
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 15USC77nnn]

 
                      TITLE 15--COMMERCE AND TRADE
 
               CHAPTER 2A--SECURITIES AND TRUST INDENTURES
 
                    SUBCHAPTER III--TRUST INDENTURES
 
Sec. 77nnn. Reports by obligor; evidence of compliance with 
        indenture provisions
        

(a) Periodic reports

    Each person who, as set forth in the registration statement or 
application, is or is to be an obligor upon the indenture securities 
covered thereby shall--
        (1) file with the indenture trustee copies of the annual reports 
    and of the information, documents, and other reports (or copies of 
    such portions of any of the foregoing as the Commission may by rules 
    and regulations prescribe) which such obligor is required to file 
    with the Commission pursuant to section 78m or 78o(d) of this title; 
    or, if the obligor is not required to file information, documents, 
    or reports pursuant to either of such sections, then to file with 
    the indenture trustee and the Commission, in accordance with rules 
    and regulations prescribed by the Commission, such of the 
    supplementary and periodic information, documents, and reports which 
    may be required pursuant to section 78m of this title, in respect of 
    a security listed and registered on a national securities exchange 
    as may be prescribed in such rules and regulations;
        (2) file with the indenture trustee and the Commission, in 
    accordance with rules and regulations prescribed by the Commission, 
    such additional information, documents, and reports with respect to 
    compliance by such obligor with the conditions and covenants 
    provided for in the indenture, as may be required by such rules and 
    regulations, including, in the case of annual reports, if required 
    by such rules and regulations, certificates or opinions of 
    independent public accountants, conforming to the requirements of 
    subsection (e) of this section, as to compliance with conditions or 
    covenants, compliance with which is subject to verification by 
    accountants, but no such certificate or opinion shall be required as 
    to any matter specified in clauses (A), (B), or (C) of paragraph (3) 
    of subsection (c) of this section;
        (3) transmit to the holders of the indenture securities upon 
    which such person is an obligor, in the manner and to the extent 
    provided in subsection (c) of section 77mmm of this title, such 
    summaries of any information, documents, and reports required to be 
    filed by such obligor pursuant to the provisions of paragraph (1) or 
    (2) of this subsection as may be required by rules and regulations 
    prescribed by the Commission; and
        (4) furnish to the indenture trustee, not less often than 
    annually, a brief certificate from the principal executive officer, 
    principal financial officer or principal accounting officer as to 
    his or her knowledge of such obligor's compliance with all 
    conditions and covenants under the indenture. For purposes of this 
    paragraph, such compliance shall be determined without regard to any 
    period of grace or requirement of notice provided under the 
    indenture.

The rules and regulations prescribed under this subsection shall be such 
as are necessary or appropriate in the public interest or for the 
protection of investors, having due regard to the types of indentures, 
and the nature of the business of the class of obligors affected 
thereby, and the amount of indenture securities outstanding under such 
indentures, and, in the case of any such rules and regulations 
prescribed after the indentures to which they apply have been qualified 
under this subchapter, the additional expense, if any, of complying with 
such rules and regulations. Such rules and regulations may be prescribed 
either before or after qualification becomes effective as to any such 
indenture.

(b) Evidence of recording of indenture

    If the indenture to be qualified is or is to be secured by the 
mortgage or pledge of property, the obligor upon the indenture 
securities shall furnish to the indenture trustee--
        (1) promptly after the execution and delivery of the indenture, 
    an opinion of counsel (who may be of counsel for such obligor) 
    either stating that in the opinion of such counsel the indenture has 
    been properly recorded and filed so as to make effective the lien 
    intended to be created thereby, and reciting the details of such 
    action, or stating that in the opinion of such counsel no such 
    action is necessary to make such lien effective; and
        (2) at least annually after the execution and delivery of the 
    indenture, an opinion of counsel (who may be of counsel for such 
    obligor) either stating that in the opinion of such counsel such 
    action has been taken with respect to the recording, filing, re-
    recording, and refiling of the indenture as is necessary to maintain 
    the lien of such indenture, and reciting the details of such action, 
    or stating that in the opinion of such counsel no such action is 
    necessary to maintain such lien.

(c) Evidence of compliance with conditions precedent

    The obligor upon the indenture securities shall furnish to the 
indenture trustee evidence of compliance with the conditions precedent, 
if any, provided for in the indenture (including any covenants 
compliance with which constitutes a condition precedent) which relate to 
the authentication and delivery of the indenture securities, to the 
release or the release and substitution of property subject to the lien 
of the indenture, to the satisfaction and discharge of the indenture, or 
to any other action to be taken by the indenture trustee at the request 
or upon the application of such obligor. Such evidence shall consist of 
the following:
        (1) certificates or opinions made by officers of such obligor 
    who are specified in the indenture, stating that such conditions 
    precedent have been complied with;
        (2) an opinion of counsel (who may be of counsel for such 
    obligor) stating that in his opinion such conditions precedent have 
    been complied with; and
        (3) in the case of conditions precedent compliance with which is 
    subject to verification by accountants (such as conditions with 
    respect to the preservation of specified ratios, the amount of net 
    quick assets, negative-pledge clauses, and other similar specific 
    conditions), a certificate or opinion of an accountant, who, in the 
    case of any such conditions precedent to the authentication and 
    delivery of indenture securities, and not otherwise, shall be an 
    independent public accountant selected or approved by the indenture 
    trustee in the exercise of reasonable care, if the aggregate 
    principal amount of such indenture securities and of other indenture 
    securities authenticated and delivered since the commencement of the 
    then current calendar year (other than those with respect to which a 
    certificate or opinion of an accountant is not required, or with 
    respect to which a certificate or opinion of an independent public 
    accountant has previously been furnished) is 10 per centum or more 
    of the aggregate amount of the indenture securities at the time 
    outstanding; but no certificate or opinion need be made by any 
    person other than an officer or employee of such obligor who is 
    specified in the indenture, as to (A) dates or periods not covered 
    by annual reports required to be filed by the obligor, in the case 
    of conditions precedent which depend upon a state of facts as of a 
    date or dates or for a period or periods different from that 
    required to be covered by such annual reports, or (B) the amount and 
    value of property additions, except as provided in paragraph (3) of 
    subsection (d) of this section, or (C) the adequacy of depreciation, 
    maintenance, or repairs.

(d) Certificates of fair value

    If the indenture to be qualified is or is to be secured by the 
mortgage or pledge of property or securities, the obligor upon the 
indenture securities shall furnish to the indenture trustee a 
certificate or opinion of an engineer, appraiser, or other expert as to 
the fair value--
        (1) of any property or securities to be released from the lien 
    of the indenture, which certificate or opinion shall state that in 
    the opinion of the person making the same the proposed release will 
    not impair the security under such indenture in contravention of the 
    provisions thereof, and requiring further that such certificate or 
    opinion shall be made by an independent engineer, appraiser, or 
    other expert, if the fair value of such property or securities and 
    of all other property or securities released since the commencement 
    of the then current calendar year, as set forth in the certificates 
    or opinions required by this paragraph, is 10 per centum or more of 
    the aggregate principal amount of the indenture securities at the 
    time outstanding; but such a certificate or opinion of an 
    independent engineer, appraiser, or other expert shall not be 
    required in the case of any release of property or securities, if 
    the fair value thereof as set forth in the certificate or opinion 
    required by this paragraph is less than $25,000 or less than 1 per 
    centum of the aggregate principal amount of the indenture securities 
    at the time outstanding;
        (2) to such obligor of any securities (other than indenture 
    securities and securities secured by a lien prior to the lien of the 
    indenture upon property subject to the lien of the indenture), the 
    deposit of which with the trustee is to be made the basis for the 
    authentication and delivery of indenture securities, the withdrawal 
    of cash constituting a part of the trust estate or the release of 
    property or securities subject to the lien of the indenture, and 
    requiring further that if the fair value to such obligor of such 
    securities and of all other such securities made the basis of any 
    such authentication and delivery, withdrawal, or release since the 
    commencement of the then current calendar year, as set forth in the 
    certificates or opinions required by this paragraph, is 10 per 
    centum or more of the aggregate principal amount of the indenture 
    securities at the time outstanding, such certificate or opinion 
    shall be made by an independent engineer, appraiser, or other expert 
    and, in the case of the authentication and delivery of indenture 
    securities, shall cover the fair value to such obligor of all other 
    such securities so deposited since the commencement of the current 
    calendar year as to which a certificate or opinion of an independent 
    engineer, appraiser, or other expert has not previously been 
    furnished; but such a certificate of an independent engineer, 
    appraiser, or other expert shall not be required with respect to any 
    securities so deposited, if the fair value thereof to such obligor 
    as set forth in the certificate or opinion required by this 
    paragraph is less than $25,000 or less than 1 per centum of the 
    aggregate principal amount of the indenture securities at the time 
    outstanding; and
        (3) to such obligor of any property the subjection of which to 
    the lien of the indenture is to be made the basis for the 
    authentication and delivery of indenture securities, the withdrawal 
    of cash constituting a part of the trust estate, or the release of 
    property or securities subject to the lien of the indenture, and 
    requiring further that if
            (A) within six months prior to the d`te of acquisition 
        thereof by such obligor, such property has been used or 
        operated, by a person or persons other than such obligor, in a 
        business similar to that in which it has been or is to be used 
        or operated by such obligor, and
            (B) the fair value to such obligor of such property as set 
        forth in such certificate or opinion is not less than $25,000 
        and not less than 1 per centum of the aggregate principal amount 
        of the indenture securities at the time outstanding,

    such certificate or opinion shall be made by an independent 
    engineer, appraiser, or other expert and, in the case of the 
    authentication and delivery of indenture securities, shall cover the 
    fair value to the obligor of any property so used or operated which 
    has been so subjected to the lien of the indenture since the 
    commencement of the then current calendar year, and as to which a 
    certificate or opinion of an independent engineer, appraiser, or 
    other expert has not previously been furnished.

The indenture to be qualified shall automatically be deemed (unless it 
is expressly provided therein that such provision is excluded) to 
provide that any such certificate or opinion may be made by an officer 
or employee of the obligor upon the indenture securities who is duly 
authorized to make such certificate or opinion by the obligor from time 
to time, except in cases in which this subsection requires that such 
certificate or opinion be made by an independent person. In such cases, 
such certificate or opinion shall be made by an independent engineer, 
appraiser, or other expert selected or approved by the indenture trustee 
in the exercise of reasonable care.

(e) Recitals as to basis of certificate or opinion

    Each certificate or opinion with respect to compliance with a 
condition or covenant provided for in the indenture (other than 
certificates provided pursuant to subsection (a)(4) of this section) 
shall include (1) a statement that the person making such certificate or 
opinion has read such covenant or condition; (2) a brief statement as to 
the nature and scope of the examination or investigation upon which the 
statements or opinions contained in such certificate or opinion are 
based; (3) a statement that, in the opinion of such person, he has made 
such examination or investigation as is necessary to enable him to 
express an informed opinion as to whether or not such covenant or 
condition has been complied with; and (4) a statement as to whether or 
not, in the opinion of such person, such condition or covenant has been 
complied with.

(f) Parties may provide for additional evidence

    Nothing in this section shall be construed either as requiring the 
inclusion in the indenture to be qualified of provisions that the 
obligor upon the indenture securities shall furnish to the indenture 
trustee any other evidence of compliance with the conditions and 
covenants provided for in the indenture than the evidence specified in 
this section, or as preventing the inclusion of such provisions in such 
indenture, if the parties so agree.

(May 27, 1933, ch. 38, title III, Sec. 314, as added Aug. 3, 1939, ch. 
411, 53 Stat. 1167; amended Pub. L. 101-550, title IV, Sec. 413, Nov. 
15, 1990, 104 Stat. 2729.)


                               Amendments

    1990--Subsec. (a). Pub. L. 101-550, Sec. 413(1)-(6), in introductory 
provision substituted ``Each'' for ``The indenture to be qualified shall 
contain provisions requiring each'' and inserted ``shall'' after 
``thereby'' and in pars. (1) to (3) struck out ``to'' after the 
paragraph designation, and directed the addition of par. (4) at the end 
which was executed by inserting par. (4) after par. (3) to reflect the 
probable intent of Congress.
    Subsec. (b). Pub. L. 101-550, Sec. 413(7), (8), struck out ``such 
indenture shall contain provisions requiring'' before ``the obligor'' 
and substituted ``securities shall furnish'' for ``securities to 
furnish''.
    Subsec. (c). Pub. L. 101-550, Sec. 413(9), (10), substituted ``The 
obligor'' for ``The indenture to be qualified shall contain provisions 
requiring the obligor'' and ``securities shall furnish'' for 
``securities to furnish''.
    Subsec. (d). Pub. L. 101-550, Sec. 413(11), (13), (14), substituted 
``the obligor upon the indenture securities shall furnish to the 
indenture trustee a certificate or opinion of an engineer, appraiser, or 
other expert as to the fair value'' for ``such indenture shall contain 
provisions'' in introductory provisions and ``The indenture to be 
qualified shall automatically be deemed (unless it is expressly provided 
therein that such provision is excluded) to provide that'' for ``If the 
indenture to be qualified so provides,'' and ``duly authorized to make 
such certificate or opinion by the obligor from time to time'' for 
``specified in the indenture'' in penultimate sentence.
    Subsec. (d)(1) to (3). Pub. L. 101-550, Sec. 413(12), which directed 
that ``requiring the obligor upon the indenture securities to furnish to 
the indenture trustee a certificate or opinion of an engineer, appraiser 
or other expert as to the fair value'' be struck out after the paragraph 
designations in pars. (1) to (3), was executed by striking out 
``requiring the obligor upon the indenture securities to furnish to the 
indenture trustee a certificate or opinion of an engineer, appraiser, or 
other expert as to the fair value'', as the probable intent of Congress.
    Subsec. (e). Pub. L. 101-550, Sec. 413(15), inserted ``(other than 
certificates provided pursuant to subsection (a)(4) of this section)'' 
after ``indenture''.

                          Transfer of Functions

    For transfer of functions of Securities and Exchange Commission, 
with certain exceptions, to Chairman of such Commission, see Reorg. Plan 
No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 
1265, set out under section 78d of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 77iii, 77mmm, 77ooo, 77rrr 
of this title.
