EXHIBIT 10.1
FIRST AMENDMENT OF REVOLVING
CREDIT AGREEMENT
THIS FIRST AMENDMENT OF REVOLVING
CREDIT AGREEMENT ( this “ Amendment ”) is
dated as of May 5, 2006, and entered into by and among
STANDARD PACIFIC CORP. , a Delaware corporation (“
Borrower ”), BANK OF AMERICA, N.A. , a
national banking association, as Administrative Agent for the
Lenders defined below (in such capacity, together with its
successors and assigns, “ Administrative Agent
”), and each Lender that is a signatory to this
Amendment.
R
E C I
T A L S
A. Reference is hereby made to that
certain Revolving Credit Agreement dated as of August 31,
2005, executed by Borrower, Administrative Agent, and the Lenders
defined therein (the “ Credit Agreement
”) pursuant to which such Lenders extended to Borrower a
$925,000,000 revolving credit facility.
B. Capitalized terms used herein
shall, unless otherwise indicated, have the respective meanings set
forth in the Credit Agreement.
C. Borrower, Administrative Agent,
Issuing Bank, and the Lenders that are signatory to this Amendment
desire to modify certain provisions contained in the Credit
Agreement subject to the terms and conditions set forth
herein.
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
1. Amendments to the Credit
Agreement.
(a)
Section 1.1 is amended to add the following definitions
thereto in the correct alphabetical order:
“ Aggregate Majority
Lenders ” means, as of any date of determination,
(a) prior to the termination of the Commitments of Lenders
pursuant to Section 9.2 , Lenders and Term A
Lenders holding in the aggregate at least sixty-six and two-thirds
percent (66-2/3%) of the sum of (i) the Total Aggregate
Commitment plus (ii) the aggregate unpaid principal
amount of the Term Loans under and as defined in the Term A Credit
Agreement, and (b) on and after the termination of the
Commitments pursuant to Section 9.2 , Lenders
and Term A Lenders holding in the aggregate at least sixty-six and
two-thirds percent (66-2/3%) of the sum of (i) the then
aggregate unpaid principal amount of the Loans plus
(ii) the aggregate unpaid principal amount of the Term Loans
under the Term A Credit Agreement.
“ Collateral
Agent ” means Bank of America, in its capacity as
Collateral Agent under the Security Agreement and any related
document, or any successor in such capacity.
“ Collateral Agency
Agreement ” means the Collateral Agent and
Intercreditor Agreement dated of even date with the Security
Agreement, by and among Bank of America, as Collateral Agent, Bank
of America in its capacity as Administrative Agent under this
Agreement, the Term A Credit Agreement, and the Term B Credit
Agreement,
JPMorgan Trust Company, National
Association, Borrower, and Subsidiaries of Borrower party thereto,
as such agreement may be amended, modified, renewed, restated, or
replaced.
“ Hedge
Agreement ” means any documents evidencing any Swap
Contract among Borrower or any Affiliate of Borrower, on the one
hand, and any Person who is, or at the time entered into was, a
Lender or an Affiliate of a Lender, on the other hand, relating to
the Obligations.
“ Security
Agreement ” means the Pledge Agreement dated as of
May 5, 2006, executed by Borrower and certain of its
Subsidiaries in favor of Bank of America, as Collateral Agent, for
the ratable benefit of the holders of “ Qualified
Obligations ” as defined therein, as such agreement may
be amended, modified, renewed, restated, supplemented, or
replaced.
“ Swap Contract
” means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts,
equity or equity index swaps or options, bond or bond price or bond
index swaps or options or forward bond or forward bond price or
forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions,
cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of
any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by
or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, which are
subject to the terms and conditions of, or governed by, any form of
master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange
Master Agreement, or any other master agreement, including any such
obligations or liabilities under any such master
agreement.
“ Term A Credit
Agreement ” means that certain Term Loan A Credit
Agreement dated as of May 5, 2006, by and among Borrower, Bank
of America, as administrative agent, and each lender party thereto,
as such agreement may be amended, modified, renewed, restated, or
replaced.
“ Term A Lenders
” means, as of any date of determination, each of the “
Lenders ” (as defined in the Term A Credit Agreement)
party to the Term A Credit Agreement as of such date.
“ Term B Credit
Agreement ” means that certain Term Loan B Credit
Agreement dated as of May 5, 2006, by and among Borrower, Bank
of America, as administrative agent, and each lender party thereto,
as such agreement may be amended, modified, renewed, restated, or
replaced.
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(b)
Section 1.1 is hereby amended to delete the definitions of
“ Fee Letter ,” “ Loan
Documents ,” and “ Subordinated
Debt ” in their entirety and replace such definitions
with the following:
“ Fee Letter
” means the letter agreement, dated March 17, 2006,
among Borrower, Administrative Agent, and Banc of America
Securities LLC.
“ Loan Documents
” means, collectively, this Agreement, each Note, the
Guaranty, the Guaranty of the Subsidiary Letters of Credit, the
Contribution Agreement, the Fee Letter, each Issuer Document, each
Letter of Credit, and the Security Agreement. Solely for the
purpose of the Guaranty, “ Loan Documents
” shall include each Hedge Agreement.
“ Subordinated
Debt ” means: (a) Borrower’s 9-1/4% Senior
Subordinated Notes due 2012; and (b) such indebtedness of
Borrower that is subordinated to the Obligations pursuant to terms
and conditions approved in writing by the Aggregate Majority
Lenders, and as to which Administrative Agent has received a legal
opinion, in form and substance reasonably satisfactory to
Administrative Agent, confirming the subordinate status of such
indebtedness in relation to the Obligations.
(c)
Section 1.3(b) is hereby deleted in its entirety and replaced
with the following:
(b) Notwithstanding
Section 1.3(a) , if at any time any change in
GAAP or in any SEC rules and regulations (or the application of
such rules and regulations to Borrower) would affect the
computation of any financial ratio, covenant, or requirement set
forth in any Loan Document, and either Borrower or the Aggregate
Majority Lenders shall so request, then Administrative Agent,
Aggregate Majority Lenders and Borrower shall negotiate in good
faith to amend such ratio, covenant, or requirement to preserve the
original intent thereof in light of such change (subject to the
approval of the Aggregate Majority Lenders); provided that
until so amended (i) such ratio, covenant, or requirement
shall continue to be computed in accordance with GAAP without
giving effect to such change therein, and (ii) Borrower shall
provide to Administrative Agent and Lenders financial statements
and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after
giving effect to such change.
(d)
Section 3.3 is hereby deleted in its entirety and replaced
with the following:
3.3 Eurodollar Borrowing
.
(a) Each request by Borrower for a
Eurodollar Borrowing shall be made pursuant to a Request for
Borrowing received by Administrative Agent, at Administrative
Agent’s Lending Office, not later than 12:00 p.m. at
least three (3) Business Days before the first (1
st
) day of the
applicable Interest Period. Administrative Agent will notify each
Lender of its receipt of a Request for Borrowing in accordance with
Section 3.1(f) .
(b) At or about 12:00 p.m. two
(2) Business Days prior to the first (1
st
) day of the
applicable Interest Period (for either an initial advance of a
Eurodollar Borrowing or any requested continuation thereof),
Administrative Agent shall determine the applicable Eurodollar Rate
(which determination shall be conclusive in the absence of manifest
error) and shall promptly give notice of the same to Borrower and
Lenders by telephone or telecopier.
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(c) With respect to each request by
Borrower for a Eurodollar Borrowing, upon fulfillment of the
applicable conditions set forth in Article 6 , a
Eurodollar Borrowing shall become effective on the first (1
st
) day of the
applicable Interest Period.
(d) Administrative Agent in its sole
discretion may require Borrower to request any Eurodollar Borrowing
of $100,000,000 or more, any redesignation of a Reference Rate
Borrowing of $100,000,000 or more as a Eurodollar Borrowing, or any
continuation of any Eurodollar Borrowing of $100,000,000 or more at
a time or on a day which is one (1) Business Day earlier than
the deadline stated above (or for continuations, stated in clause
(e) below, or for redesignations of Reference Rate Borrowings,
stated in Section 3.4 ) for making such a
request.
(e) If any Eurodollar Borrowing is
not repaid on the last day of the applicable Interest Period, then
Borrower may request that all or a portion of such Eurodollar
Borrowing be continued as a Eurodollar Borrowing by notice to
Administrative Agent, at Administrative Agent’s Lending
Office, not later than 12:00 p.m. at least three
(3) Business Days before the first (1st) day of the
Interest Period requested for such continued Eurodollar Borrowing;
provided that the Interest Period for such continued
Eurodollar Borrowing shall end on or before the Maturity Date. If
no such request for continuation is made, such Eurodollar Borrowing
shall automatically be redesignated as a Reference Rate Borrowing
on such date.
(f) Nothing contained herein shall
require Lenders to fund any Eurodollar Borrowing in the London
interbank eurodollar market.
(e)
Section 3.4(a) is hereby deleted in its entirety and replaced
with the following:
(a) If any Eurodollar Borrowing is
not repaid on the last day of the applicable Interest Period, or
continued pursuant to Section 3.3 , then such
Borrowing automatically shall be redesignated as a Reference Rate
Borrowing on such date.
(f)
Section 3.5(a) is hereby deleted in its entirety and replaced
with the following:
(a) Borrowing Base Certificate;
Approval . The Borrowing Base shall be calculated at the times
and in the manner set forth in this
Section 3.5(a) :
(i) Within forty-five (45) days
after the end of each calendar quarter, and at such other times as
the Aggregate Majority Lenders may reasonably require (provided
that such calculation is to be made as of the last day of a
calendar month), Borrower shall provide Administrative Agent with a
Borrowing Base Certificate (and Administrative Agent will promptly
forward to each Lender) showing Borrower’s calculations of
the components of the Borrowing Base and such data supporting such
calculations as the Aggregate Majority Lenders may require. The
Aggregate Majority Lenders shall have a period of thirty
(30) days following receipt of a Borrowing Base Certificate to
notify Administrative Agent (who shall notify Borrower) of the
Aggregate Majority Lenders’ approval or disapproval thereof.
Failure of the Aggregate
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Majority Lenders to so notify
Administrative Agent and Administrative Agent to so notify Borrower
within such thirty (30) day period shall be deemed approval
and such Borrowing Base as set forth in such Borrowing Base
Certificate shall be effective as of the date approved (or deemed
approved) by the Aggregate Majority Lenders. The amount so approved
(or deemed approved) shall constitute the Borrowing Base until such
time as the Borrowing Base is redetermined in accordance with this
Section 3.5(a) .
(ii) In the event that
Administrative Agent (as requested by the Aggregate Majority
Lenders) timely notifies Borrower of disapproval of a Borrowing
Base Certificate, then Administrative Agent shall, at the same
time, notify Borrower in writing of the amount of the Borrowing
Base as reasonably determined by the Aggregate Majority Lenders and
the basis of such determination, and the effective date thereof
(which shall be the date of the giving of such notice by
Administrative Agent), and such amount shall thereupon and
thereafter constitute the Borrowing Base which shall remain in
effect until such time as the Borrowing Base is redetermined in
accordance with this Section 3.5(a) . The
Aggregate Majority Lenders and Borrower shall each cooperate in
good faith with the other in the calculation of the Borrowing Base
in circumstances where the Aggregate Majority Lenders disapprove a
Borrowing Base Certificate prepared by Borrower.
(iii) Each determination of the
Borrowing Base in accordance with this
Section 3.5(a) shall be binding and conclusive
upon the parties hereto, and provided that the Aggregate Majority
Lenders are not bound to rely on information and figures provided
by Borrower if the Aggregate Majority Lenders determine in good
faith that it would be inappropriate to do so. Nothing contained
herein shall be deemed to restrict Borrower from submitting
additional Borrowing Base Certificates to Administrative Agent for
the Aggregate Majority Lenders’ approval at times other than
those required hereunder.
(g)
Section 3.10(b) is hereby deleted in its entirety and replaced
with the following:
(b) At any time after the Closing
Date and prior to the date that is ninety (90) days prior to
the Maturity Date, Administrative Agent shall, without the consent
of Lenders (except as specified in this
Section 3.10 ), from time to time at the request
of Borrower, increase the Total Aggregate Commitment by
(i) admitting additional Lenders hereunder (each a “
Subsequent Lender ”), or (ii) increasing
the Commitment of any Lender (each an “ Increasing
Lender ”), subject to the following
conditions:
(A) each Subsequent Lender is an
Eligible Assignee;
(B) Borrower executes (x) a new
Note payable to the order of a Subsequent Lender, or (y) a
replacement Note payable to the order of an Increasing
Lender;
(C) each Subsequent Lender executes
and delivers to Administrative Agent a Joinder Agreement in the
form of Exhibit D ;
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(D) each Increasing Lender executes
and delivers to Administrative Agent an increase certificate
substantially in the form of Exhibit K ;
(E) after giving effect to the
admission of any Subsequent Lender or the increase in the
Commitment of any Increasing Lender, the Total Aggregate Commitment
does not exceed $1,500,000,000 (less the amount of any reduction
and termination of the Total Aggregate Commitment pursuant to
Section 4.17 );
(F) each increase in the Total
Aggregate Commitment shall be in the amount of $10,000,000 or a
greater integral multiple of $1,000,000;
(F) no admission of any Subsequent
Lender shall increase the Commitment of any existing Lender without
the written consent of such Lender;
(G) no Default or Event of Default
exists;
(H) no Lender shall be an Increasing
Lender without the written consent of such Lender; and
(I) Administrative Agent and the
applicable Subsequent Lender or Increasing Lender, as the case may
be, are satisfied that after giving effect to the increase in the
Total Aggregate Commitment, the Obligations constitute
“senior debt” under all Subordinated Debt of
Borrower.
After the admission of any
Subsequent Lender or increase in the Commitment of any Increasing
Lender, Administrative Agent shall promptly provide to each Lender
and to Borrower a new Schedule 1.1(a) to this
Agreement (and each Lender acknowledges that its percentage
obligation under such Schedule will change in accordance with its
Pro Rata Share of the increased Total Aggregate Commitment). In the
event that there are any Loans outstanding after giving effect to
an increase in the Total Aggregate Commitment pursuant to this
Section 3.10 , upon notice from Administrative
Agent to each Lender, the amount of such Loans owing to each Lender
shall be appropriately adjusted to reflect the new Pro Rata Shares
of each Lender, and Borrower shall pay any amounts required
pursuant to Section 4.7 .
(h) Article 5
is hereby deleted in its entirety
and replaced with the following:
ARTICLE 5: SECURITY . The
Obligations shall be secured by the liens granted by Borrower
pursuant to the Security Agreement, until such liens are released
pursuant to the terms thereof, and any other liens granted to
Administrative Agent for the ratable benefit of Lenders pursuant to
the terms of this Agreement.
(i)
Section 7.4(a) is hereby deleted in its entirety and replaced
with the following:
(a) Exhibit J
correctly sets forth, as of the last day of the most recent fiscal
quarter of Borrower, the names and jurisdictions of incorporation
or formation of all Subsidiaries, Homebuilding Joint Ventures, and
other entities in which Borrower has a direct or indirect ownership
interest (but excluding publicly-traded Persons in which Borrower,
directly or indirectly, holds less than a five percent
(5%) ownership interest).
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Except as described in Exhibit
J , as of the end of the most recent fiscal quarter of
Borrower, excluding publicly-traded Persons in which Borrower,
directly or indirectly, holds less than a five percent
(5%) ownership interest, Borrower does not own any capital
stock or ownership interest in any Person other than its
Subsidiaries and Homebuilding Joint Ventures. All outstanding
shares of capital stock or ownership interests, as the case may be,
of each Subsidiary (other than an Excluded Subsidiary) and
Homebuilding Joint Venture that are owned by Borrower or any
Subsidiary are (i) owned of record and beneficially by
Borrower and/or by one (1) or more Subsidiaries, free and
clear of all material liens, claims, encumbrances, and rights of
others (other than liens permitted under
Section 8.11 or other liens that secure the
Loans on a pari passu basis with other Senior Unsecured
Homebuilding Debt), and are (ii) duly authorized, validly
issued, fully paid, nonassessable (except for capital calls or
contribution requirements in connection with ownership interests in
Homebuilding Joint Ventures), and issued in compliance with all
applicable state and federal securities and other Laws, except
where the failure to comply could not reasonably be expected to
have a Material Adverse Effect. Borrower may update Exhibit
J from time to time by sending written notice to
Administrative Agent.
(j)
Section 8.1(c) is hereby deleted in its entirety and replaced
with the following:
(c) as soon as available and in any
event within ninety (90) days after the end of each calendar
year, a Form 10-K and a consolidating (unaudited) and consolidated
balance sheet of Borrower and its Subsidiaries as of the end of the
year most recently ended and consolidated statements of income,
stockholders equity, and cash flows of Borrower and its
Subsidiaries for such year, setting forth in each case in
comparative form the corresponding figures for the preceding fiscal
year, such financial statements to be audited by and with the
opinion of Ernst & Young LLP (or its successors), KPMG (or
its successors), Price Waterhouse Coopers (or its successors),
Deloitte & Touche (or its successors), or any other
independent certified public accountants of recognized standing
selected by Borrower and reasonably acceptable to Administrative
Agent, which opinion shall be unqualified except as to such matters
as are acceptable to the Aggregate Majority Lenders (“
Acceptable Audit Opinion ”);
(k)
Section 8.9 is hereby deleted in its entirety and replaced
with the following:
8.9 Subsidiary Guaranties .
Borrower shall cause each Material Subsidiary that does not provide
a Guaranty hereunder on the Closing Date to provide a Guaranty
hereunder and such other documentation required by Administrative
Agent, all in form and substance reasonably acceptable to
Administrative Agent within thirty (30) days after the date on
which such Subsidiary qualifies as a Material Subsidiary;
provided that if any Subsidiary that provides or has
provided a Guaranty hereunder (i) is sold or otherwise
disposed of in a transaction permitted by
Section 8.16 to a Person other than Borrower or
one of Borrower’s Subsidiaries, or (ii) ceases, at any
time, to qualify as a Material Subsidiary, then, upon the request
of Borrower, Administrative Agent shall, so long as no Default or
Event of Default exists or would result therefrom, release such
Subsidiary from its Guaranty pursuant to a release in form and
substance reasonably acceptable to Administrative Agent and
Borrower. Notwithstanding the foregoing , if, (a) as of
the date of acquisition, formation, or creation otherwise permitted
hereunder of a new Subsidiary that is not a Material Subsidiary,
the aggregate amount of assets (other than ownership
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interests in, and intercompany
indebtedness of, other Subsidiaries) owned by all Subsidiaries
(other than Excluded Subsidiaries) that are not Material
Subsidiaries exceeds five percent (5%) of Consolidated
Tangible Net Worth, or (b) at any time any Subsidiary shall
execute a guaranty of any Senior Unsecured Homebuilding Debt (other
than the Loans or any Subordinated Debt), then Borrower shall cause
such Subsidiary (whether or not it is a Material Subsidiary) to
provide a Guaranty under this Section 8.9
.
(l)
Section 8.11(o) is hereby deleted in its entirety and replaced
with the following:
(o) liens granted pursuant to the
Security Agreement; and
(p) any other liens not otherwise
specified in Subsections 8.11(a) through
(o) (except for Judgment Liens and Project
Financing Liens, which shall in no event be permitted), so long as
the aggregate amount of indebtedness secured by all such other
liens does not at any time exceed $100,000,000.
(m)
Section 8.13 is hereby deleted in its entirety and replaced
with the following:
8.13 Change in Nature of
Business . Borrower shall not make, or permit any Subsidiary
(other than an Excluded Subsidiary) to make, any change in the
nature of its or their respective businesses as carried on at the
date hereof that is material to Borrower and Subsidiaries
(excluding the Excluded Subsidiaries), taken as a whole, which has
not been consented to by the Aggregate Majority Lenders in writing.
None of the following will constitute a violation of this covenant:
(a) the sale or dissolution of Standard Pacific Financing,
L.P. or Standard Pacific Financing, Inc.; (b) the engaging by
Borrower or a Subsidiary in or withdrawal from the mortgage
brokering or banking business; (c) the engaging by Borrower or
a Subsidiary in or withdrawal from any business related to the
homebuilding operations of Borrower, such as security or pest
control, and including without limitation technology initiatives
related to Borrower’s homebuilding operations; (d) a
change in the geographic regions in the United States of America in
which Borrower operates, and (e) the reorganization of the
business of Borrower and its Subsidiaries among Borrower and its
Subsidiaries.
(n)
Section 8.17(b) is hereby deleted in its entirety and replaced
with the following:
(b) Investments in a Home
Building Joint Venture , provided that without the prior
written approval of the Aggregate Majority Lenders, Borrower shall
not at any time permit the aggregate Investment of Borrower and its
Subsidiaries in all Homebuilding Joint Ventures to exceed
thirty-five percent (35%) of Consolidated Tangible Net Worth;
provided, however , that for purposes of this
Section 8.17(b) , should Borrower incur any
(A) non-cash write-down in assets under FAS 144 (or any
successor thereto) or (B) other non-cash decrease in
Consolidated Tangible Net
