Exhibit 99.1
SECOND AMENDMENT OF REVOLVING
CREDIT AGREEMENT AND FIRST
AMENDMENT OF TERM LOAN A CREDIT
AGREEMENT
THIS SECOND AMENDMENT OF REVOLVING
CREDIT AGREEMENT AND FIRST AMENDMENT OF TERM LOAN A CREDIT
AGREEMENT (this “ Amendment ”) is dated
as of April 25, 2007, 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
Revolver Lenders defined below (in such capacity, together with its
successors and assigns, “ Revolver Administrative
Agent ”) and as Administrative Agent for the Term A
Lenders defined below (in such capacity, together with its
successors and assigns, “ Term Administrative
Agent ”), and each Revolver Lender and Term A Lender
that is a signatory to this Amendment.
R
E C I
T A L S
A. Reference is hereby made to that
certain (a) Revolving Credit Agreement dated as of
August 31, 2005, executed by Borrower, Revolver Administrative
Agent, and the Lenders defined therein (such Lenders are
collectively, the “ Revolver Lenders ”
and individually a “ Revolver Lender ”)
pursuant to which such Revolver Lenders extended to Borrower a
revolving credit facility (as amended, modified, renewed, restated,
or replaced, the “ Revolving Credit Agreement
”), and (b) Term Loan A Credit Agreement dated as of
May 5, 2006, by and among Borrower, Term Administrative Agent,
and each of the Lenders defined therein (such Lenders are
collectively, the “ Term A Lenders ” and
individually a “ Term A Lender ”) (as
amended, modified, renewed, restated, or replaced, the “
Term A Credit Agreement ”).
B. Capitalized terms used herein
shall, unless otherwise indicated, have the respective meanings set
forth in the Revolving Credit Agreement or the Term A Credit
Agreement, as applicable.
C. The parties hereto desire to
modify certain provisions contained in the Revolving Credit
Agreement and the Term A 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 Revolving
Credit Agreement.
(a) The definition of “ Applicable
Margin ” contained in Section 1.1
of the Revolving Credit Agreement is amended to add the following
to the end thereof:
Provided that
:
(a) In the case of an Interest
Coverage Ratio of less than 1.75 to 1.0, but not less than 1.50 to
1.0, the Applicable Margin for Eurodollar Borrowings and the Letter
of Credit Commission Fees shall be increased by 0.25% for the
period of time commencing on the first (1st) Business Day
immediately following the date that Administrative Agent receives a
Compliance Certificate pursuant to
Section 8.1(e) reflecting that the Interest
Coverage Ratio was less than 1.75 to 1.0, but not less than 1.50 to
1.0, as of the last day of the applicable fiscal quarter and ending
on the first (1st) Business Day immediately following the date
that Administrative Agent receives a Compliance Certificate
pursuant to Section 8.1(e) reflecting that the
Interest Coverage Ratio was at least (x) 1.75 to 1.0 or (y)
less than 1.50 to 1.0 (in which case clause (b)
below shall apply) as of the last day of the applicable
fiscal quarter; and
(b) In the case of an Interest
Coverage Ratio of less than 1.50 to 1.0, the Applicable Margin for
Eurodollar Borrowings and the Letter of Credit Commission Fees
shall be increased by 0.50% for the period of time commencing on
the first (1st) Business Day immediately following the date
that Administrative Agent receives a Compliance Certificate
pursuant to Section 8.1(e) reflecting that the
Interest Coverage Ratio was less than 1.50 to 1.0 as of the last
day of the applicable fiscal quarter and ending on the first
(1st) Business Day immediately following the date that
Administrative Agent receives a Compliance Certificate pursuant to
Section 8.1(e) reflecting that the Interest
Coverage Ratio was at least 1.50 to 1.0 as of the last day of the
applicable fiscal quarter.
Notwithstanding anything to the
contrary contained in this definition, the determination of the
Applicable Margin for any period shall be subject to the provisions
of Section 4.1(g) .
(b)
Section 1.1 of the Revolving Credit Agreement is amended to
delete the definitions of “ Fee Letter ”
and “ Maturity Date ” in their entirety
and replace such definitions with the following:
“ Fee Letter
” means collectively, (a) the letter agreement, dated
March 30, 2006, among Borrower, Administrative Agent, and Banc
of America Securities LLC and (b) any other agreement among
Borrower, Administrative Agent, and Banc of America Securities LLC
with respect to fees.
“ Maturity Date
” means the earlier of (a) May 5, 2011, and
(b) the effective date of any termination or cancellation of
the Total Aggregate Commitment in accordance with the terms of this
Agreement.
(c)
Section 1.1 of the Revolving Credit Agreement is hereby
amended to add the following new definitions thereto:
“ Original
Commitment ” means, with respect to any Temporary
Increasing Lender, such Temporary Increasing Lender’s
Commitment immediately prior to the Second Amendment Effective
Date.
“ Second
Amendment ” means that certain Second Amendment of
Revolving Credit Agreement and First Amendment of Term Loan A
Credit Agreement dated as of April 25, 2007, by and among
Borrower, Administrative Agent, each Lender party thereto, and
certain other parties.
“ Second Amendment
Effective Date ” means April 25, 2007, the
effective date of the Second Amendment.
“ Temporary Increasing
Lender ” means Bank of America and each other Lender
that has a Commitment, as of the Second Amendment Effective Date
and after giving effect to the Second Amendment, that is higher
than such Lender’s Original Commitment.
(d)
Section 3.9(c) of the Revolving Credit Agreement is hereby
deleted in its entirety and replaced with the following:
(c) Fees . For each Letter of
Credit issued by an Issuing Bank (and upon any renewal thereof),
Borrower shall pay (i) to Administrative Agent, for the
account of each Lender in accordance with its Pro Rata Share, from
Borrower’s own funds a fee equal to the Applicable Margin for
Eurodollar Borrowings (based on a 360 day year) times the
daily maximum amount available to be drawn under such Letter of
Credit (the “ Letter of Credit Commission Fees
”); provided however that, in the case of an Interest
Coverage Ratio of (A) less than 1.75 to 1.0, but not less than
1.50 to 1.0, as set forth in Section 8.20 , the
Letter of Credit Commission Fees shall be increased by 0.25% during
the period of time commencing on the first (1st) Business Day
immediately following the date that Administrative Agent receives a
Compliance Certificate pursuant to
Section 8.1(e) reflecting that the Interest
Coverage Ratio was less than 1.75 to 1.0, but not less than 1.50 to
1.0, as of the last day of the applicable fiscal quarter and ending
on the first (1st) Business Day immediately following the date
that Administrative Agent receives a Compliance Certificate
pursuant to Section 8.1(e) reflecting that the
Interest Coverage Ratio was at least (x) 1.75 to 1.0 or
(y) less than 1.50 to 1.0 (in which case clause
(B) below shall apply) as of the last day of the
applicable fiscal quarter, (B) less than 1.50 to 1.0 as set
forth in Section 8.20 , the Letter of Credit
Commission Fees shall be increased by 0.50% during the period of
time commencing on the first (1st) Business Day immediately
following the date that Administrative Agent receives a Compliance
Certificate pursuant to Section 8.1(e)
reflecting that the Interest Coverage Ratio was less than 1.50 to
1.0 as of the last day of the applicable fiscal quarter and ending
on the first (1st) Business Day immediately following the date
that Administrative Agent receives a Compliance Certificate
pursuant to Section 8.1(e) reflecting that the
Interest Coverage Ratio was at least 1.50 to 1.0 as of the last day
of the applicable fiscal quarter, and (ii) directly to the
applicable Issuing Bank for its own account, from Borrower’s
own funds a fee equal to the greater of (A) .125% per annum
(based on a 360-day year) times the daily maximum amount available
to be drawn under such Letter of Credit, and (B) $250 per
annum (the “ Letter of Credit Fronting Fees
”). The Letter of Credit Commission Fees and the Letter of
Credit Fronting Fees payable under clauses (i) and
(ii) above shall be payable on (x) the eighth
(8th) day of each quarter for fees accrued through the last
day of the preceding quarter and (y) on the Maturity Date;
provided, however, that with respect to the Letter of Credit
Fronting Fees, any Issuing Bank may, at its option, require that
the Letter of Credit Fronting Fees be paid quarterly in advance. In
addition, Borrower shall pay directly to the applicable Issuing
Bank for its own account the customary issuance, presentation,
amendment and other processing fees, and other standard costs and
charges, of the applicable Issuing Bank relating to letters of
credit as from time to time in effect. Such customary fees and
standard costs and charges are due and payable on demand and are
nonrefundable.
(e)
Section 4.1 of the Revolving Credit Agreement is hereby
amended to add the following new Paragraph (g)
:
(g) If, as a result of any
restatement of or other adjustment to the financial statements of
Borrower or for any other reason, Borrower, Administrative Agent,
or any Lender determine that (i) the Total Leverage Ratio or
the Interest Coverage Ratio as calculated by Borrower as of any
applicable date was inaccurate and (ii) a proper
calculation of the Total Leverage
Ratio or the Interest Coverage Ratio would have resulted in higher
pricing for such period, Borrower shall immediately and
retroactively be obligated to pay to Administrative Agent, for the
account of the applicable Lenders, promptly on demand by
Administrative Agent (or, after the occurrence of an actual or
deemed entry of an order for relief with respect to Borrower under
the Bankruptcy Code of the United States, automatically and without
further action by Administrative Agent, any Lender, or any Issuing
Bank), an amount equal to the excess of the amount of interest and
fees that should have been paid for such period over the amount of
interest and fees actually paid for such period. This paragraph
shall not limit the rights of Administrative Agent, any Lender, or
any Issuing Bank, as the case may be, under
Section 3.9(g)(iii) , 3.9(c) or
4.3 or under Article 9 .
Borrower’s obligations under this paragraph shall survive the
termination of the Aggregate Commitments and the repayment of all
other Obligations hereunder.
(f)
Section 4.17 of the Revolving Credit Agreement is hereby
deleted in its entirety and replaced with the following:
4.17 Optional Commitment
Reduction and Termination; Reduction of Temporary Increasing Lender
Commitments .
(a) Borrower may, upon written,
irrevocable notice to Administrative Agent received by 12:00 p.m.
five (5) Business Days prior to the date of any requested
reduction or termination, from time to time permanently reduce the
Total Aggregate Commitment; provided that (i) any such
partial reduction shall be in the amount of $10,000,000 or any
greater integral multiple of $1,000,000, and (ii) Borrower
shall not terminate or reduce the Total Aggregate Commitment if,
after giving effect thereto and to any concurrent prepayments
hereunder, the aggregate principal amount of the outstanding Loans
plus the L/C Obligations would exceed the Total Aggregate
Commitment; provided, further , that the Total Aggregate
Commitment may be terminated if, at the time of such termination
Borrower shall have (A) repaid the outstanding Loans in full,
and otherwise paid and performed all other outstanding Obligations,
and (B) Cash Collateralized all outstanding L/C Obligations
and any payment or reimbursement obligations of Borrower and any
Letter of Credit Subsidiaries in the manner specified in the last
full paragraph of Section 9.2 ; and,
notwithstanding any termination of this Agreement or the credit
facility hereunder, Borrower and any Letter of Credit Subsidiaries
or any other Persons in any way liable or responsible for the
repayment of the L/C Obligations continue to be liable and
responsible therefor, and the Issuing Banks, Administrative Agent,
Lenders, and any other obligees with respect thereto continue to
retain all of their repayment rights and other rights with respect
thereto, including those specified in such last full paragraph of
Section 9.2 . Administrative Agent will promptly
notify Lenders of any such notice of termination or reduction of
the Total Aggregate Commitment. Except as set forth in clause
(b) below, any reduction of the Total Aggregate
Commitment shall be applied to the Commitment of each Lender
according to its Pro Rata Share.
(b) Borrower will, on or before
August 23, 2007, cause the Commitments of the Temporary
Increasing Lenders to be reduced to an amount equal to their
Original Commitments by either (i) causing assignments to
Eligible Assignees sufficient to reduce the Commitments of each
Temporary Increasing Lender to an amount equal to such
Temporary Increasing Lender’s
Original Commitment, or (ii) requesting a reduction in the
Total Aggregate Commitment, as set forth in clause
(a) above, sufficient to reduce the Commitment of
each Temporary Increasing Lender to an amount equal to such
Temporary Increasing Lender’s Original Commitment. If
Borrower does not cause such assignments or cause such reduction in
the Total Aggregate Commitment by August 23, 2007, then such
reduction in the Total Aggregate Commitment shall become effective
upon notice by Administrative Agent to the Lenders at the request
of any Temporary Increasing Lender. Notwithstanding anything
contained in clause (a) above, any such partial
termination or reduction of the Total Aggregate Commitment pursuant
to this clause (b) shall be applied,
first to the Commitment of each Temporary Increasing Lender
on a pro rata basis among such Temporary Increasing Lenders, until
each Temporary Increasing Lender’s Commitment is equal to its
Original Commitment, and thereafter to the Commitment of
each Lender according to its Pro Rata Share.
(g)
Section 8.15(a) of the Revolving Credit Agreement is hereby
deleted in its entirety and replaced with the following:
(a) Subject to the subordination
terms applicable to such Subordinated Debt, Borrower may make
regularly scheduled and mandatory payments in respect of any
Subordinated Debt as and when due by the terms thereof;
provided, however , that Borrower may, subject to the
limitations contained in Section 8.20(i) ,
prepay or repurchase Subordinated Debt at any time from the
proceeds of indebtedness issued by Borrower following the Closing
Date so long as (i) the maturity date of all such indebtedness
is at least one (1) year beyond the Maturity Date, and
(ii) no Default or Event of Default exists both before and
after giving effect thereto;
(h)
Section 8.15(c) of the Revolving Credit Agreement is hereby
deleted in its entirety and replaced with the following:
(c) So long as no Default or Event
of Default exists both before and after giving effect thereto, and
subject to the limitations contained in
Section 8.20(i) , Borrower may from time to time
repurchase shares of its capital stock.
(i)
Section 8.19(a) of the Revolving Credit Agreement is hereby
deleted in its entirety and replaced with the following:
(a) the Total Leverage Ratio to
exceed 2.25 to 1.0, subject to the limitations contained in
Section 8.20(C) ; and
(j)
Section 8.20 of the Revolving Credit Agreement is hereby
deleted in its entirety and replaced with the following:
8.20 Minimum Interest
Coverage . Borrower shall not permit, at any time, the
ratio (the “ Interest Coverage Ratio ”)
of (a) Home Building EBITDA to (b) Consolidated Home
Building Interest Incurred, for any period consisting of the
preceding four (4) consecutive fiscal quarters (each, a
“ Measurement Period ”), to be less than
1.75 to 1.0. Notwithstanding the foregoing, the Interest Coverage
Ratio may be less than 1.75 to 1.0 but not less than 1.25 to 1.0,
as of the last day of not more than three (3) consecutive
Measurement Periods (such period beginning with the last day of the
first
Measurement Period in which the
Interest Coverage Ratio is less than 1.75 to 1.0 and ending on the
earlier of (x) the last day of the second Measurement
Period thereafter or (y) the last day of the first Measurement
Period thereafter in which the Interest Coverage Ratio is equal to
or greater than 1.75 to 1.0, being the “ Reduced
Interest Coverage Period ”), in each case so long as
the following conditions precedent are satisfied:
(A) Borrower shall have delivered to
Administrative Agent written notice of the commencement of a
Reduced Interest Coverage Period, together with the Compliance
Certificate pursuant to Section 8.1(e)
indicating the first Measurement Period that it will not achieve an
Interest Coverage Ratio of 1.75 to 1.0;
(B) Borrower shall have provided
Administrative Agent with an updated business plan for Borrower and
its Subsidiaries, reflecting Borrower’s reasonable estimate
as to when it will exit the Reduced Interest Coverage
Period;
(C) In the case of an Interest
Coverage Ratio of (1) less than 1.75 to 1.0, but not less than
1.50 to 1.0, the Total Leverage Ratio shall not exceed 1.75 to 1.0
and (2) less than 1.50 to 1.0, the Total Leverage Ratio shall
not exceed 1.50 to 1.0; and
(D) Borrower may elect only one
(1) Reduced Interest Coverage Period during the term of this
Agreement.
Provided further that
:
(i) In the case of an Interest
Coverage Ratio of less than 1.75 to 1.0, Borrower may not
(x) repurchase shares of its capital stock (other than shares
repurchased from Borrower’s employees in connection with tax
withholding obligations associated with Borrower’s equity
incentive plans) pursuant to Section 8.15(c) or
(y) prior to the stated maturity date of any Subordinated
Debt, pay, repurchase, or redeem all or any part of such
Subordinated Debt, transfer any property in payment of or as
security for the payment of all or any part of such Subordinated
Debt, or establish any sinking fund, reserve, or like set aside of
funds or other property for the redemption, retirement, or
repayment of all or any part of such Subordinated Debt (other than
with the proceeds of Subordinated Debt issued by Borrower after the
commencement of the Reduced Interest Coverage Period), during the
period of time commencing on the date that Borrower submits a
Compliance Certificate pursuant to clause (A) above,
indicating that the Interest Coverage Ratio was less than 1.75 to
1.0 and ending on the last day of the first Measurement Period
thereafter in which the Interest Coverage Ratio is at least 1.75 to
1.0; and
(ii) If the Interest Coverage Ratio
is (A) less than 1.75 to 1.0, but not less than 1.50 to 1.0,
as of the last day of the Reduced Interest Coverage Period, the
Interest Coverage Ratio must be not less than 1.625 to 1.0 as of
the last day of the first Measurement Period thereafter, and then
not less than 1.75 to 1.0 as of the last day of the second
Measurement Period thereafter, or (B) less than 1.50 to 1.0,
but not less than 1.25 to 1.0, as of the last day of the Reduced
Interest Coverage Period, the Interest Coverage Ratio must be not
less than 1.50 to 1.0 as of the last day of the first Measurement
Period thereafter and then not less than 1.75 to 1.0 as of the last
day of the second Measurement Period thereafter.
An example of the calculation of the
Interest Coverage Ratio is as set forth in Schedule
8.20 .
2. Amendments to the Term A
Credit Agreement.
(a) The definition of “ Applicable
Margin ” contained in Section 1.1
of the Term A Credit Agreement is amended to add the following to
the end thereof:
Provided that
:
(a) In the case of an Interest
Coverage Ratio of less than 1.75 to 1.0, but not less than 1.50 to
1.0, the Applicable Margin for Eurodollar Borrowings shall be
increased by 0.25% for the period of time commencing on the first
(1st) Business Day immediately following the date that
Administrative Agent receives a Compliance Certificate pursuant to
Section 8.1(e) reflecting that the Interest
Coverage Ratio was less than 1.75 to 1.0, but not less than 1.50 to
1.0, as of the last day of the applicable fiscal quarter and ending
on the first (1st) Business Day immediately following the date
that Administrative Agent receives a Compliance Certificate
pursuant to Section 8.1(e) reflecting that the
Interest Coverage Ratio was at least (x) 1.75 to 1.0 or
(y) less than 1.50 to 1.0 (in which case clause
(b) below shall apply) as of the last day of the
applicable fiscal quarter; and
(b) In the case of an Interest
Coverage Ratio of less than 1.50 to 1.0 under, the Applicable
Margin for Eurodollar Borrowings shall be increased by 0.50% for
the period of time commencing on the first (1st) Business Day
immediately following the date that Administrative Agent receives a
Compliance Certificate pursuant to
Section 8.1(e) reflecting that the Interest
Coverage Ratio was less than 1.50 to 1.0 as of the last day of the
applicable fiscal quarter and ending on the first
(1st) Business Day immediately following the date that
Administrative Agent receives a Compliance Certificate pursuant to
Section 8.1(e) reflecting that the Interest
Coverage Ratio was at least 1.50 to 1.0 as of the last day of the
applicable fiscal quarter.
Notwithstanding anything to the
contrary contained in this definition, the determination of the
Applicable Margin for any period shall be subject to the provisions
of Section 4.1(g) .
(b)
Section 1.1 of the Term A Credit Agreement is amended to
delete the definition of “ Fee Letter ”
in its entirety and replace such definition with the
following:
“ Fee Letter
” means collectively, (a) the letter agreement, dated
March 30, 2006, among Borrower, Administrative Agent, and Banc
of America Securities LLC and (b) any other agreement among
Borrower, Administrative Agent, and Banc of America Securities LLC
with respect to fees.
(c)
Section 4.1 of the Term A Credit Agreement is hereby amended
to add the following new Paragraph (g) :
(g) If, as a result of any
restatement of or other adjustment to the financial statements of
Borrower or for any other reason, Borrower, Administrative Agent,
or any Lender determine that (i) the Total Leverage Ratio or
the Interest Coverage Ratio as
calculated by Borrower as of any
applicable date was inaccurate and (ii) a proper calculation
of the Total Leverage Ratio or the Interest Coverage Ratio would
have resulted in higher pricing for such period, Borrower shall
immediately and retroactively be obligated to pay to Administrative
Agent, for the account of the applicable Lenders, promptly on
demand by Administrative Agent (or, after the occurrence of an
actual or deemed entry of an order for relief with respect to
Borrower under the Bankruptcy Code of the United States,
automatically and without further action by Administrative Agent,
or any Lender), an amount equal to the excess of the amount of
interest and fees that should have been paid for such period over
the amount of interest and fees actually paid for such period. This
paragraph shall not limit the rights of Administrative Agent, or
any Lender, as the case may be, under
Section 4.3 or under Article 9 .
Borrower’s obligations under this paragraph shall survive the
termination of the Aggregate Commitments and the repayment of all
other Obligations hereunder
(d)
Section 8.15(a) of the Term A Credit Agreement is hereby deleted
in its entirety and replaced with the following:
(a) Subject to the subordination
terms applicable to such Subordinated Debt, Borrower may make
regularly scheduled and mandatory p
