EXHIBIT 1.1
STANDARD PACIFIC CORP.
$100,000,000 8% SENIOR NOTES DUE 2008
PURCHASE AGREEMENT
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February 5, 1998
SBC WARBURG DILLON READ INC.
BANCAMERICA ROBERTSON STEPHENS
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
as Initial Purchasers
c/o SBC Warburg Dillon Read Inc.
535 Madison Avenue
New York, New York 10022
Dear Sirs:
Standard Pacific Corp. (the "Company"), a Delaware corporation,
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proposes to issue and sell to SBC Warburg Dillon Read Inc., BancAmerica
Robertson Stephens and Donaldson, Lufkin & Jenrette Securities Corporation (the
"Initial Purchasers") $100,000,000 aggregate principal amount of its 8%
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Senior Notes due 2008 (the "Notes"). The Notes will be issued pursuant to an
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indenture (the "Indenture"), dated April 1, 1992, by and between the Company
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and United States Trust Company of New York, as trustee (the
"Trustee"). Capitalized terms used- but not otherwise defined herein shall
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have the meanings given to such terms in the Indenture or the Offering
Memorandum (as defined below).
The Notes will be offered and sold to the Initial Purchasers pursuant
to an exemption from the registration requirements under the Securities Act of
1933, as amended, and the rules and regulations thereunder (collectively, the
"Act") (the "Offering"). The Company has prepared a final offering memorandum,
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dated and available for distribution on the date hereof (the "Offering
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Memorandum"), relating to the Company and the Notes.
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The Initial Purchasers have advised the Company that the Initial
Purchasers intend, as soon as they deem advisable after this Purchase Agreement
has been executed and delivered, to resell (the "Exempt Resales") the Notes
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purchased by the Initial Purchasers under this Purchase Agreement
(this "Agreement") in private sales exempt from registration under the
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Act on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely to (i) persons whom the Initial Purchasers reasonably
believe to be "qualified institutional buyers," as defined in Rule 144A under
the Act ("QIBs"), in compliance with Rule 144A and (ii) other eligible
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purchasers pursuant to offers and sales that occur outside the U.S. within the
meaning of Regulation S
under the Act; the persons specified in clauses (i)-(ii) are sometimes
collectively referred to herein as the "Eligible Purchasers."
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Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date (as defined in
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Section 2 below), substantially in the form of Exhibit A to this Agreement, for
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so long as such Notes constitute "Transfer Restricted Securities" (as defined in
the Registration Rights Agreement). Pursuant to the Registration Rights
Agreement, the Company will agree to (A) file with the Securities and Exchange
Commission (the "Commission"), under the circumstances set forth in the
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Registration Rights Agreement, (i) a registration statement under the Act (the
"Exchange Offer Registration Statement") relating to the Company's 8% Senior
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Notes due 2008 to be offered in exchange (the "Exchange Notes") for the Notes
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(the "Exchange Offer") and/or (ii) a shelf registration statement pursuant to
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Rule 415 under the Act (the "Shelf Registration Statement" and, together with
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the Exchange Offer Registration Statement, the "Registration Statements")
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relating to the resale by certain holders of the Notes, and (B) use its best
efforts to cause such Registration Statements to be declared effective as soon
as practicable. This Agreement, the Notes, the Exchange Notes, the Indenture
and the Registration Rights Agreement are hereinafter sometimes referred to
collectively as the "Operative Documents."
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Upon original issuance of the Notes and until such time as the same is
no longer required under the applicable requirements of the Act, the Notes shall
bear the legend provided in the Offering Memorandum.
The Company and the Initial Purchasers agree as follows:
1. SALE AND PURCHASE. Upon the basis of the representations,
warranties and covenants contained in this Agreement, and subject to the other
terms and conditions herein set forth, the Company agrees to issue and sell to
the Initial Purchasers, and each Initial Purchaser agrees to purchase from the
Company, the aggregate principal amount of the Notes as set forth on Schedule 1
hereto. The purchase price for the Notes shall be 97.571% of their principal
amount.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Notes
shall be made to the Company by wire transfer of immediately available funds, to
an account of the Company designated by the Company at least two business days
prior to the payment date, against delivery of the certificates for the Notes
for the account of the Initial Purchasers. Delivery of, and payment of the
purchase price for, the Notes shall be made at 10:00 a.m., New York City time,
on the third business day following the date of this Agreement (the "Closing
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Date") at the
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offices of O'Melveny & Myers LLP, 610 Newport Center Drive, Newport Beach,
California. The Closing Date, and the location of delivery of, and the form of
payment for, the Notes may be varied by mutual agreement between the Initial
Purchasers and the Company.
One or more of the Notes in global form or certificated form, as the
case may be, registered in such names as the Initial Purchasers may request upon
at least one business day's notice prior to the Closing Date, having an
aggregate principal amount corresponding to the aggregate principal amount of
the Notes sold pursuant to Exempt Resales to QIBs, in the case of the Notes in
global form, and to other Eligible Purchasers, in the case of Notes in
certificated form sold pursuant to Regulation S, shall be delivered by the
Company to the Initial Purchasers (or as the Initial Purchasers direct), against
payment by the Initial Purchasers of the purchase price therefor by means of
transfer of immediately available funds (including book transfer) reasonably
acceptable to the Initial Purchasers and the Company to the order of the
Company. The Notes in global form shall be made available to the Initial
Purchasers for inspection not later than 9:30 a.m. on the business day
immediately preceding the Closing Date.
3. AGREEMENTS OF THE ISSUER. The Company covenants and agrees with
the Initial Purchasers as follows:
(a) To furnish the Initial Purchaser and those persons identified by
the Initial Purchaser, without charge, with as many copies of the Offering
Memorandum, and any amendments or supplements thereto, as the Initial
Purchasers may reasonably request for purposes contemplated by the Act.
The Company consents to the use of the Offering Memorandum, and any
amendments and supplements thereto required pursuant to this Agreement, by
the Initial Purchasers in connection with Exempt Resales that are in
compliance with Section 4(B) of this Agreement.
(b) Not to amend or supplement the Offering Memorandum prior to the
Closing Date unless the Initial Purchasers shall previously have been
advised of, and shall not have objected to (any such objection not to be
unreasonable), such amendment or supplement within a reasonable time, but
in any event not longer than five days after being furnished with a copy of
such amendment or supplement. The Company shall promptly prepare, upon the
Initial Purchasers' reasonable request, any amendment or supplement to the
Offering Memorandum that may be necessary or advisable in connection with
Exempt Resales.
(c) If, during the time that an Offering Memorandum is required to be
delivered in connection with any Exempt Resales or market-making
transactions after the date of this Agreement and prior to the consummation
of the Exchange Offer, any event shall occur that, in the judgment of the
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Company or in the judgment of counsel to the Initial Purchasers, makes any
statement of a material fact in the Offering Memorandum untrue or that
requires the making of any additions to or changes in the Offering
Memorandum in order to make the statements in the Offering Memorandum, in
the light of the circumstances under which they are made, not misleading,
or if it is necessary to amend or supplement the Offering Memorandum to
comply with all applicable laws, the Company shall promptly notify the
Initial Purchasers of such event and prepare an appropriate amendment or
supplement to the Offering Memorandum so that (i) the statements in the
Offering Memorandum as amended or supplemented will, in the light of the
circumstances at the time that the Offering Memorandum is delivered to
prospective Eligible Purchasers, not be misleading and (ii) the Offering
Memorandum will comply with applicable law.
(d) To furnish such information as may be required and otherwise to
cooperate with the Initial Purchasers and counsel to the Initial Purchasers
in qualifying the Notes and Exchange Notes for offering and sale under the
securities or Blue Sky laws of such jurisdictions as the Initial Purchasers
may request and to maintain such qualification in effect so long as
required for the Exempt Resales; provided that the Company shall not be
required to qualify as a foreign corporation in any jurisdiction in which
it is not so qualified or to file a general consent to service of process
in any such jurisdiction or subject itself to taxation in excess of a
nominal dollar amount in any such jurisdiction where it is not then so
subject (except service of process with respect to the offering and sale of
the Notes and Exchange Notes); and to promptly advise the Initial
Purchasers of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Notes or Exchange Notes for
sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose.
(e) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement becomes effective or is terminated, to
pay all costs, expenses, fees and disbursements of the Company (including
fees, expenses and disbursements of counsel) incident to and in connection
with: (i) the preparation, printing, filing and distribution of the
Offering Memorandum (including, without limitation, financial statements)
and all amendments and supplements thereto, (ii) the preparation and
delivery of the Operative Documents and all other agreements, memoranda,
correspondence and documents prepared and delivered in connection with this
Agreement and with the Exempt Resales, (iii) the issuance, transfer and
delivery by the Company of the Notes to the Initial Purchasers, (iv) the
qualification or registration of the Notes for offer and sale under the
securities or Blue Sky laws of the several states
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(including, without limitation, the cost of mailing a preliminary and final
Blue Sky memorandum and the fees and disbursements of counsel to the
Initial Purchasers relating thereto), (v) the furnishing of such copies of
the Offering Memorandum, and all amendments and supplements thereto, as may
be reasonably requested for use in connection with Exempt Resales, (vi) the
preparation of certificates for the Notes and Exchange Notes (including,
without limitation, printing and engraving thereof), (vii) the application
for eligibility of the Notes for trading in the Private Offerings, Resales
and Trading through Automated Linkages ("PORTAL") market of the National
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Association of Securities Dealers, Inc. ("NASD"), including, but not
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limited to, all application fees and expenses, (viii) the approval of the
Notes and Exchange Notes by The Depository Trust Company ("DTC") for "book-
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entry" transfer, (ix) the rating of the Notes and Exchange Notes by rating
agencies, (x) the fees and expenses of the Trustee and its counsel and (xi)
the performance by the Company of its other obligations under the Operative
Documents, including, but not limited to, the fees, disbursements and
expenses of the Company's counsel and accountants.
(f) To use the proceeds from the sale of the Notes in the manner
described in the Offering Memorandum under the caption "Use of Proceeds."
(g) To do and perform all things required to be done and performed
under this Agreement by it prior to or after the Closing Date and to use
commercially reasonable efforts to satisfy all conditions precedent on its
part to the delivery of the Notes.
(h) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Notes in a manner that would require the
registration under the Act of the sale of the Notes to the Initial
Purchasers or any Eligible Purchasers.
(i) From and after the Closing Date, for so long as any of the Notes
remain outstanding and are "restricted securities" within the meaning of
Rule 144(a)(3) under the Act and during which period, or any part thereof,
the Company is not subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to make available
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the information required by Rule 144A(d)(4) under the Act to (i) any holder
or beneficial owner of Notes in connection with any sale of such Notes and
(ii) any prospective purchaser of such Notes from any such holder or
beneficial owner designated by the holder or beneficial owner.
(j) To comply with all of its agreements set forth in
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the Registration Rights Agreement and all agreements set forth in the
representations letter of the Company to DTC relating to the approval of
the Notes by DTC for "book-entry" transfer.
(k) To use its best efforts to effect the eligibility of the Notes
for trading in the PORTAL market and to obtain approval of the Notes by DTC
for "book-entry" transfer.
(l) From and after the Closing Date, for so long as any of the Notes
remain outstanding, to deliver without charge to the Initial Purchasers,
promptly upon their becoming available, copies of (i) all reports and other
communications (financial or otherwise) that the Company shall mail or
otherwise make available to its security holders, (ii) all reports or
financial statements furnished to or filed by the Company with the
Commission or any national securities exchange and (iii) such other
publicly available information as the Initial Purchasers may reasonably
request regarding the Company and its subsidiaries.
(m) Prior to the Closing Date, to furnish to the Initial Purchasers,
as soon as they have been prepared by the Company, a copy of any regularly
prepared internal financial statements of the Company for any period
subsequent to the period covered by the financial statements appearing in
the Offering Memorandum and prior to the Closing Date.
(n) Not to distribute prior to the Closing Date any offering material
in connection with the offer and sale of the Notes other than the Offering
Memorandum.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. (A) The Company
represents and warrants to the Initial Purchasers that:
(1) The Company acknowledges that the Offering Memorandum has been
prepared in connection with the Exempt Resales. Neither the Offering
Memorandum nor any supplement or amendment thereto, contains any untrue
statement of a material fact or omits to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
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Company makes no representation or warranty with respect to information
contained in or omitted from the Offering Memorandum, as supplemented or
amended, in reliance upon and in conformity with information relating to
the Initial Purchasers furnished to the Company by the Initial Purchasers
expressly for use in the Offering Memorandum or any supplement or amendment
thereto. No order asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements of
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the Act has been issued or, to the knowledge of the Company, threatened.
(2) 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 Offering Memorandum 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 Offering Memorandum 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.
(3) The Company owns all of the outstanding capital stock and other
securities evidencing equity ownership of its subsidiaries (other than
Homebuilding Joint Ventures) free and clear of any pledge, fiduciary
transfer, security interest, claim, lien, limitation on voting rights or
encumbrance, and all such securities will have been duly authorized and
validly issued, fully paid and nonassessable and will not have been issued
in violation of, or subject to, any preemptive or similar rights. There
will not be any 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).
(4) The Company and each of its subsidiaries (other than Homebuilding
Joint Ventures) 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 Offering Memorandum 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, either individually or in the aggregate,
result in a Material Adverse Effect. A "Material Adverse Effect" means any
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material adverse effect on the business, condition (financial or other),
properties, assets, liabilities, results of operations or prospects of the
Company and its subsidiaries taken as a whole.
(5) The Company has all requisite corporate power and authority to
execute, deliver and perform all of its obligations under the Operative
Documents and to consummate
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the transactions contemplated by the Operative Documents and, without
limitation, the Company has all requisite corporate power and authority to
issue, sell and deliver the Notes.
(6) This Agreement has been duly and validly authorized, executed and
delivered by the Company.
(7) 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 Offering
Memorandum.
(8) The Notes have been duly and validly authorized for issuance and
sale to the Initial Purchasers by the Company and, when issued,
authenticated and delivered by the Company against payment by the Initial
Purchasers in accordance with the terms of this Agreement and the
Indenture, the Notes 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, except that enforceability of
the Notes 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 Notes,
when issued, authenticated and delivered, will conform in all material
respects to the description thereof in the Offering Memorandum.
(9) The Exchange Notes have been duly and validly authorized for
issuance by the Company and, when issued, authenticated and delivered by
the Company in accordance with the terms of the Exchange Offer and the
Indenture, the Exchange Notes 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, except that
enforceability of the Exchange Notes 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 Exchange Notes, when issued,
authenticated and delivered, will conform in all material respects to the
description thereof in the
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Offering Memorandum.
(10) The Registration Rights Agreement has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except that
(a) enforceability of the Registration Rights Agreement 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 (b) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws
and public policy considerations. The Registration Rights Agreement will
conform in all material respects to the description thereof in the Offering
Memorandum.
(11) 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 (collectively, "Agreements"),
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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.
(12) The execution, delivery or performance by the Company of this
Agreement and each of the other Operative Documents does not or will 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
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
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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. Assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 4(B) of this Agreement, 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 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) registration of the
Notes or Exchange Notes under the Act pursuant to the Registration Rights
Agreement, (iii) such as may be required by the NASD or (iv) 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.
(13) There is (i) except as set forth in the Offering Memorandum, 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 Offering Memorandum, 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 Notes or the Exchange Notes in any
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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 Notes or the Exchange Notes 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 Notes or the Exchange Notes 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.
(14) 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
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unwaivable "reportable event" (as defined in ERISA) has occurred with
respect to any "pension plan" (as defined in 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 "pension
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 "pension plan" that is maintained or
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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
from the Internal Revenue Service to that effect and nothing has occurred,
whether by action or by failure to act, that would adversely affect such
determination.
(15) Except as set forth in the Offering Memorandum, 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
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noncompliance or costs or liabilities that would not, either
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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 Offering Memorandum except as would not, either
individually or in the aggregate, result in a Material Adverse Effect.
(16) The Company and each of its subsidiaries has (i) good and
marketable title to all of the properties and assets described in the
Offering Memorandum as owned by it and good and marketable title to the
leasehold estates in the real and personal property described in the
Offering Memorandum as leased by it, free and clear of all Liens (as
defined in the Indenture), except for Liens described in the Offering
Memorandum, 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
"Authorization") to (a) carry on its business as it is currently being
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conducted and as described in the Offering Memorandum 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,
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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.
(17) 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") necessary to conduct the businesses operated by it
---------------------
as described in the Offering Memorandum. 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.
(18) 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; 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 or those currently payable without penalty
or interest. 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.
(19) 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.
-----------
(20) There are no holders of securities of the Company or any of its
subsidiaries who have the right to request or demand that the Company or
any of its subsidiaries register under the Act or analogous foreign laws
and regulations any of such securities held by any such holders, other than
as
13
provided for in the Registration Rights Agreement.
(21) 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.
(22) 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.
(23) Neither the Company nor any of its Affiliates (as defined in Rule
501(b) of Regulation D under the Act) has (A) taken, directly or
indirectly, any action designed to, or that might reasonably be expected
to, cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Notes or
(B) since February 1, 1998, (x) sold, bid for, purchased or paid any person
any compensation for soliciting purchases of the Notes in a manner that
would require registration of the Notes under the Act or (y) paid or agreed
to pay to any person any compensation for soliciting another to purchase
any other securities of the Company in a manner that would require
registration of the Notes under the Act.
(24) No registration under the Act of the Notes is required for the
sale of the Notes to the Initial Purchasers as contemplated by this
Agreement or for the Exempt Resales, assuming in each case that (A) the
purchasers who buy the Notes in the Exempt Resales are Eligible Purchasers
and (B) the accuracy of and compliance with the Initial Purchasers'
representations, warranties and covenants contained in Section 4(B) of this
Agreement. No form of general solicitation or general advertising (as
those terms are used in Regulation D under the Act) was used by the Company
or any of their representatives in connection with
14
the offer and sale of any of the Notes or in connection with Exempt
Resales, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising.
(25) The execution and delivery of this Agreement, the other Operative
Documents and the sale of the Notes and the Exchange Notes to be purchased
by the Eligible Purchasers will not involve any prohibited transaction
within the meaning of Section 406(a) of ERISA or Section 4975(c)(1)(A)-(D)
of the Code. The representation made by the Company in the preceding
sentence is made in reliance upon and subject to the accuracy of, and
compliance with, the representations and covenants made or deemed made by
the Eligible Purchasers as set forth in the Offering Memorandum under the
caption "Transfer Restrictions."
(26) The Offering Memorandum, as of its date, and each amendment or
supplement thereto, as of its date, contains the information specified in,
and meets the requirements of, Rule 144A(d)(4) under the Act.
(27) Since the respective dates as of which information is given in
the Offering Memorandum, except as otherwise expressly set forth therein,
neither the Company nor any of its subsidiaries had any material
liabilities or obligations, direct or contingent, not in the ordinary
course of business, that were not set forth in the Company's consolidated
balance sheet as of September 30, 1997, or in the notes thereto. Since the
respective dates as of which information is given in the Offering
Memorandum and up to the Closing Date, except as otherwise expressly set
forth in the Offering Memorandum, (a) none of the Company or its
subsidiaries has (1) incurred any liabilities or obligations, direct or
contingent, that are not in the ordinary course of business that would,
either individually or in the aggregate, result in a Material Adverse
Effect or (2) entered into any material transaction not in the ordinary
course of business, (b) there has not been any event or development in
respect of the business, development or financial condition of the Company
or any of its subsidiaries that would, either individually or in the
aggregate, result in a Material Adverse Effect, (c) there has been no
dividend or distribution of any kind declared, paid, or made by either the
Company or any of its subsidiaries on any class of its capital stock, and
(d) there has not been any change in the long-term debt of the Company and
its subsidiaries.
(28) Neither the Company nor any of its subsidiaries (nor any agent
acting on behalf of the Company) has taken, and none of them will take, any
action that might cause this
15
Agreement or the issuance or sale of the Notes or Exchange Notes to violate
Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of
the Board of Governors of the Federal Reserve System or analogous foreign
laws and regulations, in each case as in effect, or as the same may
hereafter be in effect, on the Closing Date.
(29) The accountants who have certified the audited financial
statements included as part of the Offering Memorandum 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 Offering Memorandum) and comply as to
form with the rules and regulations promulgated under the Act. All other
financial and statistical information and data included in the Offering
Memorandum are accurately presented in all material respects and prepared
on a basis consistent with the financial statements and the books and
records of the Company and its subsidiaries.
(30) The Company is not and, upon consummation of the sale of the
Notes, will not be (A) "insolvent" as that term is defined in Section
101(32) of the United States Bankruptcy Code (the "Bankruptcy Code") (11
---------------
U.S.C. (S) 101(32)), Section 2 of the Uniform Fraudulent Transfer Act
("UFTA") or Section 2 of the Uniform Fraudulent Conveyance Act ("UFCA"),
----- ----
(B) an entity with "unreasonably small capital" as that term is used in
Section 548(a)(2)(ii) of the Bankruptcy Code or Section 5 of the UFCA, (C)
engaged or about to engage in a business or transaction for which its
remaining property is "unreasonably small" in relation to the business or
transaction as that term is used in Section 4 of the UFTA or (D) unable to
pay its debts as they mature or become due, within the meaning of Section
548(a)(2)(B)(iii) of the Bankruptcy Code, Section 4 of the UFTA and Section
6 of the UFCA. The Company now owns and upon sale of the Notes hereunder
will own assets having a value both at "fair valuation" and at "present
fair saleable value" greater than the amount required to pay its "debts" as
they become due as such terms are used in Section 2 of the UFTA and Section
2 of the UFCA.
(31) There are no contracts, agreements or understandings between the
Company and any other person other than the Initial Purchasers that would
give rise to a
16
valid claim against the Company or the Initial Purchasers for a brokerage
commission, finder's fee or like payment in connection with the issuance,
purchase and sale of the Notes or Exchange Notes.
(32) The statistical and market-related data included in the Offering
Memorandum are based on or derived from sources that the Company believe to
be reliable and accurate.
(33) No forward-looking statement (within the meaning of Section 27A
of the Act and Section 21E of the Exchange Act) contained in the Offering
Memorandum has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.
(34) Each certificate signed by any officer of the Company and
delivered to the Initial Purchasers or counsel for the Initial Purchasers
pursuant to, or in connection with, this Agreement shall be deemed to be a
representation and warranty by the Company to the Initial Purchasers as to
the matters covered by such certificate.
The Company acknowledges that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 7
of this Agreement, the various attorneys acting as counsel to the Company and
counsel to the Initial Purchasers, will rely upon the accuracy and truth of the
foregoing representations and the Company hereby consents to such reliance.
(B) Each Initial Purchaser, severally and not jointly, represents,
warrants and covenants to the Company that it is a QIB with such knowledge and
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the securities. Each Initial
Purchaser, severally and not jointly, represents, warrants and agrees with the
Company that (i) it has not and will not solicit offers for, or offer or sell,
the Notes by any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Act and (ii) it has
and will solicit offers for the Notes only from, and will offer the Notes only
to, (x) persons whom the Initial Purchaser reasonably believes to be QIBs or, if
any such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented to
such Initial Purchaser that each such account is a QIB to whom notice has been
given that such sale or delivery is being made in reliance on Rule 144A, and, in
each case, in transactions under Rule 144A, or (y) persons other than U.S.
persons outside the U.S. in reliance on Regulation S.
Each Initial Purchaser, severally and not jointly,
17
represents and warrants to the Company that (i) it will comply with all
applicable laws and regulations in each jurisdiction in which it acquires,
offers, sells or delivers Notes or has in its possession or distributes the
Offering Memorandum; (ii) it understands that the Notes have not been registered
under the Securities Act and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons except in accordance with
Rule 144A or Regulation S under the Securities Act or pursuant to another
exemption from the registration requirements of the Securities Act; and (iii) it
agrees that, at or prior to confirmation of sales of all Notes sold pursuant to
Regulation S, it will have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases Notes from it
during the restricted period a confirmation or notice to substantially the
following effect:
The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered
and sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the
offering and the closing date, except in either case in accordance
with Regulation S (or Rule 144A if available) under the Securities
Act. Terms used above have the meanings given to them by Regulation
S.
Each Initial Purchaser, severally and not jointly, represents and
warrants to the Company that the source of funds being used by it to acquire the
Notes does not include the assets of any "employee benefit plan" (within the
meaning of Section 3(3) of ERISA) or any "plan" (within the meaning of Section
4975 of the Code).
Each Initial Purchaser understands that the Company and, for purposes
of the opinion to be delivered to them pursuant to Section 7(f) hereof, counsel
to the Company will rely upon the accuracy and truth of the foregoing
representations, and the Initial Purchasers hereby consent to such reliance.
5. INDEMNIFICATION. (a) The Company agrees to indemnify and hold
harmless each Initial Purchaser, each person, if any, who controls such Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, the agents, employees, officers and directors of such Initial
Purchaser and the agents, employees, officers and directors of any such
controlling person from and against any and all losses, liabilities, claims,
damages and expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all reasonable expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all reasonable
18
amounts paid in settlement of any claim or litigation) to which they or any of
them may become subject under the Act, the Exchange Act or otherwise insofar as
such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Offering Memorandum, or in any
supplement thereto or amendment thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
-------- -------
that the Company will not be liable in any such case to the extent, but only to
the extent, that any such loss, liability, claim, damage or expense arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information relating to such Initial Purchaser furnished to the
Company by that Initial Purchaser expressly for use therein. This indemnity
agreement will be in addition to any liability that the Company may otherwise
have, including, but not limited to, liability under this Agreement.
If any action is brought against an Initial Purchaser or any such
person in respect of which indemnity may be sought against the Company pursuant
to the foregoing paragraph, such Initial Purchaser or such person shall promptly
notify the indemnifying party in writing of the institution of such action and
the indemnifying party shall assume the defense of such action, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses, provided, however, that the omission to so
notify the indemnifying party shall not relieve the indemnifying party from any
liability which they may have to such Initial Purchaser or any such person or
otherwise. Such Initial Purchaser shall have the right to employ its own counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of the such Initial Purchaser unless the employment of such counsel
shall have been authorized in writing by the indemnifying party in connection
with the defense of such action or the indemnifying party shall not have
employed counsel to have charge of the defense of such action or such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them 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 direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the indemnifying party and paid as incurred (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (together with appropriate local
counsel) in any one action or series of related actions in the same jurisdiction
representing the indemnified parties who are parties to such action). The
indemnifying party shall not be liable for any settlement of any such claim or
19
action effected without its written consent but if settled with the written
consent of the indemnifying party, the indemnifying party agrees to indemnify
and hold harmless the Initial Purchaser and any such person from and against any
loss or liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle and the proposed
terms thereof. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(b) Each Initial Purchaser agrees to indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and each of its agents,
employees, officers and directors and the agents, employees, officers and
directors of such controlling person from and against any losses, liabilities,
claims, damages and expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all reasonable expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever and any and all reasonable amounts paid in
settlement of any claim or litigation) to which they or either of them may
become subject under the Act, the Exchange Act or otherwise insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Offering Memorandum, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but only
to the extent, that any such loss, liability, claim, damage or expense arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information relating to such Initial
20
Purchaser furnished to the Company by that Initial Purchaser in writing
expressly for use therein. The Company and the Initial Purchasers acknowledge
that the information set forth in Section 8 is the only information furnished in
writing by the Initial Purchasers to the Company expressly for use in the
Offering Memorandum.
If any action is brought against the Company or any such person in
respect of which indemnity may be sought against any Initial Purchaser pursuant
to the foregoing paragraph, the Company or such person shall promptly notify
that Initial Purchaser in writing of the institution of such action and the
Initial Purchaser shall assume the defense of such action, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses, provided, however, that the omission to so
notify the Initial Purchaser shall not relieve the Initial Purchaser from any
liability which they may have to the Company or any such person or otherwise.
The Company or such person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the Company or such person unless the employment of such counsel shall have been
authorized in writing by the Initial Purchaser in connection with the defense of
such action or the Initial Purchaser shall not have employed counsel to have
charge of the defense of such action or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to the Initial
Purchaser (in which case the Initial Purchaser shall not have the right to
direct the defense of such action on behalf of the indemnified party or parties,
but the Initial Purchaser may employ counsel and participate in the defense
thereof but the fees and expenses of such counsel shall be at the expense of the
Initial Purchaser), in any of which events such fees and expenses shall be borne
by the Initial Purchaser and paid as incurred (it being understood, however,
that the Initial Purchaser shall not be liable for the expenses of more than one
separate counsel in any one action or series of related actions in the same
jurisdiction representing the indemnified parties who are parties to such
action). Anything in this paragraph to the contrary notwithstanding, the
Initial Purchaser shall not be liable for any settlement of any such claim or
action effected without the written consent of the Initial Purchaser but if
settled with the written consent of the Initial Purchaser, the Initial Purchaser
agrees to indemnify and hold harmless the Company and any such person from and
against any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the
21
aforesaid request, (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle and the proposed
terms thereof. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
6. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 5 of this
Agreement is for any reason held to be unavailable from the indemnifying party,
or is insufficient to hold harmless a party indemnified under Section 5 of this
Agreement, the Company and the Initial Purchasers shall contribute to the amount
paid or payable by such indemnified party as a result of such aggregate losses,
claims, damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action or
any claims asserted) to which the Company and the Initial Purchasers may be
subject (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Initial Purchasers,
on the other hand, from the Offering or, (ii) if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, on the one hand, and the Initial Purchasers, on the other
hand, in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on the
one hand, and the Initial Purchasers, on the other hand, shall be deemed to be
in the same proportion as (x) the total proceeds from the Offering (net of
discounts and commissions but before deducting expenses) received by the Company
and (y) the total discounts and commissions received by the Initial Purchasers
as set forth in the table on the cover page of the Offering Memorandum. The
relative fault of the Company, on the one hand, and the Initial Purchasers, 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 Initial Purchasers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission or alleged statement or omission.
22
The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 6 were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to above. Notwithstanding the
provisions of this Section 6, (i) in no case shall an Initial Purchaser be
required to contribute any amount in excess of the amount by which the total
discount and commissions applicable to the Notes purchased by such Initial
Purchaser pursuant to this Agreement exceeds the amount of any damages that the
Initial Purchaser has otherwise been required to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 6, each person,
if any, who controls an Initial Purchaser within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Initial Purchaser, 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 shall have the same rights to contribution as the Company, subject
in each case to clauses (i) and (ii) of this paragraph. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim for contribution may be
made against another party or parties under this Section 6, notify such party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 6 or
otherwise; provided, however, that no additional notice shall be required with
-------- -------
respect to any action for which notice has been given under Section 5 for
purposes of indemnification. No party shall be liable for contribution with
respect to any action or claim settled without its written consent; provided,
--------
however, that such written consent was not unreasonably withheld.
- -------
7. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations
of the Initial Purchasers to purchase and pay for the Notes, as provided for in
this Agreement, shall be subject to satisfaction of the following conditions
prior to or concurrently with such purchase:
(a) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the date of this
Agreement and on the Closing Date. The Company shall have performed or
complied with all of the agreements contained in this Agreement and
required to be performed or complied with by them at or prior to the
Closing Date.
(b) No stop order suspending the qualification or
23
exemption from qualification of the Notes in any jurisdiction shall have
been issued and no proceeding for that purpose shall have been commenced or
shall be pending or threatened.
(c) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency that would, as of the Closing Date, prevent the issuance of the
Notes or the Exchange Offer; no action, suit or proceeding shall have been
commenced and be pending against or affecting or, to the best knowledge of
the Company threatened against the Company before any court or arbitrator
or any governmental body, agency or official that, if adversely determined,
would result in a Material Adverse Effect.
(d) Since the respective dates as of which information is given in
the Offering Memorandum, except as expressly set forth therein, neither the
Company nor any of its subsidiaries had any material liabilities or
obligations, direct or contingent, not in the ordinary course of business,
that were not set forth in the Company's consolidated balance sheet as of
September 30, 1997 or in the notes thereto. Since the respective dates as
of which information is given in the Offering Memorandum and up to the
Closing Date, except as otherwise expressly set forth in the Offering
Memorandum, (a) none of the Company or its subsidiaries has (1) incurred
any liabilities or obligations, direct or contingent, that would, either
individually or in the aggregate, result in a Material Adverse Effect or
(2) entered into any material transaction not in the ordinary course of
business, and (b) there has not been any event or development in respect of
the business, development or financial condition of the Company or any of
its subsidiaries that would, either individually or in the aggregate,
result in a Material Adverse Effect.
(e) The Initial Purchasers shall have received certificates, dated
the Closing Date, signed by (i) the Chief Executive Officer and (ii) the
chief financial or accounting officer of the Company confirming, as of the
Closing Date, the matters set forth in paragraphs (a), (b), (c) and (d) of
this Section 7.
(f) The Initial Purchaser shall have received on the Closing Date an
opinion (satisfactory to the Initial Purchasers and counsel for the Initial
Purchasers), 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 Savings, F.A.
("Savings"), Standard Pacific of Texas, Inc., Standard Pacific of
Orange County, Inc., and Standard Pacific of Fullerton, Inc.
24
(together, the "Subsidiaries") have been duly organized and are
validly existing as corporations;
(ii) the Indenture and the Notes conform in all material
respects to the descriptions thereof in the Offering Memorandum;
(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;
(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 Notes 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 Notes in accordance with the terms and provisions of this
Agreement and the consummation of the transactions contemplated
under this Agreement, the Indenture and the Notes will not
violate the provisions of
25
Section 1 of Article XV of the Constitution of the State of
California;
(vi) the issuance, offering and sale of the Notes to the
Initial Purchasers 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, such as may be required under the Act as
to which such counsel need express no opinion in this clause and
such as may be required under state securities or blue sky laws,
or (B) any statute, rule or regulation applicable to the Company
or any of the Subsidiaries;
(vii) the Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company, enforceable against the
Company in accordance with its terms subject (A) to the effect of
any applicable bankruptcy, reorganization, insolvency,
moratorium, arrangement and similar laws of general application
relating to or affecting creditors' rights, including, without
limitation, the effect of statutory or other law regarding
fraudulent conveyances, fraudulent transfers and preferential
transfers, and (B) to the limitations imposed by general
principles of equity (regardless of whether considered in a
proceeding at law or in equity);
(viii) the Exchange Notes have been duly authorized and,
when executed and authenticated in accordance with the provisions
of the Indenture and delivered in exchange for Notes in
accordance with the Indenture and the Exchange Offer, 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
26
whether considered in a proceeding at law or in equity);
(ix) the statements under the caption "Certain U.S.
Federal Income Tax Considerations" in the Offering Memorandum,
insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, fairly
present in all material respects such legal matters, documents
and proceedings;
(x) The Company is not or, after giving effect to the
offering and sale of the Notes and the application of the net
proceeds thereof as described in the Offering Memorandum, will
not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(xi) the Indenture complies as to form in all material
respects with the requirements of the TIA, and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder. It is not necessary in connection with the
offer, sale and delivery of the Notes to the Initial Purchasers
in the manner contemplated by this Agreement or in connection
with the Exempt Resales to qualify the Indenture under the TIA;
and
(xii) no registration under the Act of the Notes is
required for the sale of the Notes to the Initial Purchasers as
contemplated by this Agreement or for the Exempt Resales assuming
(i) that the Initial Purchasers are QIBs, (ii) the accuracy of,
and compliance with, the Initial Purchasers' representations and
agreements contained in Section 4(B) of this Agreement and (iii)
the accuracy of the representations of the Company set forth in
the second sentence of Section 4(A)(24) of this Agreement.
Such counsel shall also state that nothing has come to their attention
which causes them to believe that the Offering Memorandum, as of its date or the
date of such opinion, included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein in the light of the circumstances under which they were made,
not misleading (except that no comment need be made concerning the financial
statements and other financial information contained or incorporated by
reference therein).
(g) The Initial Purchasers shall have received on the Closing
Date an opinion (satisfactory to the Initial Purchasers and counsel to the
Initial Purchasers), dated the
27
Closing Date, of Clay A. Halvorsen, Esq., General Counsel of the Company, to the
effect that:
(i) the Company and each of the Subsidiaries other than
Savings (as to which no opinion need be expressed) are in good
standing under the laws of their respective jurisdictions of
organization, and are duly qualified to transact business as
foreign corporations and are in good standing under the laws of
each jurisdiction identified in a certificate of the Company,
executed by the President and the Vice President-Finance of the
Company, as being jurisdictions in which any of such entities
owns or leases property, maintains or has an office or is engaged
in the business of developing real property, building and selling
homes, 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 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 Subsidiaries have the
corporate power to own or lease their respective properties and
conduct their respective businesses as described in the Offering
Memorandum, 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 Offering Memorandum, and the issued shares of
capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable,
and are owned of record by the Company;
(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 Notes;
(vi) to the best knowledge of such counsel, (A) no legal or
governmental proceedings are pending to which the Company or any
of its
28
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 Offering Memorandum 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 Offering Memorandum
that is not described therein as required;
(vii) the issuance, offering and sale of the Notes to the
Initial Purchasers 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 Subsidiaries is a
party or by which the Company or any of its 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 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
Subsidiaries; and
(viii) to such counsel's knowledge, and except for the
Registration Rights Agreement, 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 (except as described in the Offering
Memorandum) or to require the Company to include such securities
with the Notes registered pursuant to any Registration Statement.
Such counsel shall also state that nothing has come to his attention
which causes him to believe that the Offering Memorandum, as of its date or the
date of such opinion, included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein in the light of the circumstances under which
29
they were made, not misleading (except that no comment need be made concerning
the financial statements and other financial information contained or
incorporated by reference therein).
(h) The Initial Purchasers shall have received on the Closing Date an
opinion (satisfactory in form and substance to the Initial Purchasers) dated the
Closing Date of O'Melveny & Myers LLP, special counsel to the Initial
Purchasers, covering substantially such matters as are customarily covered in
such opinions.
(i) The Initial Purchasers shall have received a "comfort letter"
from Arthur Andersen LLP, independent public accountants for the Company dated
as of the date of this Agreement, addressed to the Initial Purchasers and in
form and substance satisfactory to the Initial Purchasers and counsel to the
Initial Purchasers. In addition, as of the Closing Date, the Initial Purchasers
shall have received a "bring-down comfort letter" from Arthur Andersen LLP in
form and substance satisfactory to the Initial Purchasers and counsel to the
Initial Purchasers covering the same items and matters as covered in the
"comfort letter" but as of a date that is not more than three days prior to the
date thereof.
(j) The Notes shall have been approved as eligible for trading in the
PORTAL market, subject to official notice of issuance.
(k) Between the time of execution of this Agreement and the time of
purchase of the Notes, there shall not have occurred any downgrading, nor
shall any notice have been given of (i) any intended or potential
downgrading or (ii) any review or possible change that does not indicate an
improvement or reaffirmation, in the rating accorded any securities of or
guaranteed by the Company or any subsidiary of the Company by any
"nationally recognized statistical rating organization", as that term is
defined in Rule 436(g)(2) under the Act.
(l) The Initial Purchasers shall have been furnished with certified
copies of such documents as they may reasonably request.
(m) O'Melveny & Myers LLP, counsel to the Initial Purchasers, shall
have been furnished with such documents as they may reasonably request to
enable them to review or pass upon the matters referred to in this Section
7 and in order to evidence the accuracy, completeness or satisfaction in
all material respects of any of the representations, warranties or
conditions contained in this Agreement.
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by
30
the Initial Purchasers on notice to the Company at any time at or prior to the
Closing Date, and such termination shall be without liability of any party to
any other party except that the Company shall reimburse the Initial Purchasers
for all of the reasonable out-of-pocket expenses, including the reasonable
expense of Initial Purchasers' counsel, incurred by the Initial Purchasers in
connection with this Agreement. Notwithstanding any such termination, the
provisions of Sections 3(e), 5, 6, 9, 10(d) and 13 shall remain in effect.
The Company's obligation under this Agreement to sell the Notes to the
Initial Purchasers on the Closing Date is subject to the Initial Purchasers
purchasing and paying for all of the Notes.
8. INITIAL PURCHASERS' INFORMATION. The Company and the Initial
Purchasers severally acknowledge that the statements set forth in (i) the first
paragraph on page 3 concerning stabilization activities by the Initial
Purchasers; and (ii) the statements concerning the Initial Purchasers contained
in the third paragraph and the fourth and fifth sentences of the fourth
paragraph under the caption "Plan of Distribution" in the Offering Memorandum
constitute the only information furnished in writing by the Initial Purchasers
expressly for use in the Offering Memorandum.
9. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations
and warranties, covenants and agreements contained in this Agreement, including
the agreements contained in Sections 3(e) and 10(d), the indemnity agreements
contained in Section 5 and the contribution agreements contained in Section 6
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Initial Purchasers or any controlling
person thereof or by or on behalf of the Company or any controlling person of
any thereof, and shall survive delivery of and payment for the Notes to and by
the Initial Purchasers. The representations contained in Section 4 and the
agreements contained in Sections 3(e), 5, 6, 10(d) and 13 shall survive the
termination of this Agreement, including pursuant to Sections 7 and 10.
10. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective upon execution and delivery
of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Company from
the Initial Purchasers, without liability of any party to any other party (other
than as provided in Section 10(d) and with respect to Sections 5 and 6) if, on
or prior to such date, (i) the Company shall have failed, refused or been unable
to perform in any material respect any agreement on
31
its part to be performed under this Agreement, (ii) any other condition of the
obligations of the Initial Purchasers under this Agreement as provided in
Section 7 is not fulfilled when and as required in any material respect, (iii)
trading in securities generally on the New York Stock Exchange shall have been
suspended or materially limited, or minimum prices shall have been established
on such exchange by the Commission, or by such exchange or other regulatory body
or governmental authority having jurisdiction, (iv) a general banking moratorium
shall have been declared by U.S. federal or New York authorities, (v) there is
an outbreak or escalation of hostilities or other national or international
calamity on or after the date of this Agreement, or if there has been a
declaration by the United States of a national emergency or war, the effect of
which shall be, in the Initial Purchasers' judgment, to make it inadvisable or
impracticable to proceed with the offering or delivery of the Notes on the terms
and in the manner contemplated in the Offering Memorandum or (vi) there shall
have been such a material adverse change in general economic, political or
financial conditions or the effect (or potential effect if the financial markets
in the United States have not yet opened) of international conditions on the
financial markets in the United States shall be such as, in the Initial
Purchasers' judgment, to make it inadvisable or impracticable to proceed with
the offering or delivery of the Notes on the terms and in the manner
contemplated in the Offering Memorandum.
(c) Any notice of termination pursuant to this Section 10 shall be
given at the address specified in Section 11 below by telephone, telex,
telephonic facsimile or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any clause of
Section 10(b), or if the sale of the Notes provided for in this Agreement is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in this Agreement is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any agreement in this
Agreement or comply with any provision of this Agreement, the Company will,
subject to demand by the Initial Purchasers, reimburse the Initial Purchasers
for all of their reasonable out-of-pocket expenses (including the reasonable
fees and expenses of the Initial Purchasers' counsel) incurred in connection
with this Agreement.
11. NOTICE. All communications with respect to or under this
Agreement, except as may be otherwise specifically provided in this Agreement,
shall be in writing and, if sent to the Initial Purchasers, shall be mailed,
delivered, or telexed, telegraphed or telecopied and confirmed in writing to SBC
Warburg Dillon Read Inc., 535 Madison Avenue, New York, New York 10022
(telephone: (212) 906-7000), Attention: Corporate Finance Department, telecopy
number: (212) 593-0164; and if sent to the Company, shall be mailed, delivered
or telexed, telegraphed or
32
telecopied and confirmed in writing to Standard Pacific Corp., 1565 West
MacArthur Boulevard, Costa Mesa, California 92626, Attention: Chief Financial
Officer.
All such notices and communications shall be deemed to have been duly
given: (i) at the time delivered by hand, if personally delivered; (ii) five
business days after being deposited in the mail, postage prepaid, if mailed;
(iii) when answered back, if telexed; (iv) when receipt acknowledged if
telecopied; and (v) on the next business day, if timely delivered to an air
courier guaranteeing overnight delivery.
12. PARTIES. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Initial Purchasers and the Company and the
controlling persons and agents referred to in Sections 5 and 6, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
----------------------
as such, of Notes from the Initial Purchasers.
13. CONSTRUCTION. This Agreement shall be construed in accordance
with the internal laws of the State of New York (without giving effect to any
provisions thereof relating to conflicts of law) and each of the parties hereto
consent to the jurisdiction of the courts of the State of New York. Each of the
parties hereto agrees to submit to the jurisdiction of the courts of the State
of New York and the U.S. Federal Courts sitting in the City of New York for the
purposes of any suit, action or proceeding arising out of or relating to this
Indenture. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of the Initial Purchasers to
bring proceedings against the Company in the courts of any other jurisdiction.
14. CAPTIONS. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
15. COUNTERPARTS. This Agreement may be executed in various
counterparts and by the parties to this Agreement in separate counterparty, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
16. MISCELLANEOUS. SBC Warburg Dillon Read Inc., an indirect, wholly
owned subsidiary of Swiss Bank Corporation, is not a bank and is separate from
any affiliated bank, including any U.S. branch or agency of Swiss Bank
Corporation. Because SBC Warburg Dillon Read Inc. is a separately incorporated
entity, it is solely responsible for its own contractual obligations and
commitments, including obligations with respect to sales purchases of
securities. Securities sold, offered or recommended
33
by SBC Warburg Dillon Read Inc. are not deposits, are not insured by the Federal
Deposit Insurance Corporation, are not guaranteed by a branch or agency, and are
not otherwise an obligation or responsibility of a branch or agency.
A lending affiliate of SBC Warburg Dillon Read Inc. may have lending
relationships with issuers of securities underwritten or privately placed by SBC
Warburg Dillon Read Inc. To the extent required under the securities laws,
prospectuses and other disclosure documents for securities underwritten or
privately placed by SBC Warburg Dillon Read Inc. will disclose the existence of
any such lending relationships and whether the proceeds of the issue will be
used to repay debts owed to affiliates of SBC Warburg Dillon Read Inc.
Without our prior written approval, the U.S. branches and agencies of
Swiss Bank Corporation will not share with SBC Warburg Dillon Read Inc. any non-
public information concerning you, and SBC Warburg Dillon Read Inc. will not
share any non-public information received from us with any of such U.S. branches
and agencies of Swiss Bank Corporation.
34
If the foregoing correctly sets forth the understanding among the
Company and the Initial Purchasers, please so indicate in the space provided
below for the purpose, whereupon this letter and your acceptance shall
constitute a binding agreement between the Company and the Initial Purchasers.
STANDARD PACIFIC CORP.
By:________________________________
Name:
Title:
S-1
Confirmed and accepted as
of the date first above
written:
SBC WARBURG DILLON READ INC.
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
BANCAMERICA ROBERTSON STEPHENS
By:____________________________
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:____________________________
Name:
Title:
S-2
SCHEDULE 1
----------
PRINCIPAL AMOUNT
OF
INITIAL PURCHASERS NOTES
- ------------------ ----------------
SBC Warburg Dillon Read Inc..................... $ 40,000,000
BancAmerica Robertson Stephens.................. 30,000,000
Donaldson, Lufkin & Jenrette
Securities Corporation........................ 30,000,000
-----------
$ 100,000,000
Exhibit A
---------
Form of Registration Rights Agreement
A-1