EXHIBIT 4.6
STANDARD PACIFIC CORP.
OFFICERS' CERTIFICATE
---------------------
Pursuant to Sections 2.01 and 2.03(a) of the Indenture, dated as of April
1, 1992 (the "Indenture"), between Standard Pacific Corp., a Delaware
corporation (the "Company"), and United States Trust Company of New York, as
Trustee (the "Trustee"), the undersigned, Stephen J. Scarborough and Andrew H.
Parnes, the President and Vice President, Treasurer and Chief Financial Officer
of the Company, respectively, hereby certify on behalf of the Company as
follows:
1. Authorization. The establishment of 8% Series A Senior Notes as
a series of Securities of the Company (the "Notes") has been approved and
authorized in accordance with the provisions of the Indenture. The form of
Note attached hereto as Exhibit A has been approved and authorized in
accordance with the provisions of the Indenture.
2. Compliance with Conditions Precedent. All conditions precedent
provided for in the Indenture relating to the establishment and issue of
the Notes as a series of Securities of the Company and the establishment
of a form of Note as a Security have been complied with.
3. Terms. The terms of the series of Securities established
pursuant to this Officers' Certificate shall be as follows:
(a) Title. The title of the series of Securities established
hereby is the "8% Series A Senior Notes due 2008."
(b) Aggregate Principal Amount. The limit upon the aggregate
principal amount of the Notes which may be authenticated and
delivered under the Indenture (except for Notes authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Notes pursuant to Sections 2.08, 2.09, 2.11, 3.06 and
9.05 of the Indenture and except for any Notes which, pursuant to
Section 2.04 of the Indenture, are deemed never to have been
authorized and delivered thereunder) is $175,000,000 of which up to
$100,000,000 will be issued on the date hereof and the remainder of
which will remain available for future issuance.
(c) Book-Entry System.
(i) Form. The Notes shall be issued in the form of one or
more permanent global Notes (each a "Global Note"), registered in
the name of the Depositary (as defined in the Indenture) or its
nominee, substantially in the form of Exhibit A, deposited with
the Trustee, as custodian for the Depositary or its nominee, duly
executed by the Company and authenticated by the Trustee as
herein provided.
(ii) Global Legend. Each Global Note shall bear the
following legend (the "Global Legend") on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET,
NEW YORK, NEW YORK), A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
2
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS GLOBAL
SECURITY IS EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.
(iii) Book-Entry Provisions for Global Notes.
(A) No members of, or participants in, the Depositary ("Agent
Members") shall have any rights under the Indenture with respect
to any Global Note held on their behalf by the Depositary, or the
Trustee as its custodian, or under the Global Note, and the
Depositary may be treated by the Company, the Trustee and any
agent of any of them as the absolute owner of such Global Note
for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any
agent of any of them from giving effect to any written
certification, proxy or other authorization furnished by the
Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Global Note.
(B) Except as provided in the following sentence transfers of a
Global Note shall be limited to transfers of such Global Note in
whole, but not in part, to the Depositary, its successors or
their respective nominees. Physical certificated Notes
("Certificated Notes") shall be transferred to all beneficial
owners in exchange for their beneficial interests in any Global
Note if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for such Global
Note and a successor depository is not appointed by the Company
within 90 days of such notice, (ii) the Company, in its sole
discretion, shall so request or (iii) an Event of Default has
occurred and is continuing and the Registrar shall have received
a request from the Depository to issue such Certificated Notes.
(C) In connection with the transfer of an entire Global Note to
beneficial owners pursuant to subparagraph (B) of this paragraph,
the Global Note shall be deemed to be surrendered to the Trustee
for cancellation, and the Company shall execute, and the Trustee
shall authenticate and deliver, to
3
each beneficial owner identified by the Depositary in exchange for its
beneficial interest in such Global Note an equal aggregate principal
amount of Certificated Notes of authorized denominations.
(d) Persons to Whom Interest Payable. Interest on the Notes shall
be payable to the person in whose name a Note is registered at the
close of business (whether or not a Business Day) on the Regular
Record Date (as defined in the Indenture), for such interest payment,
except (i) that interest payable on February 15, 2008 shall be payable
to the person to whom principal is payable, and (ii) that default
interest shall be payable in the manner provided in Section 2.13 of
the Indenture.
(e) Stated Maturity. The date on which the principal of the
Notes shall be payable, unless accelerated pursuant to the Indenture,
is February 15, 2008.
(f) Rate of Interest; Interest Payment Dates; Regular Record
Dates; Overdue Principal and Interest.
(i) Rate of Interest. The principal amount of each of the
Notes shall bear simple interest at the rate of 8% per annum. The
date from which interest shall accrue for each of the Notes shall
be February 10, 1998 or in the case of Notes issued after August
15, 1998, the Interest Payment Date next preceding the date of
issuance of such Notes. Interest shall be computed on the basis of
a 360-day year of twelve 30-day months.
(ii) Interest Payment Dates. Interest on the Notes shall
be payable semiannually in arrears on February 15 and August 15 of
each year, commencing August 15, 1998.
If any Interest Payment Date or Maturity of the Notes falls
on a day that is not a Business Day, the payment due on such
Interest Payment Date or at Maturity will be made on the following
day that is a Business Day as if it were made on the date such
payment was due and no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date
or Maturity, as the case may be.
(iii) Regular Record Dates. The Regular Record Dates for
interest payable on each February 15 and August 15 will be the
immediately preceding February 1 and August 1 (whether or not a
Business Day), respectively.
(iv) Overdue Principal and Interest. Overdue principal
and, to the extent payment of such interest shall be legally
enforceable, overdue installments of interest shall bear interest
at the rate of 8% per annum.
4
(g) Place of Payment; Registration of Transfer and Exchange;
Notices to Company.
(i) Place of Payment. Payment of the principal of and
interest on the Notes will be made at the Corporate Trust Office
of the Trustee in the Borough of Manhattan, The City of New York,
and at any other office or agency designated by the Company for
such purpose; provided, however, that at the option of the
-------- -------
Company, payment of interest due (other than at Maturity or upon
Redemption) may be made by check mailed to the address of the
person entitled thereto as such address shall appear in the
register of Securities.
(ii) Registration of Exchange and Transfer. Notes may be
presented for exchange and registration of transfer at the
Corporate Trust Office of the Trustee in the Borough of Manhattan,
The City of New York, or at the office of any transfer agent
hereafter designated by the Company for such purpose.
5
(iii) Notices to Company. Notices and demands to or upon the
Company in respect to the Notes and the Indenture may be served
at Standard Pacific Corp., 1565 West MacArthur Boulevard, Costa
Mesa, California 92636, Attention: Vice President and Treasurer.
(h) Optional Redemption. Except as set forth in the following
paragraph, the Notes will not be redeemable at the option of the
Company prior to February 15, 2003. Thereafter, the Notes will be
redeemable, at the Company's option, in whole or in part, at any time
or from time to time, upon not less than 30 nor more than 60 days'
prior notice mailed by first-class mail to each Holder's registered
address, at the following redemption prices (expressed in percentages
of principal amount), plus accrued and unpaid interest to the
redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the 12-month period commencing on
February 15 of the years set forth below:
Redemption
Year Price
---- ----------
2003....................................... 104.00%
2004....................................... 102.67%
2005....................................... 101.33%
2006 and thereafter........................ 100.00%
If less than all of the Notes are to be redeemed, the Trustee
will select the Notes to be redeemed on a pro rata basis, by lot or by
such other method as the Trustee in its sole discretion shall deem to
be fair and appropriate.
(i) Acceleration. The principal amount of the Notes shall be
payable upon declaration of acceleration of the maturity thereof
pursuant to Section 6.02 of the Indenture.
(j) Change of Control. Upon the occurrence of a Change of
Control, each Holder shall have the right to require that the Company
repurchase all or a portion of such Holder's Notes at a purchase price
in cash equal to 101 percent of the principal amount thereof plus
accrued and unpaid interest to the date of repurchase (subject to the
right of Holders of record on the relevant record date to receive
interest due on the relevant interest payment date), in accordance
with the provisions of the next paragraph.
Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder with a copy to the Trustee stating:
6
(aa) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase such Holder's Notes
at a purchase price in cash equal to 101 percent of the principal
amount outstanding at the repurchase date plus accrued and unpaid
interest to the date of repurchase (subject to the right of
Holders of record on the relevant record date to receive interest
on the relevant interest payment date) (the "Repurchase Price");
(bb) the circumstances and relevant facts and relevant financial
information regarding such Change of Control;
(cc) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed) (the
"Repurchase Date");
(dd) that any Note not tendered or accepted for payment will continue
to accrue interest;
(ee) that any Note accepted for payment shall cease to accrue interest
after the Repurchase Date;
(ff) that Holders electing to have a Note purchased will be required
to surrender the Note, with the form entitled "Option of Holder
to Elect Purchase" on the reverse side of the Note completed, to
the Paying Agent at the address specified in the Notice at least
five days before the Repurchase Date;
(gg) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than three days prior to the
Repurchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount
of the Note the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have the Note
purchased; and
(hh) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered.
On the Repurchase Date, the Company shall (i) accept for payment
Notes or portions thereof properly tendered, (ii) deposit with the
Paying Agent money sufficient to pay the purchase price of all Notes
or portions thereof so accepted and (iii) deliver to the Trustee Notes
so accepted together with an Officers' Certificate stating the Notes
or portions thereof accepted for payment by the Company. The Paying
Agent shall promptly mail or deliver to Holders of Notes so accepted,
payment in an amount equal to the Repurchase Price, and the Trustee
shall promptly authenticate and mail or deliver to such Holders a new
Note equal
7
in principal amount of any unpurchased portion of the Note
surrendered. The Company will publicly announce the results on or as
soon after as practical the Repurchase Date. For purposes of this
paragraph (j), the Trustee shall act as the Paying Agent.
(k) Registrar of Securities; Paying Agent. The Company hereby
appoints the Trustee as the Registrar and initial Paying Agent. The
books of the Registrar of the Securities for the Notes will be
initially maintained at the Corporate Trust Office of the Trustee.
(l) Compliance with Securities Laws. The Company shall comply, to
the extent applicable, with the requirements of Section 14(e) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
any other securities laws or regulations in connection with the
repurchase of Notes pursuant to Section 3(h), 3(j), 3(m)(i) or 3(m)(v)
hereunder. To the extent that the provisions of any securities laws or
regulations conflict with said provisions hereunder, the Company shall
comply with the applicable securities laws and regulations and shall
not be deemed to have breached its obligations under said provisions
hereunder by virtue thereof.
(m) Certain Covenants of the Company. The Company covenants as
follows:
(i) Maintenance of Consolidated Net Worth. The Company shall
furnish to the Trustee a certificate (signed by a Vice President,
and by its Treasurer, its Secretary or an Assistant Secretary)
within 45 days after the end of each fiscal quarter of the Company
(90 days after the end of its fiscal year) setting forth the
Consolidated Net Worth of the Company and its Restricted
Subsidiaries at the end of such fiscal quarter. If the
Consolidated Net Worth of the Company and its Restricted
Subsidiaries at the end of any two consecutive fiscal quarters is
less than $200,000,000, then the Company shall make an offer to
all Holders to acquire (the "Offer") on the last day of the fiscal
quarter next following such second fiscal quarter or, if such
second fiscal quarter ends on the last day of the Company's fiscal
year, 135 days after the end of such second fiscal quarter (the
"Purchase Date"), 10% of the aggregate principal amount of Notes
originally issued (or, if less than 10% of the principal amount of
the Notes originally issued are then outstanding, then all of the
Notes outstanding at that time, such amount being referred to as
the "Offer Amount") at a purchase price equal to 100% of the
aggregate principal amount thereof together with accrued and
unpaid interest to the Purchase Date. In no event shall the
failure to meet the minimum Consolidated Net Worth stated above at
the end of any fiscal quarter be counted toward more than one
Offer.
8
The Company shall provide the Trustee with notice of the
Offer at least 45 days before any such Purchase Date and at least
10 days before the notice of any Offer is mailed to Holders. The
Company shall notify the Trustee promptly after the occurrence of
any of the events specified in this paragraph (i).
Notice of an Offer shall be mailed by the Trustee not less
than 30 days nor more than 60 days before the Purchase Date to
the Holders of the Notes at their last registered address. The
Offer shall remain open from the time of mailing until 5 days
before the Purchase Date. The Notice shall be accompanied by a
copy of the information regarding the Company required to be
contained in a Quarterly Report on Form 10-Q for the second
fiscal quarter referred to above if such second fiscal quarter is
one of the Company's first three fiscal quarters. If such second
fiscal quarter is the Company's last fiscal quarter, a copy of
the information required to be contained in an Annual Report to
Shareholders pursuant to Rule 14a-3 under the Exchange Act for
the fiscal year ending with such second fiscal quarter shall
either accompany the notice or be mailed to Holders not less than
15 days before the Purchase Date. The Notice shall contain all
instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Offer. The Notice, which shall
govern the terms of the Offer, shall state:
(aa) that the Offer is being made pursuant to this paragraph
(m)(i);
(bb) the Offer Amount, the purchase price and the Purchase Date;
(cc) that any Note not tendered or accepted for payment will
continue to accrue interest;
(dd) that any Note accepted for payment pursuant to the Offer
shall cease to accrue interest after the Purchase Date;
(ee) that Holders electing to have a Note purchased pursuant to
an Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the
reverse side of the Note completed, to the Paying Agent at
the address specified in the Notice at least five days
before the Purchase Date;
(ff) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than three days prior
to the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder,
the principal amount of the
9
Note the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have the Note
purchased;
(gg) that if Notes in a principal amount in excess of the Offer
Amount are tendered pursuant to the Offer, the Company shall
purchase Notes on a pro rata basis or by lot or in such
other manner as the Trustee shall deem fair and appropriate;
and
(hh) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered.
On the Purchase Date, the Company shall (i) accept for
payment Notes or portions thereof properly tendered pursuant to
the Offer (on a pro rata basis, by lot or in such other manner
specified by the Trustee if required pursuant to paragraph (gg)
above), (ii) deposit with the Paying Agent money sufficient to
pay the purchase price of all Notes or portions thereof so
accepted and (iii) deliver to the Trustee Notes so accepted
together with an Officers' Certificate stating the Notes or
portions thereof accepted for payment by the Company. The Paying
Agent shall promptly mail or deliver to Holders of Notes so
accepted, payment in an amount equal to the purchase price, and
the Trustee shall promptly authenticate and mail or deliver to
such Holders a new Note equal in principal amount of any
unpurchased portion of the Note surrendered. Any Notes not so
accepted shall be promptly mailed or delivered by the Company to
the Holder thereof. The Company will publicly announce the
results of the Offer on or as soon as practicable after the
Purchase Date. For purposes of this paragraph (m)(i), the Trustee
shall act as the Paying Agent.
(ii) Limitation on Additional Indebtedness. The Company
will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, Incur any Indebtedness unless, after
giving effect thereto, either (i) the ratio of Indebtedness of
the Company and the Restricted Subsidiaries (excluding, for
purposes of this calculation only, (A) purchase money mortgages
that are Non-Recourse Indebtedness, and (B) Indebtedness Incurred
under letters of credit, escrow agreements and surety bonds
obtained in the ordinary course of business) to Consolidated
Tangible Net Worth of the Company is less than 2.25 to 1; or (ii)
the Consolidated Coverage Ratio exceeds 2.0 to 1.
Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may Incur: (A) Indebtedness under one or more Bank
Credit Facilities in an amount not in excess of $275 million; (B)
purchase money mortgages that are Non-Recourse Indebtedness; (C)
obligations Incurred under letters of credit, escrow agreements
and surety bonds in the ordinary
10
course of business; (D) Indebtedness Incurred under a Warehouse
Facility, provided that the amount of such Indebtedness
(excluding funding drafts issued thereunder) outstanding at any
time pursuant to this clause (D) may not exceed 98 percent of the
value of the Mortgages pledged to secure Indebtedness thereunder;
and (E) Indebtedness Incurred solely for the purpose of
refinancing or repaying any existing Indebtedness so long as (I)
the principal amount of such new Indebtedness does not exceed the
principal amount of the existing Indebtedness refinanced or
repaid (plus the premiums or other payments required to be paid
in connection with such refinancing or repayment and the expenses
incurred in connection therewith), (II) the maturity of such new
Indebtedness is not earlier than that of the existing
Indebtedness to be refinanced or repaid, (III) such new
Indebtedness, determined as of the date of incurrence, has an
Average Life at least equal to the remaining Average Life of the
Indebtedness to be refinanced or repaid, (IV) the new
Indebtedness is pari passu with or subordinate to the
Indebtedness being refinanced or repaid, and (V) the existing and
new Indebtedness are obligations of the same entity.
(iii) Limitations on Liens. The Company will not, and will
not permit any Restricted Subsidiary to, issue, assume, guarantee
or suffer to exist any Indebtedness secured by any mortgage,
pledge, lien or other encumbrance of any nature (herein
collectively referred to as a "lien" or "liens") upon any
property of the Company or any Restricted Subsidiary, or on any
shares of stock of any Restricted Subsidiary, without in any such
case effectively providing that the Notes (together with, if the
Company shall so determine, any other Indebtedness of the Company
or such Restricted Subsidiary ranking pari passu with the Notes)
shall be secured equally and ratably with such Indebtedness,
except that the foregoing restrictions shall not apply to: (A)
liens existing on December 31, 1997; (B) pledges, guarantees and
deposits under workers' compensation laws, unemployment insurance
laws or similar legislation, good faith deposits under bids,
tenders or contracts, deposits to secure public or statutory
obligations or appeal or similar bonds, and liens created by
special assessment districts used to finance infrastructure
improvements; (C) liens existing on property or assets of any
entity on the date on which it becomes a Restricted Subsidiary,
which secured Indebtedness is not Incurred in contemplation of
such entity becoming a Restricted Subsidiary; (D) liens on or
leases of model home units; (E) liens on property, inventory and
receivables of Panel Concepts, Inc. ("Panel Concepts") to provide
working capital (exclusive of cash and cash equivalents) for
Panel Concepts in the ordinary course of business; (F)
Capitalized Lease Obligations entered into in the ordinary course
of business in amounts not in excess of $10,000,000 in the
aggregate; (G) the replacement of any of the items set forth in
clauses (A) through (F) above, provided that (i) the principal
amount of the Indebtedness secured by liens
11
shall not be increased, (ii) such Indebtedness, determined as of
the date of Incurrence, has an Average Life at least equal to the
remaining Average Life of the Indebtedness to be refinanced,
(iii) the maturity of such Indebtedness is not earlier than that
of the Indebtedness to be refinanced, and (iv) the liens shall be
limited to the property or part thereof which secured the lien so
replaced or property substituted therefor as a result of the
destruction, condemnation or damage of such property; (H) liens
on property acquired, constructed or improved by the Company or
any Restricted Subsidiary, which liens are either existing at the
time of such acquisition or at the time of completion of
construction or improvement or created within 120 days after such
acquisition, completion or improvement, to secure Indebtedness
Incurred or assumed to finance all or part of such property,
including any increase in the principal amount of such
Indebtedness and any extension of the repayment schedule and
maturity of such Indebtedness Incurred or entered into in the
ordinary course of business; (I) liens or priorities incurred in
the ordinary course of business, such as laborers', employees',
carriers', mechanics', vendors' and landlords' liens or
priorities; (J) liens for certain taxes and certain survey and
title exceptions; (K) liens arising out of judgments or awards
against the Company or any Restricted Subsidiary with respect to
which the Company or such Restricted Subsidiary is in good faith
prosecuting an appeal or proceeding for review and with respect
to which it has secured a stay of execution pending such appeal
or proceeding for review; (L) liens on property owned by any
Homebuilding Joint Venture; (M) liens securing a Warehouse
Facility, provided that such liens shall not extend to any assets
other than the mortgages, promissory notes and other collateral
that secures mortgage loans made by the Company or any of its
Restricted Subsidiaries; and (N) liens which would otherwise be
subject to the foregoing restrictions which, when the
Indebtedness relating to those liens is added to all other then
outstanding Indebtedness of the Company and the Restricted
Subsidiaries secured by liens and not listed in clauses (A)
through (M) above, does not exceed $50,000,000.
12
(iv) Limitation on Restricted Payments. The Company will
not, nor will it permit any Restricted Subsidiary to, directly or
indirectly, (A) declare or pay any dividend on, or make any
distribution in respect of, or purchase, redeem or otherwise
acquire or retire for value, any Capital Stock of the Company
other than through the issuance solely of the Company's own
Capital Stock (other than Disqualified Stock), or rights thereto;
(B) make any principal payment on, or redeem, repurchase, defease
or otherwise acquire or retire for value prior to scheduled
principal payments or maturity, Indebtedness of the Company or
any Restricted Subsidiary which is expressly subordinated in
right of payment to the Notes (other than Indebtedness Incurred
after the issuance of the Notes provided that such repayment,
redemption, repurchase, defeasance or other retirement is made
substantially concurrent with the receipt of proceeds from the
Incurrence of Indebtedness that by its terms is both subordinated
in right of payment to the Notes and matures, by sinking fund or
otherwise, after February 15, 2008; or (C) make any Restricted
Investment (such payments or any other actions described in (A),
(B) and (C) being referred to herein collectively as, "Restricted
Payments") unless (I) at the time of, and after giving effect to,
the proposed Restricted Payment, no Event of Default (and no
event that, after notice or lapse of time, or both, would become
an Event of Default) shall have occurred and be continuing, (II)
the Company is able to Incur an additional $1.00 of Indebtedness
pursuant to the first paragraph of Section (m)(ii) herein, and
(III) at the time of, and after giving effect thereto, the sum of
the aggregate amount expended (or with respect to guaranties or
similar arrangements the amount then guaranteed) for all such
Restricted Payments (the amount expended for such purposes, if
other than in cash, to be determined by the Board of Directors of
the Company, whose determination shall be conclusive and
evidenced by a resolution of such Board of Directors filed with
the Trustee) subsequent to June 30, 1997 shall not exceed the sum
of (aa) 50% of the aggregate Consolidated Net Income (or, in case
such aggregate Consolidated Net Income shall be a deficit, minus
100% of such deficit) of the Company accrued on a cumulative
basis subsequent to June 30, 1997, (bb) the aggregate net
proceeds, including the fair market value of property other than
cash (as determined by the Board of Directors of the Company,
whose determination shall be conclusive and evidenced by a
resolution of such Board of Directors filed with the Trustee),
received by the Company from the issuance or sale, after February
10, 1998, of Capital Stock (other than Disqualified Stock) of the
Company, including Capital Stock (other than Disqualified Stock)
of the Company issued subsequent to February 10, 1998 upon the
conversion of Indebtedness of the Company initially issued for
cash, (cc) 100% of dividends or distributions (the fair value of
which, if other than cash, to be determined by the Board of
Directors, in good faith) paid to the Company (or any Restricted
13
Subsidiary) by an Unrestricted Subsidiary, Homebuilding Joint
Venture or any other person in which the Company (or any
Restricted Subsidiary), directly or indirectly, has an ownership
interest but less than a 100% ownership interest to the extent
that such dividends or distributions do not exceed the amount of
loans, advances or capital contributions made to any such entity
or person subsequent to February 10, 1998 and included in the
calculation of Restricted Payments, and (dd) $40,000,000;
provided, however, that the foregoing shall not prevent (i) the
-------- -------
payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration the making of
such payment would have complied with the provisions of this
limitation on dividends; provided, however, that such dividend
shall be included in future calculations of Restricted Payments,
(ii) the retirement of any shares of the Company's Capital Stock
by exchange for, or out of proceeds of the substantially
concurrent sale of, other shares of its Capital Stock (other than
Disqualified Stock); provided, however, that the aggregate net
proceeds from such sale shall be excluded from the calculation of
the amounts under subclause (bb) above, (iii) the redemption,
repayment, repurchase, defeasance or other retirement of
Indebtedness with proceeds received from the substantially
concurrent sale of shares of the Company's Capital Stock (other
than Disqualified Stock); provided however, that the aggregate
net proceeds from such sale shall be excluded from the
calculation of the amounts under subclause (bb) above, or (iv)
any investment or investments in Standard Pacific Savings, F.A.
("Savings") by the Company or any of its Restricted Subsidiaries
for the purpose of causing Savings to comply with any regulatory
agreements existing on February 10, 1998 or with any applicable
law, rule, regulation, official interpretation of law, rule or
regulation or official directive which governs the capital
maintenance, net worth or similar regulatory requirements
applicable to Savings.
14
(v) Limitation on Asset Sales. The Company will not, and
will not permit any Restricted Subsidiary to, make an Asset
Disposition, other than for fair market value and in the ordinary
course of business, with an aggregate net book value as of the
end of the immediately preceding fiscal quarter greater than 10%
of the Company's total consolidated assets as of that date,
unless (A) the consideration received by the Company (or a
Restricted Subsidiary, as the case may be) for such disposition
consists of at least 70% cash; provided, however, that for
-------- -------
purposes of this provision (A), the amount of any liabilities
assumed by the transferee and any notes or other obligations
received by the Company or a Restricted Subsidiary which are
immediately converted into cash shall be deemed to be cash, and
(B) the Company shall within one year after the date of such sale
or sales, apply the Net Proceeds from such sale or sales in
excess of an amount equal to 10% of the Company's total
consolidated assets to (I) a purchase of or an Investment in
Additional Assets (other than cash or cash equivalents), (II)
repayment of indebtedness of the Company which is pari passu with
----------
the Notes, and/or (III) make an offer to acquire all or
part of the Notes at a purchase price equal to the principal
amount thereof plus accrued and unpaid interest thereon to the
purchase date.
In the event the Company elects to or shall be required to
offer to redeem Notes pursuant to the provisions of this
paragraph (m)(v), the Company shall deliver to the Trustee an
Officers' Certificate specifying the Asset Sale Offer Amount (as
defined below) and the Asset Sale Purchase Date (as defined
below). Within 15 days thereafter, the Company shall mail or
cause the Trustee to mail (in the Company's name and at its
expense) an offer to redeem (the "Asset Sale Offer") to each
Holder of Notes. The redemption price shall be 100% of the
principal amount of the Notes plus accrued interest to the
redemption date and upon surrender to the Trustee or the Paying
Agent, the Holders of such Notes shall be paid the redemption
price. The date designated for repurchase of Notes pursuant to an
Asset Sale Offer (the "Asset Sale Purchase Date") shall be a date
designated by the Company that is not less than 30 days nor more
than 60 days before notice of an Asset Sale Offer is to be and
shall be mailed by the Trustee to the Holders of the Notes at
their last registered address. The Asset Sale Offer shall remain
open from the time of mailing until 5 days before the Asset Sale
Purchase Date. The Notice shall contain all instructions and
materials necessary to enable such Holders to tender Notes
pursuant to the Asset Sale Offer. The Notice, which shall govern
the terms of the Asset Sale Offer, shall state:
(aa) that the Asset Sale Offer is being made pursuant to this
paragraph (m)(v);
15
(bb) the amount of Notes offered to be redeemed (the "Asset Sale
Offer Amount"), the purchase price and the Asset Sale
Purchase Date;
(cc) that any Note not tendered or accepted for payment will
continue to accrue interest;
(dd) that any Note accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest after the Asset
Sale Purchase Date;
(ee) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer will be required to surrender the Note,
with the form entitled "Option of Holder to Elect Purchase"
on the reverse side of the Note completed, to the Paying
Agent at the address specified in the Notice at least five
days before the Asset Sale Purchase Date;
(ff) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than three days prior
to the Asset Sale Purchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have the Note purchased;
(gg) that if Notes in a principal amount in excess of the Asset
Sale Offer Amount are tendered pursuant to the Asset Sale
Offer, the Company shall purchase Notes on a pro rata basis
or by lot or in such other manner as the Trustee shall deem
fair and appropriate; and
(hh) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered.
On the Asset Sale Purchase Date, the Company shall (i)
accept for payment Notes or portions thereof properly tendered
pursuant to the Asset Sale Offer (on a pro rata basis, by lot or
in such other manner specified by the Trustee if required
pursuant to paragraph (gg) above), (ii) deposit with the Paying
Agent money sufficient to pay the purchase price of all Notes or
portions thereof so accepted and (iii) deliver to the Trustee
Notes so accepted together with an Officers' Certificate stating
the Notes or portions thereof accepted for payment by the
Company. The Paying Agent shall promptly mail or deliver to
Holders of Notes so accepted, payment in an amount equal to the
purchase price, and the Trustee shall promptly
16
authenticate and mail or deliver to such Holders a new Note equal
in principal amount of any unpurchased portion of the Note
surrendered. Any Notes not so accepted shall be promptly mailed
or delivered by the Company to the Holder thereof. The Company
will publicly announce the results of the Asset Sale Offer on or
as soon after as practical the Asset Sale Purchase Date. For
purposes of this paragraph (m)(v), the Trustee shall act as the
Paying Agent.
(vi) Transactions with Affiliates. (A) The Company shall
not, and shall not permit any Restricted Subsidiary to, enter
into or permit to exist any transaction or series of related
transactions (including the purchase, sale, lease or exchange of
any property, employee compensation arrangements or the rendering
of any service) with any Affiliate of the Company (an "Affiliate
Transaction") unless the terms thereof (I) are no less favorable
to the Company or such Restricted Subsidiary than those that
could be obtained at the time of such transaction in arm's-length
dealings with a person who is not such an Affiliate; and (II) if
such Affiliate Transaction (or series of related Affiliate
Transactions) involve aggregate payments in an amount in excess
of $10 million in any one year, (aa) are set forth in writing,
(bb) comply with clause (I) above and (cc) have been approved by
a majority of the disinterested members of the Board of
Directors.
(B) The provisions of the foregoing paragraph (A) shall
not prohibit (I) any Restricted Payment permitted to be paid
pursuant to the covenant described under clause (m)(iv) above;
(II) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise, pursuant to, or the
funding of, employment arrangements, stock options and stock
ownership plans in the ordinary course of business and approved
by the Board of Directors or a committee thereof; (III) the grant
of stock options or similar rights to employees and directors of
the Company in the ordinary course of business and pursuant to
plans approved by the Board of Directors or a committee thereof;
(IV) loans or advances to employees in the ordinary course of
business of the Company or its Restricted Subsidiaries; (V) fees,
compensation or employee benefit arrangements paid to and
indemnity provided for the benefit of directors, officers or
employees of the Company or any Subsidiary in the ordinary course
of business; or (VI) any Affiliate Transaction between the
Company and a Restricted Subsidiary or between Restricted
Subsidiaries.
(vii) Limitation on Payment Restrictions Affecting
Restricted Subsidiaries. The Company will not, and will not
permit any Restricted Subsidiary to, create or otherwise cause or
permit to exist or become effective, any consensual encumbrance
or consensual restriction on the ability of any Restricted
Subsidiary (I) to pay dividends or make any other
17
distributions on its Capital Stock to the Company or a Restricted
Subsidiary or pay any Indebtedness owed to the Company, (II) to
make any loans or advances to the Company or (III) transfer any
of its property or assets to the Company, except: (aa) any
encumbrance or restriction pursuant to an agreement in effect at
or entered into on February 10, 1998; (bb) any encumbrance or
restriction with respect to a Restricted Subsidiary pursuant to
an agreement relating to any Indebtedness Incurred by such
Restricted Subsidiary which was entered into on or prior to the
date on which such Restricted Subsidiary was acquired by the
Company (other than as consideration in, or to provide all or any
portion of the funds or credit support utilized to consummate,
the transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Restricted Subsidiary
or was acquired by the Company) and outstanding on such date;
(cc) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an
agreement referred to in clause (aa) or (bb) of this covenant (or
effecting a Refinancing of such Refinancing Indebtedness pursuant
to this clause (cc)) or contained in any amendment to an
agreement referred to in clause (aa) or (bb) of this covenant or
this clause (cc); provided, however, that the encumbrances and
restrictions with respect to such Restricted Subsidiary contained
in any such refinancing agreement or amendment are no more
restrictive in any material respect than the encumbrances and
restrictions with respect to such Restricted Subsidiary contained
in such agreements; (dd) any such encumbrance or restriction
consisting of customary contractual non-assignment provisions to
the extent such provisions restrict the transfer of rights,
duties or obligations under such contract; (ee) in the case of
clause (III) above, restrictions contained in security agreements
or mortgages securing Indebtedness of a Restricted Subsidiary to
the extent such restrictions restrict the transfer of the
property subject to such security agreements or mortgages; (ff)
any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition
of all or substantially all the Capital Stock or assets of such
Restricted Subsidiary pending the closing of such sale or
disposition; and (gg) any restriction imposed by applicable law.
(viii) Restricted and Unrestricted Subsidiaries. The
Company will not permit any Restricted Subsidiary to be
designated as an Unrestricted Subsidiary unless the Company and
its Restricted Subsidiaries would thereafter be permitted to (A)
Incur at least $1.00 of Indebtedness under the first paragraph
(m)(ii) above and (B) make a Restricted Payment of at least $1.00
under paragraph (m)(iv) above.
The Company will not permit any Unrestricted Subsidiary to
be designated as a Restricted Subsidiary unless such Subsidiary
has outstanding no Indebtedness except such Indebtedness as the
Company
18
could permit it to become liable for immediately after becoming a
Restricted Subsidiary under paragraph (m)(ii) above.
Promptly after the adoption of any Board Resolution
designating a Restricted Subsidiary as an Unrestricted Subsidiary
or an Unrestricted Subsidiary as a Restricted Subsidiary, a copy
thereof shall be filed with the Trustee, together with an
Officers' Certificate stating that the provisions of this
paragraph (m)(viii) have been complied with in connection with
such designation.
The Company will not permit Standard Pacific of Texas, Inc.
to be designated as an Unrestricted Subsidiary or permit the
assets of the Company or any Subsidiary employed in the
homebuilding operations to be transferred to an Unrestricted
Subsidiary, except in amounts permitted under paragraph (m)(iv)
above.
(ix) Successor Corporation. The Company will not
consolidate with, merge into or transfer all or substantially all
of its assets to another person unless (i) such person (if other
than the Company) is a corporation organized under the laws of
the United States or any state thereof or the District of
Columbia and expressly assumes all the obligations of the Company
under the Indenture and the Notes; (ii) immediately after giving
effect to such transaction, no Default or Event of Default shall
have occurred and be continuing; (iii) the Consolidated Net Worth
of the obligor of the Notes immediately after giving effect to
such transaction (exclusive of any adjustments to Consolidated
Net Worth relating to transaction costs and accounting
adjustments resulting from such transaction) is not less than the
Consolidated Net Worth of the Company immediately prior to such
transaction; and (iv) the surviving corporation would be able to
Incur at least an additional $1.00 of Indebtedness pursuant to
the first paragraph of the covenant described under paragraph
(m)(ii).
(x) Reports to Holders of the Notes. So long as the
Company is subject to the periodic reporting requirements of the
Exchange Act, it shall continue to furnish the information
required thereby to the SEC. Even if the Company is entitled
under the Exchange Act not to furnish such information to the SEC
or to the holders of the Notes, it will nonetheless continue to
furnish information under Section 13 or 15(d) of the Exchange Act
to the SEC and the Trustee as if it were subject to such periodic
reporting requirements.
(n) Additional Events of Default. In addition to the Events of
Default specified in the Indenture, the following shall constitute
Events of Default under Section 6.01 of the Indenture with respect to
the Notes: (i) default under
19
any mortgage, indenture (including the Indenture) or instrument under
which is issued or which secures or evidences Indebtedness of the
Company or any Restricted Subsidiary (other than Non-Recourse
Indebtedness) which default constitutes a failure to pay principal of
such Indebtedness in an amount of $20,000,000 or more when due and
payable (other than as a result of acceleration) or results in
Indebtedness (other than Non-Recourse Indebtedness) in the aggregate
of $20,000,000 or more becoming or being declared due and payable
before it would otherwise become due and payable, and (ii) entry of a
final judgment for the payment of money against the Company or any
Restricted Subsidiary in an amount of $5,000,000 or more which remains
undischarged or unstayed for a period of 60 days after the date on
which the right to appeal such judgment has expired or becomes subject
to an enforcement proceeding.
(o) Certain Definitions. The following terms shall have the
meanings indicated for purposes of this Officers' Certificate. All
capitalized terms used in this Officers' Certificate and not otherwise
defined herein shall have the meanings set forth in the Indenture.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business; or (ii) the
Capital Stock of a person that becomes a Restricted Subsidiary as a
result of the acquisition of such Capital Stock by the Company or
another Restricted Subsidiary; provided, however, that any such
Restricted Subsidiary is primarily engaged in a Related Business. For
purposes of this definition, "Related Business" means any business
related, ancillary or complimentary (as defined in good faith by the
Board of Directors) to the business of the Company and the Restricted
Subsidiaries on February 10, 1998.
"Affiliate" of any specified person means any other person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person. For the purposes
of this definition, "control" when used with respect to any specified
person means the power to direct or cause the direction of the
management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or
other-wise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or
dispositions) by the Company or any Restricted Subsidiary, including
any disposition by means of a merger, consolidation or similar
transaction (each referred to for the purposes of this definition as a
"disposition"), of (i) any shares of Capital Stock of a Restricted
Subsidiary (other than directors' qualifying shares and, to the extent
required by local ownership laws in foreign countries, shares owned by
foreign shareholders); (ii) all or substantially all the assets of any
division, business segment or
20
comparable line of business of the Company or any Restricted
Subsidiary; or (iii) any other assets of the Company or any Restricted
Subsidiary having a fair market value (as determined in good faith by
the Board of Directors) in excess of $250,000 disposed of in a single
transaction or series of related transactions outside of the ordinary
course of business of the Company or such Restricted Subsidiary (other
than, in the case of (i), (ii) and (iii) above, a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary).
"Average Life" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (i) the
sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal
payment (assuming the exercise by the obligor of such Indebtedness of
all unconditional (other than as to the giving of notice) extension
options of each such scheduled payment date) of such Indebtedness
multiplied by the amount of such principal payment by (ii) the sum of
all such principal payments.
"Bank Credit Facility" means the Revolving Credit Facility and
any bank credit agreement or credit facility entered into in the
future by the Company or any Restricted Subsidiary, as any of the same
may be amended, waived, modified, refinanced or replaced from time to
time.
"Capitalized Lease Obligations" means any obligations under a
lease that is required to be capitalized for financial reporting
purposes in accordance with generally accepted accounting principles.
"Capital Stock" of any person means any and all shares,
interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) equity of
such person, including any Preferred Stock, but excluding any debt
securities convertible into such equity.
"Change of Control" means the occurrence of any of the following
events:
(i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), is or becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that for purposes of this clause such person or group shall be
deemed to have "beneficial ownership" of all shares that any such
person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly
or indirectly, of more than 50 percent of the total voting power of
the Voting Stock of the Company;
(ii) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors
(together with any
21
new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company was
approved by a majority vote of the directors of the Company then still
in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of
Directors then in office; or
(iii) the merger or consolidation of the Company with or
into another person or the merger of another person with or into the
Company, or the sale of all or substantially all the assets of the
Company to another person, other than any such sale to one or more
Restricted Subsidiaries, and in the case of any such merger or
consolidation, the securities of the Company that are outstanding
immediately prior to such transaction and which represent 100 percent
of the aggregate voting power of the Voting Stock of the Company are
changed into or exchanged for cash, securities or property, unless
pursuant to such transaction such securities are changed into or
exchanged for, in addition to any other consideration, securities of
the surviving corporation, or a parent corporation that owns all of
the Capital Stock of such surviving corporation, that represent
immediately after such transaction, at least a majority of the
aggregate voting power of the Voting Stock of the surviving
corporation or such parent corporation, as the case may be.
"Consolidated Coverage Ratio" with respect to the Company as of
any date of determination means the ratio of the Company's EBITDA to
its Consolidated Interest Incurred for the four fiscal quarters ending
immediately prior to the date of determination. Notwithstanding clause
(ii) of the definition of Consolidated Net Income, if the Indebtedness
which is being Incurred is Incurred in connection with an acquisition
by the Company or a Restricted Subsidiary, the Consolidated Coverage
Ratio shall be determined after giving effect to both the Consolidated
Interest Incurred related to the Incurrence of such Indebtedness and
the EBITDA as if the acquisition had occurred at the beginning of the
four fiscal quarter period (x) of the person becoming a Restricted
Subsidiary, or (y) in the case of an acquisition of assets that
constitute substantially all of an operating unit or business,
relating to the assets being acquired by the Company or a Restricted
Subsidiary.
"Consolidated Interest Expense" of the Company means, for any
period, the aggregate amount of interest which, in accordance with
generally accepted accounting principles as in effect on February 10,
1998, would be included on an income statement for the Company and its
Restricted Subsidiaries on a consolidated basis, whether expensed
directly, or included as a component of cost of goods sold, or
allocated to joint ventures or otherwise (including, but not limited
to, imputed interest included on Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, the net costs
associated with Hedging
22
Obligations, amortization of other financing fees and expenses, the
interest portion of any deferred payment obligation, amortization of
discount or premium, if any, and all other non-cash interest expense),
excluding interest expense related to mortgage banking operations plus
the product of (i) cash dividends paid on any Preferred Stock of the
Company times (ii) a fraction, the numerator of which is one and the
denominator of which is one minus the then current effective aggregate
federal, state and local tax rate of the Company, expressed as a
decimal.
"Consolidated Interest Incurred" of the Company means, for any
period, (i) the aggregate amount of interest which, in accordance with
generally accepted accounting principles as in effect on February 10,
1998, would be included on an income statement for the Company and its
Restricted Subsidiaries on a consolidated basis, whether expensed
directly, or included as a component of cost of goods sold, or
allocated to joint ventures or otherwise (including, but not limited
to, imputed interest included on Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, the net costs
associated with Hedging Obligations, amortization of discount or
premium, if any, and all other non-cash interest expense), excluding
interest expense related to mortgage banking operations, plus or
minus, without duplication; (ii) the difference between capitalized
interest for such period and the interest component of cost of goods
sold for such period; plus (iii) the product of (A) cash dividends
paid on any Preferred Stock of the Company, times (B) a fraction, the
numerator of which is one and the denominator of which is one minus
the then current effective aggregate federal, state and local tax rate
of the Company, expressed as a decimal.
"Consolidated Net Income" for any period, means the aggregate of
the Net Income of the Company and its Restricted Subsidiaries for such
period on a consolidated basis determined in accordance with generally
accepted accounting principles as in effect on February 10, 1998,
provided that (i) the Net Income of any person in which the Company or
any Restricted Subsidiary has, a joint interest with a third party
(other than an Unrestricted Subsidiary) shall be included only to the
extent of the lesser of (A) the amount of dividends or distributions
actually paid to the Company or a Restricted Subsidiary or (B) the
Company's direct or indirect proportionate interest in the Net Income
of such person, provided that, so long as the Company or a Restricted
Subsidiary has an unqualified legal right to require the payment of a
dividend or distribution, Net Income shall be determined solely
pursuant to clause (B); (ii) the Net Income of any person acquired in
a pooling of interests transaction for any period prior to the date of
such acquisition shall be excluded; and (iii) the Net Income of any
Unrestricted Subsidiary shall be included only to the extent of the
amount of dividends or distributions (the fair value of which, if
other than in cash, to be determined by the Board of Directors, in
good faith) by such Subsidiary to the Company or to any of its
consolidated Restricted Subsidiaries; and (iv) the Net Income of any
Unrestricted Subsidiary, any Homebuilding Joint Venture or any
23
other person in which the Company or any Restricted Subsidiary has a
joint interest with a third party that is not existing on December 31,
1997 shall be included only to the extent that the aggregate amount of
dividends or distributions (the fair value of which, if other than
cash, to be determined by the Board of Directors, in good faith) by
such Subsidiary or Homebuilding Joint Venture to the Company or to any
of its consolidated Restricted Subsidiaries exceeds the aggregate
amount of unpaid loans or advances and unreturned capital
contributions made by the Company or any Restricted Subsidiary in or
to such Subsidiary or Homebuilding Joint Venture.
"Consolidated Net Worth" of the Company means consolidated
stockholders' equity less any increase in stockholders' equity of each
of the Unrestricted Subsidiaries subsequent to December 31, 1997
attributable to the Company or any of its Restricted Subsidiaries, as
determined in accordance with generally accepted accounting principles
as in effect on February 10, 1998.
"Consolidated Tangible Net Worth" with respect to the Company
means the consolidated stockholders' equity of the Company, as
determined in accordance with generally accepted accounting
principles, as in effect on February 10, 1998, less (i) that portion
of any increase in each of the Unrestricted Subsidiaries'
stockholders' equity subsequent to December 31, 1997 attributable to
the Company or any of its Restricted Subsidiaries, as determined in
accordance with generally accepted accounting principles, as in effect
on the date of the issuance of the Notes, and (ii) the Intangible
Assets of the Company and the Restricted Subsidiaries. "Intangible
Assets" means the amount (to the extent reflected in determining
consolidated stockholders' equity) of (A) all write-ups (other than
write-ups of tangible assets of a going concern business made within
twelve months after the acquisition of such business) in the book
value of any asset owned by the Company or any Restricted Subsidiary,
and (B) all goodwill, trade names, trademarks, patents, unamortized
debt discount and expense and other like intangibles.
"Disqualified Stock" means, with respect to any person, any
Capital Stock which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable) or upon the
happening of any event (i) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise; (ii) is
convertible or exchangeable, at the option of the holder thereof, for
Indebtedness or Disqualified Stock; or (iii) is redeemable at the
option of the holder thereof, in whole or in part, in each case on or
prior to February 15, 2009. Notwithstanding the foregoing,
"Disqualified Stock" shall not include Capital Stock which is
redeemable solely pursuant to a change in control provision that does
not (A) cause such Capital Stock to become redeemable in circumstances
which would not constitute a Change of Control and (B) require the
Company to pay the redemption price therefor prior to the repurchase
date specified under "Change of Control" above.
24
"EBITDA" of the Company for any period means the sum of
Consolidated Net Income plus Consolidated Interest Expense plus,
without duplication, the following to the extent deducted in
calculating such Consolidated Net Income: (i) income tax expense, (ii)
depreciation expense, (iii) amortization expense and (iv) all other
non-cash items reducing Consolidated Net Income (other than items that
will require cash payments in the future and for which an accrual or
reserve is, or is required by generally accepted accounting principals
as in effect on the date of issuance of the Notes to be, made), less
all non-cash items increasing Consolidated Net Income, in each case
for such period. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and
amortization of, a Subsidiary of the Company shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in
the same proportion) that the net income of such Subsidiary was
included in calculating Consolidated Net Income.
"Hedging Obligations" of any person means the net obligations of
such person pursuant to any Interest Rate Agreement or any foreign
exchange contract, currency swap agreement or other similar agreement
to which such person is a party or a beneficiary.
"Homebuilding Joint Venture" means (i) any Unrestricted
Subsidiary and (ii) any person in which the Company or any of its
Subsidiaries has an ownership interest but less than a 100% ownership
interest that, in each case, was formed for and is engaged in
homebuilding operations.
"Incur" means issue, assume, guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock
of a person existing at the time such person becomes a Subsidiary
(whether by merger, consolidation, acquisition or otherwise) shall be
deemed to be Incurred by such Subsidiary at the time it becomes a
Subsidiary; provided further, however, that in the case of a discount
security, neither the accrual of interest nor the accretion of
original issue discount shall be considered an Incurrence of
Indebtedness. The term "Incurrence" when used as a noun shall have a
correlative meaning.
"Indebtedness" means on any date of determination (without
duplication), (i) the principal of and premium (if any) in respect of
(A) indebtedness of such person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which such person is responsible or
liable; (ii) all Capitalized Lease Obligations of such person; (iii)
all obligations of such person issued or assumed as the deferred
purchase price of property or services, all conditional sale
obligations of such person and all obligations of such person under
any title retention agreement (but excluding accounts payable and
accrued expenses arising in the ordinary course of business and which
are not more than 90 days past due and not in dispute) which would
25
appear as a liability on a balance sheet of a person prepared on a
consolidated basis in accordance with generally accepted accounting
principles, which purchase price or obligation is due more than six
months after the date of placing such property in service or taking
delivery and title thereto or the completion of such services
(provided that, in the case of obligations of an acquired person
assumed in connection with an acquisition of such person, such
obligations would constitute Indebtedness of such person); (iv) all
obligations of such person for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction
(other than obligations with respect to letters of credit securing
obligations (other than obligations described in (i) through (iii)
above) entered into in the ordinary course of business of such person
to the extent such letters of credit are not drawn upon or, if and to
the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following receipt by such person of a demand for
reimbursement following payment on the letter of credit); (v) the
amount of all obligations of such person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock
or, with respect to any Subsidiary of such person, any Preferred Stock
(but excluding, in each case, any accrued dividends); (vi) all
obligations of the type referred to in clauses (i) through (v) of
other persons and all dividends of other persons for the payment of
which, in either case, such person is responsible or liable, directly
or indirectly, as obligor, guarantor or otherwise, including by means
of any guarantee; (vii) all obligations of the type referred to in
clauses (i) through (vi) of other persons secured by any lien on any
property or asset of such person (whether or not such obligation is
assumed by such person), the amount of such obligation being deemed to
be the lesser of the value of such property or assets or the amount of
the obligation so secured; and (viii) to the extent not otherwise
included in this definition, Hedging Obligations of such Person. The
amount of Indebtedness of any person at any date shall be the
outstanding balance at such date of all unconditional obligations as
described above and the maximum liability, upon the occurrence of the
contingency, other than a contingency solely within the control of
such person, giving rise to the obligation, of any contingent
obligations as described above at such date; provided, however, that
the amount outstanding at any time of any Indebtedness issued with
original issue discount shall be deemed to be the face amount of such
Indebtedness less the remaining unamortized portion of the original
issue discount of such indebtedness at such time as determined in
conformity with generally accepted accounting principles.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement or other financial agreement or
arrangement designed to protect the Company or any Restricted
Subsidiary against fluctuations in interest rates.
"Investment" in any person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of
business that are recorded as accounts receivable on the balance sheet
of such person) or other
26
extensions of credit (including by way of guarantee or similar
arrangement) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or
acquisition of Capital Stock, Indebtedness or other similar
instruments issued by such person.
"Mortgage" means a first priority mortgage or first priority deed
of trust on improved real property.
"Net Income" of any person means the net income (loss) of such
person, determined in accordance with generally accepted accounting
principles, as in effect on February 10, 1998; excluding, however,
from the determination of Net Income all gains (to the extent that
they exceed all losses) realized upon the sale or other disposition
(including, without limitation, dispositions pursuant to sale
leaseback transactions) of any real property or equipment of such
person, which is not sold or otherwise disposed of in the ordinary
course of business, or of any capital stock of such person or its
subsidiaries owned by such person.
"Net Proceeds" means with respect to any sale, assignment,
exchange, lease, transfer or other disposition of assets, the
consideration received by the Company (or a Restricted Subsidiary, as
the case may be) for such disposition after (a) provision for all
income and other taxes resulting from such asset disposition, (b)
payment of all brokerage commissions, underwriting, legal, accounting,
appraisal and other fees and expenses related to such asset sale and
(c) deduction of appropriate amounts to be provided by the Company or
a Restricted Subsidiary as a reserve, in accordance with generally
accepted accounting principles, against any liabilities associated
with the assets sold or disposed of in such asset disposition and
retained by the Company or a Restricted Subsidiary after such asset
sale, including, without limitation, pension and other post-employment
benefit liabilities and against any indemnification obligations
associated with the assets sold or disposed of in such asset sale.
"Non-Recourse Indebtedness" means Indebtedness or other
obligations secured by a lien on property to the extent that the
liability for such Indebtedness or other obligations is limited to the
security of the property without liability on the part of the Company
or any Subsidiary (other than the Subsidiary which holds title to such
property) for any deficiency.
"Person" means an individual, corporation, partnership, joint
venture, association, joint stock company, limited liability company,
limited liability partnership, trust, unincorporated organization, or
government or any agency or political subdivision thereof.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however
designated) which is
27
preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of
such corporation, over shares of Capital Stock of any other class of
such corporation.
"Refinance" means, in respect of Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to
issue other Indebtedness in exchange or replacement for, such
Indebtedness. "Refinancing" shall have a correlative meaning.
"Restricted Investment" means any loan, advance, capital
contribution or transfer (including by way of guaranty or other
similar arrangement) in or to any Unrestricted Subsidiary,
Homebuilding Joint Venture or any person in which the Company,
directly or indirectly, has an ownership interest but less than 100
percent ownership interest; provided, however, that loans, advances,
capital contributions or transfers (including by way of guaranty or
other similar arrangement) to a Homebuilding Joint Venture shall be
counted as a Restricted Investment only to the extent that the
aggregate at any one time outstanding of all such amounts expended (or
with respect to guaranties or similar arrangements the amounts then
guaranteed) exceed, subsequent to December 31, 1996, $20 million for
any one Homebuilding Joint Venture or $80 million in the aggregate for
all Homebuilding Joint Ventures. Restricted Investment shall include
the fair market value of the net assets of any Restricted Subsidiary
that at any time is designated an Unrestricted Subsidiary. Any
property transferred to an Unrestricted Subsidiary, and the net assets
of a Restricted Subsidiary that is designated an Unrestricted
Subsidiary, shall be valued at fair market value at the time of such
transfer, in each case as determined by the Board of Directors of the
Company in good faith. The net assets of Panel Concepts shall not be
counted as a Restricted Investment if (i) a sale of all or a portion
of the Capital Stock of Panel Concepts causes Panel Concepts to become
an Unrestricted Subsidiary; (ii) at the time of such sale, the net
book value of the assets of Panel Concepts represent less than 10
percent of the consolidated assets of the Company and its Restricted
Subsidiaries; and (iii) the net proceeds of any such sale and any
subsequent sale of the Capital Stock of Panel Concepts to any person
other than the Company or any Restricted Subsidiary are paid or
distributed to the Company or any Restricted Subsidiary.
"Restricted Subsidiary" means any Wholly-Owned Subsidiary that
has not been designated an Unrestricted Subsidiary.
"Subsidiary" means a corporation, a majority of the capital stock
with voting power to elect directors of which is directly or
indirectly owned by the Company and its Subsidiaries, or any person in
which the Company and its Subsidiaries have at least a majority
ownership interest.
"Unrestricted Subsidiary" means (i) any Subsidiary in which the
Company, directly or indirectly, has less than a 100% ownership
interest; (ii) any
28
Wholly Owned Subsidiary which in accordance with paragraph (m)(viii)
above has been designated in a resolution adopted by the Board of
Directors of the Company as an Unrestricted Subsidiary, in each case
unless and until such Subsidiary shall be designated as a Restricted
Subsidiary in accordance with paragraph (m)(viii) above; and (iii) any
Wholly-Owned Subsidiary a majority of the voting stock of which shall
at the time be owned directly or indirectly by one or more
Unrestricted Subsidiaries.
"Voting Stock", with respect to any person, means securities of
any class of Capital Stock of such person entitling the holders
thereof (whether at all times or only so long as no senior class of
stock has voting power by reason of any contingency) to vote in the
election of members of the board of directors of such person.
"Warehouse Facility" means a Bank Credit Facility to finance the
making of Mortgage loans originated by the Company or any of its
Subsidiaries.
"Wholly Owned Subsidiary" means a Subsidiary, all of the capital
stock (whether or not voting, but exclusive of directors' qualifying
shares) of which is owned by the Company or a Wholly-Owned Subsidiary.
Each of the undersigned, for himself, states that he has read and is
familiar with the provisions of Article Two of the Indenture relating to the
establishment of a series of Securities thereunder and the establishment of
forms of Securities representing a series of Securities thereunder and, in each
case, the definitions therein relating thereto; that he is generally familiar
with the other provisions of the Indenture and with the affairs of the Company
and its acts and proceedings and that the statements and opinions made by him in
this Officers' Certificate are based upon such familiarity; and that he has made
such examination or investigation as is necessary to enable him to determine
whether or not the covenants and conditions referred to above have been complied
with; and in his opinion, such covenants and conditions have been complied with.
29
IN WITNESS WHEREOF, the undersigned has hereunto signed this Certificate on
behalf of the Company this ____ day of April, 1998.
STANDARD PACIFIC CORP.
By:_______________________________
Name: Stephen J. Scarborough
Title: President
By:_______________________________
Name: Andrew H. Parnes
Title: Vice President-Finance,
Treasurer and Chief
Financial Officer
EXHIBIT A
No. R-1 STANDARD PACIFIC CORP. $[_________]
CUSIP NO.: 85375c AD 3
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR NOTES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER
THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK), A NEW YORK
CORPORATION, TO THE ISSUER OR ITS AGENT FOR THE REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
Standard Pacific Corp., a Delaware corporation, promises to pay to Cede & Co.,
or registered assigns, the principal sum of [____________] Million Dollars
($[____________]) on February 15, 2008.
A-1
8% SERIES A SENIOR NOTE DUE 2008
Interest Payment Dates: February 15 and August 15
Record Dates: February 1 and August 1
Dated: _________, 1998
STANDARD PACIFIC CORP.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Attest:
________________________________________
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Note is one of the Securities
referred to in the within
mentioned Indenture.
UNITED STATES TRUST COMPANY OF NEW
YORK, as Trustee
By:
----------------------------------
Authorized Signatory
A-2
STANDARD PACIFIC CORP.
8% SENIOR NOTE DUE 2008
1. Interest.
Standard Pacific Corp., a Delaware corporation (the "Company"), promises to
pay interest on the principal amount of this Note at the rate per annum shown
above. The Company will pay interest semiannually on February 15 and August 15
of each year (the "Interest Payment Date"), commencing August 15, 1998.
Interest on the Note will accrue from February 10, 1998 or, in the case of a
note issued after August 15, 1998, the Interest Payment Date next preceding the
date of issuance of such note. Interest will be computed on the basis of a 360-
day year of twelve 30-day months. Overdue principal and, to the extent payment
of such interest shall be legally enforceable, overdue installments of interest
shall bear interest at the rate per annum shown above.
2. Method of Payment.
The Company will pay interest on the Notes (except default interest, which
shall be payable in the manner provided in Section 2.13 of the Indenture) to the
persons who are registered holders of Notes at the close of business on the
February 1 or August 1 next preceding the Interest Payment Date (the "Record
Date"). Holders must surrender Notes to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by its check
payable in such money. It may mail an interest check to a Holder's registered
address.
3. Paying Agent and Registrar.
Initially, United States Trust Company of New York (the "Trustee") will act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-registrar without notice. The Company or any of its subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture.
The Company issued the Notes under an Indenture dated as of April 1, 1992
(the "Indenture") between the Company and the Trustee. The terms of the Notes
include those stated in the Indenture, those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)77aaa-77bbbb)
(the "Act") as in effect on the date of the Indenture and as may be amended from
time to time, and those incorporated by reference into the Indenture pursuant to
an Officers' Certificate of the Company dated __________, 1998 (the "Officers'
Certificate") delivered pursuant to Sections 2.01 and 2.03(a) of the Indenture.
The Notes are subject to and governed by all such terms, and holders of Notes
are referred to the Indenture, the Officers' Certificate and the Act for a
statement of them. All capitalized terms used in this Note and not otherwise
defined herein shall have the meanings set forth in the Indenture and the
A-3
Officers' Certificate. The Notes are general unsecured obligations of the
Company limited to the aggregate principal amount of $175,000,000.
5. Optional Redemption.
The Notes will not be redeemable at the option of the Company prior to
February 15, 2003. Thereafter, the Notes will be redeemable, at the Company's
option, in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice mailed by first-class mail to each
Holder's registered address, at the following redemption prices (expressed in
percentages of principal amount), plus accrued and unpaid interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on February 15 of the years set
forth below:
Redemption
Year Price
---- ----------
2003............................................ 104.00%
2004............................................ 102.67%
2005............................................ 101.33%
2006 and thereafter............................. 100.00%
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Notes to be redeemed at his
registered address. Notes in denominations larger than $1,000 may be redeemed in
part. On and after the redemption date interest ceases to accrue on Notes or
portions of them called for redemption.
7. Selection.
If less than all of the Notes are to be redeemed, the Trustee will select
the Notes to be redeemed on a pro rata basis, by lot or by such other method as
the Trustee in its sole discretion shall deem to be fair and appropriate.
8. Mandatory Repurchase Obligation.
If there is a Change of Control of the Company, the Holder of this Note
shall have the right to require the Company to repurchase all or a portion of
this Note at a purchase price equal to 101% of the principal amount hereof plus
accrued and unpaid interest to the date of repurchase, as provided in, and
subject to the terms of, the Indenture. In addition, under certain
circumstances, if the Company fails to maintain a certain specified minimum
Consolidated Net Worth or engages in certain asset sales, the Company shall be
required to offer to purchase a portion of the aggregate principal amount of
Notes outstanding together with accrued and unpaid interest to the date of
purchase, as provided in, and subject to the terms of, the Indenture.
A-4
9. Denominations, Transfer, Exchange.
If the Notes are issued in global form, and this Note contains a legend in
the face hereof to such effect, the provisions of this Section 9 shall be deemed
superseded by such legend and Section 3(c) of the Officers Certificate, to the
extent the provisions of this Section 9 are inconsistent with such legend or
Section 3(c).
The Notes are issuable in registered form, without coupons, in
denominations of $1,000 and any amount in excess thereof which is an integral
multiple of $1,000. As provided in the Indenture and subject to certain
limitations therein set forth, Notes are exchangeable for a like aggregate
principal amount of Notes of like tenor of any authorized denomination, as
requested by the Holder surrendering the same, upon surrender of the Note or
Notes to be exchanged at any office or agency where Notes may be presented for
registration of transfer.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of Notes is registrable in the register of Notes upon
surrender of a Note for registration of transfer at the Corporate Trust Office
of the Trustee in the Borough of Manhattan, The City of New York, or at the
office of any transfer agent hereafter designated by the Company for such
purpose, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Notes of like tenor, of authorized denominations and for the same aggregate
principal amount will be issued to the designated transferee or transferees.
No service charge shall be made by the Company, the Trustee or the
Registrar for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax, assessment or other
governmental charge payable in connection therewith (other than exchanges
pursuant to Sections 2.11, 3.06 or 9.05 of the Indenture not involving any
transfer).
10. Person Deemed Owner.
The registered holder of a Note may be treated as the owner of it for all
purposes.
A-5
11. Amendment, Waiver.
The Indenture permits, in certain circumstances therein specified, the
amendment thereof without the consent of the Holders of the Notes. The
Indenture also permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations under the
Indenture of the Company and the rights of Holders of the Notes at any time by
the Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Notes at the time Outstanding. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Notes at the time Outstanding, on behalf of the Holders
of all the Notes, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holders shall be conclusive and
binding upon the Holder of this Note and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Note.
12. Successor Corporation.
When a successor corporation assumes all the obligations of its predecessor
under the Notes and the Indenture, the predecessor corporation will be released
from those obligations.
13. Defaults and Remedies.
The following are Events of Default: (i) failure by the Company to pay
interest on the Notes when due which default continues for a period of 30 days
or the principal of the Notes when due; (ii) failure by the Company to perform
any other covenant in the Notes or the Indenture for 45 days after receipt by
the Company of a Notice of Default; (iii) default under any mortgage, indenture
(including the Indenture) or instrument under which is issued or which secures
or evidences Indebtedness of the Company or any Restricted Subsidiary (other
than Non-Recourse Indebtedness) which default constitutes a failure to pay
principal of such Indebtedness in an amount of $20,000,000 or more when due and
payable (other than as a result of acceleration) or results in Indebtedness
(other than Non-Recourse Indebtedness) in the aggregate of $20,000,000 or more
becoming or being declared due and payable before it would otherwise become due
and payable; (iv) entry of a final judgment for the payment of money against the
Company or any Restricted Subsidiary in an amount of $5,000,000 or more which
remains undischarged or unstayed for a period of 60 days after the date on which
the right to appeal such judgment has expired or become subject to an
enforcement proceeding; or (v) certain events of bankruptcy, insolvency or
reorganization.
In case an Event of Default (other than arising out of certain events of
bankruptcy, insolvency or reorganization) occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the Notes at the
time Outstanding, by notice in writing to the Company (and to the Trustee if
given by the Holders), may declare to be due and payable immediately that
portion of the principal amount of the Notes at the time Outstanding and accrued
and unpaid interest if any, to the date of acceleration and upon such
declaration the same shall become and be immediately due and payable. In case
an Event of Default arising out of certain events of bankruptcy, insolvency or
reorganization occurs and is continuing, the outstanding principal of and
accrued and unpaid interest if any, on the Notes shall become and be
A-6
immediately due and payable without any declaration or other act on the part of
the Trustee or any of the Holders.
Such declaration or acceleration and its consequences may be rescinded by
Holders of a majority in aggregate principal amount of Notes at the time
Outstanding if all existing Events of Default have been cured or waived (except
non-payment of principal that has become due solely because of the acceleration)
and if the rescission would not conflict with any judgment or decree.
An existing Default (other than a default in payment of principal of or
interest on the Notes or default with respect to a provision which cannot be
modified under the terms of the Indenture without the consent of each Note
Holder affected) may be waived by the Holders of a majority in aggregate
principal amount of Notes at the time Outstanding upon the conditions provided
in the Indenture.
14. Trustee Dealings with Company.
United States Trust Company of New York, the Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company or its Affiliates, with the same
rights it would have if it were not Trustee.
15. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder of a Note by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
16. Authentication.
This Security shall not be valid until the Trustee signs the certificate of
authentication on the second page of this Note.
A-7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT.....Custodian.....
(Cust.) (Minor)
TEN ENT - as tenants by the entireties Under Uniform Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as .......................
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
-----------------------
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
Please Insert Social Security or Employer
Identification Number of Assignee
- --------------------------------------------------
- -
- --------------------------------------------------
________________________________________________________________________________
Please Print or Typewrite Name and Address
Including Postal Zip Code of Assignee
____________________________________________________________________________ the
within Security and all rights thereunder, hereby irrevocably constituting
and appointing
_______________________________________________________________________ attorney
to Transfer said Security on the books of the Company, with full power
of substitution in the premises.
Dated: ___________________________________ Signature___________________________
NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within note in every particular, without
alteration or enlargement or any change whatever.
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased or redeemed by the Company
pursuant to the Indenture, check the box:
[_]
If you want to elect to have only part of this Security purchased by the
Company pursuant to paragraphs 3(j), 3(m)(i) or 3(m)(v) of the Officers'
Certificate adopted pursuant to Sections 2.01 and 2.03 of the Indenture, state
the amount.
$_____________
Date:_________________ Your Signature:_______________________________________
(Sign exactly as your name appears on
the first page of this Security)
Signature Guarantee:_____________________________________________
NOTICE: Signature(s) must be guaranteed by a member firm of a major stock
exchange or a commercial bank or Trust company.
A-9