Directors of the Company and by
all other necessary corporate action on the part of the
Company. This Agreement and the Promissory Notes have been
duly executed and delivered by the Company and constitute
the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their
respective terms except as may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar
laws relating to or limiting creditors' rights generally and
equitable principles.
(c) The execution, delivery and performance of
this Agreement by the Company and the issuance of the
Promissory Notes will not violate the provisions of, or
constitute a breach or default (whether upon lapse of time
and/or the occurrence of any act or event or otherwise)
under (a) the certificate of incorporation or bylaws of the
Company, (b) any Law or Order to which the Company is
subject or (c) any Contract to which the Company is a party
that is material to the financial condition, results of
operations or conduct of the business of the Company. The
execution and delivery of this Agreement by the Company and
the performance of this Agreement by the Company will not
require a filing or registration with, or the issuance of
any Permit or Approval by, any other third party or
Governmental Entity.
(d) There is no Order or Action pending or to the
knowledge of the Company, threatened against or affecting
the Company that individually or when aggregated with one or
more other Actions has or might reasonably be expected to
have a material adverse effect on the Company's ability to
perform this Agreement or the Promissory Notes.
(e) The Company is acquiring the Shares from the
Shareholders for the Company's own accounts for investment
purposes only and not with a view to or for sale in
connection with the public distribution thereof.
6. Certain Defined Terms. Any capitalized term used
in Section 4 or Section 5 of this Agreement but not defined in
this Agreement shall have the meaning assigned to such term in
the Purchase Agreement, as amended on January 7, 1999, among the
Company and the Sellers named therein, for the purchase and sale
of the homebuilding business of the homebuilding entities of the
Lewis Homes group of companies.
7. Miscellaneous.
(a) Injunctions. Each party acknowledges and
agrees that irreparable damage would occur in the event that
any of the provisions of this Agreement was not performed in
accordance with its specific terms or was otherwise
breached. Therefore, each party shall be entitled to an
injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically the
terms and provisions hereof in any court having
jurisdiction, such remedy being in addition to any other
remedy to which such party may be entitled at law or in
equity.
(b) Severability. If any term or provision of
this Agreement shall be held by a court of competent
jurisdiction to be invalid, void or unenforceable, the
remainder of the terms and provisions set forth herein shall
remain in full force and effect and shall in no way be
affected, impaired or invalidated, and each of the parties
shall use its best efforts to find and employ an alternative
means to achieve the same or substantially the same result
as that contemplated by such term or provision.
(c) Waivers, etc. No failure or delay on the
part of either party in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a
right or power preclude any other or further exercise
thereof or the exercise of any other right or power. No
modification or waiver of any provision of this Agreement
nor consent to any departure therefrom shall in any event be
effective unless the same shall be in writing and signed by
each of the parties, and then such waiver or consent shall
be effective only in the specific instance and for the
purpose for which given.
(d) Entire Agreement. This Agreement contains
the entire understanding of the parties with respect to its
subject matter. This Agreement supersedes all prior
agreements and understandings between the parties, whether
written or oral, with respect to the subject matter hereof.
The paragraph headings contained in this Agreement are for
reference purposes only, and shall not affect in any manner
the meaning or interpretation of this Agreement.
(e) Counterparts. For the convenience of the
parties, this Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an
original but all of which together shall be one and the same
instrument.
(f) Amendment. This Agreement may be amended
only by a written instrument duly executed by each of the
Company and the Shareholders.
(g) Notices. Any notice or other communication
hereunder must be given in writing and delivered in person
or sent by telecopy, by a nationally-recognized overnight
courier service or by certified or registered mail, postage
prepaid, receipt requested, addressed as follows:
If to the Company, addressed to:
Kaufman and Broad Home Corporation
10990 Wilshire Boulevard
Los Angeles, CA 90024
Attention: Kimberly N. King
Fax No.: (310) 231-4280
with a copy to:
Munger, Tolles & Olson LLP
355 South Grand Avenue
35th Floor
Los Angeles, CA 90071
Attention: Michael O'Sullivan, Esq.
Fax No.: (213) 687-3702
If to the Shareholders, addressed to:
John M. Goodman
Lewis Operating Corp.
1156 N. Mountain Avenue
Upland, CA 91785
Fax No.: (909) 912-6770
with a copy to:
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, CA 90071
Attn: Richard A. Boehmer, Esq.
Fax No.: (213) 430-6407
or to such other address or to such other person as any
party shall have last designated by such notice to the other
party. Each such notice or other communication shall be
effective (i) if given by telecommunication, when
transmitted to the applicable number so specified in (or
pursuant to) this Section 7(g) and an appropriate answer
back is received, (ii) if given by overnight courier for
next business day delivery, one business day following
delivery by sender to such overnight courier, (iii) if given
by mail, three days after such communication is deposited in
the mails with first class postage prepaid, addressed as
aforesaid, or (iv) if given by any other means, when
actually received at such address.
(h) Governing Law. This Agreement and the rights
and obligations of the parties hereunder shall be construed
in accordance with and be governed by the internal laws of
the State of California.
(i) Assignment. Except as provided herein, the
parties may not assign their rights or delegate their
obligations under this Agreement without the prior written
consent of the other parties.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Shareholders and the Company have
executed this Agreement as of the date first above written.
KAUFMAN AND BROAD HOME CORPORATION
By: /S/ WILLIAM R. HOLLINGER
Name: William R. Hollinger
Its: Vice President and
Controller
SHAREHOLDERS
Ralph M. Lewis
By: /S/ RALPH M. LEWIS BY ROBERT E.
LEWIS
Robert E. Lewis, his attorney-in-
fact
Goldy S. Lewis
By: /S/ GOLDY S. LEWIS BY ROBERT E.
LEWIS
Robert E. Lewis, his attorney-in-
fact
LHE PLATTE, LLC
By: Lewis Holding Company, a Delaware
limited liability company, its
member
By: Forehand Development Corp., a
California corporation, its
member
By: /S/ JOHN M.
GOODMAN__________
John M. Goodman, its
Authorized Agent
LH AUGUSTA, LLC
By: /S/ JOHN M. GOODMAN
John M. Goodman, its Authorized
Agent
LH EVANS, LLC
By: /S/ JOHN M. GOODMAN
John M. Goodman, its Authorized
Agent
LH GRUNHORN, LLC
By: /S/ JOHN M. GOODMAN
John M. Goodman, its Authorized
Agent
LH WHITNEY, LLC
By: /S/ JOHN M. GOODMAN
John M. Goodman, its Authorized
Agent
LH JAGERHORN, LLC
By: /S/ JOHN M. GOODMAN
John M. Goodman, its member
<PAGE>
EXHIBIT A
SHAREHOLDERS
<TABLE>
<S> <C> <C> <C> <C>
Shareholder Shareholder Shares Cash Purchase Principal
Wire Instructions Sold (#) Price ($) Amount of
Principal Amount of Promissory
Note ($)
Ralph M. Lewis & Bank: Wells Fargo Bank 45,763 297,459.50 892,378.50
Goldy S. Lewis San Francisco, CA
Credit: Long Beach Trust
Services
WDDA: 4068-000868
Fed Routing #: 121000248
FFC Account #: 219349
LHE Platte, LLC Bank: Wells Fargo Bank 400,000 2,600,000.00 7,800,000.00
San Francisco, CA
Credit: Long Beach Trust
Services
WDDA: 4068-000868
Fed Routing #: 121000248
FFC Account #: 216797
LH Augusta, LLC Bank: Wells Fargo Bank 393,935 2,560,577.50 7,681,732.50
San Francisco, CA
Fed Routing #: 121000248
Account #: 4047-100755
LH Evans, LLC Bank: Wells Fargo Bank 1,719,455 11,176,457.50 33,529,372.50
San Francisco, CA
Credit: Long Beach Trust
Services
WDDA: 4068-000868
Fed Routing #: 121000248
FCC Account #: 220960
LH Grunhorn, LLC Bank: Wells Fargo Bank 149,218 969,917.00 2,909,751.00
San Francisco, CA
Fed Routing #: 121000248
Account #: 4047-100771
LH Whitney, LLC Bank: Wells Fargo Bank 1,134,055 7,371,357.50 22,114,072.50
San Francisco, CA
Credit: Long Beach Trust Services
WDDA: 4068-000868
Fed Routing #: 121000248
FCC Account #: 220969
LH Jagerhorn, LLC Bank: Wells Fargo Bank 157,574 1,024,231.00 3,072,693.00
San Francisco, CA
Fed Routing #: 121000248
Account #: 4047-100797
</TABLE>
