SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES
OF SECURITIES PURSUANT TO SECTION
12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Lomas Financial Corporation
(Exact name of registrant as specified in its charter)
Delaware 75-1043392
-------- ----------
(State of incorporation or (I.R.S. employer
organization) identification no.)
1600 Viceroy Drive 75235
Dallas, Texas -----
------------------- (Zip Code)
(Address of principal
executive office)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class to be Name of each exchange on which
registered each class is to be registered
------------------------- ------------------------------
9% Senior Convertible Notes New York Stock Exchange, Inc.
Due 2003
Securities to be registered pursuant to Section 12(g) of the Act:
None
<PAGE>
Item 1. Description of Registrant's Securities to be Registered.
9% Senior Convertible Notes Due 2003
The following discussion summarizes certain provisions of the
9% Senior Convertible Notes Due 2003 (the "Lomas Senior Convertible
Notes") issued by Lomas Financial Corporation, a Delaware
Corporation ("Lomas"). The following summary does not purport to be
complete and is subject to, and qualified in its entirety by
reference to, all the provisions of the Indenture dated as November
1, 1991 (the "Lomas Senior Convertible Note Indenture") under which
such securities are issued, which is attached as Exhibit 1 to this
registration statement and which is incorporated herein by
reference. Capitalized terms used herein and not defined herein
shall have the meanings set forth in the Lomas Senior Convertible
Note Indenture.
The Lomas Senior Convertible Notes are issued pursuant to the
Lomas Senior Convertible Note Indenture between Lomas and Texas
Commerce Bank National Association (the "Lomas Senior Convertible
Note Trustee"), as trustee. An aggregate of $140,000,000 in
principal amount of the Lomas Senior Convertible Notes were
initially issued to creditors and claimants of Lomas on or about
January 31, 1992, pursuant to Lomas' Plan of Reorganization in
connection with Lomas' recent reorganization under Chapter 11 of
the United States Bankruptcy Code (the "Bankruptcy Code").
The Lomas Senior Convertible Notes are issued only in
registered form, without coupons, in denominations of $1,000 and
any integral multiple of $1,000. The principal of, premium, if any,
and interest on the Lomas Senior Convertible Notes are payable at
the office of the Lomas Senior Convertible Note Trustee in New
York, New York or at other offices or agencies maintained for that
purpose. At the option of Lomas, payment of interest may be made by
check mailed to the address of the person entitled thereto as shown
on the register.
Registration of Lomas Senior Convertible Notes will be
transferable at an office or agency of the registrar, upon
surrender of such Lomas Senior Convertible Notes duly endorsed or
accompanied by a written instrument of transfer in form
satisfactory to Lomas duly executed by the holder thereof or his
attorney duly authorized in writing. No service charge will be made
for any such registration of transfer or exchange, but Lomas may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. The registrar
will not be required to exchange or register transfers of Lomas
Senior Convertible Notes or portions thereof called for redemption.
Lomas has appointed the corporate trust office of the Lomas
Senior Convertible Note Trustee in New York, New York as paying
agent and registrar and as the office at which Lomas Senior
Convertible Notes may be presented and surrendered. So long as any
of the Lomas Senior Convertible Notes remain outstanding, however,
Lomas is required to maintain offices or agencies where Lomas
Senior Convertible Notes may be presented for payment and transfer.
Certain Terms of the Lomas Senior Convertible Notes
The Lomas Senior Convertible Notes are unsecured obligations
of Lomas and limited to $140.0 million in aggregate principal
amount. The Lomas Senior Convertible Notes will mature on October
31, 2003.
Interest. The Lomas Senior Convertible Notes bear interest
from November 1, 1991, at 9 percent per annum. Interest is payable
semi-annually on April 30 and October 31 in each year to holders of
record at the close of business on April 15 or October 15, as the
case may be. Lomas is required to pay interest on overdue principal
and, to the extent permitted by law, overdue interest at the rate
borne by the Lomas Senior Convertible Notes.
Optional Redemption. The Lomas Senior Convertible Notes may be
redeemed in whole or in part at the option of Lomas, subject to the
limitations set forth in the Lomas Senior Convertible Note
Indenture, at any time, at the following redemption prices
expressed as a percentage of the principal amount plus accrued
interest to the date fixed for redemption:
If redeemed during the 12-month period beginning October 31,
Year Percentage
---- ----------
1994. . . . . . . . . . . . 106.3%
1995. . . . . . . . . . . . 105.4%
1996. . . . . . . . . . . . 104.5%
1997. . . . . . . . . . . . 103.6%
1998. . . . . . . . . . . . 102.7%
1999. . . . . . . . . . . . 101.8%
2000. . . . . . . . . . . . 100.9%
The redemption price shall be 100 percent if redeemed on or after
October 31, 2001.
From and after notice has been given as provided in the Lomas
Senior Convertible Note Indenture, if funds for the redemption of
any Lomas Senior Convertible Notes called for redemption shall have
been made available on such redemption date, such Lomas Senior
Convertible Notes will cease to bear interest and the only right of
the holders will be to receive payment of the redemption price and
all interest unpaid to the date fixed for such redemption specified
in such notice.
Notice of any optional redemption of any Lomas Senior
Convertible Notes will be given to holders at their addresses, as
shown in the register, not more than 60 nor less than 30 days prior
to the date fixed for redemption. The notice of redemption will
specify, among other items, the date fixed for redemption, and the
principal amount of Lomas Senior Convertible Notes held by a holder
to be redeemed.
Sinking Fund. The Lomas Senior Convertible Note Indenture
requires Lomas to provide through the operation of a mandatory
sinking fund for the retirement, on October 31 in each of the years
1997 to and including 2002, of $10.0 million principal amount of
Lomas Senior Convertible Notes at a redemption price equal to the
principal amount of the Lomas Senior Convertible Notes so retired
with accrued interest to the date of redemption. Lomas may, at its
option, receive credit against mandatory sinking fund payments for
an amount not in excess of the sum of the principal amount of Lomas
Senior Convertible Notes acquired (including converted Lomas Senior
Convertible Notes, Lomas Senior Convertible Notes delivered in
connection with the exercise of warrants ("Warrants") to purchase
common stock, par value $1.00 per share, of Lomas (the "Common
Stock") and Lomas Senior Convertible Notes redeemed by Lomas
pursuant to the provisions described below under "Event Risk/Asset
Sale Puts") or redeemed by Lomas otherwise than through the
operation of the sinking fund. The amount of any sinking fund
payment in any year shall automatically be reduced by an amount
equal to the aggregate principal amount of any Lomas Senior
Convertible Notes called for redemption through operation of the
sinking fund and converted into Common Stock on or before the
sinking fund redemption date. No sinking fund redemption need be
made in any year if the cash in the sinking fund shall not exceed
$50,000. All or any part of the cash in the sinking fund not
required by the Lomas Senior Convertible Note Trustee for the
redemption of Lomas Senior Convertible Notes through the operation
of the sinking fund shall be retained in the sinking fund to be
added to the next cash sinking fund payment and applied to the
redemption of Lomas Senior Convertible Notes. Monies in the sinking
fund may not be used to redeem Lomas Senior Convertible Notes
during the continuance of certain defaults under the Lomas Senior
Convertible Note Indenture. Lomas Senior Convertible Notes to be
redeemed pursuant to the operation of the sinking fund shall be
selected by the Lomas Senior Convertible Note Trustee by lot.
Event Risk/Asset Sale Puts. In the event that a Redemption
Event (defined as a Designated Event combined with a Rating
Decline) or an Asset Sale Event, or both, shall have occurred, then
subject to the terms and conditions of Article Thirteen of the
Lomas Senior Convertible Note Indenture, each holder of a Lomas
Senior Convertible Note ("Security Holder") shall have the right,
at the Security Holder's option, to require Lomas to redeem all or
any portion of the principle amount thereof that is an integral
multiple of $1,000 of the Security Holder's securities for cash at
a redemption price of 101% of the principal amount together in each
case with accrued interest thereon to the Redemption Date; provided
that, in the case of an Asset Sale Event, (i) the aggregate amount
of funds applied by Lomas to redeem the Lomas Senior Convertible
Notes pursuant to Article Thirteen of the Lomas Senior Convertible
Note Indenture shall not exceed the aggregate cash proceeds of such
Asset Sale Event less, in the case of an Asset Sale Event with
respect to Lomas Information Systems, a wholly-owned subsidiary of
Lomas ("LIS"), any amount that Lomas is required to reinvest in LIS
pursuant to the agreements governing or related to such Asset Sale
Event and (ii) in the event that Lomas receives elections to
require Lomas to redeem the Lomas Senior Convertible Notes at an
aggregate redemption price in excess of the aggregate amount of
funds to be applied by Lomas to redeem the Lomas Senior Convertible
Notes in accordance with clause (i), Lomas will redeem a ratable
principal amount of each electing Security Holder's Lomas Senior
Convertible Notes.
The "Redemption Date" shall be the sixty-fifth day after the
date on which a Redemption Event or Asset Sale Event shall have
occurred.
Conversion of Lomas Senior Convertible Notes. The holders of
the Lomas Senior Convertible Notes will be entitled at any time
until and including, but not after the close of business on October
31, 2003, subject to prior redemption, to convert the Lomas Senior
Convertible Notes or portions thereof (which are in integral
multiples of $1,000 principal amount) into Common Stock, at the
conversion price of $17.50 per share, subject to adjustment in the
manner set forth below. Except as described below, no adjustment
will be made on conversion of any Lomas Senior Convertible Notes
for interest accrued thereon or for dividends or distributions on
any Common Stock issued upon conversion of any Lomas Senior
Convertible Notes. If any Lomas Senior Convertible Note (other than
a Lomas Senior Convertible Note called for redemption) is converted
between the close of business on April 15 or October 15 in any year
and the opening of business on the following April 30 or October
31, such Lomas Senior Convertible Note must be accompanied by
payment of an amount equal to the interest payable to the
registered holder on such April 30 or October 31, as the case may
be, on the principal amount so converted. Lomas is not required to
issue fractional interests of Common Stock upon conversion of Lomas
Senior Convertible Notes and, in lieu thereof, will pay a cash
adjustment based upon the current market price of the Common Stock
on the last business day prior to the date of conversion. In the
case of Lomas Senior Convertible Notes called for redemption,
conversion rights will expire at the close of business on the date
fixed for redemption.
The conversion price is subject to adjustment as set forth in
the Lomas Senior Convertible Note Indenture in certain events,
including: the issuance of Common Stock as a dividend or
distribution on the common stock, and subdivisions and combinations
of Common Stock; the issuance to all holders of Common Stock of
certain rights, options or warrants entitling them, for a period
not exceeding 45 days from the date of such issuance, to subscribe
for Common Stock at less than the then current market price (as
determined as set forth in the Lomas Senior Convertible Note
Indenture); and the distribution to substantially all holders of
Common Stock of evidences of indebtedness of Lomas, equity
securities other than Common Stock or of assets (excluding cash
dividends) or subscription rights or warrants (other than those
described above). No adjustment in the conversion price will be
required unless such adjustment would require an increase or
decrease of at least 1 percent of the conversion price as adjusted
from time to time; provided, however, that any adjustment that
would otherwise be required to be made, shall be carried forward
and taken into account in any subsequent adjustment. Lomas may from
time to time voluntarily reduce the conversion price by any amount
(provided that the conversion price is not less than the par value)
for a period of time. Lomas reserves the right to make such
reduction in the conversion price in addition to the adjustments
described above as Lomas in its discretion shall determine to be
advisable in order that certain stock-related distributions
hereafter made by Lomas to its stockholders shall not be taxable.
Except as stated in the Lomas Senior Convertible Note Indenture,
the conversion price will not be adjusted for the issuance of
Common Stock or any securities convertible into or exchangeable for
Common Stock, or carrying the right to purchase any of the
foregoing, in exchange for cash, property or services.
In case of any reclassification or change of outstanding
Common Stock (with certain exceptions) or in case of any
consolidation or merger of Lomas to which Lomas is a party or in
case of any sale or conveyance of substantially all of the property
of Lomas as entirety, the surviving corporation shall be required
by the terms of the Lomas Senior Convertible Note Indenture to
execute and deliver a supplemental indenture providing that the
holders of each Lomas Senior Convertible Note then outstanding
would have the right thereafter to convert such Lomas Senior
Convertible Note into the kind and amount of securities or property
or cash receivable upon the reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number
of shares of Common Stock of Lomas into which such Lomas Senior
Convertible Note could have been converted immediately prior
thereto.
In the event of a taxable distribution to holders of Common
Stock which results in an adjustment of the conversion price, the
holders of the Lomas Senior Convertible Notes may, in certain
circumstances, be deemed to have received a distribution subject to
United States income tax as a dividend: in certain other
circumstances, the absence of such an adjustment may result in a
taxable dividend to the holders of Common Stock.
Definitions. For purposes of this description of the Lomas
Senior Convertible Notes, the following terms shall have the
meanings set forth below.
"Adjusted Consolidated Debt" of any Person means at any date
the Consolidated Debt of such Person and its Consolidated
Subsidiaries, less (i) Mortgage Warehouse Debt, (ii) Debt Incurred
to finance the carrying of Foreclosure Claims Receivables with
respect to which GNMA, FNMA, FHMLC or any similar governmental or
quasi-governmental agency is obligor, (iii) Debt outstanding
pursuant to GNMA Lines or similar lines of credit required to be
maintained by GNMA or other similar governmental or another
quasi-governmental agency, (iv) Debt incurred for working capital
purposes in an aggregate principal amount not to exceed .15 percent
of the aggregate principal amount of the mortgage servicing
portfolio of Lomas Mortgage USA, Inc. ("LMUSA") a wholly owned
subsidiary of Lomas, and Lomas' principal operating subsidiary, (v)
Debt evidenced by mortgaged-backed securities issued by LMUSA or
any of its Subsidiaries in the ordinary course of business, (vi)
Investment Line Debt and (vii) contingent obligations of the type
specified in clause (iii) of the definition of Debt, to the extent
that they support obligations that do not constitute Debt and
(viii) Guarantees of Debt of the type specified in the foregoing
clauses (i) through (vii), in each case as of the date of
determination.
"Applicable Percentage" means (a) in the case of each
distribution referred to in clause (v) of the definition of
"Designated Event", the percentage determined as of the Calculation
Date of each such distribution by dividing the aggregate fair
market value (as determined in good faith by the Board of Directors
of Lomas, whose determination shall be conclusive) of such
distribution, by the fair market value (based on the Current Market
Price) or all of the shares of capital stock outstanding on the day
immediately prior to such Calculation Date, and (b) in the case of
each purchase or acquisition referred to therein, the percentage
determined as of the Calculation Date of each such purchase or
acquisition by dividing all amounts expended by Lomas and its
Subsidiaries (the amount expended, if other than in cash, to be
determined in good faith by the Board of Directors, whose
determination shall be conclusive) in connection with the purchase
or acquisition of any shares of any class of capital stock, by the
fair market value (based on the Current Market Price) of all of the
shares of capital stock outstanding on the day immediately prior to
such Calculation Date. The term "Current Market Price" means the
average of the daily closing prices (or, if none, the average of
the last daily bid and asked prices) of the applicable class of
capital stock as reported for composite transactions on the
securities exchanges on which such stock is traded, or, if none,
the primary inter-dealer quotation system which reports quotations
for such stock, for the trading days during the period of 90
consecutive calendar days ending on the day immediately preceding
the Calculation Date.
"Asset Sale Event" means the sale by Lomas to any Person other
than a Consolidated Subsidiary of Lomas in any transaction of (i)
a number of shares of common stock of LMUSA which together with all
previous sales by Lomas to Persons other than Consolidated
Subsidiaries of Lomas, is greater than 25 percent of the largest
number of such shares (adjusted to give effect to any stock splits,
stock dividends or subdivisions or combinations of such stock)
owned by Lomas at any time prior to such sale or (ii) a number of
shares of common stock of LIS which together with all previous
sales by Lomas to Persons other than Consolidated Subsidiaries of
Lomas, is greater than 25 percent of the largest number of such
shares (adjusted to give effect to any stock splits, stock
dividends or subdivisions or combinations of such stock) owned by
the Issuer at any time prior to such sale.
"Authorized Officer" means (i) the chairman of the Board of
Directors, the chief financial officer or the chief accounting
officer of Lomas, (ii) any officer succeeding to or performing the
responsibilities of any of the officers listed in clause (i) or
(iii) any other officer of Lomas whose responsibilities require
knowledge of any of the material provisions or requirements of the
Lomas Senior Convertible Indenture.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations and other equivalents (however
designated) of such Person's capital stock whether now outstanding
or issued after the date of the Lomas Senior Convertible Note
Indenture.
"Capitalized Lease" means, as applied to any Person, any lease
of any Property (whether real, personal or mixed) under which, in
conformity with generally accepted accounting principles, the
discounted present value of the rental obligations of such Person
as lessee is required to be capitalized on the balance sheet of
that Person.
"Common Stock" means the Common Stock of Lomas as the same
exists at the date of execution and delivery of the Lomas Senior
Convertible Note Indenture or as such stock may be reconstituted
from time to time.
"Consolidated Debt" means the Debt of any Person and its
Consolidated Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles.
"Consolidated Net Income" of any Person for any period means
the Net Income of such Person and its Consolidated Subsidiaries for
such period, determined on a consolidated basis in accordance with
generally accepted accounting principles; provided that there shall
be excluded (i) the Net Income of any Person other than a
Consolidated Subsidiary in which such Person or any of its
Consolidated Subsidiaries has a joint interest with a third party
except to the extent of the amount of dividends as distributions
actually paid to such Person or a Consolidated Subsidiary during
such period and (ii) except to the extent includible pursuant to
the foregoing clause (i) the Net Income of any Person accrued prior
to the date it becomes a Subsidiary of such Person or is merged
into or consolidated with such Person or any of its Subsidiaries or
that Person's assets are acquired by such Person or any of its
Subsidiaries.
"Consolidated Subsidiary" of any Person means a Subsidiary
which for financial reporting purposes is or, in accordance with
generally accepted accounting principles, should be, accounted for
by such Person as a consolidated subsidiary.
"Consolidated Tangible Net Worth" of any Person means at any
date the consolidated stockholders equity of such Person and its
Consolidated Subsidiaries less their consolidated Intangible
Assets, all determined as of such date. For purposes of this
definition "Intangible Assets" means the amount (to the extent
reflected in determining such consolidated stockholders equity) of
all unamortized debt discount and expense, unamortized deferred
charges goodwill, reorganization value in excess of amounts
allocable to identifiable assets, patents, trademarks, service
marks, trade names, copyrights, organization or developmental
expenses and other intangible assets; provided that Intangible
Assets shall not include purchased future mortgage servicing income
rights or other similar income producing rights customarily
purchased by leading participants in the mortgage finance industry
to the extent reflected in determining consolidated stockholders'
equity.
"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (iii) all obligations of such Person in
respect of letters of credit or bankers' acceptances or similar
obligations (or reimbursement obligations with respect thereto),
(iv) all obligations of such Person as lessee under Capitalized
Leases (v) all Debt of others secured by a Lien on any assets of
such Person, whether or not such Debt is assumed by such Person,
(vi) all Debt of others Guaranteed by such Person other than
Guarantees of obligations of utility districts or municipalities
and Guarantees of development obligations of others, in each case
in effect on the date of the Lomas Senior Convertible Note
Indenture, (vii) all obligations of such Person to pay the deferred
and unpaid purchase price of property or services, except trade
payables and accrued expenses incurred in the ordinary course of
business and (viii) Redeemable Stock of such Person valued at the
highest of the mandatory redemption price payable at the option of
the holder, the liquidation preference thereof or the face amount
of Debt issuable upon conversion thereof.
"Designated Event" means any one or more of the following
events which shall occur:
(i) (a) Lomas shall convey, transfer or lease all or
substantially all of its assets to any Person or (b) Lomas
shall consolidate with or merge into any other Person or any
other Person shall consolidate with or merge into Lomas, in
either event pursuant to a merger or consolidation in which
any common stock of Lomas outstanding immediately prior to the
effectiveness thereof is cancelled or changed into or
exchanged for cash, securities or other property; provided
that such transactions between Lomas and its Subsidiaries or
between Subsidiaries shall be excluded form the operation of
this clause (i);
(ii) any Person, including a "group" (within the meaning
of Section 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934 (the "Exchange Act")), which includes such Person,
shall purchase or otherwise acquire, directly or indirectly
beneficial ownership of securities of Lomas and, as a result
of such purchase or acquisition, any Person (together with its
associates and affiliates), other than Lomas or any
Subsidiary, shall directly or indirectly beneficially own in
the aggregate (a) 30 percent or more of the common stock of
Lomas, or (b) securities representing 30 percent or more of
the combined voting power of Lomas' voting securities, in each
case under clause (a) or (b) outstanding on the date
immediately prior to the date of such purchase or acquisition
(or, if there be more than one, the last such purchase or
acquisition);
(iii) Lomas or any Subsidiary shall purchase or otherwise
acquire, directly or indirectly, beneficial ownership of
capital stock of Lomas if, after giving effect to such
purchase or acquisition, the Issuer (together with all
Subsidiaries) shall have acquired, during any period of 12
consecutive months, beneficial ownership of an aggregate of 30
percent or more of the capital stock of Lomas outstanding on
the date immediately prior to the first such purchase or
acquisition during such period (taking into account any stock
splits, stock dividends or similar transactions effected
during such period);
(iv) during any period of two consecutive years,
individuals who at the beginning of such period constitute
Lomas' Board of Directors (together with any new Director
whose election by Lomas Board of Directors or whose nomination
for election by Lomas stockholders was approved by a vote of
at least two-thirds of the Directors then still in office who
either were 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
Directors then in office: or
(v) on any date (a "Calculation Date") (a)(1) Lomas shall
make any distribution or distributions of cash, securities or
other properties (other than regular, periodic cash dividends
at a rate which is substantially consistent with past
practice, including past practice with respect to increases in
dividends, and other than distributions of common stock or
rights to acquire common stock or preferred stock
substantially equivalent to Common Stock of Lomas) to holders
of capital stock of Lomas, whether by means of dividend,
reclassification, recapitalization or otherwise, or (2) Lomas
or any Subsidiary shall purchase or otherwise acquire,
directly or indirectly, beneficial ownership of capital stock
of Lomas, and (b) the sum of the Applicable Percentages of all
such distributions purchases and acquisitions which have
occurred on the Calculation Date and during the 365-day period
immediately preceding the Calculation Date shall exceed 30
percent.
"Foreclosure Claims Receivable" means, at any date, payments
due to any of Lomas Subsidiaries in respect of advances of
principal, interest, fees, expenses or similar disbursements
arising in connection with foreclosure proceedings on properties
securing mortgages in such Subsidiary's servicing portfolio.
"Full Rating Category" means (a) with respect to Standard &
Poor's, any of the following categories in descending order: AAA,
AA, A, BBB, BB, B, CCC, CC and C, (b) with respect to Moody's, any
of the following categories in descending order: Aaa, Aa, A, Baa,
Ba, B, Caa, Ca and C and (c) with respect to any other rating
agency, the equivalent of any category of Standard & Poor's or
Moody's used by the other rating agency in determining whether the
rating of the Securities has decreased by the equivalent of one
Full Rating Category, gradation within Full Rating Categories (+
and - for Standard & Poor's; 1, 2, and 3 for Moody's; or the
equivalent gradation for another rating agency) shall be taken into
account (e.g. with respect to Standard & Poor's a decline in rating
from BB- to B- will constitute a decrease of one Full Rating
Category, and a decline in rating from BB- to B will constitute a
decrease of less than one Full Rating Category).
"GNMA" means Government National Mortgage Association and its
successors.
"GNMA Lines" means one or more lines of credit or similar
arrangements entered into by Lomas or any of its Subsidiaries for
the purpose of assuring timely payment of the GNMA guaranty fee and
of amounts due holders of GNMA securities.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any
Debt or other obligation of any other Person and, without limiting
the generality of the foregoing any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt
or other obligation of such other Person (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii)
entered into for the purpose of assuring in any other manner the
obligee of such Debt or other obligations of the payment thereof or
to protect such obligee against loss in respect thereof (in whole
or in part): provided that the term Guarantee shall not include
endorsements for deposit or collection in the ordinary course of
business. The term "Guarantee" used as verb has a correlative
meaning.
"Incurrence" means the incurrence, creation, assumption or in
any other manner becoming liable with respect to, or becoming
responsible for the payment of, or the extension of the maturity
of, any Debt. The term "Incur" shall have a correlative meaning.
"Investment Grade" means a rating of not less than Baa3, in
the case of a rating by Moody's, or a rating of not less than BBB-,
in the case of a rating by Standard & Poor's, or the equivalent of
such ratings by Standard & Poor's or Moody's by any other rating
agency.
"Investment Line Debt" means Debt of Lomas or any of its
Subsidiaries secured by (i) cash, (ii) United States Treasury
securities, (iii) certificates of deposit of any bank with capital,
surplus and undivided profits aggregating at least $100,000,000 and
having a Thompson BankWatch, Inc. peer group rating of at least C
or a Standard & Poor's long-term debt rating of at least BBB or a
Moody s long-term debt rating of at least Baa, (iv) mortgage-backed
securities Guaranteed by GNMA, FNMA or FHMLC or (v) commercial
paper rated at least A-2 or P-2 by Standard & Poor's or Moody's;
but in each case only that portion of such Debt that is secured by
collateral with a value equal to or greater than the Debt.
"Lien" means, with respect to any asset any mortgage lien,
pledge, charge, security, interest or encumbrance of any kind in
respect of such asset or any interest therein. For the purposes of
the Lomas Senior Convertible Note Indenture, Lomas 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, Capitalized Lease or other title
retention arrangement relating to such Property.
"LIS Subcommittee" means a committee or subcommittee of the
Board of Directors, a majority of the members of which committee or
subcommittee will at all times be directors who are not employees
or officers of Lomas.
"LIS Technical Advisory Board" means a group of at least three
persons who are not employees or officers of Lomas, designated by
the LIS Subcommittee as soon as practicable after the Consummation
Date to advise it with respect to all matters pertaining to LIS's
Excelis-MLS mortgage loan servicing system, including the planning,
implementation and rollout of the system to its existing customers.
The LIS Technical Advisory Board will focus without limitation, on
costs, schedules, quality, operations, organizational
effectiveness, requirements and business rationale, in all cases
from both a system management and a quality assurance perspective.
The LIS Technical Advisory Board will remain active for as long as
the LIS Subcommittee deems appropriate, but at least as long as
required to assure compliance by Lomas with Section 3.12 of the
Lomas Senior Convertible Note Indenture.
"Moody's" means Moody's Investors Service, Inc. and its
successors.
"Mortgage Warehouse Debt" means, at any date, Debt of any
Person secured by mortgage loans, mortgage notes, mortgage-backed
securities or any combination thereof owned by such Person.
"Net Income" of any Person for any period means the net income
or loss of such Person for such period plus any tax expense
recorded on the books of the Issuer for such period which will
never be required to be paid in cash and which has arisen solely
from the application of the consolidated tax group of which Lomas
was the common parent for taxable years ending on or before the
January 31, 1992, determined in accordance with generally accepted
accounting principles, except that extraordinary and non-recurring
gains or losses, as determined in accordance with generally
accepted accounting principles shall be excluded.
"Non-Recourse Debt" means Debt or that portion of Debt (i) as
to which neither Lomas nor any of its Subsidiaries (other than a
Non-Recourse Subsidiary) (a) provides credit support (including any
undertaking agreement or instrument which would constitute Debt),
(b) is directly or indirectly liable or (c) constitutes the lender
and (ii) no default with respect to which (including any rights
which the holders thereof may have to take enforcement action
against a Non-Recourse Subsidiary) would permit (upon notice, lapse
of time or both) any holder of any other Debt of Lomas or any
Subsidiary (other than a Non-Recourse Subsidiary) to declare a
default on such other Debt or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"Non-Recourse Subsidiary" means a Subsidiary which has no Debt
other than Non-Recourse Debt.
"Permitted Liens" means, (i) Liens existing as of the date of
the Lomas Senior Convertible Note Indenture, as set forth in
Schedule I of the Lomas Senior Convertible Note Indenture; (ii)
rights of banks to set-off deposits against debts owed to said
bank; (iii) Liens securing Debt incurred to purchase Property or
improvements thereon so long as (a) such Liens apply only to the
Property or improvements purchased with the proceeds of such Debt,
and accessions to, improvements on or proceeds of such Property or
improvements and (b) such Liens attach within 180 days after the
acquisition of such Property or completion of such improvements and
(iv) any extension, renewal or replacement, in whole or in part, of
any Lien described in the foregoing clauses (i) through (iii);
provided that any such extension, renewal or replacement shall not
extend to any other Property of Lomas other than such item of
Property originally covered by such Lien or any improvements
thereof, or additions or accessions thereto.
"Permitted Payment" means (i) any dividend on shares of Lomas'
Capital Stock payable solely in shares of Lomas Capital Stock or in
options, warrants or other rights to purchase Lomas Capital Stock
and (ii) the repurchase or other acquisition or retirement for
value of any shares of Lomas Capital Stock, with additional shares
of, or out of the proceeds of a substantially contemporaneous
issuance of, Lomas Capital Stock.
"Property" 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 under generally accepted accounting principles.
"Public Notice" means any filing or report made in accordance
with the requirements of the Commission or any press release or
public announcement made by the Issuer.
"Rating Agency" means Standard & Poor's and Moody's or, if
Standard & Poor's or Moody's or both shall not make a rating on the
Securities publicly available, a nationally recognized securities
rating agency or agencies, as the case may be, selected by Lomas,
and reasonably acceptable to the Lomas Senior Convertible Note
Trustee, which shall be substituted for Standard & Poor's or
Moody's or both, as the case may be.
"Rating Date" means the date that is 121 days prior to Public
Notice of the occurrence of a Designated Event.
"Rating Decline" shall be deemed to occur if on any date
within the 90-day period following Public Notice of the occurrence
of a Designated Event (which period shall be extended so long as
the rating of the Securities is under publicly announced
consideration for possible downgrade by a Rating Agency) (a) in the
event the Securities are rated by any Rating Agency as Investment
Grade, the rating on the Securities by such Rating Agency shall be
below Investment Grade, or (b) in the event the Securities are
rated by any Rating Agency on the Rating Date as below Investment
Grade, the rating on the Securities by such Rating Agency shall be
at least one Full Rating Category below the rating of the
Securities by such Rating Agency on the Rating Date.
"Redeemable Stock" means any class or series of Capital Stock
of any Person that by its terms or otherwise is (i) required to be
redeemed prior to the stated maturity of the Securities, (ii)
redeemable at the option of the holder thereof at any time prior to
the stated maturity of the Securities or (iii) convertible into or
exchangeable for Debt or Capital Stock referred to in clause (i) or
(ii) having a scheduled maturity prior to the stated maturity of
the Securities; provided that any Capital Stock which would not
constitute Redeemable Stock but for provisions thereof giving
holders thereof the right to require Lomas to repurchase or redeem
such Capital Stock upon the occurrence of a change of control
occurring prior to the final maturity of the Securities shall not
constitute Redeemable Stock if the change of control provision
applicable to such Capital Stock are no more favorable to the
holders of such Capital Stock than the provision contained in
Section 13.1 of the Lomas Senior Convertible Note Indenture and
such Capital Stock specifically provides that Lomas will not
repurchase or redeem any such stock pursuant to such provisions
prior to Lomas' redemption of such Securities as are required to be
redeemed pursuant to the provisions of Section 13.1 of the Lomas
Senior Convertible Note Indenture.
"Redemption Event" means the occurrence of both a Designated
Event and a Rating Decline.
"Restricted Payment" means (i) any dividend or other
distribution on any shares of Lomas Capital Stock or (ii) any
payment on account of the purchase, redemption, retirement or other
acquisition of (a) any shares of Lomas Capital Stock or (b) any
option, warrant or other right to acquire shares of Lomas Capital
Stock (excluding debt securities convertible into Lomas Capital
Stock). Notwithstanding the foregoing, "Restricted Payment" shall
not include any Permitted Payment.
"Standard & Poor's" means Standard & Poor's Corporation and
its successors.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which a majority of the capital
stock or other ownership interests having ordinary voting power to
elect a majority of the Board of Directors or other Persons
performing similar functions are at the time directly or indirectly
owned by such Person.
"Wholly-Owned Subsidiary" means with respect to any Person a
Subsidiary the voting stock of which is more than 90 percent owned
by such Person.
Restrictive Covenants
Limitation on Restricted Payments. The Lomas Senior
Convertible Note Indenture provides that Lomas will not, and will
not permit any of its Subsidiaries to, directly or indirectly, make
any Restricted Payment, if:
(a) at the time of such Restricted Payment or after
giving effect thereto, an Event of Default, or an event that
through the passage of time or the giving of notice, or both,
would become an Event of Default, shall have occurred and be
continuing; or
(b) after giving effect thereto the aggregate amount of
all Restricted Payments made by Lomas and its subsidiaries
(the amount expended or distributed for such purposes, if
other than in cash, to be valued at its fair market value as
determined in good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a
resolution of the Board of Directors delivered to the Lomas
Senior Convertible Note Trustee), from and after the date of
the Lomas Senior Convertible Note Indenture shall exceed the
sum (without duplication) of:
(i) 50 percent of Consolidated Net Income (or in the
event Consolidated Net Income is a deficit, then 100
percent of such deficit) of Lomas and its Consolidated
Subsidiaries accrued for the period (taken as one
accounting period) commencing on January 1, 1992 to and
including the last day of the fiscal quarter ended
immediately prior to the date of such calculation; plus
(ii) the aggregate net proceeds including the fair
market value of property other than cash (as determined
in good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a
resolution of the Board of Directors delivered to the
Lomas Senior Convertible Note Trustee) received by Lomas
from and after the date of the Lomas Senior Convertible
Note Indenture from the issuance or sale (other than to
a Subsidiary of Lomas) of its Capital Stock and warrants,
options and rights to purchase any such Capital Stock,
but excluding the net proceeds from the issuance sale,
exchange, conversion or other disposition of its Capital
Stock convertible into or exchangeable for any security
other than its Capital Stock; at the option of the holder
thereof or upon the happening of any event; provided that
the foregoing clause (b) shall not prevent the payment of
any dividend within 60 days after the date of its
declaration if such dividend could have been paid on the
date of its declaration without violation of the
provisions described this covenant.
Debt Limitation. The Lomas Senior Convertible Note Indenture
provides that Lomas will not Incur any Debt if, after giving effect
to such Debt and the receipt and application of the net proceeds
thereof, the aggregate amount of Lomas Adjusted Consolidated Debt
shall exceed 230 percent of Lomas Consolidated Tangible Net Worth;
provided that the foregoing limitation shall not apply to the
Incurrence of obligations of the type specified in clause (iii) of
the definition of Debt or Guarantees thereof, to the extent that
they do not support obligations that constitute Debt.
Notwithstanding the foregoing, Lomas may at any time Incur Debt if,
after giving effect to such Debt and the receipt and application of
the net proceeds thereof, Debt of Lomas outstanding pursuant to
this sentence does not exceed $35.0 million; provided that no Debt
may be Incurred pursuant to this sentence that would not be
permitted by the next preceding sentence at any time after the
amount of Debt Incurred or that could be Incurred after the
Consummation Date under the next preceding sentence exceeds $45.0
million at the end of two consecutive fiscal quarters.
Limitation on Liens. The Lomas Senior Convertible Note
Indenture provides that Lomas will not Incur any Debt which is
secured, directly or indirectly, by a Lien (other than a Permitted
Lien on any Property, assets or income or profit therefrom, of
Lomas unless the Lomas Senior Convertible Notes are equally and
ratably secured by such Lien for so long as such other Debt is
secured; provided that this restriction shall not apply to the
Incurrence of such Debt if after giving effect to such Incurrence
the aggregate principal amount of all such Debt then outstanding
shall not exceed 5 percent of Lomas Consolidated Tangible Net Worth
as of the last day of the preceding fiscal quarter.
Certain LIS Expenditures. Lomas does not permit LIS to expend
an aggregate of more than $25.0 million in connection with the
development, completion and rollout of the Excelis-MLS system (the
"System") the conversion of LIS's service bureau customers to the
System and the cost of simultaneous operation and shutdown of LIS's
UNISYS-based mortgage servicing system, unless all such
expenditures in excess of $25.0 million are approved by the LIS
Subcommittee after the LIS Subcommittee has received the advice of
the LIS Technical Advisory Board concerning such expenditures.
LMUSA Debt. Lomas will not permit LMUSA or any of LMUSA's
Subsidiaries to Incur any Debt (other than Debt of a Wholly-Owned
Subsidiary of LMUSA to LMUSA or another Wholly-Owned Subsidiary of
LMUSA) if, after giving effect to such Debt and the receipt and
application of the net proceeds thereof, the aggregate amount of
LMUSA's Adjusted Consolidated Debt shall exceed 200 percent of its
Consolidated Tangible Net Worth as of the last day of the preceding
fiscal quarter; provided that the foregoing limitation shall not
apply to the incurrence of obligations of the type specified in
clause (iii) of the definition of Debt or Guarantees thereof, to
the extent that they do not support obligations that constitute
Debt.
Acquisition of Vista Capital Stock. Lomas will not, and will
not permit any of its Subsidiaries to, acquire any additional
shares of the capital stock of Vista Properties, Inc. ("Vista"), a
company in which, as a result of Lomas' recent reorganization under
the Bankruptcy Code, Lomas now holds an approximately 19 percent
equity interest, except that Lomas may acquire (i) shares issued
pursuant to any stock split, stock dividend or similar transaction
and (ii) shares acquired in connection with any offering of such
shares (or rights to purchase such shares) to the extent that the
percentage of outstanding shares of capital stock of Vista owned by
Lomas and its Subsidiaries after giving effect to such acquisition
would not exceed the approximately 19 percentage of outstanding
shares of capital stock of Vista owned by Lomas on January 30,
1992, the consummation date of Lomas' reorganization.
Reports to Holders. The Lomas Senior Convertible Note
Indenture provides that (i) Lomas will furnish the Lomas Senior
Convertible Note Trustee with a copy of any reports or information
which it is required to file with the Securities and Exchange
Commission (the "Commission") pursuant to Section 13 or 15(d) of
the Exchange Act within 15 days of making such filing with the
Commission, and, (ii) if during any period of time Lomas is not
subject to the information and reporting requirements of Section 13
of the Exchange Act, during such period Lomas will deliver to the
Lomas Senior Convertible Note Trustee (x) within 90 days following
the end of each fiscal year an annual report of Lomas containing
audited consolidated financial statements and an opinion thereon by
an independent public accounting firm and (y) within 45 days
following the end of each of the first three fiscal quarters in
each fiscal year of Lomas, quarterly Reports of Lomas containing
unaudited consolidated financial statements.
Certificate to the Trustee. Lomas will furnish to the Trustee
within 15 days after each May 15 and November 15 in each year an
Officers' Certificate executed by the principal executive,
financial or accounting officer of Lomas stating whether to the
signor's knowledge after due inquiry there has been any breach of
the conditions or covenants under the Lomas Senior Convertible Note
Indenture or any Default or Event of Default or event which after
notice or the lapse of time or both, would become an Event of
Default which occurred during the prior two fiscal quarters, and
describing such breach, Event of Default or event and (b) within
five days after an Authorized Officer of Lomas obtains knowledge of
any breach of any covenants or any Event of Default or event which
after notice or the lapse of time, or both, would become an Event
of Default or event is then continuing, an Officers' Certificate
setting forth the details thereof and the action Lomas is taking or
proposes to take with respect thereto.
Events of Default. The following events constitute Events of
Default under the Lomas Senior Convertible Note Indenture: (i)
failure to pay interest on the Lomas Senior Convertible Notes for
30 days after becoming due, (ii) failure to pay all or any part of
the principal of or premium, if any, on the Lomas Senior
Convertible Notes when they become due and payable, either at
maturity, upon any redemption, by declaration, or otherwise, (iii)
default in the deposit of any sinking fund payment when and as due
by the terms of any Lomas Senior Convertible Note or the Lomas
Senior Convertible Note Indenture, (iv) default for 30 days after
notice in the observance or performance of any other covenant in
the Lomas Senior Note Convertible Indenture, (v) certain events of
bankruptcy, insolvency or reorganization of Lomas, (vi) failure of
Lomas to pay when due at maturity indebtedness for borrowed money
in excess of $5.0 million or if an event of default under any other
indenture or instrument evidencing or under which Lomas has
outstanding more than $5.0 million aggregate principal amount of
indebtedness for borrowed money, shall happen and be continuing and
such indebtedness shall have been accelerated so that the same
shall become due and payable prior to the date on which the same
would otherwise have become due and payable and (vii) default by
Lomas or any of its Subsidiaries (other than ST Lending, Inc.
("STL"), a subsidiary 51 percent of which is owned by Lomas and 49
percent of which is owned by LMUSA, or any Non-Recourse Subsidiary)
in the making of any payment exceeding $5.0 million pursuant to any
indenture or instrument evidencing or under which Lomas or such
Subsidiary has outstanding indebtedness for borrowed money, and
such default shall not have been cured within ten days after notice
thereof shall have been given to Lomas by the Lomas Senior
Convertible Note Trustee or Lomas and the Lomas Senior Convertible
Note Trustee by the holders of at least 50 percent in aggregate
principal amount of Lomas Senior Convertible Notes at the time
outstanding.
The Lomas Senior Convertible Note Indenture provides that, if
an Event of Default shall have occurred and be continuing, the
Lomas Senior Convertible Note Trustee or the holders of not less
than 25 percent in aggregate principal amount of the Lomas Senior
Convertible Notes then outstanding may declare the entire principal
and interest accrued on all Lomas Senior Convertible Notes to be
due and payable immediately, but if Lomas shall cure all defaults
(except the nonpayment of the principal of and interest on any
Lomas Senior Convertible Notes which shall have become due by
acceleration) and certain other conditions are met, such
declaration may be annulled and past defaults may be waived by the
holders of a majority in principal amount of Lomas Senior
Convertible Notes then outstanding.
In certain cases, the holders of a majority in principal
amount of the outstanding Lomas Senior Convertible Notes may, on
behalf of the holders of all Lomas Senior Convertible Notes waive
any past default or Event of Default except, unless theretofore
cured, a default in the payment of the principal of or premium, if
any, or interest on any of the Lomas Senior Convertible Notes or in
respect of a covenant or provision which cannot be modified or
amended without the consent of the holders of each Lomas Senior
Convertible Note.
Modification of Indenture
The Lomas Senior Convertible Note Indenture contains
provisions permitting Lomas and the Lomas Senior Convertible Note
Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of the Lomas Senior
Convertible Notes at the time outstanding, to execute supplemental
indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Lomas Senior Convertible
Note Indenture or any supplementary indenture or modifying in any
manner the rights of the holders of the Lomas Senior Convertible
Notes; provided, that no such supplemental indenture shall (a)
extend the maturity of any Lomas Senior Convertible Note, or reduce
the principal amount thereof, or reduce the rate or extend the time
of payment of interest thereon, or reduce any amount payable on
redemption thereof, or alter Lomas' obligation to make any
mandatory sinking fund payment, or impair or affect the right of
any holder to institute suit for the payment or conversion thereof,
or impair the right of any holder to require Lomas to redeem any
Lomas Senior Convertible Note pursuant to the Lomas Senior
Convertible Note Indenture or materially and adversely affect the
right to convert the Lomas Senior Convertible Notes in accordance
with the Lomas Senior Convertible Note Indenture, without the
consent of the holder of each Lomas Senior Convertible Note so
affected, or (b) reduce the aforesaid percentage of Lomas Senior
Convertible Notes, the consent of the holders of which is required
for any supplemental indenture, without the consent of the holders
of all Lomas Senior Convertible Notes then outstanding.
Listing on an Exchange
It is anticipated that the Lomas Senior Convertible Notes will
be listed for trading on the New York Stock Exchange (the "NYSE").
The Common Stock currently trades on the NYSE under the symbol
"LFC".
Item 2. Exhibits
List below all exhibits filed as a part of this
registration statement:
1. Indenture dated as of November 1, 1991 between the
Registrant and Texas Commerce Bank National
Association.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereto duly authorized.
LOMAS FINANCIAL CORPORATION
By: /s/ Gary White
------------------------------
Senior Vice President
and Controller
April 11, 1994
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
------- ----------- ----
1 Indenture dated as of November 1, 23
1991 between Lomas Financial
Corporation and Texas Commerce Bank
National Association as Trustee.
================================================================
LOMAS FINANCIAL CORPORATION
And
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
Trustee
Indenture
Dated as of November 1, 1991
___________________
$140,000,000
9% Senior Convertible Notes Due 2003
================================================================
<PAGE>
TABLE OF CONTENTS*
____________
Page
----
PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Authorization of Indenture. . . . . . . . . . . . . . . . 1
Form of Face of Security. . . . . . . . . . . . . . . . . 1
Form of Trustee's Certificate of Authentication . . . . . 2
Form of Reverse of Security . . . . . . . . . . . . . . . 2
Form of Conversion Notice . . . . . . . . . . . . . . . . 4
Compliance with Legal Requirements. . . . . . . . . . . . 5
Purpose of and Consideration for Indenture. . . . . . . . 5
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined . . . . . . . . . . . . . 30
Adjusted Consolidated Debt. . . . . . . . . . . 31
Applicable Percentage . . . . . . . . . . . . . 31
Asset Sale Event. . . . . . . . . . . . . . . . 32
Authorized Officer. . . . . . . . . . . . . . . 32
Board of Directors. . . . . . . . . . . . . . . 32
Capital Stock . . . . . . . . . . . . . . . . . 32
Capitalized Lease . . . . . . . . . . . . . . . 32
Commission. . . . . . . . . . . . . . . . . . . 32
Common Stock. . . . . . . . . . . . . . . . . . 32
Consolidated Debt . . . . . . . . . . . . . . . 32
Consolidated Net Income . . . . . . . . . . . . 32
Consolidated Subsidiary . . . . . . . . . . . . 33
Consolidated Tangible Net Worth . . . . . . . . 33
Consummation Date . . . . . . . . . . . . . . . 33
Corporate Trust Office. . . . . . . . . . . . . 33
Debt. . . . . . . . . . . . . . . . . . . . . . 33
Designated Event. . . . . . . . . . . . . . . . 34
Event of Default. . . . . . . . . . . . . . . . 35
FHLMC . . . . . . . . . . . . . . . . . . . . . 35
FNMA. . . . . . . . . . . . . . . . . . . . . . 35
Foreclosure Claims Receivables. . . . . . . . . 35
Full Rating Category. . . . . . . . . . . . . . 35
GNMA. . . . . . . . . . . . . . . . . . . . . . 35
GNMA Lines. . . . . . . . . . . . . . . . . . . 35
Guarantee . . . . . . . . . . . . . . . . . . . 36
Holder, holder of Securities, Securityholders . 36
Incurrence. . . . . . . . . . . . . . . . . . . 36
Indenture . . . . . . . . . . . . . . . . . . . 36
Investment Grade. . . . . . . . . . . . . . . . 36
Investment Line Debt. . . . . . . . . . . . . . 36
Issuer. . . . . . . . . . . . . . . . . . . . . 36
Lien. . . . . . . . . . . . . . . . . . . . . . 36
Liquidity Support Trust Note. . . . . . . . . . 37
LIS . . . . . . . . . . . . . . . . . . . . . . 37
LIS Subcommittee. . . . . . . . . . . . . . . . 37
LIS Technical Advisory Board. . . . . . . . . . 37
LMUSA . . . . . . . . . . . . . . . . . . . . . 37
Moody's . . . . . . . . . . . . . . . . . . . . 37
*The Table of Contents is not part of this Indenture.
Page
----
Mortgage Warehouse Debt . . . . . . . . . . . . 37
Net Income. . . . . . . . . . . . . . . . . . . 37
Non-Recourse Debt . . . . . . . . . . . . . . . 38
Non-Recourse Subsidiary . . . . . . . . . . . . 38
1934 Act. . . . . . . . . . . . . . . . . . . . 38
Officers' Certificate . . . . . . . . . . . . . 38
Opinion of Counsel. . . . . . . . . . . . . . . 38
Outstanding . . . . . . . . . . . . . . . . . . 38
Permitted Liens . . . . . . . . . . . . . . . . 39
Permitted Payment . . . . . . . . . . . . . . . 39
Person. . . . . . . . . . . . . . . . . . . . . 39
Plan. . . . . . . . . . . . . . . . . . . . . . 39
Property. . . . . . . . . . . . . . . . . . . . 39
Public Notice . . . . . . . . . . . . . . . . . 39
Rating Agency . . . . . . . . . . . . . . . . . 39
Rating Date . . . . . . . . . . . . . . . . . . 40
Rating Decline. . . . . . . . . . . . . . . . . 40
Redeemable Stock. . . . . . . . . . . . . . . . 40
Redemption Event. . . . . . . . . . . . . . . . 40
Responsible Officer . . . . . . . . . . . . . . 40
Restricted Payment. . . . . . . . . . . . . . . 40
Security or Securities. . . . . . . . . . . . . 41
Standard & Poor's . . . . . . . . . . . . . . . 41
Subsidiary. . . . . . . . . . . . . . . . . . . 41
Trading Day . . . . . . . . . . . . . . . . . . 41
Trustee . . . . . . . . . . . . . . . . . . . . 41
Trust Indenture Act of 1939 . . . . . . . . . . 41
Vista Properties. . . . . . . . . . . . . . . . 41
Wholly-Owned Subsidiary . . . . . . . . . . . . 41
ARTICLE TWO
ISSUE, EXECUTION, FORM AND REGISTRATION OF SECURITIES
SECTION 2.1 Authentication and Delivery of Securities . . . 41
SECTION 2.2 Execution of Securities . . . . . . . . . . . . 42
SECTION 2.3 Certificate of Authentication . . . . . . . . . 42
SECTION 2.4 Form, Denomination and Date of Securities;
Payments of Interest. . . . . . . . . . . . . 42
SECTION 2.5 Registration, Transfer and Exchange . . . . . . 43
SECTION 2.6 Mutilated, Defaced, Destroyed, Lost and
Stolen Securities . . . . . . . . . . . . . . 44
SECTION 2.7 Cancellation of Securities; Destruction
Thereof . . . . . . . . . . . . . . . . . . . 45
SECTION 2.8 Temporary Securities. . . . . . . . . . . . . . 45
SECTION 2.9 Computation of Interest . . . . . . . . . . . . 46
ARTICLE THREE
COVENANTS OF THE ISSUER AND THE TRUSTEE
SECTION 3.1 Payment of Principal and Interest . . . . . . . 46
SECTION 3.2 Offices for Payments, etc.. . . . . . . . . . . 46
SECTION 3.3 Appointment to Fill a Vacancy in Office
of Trustee. . . . . . . . . . . . . . . . . . 46
SECTION 3.4 Paying Agents . . . . . . . . . . . . . . . . . 46
SECTION 3.5 Certificate to Trustee. . . . . . . . . . . . . 47
Page
----
SECTION 3.6 Securityholders' Lists. . . . . . . . . . . . . 48
SECTION 3.7 Reports by the Issuer . . . . . . . . . . . . . 48
SECTION 3.8 Reports by the Trustee. . . . . . . . . . . . . 48
SECTION 3.9 Limitation on Restricted Payments . . . . . . . 48
SECTION 3.10 Debt Limitation . . . . . . . . . . . . . . . . 49
SECTION 3.11 Limitation on Liens . . . . . . . . . . . . . . 50
SECTION 3.12 Certain LIS Expenditures. . . . . . . . . . . . 50
SECTION 3.13 LMUSA Debt. . . . . . . . . . . . . . . . . . . 50
SECTION 3.14 Stay, Extension and Usury Laws. . . . . . . . . 50
SECTION 3.15 Corporate Existence; Compliance with Laws . . . 50
SECTION 3.16 Acquisitions of Vista Properties
Capital Stock . . . . . . . . . . . . . . . . 51
ARTICLE FOUR
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 4.1 Event of Default Defined; Acceleration of
Maturity; Waiver of Default . . . . . . . . . 51
SECTION 4.2 Collection of Indebtedness by Trustee;
Trustee May Prove Debt. . . . . . . . . . . . 53
SECTION 4.3 Application of Proceeds . . . . . . . . . . . . 55
SECTION 4.4 Suits for Enforcement . . . . . . . . . . . . . 56
SECTION 4.5 Restoration of Rights on Abandonment of
Proceedings . . . . . . . . . . . . . . . . . 56
SECTION 4.6 Limitations on Suits by Securityholders . . . . 57
SECTION 4.7 Powers and Remedies Cumulative; Delay
or Omission Not Waiver of Default . . . . . . 57
SECTION 4.8 Control by Securityholders. . . . . . . . . . . 58
SECTION 4.9 Waiver of Past Defaults . . . . . . . . . . . . 58
ARTICLE FIVE
CONCERNING THE TRUSTEE
SECTION 5.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default. . . . . . . 59
SECTION 5.2 Certain Rights of the Trustee . . . . . . . . . 60
SECTION 5.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application
of Proceeds Thereof . . . . . . . . . . . . . 61
SECTION 5.4 Trustee and Agents May Hold Securities;
Collections, etc. . . . . . . . . . . . . . . 61
SECTION 5.5 Moneys Held by Trustee. . . . . . . . . . . . . 62
SECTION 5.6 Compensation and Indemnification of Trustee
and Its Prior Claim . . . . . . . . . . . . . 62
SECTION 5.7 Right of Trustee to Rely on Officers'
Certificate, etc. . . . . . . . . . . . . . . 62
SECTION 5.8 Persons Eligible for Appointment as Trustee . . 63
SECTION 5.9 Resignation and Removal; Appointment of
Successor Trustee . . . . . . . . . . . . . . 63
SECTION 5.10 Acceptance of Appointment by Successor
Trustee . . . . . . . . . . . . . . . . . . . 64
SECTION 5.11 Merger, Conversion, Consolidation or
Succession to Business of Trustee . . . . . . 65
<PAGE>
ARTICLE SIX
CONCERNING THE SECURITYHOLDERS
Page
----
SECTION 6.1 Evidence of Action Taken by
Securityholders . . . . . . . . . . . . . . . 65
SECTION 6.2 Proof of Execution of Instruments and of
Holding of Securities; Record Date. . . . . . 65
SECTION 6.3 Holders to be Treated as Owners . . . . . . . . 66
SECTION 6.4 Securities Owned by Issuer Deemed Not
Outstanding . . . . . . . . . . . . . . . . . 66
SECTION 6.5 Right of Revocation of Action Taken . . . . . . 67
ARTICLE SEVEN
SUPPLEMENTAL DEBENTURES
SECTION 7.1 Supplemental Indentures Without Consent
of Securityholders. . . . . . . . . . . . . . 67
SECTION 7.2 Supplemental Indentures With Consent of
Securityholders . . . . . . . . . . . . . . . 68
SECTION 7.3 Effect of Supplemental Indenture. . . . . . . . 69
SECTION 7.4 Documents to Be Given to Trustee. . . . . . . . 69
SECTION 7.5 Notation on Securities in Respect of
Supplemental Indentures . . . . . . . . . . . 69
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.1 Covenant Not to Merge, Consolidate, Sell or
Convey Property Except Under Certain
Conditions. . . . . . . . . . . . . . . . . . 70
SECTION 8.2 Successor Corporation Substituted . . . . . . . 70
SECTION 8.3 Opinion of Counsel to Trustee . . . . . . . . . 71
ARTICLE NINE
SATISFACTION AND DISCHARGE OF INDENTURE,
UNCLAIMED MONEYS
SECTION 9.1 Satisfaction and Discharge of Indenture . . . . 71
SECTION 9.2 Application by Trustee of Funds Deposited
for Payment of Securities . . . . . . . . . . 72
SECTION 9.3 Repayment of Moneys Held by Paying Agent. . . . 72
SECTION 9.4 Return of Moneys Held by Trustee and
Paying Agent Unclaimed for Three Years. . . . 72
ARTICLE TEN
MISCELLANEOUS PROVISIONS
SECTION 10.1 Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual
Liability . . . . . . . . . . . . . . . . . . 72
SECTION 10.2 Provisions of Indenture for the Sole Benefit
of Parties and Securityholders. . . . . . . . 73
Page
----
SECTION 10.3 Successors and Assigns of Issuer Bound by
Indenture . . . . . . . . . . . . . . . . . . 73
SECTION 10.4 Notices and Demands on Issuer, Trustee and
Securityholders . . . . . . . . . . . . . . . 73
SECTION 10.5 Officers' Certificates and Opinions of
Counsel; Statements to be Contained
Therein . . . . . . . . . . . . . . . . . . . 73
SECTION 10.6 Payments Due on Saturdays, Sundays and
Holidays. . . . . . . . . . . . . . . . . . . 74
SECTION 10.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939 . . . . . . . . . 75
SECTION 10.8 NEW YORK LAW TO GOVERN. . . . . . . . . . . . . 75
SECTION 10.9 Counterparts. . . . . . . . . . . . . . . . . . 75
SECTION 10.10 Effect of Headings. . . . . . . . . . . . . . . 75
SECTION 10.11 Usury Savings Clause. . . . . . . . . . . . . . 75
ARTICLE ELEVEN
REDEMPTION OF SECURITIES AT ISSUER'S OPTION;
SINKING FUND
SECTION 11.1 Right of Optional Redemption; Prices. . . . . . 76
SECTION 11.2 Notice of Redemption; Partial Redemptions . . . 76
SECTION 11.3 Payment of Securities Called for Redemption . . 77
SECTION 11.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption. . . 78
SECTION 11.5 Mandatory Sinking Fund. . . . . . . . . . . . . 78
ARTICLE TWELVE
CONVERSION OF SECURITIES
SECTION 12.1 Conversion Privilege. . . . . . . . . . . . . . 81
SECTION 12.2 Exercise of Conversion Privilege. . . . . . . . 81
SECTION 12.3 Fractional Interests. . . . . . . . . . . . . . 82
SECTION 12.4 Conversion Price. . . . . . . . . . . . . . . . 82
SECTION 12.5 Adjustment of Conversion Price. . . . . . . . . 82
SECTION 12.6 Continuation of Conversion Privilege in
Case of Reclassification, Change, Merger,
Consolidation or Sale of Assets . . . . . . . 85
SECTION 12.7 Notice of Certain Events. . . . . . . . . . . . 86
SECTION 12.8 Taxes on Conversion . . . . . . . . . . . . . . 87
SECTION 12.9 Issuer to Provide Stock . . . . . . . . . . . . 87
SECTION 12.10 Disclaimer of Responsibility for Certain
Matters . . . . . . . . . . . . . . . . . . . 88
SECTION 12.11 Return of Funds Deposited for Redemption of
Converted Securities. . . . . . . . . . . . . 88
ARTICLE THIRTEEN
REDEMPTION OF SECURITIES AT HOLDER'S OPTION
SECTION 13.1 Right to Redemption . . . . . . . . . . . . . . 88
SECTION 13.2 Applicability of Article. . . . . . . . . . . . 89
SECTION 13.3 Notice of Redemption Event and Asset Sale
Event . . . . . . . . . . . . . . . . . . . . 89
SECTION 13.4 Notice of Election. . . . . . . . . . . . . . . 90
Page
----
SECTION 13.5 Deposit of Funds. . . . . . . . . . . . . . . . 90
SECTION 13.6 Securities Payable on Redemption Date . . . . . 90
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . 91
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 91
ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . 91
SCHEDULE I--Liens Existing as of the Date of this
Indenture. . . . . . . . . . . . . . . . . . . .A-1
<PAGE>
THIS INDENTURE, dated as of November 1, 1991 between Lomas
Financial Corporation, a Delaware corporation (the "Issuer"), and
Texas Commerce Bank National Association, a national banking
association (the "Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue of its 9%
Senior Convertible Notes Due 2003 (the "Securities") and, to
provide, among other things, for the authentication, delivery and
administration thereof, the Issuer has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, the Securities and the Trustee's certificate of
authentication shall be in substantially the following form:
[FORM OF FACE OF SECURITY]
THIS SECURITY MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE
TRANSFERRED PRIOR TO THE DAY AFTER TEN "TRADING DAYS" (AS DEFINED
IN PROPOSED TREASURY REGULATION SECTION 1.1273-2(c)(l)) FOLLOWING
THE CONSUMMATION DATE AS DEFINED IN THE INDENTURE REFERRED TO ON
THE REVERSE HEREOF, EXCEPT AS PROVIDED IN SUCH INDENTURE.
No. $
Lomas Financial Corporation
9% Senior Convertible Note Due 2003
Lomas Financial Corporation, a Delaware corporation (the
"Issuer"), for value received hereby promises to pay to ___________
________________________________ or registered assigns the
principal sum of ______________________ Dollars at the Issuer's
office or agency for said purpose in The City of New York on
October 31, 2003, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the
payment of public and private debts, and to pay interest, semi-
annually on April 30 and October 31 of each year, on said principal
sum in like coin or currency at the rate per annum set forth above
at said office or agency from the April 30 or the October 31, as
the case may be, next preceding the date of this Security to which
interest on the Securities has been paid or duly provided for,
unless the date hereof is a date to which interest on the Securi-
ties has been paid or duly provided for, in which case from the
date of this Security, or unless no interest has been paid or duly
provided for on the Securities, in which case from November 1,
1991, until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is
after April 15 or October 15, as the case may be, and before the
following April 30 or October 31, this Security shall bear interest
from such April 30 or October 31; provided, that if the Issuer
shall default in the payment of interest due on such April 30 or
October 31, then this Security shall bear interest from the next
preceding April 30 or October 31 to which interest on the Securi-
ties has been paid or duly provided for, or, if no interest has
been paid or duly provided for on the Securities since the original
issue date of the Securities, from November 1, 1991. The interest
so payable on any April 30 or October 31 will, except as otherwise
provided in the Indenture referred to on the reverse hereof, be
paid to the person in whose name this Security is registered at the
close of business on the April 15 or October 15 preceding such
April 30 or October 31, whether or not such day is a business day;
provided that interest may be paid, at the option of the Issuer, by
mailing a check therefor payable to the registered holder entitled
thereto at his last address as it appears on the Security register.
Reference is made to the further provisions set forth on the
reverse hereof and provisions giving the holder hereof the right to
convert this Security into Common Stock of the Issuer on the terms
and subject to the conditions and limitations referred to on the
reverse hereof, as more fully specified in said Indenture.
Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.
This Security shall not be valid or obligatory until the
certificate of authentication hereon shall have been duly signed by
the Trustee acting under the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed under its corporate seal.
Dated:
[SEAL]
________________________________________
________________________________________
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities referred to in the within-
mentioned indenture.
Texas Commerce Bank National Association,
as Trustee
________________________________________
Authorized Signatory
[FORM OF REVERSE OF SECURITY]
Lomas Financial Corporation
9% Senior Convertible Note Due 2003
This Security is one of a duly authorized issue of debt
securities of the Issuer, limited to the aggregate principal amount
of $140,000,000 (except as otherwise provided in the Indenture
mentioned below), issued or to be issued pursuant to an indenture
dated as of November 1, 1991 (the "Indenture"), duly executed and
delivered by the Issuer to Texas Commerce Bank National Associa-
tion, Trustee (herein called the "Trustee"). Reference is hereby
made to the Indenture and all indentures supplemental thereto for
a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Issuer and the
holders (the words "holders" or "holder" meaning the registered
holders or registered holder) of the Securities.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all the
Securities may be declared due and payable, in the manner and with
the effect, and subject to the conditions, provided in the
Indenture. The Indenture provides that in certain events such
declaration and its consequences may be waived by the holders of a
majority in aggregate principal amount of the Securities then
outstanding and that, prior to any such declaration, such holders
may waive any past default under the Indenture and its consequences
except a default in the payment of principal of or premium, if any,
or interest on any of the Securities. Any such consent or waiver by
the holder of this Security (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Security and any
Security which may be issued in exchange or substitution therefor,
whether or not any notation thereof is made upon this Security or
such other Securities.
The Indenture permits the Issuer and the Trustee, with the
consent of the holders of not less than a majority in aggregate
principal amount of the Securities at the time outstanding,
evidenced as in the Indenture provided, to execute supplemental
indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the
holders of the Securities; provided that no such supplemental
indenture shall (a) extend the maturity of any Security, or reduce
the principal amount thereof, or reduce the rate or extend the time
of payment of interest thereon, or reduce any amount payable on the
redemption thereof, or alter the Issuer's obligation to make any
mandatory sinking fund payment, or impair or affect the rights of
any Securityholder to institute suit for the payment or conversion
thereof, or impair the right of any Securityholder to require the
Issuer to redeem any Security pursuant to Article 13 of the
Indenture or materially and adversely affect the right to convert
the Securities into Common Stock of the Issuer without the consent
of the holder of each Security so affected; or (b) reduce the
aforesaid percentage of Securities, the consent of the holders of
which is required for any such supplemental indenture, without the
consent of the holders of all Securities then outstanding.
Subject to the provisions of the Indenture, the holder of this
Security has the right, at his option, at any time until and
including, but not after the close of business on, October 31, 2003
(except that, in case this Security or a portion hereof shall be
called for redemption and the Issuer shall not thereafter default
in making due provision for the payment of the redemption price,
such right shall terminate with respect to this Security or such
portion hereof at the close of business on the date fixed for
redemption), to convert the principal of this Security, or any
portion thereof which is $1,000 or an integral multiple of $1,000,
into fully paid and non-assessable shares of Common Stock of the
Issuer, as said shares shall be constituted at the date of
conversion, at the conversion price of $17.50 in principal amount
of Securities for each share of such Common Stock, or at the
adjusted conversion price in effect at the date of conversion if an
adjustment has been made, determined as provided in the Indenture,
upon surrender of this Security to the Issuer at the office or
agency of the Issuer maintained for the purpose in The City of New
York, together with a fully executed notice substantially in the
form set forth at the foot hereof which notice states that the
holder elects so to convert this Security (or any portion hereof
which is an integral multiple of $1,000) and, if this Security is
surrendered for conversion during the period between the close of
business on April 15 or October 15 in any year and the opening of
business on the following April 30 or October 31 and has not been
called for redemption on a redemption date within such period (or
on such April 30 or October 31), accompanied by payment of an
amount equal to the interest payable on such April 30 or October 31
on the principal amount of the Security being surrendered for
conversion. Except as provided in the preceding sentence or as
otherwise expressly provided in the Indenture, no payment or
adjustment shall be made on account of interest accrued on this
Security (or portion thereof) so converted or on account of any
dividend or distribution on any such Common Stock issued upon
conversion. If so required by the Issuer or the Trustee, this
Security, upon surrender for conversion as aforesaid, shall be duly
endorsed by, or be accompanied by instruments of transfer, in form
satisfactory to the Issuer, duly executed by, the holder or by his
duly authorized attorney. The conversion price from time to time in
effect is subject to adjustment as provided in the Indenture. No
fractions of shares will be issued on conversion, but an adjustment
in cash will be made for any fractional interest as provided in the
Indenture.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation
of the Issuer, which is absolute and unconditional, to pay the
principal of and premium, if any, and interest on this Security at
the place, times, and rate, and in the currency, herein prescribed.
The Securities are issuable only as registered Securities
without coupons in denominations of $1,000 and any integral
multiple of $1,000.
Upon due presentment for registration of transfer of this
Security at the above-mentioned office or agency of the Issuer, a
new Security or Securities of authorized denominations, for a like
aggregate principal amount, will be issued to the transferee as
provided in the Indenture. No service charge shall be made for any
such transfer, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto.
The Securities may be redeemed at the option of the Issuer as
a whole, or from time to time in part, on any date on or after
October 31, 1993, upon mailing a notice of such redemption not less
than 30 nor more than 60 days prior to the date fixed for redemp-
tion to the holders of Securities to be redeemed, all as provided
in the Indenture, at the following redemption prices (expressed as
percentages of the principal amount) together in each case with
accrued and unpaid interest to the date fixed for redemption:
If redeemed during the twelve-month period beginning October 31,
<PAGE>
Year Percentage
---- ----------
1993 . . . . . . . . . . . . . . . 107.2%
1994 . . . . . . . . . . . . . . . 106.3%
1995 . . . . . . . . . . . . . . . 105.4%
1996 . . . . . . . . . . . . . . . 104.5%
1997 . . . . . . . . . . . . . . . 103.6%
1998 . . . . . . . . . . . . . . . 102.7%
1999 . . . . . . . . . . . . . . . 101.8%
2000 . . . . . . . . . . . . . . . 100.9%
and at 100% if redeemed on or after October 31, 2001; provided that
if the date fixed for redemption is an April 30 or October 31, then
the interest payable on such date shall be paid to the holder of
record on the next preceding April 15 or October 15.
Upon the occurrence of a Redemption Event (as defined in the
Indenture), the holder of this Security may require the Issuer to
redeem this Security or any portion hereof that is an integral
multiple of $1,000 principal amount at 101% of the principal amount
hereof plus accrued and unpaid interest to the date of redemption,
as set forth in the Indenture.
Subject to payment by the Issuer of a sum sufficient to pay
the amount due on redemption, interest on this Security (or portion
hereof if this Security is redeemed in part) shall cease to accrue
upon the date duly fixed for redemption of this Security (or
portion hereof if this Security is redeemed in part).
The Securities are also subject to redemption through the
operation of the sinking fund provided for in the Indenture, on
October 31, 1997, and on each October 31, thereafter to and
including October 31, 2002, on notice as set forth above and at
100% of the principal amount thereof, the sinking fund redemption
price, together with accrued interest to the date fixed for
redemption.
The Issuer, the Trustee, and any authorized agent of the
Issuer or the Trustee, may deem and treat the registered holder
hereof as the absolute owner of this Security (whether or not this
Security shall be overdue and notwithstanding any notation of
ownership or other writing hereon made by anyone other than the
Issuer or the Trustee or any authorized agent of the Issuer or the
Trustee), for the purpose of receiving payment of, or on account
of, the principal hereof and premium, if any, and, subject to the
provisions on the face hereof, interest hereon and for all other
purposes, and neither the Issuer nor the Trustee nor any authorized
agent of the Issuer or the Trustee shall be affected by any notice
to the contrary.
No recourse shall be had for the payment of the principal of
or premium, if any, or the interest on this Security, for any claim
based hereon, or otherwise in respect hereof, or based on or in
respect of the Indenture or any indenture supplemental thereto,
against any incorporator, shareholder, officer or director, as
such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule
of law or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and
as part of the consideration for the issue hereof, expressly waived
and released.
[FORM OF CONVERSION NOTICE]
To: Lomas Financial Corporation
The undersigned owner of this Security hereby: (i) irrevocably
exercises the option to convert this Security, or the portion
hereof below designated, for shares of Common Stock ($1.00 par
value per share) of Lomas Financial Corporation in accordance with
the terms of the Indenture referred to in this Security and (ii)
directs that such shares of Common Stock deliverable upon the
conversion, together with any check in payment for fractional
shares and any Security(ies) representing any unconverted principal
amount hereof, be issued and delivered to the registered holder
hereof unless a different name has been indicated below. If shares
are to be delivered registered in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto. Any amount required to be paid by the
undersigned on account of interest accompanies this Security.
Dated
______________________________
Signature
<PAGE>
Fill in for registration of shares if to be delivered, and of
Securities if to be issued, otherwise than to and in the name of
the registered holder.
______________________________
Social Security or Other
Taxpayer Identifying Number
______________________________
(Name)
______________________________
(Street Address)
______________________________
(City, State and Zip Code)
(Please print name and address)
Principal Amount to be Converted:
(if less than all)
$________________________________
AND WHEREAS, all things necessary to make the Securities, when
executed by the Issuer and authenticated and delivered by the
Trustee as in this Indenture provided, the valid, binding and legal
obligations of the Issuer, and to constitute these presents a valid
indenture and agreement according to its terms, have been done;
NOW, THEREFORE:
In consideration of the premises, the Issuer and the Trustee
mutually covenant and agree for the equal and proportionate benefit
of the respective holders from time to time of the Securities as
follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following terms (except
as otherwise expressly provided or unless the context otherwise
clearly requires) for all purposes of this Indenture and of any
indenture supplemental hereto shall have the respective meanings
specified in this Section. All other terms used in this Indenture
which are defined in the Trust Indenture Act of 1939 or the
definitions of which in the Securities Act of 1933 are referred to
in the Trust Indenture Act of 1939 (except as herein otherwise
expressly provided or unless the context otherwise clearly
requires), shall have the meanings assigned to such terms in said
Trust Indenture Act and in said Securities Act as in force at the
date of this Indenture. All accounting terms used herein and not
expressly defined shall have the meanings given to them in
accordance with generally accepted accounting principles, and the
term "generally accepted accounting principles" shall mean such
accounting principles which are generally accepted at the date or
time of any computation. The words "herein", "hereof" and "hereun-
der" and other words of similar import refer to this Indenture as
a whole and not to any particular Article, Section or other
subdivision. The terms defined in this Article include the plural
as well as the singular.
"Adjusted Consolidated Debt" of any Person means at any date
the Consolidated Debt of such Person and its Consolidated Subsid-
iaries, less (i) Mortgage Warehouse Debt, (ii) Debt incurred to
finance the carrying of Foreclosure Claims Receivables with respect
to which GNMA, FNMA, FHMLC or any similar governmental or quasi-
governmental agency is obligor, (iii) Debt outstanding pursuant to
GNMA Lines or similar lines of credit required to be maintained by
GNMA or other similar governmental or another quasi-governmental
agency, (iv) Debt incurred for working capital purposes in an
aggregate principal amount not to exceed .15% of the aggregate
unpaid principal amount of LMUSA's mortgage servicing portfolio,
(v) Debt evidenced by mortgage-backed securities issued by LMUSA or
any of its subsidiaries in the ordinary course of business, (vi)
Investment Line Debt, (vii) contingent obligations of the type
specified in clause (iii) of the definition of Debt, to the extent
that they support obligations that do not constitute Debt and
(viii) Guarantees of Debt of the type specified in the foregoing
clauses (i) through (vii), in each case as of the date of determi-
nation.
"Applicable Percentage" means (i) in the case of each
distribution referred to in clause (v) of the definition of
"Designated Event," the percentage determined as of the Calculation
Date of each such distribution by dividing the aggregate fair
market value (as determined in good faith by the Board of Directors
of the Issuer, whose determination shall be conclusive) of such
distribution, by the fair market value (based on the Current Market
Price) of all of the shares of capital stock outstanding on the day
immediately prior to such Calculation Date, and (ii) in the case of
each purchase or acquisition referred to therein, the percentage
determined as of the Calculation Date of each such purchase or
acquisition by dividing all amounts expended by the Issuer and its
Subsidiaries (the amount expended, if other than in cash, to be
determined in good faith by the Board of Directors, whose determi-
nation shall be conclusive) in connection with the purchase or
acquisition of any shares of any class of capital stock, by the
fair market value (based on the Current Market Price) of all of the
shares of capital stock outstanding on the day immediately prior to
such Calculation Date. The term "Current Market Price" means the
average of the daily closing prices (or, if none, the average of
the last daily bid and asked prices) of the applicable class of
capital stock as reported for composite transactions on the
securities exchanges on which such stock is traded, or, if none,
the primary inter-dealer quotation system which reports quotations
for such stock, for the trading days during the period of 90
consecutive calendar days ending on the day immediately preceding
the Calculation Date.
"Asset Sale Event" means the sale by the Issuer to any Person
other than a Consolidated Subsidiary of the Issuer in any transac-
tion of (i) a number of shares of common stock of LMUSA which
together with all previous sales by the Issuer to Persons other
than Consolidated Subsidiaries of the Issuer, is greater than 25%
of the largest number of such shares (adjusted to give effect to
any stock splits, stock dividends or subdivisions or combinations
of such stock) owned by the Issuer at any time prior to such sale
or (ii) a number of shares of common stock of LIS which together
with all previous sales by the Issuer to Persons other than
Consolidated Subsidiaries of the Issuer, is greater than 25% of the
largest number of such shares (adjusted to give effect to any stock
splits, stock dividends or subdivisions or combinations of such
stock) owned by the Issuer at any time prior to such sale.
"Authorized Officer" means (i) the chairman of the Board of
Directors, the chief financial officer or the chief accounting
officer of the Issuer, (ii) any officer succeeding to or performing
the responsibilities of any of the officers listed in clause (i) or
(iii) any other officer of the Issuer whose responsibilities
require knowledge of any of the material provisions or requirements
of this Indenture.
"Board of Directors" means either the Board of Directors of
the Issuer or any committee of such Board duly authorized to act
hereunder.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations and other equivalents (however
designated) of such Person's capital stock whether now outstanding
or issued after the date of this Indenture.
"Capitalized Lease" means, as applied to any Person, any lease
of any Property (whether real, personal or mixed) under which, in
conformity with generally accepted accounting principles, the
discounted present value of the rental obligations of such Person
as lessee, is required to be capitalized on the balance sheet of
that Person.
"Commission" means the Securities and Exchange Commission, or
if at any time after the date of this Indenture such Commission is
not existing and performing the duties now assigned to it under the
1934 Act, then the body performing such duties at such time.
"Common Stock" means the Common Stock of the Issuer as the
same exists at the date of execution and delivery of this Indenture
or as such stock may be reconstituted from time to time.
"Consolidated Debt" means the Debt of any Person and its
Consolidated Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles.
"Consolidated Net Income" of any Person for any period means
the Net Income of such Person and its Consolidated Subsidiaries for
such period, determined on a consolidated basis in accordance with
generally accepted accounting principles; provided that there shall
be excluded (i) the Net Income of any Person other than a Consoli-
dated Subsidiary in which such Person or any of its Consolidated
Subsidiaries has a joint interest with a third party except to the
extent of the amount of dividends and distributions actually paid
to such Person or a Consolidated Subsidiary during such period and
(ii) except to the extent includible pursuant to the foregoing
clause (i), the Net Income of any Person accrued prior to the date
it becomes a Subsidiary of such Person or is merged into or
consolidated with such Person or any of its Subsidiaries or that
Person's assets are acquired by such Person or any of its Subsid-
iaries.
"Consolidated Subsidiary" of any Person means a Subsidiary
which for financial reporting purposes is or, in accordance with
generally accepted accounting principles, should be, accounted for
by such Person as a consolidated subsidiary.
"Consolidated Tangible Net Worth" of any Person means at any
date the consolidated stockholders' equity of such Person and its
Consolidated Subsidiaries less their consolidated Intangible
Assets, all determined as of such date. For purposes of this
definition "Intangible Assets" means the amount (to the extent
reflected in determining such consolidated stockholders' equity) of
all unamortized debt discount and expense, unamortized deferred
charges, goodwill, reorganization value in excess of amounts
allocable to identifiable assets, patents, trademarks, service
marks, trade names, copyrights, organization or developmental
expenses and other intangible assets; provided that Intangible
Assets shall not include purchased future mortgage servicing income
rights or other similar income producing rights customarily
purchased by leading participants in the mortgage finance industry
to the extent reflected in determining consolidated stockholders'
equity.
"Consummation Date" means the date on which the Securities are
first issued. This date may be obtained from the Trustee.
"Corporate Trust Office" means the office of the Trustee at
which the corporate trust business of the Trustee shall, at any
particular time, be principally administered, which office is, at
the date as of which this Indenture is dated, located at 601
Travis, 8th Floor, Houston, Texas 77002 8TCT39.
"Debt" of any Person means, at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (iii) all obligations of such Person in
respect of letters of credit or bankers' acceptances or similar
obligations (or reimbursement obligations with respect thereto),
(iv) all obligations of such Person as lessee under Capitalized
Leases, (v) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person,
(vi) all Debt of others Guaranteed by such Person other than
Guarantees of obligations of utility districts or municipalities
and Guarantees of development obligations of others, in each case
in effect on the date of this Indenture, (vii) all obligations of
such Person to pay the deferred and unpaid purchase price of
property or services, except trade payables and accrued expenses
incurred in the ordinary course of business and (viii) Redeemable
Stock of such Person valued at the highest of the mandatory
redemption price payable at the option of the holder, the liquida-
tion preference thereof or the face amount of Debt issuable upon
conversion thereof.
"Designated Event" means any one or more of the following
events which shall occur:
(i)(a) the Issuer shall convey, transfer or lease all or
substantially all of its assets to any Person or (b) the
Issuer shall consolidate with or merge into any other Person
or any other Person shall consolidate with or merge into the
Issuer in either event pursuant to a merger or consolidation
in which any common stock of the Issuer outstanding immediate-
ly prior to the effectiveness thereof is cancelled or changed
into or exchange for cash, securities or other property,
provided that such transaction between the Issuer and its
Subsidiaries shall be excluded from the operation of this
clause (i);
(ii) any Person, including a "group" (within the meaning
of Section 13(d) and 14(d)(2) of the 1934 Act), which includes
such Person, shall purchase or otherwise acquire, directly or
indirectly, beneficial ownership of securities of the Issuer
and, as a result of such purchase or acquisition, any Person
(together with its associates and affiliates), other than the
Issuer or any Subsidiary, shall directly or indirectly
beneficially own in the aggregate (a) 30% or more of the
common stock of the Issuer, or (b) securities representing 30%
or more of the combined voting power of the Issuer's voting
securities, in each case under clause (a) or (b) outstanding
on the date immediately prior to the date of such purchase or
acquisition (or, if there be more than one, the last such
purchase or acquisition);
(iii) the Issuer or any Subsidiary shall purchase or
otherwise acquire, directly or indirectly, beneficial owner-
ship of capital stock of the Issuer if, after giving effect to
such purchase or acquisition, the Issuer (together with all
Subsidiaries) shall have acquired, during any period of 12
consecutive months, beneficial ownership of an aggregate of
30% or more of the capital stock of the Issuer outstanding on
the date immediately prior to the first such purchase or
acquisition during such period (taking into account any stock
splits, stock dividends or similar transactions effected
during such period);
(iv) during any period of two consecutive years, individ-
uals who at the beginning of such period constitute the
Issuer's Board of Directors (together with any new Director
whose election by the Issuer's Board of Directors or whose
nomination for election by the Issuer's stockholders was
approved by a vote of at least two-thirds of the Directors
then still in office who either were Directors at the begin-
ning of such period or whose election or nomination for
election was previously so approved) cease for any reason to
constitute a majority of the Directors then in office; or
(v) on any date (a "Calculation Date") (i)(a) the Issuer
shall make distribution or distributions of cash, securities
or other properties (other than regular periodic cash divi-
dends at a rate which is substantially consistent with past
practice, including past practice with respect to increases in
dividends, and other than distributions of common stock or
rights to acquire common stock or preferred stock substantial-
ly equivalent to common stock of the Issuer) to holders of
capital stock of the Issuer, whether by means of dividend,
reclassification, recapitalization or otherwise, or (b) the
Issuer or any Subsidiary shall purchase or otherwise acquire,
directly or indirectly, beneficial ownership of capital stock
of the Issuer, and (ii) the sum of the Applicable Percentages
of all such distributions, purchases and acquisitions which
have occurred on the Calculation Date and during the 365-day
period immediately preceding the Calculation Date shall exceed
30%.
"Event of Default" means any event or condition specified as
such in Section 4.1 which shall have continued for the period of
time, if any, therein designated.
"FHLMC" means Federal Home Loan Mortgage Corporation and its
successors.
"FNMA" means Federal National Mortgage Association and its
successors.
"Foreclosure Claims Receivables" means, at any date, payments
due to any of the Issuer's Subsidiaries in respect of advances of
principal, interest, fees, expenses or similar disbursements
arising in connection with foreclosure proceedings on properties
securing mortgages in such Subsidiary's servicing portfolio.
"Full Rating Category" means (i) with respect to Standard &
Poor's, any of the following categories in descending order: AAA,
AA, A, BBB, BB, B, CCC, CC and C, (ii) with respect to Moody's, any
of the following categories in descending order: Aaa, Aa, A, Baa,
Ba, B, Caa, Ca and C and (iii) with respect to any other rating
agency, the equivalent of any category of Standard & Poor's or
Moody's used by the other rating agency. In determining whether the
rating of the Securities has decreased by the equivalent of one
Full Rating Category, gradation within Full Range Categories (+ and
- - for Standard & Poor's; 1, 2, and 3 for Moody's; or the equivalent
gradation for another rating agency) shall be taken into account
(e.g. with respect to Standard & Poor's a decline in rating from
BB- to B- will constitute a decrease of one Full Rating Category,
and a decline in rating from BB- to B will constitute a decrease of
less than one Full Rating Category).
"GNMA" means Government National Mortgage Association and its
successors.
"GNMA Lines" means one or more lines of credit or similar
arrangements entered into by the Issuer or any of its Subsidiaries
for the purpose of assuring timely payment of the GNMA guaranty fee
and of amounts due holders of GNMA securities.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any
Debt or other obligation of any other Person and, without limiting
the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase
or pay (or advance or supply funds for the purchase or payment of)
such Debt or other obligation of such other Person (whether arising
by virtue of partnership arrangements, by agreement to keep well,
to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii)
entered into for the purpose of assuring in any other manner the
obligee of such Debt or other obligations of the payment thereof or
to protect such obligee against loss in respect thereof (in whole
or in part); provided that the term Guarantee shall not include
endorsements for deposit or collection in the ordinary course of
business. The term "Guarantee" used as verb has a correlative
meaning.
"Holder", "holder of Securities", "Securityholder" or other
similar terms means the registered holder of any Security.
"Incurrence" means the incurrence, creation, assumption or in
any other manner becoming liable with respect to or becoming
responsible for the payment of, or the extension of the maturity
of, any Debt. The term "Incur" has a correlative meaning.
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so
amended or supplemented.
"Investment Grade" means a rating of not less than Baa3, in
the case of a rating by Moody's or a rating of not less than BBB-,
in the case of a rating by Standard & Poor's, or the equivalent of
such ratings by Standard & Poor's or Moody's or by any other rating
agency.
"Investment Line Debt" means Debt of the Issuer or any of its
Subsidiaries secured by (i) cash, (ii) United States Treasury
securities, (iii) certificates of deposit of any bank with capital,
surplus and undivided profits aggregating at least $100,000,000,
and having a Thompson Bank Watch, Inc. peer group rating of at
least C or a Standard & Poor's long-term debt rating of at least
BBB or a Moody's long-term debt rating of at least Baa, (iv)
mortgage-backed securities Guaranteed by GNMA, FNMA or FHLMC or (v)
commercial paper rated at least A-2 or P-2 by Standard & Poor's or
Moody's; but in each case only that portion of such Debt that is
secured by collateral with a value equal to or greater than the
Debt.
"Issuer" means (except as otherwise provided in Article Five)
Lomas Financial Corporation, a Delaware corporation, and, subject
to Article Eight, its successors and assigns.
"Lien" means, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind
in respect of such Property or any interest therein. For the
purposes of this Indenture, the Issuer 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, Capitalized Lease or other title retention
arrangement relating to such Property.
"Liquidity Support Trust Note" means a promissory note
substantially in the form of Exhibit N to the Plan payable by the
Issuer to the trustee and its successors in such capacity under the
Liquidity Support Trust Agreement dated as of November 1, 1991
among the Issuer, ST Lending, Inc. and J.P. Morgan Delaware,
Trustee.
"LIS" means Lomas Information Systems, Inc., a Nevada
corporation.
"LIS Subcommittee" means a committee or subcommittee of the
Board of Directors, a majority of the members of which committee or
subcommittee will at all times be directors who are not employees
or officers of the Issuer.
"LIS Technical Advisory Board" means a group of at least three
persons who are not employees or officers of the Issuer, designated
by the LIS Subcommittee as soon as practicable after the Consumma-
tion Date to advise it will respect to all matters pertaining to
LIS' Excelis-MLS mortgage loan servicing system, including the
planning, implementation and rollout of the system to its existing
customers. The LIS Technical Advisory Board will focus, without
limitation, on costs, schedules, quality, operations, organization-
al effectiveness, requirements and business rationale, in all cases
from both a system management and a quality assurance perspective.
The LIS Technical Advisory Board will remain active for as long as
the LIS Subcommittee deems appropriate, but at least as long as
required to assure compliance by the Issuer with Section 3.12.
"LMUSA" means Lomas Mortgage USA, Inc., a Connecticut
corporation.
"Moody's" means Moody's Investors Service, Inc. and its
successors.
"Mortgage Warehouse Debt" means, at any date, Debt of any
Person secured by mortgage loans, mortgage notes, mortgage-backed
securities or any combination thereof owned by such Person.
"Net Income" of any Person for any period means the net income
or loss of such Person for such period plus any tax expense
recorded on the books of such Person for such period which will
never be required to be paid in cash and which has arisen solely
from the application of net operating loss carryforwards of the
consolidated tax group of which the Issuer was the common parent
for taxable years ending on or before the Consummation Date,
determined in accordance with generally accepted accounting
principles, except that extraordinary and non-recurring gains and
losses, as determined in accordance with generally accepted
accounting principles, shall be excluded.
"Non-Recourse Debt" means Debt or that portion of Debt (i) as
to which neither the Issuer nor any of it Subsidiaries (other than
a Non-Recourse Subsidiary) (a) provides credit support (including
any undertaking, agreement or instrument which would constitute
Debt), (b) is directly or indirectly liable or (c) constitutes the
lender and (ii) no default with respect to which (including any
rights which the holders thereof may have to take enforcement
action against a Non-Recourse Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Debt of the
Issuer or any Subsidiary (other than a Non-Recourse Subsidiary) to
declare a default on such other Debt or cause the payment thereof
to be accelerated or payable prior to its stated maturity.
"Non-Recourse Subsidiary" means a Subsidiary which has no Debt
other than Non-Recourse Debt.
"1934 Act" means the Securities Exchange Act of 1934, as
amended.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board of Directors or the President or any Vice
President (whether or not designated by a number or numbers or a
word or words added before or after the title "Vice President") and
by the Treasurer or the Secretary or any Assistant Secretary of the
Issuer and delivered to the Trustee. Each such certificate shall
comply with Section 314 of the Trust Indenture Act of 1939 and
include the statements provided for in Section 10.5.
"Opinion of Counsel" means, in the case of the opinion of
counsel required to be delivered pursuant to Section 8.1 herein, an
opinion in writing signed by regular outside legal counsel, and, in
all other cases, an opinion in writing signed by regular outside
legal counsel to, or the general counsel of, the Issuer or by other
counsel satisfactory to the Trustee. Each such opinion shall comply
with Section 314 of the Trust Indenture Act and include the
statements provided for in Section 10.5, if and to the extent
required hereby.
"Outstanding", when used with reference to Securities, subject
to the provisions of Section 6.4, means, as of any particular time,
all Securities authenticated and delivered by the Trustee under
this Indenture, except
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have
been deposited in trust with the Trustee or with any paying
agent (other than the Issuer) or shall have been set aside,
segregated and held in trust by the Issuer (if the Issuer
shall act as its own paying agent), provided that if such
Securities are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as herein
provided, or provision satisfactory to the Trustee shall have
been made for giving such notice; and
(c) Securities in substitution for which other Securi-
ties shall have been authenticated and delivered, or which
shall have been paid, pursuant to the terms of Section 2.6
(unless proof satisfactory to the Trustee is presented that
any of such Securities is held by a person in whose hands such
Security is a legal, valid and binding obligation of the
Issuer), Securities converted into Common Stock pursuant
hereto and Securities not deemed outstanding pursuant to
Section 11.2.
"Permitted Liens" means, (i) Liens existing as of the date of
this Indenture, as set forth in Schedule I hereto; (ii) rights of
banks to set off deposits against debts owed to said bank; (iii)
Liens securing Debt Incurred to purchase Property or improvements
thereon so long as (a) such Liens apply only to the Property or
improvements purchased with the proceeds of such Debt, and
accessions to, improvements on or proceeds of such Property or
improvements and (b) such Liens attach within 180 days after the
acquisition of such Property or completion of such improvements and
(iv) any extension, renewal or replacement, in whole or in part, of
any Lien described in the foregoing clauses (i) through (iii),
provided that any such extension, renewal or replacement shall not
extend to any other Property of the Issuer other than such item of
Property originally covered by such Lien or any improvements
thereof, or additions or accessions thereto.
"Permitted Payment" means (i) any dividend on shares of the
Issuer's Capital Stock payable solely in shares of the Issuer's
Capital Stock or in options, warrants or other rights to purchase
the Issuer's Capital Stock and (ii) the repurchase or other
acquisition or retirement for value of any shares of the Issuer's
Capital Stock, with additional shares of, or out of the proceeds of
a substantially contemporaneous issuance of, the Issuer's Capital
Stock.
"Person" means an individual or, a corporation, a partnership,
an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means the Joint Plan of Reorganization in In Re Lomas
Financial Corporation, et al. (Case Nos. 89 B 12471 through
89 B 12478 inclusive) confirmed by the United States Bankruptcy
Court for the Southern District of New York.
"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 under generally accepted accounting principles.
"Public Notice" means any filing or report made in accordance
with the requirements of the Commission or any press release or
public announcement made by the Issuer.
"Rating Agency" shall mean Standard & Poor's and Moody's, or,
if Standard & Poor's or Moody's or both shall not make a rating on
the Securities publicly available, a nationally recognized
securities rating agency or agencies, as the case may be, selected
by the Issuer, which shall be substituted for Standard & Poor's or
Moody's or both, as the case may be.
"Rating Date" shall mean the date that is 121 days prior to
Public Notice of the occurrence of a Designated Event.
"Rating Decline" shall be deemed to occur if on any date
within the 90-day period following Public Notice of the occurrence
of a Designated Event (which period shall be extended so long as
the rating of the Securities is under publicly announced consider-
ation for possible downgrade by a Rating Agency) (i) in the event
the Securities are rated by any Rating Agency on the Rating Date as
Investment Grade, the rating on the Securities by such Rating
Agency shall be below Investment Grade, or (ii) in the event the
Securities are rated by any Rating Agency on the Rating Date below
Investment Grade, the rating on the Securities by such Rating
Agency shall be at least one Full Rating Category below the rating
of the Securities by such Rating Agency on the Rating Date.
"Redeemable Stock" means any class or series of Capital Stock
of any Person that by its terms or otherwise is (i) required to be
redeemed prior to the stated maturity of the Securities, (ii)
redeemable at the option of the holder thereof at any time prior to
the stated maturity of the Securities or (iii) convertible into or
exchangeable for Debt or Capital Stock referred to in clause (i) or
(ii) having a scheduled maturity prior to the stated maturity of
the Securities; provided that any Capital Stock which would not
constitute Redeemable Stock but for provisions thereof giving
holders thereof the right to require the Issuer to repurchase or
redeem such Capital Stock upon the occurrence of a change of
control occurring prior to the final maturity of the Securities
shall not constitute Redeemable Stock if the change of control
provisions applicable to such Capital Stock are no more favorable
to the holders of such Capital Stock than the provisions contained
in Section 13.1 and such Capital Stock specifically provides that
the Issuer will not repurchase or redeem any such stock pursuant to
such provisions prior to the Issuer's redemption of such Securities
as are required to be redeemed pursuant to the provisions of
Section 13.1.
"Redemption Event" means the occurrence of both a Designated
Event and a Rating Decline.
"Responsible Officer" means, when used with respect to the
Trustee, the chairman of the board of directors, any vice chairman
of the board of directors, the chairman of the trust committee, the
chairman of the executive committee, any vice chairman of the
executive committee, the president, any vice president (whether or
not designated by numbers or words added before or after the title
"vice president"), any trust officer, any assistant trust officer,
any assistant vice president, or any other officer or assistant
officer of the Trustee customarily performing functions similar to
those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is
referred because of his knowledge of and familiarity with the
particular subject.
"Restricted Payment" means (i) any dividend or other distribu-
tion on any shares of the Issuer's Capital Stock or (ii) any
payment on account of the purchase, redemption, retirement or other
acquisition of (a) any shares of the Issuer's Capital Stock or (b)
any option, warrant or other right to acquire shares of the
Issuer's Capital Stock (excluding debt securities convertible into
the Issuer's Capital Stock). Notwithstanding the foregoing,
"Restricted Payment" shall not include any Permitted Payment.
"Security" or "Securities" means any Note or Notes, as the
case may be, authenticated and delivered under this Indenture.
"Standard & Poor's" means Standard & Poor's Corporation and
its successors.
"Subsidiary" means, with respect to any Person, any corpora-
tion or other entity of which a majority of the Capital Stock or
other ownership interests having ordinary voting power to elect a
majority of the Board of Directors or other Persons performing
similar functions are at the time directly or indirectly owned by
such Person.
"Trading Day" has the meaning set forth in Section 12.5(h).
"Trustee" means the entity identified as "Trustee" in the
first paragraph hereof and, subject to the provisions of Article
Five, shall also include any successor trustee.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 7.1, 7.2 and 12.6) means the Trust Indenture Act of 1939
as in force at the date as of which this Indenture was originally
executed.
"Vista Properties" means Vista Properties, Inc., a Nevada
corporation, and its successors.
"Wholly-Owned Subsidiary" means with respect to any Person a
Subsidiary the voting stock of which is more than 90% owned by such
Person.
ARTICLE TWO
ISSUE, EXECUTION, FORM AND REGISTRATION OF SECURITIES
SECTION 2.1 Authentication and Delivery of Securities.
Upon the execution and delivery of this Indenture, or from time to
time thereafter, Securities in an aggregate principal amount not in
excess of the amount specified in the form of Security hereinabove
recited (except as otherwise provided in Section 2.6 and in respect
of distributions made pursuant to Paragraph 4.12 of the Plan) may
be executed by the Issuer and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and
deliver said Securities to or upon the written order of the Issuer,
signed by both (a) its Chairman of the Board of Directors, or any
Vice Chairman of the Board of Directors, or its President or any
Vice President (whether or not designated by a number or numbers or
a word or words added before or after the title "Vice President")
and (b) by its Treasurer or any Assistant Treasurer without any
further action by the Issuer.
SECTION 2.2 Execution of Securities. The Securities shall
be signed on behalf of the Issuer by both (a) its Chairman of the
Board of Directors or any Vice Chairman of the Board of Directors
or its President or any Vice President (whether or not designated
by a number or numbers or a word or words added before or after the
title "Vice President") and (b) by its Treasurer or any Assistant
Treasurer or its Secretary or any Assistant Secretary, under its
corporate seal which may, but need not, be attested. Such signa-
tures may be the manual or facsimile signatures of the present or
any future such officers. The seal of the Issuer may be in the form
of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Securities. Typographical and other
minor errors or defects in any such reproduction of the seal or any
such signature shall not affect the validity or enforceability of
any Security which has been duly authenticated and delivered by the
Trustee.
In case any officer of the Issuer who shall have signed any of
the Securities shall cease to be such officer before the Security
so signed shall be authenticated and delivered by the Trustee or
disposed of by the Issuer, such Security nevertheless may be
authenticated and delivered or disposed of as though the person who
signed such Security had not ceased to be such officer of the
Issuer; and any Security may be signed on behalf of the Issuer by
such persons as, at the actual date of the execution of such
Security, shall be the proper officers of the Issuer, although at
the date of the execution and delivery of this Indenture any such
person was not such officer.
SECTION 2.3 Certificate of Authentication. Only such
Securities as shall bear thereon a certificate of authentication
substantially in the form hereinbefore recited, executed by the
Trustee by manual signature of one of its authorized officers,
shall be entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. Such certificate by the Trustee upon
any Security executed by the Issuer shall be conclusive evidence
that the Security so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits
of this Indenture.
SECTION 2.4 Form, Denomination and Date of Securities;
Payments of Interest. The Securities and the Trustee's certifi-
cates of authentication shall be substantially in the form recited
above. The Securities shall be issuable as registered securities
without coupons and in denominations provided for in the form of
Security above recited. The Securities shall be numbered, lettered,
or otherwise distinguished in such manner or in accordance with
such plans as the officers of the Issuer executing the same may
determine with the approval of the Trustee.
Any of the Securities may be issued with appropriate inser-
tions, omissions, substitutions and variations, and may have
imprinted or otherwise reproduced thereon such legend or legends,
not inconsistent with the provisions of this Indenture, as may be
required to comply with any law or with any rules or regulations
pursuant thereto, or with the rules of any securities market in
which the Securities are admitted to trading, or to conform to
general usage.
Each Security shall be dated the date of its authentication,
shall bear interest from the applicable date and shall be payable
on the dates specified on the face of the form of Security recited
above.
The person in whose name any Security is registered at the
close of business on any record date with respect to any interest
payment date shall be entitled to receive the interest, if any,
payable on such interest payment date notwithstanding any transfer
or exchange of such Security subsequent to the record date and
prior to such interest payment date, or, subject, in the case of
conversion of such Security during such period, to Section 12.2,
except if and to the extent the Issuer shall default in the payment
of the interest due on such interest payment date, in which case
such defaulted interest shall be paid to the persons in whose names
outstanding Securities are registered at the close of business on
a subsequent record date (which shall be not less than five
business days prior to the date of payment of such defaulted
interest) established by notice given by mail by or on behalf of
the Issuer to the holders of Securities not less than 15 days
preceding such subsequent record date. The term "record date" as
used with respect to any interest payment date (except a date for
payment of defaulted interest) shall mean the April 15 or October
15, as the case may be, next preceding such interest payment date,
whether or not such record date is a business day.
SECTION 2.5 Registration, Transfer and Exchange. The
Issuer will keep or cause to be kept at each office or agency to be
maintained for the purpose as provided in Section 3.2 a register or
registers in which, subject to such reasonable regulations as it
may prescribe, it will register, and will register the transfer of,
Securities as in this Article provided. Such register shall be in
written form in the English language or in any other form capable
of being converted into such form within a reasonable time. At all
reasonable times such register or registers shall be open for
inspection by the Trustee. Notwithstanding the foregoing, the
Issuer will not register the transfer of any Security presented
prior to the day after ten "trading days" (as defined in Proposed
Treasury Regulation Section 1.1273-2(c)(1)) following the Consumma-
tion Date, other than any transfer by a Distribution Agent (as
defined in the Plan) in respect of distributions of Securities
pursuant to the Plan.
Upon due presentation for registration of transfer of any
Security at each such office or agency, the Issuer shall execute
and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Security or Securities in autho-
rized denominations for a like aggregate principal amount.
Any Security or Securities may be exchanged for a Security or
Securities in other authorized denominations, in an equal aggregate
principal amount. Securities to be exchanged shall be surrendered
at each office or agency to be maintained by the Issuer for the
purpose as provided in Section 3.2, and the Issuer shall execute
and the Trustee shall authenticate and deliver in exchange therefor
the Security or Securities which the Securityholder making the
exchange shall be entitled to receive, bearing numbers not
contemporaneously outstanding.
All Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer
or the Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the
Issuer and the Trustee duly executed by, the holder or his attorney
duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover
any transfer tax or other similar governmental charge that may be
imposed in connection with any exchange or registration of transfer
of Securities (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Sections
2.8, 7.5 and 11.3). No service charge shall be made for any such
transaction.
The Issuer shall not be required to exchange or register a
transfer of (a) any Securities for a period of 15 days next
preceding the first mailing of notice of redemption of Securities
to be redeemed, or (b) any Securities selected, called or being
called for redemption except, in the case of any Security where
public notice has been given that such Security is to be redeemed
in part, the portion thereof not so to be redeemed.
All Securities issued upon any transfer or exchange of
Securities shall be valid obligations of the Issuer, evidencing the
same debt, and entitled to the same benefits under this Indenture,
as the Securities surrendered upon such transfer or exchange.
SECTION 2.6 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. If (i) any mutilated Security is surrendered to the
Trustee or if there shall be delivered to the Issuer and to the
Trustee evidence to their satisfaction of the destruction, loss or
theft of any Security and (ii) there shall be delivered to the
Issuer and to the Trustee such security and indemnity as may be
required by them to indemnify and defend and to save each of them
and any agent of either harmless, then, in the absence of notice to
the Issuer or the Trustee that such Security has been acquired by
a bona fide purchaser, the Issuer shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any
such mutilated, destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
Upon the issuance of any substitute Security, the Issuer may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee)
connected therewith. In case any Security which has matured or is
about to mature, or has been called for redemption in full, or is
being surrendered for conversion in full shall become mutilated or
defaced or be apparently destroyed, lost or stolen, the Issuer may,
instead of issuing a substitute Security, with the holder's
consent, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated or defaced
Security), if the applicant for such payment shall furnish to the
Issuer and to the Trustee and any agent of the Issuer or the
Trustee such security or indemnity as any of them may require to
save each of them harmless from all risks, however remote, and, in
every case of apparent destruction, loss or theft, the applicant
shall also furnish to the Issuer and the Trustee and any agent of
the Issuer or the Trustee evidence to their satisfaction of the
apparent destruction, loss or theft of such Security and of the
ownership thereof.
Every substitute Security issued pursuant to the provisions of
this Section by virtue of the fact that any Security is apparently
destroyed, lost or stolen shall constitute an additional contractu-
al obligation of the Issuer, whether or not the apparently
destroyed, lost or stolen Security shall be at any time enforceable
by anyone and shall be entitled to all the benefits of (but shall
be subject to all the limitations of rights set forth in) this
Indenture equally and proportionately with any and all other
Securities duly authenticated and delivered hereunder. All
Securities shall be held and owned upon the express condition that,
to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment or conversion
of mutilated, defaced, or apparently destroyed, lost or stolen
Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.7 Cancellation of Securities; Destruction
Thereof. All Securities surrendered for payment, redemption,
registration of transfer or exchange, or conversion if surrendered
to the Issuer or any agent of the Issuer or the Trustee, shall be
delivered to the Trustee for cancellation or, if surrendered to the
Trustee, shall be cancelled by it; and no Securities shall be
issued in lieu thereof except as expressly permitted by any of the
provisions of this Indenture. The Trustee shall destroy cancelled
Securities held by it and deliver a certificate of destruction to
the Issuer. If the Issuer shall acquire any of the Securities, such
acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Securities unless and until
the same are delivered to the Trustee for cancellation.
SECTION 2.8 Temporary Securities. Pending the preparation
of definitive Securities, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities (printed,
lithographed, typewritten or otherwise reproduced, in each case in
form satisfactory to the Trustee). Temporary Securities shall be
issuable as registered Securities without coupons, of any autho-
rized denomination, and substantially in the form of the definitive
Securities but with such omissions, insertions and variations as
may be appropriate for temporary Securities, all as may be
determined by the Issuer with the concurrence of the Trustee.
Temporary Securities may contain such reference to any provision of
this Indenture as may be appropriate. Every temporary Security
shall be executed by the Issuer and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Securities. Without unreason-
able delay the Issuer shall execute and shall furnish definitive
Securities and thereupon temporary Securities may be surrendered in
exchange therefor without charge at each office or agency to be
maintained by the Issuer for the purpose pursuant to Section 3.2,
and the Trustee shall authenticate and deliver in exchange for such
temporary Securities a like aggregate principal amount of defini-
tive Securities of authorized denominations. Until so exchanged the
temporary Securities shall be entitled to the same benefits under
this Indenture as definitive Securities.
SECTION 2.9 Computation of Interest. Interest on the
Securities shall be computed on the basis of a 360-day year of
twelve 30-day months.
ARTICLE THREE
COVENANTS OF THE ISSUER AND THE TRUSTEE
SECTION 3.1 Payment of Principal and Interest. The Issuer
covenants and agrees that it will duly and punctually pay or cause
to be paid the principal of and premium, if any, and interest on,
each of the Securities at the place or places, at the respective
times and in the manner provided in the Securities. Each install-
ment of interest on the Securities may be paid by mailing checks
for such interest payable to or upon the written order of the
holders of Securities entitled thereto as they shall appear on the
registry books of the Issuer.
SECTION 3.2 Offices for Payments, etc. So long as any of
the Securities remain outstanding, the Issuer will maintain in The
City of New York, the following: (a) an office or agency where the
Securities may be presented for payment, (b) an office or agency
where the Securities may be presented for registration of transfer
and for exchange and conversion as in this Indenture provided and
(c) an office or agency where notices and demands to or upon the
Issuer in respect of the Securities or of this Indenture may be
served. The Issuer will give to the Trustee prompt written notice
of the location of any such office or agency and of any change of
location thereof. The Issuer hereby initially designates Texas
Commerce Trust Company of New York, 80 Broad Street Suite 400, New
York, New York 10004, as the office or agency for each such
purpose. In case the Issuer shall fail to maintain any such office
or agency or shall fail to give such notice of the location or of
any change in the location thereof, presentations and demands may
be made and notices may be served at Texas Commerce Trust Company
of New York at the address set forth above.
SECTION 3.3 Appointment to Fill a Vacancy in Office of
Trustee. The Issuer, whenever necessary to avoid or fill a vacancy
in the office of Trustee, will appoint, in the manner provided in
Section 5.9, a Trustee, so that there shall at all times be a
Trustee hereunder.
SECTION 3.4 Paying Agents. Whenever the Issuer shall
appoint a paying agent other than the Trustee, it will cause such
paying agent to execute and deliver to the Trustee an instrument
which such agent shall agree with the Trustee, subject to the
provisions of this Section,
(a) that it will hold all sums received by it as such
agent for the payment of the principal of and premium, if any,
and interest on the Securities (whether such sums have been
paid to it by the Issuer or by any other obligor on the
Securities) in trust for the benefit of the holders of the
Securities or of the Trustee,
(b) that it will give the Trustee notice of any failure
by the Issuer (or by any other obligor on the Securities) to
make any payment of the principal of and premium, if any, and
interest on the Securities when the same shall be due and
payable, and
(c) that it will pay any such sums so held in trust by
it to the Trustee upon the Trustee's written request at any
time during the continuance of the failure referred to in
clause (b) above.
The Issuer will, prior to each due date of the principal of
and premium, if any, or interest on the Securities, deposit with
the paying agent a sum sufficient to pay such principal and
premium, if any, or interest, and (unless such paying agent is the
Trustee) the Issuer will promptly notify the Trustee of any failure
to take such action.
If the Issuer shall act as its own paying agent, it will, on
or before each due date of the principal of and premium, if any, or
interest on the Securities, set aside, segregate and hold in trust
for the benefit of the holders of the Securities a sum sufficient
to pay such principal and premium, if any, or interest so becoming
due. The Issuer will promptly notify the Trustee of any failure to
take such action.
Anything in this Section to the contrary notwithstanding, the
Issuer may at any time, for the purpose of obtaining a satisfaction
and discharge of this Indenture or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by the
Issuer or any paying agent hereunder, as required by this Section,
such sums to be held by the Trustee upon the trusts herein
contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section are
subject to the provisions of Sections 9.3 and 9.4.
SECTION 3.5 Certificate to Trustee. The Issuer will
furnish to the Trustee:
(a) within 15 days after each May 15 and November 15 of
each year (beginning with May 15, 1992) an Officers' Certifi-
cate executed by the principal executive, financial or
accounting officer of the Issuer, stating whether the signors,
after due inquiry, know of any breach of any of the conditions
or covenants under the Indenture or any Event of Default or
event which after notice or the lapse of time, or both, would
become an Event of Default which occurred during the two
fiscal quarters of the Issuer ended immediately prior to the
date of such Officers' Certificate. If either of the signors
of the Officers' Certificate knows that such a breach, Event
of Default or event occurred, the certificate shall describe
such breach, Event of Default or event, and its status; and
(b) within five days after an Authorized Officer of the
Issuer obtains knowledge of any breach of any of the condi-
tions or covenants under the Indenture or any Event of Default
or event which after notice or the lapse of time, or both,
would become an Event of Default, and such breach. Event of
Default or event is then continuing, an Officers' Certificate
setting forth the details thereof and the action which the
Issuer is taking or proposes to take with respect thereto.
SECTION 3.6 Securityholders' Lists. If and so long as the
Trustee shall not be the Security registrar, the Issuer will
furnish or cause to be furnished to the Trustee a list in such form
as the Trustee may reasonably require of the names and addresses of
the holders of the Securities pursuant to Section 312 of the Trust
Indenture Act of 1939 (a) semi-annually not more than 15 days after
each record date for the payment of semi-annual interest on the
Securities, as hereinabove specified, as of such record date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request as
of a date not more than 15 days prior to the time such information
is furnished.
SECTION 3.7 Reports by the Issuer. The Issuer will file
with the Trustee any reports or information which it is required to
file with the Commission pursuant to Section 13 or 15(d) of the
1934 Act within 15 days of making any such filing with the
Commission. At any time it is not subject to the information and
reporting requirements of Section 13 of the 1934 Act, the Issuer
will furnish to the Trustee (i) within 90 days following the end of
each fiscal year of the Issuer, an annual report of the Issuer
containing audited consolidated financial statements and notes
thereto, together with an opinion thereon expressed by an indepen-
dent public accounting firm of recognized standing, and (ii) within
45 days following the end of each of the first three fiscal
quarters in each fiscal year of the Issuer, quarterly reports of
the Issuer containing unaudited consolidated financial statements.
SECTION 3.8 Reports by the Trustee. Any Trustee's report
required under Section 313(a) of the Trust Indenture Act of 1939
shall be transmitted on or before the first date for the regular
payment of semi-annual interest on the Securities next succeeding
May 15 in each year, and shall be dated as of a date convenient to
the Trustee no more than 60 nor less than 45 days prior thereto
(unless such May 15 is less than 45 days prior to such interest
payment date, in which case such report shall be (a) so transmitted
on or before the second such interest payment date next succeeding
such May 15 and (b) as of a date determined as provided above).
SECTION 3.9 Limitation on Restricted Payments. The Issuer
will not, and will not permit any of its Subsidiaries to, directly
or indirectly, make any Restricted Payment, if:
(a) at the time of such Restricted Payment or after
giving effect thereto, an Event of Default or an event that
through the passage of time or the giving of notice, or both,
would become an Event of Default, shall have occurred and be
continuing; or
(b) after giving effect thereto, the aggregate amount of
all Restricted Payments made by the Issuer and its Subsidiar-
ies (the amount expended or distributed for such purposes, if
other than in cash, to be valued at its fair market value as
determined in good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a resolu-
tion of the Board of Directors delivered to the Trustee), from
and after the date of this Indenture shall exceed the sum
(without duplication) of:
(i) 50% of Consolidated Net Income (or, in the
event Consolidated Net Income is a deficit, then 100% of
such deficit) of the Issuer and its Consolidated Subsid-
iaries accrued for the period (taken as one accounting
period) commencing on January 1, 1992 to and including
the last day of the fiscal quarter ended immediately
prior to the date of such calculation; plus
(ii) the aggregate net proceeds, including the fair
market value of property other than cash (as determined
in good faith by the Board of Directors, whose determina-
tion shall be conclusive and evidenced by a resolution of
the Board of Directors delivered to the Trustee) received
by the Issuer from and after the date of this Indenture
from the issuance or sale (other than to a Subsidiary of
the Issuer) of its Capital Stock and warrants, options
and rights to purchase any such Capital Stock, but
excluding the net proceeds from the issuance, sale,
exchange, conversion or other disposition of its Capital
Stock convertible into or exchangeable for any security
other than its Capital Stock at the option of the holder
thereof or upon the happening of any event;
provided that the foregoing clause (b) shall not prevent the
payment of any dividend within 60 days after the date of its
declaration if such dividend could have been paid on the date
of its declaration without violation of the provisions of this
Section 3.9.
SECTION 3.10 Debt Limitation. The Issuer will not incur any
Debt if, after giving effect to such Debt and the receipt and
application of the proceeds thereof, the aggregate amount of
Adjusted Consolidated Debt of the Issuer shall exceed 230% of the
Issuer's Consolidated Tangible Net Worth; provided that the
foregoing limitation shall not apply to the incurrence of (i)
obligations of the type specified in clause (iii) of the definition
of Debt or Guarantees thereof, to the extent that they do not
support obligations that constitute Debt and (ii) indebtedness
evidenced by the Liquidity Support Trust Note. Notwithstanding the
foregoing, the Issuer may at any time incur Debt if, after giving
effect to such Debt and the receipt and application of the net
proceeds thereof, Debt of the Issuer outstanding pursuant to this
sentence does not exceed $35,000,000; provided that no Debt may be
incurred pursuant to this sentence that would not be permitted by
the next preceding sentence at any time after the amount of Debt
incurred or that could be incurred after the Consummation Date
under the next preceding sentence exceeds $45,000,000 at the end of
two consecutive fiscal quarters.
SECTION 3.11 Limitation on Liens. The Issuer will not incur
any Debt which is secured, directly or indirectly, by a Lien (other
than a Permitted Lien) on any Property, assets or income or profit
therefrom of the Issuer unless the Securities are equally and
ratably secured by such Lien for so long as such other Debt is
secured; provided that the restriction in this Section 3.11 shall
not apply to the Incurrence of such Debt if after giving effect to
such Incurrence the aggregate principal amount of all such Debt
then outstanding shall not exceed 5% of the Issuer's Consolidated
Tangible Net Worth as of the last day of the preceding fiscal
quarter.
SECTION 3.12 Certain LIS Expenditures. The Issuer will not
permit LIS to expend an aggregate of more than $25,000,000 after
July 1, 1991 in connection with the development, completion and
rollout of the Excelis-MLS system (the "System"), conversion of
LIS's service bureau customers to the System and the cost of
simultaneous operation and shutdown of LIS's UNISYS-based mortgage
servicing system, unless all such expenditures in excess of
$25,000,000 are approved by the LIS Subcommittee after the LIS
Subcommittee has received the advice of the LIS Technical Advisory
Board concerning such expenditures.
SECTION 3.13 LMUSA Debt. The Issuer will not permit LMUSA
or any of LMUSA's Subsidiaries to Incur any Debt (other than Debt
of a Wholly-Owned Subsidiary of LMUSA to LMUSA or another Wholly-
Owned Subsidiary of LMUSA) if, after giving effect to such Debt and
the receipt and application of the net proceeds thereof, the
aggregate amount of LMUSA's Adjusted Consolidated Debt shall exceed
200% of its Consolidated Tangible Net Worth as of the last day of
the preceding fiscal quarter; provided that the foregoing limita-
tion shall not apply to the incurrence of obligations of the type
specified in clause (iii) of the definition of Debt or Guarantees
thereof, to the extent that they do not support obligations that
constitute Debt.
SECTION 3.14 Stay, Extension and Usury Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, plead or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter, in force,
which may affect the covenants or the performance of this Inden-
ture; and the Issuer (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such
power as though no such law has been enacted.
SECTION 3.15 Corporate Existence; Compliance with Laws. (a)
Subject to Article Eight, the Issuer will do or cause to be done
all things necessary to preserve and keep in full force and effect
its corporate existence, rights (charter and statutory) and
franchises; provided, that the Issuer shall not be required to
preserve any right or franchise if the Board of Directors shall
determine that the preservation thereof is no longer desirable in
the conduct of the business of the Issuer and that the loss thereof
is not disadvantageous in any material respect to the Security-
holders.
(b) The Issuer will, and will cause each of its Subsidiaries
to, comply in all material aspects with its Certificate of
Incorporation and all applicable federal, state and local laws,
rules and regulations, except where the failure to so comply would
not have a material adverse effect on the business, financial
condition or results of operations of the Issuer and its Subsidiar-
ies taken as a whole.
SECTION 3.16 Acquisitions of Vista Properties Capital Stock.
The Issuer will not, and will not permit any of its Subsidiaries
to, acquire any additional shares of Capital Stock of Vista
Properties except (i) shares issued pursuant to any stock split,
stock dividend or similar transaction and (ii) shares acquired in
connection with any offering of such shares (or rights to purchase
such shares) to the extent that the percentage of outstanding
shares of Vista Properties Capital Stock owned by the Issuer and
its Subsidiaries after giving effect to such acquisition would not
exceed the percentage of outstanding shares of Vista Properties
Capital Stock owned by the Issuer on the Consummation Date.
ARTICLE FOUR
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 4.1 Event of Default Defined; Acceleration of
Maturity; Waiver of Default. In case one or more of the following
Events of Default (whatever the reason for such Event of Default
and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body) shall have occurred and be continuing, that is
to say:
(a) default in the payment of any installment of
interest upon any of the Securities as and when the same shall
become due and payable, and continuance of such default for a
period of 30 days; or
(b) default in the payment of all or any part of the
principal of or premium, if any, on any of the Securities as
and when the same shall become due and payable either at
maturity, upon any redemption, by declaration or otherwise; or
(c) default in the deposit of any sinking fund payment,
when and as due by the terms of any Security or this Inden-
ture; or
(d) failure on the part of the Issuer duly to observe or
perform any other of the covenants or agreements on the part
of the Issuer in the Securities or in this Indenture contained
for a period of 30 days after the date on which written notice
specifying such failure, stating that such notice is a "Notice
of Default" hereunder and demanding that the Issuer remedy the
same, shall have been given by registered or certified mail,
return receipt requested, to the Issuer by the Trustee, or to
the Issuer and the Trustee by the holders of at least 25% in
aggregate principal amount of the Securities at the time
outstanding; or
(e) a court having jurisdiction in the premises shall
enter a decree or order (i) for relief in respect of the
Issuer in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect;
(ii) adjudging the Issuer a bankrupt or insolvent or approving
a petition seeking reorganization, arrangement or composition
in respect of the Issuer under any applicable bankruptcy,
insolvency or other similar law; (iii) appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Issuer or for any substantial part of
the property of the Issuer; or (iv) ordering the winding-up or
liquidation of the Issuer's affairs; or
(f) the Issuer shall (i) commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect or any other case or proceeding to be
adjudicated a bankrupt or insolvent; (ii) shall consent to the
entry of an order for relief in an involuntary case under any
such law; (iii) shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or similar official) of the Issuer or
for any substantial part of the property of the Issuer; or
(iv) shall make any general assignment for the benefit of
creditors; or
(g) (i) the Issuer shall fail to pay when due at
maturity indebtedness for borrowed money having a principal
amount in excess of $5,000,000, or (ii) an event of default,
as defined in any indenture or instrument evidencing or under
which the Issuer has outstanding more than $5,000,000 princi-
pal amount of indebtedness for borrowed money, shall happen
and be continuing and such indebtedness shall have been
accelerated so that the same shall be or become due and
payable prior to the date on which the same would otherwise
have become due and payable; provided that if such event of
default under such indenture or instrument shall be remedied
or cured by the Issuer or waived by the holders of such
indebtedness, then the Event of Default hereunder by reason
thereof shall be deemed likewise to have been thereupon
remedied, cured or waived without further action upon the part
of either the Trustee or any of the Securityholders, and
provided further, however, that the Trustee shall not be
charged with knowledge of any such default unless written
notice thereof shall have been given to the Trustee by the
Issuer, by the holder or an agent of the holder of any such
indebtedness, by the trustee then acting under any indenture
or other instrument under which such default shall have
occurred, or by the holders of not less than 25% in aggregate
principal amount of the Securities at the time outstanding; or
(h) default to the Issuer or any of its Subsidiaries
(other than ST Lending, Inc. or any Non-Recourse Subsidiary)
in the making of any payment exceeding $5,000,000 pursuant to
any indenture or instrument evidencing or under which the
Issuer or such Subsidiary has at the date of this Indenture or
shall hereafter have outstanding indebtedness for borrowed
money; and such default shall not have been cured within ten
days after notice thereof shall have been given to the Issuer
and the Trustee by the holders of at least 50% in aggregate
principal amount of the Securities at the time outstanding;
then, and in each and every such case, unless the principal of all
of the Securities shall have already become due and payable, either
the Trustee or the holders of not less than 25% in aggregate
principal amount of the Securities then outstanding hereunder, by
notice in writing to the Issuer (and to the Trustee if given by
Securityholders), may declare the entire principal of all the
Securities and the interest accrued thereon, to be due and payable
immediately, and upon any such declaration the same shall become
immediately due and payable. This provision, however, is subject to
the condition that if, at any time after the principal of the
Securities shall have been so declared due and payable, and before
any judgment or decree for the payment of the moneys due shall have
been obtained or entered as hereinafter provided, the Issuer shall
pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Securities and the
principal and premium, if any, of any and all Securities which
shall have become due otherwise than by acceleration (with interest
upon such principal and, to the extent that payment of such
interest is enforceable under applicable law, on overdue install-
ments of interest, at the same rate as the rate of interest
specified in the Securities, to the date of such payment or
deposit) and such amount shall be sufficient to cover reasonable
compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and all other expenses
and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of negligence or bad
faith, and if any and all Events of Default under the Indenture,
other than the non-payment of the principal of Securities which
shall have become due by acceleration, shall have been cured,
waived or otherwise remedied as provided herein--then and in every
such case the holders of a majority in aggregate principal amount
of the Securities then Outstanding, by written notice to the Issuer
and to the Trustee, may waive all defaults and rescind and annual
such declaration and its consequences, but no such waiver or
rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.
SECTION 4.2 Collection of Indebtedness by Trustee; Trustee
May Prove Debt. The Issuer covenants that (a) in case default
shall be made in the payment of any installment of interest on any
of the Securities when such interest shall have become due and
payable, and such default shall have continued for a period of 30
days or (b) in case default shall be made in the payment of all or
any part of the principal of or premium, if any, on any of the
Securities when the same shall have become due and payable, whether
upon maturity or upon any redemption or by declaration or other-
wise--then upon demand of the Trustee, the Issuer will pay to the
Trustee for the benefit of the holders of the Securities the whole
amount that then shall have become due and payable on all such
Securities for principal, premium, if any, or interest, as the case
may be (with interest to the date of such payment upon the overdue
principal and premium, if any, and, to the extent that payment of
such interest is enforceable under applicable law, on overdue
installments of interest at the same rate as the rate of interest
specified in the Securities); and in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation to the Trustee and
each predecessor Trustee, their respective agents, attorneys and
counsel, and any expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee except
as a result of its negligence or bad faith.
Until such demand is made by the Trustee, the Issuer may pay
the principal of and interest on the Securities to the registered
holders, whether or not the Securities be overdue.
In case the Issuer shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the
sums so due and unpaid or to enforce the performance of any
provision of the Securities or this Indenture, and may prosecute
any such action or proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the Issuer or
other obligor upon the Securities and collect in the manner
provided by law out of the property of the Issuer or other obligor
upon the Securities, wherever situated the moneys adjudged or
decreed to be payable.
In case there shall be pending proceedings relative to the
Issuer or any other obligor upon the Securities under Title 11 of
the United States Code or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or in case a receiver,
assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other
obligor, or in case of any other comparable judicial proceedings
relative to the Issuer or other obligor upon the Securities, or to
the creditors or property of the Issuer or such other obligor, the
Trustee, irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declara-
tion or otherwise and irrespective of whether the Trustee shall
have made any demand pursuant to the provisions of this Section,
shall be entitled and empowered, by intervention in such proceed-
ings or otherwise:
(a) to file and prove a claim or claims for the whole
amount of principal, premium, if any, and interest owing and
unpaid in respect of the Securities, and to file such other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities in-
curred, and all advances made, by the Trustee and each
predecessor Trustee, except as a result of negligence or bad
faith) and of the Securityholders allowed in any judicial
proceedings relative to the Issuer or other obligor upon the
Securities, or to the creditors or property of the Issuer or
such other obligor,
(b) unless prohibited by applicable law and regulations,
to vote on behalf of the holders of the Securities in any
election of a trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in compara-
ble proceedings, and
(c) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute
all amounts received with respect to the claims of the
Securityholders and of the Trustee on their behalf; and any
trustee, receiver, or liquidator, custodian or other similar
official is hereby authorized by each of the Securityholders
to make payments to the Trustee, and, in the event that the
Trustee shall consent to the making of payments directly to
the Securityholders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the
Trustee, each predecessor Trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad
faith.
Nothing herein contained 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 or reorganization,
arrangement, adjustment or composition affecting the Securities or
the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such
proceeding except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities, may be enforced by the
Trustee without the possession of any of the Securities or the
production thereof on any trial or other proceedings relative
thereto, and any such action or proceedings instituted by the
Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys,
shall be for the ratable benefit of the holders of the Securities.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party) the Trustee shall
be held to represent all the holders of the Securities, and it
shall not be necessary to make any holders of the Securities
parties to any such proceedings.
SECTION 4.3 Application of Proceeds. Any moneys collected
by the Trustee pursuant to this Article shall be applied in the
following order at the date or dates fixed by the Trustee and, in
case of the distribution of such moneys on account of principal or
premium, if any, or interest, upon presentation of the several
Securities and stamping (or otherwise noting) thereon the payment,
or issuing Securities in reduced principal amounts in exchange for
the presented Securities if only partially paid, or upon surrender
thereof if fully paid:
FIRST: To the payment of costs and expenses, including
reasonable compensation to the Trustee and each predecessor
Trustee and their respective agents and attorneys and of all
expenses and liabilities incurred, and all advances made, by
the Trustee and each predecessor Trustee except as a result of
negligence or bad faith;
SECOND: A. In case the principal of the Securities
shall not have become and be then due and payable, to the
payment of interest in default in the order of the maturity of
the installments of such interest, with interest (to the
extent that such interest has been collected by the Trustee)
upon the overdue installments of interest at the same rate as
the rate of interest specified in the Securities, such
payments to be made ratably to the persons entitled thereto,
without discrimination or preference; or
B. In case the principal of the Securities shall have
become and shall be then due and payable, to the payment of
the whole amount then owing and unpaid upon all the Securities
for principal and premium, if any, and interest, with interest
upon the overdue principal and premium, if any, and (to the
extent that such interest has been collected by the Trustee)
upon overdue installments of interest at the same rate as the
rate of interest specified in the Securities; and in case such
moneys shall be insufficient to pay in full the whole amount
so due and unpaid upon the Securities, then to the payment of
such principal and premium, if any, and interest, without
preference or priority of principal and premium, if any, over
interest, or of interest over principal and premium, if any,
or of any installment of interest over any other installment
of interest, or of any Security over any other Security,
ratably to the aggregate of such principal and accrued and
unpaid interest; and
THIRD: To the payment of the remainder, if any, to the
Issuer or any other person lawfully entitled thereto or as a
court of competent jurisdiction may direct.
SECTION 4.4 Suits for Enforcement. In case an Event of
Default has occurred, has not been waived and is continuing, the
Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and
enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of
the exercise of any power granted in this Indenture or to enforce
any other legal or equitable right vested in the Trustee by this
Indenture or by law.
SECTION 4.5 Restoration of Rights on Abandonment of
Proceedings. In case the Trustee shall have proceeded to enforce
any right under this Indenture and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee, then and in every such case
the Issuer and the Trustee shall be restored respectively to their
former positions and rights hereunder, and all rights, remedies and
powers of the Issuer, the Trustee and the Securityholders shall
continue as though no such proceedings had been taken.
SECTION 4.6 Limitations on Suits by Securityholders. No
holder of any Security shall have any right by virtue or by
availing of any provision of this Indenture to institute any action
or proceeding at law or in equity or in bankruptcy or otherwise
upon or under or with respect to this Indenture, or for the
appointment of a trustee, receiver, liquidator, custodian or other
similar official or for any other remedy hereunder, unless such
holder previously shall have given to the Trustee written notice of
default and of the continuance thereof, as herein provided, and
unless also the holders of not less than 25% in aggregate principal
amount of the Securities then outstanding shall have made written
request upon the Trustee to institute such action or proceedings in
its own name as trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby
and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any
such action or proceedings and no direction inconsistent with such
written request shall have been given to the Trustee pursuant to
Section 4.8; it being understood and intended, and being expressly
covenanted by the taker and holder of every Security with every
other taker and holder and the Trustee, that no one or more holders
of Securities shall have any right in any manner whatever by virtue
or by availing of any provision of this Indenture to affect,
disturb or prejudice the rights of any other holder of Securities,
or to obtain or seek to obtain priority over or preference to any
other such holder or to enforce any right under this Indenture,
except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Securities. The foregoing shall
not apply to any suit instituted by any Securityholder for the
enforcement of any payment of principal of or premium, if any, or
interest on the Securities on or after the respective due dates
expressed herein. For the protection and enforcement of the provi-
sions of this Section, each and every Securityholder and the
Trustee shall be entitled to such relief as can be given either at
law or in equity.
SECTION 4.7 Powers and Remedies Cumulative; Delay or
Omission Not Waiver of Default. Except as provided in Section 2.6,
no right or remedy herein conferred upon or reserved to the Trustee
or to the Securityholders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right
or remedy.
No delay or omission of the Trustee or of any holder of any of
the Securities to exercise any right or power accruing upon any
Event of Default occurring and continuing as aforesaid shall impair
any such right or power or shall be construed to be a waiver of any
such Event of Default or an acquiescence therein; and, subject to
Section 4.6, every power and remedy given by this Indenture or by
law to the Trustee or to the Securityholders may be exercised from
time to time, and as often as shall be deemed expedient, by the
Trustee or by the Securityholders.
SECTION 4.8 Control by Securityholders. The holders of a
majority in aggregate principal amount of the Securities at the
time outstanding shall have the right to 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 the
Trustee by this Indenture; provided that such direction shall not
be otherwise than in accordance with law and the provisions of this
Indenture and provided further that (subject to the provisions of
Section 5.1) the Trustee shall have the right to decline to follow
any such direction if the Trustee, being advised by counsel, shall
determine that the action or proceeding so directed may not
lawfully be taken or if the Trustee in good faith by its board of
directors, the executive committee, or a trust committee of
directors or responsible officers of the Trustee shall determine
that the action or proceedings so directed would involve the
Trustee in personal liability or if the Trustee in good faith shall
so determine that the actions or forbearances specified in or
pursuant to such direction shall be unduly prejudicial to the
interests of holders of the Securities not joining in the giving of
said direction, it being understood that (subject to Section 5.1)
the Trustee shall have no duty to ascertain whether or not such
actions or forbearances are unduly prejudicial to such holders.
Nothing in this Indenture shall impair the right of the
Trustee in its discretion to take any action deemed proper by the
Trustee and which is not inconsistent with such direction by
Securityholders.
SECTION 4.9 Waiver of Past Defaults. Prior to the
declaration of the maturity of the Securities as provided in
Section 4.1, the holders of a majority in aggregate principal
amount of the Securities at the time outstanding may on behalf of
the holders of all the Securities waive any past default or Event
of Default hereunder and its consequences, except a default (a) in
the payment of principal of or premium, if any, or interest on any
of the Securities or in respect of conversion of the Securities or
(b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the holder of each
Security affected. In the case of any such waiver, the Issuer, the
Trustee and the holders of the Securities shall be restored to
their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event
of Default arising therefrom shall be deemed to have been cured,
and not to have occurred for every purpose of this Indenture; but
no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.
ARTICLE FIVE
CONCERNING THE TRUSTEE
SECTION 5.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default. The Trustee, prior to the
occurrence of an Event of Default and after the curing or waiving
of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default has occurred
(which has not been cured or waived) the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, 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.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default
which may have occurred:
(i) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable except for
the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Inden-
ture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the
opinions expressed therein, upon any statements, certifi-
cates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture and believed by the
Trustee to be genuine and to have been signed and
presented by the proper party or parties; but in the case
of any such statements, certificates or opinions which by
any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a responsible officer or
responsible officers of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent
facts; and
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the holders of not less than
a majority in principal amount of the Securities at the time
outstanding relating to the time, method and place of conduct-
ing any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Indenture.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise
incur personal 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 ground for believing that the repayment of such
funds or adequate indemnity against such liability is not reason-
ably assured to it.
This Section 5.1 is in furtherance of and subject to Sections
315 and 316 of the Trust Indenture Act of 1939 and whether or not
herein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of
this Section 5.1 and of Section 5.2.
SECTION 5.2 Certain Rights of the Trustee. In furtherance
of and subject to the Trust Indenture Act of 1939, and subject to
Section 5.1:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
Officers' Certificate or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request, direction, order or demand of the
Issuer mentioned herein shall be sufficiently evidenced by an
Officers' Certificate (unless other evidence in respect
thereof be herein specifically prescribed); and any resolution
of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the secretary or an assistant
secretary of the Issuer;
(c) the Trustee may consult with counsel and any advice
or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or
omitted to be taken by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture at
the request, order or direction of any of the Securityholders
pursuant to the provisions of this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabili-
ties which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be
authorized or within the discretion, rights or powers con-
ferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of
Default, the Trustee shall not be bound to make any investiga-
tion into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture,
note, coupon, security, or other paper or document unless
requested in writing so to do by the holders of not less than
a majority in aggregate principal amount of the Securities
then outstanding; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reason-
ably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reason-
able indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such
examination shall be paid by the Issuer or, if paid by the
Trustee or any predecessor trustee, shall be repaid by the
Issuer upon demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents or attorneys not regularly in its employ
and the Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent or attorney appointed
with due care by it hereunder; and
(h) the Trustee shall not be deemed to have notice of
any Event of Default, except those specified in Sections
4.1(a)-(d), inclusive, unless there shall have been given to
the Trustee written notice specifying this Indenture and the
Event of Default delivered to it at its Corporate Trust Office
by the Issuer or the percentage of holders of Securities
specified in the applicable subsection of Section 4.1, or if
no percentage is specified, by any holder of a Security.
Whether or not herein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the
liability of, or affording protection to, the Trustee shall be
subject to the provisions of this Section 5.2 and of Section 5.1.
SECTION 5.3 Trustee Not Responsible for Recitals, Disposi-
tion of Securities or Application of Proceeds Thereof. The
recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the
statements of the Issuer, and the Trustee assumes no responsibility
for the correctness of the same. The Trustee makes no representa-
tion as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or
application by the Issuer of any of the Securities or of the
proceeds thereof.
SECTION 5.4 Trustee and Agents May Hold Securities; Collec-
tions, etc. The Trustee, any paying agent or any other agent of
the Issuer or the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Securities with the same rights
it would have if it were not the Trustee or such paying agent or
other agent and may otherwise deal with the Issuer and receive,
collect, hold and retain collections from the Issuer with the same
rights it would have if it were not the Trustee or such paying
agent or other agent.
SECTION 5.5 Moneys Held by Trustee. Subject to the provi-
sions of Section 9.4 hereof, all moneys received by the Trustee
shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by
mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest
on any moneys received by it hereunder.
SECTION 5.6 Compensation and Indemnification of Trustee and
Its Prior Claim. The Issuer covenants and agrees to pay to the
Trustee from time to time, and the Trustee shall be entitled to,
reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or
made by or on behalf of it in accordance with any of the provisions
of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all agents and
other persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad
faith. The Issuer also convenants to indemnify the Trustee and each
predecessor Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and its
duties hereunder, including the costs and expenses of defending
itself against or investigating any claim of liability in the
premises. The obligations of the Issuer under this Section to
compensate and indemnify the Trustee and each predecessor Trustee
and to pay or reimburse the Trustee and each predecessor Trustee
for expenses, disbursements and advances shall constitute addition-
al indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. Such additional indebtedness shall be
a senior claim to that of the Securities upon all property and
funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the holders of particular Securities,
and the Securities are hereby subordinated to such senior claim.
SECTION 5.7 Right of Trustee to Rely on Officers' Certifi-
cate, etc. Whenever in the administration of the trusts of this
Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering or
omitting any action hereunder, such matter (unless other evidence
in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be
deemed to be conclusively proved and established by an Officers'
Certificate certifying to such matter delivered to the Trustee, and
such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any
action taken, suffered or omitted by it under the provisions of
this Indenture upon the faith thereof.
SECTION 5.8 Persons Eligible for Appointment as Trustee.
The Trustee hereunder shall at all times be a corporation having a
combined capital and surplus of at least $50,000,000, and which is
eligible in accordance with the provisions of Section 310(a) of the
Trust Indenture Act of 1939. If such corporation publishes reports
of condition at least annually, pursuant to law or to the require-
ments of a Federal, State or District of Columbia supervising or
examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent
report of condition so published.
SECTION 5.9 Resignation and Removal; Appointment of
Successor Trustee. (a) The Trustee may at any time resign by
giving written notice of resignation to the Issuer and by mailing
notice thereof by first-class mail to holders of Securities at
their last addresses as they shall appear on the Security register.
Upon receiving such notice of resignation, the Issuer shall
promptly appoint a successor trustee by written instrument in
duplicate, executed by authority of the Board of Directors, one coy
of which instrument shall be delivered to the resigning Trustee and
one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days
after the mailing of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Securityholder who has
been a bona fide holder of a Security or Securities for at least
six months may, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if
any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall
occur:
(i) the Trustee shall fail to comply with the
provisions of Section 310(b) of the Trust Indenture Act
of 1939, after written request therefore by the Issuer or
by any Securityholder who has been a bona fide holder of
a Security or Securities for at least six months; or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 5.8 and shall
fail to resign after written request therefor by the
Issuer or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or a
receiver or liquidator of the Trustee or of its property
shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation
or liquidation;
then, in any such case, the Issuer may remove the Trustee and
appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors of the Issuer, one copy
of which instrument shall be delivered to the Trustee so removed
and one copy to the successor trustee, or, subject to Section
315(e) of the Trust Indenture Act of 1939, any Securityholder who
has been a bona fide holder of a Security or Securities for at
least six months may on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The holders of a majority in aggregate principal
amount of the Securities at the time outstanding may at any
time remove the Trustee and appoint a successor trustee by
delivering to the Trustee so removed, to the successor trustee
so appointed and to the Issuer the evidence provided for in
Section 6.1 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee and any
appointment of a successor trustee pursuant to any of the
provisions of this Section 5.9 shall become effective upon
acceptance of appointment by the successor trustee as provided
in Section 5.10.
SECTION 5.10 Acceptance of Appointment by Successor Trustee.
Any successor trustee appointed as provided in Section 5.9 shall
execute and deliver to the Issuer and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed
or conveyance, shall become vested with all rights, powers, duties
and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the
written request of the Issuer or of the successor trustee, upon
payment of its charges then unpaid, the trustee ceasing to act
shall, subject to Section 9.4, pay over to the successor trustee
all moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor trustee all
such rights, powers, duties and obligations. Upon request of any
such successor trustee, the Issuer shall execute any and all
instruments in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers.
Any trustee ceasing to act shall, nevertheless, retain a prior
claim upon all property or funds held or collected by such trustee
to secure any amounts then due it pursuant to the provisions of
Section 5.6.
Upon acceptance of appointment by a successor trustee as
provided in this Section 5.10, the Issuer shall mail notice thereof
by first-class mail to the holders of Securities at their last
addresses as they shall appear in the Security register. If the
acceptance of appointment is substantially contemporaneous with the
resignation, then the notice called for by the preceding sentence
may be combined with the notice called for by Section 5.9. If the
Issuer fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of the Issuer.
SECTION 5.11 Merger, Conversion, Consolidation or Succession
to Business of Trustee. Any corporation into which the Trustee may
be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation
to which the Trustee shall be a party, or any corporation succeed-
ing to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation
shall be eligible under the provisions of Section 5.8, without the
execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary
notwithstanding.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the
Securities shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of
authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the
Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and
in all such cases such certificate shall have the full force which
it is anywhere in the Securities or in this Indenture provided that
the certificate of the Trustee shall have; provided, that the right
to adopt the certificate of authentication of any predecessor
Trustee or to authenticate Securities in the name of any predeces-
sor Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.
ARTICLE SIX
CONCERNING THE SECURITYHOLDERS
SECTION 6.1 Evidence of Action Taken by Securityholders.
Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or
taken by Securityholders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such
Securityholders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are
delivered to the Trustee. Proof of execution of any instrument or
of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee
and the Issuer, if made in the manner provided in this Article.
SECTION 6.2 Proof of Execution of Instruments and of
Holding of Securities; Record Date. The execution of any instru-
ment by a Securityholder or his agent or proxy may be proved in
accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfacto-
ry to the Trustee. The holding of Securities shall be proved by
the Security register or by a certificate of the registrar thereof.
The Issuer may set a record date for purposes of determining the
identity of holders of Securities entitled to vote or consent to
any action referred to in Section 6.1, which record date may be set
at any time or from time to time by notice to the Trustee, for any
date or dates (in the case of any adjournment or resolicitation)
not more than 60 days nor less than five days prior to the proposed
date of such vote or consent, and thereafter, notwithstanding any
other provisions hereof, only holders of Securities of record on
such record date shall be entitled to so vote or give such consent
or to withdraw such vote or consent.
SECTION 6.3 Holders to be Treated as Owners. The Issuer,
the Trustee and any agent of the Issuer or the Trustee may deem and
treat the person in whose name any Security shall be registered
upon the Security register as the absolute owner of such Security
(whether or not such Security shall be overdue and notwithstanding
any notation of ownership or other writing thereon) for the purpose
of receiving payment of or on account of the principal of and
premium, if any, and, subject to the provisions of this Indenture,
interest on such Security and for all other purposes; and neither
the Issuer nor the Trustee nor any agent of the Issuer or the
Trustee shall be affected by any notice to the contrary. All such
payments so made to any such person, or upon the order of such
person, shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys
payable upon any such Security.
SECTION 6.4 Securities Owned by Issuer Deemed Not Outstand-
ing. In determining whether the holders of the requisite aggregate
principal amount of Securities have concurred in any direction,
consent, waiver or other action under this Indenture, Securities
which are owned by the Issuer or any other obligor on the Securi-
ties or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Issuer or any other obligor on the Securities shall be disregarded
and deemed not to be outstanding for the purpose of any such
determination, except that for the purpose of determining whether
the Trustee shall be protected in relying on any such direction,
consent, waiver or other action only Securities which the Trustee
knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as outstand-
ing if the pledgee established to the satisfaction of the Trustee
the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Issuer or any other obligor upon the
Securities or any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Issuer or any other obligor on the Securities. In case of a
dispute as to such right, the advice of counsel shall be full
protection in respect of any decision made by the Trustee in
accordance with such advice. Upon request of the Trustee, the
Issuer shall furnish to the Trustee promptly an Officers' Certifi-
cate listing and identifying all Securities, if any, known by the
Issuer to be owned or held by or for the account of any of the
above described persons; and, subject to Sections 5.1 and 5.2, the
Trustee shall be entitled to accept such Officers' Certificate as
conclusive evidence of the facts therein set forth and of the fact
that all Securities not listed therein are outstanding for the
purpose of any such determination.
SECTION 6.5 Right of Revocation of Action Taken. At any
time prior to (but not after) the evidencing to the Trustee, as
provided in Section 6.1 of the taking of any action by the holders
of the percentage in aggregate principal amount of the Securities
specified in this Indenture in connection with such action, any
holder of a Security the serial number of which is shown by the
evidence to be included among the serial numbers of the Securities
the holders of which have consented to such action may, by filing
written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as
concerns such Security. Except as aforesaid any such action taken
by the holder of any Security shall be conclusive and binding upon
such holder and upon all future holders and owners of such Security
and of any Securities issued in exchange or substitution therefor,
irrespective of whether or not any notation in regard thereto is
made upon any such Security. Any action taken by the holders of
the percentage in aggregate principal amount of the Securities
specified in this Indenture in connection with such action shall be
conclusively binding upon the Issuer, the Trustee and the holders
of all the Securities.
ARTICLE SEVEN
SUPPLEMENTAL INDENTURES
SECTION 7.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of
its Board of Directors, and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental
hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to
the Trustee as security for the Securities any property or
assets;
(b) to evidence the succession of another corporation to
the Issuer, or successive successions, and the assumption by
the successor corporation of the covenants, agreements and
obligations of the Issuer pursuant to Article Eight;
(c) to add to the covenants of the Issuer such further
covenants, restrictions, conditions or provisions as its Board
of Directors shall consider to be for the protection of the
holders of Securities, and to make the occurrence, or the
occurrence and continuance, of a default in any such addition-
al covenants, restrictions, conditions or provisions an Event
of Default permitting the enforcement of all or any of the
several remedies provided in this Indenture as herein set
forth; provided, that in respect of any such additional
covenant, restriction, condition or provision such supplemen-
tal indenture may provide for a particular period of grace
after default (which period may be sorter or longer than that
allowed in the case of other defaults) or may provide for an
immediate enforcement upon such an Event of Default or may
limit the remedies available to the Trustee upon such an Event
of Default or may limit the right of the holders of a majority
in aggregate principal amount of the Securities to waive such
an Event of Default;
(d) to cure any ambiguity or to correct or supplement
any provision contained herein or in any supplemental inden-
ture which may be defective or inconsistent with any other
provision contained herein or in any supplemental indenture;
or to make such other provisions in regard to matters or
questions arising under this Indenture or under any supplemen-
tal indenture as the Board of Directors may deem necessary or
desirable and which shall not materially and adversely affect
the interests of the holders or the Securities; and
(e) to provide for adjustment of conversion rights
pursuant to Section 12.6.
The Trustee is hereby authorized to join in the execution of
any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to
accept the conveyance, transfer, assignment, mortgage or pledge of
any property thereunder, but the Trustee shall not be obligated to
enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed without the consent of the holders of
any of the Securities at the time outstanding, notwithstanding any
of the provisions of Section 7.2.
SECTION 7.2 Supplemental Indentures With Consent of
Securityholders. With the consent (evidenced as provided in
Article Six) of the holders of not less than a majority in
aggregate principal amount of the Securities at the time outstand-
ing, the Issuer, when authorized by a resolution of its Board of
Directors, and the Trustee may, from time to time and at any time,
enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of
the holders of the Securities; provided, that no such supplemental
indenture shall (a) extend the final maturity of any Security, or
reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any amount
payable on redemption thereof, or alter the Issuer's obligation to
make any mandatory sinking fund payment, or impair or affect the
right of any Securityholder to institute suit for the payment or
conversion thereof, or impair the right of any Securityholder to
require the Issuer to redeem any Security pursuant to Article
Thirteen or materially and adversely affect the right to convert
the Securities in accordance herewith without the consent of the
holder of each Security so affected, provided, no consent of any
Holder of any Security shall be necessary under this Section 7.2 to
permit the Trustee and the Issuer to execute supplemental inden-
tures pursuant to Section 7.1(e) and Section 12.6 of this Inden-
ture, or (b) reduce the aforesaid percentage of Securities, the
consent of the holders of which is required for any such supplemen-
tal indenture, without the consent of the holders of all Securities
then outstanding.
Upon the request of the Issuer, accompanied by a copy of a
resolution of the Board of Directors certified by the Secretary or
an Assistant Secretary of the Issuer authorizing the execution of
any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of Securityholders and other
documents, if any, required by Section 6.1, the Trustee shall join
wit the Issuer in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Security-
holders under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of
any supplemental indenture pursuant to the provisions of this
Section, the Issuer shall mail a notice thereof by first-class mail
to the holders of Securities at their addresses as they shall
appear on the registry books of the Issuer, setting forth in
general terms the substance of such supplemental indenture. Any
failure of the Issuer to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
SECTION 7.3 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions
hereof, this Indenture shall be and be deemed to be modified and
amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under
this Indenture of the Trustee, the Issuer and the holders of
Securities shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemen-
tal indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 7.4 Documents to Be Given to Trustee. The Trustee
may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any such supplemental indenture complies
with the applicable provisions of this Indenture.
SECTION 7.5 Notation on Securities in Respect of Supplemen-
tal Indentures. Securities authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions
of this Article may bear a notation in form approved by the Trustee
as to any matter provided for by such supplemental indenture or as
to any action taken at any such meeting. If the Issuer or the
Trustee shall so determine, new Securities so modified as to
conform, in the opinion of the Trustee and the Board of Directors,
to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Issuer, authenticated
by the Trustee and delivered in exchange for the Securities then
outstanding.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.1 Covenant Not to Merge, Consolidate, Sell or
Convey Property Except Under Certain Conditions. The Issuer shall
not consolidate with or into, or sell, lease or convey all or
substantially all of its assets in one transaction or a related
series of transactions unless (i) the Issuer is the continuing
corporation in the case of a merger or the resulting surviving or
transferee Person shall be a corporation organized under the laws
of the United States of America, any State thereof or the District
of Columbia and shall expressly assume by supplemental indenture
satisfactory in form to the Trustee the due and punctual payment of
the principal of and premium, if any, and interest on all the
Securities according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions
to be performed or observed by the Issuer, (ii) immediately after
giving effect to such transaction no Event of Default or event or
circumstance which after notice or lapse of time, or both, would
become an Event of Default, shall have occurred and be continuing
and (iii) the Issuer shall have delivered to the Trustee an
Officers' Certificate and Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and such
supplemental indenture, if any, comply with this Article Eight and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 8.2 Successor Corporation Substituted. In case of
any such consolidation, merger, sale or conveyance, and following
such an assumption by the successor corporation, such successor
corporation shall succeed to and be substituted for the Issuer,
with the same effect as if it had been named herein.
Such successor corporation may cause to be signed, and may
issue either in its own name or in the name of the Issuer prior to
such succession any or all of the Securities issuable hereunder
which theretofore shall not have been signed by the Issuer and
delivered to the Trustee; and, upon the order of such successor
corporation, instead of the Issuer, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Securities which
previously shall have been signed and delivered by the officers of
the Issuer to the Trustee for authentication, and any Securities
which such successor corporation thereafter shall cause to be
signed and delivered to the Trustee for that purpose. All of the
Securities so issued shall in all respects have the same legal rank
and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as
though all of such Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale, lease or
conveyance such changes in phraseology and form (but not in
substance) may be made in the Securities thereafter to be issued as
may be appropriate.
In the event of any such sale or conveyance (other than a
conveyance by way of lease) the Issuer or any successor corporation
which shall theretofore have become such in the manner described in
this Article shall be discharged from all obligations and covenants
under this Indenture and the Securities and may be liquidated and
dissolved.
SECTION 8.3 Opinion of Counsel to Trustee. The Trustee,
subject to the provisions of Sections 5.1 and 5.2, may receive an
Opinion of Counsel as conclusive evidence that any such consolida-
tion, merger, sale, lease or conveyance, and any such assumption,
and any such liquidation or dissolution, complies with the
applicable provisions of this Indenture.
ARTICLE NINE
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 9.1 Satisfaction and Discharge of Indenture. If at
any time (a) the Issuer shall have paid or caused to be paid the
principal of and premium, if any, and interest on all the Securi-
ties outstanding hereunder, as and when the same shall have become
due and payable, and all other sums due and payable by it under the
Securities and this Indenture or (b) the Issuer shall have
delivered to the Trustee for cancellation all Securities thereto-
fore authenticated (other than any Securities which shall have been
destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.6) or (c) the Issuer shall have
irrevocably deposited or caused to be deposited with the Trustee as
trust funds the entire amount in cash (other than moneys repaid by
the Trustee or any paying agent to the Issuer in accordance with
Section 9.4) sufficient to pay at maturity (without consideration
of any investment of such cash) all such Securities not theretofore
delivered to the Trustee for cancellation, including principal and
premium, if any, and interest due or to become due to such date of
maturity as the case may be, and if, in any such case, the Issuer
shall also pay or cause to be paid all other sums payable hereunder
by the Issuer, then this Indenture shall cease to be of further
effect (except as to (i) rights of registration of transfer,
conversion and exchange, and the Issuer's right of optional
redemption, (ii) substitution of apparently mutilated, defaced,
destroyed, lost or stolen Securities, (iii) rights of holders to
receive payments of principal thereof and premium, if any, and
interest thereon, (iv) the rights obligations and immunities of the
Trustee hereunder and (v) the rights of the Securityholders as
beneficiaries hereof with respect to the property so deposited with
the Trustee payable to all or any of them), and the Trustee, on
demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel stating that all conditions precedent relating
to the satisfaction and discharge of the entire indebtedness on all
Outstanding Securities as contemplated herein have been complied
with and at the cost and expense of the Issuer, shall execute
proper instruments acknowledging such satisfaction of and discharg-
ing this Indenture. The Issuer agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred
and to compensate the Trustee for any services thereafter reason-
ably and properly rendered by the Trustee in connection with this
Indenture or the Securities.
SECTION 9.2 Application by Trustee of Funds Deposited for
Payment of Securities. Subject to Section 9.4, all moneys
deposited with the Trustee pursuant to Section 9.1 shall be held in
trust and applied by it to the payment, either directly or through
any paying agent (including the Issuer acting as its own paying
agent), to the holders of the particular Securities for the payment
or redemption of which such moneys have been deposited with the
Trustee, of all sums due and to become due thereon for principal
and premium, if any, and interest; but such money need not be
segregated from other funds except to the extent required by law.
SECTION 9.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture
all moneys then held by any paying agent under the provisions of
this Indenture shall, upon written demand of the Issuer, be repaid
to it or paid to the Trustee and thereupon such paying agent shall
be released from all further liability with respect to such moneys.
SECTION 9.4 Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Three Years. Any moneys deposited with or paid
to the Trustee or any paying agent for the payment of the principal
of or premium, if any, or interest on any Security and not applied
but remaining unclaimed for three years after the date upon which
such principal or premium, if any, or interest shall have become
due and payable, shall, upon the written request of the Issuer and
unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, be repaid to the
Issuer by the Trustee or such paying agent, and the holder of such
Security shall, unless otherwise required by mandatory provisions
of applicable escheat or abandoned or unclaimed property laws,
thereafter look only to the Issuer for any payment which such
holder may be entitled to collect, and all liability of the Trustee
or any paying agent with respect to such moneys shall thereupon
cease.
ARTICLE TEN
MISCELLANEOUS PROVISIONS
SECTION 10.1 Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual Liability. No recourse
under or upon any obligation, covenant or agreement contained in
this Indenture, or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, as such
or against any past, present or future stockholder, officer or
director, as such, of the Issuer or of any successor, either
directly or through the Issuer or any successor, under any rule of
law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or other-
wise, all such liability being expressly waived and released by the
acceptance of the Securities by the holders thereof and as part of
the consideration for the issue of the Securities.
SECTION 10.2 Provisions of Indenture for the Sole Benefit of
Parties and Securityholders. Nothing in this Indenture or in the
Securities, expressed or implied, shall give or be construed to
give to any person, firm or corporation, other than the parties
hereto and their permitted successors and the holders of the
Securities, any legal or equitable right, remedy or claim under
this Indenture or under any covenant or provision herein contained,
all such covenants and provisions being for the sole benefit of the
parties hereto and their permitted successors and of the holders of
the Securities.
SECTION 10.3 Successors and Assigns of Issuer Bound by
Indenture. All the covenants, stipulations, promises and agree-
ments in this Indenture contained by or in behalf of the Issuer
shall bind its successors and assigns, whether so expressed or not.
SECTION 10.4 Notices and Demands on Issuer, Trustee and
Securityholders. Any notice or demand which by any provision of
this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Securities to or on the Issuer may
be given or served by hand or by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein)
addressed (until another address of the Issuer is filed by the
Issuer with the Trustee) to Lomas Financial Corporation, 1600
Viceroy Drive, Dallas, Texas 75235. Any notice, direction, request
or demand by the Issuer or any Securityholder to or upon the
Trustee shall be deemed to have been sufficiently given or made,
for all purposes, if given or made at the Corporate Trust Office.
Where this Indenture provides for notice to holders, such
notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to each holder entitled thereto, at his last address as it
appears in the Security register. In any case where notice to
holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular holder
shall affect the sufficiency of such notice with respect to other
holders. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the person entitled to
receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by
holders shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice to
the Issuer and Securityholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner
of giving such notice as shall be satisfactory to the Trustee shall
be deemed to be a sufficient giving of such notice.
SECTION 10.5 Officers' Certificates and Opinions of Counsel;
Statements to be Contained Therein. Upon any application or demand
by the Issuer to the Trustee to take any action under any of the
provisions of this Indenture, the Issuer shall furnish to the
Trustee an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent
have been complied with, except that in the case of any such
application or demand as to which the furnishing of such documents
is specifically required by any provision of this Indenture
relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(a) a statement that the person making such certificate or opinion
has read such covenant or condition, (b) 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, (c) 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 (d) a statement as
to whether or not, in the opinion of such person, such condition or
covenant has been complied with.
Any certificate, statement or opinion of an officer of the
Issuer may be based, insofar as it relates to legal matters, upon
a certificate or opinion of or representations by counsel, unless
such officer knows that the certificate or opinion or representa-
tions with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in
the exercise or reasonable care should know that the same are
erroneous. Any certificate, statement or opinion of counsel may be
based, insofar as it relates to factual matters information with
respect to which is in the possession of the Issuer, upon the
certificate, statement or opinion of or representations by an
officer or officers of the Issuer, unless such counsel knows that
the certificate, statement or opinion or representations with
respect to the matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise
of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the
Issuer or of counsel may be based, insofar as it relates to
accounting matters, upon a certificate or opinion of or representa-
tions by an accountant or firm of accountants in the employ of the
Issuer, unless such officer or counsel, as the case may be, knows
that the certificate or opinion or representations with respect to
the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise
of reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that
such firm is independent.
SECTION 10.6 Payments Due on Saturdays, Sundays and
Holidays. If the date of maturity of interest on or principal of,
or premium, if any, on the Securities or the date fixed for
redemption of any Security shall not be a business day in New York
City or Dallas, then payment of interest or principal or premium,
if any, need not be made on such date, but may be made on the next
succeeding business day in New York City and Dallas with the same
force and effect as if made on the date of maturity or the date
fixed for redemption, and no interest shall accrue for the period
after such date.
SECTION 10.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with
another provisions included in this Indenture by operation of
Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939
(an "incorporated provision"), such incorporated provision shall
control.
SECTION 10.8 NEW YORK LAW TO GOVERN. THIS INDENTURE AND
EACH SECURITY SHALL BE DEEMED TO BE A CONTRACT UNDER THE INTERNAL
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES, AND FOR ALL PURPOSES SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH SUCH LAWS OF SAID STATE, EXCEPT AS MAY OTHERWISE BE
REQUIRED BY MANDATORY PROVISIONS OF LAW.
SECTION 10.9 Counterparts. This Indenture may be executed
in any number of counterparts, each of which shall be an original;
but such counterparts shall together constitute but one and the
same instrument.
SECTION 10.10 Effect of Headings. The Article and Section
Headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 10.11 Usury Savings Clause. All agreements in this
Indenture and the Securities are expressly limited so that in no
contingency or event whatsoever, whether by reason of advancement
or acceleration of maturity of the Securities, or otherwise, shall
the amount paid or agreed to be paid under this Indenture and the
Securities for the use or forbearance to demand the repayment of
money exceed the highest lawful rate permitted under the usury law
which a court of competent jurisdiction shall hold applicable
thereto. If, from any circumstance whatsoever, fulfillment of any
provision of this Indenture or the Securities, at the time
performance of such provision shall be due, shall involve tran-
scending the limit of validity prescribed by the usury law which a
court of competent jurisdiction shall hold applicable thereto,
then, ipso facto, the obligation to be fulfilled shall be reduced
to the limit of such validity and if, from any circumstance
whatsoever, any of the Holders shall ever receive as interest an
amount which would exceed the highest lawful rate, the receipt of
such excess shall be deemed a mistake and shall be canceled
automatically or, if theretofore paid, such excess shall be
credited against the principal amount of the Securities to which
the same may lawfully be credited, and any portion of such excess
not capable of being so credited shall be refunded to the Issuer.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES AT ISSUER'S OPTION; SINKING FUND
SECTION 11.1 Right of Optional Redemption; Prices. The
Issuer at its option may, at any time, redeem all, or from time to
time any part of, the Securities upon payment of the optional
redemption prices set forth in the form of Security hereinabove
recited, together with accrued interest to the date fixed for
redemption, provided, that no such redemption shall be made prior
to October 31, 1993.
SECTION 11.2 Notice of Redemption; Partial Redemptions.
Notice of redemption to the holders of Securities to be redeemed as
a whole or in part shall be given by mailing notice of such
redemption by first-class mail, postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption to
such holders of Securities at their last address as they shall
appear upon the registry books. Any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been
duly given, whether or not the holder receives the notice. Failure
to give notice by mail, or any defect in the notice to the holder
of any Security designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption
of any other Security.
The notice of redemption to each such holder shall specify the
principal amount of each Security held by such holder to be
redeemed, the date fixed for redemption, the redemption price, the
amount of accrued interest, if any, to be paid, the place or places
of payment, that payment will be made upon presentation and
surrender of such Securities, that such redemption is pursuant to
the mandatory sinking fund, if such be the case, that interest
accrued to the date fixed for redemption will be paid as specified
in said notice and that on and after said date interest thereon or
on the portions thereof to be redeemed will cease to accrue and
shall also specify the conversion price then in effect and the date
on which the right to convert such Securities or the portions
thereof to be redeemed will expire. In case any Security is to be
redeemed in part only the notice of redemption shall state the
portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon
surrender of such Security, a new Security or Securities in
principal amount equal to the unredeemed portion thereof will be
issued.
The notice of redemption of Securities to be redeemed at the
option of the Issuer shall be given by the Issuer or, at the
Issuer's request, by the Trustee in the name and at the expense of
the Issuer.
At least one business day prior to the redemption date
specified in the notice of redemption given as provided in this
Section, the Issuer will deposit with the Trustee or with one or
more paying agents (or, if the Issuer is acting as its own paying
agent, set aside, segregate and hold in trust as provided in
Section 3.4) an amount of money sufficient to redeem on the
redemption date all the Securities so called for redemption (other
than those theretofore surrendered for conversion into Common
Stock) at the appropriate redemption price, together with accrued
interest to the date fixed for redemption. If any Security called
for redemption is converted pursuant hereto, any money deposited
with the Trustee or any paying agent or so segregated and held in
trust for the redemption of such Security shall be paid to the
Issuer upon the Issuer's request, or, if then held by the Issuer,
shall be discharged from such trust. If less than all the
outstanding Securities are to be redeemed the Issuer will deliver
to the Trustee at least 70 days prior to the date fixed for
redemption an Officers' Certificate stating the aggregate principal
amount of Securities to be redeemed.
If less than all the Securities are to be redeemed, the
Trustee shall select by lot Securities to be redeemed in whole or
in part, Securities may be redeemed in part in multiples of $1,000
only. The Trustee shall promptly notify the Issuer in writing of
the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount
thereof to be redeemed. For all purposes of this Indenture, unless
the context otherwise requires, all provisions relating to the
redemption of Securities shall relate, in the case of any Security
redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be
redeemed. If any Security selected for partial redemption is
surrendered for conversion after such selection, the converted
portion of such Security shall be deemed (so far as may be) to be
the portion selected for redemption. Upon any redemption of less
than all the Securities, the Issuer and the Trustee may treat as
outstanding Securities surrendered for conversion during the period
of 15 days next preceding the mailing of a notice of redemption,
and need not treat as outstanding any Security authenticated and
delivered during such period in exchange for the unconverted
portion of any Security converted in part during such period.
SECTION 11.3 Payment of Securities Called for Redemption.
If notice of redemption has been given as above provided, the
Securities or portions of Securities specified in such notice shall
become due and payable on the date and at the place stated in such
notice at the applicable redemption price, together with interest
accrued to the date fixed for redemption, and on and after said
date (unless the Issuer shall default in the payment of such
Securities at the redemption price, together with interest accrued
to said date) interest on the Securities or portions of Securities
so called for redemption shall cease to accrue and, except as
provided in Sections 5.5 and 9.4, such Securities shall cease from
and after the date fixed for redemption to be convertible into
Common Stock and to be entitled to any benefit or security under
this Indenture, and the holders thereof shall have no right in
respect of such Securities except the right to receive the
redemption price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such Securities at a
place of payment specified in said notice, said Securities or the
specified portions thereof shall be paid and redeemed by the Issuer
at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption; provided that any semi-
annual payment of interest becoming due on the date fixed for
redemption shall be payable to the holders of such Securities
registered as such on the relevant record date subject to the terms
and provisions of Section 2.4 hereof.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and premium,
if any, and accrued interest thereon (to the extent permitted by
law) shall, until paid or duly provided for, bear interest from the
date fixed for redemption at the rate borne by the Security and
such Security shall remain convertible into Common Stock until the
principal of such Security shall have been paid or duly provided
for.
Upon presentation of any Security redeemed in part only, the
Issuer shall execute and the Trustee shall authenticate and deliver
to or on the order of the holder thereof, at the expense of the
Issuer, a new Security or Securities, of authorized denominations,
in principal amount equal to the unredeemed portion of the Security
so presented.
SECTION 11.4 Exclusion of Certain Securities from Eligibili-
ty for Selection for Redemption. Securities shall be excluded from
eligibility for selection for redemption if they are identified by
registration and certificate number in a written statement signed
by an authorized officer of the Issuer and delivered to the Trustee
at least 40 days prior to the last date on which notice of
redemption may be given as being owned of record and beneficially
by (a) the Issuer or (b) an entity specifically identified in such
written statement directly or indirectly controlling or controlled
by or under direct or indirect common control with the Issuer.
SECTION 11.5 Mandatory Sinking Fund. The Securities shall
also be subject to redemption in part on each date specified in the
form of Security hereinabove recited through the operation of the
sinking fund as set forth in this Section, at the applicable
sinking fund redemption price or prices set forth in the form of
Security hereinabove recited (the "sinking fund redemption price"),
together with accrued interest to the date fixed for redemption.
As and for a mandatory sinking fund for the retirement of the
Securities and so long as any of the Securities remain outstanding
and unpaid, the Issuer will, except as hereinafter provided, pay to
the Trustee, not later than one business day before October 31,
1997, and each October 31 thereafter to an including October 31,
2002 an amount sufficient to redeem on such October 31, $10,000,000
principal amount of Securities, or such lesser amount as shall then
be outstanding, at 100% of the principal amount thereof, the
sinking fund redemption price, together with accrued interest to
the date fixed for redemption. The last date on which a sinking
fund payment may be made in each year is herein referred to as the
"sinking fund payment date."
In lieu of making all or any part of any mandatory sinking
fund payment in cash, the Issuer may at its option (a) deliver to
the Trustee Securities theretofore purchased or otherwise acquired
(except upon redemption pursuant to the mandatory sinking fund) by
the Issuer or receive credit for Securities (not previously so
credited) theretofore purchased or otherwise acquired (except as
aforesaid) by the Issuer and delivered to the Trustee for cancella-
tion pursuant to Section 2.7 and receive credit for Securities (not
previously so credited) converted into Common Stock and so
delivered to the Trustee for cancellation, or (b) receive credit
for Securities (not previously so credited) redeemed by the Issuer
through the optional redemption provided by Section 11.1 or
pursuant to Article Thirteen. Securities so delivered or credited
shall be received or credited by the Trustee at the sinking fund
redemption price.
On or before the sixtieth day next preceding each sinking fund
payment date, the Issuer will deliver to the Trustee a written
statement (which need not contain the statements required by
Section 10.5) signed by an authorized officer of the Issuer (a)
specifying the portion of the mandatory sinking fund payment to be
satisfied by payment of cash and the portion to be satisfied by
credit or Securities, (b) stating that none of such Securities has
theretofore been so credited, and (c) stating that no defaults in
the payment of interest or Events of Default have occurred (which
have not been waived or cured) and are continuing. Any Securities
to be credited and required to be delivered to the Trustee in order
for the Issuer to be entitled to credit therefore as aforesaid
which have not theretofore been delivered to the Trustee shall be
delivered for cancellation pursuant to Section 2.7 to the Trustee
with such written statement (or reasonably promptly thereafter if
acceptable to the Trustee). Such written statement shall be
irrevocable and upon its receipt by the Trustee the Issuer shall
become unconditionally obligated to make all the cash payments or
payments therein referred to, if any, on or before the next
succeeding sinking fund payment date. Failure of the Issuer, on or
before any such sixtieth day, to deliver such written statement and
Securities, if any, shall not constitute a default but shall
constitute, on and as of such date, the irrevocable election of the
Issuer that the mandatory sinking fund payment due on the next
succeeding sinking fund payment date shall be paid entirely in cash
without the option to deliver or credit Securities in respect
thereof.
If the mandatory sinking fund payment or payments made in cash
plus any unused balance of any preceding sinking fund payments made
in cash shall exceed $50,000 (or a lesser sum if the Issuer shall
so request), such cash shall be applied on the next succeeding
October 31 to the redemption of Securities at the sinking fund
redemption price together with accrued interest to the date fixed
for redemption. If such amount shall be $50,000 and the Issuer
makes no such request then it shall be carried over until a sum in
excess of $50,000 is available. The Trustee shall select, in the
manner provided in Section 11.2, for redemption on such October 31
a sufficient principal amount of Securities to absorb said cash, as
nearly as may be, and shall (if requested in writing by the Issuer)
inform the Issuer of the serial numbers of the Securities (or
portions thereof) so selected. Securities which are (a) owned by
the Issuer or an entity known by the Trustee to be directly or
indirectly controlling or controlled by or under direct or indirect
common control with the Issuer, as shown by the Security register
or (b) identified in an Officers' Certificate at least 60 days
prior to the sinking fund payment date as being beneficially owned
by the Issuer or an entity directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Issuer shall be excluded from Securities eligible for selection for
redemption. The Trustee, in the name and at the expense of the
Issuer (or the Issuer, if it shall so request the Trustee in
writing) shall cause notice of redemption of such Securities to be
given in substantially the manner provided in Section 11.2 (and
with the effect provided in Section 11.3) for the redemption of
Securities in part at the option of the Issuer. The amount of any
sinking fund payments not so applied or allocated to the redemption
of Securities shall be added to the next cash sinking fund payment
and, together with such payment, shall be applied in accordance
with the provisions of this Section 11.4. Any and all sinking fund
moneys held on the stated maturity date of the Securities (or
earlier, if such maturity is accelerated), which are not held for
the payment or redemption of particular Securities shall be
applied, together with other moneys, if necessary, sufficient for
the purpose, to the payment of the principal of, and interest on,
the Securities at maturity. The Issuer's obligation to make a
mandatory sinking fund payment shall automatically be reduced by an
amount equal to the sinking fund redemption price allocable to any
Securities or portions thereof called for redemption pursuant to
the preceding paragraph on any sinking fund payment date and
converted into Common Stock; provided, that if the Trustee is not
the conversion agent for the Securities, the Issuer or such
conversion agent shall give the Trustee written notice prior to the
date fixed for redemption of the principal amount of Securities or
portions thereof so converted.
At least one business day before each sinking fund payment
date, the Issuer shall pay to the Trustee in cash or shall
otherwise provide for the payment of all interest accrued to the
date fixed for redemption on Securities to be redeemed on the next
following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any
Securities with sinking fund moneys or mail any notice of redemp-
tion of Securities by operation of the sinking fund during the
continuance of a default in payment of interest on the Securities
or of any Event of Default of which the Trustee shall have
knowledge except that, where the mailing of notice of redemption of
any Securities shall theretofore have been made, the Trustee shall
redeem or cause to be redeemed such Securities, provided that it
shall have received from the Issuer a sum sufficient for such
redemption. Except as aforesaid, any moneys in the sinking fund at
the time when any such default or Event of Default shall occur, and
any moneys thereafter paid into the sinking fund, shall, during the
continuance of such default or Event of Default, be deemed to have
been collected under Article Four and held for the payment of all
the Securities. In case such Event of Default shall have been
waived as provided in Section 4.9 or the default cured on or before
the sixtieth day preceding the sinking fund payment date in any
year, such moneys shall thereafter be applied on the next succeed-
ing sinking fund payment date in accordance with this Section to
the redemption of Securities.
ARTICLE TWELVE
CONVERSION OF SECURITIES
SECTION 12.1 Conversion Privilege. Subject to and upon
compliance with the provisions of this Article, at the option of
the holder thereof, any Security may, at any time until and
including, but not after the close of business on October 31, 2003,
or in case such Security or some portion thereof shall be called
for redemption or otherwise redeemed prior to such date, then, with
respect to such Security or portion thereof as is so called or
otherwise redeemed, until and including, but (if no default is made
in making due provision for the payment of the redemption price)
not after, the close of business on, the date fixed for redemption,
be converted, in whole, or in part in integral multiples of $1,000
principal amount, at 100% of the principal amount of such Security
(or portion thereof), into fully paid and non-assessable shares of
Common Stock issuable upon conversion of the Securities, at the
conversion price in effect at the Date of Conversion (as herein-
after defined).
SECTION 12.2 Exercise of Conversion Privilege. In order to
exercise the conversion privilege, the holder of any Security to be
converted shall surrender such Security to the Issuer at any time
during usual business hours at its office or agency maintained for
the purpose as provided in this Indenture, accompanied by a fully
executed written notice, in substantially the form set forth on the
reverse of the Security, that the holder elects to convert such
Security or a stated portion thereof constituting an integral
multiple of $1,000 principal amount, and, if such Security is
surrendered for conversion during the period between the close of
business on April 15 or October 15 in any year and the opening of
business on the following April 30 or October 31 and has not been
called for redemption on a redemption date within such period (or
on such April 30 or October 31), accompanied also by payment of an
amount equal to the interest payable on such April 30 or October 31
on the principal amount of the Security being surrendered for
conversion. Such notice shall also state the name or names (with
address) in which the certificate or certificates for shares of
Common Stock shall be issued. Securities surrendered for conversion
shall (if so required by the Issuer or the Trustee) be duly
endorsed by, or be accompanied by a written instrument or instru-
ments of transfer in form satisfactory to the Issuer duly executed
by, the holder or his attorney duly authorized in writing. As
promptly as practicable after the receipt of such notice and the
surrender of such Security as aforesaid, the Issuer shall, subject
to the provisions of Section 12.8, issue and deliver at such office
or agency to such holder, or on his written order, a certificate or
certificates for the number of full shares of Common Stock issuable
on such conversion of Securities in accordance with the provisions
of this Article and cash, as provided in Section 12.3, in respect
of any fraction of a share of Common Stock otherwise issuable upon
such conversion. Such conversion shall be deemed to have been
effected immediately prior to the close of business on the date
(herein called the "Date of Conversion") on which such notice shall
have been received by the Issuer and such Security shall have been
surrendered as aforesaid, and the person or persons in whose name
or names any certificate or certificates for shares of Common Stock
shall be issuable upon such conversion shall be deemed to have
become on the Date of Conversion the holder or holders of record of
the shares represented thereby; provided, however, that any such
surrender on any date when the stock transfer books of the Issuer
shall be closed shall constitute the person or persons in whose
name or names the certificate or certificates for such shares are
to be issued as the recordholder or holders thereof for all
purposes at the opening of business on the next succeeding day on
which such stock transfer books are open but such conversion shall
nevertheless be at the conversion price in effect at the close of
business on the date when such Security shall have been so
surrendered with the conversion notice. In the case of conversion
of a portion, but less than all, of a Security, the Issuer shall
execute, and the Trustee shall authenticate and deliver to the
holder thereof, at the expense of the Issuer, a Security or
Securities in the aggregate principal amount of the unconverted
portion of the Security surrendered. Except as otherwise expressly
provided in this Indenture, no payment or adjustment shall be made
for interest accrued on any Security (or portion thereof) converted
or for dividends or distributions on any Common Stock issued upon
conversion of any Security.
SECTION 12.3 Fractional Interests. No fractions of shares
or scrip representing fractions of shares shall be issued upon
conversion of Securities. If more than one Security shall be
surrendered for conversion at one time by the same holder, the
number of full shares which shall be issuable upon conversion
thereof shall be computed on the basis of the aggregate principal
amount of the Securities so surrendered. If any fraction of a share
of Common Stock would, except for the provisions of this Section,
be issuable on the conversion of any Security or Securities, the
Issuer shall make payment in lieu thereof in an amount of United
States dollars equal to the value of such fraction computed on the
basis of the current market price per share of the Common Stock on
the last business day prior to the Date of Conversion.
SECTION 12.4 Conversion Price. The price per share at which
Common Stock is issuable upon conversion of the Securities (the
"Conversion Price") shall initially be $17.50.
SECTION 12.5 Adjustment of Conversion Price. The Conversion
Price shall be subject to adjustment from time to time as follows:
(a) In case the Issuer shall (1) pay a dividend or make
a distribution in shares of Common Stock, (2) subdivide its
outstanding shares of Common Stock into a greater number of
shares or (3) combine its outstanding shares of Common Stock
into a smaller number of shares, the Conversion Price in
effect immediately prior to such action shall be adjusted so
that the holder of any Security thereafter surrendered for
conversion shall be entitled to receive the number of shares
of Common Stock which he would have owned immediately follow-
ing such action had such Security been converted immediately
prior thereto. An adjustment made pursuant to this subsection
(a) shall become effective immediately, except as provided in
subsection (e) below, after the record date in the case of a
dividend and shall become effective immediately after the
effective date in the case of a subdivision or combination.
(b) In case the Issuer shall issue rights, options or
warrants to all holders of Common Stock entitling them (for a
period not exceeding 45 days from the date of such issuance)
to subscribe for or purchase shares of Common Stock at a price
per share less than the current market price per share (as
determined pursuant to subsection (d) below) of the Common
Stock on the record date mentioned below, the Conversion Price
shall be reduced to a price, computed to the nearest cent, so
that the same shall equal the price determined by multiplying:
(1) the Conversion Price in effect immediately
prior to the date of issuance of such rights or warrants
by a fraction, of which
(2) the numerator shall be (A) the number of shares
of Common Stock outstanding on the date of issuance of
such rights or warrants, immediately prior to such
issuance, plus (B) the number of shares which the
aggregate offering price of the total number of shares so
offered for subscription or purchase would purchase at
such current market price (determined by multiplying such
total number of shares by the exercise price of such
rights or warrants and dividing the product so obtained
by such current market price), and of which
(3) the denominator shall be (A) the number of
shares Common Stock outstanding on the date of issuance
of such rights or warrants, immediately prior to such
issuance, plus (B) the number of additional shares of
Common Stock which are so offered for subscription or
purchase.
Such adjustment shall become effective immediately, except as
provided in subsection (e) below, after the record date for
the determination of holders entitled to receive such rights
or warrants.
(c) In case the Issuer shall distribute to substantially
all holders of Common Stock, evidences of indebtedness, equity
securities other than Common Stock or other assets (other than
cash dividends), or shall distribute to substantially all
holders of Common Stock rights or warrants to subscribe to
securities, (other than those referred to in subsection (b)
above), then in each case the Conversion Price shall be
adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior
to the date of such distribution by a fraction of which the
numerator shall be the current market price per share (deter-
mined as provided in subsection (d) below) of the Common Stock
on the record date mentioned below less the then fair market
value (as determined by the Board of Directors, whose determi-
nation shall, if made in good faith, be conclusive evidence of
such fair market value, and described in a resolution of the
Board of Directors filed with the Trustee) of the portion of
the assets so distributed or of such subscription rights or
warrants applicable to one share of Common Stock, and of which
the denominator shall be such current market price per share
of the Common Stock. Such adjustment shall become effective
immediately, except as provided in subsection (e) below, after
the record date for the determination of stockholders entitled
to receive such distribution.
(d) For the purpose of any computation under subsections
(b) and (c) above, the current market price per share of
Common Stock on any date shall be deemed to be the average of
the closing prices for the 30 consecutive Trading Days
commencing 45 days before the date in question.
(e) In any case in which this Section shall require that
an adjustment be made immediately following a record date, the
Issuer may elect to defer the effectiveness of such adjustment
(but in no event until a date later than the effective time of
the event giving rise to such adjustment), in which case the
Issuer shall, with respect to any Security converted after
such record date and before such adjustment shall have become
effective (i) defer paying any cash payment pursuant to
Section 12.3 or issuing to the holder of such Security the
number of shares of Common Stock and other capital stock of
the Issuer issuable upon such conversion in excess of the
number of shares of Common Stock and other capital stock of
the Issuer issuable thereupon only on the basis of the
Conversion Price prior to adjustment, and (ii) not later than
five business days after such adjustment shall have become
effective, pay to such holder the appropriate cash payment
pursuant to Section 12.3 and issue to such holder the addi-
tional shares of Common Stock and other capital stock of the
Issuer issuable on such conversion.
(f) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% the Conversion Price; provided, that
any adjustments which by reason of this subsection (f) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Article shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.
(g) Whenever the Conversion Price is adjusted as herein
provided, the Issuer shall promptly (i) file with the Trustee
and each conversion agent an Officers' Certificate setting
forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjust-
ment, which certificate shall be conclusive evidence of the
correctness of such adjustment, and (ii) mail or cause to be
mailed a notice of such adjustment to each holder of Securi-
ties at his address as the same appears on the registry books
of the Issuer.
(h) For purposes of subsection (d) above, the closing
price for each day shall be (i) the last sale price, or the
closing bid price if no sale occurred, of Common Stock on the
principal securities exchange on which Common Stock is listed
or admitted to trading, or (ii) if the Common Stock is not
listed or admitted to trading on a national securities
exchange, the mean between the closing high bid and low asked
quotations of Common Stock on the National Association of
Securities Dealers, Inc. Automated Quotation System, or any
similar system of automated dissemination of quotations of
securities prices then in common use, if so quoted, or (iii)
if not quoted as described in clause (ii), the mean between
the high bid and low asked quotations for Common Stock as
reported by the National Quotation Bureau Incorporated if at
least two securities dealers have inserted both bid and asked
quotations for Common Stock on at least 5 of the 10 preceding
days. If the Common Stock is quoted on a national securities
or central market system, in lieu of a market or quotation
system described above, the closing price shall be determined
in the manner set forth in clause (i) of the preceding
sentence if actual transactions are reported and in the manner
set forth in clause (ii) of the preceding sentence if bid and
asked quotations are reported but actual transactions are not.
If none of the conditions set forth above is met, the closing
price of Common Stock on any day or the average of such
closing prices for any period shall be the fair market value
of Common Stock as determined by a member firm of the New York
Stock Exchange, Inc. selected by the Issuer.
As used herein the term "Trading Days" with respect to
Common Stock means (i) if the Common Stock is listed or
admitted for trading on any national securities exchange, days
on which such national securities exchange is open for
business or (ii) if the Common Stock is quoted on the National
Association of Securities Dealers, Inc., Automated Quotation
System or any similar system of automated dissemination of
quotations of securities prices, days on which trades may be
made on such system.
Anything in this Section to the contrary notwithstanding the Issuer
shall be entitled to make such reductions in the Conversion Price,
in addition to those required by this Section, as it in its
discretion shall determine to be advisable in order that any stock
dividend, subdivision of shares, distribution of rights or warrants
to purchase stock or securities, or distribution of other assets
(other than cash dividends) hereafter made by the Issuer to its
stockholders shall not be taxable.
SECTION 12.6 Continuation of Conversion Privilege in Case of
Reclassification, Change, Merger, Consolidation or Sale of Assets.
If any of the following shall occur, namely: (a) any reclassifica-
tion or change of outstanding shares of Common Stock issuable upon
conversion of the Securities (other than a change in par value, or
from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination), (b) any consolida-
tion or merger to which the Issuer is a party as a result of which
the holders of Common Stock shall be entitled to receive stock,
other securities or other assets with respect to or in exchange for
Common Stock or (c) sale or conveyance of all or substantially all
of the property or business of the Issuer as an entirety, then the
Issuer, or such successor or purchasing corporation, as the case
may be, shall, as a condition precedent to such reclassification,
change, consolidation, merger, sale or conveyance, execute and
deliver to the Trustee a supplemental indenture providing that the
holder of each Security then outstanding shall have the right to
convert such Security into the kind and amount of shares of stock
and other securities and property receivable upon such reclassifi-
cation, change, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock issuable upon
conversion of such Security immediately prior to such reclassifi-
cation, change, consolidation, merger, sale or conveyance. Such
supplemental indenture shall provide for adjustments which shall be
as nearly equivalent as may be practicable to the adjustments
provided for in this Article. If, in the case of any such consoli-
dation, merger, sale or conveyance, the stock or other securities
and property receivable thereupon by a holder of shares of Common
Stock includes shares of stock or other securities and property of
a corporation other than the successor or purchasing corporation,
as the case may be, in such consolidation, merger, sale or
conveyance, then such other corporation shall, as a condition
precedent to such consolidation, merger, sale or conveyance,
execute and deliver to the Trustee such supplemental indenture
which shall contain such additional provisions to protect the
interests of the holders of the Securities as the Board of
Directors shall reasonably consider necessary by reason of the
foregoing. The provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers,
sales or conveyances.
Notice of the execution of each such supplemental indenture
shall be mailed to each holder of Securities at his address as the
same appears on the registry books of the Issuer.
Neither the Trustee nor any conversion agent shall be under
any responsibility to determine the correctness of any provisions
contained in any such supplemental indenture relating either to the
kind or amount of shares of stock or securities or property
receivable by holders of Securities upon the conversion of their
Securities after any such reclassification, change, consolidation,
merger, sale or conveyance or to any adjustment to be made with
respect thereto, but, subject to the provisions of Sections 5.1 and
5.2, may accept as conclusive evidence of the correctness of any
such provisions, and shall be protected in relying upon, the
Officers' Certificate (which the Issuer shall be obligated to file
with the Trustee prior to the execution of any such supplemental
indenture) with respect thereto.
SECTION 12.7 Notice of Certain Events. In case:
(a) the Issuer shall declare a dividend (or any other
distribution) payable to the holders of Common Stock otherwise
than in cash; or
(b) the Issuer shall authorize the granting to the
holders of Common Stock of rights to subscribe for or purchase
any shares of stock of any class or of any other rights; or
(c) the Issuer shall authorize any reclassification or
change of the Common Stock (other than a subdivision or
combination of its outstanding shares of Common Stock), or any
consolidation or merger to which the Issuer is a party and for
which approval of any stockholders of the Issuer is required,
or the sale or conveyance of all or substantially all the
property or business of the Issuer; or
(d) there shall be proposed any voluntary or involuntary
dissolution, liquidation or winding-up of the Issuer;
then, the Issuer shall cause to be filed at the office or agency
maintained for the purpose of conversion of the Securities as
provided in Section 3.2, and shall cause to be mailed to each
holder of Securities, at his address as it shall appear on the
registry books of the Issuer, at least 20 days before the date
hereinafter specified (or the earlier of the dates hereinafter
specified, in the event that more than one date is specified), a
notice stating the date on which (1) a record is expected to be
taken for the purpose of such dividend, distribution or rights, or
if a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend, distribu-
tion or rights are to be determined, or (2) such reclassification,
change, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding-up is expected to become effective and the
date, if any is to be fixed, as of which it is expected that
holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property
deliverable upon such reclassification, change, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding-up.
SECTION 12.8 Taxes on Conversion. The Issuer will pay any
and all documentary, stamp or similar taxes payable to the United
States of America or any political subdivision or taxing authority
thereof or therein in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant thereto;
provided, that the Issuer shall not be required to pay any tax
which may be payable in respect of any transfer involved in the
issue or delivery of shares of Common Stock in a name other than
that of the holder of the Securities to be converted and no such
issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Issuer the amount
of any such tax or has established, to the satisfaction of the
Issuer, that such tax has been paid. The Issuer extends no
protection with respect to any other taxes imposed in connection
with conversion of Securities.
SECTION 12.9 Issuer to Provide Stock. The Issuer shall
reserve, free from pre-emptive rights, out of its authorized but
unissued shares, sufficient shares to provide for the conversion of
the Securities from time to time as such Securities are presented
for conversion, provided, that nothing contained herein shall be
construed to preclude the Issuer from satisfying its obligations in
respect of the conversion of Securities by delivery of repurchased
shares of Common Stock which are held in the treasury of the
Issuer.
If any shares of Common Stock to be reserved for the purpose
of conversion of Securities hereunder require registration with or
approval of any governmental authority under any Federal or State
law before such shares may be validly issued or delivered upon
conversion, then the Issuer covenants that it will in good faith
and as expeditiously as possible endeavor to secure such registra-
tion or approval, as the case may be, provided, that nothing in
this Section shall be deemed to affect in any way the obligations
of the Issuer to convert Securities into Common Stock as provided
in this Article.
Before taking any action which would cause an adjustment
reducing the Conversion Price below the then par value, if any, of
the Common Stock, the Issuer will take all corporate action which
may, in the Opinion of Counsel, be necessary in order that the
Issuer may validly and legally issue fully paid and non-assessable
shares of Common Stock at such adjusted Conversion Price.
The Issuer covenants that all shares of Common Stock which may
be issued upon conversion of Securities will upon issue be fully
paid and non-assessable by the Issuer and free of pre-emptive
rights and, except as provided in Section 12.8, the Issuer will pay
all taxes and charges with respect to the issuance thereof.
SECTION 12.10 Disclaimer of Responsibility for Certain
Matters. Neither the Trustee nor any agent of the Trustee shall at
any time be under any duty or responsibility to any holder of
Securities to determine whether any facts exist which may require
any adjustment of the Conversion Price, or with respect to the
Officers' Certificate referred to in Section 12.5(g), or with
respect to the nature or extent of any such adjustment when made,
or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same.
Neither the Trustee nor any agent of the Trustee shall be account-
able with respect to the validity or value (or the kind or amount)
of any shares of Common Stock, or of any securities or property,
which may at any time be issued or delivered upon the conversion of
any Security; and neither the Trustee nor any conversion agent
makes any representation with respect thereto. Neither the Trustee
nor any agent of the Trustee shall be responsible for any failure
of the Issuer to issue, register the transfer of or deliver any
shares of Common Stock or stock certificates or other securities or
property upon the surrender of any Security for the purpose of
conversion or, subject to Sections 5.1 and 5.2, to comply with any
of the covenants of the Issuer contained in this Article.
SECTION 12.11 Return of Funds Deposited for Redemption of
Converted Securities. Any funds which at any time shall have been
deposited by the Issuer or on its behalf with the Trustee or any
other paying agent for the purpose of paying the principal of and
interest on any of the Securities and which shall not be required
for such purposes because of the conversion of such Securities, as
provided in this Article, shall after such conversion be repaid to
the Issuer by the Trustee or such other paying agent.
ARTICLE THIRTEEN
REDEMPTION OF SECURITIES AT HOLDER'S OPTION
SECTION 13.1 Right to Redemption. In the event that a
Redemption Event or an Asset Sale Event, or both, shall have
occurred, then subject to the terms and conditions of this Article
Thirteen, each Securityholder shall have the right, at the
Securityholder's option, to require the Issuer to redeem all of the
Securityholder's Securities, or any portion of the principal amount
thereof that is an integral multiple of $1,000, for cash at a
redemption price of 101% of the principal amount, together in each
case with accrued interest thereon to the Redemption Date; provided
that, in the case of an Asset Sale Event, (i) the aggregate amount
of funds applied by the Issuer to redeem Securities pursuant to
this Article Thirteen shall not exceed the aggregate cash proceeds
of such Asset Sale Event less, in the case of an Asset Sale Event
with respect to LIS, any amount that the Issuer is required to
reinvest in LIS pursuant to the agreements governing or related to
such Asset Sale Event and (ii) in the event that the Issuer
receives elections to require the Issuer to redeem Securities at an
aggregate redemption price in excess of the aggregate amount of
funds to be applied by the Issuer to redeem Securities in accor-
dance with clause (i), the Issuer will redeem a ratable principal
amount of each electing Securityholder's Securities.
The "Redemption Date" shall be the sixty-fifth day after the
date on which a Redemption Event or Asset Sale Event shall have
occurred.
SECTION 13.2 Applicability of Article. Redemption of
Securities in accordance with this Article Thirteen shall be at the
election of each Securityholder and shall be made in accordance
with the provisions of this Article.
SECTION 13.3 Notice of Redemption Event and Asset Sale
Event. Unless the Issuer shall have theretofore called all the
outstanding Securities for redemption pursuant to Article Eleven,
notice of the occurrence of a Redemption Event or an Asset Sale
Event, or both, shall be given by first-class mail, postage
prepaid, mailed not more than thirty days after the occurrence of
such Redemption Event or Asset Sale Event, or both, as the case may
be, to each Securityholder at his address appearing in the Security
register and to the Trustee, but failure to give such notice by
mailing in the manner herein provided to the Securityholder or to
the Trustee, or any defect in the notice to any Securityholder or
to the Trustee, shall not affect the validity of the proceedings
for the redemption of any other Securities.
All such notices shall state:
(a) the events constituting the Redemption Event or
Asset Sale Event, or both;
(b) the Redemption Date and the date by which the
redemption right must be exercised;
(c) that the redemption price will be 101% of the
principal amount of the Securities a Securityholder elects to
redeem, plus accrued interest thereon;
(d) that on the Redemption Date the redemption price
will become due and payable upon each Security with respect to
which a Securityholder has elected redemption, and that
interest thereon shall cease to accrue on and after such date;
(e) the place or places where such Securities are to be
surrendered for payment of the redemption price (each of which
shall be an office or agency maintained by the Issuer pursuant
to Section 3.2); and a description of the procedure which a
Securityholder must follow to exercise its redemption right
including a form of the irrevocable written notice referred to
in Section 13.4; and
(f) the Conversion Price then in effect, the date on
which the right to convert the principal amount of the
Securities to be redeemed will terminate and the place or
places where such Securities may be surrendered for conversion
(each of which shall be an office or agency maintained by the
Issuer pursuant to Section 3.2).
Notice of a Redemption Event or Asset Sale Event, or both, as
the case may be, shall be given by the Issuer, or by the Trustee at
the Issuer's request in the name and at the expense of the Issuer.
No failure of the Issuer to give the foregoing notice shall
limit any Securityholder's right to require the redemption of
Securities pursuant to this Article Thirteen.
SECTION 13.4 Notice of Election. A Securityholder electing
to require redemption of all of such Securityholder's Securities or
any portion thereof that is an integral multiple of $1,000 in
principal amount, shall make such election by delivering to the
office or agency to be maintained by the Issuer pursuant to Section
3.2 not later than the fifth day prior to the Redemption Date a
validly executed notice of election ("Notice of Election") setting
forth the name of the Securityholder, the principal amount of the
Securities, or portions thereof, with respect to which an election
to require redemption is being made, and a statement that the
election to require redemption is being made thereby. Such Notice
of Election shall be irrevocable absent the written consent of the
Issuer.
Upon presentation of any Security redeemed in part only, the
Issuer shall execute and the Trustee shall authenticate and deliver
to the holder thereof, at the expense of the Issuer, a new Security
or Securities, of authorized denominations, in principal amount
equal to the unredeemed portion of the Securities so presented.
SECTION 13.5 Deposit of Funds. At least one business day
prior to the Redemption Date, the Issuer will deposit with the
Trustee or with one or more paying agents (or, if the Issuer is
acting as its own paying agent, set aside, segregate and hold in
trust as provided in Section 3.4) an amount of money sufficient to
pay 101% of the principal amount of, and accrued interest on, all
the Securities (or portions thereof) with respect to which properly
completed and validly executed Notices of Election shall have been
delivered pursuant to Section 13.4; provided that any semi-annual
payment of interest becoming due on the Redemption Date shall be
payable to the holder of such Securities registered as such on the
relevant record date subject to the terms and provisions of Section
2.4 hereof.
SECTION 13.6 Securities Payable on Redemption Date. The
Securities with respect to which Securityholders shall have elected
to require redemption shall, on the Redemption Date, become due and
payable at the redemption price as set forth in Section 13.1, and
from and after such date (unless the Issuer shall default in the
payment of the redemption price) such Securities shall cease to
bear interest. Upon surrender of any Security for redemption in
accordance with any Notice of Election, such Security shall be
redeemed by the Issuer at the redemption price set forth in Section
13.1.
If any Security to be redeemed shall not be so paid upon
surrender thereof for redemption, the amount payable, but not paid,
to a Securityholder shall, until paid, bear interest from the
Redemption Date at the rate borne by the Security.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of November 1, 1991.
LOMAS FINANCIAL CORPORATION
By /s/JAMES L. CROWSON
---------------------------------
Name: James L. Crowson
Title: Senior Vice President-
General Counsel
[CORPORATE SEAL]
Attest:
By /s/ROBERT E. BYERLEY, JR.
-------------------------------
Name: Robert E. Byerley, Jr.
Title: Senior Vice President,
Treasurer and
Assistant Secretary
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By /s/SUSAN L. NEEDHAM
---------------------------------
Name: Susan L. Needham
Title: Vice President and
Trust Officer
[CORPORATE SEAL]
Attest:
By /s/JOANNE GULLIVER
----------------------------
Name: JoAnne Gulliver
Title: Vice President and
Trust Officer
<PAGE>
SCHEDULE I
Liens Existing as of the Date of this Indenture
NONE
