Exhibit 4.2
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FIRST SUPPLEMENTAL INDENTURE
by and between
STANDARD PACIFIC CORP.
and
BANK ONE TRUST COMPANY, N.A.,
as Trustee
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Dated as of April 10, 2002
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AUTHORIZING THE ISSUANCE OF
9 1/4 % SENIOR SUBORDINATED NOTES DUE 2012
(Supplemental to the Indenture dated as of April 10, 2002)
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TABLE OF CONTENTS
Page
ARTICLE ONE SCOPE OF FIRST SUPPLEMENTAL INDENTURE.......................................................... 1
ARTICLE TWO DEFINITIONS.................................................................................... 2
Section 2.01 Definitions.......................................................................... 2
ARTICLE THREE AUTHORIZATION AND TERMS...................................................................... 8
Section 3.01 Authorization........................................................................ 8
Section 3.02 Terms................................................................................ 8
ARTICLE FOUR REDEMPTION.................................................................................... 10
Section 4.01 Optional Redemption.................................................................. 10
Section 4.02 Acceleration......................................................................... 12
Section 4.03 Change of Control.................................................................... 12
ARTICLE FIVE REGISTRAR OF SECURITIES; PAYING AGENT......................................................... 13
ARTICLE SIX CERTAIN COVENANTS.............................................................................. 13
Section 6.01 Compliance with Securities Laws...................................................... 13
Section 6.02 Limitation on Additional Indebtedness................................................ 13
Section 6.03 Limitations on Liens................................................................. 14
Section 6.04 Limitation on Restricted Payments.................................................... 15
Section 6.05 Limitation on Asset Sales............................................................ 16
Section 6.06 Transactions with Affiliates......................................................... 18
Section 6.07 Limitation on Payment Restrictions Affecting Restricted Subsidiaries................. 18
Section 6.08 Restricted and Unrestricted Subsidiaries............................................. 19
Section 6.09 Mergers and Sales of Assets by the Company........................................... 20
Section 6.10 Reports to Holders of the Notes...................................................... 20
Section 6.11 Future Subsidiary Guarantees......................................................... 20
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TABLE OF CONTENTS
(continued)
Page
Section 6.12 Limitation on Layering of Indebtedness............................................... 20
ARTICLE SEVEN EVENTS OF DEFAULT............................................................................ 20
Section 7.01 Additional Events of Default......................................................... 20
Section 7.02 Inapplicability of Cure Provisions to Certain Events of Default...................... 21
ARTICLE EIGHT MISCELLANEOUS................................................................................ 21
Section 8.01 Governing Law........................................................................ 21
Section 8.02 No Adverse Interpretation of Other Agreements........................................ 21
Section 8.03 No Recourse Against Others........................................................... 21
Section 8.04 Successors and Assigns............................................................... 21
Section 8.05 Duplicate Originals.................................................................. 21
Section 8.06 Severability......................................................................... 21
Exhibit A Form of Note......................................................................... A-1
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STANDARD PACIFIC CORP.
FIRST SUPPLEMENTAL INDENTURE
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This First Supplemental Indenture, dated as of April 10, 2002 (the
"First Supplemental Indenture"), is entered into between Standard Pacific Corp.,
a Delaware corporation (the "Company"), and Bank One Trust Company, N.A., as
trustee (the "Trustee");
W I T N E S S E T H:
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WHEREAS, this First Supplemental Indenture is supplemental to the
Indenture, dated as of April 10, 2002, (the "Original Indenture," and as
supplemented, the "Indenture"), by and between the Company and the Trustee;
WHEREAS, the Company has determined to authorize the creation of its 9
1/4% Senior Subordinated Notes due 2012 (the "Notes"), and currently desires to
issue Notes in the aggregate amount of $150,000,000.
WHEREAS, pursuant to Section 2.01 of the Original Indenture, the
Company may establish one or more Series of Securities from time to time as
authorized by a supplemental indenture; and
WHEREAS, all things necessary to make this First Supplemental
Indenture a valid agreement of the Company and the Trustee, in accordance with
its terms, and a valid amendment of, and supplement to, the Indenture have been
done.
NOW, THEREFORE, the parties hereto agree, as follows:
ARTICLE ONE
SCOPE OF FIRST SUPPLEMENTAL INDENTURE
The changes, modifications and supplements to the Original Indenture
affected by this First Supplemental Indenture shall be applicable only with
respect to, and govern the terms of, the Notes, which shall be unlimited in
aggregate principal amount outstanding at any time and which may be issued from
time to time, and shall not apply to any other Securities that may be issued
under the Original Indenture unless a supplemental indenture with respect to
such other Securities specifically incorporates such changes, modifications and
supplements.
In the event that the Company shall issue and the Trustee shall
authenticate any Notes issued under this First Supplemental Indenture subsequent
to the Original Issue Date, the Company shall use its reasonable best efforts to
obtain the same "CUSIP" number for such Notes as is printed on the Notes
outstanding at such time; provided, however, that if any Notes issued under this
First Supplemental Indenture subsequent to the Original Issue Date is
determined, pursuant to an Opinion of Counsel for the Company in a form
reasonably satisfactory to the Trustee, to be a different class of security than
the Notes outstanding at such time for federal income tax purposes, the Company
may obtain a "CUSIP" number for such Notes that is different than the "CUSIP"
number printed on the Notes then outstanding. Notwithstanding the
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foregoing, all Notes issued under this First Supplemental Indenture shall vote
and consent together on all matters as one class and no Notes will have the
right to vote or consent as a separate class on any matter.
ARTICLE TWO
DEFINITIONS
Section 2.01 Definitions. The following terms shall have the meaning set
forth below in this First Supplemental Indenture. Except as otherwise provided
in this First Supplemental Indenture, all words, terms and phrases defined in
the Original Indenture (but not otherwise defined herein) shall have the same
meaning herein as in the Original Indenture. To the extent terms defined herein
differ from terms defined in the Original Indenture the terms defined herein
will govern for purposes of this First Supplemental Indenture and the Notes.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business; or (ii) the Capital Stock
of a Person that becomes a Restricted Subsidiary as a result of the acquisition
of such Capital Stock by the Company or another Restricted Subsidiary; provided,
however, that any such Restricted Subsidiary is primarily engaged in a Related
Business. For purposes of this definition, "Related Business" means any business
related, ancillary or complementary (as defined in good faith by the Board of
Directors) to the business of the Company and the Restricted Subsidiaries on the
Original Issue Date.
"Asset Disposition" means any sale, lease, transfer or other disposition
(or series of related sales, leases, transfers or dispositions) by the Company
or any Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the purposes of this
definition as a "disposition"), of (i) any shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares and, to the
extent required by local ownership laws in foreign countries, shares owned by
foreign shareholders); (ii) all or substantially all the assets of any division,
business segment or comparable line of business of the Company or any Restricted
Subsidiary; or (iii) any other assets of the Company or any Restricted
Subsidiary having a fair market value (as determined in good faith by the Board
of Directors) in excess of $1,000,000 disposed of in a single transaction or
series of related transactions outside of the ordinary course of business of the
Company or such Restricted Subsidiary (other than, in the case of (i), (ii) and
(iii) above, a disposition by a Restricted Subsidiary to the Company or by the
Company or a Restricted Subsidiary to a Wholly-Owned Subsidiary).
"Average Life" means, as of the date of determination, with respect to
Indebtedness, the quotient obtained by dividing (i) the sum of the products of
the numbers of years from the date of determination to the dates of each
successive scheduled principal payment (assuming the exercise by the obligor of
such Indebtedness of all unconditional (other than as to the giving of notice)
extension options of each such scheduled payment date) of such Indebtedness
multiplied by the amount of such principal payment by (ii) the sum of all such
principal payments.
"Change of Control" means the occurrence of any of the following events:
(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
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13d-3 and 13d-5 under the Exchange Act, except that for purposes of this
clause such person or group shall be deemed to have "beneficial ownership"
of all shares that any such person or group has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 50% of the total voting power
of the Voting Stock of the Company;
(ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors (together
with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company was approved by
a majority vote of the directors of the Company then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office; or
(iii) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company to another
Person, other than any such sale to one or more Restricted Subsidiaries,
and in the case of any such merger or consolidation, the securities of the
Company that are outstanding immediately prior to such transaction and
which represent 100% of the aggregate voting power of the Voting Stock of
the Company are changed into or exchanged for cash, securities or property,
unless pursuant to such transaction such securities are changed into or
exchanged for, in addition to any other consideration, securities of the
surviving corporation, or a parent corporation that owns all of the Capital
Stock of such surviving corporation, that represent immediately after such
transaction, at least a majority of the aggregate voting power of the
Voting Stock of the surviving corporation or such parent corporation, as
the case may be.
"Consolidated Coverage Ratio" with respect to the Company as of any date of
determination means the ratio of the Company's EBITDA to its Consolidated
Interest Incurred for the four fiscal quarters ending immediately prior to the
date of determination. Notwithstanding clause (ii) of the definition of
Consolidated Net Income, if the Indebtedness which is being Incurred is Incurred
in connection with an acquisition by the Company or a Restricted Subsidiary, the
Consolidated Coverage Ratio shall be determined after giving effect to both the
Consolidated Interest Incurred related to the Incurrence of such Indebtedness
and the EBITDA as if the acquisition had occurred at the beginning of the four
fiscal quarter period (x) of the Person becoming a Restricted Subsidiary, or (y)
in the case of an acquisition of assets that constitute substantially all of an
operating unit or business, relating to the assets being acquired by the Company
or a Restricted Subsidiary.
"Consolidated Interest Expense" of the Company means, for any period, the
aggregate amount of interest which, in accordance with generally accepted
accounting principles as in effect on the Original Issue Date, would be included
on an income statement for the Company and its Restricted Subsidiaries on a
consolidated basis, whether expensed directly, or included as a component of
cost of goods sold, or allocated to joint ventures or otherwise (including, but
not limited to, imputed interest included on Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, the net costs associated with
Hedging Obligations, amortization of other
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financing fees and expenses, the interest portion of any deferred payment
obligation, amortization of discount or premium, if any, and all other non-cash
interest expense), excluding interest expense related to mortgage banking
operations plus the product of (i) cash dividends paid on any Preferred Stock of
the Company times (ii) a fraction, the numerator of which is one and the
denominator of which is one minus the then current effective aggregate federal,
state and local tax rate of the Company, expressed as a decimal.
"Consolidated Interest Incurred" of the Company means, for any period, (i)
the aggregate amount of interest which, in accordance with generally accepted
accounting principles as in effect on the Original Issue Date, would be included
on an income statement for the Company and its Restricted Subsidiaries on a
consolidated basis, whether expensed directly, or included as a component of
cost of goods sold, or allocated to joint ventures or otherwise (including, but
not limited to, imputed interest included on Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, the net costs associated with
Hedging Obligations, amortization of discount or premium, if any, and all other
non-cash interest expense), excluding interest expense related to mortgage
banking operations, plus or minus, without duplication; (ii) the difference
between capitalized interest for such period and the interest component of cost
of goods sold for such period; plus (iii) the product of (A) cash dividends paid
on any Preferred Stock of the Company, times (B) a fraction, the numerator of
which is one and the denominator of which is one minus the then current
effective aggregate federal, state and local tax rate of the Company, expressed
as a decimal.
"Consolidated Net Income" for any period, means the aggregate of the Net
Income of the Company and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with generally accepted accounting
principles as in effect on the Original Issue Date, provided that (i) the Net
Income of any Person in which the Company or any Restricted Subsidiary has a
joint interest with a third party (other than an Unrestricted Subsidiary) shall
be included only to the extent of the lesser of (A) the amount of dividends or
distributions actually paid to the Company or a Restricted Subsidiary or (B) the
Company's direct or indirect proportionate interest in the Net Income of such
Person, provided that, so long as the Company or a Restricted Subsidiary has an
unqualified legal right to require the payment of a dividend or distribution,
Net Income shall be determined solely pursuant to clause (B); (ii) the Net
Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded; and (iii) the
Net Income of any Unrestricted Subsidiary shall be included only to the extent
of the amount of dividends or distributions (the fair value of which, if other
than in cash, to be determined by the Board of Directors, in good faith) by such
Subsidiary to the Company or to any of its consolidated Restricted Subsidiaries;
and (iv) the Net Income of any Unrestricted Subsidiary, any Homebuilding Joint
Venture or any other Person in which the Company or any Restricted Subsidiary
has a joint interest with a third party that is not existing on December 31,
2001 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.
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"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, 2001 attributable to the Company or any
of its Restricted Subsidiaries, as determined in accordance with generally
accepted accounting principles as in effect on the Original Issue Date.
"Consolidated Tangible Net Worth" with respect to the Company means the
consolidated stockholders' equity of the Company, as determined in accordance
with generally accepted accounting principles, as in effect on the Original
Issue Date, less (i) that portion of any increase in each of the Unrestricted
Subsidiaries' stockholders' equity subsequent to December 31, 2001 attributable
to the Company or any of its Restricted Subsidiaries, as determined in
accordance with generally accepted accounting principles as in effect on the
Original Issue Date, and (ii) the Intangible Assets of the Company and the
Restricted Subsidiaries. "Intangible Assets" means the amount (to the extent
reflected in determining consolidated stockholders' equity) of (A) all write-ups
(other than write-ups of tangible assets of a going concern business made within
twelve months after the acquisition of such business) in the book value of any
asset owned by the Company or any Restricted Subsidiary, and (B) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other like intangibles.
"Disqualified Stock" means "Disqualified Stock" as defined in the Original
Indenture, except that for the purposes of this Series, "Disqualified Stock"
shall not include Capital Stock which is redeemable solely pursuant to a change
in control provision that does not (A) cause such Capital Stock to become
redeemable in circumstances which would not constitute a Change of Control and
(B) require the Company to pay the redemption price therefor prior to the
repurchase date specified under Section 4.03 herein.
"EBITDA" of the Company for any period means the sum of Consolidated Net
Income plus Consolidated Interest Expense plus, without duplication, the
following to the extent deducted in calculating such Consolidated Net Income:
(i) income tax expense, (ii) depreciation expense, (iii) amortization expense
and (iv) all other non-cash items reducing Consolidated Net Income (other than
items that will require cash payments in the future and for which an accrual or
reserve is, or is required by generally accepted accounting principals as in
effect on the Original Issue Date to be, made), less all non-cash items
increasing Consolidated Net Income, in each case for such period.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization of, a Subsidiary of the
Company shall be added to Consolidated Net Income to compute EBITDA only to the
extent (and in the same proportion) that the net income of such Subsidiary was
included in calculating Consolidated Net Income.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Guarantor" means any Restricted Subsidiary guaranteeing payment of the
notes pursuant to Section 6.11 hereof.
"Homebuilding Joint Venture" means (i) any Unrestricted Subsidiary and (ii)
any Person in which the Company or any of its Subsidiaries has an ownership
interest but less than a 100% ownership interest that, in each case, was formed
for and is engaged in homebuilding operations.
"Incur" means issue, assume, guarantee, incur or otherwise become liable
for; provided, however, that any Indebtedness or Capital Stock of a person
existing at the time such Person
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becomes a Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be Incurred by such Subsidiary at the time it
becomes a Subsidiary; provided further, however, that in the case of a discount
security, neither the accrual of interest nor the accretion of original issue
discount shall be considered an Incurrence of Indebtedness. The term
"Incurrence" when used as a noun shall have a correlative meaning.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement or other financial agreement or arrangement designed to
protect the Company or any Restricted Subsidiary against fluctuations in
interest rates.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person) or other
extensions of credit (including by way of guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person.
"Maturity" means the date on which the principal of the Notes becomes due
and payable, whether at the Stated Maturity or by declaration of acceleration,
call for redemption or otherwise.
"Mortgage" means a first priority mortgage or first priority deed of trust
on improved real property.
"Net Income" of any Person means the net income (loss) of such Person,
determined in accordance with generally accepted accounting principles, as in
effect on the Original Issue Date; excluding, however, from the determination of
Net Income all gains (to the extent that they exceed all losses) realized upon
the sale or other disposition (including, without limitation, dispositions
pursuant to sale leaseback transactions) of any real property or equipment of
such Person, which is not sold or otherwise disposed of in the ordinary course
of business, or of any Capital Stock of such Person or its subsidiaries owned by
such Person.
"Net Proceeds" means with respect to any sale, assignment, exchange, lease,
transfer or other disposition of assets, the consideration received by the
Company (or a Restricted Subsidiary, as the case may be) for such disposition
after (i) provision for all income and other taxes resulting from such asset
disposition, (ii) payment of all brokerage commissions, underwriting, legal,
accounting, appraisal and other fees and expenses related to such asset sale and
(iii) deduction of appropriate amounts to be provided by the Company or a
Restricted Subsidiary as a reserve, in accordance with GAAP, against any
liabilities associated with the assets sold or disposed of in such asset
disposition and retained by the Company or a Restricted Subsidiary after such
asset sale, including, without limitation, pension and other post-employment
benefit liabilities and against any indemnification obligations associated with
the assets sold or disposed of in such asset sale.
"Non-Recourse Indebtedness" means Indebtedness or other obligations secured
by a lien on property to the extent that the liability for such Indebtedness or
other obligations is limited to 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.
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"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Original Issue Date" means the first date of the original issue of any of
the Notes pursuant to the Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Notes means the dates specified in Section 3.02(f)(iii).
"Refinance" means, in respect of Indebtedness, to refinance, extend, renew,
refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness
in exchange or replacement for, such Indebtedness. "Refinancing" shall have a
correlative meaning.
"Restricted Investment" means any loan, advance, capital contribution or
transfer (including by way of guaranty or other similar arrangement) in or to
any Unrestricted Subsidiary, Homebuilding Joint Venture or any Person in which
the Company, directly or indirectly, has an ownership interest but less than
100% ownership interest; provided, however, that loans, advances, capital
contributions or transfers (including by way of guaranty or other similar
arrangement) to a Homebuilding Joint Venture shall be counted as a Restricted
Investment only to the extent that the aggregate at any one time outstanding of
all such amounts expended (or with respect to guaranties or similar arrangements
the amounts then guaranteed) exceed, subsequent to December 31, 1996, $25
million for any one Homebuilding Joint Venture or $125 million in the aggregate
for all Homebuilding Joint Ventures. In the case of any loan to value
maintenance agreement (or similar agreement) by which the Company or any
Restricted Subsidiary agrees to maintain for a joint venture a minimum ratio of
indebtedness outstanding to value of collateral property, only amounts owing by
the Company or the Restricted Subsidiary (or which would be owing upon demand of
the lender) under such agreements will be counted as a Restricted Investment.
Restricted Investment shall include the fair market value of the net assets of
any Restricted Subsidiary that at any time is designated an Unrestricted
Subsidiary. Any property transferred to an Unrestricted Subsidiary, and the net
assets of a Restricted Subsidiary that is designated an Unrestricted Subsidiary,
shall be valued at fair market value at the time of such transfer, in each case
as determined by the Board of Directors of the Company in good faith.
"Restricted Subsidiary" means any Wholly-Owned Subsidiary that has not been
designated an Unrestricted Subsidiary.
"Revolving Credit Facility" means that certain Ninth Amended and Restated
Credit Agreement (the "Credit Agreement") dated as of September 30, 2000 among
the Company, Bank of America, National Association, Bank One, N.A., Guaranty
Federal Bank, F.S.B, Bank United, Fleet National Bank, PNC Bank, National
Association, Comerica Bank, Sanwa Bank California, Union Bank of California, Sun
Trust Bank and AmSouth Bank and the other Loan Documents (as defined in the
Credit Agreement) or other analogous documents entered into in connection with
any refinancing, restructuring, renewal, extension, refunding, replacement or
increase thereof, as any of the foregoing has been or may from time to time be
amended, renewed, supplemented or otherwise modified at the option of the
parties thereto (in whole or in part, and without limitation as to amount,
terms, conditions, covenants and other provisions) and to add any Subsidiary as
additional direct obligors thereunder.
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"Stated Maturity" means the date specified in the Notes as the fixed date
on which an amount equal to the principal of or interest on the Notes is due and
payable.
"Unrestricted Subsidiary" means (i) any Subsidiary in which the Company,
directly or indirectly, has less than a 100% ownership interest; (ii) any
Wholly-Owned Subsidiary which in accordance with Section 6.08 herein has been
designated in a resolution adopted by the Board of Directors of the Company as
an Unrestricted Subsidiary, in each case unless and until such Subsidiary shall,
in accordance with Section 6.08 herein, be designated by a resolution of the
Board of Directors of the Company as a Restricted Subsidiary; and (iii) any
Wholly-Owned Subsidiary a majority of the Voting Stock of which shall at the
time be owned directly or indirectly by one or more Unrestricted Subsidiaries.
The Company hereby designates Family Lending Services, Standard Pacific
Financing Inc. and Standard Pacific Financing L.P. as Unrestricted Subsidiaries.
"Voting Stock" means with respect to any Person, securities of any class of
Capital Stock of such Person entitling the holders thereof (whether at all times
or only so long as no senior class of stock has voting power by reason of any
contingency) to vote in the election of members of the board of directors of
such Person.
"Warehouse Facility" means any bank credit agreement, repurchase agreement
or other credit facility entered into to finance the making of Mortgage loans
originated by the Company or any of its Subsidiaries.
"Wholly-Owned Subsidiary" means a Subsidiary, all of the Capital Stock
(whether or not voting, but exclusive of directors' qualifying shares) of which
is owned by the Company or a Wholly-Owned Subsidiary.
ARTICLE THREE
AUTHORIZATION AND TERMS
Section 3.01 Authorization. The Company hereby establishes the 9 1/4%
Senior Subordinated Notes due 2012 as a Series of Securities of the Company. The
form of Note attached hereto as Exhibit A is hereby approved and authorized in
accordance with the provisions of the Indenture.
Section 3.02 Terms. The terms of the Series of Securities established
pursuant to this First Supplemental Indenture shall be as follows:
(a) Title. The title of the Series of Securities established hereby is the
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"9 1/4% Senior Subordinated Notes due 2012."
(b) Aggregate Principal Amount. On April 15, 2002, which shall be the
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Original Issue Date, the Company will deliver Notes for original issue in
aggregate principal amount not to exceed $150,000,000 executed by the Company to
the Trustee for authentication. The aggregate principal amount of the Notes
which may be authenticated and delivered under the Indenture (except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, 2.09, 3.06 and
9.05 of the Original
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Indenture and except for any Notes which, pursuant to Section 2.02 of the
Original Indenture, are deemed never to have been authorized and delivered
thereunder) is unlimited.
(c) Book-Entry System. The Notes will be issued in the form of one or more
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securities in registered global form (the "Global Note") held in book-entry
form. The Depository Trust Company, as depository, ("DTC"), or its nominee will
initially be the sole registered holder of the Notes for all purposes under the
Indenture.
A Global Note may not be transferred except as a whole by DTC to a nominee
of DTC or by a nominee of DTC to DTC. A Global Note is exchangeable for Notes in
definitive form only if (i) the Company notifies the Trustee in writing that DTC
is no longer willing or able to act as a depositary and the Company is unable to
locate a qualified successor within 90 days, or (ii) the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of Notes in
definitive form under the Indenture. In either instance, upon surrender by the
relevant Global Note Holder of its Global Note, Notes in definitive form will be
issued to each person that such Global Note Holder and DTC identifies as being
the beneficial owner of the related Notes. Any Global Note that is exchangeable
for Notes in definitive form pursuant to the preceding sentence will be
exchanged for Notes in definitive form in authorized denominations and
transferred to and registered in such names of such beneficial owners as the
Depositary holding such Global Note may direct. Subject to the foregoing, a
Global Note is not exchangeable, except for a Global Note of like denomination
to be registered in the name of the Depositary or its nominee. In the event that
a Global Note becomes exchangeable for Notes in definitive form, Notes in
definitive form will be issued only in fully registered form in denomination of
$1,000 or integral multiples thereof.
(d) Persons to Whom Interest Payable. Interest on the Global Notes shall be
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payable to the Person in whose name a Global Note is registered at the close of
business (whether or not a Business Day) on the Regular Record Date (as set
forth in Section 3.02(f)(iii) below), for such interest payment, except (i) that
interest payable on April 15, 2012 shall be payable to the Person to whom
principal is payable, and (ii) that default interest shall be payable in the
manner provided in Section 2.11 of the Original Indenture.
(e) Stated Maturity. The date on which the principal of the Notes shall be
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payable, unless accelerated pursuant to the Indenture, is April 15, 2012.
(f) Rate of Interest; Interest Payment Dates; Regular Record Dates; Overdue
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Principal and Interest.
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(i) Rate of Interest. The principal amount of each of the Notes shall
bear simple interest at the rate of 9 1/4% per annum. The date from which
interest shall accrue for each of the Notes shall be April 15, 2002 or 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 April 15 and October 15 of each year, commencing
October 15, 2002.
9
If any Interest Payment Date or Maturity of the Notes falls on a day
that is not a Business Day, the payment due on such Interest Payment Date
or at Maturity will be made on the following day that is a Business Day as
if it were made on the date such payment was due and no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date or Maturity, as the case may be.
(iii) Regular Record Dates. The Regular Record Dates for interest
payable on each April 15 and October 15 will be the immediately preceding
April 1 and October 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 9 1/4% per
annum.
(g) Place of Payment; Registration of Transfer and Exchange; Notices to
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Company.
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(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, or at any other office or
agency designated by the Company for such purpose; provided, however, that
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at the option of the Company, payment of interest due (other than at
Maturity or upon redemption) may be made by check mailed to the address of
the person entitled thereto as such address shall appear in the register of
Securities.
(ii) Registration of Exchange and Transfer. Notes may be presented
for exchange and registration of transfer at the corporate trust office of
the Trustee in the Borough of Manhattan, The City of New York, or at the
office of any transfer agent hereafter designated by the Company for such
purpose.
(iii) Notices to Company. Notices and demands to or upon the Company
in respect to the Notes and the Indenture may be served at Standard Pacific
Corp., 00000 Xxxxx Xxxxxxx, Xxxxxx, Xxxxxxxxxx 00000, Attention: Secretary.
ARTICLE FOUR
REDEMPTION
Section 4.01 Optional Redemption. The Notes will be redeemable at the
option of the Company, in whole at any time or in part from time to time, on at
least 15 days but not more than 60 days prior written notice mailed to the each
Holder of Notes to be redeemed, at a redemption price equal to the greater of
(i) 100% of the principal amount of the notes to be redeemed or (ii) the sum, as
determined by the Quotation Agent, as defined below, of the present values of
the principal amount of the notes to be redeemed and the remaining scheduled
payments of interest thereon from the redemption date to the maturity date of
the notes to be redeemed, exclusive of interest accrued to the redemption date
(the "Remaining Life") discounted from their respective scheduled payment dates
to the redemption date on a semiannual basis (assuming a 360-day year consisting
of 30-day months) at the Treasury Rate, as defined below, plus 50 basis points,
plus, in either case, accrued and unpaid interest on the principal amount being
redeemed to the date of redemption.
10
If money sufficient to pay the redemption price of and accrued interest on
all of the Notes (or portions thereof) to be redeemed on the redemption date is
deposited with the Trustee or paying agent on or before 11:00 a.m. (New York
City time) on the redemption date and certain other conditions are satisfied,
then on and after such redemption date, interest will cease to accrue on such
notes (or such portion thereof) called for redemption.
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.
As used in this Section 4.01:
(a) "Comparable Treasury Issue" means the United States Treasury
security selected by the Quotation Agent as having a maturity comparable to the
Remaining Life that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity with the Remaining Life.
(b) "Comparable Treasury Price means, with respect to any redemption
date, the average of the Reference Treasury Dealer Quotations for such
redemption date.
(c) "Quotation Agent" means the Reference Treasury Dealer appointed
by the Company.
(d) "Reference Treasury Dealer" means each of Credit Suisse First
Boston Corporation, Banc of America Securities LLC, Xxxxxxx Xxxxx Xxxxxx Inc.
and Banc One Capital Markets, Inc. and their successors; provided, however, that
if any of the foregoing ceases to be a primary U.S. Government securities dealer
in New York City, a "primary treasury dealer," the Company will substitute
therefor another primary treasury dealer.
(e) "Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third business day preceding such redemption date.
(f) "Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual yield to maturity of the Comparable
Treasury Issue, calculated on the third business day preceding such redemption
date using a price for the Comparable Treasury Issue (expressed as a percentage
of its principal amount) equal to the Comparable Treasury Price for such
redemption date.
Notes in denominations larger than $1,000 may be redeemed in part. On and
after the redemption date interest ceases to accrue on Notes or portions of them
called for redemption, provided that if the Company shall default in the payment
of such Note at the redemption price together with accrued interest, interest
shall continue to accrue at the rate borne by the Notes.
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Section 4.02 Acceleration. The principal amount of the Notes shall be
payable upon declaration of acceleration of the maturity thereof pursuant to
Section 6.02 of the Original Indenture.
Section 4.03 Change of Control. Upon the occurrence of a Change of
Control, each Holder shall have the right to require that the Company repurchase
all or a portion of such Holder's Notes at a purchase price in cash equal to
101% of the principal amount thereof plus accrued and unpaid interest, if any,
to the date of repurchase (subject to the right of Holders of record on the
relevant Record Date to receive interest due on the relevant Interest Payment
Date), in accordance with the provisions of the next paragraph.
Within 30 days following any Change of Control, the Company shall mail a
notice to each Holder with a copy to the Trustee stating:
(a) that a Change of Control has occurred and that such Holder has the
right to require the Company to purchase such Holder's Notes at a purchase price
in cash equal to 101% of the principal amount outstanding at the repurchase date
plus accrued and unpaid interest to the date of repurchase (subject to the right
of Holders of record on the relevant record date to receive interest on the
relevant interest payment date) (the "Repurchase Price");
(b) the circumstances and relevant facts and relevant financial information
regarding such Change of Control;
(c) the repurchase date (which shall be no earlier than 30 days nor later
than 60 days from the date such notice is mailed) (the "Repurchase Date");
(d) that any Note not tendered or accepted for payment will continue to
accrue interest;
(e) that any Note accepted for payment shall cease to accrue interest after
the Repurchase Date;
(f) that Holders electing to have a Note purchased will be required to
surrender the Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse side of the Note completed, to the Paying Agent at the address
specified in the Notice at least five days before the Repurchase Date;
(g) that Holders will be entitled to withdraw their election if the Paying
Agent receives, not later than three days prior to the Repurchase Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have the Note
purchased; and
(h) that Holders whose Notes were purchased only in part will be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered.
On the Repurchase Date, the Company shall (i) accept for payment Notes or
portions thereof properly tendered, (ii) deposit with the Paying Agent money
sufficient to pay the purchase price of all Notes or portions thereof so
accepted and (iii) deliver to the Trustee Notes
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so accepted together with an Officers' Certificate stating the Notes or portions
thereof accepted for payment by the Company. The Paying Agent shall promptly
mail or deliver to Holders of Notes so accepted, payment in an amount equal to
the Repurchase Price, and the Trustee shall promptly authenticate and mail or
deliver to such Holders a new Note equal in principal amount of any unpurchased
portion of the Note surrendered. The Company will publicly announce the results
on or as soon after as practical the Repurchase Date. For purposes of this
Section 4.03, the Trustee shall act as the Paying Agent.
ARTICLE FIVE
REGISTRAR OF SECURITIES; PAYING AGENT
The Company hereby appoints the Trustee as the Registrar and initial Paying
Agent. The books of the Registrar of the Securities for the Notes will be
initially maintained at the Corporate Trust Office of the Trustee.
ARTICLE SIX
CERTAIN COVENANTS
The Company covenants as follows:
Section 6.01 Compliance with Securities Laws. The Company shall comply, to
the extent applicable, with the requirements of Section 14(e) of the Exchange
Act and any other securities laws or regulations in connection with the
repurchase of Notes pursuant to Section 4.03 or 6.05 hereunder. To the extent
that the provisions of any securities laws or regulations conflict with said
provisions hereunder, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under said provisions hereunder by virtue thereof.
Section 6.02 Limitation on Additional Indebtedness. The Company will not,
and will not permit any Restricted Subsidiary to, directly or indirectly, Incur
any Indebtedness unless, after giving effect thereto, either (i) the ratio of
Indebtedness of the Company and the Restricted Subsidiaries (excluding, for
purposes of this calculation only, (A) purchase money mortgages that are
Non-Recourse Indebtedness, and (B) surety, performance or completion guarantees
or bonds or similar undertakings obtained or issued in the ordinary course of
business) to Consolidated Tangible Net Worth of the Company is less than 2.5 to
1; or (ii) the Consolidated Coverage Ratio exceeds 2.0 to 1.
Notwithstanding the foregoing, the Company and its Restricted Subsidiaries
may Incur: (i) Indebtedness under one or more Bank Credit Facilities in an
amount not in excess of $450 million outstanding in the aggregate at any one
time; (ii) purchase money mortgages that are Non-Recourse Indebtedness; (iii)
obligations Incurred under letters of credit, escrow agreements and surety,
performance or completion guarantees or bonds or other similar undertakings
obtained or issued in the ordinary course of business; (iv) Indebtedness
Incurred under a Warehouse Facility, provided that the amount of such
Indebtedness (excluding funding drafts issued thereunder) outstanding at any
time pursuant to this clause (iv) may not exceed 98%
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of the value of the Mortgages pledged to secure Indebtedness thereunder; (v)
Indebtedness Incurred solely for the purpose of refinancing or repaying any
existing Indebtedness so long as (A) the principal amount of such new
Indebtedness does not exceed the principal amount of the existing Indebtedness
refinanced or repaid (plus the premiums or other payments required to be paid in
connection with such refinancing or repayment and the expenses incurred in
connection therewith), (B) the maturity of such new Indebtedness is not earlier
than that of the existing Indebtedness to be refinanced or repaid, (C) such new
Indebtedness, determined as of the date of Incurrence, has an Average Life at
least equal to the remaining Average Life of the Indebtedness to be refinanced
or repaid, (D) the new Indebtedness is pari passu with or subordinate to the
Indebtedness being refinanced or repaid, and (E) the existing and new
Indebtedness are obligations of the same entity; and (vi) if any Restricted
Subsidiary guarantees payment of the Notes pursuant to Section 6.11,
Indebtedness of the Company owed to a Guarantor and Indebtedness of any
Guarantor owed to the Company or any other Guarantor; provided that upon any
Guarantor ceasing to be a Guarantor or such Indebtedness being owed to any
Person other than the Company or a Guarantor, the Company or such Restricted
Subsidiary, as applicable, shall be deemed to have Incurred Indebtedness not
permitted by this clause (vi).
Section 6.03 Limitations on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, issue, assume, guarantee or suffer to exist
any Indebtedness secured by any mortgage, pledge, lien or other encumbrance of
any nature (herein collectively referred to as a "lien" or "liens") upon any
property of the Company or any Restricted Subsidiary, or on any shares of stock
of any Restricted Subsidiary, without in any such case effectively providing
that the Notes (together with, if the Company shall so determine, any other
Indebtedness of the Company or such Restricted Subsidiary ranking pari passu
with the Notes) shall be secured equally and ratably with such Indebtedness,
except that the foregoing restrictions shall not apply to: (i) liens existing on
December 31, 2001; (ii) pledges, guarantees and deposits under workers'
compensation laws, unemployment insurance laws or similar legislation, good
faith deposits under bids, tenders or contracts, deposits to secure public or
statutory obligations or appeal or similar bonds, and liens created by special
assessment districts used to finance infrastructure improvements; (iii) liens
existing on property or assets of any entity on the date on which it becomes a
Restricted Subsidiary, which secured Indebtedness is not Incurred in
contemplation of such entity becoming a Restricted Subsidiary; (iv) liens on or
leases of model home units; (v) Capitalized Lease Obligations entered into in
the ordinary course of business in amounts not in excess of $10,000,000
outstanding in the aggregate at any one time; (vi) the replacement of any of the
items set forth in clauses (i) through (v) above, provided that (A) the
principal amount of the Indebtedness secured by liens shall not be increased,
(B) such Indebtedness, determined as of the date of Incurrence, has an Average
Life at least equal to the remaining Average Life of the Indebtedness to be
refinanced, (C) the maturity of such Indebtedness is not earlier than that of
the Indebtedness to be refinanced, and (D) the liens shall be limited to the
property or part thereof which secured the lien so replaced or property
substituted therefor as a result of the destruction, condemnation or damage of
such property; (vii) liens on property acquired, constructed or improved by the
Company or any Restricted Subsidiary, which liens are either existing at the
time of such acquisition or at the time of completion of construction or
improvement or created within 120 days after such acquisition, completion or
improvement, to secure Indebtedness Incurred or assumed to finance all or part
of such property, including any increase in the principal amount of such
Indebtedness and any extension of the repayment schedule and maturity of such
Indebtedness Incurred or entered into in the ordinary course of
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business; (viii) liens or priorities incurred in the ordinary course of
business, such as laborers', employees', carriers', mechanics', vendors' and
landlords' liens or priorities; (ix) liens for certain taxes and certain survey
and title exceptions; (x) liens arising out of judgments or awards against the
Company or any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary is in good faith prosecuting an appeal or proceeding for
review and with respect to which it has secured a stay of execution pending such
appeal or proceeding for review; (xi) liens on property owned by any
Homebuilding Joint Venture; (xii) liens securing a Warehouse Facility, provided
that such liens shall not extend to any assets other than the mortgages,
promissory notes and other collateral that secures mortgage loans made by the
Company or any of its Restricted Subsidiaries; (xiii) Liens securing Senior
Indebtedness and, if any Restricted Subsidiary guarantees payment of the Notes
pursuant to Section 6.11 hereof, Liens securing Indebtedness of such Restricted
Subsidiary senior to such guarantee; (xiv) Liens securing the notes and, if any
Restricted Subsidiary guarantees payment of the Notes pursuant to Section 6.11
hereof, Liens securing any such guarantee; (xv) liens which would otherwise be
subject to the foregoing restrictions which, when the Indebtedness relating to
those liens is added to all other then outstanding Indebtedness of the Company
and the Restricted Subsidiaries secured by liens and not listed in clauses (i)
through (xiv) above, does not exceed $50,000,000.
Section 6.04 Limitation on Restricted Payments. The Company will not, nor
will it permit any Restricted Subsidiary to, directly or indirectly, (i) declare
or pay any dividend on, or make any distribution in respect of, or purchase,
redeem or otherwise acquire or retire for value, any Capital Stock of the
Company other than through the issuance solely of the Company's own Capital
Stock (other than Disqualified Stock), or rights thereto; (ii) make any
principal payment on, or redeem, repurchase, defease or otherwise acquire or
retire for value prior to scheduled principal payments or maturity, Indebtedness
of the Company or any Restricted Subsidiary which is expressly subordinated in
right of payment to the Notes (other than Indebtedness Incurred after the
issuance of the Notes provided that such repayment, redemption, repurchase,
defeasance or other retirement is made substantially concurrent with the receipt
of proceeds from the Incurrence of Indebtedness that by its terms is both
subordinated in right of payment to the Notes and matures, by sinking fund or
otherwise, after April 15, 2012; or (iii) make any Restricted Investment (such
payments or any other actions described in (i), (ii) and (iii) being referred to
herein collectively as, "Restricted Payments") unless (A) at the time of, and
after giving effect to, the proposed Restricted Payment, no Event of Default
(and no event that, after notice or lapse of time, or both, would become an
Event of Default) shall have occurred and be continuing, (B) the Company is able
to Incur an additional $1.00 of Indebtedness pursuant to the first paragraph of
the covenant described under Section 6.02 herein, and (C) at the time of, and
after giving effect thereto, the sum of the aggregate amount expended (or with
respect to guaranties or similar arrangements the amount then guaranteed) for
all such Restricted Payments (the amount expended for such purposes, if other
than in cash, to be determined by the Board of Directors of the Company, whose
determination shall be conclusive and evidenced by a resolution of such Board of
Directors filed with the Trustee) subsequent to June 30, 1997 shall not exceed
the sum of (I) 50% of the aggregate Consolidated Net Income (or, in case such
aggregate Consolidated Net Income shall be a deficit, minus 100% of such
deficit) of the Company accrued on a cumulative basis subsequent to June 30,
1997, (II) the aggregate net proceeds, including the fair market value of
property other than cash (as determined by the Board of Directors of the
Company, whose determination shall be conclusive and evidenced by a resolution
of such Board of Directors filed with the Trustee), received by the Company from
the
15
issuance or sale, after the Original Issue Date, of Capital Stock (other than
Disqualified Stock) of the Company, including Capital Stock (other than
Disqualified Stock) of the Company issued subsequent to the Original Issue Date
upon the conversion of Indebtedness of the Company initially issued for cash,
(III) 100% of dividends or distributions (the fair value of which, if other than
cash, to be determined by the Board of Directors, in good faith) paid to the
Company (or any Restricted Subsidiary) by an Unrestricted Subsidiary,
Homebuilding Joint Venture or any other Person in which the Company (or any
Restricted Subsidiary), directly or indirectly, has an ownership interest but
less than a 100% ownership interest to the extent that such dividends or
distributions do not exceed the amount of loans, advances or capital
contributions made to any such entity or Person subsequent to the Original Issue
Date and included in the calculation of Restricted Payments, and (IV)
$40,000,000; provided, however, that the foregoing shall not prevent (aa) the
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payment of any dividend within 60 days after the date of declaration thereof, if
at said date of declaration the making of such payment would have complied with
the provisions of this limitation on dividends; provided, however, that such
dividend shall be included in future calculations of Restricted Payments, (bb)
the retirement of any shares of the Company's Capital Stock by exchange for, or
out of proceeds of the substantially concurrent sale of, other shares of its
Capital Stock (other than Disqualified Stock); provided, however, that the
aggregate net proceeds from such sale shall be excluded from the calculation of
the amounts under subclause (II) above, or (cc) the redemption, repayment,
repurchase, defeasance or other retirement of Indebtedness with proceeds
received from the substantially concurrent sale of shares of the Company's
Capital Stock (other than Disqualified Stock); provided however, that the
aggregate net proceeds from such sale shall be excluded from the calculation of
the amounts under subclause (II) above.
Section 6.05 Limitation on Asset Sales. The Company will not, and will not
permit any Restricted Subsidiary to, make an Asset Disposition, other than for
fair market value and in the ordinary course of business, with an aggregate net
book value as of the end of the immediately preceding fiscal quarter greater
than 10% of the Company's total consolidated assets as of that date, unless (i)
the consideration received by the Company (or a Restricted Subsidiary, as the
case may be) for such disposition consists of at least 70% cash; provided,
--------
however, that for purposes of this provision (i), the amount of any liabilities
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assumed by the transferee and any Notes or other Obligations received by the
Company or a Restricted Subsidiary which are immediately converted into cash
shall be deemed to be cash, and (ii) the Company shall within 390 days after the
date of such sale or sales, apply the Net Proceeds from such sale or sales in
excess of an amount equal to 10% of the Company's total consolidated assets to
(A) a purchase of or an Investment in Additional Assets (other than cash or cash
equivalents), (B) repayment, redemptions or repurchases of Senior Indebtedness
of the Company (or, if any Restricted Subsidiary guarantees payment of the Notes
pursuant to Section 6.11 hereof, Indebtedness of such Restricted Subsidiary
senior to such guarantee) or of Indebtedness of the Company which is pari passu
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with the Notes (or, if any Restricted Subsidiary guarantees payment of the Notes
pursuant to Section 6.11 hereof, Indebtedness of such Restricted Subsidiary
which ranks equally with such guarantee), and/or (C) make an offer to acquire
all or part of the Notes (or Indebtedness of the Company which is pari passu
---- -----
with the Notes) at a purchase price equal to the principal amount thereof plus
accrued and unpaid interest thereon to the purchase date.
In the event the Company shall be required to offer to redeem Notes
pursuant to the provisions of this Section 6.05, the Company shall deliver to
the Trustee an Officers' Certificate
16
specifying the Asset Sale Offer Amount (as defined below) and the proposed date
of purchase of the Notes by the Company (the "Asset Sale Purchase Date"). Not
less than 30 days nor more than 60 days prior to the Asset Sale Purchase Date,
the Company shall mail or cause the Trustee to mail (in the Company's name and
at its expense) an offer to redeem (the "Asset Sale Offer") to each Holder of
Notes. The redemption price shall be 100% of the principal amount of the Notes
plus accrued interest to the redemption date and upon surrender to the Trustee
or the Paying Agent, the Holders of such Notes shall be paid the redemption
price. The Asset Sale Offer is to be and shall be mailed by the Company or the
Trustee to the Holders of the Notes at their last registered address. The Asset
Sale Offer shall remain open from the time of mailing until 5 days before the
Asset Sale Purchase Date. The Notice shall contain all instructions and
materials necessary to enable such Holders to tender Notes pursuant to the Asset
Sale Offer. The Notice, which shall govern the terms of the Asset Sale Offer,
shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 6.05;
(b) the amount of Notes offered to be redeemed (the "Asset Sale Offer
Amount"), the purchase price and the Asset Sale Purchase Date;
(c) that any Note not tendered or accepted for payment will continue to
accrue interest;
(d) that any Note accepted for payment pursuant to the Asset Sale Offer
shall cease to accrue interest after the Asset Sale Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse side of the Note completed,
to the Paying Agent at the address specified in the Notice at least five days
before the Asset Sale Purchase Date;
(f) that Holders will be entitled to withdraw their election if the Paying
Agent receives, not later than three days prior to the Asset Sale Purchase Date,
a telegram, telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Note the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to have the Note
purchased;
(g) that if Notes and or Indebtedness of the Company which is pari passu
with the 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
and Parity Debt on a pro rata basis or by lot or in such other manner as the
Trustee shall deem fair and appropriate; and
(h) that Holders whose Notes were purchased only in part will be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered.
On the Asset Sale Purchase Date, the Company shall (i) accept for payment
Notes or portions thereof properly tendered pursuant to the Asset Sale Offer (on
a pro rata basis, by lot or in such other manner specified by the Trustee if
required pursuant to paragraph (g) above), (ii) deposit with the Paying Agent
money sufficient to pay the purchase price of all Notes or portions thereof so
accepted and (iii) deliver to the Trustee Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof accepted for payment
by the Company.
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The Paying Agent shall promptly mail or deliver to Holders of Notes so accepted,
payment in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Note equal in principal
amount of any unpurchased portion of the Note surrendered. Any Notes not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company will publicly announce the results of the Asset Sale Offer
on or as soon after as practical the Asset Sale Purchase Date. For avoidance of
doubt, any amount of Net Proceeds remaining after the Asset Sale Purchase Date
shall be returned by the Paying Agent to the Company and may be used by the
Company for any purpose not inconsistent with this Indenture. For purposes of
this Section 6.05, the Trustee shall act as the Paying Agent.
Section 6.06 Transactions with Affiliates.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, enter into or permit to exist any transaction or series of related
transactions (including the purchase, sale, lease or exchange of any property,
employee compensation arrangements or the rendering of any service) with any
Affiliate of the Company (an "Affiliate Transaction") unless the terms thereof
(i) are no less favorable to the Company or such Restricted Subsidiary than
those that could be obtained at the time of such transaction in arm's-length
dealings with a Person who is not such an Affiliate; and (ii) if such Affiliate
Transaction (or series of related Affiliate Transactions) involve aggregate
payments in an amount in excess of $10 million in any one year, (A) are set
forth in writing and (B) have been approved by a majority of the disinterested
members of the Board of Directors.
(b) The provisions of the foregoing paragraph shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant to the covenant described under
Section 6.04 herein; (ii) any issuance of securities, or other payments, awards
or grants in cash, securities or otherwise, pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans in the ordinary
course of business and approved by the Board of Directors or a committee
thereof; (iii) the grant of stock options or similar rights to employees and
directors of the Company in the ordinary course of business and pursuant to
plans approved by the Board of Directors or a committee thereof; (iv) loans or
advances to employees in the ordinary course of business of the Company or its
Restricted Subsidiaries; (v) fees, compensation or employee benefit arrangements
paid to and indemnity provided for the benefit of directors, officers or
employees of the Company or any Subsidiary in the ordinary course of business;
or (vi) any Affiliate Transaction between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries.
Section 6.07 Limitation on Payment Restrictions Affecting Restricted
Subsidiaries. The Company will not, and will not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become effective,
any consensual encumbrance or consensual restriction on the ability of any
Restricted Subsidiary (i) to pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (ii) to make any loans or advances to the
Company or (iii) transfer any of its property or assets to the Company, except
for: (a) any encumbrance or restriction pursuant to an agreement in effect at or
entered into on the Original Issue Date; (b) any encumbrance or restriction with
respect to a Restricted Subsidiary pursuant to an
18
agreement relating to any Indebtedness Incurred by such Restricted Subsidiary
which was entered into on or prior to the date on which such Restricted
Subsidiary was acquired by the Company (other than as consideration in, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Company) and outstanding on such date; (c) any encumbrance or restriction
pursuant to an agreement effecting a Refinancing of Indebtedness Incurred
pursuant to an agreement referred to in clause (a) or (b) of this covenant (or
effecting a Refinancing of such Refinancing Indebtedness pursuant to this clause
(c)) or contained in any amendment to an agreement referred to in clause (a) or
(b) of this covenant or this clause (c); provided, however, that the
encumbrances and restrictions with respect to such Restricted Subsidiary
contained in any such refinancing agreement or amendment are no more restrictive
in any material respect than the encumbrances and restrictions with respect to
such Restricted Subsidiary contained in such agreements; (d) any such
encumbrance or restriction consisting of customary contractual non-assignment
provisions to the extent such provisions restrict the transfer of rights, duties
or obligations under such contract; (e) in the case of clause (iii) above,
restrictions contained in security agreements or mortgages securing Indebtedness
of a Restricted Subsidiary to the extent such restrictions restrict the transfer
of the property subject to such security agreements or mortgages; (f) any
restriction with respect to a Restricted Subsidiary imposed pursuant to an
agreement entered into for the sale or disposition of all or substantially all
the Capital Stock or assets of such Restricted Subsidiary pending the closing of
such sale or disposition; and (g) any restriction imposed by applicable law.
Section 6.08 Restricted and Unrestricted Subsidiaries. The Company will
not permit any Restricted Subsidiary to be designated as an Unrestricted
Subsidiary unless the Company and its Restricted Subsidiaries would thereafter
be permitted to (i) Incur at least $1.00 of Indebtedness under the first
paragraph of the covenant described in Section 6.02 herein and (ii) make a
Restricted Payment of at least $1.00 under Section 6.04 herein.
The Company will not permit any Unrestricted Subsidiary to be designated as
a Restricted Subsidiary unless such Subsidiary has outstanding no Indebtedness
except such Indebtedness as the Company could permit it to become liable for
immediately after becoming a Restricted Subsidiary under Section 6.02 herein.
Promptly after the adoption of any Board Resolution designating a
Restricted Subsidiary as an Unrestricted Subsidiary or an Unrestricted
Subsidiary as a Restricted Subsidiary, a copy thereof shall be filed with the
Trustee, together with an Officers' Certificate stating that the provisions of
this Section 6.08 have been complied with in connection with such designation.
The Company will not permit Standard Pacific of Texas, L.P., HSP Arizona,
Inc., Standard Pacific Construction, Inc., Standard Pacific Active Adult
Communities, Inc. or The Writer Corporation to be designated as an Unrestricted
Subsidiary or permit the assets of the Company or any Subsidiary employed in the
homebuilding operations to be transferred to an Unrestricted Subsidiary, except
in amounts permitted under Section 6.04 herein. At such time, if any, as
Standard Pacific of Texas L.P. is converted or merged back into a corporation
named Standard Pacific of Texas, Inc., the reference in the prior sentence to
Standard Pacific of Texas, L.P. shall be read as a reference to Standard Pacific
of Texas, Inc.
19
Section 6.09 Mergers and Sales of Assets by the Company. The Company will
not consolidate with, merge into or transfer all or substantially all of its
assets to another person unless (i) such person (if other than the Company) is a
corporation organized under the laws of the United States or any state thereof
or the District of Columbia and expressly assumes all the obligations of the
Company under the Indenture and the Notes; (ii) immediately after giving effect
to such transaction, no Default or Event of Default shall have occurred and be
continuing; (iii) the Consolidated Net Worth of the obligor of the Notes
immediately after giving effect to such transaction (exclusive of any
adjustments to Consolidated Net Worth relating to transaction costs and
accounting adjustments resulting from such transaction) is not less than the
Consolidated Net Worth of the Company immediately prior to such transaction; and
(iv) the surviving corporation would be able to Incur at least an additional
$1.00 of Indebtedness pursuant to the first paragraph of the covenant described
under Section 6.02.
Section 6.10 Reports to Holders of the Notes. So long as the Company is
subject to the periodic reporting requirements of the Exchange Act, it shall
continue to furnish the information required thereby to the SEC. Even if the
Company is entitled under the Exchange Act not to furnish such information to
the SEC or to the holders of the Notes, it will nonetheless continue to furnish
information under Section 13 or 15(d) of the Exchange Act to the SEC and the
Trustee as if it were subject to such periodic reporting requirements.
Section 6.11 Future Subsidiary Guarantees. The Company shall not permit
any of its Restricted Subsidiaries, directly or indirectly, to guarantee, assume
or in any manner become liable with respect to any of the Senior Notes (other
than guarantees in existence on the date of the Indenture) unless such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to the Indenture providing for the guarantee of the Notes on the same
terms as the guarantee of such Senior Notes except that the guarantee under the
supplemental indenture shall be subordinated to the guarantee of such Senior
Notes to the same extent as the notes are subordinated to such Senior Notes
under the Indenture.
Section 6.12 Limitation on Layering Indebtedness. The Company will not
Incur any Indebtedness that is or purports to be by its terms (or by the terms
of any agreement governing such Indebtedness) contractually subordinated to any
other Indebtedness of the Company, unless such Indebtedness is also by its terms
(or by the terms of any agreement governing such Indebtedness) contractually (1)
designated as ranking pari passu with the Notes or (2) expressly made
subordinate to the Notes to the same extent and in the same manner as such
Indebtedness is contractually subordinated to such other Indebtedness of the
Company.
ARTICLE SEVEN
EVENTS OF DEFAULT
Section 7.01 Additional Events of Default. In addition to the Events of
Default specified in the Original Indenture, the following shall constitute
Events of Default under Section 6.01 of the Original Indenture with respect to
the Notes:
(i) default under any mortgage, indenture (including the Indenture)
or instrument under which is issued or which secures or evidences Indebtedness
of the Company or any Restricted Subsidiary (other than Non-Recourse
Indebtedness) which default constitutes a failure
20
to pay principal of such Indebtedness in an amount of $25,000,000 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
$25,000,000 or more becoming or being declared due and payable before it would
otherwise become due and payable, and
(ii) entry of a final judgment for the payment of money against the
Company or any Restricted Subsidiary in an amount of $5,000,000 or more which
remains undischarged or unstayed for a period of 60 days after the date on which
the right to appeal such judgment has expired or becomes subject to an
enforcement proceeding.
Section 7.02 Inapplicability of Cure Provisions to Certain Events of
Default. With respect to Section 6.01(3) of the Original Indenture, the failure
of the Company to comply with the covenant described under Section 6.09 herein
will constitute an Event of Default with notice as provided in Section 6.01 of
the Original Indenture, but without passage of time.
ARTICLE EIGHT
MISCELLANEOUS
Section 8.01 Governing Law. The laws of the State of New York shall govern
this First Supplemental Indenture and the Notes.
Section 8.02 No Adverse Interpretation of Other Agreements. This First
Supplemental Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this First Supplemental Indenture.
Section 8.03 No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or this First Supplemental Indenture
or for any claim based on, in respect of or by reason of, such obligations or
their creation. Each Securityholder by accepting the Notes waives and releases
all such liability. The waiver and release are part of the consideration for the
issue of the Notes.
Section 8.04 Successors and Assigns. All covenants and agreements of the
Company in this First Supplemental Indenture and the Notes shall bind its
successors and assigns. All agreements of the Trustee in this First Supplemental
Indenture shall bind its successors and assigns.
Section 8.05 Duplicate Originals. The parties may sign any number of
copies of this First Supplemental Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement.
Section 8.06 Severability. In case any one or more of the provisions
contained in this First Supplemental Indenture or in the Notes shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this First Supplemental Indenture or the Notes.
(Remainder of page intentionally left blank)
21
IN WITNESS WHEREOF, the parties hereto have executed this First
Supplemental Indenture by their officers thereunto as of this 10th day of April,
2002.
STANDARD PACIFIC CORP.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx
Senior Vice President-Finance and
Chief Financial Officer
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------------
Xxxx X. Xxxxxxxxx
Senior Vice President, General
Counsel and Secretary
BANK ONE TRUST COMPANY, N.A.,
as Trustee
By: /s/ Xxxxxx XxXxxxx
---------------------------------
Name: Xxxxxx XxXxxxx
Title: Vice President
S-1
EXHIBIT A
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY. THIS GLOBAL NOTE IS EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF
A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER
THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO THE ISSUER OR
ITS AGENT FOR THE REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. CUSIP No.:
9 1/4% Senior Subordinated Notes due 2012
STANDARD PACIFIC CORP., a Delaware corporation, promises to pay to
CEDE & CO., or registered assigns, the principal sum of ____________ on April
15, 2012.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
Authenticated: April 15, 2002
Dated: April 15, 2002 Standard Pacific Corp.
By_____________________________
Title:
By_____________________________
Title:
Bank One Trust Company, N.A., as Trustee, certifies that this is one
of the Notes referred to in the within mentioned Indenture.
By_____________________________
Authorized Signatory
A-1
STANDARD PACIFIC CORP.
9 1/4% Senior Subordinated Notes due 2012
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 April
15 and October 15 of each year (each an "Interest Payment Date"), commencing
________, 20__ until the principal is paid or made available for payment.
Interest on the Notes will accrue from the most recent date to which interest
has been paid or duly provided for or, if no interest has been paid, from
__________20__, provided that, if there is no existing default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such Interest Payment Date. Interest will be computed on the basis
of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes (except
-----------------
defaulted interest, if any, which will be paid on such special payment date to
Holders of record on such special record date as may be fixed by the Company) to
the persons who are registered Holders of Notes at the close of business on the
April 1 or October 1 immediately preceding the Interest Payment Date. Holders
must surrender Notes to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, Bank One Trust Company, N.A.
--------------------------
(the "Trustee") will act as Paying Agent and Registrar. The Company may change
or appoint any Paying Agent, Registrar or co-Registrar without notice. The
Company or any of its Subsidiaries may act as Paying Agent, Registrar or
co-Registrar.
4. Indenture. The Company issued the Notes under an Indenture dated as of
---------
April 10, 2002 between the Company and the Trustee (the "Original Indenture," as
supplemented by a First Supplemental Indenture dated as of April 10, 2002
between the Company and the Trustee, the "Indenture"). The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 ("TIA") as in effect on the date of
the Indenture. The Notes are subject to all such terms, and Securityholders are
referred to the Indenture and the TIA for a statement of them.
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture. Requests may be made to: Standard
Pacific Corp., 00000 Xxxxx Xxxxxxx, Xxxxxx, Xxxxxxxxxx 00000, Attention:
Secretary.
A-2
5. Optional Redemption. The Notes will be redeemable at the option of the
-------------------
Company, in whole at any time or in part from time to time, on at least 15 days
but not more than 60 days prior written notice mailed to the each Holder of
Notes to be redeemed, at a redemption price equal to the greater of (i) 100% of
the principal amount of the Notes to be redeemed, or (ii) the sum, as determined
by the Quotation Agent, as defined in the Indenture, of the present values of
the principal amount of the Notes to be redeemed and the remaining scheduled
payments of interest thereon from the redemption date to the maturity date of
the Notes to be redeemed, exclusive of interest accrued to the redemption date,
discounted from their respective scheduled payment dates to the redemption date
on a semiannual basis (assuming a 360-day year consisting of 30-day months) at
the Treasury Rate, as defined in the Indenture, plus 50 basis points, plus, in
either case, accrued and unpaid interest on the principal amount being redeemed
to the date of redemption.
If money sufficient to pay the redemption price of and accrued interest on
all of the Notes (or portions thereof) to be redeemed on the redemption date is
deposited with the Trustee or paying agent on or before 11:00 a.m. (New York
City time) on the redemption date and certain other conditions are satisfied,
then on and after such redemption date, interest will cease to accrue on such
notes (or such portion thereof) called for redemption.
If less than all of the Notes are to be redeemed, the Trustee will select
the Notes to be redeemed on a pro rata basis, by lot or by such other method as
the Trustee in its sole discretion shall deem to be fair and appropriate.
Notes in denominations larger than $1,000 may be redeemed in part. On and
after the redemption date interest ceases to accrue on Notes or portions of them
called for redemption, provided that if the Company shall default in the payment
of such Note at the redemption price together with accrued interest, interest
shall continue to accrue at the rate borne by the Notes.
6. Subordination. The indebtedness evidenced by this Notes is, to the
-------------
extent provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full in cash of all Senior Indebtedness (as defined in the
Indenture), and this Note is issued subject to the provisions of the Indenture
with respect thereto. Each Holder of this Note, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on his, her or its behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided, and (c) appoints the
Trustee his, her or its attorney-in-fact for any and all such purposes.
7. Mandatory Repurchase Obligation. If there is a Change of Control of
-------------------------------
the Company, the Holder of this Note shall have the right to require the Company
to repurchase all or a portion of this Note at a purchase price equal to 101% of
the principal amount hereof plus accrued and unpaid interest to the date of
repurchase, as provided in, and subject to the terms of, the Indenture. In
addition, under certain circumstances, if the Company engages in certain asset
sales, the Company shall be required to offer to purchase a portion of the
aggregate principal amount of Notes outstanding together with accrued and unpaid
interest to the date of purchase, as provided in, and subject to the terms of,
the Indenture.
A-3
8. Denominations, Transfer, Exchange. If the Notes are issued in global
---------------------------------
form, and this Note contains a legend in the face hereof to such effect, the
provisions of this Section 7 shall be deemed superseded by such legend and
Section 3.02(c) of the First Supplemental Indenture, to the extent the
provisions of this Section 7 are inconsistent with such legend or Section
3.02(c).
The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. A Holder may transfer or exchange Notes
by presentation of such Notes to the Registrar or a co-Registrar with a request
to register the transfer or to exchange them for an equal principal amount of
Notes of other denominations. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not transfer or exchange any Note selected for redemption, except the
unredeemed part thereof if the Note is redeemed in part, or transfer or exchange
any Notes for a period of 15 days before a selection of Notes to be redeemed.
9. Persons Deemed Owners. The registered Holder of this Note shall be
---------------------
treated as the owner of it for all purposes.
10. Unclaimed Money. If money for the payment of principal or interest
---------------
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Company at its request. After that, Holders entitled to the money
must look to the Company for payment unless an abandoned property law designates
another person.
11. Amendment, Supplement, Waiver. Subject to certain exceptions, the
-----------------------------
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the outstanding Notes of
each Series affected by the amendment, and any past default or compliance with
any provision relating to any Series of the Notes may be waived in a particular
instance with the consent of the Holders of a majority in principal amount of
the outstanding Notes of such Series. Without the consent of any Securityholder,
the Company and the Trustee may amend or supplement the Indenture or the Notes
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to create a Series and
establish its terms or to make any other change, provided such action does not
adversely affect the rights of any Securityholder.
12. Defaults and Remedies. The following are Events of Default: (i)
---------------------
failure by the Company to pay interest on the Notes when due which default
continues for a period of 30 days or the principal of the Notes when due; (ii)
failure by the Company to perform any other covenant in the Notes or the
Indenture for 60 days after receipt by the Company of a notice of such Default;
(iii) default under any mortgage, indenture (including the Indenture) or
instrument under which is issued or which secures or evidences Indebtedness of
the Company or any Restricted Subsidiary (other than Non-Recourse Indebtedness)
which default constitutes a failure to pay principal of such Indebtedness in an
amount of $25,000,000 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 $25,000,000 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
A-4
after the date on which the right to appeal such judgment has expired or become
subject to an enforcement proceeding; or (v) certain events of bankruptcy or
insolvency.
In case an Event of Default (other than arising out of certain events
of bankruptcy or insolvency) occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes at the time
outstanding, by notice in writing to the Company (and to the Trustee if given by
the Holders), may declare to be due and payable immediately that portion of the
principal amount of the Notes at the time outstanding and accrued and unpaid
interest if any, to the date of acceleration and upon such declaration the same
shall become and be immediately due and payable. In case an Event of Default
arising out of certain events of bankruptcy or insolvency occurs and is
continuing, the outstanding principal of and accrued and unpaid interest if any,
on the Notes shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any of the Holders.
Such declaration or acceleration and its consequences may be rescinded
by Holders of a majority in aggregate principal amount of Notes at the time
outstanding if all existing Events of Default have been cured or waived (except
non-payment of principal that has become due solely because of the acceleration)
and if the rescission would not conflict with any judgment or decree.
An existing Default (other than a default in payment of principal of
or interest on the Notes or default with respect to a provision which cannot be
modified under the terms of the Indenture without the consent of each
Securityholder affected) may be waived by the Holders of a majority in aggregate
principal amount of Notes at the time outstanding upon the conditions provided
in the Indenture.
13. 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.
14. Trustee Dealings With Company. Bank One Trust Company, N.A., the
-----------------------------
Trustee under the Indenture, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
affiliates, and may otherwise deal with the Company or its affiliates, as if it
were not Trustee.
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 Securityholder by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the Notes.
16. Discharge of Indenture. The Indenture contains certain provisions
----------------------
pertaining to defeasance, which provisions shall for all purposes have the same
effect as if set forth herein.
17. Authentication. This Note shall not be valid until authenticated by
--------------
the Trustee.
18. Abbreviations. Customary abbreviations may be used in the name of a
-------------
Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants
A-5
by the entireties), JT TEN (= joint tenants with right of survivorship and not
as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
A-6
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Insert assignee's social security or tax ID number)
_____________________________
_____________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
(Print or type assignee's name, address, and zip code)
and irrevocably appoint_______________________________________,_
________________________________________________________________
agent to transfer this Note on the books of the Company. The
agent may substitute another to act for him.
Date:
_______________________
Your signature:
______________________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature
Guarantee:__________________________________
--------------------------------------------------------------------------------
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company check the Box: [_]
If you want to elect to have only a part of this Note
purchased by the Company state the amount:
$______________________
Date:_________________________________
____________________________________
(Sign exactly as your name appears
on the other side of this Note)
