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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 16, 1997
STANDARD PACIFIC CORP.
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-9353 33-0475989
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
1565 West MacArthur Boulevard 92626
Costa Mesa, California (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (714) 668-4300
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
In 1992, Standard Pacific Corp. (the "Company") filed, pursuant to Rule
415 under the Securities Act of 1933 (the "Act"), a registration statement on
Form S-3 (File No. 33-45271), which was declared effective (as amended by Post-
Effective Amendment Nos. 1 and 2) on March 24, 1992. On June 13, 1997, the
Company filed a Prospectus Supplement, dated June 12, 1997, and accompanying
Prospectus, dated June 12, 1997, relating to the offering of $100,000,000
principal amount of the Company's 8-1/2% Senior Notes due 2007 (the "Notes"). In
this connection, the Company is filing certain exhibits as part of this Form 8-
K. See "Item 7. Financial Statements and Exhibits."
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed with this report on Form 8-K:
Exhibits No. Description
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1.1 Underwriting Agreement among the Company and the underwriters
listed on the first page thereof, dated June 12, 1997, with
respect to the issuance and sale of the Notes.
4.1 Form of Officers' Certificate of the Company regarding the
Notes, including the Form of Note.
5.1 Opinion Letter of Gibson, Dunn & Crutcher LLP regarding the
validity of the Notes.
23.1 Consent of Gibson Dunn & Crutcher (included as part of Exhibit
5.1).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STANDARD PACIFIC CORP.
Date: June 16, 1997 By: /s/ ANDREW H. PARNES
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Andrew H. Parnes
Vice President of Finance and Treasurer
Principal Financial and Accounting Officer
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EXHIBIT 1.1
STANDARD PACIFIC CORP.
$100,000,000
8-1/2% Senior Notes Due 2007
Underwriting Agreement
New York, New York
June 12, 1997
Salomon Brothers Inc
Dillon, Read & Co. Inc.
Donaldson, Lufkin & Jenrette
Securities Corporation
BancAmerica Securities, Inc.
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
Standard Pacific Corp., a Delaware corporation (the "Company"),
proposes to sell to you, the underwriters named in Schedule II hereto (the
"Underwriters"), $100,000,000 principal amount of its 8-1/2% Senior Notes Due
2007 (the "Securities"), to be issued under an indenture (the "Indenture") dated
as of April 1, 1992, between the Company and United States Trust Company of New
York, as trustee (the "Trustee").
1. Representations and Warranties. The Company represents and
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warrants to, and agrees with, each Underwriter as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in paragraph (c)
hereof.
(a) If the offering of the Securities is a Delayed Offering (as
specified in Schedule I hereto), paragraph (i) below is applicable and, if
the offering of the Securities is a Non-Delayed Offering (as so specified),
paragraph (ii) below is applicable.
(i) The Company meets the requirements for the use of Form S-3
under the Securities Act of 1933 (the "Act") and has filed with the
Securities and Exchange Commission (the "Commission") a registration
statement (file number 33-45271) on such Form, including a basic
prospectus, for registration under the Act of the offering and sale of
the Securities. The Company may have filed one or more amendments
thereto, and may have used a Preliminary Final Prospectus, each of
which has previously been furnished to you. Such registration
statement, as so amended, has become effective. The
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offering of the Securities is a Delayed Offering and, although the
Basic Prospectus may not include all the information with respect to
the Securities and the offering thereof required by the Act and the
rules thereunder to be included in the Final Prospectus, the Basic
Prospectus includes all such information required by the Act and the
rules thereunder to be included therein as of the Effective Date. The
Company will next file with the Commission pursuant to Rules 415 and
424(b)(2) and (5) a final supplement to the form of prospectus
included in such registration statement relating to the Securities and
the offering thereof. As filed, such final prospectus supplement shall
include all required information with respect to the Securities and
the offering thereof and, except to the extent the Underwriters shall
agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Company has advised you, prior to the Execution
Time, will be included or made therein.
(ii) The Company meets the requirements for the use of Form S-3
under the Act and has filed with the Commission a registration
statement (the file number of which is set forth in Schedule I hereto)
on such Form, including a basic prospectus, for registration under the
Act of the offering and sale of the Securities. The Company may have
filed one or more amendments thereto, including a Preliminary Final
Prospectus, each of which has previously been furnished to you. The
Company will next file with the Commission either (x) a final
prospectus supplement relating to the Securities in accordance with
Rules 430A and 424(b)(1) or (4), or (y) prior to the effectiveness of
such registration statement, an amendment to such registration
statement, including the form of final prospectus supplement. In the
case of clause (x), the Company has included in such registration
statement, as amended at the Effective Date, all information (other
than Rule 430A Information) required by the Act and the rules
thereunder to be included in the Final Prospectus with respect to the
Securities and the offering thereof. As filed, such final prospectus
supplement or such amendment and form of final prospectus supplement
shall contain all other such required information, with respect to the
Securities and the offering thereof and, except to the extent the
Underwriters shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific
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additional information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the Company
has advised you, prior to the Execution Time, will be included or made
therein.
(b) On the Effective Date, the Registration Statement did or will, and
when the Final Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date, the Final Prospectus (and any
supplement thereto) will, comply in all material respects with the
applicable requirements of the Act, the Securities Exchange Act of 1934
(the "Exchange Act") and the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the respective rules thereunder; on the Effective Date,
the Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing Date the Indenture did
or will comply in all material respects with the requirements of the Trust
Indenture Act and the rules thereunder; and, on the Effective Date, the
Final Prospectus, if not filed pursuant to Rule 424(b), did not or will
not, and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Final Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties
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as to (i) that part of the Registration Statement which shall constitute
the Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Final Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
specifically for inclusion in the Registration Statement or the Final
Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "the Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective and each date after the date
hereof on which a document incorporated by reference in the Registration
Statement is filed. "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. "Basic
Prospectus" shall mean the prospectus referred to in paragraph (a) above
contained in the Registration Statement at the Effective Date including, in
the case of a Non-Delayed Offering, any Preliminary Final Prospectus.
"Preliminary Final
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Prospectus" shall mean any preliminary prospectus supplement to the Basic
Prospectus which describes the Securities and the offering thereof and is
used prior to filing of the Final Prospectus. "Final Prospectus" shall mean
the prospectus supplement relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time, together with the Basic
Prospectus or, if, in the case of a Non-Delayed Offering, no filing
pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities, including the Basic Prospectus,
included in the Registration Statement at the Effective Date. "Registration
Statement" shall mean the registration statement referred to in paragraph
(a) above, including incorporated documents, exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto becomes effective prior to the
Closing Date (as hereinafter defined), shall also mean such registration
statement as so amended. Such term shall include any Rule 430A Information
deemed to be included therein at the Effective Date as provided by Rule
430A. "Rule 415", "Rule 424", "Rule 430A" and "Regulation S-K" refer to
such rules or regulation under the Act. "Rule 430A Information" means
information with respect to the Securities and the offering thereof
permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A. Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be;
and any reference herein to the terms "amend," amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement or the issue date of
the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Non-Delayed Offering" shall mean an offering of securities
which is intended to commence promptly after the effective date of a
registration statement, with the result that, pursuant to Rules 415 and
430A, all information (other than Rule 430A Information) with respect to
the securities so offered must be included in such registration statement
at the effective date thereof. A "Delayed Offering" shall mean an offering
of securities pursuant to Rule 415 which does not commence promptly after
the effective date of a registration statement, with the result that only
information required pursuant to Rule 415 need be included in such
registration
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statement at the effective date thereof with respect to the securities so
offered. Whether the offering of the Securities is a Non-Delayed Offering
or a Delayed Offering shall be set forth in Schedule I hereto.
2. Purchase and Sale. Subject to the terms and conditions and in
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reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at the purchase price of 97.181% of
the principal amount of the Securities set forth opposite such Underwriter's
name in Schedule II hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
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shall be made on the date and at the time specified in Schedule I hereto (or
such later date not later than five business days after such specified date as
the Underwriters shall designate), which date and time may be postponed by
agreement between the Underwriters and the Company or as provided in Section 8
hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made to
each Underwriter for their respective accounts against payment by each
Underwriter of the purchase price thereof to or upon the order of the Company by
certified or official bank check or checks or by wire transfer payable in same
day funds. Delivery of the Securities shall be made at such location as the
Underwriters shall reasonably designate at least one business day in advance of
the Closing Date and payment for the Securities shall be made a the office
specified in Schedule I hereto. Certificates for the Securities shall be
registered in such names and in such denominations as the Underwriters may
request no less than three full business days in advance of the Closing Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Underwriters in New York, New York, not later than
1:00 PM on the business day prior to the Closing Date.
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4. Agreements. The Company agrees with the several Underwriters
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that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereto, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statement or supplement (including the Final Prospectus or any Preliminary
Final Prospectus) to the Basic Prospectus unless the Company has furnished
you a copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object. Subject to
the foregoing sentence, the Company will cause the Final Prospectus,
properly completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) within the
time period prescribed and will provide evidence satisfactory to the
Underwriters of such timely filing. The Company will promptly advise the
Underwriters (i) when the Registration Statement, if not effective at the
Execution Time, and any amendment thereto, shall have become effective,
(ii) when the Final Prospectus, and any supplement thereto, shall have been
filed with the Commission pursuant to Rule 424(b), (iii) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (iv) of
any request by the Commission for any amendment of the Registration
Statement or supplement to the Final Prospectus or for any additional
information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (vi) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, the
Company promptly will (i) prepare and file with the Commission, subject to
the second sentence of paragraph (a) of this Section 4, an amendment or
supplement which will correct such statement or omission or effect such
compliance
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and (ii) supply any supplemented Prospectus to you in such quantities as
you may reasonably request.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Underwriters an earnings statement or
statements of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Underwriters and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long as delivery
of a prospectus by an Underwriter or dealer may be required by the Act, as
many copies of each Preliminary Final Prospectus and the Final Prospectus
and any supplement thereto as the Underwriters may reasonably request. The
Company will pay the expenses of printing or other production of all
documents relating to the offering.
(e) The Company will arrange for the qualification of the Securities
for sale under the laws of such jurisdictions as the Underwriters may
designate, will maintain such qualifications in effect so long as required
for the distribution of the Securities, and will arrange for the
determination of the legality of the securities for purchase by
institutional investors and will pay the fee of the National Association of
Securities Dealers, Inc., if necessary, in connection with its review of
the offering.
(f) Until the business date set forth on Schedule I hereto, the
Company will not, without consent of the Underwriters, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, any debt securities issued or guaranteed by the
Company (other than the Securities).
(g) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-
198, An Act Relating to Disclosure of Doing Business with Cuba, and the
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Company further agrees that if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after
the date the Registration Statement became effective with the Securities
and Exchange Commission or with the Florida Department of Banking and
Finance (the "Department"), or if the information reported in the Final
Prospectus, if any, concerning the Company's business with Cuba or with any
person or affiliate located in Cuba changes in any material way, the
Company will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
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5. Conditions to the Obligations of the Underwriters. The
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obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time and the Closing Date, to the accuracy
of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective prior to
the Execution Time, and if filing of the Final Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the Final
Prospectus, and any such supplement, will be filed in the manner and within
the time period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall have furnished to the Underwriters the opinion
of Gibson, Dunn & Crutcher LLP, counsel for the Company, dated the Closing
Date, to the effect that:
(i) The Company and each of Standard Pacific Savings, F.A.
("Savings"), Panel Concepts, Inc., Standard Pacific of Texas, Inc.,
Standard Pacific of Orange County, Inc., and Standard Pacific of
Fullerton, Inc. (together, the "Subsidiaries ) have been duly
organized and are validly existing as corporations; the Company and
each of the Subsidiaries other than Savings (as to which no opinion
need be expressed) are in good standing under the laws of their
respective jurisdictions of organization, and are duly qualified to
transact business as foreign corporations and are in good standing
under the laws of each jurisdiction identified in a certificate of the
Company, executed by the President and the Vice President-Finance of
the Company, as being jurisdictions in which any of such entities owns
or leases property, maintains or has an office or is engaged in the
business of developing real property, building and selling homes or
constructing office furniture, except where the failure to be so
qualified would not result in material liability or disability to the
Company and its subsidiaries, taken as a whole;
(ii) The Company and each of the Subsidiaries have the corporate
power to own or lease their respective properties and conduct their
respective businesses as described in the Registration Statement and
the Final Prospectus, and the Company has the corporate power to enter
into this Agreement and to carry out all the terms and provisions
hereof and thereof to be carried
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out by it;
(iii) The Company's authorized equity capitalization is as set
forth in the Final Prospectus, and the issued shares of capital stock
of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable, and are owned of record by
the Company. To the best knowledge of such counsel, the issued shares
of capital stock of each of the Subsidiaries are owned beneficially by
the Company free and clear of any other security interests, liens,
encumbrances, equities or claims;
(iv) The Securities have been duly authorized for listing,
subject to official notice of issuance, on the New York Stock
Exchange, Inc.; to the best knowledge of such counsel, no holders of
outstanding shares of capital stock of the Company are entitled as
such to any preemptive or other rights to subscribe for any of the
Securities; and to the best knowledge of such counsel, no holders of
securities of the Company are entitled to have such securities
registered under the Registration Statement;
(v) The Indenture and the Securities conform in all material
respects to the descriptions thereof in the Final Prospectus;
(vi) The execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company;
(vii) The Indenture has been duly and validly authorized,
executed and delivered by the Company, and constitutes the valid and
binding agreement of the Company, enforceable in accordance with its
terms, subject (A) to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium, arrangement and similar laws
of general application relating to or affecting creditors' rights,
including, without limitation, the effect of statutory or other law
regarding fraudulent conveyances, fraudulent transfers and
preferential transfers, and (B) to the limitations imposed by general
principles of equity (regardless of whether considered in a proceeding
at law or in equity);
(viii) The Securities are in the form contemplated by the
Indenture, have been duly and validly authorized by all necessary
corporate action and, when executed and authenticated as specified in
the Indenture and delivered against payment pursuant to this
Agreement, will be entitled to the benefits of the Indenture and will
be valid and binding obligations of
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the Company enforceable in accordance with their terms, subject (A) to
the effect of any applicable bankruptcy, reorganization, insolvency,
moratorium, arrangement and similar laws of general application
relating to or affecting creditors' rights, including, without
limitation, the effect of statutory or other law regarding fraudulent
conveyances, fraudulent transfers and preferential transfers, and (B)
to the limitations imposed by general principles of equity (regardless
of whether considered in a proceeding at law or in equity); and the
purchase and sale of the Securities in accordance with the terms and
provisions of this Agreement and the consummation of the transactions
contemplated under this Agreement, the Indenture and the Securities
will not violate the provisions of Section 1 of Article XV of the
Constitution of the State of California;
(ix) The Indenture is duly qualified under the Trust Indenture
Act;
(x) To the best knowledge of such counsel, (A) no legal or
governmental proceedings are pending to which the Company or any of
its subsidiaries is a party or to which the property of the Company or
any of its subsidiaries is subject that are required to be described
in the Registration Statement or the Final Prospectus and are not
described therein and no such proceedings have been threatened against
the Company or any of its subsidiaries or with respect to any of their
respective properties, and (B) no contract or other document is
required to be described in the Registration Statement or the Final
Prospectus or to be filed as an exhibit to the Registration Statement
that is not described therein or filed as required;
(xi) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement and the
consummation of the other transactions herein and therein contemplated
do not (A) require the consent, approval, authorization, registration
or qualification of or with any governmental authority, except such as
have been obtained and such as may be required under state securities
or blue sky laws, or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, lease or other
agreement or instrument filed as an exhibit to the Registration
Statement or as an exhibit to a document incorporated by reference
into the Final Prospectus and to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties are
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bound, or the charter documents or by-laws of the Company or any of
the Subsidiaries, or any statute or any judgment, decree, order, rule
or regulation of any court or other governmental authority or any
arbitrator known to such counsel and applicable to the Company or any
of the Subsidiaries;
(xii) The Registration Statement is effective under the Act; and
to the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto and no order directed at any document incorporated
or deemed to be incorporated by reference in the Registration
Statement or the Final Prospectus or any amendment or supplement
thereto has been issued, and no proceedings for that purpose have been
instituted or threatened by the Commission;
(xiii) The Registration Statement with respect to the
Securities, when declared effective, and the Final Prospectus (in each
case, including the documents incorporated by reference therein but
not including the financial statements and other financial and
statistical information contained therein, as to which such counsel
need make no comment) comply as to form in all material respects with
the applicable requirements of the Act, the Exchange Act and the
respective rules and regulations of the Commission thereunder;
(xiv) The Company is a savings and loan holding company
registered under Section 10 of the Home Owners' Loan Act of 1933, as
amended; and
(xv) Savings is a member in good standing of The Federal Home
Loan Bank of San Francisco; Savings is operating as a Savings
Association Insurance Fund insured financial institution; and to the
best knowledge of such counsel without investigation of court records,
no proceedings for the termination or revocation of such insurance are
pending or threatened.
Such counsel shall also state that nothing has come to their attention
which causes them to believe that the Registration Statement, as of its
effective date, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Final Prospectus, as of its date
or the date of such opinion, included or includes any untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (except that no comment need be made concerning the
financial statements and other financial and statistical information contained
or incorporated by reference therein).
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In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials.
References to the Registration Statement and the Final Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(c) The Underwriters shall have received from O'Melveny & Myers LLP,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Securities, the
Indenture, the Registration Statement, the Final Prospectus (together with
any supplement thereto) and other related matters as the Underwriters may
reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
(d) The Company shall have furnished to the Underwriters a certificate
of the Company, signed by the Chairman of the Board or the President and
the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Final Prospectus, any
supplement to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Final Prospectus (exclusive of any supplement
thereto), there has been no material adverse change in the condition
(financial or other), earnings, business or properties of the Company
and its subsidiaries, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto).
(e) At the Closing Date, Arthur Andersen LLP shall have furnished to
the Underwriters a letter or letters,
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dated respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Underwriters, confirming that they
are independent accountants within the meaning of the Act and the Exchange
Act and the respective applicable published rules and regulations
thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules and pro forma financial statements
included or incorporated in the Registration Statement and the Final
Prospectus and reported on by them comply in form in all material
respects with the applicable accounting requirements of the Act and
the Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; their limited review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited interim financial information as indicated in their
reports incorporated in the Registration Statement and the Final
Prospectus; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and committees
of the Company and the Subsidiaries; and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to December 31, 1996, nothing came
to their attention which caused them to believe that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Final
Prospectus do not comply in form in all material respects with
applicable accounting requirements and with the published rules
and regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on Form
10-Q under the Exchange Act; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited financial statements included or
incorporated in the Registration Statement and the Final
Prospectus; or
(2) with respect to the period subsequent to March 31,
1997, there were any changes, at a
13
<PAGE>
specified date not more than five business days prior to the date
of the letter, in the long-term debt of the Company and its
subsidiaries or capital stock of the Company or decreases in
consolidated stockholders' equity of the Company as compared with
the amounts shown on the March 31, 1997, consolidated balance
sheet included or incorporated in the Registration Statement and
the Final Prospectus, or for the period from April 1, 1997, to
such specified date there were any decreases, as compared with
the corresponding period in the preceding year in revenues for
homebuilding and corporate, homebuilding and corporate pretax
income, net income, net income per share from continuing
operations or net income per share of the Company and its
subsidiaries except in all instances for changes or decreases set
forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the Underwriters;
(iii) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Final Prospectus, agrees
with the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro forma
financial statements included or incorporated in the Registration
Statement and the Final Prospectus (the "pro forma financial
statements"); carrying out certain specified procedures; inquiries of
certain officials of the Company who have responsibility for financial
and accounting matters; and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
the pro forma financial statements, nothing came to their attention
which caused them to believe that the pro forma financial statements
do not comply in form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that the
pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
References to the Final Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
14
<PAGE>
In addition, except as provided in Schedule I hereto, at the Execution
Time, Arthur Andersen LLP shall have furnished to the Underwriters a letter
or letters, dated as of the Execution Time, in form and substance
satisfactory to the Underwriters, to the effect set forth above.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (e) of this Section 5 or
(ii) any change, or any development involving a prospective change, in or
affecting the business or properties of the Company and its subsidiaries
the effect of which, in any case referred to in clause (i) or (ii) above,
is, in the judgment of the Underwriters, so material and adverse as to make
it impractical or inadvisable to proceed with the offering or delivery of
the Securities as contemplated by the Registration Statement (exclusive of
any amendment thereof) and the Final Prospectus (exclusive of any
supplement thereto).
(g) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(h) Prior to the Closing Date, the Company shall have furnished to the
Underwriters such further information, certificates and documents as the
Underwriters may reasonably request.
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Underwriters and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Underwriters. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the office of O'Melveny & Myers LLP, counsel for the Underwriters,
at 610 Newport Center Drive, Newport Beach, California 92660, on the Closing
Date.
15
<PAGE>
6. Reimbursement of Underwriters' Expenses. If the sale of the
---------------------------------------
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 5 hereof is not satisfied,
because of any termination pursuant to Section 9 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
7. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law 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 the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in any
preliminary Prospectus or the Final Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
-------- -------
Company will 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 such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter specifically for inclusion
therein. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter specifically for inclusion in the
documents referred to in the foregoing
16
<PAGE>
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the
statements set forth in the last paragraph of page S-2 and in the second, fifth
and last three sentences of the sixth paragraphs under the heading
"Underwriting" in the Final Prospectus constitute the only information furnished
in writing by or on behalf of the several Underwriters for inclusion in any
Preliminary Final Prospectus or the Final Prospectus, and you, as the
Underwriters, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below): provided, however, that such counsel shall be
-------- -------
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or
17
<PAGE>
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and by the Underwriters from the
offering of the Securities; provided, however, that in no case shall any
-------- -------
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Underwriters shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and of the Underwriters in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses), and
benefits received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Final Prospectus. Relative fault shall be determined by reference
to whether any alleged untrue statement or omission relates to information
provided by the Company or the Underwriters. The Company and the Underwriters
agree that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7, each person who controls an
Underwriter within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of an Underwriter shall have the same
rights to contribution as such Underwriter, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, each officer
of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
18
<PAGE>
8. Default by an Underwriter. If any one or more Underwriters shall
-------------------------
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
-------- -------
that the aggregate principal amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate principal amount of Securities set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter or the
Company. In the event of a default by any Underwriter as set forth in this
Section 8, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Underwriters shall determine in order that the required
changes in the Registration Statement and the Final Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
9. Termination. This Agreement shall be subject to termination in
-----------
the absolute discretion of the Underwriters, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in the Company's Common Stock shall have been suspended by the
Commission, New York Stock Exchange or the Pacific Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the judgment of the Underwriters, impracticable or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Final Prospectus (exclusive of any supplement thereto).
10. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will
19
<PAGE>
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 7 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 6 and 7 hereof
shall survive the termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Underwriters, will be mailed,
delivered or telegraphed and confirmed to Salomon Brothers Inc. at Seven World
Trade Center, New York, New York, 10048; or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at 1565 West MacArthur
Boulevard, Costa Mesa, California 92626, attention of the legal department.
12. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7 hereof, and no
other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
--------------
in accordance with the laws of the State of New York.
20
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
STANDARD PACIFIC CORP.
By: /s/ Andrew H. Parnes
------------------------
Name: Andrew H. Parnes
Title: Vice President -
Finance, Treasurer and
Chief Financial
Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
Dillon, Read & Co. Inc.
Donaldson, Lufkin & Jenrette
Securities Corporation
BancAmerica Securities, Inc.
By: Salomon Brothers Inc
By: /s/ Jane Bieneman
------------------------
21
<PAGE>
SCHEDULE I
Underwriting Agreement dated June 12, 1997
Registration Statement No. 33-45271
Title, Purchase Price and Description of Securities:
Title: 8-1/2% Senior Notes Due 2007
Principal amount: $100,000,000
Purchase price (include accrued
interest or amortization, if any): 97.181%
Sinking fund provisions: None
Redemption provisions: See Prospectus Supplement,
dated June 12, 1997
Other provisions: See Prospectus Supplement,
dated June 12, 1997
Closing Date, Time and Location: June 17, 1997; 7:00 a.m., Los Angeles Time; at
the offices of O'Melveny & Myers LLP, 610 Newport Center Drive, Newport Beach,
California
Type of Offering: Delayed Offering
Date referred to in Section 4(f) after which the Company may offer or sell debt
securities issued or guaranteed by the Company without the consent of the
Underwriters: September 10, 1997
Modification of items to be covered by the letter from Arthur Andersen LLP
delivered pursuant to Section 5(e) at the Execution Time: None
22
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
Underwriters Principal Amount
of Securities to
be Purchased
- -------------------------------------- --------------------
<S> <C>
Salomon Brothers Inc........... $ 55,000,000
Dillon, Read & Co. Inc......... 20,000,000
Donaldson, Lufkin & Jenrette,
Securities Corporation....... 20,000,000
BancAmerica Securities, Inc.... 5,000,000
------------------
Total.......................... $100,000,000
==================
</TABLE>
23
<PAGE>
EXHIBIT 4.1
STANDARD PACIFIC CORP.
OFFICERS' CERTIFICATE
---------------------
Pursuant to Sections 2.01 and 2.03(a) of the Indenture, dated as of April
1, 1992 (the "Indenture"), between Standard Pacific Corp., a Delaware
corporation (the "Company"), and United States Trust Company of New York, as
Trustee (the "Trustee"), the undersigned, Stephen J. Scarborough and Andrew H.
Parnes, the President and Vice President, Treasurer and Chief Financial Officer
of the Company, respectively, hereby certify on behalf of the Company as
follows:
1. AUTHORIZATION. The establishment of 8-1/2% Senior Notes as a
series of Securities of the Company (the "Notes") has been approved and
authorized in accordance with the provisions of the Indenture. The form of
Note attached hereto as Exhibit A has been approved and authorized in
accordance with the provisions of the Indenture.
2. COMPLIANCE WITH CONDITIONS PRECEDENT. All conditions precedent
provided for in the Indenture relating to the establishment and issue of
the Notes as a series of Securities of the Company and the establishment of
a form of Note as a Security have been complied with.
3. TERMS. The terms of the series of Securities established
pursuant to this Officers' Certificate shall be as follows:
(A) TITLE. The title of the series of Securities established
hereby is the "8-1/2% Senior Notes Due 2007."
(B) AGGREGATE PRINCIPAL AMOUNT. The limit upon the aggregate
principal amount of the Notes which may be authenticated and delivered
under the Indenture (except for Notes authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Notes pursuant to Sections 2.08, 2.09, 2.11, 3.06 and 9.05 of the
Indenture and except for any Notes which, pursuant to Section 2.04 of
the Indenture, are deemed never to have been authorized and delivered
thereunder) is $100,000,000.
(C) BOOK-ENTRY SYSTEM. The Notes will be issued in the form of
one or more securities in global form (the "Global Security") held in
book-entry form. The Depository Trust Company ("DTC") or its nominee
will initially be the sole registered holder of the Notes
<PAGE>
for all purposes under the Indenture.
A Global Security may not be transferred except as a whole by DTC
to a nominee of DTC or by a nominee of DTC to DTC. A Global Security
is exchangeable for certificated Notes only if (i) DTC notifies the
Company that it is unwilling or unable to continue as a Depositary for
such Global Security or if at any time DTC ceases to be a clearing
agency registered under the Exchange Act, or (ii) the Company executes
and delivers to the Trustee a notice that such Global Security shall
be so transferable, registrable, and exchangeable. Any Global Security
that is exchangeable for certificated Notes pursuant to the preceding
sentence will be transferred to, and registered and exchanged for,
certificated Notes in authorized denominations and registered in such
names as the Depositary holding such Global Security may direct.
Subject to the foregoing, a Global Security is not exchangeable,
except for a Global Security of like denomination to be registered in
the name of the Depositary or its nominee. In the event that a Global
Security becomes exchangeable for certificated Notes, certificated
Notes will be issued only in fully registered form in denomination of
$1,000 or integral multiples thereof.
(D) PERSONS TO WHOM INTEREST PAYABLE. Interest on the Notes
shall be payable to the person in whose name a Note is registered at
the close of business (whether or not a Business Day) on the Regular
Record Date (as defined in the Indenture), for such interest payment,
except (i) that interest payable on June 15, 2007 shall be payable to
the person to whom principal is payable, and (ii) that default
interest shall be payable in the manner provided in Section 2.13 of
the Indenture.
(E) STATED MATURITY. The date on which the principal of the
Notes shall be payable, unless accelerated pursuant to the Indenture,
is June 15, 2007.
(F) RATE OF INTEREST; INTEREST PAYMENT DATES; REGULAR RECORD
DATES; OVERDUE PRINCIPAL AND INTEREST.
(I) RATE OF INTEREST. The principal amount of each of the
Notes shall bear simple interest at the rate of 8-1/2% per annum.
The date from which interest shall accrue for each of the Notes
shall be June 17, 1997. Interest shall be computed on the basis
of a 360-day year of twelve 30-day months.
2
<PAGE>
(II) INTEREST PAYMENT DATES. Interest on the Notes shall
be payable semiannually in arrears on June 15 and December 15 of
each year, commencing December 15, 1997.
If any Interest Payment Date or Maturity of the Notes falls
on a day that is not a Business Day, the payment due on such
Interest Payment Date or at Maturity will be made on the
following day that is a Business Day as if it were made on the
date such payment was due and no interest shall accrue on the
amount so payable for the period from and after such Interest
Payment Date or Maturity, as the case may be.
(III) REGULAR RECORD DATES. The Regular Record Dates for
interest payable on each June 15 and December 15 will be the
immediately preceding June 1 and December 1 (whether or not a
Business Day), respectively.
(IV) OVERDUE PRINCIPAL AND INTEREST. Overdue principal
and, to the extent payment of such interest shall be legally
enforceable, overdue installments of interest shall bear interest
at the rate of 8-1/2% per annum.
(G) PLACE OF PAYMENT; REGISTRATION OF TRANSFER AND EXCHANGE;
NOTICES TO COMPANY.
(I) PLACE OF PAYMENT. Payment of the principal of and
interest on the Notes will be made at the Corporate Trust Office
of the Trustee in the Borough of Manhattan, The City of New York,
and at any other office or agency designated by the Company for
such purpose; provided, however, that at the option of the
-------- -------
Company, payment of interest due (other than at Maturity or upon
Redemption) may be made by check mailed to the address of the
person entitled thereto as such address shall appear in the
register of Securities.
(II) REGISTRATION OF EXCHANGE AND TRANSFER. Notes may be
presented for exchange and registration of transfer at the
Corporate Trust Office of the Trustee in the Borough of
Manhattan, The City of New York, or at the office of any transfer
agent hereafter designated by the Company for such purpose.
(III) NOTICES TO COMPANY. Notices and demands to or upon
the Company in respect to the Notes and
3
<PAGE>
the Indenture may be served at Standard Pacific Corp., 1565 West
MacArthur Boulevard, Costa Mesa,California 92636, Attention: Vice
President and Treasurer.
(H) OPTIONAL REDEMPTION. Except as set forth in the following
paragraph, the Notes will not be redeemable at the option of the
Company prior to June 15, 2002. Thereafter, the Notes will be
redeemable, at the Company's option, in whole or in part, at any time
or from time to time, upon not less than 30 nor more than 60 days'
prior notice mailed by first-class mail to each Holder's registered
address, at the following redemption prices (expressed in percentages
of principal amount), plus accrued and unpaid interest to the
redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the 12-month period commencing on
June 15 of the years set forth below:
Redemption
Year Price
---- ----------
2002.................................... 104.250%
2003.................................... 102.833%
2004.................................... 101.417%
2005 and thereafter..................... 100.000%
If less than all of the Notes are to be redeemed, the Trustee
will select the Notes to be redeemed on a pro rata basis, by lot or by
such other method as the Trustee in its sole discretion shall deem to
be fair and appropriate.
(I) ACCELERATION. The principal amount of the Notes shall be
payable upon declaration of acceleration of the maturity thereof
pursuant to Section 6.02 of the Indenture.
(J) CHANGE OF CONTROL. Upon the occurrence of a Change of
Control, each Holder shall have the right to require that the Company
repurchase all or a portion of such Holder's Notes at a purchase price
in cash equal to 101 percent of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of repurchase
(subject to the right of Holders of record on the relevant record date
to receive interest due on the relevant interest payment date), in
accordance with the provisions of the next paragraph.
Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder with a
4
<PAGE>
copy to the Trustee stating:
(aa) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase such Holder's Notes
at a purchase price in cash equal to 101 percent of the principal
amount outstanding at the repurchase date plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right
of Holders of record on the relevant record date to receive
interest on the relevant interest payment date) (the "Repurchase
Price");
(bb) the circumstances and relevant facts and relevant financial
information regarding such Change of Control;
(cc) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed) (the
"Repurchase Date");
(dd) that any Note not tendered or accepted for payment will continue
to accrue interest;
(ee) that any Note accepted for payment shall cease to accrue interest
after the Repurchase Date;
(ff) that Holders electing to have a Note purchased will be required
to surrender the Note, with the form entitled "Option of Holder
to Elect Purchase" on the reverse side of the Note completed, to
the Paying Agent at the address specified in the Notice at least
five days before the Repurchase Date;
(gg) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than three days prior to the
Repurchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount
of the Note the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have the Note
purchased; and
(hh) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered.
On the Repurchase Date, the Company shall (i) accept for payment
Notes or portions thereof properly tendered, (ii) deposit with the
Paying Agent money sufficient to pay the purchase price of all Notes
or
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portions thereof so accepted and (iii) deliver to the Trustee Notes so
accepted together with an Officers' Certificate stating the Notes or
portions thereof accepted for payment by the Company. The Paying Agent
shall promptly mail or deliver to Holders of Notes so accepted,
payment in an amount equal to the Repurchase Price, and the Trustee
shall promptly authenticate and mail or deliver to such Holders a new
Note equal in principal amount of any unpurchased portion of the Note
surrendered. The Company will publicly announce the results on or as
soon after as practical the Repurchase Date. For purposes of this
paragraph (j), the Trustee shall act as the Paying Agent.
(K) REGISTRAR OF SECURITIES; PAYING AGENT. The Company hereby
appoints the Trustee as the Registrar and initial Paying Agent. The
books of the Registrar of the Securities for the Notes will be
initially maintained at the Corporate Trust Office of the Trustee.
(L) COMPLIANCE WITH SECURITIES LAWS. The company shall comply, to
the extent applicable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations in
connection with the repurchase of Notes pursuant to Section 3(h),
3(j), 3(l)(i) or 3(l)(v) hereunder. To the extent that the provisions
of any securities laws or regulations conflict with said provisions
hereunder, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its
obligations under said provisions hereunder by virtue thereof.
(M) CERTAIN COVENANTS OF THE COMPANY. The Company covenants as
follows:
(I) MAINTENANCE OF CONSOLIDATED NET WORTH. The Company
shall furnish to the Trustee a certificate (signed by a Vice
President, and by its Treasurer, its Secretary or an Assistant
Secretary) within 45 days after the end of each fiscal quarter of the
Company (90 days after the end of its fiscal year) setting forth the
Consolidated Net Worth of the Company and its Restricted Subsidiaries
at the end of such fiscal quarter. If the Consolidated Net Worth of
the Company and its Restricted Subsidiaries at the end of any two
consecutive fiscal quarters is less than $200,000,000, then the
Company shall make an offer to all Holders to acquire (the "Offer") on
the last day of the fiscal quarter next following such second fiscal
quarter or, if such second fiscal quarter ends on the last day of the
Company's fiscal year, 135 days after the end of such second fiscal
quarter (the "Purchase Date"), 10% of the aggregate principal amount
of Notes originally issued (or, if less than 10% of the principal
amount of the Notes originally issued are then outstanding, then all
of the Notes outstanding at that time, such amount being referred to
as the "Offer Amount") at a purchase price equal to 100% of the
aggregate principal amount thereof together with accrued and unpaid
interest to the Purchase Date. In no event shall the failure to meet
the minimum Consolidated Net
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Worth stated above at the end of any fiscal quarter be counted
toward more than one Offer.
The Company shall provide the Trustee with notice of the
Offer at least 45 days before any such Purchase Date and at least
10 days before the notice of any Offer is mailed to Holders. The
Company shall notify the Trustee promptly after the occurrence of
any of the events specified in this paragraph (i).
Notice of an Offer shall be mailed by the Trustee not less
than 30 days nor more than 60 days before the Purchase Date to
the Holders of the Notes at their last registered address. The
Offer shall remain open from the time of mailing until 5 days
before the Purchase Date. The Notice shall be accompanied by a
copy of the information regarding the Company required to be
contained in a Quarterly Report on Form 10-Q for the second
fiscal quarter referred to above if such second fiscal quarter is
one of the Company's first three fiscal quarters. If such second
fiscal quarter is the Company's last fiscal quarter, a copy of
the information required to be contained in an Annual Report to
Shareholders pursuant to Rule 14a-3 under the Exchange Act for
the fiscal year ending with such second fiscal quarter shall
either accompany the notice or be mailed to Holders not less than
15 days before the Purchase Date. The Notice shall contain all
instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Offer. The Notice, which shall
govern the terms of the Offer, shall state:
(aa) that the Offer is being made pursuant to this paragraph
(m)(i);
(bb) the Offer Amount, the purchase price and the Purchase Date;
(cc) that any Note not tendered or accepted for payment will
continue to accrue interest;
(dd) that any Note accepted for payment pursuant to the Offer
shall cease to accrue interest after the Purchase Date;
(ee) that Holders electing to have a Note purchased pursuant to
an Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the
reverse side of the Note completed, to the Paying Agent at
the address specified in the
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<PAGE>
Notice at least five days before the Purchase Date;
(ff) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than three days prior
to the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder,
the principal amount of the Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his
election to have the Note purchased;
(gg) that if Notes in a principal amount in excess of the Offer
Amount are tendered pursuant to the Offer, the Company shall
purchase Notes on a pro rata basis or by lot or in such
other manner as the Trustee shall deem fair and appropriate;
and
(hh) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered.
On the Purchase Date, the Company shall (i) accept for
payment Notes or portions thereof properly tendered pursuant to
the Offer (on a pro rata basis, by lot or in such other manner
specified by the Trustee if required pursuant to paragraph (gg)
above), (ii) deposit with the Paying Agent money sufficient to
pay the purchase price of all Notes or portions thereof so
accepted and (iii) deliver to the Trustee Notes so accepted
together with an Officers' Certificate stating the Notes or
portions thereof accepted for payment by the Company. The Paying
Agent shall promptly mail or deliver to Holders of Notes so
accepted, payment in an amount equal to the purchase price, and
the Trustee shall promptly authenticate and mail or deliver to
such Holders a new Note equal in principal amount of any
unpurchased portion of the Note surrendered. Any Notes not so
accepted shall be promptly mailed or delivered by the Company to
the Holder thereof. The Company will publicly announce the
results of the Offer on or as soon as practicable after the
Purchase Date. For purposes of this paragraph (l)(i), the Trustee
shall act as the Paying Agent.
(II) LIMITATION ON ADDITIONAL INDEBTEDNESS. The Company
will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, Incur any Indebtedness unless, after
giving effect thereto, either (i) the ratio of Indebtedness of
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<PAGE>
the Company and the Restricted Subsidiaries (excluding, for
purposes of this calculation only, (A) purchase money mortgages
that are Non-Recourse Indebtedness, and (B) Indebtedness Incurred
under letters of credit, escrow agreements and surety bonds
obtained in the ordinary course of business) to Consolidated
Tangible Net Worth of the Company is less than 2.25 to 1; or (ii)
the Consolidated Coverage Ratio exceeds 2.0 to 1.
Notwithstanding the foregoing, the Company and its
Restricted Subsidiaries may Incur: (A) Indebtedness under one or
more Bank Credit Facilities in an amount not in excess of $275
million; (B) purchase money mortgages that are Non-Recourse
Indebtedness; (C) obligations Incurred under letters of credit,
escrow agreements and surety bonds in the ordinary course of
business; (D) Indebtedness Incurred under a Warehouse Facility,
provided that the amount of such Indebtedness (excluding funding
drafts issued thereunder) outstanding at any time pursuant to
this clause (D) may not exceed 98 percent of the value of the
Mortgages pledged to secure Indebtedness thereunder; and (E)
Indebtedness Incurred solely for the purpose of refinancing or
repaying any existing Indebtedness so long as (I) the principal
amount of such new Indebtedness does not exceed the principal
amount of the existing Indebtedness refinanced or repaid (plus
the premiums or other payments required to be paid in connection
with such refinancing or repayment and the expenses incurred in
connection therewith), (II) the maturity of such new Indebtedness
is not earlier than that of the existing Indebtedness to be
refinanced or repaid, (III) such new Indebtedness, determined as
of the date of Incurrence, has an Average Life at least equal to
the remaining Average Life of the Indebtedness to be refinanced
or repaid, (IV) the new Indebtedness is pari passu with or
subordinate to the Indebtedness being refinanced or repaid, and
(V) the existing and new Indebtedness are obligations of the same
entity.
(III) LIMITATIONS ON LIENS. The Company will not, and will
not permit any Restricted Subsidiary to, issue, assume, guarantee
or suffer to exist any Indebtedness secured by any mortgage,
pledge, lien or other encumbrance of any nature (herein
collectively referred to as a "lien" or "liens") upon any
property of the Company or any Restricted Subsidiary, or on any
shares of stock of any Restricted Subsidiary, without in any such
case effectively providing that the Notes (together
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<PAGE>
with, if the Company shall so determine, any other Indebtedness
of the Company or such Restricted Subsidiary ranking pari passu
with the Notes) shall be secured equally and ratably with such
Indebtedness, except that the foregoing restrictions shall not
apply to: (A) liens existing on March 31, 1997; (B) pledges,
guarantees and deposits under workers' compensation laws,
unemployment insurance laws or similar legislation, good faith
deposits under bids, tenders or contracts, deposits to secure
public or statutory obligations or appeal or similar bonds, and
liens created by special assessment districts used to finance
infrastructure improvements; (C) liens existing on property or
assets of any entity on the date on which it becomes a Restricted
Subsidiary, which secured Indebtedness is not Incurred in
contemplation of such entity becoming a Restricted Subsidiary;
(D) liens on or leases of model home units; (E) liens on
property, inventory and receivables of Panel Concepts, Inc.
("Panel Concepts") to provide working capital (exclusive of cash
and cash equivalents) for Panel Concepts in the ordinary course
of business; (F) Capitalized Lease Obligations entered into in
the ordinary course of business in amounts not in excess of
$10,000,000 in the aggregate; (G) the replacement of any of the
items set forth in clauses (A) through (F) above, provided that
(i) the principal amount of the Indebtedness secured by liens
shall not be increased, (ii) such Indebtedness, determined as of
the date of Incurrence, has an Average Life at least equal to
the remaining Average Life of the Indebtedness to be refinanced,
(iii) the maturity of such Indebtedness is not earlier than that
of the Indebtedness to be refinanced, and (iv) the liens shall be
limited to the property or part thereof which secured the lien so
replaced or property substituted therefor as a result of the
destruction, condemnation or damage of such property; (H) liens
on property acquired, constructed or improved by the Company or
any Restricted Subsidiary, which liens are either existing at the
time of such acquisition or at the time of completion of
construction or improvement or created within 120 days after such
acquisition, completion or improvement, to secure Indebtedness
Incurred or assumed to finance all or part of such property,
including any increase in the principal amount of such
Indebtedness and any extension of the repayment schedule and
maturity of such Indebtedness Incurred or entered into in the
ordinary course of business; (I) liens or priorities
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<PAGE>
incurred in the ordinary course of business, such as laborers',
employees', carriers', mechanics', vendors' and landlords' liens
or priorities; (J) liens for certain taxes and certain survey and
title exceptions; (K) liens arising out of judgments or awards
against the Company or any Restricted Subsidiary with respect to
which the Company or such Restricted Subsidiary is in good faith
prosecuting an appeal or proceeding for review and with respect
to which it has secured a stay of execution pending such appeal
or proceeding for review; (L) liens on property owned by any
Homebuilding Joint Venture; (M) liens securing a Warehouse
Facility, provided that such liens shall not extend to any assets
other than the mortgages, promissory notes and other collateral
that secures mortgage loans made by the Company or any of its
Restricted Subsidiaries; and (N) liens which would otherwise be
subject to the foregoing restrictions which, when the
Indebtedness relating to those liens is added to all other then
outstanding Indebtedness of the Company and the Restricted
Subsidiaries secured by liens and not listed in clauses (A)
through (M) above, does not exceed $50,000,000.
(IV) LIMITATION ON RESTRICTED PAYMENTS. The Company will
not, nor will it permit any Restricted Subsidiary to, directly or
indirectly, (A) declare or pay any dividend on, or make any
distribution in respect of, or purchase, redeem or otherwise
acquire or retire for value, any Capital Stock of the Company
other than through the issuance solely of the Company's own
Capital Stock (other than Disqualified Stock), or rights thereto;
(B) make any principal payment on, or redeem, repurchase, defease
or otherwise acquire or retire for value prior to scheduled
principal payments or maturity, Indebtedness of the Company or
any Restricted Subsidiary which is expressly subordinated in
right of payment to the Notes (other than Indebtedness Incurred
after the issuance of the Notes provided that such repayment,
redemption, repurchase, defeasance or other retirement is made
substantially concurrent with the receipt of proceeds from the
Incurrence of Indebtedness that by its terms is both subordinated
in right of payment to the Notes and matures, by sinking fund or
otherwise, after June 15, 2007; or (C) make any Restricted
Investment (such payments or any other actions described in (A),
(B) and (C) being referred to herein collectively as, "Restricted
Payments") unless
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(I) at the time of, and after giving effect to, the proposed
Restricted Payment, no Event of Default (and no event that, after
notice or lapse of time, or both, would become an Event of
Default) shall have occurred and be continuing, (II) the Company
is able to Incur an additional $1.00 of Indebtedness pursuant to
the first paragraph of section (m)(ii) herein, and (III) at the
time of, and after giving effect thereto, the sum of the
aggregate amount expended (or with respect to guaranties or
similar arrangements the amount then guaranteed) for all such
Restricted Payments (the amount expended for such purposes, if
other than in cash, to be determined by the Board of Directors of
the Company, whose determination shall be conclusive and
evidenced by a resolution of such Board of Directors filed with
the Trustee) subsequent to June 30, 1997 shall not exceed the sum
of (aa) 50% of the aggregate Consolidated Net Income (or, in case
such aggregate Consolidated Net Income shall be a deficit, minus
100% of such deficit) of the Company accrued on a cumulative
basis subsequent to June 30, 1997, (bb) the aggregate net
proceeds, including the fair market value of property other than
cash (as determined by the Board of Directors of the Company,
whose determination shall be conclusive and evidenced by a
resolution of such Board of Directors filed with the Trustee),
received by the Company from the issuance or sale, after the date
of issuance of the Notes, of Capital Stock (other than
Disqualified Stock) of the Company, including Capital Stock
(other than Disqualified Stock) of the Company issued subsequent
to the date of issuance of the Notes upon the conversion of
Indebtedness of the Company initially issued for cash, (cc) 100%
of dividends or distributions (the fair value of which, if other
than cash, to be determined by the Board of Directors, in good
faith) paid to the Company (or any Restricted Subsidiary) by an
Unrestricted Subsidiary, Homebuilding Joint Venture or any other
person in which the Company (or any Restricted Subsidiary),
directly or indirectly, has an ownership interest but less than a
100% ownership interest to the extent that such dividends or
distributions do not exceed the amount of loans, advances or
capital contributions made to any such entity or person
subsequent to the date of issuance of the Notes and included in
the calculation of Restricted Payments, and (dd) $40,000,000;
provided, however, that the foregoing shall not prevent (i) the
-------- -------
payment of any dividend within 60 days after the date of
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<PAGE>
declaration thereof, if at said date of declaration the making of
such payment would have complied with the provisions of this
limitation on dividends, provided, however, that such dividend
shall be included in future calculations of Restricted Payments,
(ii) the retirement of any shares of the Company's Capital Stock
by exchange for, or out of proceeds of the substantially
concurrent sale of, other shares of its Capital Stock (other than
Disqualified Stock), provided, however, that the aggregate net
proceeds from such sale shall be excluded from the calculation of
the amounts under subclause (bb) above of, (iii) the redemption,
repayment, repurchase, defeasance or other retirement of
Indebtedness with proceeds received from the substantially
concurrent sale of shares of the Company's Capital Stock (other
than Disqualified Stock); provided however, that the aggregate
net proceeds from such sale shall be excluded from the
calculation of the amounts under subclause (bb) above, or (iv)
any investment or investments in Standard Pacific Savings, F.A.
("Savings") by the Company or any of its Restricted Subsidiaries
for the purpose of causing Savings to comply with any regulatory
agreements existing on the date of issuance of the Notes or with
any applicable law, rule, regulation, official interpretation of
law, rule or regulation or official directive which governs the
capital maintenance, net worth or similar regulatory requirements
applicable to Savings.
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<PAGE>
(V) LIMITATION ON ASSET SALES. The Company will not, and
will not permit any Restricted Subsidiary to, make an Asset
Disposition, other than for fair market value and in the ordinary
course of business, with an aggregate net book value as of the
end of the immediately preceding fiscal quarter greater than 10%
of the Company's total consolidated assets as of that date,
unless (A) the consideration received by the Company (or a
Restricted Subsidiary, as the case may be) for such disposition
consists of at least 70% cash; provided, however, that for
-------- -------
purposes of this provision (A), the amount of any liabilities
assumed by the transferee and any notes or other obligations
received by the Company or a Restricted Subsidiary which are
immediately converted into cash shall be deemed to be cash,
and (B) the Company shall within one year after the date of such
sale or sales, apply the Net Proceeds from such sale or sales in
excess of an amount equal to 10% of the Company's total
consolidated assets to (I) a purchase of or an Investment in
Additional Assets (other than cash or cash equivalents), (II)
repayment of indebtedness of the Company which is pari passu with
---- -----
the Notes, and/or (III) make an offer to acquire all or part of
the Notes at a purchase price equal to the principal amount
thereof plus accrued and unpaid interest thereon to the purchase
date.
In the event the Company elects to or shall be required to
offer to redeem Notes pursuant to the provisions of this
paragraph (m)(v), the Company shall deliver to the Trustee an
Officers' Certificate specifying the Asset Sale Offer Amount (as
defined below) and the Asset Sale Purchase Date (as defined
below). Within 15 days thereafter, the Company shall mail or
cause the Trustee to mail (in the Company's name and at its
expense) an offer to redeem (the "Asset Sale Offer") to each
Holder of Notes. The redemption price shall be 100% of the
principal amount of the Notes plus accrued interest to the
redemption date and upon surrender to the Trustee or the Paying
Agent, the Holders of such Notes shall be paid the redemption
price. The date designated for repurchase of Notes pursuant to
an Asset Sale Offer (the "Asset Sale Purchase Date") shall be a
date designated by the Company that is not less than 30 days nor
more than 60 days before notice of an Asset Sale Offer is to be
and shall be mailed by the Trustee to the Holders of the Notes at
their last registered
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address. The Asset Sale Offer shall remain open from the time of
mailing until 5 days before the Asset Sale Purchase Date. The
Notice shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Notice, which shall govern the terms of the Asset Sale
Offer, shall state:
(aa) that the Asset Sale Offer is being made pursuant to this
paragraph (m)(v);
(bb) the amount of Notes offered to be redeemed (the "Asset Sale
Offer Amount"), the purchase price and the Asset Sale
Purchase Date;
(cc) that any Note not tendered or accepted for payment will
continue to accrue interest;
(dd) that any Note accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest after the Asset
Sale Purchase Date;
(ee) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer will be required to surrender the Note,
with the form entitled "Option of Holder to Elect Purchase"
on the reverse side of the Note completed, to the Paying
Agent at the address specified in the Notice at least five
days before the Asset Sale Purchase Date;
(ff) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than three days prior
to the Asset Sale Purchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have the Note purchased;
(gg) that if Notes in a principal amount in excess of the Asset
Sale Offer Amount are tendered pursuant to the Asset Sale
Offer, the Company shall purchase Notes on a pro rata basis
or by lot or in such other manner as the Trustee shall deem
fair and appropriate; and
(hh) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered.
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On the Asset Sale Purchase Date, the Company shall (i)
accept for payment Notes or portions thereof properly tendered
pursuant to the Asset Sale Offer (on a pro rata basis, by lot or
in such other manner specified by the Trustee if required
pursuant to paragraph (gg) above), (ii) deposit with the Paying
Agent money sufficient to pay the purchase price of all Notes or
portions thereof so accepted and (iii) deliver to the Trustee
Notes so accepted together with an Officers' Certificate stating
the Notes or portions thereof accepted for payment by the
Company. The Paying Agent shall promptly mail or deliver to
Holders of Notes so accepted, payment in an amount equal to the
purchase price, and the Trustee shall promptly authenticate and
mail or deliver to such Holders a new Note equal in principal
amount of any unpurchased portion of the Note surrendered. Any
Notes not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company will publicly
announce the results of the Asset Sale Offer on or as soon after
as practical the Asset Sale Purchase Date. For purposes of this
paragraph (l)(v), the Trustee shall act as the Paying Agent.
(VI) TRANSACTIONS WITH AFFILIATES. (A) The Company shall
not, and shall not permit any Restricted Subsidiary to, enter
into or permit to exist any transaction or series of related
transactions (including the purchase, sale, lease or exchange of
any property, employee compensation arrangements or the rendering
of any service) with any Affiliate of the Company (an "Affiliate
Transaction") unless the terms thereof (I) are no less favorable
to the Company or such Restricted Subsidiary than those that
could be obtained at the time of such transaction in arm's-length
dealings with a person who is not such an Affiliate; and (II) if
such Affiliate Transaction (or series of related Affiliate
Transactions) involve aggregate payments in an amount in excess
of $10 million in any one year, (aa) are set forth in writing,
(bb) comply with clause (I) above and (cc) have been approved by
a majority of the disinterested members of the Board of
Directors.
(B) The provisions of the foregoing paragraph (A) shall
not prohibit (I) any Restricted Payment permitted to be paid
pursuant to the covenant described under clause (m)(iv) above;
(II) any issuance of securities, or other payments, awards or
grants in cash, securities or
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otherwise, pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans in the
ordinary course of business and approved by the Board of
Directors or a committee thereof; (III) the grant of stock
options or similar rights to employees and directors of the
Company in the ordinary course of business and pursuant to plans
approved by the Board of Directors or a committee thereof; (IV)
loans or advances to employees in the ordinary course of business
of the Company or its Restricted Subsidiaries; (V) fees,
compensation or employee benefit arrangements paid to and
indemnity provided for the benefit of directors, officers or
employees of the Company or any Subsidiary in the ordinary course
of business; or (VI) any Affiliate Transaction between the
Company and a Restricted Subsidiary or between Restricted
Subsidiaries.
(VII) LIMITATION ON PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES. The Company will not, and will not
permit any Restricted Subsidiary to, create or otherwise cause or
permit to exist or become effective, any consensual encumbrance
or consensual restriction on the ability of any Restricted
Subsidiary (I) to pay dividends or make any other distributions
on its Capital Stock to the Company or a Restricted Subsidiary or
pay any Indebtedness owed to the Company, (II) to make any loans
or advances to the Company or (III) transfer any of its property
or assets to the Company, except: (aa) any encumbrance or
restriction pursuant to an agreement in effect at or entered into
on the date of issuance of the Notes; (bb) any encumbrance or
restriction with respect to a Restricted Subsidiary pursuant to
an agreement relating to any Indebtedness Incurred by such
Restricted Subsidiary which was entered into on or prior to the
date on which such Restricted Subsidiary was acquired by the
Company (other than as consideration in, or to provide all or any
portion of the funds or credit support utilized to consummate,
the transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Restricted Subsidiary
or was acquired by the Company) and outstanding on such date;
(cc) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an
agreement referred to in clause (aa) or (bb) of this covenant (or
effecting a Refinancing of such Refinancing Indebtedness pursuant
to this clause (cc)) or contained in any amendment to an
agreement referred to in clause (aa) or (bb) of this covenant or
this clause
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<PAGE>
(cc); provided, however, that the encumbrances and restrictions
with respect to such Restricted Subsidiary contained in any such
refinancing agreement or amendment are no more restrictive in any
material respect than the encumbrances and restrictions with
respect to such Restricted Subsidiary contained in such
agreements; (dd) any such encumbrance or restriction consisting
of customary contractual non-assignment provisions to the extent
such provisions restrict the transfer of rights, duties or
obligations under such contract; (ee) in the case of clause (III)
above, restrictions contained in security agreements or mortgages
securing Indebtedness of a Restricted Subsidiary to the extent
such restrictions restrict the transfer of the property subject
to such security agreements or mortgages; (ff) any restriction
with respect to a Restricted Subsidiary imposed pursuant to an
agreement entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted
Subsidiary pending the closing of such sale or disposition; and
(gg) any restriction imposed by applicable law.
(VIII) RESTRICTED AND UNRESTRICTED SUBSIDIARIES. The
Company will not permit any Restricted Subsidiary to be
designated as an Unrestricted Subsidiary unless the Company and
its Restricted Subsidiaries would thereafter be permitted to (A)
Incur at least $1.00 of Indebtedness under the first paragraph
of (m)(ii) above and (B) make a Restricted Payment of at least
$1.00 under paragraph (m)(iv) above.
The Company will not permit any Unrestricted Subsidiary to
be designated as a Restricted Subsidiary unless such Subsidiary
has outstanding no Indebtedness except such Indebtedness as the
Company could permit it to become liable for immediately after
becoming a Restricted Subsidiary under paragraph (m)(ii) above.
Promptly after the adoption of any Board Resolution
designating a Restricted Subsidiary as an Unrestricted Subsidiary
or an Unrestricted Subsidiary as a Restricted Subsidiary, a copy
thereof shall be filed with the Trustee, together with an
Officers' Certificate stating that the provisions of this
paragraph (m)(viii) have been
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<PAGE>
complied with in connection with such designation.
The Company will not permit Standard Pacific of Texas, Inc.
to be designated as an Unrestricted Subsidiary or permit the
assets of the Company or any Subsidiary employed in the
homebuilding operations to be transferred to an Unrestricted
Subsidiary, except in amounts permitted under paragraph (m)(iv)
above.
(IX) SUCCESSOR CORPORATION. The Company will not
consolidate with, merge into or transfer all or substantially all
of its assets to another person unless (i) such person (if other
than the Company) is a corporation organized under the laws of
the United States or any state thereof or the District of
Columbia and expressly assumes all the obligations of the Company
under the Indenture and the Notes; (ii) immediately after giving
effect to such transaction, no Default or Event of Default shall
have occurred and be continuing; (iii) the Consolidated Net Worth
of the obliger of the Notes immediately after giving effect to
such transaction (exclusive of any adjustments to Consolidated
Net Worth relating to transaction costs and accounting
adjustments resulting from such transaction) is not less than the
Consolidated Net Worth of the Company immediately prior to such
transaction; and (iv) the surviving corporation would be able to
Incur at least an additional $1.00 of Indebtedness pursuant to
the first paragraph of the covenant described under paragraph
(m)(ii).
(X) REPORTS TO HOLDERS OF THE NOTES. So long as the
Company is subject to the periodic reporting requirements of the
Exchange Act, it shall continue to furnish the information
required thereby to the SEC. Even if the Company is entitled
under the Exchange Act not to furnish such information to the SEC
or to the holders of the Notes, it will nonetheless continue to
furnish information under Section 13 or 15(d) of the Exchange Act
to the SEC and the Trustee as if it were subject to such periodic
reporting requirements.
(M) ADDITIONAL EVENTS OF DEFAULT. In addition to the Events of
Default specified in the Indenture, the following shall constitute
Events of Default under Section 6.01 of the Indenture with respect to
the Notes: (i) default under any mortgage, indenture (including the
Indenture) or instrument under which is
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issued or which secures or evidences Indebtedness of the Company or
any Restricted Subsidiary (other than Non-Recourse Indebtedness) which
default constitutes a failure to pay principal of such Indebtedness in
an amount of $20,000,000 or more when due and payable (other than as a
result of acceleration) or results in Indebtedness (other than Non-
Recourse Indebtedness) in the aggregate of $20,000,000 or more
becoming or being declared due and payable before it would otherwise
become due and payable, and (ii) entry of a final judgment for the
payment of money against the Company or any Restricted Subsidiary in
an amount of $5,000,000 or more which remains undischarged or unstayed
for a period of 60 days after the date on which the right to appeal
such judgment has expired or becomes subject to an enforcement
proceeding.
(N) CERTAIN DEFINITIONS. The following terms shall have the
meanings indicated for purposes of this Officers' Certificate. All
capitalized terms used in this Officers' Certificate and not otherwise
defined herein shall have the meanings set forth in the Indenture.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business; or (ii) the
Capital Stock of a person that becomes a Restricted Subsidiary as a
result of the acquisition of such Capital Stock by the Company or
another Restricted Subsidiary; provided, however, that any such
Restricted Subsidiary is primarily engaged in a Related Business. For
purposes of this definition, "Related Business" means any business
related, ancillary or complimentary (as defined in good faith by the
Board of Directors) to the business of the Company and the Restricted
Subsidiaries on the date of issuance of the Notes.
"Affiliate" of any specified person means any other person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person. For the purposes
of this definition, "control" when used with respect to any specified
person means the power to direct or cause the direction of the
management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or
other-wise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or
dispositions) by the
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Company or any Restricted Subsidiary, including any disposition by
means of a merger, consolidation or similar transaction (each referred
to for the purposes of this definition as a "disposition"), of (i) any
shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares and, to the extent required by local
ownership laws in foreign countries, shares owned by foreign
shareholders); (ii) all or substantially all the assets of any
division, business segment or comparable line of business of the
Company or any Restricted Subsidiary; or (iii) any other assets of the
Company or any Restricted Subsidiary having a fair market value (as
determined in good faith by the Board of Directors) in excess of
$250,000 disposed of in a single transaction or series of related
transactions outside of the ordinary course of business of the Company
or such Restricted Subsidiary (other than, in the case of (i), (ii)
and (iii) above, a disposition by a Restricted Subsidiary to the
Company or by the Company or a Restricted Subsidiary to a Wholly Owned
Subsidiary).
"Average Life" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (i) the
sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal
payment (assuming the exercise by the obligor of such Indebtedness of
all unconditional (other than as to the giving of notice) extension
options of each such scheduled payment date) of such Indebtedness
multiplied by the amount of such principal payment by (ii) the sum of
all such principal payments.
"Bank Credit Facility" means the Revolving Credit Facility and
any bank credit agreement or credit facility entered into in the
future by the Company or any Restricted Subsidiary, as any of the same
may be amended, waived, modified, refinanced or replaced from time to
time.
"Capitalized Lease Obligations" means any obligations under a
lease that is required to be capitalized for financial reporting
purposes in accordance with generally accepted accounting principles.
"Capital Stock" of any person means any and all shares,
interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) equity of
such person, including any Preferred Stock, but excluding any debt
securities convertible into such equity.
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"Change of Control" means the occurrence of any of the following
events:
(i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), is or becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that for purposes of this clause such person or
group shall be deemed to have "beneficial ownership" of all shares
that any such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50 percent of the total voting
power of the Voting Stock of the Company;
(ii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
(together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company was approved by a majority vote of the directors of the
Company then still in office who were either directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office; or
(iii) the merger or consolidation of the Company with or into
another person or the merger of another person with or into the
Company, or the sale of all or substantially all the assets of the
Company to another person, other than any such sale to one or more
Restricted Subsidiaries, and in the case of any such merger or
consolidation, the securities of the Company that are outstanding
immediately prior to such transaction and which represent 100 percent
of the aggregate voting power of the Voting Stock of the Company are
changed into or exchanged for cash, securities or property, unless
pursuant to such transaction such securities are changed into or
exchanged for, in addition to any other consideration, securities of
the surviving corporation, or a parent corporation that owns all of
the Capital Stock of such surviving corporation, that represent
immediately after such transaction, at least a majority of the
aggregate voting power of the Voting Stock of the surviving
corporation or such parent corporation, as the case may be.
"Consolidated Coverage Ratio" with respect to the Company as of
any date of determination means the ratio of the Company's EBITDA to
its Consolidated Interest
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Incurred for the four fiscal quarters ending immediately prior to the
date of determination. Notwithstanding clause (ii) of the definition
of Consolidated Net Income, if the Indebtedness which is being
Incurred is Incurred in connection with an acquisition by the Company
or a Restricted Subsidiary, the Consolidated Coverage Ratio shall be
determined after giving effect to both the Consolidated Interest
Incurred related to the Incurrence of such Indebtedness and the EBITDA
as if the acquisition had occurred at the beginning of the four fiscal
quarter period (x) of the person becoming a Restricted Subsidiary,or
(y) in the case of an acquisition of assets that constitute
substantially all of an operating unit or business, relating to the
assets being acquired by the Company or a Restricted Subsidiary.
"Consolidated Interest Expense" of the Company means, for any
period, the aggregate amount of interest which, in accordance with
generally accepted accounting principles as in effect on the date of
the issuance of the Notes, would be included on an income statement
for the Company and its Restricted Subsidiaries on a consolidated
basis, whether expensed directly, or included as a component of cost
of goods sold, or allocated to joint ventures or otherwise (including,
but not limited to, imputed interest included on Capitalized Lease
Obligations, all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance
financing, the net costs associated with Hedging Obligations,
amortization of other financing fees and expenses, the interest
portion of any deferred payment obligation, amortization of discount
or premium, if any, and all other non-cash interest expense),
excluding interest expense related to mortgage banking operations plus
the product of (i) cash dividends paid on any Preferred Stock of the
Company times (ii) a fraction, the numerator of which is one and the
denominator of which is one minus the then current effective aggregate
federal, state and local tax rate of the Company, expressed as a
decimal.
"Consolidated Interest Incurred" of the Company means, for any
period, (i) the aggregate amount of interest which, in accordance with
generally accepted accounting principles as in effect on the date of
the issuance of the Notes, would be included on an income statement
for the Company and its Restricted Subsidiaries on a consolidated
basis, whether expensed directly, or included as a component of cost
of goods sold, or allocated to joint ventures or otherwise (including,
but not limited to, imputed interest
23
<PAGE>
included on Capitalized Lease Obligations, all commissions, discounts
and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, the net costs associated with Hedging
Obligations, amortization of discount or premium, if any, and all
other non-cash interest expense), excluding interest expense related
to mortgage banking operations, plus or minus, without duplication;
(ii) the difference between capitalized interest for such period and
the interest component of cost of goods sold for such period; plus
(iii) the product of (A) cash dividends paid on any Preferred Stock of
the Company, times (B) a fraction, the numerator of which is one and
the denominator of which is one minus the then current effective
aggregate federal, state and local tax rate of the Company, expressed
as a decimal.
"Consolidated Net Income" for any period, means the aggregate of
the Net Income of the Company and its Restricted Subsidiaries for such
period on a consolidated basis determined in accordance with generally
accepted accounting principles as in effect on the date of the
issuance of the Notes, provided that (i) the Net Income of any person
in which the Company or any Restricted Subsidiary has, a joint
interest with a third party (other than an Unrestricted Subsidiary)
shall be included only to the extent of the lesser of (A) the amount
of dividends or distributions actually paid to the Company or a
Restricted Subsidiary or (B) the Company's direct or indirect
proportionate interest in the Net Income of such person, provided
that, so long as the Company or a Restricted Subsidiary has an
unqualified legal right to require the payment of a dividend or
distribution, Net Income shall be determined solely pursuant to clause
(B); (ii) the Net Income of any person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition shall be excluded; and (iii) the Net Income of any
Unrestricted Subsidiary shall be included only to the extent of the
amount of dividends or distributions (the fair value of which, if
other than in cash, to be determined by the Board of Directors, in
good faith) by such Subsidiary to the Company or to any of its
consolidated Restricted Subsidiaries; and (iv) the Net Income of any
Unrestricted Subsidiary, any Homebuilding Joint Venture or any other
person in which the Company or any Restricted Subsidiary has a joint
interest with a third party that is not existing on March 31, 1997
shall be included only to the extent that the aggregate amount of
dividends or distributions (the fair value of which, if other than
cash, to be determined by the Board of Directors, in good faith) by
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such Subsidiary or Homebuilding Joint Venture to the Company or to any
of its consolidated Restricted Subsidiaries exceeds the aggregate
amount of unpaid loans or advances and unreturned capital
contributions made by the Company or any Restricted Subsidiary in or
to such Subsidiary or Homebuilding Joint Venture.
"Consolidated Net Worth" of the Company means consolidated
stockholders' equity less any increase in stockholders' equity of each
of the Unrestricted Subsidiaries subsequent to June 30, 1997
attributable to the Company or any of its Restricted Subsidiaries, as
determined in accordance with generally accepted accounting principles
as in effect on the date of the issuance of the Notes.
"Consolidated Tangible Net Worth" with respect to the Company
means the consolidated stockholders' equity of the Company, as
determined in accordance with generally accepted accounting
principles, as in effect on the date of the issuance of the Notes,
less (i) that portion of any increase in each of the Unrestricted
Subsidiaries' stockholders' equity subsequent to June 30, 1997
attributable to the Company or any of its Restricted Subsidiaries, as
determined in accordance with generally accepted accounting
principles, as in effect on the date of the issuance of the Notes, and
(ii) the Intangible Assets of the Company and the Restricted
Subsidiaries. "Intangible Assets" means the amount (to the extent
reflected in determining consolidated stockholders' equity) of (A)
all write-ups (other than write-ups of tangible assets of a going
concern business made within twelve months after the acquisition of
such business) in the book value of any asset owned by the Company or
any Restricted Subsidiary, and (B) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other
like intangibles.
"Disqualified Stock" means, with respect to any person, any
Capital Stock which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable) or upon the
happening of any event (i) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise; (ii) is
convertible or exchangeable, at the option of the holder thereof, for
Indebtedness or Disqualified Stock; or (iii) is redeemable at the
option of the holder thereof, in whole or in part, in each case on or
prior to June 15, 2008. Notwithstanding the foregoing, "Disqualified
Stock" shall not include Capital Stock which is redeemable solely
pursuant to a change in control provision that does not (A) cause such
Capital
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Stock to become redeemable in circumstances which would not constitute
a Change of Control and (B) require the Company to pay the redemption
price therefor prior to the repurchase date specified under "Change of
Control" above.
"EBITDA" of the Company for any period means the sum of
Consolidated Net Income plus Consolidated Interest Expense plus,
without duplication, the following to the extent deducted in
calculating such Consolidated Net Income: (i) income tax expense,
(ii) depreciation expense, (iii) amortization expense and (iv) all
other non-cash items reducing Consolidated Net Income (other than
items that will require cash payments in the future and for which an
accrual or reserve is, or is required by generally accepted accounting
principals as in effect on the date of issuance of the Notes to be,
made), less all non-cash items increasing Consolidated Net Income, in
each case for such period. Notwithstanding the foregoing, the
provision for taxes based on the income or profits of, and the
depreciation and amortization of, a Subsidiary of the Company shall be
added to Consolidated Net Income to compute EBITDA only to the extent
(and in the same proportion) that the net income of such Subsidiary
was included in calculating Consolidated Net Income.
"Hedging Obligations" of any person means the net obligations of
such person pursuant to any Interest Rate Agreement or any foreign
exchange contract, currency swap agreement or other similar agreement
to which such person is a party or a beneficiary.
"Homebuilding Joint Venture" means (i) any Unrestricted
Subsidiary and (ii) any person in which the Company or any of its
Subsidiaries has an ownership interest but less than a 100% ownership
interest that, in each case, was formed for and is engaged in
homebuilding operations.
"Incur" means issue, assume, guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock
of a person existing at the time such person becomes a Subsidiary
(whether by merger, consolidation, acquisition or otherwise) shall be
deemed to be Incurred by such Subsidiary at the time it becomes a
Subsidiary; provided further, however, that in the case of a discount
security, neither the accrual of interest nor the accretion of
original issue discount shall be considered an Incurrence of
Indebtedness. The term "Incurrence" when used as a noun shall have a
correlative meaning.
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"Indebtedness" means on any date of determination (without
duplication), (i) the principal of and premium (if any) in respect of
(A) indebtedness of such person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which such person is responsible or
liable; (ii) all Capitalized Lease Obligations of such person; (iii)
all obligations of such person issued or assumed as the deferred
purchase price of property or services, all conditional sale
obligations of such person and all obligations of such person under
any title retention agreement (but excluding accounts payable and
accrued expenses arising in the ordinary course of business and which
are not more than 90 days past due and not in dispute) which would
appear as a liability on a balance sheet of a person prepared on a
consolidated basis in accordance with generally accepted accounting
principles, which purchase price or obligation is due more than six
months after the date of placing such property in service or taking
delivery and title thereto or the completion of such services
(provided that, in the case of obligations of an acquired person
assumed in connection with an acquisition of such person, such
obligations would constitute Indebtedness of such person); (iv) all
obligations of such person for the reimbursement of any obliger on any
letter of credit, banker's acceptance or similar credit transaction
(other than obligations with respect to letters of credit securing
obligations (other than obligations described in (i) through (iii)
above) entered into in the ordinary course of business of such person
to the extent such letters of credit are not drawn upon or, if and to
the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following receipt by such person of a demand for
reimbursement following payment on the letter of credit); (v) the
amount of all obligations of such person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock
or, with respect to any Subsidiary of such person, any Preferred Stock
(but excluding, in each case, any accrued dividends); (vi) all
obligations of the type referred to in clauses (i) through (v) of
other persons and all dividends of other persons for the payment of
which, in either case, such person is responsible or liable, directly
or indirectly, as obliger, guarantor or otherwise, including by means
of any guarantee; (vii) all obligations of the type referred to in
clauses (i) through (vi) of other persons secured by any lien on any
property or asset of such person (whether or not such obligation is
assumed by such person), the amount of such obligation being deemed to
be the lesser of the value of such property or assets
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or the amount of the obligation so secured; and (viii) to the extent
not otherwise included in this definition, Hedging Obligations of such
Person. The amount of Indebtedness of any person at any date shall be
the outstanding balance at such date of all unconditional obligations
as described above and the maximum liability, upon the occurrence of
the contingency, other than a contingency solely within the control of
such person, giving rise to the obligation, of any contingent
obligations as described above at such date; provided, however, that
the amount outstanding at any time of any Indebtedness issued with
original issue discount shall be deemed to be the face amount of such
Indebtedness less the remaining unamortized portion of the original
issue discount of such indebtedness at such time as determined in
conformity with generally accepted accounting principles.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement or other financial agreement or
arrangement designed to protect the Company or any Restricted
Subsidiary against fluctuations in interest rates.
"Investment" in any person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of
business that are recorded as accounts receivable on the balance sheet
of such person) or other extensions of credit (including by way of
guarantee or similar arrangement) or capital contribution to (by means
of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such person.
"Mortgage" means a first priority mortgage or first priority deed
of trust on improved real property.
"Net Income" of any person means the net income (loss) of such
person, determined in accordance with generally accepted accounting
principles, as in effect on the date of issuance of the Notes;
excluding, however, from the determination of Net Income all gains (to
the extent that they exceed all losses) realized upon the sale or
other disposition (including, without limitation, dispositions
pursuant to sale leaseback transactions) of any real property or
equipment of such person, which is not sold or otherwise disposed of
in the ordinary course of business, or of any capital stock of such
person or its subsidiaries owned by such person.
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"Net Proceeds" means with respect to any sale, assignment,
exchange, lease, transfer or other disposition of assets, the
consideration received by the Company (or a Restricted Subsidiary, as
the case may be) for such disposition after (a) provision for all
income and other taxes resulting from such asset disposition, (b)
payment of all brokerage commissions, underwriting, legal, accounting,
appraisal and other fees and expenses related to such asset sale and
(c) deduction of appropriate amounts to be provided by the Company or
a Restricted Subsidiary as a reserve, in accordance with generally
accepted accounting principles, against any liabilities associated
with the assets sold or disposed of in such asset disposition and
retained by the Company or a Restricted Subsidiary after such asset
sale, including, without limitation, pension and other post-employment
benefit liabilities and against any indemnification obligations
associated with the assets sold or disposed of in such asset sale.
"Non-Recourse Indebtedness" means Indebtedness or other
obligations secured by a lien on property to the extent that the
liability for such Indebtedness or other obligations is limited to the
security of the property without liability on the part of the Company
or any Subsidiary (other than the Subsidiary which holds title to such
property) for any deficiency.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, limited liability company,
limited liability partnership, trust, unincorporated organization, or
government or any agency or political subdivision thereof.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however
designated) which is preferred as to the payment of dividends, or as
to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such corporation, over shares of Capital
Stock of any other class of such corporation.
"Refinance" means, in respect of Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to
issue other Indebtedness in exchange or replacement for, such
Indebtedness.
"Refinancing" shall have a correlative meaning.
"Restricted Investment" means any loan, advance, capital
contribution or transfer (including by way of guaranty or other
similar arrangement) in or to any
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Unrestricted Subsidiary, Homebuilding Joint Venture or any person in
which the Company, directly or indirectly, has an ownership interest
but less than 100 percent ownership interest; provided, however, that
loans, advances, capital contributions or transfers (including by way
of guaranty or other similar arrangement) to a Homebuilding Joint
Venture shall be counted as a Restricted Investment only to the extent
that the aggregate at any one time outstanding of all such amounts
expended (or with respect to guaranties or similar arrangements the
amounts then guaranteed) exceed, subsequent to December 31, 1996, $20
million for any one Homebuilding Joint Venture or $60 million in the
aggregate for all Homebuilding Joint Ventures. Restricted Investment
shall include the fair market value of the net assets of any
Restricted Subsidiary that at any time is designated an Unrestricted
Subsidiary. Any property transferred to an Unrestricted Subsidiary,
and the net assets of a Restricted Subsidiary that is designated an
Unrestricted Subsidiary, shall be valued at fair market value at the
time of such transfer, in each case as determined by the Board of
Directors of the Company in good faith. The net assets of Panel
Concepts shall not be counted as a Restricted Investment if (i) a sale
of all or a portion of the Capital Stock of Panel Concepts causes
Panel Concepts to become an Unrestricted Subsidiary; (ii) at the time
of such sale, the net book value of the assets of Panel Concepts
represent less than 10 percent of the consolidated assets of the
Company and its Restricted Subsidiaries; and (iii) the net proceeds of
any such sale and any subsequent sale of the Capital Stock of Panel
Concepts to any person other than the Company or any Restricted
Subsidiary are paid or distributed to the Company or any Restricted
Subsidiary.
"Restricted Subsidiary" means any Wholly-Owned Subsidiary that
has not been designated an Unrestricted Subsidiary.
"Subsidiary" means a corporation, a majority of the capital stock
with voting power to elect directors of which is directly or
indirectly owned by the Company and its Subsidiaries, or any person in
which the Company and its Subsidiaries have at least a majority
ownership interest.
"Unrestricted Subsidiary" means (i) any Subsidiary in which the
Company, directly or indirectly, has less than a 100% ownership
interest; (ii) any Wholly Owned Subsidiary which in accordance with
paragraph (m)(viii) above has been designated in a resolution adopted
by
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the Board of Directors of the Company as an Unrestricted Subsidiary,
in each case unless and until such Subsidiary shall be designated as a
Restricted Subsidiary in accordance with paragraph (m)(viii) above;
and (iii) any Wholly-Owned Subsidiary a majority of the voting stock
of which shall at the time be owned directly or indirectly by one or
more Unrestricted Subsidiaries.
"Voting Stock", with respect to any person, means securities of
any class of Capital Stock of such person entitling the holders
thereof (whether at all times or only so long as no senior class of
stock has voting power by reason of any contingency) to vote in the
election of members of the board of directors of such person.
"Warehouse Facility" means a Bank Credit Facility to finance the
making of Mortgage loans originated by the Company or any of its
Subsidiaries.
"Wholly Owned Subsidiary" means a Subsidiary, all of the capital
stock (whether or not voting, but exclusive of directors' qualifying
shares) of which is owned by the Company or a Wholly-Owned Subsidiary.
Each of the undersigned, for himself, states that he has read and is
familiar with the provisions of Article Two of the Indenture relating to the
establishment of a series of Securities thereunder and the establishment of
forms of Securities representing a series of Securities thereunder and, in each
case, the definitions therein relating thereto; that he is generally familiar
with the other provisions of the Indenture and with the affairs of the Company
and its acts and proceedings and that the statements and opinions made by him in
this Officers' Certificate are based upon such familiarity; and that he has made
such examination or investigation as is necessary to enable him to determine
whether or not the covenants and conditions referred to above have been complied
with; and in his opinion, such covenants and conditions have been complied with.
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IN WITNESS WHEREOF, the undersigned has hereunto signed this
Certificate on behalf of the Company this 17th day of June, 1997.
STANDARD PACIFIC CORP.
By:_______________________________
Name: Stephen J. Scarborough
Title: President
By:_______________________________
Name: Andrew H. Parnes
Title: Vice President-Finance,
Treasurer and Chief
Financial Officer
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EXHIBIT A
No. R-1 STANDARD PACIFIC CORP. $100,000,000
CUSIP NO.: 85375C AB7
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR NOTES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER
THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK), A NEW YORK
CORPORATION, TO THE ISSUER OR ITS AGENT FOR THE REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. (OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
Standard Pacific Corp., a Delaware corporation, promises to pay to
Cede & Co., or registered assigns, the principal sum of One Hundred Million
Dollars ($100,000,000) on June 15, 2007.
8-1/2% SENIOR NOTE DUE 2007
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Dated: June 17, 1997
STANDARD PACIFIC CORP.
By:______________________________
Name:____________________________
Title:___________________________
[Corporate Seal]
Attest:
________________________________________
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Note is one of the Securities
referred to in the within
mentioned Indenture.
UNITED STATES TRUST COMPANY OF NEW YORK, as
Trustee
By:________________________________
Authorized Signatory
Exhibit A-1
<PAGE>
(REVERSE OF SECURITY)
STANDARD PACIFIC CORP.
8-1/2% SENIOR NOTE DUE 2007
1. Interest.
Standard Pacific Corp., a Delaware corporation (the "Company"), promises to
pay interest on the principal amount of this Note at the rate per annum shown
above. The Company will pay interest semiannually on June 15 and December 15 of
each year (the "Interest Payment Date"), commencing December 15, 1997. Interest
on the Note will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from June 17, 1997. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. Overdue
principal and, to the extent payment of such interest shall be legally
enforceable, overdue installments of interest shall bear interest at the rate
per annum shown above.
2. Method of Payment.
The Company will pay interest on the Notes (except default interest, which
shall be payable in the manner provided in Section 2.13 of the Indenture) to the
persons who are registered holders of Notes at the close of business on the June
1 or December 1 next preceding the Interest Payment Date (the "Record Date").
Holders must surrender Notes to a Paying Agent to collect principal payments.
The Company will pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts.
However, the Company may pay principal and interest by its check payable in such
money. It may mail an interest check to a Holder's registered address.
3. Paying Agent and Registrar.
Initially, United States Trust Company of New York (the "Trustee") will act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-registrar without notice. The Company or any of its
subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture.
The Company issued the Notes under an Indenture dated as of April 1, 1992
(the "Indenture") between the Company and the Trustee. The terms of the Notes
include those stated in the Indenture, those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)77aaa-77bbbb)
(the
Exhibit A-2
<PAGE>
"Act") as in effect on the date of the Indenture and as may be amended from time
to time, and those incorporated by reference into the Indenture pursuant to an
Officers' Certificate of the Company dated June 17, 1997 (the "Officers'
Certificate") delivered pursuant to Sections 2.01 and 2.03(a) of the Indenture.
The Notes are subject to and governed by all such terms, and holders of Notes
are referred to the Indenture, the Officers' Certificate and the Act for a
statement of them. All capitalized terms used in this Note and not otherwise
defined herein shall have the meanings set forth in the Indenture and the
Officers' Certificate. The Notes are general unsecured obligations of the
Company limited to the aggregate principal amount of $100,000,000.
5. Optional Redemption.
The Notes will not be redeemable at the option of the Company prior to June
15, 2002. Thereafter, the Notes will be redeemable, at the Company's option, in
whole or in part, at any time or from time to time, upon not less than 30 nor
more than 60 days' prior notice mailed by first-class mail to each Holder's
registered address, at the following redemption prices (expressed in percentages
of principal amount), plus accrued and unpaid interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on June 15 of the years set forth below:
Redemption
Year Price
---- ----------
2002......................................... 104.250%
2003......................................... 102.833%
2004......................................... 101.417%
2005 and thereafter.......................... 100.000%
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Notes to be redeemed at his
registered address. Notes in denominations larger than $1,000 may be redeemed
in part. On and after the redemption date interest ceases to accrue on Notes or
portions of them called for redemption.
Exhibit A-3
<PAGE>
7. Selection.
If less than all of the Notes are to be redeemed, the Trustee will select
the Notes to be redeemed on a pro rata basis, by lot or by such other method as
the Trustee in its sole discretion shall deem to be fair and appropriate.
8. Mandatory Repurchase Obligation.
If there is a Change of Control of the Company, the Holder of this Note
shall have the right to require the Company to repurchase all or a portion of
this Note at a purchase price equal to 101% of the principal amount hereof plus
accrued and unpaid interest, if any, to the date of repurchase, as provided in,
and subject to the terms of, the Indenture. In addition, under certain
circumstances, if the Company fails to maintain a certain specified minimum
Consolidated Net Worth or engages in certain asset sales, the Company shall be
required to offer to purchase a portion of the aggregate principal amount of
Notes outstanding together with accrued interest to the date of purchase, as
provided in, and subject to the terms of, the Indenture.
9. Denominations, Transfer, Exchange.
If the Notes are issued in global form, and this Note contains a legend on
the face hereof to such effect, the provisions of this Section 9 shall be deemed
superseded by such legend and Section 3(c) of the Officers Certificate, to the
extent the provisions of this Section 9 are inconsistent with such legend or
Section 3(c).
The Notes are issuable in registered form, without coupons, in
denominations of $1,000 and any amount in excess thereof which is an integral
multiple of $1,000. As provided in the Indenture and subject to certain
limitations therein set forth, Notes are exchangeable for a like aggregate
principal amount of Notes of like tenor of any authorized denomination, as
requested by the Holder surrendering the same, upon surrender of the Note or
Notes to be exchanged at any office or agency where Notes may be presented for
registration of transfer.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of Notes is registrable in the register of Notes upon
surrender of a Note for registration of transfer at the Corporate Trust Office
of the Trustee in the Borough of Manhattan, The City of New York, or at the
office of any transfer agent hereafter designated by the Company for such
purpose, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar duly executed by the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Notes of like tenor, of authorized denominations and for the same aggregate
principal amount will be issued to the designated transferee or transferees.
No service charge shall be made by the Company, the Trustee or the
Registrar for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax, assessment or other
governmental charge payable
Exhibit A-4
<PAGE>
in connection therewith (other than exchanges pursuant to Sections 2.11, 3.06 or
9.05 of the Indenture not involving any transfer).
10. Person Deemed Owner.
The registered holder of a Note may be treated as the owner of it for all
purposes.
11. Amendment, Waiver.
The Indenture permits, in certain circumstances therein specified, the
amendment thereof without the consent of the Holders of the Notes. The
Indenture also permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations under the
Indenture of the Company and the rights of Holders of the Notes at any time by
the Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Notes at the time Outstanding. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Notes at the time Outstanding, on behalf of the Holders
of all the Notes, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holders shall be conclusive and
binding upon the Holder of this Note and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Note.
12. Successor Corporation.
When a successor corporation assumes all the obligations of its predecessor
under the Notes and the Indenture, the predecessor corporation will be released
from those obligations.
Exhibit A-5
<PAGE>
13. Defaults and Remedies.
The following are Events of Default: (i) failure by the Company to pay
interest when due for 30 days or principal when due; (ii) failure by the Company
to perform any other covenant for 45 days after notice; (iii) default under any
mortgage, indenture (including the Indenture) or instrument under which is
issued or which secures or evidences Indebtedness of the Company or any
Restricted Subsidiary (other than Non-Recourse Indebtedness) which default
constitutes a failure to pay principal of such Indebtedness in an amount of
$20,000,000 or more when due and payable (other than as a result of
acceleration) or results in Indebtedness (other than Non-Recourse Indebtedness)
in the aggregate of $20,000,000 or more becoming or being declared due and
payable before it would otherwise become due and payable; (iv) entry of a final
judgment for the payment of money against the Company or any Restricted
Subsidiary in an amount of $5,000,000 or more which remains undischarged or
unstayed for a period of 60 days after the date on which the right to appeal
such judgment has expired or become subject to an enforcement proceeding; or (v)
certain events of bankruptcy, insolvency or reorganization.
In case an Event of Default (other than arising out of certain events of
bankruptcy, insolvency or reorganization) occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the Notes at the
time Outstanding, by notice in writing to the Company (and to the Trustee if
given by the Holders), may declare to be due and payable immediately that
portion of the principal amount of the Notes at the time Outstanding and accrued
interest to the date of acceleration and upon such declaration the same shall
become and be immediately due and payable. In case an Event of Default arising
out of certain events of bankruptcy, insolvency or reorganization occurs and is
continuing, the outstanding principal of and accrued interest on the Notes shall
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any of the Holders.
Such declaration or acceleration and its consequences may be rescinded by
Holders of a majority in principal amount of Notes at the time Outstanding if
all existing Events of Default have been cured or waived (except non-payment of
principal that has become due solely because of the acceleration) and if the
rescission would not conflict with any judgment or decree.
An existing Default (other than a default in payment of principal of or
interest on the Notes or default with respect to a provision which cannot be
modified under the terms of the Indenture without the consent of each Note
Holder affected) may be waived by the Holders of a majority in principal amount
of Notes at the time Outstanding upon the conditions provided in the Indenture.
Exhibit A-6
<PAGE>
14. Trustee Dealings with Company.
United States Trust Company of New York, the Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company or its Affiliates, with the same
rights it would have if it were not Trustee.
15. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder of a Note by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
16. Authentication.
This Security shall not be valid until the Trustee signs the certificate of
authentication on the other side of this Note.
Exhibit A-7
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT.......Custodian.........
(Cust.) (Minor)
TEN ENT - as tenants by the Under Uniform Gifts to Minors Act
entireties
JT TEN - as joint tenants with right
of survivorship and not as
tenants in common ............................
(State)
Additional abbreviations may also be used though not in the
above list.
________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or Employer
Identification Number of Assignee
__________________________________________
- -
__________________________________________
________________________________________________________________________________
Please Print or Typewrite Name and Address
Including Postal Zip Code of Assignee
________________________________________________________________________________
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
________________________________________________________________________________
attorney
to Transfer said Security on the books of the Company, with full power of
substitution in the premises.
Dated: _______________________ Signature ___________________________
NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within note in every particular, without
alteration or enlargement or any change whatever.
Exhibit A-8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased or redeemed by the
Company pursuant to the Indenture, check the box:
[_]
If you want to elect to have only part of this Security purchased by
the Company pursuant to paragraphs 3(j), 3(l)(i) or 3(l)(v) of the Officers'
Certificate adopted pursuant to Sections 2.01 and 2.03 of the Indenture, state
the amount.
$_____________
Date:_________________ Your Signature:_______________________________________
(Sign exactly as your name appears on
the other side of this Security)
Signature Guarantee:___________________________________________________________
NOTICE: Signature(s) must be guaranteed by a member firm of a major stock
exchange or a commercial bank or Trust company.
Exhibit A-9
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF GIBSON, DUNN & CRUTCHER LLP]
June 12, 1997
Standard Pacific Corp.
1565 West MacArthur Boulevard
Costa Mesa, CA 92626
Re: Standard Pacific Corp.
Ladies and Gentlemen:
We have acted as special counsel to Standard Pacific Corp., a Delaware
corporation (the "Company"), in connection with the issuance and sale by the
Company of $100,000,000 principal amount of its 8-1/2% Senior Notes due 2007
(the "Securities") pursuant to an Indenture, dated as of April 1, 1992 (the
"Indenture"), between the Company and United States Trust Company of New York,
as trustee (the "Trustee"). We have examined the Registration Statement on Form
S-3, File No. 33-45271 (the "Shelf Registration Statement"), of the Company and
the Registration Statement on Form S-3, File No. 333-29025 (the "462(b)
Registration Statement", and together with the Shelf Registration Statement, the
"Registration Statement"), filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), in connection with the public offering by the Company of the
Securities. The Securities are to be publicly offered and sold by Salomon
Brothers Inc, Dillon, Read & Co. Inc., Donaldson, Lufkin & Jenrette Securities
Corporation and BancAmerica Securities, Inc. (collectively, the "Underwriters").
The Securities will be acquired by the Underwriters pursuant to the terms of an
Underwriting Agreement (the "Underwriting Agreement"), dated June 12, 1997,
between the Company and the Underwriters.
<PAGE>
For the purposes of the opinions set forth below, we have examined and are
familiar with the proceedings taken and proposed to be taken by the Company in
connection with the issuance and sale of the Securities. In arriving at the
following opinions, we have relied, among other things, upon our examination of
such corporate records of the Company and certificates of officers of the
Company and of public officials and such other documents as we have deemed
appropriate. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such copies.
Based upon the foregoing examination and in reliance thereon, and subject
to the assumptions stated and relying on statements of fact contained in the
documents that we have examined and subject to the completion of the proceedings
to be taken by the Company, the Trustee and the Underwriters prior to the sale
of the Securities, it is our opinion that the Securities, when executed, issued,
delivered and paid for in accordance with the terms of Indenture and the
Underwriting Agreement (assuming due execution and delivery of the Indenture and
authentication of the Securities by the Trustee and payment for the Securities
by the Underwriters), will be validly issued and binding obligations of the
Company.
Our opinion is subject to (i) the effect of applicable bankruptcy,
insolvency, reorganization, moratorium, arrangement and other laws affecting
creditor's rights, including, without limitation, the effect of statutory or
other laws regarding fraudulent conveyances, fraudulent transfers and
preferential transfers; (ii) the limitations imposed by general principles of
equity (regardless of whether such enforceability is considered in a proceeding
at law or in equity); and (iii) our assumption that there exist no agreements,
understandings or negotiations among the parties to the Indenture or to the
Underwriting Agreement that would modify the terms of either thereof or the
respective rights or obligations of the parties thereunder.
We render no opinion herein as to matters involving the laws of any
jurisdiction other than the laws of the United States of America and the laws of
the State of New York. In rendering this opinion, we assume no obligation to
revise or supplement this opinion should current laws, or the interpretations
thereof, be changed.
<PAGE>
We consent to the filing of this opinion as an exhibit to the
Registration Statement and we further consent to the use of our name under the
caption "Legal Matters" in the Prospectus Supplement that forms a part of the
Registration Statement. In giving these consents, we do not thereby admit that
we are within the category of persons whose consent is required under Section 7
of the Securities Act or the rules and regulations promulgated by the Commission
under the Securities Act.
Very truly yours,
/s/ Gibson, Dunn and Crutcher LLP
GIBSON, DUNN AND CRUTCHER LLP
