-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LPbrIR2N7llHunDVOwfWMwR/IYGthF64h+8tSY+dSfxNfXYfi/cgBWJ09LJamjMy Rvysrw7LG6q2wmJBAXm1ew== 0001017062-02-000675.txt : 20020416 0001017062-02-000675.hdr.sgml : 20020416 ACCESSION NUMBER: 0001017062-02-000675 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20020410 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020415 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD PACIFIC CORP /DE/ CENTRAL INDEX KEY: 0000878560 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 330475989 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10959 FILM NUMBER: 02609929 BUSINESS ADDRESS: STREET 1: 1565 W MACARTHUR BLVD CITY: COSTA MESA STATE: CA ZIP: 92626 BUSINESS PHONE: 7146684300 MAIL ADDRESS: STREET 1: 1565 W MACARTHUR BLVD CITY: COSTA MESA STATE: CA ZIP: 92626 8-K 1 d8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) April 10, 2002 ----------------------------- Standard Pacific Corp. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 1-0959 33-0475989 - ----------------------------------------------------------------------------------------------------------- (State or other jurisdiction of (Commission file number) (IRS employer identification no.) incorporation) 15326 Alton Parkway, Irvine, California 92618 - ----------------------------------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (949) 789-1600 --------------------------- Not applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events. On January 11, 2001, Standard Pacific Corp. (the "Company") filed, pursuant to Rule 415 under the Securities Act of 1933, as amended, a registration statement on Form S-3 (File No. 333-52732), including a prospectus which, as amended, was declared effective on January 16, 2001. On April 12, 2002, the Company filed a prospectus supplement, dated April 10, 2002, relating to the offering of $150,000,000 principal amount of the Company's 9 1/4% Senior Subordinated Notes due 2012 (the "Notes"). In connection with the offering and issuance of the Notes, the Company is hereby filing certain exhibits, see "Item 7. Exhibits." Item 7. Exhibits. (c) Exhibits: The following exhibits are filed with this report on Form 8-K:
Exhibit No. Description ----------- ----------- 1.1 Underwriting Agreement, dated April 10, 2002, by and among the Company and the underwriters listed on the first page thereof with respect to the issuance and sale of the Notes. 4.1 Senior Subordinated Debt Securities Indenture dated as of April 10, 2002 by and between the Company and Bank One Trust Company, N.A., as trustee. 4.2 First Supplemental Indenture, dated as of April 10, 2002, by and between the Company and Bank One Trust Company, N.A., a trustee, with Form of Note attached. 5.1 Opinion Letter of Gibson, Dunn & Crutcher LLP regarding the validity of the Notes. 12.1 Statement re Computation of Ratio of Earnings to Fixed Charges. 23.1 Consent of Gibson Dunn & Crutcher LLP (included as part of Exhibit 5.1). 25.1 Statement of Eligibility of Trustee on Form T-1.
2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: April 12, 2002 STANDARD PACIFIC CORP. By: /s/ Clay A. Halvorsen --------------------- Clay A. Halvorsen Senior Vice President, General Counsel and Secretary EXHIBIT INDEX - -------------
Exhibit No. Description - ----------- ----------- 1.1 Underwriting Agreement, dated April 10, 2002, by and among the Company and the underwriters listed on the first page thereof with respect to the issuance and sale of the Notes. 4.1 Senior Subordinated Debt Securities Indenture dated as of April 10, 2002 by and between the Company and Bank One Trust Company, N.A., as trustee. 4.2 First Supplemental Indenture, dated as of April 10, 2002, by and between the Company and Bank One Trust Company, N.A., a trustee, with Form of Note attached. 5.1 Opinion Letter of Gibson, Dunn & Crutcher LLP regarding the validity of the Notes. 12.1 Statement re Computation of Ratio of Earnings to Fixed Charges. 23.1 Consent of Gibson Dunn & Crutcher LLP (included as part of Exhibit 5.1). 25.1 Statement of Eligibility of Trustee on Form T-1.
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EX-1.1 3 dex11.txt UNDERWRITING AGREEMENT Exhibit 1.1 $150,000,000 STANDARD PACIFIC CORP. 9 1/4% Senior Subordinated Notes due 2012 UNDERWRITING AGREEMENT ---------------------- April 10, 2002 CREDIT SUISSE FIRST BOSTON CORPORATION BANC OF AMERICA SECURITIES LLC SALOMON SMITH BARNEY INC. BANC ONE CAPITAL MARKETS, INC. c/o Credit Suisse First Boston Corporation 11 Madison Avenue New York, New York 10010 Dear Sirs: Standard Pacific Corp., a Delaware corporation (the "Company"), proposes to issue and sell $150,000,000 principal amount of its 9 1/4% Senior Subordinated Notes due 2012 (the "Securities") to the several underwriters named in Schedule I hereto (the "Underwriters"). The Securities are to be issued pursuant to the provisions of an Indenture dated as of April 10, 2002, as supplemented by the First Supplemental Indenture dated as of April 10, 2002 (the "Indenture"), between the Company and Bank One Trust Company, N.A., as Trustee (the "Trustee"). Section 1. Registration Statement and Prospectus. The Company has prepared and filed with the Securities and Exchange Commission (the "Commission") in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Act"), a registration statement on Form S-3, including a prospectus, relating to the Securities. The registration statement, as amended at the time it became effective, including the information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Act, is hereinafter referred to as the "Registration Statement"; and the prospectus and prospectus supplement in the form first used to confirm sales of the Securities is hereinafter referred to as the "Prospectus" (including, in the case of all references to the Registration Statement or the Prospectus, documents incorporated therein by reference). The terms "supplement" and "amendment" or "amend" as used in this Agreement with respect to the Registration Statement or the Prospectus shall include all documents subsequently filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Exchange Act") that are deemed to be incorporated by reference in the Prospectus. 1 Section 2. Agreements to Sell and Purchase. On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, the Company agrees to issue and sell, and the Underwriters agree, severally and not jointly, to purchase from the Company, an aggregate principal amount of $150,000,000 of the Securities at a purchase price equal to 97.975% of the principal amount thereof (the "Purchase Price"). Section 3. Terms of Public Offering. The Underwriters have advised the Company that the Underwriters propose (i) to make a public offering of the Securities as soon after the execution and delivery of this Agreement as in the Underwriters' judgment is advisable and (ii) initially to offer the Securities upon the terms set forth in the Prospectus. Section 4. Delivery and Payment. The Securities shall be represented by a definitive global security registered in the name of the nominee of The Depository Trust Company ("DTC"). The Company shall deliver the Securities, with any transfer taxes thereon duly paid by the Company, to Credit Suisse First Boston Corporation through the facilities of DTC, for the account of the Underwriters, against payment to the Company of the Purchase Price therefore by wire transfer of Federal or other funds immediately available in New York City. The certificate representing the Securities shall be made available for inspection not later than 9:30 A.M., New York City time, on the business day prior to the Closing Date (as defined below), at the office of DTC or its designated custodian (the "Designated Office"). The time and date of delivery and payment for the Securities shall be 9:00 A.M., New York City time, on April 15, 2002 or such other time on the same or such other date as the Underwriters and the Company shall agree in writing. The time and date of such delivery and payment are hereinafter referred to as the "Closing Date". The documents to be delivered on the Closing Date on behalf of the parties hereto pursuant to Section 8 of this Agreement shall be delivered at the offices of O'Melveny & Myers LLP, 114 Pacifica, Suite 100, Irvine, California and the Securities shall be delivered at the Designated Office, all on the Closing Date. Section 5. Agreements of the Company. The Company agrees with you: (a) To advise you promptly and, if requested by you, to confirm such advice in writing, (i) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information, (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of the suspension of qualification of the Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for such purposes, (iii) when any amendment to the Registration Statement becomes effective, and (iv) of the happening of any event during the period referred to in Section 5(d) below which makes any statement of a material fact made in the Registration Statement or the Prospectus untrue or which requires any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, the Company will use its best efforts to obtain the withdrawal or lifting of such order at the earliest possible time. 2 (b) To furnish you five conformed copies of the Registration Statement as first filed with the Commission and of each amendment to it, including all exhibits and documents incorporated therein by reference, and to furnish to you such number of conformed copies of the Registration Statement as so filed and of each amendment to it, without exhibits but including documents incorporated therein by reference, as you may reasonably request. (c) To prepare the Prospectus, the form and substance of which shall be satisfactory to you, and to file the Prospectus in such form with the Commission within the applicable period specified in Rule 424(b) under the Act; from the date hereof and so long as, in the opinion of counsel for the Underwriters, a prospectus is required by the Act to be delivered in connection with sales by the Underwriters or a dealer, not to file any further amendment to the Registration Statement and not to make any amendment or supplement to the Prospectus of which you shall not previously have been advised or to which you shall reasonably object after being so advised; and, during such period, to prepare and file with the Commission, promptly upon your reasonable request, any amendment to the Registration Statement or amendment or supplement to the Prospectus which may be necessary or advisable in connection with the distribution of the Securities by you, and to use its best efforts to cause any such amendment to the Registration Statement to become promptly effective. (d) Prior to 10:00 A.M., New York City time, on the second business day after the date of this Agreement and from time to time thereafter for such period as in the opinion of counsel for the Underwriters a prospectus is required by the Act to be delivered in connection with sales by the Underwriters or a dealer, to furnish in New York City to the Underwriters and any dealer as many copies of the Prospectus (and of any amendment or supplement to the Prospectus and any documents incorporated therein by reference) as the Underwriters or dealer may reasonably request. (e) If during the period specified in the second clause of Section 5(c), any event shall occur or condition shall exist as a result of which, in the opinion of counsel for the Underwriters, it becomes necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare and file with the Commission an appropriate amendment or supplement to the Prospectus so that the statements in the Prospectus, as so amended or supplemented, will not in the light of the circumstances when it is so delivered, be misleading, or so that the Prospectus will comply with applicable law, and to furnish to the Underwriters and to any dealer as many copies thereof as the Underwriters or dealer may reasonably request. (f) Prior to any public offering of the Securities, to cooperate with you and counsel for the Underwriters in connection with the registration or qualification of the Securities for offer and sale by the Underwriters and by dealers under the state securities or Blue Sky laws of such jurisdictions as you may request, to continue such registration or qualification in effect so long as required for distribution of the Securities and to file such consents to service of process or other documents as may be necessary in order to effect such registration or qualification; provided, however, that the Company shall not be required in connection therewith to qualify as a foreign corporation in any jurisdiction in which it is not now so qualified or to take any action that would 3 subject it to general consent to service of process or taxation other than as to matters and transactions relating to the Prospectus, the Registration Statement, any preliminary prospectus or the offering or sale of the Securities, in any jurisdiction in which it is not now so subject. (g) To make generally available to its security holders as soon as practicable an earnings statement covering the twelve-month period ending June 30, 2002 that shall satisfy the provisions of Section 11(a) of the Act. (h) So long as the Securities are outstanding, to furnish to you as soon as available copies of all reports or other communications furnished to its security holders or furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed and such other publicly available information concerning the Company and its subsidiaries as you may reasonably request. (i) Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company's counsel and the Company's accountants in connection with the registration and delivery of the Securities under the Act and all other fees and expenses in connection with the preparation, printing, filing and distribution of the Registration Statement (including financial statements and exhibits), any preliminary prospectus, the Prospectus and all amendments and supplements to any of the foregoing, including the mailing and delivering of copies thereof to the Underwriters and dealers in the quantities specified herein, (ii) all costs and expenses related to the transfer and delivery of the Securities to the Underwriters, including any transfer or other taxes payable thereon, (iii) all expenses in connection with the registration or qualification of the Securities for offer and sale under the securities or Blue Sky laws of the several states and all costs of producing any Preliminary and Supplemental Blue Sky Memoranda in connection therewith (including the filing fees and reasonable fees and disbursements of counsel for the Underwriters in connection with such registration or qualification and memoranda relating thereto), (v) the cost of printing certificates representing the Securities, (vi) the costs and charges of any transfer agent, registrar and/or depositary (including the Depository Trust Company), (vii) any fees charged by rating agencies for the rating of the Securities, (viii) the fees and expenses of the Trustee and the Trustee's counsel in connection with the Indenture and the Securities and (ix) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section. (j) During the period beginning on the date hereof and continuing to and including the Closing Date, not to offer, sell, contract to sell or otherwise transfer or dispose of any debt securities of the Company or any warrants, rights or options to purchase or otherwise acquire debt securities of the Company substantially similar to the Securities (other than (i) the Securities and (ii) commercial paper issued in the ordinary course of business), without the prior written consent of Credit Suisse First Boston Corporation. (k) Not to voluntarily claim, and to actively resist any attempts to claim, the benefit of any usury laws against the holders of the Securities. 4 (l) To use its reasonable best efforts to do and perform all things required or necessary to be done and performed under this Agreement by the Company prior to the Closing Date and to satisfy all conditions precedent to the delivery of the Securities. Section 6. Representations and Warranties of the Company. The Company represents and warrants to the Underwriters that: (a) The Registration Statement has become effective and no stop order suspending the effectiveness of the Registration Statement is in effect, and, to the best of the knowledge of the Company, no proceedings for such purpose are pending before or threatened by the Commission. (b) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in the Prospectus complied or will comply when so filed in all material respects with the Exchange Act; (ii) the Registration Statement, when it became effective, did not contain and, as amended, if applicable, does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) the Registration Statement and the Prospectus complied when filed and, as amended or supplemented, if applicable, does comply in all material respects with the Act, and (iv) the Prospectus, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in the Registration Statement or the Prospectus based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter expressly for use therein. (c) Each preliminary prospectus, if any, filed as part of the registration statement in connection with this offering as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Act, complied when so filed in all material respects with the Act, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in any preliminary prospectus based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter expressly for use therein. (d) The Company has the authorized equity capitalization as set forth in the Prospectus and, as of the Closing Date, the Company shall have an authorized equity capitalization as set forth in the Prospectus. The Company has, as of the date of this Agreement, and as of the Closing Date the Company will have, not less than 29,000,000 shares of common stock issued and outstanding. All of the outstanding capital stock of the Company has been duly authorized and validly issued and is fully paid and nonassessable and was not issued in violation of any preemptive or similar rights. 5 (e) The Company owns all of the outstanding capital stock and other securities evidencing equity ownership of its subsidiaries (other than interests held by third parties in Homebuilding Joint Ventures (as defined in the Indenture)) free and clear of any pledge, fiduciary transfer, security interest, claim, lien, limitation on voting rights or encumbrance, and all such securities have been duly authorized and validly issued, fully paid and nonassessable and have not been issued in violation of, or subject to, any preemptive or similar rights. There are no outstanding rights, warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest of any subsidiary (other than Homebuilding Joint Ventures). (f) The Company and each of its subsidiaries has been duly organized, is validly existing as a corporation or partnership in good standing under the laws of its respective jurisdiction of organized and has all requisite corporate or partnership power and authority to (a) carry on its business as it is currently being conducted and as described in the Prospectus and (b) own, lease, license and operate its respective properties in accordance with its business as currently conducted. The Company and each of its subsidiaries is duly qualified and in good standing as a foreign corporation or partnership authorized to do business in each jurisdiction in which the nature of its business or its ownership or leasing of property requires such qualification, except where the failure to be so qualified would not have a material adverse effect on the business, prospects, financial condition or results of operations of the Company and its subsidiaries, taken as a whole (a "Material Adverse Effect"). (g) The Company has all requisite corporate power and authority to execute, deliver and perform all of its obligations under, and to consummate the transactions contemplated by this Agreement, the Securities and the Indenture (collectively, the "Operative Documents") and, without limitation, the Company has all requisite corporate power and authority to issue, sell and deliver the Securities. (h) This Agreement has been duly and validly authorized, executed and delivered by the Company. (i) The Indenture has been duly and validly authorized by the Company, will be executed and delivered by the Company and, as of the Closing Date, will be a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except that enforceability of the Indenture may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity, regardless of whether considered in a proceeding in equity or at law. The Indenture will conform in all material respects to the description thereof in the Prospectus. The Indenture will be duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), prior to the Closing Date. (j) The Securities have been duly and validly authorized for issuance and sale to the Underwriters by the Company and, when issued, authenticated and delivered by the Company against payment by the Underwriters in accordance with the terms of this Agreement and the Indenture, the Securities will be legal, valid and binding obligations of the Company, entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms, except that enforceability of the Securities may be limited by bankruptcy, insolvency, 6 reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity, regardless of whether considered in a proceeding in equity or at law. The Securities, when issued, authenticated and delivered, will conform in all material respects to the description thereof in the Prospectus. (k) None of the Company or its subsidiaries is (A) in violation of its charter, bylaws or other organizational document or (B) in default (or, with notice or lapse of time or both, would be in default) in the performance or observance of any obligation, agreement, covenant or condition contained in any bond, debenture, note, indenture, mortgage, deed of trust, loan agreement, lease, license, franchise agreement, authorization, permit, certificate or other agreement or instrument to which any of them is a party or by which any of them is bound or to which any of their assets or properties is subject, or (C) in violation of any law, statute, rule, regulation, judgment, order or decree of any domestic or foreign court with jurisdiction over any of them or any of their assets or properties or other governmental or regulatory authority, agency or other body, that, in the case of clauses (B) and (C) above, would, either individually or in the aggregate, result in a Material Adverse Effect. There exists no condition that, with notice or lapse of time or both, would constitute a default by the Company or any of its subsidiaries under any such document or instrument or result in the imposition of any penalty or the acceleration of any indebtedness, other than penalties, defaults or conditions that would not, either individually or in the aggregate, result in a Material Adverse Effect. (l) The execution, delivery or performance by the Company of this Agreement and each of the other Operative Documents does not violate, conflict with or constitute a breach of any of the terms or provisions of, or a default under (or an event that with notice or the lapse of time, or both, would constitute a default), or require consent (except such consents as have been or will be obtained prior to the Closing) under, or result in the creation or imposition of a lien, charge or encumbrance on any property or assets of the Company or any of its subsidiaries pursuant to, (i) the charter, bylaws or other organizational documents of the Company or any of its subsidiaries, (ii) any bond, debenture, note, indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (iii) any law, statute, rule or regulation applicable to the Company or any of its subsidiaries or their assets or properties or (iv) any judgment, order or decree of any domestic or foreign court or governmental agency or authority having jurisdiction over the Company or any of its subsidiaries or their assets or properties. No consent, approval, authorization or order of, or filing, registration, qualification, license or permit of or with, any court or governmental agency, body or administrative agency, domestic or foreign, is required to be obtained or made by the Company for the execution, delivery and performance of this Agreement or any of the other Operative Documents or any of the transactions contemplated thereby, except (A) such as have been or will be obtained or made prior to Closing, (B) such as may be required by the NASD or (C) such as may be required by the securities or blue sky laws of the various states. No consents or waivers from any other person or entity are required for the execution, delivery and performance of this Agreement or any of the other Operative Documents or any of the transactions contemplated hereby or thereby, except such as have been or will be obtained or made prior to closing. 7 (m) There is (i) except as set forth in the Prospectus, no action, suit or proceeding before or by any court, arbitrator or governmental agency, body or official, domestic or foreign, now pending or, to the knowledge of the Company or its subsidiaries, threatened or contemplated, to which the Company or any of its subsidiaries is or may be a party or to which the business, assets or property of such person is or may be subject, (ii) except as set forth in the Prospectus, no statute, rule, regulation or order that has been enacted, adopted or issued or, to the knowledge of the Company or its subsidiaries, that has been proposed by any governmental body or agency, domestic or foreign, (iii) no injunction, restraining order or order of any nature by a federal or state court or foreign court of competent jurisdiction to which the Company or any of its subsidiaries is or may be subject that (x) in the case of clause (i) above, is reasonably likely to, either individually or in the aggregate, (1) result in a Material Adverse Effect, or (2) interfere with or adversely affect the issuance of the Securities in any jurisdiction or adversely affect the consummation of the transactions contemplated by any of the Operative Documents, and (y) in the case of clauses (ii) and (iii) above, would, either individually or in the aggregate, (1) result in a Material Adverse Effect, or (2) interfere with or adversely affect the issuance of the Securities in any jurisdiction or adversely affect the consummation of the transactions contemplated by any of the Operative Documents. Every request of any securities authority or agency of any jurisdiction for additional information with respect to Securities that has been received by the Company or its counsel prior to the date hereof has been, or will prior to the Closing Date be, complied with. (n) No labor disturbance by the employees of the Company or any of its subsidiaries exists or, to the actual knowledge of the Company is imminent that might reasonably be expected to result in a Material Adverse Effect; the Company and its subsidiaries are in compliance in all respects with, as applicable and except where a failure to so comply would not have a Material Adverse Effect, all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA"); no unwaivable "reportable event" (as defined in ERISA) has occurred with respect to any "employee pension benefit plan" (as defined in ERISA) for which the Company or its subsidiaries would have any liability; none of the Company or its subsidiaries has incurred or expects to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any "employee pension benefit plan" or (ii) Sections 412, 4971 or 4975 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the "Code"); and each "employee pension benefit plan" that is maintained or contributed to by the Company or its subsidiaries that is intended to be qualified under Section 401(a) of the Code has received a determination letter from the Internal Revenue Service to that effect and nothing has occurred, whether by action or by failure to act, that would result in the revocation of such determination letter. (o) Except as set forth in the Prospectus, the Company and each of its subsidiaries (i) is in compliance with, and not subject to costs or liabilities under, any and all local, state, provincial, federal and foreign laws, regulations, rules of common law, orders and decrees, as in effect as of the date hereof, and any presently effective judgments, decrees, orders and injunctions issued or promulgated thereunder, in each case, relating to pollution or protection of public and employee health and safety and the environment applicable to it or its business or operations or ownership or use of its property ("Environmental Laws"), other than such noncompliance or costs or liabilities that would not, either individually or in the aggregate, result 8 in a Material Adverse Effect, and (ii) possesses all permits, licenses or other approvals required under applicable Environmental Laws and has no reason to believe all such permits, licenses and other approvals to expire within the next five years will not be renewed or otherwise extended or reissued in due course, in each case, other than such permits, licenses or approvals the lack of which would not, either individually or in the aggregate, result in a Material Adverse Effect. All currently pending and, to their knowledge, threatened proceedings, notices of violation, demands, notices of potential responsibility or liability, suits and existing environmental conditions with respect to which the Company or its subsidiaries could reasonably be expected to have any liability are fully and accurately described in all material respects in the Prospectus except as would not, either individually or in the aggregate, result in a Material Adverse Effect. (p) The Company and each of its subsidiaries has (i) good and marketable title to all of the properties and assets described in the Prospectus as owned by it and good and marketable title to the leasehold estates in the real and personal property described in the Prospectus as leased by it, free and clear of all Liens (as defined in the Indenture), except for Liens described in the Prospectus, Liens permitted under the Indenture and such Liens as would not, either individually or in the aggregate, result in a Material Adverse Effect, (ii) all licenses, certificates, permits, authorizations, approvals, franchises and other rights from, and has made all declarations and filings with, all federal, state, local and foreign authorities, all self-regulatory authorities and all courts and other tribunals (each, an "Authorization") to (a) carry on its business as it is currently being conducted and as described in the Prospectus and (b) own, lease, license and operate its respective properties in accordance with its business as currently conducted, except for such Authorization the failure to maintain would not, either individually or in the aggregate, result in a Material Adverse Effect and (iii) no reason to believe that any governmental body or agency, domestic or foreign, is considering limiting, suspending or revoking any such Authorization. Except where the failure to be in full force and effect and in compliance would not, either individually or in the aggregate, result in a Material Adverse Effect, all such Authorizations are valid and in full force and effect and the Company and each of its subsidiaries is in compliance with the terms and conditions of all such Authorizations and with the rules and regulations of the regulatory authorities having jurisdiction with respect to such Authorizations. All leases to which the Company or any of its subsidiaries is a party are valid and binding, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity and the discretion of the court before which any proceedings therefor may be brought and no default by the Company or any of its subsidiaries or, to the knowledge of the Company, any other party thereto has occurred and is continuing thereunder, other than defaults that would not, either individually or in the aggregate, result in a Material Adverse Effect. (q) The Company and each of its subsidiaries owns, possesses or has the right to employ all patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names (collectively, the "Intellectual Property") material to the conduct of the businesses operated by it as described in the Prospectus. The Company has not received any notice of infringement of or conflict with (and neither knows of any such infringement or a conflict with) asserted rights of others with respect to any of the foregoing that, if such assertion of infringement or conflict were sustained, would 9 result in a Material Adverse Effect. The use of the Intellectual Property in connection with the business and operations of the Company and its subsidiaries does not infringe on the rights of any person, except for any infringements that would not result in a Material Adverse Effect. (r) All tax returns required to be filed by the Company and each of its subsidiaries have been filed (or extensions have been obtained) in all jurisdictions where such returns are required to be filed, other than such returns the failure of which to file would not have a Material Adverse Effect; and all taxes, including withholding taxes, penalties and interest, assessments, fees and other charges due or claimed to be due from such entities or that are due and payable have been paid, other than those being contested in good faith and for which reserves have been provided in accordance with generally accepted accounting principles, those currently payable without penalty or interest and those the failure of which to pay would not have a Material Adverse Effect. To the knowledge of the Company there are no material proposed additional tax assessments against the Company or any of its subsidiaries or their assets or property. (s) None of the Company or its subsidiaries is an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"), or analogous foreign laws and regulations. (t) The Company and each of its subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that: (A) transactions are executed in accordance with management's general or specific authorizations; (B) transactions are recorded as necessary to permit preparation of its financial statements in conformity with United States generally accepted accounting principles and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management's general or specific authorization; and (D) the recorded accountability for its assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (u) The Company and each of its subsidiaries maintains insurance covering its properties, assets, operations, personnel and businesses, and such insurance is of such type and in such amounts in accordance with customary industry practice to protect the Company and its subsidiaries and their businesses. The Company has not received notice from any insurer or agent of such insurer that any material capital improvements or other material expenditures will have to be made in order to continue any insurance maintained by any of them other than capital improvements and other expenditures that have been budgeted by the Company or its subsidiaries, as the case may be. (v) The accountants who have certified the audited financial statements included as part of or incorporated by reference in the Prospectus are independent accountants within the meaning of the Act. The historical financial statements of the Company comply as to form in all material respects with the requirements applicable to registration statements on Form S-3 under the Act and present fairly in all material respects the consolidated financial position and results of operations of the Company at the respective dates and for the respective periods indicated. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods presented (except as disclosed in the Prospectus) and comply as to form with the rules and regulations promulgated under the Act. 10 All other financial and statistical information and data included or incorporated by reference in the Prospectus are accurately presented in all material respects and prepared on a basis consistent with the financial statements and the books and records of the Company and its subsidiaries. (w) The statistical and market-related data included in the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate. (x) No forward-looking statement (within the meaning of Section 27A of the Act and Section 21E of the Exchange Act) contained in the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith. (y) There are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to the sale of any debt securities of the Company or to include for sale any debt securities of the Company with the sale of the Securities under the Registration Statement. (z) No "nationally recognized statistical rating organization" as such term is defined for purposes of Rule 436(g)(2) under the Act has indicated to the Company that it is considering (i) the downgrading, suspension or withdrawal of, or any review for a possible change that does not indicate the direction of the possible change in, any rating assigned to the Company or any securities of the Company or (ii) any change in the outlook for any rating of the Company or any securities of the Company. (aa) Since the respective dates as of which information is given in the Prospectus other than as set forth in the Prospectus (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement), (i) there has not occurred any material adverse change or any development involving a prospective material adverse change in the condition, financial or otherwise, or the earnings, business, management or operations of the Company and its subsidiaries, taken as a whole, (ii) there has not been any material adverse change or any development involving a prospective material adverse change in the capital stock or in the long-term debt of the Company or any of its subsidiaries and (iii) other than in the ordinary course of business, neither the Company nor any of its subsidiaries has incurred any material liability or obligation, direct or contingent. (bb) Each certificate signed by any officer of the Company and delivered to the Underwriters or counsel for the Underwriters pursuant to, or in connection with, this Agreement shall be deemed to be a representation and warranty by the Company to the Underwriters as to the matters covered by such certificate. 11 Section 7. Indemnification. (a) The Company agrees to indemnify and hold harmless each Underwriter, its directors, its officers and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages, liabilities and judgments (including, without limitation, any legal or other expenses incurred in connection with investigating or defending any matter, including any action, that could give rise to any such losses, claims, damages, liabilities or judgments) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), the Prospectus (or any amendment or supplement thereto) or any preliminary prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or judgments are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Underwriter furnished in writing to the Company by such Underwriter expressly for use therein; provided, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Underwriter or any director or officer of, or person controlling, such Underwriter who failed to deliver a Prospectus, as then amended or supplemented, (so long as the Prospectus and any amendment or supplement thereto was provided by the Company to several Underwriters in the requisite quantity and on a timely basis to permit proper delivery on or prior to the Closing Date) to the person asserting any losses, claims, damages, liabilities or judgements caused by any untrue statement or alleged untrue statement of a material fact contained in the preliminary prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such material misstatement or omission or alleged material misstatement or omission was cured in the Prospectus, as so amended or supplemented, and such Prospectus was required by law to be delivered at or prior to the written confirmation of sale to such person. (b) Each Underwriter agrees to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity from the Company to such Underwriter but only with reference to information relating to such Underwriter furnished in writing to the Company by such Underwriter expressly for use in the Registration Statement (or any amendment thereto), the Prospectus (or any amendment or supplement thereto) or any preliminary prospectus. (c) In case any action shall be commenced involving any person in respect of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the "indemnified party"), the indemnified party shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party shall assume the defense of such action, including the employment of counsel reasonably satisfactory to the indemnified party and the payment of all fees and expenses of such counsel, as incurred (except that in the case of any action in respect of which indemnity may be sought pursuant to both Sections 7(a) and 7(b), the Underwriter shall not be required to assume the defense of such action pursuant to this Section 7(c), but may employ separate counsel and participate in the defense thereof, but the fees and expenses of such counsel, except as provided below, shall be at the expense of such 12 Underwriter). Any indemnified party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the indemnified party unless (i) the employment of such counsel shall have been specifically authorized in writing by the indemnifying party, (ii) the indemnifying party shall have failed to assume the defense of such action or employ counsel reasonably satisfactory to the indemnified party or (iii) the named parties to any such action (including any impleaded parties) include both the indemnified party and the indemnifying party, and the indemnified party shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party (in which case the indemnifying party shall not have the right to assume the defense of such action on behalf of the indemnified party). In any such case, the indemnifying party shall not, in connection with any one action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all indemnified parties and all such fees and expenses shall be reimbursed as they are incurred. Such separate firm shall be designated in writing by Credit Suisse First Boston Corporation, in the case of parties indemnified pursuant to Section 7(a), and by the Company, in the case of parties indemnified pursuant to Section 7(b). The indemnifying party shall indemnify and hold harmless the indemnified party from and against any and all losses, claims, damages, liabilities and judgments by reason of any settlement of any action (i) effected with its written consent or (ii) effected without its written consent if the settlement is entered into more than 60 days after the indemnifying party shall have received a request from the indemnified party for reimbursement for the fees and expenses of counsel (in any case where such fees and expenses are at the expense of the indemnifying party), and, prior to the date of such settlement, the indemnifying party shall have failed to comply with such reimbursement request and such indemnified party shall have, on or after such 60th day, given the indemnifying party at least 30 additional days' notice that the indemnified party is entitled to settle such action. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement or compromise of, or consent to the entry of judgment with respect to, any pending or threatened action in respect of which the indemnified party is or could have been a party and indemnity or contribution may be or could have been sought hereunder by the indemnified party, unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability on claims that are or could have been the subject matter of such action and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of the indemnified party. (d) To the extent the indemnification provided for in this Section 7 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages, liabilities or judgments referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities and judgments (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities or (ii) if the allocation provided by clause 7(d)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 7(d)(i) above but also the relative fault of the Company on the one hand and the Underwriters on the other hand in connection with the statements or omissions which resulted in such losses, claims, damages, 13 liabilities or judgments, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand shall be deemed to be in the same proportion as the total net proceeds from the offering (after deducting underwriting discounts and commissions but before deducting expenses) received by the Company, and the total underwriting discounts and commissions received by the Underwriters, bear to the total price to the public of the Securities, in each case as set forth in the table on the cover page of the Prospectus. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or judgments referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such indemnified party in connection with investigating or defending any matter, including any action, that could have given rise to such losses, claims, damages, liabilities or judgments. Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 7(d) are several in proportion to the respective principal amount of the Securities purchased by each of the Underwriters hereunder and not joint. (e) The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. Section 8. Conditions of Underwriters' Obligations. The obligations of the Underwriters to purchase the Securities under this Agreement are subject to the satisfaction of each of the following conditions: (a) All the representations and warranties of the Company contained in this Agreement shall be true and correct on the Closing Date with the same force and effect as if made on and as of the Closing Date. (b) No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been commenced or shall be pending before or contemplated by the Commission. 14 (c) On or after the date hereof, (i) there shall not have occurred any downgrading, suspension or withdrawal of, nor shall any notice have been given of any potential or intended downgrading, suspension or withdrawal of, or of any review (or of any potential or intended review) for a possible change that does not indicate the direction of the possible change in, any rating of the Company or any securities of the Company (including, without limitation, the placing of any of the foregoing ratings on credit watch with negative or developing implications or under review with an uncertain direction) by any "nationally recognized statistical rating organization" as such term is defined for purposes of Rule 436(g)(2) under the Act, (ii) there shall not have occurred any change with negative or uncertain implications, nor shall any notice have been given of any potential or intended change with negative or uncertain implications, in the outlook for any rating of the Company or any securities of the Company by any such rating organization and (iii) no such rating organization shall have given notice to the Company that it has assigned (or is considering assigning) a lower rating to the Securities than that existing on the date of this Agreement. (d) You shall have received on the Closing Date a certificate dated the Closing Date, signed by Andrew H. Parnes and Clay A. Halvorsen, in their capacities as the Senior Vice President - Finance and Chief Financial Officer and Senior Vice President, General Counsel and Secretary of the Company, confirming the matters set forth in Sections 6(aa), 8(a), 8(b) and 8(c) and that the Company has complied with all of the agreements and satisfied all of the conditions herein contained and required to be complied with or satisfied by the Company on or prior to the Closing Date. (e) Since the respective dates as of which information is given in the Prospectus other than as set forth in the Prospectus (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement), (i) there shall not have occurred any change or any development involving a prospective change in the condition, financial or otherwise, or the earnings, business, management or operations of the Company and its subsidiaries, taken as a whole, (ii) there shall not have been any change or any development involving a prospective change in the capital stock or in the long-term debt of the Company or any of its subsidiaries and (iii) other than in the ordinary course of business, neither the Company nor any of its subsidiaries shall have incurred any liability or obligation, direct or contingent, the effect of which, in any such case described in clause 8(e)(i), 8(e)(ii) or 8(e)(iii), in your judgment, is material and adverse and, in your judgment, makes it impracticable to market the Securities on the terms and in the manner contemplated in the Prospectus. 15 (f) You shall have received on the Closing Date an opinion (satisfactory to you and counsel for the Underwriters), dated the Closing Date, of Gibson, Dunn & Crutcher LLP, counsel for the Company, to the effect that: (i) the Company and each of Standard Pacific of Texas, L.P., Standard Pacific of Orange County, Inc., Standard Pacific of Fullerton, Inc., Family Lending Services, Inc., Standard Pacific of Arizona, Inc., HSP Arizona, Inc. and The Writer Corporation (together, the "Material Subsidiaries") have been duly organized and are validly existing as corporations or partnerships, as applicable; (ii) the Indenture and the Securities conform in all material respects to the descriptions thereof in the Prospectus; (iii) the execution and delivery of this Agreement have been duly authorized by all necessary corporate action of the Company and this Agreement has been duly executed and delivered by the Company; (iv) the Indenture has been duly and validly authorized, executed and delivered by the Company, and constitutes the valid and binding agreement of the Company, enforceable in accordance with its terms, subject (A) to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium, arrangement and similar laws of general application relating to or affecting creditors' rights, including, without limitation, the effect of statutory or other law regarding fraudulent conveyances, fraudulent transfers and preferential transfers, and (B) to the limitations imposed by general principles of equity (regardless of whether considered in a proceeding at law or in equity); (v) the Securities are in the form contemplated by the Indenture, have been duly and validly authorized by all necessary corporate action and, when executed and authenticated as specified in the Indenture and delivered against payment pursuant to this Agreement, will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company enforceable in accordance with their terms, subject (A) to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium, arrangement and similar laws of general application relating to or affecting creditors' rights, including, without limitation, the effect of statutory or other law regarding fraudulent conveyances, fraudulent transfers and preferential transfers, and (B) to the limitations imposed by general principles of equity (regardless of whether considered in a proceeding at law or in equity); and the purchase and sale of the Securities in accordance with the terms and provisions of this Agreement and the consummation of the transactions contemplated under this Agreement, the Indenture and the Securities will not violate the provisions of Section 1 of Article XV of the Constitution of the State of California; (vi) the issuance, offering and sale of the Securities to the Underwriters by the Company pursuant to this Agreement, the compliance by the Company with the other provisions of this Agreement and the other Operative Documents and the consummation of the transactions herein and therein contemplated do not (A) require the consent, approval, authorization, registration or qualification of or with any governmental authority, except such as have been obtained and such as may be required under state 16 securities or blue sky laws, or (B) violate any statute, rule or regulation known to such counsel and applicable to the Company or any of the Material Subsidiaries; (vii) the Registration Statement has become effective under the Act, and to such counsel's knowledge no stop order suspending its effectiveness has been issued and no proceedings for that purpose are pending before or contemplated by the Commission; (viii) the statements under the caption "Description of Notes" in the prospectus supplement constituting part of the Prospectus and the caption "Description of Debt Securities," in the base prospectus constituting part of the Prospectus, insofar as such statements constitute a summary of the legal matters, documents or proceedings referred to therein, fairly present the information called for with respect to such legal matters, documents and proceedings; (ix) the Company is not or, after giving effect to the offering and sale of the Securities and the application of the net proceeds thereof as described in the Prospectus, will not be, an "investment company" as such term is defined in the Investment Company Act of 1940, as amended; (x) the Indenture complies as to form in all material respects with the requirements of the Trust Indenture Act, and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder; (xi) the Company and each of the Material Subsidiaries are in good standing under the laws of their respective jurisdictions of organization, and are duly qualified to transact business as foreign corporations or partnerships and are in good standing under the laws of each jurisdiction identified in a certificate of the Company, executed by the Chief Executive Office and the Senior Vice President-Finance of the Company, as being jurisdictions in which any of such entities owns or leases property, maintains or has an office or is engaged in the business of developing real property, building and selling homes, except where the failure to be so qualified would not result in material liability or disability to the Company and its subsidiaries, taken as a whole; (xii) the issued shares of the capital stock of each of the Material Subsidiaries are owned of record by the Company or a wholly owned subsidiary of the Company, and, to the knowledge of such counsel, free and clear of any other security interests, liens, encumbrances or claims; (xiii) the Company and each of the Material Subsidiaries have the corporate or partnership power to own or lease their respective properties and conduct their respective businesses as described in the Prospectus, and the Company has the corporate power to enter into this Agreement and to carry out all the terms and provisions thereof to be carried out by it; (xiv) the Company's authorized equity capitalization is as set forth in the Prospectus, and the issued shares of capital stock of each of the Material Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable, and are owned of record by the Company or a wholly owned subsidiary of the Company; 17 (xv) to the knowledge of such counsel, no holders of outstanding shares of capital stock of the Company are entitled as such to any preemptive or other rights to subscribe for any of the Securities; (xvi) to the knowledge of such counsel without investigation of court records, no legal or governmental proceedings are pending to which the Company or any of its Material Subsidiaries is a party or to which the property of the Company or any of its Material Subsidiaries is subject that are required to be described in the Prospectus and are not described therein and no such proceedings have been threatened against the Company or any of its Material Subsidiaries or with respect to any of their respective properties, and; (xvii) the issuance, offering and sale of the Securities to the Underwriters by the Company pursuant to this Agreement, the compliance by the Company with the other provisions of this Agreement and the other Operative Documents and the consummation of the other transactions herein and therein contemplated do not (A) conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under, any indenture, mortgage, deed of trust, lease or other agreement or instrument to which the Company or any of its Material Subsidiaries is a party or by which the Company or any of its Material Subsidiaries or any of their respective properties are bound, which is identified in the Officers' Certificate as being material to the business of the Company (the "Material Agreements"), or any judgment, decree or order of any court or other governmental authority or any arbitrator applicable to the Company or any of the Material Subsidiaries which is identified in the Officers' Certificate as being material to the business of the Company, or (B) conflict with or result in a breach or violation of the charter documents or by-laws of the Company or any of its Material Subsidiaries; (xviii) to such counsel's knowledge, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to any securities of the Company or to require the Company to include such securities for sale with the sale of the Securities hereunder; and (xix) (A) each document, if any, filed pursuant to the Exchange Act and incorporated by reference in the Prospectus (except for financial statements and other financial data included therein as to which no opinion need be expressed) complied when so filed as to form with the Exchange Act in all material respects, (B) the Registration Statement and the Prospectus and any supplement or amendment thereto (except for the financial statements and other financial data included therein as to which no opinion need be expressed) comply as to form with the Act in all material respects, (C) nothing has come to the attention of such counsel which causes them to believe that at March 21, 2002 the Registration Statement and the base prospectus included therein (except for the financial statements and other financial data as to which such counsel need not express any belief and except for that part of the Registration Statement that constitutes the Statement of Eligibility (Form T-1) under the Trust Indenture Act) contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein 18 or necessary to make the statements therein not misleading and (D) nothing has come to the attention of such counsel which causes them to believe that the Prospectus, as amended or supplemented, if applicable (except for the financial statements and other financial data, as aforesaid), as of its date or the date of such opinion, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The opinion of Gibson, Dunn & Crutcher LLP described in Section 8(f) above shall be rendered to you at the request of the Company and shall so state therein. (g) You shall have received on the Closing Date an opinion, dated the Closing Date, of O'Melveny & Myers LLP, counsel for the Underwriters, as to such matters as are customarily covered in such opinions. (h) You shall have received, on each of the date hereof and the Closing Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to you, from Arthur Andersen LLP, independent public accountants, containing the information and statements of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into the Registration Statement and the Prospectus. (i) [Intentionally omitted.] (j) The Securities shall have been rated "B+" by Standard & Poor's Corporation and "Ba3" by Moody's Investors Service, Inc. (k) The Underwriters shall have received a counterpart, conformed as executed, of the Indenture which shall have been entered into by the Company and the Trustee. (l) The Company shall not have failed on or prior to the Closing Date to perform or comply with any of the agreements herein contained and required to be performed or complied with by the Company on or prior to the Closing Date. Section 9. Effectiveness of Agreement and Termination. This Agreement shall become effective upon the execution and delivery of this Agreement by the parties hereto. This Agreement may be terminated at any time on or prior to the Closing Date by you by written notice to the Company if any of the following has occurred: (i) any change, or any development or event involving a prospective change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as one enterprise which, in the judgment of Credit Suisse First Boston Corporation, is material and adverse and makes it impractical or inadvisable to proceed with completion of the offering or the sale of and payment for the Securities; (ii) any downgrading in the rating of any debt securities of the Company by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a 19 possible downgrading, of such rating) or any announcement that the Company has been placed on negative outlook; (iii) any change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the judgment of Credit Suisse First Boston Corporation, be likely to prejudice materially the success of the proposed issue, sale or distribution of the Securities, whether in the primary market or in respect of dealings in the secondary market, (iv) any material suspension or material limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (v) any banking moratorium declared by U.S. Federal or New York authorities; (vi) any major disruption of settlements of securities or clearance services in the United States or (vii) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity or emergency if, in the judgment of Credit Suisse First Boston Corporation, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the offering or sale of and payment for the Securities. If on the Closing Date any one or more of the Underwriters shall fail or refuse to purchase the Securities which it or they have agreed to purchase hereunder on such date and the aggregate principal amount of Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate principal amount of Securities to be purchased on such date by all Underwriters, each non-defaulting Underwriter shall be obligated severally, in the proportion which the principal amount of Securities set forth opposite its name in Schedule I bears to the aggregate principal amount of Securities which all the non-defaulting Underwriters have agreed to purchase, or in such other proportion as you may specify, to purchase the Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the aggregate principal amount of Securities which any Underwriter has agreed to purchase pursuant to Section 2 hereof be increased pursuant to this Section 9 by an amount in excess of one-ninth of such principal amount of Securities without the written consent of such Underwriter. If on the Closing Date any Underwriter or Underwriters shall fail or refuse to purchase Securities and the aggregate principal amount of Securities with respect to which such default occurs is more than one-tenth of the aggregate principal amount of Securities to be purchased by all Underwriters and arrangements satisfactory to you and the Company for purchase of such Securities are not made within 48 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter and the Company. In any such case which does not result in termination of this Agreement, either you or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and the Prospectus or any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of any such Underwriter under this Agreement. Section 10. Miscellaneous. Notices given pursuant to any provision of this Agreement shall be addressed as follows: (i) if to the Company, to Standard Pacific Corp., 15326 Alton Parkway, Irvine, California, 92618, Attention: Corporate Secretary, with a copy to Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Suite 4700, Los Angeles, California 90071, 20 Attention: Gregory L. Surman, Esq. and (ii) if to the Underwriters or to you, to you c/o Credit Suisse First Boston Corporation at 11 Madison Avenue, New York, New York 10010, Attention: Legal and Compliance Department, with a copy to O'Melveny & Myers LLP, 400 South Hope Street, Los Angeles, California 90071, Attention: Richard A. Boehmer, Esq., or in any case to such other address as the person to be notified may have requested in writing. The respective indemnities, contribution agreements, representations, warranties and other statements of the Company and the several Underwriters set forth in or made pursuant to this Agreement shall remain operative and in full force and effect, and will survive delivery of and payment for the Securities, regardless of (i) any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter, the officers or directors of any Underwriter, any person controlling any Underwriter, the Company, the officers or directors of the Company or any person controlling the Company, (ii) acceptance of the Securities and payment for them hereunder and (iii) termination of this Agreement. If for any reason the Securities are not delivered by or on behalf of the Company as provided herein (other than as a result of any termination of this Agreement pursuant to Section 9), the Company agrees to reimburse the several Underwriters for all out-of-pocket expenses (including the reasonable fees and disbursements of counsel) incurred by it. Notwithstanding any termination of this Agreement, the Company shall be liable for all expenses which it has agreed to pay pursuant to Section 5(i) hereof. The Company agrees to reimburse the several Underwriters, their directors and officers and any persons controlling any of the Underwriters, and the Underwriters agree to reimburse the Company, its directors, its officers who sign the Registration Statement and any person who controls the Company, in each case for any and all fees and expenses (including, without limitation, the reasonable fees disbursements of counsel) incurred by them in connection with enforcing their rights hereunder (including, without limitation, pursuant to Section 7 hereof). Except as otherwise provided, this Agreement has been and is made solely for the benefit of and shall be binding upon the Company, the Underwriters, the Underwriters' directors and officers, any controlling persons referred to herein, the Company's directors and the Company's officers who sign the Registration Statement and their respective successors and assigns, all as and to the extent provided in this Agreement, and no other person shall acquire or have any right under or by virtue of this Agreement. The term "successors and assigns" shall not include a purchaser of any of the Securities from any of the Underwriters merely because of such purchase. 21 This Agreement shall be governed and construed in accordance with the laws of the State of New York. The term "subsidiary" as used in this Agreement means a corporation, a majority of the capital stock with voting power to elect directors of which is directly or indirectly owned by the Company or any of its subsidiaries, or any person in which the Company and its subsidiaries have at least a majority ownership interest. This Agreement may be signed in various counterparts which together shall constitute one and the same instrument. 22 Please confirm that the foregoing correctly sets forth the agreement between the Company and the several Underwriters. Very truly yours, STANDARD PACIFIC CORP. By: /s/ Andrew H. Parnes -------------------------------------- Name: Andrew H. Parnes Title: Senior Vice President-Finance, Chief Financial Officer CREDIT SUISSE FIRST BOSTON CORPORATION By: /s/ Eric A. Anderson ----------------------------- Name: Eric A. Anderson Title: Managing Director BANC OF AMERICA SECURITIES LLC By: /s/ Adam Goodfriend ----------------------------- Name: Adam Goodfriend Title: Managing Director SALOMON SMITH BARNEY INC. By: /s/ H. Allen Bouch ----------------------------- Name: H. Allen Bouch Title: Managing Director BANC ONE CAPITAL MARKETS, INC. By: /s/ Thomas J. McGrath ----------------------------- Name: Thomas J. McGrath Title: Managing Director 23 SCHEDULE I ---------- Principal Amount of Underwriters Securities to Be Purchased - ------------ -------------------------- Credit Suisse First Boston Corporation ........... $ 56,250,000 Banc of America Securities LLC ................... 41,250,000 Salomon Smith Barney Inc. ........................ 41,250,000 Banc One Capital Markets, Inc. ................... 11,250,000 -------------- Total ............................................ $ 150,000,000 =============== 1 EX-4.1 4 dex41.txt SENIOR SUBORDINATED DEBT SECURITIES INDENTURE Exhibit 4.1 - -------------------------------------------------------------------------------- STANDARD PACIFIC CORP. Senior Subordinated Debt Securities Indenture Dated as of April 10, 2002 Bank One Trust Company, N.A., Trustee - -------------------------------------------------------------------------------- TABLE OF CONTENTS
Page ---- ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE.............................................. 1 Section 1.01. Definitions..................................................................... 1 Section 1.02. Other Definitions............................................................... 7 Section 1.03. Incorporation by Reference of Trust Indenture Act............................... 7 Section 1.04. Rules of Construction........................................................... 8 ARTICLE TWO THE SECURITIES.......................................................................... 8 Section 2.01. Form and Dating................................................................. 8 Section 2.02. Execution and Authentication.................................................... 10 Section 2.03. Registrar and Paying Agent...................................................... 10 Section 2.04. Paying Agent to Hold Money in Trust............................................. 10 Section 2.05. Securityholder Lists............................................................ 11 Section 2.06. Transfer and Exchange........................................................... 11 Section 2.07. Replacement Securities.......................................................... 11 Section 2.08. Outstanding Securities.......................................................... 12 Section 2.09. Temporary Securities............................................................ 12 Section 2.10. Cancellation.................................................................... 12 Section 2.11. Defaulted Interest.............................................................. 12 Section 2.12. Treasury Securities............................................................. 13 Section 2.13. CUSIP Numbers................................................................... 13 Section 2.14. Deposit of Moneys............................................................... 13 Section 2.15. Book-Entry Provisions for Global Security....................................... 13 ARTICLE THREE REDEMPTION............................................................................ 14 Section 3.01. Notices to Trustee.............................................................. 14 Section 3.02. Selection of Securities to be Redeemed.......................................... 15 Section 3.03. Notice of Redemption............................................................ 15 Section 3.04. Effect of Notice of Redemption.................................................. 15 Section 3.05. Deposit of Redemption Price..................................................... 16 Section 3.06. Securities Redeemed in Part..................................................... 16 ARTICLE FOUR COVENANTS.............................................................................. 16 Section 4.01. Payment of Securities........................................................... 16 Section 4.02. Maintenance of Office or Agency................................................. 16 Section 4.03. Compliance Certificate.......................................................... 16 Section 4.04. Maintenance of Corporate Existence.............................................. 16 ARTICLE FIVE SUCCESSOR CORPORATION.................................................................. 17 Section 5.01. When Company May Merge, etc..................................................... 17 ARTICLE SIX DEFAULTS AND REMEDIES................................................................... 17
i Section 6.01. Events of Default............................................................... 17 Section 6.02. Acceleration.................................................................... 18 Section 6.03. Other Remedies.................................................................. 19 Section 6.04. Waiver of Existing Defaults..................................................... 19 Section 6.05. Control by Majority............................................................. 19 Section 6.06. Limitation on Suits............................................................. 19 Section 6.07. Rights of Holders to Receive Payment............................................ 20 Section 6.08. Collection Suit by Trustee...................................................... 20 Section 6.09. Trustee May File Proofs of Claim................................................ 20 Section 6.10. Priorities...................................................................... 20 Section 6.11. Undertaking for Costs........................................................... 21 ARTICLE SEVEN TRUSTEE............................................................................... 21 Section 7.01. Duties of Trustee............................................................... 21 Section 7.02. Rights of Trustee............................................................... 22 Section 7.03. Individual Rights of Trustee.................................................... 23 Section 7.04. Trustee's Disclaimer............................................................ 23 Section 7.05. Notice of Defaults.............................................................. 23 Section 7.06. Reports by Trustee to Holders................................................... 23 Section 7.07. Compensation and Indemnity...................................................... 24 Section 7.08. Replacement of Trustee.......................................................... 24 Section 7.09. Successor Trustee by Merger, etc................................................ 25 Section 7.10. Eligibility; Disqualification................................................... 25 Section 7.11. Preferential Collection of Claims Against Company............................... 25 ARTICLE EIGHT DISCHARGE OF INDENTURE................................................................ 25 Section 8.01. Defeasance upon Deposit of Moneys or U.S. Government Obligations................ 25 Section 8.02. Survival of the Company's Obligations........................................... 28 Section 8.03. Application of Trust Money...................................................... 28 Section 8.04. Repayment to the Company........................................................ 28 Section 8.05. Reinstatement................................................................... 29 ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS.................................................... 29 Section 9.01. Without Consent of Holders...................................................... 29 Section 9.02. With Consent of Holders......................................................... 30 Section 9.03. Compliance with Trust Indenture Act............................................. 31 Section 9.04. Revocation and Effect of Consents............................................... 31 Section 9.05. Notation on or Exchange of Securities........................................... 31 Section 9.06. Trustee to Sign Amendments, etc................................................. 31 ARTICLE TEN MISCELLANEOUS 32 Section 10.01. Trust Indenture Act Controls.................................................... 32 Section 10.02. Notices......................................................................... 32 Section 10.03. Communications by Holders with Other Holders.................................... 33 Section 10.04. Certificate and Opinion as to Conditions Precedent.............................. 33 Section 10.05. Statements Required in Certificate or Opinion................................... 33
ii Section 10.06. Rules by Trustee and Agents..................................................... 33 Section 10.07. Legal Holidays.................................................................. 34 Section 10.08. Governing Law................................................................... 34 Section 10.09. No Adverse Interpretation of Other Agreements................................... 34 Section 10.10. No Recourse Against Others...................................................... 34 Section 10.11. Successors and Assigns.......................................................... 34 Section 10.12. Duplicate Originals............................................................. 34 Section 10.13. Severability.................................................................... 34 ARTICLE ELEVEN SUBORDINATION OF SECURITIES.......................................................... 34 Section 11.01. Securities Subordinated to Senior Indebtedness.................................. 34 Section 11.02. No Payment on Securities in Certain Circumstances............................... 35 Section 11.03. Payment Over of Proceeds upon Dissolution, etc.................................. 36 Section 11.04. Subrogation..................................................................... 37 Section 11.05. Obligations of Company Unconditional............................................ 37 Section 11.06. Notice to Trustee............................................................... 38 Section 11.07. Reliance on Judicial Order or Certificate of Liquidating Agent.................. 39 Section 11.08. Trustee's Relation to Senior Indebtedness....................................... 39 Section 11.09. Subordination Rights Not Impaired by Acts or Omissions of the Company or Holders of Senior Indebtedness.................................................. 39 Section 11.10. Securityholders Authorize Trustee To Effectuate Subordination of Securities..... 39 Section 11.11. This Article Not to Prevent Events of Default................................... 40 Section 11.12. Trustee's Compensation Not Prejudiced........................................... 40 Section 11.13. No Waiver of Subordination Provisions........................................... 40 Section 11.14. Certain Payments May Be Paid Prior to Dissolution............................... 40 SIGNATURES ................................................................................ 42 EXHIBIT A ................................................................................ A-1
iii CROSS-REFERENCE TABLE This Cross-Reference Table is not a part of the Indenture. TIA Indenture Section Section - --------------------- ------- 310(a)(1) ...............................................................7.10 (a)(2) ..................................................................7.10 (a)(3) ..................................................................N.A. (a)(4) ..................................................................N.A. (b) ........................................................7.08; 7.10; 10.02 311(a) ..................................................................7.11 (b) .....................................................................7.11 (c) .....................................................................N.A. 312(a) ..................................................................2.05 (b) .....................................................................10.03 (c) .....................................................................10.03 313(a) ..................................................................7.06 (b)(1) ..................................................................N.A. (b)(2) ..................................................................7.06 (c) ....................................................................10.02 (d) .....................................................................7.06 314(a) ...........................................................4.02; 10.02 (b) .....................................................................N.A. (c)(1) .................................................................10.04 (c)(2) .................................................................10.04 (c)(3) ..................................................................N.A. (d) .....................................................................N.A. (e) ....................................................................10.05 315(a) ...............................................................7.01(b) (b) ..............................................................7.05; 10.02 (c) ..................................................................7.01(a) (d) ..................................................................7.01(c) (e) .....................................................................6.11 316(a)(last sentence) ..................................................10.06 (a)(1)(A) ...............................................................6.05 (a)(1)(B) ...............................................................6.04 (a)(2) ..................................................................N.A. (b) .....................................................................6.07 317(a)(1) ...............................................................6.08 (a)(2) ..................................................................6.09 (b) .....................................................................2.04 318(a) .................................................................10.01 N.A. means Not Applicable. iv INDENTURE dated as of April 10, 2002, by and between Standard Pacific Corp., a Delaware corporation (the "Company"), and Bank One Trust Company, N.A. (the "Trustee"). Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Company's debt securities issued under this Indenture (the "Securities"): ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01. Definitions. ----------- To the extent terms defined herein differ from any Authorizing Resolution or supplemental indenture pertaining to any Series of Securities, the definitions in such Authorizing Resolution or supplemental indenture will govern with respect to such Series. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent" means any Registrar, Paying Agent or co-Registrar or agent for service of notices and demands. "Authorizing Resolution" means a resolution adopted by the Board of Directors or by an Officer or committee of Officers pursuant to Board delegation authorizing a Series of Securities. "Bank Credit Facility" means the Revolving Credit Facility, any other bank credit agreement or credit facility entered into in the future by the Company or any Restricted Subsidiary and any other agreement (including all related ancillary agreements) pursuant to which any of the Indebtedness, Obligations, commitments, costs, expenses, fees, reimbursements and other indemnities payable or owing under the Revolving Credit Facility or any other bank credit agreement or credit facility (or under any subsequent Bank Credit Facility) may be refinanced, restructured, renewed, extended, refunded, replaced or increased, as any such Revolving Credit Facility, bank credit agreement, credit facility or other agreement may from time to time at the option of the parties thereto be amended, renewed, supplemented or otherwise modified. "Bankruptcy Law" means title 11 of the United States Code, as amended, or any similar federal or state law for the relief of debtors. "Board of Directors" means the Board of Directors of the Company or any authorized committee thereof. 1 "Capital Stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity. "Capitalized Lease Obligations" means any obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP. "Company" means the party named as such in this Indenture until a successor replaces it pursuant to the Indenture and thereafter means the successor. "Currency Agreement" of any Person means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect such Person or any of its Subsidiaries against fluctuations in currency values. "Default" means any event, act or condition that is, or after notice or the passage of time or both would be, an Event of Default. "Designated Senior Indebtedness" means (i) any Indebtedness under any Bank Credit Facility and (ii) any Senior Indebtedness under any institutional credit agreement or any other Senior Indebtedness which, at the time of determination, has an aggregate principal amount outstanding of at least $25.0 million if the instrument governing such Senior Indebtedness expressly states that such Indebtedness is "Designated Senior Indebtedness" for purposes of this Indenture and a Board Resolution setting forth such designation by the Company has been filed with the Trustee (provided that such instrument may place limitations and conditions on the right of holders of such Senior Indebtedness to exercise the rights of Designated Senior Indebtedness). "Disqualified Stock" means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event (i) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise; (ii) is convertible or exchangeable, at the option of the holder thereof, for Indebtedness or Disqualified Stock; or (iii) is redeemable at the option of the holder thereof, in whole or in part, in each case on or prior to the date that is twelve months after the maturity of the Security. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect on the date of this Indenture. "Hedging Obligations" of any Person means the net obligations of such Person pursuant to any Interest Rate Agreement or any foreign exchange contract, currency swap agreement or other similar agreement to which such Person is a party or a beneficiary. "Holder" or "Securityholder" means the person in whose name a Security is registered on the Registrar's books. 2 "Indebtedness" means on any date of determination (without duplication): (i) the principal of and premium (if any) in respect of: (A) indebtedness of such Person for money borrowed, and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable; (ii) all Capitalized Lease Obligations of such Person; (iii) all obligations of such Person issued or assumed as the deferred purchase price of property or services, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding accounts payable and accrued expenses arising in the ordinary course of business and which are not more than 90 days past due and not in dispute) which would appear as a liability on a balance sheet of a Person prepared on a consolidated basis in accordance with generally accepted accounting principles, which purchase price or obligation is due more than six months after the date of placing such property in service or taking delivery and title thereto or the completion of such services (provided that, in the case of obligations of an acquired Person assumed in connection with an acquisition of such Person, such obligations would constitute Indebtedness of such Person); (iv) all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in (i) through (iii) above) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenth Business Day following receipt by such Person of a demand for reimbursement following payment on the letter of credit); (v) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock or, with respect to any Subsidiary of such Person, any Preferred Stock (but excluding, in each case, any accrued dividends); (vi) all obligations of the type referred to in clauses (i) through (v) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any guarantee; (vii) all obligations of the type referred to in clauses (i) through (vi) of other Persons secured by any lien on any property or asset of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the value of such property or assets or the amount of the obligation so secured; and 3 (viii) to the extent not otherwise included in this definition, Hedging Obligations of such Person. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency, other than a contingency solely within the control of such Person, giving rise to the obligations, of any contingent obligations as described above at such date; provided, however, 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) at such date under such agreements will be included in Indebtedness; and provided, further, that the amount outstanding at any time of any Indebtedness issued with original issue discount shall be deemed to be the face amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such indebtedness at such time as determined in conformity with generally accepted accounting principles. "Indenture" means this Indenture as amended or supplemented from time to time, including pursuant to any Authorizing Resolution or supplemental indenture pertaining to any Series. "Insolvency or Liquidation Proceeding" means, with respect to any Person, any liquidation, dissolution or winding up of such Person, or any bankruptcy, reorganization, insolvency, receivership or similar proceeding with respect to such Person, whether voluntary or involuntary. "Interest Rate Agreement" of any Person means any interest rate swap agreement, interest rate cap agreement, or other financial agreement or arrangement designed to protect such Person or any of its Subsidiaries against fluctuations in interest rates. "Issue Date" means, with respect to any Series of Securities, the date on which the Securities of such Series are originally issued under this Indenture. "Lien" means, with respect to any Property, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such Property. For purposes of this definition, a Person shall be deemed to own, subject to a Lien, any Property which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such Property. "Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "Officer" means the Chairman of the Board, the President, any Vice President, the Treasurer, the Controller or the Secretary of the Company. "Officers' Certificate" means a certificate signed by two Officers or by an Officer and an Assistant Treasurer or an Assistant Secretary of the Company. 4 "Opinion of Counsel" means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee. "Person" means an individual, corporation, partnership, joint venture, association, joint stock company, limited liability company, limited liability partnership, trust, unincorporated organization or government or any agency or political subdivision thereof. "Post-Petition Interest" means, with respect to any Senior Indebtedness of any Person, all interest accrued or accruing on such Indebtedness after the commencement of any Insolvency or Liquidation Proceeding against such Person in accordance with and at the contract rate (including, without limitation, any rate applicable upon default) specified in the agreement or instrument creating, evidencing or governing such Indebtedness, whether or not, pursuant to applicable law or otherwise, the claim for such interest is allowed as a claim in such Insolvency or Liquidation Proceeding. "Preferred Stock", as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation. "principal" of a debt security means the principal of the security plus, when appropriate, the premium, if any, on the security. "Property" of any Person means all types of real, personal, tangible, intangible or mixed property owned by such Person, whether or not included in the most recent consolidated balance sheet of such Person and its Subsidiaries under GAAP. "Restricted Subsidiary" with respect to any Series of Securities, shall be defined in the Authorizing Resolution or supplemental indenture pertaining to such Series. "Revolving Credit Facility" means that certain Ninth Amended and Restated Credit Agreement (the "Credit Agreement") dated as of September 30, 2000 among the Company, Bank of America, N.A., Bank One, NA, Guaranty Federal Bank, F.S.B., Bank United, Fleet National Bank, PNC Bank, National Association, Comerica Bank, Sanwa Bank California, Union Bank of California, SunTrust 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. "SEC" means the Securities and Exchange Commission or any successor agency performing the duties now assigned to it under the TIA. "Securities" means any Securities that are issued under this Indenture. 5 "Senior Indebtedness" means, at any date, all Indebtedness of the Company, including principal, premium, if any, and interest (including Post-Petition Interest), fees and other amounts payable in connection with such Indebtedness, unless the instrument under which such Indebtedness of the Company is incurred expressly provides that such Indebtedness is not senior or superior in right of payment to the Securities of the applicable Series, and all renewals, extensions, modifications, amendments, restructurings or refinancings thereof. Without limiting the generality of the foregoing, "Senior Indebtedness" shall also include the principal of, premium, if any, interest (including any Post-Petition Interest) on, and all other amounts owing in respect of (1) all monetary obligations of every nature of the Company under, or with respect to, any Bank Credit Facility permitted to be Incurred under any supplemental indenture hereto, including without limitation obligations to pay principal and interest, reimbursement obligations under letters of credit, fees, expenses and indemnities (and guarantees thereof) and (2) all Interest Rate Agreements (and guarantees thereof) permitted to be Incurred under any supplemental indenture hereto; in each case whether outstanding on the date that the Securities are originally issued pursuant to this Indenture and the applicable supplemental indenture or thereafter incurred. Notwithstanding the foregoing, Senior Indebtedness shall not include (a) to the extent that it may constitute Indebtedness, any obligation for federal, state, local or other taxes; (b) any Indebtedness between the Company and any Subsidiary of the Company; (c) to the extent that it may constitute Indebtedness, any obligation in respect of any trade payable incurred for the purchase of goods or materials, or for services obtained, in the ordinary course of business; (d) that portion of any Indebtedness that is incurred in violation of any covenant in any supplemental indenture limiting or restricting the incurrence of additional Indebtedness by the Company or any Restricted Subsidiary or the incurrence of any Indebtedness by the Company that purports to be subordinated to any Indebtedness of the Company but that by its terms is not expressly stated to be pari passu with or subordinated to all Series of Securities then outstanding; (e) Indebtedness evidenced by the Securities; and (f) to the extent that it may constitute Indebtedness, any obligation owing under leases (other than Capitalized Lease Obligations). "Senior Notes" means the Company's 9-1/2% Senior Notes due 2010 in the original aggregate principal amount of $125,000,000, the Company's 8-1/2% Senior Notes due 2009 in the original aggregate principal amount of $150,000,000, the Company's 8% Senior Notes due 208 in the original aggregate principal amount of $100,000,000 and the Company's 8-1/2% Senior Notes due 2007 in the original aggregate principal amount of $100,000,000, and any comparable senior notes or debentures of the Company. "Series" means a series of Securities established under this Indenture. "Subsidiary" means a corporation, a majority of the Capital Stock with voting power to elect directors of which is directly or indirectly owned by the Company or its Subsidiaries, or any Person in which the Company or its Subsidiaries have at least a majority interest. "TIA" means the Trust Indenture Act of 1939, as in effect from time to time. "Trustee" means the party named as such in this Indenture until a successor replaces it pursuant to this Indenture and thereafter means the successor serving hereunder. 6 "Trust Officer" means any officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "United States" means the United States of America. "U.S. government obligations" means securities which are (i) direct obligations of the United States for the payment of which its full faith and credit is pledged or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States, which, in either case are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank or trust company as custodian with respect to any such U.S. government obligations or a specific payment of interest on or principal of any such U.S. government obligation held by such custodian for the account of the holder of a depositary receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. government obligation or the specific payment of interest on or principal of the U.S. government obligation evidenced by such depositary receipt. Section 1.02. Other Definitions. ----------------- Term Defined in - ---- ---------- "Agent Members" ........................................ 2.15 "Business Day" ......................................... 10.07 "Covenant Defeasance" .................................. 8.01 "Custodian" ............................................ 6.01 "Depositary" ........................................... 2.15 "Event of Default" ..................................... 6.01 "Legal Defeasance" ..................................... 8.01 "Legal Holiday" ........................................ 10.07 "Paying Agent" ......................................... 2.03 "Payment Blockage Notice" .............................. 11.02 "Payment Blockage Period" .............................. 11.02 "Registrar" ............................................ 2.03 Section 1.03. Incorporation by Reference of Trust Indenture Act. ------------------------------------------------- Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the SEC. "indenture securities" means the Securities. "indenture security holder" means a Securityholder. 7 "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Company, or any other obligor on the Securities of a Series. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings so assigned to them. Section 1.04. Rules of Construction. --------------------- Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) words in the singular include the plural, and in the plural include the singular; and (5) provisions apply to successive events and transactions. ARTICLE TWO THE SECURITIES Section 2.01. Form and Dating. --------------- The aggregate principal amount of Securities that may be issued under this Indenture is unlimited. The Securities may be issued from time to time in one or more Series. All Securities of any one Series shall be substantially identical except, in the case of definitive Securities, as to denomination and except as may otherwise be provided pursuant to an Authorizing Resolution or a supplemental indenture (subject to Section 2.02 hereof). Not all Securities of any one Series need be issued at the same time, and, unless otherwise provided, a Series may be reopened for issuance of additional Securities of such Series at any time without the consent of Holders of the Securities or the Holders of such Series of Securities then outstanding. Each Series shall be created by an Authorizing Resolution or a supplemental indenture that establishes the terms of the Series, which may include the following: (1) the title of the Series; (2) the aggregate principal amount (or any limit on the aggregate principal amount) of the Series and, if any Securities of a Series are to be issued at a discount from their face amount, the method of computing the accretion of such discount; (3) the interest rate or method of calculation of the interest rate; 8 (4) the date from which interest will accrue; (5) the record dates for interest payable on Securities of the Series; (6) the dates when, places where and manner in which principal and interest are payable; (7) the Registrar and Paying Agent; (8) the terms of any mandatory (including any sinking fund requirements) or optional redemption by the Company; (9) the terms of any redemption at the option of Holders; (10) the denominations in which Securities are issuable; (11) whether Securities will be issued in registered or bearer form and the terms of any such forms of Securities; (12) whether any Securities will be represented by a global Security and the terms of any such global Security; (13) the currency or currencies (including any composite currency) in which principal or interest or both may be paid; (14) if payments of principal or interest may be made in a currency other than that in which Securities are denominated, the manner for determining such payments; (15) provisions for electronic issuance of Securities or issuance of Securities in uncertificated form; (16) any Events of Default, covenants and/or defined terms in addition to or in lieu of those set forth in this Indenture; (17) whether and upon what terms Securities may be defeased if different from the provisions set forth in this Indenture; (18) the form of the Securities, which, unless the Authorizing Resolution or supplemental indenture otherwise provides, shall be in the form of Exhibit A; (19) any terms that may be required by or advisable under applicable law; (20) the percentage of the principal amount of the Securities which is payable if the maturity of the Securities is accelerated in the case of Securities issued at a discount from their face amount; (21) whether any Securities will have guarantees; and (22) any other terms in addition to or different from those contained in this Indenture. 9 All Securities of one Series need not be issued at the same time and, unless otherwise provided, a Series may be reopened for issuances of additional Securities of such Series pursuant to an Authorizing Resolution, an Officers' Certificate or in any indenture supplemental hereto. The creation and issuance of a Series and the authentication and delivery thereof are not subject to any conditions precedent. Section 2.02. Execution and Authentication. ---------------------------- Two Officers shall sign the Securities for the Company by manual or facsimile signature. The Company's seal may be reproduced on the Securities. If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall nevertheless be valid. A Security shall not be valid until the Trustee manually signs the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. The Trustee shall authenticate Securities for original issue upon receipt of an Officers' Certificate of the Company. Each Security shall be dated the date of its authentication. Section 2.03. Registrar and Paying Agent. -------------------------- The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange ("Registrar"), an office or agency where Securities may be presented for payment ("Paying Agent") and an office or agency where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may have one or more co-Registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company shall promptly notify the Trustee in writing of the name and address of any such Agent and the Trustee shall have the right to inspect the Securities register at all reasonable times to obtain copies thereof, and the Trustee shall have the right to rely upon such register as to the names and addresses of the Holders and the principal amounts and certificate numbers thereof. If the Company fails to maintain a Registrar or Paying Agent or fails to give the foregoing notice, the Trustee shall act as such. The Company initially appoints the Trustee as Registrar and Paying Agent. Section 2.04. Paying Agent to Hold Money in Trust. ----------------------------------- Each Paying Agent shall hold in trust for the benefit of Securityholders and the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities, and shall notify the Trustee of any default by the Company in making any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money and hold it as a 10 separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon doing so the Paying Agent shall have no further liability for the money. Section 2.05. Securityholder Lists. -------------------- The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least 7 Business Days before each semiannual interest payment date and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders. Section 2.06. Transfer and Exchange. --------------------- Where a Security is presented to the Registrar or a co-Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if the requirements of Section 8-401(a) of the New York Uniform Commercial Code are met. Where Securities are presented to the Registrar or a co-Registrar with a request to exchange them for an equal principal amount of Securities of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit transfers and exchanges, the Trustee shall authenticate Securities at the Registrar's request. The Registrar need not transfer or exchange any Security selected for redemption, except the unredeemed part thereof if the Security is redeemed in part, or transfer or exchange any Securities for a period of 15 days before a selection of Securities to be redeemed. Any exchange or transfer shall be without charge, except that the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto except in the case of exchanges pursuant to 2.09, 3.06 or 9.05 not involving any transfer. Any Holder of a global Security shall, by acceptance of such global Security, agree that transfers of beneficial interests in such global Security may be effected only through a book entry system maintained by the Holder of such global Security (or its agent), and that ownership of a beneficial interest in the Security shall be required to be reflected in a book entry. Section 2.07. Replacement Securities. ---------------------- If the Holder of a Security claims that the Security has been lost, destroyed, mutilated or wrongfully taken, the Company shall issue and, upon written request of any Officer of the Company, the Trustee shall authenticate a replacement Security, provided in the case of a lost, destroyed or wrongfully taken Security, that the requirements of Section 8-405 of the New York Uniform Commercial Code are met. If any such lost, destroyed, mutilated or wrongfully taken Security shall have matured or shall be about to mature, the Company may, instead of issuing a substitute Security therefor, pay such Security without requiring (except in the case of a mutilated Security) the surrender thereof. An indemnity bond must be sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee or any Agent from any loss which any of them may suffer if a Security is replaced, including the acquisition of such Security 11 by a bona fide purchaser. The Company or the Trustee may charge for its expenses in replacing a Security. Section 2.08. Outstanding Securities. ---------------------- Securities outstanding at any time are all Securities authenticated by the Trustee except for those canceled by it and those described in this Section. A Security does not cease to be outstanding because the Company or one of its Affiliates holds the Security. If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. If the Paying Agent holds on a redemption date or maturity date money sufficient to pay Securities payable on that date, then on and after that date such Securities cease to be outstanding and interest on them ceases to accrue. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. Section 2.09. Temporary Securities. -------------------- Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and, upon surrender for cancellation of the temporary Security, the Company shall execute and the Trustee shall authenticate definitive Securities in exchange for temporary Securities. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities authenticated and delivered hereunder. Section 2.10. Cancellation. ------------ The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange, redemption or payment. The Trustee and no one else shall cancel and destroy, or retain in accordance with its standard retention policy, all Securities surrendered for registration or transfer, exchange, redemption, paying or cancellation. Unless the Authorizing Resolution so provides, the Company may not issue new Securities to replace Securities that it has previously paid or delivered to the Trustee for cancellation. Section 2.11. Defaulted Interest. ------------------ If the Company defaults in a payment of interest on the Securities, it shall pay the defaulted interest plus any interest payable on the defaulted interest to the persons who are Securityholders on a subsequent special record date. The Company shall fix such special record date and a payment date which shall be reasonably satisfactory to the Trustee. At least 15 days before such special record date, the Company shall mail to each Securityholder a notice that states the record date, the payment date and the amount of defaulted interest to be paid. On or 12 before the date such notice is mailed, the Company shall deposit with the Paying Agent money sufficient to pay the amount of defaulted interest to be so paid. The Company may pay defaulted interest in any other lawful manner if, after notice given by the Company to the Trustee of the proposed payment, such manner of payment shall be deemed practicable by the Trustee. Section 2.12. Treasury Securities. ------------------- In determining whether the Holders of the required principal amount of Securities of a Series have concurred in any direction, waiver, consent or notice, Securities owned by the Company or any of its Affiliates shall be considered as though they are not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee actually knows are so owned shall be so considered. Section 2.13. CUSIP Numbers. ------------- The Company in issuing the Securities of any Series may use a "CUSIP" number, and if so, the Trustee shall use the CUSIP number in notices of redemption or exchange as a convenience to Holders of such Securities; provided that no representation is hereby deemed to be made by the Trustee as to the correctness or accuracy of any such CUSIP number printed in the notice or on such Securities, and that reliance may be placed only on the other identification numbers printed on such Securities. The Company shall promptly notify the Trustee of any change in any CUSIP number. Section 2.14. Deposit of Moneys. ----------------- Prior to 11:00 a.m. New York City time on each interest payment date and maturity date with respect to each Series of Securities, the Company shall have deposited with the Paying Agent in immediately available funds money sufficient to make cash payments due on such interest payment date or maturity date, as the case may be, in a timely manner which permits the Paying Agent to remit payment to the Holders on such interest payment date or maturity date, as the case may be. Section 2.15. Book-Entry Provisions for Global Security. ----------------------------------------- (a) Any global Security of a Series initially shall (i) be registered in the name of the depositary who shall be identified in the Authorizing Resolution or supplemental indenture relating to such Securities (the "Depositary") or the nominee of such Depositary, (ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear any required legends. Members of, or participants in, the Depositary ("Agent Members") shall have no rights under this Indenture with respect to any global Security held on their behalf by the Depositary, or the Trustee as its custodian, or under the global Security, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, 13 as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Security. (b) Transfers of any global Security shall be limited to transfers in whole, but not in part, to the Depositary, its successors or their respective nominees. Interests of beneficial owners in the global Security may be transferred or exchanged for definitive Securities in accordance with the rules and procedures of the Depositary. In addition, definitive Securities shall be transferred to all beneficial owners in exchange for their beneficial interests in a global Security if (i) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for the global Security and a successor depositary is not appointed by the Company within 90 days of such notice or (ii) the Company elects to cause the issuance of definitive Securities hereunder. In either instance, upon surrender by the relevant Holder of its global Security, definitive Securities will be issued to each Person that such Holder and the Depositary identifies as being the beneficial owner of the related Securities. (c) In connection with any transfer or exchange of a portion of the beneficial interest in any global Security to beneficial owners pursuant to paragraph (b), the Registrar shall (if one or more definitive Securities are to be issued) reflect on its books and records the date and a decrease in the principal amount of the global Security in an amount equal to the principal amount of the beneficial interest in the global Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and deliver, one or more definitive Securities of like tenor and amount. (d) In connection with the transfer of an entire global Security to beneficial owners pursuant to paragraph (b), the global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interest in the global Security, an equal aggregate principal amount of definitive Securities of authorized denominations. (e) The Holder of any global Security may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities of such Series. ARTICLE THREE REDEMPTION Section 3.01. Notices to Trustee. ------------------ Securities of a Series that are redeemable prior to maturity shall be redeemable in accordance with their terms and, unless the Authorizing Resolution or supplemental indenture provides otherwise, in accordance with this Article. If the Company wants to redeem Securities pursuant to the optional redemption provisions, if any, set forth in the Securities, it shall notify the Trustee in writing of the Redemption Date and the principal amount of Securities to be redeemed. Any such notice may 14 be canceled at any time prior to notice of such redemption being mailed to Holders. Any such canceled notice shall be void and of no effect. If the Company wants to credit any Securities previously redeemed, retired or acquired against any redemption pursuant to the mandatory redemption provisions, if any, set forth in the Securities, it shall notify the Trustee of the amount of the credit and it shall deliver any Securities not previously delivered to the Trustee for cancellation with such notice. The Company shall give each notice provided for in this Section 3.01 at least 30 days before the notice of any such redemption is to be mailed to Holders (unless a shorter notice shall be satisfactory to the Trustee). Section 3.02. Selection of Securities to be Redeemed. -------------------------------------- If fewer than all of the Securities of a Series are to be redeemed, the Trustee shall select the Securities to be redeemed by a method the Trustee considers fair and appropriate. The Trustee shall make the selection from Securities outstanding not previously called for redemption and shall promptly notify the Company of the serial numbers or other identifying attributes of the Securities so selected. The Trustee may select for redemption portions of the principal of Securities that have denominations larger than the minimum denomination for the Series. Securities and portions of them it selects shall be in amounts equal to the minimum denomination for the Series or an integral multiple thereof. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. Section 3.03. Notice of Redemption. -------------------- At least 15 days but not more than 60 days before a redemption date, the Company shall mail a notice of redemption by first-class mail, postage prepaid, to each Holder of Securities to be redeemed. The notice shall identify the Securities to be redeemed and shall state: (1) the redemption date; (2) the redemption price; (3) the name and address of the Paying Agent; (4) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price; (5) that interest on Securities called for redemption ceases to accrue on and after the redemption date; and (6) that the Securities are being redeemed pursuant to the mandatory redemption or the optional redemption provisions, as applicable. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense; provided, however, that the Company shall deliver to the Trustee at least 15 days prior to the date on which notice of redemption is to be mailed or such shorter period as may be satisfactory to the Trustee, an Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. Section 3.04. Effect of Notice of Redemption. ------------------------------ Once notice of redemption is mailed, Securities called for redemption become due and payable on the redemption date and at the redemption price as set forth in the notice of redemption. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price, plus accrued interest to the redemption date. 15 Section 3.05. Deposit of Redemption Price. --------------------------- On or before the redemption date, the Company shall deposit with the Paying Agent immediately available funds sufficient to pay the redemption price of and accrued interest on all Securities to be redeemed on that date. Section 3.06. Securities Redeemed in Part. --------------------------- Upon surrender of a Security that is redeemed in part, the Company shall execute and the Trustee shall authenticate for each Holder a new Security equal in principal amount to the unredeemed portion of the Security surrendered. ARTICLE FOUR COVENANTS Section 4.01. Payment of Securities. --------------------- The Company shall pay the principal of and interest on a Series on the dates and in the manner provided in the Securities of the Series. An installment of principal or interest shall be considered paid on the date it is due if the Paying Agent holds on that date money designated for and sufficient to pay the installment. The Company shall pay interest on overdue principal at the rate borne by the Series; it shall pay interest on overdue installments of interest at the same rate. Section 4.02. Maintenance of Office or Agency. ------------------------------- The Company shall maintain the office or agency required under Section 2.03. The Company shall give prior written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee. Section 4.03. Compliance Certificate. ---------------------- The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company an Officers' Certificate stating whether or not the signers know of any Default by the Company in performing any of its obligations under this Indenture. If they do know of such a Default, the certificate shall describe the Default. Section 4.04. Maintenance of Corporate Existence. ---------------------------------- The Company will cause to be done all things necessary to preserve and keep in full force and effect the corporate existence of the Company; provided, however, that nothing in this Section 4.04 shall prevent a consolidation or merger of the Company not prohibited by the provisions of Article Five or any other provision or the Authorizing Resolution or supplemental indenture pertaining to a Series. 16 ARTICLE FIVE SUCCESSOR CORPORATION Section 5.01. When Company May Merge, etc. ---------------------------- The Company shall not consolidate with or merge with or into, any other corporation, or transfer all or substantially all of its assets to, any entity unless permitted by law and unless (1) the resulting, surviving or transferee entity (if other than the Company), which shall be a corporation organized and existing under the laws of the United States or a State thereof, and shall assume by supplemental indenture, in a form reasonably satisfactory to the Trustee, all of the obligations of the Company under the Securities and this Indenture and (2) immediately after giving effect to, and as a result of, such transaction, no Default or Event of Default shall have occurred and be continuing. Thereafter, in the event that the Company is not the continuing corporation, such successor corporation or corporations shall succeed to and be substituted for the Company with the same effect as if it had been named herein as the "Company" and all such obligations of the predecessor corporation shall terminate. The Company shall deliver to the Trustee prior to the consummation of the proposed transaction an Officers' Certificate to the foregoing effect and an Opinion of Counsel stating that the proposed transaction and such supplemental indenture comply with this Indenture. To the extent that an Authorizing Resolution or supplemental indenture pertaining to any Series provides for different provisions relating to the subject matter of this Article Five, the provisions in such Authorizing Resolution or supplemental indenture shall govern for purposes of such Series. ARTICLE SIX DEFAULTS AND REMEDIES Section 6.01. Events of Default. ----------------- An "Event of Default" on a Series occurs if, voluntarily or involuntarily, whether by operation of law or otherwise, any of the following occurs: (1) the failure by the Company to pay interest on any Security of such Series when the same becomes due and payable and the continuance of any such failure for a period of 30 days; (2) the failure by the Company to pay the principal or premium of any Security of such Series when the same becomes due and payable at maturity, upon acceleration or otherwise (whether or not such payment is prohibited by Article Eleven hereof); (3) the failure by the Company to comply with any of its agreements or covenants in, or provisions of, the Securities of such Series or this Indenture (as they relate thereto) and such failure continues for the period and after the notice specified below (except in the case of a default with respect to Article Five (or any replacement provisions as contemplated by Article Five), which will constitute an Event of Default with notice but without passage of time); (4) the Company pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, 17 (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, or (D) makes a general assignment for the benefit of its creditors; or (5) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company as debtor in an involuntary case, (B) appoints a Custodian of the Company or a Custodian for all or substantially all of the property of the Company, or (C) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 60 days. A Default as described in sub-clause (3) above will not be deemed an Event of Default until the Trustee notifies the Company, or the Holders of at least 25 percent in principal amount of the then outstanding Securities of the applicable Series notify the Company and the Trustee, of the Default and (except in the case of a default with respect to Article Five (or any replacement provisions as contemplated by Article Five)) the Company does not cure the Default within 60 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." If such a Default is cured within such time period, it ceases. The term "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. Section 6.02. Acceleration. ------------ If an Event of Default (other than an Event of Default with respect to the Company resulting from sub-clauses (4) or (5) above) shall have occurred and be continuing, the Trustee by notice to the Company, or the Holders of at least 25 percent in principal amount of the Securities of the applicable Series then outstanding by notice to the Company and the Trustee, may declare all Securities of such Series to be due and payable immediately. Upon such declaration of acceleration, the amounts due and payable on the Securities of such Series will be due and payable immediately. If an Event of Default with respect to the Company specified in sub-clauses (4) or (5) above occurs, all amounts due and payable on the Securities of such Series will ipso facto become and be immediately due and payable without any declaration, notice or other act on the part of the Trustee and the Company or any Holder. The Holders of a majority in principal amount of the Securities of such Series then outstanding by written notice to the Trustee and the Company may waive any Default or Event of Default (other than any continuing Default or Event of Default in payment of principal or interest) with respect to such Series of Securities under the Indenture. Holders of a majority in principal amount of the then outstanding Securities of such Series may rescind an acceleration with respect to such Series and its consequence (except an acceleration due to nonpayment of principal or interest on the Securities of such Series) if the rescission would not conflict with any judgment or decree and if all existing 18 Events of Default (other than non-payment of accelerated principal and premium, if any, with respect to such Series of Securities) have been cured or waived. No such rescission shall extend to or shall affect any subsequent Event of Default, or shall impair any right or power consequent thereon. Section 6.03. Other Remedies. -------------- If an Event of Default on a Series occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of or interest on the Series or to enforce the performance of any provision in the Securities or this Indenture applicable to the Series. The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. Section 6.04. Waiver of Existing Defaults. --------------------------- Subject to Section 9.02, the Holders of a majority in principal amount of the outstanding Securities of a Series on behalf of all the Holders of the Series by notice to the Trustee may waive an existing Default on such Series and its consequences. When a Default is waived, it is cured and stops continuing, and any Event of Default arising therefrom shall be deemed to have been cured; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. Section 6.05. Control by Majority. ------------------- The Holders of a majority in principal amount of the outstanding Securities of a Series may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it with respect to such Series. The Trustee, however, may refuse to follow any direction (i) that conflicts with law or this Indenture, (ii) that, subject to Section 7.01, the Trustee determines is unduly prejudicial to the rights of other Securityholders, (iii) that would involve the Trustee in personal liability or (iv) if the Trustee shall not have been provided with indemnity satisfactory to it. Section 6.06. Limitation on Suits. ------------------- A Securityholder of a Series may not pursue any remedy with respect to this Indenture or the Series unless: (1) the Holder gives to the Trustee written notice of a continuing Event of Default on the Series; (2) the Holders of at least a majority in principal amount of the outstanding Securities of the Series make a written request to the Trustee to pursue the remedy; 19 (3) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (5) no written request inconsistent with such written request shall have been given to the Trustee pursuant to this Section 6.06. A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. Section 6.07. Rights of Holders to Receive Payment. ------------------------------------ Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on the Security, on or after the respective due dates expressed in the Security, or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional and shall not be impaired or affected without the consent of the Holder. Section 6.08. Collection Suit by Trustee. -------------------------- If an Event of Default in payment of interest or principal specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal and interest remaining unpaid. Section 6.09. Trustee May File Proofs of Claim. -------------------------------- The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Securityholders allowed in any judicial proceedings relative to the Company, its creditors or its property, and unless prohibited by applicable law or regulation, may vote on behalf of the Holders in any election of a Custodian, and shall be entitled and empowered to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same and any Custodian in any such judicial proceeding is hereby authorized by each Securityholder to make such payments to the Trustee. Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder or to authorize the Trustee to vote in respect of the claim of any Securityholder except as aforesaid for the election of the Custodian. Section 6.10. Priorities. ---------- If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee for amounts due under Section 7.07; 20 Second: to Securityholders of the Series for amounts due and unpaid on the Series for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Series for principal and interest, respectively; and Third: to the Company as its interests may appear. The Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section 6.10. Section 6.11. Undertaking for Costs. --------------------- In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having the due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the Series. ARTICLE SEVEN TRUSTEE Section 7.01. Duties of Trustee. ----------------- (a) If an Event of Default has occurred and is continuing, the Trustee shall, prior to the receipt of directions from the Holders of a majority in principal amount of the applicable Series, exercise its rights and powers and use the same degree of care and skill in their exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) Except during the continuance of an Event of Default: (1) The Trustee need perform only those duties that are specifically set forth in this Indenture and no others and no implied covenants or obligations shall be read into this Indenture against the Trustee. (2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. The Trustee, however, shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture but need not confirm or investigate the accuracy of mathematical calculations or other facts or matters stated therein. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) This paragraph does not limit the effect of paragraph (b) of this Section. 21 (2) The Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; (3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 or any other direction of the Holders permitted hereunder. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. (e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (g) None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there shall be reasonable grounds for believing that the repayment of such funds or adequate indemnity against such liability is not reasonably assured to it. Section 7.02. Rights of Trustee. ----------------- Subject to Section 7.01: (a) The Trustee may rely and shall be protected in acting or refraining from acting on any document, resolution, certificate, instrument, report, or direction believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document, resolution, certificate, instrument, report, or direction. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both, which shall conform to Sections 10.04 and 10.05 hereof and containing such other statements as the Trustee reasonably deems necessary to perform its duties hereunder. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers' Certificate, Opinion of Counsel or any other direction of the Company permitted hereunder. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. 22 (e) The Trustee may consult with counsel, and the written advice of such counsel or any Opinion of Counsel as to matters of law shall be full and complete authorization and protection in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. (f) Unless otherwise specifically provided in the Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company. (g) For all purposes under this Indenture, the Trustee shall not be deemed to have notice or knowledge of any Event of Default (other than under Section 6.01(1) or 6.01(2)) unless a Trust Officer assigned to and working in the Trustee's corporate trust office has actual knowledge thereof or unless written notice of any Event of Default is received by the Trustee at its address specified in Section 10.02 hereof and such notice references the Securities generally, the Company or this Indenture. Section 7.03. Individual Rights of Trustee. ---------------------------- The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its affiliates with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee, however, must comply with Sections 7.10 and 7.11. Section 7.04. Trustee's Disclaimer. -------------------- The Trustee makes no representation as to the validity or adequacy of this Indenture, the Securities or of any prospectus used to sell the Securities; it shall not be accountable for the Company's use of the proceeds from the Securities; it shall not be accountable for any money paid to the Company, or upon the Company's direction, if made under and in accordance with any provision of this Indenture; it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee; and it shall not be responsible for any statement of the Company in this Indenture or in the Securities other than its certificate of authentication. Section 7.05. Notice of Defaults. ------------------ If a Default on a Series occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each Securityholder of the Series notice of the Default (which shall specify any uncured Default known to it) within 90 days after it occurs. Except in the case of a default in payment of principal of or interest on a Series, the Trustee may withhold the notice if and so long as the board of directors of the Trustee, the executive or any trust committee of such directors and/or responsible officers of the Trustee in good faith determine(s) that withholding the notice is in the interests of Holders of the Series. Section 7.06. Reports by Trustee to Holders. ----------------------------- Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, the Trustee shall mail to each Securityholder a brief report dated as of such May 15 that complies with TIA (S) 313(a) (but if no event described in TIA (S) 313(2) has occurred within 23 the twelve months preceding the reporting date no report need be transmitted). The Trustee also shall comply with TIA (S) 313(b). A copy of each report at the time of its mailing to Securityholders shall be delivered to the Company and filed by the Trustee with the SEC and each national securities exchange on which the Securities are listed. The Company agrees to notify the Trustee of each national securities exchange on which the Securities are listed. Section 7.07. Compensation and Indemnity. -------------------------- The Company shall pay to the Trustee or predecessor trustee from time to time reasonable compensation for their respective services subject to any written agreement between the Trustee and the Company. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it. Such expenses shall include the reasonable compensation and expenses of the Trustee's agents and counsel. The Company shall indemnify the Trustee and each predecessor trustee, its officers, directors, employees and agents and hold it harmless against any loss, liability or expense incurred or made by or on behalf of it in connection with the administration of this Indenture or the trust hereunder and its duties hereunder including the costs and expenses of defending itself against or investigating any claim in the premises. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through the Trustee's, or its officers', directors', employees' or agents' negligence or bad faith. To ensure the Company's payment obligations in this Section, the Trustee shall have a claim prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal of or interest on particular Securities. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 6.01 or in connection with Article Six hereof, the expenses (including the reasonable fees and expenses of its counsel) and the compensation for services in connection therewith are to constitute expenses of administration under any bankruptcy law. Section 7.08. Replacement of Trustee. ---------------------- The Trustee may resign by so notifying the Company. The Holders of a majority in principal amount of the outstanding Securities may remove the Trustee by so notifying the removed Trustee in writing and may appoint a successor trustee with the Company's consent. Such resignation or removal shall not take effect until the appointment by the Securityholders or the Company as hereinafter provided of a successor trustee and the acceptance of such appointment by such successor trustee. The Company may remove the Trustee and any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee for any or no reason, including if: (1) the Trustee fails to comply with Section 7.10 after written request by the Company or any bona fide Securityholder who has been a Securityholder for at least six months; (2) the Trustee is adjudged a bankrupt or an insolvent; (3) a receiver or other public officer takes charge of the Trustee or its property; or 24 (4) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor trustee. If a successor trustee does not take office within 45 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or any Holder may petition any court of competent jurisdiction for the appointment of a successor trustee. A successor trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring Trustee shall transfer all property held by it as Trustee to the successor trustee, the resignation or removal of the retiring Trustee shall become effective, and the successor trustee shall have all the rights, powers and duties of the Trustee under this Indenture. A successor trustee shall mail notice of its succession to each Securityholder. Section 7.09. Successor Trustee by Merger, etc. --------------------------------- If the Trustee consolidates with, merges with or into or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor trustee. Section 7.10. Eligibility; Disqualification. ----------------------------- This Indenture shall always have a Trustee who satisfies the requirements of TIA (S) 310(a)(1). The Trustee shall have a combined capital and surplus of at least $10,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA (S) 310(b). Section 7.11. Preferential Collection of Claims Against Company. ------------------------------------------------- The Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be subject to TIA (S) 311(a) to the extent indicated therein. ARTICLE EIGHT DISCHARGE OF INDENTURE Section 8.01. Defeasance upon Deposit of Moneys or U.S. Government ---------------------------------------------------- Obligations. ------------ (a) The Company may, at its option and, subject to the provisions of Article Eleven hereof, at any time, elect to have either paragraph (b) or paragraph (c) below be applied to the outstanding Securities of any Series upon compliance with the applicable conditions set forth in paragraph (d). (b) Upon the Company's exercise under paragraph (a) of the option applicable to this paragraph (b), the Company shall be deemed to have been released and discharged from its obligations with respect to the outstanding Securities of a Series on the date the applicable conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Securities of a Series, which shall thereafter 25 be deemed to be "outstanding" only for the purposes of the Sections and matters under this Indenture referred to in (i) and (ii) below, and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned, except for the following which shall survive until otherwise terminated or discharged hereunder: (i) the rights of Holders of outstanding Securities of a Series to receive solely from the trust fund described in paragraph (d) below and as more fully set forth in such paragraph, payments in respect of the principal of and interest on such Securities when such payments are due and (ii) obligations listed in Section 8.02, subject to compliance with this Section 8.01. The Company may exercise its option under this paragraph (b) notwithstanding the prior exercise of its option under paragraph (c) below with respect to such Securities. (c) Upon the Company's exercise under paragraph (a) of the option applicable to this paragraph (c), the Company shall be released and discharged from the obligations under any covenant contained in Article Five and any other covenant contained in the Authorizing Resolution or supplemental indenture relating to such Series to the extent provided for therein, on and after the date the conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"), and the Securities of such Series shall thereafter be deemed to be not "outstanding" for the purpose of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder. For this purpose, such Covenant Defeasance means that, with respect to the outstanding Securities of a Series, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01(3), but, except as specified above, the remainder of this Indenture and such Securities shall be unaffected thereby. (d) The following shall be the conditions to application of either paragraph (b) or paragraph (c) above to the outstanding Securities of the applicable Series: (1) The Company shall have irrevocably deposited in trust with the Trustee, pursuant to an irrevocable trust and security agreement in form and substance reasonably satisfactory to the Trustee, money in U.S. dollars or U.S. government obligations or a combination thereof in such amounts and at such times as are sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of and interest on the outstanding Securities of such Series to maturity or redemption; provided, however, that the Trustee (or other qualifying trustee) shall have received an irrevocable written order from the Company instructing the Trustee (or other qualifying trustee) to apply such money or the proceeds of such U.S. government obligations to said payments with respect to the Securities of such Series to maturity or redemption; (2) No Default or Event of Default shall have occurred and be continuing on the date of such deposit; (3) Such deposit will not result in a Default under this Indenture or a breach or violation of, or constitute a default under, any other material instrument or agreement to 26 which the Company or any of its Subsidiaries is a party or by which it or any of their property is bound; (4) (i) In the event the Company elects paragraph (b) hereof, the Company shall deliver to the Trustee an Opinion of Counsel in the United States, in form and substance reasonably satisfactory to the Trustee, to the effect that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the Issue Date pertaining to such Series, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall state that, or (ii) in the event the Company elects paragraph (c) hereof, the Company shall deliver to the Trustee an Opinion of Counsel in the United States, in form and substance reasonably satisfactory to the Trustee, to the effect that, in the case of clauses (i) and (ii), Holders of the Securities of such Series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and the defeasance contemplated hereby and will be subject to federal income tax in the same amounts and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; (5) The Company shall have delivered to the Trustee an Officers' Certificate, stating that the deposit under clause (1) was not made by the Company with the intent of preferring the Holders of the Securities of such Series over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company or others; (6) The Company shall have delivered to the Trustee an Opinion of Counsel, reasonably satisfactory to the Trustee, to the effect that, (A) the trust funds will not be subject to the rights of Holders of Indebtedness of the Company other than the Securities of such Series and (B) assuming no intervening bankruptcy of the Company between the date of deposit and the 91st day following the deposit and that no Holder of Securities of such Series is an insider of the Company, after the 91st day following the deposit, the trust funds will not be subject to any applicable bankruptcy, insolvency, reorganization or similar law affecting creditors' rights generally; and (7) The Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent specified herein relating to the defeasance contemplated by this Section 8.01 have been complied with. In the event all or any portion of the Securities of a Series are to be redeemed through such irrevocable trust, the Company must make arrangements satisfactory to the Trustee, at the time of such deposit, for the giving of the notice of such redemption or redemptions by the Trustee in the name and at the expense of the Company. (e) In addition to the Company's rights above under this Section 8.01, the Company may terminate all of its obligations under this Indenture with respect to a Series, when: (1) All Securities of such Series theretofore authenticated and delivered (other than Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.07 and Securities for whose payment money has 27 theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the Trustee for cancellation or all such Securities not theretofore delivered to the Trustee for cancellation have become due and payable and the Company has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for that purpose an amount of money sufficient to pay and discharge the entire Indebtedness on the Securities not theretofore delivered to the Trustee for cancellation, for principal of and interest; (2) The Company has paid or caused to be paid all other sums payable hereunder by the Company; (3) The Company has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Securities at maturity or redemption, as the case may be; and (4) The Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, stating that all conditions precedent specified herein relating to the satisfaction and discharge of this Indenture have been complied with. Section 8.02. Survival of the Company's Obligations. ------------------------------------- Notwithstanding the satisfaction and discharge of the Indenture under Section 8.01, the Company's obligations with respect to unclaimed money described in paragraph 9 of the form of Securities set forth in Exhibit A hereto and Sections 2.03 through 2.07, 4.01, 7.07, 7.08, 8.04 and 8.05, however, shall survive until the Securities of an applicable Series are no longer outstanding. Thereafter, the Company's obligations with respect to unclaimed money described in paragraph 9 of the form of Securities set forth in Exhibit A hereto of the Securities of such Series and Sections 7.07, 8.04 and 8.05 shall survive (as they relate to such Series). Section 8.03. Application of Trust Money. -------------------------- The Trustee shall hold in trust money or U.S. government obligations deposited with it pursuant to Section 8.01. It shall apply the deposited money and the money from U.S. government obligations in accordance with this Indenture to the payment of principal of and interest on the Securities of the defeased Series. Section 8.04. Repayment to the Company. ------------------------ The Trustee and the Paying Agent shall promptly pay to the Company upon request any excess money or securities held by them at any time. The Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or interest that remains unclaimed for two years, provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once in a newspaper of general circulation in the City of New York or mail to each such Holder notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication or mailing, any unclaimed balance of such money then remaining will be repaid to the Company. After payment 28 to the Company, Securityholders entitled to the money must look to the Company for payment as general creditors unless applicable abandoned property law designates another person and all liability of the Trustee or such Paying Agent with respect to such money shall cease. Section 8.05. Reinstatement. ------------- If the Trustee is unable to apply any money or U.S. government obligations in accordance with Section 8.01 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Securities relating to the Series shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the Trustee is permitted to apply all such money or U.S. government obligations in accordance with Section 8.01; provided, however, that (a) if the Company has made any payment of interest on or principal of any Securities of the Series because of the reinstatement of their obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. government obligations held by the Trustee and (b) unless otherwise required by any legal proceeding or any order or judgment of any court or governmental authority, the Trustee shall return all such money or U.S. government obligations to the Company promptly after receiving a written request therefor at any time, if such reinstatement of the Company's obligations has occurred and continue to be in effect. ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS Section 9.01. Without Consent of Holders. -------------------------- The Company and the Trustee may execute a supplemental indenture without the consent of the Holders of Securities: (1) to add to the covenants, agreements and obligations of the Company for the benefit of the Holders of all the Securities of any Series or to surrender any right or power conferred in this Indenture upon the Company; (2) to evidence the succession of another corporation to the Company and the assumption by it of the obligations of the Company under this Indenture and the Securities; (3) to provide for guarantees of any Series of Securities by any Restricted Subsidiary that is simultaneously guaranteeing any Senior Notes, which guarantees shall be on the same terms as the guarantee of such Senior Notes except that the guarantees under the supplemental indenture shall be subordinated to the guarantee of such Senior Notes to the same extent as the Series of Securities is subordinated to such Senior Notes hereunder; (4) to provide for the acceptance of appointment under this Indenture of a successor Trustee with respect to the Securities and to add to or change 29 any provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts by more than one Trustee; (5) to establish the form or terms of a Series of Securities as permitted by Section 2.01 of this Indenture; (6) to provide that specific provisions of this Indenture shall not apply to a Series of Securities not previously issued; (7) to provide for uncertificated Securities in addition to or in place of certificated Securities; (8) cure any ambiguity, omission, defect or inconsistency; (9) to secure the Securities; or (10) to make any other change that does not adversely affect the rights of any Holder. Section 9.02. With Consent of Holders. ----------------------- The Company and the Trustee may amend or supplement this Indenture or the Securities of a Series without notice to any Securityholder of such Series but with the written consent of the Holders of at least a majority in principal amount of the outstanding Securities of each such Series affected by the amendment. Each such Series shall vote as a separate class. The Holders of a majority in principal amount of the outstanding Securities of any Series may waive compliance by the Company with any provision of the Securities of such Series or of this Indenture relating to such Series without notice to any Securityholder. Without the consent of each Securityholder of a Series affected, however, an amendment, supplement or waiver, including a waiver pursuant to Section 6.04, may not: (1) reduce the amount of Securities of such Series whose Holders must consent to an amendment, supplement or waiver; (2) reduce the rate of or change the time for payment of interest, including defaulted interest, on any Security; (3) reduce the principal of or change the fixed maturity of any Security or alter the provisions (including related definitions) with respect to redemption of Securities pursuant to Article Three hereof or with respect to any obligations on the part of the Company to offer to purchase or to redeem Securities of a Series pursuant to the Authorizing Resolution or supplemental indenture pertaining to such Series; (4) make any Security payable in money or at a place other than that stated in such Security; (5) make any change in Sections 6.04, 6.07 or this 9.02 of this Indenture; (6) adversely modify the ranking or priority of the Securities; or 30 (7) waive a continuing Default or Event of Default in the payment of the principal of or interest on any Security. It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed supplement, but it shall be sufficient if such consent approves the substance thereof. Section 9.03. Compliance with Trust Indenture Act. ----------------------------------- Every amendment to or supplement of this Indenture or the Securities shall comply with the TIA as then in effect. Section 9.04. Revocation and Effect of Consents. --------------------------------- A consent to an amendment, supplement or waiver by a Holder shall bind the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. Subject to the following paragraph, any such Holder or subsequent Holder, however, may revoke the consent as to his Security or portion of a Security. Such revocation shall be effective only if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders of Securities of any Series entitled to consent to any amendment, supplement or waiver, which record date shall be at least 10 days prior to the first solicitation of such consent. If a record date is fixed, then notwithstanding the last sentence of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 90 days after such record date. After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it makes a change described in any of clauses (1) through (7) of Section 9.02, in which case, the amendment, supplement or waiver shall bind only each Holder of a Security who has consented to it and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security; provided that any such waiver shall not impair or affect the right of any Holder to receive payment of principal of and interest on a Security, on or after the respective due dates expressed in such Security, or to bring suit for the enforcement of any such payment on or after such respective dates without the consent of such Holder. Section 9.05. Notation on or Exchange of Securities. ------------------------------------- If an amendment, supplement or waiver changes the terms of a Security, the Company may require the Holder of the Security to deliver it to the Trustee, at which time the Trustee shall place an appropriate notation on the Security about the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Section 9.06. Trustee to Sign Amendments, etc. -------------------------------- 31 Subject to Section 7.02(b), the Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing or refusing to sign such amendment or supplemental indenture, the Trustee shall be entitled to receive and shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence that such amendment or supplemental indenture is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Company in accordance with its terms. ARTICLE TEN MISCELLANEOUS Section 10.01. Trust Indenture Act Controls. ---------------------------- If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. Section 10.02. Notices. ------- Any order, consent, notice or communication shall be sufficiently given if in writing and delivered in person or mailed by first class mail, postage prepaid, addressed as follows: if to the Company: Standard Pacific Corp. 15326 Alton Parkway Irvine, California 92618 Attention: Secretary if to the Trustee: Bank One Trust Company, N.A. 1 Bank One Plaza Chicago, Illinois 60670 Attention: Corporate Trust Administration The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. Any notice or communication mailed to a Securityholder shall be mailed to him by first class mail at his address as it appears on the registration books of the Registrar and shall be sufficiently given to him if so mailed within the time prescribed. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it except that notice to the Trustee shall only be effective upon receipt thereof by the Trustee. 32 If the Company mails notice or communications to the Securityholders, it shall mail a copy to the Trustee at the same time. Section 10.03. Communications by Holders with Other Holders. -------------------------------------------- Securityholders may communicate pursuant to TIA (S) 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA (S) 312(c). Section 10.04. Certificate and Opinion as to Conditions Precedent. -------------------------------------------------- Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (1) an Officers' Certificate (which shall include the statements set forth in Section 10.05) stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel (which shall include the statements set forth in Section 10.05) stating that, in the opinion of such counsel, all such conditions precedent and covenants, compliance with which constitutes a condition precedent, if any, provided for in this Indenture relating to the proposed action or inaction, have been complied with and that any such section does not conflict with the terms of the Indenture. Section 10.05. Statements Required in Certificate or Opinion. --------------------------------------------- Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. Section 10.06. Rules by Trustee and Agents. --------------------------- The Trustee may make reasonable rules for action by or a meeting of Securityholders. The Registrar or Paying Agent may make reasonable rules for its functions. 33 Section 10.07. Legal Holidays. -------------- A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day on which banking institutions in Los Angeles, California, Chicago, Illinois, and New York, New York are not required to be open. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. A "Business Day" is any day other than a Legal Holiday. Section 10.08. Governing Law. ------------- The laws of the State of New York shall govern this Indenture and the Securities of each Series. Section 10.09. No Adverse Interpretation of Other Agreements. --------------------------------------------- This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. Section 10.10. No Recourse Against Others. -------------------------- All liability described in paragraph 13 of the Securities of any director, officer, employee or stockholder, as such, of the Company is waived and released. Section 10.11. Successors and Assigns. ---------------------- All covenants and agreements of the Company in this Indenture and the Securities shall bind its successors and assigns. All agreements of the Trustee in this Indenture shall bind its successors and assigns. Section 10.12. Duplicate Originals. ------------------- The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Section 10.13. Severability. ------------ In case any one or more of the provisions contained in this Indenture or in the Securities of a Series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Securities. ARTICLE ELEVEN SUBORDINATION OF SECURITIES Section 11.01. Securities Subordinated to Senior Indebtedness. ---------------------------------------------- The Company covenants and agrees, and the Trustee and each Holder of the Securities by his acceptance thereof likewise covenant and agree, that all Securities shall be issued subject to 34 the provisions of this Article Eleven; and each person holding any Security, whether upon original issue or upon transfer, assignment or exchange thereof, accepts and agrees that all payments of the principal of, premium, if any, and interest on the Securities by the Company shall, to the extent and in the manner set forth in this Article Eleven, be subordinated and junior in right of payment to the prior payment in full in cash of all amounts payable under Senior Indebtedness. Section 11.02. No Payment on Securities in Certain Circumstances. ------------------------------------------------- (a) No direct or indirect payment by or on behalf of the Company of principal of, premium, if any, or interest on the Securities or to repurchase any of the Securities, except from those funds held in trust for the benefit of Holders of any Securities pursuant to the procedures set forth in Article Eight hereof, whether pursuant to the terms of the Securities, upon acceleration or otherwise, shall be made if, at the time of such payment, there exists a default in the payment of all or any portion of the obligations on any Senior Indebtedness, when the same becomes due and payable beyond any applicable period of grace whether at maturity, on account of mandatory redemption or prepayment, acceleration or otherwise, and such default shall not have been cured or waived or the benefits of this sentence waived by or on behalf of the holders of such Senior Indebtedness. In addition, during the continuance of any non-payment event of default with respect to any Designated Senior Indebtedness pursuant to which the maturity thereof may be immediately accelerated, and upon receipt by the Trustee of written notice (a "Payment Blockage Notice" ) from the Company or any holder or holders of such Designated Senior Indebtedness or the trustee or agent acting on behalf of such Designated Senior Indebtedness, then, unless and until such event of default has been cured or waived or has ceased to exist or such Designated Senior Indebtedness has been discharged or repaid in full in cash or the benefits of these provisions have been waived by the holders of such Designated Senior Indebtedness, no direct or indirect payment shall be made by or on behalf of the Company of principal of, premium, if any, or interest on the Securities or to repurchase any of the Securities, except from those funds held in trust for the benefit of Holders of any Securities pursuant to the procedures set forth in Article Eight hereof, to such Holders, during a period (a "Payment Blockage Period") commencing on the date of receipt of such notice by the Trustee and ending 179 days thereafter. Notwithstanding anything herein or in the Securities to the contrary, (x) in no event shall a Payment Blockage Period extend beyond 179 days from the date the Payment Blockage Notice in respect thereof was given (provided that payment may thereafter be restricted if a payment event of default has occurred), (y) there shall be a period of at least 181 consecutive days in each 360-day period when no Payment Blockage Period is in effect and (z) not more than one Payment Blockage Period may be commenced with respect to the Securities during any period of 360 consecutive days. No event of default that existed or was continuing on the date of commencement of any Payment Blockage Period with respect to the Designated Senior Indebtedness initiating such Payment Blockage Period may be, or be made, the basis for the commencement of any other Payment Blockage Period by the holder or holders of such Designated Senior Indebtedness or the trustee or agent acting on behalf of such Designated Senior Indebtedness, whether or not within a period of 360 consecutive days, unless such event of default has been cured or waived for a period of not less than 90 consecutive days. 35 (b) In the event that, notwithstanding the foregoing, any payment shall be received by the Trustee or any Holder when such payment is prohibited by Section 11.02(a), such payment shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Indebtedness (pro rata to such holders on the basis of the respective amounts of Senior Indebtedness held by such holders) or their respective representatives, or to the trustee or trustees under any indenture pursuant to which any of such Senior Indebtedness may have been issued, as their respective interests may appear, or, to the extent such Senior Indebtedness is not then due and payable, to the Company. Section 11.03. Payment Over of Proceeds upon Dissolution, etc. ----------------------------------------------- (a) Upon any payment or distribution of assets or securities of the Company of any kind or character, whether in cash, property or securities, upon any dissolution or winding up or liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other proceedings, all Senior Indebtedness shall first be paid in full in cash before the Holders of the Securities or the Trustee on behalf of such Holders shall be entitled to receive any payment by the Company of the principal of, premium, if any, or interest on the Securities, or any payment by the Company to acquire any of the Securities for cash, property or securities, or any distribution with respect to the Securities of any cash, property or securities (including any payment by holders of Indebtedness subordinated to the Securities pursuant to subordination provisions governing such Indebtedness, but excluding any payment or distribution from funds held in trust for the benefit of Holders of any Securities pursuant to the procedures set forth in Article Eight hereof). Before any payment may be made by, or on behalf of, the Company of the principal of or interest on the Securities upon any such dissolution or winding up or liquidation or reorganization, any payment or distribution of assets or securities of the Company of any kind or character, whether in cash, property or securities (excluding any payment or distribution from funds held in trust for the benefit of Holders of any Securities pursuant to the procedures set forth in Article Eight hereof), to which the Holders of the Securities or the Trustee on their behalf would be entitled, but for the subordination provisions of this Indenture, shall be made by the Company or by any receiver, trustee in bankruptcy, liquidation trustee, agent or other Person making such payment or distribution, directly to the holders of the Senior Indebtedness (pro rata to such holders on the basis of the respective amounts of Senior Indebtedness held by such holders) or their representatives or to the trustee or trustees or agent or agents under any agreement or indenture pursuant to which any of such Senior Indebtedness may have been issued, as their respective interests may appear, to the extent necessary to pay all such Senior Indebtedness in full in cash after giving effect to any prior or concurrent payment, distribution or provision therefor to or for the holders of such Senior Indebtedness. (b) In the event that, notwithstanding the foregoing provision prohibiting such payment or distribution, any payment or distribution of assets or securities of the Company of any kind or character, whether in cash, property or securities (excluding any payment or distribution from funds held in trust for the benefit of Holders of any Securities pursuant to the procedures set forth in Article Eight hereof), shall be received by the Trustee or any Holder of Securities at a time when such payment or distribution is prohibited by Section 11.03(a) and before all obligations in respect of Senior Indebtedness are paid in full in cash, such payment or distribution shall be received and held in trust for the benefit of, and shall be paid over or 36 delivered to, the holders of Senior Indebtedness (pro rata to such holders on the basis of the respective amounts of Senior Indebtedness held by such holders) or their respective representatives, or to the trustee or trustees or agent or agents under any indenture pursuant to which any of such Senior Indebtedness may have been issued, as their respective interests may appear, for application to the payment of Senior Indebtedness remaining unpaid until all such Senior Indebtedness has been paid in full in cash after giving effect to any prior or concurrent payment, distribution or provision therefor to or for the holders of such Senior Indebtedness. The consolidation of the Company with, or the merger of the Company with or into, another corporation or the liquidation or dissolution of the Company following the conveyance or transfer of its property as an entirety, or substantially as an entirety, to another corporation upon the terms and conditions provided in Article Five (or any replacement provisions as contemplated by Article Five) shall not be deemed a dissolution, winding up, liquidation or reorganization for the purposes of this Section 11.03 if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article Five (or any replacement provisions as contemplated by Article Five). Section 11.04. Subrogation. ----------- Upon the payment in full in cash of all Senior Indebtedness, or provision for payment in other than cash is accepted by the holders of Senior Indebtedness in full satisfaction of amounts due in respect of all Senior Indebtedness, the Holders of the Securities shall be subrogated to the rights of the holders of Senior Indebtedness to receive payments or distributions of cash, property or securities of the Company made on such Senior Indebtedness until the principal of and interest on the Securities shall be paid in full in cash; and, for the purposes of such subrogation, no payments or distributions to the holders of the Senior Indebtedness of any cash, property or securities to which the Holders of the Securities or the Trustee on their behalf would be entitled except for the provisions of this Article Eleven, and no payment over pursuant to the provisions of this Article Eleven to the holders of Senior Indebtedness by Holders of the Securities or the Trustee on their behalf shall, as between the Company, its creditors other than holders of Senior Indebtedness, and the Holders of the Securities, be deemed to be a payment by the Company to or on account of the Senior Indebtedness. It is understood that the provisions of this Article Eleven are and are intended solely for the purpose of defining the relative rights of the Holders of the Securities, on the one hand, and the holders of the Senior Indebtedness, on the other hand. If any payment or distribution to which the Holders of the Securities would otherwise have been entitled but for the provisions of this Article Eleven shall have been applied, pursuant to the provisions of this Article Eleven, to the payment of all amounts payable under Senior Indebtedness, then and in such case, the Holders of the Securities shall be entitled to receive from the holders of such Senior Indebtedness any payments or distributions received by such holders of Senior Indebtedness in excess of the amount required to make payment in full in cash. Section 11.05. Obligations of Company Unconditional. ------------------------------------ Nothing contained in this Article Eleven or elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the Company and the Holders of the Securities, the obligation of the Company, which is absolute and unconditional, to pay to the 37 Holders of the Securities the principal of and interest on the Securities as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders of the Securities and creditors of the Company other than the holders of the Senior Indebtedness, nor shall anything herein or therein prevent the Holder of any Security or the Trustee on their behalf from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article Eleven of the holders of the Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy. Without limiting the generality of the foregoing, nothing contained in this Article Eleven shall restrict the right of the Trustee or the Holders of Securities to take any action to declare the Securities to be due and payable prior to their stated maturity pursuant to Section 6.01 or to pursue any rights or remedies hereunder; provided, however, that all Senior Indebtedness then due and payable shall first be paid in full in cash (and no Payment Blockage Period shall be in effect) before the Holders of the Securities or the Trustee are entitled to receive any direct or indirect payment from the Company of principal of or interest on the Securities. Section 11.06. Notice to Trustee. ----------------- The Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the making of any payment to or by the Trustee in respect of the Securities pursuant to the provisions of this Article Eleven. The Trustee shall not be charged with knowledge of the existence of any event of default with respect to any Senior Indebtedness or of any other facts which would prohibit the making of any payment to or by the Trustee unless and until the Trustee shall have received notice in writing at its corporate trust office to that effect signed by an Officer of the Company, or by a holder of Senior Indebtedness or trustee or agent therefor; and prior to the receipt of any such written notice, the Trustee shall, subject to Article Seven, be entitled to assume that no such facts exist; provided that if the Trustee shall not have received the notice provided for in this Section 11.06 at least two Business Days prior to the date upon which by the terms of this Indenture any moneys shall become payable for any purpose (including, without limitation, the payment of the principal of or interest on any Security), then, regardless of anything herein to the contrary, the Trustee shall have full power and authority to receive any moneys from the Company and to apply the same to the purpose for which they were received, and shall not be affected by any notice to the contrary which may be received by it on or after such prior date. Nothing contained in this Section 11.06 shall limit the right of the holders of Senior Indebtedness to recover payments as contemplated by Section 11.03. The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself or itself to be a holder of any Senior Indebtedness (or a trustee on behalf of, or other representative of, such holder) to establish that such notice has been given by a holder of such Senior Indebtedness or a trustee or representative on behalf of any such holder. In the event that the Trustee determines in good faith that any evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article Eleven, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article Eleven, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. 38 Section 11.07. Reliance on Judicial Order or Certificate of Liquidating -------------------------------------------------------- Agent. - ----- Upon any payment or distribution of assets or securities referred to in this Article Eleven, the Trustee and the Holders of the Securities shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or reorganization proceedings are pending, or upon a certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, delivered to the Trustee or to the Holders of the Securities for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article Eleven. Section 11.08. Trustee's Relation to Senior Indebtedness. ----------------------------------------- The Trustee and any Paying Agent shall be entitled to all the rights set forth in this Article Eleven with respect to any Senior Indebtedness which may at any time be held by it in its individual or any other capacity to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee or any Paying Agent of any of its rights as such holder. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article Eleven, and no implied covenants or obligations with respect to the holders of Senior Indebtedness shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness (except as provided in Section 11.03(b)). The Trustee shall not be liable to any such holders if the Trustee shall in good faith mistakenly pay over or distribute to Holders of Securities or to the Company or to any other person cash, property or securities to which any holders of Senior Indebtedness shall be entitled by virtue of this Article Eleven or otherwise. Section 11.09. Subordination Rights Not Impaired by Acts or Omissions of --------------------------------------------------------- the Company or Holders of Senior Indebtedness. - --------------------------------------------- No right of any present or future holders of any Senior Indebtedness to enforce subordination as provided herein shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms of this Indenture, regardless of any knowledge thereof which any such holder may have or otherwise be charged with. The provisions of this Article Eleven are intended to be for the benefit of, and shall be enforceable directly by, the holders of Senior Indebtedness. Section 11.10. Securityholders Authorize Trustee To Effectuate ----------------------------------------------- Subordination of Securities. - --------------------------- Each Holder of Securities by his acceptance of such Securities authorizes and expressly directs the Trustee on his behalf to take such action as may be necessary or appropriate to 39 effectuate the subordination provided in this Article Eleven, and appoints the Trustee his attorney-in-fact for such purposes, including, in the event of any dissolution, winding-up, liquidation or reorganization of the Company (whether in bankruptcy, insolvency, receivership, reorganization or similar proceedings or upon an assignment for the benefit of creditors or otherwise) tending towards liquidation of the business and assets of the Company, the filing of a claim for the unpaid balance of its or his Securities in the form required in those proceedings. Section 11.11. This Article Not to Prevent Events of Default. --------------------------------------------- The failure to make a payment on account of principal of or interest on the Securities by reason of any provision of this Article Eleven shall not be construed as preventing the occurrence of an Event of Default specified in clause (1) or (2) of Section 6.01. Section 11.12. Trustee's Compensation Not Prejudiced. ------------------------------------- Nothing in this Article Eleven shall apply to amounts due to the Trustee pursuant to other sections in this Indenture. Section 11.13. No Waiver of Subordination Provisions. ------------------------------------- Without in any way limiting the generality of Section 11.09, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of the Securities, without incurring responsibility to the Holders of the Securities and without impairing or releasing the subordination provided in this Article Eleven or the obligations hereunder of the Holders of the Securities to the holders of Senior Indebtedness, do any one or more of the following: (a) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding or secured; (b) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c) release any Person liable in any manner for the collection of Senior Indebtedness; and (d) exercise or refrain from exercising any rights against the Company and any other Person. Section 11.14. Certain Payments May Be Paid Prior to Dissolution. ------------------------------------------------- All money and United States government obligations properly deposited in trust with the Trustee pursuant to and in accordance with Article Eight shall be for the sole benefit of the Holders and shall not be subject to this Article Eleven (so long as the funding of such trust did not violate the provisions of this Article Eleven). Nothing contained in this Article Eleven or elsewhere in this Indenture shall prevent (i) the Company, except under the conditions described in Section 11.02, Section 11.03 or Section 11.05, from making payments of principal of and interest on the Securities, or from depositing with the Trustee any moneys for such payments or from effecting a termination of the Company's obligations under the Securities and this Indenture as provided in Article Eight, (ii) the application by the Trustee of any moneys properly deposited in trust with the Trustee pursuant to and in accordance with Article Eight (so long as the funding of such trust did not violate the provisions of this Article Eleven) or (iii) the application by the Trustee of any other 40 moneys deposited with it for the purpose of making such payments of principal of on and interest on the Securities to the holders entitled thereto unless at least two Business Days prior to the date upon which such payment becomes due and payable, the Trustee shall have received the written notice provided for in Section 11.06. The Company shall give prompt written notice to the Trustee of any dissolution, winding up, liquidation or reorganization of the Company. 41 SIGNATURES IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed, all as of the date first above written. Dated: April 10, 2002 STANDARD PACIFIC CORP. By: /s/ Andrew H. Parnes ------------------------------------ Name: Andrew H. Parnes Title: Senior Vice President-Finance and Chief Financial Officer Dated: April 10, 2002 Bank One Trust Company, N.A., Trustee By: /s/ Sharon McGrath ------------------------------------ Name: Sharon McGrath Title: Vice President 42 EXHIBIT A No. CUSIP No.: _______ [Title of Security] STANDARD PACIFIC CORP., a Delaware corporation promises to pay to or registered assigns the principal sum of ______________________ Dollars/1/ on [maturity date] Interest Payment Dates: and Record Dates: and Authenticated: Dated: Standard Pacific Corp. (Seal) By _____________________________ Title: By _____________________________ Title: _________________, as Trustee, certifies that this is one of the Securities referred to in the within mentioned Indenture. By _____________________________ Authorized Signatory /1/ Or other currency. Insert corresponding provisions on reverse side of Security in respect of foreign currency denomination or interest payment requirement. A-1 STANDARD PACIFIC CORP. [Title of Security] 1. Interest. STANDARD PACIFIC CORP. (the "Company"), a Delaware corporation, promises to pay interest on the principal amount of this Security at the rate per annum shown above. The Company will pay interest semiannually on __________________ and ______________ of each year until the principal is paid or made available for payment. Interest on the Securities will accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid, from _______________, 20__, provided that, if there is no existing default in the payment of interest, and if this Security is authenticated between a record date referred to on the face hereof and the next succeeding interest payment date, interest shall accrue from such interest payment date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. Method of Payment. The Company will pay interest on the Securities (except defaulted interest, if any, which will be paid on such special payment date to Holders of record on such special record date as may be fixed by the Company) to the persons who are registered Holders of Securities at the close of business on the [Insert record dates]. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. 3. Paying Agent and Registrar. Initially, _________________________ (the "Trustee") will act as Paying Agent and Registrar. The Company may change or appoint any Paying Agent, Registrar or co-Registrar without notice. The Company or any of its Subsidiaries may act as Paying Agent, Registrar or co-Registrar. 4. Indenture. The Company issued the Securities under an Indenture dated as of ______________, 1998 ("Indenture") between the Company and the Trustee. The terms of the Securities include those stated in the Indenture (including those terms set forth in the Authorizing Resolution or supplemental indenture pertaining to the Securities of the Series of which this Security is a part) and those made part of the Indenture by reference to the Trust Indenture Act of 1939 ("TIA") as in effect on the date of the Indenture. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the TIA for a statement of them. The Company will furnish to any Securityholder upon written request and without charge a copy of the Indenture and the applicable Authorizing Resolution or supplemental indenture. Requests may be made to: Standard Pacific Corp., 15326 Alton Parkway, Irvine, California 92618, Attention: Secretary. A-2 5. Optional Redemption./1/ The Company may redeem the Securities at any time on or after ______________, ____, in whole or in part, at the following redemption prices (expressed as a percentage of their principal amount) together with interest accrued and unpaid to the date fixed for redemption: If redeemed during the Twelve-Month period commencing on ___________ and ending on ___________ in each of the following years Percentage --------------- ---------- [Insert provisions relating to redemption at option of Holders, if any] Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his registered address. Securities in denominations larger than $1,000 may be redeemed in part. On and after the redemption date interest ceases to accrue on Securities or portions of them called for redemption, provided that if the Company shall default in the payment of such Security at the redemption price together with accrued interest, interest shall continue to accrue at the rate borne by the Securities. 6. Mandatory Redemption./2/ The Company shall redeem _____% of the aggregate principal amount of Securities originally issued under the Indenture on each of _______ and _______, which redemptions are calculated to retire ___% of the Securities originally issued prior to maturity. Such redemptions shall be made at a redemption price equal to 100% of the principal amount thereof, together with accrued interest to the redemption date. The Company may reduce the principal amount of Securities to be redeemed pursuant to this Paragraph 6 by the principal amount of any Securities previously redeemed, retired or acquired, otherwise than pursuant to this Paragraph 6, that the Company has delivered to the Trustee for cancellation and not previously credited to the Company's obligations under this Paragraph 6. Each such Security shall be received and credited for such purpose by the Trustee at the redemption price and the amount of such mandatory redemption payment shall be reduced accordingly. 7. Denominations, Transfer, Exchange./3/ The Securities are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. A Holder may transfer or exchange Securities by presentation of _____________ /1/ If applicable. Insert different or additional redemption terms, as applicable. /2/ If applicable. Insert different or additional redemption terms, as applicable. /3/ If applicable, insert different or additional denomination and multiples. A-3 such Securities to the Registrar or a co-Registrar with a request to register the transfer or to exchange them for an equal principal amount of Securities of other denominations. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not transfer or exchange any Security selected for redemption, except the unredeemed part thereof if the Security is redeemed in part, or transfer or exchange any Securities for a period of 15 days before a selection of Securities to be redeemed. 8. Persons Deemed Owners. The registered Holder of this Security shall be treated as the owner of it for all purposes. 9. Unclaimed Money. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent will pay the money back to the Company at its request. After that, Holders entitled to the money must look to the Company for payment unless an abandoned property law designates another person. 10. Amendment, Supplement, Waiver. Subject to certain exceptions, the Indenture or the Securities may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the outstanding Securities of each Series affected by the amendment, and any past default or compliance with any provision relating to any Series of the Securities may be waived in a particular instance with the consent of the Holders of a majority in principal amount of the outstanding Securities of such Series./4/ Without the consent of any Securityholder, the Company and the Trustee may amend or supplement the Indenture or the Securities to cure any ambiguity, defect or inconsistency, to provide for uncertificated Securities in addition to or in place of certificated Securities, to create a Series and establish its terms, or to make any other change, provided such action does not adversely affect the rights of any Securityholder. 11. Successor Corporation. When a successor corporation assumes all the obligations of its predecessor under the Securities and the Indenture, the predecessor corporation will be released from those obligations./5/ 12. Trustee Dealings With Company. ______________________ /4/ If different terms apply, insert a brief summary thereof. /5/ If different terms apply, insert a brief summary thereof. A-4 ________________________________, the Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its affiliates, and may otherwise deal with the Company or its affiliates, as if it were not Trustee. 13. No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of, such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 14. Discharge of Indenture. The Indenture contains certain provisions pertaining to defeasance, which provisions shall for all purposes have the same effect as if set forth herein. 15. Authentication. This Security shall not be valid until the Trustee signs the certificate of authentication on the other side of this Security. 16. Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to Minors Act). ASSIGNMENT FORM If you the Holder want to assign this Security, fill in the form below: I or we assign and transfer this Security to (Insert assignee's social ------------------------ security or tax ID number) (Print or type assignee's name, address, and zip - ------------------------- ----------------------------------------------- code) and irrevocably appoint __________________________, agent to transfer this - ---- Security on the books of the Company. The agent may substitute another to act for him. Date: ________________ Your signature: (Sign exactly as your name appears on the other side of this Security) Signature Guarantee:______________________ A-5
EX-4.2 5 dex42.txt FIRST SUPPLEMENTAL INDENTURE Exhibit 4.2 ================================================================================ FIRST SUPPLEMENTAL INDENTURE by and between STANDARD PACIFIC CORP. and BANK ONE TRUST COMPANY, N.A., as Trustee ------------------------------ Dated as of April 10, 2002 ------------------------------ AUTHORIZING THE ISSUANCE OF 9 1/4 % SENIOR SUBORDINATED NOTES DUE 2012 (Supplemental to the Indenture dated as of April 10, 2002) ================================================================================
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
i
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
ii STANDARD PACIFIC CORP. FIRST SUPPLEMENTAL INDENTURE ---------------------------- 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: ------------------- 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 1 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 2 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 3 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. 4 "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 5 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. 6 "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. 7 "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 ----- "9 1/4% Senior Subordinated Notes due 2012." (b) Aggregate Principal Amount. On April 15, 2002, which shall be the -------------------------- 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 8 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 ----------------- 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 -------------------------------- 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 ---------------- payable, unless accelerated pursuant to the Indenture, is April 15, 2012. (f) Rate of Interest; Interest Payment Dates; Regular Record Dates; Overdue ----------------------------------------------------------------------- Principal and Interest. - ----------------------- (i) Rate of Interest. The principal amount of each of the Notes shall bear simple interest at the rate of 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 ------------------------------------------------------------------- Company. - ------- (i) Place of Payment. Payment of the principal of and interest on the Notes will be made at the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, or at any other office or agency designated by the Company for such purpose; provided, however, that -------- ------- at the option of the Company, payment of interest due (other than at Maturity or upon redemption) may be made by check mailed to the address of the person entitled thereto as such address shall appear in the register of Securities. (ii) Registration of Exchange and Transfer. Notes may be presented for exchange and registration of transfer at the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, or at the office of any transfer agent hereafter designated by the Company for such purpose. (iii) Notices to Company. Notices and demands to or upon the Company in respect to the Notes and the Indenture may be served at Standard Pacific Corp., 15326 Alton Parkway, Irvine, California 92618, 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, Salomon Smith Barney 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. 11 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 12 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% 13 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 14 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 -------- ------- 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 - ------- 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 ---- ----- 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. 17 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/ Andrew H. Parnes --------------------------------- Andrew H. Parnes Senior Vice President-Finance and Chief Financial Officer By: /s/ Clay A. Halvorsen --------------------------------- Clay A. Halvorsen Senior Vice President, General Counsel and Secretary BANK ONE TRUST COMPANY, N.A., as Trustee By: /s/ Sharon McGrath --------------------------------- Name: Sharon McGrath 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 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR THE REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. No. 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., 15326 Alton Parkway, Irvine, California 92618, 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)
EX-5.1 6 dex51.txt OPINION LETTER OF GIBSO, DUNN & CRUTCHER LLP Opinion of Gibson, Dunn & Crutcher LLP Exhibit 5.1 April 12, 2002 (213) 229-7000 C 87007-01408 Standard Pacific Corp. 15326 Alton Parkway Irvine, California 92618 Re: Standard Pacific Corp. Dear Ladies and Gentlemen: We have acted as counsel to Standard Pacific Corp., a Delaware corporation (the "Company"), in connection with the issuance and sale by the company of $150,000,000 principal amount of its 9 1/4% Senior Subordinated Notes due 2012 (the "Securities") pursuant to an indenture, dated as of April 10, 2002 (the "Supplemental Indenture"), between the Company and Bank One Trust Company, N.A. as trustee (the "Trustee"). The Securities are to be issued and offered from time to time pursuant to a Registration Statement on Form S-3, File No. 333-52732 (the "Registration Statement"), filed with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Act of 1933, as amended (the "Securities Act"), as supplemented by a Prospectus Supplement, filed with the Commission on April 12, 2002. The Securities are to be publicly offered and sold by Credit Suisse First Boston Corporation, Banc of America Securities LLC, Salomon Smith Barney Inc. and Banc One Capital Markets, Inc. (collectively, the "Underwriters"). The Securities will be acquired by the Underwriters pursuant to the terms of an Underwriting Agreement (the "Underwriting Agreement"), dated April 10, 2002 between the Company and the Underwriters. For the purposes of the opinions set forth below, we have examined and are familiar with the proceedings taken and proposed to be taken by the Company in connection with the issuance and sale of the Securities. We have also made such other factual and legal inquiries and examinations as we deemed necessary and appropriate under the circumstances. In arriving at the following opinions, we have relied, among other things, upon our examination of such corporate records of the Company and certificates of officers of the Company and of public officials and such other documents as we have deemed appropriate. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such copies. With respect to agreements and instruments executed by natural persons, we have assumed the legal competency of such persons. Based upon the foregoing examination and in reliance thereon, and subject to the assumptions, qualifications and limitations set forth herein and relying on statements of fact contained in the documents that we have examined and subject to the completion of the proceedings to be taken by the Company, the Trustee and the Underwriters prior to the sale of the Securities, it is our opinion that the Securities, when duly authorized, executed, issued, delivered and paid for in accordance with the terms of the Supplemental Indenture and the Underwriting Agreement (assuming due execution and delivery of the Supplemental Indenture and authentication of the Securities by the Trustee and payment for the Securities by the Underwriters), will be validly issued and binding obligations of the Company. Our opinion is subject to (i) the effect of applicable bankruptcy, insolvency, reorganization, moratorium, arrangement and other laws affecting creditor's rights, including, without limitation, the effect of statutory or other laws regarding fraudulent conveyances, fraudulent transfers and preferential transfers; (ii) the limitations imposed by general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief regardless of whether considered in a proceeding in equity or at law; and (iii) our assumption that there exist no agreements, understandings or negotiations among the parties to the Supplemental Indenture or to the Underwriting Agreement that would modify the terms of either thereof or the respective rights or obligations of the parties thereunder. We render no opinion herein as to matters involving the laws of any jurisdiction other than the present laws of the United States of America and the present laws of the State of New York and the present judicial interpretations thereof and to the facts as they presently exist. In rendering this opinion, we assume no obligation to revise or supplement this opinion should current laws, or the interpretations thereof, be changed. We consent to the filing of this opinion as an exhibit to the Registration Statement, and we further consent to the use of our name under the caption "Legal Matters" in the Prospectus Supplement that forms a part of the Registration Statement. In giving these consents, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations promulgated by the Commission under the Securities Act. Very truly yours, /s/ Gibson, Dunn & Crutcher LLP GIBSON, DUNN & CRUTCHER LLP 2 EX-12.1 7 dex121.txt COMPUTATION OF RATIO OF EARNINGS Exhibit 12.1 Standard Pacific Corp. and Subsidiaries Ratio of Earnings to Fixed Charges - Continuing Operations (Dollars in thousands)
For the Year Ended December 31, -------------------------------------------------------------- 2001 2000 1999 1998 1997 ---------- ---------- ---------- ---------- ---------- Fixed charges: Total Interest Incurred $ 49,478 $ 39,627 $ 35,151 $ 29,010 $ 17,026 Interest factor in lease rentals 400 400 400 400 400 ---------- ---------- ---------- ---------- ---------- Fixed Charges $ 49,878 $ 40,027 $ 35,551 $ 29,410 $ 17,426 ========== ========== ========== ========== ========== Earnings & Adjustments: Income from continuing operations before income taxes $ 184,476 $ 166,147 $ 114,063 $ 80,894 $ 41,046 Add (Deduct): Noncash charges (1) 5,400 - 650 - - Income from unconsolidated joint ventures (26,675) (16,478) (6,201) (4,158) (3,787) Cash distributions from unconsolidated joint ventures 26,533 7,136 6,363 4,270 1,197 Fixed charges, above 49,878 40,027 35,551 29,410 17,426 Capitalized interest (45,320) (36,028) (33,632) (27,842) (12,044) Amortization of previously capitalized interest 39,990 33,854 27,401 26,399 23,475 ---------- ---------- ---------- ---------- ---------- Adjusted Earnings $ 234,282 $ 194,658 $ 144,195 $ 108,973 $ 67,313 ========== ========== ========== ========== ========== Ratio of Earnings to Fixed Charges 4.7 4.9 4.1 3.7 3.9 ========== ========== ========== ========== ==========
- ------------------------- (1) Nonrecurring noncash charges of $5.4 million in 2001 related to a noncash write-down of one homebuilding project in the San Francisco Bay Area to its estimated fair value and a nocash charge of $650,000 in 1999 related to the write-down of leasehold improvements.
EX-25.1 8 dex251.txt STATEMENT OF ELIGIBILITY OF TRUSTEE ON FORM T-1 Exhibit 25.1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM T-1 -------- STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) __ BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION (Exact name of trustee as specified in its charter) A National Banking Association 31-0838515 (I.R.S. employer identification number) 100 East Broad Street, Columbus, Ohio 43271-0181 (Address of principal executive offices) (Zip Code) Bank One Trust Company, National Association 1 Bank One Plaza Chicago, Illinois 60670 Attn: Sandra L. Caruba, First Vice President, (312) 336-9436 (Name, address and telephone number of agent for service) STANDARD PACIFIC CORP. (Exact name of obligor as specified in its charter) Delaware 33-0475989 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification number) 15326 Alton Parkway 92618-2338 Irvine, California (ZIP Code) (Address of principal executive offices) Debt Securities (Title of Indenture Securities) Item 1. General Information. Furnish the following information as to ------------------- the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Comptroller of Currency, Washington, D.C.; Federal Deposit Insurance Corporation, Washington, D.C.; The Board of Governors of the Federal Reserve System, Washington D.C. (b) Whether it is authorized to exercise corporate trust powers. The trustee is authorized to exercise corporate trust powers. Item 2. Affiliations With the Obligor. If the obligor is an affiliate ----------------------------- of the trustee, describe each such affiliation. No such affiliation exists with the trustee. Item 16. List of exhibits. List below all exhibits filed as a part of ---------------- this Statement of Eligibility. 1. A copy of the articles of association of the trustee now in effect.* 2. A copy of the certificate of authority of the trustee to commence business.* 3. A copy of the authorization of the trustee to exercise corporate trust powers.* 4. A copy of the existing by-laws of the trustee.* 5. Not Applicable. 6. The consent of the trustee required by Section 321(b) of the Act. 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. 8. Not Applicable. 9. Not Applicable. Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bank One Trust Company, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago and State of Illinois, on the 10th day of April, 2002. Bank One Trust Company, National Association, Trustee By /s/Sandra L. Caruba Sandra L. Caruba First Vice President *Exhibits 1, 2, 3, and 4 are herein incorporated by reference to Exhibits bearing identical numbers in Item 16 of the Form T-1 of Bank One Trust Company, National Association, filed as Exhibit 25 to the Registration Statement on Form S-4 of U S WEST Communications, Inc., filed with the Securities and Exchange Commission on March 24, 2000 (Registration No. 333-32124). EXHIBIT 6 THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(b) OF THE ACT April 10, 2002 Securities and Exchange Commission Washington, D.C. 20549 Ladies and Gentlemen: In connection with the qualification of an indenture between Standard Pacific Corp. and Bank One Trust Company, National Association, as Trustee, the undersigned, in accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that the reports of examinations of the undersigned, made by Federal or State authorities authorized to make such examinations, may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Very truly yours, Bank One Trust Company, National Association By: /s/Sandra L. Caruba Sandra L. Caruba First Vice President EXHIBIT 7 Legal Title of Bank: Bank One Trust Company, N.A. Call Date: 12/31/01 State #: 391581 FFIEC 041 Address: 100 Broad Street Vendor ID: D Cert #: 21377 Page RC-1 City, State Zip: Columbus, OH 43271 Transit #: 04400003
Consolidated Report of Condition for Insured Commercial and State-Chartered Savings Banks for December 31, 2001 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding of the last business day of the quarter. Schedule RC--Balance Sheet
Dollar Amounts in thousands C300 ------- ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): RCON a. Noninterest-bearing balances and currency and coin(1) ....................... 0081 285,199 1.a b. Interest-bearing balances(2) ................................................ 0071 0 1.b 2. Securities a. Held-to-maturity securities(from Schedule RC-B, column A) ................... 1754 0 2.a b. Available-for-sale securities (from Schedule RC-B, column D) ................ 1773 336 2.b 3. Federal funds sold and securities purchased under agreements to resell .......................................................................... 1350 1,466,628 3. 4. Loans and lease financing receivables: (from Schedule RC-C): RCON ---- a. Loans and leases held for sale .............................................. 5369 0 4.a b. Loans and leases, net of unearned income .................................... B528 195,551 4.b c. LESS: Allowance for loan and lease losses ................................... 3123 292 4.c d. Loans and leases, net of unearned income and allowance (item 4.b minus 4.c) ........................................................ B529 195,259 4.d 5. Trading assets (from Schedule RC-D) ............................................. 3545 0 5. 6. Premises and fixed assets (including capitalized leases) ........................ 2145 13,065 6. 7. Other real estate owned (from Schedule RC-M) .................................... 2150 0 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) .................................................. 2130 0 8. 9. Customers' liability to this bank on acceptances outstanding .................... 2155 0 9. 10. Intangible assets a. Goodwill .................................................................... 3163 0 10.a b. Other intangible assets (from Schedule RC-M) ................................ 0426 9,224 10.b 11. Other assets (from Schedule RC-F) ............................................... 2160 250,027 11. 12. Total assets (sum of items 1 through 11) ........................................ 2170 2,219,738 12.
(1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. Legal Title of Bank: Bank One Trust Company, N.A. Call Date: 12/31/01 State #: 391581 FFIEC 041 Address: 100 East Broad Street Vendor ID: D Cert #" 21377 Page RC-2 City, State Zip: Columbus, OH 43271 Transit #: 04400003
Schedule RC-Continued
Dollar Amounts in Thousands --------- LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C RCON ---- from Schedule RC-E) .......................................................... 2200 1,957,028 13.a (1) Noninterest-bearing(1) .................................................. 6631 1,378,041 13.a1 (2) Interest-bearing ........................................................ 6636 587,987 13.a2 b. Not applicable 14. Federal funds purchased and securities sold under agreements to repurchase ................................................................ RCFD 2800 0 14. 15. Trading Liabilities(from Schedule RC-D) ...................................... RCFD 3548 0 15. 16. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) (from Schedule RC-M) ................... 3190 0 16. 17. Not applicable 18. Bank's liability on acceptances executed and outstanding ..................... 2920 0 18. 19. Subordinated notes and debentures (2) ........................................ 3200 0 19. 20. Other liabilities (from Schedule RC-G) ....................................... 2930 72,264 20. 21. Total liabilities (sum of items 13 through 20) ............................... 2948 2,029,292 21. 22. Minority interest in consolidated subsidiaries ............................... 3000 0 22. EQUITY CAPITAL 23. Perpetual preferred stock and related surplus ................................ 3838 0 23. 24. Common stock ................................................................. 3230 800 24. 25. Surplus (exclude all surplus related to preferred stock) ..................... 3839 45,157 25. 26. a. Retained earnings ....................................................... 3632 144,485 26.a b. Accumulated other comprehensive income (3) .............................. B530 4 26.b 27. Other equity capital components (4) .......................................... A130 0 27. 28. Total equity capital (sum of items 23 through 27) ............................ 3210 190,446 28. 29. Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28) ........................................ 3300 2,219,738 29.
Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by independent external Number auditors as of any date during 2000 .......................... RCFD 6724 N/A M.1.
1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified chartering public accounting firm which submits a report on the bank 2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which external submits a report on the consolidated holding company (but not on the bank separately) 3 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4. = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 5 = Review of the bank's financial statements by external auditors 6 = Compilation of the bank's financial statements by auditors 7 = Other audit procedures (excluding tax preparation work) 8 = No external audit work (1) Includes total demand deposits and noninterest-bearing time and savings deposits. (2) Includes limited-life preferred stock and related surplus. (3) Includes net unrealized holding gains (losses) on available-for-sale securities, accumulated net gains (losses) on cash flow hedges, and minimum pension liability adjustments. (4) Includes treasury stock and unearned Employee Stock Ownership Plan shares.
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