<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 27, 1997
Registration No. 33-___________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
--------------------
BELMONT HOMES, INC.
(Exact name of registrant as specified in its charter)
Mississippi 64-0834574
(State of incorporation) (I.R.S. Employer Identification No.)
Highway 25 South, Industrial Park Drive
Belmont, Mississippi 38827
601-454-9217
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
--------------------
Jerold Kennedy
Belmont Homes, Inc.
Highway 25 South, Industrial Park Drive
Belmont, Mississippi 38827
601-454-9217
(Address, including zip code, and telephone number, including area code,
of agent for service)
--------------------
Copy to:
J. Chase Cole, Esq.
Waller Lansden Dortch & Davis,
A Professional Limited Liability Company
2100 Nashville City Center
511 Union Street
Nashville, Tennessee 37219
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Effective Date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please 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(c)
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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================================
Proposed maximum
Title of shares Amount to be offering price Proposed maximum aggregate Amount of
to be registered registered per share(1) offering price(1) registration fee
=====================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, par
value, $.10 per share 75,000 shares $10.20 $765,000 $231.82
=====================================================================================================================
</TABLE>
(1) Estimated solely for purposes of determining the amount of the registration
fee, in accordance with Rule 457(c) under the Securities Act of 1933, as
amended, and based upon the average of the high and low per share prices on
January 22, 1997 for shares of the common stock of the registrant, as
reported on the Nasdaq's National Market.
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.
================================================================================
<PAGE> 2
PROSPECTUS
75,000 SHARES
BELMONT HOMES, INC.
COMMON STOCK
This Prospectus relates to the resale of up to an aggregate of 75,000
shares of common stock, par value $.10 per share (the "Common Stock"), of
Belmont Homes, Inc. ("Belmont Homes" or the "Company"). Such shares are issuable
upon exercise of a warrant to purchase 75,000 shares of Common Stock (the
"Warrant") issued to The Suddath Companies (the "Selling Shareholder") on
October 25, 1996.
The shares offered hereby may be sold from time to time by the Selling
Shareholder after exercise of the Warrant in transactions on the Nasdaq National
Market (the "NNM"), in negotiated transactions, through the writing of options
on the shares, or a combination of such methods of sale, at prices related to
such prevailing market prices or at negotiated prices. The Selling Shareholder
may effect such transactions by selling the shares to or through broker-dealers,
and such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholder and/or the purchasers of
the shares for which such broker-dealers may act as agent or to whom they sell
as principal, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions). Sales under this Prospectus by the
Selling Shareholder are subject to contractual restrictions. See "Selling
Shareholder."
None of the proceeds from the sale of the shares by the Selling Shareholder
will be received by the Company. The Company will, however, receive proceeds
from the exercise of the Warrant, if the Warrant is eventually exercised. The
Company has agreed to bear all expenses (other than underwriting discounts and
selling commissions, and fees and expenses of counsel and other advisers to the
Selling Shareholder) in connection with the registration of the Common Stock
being offered by the Selling Shareholder. The Company has agreed to indemnify
the Selling Shareholder against certain liabilities, including liabilities under
the Securities Act.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
The Company's Common Stock is traded on the NNM under the symbol "BHIX." On
January 22, 1997, the last reported per share sale price of the Common Stock
was $9.75, as reported by the NNM.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
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 January 27, 1997
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Risk Factors............................................................... 4
Belmont Homes, Inc......................................................... 8
Use of Proceeds............................................................ 8
Selling Shareholder........................................................ 9
Plan of Distribution....................................................... 9
Experts.................................................................... 10
Legal Matters.............................................................. 10
</TABLE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports and other information with the Securities and Exchange Commission (the
"Commission"). The Company has furnished and intends to furnish reports to its
shareholders, which will include financial statements audited by its independent
certified public accounts, and such other reports as it may determine to furnish
or as required by law, including Sections 13(a) and 15(d) of the Exchange Act.
Proxy statements, reports and other information concerning the Company can be
inspected and copied at the Commission's office at 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549, and at its regional offices located in the
Northwestern Atrium Center, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661; and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
The Commission maintains a web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants
such as the Company which file electronically with the Commission. The Common
Stock is listed on the Nasdaq National Market. Proxy statements, reports and
other information concerning the Company can be inspected and copied at the
Nasdaq Operations office located at 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed a registration statement (the "Registration
Statement") on Form S-3 with respect to the Common Stock offered hereby with the
Commission under the Securities Act of 1933 (the "Securities Act"). This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement, certain
items of which are contained in schedules and exhibits to the Registration
Statement as permitted by the rules and regulations of the Commission.
Statements contained in this Prospectus as to the contents of any agreement,
instrument or other document referred to are not necessarily complete. With
respect to each such agreement, instrument or other document filed as an exhibit
to the Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference.
This Prospectus (including documents incorporated by reference) contains
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Discussions containing such
forward-looking statements may be found in the material set forth in
Management's Discussion and Analysis of Financial Condition and Results of
Operations in the documents incorporated by reference as well as within the
Prospectus and documents incorporated by reference generally. In addition, when
used in this Prospectus and documents incorporated by reference, the words
"anticipates" and "expects" and similar expressions are intended to
identify forward-looking statements. Such statements are subject to a number of
risks and uncertainties. Actual results in the future could differ materially
from those described in the forward-looking statements as a result of, among
other factors, the matters set forth in the Prospectus, including the Risk
Factors, and documents incorporated by reference generally. The Company
undertakes no obligation to publicly release the result of any revisions to
these forward-looking statements that may be made to reflect any future events
or circumstances.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
by the Registrant are incorporated herein by reference as of the dates thereof:
(a) Annual Report on Form 10-K for the year ended December 31, 1995 (Commission
No. 0-26142); (b) the description of the Common Stock contained in the
Registration Statement on Form 8-A, filed pursuant to Section 12 of the Exchange
Act on May 25, 1995;
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<PAGE> 4
(c) Quarterly Report on Form 10-Q for the period ended March 31, 1996
(Commission No. 0-26142); (d) Quarterly Report on Form 10-Q for the period ended
June 30, 1996, as amended by the Quarterly Report on Form 10-Q/A for the period
ended June 30, 1996 (Commission No. 0-26142); (e) Quarterly Report on Form 10-Q
for the period ended September 30, 1996 (Commission No. 0-26142); (f) Current
Report on Form 8-K filed by the Company with the Commission on August 30, 1996
(Commission No. 0-26142); and (g) Current Report on Form 8-K filed by the
Company with the Commission on November 13, 1996 (Commission No. 0-26142).
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Common Stock shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in this Prospectus or
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents referred to above which have been or may be
incorporated by reference herein (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference in such documents).
Requests for such copies should be directed to Secretary, Belmont Homes, Inc.,
Highway 25 South, Industrial Park Drive, Belmont, Mississippi 38827 (telephone
number 601-454-9217).
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERINGS HEREIN CONTAINED AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE SELLING SHAREHOLDER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF ANY OFFER TO BUY, THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT ANY INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.
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<PAGE> 5
RISK FACTORS
In addition to the other information contained in, or incorporated by
reference into, this Prospectus, prospective investors should consider the
following factors in evaluating the Company and its business before purchasing
any of the shares of the Common Stock offered hereby.
CYCLICAL AND SEASONAL NATURE OF THE MANUFACTURED HOUSING MARKET
The manufactured housing market historically has been highly cyclical and
seasonal and is influenced by many of the same national and regional economic
and demographic factors which affect the broader housing market, including
consumer confidence, interest rates, availability of financing, regional
population and employment trends, availability and cost of alternative housing
and general economic conditions, including recessions. The manufactured housing
industry generally experiences lower sales in the first and fourth quarters of
the year as a result of the effect of adverse weather on manufacturing,
distribution and sales efforts. The Company may, in certain periods, be affected
by these economic and seasonal trends. There can be no assurance that the
manufactured housing market will not experience future declines or that such
declines will not have a material adverse effect on the Company.
EXPANSION RISKS
The Company acquired all of the outstanding stock of Spirit Homes, Inc.
effective October 1, 1995, and acquired all of the outstanding stock of
Bellcrest Homes, Inc. on October 25, 1996. The future results of operations of
the Company are dependant, in part, upon the ability of management to assimilate
the operations of these acquisitions, as well as any future acquisitions, into
the Company and to oversee these expanded operations. The Company's ability to
manage these and any future acquisitions will depend upon a number of factors,
including the Company's capital resources, the availability of suitable
facility locations on acceptable terms, its ability to hire a sufficient number
of experienced plant management personnel, skilled workers and other employees,
and its ability to control operating and production costs. There can be no
assurance that the Company will be successful in entering new markets or that
these recent acquisitions or its manufacturing expansion will not have an
adverse effect on the Company's operating results, particularly in the fiscal
quarters during which management attempts to implement the Company's clustering
concept and other operating strategies. If the manufactured housing industry
suffers a downturn, or if demand for the Company's homes declines, such a
downturn or decline could result in the Company having significant excess
manufacturing capacity, which in turn could adversely affect the Company's
results of operations or financial condition.
REGIONAL MARKET CONCENTRATION
Sales to dealers in the Southeast and Southwest account for a significant
portion of the Company's net sales. Although management believes, based on the
Company's current shipment levels, that the manufactured housing market is
strong, demographic factors and economic conditions in the Company's primary and
secondary markets have adversely affected the industry in the past and could
have a material adverse effect on the Company's sales in the future.
DEPENDENCE ON KEY PERSONNEL
The success of the Company is dependent upon the continued services of the
Company's senior management, particularly upon its President and Chief Executive
Officer, Jerold Kennedy. The loss of the services of Mr. Kennedy or any other
member of senior management could have a material adverse effect on the
Company's business. In addition, the Company's continued growth will depend upon
its ability to attract and retain experienced management personnel.
On November 5, 1996, the Company announced that Mr. Kennedy had been
diagnosed with a small lung tumor. According to Mr. Kennedy's physicians, the
cancerous growth was detected very early and extensive testing indicated no
spread of the tumor. The current prognosis for complete remission of the cancer
is excellent.
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LIMITED LABOR SUPPLY
The Company has experienced shortages of available labor at its facilities
from time to time in the past. In connection with any additional expansion, the
Company will need to find, hire and train additional employees. There can be no
assurance that the Company will be able to hire a sufficient number of
employees, including skilled workers, or that the Company's wage expense will
not increase as a result of a shortage in the supply of available workers.
AVAILABILITY AND PRICE OF RAW MATERIALS
The Company is dependent upon outside suppliers for all of its raw material
needs and, therefore, is subject to price increases and delays in receiving
supplies of lumber, gypsum, particleboard, paneling, insulation, steel, wiring,
plumbing and other materials. A sudden increase in the demand for raw materials,
particularly lumber and insulation, could delay delivery times for supplies and
significantly affect prices. In the past, the Company has added a lumber
surcharge to the price of its homes to offset anticipated lumber price
increases. No assurance can be given that the Company will continue to have
available necessary raw materials at reasonable prices or that any increases in
raw material costs would not have a material adverse effect on the Company's
profitability. After a home is ordered, the Company does not adjust the sales
price of the home, and, therefore, none of the Company's backlog of homes on
order reflect subsequent material cost increases.
AVAILABILITY OF DEALER AND CONSUMER FINANCING
The Company's dealers and the retail purchasers of the Company's homes
normally secure financing from third-party lenders. The availability, interest
rate and other costs of such financing are dependent on the lending practices of
financial institutions, governmental policies and economic and other conditions,
all of which are beyond the control of the Company. Interest rates for
manufactured home loans are generally higher, and the terms of these loans
shorter, than loans for site-built homes. Additionally, manufactured home
financing is at times more difficult to obtain than conventional home mortgages.
COMPETITION
The manufactured housing industry is highly competitive, and the barriers
to entry into the industry are relatively low. Competition exists at the
manufacturing and retail levels in terms of price, product quality and features,
warranty and repair service and the availability of dealer and retail customer
financing. There are numerous companies that are in direct competition with the
Company in the states where the Company's homes are sold, and many of these
competitors have been operating longer and have substantially greater
manufacturing, financial and other resources than the Company. Certain of the
Company's competitors provide customers with financing from captive finance
subsidiaries. Additionally, management believes that a significant amount of new
manufactured housing production capacity has been developed in the past three
years. A downturn in the manufactured housing industry could result in excess
industry capacity, which in turn could result in increased competition adversely
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affecting the Company's results of operations or financial condition. In
addition, the Company competes with other manufacturers, some of which maintain
their own retail sales centers, for quality independent dealers. Manufactured
homes also compete with apartments, townhouses, condominiums and prefabricated,
modular site-built homes. A contraction in consumer credit could provide an
advantage to those competitors with substantial capital resources or captive
financing capabilities.
CONTINGENT LIABILITIES
As is customary in the manufactured housing industry, substantially all of
the Company's dealers finance their purchases through "floor plan" arrangements
under which a financial institution provides the dealer with a loan for the
purchase price of the home and maintains a security interest in the home as
collateral. In connection with a floor plan arrangement, the financial
institution which provides the dealer financing customarily requires the Company
to enter into a separate repurchase agreement with the financial institution
under which the Company is obligated, upon default by the dealer, to repurchase
the homes in an amount equal to the unpaid balance, plus certain administrative
and handling expenses. No assurance can be given that the Company will not
suffer losses with respect to, and as a consequence of, these financing
arrangements.
The Company maintains a warranty reserve which management believes is
adequate to cover estimated warranty claims to be incurred. If the Company
were to incur warranty and service expense in amounts significantly in excess
of the Company's warranty reserve, the Company's results of operations or
financial condition could be adversely affected.
POSSIBLE VOLATILITY OF STOCK PRICE
The market price of the Common Stock could be subject to significant
fluctuations in response to variations in financial results or announcements of
material events by the Company or its competitors. Regulatory changes,
developments in the manufactured housing industry or changes in general
conditions in the economy or the financial markets could also adversely affect
the market price of the Common Stock.
REGULATION
The Company's operations are subject to a variety of federal, state and
local laws. The National Manufactured Housing Construction and Safety Standards
Act of 1974 and regulations promulgated thereunder by the U.S. Department of
Housing and Urban Development ("HUD") impose comprehensive national construction
standards for manufactured homes and preempt conflicting state and local
regulations. Failure to comply with the HUD regulations could expose the Company
to a wide variety of sanctions, including closing the Company's facilities.
Effective July 14, 1994, HUD adopted regulations which divide the United States
into three "Wind Zones" and impose more stringent construction standards for
homes to be sold in areas designated as Wind Zones II or III, in which the
Company currently sells homes. The regulations have resulted in higher
manufacturing and dealer costs and, therefore, may adversely affect sales in
Wind Zones II and III. HUD is also reviewing the existing wind load capacity
regulations for all other areas of the United States, and the Company cannot
predict if additional regulations will be adopted or the effect such regulations
would have on the Company or the manufactured housing industry as a whole.
Additionally, effective October 25, 1994, HUD adopted regulations which divide
the United States into three "Thermal Zones" and impose more stringent energy
conservation standards for homes to be sold therein. Manufacturing costs have
increased for all of the Company's homes as a result of the Thermal Zone
regulations. Although the Company has increased the sales price of its homes to
cover increases in manufacturing costs, there can be no assurance that such
price increases will continue to be accepted by its customers and will not
adversely affect sales. In addition, certain components of manufactured homes
are subject to regulation by the U.S. Consumer Product Safety Commission (the
"CPSC"). Some states require that manufactured home producers post bonds to
ensure the satisfaction of consumer warranty claims. Manufactured homes are also
subject to other federal, state and local regulations, including local zoning
restrictions and environmental regulations.
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POTENTIAL ENVIRONMENTAL LIABILITY AND COMPLIANCE WITH REGULATIONS
The Company's operations are subject to federal, state and local laws and
regulations relating to the generation, storage, handling, emission,
transportation, disposal and discharge of materials into the environment.
Governmental authorities have the power to enforce compliance with these
regulations, and violations may result in the payment of fines or the entry of
injunctions, or both. Furthermore, the requirements of such environmental laws
and enforcement policies have generally become stricter in recent years. The
Company currently does not believe existing environmental laws and enforcement
policies will have a material adverse effect on its operating results or
financial condition. The Company is unable to give any assurance, however, that
the ultimate cost of compliance with environmental laws and enforcement policies
will not have a material adverse effect.
TRANSACTIONS WITH AFFILIATED INDIVIDUALS OR ENTITIES
The Company historically has constructed its facilities and obtained a
significant percentage of its financing through transactions with affiliated
individuals or entities, in some cases on terms more favorable to the Company
than were available from unrelated third parties. On December 13, 1994, the
Board of Directors adopted a policy that any future transactions with affiliated
individuals or entities will be on terms no less favorable to the Company than
are reasonably available from unrelated third parties and that any such
transactions with affiliates will require the approval of a majority of the
directors who do not have a material interest in and are not parties to the
transaction. As a result of this policy, there can be no assurance that the
Company will be able to construct new facilities or obtain financing on the same
terms and conditions as were available in the past.
CERTAIN ANTI-TAKEOVER PROVISIONS
Certain provisions of Mississippi law may make a change in control of the
Company more difficult to effect, even if a change in control were in the
stockholders' interest. In addition, the Company's Restated Articles of
Incorporation allow the Board of Directors to determine the terms of preferred
stock which may be issued by the Company without approval of the holders of
Common Stock. Moreover, the Board of Directors may convert to a staggered board
as allowed by Mississippi law at any time there are nine directors. The ability
of the Company to issue preferred stock or implement a staggered board in such
manner could enable the Board of Directors to prevent changes in management and
control of the Company.
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BELMONT HOMES, INC.
The Company produces and markets a variety of single- and double-section
manufactured homes under a variety of brand names through approximately 410
dealers and 550 sales centers in 20 states, primarily in the southern United
States. The Company has long-established relationships with most of its dealers,
and management believes these relationships contribute significantly to the
Company's successful selling efforts. The Company targets its homes to a variety
of price points within the moderately-priced segment of the manufactured housing
market. The Company's single-section homes range in size from 652 square feet to
1,248 square feet and sell at retail prices between $13,500 and $30,000. The
Company's double-section homes range in size from 1,072 square feet to 2,036
square feet and sell at retail prices between $22,000 and $49,000. The Company
manufactures homes in eleven production facilities, five of which are located in
Mississippi, four of which are located in Arkansas, and two of which are located
in Georgia. The Company, which operated three production facilities during 1994,
has opened or acquired four facilities in 1995, four in 1996 and has announced
the construction of a new plant in Russelville, Alabama scheduled to be
completed in the spring of 1997.
The executive offices of Belmont are located at Highway 25 South,
Industrial Park Drive, Belmont, Mississippi 38827, and its telephone number is
601-454-9217.
The shares of Common Stock offered hereby will be purchased by the Selling
Shareholder upon the exercise of the Warrant and will be sold for the account of
the Selling Shareholder.
USE OF PROCEEDS
All of the shares of Common Stock are being offered by the Selling
Shareholder. Belmont Homes will not receive any proceeds from the sale of shares
of Common Stock by the Selling Shareholder. Belmont Homes will, however, receive
proceeds from the exercise of the Warrant, if the Warrant is eventually
exercised.
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SELLING SHAREHOLDER
The following table sets forth certain information regarding beneficial
ownership of the Common Stock by the Selling Shareholder as of the date of this
Prospectus, and the number of shares that may be offered hereby for the account
of the Selling Shareholder from time to time. As of the date of this Prospectus,
all of the shares beneficially owned by the Selling Shareholder are issuable to
the Selling Shareholder upon exercise of the Warrant. The Warrant represents the
right of the Selling Shareholder to purchase up to 75,000 shares of Common Stock
for approximately $14.66 per share. The Warrant contains customary antidilution
provisions requiring adjustment in the exercise price and the number of shares
for which the Warrant is exercisable in certain circumstances. The Warrant
expires on October 25, 2001. Sales of the Common Stock by the Selling
Shareholder are limited by the terms of the Registration Rights Agreement, dated
October 25, 1996, between the Company and the Selling Shareholder (the
"Registration Rights Agreement"). Pursuant to the Registration Rights Agreement,
the Selling Shareholder may not sell more than 11,250 shares of Common Stock in
any 90-day period, except that such amount, to the extent unsold, shall cumulate
for subsequent 90-day periods.
<TABLE>
<CAPTION>
Beneficial Ownership Prior Beneficial Ownership After
to Offering Offering
Number of
Number of Shares Being Number of
Name of Shareholder Shares Percent Sold Shares Percent
- ------------------- --------- ------- ------------ --------- -------
<S> <C> <C> <C> <C> <C>
The Suddath Companies 75,000 * 75,000 --- *
</TABLE>
- --------------------
* Less than 1%
PLAN OF DISTRIBUTION
The shares of Common Stock being offered by the Selling Shareholder are
offered for its own account. The Company will not receive any of the proceeds
from any eventual sales of such shares of Common Stock. The shares may be
offered by the Selling Shareholder from time to time in transactions through the
NNM, in negotiated transactions, through the writing of options on the shares,
or a combination of such methods of sale, at prices related to prevailing market
prices, or at negotiated prices. The Selling Shareholder may effect such
transactions by selling the shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholder and/or the purchasers of the shares for
which such broker-dealers may act as agent or to whom they sell as principal, or
both (which compensation as to a particular broker-dealer might be in excess of
customary commissions).
The Selling Shareholder and any broker-dealer who acts in connection with
the sale of the shares hereunder may be deemed to be an "underwriter" within the
meaning of Section 2(11) of the Securities Act, and any commissions received by
them and profit on any resale of the shares as principal may be deemed to be
underwriting discounts and commissions under the Securities Act.
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EXPERTS
The financial statements of Belmont Homes, Inc. as of and for the years
ended December 31, 1995 and 1994, and for the period from June 1, 1993 to
December 31, 1993, and the statements of income, shareholders equity and cash
flows of BHI, Inc. (Predecessor) for the period from January 1, 1993 to May 31,
1993 have been incorporated by reference herein and in the registration
statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters with respect to the validity of the shares of Common
Stock offered hereby have been passed upon by Waller Lansden Dortch & Davis, A
Professional Limited Liability Company, Nashville, Tennessee, special counsel to
the Company.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses to be incurred in connection with this Registration Statement are
as follows:
Registration fee to the Securities
and Exchange Commission $ 231.82
Accounting fees and expenses * 2,000.00
Legal fees and expenses * 10,000.00
Miscellaneous expenses * 1,000.00
Total * $13,231.82
==========
--------------------
* Estimated
The registrant has agreed to bear all expenses (other than underwriting
discounts and selling commissions, and fees and expenses of counsel and other
advisors to the Selling Shareholder) in connection with the registration and
sale of the shares being offered by the Selling Shareholder.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) Article 8 of the Company's Restated Articles of Incorporation provides
as follows:
Indemnification. (a) The Company shall indemnify, and upon
request shall advance expenses prior to final disposition of a
proceeding to, any person (or the estate or personal representative of
any person) who was or is a party to, or is threatened to be made a
party to, any threatened, pending or completed action, suit or
proceeding, whether or not by or in the right of the Company, and
whether civil, criminal, administrative, investigative or otherwise,
by reason of the fact that such person is or was a director, officer,
employee or agent of the Company, or is or was serving at the request
of the Company as a director, officer, partner, trustee, employee or
agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against any liability
incurred in the action, suit or proceeding: (a) to the full extent
permitted by Section 79-4-8.51 of the Mississippi Business Corporation
Act (the "Act"), and (b) despite the fact that such person has not met
the standard of conduct set forth in Section 79-4-8.51(a) of the Act
or would be disqualified for indemnification under Section
79-4-8.51(d) of the Act, if a determination is made by a person or
persons enumerated in Section 79-4-8.55(b) of the Act that (i) the
director, officer, employee or agent is fairly and reasonably entitled
to indemnification in view of all of the relevant circumstances, and
(ii) the acts or omissions of the officer, employee or agent did not
constitute gross negligence or willful misconduct. A request for
reimbursement or advancement of expenses prior to final disposition of
the proceeding need not be accompanied by the affirmation required by
Section 79-4-8.53(1) of the Act, but the remaining provisions of
Section 79-4-8.53 of the Act shall be applicable to any such
II-1
<PAGE> 13
request. The Company may, to the full extent permitted by law,
purchase and maintain insurance on behalf of any such person against
any liability which may be asserted against him or her.
(b) The rights to indemnification and advancement of expenses set
forth in Subsection (a) of this Article 8 are intended to be more
extensive than those which are provided for with respect to permissive
indemnification in the Act, are contractual between the Company and
the person being indemnified, and the heirs, executors and
administrators of such person, and in this respect are mandatory,
notwithstanding a person's failure to meet the standard of conduct
required for permissive indemnification under the Act, as amended from
time to time. The rights to indemnification and advancement of
expenses set forth in Subsection (a) of this Article 8 shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancements of expenses may be entitled or granted
by law, these Restated Articles of Incorporation, the bylaws, a
resolution of the Board of Directors, vote of the shareholders of the
Company, or an agreement with the Company, which means of
indemnification and advancement of expenses are hereby specifically
authorized. Any repeal or modification of the provisions of this
Article 8 shall not affect any obligations of the Company or any
rights regarding indemnification and advancement of expenses of a
director, officer, employee or agent with respect to any threatened,
pending or completed action, suit or proceeding for which
indemnification or the advancement of expenses is requested, in which
the alleged cause of action accrued at any time prior to such repeal
or modification. If an amendment to the Act hereafter limits or
restricts in any way the indemnification rights permitted by law as of
the date hereof, such amendment shall apply only to the extent
mandated by law and only to activities of persons subject to
indemnification under this Article 8 which occur subsequent to the
effective date of such amendment.
(c) If this Article 8 or any portion thereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company
shall nevertheless indemnify each director, officer, employee or agent
of the Company as to any liability incurred or other amounts paid in
with respect to any proceeding, including, without limitation, a grand
jury proceeding and any proceeding by or in the right of the Company,
to the fullest extent permitted by any applicable portion of this
Article 8 that shall not have been invalidated, by the Act, or by any
other applicable law. Unless the context otherwise requires, terms
used in this Article 8 shall have the meanings given in Section
79-4-8.50 of the Act.
(b) In addition to the foregoing provisions of the Restated Articles of
Incorporation of the Registrant, officers, employees and agents of the
Registrant may be indemnified by the Registrant pursuant to the provisions of
Section 79-4-8.56 of the Mississippi Business Corporation Act.
II-2
<PAGE> 14
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
4.1 Article 5 of the Restated Articles of Incorporation of Registrant (included in Exhibit 3.1)
(incorporated by reference to Exhibit 4.1 of the Registrant's Registration Statement on Form S-1,
Registration No. 33-87868).
4.2 Specimen of Common Stock certificate (incorporated by reference to Exhibit 4.2 of the
Registrant's Registration Statement on Form S-1, Registration No. 33-87868).
5 Opinion of Waller Lansden Dortch & Davis, A Professional Limited Liability Company.
21 Subsidiaries of the Registrant.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Waller Lansden Dortch & Davis, A Professional Limited Liability Company (contained
in their opinion filed as Exhibit 5 to this Registration Statement).
24 Power of Attorney (included on signature page).
99.1 Registration Rights Agreement dated October 25, 1996, between the Registrant and The Suddath
Companies.
99.2 Warrant Agreement dated October 25, 1996, between the Registrant and The Suddath Companies.
</TABLE>
II-3
<PAGE> 15
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) 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.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change of such information in the
Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act) that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) 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 Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Belmont, State of Mississippi, on January 23, 1997.
BELMONT HOMES, INC.
By: /s/ Jerold Kennedy
-------------------------------------
Jerold Kennedy,
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Jerold Kennedy and William A. Sheffield
his true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments to this Registration Statement, and
to file the same, with all exhibits thereto, and other documents in connection
therewith with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as each might or could do in
person hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ A. Douglas Jumper, Sr. Chairman of the Board; January 23, 1997
- --------------------------- Director
A. Douglas Jumper, Sr.
/s/ Jerold Kennedy President and Chief Executive January 23, 1997
- --------------------------- Officer; Director
Jerold Kennedy (principal executive officer)
/s/ William A. Sheffield
- --------------------------- Chief Financial Officer January 23, 1997
William A. Sheffield (principal financial
and accounting officer)
/s/ Thomas D. Keenum, Sr.
- --------------------------- Secretary/Treasurer and January 23, 1997
Thomas D. Keenum, Sr. General Counsel; Director
</TABLE>
II-5
<PAGE> 17
<TABLE>
<S> <C> <C>
/s/ Don D. Murphy
- --------------------------- Director January 23, 1997
Don D. Murphy
- --------------------------- President of Spirit Homes; January ____, 1997
John W. Allison Director
/s/ Roger D. Moore Director of Sales and January 23, 1997
- --------------------------- Marketing; Director
Roger D. Moore
- --------------------------- Director January ____, 1997
Hollis Sparks
- --------------------------- Director January ____, 1997
J.M. Page
</TABLE>
II-6
<PAGE> 1
EXHIBIT 5
January 24, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Belmont Homes, Inc.
Registration Statement on Form S-3
Ladies and Gentlemen:
In our capacity as counsel to Belmont Homes, Inc., a Mississippi
corporation (the "Company"), we have examined the Registration Statement on Form
S-3 (the "Registration Statement") in form as proposed to be filed by the
Company under the Securities Act of 1933, as amended, relating to the
registration of 75,000 shares of the common stock, par value $.10 per share, of
the Company (the "Common Stock"), pursuant to the terms of the Registration
Rights Agreement dated October 25, 1996, between the Company and The Suddath
Companies, a Florida corporation (the "Selling Shareholder"), and the Warrant
Agreement dated October 25, 1996, between the Company and the Selling
Shareholder (collectively, the "Agreements"). In this regard, we have examined
and relied upon such records, documents and other instruments as in our judgment
are necessary or appropriate in order to express the opinions hereinafter set
forth.
Based upon the foregoing, we are of the opinion that the 75,000 shares of
Common Stock referred to in the Registration Statement, to the extent actually
issued and sold pursuant to the Agreements and in the manner and on the terms
described in the Registration Statement, will be duly and validly issued, fully
paid and nonassessable shares of the Common Stock of the Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and further consent to the reference to us under the
caption "Legal Matters" in the Prospectus included in the Registration
Statement.
Very truly yours,
/s/ Waller Lansden Dortch & Davis,
A Professional Limited Liability Company
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE
REGISTRANT
<TABLE>
<CAPTION>
Subsidiary State of Incorporation
- ---------- ----------------------
<S> <C>
Spirit Homes, Inc. Arkansas
Delta Homes, Inc. Mississippi
Belmont Homes Transportation, Inc. Mississippi
Bellcrest Homes, Inc. Georgia
Quality Housing Supply, L.L.C.* Tennessee
Ridge Pointe Manufacturing, L.L.C.* Alabama
</TABLE>
- ---------------------
* Not wholly owned.
<PAGE> 1
EXHIBIT 23.1
Independent Auditors' Consent
Board of Directors
Belmont Homes, Inc.
We consent to incorporation by reference in the registration statement on Form
S-3 of Belmont Homes, Inc. and subsidiaries of our report dated February 9,
1996, relating to the balance sheets of Belmont Homes, Inc. and subsidiaries as
of December 31, 1995 and 1994 and the related consolidated statements of income,
shareholders' equity and cash flows for the years ended December 31, 1995 and
1994 and for the period from June 1, 1993 to December 31, 1993, and the
statements of income, shareholders' equity and cash flows of BHI, Inc.
(Predecessor) for the period from January 1, 1993 to May 31, 1993, which report
appears in the December 31, 1995 annual report on Form 10-K of Belmont Homes,
Inc. and subsidiaries. We also consent to the reference to our firm under
heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
Jackson, Mississippi KPMG PEAT MARWICK LLP
January 20, 1997
<PAGE> 1
EXHIBIT 99.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated the 25th day of
October, 1996, by and between Belmont Homes, Inc., a Mississippi corporation
(the "Company"), and The Suddath Companies, a Florida corporation ("Suddath").
1. Certain Definitions. As used in this Agreement, the following terms
shall mean:
"Commission" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act.
"Common Stock" means the Common Stock, par value $.10 per share, of the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor federal statute, and the rules and regulations of the Commission
issued thereunder, as they each may, from time to time, be in effect.
"Non-Recoverable Expenses" means salaries and expenses of the Company's
officers and employees performing legal and accounting duties in connection with
the Company's obligations under this Agreement.
"Public Offering" means a bona fide offering of Common Stock pursuant to a
Registration Statement.
"Registrable Shares" means shares of Common Stock issued or issuable upon
exercise of the Warrant and any other unregistered shares of Common Stock issued
in respect of such shares (because of stock splits, stock dividends,
reclassifications, recapitalizations or similar events).
"Registration Expenses" means all expenses incurred by the Company in
complying with this Agreement, including, without limitation, (i) all Commission
and any National Association of Securities Dealers, Inc. registration and filing
fees and expenses, fees and expenses of compliance with securities and blue sky
laws (including reasonable fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications of the Registrable
Shares), expenses relating to the preparation and printing of documents and of
certificates representing the Registrable Shares, fees and expenses of any
escrow agent, trustee or custodian acting for the Company, fees and
disbursements of counsel and independent certified public accountants of the
Company (including the expenses of any special audit or "cold comfort" letters
required by or incident to such compliance), and fees and expenses of any other
persons, including special experts retained by the Company, but excluding the
fees and disbursements of any counsel or other advisors or experts retained by
holders of Registrable Shares (severally or jointly); and (ii) Non-Recoverable
Expenses.
<PAGE> 2
"Registration Statement" means a registration statement filed by the
Company with the Commission for a Public Offering and sale of Common Stock of
the Company for cash (other than a registration statement on Form S-4 or Form
S-8, or their successors, or any other form for a limited purpose, or any
registration statement covering only securities proposed to be issued in
exchange for securities or assets of another corporation).
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
issued thereunder, as they each may, from time to time, be in effect.
"Stock Purchase Agreement" means the Stock Purchase Agreement dated as of
an even date herewith by and between the Company and Bellcrest Holding Co.,
Inc., Joe H. Bell, James M. Birdwell, and DeRoy Dailey, Jr.
"Warrant Holder" means Suddath.
"Warrant" means the warrant granted as of the date of this Agreement,
pursuant to the Warrant Agreement of even date herewith by and among the Company
and Suddath.
1. Shelf Registration.
(a) Sufficiently in advance of the three month anniversary of the Closing
Date (as such term is defined in the Stock Purchase Agreement), the Company
shall file a Registration Statement under the Securities Act covering the
offering and sale of the Registrable Shares (to the extent such shares have not
otherwise previously been registered under the Securities Act) by the Warrant
Holder directly to the public or in a public transaction to or through a broker,
dealer or market maker (the "Shelf Registration"). The Company will use its best
efforts to cause such Registration Statement to (i) become effective on the
three month anniversary of the Closing Date or as soon as practicable
thereafter, and (ii) remain continuously effective until the earlier of (x) the
day after all Registrable Shares covered by such Registration Statement have
been sold thereunder or (y) the close of business on the three-year anniversary
of the Closing Date. Subject to the volume limitations set forth in Section 9 of
this Agreement, the Warrant Holder may sell Registrable Shares from time to time
pursuant to the Shelf Registration, whether in one or more underwritten
offerings or otherwise.
(b) Whenever the Warrant Holder intends to use the Shelf Registration for
an underwritten public offering of Registrable Shares, such Warrant Holder (the
"Initiating Warrant Holder"), shall so advise the Company. The Warrant Holder
proposing to distribute its securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting. Notwithstanding any other provision
of this Section, if the managing underwriter with respect to the proposed
offering advises the Warrant Holder proposing to sell Registrable Shares that
would otherwise be included in the underwriting that marketing factors require a
limitation on the number of shares to be underwritten, the number of Registrable
Shares to be offered shall be limited in a manner consistent with such marketing
factors.
2
<PAGE> 3
2. Piggy-Back Registration Rights.
(a) In connection with the filing by the Company of a Registration
Statement with respect to a Public Offering, the Company shall, at least 30 days
prior to such filing, give written notice to the Warrant Holder of its intention
to do so and, upon the written request of a the Warrant Holder given within 10
days after the Company provides such notice (which request shall state the
intended method of disposition of such Registrable Shares), the Company shall
use its best efforts to cause all Registrable Shares that the Company has been
requested by such Warrant Holder to register (subject to the volume limitations
set forth in Section 9 of this Agreement) to be registered under the Securities
Act to the extent necessary to permit their sale or other disposition in
accordance with the intended methods of distribution specified in the request of
the Warrant Holder; provided, that the Company shall have the right to postpone
or withdraw any registration effected pursuant to this Section 2 without
obligation to the Warrant Holder.
(b) In connection with any offering under this Section 2 involving an
underwriting, the Company shall not be required to include any Registrable
Shares in such underwriting unless the Warrant Holder accepts the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it and enter into a customary underwriting agreement, and then only in such
quantity as will not, in the opinion of the managing underwriter, jeopardize the
success of the offering by the Company. If, in the opinion of the managing
underwriter, the registration of all, or any part of, the Registrable Shares
which the Warrant Holder has requested to be included would adversely affect
such Public Offering, then the Company shall be required to include in the
underwriting only that number of Registrable Shares, if any, that the managing
underwriter believes may be sold without causing such adverse effect, on a
pro-rata basis with any other selling stockholders (not including the Company).
3. Registration Procedures. If and whenever the Company is required by the
provisions of this Agreement to use its best efforts to effect the registration
of any of the Registrable Shares under the Securities Act, the Company shall:
(a) file with the Commission a Registration Statement with respect to such
Registrable Shares and use its best efforts to cause that Registration Statement
to become and remain effective for such reasonable period of time as required to
complete the Public Offering;
(b) as expeditiously as possible prepare and file with the Commission any
amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective for such reasonable period of time as required
to complete the Public Offering and comply with the provisions of the Securities
Act with respect to the disposition of all shares covered by such Registration
Statement;
(c) provide the selling stockholders and the underwriters (which term, for
purposes of this Agreement, shall include a person deemed to be an underwriter
within the meaning of Section 2(11) of the Securities Act), if any, of the
shares being sold and counsel for such underwriters and not more than one
counsel for such selling stockholders (which counsel shall be subject to
approval by the Company, such approval not to be unreasonably withheld) the
opportunity to participate in the preparation of the Registration Statement,
each prospectus included therein or filed with the
3
<PAGE> 4
Commission, and each amendment or supplement thereto; and make available for
inspection by such selling stockholders or other persons such financial and
other information, books and records of the Company and cause the officers,
directors and employees of the Company and counsel and independent certified
public accountants of the Company to respond to such inquiries as shall be
reasonably necessary, in the opinion of respective counsel to such selling
stockholders and such underwriters, to conduct a reasonable investigation within
the meaning of the Securities Act;
(d) promptly notify (in writing, if so requested) the selling stockholders
and the underwriters, if any, (i) when the Registration Statement, the
prospectus or any prospectus supplement or post-effective amendment has been
filed, and with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any material comments by
the Commission with respect thereto or any request by the Commission for
amendments or supplements to the Registration Statement or the prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (iv) of the occurrence of any
event, at any time during which the Registration Statement remains effective,
that causes the representations and warranties of the Company contemplated by
Section 6 hereof to cease to be true and correct in all material respects, (v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification of the Registrable Shares for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose, or (vi) of the
occurrence or failure to occur of any event, or change in circumstance, at any
time when a prospectus is required to be delivered under the Securities Act, as
a result of which the Registration Statement, prospectus, any prospectus
supplement, or any document incorporated by reference in any of the foregoing
contains an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing; in the case of (vi)
above, the Company shall promptly file with the Commission a report under the
Exchange Act that will be incorporated by reference into the Registration
Statement and/or promptly prepare and furnish to the Warrant Holder and the
managing underwriter, if any, a supplement or amendment to the prospectus so
that, as thereafter delivered to purchasers of Registrable Shares, such
prospectus will not contain or incorporate by reference an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made;
(e) make reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement hereunder or any
post-effective amendment thereto at the earliest practicable date;
(f) if requested by the managing underwriter or underwriters or by the
Warrant Holder, promptly incorporate in a prospectus supplement or
post-effective amendment such information as such managing underwriter or
underwriters or such Warrant Holder specify should be included therein relating
to the sale of the Registrable Shares, including, without limitation,
information with respect to the number or amount of Registrable Shares being
sold to such underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the underwritten (or best
efforts underwritten) offering of the Registrable Shares to be sold in such
offering; and make all required filings of such prospectus supplement or
post-effective amendment promptly after notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment;
4
<PAGE> 5
provided, that the Company and its counsel are reasonably satisfied that such
additional information does not constitute an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances then
existing;
(g) as expeditiously as possible furnish to the Warrant Holder such
reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the Warrant Holder may reasonably request in order to
facilitate the Public Offering; and furnish to the Warrant Holder and each
underwriter, if any, such number of copies of the Registration Statement, each
amendment and supplement thereto (in each case including all exhibits thereto),
the prospectus included in the Registration Statement (including each
preliminary prospectus and any summary prospectus), in conformity with the
requirements of the Securities Act, and such other documents as such Warrant
Holder and underwriter, if any, may reasonably request in order to facilitate
the Public Offering; the Company consents to the use of the prospectus or any
amendment or supplement thereto by each of the Warrant Holder and the
underwriters in connection with the offering and sale of the Registrable Shares
covered by the prospectus or any supplement or amendment thereto;
(h) as expeditiously as possible use its best efforts to register or
qualify (and keep registered and qualified) the Registrable Shares covered by
the Registration Statement under the securities or blue sky laws of such states
as the underwriters shall reasonably request, and do any and all other acts and
things that may be reasonably necessary or desirable to enable the Public
Offering to be consummated; provided, however, that the Company shall not be
required to qualify as a foreign corporation or execute a general consent to
service of process in any jurisdiction;
(i) use its best efforts to cause all of the Registrable Shares to be
included in a Registration Statement hereunder to be registered with or approved
by such other governmental agencies or authorities as may be necessary by virtue
of the business and operations of the Company to enable the Public Offering to
be consummated;
(j) facilitate the timely preparation and delivery of certificates
representing Registrable Shares to be sold;
(k) use its reasonable efforts to cause the Registrable Shares to continue
to be listed on each securities exchange or national market system on which the
Common Stock is then listed; and
(l) provide and cause to be maintained transfer agents and registrars for
all Registrable Shares to be registered from and after a date not later than the
effective date of such Registration Statement.
If the Company has delivered preliminary or final prospectuses to the
Warrant Holder, and, after having done so, the prospectus is amended to comply
with the requirements of the Securities Act, the Company shall promptly notify
the Warrant Holder, if requested, the Warrant Holder shall immediately cease
making offers of Registrable Shares and return all prospectuses to the Company.
The Company shall promptly provide the Warrant Holder with revised prospectuses
and, following
5
<PAGE> 6
receipt of the revised prospectuses, the Warrant Holder shall be free to resume
making offers of the Registrable Shares.
4. Allocation of Expenses. The Company shall pay all Registration Expenses
of all registrations under this Agreement. All underwriting discounts, selling
commissions, fees of counsel to any underwriters and counsel to the Warrant
Holder applicable to the sale of the Registrable Shares shall be borne by the
Warrant Holder.
5. Indemnification.
(a) In the event of any registration of any of the Registrable Shares under
the Securities Act pursuant to this Agreement, the Company shall indemnify and
hold harmless the seller of such Registrable Shares, each director and officer
of such seller, each underwriter of such Registrable Shares, and each other
person, if any, who controls such seller or underwriter within the meaning of
the Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities, joint or several, including, without limitation, subject to the
terms of this Agreement, any amounts paid in settlement, to which such seller,
underwriter or controlling person may become subject under the Securities Act,
the Exchange Act, state securities laws or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement under which such Registrable Shares
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arise out of or are based upon the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Company shall reimburse such seller, underwriter and each such controlling
person for any legal or any other expenses reasonably incurred by such seller,
underwriter or controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that (i)
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or omission made in such Registration Statement, preliminary
prospectus or prospectus, or any such amendment or supplement, in reliance upon
and in conformity with information furnished to the Company, in writing, by or
on behalf of such seller or underwriter or controlling person specifically for
use in the preparation thereof and (ii) the indemnity agreement contained in
this Section shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Company. Such indemnification and reimbursement of expenses shall
remain in full force and effect regardless of any investigation made by or on
behalf of such seller, its directors or officers, such underwriter, its
directors or officers, or such controlling person, and shall survive the
transfer of any or all Registrable Shares by such seller.
(b) In the event of any registration of any of the Registrable Shares under
the Securities Act pursuant to this Agreement, each seller of Registrable
Shares, severally and not jointly, shall indemnify and hold harmless the
Company, each of its directors and officers, each other seller and each
underwriter, if any, and each person, if any, who controls the Company or any
such underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Company, such directors and officers, underwriter or controlling person may
become subject under the Securities Act, Exchange Act, state securities laws
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<PAGE> 7
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement under which such Registrable Shares were registered under the
Securities Act, any preliminary prospectus or final prospectus contained in the
Registration Statement, or any amendment or supplement to the Registration
Statement, or arise out of or are based upon any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, if the statement or omission was made in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of such seller specifically for use in connection with
the preparation of such Registration Statement, prospectus, amendment or
supplement; and each such seller shall reimburse the Company, each of its
directors and officers, each underwriter and each controlling person for any
legal or any other expenses reasonably incurred by the Company, such directors
and officers, underwriters and controlling persons in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of such
seller; further provided, that the liability of each seller hereunder shall be
limited to the proportion of any such claims which are equal to the proportion
that the public offering price of the shares sold by such seller under such
registration statement bears to the total public offering price of all
securities sold thereunder, but in no event to exceed the proceeds received by
such seller from the sale of Registrable Shares covered by such registration
statement. Such indemnification and reimbursement of expenses shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Company, its officers or directors, any such other seller, its officers or
directors, or any such controlling person, and shall survive the transfer of any
or all Registrable Shares by any such other seller.
(c) Each party entitled to indemnification under this Section (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, however, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld); provided, however, that an Indemnified Party shall have
the right to retain its own counsel (limited to one counsel for all Indemnified
Parties), with the fees and expenses of such counsel to be paid by the
Indemnifying Party, if representation of such Indemnified Party by the counsel
retained by the Indemnifying Party would be inappropriate due to actual or
potential differing interests between such Indemnified Party and any other party
represented by such counsel in such proceeding. The failure by an Indemnified
Party to deliver written notice to the Indemnifying Party within a reasonable
time of the Indemnified Party's discovery of such claim, if materially
prejudicial to its ability to defend such claim, shall relieve the Indemnifying
Party of its obligations under this Section 5. The Indemnified Party may
participate in such defense at such party's expense. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation.
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<PAGE> 8
(d) (i) If for any reason the indemnification provided for in this Section
5 is unavailable to or insufficient to hold harmless an indemnified party under
this Section 5 in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to herein, then each Indemnifying Party
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof), in such proportion as is appropriate to reflect the relative fault of
each Indemnifying Party and the Indemnified Party as well as any other relevant
equitable considerations. The relative fault of each Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages or liabilities
referred to above shall be deemed to include, subject to the limitations set
forth in Section 5(c), any legal or other fees or expenses reasonably incurred
by such party.
(ii) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 5(d) were determined by pro rata
allocation (even if the sellers or any underwriters or all of them were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(iii) The contribution provided for in this Section 5(d) shall survive,
with respect to the Warrant Holder, the transfer of Registrable Shares by such
Warrant Holder and, with respect to the Warrant Holder or the Company, shall
remain in full force and effect regardless of any investigation made by or on
behalf of any Indemnified Party.
(e) The indemnification required by this Section 5 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or expense, loss, damage or liability
is incurred, subject to refund in the event any such payments are determined not
to have been due and owing hereunder.
6. Agreements with Respect to Underwritten Offering. In the event that
Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering pursuant to this Agreement, the Company agrees to enter
into such customary agreements (including an underwriting agreement) and take
such other actions in connection therewith as the Warrant Holder to be included
in a Registration Statement hereunder shall reasonably request in order to
expedite or facilitate the Public Offering and, in such connection, whether or
not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration, to (i) make such representations
and warranties to the selling stockholders and the underwriters, if any, in
form, substance and scope as are customarily made in such a registration; (ii)
obtain an opinion of counsel to the Company in customary form and covering such
matters of the type customarily covered by such opinion as the Warrant Holder to
be included in such registration and the underwriters, if any, may reasonably
request, addressed to each selling stockholder and the underwriters, if any, and
dated the effective date of such
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<PAGE> 9
Registration Statement (or, if such registration includes an underwritten
offering, dated the date of the closing under the underwriting agreement); (iii)
obtain a "cold comfort" letter from the independent certified public accountants
of the Company addressed to the selling stockholders and the underwriters, if
any, (and which may also be addressed to the Board of Directors of the Company)
dated the effective date of such Registration Statement (and, if such
registration includes an underwritten offering, dated the date of the closing
under the underwriting agreement), such letter to be in customary form and
covering such matters of the type customarily covered by such letter; and (iv)
deliver such documents and certificates as may be reasonably requested by the
Warrant Holder being sold and the managing underwriters, if any, to evidence
compliance with clause (i) above and with any customary conditions contained in
the underwriting agreement or other agreement entered into by the Company.
7. Information by Warrant Holder. It shall be a condition precedent to the
participation of the Warrant Holder in a registration under this Agreement, that
the Warrant Holder of Registrable Shares to be included in any registration
shall furnish to the Company such information regarding such Warrant Holder and
the distribution proposed by such Warrant Holder as the Company may request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
8. Rule 144. The Company shall timely file the reports required to be filed
by it under the Securities Act and the Exchange Act (including but not limited
to the reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c)(1) of Rule 144 adopted by the Commission under the Securities
Act) and the rules and regulations adopted by the Commission thereunder, and
will take such further action as any holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
holder to sell Registrable Securities without registration under the Securities
Act pursuant to Rule 144 under the Securities Act (as applicable to such
holder), as such Rule may be amended from time to time, or (b) any similar rule
or regulation hereafter adopted by the Commission.
9. Volume Limitations. The Warrant Holder hereby agrees that it may not
sell more that 7,500 Registerable Shares in any 90-day period, provided,
however, which amounts, to the extent unsold, shall cumulate for subsequent
90-day periods, so that if 1,000 Registerable Shares are sold in the first
90-day period, 14,000 Registerable Shares could be sold in the second 90-day
period.
10. Amendments and Waivers. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived, either generally or
in a particular instance and either retroactively or prospectively, with the
written consent of the Company and the Warrant Holder. No waivers of or
exceptions to any term, condition or provision of this Agreement, in any one or
more instance, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.
11. Entire Agreement: Successors and Assigns of the Company. This Agreement
embodies the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter. This Agreement shall be binding,
in accordance with its terms, upon any successor, by way of merger,
consolidation, sale of assets or otherwise, of the Company.
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<PAGE> 10
12. Counterparts. This Agreement may be executed in several counterparts,
all of which need not be signed by all the parties hereto, and each of which
shall be deemed an original, but all of which together constitute one and the
same agreement.
13. Headings. The headings of the sections of this Agreement have been
added for convenience only and shall not be deemed to be a part of this
Agreement.
14. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
severable provision.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Mississippi, without regard for the
conflict of laws rules thereof.
16. Notices. All notices and other communications under this Agreement
shall be in writing and shall be (i) sent by facsimile transmission and by
certified or registered mail, return receipt requested, courier or overnight
mail, or (ii) sent by certified or registered mail, return receipt requested,
courier or overnight mail.
If to the Company: Belmont Homes, Inc.
Highway 25 South
Industrial Park Drive
Belmont, Mississippi 38827
Attention: Jerold Kennedy
with copies to: J. Chase Cole, Esq.
Waller Lansden Dortch & Davis
511 Union Street, Suite 2100
Nashville, Tennessee 37219
If to the Warrant Holder: The Suddath Companies
815 South Main Street
Jacksonville, Florida 32207
with copies to: Barry C. Averitt, Esq.
Kirschner, Main, Petrie, Graham & Tanner, P.A.
One Independent Drive
Suite 2000
Jacksonville, Florida 32201
Any written communication so addressed, sent by facsimile transmission or
certified or registered mail, return receipt requested, courier or overnight
mail, shall be deemed to have been given when sent via facsimile or mailed. All
other written communications shall be deemed to have been given upon receipt
thereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
BELMONT HOMES, INC.
By: /s/ Jerold Kennedy
------------------------------
Jerold Kennedy, President
THE SUDDATH COMPANIES
By: /s/ A. Quinn Bell
------------------------------
Title: President/CEO
11
<PAGE> 1
EXHIBIT 99.2
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this "Agreement") is dated October 25, 1996, by and
among Belmont Homes, Inc., a Mississippi corporation (the "Company"), and The
Suddath Companies, a Florida corporation ("Suddath").
In consideration of the cancellation on this date of the management
agreement between Suddath and Bellcrest Homes, Inc., a Georgia corporation being
acquired on this date by the Company, the Company has agreed to issue to
Suddath, and Suddath has agreed to acquire, warrants (the "Warrants") to
purchase up to 50,000 shares of the common stock, par value $.10 per share, of
the Company (the "Common Stock").
In consideration of the foregoing and for the purpose of defining the terms
and provisions of the Warrants and the respective rights and obligations
thereunder of the Company and Suddath, each of the parties hereto agrees as
follows:
1. GRANT AND SALE. The Company hereby grants and sells to Suddath, and
Suddath hereby agrees to acquire, the right to purchase, at any time during the
Exercise Period (as hereinafter defined), 50,000 shares of Common Stock at an
exercise price of $22.00 per share. Suddath shall pay the purchase price for the
Warrants by wire transfer of immediately available funds to an account
designated by the Company.
2. EXERCISE PERIOD. The Warrants shall be exercisable in whole or in part,
upon the date of this Agreement, and such right shall expire on the five-year
anniversary of the date of this Agreement (the "Exercise Period").
3. TRANSFER RESTRICTED. The Warrants may not be sold, assigned, disposed of
or otherwise transferred.
4. STATUS OF SUDDATH. Suddath shall not be deemed the holder of the Common
Stock purchasable upon the exercise thereof for any purpose, nor shall anything
contained herein be construed to confer upon Suddath any of the rights of a
holder of Common Stock until the Warrant shall have been exercised and the
Common Stock purchasable upon the exercise thereof shall have been issued and
delivered as provided herein.
5. EXERCISE OF WARRANTS. (a) In the event that Suddath elects to exercise
all or any portion of the Warrants, Suddath shall give written notice of
exercise to the Company at any time during the Exercise Period (the "Exercise
Notice"). Exercise may be made of all or any part of the Warrants. If less than
all of the Warrants are exercised, the Company will, upon the closing of such
exercise, execute and deliver to Suddath an amended form of this Agreement
(dated the date hereof) evidencing the Warrants not so exercised.
(b) The closing of the purchase and sale of shares of Common Stock pursuant
to an exercise of one or more Warrants (the "Closing") shall occur at the
offices of Waller Lansden Dortch & Davis, A Professional Limited Liability
Company, 511 Union Street, Suite 2100, Nashville, Tennessee 32719 and at such
time and on such date as shall be specified by Suddath in the Exercise
<PAGE> 2
Notice (but in no event earlier than two or later than ten business days after
delivery of the Exercise Notice). At the Closing (i) Suddath shall surrender the
original copy of this Agreement and pay to the Company the applicable exercise
price in respect of the Warrants being exercised, and (ii) the Company will
deliver to Suddath a stock certificate or stock certificates representing the
shares of Common Stock being purchased pursuant to the exercise of the Warrant,
accompanied by duly executed stock powers or assignments.
(c) Upon exercise of the Warrants, Suddath will have no obligation to make
any capital contribution to the Company other than the exercise price payable
upon exercise as set forth in Section 1 hereof. The Company will pay all
transfer or stamp taxes, if any, in respect of the issuance of Common Stock upon
exercise of the Warrants.
6. ADJUSTMENT. In the event of any change in the outstanding shares of
Common Stock by reason of any stock dividend, stock split, reverse stock split,
recapitalization, combination, exchange of shares, merger, consolidation,
reorganization or the like or any other change in the corporate or capital
structure of the Company that would have the effect of altering any of the
rights of Suddath hereunder, the number of shares of Common Stock subject to the
Warrants and the exercise price of each Warrant shall be adjusted equitably and
appropriately so as to restore Suddath to its rights hereunder.
7. MISCELLANEOUS. The Warrants and any provision hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
Company and Suddath. The Warrants and all conditions and provisions hereof shall
inure to the benefit of, and be binding upon, the Company and Suddath. The
headings herein are for purposes of reference only and shall not affect the
meaning or construction of any of the provisions hereof.
8. COVENANTS OF THE COMPANY. The Company covenants that it will at all
times during the Exercise Period reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, solely for
the purpose of issue upon exercise of Warrants as herein provided, such number
of shares of Common Stock as shall then be issuable upon the exercise of all
outstanding Warrants. The issuance and delivery of the Warrants and this
Agreement (and the obligations of the Company set forth therein) have been duly
authorized by all necessary corporate action on the part of the Company. The
Company covenants that all shares of Common Stock which shall be so issuable
shall, upon such issue, be duly and validly issued and fully-paid and
nonassessable.
9. APPLICABLE LAW. This Agreement and each Warrant issued hereunder and all
rights arising hereunder shall be governed by the laws of the State of
Mississippi, regardless of the law that might be applied under principles of
conflicts of law.
10. NOTICES. Any notice, demand or delivery authorized by this Agreement
shall be sufficiently given or made when mailed if sent by first-class mail,
postage prepaid, addressed to the parties hereto at their respective addresses
as set forth in the Stock Purchase Agreement by and among the Company and
Suddath (among others) of even date herewith. The Company agrees to give Suddath
written notice, by facsimile or next day delivery, promptly following the public
announcement by the Company of the record date for any (i) cash dividend (or
other similar distribution) with respect to its common stock, (ii) any
consolidation, merger or share exchange of the Company with and into
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another corporation, or of the sale of all or substantially all of the assets of
the Company other than in the ordinary course of business, and (iii) the
involuntary or voluntary dissolution, liquidation or winding up of the Company.
IN WITNESS WHEREOF, the Company has caused these presents to be signed by
its duly authorized representative, as of the date first above written.
BELMONT HOMES, INC. THE SUDDATH COMPANIES
By: /s/ Jerold Kennedy By: /s/ A. Quinn Bell
------------------------- -------------------------
Jerold Kennedy, President
Name: A. Quinn Bell
-----------------------
Title: President/CEO
-----------------------
3
