<PAGE> 1
REGISTRATION STATEMENT NO. 333-41316
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
LENNAR CORPORATION
Co-registrants are listed on the following pages
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 1520 59-1281887
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
700 N.W. 107(TH) AVENUE
MIAMI, FLORIDA 33172
(305)559-4000
</TABLE>
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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DAVID B. MCCAIN
VICE PRESIDENT AND GENERAL COUNSEL
700 N.W. 107(TH) AVENUE
MIAMI, FLORIDA 33172
(305) 559-4000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
DAVID W. BERNSTEIN, ESQ.
KATHLEEN L. WERNER, ESQ.
CLIFFORD CHANCE ROGERS & WELLS LLP
200 PARK AVENUE
NEW YORK, NEW YORK 10166
(212) 878-8000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective and all other
conditions to the exchange offer pursuant to the registration rights agreement
described in the enclosed prospectus have been satisfied or waived.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
<TABLE>
<CAPTION>
JURISDICTION OF
INCORPORATION OR I.R.S. EMPLOYER
NAME OF CO-REGISTRANT ORGANIZATION IDENTIFICATION NO.
--------------------- ---------------- ------------------
<S> <C> <C>
BCDC Corp. California 59-3504210
Boca Greens, Inc. Florida 59-1707681
Boca Isles Club, Inc. Florida 65-0406766
Boca Isles South Club, Inc. Florida 65-0456217
Bramalea California, Inc. California 95-3426206
Bramalea California Properties, Inc. California 98-0087244
Bramalea California Realty, Inc. California 59-3504214
Clodine-Bellaire LP, Inc. Nevada 91-1937380
Club Pembroke Isles, Inc. Florida 65-0567595
DCA at Banyan Tree, Inc. Florida 59-2220562
DCA at North Lauderdale, Inc. Florida 59-2308334
DCA at Pembroke Pointe, Inc. Florida 59-2298128
DCA at Wiggins Bay, Inc. Florida 59-1691586
DCA General Contractors Florida 59-0941257
DCA Homes of Central Florida, Inc. Florida 59-2460033
DCA NJ Realty, Inc. New Jersey 22-2242815
DCA of Broward County, Inc. Florida 59-2105872
DCA of Hialeah, Inc. Florida 59-2087720
DCA of Lake Worth, Inc. Florida 59-1863953
DCA of New Jersey, Inc. New Jersey 22-2285266
Devco Land Corp. Florida 59-2375890
Dyeing & Finishing, Inc. Florida 59-2505473
First Atlantic Building Corp. Florida 59-1355591
Greystone Construction, Inc. Arizona 86-0864245
Greystone Homes, Inc. Delaware 93-1070009
Greystone Homes of Nevada, Inc. Delaware 88-0412604
Greystone Nevada, LLC Delaware 88-0412611
Harris County LP, Inc. Nevada 91-1890279
Hillside, Inc. Florida 59-2343135
Inactive Corporations, Inc. Florida 59-1275889
Kings Isle Recreation Corp. Florida 65-0462725
Kings Ridge Golf Corporation Florida 65-0718382
Kings Ridge Recreation Corporation Florida 65-0718384
Kings Wood Development Corporation Florida 65-0766576
Lennar Acquisition Corp. II California 33-0812777
Lennar Communities Development, Inc. Delaware 86-0262130
Lennar Communities, Inc. California 33-0855007
Lennar Construction, Inc. Arizona 86-0972186
Lennar Financial Services, Inc. Florida 65-0774024
Lennar Homes, Inc. Florida 59-0711505
Lennar Homes of Arizona, Inc. Arizona 65-0163412
Lennar Homes of California, Inc. California 93-1223261
Lennar Homes of Texas Land and Construction, Ltd. Texas 75-2792018
Lennar Homes of Texas Sales and Marketing, Ltd. Texas 75-2792019
Lennar La Paz, Inc. California 33-0812776
Lennar La Paz Limited, Inc. California 33-0812775
Lennar Land Partners Sub, Inc. Delaware 65-0776454
Lennar Land Partners Sub II, Inc. Nevada 88-0429001
Lennar Management, Inc. California 65-0626774
Lennar Nevada, Inc. Nevada 88-0401445
</TABLE>
S-1
<PAGE> 3
<TABLE>
<CAPTION>
JURISDICTION OF
INCORPORATION OR I.R.S. EMPLOYER
NAME OF CO-REGISTRANT ORGANIZATION IDENTIFICATION NO.
--------------------- ---------------- ------------------
<S> <C> <C>
Lennar Northland I, Inc. California 33-0805080
Lennar Northland II, Inc. California 33-0821001
Lennar Northland III, Inc. California 33-0821002
Lennar Northland IV, Inc. California 33-0821003
Lennar Northland V, Inc. California 33-0836779
Lennar Northland VI, Inc. California 33-0836810
Lennar Oceanside, LLC California 33-0843358
Lennar Pacific, L.P. Delaware 88-0412610
Lennar Pacific, Inc. Delaware 88-0412608
Lennar Pacific Properties, Inc. Delaware 88-0412607
Lennar Realty, Inc. Florida 59-0866794
Lennar Renaissance, Inc. California 33-0726195
Lennar Sacramento, Inc. California 33-0794993
Lennar Sales Corp. California 95-4716082
Lennar San Jose Holdings, Inc. California 65-0645170
Lennar Southland I, Inc. California 33-0801714
Lennar Southland II, Inc. California 33-0836784
Lennar Southland III, Inc. California 33-0836786
Lennar Southwest Holding Corp. Nevada 91-1933536
Lennar Texas Holding Company Texas 75-2788257
Lennar Title Services, Inc. Florida 65-0764516
Lennar.Com, Inc. Florida 65-0980149
Long Point Development Corp. Texas 76-0587917
Lucerne Greens, Inc. Florida 59-2461739
Lucerne Merged Condominiums, Inc. Florida 65-0576452
M.A.P. Builders, Inc. Florida 59-1908120
M.A.P. Vineyards of Plantation, Inc. Florida 59-2377054
Marlborough Development Corporation California 95-6072804
Midland Housing Industries Corp. California 95-2775081
Midland Investment Corporation California 95-2842301
Mission Viejo Holdings, Inc. California 33-0785862
Mission Viejo 12S Venture, LP California 33-0615197
Monterey Village Development Corp. Florida 59-2343136
Quality Roof Truss Company Florida 59-0933031
Rancho Summit, LLC California 33-0787817
Regency Title Company Texas 76-0499633
Riviera Land Corp. Florida 59-1281470
Savell Gulley Development Corporation Texas 76-0564056
Silver Lakes-Gateway Clubhouse, Inc. Florida 65-0628738
SLTC, Inc. Texas 58-2451020
Strategic Holdings, Inc. Nevada 91-1770357
Strategic Technologies, Inc. Florida 65-0523605
Strategic Technologies Communications of California, Inc. California 95-4149805
Superior Realty & Marketing, Inc. Florida 59-1917965
Universal Title Insurors, Inc. Florida 59-2114706
U.S. Home Corporation (f/k/a Len Acquisition Corporation) Delaware 52-2227619
W. B. Homes, Inc. Florida 59-1212785
</TABLE>
S-2
<PAGE> 4
<TABLE>
<CAPTION>
JURISDICTION OF
INCORPORATION OR I.R.S. EMPLOYER
NAME OF CO-REGISTRANT ORGANIZATION IDENTIFICATION NO.
--------------------- ---------------- ------------------
<S> <C> <C>
Westchase, Inc. Nevada 91-1954138
Brush Masters, Inc. Minnesota 41-1701189
Canterbury Corporation Florida 59-3236245
Countryplace Golf Course, Inc. Texas 76-0270117
E.M.J.V. Corp. Florida 59-3411844
Homecraft Corporation Texas 76-0334090
Imperial Homes Corporation Florida 76-0334117
Lundgren Bros. Construction, Inc. Minnesota 41-0970679
Mid-County Utilities, Inc. Maryland 76-0610395
Oceanpointe Development Corporation Florida 76-0264460
Orrin Thompson Construction Company Minnesota 76-0334101
Orrin Thompson Homes Corp. Minnesota 76-0334105
Paparone Construction Co. New Jersey 76-0334106
Prarie Lake Corporation Florida 76-0529840
Rivenhome Corporation Florida 76-0569346
Rutenberg Homes, Inc. (FL) Florida 76-0340291
Rutenberg Homes, Inc. (TX) Texas 76-0215995
Stoney Corporation Florida 59-3374931
Summerway Investment Corp. Florida 76-0589471
U.S. Home of Arizona Construction Co. Arizona 74-2402824
U.S. Home of Colorado Real Estate, Inc. Colorado 76-0305947
U.S. Home Realty Corporation Florida 76-0327612
U.S. Home Realty, Inc. (MD) Maryland 74-2765031
U.S. Home Realty, Inc. (TX) Texas 76-0136964
U.S.H. Corporation of New York New York 22-1995835
U.S.H. Los Prados, Inc. Nevada 88-0232393
USH Acquisition Corp. Delaware 76-0604353
USH Equity Corporation Nevada 76-0450341
USH Holding, Inc. Delaware 76-0572706
USH Millennium Ventures Corp. Florida 76-0546603
USH/MJR, Inc. Texas 76-0573246
USH (West Lake), Inc. New Jersey 22-3471278
USH Woodbridge, Inc. Texas 76-0561576
Weststone Corporation Florida 74-2944437
</TABLE>
S-3
<PAGE> 5
PROSPECTUS
OFFER TO EXCHANGE 9.95% SERIES B SENIOR NOTES DUE 2010 WHICH HAVE BEEN
REGISTERED UNDER THE
SECURITIES ACT FOR ANY AND ALL OUTSTANDING 9.95% SERIES A SENIOR NOTES DUE 2010
($325,000,000 PRINCIPAL AMOUNT OUTSTANDING AT MATURITY)
OF
LENNAR CORPORATION
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
AUGUST 23, 2000 (UNLESS THE EXCHANGE OFFER IS EXTENDED).
We are offering to exchange our 9.95% series B senior notes due 2010 for
the identical principal amount of our 9.95% series A senior notes due 2010. The
aggregate principal amount at maturity of the series A notes, and therefore the
principal amount at maturity of series B notes which would be issued if all the
series A notes were exchanged, is $325,000,000. The terms of the series B notes
will be identical with the terms of the series A notes, except that the issuance
of the series B notes is being registered under the Securities Act of 1933, as
amended, and therefore the series B notes will not be subject to restrictions on
transfer which apply to the series A notes.
The series A notes were issued in transactions which were exempt from the
registration requirements of the Securities Act solely to qualified
institutional buyers, as that term is defined in Rule 144A under the Securities
Act, or outside the United States in compliance with Regulation S under the
Securities Act. The exchange offer is being made in accordance with a
registration rights agreement dated May 3, 2000 among us, the guarantors named
in the agreement, Deutsche Bank Securities Inc., Banc One Capital Markets, Inc.,
Banc of America Securities LLC, Credit Lyonnais Securities USA Inc., and
Wachovia Securities, Inc. Based on interpretations by the staff of the
Securities and Exchange Commission, we believe a holder (other than a
broker-dealer who acquired series A notes directly from us for resale or an
affiliate of ours) may offer and sell series B notes issued in exchange for
series A notes without registration under the Securities Act and without the
need to deliver a prospectus, if the holder acquired the series B notes in the
ordinary course of its business and the holder has no arrangement to
participate, and is not otherwise engaged, in a distribution of the series B
notes.
Prior to the exchange offer, there has been no public market for the series
B notes. We do not currently intend to list the series B notes on a securities
exchange or seek approval for quotation of the series B notes on an automated
quotation system. Therefore, it is unlikely that an active trading market for
the series B notes will develop.
The exchange agent for the exchange offer is Bank One Trust Company, N.A.
SEE "RISK FACTORS," WHICH BEGIN ON PAGE 11, FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN EVALUATING THE EXCHANGE OFFER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is July 19, 2000.
<PAGE> 6
AVAILABLE INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form S-4 under the Securities Act with respect to the securities
offered by this prospectus. This prospectus, which constitutes a part of the
registration statement, does not contain all the information set forth in the
registration statement and the exhibits and schedules to it. We are subject to
the informational requirements of the Securities Exchange Act of 1934, as
amended, and in accordance with it we file periodic reports and other
information with the commission relating to our business, financial statements
and other matters. The registration statement, its schedules and exhibits and
the periodic reports and other information filed by us with the commission are
available for inspection and copying at the public reference facilities
maintained by the commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the commission's regional offices located
at Citicorp Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois 60661,
and 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of such
materials can be obtained at prescribed rates by addressing written requests for
such copies to the Public Reference Section of the commission at its principal
office at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549. The commission also maintains a web site that contains reports, proxy and
information statements and other information regarding registrants. The
commission's web site can be accessed on the internet at http://www.sec.gov.
Our obligations under the Exchange Act to file periodic reports and other
information with the commission may be suspended, under certain circumstances,
if our Common Stock and series B notes are each held of record by fewer than 300
holders at the beginning of any fiscal year and are not listed on a national
securities exchange. We have agreed that, whether or not we are required to do
so by the rules and regulations of the commission, for so long as any of the
series B notes remain outstanding we will furnish to the holders of the series B
notes, and if required by the Exchange Act, file with the commission, all
annual, quarterly and current reports that we are or would be required to file
with the commission pursuant to Section 13(a) or 15(d) of the Exchange Act. In
addition, we have agreed that, as long as any the series A notes remain
outstanding, we will make the information required by Rule 144A(d)(4) under the
Securities Act available to any prospective purchaser of series A notes or
beneficial owner of series A notes in connection with a sale of them.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. IF GIVEN OR
MADE, THAT INFORMATION OR THOSE REPRESENTATIONS MAY NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY US. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO OR
SOLICITATION OF ANY PERSON IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR
SOLICITATION WOULD BE UNLAWFUL.
ii
<PAGE> 7
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the more
detailed information and the financial statements, including the notes to them,
appearing elsewhere, or incorporated by reference, in this prospectus.
LENNAR
We have been selling and building single family homes to first-time,
first-time move-up, second-time move-up, active adults and others for over 40
years. We currently operate in 13 states, including Florida, California, Texas,
Arizona and Nevada. According to data from the Bureau of the Census, these five
states accounted for approximately 33% of residential building permits issued in
the United States during 1999.
Our revenues from homebuilding operations increased to $2.8 billion in
fiscal 1999 from $666 million in fiscal 1995, which represents a compound annual
growth rate of 44%. Over the same period, our earnings before interest and
taxes, referred to as "EBIT," grew to $334 million from $135 million, a compound
annual growth rate of 26%. We delivered 12,589 homes in fiscal 1999 compared
with 10,777 homes in fiscal 1998 and 4,680 homes in fiscal 1995. At February 29,
2000, the dollar value of our backlog of homes under contract totaled $773
million (3,238 homes), compared with $934 million (4,590 homes) at February
28,1999.
Our financial services subsidiaries provide mortgage financing, title
insurance and closing services to people who buy our homes and others. These
subsidiaries also package and resell mortgage loans, perform mortgage loan
servicing activities and provide cable television and alarm monitoring services
to residents of our communities and others. Our subsidiaries sell their loans in
the secondary mortgage market, but usually retain the servicing rights. In
fiscal 1999, we originated $2.2 billion of mortgage loans compared with $1.0
billion in the prior year. Approximately 51% of the loans we originated in
fiscal 1999 were to persons buying our homes compared with 77% in fiscal 1998.
BUSINESS STRATEGY
We use a number of strategies to grow our business. They include the
following:
- Acquire Land at Advantageous Prices
- Grow Through Acquisitions
- Focus on Fastest Growing Housing Markets
- Generate Earnings from Financial Services Subsidiaries
- Focus on Customer Care and Satisfaction
ACQUISITION OF U.S. HOME
OVERVIEW
In May, 2000, we acquired U.S. Home, another of the nation's largest
homebuilders, through a merger in which the U.S. Home stockholders received a
total of approximately $243.4 million in cash and 13 million shares of our
common stock. The transaction was approved at meetings of the stockholders of
each company held on April 28, 2000. Upon completion of the transaction, U.S.
Home became our wholly-owned subsidiary. U.S. Home is primarily a homebuilder.
In 1999, U.S. Home had total revenues of $1.82 billion, earnings before
interest, taxes, depreciation and amortization, referred to as "EBITDA", of $177
million, net income of $72 million and delivered 9,069 homes during that year
(excluding joint venture activities).
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<PAGE> 8
Based on reported financial results, a combined Lennar and U.S. Home would
have been the nation's largest publicly-traded homebuilder in 1999 based on
homebuilding revenues, domestic homes delivered and EBITDA. On a pro forma
combined basis, we and U.S. Home would have reported revenues of $4.9 billion
and EBITDA of $551 million in 1999.
BENEFITS OF THE U.S. HOME ACQUISITION
We believe that our acquisition of U.S. Home combines two companies with
complementary operations and cultures and provides us with significant benefits.
In particular, we believe the acquisition will:
- STRENGTHEN OUR MARKET POSITION IN THE FASTEST GROWING HOUSING
MARKETS. The U.S. Home acquisition will enhance our competitive position
in markets where we both currently build homes, including Florida,
California, Arizona, Texas and Nevada. These states collectively
accounted for approximately 33% of all residential building permits
issued in the United States in 1999.
- BROADEN OUR GEOGRAPHIC DIVERSITY INTO ATTRACTIVE, NEW MARKETS. As a
result of the acquisition, we will have operations in a number of
attractive markets that we do not currently serve, including Colorado,
Maryland/Virginia, Minnesota and New Jersey.
- EXPAND OUR PRODUCT OFFERING. Lennar and U.S. Home have different
marketing strategies. Lennar sells its homes on an "Everything's
Included(SM)" basis (most popular options and upgrades are included as
standard, with limited ability to select additional options), while U.S.
Home runs a design studio program in each of its major markets with
options for its buyers. These two complementary programs can be expanded
into each other's respective communities to provide customers with a
broader product offering.
- INCREASE OUR EXPERTISE AND FOCUS ON RETIREMENT/ACTIVE ADULT MARKET
SEGMENT. U.S. Home generates a greater proportion of its home sales from
the attractive retirement/active adult market segment, one of the fastest
growing demographic segments of the population. On a combined pro forma
basis for fiscal 1999, 13% of the combined company's homes would have
been delivered to the retirement/active adult segment, versus 5% for
Lennar on a stand-alone basis.
NEW DEBT FINANCING AND TENDER OFFER FOR U.S. HOME PUBLIC DEBT
As a result of the merger, holders of approximately $525 million of
publicly held U.S. Home debt securities have the right to require U.S. Home to
repurchase that debt at 101% of its principal amount within 90 days after the
merger takes place. In addition, as a result of the transaction, the outstanding
balance under U.S. Home's principal credit agreement became due. At the closing
date of the acquisition, the outstanding balance under this credit agreement was
$210 million.
We entered into $1.4 billion of secured credit facilities on May 3, 2000,
which we have used or will use to purchase U.S. Home's public debt, refinance
our and U.S. Home's principal credit lines, for merger related purposes and for
our (including U.S. Home's) ongoing operating and general corporate needs. The
$1.4 billion of senior secured credit facilities include two revolving credit
facilities and a term loan. For a more complete description of the terms of the
new debt financing, see "Description of New Senior Secured Credit Facilities" on
page 28.
We also completed a cash tender offer for the approximately $525 million of
publicly held U.S. Home debt securities on May 3, 2000. We purchased an
aggregate of approximately $502 million of U.S. Home's public debt securities
through the tender offer. As part of the tender offer, we also solicited
consents to amend the indentures under which the U.S. Home debt securities were
issued. The amendments effectively removed all of the covenants from the
indentures, other than the covenants to pay principal and interest and to
repurchase the debt following a change in control. The amendments also permit
U.S. Home and substantially all of its subsidiaries to guarantee the notes. We
paid 101% of the principal amount of debt securities tendered, plus a payment
for consents to the proposed indenture amendments ranging from
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<PAGE> 9
$5.00 to $15.00 per $1,000 principal amount of debt securities tendered,
depending upon when the securities were tendered and which series of debt
security was tendered. Supplemental indentures giving effect to the amendments
to U.S. Home's indentures have been signed and those amendments became operative
concurrently with the sale of the notes. We used proceeds from the offering and
from the new bank financing to pay the costs of our tender offer and consent
solicitation.
The table below sets forth the sources and uses of funds to complete our
acquisition of U.S. Home, including the sale of the series A notes and the
secured credit facilities.
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SOURCES OF FUNDS AMOUNT
---------------- ------
(IN MILLIONS)
<S> <C>
Revolving Credit Facilities................................. $ 939
Term Loan B................................................. 400
9.95% Senior Notes due 2010 (net of $25 discount)........... 300
Value of Lennar stock issued to U.S. Home shareholders(1)... 267
------
Total............................................. $1,906
======
</TABLE>
<TABLE>
<S> <C>
Cash portion of merger consideration........................ $ 243
Stock portion of merger consideration(1).................... 267
Refinance Lennar homebuilding bank debt..................... 617
Refinance U.S. Home homebuilding bank debt.................. 210
Purchase U.S. Home public debt at 101% of principal amount
plus consent fees......................................... 514
Merger and financing expenses............................... 55
------
Total............................................. $1,906
======
</TABLE>
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(1) We acquired U.S. Home through a merger in which U.S. Home's stockholders
received approximately $243 million in cash and 12,978,320 shares of our
common stock (which for financial statement reporting purposes, Lennar
recorded at a value of approximately $20.56 per share).
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<PAGE> 10
ISSUANCE OF THE OLD NOTES
The outstanding $325 million principal amount at maturity of 9.95% Series A
Senior Notes due 2010 were sold by us to Deutsche Bank Securities Inc., Banc One
Capital Markets, Inc., Bank of America Securities LLC, Credit Lyonnais
Securities USA Inc. and Wachovia Securities, Inc., as Initial Purchasers on May
3, 2000 pursuant to a Purchase Agreement, dated April 28, 2000, between the
Initial Purchasers and us. The Initial Purchasers subsequently resold the Series
A notes in reliance on Rule 144A under the Securities Act and other available
exemptions under the Securities Act. We and the Initial Purchasers also entered
into a registration rights agreement pursuant to which we agreed to offer to
exchange the Series B notes which are registered under the Securities Act for
the Series A notes and also granted holders of Series A notes rights under some
circumstances to have resales of Series A notes registered under the Securities
Act. The exchange offer is intended to satisfy certain of our obligations under
the registration rights agreement. See "The Exchange Offer -- Purpose and
Effects."
The Series A notes were issued under an indenture dated as of May 3, 2000,
between Lennar and Bank One Trust Company, N.A., as trustee. The Series B notes
also are being issued under the indenture and are entitled to the benefits of
the indenture. The form and terms of the Series B notes will be identical in all
material respects with the form and terms of the Series A notes, except that (1)
the Series B notes will have been registered under the Securities Act and,
therefore, will not bear legends describing restrictions on transferring them,
and (2) holders of Series B notes will not be, and upon the consummation of the
exchange offer, holders of Series A notes will no longer be, entitled to certain
rights under the registration rights agreement intended for the holders of
unregistered securities. The exchange offer shall be deemed consummated upon the
delivery by us to the exchange agent under the indenture of Series B notes in
the same aggregate principal amount as the aggregate principal amount of Series
A notes that are validly tendered by holders of them in response to the exchange
offer. See "The Exchange Offer -- Termination of Certain Rights" and
"-- Procedures for Tendering" and "Description of the Series B Notes."
The proceeds we received from the issuance of the Series A notes were used
to purchase a portion of U.S. Home's outstanding 7.95% Senior Notes due 2001,
8.25% Senior Notes due 2004, 7 3/4% Senior Notes due 2005, 8.88% Senior
Subordinated Notes due 2007, and 8.875% Senior Subordinated Notes due 2009, that
were tendered in response to our completed offer and consent solicitation, and
to pay associated costs and expenses. We will receive no proceeds from the
exchange of Series B notes for the Series A notes pursuant to the exchange
offer.
THE EXCHANGE OFFER
The Exchange Offer......... We are offering to exchange our 9.95% Series B
senior notes due 2010 for identical principal
amounts of our 9.95% Series A senior notes due
2010. At the date of this prospectus, $325 million
principal amount at maturity of Series A senior
notes are outstanding. See "The Exchange
Offer -- Terms of the Exchange Offer."
Expiration of Exchange
Offer...................... 5:00 p.m., New York time, on August 23, 2000,
unless the exchange offer is extended (the day on
which the exchange offer expires being the
expiration date). See "The Exchange
Offer -- Expiration Date; Extension; Termination;
Amendments."
Conditions of the Exchange
Offer...................... The exchange offer is not conditioned upon any
minimum principal amount of Series A notes being
tendered for exchange. However, the exchange offer
is subject to certain customary conditions, which
we may waive. See "The Exchange Offer -- Conditions
of the Exchange Offer."
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<PAGE> 11
Accrued Interest on the
Series A Notes............. The Series B notes will bear interest at the rate
of 9.95% per annum from and including their date of
issuance. When the first interest payment is made
with regard to the Series B notes, we will also pay
interest on the Series A notes which are exchanged,
from the date they were issued or the most recent
interest date on which interest had been paid (if
applicable) to, but not including, the day the
Series B notes are issued. Interest on the Series A
notes which are exchanged will cease to accrue on
the day prior to the day on which the Series B
notes are issued. The interest rate on the Series A
notes may increase under certain circumstances if
we are not in compliance with our obligations under
the registration rights agreement. See "Description
of the Series B Notes."
Procedures for Tendering
Series A Notes........... A holder of Series A notes who wishes to accept the
exchange offer must complete, sign and date a
letter of transmittal, or a facsimile of one, in
accordance with the instructions contained under
"The Exchange Offer -- Procedures for Tendering"
and in the letter of transmittal, and deliver the
letter of transmittal, or facsimile, together with
the Series A notes and any other required
documentation to the exchange agent at the address
set forth in "The Exchange Offer -- Exchange
Agent." Series A notes may be delivered physically
or by confirmation of book-entry delivery of the
Series A notes to the exchange agent's account at
The Depository Trust Company ("DTC"). By executing
a letter of transmittal, a holder will represent to
us that, among other things, the person acquiring
the Series A notes will be doing so in the ordinary
course of the person's business, whether or not the
person is the holder, that neither the holder nor
any other person is engaged in, or intends to
engage in, or has an arrangement or understanding
with any person to participate in, the distribution
of the Series B notes and that neither the holder
nor any such other person is an "affiliate," as
defined under Rule 405 of the Securities Act, of
ours. Each broker or dealer that receives Series B
notes for its own account in exchange for Series A
notes which were acquired by the broker or dealer
as a result of market-making activities or other
trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale
of the Series B notes. See "The Exchange
Offer -- Procedures for Tendering" and "Sales of
Series B Notes Received by Broker-Dealers."
Guaranteed Delivery
Procedures Eligible holders of Series A notes who wish to
tender their Series A notes and (1) whose Series A
notes are not immediately available or (2) who
cannot deliver their Series A notes or any other
documents required by the letter of transmittal to
the exchange agent prior to the expiration date (or
complete the procedure for book-entry transfer on a
timely basis), may tender their Series A notes
according to the guaranteed delivery procedures
described in the letter of transmittal. See "The
Exchange Offer -- Guaranteed Delivery Procedures."
Acceptance of Series A
Notes and Delivery of
Series B
Notes.................... Upon satisfaction or waiver of all conditions to
the exchange offer, we will accept any and all
Series A notes that are properly tendered in
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<PAGE> 12
response to the exchange offer prior to 5:00 p.m.,
New York City time, on the expiration date. The
Series B notes issued pursuant to the exchange
offer will be delivered promptly after acceptance
of the Series A notes. See "The Exchange Offer --
Procedures for Tendering."
Withdrawal Rights.......... Tenders of Series A notes may be withdrawn at any
time prior to 5:00 p.m., New York City time, on the
expiration date. See "The Exchange Offer --
Withdrawal of Tenders."
The Exchange Agent......... Bank One Trust Company, N.A. is the exchange agent.
The address and telephone number of the exchange
agent are set forth in "The Exchange
Offer -- Exchange Agent."
Fees and Expenses.......... We will bear all expenses incident to our
consummation of the exchange offer and compliance
with the registration rights agreement. We will
also pay any transfer taxes which are applicable to
the exchange offer (but not transfer taxes due to
transfers of Series A notes or Series B notes by
the holder). See "The Exchange Offer -- Fees and
Expenses."
Resales of the Series B
Notes...................... Based on interpretations by the staff of the
commission set forth in no-action letters issued to
third parties, we believe Series B notes issued
pursuant to the exchange offer in exchange for
Series A notes may be offered for resale, resold
and otherwise transferred by the holder (other than
(1) a broker-dealer who purchased the Series A
notes directly from us for resale pursuant to Rule
144A under the Securities Act or another exemption
under the Securities Act or (2) a person that is an
affiliate of ours, as that term is defined in Rule
405 under the Securities Act, without registration
or the need to deliver a prospectus under the
Securities Act, provided that the holder is
acquiring the Series B notes in the ordinary course
of business and is not participating, and has no
arrangement or understanding with any person to
participate, in a distribution of the Series B
notes. Each broker-dealer that receives Series B
notes for its own account in exchange for Series A
notes which Series A notes were acquired by the
broker as a result of market-making or other
trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale
of the Series B notes. See "The Exchange Offer --
Purpose and Effects" and "Sales of Series B Notes
Received By Broker-Dealers."
THE SERIES B NOTES
The exchange offer applies to $325 million aggregate principal amount at
maturity of Series A notes. The terms of the Series B notes are identical in all
material respects with those of the Series A notes, except for certain transfer
restrictions and rights relating to the exchange of the Series A notes for
Series B notes. The Series B notes will evidence the same debt as the Series A
notes and will be entitled to the benefits of the indenture under which both the
Series A notes were, and the Series B notes will be, issued. See "Description of
the Series B Notes."
Securities Offered......... $325,000,000 aggregate principal amount at maturity
of 9.95% senior notes due 2010.
Maturity Date.............. May 1, 2010.
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<PAGE> 13
Interest Payment Dates..... Payable semi-annually on June 1 and December 1 of
each year, beginning on December 1, 2000.
Sinking Fund............... None.
Ranking.................... The notes are our senior unsecured obligations.
They have the same priority as all our other
unsecured and unsubordinated indebtedness. However,
the notes are in effect subordinate to the
obligations of our subsidiaries who are not
guarantors and to our obligations and our
guarantors' obligations that are secured to the
extent of the security. As of February 29, 2000,
giving pro forma effect to the transactions
described under "Capitalization," we would have had
approximately $2.1 billion of total indebtedness
outstanding. Of that indebtedness, $1.8 billion was
home building indebtedness substantially all of
which was secured indebtedness.
Guarantees................. Substantially all of our existing subsidiaries,
other than our mortgage and title reinsurance
subsidiaries, will guarantee the notes.
Optional Redemption........ We cannot redeem the notes until May 1, 2005,
except with proceeds of public or private equity
offerings as described below. Thereafter, we may
redeem some or all of the notes at the redemption
prices set forth in this prospectus, plus accrued
interest.
Optional Redemption after
Equity Offerings......... At any time (which may be more than once) on or
before May 1, 2003, we may redeem up to 35% of the
outstanding notes with money that we raise in one
or more public or private equity offerings, as long
as:
- we pay 109.95% of the face amount of the notes,
plus accrued interest;
- we redeem the notes within 60 days of completing
the equity offering; and
- at least 65% of the aggregate principal amount of
the originally issued notes remain outstanding.
Change in Control Offer.... If a change in control of our company occurs, we
must give holders of the notes the opportunity to
sell us their notes at 101% of their face amount,
plus accrued interest.
We might not be able to pay you the required price
for notes you present to us at the time of a change
in control, because:
- we might not have enough funds at that time; or
- the terms of our other debt may prevent us from
buying the notes presented.
Certain Indenture
Provisions................. The indenture governing the notes will contain
covenants that, among other things, limit our and
substantially all our subsidiaries' ability to:
- incur indebtedness;
- pay dividends or make other distributions;
- repurchase equity interests or subordinated
indebtedness;
- make certain other restricted payments;
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<PAGE> 14
- enter into certain transactions with affiliates;
- use the net proceeds from sales of certain of our
assets;
- merge or consolidate with another person; or
- sell, lease or otherwise dispose of all or
substantially all of our assets.
These covenants are subject to a number of
important limitations and exceptions. In addition,
several of the covenants will cease to apply during
any period that the notes achieve and maintain
specified credit ratings.
Maximum Principal Amount of
Notes.................... The notes are limited in aggregate principal amount
to $525,000,000, of which $325,000,000 were issued
in the offering of the Series A notes.
Risk Factors............... An investment in the notes involves substantial
risks. See "Risk Factors" for a description of
certain risks you should consider before making or
continuing an investment in the notes.
USE OF PROCEEDS
We will receive no proceeds from the exchange of Series B notes for Series
A notes pursuant to the exchange offer. The net proceeds we received from the
sale of the Series A notes were used, together with funds from our senior
secured credit facilities, to purchase U.S. Home's outstanding 7.95% Senior
Notes due 2001, 8.25% Senior Notes due 2004, 7 3/4% Senior Notes due 2005, 8.88%
Senior Subordinated Notes due 2007, and 8.875% Senior Subordinated Notes due
2009, that were tendered in response to our completed offer and consent
solicitation, and to pay associated costs and expenses.
ABSENCE OF PUBLIC MARKET
The Series B notes will be new securities for which there is no established
trading market. We currently do not intend to list the Series B notes on any
securities exchange or to arrange for the Series B notes to be quoted on any
quotation system. Although the Initial Purchasers have informed us that they
currently intend to make a market in the notes, they are not obligated to do so
and they may discontinue market-making activity at any time without notice. In
addition, market-making activities may be limited during the exchange offer or
the pendency of a shelf registration statement required by the registration
rights agreement, if it is filed. Accordingly, it is not likely that an active
trading market for the Series B notes will develop or, if such a market
develops, that it will provide significant liquidity to holders of notes.
8
<PAGE> 15
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA
The following table presents our and our subsidiaries unaudited pro forma
combined condensed financial data. The unaudited pro forma data presented below
reflect the operations of Lennar and U.S. Home at and for the three months ended
February 29, 2000, in the case of Lennar, and March 31, 2000, in the case of
U.S. Home, and at and for the year ended November 30, 1999, in the case of
Lennar, and December 31, 1999, in the case of U.S. Home. The pro forma as
adjusted data presented below gives effect to the transactions described under
"Capitalization" on page 21 of this prospectus. This data is not necessarily
indicative of the results that would have been obtained if those transactions
had been consummated at the beginning of the periods presented (in the case of
income statement items) or at the date of the balance sheet (in the case of
balance sheet items), or that may be obtained in the future.
<TABLE>
<CAPTION>
QUARTER
ENDED YEAR ENDED
FEBRUARY 29,/ NOVEMBER 30,/
MARCH 31, DECEMBER 31,
2000 1999
------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
PRO FORMA COMBINED CONDENSED REVENUE AND EBITDA DATA:
Revenues:
Homebuilding.............................................. $1,048,337 4,637,957
Financial services........................................ $ 69,528 307,776
Total revenues.................................... $1,117,865 4,945,733
EBITDA(1):
Homebuilding EBITDA....................................... $ 93,016 493,540
Consolidated EBITDA(2).................................... $ 100,731 550,581
DELIVERY AND YEAR-END BACKLOG INFORMATION (EXCLUDING JOINT
VENTURES):
Number of homes delivered in the period (units)............. 4,645 21,658
Backlog of home sales contracts (units)(3).................. 8,619 7,234
Dollar value of backlog(3).................................. $1,995,069 1,598,557
PRO FORMA AS ADJUSTED COMBINED CONDENSED BALANCE SHEET DATA:
Homebuilding debt........................................... $1,764,854 1,563,777
Financial services debt(4).................................. $ 286,651 362,119
Total debt.................................................. $2,051,505 1,925,896
Stockholders' equity........................................ $1,017,120 976,597
OTHER PRO FORMA AS ADJUSTED FINANCIAL DATA:
Ratio of Earnings to Fixed Charges(5)....................... 2.1x 3.4x
Consolidated EBITDA to cash interest incurred(2)(6)......... 2.6x 3.7x
Homebuilding EBITDA to cash interest incurred(6)............ 2.4x 3.3x
Homebuilding debt as a percentage of total
capitalization(7)......................................... 63.4% 61.6%
</TABLE>
---------------
(1) EBITDA is defined as earnings before interest, taxes, depreciation and
amortization expenses but is not a GAAP concept. Our method of calculating
EBITDA may differ from methods used by other corporations and so our EBITDA
results may not be comparable to EBITDA results of other corporations.
EBITDA should not be considered as an alternative to net income (determined
in accordance with GAAP) as an indicator of our financial performance or as
an alternative to cash flow from operating activities (determined in
accordance with GAAP) as a measure of our liquidity, nor is it indicative of
funds available to fund our cash needs, including our ability to pay
dividends.
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<PAGE> 16
(2) Consolidated EBITDA includes financial services operating earnings before
financial services depreciation and amortization. We do not add back
interest expense of our financial services subsidiaries to calculate
consolidated EBITDA.
(3) Backlog is the number of homes subject to pending sales contracts. Although
contracts relating to these homes were executed, there can be no assurance
that the sales will be completed.
(4) Financial services debt is nonrecourse to our parent company and our
homebuilding subsidiaries.
(5) For the purpose of calculating the ratio of earnings to fixed charges,
"earnings" consist of income from continuing operations before income taxes
plus "fixed charges" and certain other adjustments. "Fixed charges" consist
of interest incurred on all indebtedness related to continuing operations
(including amortization of original issue discount) and the implied interest
component of our rent obligations in the periods presented.
(6) Cash interest incurred represents interest incurred excluding noncash
accretion of original issue discount on our Zero Coupon Senior Convertible
Debentures due 2018 and other noncash amortization. Interest incurred
excludes all interest on financial services debt.
(7) Total capitalization for purposes of this ratio represents homebuilding debt
and stockholders' equity.
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<PAGE> 17
RISK FACTORS
The following factors should be given particular consideration by people
considering an investment in the notes.
WE ARE SUBJECT TO THE CYCLICAL NATURE OF THE HOMEBUILDING MARKET AND OTHER
PROBLEMS THAT AFFECT HOMEBUILDERS
The residential homebuilding industry is cyclical and is highly sensitive
to changes in general economic conditions, such as employment levels, consumer
confidence, consumer demand for housing, consumer income and interest rate
levels, and to changes in the availability of financing for construction and
acquisitions. Sales of new homes are also affected by the condition of the
resale market for used homes, including foreclosed homes.
The residential homebuilding industry has, from time to time, experienced
fluctuating lumber prices and supply, as well as shortages of labor and other
materials, including insulation, drywall, concrete, carpenters, electricians and
plumbers. Delays in construction of homes due to these factors or to inclement
weather conditions could have an adverse effect upon our operations.
Inflation can increase the cost of homebuilding materials, labor and other
construction related costs. Conversely, deflation can reduce the value of
homebuilders' inventories and can make it more difficult to include the full
cost of previously purchased land in home sale prices.
OUR BUSINESS CAN BE SUBSTANTIALLY AFFECTED BY THE COST AND AVAILABILITY OF HOME
MORTGAGE FINANCING
Most home buyers obtain mortgage loans to finance a substantial portion of
the purchase price of their homes. In general, housing demand is adversely
affected by increases in interest rates, housing costs and unemployment and by
decreases in the availability of mortgage financing. In addition, there have
been discussions of possible changes in the federal income tax laws which would
remove or limit the deduction for home mortgage interest. If effective mortgage
interest rates increase and the ability or willingness of prospective buyers to
finance home purchases is adversely affected, our operating results may also be
negatively affected. Our homebuilding activities also are dependent upon the
availability and cost of mortgage financing for buyers of homes owned by
potential customers permitting those customers to sell their existing homes and
purchase homes from Lennar. Any limitations or restrictions on the availability
of such financing could adversely affect our sales.
VARYING QUARTERLY RESULTS
There are a number of factors which can cause our operating results to vary
from quarter to quarter. They include the following:
- the timing of home closings;
- the timing of, and profit from, land sales;
- when we receive regulatory approvals to begin building homes in
particular communities;
- promotional pricing by our competitors;
- when we open new residential communities;
- weather;
- changes in the cost and availability of labor and materials; and
- short-term changes in general economic conditions, interest rates and
other factors which affect the demand for homes.
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<PAGE> 18
DEPENDENCE ON KEY PERSONNEL
Our success depends to a significant degree on the efforts of our senior
management, especially our president and chief executive officer and other
officers. Our operations may be adversely affected if one or more members of
senior management cease to be active in our company. We have designed our
compensation structure and employee benefit programs to encourage long-term
employment of executive officers and other members of senior management.
WE COULD HAVE DIFFICULTY INTEGRATING U.S. HOME
U.S. Home is a large company. It is engaged in some aspects of the
homebuilding business (such as building homes targeted at the affordable,
retirement and active adult markets) in which we have only limited experience,
and in some locations in which we have not previously had homebuilding
operations. We view this as an opportunity and a benefit of the acquisition of
U.S. Home. However, if we are unable to integrate U.S. Home's activities with
our own, we could lose much of the anticipated benefit of the acquisition.
BECAUSE THE NOTES ARE STRUCTURALLY SUBORDINATED TO THE OBLIGATIONS OF OUR
SUBSIDIARIES THAT ARE NOT GUARANTORS, YOU MAY NOT BE FULLY REPAID IF WE BECOME
INSOLVENT
Substantially all of our operating assets are held directly by our
subsidiaries. Holders of any preferred stock of any of our subsidiaries that are
not guarantors and creditors of any of those subsidiaries, including trade
creditors, have and will have claims relating to the assets of that subsidiary
that are senior to the notes. As a result, the notes are structurally
subordinated to the debts, preferred stock and other obligations of those
subsidiaries.
BECAUSE THE NOTES ARE UNSECURED, YOU MAY NOT BE FULLY REPAID IF WE BECOME
INSOLVENT
The notes will not be secured by any of our assets or our subsidiaries'
assets. Our obligations under the new $1.4 billion senior secured credit
facilities, as well as our obligations under our outstanding 7 5/8% senior notes
due 2009 and our zero coupon senior convertible debentures due 2018, will be
secured by a pledge of the stock of substantially all of our subsidiaries. If we
become insolvent the holders of any secured debt would receive payments from the
assets used as security before you receive payments.
SUBSTANTIAL INDEBTEDNESS AND HIGH LEVERAGE OF U.S. HOME COULD ADVERSELY AFFECT
US
We have refinanced most of U.S. Home's existing indebtedness in connection
with the merger. As of December 31, 1999, U.S. Home's total corporate and
housing debt was approximately $650 million and the ratio of its total corporate
and housing debt to its stockholders' equity was approximately 1.12 to 1
compared with our ratio at November 30, 1999 of 0.59 to 1. Our increased
leverage will likely increase the effective interest rate on our borrowings. As
previously described, we entered into $1.4 billion of senior secured credit
facilities to replace both our and U.S. Home's corporate credit facilities and
to help pay costs related to the merger. After giving pro forma effect to the
transactions described under "Capitalization," our pro forma homebuilding
indebtedness as of February 29, 2000, would have been approximately $1.8 billion
and our pro forma total indebtedness including financial services debt would
have been approximately $2.1 billion.
Our ability to pay the principal and interest on our debt as it comes due
will depend upon our current and future performance. Our performance is affected
by general economic conditions and by financial, competitive, political,
business and other factors. Many of these factors are beyond our control. We
believe that cash generated by our business will be sufficient to enable us to
make our debt payments, including payments on the notes, as they become due. If,
however, we do not generate enough cash to make our debt payments as they become
due, we may be required to refinance some or all of our debt or to incur
additional debt. It is not certain that a refinancing will be possible or that
we will be able to negotiate favorable or acceptable terms if we refinance our
debt or borrow additional money. In addition, our access to capital is affected
by prevailing conditions in the financial and capital markets.
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<PAGE> 19
IF WE EXPERIENCE A CHANGE IN CONTROL, WE MAY BE UNABLE TO PURCHASE THE NOTES YOU
HOLD AS REQUIRED UNDER THE APPLICABLE INDENTURE
Upon the occurrence of certain change in control events, we must make an
offer to purchase all outstanding notes at a purchase price equal to 101% of the
principal amount of the notes, plus accrued and unpaid interest, if any. We may
not have sufficient funds to pay the purchase price for all notes tendered by
holders seeking to accept the offer to purchase. In addition, the new senior
secured credit facilities and our other debt agreements may also require us to
repurchase debt issued under them upon a change in control or may prohibit us
from purchasing any notes before their stated maturity, including upon change in
control. Our failure to purchase all validly tendered notes would result in an
event of default under the indenture governing the notes.
OUR SENIOR SECURED CREDIT FACILITIES MAY PROHIBIT US FROM MAKING PAYMENT ON THE
NOTES
Our senior secured credit facilities may not permit us or our subsidiaries
to make payments on any outstanding indebtedness other than regularly scheduled
interest and principal payments as and when due. As a result, our senior secured
credit facilities could prohibit us from making any payment on the notes in the
event that the notes are accelerated or tendered for repurchase or upon a change
in control. Any failure to make payments on the notes would result in an event
of default under the indenture governing the notes, which in turn is likely to
be a default under the senior secured credit facilities and other outstanding
and future indebtedness.
FRAUDULENT CONVEYANCE CONSIDERATIONS
Under fraudulent conveyance laws, the guarantees might be subordinated to
existing or future indebtedness incurred by those subsidiaries who are
guaranteeing, or might not be enforceable, if a court or a creditors
representative, such as a bankruptcy trustee, concluded that those subsidiaries:
- received less than fair consideration for the guarantees;
- were rendered insolvent as a result of issuing the guarantees;
- were engaged in a business or transaction for which our or our
subsidiaries' remaining assets constituted unreasonably small capital;
- intended to incur, or believed that we or they would incur, debts beyond
our or their ability to pay as those debts matured; or
- intended to hinder, delay or defraud our or their creditors.
The measure of insolvency varies depending upon the law of the relevant
jurisdiction. Generally, however, a company is considered insolvent if its debts
are greater than the fair value of its property, or if the fair saleable value
of its assets is less than the amount that would be needed to pay its probable
liabilities as its existing debts matured and became absolute.
COMPETITION
The housing industry is highly competitive. In their activities, each of
Lennar and U.S. Home has competed, and the combined companies will continue to
compete, with numerous developers and builders in and near the areas where
Lennar's and U.S. Home's communities are located. Competition is on the basis of
location, design, quality, amenities and price. Some of the principal
competitors of Lennar and U.S. Home include Kaufman and Broad Home Corporation,
Centex Corporation, D.R. Horton, Inc., M.D.C. Holdings, Inc., Pulte Corporation
and The Ryland Group, Inc. However, a substantial portion of Lennar's and U.S.
Home's competition in all their markets is, and will continue to be, independent
local and regional homebuilders.
13
<PAGE> 20
CONTROLLING STOCKHOLDER
We have two classes of stock: Common Stock, which is entitled to one vote
per share; and Class B Common Stock, which is entitled to ten votes per share.
Leonard Miller, the Chairman of our company, owns, through a family partnership,
Class B Common Stock which would be entitled to approximately 65%, after giving
pro forma effect to the acquisition of U.S. Home, of the combined votes which
could be cast by the holders of the Common Stock and the Class B Common Stock.
That gives Mr. Miller the power to elect all our directors and to approve most
matters which are presented to our stockholders, even if no other stockholders
vote in favor of them. Mr. Miller's ownership might discourage someone from
making a significant equity investment in us, even if we needed the investment
to meet our obligations (including those on the notes) and to operate our
business.
ABSENCE OF PUBLIC MARKET FOR THE NOTES
If the notes are traded after their initial issuance, they may trade at a
discount from their initial offering price, depending upon prevailing interest
rates, the market for similar securities, our performance and certain other
factors. Historically, the market for non-investment grade debt has been subject
to disruptions that have caused substantial volatility in the prices of
securities similar to the notes. There can be no assurance that if a market for
the notes develops, that market will not be subject to similar disruptions. Any
such disruptions may have an adverse effect on holders of the notes. We do not
intend to apply for listing of the notes on any securities exchange or for the
inclusion of the notes in any automated quotation system.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of series A notes who do not exchange their series A notes for
series B notes in response to the exchange offer will continue to be subject to
the restrictions on transfer of the series A notes resulting from the fact that
the issuance of the series A notes was not registered under the Securities Act
or registered or qualified under any state securities laws. In general, notes
may not be offered or sold, unless registered under the Securities Act, except
pursuant to an exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. We do not currently
anticipate that, except in limited circumstances specified in the registration
rights agreement, we will register the series A notes under the Securities Act.
Notes issued pursuant to the exchange offer in exchange for series A notes may
be offered for resale, resold or otherwise transferred (other than by a holder
which is an "affiliate" of ours within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided the holder acquired the series B
notes in the ordinary course of the holder's business and the holder has no
arrangement with any person to participate in the distribution of the series B
notes. Each broker-dealer that receives series B notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of those series B notes. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of series B notes received in
exchange for series A notes which the broker-dealer acquired as a result of
market-making activities or other trading activities. We will make this
prospectus available to any such broker-dealer for use in connection with
resales of series B notes. See "Sales of Series B Notes Received By
Broker-Dealers." However, under the securities laws of certain jurisdictions, if
applicable, the series B notes may not be offered or sold unless they have been
registered or qualified for sale in those jurisdictions or an exemption from
registration or qualification is available. To the extent that series A notes
are exchanged as a result of the exchange offer, the ability to trade untendered
and tendered but unaccepted series A notes may be adversely affected.
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<PAGE> 21
THE EXCHANGE OFFER
PURPOSE AND EFFECTS
We issued the series A notes on May 3, 2000 to the initial purchasers, who
resold the series A notes to "qualified institutional buyers" (as defined in
Rule 144A under the Securities Act) and certain non-U.S. persons in accordance
with regulation S of the Exchange Act. In connection with the sale of the series
A notes, we and the initial purchasers entered into the registration rights
agreement pursuant to which we agreed to file with the commission a registration
statement with respect to an offer to exchange series B notes for the series A
notes within 75 days after the series A notes were issued. In addition, we
agreed to use our best efforts to cause the registration statement to become
effective under the Securities Act within 135 days after the series A notes were
issued and to issue the series B notes pursuant to the exchange offer. A copy of
the registration rights agreement has been filed as an exhibit to the
registration statement of which this prospectus is a part.
The exchange offer is being made pursuant to the registration rights
agreement. Holders of series A notes who do not tender their series A notes or
whose series A notes are tendered but not accepted would have to rely on
exemptions from registration requirements under the securities laws, including
the Securities Act, if they wish to sell their series A notes.
Based on interpretations by the staff of the commission set forth in
no-action letters issued to persons unrelated to us, we believe the series B
notes issued pursuant to the exchange offer in exchange for series A notes may
be offered for sale, sold and otherwise transferred by any holder (other than a
person that is an "affiliate" of ours within the meaning of Rule 405 under the
Securities Act and except as set forth in the next paragraph) without
registration or the delivery of a prospectus under the Securities Act, provided
the holder acquires the series B notes in the ordinary course of the holder's
business and the holder is not participating and does not intend to participate,
and has no arrangement or understanding with any person to participate, in the
distribution of the series B notes.
If a person were to participate in the exchange offer for the purpose of
distributing securities in a manner not permitted by the commission's
interpretation, (1) the position of the staff of the commission enunciated in
the no-action letters would not be applicable to the person and (2) the person
would be required to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a sale of the series B
notes.
Each broker-dealer that receives series B notes for its own account in
exchange for series A notes which the broker-dealer acquired as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any sale of those series B notes.
See "Sales of Series B Notes Received by Broker-Dealers."
The exchange offer is not being made to, nor will we accept surrenders for
exchange from, holders of series B notes with addresses in any jurisdiction in
which the exchange offer or the issuance of series B notes pursuant to it would
violate applicable securities or blue sky laws. Prior to the exchange offer,
however, we will register or qualify, or cooperate with the holders of the
series A notes and their respective counsel in connection with the registration
or qualification of, the series B notes for offer and sale under the securities
or blue sky laws of such jurisdictions as are necessary to permit consummation
of the exchange offer and do anything else which is necessary or advisable to
enable the offer and issuance of the series B notes in those jurisdictions.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
and in the accompanying letter of transmittal, we will issue series B notes in
exchange for all series A notes which are validly tendered prior to 5:00 p.m.,
New York City time, on the expiration date (as defined below) and not withdrawn.
The principal amount of the series B notes issued in the exchange will be the
same as the principal amount of the series A notes for which they are exchanged.
Holders may tender some or all of their series A notes in response to the
exchange offer.
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<PAGE> 22
However, series A notes may be tendered only in multiples of $1,000. See
"Description of the Series B Notes."
The form and terms of the series B notes will be the same in all material
respects as the form and terms of the series A notes, except that (1) the series
B notes will be registered under the Securities Act and hence will not bear
legends regarding restrictions on transfer and (2) because the series B notes
will be registered, holders of series B notes will not be, and upon the
consummation of the exchange offer, except under limited circumstances, holders
of series A notes will no longer be, entitled to rights under the registration
rights agreement intended for holders of unregistered securities.
Series A notes which are not tendered for exchange or are tendered but not
accepted in the exchange offer will remain outstanding and be entitled to the
benefits of the indenture, but will not be entitled to any registration rights
under the registration rights agreement.
We will be deemed to accept all the series A notes which are validly
tendered and not withdrawn when we give oral or written notice to that effect to
the exchange agent. The exchange agent will act as agent for the tendering
holders for the purpose of receiving series B notes from us.
If any tendered series A notes are not accepted for exchange because of an
invalid tender or otherwise, certificates for those series A notes will be
returned, without expense, to the tendering holder as promptly as practicable
after the expiration date.
Holders who tender series A notes in response to the exchange offer will
not be required to pay brokerage commissions or fees or, except as described in
the instructions in the letter of transmittal, transfer taxes. We will pay all
charges and expenses, other than certain taxes described below, in connection
with the exchange offer. See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSION; TERMINATION; AMENDMENTS
The exchange offer will expire at 5:00 p.m., New York City time, on August
23, 2000, unless we extend it by notice to the exchange agent. We reserve the
right to extend the exchange offer at our discretion. If we extend the exchange
offer, the term "expiration date" will mean the time and date on which the
exchange offer as extended will expire. We will notify the exchange agent of any
extension by oral or written notice and will make a public announcement of any
extension, not later than 9:00 a.m., New York City time, on the business day
after the previously scheduled expiration date.
TERMINATION OF CERTAIN RIGHTS
The registration rights agreement provides that, with certain exceptions,
if: (1)(A) the exchange offer Registration Statement has not been filed with the
Commission on or prior to the 75th calendar day following the date of original
issue of the series A notes, or (B) the shelf registration statement has not
been filed with the commission on or prior to the 30th day after a shelf notice
is required to be delivered under the registration rights agreement; (2)(A) the
exchange offer registration statement has not been declared effective on or
prior to the 135th calendar day following the date of original issue of the
series A notes, or (B) the shelf registration statement has not been declared
effective on or prior to the 75th day following the shelf registration filing
date; (3)(A) the exchange offer is not consummated on or prior to the 165th day
following the date of original issue of the series A notes, or (B) after the
shelf registration statement has been declared effective, the shelf registration
statement ceases to be effective or usable in connection with resales of the
notes at any time when we are obligated by the registration rights agreement to
maintain its effectiveness (each event referred to in clauses (1) through (3)
above being a "registration default"), the interest rate on the series A notes
will be increased by one quarter of one percent per annum when the registration
default occurs and will increase by an additional one quarter of one percent at
the end of 90 days that additional interest continues to accrue, with an
aggregate maximum increase in the interest rate equal to one percent (1%) per
annum. Following the cure of all registration defaults, the accrual of
additional interest will cease.
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<PAGE> 23
Holders of series B notes will not be and, upon consummation of the
exchange offer, holders of series A notes will no longer be, entitled to rights
under the registration rights agreement intended for holders of series A notes
which are restricted as to transferability. The exchange offer will be deemed
consummated when we deliver to the exchange agent series B notes in the same
aggregate principal amount as that of the series A notes which are validly
tendered and not withdrawn.
PROCEDURES FOR TENDERING
Only a holder of series A notes may tender series A notes in response to
the exchange offer. To tender series A notes, the holder must complete, sign and
date the letter of transmittal, or a facsimile of one, have the signatures
guaranteed if required by the letter of transmittal, and mail or otherwise
deliver the letter of transmittal or facsimile of one, together with the series
A notes (unless the tender is being effected using the procedure for book-entry
transfer described below) and any other required documents, to the exchange
agent prior to 5:00 p.m., New York City time, on the expiration date.
Any financial institution that is a participant in DTC's Book-Entry
Transfer Facility System may make book-entry delivery of series A notes by
causing DTC to transfer the series A notes into the exchange agent's account in
accordance with DTC's transfer procedure. Although delivery of series A notes
may be effected through book-entry transfer into the exchange agent's account at
DTC, the letter of transmittal (or a facsimile of one), with any required
signature guarantees and any other required documents, must be transmitted to
and received or confirmed by the exchange agent at its addresses as set forth
under the caption "-- Exchange Agent" below prior to 5:00 p.m., New York City
time, on the expiration date. DELIVERY OF A DOCUMENT TO DTC DOES NOT CONSTITUTE
DELIVERY TO THE EXCHANGE AGENT.
A tender of series A notes by a holder will constitute an agreement by the
holder to transfer the series A notes to us in exchange for series B notes on
the terms and subject to the conditions set forth in this prospectus and in the
letter of transmittal.
The method of delivering series A notes and the letter of transmittal and
any other required documents to the exchange agent is at the election and risk
of the holder. It is recommended that holders use overnight or hand delivery
services. In all cases, sufficient time should be allowed to assure delivery to
the exchange agent before the expiration time. No letter of transmittal or
series A notes should be sent to us. Holders may ask their brokers, dealers,
commercial banks, trust companies or nominees to assist them in effecting
tenders.
Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an eligible institution unless the series A
notes are being tendered for the account of an eligible institution. An eligible
institution is a bank, broker, dealer, credit union, savings association or
other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program.
If the letter of transmittal or any series A notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, they should so indicate when signing, and we may require that evidence
satisfactory to us of their authority to sign be submitted with the letter of
transmittal.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance and withdrawal of tendered series A notes will be
determined by us in our sole discretion, and that determination will be final
and binding. We reserve the right to reject any series A notes which are not
properly tendered or the acceptance of which we believe might be unlawful. We
also reserve the right to waive any defects, irregularities or conditions of
tender as to particular series A notes, without being required to waive the same
defects, irregularities or conditions as to other series A notes. Our
interpretation of the terms and conditions of the exchange offer (including the
instructions in the letter of transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of series A notes must be cured by the expiration date, or by such later time as
we may determine. Although we intend to request the exchange agent to notify
holders of defects or
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<PAGE> 24
irregularities with respect to tenders of series A notes, neither we, the
exchange agent nor any other person will incur any liability for failure to give
such notification. Tenders of series A notes will not be deemed to have been
made until all defects and irregularities have been cured or waived. Any series
A notes received by the exchange agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned by the exchange agent to the tendering holders, unless otherwise
provided in the letter of transmittal, as soon as practicable following the
expiration date.
We have the right (subject to limitations contained in the indenture) (1)
to purchase or make offers for any series A notes that remain outstanding after
the expiration date and (2) to the extent permitted by applicable law, to
purchase series A notes in privately negotiated transactions or otherwise. The
terms of any such purchases or offers could differ from the terms of the
exchange offer.
By tendering, a holder will be representing to us that the person who will
acquire the series B notes being issued as a result of the exchange offer
(whether or not that is the holder) will be acquiring them in the ordinary
course of that person's business and that neither the holder nor any such other
person has an arrangement or understanding with any person to participate in a
distribution of the series B notes or is an "affiliate" of ours (as defined in
Rule 405 under the Securities Act). If the holder is a broker-dealer that will
receive series B notes for its own account in exchange for series A notes that
were acquired as result of market-making activities or other trading activities,
the holder will, by tendering, acknowledge that it will deliver a prospectus in
connection with any resale of those series B notes.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their series A notes and (1) whose series A
notes are not immediately available, or (2) who cannot deliver their series A
notes or any other required documents to the exchange agent or cannot complete
the procedure for book-entry transfer prior to the expiration date, may effect a
tender if:
(a) The tender is made through an eligible institution;
(b) Prior to the expiration date, the exchange agent receives from the
eligible institution a properly completed and duly executed notice of
guaranteed delivery (by facsimile transmission, mail or hand) setting forth
the name and address of the eligible holder, the certificate number(s) of
the series A notes (if available) and the principal amount of series A
notes tendered, together with a duly executed letter of transmittal (or a
facsimile of one), stating that the tender is being made by that notice of
guaranteed delivery and guaranteeing that, within five business days after
the expiration date, the certificate(s) representing the series A notes (or
confirmation of a book-entry transfer into the exchange agent's account at
DTC) and any other documents required by the letter of transmittal will be
delivered to the exchange agent; and
(c) The certificate(s) representing all the tendered series A notes
(or confirmation of a book-entry transfer into the exchange agent's account
at DTC) and all other documents required by the letter of transmittal are
received by the exchange agent within five business days after the
expiration date.
Upon request to the exchange agent, a form of notice of guaranteed delivery
will be sent to holders who wish to use the guaranteed delivery procedures
described above.
WITHDRAWAL OF TENDERS
Except as otherwise described below, tenders of series A notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration
date, unless the series A notes have already been accepted for exchange.
To withdraw a tender of series A notes, a written or facsimile transmission
notice of withdrawal must be received by the exchange agent prior to 5:00 p.m.,
New York City time, on the expiration date, and before the series A notes have
been accepted for exchange by us. Any notice of withdrawal must
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<PAGE> 25
(i) specify the name of the person who deposited the series A notes to be
withdrawn, (ii) identify the series A notes to be withdrawn (including the
certificate numbers and principal amounts of the series A notes), (iii) be
signed by the depositor in the same manner as the signature on the letter of
transmittal by which the series A notes were tendered (including any required
signature guarantees) or be accompanied by documents of transfer sufficient to
have the trustee register the transfer of the series A notes into the name of
the person who withdraws the tender, and (iv) specify the name in which the
withdrawn series A notes are to be registered, if different from that of the
depositor. All questions as to the validity, form and eligibility (including
time of receipt) of withdrawal notices will be determined by us in our sole
discretion, and that determination will be final and binding on all parties. Any
series A notes which are withdrawn will be deemed not to have been validly
tendered for purposes of the exchange offer, and no series B notes will be
issued with respect to those series A notes unless they are validly re-tendered.
Any series A notes which have been tendered but which are not accepted for
exchange or which are withdrawn will be returned to the holder without cost to
the holder as soon as practicable after withdrawal, rejection of tender or
termination of the exchange offer. Properly withdrawn series A notes may be
re-tendered at any time prior to the expiration date.
FEES AND EXPENSES
We will bear the expenses of soliciting tenders pursuant to the exchange
offer. The principal solicitation of tenders is being made by mail. However,
solicitations also may be made by telecopy, telephone or in person by officers
and regular employees of ours and our affiliates.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to brokers, dealers or others for
soliciting acceptances of the exchange offer. We will, however, pay the exchange
agent reasonable and customary fees for its services and reimburse it for its
reasonable out-of-pocket expenses in connection with the exchange offer. We may
also reimburse brokerage houses and other custodians, nominees and fiduciaries
for the reasonable out-of-pocket expenses they incur in forwarding copies of
this prospectus, letters of transmittal and related documents to the beneficial
owners of the series A notes and in handling or forwarding tenders for exchange.
We will pay the other expenses incurred in connection with the exchange offer,
including fees and expenses of the trustee, accounting and legal fees and
printing costs.
We will pay all transfer taxes, if any, applicable to the exchange of
series A notes for series B notes pursuant to the exchange offer. If, however,
certificates representing series B notes or series A notes for principal amounts
which are not tendered or accepted for exchange are to be delivered to, or are
to be issued in the name of, a person other than the registered holder of the
series A notes tendered, or if tendered series A notes are registered in the
name of a person other than the person who signs the letter of transmittal, or
if a transfer tax is imposed for any other reason, other than the exchange of
series A notes for series B notes pursuant to the exchange offer, the tendering
holder must pay the transfer taxes (whether imposed on the registered holder or
any other person). Unless satisfactory evidence of payment of transfer taxes or
exemption from the need to pay them is submitted with the letter of transmittal,
the amount of the transfer taxes will be billed directly to the tendering
holder. We may refuse to issue series B notes in exchange for series A notes, or
to return certificates evidencing series A notes which are not exchanged, until
we receive evidence satisfactory to us that any transfer taxes payable by the
holder have been paid.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The exchange of the series A notes for the series B notes in the exchange
offer should not constitute an exchange for federal income tax purposes.
Consequently, (1) no gain or loss should be realized by a U.S. Holder upon
receipt of a series B note; (2) the holding period of the series B note should
include the holding period of the series A note for which it is exchanged; and
(3) the adjusted tax basis of the series B note should be the same as the
adjusted tax basis of the series A note for which it is exchanged, immediately
before the exchange. Even if the exchange of a series A note for a series B note
were treated as an exchange, the exchange should constitute a tax-free
recapitalization for federal income tax purposes.
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<PAGE> 26
Accordingly, a series B note should have the same issue price as a series A note
and a U.S. Holder should have the same adjusted basis and holding period in the
series B note as it had in the series A note immediately before the exchange. A
"U.S. Holder" means a person who is, for United States federal income tax
purposes, (1) a citizen or resident of the United States; (2) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision of the United States; or (3) an
estate or trust the income of which is subject to United States federal income
taxation regardless of its source.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD NOTES
If a holder does not exchange series A notes for series B notes in response
to the exchange offer, the series A notes will continue to be subject to the
restrictions on transfer described in the legend on the certificate evidencing
the series A notes, and will not have the benefit of any agreement by us to
register series A notes under the Securities Act. In general, notes may not be
offered or sold, unless the sale is registered under the Securities Act, or
unless the offer and sale are exempt from, or not subject to, the Securities Act
or any applicable state securities laws.
Participation in the exchange offer is voluntary and holders should
carefully consider whether to accept the exchange offer and tender their series
A notes. Holders of series A notes are urged to consult their financial and tax
advisors in making their own decisions on what action to take.
ACCOUNTING TREATMENT
The series B notes will be recorded in our accounting records at the same
carrying value as the series A notes on the date of the exchange. Accordingly,
we will not recognize any gain or loss for accounting purposes as a result of
the exchange offer. We will amortize the expenses of the exchange offer over the
term of the series B notes.
EXCHANGE AGENT
Bank One Trust Company, N.A. has been appointed as exchange agent for the
exchange offer. All correspondence in connection with the exchange offer and the
letter of transmittal should be addressed to the exchange agent, as follows:
<TABLE>
<CAPTION>
BY REGISTERED OR
BY FACSIMILE: BY OVERNIGHT COURIER: CERTIFIED MAIL:
<S> <C> <C>
Facsimile: (312) 407-4656 Bank One Trust Company, N.A. Bank One Trust Company, N.A.
Global Corporate Trust Services Global Corporate Trust Global Corporate Trust Services
Attention: Mary R. Fonti Services 1 Bank One Plaza
Telephone: (212) 373-1105 One North State Street Suite IL1-0126
9th Floor Chicago, Illinois 60670-0126
Chicago, Illinois 60602 Attention: Mary R. Fonti
Attention: Mary R. Fonti
</TABLE>
Requests for additional copies of this prospectus or the letter of
transmittal should be directed to the exchange agent.
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<PAGE> 27
CAPITALIZATION
The table below shows our capitalization as of February 29, 2000: (1) on an
actual basis; (2) on a pro forma basis assuming (a) completion of the
acquisition of U.S. Home, and (b) the closing of our new senior secured credit
facilities and the use of the proceeds of that financing to refinance our and
U.S. Home's existing bank debt and to pay merger-related costs, in each case as
if those transactions had occurred on February 29, 2000, and (3) on a pro forma
as adjusted basis to take account of the pro forma transactions, the issuance of
the Notes and the use of the net proceeds from the issuance of the Notes and
proceeds from the new senior secured credit facilities to purchase all of U.S.
Home's public debt securities and pay fees and expenses.
<TABLE>
<CAPTION>
AS OF FEBRUARY 29, 2000
------------------------------------------
PRO FORMA
PRO AS
ACTUAL FORMA(1) ADJUSTED
------------ ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
DEBT:
Revolving Credit Facilities.............................. $ 229,600 $ 280,648 $ 499,680
Term Loan B.............................................. -- 400,000 400,000
Lennar's Zero Coupon Senior Convertible Debentures due
2018................................................... 242,507 242,507 242,507
Lennar's 7 5/8% Senior Notes due 2009 (net of $12,226
discount).............................................. 269,774 269,774 269,774
Lennar's 9.95% Senior Notes due 2010 (net of $24,983
discount).............................................. -- -- 300,017
U.S. Home's Notes(2)..................................... -- 532,731 18,712
Other debt............................................... 8,303 34,164 34,164
---------- ---------- ----------
Total homebuilding debt............................. 750,184 1,759,824 1,764,854
Financial services debt.................................. 175,371 262,556 262,556
Limited-purpose finance subsidiaries debt................ 24,095 24,095 24,095
---------- ---------- ----------
Total debt.......................................... 949,650 2,046,475 2,051,505
STOCKHOLDERS' EQUITY:
Common Stock of $0.10 par value per share, 48,520 shares
issued (61,498 shares pro forma and pro forma as
adjusted)(1)(3)(4)..................................... 4,852 6,150 6,150
Class B Common Stock of $0.10 par value per share, 9,848
shares issued.......................................... 985 985 985
Additional paid-in capital............................... 525,718 791,287 791,287
Retained earnings........................................ 377,641 377,641 377,641
Treasury Stock, at cost, 9,710 shares of Common Stock
(9,848 shares pro forma and pro forma as adjusted)..... (156,487) (158,943) (158,943)
---------- ---------- ----------
Total stockholders' equity.......................... 752,709 1,017,120 1,017,120
---------- ---------- ----------
Total capitalization........................... $1,702,359 $3,063,595 $3,068,625
========== ========== ==========
</TABLE>
---------------
(1) We acquired U.S. Home through a merger in which U.S. Home's stockholders
received approximately $243,000 in cash and 12,978 shares of Lennar Common
Stock (which, for financial statement reporting purposes, Lennar recorded at
a value of approximately $20.56 per share).
(2) U.S. Home's Notes consist of 7.95% Senior Notes due 2001 ($75,750), 8.25%
Senior Notes due 2004 ($101,000), 7 3/4% Senior Notes due 2005 ($101,000),
8.88% Senior Subordinated Notes due 2007 ($126,250) and 8.875% Senior
Subordinated Notes due 2009 ($126,250). These amounts reflect a value of
U.S. Home's notes at 101% of their principal amount, which is the purchase
price payable under our tender offer for those notes.
(3) In March 1998, we entered into an agreement with a banking firm which gives
us the option (but does not require us) to sell Common Stock to that firm
based upon market prices from time to time for a total of $120,000. To date,
we have made sales totaling $36,000 under the agreement.
(4) Does not include 6,100 shares of Common Stock issuable upon conversion of
the Zero Coupon Senior Convertible Debentures due 2018 or 3,800 shares of
Common Stock issuable upon exercise of stock options which were outstanding
at February 29, 2000.
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<PAGE> 28
BUSINESS OF LENNAR
GENERAL
We have been selling and building single family homes to first-time,
first-time move-up, second-time move-up, active adults and others for over 40
years. We currently operate in 13 states, including Florida, California, Texas,
Arizona and Nevada. According to data from the Bureau of the Census, these five
states accounted for approximately 33% of residential building permits issued in
the United States during 1999.
Our revenues from homebuilding operations increased to $2.8 billion in
fiscal 1999 from $666 million in fiscal 1995, which represents a compound annual
growth rate of 44%. Over the same period, our earnings before interest and
taxes, referred to as "EBIT," grew to $334 million from $135 million, a compound
annual growth rate of 26%. We delivered 12,589 homes in fiscal 1999 compared
with 10,777 homes in fiscal 1998 and 4,680 homes in fiscal 1995. At February 29,
2000, the dollar value of our backlog of homes under contract totaled $773
million (3,238 homes), compared with $934 million (4,590 homes) at February 28,
1999.
Our financial services subsidiaries provide mortgage financing, title
insurance and closing services to people who buy our homes and others. These
subsidiaries also package and resell mortgage loans, perform mortgage loan
servicing activities and provide cable television and alarm monitoring services
to residents of our communities and others. Our subsidiaries sell their loans in
the secondary mortgage market, but usually retain the servicing rights. In
fiscal 1999, we originated $2.2 billion of mortgage loans compared with $1.0
billion in the prior year. Approximately 51% of the loans we originated in
fiscal 1999 were to persons buying our homes compared with 77% in fiscal 1998.
BUSINESS STRATEGY
We use a number of strategies to grow our business. They include the
following:
ACQUIRE LAND AT ADVANTAGEOUS PRICES
Throughout our history, we have acquired land at what we believed to be
favorable prices and benefited from appreciation in its value before we
incorporated it into finished homes. We have done this by (a) acquiring land in
areas which are in early stages of becoming homebuilding growth markets, or
which we believe will shortly begin to emerge as growth markets, (b) entering
major growth markets when they are recovering from homebuilding slowdowns and
(c) actively acquiring land during low points in the real estate cycle. We
employed this strategy in Florida and Arizona during the 1970's and 1980's, and
we have employed it in making major acquisitions in Texas and California during
the past several years. Appreciation in the price of land between the time we
acquire it and the time we build homes on it increases our gross profit margins
and often gives us an advantage over competing homebuilders.
Our recent expansion into California typifies our approach toward entering
new markets. We entered California in 1995 by acquiring Bramalea California,
Inc. which gave us a land position of 3,000 homesites. At that time, the
California housing market was beginning to emerge from a slowdown that had begun
in 1989. During 1996 and 1997, we increased our California position by acquiring
other homebuilders and attractive land parcels. In October 1997, we acquired
Pacific Greystone Corporation, a leading homebuilder in both Northern and
Southern California, with operations also in Arizona and Nevada. The Pacific
Greystone acquisition substantially increased our California inventory and
brought us the management structure we needed to conduct a major homebuilding
operation in California and elsewhere in the West. Since the Pacific Greystone
transaction, we have acquired the properties of three more companies: Winncrest
Homes, ColRich Communities and Polygon Communities. These acquisitions gave us
new opportunities in the recovering Inland Empire area of California, and
strengthened our positions in Orange County, California, and in the Sacramento
and San Diego areas of California. In total, the three acquisitions provided us
approximately 6,000 owned homesites, 7,600 controlled homesites and a $170
million backlog of home sales contracts, and at November 30, 1999, we had
approximately 32,000 owned and controlled homesites in California. As a result
of our expansion strategy, we believe we currently are one of the
best-positioned builders in California.
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<PAGE> 29
We do not use all the land we acquire in our homebuilding operations. We
often reduce our inventory by selling parcels to other developers to help
achieve a higher return on our investment.
GROW THROUGH ACQUISITIONS
We have frequently acquired companies or their assets to expand our
homebuilding and financial services activities. This has included acquiring
homebuilding companies in order to obtain their inventories and homebuilding
operations. We did that with the acquisition of H. Miller & Sons in 1984,
Development Corporation of America in 1986, Bramalea California, Inc. in 1995,
Village Builders, Friendswood Development Company, Renaissance Homes and Regency
Title in 1996, Pacific Greystone Corporation in 1997, North American Title,
Winncrest Homes, ColRich Communities and Polygon Communities in 1998, and Eagle
Home Mortgage Company and Southwest Land Title Company in 1999.
Our acquisition of U.S. Home is another significant use of an acquisition
to expand our homebuilding and mortgage finance activities.
FOCUS ON FASTEST GROWING HOUSING MARKETS
From our origin in South Florida to our expansion into Arizona, Texas,
California and Nevada, we have concentrated on the Sun Belt States. Demand for
new homes has been substantially greater in those states than in most other
areas of the country. These five states accounted for approximately 33% of all
residential building permits issued in the United States in 1999.
The acquisition of U.S. Home brings us into eight states that accounted for
an additional 24% of residential building permits issued in 1999, as well as
bringing us into new areas of states in which we already build homes.
GENERATE EARNINGS FROM FINANCIAL SERVICES SUBSIDIARIES
Our financial services subsidiaries generate significant earnings by
originating and servicing mortgage loans, providing title insurance and closing
services for homebuyers and packaging and reselling mortgage loans. Because the
financial services subsidiaries rapidly resell the loans they originate into the
secondary mortgage market, generally on a non-recourse basis, our financial
services activities involve a relatively low capital investment.
The acquisition of U.S. Home will significantly expand our mortgage finance
business.
FOCUS ON CUSTOMER CARE AND SATISFACTION
We are dedicated to providing each homebuyer with high quality, service and
value. We have a program called "Zero Defects(SM)" to ensure that each Lennar
home is as close as possible to defect-free before the home sale closes. We also
have a "TLC(SM)" Program ("Total Lennar Care(SM)"), through which we provide
proactive, customer-driven post sale service, which ultimately leads to enhanced
customer retention and referrals. Our focus on customer care has made customer
referrals a major source of new customer leads.
Like us, U.S. Home has made quality products the centerpiece of its
homebuilding business.
OPERATIONS
We have two business segments: homebuilding and financial services. Assets
and results of operations of our reportable segments are separately disclosed in
our Consolidated Financial Statements which are incorporated by reference into
this prospectus.
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<PAGE> 30
HOMEBUILDING OPERATIONS
Our homebuilding operations include the sale and construction of
single-family attached and detached homes in Florida, California, Texas, Arizona
and Nevada. During 1999, our product mix consisted of deliveries of
approximately 30% first-time homes, 65% move-up homes and 5% retirement and
active adult homes. Our homebuilding activities also include the purchase,
development and sale of residential land. We have a 50% interest in two general
partnerships with LNR Property Corporation, which acquire and develop land and
sell land to us and to others. We manage the day-to-day operations of the
partnerships and receive a management fee.
FINANCIAL SERVICES
Our financial services activities are conducted primarily through Lennar
Financial Services, Inc. and its subsidiaries. Our financial services
subsidiaries make conventional, FHA-insured and VA-guaranteed mortgage loans
available to qualified purchasers of our homes and others from offices located
in Florida, California, Arizona, Texas, Nevada, Oregon, Utah and Washington. In
1999, loans to buyers of our homes represented approximately 51% of our $2.2
billion of loan originations, compared to 77% in 1998. In addition, these
companies provide title insurance and closing services for Lennar homebuyers and
others, package and resell residential mortgage loans and mortgage-backed
securities, perform mortgage loan servicing activities and provide cable
television and alarm monitoring services to residents of Lennar communities and
others. During our fiscal 1998 year, we acquired North American Title Group.
This acquisition, together with our 1996 acquisition of Regency Title Company,
significantly expanded our title insurance and closing business in Texas and
expanded our title insurance business into California, Arizona and Colorado.
During fiscal 1999, we acquired Eagle Home Mortgage Company and Southwest Land
Title Company.
For more information regarding us, see our documents incorporated by
reference in this prospectus.
BUSINESS OF U.S. HOME
GENERAL
Organized in 1954 and incorporated in Delaware in 1959, U.S. Home
Corporation was one of the largest single-family homebuilders in the United
States based on homes delivered in 1999. U.S. Home builds and sells homes in
more than 240 new home communities in 33 market areas in 13 states. Since its
formation, U.S. Home has delivered over 292,000 homes. In 1998, U.S. Home was
the eighth largest single-family on-site homebuilder in the United States based
on homes completed and delivered and U.S. Home has been among the ten largest
single-family on-site homebuilders in the United States for over 20 years. In
1999 U.S. Home had total revenues of $1.82 billion and net income of $72.4
million and U.S. Home delivered 9,069 homes during that year.
BUSINESS STRATEGY
FOCUS ON POPULAR GROWTH CORRIDORS
In each of the 33 markets in which U.S. Home operates, U.S. Home strives to
build quality homes offering prospective homebuyers a high level of new home
value. U.S. Home offers a wide variety of moderately priced homes that are
designed to appeal to the affordable, move-up and retirement and active adult
buyers. Because U.S. Home believes that many home purchasers compare homes on
the basis of location, perceived quality and dollars of purchase price per
square foot of living area, U.S. Home has focused its community development
efforts on popular growth corridors. Development in these corridors allows U.S.
Home to appeal to a wide variety of buyers by designing homes of high quality,
value and flexibility. U.S. Home designs its homes for maximum living space and
provides opportunities to buyers in each of its markets to choose interior and
exterior features to enhance their homes through its U.S. Home Custom Design
Studios.
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<PAGE> 31
FOCUS ON HIGH QUALITY AND CUSTOMER SERVICE STANDARDS
As a service to its homebuyers, U.S. Home markets homes in "model home
parks" featuring one or more model homes, attractively furnished and decorated
and staffed by its sales consultants. These consultants provide information
regarding floor plans, the various elevations available and decorating options,
as well as assisting with mortgage financing information. A model home may
include a variety of options and upgrades that the customer may request at an
additional cost, and includes items such as special floor and window treatments,
custom cabinetry, pools, fireplaces and decks. U.S. Home constantly studies
aesthetic design and architectural trends, as well as quality construction and
engineering trends, in order to provide customers with high quality and customer
service. U.S. Home also has received numerous awards in various markets for
outstanding housing design.
OPERATIONS
U.S. Home is engaged in two related industries: homebuilding and financial
services. Assets and results of operations of U.S. Home's reportable segments
are separately disclosed in its Consolidated Financial Statements incorporated
in this document by reference.
HOMEBUILDING OPERATIONS
U.S. Home's primary business is the on-site development of single-family
residential communities in or near major metropolitan areas of Arizona,
California, Colorado, Florida, Maryland/Virginia, Michigan, Minnesota, Nevada,
New Jersey, North Carolina, Ohio and Texas. U.S. Home's product line includes
both single-family detached and attached homes. During 1999, approximately 81%
of the homes U.S. Home delivered were single-family detached homes as compared
to 78% in 1998 and 80% in 1997. During 1999, U.S. Home's product mix consisted
of deliveries of approximately 35% affordable homes, 40% move-up homes and 25%
retirement and active adult homes.
For a number of years, U.S. Home has developed a significant portion of its
residential communities (primarily in the affordable and move-up communities)
through rolling lot options. U.S. Home purchases finished lots through these
options, which enable it initially to pay a small fraction of the total lot cost
and then purchase the lots on a scheduled basis. During 1999, 31% of U.S. Home's
unit deliveries were from lots acquired by the exercise of rolling lot options,
as compared with 36% in 1998. At December 31, 1999, U.S. Home's land and
finished lot inventories totaled $679.3 million, excluding option deposits. At
the time, U.S. Home's refundable and nonrefundable deposits totaled $47.2
million for options and contracts to purchase undeveloped land and finished lots
for homebuilding operations for a total purchase price of approximately $533.9
million. U.S. Home has incurred pre-development costs of approximately $56.0
million relating to these properties.
FINANCIAL SERVICES
U.S. Home's financial services activities consist primarily of its mortgage
banking activities and are conducted primarily through its wholly-owned
subsidiary, U.S. Home Mortgage Corporation, a Florida corporation. U.S. Home's
subsidiary originates conventional, FHA-insured and VA-guaranteed mortgage loans
to qualified purchasers of our homes from 22 branch and satellite offices which
serve most of the market areas where U.S. Home conducts its homebuilding
operations. U.S. Home does not retain or service the mortgages that it
originates but, rather, processes and sells the mortgages and related servicing
rights to third party investors. Loans and servicing rights are generally sold
and funded by investors within 30 days after the home is delivered. U.S. Home's
"capture rate" for providing financing to buyers of homes it delivered was 82%
in 1999 compared to 83% in 1998 and 76% in 1997.
For more information regarding U.S. Home, see U.S. Home's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999, which is incorporated by
reference in this document.
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<PAGE> 32
BUSINESS OF COMBINED LENNAR/U.S. HOME
Based on information in homebuilding industry publications, a combined
Lennar and U.S. Home would have been the nation's largest homebuilder in 1999
based on homebuilding revenues, domestic homes delivered and homebuilding
EBITDA. On a combined pro forma basis, Lennar and U.S. Home would have reported
revenues of $4.9 billion and earnings before interest, taxes, depreciation and
amortization of $551 million in 1999.
The combined company will benefit from, among other things, an increased
geographic market and a broader product offering. Geographically, the combined
company will operate in 13 states, including the six states that have either the
largest or the fastest growing population in the nation (Florida, California,
Texas, Colorado, Arizona and Nevada). Our product offering will be materially
enhanced by the U.S. Home strategic position in the retirement/active adult
segment of the market. We will build homes for the first-time, first-time
move-up, second-time move-up and retirement purchasers under both the Lennar and
U.S. Home brand names. The enhanced size and scope of our business will allow us
to solidify further our position in our principal current markets, as well as
helping us to expand the areas of our activities and to pursue new Internet and
broadband opportunities for the homebuilding and residential mortgage
industries.
The following table provides data, on a state-by-state basis, regarding the
combined homebuilding operations of Lennar and U.S. Home at or for the year
ended November 30, 1999 as to Lennar and December 31, 1999 as to U.S. Home.
PRO FORMA HOMESITES OWNED AND CONTROLLED AND LAST 12 MONTH DELIVERIES(1)(2)
<TABLE>
<CAPTION>
HOMESITES
-------------------------------
TOTAL 1999
STATE OWNED CONTROLLED HOMESITES DELIVERIES
----- ------ ---------- --------- ----------
<S> <C> <C> <C> <C>
Florida......................................... 16,036 33,716 49,752 6,715
California...................................... 15,277 21,353 36,630 4,508
Texas........................................... 10,356 7,923 18,279 4,381
Colorado........................................ 5,759 3,732 9,491 1,178
Arizona......................................... 4,397 1,309 5,706 2,429
Minnesota....................................... 1,605 2,842 4,447 753
Maryland/Virginia............................... 2,504 915 3,419 589
New Jersey...................................... 820 2,007 2,827 304
Nevada.......................................... 1,212 169 1,381 724
Ohio............................................ 350 82 432 77
------ ------ ------- ------
Total........................................... 58,316 74,048 132,364 21,658
====== ====== ======= ======
</TABLE>
---------------
(1) Lennar homesite positions and deliveries are presented as of or for the
fiscal year ended November 30, 1999. U.S. Home homesite positions and
deliveries are presented as of or for the fiscal year ended December 31,
1999.
(2) Excludes U.S. Home joint venture activity in Michigan and North Carolina.
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<PAGE> 33
MANAGEMENT OF LENNAR
Our directors and executive officers as of the date of this prospectus are
as follows:
<TABLE>
<CAPTION>
NAME POSITION
---- --------
<S> <C>
Leonard Miller........................... Chairman of the Board and Director
Stuart A. Miller......................... President, Chief Executive Officer, and
Director
Robert J. Strudler(1).................... Vice-Chairman of the Board, Chief
Operating Officer and Director
Bruce E. Gross........................... Vice President and Chief Financial
Officer
Allan J. Pekor........................... Vice President
Marshall H. Ames......................... Vice President
Jonathan M. Jaffe........................ Vice President and Director
David B. McCain.......................... Vice President, General Counsel and
Secretary
Waynewright Malcolm...................... Vice President and Treasurer
Diane J. Bessette........................ Vice President and Controller
Craig M. Johnson......................... Vice President-Community Development
Irving Bolotin........................... Director
R. Kirk Landon........................... Director
Sidney Lapidus........................... Director
Reuben S. Leibowitz...................... Director
Steven J. Saiontz........................ Director
Arnold P. Rosen.......................... Director
Steven L. Gerard(1)...................... Director
Herve Ripault(1)......................... Director
</TABLE>
---------------
(1) Mr. Strudler was the co-chief executive officer of U.S. Home and was a
Director of U.S. Home. Each of Messrs. Gerard and Ripault was a Director of
U.S. Home.
For information regarding the ages and business backgrounds of our
executive officers, please refer to the caption "Directors and Executive
Officers of the Registrant" in Part III of our Annual Report on Form 10-K for
the fiscal year ended November 30, 1999, which is incorporated in this document
by reference. Similar information regarding our directors appears in our proxy
statement for our 2000 Annual Meeting of Stockholders. Information regarding
Robert J. Strudler, Steven L. Gerard, Craig M. Johnson and Herve Ripault may be
found in U.S. Home's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, which is incorporated in this document by reference.
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<PAGE> 34
DESCRIPTION OF NEW SENIOR SECURED CREDIT FACILITIES
SENIOR SECURED CREDIT FACILITIES
Concurrently with the sale of the notes, we entered into a credit agreement
with a syndicate of financial institutions which provides up to a maximum amount
of $1.4 billion of senior secured credit facilities (subject to increase as
described below) which we used and will use to finance the acquisition of U.S.
Home, to refinance our and U.S. Home's existing indebtedness, including U.S.
Home's public debt securities which were the subject of our tender offer and
consent solicitation, and for working capital and other general corporate
purposes.
The senior secured credit facilities consist of: a $700 million five-year
revolving credit facility, a $300 million 364-day revolving credit facility and
a $400 million seven-year term loan B. The five-year revolving credit facility
and/or the term loan B may be increased, subject to the administrative agent's
approval, by not more than $100 million in the aggregate (but without any
obligation of any lender to increase its commitment). Amounts under each of the
revolving credit facilities may be repaid and reborrowed prior to the final
maturity date. Bank One, N.A. will be the administrative agent and Bankers Trust
Company will be syndication agent for the credit facilities. Affiliates of Banc
of America Securities LLC and Credit Lyonnais Securities (USA) Inc. will be the
co-documentation agents for the credit facilities. An affiliate of Wachovia
Securities, Inc. will be a lender under the credit facilities. Banc One Capital
Markets, Inc. and Deutsche Bank Securities Inc. will be the lead arrangers and
joint book managers.
REVOLVING CREDIT FACILITIES
The senior secured credit facilities include a five-year revolving credit
facility of $700 million, of which up to $100 million is available for letters
of credit and $30 million is available for swingline loans.
The senior secured credit facilities also include a 364-day revolving
credit facility of $300 million, which may be extended annually by the lenders
at our request. This facility will generally be convertible to a term loan on
any anniversary on which it is not extended by the lenders. The term loan would
then amortize in equal quarterly installments, and mature on the fifth
anniversary of the closing.
To the extent there are U.S. Home notes that were not tendered pursuant to
our cash tender offer and consent solicitation or the offer U.S. Home will be
required to make after the merger closes, we will have the choice of: (1)
permanently reducing the revolving credit facilities by the principal amount of
those U.S. Home notes that remain outstanding (first, to the 364-day revolving
credit facility, then to the five-year revolving credit facility); (2) defeasing
the remaining U.S. Home notes that are outstanding; or (3) any combination of
(1) and (2). Until approximately 90 days after the closing of the U.S. Home
acquisition, the amount of any potential revolver commitment reduction will
remain committed by lenders, but availability for this portion of the revolving
credit facilities will be limited only to fund the principal amount of newly
retired U.S. Home notes. Supplemental indentures have been signed to reflect
amendments to the indentures under which the U.S. Home notes were issued. Those
amendments became operative concurrently with the sale of the notes.
TERM LOAN B
The senior secured credit facilities include a seven-year term loan B in an
aggregate principal amount of $400 million. Loans under this part of the
facilities were drawn in full on closing of the financing and will be amortized
in equal quarterly principal payments of $1.0 million on the first day of each
calendar quarter prior to maturity, with the balance to be paid at maturity.
INTEREST RATES AND FEES
The applicable margin spread for eurodollar rate loans and the per annum
percentage used to calculate the unused commitment fee will be determined by
reference to a pricing schedule which is based
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<PAGE> 35
upon our leverage ratio and the credit ratings for the senior secured credit
facilities. The applicable margin for the revolvers ranges between 100 basis
points and 225 basis points, depending upon the pricing schedule. The applicable
margin for the term loan B ranges between 250 basis points and 300 basis points,
depending upon the pricing schedule. Undrawn commitment fees on the revolving
credit facilities generally range between 17.5 basis points and 45 basis points
per annum. A prepayment premium based on the principal amount prepaid will be
required for any term loan B prepayments made on or before the first anniversary
of the closing of the financing.
COVENANTS AND BORROWING LIMITS
The senior secured credit facilities contain affirmative and negative
covenants. The covenants include: (1) restrictions on dispositions, mergers and
sales of assets, changes in business activities, transactions with affiliates,
dividend and other distributions, payment or prepayment of subordinated debt,
investments and acquisitions and the incurrence of liens; and (2) the following
financial covenants: (a) a maximum leverage ratio, (b) a minimum interest
coverage ratio, (c) a maximum subsidiary indebtedness and guarantee obligations
test, (d) a minimum adjusted tangible net worth test, (e) a limitation on
speculative inventories, (f) a limitation on investment in certain subsidiaries
and (g) a land/net worth ratio.
The senior secured credit facilities also contain a borrowing limit
governing total senior debt at any time that the facilities are rated below
investment grade by both Moody's Investors Service and Standard & Poor's.
EVENTS OF DEFAULT
Events of default under the senior secured credit facilities include
non-payment of principal, interest or fees, violation of covenants, inaccuracy
of representations and warranties in any material respect, bankruptcy and
insolvency events, cross-defaults and a default in the event of a change of
control. If an event of default occurs, the lenders under the senior secured
credit facilities will be entitled to take various actions, including
accelerating the amounts due under the senior secured credit facilities and
requiring immediate repayment of all amounts outstanding.
GUARANTEES AND SECURITY
All obligations under the senior secured credit facilities and under any
interest rate protection and other hedging agreements with any lender have been
guaranteed by substantially all of our subsidiaries except our mortgage and
title reinsurance services subsidiaries.
All obligations under the senior secured credit facilities, the guarantees
and any interest rate protection and other hedging agreements with any lender
have been secured by pledges of all capital stock in our significant
subsidiaries, excluding our mortgage services subsidiaries. The collateral will
be subject to a collateral trust, with Bank One, N.A. as collateral trustee, the
beneficiaries of which will be the lenders and the holders of our existing
7 5/8% senior notes due 2009 and our zero coupon senior convertible debentures
due 2018.
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<PAGE> 36
DESCRIPTION OF CERTAIN OTHER INDEBTEDNESS OF LENNAR
7 5/8% SENIOR NOTES DUE 2009
On February 19, 1999, we sold $282 million principal amount of 7 5/8%
senior notes due 2009. The 7 5/8% senior notes will mature on March 1, 2009.
Interest is payable on each March 1 and September 1. The 7 5/8% senior notes
contain covenants limiting our ability to incur liens on our assets and
properties and to enter into certain sale and leaseback transactions.
The 7 5/8% senior notes are equally and ratably secured by the stock which
secures the senior secured credit facilities described above. Our obligations
under the 7 5/8% senior notes also have been guaranteed by the guarantors of the
notes.
ZERO COUPON SENIOR CONVERTIBLE DEBENTURES DUE 2018
In July and August 1998, we sold $493 million principal amount at maturity
of our zero coupon senior convertible debentures due 2018, for gross proceeds of
$229 million. The debentures will mature on July 29, 2018. The issue price of
the debentures of $464.13 per $1,000 principal amount at maturity represents a
yield to maturity of 3.875% per annum. There are no periodic payments of
interest. Each debenture is convertible into shares of our common stock at a
conversion rate of 12.3768 shares per $1,000 principal amount at maturity
(subject to adjustment to prevent dilution). The debentures contain covenants
limiting our ability to incur liens on our assets and properties and to enter
into certain sale and leaseback transactions. Holders of the debentures have the
option to require us to repurchase the debentures on any of the fifth, tenth, or
fifteenth anniversary dates from the issue date for the initial issue price plus
accrued original issue discount through the date of repurchase. We have the
option to satisfy the repurchases with any combination of cash and/or shares of
our common stock. We will have the option to redeem the debentures, in cash, at
any time after the fifth anniversary date for the initial issue price plus
accrued original issue discount.
The debentures are equally and ratably secured by the stock which secures
the senior secured credit facilities described above. Our obligations under the
debentures also have been guaranteed by the guarantors of the notes.
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<PAGE> 37
DESCRIPTION OF NOTES
We have summarized certain terms of the Notes and the Indenture in this
section. This summary is not complete.
We issued the Notes under an indenture among us, the guarantors and Bank
One Trust Company, N.A., as trustee (the "Trustee"), dated as of May 3, 2000
(the "Indenture"). Because of the exchange offer, the Indenture has become
subject to the Trust Indenture Act of 1939, as amended. The following summary of
certain provisions of the Indenture does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, the Trust
Indenture Act, and to all of the provisions of the Indenture, including the
definitions of certain terms. A copy of the Indenture may be obtained from us or
the initial purchasers. Any series A notes that remain outstanding after the
completion of the exchange offer, together with the series B notes issued in
connection with the exchange offer, will be treated as a single class of
securities under the Indenture. Capitalized terms used but not defined in this
section have the meanings specified in the Indenture. For purposes of this
"Description of Notes", "Lennar", "we" or "us" refers to Lennar Corporation and
does not include our subsidiaries except in references to financial data
determined on a consolidated basis. References to "U.S. Home" refer to U.S. Home
Corporation prior to its merger with Len Acquisition Corporation, a wholly owned
subsidiary of Lennar, and to the surviving corporation of that transaction after
its consummation. References to "Notes" include references to the series B
notes.
GENERAL
The Notes will bear interest from the date the notes are first issued under
the Indenture at the rate per annum shown on the cover page of the prospectus,
payable semi-annually on June 1 and December 1 of each year, commencing December
1, 2000, to Holders of record at the close of business on May 15 or November 15,
as the case may be, immediately preceding each such interest payment date. The
Notes will mature on May 1, 2010, and will be issued in denominations of $1,000
and integral multiples thereof.
The Notes will be limited to an aggregate principal amount of $525 million,
of which $325 million will be issued in the Offering. Additional Notes of up to
$200 million aggregate amount may be issued in one or more series from time to
time subject to the limitations set forth under "Certain Covenants --
Limitations on Indebtedness". The Notes will be guaranteed by each of the
Guarantors pursuant to the guarantees (the "Guarantees") described below.
The Notes will be general unsecured obligations of Lennar and will rank
senior in right of payment to all future Indebtedness of Lennar that is, by its
terms, expressly subordinated in right of payment to the Notes and any other
senior Indebtedness and pari passu in right of payment with all existing and
future unsecured Indebtedness of Lennar that is not so subordinated. The
Guarantees will be general unsecured obligations of the Guarantors and will rank
senior in right of payment to all future Indebtedness of the Guarantors that is,
by its terms, expressly subordinated in right of payment to the Guarantees or
any other senior Indebtedness of the Guarantors and will rank pari passu in
right of payment with all existing and future unsecured Indebtedness of the
Guarantors that is not so subordinated.
Secured creditors of Lennar and the Guarantors will have a claim on the
assets which secure the obligations of Lennar and the Guarantors to such
creditors prior to claims of holders of the Notes against those assets. At
February 29, 2000, adjusted to give effect to the transactions described under
"Capitalization", Lennar and the Guarantors would have had approximately $1.8
billion (including the Notes) of Indebtedness outstanding, substantially all of
which would have been secured indebtedness and none of which would have been
subordinated to the Notes.
REDEMPTION
No Mandatory Redemption. There will be no sinking fund for or other
mandatory redemption of the Notes.
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<PAGE> 38
Optional Redemption. The Notes will be redeemable, at Lennar's option, in
whole or in part at any time or from time to time, on or after May 1, 2005, upon
not less than 30 nor more than 60 days' notice, at the following redemption
prices (expressed as percentages of the principal amount thereof) if redeemed
during the twelve-month period commencing on May 1 of the years set forth below,
plus, in each case, accrued interest thereon to the date of redemption:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2005........................................................ 104.975%
2006........................................................ 103.317
2007........................................................ 101.658
2008 and thereafter......................................... 100.000
</TABLE>
Optional Redemption upon Equity Offering. Notwithstanding the foregoing,
at any time, or from time to time, on or prior to May 1, 2003, Lennar, at its
option, may redeem, with the net cash proceeds of one or more Equity Offerings
by Lennar, up to 35% of the aggregate principal amount of the Notes originally
issued, at a redemption price equal to 109.950% of the principal amount of such
Notes, plus accrued interest thereon to the date of redemption; provided,
however, that after each such redemption not less than 65% of the aggregate
principal amount of Notes originally issued (excluding any Notes held by Lennar
or any of its Subsidiaries) remains outstanding. Notice of any such redemption
must be given within 60 days after the date of the closing of the relevant
Equity Offering.
Redemption Procedures. Selection of the Notes or portions thereof for
redemption pursuant to the foregoing shall be made by the Trustee by lot, on a
pro rata basis, or on such other basis as the Trustee deems fair and appropriate
(subject to the procedures of The Depository Trust Company). Notice of
redemption will be mailed 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 ceases to
accrue on the Notes or portions thereof called for redemption.
THE GUARANTEES
Each of the Guarantors will (so long as it remains a Restricted Subsidiary)
unconditionally guarantee on a joint and several basis all of Lennar's
obligations under the Notes, including its obligations to pay principal,
premium, if any, and interest with respect to the Notes. The Guarantees will be
general unsecured obligations of the Guarantors and will rank pari passu with
all existing and future unsecured Indebtedness of the Guarantors that is not, by
its terms, expressly subordinated in right of payment to the Guarantees or other
senior Indebtedness of the Guarantors. The obligations of each Guarantor are
limited to the maximum amount which, after giving effect to all other contingent
and fixed liabilities of such Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to its contribution obligations under the Indenture, will result in the
obligations of such Guarantor under its Guarantee not constituting a fraudulent
conveyance or fraudulent transfer under federal or state law. Each Guarantor
that makes a payment or distribution under a Guarantee shall be entitled to a
contribution from each other Guarantor in an amount pro rata, based on the net
assets of each Guarantor, determined in accordance with GAAP.
The Indenture requires that each existing and future Restricted Subsidiary
(other than any Foreign Subsidiary) that guarantees any Indebtedness of Lennar
or any other Restricted Subsidiary be a Guarantor. Lennar will be permitted to
cause any Unrestricted Subsidiary to be a Guarantor.
The Indenture provides that if all or substantially all of the assets of
any Guarantor or all of the Capital Stock of any Guarantor is sold (including by
consolidation, merger, issuance or otherwise) or disposed of (including by
liquidation, dissolution or otherwise) by Lennar or any of its Subsidiaries, or,
unless Lennar elects otherwise, if any Guarantor is designated an Unrestricted
Subsidiary in accordance with the terms of the Indenture, then such Guarantor
(in the event of a sale or other disposition of all of
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<PAGE> 39
the Capital Stock of such Guarantor or a designation as an Unrestricted
Subsidiary) or the Person acquiring such assets (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) shall
be deemed automatically and unconditionally released and discharged from any of
its obligations under the Indenture without any further action on the part of
the Trustee or any Holder of the Notes. An Unrestricted Subsidiary that is a
Guarantor shall be deemed automatically and unconditionally released and
discharged from all obligations under its Guarantee upon notice from Lennar to
the Trustee to such effect, without any further action required on the part of
the Trustee or any Holder.
Except as provided in "Certain Covenants" below, Lennar is not restricted
from selling or otherwise disposing of any of the Guarantors. A sale of assets
or Capital Stock of a Guarantor may constitute an Asset Disposition subject to
the "Limitations on Disposition of Assets" covenant.
CERTAIN COVENANTS
The following is a summary of certain covenants that are contained in the
Indenture. Such covenants are applicable (unless waived or amended as permitted
by the Indenture) so long as any of the Notes are outstanding, except as
otherwise described under "Defeasance of Indenture" or, to the extent described
below, that specified covenants will not apply during periods when the Notes
maintain the Required Rating.
REPURCHASE OF NOTES UPON CHANGE IN CONTROL. If a Change in Control occurs,
each Holder of Notes can require Lennar to repurchase all of that Holder's
Notes, or any portion of the principal amount of those Notes that is an integral
multiple of $1,000. Lennar will make the repurchase on a date (the "Change in
Control Purchase Date") that is at least 60 days, and no more than 90 days,
after the date of the Change in Control at a cash purchase price (the "Change in
Control Purchase Price") equal to 101% of the principal amount of those Notes,
plus accrued and unpaid interest to the date of repurchase.
Within 30 days after a Change in Control, Lennar or, at Lennar's request,
the Trustee, will mail to all Holders a notice (a "Change in Control Notice") of
such Change in Control and of the resulting repurchase right. Lennar will also
deliver a copy of Lennar's Change in Control Notice to the Trustee. To exercise
the repurchase right, a Holder must deliver to the Trustee on or before the
Change in Control Purchase Date, written notice of the Holder's exercise of that
right, together with the Notes with respect to which the right is being
exercised, duly endorsed for transfer to Lennar (a "Change in Control Purchase
Notice").
A "Change in Control" will be deemed to have occurred at such time after
the original issuance of the Notes as:
(1) any Person (including any syndicate or group deemed to be a
"person" under Section 13(d)(3) of the Exchange Act), other than Lennar,
any Subsidiary, any employee benefit plan of Lennar or any Subsidiary, or
Permitted Holders is or becomes the beneficial owner, directly or
indirectly, through a purchase or other acquisition transaction or series
of transactions (other than a merger or consolidation involving Lennar), of
shares of Lennar's Capital Stock entitling such Person to exercise in
excess of 50% of the total voting power of all shares of Lennar's Capital
Stock entitled to vote generally in the election of directors;
(2) Lennar consolidates with, or Lennar merges into, any other Person,
any other Person merges into Lennar or Lennar sells or transfers its
assets, as an entirety or substantially as an entirety, to another Person
(other than (a) any such transaction pursuant to which the holders of
Capital Stock of Lennar entitled to vote generally in the election of
directors, immediately prior to such transaction have, directly or
indirectly, shares of Capital Stock of the continuing or surviving
corporation immediately after such transaction which entitle such holders
to exercise in excess of 50% of the total voting power of all shares of
Capital Stock of the continuing or surviving corporation entitled to vote
generally in the election of directors and (b) any merger (i) which does
not result in any reclassification, conversion, exchange or cancellation of
our outstanding shares of Lennar's Common Equity or (ii) which Lennar
effects solely to change the jurisdiction of its incorporation and results
in
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a reclassification, conversion or exchange of outstanding shares of
Lennar's Common Equity solely into shares of stock carrying substantially
the same relative rights as such Common Equity); or
(3) if the individuals who serve on Lennar's Board of Directors at the
beginning of the two-year period immediately preceding such change
(together with any other individual whose election to Lennar's Board of
Directors or whose nomination for election by Lennar's stockholders was
approved by a vote of at least a majority of the directors then in office
either who were 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 directors then in office.
The term "beneficial owner" will be determined in accordance with Rule
13d-3 under the Exchange Act.
"Permitted Holders" mean any holders of Lennar's outstanding Class B Common
Stock as of the Issue Date and any permitted transferees of Class B Common Stock
under the terms of Lennar's Certificate of Incorporation as it exists on the
Issue Date.
To the extent applicable, Lennar will comply with the provisions of Rule
14e-1 under the Exchange Act and other securities laws and regulations in
connection with any offer by Lennar to repurchase Notes upon a Change in
Control.
Lennar will not be required to make a Change in Control offer if a third
party makes the Change in Control offer in compliance with the requirements of
the Indenture and purchases all Notes validly tendered and not withdrawn under
such Change in Control offer in response to such offer.
The Change in Control feature of the Notes may discourage a takeover of
Lennar or make such a takeover and, thus, the removal of incumbent management,
more difficult. These provisions would not necessarily protect Holders of the
Notes from (1) a highly leveraged transaction, (2) certain changes in who
controls Lennar or (3) other transactions involving Lennar that may adversely
affect Holders.
If a Change in Control occurs, it is substantially likely that a change in
control will also have occurred under the terms of Lennar's existing Senior
Notes. If a Change in Control were to occur, there could be no assurance that
Lennar would have sufficient financial resources, or would be able to arrange
financing, to pay the repurchase price for all Notes tendered by Holders. Any
failure by Lennar to repurchase the Notes when required following a Change in
Control would result in an Event of Default under the Indenture.
With respect to any disposition of assets, the phrase "all or substantially
all" as used in the Indenture (including as set forth under "Limitations on
Mergers, Consolidations and Sales of Assets" below) varies according to the
facts and circumstances of the subject transaction, has no clearly established
meaning under New York law (which governs the Indenture) and is subject to
judicial interpretation. Accordingly, in certain circumstances there may be a
degree of uncertainty in ascertaining whether a particular transaction would
involve a disposition of "all or substantially all" of the assets of Lennar, and
therefore it may be unclear as to whether a Change in Control has occurred and
whether the Holders have the right to require Lennar to repurchase Notes.
LIMITATIONS ON INDEBTEDNESS. The Indenture provides that, unless the Notes
are rated the Required Rating (during which time the following covenant will not
be in effect), Lennar will not, and will not cause or permit any Restricted
Subsidiary, directly or indirectly, to, create, incur, assume, become liable for
or guarantee the payment of (collectively, an "incurrence") any Indebtedness
(including Acquired Indebtedness and any additional Notes); provided, that
Lennar and any Restricted Subsidiary Guarantor may incur Indebtedness (including
Acquired Indebtedness) if, after giving effect thereto and the application of
the proceeds therefrom, the Consolidated Fixed Charge Coverage Ratio on the date
thereof would be at least 2.0 to 1.0.
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Notwithstanding the foregoing, the provisions of the Indenture will not
prevent the incurrence of:
(1) Permitted Indebtedness,
(2) Refinancing Indebtedness,
(3) Non-Recourse Indebtedness of Lennar or any Restricted Subsidiary
Guarantor,
(4) any Guarantee of Indebtedness of Lennar represented by the Notes,
and
(5) any guarantee of Indebtedness incurred under Credit Facilities in
compliance with the Indenture.
For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness may be incurred through the first paragraph of this
covenant or by meeting the criteria of one or more of the types of Indebtedness
described in the second paragraph of this covenant (or the definitions of the
terms used therein), Lennar, in its sole discretion,
(1) may classify such item of Indebtedness under and comply with
either of such paragraphs (or any of such definitions), as applicable,
(2) may classify and divide such item of Indebtedness into more than
one of such paragraphs (or definitions), as applicable, and
(3) may elect to comply with such paragraphs (or definitions), as
applicable, in any order.
Lennar will not, and will not cause or permit any Guarantor to, directly or
indirectly, in any event incur any Indebtedness that purports to be by its terms
(or by the terms of any agreement governing such Indebtedness) subordinated to
any other Indebtedness of Lennar or of such Guarantor, as the case may be,
unless such Indebtedness is also by its terms (or by the terms of any agreement
governing such Indebtedness) made expressly subordinated to the Notes or the
Guarantee of such Guarantor, as the case may be, to the same extent and in the
same manner as such Indebtedness is subordinated to such other Indebtedness of
Lennar or such Guarantor, as the case may be.
LIMITATIONS ON RESTRICTED PAYMENTS. The Indenture provides that, unless
the Notes are rated the Required Rating (during which time the following
covenant will not be in effect), Lennar will not, and will not cause or permit
any Restricted Subsidiary to, directly or indirectly, make any Restricted
Payment unless:
(1) no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such
Restricted Payment;
(2) immediately after giving effect to such Restricted Payment, Lennar
could incur at least $1.00 of Indebtedness pursuant to the first paragraph
of the "Limitations on Indebtedness" covenant; and
(3) immediately after giving effect to such Restricted Payment, the
aggregate amount of all Restricted Payments (including the Fair Market
Value of any non-cash Restricted Payment) declared or made after the Issue
Date does not exceed the sum of:
(a) 50% of the Consolidated Net Income of Lennar on a cumulative basis
during the period (taken as one accounting period) from and including June
1, 2000 and ending on the last day of Lennar's most recent fiscal quarter
ending at least 45 days prior to the date of such Restricted Payment (or in
the event such Consolidated Net Income shall be a deficit, minus 100% of
such deficit), plus
(b) 100% of the aggregate net cash proceeds of and the fair market
value of Property received by Lennar from (1) any capital contribution to
Lennar after the Issue Date or any issue or sale after the Issue Date of
Qualified Stock (other than to any Subsidiary of Lennar and excluding the
proceeds of any Qualified Stock to the extent applied to the optional
redemption of Notes as described under "Redemption -- Optional Redemption
upon Equity Offering") and (2) the issue or sale after the Issue Date of
any Indebtedness or other securities of Lennar convertible into or
exercisable for Qualified Stock of Lennar that have been so converted or
exercised, as the case may be, plus
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(c) in the case of the disposition or repayment or other return of
capital of any Investment constituting a Restricted Payment made after the
Issue Date, an amount (to the extent not included in the calculation of the
Consolidated Net Income referred to in (a)) equal to the lesser of (x) the
return of capital with respect to such Investment (including by dividend,
distribution or sale of Capital Stock) and (y) the amount of such
Investment that was treated as a Restricted Payment, in either case, less
the cost of the disposition or repayment of such Investment (to the extent
not included in the calculation of the Consolidated Net Income referred to
in (a)), plus
(d) 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 the Consolidated Net Income referred to in (a)), an
amount equal to the lesser of (x) the proportionate interest of Lennar or a
Restricted Subsidiary in an amount equal to the excess of (I) the total
assets of such Subsidiary, valued on an aggregate basis at the lesser of
book value and Fair Market Value thereof, over (II) the total liabilities
of such Subsidiary, determined in accordance with GAAP, and (y) the
Designation Amount at the time of such Subsidiary's designation as an
Unrestricted Subsidiary, plus
(e) $75 million.
The foregoing clauses (2) and (3) will not prohibit the following
Restricted Payments:
(A) the payment of any dividend or the consummation of any irrevocable
redemption within 60 days after the date of the declaration of such
dividend or the giving of such irrevocable redemption notice if such
dividend or redemption would have been permitted on the date of declaration
or giving of the irrevocable redemption notice without violation of the
provisions of the Indenture;
(B) if no Default or Event of Default shall have occurred and be
continuing, the repurchase, redemption or retirement of any shares of
Capital Stock of Lennar in exchange for, or out of the net proceeds of the
substantially concurrent sale (other than to a Subsidiary of Lennar) of,
shares of Qualified Stock (to the extent not applied to the optional
redemption of Notes as described under "Redemption -- Optional Redemption
upon Equity Offering");
(C) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any Indebtedness of Lennar or any Restricted
Subsidiary that is subordinate or junior in right of payment to the Notes
or the Guarantees in exchange for, or out of the net proceeds of the
substantially concurrent sale (other than to a Subsidiary of Lennar) of,
shares of Qualified Stock (to the extent not applied to the optional
redemption of Notes as described under "Redemption -- Optional Redemption
upon Equity Offering") or Refinancing Indebtedness;
(D) if no Default or Event of Default shall have occurred and be
continuing, the purchase, redemption or other acquisition, cancellation or
retirement for value of Capital Stock, or options, warrants, equity
appreciation rights or other rights to purchase or acquire Capital Stock,
of Lennar or any Subsidiary held by officers or employees or former
officers or employees of Lennar or any Subsidiary (or their estates or
beneficiaries under their estates) not to exceed $500,000 in any calendar
year plus $5 million in the aggregate since the Issue Date;
(E) the payment of dividends by a Restricted Subsidiary to the holders
of its Capital Stock pro rata or by Lennar in respect of Disqualified Stock
permitted to have been issued as described under "Limitations on
Indebtedness"; and
(F) the acquisition and cancellation by U.S. Home of U.S. Home's 8.88%
Senior Subordinated Notes due 2007 or U.S. Home's 8.875% Senior
Subordinated Notes due 2009 upon exercise by the holders of the "change of
control put" in connection with the acquisition of U.S. Home by Lennar or
other repayment or defeasance of such notes within 91 days after the Issue
Date;
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provided, however, that each Restricted Payment described in clauses (A)
and (B) of this sentence shall be taken into account for purposes of
computing the aggregate amount of all Restricted Payments pursuant to
clause (3) of the immediately preceding paragraph.
For purposes of determining the aggregate and permitted amounts of
Restricted Payments made, (i) the amount of any guarantee of any Investment in
any Person that was initially treated as a Restricted Payment and which was
subsequently terminated or expired, net of any amounts paid by Lennar or any
Restricted Subsidiary in respect of such guarantee, shall be deducted and (ii)
Restricted Payments made after the Issue Date pursuant to clauses (A) through
(D) above shall be included in such calculation.
In determining the "Fair Market Value of Property" for purposes of clause
(3) of the first paragraph of this covenant, Property other than cash, Cash
Equivalents and Marketable Securities shall be deemed to be equal in value to
the "equity value" of the Capital Stock or other securities issued in exchange
therefor. The "equity value" of such Capital Stock or other securities shall be
equal to (i) the number of shares of Common Equity issued in the transaction (or
issuable upon conversion or exercise of the Capital Stock or other securities
issued in the transaction) multiplied by the closing sale price of the Common
Equity on its principal market on the date of the transaction (less,in the case
of Capital Stock or other securities which require the payment of consideration
at the time of conversion or exercise, the aggregate consideration payable
thereupon) or (ii) if the Common Equity is not then traded on the New York Stock
Exchange, American Stock Exchange or Nasdaq National Market, or if the Capital
Stock or other securities issued in the transaction do not consist of Common
Equity (or Capital Stock or other securities convertible into or exercisable for
Common Equity), the value of such Capital Stock or other securities as
determined by a nationally recognized investment banking firm retained by the
Board of Directors of Lennar.
LIMITATIONS ON TRANSACTIONS WITH AFFILIATES. The Indenture provides that,
unless the Notes are rated the Required Rating (during which time the following
covenant will not be in effect), Lennar will not, and will not cause or permit
any Restricted Subsidiary to, make any loan, advance, guarantee or capital
contribution to, or for the benefit of, or sell, lease, transfer or otherwise
dispose of any property 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 of Lennar
or any Affiliate of any of Lennar's Subsidiaries or any holder of 10% or more of
the Common Equity of Lennar (including any Affiliates of such holders), in a
single transaction or series of related transactions (each, an "Affiliate
Transaction"), except for any Affiliate Transaction the terms of which are at
least as favorable as the terms which could be obtained by Lennar 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 such a holder, an Affiliate of
such a holder or an Affiliate of Lennar or any of Lennar's Subsidiaries.
In addition, Lennar will not, and will not cause or permit any Restricted
Subsidiary to, enter into an Affiliate Transaction unless:
(1) with respect to any such Affiliate Transaction involving or having
a value of more than $5 million, Lennar shall have (x) obtained the
approval of a majority of the Board of Directors of Lennar and (y) either
obtained the approval of a majority of Lennar's disinterested directors or
obtained an opinion of a qualified independent financial advisor or, if
applicable, a qualified independent real estate appraisal firm to the
effect that such Affiliate Transaction is fair to Lennar or such Restricted
Subsidiary, as the case may be, from a financial point of view and
(2) with respect to any such Affiliate Transaction involving or having
a value of more than $25 million, Lennar shall have (x) obtained the
approval of a majority of the Board of Directors of Lennar and (y)
delivered to the Trustee an opinion of a qualified independent financial
advisor or, if applicable, a qualified independent real estate appraisal
firm to the effect that such Affiliate Transaction is fair to Lennar or
such Restricted Subsidiary, as the case may be, from a financial point of
view.
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The Indenture will also provide that notwithstanding the foregoing, an
Affiliate Transaction will not include:
(1) reasonable fees and compensation paid to, and indemnity provided
on behalf of, officers, directors, employees, consultants or agents of
Lennar or any Subsidiary of Lennar as determined in good faith by Lennar's
Board of Directors or senior management,
(2) any contract, agreement or understanding with, or for the benefit
of, or plan for the benefit of, employees of Lennar or its Subsidiaries
generally (in their capacities as such) that has been approved by the Board
of Directors of Lennar,
(3) Capital Stock issuances to directors, officers and employees of
Lennar or its Subsidiaries pursuant to plans approved by the stockholders
of Lennar,
(4) any Restricted Payment otherwise permitted under the "Limitations
on Restricted Payments" covenant,
(5) any transaction between or among Lennar and one or more Restricted
Subsidiaries or between or among Restricted Subsidiaries (provided,
however, no such transaction shall involve any other Affiliate of Lennar
(other than an Unrestricted Subsidiary to the extent the applicable amount
constitutes a Restricted Payment permitted by the Indenture)),
(6) any transaction between one or more Restricted Subsidiaries and
one or more Unrestricted Subsidiaries where all of the payments to, or
other benefits conferred upon, such Unrestricted Subsidiaries are
substantially contemporaneously dividended, or otherwise distributed or
transferred without charge, to Lennar or a Restricted Subsidiary, and
(7) transactions between or among Lennar or any Restricted Subsidiary
thereof and Lennar Land Partners I and Lennar Land Partners II, both
Delaware general partnerships (collectively the "Land Partnership");
provided, that such transactions are (i) permitted by and are effected in
accordance with the terms of the Partnership Agreement of the Land
Partnership and the By-Laws of Lennar, in each case as in effect on the
Issue Date and (ii) are in any event approved by a majority of the Board of
Directors of Lennar.
LIMITATIONS ON DISPOSITIONS OF ASSETS. The Indenture provides that unless
the Notes are rated the Required Rating (during which time the following
covenant will not be in effect), Lennar will not, and will not cause or permit
any Restricted Subsidiary to, make any Asset Disposition unless:
(1) Lennar (or such Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Disposition at least equal
to the Fair Market Value thereof, and
(2) not less than 75% of the consideration received by Lennar (or such
Restricted Subsidiary, as the case may be) is in the form of cash, Cash
Equivalents and Marketable Securities.
The amount of any Indebtedness (other than any Indebtedness subordinated to
the Notes) of Lennar or any Restricted Subsidiary that is assumed by the
transferee in such Asset Disposition and for which recourse to Lennar or such
Restricted Subsidiary is released by the obligee shall be deemed to be
consideration required by clause (2) above for purposes of determining the
percentage of such consideration received by Lennar or the Restricted
Subsidiaries.
The Net Cash Proceeds of an Asset Disposition shall, within one year, at
Lennar's election, (a) be used by Lennar or a Restricted Subsidiary to acquire
capital assets for use in the Real Estate Business conducted by Lennar and the
Restricted Subsidiaries or any other business of Lennar or a Restricted
Subsidiary existing at the time of such Asset Disposition or (b) to the extent
not so used, be applied to make an offer to purchase (a "Net Cash Proceeds
Offer") the Notes and, if Lennar or a Restricted Subsidiary elects or is
required to do so, permanently repay, or otherwise permanently reduce the
outstanding amount of any other unsubordinated Indebtedness (on a pro rata basis
if the amount available for such repayment or reduction is less than the
aggregate amount of (i) the principal amount of the Notes tendered in such Net
Cash Proceeds Offer and (ii) the lesser of the principal amount, or accreted
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value, of such other unsubordinated Indebtedness, plus, in each case accrued
interest to the date of repayment or reduction) at 100% of the principal amount
or accreted value thereof, as the case may be, plus accrued interest to the date
of repurchase or reduction.
Notwithstanding the foregoing,
(A) Lennar will not be required to apply such Net Cash Proceeds to the
repurchase of Notes in accordance with clause (b) of the preceding sentence
except to the extent that such Net Cash Proceeds, together with the
aggregate Net Cash Proceeds of prior Asset Dispositions (other than those
so used) which have not been applied in accordance with this provision and
as to which no prior Net Cash Proceeds Offer shall have been made, exceed
5% of Consolidated Tangible Assets,
(B) Lennar will not be required to apply any Net Cash Proceeds to the
repurchase of Notes in accordance with clause (b) of the preceding sentence
if such Net Cash Proceeds relate to an Asset Disposition of an asset of
U.S. Home or any of its Subsidiaries to the extent that the transfer of
such Net Cash Proceeds from U.S. Home to Lennar would violate the terms of
any U.S. Home Existing Debt Issues then outstanding, and
(C) in connection with any Asset Disposition, Lennar and the
Restricted Subsidiaries will not be required to comply with clause (2) of
the first sentence of the first paragraph of this covenant to the extent
that the aggregate non-cash consideration received in connection with such
Asset Disposition, together with the sum of all non-cash consideration
received in connection with all prior Asset Dispositions that has not yet
been converted into cash, does not exceed 5% of Consolidated Tangible
Assets; provided, however, that when any non-cash consideration is
converted into cash, such cash shall constitute Net Cash Proceeds and be
subject to the preceding sentence.
LIMITATIONS ON LIENS. The Indenture provides that Lennar will not, and
will not cause or permit any Restricted Subsidiary to, create, incur, assume or
suffer to exist any Liens, other than Permitted Liens, on any of its Property,
or on any shares of Capital Stock or Indebtedness of any Restricted Subsidiary,
unless contemporaneously therewith or prior thereto all payments due under the
Indenture and the Notes are secured on an equal and ratable basis with the
obligation or liability so secured until such time as such obligation or
liability is no longer secured by a Lien.
LIMITATIONS ON RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES. The
Indenture provides that Lennar will not, and will not cause or permit any
Restricted Subsidiary to, create, assume or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction (other than
encumbrances or restrictions imposed by law or by judicial or regulatory action
or by provisions of leases and other agreements that restrict the assignability
thereof) on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock
or any other interest or participation in, or measured by, its profits,
owned by Lennar or any other Restricted Subsidiary, or pay interest on or
principal of any Indebtedness owed to Lennar or any other Restricted
Subsidiary,
(2) make loans or advances to Lennar or any other Restricted
Subsidiary, or
(3) transfer any of its properties or assets to Lennar or any other
Restricted Subsidiary,
except for:
(a) encumbrances or restrictions existing under or by reason of
applicable law,
(b) covenants or restrictions contained in Indebtedness in effect on
the date of the Indenture as such covenants or restrictions are in effect
on such date,
(c) any restrictions or encumbrances arising under Acquired
Indebtedness; provided, that such encumbrance or restriction applies only
to either the assets that were subject to the restriction or encumbrance at
the time of the acquisition or to the obligor on such Indebtedness and its
Subsidiaries,
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(d) any restrictions or encumbrances arising in connection with
Refinancing Indebtedness; provided, however, that any restrictions and
encumbrances of the type described in this clause (d) that arise under such
Refinancing Indebtedness shall not be materially more restrictive than
those under the agreement creating or evidencing the Indebtedness being
refunded, refinanced, replaced or extended,
(e) any Permitted Lien, or any other agreement restricting the sale or
other disposition of property, securing Indebtedness permitted by the
Indenture if such Permitted Lien or agreement does not expressly restrict
the ability of a Subsidiary of Lennar to pay dividends or make or repay
loans or advances prior to default thereunder,
(f) borrowing base covenants set forth in Credit Facilities,
(g) customary provisions restricting subletting or assignment of any
lease governing a leasehold interest or any license of intellectual
property of Lennar or any Restricted Subsidiary, and
(h) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Restricted
Subsidiary pending the closing of such sale or disposition.
LIMITATION ON PREFERRED STOCK OF RESTRICTED SUBSIDIARIES. Lennar will not
permit any of its Restricted Subsidiaries that is not a Restricted Subsidiary
Guarantor to issue any Preferred Stock to any Person other than Lennar or a
Restricted Subsidiary; provided, however, that any Preferred Stock in any such
Restricted Subsidiary that is owned by any Subsidiary that ceases to be a
Restricted Subsidiary shall be deemed to be issued and shall be treated as an
issuance for purposes of this covenant at the time the Subsidiary in question
ceases to be a Restricted Subsidiary.
LIMITATIONS ON MERGERS, CONSOLIDATIONS AND SALES OF ASSETS. The Indenture
provides that neither Lennar nor any Guarantor will consolidate or merge with or
into, or sell, lease, convey or otherwise dispose of all or substantially all of
its assets (including, without limitation, by way of liquidation or
dissolution), or assign any of its obligations under the Notes, the Guarantees
or the Indenture (as an entirety or substantially in one transaction or in a
series of related transactions), to any Person (in each case other than in a
transaction in which Lennar or a Guarantor is the survivor of a consolidation or
merger, or the transferee in a sale, lease, conveyance or other disposition)
unless:
(1) the Person formed by or surviving such consolidation or merger (if
other than Lennar or the Guarantor, as the case may be), or to which such
sale, lease, conveyance or other disposition or assignment will be made
(collectively, the "Successor"), is a corporation or other legal entity
organized and existing under the laws of the United States or any state
thereof or the District of Columbia, and the Successor assumes by
supplemental indenture in a form reasonably satisfactory to the Trustee all
of the obligations of Lennar or the Guarantor, as the case may be, under
the Notes or a Guarantee, as the case may be, and the Indenture,
(2) immediately after giving effect to such transaction, no Default or
Event of Default has occurred and is continuing,
(3) immediately after giving effect to such transaction involving
Lennar and the use of any net proceeds therefrom, on a pro forma basis, the
Consolidated Net Worth of Lennar or the Successor (in the case of a
transaction involving Lennar), as the case may be, would be at least equal
to the Consolidated Net Worth of Lennar immediately prior to such
transaction (exclusive of any adjustments to Consolidated Net Worth
attributable to transaction costs) less any amount treated as a Restricted
Payment in connection with such transaction in accordance with the
Indenture, and
(4) immediately after giving effect to such transaction, the Successor
could incur at least $1.00 of Indebtedness pursuant to the first paragraph
of the "Limitation on Indebtedness" covenant so long as such covenant is
then in effect.
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The foregoing provisions shall not apply to:
(a) a transaction involving the sale or disposition of Capital Stock
of a Guarantor, or the consolidation or merger of a Guarantor, that in any
such case results in such Guarantor being released from its Guarantee as
provided under "The Guarantees" above, or the sale, lease, conveyance or
other disposition of all or substantially all of the assets of a Guarantor,
or
(b) a transaction the purpose of which is to change the state of
organization of Lennar or any Guarantor.
CONDUCT OF BUSINESS. Lennar will, and will cause its Restricted
Subsidiaries to, engage primarily in the Real Estate Business and other
activities related to or arising out of any activities comprised in the Real
Estate Business.
REPORTS TO HOLDERS OF NOTES. Lennar shall file with the Commission the
annual reports and the information, documents and other reports required to be
filed pursuant to Section 13 or 15(d) of the Exchange Act. Lennar shall file
with the Trustee and mail to each Holder of record of Notes such reports,
information and documents within 15 days after it files them with the
Commission. In the event that Lennar is no longer subject to these periodic
requirements of the Exchange Act, it will nonetheless continue to file reports
with the Commission and the Trustee and mail such reports to each Holder of
Notes as if it were subject to such reporting requirements. Regardless of
whether Lennar is required to furnish such reports to its stockholders pursuant
to the Exchange Act, Lennar will cause its consolidated financial statements and
a "Management's Discussion and Analysis of Results of Operations and Financial
Condition" written report, similar to those that would have been required to
appear in annual or quarterly reports, to be delivered to Holders of Notes.
EVENTS OF DEFAULT. The following are Events of Default under the
Indenture:
(1) the failure by Lennar to pay interest (including Additional
Interest) on any Note when the same becomes due and payable and the
continuance of any such failure for a period of 30 days;
(2) the failure by Lennar to pay the principal or repurchase price of
or premium on any Note when the same becomes due and payable at maturity,
upon redemption, acceleration or otherwise;
(3) the failure by Lennar or any Restricted Subsidiary to comply with
any of its agreements or covenants in, or provisions of, the Notes, the
Guarantees or the Indenture and such failure continues for the period and
after the notice specified below (except in the case of a default under
covenants described under "Certain Covenants -- Repurchase of Notes upon
Change in Control" and "Limitations on Mergers, Consolidations and Sales of
Assets", which will constitute Events of Default with notice but without
passage of time);
(4) the acceleration of any Indebtedness (other than Non-Recourse
Indebtedness) of Lennar or any Restricted Subsidiary that has an
outstanding principal amount of $20 million or more, individually or in the
aggregate, and such acceleration is not rescinded, or such Indebtedness is
not satisfied, in either case within 30 days after such acceleration;
(5) the failure by Lennar or any Restricted Subsidiary to make any
required payment due in respect of Indebtedness (other than the Notes and
any Non-Recourse Indebtedness) of Lennar or any Restricted Subsidiary that
has an outstanding principal amount of $20 million or more, individually or
in the aggregate, within 30 days of such payment becoming due and payable;
(6) a final judgment or judgments that exceed $20 million or more,
individually or in the aggregate, for the payment of money having been
entered by a court or courts of competent jurisdiction against Lennar or
any of its Restricted Subsidiaries and such judgment or judgments is not
satisfied, stayed, annulled or rescinded within 60 days of being entered
and is not being contested in good faith by appropriate proceedings;
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(7) Lennar or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against Lennar or any Restricted Subsidiary that is
a Significant Subsidiary as debtor in an involuntary case,
(B) appoints a Custodian of Lennar or any Restricted Subsidiary that
is a Significant Subsidiary or a Custodian for all or substantially
all of the property of Lennar or any Restricted Subsidiary that is a
Significant Subsidiary, or
(C) orders the liquidation of Lennar or any Restricted Subsidiary
that is a Significant Subsidiary,
and, in the case of (A), (B), and (C), the order or decree remains
unstayed and in effect for 60 days; or
(9) any Guarantee of a Restricted Subsidiary Guarantor ceases to be in
full force and effect (other than in accordance with the terms of such
Guarantee and the Indenture) or is declared null and void and unenforceable
or found to be invalid, or any Restricted Subsidiary Guarantor denies its
liability under its Guarantee (other than by reason of release of a
Restricted Subsidiary Guarantor from its Guarantee in accordance with the
terms of the Indenture and the Guarantee).
A Default as described in subclause (3) above will not be deemed an Event
of Default until the Trustee notifies Lennar in writing, or the Holders of at
least 25 percent in principal amount of the then outstanding Notes notify Lennar
and the Trustee in writing, of the Default and (except in the case of a default
with respect to covenants described under "Certain Covenants -- Repurchase of
Notes upon Change in Control" and "Limitations on Mergers, Consolidations and
Sales of Assets") Lennar does not cure the Default within 30 days after receipt
of the notice. The notice must specify the Default, demand that it be remedied
and state that the notice is a "Notice of Default". If such a Default is cured
within such time period, it ceases.
No action taken by Lennar or a Restricted Subsidiary pursuant to a binding
written agreement entered into in good faith at a time when the Notes are rated
the Required Rating (and Lennar has not received notice of any pending
downgrade(s) from S&P or Moody's, or of the placing of the Notes on "credit
watch" or other similar event by S&P or Moody's) will give rise to a Default or
Event of Default because between the time the agreement is signed and the time
the action takes place, the Notes cease to be rated the Required Rating if such
action is completed in accordance with the terms of the agreement by the
deadline for performance, if any.
If an Event of Default (other than an Event of Default resulting from
subclauses (7) or (8) above), shall have occurred and be continuing under the
Indenture, the Trustee by notice to Lennar, or the Holders of at least 25
percent in principal amount of the Notes then outstanding by notice to Lennar
and the Trustee, may declare all Notes to be due and payable immediately. Upon
such declaration of acceleration, the amounts due and payable on the Notes will
be due and payable immediately. If an Event of Default specified in subclauses
(7) or (8) above occurs, such an amount will ipso facto become and be
immediately due and payable without any declaration, notice or other act on the
part of the Trustee and Lennar or any Holder.
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The Holders of a majority in principal amount of the Notes then outstanding
by written notice to the Trustee and Lennar may waive any Default or Event of
Default (other than any Default or Event of Default in payment of any amounts
due) on the Notes under the 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 any amounts due 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.
The Holders may not enforce the provisions of the Indenture, the Notes or
the Guarantees except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the Notes then
outstanding may direct the Trustee in its exercise of any trust or power,
provided, however, that such direction does not conflict with the terms of the
Indenture. The Trustee may withhold from the Holders notice of any continuing
Default or Event of Default (except any Default or Event of Default in payment
of any amounts due on the Notes or that resulted from the failure to comply with
the covenant entitled "Repurchase of Notes upon Change in Control") if the
Trustee determines that withholding such notice is in the Holders' interest.
Lennar is required to deliver to the Trustee an annual statement regarding
compliance with the Indenture, and include in such statement, if any Officer of
Lennar is aware of any Default or Event of Default, a statement specifying such
Default or Event of Default and what action Lennar is taking or proposes to take
with respect thereto. In addition, Lennar is required to deliver to the Trustee
prompt written notice of the occurrence of any Default or Event of Default.
DEFEASANCE OF INDENTURE
Lennar may, at its option and at any time, elect to have the obligations of
Lennar and the Guarantors discharged with respect to the outstanding Notes and
Guarantees ("legal defeasance"). Such defeasance means that Lennar shall be
deemed to have paid and discharged the entire indebtedness represented by the
outstanding Notes, except for:
(1) the rights of holders of outstanding Notes to receive payments in
respect of the principal of, and interest on, such Notes to maturity or
prior redemption,
(2) Lennar's obligations with respect to the Notes concerning issuing
temporary Notes, registration of Notes, mutilated, destroyed, lost or
stolen Notes and the maintenance of an office or agency for payment and
money for security payments held in trust,
(3) the rights, powers, trusts, duties and immunities of the Trustee,
and
(4) the defeasance provisions of the Indenture.
In addition, Lennar may, at its option and at any time, elect to have the
obligations of Lennar and the Guarantors released with respect to certain
covenants as described in the Indenture ("covenant defeasance") and thereafter
any omission to comply with such obligations shall not constitute a Default or
an Event of Default with respect to the Notes. In the event covenant defeasance
occurs, certain events (not including non-payment, bankruptcy and insolvency
events) described under "Events of Default" will no longer constitute an Event
of Default with respect to the Notes.
In order to exercise either legal defeasance or covenant defeasance,
(a) Lennar must irrevocably deposit with the Trustee, in trust, for
the benefit of the holders of the Notes, cash in U.S. dollars, U.S.
government obligations, or a combination thereof, in such amounts as will
be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, and interest on,
the outstanding Notes to maturity or prior redemption;
(b) in the case of legal defeasance, Lennar shall have delivered to
the Trustee an Opinion of Counsel stating that (i) Lennar has received
from, or there has been published by, the Internal
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Revenue Service a ruling or (ii) since the date of the Indenture, there has
been a change in the applicable federal income tax law, in either case to
the effect that, and based thereon, such Opinion of Counsel shall confirm
that, the holders of the outstanding Notes will not recognize income, gain
or loss for federal income tax purposes as a result of such legal
defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such legal defeasance had not occurred;
(c) in the case of covenant defeasance, Lennar shall have delivered to
the Trustee an Opinion of Counsel in the United States to the effect that
the holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (after giving effect thereto) or, in
connection with a legal defeasance, insofar as clauses (7) and (8) under
"Events of Default" are concerned, at any time in the period ending the
91st day after the date of deposit;
(e) such legal defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under any material
agreement or instrument to which Lennar or any of its Subsidiaries is a
party or by which Lennar or any of its Subsidiaries is bound;
(f) Lennar shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by Lennar with the intent
of preferring the holders of Notes over the other creditors of Lennar with
the intent of defeating, hindering, delaying or defrauding creditors of
Lennar or others; and
(g) Lennar shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the legal defeasance or the
covenant defeasance, as the case may be, have been complied with.
TRANSFER AND EXCHANGE
A Holder will be able to transfer or exchange Notes only in accordance with
the provisions of the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents, and to pay
any taxes and fees required by law or permitted by the Indenture.
AMENDMENT, SUPPLEMENT AND WAIVER
Subject to certain exceptions, the Indenture, the Notes or the Guarantees
may be amended or supplemented with the consent (which may include consents
obtained in connection with a tender offer or exchange offer for Notes) of the
Holders of at least a majority in principal amount of the Notes then
outstanding, and any existing Default under, or compliance with any provision
of, the Indenture may be waived (other than any continuing Default or Event of
Default in the payment of any required amount due on the Notes) with the consent
(which may include consents obtained in connection with a tender offer or
exchange offer for Notes) of the Holders of a majority in principal amount of
the Notes then outstanding. Without the consent of any Holder, Lennar and the
Trustee may amend or supplement the Indenture, the Notes or the Guarantees to
cure any ambiguity, defect or inconsistency; to comply with the "Limitations on
Mergers, Consolidations and Sales of Assets" covenant set forth in the
Indenture; to provide for uncertificated Notes in addition to or in place of
certificated Notes; to make any change that does not adversely affect the legal
rights of any Holder; to add a Guarantor or to delete a Guarantor which, in
accordance with the terms of the Indenture, ceases to be liable on its
Guarantee; or to provide any additional benefit or right to the Holders or to
make any change that does not affect the rights of any Holder in any material
respect.
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Without the consent of each Holder affected, Lennar and the Trustee may
not:
(1) reduce the amount of Notes whose Holders must consent to an
amendment, supplement or waiver,
(2) reduce the rate of or change the time for payment of interest,
including default interest, on any Note,
(3) reduce the principal of or change the fixed maturity of any Note
or alter the provisions (including related definitions) with respect to
redemptions described under "Optional Redemption" or with respect to
mandatory offers to repurchase Notes described under "Limitations on
Dispositions of Assets" or "Repurchase of Notes upon Change in Control",
(4) make any Note payable in any currency other than that specified in
connection with the issuance thereof,
(5) make any change in the "Waiver of Past Defaults and Compliance
with Indenture Provisions", "Rights of Holders to Receive Payment" or the
"With Consent of Holders" sections set forth in the Indenture,
(6) modify the ranking or priority of the Notes or any Guarantee,
(7) release any Guarantor from any of its obligations under its
Guarantee or the Indenture otherwise than in accordance with the Indenture,
or
(8) waive a continuing Default or Event of Default in the payment of
any required amount due on the Notes.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of the Indenture (and the obligation of Lennar to
obtain any such consent otherwise required from such Holder) may be subject to
the requirement that such Holder shall have been the Holder of record of any
Notes with respect to which such consent is required or sought as of a date
identified by the Trustee in a notice furnished to Holders in accordance with
the terms of the Indenture.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of Lennar, to obtain payment of claims in certain
cases or to realize on certain property received in respect of any such claim as
security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest (as defined in
the Indenture), it must eliminate such conflict or resign. Lennar may maintain
deposit accounts and conduct other banking transactions with the Trustee or its
affiliates in the ordinary course of business. The Trustee and its affiliates
may from time to time in the future provide banking and other services to Lennar
in the ordinary course of their business. Currently, an affiliate of Bank One,
N.A. serves as trustee with respect to both existing senior debt issues. Bank
One, N.A. is an agent and a lender under Lennar's new senior secured credit
facilities.
The Holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
occurs and is not cured, the Trustee will be required, in the exercise of its
power, to use the degree of care of a prudent person in similar circumstances in
the conduct of his own affairs. Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request of any Holder, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to the Trustee.
GOVERNING LAW
The Indenture, the Notes and the Guarantees will be governed by the laws of
the State of New York without giving effect to principles of conflict of laws.
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CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
terms used in the Indenture.
"Acquired Indebtedness" means (1) with respect to any Person that becomes a
Restricted Subsidiary Guarantor (or is merged into Lennar or any Restricted
Subsidiary Guarantor) after the Issue Date, Indebtedness of such Person or any
of its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary Guarantor (or is merged into Lennar or any Restricted Subsidiary
Guarantor) that was not incurred in connection with, or in contemplation of,
such Person becoming a Restricted Subsidiary (or being merged into Lennar or any
Restricted Subsidiary) and (2) with respect to Lennar or any Restricted
Subsidiary Guarantor, any Indebtedness expressly assumed by Lennar or any
Restricted Subsidiary in connection with the acquisition of any assets from
another Person (other than Lennar or any Restricted Subsidiary), which
Indebtedness was not incurred by such other Person in connection with or in
contemplation of such acquisition. Indebtedness incurred in connection with or
in contemplation of any transaction described in clause (1) or (2) of the
preceding sentence shall be deemed to have been incurred by Lennar or a
Restricted Subsidiary, as the case may be, at the time such Person becomes a
Restricted Subsidiary (or is merged into Lennar or any Restricted Subsidiary) in
the case of clause (1) or at the time of the acquisition of such assets in the
case of clause (2), but shall not be deemed Acquired Indebtedness.
"Affiliate" means, when used with reference to a specified Person, any
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Person specified.
"Asset Acquisition" means (1) an Investment by Lennar or any Restricted
Subsidiary in any other Person if, as a result of such Investment, such Person
shall become a Restricted Subsidiary or shall be consolidated or merged with or
into Lennar or any Restricted Subsidiary or (2) the acquisition by Lennar or any
Restricted Subsidiary of the assets of any Person, which constitute all or
substantially all of the assets or of an operating unit or line of business of
such Person or which is otherwise outside the ordinary course of business.
"Asset Disposition" means any sale, transfer, conveyance, lease or other
disposition (including, without limitation, by way of merger, consolidation or
sale and leaseback or sale of shares of Capital Stock in any Subsidiary) (each,
a "transaction") by Lennar or any Restricted Subsidiary to any Person of any
Property having a Fair Market Value in any transaction or series of related
transactions of at least $15 million. The term "Asset Disposition" shall not
include:
(1) a transaction between Lennar and any Restricted Subsidiary or a
transaction between Restricted Subsidiaries,
(2) a transaction in the ordinary course of conduct of the Real Estate
Business by Lennar and the Restricted Subsidiaries,
(3) a transaction involving the sale of Capital Stock in, or the
disposition of assets of, an Unrestricted Subsidiary,
(4) any exchange or swap of assets of Lennar or any Restricted
Subsidiary for assets that (x) are to be used by Lennar or any Restricted
Subsidiary in the ordinary course of its Real Estate Business and (y) have
a Fair Market Value not less than the Fair Market Value of the assets
exchanged or swapped,
(5) any sale, transfer, conveyance, lease or other disposition of
assets and properties of Lennar that is governed by the provisions relating
to "Limitations on Mergers, Consolidation and Sales of Assets",
(6) dispositions of mortgage loans and related assets and
mortgage-backed securities in the ordinary course of a mortgage lending
business, or
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(7) transfers of assets to Unrestricted Subsidiaries to the extent the
Fair Market Value of the asset so transferred constitutes a Restricted
Payment permitted by the Indenture.
"Attributable Debt" means, with respect to any Capitalized Lease
Obligations, the capitalized amount thereof determined in accordance with GAAP.
"Bankruptcy Law" means title 11 of the United States Code, as amended, or
any similar federal or state law for the relief of debtors.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of or in
such 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
Disqualified Stock and Preferred Stock. In no event shall Lennar's Zero Coupon
Senior Convertible Debentures due 2018 be considered Capital Stock.
"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 will be the capitalized amount thereof determined in
accordance with GAAP.
"Cash Equivalents" means:
(1) U.S. dollars;
(2) securities issued or directly and fully guaranteed or insured by
the U.S. government or any agency or instrumentality thereof having
maturities of one year or less from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $500 million;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) entered
into with any financial institution meeting the qualifications specified in
clause (3) above;
(5) commercial paper rated P-1, A-1 or the equivalent thereof by
Moody's or S&P, respectively, and in each case maturing within six months
after the date of acquisition;
(6) investments in money market funds substantially all of the assets
of which consist of securities described in the foregoing clauses (1)
through (5); and
(7) solely for purposes of any defeasance escrow or required
collateral deposit, securities and other investments eligible for such
purpose under the terms of the agreement or instrument pursuant to which
such escrow or deposit is established.
"Common Equity" of any Person means Capital Stock of such Person that is
generally entitled to (1) vote in the election of directors of such Person or
(2) if such Person is not a corporation, vote or otherwise participate in the
selection of the governing body, partners, managers or others that will control
the management or policies of such Person, but in either case excludes Preferred
Stock.
"Consolidated Adjusted Tangible Assets" of Lennar as of any date means the
Consolidated Tangible Assets of Lennar and the Restricted Subsidiaries at the
end of the most recent fiscal quarter ending at least 45 days prior to the date,
less any assets securing any Non-Recourse Indebtedness, as determined in
accordance with GAAP.
"Consolidated Cash Flow Available for Fixed Charges" means, for any period,
on a consolidated basis for Lennar and the Restricted Subsidiaries, Consolidated
Net Income for such period plus (each to the
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extent deducted in calculating such Consolidated Net Income and determined in
accordance with GAAP) the sum for such period, without duplication, of:
(1) income taxes,
(2) Consolidated Interest Expense,
(3) depreciation and amortization expenses and other non-cash charges
to earnings and
(4) interest and financing fees and expenses which were previously
capitalized and which are amortized to cost of sales, minus all other
non-cash items (other than the receipt of notes receivable) increasing such
Consolidated Net Income.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
determination date, the ratio of (x) Consolidated Cash Flow Available for Fixed
Charges for the prior four full fiscal quarters (the "Four Quarter Period") for
which financial results have been reported immediately preceding the
determination date (the "Transaction Date"), to (y) the aggregate Consolidated
Interest Incurred for the Four Quarter Period. For purposes of this definition,
"Consolidated Cash Flow Available for Fixed Charges" and "Consolidated Interest
Incurred" shall be calculated after giving effect on a pro forma basis for the
period of such calculation to
(1) the incurrence or the repayment, repurchase, defeasance or other
discharge or the assumption by another Person that is not an Affiliate
(collectively, "repayment") of any Indebtedness of Lennar or any Restricted
Subsidiary (and the application of the proceeds thereof) giving rise to the
need to make such calculation, and any incurrence or repayment of other
Indebtedness (and the application of the proceeds thereof), at any time on
or after the first day of the Four Quarter Period and on or prior to the
Transaction Date, as if such incurrence or repayment, as the case may be
(and the application of the proceeds thereof), occurred on the first day of
the Four Quarter Period, except that Indebtedness under revolving credit
facilities shall be deemed to be the average monthly balance of such
Indebtedness during the Four Quarter Period (as reduced on such pro forma
basis by the application of any proceeds of the incurrence of Indebtedness
giving rise to the need to make such calculation);
(2) any Asset Disposition or Asset Acquisition (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of Lennar or any Restricted Subsidiary (including
any Person that becomes a Restricted Subsidiary as a result of any such
Asset Acquisition) incurring Acquired Indebtedness at any time on or after
the first day of the Four Quarter Period and on or prior to the Transaction
Date), as if such Asset Disposition or Asset Acquisition (including the
incurrence or repayment of any such Indebtedness) and the inclusion,
notwithstanding clause (2) of the definition of "Consolidated Net Income",
of any actual Consolidated Cash Flow Available for Fixed Charges associated
with such Asset Acquisition (without further adjustment), had occurred on
the first day of the Four Quarter Period; provided, however, that the
Consolidated Cash Flow Available for Fixed Charges associated with any
Asset Acquisition shall not be included to the extent the net income
included in that Consolidated Cash Flow Available for Fixed Charges would
be excluded pursuant to the definition of "Consolidated Net Income", other
than clause (2) thereof, if it applied to the Person or assets involved
before they were acquired;
(3) the Consolidated Cash Flow Available for Fixed Charges and the
Consolidated Interest Incurred attributable to discontinued operations, as
determined in accordance with GAAP, shall be excluded; and
(4) solely for the purposes of this definition, the redesignation of
an Unrestricted Subsidiary to be a Restricted Subsidiary shall be deemed to
be an Asset Acquisition.
Furthermore, in calculating "Consolidated Cash Flow Available for Fixed
Charges" for purposes of determining the denominator (but not the numerator) of
this "Consolidated Fixed Charge Coverage Ratio",
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(a) interest determined at a fluctuating rate on Indebtedness in
respect of which a pro forma calculation is required (including
Indebtedness actually incurred on the Transaction Date) which will continue
to be so determined after the Transaction Date, shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date; and
(b) notwithstanding clause (a) above, interest on such Indebtedness
determined at a fluctuating rate, to the extent such interest is covered by
Interest Protection Agreements, shall be deemed to accrue at the rate per annum
resulting after giving effect to the operation of such agreements.
"Consolidated Interest Expense" of Lennar for any period means the Interest
Expense of Lennar and the Restricted Subsidiaries for such period, determined on
a consolidated basis in accordance with GAAP.
"Consolidated Interest Incurred" for any period means the Interest Incurred
of Lennar and the Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" for any period means the aggregate net income (or
loss) of Lennar and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP; provided that there will be excluded
from such net income (loss) (to the extent otherwise included therein), without
duplication:
(1) the net income (or loss) of (x) any Unrestricted Subsidiary or (y)
any Person (other than a Restricted Subsidiary) in which any Person other
than Lennar or any Restricted Subsidiary has an ownership interest, except,
in each case, to the extent that any such income has actually been received
by Lennar or any Restricted Subsidiary in the form of cash dividends or
similar cash distributions during such period, which dividends or
distributions are not in excess of Lennar's or such Restricted Subsidiary's
(as applicable) pro rata share of such Unrestricted Subsidiary's or such
other Person's net income earned during the period commencing with the
first day of the fiscal quarter in which the Issue Date occurs and ending
with the period of calculation (taken as a single accounting period),
(2) except to the extent includable in Consolidated Net Income
pursuant to the foregoing clause (1), the net income (or loss) of any
Person that accrued prior to the date that (a) such Person becomes a
Restricted Subsidiary or is merged with or into or consolidated with Lennar
or any of its Restricted Subsidiaries (except, in the case of an
Unrestricted Subsidiary that is redesignated a Restricted Subsidiary during
such period, to the extent of its retained earnings from the beginning of
such period to the date of such redesignation) or (b) the assets of such
Person are acquired by Lennar or any Restricted Subsidiary,
(3) the net income of any Restricted Subsidiary to the extent that
(but only so long as) the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary of that income is not permitted
by operation of 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,
(4) the gains or losses, together with any related provision for
taxes, realized during such period by Lennar or any Restricted Subsidiary
resulting from (a) the acquisition of securities, or extinguishment of
Indebtedness, of Lennar or any Restricted Subsidiary or (b) any Asset
Disposition by Lennar or any Restricted Subsidiary,
(5) any extraordinary gain or loss together with any related provision
for taxes, realized by Lennar or any Restricted Subsidiary, and
(6) any non-recurring expense recorded by Lennar or any Restricted
Subsidiary in connection with a merger accounted for as a
"pooling-of-interests" transaction;
provided, further, that for purposes of calculating Consolidated Net Income
solely as it relates to clause (3) of the first paragraph of the "Limitations on
Restricted Payments" covenant, clause (4)(b) above shall not be applicable.
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"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, other than Disqualified Stock) of such Person and its Restricted
Subsidiaries on a consolidated basis at the end of the fiscal quarter
immediately preceding such date, as determined in accordance with GAAP, less any
amount attributable to Unrestricted Subsidiaries.
"Consolidated Tangible Assets" of Lennar as of any date means the total
amount of assets of Lennar and its Restricted Subsidiaries (less applicable
reserves) on a consolidated basis at the end of the fiscal quarter immediately
preceding such date, as determined in accordance with GAAP, less (1) Intangible
Assets and (2) appropriate adjustments on account of minority interests of other
Persons holding equity investments in Restricted Subsidiaries.
"Control", when used with respect to any Person, means the power to direct
the management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Credit Facilities" means, collectively, each of the credit facilities and
lines of credit of Lennar or one or more Restricted Subsidiaries in existence on
the date of the Indenture and one or more other facilities or lines of credit
among or between Lennar or one or more Restricted Subsidiaries and one or more
lenders pursuant to which Lennar or any Restricted Subsidiary may incur
indebtedness for working capital and general corporate purposes (including
acquisitions), as any such facility or line of credit may be amended, restated,
supplemented or otherwise modified from time to time, and includes any agreement
extending the maturity of, increasing the amount of, or restructuring, all or
any portion of the Indebtedness under such facility or line of credit or any
successor facilities or lines of credit and includes any facility or line of
credit with one or more lenders refinancing or replacing all or any portion of
the Indebtedness under such facility or line of credit or any successor facility
or line of credit.
"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 against fluctuations in currency
values.
"Custodian" means any receiver, trustee, assignee, liquidator 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, an Event of Default.
"Designation Amount" has the meaning provided in the definition of
Unrestricted Subsidiary.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (1) matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
final maturity date of the Notes or (2) is convertible into or exchangeable or
exercisable for (whether at the option of the issuer or the holder thereof) (a)
debt securities or (b) any Capital Stock referred to in (1) above, in each case,
at any time prior to the final maturity date of the Notes; provided, however,
that any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof (or the holders of any security into
or for which such Capital Stock is convertible, exchangeable or exercisable) the
right to require Lennar to repurchase or redeem such Capital Stock upon the
occurrence of a change in control occurring prior to the final maturity date of
the Notes shall not constitute Disqualified Stock if the change in control
provisions applicable to such Capital Stock are no more favorable to such
holders than the provisions described under the caption "Certain
Covenants -- Repurchase of Notes upon Change in Control" and such Capital Stock
specifically provides that Lennar will not repurchase or redeem any such Capital
Stock pursuant to such provisions prior to Lennar's repurchase of the Notes as
may be required pursuant to the provisions described under the caption "Certain
Covenants -- Repurchase of Notes upon Change in Control".
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"Equity Offering" means an underwritten public offering of Common Equity of
Lennar pursuant to an effective registration statement filed under the
Securities Act (excluding registration statements filed on Form S-8 or any
successor form) or a private placement of Common Equity of Lennar.
"Event of Default" has the meaning set forth under "Events of Default".
"Fair Market Value" means, with respect to any asset (and except as
otherwise provided under "Limitation on Restricted Payments"), the price (after
taking into account any liabilities relating to such assets) that would be
negotiated in an arm's-length transaction for cash between a willing seller and
a willing and able buyer, neither of which is under any compulsion to complete
the transaction, as such price is determined in good faith by the Board of
Directors of Lennar or a duly authorized committee thereof, as evidenced by a
resolution of such Board or committee.
"Foreign Subsidiary" means any Subsidiary incorporated under the laws of
any jurisdiction other than the United States of America, any State thereof, the
District of Columbia, Puerto Rico, or any territory or possession of the United
States of America.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the Issue Date.
"Guarantee" means the guarantee of the Notes by each Guarantor under the
Indenture.
"Guarantors" means (i) initially, each of the Restricted Subsidiaries on
the Issue Date, and (ii) each of Lennar's Subsidiaries which becomes a guarantor
of the Notes pursuant to the provisions of the Indenture.
"Holder" means the Person in whose name a Note is registered in the books
of the Registrar for the Notes.
"Indebtedness" of any Person means, without duplication,
(1) any liability of such Person (a) for borrowed money or under any
reimbursement obligation relating to a letter of credit or other similar
instruments (other than standby letters of credit or similar instrument
issued for the benefit of or surety, performance, completion or payment
bonds, earnest money notes or similar purpose undertakings or
indemnifications issued by, such Person in the ordinary course of
business), (b) evidenced by a bond, note, debenture or similar instrument
(including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind, in
connection with services rendered, or in connection with capital
expenditures (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), (c) in respect of Capitalized
Lease Obligations (to the extent of the Attributable Debt in respect
thereof) or (d) in respect of Disqualified Stock,
(2) any Indebtedness of others that such Person has guaranteed to the
extent of the guarantee,
(3) to the extent not otherwise included, the obligations of such
Person under Currency Agreements or Interest Protection Agreements 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, and
(4) all Indebtedness of others secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person;
provided, that Indebtedness shall not include accounts payable, liabilities to
trade creditors of such Person or other accrued expenses arising in the ordinary
course of business. The amount of Indebtedness of any Person at any date shall
be (a) the outstanding balance at such date of all unconditional obligations as
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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 (2) 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 (4) above, the lesser of (x) the fair market
value of any asset subject to a Lien securing the Indebtedness of others on the
date that the Lien attaches and (y) the amount of the Indebtedness secured.
Neither the accretion of discount nor the accrual of interest shall be deemed to
give rise to the incurrence of Indebtedness.
"Intangible Assets" of Lennar means all unamortized debt discount and
expense, unamortized deferred charges, goodwill, patents, trademarks, service
marks, trade names, copyrights, write-ups of assets over their prior carrying
value (other than write-ups which occurred prior to the Issue Date and other
than, in connection with the acquisition of an asset, the write-up of the value
of such asset (within one year of its acquisition) to its fair market value in
accordance with GAAP) and all other items which would be treated as intangible
on the consolidated balance sheet of Lennar and the Restricted Subsidiaries
prepared in accordance with GAAP.
"Interest Expense" of any Person for any period means, without duplication,
the aggregate amount of (i) interest which, in conformity with GAAP, would be
set opposite the caption "interest expense" or any like caption on an income
statement for such Person (including, without limitation, imputed interest
included in Capitalized Lease Obligations, all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing, the net costs (but reduced by net gains) associated with Currency
Agreements and Interest Protection Agreements, amortization of other financing
fees and expenses, the interest portion of any deferred payment obligation,
amortization of discount or premium, if any, and all other noncash interest
expense other than interest and other charges amortized to cost of sales), and
(ii) all interest actually paid by Lennar or a Restricted Subsidiary under any
guarantee of Indebtedness (including, without limitation, a guarantee of
principal, interest or any combination thereof) of any Person other than Lennar
or any Restricted Subsidiary during such period; provided, that Interest Expense
shall exclude any expense associated with the complete write-off of financing
fees and expenses in connection with the repayment of any Indebtedness.
"Interest Incurred" of any Person for any period means, without
duplication, the aggregate amount of (1) Interest Expense and (2) all
capitalized interest and amortized debt issuance costs.
"Interest Protection Agreement" of any Person means any interest rate swap
agreement, interest rate collar agreement, option or futures contract or other
similar agreement or arrangement designed to protect such Person or any of its
Subsidiaries against fluctuations in interest rates with respect to Debt
permitted to be incurred under the Indenture.
"Investments" of any Person means (i) all investments by such Person in any
other Person in the form of loans, advances or capital contributions, (ii) all
guarantees of Indebtedness or other obligations of any other Person by such
Person, (iii) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any other Person
and (iv) all other items that would be classified as investments in any other
Person (including, without limitation, purchases of assets outside the ordinary
course of business) on a balance sheet of such Person prepared in accordance
with GAAP.
"Issue Date" means the date on which the Notes are originally issued under
the Indenture.
"Lien" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this definition, a Person shall be deemed to own,
subject to a Lien, any Property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such Property.
"Marketable Securities" means (a) equity securities that are listed on the
New York Stock Exchange, the American Stock Exchange or The Nasdaq National
Market and (b) debt securities that are rated by a nationally recognized rating
agency, listed on the New York Stock Exchange or the American Stock Exchange or
covered by at least two reputable market makers.
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"Moody's" means Moody's Investors Service, Inc. or any successor to its
debt rating business.
"Net Cash Proceeds" means, with respect to an Asset Disposition, cash
payments received (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
(including any cash received upon sale or disposition of such note or
receivable), but only as and when received), excluding any other consideration
received in the form of assumption by the acquiring Person of Indebtedness or
other obligations relating to the Property disposed of in such Asset Disposition
or received in any other non-cash form unless and until such non-cash
consideration is converted into cash therefrom, in each case, net of all legal,
title and recording tax expenses, commissions and other fees and expenses
incurred, and all federal, state and local taxes required to be accrued as a
liability under GAAP as a consequence of such Asset Disposition, and in each
case net of a reasonable reserve for the after-tax cost of any indemnification
or other payments (fixed and contingent) attributable to the seller's
indemnities or other obligations to the purchaser undertaken by Lennar or any of
its Restricted Subsidiaries in connection with such Asset Disposition, and net
of all payments made on any Indebtedness which is secured by or relates to such
Property, in accordance with the terms of any Lien or agreement upon or with
respect to such Property (including the terms of any consent to such sale or
other disposition) or which must by its terms or by applicable law be repaid out
of the proceeds from such Asset Disposition, and net of all contractually
required distributions and payments made to minority interest holders in
Restricted Subsidiaries or joint ventures as a result of such Asset Disposition.
"Non-Recourse Indebtedness" with respect to any Person means Indebtedness
of such Person for which (1) the sole legal recourse for collection of required
amounts due on such Indebtedness is against the specific property identified in
the instruments evidencing or securing such Indebtedness and (except in the case
of Non-Recourse Indebtedness that is Refinancing Indebtedness) such property was
acquired with the proceeds of such Indebtedness or such Indebtedness was
incurred within 90 days after the acquisition of such property and (2) no other
assets of such Person may be realized upon in collection of principal or
interest on such Indebtedness. Indebtedness which is otherwise Non-Recourse
Indebtedness will not lose its character as Non-Recourse Indebtedness because
there is recourse to the borrower, any guarantor or any other Person for (a)
environmental warranties and indemnities, or (b) indemnities for and liabilities
arising from fraud, misrepresentation, misapplication or non-payment of rents,
profits, insurance and condemnation proceeds and other sums actually received by
the borrower from secured assets to be paid to the lender, waste and mechanics'
liens.
"Permitted Indebtedness" means:
(1) Indebtedness of Lennar or any Restricted Subsidiary under Credit
Facilities which does not exceed $1.5 billion principal amount outstanding
at any one time, less, without duplication, the amount of all mandatory
reductions effected under the terms of the Senior Secured Credit Facilities
as in effect on the Issue Date, and the amount of all permanent reductions
thereto in connection with Asset Dispositions;
(2) intercompany debt obligations of Lennar to any Restricted
Subsidiary and of any Restricted Subsidiary to Lennar or any other
Restricted Subsidiary; provided, however, that any Indebtedness of any
Restricted Subsidiary or Lennar owed to any Restricted Subsidiary that
ceases to be a Restricted Subsidiary shall be deemed to be incurred and
shall be treated as an incurrence for purposes of the first paragraph of
the covenant described under "Limitations on Indebtedness" at the time the
Restricted Subsidiary in question ceases to be a Restricted Subsidiary;
(3) Indebtedness of Lennar or any Restricted Subsidiary under any
Currency Agreements or Interest Protection Agreements in a notional amount
no greater than the payments due (at the time the related Currency
Agreement or Interest Protection Agreement is entered into) with respect to
the Indebtedness or currency being hedged;
(4) Purchase Money Indebtedness and Attributable Debt in respect of
Capitalized Lease Obligations of Lennar and any Restricted Subsidiary
Guarantor; and
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(5) Indebtedness of Lennar or any Restricted Subsidiary which,
together with all other Indebtedness under this clause (5), does not exceed
$100 million aggregate principal amount outstanding at any one time.
"Permitted Investment" means:
(1) Cash Equivalents;
(2) any Investment in Lennar or any Restricted Subsidiary or any
Person that becomes a Restricted Subsidiary as a result of such Investment
or that is consolidated or merged with or into, or transfers all or
substantially all of its assets or an operating unit or line of business
to, Lennar or a Restricted Subsidiary;
(3) any receivables, loans or other consideration taken by Lennar or
any Restricted Subsidiary in connection with any asset sale otherwise
permitted by the Indenture;
(4) Investments received in connection with any bankruptcy or
reorganization proceeding, or as a result of foreclosure, perfection or
enforcement of any Lien or any judgment or settlement of any Person in
exchange for or satisfaction of Indebtedness or other obligations or other
property received from such Person, or for other liabilities or obligations
of such Person created, in accordance with the terms of the Indenture;
(5) Investments in Currency Agreements or Interest Protection
Agreements described in the definition of Permitted Indebtedness;
(6) loans or advances to officers, directors and employees of Lennar
or any Restricted Subsidiary made in the ordinary course of business;
provided, however, that and aggregate principal amount of all such loans
and advances outstanding at any one time does not exceed $5 million and any
such loan or advance exceeding $500,000 shall have been approved by the
Board of Directors of Lennar or a committee thereof consisting of
disinterested members;
(7) Investments in joint ventures in a Real Estate Business with
unaffiliated third parties in an aggregate amount at any time outstanding
not to exceed 10% of Consolidated Tangible Assets at such time;
(8) Investments in interests in collateralized mortgage obligations,
mortgages, mortgage loan servicing or other mortgage related assets; and
(9) Investments in an aggregate amount outstanding not to exceed $50
million.
"Permitted Liens" means:
(1) Liens for taxes, assessments or governmental or quasi-government
charges or claims that (a) are not yet delinquent, (b) 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, if required, or (c) encumber solely property
abandoned or in the process of being abandoned;
(2) 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 (a) are not yet delinquent
or (b) 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, if required;
(3) Liens (other than any Lien imposed by the Employer Retirement
Income Security Act of 1974, as amended) incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security;
(4) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory obligations, surety and appeal bonds,
development obligations, progress payments, government
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contacts, utility services, developer's or other obligations to make
on-site or off-site improvements and other obligations of like nature
(exclusive of obligations for the payment of borrowed money but including
the items referred to in the parenthetical in clause (1)(a) of the
definition of "Indebtedness"), in each case incurred in the ordinary course
of business of Lennar and the Restricted Subsidiaries;
(5) attachment or judgment Liens not giving rise to a Default or an
Event of Default;
(6) easements, dedications, assessment district or similar liens in
connection with municipal or special district financing, rights-of-way,
restrictions, reservations and other similar charges, burdens, and other
similar charges or encumbrances not materially interfering with the
ordinary course of business of Lennar and the Restricted Subsidiaries;
(7) zoning restrictions, licenses, restrictions on the use of real
property or minor irregularities in title thereto, which do not materially
impair the use of such real property in the ordinary course of business of
Lennar and the Restricted Subsidiaries;
(8) Liens securing (a) Indebtedness under Lennar's existing Senior
Notes, (b) Indebtedness of Lennar and its Restricted Subsidiaries incurred
under Credit Facilities, and (c) Indebtedness of Lennar and its Restricted
Subsidiaries that has been or is being defeased;
(9) Liens securing Non-Recourse Indebtedness of Lennar or any
Restricted Subsidiary Guarantor;
(10) Liens securing Purchase Money Indebtedness of Lennar or any
Restricted Subsidiary Guarantor;
(11) Liens on property or assets of Lennar or any Restricted
Subsidiary securing Indebtedness of Lennar or any Restricted Subsidiary
owing to Lennar or one or more Restricted Subsidiaries;
(12) leases or subleases granted to others not materially interfering
with the ordinary course of business of Lennar and the Restricted
Subsidiaries;
(13) Liens on property that is the subject of Capitalized Lease
Obligations of Lennar or any Restricted Subsidiary Guarantor;
(14) any right of first refusal, right of first offer, option,
contract or other agreement to sell an asset; provided, that such sale is
not otherwise prohibited under the Indenture;
(15) any right of a lender or lenders to which Lennar 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 money of Lennar or a Restricted Subsidiary with or held by such
lender or lenders or its Affiliates;
(16) any pledge or deposit of cash or property in conjunction with
obtaining surety, performance, completion or payment bonds and letters of
credit or other similar instruments or providing earnest money obligations,
escrows or similar purpose undertakings or indemnifications in the ordinary
course of business of Lennar and its Restricted Subsidiaries;
(17) Liens for homeowner and property owner association developments
and assessments;
(18) Liens securing Refinancing Indebtedness permitted under the
Indenture; provided, that such Liens extend only to the assets securing the
Indebtedness being refinanced;
(19) Liens incurred in the ordinary course of business as security for
the obligations of Lennar and its Restricted Subsidiaries with respect to
indemnification in respect of title insurance providers; and
(20) any arrangement with any Person providing for the leasing by
Lennar or any Restricted Subsidiary, as lessee, of a model home in their
communities, which home has been or is to be sold or transferred by Lennar
or such Restricted Subsidiary to such Person.
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"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.
"Purchase Money Indebtedness" means Indebtedness of Lennar or any
Restricted Subsidiary Guarantor incurred for the purpose of financing all or any
part of the purchase price, or the cost of construction or improvement, of any
property to be used in the ordinary course of business by Lennar and the
Restricted Subsidiaries; provided, however, that (1) the aggregate principal
amount of such Indebtedness shall not exceed such purchase price or cost and (2)
such Indebtedness shall be incurred no later than 90 days after the acquisition
of such property or completion of such construction or improvement.
"Qualified Stock" means Capital Stock of Lennar other than Disqualified
Stock.
"Real Estate Business" means homebuilding, housing construction, home
sales, real estate development or construction and related real estate
activities, including the provision of mortgage financing, title insurance and
other goods and services to home buyers, home owners and other occupants of
homes, including without limitation, cable TV services, home security, home
design, broadband communications and other communications services and home
office support services.
"Refinancing Indebtedness" means (i) Indebtedness (to the extent not
Permitted Indebtedness) that refunds, refinances or extends any Indebtedness of
Lennar or any Restricted Subsidiary outstanding on the Issue Date or other
Indebtedness (to the extent not Permitted Indebtedness) permitted to be incurred
by Lennar or any Restricted Subsidiary pursuant to the terms of the Indenture
and (ii) Indebtedness (to the extent not Permitted Indebtedness) of a Restricted
Subsidiary Guarantor that refunds, refinances or extends any Indebtedness of
such Restricted Subsidiary outstanding on the Issue Date or other Indebtedness
(to the extent not Permitted Indebtedness) permitted to be incurred by such
Restricted Subsidiary pursuant to the terms of the Indenture, but, in either
case, only to the extent that
(1) the Refinancing Indebtedness is subordinated to the Notes or the
Guarantees, as the case may be, to the same extent as the Indebtedness
being refunded, refinanced or extended, if at all,
(2) the Refinancing Indebtedness is scheduled to mature either (a) no
earlier than the Indebtedness being refunded, refinanced or extended or (b)
after the maturity date of the Notes,
(3) the portion, if any, of the Refinancing Indebtedness that is
scheduled to mature on or prior to the maturity date of the Notes has a
Weighted Average Life to Maturity at the time such Refinancing Indebtedness
is incurred that is equal to or greater than the Weighted Average Life to
Maturity of the portion of the Indebtedness being refunded, refinanced or
extended that is scheduled to mature on or prior to the maturity date of
the Notes, and
(4) such Refinancing Indebtedness is in an aggregate principal amount
that is equal to or less than the sum of (a) the aggregate principal amount
then outstanding under the Indebtedness being refunded, refinanced or
extended, (b) accrued interest and premiums thereon, and (c) the reasonable
fees and expenses incurred by Lennar or such Restricted Subsidiary
Guarantor in connection with such refinancing.
"Required Rating" means (i) following any period during which the ratings
on the Notes are not at least as high as those described in clause (ii) hereof,
ratings on the Notes of at least BBB- by S&P and Baa3 by Moody's and (ii) at all
other times, ratings on the Notes of at least (x) BBB- by S&P and Ba1 or lower
by Moody's or (y) Baa3 by Moody's and BB+ or lower by S&P.
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"Restricted Payment" means any of the following:
(1) the declaration or payment of any dividend or any other
distribution on Capital Stock of Lennar or any Restricted Subsidiary or any
payment made to the direct or indirect holders (in their capacities as
such) of Capital Stock of Lennar or any Restricted Subsidiary (other than
(a) dividends or distributions payable solely in Qualified Stock and (b) in
the case of Restricted Subsidiaries, dividends or distributions payable to
Lennar or to a Restricted Subsidiary);
(2) the purchase, redemption or other acquisition or retirement for
value of any Capital Stock of Lennar or any Restricted Subsidiary (other
than a payment made to Lennar or any Restricted Subsidiary);
(3) any Investment (other than any Permitted Investment), including
any Investment in an Unrestricted Subsidiary (including by the designation
of a Subsidiary of Lennar as an Unrestricted Subsidiary); and
(4) any principal payment on, purchase, defeasance, redemption,
prepayment, decrease or other acquisition or retirement for value, prior to
scheduled final maturity, scheduled repayment or scheduled sinking fund
payment, of any Indebtedness of Lennar or any Subsidiary that is
subordinate or junior in right of payment to the Notes or any Guarantee.
"Restricted Subsidiary" means any Subsidiary of Lennar which is not an
Unrestricted Subsidiary.
"Restricted Subsidiary Guarantor" means any Subsidiary that is a Guarantor.
"S&P" means Standard and Poor's Ratings Group or any successor to its debt
rating business.
"Senior Notes" means Lennar's 7 5/8% Senior Notes due 2009 and its Zero
Coupon Senior Convertible Debentures due 2018.
"Senior Secured Credit Facilities" means the senior secured credit
facilities that were entered into on the Issue Date by Lennar, U.S. Home, Bank
One, N.A., Bankers Trust Company and the other banks party thereto.
"Significant Subsidiary" means any Subsidiary of Lennar which would
constitute a "significant subsidiary" as defined in Rule 1-02 of Regulation S-X
under the Securities Act and the Exchange Act.
"Subsidiary" of any Person means any corporation or other entity of which a
majority of the Capital Stock having ordinary voting power to elect a majority
of the Board of Directors or other persons performing similar functions is at
the time directly or indirectly owned or controlled by such Person.
"Tender Offer and Consent Solicitation" means the tender offer and consent
solicitation commenced by Len Acquisition Corporation on March 31, 2000, with
regard to the U.S. Home Existing Debt Issues.
"Trustee" means the party named as such above until a successor replaces
such party in accordance with the applicable provisions of the Indenture and
thereafter means the successor serving hereunder.
"Unrestricted Subsidiary" means (i) Universal American Mortgage Company,
Universal American Mortgage Company of California, UAMC Asset Corp., Ameristar
Financial Services, Inc., UAMC Asset Corp. II, UAMC Holdings, Eagle Home
Mortgage, Inc., UAMC Holdings II, U.S. Home Mortgage Corporation and
Subsidiaries of U.S. Home engaged primarily in the title reinsurance business
and (ii) any other Subsidiary of Lennar so designated by a resolution adopted by
the Board of Directors of Lennar or a duly authorized committee thereof as
provided below; provided that (a) the holders of Indebtedness thereof do not
have direct or indirect recourse against Lennar or any Restricted Subsidiary,
and neither Lennar nor any Restricted Subsidiary otherwise has liability for,
any payment obligations in respect of such Indebtedness (including any
undertaking, agreement or instrument evidencing such Indebtedness), except, in
each case, to the extent that the amount thereof constitutes a Restricted
Payment permitted by the Indenture, in the case of Non-Recourse Indebtedness, to
the extent such recourse or liability is for the matters discussed in the last
sentence of the definition of "Non-Recourse Indebtedness", or to the extent such
Indebtedness is a guarantee by such Subsidiary of Indebtedness of
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Lennar or a Restricted Subsidiary and (b) no holder of any Indebtedness of such
Subsidiary shall have a right to declare a default on such Indebtedness or cause
the payment thereof to be accelerated or payable prior to its stated maturity as
a result of a default on any Indebtedness of Lennar or any Restricted
Subsidiary.
Subject to the foregoing, the Board of Directors of Lennar or a duly
authorized committee thereof may designate any Subsidiary to be an Unrestricted
Subsidiary; provided, however, that (1) the net amount (the "Designation
Amount") then outstanding of all previous Investments by Lennar and the
Restricted Subsidiaries in such Subsidiary will be deemed to be a Restricted
Payment at the time of such designation and will reduce the amount available for
Restricted Payments under the "Limitations on Restricted Payments" covenant set
forth in the Indenture, to the extent provided therein, (2) Lennar must be
permitted under the "Limitations on Restricted Payments" covenant set forth in
the Indenture to make the Restricted Payment deemed to have been made pursuant
to clause (1), (3) such Subsidiary does not own any Preferred Stock in any other
Restricted Subsidiary (other than in a Subsidiary of such Subsidiary), and (4)
after giving effect to such designation, no Default or Event of Default shall
have occurred or be continuing. In accordance with the foregoing, and not in
limitation thereof, Investments made by any Person in any Subsidiary of such
Person prior to such Person's merger with Lennar or any Restricted Subsidiary
(but not in contemplation or anticipation of such merger) shall not be counted
as an Investment by Lennar or such Restricted Subsidiary if such Subsidiary of
such Person is designated as an Unrestricted Subsidiary.
The Board of Directors of Lennar or a duly authorized committee thereof may
also redesignate an Unrestricted Subsidiary to be a Restricted Subsidiary;
provided, however, that (1) the Indebtedness of such Unrestricted Subsidiary as
of the date of such redesignation could then be incurred under the "Limitations
on Indebtedness" covenant and (2) immediately after giving effect to such
redesignation and the incurrence of any such additional Indebtedness, Lennar and
the Restricted Subsidiaries could incur $1.00 of additional Indebtedness under
the first paragraph of the "Limitations on Indebtedness" covenant. Any such
designation or redesignation by the Board of Directors of Lennar or a committee
thereof will be evidenced to the Trustee by the filing with the Trustee of a
certified copy of the resolution of the Board of Directors of Lennar or a
committee thereof 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.
The designation of any Person as an Unrestricted Subsidiary shall be deemed
to include a designation of all Subsidiaries of such Person as Unrestricted
Subsidiaries; provided, however, that the ownership of the general partnership
interest (or a similar member's interest in a limited liability company) by an
Unrestricted Subsidiary in a Subsidiary of Lennar of which more than 95% of the
equity interest is held by Lennar or one or more Restricted Subsidiaries shall
not cause the Subsidiary to be deemed an Unrestricted Subsidiary.
"U.S. Home Existing Debt Issues" means U.S. Home's 7.95% Senior Notes due
2001, its 8.25% Senior Notes due 2004, its 7.75% Senior Notes due 2005, its
8.88% Senior Subordinated Notes due 2007 and its 8.875% Senior Subordinated
Notes due 2009.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
or portion thereof at any date, the number of years obtained by dividing (i) the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including, without limitation, payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment
by (ii) the sum of all such payments described in clause (i)(a) above.
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BOOK ENTRY, DELIVERY AND FORM
The certificates representing the series B notes will be issued in fully
registered form. The series B notes initially will be represented by a single,
permanent global series B note, in definitive, fully registered form without
interest coupons (the "Global Note") and will be deposited with the trustee as
custodian for DTC and registered in the name of Cede & Co., as DTC's nominee.
Upon the issuance of a Global Note, DTC or its nominee will credit the
accounts of persons holding through it with the respective principal amounts of
the series B notes represented by such Global Note received by such persons in
the exchange offer. Such accounts shall be designated by the initial purchasers.
Ownership of beneficial interests in a Global Note will be limited to persons
that have accounts with DTC ("participants") or persons that may hold interests
through participants. Any person acquiring an interest in a Global Note through
an offshore transaction in reliance on Regulation S of the Securities Act may
hold such interest through Cedel or Euroclear. Ownership of beneficial interests
in a Global Note will be shown on, and the transfer of that ownership interest
will be effected only through, records maintained by DTC (with respect to
participants' interests) and such participants (with respect to the owners of
beneficial interests in such Global Note other than participants). The laws of
some jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Note.
Payment of principal of and interest on series B notes represented by a
Global Note will be made in immediately available funds to DTC or its nominee,
as the case may be, as the sole registered owner and the sole holder of the
series B notes represented thereby for all purposes under the indenture. We have
been advised by DTC that upon receipt of any payment of principal of or interest
on any Global Note, DTC will immediately credit, on its book-entry registration
and transfer system, the accounts of participants with payments in amounts
proportionate to their respective beneficial interests in the principal or face
amount of such Global Note as shown on the records of DTC. Payments by
participants to owners of beneficial interests in a Global Note held through
such participants will be governed by standing instructions and customary
practices as is now the case with securities held for customer accounts
registered in "street name" and will be the sole responsibility of such
participants.
A Global Note may not be transferred except as a whole by DTC or a nominee
of DTC to a nominee of DTC or to DTC. A Global Note is exchangeable for
certificated series B notes only if (a) DTC notifies us that it is unwilling or
unable to continue as a depositary for such Global Note or if at any time DTC
ceases to be a clearing agency registered under the Exchange Act, (b) we in our
discretion at any time determine not to have all the series B notes represented
by such Global Note, or (c) there shall have occurred and be continuing a
default or an event of default with respect to the series B notes represented by
such Global Note. Any Global Note that is exchangeable for certificated series B
notes pursuant to the preceding sentence will be exchanged for certificated
series B notes in authorized denominations and registered in such names as DTC
or any successor depositary holding such Global Note may direct. Subject to the
foregoing, a Global Note is not exchangeable, except for a Global Note of like
denomination to be registered in the name of DTC or any successor depositary or
its nominee. In the event that a Global Note becomes exchangeable for
certificated series B notes, (a) certificated series B notes will be issued only
in fully registered form in denominations of $1,000 or integral multiples
thereof, (b) payment of principal of, and premium, if any, and interest on, the
certificated series B notes will be payable, and the transfer of the
certificated series B notes will be registerable, at our office or agency
maintained for such purposes and (c) no service charge will be made for any
registration of transfer or exchange of the certificated series B notes,
although we may require payment of a sum sufficient to cover any tax or
governmental charge imposed in connection therewith.
So long as DTC or any successor depositary for a Global Note, or any
nominee, is the registered owner of such Global Note, DTC or such successor
depositary or nominee, as the case may be, will be considered the sole owner or
holder of the series B notes represented by such Global Note for all purposes
under the indenture and the series B notes. Except as set forth above, owners of
beneficial interests in a Global Note will not be entitled to have the series B
notes represented by such Global Note registered in
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their names, will not receive or be entitled to receive physical delivery of
certificated series B notes in definitive form and will not be considered to be
the owners or holders of any series B notes under such Global Note. Accordingly,
each person owning a beneficial interest in a Global Note must rely on the
procedures of DTC or any successor depositary, and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest, to exercise any rights of a holder under the indenture. We
understand that under existing industry practices, in the event that we request
any action of holders or that an owner of a beneficial interest in a Global Note
desires to give or take any action which a holder is entitled to give or take
under the indenture, DTC or any successor depositary would authorize the
participants holding the relevant beneficial interest to give or take such
action and such participants would authorize beneficial owners owning through
such participants to give or take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
DTC has advised us that DTC is a limited-purpose trust company organized
under the Banking Law of the State of New York, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered under the Exchange Act. DTC
was created to hold the securities of its participants and to facilitate the
clearance and settlement of securities transactions among its participants in
such securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers (which
may include the initial purchasers), banks, trust companies, clearing
corporations and certain other organizations some of whom (or their
representatives) own DTC. Access to DTC's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in Global Securities among participants of DTC, it is
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither we, the trustee nor the
initial purchasers will have any responsibility for the performance by DTC or
its participants or indirect participants of their respective obligations under
the rules and procedures governing their operations.
SALES OF NEW NOTES RECEIVED BY BROKER-DEALERS
Each broker-dealer that receives series B notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such series B notes. The prospectus,
as it may be amended or supplemented from time to time, may be used by a broker-
dealer in connection with sales of series B notes received in exchange for
series A notes which were acquired as a result of market-making activities or
other trading activities. We have agreed that, starting on the expiration date
and ending on the close of business on the first anniversary of the expiration
date, we will make this prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale. In addition, until
August 29, 2000, all dealers effecting transactions in the series B notes may be
required to deliver a prospectus.
We will not receive any proceeds from any sale of series B notes by
broker-dealers. Series B notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the series B notes or a combination of those methods
of resale, at prices which may or may not be based upon market prices prevailing
at the time of the sale. Any such sale may be made directly to purchasers or to
or through brokers or dealers who may receive compensation in the form of
commissions or concessions from the selling broker-dealer and/or the purchasers
of the series B notes. Any broker-dealer that sells series B notes that were
received by it for its own account pursuant to the exchange offer and any broker
or dealer that participates in a distribution of such series B notes may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit from sale of the series B notes and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation. The
letter of transmittal states that a broker-dealer will not, by delivering a
prospectus, be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
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For a period of one year after the expiration date, we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests such documents in the letter of
transmittal. We have agreed to pay all expenses incident to the exchange offer
(including the expenses of one counsel for the holders of the series A notes
other than commissions or concessions of any brokers or dealers, and we will
indemnify the holders of the series A notes (including any broker-dealers)
against certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Clifford Chance Rogers & Wells LLP, New York, New York, is passing on the
validity of the notes for us.
EXPERTS
Our consolidated financial statements and the related financial statement
schedule which are incorporated by reference into this prospectus from our
Annual Report on Form 10-K for the fiscal year ended November 30, 1999, have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated by reference in this prospectus in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
The consolidated financial statements of U.S. Home incorporated by
reference in this prospectus and elsewhere in the registration statement from
U.S. Home's Annual Report on Form 10-K for the fiscal year ended December 31,
1999, have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their reports with respect thereto and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by Lennar with the SEC under File
Number 1-11749 are incorporated by reference in this prospectus:
(a) our Annual Report on Form 10-K for the fiscal year ended November
30, 1999;
(b) our Quarterly Report on Form 10-Q for the fiscal quarter ended
February 29, 2000;
(c) our Quarterly Report on Form 10-Q for the fiscal quarter ended May
31, 2000;
(d) our Registration Statement on Form S-4 File Number 333-32860;
(e) our Current Report on Form 8-K dated February 23, 2000;
(f) our Current Report on Form 8-K filed with the Securities and
Exchange Commission on May 16, 2000, as amended by a Form 8-K/A dated June
30, 2000, and;
(g) our Definitive Proxy Statement dated March 9, 2000.
The following documents previously filed by U.S. Home with the SEC under
File Number 1-5899 are incorporated by reference in this prospectus:
(a) U.S. Home's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999;
(b) U.S. Home's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 2000.
(c) U.S. Home's Current Report on Form 8-K dated February 28, 2000;
and
(d) U.S. Home's Current Report on Form 8-K dated May 16, 2000.
All documents filed by Lennar under Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, after the date of this prospectus are
incorporated into this prospectus by reference and will constitute a part of
this prospectus from the date they are filed.
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NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER MADE BY
THIS PROSPECTUS OTHER THAN THOSE CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY LENNAR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY ANY SECURITY OTHER THAN THOSE TO WHICH IT
RELATES, NOR DOES IT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN
OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary................... 1
Use of Proceeds...................... 8
Absence of Public Market............. 8
Risk Factors......................... 11
The Exchange Offer................... 15
Capitalization....................... 21
Business of Lennar................... 22
Business of U.S. Home................ 24
Business of Combined Lennar/U.S.
Home............................... 26
Management of Lennar................. 27
Description of New Senior Secured
Credit Facilities.................. 28
Description of Certain Other
Indebtedness of Lennar............. 30
Description of Notes................. 31
Book Entry, Delivery and Form........ 59
Sales of New Notes Received by
Broker-Dealers..................... 60
Legal Matters........................ 61
Experts.............................. 61
Incorporation of Certain Documents by
Reference.......................... 61
</TABLE>
$325,000,000
LENNAR CORPORATION
[LENNAR CORPORATION LOGO]
OFFER TO EXCHANGE 9.95% SERIES B SENIOR NOTES DUE 2010 WHICH HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT FOR ANY AND ALL OUTSTANDING 9.95% SERIES A
SENIOR NOTES DUE 2010
------------------------
PROSPECTUS
------------------------
Dated July 19, 2000
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 102(b)(7) of the Delaware General Corporation
Law (the "DGCL"), which enables a corporation in its original certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director for violations of the director's fiduciary duty, except
(i) for any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant to Section
174 of the DGCL (providing for liability of directors for the unlawful payment
of dividends or unlawful stock purchases or redemptions) or (iv) for any
transaction from which a director derived an improper personal benefit.
Section 145 of the DGCL empowers us to indemnify, subject to the standards
set forth therein, any person in connection with any action, suit or proceeding
brought before or threatened by reason of the fact that the person was a
director, officer, employee or agent of ours, or is or was serving as such with
respect to another entity at our request. The DGCL also provides that we may
purchase insurance on behalf of any such director, officer, employee or agent.
Our Certificate of Incorporation provides for the indemnification by the
company of each of our directors and officers to the fullest extent permitted by
applicable law.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE.
<TABLE>
<C> <S>
1.1 Purchase Agreement, dated April 28, 2000, by and among
Lennar Corporation (the "Company"), Deutsche Bank Securities
Inc. and Banc One Capital Markets, Inc., Banc of America
Securities LLC, Credit Lyonnais Securities USA Inc., and
Wachovia Securities, Inc. (the "Initial Purchasers").*
3.1 Certificate of Amendment of Certificate of Incorporation,
dated April 9, 1999. Incorporated by reference to Annual
Report on Form 10-K for the fiscal year ended November 30,
1999, file number 1-11749.
3.2 Amended and Restated Certificate of Incorporation, dated
April 28, 1998. Incorporated by reference to Annual Report
on Form 10-K for the fiscal year ended November 30, 1998,
file number 1-11749.
3.3 By-laws. Incorporated by reference to Form 8-K dated October
31, 1997, file number 1-11749.
4.1 Indenture, dated as of May 3, 2000, by and among the Company
and Bank One Trust Company, N.A. (the "Trustee"), including
Form of 9.95% Series A Senior Notes due 2010 and Form of
9.95% Series B Senior Notes due 2010.*
4.2 Registration Rights Agreement, dated as of May 3, 2000, by
and among the Company and the Initial Purchasers.*
5.1 Opinion of Clifford Chance Rogers & Wells LLP.*
10(a) Amended and Restated Lennar Corporation 1997 Stock Option
Plan -- Incorporated by reference to Annual Report on Form
10-K for the year ended November 30, 1997.
10(b) Lennar Corporation 1991 Stock Option Plan -- Incorporated by
reference to Registration Statement No. 33-45442.
10(c) Lennar Corporation Employee Stock Ownership Plan and Trust
-- Incorporated by reference to Registration Statement No.
2-89104.
10(d) Amendment dated December 13, 1989 to Lennar Corporation
Employee Stock Ownership Plan -- Incorporated by reference
to Annual Report on Form 10-K for the year ended November
30, 1990.
10(e) Lennar Corporation Employee Stock Ownership/401k Trust
Agreement dated December 13, 1989 -- Incorporated by
reference to Annual Report on Form 10-K for the year ended
November 30, 1990.
</TABLE>
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<TABLE>
<C> <S>
10(f) Amendment dated April 18, 1990 to Lennar Corporation
Employee Stock Ownership/401k Plan -- Incorporated by
reference to Annual Report on Form 10-K for the year ended
November 30, 1990.
10(g) Partnership Agreement for Lennar Land Partners by and
between Lennar Land Partners Sub, Inc. and LNR Land Partners
Sub, Inc., dated October 24, 1997 -- Incorporated by
reference to Annual Report on Form 10-K for the year ended
November 30, 1997. Lennar Land Partners Sub II, Inc. and LNR
Land Partners Sub II, Inc. entered into an identical
Partnership Agreement for Lennar Land Partners II on June
28, 1999.
10(h) Separation and Distribution Agreement, dated June 10, 1997,
between Lennar Corporation and LNR Property
Corporation -- Incorporated by reference to Registration
Statement No. 333-35671.
10(i) Credit Agreement, dated October 31, 1997, by and among
Lennar Land Partners and the Lenders named therein and a
Guaranty Agreement of Lennar Corporation, dated October 31,
1997 -- Incorporated by reference to Annual Report on Form
10-K for the year ended November 30, 1997. Lennar Land
Partners II was added as a borrower to this agreement
effective July 1, 1999.
10(j) Revolving Credit Agreement (Facilities A and B), dated
October 31, 1997, among Lennar Corporation and Certain
Subsidiaries and the First National Bank of Chicago, as
agent -- Incorporated by reference to Annual Report on Form
10-K for the year ended November 30, 1997.
10(k) First Amendment to Revolving Credit Agreement (Facilities A
and B) dated January 20, 1998, among Lennar Corporation and
Certain Subsidiaries and the First National Bank of Chicago,
as agent -- Incorporated by reference to Annual Report on
Form 10-K for the year ended November 30, 1997.
10(l) Equity Draw-Down Agreement, dated March 25, 1998, between
Lennar Corporation and HSBC James Capel Canada,
Inc. -- Incorporated by reference to Annual Report on Form
10-K for the year ended November 30, 1998.
10(m) Voting Agreement, dated June 10, 1997, between Lennar
Corporation, Warburg, Pincus Investors, L.P. and Pacific
Greystone Corporation -- Incorporated by reference to Form
8-K dated June 10, 1997, file number 1-11749.
10(n) Plan and Agreement of Merger, dated as of February 16, 2000,
between Lennar Corporation, U.S. Home Corporation and Len
Acquisition Corporation -- Incorporated by reference to Form
8-K dated February 23, 2000, file number 1-11749.
10(o) Voting Agreement, dated as of February 16, 2000, among LMM
Family Partnership, L.P., Leonard Miller, Stuart Miller and
U.S. Home Corporation -- Incorporated by reference to Form
8-K dated February 23, 2000, file number 1-11749.
10(p) Employment Agreement, dated as of February 16, 2000, between
Robert J. Strudler and Lennar Corporation. Incorporated by
reference to Form S-4 Filed March 21, 2000.
10(q) Employment Agreement, dated as of February 16, 2000, between
Isaac Heimbinder and Lennar Corporation. Incorporated by
reference to Form S-4 Filed March 21, 2000.
10(r) Commitment Letter dated March 10, 2000 by and among Bank
One, N.A., Bank One Capital Markets, Inc., Bankers Trust
Company, Deutsche Bank Securities, Inc. and Lennar
Corporation. Incorporated by reference to Form S-4 Filed
March 21, 2000.
10(s) Commitment Letter dated March 15, 2000 by and among Bankers
Trust Corporation, First Chicago Capital Corporation and
Lennar Corporation. Incorporated by reference to Form S-4
Filed March 21, 2000.
21.1 List of subsidiaries. Incorporated by reference to the
Annual Report on Form 10-K for the year ended November 30,
1999.
23.2 Consent of Clifford Chance Rogers & Wells LLP (contained in
Exhibit 5.1)
23.3 Consent of Arthur Andersen LLP (relating to financial
statements of U.S. Home)*.
23.4 Consent of Deloitte & Touche LLP (relating to financial
statements of Lennar)*.
99.5 Form of Letter of Transmittal.*
</TABLE>
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<TABLE>
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99.6 Form of Notice of Guaranteed Delivery.*
99.7 Form of Exchange Agent Agreement.*
</TABLE>
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* Previously filed.
(b) Financial Statement Schedule:
Independent Auditors' Report on Schedule:
Schedule II -- Valuation and Qualifying Accounts for the years ended
November 30, 1999, 1998 and 1997 of Lennar Corporation -- Incorporated by
reference to Annual Report on Form 10-K for the year ended November 30,
1999.
ITEM 22. UNDERTAKING.
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(b) The undersigned registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(c) The undersigned registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(d) The undersigned registrants hereby undertake:
(i) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(ii) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(iii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iv) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
II-3
<PAGE> 72
SIGNATURES
Pursuant to the requirements of the Securities Act, the undersigned
registrant has duly caused this amendment to the registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Miami, Florida, on July 19, 2000.
LENNAR CORPORATION
By: /s/ STUART A. MILLER
------------------------------------
Name: Stuart A. Miller
Title: President, Chief Executive
Officer and Director
The following direct and indirect subsidiaries of registrant may guarantee
the debt securities and are co-registrants under this registration statement.
<TABLE>
<CAPTION>
NAME OF CO-REGISTRANT
---------------------
<S> <C>
BCDC Corp.
Boca Greens, Inc.
Boca Isles Club, Inc.
Boca Isles South Club, Inc.
Bramalea California, Inc.
Bramalea California Properties, Inc.
Bramalea California Realty, Inc.
Clodine-Bellaire LP, Inc.
Club Pembroke Isles, Inc.
DCA at Banyan Tree, Inc.
DCA at North Lauderdale, Inc.
DCA at Pembroke Pointe, Inc.
DCA at Wiggins Bay, Inc.
DCA General Contractors, Inc.
DCA Homes of Central Florida, Inc.
DCA NJ Realty, Inc.
DCA of Broward County, Inc.
DCA of Hialeah, Inc.
DCA of Lake Worth, Inc.
DCA of New Jersey, Inc.
Devco Land Corp.
Dyeing & Finishing, Inc.
First Atlantic Building Corp.
Greystone Construction, Inc.
Greystone Homes, Inc.
Greystone Homes of Nevada, Inc.
**Greystone Nevada, LLC
Harris County LP, Inc.
Hillside, Inc.
Inactive Corporations, Inc.
Kings Isle Recreation Corp.
Kings Ridge Golf Corporation
Kings Ridge Recreation Corporation
Kings Wood Development Corporation
Lennar Acquisition Corp. II
Lennar.Com, Inc.
Lennar Communities, Inc.
Lennar Communities Development, Inc.
</TABLE>
II-4
<PAGE> 73
<TABLE>
<CAPTION>
NAME OF CO-REGISTRANT
---------------------
<S> <C>
Lennar Construction, Inc.
Lennar Financial Services, Inc.
Lennar Homes, Inc.
Lennar Homes of Arizona, Inc.
Lennar Homes of California, Inc.
*Lennar Homes of Texas Land and Construction, Ltd.
*Lennar Homes of Texas Sales and Marketing, Ltd.
Lennar La Paz Limited, Inc.
Lennar La Paz, Inc.
Lennar Land Partners Sub, Inc.
Lennar Land Partners Sub II, Inc.
Lennar Management, Inc.
Lennar Nevada, Inc.
Lennar Northland I, Inc.
Lennar Northland II, Inc.
Lennar Northland III, Inc.
Lennar Northland IV, Inc.
Lennar Northland V, Inc.
Lennar Northland VI, Inc.
**Lennar Oceanside, LLC
**Lennar Pacific, Inc.
**Lennar Pacific, L.P.
**Lennar Pacific Properties, Inc.
Lennar Realty, Inc.
Lennar Renaissance, Inc.
Lennar Sacramento, Inc.
Lennar Sales Corp.
Lennar San Jose Holdings, Inc.
Lennar Southland I, Inc.
Lennar Southland II, Inc.
Lennar Southland III, Inc.
Lennar Southwest Holding Corp.
Lennar Texas Holding Company
Lennar Title Services, Inc.
Long Point Development Corporation
Lucerne Greens, Inc.
Lucerne Merged Condominiums, Inc.
M.A.P. Builders, Inc.
M.A.P. Vineyards Of Plantation, Inc.
Marlborough Development Corporation
Midland Housing Industries Corp.
Midland Investment Corporation
Mission Viejo Holdings, Inc.
Mission Viejo 12S Venture, LP
Monterey Village Development Corp.
Quality Roof Truss Company
**Rancho Summit, LLC
Regency Title Company
Riviera Land Corp.
Savell Gulley Development Corporation
Silver Lakes-Gateway Clubhouse, Inc.
SLTC, Inc.
Strategic Holdings, Inc.
Strategic Technologies, Inc.
Strategic Technologies Communications of California, Inc.
Superior Realty & Marketing, Inc.
</TABLE>
II-5
<PAGE> 74
<TABLE>
<CAPTION>
NAME OF CO-REGISTRANT
---------------------
<S> <C>
Universal Title Insurors, Inc.
U.S. Home Corporation (F/K/A Len Acquisition Corporation)
W. B. Homes, Inc.
Westchase, Inc.
Brush Masters, Inc.
Canterbury Corporation
Countryplace Golf Course, Inc.
E.M.J.V. Corp.
Homecraft Corporation
Imperial Homes Corporation
Lundgren Bros. Construction, Inc.
Mid-County Utilities, Inc.
Oceanpointe Development Corporation
Orrin Thompson Construction Company
Orrin Thompson Homes Corp.
Paparone Construction Co.
Prarie Lake Corporation
Rivenhome Corporation
Rutenberg Homes, Inc. (FL)
Rutenberg Homes, Inc. (TX)
Stoney Corporation
Summerway Investment Corp.
U.S. Home of Arizona Construction Co.
U.S. Home of Colorado Real Estate, Inc.
U.S. Home Realty Corporation
U.S. Home Realty, Inc. (MD)
U.S. Home Realty, Inc. (TX)
U.S.H. Corporation of New York
U.S.H. Los Prados, Inc.
USH Acquisition Corp.
USH Equity Corporation
USH Holding, Inc.
USH Millennium Ventures Corp.
USH/MJR, Inc.
USH (West Lake), Inc.
USH Woodbridge, Inc.
Weststone Corporation
</TABLE>
as Guarantors
By: /s/ DAVID B. MCCAIN
------------------------------------
Name: David B. McCain
Title: Vice President
---------------
* Executed by Lennar Texas Holding Company, as General Partner.
** Executed by Authorized Agent.
II-6
<PAGE> 75
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Stuart A. Miller, Bruce Gross and Diane J.
Bessette his or her true and lawful attorney-in-fact and agent, with full powers
of substitution to sign for him and her and in his or her name any or all
amendments (including post-effective amendments) to the registration statement
to which this power of attorney is attached and to file those amendments and all
exhibits to them and other documents to be filed in connection with them with
the Securities and Exchange Commission.
Pursuant to the requirement of the Securities Act of 1933, this amendment
to the registration statement has been signed by the following persons in the
capacities and on the date indicated.
ON BEHALF OF LENNAR CORPORATION:
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
--------- -------- ----
<S> <C> <C>
/s/ STUART A. MILLER* Chief Executive Officer, President, and July 19, 2000
------------------------------------ Director
Stuart A. Miller (Principal Executive Officer)
/s/ BRUCE GROSS* Vice President and Chief Financial Officer July 19, 2000
------------------------------------ (Principal Financial Officer)
Bruce Gross
/s/ DIANE J. BESSETTE* Vice President and Controller July 19, 2000
------------------------------------ (Principal Accounting Officer)
Diane J. Bessette
/s/ LEONARD MILLER* Chairman of the Board of Directors July 19, 2000
------------------------------------
Leonard Miller
/s/ IRVING BOLOTIN* Director July 19, 2000
------------------------------------
Irving Bolotin
/s/ STEVEN L. GERARD* Director July 19, 2000
------------------------------------
Steven L. Gerard
/s/ JONATHAN M. JAFFE* Director July 19, 2000
------------------------------------
Jonathan M. Jaffe
/s/ R. KIRK LANDON* Director July 19, 2000
------------------------------------
R. Kirk Landon
/s/ SIDNEY LAPIDUS* Director July 19, 2000
------------------------------------
Sidney Lapidus
/s/ REUBEN S. LEIBOWITZ* Director July 19, 2000
------------------------------------
Reuben S. Leibowitz
/s/ HERVE RIPAULT* Director July 19, 2000
------------------------------------
Herve Ripault
/s/ ARNOLD P. ROSEN* Director July 19, 2000
------------------------------------
Arnold P. Rosen
/s/ STEVEN J. SAIONTZ* Director July 19, 2000
------------------------------------
Steven J. Saiontz
/s/ ROBERT J. STRUDLER* Vice-Chairman of the Board of Directors July 19, 2000
------------------------------------
Robert J. Strudler
</TABLE>
II-7
<PAGE> 76
ON BEHALF OF THE FOLLOWING LISTED CO-REGISTRANTS:
<TABLE>
<CAPTION>
NAME OF CO-REGISTRANT
---------------------
<S> <C>
BCDC Corp.
Boca Greens, Inc.
Boca Isles Club, Inc.
Boca Isles South Club, Inc.
Bramalea California, Inc.
Bramalea California Properties, Inc.
Bramalea California Realty, Inc.
Clodine-Bellaire LP, Inc.
Club Pembroke Isles, Inc.
DCA at Banyan Tree, Inc.
DCA at North Lauderdale, Inc.
DCA at Pembroke Pointe, Inc.
DCA at Wiggins Bay, Inc.
DCA General Contractors, Inc.
DCA Homes of Central Florida, Inc.
DCA NJ Realty, Inc.
DCA of Broward County, Inc.
DCA of Hialeah, Inc.
DCA of Lake Worth, Inc.
DCA of New Jersey, Inc.
Devco Land Corp.
Dyeing & Finishing, Inc.
First Atlantic Building Corp.
Harris County LP, Inc.
Hillside, Inc.
Inactive Corporations, Inc.
Kings Isle Recreation Corp.
Kings Ridge Golf Corporation
Kings Ridge Recreation Corporation
Kings Wood Development Corporation
Lennar Acquisition Corp. II
Lennar Communities, Inc.
Lennar Communities Development, Inc.
Lennar Construction, Inc.
Lennar Homes, Inc.
Lennar Homes of Arizona, Inc.
Lennar Homes of California, Inc.
Lennar La Paz Limited, Inc.
Lennar La Paz, Inc.
Lennar Land Partners Sub, Inc.
Lennar Land Partners Sub II, Inc.
Lennar Management, Inc.
Lennar Nevada, Inc.
Lennar Northland I, Inc.
Lennar Northland II, Inc.
Lennar Northland III, Inc.
Lennar Northland IV, Inc.
Lennar Northland V, Inc.
Lennar Northland VI, Inc.
Lennar Realty, Inc.
Lennar Renaissance, Inc.
Lennar Sacramento, Inc.
Lennar San Jose Holdings, Inc.
Lennar Southland I, Inc.
</TABLE>
II-8
<PAGE> 77
<TABLE>
<CAPTION>
NAME OF CO-REGISTRANT
---------------------
<S> <C>
Lennar Southland II, Inc.
Lennar Southland III, Inc.
Lennar Southwest Holding Corp.
Lennar Texas Holding Company
Lennar.Com, Inc.
Long Point Development Corporation
Lucerne Greens, Inc.
Lucerne Merged Condominiums, Inc.
M.A.P. Builders, Inc.
M.A.P. Vineyards of Plantation, Inc.
Marlborough Development Corporation
Midland Housing Industries Corp.
Midland Investment Corporation
Mission Viejo Holdings, Inc.
Monterey Village Development Corp.
Quality Roof Truss Company
Riviera Land Corp.
Savell Gulley Development Corporation
Silver Lakes-Gateway Clubhouse, Inc.
Strategic Holdings, Inc.
Strategic Technologies Communications of California, Inc.
Strategic Technologies, Inc.
Superior Realty & Marketing, Inc.
W. B. Homes, Inc.
Westchase, Inc.
</TABLE>
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
--------- -------- ----
<S> <C> <C>
/s/ STUART A. MILLER* Chief Executive Officer, President and July 19, 2000
------------------------------------ Director
Stuart A. Miller (Principal Executive Officer)
/s/ BRUCE GROSS* Chief Financial Officer, and Director July 19, 2000
------------------------------------ (Principal Financial Officer)
Bruce Gross
/s/ DIANE J. BESSETTE* Controller and Director July 19, 2000
------------------------------------ (Principal Accounting Officer)
Diane J. Bessette
/s/ LEONARD MILLER* Director July 19, 2000
------------------------------------
Leonard Miller
/s/ ALLAN J. PEKOR* Director July 19, 2000
------------------------------------
Allan J. Pekor
</TABLE>
ON BEHALF OF THE FOLLOWING LISTED CO-REGISTRANTS:
<TABLE>
<CAPTION>
NAME OF CO-REGISTRANT
---------------------
<S> <C>
Brush Masters, Inc. (26) (29) (30) (53)
Canterbury Corporation (12) (15) (53) (54) (58)
Countryplace Golf Course, Inc. (53) (57) (58)
E.M.J.V. Corp. (10) (21) (38) (53) (58)
Greystone Construction, Inc. (6) (22.1) (45)
Greystone Homes of Nevada, Inc. (5) (16) (19)
Greystone Homes, Inc. (6.1) (16) (18.1) (22)
Homecraft Corporation (54) (59)
Imperial Homes Corporation (13) (53) (59)
Lennar Financial Services, Inc. (24) (36) (42) (48)
Lennar Pacific Properties, Inc. (5) (16) (19) (46)
Lennar Pacific, Inc. (5) (16) (19) (46)
</TABLE>
II-9
<PAGE> 78
<TABLE>
<CAPTION>
NAME OF CO-REGISTRANT
---------------------
<S> <C>
Lennar Sales Corp. (5) (16) (22) (46)
Lennar Title Services, Inc. (24) (36) (43) (47)
Lundgren Bros. Construction, Inc. (30) (40) (44) (63)
Mid-County Utilities, Inc. (1) (11) (31)
Oceanpointe Development Corporation (7) (38) (58)
Orrin Thompson Construction Company (59)
Orrin Thompson Homes Corp. (59)
Paparone Construction Co. (13) (59)
Prairie Lake Corporation (12) (38) (53) (58)
Regency Title Company (24) (36) (43) (48) (68)
Rivenhome Corporation (9) (38) (53) (54) (58)
Rutenberg Homes, Inc. (FL) (9) (13) (53) (58)
Rutenberg Homes, Inc. (TX) (39) (53) (59)
SLTC, Inc. (25) (34) (35) (43) (48) (62)
Stoney Corporation (2) (15) (58)
Summerway Investment Corp. (38) (53) (58) (66)
U.S. Home Corporation (f/k/a Len Acquisition Corporation)
(18) (43) (55) (61)
U.S. Home of Arizona Construction Co. (4) (41) (58)
U.S. Home of Colorado Real Estate, Inc. (17) (58) (67)
U.S. Home Realty Corporation (10) (27) (38) (58)
U.S. Home Realty, Inc. (MD) (3) (32) (38) (53) (58)
U.S. Home Realty, Inc. (TX) (13) (59)
U.S.H. Corporation of New York (10) (59)
U.S.H. Los Prados, Inc. (20) (38) (53) (56) (58)
Universal Title Insurors, Inc. (24) (33) (36) (37) (43) (48)
USH (West Lake), Inc. (38) (49) (53) (58) (60)
USH Acquisition Corp. (26) (53) (64)
USH Equity Corporation (38) (53) (59)
USH Holding, Inc. (38) (53) (54) (59)
USH Millennium Ventures Corp. (23) (58) (65)
USH Woodbridge, Inc. (8) (14) (28) (38) (53) (58)
USH/MJR, Inc. (50) (54) (58)
Weststone Corporation (2) (15) (58)
</TABLE>
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
--------- -------- ----
<S> <C> <C>
/s/ PHILIP F. BARBER* (1) Chief Executive Officer July 19, 2000
------------------------------------ (Principal Executive Officer) and Director
Philip F. Barber
/s/ WALTER BEEMAN* (2) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Walter Beeman
/s/ JERROLD H. BERMAN* (3) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Jerrold H. Berman
/s/ STEVEN L. CRADDOCK* (4) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Steven L. Craddock
/s/ MARC CHASMAN* (5) Director and Treasurer (Principal July 19, 2000
------------------------------------ Financial Officer)
Marc Chasman (6) Director
(6.1) Director and Controller (Principal
Accounting Officer)
/s/ SAM B. CRIMALDI* (7) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Sam B. Crimaldi
/s/ AL CROOM* (8) Chief Financial Officer (Principal July 19, 2000
------------------------------------ Financial Officer)
Al Croom
</TABLE>
II-10
<PAGE> 79
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
--------- -------- ----
<S> <C> <C>
/s/ JAMES E. CURRY* (9) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
James E. Curry
/s/ BILL DASKAROLIS* (10) Chief Financial Officer (Principal July 19, 2000
------------------------------------ Financial Officer)
Bill Daskarolis
/s/ RORY DICKENS* (11) Director July 19, 2000
------------------------------------
Rory Dickens
/s/ FRANCIS J. DOLAN* (12) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Francis J. Dolan
/s/ GARY L. FRUEH* (13) Chief Financial Officer (Principal July 19, 2000
------------------------------------ Financial Officer)
Gary L. Frueh (14) Director
/s/ EDWARD R. GANGWISCH* (15) Chief Financial Officer (Principal July 19, 2000
------------------------------------ Financial Officer)
Edward R. Gangwisch
/s/ ROBERT W. GARCIN* (16) Director July 19, 2000
------------------------------------
Robert W. Garcin
/s/ LARRY GEIGER* (17) Chief Financial Officer (Principal July 19, 2000
------------------------------------ Financial Officer)
Larry Geiger
/s/ BRUCE GROSS* (18) Chief Financial Officer (Principal July 19, 2000
------------------------------------ Financial Officer) and Director
Bruce Gross (18.1) Chief Financial Officer (Principal
Financial Officer)
/s/ EMILE HADDAD* (19) President and Director July 19, 2000
------------------------------------ (Principal Executive Officer)
Emile Haddad
/s/ CHRISTINA HART* (20) Chief Financial Officer (Principal July 19, 2000
------------------------------------ Financial Officer)
Christina Hart
/s/ ANDREW G. IRICK, II* (21) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Andrew G. Irick, II
/s/ JONATHAN M. JAFFE* (22) President and Director July 19, 2000
------------------------------------ (Principal Executive Officer)
Jonathan M. Jaffe (22.1) President (Principal Executive
Officer)
/s/ CRAIG M. JOHNSON* (23) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Craig M. Johnson
/s/ NANCY KAMINSKY* (24) Chief Financial Officer and Director July 19, 2000
------------------------------------ (Principal Financial Officer)
Nancy Kaminsky (25) Director
/s/ STEVEN E. LANE* (26) Director July 19, 2000
------------------------------------
Steven E. Lane
/s/ GENE E. LANTON* (27) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer) and Director
Gene E. Lanton
/s/ CHARLES LINDSAY* (28) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Charles Lindsay
/s/ PAUL W. LUEDEMANN* (29) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Paul W. Luedemann
/s/ ALLAN D. LUNDGREN* (30) Chief Financial Officer (Principal July 19, 2000
------------------------------------ Financial Officer)
Allan D. Lundgren
</TABLE>
II-11
<PAGE> 80
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
--------- -------- ----
<S> <C> <C>
/s/ DAVID MARKHAM* (31) Chief Financial Officer (Principal July 19, 2000
------------------------------------ Financial Officer) and Director
David Markham (32) Chief Financial Officer (Principal
Financial Officer)
/s/ BEVERLY MCREYNOLDS* (33) President and Director July 19, 2000
------------------------------------ (Principal Executive Officer)
Beverly McReynolds
/s/ N.S. MOIZE* (34) Director July 19, 2000
------------------------------------
N.S. Moize
/s/ WILLIAM G. MOIZE* (35) President and Director July 19, 2000
------------------------------------ (Principal Executive Officer)
William G. Moize
/s/ DEBRA MODIST* (36) Controller July 19, 2000
------------------------------------ (Principal Accounting Officer)
Debra Modist
/s/ JANICE MUNOZ* (37) Director July 19, 2000
------------------------------------
Janice Munoz
/s/ THOMAS A. NAPOLI* (38) Director July 19, 2000
------------------------------------ (39) Chief Financial Officer (Principal
Thomas A. Napoli Financial Officer)
/s/ JAMES R. NEILSON* (40) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer) and Director
James R. Neilson
/s/ MICHAEL O'CONNER* (41) Chief Financial Officer (Principal July 19, 2000
------------------------------------ Financial Officer)
Michael O'Conner
/s/ ALLAN J. PEKOR* (42) President and Director (Principal July 19, 2000
------------------------------------ Executive Officer)
Allan J. Pekor (43) Director
/s/ PETER PFLAUM* (44) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer) and Director
Peter Pflaum
/s/ ALLAN QUAN* (45) Treasurer and Controller (Principal July 19, 2000
------------------------------------ Financial Officer and Principal Accounting
Allan Quan Officer)
(46) Controller (Principal Accounting
Officer)
/s/ LINDA REED* (47) President and Director July 19, 2000
------------------------------------ (Principal Executive Officer)
Linda Reed (48) Director
/s/ PAUL REMPE* (49) Chief Financial Officer (Principal July 19, 2000
------------------------------------ Financial Officer)
Paul Rempe
/s/ MICHAEL T. RICHARDSON* (50) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Michael T. Richardson
INTENTIONALLY BLANK (51) Reserved
(52) Reserved
/s/ CHESTER P. SADOWSKI* (53) Director; July 19, 2000
------------------------------------ (54) Chief Financial Officer (Principal
Chester P. Sadowski Financial Officer)
(55) Controller (Principal Accounting
Officer)
/s/ MIKE DE SILVA* (56) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Mike De Silva
</TABLE>
II-12
<PAGE> 81
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
--------- -------- ----
<S> <C> <C>
/s/ PAUL SIMS* (57) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Paul Sims
/s/ RICHARD G. SLAUGHTER* (58) Director July 19, 2000
------------------------------------ (59) Chief Executive Officer (Principal
Richard G. Slaughter Executive Officer) and Director
/s/ GREGORY A. SNYDER* (60) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Gregory A. Snyder
/s/ ROBERT J. STRUDLER* (61) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer) and Director
Robert J. Strudler
/s/ E. BLAKE UTLEY* (62) Chief Financial Officer and Controller July 19, 2000
------------------------------------ (Principal Financial Officer and Principal
E. Blake Utley Accounting Officer)
/s/ PHILIP J. WALSH, III* (63) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Philip J. Walsh, III (64) Chief Executive Officer (Principal
Executive Officer) and Director
/s/ CHARLES WEBBER, JR.* (65) Chief Financial Officer (Principal July 19, 2000
------------------------------------ Financial Officer)
Charles Webber, Jr. (66) Chief Executive Officer (Principal
Executive Officer) and Chief Financial
Officer (Principal Financial Officer)
/s/ JEFFREY H. WHITON* (67) Chief Executive Officer (Principal July 19, 2000
------------------------------------ Executive Officer)
Jeffrey H. Whiton
/s/ ANN JOHNSON* (68) President (Principal Executive Officer) July 19, 2000
------------------------------------
Ann Johnson
</TABLE>
ON BEHALF OF THE FOLLOWING LIMITED PARTNERSHIP CO-REGISTRANTS:
<TABLE>
<CAPTION>
NAME OF CO-REGISTRANT GENERAL PARTNER OF CO-REGISTRANT
--------------------- --------------------------------
<S> <C>
Lennar Homes of Texas Land and Construction, Lennar Texas Holding Company (General Partner)
Ltd.
Lennar Homes of Texas Sales and Marketing, Lennar Texas Holding Company (General Partner)
Ltd.
Lennar Pacific, L.P. Greystone Homes, Inc. (General Partner)
Mission Viejo 12S Venture, LP Mission Viejo Holdings, Inc. (General Partner)
</TABLE>
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
--------- -------- ----
<S> <C> <C>
/s/ DIANE J. BESSETTE* Director of each of: Lennar Texas Holding July 19, 2000
------------------------------------ Company and Mission Viejo Holdings, Inc.
Diane J. Bessette
/s/ MARC CHASMAN* Director of Greystone Homes, Inc. July 19, 2000
------------------------------------
Marc Chasman
/s/ ROBERT W. GARCIN* Director of Greystone Homes, Inc. July 19, 2000
------------------------------------
Robert W. Garcin
/s/ BRUCE GROSS* Director of each of: Lennar Texas Holding July 19, 2000
------------------------------------ Company and Mission Viejo Holdings, Inc.
Bruce Gross
</TABLE>
II-13
<PAGE> 82
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
--------- -------- ----
<S> <C> <C>
/s/ JONATHAN M. JAFFE* Director of Greystone Homes, Inc. July 19, 2000
------------------------------------
Jonathan M. Jaffe
/s/ LEONARD MILLER* Director of each of: Lennar Texas Holding July 19, 2000
------------------------------------ Company and Mission Viejo Holdings, Inc.
Leonard Miller
/s/ STUART A. MILLER* Director of each of: Lennar Texas Holding July 19, 2000
------------------------------------ Company and Mission Viejo Holdings, Inc.
Stuart A. Miller
/s/ ALLAN J. PEKOR* Director of each of: Lennar Texas Holding July 19, 2000
------------------------------------ Company and Mission Viejo Holdings, Inc.
Allan J. Pekor
/s/ ALLAN QUAN* Director of Greystone Homes, Inc. July 19, 2000
------------------------------------
Allan Quan
</TABLE>
* By: /s/ STUART A. MILLER
-----------------
Stuart A.
Miller
Attorney in
Fact
II-14
<PAGE> 83
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 Purchase Agreement, dated April 28, 2000, by and among
Lennar Corporation (the "Company"), Deutsche Bank Securities
Inc. and Banc One Capital Markets, Inc., Banc of America
Securities LLC, Credit Lyonnais Securities USA Inc., and
Wachovia Securities, Inc. (the "Initial Purchasers").*
4.1 Indenture, dated as of May 3, 2000, by and among the Company
and Bank One Trust Company, N.A. (the "Trustee"), including
Form of 9.95% Series A Senior Notes due 2010 and Form of
9.95% Series B Senior Notes due 2010.*
4.2 Registration Rights Agreement, dated as of May 3, 2000, by
and among the Company and the Initial Purchasers.*
5.1 Opinion of Clifford Chance Rogers & Wells LLP.*
23.2 Consent of Clifford Chance Rogers & Wells LLP (contained in
Exhibit 5.1).
23.3 Consent of Arthur Andersen LLP (relating to financial
statements of U.S. Home).*
23.4 Consent of Deloitte & Touche LLP (relating to financial
statements of Lennar).*
99.5 Form of Letter of Transmittal.*
99.6 Form of Notice of Guaranteed Delivery.*
99.7 Form of Exchange Agent Agreement.*
</TABLE>
---------------
* Previously filed.
