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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) April 1, 1999
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Standard Pacific Corp.
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(Exact name of registrant as specified in charter)
Delaware 1-4785 86-0077724
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(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
1565 West MacArthur Blvd., Costa Mesa, California 92626
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (714) 668-4300
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Not applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
In September, 1998, 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. 333-64719), which was declared effective (as
amended by Post-Effective Amendment No. 1) on October 23, 1998. On April 14,
1999, the Company filed a Prospectus Supplement, dated April 13, 1999, and
accompanying Prospectus, dated October 23, 1998, relating to the offering of
$100,000,000 principal amount of the Company's 8 1/2% Senior Notes due 2009 (the
"Notes"). In this connection, the Company is filing certain exhibits as part of
this Form 8-K. See "Item 7. Exhibits."
Item 7. Exhibits.
(c) Exhibits:
The following exhibits are filed with this report on Form 8-K:
Exhibit No. Description
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1.1 Underwriting Agreement, dated April 13, 1999, by and among the
Company and the underwriters listed on the first page thereof
with respect to the issuance and sale of the Notes.
4.1 Indenture, dated as of April 1, 1999, by and between the
Company and The First National Bank of Chicago, as Trustee.
4.2 First Supplemental Indenture, dated as of April 13, 1999, by
and between the Company and The First National Bank of Chicago,
as Trustee, with Form of Note attached.
5.1 Opinion Letter of Gibson, Dunn & Crutcher LLP regarding the
validity of the Notes.
12.1 Statement re Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Gibson Dunn & Crutcher (included as part of Exhibit
5.1).
25.1 Statement of Eligibility of Trustee.
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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.
Date: April 15, 1999
STANDARD PACIFIC CORP.
By: /s/ Clay A. Halvorsen
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Clay A. Halvorsen
Vice President, General Counsel
and Secretary
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EXHIBIT INDEX
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Exhibit No. Description
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1.1 Underwriting Agreement, dated April 13, 1999, by and among the
Company and the underwriters listed on the first page thereof
with respect to the issuance and sale of the Notes.
4.1 Indenture, dated as of April 1, 1999, by and between the
Company and The First National Bank of Chicago, as Trustee.
4.2 First Supplemental Indenture, dated as of April 13, 1999, by
and between the Company and The First National Bank of Chicago,
as Trustee, with Form of Note attached.
5.1 Opinion Letter of Gibson, Dunn & Crutcher LLP regarding the
validity of the Notes.
12.1 Statement re Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Gibson Dunn & Crutcher (included as part of Exhibit
5.1).
25.1 Statement of Eligibility of Trustee.
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EXHIBIT 1.1
$100,000,000
STANDARD PACIFIC CORP.
8-1/2% Senior Notes due 2009
UNDERWRITING AGREEMENT
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April 13, 1999
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON SMITH BARNEY INC.
WARBURG DILLON READ LLC
JEFFERIES & COMPANY, INC.
As Underwriters
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
Standard Pacific Corp., a Delaware corporation (the "Company"), proposes to
issue and sell $100,000,000 principal amount of its 8-1/2% Senior Notes due
2009 (the "Securities") to the several underwriters named in Schedule I hereto
(the "Underwriters"). The Securities are to be issued pursuant to the
provisions of an Indenture to be dated as of April 1, 1999, as supplemented by a
First Supplemental Indenture dated as of April 13, 1999 (the "Indenture")
between the Company and The First National Bank of Chicago, as Trustee (the
"Trustee").
Section 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3, including a
prospectus, relating to the Securities. The registration statement, as amended
at the time it became effective, including the information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A
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under the Act, is hereinafter referred to as the "Registration Statement";
and the prospectus and prospectus supplement in the form first used to confirm
sales of Securities is hereinafter referred to as the "Prospectus" (including,
in the case of all references to the Registration Statement or the Prospectus,
documents incorporated therein by reference). The terms "supplement" and
"amendment" or "amend" as used in this Agreement with respect to the
Registration Statement or the Prospectus shall include all documents
subsequently filed by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Exchange Act") that are deemed to be
incorporated by reference in the Prospectus.
Section 2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell, and each Underwriter
agrees, severally and not jointly, to purchase from the Company the principal
amount of Securities set forth opposite the name of such Underwriter in
Schedule I hereto at 98.25% of the principal amount thereof (the "Purchase
Price").
Section 3. Terms of Public Offering. The Company is advised by you that
the Underwriters propose (i) to make a public offering of their respective
portions of the Securities as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Securities upon the terms set forth in the Prospectus.
Section 4. Delivery and Payment. The Securities shall be represented by a
definitive global security registered in the name of the nominee of The
Depository Trust Company ("DTC"). The Company shall deliver the Securities,
with any transfer taxes thereon duly paid by the Company, to Donaldson, Lufkin &
Jenrette Securities Corporation through the facilities of DTC , for the
respective accounts of the several Underwriters, against payment to the Company
of the Purchase Price therefore by wire transfer of Federal or other funds
immediately available in New York City. The certificate representing the
Securities shall be made available for inspection not later than 9:30 A.M., New
York City time, on the business day prior to the Closing Date (as defined
below), at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of delivery and payment for the Securities shall be
9:00 A.M., New York City time, on April 16, 1999 or such other time on the same
or such other date as the Underwriters and the Company shall agree in writing.
The time and date of such delivery and payment are hereinafter referred to as
the "Closing Date".
The documents to be delivered on the Closing Date on behalf of the parties
hereto pursuant to Section 8 of this Agreement shall be delivered at the offices
of O'Melveny & Myers LLP, 610 Newport Center Drive, Newport Beach, California
and the Securities shall be delivered at the Designated Office, all on the
Closing Date.
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Section 5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such advice
in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purposes, (iii) when any amendment to
the Registration Statement becomes effective, and (iv) of the happening of any
event during the period referred to in Section 5(d) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires any additions to or changes in the
Registration Statement or the Prospectus in order to make the statements therein
not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will use
its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish you five conformed copies of the Registration Statement as
first filed with the Commission and of each amendment to it, including all
exhibits and documents incorporated therein by reference, and to furnish to you
and each Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without exhibits
but including documents incorporated therein by reference, as you may reasonably
request.
(c) To prepare the Prospectus, the form and substance of which shall be
satisfactory to you, and to file the Prospectus in such form with the
Commission within the applicable period specified in Rule 424(b) under the Act;
during the period specified in Section 5(d) below, not to file any further
amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been advised
or to which you shall reasonably object after being so advised; and, during such
period, to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or amendment or supplement
to the Prospectus which may be necessary or advisable in connection with the
distribution of the Securities by you, and to use its best efforts to cause any
such amendment to the Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by the Act to be delivered in connection with sales by an Underwriter
or a dealer, to furnish in New York City to each Underwriter and any dealer as
many copies of
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the Prospectus (and of any amendment or supplement to the Prospectus and any
documents incorporated therein by reference) as such Underwriter or dealer may
reasonably request.
(e) If during the period specified in Section 5(d), any event shall occur
or condition shall exist as a result of which, in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare and file with the
Commission an appropriate amendment or supplement to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will not in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with applicable law, and to furnish to each
Underwriter and to any dealer as many copies thereof as such Underwriter or
dealer may reasonably request.
(f) Prior to any public offering of the Securities, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Securities for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such jurisdictions
as you may request, to continue such registration or qualification in effect so
long as required for distribution of the Securities and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Securities,
in any jurisdiction in which it is not now so subject.
(g) To make generally available to its security holders as soon as
practicable an earnings statement covering the twelve-month period ending March
31, 2000 that shall satisfy the provisions of Section 11(a) of the Act.
(h) So long as the Securities are outstanding, to furnish to you as soon as
available copies of all reports or other communications furnished to its
security holders or furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed
and such other publicly available information concerning the Company and its
subsidiaries as you may reasonably request.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
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expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's counsel
and the Company's accountants in connection with the registration and delivery
of the Securities under the Act and all other fees and expenses in connection
with the preparation, printing, filing and distribution of the Registration
Statement (including financial statements and exhibits), any preliminary
prospectus, the Prospectus and all amendments and supplements to any of the
foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii) all
expenses in connection with the registration or qualification of the Securities
for offer and sale under the securities or Blue Sky laws of the several states
and all costs of producing any Preliminary and Supplemental Blue Sky Memoranda
in connection therewith (including the filing fees and reasonable fees and
disbursements of counsel for the Underwriters in connection with such
registration or qualification and memoranda relating thereto), (v) the cost of
printing certificates representing the Securities, (vi) the costs and charges of
any transfer agent, registrar and/or depositary (including the Depository Trust
Company), (vii) any fees charged by rating agencies for the rating of the
Securities, (viii) the fees and expenses of the Trustee and the Trustee's
counsel in connection with the Indenture and the Securities and (ix) all other
costs and expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section.
(j) During the period beginning on the date hereof and continuing to and
including the Closing Date, not to offer, sell, contract to sell or otherwise
transfer or dispose of any debt securities of the Company or any warrants,
rights or options to purchase or otherwise acquire debt securities of the
Company substantially similar to the Securities (other than (i) the Securities
and (ii) commercial paper issued in the ordinary course of business), without
the prior written consent of the Donaldson, Lufkin & Jenrette Securities
Corporation.
(k) Not to voluntarily claim, and to actively resist any attempts to claim,
the benefit of any usury laws against the holders of the Securities.
(l) To use its reasonable best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Securities.
Section 6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective and no stop order
suspending the effectiveness of the Registration Statement is in effect, and, to
the
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best of the knowledge of the Company, no proceedings for such purpose are
pending before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act; (ii) the
Registration Statement, when it became effective, did not contain and, as
amended, if applicable, does not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (iii) the Registration Statement and
the Prospectus complied when filed and, as amended or supplemented, if
applicable, does comply in all material respects with the Act, and (iv) the
Prospectus, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) Each preliminary prospectus filed as part of the registration statement
as originally filed or as part of any amendment thereto, or filed pursuant to
Rule 424 under the Act, complied when so filed in all material respects with the
Act, and did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph do not apply to statements or omissions in any preliminary
prospectus based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein.
(d) As of the date of this Agreement, the Company has the authorized,
issued and outstanding equity capitalization as set forth under the heading
entitled "Actual" in the section of the Prospectus entitled "Capitalization"
and, as of the Closing Date, the Company shall have an authorized equity
capitalization as set forth under the heading entitled "As Adjusted" in the
section of the Prospectus entitled "Capitalization"; all of the outstanding
capital stock of the Company has been duly authorized and validly issued and is
fully paid and nonassessable and was not issued in violation of any preemptive
or similar rights.
(e) The Company owns all of the outstanding capital stock and other
securities evidencing equity ownership of its subsidiaries free and clear of any
pledge, fiduciary transfer, security interest, claim, lien, limitation on voting
rights or encumbrance, and all such securities have been duly authorized and
validly
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issued, fully paid and nonassessable and have not been issued in violation of,
or subject to, any preemptive or similar rights. There are no outstanding
rights, warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest of any
subsidiary (other than Homebuilding Joint Ventures).
(f) The Company and each of its subsidiaries has been duly incorporated, is
validly existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation and has all requisite corporate power
and authority to (a) carry on its business as it is currently being conducted
and as described in the Prospectus and (b) own, lease, license and operate its
respective properties in accordance with its business as currently conducted.
The Company and each of its subsidiaries is duly qualified and in good standing
as a foreign corporation authorized to do business in each jurisdiction in which
the nature of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect").
(g) The Company has all requisite corporate power and authority to execute,
deliver and perform all of its obligations under, and to consummate the
transactions contemplated by this Agreement, the Securities and the Indenture
(collectively, the "Operative Documents") and, without limitation, the Company
has all requisite corporate power and authority to issue, sell and deliver the
Securities.
(h) This Agreement has been duly and validly authorized, executed and
delivered by the Company.
(i) The Indenture has been duly and validly authorized by the Company, has
been executed and delivered by the Company and is a legal, valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except that enforceability of the Indenture may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general principles of equity and the
discretion of the court before which any proceedings therefor may be brought.
The Indenture conforms in all material respects to the description thereof in
the Prospectus. The Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act").
(j) The Securities have been duly and validly authorized for issuance and
sale to the Underwriters by the Company and, when issued, authenticated and
delivered by the Company against payment by the Underwriters in accordance with
the terms of this Agreement and the Indenture, the Securities will be legal,
valid and binding obligations of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their terms,
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except that enforceability of the Securities may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general principles of equity and the
discretion of the court before which any proceedings therefor may be brought.
The Securities, when issued, authenticated and delivered, will conform in all
material respects to the description thereof in the Prospectus.
(k) None of the Company or its subsidiaries is (A) in violation of its
charter, bylaws or other organizational document or (B) in default (or, with
notice or lapse of time or both, would be in default) in the performance or
observance of any obligation, agreement, covenant or condition contained in any
bond, debenture, note, indenture, mortgage, deed of trust, loan agreement,
lease, license, franchise agreement, authorization, permit, certificate or other
agreement or instrument to which any of them is a party or by which any of them
is bound or to which any of their assets or properties is subject, or (C) in
violation of any law, statute, rule, regulation, judgment, order or decree of
any domestic or foreign court with jurisdiction over any of them or any of their
assets or properties or other governmental or regulatory authority, agency or
other body, that, in the case of clauses (B) and (C) above, would, either
individually or in the aggregate, result in a Material Adverse Effect. There
exists no condition that, with notice or lapse of time or both, would constitute
a default by the Company or any of its subsidiaries under any such document or
instrument or result in the imposition of any penalty or the acceleration of any
indebtedness, other than penalties, defaults or conditions that would not,
either individually or in the aggregate, result in a Material Adverse Effect.
(l) The execution, delivery or performance by the Company of this Agreement
and each of the other Operative Documents does not violate, conflict with or
constitute a breach of any of the terms or provisions of, or a default under (or
an event that with notice or the lapse of time, or both, would constitute a
default), or require consent (except such consents as have been or will be
obtained prior to the Closing) under, or result in the creation or imposition of
a lien, charge or encumbrance on any property or assets of the Company or any of
its subsidiaries pursuant to, (i) the charter, bylaws or other organizational
documents of the Company or any of its subsidiaries, (ii) any bond, debenture,
note, indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, (iii)
any law, statute, rule or regulation applicable to the Company or any of its
subsidiaries or their assets or properties or (iv) any judgment, order or decree
of any domestic or foreign court or governmental agency or authority having
jurisdiction over the Company or any of its subsidiaries or their assets or
properties. No consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, any court or
governmental agency, body or administrative
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agency, domestic or foreign, is required to be obtained or made by the Company
for the execution, delivery and performance of this Agreement or any of the
other Operative Documents or any of the transactions contemplated thereby,
except (i) such as have been or will be obtained or made prior to Closing, (ii)
such as may be required by the NASD or (iii) such as may be required by the
securities or blue sky laws of the various states. No consents or waivers from
any other person or entity are required for the execution, delivery and
performance of this Agreement or any of the other Operative Documents or any of
the transactions contemplated hereby or thereby, except such as have been or
will be obtained or made prior to closing.
(m) There is (i) except as set forth in the Prospectus, no action, suit or
proceeding before or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, now pending or, to the knowledge of the Company
or its subsidiaries, threatened or contemplated, to which the Company or any of
its subsidiaries is or may be a party or to which the business, assets or
property of such person is or may be subject, (ii) except as set forth in the
Prospectus, no statute, rule, regulation or order that has been enacted, adopted
or issued or, to the knowledge of the Company or its subsidiaries, that has been
proposed by any governmental body or agency, domestic or foreign, (iii) no
injunction, restraining order or order of any nature by a federal or state court
or foreign court of competent jurisdiction to which the Company or any of its
subsidiaries is or may be subject that (x) in the case of clause (i) above, is
reasonably likely to, either individually or in the aggregate, (1) result in a
Material Adverse Effect, or (2) interfere with or adversely affect the issuance
of the Securities in any jurisdiction or adversely affect the consummation of
the transactions contemplated by any of the Operative Documents, and (y) in the
case of clauses (ii) and (iii) above, would, either individually or in the
aggregate, (1) result in a Material Adverse Effect, or (2) interfere with or
adversely affect the issuance of the Securities in any jurisdiction or adversely
affect the consummation of the transactions contemplated by any of the Operative
Documents. Every request of any securities authority or agency of any
jurisdiction for additional information with respect to Securities that has been
received by the Company or its counsel prior to the date hereof has been, or
will prior to the Closing Date be, complied with.
(n) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the actual knowledge of the Company is imminent that
might reasonably be expected to result in a Material Adverse Effect; the Company
and its subsidiaries are in compliance in all respects with, as applicable and
except where a failure to so comply would not have a Material Adverse Effect,
all presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no unwaivable "reportable event" (as defined in ERISA) has
occurred with respect to any "employee pension benefit plan" (as defined in
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ERISA) for which the Company or its subsidiaries would have any liability; none
of the Company or its subsidiaries has incurred or expects to incur liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal from,
any "employee pension benefit plan" or (ii) Sections 412, 4971 or 4975 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "employee pension
benefit plan" that is maintained or contributed to by the Company or its
subsidiaries that is intended to be qualified under Section 401(a) of the Code
has received a determination letter from the Internal Revenue Service to that
effect and nothing has occurred, whether by action or by failure to act, that
would result in the revocation of such determination letter.
(o) Except as set forth in the Prospectus, the Company and each of its
subsidiaries (i) is in compliance with, and not subject to costs or liabilities
under, any and all local, state, provincial, federal and foreign laws,
regulations, rules of common law, orders and decrees, as in effect as of the
date hereof, and any presently effective judgments, decrees, orders and
injunctions issued or promulgated thereunder, in each case, relating to
pollution or protection of public and employee health and safety and the
environment applicable to it or its business or operations or ownership or use
of its property ("Environmental Laws"), other than such noncompliance or costs
or liabilities that would not, either individually or in the aggregate, result
in a Material Adverse Effect, and (ii) possesses all permits, licenses or other
approvals required under applicable Environmental Laws and has no reason to
believe all such permits, licenses and other approvals to expire within the next
five years will not be renewed or otherwise extended or reissued in due course,
in each case, other than such permits, licenses or approvals the lack of which
would not, either individually or in the aggregate, result in a Material Adverse
Effect. All currently pending and, to their knowledge, threatened proceedings,
notices of violation, demands, notices of potential responsibility or liability,
suits and existing environmental conditions with respect to which the Company or
its subsidiaries could reasonably be expected to have any liability are fully
and accurately described in all material respects in the Prospectus except as
would not, either individually or in the aggregate, result in a Material Adverse
Effect.
(p) The Company and each of its subsidiaries has (i) good and marketable
title to all of the properties and assets described in the Prospectus as owned
by it and good and marketable title to the leasehold estates in the real and
personal property described in the Prospectus as leased by it, free and clear of
all Liens (as defined in the Indenture), except for Liens described in the
Prospectus, Liens permitted under the Indenture and such Liens as would not,
either individually or in the aggregate, result in a Material Adverse Effect,
(ii) all licenses, certificates, permits, authorizations, approvals, franchises
and other rights from, and has made all declarations and filings with, all
federal, state, local and foreign authorities, all self-regulatory authorities
and all courts and other tribunals (each, an
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"Authorization") to (a) carry on its business as it is currently being conducted
and as described in the Prospectus and (b) own, lease, license and operate its
respective properties in accordance with its business as currently conducted,
except for such Authorization the failure to maintain would not, either
individually or in the aggregate, result in a Material Adverse Effect and (iii)
no reason to believe that any governmental body or agency, domestic or foreign,
is considering limiting, suspending or revoking any such Authorization. Except
where the failure to be in full force and effect and in compliance would not,
either individually or in the aggregate, result in a Material Adverse Effect,
all such Authorizations are valid and in full force and effect and the Company
and each of its subsidiaries is in compliance with the terms and conditions of
all such Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect to such Authorizations. All leases
to which the Company or any of its subsidiaries is a party are valid and
binding, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity and the
discretion of the court before which any proceedings therefor may be brought and
no default by the Company or any of its subsidiaries or, to the knowledge of the
Company, any other party thereto has occurred and is continuing thereunder,
other than defaults that would not, either individually or in the aggregate,
result in a Material Adverse Effect.
(q) The Company and each of its subsidiaries owns, possesses or has the
right to employ all patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names (collectively, the "Intellectual Property")
material to the conduct of the businesses operated by it as described in the
Prospectus. The Company has not received any notice of infringement of or
conflict with (and neither knows of any such infringement or a conflict with)
asserted rights of others with respect to any of the foregoing that, if such
assertion of infringement or conflict were sustained, would result in a Material
Adverse Effect. The use of the Intellectual Property in connection with the
business and operations of the Company and its subsidiaries does not infringe on
the rights of any person, except for any infringements that would not result in
a Material Adverse Effect.
(r) All tax returns required to be filed by the Company and each of its
subsidiaries have been filed (or extensions have been obtained) in all
jurisdictions where such returns are required to be filed, other than such
returns the failure of which to file would not have a Material Adverse Effect;
and all taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due or claimed to be due from such entities or that are
due and payable have been paid, other than those being contested in good faith
and for which reserves have been provided in accordance with generally accepted
accounting principles, those
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currently payable without penalty or interest and those the failure of which to
pay would not have a Material Adverse Effect. To the knowledge of the Company
there are no material proposed additional tax assessments against any of them or
their subsidiaries or their assets or property.
(s) None of the Company or its subsidiaries is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), or
analogous foreign laws and regulations.
(t) The Company and each of its subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable assurance that: (A)
transactions are executed in accordance with management's general or specific
authorizations; (B) transactions are recorded as necessary to permit preparation
of its financial statements in conformity with United States generally accepted
accounting principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for its assets is compared
with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(u) The Company and each of its subsidiaries maintains insurance covering
its properties, assets, operations, personnel and businesses, and such insurance
is of such type and in such amounts in accordance with customary industry
practice to protect the Company and its subsidiaries and their businesses. The
Company has not received notice from any insurer or agent of such insurer that
any material capital improvements or other material expenditures will have to be
made in order to continue any insurance maintained by any of them other than
capital improvements and other expenditures that have been budgeted by the
Company or its subsidiaries, as the case may be.
(v) The accountants who have certified the audited financial statements
included as part of or incorporated by reference in the Prospectus are
independent accountants within the meaning of the Act. The historical financial
statements of the Company comply as to form in all material respects with the
requirements applicable to registration statements on Form S-3 under the Act and
present fairly in all material respects the consolidated financial position and
results of operations of the Company at the respective dates and for the
respective periods indicated. Such financial statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods presented (except as disclosed in the Prospectus)
and comply as to form with the rules and regulations promulgated under the Act.
All other financial and statistical information and data included or
incorporated by reference in the Prospectus are accurately presented in all
material respects and
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prepared on a basis consistent with the financial statements and the books and
records of the Company and its subsidiaries.
(w) The statistical and market-related data included in the Prospectus are
based on or derived from sources that the Company believes to be reliable and
accurate.
(x) No forward-looking statement (within the meaning of Section 27A of the
Act and Section 21E of the Exchange Act) contained in the Prospectus has been
made or reaffirmed without a reasonable basis or has been disclosed other than
in good faith.
(y) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
include any securities of the Company with the Securities registered pursuant to
the Registration Statement.
(z) Except as noted in the press release by Standard & Poor's Corporation
dated February 25, 1999 (the "Press Release"), no "nationally recognized
statistical rating organization" as such term is defined for purposes of Rule
436(g)(2) under the Act has indicated to the Company that it is considering (i)
the downgrading, suspension or withdrawal of, or any review for a possible
change that does not indicate the direction of the possible change in, any
rating assigned to the Company or any securities of the Company or (ii) any
change in the outlook for any rating of the Company or any securities of the
Company.
(aa) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change or any development involving
a prospective material adverse change in the condition, financial or otherwise,
or the earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of its subsidiaries
and (iii) other than in the ordinary course of business, neither the Company nor
any of its subsidiaries has incurred any material liability or obligation,
direct or contingent.
(bb) Each certificate signed by any officer of the Company and delivered to
the Underwriters or counsel for the Underwriters pursuant to, or in connection
with, this Agreement shall be deemed to be a representation and warranty by the
Company to the Underwriters as to the matters covered by such certificate.
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Section 7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter, its
directors, its officers and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by such Underwriter
through you expressly for use therein; provided, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter or any director or officer of, or person
controlling, such Underwriter who failed to deliver a Prospectus, as then
amended or supplemented, (so long as the Prospectus and any amendment or
supplemented thereto was provided by the Company to the several Underwriters in
the requisite quantity and on a timely basis to permit proper delivery on or
prior to the Closing Date) to the person asserting any losses, claims, damages,
liabilities or judgements caused by any untrue statement or alleged untrue
statement of a material fact contained in the preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
omission was cured in the Prospectus, as so amended or supplemented, and such
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to such Underwriter but only with
reference to information relating to such Underwriter furnished in writing to
the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.
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(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 7(a) and 7(b), the Underwriter shall not be required to assume
the defense of such action pursuant to this Section 7(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
such Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such separate firm shall be
designated in writing by Donaldson, Lufkin & Jenrette Securities Corporation, in
the case of parties indemnified pursuant to Section 7(a), and by the Company, in
the case of parties indemnified pursuant to Section 7(b). The indemnifying party
shall indemnify and hold harmless the indemnified party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into more than 60 days
after the indemnifying party shall have received a request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the expense of the indemnifying party), and, prior
to the date of such settlement, the indemnifying party shall have failed to
comply with such reimbursement request and such indemnified party shall have, on
or after such 60th day, given the indemnifying party at least 30 additional
days' notice that the indemnified party is entitled to settle such action. No
indemnifying party shall, without the prior written consent of the indemnified
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party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 7 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities or (ii) if the allocation provided by clause 7(d)(i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions but before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Securities, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall
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be deemed to include, subject to the limitations set forth above, any legal or
other expenses incurred by such indemnified party in connection with
investigating or defending any matter, including any action, that could have
given rise to such losses, claims, damages, liabilities or judgments.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. 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. The Underwriters' obligations to contribute
pursuant to this Section 7(d) are several in proportion to the respective
principal amount of Securities purchased by each of the Underwriters hereunder
and not joint.
(e) The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
Section 8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Securities under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in this
Agreement shall be true and correct on the Closing Date with the same force and
effect as if made on and as of the Closing Date.
(b) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending before or contemplated by the Commission.
(c) On or after the date hereof, except as set forth in the Press Release,
(i) there shall not have occurred any downgrading, suspension or withdrawal of,
nor shall any notice have been given of any potential or intended downgrading,
suspension or withdrawal of, or of any review (or of any potential or intended
review) for a possible change that does not indicate the direction of the
possible change in, any rating of the Company or any securities of the Company
(including, without limitation, the placing of any of the foregoing ratings on
credit watch with negative or developing implications or under review with an
uncertain direction) by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Act, (ii) there shall not have occurred any change with negative or uncertain
implications, nor shall any notice have been given of any potential or intended
change with negative or uncertain implications, in the outlook for any rating of
the Company or any securities of the Company by any such rating organization and
(iii) no such rating
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organization shall have given notice to the Company that it has assigned (or is
considering assigning) a lower rating to the Securities than that existing on
the date of this Agreement.
(d) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by Andrew H. Parnes and Clay A. Halvorsen, in their
capacities as the Vice President -- Finance, Treasurer and Chief Financial
Officer and Vice President, General Counsel and Secretary of the Company,
confirming the matters set forth in Sections 6(aa), 8(a), 8(b) and 8(c) and that
the Company has complied with all of the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied by the
Company on or prior to the Closing Date.
(e) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) other than in the ordinary course
of business, neither the Company nor any of its subsidiaries shall have incurred
any liability or obligation, direct or contingent, the effect of which, in any
such case described in clause 8(e)(i), 8(e)(ii) or 8(e)(iii), in your judgment,
is material and adverse and, in your judgment, makes it impracticable to market
the Securities on the terms and in the manner contemplated in the Prospectus.
(f) (1) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Gibson, Dunn & Crutcher LLP, counsel for the Company, to the effect that:
(i) the Company and each of Standard Pacific of Texas, Inc., Standard
Pacific of Orange County, Inc., Standard Pacific of Fullerton, Inc., Family
Lending Services, Inc., and Standard Pacific of Arizona, Inc. (together,
the "Material Subsidiaries") have been duly organized and are validly
existing as corporations;
(ii) the Indenture and the Securities conform in all material respects
to the descriptions thereof in the Prospectus;
(iii) 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;
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(iv) 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);
(v) 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 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;
(vi) 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 other
Operative Documents and the consummation of the 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) violate any statute, rule
or regulation known to such counsel and applicable to the Company or any of
the Material Subsidiaries;
(vii) the Registration Statement has become effective under the Act,
no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are, to the best of such counsel's knowledge
after due inquiry, pending before or contemplated by the Commission;
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(viii) the statements under the caption "Description of Notes" in the
prospectus supplement constituting part of the Prospectus and the caption
"Description of Debt Securities," in the base prospectus constituting part
of the Prospectus, insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters, documents
and proceedings;
(ix) The Company is not or, after giving effect to the offering and
sale of the Securities and the application of the net proceeds thereof as
described in the Prospectus, will not be, an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended;
(x) the Indenture complies as to form in all material respects with
the requirements of the Trust Indenture Act, and the rules and regulations
of the Commission applicable to an indenture which is qualified thereunder;
(xi) (A) each document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus (except for financial
statements and other financial data included therein as to which no opinion
need be expressed) complied when so filed as to form with the Exchange Act,
(B) the Registration Statement and the Prospectus and any supplement or
amendment thereto (except for the financial statements and other financial
data included therein as to which no opinion need be expressed) comply as
to form with the Act, (C) nothing has come to the attention of such counsel
which causes them to believe that at March 26, 1999, the Registration
Statement and the base prospectus included therein (except for the
financial statements and other financial data as to which such counsel need
not express any belief and except for that part of the Registration
Statement that constitutes the Statement of Eligibility (Form T-1) under
the Trust Indenture Act) contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (D) nothing has
come to the attention of such counsel which causes them to believe that the
Prospectus, as amended or supplemented, if applicable (except for the
financial statements and other financial data, as aforesaid), as of its
date or the date of such opinion, contained or contains 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.
The opinion of Gibson, Dunn & Crutcher LLP described in Section 8(f)(1)
above shall be rendered to you at the request of the Company and shall so state
therein.
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(2) You shall have received on the Closing Date an opinion (satisfactory to
you and counsel for the Underwriters), dated the Closing Date, of Clay A.
Halvorsen, Esq., General Counsel of the Company, to the effect that:
(i) the Company and each of the Material Subsidiaries 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, 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) to the best knowledge of such counsel, the issued shares of the
capital stock of each of the Material Subsidiaries are owned beneficially
by the Company free and clear of any other security interests, liens,
encumbrances, equities or claims;
(iii) the Company and each of the Material Subsidiaries have the
corporate power to own or lease their respective properties and conduct
their respective businesses as described in the Prospectus, and the Company
has the corporate power to enter into this Agreement and to carry out all
the terms and provisions thereof to be carried out by it;
(iv) the Company's authorized equity capitalization is as set forth in
the Prospectus, and the issued shares of capital stock of each of the
Material Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable, and are owned of record by the Company;
(v) 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;
(vi) 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
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 Prospectus that is not
described therein as required;
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(vii) 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 other
Operative Documents and the consummation of the other transactions herein
and therein contemplated do not (A) 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 to which the Company or any of its Material Subsidiaries is a
party or by which the Company or any of its Material Subsidiaries or any of
their respective properties are bound, which is identified in the Officers'
Certificate as being material to the business of the Company, or any
judgment, decree or order of any court or other governmental authority or
any arbitrator known to such counsel and applicable to the Company or any
of the Material Subsidiaries, or (B) conflict with or result in a breach or
violation of the charter documents or by-laws of the Company or any of its
Material Subsidiaries;
(viii) to such counsel's knowledge, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company or to
require the Company to include such securities with the Securities
registered pursuant to any Registration Statement; and
(ix) (A) nothing has come to the attention of such counsel which
causes him to believe that at March 26, 1999, the Registration Statement
and the base prospectus included therein (except for the financial
statements and other financial data as to which such counsel need not
express any belief and except for that part of the Registration Statement
that constitutes the Statement of Eligibility (Form T-1) under the Trust
Indenture Act) contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading and (B) nothing has come to the
attention of such counsel which causes him to believe that the Prospectus,
as amended or supplemented, if applicable (except for the financial
statements and other financial data, as aforesaid), as of its date or the
date of such opinion, contained or contains 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.
The opinion of Clay A. Halvorsen, Esq. described in Section 8(f)(2) above
shall be rendered to you at the request of the Company and shall so state
therein.
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(g) You shall have received on the Closing Date an opinion, dated the
Closing Date, of O'Melveny & Myers LLP, counsel for the Underwriters, as to such
matters as are customarily covered in such opinions.
(h) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from Arthur Andersen LLP, independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information contained
in or incorporated by reference into the Registration Statement and the
Prospectus.
(i) [Intentionally omitted.]
(j) The Securities shall have been rated "BB" by Standard & Poor's
Corporation and "Ba2" by Moody's Investors Service, Inc.
(k) The Underwriters shall have received a counterpart, conformed as
executed, of the Indenture which shall have been entered into by the Company and
the Trustee.
(l) The Company shall not have failed on or prior to the Closing Date to
perform or comply with any of the agreements herein contained and required to be
performed or complied with by the Company on or prior to the Closing Date.
Section 9. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Company if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus, (ii)
the suspension or material limitation of trading in securities or other
instruments on the New York Stock Exchange, the Pacific Stock Exchange or the
Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the
23
<PAGE>
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
If on the Closing Date any one or more of the Underwriters shall fail or
refuse to purchase the Securities which it or they have agreed to purchase
hereunder on such date and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date by all Underwriters, each non-defaulting
Underwriter shall be obligated severally, in the proportion which the principal
amount of Securities set forth opposite its name in Schedule I bears to the
aggregate principal amount of Securities which all the non-defaulting
Underwriters have agreed to purchase, or in such other proportion as you may
specify, to purchase the Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the aggregate principal amount of Securities which any
Underwriter has agreed to purchase pursuant to Section 2 hereof be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such principal
amount of Securities without the written consent of such Underwriter. If on the
Closing Date any Underwriter or Underwriters shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased by all Underwriters and arrangements
satisfactory to you and the Company for purchase of such Securities are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter and the Company. In
any such case which does not result in termination of this Agreement, either you
or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
any such Underwriter under this Agreement.
Section 10. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to Standard
Pacific Corp., 1565 West MacArthur Boulevard, Costa Mesa, California, 92626,
Attention: Corporate Secretary and (ii) if to any Underwriter or to you, to you
c/o Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New
York, New York 10172, Attention: Syndicate Department, or in any case to such
other address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
24
<PAGE>
warranties and other statements of the Company and the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Securities,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the officers or directors of any
Underwriter, any person controlling any Underwriter, the Company, the officers
or directors of the Company or any person controlling the Company, (ii)
acceptance of the Securities and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Securities are not delivered by or on behalf of the
Company as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 9), the Company agrees to reimburse the several
Underwriters for all out-of-pocket expenses (including the reasonable fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(i) hereof. The Company agrees to reimburse the
several Underwriters, their directors and officers and any persons controlling
any of the Underwriters, and the Underwriters agree to reimburse the Company,
its directors, its officers who sign the Registration Statement and any person
who controls the Company, in each case for any and all fees and expenses
(including, without limitation, the reasonable fees disbursements of counsel)
incurred by them in connection with enforcing their rights hereunder (including,
without limitation, pursuant to Section 7 hereof).
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Underwriters, the
Underwriters' directors and officers, any controlling persons referred to
herein, the Company's directors and the Company's officers who sign the
Registration Statement and their respective successors and assigns, all as and
to the extent provided in this Agreement, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Securities from any of the
several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
The term "subsidiary" as used in this Agreement 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 or any of its subsidiaries, or any
person in which the Company and its subsidiaries have at least a majority
ownership interest.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
25
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
STANDARD PACIFIC CORP.
By: /s/ Andrew H. Parnes
-----------------------------
Title: Vice President-Finance
Treasurer and Chief
Financial Officer
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON SMITH BARNEY INC.
WARBURG DILLON READ LLC
JEFFERIES & COMPANY, INC.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Eric A. Anderson
-------------------------
26
<PAGE>
SCHEDULE I
----------
<TABLE>
<CAPTION>
Principal Amount of
Securities
Underwriters to be Purchased
- ------------ -------------------
<S> <C>
Donaldson, Lufkin & Jenrette Securities $ 45,000,000
Corporation........................................
Salomon Smith Barney Inc.............................. 25,000,000
Warburg Dillon Read LLC............................... 25,000,000
Jefferies & Company, Inc.............................. 5,000,000
------------
Total: $100,000,000
</TABLE>
27
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
STANDARD PACIFIC CORP.
Senior Debt Securities
Indenture
Dated as of April 1, 1999
The First National Bank of Chicago, Trustee
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE..................... 1
Section 1.01. Definitions............................................. 1
Section 1.02. Other Definitions....................................... 6
Section 1.03. Incorporation by Reference of Trust Indenture Act....... 6
Section 1.04. Rules of Construction................................... 7
ARTICLE TWO THE SECURITIES................................................. 7
Section 2.01. Form and Dating......................................... 7
Section 2.02. Execution and Authentication............................ 8
Section 2.03. Registrar and Paying Agent.............................. 9
Section 2.04. Paying Agent to Hold Money in Trust..................... 9
Section 2.05. Securityholder Lists.................................... 9
Section 2.06. Transfer and Exchange................................... 10
Section 2.07. Replacement Securities.................................. 10
Section 2.08. Outstanding Securities.................................. 10
Section 2.09. Temporary Securities.................................... 11
Section 2.10. Cancellation............................................ 11
Section 2.11. Defaulted Interest...................................... 11
Section 2.12. Treasury Securities..................................... 12
Section 2.13. CUSIP Numbers........................................... 12
Section 2.14. Deposit of Moneys....................................... 12
Section 2.15. Book-Entry Provisions for Global Security............... 12
ARTICLE THREE REDEMPTION................................................... 13
Section 3.01. Notices to Trustee...................................... 13
Section 3.02. Selection of Securities to be Redeemed.................. 14
Section 3.03. Notice of Redemption.................................... 14
Section 3.04. Effect of Notice of Redemption.......................... 14
Section 3.05. Deposit of Redemption Price............................. 15
Section 3.06. Securities Redeemed in Part............................. 15
ARTICLE FOUR COVENANTS..................................................... 15
Section 4.01. Payment of Securities................................... 15
Section 4.02. Maintenance of Office or Agency......................... 15
Section 4.03. Compliance Certificate.................................. 15
Section 4.04. Maintenance of Corporate Existence...................... 15
ARTICLE FIVE SUCCESSOR CORPORATION......................................... 16
Section 5.01. When Company May Merge, etc............................. 16
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE SIX DEFAULTS AND REMEDIES.......................................... 16
Section 6.01. Events of Default....................................... 16
Section 6.02. Acceleration............................................ 17
Section 6.03. Other Remedies.......................................... 18
Section 6.04. Waiver of Existing Defaults............................. 18
Section 6.05. Control by Majority..................................... 18
Section 6.06. Limitation on Suits..................................... 19
Section 6.07. Rights of Holders to Receive Payment.................... 19
Section 6.08. Collection Suit by Trustee.............................. 19
Section 6.09. Trustee May File Proofs of Claim........................ 19
Section 6.10. Priorities.............................................. 20
Section 6.11. Undertaking for Costs................................... 20
ARTICLE SEVEN TRUSTEE...................................................... 20
Section 7.01. Duties of Trustee....................................... 20
Section 7.02. Rights of Trustee....................................... 21
Section 7.03. Individual Rights of Trustee............................ 22
Section 7.04. Trustee's Disclaimer.................................... 22
Section 7.05. Notice of Defaults...................................... 23
Section 7.06. Reports by Trustee to Holders........................... 23
Section 7.07. Compensation and Indemnity.............................. 23
Section 7.08. Replacement of Trustee.................................. 24
Section 7.09. Successor Trustee by Merger, etc........................ 24
Section 7.10. Eligibility; Disqualification........................... 24
Section 7.11. Preferential Collection of Claims Against Company....... 25
ARTICLE EIGHT DISCHARGE OF INDENTURE....................................... 25
Section 8.01. Defeasance upon Deposit of Moneys or U.S. Government
Obligations............................................ 25
Section 8.02. Survival of the Company's Obligations................... 28
Section 8.03. Application of Trust Money.............................. 28
Section 8.04. Repayment to the Company................................ 28
Section 8.05. Reinstatement........................................... 29
ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS........................... 29
Section 9.01. Without Consent of Holders.............................. 29
Section 9.02. With Consent of Holders................................. 30
Section 9.03. Compliance with Trust Indenture Act..................... 31
Section 9.04. Revocation and Effect of Consents....................... 31
Section 9.05. Notation on or Exchange of Securities................... 31
Section 9.06. Trustee to Sign Amendments, etc......................... 32
ARTICLE TEN MISCELLANEOUS.................................................. 32
Section 10.01. Trust Indenture Act Controls........................... 32
Section 10.02. Notices................................................ 32
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 10.03. Communications by Holders with Other Holders........... 33
Section 10.04. Certificate and Opinion as to Conditions Precedent..... 33
Section 10.05. Statements Required in Certificate or Opinion.......... 34
Section 10.06. Rules by Trustee and Agents............................ 34
Section 10.07. Legal Holidays......................................... 34
Section 10.08. Governing Law.......................................... 34
Section 10.09. No Adverse Interpretation of Other Agreements.......... 34
Section 10.10. No Recourse Against Others............................. 34
Section 10.11. Successors and Assigns................................. 35
Section 10.12. Duplicate Originals.................................... 35
Section 10.13. Severability........................................... 35
</TABLE>
iii
<PAGE>
CROSS-REFERENCE TABLE
This Cross-Reference Table is not a part of the Indenture.
<TABLE>
<CAPTION>
TIA Indenture Section Section
- --------------------- -------
<S> <C>
310(a)(1).................................................... 7.10
(a)(2)....................................................... 7.10
(a)(3)....................................................... N.A.
(a)(4)....................................................... N.A.
(b).......................................................... 7.08; 7.10; 9.02
310(a)....................................................... 7.10
(b).......................................................... 7.10
(c).......................................................... N.A.
312(a)....................................................... 2.05
(b).......................................................... 9.03
(c).......................................................... 9.03
313(a)....................................................... 7.06
(b)(1)....................................................... N.A.
(b)(2)....................................................... 7.06
(c).......................................................... 9.02
(d).......................................................... 7.06
314(a)....................................................... 4.02; 9.02
(b).......................................................... N.A.
(c)(1)....................................................... 9.04
(c)(2)....................................................... 9.04
(c)(3)....................................................... N.A.
(d).......................................................... N.A.
(e).......................................................... 9.05
315(a)....................................................... 7.01(b)
(b).......................................................... 7.05; 9.02
(c).......................................................... 7.01(a)
(d).......................................................... 7.01(c)
(e).......................................................... 6.10
316(a)(last sentence)........................................ 9.06
(a)(1)(A).................................................... 6.05
(a)(1)(B).................................................... 6.04
(a)(2)....................................................... N.A.
(b).......................................................... 6.07
317(a)(1).................................................... 6.08
(a)(2)....................................................... 6.09
(b).......................................................... 2.04
318(a)....................................................... 9.01
</TABLE>
N.A. means Not Applicable.
iv
<PAGE>
INDENTURE dated as of April 1, 1999, by and between STANDARD PACIFIC CORP.,
a Delaware corporation (the "Company"), and The First National Bank of Chicago
(the "Trustee"). Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's debt
securities issued under this Indenture (the "Securities"):
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
To the extent terms defined herein differ from any Authorizing Resolution
or supplemental indenture pertaining to any Series of Securities, the
definitions in such Authorizing Resolution or supplemental indenture will govern
with respect to such Series.
"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 otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-Registrar or agent for
service of notices and demands.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities.
"Bank Credit Facility" means the Revolving Credit Facility, any other bank
credit agreement or credit facility entered into in the future by the Company or
any Restricted Subsidiary and any other agreement (including all related
ancillary agreements) pursuant to which any of the Indebtedness, Obligations,
commitments, costs, expenses, fees, reimbursements and other indemnities payable
or owing under the Revolving Credit Facility or any other bank credit agreement
or credit facility (or under any subsequent Bank Credit Facility) may be
refinanced, restructured, renewed, extended, refunded, replaced or increased, as
any such Revolving Credit Facility, bank credit agreement, credit facility or
other agreement may from time to time at the option of the parties thereto be
amended, renewed, supplemented or otherwise modified.
"Bankruptcy Law" means title 11 of the United States Code, as amended, or
any similar federal or state law for the relief of debtors.
<PAGE>
"Board of Directors" means the Board of Directors of the Company or any
authorized committee thereof.
"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.
"Capitalized Lease Obligations" means any obligations under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP.
"Company" means the party named as such in this Indenture until a successor
replaces it pursuant to the Indenture and thereafter means the successor.
"Currency Agreement" of any Person means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect such Person or any of its Subsidiaries against fluctuations in currency
values.
"Default" means any event, act or condition that is, or after notice or the
passage of time or both would be, an Event of Default.
"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 the date that
is twelve months after the maturity of the Security.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the date of this Indenture.
"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.
"Holder" or "Securityholder" means the person in whose name a Security is
registered on the Registrar's books.
"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
2
<PAGE>
(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
obligor 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 obligor, 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 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
3
<PAGE>
occurrence of the contingency, other than a contingency solely within the
control of such person, giving rise to the obligations, 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.
"Indenture" means this Indenture as amended or supplemented from time to
time, including pursuant to any Authorizing Resolution or supplemental indenture
pertaining to any Series.
"Interest Rate Agreement" of any Person means any interest rate swap
agreement, interest rate cap agreement, or other financial agreement or
arrangement designed to protect such Person or any of its Subsidiaries against
fluctuations in interest rates.
"Issue Date" means, with respect to any Series of Securities, the date on
which the Securities of such Series are originally issued under this Indenture.
"Lien" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this definition, a Person shall be deemed to own,
subject to a Lien, any Property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such Property.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, the Controller or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or by an
Officer and an Assistant Treasurer or an Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Person" means an 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
4
<PAGE>
dissolution of such corporation, over shares of Capital Stock of any other class
of such corporation.
"principal" of a debt security means the principal of the security plus,
when appropriate, the premium, if any, on the security.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person, whether or not included in
the most recent consolidated balance sheet of such Person and its Subsidiaries
under GAAP.
"Restricted Subsidiary" with respect to any Series of Securities, shall be
defined in the Authorizing Resolution or supplemental indenture pertaining to
such Series.
"Revolving Credit Facility" means that certain Amended and Restated Credit
Agreement (the "Credit Agreement") dated as of July 28, 1998 between the
Company, Bank of America National Trust and Savings Association, The First
National Bank of Chicago, Credit Lyonnais Los Angeles Branch, and certain other
parties and the other Loan Documents (as defined in the Credit Agreement) or
other analogous documents entered into in connection with any refinancing
thereof, as any of the foregoing has been or may from time to time be amended,
renewed, supplemented or otherwise modified at the option of the parties thereto
(in whole or in part, and without limitation as to amount, terms, conditions,
covenants and other provisions) and to add any Subsidiary as additional direct
obligors thereunder.
"SEC" means the Securities and Exchange Commission or any successor agency
performing the duties now assigned to it under the TIA.
"Securities" means any Securities that are issued under this Indenture.
"Series" means a series of Securities established under this Indenture.
"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 interest.
"TIA" means the Trust Indenture Act of 1939, as in effect from time to
time.
"Trustee" means the party named as such in this Indenture until a successor
replaces it pursuant to this Indenture and thereafter means the successor
serving hereunder.
"Trust Officer" means the Chairman of the Board, the President, any Vice
President or any other officer or assistant officer of the Trustee assigned by
the Trustee to administer its corporate trust matters.
"United States" means the United States of America.
"U.S. government obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a
5
<PAGE>
person controlled or supervised by and acting as an agency or instrumentality of
the United States the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States, which, in either case are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank or trust company as custodian with
respect to any such U.S. government obligations or a specific payment of
interest on or principal of any such U.S. government obligation held by such
custodian for the account of the holder of a depositary receipt; provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt from
any amount received by the custodian in respect of the U.S. government
obligation or the specific payment of interest on or principal of the U.S.
government obligation evidenced by such depositary receipt.
Section 1.02. Other Definitions.
-----------------
<TABLE>
<CAPTION>
Term Defined in
---- ----------
<S> <C>
"Agent Members" 2.15
"Business Day" 10.07
"Custodian" 6.01
"Depository" 2.15
"Event of Default" 6.01
"Legal Holiday" 10.07
"Paying Agent" 2.03
"Registrar" 2.03
</TABLE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities of a Series.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings so assigned to them.
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Section 1.04. Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE TWO
THE SECURITIES
Section 2.01. Form and Dating. The aggregate principal amount of
---------------
Securities that may be issued under this Indenture is unlimited. The Securities
may be issued from time to time in one or more Series. Each Series shall be
created by an Authorizing Resolution or a supplemental indenture that
establishes the terms of the Series, which may include the following:
(1) the title of the Series;
(2) the aggregate principal amount (or any limit on the aggregate
principal amount) of the Series and, if any Securities of a Series are
to be issued at a discount from their face amount, the method of
computing the accretion of such discount;
(3) the interest rate or method of calculation of the interest rate;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Securities of the Series;
(6) the dates when, places where and manner in which principal and
interest are payable;
(7) the Registrar and Paying Agent;
(8) the terms of any mandatory (including any sinking fund requirements)
or optional redemption by the Company;
(9) the terms of any redemption at the option of Holders;
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(10) the denominations in which Securities are issuable;
(11) whether Securities will be issued in registered or bearer form and the
terms of any such forms of Securities;
(12) whether any Securities will be represented by a global Security and
the terms of any such global Security;
(13) the currency or currencies (including any composite currency) in which
principal or interest or both may be paid;
(14) if payments of principal or interest may be made in a currency other
than that in which Securities are denominated, the manner for
determining such payments;
(15) provisions for electronic issuance of Securities or issuance of
Securities in uncertificated form;
(16) any Events of Default, covenants and/or defined terms in addition to
or in lieu of those set forth in this Indenture;
(17) whether and upon what terms Securities may be defeased if different
from the provisions set forth in this Indenture;
(18) the form of the Securities, which, unless the Authorizing Resolution
or supplemental indenture otherwise provides, shall be in the form of
Exhibit A;
(19) any terms that may be required by or advisable under applicable law;
(20) the percentage of the principal amount of the Securities which is
payable if the maturity of the Securities is accelerated in the case
of Securities issued at a discount from their face amount;
(21) whether any Securities will have guarantees; and
(22) any other terms in addition to or different from those contained in
this Indenture.
All Securities of one Series need not be issued at the same time and,
unless otherwise provided, a Series may be reopened for issuances of additional
Securities of such Series pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto. The creation and issuance
of a Series and the authentication and delivery thereof are not subject to any
conditions precedent.
Section 2.02. Execution and Authentication.
----------------------------
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Two Officers shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall
nevertheless be valid.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate Securities for original issue upon receipt
of an Officers' Certificate of the Company. Each Security shall be dated the
date of its authentication.
Section 2.03. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where Securities may be presented for payment ("Paying Agent") and an
office or agency where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-Registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall promptly notify the
Trustee in writing of the name and address of any such Agent and the Trustee
shall have the right to inspect the Securities register at all reasonable times
to obtain copies thereof, and the Trustee shall have the right to rely upon such
register as to the names and addresses of the Holders and the principal amounts
and certificate numbers thereof. If the Company fails to maintain a Registrar
or Paying Agent or fails to give the foregoing notice, the Trustee shall act as
such.
The Company initially appoints the Trustee as Registrar and Paying Agent.
Section 2.04. Paying Agent to Hold Money in Trust.
-----------------------------------
Each Paying Agent shall hold in trust for the benefit of Securityholders
and the Trustee all money held by the Paying Agent for the payment of principal
of or interest on the Securities, and shall notify the Trustee of any default by
the Company in making any such payment. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate the money and hold it as a separate trust fund.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon doing so the Paying Agent shall have no further liability
for the money.
Section 2.05. Securityholder Lists.
--------------------
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The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least 7 Business Days before each semiannual interest payment
date and at such other times as the Trustee may request in writing a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Securityholders.
Section 2.06. Transfer and Exchange.
---------------------
Where a Security is presented to the Registrar or a co-Registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of Section 8-401(1) of the New York Uniform
Commercial Code are met. Where Securities are presented to the Registrar or a
co-Registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit transfers and exchanges,
the Trustee shall authenticate Securities at the Registrar's request. The
Registrar need not transfer or exchange any Security selected for redemption,
except the unredeemed part thereof if the Security is redeemed in part, or
transfer or exchange any Securities for a period of 15 days before a selection
of Securities to be redeemed. Any exchange or transfer shall be without charge,
except that the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto except in
the case of exchanges pursuant to 2.09, 3.06, or 9.05 not involving any
transfer.
Any Holder of a global Security shall, by acceptance of such global
Security, agree that transfers of beneficial interests in such global Security
may be effected only through a book entry system maintained by the Holder of
such global Security (or its agent), and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry.
Section 2.07. Replacement Securities.
----------------------
If the Holder of a Security claims that the Security has been lost,
destroyed, mutilated or wrongfully taken, the Company shall issue and, upon
written request of any Officer of the Company, the Trustee shall authenticate a
replacement Security, provided in the case of a lost, destroyed or wrongfully
taken Security, that the requirements of Section 8-405 of the New York Uniform
Commercial Code are met. If any such lost, destroyed, mutilated or wrongfully
taken Security shall have matured or shall be about to mature, the Company may,
instead of issuing a substitute Security therefor, pay such Security without
requiring (except in the case of a mutilated Security) the surrender thereof.
An indemnity bond must be sufficient in the judgment of the Company and the
Trustee to protect the Company, the Trustee or any Agent from any loss which any
of them may suffer if a Security is replaced, including the acquisition of such
Security by a bona fide purchaser. The Company or the Trustee may charge for
its expenses in replacing a Security.
Section 2.08. Outstanding Securities.
----------------------
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Securities outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it and those described in this Section. A
Security does not cease to be outstanding because the Company or one of its
Affiliates holds the Security. If a Security is replaced pursuant to Section
2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory
to it that the replaced Security is held by a bona fide purchaser. If the
Paying Agent holds on a redemption date or maturity date money sufficient to pay
Securities payable on that date, then on and after that date such Securities
cease to be outstanding and interest on them ceases to accrue.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.09. Temporary Securities.
--------------------
Until definitive Securities are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Securities. Temporary Securities
shall be substantially in the form of definitive Securities but may have
variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and, upon surrender for
cancellation of the temporary Security, the Company shall execute and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
authenticated and delivered hereunder.
Section 2.10. Cancellation.
------------
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange,
redemption or payment. The Trustee and no one else shall cancel and destroy, or
retain in accordance with its standard retention policy, all Securities
surrendered for registration or transfer, exchange, redemption, paying or
cancellation. Unless the Authorizing Resolution so provides, the Company may
not issue new Securities to replace Securities that it has previously paid or
delivered to the Trustee for cancellation.
Section 2.11. Defaulted Interest.
------------------
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest plus any interest payable on the defaulted
interest to the persons who are Securityholders on a subsequent special record
date. The Company shall fix such special record date and a payment date which
shall be reasonably satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each Securityholder a notice that
states the record date, the payment date and the amount of defaulted interest to
be paid. On or before the date such notice is mailed, the Company shall deposit
with the Paying Agent money sufficient to pay the amount of defaulted interest
to be so paid. The Company may pay defaulted
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interest in any other lawful manner if, after notice given by the Company to the
Trustee of the proposed payment, such manner of payment shall be deemed
practicable by the Trustee.
Section 2.12. Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any direction, waiver, consent or
notice, Securities owned by the Company or any of its Affiliates shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee actually knows
are so owned shall be so considered.
Section 2.13. CUSIP Numbers.
-------------
The Company in issuing the Securities of any Series may use a "CUSIP"
number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders of such Securities; provided
that no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of any such CUSIP number printed in the notice or on
such Securities, and that reliance may be placed only on the other
identification numbers printed on such Securities. The Company shall promptly
notify the Trustee of any change in any CUSIP number.
Section 2.14. Deposit of Moneys.
-----------------
Prior to 11:00 a.m. New York City time on each interest payment date and
maturity date with respect to each Series of Securities, the Company shall have
deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments due on such interest payment date or maturity date, as the
case may be, in a timely manner which permits the Paying Agent to remit payment
to the Holders on such interest payment date or maturity date, as the case may
be.
Section 2.15. Book-Entry Provisions for Global Security.
-----------------------------------------
(a) Any global Security of a Series initially shall (i) be
registered in the name of the depository who shall be identified in the
Authorizing Resolution or supplemental indenture relating to such Securities
(the "Depository") or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear any required legends.
Members of, or participants in, the Depository ("Agent Members") shall have no
rights under this Indenture with respect to any global Security held on their
behalf by the Depository, or the Trustee as its custodian, or under the global
Security, and the Depository may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of the global Security
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any Security.
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(b) Transfers of any global Security shall be limited to
transfers in whole, but not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial owners in the global Security may
be transferred or exchanged for definitive Securities in accordance with the
rules and procedures of the Depository. In addition, definitive Securities shall
be transferred to all beneficial owners in exchange for their beneficial
interests in a global Security if (i) the Depository notifies the Company that
it is unwilling or unable to continue as Depository for the global Security and
a successor depository is not appointed by the Company within 90 days of such
notice or (ii) the Company elects to cause the issuance of definitive Securities
hereunder. In either instance, upon surrender by the relevant Holder of its
global Security, definitive Securities will be issued to each Person that such
Holder and the Depository identifies as being the beneficial owner of the
related Securities.
(c) In connection with any transfer or exchange of a portion of
the beneficial interest in any global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Securities are to
be issued) reflect on its books and records the date and a decrease in the
principal amount of the global Security in an amount equal to the principal
amount of the beneficial interest in the global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more definitive Securities of like tenor and amount.
(d) In connection with the transfer of an entire global Security
to beneficial owners pursuant to paragraph (b), the global Security shall be
deemed to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the global Security, an equal aggregate principal amount of definitive
Securities of authorized denominations.
(e) The Holder of any global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities of such Series.
ARTICLE THREE
REDEMPTION
Section 3.01. Notices to Trustee.
------------------
Securities of a Series that are redeemable prior to maturity shall be
redeemable in accordance with their terms and, unless the Authorizing Resolution
or supplemental indenture provides otherwise, in accordance with this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall notify the Trustee in writing of the Redemption Date and
the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect. If the
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Company wants to credit any Securities previously redeemed, retired or acquired
against any redemption pursuant to Paragraph 6 of the Securities, it shall
notify the Trustee of the amount of the credit and it shall deliver any
Securities not previously delivered to the Trustee for cancellation with such
notice.
The Company shall give each notice provided for in this Section 3.01 at
least 30 days before the notice of any such redemption is to be mailed to
Holders (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities to be Redeemed.
--------------------------------------
If fewer than all of the Securities of a Series are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities outstanding not previously called for redemption and shall promptly
notify the Company of the serial numbers or other identifying attributes of the
Securities so selected. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than the minimum
denomination for the Series. Securities and portions of them it selects shall
be in amounts equal to the minimum denomination for the Series or an integral
multiple thereof. Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption.
Section 3.03. Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption by first-class mail, postage prepaid,
to each Holder of Securities to be redeemed. The notice shall identify the
Securities to be redeemed and shall state: (1) the redemption date; (2) the
redemption price; (3) the name and address of the Paying Agent; (4) that
Securities called for redemption must be surrendered to the Paying Agent to
collect the redemption price; (5) that interest on Securities called for
redemption ceases to accrue on and after the redemption date; and (6) that the
Securities are being redeemed pursuant to the mandatory redemption or the
optional redemption provisions, as applicable. At the Company's request, the
Trustee shall give the notice of redemption in the Company's name and at its
expense; provided, however, that the Company shall deliver to the Trustee at
least 15 days prior to the date on which notice of redemption is to be mailed or
such shorter period as may be satisfactory to the Trustee, an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price as set
forth in the notice of redemption. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus accrued interest to the
redemption date.
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Section 3.05. Deposit of Redemption Price.
---------------------------
On or before the redemption date, the Company shall deposit with the Paying
Agent immediately available funds sufficient to pay the redemption price of and
accrued interest on all Securities to be redeemed on that date.
Section 3.06. Securities Redeemed in Part.
---------------------------
Upon surrender of a Security that is redeemed in part, the Company shall
execute and the Trustee shall authenticate for each Holder a new Security equal
in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Securities.
---------------------
The Company shall pay the principal of and interest on a Series on the
dates and in the manner provided in the Securities of the Series. An
installment of principal or interest shall be considered paid on the date it is
due if the Paying Agent holds on that date money designated for and sufficient
to pay the installment.
The Company shall pay interest on overdue principal at the rate borne by
the Series; it shall pay interest on overdue installments of interest at the
same rate.
Section 4.02. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee.
Section 4.03. Compliance Certificate.
----------------------
The Company shall deliver to the Trustee within 120 days after the end of
each fiscal year of the Company an Officers' Certificate stating whether or not
the signers know of any Default by the Company in performing any of its
obligations under this Indenture. If they do know of such a Default, the
certificate shall describe the Default.
Section 4.04. Maintenance of Corporate Existence.
----------------------------------
The Company will cause to be done all things necessary to preserve and
keep in full force and effect the corporate existence of the Company; provided,
however, that nothing in this Section 4.04 shall prevent a consolidation or
merger of the Company not prohibited by the
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provisions of Article Five or any other provision or the Authorizing Resolution
or supplemental indenture pertaining to a Series.
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge, etc.
---------------------------
The Company shall not consolidate with or merge with or into, any other
corporation, or transfer all or substantially all of its assets to, any entity
unless permitted by law and unless (1) the resulting, surviving or transferee
entity (if other than the Company), which shall be a corporation organized and
existing under the laws of the United States or a State thereof, and shall
assume by supplemental indenture, in a form reasonably satisfactory to the
Trustee, all of the obligations of the Company under the Securities and this
Indenture and (2) immediately after giving effect to, and as a result of, such
transaction, no Default or Event of Default shall have occurred and be
continuing. Thereafter, in the event that the Company is not the continuing
corporation, such successor corporation or corporations shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the "Company" and all such obligations of the predecessor corporation shall
terminate. The Company shall deliver to the Trustee prior to the consummation
of the proposed transaction an Officers' Certificate to the foregoing effect and
an Opinion of Counsel stating that the proposed transaction and such
supplemental indenture comply with this Indenture. To the extent that an
Authorizing Resolution or supplemental indenture pertaining to any Series
provides for different provisions relating to the subject matter of this Article
Five, the provisions in such Authorizing Resolution or supplemental indenture
shall govern for purposes of such Series.
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
-----------------
An "Event of Default" on a Series occurs if, voluntarily or involuntarily,
whether by operation of law or otherwise, any of the following occurs:
(1) the failure by the Company to pay interest on any Security of such
Series when the same becomes due and payable and the continuance of
any such failure for a period of 30 days;
(2) the failure by the Company to pay the principal or premium of any
Security of such Series when the same becomes due and payable at
maturity, upon acceleration or otherwise;
(3) the failure by the Company to comply with any of its agreements or
covenants in, or provisions of, the Securities of such Series or this
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Indenture (as they relate thereto) and such failure continues for the
period and after the notice specified below (except in the case of a
default with respect to Article Five (or any replacement provisions as
contemplated by Article Five), which will constitute an Event of
Default with notice but without passage of time);
(4) the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property or
(D) makes a general assignment for the benefit of its creditors; or
(5) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company as debtor in an involuntary
case,
(B) appoints a Custodian of the Company or a Custodian for all or
substantially all of the property of the Company, or
(C) orders the liquidation of the Company, and the order or decree
remains unstayed and in effect for 60 days.
Default as described in sub-clause (3) above will not be deemed an Event of
Default until the Trustee notifies the Company, or the Holders of at least 25
percent in principal amount of the then outstanding Securities of the applicable
Series notify the Company and the Trustee, of the Default and (except in the
case of a default with respect to Article Five (or any replacement provisions as
contemplated by Article Five)) the Company does not cure the Default within 60
days after receipt of the notice. The notice must specify the Default, demand
that it be remedied and state that the notice is a "Notice of Default." If such
a Default is cured within such time period, it ceases. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
Section 6.02. Acceleration.
------------
If an Event of Default (other than an Event of Default with respect to the
Company resulting from sub-clauses (4) or (5) above), shall have occurred and be
continuing, the Trustee by notice to the Company, or the Holders of at least 25
percent in principal amount of the Securities of the applicable Series then
outstanding by notice to the Company and the Trustee, may declare all Securities
of such Series to be due and payable immediately. Upon such declaration of
acceleration, the amounts due and payable on the Securities of such Series will
be due and payable immediately. If an Event of Default with respect to the
Company specified in
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sub-clauses (4) or (5) above occurs, all amounts due and payable on the
Securities of such Series will ipso facto become and be immediately due and
payable without any declaration, notice or other act on the part of the Trustee
and the Company or any Holder. The Holders of a majority in principal amount of
the Securities of such Series then outstanding by written notice to the Trustee
and the Company may waive any Default or Event of Default (other than any
continuing Default or Event of Default in payment of principal or interest) with
respect to such Series of Securities under the Indenture. Holders of a majority
in principal amount of the then outstanding Securities of such Series may
rescind an acceleration with respect to such Series and its consequence (except
an acceleration due to nonpayment of principal or interest on the Securities of
such Series) if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived.
No such rescission shall extend to or shall affect any subsequent Event of
Default, or shall impair any right or power consequent thereon.
Section 6.03. Other Remedies.
--------------
If an Event of Default on a Series occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Series or to enforce the performance
of any provision in the Securities or this Indenture applicable to the Series.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.04. Waiver of Existing Defaults.
---------------------------
Subject to Section 9.02, the Holders of a majority in principal amount of
the outstanding Securities of a Series on behalf of all the Holders of the
Series by notice to the Trustee may waive an existing Default on such Series and
its consequences. When a Default is waived, it is cured and stops continuing,
and any Event of Default arising therefrom shall be deemed to have been cured;
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereon.
Section 6.05. Control by Majority.
-------------------
The Holders of a majority in principal amount of the outstanding Securities
of a Series may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it with respect to such Series. The Trustee, however, may refuse
to follow any direction (i) that conflicts with law or this Indenture, (ii)
that, subject to Section 7.01, the Trustee determines is unduly prejudicial to
the rights of other Securityholders, (iii) that would involve the Trustee in
personal liability or (iv) if the Trustee shall not have been provided with
indemnity satisfactory to it.
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Section 6.06. Limitation on Suits.
-------------------
A Securityholder of a Series may not pursue any remedy with respect to this
Indenture or the Series unless:
(1) the Holder gives to the Trustee written notice of a continuing Event
of Default on the Series;
(2) the Holders of at least a majority in principal amount of the
outstanding Securities of the Series make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) no written request inconsistent with such written request shall have
been given to the Trustee pursuant to this Section 6.06.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
Section 6.07. Rights of Holders to Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Security, on or
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
Section 6.08. Collection Suit by Trustee.
--------------------------
If an Event of Default in payment of interest or principal specified in
Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount of principal and interest remaining unpaid.
Section 6.09. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements,
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property, and unless prohibited by applicable law or regulation, may vote on
behalf of the Holders in any election of a Custodian, and shall be entitled and
empowered to
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collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same and any Custodian in any such judicial
proceeding is hereby authorized by each Securityholder to make such payments to
the Trustee. Nothing herein shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder or to authorize
the Trustee to vote in respect of the claim of any Securityholder except as
aforesaid for the election of the Custodian.
Section 6.10. Priorities.
----------
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Securityholders of the Series for amounts due and unpaid on the
Series for principal and interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Series for principal
and interest, respectively; and
Third: to the Company as its interests may appear.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having the due regard to the merits and
good faith of the claims or defenses made by the party litigant. This Section
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in principal amount of the Series.
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the
Trustee shall, prior to the receipt of directions from the Holders of a majority
in principal amount of the applicable Series, exercise its rights and powers and
use the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
20
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(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others and no implied covenants
or obligations shall be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. The Trustee,
however, shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture but need not confirm or
investigate the accuracy of mathematical calculations or other facts or matters
stated therein.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 or any other direction of the Holders
permitted hereunder.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
Section 7.02. Rights of Trustee.
-----------------
Subject to Section 7.01:
21
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(a) The Trustee may rely and shall be protected in acting or
refraining from acting on any document, resolution, certificate, instrument,
report, or direction believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document, resolution, certificate, instrument, report, or
direction.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both, which shall
conform to Sections 10.04 and 10.05 hereof and containing such other statements
as the Trustee reasonably deems necessary to perform its duties hereunder. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on the Officers' Certificate, Opinion of Counsel or any other
direction of the Company permitted hereunder.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture.
(e) The Trustee may consult with counsel, and the written advice
of such counsel or any Opinion of Counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) Unless otherwise specifically provided in the Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(g) For all purposes under this Indenture, the Trustee shall not
be deemed to have notice or knowledge of any Event of Default (other than under
Section 6.01(1) or 6.01(2)) unless a Trust Officer assigned to and working in
the Trustee's corporate trust office has actual knowledge thereof or unless
written notice of any Event of Default is received by the Trustee at its address
specified in Section 10.02 hereof and such notice references the Securities
generally, the Company or this Indenture.
Section 7.03. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or its affiliates
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights. The Trustee, however, must comply with Sections 7.10 and
7.11.
Section 7.04. Trustee's Disclaimer.
--------------------
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The Trustee makes no representation as to the validity or adequacy of this
Indenture, the Securities or of any prospectus used to sell the Securities; it
shall not be accountable for the Company's use of the proceeds from the
Securities; it shall not be accountable for any money paid to the Company, or
upon the Company's direction, if made under and in accordance with any provision
of this Indenture; it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee; and it shall not be
responsible for any statement of the Company in this Indenture or in the
Securities other than its certificate of authentication.
Section 7.05. Notice of Defaults.
------------------
If a Default on a Series occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Securityholder of the Series notice of
the Default (which shall specify any uncured Default known to it) within 90 days
after it occurs. Except in the case of a default in payment of principal of or
interest on a Series, the Trustee may withhold the notice if and so long as the
board of directors of the Trustee, the executive or any trust committee of such
directors and/or responsible officers of the Trustee in good faith determine(s)
that withholding the notice is in the interests of Holders of the Series.
Section 7.06. Reports by Trustee to Holders.
-----------------------------
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to each Securityholder a brief
report dated as of such May 15 that complies with TIA (S) 313(a) (but if no
event described in TIA (S) 313(2) has occurred within the twelve months
preceding the reporting date no report need be transmitted). The Trustee also
shall comply with TIA (S) 313(b). A copy of each report at the time of its
mailing to Securityholders shall be delivered to the Company and filed by the
Trustee with the SEC and each national securities exchange on which the
Securities are listed. The Company agrees to notify the Trustee of each
national securities exchange on which the Securities are listed.
Section 7.07. Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee or predecessor trustee from time to
time reasonable compensation for their respective services subject to any
written agreement between the Trustee and the Company. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel. The Company shall indemnify the
Trustee and each predecessor trustee, its officers, directors, employees and
agents and hold it harmless against any loss, liability or expense incurred or
made by or on behalf of it in connection with the administration of this
Indenture or the trust hereunder and its duties hereunder including the costs
and expenses of defending itself against or investigating any claim in the
premises. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through the Trustee's, or
its officers', directors', employees' or agents' negligence or bad faith. To
ensure the Company's payment obligations in this Section, the Trustee shall have
a claim prior to the Securities on all money or property held or collected by
the Trustee, except that held in trust
23
<PAGE>
to pay principal of or interest on particular Securities. When the Trustee
incurs expenses or renders services in connection with an Event of Default
specified in Section 6.01 or in connection with Article Six hereof, the expenses
(including the reasonable fees and expenses of its counsel) and the compensation
for services in connection therewith are to constitute expenses of
administration under any bankruptcy law.
Section 7.08. Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the removed Trustee in writing and may appoint a
successor trustee with the Company's consent. Such resignation or removal shall
not take effect until the appointment by the Securityholders or the Company as
hereinafter provided of a successor trustee and the acceptance of such
appointment by such successor trustee. The Company may remove the Trustee and
any Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee for any or no
reason, including if:
(1) the Trustee fails to comply with Section 7.10 after written request by
the Company or any bona fide Securityholder who has been a
Securityholder for at least six months;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
trustee. If a successor trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or any
Holder may petition any court of competent jurisdiction for the appointment of a
successor trustee. A successor trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall transfer all property held by it as Trustee to
the successor trustee, the resignation or removal of the retiring Trustee shall
become effective, and the successor trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor trustee shall mail
notice of its succession to each Securityholder.
Section 7.09. Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates with, merges with or into or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor trustee.
Section 7.10. Eligibility; Disqualification.
-----------------------------
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This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S) 310(a)(1). The Trustee shall have a combined capital and surplus of
at least $10,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA (S) 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
Section 8.01. Defeasance upon Deposit of Moneys or U.S. Government
----------------------------------------------------
Obligations.
- -----------
(a) The Company may, at its option and at any time, elect to have either
paragraph (b) or paragraph (c) below be applied to the outstanding
Securities of any Series upon compliance with the applicable
conditions set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have
been released and discharged from its obligations with respect to the
outstanding Securities of a Series on the date the applicable
conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, such Legal Defeasance means that the
Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Securities of a Series,
which shall thereafter be deemed to be "outstanding" only for the
purposes of the Sections and matters under this Indenture referred to
in (i) and (ii) below, and to have satisfied all its other obligations
under such Securities and this Indenture insofar as such Securities
are concerned, except for the following which shall survive until
otherwise terminated or discharged hereunder: (i) the rights of
Holders of outstanding Securities of a Series to receive solely from
the trust fund described in paragraph (d) below and as more fully set
forth in such paragraph, payments in respect of the principal of and
interest on such Securities when such payments are due and (ii)
obligations listed in Section 8.02, subject to compliance with this
Section 8.01. The Company may exercise its option under this
paragraph (b) notwithstanding the prior exercise of its option under
paragraph (c) below with respect to such Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and
discharged from
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<PAGE>
the obligations under any covenant contained in Article Four and any
other covenant contained in the Authorizing Resolution or supplemental
indenture relating to such Series to the extent provided for therein,
on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Securities of such
Series shall thereafter be deemed to be not "outstanding" for the
purpose of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other
purposes hereunder. For this purpose, such Covenant Defeasance means
that, with respect to the outstanding Securities of a Series, the
Company may omit to comply with and shall have no liability in respect
of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of
Default under Section 6.01(3), but, except as specified above, the
remainder of this Indenture and such Securities shall be unaffected
thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities of
the applicable Series:
(1) The Company shall have irrevocably deposited in trust with the
Trustee, pursuant to an irrevocable trust and security agreement
in form and substance reasonably satisfactory to the Trustee,
money in U.S. dollars or U.S. government obligations or a
combination thereof in such amounts and at such times as are
sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of and
interest on the outstanding Securities of such Series to maturity
or redemption; provided, however, that the Trustee (or other
qualifying trustee) shall have received an irrevocable written
order from the Company instructing the Trustee (or other
qualifying trustee) to apply such money or the proceeds of such
U.S. government obligations to said payments with respect to the
Securities of such Series to maturity or redemption;
(2) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(3) Such deposit will not result in a Default under this Indenture or
a breach or violation of, or constitute a default under, any
other material instrument or agreement to which the Company or
any of any of its Subsidiaries is a party or by which it or any
of their property is bound;
26
<PAGE>
(4) (i) In the event the Company elects paragraph (b) hereof, the
Company shall deliver to the Trustee an Opinion of Counsel in the
United States, in form and substance reasonably satisfactory to
the Trustee, to the effect that (A) the Company has received
from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the Issue Date pertaining to such
Series, there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall state that, or (ii) in the event
the Company elects paragraph (c) hereof, the Company shall
deliver to the Trustee an Opinion of Counsel in the United
States, in form and substance reasonably satisfactory to the
Trustee, to the effect that, in the case of clauses (i) and (ii),
Holders of the Securities of such Series will not recognize
income, gain or loss for federal income tax purposes as a result
of such deposit and the defeasance contemplated hereby and will
be subject to federal income tax in the same amounts and in the
same manner and at the same times as would have been the case if
such deposit and defeasance had not occurred;
(5) The Company shall have delivered to the Trustee an Officers'
Certificate, stating that the deposit under clause (1) was not
made by the Company with the intent of preferring the Holders of
the Securities of such Series over any other creditors of the
Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others;
(6) The Company shall have delivered to the Trustee an Opinion of
Counsel, reasonably satisfactory to the Trustee, to the effect
that, (A) the trust funds will not be subject to the rights of
Holders of Indebtedness of the Company other than the Securities
of such Series and (B) assuming no intervening bankruptcy of the
Company between the date of deposit and the 91st day following
the deposit and that no Holder of Securities of such Series is an
insider of the Company, after the 91st day following the deposit,
the trust funds will not be subject to any applicable bankruptcy,
insolvency, reorganization or similar law affecting creditors'
rights generally; and
(7) The Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions
precedent specified herein relating to the defeasance
contemplated by this Section 8.01 have been complied with. In
the event all or any portion of the Securities of a Series are to
be redeemed through such irrevocable trust, the Company must make
arrangements satisfactory to the Trustee, at the time of such
deposit, for the giving of the notice of such redemption or
redemptions by the Trustee in the name and at the expense of the
Company.
27
<PAGE>
(e) In addition to the Company's rights above under this Section 8.01, the
Company may terminate all of its obligations under this Indenture with
respect to a Series, when:
(1) All Securities of such Series theretofore authenticated and
delivered (other than Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in
Section 2.07 and Securities for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust) have been delivered to the Trustee
for cancellation or all such Securities not theretofore delivered
to the Trustee for cancellation have become due and payable and
the Company has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust solely for that purpose
an amount of money sufficient to pay and discharge the entire
Indebtedness on the Securities not theretofore delivered to the
Trustee for cancellation, for principal of and interest;
(2) The Company has paid or caused to be paid all other sums payable
hereunder by the Company;
(3) The Company has delivered irrevocable instructions to the Trustee
to apply the deposited money toward the payment of the Securities
at maturity or redemption, as the case may be; and
(4) The Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, stating that all conditions precedent
specified herein relating to the satisfaction and discharge of
this Indenture have been complied with.
Section 8.02. Survival of the Company's Obligations.
-------------------------------------
Notwithstanding the satisfaction and discharge of the Indenture under
Section 8.01, the Company's obligations in paragraph 9 of the Securities and
Sections 2.03 through 2.07, 4.01, 7.07, 7.08, 8.04 and 8.05, however, shall
survive until the Securities of an applicable Series are no longer outstanding.
Thereafter, the Company's obligations in paragraph 9 of the Securities of such
Series and Sections 7.07, 8.04 and 8.05 shall survive (as they relate to such
Series).
Section 8.03. Application of Trust Money.
--------------------------
The Trustee shall hold in trust money or U.S. government obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. government obligations in accordance with this Indenture
to the payment of principal of and interest on the Securities of the defeased
Series.
Section 8.04. Repayment to the Company.
------------------------
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<PAGE>
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time. The Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once in a newspaper of general circulation in the City of New York
or mail to each such Holder notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company,
Securityholders entitled to the money must look to the Company for payment as
general creditors unless applicable abandoned property law designates another
person and all liability of the Trustee or such Paying Agent with respect to
such money shall cease.
Section 8.05. Reinstatement.
-------------
If the Trustee is unable to apply any money or U.S. government obligations
in accordance with Section 8.01 by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture and the Securities relating to the Series shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.01 until
such time as the Trustee is permitted to apply all such money or U.S. government
obligations in accordance with Section 8.01; provided, however, that (a) if the
Company has made any payment of interest on or principal of any Securities of
the Series because of the reinstatement of their obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. government obligations held by the Trustee and
(b) unless otherwise required by any legal proceeding or any order or judgment
of any court or governmental authority, the Trustee shall return all such money
or U.S. government obligations to the Company promptly after receiving a written
request therefor at any time, if such reinstatement of the Company's obligations
has occurred and continue to be in effect.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders.
--------------------------
The Company and the Trustee may execute a supplemental indenture without
the consent of the Holders of Securities:
(1) to add to the covenants, agreements and obligations of the Company for
the benefit of the Holders of all the Securities of any Series or to
surrender any right or power conferred in this Indenture upon the
Company;
(2) to evidence the succession of another corporation to the Company and
the assumption by it of the obligations of the Company under this
Indenture and the Securities;
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<PAGE>
(3) to provide for the acceptance of appointment under this Indenture of a
successor Trustee with respect to the Securities and to add to or
change any provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts by more
than one Trustee;
(4) to establish the form or terms of a Series of Securities as permitted
by Section 2.01 of this Indenture;
(5) to provide that specific provisions of this Indenture shall not apply
to a Series of Securities not previously issued;
(6) to provide for uncertificated securities in addition to or in place of
certificated securities;
(7) to cure any ambiguity, omission, defect or inconsistency;
(8) to secure the Securities; or
(9) to make any other change that does not adversely affect the rights of
any Holder.
Section 9.02. With Consent of Holders.
-----------------------
The Company and the Trustee may amend or supplement this Indenture or the
Securities of a Series without notice to any Securityholder of such Series but
with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each such Series affected by the
amendment. Each such Series shall vote as a separate class. The Holders of a
majority in principal amount of the outstanding Securities of any Series may
waive compliance by the Company with any provision of the Securities of such
Series or of this Indenture relating to such Series without notice to any
Securityholder. Without the consent of each Securityholder of a Series
affected, however, an amendment, supplement or waiver, including a waiver
pursuant to Section 6.4, may not:
(1) reduce the amount of Securities of such Series whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including defaulted interest, on any Security;
(3) reduce the principal of or change the fixed maturity of any Security
or alter the provisions (including related definitions) with respect
to redemption of Securities pursuant to Article Three hereof or with
respect to any obligations on the part of the Company to offer to
purchase or to redeem Securities of a Series pursuant to the
Authorizing Resolution or supplemental indenture pertaining to such
Series;
30
<PAGE>
(4) make any Security payable in money or at a place other than that
stated in such Security;
(5) make any change in Sections 6.04, 6.07 or this 9.02 of this Indenture;
(6) adversely modify the ranking or priority of the Securities; or
(7) waive a continuing Default or Event of Default in the payment of the
principal of or interest on any Security.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed supplement, but it shall be
sufficient if such consent approves the substance thereof.
Section 9.03. Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
---------------------------------
A consent to an amendment, supplement or waiver by a Holder shall bind the
Holder and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security. Subject to the following paragraph,
any such Holder or subsequent Holder, however, may revoke the consent as to his
Security or portion of a Security. Such revocation shall be effective only if
the Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective. The Company may, but shall not be
obligated to, fix a record date for the purpose of determining the Holders of
Securities of any Series entitled to consent to any amendment, supplement or
waiver, which record date shall be at least 10 days prior to the first
solicitation of such consent. If a record date is fixed, then notwithstanding
the last sentence of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to revoke any consent previously given, whether or
not such Persons continue to be Holders after such record date. No such consent
shall be valid or effective for more than 90 days after such record date. After
an amendment, supplement or waiver becomes effective, it shall bind every
Holder, unless it makes a change described in any of clauses (1) through (7) of
Section 9.02, in which case, the amendment, supplement or waiver shall bind only
each Holder of a Security who has consented to it and every subsequent Holder of
a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security; provided that any such waiver shall not impair or
affect the right of any Holder to receive payment of principal of and interest
on a Security, on or after the respective due dates expressed in such Security,
or to bring suit for the enforcement of any such payment on or after such
respective dates without the consent of such Holder.
Section 9.05. Notation on or Exchange of Securities.
-------------------------------------
31
<PAGE>
If an amendment, supplement or waiver changes the terms of a Security, the
Company may require the Holder of the Security to deliver it to the Trustee, at
which time the Trustee shall place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms.
Section 9.06. Trustee to Sign Amendments, etc.
-------------------------------
Subject to Section 7.02(b), the Trustee shall sign any amendment,
supplement or waiver authorized pursuant to this Article if the amendment,
supplement or waiver does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE tEN
MISCELLANEOUS
Section 10.01. Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
Section 10.02. Notices.
-------
Any order, consent, notice or communication shall be sufficiently given if
in writing and delivered in person or mailed by first class mail, postage
prepaid, addressed as follows:
if to the Company:
Standard Pacific Corporation.
1565 W. MacArthur Boulevard
Costa Mesa, California 92626
Attention: Secretary
if to the Trustee:
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
32
<PAGE>
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed to
him by first class mail at his address as it appears on the registration books
of the Registrar and shall be sufficiently given to him if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it except that notice to the
Trustee shall only be effective upon receipt thereof by the Trustee.
If the Company mails notice or communications to the Securityholders, it
shall mail a copy to the Trustee at the same time.
Section 10.03. Communications by Holders with Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S) 312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements set forth
in Section 10.05) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set forth in
Section 10.05) stating that, in the opinion of such counsel, all such
conditions precedent and covenants, compliance with which constitutes
a condition precedent, if any, provided for in this Indenture relating
to the proposed action or inaction, have been complied with and that
any such section does not conflict with the terms of the Indenture.
33
<PAGE>
Section 10.05. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with.
Section 10.06. Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules for
its functions.
Section 10.07. Legal Holidays.
--------------
A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day on
which banking institutions in Los Angeles, California, Chicago, Illinois and New
York, New York are not required to be open. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period. A "Business Day" is any day other than a Legal Holiday.
Section 10.08. Governing Law.
-------------
The laws of the State of New York shall govern this Indenture and the
Securities of each Series.
Section 10.09. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 10.10. No Recourse Against Others.
--------------------------
34
<PAGE>
All liability described in paragraph 13 of the Securities of any director,
officer, employee or stockholder, as such, of the Company is waived and
released.
Section 10.11. Successors and Assigns.
----------------------
All covenants and agreements of the Company in this Indenture and the
Securities shall bind its successors and assigns. All agreements of the Trustee
in this Indenture shall bind its successors and assigns.
Section 10.12. Duplicate Originals.
-------------------
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 10.13. Severability.
------------
In case any one or more of the provisions contained in this Indenture or in
the Securities of a Series shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of such Securities.
35
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, all as of the date first above written.
STANDARD PACIFIC CORP.
By: /s/ Andrew H. Parnes
-----------------------------------
Name: Andrew H. Parnes
Title: Vice President - Finance,
Treasurer and Chief Financial
Officer
By: /s/ Clay A. Halvorsen
-----------------------------------
Name: Clay A. Halvorsen
Title: Vice President, Secretary and
General Counsel
THE FIRST NATIONAL BANK OF CHICAGO, as
Trustee
By: /s/ R. Tarnas
-----------------------------------
Name: R. Tarnas
Title: Vice President
(SEAL)
36
<PAGE>
EXHIBIT A
No. CUSIP No.: _______
[Title of Security]
STANDARD PACIFIC CORP., a Delaware corporation, promises to pay to or
registered assigns the principal sum of __________________[Dollars]/1/ on
[insert maturity date]
Interest Payment Dates: and
Record Dates: and
Authenticated:
Dated: Standard Pacific Corp.
(Seal)
By__________________
Title:
By__________________
Title:
, as Trustee, certifies that this is one of the Securities referred to in
the within mentioned Indenture.
By:________________________
Authorized Signatory
/1/ Or other currency. Insert corresponding provisions on reverse side of
Security in respect of foreign currency denomination or interest payment
requirement.
<PAGE>
STANDARD PACIFIC CORP.
[Title of Security]
1. Interest. STANDARD PACIFIC CORP. (the "Company"), a Delaware
--------
corporation, promises to pay interest on the principal amount of this Security
at the rate per annum shown above. The Company will pay interest semiannually
on __________________ and ______________ of each year until the principal is
paid or made available for payment. Interest on the Securities will accrue from
the most recent date to which interest has been paid or duly provided for or, if
no interest has been paid, from _______________, 19 , provided that, if there is
no existing default in the payment of interest, and if this Security is
authenticated between a record date referred to on the face hereof and the next
succeeding interest payment date, interest shall accrue from such interest
payment date. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Securities
-----------------
(except defaulted interest, if any, which will be paid on such special payment
date to Holders of record on such special record date as may be fixed by the
Company) to the persons who are registered Holders of Securities at the close of
business on the [Insert record dates]. Holders must surrender Securities 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.
3. Paying Agent and Registrar. Initially, (the
-------------------------- -------------------------
"Trustee") will act as Paying Agent and Registrar. The Company may change or
appoint 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 Securities under an Indenture dated
---------
as of ______________, 1998 ("Indenture") between the Company and the Trustee.
The terms of the Securities include those stated in the Indenture (including
those terms set forth in the Authorizing Resolution or supplemental indenture
pertaining to the Securities of the Series of which this Security is a part) and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
("TIA") as in effect on the date of the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the TIA
for a statement of them.
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture and the applicable Authorizing Resolution
or supplemental indenture. Requests may be made to: Standard Pacific Corp.,
1565 W. MacArthur Boulevard, Costa Mesa, California 92626, Attention: Secretary.
A-2
<PAGE>
5. Optional Redemption./1/ The Company may redeem the Securities at any
-------------------
time on or after ______________, ____, in whole or in part, at the following
redemption prices (expressed as a percentage of their principal amount) together
with interest accrued and unpaid to the date fixed for redemption:
If redeemed during the Twelve-Month period Percentage
commencing on ___________ and ending on
___________ in each of the following years
[Insert provisions relating to redemption at option of Holders, if any]
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Securities to be redeemed at
his registered address. Securities in denominations larger than $1,000 may be
redeemed in part. On and after the redemption date interest ceases to accrue on
Securities or portions of them called for redemption, provided that if the
Company shall default in the payment of such Security at the redemption price
together with accrued interest, interest shall continue to accrue at the rate
borne by the Securities.
6. Mandatory Redemption./2/ The Company shall redeem __% of the aggregate
--------------------
principal amount of Securities originally issued under the Indenture on each of
, which redemptions are calculated to retire % of the Securities originally
issued prior to maturity. Such redemptions shall be made at a redemption price
equal to 100% of the principal amount thereof, together with accrued interest to
the redemption date. The Company may reduce the principal amount of Securities
to be redeemed pursuant to this Paragraph 6 by the principal amount of any
Securities previously redeemed, retired or acquired, otherwise than pursuant to
this Paragraph 6, that the Company has delivered to the Trustee for cancellation
and not previously credited to the Company's obligations under this Paragraph 6.
Each such Security shall be received and credited for such purpose by the
Trustee at the redemption price and the amount of such mandatory redemption
payment shall be reduced accordingly.
7. Denominations, Transfer, Exchange. The Securities are in registered
---------------------------------
form without coupons in denominations of $1,000 and integral multiples of
$1,000. A Holder may transfer or exchange Securities by presentation of such
Securities to the Registrar or a co-Registrar with a request to register the
transfer or to exchange them for an equal principal amount of Securities of
other denominations. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required
- -------------------------
/1/ If applicable
/2/ If applicable. Insert different or additional denomination and multiples.
A-3
<PAGE>
by law or permitted by the Indenture. The Registrar need not transfer or
exchange any Security selected for redemption, except the unredeemed part
thereof if the Security is redeemed in part, or transfer or exchange any
Securities for a period of 15 days before a selection of Securities to be
redeemed. [If applicable. Insert different or additional denomination and
multiples.]
8. Persons Deemed Owners. The registered Holder of this Security shall be
---------------------
treated as the owner of it for all purposes.
9. Unclaimed Money. If money for the payment of principal or interest
---------------
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Company at its request. After that, Holders entitled to the money
must look to the Company for payment unless an abandoned property law designates
another person.
10. Amendment, Supplement, Waiver. Subject to certain exceptions, the
-----------------------------
Indenture or the Securities may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the outstanding
Securities of each Series affected by the amendment, and any past default or
compliance with any provision relating to any Series of the Securities may be
waived in a particular instance with the consent of the Holders of a majority in
principal amount of the outstanding Securities of such Series /3/. Without the
consent of any Securityholder, the Company and the Trustee may amend or
supplement the Indenture or the Securities to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Securities in addition to or in
place of certificated Securities, to create a Series and establish its terms or
to make any other change, provided such action does not adversely affect the
rights of any Securityholder.
11. Successor Corporation. If different terms apply, insert a brief
---------------------
summary thereof. When a successor corporation assumes all the obligations of
its predecessor under the Securities and the Indenture, the predecessor
corporation will be released from those obligations.
12. Trustee Dealings With Company. , the
----------------------------- --------------------------------
Trustee under the Indenture, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
affiliates, and may otherwise deal with the Company or its affiliates, as if it
were not Trustee.
13. 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 Securities or the Indenture or for any
claim based on, in respect of or by reason of, such
- --------------------------
/3/ If different terms apply, insert a brief summary thereof.
A-4
<PAGE>
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
14. Discharge of Indenture. The Indenture contains certain provisions
----------------------
pertaining to defeasance, which provisions shall for all purposes have the same
effect as if set forth herein.
15. Authentication. This Security shall not be valid until the Trustee
--------------
signs the certificate of authentication on the other side of this Security.
16. Abbreviations. Customary abbreviations may be used in the name of a
-------------
Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
A-5
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Security, fill in the form below:
I or we assign and transfer this Security to (Insert assignee's social
security or tax ID number) (Print or type assignee's name, address, and zip
code) and irrevocably appoint ________________ agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.
Date: ________________ Your signature:
(Sign exactly as your name appears
on the other side of this Security)
Signature
Guarantee:__________________________________
A-6
<PAGE>
================================================================================
FIRST SUPPLEMENTAL INDENTURE
by and between
STANDARD PACIFIC CORP.
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
--------------------------------
Dated as of April 13, 1999
--------------------------------
AUTHORIZING THE ISSUANCE OF
$150,000,000 IN AGGREGATE AMOUNT OF
8 1/2% SENIOR NOTES DUE 2009
(Supplemental to the Indenture dated as of April 1, 1999)
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE ONE SCOPE OF FIRST SUPPLEMENTAL INDENTURE...................1
ARTICLE TWO DEFINITIONS.............................................2
Section 2.01 Definitions.............................................2
ARTICLE THREE AUTHORIZATION AND TERMS.................................8
Section 3.01 Authorization...........................................8
Section 3.02 Terms...................................................8
ARTICLE FOUR REDEMPTION..............................................10
Section 4.01 Optional Redemption.....................................10
Section 4.02 Acceleration............................................10
Section 4.03 Change of Control.......................................10
ARTICLE FIVE REGISTRAR OF SECURITIES; PAYING AGENT...................12
ARTICLE SIX CERTAIN COVENANTS.......................................12
Section 6.01 Compliance with Securities Laws.........................12
Section 6.02 Limitation on Additional Indebtedness...................12
Section 6.03 Limitations on Liens....................................13
Section 6.04 Limitation on Restricted Payments.......................14
Section 6.05 Limitation on Asset Sales...............................15
Section 6.06 Transactions with Affiliates............................16
Section 6.07 Limitation on Payment Restrictions Affecting Restricted
Subsidiaries............................................17
Section 6.08 Restricted and Unrestricted Subsidiaries................18
Section 6.09 Mergers and Sales of Assets by the Company..............18
Section 6.10 Reports to Holders of the Notes.........................18
</TABLE>
-i-
<PAGE>
<TABLE>
Page
<C> <S> <C>
ARTICLE SEVEN EVENTS OF DEFAULT......................................19
Section 7.01 Additional Events of Default...........................19
Section 7.02 Inapplicability of Cure Provisions to Certain Events of
Default...............................................19
ARTICLE EIGHT MISCELLANEOUS..........................................19
Section 8.01 Governing Law..........................................19
Section 8.02 No Adverse Interpretation of Other Agreements..........19
Section 8.03 No Recourse Against Others.............................19
Section 8.04 Successors and Assigns.................................19
Section 8.05 Duplicate Originals....................................20
Section 8.06 Ranking................................................20
Section 8.07 Severability...........................................20
</TABLE>
-ii-
<PAGE>
EXHIBIT 4.2
STANDARD PACIFIC CORP.
FIRST SUPPLEMENTAL INDENTURE
----------------------------
This First Supplemental Indenture, dated as of April 13, 1999 (the
"First Supplemental Indenture"), is entered into between Standard Pacific Corp.,
a Delaware corporation (the "Company") and The First National Bank of Chicago,
as trustee (the "Trustee");
W I T N E S S E T H:
-------------------
WHEREAS, this First Supplemental Indenture is supplemental to the
Indenture, dated as of April 1, 1999 (the "Original Indenture," and as
supplemented, the "Indenture"), by and between the Company and the Trustee;
WHEREAS, the Company has determined to authorize up to $150,000,000 in
aggregate amount of its 8 1/2% Senior Notes due 2009 (the "Notes"), and
currently desires to issue Notes in the aggregate amount of $100,000,000;
WHEREAS, the Original Indenture provides that the Company may,
pursuant to Section 2.01 of the Original Indenture establish one or more Series
of Securities from time to time as authorized by a supplemental indenture; and
WHEREAS, all things necessary to make this First Supplemental
Indenture a valid agreement of the Company and the Trustee, in accordance with
its terms, and a valid amendment of, and supplement to, the Original Indenture
have been done.
NOW, THEREFORE, the parties hereto agree, as follows:
ARTICLE ONE
SCOPE OF FIRST SUPPLEMENTAL INDENTURE
The changes, modifications and supplements to the Original Indenture
affected by this First Supplemental Indenture shall be applicable only with
respect to, and govern the terms of, the Notes, which shall be limited in
aggregate principal amount to $150,000,000 in one or more series, and shall not
apply to any other Securities that may be issued under the Original Indenture
unless a supplemental indenture with respect to such other Securities
specifically incorporates such changes, modifications and supplements.
In the event that the Company shall issue and the Trustee shall
authenticate any Notes issued under this First Supplemental Indenture subsequent
to the Original Issue Date, the Company shall use its reasonable best efforts to
obtain the same "CUSIP" number for such Notes as is printed on the Notes
outstanding at such time; provided, however, that if any series of Notes issued
under this First Supplemental Indenture subsequent to the Original Issue Date is
determined, pursuant to an Opinion of Counsel for the Company in a form
reasonably satisfactory to the Trustee, to be a different class of security than
the Notes outstanding at such time for federal income tax purposes, the Company
may obtain a "CUSIP" number for such Notes that is different than the "CUSIP"
number printed on the Notes then outstanding.
1
<PAGE>
Notwithstanding the foregoing, all Notes issued under this First Supplemental
Indenture shall vote and consent together on all matters as one class and no
series of Notes will have the right to vote or consent as a separate class on
any matter.
ARTICLE TWO
DEFINITIONS
Section 2.01 Definitions. The following terms shall have the meaning set
forth below in this First Supplemental Indenture. Except as otherwise provided
in this First Supplemental Indenture, all words, terms and phrases defined in
the Original Indenture (but not otherwise defined herein) shall have the same
meaning herein as in the Original Indenture. To the extent terms defined herein
differ from terms defined in the Original Indenture the terms defined herein
will govern for purposes of this First Supplemental Indenture and the Notes.
"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 complementary (as defined in good faith by the
Board of Directors) to the business of the Company and the Restricted
Subsidiaries on the Original Issue Date.
"Asset Disposition" means any sale, lease, transfer or other disposition
(or series of related sales, leases, transfers or dispositions) by the 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
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.
"Change of Control" means the occurrence of any of the following events:
2
<PAGE>
(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% 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% 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 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 Original Issue Date, 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,
3
<PAGE>
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 Original Issue Date, 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 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 Original Issue Date, 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 December 31,
1998 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 such Subsidiary or Homebuilding
Joint Venture to the Company or to any of its consolidated Restricted
Subsidiaries exceeds the aggregate amount of
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<PAGE>
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 December 31, 1998 attributable to the Company or any
of its Restricted Subsidiaries, as determined in accordance with generally
accepted accounting principles as in effect on the Original Issue Date.
"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 Original
Issue Date, less (i) that portion of any increase in each of the Unrestricted
Subsidiaries' stockholders' equity subsequent to December 31, 1998 attributable
to the Company or any of its Restricted Subsidiaries, as determined in
accordance with generally accepted accounting principles, as in effect on the
Original Issue Date, 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 "Disqualified Stock" as defined in the Original
Indenture, except that for the purposes of this Series, "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 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 Section 4.03 herein.
"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 Original Issue Date 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.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"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
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<PAGE>
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.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes.
"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.
"Maturity" means the date on which the principal of the Notes becomes due
and payable, whether at the Stated Maturity or by declaration of acceleration,
call for redemption or otherwise.
"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 Original Issue Date; 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.
"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 (i) provision for all income and other taxes resulting from such asset
disposition, (ii) payment of all brokerage commissions, underwriting, legal,
accounting, appraisal and other fees and expenses related to such asset sale and
(iii) deduction of appropriate amounts to be provided by the Company or a
Restricted Subsidiary as a reserve, in accordance with GAAP, 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
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<PAGE>
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.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Original Issue Date" means the date of the original issue of the Notes
pursuant to the Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Notes means the dates specified in Section 3.02(f)(iii).
"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 Unrestricted Subsidiary, Homebuilding Joint Venture or any person in which
the Company, directly or indirectly, has an ownership interest but less than
100% 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, $25
million for any one Homebuilding Joint Venture or $100 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.
"Restricted Subsidiary" means any Wholly-Owned Subsidiary that has not been
designated an Unrestricted Subsidiary.
"Stated Maturity" means the date specified in the Notes as the fixed date
on which an amount equal to the principal of or interest on the Notes is due and
payable.
"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 Section 6.08 herein has been
designated in a resolution adopted by the Board of Directors of the Company as
an Unrestricted Subsidiary, in each case unless and until such Subsidiary shall,
in accordance with Section 6.08 herein, be designated by a resolution of the
Board of Directors of the Company as a Restricted Subsidiary; 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.
The Company hereby designates Family Lending Services, Standard Pacific Savings,
F.A., Standard Pacific Financing Inc. and Standard Pacific Financing L.P. as
Unrestricted Subsidiaries.
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<PAGE>
"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 any bank credit agreement or credit facility
entered into 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.
ARTICLE THREE
AUTHORIZATION AND TERMS
Section 3.01 Authorization. The Company hereby establishes the 8 1/2%
Senior Notes due 2009 as a Series of Securities of the Company. The form of
Note attached hereto as Exhibit A is hereby approved and authorized in
accordance with the provisions of the Indenture.
Section 3.02 Terms. The terms of the Series of Securities established
pursuant to this First Supplemental Indenture shall be as follows:
(a) Title. The title of the Series of Securities established hereby is the
-----
"8 1/2% Senior Notes due 2009."
(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 2.06, 2.07,
2.09, 3.06 and 9.05 of the Original Indenture and except for any Notes which,
pursuant to Section 2.02 of the Original Indenture, are deemed never to have
been authorized and delivered thereunder) is $150,000,000 of which $100,000,000
will be issued on the date hereof and the remainder of which will remain
available for future issuance.
(c) Book-Entry System. The Notes will be issued in the form of one or more
-----------------
securities in registered global form (the "Global Note") held in book-entry
form. The Depository Trust Company ("DTC") or its nominee will initially be the
sole registered holder of the Notes for all purposes under the Indenture.
A Global Note 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 Note is exchangeable for Notes in
definitive form only if (i) the Company notifies the Trustee in writing that DTC
is no longer willing or able to act as a depositary and the Company is unable to
locate a qualified successor within 90 days, or (ii) the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of Notes in
definitive form under the Indenture. In either instance, upon surrender by the
relevant Global Note Holder of its Global Note, Notes in definitive form will be
issued to each person that such Global Note Holder and DTC identifies as being
the beneficial owner of the related Notes. Any Global Note that is exchangeable
for Notes in definitive form pursuant to the preceding sentence
8
<PAGE>
will be transferred to, and registered and exchanged for, Notes in definitive
form in authorized denominations and registered in such names as the Depositary
holding such Global Note may direct. Subject to the foregoing, a Global Note is
not exchangeable, except for a Global Note of like denomination to be registered
in the name of the Depositary or its nominee. In the event that a Global Note
becomes exchangeable for Notes in definitive form, Notes in definitive form 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 Global Notes shall
--------------------------------
be payable to the Person in whose name a Global Note is registered at the close
of business (whether or not a Business Day) on the Regular Record Date (as set
forth in Section 3.02(f)(iii) below), for such interest payment, except (i) that
interest payable on April 1, 2009 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 2.11 of the Original Indenture.
(e) Stated Maturity. The date on which the principal of the Notes shall be
---------------
payable, unless accelerated pursuant to the Indenture, is April 1, 2009.
(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 April 16, 1999 or the
Interest Payment Date next preceeding the date of issuance of such Notes.
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months.
(ii) Interest Payment Dates. Interest on the Notes shall be payable
semiannually in arrears on April 1 and October 1 of each year, commencing
October 1, 1999.
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 April 1 and October 1 will be the immediately preceding
March 15 and September 15 (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
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<PAGE>
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 the Indenture may be served at Standard Pacific
Corp., 1565 West MacArthur Boulevard, Costa Mesa, California 92626,
Attention: Secretary.
ARTICLE FOUR
REDEMPTION
Section 4.01 Optional Redemption. The Company may not redeem Notes at its
option prior to April 1, 2004. Thereafter, the Company may redeem the Notes at
its 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. Such redemption will be at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest, if any, 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 April 1 of the years set forth below:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2004 104.250%
2005 102.833%
2006 101.417%
2007 and thereafter 100.000%
</TABLE>
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.
Section 4.02 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 Original Indenture.
Section 4.03 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% of the principal amount thereof plus accrued and unpaid interest, if any,
to the date of repurchase (subject to the right of Holders of
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<PAGE>
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 copy to the Trustee stating:
(a) 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% of the principal amount outstanding at the repurchase date
plus accrued and unpaid interest 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");
(b) the circumstances and relevant facts and relevant financial information
regarding such Change of Control;
(c) 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");
(d) that any Note not tendered or accepted for payment will continue to
accrue interest;
(e) that any Note accepted for payment shall cease to accrue interest after
the Repurchase Date;
(f) 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;
(g) 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
(h) 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 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 Section 4.03, the
Trustee shall act as the Paying Agent.
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ARTICLE FIVE
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.
ARTICLE SIX
CERTAIN COVENANTS
The Company covenants as follows:
Section 6.01 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 4.03 or 6.05 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.
Section 6.02 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 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: (i) Indebtedness under one or more Bank Credit Facilities in an
amount not in excess of $400 million; (ii) purchase money mortgages that are
Non-Recourse Indebtedness; (iii) obligations Incurred under letters of credit,
escrow agreements and surety bonds in the ordinary course of business; (iv)
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 (iv) may not exceed 98% of the value of the
Mortgages pledged to secure Indebtedness thereunder; and (v) Indebtedness
Incurred solely for the purpose of refinancing or repaying any existing
Indebtedness so long as (A) 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), (B) the maturity of such new Indebtedness is not earlier than that
of the existing Indebtedness to be refinanced or repaid, (C) 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, (D) the new
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Indebtedness is pari passu with or subordinate to the Indebtedness being
refinanced or repaid, and (E) the existing and new Indebtedness are obligations
of the same entity.
Section 6.03 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 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: (i) liens existing on
December 31, 1998; (ii) 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; (iii) 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; (iv) liens on or
leases of model home units; (v) Capitalized Lease Obligations entered into in
the ordinary course of business in amounts not in excess of $10,000,000 in the
aggregate; (vi) the replacement of any of the items set forth in clauses (i)
through (v) above, provided that (A) the principal amount of the Indebtedness
secured by liens shall not be increased, (B) 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, (C) the maturity of such
Indebtedness is not earlier than that of the Indebtedness to be refinanced, and
(D) 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; (vii) 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; (viii) liens or priorities incurred in the ordinary
course of business, such as laborers', employees', carriers', mechanics',
vendors' and landlords' liens or priorities; (ix) liens for certain taxes and
certain survey and title exceptions; (x) 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; (xi) liens on property
owned by any Homebuilding Joint Venture; (xii) 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 (xiii) 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 (i) through (xii) above, does not exceed $50,000,000.
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<PAGE>
Section 6.04 Limitation on Restricted Payments. The Company will not, nor
will it permit any Restricted Subsidiary to, directly or indirectly, (i) 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; (ii) 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 April 1, 2009); or (iii) make any Restricted Investment (such
payments or any other actions described in (i), (ii) and (iii) being referred to
herein collectively as, "Restricted Payments") unless (A) 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, (B) the Company is able
to Incur an additional $1.00 of Indebtedness pursuant to the first paragraph of
the covenant described under Section 6.02 herein, and (C) 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 (I) 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, (II) 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 Original Issue Date, of Capital Stock (other
than Disqualified Stock) of the Company, including Capital Stock (other than
Disqualified Stock) of the Company issued subsequent to the Original Issue Date
upon the conversion of Indebtedness of the Company initially issued for cash,
(III) 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 Original Issue
Date and included in the calculation of Restricted Payments, and (IV)
$40,000,000; provided, however, that the foregoing shall not prevent (aa) the
-------- -------
payment of any dividend within 60 days after the date of 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, (bb)
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
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<PAGE>
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 (II) above, (cc) 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 (II) above, or (dd) 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 Original Issue Date 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.
Section 6.05 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 (i)
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 (i), 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 (ii) 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
(A) a purchase of or an Investment in Additional Assets (other than cash or cash
equivalents), (B) repayment of indebtedness of the Company which is pari passu
---- -----
with the Notes, and/or (C) make an offer to acquire all or part of the Notes (or
indebtedness of the Company which is pari passu with 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 shall be required to offer to redeem Notes
pursuant to the provisions of this Section 6.05, 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. Not less than 30 days nor more
than 60 days prior to the Asset Sale Purchase Date, 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 Asset Sale Offer
is to be and shall be mailed by the Company or the Trustee to the Holders of the
Notes at their last registered 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:
(a) that the Asset Sale Offer is being made pursuant to this Section 6.05;
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<PAGE>
(b) the amount of Notes offered to be redeemed (the "Asset Sale Offer
Amount"), the purchase price and the Asset Sale Purchase Date;
(c) that any Note not tendered or accepted for payment will continue to
accrue interest;
(d) that any Note accepted for payment pursuant to the Asset Sale Offer
shall cease to accrue interest after the Asset Sale Purchase Date;
(e) 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;
(f) 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;
(g) that if Notes and Parity Debt 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 and Parity Debt on a pro rata basis or by lot or in
such other manner as the Trustee shall deem fair and appropriate; and
(h) 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 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 (g) 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 Section 6.05, the Trustee shall act as the
Paying Agent.
Section 6.06 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
16
<PAGE>
(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, (A) are set
forth in writing and (B) have been approved by a majority of the disinterested
members of the Board of Directors.
(b) The provisions of the foregoing paragraph shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant to the covenant described under
Section 6.04 herein; (ii) any issuance of securities, or other payments, awards
or grants in cash, securities or 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.
Section 6.07 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
for: (a) any encumbrance or restriction pursuant to an agreement in effect at
or entered into on the Original Issue Date; (b) 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; (c) any encumbrance or restriction pursuant to an agreement effecting a
Refinancing of Indebtedness Incurred pursuant to an agreement referred to in
clause (a) or (b) of this covenant (or effecting a Refinancing of such
Refinancing Indebtedness pursuant to this clause (c)) or contained in any
amendment to an agreement referred to in clause (a) or (b) of this covenant or
this clause (c); 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; (d) 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; (e)
in the case of clause (iii) above, restrictions contained in security agreements
or mortgages securing
17
<PAGE>
Indebtedness of a Restricted Subsidiary to the extent such restrictions restrict
the transfer of the property subject to such security agreements or mortgages;
(f) 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 (g) any restriction imposed by
applicable law.
Section 6.08 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 (i) Incur at least $1.00 of Indebtedness under the first
paragraph of the covenant described in Section 6.02 herein and (ii) make a
Restricted Payment of at least $1.00 under Section 6.04 herein.
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 Section 6.02 herein.
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 Section 6.08 have been complied with in connection with such designation.
The Company will not permit Standard Pacific of Texas, Inc., Standard
Pacific of Arizona, Inc. or Standard Pacific Construction, 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 Section 6.04 herein.
Section 6.09 Mergers and Sales of Assets by the Company. 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 obligor 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 Section 6.02.
Section 6.10 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.
18
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ARTICLE SEVEN
EVENTS OF DEFAULT
Section 7.01 Additional Events of Default. In addition to the Events of
Default specified in the Original Indenture, the following shall constitute
Events of Default under Section 6.01 of the Original Indenture with respect to
the Notes:
(i) 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, 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.
Section 7.02 Inapplicability of Cure Provisions to Certain Events of
Default. With respect to Section 6.01(3) of the Original Indenture, the failure
of the Company to comply with the covenant described under Section 6.09 herein
will constitute an Event of Default with notice as provided in Section 6.01 of
the Original Indenture, but without passage of time.
ARTICLE EIGHT
MISCELLANEOUS
Section 8.01 Governing Law. The laws of the State of New York shall
govern this First Supplemental Indenture and the Notes.
Section 8.02 No Adverse Interpretation of Other Agreements. This First
Supplemental Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this First Supplemental Indenture.
Section 8.03 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 this First Supplemental Indenture
or for any claim based on, in respect of or by reason of, such obligations or
their creation. Each Securityholder by accepting the Notes waives and releases
all such liability. The waiver and release are part of the consideration for
the issue of the Notes.
Section 8.04 Successors and Assigns. All covenants and agreements of the
Company in this First Supplemental Indenture and the Notes shall bind its
successors and assigns. All
19
<PAGE>
agreements of the Trustee in this First Supplemental Indenture shall bind its
successors and assigns.
Section 8.05 Duplicate Originals. The parties may sign any number of
copies of this First Supplemental Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement.
Section 8.06 Severability. In case any one or more of the provisions
contained in this First Supplemental Indenture or in the Notes shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this First Supplemental Indenture or the Notes.
(Remainder of page intentionally left blank)
20
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IN WITNESS WHEREOF, the parties hereto have executed this First
Supplemental Indenture by their officers thereunto as of this 13th day of April,
1999.
STANDARD PACIFIC CORP.
By: /s/ Andrew H. Parnes
-------------------------------------
Andrew H. Parnes
Vice President-Finance, Treasurer and
Chief Financial Officer
By: /s/ Clay A. Halvorsen
-------------------------------------
Clay A. Halvorsen
Vice President, General Counsel
and Secretary
THE FIRST NATIONAL BANK OF CHICAGO, as Trustee
By: /s/ R. Tarnas
-------------------------------------
Name: R. Tarnas
Title: Vice President
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EXHIBIT A
THIS NOTE IS A GLOBAL NOTE 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 NOTE 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) 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., 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.
No. R-1 CUSIP No.: 85375CAH4
8 1/2% Senior Notes due 2009
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 April 1, 2009.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Authenticated: April 16, 1999
Dated: April 16, 1999 Standard Pacific Corp.
By________________________________
Title:
By________________________________
Title:
The First National Bank of Chicago, as Trustee, certifies that
this is one of the Notes referred to in the within mentioned Indenture.
By________________________________
Authorized Signatory
A-1
<PAGE>
STANDARD PACIFIC CORP.
8 1/2% Senior Notes due 2009
1. Interest. STANDARD PACIFIC CORP. (the "Company"), a Delaware
--------
corporation, 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
April 1 and October 1 of each year (each an "Interest Payment Date"), commencing
October 1, 1999 until the principal is paid or made available for payment.
Interest on the Notes will accrue from the most recent date to which interest
has been paid or duly provided for or, if no interest has been paid, from April
16, 1999, provided that, if there is no existing default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such Interest Payment Date. Interest will be computed on the basis
of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes
-----------------
(except defaulted interest, if any, which will be paid on such special payment
date to Holders of record on such special record date as may be fixed by the
Company) to the persons who are registered Holders of Notes at the close of
business on the March 15 or September 15 immediately preceding the Interest
Payment 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.
3. Paying Agent and Registrar. Initially, The First National Bank of
--------------------------
Chicago (the "Trustee") will act as Paying Agent and Registrar. The Company may
change or appoint 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, 1999 between the Company and the Trustee (the "Original Indenture," and
as supplemented by a First Supplemental Indenture dated as of April 13, 1999
between the Company and the Trustee (the "First Supplemental Indenture"), the
"Indenture"). The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
("TIA") as in effect on the date of the Indenture. The Notes are subject to all
such terms, and Securityholders are referred to the Indenture and the TIA for a
statement of them.
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture. Requests may be made to: Standard
Pacific Corp., 1565 W. MacArthur Boulevard, Costa Mesa, California 92626,
Attention: Corporate Secretary.
A-2
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5. Optional Redemption. The Company may not redeem Notes at its option
-------------------
prior to April 1, 2004. Thereafter, the Company may redeem the Notes at its
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. Such redemption will be at the following redemption
prices (expressed in percentages of principal amount), plus accrued and unpaid
interest, if any, 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
April 1 of the years set forth below:
Year Redemption
---- Price
-----
2004 104.250%
2005 102.833%
2006 101.417%
2007 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.
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, provided that if the Company shall default in the
payment of such Note at the redemption price together with accrued interest,
interest shall continue to accrue at the rate borne by the Notes.
6. 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 to the date of
repurchase, as provided in, and subject to the terms of, the Indenture. In
addition, under certain circumstances, if the Company 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 and unpaid
interest to the date of purchase, as provided in, and subject to the terms of,
the Indenture.
7. Denominations, Transfer, Exchange. If the Notes are issued in global
---------------------------------
form, and this Note contains a legend in the face hereof to such effect, the
provisions of this Section 7 shall be deemed superseded by such legend and
Section 3.02(c) of the First Supplemental Indenture, to the extent the
provisions of this Section 7 are inconsistent with such legend or Section
3.02(c).
The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. A Holder may transfer or exchange Notes
by presentation of such Notes to the Registrar or a co-Registrar with a request
to register the transfer or to exchange them for an equal principal amount of
Notes of other denominations. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not
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<PAGE>
transfer or exchange any Note selected for redemption, except the unredeemed
part thereof if the Note is redeemed in part, or transfer or exchange any Notes
for a period of 15 days before a selection of Notes to be redeemed.
8. Persons Deemed Owners. The registered Holder of this Note shall be
---------------------
treated as the owner of it for all purposes.
9. Unclaimed Money. If money for the payment of principal or interest
---------------
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Company at its request. After that, Holders entitled to the money
must look to the Company for payment unless an abandoned property law designates
another person.
10. Amendment, Supplement, Waiver. Subject to certain exceptions, the
-----------------------------
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the outstanding Notes of
each Series affected by the amendment, and any past default or compliance with
any provision relating to any Series of the Notes may be waived in a particular
instance with the consent of the Holders of a majority in principal amount of
the outstanding Notes of such Series. Without the consent of any Securityholder,
the Company and the Trustee may amend or supplement the Indenture or the Notes
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to create a Series and
establish its terms or to make any other change, provided such action does not
adversely affect the rights of any Securityholder.
11. Defaults and Remedies. The following are Events of Default:
---------------------
(i) failure by the Company to pay interest on the Notes when due which default
continues for a period of 30 days or the principal of the Notes when due; (ii)
failure by the Company to perform any other covenant in the Notes or the
Indenture for 60 days after receipt by the Company of a notice of such Default;
(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 or insolvency.
In case an Event of Default (other than arising out of certain events
of bankruptcy or insolvency) 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 and unpaid
interest if any, 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 or insolvency occurs and is
continuing, the outstanding principal of and accrued and
A-4
<PAGE>
unpaid interest if any, 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 aggregate 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
Securityholder affected) may be waived by the Holders of a majority in aggregate
principal amount of Notes at the time outstanding upon the conditions provided
in the Indenture.
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.
13. Trustee Dealings With Company. The First National Bank of Chicago, the
-----------------------------
Trustee under the Indenture, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
affiliates, and may otherwise deal with the Company or its affiliates, as if it
were not Trustee.
14. 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 Securityholder 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.
15. Discharge of Indenture. The Indenture contains certain provisions
----------------------
pertaining to defeasance, which provisions shall for all purposes have the same
effect as if set forth herein.
16. Authentication. This Note shall not be valid until the Trustee signs
--------------
the certificate of authentication on the other side of this Note.
17. Abbreviations. Customary abbreviations may be used in the name of a
-------------
Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
A-5
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Insert assignee's social security or tax ID number)
_____________________
_____________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address, and zip code)
and irrevocably appoint _________________________________________________,
_______________________________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:_____________________
Your signature:
__________________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature
Guarantee:__________________________________
_______________________________________________________________________________
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company check
the Box: [_]
If you want to elect to have only a part of this Note purchased by the
Company state the amount:
$______________________
Date:_____________________
__________________________________
(Sign exactly as your name appears
on the other side of this Note)
<PAGE>
[LETTERHEAD OF GIBSON, DUNN & CRUTCHER]
EXHIBIT 5.1
April 13, 1999
(213) 229-7000 C 87007-01365
Standard Pacific Corp.
1565 West MacArthur Boulevard
Costa Mesa, California 92626
Re: Standard Pacific Corp.
Dear 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 2009
(the "Securities") pursuant to an Indenture, dated as of April 1, 1999 (the
"Indenture"), between the Company and The First National Bank of Chicago as
trustee (the "Trustee"). The Securities are to be offered pursuant to a
Registration Statement on Form S-3, File No. 333-64719 (the "Registration
Statement"), filed with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), as supplemented by a Prospectus Supplement, filed with the
Commission on April 14, 1999. The Securities are to be publicly offered and
sold by Donaldson, Lufkin & Jenrette, Salomon Smith Barney, Warburg Dillon
Read LLC, and Jefferies & Company, Inc. (collectively, the "Underwriters").
The Securities will be acquired by the Underwriters pursuant to the terms of
an Underwriting Agreement (the "Underwriting Agreement"), dated April 13,
1999, between the Company and the Underwriters.
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
<PAGE>
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
the 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.
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 & Crutcher LLP
GIBSON, DUNN & CRUTCHER LLP
RKM/JRH/GLS/LMF
2
<PAGE>
EXHIBIT 12.1
Standard Pacific Corp. and Subsidiaries
Ratio of Earnings to Fixed Charges - Continuing Operations
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Year Ended December 31,
---------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Fixed charges:
Total Interest Incurred $ 29,010 $ 17,026 $16,687 $ 19,200 $19,600
Interest factor in lease rentals 400 400 400 400 400
--------- -------- ------- -------- -------
Fixed Charges $ 29,410 $ 17,426 $17,087 $ 19,600 $20,000
========= ======== ======= ======== =======
Earnings & Adjustments:
Income (loss) from continuing operations
before income taxes $ 80,894 $ 41,046 $12,948 $(37,247) $11,200
Add (Deduct):
Noncash charges (1) - - - 46,491 -
Income from unconsolidated joint ventures (4,158) (3,787) (4,708) (6,953) (4,234)
Cash distributions from unconsolidated joint ventures 4,270 1,197 7,950 6,000 -
Fixed charges, above 29,410 17,426 17,087 19,600 20,000
Capitalized interest (27,842) (12,044) (9,545) (17,340) (19,600)
Amortization of previously capitalized interest 26,399 23,475 16,920 27,638 33,069
--------- -------- ------- -------- -------
Adjusted Earnings $ 108,973 $ 67,313 $40,652 $ 38,189 $40,435
========= ======== ======= ======== =======
Ratio of Earnings to Fixed Charges 3.71 3.86 2.38 1.95 2.02
========= ======== ======= ======== =======
</TABLE>
_____________
(1) The $46.5 million noncash charge recorded in 1995 represents a pretax
charge to operations for the Company's adoption of Financial Accounting
Standards No. 121.
<PAGE>
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) X
---
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
-----------------------------------
STANDARD PACIFIC CORP.
(Exact name of obligor as specified in its trust agreements)
Delaware 33-0475989
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1565 W. MacArthur Boulevard
Costa Mesa, California 92626
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
--------------------
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C.;
Federal Deposit Insurance Corporation,
Washington, D.C.; The Board of Governors of
the Federal Reserve System, Washington D.C..
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
------------------------------
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
-----------------
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 19th day of February,
1999.
The First National Bank of Chicago,
Trustee
By /s/ SANDRA L. CARUBA
-------------------------------------------
Sandra L. Caruba
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc., filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 19, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of the Indenture of Standard Pacific Corp.
to The First National Bank of Chicago, as Trustee, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
The First National Bank of Chicago
By: ______________________________________
Sandra L. Caruba
Vice President
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
RCFD BIL MIL THOU --------
---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RCFD
RC-A): ----
a. Noninterest-bearing balances and currency and coin(1)...................... 0081 4,898,646 1.a
b. Interest-bearing balances(2)............................................... 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A).................. 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)............... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under agreements to
resell........................................................................ 1350 6,071,229 3.
4. Loans and lease financing receivables: RCFD
a. Loans and leases, net of unearned income (from Schedule ----
RC-C)......................................................................... 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses.................................. 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve...................................... 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c).......................................... 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D)........................................... 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases)...................... 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M).................................. 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)................................................ 2130 153,385 8.
9. Customers' liability to this bank on acceptances outstanding.................. 2155 352,324 9.
10. Intangible assets (from Schedule RC-M)........................................ 2143 295,823 10.
11. Other assets (from Schedule RC-F)............................................. 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11)...................................... 2170 61,971,271 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands
---------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1)................................................ 2200 20,965,124 13.a
(1) Noninterest-bearing(1)................................................. 6631 9,191,662 13.a1
(2) Interest-bearing....................................................... 6636 11,773,462 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, and ----
IBFs (from Schedule RC-E, part II)......................................... 2200 15,912,956 13.b
(1) Noninterest bearing.................................................... 6631 475,182 13.b1
(2) Interest-bearing....................................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase:................................................................ RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury................................... RCON 2840 359,381 15.a
b. Trading Liabilities(from Sechedule RC-D)................................... RCFD 3548 5,614,049 15.b
RCFD
16. Other borrowed money: ----
a. With original maturity of one year or less................................. 2332 4,603,402 16.a
b. With original maturity of more than one year.............................. A547 328,001 16.b
c. With original maturity of more than three years .......................... A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding....................... 2920 352,324 18.
19. Subordinated notes and debentures............................................. 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)........................................ 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20)................................ 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus................................. 3838 0 23.
24. Common stock.................................................................. 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)...................... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves..................................... 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities.................................................................... 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments........................... 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27)............................. 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)......................................... 3300 61,971,271 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the bank
by independent external auditors as of any date during 1996.........RCFD 6724 .. N/A Number
M.1.
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state
public accounting firm which submits a report on the bank chartering authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
